<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

       For the quarterly period ended November 30, 1999.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

       For the transition period from ___________ to ____________.

                         Commission file number: 0-4957

                      EDUCATIONAL DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                        73-0750007
 (State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                       Identification No.)

10302 East 55th Place, Tulsa Oklahoma 74146-6515
(Address of principal executive offices)

Registrant's telephone number: (918) 622-4522

     Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                         Yes     X     No
                             ---------    ---------

     As of November 30, 1999 there were 4,256,239 shares of Educational
Development Corporation Common Stock, $0.20 par value outstanding.
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

PART I.  FINANCIAL INFORMATION
-----------------------------------------

ITEM 1

BALANCE SHEETS
<TABLE>
<CAPTION>

                                          November 30, 1999    February 28, 1999
                                             (unaudited)       -----------------
                                          -----------------
<S>                                       <C>                   <C>
ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                    $    236,300     $    210,900
 Accounts receivable - (less
  allowances for doubtful accounts
  and returns: 11/30/99 - $205,300
  2/28/99 - $189,600)                            2,467,500        1,842,600
 Inventories - Net                               9,108,000        9,546,700
 Prepaid expenses and other assets                 216,600          220,000
 Income taxes receivable                                --           55,100
 Deferred income taxes                             127,700          121,800
                                              ------------     ------------
   Total current assets                         12,156,100       11,997,100

 PROPERTY AND EQUIPMENT
  at cost (less accumulated
  depreciation:  11/30/99 - $1,251,100
  2/28/99 - $1,033,200)                            155,300          342,500
                                              ------------     ------------

                                              $ 12,311,400     $ 12,339,600
                                              ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Note payable to bank                         $    178,000     $    756,000
 Accounts payable                                2,232,300        1,095,800
 Accrued salaries and commissions                  354,100          242,600
 Income taxes                                       57,700               --
 Other current liabilities                         187,300          149,500
                                              ------------     ------------
   Total current liabilities                     3,009,400        2,243,900

DEFERRED INCOME TAXES                               47,400           56,300

COMMITMENTS

SHAREHOLDERS' EQUITY:
 Common Stock, $.20 par value (Authorized
  6,000,000 shares; Issued 5,429,240
  and 5,429,240 shares; Outstanding
  4,265,239 and 4,873,254 shares)                1,085,800        1,085,800
 Capital in excess of par value                  4,410,100        4,410,100
 Retained earnings                               7,203,800        6,266,400
                                              ------------     ------------
                                                12,699,700       11,762,300
Less treasury shares, at cost                 (  3,445,100)    (  1,722,900)
                                              ------------     ------------
                                                 9,254,600       10,039,400
                                              ------------     ------------

                                              $ 12,311,400     $ 12,339,600
                                              ============     ============
</TABLE>
See notes to financial statements.

                                       2
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

STATEMENTS OF EARNINGS (UNAUDITED)

<TABLE>
<CAPTION>

                                  Three Months Ended November 30,    Nine Months Ended November 30,
                                       1999             1998             1999             1998
                                 ----------------  ---------------  ---------------  ---------------
<S>                              <C>               <C>              <C>              <C>

GROSS SALES                         $  7,530,600     $  7,992,900     $ 21,038,000     $ 21,106,600
 Less discounts & allowances        (  2,517,800)    (  2,539,200)    (  7,700,600)    (  7,541,800)
                                    ------------     ------------     ------------     ------------
  Net sales                            5,012,800        5,453,700       13,337,400       13,564,800
COST OF SALES                          1,983,400        2,062,700        5,515,000        5,435,700
                                    ------------     ------------     ------------     ------------
  Gross margin                         3,029,400        3,391,000        7,822,400        8,129,100
OPERATING EXPENSES:
 Operating & selling                     791,900          832,500        2,332,700        2,312,600
 Sales commissions                     1,149,900        1,330,400        2,630,300        2,693,700
 General & administrative                409,900          403,200        1,198,500        1,197,400
 Interest                                  7,200           33,100           37,900           93,900
                                    ------------     ------------     ------------     ------------
                                         670,500          791,800        1,623,000        1,831,500
OTHER INCOME                              10,200           57,700           35,700           94,800
                                    ------------     ------------     ------------     ------------

