Good afternoon, everyone. This is the Alliance Entertainment webinar. We'll be getting started in about six minutes, at a quarter after the hour. Hi, Jeff. Can you hear me? Yes, I'm here. Okay, Jeff. Well, that's great. Amanda, you joined as well. Yeah. Thank you, Amanda. We were speaking backstage just a moment ago. All right. We'll wait for this thing to get started. The way it usually happens is, at a quarter after, I will introduce everyone, read the safe harbor, and then Alliance will present. There will be a Q&A, and we usually wrap up in about 45 minutes. Okay. More and more attendees are joining. Welcome. This is the Alliance Entertainment Webinar. We'll be getting started in five minutes, sorry, at a quarter after the hour. Hi, Bruce, this is Craig. Good to see you again. Hi, Craig. Hi. Yeah. We see you just fine, hear you as well. We've passed our tests. We have many people on already. Hello, this is the Alliance Entertainment webinar. We're going to be getting started in three minutes. Bruce, could you show your presentation just to make sure everything's working out? Yeah. Getting there. Thank you. Where'd my presentation go? There it is. Wow. Bruce, can we just see your presentation, please? Oh, I thought it was there. I'm sorry. Good, Craig? Thank you very much, Bruce. It looks perfect. This is the Alliance Entertainment Webinar. We'll be getting started in one minute. Hi, this is Craig with RedChip Companies. Thank you for joining today's event with Alliance Entertainment, which trades on the Nasdaq under the ticker AENT. With us today, we have Bruce Ogilvie, Executive Chairman of Alliance Entertainment, Jeff Walker, the CEO, and Amanda Gnecco, the Chief Financial Officer. We will begin with a brief presentation in a moment, and then we will answer your questions. Users may submit a question at any time by using the Q&A tool at the bottom of the Zoom window. Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management, constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Alliance team, please take it from here. Hi, Craig. Thank you very much. Thank you everybody for joining us today. On my screen here, you can see our investor presentation here, and there's a lot of little entertainment products that you can see here. These are just a sampling of all the products that we currently distribute out of our Kentucky warehouse in Shepherdsville, Kentucky. Roughly over 340,000 SKUs that we have in stock. What we are is a powerhouse of the collectibles culture. We're just a large-scale physical media distribution platform, and we carry all these products, and we think we are the go-to company, the go-to place to be your source of all these entertainment-type collectible products consisting of movies, music, video games, toys, collectibles. Music consists of LPs and CDs, as well as cassettes. Movies is a 4K Blu-ray, standard definition, SteelBook. In the gaming category, we have consoles, we have software, we have controllers, headsets, goggles, keyboards, and collectibles. It's a big wide area of products there that we carry there. With consumer products that are consisting of collectibles like Funko or Handmade by Robots, our brand, turntables, Bluetooth speakers, anything you can think of. We have to buy from all these key suppliers. This would be our top 20% of our suppliers, which generates 80% of our revenue. It's not easy to get open with these suppliers. You have to have fiscal responsibility. You have to pay your bills on time. You have to add value to these brands, and be respectful of the marketplace. Actually stock product, that's probably the most important part is having actual product in stock ready to ship the same day, keep these buy buttons lit up, and keep retailers' shelves stocked. That's the job that we do for the marketplace there, and add value there. These are our major customers. Not all of our customers by any means. Our top 20% of our customers that generate 80% of our revenue there. Not easy to get open with these retailers. Retailers want to make sure that you're going to do a good job. You're going to meet their SLAs, which are very stringent. You're going to have whatever you represent that you say you have in stock, you'll actually stock, and you'll ship, and it'll be on a timely fashion. Just be respectful of their information, respect all that. As well as we service a lot of independent music stores, and other type stores there where they rely on us. From one store owner to a large chain store owner of 3,900 stores. We are their back end, their supplier, giving them important information, recommendations, telling them what we think is going to do well, not do well, that fits with their metrics of their store and their consumers that we have pretty good access to with all the information we keep on all the information we sell to our customers there. Just to help you understand our breakdown of revenue in all these different categories that we sell, we do over $1 billion in revenue. We've been pretty consistent in that $1 billion year-over-year. Within it, we have our ebbs and flows as things change and new releases come out in different categories there. You can see for the last 12 months, which I'll be talking about the quarter that just ended for us in December 31st. Vinyl is very consistent there, right around 32% of our revenue there. DVD, vinyl, you'll see it's growing. It grew from $227 million to over $333 million. You're probably going to be asking what's the growth that's driving that? It's mainly driven by the fact that we wanted to pivot and become much stronger in the video category. We have opportunities to expand our licensing opportunities. We were very early on a licensor of products starting with the Mill Creek division. Then, as time went on there, we were licensing product titles that you've probably never heard of from the major studios. We were able to expand that to take on some major studios. It basically all started with Disney back in 2022. They wanted to outsource their home entertainment department. You might be saying, "What's a home entertainment department?" When you have these big studios where they make movies, and then they got to exhibit those movies in movie theaters. Each one of those is a division that they have there. Making movies division, and then dealing with all the movie theater owners is another division, and then their next division would be doing some type of premium downloading. One of their other divisions is their home entertainment division. One way to reduce headcount and control