Paul Carter

- Educational Development Corporation (EDUC) completed the **sale and leaseback** of its headquarters and distribution warehouse, the "Hilti Complex," to 10Mark 10K Industrial, LLC on **October 27, 2025**.  **[31667_0001185185-25-001554_educ8k102825.htm:0]** **[31667_0001185185-25-001554_educex99-1.htm:0]** 
- The Hilti Complex was sold for **$32,200,000**, with the proceeds primarily used to **pay off approximately $30.0 million in outstanding Term Loans and Revolving Loan** with BOKF, NA, thereby eliminating all debt obligations with the bank.  **[31667_0001185185-25-001554_educ8k102825.htm:0]** **[31667_0001185185-25-001554_educex99-1.htm:0]** **[31667_0001185185-25-001554_educ8k102825.htm:1]** 
- EDUC entered into a **10-year Triple-Net Lease** for its occupied space, with an initial rate of **$8.00 per square foot** and **2.5% annual escalations**, including two five-year renewal options.  **[31667_0001185185-25-001554_educ8k102825.htm:0]** **[31667_0001185185-25-001554_educex10-01.htm:0]** **[31667_0001185185-25-001554_educex10-01.htm:1]** 
- This transaction is expected to **immediately improve annual cash flow generation by approximately $1.0 million**, and the company retained a **17-acre tract of excess land valued at $2.0 million**.  **[31667_0001185185-25-001554_educex99-1.htm:0]**

Educational Development Corporation Completes Headquarters Sale and Leaseback

- Educational Development Corporation (EDUC) reported a **net loss of $1.3 million** ($0.15 loss per share) on **net revenues of $4.6 million** for Q2 2026, compared to a net loss of $1.8 million ($0.22 loss per share) on $6.5 million in net revenues in the prior year's second quarter.  **[0000031667_2174420_1]** 
- The company experienced decreased sales primarily due to a decline in average active PaperPie brand partners, which totaled **5,800** in Q2 2026 compared to 13,900 in the prior year, and a lack of new title introductions for approximately 18 months.  **[0000031667_2174420_0]** **[0000031667_2174420_1]** 
- EDUC's bank loan agreements expired on September 19, 2025, resulting in a **notice of default** from the bank, though the bank has not yet exercised its rights and supports the planned sale of the Hilty Complex.  **[0000031667_2174420_1]** **[0000031667_2174420_2]** 
- The company expects to complete the sale of its headquarters, the Hilty Complex, for **$32.2 million** prior to **November 25, 2025**, to pay off bank loans, and is developing options for new, conservative financing of **$3 million to $5 million** post-sale.  **[0000031667_2174420_2]** **[0000031667_2174420_3]** 
- Management is focusing on increasing brand partner counts by improving technology for a mobile-first impact and targeting young Millennials and older Gen Z, alongside continued cost reduction efforts that have led to lower losses despite reduced sales.  **[0000031667_2174420_0]**

EDUCATIONAL DEVELOPMENT (EDUC)