EARNINGS BEFORE INCOME TAXES             680,700          849,500        1,658,700        1,926,300

INCOME TAXES                             260,900          311,900          635,000          731,700
                                    ------------     ------------     ------------     ------------

NET EARNINGS                        $    419,800     $    537,600     $  1,023,700     $  1,194,600
                                    ============     ============     ============     ============

BASIC AND DILUTED EARNINGS
 PER SHARE:
 Basic                                     $0.10            $0.11     $       0.23     $       0.24
                                    ============     ============     ============     ============
 Diluted                                   $0.10            $0.11     $       0.23     $       0.23
                                    ============     ============     ============     ============


WEIGHTED AVERAGE NUMBER OF
 COMMON AND COMMON EQUIVALENT
 SHARES OUTSTANDING:
  Basic                                4,318,334        4,949,334        4,410,938        5,084,058
                                    ============     ============     ============     ============
  Diluted                              4,430,490        4,981,987        4,473,607        5,155,009
                                    ============     ============     ============     ============

DIVIDENDS DECLARED PER
 COMMON SHARE                       $         --     $         --     $       0.02     $       0.02
                                    ============     ============     ============     ============

</TABLE>
See notes to financial statements.

                                       3
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>

                                     Common Stock
                              (par value $.20 per share)                         Treasury Stock
                           ---------------------------------                ------------------------
                           Number of              Capital in                  Number
                            Shares                Excess of     Retained        of                    Shareholders'
                            Issued      Amount    Par Value     Earnings      Shares       Amount         Equity
                           ---------  ----------  ----------  ------------  ----------  ------------  --------------
<S>                        <C>        <C>         <C>         <C>           <C>         <C>           <C>

BALANCE, MAR. 1, 1999      5,429,240  $1,085,800  $4,410,100   $6,266,400     555,986   $(1,722,900)   $ 10,039,400

Issuance of treasury
 stock                           ---         ---         ---          ---        (200)          600             600

Purchases of treasury
 stock                           ---         ---         ---          ---     769,473    (2,157,900)    ( 2,157,900)

Sales of treasury stock          ---         ---         ---          ---    (161,258)      435,100         435,100

Dividends paid                   ---         ---         ---      (86,300)        ---           ---         (86,300)

Net earnings                     ---         ---         ---    1,023,700         ---           ---       1,023,700
                           ---------  ----------  ----------  -----------   ---------   -----------    ------------

BALANCE, NOV 30, 1999      5,429,240  $1,085,800  $4,410,100   $7,203,800   1,164,001   $(3,445,100)   $  9,254,600
                           =========  ==========  ==========  ===========   =========   ===========    ============
</TABLE>
See notes to financial statements.

                                       4
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Nine Months Ended November 30,
                                                          1999             1998
                                                     ---------------  ---------------
<S>                                                  <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES:                  $  2,446,400     $  1,764,200

CASH FLOWS FROM INVESTING ACTIVITIES -
 Purchases of property and equipment                  (      33,900)   (      26,200)
                                                       ------------     ------------

 Net cash used in investing activities                (      33,900)   (      26,200)
                                                       ------------     ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowings under revolving credit agreement              5,238,000        5,989,000
 Payments under revolving credit agreement            (   5,816,000)   (   6,353,000)
 Cash received from exercise of stock options                    --            7,500
 Cash received from sale of treasury stock                  435,100           46,000
 Cash paid to acquire treasury stock                  (   2,157,900)   (   1,171,200)
 Dividends paid                                       (      86,300)   (     101,900)
                                                       ------------     ------------

 Net cash used in financing activities                (   2,387,100)   (   1,583,600)
                                                       ------------     ------------

Net Increase in Cash and Cash Equivalents                    25,400          154,400
Cash and Cash Equivalents, Beginning of Period              210,900          171,600
                                                       ------------     ------------
Cash and Cash Equivalents, End of Period               $    236,300     $    326,000
                                                       ============     ============

Supplemental Disclosure of Cash Flow Information:
 Cash paid for interest                                $     38,500     $     92,900
                                                       ============     ============
 Cash paid for income taxes                            $    537,000     $    562,500
                                                       ============     ============
</TABLE>
See notes to financial statements.