costs and tighten their belts is it made sense for them to outsource their home entertainment department. That started with Disney. We picked up the bottom 1,800 titles. In 2023, we started distributing those. In 2024, Paramount decided that they wanted to outsource the home entertainment department, so we were very successful in taking over all of Paramount's titles in 2025, and that started in January 1st of 2025. Since then, we've added on some other studios, which is Amazon, and I'll talk more about that later. You can just see here that this is really a growth category there. We do have headwinds in gaming. Yes, we did go down from 291- 181. Couple of things out of our control. Just a change in the marketplace and Microsoft's philosophy of how they wanted to handle games and consoles. Nothing we did wrong, just how they primarily would be more of a subscription than a sell-through company. Nothing wrong with that. That's just something they wanted to do. We had a large retro arcade company that suffered financial issues, and they went out of business. Pretty much wound that business down last year, so that's why you're seeing that decline. Like I said, nothing we did wrong, just changes in the marketplace. Even with losing that much revenue, we were able to protect that revenue by growing our video area there. Certainly, if we didn't have the change in the philosophy of Microsoft, our revenue would've been way up year-over-year there, but still relatively pretty close between the two numbers there. CDs held pretty strong there, that $124 million versus $132 million range. Collectibles, which is our Handmade by Robots category there, plus as well as Funko. You can see that's gone up a little bit there. Electronics, which is turntables and other things related to that. Ancillary revenue is freight and some type of digital income in there. Overall, we think it's still very strong. We hate to see revenue go away in the gaming category, but we're certainly happy to see the video go up. We traded some gaming, which was low gross margin dollars compared to video, and so it was a trade for higher gross margin video dollars, swapping that out for gaming dollars. We feel overall that's a big win. You can see vinyl there increased by 5%, 16.3 million units shipped there. That's a lot of vinyl, and so we're very proud of that. Talking more on a revenue side here, you can see the billion dollars each year pretty consistently, $1.1 billion, $1 billion, $63 million. It's kind of funny that for our FY 2025, we're at $1.063 billion, and then you take our fiscal year end, fiscal year end was $630 million, FY 2025 there at $1.063 billion, and you take our 12/31/2025 numbers, and it's $1.063 billion. Just gives you an idea how close our revenue is there. That really helps because we're so diversified in other areas there. The big change there is our earnings per share has really grown. You can see from FY 2024, $0.09 per share. FY 2025 went to $0.30 per share. Taking the trailing 12 months, $0.43 per share. Primarily our stock trades on a multiple anywhere between 20x and 22x that trailing 12 months. We're a little bit below that right now from what we've been at our normal trading, but we think there's some more runway there for our stock value to improve. You can see the adjusted EBITDA grew as a percentage of revenue, went from 2.2%- 3.4%- 4.5%. For the quarter by itself, it came in at 5.01% there for the quarter ending 12/31/2025. Our stock today did close higher. This was yesterday. This was the day before. It was $6.68. Today, we're right close to $7. Our market cap is a little over that $350 million range. We're employee-owned. We think that's a really important thing to point out to everybody. Everybody's really invested and interested in the stake of our company. We just think that's the right way to look at it there. These financial highlights are the quarter there. You could see our earnings per share, as I say, went from $0.14- $0.18, up 33%. Net income $7.1 million-$9.4 million, up 33%. Adjusted EBITDA going from that $16.1 million- $18.5 million, which is that 5.01% there. Gross margin is also improved 10.7%-12.8% for the quarter there. Our revenue was down for the quarter there. That definitely had because I talked about the gaming side. That whole Microsoft effect. It was nothing we did wrong there. It was perceived negatively when we released our earnings. Not that we did anything wrong there, but the market had looked at the top line there. We certainly improved from where that was when we released our earnings, and I think our trend will just continue. This is just the two quarters combined. The revenue was basically flat for the two quarters, $623 million versus $623 million. You can see overall, earnings per share, $0.15-$0.28, up 91%. Net income, $7.5 million-$14.3 million. Adjusted EBITDA, $19.5 million-$30.7 million, 57% increase there. That gross margin, 10.9%-13.5%. We're firing on all cylinders here. We're going in the right direction. We've heard from our investors loud and clear, "What are you going to do to grow your gross margin?" We think we've accomplished that there, and we're on a path of that prosperity even more. I'm going to talk about our automation that we have in our big warehouse, that 340,000 SKU count there. At 50 million units a year we ship out of there, that's a 873,000 sq ft facility, which includes 200,000 sq ft of mezzanine. It's located in Louisville, Kentucky. Our peak scale is 261,000 units on a day there. We ship to over 76 countries. We've added this automation in there. Our big automation investment was something called AutoStore. Look at that big red box you see on the left-hand side of the screen there. That's one big picking zone that consists of a bunch of totes, and all these totes are like shelf locations all stacked on top of each other. There's no aisles in between. We're getting maximum use of square footage, and we're taking advantage of the cube. This is all in 22,000 sq ft. All our vinyl's now currently being shipped out of that there. We were able to take the headcount of pickers from 41 people who are walking around the mezzanine and picking off from the different shelf locations, and we're able to reduce that down to seven. That saves us anywhere from $3 million-$3.5 million a year. On top of that, we're paperless pick. We have handhelds. We have all this other additional sortation equipment there. We really believe investing in automation to make us very efficient, no different than what Amazon tries to accomplish. We're