UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2007

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

           For the transition period from ____________to_____________.

                        COMMISSION FILE NUMBER 333-48221

                           NEBRASKA BOOK COMPANY, INC.
             (Exact name of registrant as specified in our charter)

               KANSAS                                           47-0549819
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

                             4700 SOUTH 19TH STREET
                             LINCOLN, NE 68501-0529
                    (Address of Principal executive offices)

                                 (402) 421-7300
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(b) of the Act: NONE
        Securities registered pursuant to Section 12(g) of the Act: NONE

     Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] NO [X]

     Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. YES [X] No [ ]

     Indicate by check mark whether the registrant (1) has filed all reports
required 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 [ ] NO [X]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

    Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act. Large
accelerated filer [ ] Accelerated filer [ ] NON-ACCELERATED FILER [X]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] NO [X]

    MARKET VALUE OF THE REGISTRANT'S VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT - NOT APPLICABLE AS REGISTRANT'S STOCK IS NOT PUBLICLY TRADED.

    THERE WERE 100 SHARES OF COMMON STOCK OUTSTANDING AS OF JUNE 29, 2007.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

                            Total Number of Pages: 99

                             Exhibit Index: PAGE 92

<PAGE>
                                TABLE OF CONTENTS


PART I:

Item 1       Business..........................................................3
Item 1A      Risk Factors.....................................................12
Item 1B      Unresolved Staff Comments........................................14
Item 2       Properties.......................................................15
Item 3       Legal Proceedings................................................15
Item 4       Submission of Matters to a Vote of Security Holders..............15

PART II:

Item 5       Market for Registrant's Common Equity, Related Stockholder
             Matters and Issuer Purchases of Equity Securities................16
Item 6       Selected Financial Data..........................................16
Item 7       Management's Discussion and Analysis of Financial Condition
             and Results of Operations........................................19
Item 7A      Quantitative and Qualitative Disclosures about Market Risk.......33
Item 8       Financial Statements and Supplementary Data......................35
Item 9       Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure.........................................68
Item 9A      Controls and Procedures..........................................68
Item 9B      Other Information................................................68

PART III:

Item 10     Directors, Executive Officers, and Corporate Governance...........69
Item 11     Executive Compensation............................................70
Item 12     Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters...................................78
Item 13     Certain Relationships and Related Transactions, and
            Director Independence.............................................79
Item 14     Principal Accounting Fees and Services............................79

PART IV:

Item 15     Exhibits, Financial Statement Schedules...........................81
Signatures....................................................................89
Supplemental Information to be Furnished......................................89
Financial Statement Schedule II - Valuation and Qualifying Accounts...........90
Exhibit Index.................................................................92

                                       2
<PAGE>


                                     PART I.

                                ITEM 1. BUSINESS.

    References in this Annual Report on Form 10-K to the "Company" refer to
Nebraska Book Company, Inc., the term "NBC" refers to our parent company, NBC
Acquisition Corp., and the terms "we," "our," "ours," and "us" refer
collectively to the Company and its subsidiaries, except where otherwise
indicated.

    The Company is a wholly-owned subsidiary of NBC. NBC does not conduct
significant activities apart from its investment in the Company. Effective July
1, 2002, our distance learning division was separately incorporated under the
laws of the State of Delaware as Specialty Books, Inc., a wholly-owned
subsidiary of ours ("Specialty Books"). Effective January 1, 2005, our textbook
division was separately incorporated under the laws of the State of Delaware as
NBC Textbooks LLC, a wholly-owned subsidiary of ours ("Textbook Division"). On
May 1, 2006, we added another wholly-owned subsidiary through the acquisition of
all of the outstanding stock of College Book Stores of America, Inc. ("CBA"), an
entity separately incorporated under the laws of the State of Illinois. On April
24, 2007, we established Net Textstore LLC, a wholly-owned subsidiary of ours
which was separately incorporated under the laws of the State of Delaware.

    On March 4, 2004, Weston Presidio (Weston Presidio Capital III, L.P., Weston
Presidio Capital IV, L.P., WPC Entrepreneur Fund, L.P., and WPC Entrepreneur
Fund II, L.P.) gained a controlling interest in NBC, and hence in us, through
(i) the formation of two new corporations, NBC Holdings Corp. and New NBC
Acquisition Corp.; (ii) a $28.2 million equity investment by Weston Presidio in
NBC Holdings Corp., funds for which were ultimately paid to NBC in the form of a
capital contribution; (iii) Weston Presidio's purchase of 36,455 shares of NBC's
common stock directly from its holders; (iv) the cancellation of 870,285 shares
of NBC's common stock upon payment by NBC of merger consideration of $180.4
million to the shareholders of record for such shares; (v) the exchange of
397,711 shares of NBC's common stock for 512,799 shares of New NBC Acquisition
Corp. capital stock in the merger of the two entities with NBC as the surviving
entity; and (vi) the exchange of 512,799 shares of NBC's common stock by Weston
Presidio and current and former members of management for a like number of
shares of NBC Holdings Corp. capital stock. Payment of the $180.4 million of
merger consideration was funded through proceeds from the $28.2 million capital
contribution, available cash, and proceeds from $405.0 million in new debt
financing, of which $261.0 million was utilized by NBC and the Company to retire
certain debt instruments outstanding at March 4, 2004 or to place funds in
escrow for untendered debt instruments called for redemption on March 4, 2004
and redeemed on April 3, 2004. We declared and paid dividends to NBC of $184.3
million to help finance this transaction. For ease of presentation, financial
information presented in the Annual Report on Form 10-K reflects this
transaction as if it had occurred on March 1, 2004. We have determined that no
material transactions occurred during the period from March 1, 2004 through
March 4, 2004. As a result of this transaction, financial information for
periods ending prior to March 1, 2004 is presented as the "Predecessor," while
financial information for periods after March 1, 2004 is presented as the
"Successor." Throughout this Annual Report, we generally refer to all of the
steps comprising this transaction as the "March 4, 2004 Transaction."

    On April 27, 2004, we filed a Registration Statement on Form S-4 with the
Securities and Exchange Commission for purposes of registering debt securities
to be issued in exchange for the Senior Subordinated Notes arising out of the
March 4, 2004 Transaction. The Securities and Exchange Commission declared such
Registration Statement effective on May 7, 2004. All notes were tendered in the
offer to exchange that was completed on June 8, 2004.

GENERAL

    As of March 31, 2007, we operated 244 bookstores on or adjacent to college
campuses through which we sell a variety of new and used textbooks and general
merchandise. In addition, we are one of the largest wholesale distributors of
used college textbooks in North America, offering over 119,000 textbook titles
and selling more than 7.0 million books annually, primarily to campuses located
in the United States. We are also a leading provider of distance education
materials to students in nontraditional courses, which include correspondence
and corporate education courses. Furthermore, we provide the college bookstore
industry with a variety of services including proprietary information and
E-commerce systems, in-store promotions, buying programs, and marketing
services. With origins dating to 1915 as a single bookstore operation, we have
built a consistent reputation for excellence in order fulfillment, shipping
performance and customer service.

    We entered the wholesale used textbook market following World War II, when
the supply of new textbooks could not meet the demand created by the return of
ex-GI students. In 1964, we became a national, rather than regional, wholesaler
of used textbooks as a result of our purchase of The College Book Company of
California. During the 1970's we continued our focus on the wholesale business.
However, realizing the synergies that exist between wholesale operations and
college bookstore operations, in the 1980's we expanded our efforts in the
college bookstore market to primarily operate bookstores on or near larger

                                       3
<PAGE>

campuses, typically where the institution-owned college bookstore was
contract-managed by a competitor or where we did not have a significant
wholesale presence. In the last several fiscal years we have revised our college
bookstore strategy to expand our efforts in the contract-management of
institutional bookstores - primarily those that have already been served by
another company offering contract-management services. Today, we service the
college bookstore industry through our Bookstore, Textbook, and Complementary
Services Divisions.

    BOOKSTORE DIVISION. College bookstores are a primary outlet for sales of new
and used textbooks to students. In addition, we sell a variety of other
merchandise including apparel, general books, sundries, and gift items. As of
March 31, 2007, we operated 244 college bookstores on or adjacent to college
campuses. Of these 244 bookstores, 126 were leased from the educational
institution that they served (also referred to as contract-managed). On May 1,
2006, we acquired 101 college bookstore locations, 98 of which were
contract-managed, through the acquisition of all of the outstanding stock of
CBA. CBA began providing contract-management services to small to medium-sized
colleges and universities nationwide in 1984, and prior to the acquisition had
and now continues to maintain one of the longest tenured management teams in the
college bookstore industry. Our college bookstores are located at college
campuses of all sizes, including some of the nation's largest campuses, such as:
Miami-Dade College; Ohio State University; Arizona State University; University
of Florida; Michigan State University; Texas A&M University; University of
Central Florida; Pennsylvania State University; University of Michigan; Florida
State University; and University of Arizona. In addition to generating profits,
our Bookstore Division provides an exclusive source of used textbooks for sale
across our wholesale distribution network.

    TEXTBOOK DIVISION. We are one of the largest wholesale distributors of used
college textbooks in North America. Our Textbook Division consists primarily of
selling used textbooks to college bookstores, buying them back from students or
college bookstores at the end of each school semester and then reselling them to
college bookstores. We purchase used textbooks from and resell them to college
bookstores at college campuses of all sizes, including many of the nation's
largest campuses, such as: University of Minnesota; University of Texas;
University of Illinois; University of Washington; Indiana University; and San
Diego State University. Historically, Textbook Division sales have been
determined primarily by the amount of used textbooks that we could purchase.
This occurs because the demand for used textbooks has consistently outpaced
supply. Our strong relationships with the management of college bookstores
nationwide have provided important access to valuable market information
regarding the campus-by-campus supply and demand of textbooks, as well as an
ability to procure large quantities of a wide variety of textbooks. We provide
an internally-developed BUYER'S GUIDE to our Textbook Division customers. This
guide lists details such as author, new copy retail price, and our repurchase
price for over 52,000 textbook titles.

    COMPLEMENTARY SERVICES DIVISION. With our acquisition of Specialty Books in
May 1997, we entered the distance education market, which consists of providing
education materials to students in private high schools, nontraditional college
and other courses (such as correspondence courses, continuing and corporate
education courses and courses offered through electronic media such as the
Internet). We believe the fragmented distance education market represents an
opportunity for us to leverage our order fulfillment and distribution expertise
in a rapidly growing sector.

    Other services offered to college bookstores include the sale of computer
hardware and software, such as our turnkey bookstore management software, and
related maintenance contracts. We have installed our proprietary total store
management system at approximately 890 college bookstore locations, and we have
an installed base of approximately 170 college bookstore locations for our
textbook management control systems. In total, including our own bookstores,
almost 1,060 college bookstore locations utilize our software products. We also
have a leading E-commerce platform for college bookstores with over 480 stores
licensing the technology via CampusHub. We also provide the college bookstore
industry with buying programs and marketing and store design services.

    On July 1, 2003, we acquired all of the outstanding shares of common stock
of TheCampusHub.com, Inc. ("CampusHub"), an entity affiliated with us through
common ownership. CampusHub is no longer separately incorporated and is instead
accounted for as a division within our Complementary Services Division segment.
CampusHub provides college bookstores with a way to sell in-store inventory and
virtual brand name merchandise over the Internet utilizing technology originally
developed by us.

    In January 1998, we acquired Connect 2 One (formerly Collegiate Stores
Corporation), a centralized buying service for over 720 college bookstores
across the United States. Through the enhanced purchasing power of such a large
group of bookstores, participating bookstores are able to purchase certain
general merchandise at lower prices than those that would be paid by the stores
individually. Bookstores participating in Connect 2 One's ("C2O") programs also
provide us with another potential source of used textbooks.

                                       4
<PAGE>


    We also provide a consulting and store design program to assist college
bookstores in store presentation and layout. During fiscal year 2002, we
introduced a marketing services program to leverage our distribution channels.
Marketing services offered by us enable national vendors to reach college
students through in-store kiosks, prepackaged freshman mailers, coupon books,
e-mail promotions and in-store displays.

INDUSTRY SEGMENT FINANCIAL INFORMATION

    Revenue, operating profit or loss, and identifiable assets attributable to
each of our reportable segments are disclosed in the notes to the consolidated
financial statements presented in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA of our Annual Report on Form 10-K. We make our periodic and current reports
available, free of charge, through www.nebook.com as soon as reasonably
practicable after such material is electronically filed with the Securities and
Exchange Commission. Information contained on our web site is not a part of this
Annual Report on Form 10-K.

BUSINESS STRATEGY

    Our objective is to strengthen our position as a leading provider of
products and services to the college bookstore market, thereby increasing
revenue and cash flow. In order to accomplish our goal, we intend to pursue the
following strategies:

    CAPITALIZE ON COLLEGE BOOKSTORE OPPORTUNITIES. We intend to increase
revenues for our Bookstore Division by acquiring, opening or contract-managing
additional bookstores at selected college campuses and offering additional
specialty products and services at our existing bookstores. We also intend to
increase same-store sales growth through a more coordinated effort to implement
best practices across our entire bookstore network.

    ENHANCE GROWTH IN THE TEXTBOOK DIVISION. We expect the Textbook Division to
continue to be a primary contributor of revenues and cash flows, primarily as a
result of an expected increase in college enrollments and continued utilization
of used textbooks; as well as through the expansion of our own Bookstore
Division, which should provide an additional supply of used textbooks.
Additionally, our commission structure rewards customers who make a long-term
commitment to supplying us with a large portion of their textbooks, and we
continue to change and enhance our marketing campaign to increase student
awareness of the benefits of buying and selling used textbooks.

    CONTINUE TO SERVICE THE DISTANCE EDUCATION MARKET. During fiscal year 2005,
Specialty Books' largest customer discontinued the use of Specialty Books'
services for delivery of educational materials. However, we expect Specialty
Books' revenues, after adjusting for the loss of this customer, to grow over
time as the distance education market continues to expand due to the increased
popularity of correspondence courses, continuing and corporate education courses
and courses offered through electronic media such as the Internet.

    INCREASED MARKET PENETRATION THROUGH TECHNOLOGY. We intend to continue
generating incremental revenue through the sale of our turnkey bookstore
management software. The installation of such software, along with E-commerce
technology offered through CampusHub, a division within the Complementary
Services Division, also increases the channels through which we can access the
college and university market.

    EXPANSION OF OTHER SERVICES PROGRAMS. We intend to continue to develop and
provide other services that enhance the college bookstore business, such as our
centralized buying group, marketing services, and store design consulting.

INDUSTRY OVERVIEW

    Based on recent industry trade data from the National Association of College
Stores, the college bookstore industry remains strong, with over 4,400 college
stores generating annual sales of approximately $11.2 billion to college
students and other consumers in the United States. Sales of textbooks and other
education materials used for classroom instruction comprise approximately
two-thirds of that amount. We expect this market will continue to grow as a
result of anticipated increases in enrollment at U.S. colleges attributable to
the children of the baby boom generation entering the college population.

                                       5
<PAGE>

    COLLEGE BOOKSTORE MARKET. College stores generally fall into three
categories: (i) INSTITUTIONAL -- stores that are primarily owned and operated by
institutions of higher learning (represents approximately 49.0% of the U.S.
market according to the National Association of College Stores); (ii)
CONTRACT-MANAGED -- stores owned by institutions of higher learning and managed
by outside, private companies, typically found on-campus (represents
approximately 34.0% of the U.S. market according to the National Association of
College Stores); and (iii) INDEPENDENT STORES -- privately owned and operated
stores, generally located off campus (represents approximately 17.0% of the U.S.
market according to the National Association of College Stores).

    WHOLESALE TEXTBOOK MARKET. We believe that used textbooks will continue to
be attractive to both students and college bookstores. Used textbooks provide
students with a lower-cost alternative to new textbooks and bookstores typically
achieve higher margins through the sale of used rather than new textbooks.

    The pricing pattern of textbook publishing accounts for a large part of the
growth of the used book market. Because of copyright restrictions, each new
textbook is produced by only one publisher, which is free to set the new copy
retail price and discount terms to bookstores. Publishers generally offer new
textbooks at prices that enable college bookstores to achieve a gross margin of
23.0% to 25.0% on new textbooks. Historically, the high retail costs of new
textbooks and the higher margins achieved by bookstores on the sale of used
textbooks (approximately 33.0%) have encouraged the growth of the market for
used textbooks.

    The used textbook cycle begins with new textbook publishers, who purposely
plan obsolescence into the publication of new textbooks. Generally, new editions
of textbooks are produced every two to four years. In the first year of a new
edition, there are few used copies of a new edition available. In the second and
third years, used textbooks become increasingly available. Simultaneously,
publishers begin to plan an updated edition. In years four and beyond, at the
end of the average life cycle of a particular edition, as publishers cut back on
original production, used textbooks generally represent a majority (in unit
terms) of the particular edition in use. While the length of the cycle varies by
title (and sometimes is indefinite, as certain titles are never updated), the
basic supply/demand progression remains fairly consistent.

    College bookstores begin to place orders with used textbook wholesalers once
professors determine which books will be required for their upcoming courses,
usually by the end of May for the fall semester and the end of November for the
spring semester. Bookstore operators must first determine their allocation
between new and used copies for a particular title but, in most cases, they will
order an ample supply of used books because: (i) used book demand from students
is typically strong and consistent; (ii) many operators only have access to a
limited supply from wholesalers and believe that not having used book
alternatives could create considerable frustration among students and with the
college administration; (iii) bookstore operators earn higher margins on used
books than on new books; and (iv) both new and used books are sold with return
privileges, eliminating any overstock risk (excluding freight charges) to the
college bookstore.

    New textbook ordering usually begins in June, at which time the store
operator augments its expected used book supply by ordering new books. By this
time, publishers typically will have just implemented their annual price
increases. These regular price increases allow us and our competitors to buy
used textbooks based on old list prices (in May) and to almost simultaneously
sell them based on new higher prices, thereby creating an immediate margin
increase.

    While price is an important factor in the store operator's purchasing
decision, available supply, as well as service, usually determine with which
used textbook wholesaler a college bookstore will develop a strong relationship.
Used textbook wholesalers that are able to significantly service a college
bookstore account typically receive preferential treatment from store operators,
both in selling and in buying used textbooks. Pure exclusive supply arrangements
in our market are rare. However, in the past eight to nine fiscal years, we have
been marketing our exclusive supply program to the industry. This program had
over 290 participating bookstores at the end of fiscal year 2007. We also
introduced the NBC Advantage program in fiscal year 2001. This program rewards
customers who make a long-term commitment to supplying us with a large portion
of their books. At the end of fiscal year 2007, over 560 bookstores were
participating in this program, approximately 280 of which were also
participating in the exclusive program. Since we are usually able to sell a
substantial majority of the used textbooks we are able to purchase, our ability
to obtain sufficient supply is a critical factor in our success.

                                       6
<PAGE>

PRODUCTS AND SERVICES

    BOOKSTORE DIVISION. As of March 31, 2007, we operated 244 college bookstores
on or adjacent to college campuses. These bookstores sell a wide variety of used
and new textbooks, general books and assorted general merchandise, including
apparel, sundries and gift items. Over the past three fiscal years, revenues of
our bookstores from activities other than used and new textbook sales have been
between 17.2% and 19.6% of total revenues. We have been, and intend to continue,
selectively expanding our product offerings at our bookstores in order to
increase sales and profitability. We have also installed software providing
E-commerce capabilities in all of our own bookstores, thereby allowing our
bookstores to further expand product offerings and compete with other online
textbook sellers.

    TEXTBOOK DIVISION. Our Textbook Division is engaged in the procurement and
redistribution of used textbooks on college campuses primarily across the United
States. The portion of the used textbook business that our division operates in
is limited to certain stores and certain books. In general, the portion of the
college bookstore market that our Textbook Division cannot access includes those
contract-managed stores that are not operated by us that sell their used
textbooks to affiliated companies, and institutional and independent stores, to
the extent that such used textbooks are repurchased from students and are
retained by the bookstore for resale without involving a wholesaler.

    We publish the BUYER'S GUIDE, which lists over 52,000 textbooks according to
author, title, new copy retail price, and our repurchase price. The BUYER'S
GUIDE is an important part of our inventory control and book procurement system.
We update and reprint the BUYER'S GUIDE nine times each year and make it
available in both print and various electronic formats, including on all of our
proprietary information systems. A staff of dedicated professionals gathers
information from all over the country in order to make the BUYER'S GUIDE into
what we believe to be the most comprehensive and up-to-date pricing and buying
aid for college bookstores. We also maintain a database of over 176,000 titles
in order to better serve our customers.

    COMPLEMENTARY SERVICES DIVISION. Through Specialty Books, we have access to
the market for distance education products and services. Currently, we provide
students at approximately 30 colleges and private high schools with textbooks
and materials for use in distance education and other education courses, and we
are a leading provider of textbooks to nontraditional programs and students such
as correspondence or corporate education students. We believe the fragmented
distance education market represents an opportunity for us to leverage our
fulfillment and distribution expertise in a rapidly growing sector. Beyond
textbooks, we offer services and specialty course materials to distance
education students including videotape duplication and shipping; shipping of
specialty, non-textbook course materials; and a sales and ordering function.
Students can order education materials from us over the Internet. Over the past
three fiscal years, revenues of Specialty Books have been between 44.4% and
63.7% of total Complementary Services Division revenues. Specialty Books'
largest customer, who accounted for more than 30.0% of Specialty Books' fiscal
year 2005 revenues, discontinued the use of Specialty Books' services for
delivery of educational materials during fiscal year 2005.

    Other services offered to college bookstores include services related to our
turnkey bookstore management software, the sale of other software and hardware,
and the related maintenance contracts. These services generate revenue and
assist us in gaining access to new sources of used textbooks. We have installed
our proprietary total store management system at approximately 890 college
bookstore locations, and we have an installed base of approximately 170 college
bookstore locations for our textbook management control systems. In total,
including our own bookstores, almost 1,060 college bookstore locations utilize
our software products. In addition, we have developed software for E-commerce
capabilities. These software products allow college bookstores to launch their
own E-commerce site and effectively compete against other online textbook
sellers by offering textbooks and both traditional and non-traditional store
merchandise online. Presently there are over 480 stores licensing our E-commerce
technology via CampusHub. Additionally, on February 27, 2006, we announced the
introduction of our digital delivery solution which will allow a college
bookstore to offer students the option of purchasing E-books via download in
addition to new and used textbooks.

    Through C2O, we are able to offer a variety of products and services to
participating college bookstores. C2O negotiates apparel, supplies, gifts, and
general merchandise discounts and develops and executes marketing programs for
its membership. C2O has evolved into a buying group with substantial purchasing
clout by aggregating the purchasing power of over 720 participating stores,
including our own bookstores. Other C2O marketing services include a freight
savings program, a credit card processing program, a shopping bag program, and
retail display allowances for magazine displays. Additionally, the C2O staff of
experienced professionals consults with the management and buyers of member
bookstores. Consulting services offered include strategic planning, store
review, merchandise assortment planning, buyer training, and help with other
operational aspects of the business. While consulting has historically
represented a relatively small component of C2O's business, it is nonetheless
strategically important to the ongoing success of this aspect of our business.

                                       7
<PAGE>

    We also provide a consulting and store design program to assist college
bookstores in store presentation and layout. Through our marketing services
program, we are able to leverage our distribution channels. Marketing services
offered by us enable national vendors to reach college students through in-store
kiosks, prepackaged freshman mailers, coupon books, e-mail promotions and
in-store displays.

BOOKSTORE DIVISION

    An important aspect of our business strategy is a program designed to reach
new customers through the opening or acquisition of bookstores adjacent to
college campuses or the contract-management of stores on campus. In addition to
generating sales of new and used textbooks and general merchandise, these
outlets enhance our Textbook Division by increasing the inventory of used books
purchased from the campus.

    A desirable campus for a company-operated, off-campus college bookstore is
one on which our Textbook Division does not currently buy or sell used textbooks
either because a competitor contract-manages the college's bookstore or the
college bookstore does not have a strong relationship with us. We generally will
not open a location on a campus where we already have a strong relationship with
the college bookstore because some college bookstores may view having a
competing location as a conflict of interest. A desirable campus for
contract-management is one where the current contract-management service is
being provided by a competitor of ours and the contract is expiring.

    We tailor each of our own bookstores to fit the needs and lifestyles of the
campus on which it is located. Individual bookstore managers are given
significant planning and managing responsibilities, including, hiring employees,
controlling cash and inventory, and purchasing and merchandising product. We
have staff specialists, or contracts with external specialists, to assist
individual bookstore managers in such areas as store planning, merchandise
purchasing and layout, inventory control and media buying.

    As of March 31, 2007 we operated 244 college bookstores nationwide, having
expanded from 108 bookstores in fiscal year 2003. During fiscal year 2007 we
completed the acquisition of 8 bookstore locations, initiated the
contract-management of 110 bookstore locations, and established the start-up of
2 bookstore locations.

    The table below highlights certain information regarding our bookstores
added and closed through March 31, 2007.

