##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K/A
 Amendment No. 1
   (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)For the transition period
    from          to   Commission File Number:
    333-109381
 Haights Cross Communications,
    Inc.
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware

13-4087398(State or Other Jurisdiction
    of
    Incorporation)

(I.R.S. Employer
    Identification Number)10 New King Street, Suite 102
    White Plains, NY(Address of Principal
    Executive Offices)

10604 (Zip
    Code)   Registrants telephone number, including area code:
 (914) 289-9400
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  þ o
  þ o
  Regulation S-K Form 10-K Form 10-K. o
    Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE None




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##### Table of Contents





EXPLANATORY
    NOTE
  Form 10-K
    PART II
  Item 8.
    Financial
    Statements and Supplementary Data 2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
        and/or
  150-5,
  
    3




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands, except per share data)ASSETSCurrent assets:Cash and cash equivalents

$
61,784


$
69,847Accounts receivable, net


26,504



22,462Inventory, net


19,573



23,242Direct response advertising costs  current portion,
    net


3,965



3,838Prepaid royalties


6,342



6,135Prepaid expenses and other current assets


2,994



2,658Total current assets


121,162



128,182Pre-publication costs, net


40,620



45,173Direct response advertising costs, net


8,232



7,389Property and equipment, net


10,638



11,279Goodwill


135,566



135,566Intangible assets, net


21,565



24,242Deferred financing costs, net


6,499



10,347Other assets


490



508Total assets

$
344,772


$
362,686LIABILITIES, REDEEMABLE PREFERRED STOCK AND
    STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable and accrued liabilities

$
33,607


$
30,862Accrued interest


8,948



9,039Deferred subscription revenue


15,275



14,140Current portion of long term debt


124,850



1,300Total current liabilities


182,680



55,341Long term liabilities:Senior secured term loan






124,850113/4% senior
    notes


171,670



172,146121/2% senior
    discount notes


118,362



104,847Series B senior preferred stock, redeemable, $.001 par
    value, 6,000,000 shares authorized,
    2,000,230 shares issued and outstanding at
    December 31,2006; 6,000,000 shares authorized, none
    outstanding at December 31, 2007






149,626Deferred tax liability


18,474



14,905Deferred gain on Series B cancellation and other long term
    liabilities


415



3,838Total long term liabilities


308,921



570,212Commitments (Note 18)Redeemable preferred stock:Series A preferred stock, redeemable, $.001 par value,
    30,000 shares authorized, 22,476 shares  issued 
    and outstanding at December 31, 2006; 30,000 shares
    authorized, none outstanding at December 31, 2007






39,196Series C preferred stock, redeemable, $.001 par value,
    3,500 shares authorized, issued and outstanding at
    December 31, 2006; 3,500 shares authorized, none
    outstanding at December 31, 2007






1,855Total redeemable preferred stock






41,051Stockholders deficit:Common stock, $.001 par value, 30,000,000 shares
    authorized, 20,012,914 shares issued and outstanding at
    December 31, 2006 and $.0003 par value,
    30,000,000 shares authorized, 9,966,229 
    shares issued and outstanding at December 31, 2007


3



20Accumulated other comprehensive income


755



658Accumulated deficit


(147,587
)


(304,596
)Total stockholders deficit


(146,829
)


(303,918
)Total liabilities, redeemable preferred stock and
    stockholders deficit

$
344,772


$
362,686    4




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2006


2005(In thousands)Revenue

$
231,946


$
222,004


$
210,485Costs and expenses:Cost of goods sold


65,388



62,429



60,864Marketing and sales


59,283



58,556



52,491Fulfillment and distribution


19,003



18,027



16,083General and administrative


35,610



28,719



25,953Restructuring charges


2,632



407



Amortization of pre-publication costs


19,032



17,733



13,150Goodwill impairment charges






34,812



Asset impairment charges


10,723



2,886



Depreciation expense and amortization of intangibles


5,782



5,499



5,038Total costs and expenses


217,453



229,068



173,579Income (loss) from operations


14,493



(7,064
)


36,906Other (income) expenses:Interest expense


61,772



65,787



59,328Interest income


(3,173
)


(2,921
)


(1,872
)Amortization deferred financing costs


3,423



3,381



3,579Gain on troubled debt restructuring


(115,489
)






Other expense (income)


250



9



180Total other expenses (income)


(53,217
)


66,256



61,215Income (loss) before income taxes, discontinued operations and
    cumulative effect of accounting change


67,710



(73,320
)


(24,309
)(Provision) benefit for income taxes


(4,038
)


1,601



(4,952
)Income (loss) before discontinued operations and cumulative
    effect of accounting change


63,672



(71,719
)


(29,261
)Discontinued operations:Loss from operations of discontinued operations










(3,731
)Loss on disposal of discontinued operations


(122
)


(1,136
)


(1,245
)Income (loss) before cumulative effect of accounting change


63,550



(72,855
)


(34,237
)Cumulative effect of accounting change










2,213Net income (loss)


63,550



(72,855
)


(32,024
)Gain on recapitalization


34,353







Preferred stock dividends and accretion


(2,182
)


(3,334
)


(3,048
)Net income (loss) available to common stockholders

$
95,721


$
(76,189
)

$
(35,072
)    5




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS
    DEFICIT
  AccumulatedOther





TotalCommon Stock


Comprehensive


Accumulated


StockholdersShares


Amount


Income


Deficit


Deficit(In thousands)Balance as of January 1, 2005


20,000


$
20


$
526


$
(193,365
)

$
(192,819
)Comprehensive loss: Net loss














(32,024
)


(32,024
)Foreign currency translation adjustment










(242
)






(242
)Total comprehensive loss


















(32,266
)Stock based compensation expense














3



3Issuances pursuant to stock options


8











9



9Preferred stock dividends and accretion














(3,048
)


(3,048
)Balance as of December 31, 2005


20,008



20



284



(228,425
)


(228,121
)Comprehensive loss: Net loss














(72,855
)


(72,855
)Foreign currency translation adjustment














374



374Total comprehensive loss


















(72,481
)Stock based compensation expense














7



7Issuances pursuant to stock options


5











11



11Preferred stock dividends and accretion














(3,334
)


(3,334
)Balance as of December 31, 2006


20,013


$
20


$
658


$
(304,596
)

$
(303,918
)Comprehensive income: Net income














63,550



63,550Foreign currency translation adjustment










97







97Total comprehensive loss


















63,647Stock based compensation expense














4



4Issuances of restricted stock


337



1







1,531



1,532Recapitalization transactions


(10,384
)


(11
)