an omni-channel powerhouse of distribution, with a direct-to-consumer and our B2B. 175 online retailers count on us, the big guys are Walmart, Target, Amazon. We ship to over 35,000 storefronts. We're able to white label the shipments and drop ship directly to all these consumers. We make it look like it was shipped by a Walmart, Target, Amazon, or a Barnes & Noble, but it's all white labeled to look like they shipped it. Really, we're the back room that does all that. Direct-to-consumer is 37% of our revenue there. That's a growth category for us there. We just think that's really important where we can do both, where we have all this direct-to-consumer fulfillment, as well as we can ship to traditional brick-and-mortar retailers around the country, or export to other countries where we're allowed to. A large part of our backbone is empowering all these independent retailers. They really count on us with all the selection we have of vinyl records and movie and film and DVD and collectibles. There was a time there where record stores were on the endangered species list, but they couldn't be any stronger or better than they have been in their entire lifetime today. Vinyl has really made a big comeback. There's not a lot of large chain retailers like there used to be that they had to compete against. Your local record store is becoming the happening spot now in every community there. One thing that's really driving that success is Record Store Day. That's a big annual event that happens twice a year. The big one's in April, which is coming up for us. It's going to be a monster for us, like always. There's one on the Saturday after Black Friday. There's a little over 440 titles that are released. They're curated to make sure it's something that's really going to create value in the marketplace, that creates scarcity, it creates demand. All these record stores, every year, they send us a report after Record Store Day, and they always say the same thing. "I can't believe it was better this year than last year." We've been hearing that for over 16 years now, so it's very, very impressive. It all really contributes to our numbers. But the revenue's kind of split over. Our quarter ends 3/31, so some of our dollars have pre-Record Store Day shipments that we're able to do, and there's going to be post-Record Store Day shipments. It's not reflected in all one quarter. It's spread over two quarters there. We really feel it's important to build a moat around our business, so we've really focused on trying to get exclusive distribution and licensing. The exclusive distribution consists of movies, music labels that we are the exclusive distributor of, meaning that we'd have no competition. We've been able to expand that and go into licensing. We've actually licensed content that we're the exclusive distributor of, but that we're the license owner of selling that product there. It's broken up in multiple divisions, which I'll talk about in separate pages here. This is just kind of overview of the Alliance Home Entertainment is a video division. AMPED is our label division of music, consisting of CDs and LPs. Handmade by Robots is a new thing we just added last year. It's a product that we came out with our form factor, to be like a company like Funko, which is very successful. Our last one on the right there is Alliance Authentic, which is really putting an extra excitement into whole collecting vinyl experience. Alliance Home Entertainment. This is our movie distribution division there. We're trusted by studios. We started out with about 30 small studios, major independent studios that we distribute there. We've grown to 48. It's a combination of product that we're the exclusive distributor of. We work for these studios, and they pay us a distribution fee for doing the services. We charge them a pick, pack, and ship fee. We charge them a storage. We store their inventory. We ship it out there, we help them sell it. On top of that, we have studios where we are the licensor. Our three big powerhouses, I started out with Disney, which I mentioned. We also have Paramount, which is all of 2025. That started January 1st, 2025. The big news for us is that we just got Amazon MGM Studios. We've basically taken over their home entertainment department for Paramount and for Amazon, selling to all the major retailers. With this, that gave us a higher gross margin that we would normally make as just a distributor. It gave us additional revenue because now we're picking up customers. Before we had Paramount, we just sold to a lot of retailers that Paramount didn't sell to. When we took over the exclusive licensing Paramount and becoming the official seller for Paramount, then we now picked up Amazon as a customer of those products, as well as Walmart. That gave us additional revenue, and it also gave us more higher gross profit dollars of sales there. The same thing is going to happen now with Amazon. Everybody that's been following us was very happy and excited to see that Amazon and MGM Studios came our way. We just felt like it was great that Amazon picked us. It really represented us as a company, what a good job we're doing in the marketplace. It's recognized in the marketplace, and the fact that we were able to get that one is very exciting. A lot of people ask me what's going to happen with Warner Bros. Discovery and Warner Bros. on video. We don't know that for sure. It's no secret that Skydance, it looks like they'll be the successful bidder, or they are the successful bidder, and they'll close that transaction. From everything I've read in the press and the trade, they'd like to have that closed by the end of September 30th. Anything past September 30th, they have to pay for each shareholder some small amount for the stock because the deal has not closed. I'd say they're highly incentivized to close it as soon as possible. We don't see anything happening this year. You don't make changes during Q4 in any year. If anything's going to happen, we would probably see something at the start of next year. I think I've covered everything on this page here. AMPED is our independent music label division. These are all these independent labels that are real up-and-comers in the world there. We like to call them your do-it-yourselfers when they want to do it themselves, and it's very easy for an artist or a label to really be their own record label and not need the major record companies. What they want to do is they want to create the music, create the content, release it on streaming, get it