               Bookstores
                 Open at   Bookstores    Bookstores   Bookstores
                Beginning     Added        Closed     at End of
                of Fiscal    During        During       Fiscal
   Fiscal Year    Year     Fiscal Year  Fiscal Year(1)   Year
   -----------    ----     ----------- ---------------   ----

       2003        108          4            3           109
       2004        109          9            5           113
       2005        113         11            -           124
       2006        124         17            2           139
       2007        139        120           15           244

---------
(1) In fiscal year 2003, the property leases at three bookstore locations
    expired and were not renewed by us. In fiscal year 2004, five bookstores
    were closed, as either the lease expired, the contract-managed relationship
    was not renewed, or an agreement was reached with the landlord to terminate
    the lease. In fiscal year 2006, two bookstores were closed and the leases
    were not renewed. In fiscal year 2007, fifteen bookstores were closed,
    primarily as a result of either the lease expiring, the contract-managed
    relationship not being renewed, or an agreement being reached with the
    landlord terminating the lease.

    We plan to continue increasing the number of bookstores in operation. The
private bookstore expansion plan will focus on campuses where we do not already
have a strong relationship with the on-campus bookstore. In determining to
purchase an existing store or open a new one, we look at several criteria: (i) a
large enough market to justify our efforts (typically this means a campus of at
least 5,000 students); (ii) the competitive environment (how many stores
currently serve the campus); (iii) a site in close proximity to campus with
adequate parking and accessibility; (iv) the potential of the bookstore to have
a broad product mix (larger bookstores are more attractive than smaller
bookstores because a full line of general merchandise can be offered in addition
to textbooks); (v) the availability of top-quality management; and (vi) certain
other factors, including leasehold improvement opportunities and personnel
costs. We also plan to pursue opportunities to contract-manage additional
institutional stores. In determining to pursue opportunities to contract-manage
a campus bookstore, we look at: (i) the size of the market; (ii) the competitive
status of the market; (iii) the availability of top quality management; and (iv)
certain other factors, including personnel costs. As mentioned previously, on
May 1, 2006 we acquired 101 college bookstore locations, 98 of which were
contract-managed, through the acquisition of all of the outstanding stock of
CBA.

                                       8
<PAGE>

WHOLESALE PROCUREMENT AND DISTRIBUTION

    Historically, because the demand for used textbooks has consistently
exceeded supply, our sales have been primarily determined by the amount of used
textbooks that we can purchase. We believe that, on average, we are able to
fulfill approximately 20% to 25% of our demand. As a result, our success has
depended primarily on our inventory procurement, and we continue to focus our
efforts on obtaining inventory. In order to ensure our ability to both obtain
and redistribute inventory, our Textbook Division strategy has emphasized
establishing and maintaining strong customer and supplier relationships with
college bookstores (primarily, independent and institutional college bookstores)
through our employee account representatives. These 34 account representatives
(as of March 31, 2007) are responsible for procuring used textbooks from
students, marketing our services on campus, purchasing overstock textbooks from
bookstores and securing leads for sale of our systems products. We have been
able to maintain a competitive edge by providing superior service, made possible
primarily through the development and maintenance of ready access to inventory,
information and supply. Other components of the Textbook Division strategy and
its implementation include: (i) selectively paying a marginal premium relative
to competitors to entice students to sell back more books to us; (ii) gaining
access to competitive campuses (where the campus bookstore is contract-managed
by a competitor) by opening off-campus, company-owned college bookstores; (iii)
using technology to gain efficiencies and to improve customer service; (iv)
maintaining a knowledgeable and experienced sales force that is customer-service
oriented; (v) providing working capital flexibility for bookstores making
substantial purchases; and (vi) establishing long-term supply arrangements by
rewarding customers who make a long-term commitment to supplying us with a large
portion of their books.

    The two major used textbook purchasing seasons are at the end of each
academic semester, May and December. Although we make book purchases during
other periods, the inventory purchased in May, before publishers announce their
price increases in June and July, allows us to purchase inventory based on the
lower retail prices of the previous year. The combination of this purchasing
cycle and the fact that we are able to sell our inventory in relation to retail
prices for the following year permits us to realize additional gross profit. We
advance cash to our representatives during these two periods, and the
representatives in turn buy books directly from students, generally through the
on-campus bookstore.

    After we purchase the books, we arrange for shipment to our warehouse in
Nebraska via common carrier. At the warehouse, we refurbish damaged books and
categorize and shelf all other books in a timely manner, and enter them into our
on-line inventory system.

    Customers place orders by phone, mail, fax or other electronic method. Upon
receiving an order, we remove the books from available inventory and hold them
for future shipping. Customers may return books within 60 days after the start
of classes (90 days for customers participating in the exclusive supply or NBC
Partnership programs) if a written request is enclosed. Returns over the past
three fiscal years have averaged approximately 22.3% of sales and generally are
attributable to course cancellations or overstocking. The majority of returns
are textbooks that we are able to resell for the next semester.

MANAGEMENT INFORMATION SYSTEMS

    We believe that we can enhance efficiency, profitability and competitiveness
through investments in technology. Our MIS operations process order entry,
control inventory, generate purchase orders and customer invoices, generate
various sales reports, and process and retrieve textbook information. Our
bookstores operate on either IBM RS-6000's running AIX ("Unix") or Microsoft
Windows-based servers. At the center of our MIS operations are our
self-developed, proprietary software programs such as PRISM, our whole store
management system, and PC-Text, our textbook management and inventory control
system. This software is maintained and continuously enhanced by an experienced
team of development and design professionals.

                                       9
<PAGE>

   In addition, we have developed software for E-commerce capabilities. Certain
of these software products allow college bookstores to launch their own
E-commerce site and effectively compete against other online textbook sellers by
offering textbooks and both traditional and non-traditional store merchandise
online. We have also developed or licensed other software designed to enhance
our E-commerce capabilities.

    None of our proprietary software programs are copyrighted, although we do
have registered trademarks for certain names. In addition to using our software
programs for our own management and inventory control, we license the use of
certain of our software programs to bookstores. Our software programs enhance
the efficiency and cost-effectiveness of our operations, and their use by
bookstores that are our customers or suppliers tends to solidify the
relationship between us and such customers or suppliers, resulting in increased
sales or inventory for us.

    MIS operations consist of four operating units: (i) the mainframe unit,
which develops and supports all systems utilized in our warehouses and corporate
offices; (ii) a system sales unit, which markets our college store management
systems to colleges; (iii) the College Bookstore Management Systems ("CBMS"),
which develops and supports the systems that are sold to bookstores; and (iv)
CampusHub, which develops and supports software for E-commerce.

    We conduct training courses for all systems users at our headquarters in
Lincoln, Nebraska. Classes are small and provide hands on demonstrations of the
various systems. Printed reference manuals and training materials also accompany
each system. The customer support unit of CBMS is staffed with approximately 60
experienced personnel. Support is offered via web site, E-mail, and toll free
phone numbers. Support hours vary per product and time of year. After-hours
pager support is available for mission-critical systems.

CUSTOMERS

    Our college bookstores are located at college campuses of all sizes,
including some of the nation's largest campuses, such as: Miami-Dade College;
Ohio State University; Arizona State University; University of Florida; Michigan
State University; Texas A&M University; University of Central Florida;
Pennsylvania State University; University of Michigan; Florida State University;
and University of Arizona.

    We sell our Textbook and certain Complementary Services Division products
and services to college bookstores throughout the United States, Canada and
Puerto Rico. Our Textbook Division purchases from and resells used textbooks to
college bookstores at college campuses of all sizes, including many of the
nation's largest campuses, such as: University of Minnesota; University of
Texas; University of Illinois; University of Washington; Indiana University; and
San Diego State University. Our 25 largest Textbook Division customers accounted
for approximately 3.3% of our fiscal year 2007 consolidated revenues. No single
Textbook Division customer accounted for more than 1.0% of our fiscal year 2007
consolidated revenues.

    Our distance education program is, among other things, a primary supplier of
textbooks and educational material to students enrolled in on-line courses
offered through approximately 30 colleges and private high schools. Although
historically one institution accounted for a substantial portion of total
revenues in the distance education program, this institution discontinued the
use of our services for delivery of educational materials during fiscal year
2005. For the fiscal years ended March 31, 2007 and 2006, two institutions
accounted for approximately 61% and 53%, respectively, of distance education
program revenues.

    No single customer accounted for more than 10.0% of our consolidated
revenues in fiscal year 2007, 2006, or 2005.

COMPETITION

    We compete with a variety of other companies and also individuals, all of
whom seek to provided products and/or services to the college marketplace. Our
main corporate competitors are Follett Campus Resources ("Follett") and MBS
Textbook Exchange/Barnes & Noble college stores ("MBS"). MBS Textbook Exchange
and Barnes & Noble are sister companies controlled by the same shareholder.

    Our Bookstore Division competes with:

     o    Follett, MBS and a number of smaller companies for the opportunity to
          contract-manage institutional college bookstores (Follett and MBS
          contract-manage approximately 729 and 550 stores respectively),

     o    other college bookstores located at colleges and universities that we
          serve,

     o    a number of entities that sell textbooks and other merchandise
          directly to students through E-commerce bypassing the traditional
          college bookstore,

                                       10
<PAGE>

     o    student to student transactions that take place on campus and over the
          internet, and

     o    course packs and electronic media as a source of textbook information,
          such as on-line resources, E-Books, print-on-demand textbooks and
          CD-ROMs which may replace or modify the need for students to purchase
          textbooks through the traditional college bookstore.


    Our Textbook Division competes in the used textbook market, which includes
the purchase and resale of used textbooks. We compete with:

     o    college bookstores who normally repurchase books from students to be
          reused on that campus the following semester or term,

     o    student to student transactions that take place on campus and over the
          internet, and

     o    other wholesalers who purchase used textbooks from students and then
          resell them to other college bookstores.

    Our Textbook Division competes in the wholesale business with Follett and
MBS, and certain smaller regional companies including Budgetext, Texas Book
Company, Tichenor College Textbook Company, and Southeastern Book Company. We
believe that our market share of the independent and non contract-managed
institutional stores is comparable to that of Follett and MBS individually. Many
of Follett's and some of MBS's college bookstores are located on smaller
campuses. The size of the campus and their presence there have precluded us from
entering these markets, which in turn affects both our ability to buy books and
our ability to add new accounts.

    Our Complementary Services Division competes with:

     o    MBS in the sale and installation of college bookstore information
          systems

     o    MBS in the distance education textbook distribution market,

     o    college bookstores that provide their own E-commerce solution in
          competition with CampusHub,

     o    the Independent College Bookstore Association ("ICBA") in the
          centralized buying service business (participation by college
          bookstores in C2O's or ICBA's centralized buying service is voluntary,
          and college bookstores may, and some do, belong to both buying
          associations) and

     o    a variety of smaller organizations and individuals involved in these
          businesses and others like marketing services and consulting services.

GOVERNMENTAL REGULATION

    We are subject to various federal, state and local health and safety laws
and regulations. Generally, these laws establish standards for vehicle and
employee safety. These laws include the Occupational Safety and Health Act.
Future developments, such as stricter employee health and safety laws and
regulations thereunder, could affect our operations. We do not currently
anticipate that the cost of our compliance with, or of any foreseeable
liabilities under, employee health and safety laws and regulations will have a
material adverse affect on our business or financial condition.

EMPLOYEES

    As of March 31, 2007 we had a total of approximately 3,100 employees, of
which approximately 1,300 were full-time, approximately 900 were part-time and
approximately 900 were temporary. We have no unionized employees and believe
that our relationship with our employees is satisfactory.

    In view of the seasonal nature of our Textbook Division, we utilize seasonal
labor to improve operating efficiency. We employ a small number of "flex-pool"
workers who are cross-trained in a variety of warehouse functions. Temporary
employees augment the flex-pool to meet periodic labor demands.

                                       11
<PAGE>

                             ITEM 1A. RISK FACTORS.

    This Annual Report on Form 10-K contains forward-looking statements within
the meaning of the Securities Litigation Reform Act of 1995 that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors, including, but not limited to, those set forth in the following
cautionary statements and elsewhere in this Annual Report on Form 10-K.

    WE FACE COMPETITION IN OUR MARKETS. Our industry is highly competitive. A
large number of actual or potential competitors exist, some of which are larger
than us and have substantially greater resources than us. We cannot give
assurances that our business will not be adversely affected by increased
competition in the markets in which we currently operate or in markets in which
we will operate in the future, or that we will be able to improve or maintain
our profit margins. In recent years, an increasing number of institution-owned
college stores have decided to outsource or "contract-manage" the operation of
their bookstores. As of January 2006, approximately 34% of the U.S. members of
The National Association of College Stores were contract-managed. The leading
managers of these stores include two of our principal competitors in the
wholesale textbook distribution business. Contract-managed stores primarily
purchase their used textbook requirements from and sell their available supply
of used textbooks to their affiliated operations. A significant increase in the
number of contract-managed stores operated by our competitors, particularly at
large college campuses, could adversely affect our ability to acquire an
adequate supply of used textbooks.

    We are also experiencing growing competition from alternative media and
alternative sources of textbooks for students (such as websites designed to sell
textbooks, e-books and digital content, and other merchandise directly to
students; on-line resources; publishers selling direct to students;
print-on-demand textbooks; and CD-ROMs) and from the use of course packs (which
are collections of copyrighted materials and professors' original content which
are produced by college bookstores and sold to students), all of which have the
potential to reduce or replace the need for textbooks sold through college
bookstores. A substantial increase in the availability or the acceptance of
these alternatives as a source of textbooks and textbook information could
significantly reduce college students' use of college bookstores and/or the use
of traditional textbooks and thus have a material adverse effect on our business
and results of operations.

    We are experiencing growing competition from technology-enabled student to
student transactions that take place over the Internet. These transactions,
whereby a student enters into a transaction directly with another student for
the sale and purchase of a textbook, provide competition by reducing the supply
of textbooks available to us for purchase and by reducing the sale of textbooks
through college bookstores. While such transactions have occurred for many
years, prior to the Internet such transactions were limited by geography, a lack
of information related to pricing and demand, and other factors. A significant
increase in the number of these transactions could have a material adverse
effect on our business and results of operations.

    WE MAY NOT BE ABLE TO SUCCESSFULLY ACQUIRE OR CONTRACT-MANAGE ADDITIONAL
BOOKSTORES OR INTEGRATE THOSE ADDITIONAL STORES. Part of our business strategy
is to expand sales for our college bookstore operations by either acquiring
privately owned bookstores or being awarded additional contracts to manage
institutional bookstores. We cannot give assurances that we will be able to
identify additional private bookstores for acquisition or that we will be
successful in competing for contracts to manage additional institutional stores.
We also cannot give assurances that any anticipated benefits will be realized
from any of these additional bookstores. Due to the seasonal nature of business
in our bookstores, operations may be affected by the time of fiscal year when a
bookstore is acquired or contract-managed by us. The process may require
financial resources that would otherwise be available for our existing
operations. We cannot give assurances that the integration of these future
bookstores will be successful or that the anticipated strategic benefits of
these future bookstores will be realized or that they will be realized within
time frames contemplated by our management. Acquisitions and additional
contract-managed stores may involve a number of special risks, including, but
not limited to, adverse short-term effects on our reported results of
operations, diversion of management's attention, standardization of accounting
systems, dependence on retaining, hiring and training key personnel,
unanticipated problems or legal liabilities, and actions of our competitors and
customers. If we are unable to successfully integrate our future acquisitions or
contract-managed stores for these or other reasons, our results of operations
may be adversely affected.

    WE MAY NOT BE ABLE TO SUCCESSFULLY RENEW OUR CONTRACT-MANAGED BOOKSTORES AT
PROFITABLE TERMS. As we expand our operations in contract-management of
institutional bookstores, we will increasingly be competing for the renewal of
our contracts for those stores as the current contracts expire. Contracts in the
industry are typically for 3 to 5 years, with various renewal and cancellation
clauses. We cannot give assurances that we will be able to be successful in
renewing our current contracts or that those renewals will be on terms that
provide us the opportunity to improve or maintain the profitability of managing
the store. If we are unable to successfully renew our contracts on profitable
terms, our results of operations may be adversely affected.

                                       12
<PAGE>

    IF WE ARE UNABLE TO OBTAIN A SUFFICIENT SUPPLY OF USED TEXTBOOKS, OUR
BUSINESS MAY BE ADVERSELY AFFECTED. We are generally able to sell a substantial
majority of our available used textbooks and, therefore, our ability to purchase
a sufficient number of used textbooks largely determines our used textbook sales
for future periods. Successfully acquiring books requires a visible presence on
college campuses at the end of each semester, which requires hiring a
significant number of temporary personnel, and having access to sufficient funds
under our Revolving Credit Facility or other financing alternatives to purchase
the books. Textbook acquisition also depends upon college students' willingness
to sell their used textbooks at the end of each semester. The unavailability of
sufficient personnel or credit, or a shift in student preferences, could impair
our ability to acquire sufficient used textbooks to meet our sales objectives
and adversely affect our results of operations.

    OUR OPERATIONS MAY BE ADVERSELY AFFECTED IF PUBLISHERS DO NOT CONTINUE TO
INCREASE PRICES OF TEXTBOOKS ANNUALLY. We generally buy used textbooks based on
publishers' prevailing prices for new textbooks just prior to the implementation
by publishers of their annual price increases (which historically have been 4%
to 5%) and resell these textbooks shortly thereafter based upon the new higher
prices, thereby creating an immediate margin increase. Our ability to increase
our used textbook prices each fiscal year depends on annual price increases on
new textbooks implemented by publishers. The failure of publishers to continue
annual price increases on new textbooks could adversely affect our results of
operations.

    CHANGES IN PUBLISHER ACTIVITIES RELATED TO NEW EDITIONS AND MATERIALS
PACKAGED WITH NEW TEXTBOOKS COULD NEGATIVELY AFFECT OUR RESULTS OF OPERATIONS.
Publishers have historically produced new editions of textbooks every two to
four years. Changes in the business models of publishers to accelerate the new
edition cycle or to significantly increase the number of textbooks with other
materials packaged or bundled with it (which makes it more difficult to
repurchase and resell the entire package of materials) could reduce the supply
of used textbooks available to us and negatively affect our results of
operations.

    WE ARE DEPENDENT ON KEY PERSONNEL, THE LOSS OF WHOM COULD MATERIALLY
ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL PERFORMANCE. Our future success
depends to a significant extent on the efforts and abilities of our senior
management team. Our senior management team has over 80 years of cumulative
experience in the college bookstore industry. The loss of the services of any
one of these individuals could have a material adverse effect on our business,
financial condition and results of operations.

    THE SEASONALITY OF OUR WHOLESALE AND BOOKSTORE OPERATIONS COULD NEGATIVELY
AFFECT OUR RESULTS OF OPERATIONS. Our wholesale and bookstore operations
experience two distinct selling periods and our wholesale operations experience
two distinct buying periods. The peak selling periods for the wholesale
operations occur prior to the beginning of each school semester in July/August
and November/December. The buying periods for the wholesale operations occur at
the end of each school semester in May and December. The primary selling periods
for the bookstore operations are in August/September and January. In fiscal year
2007, approximately 45% of our annual revenues occurred in the second fiscal
quarter (July-September), while approximately 32% of our annual revenues
occurred in the fourth fiscal quarter (January-March). Accordingly, our working
capital requirements fluctuate throughout the fiscal year, increasing
substantially in May and December as a result of the buying periods. We fund our
working capital requirements primarily through the Revolving Credit Facility,
which historically has been repaid with cash provided from operations. A
significant reduction in sales during our peak selling periods could have a
material adverse effect on our financial condition or results of operations.

    THE INDENTURES GOVERNING THE SENIOR SUBORDINATED NOTES AND NBC'S SENIOR
DISCOUNT NOTES, AS WELL AS THE SENIOR CREDIT FACILITY, IMPOSE SIGNIFICANT
OPERATING AND FINANCIAL RESTRICTIONS, WHICH MAY PREVENT US FROM INCURRING
ADDITIONAL INDEBTEDNESS AND TAKING CERTAIN ACTIONS. The indentures governing the
Senior Subordinated Notes and NBC's Senior Discount Notes restrict our ability
to do the following: incur additional indebtedness; pay dividends or make other
restricted payments; consummate certain asset sales; create liens on assets;
enter into transactions with affiliates; make investments, loans or advances;
consolidate or merge with or into any other entity; convey, transfer or lease
all or substantially all of our assets; or change the business we conduct.

    The Senior Credit Facility prohibits us from prepaying other indebtedness.
In addition, we are required to comply with and maintain specified financial
ratios and tests, including a minimum interest coverage ratio, a maximum
leverage ratio and a minimum fixed charge coverage ratio. Our ability to meet
these financial ratios and tests can be affected by events beyond our control,
and we cannot give assurances that we will satisfy these requirements in the
future. A breach of any of these covenants could result in a default under the
Senior Credit Facility or the indentures. Upon an event of default under the
Senior Credit Facility, the lenders could elect to declare all amounts and
accrued interest outstanding under the Senior Credit Facility due and payable
and could terminate their commitments to make further extensions of credit under
the Senior Credit Facility and the holders of the Senior Subordinated Notes and
NBC's Senior Discount Notes could elect to declare all amounts under such notes
immediately due and payable. If we were unable to repay our indebtedness under
the Senior Credit Facility, the lenders could proceed against the collateral
securing the indebtedness. If the indebtedness under the Senior Credit Facility
were accelerated, we cannot give assurances that our assets would be sufficient
to repay in full such indebtedness and other indebtedness, including the Senior
Subordinated Notes and NBC's Senior Discount Notes. Substantially all of our
assets are pledged as security under the Senior Credit Facility.

                                       13
<PAGE>

    WE ARE CONTROLLED BY ONE PRINCIPAL EQUITY HOLDER, WHO HAS THE POWER TO TAKE
UNILATERAL ACTION. Weston Presidio beneficially owns approximately 83.9% of
NBC's issued and outstanding common stock (taking into account for such
percentage calculation options outstanding and options available for future
grant under the 2004 Stock Option Plan). As a result, Weston Presidio is able to
control all matters, including the election of a majority of our board of
directors, the approval of amendments to NBC's and our certificates of
incorporation and the approval of fundamental corporate transactions such as
mergers and asset sales. The interests of Weston Presidio may not in all cases
be aligned with the interests of other affected parties. In addition, Weston
Presidio may have an interest in pursuing acquisitions, divestitures and other
transactions, including selling us, that, in its judgment, could affect its
equity investment, even though such transactions might involve risks to other
affected parties.

    OUR SUBSTANTIAL LEVEL OF INDEBTEDNESS COULD LIMIT CASH FLOW AVAILABLE FOR
OUR OPERATIONS AND COULD ADVERSELY AFFECT OUR ABILITY TO SERVICE OUR DEBT OR
OBTAIN ADDITIONAL FINANCING. We have $375.6 million of outstanding indebtedness
at March 31, 2007. NBC has additional outstanding indebtedness of $69.5 million
as of March 31, 2007 under the Senior Discount Notes. The degree to which we are
leveraged could have important consequences, including the following:

o    our ability to obtain additional financing for working capital, capital
     expenditures, acquisitions, or general corporate purposes may be impaired;

o    a substantial portion of our cash flow from operations must be dedicated to
     the payment of interest on outstanding indebtedness, thereby reducing the
     funds available to us for other purposes, such as capital expenditures and
     acquisitions;

o    all of the indebtedness outstanding under the Senior Credit Facility is
     secured by substantially all of our assets, and will mature prior to the
     Senior Subordinated Notes and the Senior Discount Notes;

o    we believe we are substantially more leveraged than certain of our
     competitors, which might place us at a competitive disadvantage;

o    we may be hindered in our ability to adjust rapidly to changing market
     conditions;

o    we may be more vulnerable in the event of a downturn in general economic
     conditions or in our industry or business; and

o    our indebtedness may make it more difficult for us to satisfy our financial
     obligations.


                       ITEM 1B. UNRESOLVED STAFF COMMENTS.

    As previously noted, we are neither an accelerated filer nor a well-known
seasoned issuer, as those terms are defined by the United States Securities and
Exchange Commission. However, we are not aware of any unresolved written
comments received from the United States Securities and Exchange Commission
regarding the comment letter we received from the United States Securities and
Exchange Commission on March 30, 2007 and responded to on April 17, 2007.

                                       14
<PAGE>

                               ITEM 2. PROPERTIES.


    At March 31, 2007, our Bookstore Division locations consisted of the
following: (i) 6 owned off-campus bookstore locations, (ii) 112 leased
off-campus bookstore locations, and (iii) 126 leased on-campus
(contract-managed) bookstore locations serving university and post-graduate
educational institutions throughout the United States. These institutions served
approximately 2.1 million students. We own our two Textbook Division warehouses
(totaling 253,000 square feet) in Lincoln, Nebraska (one of which is also the
location of our headquarters). Our distance education program resides in a
leased facility with 49,500 square feet in Athens, Ohio. The lease, as amended,
expires on May 31, 2011 and has one one-year option to renew.


                           ITEM 3. LEGAL PROCEEDINGS.

    From time to time, we are subject to legal proceedings and other claims
arising in the ordinary course of our business. We believe that currently we are
not a party to any litigation the outcome of which would have a material adverse
affect on our financial condition or results of operations. We maintain
insurance coverage against claims in an amount which we believe to be adequate.


          ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    No items were submitted to a vote by our security holders during the fourth
quarter of fiscal year 2007.


                                       15
<PAGE>

                                     PART II


 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
                     ISSUER PURCHASES OF EQUITY SECURITIES.

    There were no equity securities issued by us during fiscal year 2007. There
is no established public trading market for our common stock and all of our
common stock is owned by NBC. As discussed in Item 7, MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and Item 8,
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, the payment of dividends is subject
to various restrictions under our debt instruments. No dividends were declared
on our common stock during fiscal years 2007 and 2006.