59,746



59,735Gain on recapitalization














34,353



34,353Change in par value of common stock






(7
)






7



Preferred stock dividends and accretion














(2,182
)


(2,182
)Balance as of December 31, 2007


9,966


$
3


$
755


$
(147,587
)

$
(146,829
)    6




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands)Operating activities from Continuing OperationsNet income (loss) from continuing operations

$
63,672


$
(71,719
)

$
(29,261
)Adjustments to reconcile net income (loss) from continuing
    operations to net cash provided by operating activities:Gain on troubled debt restructuring  non-cash


(115,489
)






Non-cash interest expense


28,576



33,546



29,069Allowance for doubtful accounts


2,942



4,078



3,831Allowance for obsolescence


3,463



2,498



1,164Depreciation and amortization of property and equipment,
    pre-publication costs and intangibles


24,814



23,232



18,188Amortization of deferred financing costs


3,423



3,382



3,579Amortization of premium on
    113/4% senior
    notes


(476
)


(484
)


(491
)Asset impairment charges


10,723



37,698



Deferred taxes  non-cash


3,569



(1,939
)


4,640Other non-operating income  non-cash


2,220



13



16Changes in operating assets and liabilities:Accounts receivable


(6,995
)


(5,238
)


(5,235
)Inventory


(1,932
)


(3,437
)


(2,451
)Prepaid expenses, royalty advances and other current assets


(1,056
)


790



(497
)Direct response advertising costs


(1,165
)


(534
)


(1,556
)Other assets


18



(18
)


(21
)Accounts payable, accrued and other liabilities


2,878



2,384



2,938Accrued interest


(91
)


168



483Deferred subscription revenue


1,135



1,510



95Net cash provided by operating activities from continuing
    operations


20,229



25,930



24,491Investing activities from Continuing OperationsAdditions to pre-publication costs


(21,778
)


(22,852
)


(21,877
)Additions to property and equipment


(2,976
)


(2,759
)


(3,831
)Additions to intangible assets


(55
)


(39
)


(20
)Acquisitions, net of cash acquired






907



(12,255
)Proceeds from sale of business






500



8,500Proceeds from sale of assets


6



9



Net cash used in investing activities from continuing operations


(24,803
)


(24,234
)


(29,483
)Financing activities from Continuing OperationsTransaction cost-troubled debt restructuring and recapitalization


(2,038
)






Repayment of senior secured term loan


(1,300
)


(1,300
)


(1,300
)Proceeds from exercise of stock options






11



9Additions to deferred financing costs


(88
)


(104
)


(511
)Net cash used in financing activities from continuing operations


(3,426
)


(1,393
)


(1,802
)Effect of exchange rates on cash


89



245



(154
)Cash flows of discontinued operationsOperating cash flows


(152
)


(293
)


1Investing cash flows










(2,042
)Net cash used in discontinued operations


(152
)


(293
)


(2,041
)Net (decrease) increase in cash and cash equivalents


(8,063
)


255



(8,989
)Cash and cash equivalents at beginning of year


69,847



69,592



78,581Cash and cash equivalents at end of year

$
61,784


$
69,847


$
69,592Supplemental disclosureCash paid during the year for:Interest

$
32,885


$
32,102


$
29,740Income taxes

$
371


$
523


$
44    7




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2007
 (In thousands)
  1.
    Nature of
    Business and Organization  Sundance/Newbridge
        
    K-12 Supplemental Education:  The Company
    publishes supplemental reading materials for the kindergarten
    through eighth grade, or PreK-8, marketed under the
    well-recognized imprints Sundance Publishingand
    Newbridge Educational Publishing,and the Company also
    offers non-proprietary supplemental reading and literature
    products for the K-12 market. A sale process for
    Sundance/Newbridge businessbegan in November 2007, and
    on March 17, 2008 the Board of Directors resolved to initiate a
    phased wind-down of the operations of Sundance/Newbridge.
    Test-prep and Intervention:  The Company
    publishes state-specific test preparation materials for K-12
    competency tests under our well-recognized imprints and brands
    such as Triumph Learning, Coachand Buckle Down.The Company also offers skills assessment products and
    intervention materials for struggling math and reading students
    under the widely known Options Publishingimprint.
    Library:  The Company publishes unabridged
    audiobooks and other products for adults and children, under the
    Recorded Booksimprint, and markets these titles, as well
    as selected non-proprietary audiobooks and other products,
    primarily to public libraries and schools.
    Medical Education:  The Company publishes audio
    and video-based continuing medical education, or CME, materials
    for doctors and other health care professionals under the
    Oakstone Publishingimprint and self-study CME courses
    under the Companys CMEinfobrand. The Company also
    publishes personal wellness information products for companies
    seeking to improve employee awareness of health and wellness
    issues under the Top Healthand Personal Bestbrands. 8




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Basis
    of Presentation
  Going
    Concern Considerations
  and/or
   9




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
  Scott Publishing info Chelsea House Chelsea House
  Use of
    Estimates
    Concentrations
    of Credit Risk
   10




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value and Credit Risk of Financial Instruments
  3 4 1 2
    December 31, 2007Carrying Value


Fair ValueSenior secured term loan

$
124,850


$
124,850113/4% senior
    notes


171,670



175,961121/2% senior
    discount notes


118,362



113,400   Cash
    Equivalents
    Revenue
    and Expense Recognition
      Shipping
    and Handling
    Inventory
    and Related Obsolescence
  first-in,
  Prepaid
    Royalties
   11




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Advertising
    product-by-product 12-18 months. Oakstone Publishing
      Pre-Publication
    Costs
  work-for-hire
  Property
    and Equipment
   12




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use.
  Goodwill
    and Other Intangible Assets
      Long-Lived
    Assets
  Accounting for
    the Impairment or Disposal of Long-Lived Assets
  Stock-Based
    Compensation
     13




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income
    Taxes
    Foreign
    Currency Translation
    Redeemable
    Capital Stock
  , , , No. 150-5, No. 150-5),
    Reclassification
  Chelsea House Chelsea House
  Recent
    Accounting Pronouncements
  Fair Value
    Measurement
 14




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of SFAS 115
  3.
    Recapitalization
    Transaction           15




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                 16




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Acquisitions  Scott
    Publishing
  Scott Publishing ® Scott Publishing Scott Publishing Scott Publishing Scott Publishings
    As of April 15,2005Working capital, net (excluding cash acquired)

$
176Intangibles


1,560Deferred tax


(296
)Net assets acquired


1,440Goodwill recorded


2,187Net cost

$
3,627   CMEinfo
  info.com, Inc. info info info infos
 17




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of June 15,2005Working capital, net (excluding cash acquired)