onto the streaming sites there, get it on YouTube, get all the promotion, get on TikTok, get on all the social media to create all the buzz and the excitement. They can do that all themselves. It's very easy for an artist to do that or partner with a label. The one thing they can't do is they can't reach all the physical brick-and-mortar retailers that we reach. They come to us, and they say, "We need you to do this for us." They want to keep their digital. If they went to a major label, they would be asked to give their digital and their physical because the majors don't really want to do all this work unless they get the digital. We're happy to do all the physical and not take on the digital. We will do digital if they ask us to do, and we have the ability to do it. This is 110 labels. We keep picking up more labels. If you look at the overall market share between the majors, and I say the majors, I'm talking Sony Music, Warner Music Group, and Universal. They used to be as high as, like, 85%, 87% market share. That's kind of shrunk down to 80% now over the years. That's because the independents are getting stronger, and they're gaining more market share. It kind of puts everyone on a level playing field. When you have all the streaming services and you can do it yourself, you don't need a record company to do that work. If they can come up with creative ways to get success and get people interested in their music, they'll do just fine there, and we're getting the benefit of that, and that trend will continue as far as I can tell. Handmade by Robots. This is our foray and where we decided that what can we do to improve our gross profit and take advantage of the great relationship we have with the movie studios, the video game companies, the record companies, and all the collectibles. We were a big fan of Funko. We're a distributor of Funko. We saw all the good things they did and all the bad things that happened to them there. We just realized, well, we could probably take. If we could find our own form factor, a form factor is the little plastic piece that we use here, you can see on my screen here, and these are the different ones that we've licensed today that we're currently distributing. Take these and then treat it like a collectible company and not a toy company. We think we could be very successful and just grow it to be like $100 million a year business. Now, Funko in its peak was close to $1 billion in revenue. It was a $20 stock. Today, the revenue is probably down to about $800 million range there. We're just happy we can get it at $100 million, and that would add about $40 million a year of gross profit to our business. That would have the same effect like a Paramount did in our business and get it up there. so far, we're getting good traction on it. We've got a lot of figurines out there. For Record Store Day, we've got two really good titles out there, Ozzy Osbourne. I'm going blank on the second one. Jeff might correct me later there, but big demand for that. We're very happy with that. We're taking on more licensors and putting more content out. like I said, we're going to treat this like a collectible, not a toy company, and we're really excited about the progress we have on it so far. Well, we call this Alliance Authentic Page. This is the ultimate vinyl collectible. This is the brainchild of my partner, Jeff Walker. He's really caught on to something there. He reminded me when we were kids, and I'm a little older than Jeff by 10 years, but you could get mint coins in mint condition. They were encapsulated in a little plastic case. Well, same type of idea, except Jeff came up with a better idea there, is that we're going to make it a limited run. We'll number them, so that'll create scarcity. They will be encapsulated, and they are mint condition. They came straight from the pressing plant. They have not been circulated or sold to any record store. Nothing, no retail shop worn-ness would apply to the product. Then the last thing that's really, really important to a collector is authenticity, where it's authentic. One way we can make it authentic is we would use an NFC chip, not to be confused with any type of other chip there. It's just a technology that's used in credit cards today that everybody uses there. You put this chip inside there. It's not an RFID chip, it's an NFC chip, and it's not a non-fungible token, nothing like that. It's just a chip so that it creates a unique ID for that product. Basically, it's a one and done. You can only use the connection once, and then it creates a new connection there, and that'll connect with our website, our Alliance Authentic marketplace there, and that'll verify this is authentic product, it's legitimate, and it's not bootleg in any way. That's very important if you're a collector. You don't want to get any type of bootleg or counterfeit product there. With this is a way to do it there. It's not being done in the marketplace. We're the leaders in this area here. We've been getting a lot of great press about it there. There's a lot of interest. There's just a lot of opportunities. Our artists can get involved. They can be part and help us create more demand. It's only about six weeks to eight weeks old. It's created quite a stir of interest, and we see this as a great opportunity, and we're very excited. It's just a way, like Jeff likes to say, in a way, own a piece of vinyl history, and he's absolutely right. On our road to Alliance Authentic, the backbone of that NFC-enabled technology was a company called Endstate. Jeff met with that company and introduced me to them all, and they talked about what they were currently doing and what they came up with. We have two really smart individuals from this company. They started the company four or five years ago. I think that's the right number there. Bennett and Stephanie. Bennett was a teacher, professor at Boston College, teaching blockchain technology. They decided to take that idea. Stephanie's background is in a sneaker background there, and they say, "How do we take this technology and put it in clothing or purses or other items there?" Once again, it's just to combat against counterfeiting there. They got that company launched, and Jeff was very impressed with it all, and he showed it to us, and we shared it with our board, and we thought, "Wow, this could be a really great technology play for Alliance." With the advantage of our scale and our size, and Endstate being a pretty small little company there, we could really help them open a lot of doors. We're