                                       5
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

NOTES TO FINANCIAL STATEMENTS

Note 1 - The information shown with respect to the three months and nine months
------
ended November 30, 1999 and 1998, which is unaudited, includes all adjustments
which in the opinion of Management are considered to be necessary for a fair
presentation of earnings for such periods.  There were no adjustments, other
than normal recurring accruals, entering into the determination of the results
shown except as noted in this report.  The results of operations for the three
months and nine months ended November 30, 1999 and 1998, respectively, are not
necessarily indicative of the results to be expected at year end due to
seasonality of the product sales.

These financial statements and notes are prepared pursuant to the rules and
regulations of the Securities and Exchange Commission for interim reporting and
should be read in conjunction with the Financial Statements and accompanying
notes contained in the Company's Annual Report to Shareholders for the Fiscal
Year ended February 28, 1999.

Note 2 - Effective June 30, 1999 the Company signed a Restated Credit and
------
Security Agreement with State Bank, which provides a $3,500,000 line of credit.
The line of credit is evidenced by a promissory note in the amount of $3,500,000
payable June 30, 2000.  The note bears interest at the Wall Street Journal prime
floating rate minus 0.25% payable monthly (8.25% at November 30, 1999).  The
note is collateralized by substantially all of the assets of the Company.  At
November 30, 1999 the Company had $178,000 in borrowings and a $50,000 letter of
credit issued under the revolving credit agreement.  Available credit under the
revolving credit agreement was $3,272,000 at November 30, 1999.

<TABLE>
<CAPTION>

Note 3 - Inventories consist of the following:
------------------------------------------------

                                                  November 30, 1999   February 28, 1999
                                                  ------------------  ------------------
<S>                                               <C>                 <C>
          Book Inventory                                 $9,231,700          $9,670,400
          Reserve for Obsolescence                  (       123,700)    (       123,700)
                                                         ----------          ----------
                                                         $9,108,000          $9,546,700
                                                         ==========          ==========
</TABLE>

Note 4 - Basic earnings per share is computed by dividing net earnings by the
------
weighted average number of common shares outstanding during the period.  Diluted
earnings per share is based on the combined weighted average number of common
shares outstanding increased, when appropriate, for the number of common shares
issuable upon exercise of stock options, computed using the treasury stock
method.

The computation of weighted average common and common equivalent shares used in
the calculation of basic and diluted earnings per share ("EPS") is shown below.
<TABLE>
<CAPTION>

                                          Three Months Ended November 30,  Nine Months Ended November 30,
                                               1999             1998            1999            1998
                                          ---------------  --------------  --------------  --------------
<S>                                       <C>              <C>             <C>             <C>

 Net Earnings                                  $  419,800      $  537,600      $1,023,700      $1,194,600
                                               ==========      ==========      ==========      ==========

 Basic EPS:
 Weighted Average Shares Outstanding            4,318,334       4,949,334       4,410,938       5,084,058
                                               ==========      ==========      ==========      ==========
 Basic EPS                                     $     0.10      $     0.11      $     0.23      $     0.24
                                               ==========      ==========      ==========      ==========

 Diluted EPS:
 Weighted Average Shares Outstanding            4,318,334       4,949,334       4,410,938       5,084,058
 Assumed Exercise of Options                      112,156          32,653          62,669          70,951
                                               ----------      ----------      ----------      ----------
 Shares Applicable to Diluted Earnings          4,430,490       4,981,987       4,473,607       5,155,009
                                               ==========      ==========      ==========      ==========
 Diluted EPS                                   $     0.10      $     0.11      $     0.23      $     0.23
                                               ==========      ==========      ==========      ==========

</TABLE>

Since March 1, 1998, when the Company began its stock repurchase program,
1,146,305 shares of the Company's common stock at a total cost of $3,435,100
have been acquired.  The Board of Directors has authorized purchasing up to
2,000,000 shares as market conditions warrant.