$
(168
)Pre-publication costs


890Property and equipment


60Intangibles


4,420Deferred tax


(532
)Net assets acquired


4,670Goodwill recorded


2,891Net cost

$
7,561   info Scott Publishing
  5.
    Accounts
    Receivable    December 31,2007


2006Accounts receivable

$
28,909


$
25,629Less allowance for doubtful accounts


2,405



3,167Accounts receivable, net

$
26,504


$
22,462   6.
    Inventory    December 31,2007


2006Supplies

$
1,354


$
1,371Work-in-process


599



1,013Finished goods


24,593



24,54126,546



26,925Less allowance for obsolescence


6,973



3,683Inventory, net

$
19,573


$
23,242   Sundance/Newbridge
 18




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Pre-publication
    Costs    December 31,2007


2006Pre-publication costs

$
106,421


$
92,851Less accumulated amortization


65,801



47,678Pre-publication costs, net

$
40,620


$
45,173     8.
    Property
    and Equipment    December 31,2007


2006Furniture and fixtures

$
2,276


$
2,429Office equipment and software


13,852



12,509Land and building


4,041



4,784Leasehold improvements


2,569



2,76822,738



22,490Less accumulated depreciation


12,100



11,211Property and equipment, net

$
10,638


$
11,279     Options
    Publishing Options Publishing
  9.
    Goodwill    Sundance/Newbridge
 19




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Publishing
    Goodwill, December 31, 2005

$
170,252CMEinfoacquisition


126Goodwill impairment charge- Sundance/Newbridge


(24,393
)Goodwill impairment charge- Options Publishing


(10,419
)Goodwill, December 31, 2006 and 2007

$
135,566   Scott Publishing CMEinfo
  10.
    Intangibles    December 31,


December 31,Definite Life Assets

Lives


2007


2006Customer list


10 years


$
23,240


$
23,240Non-compete agreements


3-5 years



1,900



1,900Other


5 years



167



17125,307



25,311Less: accumulated amortization






(8,597
)


(5,898
)16,710



19,413Trademarks


Indefinite



4,855



4,829Net intangible assets





$
21,565


$
24,242    20




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    TotalAmortization of intangibles:2008


2,7332009


2,6712010


2,4252011


2,3272012


2,325Thereafter


4,229$
16,710   11.
    Accounts
    Payable and Accrued Liabilities    December 31,2007


2006Trade accounts payable

$
10,916


$
13,175Accrued liabilities


12,011



9,371Accrued management incentive


5,595



4,963Accrued compensation and related taxes and benefits


3,070



3,168Accrued restructuring costs


1,965



105Accrued disposition costs


50



80Accounts payable and accrued liabilities

$
33,607


$
30,862   12.
    Restructuring
    Charges  Buckle Down Publishing Buckle Down Publishing
  Options Publishing Triumph
    Learning Options Publishing Triumph Learning Options Publishing Triumph Learning Triumph
    Learning
 21




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Triumph Learning Sundance/Newbridge
  Sundance/Newbridge
  Sundance/Newbridge Sundance/Newbridge Sundance/Newbridge Triumph
  Options Buckle Down Options Publishing Sundance/Newbridge
 22




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Severance


Lease


Relocationand


Terminations


and


TotalRelated


Costs


Other


ConsolidationBuckle Down  Warehouse and Order Fulfillment
    ConsolidationAmount expected to be incurred

$
65


$
180


$
162


$
407Accrued restructuring liability as of December 31, 2005














Restructuring expense


65



180



162



407Cash paid


(65
)


(75
)


(162
)


(302
)Accrued restructuring liability as of December 31, 2006






105







105Restructuring expense






75







75Cash paid






(109
)






(109
)Accrued restructuring liability as of December 31, 2007

$



$
71


$



$
71Options Publishing  Consolidation with Buckle
    DownAmount expected to be incurred

$
954


$



$
61


$
1,015Accrued restructuring liability as of December 31, 2006














Restructuring expense


845







61



906Cash paid


(219
)






(61
)


(280
)Accrued restructuring liability as of December 31, 2007

$
626


$



$



$
626Abandonment of Sundance/Newbridge businessAmount expected to be incurred

$
2,730


$



$
51


$
2,781Accrued restructuring liability as of December 31, 2006














Restructuring expense


1,409







51



1,460Cash paid


(141
)






(51
)


(192
)Accrued restructuring liability as of December 31, 2007

$
1,268


$



$



$
1,268   Options
    Publishing Buckle Down
  13.
    Asset
    Impairment Charges  K-12
    Supplemental Education Sundance/Newbridge Sundance/Newbridge Sundance/Newbridge
  Test-prep and Intervention Options Publishing Triumph Learning
 23




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    14.
    Income
    Taxes        December 31,2007


2006


2005(Restated Note 2)Current income tax expense:Foreign

$
(469
)

$
(338
)

$
(312
)Deferred income tax expense:U.S. Federal


(3,569
)


1,939



(4,640
)Total benefit (provision for) income taxes

$
(4,038
)

$
1,601


$
(4,952
)    24




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006Deferred tax assets:Net operating loss carryforwards

$
53,225


$
44,697Goodwill


6,323



8,095Interest on
    121/2% Senior
    Discount Note


13,126



9,423Allowance for doubtful accounts and notes


1,805



2,102Inventory reserves


2,377



1,156Other definite life intangible assets


1,574



610Restructuring


766



Other


200



249Total deferred tax assets


79,396



66,332Deferred tax liabilities:Goodwill and other indefinite life assets


(18,474
)


(14,905
)Direct response advertising


(4,758
)


(4,491
)Depreciation


(356
)


(630
)Total deferred tax liabilities


(23,588
)


(20,026
)Net deferred tax assets before valuation allowance


55,808



46,306Less valuation allowance


(74,282
)


(61,211
)Net deferred tax liabilities

$
(18,474
)

$
(14,905
)          25




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006


2005Statutory rate


34
%


34
%


34
%State and local income taxes (net of federal benefit)


5
%


6
%


6
%Change in valuation allowance


20
%


(22
)%


(15
)%Non-deductible interest expense


11
%


(13
)%


(31
)%Gain on troubled debt restructuring


(67
)%



%



%Other


3
%


(3
)%


(12
)%Effective tax rate


6
%


2
%


(18
)%     15.
    Financing
    Arrangements  Senior
    Secured Revolving Credit Facility, Term Loans,
    113/4% Senior
    Notes
  3 4
      3 4
  pari passu
 26




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      121/2% Senior
    Discount Notes
  1 2 pari passu
    Interest Rate