having some pretty serious conversations with companies where they would take this technology that we have patents on there, that we own, and we own all the IP, and show that to other companies, and so there's a lot of engagement going on and a lot of good opportunities. One thing you can see down here, in Europe, you can see the Global Brands Achievement compliance for the EU Ecodesign for Sustainable Products Regulation that's going to be starting in Europe in 2027. Certain products that are manufactured in Europe, they need to have some tracking capability, especially what's in it, what's it made of, and all that, just for the environmental purposes there. Companies, the only way they can do that is really putting a chip in the product. When you have that chip in the product, it's just a unique ID for that item there, and so you can track each SKU. A lot of things have the same barcode or the same part number, but you need a way of tracking the uniqueness of that item by having a unique code, whether it be an RFID chip. In this case, we're using an NFC chip there for this type of product, and it's working really well. We're pretty excited about all this. The individuals that started the company, we purchased the company. It's all public information, a $2 million purchase price there. Pretty big, huge earn-out is tied to the transaction. The founders are very motivated and excited to really grow this category and grow it to what they think it can be. There could be additional earn-outs up to $20 million paid over a three-year period there. That means good things for Alliance, and that means good things for the founders of this company and the creators who are really trying to drive this business for us. This is our entertainment group of brands that we have. About $80 million of our revenue is where we sell direct to retailers, consumers, excuse me. Sell to consumers out of these different brands. It really kind of keeps our finger on the pulse of what's going on in the marketplace. Another thing it does there is that we have situations where we have too much supply of inventory that we can't return. We use the marketplace to help us sell these products off. It's a lot cheaper to sell direct to the consumer than to try and sell your inventory to a third party guy that wants to buy it for $0.10 on the dollar. This helps us turn our inventory of any items that didn't sell very well, plus keeps our fingers on the marketplace of what customers are seeing, what they want there, always being sensitive and not to offend any of our wholesale partners that we wholesale to. Jeff and I built the company. I joined the company in 2001. Between Jeff and myself, we did over 16 acquisitions. We grew the company, Jeff and I, from $18 million in revenue up to $1.4 billion at its peak in 2012. We did that just by borrowing money, convincing sellers to carry the notes and do all that. The whole idea was we just needed to diversify. Either we're going to diversify or we're going to die, and I think we've been very successful in that. One of the reasons we wanted to become a public company is we would have a war chest available so that we could do a raise for any large acquisition, and be financially strong and stable. I think being a public company has really helped us with the movie studios, that they've agreed to do business with us, and we know none of our competitors are public. They don't have audited financials like we have. They don't have all their numbers out there. It just lets everybody know where we stand and where we are, and it just gives great confidence, and we still believe in that there. We definitely have our eyes looking for other acquisitions there. We just want to take advantage of licensing opportunities and expand our home entertainment department of collectibles there. We're very happy with Handmade by Robots. We talked about that. Endstate was an opportunity that came along. You can just see here that we have lots of things going for us, and we're always looking for the next best thing to make us better and more profitable. We have an outside board. They're all independent and outside. I think that's important. They all make us very stronger and better there. They're not insiders, so we're not going to drink our Kool-Aid, Jeff and I, and as well as our team. It keeps them up to date and aware of everything that's going on. An audit committee is very important there. Teri, she heads that there. She's outside, great years of experience there. I think you can just trust our financials and you can trust the company that we have strong leadership internally as well externally. This is the main executive leadership team. It's myself and Jeff here. I'm the Executive Chairman. Jeff's the CEO. Then we have Bob, Robert Blackburn, Amanda, and Warwick. That's our five-legged stool there at the top there. Then there's a great supporting cast there, a very strong sales leadership team all around here. We wouldn't be where we're at if it weren't for our sales guys. They really drive that revenue there. More on our sales leadership team there. A good strong cast, good team players we all like working with. More leadership team there, you'll see there. Very strong, deep bench there, and then an operations leadership side there. You can just see that we're very strong. I'm on our income page here. Just a couple highlights there that I've already talked about. You can see our gross margin has for the three months 10.7%-12.8%, so that's good there. Our interest expense as a percentage of revenue is coming down there. Our net income is growing as a percentage there. Those are all good things there. Just the highlights there. This is just for the six months, the two quarters combined. Excuse me there. Pretty much the same numbers you saw before. Nothing's really changed there. We're really focused on earnings per share. For the quarter there, for the six months, it was very strong there. You can see that a lot of people like to ask me, "What is your free cash flow?" I usually like to take the net income there, and then I usually add back any of the depreciation and amortization, and I add back the change in fair value of warrants. I think that's the best way to represent what our free cash flow is. This is just our balance sheet here. A lot of people look at first glance and say, "Gee, you guys don't have very much cash." We do have a lot of cash. The cash is our availability from our line of credit. We have traditional ABL line of credit. We borrow against that, against our AR and