    Additional information regarding equity compensation plans can be found in
Item 12, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.


                        ITEM 6. SELECTED FINANCIAL DATA.

    The following table sets forth our selected historical consolidated
financial and other data as of and for the fiscal years ended March 31, 2007,
2006 and 2005 (successor), the one month ended March 31, 2004 (successor), the
eleven months ended February 29, 2004 (predecessor), and the fiscal year ended
March 31, 2003 (predecessor), respectively. The selected historical consolidated
financial data was derived from our audited consolidated financial statements.


                                       16
<PAGE>

    The following table should be read in conjunction with Item 7, MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and our
consolidated financial statements and the related notes thereto included in Item
8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
<TABLE>
<CAPTION>
                                                             Successor (1)                            Predecessor (1)
                                                 -------------------------------------------- -----------------------------
                                                      Fiscal Years Ended          1 Month       11 Months      Fiscal Year
                                                 ------------------------------    Ended          Ended           Ended
                                                 March 31,  March 31, March 31,   March 31,    February 29,     March 31,
                                                    2007      2006      2005        2004           2004           2003
                                                 ---------- --------- --------- ------------- -------------- --------------
                                                                           (dollars in thousands)
<S>                                              <C>        <C>       <C>           <C>           <C>            <C>
Statement of Operations Data:
  Revenues                                       $ 544,428  $420,108  $402,154      $ 13,317      $ 385,364      $ 370,510
  Costs of sales (exclusive of depreciation
  shown beow                                       332,444   250,914   240,638         7,768        231,874        224,488
                                                 ---------- --------- --------- ------------- -------------- --------------
      Gross profit                                 211,984   169,194   161,516         5,549        153,490        146,022
  Operating expenses:
    Selling, general, and administrative (2)       143,096   107,991   100,513         8,540         99,004         90,391
    Closure of California Warehouse                    774         -         -             -              -              -
    Depreciation                                     5,916     4,913     4,908           350          3,396          3,469
    Amortization                                     9,613     8,762     8,258           649          1,162            644
                                                 ---------- --------- --------- ------------- -------------- --------------
      Income (loss) from operations                 52,585    47,528    47,837        (3,990)        49,928         51,518
  Other expenses (income):
    Interest expense                                33,135    29,395    25,854         2,226         22,409         14,212
    Interest income                                 (1,643)   (1,275)     (639)          (97)          (308)          (360)
    (Gain) loss on derivative instruments              225      (525)        -             -            (57)           156
                                                 ---------- --------- --------- ------------- -------------- --------------
      Income (loss) before income taxes             20,868    19,933    22,622        (6,119)        27,884         37,510
  Income tax expense (benefit)                       8,256     7,691     9,162        (2,400)        10,949         14,802
                                                 ---------- --------- --------- ------------- -------------- --------------
      Net income (loss)                          $  12,612  $ 12,242  $ 13,460      $ (3,719)     $  16,935      $  22,708
                                                 ========== ========= ========= ============= ============== ==============
Other Data:
  EBITDA (3)                                     $  68,114  $ 61,203  $ 61,003      $ (2,991)     $  54,486      $  55,631
  Net cash flows from operating activities          27,516    22,573    16,682        (7,764)        46,913         37,332
  Net cash flows from investing activities         (32,809)  (18,122)     (748)      (29,656)        (6,452)        (5,327)
  Net cash flows from financing activities           4,893    (2,293)  (17,986)       (8,965)          (204)        (4,018)
  Capital expenditures                               6,543     7,312     7,666           720          3,965          3,708
  Business acquisition expenditures (4)             25,874    10,849    20,160         1,849          2,355          1,389

  Number of bookstores open at end of the period       244       139       124           113            112            109

Balance Sheet Data (At End of Period):
  Cash and cash equivalents                      $  32,983  $ 33,383  $ 31,224      $ 33,276      $  79,662      $  39,405
  Working capital                                  130,389   111,066   104,008       106,259        132,729         82,959
  Total assets                                     695,488   645,346   627,239       646,265        252,449        205,485
  Total debt, including current maturities         375,587   354,309   356,402       373,179        187,782        143,367

</TABLE>
(1)  On March 4, 2004, Weston Presidio acquired the controlling interest in NBC,
     and hence in us, through a series of steps which resulted in Weston
     Presidio owning a substantial majority of NBC's common stock. For ease of
     presentation, financial information presented in this table reflects this
     transaction as if it had occurred on March 1, 2004. We have determined that
     no material transactions occurred during the period from March 1, 2004
     through March 4, 2004. As a result of the March 4, 2004 Transaction,
     financial information for periods ending prior to March 1, 2004 is
     presented as the "Predecessor," while financial information for periods
     ending after March 1, 2004 is presented as the "Successor."

     As a result of the March 4, 2004 Transaction, which included substantial
     increases in long-term indebtedness through the issuance of new
     indebtedness and amortizable identifiable intangibles through the
     application of purchase accounting, the results of our operations beginning
     with the one month ended March 31, 2004 include higher interest and
     amortization expense. Additionally, the results of our operations for the
     eleven months ended February 29, 2004 contain non-recurring charges
     associated with (a) the write-off of $6.7 million of debt issue costs in
     conjunction with the March 4, 2004 Transaction and a debt refinancing which
     occurred on December 10, 2003; (b) call premiums totaling $3.2 million
     related to the March 4, 2004 Transaction; and (c) share-based compensation
     totaling $7.3 million associated with the March 4, 2004 Transaction and the
     December 10, 2003 debt refinancing.

(2)  Includes share-based compensation of $997 and $7,264 for the fiscal year
     ended March 31, 2007 and the 11 months ended February 29, 2004,
     respectively.

                                       17
<PAGE>

(3)  EBITDA is defined as earnings before interest, taxes, depreciation, and
     amortization. As we are highly-leveraged and as our equity is not
     publicly-traded, management believes that a non-GAAP financial measure,
     EBITDA, is useful in measuring our liquidity and provides additional
     information for determining our ability to meet debt service requirements.
     The Senior Subordinated Notes and Senior Credit Facility also utilize
     EBITDA, as defined in those agreements, for certain financial covenants.
     EBITDA does not represent and should not be considered as an alternative to
     net cash flows from operating activities as determined by accounting
     principles generally accepted in the United States of America ("GAAP"), and
     EBITDA does not necessarily indicate whether cash flows will be sufficient
     for cash requirements. Items excluded from EBITDA, such as interest, taxes,
     depreciation and amortization, are significant components in understanding
     and assessing our financial performance. EBITDA measures presented may not
     be comparable to similarly titled measures presented by other registrants.

     The following presentation reconciles EBITDA with net cash flows from
     operating activities as presented in the Consolidated Statements of Cash
     Flows included in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
<TABLE>
<CAPTION>

                                                                  Successor (1)                       Predecessor (1)
                                                   ------------------------------------------- ---------------------------
                                                       Fiscal Years Ended          1 Month      11 Months    Fiscal Year
                                                   ------------------------------   Ended         Ended         Ended
                                                   March 31,  March 31, March 31,  March 31,   February 29,   March 31,
                                                     2007       2006      2005       2004          2004          2003
                                                   ---------- --------- --------- ------------ ------------- -------------
                                                                           (dollars in thousands)
<S>                                                 <C>       <C>       <C>          <C>           <C>           <C>
EBITDA                                              $ 68,114  $ 61,203  $ 61,003     $ (2,991)     $ 54,486      $ 55,631

Adjustments to reconcile EBITDA to net
cash flows from operating activities:

  Share-based compensation                               997         -         -            -             -             -
  Interest income                                      1,644     1,275       639           97           308           360
  Provision for losses on receivables                    834       231       316          218            66           452
  Cash paid for interest                             (31,389)  (27,875)  (25,796)      (4,174)      (11,956)      (13,549)
  Cash paid for income taxes                          (6,551)   (9,589)   (4,946)         (10)       (6,467)      (14,533)
  (Gain) Loss on disposal of assets                       (1)       90        68           14           408            36
  Changes in operating assets and
  liabilities, net of effect of acquisitions (5)      (6,132)   (2,762)  (14,602)        (918)       10,068         8,935
                                                   ---------- --------- --------- ------------ ------------- -------------
Net Cash Flows from Operating Activities            $ 27,516  $ 22,573  $ 16,682     $ (7,764)     $ 46,913      $ 37,332
                                                   ========== ========= ========= ============ ============= =============
</TABLE>

(4)  Business acquisition expenditures represent established businesses
     purchased by us.

(5)  Changes in operating assets and liabilities, net of effect of acquisitions
     includes the changes in the balances of receivables, inventories, prepaid
     expenses and other current assets, other assets, accounts payable, accrued
     employee compensation and benefits, accrued incentives, accrued expenses,
     deferred revenue, and other long-term liabilities.

                                       18
<PAGE>

     ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS.

    The following discussions should be read in conjunction with our
consolidated financial statements and the related notes thereto included in Item
8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, and other information in this
Annual Report on Form 10-K.

                                EXECUTIVE SUMMARY

OVERVIEW

    ACQUISITIONS. On May 1, 2006, we acquired 101 college bookstore locations,
98 of which were contract-managed, through the acquisition of all of the
outstanding stock of CBA. CBA began providing contract-management services to
small to medium-sized colleges and universities nationwide in 1984. In addition
to the acquired revenue and EBITDA, we believe this acquisition will enhance our
competitive position for future contract-management opportunities. Certain
amendments were made to the Credit Agreement to allow for this acquisition,
including adding an incremental $24.0 million of borrowings under the Term Loan,
increasing amounts available under the Revolving Credit Facility by $15.0
million, and amending certain restrictions and financial covenants. The
modifications to the Credit Agreement also resulted in the payment of $0.8
million in costs associated with such modifications, which were capitalized as
debt issue costs to be amortized to interest expense over the remaining life of
the debt instruments. As announced in December 2006, our contract-management
solution (which includes the combined NBC and CBA contract-managed bookstore
locations) are now doing business as Validis Resources, providing a unified
image and brand for such services.

    Additionally, we completed the purchase, initiated the contract-management,
or established the start-up of 19 bookstore locations during the fiscal year
ended March 31, 2007. The property leases or contract-management agreements at
15 bookstore locations were not renewed during the fiscal year ended March 31,
2007. We believe that there continue to be attractive opportunities for us to
expand our chain of bookstores across the country; and, as a result, certain
amendments were made to the Credit Agreement on March 30, 2007 to, among other
things, increase amounts available under the Revolving Credit Facility by $20.0
million. The modifications to the Credit Agreement resulted in the payment of
$0.2 million in costs associated with such modifications, which were capitalized
as debt issue costs to be amortized to interest expense over the remaining life
of the Revolving Credit Facility.

    REVENUE RESULTS. Consolidated revenues for the fiscal year ended March 31,
2007 increased $124.3 million, or 29.6% from the fiscal year ended March 31,
2006. This increase is primarily attributable to growth in the Bookstore
Division, which realized revenue growth through the acquisition of CBA, other
transactions involving new store locations, and same store sales growth of 3.7%.
The Complementary Services Division also experienced growth during the fiscal
year ended March 31, 2007, primarily as a result of increased revenues from our
systems divisions. Finally, revenues increased in the Textbook Division
primarily as a result of an increase in the average price per book sold.

    EBITDA RESULTS. Consolidated EBITDA for the fiscal year ended March 31, 2007
increased $6.9 million from the fiscal year ended March 31, 2006, with all three
operating segments showing improved results. The EBITDA increase is primarily
attributable to growth in the Bookstore Division due to the acquisition activity
noted above and growth in same store sales. The Complementary Services Division
and the Textbook Division also showed improved EBITDA results, with the
Complementary Services Division increase attributable primarily to increased
EBITDA in the systems and distance education divisions. EBITDA is considered a
non-GAAP financial measure by the SEC, and therefore you should refer to the
more detailed explanation of that measure that is provided later in this
section.

    CALIFORNIA WAREHOUSE CLOSURE. On August 9, 2006, we announced plans to close
our warehouse facility located in Cypress, California and eliminate 33
positions. The facility closed effective October 27, 2006, and these positions
were eliminated at that time. A group of 17 other employees were offered, and 16
employees accepted, positions to remain with us as Account Service
Representatives, continuing to service our customers. As a result of these
plans, we incurred $0.8 million of one-time employee termination benefits,
contract termination expenses, and other associated costs during the fiscal year
ended March 31, 2007. We expect to save approximately $0.8 to $1.2 million
annually in operating costs after these plans are fully implemented.

                                       19
<PAGE>

CHALLENGES AND EXPECTATIONS

    We expect that we will continue to face challenges and opportunities similar
to those which we have faced in the recent past. We have experienced, and
continue to experience, competition for the supply of used textbooks from other
textbook wholesalers and from student to student transactions, competition from
alternative media and alternative sources of textbooks for students, competition
for contract-management opportunities and other challenges. We also believe that
we will continue to face challenges and opportunities related to acquisitions.
Despite these challenges, we expect that we will continue to grow revenue and
EBITDA on a consolidated basis in fiscal year 2008. We also expect that our
capital expenditures will remain modest for a company of our size.

                                       20
<PAGE>

                 FISCAL YEAR ENDED MARCH 31, 2007 COMPARED WITH
                       FISCAL YEAR ENDED MARCH 31, 2006.

    REVENUES. Revenues for the fiscal years ended March 31, 2007 and 2006 and
the corresponding change in revenues were as follows:

                        Fiscal Year    Fiscal Year              Change
                            Ended         Ended       -------------------------
                       March 31, 2007  March 31, 2006      Amount    Percentage
                      --------------- --------------- -------------- ----------
Bookstore Division     $ 418,476,613   $ 292,110,080  $ 126,366,533     43.3 %
Textbook Division        135,798,392     132,555,940      3,242,452      2.4 %
Complementary
Services Division         32,215,306      26,681,864      5,533,442     20.7 %
Intercompany
eliminations             (42,062,347)    (31,239,985)   (10,822,362)    34.6 %
                      --------------- --------------- -------------- ----------
                       $ 544,427,964   $ 420,107,899  $ 124,320,065     29.6 %
                      =============== =============== ============== ==========

    The increase in Bookstore Division revenues was primarily attributable to
the addition of 137 bookstore locations through acquisitions or start-ups since
April 1, 2005. The new bookstores provided an additional $121.1 million of
revenue for the fiscal year ended March 31, 2007. Same-store sales for the
fiscal year ended March 31, 2007 increased $9.9 million, or 3.7%, from the
fiscal year ended March 31, 2006, primarily due to increased clothing and
insignia wear and textbook revenues. The Company defines same-store sales for
the fiscal year ended March 31, 2007 as sales from any store, even if expanded
or relocated, that has been operated by the Company since the start of fiscal
year 2006. Finally, revenues declined $4.6 million as a result of certain store
closings since April 1, 2005.

    For the fiscal year ended March 31, 2007, Textbook Division revenues were up
2.4% compared to the fiscal year ended March 31, 2006 due to a 5.1% increase in
the average price per book sold, which was partially offset by a 1.7% decrease
in units sold and an increase in sales returns. Complementary Services Division
revenues increased primarily due to a $3.7 million increase in revenues in our
systems divisions. Primarily as a result of our significant growth in the
Bookstore Division, intercompany revenues and the corresponding intercompany
eliminations for the fiscal year ended March 31, 2007 increased $9.1 million and
$1.8 million in the Textbook and Complementary Services Divisions, respectively,
from the fiscal year ended March 31, 2006. Of the $9.1 million increase in
Textbook Division intercompany revenues, $2.3 million effectively represents a
shift from external customer revenues due to the acquisition of CBA.

    GROSS PROFIT. Gross profit for the fiscal year ended March 31, 2007
increased $42.8 million, or 25.3%, to $212.0 million from $169.2 million for the
fiscal year ended March 31, 2006. The increase in gross profit was primarily
attributable to the increase in revenues, as the consolidated gross margin
percentage declined to 38.9% for the fiscal year ended March 31, 2007 from 40.3%
for the fiscal year ended March 31, 2006. The decrease in consolidated gross
margin percentage was expected and is primarily attributable to the shift in
revenue mix, with lower-margin Bookstore Division revenues comprising 76.6% and
69.2% of consolidated revenues for the fiscal years ended March 31, 2007 and
2006, respectively. Additionally, CBA margins are lower than margins for our
off-campus bookstore locations due in part to CBA revenues being more
heavily-weighted toward lower margin new textbooks.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the fiscal year ended March 31, 2007 increased $35.1
million, or 32.5% to $143.1 million from $108.0 million for the fiscal year
ended March 31, 2006. Selling, general and administrative expenses as a
percentage of revenues were 26.3% and 25.7% for the fiscal years ended March 31,
2007 and 2006, respectively. The increase in selling, general and administrative
expenses, which includes a $16.8 million increase in personnel costs (including
share-based compensation of $1.0 million attributable to the 4,200 shares of NBC
Holdings Corp. restricted stock issued on March 31, 2006) and a $9.4 million
increase in rent, is primarily attributable to our continued growth in the
Bookstore Division with the addition of 137 bookstore locations through
acquisitions or start-ups since April 1, 2005.

    CLOSURE OF CALIFORNIA WAREHOUSE EXPENSES. Closure of California warehouse
expenses recognized during the fiscal year ended March 31, 2007 are attributable
to one-time termination benefits, costs to terminate contracts, and costs of
consolidation/relocation associated with the October 27, 2006 closure of our
California warehouse facility, which was announced on August 9, 2006.

                                       21
<PAGE>

    EARNINGS (LOSS) BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION
(EBITDA). EBITDA for the fiscal years ended March 31, 2007 and 2006 and the
corresponding change in EBITDA were as follows:

                       Fiscal Year     Fiscal Year             Change
                          Ended          Ended        ------------------------
                     March 31, 2007   March 31, 2006      Amount    Percentage
                     --------------- --------------- ------------- -----------
Bookstore Division     $ 44,511,202     $ 36,056,380  $ 8,454,822     23.4 %
Textbook Division        32,210,010       31,938,743      271,267      0.8 %
Complementary
Services Division         2,716,144        1,220,529    1,495,615    122.5 %
Corporate
administration          (11,323,483)      (8,012,619)  (3,310,864)    41.3 %
                     --------------- ---------------- ------------ -----------
                       $ 68,113,873     $ 61,203,033  $ 6,910,840     11.3 %
                     =============== ================ ============ ===========

    The increase in Bookstore Division EBITDA was primarily due to the
acquisition activity noted above and growth in same store sales. The small
increase in Textbook Division EBITDA was primarily due to the increase in
revenues and relatively stable selling, general and administrative expenses,
despite the $0.8 million of costs incurred related to the closure of its
California warehouse. The increase in Complementary Services Division EBITDA is
attributable to improved results in almost all of its business activities,
particularly the systems and distance education divisions, as revenues and gross
margin percentage increased; and, although selling, general and administrative
expenses increased as well, such expenses were down as a percentage of revenues.
Corporate administration costs increased primarily as a result of $1.0 million
in share-based compensation associated with the NBC Holdings Corp. restricted
stock issued on March 31, 2006, $0.9 million in corporate costs related to the
acquisition of CBA, and a $0.5 million increase in incentive compensation costs
related to the increase in EBITDA.

    EBITDA is defined as earnings before interest, taxes, depreciation, and
amortization. As we are highly-leveraged and as our equity is not
publicly-traded, management believes that a non-GAAP financial measure, EBITDA,
is useful in measuring our liquidity and provides additional information for
determining our ability to meet debt service requirements. The Senior
Subordinated Notes and Senior Credit Facility also utilize EBITDA, as defined in
those agreements, for certain financial covenants. EBITDA does not represent and
should not be considered as an alternative to net cash flows from operating
activities as determined by GAAP, and EBITDA does not necessarily indicate
whether cash flows will be sufficient for cash requirements. Items excluded from
EBITDA, such as interest, taxes, depreciation and amortization, are significant
components in understanding and assessing our financial performance. EBITDA
measures presented may not be comparable to similarly titled measures presented
by other registrants.

                                       22
<PAGE>

    The following presentation reconciles EBITDA with net cash flows from
operating activities and also sets forth net cash flows from investing and
financing activities as presented in the Consolidated Statements of Cash Flows
included in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

                                            Fiscal Year Ended  Fiscal Year Ended
                                              March 31, 2007    March 31, 2006
                                            -----------------  -----------------

EBITDA                                         $  68,113,873    $   61,203,033

Adjustments to reconcile EBITDA to net cash
flows from operating activities:

  Share-based compensation                           996,957                 -
  Interest income                                  1,643,598         1,274,836
  Provision for losses on receivables                834,442           231,497
  Cash paid for interest                         (31,388,513)      (27,874,705)
  Cash paid for income taxes                      (6,551,344)       (9,589,439)
  (Gain) Loss on disposal of assets                     (575)           90,263
  Changes in operating assets and
  liabilities, net of effect of
  acquisitions (1)                                (6,132,260)       (2,762,253)
                                            -----------------   ----------------
Net Cash Flows from Operating Activities       $  27,516,178     $  22,573,232
                                            =================   ================
Net Cash Flows from Investing Activities       $ (32,808,754)    $ (18,122,174)
                                            =================   ================
Net Cash Flows from Financing Activities       $   4,892,730     $  (2,292,679)
                                            =================   ================

        (1) Changes in operating assets and liabilities, net of effect of
        acquisitions, includes the changes in the balances of receivables,
        inventories, prepaid expenses and other current assets, other assets,
        accounts payable, accrued employee compensation and benefits, accrued
        incentives, accrued expenses, deferred revenue, and other long-term
        liabilities.

    DEPRECIATION EXPENSE. Depreciation expense for the fiscal year ended March
31, 2007 increased $1.0 million, or 20.4%, to $5.9 million from $4.9 million for
the fiscal year ended March 31, 2006, due primarily to depreciation attributable
to CBA of $0.6 million.

    AMORTIZATION EXPENSE. Amortization expense for the fiscal year ended March
31, 2007 increased $0.8 million, or 9.7%, to $9.6 million from $8.8 million for
the fiscal year ended March 31, 2006, due primarily to amortization attributable
to CBA of $0.4 million, as well as amortization of non-compete agreements and
contract-managed acquisition costs associated with bookstore acquisitions
occurring since April 1, 2005.

    INTEREST EXPENSE, NET. Interest expense, net for the fiscal year ended March
31, 2007 increased $4.1 million, or 14.9%, to $31.7 million from $27.6 million
for the fiscal year ended March 31, 2006, due primarily to an increase in
borrowings under the Term Loan and Revolving Credit Facility associated with the
CBA acquisition, an approximate 70 basis point increase in the average interest
rate on the Term Loan, and a $0.8 million change in the impact of accounting for
the portion of the interest rate swap agreement not qualifying for hedge
accounting.

    INCOME TAXES. Income tax expense for the fiscal year ended March 31, 2007
increased $0.6 million to $8.3 million from $7.7 million for the fiscal year
ended March 31, 2006. Our effective tax rate for the fiscal years ended March
31, 2007 and 2006 was 39.6% and 38.6%, respectively. Our effective tax rate
differs from the statutory tax rate primarily as a result of state income taxes.

                                       23
<PAGE>

                 FISCAL YEAR ENDED MARCH 31, 2006 COMPARED WITH
                       FISCAL YEAR ENDED MARCH 31, 2005.

    REVENUES. Revenues for the fiscal years ended March 31, 2006 and 2005 and
the corresponding change in revenues were as follows:

                      Fiscal Year      Fiscal Year              Change
                         Ended             Ended      ------------------------
                     March 31, 2006    March 31, 2005     Amount    Percentage
                    ---------------- ---------------- ------------- ----------
Bookstore Division    $ 292,110,080   $ 263,667,751   $ 28,442,329     10.8 %
Textbook Division       132,555,940     133,938,475     (1,382,535)    (1.0)%
Complementary
Services Division        26,681,864      33,767,440     (7,085,576)   (21.0)%
Intercompany
eliminations            (31,239,985)    (29,219,326)    (2,020,659)     6.9 %
                    ---------------- ---------------- -------------- ----------
                      $ 420,107,899   $ 402,154,340   $ 17,953,559      4.5 %
                    ================ ================ ============== ==========

    The increase in Bookstore Division revenues was attributable to the addition
of acquired bookstores (defined by us as stores acquired since April 1, 2004).
The new bookstores provided an additional $28.4 million of revenue in the fiscal
year ended March 31, 2006. The Company defines same store sales for fiscal year
2006 as sales from any store, even if expanded or relocated, that has a full
twelve months of sales in both fiscal year 2006 and fiscal year 2005. Same store
sales were unchanged from the prior fiscal year with relatively small changes in
all significant revenue categories, including textbooks and clothing and
insignia wear. The decrease in Textbook Division revenues was due primarily to
an increase in sales returns along with a 1.8% decrease in units sold, which
were partially offset by a 3.7% increase in the average price per book sold. We
believe that unit sales are down for the fiscal year primarily due to a decrease
in the number of units purchased in the December of 2004 and May of 2005 student
book buys, which supplied the peak selling periods in fiscal year 2006.
Complementary Services Division revenues decreased primarily due to the decision
by the distance education program's largest customer to gradually discontinue
the use of our services for delivery of education materials. Revenues from that
customer program declined $6.0 million, while overall revenues from the distance
education program declined $8.5 million. The decrease in distance education
program revenues was partially offset by an increase of $1.4 million in revenues
in our systems and consulting services businesses. Corresponding to the overall
growth in the number of company owned college bookstores, our intercompany
transactions also increased which reduces consolidated revenues.