Book ValuePremium


As of


As ofIssuance


Due


Face


(Discount)


December 31,


December 31,Instrument

Date


Date


Amount


At Issuance


2007


2007Haights Cross:First Term Loan


08/20/03



08/15/08


$
100,000







9.37
%

$
95,750Second Term Loan


12/10/04



08/15/08


$
30,000







8.37
%


29,100124,850113/4% Senior
    notes


08/20/03



08/15/11


$
140,000







11.75
%


140,000113/4% Senior
    notes


12/10/04



08/15/11


$
30,000


$
3,150



11.75
%


31,670171,670Haights Cross Communications:121/2% Senior
    discount notes


02/02/04



08/15/11


$
135,000


$
(61,347
)


12.5
%


118,362Total debt





















$
414,882  27




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008

$
124,8502009


2010


2011


305,0002012


Total


429,850Less: Unamortized discounts and other


(14,968
)$
414,882   16.
    Equity
    and Redeemable Preferred Stock  ,
      Buckle Down Publishing ,
    17.
    Stock
    Based Compensation   28




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  de minimus.
      18.
    Commitments    OccupancySpace


EquipmentYear ending December 31:2008

$
2,984


$
2262009


2,463



1912010


1,325



1122011


781



1042012


779



6Total minimum payments

$
8,332


$
639      29




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  19.
    Savings
    Plan      20.
    Discontinued
    Operations  Triumph
    Learning College
    Chelsea
    House Publishers
  Chelsea House Publishers Chelsea House Publishers Chelsea House
    Publishers Chelsea
    House Publishers Chelsea House Publishers. Chelsea House Publishers
 30




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  th
  2005Revenue

$
6,594Cost of goods sold


2,061Marketing and sales


1,622Fulfillment and distribution


606General and administrative


988Amortization of pre-publication costs


1,770Impairment loss  pre-publication costs


3,211Depreciation expense


68Loss from operations

$
(3,732
)   Chelsea House Publishers Chelsea House Publishers
  August 8,2005Assets and liabilities:Working capital, net (excluding cash)

$
4,904Pre-publication costs, net


3,897Property and equipment, net


156Net assets on date of sale

$
8,957Calculation of loss on sale:Proceeds

$
9,000Less: book value of net assets sold


(8,957
)43Less: accrued transaction costs


(935
)Loss on disposal of Chelsea House Publishers

$
(892
)   Chelsea House
    Publishers Chelsea House
    Publishers Chelsea House Publishers.
  21.
    Segment
    Reporting   31




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Chelsea House Publishers
  Sundance/Newbridge Triumph Learning,
    Buckle Down Publishing Options Publishing Recorded Books Oakstone
    Publishing Scott Publishing info
      K-12Supplemental


Test-Prep &





MedicalEducation


Intervention


Library


Education


Corporate


Consolidated2007Revenue

$
27,293


$
86,074


$
84,529


$
34,050


$



$
231,946Cost of good sold


8,842



16,734



29,873



9,939







65,388Marketing and sales


11,201



23,725



14,626



9,731







59,283Fulfillment and distribution


3,350



6,427



5,841



3,385







19,003General and administrative


2,983



8,379



7,768



3,523



12,957



35,610Restructuring charges


1,460



1,172















2,632Asset impairment charges


10,158



565















10,723Amortization of pre-publication costs


3,505



8,891



5,388



1,248







19,032Depreciation expense and amortization of intangibles


907



2,879



794



1,148



54



5,782Income (loss) from operations

$
(15,113
)

$
17,302


$
20,239


$
5,076


$
(13,011
)

$
14,493Interest expense

$
3,635


$
17,317


$
4,878


$
5,276


$
30,666


$
61,772Capital expenditures  property and equipment


660



734



731



771



80



2,976Capital expenditures  pre-publication costs


2,612



11,940



6,045



1,181







21,778Goodwill






50,488



64,513



20,565







135,566Total assets


8,737



117,476



107,353



42,851



68,355



344,772   32




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  K-12Supplemental


Test-Prep &





MedicalEducation


Intervention


Library


Education


Corporate


Consolidated2006Revenue

$
34,296


$
73,909


$
81,328


$
32,471


$



$
222,004Cost of good sold


9,824



14,666



28,239



9,700







62,429Marketing and sales


14,702



19,982



14,644



9,228







58,556Fulfillment and distribution


3,683



5,171



5,923



3,250







18,027General and administrative


3,775



7,957



7,172



3,480



6,335



28,719Restructuring charges






407















407Amortization of pre-publication costs


4,536



7,212



4,831



1,154







17,733Asset impairment charges


2,886



















2,886Goodwill impairment charges


24,393



10,419















34,812Depreciation expense and amortization of intangibles


829



2,800



834



974



62



5,499Income (loss) from operations

$
(30,332
)

$
5,295


$
19,685


$
4,685


$
(6,397
)

$
(7,064
)Interest expense

$
2,684


$
14,399


$
5,355


$
4,443


$
38,906


$
65,787Capital expenditures  property and equipment


452



438



1,059



801



9



2,759Capital expenditures  pre-publication costs


4,649



11,709



5,399



1,095







22,852Goodwill






50,488



64,513



20,565







135,566Total assets


19,869



118,274



103,972



41,995



78,576



362,686   K-12Supplemental


Test-Prep &





MedicalEducation


Intervention


Library


Education


Corporate


Consolidated2005Revenue

$
43,096


$
64,501


$
76,626


$
26,262


$



$
210,485Cost of good sold


10,927



13,521



28,623



7,793







60,864Marketing and sales


13,461



17,787



13,591



7,652







52,491Fulfillment and distribution


4,074



4,040



5,236



2,733







16,083General and administrative


3,046



6,884



5,796



3,426



6,801



25,953Amortization of pre-publication costs


3,731



4,706



4,139



574







13,150Depreciation expense and amortization of intangibles


825



2,727



717



642



127



5,038Income (loss) from operations

$
7,032


$
14,836


$
18,524


$
3,442


$
(6,928
)

$
36,906Interest expense

$
2,576


$
13,167


$
6,009


$
3,504


$
34,072


$
59,328Capital expenditures  property and equipment


817



831



1,164



943



76



3,831Capital expenditures  pre-publication costs


5,236



10,086



5,384



1,171







21,877Goodwill, restated


24,393



60,906



64,513



20,440







170,252Total assets


52,634



123,342



99,360



42,230



83,753



401,319  33




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  22.
    Condensed
    Consolidated Financial Statements  3 4 Article 3-10(d) Regulation S-X.
    Year Ended December 31, 2007Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Revenue