inventory. That helps us finance those two big assets there. If you look on here at this moment at 12/31, yes, our line of credit was $85 million, but we have $120 million. We have over $35 million worth of availability or cash on hand, plus the cash you see on the balance sheet here. Something that people kind of get concerned about, "Gee, why is your receivables so much higher?" Nothing wrong with our receivables, but as our business shifted for more Amazon and more Walmart, adding those movie studios, we give them more. It's usually 90-day terms. It takes longer to get paid. We're getting the sales, which is fantastic, but the receivables turn a little slower there. The other little thing we changed differently was that last year, well, when I say last year, in 2024, we were with a different lender, and our lender was charging us SOFR + 9.5%. We changed lenders on October 1st of last year to B of A, then we went down to SOFR + 1.625. We used to take advantage of a company called C2FO, which would allow us to have our receivables paid quicker. We're not really selling them, we're just getting paid quicker. The discount that they were charging us was about 8% annual. Well, that's a lot cheaper than paying 9.5% that was costing us. We did that, and that would make our receivables look lower because we would take the cash in really fast and pay our loan off, so it's skinny down our balance sheet. Well, since October 1st of last year, we stopped doing that because our borrowing cost dropped down to 5.5%. It really made no sense to have receivables paid quicker at 8%. We chose that purposely, and that makes our receivables look higher. Nothing's going bad. It's just the way we chose and how to handle that there. I just wanted to make people understand that better. Then the other thing is, "Why did your inventory grow?" Well, our inventory is usually higher at the end of December. It's usually heavier in the fourth quarter. This is compared to June 30th, which is our low point there. When we did the Paramount transaction in 2025, we did purchase right around $15 million worth of inventory. You say, "Well, why would you do that?" I said, "Well, it's very smart of us, instead of just paying an advanced license fee and then recouping against the license, which we would have no problem recouping, we chose to buy inventory that we felt we needed." We basically bought a two- to three-year supply of inventory of the items that were going to turn really well. Well, that pushed our inventory number up. The other reason we did is because we didn't want to have an asset on our books of $12 million or $15 million advance, which you can't borrow against. Having owned inventory, that helps our availability, and that allows us to have plenty of availability to borrow money. We think that's a win-win for everybody involved there, and that was our thought process behind it. I just highlight those two things. Those are things that I read after we released our earnings, and I just wanted to clarify that so everybody would understand that there. I think with that, I'm ready to open up for the Q&A. Craig, can you send us some questions when you're ready? My partner in crime, Jeff Walker, and Amanda, they're going to jump in and help me. Absolutely, Bruce. Thank you for that excellent presentation. To submit your question, click the Q&A button at the bottom of your Zoom window and type in your question in the text box that will show up when you click that Q&A button. We've already received some questions for the team here, Bruce. As premium formats and owned brands scale, how should we think about incremental margin contribution versus the legacy distribution business over the next two-three years? Hello, everybody. It's Jeff Walker here. I'll start off on the questions. I think here in this upcoming fiscal year, so fiscal year 2027 that will start July 1st, you're probably not going to see too much earnings impact in next fiscal year with these new brands that we're working to scale because, A, we're really investing in them to market them, work with our team, develop them, and so forth. We are starting to see some pretty significant sales increases with them as we're doing that work right now. I think where we'll start to see the profitability benefit of them is when we get into fiscal 2028 and fiscal 2029. We'll start to see some good results out of that. These new directions that we're going with Handmade by Robots, Alliance Authentic, even all the work with Endstate, those I'm super excited about because they're very high margin channels of our business, much different than regular distribution. The aspect here when we can scale those up can really have a major impact in our profitability and the bottom line. I don't think we will have much in our forecast for fiscal 2027 as far as net profitability from those categories. Thanks, Jeff. You've made a compelling case that physical media is evolving into a collectible category. What evidence are you seeing from consumers and retail partners that supports this behavioral shift? Oh, yeah. I'm all over collectibles right now, in all different formats. Really, not only in the music side and gaming side, movie side, collectible toys and figurines, but cards and so forth, all types of products. Collectibles are an enormous business right now, and that goes into cars and watches and all sorts of other things that people collect. I always enjoy an investor lunch or something. I always ask the group at the beginning, "What are some of the things you all collect?" There's just a crazy range of stuff that people collect. When you go into that, you really look at the authenticity of the product that you're collecting. Is it real? That's the number one thing, and then the condition of it becomes number two. With respect to physical media, I do have a comment on music in particular. We are seeing some really great sales in both vinyl and CD at this time. When you think about it, in this last year, we have a lot of new releases every week, but we'll take a Taylor Swift release or a Bruno Mars release, or Harry Styles or BTS. Those have all been huge releases in the last six months. If you think of it today, there isn't a single person that needs to buy a vinyl record or a CD today to listen to the music. We all have streaming platforms to listen to the music. People are choosing to buy those physical products just because they want to collect something, collect a form factor, and they're fans of the artists that they're collecting. It's very different than 20 years ago