    GROSS PROFIT. Gross profit for the fiscal year ended March 31, 2006
increased $7.7 million, or 4.8%, to $169.2 million from $161.5 million for the
fiscal year ended March 31, 2005. This increase was primarily due to higher
revenues, along with a slightly higher gross margin percent. Gross margin
percent was 40.3% for the fiscal year ended March 31, 2006 as compared to 40.2%
for the fiscal year ended March 31, 2005, as a slight decline in the Bookstore
Division was offset by small increases in the Textbook and Complementary
Services Divisions.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the fiscal year ended March 31, 2006 increased $7.5
million, or 7.4%, to $108.0 million from $100.5 million for the fiscal year
ended March 31, 2005. Selling, general and administrative expenses as a
percentage of revenues were 25.7% and 25.0% for the fiscal years ended March 31,
2006 and 2005, respectively. The increase in selling, general and administrative
expenses is primarily attributable to our continued growth which prompted an
increase of $3.4 million in personnel costs, $1.4 million in advertising
expense, and $2.0 million in rent.

                                       24
<PAGE>

    EARNINGS (LOSS) BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION
(EBITDA). EBITDA for the fiscal years ended March 31, 2006 and 2005 and the
corresponding change in EBITDA were as follows:

                       Fiscal Year     Fiscal Year            Change
                          Ended           Ended       ------------------------
                     March 31, 2006   March 31, 2005      Amount    Percentage
                    ---------------- ---------------- ------------- ----------
Bookstore Division     $ 36,056,380     $ 34,607,848   $ 1,448,532      4.2 %
Textbook Division        31,938,743       32,181,393      (242,650)    (0.8)%
Complementary
Services Division         1,220,529        1,805,367      (584,838)   (32.4)%
Corporate
administration           (8,012,619)      (7,591,429)     (421,190)     5.5 %
                    ---------------- ---------------- ------------- ----------
                       $ 61,203,033     $ 61,003,179   $   199,854      0.3 %
                    ================ ================ ============= ==========

    Bookstore Division EBITDA improved primarily as a result of the
aforementioned increase in revenues, offset in part by a slight decline in gross
margin percentage and a slight increase in selling, general and administrative
expenses as a percentage of revenues. The decrease in EBITDA in the Textbook
Division is primarily attributable to the decline in revenues and a slight
increase in selling, general and administrative expenses as a percentage of
revenues, offset in part by a slight increase in gross margin percentage.
Complementary Services Division EBITDA decreased primarily due to the reduced
revenues in the distance education program, resulting in an EBITDA decline in
that division of $0.8 million, which was partially offset by a $0.4 million
improvement in EBITDA results in the systems business. Corporate Administration
EBITDA decreased by $0.4 million, primarily as a result of the bonus to be paid
to Restricted Stock Plan participants as reimbursement for federal, state and
local taxes related to the March 31, 2006 issuance of 4,200 shares of NBC
Holdings Corp. capital stock under the Restricted Stock Plan and this cash
bonus.

    EBITDA is defined as earnings before interest, taxes, depreciation, and
amortization. As we are highly-leveraged and as our equity is not
publicly-traded, management believes that a non-GAAP financial measure, EBITDA,
is useful in measuring our liquidity and provides additional information for
determining our ability to meet debt service requirements. The Senior
Subordinated Notes and Senior Credit Facility also utilize EBITDA, as defined in
those agreements, for certain financial covenants. EBITDA does not represent and
should not be considered as an alternative to net cash flows from operating
activities as determined by GAAP, and EBITDA does not necessarily indicate
whether cash flows will be sufficient for cash requirements. Items excluded from
EBITDA, such as interest, taxes, depreciation and amortization, are significant
components in understanding and assessing our financial performance. EBITDA
measures presented may not be comparable to similarly titled measures presented
by other registrants.

                                       25
<PAGE>

    The following presentation reconciles EBITDA with net cash flows from
operating activities and also sets forth net cash flows from investing and
financing activities as presented in the Consolidated Statements of Cash Flows
included in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:


                                            Fiscal Year Ended  Fiscal Year Ended
                                             March 31, 2006     March 31, 2005
                                            ------------------ -----------------
EBITDA                                          $  61,203,033     $  61,003,179

Adjustments to reconcile EBITDA to net
cash flows from operating activities:

Interest income                                     1,274,836           638,935
Provision for losses on receivables                   231,497           315,958
Cash paid for interest                            (27,874,705)      (25,796,444)
Cash paid for income taxes                         (9,589,439)       (4,946,343)
Loss on disposal of assets                             90,263            68,065
Changes in operating assets and liabilities,
net of effect of acquisitions (1)                  (2,762,253)      (14,601,160)
                                            ------------------ -----------------
Net Cash Flows from Operating Activities        $  22,573,232     $  16,682,190
                                            ================== =================
Net Cash Flows from Investing Activities        $ (18,122,174)    $    (747,555)
                                            ================== =================
Net Cash Flows from Financing Activities        $  (2,292,679)    $ (17,986,473)
                                            ================== =================

        (1) Changes in operating assets and liabilities, net of effect of
        acquisitions, includes the changes in the balances of receivables,
        inventories, prepaid expenses and other current assets, other assets,
        accounts payable, accrued employee compensation and benefits, accrued
        incentives, accrued expenses, deferred revenue, and other long-term
        liabilities.

    AMORTIZATION EXPENSE. Amortization expense for the fiscal year ended March
31, 2006 increased $0.5 million, or 6.1%, to $8.8 million from $8.3 million for
the fiscal year ended March 31, 2005, primarily due to amortization on
non-compete agreements arising from acquisitions occurring in fiscal years 2005
and 2006.

    INTEREST EXPENSE, NET. Interest expense, net for the fiscal year ended March
31, 2006 increased $2.4 million, or 9.4%, to $27.6 million from $25.2 million
for the fiscal year ended March 31, 2005, primarily due to an approximate 2.0%
increase in the average interest rate on the Term Loan, offset by higher
interest income and a $0.5 million gain on the interest rate swap agreement.

    INCOME TAXES. Income tax expense for the fiscal year ended March 31, 2006
decreased $1.5 million, or 16.1%, to $7.7 million from $9.2 million for the
fiscal year ended March 31, 2005. Our effective tax rate was 38.6% and 40.5% for
the fiscal years ended March 31, 2006 and 2005, respectively. Our effective tax
rate differs from the statutory tax rate primarily as a result of state income
taxes. Effective state income tax rates were lower in fiscal year 2006, in part
due to state income tax savings resulting from the separate incorporation of NBC
Textbooks LLC on January 1, 2005.

                                       26
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

    Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting period. On an
on-going basis, we evaluate our estimates and judgments, including those related
to returns, bad debts, inventory valuation and obsolescence, intangible assets,
rebate programs, income taxes, and contingencies and litigation. We base our
estimates and judgments on historical experience and on various other factors
that management believes to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions. We
believe the following critical accounting policies, among others, affect our
more significant judgments and estimates used in the preparation of our
consolidated financial statements:

    REVENUE RECOGNITION. We recognize revenue from Textbook Division sales at
the time of shipment. We have established a program which, under certain
conditions, enables our customers to return textbooks. We record reductions to
revenue and costs of sales for the estimated impact of textbooks with return
privileges which have yet to be returned to the Textbook Division. Additional
reductions to revenue and costs of sales may be required if the actual rate of
returns exceeds the estimated rate of returns. The estimated rate of returns is
determined utilizing actual historical return experience.

    BAD DEBTS. We maintain allowances for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. In
determining the adequacy of the allowance, we analyze the aging of the
receivable, the customer's financial position, historical collection experience,
and other economic and industry factors. If the financial condition of our
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.

    INVENTORY VALUATION. Our Bookstore Division values new textbook and
non-textbook inventories at the lower of cost or market using the retail
inventory method. Under the retail inventory method, the valuation of
inventories at cost and the resulting gross margins are calculated by applying a
calculated cost-to-retail ratio to the retail value of inventories. The retail
inventory method is an averaging method that has been widely used in the retail
industry due to its practicality. Inherent in the retail inventory method
calculation are certain significant management judgments and estimates which
impact the ending inventory valuation at cost as well as the resulting gross
margins. Changes in the fact patterns underlying such management judgments and
estimates could ultimately result in adjusted inventory costs.

    INVENTORY OBSOLESCENCE. We account for inventory obsolescence based upon
assumptions about future demand and market conditions. If actual future demand
or market conditions are less favorable than those projected by us, inventory
write-downs may be required. In determining inventory adjustments, we consider
amounts of inventory on hand, projected demand, new editions, and industry
factors.

    GOODWILL AND INTANGIBLE ASSETS. We evaluate the impairment of the carrying
value of our goodwill and identifiable intangibles in accordance with applicable
accounting standards, including Statements of Financial Accounting Standards No.
86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED, OR
OTHERWISE MARKETED; No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS; and No. 144,
IMPAIRMENT OF LONG-LIVED ASSETS. In accordance with such standards, we evaluate
impairment on goodwill and certain identifiable intangibles annually and
evaluate impairment on all intangibles whenever events or changes in
circumstances indicate that the carrying amounts of such assets may not be
recoverable. Our evaluation of impairment is based on a combination of our
projection of estimated future cash flows and other valuation methodologies. We
are required to make certain assumptions and estimates regarding the fair value
of intangible assets when assessing such assets for impairment. We are also
required to make certain assumptions and estimates when assigning an initial
value to covenants not to compete arising from bookstore acquisitions. Changes
in the fact patterns underlying such assumptions and estimates could ultimately
result in the recognition of impairment losses on intangible assets. Our
acquisitions of college bookstores result in the application of purchase
accounting to our balance sheet as of the transaction date. In certain
circumstances, Company management performs valuations where appropriate to
determine the fair value of assets acquired and liabilities assumed. The
goodwill in such transactions is determined by calculating the difference
between the purchase price and the fair value of net assets acquired.

                                       27
<PAGE>

    INCOME TAXES. We account for income taxes by recording taxes payable or
refundable for the current fiscal year and deferred tax assets and liabilities
for future tax consequences of events that have been recognized in our
consolidated financial statements or the consolidated income tax returns.
Significant judgment is required in determining the provision for income taxes
and related accruals, deferred tax assets, and deferred tax liabilities. In the
ordinary course of business, there are transactions and calculations where the
ultimate tax outcome is uncertain. Additionally, the consolidated income tax
returns are subject to audit by various tax authorities. Although we believe
that our estimates are reasonable, actual results could differ from these
estimates resulting in a final tax outcome that may be materially different from
that which is reflected in the consolidated financial statements.

    DERIVATIVE FINANCIAL INSTRUMENTS. We utilize derivative financial
instruments, from time to time, to manage the risk that changes in interest
rates will affect the amount of our future interest payments on our variable
rate debt. If written documentation designating the derivative financial
instrument as a hedge is not in place at inception of the instrument or if the
critical terms of the derivative financial instrument do not match the critical
terms of the variable rate debt being hedged, we would be required to recognize
changes in the fair value of the portion of the derivative financial instrument
not qualifying for hedge accounting immediately in earnings.

LIQUIDITY AND CAPITAL RESOURCES

FINANCING ACTIVITIES

    Effective March 30, 2007, certain amendments were made to the Credit
Agreement to, among other things, increase the Revolving Credit Facility from
$65.0 million to $85.0 million and modify the definition of EBITDA to exclude
certain one time charges recorded in fiscal year 2007 for purposes of the debt
covenant calculations. The additional availability of borrowings under the
Revolving Credit Facility will allow us to continue to pursue opportunities to
expand our chain of bookstores across the country. The modifications to the
Credit Agreement resulted in the payment of $0.2 million in costs associated
with such modifications, which were capitalized as debt issue costs to be
amortized to interest expense over the remaining life of the Revolving Credit
Facility.

    Effective April 26, 2006, certain amendments were made to the Credit
Agreement to allow for the acquisition of CBA, including adding an incremental
$24.0 million of borrowings under the Term Loan, increasing amounts available
under the Revolving Credit Facility from $50.0 million to $65.0 million, and
amending certain restrictions and financial covenants. The additional Term Loan
borrowings were utilized to help finance the purchase of all of CBA's
outstanding stock, repay CBA's outstanding long-term bank indebtedness, and
provide funding for the payment of transaction costs and other liabilities
associated with the acquisition. CBA's long-term bank indebtedness, revolving
credit facility balance, and the corresponding accrued interest repaid on May 1,
2006 totaled $14.4 million. The modifications to the Credit Agreement resulted
in the payment of $0.8 million in costs associated with such modifications,
which were capitalized as debt issue costs to be amortized to interest expense
over the remaining life of the debt instruments.

    Effective August 1, 2005, the Credit Agreement was amended to provide for,
among other things, (i) a twelve-month deferral of a scheduled increase in the
minimum consolidated interest coverage ratio covenant and (ii) a change in the
definition of consolidated EBITDA to exclude up to $4.0 million in charges to be
incurred under the NBC Holdings Corp. 2005 Restricted Stock Plan. Debt issue
costs incurred in conjunction with this amendment of $0.2 million were
capitalized. Additional debt issue costs of $0.4 million in fiscal year 2005
pertained to an October 20, 2004 amendment to the Credit Agreement (to provide,
among other things, for a temporary $10.0 million incremental revolving credit
facility through June 30, 2005) and remaining financing costs associated with
the March 4, 2004 Transaction. We funded the portion of the remaining financing
costs associated with the March 4, 2004 Transaction relating to NBC's Senior
Discount Notes through a $0.1 million dividend payment to NBC.

    In November 2006, two bookstore locations were acquired, the property leases
for which have been classified as capital leases. These leases expire in fiscal
year 2012 and contain multiple options to renew every five years. The capital
lease obligations and corresponding property recorded at inception of the leases
totaled $1.1 million.

    Our primary liquidity requirements are for debt service under the Senior
Credit Facility, the Senior Subordinated Notes and other outstanding
indebtedness, for working capital, for capital expenditures and for certain
acquisitions. We have historically funded these requirements primarily through
internally generated cash flows and funds borrowed under our Revolving Credit
Facility. At March 31, 2007, our total indebtedness was approximately $375.6
million, consisting of a $197.0 million Term Loan, $175.0 million of Senior
Subordinated Notes, and $3.6 million of other indebtedness, including capital
lease obligations. To provide additional financing to fund the March 4, 2004
Transaction, NBC issued Senior Discount Notes, the balance of which at March 31,
2007 was $69.5 million (face value of $77.0 million less $7.5 million discount).

                                       28
<PAGE>

    Principal and interest payments under the Senior Credit Facility, the Senior
Subordinated Notes, and NBC's Senior Discount Notes represent significant
liquidity requirements for us. Under the terms of the Senior Credit Facility's
Term Loan, we are scheduled to make principal payments totaling approximately
$1.9 million in fiscal year 2008, $2.0 million in fiscal years 2009-2010 and
$191.1 million in fiscal year 2011. These scheduled principal payments are
subject to change upon the annual payment and application of excess cash flows
(as defined in the Credit Agreement underlying the Senior Credit Facility), if
any, towards the Term Loan principal balances. There is no excess cash flow
obligation for the fiscal year ended March 31, 2007. An excess cash flow payment
of $1.7 million for the fiscal year ended March 31, 2006 was made in September
of 2006. Principal payments on long-term debt for the fiscal year ended March
31, 2005 included $15.4 million in untendered notes related to the March 4, 2004
Transaction which were called for redemption on March 4, 2004 and redeemed on
April 3, 2004.

    Loans under the Senior Credit Facility bear interest at floating rates based
upon the borrowing option selected by us. On July 15, 2005, we entered into an
interest rate swap agreement to essentially convert a portion of the variable
rate Term Loan into debt with a fixed rate of 6.844% (4.344% plus an applicable
margin as defined in the Credit Agreement). This agreement was effective as of
September 30, 2005. The Senior Subordinated Notes require semi-annual interest
payments at a fixed rate of 8.625% and mature on March 15, 2012. The Senior
Discount Notes require semi-annual cash interest payments commencing September
15, 2008 at a fixed rate of 11.0% and mature on March 15, 2013.

INVESTING CASH FLOWS

    Our capital expenditures were $6.5 million, $7.3 million, and $7.7 million
for the fiscal years ended March 31, 2007, 2006, and 2005, respectively. Capital
expenditures consist primarily of leasehold improvements and furnishings for new
bookstores, bookstore renovations, computer upgrades and miscellaneous warehouse
improvements. Our ability to make capital expenditures is subject to certain
restrictions under the Senior Credit Facility, including an annual limitation on
capital expenditures made in the ordinary course of business. The annual
limitation for fiscal year 2007 was $12.7 million.

    Business acquisition and contract-management renewal expenditures were $25.9
million, $10.8 million, and $20.2 million for the fiscal years ended March 31,
2007, 2006, and 2005, respectively. On May 1, 2006, we acquired 101 college
bookstore locations, 98 of which were contract-managed, through the acquisition
of all of the outstanding stock of CBA. The total purchase price, net of cash
acquired, of this stock acquisition was $18.8 million. Additionally, during the
fiscal year ended March 31, 2007, we also acquired another seventeen bookstore
locations in sixteen separate transactions. During the fiscal year ended March
31, 2006, we acquired thirteen bookstore locations in eleven separate
transactions. For the fiscal year ended March 31, 2005, we acquired nine
bookstore locations in seven separate transactions. Our ability to make
acquisition expenditures is subject to certain restrictions under the Senior
Credit Facility.

     In conjunction with the March 4, 2004 Transaction, certain of the notes
under our former 8.75% senior subordinated notes and NBC's former 10.75% senior
discount debentures were not tendered by the holders, but were instead called
for redemption on March 4, 2004 and redeemed on April 3, 2004. Such redemption
was funded through $27.1 million of restricted cash held in escrow, of which
$16.1 million related to principal, accrued interest, and call premiums on the
remaining 8.75% senior subordinated notes and $11.0 million related to
principal, accrued interest, and call premiums on NBC's remaining 10.75% senior
discount debentures.

    During the fiscal year ended March 31, 2007, we capitalized $0.7 million in
software development costs associated with new software products and
enhancements to existing software products utilized solely for internal
purposes.

OPERATING CASH FLOWS

    Our principal sources of cash to fund our future operating liquidity needs
will be cash from operating activities and borrowings under the Revolving Credit
Facility. Usage of the Revolving Credit Facility to meet our liquidity needs
fluctuates throughout the fiscal year due to our distinct buying and selling
periods, increasing substantially at the end of each college semester (May and
December). For the fiscal year ended March 31, 2007, weighted-average borrowings
under the Revolving Credit Facility approximated $15.7 million, with actual
borrowings ranging from a low of no borrowings to a high of $59.0 million. Net
cash flows from operating activities for the fiscal year ended March 31, 2007
were $27.5 million, an increase of $4.9 million from $22.6 million for the
fiscal year ended March 31, 2006. This increase in cash flows from operations
was in large part due to the significant growth being experienced in our
Bookstore Division, primarily resulting from the CBA acquisition. Net cash flows
from operating activities for the fiscal year ended March 31, 2006 were $22.6
million, an increase of $5.9 million from $16.7 million for the fiscal year
ended March 31, 2005. This increase was attributable, in large part, to an $11.0
million decrease in accounts payable in fiscal year 2005 relating to the portion
of the restricted cash held in escrow that was utilized to redeem NBC's
untendered former senior discount debentures on April 3, 2004. This decrease was
partially offset by receipt of a $4.5 million refund of fiscal year 2004
estimated tax payments received in fiscal year 2005 which related mainly to
expenses incurred in connection with the March 4, 2004 Transaction.

                                       29
<PAGE>

COVENANT RESTRICTIONS

    Access to our principal sources of cash is subject to various restrictions
and compliance with specified financial ratios and tests, including minimum
interest coverage ratios, maximum leverage ratios, and minimum fixed charge
coverage ratios. The availability of additional borrowings under the Revolving
Credit Facility is subject to the calculation of a borrowing base, which at any
time is equal to a percentage of eligible accounts receivable and inventory, up
to a maximum of $85.0 million. The Senior Credit Facility restricts our ability
to make loans or advances and pay dividends, except that, among other things, we
may pay dividends to NBC (i) in an amount not to exceed the amount of interest
required to be paid on the Senior Discount Notes and (ii) to pay corporate
overhead expenses not to exceed $250,000 per fiscal year and any taxes owed by
NBC. The indenture governing the Senior Subordinated Notes restricts the ability
of the Company and its Restricted Subsidiaries (as defined in the indenture) to
pay dividends or make other Restricted Payments (as defined in the indenture) to
their respective stockholders, subject to certain exceptions, unless certain
conditions are met, including that (i) no default under the indenture shall have
occurred and be continuing, (ii) the Company shall be permitted by the indenture
to incur additional indebtedness and (iii) the amount of the dividend or payment
may not exceed a certain amount based on, among other things, the Company's
consolidated net income. The indenture governing the Senior Discount Notes
contains similar restrictions on NBC's ability and the ability of its Restricted
Subsidiaries (as defined in the indenture) to pay dividends or make other
Restricted Payments (as defined in the indenture) to their respective
stockholders. Such restrictions are not expected to affect our ability to meet
our cash obligations for the next twelve months.

    In accordance with such covenant restrictions, we declared and paid $0.1
million in dividends to NBC during fiscal year 2005 for costs associated with
the March 4, 2004 Transaction.

SOURCES OF AND NEEDS FOR CAPITAL

    As of March 31, 2007, we could borrow up to $48.3 million under the
Revolving Credit Facility. The Revolving Credit Facility was unused at March 31,
2007. Amounts available under the Revolving Credit Facility may be used for
working capital and general corporate purposes (including up to $10.0 million
for letters of credit), subject to certain limitations under the Senior Credit
Facility, including an annual limitation on capital expenditures made in the
ordinary course of business.

    We believe that funds generated from operations, existing cash, and
borrowings under the Revolving Credit Facility will be sufficient to finance our
current operations, any required excess cash flow payments, cash interest
requirements , planned capital expenditures and internal growth for the next
twelve months. Future acquisitions, if any, may require additional debt
financing or capital contributions.

OFF-BALANCE SHEET ARRANGEMENTS

    As of March 31, 2007, we had no off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

                                       30
<PAGE>

    The following tables present aggregated information as of March 31, 2007
regarding our contractual obligations and commercial commitments:
<TABLE>
<CAPTION>
                                                                        Payments Due by Period
                                                       -----------------------------------------------------------
             Contractual                                  Less Than         2-3             4-5         After 5
             Obligations                   Total           1 Year          Years           Years         Years
-------------------------------------- --------------- -------------- --------------- -------------- -------------
<S>                                     <C>              <C>            <C>            <C>            <C>
Long-term debt                          $ 372,391,685   $  1,957,854    $  4,146,273   $366,164,560   $   122,998
Interest on long-term debt (1)            126,249,152     29,023,272      58,076,057     39,137,332        12,491
Capital lease obligations                   3,195,083        490,815       1,263,604      1,156,040       284,624
Interest on capital lease obligations         883,877        281,642         428,659        150,482        23,094
Operating leases                           61,662,000     16,523,000      22,742,000     12,941,000     9,456,000
Unconditional purchase obligations                  -              -               -              -             -
                                       --------------- -------------- --------------- -------------- -------------
  Total                                 $ 564,381,797   $ 48,276,583    $ 86,656,593   $419,549,414   $ 9,899,207
                                       =============== ============== =============== ============== =============

                                                               Amount of Commitment Expiration Per Period
                                           Total       -----------------------------------------------------------
          Other Commercial                Amounts        Less Than         2-3             4-5         Over 5
             Commitments                 Committed        1 Year          Years           Years         Years
-------------------------------------- --------------- -------------- --------------- -------------- -------------

Unused line of credit (2)               $  85,000,000   $          -    $ 85,000,000   $          -   $         -
                                       =============== ============== =============== ============== =============
</TABLE>

     (1)  Interest on the variable rate debt is estimated based upon implied
          forward rates in the yield curve at March 31, 2007, as adjusted for
          the impact of the interest rate swap agreement in place as of March
          31, 2007.

     (2)  Interest is not estimated on the line of credit due to uncertainty
          surrounding the timing and extent of usage of the line of credit.

TRANSACTIONS WITH RELATED AND CERTAIN OTHER PARTIES

    In accordance with our debt covenants, we declared and paid $0.1 million in
dividends to NBC in fiscal year 2005 for costs associated with the March 4, 2004
Transaction.

IMPACT OF INFLATION

    Our results of operations and financial condition are presented based upon
historical costs. While it is difficult to accurately measure the impact of
inflation due to the imprecise nature of the estimates required, we believe that
the effects of inflation, if any, on our results of operations and financial
condition have not been material. However, there can be no assurance that during
a period of significant inflation, our results of operations will not be
adversely affected.

ACCOUNTING STANDARDS NOT YET ADOPTED

    In February 2007, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 159, THE FAIR VALUE OPTION FOR
FINANCIAL ASSETS AND FINANCIAL LIABILITIES INCLUDING AN AMENDMENT OF FASB
STATEMENT NO. 115. This statement permits entities to choose to measure many
financial instruments and certain other items at fair value, thereby mitigating
volatility in reported earnings caused by measuring related assets and
liabilities differently. This Statement becomes effective for us in fiscal year
2009 and is not expected to have a material impact on our consolidated financial
statements.

                                       31
<PAGE>

    In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157, FAIR VALUE MEASUREMENTS. This Statement defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. This Statement becomes effective for us in fiscal year
2009 and is not expected to have a material impact on our consolidated financial
statements.