                                       6
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------  ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------

Certain statements contained in this Management Discussion and Analysis are not
based on historical facts, but are forward-looking statements that are based
upon numerous assumptions about future conditions that may ultimately prove to
be inaccurate. Actual events and results may materially differ from anticipated
results described in such statements.  The Company's ability to achieve such
results is subject to certain risks and uncertainties.  Such risks and
uncertainties include but are not limited to, product prices, continued
availability of capital and financing, and other factors affecting the Company's
business that may be beyond its control.

FINANCIAL CONDITION
-------------------

The financial condition of the Company remains strong.  Working capital at
November 30, 1999 was $9,146,700 compared to working capital of $9,753,200 at
fiscal year end February 28, 1999.  Accounts receivable increased 31.5% over
year ended February 28, 1999 due to special credit terms offered during the
second quarter.  Inventory dropped 4.5% from February 28, 1999 levels.  The
amount of inventory will fluctuate depending upon sales and the timing of
shipments from the Company's principal supplier.  The Company continuously
monitors inventory to assure it has on hand adequate supplies to meet sales
requirements. The note payable to the bank declined 76.5% from the balance due
on February 28, 1999, the result of improved cash flow from operations during
the first nine months of fiscal year 2000.  Sales in the Home Business Division,
which are primarily cash sales, contributed to the improved cash flow, along
with accounts payable, which increased 103.7% over February 28, 1999.  The major
component of accounts payable is the amount due to the Company's principal
supplier.  Fluctuations in the level of inventory and the timing of purchases as
well as the payment terms offered by suppliers affect the levels of accounts
payable.

Pre-tax margins were 12.4% for the nine months ended November 30, 1999 versus
14.2% for the nine months ended November 30, 1998.  Pre-tax margins for the
quarters ended November 30, 1999 and 1998 were 13.6% and 15.6% respectively.

RESULTS OF OPERATIONS
---------------------

Revenues - Net sales from the Home Business Division (Usborne Books at Home -
--------
"UBAH") were $7,127,700 for the nine months ended November 30, 1999, a slight
decrease from the $7,164,800 net sales for the same nine month period a year
ago.  UBAH net sales for the three months ended November 30, 1999 were
$3,081,600 versus $3,512,100 for the three months ended November 30, 1998, a
decrease of 12.2%.  The Company attributes the decrease in third quarter sales
to the fact that last year UBAH ran a special sales promotion during the third
quarter whereas this special was offered during the second quarter of the
current year. The Company continues to offer new and exciting incentive
programs, travel contests and regional training seminars to further stimulate
sales growth and recruiting.  Management is hopeful that the two-year decline in
net sales in the Home Business Division has been halted.

Net sales from the Publishing Division were $6,209,700 for the nine months ended
November 30, 1999 versus $6,400,000 for the same nine month period a year ago, a
decline of 3.0%.  Net sales for the three months ended November 30, 1999 and
1998 were $1,931,200 and $1,941,600 respectively, a slight decline.  The Company
attributes the decline in net sales to changing market conditions.  National
chains increasingly dominate the bookstore market, resulting in fewer
independent bookstores.  The closings of these independent bookstores, an
important market segment for the Company, contributed to the decline in net
sales. Independent toy stores have also experienced increased competition from
national discount stores, resulting in lower sales by the Company in this market
area.  The Company has restructured sales and marketing coverage on the national
chains in order to increase market share.  The gift store market offers
considerable potential to the Company and the Company has been exploring this
market segment.  The Company has increased its presence at national trade shows
throughout the country to further promote its products.  For these reasons
Management is optimistic that the Publishing Division will maintain its market
share in the highly competitive publishing market.