when you had to buy a CD or even farther back, when you had to buy the vinyl record so you could hear the music. We don't have to do that today. When you look at somebody like Taylor Swift, who sold right about 2 million units of physical product right off the bat, all those units are just because people are collectors and they're collecting. I look at that and go, "That's not going to stop." We're definitely seeing all age groups, obviously younger age group now getting into collecting. At the end of the day here, we all can't just live on our phone. We all like to have stuff that we're proud of and we're fans of and we're showing off to our friends. That's why you're seeing the world of collectibles in all stuff, including sports memorabilia and sports collectibles. Every category you can think of has collectibles, and that's smack dab where Alliance is at right now. We're primarily in the media stuff, but as we get into opportunities with Endstate, we're looking at doing partnerships with other collectible categories as well. It's a very exciting opportunity for us there. Thanks, Jeff. What characteristics do you prioritize when evaluating new IP or brands for acquisition? Do you have any potential acquisitions in the pipeline? Well, when you're as diverse as Alliance, we are today, we definitely have a lot of acquisition opportunities in a lot of different categories. There's really kind of two acquisition opportunities. I always look at it as two acquisition opportunities. One is something that is in a space that we're already in, where we're doing a consolidation acquisition, picking up market share, adding more volume. Those really consolidate a lot of expenses. Those are very accretive acquisitions. That's one category. The other category is one we look at, like we've done in the recent past with some new IP, like the Handmade by Robots got us into an IP brand. We like the brand. Even the word "robots" in the name is very hot today. Everyone's talking about robots, so that is a collectible item that a robot would make. It's right smack in the prime of what's popular in IP right now. In addition, when you look at something like Handmade by Robots, it's licensing movies, movie characters, musicians. It can be sports people. It's all people that, and IP that we are currently selling. Like right now, we have a very big pre-order. On the Paramount side, we have the "Scream 7" movie, and then we have the Handmade by Robots limited edition Scream character as a bundle being sold right now on pre-book. That's the type of stuff that we can do when we blend those together. We stepped out into a different category with Endstate, looking at how we're more in the collectible business and technology aspect. When you look at something, as Bruce described, an authentic vinyl or somebody that's doing grading on cards or collectibles or anything else, action figures, those encapsulated units really ultimately need an NFC digital chip in them that links to the blockchain. It can give you so many great benefits long term with that and really protects that collectible, even if it's graded or whatever, from being counterfeited and faked. Nobody can go and take an Alliance Authentic item and put an album in a case and make a fake one. It can't happen because you don't have the NFC chip there. Those acquisitions are great for us. We've been looking at a lot of different opportunities. As you guys probably expect, we pass on a lot of stuff that we don't think fits with us properly or isn't giving us the right amount of return on our investment. There's a lot of conversations where a seller thinks something's worth more than it is, and we typically wait those guys out. A lot of times they come back around later, and there's a more realistic opportunity for us. We're pretty robust in acquisition conversations. Is there any chance you get a distribution deal with Basic Fun! acquirer of Arcade1Up? Or is that revenue likely gone? Big Fun did acquire Arcade1Up. We did a huge amount of business with the arcades over the last, really since last five years, since 2020. We really built that business. We're still working on it with Basic Fun!! They don't have any product in the market yet. They've had to relicense the product, because the license owners are owed money and so forth. Unless they were going to cure those licenses, they have to get all new licenses and so forth. There's a delay in the product right now. That's part of what's causing the delay today. They are working towards trying to get product out here in probably late summer of this year, in time for fourth quarter. We're in conversations with them to see what we can do. We have obviously a lot of sales channels and so forth that we were selling that product to. There's some opportunity there. We've gotten to the point now where, in the last financials that Bruce went through in December, we were comping quite a bit of sales for Arcade1Up and had very minimal in the last quarter. Now we don't have a lot of comps of Arcade1Up sales because we didn't sell that much through 2025. You mentioned the possibility of securing the Warner catalog for 2027. How would that impact your revenue/earnings relative to the bump you got from Paramount? Well, we didn't say we were going to get it, so. Yeah, correct. Yeah. Um We can't really comment on something we have no control over. Yeah, we can't comment on that. You can look up the market share of Warner. They're one of the leading studios. They have to make their own decisions and so forth there. All I can comment on is that I believe that we're doing a fantastic job with Paramount right now, and the beginning words that we're getting from MGM is that they're very happy with what we're doing for them right now as well, and there's a lot of studio meetings and stuff this week and next week. There's a trade show called CinemaCon in Vegas next week. It's with all the movie theater owners in Vegas, and all the studios do their presentations for movies this year and into next year. There's a lot of conversations on studio stuff right now. All I can really say is I think that we're doing a great job with Paramount, and we've been starting off good with MGM. One last thing on MGM, we're very excited right now because the biggest title of the year is an MGM title, which is the Project Hail Mary that's in the movie theaters right now. That's looking like it was going to be a July street date. I think it's looking like now an August street date for the DVD on that. That will be a big title for us. We're just