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Financial Data and Key Metrics Changes - In Q2 2026, net revenues decreased to $4.6 million from $6.5 million in Q2 2025, representing a decline of approximately 29.2% [6] - Average active PaperPie brand partners fell to 5,800 from 13,900 year-over-year [6] - Losses before income taxes improved to $1.8 million from a loss of $2.5 million in the prior year [6] - Net loss decreased to $1.3 million compared to a loss of $1.8 million, with loss per share improving to $0.15 from $0.22 [7] - Year-to-date net revenues were $11.7 million, down from $16.5 million, with average active brand partners at 6,800 compared to 13,700 [7] Business Line Data and Key Metrics Changes - The PaperPie division experienced a significant decline in brand partner levels, attributed to a challenging sales environment and lack of new product introductions for 18 months [3][4] - The company is focusing on increasing brand partner counts and improving technology to attract younger demographics, specifically Millennials and Gen Z [4][5] Market Data and Key Metrics Changes - The retail side of the business showed steady performance, particularly in specialty, toy, and gift markets, indicating strong relationships with retail partners [12] Company Strategy and Development Direction - The company is adopting a conservative phased approach to introduce new products, aiming for a post-building sale close in spring 2026 [4] - There is a focus on reducing costs and improving results, with a target to return to revenue growth by adding brand partners [5] - The company is exploring alternative financing options post-building sale, with a conservative approach to new credit lines [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging sales environment and the need to energize the sales force through new titles [4][26] - There is confidence in the upcoming sale of the Hilty Complex to improve financial stability and support future growth [13][20] Other Important Information - Inventory levels decreased from $44.7 million to $40.7 million, generating $4 million in cash flow used to pay down debts [8] - The bank has not renewed loan agreements, leading to a notice of default, but management remains confident in meeting obligations until the building sale is completed [8][13] Q&A Session Summary Question: Is the buyer group related to Tenmark Holdings? - Yes, the buyer group is related to Tenmark Holdings, which has significant real estate holdings in Oklahoma [16] Question: How much earnest money is entitled? - The earnest money is $100,000, which will remain in escrow until closing [17] Question: Expected net from the property sale after costs? - The company expects to net enough from the sale to support its plans, though specific figures are not disclosed [18][19] Question: Confidence in closing the sale at $32.2 million? - There is a very high degree of confidence in closing the sale at the expected price [20] Question: Status of establishing a new credit line? - The company is developing several options for financing, likely starting with a conservative $3 to $5 million [21] Question: Cost-cutting measures and potential for profitability? - Major cost impacts include interest expenses and aggressive discounting; the company is also working on reducing excess inventory [23][24] Question: Impact of new titles on brand partner count? - Introducing new titles is expected to help stem the loss of brand partners, but a comprehensive approach is needed for recovery [26][29] Question: Plans for reinstating dividends post-bank obligations? - The goal is to generate positive cash flow and potentially reinstate dividends, but this is not expected to happen for at least a couple of quarters [30][31] Question: Collateralized items under the bank agreement? - All assets, including the building, accounts receivable, inventory, equipment, and land, are cross-collateralized [35][37] Question: Plans for increasing brand partner count? - A multi-pronged approach is planned, including marketing initiatives and new product introductions targeting younger demographics [39][40]

Financial Data and Key Metrics Changes - In Q2 2026, net revenues decreased to $4.6 million from $6.5 million in Q2 2025, representing a decline of approximately 29.2% [6] - Average active PaperPie brand partners fell to 5,800 from 13,900 year-over-year [6] - Losses before income taxes improved to $1.8 million from a loss of $2.5 million in the prior year [7] - Net loss decreased to $1.3 million compared to a loss of $1.8 million, with loss per share improving to $0.15 from $0.22 [7] - Year-to-date net revenues were $11.7 million, down from $16.5 million, with average active brand partners at 6,800 compared to 13,700 [7][8] Business Line Data and Key Metrics Changes - The PaperPie division experienced a significant decline in brand partner levels, attributed to a challenging sales environment and lack of new product introductions for 18 months [3][4] - The company is focusing on increasing brand partner counts and improving technology to attract younger demographics, specifically Millennials and older Gen Z [4][5] Market Data and Key Metrics Changes - The retail side of the business showed steady performance, particularly in specialty, toy, and gift markets, indicating strong relationships with retail partners [12] Company Strategy and Development Direction - The company is adopting a conservative phased approach to product introductions, aiming for a post-building sale close in spring 2026 [4] - There is a focus on reducing costs and improving results, with a goal to return to revenue growth by adding brand partners [5] - The company is exploring alternative financing options post-building sale to ensure operational stability [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging sales environment and the need to energize the sales force through new titles [4][26] - There is confidence in the upcoming sale of the Hilty Complex to improve financial standing and support future growth [13][20] Other Important Information - Inventory levels decreased from $44.7 million to $40.7 million, generating $4 million in cash flow used to pay down debts [8] - The bank has not renewed loan agreements, leading to a notice of default, but management remains confident in meeting obligations until the building sale is completed [8][13] Q&A Session Summary Question: Is the buyer group related to Tenmark Holdings? - Yes, the