Operating expenses - The Company's cost of sales for the nine months ended
------------------
November 30, 1999 was $5,515,000 compared with $5,435,700 for the nine months
ended November 30, 1998, an increase of 1.5%.  Cost of sales for the three
months ended November 30, 1999 decreased 3.8% to $1,983,400 versus $2,062,700
for the same three month period a year ago.  Cost of sales expressed as a
percentage of gross sales was 26.2 % and 25.8% for the nine months ended
November 30, 1999 and 1998, respectively.  For the three months ended November
30, 1999 and 1998, cost of sales expressed as a percentage of gross sales was
26.3% and 25.8% respectively.  Cost of sales expressed as a percentage of gross
sales will fluctuate depending upon the product mix sold.

                                       7
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

Operating and selling expenses for the nine months ended November 30, 1999
increased slightly to $2,332,700 when compared with $2,312,600 for the same nine
months a year ago.  These expenses expressed as a percentage of gross sales were
11.1% for the nine months ended November 30, 1999 and 11.0% for the nine months
ended November 30, 1998.  Operating and selling expenses for the three months
ended November 30, 1999 and 1998 were $791,900, and $832,500 respectively, a
decrease of 4.9%. This decline is attributed to a special promotion offered by
the Home Business Division during the third quarter of fiscal year 1999 which
was offered during the second quarter of fiscal year 2000.  Expressed as a
percentage of gross sales, operating and selling expenses were 10.5% for the
three months ended November 30, 1999 and 10.4% for the three months ended
November 30, 1998.

Sales commissions for the nine months ended November 30, 1999 and 1998 were
$2,630,300 and $2,693,700, a 2.4% decline. Expressed as a percentage of gross
sales, sales commissions were 12.5% and 12.8% for the nine months ended November
30, 1999 and 1998, respectively.  Sales commissions for the third quarter of
fiscal year 2000 were $1,149,900 compared with $1,330,400 for the third quarter
last year, a decline of 13.6%.  When expressed as a percentage of gross sales,
sales commissions for the third quarters of fiscal years 2000 and 1999 were
15.3% and 16.6% respectively.  The Home Business Division and the Publishing
Division each have their own separate and distinct commission programs and
commission rates.  Lower sales resulted in lower sales commissions.

General and administrative expenses increased slightly for the nine months ended
November 30, 1999 to $1,198,500 compared with $1,197,400 for the nine months
ended November 30, 1998.  These same expenses for the three months ended
November 30, 1999 were up 1.7% to $409,900 compared with $403,200 for the same
three month period a year ago.  As a percentage of gross sales, general and
administrative expenses were 5.4% and 5.7% for the three and nine months ended
November 30, 1999 and were 5.0% and 5.7% for the three and nine months ended
November 30, 1998.  These expenses are not always directly affected by sales,
thus analysis of general and administrative expenses solely as a percentage of
gross sales can be misleading.

Interest expense declined 59.6% to $37,900 for the first nine months of fiscal
year 2000 when compared with the $93,900 interest expenses for the first nine
months of fiscal year 1999.  Interest expense for the third quarters of these
two fiscal years was $7,200 and $33,100 respectively, a decline of 78.2%.  The
interest rate was  1/4 of 1% to  3/4 of 1% lower during the first nine months of
fiscal year 2000 when compared with the same time period of fiscal year 1999.
The average amounts borrowed during the three months ended and nine months ended
November 30, 1999 were $385,700 and $647,200 respectively, compared with
$1,590,500 and $1,462,400 for the same periods a year ago. The lower borrowing
levels were the results of the Company's purchasing policies and inventory
management practices. Sales in the Home Business Division, which are cash sales,
also contributed to lower borrowing levels.

BUSINESS SEGMENTS
-----------------

The Company has two reportable segments:  Publishing and Usborne Books at Home
("UBAH").  These reportable segments are business units that offer different
methods of distribution to different types of customers.  They are managed
separately based on the fundamental differences in their operations.  The
Publishing Division markets its products to retail accounts, which include book,
school supply, toy and gift stores and museums, through commissioned sales
representatives, trade and specialty wholesalers and an internal telesales
group.  The UBAH Division markets its product line through a network of
independent sales consultants through a combination of direct sales, home shows
and book fairs.