$



$



$
231,946


$



$
231,946Costs and expenses


265



12,747



204,441







217,453Income (loss) from operations


(265
)


(12,747
)


27,505







14,493Equity in the income (loss) of subsidiaries


(18,835
)


(10,548
)






29,383



Loss from discontinued operations






(122
)










(122
)Other (income)/expenses


(82,650
)


(4,582
)


38,053







(49,179
)Net income (loss)

$
63,550


$
(18,835
)

$
(10,548
)

$
29,383


$
63,550   Year Ended December 31, 2006Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Revenue

$



$



$
222,004


$



$
222,004Costs and expenses


125



6,272



222,671







229,068Income (loss) from operations


(125
)


(6,272
)


(667
)






(7,064
)Equity in the income (loss) of subsidiaries


(40,788
)


(33,624
)






74,412



Loss from discontinued operations






(1,136
)










(1,136
)Other (income)/expenses


31,942



(244
)


32,957







64,655Net income (loss)

$
(72,855
)

$
(40,788
)

$
(33,624
)

$
74,412


$
(72,855
)   Year Ended December 31, 2005Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Revenue

$



$



$
210,485


$



$
210,485Costs and expenses


787



6,140



166,652







173,579Income (loss) from operations


(787
)


(6,140
)


43,833







36,906Equity in the income (loss) of subsidiaries


608



4,900







(5,508
)


Loss from discontinued operations






(1,245
)


(3,731
)






(4,976
)Other (income)/expenses


31,845



(3,093
)


35,202







63,954Net income (loss)

$
(32,024
)

$
608


$
4,900


$
(5,508
)

$
(32,024
)  34




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31, 2007Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)AssetsCurrent assets

$
3,872


$
56,759


$
60,531


$



$
121,162Investment in subsidiaries


(15,313
)


231,094







(215,781
)


Long term assets


1,448



6,276



215,886







223,610Total assets

$
(9,993
)

$
294,129


$
276,417


$
(215,781
)

$
344,772Liabilities, Redeemable Preferred Stock and Stockholders
    DeficitCurrent liabilities

$



$
137,554


$
45,126


$



$
182,680Long term liabilities


136,836



171,888



197







308,921Stockholders deficit:Common stock


3















3Accumulated deficit


(146,832
)


(15,313
)


231,094



(215,781
)


(146,832
)Total stockholders deficit


(146,829
)


(15,313
)


231,094



(215,781
)


(146,829
)Total liabilities, redeemable preferred stock and
    stockholders deficit

$
(9,993
)

$
294,129


$
276,417


$
(215,781
)

$
344,772   As of December 31, 2006Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)AssetsCurrent assets

$
3,718


$
64,437


$
60,027


$



$
128,182Investment in subsidiaries


4,193



241,564







(245,757
)


Long term assets


2,127



8,295



224,082







234,504Total assets

$
10,038


$
314,296


$
284,109


$
(245,757
)

$
362,686Liabilities, Redeemable Preferred Stock and Stockholders
    DeficitCurrent liabilities

$



$
13,107


$
42,234


$



$
55,341Long term liabilities


272,905



296,996



311







570,212Redeemable preferred stock


41,051















41,051Stockholders deficit:Common stock


20















20Accumulated deficit


(303,938
)


4,193



241,564



(245,757
)


(303,938
)Total stockholders deficit


(303,918
)


4,193



241,564



(245,757
)


(303,918
)Total liabilities, redeemable preferred stock and
    stockholders deficit

$
10,038


$
314,296


$
284,109


$
(245,757
)

$
362,686  35




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31, 2007Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Cash provided by (used in):Operating activities of continuing operations

$
(110
)

$
(2,722
)

$
23,061


$



$
20,229Investing activities from continuing operations:Additions to pre-publication costs










(21,778
)






(21,778
)Additions to property and equipment






(80
)


(2,896
)






(2,976
)Additions to intangibles










(55
)






(55
)Intercompany activity


2,303



(3,411
)


1,108







Proceeds from sale of businesses and assets










6







6Net cash used in investing activities


2,303



(3,491
)


(23,615
)






(24,803
)Financing activities of continuing operations:Transaction cost- troubled debt restructuring and
    recapitalization


(2,038
)














(2,038
)Repayment of senior secured term loan






(1,300
)










(1,300
)Additions to deferred financing costs






(88
)










(88
)Net cash provided by financing activities


(2,038
)


(1,388
)










(3,426
)Effect of exchange rates on cash










89







89Net cash provided by discontinued operations






(152
)










(152
)Net change in cash and cash equivalents


155



(7,753
)


(465
)






(8,063
)Cash and cash equivalents at beginning of period


3,717



63,990



2,140







69,847Cash and cash equivalents at end of period

$
3,872


$
56,237


$
1,675


$



$
61,784   36




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2006Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Cash provided by (used in):Operating activities of continuing operations

$
21


$
(3,668
)

$
29,577


$



$
25,930Investing activities from continuing operations:Additions to pre-publication costs










(22,852
)






(22,852
)Additions to property and equipment






(9
)


(2,750
)






(2,759
)Additions to intangibles










(39
)






(39
)Intercompany activity


115



4,213



(4,328
)






Acquisitions, net of cash acquired










907







907Proceeds from sale of businesses and assets






500



9







509Net cash provided by (used in) investing activities


115



4,704



(29,053
)






(24,234
)Financing activities of continuing operations:Proceeds from exercise of stock options


10















11Repayment of senior secured term loan






(1,300
)










(1,300
)Additions to deferred financing costs






(103
)










(104
)Net cash provided by (used in) financing activities


10



(1,403
)










(1,393
)Effect of exchange rates on cash










245







245Net cash used in discontinued operations






(293
)










(293
)Net change in cash and cash equivalents


146



(660
)


769







255Cash and cash equivalents at beginning of period


3,571



64,650



1,371







69,592Cash and cash equivalents at end of period

$
3,717


$
63,990


$
2,140


$



$
69,847   37




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31, 2005Parent





GuarantorGuarantor


HCOC


Subsidiaries


Eliminations


Consolidated(In thousands)Cash provided by (used in):Operating activities of continuing operations

$
(694
)

$
712


$
24,473


$



$
24,491Investing activities from continuing operations:Additions to pre-publication costs










(21,877
)






(21,877
)Additions to property and equipment






(76
)


(3,755
)






(3,831
)Additions to intangibles










(20
)






(20
)Intercompany activity


796



(2,872
)


2,076







Acquisitions, net of cash acquired






(12,255
)










(12,255
)Proceeds from sale of businesses and assets






8,500











8,500Net cash provided by (used in) investing activities


796



(6,702
)


(23,577
)