buyer group is related to Tenmark Holdings, which has significant real estate holdings in Oklahoma [16] Question: How much earnest money is entitled? - The earnest money is $100,000, which will remain in escrow until closing [17] Question: What is the expected net from the property sale? - The company expects to net enough from the sale to support its plans, though specific figures are not disclosed [18] Question: Confidence in closing the sale at $32.2 million? - There is a very high degree of confidence in closing the sale at the expected price [20] Question: Plans for establishing a new credit line? - The company is developing several options for financing, with a conservative approach expected [21] Question: What costs have been cut and what remains? - Major cost impacts include interest expenses and aggressive discounting; ongoing cost-saving initiatives are in place [22][24] Question: How much of the decline in brand partners is due to lack of new titles? - The inability to introduce new titles has significantly impacted brand partner numbers, and new titles are expected to help stem losses [25][26] Question: Plans for reinstating dividends? - While the goal is to generate positive cash flow and reinstate dividends, it is not expected to happen immediately [30][31] Question: What collateralized items are involved in the bank agreement? - The bank agreement cross-collateralizes all assets, including the building, accounts receivable, inventory, equipment, and land [35][37] Question: Plans for increasing brand partner count? - A multi-pronged approach is planned, including marketing initiatives and new product introductions to attract younger demographics [39][40]

Financial Data and Key Metrics Changes - In Q2 2026, net revenues decreased to $4.6 million from $6.5 million in Q2 2025, representing a decline of approximately 29.2% [6] - Average active PaperPie brand partners fell to 5,800 from 13,900 year-over-year [6] - Losses before income taxes improved to $1.8 million from $2.5 million, while net loss decreased to $1.3 million from $1.8 million [6] - Year-to-date net revenues were $11.7 million compared to $16.5 million, a decline of approximately 29.1% [6] - Year-to-date losses before income taxes totaled $3.2 million, down from $4.2 million [6] Business Line Data and Key Metrics Changes - The PaperPie division experienced a significant decline in brand partner levels, attributed to a challenging sales environment and lack of new product introductions for 18 months [3][4] - The company is focusing on increasing brand partner counts and improving technology to attract younger demographics, specifically Millennials and older Gen Z [4][5] Market Data and Key Metrics Changes - The retail side of the business showed steady performance, particularly in specialty, toy, and gift markets, indicating a strong relationship with retail partners [12] - Despite a challenging broader selling environment, enthusiasm among brand partners remains high, contributing to a diversified revenue base [12] Company Strategy and Development Direction - The company is adopting a conservative phased approach to introduce new products, targeting a new generation of brand partners [4] - Efforts are being made to improve technology for a mobile-first impact and enhance the onboarding process for new brand partners [5] - The company is also focused on reducing costs and improving results, aiming for a return to revenue growth through increased brand partner recruitment [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging sales environment and the need for new product introductions to energize the sales force [4][28] - The company expects to complete the sale of its headquarters, which will help pay off bank loans and provide a foundation for future growth [13] - Management expressed confidence in emerging stronger and more resilient post-sale, with plans to explore financing options thereafter [13] Other Important Information - Inventory levels decreased from $44.7 million to $40.7 million, generating $4 million in cash flow used to pay down debts [8] - The bank has not renewed loan agreements, and the company is currently in default status, but continues to make payments [8][13] Q&A Session Summary Question: Is the buyer group related to Tenmark Holdings? - Yes, the buyer group has significant real estate holdings in Oklahoma and understands the area well [17] Question: How much earnest money is entitled? - The earnest money is $100,000, which will likely stay in escrow until closing [18] Question: What is the expected net from the property sale after costs? - The company expects to net enough to initiate their plans post-sale [19] Question: Confidence level in closing the sale at $32.2 million? - There is a very high degree of confidence in closing the sale at that level [21] Question: Status of establishing a new credit line? - The company is developing several options for financing, likely starting with a conservative $3 to $5 million [23] Question: What costs have been cut and what remains? - Major impacts on P&L include interest expenses and aggressive discounting; excess inventory and warehouse costs are also being addressed [25][26] Question: How much of the brand partner decline is due to lack of new titles? - The inability to introduce new titles has significantly impacted brand partner numbers, and new titles are expected to help stem losses [27][28] Question: Plans for reinstating dividends post-sale? - The company aims to generate positive cash flow and potentially reinstate dividends, but this is not expected for at least a couple of quarters [32] Question: What collateralized items are involved in the bank agreement? - The bank agreement cross-collateralizes all assets, including the building, accounts receivable, inventory, equipment, and land [36] Question: Plans for increasing brand partner count? - A multi-pronged approach is being implemented, including providing tools for current brand partners to recruit new ones and introducing new titles [40]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed financial statements, detailing financial performance and addressing going concern risks through planned real estate sales [Condensed Balance Sheets (Unaudited)](index=5&type=section&id=EDUCATIONAL%20DEVELOPMENT%20CORPORATION%20CONDENSED%20BALANCE%20SHEETS%20(UNAUDITED)) This section presents unaudited condensed balance sheets, detailing changes in assets, liabilities, and