     In July 2006, the FASB issued Interpretation No. 48, ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES. This Interpretation clarifies the accounting for
uncertainty in income taxes recognized in a company's financial statements and
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. This Interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. This Interpretation becomes effective for
us in fiscal year 2008. We are reviewing this Interpretation and have not yet
determined the impact, if any, on the consolidated financial statements.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995

    This Annual Report on Form 10-K contains or incorporates by reference
certain statements that are not historical facts, including, most importantly,
information concerning possible or assumed future results of our operations and
statements preceded by, followed by or that include the words "may," "believes,"
"expects," "anticipates," or the negation thereof, or similar expressions, which
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). All statements
which address operating performance, events or developments that are expected or
anticipated to occur in the future, including statements relating to volume and
revenue growth, earnings per share or EBITDA growth or statements expressing
general optimism or pessimism about future results of operations, are
forward-looking statements within the meaning of the Reform Act. Such
forward-looking statements involve risks, uncertainties and other factors which
may cause our actual performance or achievements to be materially different from
any future results, performances or achievements expressed or implied by such
forward-looking statements. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Reform Act. Several
important factors could affect our future results and could cause those results
to differ materially from those expressed in the forward-looking statements
contained herein. Such factors include, but are not limited to, the following:
increased competition from other companies that target our markets and from
alternative media and alternative sources of textbooks for students; digital or
other educational content sold directly to students; increased competition for
the purchase and sale of used textbooks from student to student transactions;
our inability to successfully acquire or contract-manage additional bookstores
or to integrate those additional stores; our inability to cost-effectively
maintain or increase the number of contract-managed stores; our inability to
purchase a sufficient supply of used textbooks; changes in pricing of new and/or
used textbooks; changes in publisher activities related to new editions and
materials packaged with new textbooks; the loss or retirement of key members of
management; the impact of seasonality of the wholesale and bookstore operations;
increases in our cost of borrowing or our inability to raise additional debt or
equity capital; changes in general economic conditions and/or in the markets in
which we compete or may, from time to time, compete; and other risks detailed in
our Securities and Exchange Commission filings, in particular in this Annual
Report on Form 10-K, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. We will not undertake and
specifically decline any obligation to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.

                                       32
<PAGE>

      ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    Our primary market risk exposure is, and is expected to continue to be,
fluctuation in variable interest rates. Of the $375.6 million in total
indebtedness outstanding at March 31, 2007, approximately $197.0 million is
subject to fluctuations in the Eurodollar interest rate. As provided in our
Senior Credit Facility, exposure to interest rate fluctuations is managed by
maintaining fixed interest rate debt (primarily the Senior Subordinated Notes)
and by entering into interest rate swap agreements that qualified as cash flow
hedging instruments to convert certain variable rate debt into fixed rate debt.
On July 15, 2005, we entered into an interest rate swap agreement, which became
effective on September 30, 2005. The notional amount under the interest rate
swap agreement at March 31, 2007 was $140.0 million and will decrease
periodically to $130.0 million, expiring on September 30, 2008.

    The following table presents quantitative information about our market risk
sensitive instruments (the weighted-average variable rates are based on implied
forward rates in the yield curve at March 31, 2007):
<TABLE>
<CAPTION>
                                      Fixed Rate Debt             Variable Rate Debt
                                 ---------------------------  --------------------------
                                                  Weighted-                   Weighted-
                                                   Average                     Average
                                   Principal      Interest      Principal     Interest
                                   Cash Flows       Rate      Cash Flows (1)    Rate
                                 ---------------  ----------  --------------  ----------
<S>                               <C>                 <C>       <C>               <C>
Fiscal Year Ended March 31:
  2008                            $     530,278       8.66%   $   1,918,391       7.58%
  2009                                  636,362       8.65%       2,026,736       7.20%
  2010                                  720,043       8.65%       2,026,736       7.31%
  2011                                  808,731       8.64%     191,049,609       7.46%
  2012                              175,462,260       8.63%               -           -
  Thereafter                            407,622       9.85%               -           -
                                 ---------------  ----------  --------------  ----------
    Total                         $ 178,565,296       8.65%   $ 197,021,472       7.39%
                                 ===============  ==========  ==============  ==========

      Fair Value                  $ 179,933,000          -    $ 197,021,472           -
                                 ===============              ==============

                                              Interest Rate Swap
                                 -------------------------------------------
                                                  Weighted-     Weighted-
                                    Average        Average       Average
                                    Notional       Receive         Pay
                                    Amounts         Rate          Rate
                                 ---------------  ----------  --------------
Fiscal Year Ended March 31:
  2008                            $ 135,000,000       5.08%           4.34%
  2009                               65,000,000       4.68%           4.34%
                                                  ----------  --------------
                                                      4.95%           4.34%
                                                  ==========  ==============
      Fair Value ("in the money") $   1,301,000          -               -
                                 ===============
</TABLE>

     (1)  Principal cash flows represent scheduled principal payments and are
          adjusted for anticipated excess cash flow payments and optional
          prepayments (as defined in the Credit Agreement underlying the Senior
          Credit Facility), if any, to be applied toward principal balances.

                                       33
<PAGE>

    Certain quantitative market risk disclosures have changed since March 31,
2006 as a result of market fluctuations, movement in interest rates, new
indebtedness, and principal payments. The following table presents summarized
market risk information for the fiscal years ended March 31, 2007 and 2006,
respectively (the weighted-average variable rates are based on implied forward
rates in the yield curve as of the date presented):

                                                 March 31,        March 31,
                                                    2007            2006
                                               -------------- ----------------
Fair Values:
  Fixed rate debt                              $ 179,933,000    $ 163,963,430
  Variable rate debt                             197,021,472      176,400,000
  Interest rate swap ("in-the-money")              1,301,000        2,833,000

Overall Weighted-Average Interest Rates:
  Fixed rate debt                                      8.65%            8.65%
  Variable rate debt                                   7.39%            7.73%
  Interest rate swap receive rate                      4.95%            5.18%
  Interest rate swap pay rate                          4.34%            4.34%

                                       34
<PAGE>


                 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements of Nebraska Book Company, Inc.

Report of Independent Registered Public Accounting Firm                       36

Consolidated Balance Sheets as of March 31, 2007 and March 31, 2006           37

Consolidated Statements of Operations for the Years Ended
March 31, 2007, 2006 and 2005                                                 38

Consolidated Statements of Stockholder's Equity for the Years Ended
March 31, 2007, 2006 and 2005                                                 39

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2007, 2006 and 2005                                                 40

Notes to Consolidated Financial Statements                                    41




                                       35
<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
Nebraska Book Company, Inc.
Lincoln, Nebraska

    We have audited the accompanying consolidated balance sheets of Nebraska
Book Company, Inc. (a wholly-owned subsidiary of NBC Acquisition Corp.) and
subsidiaries as of March 31, 2007 and 2006, and the related consolidated
statements of operations, stockholder's equity, and cash flows for each of the
three years in the period ended March 31, 2007. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Nebraska Book Company, Inc. and
subsidiaries as of March 31, 2007 and 2006, and the results of their operations
and their cash flows for each of the three years in the period ended March 31,
2007 in conformity with accounting principles generally accepted in the United
States of America.


/s/  Deloitte & Touche LLP

Lincoln, Nebraska
June 28, 2007


                                       36
<PAGE>
NEBRASKA BOOK COMPANY, INC.

CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------

                                                   March 31,     March 31,
                                                     2007           2006
                                                -------------- --------------
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                     $  32,982,876  $  33,382,722
  Receivables                                      54,949,070     37,760,786
  Inventories                                      94,548,706     74,878,442
  Recoverable income taxes                                  -      1,438,819
  Deferred income taxes                             5,261,114      5,183,002
  Prepaid expenses and other assets                 1,993,644      1,634,483
                                                -------------- --------------
    Total current assets                          189,735,410    154,278,254

PROPERTY AND EQUIPMENT, net of
depreciation & amortization                        43,078,109     39,962,913
GOODWILL                                          311,606,364    293,049,842
IDENTIFIABLE INTANGIBLES, net of amortization     139,824,716    145,478,506
DEBT ISSUE COSTS, net of amortization               6,939,046      7,697,227
OTHER ASSETS                                        4,303,947      4,879,588
                                                -------------- --------------
                                                $ 695,487,592  $ 645,346,330
                                                ============== ==============

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
  Accounts payable                              $  28,505,138  $  19,810,267
  Accrued employee compensation and benefits       14,213,001     10,014,671
  Accrued interest                                    710,800        628,906
  Accrued incentives                                6,983,262      7,559,496
  Accrued expenses                                  2,334,239        996,200
  Income taxes payable                              3,253,074              -
  Deferred revenue                                    898,666        714,423
  Current maturities of long-term debt              1,957,854      3,206,582
  Current maturities of capital
  lease obligations                                   490,815        281,604
                                                 ------------- --------------
    Total current liabilities                      59,346,849     43,212,149
LONG-TERM DEBT, net of current maturities         370,433,831    348,596,275
CAPITAL LEASE OBLIGATIONS,
net of current maturities                           2,704,268      2,224,684
OTHER LONG-TERM LIABILITIES                         2,983,350      1,528,533
DEFERRED INCOME TAXES                              58,612,118     60,266,727
DUE TO PARENT                                      16,733,279     16,649,682
COMMITMENTS (Note H)
STOCKHOLDER'S EQUITY:
  Common stock, voting, authorized 50,000 shares
  of $1.00 par value; issued and outstanding
  100 shares                                              100            100
  Additional paid-in capital                      138,017,229    138,022,098
  Retained earnings                                46,043,568     33,432,082
  Accumulated other comprehensive income              613,000      1,414,000
                                                -------------- --------------
    Total stockholder's equity                    184,673,897    172,868,280
                                                -------------- --------------
                                                $ 695,487,592  $ 645,346,330
                                                ============== ==============

See notes to consolidated financial statements.


                                       37

<PAGE>
NEBRASKA BOOK COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------

                                        Year Ended    Year Ended    Year Ended
                                        March 31,     March 31,     March 31,
                                           2007          2006          2005
                                       ------------- ------------- -------------
REVENUES, net of returns               $544,427,964  $420,107,899  $402,154,340

COSTS OF SALES (exclusive of
depreciation shown below)               332,443,991   250,914,049   240,638,133
                                       ------------- ------------- -------------
  Gross profit                          211,983,973   169,193,850   161,516,207

OPERATING EXPENSES:
  Selling, general and administrative   143,095,625   107,990,817   100,513,028
  Closure of California Warehouse           774,475             -             -
  Depreciation                            5,915,758     4,912,731     4,907,843
  Amortization                            9,613,598     8,762,398     8,258,500
                                       ------------- ------------- -------------
                                        159,399,456   121,665,946   113,679,371
                                       ------------- ------------- -------------
INCOME FROM OPERATIONS                   52,584,517    47,527,904    47,836,836
                                       ------------- ------------- -------------
OTHER EXPENSES (INCOME):
  Interest expense                       33,135,537    29,395,142    25,853,629
  Interest income                        (1,643,598)   (1,274,836)     (638,935)
  (Gain) Loss on derivative
  financial instrument                      225,000      (525,000)            -
                                       ------------- ------------- -------------
                                         31,716,939    27,595,306    25,214,694
                                       ------------- ------------- -------------

INCOME BEFORE INCOME TAXES               20,867,578    19,932,598    22,622,142

INCOME TAX EXPENSE                        8,256,092     7,691,105     9,162,118
                                       ------------- ------------- -------------
NET INCOME                             $ 12,611,486  $ 12,241,493  $ 13,460,024
                                       ============= ============= =============

See notes to consolidated financial statements.

                                       38
<PAGE>

NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
----------------------------------------------------------------------------------------------------------------------

                                                                              Accumulated
                                                      Additional                 Other
                                            Common     Paid-in      Retained  Comprehensive              Comprehensive
                                             Stock     Capital      Earnings     Income        Total         Income
                                            ------- ------------- ----------- ------------- ------------ -------------
<S>                                          <C>     <C>           <C>          <C>         <C>           <C>
BALANCE, April 1, 2004                       $ 100  $137,957,716  $ 7,863,031  $        -  $145,820,847

  Contributed capital                            -            14            -           -            14  $         -

  Net income                                     -             -   13,460,024           -    13,460,024   13,460,024

  Dividends declared                             -             -     (132,466)          -      (132,466)           -
                                            ------- ------------- ------------ ------------ ------------ ------------

BALANCE, March 31, 2005                        100   137,957,730   21,190,589           -   159,148,419  $13,460,024
                                                                                                         ============
  Contributed capital                            -        44,368            -           -        44,368  $         -

  Net income                                     -             -   12,241,493           -    12,241,493   12,241,493

  Tax benefit arising from exercise of
  640 stock options                              -        20,000            -           -        20,000            -

  Other comprehensive income, net of taxes:

    Unrealized gain on interest rate swap
    agreement, net of taxes of $894,000          -             -            -   1,414,000     1,414,000    1,414,000
                                            ------- ------------- ------------ ----------- ------------- ------------
BALANCE, March 31, 2006                        100   138,022,098   33,432,082   1,414,000   172,868,280  $13,655,493
                                                                                                         ============

  Contributed capital                            -        (4,869)           -           -        (4,869) $         -

  Net income                                     -             -   12,611,486           -    12,611,486   12,611,486

  Other comprehensive loss, net of taxes:

    Unrealized loss on interest rate swap
    agreement, net of taxes of $506,000          -             -            -    (801,000)     (801,000)    (801,000)

                                            ------- ------------- ------------ ----------- -------------- -----------
BALANCE, March 31, 2007                      $ 100  $138,017,229  $46,043,568  $  613,000  $184,673,897  $11,810,486
                                            ======= ============= ============ =========== ============== ===========
</TABLE>

See notes to consolidated financial statements.

                                       39
<PAGE>
NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------------------------------

                                                        Year Ended    Year Ended   Year Ended
                                                         March 31,    March 31,    March 31,
                                                           2007          2006         2005
                                                        ------------ ------------- -----------
<S>                                                     <C>          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                            $12,611,486  $ 12,241,493  $13,460,024
  Adjustments to reconcile net income to
  net cash flows from operating activities:
    Share-based compensation                                996,957             -            -
    Provision for losses on receivables                     834,442       231,497      315,958
    Depreciation                                          5,915,758     4,912,731    4,907,843
    Amortization                                         11,336,553    10,282,835    9,728,736
    (Gain) Loss on derivative financial instruments         225,000      (525,000)           -
    (Gain) Loss on disposal of assets                          (575)       90,263       68,065
    Deferred income taxes                                (2,148,119)        3,539   (1,133,757)
    Changes in operating assets and liabilities,
    net of effect of acquisitions:
      Receivables                                        (9,924,934)   (7,012,834)    (714,820)
      Inventories                                        (3,566,490)       99,541      192,149
      Recoverable income taxes                            1,438,819    (1,438,819)   5,351,480
      Prepaid expenses and other assets                    (219,494)   (1,017,502)     300,768
      Other assets                                         (714,295)      396,569     (379,720)
      Accounts payable                                    5,123,589     3,351,602  (13,824,098)
      Accrued employee compensation and benefits          2,617,465     1,895,832   (1,267,618)
      Accrued interest                                       24,069             -   (1,413,051)
      Accrued incentives                                   (576,234)     (201,800)     778,992
      Accrued expenses                                    1,226,030      (157,122)     (91,363)
      Income taxes payable                                2,330,451      (538,161)     259,835
      Deferred revenue                                      184,243      (328,237)     144,002
      Other long-term liabilities                          (282,140)      211,698      260,548
      Due to parent                                          83,597        75,107     (261,783)
                                                        ------------ ------------- -----------
        Net cash flows from operating activities         27,516,178    22,573,232   16,682,190

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                    (6,543,074)   (7,311,694)  (7,665,675)
  Acquisitions, net of cash acquired                    (25,873,662)  (10,848,509) (20,160,079)
  Decrease in restricted cash                                     -             -   27,065,000
  Proceeds from sale of property and equipment              313,505        38,029       13,199
  Software development costs                               (705,523)            -            -
                                                        ------------ ------------- -----------
        Net cash flows from investing activities        (32,808,754)  (18,122,174)    (747,555)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt               24,000,000             -            -
  Payment of financing costs                               (964,774)     (248,813)    (437,915)
  Principal payments on long-term debt                   (3,821,172)   (1,832,143) (17,238,880)
  Principal payments on capital lease obligations          (390,205)     (260,920)    (182,094)
  Net decrease in revolving credit facility             (13,931,119)            -            -
  Dividends paid to parent                                        -             -     (132,466)
  Capital contributions                                           -        49,197        4,882
                                                        ------------ ------------- -----------
        Net cash flows from financing activities          4,892,730    (2,292,679) (17,986,473)
                                                        ------------ ------------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       (399,846)    2,158,379   (2,051,838)

CASH AND CASH EQUIVALENTS, Beginning of period           33,382,722    31,224,343   33,276,181
                                                        ------------ ------------- -----------
CASH AND CASH EQUIVALENTS, End of period                $32,982,876  $ 33,382,722  $31,224,343
                                                        ============ ============= ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
  Cash paid during the period for:
    Interest                                            $31,388,513  $ 27,874,705  $25,796,444
    Income taxes                                          6,551,344     9,589,439    4,946,343
  Noncash investing and financing activities:
    Property acquired through capital lease             $ 1,079,000  $          -  $   643,718
    Accumulated other comprehensive income:
      Unrealized gain (loss) on interest rate
      swap agreement, net of income taxes                  (801,000)    1,414,000            -
      Deferred taxes resulting from unrealized
      gain (loss) on interest rate swap agreement          (506,000)      894,000            -
    Tax benefit on exercise of stock options                      -        20,000            -

</TABLE>

See notes to consolidated financial statements.

                                      40
<PAGE>


NEBRASKA BOOK COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

A.  NATURE OF OPERATIONS

     Nebraska Book Company, Inc. (the "Company") is a wholly-owned subsidiary of
NBC Acquisition Corp. ("NBC"). Wholly-owned subsidiaries of Nebraska Book
Company, Inc. include NBC Textbooks LLC (accounted for in the Company's Textbook
Division), Specialty Books, Inc. (the Company's distance education division),
and College Book Stores of America, Inc. ("CBA") (a portion of the Company's
Bookstore Division representing a group of primarily contract-managed college
bookstore locations acquired on May 1, 2006).

    The Company participates in the college bookstore industry primarily by
operating its own college bookstores, by providing used textbooks to college
bookstore operators, by providing distance education products and services, and
by providing proprietary college bookstore information and E-commerce systems,
consulting services, and other services.

    On March 4, 2004, Weston Presidio formed NBC Holdings Corp. and acquired the
controlling interest in NBC through a series of steps which resulted in Weston
Presidio owning a substantial majority of NBC's common stock (referred to as the
"March 4, 2004 Transaction").

B.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The significant accounting policies of the Company are as follows:

    PRINCIPLES OF CONSOLIDATION: Effective July 1, 2002, the Company's distance
learning division was separately incorporated under the laws of the State of
Delaware as Specialty Books, Inc., a wholly-owned subsidiary of the Company.
Effective January 1, 2005, the Company's textbook division was separately
incorporated under the laws of the State of Delaware as NBC Textbooks LLC, a
wholly-owned subsidiary of the Company. On May 1, 2006, the Company acquired all
of the outstanding stock of CBA, an entity separately incorporated under the
laws of the State of Illinois and now accounted for as a wholly-owned subsidiary
of the Company. Subsequent to the date of incorporation or acquisition, the
Company's financial statements have been presented on a consolidated basis to
include all of the accounts of Specialty Books, Inc., NBC Textbooks LLC and CBA,
after elimination of all intercompany accounts and transactions. In connection
with their incorporation, Specialty Books, Inc., NBC Textbooks LLC and CBA have
guaranteed payment and performance of obligations, liabilities, and indebtedness
arising under, out of, or in connection with the Senior Subordinated Notes and
Senior Credit Facility.

    REVENUE RECOGNITION: The Company's revenue recognition policies, by
reporting segment, are as follows:

        BOOKSTORE DIVISION - The Bookstore Division's revenues consist primarily
        of the sale of new and used textbooks, as well as a variety of other
        merchandise including apparel, general books, sundries, and gift items.
        Such sales occur primarily "over-the-counter" with revenues being
        recognized at the point of sale.

        TEXTBOOK DIVISION - The Textbook Division recognizes revenue from the
        sale of used textbooks when title passes (at the time of shipment), net
        of estimated product returns. The Textbook Division has established a
        program which, under certain conditions, enables its customers to return
        the used textbooks. The effect of this program is estimated utilizing
        actual historical return experience and revenues are adjusted
        accordingly.

        COMPLEMENTARY SERVICES DIVISION - Complementary Services Division
        revenues come from a variety of sources, including the sale of distance
        education materials, the sale of computer hardware and software (and
        licensing thereof), software maintenance contracts, membership fees, and
        a variety of services provided to college bookstores. Revenues from the
        sale of distance education materials and computer hardware/software (and
        licensing thereof) are recognized at the time of delivery. Software
        maintenance contracts and membership fees are generally invoiced to the
        customer annually, with the revenues being deferred and recognized on a
        straight-line basis over the term of the contract. Revenues from the
        various services provided to college bookstores are recognized once
        services have been rendered.

    SHIPPING AND HANDLING FEES AND COSTS: Amounts billed to a customer for
shipping and handling have been classified as revenues in the consolidated
statements of operations and approximated $3.3 million, $3.2 million, and $4.0
million for the fiscal years ended March 31, 2007, 2006, and 2005, respectively.
Shipping and handling costs are included in operating expenses in the
consolidated statements of operations and approximated $7.4 million, $7.4
million, and $8.4 million for the fiscal years ended March 31, 2007, 2006, and
2005, respectively.

                                       41
<PAGE>

    SALES TAX COLLECTIONS: Sales tax collected from customers and remitted to
the applicable taxing authorities is accounted for by the Company on a net
basis, with no impact on revenues and any differences between amount collected
and amount remitted being recorded in selling, general and administrative
expenses.

    ADVERTISING: Advertising costs are expensed as incurred and approximated
$7.3 million, $5.9 million, and $4.5 million for the fiscal years ended March
31, 2007, 2006, and 2005, respectively.

    USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from the estimates.

    CASH AND CASH EQUIVALENTS: Cash and cash equivalents consist of cash on hand
and in the bank as well as short-term investments with maturities of three
months or less when purchased.

    INVENTORIES: Inventories are stated at the lower of cost or market.
Inventories for the Textbook Division are determined on the weighted-average
cost method. The Company's Bookstore Division values new textbook and
non-textbook inventories using the retail inventory method. Other inventories
are determined on the first-in, first-out cost method.

    PROPERTY AND EQUIPMENT: Property and equipment are stated at cost.
Depreciation is determined using the straight-line method. The majority of
property and equipment have useful lives of one to seven years, with the
exception of buildings which are depreciated over 39 years and leasehold
improvements which are depreciated over the remaining life of the corresponding
lease, or the useful life, if shorter. The Company does not consider renewal
options for the determination of the amortization period for leasehold
improvements unless renewal is considered reasonably assured at the inception of
the lease.

    GOODWILL: Goodwill arose as a result of the March 4, 2004 Transaction and
the acquisition of bookstore operations subsequent thereto. Goodwill is not
amortized but rather tested at least annually for impairment. The test for
impairment of goodwill is a two-step process that identifies potential
impairment and then measures the amount of such impairment to be recorded in the
consolidated financial statements. There were no impairment losses recognized
during the periods presented.

    IDENTIFIABLE INTANGIBLES - CUSTOMER RELATIONSHIPS: The identifiable
intangible asset for customer relationships is attributable to the
non-contractual long-term relationships the Company has established over the
years with customers in its Textbook and Complementary Services Divisions. This
identifiable intangible is amortized on a straight-line basis over an estimated
useful life of 20 years. There were no impairment losses recognized during the
periods presented.

    IDENTIFIABLE INTANGIBLES - TRADENAMES: The identifiable intangible asset for
tradenames relates to the trademark owned on the name "Nebraska Book Company"
and the corresponding logo. This identifiable intangible has an indefinite
useful life; and, thus, is not amortized but rather tested at least annually for
impairment. The test for impairment of identifiable intangibles with indefinite
useful lives consists of comparing the fair value of the identifiable intangible
with its carrying amount, recognizing any excess carrying value as an impairment
loss. There were no impairment losses recognized during the periods presented.

    IDENTIFIABLE INTANGIBLES - DEVELOPED TECHNOLOGY: The Company's primary
activities regarding the internal development of software revolve around its
proprietary college bookstore information systems (PRISM and WinPRISM) and
E-commerce technology (WebPRISM), which are utilized by the Company's Bookstore
Division and also marketed to the general public. As this software developed
internally is intended for both internal use and sale to external customers, the
Company adheres to the guidance in Statement of Financial Accounting Standards
("SFAS") No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD,
LEASED, OR OTHERWISE MARKETED as required by Statement of Position 98-1,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL
USE.

    Development costs included in the research and development of new software
products and enhancements to existing software products associated with the
Company's proprietary college bookstore information systems and E-commerce
technology are expensed as incurred until technological feasibility has been
established. After technological feasibility is established, additional
development costs are capitalized and amortized on a straight-line basis over
the lesser of six years or the economic life of the related product.
Recoverability of such capitalized costs is evaluated based upon estimates of
future undiscounted cash flows. There were no impairment losses recognized
during the periods presented.