(29,483
)Financing activities of continuing operations:Repayment of senior secured term loan






(1,300
)










(1,300
)Proceeds from exercise of stock options


9















9Additions to deferred financing costs






(511
)










(511
)Net cash provided by (used in) financing activities


9



(1,811
)










(1,802
)Effect of exchange rates on cash










(154
)






(154
)Net cash used by discontinued operations






(1,488
)


(553
)






(2,041
)Net change in cash and cash equivalents


111



(9,290
)


190







(8,989
)Cash and cash equivalents at beginning of period


3,460



73,940



1,181







78,581Cash and cash equivalents at end of period

$
3,571


$
64,650


$
1,371


$



$
69,592  38




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  23.
    Related
    Party Transaction        24.
    Subsequent
    Events  Triumph Learning, Recorded Books Oakstone
    Publishing Sundance/Newbridge
 39




---



##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC.  PARENT COMPANY
  Schedule I 
    Condensed Financial Information
  Condensed
    Balance Sheets
  As of December 31,2007


2006(Restated)(In thousands)ASSETSCurrent assets

$
3,872


$
3,718Investment in subsidiary


(15,313
)


4,193Long term assets


1,448



2,127Total assets

$
(9,993
)

$
10,038LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities

$



$
Long term debt


118,362



254,473Other long term liabilities


18,474



18,432Redeemable preferred stock






41,051Stockholders deficit:Common stock


3



20Accumulated deficit


(146,832
)


(303,938
)Total stockholders deficit


(146,829
)


(303,918
)Total liabilities and stockholders deficit

$
(9,993
)

$
10,038   Condensed
    Statements of Operations
  Year Ended December 31,2007


2006


2005(In thousands)Revenues

$



$



$
General and administrative expenses


265



125



787Operating loss


(265
)


(125
)


(787
)Equity in net (loss) income of subsidiary


(18,835
)


(40,788
)


608Other income (expense)


82,650



(31,942
)


(31,845
)Net income (loss)

$
63,550


$
(72,855
)

$
(32,024
)  40




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##### Table of Contents



Condensed
    Statements of Cash Flows
  Year Ended December 31,2007


2006


2005(In thousands)Cash provided by (used in):Operating activities

$
(110
)

$
21


$
(694
)Investing activities


2,303



115



796Financing activities


(2,038
)


10



9Net change in cash


155



146



111Cash at beginning of period


3,717



3,571



3,460Cash at the end of the year

$
3,872


$
3,717


$
3,571   1.
    Basis of
    Presentation   41




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##### Table of Contents



HAIGHTS
    CROSS COMMUNICATIONS, INC. AND SUBSIDIARIES
  Schedule II 
    Valuation and Qualifying Account Summary
  For the Years ended December 31, 2007, 2006 and 2005:
  AdditionsBalance at


Charged to





Charged toBeginning of


Costs and





Other





Balance atYear


Expenses





Accounts


Deductions


End of YearDescription

(Credit)


(Credit)


Acquisitions


Debit/(Credit)


Debit


(Credit)Year ended December 31, 2007:Allowance for doubtful accounts and returns

$
(3,167
)


(2,942
)










3,704
(3)

$
(2,405
)Allowance for senior secured promissory note(5)

$
(3,604
)


(341
)













$
(3,945
)Allowance for valuation of deferred tax asset

$
(61,211
)


(13,071
)













$
(74,282
)Allowance for inventory obsolescence

$
(3,683
)


(5,600
)










2,310
(4)

$
(6,973
)Year ended December 31, 2006:Allowance for doubtful accounts and returns

$
(3,487
)


(4,078
)










4,398
(3)

$
(3,167
)Allowance for senior secured promissory note(5)

$
(2,282
)


(1,322
)













$
(3,604
)Allowance for valuation of deferred tax asset

$
(44,860
)


(16,351
)













$
(61,211
)Allowance for inventory obsolescence

$
(2,749
)


(2,499
)










1,565
(4)

$
(3,683
)Year ended December 31, 2005:Allowance for doubtful accounts and returns

$
(3,351
)


(3,831
)


53
(1)






3,642
(3)

$
(3,487
)Allowance for senior secured promissory note(5)

$
(1,780
)


(502
)













$
(2,282
)Allowance for valuation of deferred tax asset

$
(40,684
)


(4,176
)













$
(44,860
)Allowance for inventory obsolescence

$
(2,032
)


(1,163
)


(47
)(2)






493
(4)

$
(2,749
)     (1)
    
    Relates to an adjustment to the valuation of Options
    Publishingand reserves added with the Scott Publishingand CMEinfo acquisitions(2)
    
    Relates to reserves added with the acquisitions of Scott
    Publishingand CMEinfo.(3)
    
    Primarily relates to return of products.(4)
    
    Relates to the destruction of obsolete inventory.(5)
    
    Relates to sale of Triumph College (see Note 20 in our
    consolidated financial statements included elsewhere in this
    Annual Report on
    Form 10-K.) 42




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##### 



PART IV
  
  Item 15.
    Exhibits    Financial Statements.
  Report of Ernst & Young LLP,
    Independent Registered Public Accounting Firm


3Consolidated Balance Sheets


4Consolidated Statements of Operations


5Consolidated Statements of Changes in
    Stockholders Deficit


6Consolidated Statements of Cash Flows


7Notes to Consolidated Financial Statements


82. Financial Statement SchedulesSchedule I  Condensed Financial
    Information


40Schedule II  Valuation and
    Qualifying Account Summary


42EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION      Exhibits.
 43




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Exhibit Description2
.1

Asset Purchase Agreement, dated as of March 6, 2004, by and
    among Haights Cross Communications, Inc., Buckle Down Publishing
    Company and the other parties named therein, incorporated by
    reference to Exhibit 2.1 of Haights Cross Communications,
    Inc.s Current Report on
    Form 8-K
    filed April 20, 20042
.2

Asset Purchase Agreement, dated as of November 11, 2004, by
    and among Haights Cross Communications, Inc., Haights Cross
    Operating Company, Options Publishing, LLC, Options Publishing,
    Inc., and certain stockholders of Options Publishing, Inc. named
    therein, incorporated by reference to Exhibit 2.1 of
    Haights Cross Communications, Inc.s Current Report on
    Form 8-K
    filed December 6, 20042
.3

Purchase and Sale Agreement, dated as of November 11, 2004,
    by and between Options Publishing, LLC and Merrimack M&R
    Realty LLC, incorporated by reference to Exhibit 2.2 of
    Haights Cross Communications, Inc.s Current Report on
    Form 8-K
    filed December 6, 20043
.1