shareholders' equity | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | **Assets** | | | | Total current assets | $46,724,300 | $52,247,200 | | Total assets | $74,235,800 | $78,314,300 | | **Liabilities and Shareholders' Equity** | | | | Total current liabilities | $35,816,500 | $37,222,700 | | Total liabilities | $36,022,700 | $37,746,700 | | Total shareholders' equity | $38,213,100 | $40,567,600 | - Total assets **decreased by $4,078,500** from $78,314,300 at February 28, 2025, to $74,235,800 at August 31, 2025[11](index=11&type=chunk) - Total liabilities **decreased by $1,724,000** from $37,746,700 at February 28, 2025, to $36,022,700 at August 31, 2025[11](index=11&type=chunk) - Total shareholders' equity **decreased by $2,354,500** from $40,567,600 at February 28, 2025, to $38,213,100 at August 31, 2025[11](index=11&type=chunk) [Condensed Statements of Operations (Unaudited)](index=6&type=section&id=EDUCATIONAL%20DEVELOPMENT%20CORPORATION%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS%20(UNAUDITED)) This section presents unaudited condensed statements of operations, detailing net revenues, gross margin, operating expenses, and net loss | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net Revenues | $4,621,100 | $6,509,200 | $11,727,500 | $16,502,600 | | Gross Margin | $2,688,100 | $3,646,700 | $6,825,200 | $10,106,100 | | Total Operating Expenses | $4,511,600 | $6,142,200 | $10,213,200 | $14,280,600 | | Net Loss | $(1,294,700) | $(1,803,400) | $(2,369,900) | $(3,082,400) | | Basic and Diluted Loss Per Share | $(0.15) | $(0.22) | $(0.28) | $(0.37) | - Net revenues **decreased by 29.0%** for the three months ended August 31, 2025, and by **28.9%** for the six months ended August 31, 2025, compared to the prior year periods[12](index=12&type=chunk) - Net loss **improved (decreased) by 28.2%** for the three months ended August 31, 2025, and by **23.1%** for the six months ended August 31, 2025, compared to the prior year periods[12](index=12&type=chunk) [Condensed Statements of Comprehensive Loss (Unaudited)](index=7&type=section&id=EDUCATIONAL%20DEVELOPMENT%20CORPORATION%20CONDENSED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS%20(UNAUDITED)) This section presents unaudited condensed statements of comprehensive loss, including net loss and other comprehensive income components | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss | $(1,294,700) | $(1,803,400) | $(2,369,900) | $(3,082,400) | | Unrealized loss on interest rate exchange agreement | - | $(67,700) | - | $(44,800) | | Comprehensive loss | $(1,294,700) | $(1,871,100) | $(2,369,900) | $(3,127,200) | - Comprehensive loss **decreased by 30.8%** for the three months ended August 31, 2025, and by **24.3%** for the six months ended August 31, 2025, compared to the prior year periods[13](index=13&type=chunk) [Condensed Statements of Changes in Shareholders' Equity (Unaudited)](index=8&type=section&id=EDUCATIONAL%20DEVELOPMENT%20CORPORATION%20CONDENSED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY%20(UNAUDITED)) This section presents unaudited condensed statements of changes in shareholders' equity, detailing movements in common stock and retained earnings | Metric | February 28, 2025 | August 31, 2025 | | :----------------------------------- | :---------------- | :-------------- | | Common Stock (Amount) | $2,540,400 | $2,540,400 | | Capital in Excess of Par Value | $13,800,000 | $13,800,000 | | Retained Earnings | $37,303,000 | $34,933,100 | | Accumulated Other Comprehensive Loss | $(15,400) | $0 | | Treasury Stock (Amount) | $(13,060,400) | $(13,060,400) | | Total Shareholders' Equity | $40,567,600 | $38,213,100 | - Retained earnings **decreased by $2,369,900** from February 28, 2025, to August 31, 2025, primarily due to net losses[14](index=14&type=chunk) - Accumulated other comprehensive loss **improved from $(15,400) to $0**, reflecting a change in the fair value of the interest rate exchange agreement[14](index=14&type=chunk) [Condensed Statements of Cash Flows (Unaudited)](index=10&type=section&id=EDUCATIONAL%20DEVELOPMENT%20CORPORATION%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) This section presents unaudited condensed statements of cash flows, categorizing cash movements from operating, investing, and financing activities | Metric | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :---------------------------- | :---------------------------- | | Net cash provided by operating activities | $1,459,700 | $335,500 | | Net cash used in investing activities | $(263,900) | $(196,000) | | Net cash used in financing activities | $(900,000) | $(286,500) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $295,800 | $(147,000) | | Cash, cash equivalents and restricted cash - End of Period | $1,272,300 | $1,130,400 | - Net cash provided by operating activities **significantly increased to $1,459,700** for the six months ended August 31, 2025, from $335,500 in the prior year, primarily driven by a decrease in inventories[17](index=17&type=chunk)[141](index=141&type=chunk) - Cash used in investing activities **increased to $263,900**, mainly due to purchases of property, plant, and equipment, including software upgrades and building improvements[17](index=17&type=chunk)[136](index=136&type=chunk) - Cash used in financing activities **increased to $900,000**, primarily for payments on term debt[17](index=17&type=chunk)[137](index=137&type=chunk) [Notes to Condensed Financial Statements (Unaudited)](index=11&type=section&id=NOTES%20TO%20CONDENSED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section provides detailed notes to the unaudited condensed financial statements, offering additional context and disclosures [Note 1 – Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of presentation for the unaudited condensed financial statements, emphasizing GAAP compliance for interim reporting and the use of estimates - The Company's default status on its credit agreement and recurring operating losses raise **substantial doubt about its ability to continue as a going concern**[24](index=24&type=chunk)[144](index=144&type=chunk) - Management plans to alleviate going concern doubt by selling the Hilti Complex for **$32,200,000** to pay off bank debts, reducing inventory to generate cash flow, and rebuilding the number of active PaperPie Brand Partners[26](index=26&type=chunk)[27](index=27&type=chunk)[144](index=144&type=chunk) - New accounting standards (ASU 2025-05, ASU 