working on the Mercy title that is an MGM title as well. That's what we've been focused on right now. As far as what happens with other studios, they all have their different strategies and so forth there. We are well over the 5:00 Eastern hour, but we've got a lot of interest here, gentlemen and Amanda. We're going to take a few more questions if that's all right with you. Yep. Mm-hmm. Good. Any update on recouping money from Diamond distribution deal? I can take that, Jeff. Go for it, Bruce. Yeah. Our main thing that we're trying to recover is our deposit. That has not been determined yet, but there's roughly $8.5 million, and I can't say the judge is going to rule our way, but I certainly hope he does. It's coming to a conclusion here pretty soon. Over time, could authentication become a standard layer across your entire catalog, and what would that imply for margins and customer lifetime value? Well, let's start with the Alliance Authentic in vinyl. One of the things that is really a big aspect of that business is that we're creating the ultimate vinyl collectible, as Bruce mentioned earlier. One thing that's unique here is we're limiting these. There's a lot of titles where we're doing three units, five units, 10 units. We get up to 100 units. We're really mostly focused on the new releases that are coming through. You have a new release that comes out, a huge new release. They sell 200,000 units of a vinyl record, and we might be encapsulating 100 of those. When you look at it, and each one of those 100 is authenticated, encapsulated, and numbered. You look at that and go 10 years down the road, 20 years down the road, 50 years down the road, there's still 200,000 units of that vinyl out there. There could be 50,000 units that people bought and still have as a sealed vinyl record. What will be the most valuable 100 units are going to be these Alliance Authentic 100 units. Those are the pieces of history for that album. That's what we've created with this. I go back and say, well, 20 years ago, if we had encapsulated 10 units of Taylor Swift's first album, and there was only 10 of those authenticated and encapsulated, what would those be worth today? That's really what we're looking at in this category. Now, it's an offshoot of grading, and so forth. If you go into grading with cards as an example, you got PSA and CGC and all that aspect, there's grading in comic books and all sorts, sports memorabilia and all of that. That's been around for a long time. Those particular cases, they're grading an item, they give it a grade, and they're authenticating it. Now, they believe it's authentic, the ones that they're authenticating, but they still can't be 100% sure. The model that we're going down the road is if we have a vinyl encapsulated, we know it's authentic. We just launched our Handmade by Robots encapsulated. We've also just launched Funko Pops encapsulated, and we know that those are 100% authentic as well. We're not getting in the grading business. We're not going back to try to authenticate or grade a vinyl record that came out in the 1950s or any of that. The other part with the technology that goes in the future steps is working with the labels and so forth, where we can do autographed copies of a vinyl record. We might do 100 of the album, and then we might have five copies that are autographed. You can take that autograph and have a video of the artist signing it, and maybe a little message from the video. The ability to load that video of the signature and the message to the blockchain, so when you scan the item, you can watch the video of the artist actually signing it. That is the ultimate of even authenticity of a signature. As this goes farther down the road, there's huge opportunity here. The last part of this is when you have it in the blockchain there and you own one of these, so you own a vinyl record or any other encapsulated piece here, you register it, and you become a collector in the Alliance Authentic ecosystem. You can then, if you decide you want to sell it, you can scan it and list it for sale in our marketplace that we've developed on Alliance Authentic. If they're all sold out, if the 100 units of Bruno Mars are sold out and you want one of those, it says, "Make an offer," and your favorite number's 23, you can make an offer to the person who owns number 23, and they can decide whether they want to sell it or not. It's built as a full trading marketplace for these collectibles. On the Alliance side, we have a transaction fee similar to an eBay fee, that we capture on a peer-to-peer sale within that marketplace. You can see what the scope of what we're trying to develop here. As we continue to get collectors into our ecosystem that own at least one of these collectibles, then we start to build our collector base. Then it starts to come into the fact of you've got 10,000 collectors, and now you're making 30 units of a new album. What is the demand on that particular album when a lot of people want it? The ultimate component here with all of this is creating a piece of history that's encapsulated when it was brand-new, uncirculated, just like the coins. In this particular case, on vinyl, we're numbering them, so they're going to be very limited, which, as people who are in the collectible world know, the more limited is a huge aspect of collectibility. We're trying to put all those pieces together into one ultimate vinyl collectible. All right. Thank you very much, Jeff. Thank you, Bruce and Amanda also, for going over time with our many attendees who are still with us. Craig, one last thing- If you would like more information on Alliance Entertainment, reach us at 1-800-REDCHIP, or email us at aent@redchip.com. That's especially if you haven't had your question answered today. Just copy it and paste it into an email. Send it to us, and we'll get it to the AENT team. Please visit the information page created by RedChip for Alliance Entertainment. It's aentinfo.com. There, you can view and download the investor presentation and fact sheet and sign up for news alerts on Alliance Entertainment. Watch "Small Stocks, Big Money," RedChip's program featuring exciting small cap companies every Saturday night at 7:00 P.M. Eastern on Bloomberg USA. Finally, join RedChip's next webinar with Nexxen Technology on Thursday, April 9th at 4:15 P.M. U.S. Eastern. Register for all RedChip webinars at redchip.com/events. Thanks again to our thousands of participants today. Thank you, Bruce, Jeff, and Amanda. Thank you, Craig. Thanks, everybody. Thank you, Craig.