EDUC

EDUC's headline looks deceptively fine — net income up 144% to $2.33M, a 5.7x P/E, no debt, and a share price ($1.54) at roughly 0.31x book value ($42.8M equity, ~$5.03/share). But the profit is a mirage. The 10-K discloses the Company sold its Tulsa 'Hilti Complex' on Oct 27, 2025 for $32.2M, booking a $12.24M gain on sale. That one-time real-estate gain exceeds full-year net income of $2.33M by a wide margin, which means the underlying operating business lost money in FY2026. You can only sell your headquarters once — this is not repeatable earnings power, so the 5.7x P/E is fictional.

The operating business is in freefall. Revenue has collapsed from $142M (FY2022) to $87.8M, $51.0M, $34.2M, and now $22.9M (FY2026) — down 33% this year and roughly 84% over four years, with two loss years (FY2023, FY2025) along the way. The MD&A explains why: the PaperPie MLM engine is imploding. Active Brand Partners fell from 7,800 to 4,300 (-45%) in a single year, and new recruits dropped from 7,800 to 2,700. Since active reps are the sole distribution channel and are also responsible for recruiting the next cohort, this is a self-reinforcing downward spiral with no floor visible in the data.