2023-09, ASU 2024-03) related to credit losses, income tax disclosures, and expense disaggregation are being evaluated for their impact on future financial statements, with effective dates in fiscal 2026 and 2027[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 2 – Cash](index=13&type=section&id=Note%202%20%E2%80%93%20CASH) This note provides a reconciliation of cash, cash equivalents, and restricted cash, detailing the nature of restricted cash held by third-party merchant service processors | Metric | August 31, 2025 | August 31, 2024 | | :----------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $754,200 | $753,800 | | Restricted cash | $518,100 | $376,600 | | Total cash, cash equivalents and restricted cash | $1,272,300 | $1,130,400 | - Restricted cash **increased by $141,500** from August 31, 2024, to August 31, 2025, primarily due to funds held in reserve by merchant service processors and a certificate of deposit for credit card collateral[31](index=31&type=chunk) [Note 3 – Assets Held for Sale](index=13&type=section&id=Note%203%20%E2%80%93%20ASSETS%20HELD%20FOR%20SALE) The company has classified its Hilti Complex property and certain equipment as assets held for sale, with a purchase agreement for $32,200,000 - The Hilti Complex, appraised at $47,410,000 in November 2024, is under contract for sale at **$32,200,000**, with closing expected by November 25, 2025[32](index=32&type=chunk)[36](index=36&type=chunk) - Upon sale, the Company will assign existing tenant leases to the buyer and enter a new 10-year lease for its occupied space at an initial rate of **$8.00 per square foot** with annual escalations[33](index=33&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Total carrying value of assets held for sale | $19,309,600 | $19,277,000 | [Note 4 – Inventories](index=14&type=section&id=Note%204%20%E2%80%93%20INVENTORIES) This note details the composition of inventories, distinguishing between current and noncurrent portions, and the overall inventory valuation allowance | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Current Product inventory | $24,086,100 | $29,530,100 | | Current Inventory valuation allowance | $(462,200) | $(430,500) | | Noncurrent Product inventory | $17,827,100 | $16,326,500 | | Noncurrent Inventory valuation allowance | $(789,400) | $(734,000) | | Total Inventories net | $40,661,600 | $44,692,100 | - Current product inventory **decreased by $5,444,000**, while noncurrent product inventory **increased by $1,500,600**[41](index=41&type=chunk) - The total inventory valuation allowance **increased from $1,164,500** at February 28, 2025, to **$1,251,600** at August 31, 2025[41](index=41&type=chunk) [Note 5 – Leases](index=15&type=section&id=Note%205%20%E2%80%93%20LEASES) The company engages in both lessee and lessor operating lease arrangements, detailing right-of-use assets, lease liabilities, and future minimum rental payments | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Right-of-use assets | $768,200 | $1,108,100 | | Current lease liabilities | $675,000 | $697,000 | | Long-term lease liabilities | $93,200 | $411,100 | | Weighted-average remaining lease term (months) | 13.8 | 18.4 | | Weighted-average discount rate | 5.46% | 4.89% | - Future minimum rental payments under operating leases (lessee) total **$794,900**, with **$346,300** due in fiscal year 2026 and **$448,600** in fiscal year 2027[48](index=48&type=chunk) - Future minimum payments receivable under operating leases (lessor) total **$19,341,600**, with significant amounts extending through 2030 and thereafter[52](index=52&type=chunk) [Note 6 – Debt](index=17&type=section&id=Note%206%20%E2%80%93%20DEBT) This note provides a comprehensive overview of the company's debt structure, including a line of credit and two term loans, and details the recent credit agreement default | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Line of credit | $4,198,100 | $4,198,100 | | Floating rate Term Loan | $15,725,000 | $16,250,000 | | Fixed rate Term Loan | $10,175,900 | $10,550,900 | | Total term debt | $25,900,900 | $26,800,900 | | Current maturities of long-term debt | $25,807,900 | $26,685,500 | | Long-term debt, net | $0 | $0 | - The credit agreement with BOKF, NA **expired on September 19, 2025**, with unpaid balances on Term Loans and Revolving Loan, resulting in a Notice of Default on September 30, 2025[65](index=65&type=chunk)[66](index=66&type=chunk) - The default triggers an **additional 2% default interest rate** on existing interest rates, and the lender reserves rights to demand payment or liquidate collateral[66](index=66&type=chunk) - The Revolving Loan interest rate increased to Term SOFR Rate + 8.00% (effective rate **12.36%** at August 31, 2025) as per the Ninth Amendment[63](index=63&type=chunk)[64](index=64&type=chunk) [Note 7 – Business Concentration](index=19&type=section&id=Note%207%20%E2%80%93%20BUSINESS%20CONCENTRATION) The company has a significant business concentration with Usborne Publishing Limited, facing risks due to non-compliance with the distribution agreement and a disputed rebate - The Company did not meet minimum purchase requirements and failed to supply a required letter of credit under its distribution agreement with Usborne, giving Usborne the right to terminate[67](index=67&type=chunk) - Usborne has refused to pay a **$1.0 million volume rebate** owed to the Company from fiscal 2022 purchases[67](index=67&type=chunk) | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | PaperPie division Usborne product revenues | $1,692,200 | $1,848,000 | $4,231,300 | $5,561,600 | | % of total PaperPie Product revenues | 48.2% | 36.6% | 45.8% | 40.4% | | Total Usborne inventory owned | $21,838,800 (Aug 31, 2025) | $23,696,800 (Feb 28, 2025) | | | [Note 8 – Loss Per Share](index=19&type=section&id=Note%208%20%E2%80%93%20LOSS%20PER%20SHARE) This note details the calculation of basic and diluted loss per share, which were identical due to the anti-dilutive effect of potential common shares | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss applicable to common shareholders | $(1,294,700) | $(1,803,400) | $(2,369,900) | $(3,082,400) | | Basic Weighted average shares outstanding | 8,583,201 | 8,272,217 | 8,583,201 | 8,269,494 | | Diluted Weighted average shares outstanding | 8,583,201 | 8,272,217 | 8,583,201 | 8,269,494 | | Basic Loss per share | $(0.15) | $(0.22) | $(0.28) | $(0.37) | | Diluted Loss per share | $(0.15) | $(0.22) | $(0.28) | $(0.37) | - Loss