Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 13, 2023 (September 11, 2023)

EDUCATIONAL DEVELOPMENT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	000-04957	73-0750007
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)

5402 S 122nd E Avenue, Tulsa, Oklahoma 74146

(Address of principal executive offices and Zip Code)

(918) 622-4522

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $.20 par value	EDUC	NASDAQ
(Title of class)	(Trading symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

ITEM 1.01 ENTRY INTO A MATERIAL AGREEMENT

Effective September 11, 2023, Educational Development Corporation (the “Company” or “Seller”) entered into a Contract of Sale of Real Estate (“Sale Agreement”) with MA Temple Investments LLC (the “Buyer”), for the sale of the Company’s property located at 10302 East 55^th Place, Tulsa, Oklahoma 74146 consisting of 104,875 rentable square feet on approximately 3.5 acres. The Sale Agreement price was $5,100,000. Per the Sale Agreement, the closing process shall be completed on or before October 25, 2023. The Buyer shall have 21 days from September 13, 2023 to complete any investigations, inspections and reviews and retains certain rights to cancel and terminate the Sale Agreement.

In accordance with the terms of the Sale Agreement, upon closing of the sale and commencing on the Closing Date, the Buyer and Seller shall execute a NNN (triple-net) Lease (the “Lease”) under which the Seller shall lease the entire building for a period of three years. The Seller will continue to have the right to sublease space within the building for the lease term. The initial lease rate shall be $4.00 per rentable square foot, with 3% escalations at the beginning of each year of the Lease. The Lease shall include NNN terms such that the Seller shall be responsible for utilities, insurance, property taxes and repairs and maintenance, excluding roof and structure, which shall be the Buyer’s responsibility. The Lease shall include other terms considered to be normal and customary in the local market.

The net cash received from the sale will be applied to the Term Loans outstanding in the Credit Agreement with the Company’s Bank.

The foregoing descriptions are a summary of the material terms of the Sale Agreement and Lease and are not complete. These descriptions are qualified in all respects subject to the actual provisions of the Sale Agreement and Lease with the Buyer.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) EXHIBITS

Exhibit Number	Description
99.1	Press Release dated September 13, 2023
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Educational Development Corporation

By: /s/ Craig M. White

Craig M. White

President and Chief Executive Officer

Date: September 13, 2023

Exhibit 99.1

PRESS RELEASE

EDUCATIONAL DEVELOPMENT CORPORATION ANNOUNCES

SALE AND LEASEBACK AGREEEMENT OF FORMER HEADQUARTERS AND WAREHOUSE FACILITY

TULSA, OK, September 13, 2023——Educational Development Corporation (“EDC” or “Seller”) (NASDAQ: EDUC) (http://www.edcpub.com) today announced that on September 11, 2023, it entered a Contract of Sale of Real Estate (the "Sale Agreement") with MA Temple Investments LLC ("MA Temple" or “Buyer”), for the sale of the Company's former headquarters and current bulk storage warehouse, located at 10302 East 55th Place, Tulsa, Oklahoma 74146. The purchase price for the property in the agreement totaled $5,100,000. The closing of this transaction is expected to be finalized on or before October 25, 2023.

Per the terms of the Sale Agreement, MA Temple will have a 21-day period, commencing on September 13, 2023, to conduct necessary investigations, inspections, and reviews. MA Temple retains certain rights to cancel and terminate the Sale Agreement during this period.

Following the closing of the sale, a Triple-Net Lease (the "Lease") will be executed between EDC and MA Temple. Under the Lease, the Seller will lease the entire building for a period of three years. The lease rate will be $4.00 per square foot, with 3% annual escalations. The Lease will also include triple-net terms, where the Seller will be responsible for utilities, insurance, property taxes, and regular maintenance, excluding roof and structural maintenance, which will be the Buyer's responsibility. Additionally, the Seller will retain the rights to sublease any available unused space in the building during the lease term. The Lease will encompass other standard terms that are customary in the local market.

All proceeds from the sale will be utilized to pay down the Term Loans outstanding in the Credit Agreement with the Company's Bank.

Per Craig White, President and Chief Executive Officer, “We are pleased to be able to significantly reduce our borrowing and interest expense with the sale and executed leaseback of our old building, which is primarily used for excess bulk inventory storage. The proceeds from the sale of this property will be used entirely to pay down our Term Loan associated with our building debts. The interest saved on the reduced borrowing will exceed our monthly rental payments from the executed leaseback providing us with further flexibility as we work down our inventory levels.”

About Educational Development Corporation (EDC)

EDC began as a publishing company specializing in books for children. EDC is the owner and exclusive publisher of Kane Miller Books (“Kane Miller”); Learning Wrap-Ups, maker of educational manipulatives; and SmartLab Toys, maker of STEAM-based toys and games. EDC is also the exclusive United States MLM distributor of Usborne Publishing Limited (“Usborne”) children’s books. EDC-owned products are sold via 4,000 retail outlets and EDC and Usborne products are offered by independent brand partners who hold book showings through social media, book fairs with schools and public libraries, in individual homes, as well as other in-person events and internet sales.

Contact:

Educational Development Corporation

Craig White, (918) 622-4522

Investor Relations:

Three Part Advisors, LLC

Steven Hooser or Jean Marie Young, (214) 872-2710

Document And Entity Information	Sep. 11, 2023
Document Information Line Items
Entity Registrant Name	EDUCATIONAL DEVELOPMENT CORPORATION
Trading Symbol	EDUC
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000031667
Document Period End Date	Sep. 11, 2023
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity File Number	000-04957
Entity Tax Identification Number	73-0750007
Entity Address, Address Line One	5402 S 122nd E Avenue
Entity Address, City or Town	Tulsa
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74146
City Area Code	(918)
Local Phone Number	622-4522
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.20 par value
Security Exchange Name	NASDAQ