The accounting policies of the segments are the same as those of the Company.
The Company evaluates segment performance based on operating profits of the
segments which is defined as segment net sales reduced by direct cost of sales
and direct expenses.  Corporate expenses, including interest and depreciation,
and income taxes are not allocated to the segments.  The Company's assets are
not allocated on a segment basis.

                                       8
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

Information by industry segment for the three months and nine months ended
November 30, 1999 and 1998 is set forth below:
<TABLE>
<CAPTION>

                                        Publishing     UBAH        Other         Total
                                        ----------  ----------  ------------  -----------
<S>                                     <C>         <C>         <C>           <C>
Nine Months Ended November 30, 1999

  Net sales from external customers     $6,209,700  $7,127,700  $        --   $13,337,400
  Earnings before income taxes          $2,244,900  $1,827,600  $(2,413,800)  $ 1,658,700

Three Months Ended November 30, 1999

  Net sales from external customers     $1,931,200  $3,081,600  $        --   $ 5,012,800
  Earnings before income taxes          $  732,600  $  767,900  $ ( 819,800)  $   680,700

Nine Months Ended November 30, 1998

  Net sales from external customers     $6,400,000  $7,164,800  $        --   $13,564,800
  Earnings before income taxes          $2,412,500  $1,997,100  $(2,483,300)  $ 1,926,300

Three Months Ended November 30, 1998

  Net sales from external customers     $1,941,600  $3,512,100  $        --   $ 5,453,700
  Earnings before income taxes          $  744,800  $  932,300  $ ( 827,600)  $   849,500
</TABLE>

YEAR 2000 MATTERS
-----------------

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year.  Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the Year 2000.  This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

The Company has evaluated its software applications, systems software,
information technology ("IT") system and its non-IT systems.  Management has
determined that the various computer programs the Company uses in its operations
are Year 2000 compliant.  These programs include the following: inventory;
accounts receivable; accounts payable; general ledger; shipping; order entry.
The Informix database engine, which runs these programs, was not Year 2000
compliant.  The Company acquired the necessary programs to bring the Informix
database engine to Year 2000 compliance and has installed the programs on the
Company's main system.  The Company's ("IT") system and its non-IT system are
now fully compliant.  Total costs to become Y2K compliant were $40,000 for
software and $5,000 for labor.

The Company has received assurances from its primary supplier, Usborne
Publishing LTD, that Usborne Publishing LTD will be year 2000 compliant before
the end of 1999.

The Company relies on third-party suppliers for products and services, including
telecommunications and shipping. The Company will be adversely impacted if these
suppliers of products and services do not make necessary changes to their own
systems in a timely and successful manner.  There could be circumstances in
which the Company would be unable to receive customer orders, ship product, and
invoice customers or collect payments.

The Company has communicated with others with whom it does significant business
to determine their Year 2000 compliance readiness and the extent to which the
Company is vulnerable to any third-party Year 2000 issue.  However, there can be
no guarantee that the systems of these other third-party companies will be
timely converted.

The Company is unable to determine the financial impact, if any, to the Company
should some or all of its third-party suppliers be unable to become Year 2000
compliant in a timely manner.  The Company relies highly on the
telecommunications industry and the transportation (shipping) industry.  It is
highly unlikely that all the major service providers in these two industries
would fail to become Year 2000 compliant in a timely manner.  However, should
this worst case scenario occur, the Company would be unable to receive orders or
ship product.

                                       9
<PAGE>

EDUCATIONAL DEVELOPMENT CORPORATION
---------------------------------------------------

The Company has developed an informal contingency plan to address the potential
adverse effects of the Year 2000 problem.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------  ----------------------------------------------------------

     The Company does not have any material market risk.

PART II  OTHER INFORMATION
--------------------------

     None



                                   SIGNATURES
                                   ----------


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                      EDUCATIONAL DEVELOPMENT CORPORATION
                                  (Registrant)



                         By     /s/ Randall W. White
                           --------------------------------
                                Randall W. White
                                President

Date:   January 3, 2000
     ---------------------

                                       10