per share **improved (less negative) from $(0.22) to $(0.15)** for the three months and from **$(0.37) to $(0.28)** for the six months ended August 31, 2025, compared to the prior year[70](index=70&type=chunk) [Note 9 – Share-Based Compensation](index=20&type=section&id=Note%209%20%E2%80%93%20SHARE-BASED%20COMPENSATION) This note outlines the company's accounting policy for share-based compensation, noting no expense was recognized for the current periods due to vested plans - All remaining shares under the 2019 LTI Plan vested on February 28, 2025, and no shares were issued under the 2022 LTI Plan due to unmet financial targets[73](index=73&type=chunk)[74](index=74&type=chunk) | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Share-based compensation expense - net of forfeitures | $0 | $100,800 | $0 | $201,600 | - No share-based compensation expense was recognized for the three and six months ended August 31, 2025, compared to **$100,800** and **$201,600** in the prior year periods, respectively[75](index=75&type=chunk) [Note 10 – Shipping and Handling Costs](index=21&type=section&id=Note%2010%20%E2%80%93%20SHIPPING%20AND%20HANDLING%20COSTS) This note details shipping and handling costs, classified as operating and selling expenses, which decreased significantly due to reduced order volume | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Shipping and handling costs | $571,800 | $968,500 | $1,377,000 | $2,515,100 | - Shipping and handling costs **decreased by 41.0%** for the three months and **45.2%** for the six months ended August 31, 2025, compared to the prior year, primarily due to lower order volume[76](index=76&type=chunk) [Note 11 – Business Segments](index=21&type=section&id=Note%2011%20%E2%80%93%20BUSINESS%20SEGMENTS) The company operates through two reportable segments, PaperPie and Publishing, both experiencing decreased net revenues, with PaperPie's operating loss improving | Segment | Three Months Ended Aug 31, 2025 (Net Revenues) | Three Months Ended Aug 31, 2024 (Net Revenues) | Six Months Ended Aug 31, 2025 (Net Revenues) | Six Months Ended Aug 31, 2024 (Net Revenues) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | PaperPie | $3,731,200 | $5,440,300 | $9,791,500 | $14,340,600 | | Publishing | $889,900 | $1,068,900 | $1,936,000 | $2,162,000 | | Total | $4,621,100 | $6,509,200 | $11,727,500 | $16,502,600 | | Segment | Three Months Ended Aug 31, 2025 (Earnings (Loss) Before Income Taxes) | Three Months Ended Aug 31, 2024 (Earnings (Loss) Before Income Taxes) | Six Months Ended Aug 31, 2025 (Earnings (Loss) Before Income Taxes) | Six Months Ended Aug 31, 2024 (Earnings (Loss) Before Income Taxes) | | :----------------------------------- | :-------------------------------------------------------------------- | :-------------------------------------------------------------------- | :------------------------------------------------------------------- | :------------------------------------------------------------------- | | PaperPie | $(14,700) | $(470,700) | $447,000 | $300,400 | | Publishing | $205,700 | $255,200 | $413,500 | $486,800 | | Other | $(1,941,200) | $(2,250,600) | $(4,060,000) | $(5,000,300) | | Total | $(1,750,200) | $(2,466,100) | $(3,199,500) | $(4,213,100) | - PaperPie net revenues **decreased by 31.5%** for both the three and six months ended August 31, 2025, while its operating loss improved significantly for the three-month period and operating income increased for the six-month period[84](index=84&type=chunk) - Publishing net revenues **decreased by 18.2%** for the three months and **13.6%** for the six months ended August 31, 2025, with corresponding decreases in operating income[86](index=86&type=chunk) [Note 12 – Interest Rate Exchange Agreement](index=23&type=section&id=Note%2012%20%E2%80%93%20INTEREST%20RATE%20EXCHANGE%20AGREEMENT) The company's interest rate swap agreement, which fixed the interest rate on a portion of its Floating Rate Term Loan, terminated on May 30, 2025 - The interest rate swap agreement, which fixed the interest rate on a portion of the Floating Rate Term Loan at **6.48%**, terminated on May 30, 2025[90](index=90&type=chunk) | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Fair value of interest rate swap (Other current liabilities) | $0 | $15,400 | [Note 13 – Financial Instruments](index=25&type=section&id=Note%2013%20%E2%80%93%20FINANCIAL%20INSTRUMENTS) This note provides fair value estimates for certain financial instruments, including assets held for sale and term notes payable - The estimated fair value of assets held for sale was **$35,550,000** as of August 31, 2025, based on the Hilti Complex sale agreement, estimated value of excess land, and equipment held for sale[99](index=99&type=chunk) - The estimated fair value of term notes payable was approximately **$25,671,300** as of August 31, 2025, based on loan characteristics[99](index=99&type=chunk) [Note 14 – Deferred Revenues](index=25&type=section&id=Note%2014%20%E2%80%93%20DEFERRED%20REVENUES) Deferred revenues represent payments received from PaperPie division customers for orders not yet shipped, with the balance increasing as of August 31, 2025 | Metric | August 31, 2025 | February 28, 2025 | | :----------------------------------- | :-------------- | :---------------- | | Deferred revenues | $547,000 | $491,800 | - Deferred revenues **increased by $55,200** from February 28, 2025, to August 31, 2025, indicating more payments received in advance of shipment[94](index=94&type=chunk) [Note 15 – Subsequent Events](index=25&type=section&id=Note%2015%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant events after the balance sheet date, including a Notice of Default from the lender and an update on the Hilti Complex sale - The Company received a Notice of Default from its lender on September 30, 2025, due to the failure to pay off Term Loans and Revolving Loan upon their maturity on September 19, 2025[95](index=95&type=chunk)[96](index=96&type=chunk) - The purchase price for the Hilti Complex was **reduced to $32,200,000**, and the buyer issued a Notice to Proceed on October 6, 2025, with closing anticipated by November 25, 2025[97](index=97&type=chunk)[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, focusing on liquidity, debt default, and segment performance [Overview](index=26&type=section&id=Overview) The company operates two divisions, PaperPie and Publishing, facing risks from non-compliance with its