                                       42
<PAGE>

    Development costs also include the development of new software products and
enhancements to existing software products utilized solely for internal
purposes. Such costs are expensed until the preliminary project stage is
completed and the project has been authorized by management, at which point
subsequent costs are capitalized until the project is substantially complete and
ready for its intended use. These costs, which totaled $0.7 million for the
fiscal year ended March 31, 2007, are amortized on a straight-line basis over a
period of six years.

    Amortization of the capitalized costs associated with developed technology
totaled $1.9 million, $1.9 million, and $1.9 million for the fiscal years ended
March 31, 2007, 2006, and 2005, respectively.

    IDENTIFIABLE INTANGIBLES - COVENANTS NOT TO COMPETE: The identifiable
intangible asset for covenants not to compete represents the value assigned to
such agreements, which are typically entered into with the owners of college
bookstores acquired by the Company. This identifiable intangible is amortized on
a straight-line basis over the term of the agreement, which ranges from 3 to 15
years.

    IDENTIFIABLE INTANGIBLES - CONTRACT-MANAGED ACQUISITION COSTS: The
identifiable intangible asset for contract-managed acquisition costs represents
up front payments made to institutions that contract with the Company to manage
the on-campus bookstore. This identifiable intangible is amortized on a
straight-line basis over the term of the agreement, which ranges from 1 to 15
years.

    DEBT ISSUE COSTS: The costs related to the issuance of debt are capitalized
and amortized to interest expense using the effective interest method over the
lives of the related debt. Accumulated amortization of such costs as of March
31, 2007 and 2006 was approximately $4.8 million and $3.1 million, respectively.

    DERIVATIVE FINANCIAL INSTRUMENTS: Interest rate swap agreements are utilized
by the Company to reduce exposure to fluctuations in the interest rates on its
variable rate debt. Such agreements are recorded in the consolidated balance
sheet at fair value. Changes in the fair value of the agreements are recorded in
earnings or other comprehensive income (loss), based on whether the agreements
are designated as part of the hedge transaction and whether the agreements are
effective in offsetting the change in the value of the interest payments
attributable to the Company's variable rate debt.

    FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying amounts of financial
instruments including cash and cash equivalents, accounts receivable, and
accounts payable approximate fair value as of March 31, 2007 and 2006, because
of the relatively short maturity of these instruments. The fair value of
long-term debt, including the current maturities, was approximately $377.0
million and $340.4 million as of March 31, 2007 and 2006, respectively, as
determined by quoted market values and prevailing interest rates for similar
debt issues. The fair value of the interest rate swap agreement, which was
"in-the-money" and totaled $1.3 million and $2.8 million as of March 31, 2007
and 2006, respectively, is determined by calculating the net present value of
estimated future payments between the Company and its counterparty.

    SHARE-BASED COMPENSATION: On April 1, 2006, the Company adopted SFAS No. 123
(revised 2004), SHARE-BASED PAYMENT ("SFAS No. 123R"). SFAS No. 123R focuses
primarily on accounting for transactions in which an entity obtains employee
services in share-based payment transactions and requires an entity to, in most
cases, measure the cost of such services based on the grant-date fair value of
the award. This Statement is a revision of SFAS No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION ("SFAS No. 123"), and supersedes Accounting Principles
Board ("APB") Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, thereby
eliminating the intrinsic value method of accounting for share-based
compensation by the Company for transactions occurring after March 31, 2006.

    The Company accounts for its share-based compensation arising from
transactions occurring prior to April 1, 2006 under the provisions of APB
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES and related
interpretations utilizing the intrinsic value method. Under this method,
compensation expense is recorded on the date of grant only if the current market
price of the underlying stock exceeds the exercise price. SFAS No. 123
established accounting and disclosure requirements using a fair-value-based
method of accounting for share-based employee compensation plans. For purposes
of measuring share-based compensation, the Company is considered a nonpublic
entity as defined in SFAS No. 123R. As allowed by SFAS No. 123, the Company
elected to continue to apply the intrinsic-value-based method of accounting for
options granted prior to April 1, 2006 and utilized the minimum value method for
pro forma disclosure of the impact of SFAS No. 123 prior to the adoption of SFAS
No. 123R.

                                       43
<PAGE>

    UNVESTED STOCK: Under the NBC Holdings Corp. 2005 Restricted Stock Plan,
4,200 shares of NBC Holdings Corp. capital stock may be and were issued on March
31, 2006 for $0.01 per share to certain officers and directors of the Company.
Certain restrictions limit the sale or transfer of these shares (as more fully
described in Note M to the consolidated financial statements). Such shares are
subject to both call rights on behalf of NBC Holdings Corp. and put rights on
behalf of the officers and directors once vested (as more fully described in
Note M to the consolidated financial statements). The shares vest on September
30, 2010 (the "vesting date"). Due to the existence of the put rights,
share-based compensation will be accrued from March 31, 2006 until the vesting
date and recorded as "other long-term liabilities" in the consolidated balance
sheets.

    INCOME TAXES: The Company files a consolidated federal income tax return
with its parent and follows a policy of recording an amount equal to the income
tax expense which the Company would have incurred had it filed a separate
return. The Company is responsible for remitting tax payments and collecting tax
refunds for the consolidated group. The amount due to parent (i.e., NBC)
represents the cumulative reduction in tax payments made by the Company as a
result of the tax benefit of operating losses generated by the Company's parent.
The Company provides for deferred income taxes based upon temporary differences
between financial statement and income tax bases of assets and liabilities, and
tax rates in effect for periods in which such temporary differences are
estimated to reverse.

    COMPREHENSIVE INCOME (LOSS): Comprehensive income (loss) includes net income
and other comprehensive income (losses). Other comprehensive income (losses)
consists of unrealized gains (losses) on the interest rate swap agreement, net
of taxes.

    ACCOUNTING STANDARDS NOT YET ADOPTED: In February 2007, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards No. 159, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL
LIABILITIES INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115. This statement
permits entities to choose to measure many financial instruments and certain
other items at fair value, thereby mitigating volatility in reported earnings
caused by measuring related assets and liabilities differently. This Statement
becomes effective for the Company in fiscal year 2009 and is not expected to
have a material impact on its consolidated financial statements.

    In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157, FAIR VALUE MEASUREMENTS. This Statement defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. This Statement becomes effective for the Company in
fiscal year 2009 and is not expected to have a material impact on its
consolidated financial statements.

    In July 2006, the FASB issued Interpretation No. 48, ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES. This Interpretation clarifies the accounting for
uncertainty in income taxes recognized in a company's financial statements and
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. This Interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. This Interpretation becomes effective for
the Company in fiscal year 2008. Management is reviewing this Interpretation and
has not yet determined the impact, if any, on the consolidated financial
statements.

    RECLASSIFICATION: Contract-managed acquisition costs have been reclassified
in prior period consolidated financial statements from Other Assets to
Identifiable Intangibles to conform to current fiscal year presentation. This
reclassification was made due to the increasing significance of such costs,
which is due in large part to the acquisition of CBA.

C.  RECEIVABLES

    Receivables are summarized as follows:
                                                           March 31,
                                                 -----------------------------
                                                      2007            2006
                                                 --------------  -------------
Trade receivables, less allowance for doubtful
accounts of $1,100,360 and $510,839 at
March 31, 2007 and 2006, respectively             $ 27,836,739   $ 18,384,821
Receivables from book publishers for returns        20,875,916     13,082,537
Advances for book buy-backs                          4,855,202      4,563,572
Computer finance agreements, current portion           293,000        290,000
Other                                                1,088,213      1,439,856
                                                 --------------  -------------
                                                  $ 54,949,070   $ 37,760,786
                                                 ==============  =============

   Trade receivables include the effect of estimated product returns. The amount
of estimated product returns at March 31, 2007 and 2006 was approximately $5.0
million and $4.9 million, respectively.

                                       44
<PAGE>

D.  INVENTORIES

    Inventories are summarized as follows:

                                                     March 31,
                                           -----------------------------
                                                2007          2006
                                           -------------- --------------
Bookstore Division                          $ 61,297,777   $ 43,922,080
Textbook Division                             30,323,636     28,775,512
Complementary Services Division                2,927,293      2,180,850
                                           -------------- --------------
                                            $ 94,548,706   $ 74,878,442
                                           ============== ==============

    Textbook Division inventories include the effect of estimated product
returns. The amount of estimated product returns at both March 31, 2007 and 2006
was approximately $2.3 million.

    General and administrative costs associated with the storage and handling of
inventory totaled approximately $10.8 million and $8.5 million for the fiscal
years ended March 31, 2007 and 2006, respectively, of which approximately $2.5
million and $2.2 million was capitalized into inventory at March 31, 2007 and
2006, respectively.

E.  PROPERTY AND EQUIPMENT

    A summary of the cost of property and equipment follows:

                                                    March 31,
                                         ------------------------------
                                              2007           2006
                                         --------------  --------------
Land                                      $  3,565,382    $  3,565,382
Buildings and improvements                  21,956,795      20,167,524
Leasehold improvements                       8,962,778       7,085,846
Furniture and fixtures                      12,269,822      10,359,449
Information systems                         10,713,109       7,014,081
Automobiles and trucks                         221,046         220,529
Machinery                                      357,241         344,452
Projects in process                            705,735       1,298,304
                                         --------------  --------------
                                            58,751,908      50,055,567
Less:  Accumulated depreciation &
amortization                               (15,673,799)    (10,092,654)
                                         --------------  --------------
                                          $ 43,078,109    $ 39,962,913
                                         ==============  ==============

F.  GOODWILL AND OTHER IDENTIFIABLE INTANGIBLES

    As discussed in Note A, on March 4, 2004 Weston Presidio acquired the
controlling interest in NBC through a series of steps which resulted in Weston
Presidio owning a substantial majority of NBC's common stock. The March 4, 2004
Transaction was accounted for as a purchase at NBC Holdings Corp. with the
related purchase accounting pushed-down to NBC and the Company as of the date of
the transaction. The excess of the purchase price over the historical basis of
the net assets acquired was applied to adjust net assets to their fair values,
as determined in part using an independent third-party appraisal. The allocation
of the excess purchase price included establishing identifiable intangibles for
customer relationships of $114.8 million and tradename of $31.3 million;
adjusting the carrying value of developed technology at March 4, 2004 to a fair
value of $11.4 million; and adjusting the carrying value of goodwill at March 4,
2004 to a fair value of $269.1 million, of which $25.3 million is deductible for
income tax purposes. The weighted-average amortization period for the
identifiable intangibles subject to amortization is 18.7 years, including 20
years for customer relationships and 6 years for developed technology.

                                       45
<PAGE>

    On May 1, 2006, the Company acquired 101 college bookstore locations, most
of which are contract-managed, through the acquisition of all of the outstanding
stock of CBA. The total purchase price, net of cash acquired, of this stock
acquisition was approximately $18.8 million, of which approximately $15.5
million was assigned to non tax-deductible goodwill, $0.6 million was assigned
to covenants not to compete with amortization periods of up to fifteen years,
and $1.0 million was assigned to contract-managed acquisition costs with
amortization periods of up to eight years based on the preliminary purchase
price allocation.

    Additionally, for the fiscal year ended March 31, 2007, another seventeen
bookstore locations were acquired in sixteen separate transactions. The total
purchase price, net of cash acquired, of such acquisitions was $6.4 million, of
which $3.1 million was assigned to tax-deductible goodwill, $0.5 million was
assigned to covenants not to compete with amortization periods of three years,
and $0.4 million was assigned to contract-managed acquisition costs with
amortization periods of up to four years based on the preliminary purchase price
allocations.


    Finally, the Company incurred $0.6 million in contract-managed acquisition
costs with amortization periods of up to eleven years associated with renewals
of certain contract-managed locations during the fiscal year ended March 31,
2007.

    The changes in the carrying amount of goodwill for the fiscal years ended
March 31, 2007 and 2006, in total and by reportable segment, are as follows:


                                    Bookstore       Corporate
                                    Division      Administration      Total
                                  -------------- --------------- ---------------
Balance, April 1, 2005             $ 15,836,651   $ 269,061,875   $ 284,898,526

  Additions to goodwill:

    Bookstore acquisitions            7,524,419               -       7,524,419

  Purchase accounting adjustments       626,897               -         626,897
                                  -------------- --------------- ---------------
Balance, March 31, 2006              23,987,967     269,061,875     293,049,842

  Additions to goodwill:

    Bookstore acquisitions           18,556,522               -      18,556,522
                                  -------------- --------------- ---------------
Balance, March 31, 2007            $ 42,544,489   $ 269,061,875   $ 311,606,364
                                  ============== =============== ===============

     Goodwill assigned to corporate administration represents goodwill arising
out of the March 4, 2004 Transaction, as all goodwill was assigned to corporate
administration. As is the case with a portion of the Company's assets, such
goodwill is not allocated between the Company's reportable segments when
management makes operating decisions and assesses performance. Such goodwill is
allocated to the Company's reporting units for purposes of testing goodwill for
impairment and calculating any gain or loss on the disposal of all or a portion
of a reporting unit.

                                       46
<PAGE>

    The following table presents the gross carrying amount and accumulated
amortization of identifiable intangibles subject to amortization, in total and
by asset class, as of March 31, 2007 and 2006:

                                                   March 31, 2007
                                    --------------------------------------------
                                       Gross                           Net
                                      Carrying      Accumulated     Carrying
                                       Amount      Amortization      Amount
                                    -------------- -------------- --------------
 Customer relationships             $ 114,830,000  $ (17,702,620) $  97,127,380
 Developed technology                  12,179,273     (5,908,519)     6,270,754
 Covenants not to compete               5,794,584     (2,357,767)     3,436,817
 Contract-managed acquisition costs     2,264,100       (594,335)     1,669,765
                                    -------------- -------------- --------------
                                    $ 135,067,957  $ (26,563,241) $ 108,504,716
                                    ============== ============== ==============

                                                   March 31, 2006
                                    --------------------------------------------
                                       Gross                           Net
                                      Carrying      Accumulated     Carrying
                                       Amount      Amortization      Amount
                                    -------------- -------------- --------------
 Customer relationships             $ 114,830,000  $ (11,961,100) $ 102,868,900
 Developed technology                  11,473,750     (3,983,689)     7,490,061
 Covenants not to compete               5,221,000     (1,607,333)     3,613,667
 Contract-managed acquisition costs       282,292        (96,414)       185,878
                                    -------------- -------------- --------------
                                    $ 131,807,042  $ (17,648,536) $ 114,158,506
                                    ============== ============== ==============

    Information regarding aggregate amortization expense for the fiscal years
ended March 31, 2007, 2006, and 2005 for identifiable intangibles subject to
amortization, along with estimated aggregate amortization expense for each of
the next five fiscal years, is presented in the following table:

                                                     Amortization
                                                        Expense
                                                     --------------

Fiscal year ended March 31, 2007                      $ 9,613,598
Fiscal year ended March 31, 2006                        8,762,398
Fiscal year ended March 31, 2005                        8,258,500

Estimated amortization expense for the
fiscal years ending March 31:
  2008                                                $ 9,595,000
  2009                                                  9,246,000
  2010                                                  8,421,000
  2011                                                  6,128,000
  2012                                                  6,015,000

    Identifiable intangibles not subject to amortization consist solely of the
tradename asset arising out of the March 4, 2004 Transaction and total
$31,320,000.

                                       47
<PAGE>

G.  LONG-TERM DEBT

    Details regarding each of the instruments of indebtedness of the Company are
provided in the following table:

<TABLE>
<CAPTION>
                                                                                            March 31,
                                                                                  -----------------------------
                                                                                       2007           2006
                                                                                  -------------- --------------
<S>                                                                               <C>            <C>
Term Loan due March 4, 2011, principal and interest payments due quarterly,
interest accrues at a floating rate based on Eurodollar rate plus an applicable
margin percent (7.88% and 6.70% at March 31, 2007 and 2006, respectively)          $197,021,472   $176,400,000

Senior Subordinated Notes, unsecured, principal due on March 15, 2012, interest
payments accrue at a fixed rate of 8.625% and are payable semi-annually on
March 15 and September 15 beginning September 15, 2004                              175,000,000    175,000,000

Mortgage note payable with an insurance company assumed with the acquisition of
a bookstore facility, due December 1, 2013, monthly payments of $6,446 including
interest at 10.75%                                                                      370,213        402,857
                                                                                  -------------- --------------
                                                                                    372,391,685    351,802,857

Less current maturities of long-term debt                                            (1,957,854)    (3,206,582)
                                                                                  -------------- --------------
Long-term debt                                                                     $370,433,831   $348,596,275
                                                                                  ============== ==============
</TABLE>

    Indebtedness at March 31, 2007 includes an amended and restated
bank-administered senior credit facility (the "Senior Credit Facility") provided
to the Company through a syndicate of lenders, consisting of a $204.0 million
term loan (the "Term Loan", which includes both the original March 4, 2004 loan
of $180.0 million and the April 26, 2006 incremental loan of $24.0 million) and
an $85.0 million revolving credit facility (the "Revolving Credit Facility");
$175.0 million of 8.625% senior subordinated notes (the "Senior Subordinated
Notes"), and capital leases. The Revolving Credit Facility expires on March 4,
2009. Availability under the Revolving Credit Facility is determined by the
calculation of a borrowing base, which at any time is equal to a percentage of
eligible accounts receivable and inventory, up to a maximum of $85.0 million.
The calculated borrowing base at March 31, 2007 was approximately $48.3 million.
The Revolving Credit Facility was unused at March 31, 2007.

    The interest rate on the Senior Credit Facility Term Loan is prime plus an
applicable margin of up to 1.5% or, on Eurodollar borrowings, the Eurodollar
interest rate plus an applicable margin of up to 2.5%. The Revolving Credit
Facility interest rate is prime plus an applicable margin of up to 1.75% or, on
Eurodollar borrowings, the Eurodollar interest rate plus an applicable margin of
up to 2.75%. Additionally, there is a 0.5% commitment fee for the average daily
unused amount of the Revolving Credit Facility. The average borrowings under the
Revolving Credit Facility for the fiscal years ended March 31, 2007 and 2006
were approximately $15.7 million and $7.0 million at an average rate of 9.2% and
7.8%, respectively.

    The Senior Credit Facility is collateralized by substantially all of the
assets of the Company and NBC. Additionally, NBC has guaranteed the prompt and
complete payment and performance of the Company's obligations under the Senior
Credit Facility. The Senior Credit Facility also stipulates that excess cash
flows as defined in the credit agreement dated February 13, 1998 (the "Credit
Agreement"), as most recently amended on March 30, 2007 and most recently
restated on March 4, 2004, shall be applied towards prepayment of the Term Loan.
There is no excess cash flow obligation for the fiscal year ended March 31,
2007. The estimated excess cash flow payment for fiscal year 2006 of $1.7
million included in "current maturities of long-term debt" in the consolidated
balance sheet as of March 31, 2006 was paid on September 29, 2006.

    The Senior Credit Facility requires the Company to maintain certain
financial ratios and contains a number of other covenants that among other
things, restrict the ability to incur additional indebtedness, dispose of
assets, make capital expenditures, make loans or advances and pay dividends,
except that, among other things, the Company may pay dividends to NBC (i) in an
amount not to exceed the amount of interest required to be paid on the Senior
Discount Notes and (ii) to pay corporate overhead expenses not to exceed
$250,000 per year and any taxes owed by NBC. The Company was compliant with such
covenants at March 31, 2007.

                                       48
<PAGE>

    The Senior Subordinated Notes pay cash interest semi-annually and mature on
March 15, 2012. The indenture governing the Senior Subordinated Notes restricts
the ability of the Company and its restricted subsidiaries (as defined in the
indenture) to pay dividends or make other restricted payments (as defined in the
indenture) to their respective stockholders, subject to certain exceptions,
unless certain conditions are met, including that (i) no default under the
indenture shall have occurred and be continuing, (ii) the Company shall be
permitted by the indenture to incur additional indebtedness and (iii) the amount
of the dividend or payment may not exceed a certain amount based on, among other
things, the Company's consolidated net income.

    Effective March 30, 2007, certain amendments were made to the Credit
Agreement to, among other things, increase the Revolving Credit Facility from
$65.0 million to $85.0 million and modify the definition of EBITDA to exclude
certain one time charges recorded in fiscal year 2007 for purposes of the debt
covenant calculations. The additional availability of borrowings under the
Revolving Credit Facility will allow for the continued pursuit of opportunities
to expand the Company's chain of bookstores across the country. The
modifications to the Credit Agreement resulted in the payment of $0.2 million in
costs associated with such modifications, which were capitalized as debt issue
costs to be amortized to interest expense over the remaining life of the
Revolving Credit Facility.

    Effective April 26, 2006, certain amendments were made to the Credit
Agreement to allow for the acquisition of CBA, including adding an incremental
$24.0 million of borrowings under the Term Loan, increasing amounts available
under the Revolving Credit Facility from $50.0 million to $65.0 million, and
amending certain restrictions and financial covenants. The additional Term Loan
borrowings were utilized to help finance the purchase of all of CBA's
outstanding stock, repay CBA's outstanding long-term bank indebtedness, and
provide funding for the payment of transaction costs and other liabilities
associated with the acquisition. CBA's long-term bank indebtedness, revolving
credit facility balance, and the corresponding accrued interest repaid on May 1,
2006 totaled $14.4 million. The modifications to the Credit Agreement resulted
in the payment of $0.8 million in costs associated with such modifications,
which were capitalized as debt issue costs to be amortized to interest expense
over the remaining life of the debt instruments.

    At March 31, 2007, the aggregate maturities of long-term debt for the next
five fiscal years were as follows:

 Fiscal
  Year
---------

  2008     $  1,957,854
  2009        2,070,657
  2010        2,075,616
  2011      191,104,012
  2012      175,060,548

H.  LEASES AND OTHER COMMITMENTS

    In conjunction with two bookstores acquired in June of 2001, one bookstore
acquired in March of 2003, one bookstore acquired in April of 2004 and two
bookstores acquired in November of 2006, the Company entered into bookstore
facility leases that qualified as capital leases. Such leases expire at various
dates through fiscal year 2014 and contain options to renew for periods of up to
ten years. Capitalized leased property included in property and equipment was
approximately $2.6 million at March 31, 2007, net of accumulated depreciation.

    The Company leases bookstore facilities and data processing equipment under
noncancelable operating leases expiring at various dates through fiscal year
2018, many of which contain options to renew for periods of up to ten years.
Certain of the leases are based on a percentage of sales, ranging from 0.0% to
13.0%.

                                       49
<PAGE>

    Future minimum capital lease payments and aggregate minimum lease payments
under noncancelable operating leases for the fiscal years ending March 31 are as
follows:

                                               Capital      Operating
Fiscal Year                                     Leases        Leases
                                             ------------- -------------
2008                                          $  772,457   $ 16,523,000
2009                                             839,386     12,725,000
2010                                             852,877     10,017,000
2011                                             862,915      7,512,000
2012                                             443,607      5,429,000
Thereafter                                       307,718      9,456,000
                                             ------------- -------------
Total minimum lease payments                   4,078,960   $ 61,662,000
                                                           =============
Less amount representing interest at 10.2%      (883,877)
                                             -------------
Present value of minimum lease payments        3,195,083
Less obligations due within one year            (490,815)
                                             -------------
Long-term obligations                         $2,704,268
                                             =============

    Total rent expense for the fiscal years ended March 31, 2007, 2006, and 2005
was approximately $26.5 million, $17.1 million, and $15.2 million, respectively.
Percentage rent expense for the fiscal years ended March 31, 2007, 2006, and
2005 was approximately $13.0 million, $4.6 million, and $4.0 million,
respectively.

I.  DERIVATIVE FINANCIAL INSTRUMENTS

    SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES,
as amended, requires that all derivative instruments be recorded in the balance
sheet at fair value. Changes in the fair value of derivatives are recorded in
earnings or other comprehensive income (loss), based on whether the instrument
is designated as part of a hedge transaction and, if so, the type of hedge
transaction. The Company utilizes derivative financial instruments to manage the
risk that changes in interest rates will affect the amount of its future
interest payments on its variable rate debt.

    The Company's primary market risk exposure is, and is expected to continue
to be, fluctuation in variable interest rates. As provided in the Senior Credit
Facility, exposure to interest rate fluctuations is managed by maintaining fixed
interest rate debt (primarily the Senior Subordinated Notes) and by entering
into interest rate swap agreements that qualify as cash flow hedging instruments
to convert certain variable rate debt into fixed rate debt. The Company has a
three-year amortizing interest rate swap agreement whereby a portion of the
variable rate Term Loan is converted into debt with a fixed rate of 6.844%
(4.344% plus an applicable margin as defined in the Credit Agreement). This
agreement expires on September 30, 2008. Notional amounts under the agreement
are reduced periodically. General information regarding the Company's exposure
to fluctuations in variable interest rates is presented in the following table:

                                                         March 31,
                                                    2007           2006
                                               -------------- --------------

Total indebtedness outstanding                 $ 375,586,768  $ 354,309,145

Term Loan subject to Eurodollar fluctuations     197,021,472    176,400,000

Notional amount under swap agreement             140,000,000    165,000,000

Fixed interest rate indebtedness                 178,565,296    177,909,145

Variable interest rate,
including applicable margin:
  Term Loan                                            7.88%          6.70%

     Effective September 30, 2005, the interest rate swap agreement qualified as
a cash flow hedge instrument as the following criteria were met:

     (1)  Formal documentation of the hedging relationship and the Company's
          risk management objective and strategy for undertaking the hedge were
          in place.

