Educational Development Corp 8-K, filed May 19, 2022
Educational Development Corp (EDUC)
About this 8-K
Educational Development Corp filed this 8-K on May 19, 2022, reporting on events of May 16, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 19, 2022 (
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The information disclosed in these Items 7.01 and 9.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On May 16, 2022, Educational Development Corporation executed a new Distribution Agreement with Usborne Publishing Limited. The new Distribution Agreement replaces the previous Distribution Agreement dated November 25, 1988, the previous Party Plan Agreement dated November 1, 1990, the previous License Agreement dated May 26, 1999, the previous Name Change Agreement dated July 24, 2009 and other associated agreements made over the years between the parties.
Under the new Distribution Agreement, Educational Development Corporation will continue to have the exclusive rights to sell Usborne products through its multi-level direct selling division. EDC will also continue to have non-exclusive rights to sell Usborne titles to individuals in the School and Library Market through book fair and “Reach for the Stars” programs, etc., but will no longer sell directly to Schools and Libraries. EDC will discontinue selling Usborne products through its Publishing division following a six-month continuation of service period.
ITEM 7.01 REGULATION FD DISCLOSURE
On May 19, 2022, Educational Development Corporation announced, via press release, a new Distribution Agreement with Usborne Publishing. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS
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Description |
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99.1 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
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Educational Development Corporation |
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By: |
/s/ Craig M. White |
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Craig M. White |
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President and Chief Executive Officer |
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Date: |
May 19, 2022 |
EXHIBIT 99.1
PRESS RELEASE
EDUCATIONAL DEVELOPMENT CORPORATION
ANNOUNCES NEW DISTRIBUTION AGREEMENT WITH USBORNE PUBLISHING LIMITED
TULSA, OK, May 19, 2022—Educational Development Corporation (“EDC,” or the “Company”) (NASDAQ: EDUC) (http://www.edcpub.com) today reports a new Distribution Agreement with Usborne Publishing Limited effective May 16, 2022.
Under the terms of the new agreement, EDC’s UBAM direct sales division will have continuous access to sell Usborne titles through its sales channels. UBAM will also continue to have non-exclusive rights to sell Usborne titles to individuals in the School and Library Market through book fair and “Reach for the Stars!!” programs, etc., however, EDC will no longer sell directly to Schools and Libraries.
Additionally, following a six-month continuation of service period, the Company will discontinue selling Usborne products through its Publishing division. The discontinuance of rights to sell Usborne products through the Publishing Division and direct to Schools and Libraries is not expected to have a material impact going forward and for the last five years represented less than 10% of net sales.
Craig White, EDC’s President and Chief Executive Officer said “Usborne Publishing’s products have been the cornerstone of EDC since we first became their distributor in the 1970s, and we have partnered with Usborne and distributed Usborne’s products in the United States for over 40 years. This new agreement with Usborne Publishing replaces previous agreements that had terms that were no longer relevant or applicable. The agreement gives us an adequate transition period to discontinue the sale of Usborne products through our Publishing Division and a short-term exclusivity period for top selling Usborne products for our UBAM division. These transition and exclusivity periods will allow us to maintain our profit margins while we normalize our inventory levels of Usborne products. This new agreement opens opportunities for both EDC and Usborne to experience continued success. We appreciate Usborne’s ongoing commitment and support, not only during this year’s transition, but also for years to come.”
Per Nicola Usborne, Deputy Managing Director of Usborne Publishing Limited, “We look forward to building on our long relationship with EDC – and its many, very experienced and committed direct selling consultants – to get books that inspire and educate to children and their families.”
About Usborne Publishing Limited (“Usborne”)
Usborne, headquartered in London, is one of the world’s leading independent children’s publishers. Named Children’s Publisher of the year at the 2022 British Book Awards, it was founded in 1973 by the current Managing Director Peter Usborne. Usborne creates books which spark curiosity, for children of all ages from non-fiction titles which make knowledge irresistible, to an award-winning fiction list. 350 new titles are published each year and there are more than 12,000 books in print around the world, all published under the Usborne name and bearing the iconic Usborne hot air balloon. In addition, Usborne books have been translated into over 137 languages and dialects.
About Educational Development Corporation (EDC)
EDC is a publishing company specializing in books for children. EDC is the exclusive United States MLM distributor of the line of educational children’s books produced in the United Kingdom by Usborne Publishing Limited (“Usborne”) and we also exclusively publish books through our ownership of Kane Miller Book Publisher (“Kane Miller”); both international award-winning publishers of children’s books. EDC’s current catalog contains almost 2,000 titles, with new additions semi-annually. Products are sold via 4,000 retail outlets and by independent consultants, who hold book showings in individual homes, through social media, book fairs with school and public libraries, direct 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
Cautionary Statement for the Purpose of the “Safe Harbor” Provision of the Private Securities Litigation Reform Act of 1995.
The information discussed in this Press Release includes “forward-looking statements.” These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and we can give no assurance that such expectations or assumptions will be achieved. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our success in recruiting and retaining new consultants, our ability to locate and procure desired books, our ability to ship the volume of orders that are received without creating backlogs, our ability to obtain adequate financing for working capital and capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, the COVID-19 pandemic, as well as those factors discussed in our Annual Report on Form 10-K for the year ended February 28, 2022, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in our Annual Report on Form 10-K for the year ended February 28, 2022 and speak only as of the date of this Press Release. Other than as required under the securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.