Usborne distribution agreement, with overall net revenues and net loss decreasing - The Company is the exclusive US MLM distributor for Usborne Publishing Limited and also publishes Kane Miller, Learning Wrap-Ups, and SmartLab Toys[101](index=101&type=chunk) - Non-compliance with Usborne's minimum purchase volumes and payment terms creates a risk of agreement termination, though no notification has been received[101](index=101&type=chunk) | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net Revenues | $4,621,100 | $6,509,200 | $11,727,500 | $16,502,600 | | Net Loss | $(1,294,700) | $(1,803,400) | $(2,369,900) | $(3,082,400) | [Non-Segment Operating Results for the Three Months Ended August 31, 2025](index=26&type=section&id=Non-Segment%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20August%2031,%202025) Non-segment operating expenses decreased due to lower labor, depreciation, property taxes, and insurance, while interest expense increased and income tax benefit decreased - Total non-segment operating expenses **decreased by $0.3 million (13.0%) to $2.0 million**, driven by lower labor expenses in warehouse operations, reduced depreciation, and decreased property taxes and insurance[104](index=104&type=chunk) - Interest expense **increased by $0.1 million (20.0%) to $0.6 million**, attributed to higher interest rates on all debt[105](index=105&type=chunk) - Income tax benefit **decreased by $0.2 million (28.6%) to $0.5 million**, primarily due to decreased gross sales and a lower effective tax rate of **26.0%** (down from 26.9%)[106](index=106&type=chunk) [Non-Segment Operating Results for the Six Months Ended August 31, 2025](index=27&type=section&id=Non-Segment%20Operating%20Results%20for%20the%20Six%20Months%20Ended%20August%2031,%202025) For the six-month period, non-segment operating expenses decreased due to staff reductions and lower freight costs, while other income increased and income tax benefit decreased - Total non-segment operating expenses **decreased by $0.8 million (16.0%) to $4.2 million**, primarily due to **$0.5 million** in labor expense reductions and **$0.2 million** in depreciation decreases[107](index=107&type=chunk) - Other income **increased by $0.2 million (18.2%) to $1.3 million**, mainly from a **$0.4 million** increase in rental income from a new tenant in the Hilti Complex[109](index=109&type=chunk) - Income tax benefit **decreased by $0.3 million (27.3%) to $0.8 million**, primarily related to reduced operating losses, with an effective tax rate of **25.9%** (down from 26.8%)[110](index=110&type=chunk) [PaperPie Operating Results for the Three and Six Months Ended August 31, 2025](index=27&type=section&id=PaperPie%20Operating%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20August%2031,%202025) The PaperPie segment experienced significant declines in net revenues and active brand partners, but improved operating results due to substantial expense reductions | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net revenues | $3,731,200 | $5,440,300 | $9,791,500 | $14,340,600 | | Gross margin | $2,161,800 | $3,000,200 | $5,752,800 | $8,814,100 | | Total operating expenses | $2,176,500 | $3,470,900 | $5,305,800 | $8,513,700 | | Operating income (loss) | $(14,700) | $(470,700) | $447,000 | $300,400 | | Average number of active brand partners | 5,800 | 13,900 | 6,800 | 13,700 | - PaperPie net revenues **decreased by 31.5%** for both periods, with active brand partners decreasing by **58.3%** (three months) and **50.4%** (six months) due to economic challenges, Usborne agreement uncertainty, and lack of new titles[112](index=112&type=chunk)[118](index=118&type=chunk) - Operating expenses for PaperPie **decreased by 37.1%** (three months) and **37.6%** (six months), primarily due to reduced shipping costs and lower Brand Partner incentive trip expenses[116](index=116&type=chunk)[121](index=121&type=chunk) - Operating loss for the three months **improved from $(470,700) to $(14,700)**, and operating income for the six months **increased from $300,400 to $447,000**, despite revenue declines, due to significant expense reductions[117](index=117&type=chunk)[122](index=122&type=chunk) [Publishing Operating Results for the Three and Six Months Ended August 31, 2025](index=31&type=section&id=Publishing%20Operating%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20August%2031,%202025) The Publishing segment experienced decreased net revenues, gross margin, and operating income for both periods, primarily due to increased discounts offered to spur sales | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net revenues | $889,900 | $1,068,900 | $1,936,000 | $2,162,000 | | Gross margin | $526,300 | $646,500 | $1,072,400 | $1,292,000 | | Total operating expenses | $320,600 | $391,300 | $658,900 | $805,200 | | Operating income | $205,700 | $255,200 | $413,500 | $486,800 | - Publishing net revenues **decreased by 18.2%** (three months) and **13.6%** (six months), primarily due to additional discounts offered to retail customers[125](index=125&type=chunk)[129](index=129&type=chunk) - Gross margin as a percentage of net revenues **decreased to 59.1%** (three months) and **55.4%** (six months) due to increased discounts and changes in product mix[126](index=126&type=chunk)[130](index=130&type=chunk) - Operating income **decreased by 33.3%** (three months) and **20.0%** (six months), mainly associated with the decline in revenues and increased discounts[128](index=128&type=chunk)[132](index=132&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is challenged by operating losses and increased interest rates, with plans to sell real estate and reduce inventory to address debt default - Net cash provided by operating activities was **$1,459,700** for the first six months of fiscal year 2026, primarily driven by a **$3,958,500 decrease in inventories**[134](index=134&type=chunk)[141](index=141&type=chunk) - Cash used in investing activities was **$263,900**, mainly for software upgrades and building improvements, offset by asset sales[136](index=136&type=chunk) - Cash used in financing activities was **$900,000** for term debt payments[137](index=137&type=chunk) - The Company's credit agreement expired on September 19, 2025, leading to a Notice of Default on September 30, 2025, with approximately **$29,949,100** in outstanding principal balance[139](index=139&type=chunk)[140](index=140&type=chunk)[169](index=169&type=chunk) [Risks and