Educational Development Corporation (NASDAQ:EDUC) Q2 2024 Earnings Call Transcript

Dan O’Keefe : Well, it’s not something we report. So August is a period that we’re reporting. So we saw them stabilize over the summer, as Craig mentioned, and we saw a little uptick in August. So that’s what we communicate through our earnings calls.

Unidentified Analyst: Right. But you can’t discuss anything that’s happened since?

Dan O’Keefe : We typically don’t get into monthly reporting of our active brand partner count, no. We’re satisfied with the way it’s trending.

Unidentified Analyst: Okay, very good. That’s all I’ve got. Thank you.

Operator: And your next question comes from the line of Randy Freed from R L Capital, LLC. Your line is open.

Randy Freed: Hello, can you hear me?

Dan O’Keefe : Yes. Yes, Randy.

Randy Freed: Hi. I got two questions. The first one is for Dan. And I am somewhat familiar with the employee retention credit because I’m a CPA also. So I want to expand a little bit on that other gentleman’s question. My question to you is, that was part of The CARES Act. We know a lot of people have been applying for that. My question for you is how confident — I’m not sure who you consulted with and thereby got that $3.8 million credit. But how confident are you that you met all the criteria and that if you do, in fact, get audited that they’re not going to be able to claw that back? Are you super confident that you actually qualified for it? Or are you like hoping you don’t get audited? That’s my first question Thank you.

Dan O’Keefe : Well, nobody — and I’ll concur with you. I don’t think we want to be audited there. Nobody wants to be audited. But we did use a nationally Tier 1 consulting firm to help us with our application process and documentation process. They’ve processed — I believe they’re — one of their advertisements is they are the largest processor of not only employment retention credits, but also other credits. We use the same firm to do our research and development tax credit that we file for annually as well. But they are a very large nationally recognized firm that does this.

Randy Freed: Okay. Thank you for that. My next question is for all three of you, but any of you can answer. There’s a little website I check that shows about open market purchases or sales of company shares by the officers. And I haven’t seen anything really on there for any of you three. Have any of you three bought any shares in the open market recently. I’m not talking about the shares you get through that plan, which is a little confusing. I’m not sure if they’re sort of free, maybe they are free. But just in the open market if any of these three buy any shares and do you have any plans to do so?

Dan O’Keefe : Yeah. So we filed Form 4s, I believe, last week, identifying the shares that we’ve acquired in the last quarter. We buy these shares with payroll withholdings. So they’re bought in the open market with our personal dollars.

Randy Freed: Okay. So you’re all three are you’re doing that buying a few shares through payroll withholdings. I haven’t looked at that site for a couple of weeks, but is that where those few shares come from that are sort of showing up every once in a while on that site, all three through payroll withholding?

Dan O’Keefe : Yes. And it’s through our 401(k) plan. We have our stock as an investment option in our 401(k) plan. And so when we have payroll, we have our payroll withholdings that go into our 401(k) plan and our company stock is an investment option. And then our 401(k) firm goes out to the market every payroll period and buys those shares for us.

Randy Freed: It’s in your 401(k) plans. It’s not in your like personal account, you’re not using some of your own money that’s not going into the 401(k) plan for open market purchases right now?