Second Amended and Restated Certificate of Incorporation of
    Haights Cross Communications, Inc., incorporated by reference to
    Exhibit 3.1 of Haights Cross Communications, Inc.s
    Special Report on
    Form 10-K
    filed April 19, 20043
.1(a)

Certificate of Amendment dated August 10, 2007 to Second
    Amended and Restated Certificate of Incorporation of Haights
    Cross Communications, Inc., incorporated by reference to
    Exhibit 3.1 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed August 16, 20073
.1(b)

Certificate of Amendment dated June 28, 2007 to Second
    Amended and Restated Certificate of Incorporation of Haights
    Cross Communications, Inc., incorporated by reference to
    Exhibit 3.1(a) of Haights Cross Communications, Inc.s
    Quarterly Report on
    Form 10-Q
    filed November 14, 20073
.1(c)

Certificate of Amendment dated January 29, 2008 to Second
    Amended and Restated Certificate of Incorporation of Haights
    Cross Communications, Inc., incorporated by reference to
    Exhibit 3.1 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed January 31, 20083
.1(d)

Certificate of Elimination of Shares of Haights Cross
    Communications, Inc. Designated as Series C Preferred Stock
    dated January 30, 2008, incorporated by reference to
    Exhibit 3.2 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed January 31, 20083
.2

Bylaws of Haights Cross Communications, Inc., incorporated by
    reference to Exhibit 3.2 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.2(a)

Amendment to the Bylaws of Haights Cross Communications, Inc.
    dated August 10, 2007, incorporated by reference to
    Exhibit 3.2 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed August 16, 20073
.2(b)

Amendment to the Bylaws of Haights Cross Communications, Inc.
    dated September 21, 2007, incorporated by reference to
    Exhibit 3.1 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed September 27, 20073
.3

Certificate of Incorporation of Haights Cross Operating Company,
    incorporated by reference to Exhibit 3.3 of Haights Cross
    Communications, Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.4

Bylaws of Haights Cross Operating Company, incorporated by
    reference to Exhibit 3.4 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.5

Certificate of Formation of Triumph Learning, LLC, incorporated
    by reference to Exhibit 3.7 of Haights Cross
    Communications, Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.6

Amended and Restated Limited Liability Company Agreement of
    Triumph Learning, LLC, incorporated by reference to
    Exhibit 3.8 of Haights Cross Communications, Inc.s
    Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 2003 44




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##### Table of Contents



ExhibitNo.

Exhibit Description3
.7

Certificate of Formation of Oakstone Publishing, LLC,
    incorporated by reference to Exhibit 3.9 of Haights Cross
    Communications, Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.8

Amended and Restated Limited Liability Company Agreement of
    Oakstone Publishing, LLC, incorporated by reference to
    Exhibit 3.10 of Haights Cross Communications, Inc.s
    Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.9

Certificate of Formation of Recorded Books, LLC, incorporated by
    reference to Exhibit 3.11 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.10

Amended and Restated Limited Liability Company Agreement of
    Recorded Books, LLC, incorporated by reference to
    Exhibit 3.12 of Haights Cross Communications, Inc.s
    Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.11

Certificate of Formation of Sundance/ Newbridge Educational
    Publishing, LLC, incorporated by reference to Exhibit 3.13
    of Haights Cross Communications, Inc.s Registration
    Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.12

Amended and Restated Limited Liability Company Agreement of
    Sundance/ Newbridge Educational Publishing, LLC, incorporated by
    reference to Exhibit 3.14 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.13

Articles of Association of W F Howes Limited, incorporated by
    reference to Exhibit 3.17 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20033
.14

Memorandum of Association of W F Howes Limited, incorporated by
    reference to Exhibit 3.18 of Haights Cross Communications,
    Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20034
.1

Indenture, dated as of August 20, 2003, by and between
    Haights Cross Operating Company and Wells Fargo Bank Minnesota,
    N.A., as Trustee, incorporated by reference to Exhibit 4.1
    of Haights Cross Communications, Inc.s Registration
    Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20034
.2

Form of Haights Cross Operating Company
    113/4% Senior
    Note due 2011, incorporated by reference to Exhibit 4.2 of
    Haights Cross Communications, Inc.s Registration Statement
    on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 20034
.3

Indenture, dated as of February 2, 2004, by and between
    Haights Cross Communications, Inc. and Wells Fargo Bank
    Minnesota, N.A., as Trustee, incorporated by reference to
    Exhibit 4.4 of Haights Cross Communications, Inc.s
    Special Report on
    Form 10-K
    filed April 19, 20044
.4

Form of Haights Cross Communications, Inc.
    121/2% Senior
    Discount Note due 2011, incorporated by reference to
    Exhibit 4.5 of Haights Cross Communications, Inc.s
    Special Report on
    Form 10-K
    filed April 19, 20044
.5

Supplemental Indenture, dated as of December 10, 2004, by
    and among Options Publishing, LLC, Haights Cross Operating
    Company, the guarantors signatory thereto, and Wells Fargo Bank,
    N.A., as trustee, supplementing the Indenture, dated as of
    August 20, 2003, among Haights Cross Operating Company, the
    guarantors named therein and Wells Fargo Bank, N.A., as trustee,
    incorporated by reference to Exhibit 4.2 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed December 15, 20044
.6

Form of Warrant for the Purchase of Shares of Common Stock of
    Haights Cross Communications, Inc., incorporated by reference to
    Exhibit 4.6 of the Companys Annual Report on Form
    10-K filed
    March 31, 200810
.1

Lease Agreement, dated as of January 15, 2003, by and
    between Sundance Publishing, LLC and LIT Industrial Limited
    Partnership, incorporated by reference to Exhibit 10.1 of
    Haights Cross Communications, Inc.s Registration Statement
    on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 2003 45




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##### Table of Contents



ExhibitNo.

