Dan O’Keefe: That’s correct.
Unidentified Analyst: …2017. Okay? So…
Dan O’Keefe: That’s correct.
Unidentified Analyst: …wouldn’t it be — wouldn’t it be helpful if just had a mass sale? Just because it seems like the consultants aren’t producing enough sales to reduce this inventory to normal levels.
Craig White: Yeah, that’s a good point. We are looking at options to do some mass inventory reductions. But whatever we do, we don’t want to damage our brand partners’ ability to continue to sell inventory. As far as selling it back to Usborne or other distributors, that’s not an option. They have no incentive to buy back inventory from us. So again, we’re looking at some major foundations. We’re looking at some other inventory reduction sales and things like that. So…
Heather Cobb: I’ll also just add, Ed, that one of the things that we know that you look to us to do for the company is to manage not only the short-term challenges as well as successes but with long term things in mind. And so I’ll just kind of reiterate what Craig said. We’re looking at what all of our options are now. But one of the last things that we want to do is some sort of short-term strategy that will end up in some sort of damaging long-term effect that none of us want to see. So while, yes, we are looking at various different creative and alternative ways to reduce this inventory, we definitely want to do it in a way that will allow us to continue the business as we’ve done with PaperPie as well as with our retail division for the long term.
Dan O’Keefe: And, Ed, you’ve — this is Dan. I’ll kind of add another thought as well. You mentioned the 2017 period. If you recall during that time, we were also over-inventoried. And the over inventory issue is we have excess quantities of our best-selling items. Those are the titles that we ordered the most quantity of, the titles that are our best sellers. And so in 2017, we did, it’s just we worked through it. And through 2017 to 2018, we reduced our inventory from the high 40s down to about $30 million, [reducing by about $18 million] (ph). And so that’s kind of the approach we’re taking right now too. We’re a little bit more aggressive on the purchasing than we were back in 2017 as Craig has explained earlier. But the excess inventory is working down and it’s in our best-selling items.
Unidentified Analyst: Okay, that’s understood. My other question, if you don’t mind, is about your relationship with Usborne. I read in the 10-K that you are in violation of the new distribution requirement. Is that correct? You’re not buying enough minimum amounts from Usborne. So you’re in violation, and they — according to the 10-K, they can cut you off at any minute because you’re violating the contract. What do you say to that? What kind of assurances can you say? Because they’re — you’ve been dealing with these people for decades. And also, they said that they’re not — they owe you $1 million from last year, and they’re not paying. To me, it’s like, whoa, you’ve been dealing with these people for decades, and they — they’re fighting you about $1 million discount rebate. To me, it’s like, woah, this is not right. So what do you say to that?
Craig White: Yeah, we have been dealing with Usborne for decades. I’ve just taken over and been dealing with them myself for the last two years. And recently, Nicola’s father, Peter Usborne, the founder of the company passed away. So I’m dealing exclusively with Nicola at this point. There’s no incentive for them to cancel the distribution agreement. That’s not to say they won’t, but they know that we just got to get this inventory situation back to a normal level and then we will get back to purchasing inventory at historic levels. So they have no options to replace us. They’re on the PaperPie side. They’re replacing us as a distributor for our retail division, but that’s going to be taking years and years for them to ramp up the inventory that’s necessary to service the retail division.