                                       50
<PAGE>

     (2)  The interest rate swap agreement is expected to be highly effective in
          offsetting the change in the value of the hedged portion of the
          interest payments attributable to the Term Loan.

    The Company estimates the effectiveness of the interest rate swap agreement
utilizing the hypothetical derivative method. Under this method, the fair value
of the actual interest rate swap agreement is compared to the fair value of a
hypothetical swap agreement that has the same critical terms as the portion of
the Term Loan being hedged. The critical terms of the interest rate swap
agreement are identical to the portion of the Term Loan being hedged as of March
31, 2007. To the extent that the agreement is not considered to be highly
effective in offsetting the change in the value of the interest payments being
hedged, the fair value relating to the ineffective portion of such agreement and
any subsequent changes in such fair value will be immediately recognized in
earnings as "gain or loss on derivative financial instruments". To the extent
that the agreement is considered highly effective but not completely effective
in offsetting the change in the value of the interest payments being hedged, any
changes in fair value relating to the ineffective portion of such agreement will
be immediately recognized in earnings as "interest expense".

    Under hedge accounting, interest rate swap agreements are reflected at fair
value in the balance sheet and the related gains or losses on these agreements
are generally recorded in stockholders' equity, net of applicable income taxes
(as "accumulated other comprehensive income (loss)"). Gains or losses recorded
in accumulated other comprehensive income (loss) are reclassified into earnings
as an adjustment to interest expense in the same periods in which the related
interest payments being hedged are recognized in earnings. Except as described
below, the net effect of this accounting on the Company's consolidated results
of operations will be that interest expense on a portion of the Term Loan is
generally being recorded based on fixed interest rates until the interest rate
swap agreement expires on September 30, 2008.

    In accordance with the Company's Risk Management Policy, the current
interest rate swap agreement was intended as a hedge against certain future
interest payments under the Term Loan from the agreement's inception on July 15,
2005. However, formal documentation designating the interest rate swap agreement
as a hedge against certain future interest payments under the Term Loan was not
put in place until September 30, 2005 (the effective date of the interest rate
swap agreement). As a result, the interest rate swap agreement did not qualify
as a cash flow hedge until September 30, 2005. Accordingly, the $0.7 million
increase in the fair value of the interest rate swap agreement from inception to
September 30, 2005 was recognized in earnings as a "gain on derivative financial
instruments". Changes in the fair value of this portion of the interest rate
swap agreement are also recognized as a "gain (loss) on derivative financial
instruments" in the consolidated statements of operations. Subsequent to
September 30, 2005, the change in fair value of a September 30, 2005
hypothetical swap is recorded, net of income taxes, in "accumulated other
comprehensive income" in the consolidated balance sheets. Changes in the fair
value of the interest rate swap agreement are reflected in the consolidated
statements of cash flows as either "gain (loss) on derivative financial
instruments" or as "noncash investing and financing activities".

    Information regarding the fair value of the interest rate swap agreement
designated as a hedging instrument is presented in the following table:

                                                        Fiscal Year  Fiscal Year
                                                           Ended        Ended
                                                         March 31,    March 31,
                                                           2007         2006
                                                       ------------ ------------
Balance Sheet Components:
  Other assets - fair value of swap agreement          $ 1,301,000  $ 2,833,000
  Deferred income taxes                                   (503,975)  (1,097,433)
                                                       ------------ ------------
                                                       $   797,025  $ 1,735,567
                                                       ============ ============

Portion of Agreement Subsequent to September 30, 2005
Hedge Designation:
  Increase (decrease) in fair value of swap agreement  $(1,307,000) $ 2,308,000

Portion of Agreement Prior to September 30, 2005
Hedge Designation:
  Increase (decrease) in fair value of swap agreement     (225,000)     525,000

                                       51
<PAGE>

J.  INCOME TAXES

    The provision (benefit) for income taxes consists of:

                     Fiscal Year    Fiscal Year    Fiscal Year
                        Ended         Ended           Ended
                      March 31,      March 31,      March 31,
                        2007           2006           2005
                  --------------- -------------- ---------------
Current:
  Federal          $  8,964,579    $ 7,715,245    $ 8,211,213
  State               1,439,632        (27,679)     2,084,662
Deferred             (2,148,119)         3,539     (1,133,757)
                  --------------- -------------- ---------------
                   $  8,256,092    $ 7,691,105    $ 9,162,118
                  =============== ============== ===============

    The state income tax benefit for the fiscal year ended March 31, 2006 is
attributable to lower state income taxes due in part to the results of the
incorporation of NBC Textbooks LLC on January 1, 2005 and refunds of prior
fiscal year taxes paid arising out of certain amended state income tax returns.

    The following represents a reconciliation between the actual income tax
expense and income taxes computed by applying the Federal income tax rate to
income before income taxes:

                                 Fiscal Year   Fiscal Year   Fiscal Year
                                    Ended         Ended         Ended
                                  March 31,      March 31,     March 31,
                                    2007           2006          2005
                               -------------- ------------- -------------
Statutory rate                      35.0%          35.0%         35.0%
State income tax effect              3.8            3.8           4.6
Meals and entertainment              0.8            0.8           0.6
Other                                 -            (1.0)          0.3
                               -------------- ------------- -------------
                                    39.6%          38.6%         40.5%
                               ============== ============= =============

    The components of the deferred tax assets (liabilities) consist of the
following:
                                                     March 31,
                                                2007           2006
                                           -------------- --------------
Deferred income tax assets (liabilities),
current:
  Vacation accruals                        $    893,582    $    668,424
  Inventories                                   547,979         702,364
  Allowance for doubtful accounts               426,252         197,886
  Product returns                             1,033,719         990,620
  Incentive programs                          2,672,741       2,900,511
  Other                                        (313,159)       (276,803)
                                           -------------- --------------
                                              5,261,114       5,183,002
                                           -------------- --------------
Deferred income tax assets
(liabilities), noncurrent:
  Deferred compensation agreements              123,140         121,831
  Goodwill amortization                      (4,874,676)     (3,335,240)
  Covenants not to compete                      933,564         637,317
  Identifiable intangibles                  (52,111,204)    (54,651,214)
  Property and equipment                     (1,593,541)     (2,144,115)
  Interest rate swap agreement                 (503,975)     (1,097,433)
  Other                                        (585,426)        202,127
                                           -------------- --------------
                                            (58,612,118)    (60,266,727)
                                           -------------- --------------
                                           $(53,351,004)   $(55,083,725)
                                           ============== ==============

                                       52
<PAGE>

K.  RETIREMENT PLANS

    The Company participates in and sponsors a 401(k) compensation deferral
plan. The plan covers substantially all employees. The plan provisions include
employee contributions based on a percentage of compensation along with a
Company contribution in addition to a limited matching feature. The Company's
contributions for the fiscal years ended March 31, 2007, 2006, and 2005 were
$2.0 million, $1.4 million, and $1.2 million, respectively.

    When the Company acquired CBA on May 1, 2006, CBA had an Employee Stock
Ownership Plan (the "Plan"). The Company acquired all the issued and outstanding
shares of CBA stock owned by the Plan. The Plan was frozen and converted to a
profit sharing plan pending receipt of a favorable determination letter from the
Internal Revenue Service that the Plan termination will not adversely affect the
Plan's tax qualified status. The Plan continues to be administered as a
qualified plan. There have been no contributions to the Plan since May 1, 2006,
and there will be no future contributions to this Plan. Upon receipt of the
determination letter, partial distributions of Plan assets will begin with final
distribution expected to occur in January of 2011. The Plan assets, which are
not included in the Company's consolidated financial statements, have been
invested by the trustee, primarily in fixed income investments.

L. DEFERRED COMPENSATION

    The Company has a non-qualified deferred compensation plan for selected
employees. This plan allows participants to voluntarily elect to defer portions
of their current compensation. The amounts can be distributed upon either death
or voluntary/involuntary resignation or termination. Interest is accrued at the
prime rate adjusted semi-annually on January 1 and July 1 and is compounded as
of March 31. The liability for the deferred compensation is included in other
long-term liabilities and approximated $0.3 million as of March 31, 2007 and
2006.

M.  SHARE-BASED COMPENSATION

     In conjunction with the March 4, 2004 Transaction, NBC Holdings Corp.
established the 2004 Stock Option Plan. On September 29, 2005, NBC Holdings
Corp. adopted the NBC Holdings Corp. 2005 Restricted Stock Plan to provide for
the sale of NBC Holdings Corp. capital stock to certain officers and directors
of the Company. Details regarding each of the plans are as follows:

    2004 STOCK OPTION PLAN - This plan, established by NBC Holdings Corp.,
provides for the granting of options to purchase 81,306 shares of NBC Holdings
Corp. capital stock to selected employees, officers, and employee directors of
NBC and its affiliates. Additional shares may be issued upon changes in the
capitalization of NBC and upon approval of a committee designated by NBC's Board
of Directors ("the Committee"). All options granted are intended to be
nonqualified stock options, although the plan also provides for incentive stock
options. This plan provides for the granting of options at the discretion of the
Committee. Vesting schedules of options may vary and are determined at the time
of grant by the Committee. Subject to certain exceptions, stock options granted
under this plan are to be granted at an exercise price of not less than fair
market value on the date the options are granted and expire ten years from the
date of grant. At March 31, 2007, there were 4,917 options available for grant
under this plan.

    No share-based compensation expense was recognized at the time of grant for
the options granted to employees in the fiscal years ended March 31, 2006 and
2005, as the exercise price was greater than or equal to the estimated fair
value (including a discount for the holder's minority interest position and
illiquidity of NBC Holdings Corp.'s capital stock) of NBC Holdings Corp.'s
capital stock on the date of grant.


                                       53
<PAGE>

    A summary of the Company's share-based compensation activity related to
stock options for the 2004 Stock Option Plan for the fiscal year ended March 31,
2007 is as follows:

                                         Fiscal Year Ended
                                             March 31,
                                               2007
                                        -------------------
                                                   Weighted-
                                                   Average
                                                   Exercise
                                           Number    Price
                                          -------- ----------

2004 Stock Option Plan:
   Outstanding - beginning of period       75,749   $ 111.83
   Granted                                      -          -
   Expired/terminated                           -          -
   Exercised                                    -          -
                                          -------- ----------
   Outstanding - end of period             75,749   $ 111.83
                                          ======== ==========
   Vested or expected to vest              75,749   $ 111.83
                                          ======== ==========



                                      2004 Stock Option Plan
                             -------------------------------------------
                                  Outstanding           Exercisable
                             ---------------------- --------------------
                                        Weighted-            Weighted-
                                         Average              Average
                                        Remaining            Remaining
                                        Contractual          Contractual
                               Number   Term (Yrs)   Number  Term (Yrs)
                             ---------- ----------- -------- -----------
March 31, 2007:
  Exercise price of $52.47      26,628         6.9   26,628         6.9
  Exercise price of $106        11,760         6.9   11,760         6.9
  Exercise price of $146        10,750         6.9   10,750         6.9
  Exercise price of $160        26,611         8.1   16,458         8.0
                             ---------- ----------- -------- -----------
                                75,749         7.3   65,596         7.2
                             ========== =========== ======== ===========

    2005 RESTRICTED STOCK PLAN - This plan provides for the issuance of shares
of restricted stock for consideration to individuals determined by NBC Holdings
Corp.'s Board of Directors. Any shares issued under the plan are subject to
restrictions on transferability and a right of NBC Holdings Corp. to reacquire
such shares at less than their then fair market value under certain conditions.

    On March 31, 2006, 4,200 shares of NBC Holdings Corp. capital stock were
issued for $0.01 per share to each of three officers and directors of the
Company (the "Officers") pursuant to a Restricted Stock Purchase Agreement (the
"RSPA"). The Officers are party to the Stockholders Agreement, dated March 4,
2004, by and among NBC Holdings Corp. and the Stockholders of NBC Holdings Corp.
named therein, the provisions of which restrict the transfer of such shares and
provide for certain other rights as detailed therein. The shares granted to the
Officers are also each subject to a Stock Repurchase Agreement (the "SRA") that,
among other things, provides for vesting, certain call rights on behalf of NBC
Holdings Corp., and certain put rights on behalf of the applicable Officer.

    The vesting provisions in each SRA provide that if the Officer is still
employed by NBC Holdings Corp., the shares granted vest on September 30, 2010
(the "Vesting Date"). If the Officer is not employed by NBC Holdings Corp. on
that date the shares do not vest except under certain conditions related to
termination of his employment without "cause" (as defined in the SRA) or due to
his death or disability. If the Officer is terminated without cause prior to the
Vesting Date, the shares vest based upon a formula determined by the number of
days from March 31, 2006 to the date of termination as a percentage of the
number of days from March 31, 2006 to the Vesting Date. If a termination without
cause before the Vesting Date follows a Change of Control (as defined in the
SRA), all of the Officer's shares become immediately vested.

                                       54
<PAGE>

    The call rights provide NBC Holdings Corp. the right to reacquire each
Officer's unvested shares upon the occurrence of certain events, including
events under its control, for an aggregate purchase price of $1.00. If the
Officer remains employed by the Company until the Vesting Date or is terminated
without cause prior to such date, NBC Holdings Corp. has the right but not the
obligation to call the vested shares at fair market value (minus any dividends
or distributions paid in respect of such shares) subject to certain adjustments
and any restrictions or limitations in the Company's debt covenants and the
Company's Credit Agreement. The call rights expire 30 days after the Vesting
Date.

    The put rights enable the Officer to require NBC Holdings Corp. to
repurchase all vested shares following the Vesting Date at the lesser of fair
market value or effectively $1.0 million for such Officer's 1,400 shares,
subject to certain adjustments and any restrictions or limitations in the
Company's debt covenants and the Company's Credit Agreement. The put rights
expire 90 days after the Vesting Date. The SRA also provides that NBC Holdings
Corp. will pay a cash bonus to the Officer related to any vested shares that are
repurchased in connection with the put. This bonus is intended to reimburse the
Officer for any federal, state and local taxes related to the repurchase and to
this cash bonus itself. The bonus will not be paid if such payment is restricted
or limited by the Company's debt covenants or the Company's Credit Agreement.

    In connection with the NBC Holdings Corp. 2005 Restricted Stock Plan, the
Company also entered into a Restricted Stock Special Bonus Agreement (the "SBA")
with each Officer. Each SBA provides for the payment of a cash bonus to the
Officer within 30 days following the Vesting Date based upon certain criteria
(the "Special Bonus"). If the Officer is still employed by the Company on that
date, or has been terminated without "cause" (as defined in the SBA) following a
Change of Control (as defined in the SBA) prior to that date, the amount is
calculated as effectively $1.0 million less the fair market value of his
restricted stock, subject to certain adjustments. If, prior to the Vesting Date,
the Officer has been terminated without cause prior to a Change in Control, the
amount of the Special Bonus is adjusted based on the number of days from March
31, 2006 to the date of termination as a percentage of the number of days from
March 31, 2006 to the Vesting Date, subject to certain adjustments. In either
case, the Special Bonus will not be paid if such payment is restricted or
limited by the Company's debt covenants or the Company's Credit Agreement. The
SBA also provides that in the event of payment of the Special Bonus, the Company
will pay an additional cash bonus to the Officer in an amount sufficient to
reimburse the Officer for any federal, state and local taxes related to the
Special Bonus and this additional bonus itself.

    The combination of the NBC Holdings Corp. 2005 Restricted Stock Plan, the
RSPA, the SRA and the SBA is intended to provide a minimum compensation benefit
of $1.0 million to each of the Officers assuming that they remain employed by
the Company through September 30, 2010 - all subject to certain adjustments and
conditions related to the Company's debt covenants and the Company's Credit
Agreement - as described above.

    Due to the put rights on behalf of the Officers, share-based compensation
will be remeasured at the end of each reporting period and accrued to a minimum
of $3.0 million plus anticipated cash bonuses to be paid to reimburse the
Officers for any federal, state and local taxes thereon from the date of
issuance of the restricted stock until September 30, 2010 and recorded as "other
long-term liabilities" in the consolidated balance sheets. At March 31, 2007,
this liability totaled $1.0 million.

    During fiscal year 2006, the Company also accrued $0.5 million for bonuses
intended to reimburse the Officers for the federal, state and local taxes
related to the issuance of the 4,200 shares at $0.01 per share and this cash
bonus.

N.  SEGMENT INFORMATION

    The Company's operating segments are determined based on the way that
management organizes the segments for making operating decisions and assessing
performance. Management has organized the Company's operating segments based
upon differences in products and services provided. The Company has three
operating segments: Bookstore Division, Textbook Division, and Complementary
Services Division. The Bookstore and Textbook Divisions qualify as reportable
operating segments, while separate disclosure of the Complementary Services
Division is provided as management believes that information about this
operating segment is useful to the readers of the Company's consolidated
financial statements. The Bookstore Division segment encompasses the operating
activities of the Company's college bookstores located on or adjacent to college
campuses. The Textbook Division segment consists primarily of selling used
textbooks to college bookstores, buying them back from students or college
bookstores at the end of each college semester and then reselling them to
college bookstores. The Complementary Services Division segment includes
book-related services such as distance education materials, computer hardware
and software, E-commerce technology, and a centralized buying service.

    The Company primarily accounts for intersegment sales as if the sales were
to third parties (at current market prices). Certain assets, net interest
expense and taxes (excluding interest and taxes incurred by the Company's
wholly-owned subsidiaries, NBC Textbooks LLC, CBA, and Specialty Books, Inc.)
are not allocated between the Company's segments; instead, such balances are
accounted for in a corporate administrative division.


                                       55
<PAGE>

    EBITDA is the measure of segment profit or loss utilized by the Chief
Executive Officer (chief operating decision maker) in making decisions about
resources to be allocated to operating segments and assessing operating segment
performance.

    The following table provides selected information about profit or loss
(excluding the impact of the Company's interdivisional administrative fee - see
Note Q, Condensed Consolidating Financial Information, to the consolidated
financial statements) and assets on a segment basis for the fiscal years ended
March 31, 2007, 2006, and 2005, respectively:
<TABLE>
<CAPTION>
                                                                            Complementary
                                                   Bookstore     Textbook     Services
                                                   Division      Division     Division       Total
                                                 ------------  ------------ ------------ -------------
<S>                                             <C>           <C>           <C>          <C>
Fiscal year ended March 31, 2007:
  External customer revenues                    $ 417,112,526 $ 100,486,178 $ 26,829,260 $ 544,427,964
  Intersegment revenues                             1,364,087    35,312,214    5,386,046    42,062,347
  Depreciation and amortization expense             6,395,788     6,077,021    2,570,654    15,043,463
  Earnings before interest, taxes, depreciation,
  and amortization (EBITDA)                        44,511,202    32,210,010    2,716,144    79,437,356
  Total assets                                    164,948,074   145,870,214   24,616,067   335,434,355

Fiscal year ended March 31, 2006:
  External customer revenues                    $ 290,690,410 $ 106,368,601 $ 23,048,888 $ 420,107,899
  Intersegment revenues                             1,419,670    26,187,339    3,632,976    31,239,985
  Depreciation and amortization expense             4,549,556     6,059,222    2,629,303    13,238,081
  Earnings before interest, taxes, depreciation,
  and amortization (EBITDA)                        36,056,380    31,938,743    1,220,529    69,215,652
  Total assets                                    102,688,796   151,703,016   22,991,336   277,383,148

Fiscal year ended March 31, 2005:
  External customer revenues                    $ 262,282,432 $ 109,084,564 $ 30,787,344 $ 402,154,340
  Intersegment revenues                             1,385,319    24,853,911    2,980,096    29,219,326
  Depreciation and amortization expense             4,115,988     5,813,681    2,746,146    12,675,815
  Earnings before interest, taxes, depreciation,
  and amortization (EBITDA)                        34,607,848    32,181,393    1,805,367    68,594,608
  Total assets                                     86,754,851   155,867,124   26,120,562   268,742,537
</TABLE>

                                       56
<PAGE>

    The following table reconciles segment information presented above with
consolidated information as presented in the Company's consolidated financial
statements for the fiscal years ended March 31, 2007, 2006 and 2005,
respectively:
<TABLE>
<CAPTION>

                                              Fiscal Year   Fiscal Year   Fiscal Year
                                                 Ended         Ended         Ended
                                               March 31,      March 31,    March 31,
                                                 2007           2006          2005
                                            -------------- -------------- -------------
<S>                                         <C>            <C>            <C>
Revenues:
  Total for reportable segments             $ 586,490,311  $ 451,347,884  $ 431,373,666
  Elimination of intersegment revenues        (42,062,347)   (31,239,985)   (29,219,326)
                                            -------------- -------------- -------------
    Consolidated total                      $ 544,427,964  $ 420,107,899  $ 402,154,340
                                            ============== ============== =============

Depreciation and Amortization Expense:
  Total for reportable segments             $  15,043,463  $  13,238,081  $  12,675,815
  Corporate administration                        485,893        437,048        490,528
                                            -------------- -------------- -------------
    Consolidated total                      $  15,529,356  $  13,675,129  $  13,166,343
                                            ============== ============== =============

Income Before Income Taxes:
  Total EBITDA for reportable segments      $  79,437,356  $  69,215,652  $  68,594,608
  Corporate administrative costs              (11,323,483)    (8,012,619)    (7,591,429)
                                            -------------- -------------- -------------
                                               68,113,873     61,203,033     61,003,179
  Depreciation and amortization               (15,529,356)   (13,675,129)   (13,166,343)
                                            -------------- -------------- -------------
    Consolidated income from operations        52,584,517     47,527,904     47,836,836
  Interest and other expense, net             (31,716,939)   (27,595,306)   (25,214,694)
                                            -------------- -------------- -------------
    Consolidated income before income taxes $  20,867,578  $  19,932,598  $  22,622,142
                                            ============== ============== =============

                                                    Fiscal Year Ended March 31,
                                                 2007           2006           2005
                                            -------------- -------------- -------------
Total Assets:
  Total for reportable segments             $ 335,434,355  $ 277,383,148  $ 268,742,537
  Assets not allocated to segments:
    Cash and cash equivalents                  20,180,524     26,806,386     25,529,299
    Receivables                                13,985,140     13,868,221     10,133,799
    Recoverable income taxes                            -      1,438,819              -
    Deferred income taxes                       1,290,113      1,102,002      1,013,182
    Prepaid expenses and other assets           1,791,710      1,559,788        585,409
    Property and equipment, net                12,453,302     11,664,269     11,394,329
    Goodwill                                  269,061,875    269,061,875    269,061,875
    Debt issue costs, net                       6,939,046      7,697,227      8,968,851
    Identifiable intangibles, net              31,968,596     31,320,000     31,320,000
    Other assets                                2,382,931      3,444,595        490,001
                                            -------------- -------------- -------------
      Consolidated total                    $ 695,487,592  $ 645,346,330  $ 627,239,282
                                            ============== ============== =============
</TABLE>

    The Company's revenues are attributed to countries based on the location of
the customer. Substantially all revenues generated are attributable to customers
located within the United States.

O.  RELATED PARTY TRANSACTIONS

    In accordance with the Company's debt covenants, in fiscal year 2005, the
Company declared and paid $0.1 million in dividends to NBC for costs associated
with the March 4, 2004 Transaction.


                                       57
<PAGE>

P. CLOSURE OF CALIFORNIA WAREHOUSE

    On August 9, 2006, in response to a review of the efficiency and
effectiveness of its warehouses, the Company announced plans to close its
warehouse facility located in Cypress, California and eliminate 33 positions.
The facility closed effective October 27, 2006, and these positions were
eliminated at that time. A group of 17 other employees were offered, and 16
employees accepted, positions to remain with the Company as Account Service
Representatives, continuing to service the Company's customers. Details
regarding the warehouse closure and its impact on the Textbook Division are
outlined in the following table:
<TABLE>
<CAPTION>
                                       Fiscal Year
                                         Ended        Cumulative     Total
                                        March 31,       Costs      Expected
                                         2007 (1)      Incurred      Costs
                                      ------------ -------------- ------------
<S>                                     <C>            <C>          <C>            <C>          <C>
Costs of Closure:
  One-time termination benefits         $ 473,000      $ 473,000    $ 473,000

  Costs to terminate contracts            189,000        189,000      189,000

  Costs of consolidation/relocation       112,475        112,475      112,475
                                      ------------ -------------- ------------
                                        $ 774,475      $ 774,475    $ 774,475
                                      ============ ============== ============

                                        Balance,   Costs Incurred                                Balance,
                                        April 1,    and Charged      Costs                      March 31,
                                          2006       to Expense   Paid/Settled  Adjustments (2)  2007 (1)
                                      ------------ -------------- ------------ ---------------- ----------
Liability Reconciliation:
  One-time termination benefits         $       -      $ 473,000   $ (232,840)     $        -    $ 240,160

  Costs to terminate contracts                  -        372,000     (189,000)       (183,000)           -

  Costs of consolidation/relocation             -        112,475     (112,475)              -            -
                                      ------------ -------------- ------------ ---------------- ----------
                                        $       -      $ 957,475   $ (534,315)     $ (183,000)   $ 240,160
                                      ============ ============== ============ ================ ==========
</TABLE>

     (1)  One-time termination benefits, costs to terminate a contract, and
          costs of consolidation/relocation are included in "accounts payable"
          in the consolidated balance sheets until paid. In the consolidated
          statements of operations, such costs are separately identified as part
          of "income from operations".

