Educational Development Corporation (NASDAQ: EDUC) announced a significant update regarding the sale of its Hilti complex. On October 1, 2025, the company executed a First Amendment to its Commercial Real Estate Contract with 10Mark 10K Industrial, LLC. This amendment adjusted the terms of the agreement, including a reduced purchase price and an extended due diligence period.
Following these changes, EDC confirmed on October 6, 2025, that the buyer, 10Mark 10K Industrial, LLC, formally issued a Notice to Proceed. This notice signals the buyer's intention to finalize the acquisition of the Hilti complex, moving the transaction closer to completion. The sale is a key strategic move for EDC, aimed at reducing its financial obligations and improving cash flow.
Key Takeaways
- EDC and 10Mark 10K Industrial, LLC amended their real estate contract.
- The purchase price for the Hilti Complex was reduced to $32,200,000.
- The due diligence period was extended to October 6, 2025.
- The buyer submitted a Notice to Proceed, waiving certain escrow rights.
- EDC expects to use sale proceeds to pay down outstanding bank balances.
- The transaction is projected to close within the next 45 days.
Contract Amendment Details and Buyer's Commitment
The First Amendment to the Commercial Real Estate Contract, signed on October 1, 2025, formalized several adjustments to the original agreement. The initial 45-day due diligence period was extended. It moved from an original end date of October 2, 2025, to the new date of October 6, 2025. This extension provided additional time for the buyer to complete its assessments of the property.
A notable change within the amended contract was the reduction in the purchase price for the Hilti Complex. The new agreed-upon price is $32,200,000. This adjustment reflects ongoing discussions between EDC and 10Mark 10K Industrial, LLC to address specific issues related to the sale.
According to Craig White, President and Chief Executive Officer of Educational Development Corporation, "Over the last several weeks we have been working with the buyer to resolve certain issues associated with the sale of the Hilti Complex. Today, I am pleased to announce that we have received notice from the buyer of their intention to close on the transaction."
The receipt of the Buyer's Notice to Proceed on October 6, 2025, is a critical step. This notice, while subject to certain conditions, waives the buyer's right to the escrow outlined in the original contract. This indicates a firm commitment from 10Mark 10K Industrial, LLC to move forward with the purchase.
Strategic Financial Impact for Educational Development Corporation
The sale of the Hilti Complex is a key component of EDC's financial strategy. The company plans to use the proceeds from this transaction to significantly reduce its outstanding bank balances. This move is expected to have a positive and immediate impact on EDC's financial health.
Craig White further elaborated on the benefits of the sale. He stated that reducing borrowings is in the best interest of shareholders. The company anticipates having limited working capital borrowings moving forward. This change will also eliminate monthly mortgage payments associated with the complex.
Financial Benefit
The interest savings from reduced borrowings are projected to exceed EDC's future monthly rental payments. This will provide an immediate improvement to monthly cashflows.
EDC also projects strong cash flow from operations in the coming years. This is expected as the company converts its excess inventory into cash. The sale of the Hilti Complex supports this broader financial objective.
Overview of the Hilti Complex Property
The Hilti Complex is a substantial commercial property located in Tulsa, Oklahoma. It encompasses multiple buildings, offering a total of 402,000 square feet of rentable office and warehouse space. The entire complex sits on a large 37-acre parcel of land.
The property currently hosts multiple tenants. Approximately 183,800 square feet of the Hilti Complex is occupied by Hilti under a 15-year lease agreement. Additionally, Crusoe Energy occupies about 110,000 square feet under a 10-year lease.
Future Lease Arrangement
Upon the closing of the sale, EDC will assign these existing third-party tenant leases to the buyer. Educational Development Corporation will also execute a separate Triple-Net Lease (the "Lease") for the space it currently occupies within the Hilti Complex. This arrangement allows EDC to continue using necessary facilities while divesting ownership of the larger property.
About Educational Development Corporation
Educational Development Corporation, commonly known as EDC, began its operations as a publishing company. Its primary focus was on books for children. Over the years, EDC has expanded its portfolio and distribution channels.
EDC is the owner and exclusive publisher of several brands. These include Kane Miller Books, which specializes in children's literature. It also owns Learning Wrap-Ups, a producer of educational manipulatives, and SmartLab Toys, known for its STEAM-based toys and games.
- Kane Miller Books: Specializes in children's books.
- Learning Wrap-Ups: Creates educational manipulatives.
- SmartLab Toys: Develops STEAM-based toys and games.
Beyond its owned brands, EDC also serves as the exclusive United States MLM (Multi-Level Marketing) distributor for Usborne Publishing Limited. Usborne is a well-known publisher of children's books.
EDC distributes its products through a diverse network. This network includes approximately 4,000 retail outlets. Additionally, both EDC and Usborne products are offered by independent brand partners. These partners conduct book showings through various channels. This includes social media, book fairs with schools and public libraries, individual home events, and online sales.
The company's diverse distribution strategy allows it to reach a broad customer base. This approach supports its mission of providing educational content and products to children across the United States. The sale of the Hilti Complex is a strategic financial move that aims to strengthen the company's core business operations and improve its financial standing for future growth.