Uncertainties](index=34&type=section&id=Risks%20and%20Uncertainties) The company acknowledges substantial doubt about its ability to continue as a going concern due to credit agreement default and recurring operating losses - Substantial doubt exists about the Company's ability to continue as a going concern due to the credit agreement default and recurring operating losses[144](index=144&type=chunk) - Mitigating plans include selling the Hilti Complex to pay off debt, reducing inventory for cash flow, and increasing active PaperPie Brand Partners to pre-pandemic levels[144](index=144&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) This section highlights critical accounting policies involving significant estimates and judgments, including inventory valuation, credit losses, and revenue recognition - Key accounting policies requiring significant estimates include valuation of inventory, provision for credit losses, allowance for sales returns, long-lived assets, and deferred income taxes[145](index=145&type=chunk) - Share-based compensation expense is recognized for probable vesting awards, with **no expense recorded** in the current six-month period as all previously granted shares have vested[148](index=148&type=chunk)[149](index=149&type=chunk) - Inventory valuation includes allowances for obsolescence and consigned inventory not expected to be sold or returned, with noncurrent inventory defined as quantities exceeding 2.5 years of anticipated sales[154](index=154&type=chunk)[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item states that quantitative and qualitative disclosures about market risk are not applicable to the company - The company is not required to provide quantitative and qualitative disclosures about market risk[158](index=158&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures, concluding they were effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed **effective** as of August 31, 2025, ensuring timely and accurate information disclosure[159](index=159&type=chunk)[160](index=160&type=chunk) - No material changes in internal control over financial reporting occurred during the second quarter of the fiscal year[161](index=161&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The Company is not a party to any material legal proceedings[163](index=163&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the registrant is not required to provide a detailed discussion of risk factors in this quarterly report - Risk Factors disclosure is not required for smaller reporting companies[164](index=164&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities or share repurchases during the three months ended August 31, 2025 | Period | Total of Shares Purchased | Average Price Paid per Share | Total of Shares Purchased as Part of Publicly Announced Plan | Maximum of Shares that may be Repurchased under the Plan | | :---------------- | :-------------------------- | :--------------------------- | :----------------------------------------------------------- | :--------------------------------------------------------- | | June 1 - 30, 2025 | - | - | - | 375,993 | | July 1 - 31, 2025 | - | - | - | 375,993 | | August 1 - 31, 2025 | - | - | - | 375,993 | | Total | - | - | - | | - No shares were purchased under the stock repurchase plan during the three months ended August 31, 2025[165](index=165&type=chunk) - The 2019 stock repurchase plan allows for up to **800,000 shares**, with **375,993 shares** remaining available for repurchase[165](index=165&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item states that there are no defaults upon senior securities to report - This item is not applicable, indicating no defaults upon senior securities[166](index=166&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - There are no mine safety disclosures[167](index=167&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) On September 30, 2025, the company received a Notice of Default from its lender due to the failure to repay its Credit Agreement upon maturity - The Company received a Notice of Default and Reservation of Rights Letter from BOKF, NA on September 30, 2025, for failing to pay the Credit Agreement balances by the maturity date[168](index=168&type=chunk) - The default imposes an **additional 2% interest rate** on existing borrowing rates and grants the lender rights to demand payment or liquidate collateral[169](index=169&type=chunk) - The total outstanding principal balance under the Credit Agreement was approximately **$29,949,100** as of September 30, 2025[169](index=169&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various corporate documents, amendments to the Credit Agreement, and certifications - The exhibits include restated certificates of incorporation, by-laws, the Usborne Distribution Agreement, and multiple amendments to the Credit Agreement with BOKF, NA[171](index=171&type=chunk)[172](index=172&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed herewith[172](index=172&type=chunk) - A Notice of Default and Reservation of Rights, dated September 30, 2025, from BOKF, NA, is included as Exhibit 10.20[172](index=172&type=chunk) SIGNATURES This section contains the official signatures of the company's executive officers, certifying the report's accuracy - The report was signed on October 9, 2025, by Craig M. White, President, Chief Executive Officer, and Chairman of the Board, and Dan E. O'Keefe, Chief Financial Officer and Corporate Secretary[176](index=176&type=chunk)