Exhibit Description10
.2

Investors Registration Rights Agreement, dated as of
    December 10, 1999, by and among Haights Cross
    Communications, Inc., Haights Cross Operating Company and the
    Holders (as defined therein), incorporated by reference to
    Exhibit 10.6 of Haights Cross Communications, Inc.s
    Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 200310
.3+

Haights Cross Communications, Inc. 401(k) Savings Plan,
    incorporated by reference to Exhibit 10.9 of Haights Cross
    Communications, Inc.s Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 200310
.4

Term Loan Agreement, dated as of August 20, 2003, by and
    among Haights Cross Operating Company, the Several Lenders from
    time to time parties thereto and Bear Stearns Corporate Lending
    Inc., as Administrative Agent, incorporated by reference to
    Exhibit 10.10 of Haights Cross Communications, Inc.s
    Registration Statement on
    Form S-4
    (Reg.
    No. 333-109381)
    filed October 2, 200310
.5

Term Loan Agreement, dated as of December 10, 2004, by and
    among Haights Cross Operating Company, Bear Stearns &
    Co. Inc., as lead arranger, Bear Stearns Corporate Lending Inc.,
    as Administrative Agent, and the lenders party thereto,
    incorporated by reference to Exhibit 1.1 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed December 15, 200410
.6+

Description of the Haights Cross Communications, Inc. Annual
    Management/ Employee Bonus Plan for fiscal year 2007,
    incorporated by reference to Exhibit 10.1 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed April 6, 200710
.7+

Description of the Haights Cross Communications, Inc. Annual
    Management/ Employee Bonus Plan for fiscal year 2008,
    incorporated by reference to Exhibit 10.1 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed February 11, 200810
.8+

Description of the Haights Cross Communications, Inc. 2006
    Expense Savings Incentive Plan, incorporated by reference to
    Exhibit 99.1 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed April 6, 200710
.9+

Employment Agreement, dated January 31, 2007, by and
    between Haights Cross Communications, Inc. and Paul J. Crecca,
    incorporated by reference to Exhibit 10.3 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed February 2, 200710
.10+

Amendment dated December 11, 2007 to the Employment
    Agreement between Haights Cross Communications, Inc. and Paul J.
    Crecca, incorporated by reference to Exhibit 10.1 of
    Haights Cross Communications, Inc.s Current Report on
    Form 8-K
    filed December 11, 200710
.11+

Noncompetition Agreement, dated January 31, 2007, by and
    between Haights Cross Communications, Inc. and Paul J. Crecca,
    incorporated by reference to Exhibit 10.4 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed February 2, 200710
.12

Recapitalization Agreement, dated June 29, 2007 by and
    among Haights Cross Communications, Inc. and the Investors named
    therein, incorporated by reference to Exhibit 10.1 of
    Haights Cross Communications, Inc.s Current Report on
    Form 8-K
    filed July 6, 200710
.13

Shareholders Agreement by and among Haights Cross
    Communications, Inc. and the Investors named therein dated
    August 10, 2007, incorporated by reference to
    Exhibit 10.1 of Haights Cross Communications, Inc.s
    Current Report of
    Form 8-K
    filed August 16, 200710
.14

Amendment dated January 29, 2008 to Shareholders Agreement
    dated August 10, 2007, incorporated by reference to
    Exhibit 10.1 of Haights Cross Communications, Inc.s
    Current Report of
    Form 8-K
    filed January 31, 200810
.15

Indemnification Agreement by and between Haights Cross
    Communications, Inc. and Eugene Davis dated August 10,
    2007, incorporated by reference to Exhibit 10.2 of Haights
    Cross Communications, Inc.s Current Report of
    Form 8-K
    filed August 16, 2007 46




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##### Table of Contents



ExhibitNo.

Exhibit Description10
.16

Indemnification Agreement by and between Haights Cross
    Communications, Inc. and T.J. Vigliotta dated August 10,
    2007, incorporated by reference to Exhibit 10.3 of Haights
    Cross Communications, Inc.s Current Report of
    Form 8-K
    filed August 16, 200710
.17

Indemnification Agreement by and between Haights Cross
    Communications, Inc. and Curry Ford dated August 10, 2007,
    incorporated by reference to Exhibit 10.4 of Haights Cross
    Communications, Inc.s Current Report of
    Form 8-K
    filed August 16, 200710
.18

Indemnification Agreement by and between Haights Cross
    Communications, Inc. and John A. McKenna, Jr., dated
    August 21, 2007, incorporated by reference to
    Exhibit 10.1 of Haights Cross Communications, Inc.s
    Current Report of
    Form 8-K
    filed August 22, 200710
.19

Release and Settlement Agreement by and among Haights Cross
    Communications, Inc. and the other parties named therein dated
    August 10, 2007, incorporated by reference to
    Exhibit 10.6 of Haights Cross Communications, Inc.s
    Current Report of
    Form 8-K
    filed August 16, 200710
.20+

Separation and Release Agreement dated August 24, 2007 by
    and between Peter J. Quandt and Haights Cross Communications,
    Inc., incorporated by reference to Exhibit 10.1 of Haights
    Cross Communications, Inc.s Current Report of
    Form 8-K
    filed August 27, 200710
.21+

Noncompetition Agreement, dated January 31, 2007, by and
    between the Company and Peter J. Quandt, incorporated
    by reference to Exhibit 10.1 of Haights Cross
    Communications, Inc.s Current Report on
    Form 8-K
    filed February 2, 200710
.22

Indemnification Agreement by and between Haights Cross
    Communications, Inc. and Paul J. Crecca dated September 21,
    2007, incorporated by reference to Exhibit 10.1 of Haights
    Cross Communications, Inc.s Current Report of
    Form 8-K
    filed September 27, 200710
.23+

Haights Cross Communications, Inc. Transaction Bonus Plan,
    incorporated by reference to Exhibit 10.1 of Haights Cross
    Communications, Inc.s Current Report of
    Form 8-K
    filed October 15, 200712
.1

Statement Regarding Computation of Ratio of Earnings to Fixed
    Charges, incorporated by reference to Exhibit 12.1 of the
    Companys Annual Report on Form 10-K filed March 31,
    200814
.1

Code of Business Conduct and Ethics, incorporated by reference
    to Exhibit 14 of Haights Cross Communications, Inc.s
    Current Report on
    Form 8-K
    filed September 28, 200421
.1

Subsidiaries of Haights Cross Communications, Inc. and
    Subsidiaries of Haights Cross Operating Company, incorporated by
    reference to Exhibit 21.1 of the Companys Annual
    Report on Form 10-K filed March 31, 200824
.1

Power of Attorney (Included in signature page), incorporated by
    reference to Exhibit 24.1 of the Companys Annual
    Report on Form 10-K filed March 31, 200831
.1*

Rule 13a-14(a)/15d-14(a)
    Certification of Paul J. Crecca31
.2*

Rule 13a-14(a)/15d-14(a)
    Certification of Mark Kurtz32
.1*

Certification of Paul J. Crecca pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 200232
.2*

Certification of Mark Kurtz pursuant to 18 U.S.C. Section
    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002     +
    
    Indicates a management contract or any compensatory plan,
    contract or arrangement*
    
    Filed herewith 47




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##### Table of Contents



SIGNATURES
      By:
    /s/  PAUL
    J. CRECCA   Director, Chief Executive Officer and President
 (Principal Executive Officer)
       48