CFO Dan O’Keefe reported that inventory was reduced by $5.6 million during the first nine months of fiscal 2026, falling to $39.1 million from $44.7 million, and generating positive cash flow used to pay suppliers and fund operations. At quarter end the balance sheet showed $3.4 million in cash, $0.8 million in receivables, $39.1 million in inventory, $2.0 million in payables and zero bank debt. Inventory risk is managed through replacement-cost insurance and historically low write-downs; roughly half of the stock value is attributable to Usborne titles. Educational Development completed the sale and leaseback of its Hilti Complex for $32.2 million during Q3, enabling the company to eliminate all outstanding term loans and revolving credit with Bank of Oklahoma. CEO Craig White described the transaction as “a big achievement” that removes former bank-imposed covenants and paves the way for fiscal 2027 without restrictions on capital deployment. Proceeds were immediately applied to debt reduction, and the new triple-net lease arrangement preserves operational continuity while generating rental income from third-party tenants. Management outlined a conservative, phased plan to replenish out-of-stock titles and introduce new publications beginning late spring, aiming to reengage the sales force and drive partner recruitment. The company has relaunched its fundraising platform as “Gathered Goods,” featuring in-house designed products and a digital component to extend campaign reach. CEO White has also established an AI task force to automate routine tasks and explore advanced applications in direct-to-consumer and retail channels. Discussions are underway to secure a new banking relationship and potentially reestablish a credit facility in the coming months. For the quarter ended November 30, net revenues fell to $7.0 million from $11.1 million a year earlier, driven by a drop in average active brand partners to 5,100 from 12,400. The company reported earnings before income taxes of $10.6 million, including a $12.2 million gain on the building sale; excluding that gain, the pre-tax result would have been a $1.6 million loss. Net earnings were $7.8 million, or $0.91 per share, compared to a prior-year loss of $0.8 million ($0.10 per share). Year-to-date revenues totaled $18.7 million, down from $27.6 million, while year-to-date net income reached $5.4 million ($0.63 per share) versus a $3.9 million loss in the prior period.