[Filing Information](index=1&type=section&id=Filing%20Information) This section details the registrant's identification, securities, and company status [Registrant and Filing Details](index=1&type=section&id=Registrant%20and%20Filing%20Details) This section details the registrant's identification, jurisdiction, commission file number, and the report date - Registrant: **Educational Development Corporation**[2](index=2&type=chunk) - Date of Report: **October 9, 2025**[2](index=2&type=chunk) - Jurisdiction of Incorporation: **Delaware**[2](index=2&type=chunk) - Commission File Number: **000-04957**[2](index=2&type=chunk) [Securities and Company Status](index=1&type=section&id=Securities%20and%20Company%20Status) This section outlines the securities registered under Section 12(b) of the Act and confirms the registrant's status regarding emerging growth company provisions Securities Registered Under Section 12(b) | Title of Class | Trading Symbol | Exchange | | :------------- | :------------- | :------- | | Common Stock, $.20 par value | EDUC | NASDAQ | - The registrant is **not an emerging growth company**[4](index=4&type=chunk) [Current Report Disclosures](index=2&type=section&id=Current%20Report%20Disclosures) This section outlines the specific disclosures made in the 8-K, including financial results and exhibits [General Disclosure Information](index=2&type=section&id=General%20Disclosure%20Information) This section clarifies that the information disclosed in Items 2.02, 7.01, and 9.01 is furnished, not filed, and therefore not subject to certain liabilities or automatic incorporation by reference - Information in Items 2.02, 7.01, and 9.01 is **furnished**, not deemed 'filed' under Section 18 of the Exchange Act[5](index=5&type=chunk) - The furnished information is **not subject to liabilities** under Section 18 and is not automatically incorporated by reference into other filings[5](index=5&type=chunk) [ITEM 2.02 Results of Operations and Financial Condition](index=2&type=section&id=ITEM%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Educational Development Corporation announced its fiscal 2026 second quarter financial results via a press release on October 9, 2025, which is furnished as Exhibit 99.1 - Announcement of **fiscal 2026 second quarter financial results** on October 9, 2025[6](index=6&type=chunk) - Results were announced via press release, furnished as **Exhibit 99.1**[6](index=6&type=chunk) [ITEM 7.01 Regulation FD Disclosure](index=2&type=section&id=ITEM%207.01%20Regulation%20FD%20Disclosure) This item reiterates the announcement of fiscal 2026 second quarter financial results through a press release and provides details for the upcoming earnings call - Fiscal 2026 second quarter financial results announced on **October 9, 2025**, via press release (Exhibit 99.1)[7](index=7&type=chunk) - Earnings call scheduled for **Thursday, October 9, 2025, at 3:30 PM CT (4:30 PM ET)**[7](index=7&type=chunk) [ITEM 9.01 Financial Statements and Exhibits](index=2&type=section&id=ITEM%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the 8-K filing, including the press release detailing the financial results and the interactive data file Exhibits Filed | Exhibit Number | Description | | :------------- | :---------- | | 99.1 | Press Release dated as of October 9, 2025 | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL) | [Signature](index=3&type=section&id=Signature) This section confirms the authorized signatory for the report [Authorized Signatory](index=3&type=section&id=Authorized%20Signatory) The report was duly signed on behalf of Educational Development Corporation by its President and Chief Executive Officer, Craig M. White, on October 9, 2025 - Signed by **Craig M. White**, President and Chief Executive Officer[11](index=11&type=chunk) - Signature date: **October 9, 2025**[11](index=11&type=chunk)

Core Insights - Educational Development Corporation (EDC) reported financial results for the fiscal second quarter ended August 31, 2025, showing a decline in net revenues and active brand partners compared to the previous year [1][6][10] Financial Performance - Net revenues for the second quarter were $4.6 million, down from $6.5 million in the prior year, representing a decrease of approximately 29% [6][8] - Year-to-date net revenues totaled $11.7 million, compared to $16.5 million in the same period last year, reflecting a decline of about 29% [6][8] - The average number of active PaperPie Brand Partners decreased to 5,800 from 13,900 year-over-year for the second quarter [6][8] - The company reported a net loss of $(1.3) million for the second quarter, an improvement from a net loss of $(1.8) million in the prior year [6][8] - Loss per share improved to $(0.15) from $(0.22) on a fully diluted basis for the second quarter [6][8] Strategic Initiatives - The CEO announced the sale of the Hilti Complex, expected to be completed in mid-November, with proceeds aimed at paying off outstanding bank debt [4] - The company is focusing on reducing overall inventory levels while planning to purchase out-of-stock items and new titles to drive revenue growth [4] - EDC aims to return to profitability by reducing operating costs and increasing sales through strategic initiatives with the IT department to enhance Brand Partner success [4][6]

Core Points - Educational Development Corporation (EDC) has amended its real estate contract with 10Mark 10K Industrial, LLC, extending the due diligence period and reducing the purchase price of the Hilti Complex to $32,200,000 [1][2] - The buyer has issued a notice to proceed with the purchase, waiving certain rights under the contract [2] - The sale proceeds will be used to pay off outstanding bank balances, improving the company's cash flow by eliminating monthly mortgage payments and reducing borrowings [3] Company Overview - EDC specializes in children's publishing and owns brands such as Kane Miller Books, Learning Wrap-Ups, and SmartLab Toys, with products sold through 4,000 retail outlets and independent brand partners [4] Property Details - The Hilti Complex consists of 402,000 square feet of rentable space on 37 acres, with significant portions leased to Hilti and Crusoe Energy [3]

Group 1 - Educational Development Corporation (EDUC) experienced a significant stock price increase of 46.42% to $2.00 in after-hours trading, following a 7.98% gain during the regular session [1][2] - The surge in stock price is attributed to the upcoming fiscal 2026 second-quarter earnings call scheduled for October 9, where CEO Craig White and CFO Dan O'Keefe will present results and answer questions [2] - EDUC specializes in educational program development and owns brands such as Kane Miller Books, Learning Wrap-Ups, and SmartLab Toys, while also exclusively distributing Usborne books in the U.S. through multi-level marketing channels [2] Group 2 - The stock trades within a 52-week range of $0.92 to $2.49, with a market capitalization of $11.77 million, and has gained 23.05% over the past month [3] - The highest stock price was $2.40 on September 25, 2024, but it has since dropped by 42.92%. From its lowest point of $1.05 on August 20, 2025, it has risen by 30.48%, currently sitting at $1.37. Overall, the stock has lost 32.04% over the past year [3] - Benzinga's Edge Stock Rankings indicate that EDUC is undergoing long-term consolidation while experiencing medium and short-term upward movement [4]