     (2)  The landlord identified a new tenant for the warehouse space,
          resulting in early termination of the lease on March 31, 2007 that
          differs from original expectation at time of warehouse closing on
          October 27,2006.


Q.  CONDENSED CONSOLIDATING FINANCIAL INFORMATION

    On May 1, 2006, the Company acquired all of the outstanding stock of CBA, an
entity separately incorporated under the laws of the State of Illinois and now
accounted for as a wholly-owned subsidiary of the Company. Effective January 1,
2005, the Company's textbook division was separately formed under the laws of
the State of Delaware as NBC Textbooks LLC, a wholly-owned subsidiary of the
Company. Effective July 1, 2002, the Company's distance education business was
separately incorporated under the laws of the State of Delaware as Specialty
Books, Inc., a wholly-owned subsidiary of the Company. In connection with their
incorporation, CBA, NBC Textbooks LLC, and Specialty Books, Inc. have


                                       58
<PAGE>

unconditionally guaranteed, on a joint and several basis, full and prompt
payment and performance of the Company's obligations, liabilities, and
indebtedness arising under, out of, or in connection with the Senior
Subordinated Notes. CBA, NBC Textbooks LLC, and Specialty Books, Inc. are also a
party to the Guarantee and Collateral Agreement related to the Senior Credit
Facility. Condensed consolidating balance sheets, statements of operations, and
statements of cash flows are presented on the following pages which reflect
financial information for the parent company (Nebraska Book Company, Inc.),
subsidiary guarantors (CBA (from May 1, 2006), NBC Textbooks LLC, and Specialty
Books, Inc.), consolidating eliminations, and consolidated totals.


                                       59
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2007
-----------------------------------------------------------------------------------------------------------

                                                Nebraska
                                                  Book          Subsidiary                    Consolidated
                                               Company, Inc.    Guarantors    Eliminations       Totals
                                              --------------  -------------- --------------   -------------
<S>                                           <C>             <C>             <C>              <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                   $  28,626,228   $   4,356,648   $           -    $ 32,982,876
  Receivables                                    55,952,988      30,465,246     (31,469,164)     54,949,070
  Inventories                                    48,650,104      45,898,602               -      94,548,706
  Deferred income taxes                           1,290,113       3,971,001               -       5,261,114
  Prepaid expenses and other assets               1,778,265         215,379               -       1,993,644
                                              --------------  --------------  --------------  --------------
    Total current assets                        136,297,698      84,906,876     (31,469,164)    189,735,410

PROPERTY AND EQUIPMENT, net                      36,695,453       6,382,656               -      43,078,109

GOODWILL                                        296,070,255      15,536,109               -     311,606,364

IDENTIFIABLE INTANGIBLES, NET                    46,102,524      93,722,192               -     139,824,716

OTHER ASSETS                                    126,323,594         893,866    (115,974,467)     11,242,993
                                              --------------  --------------  --------------  --------------
                                              $ 641,489,524   $ 201,441,699   $(147,443,631)   $695,487,592
                                              ==============  ==============  ==============  ==============
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
  Accounts payable                            $  20,987,108   $  38,987,194   $ (31,469,164)   $ 28,505,138
  Accrued employee compensation and benefits     10,965,774       3,247,227               -      14,213,001
  Accrued interest                                  710,800               -               -         710,800
  Accrued incentives                                 83,641       6,899,621               -       6,983,262
  Accrued expenses                                1,994,079         340,160               -       2,334,239
  Income taxes payable                            2,613,044         640,030               -       3,253,074
  Deferred revenue                                  898,666               -               -         898,666
  Current maturities of long-term debt            1,957,854               -               -       1,957,854
  Current maturities of capital
  lease obligations                                 490,815               -               -         490,815
                                              --------------  -------------- --------------- ---------------
    Total current liabilities                    40,701,781      50,114,232     (31,469,164)     59,346,849

LONG-TERM DEBT, net of current maturities       370,433,831               -               -     370,433,831

CAPITAL LEASE OBLIGATIONS,
net of current maturities                         2,704,268               -               -       2,704,268

OTHER LONG-TERM LIABILITIES                       2,898,350          85,000               -       2,983,350

DEFERRED INCOME TAXES                            23,344,118      35,268,000               -      58,612,118

DUE TO PARENT                                    16,733,279               -               -      16,733,279

COMMITMENTS

STOCKHOLDER'S EQUITY                            184,673,897     115,974,467    (115,974,467)    184,673,897
                                              --------------  -------------- --------------- ---------------
                                              $ 641,489,524   $ 201,441,699   $(147,443,631)   $695,487,592
                                              ==============  ============== =============== ===============
</TABLE>

                                       60
<PAGE>

NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2006
--------------------------------------------------------------------------------------------------------------

                                                  Nebraska
                                                    Book         Subsidiary                     Consolidated
                                                 Company, Inc.   Guarantors     Eliminations       Totals
                                                -------------- --------------  --------------- ---------------
<S>                                              <C>            <C>            <C>              <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                      $ 29,955,367   $  3,427,355   $            -   $  33,382,722
  Receivables                                      53,512,094     17,338,425      (33,089,733)     37,760,786
  Inventories                                      44,500,121     30,378,321                -      74,878,442
  Recoverable income taxes                          1,438,819              -                -       1,438,819
  Deferred income taxes                             1,102,002      4,081,000                -       5,183,002
  Prepaid expenses and other assets                 1,559,788         74,695                -       1,634,483
                                                --------------  -------------  --------------- ---------------
    Total current assets                          132,068,191     55,299,796      (33,089,733)    154,278,254

PROPERTY AND EQUIPMENT, net                        35,394,913      4,568,000                -      39,962,913

GOODWILL                                          293,049,842              -                -     293,049,842

IDENTIFIABLE INTANGIBLES, net                      48,164,991     97,313,515                -     145,478,506

OTHER ASSETS                                       89,536,903         23,210      (76,983,298)     12,576,815
                                                --------------  -------------  --------------- ---------------
                                                 $598,214,840   $157,204,521   $ (110,073,031)  $ 645,346,330
                                                ==============  =============  =============== ===============

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
  Accounts payable                               $ 19,810,267   $ 33,089,733   $  (33,089,733)  $  19,810,267
  Accrued employee compensation and benefits        8,591,317      1,423,354                -      10,014,671
  Accrued interest                                    628,906              -                -         628,906
  Accrued incentives                                   71,891      7,487,605                -       7,559,496
  Accrued expenses                                    971,669         24,531                -         996,200
  Deferred revenue                                    714,423              -                -         714,423
  Current maturities of long-term debt              3,206,582              -                -       3,206,582
  Current maturities of capital
  lease obligations                                   281,604              -                -         281,604
                                                -------------  -------------  --------------- ---------------
    Total current liabilities                      34,276,659     42,025,223      (33,089,733)     43,212,149

LONG-TERM DEBT, net of current maturities         348,596,275              -                -     348,596,275

CAPITAL LEASE OBLIGATIONS,
net of current maturities                           2,224,684              -                -       2,224,684

OTHER LONG-TERM LIABILITIES                         1,528,533              -                -       1,528,533

DEFERRED INCOME TAXES                              22,070,727     38,196,000                -      60,266,727

DUE TO PARENT                                      16,649,682              -                -      16,649,682

COMMITMENTS

STOCKHOLDER'S EQUITY                              172,868,280     76,983,298      (76,983,298)    172,868,280
                                                --------------  -------------  --------------- ---------------
                                                 $598,214,840   $157,204,521   $ (110,073,031)  $ 645,346,330
                                                ==============  =============  =============== ===============
</TABLE>

                                       61
<PAGE>

NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2007
-------------------------------------------------------------------------------------------------------------

                                                Nebraska
                                                  Book         Subsidiary                      Consolidated
                                              Company, Inc.    Guarantors      Eliminations       Totals
                                             --------------- ---------------  --------------- ---------------
<S>                                            <C>             <C>             <C>              <C>
REVENUES, net of returns                       $344,250,733    $235,668,504    $ (35,491,273)   $544,427,964

COSTS OF SALES (exclusive of
depreciation shown below)                       215,799,510     154,760,028      (38,115,547)    332,443,991
                                             --------------- ---------------  --------------- ---------------
  Gross profit                                  128,451,223      80,908,476        2,624,274     211,983,973

OPERATING EXPENSES (INCOME):
  Selling, general and administrative            96,426,536      44,044,815        2,624,274     143,095,625
  Closure of California Warehouse                         -         774,475                -         774,475
  Depreciation                                    4,553,736       1,362,022                -       5,915,758
  Amortization                                    3,778,990       5,834,608                -       9,613,598
  Intercompany administrative fee                (3,933,600)      3,933,600                -               -
  Equity in earnings of subsidiary              (17,075,676)              -       17,075,676               -
                                             --------------- ---------------  --------------- ---------------
                                                 83,749,986      55,949,520       19,699,950     159,399,456
                                             --------------- ---------------  --------------- ---------------
INCOME FROM OPERATIONS                           44,701,237      24,958,956      (17,075,676)     52,584,517
                                             --------------- ---------------  --------------- ---------------
OTHER EXPENSES (INCOME):
  Interest expense                               33,113,297          22,240                -      33,135,537
  Interest income                                (1,593,838)        (49,760)               -      (1,643,598)
  Loss on derivative financial instruments          225,000               -                -         225,000
                                             --------------- ---------------  --------------- ---------------
                                                 31,744,459         (27,520)               -      31,716,939
                                             --------------- ---------------  --------------- ---------------

INCOME BEFORE INCOME TAXES                       12,956,778      24,986,476      (17,075,676)     20,867,578

INCOME TAX EXPENSE                                  345,292       7,910,800                -       8,256,092
                                             --------------- ---------------  --------------- ---------------
NET INCOME                                     $ 12,611,486    $ 17,075,676    $ (17,075,676)   $ 12,611,486
                                             =============== ===============  =============== ===============
</TABLE>


                                       62
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2006
--------------------------------------------------------------------------------------------------------------

                                                 Nebraska
                                                   Book         Subsidiary                      Consolidated
                                               Company, Inc.    Guarantors      Eliminations       Totals
                                              -------------------------------  --------------- ---------------
<S>                                             <C>             <C>             <C>              <C>
REVENUES, net of returns                        $302,622,642    $143,672,596    $ (26,187,339)   $420,107,899

COSTS OF SALES (exclusive of depreciation
shown below)                                     190,955,283      88,281,774      (28,323,008)    250,914,049
                                              --------------- ---------------  --------------- ---------------
  Gross profit                                   111,667,359      55,390,822        2,135,669     169,193,850

OPERATING EXPENSES (INCOME):
  Selling, general and administrative             82,044,955      23,810,193        2,135,669     107,990,817
  Depreciation                                     4,123,221         789,510                -       4,912,731
  Amortization                                     3,330,946       5,431,452                -       8,762,398
  Intercompany administrative fee                 (3,697,200)      3,697,200                -               -
  Equity in earnings of subsidiary               (13,351,103)              -       13,351,103               -
                                              --------------- ---------------  --------------- ---------------
                                                  72,450,819      33,728,355       15,486,772     121,665,946
                                              --------------- ---------------  --------------- ---------------
INCOME FROM OPERATIONS                            39,216,540      21,662,467      (13,351,103)     47,527,904
                                              --------------- ---------------  --------------- ---------------
OTHER EXPENSES (INCOME):
  Interest expense                                29,395,142               -                -      29,395,142
  Interest income                                 (1,274,836)              -                -      (1,274,836)
  Gain on derivative financial instruments          (525,000)              -                -        (525,000)
                                              --------------- ---------------  --------------- ---------------
                                                  27,595,306               -                -      27,595,306
                                              --------------- ---------------  --------------- ---------------

INCOME BEFORE INCOME TAXES                        11,621,234      21,662,467      (13,351,103)     19,932,598

INCOME TAX EXPENSE (BENEFIT)                        (620,259)      8,311,364                -       7,691,105
                                              --------------- ---------------  --------------- ---------------
NET INCOME                                      $ 12,241,493    $ 13,351,103    $ (13,351,103)   $ 12,241,493
                                              =============== ===============  =============== ===============
</TABLE>


                                      63
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2005
--------------------------------------------------------------------------------------------------------

                                           Nebraska
                                             Book          Subsidiary                      Consolidated
                                         Company, Inc.     Guarantors      Eliminations       Totals
                                        --------------- ---------------  ---------------  --------------
<S>                                      <C>             <C>             <C>              <C>
REVENUES, net of returns                 $ 273,459,283   $ 153,548,968   $ (24,853,911)   $ 402,154,340

COSTS OF SALES (exclusive of
depreciation shown below)                  171,662,429      95,786,052     (26,810,348)     240,638,133
                                        --------------- --------------- ---------------  ---------------
  Gross profit                             101,796,854      57,762,916       1,956,437      161,516,207

OPERATING EXPENSES (INCOME):
  Selling, general and administrative       73,377,545      25,179,046       1,956,437      100,513,028
  Depreciation                               4,362,114         545,729               -        4,907,843
  Amortization                               2,827,048       5,431,452               -        8,258,500
  Intercompany administrative fee             (969,900)        969,900               -                -
  Equity in earnings of subsidiary         (15,266,457)              -      15,266,457                -
                                        --------------- --------------- ---------------  ---------------
                                            64,330,350      32,126,127      17,222,894      113,679,371
                                        --------------- --------------- ---------------  ---------------
INCOME FROM OPERATIONS                      37,466,504      25,636,789     (15,266,457)      47,836,836
                                        --------------- --------------- ---------------  ---------------
OTHER EXPENSES (INCOME):
  Interest expense                          25,853,629               -               -       25,853,629
  Interest income                             (638,935)              -               -         (638,935)
                                        --------------- --------------- ---------------  ---------------
                                            25,214,694               -               -       25,214,694
                                        --------------- --------------- ---------------  ---------------

INCOME BEFORE INCOME TAXES                  12,251,810      25,636,789     (15,266,457)      22,622,142

INCOME TAX EXPENSE (BENEFIT)                (1,208,214)     10,370,332               -        9,162,118
                                        --------------- --------------- ---------------  ---------------
NET INCOME                               $  13,460,024   $  15,266,457   $ (15,266,457)   $  13,460,024
                                        =============== =============== ===============  ===============
</TABLE>


                                      64
<PAGE>


NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2007
--------------------------------------------------------------------------------------------------------------------


                                                           Nebraska
                                                            Book         Subsidiary                   Consolidated
                                                         Company, Inc.    Guarantors    Eliminations     Totals
                                                        -------------- --------------- -------------- -------------
<S>                                                      <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES                     $ 27,434,996   $     81,182   $         -    $ 27,516,178

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                      (4,770,795)    (1,772,279)            -      (6,543,074)
  Acquisitions, net of cash acquired                      (25,200,030)      (673,632)            -     (25,873,662)
  Proceeds from sale of property and equipment                107,100        206,405             -         313,505
  Software development costs                                 (705,523)             -             -        (705,523)
  Cash acquired in acquisition of subsidiary guarantor     (3,087,617)     3,087,617             -               -
                                                        -------------- -------------- ------------- ---------------
      Net cash flows from investing activities            (33,656,865)       848,111             -     (32,808,754)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                 24,000,000              -             -      24,000,000
  Payment of financing costs                                 (964,774)             -             -        (964,774)
  Principal payments on long-term debt                     (3,411,172)      (410,000)            -      (3,821,172)
  Principal payments on capital lease obligations            (390,205)             -             -        (390,205)
  Intercompany financing activity                         (14,341,119)    14,341,119             -               -
  Net decrease in revolving credit facility                         -    (13,931,119)            -     (13,931,119)
                                                        -------------- -------------- ------------- ---------------
      Net cash flows from financing activities              4,892,730              -             -       4,892,730
                                                        -------------- -------------- ------------- ---------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       (1,329,139)       929,293             -        (399,846)

CASH AND CASH EQUIVALENTS, Beginning of period             29,955,367      3,427,355             -      33,382,722
                                                        -------------- -------------- ------------- ---------------
CASH AND CASH EQUIVALENTS, End of period                 $ 28,626,228   $  4,356,648   $         -    $ 32,982,876
                                                        ============== ============== ============= ===============
</TABLE>

                                        65
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2006
-------------------------------------------------------------------------------------------------------------


                                                     Nebraska
                                                      Book         Subsidiary                   Consolidated
                                                  Company, Inc.    Guarantors    Eliminations      Totals
                                                  -------------- -------------- ------------- ---------------
<S>                                                <C>             <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES               $ 20,939,334    $ 1,633,898    $         -   $ 22,573,232

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                (6,642,990)      (668,704)             -     (7,311,694)
  Acquisitions, net of cash acquired                (10,848,509)             -              -    (10,848,509)
  Proceeds from sale of property and equipment           38,029              -              -         38,029
                                                  -------------- -------------- -------------- --------------
      Net cash flows from investing activities      (17,453,470)      (668,704)             -    (18,122,174)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment of financing costs                           (248,813)             -              -       (248,813)
  Principal payments on long-term debt               (1,832,143)             -              -     (1,832,143)
  Principal payments on capital lease obligations      (260,920)             -              -       (260,920)
  Capital contributions                                  49,197              -              -         49,197
                                                  -------------- -------------- -------------- --------------
      Net cash flows from financing activities       (2,292,679)             -              -     (2,292,679)
                                                  -------------- -------------- -------------- --------------

NET INCREASE IN CASH AND CASH EQUIVALENTS             1,193,185        965,194              -      2,158,379

CASH AND CASH EQUIVALENTS, Beginning of period       28,762,182      2,462,161              -     31,224,343
                                                  -------------- -------------- -------------- --------------
CASH AND CASH EQUIVALENTS, End of period           $ 29,955,367    $ 3,427,355    $         -   $ 33,382,722
                                                  ============== ============== ============== ==============
</TABLE>

                                      66
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2005
--------------------------------------------------------------------------------------------------------------

                                                     Nebraska
                                                      Book         Subsidiary                    Consolidated
                                                  Company, Inc.    Guarantors    Eliminations      Totals
                                                  ------------- ---------------  ------------- ---------------
<S>                                                <C>             <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES               $ 14,436,611    $ 2,245,579     $        -    $ 16,682,190

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                (5,463,733)    (2,201,942)             -      (7,665,675)
  Acquisitions, net of cash acquired                (20,160,079)             -              -     (20,160,079)
  Decrease in restricted cash                        27,065,000              -              -      27,065,000
  Proceeds from sale of property and equipment           10,469          2,730              -          13,199
                                                  -------------- --------------  -------------  --------------
      Net cash flows from investing activities        1,451,657     (2,199,212)             -        (747,555)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment of financing costs                           (437,915)             -              -        (437,915)
  Principal payments on long-term debt              (17,238,880)             -              -     (17,238,880)
  Principal payments on capital lease obligations      (182,094)             -              -        (182,094)
  Dividends paid to parent                             (132,466)             -              -        (132,466)
  Capital contributions                                   4,882              -              -           4,882
                                                  -------------- --------------  -------------  --------------
      Net cash flows from financing activities      (17,986,473)             -              -     (17,986,473)
                                                  -------------- --------------  -------------  --------------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                     (2,098,205)        46,367              -      (2,051,838)

CASH AND CASH EQUIVALENTS, Beginning of period       30,860,387      2,415,794              -      33,276,181
                                                  -------------- --------------  -------------  --------------
CASH AND CASH EQUIVALENTS, End of period           $ 28,762,182    $ 2,462,161     $        -    $ 31,224,343
                                                  ============== ==============  =============  ==============
</TABLE>

                                       67
<PAGE>

     ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                              FINANCIAL DISCLOSURE.

    None.


                        ITEM 9A. CONTROLS AND PROCEDURES.

    (A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Our management, with
the participation of our chief executive officer and chief financial officer
(our principal executive officer and principal financial officer), evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2007. This
evaluation was performed to determine if our disclosure controls and procedures
were effective, in that they are designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, including
ensuring that such information is accumulated and communicated to management,
including our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure. Based on
this evaluation, our chief executive officer and chief financial officer
concluded that, as of March 31, 2007, our disclosure controls and procedures
were effective.

    (B) CHANGES IN INTERNAL CONTROLS. There were no changes in our internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) which occurred during the quarter ended March 31, 2007
that materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.


                           ITEM 9B. OTHER INFORMATION.

    Not applicable.


                                       68
<PAGE>

                                    PART III

        ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

    The members of our Board of Directors and senior executive officers and
their ages are as follows:

         NAME           AGE                  POSITION
         ----           ---                  --------
   Mark L. Bono         47   Director
   R. Sean Honey        36   Director
   Mark W. Oppegard     57   Chief Executive Officer, President and Director
   Barry S. Major       50   Chief Operating Officer and Director
   Alan G. Siemek       47   Chief Financial Officer, Senior Vice President of
                             Finance and Administration, Treasurer, and
                             Assistant Secretary
   Robert A. Rupe       59   Senior Vice President - Bookstore Division
   Michael J. Kelly     49   Senior Vice President - Textbook Division
   Larry R. Rempe       59   Senior Vice President - Complementary Services

   The business experience, principal occupation and employment as well as the
periods of service of each of our directors and senior executive officers during
the last five fiscal years are set forth below.

    MARK L. BONO became a Director of ours and NBC upon the consummation of the
Weston Presidio Transaction in fiscal year 2003. Mr. Bono joined Weston Presidio
in 1999 and is a member of the general partners of the Weston Funds. Prior to
1999, Mr. Bono served in various positions at Tucker Anthony, an investment
banking firm, including Managing Director and Co-Head of Mergers and
Acquisitions. Mr. Bono also serves as a Director of Trimark Sportswear Group,
Herald Media, and Rockwood.

    R. SEAN HONEY was named a Director of ours and NBC upon the consummation of
the March 4, 2004 Transaction. Mr. Honey joined Weston Presidio in 1999 and is a
member of the general partners of the Weston Funds. Prior to 1999, Mr. Honey
served in various positions at J.P. Morgan in both Mergers and Acquisitions and
Merchant Banking. Mr. Honey also serves as a Director of Apple American Group,
Cellu Tissue Holdings, Schurman Fine Papers, and Purcell Systems.

    MARK W. OPPEGARD has served in the college bookstore industry for 37 years
(all of which have been with us) and became our Chief Executive Officer and
President/Chief Executive Officer, Secretary and a Director of NBC on February
13, 1998. Additionally, Mr. Oppegard has served as our President since 1992 and
as our Director since 1995. Prior to 1998, Mr. Oppegard served as Vice
President, Secretary, Assistant Treasurer and a Director of NBC between 1995 and
1998. Prior to 1992, Mr. Oppegard served in a series of positions with us,
including Vice President of the Bookstore Division.

    BARRY S. MAJOR, who has served in the college bookstore industry for 8 years
(all of which have been with us), was named our Chief Operating Officer in
January, 1999, and upon consummation of the March 4, 2004 Transaction, was also
named our Director and NBC's Director. Prior to joining us, Mr. Major served in
various executive management positions at SITEL Corporation (SITEL), a company
listed on the New York Stock Exchange that provides outsourced telephone and
Internet-based sales and customer service. Joining SITEL in 1995 as the
Executive Vice President of Finance, Mr. Major was named Chief Financial Officer
in 1996 and assumed the role of President of the North America Region in 1997.
Between 1985 and 1995, Mr. Major served in a series of positions, including
President in 1995, Executive Vice President, and Senior Vice President/Credit
Manager, with American National Corporation, a multi-bank holding company
operating three banks throughout Omaha and Southeast Nebraska.

    ALAN G. SIEMEK, who has served in the college bookstore industry for 8 years
(all of which have been with us), was named our Senior Vice President of Finance
and Administration in April, 2001. Mr. Siemek has also served as our Chief
Financial Officer, Treasurer and Assistant Secretary and Vice President and
Treasurer of NBC since July, 1999. Prior to joining us, Mr. Siemek served as
Corporate Controller at SITEL, starting in 1997. Between 1994 and 1997, Mr.
Siemek served in the positions of Director and Manager of SEC Reporting and Risk
Management for MFS Communications, a billion dollar telecommunications firm.
Prior to joining MFS Communications, Mr. Siemek spent eleven years in public
accounting with Coopers & Lybrand LLP in their Omaha and New York offices.

    ROBERT A. RUPE, who has served in the college bookstore industry for 6 years
(all of which have been with us), was named Senior Vice President of the
Bookstore Division in April, 2001. Prior to joining us and a one-year period in
which he was self-employed as a management training consultant, Mr. Rupe served
as Vice President of Operations of Busybody, Inc., a specialty retailer with
over 100 retail locations, from 1995 to 2000. Mr. Rupe has 36 years of retail
experience, including a variety of senior management positions at May Department
Stores, Marshall Field and Company, Phillips Van-Huesen and International Paper.

                                       69
<PAGE>

    MICHAEL J. KELLY, who has served in the college bookstore industry for 7
years (all of which have been with us), was named Senior Vice President of the
Textbook Division in April, 2005. Prior to April, 2005, Mr. Kelly served as
Senior Vice President of Distance Learning/Marketing Services and Other
Complementary Services from August, 2001 to March, 2005 and as Vice President of
E-commerce from November, 1999 to July, 2001. Prior to joining us, Mr. Kelly
served in various executive management positions at SITEL. Joining SITEL in 1995
as a Business Unit Vice President of Administration and Finance, Mr. Kelly was
named a Business Unit President in 1997, assumed the role of Chief Information
Officer for the North America Region in March, 1998, and was named Chief
Technology Officer for Global Operations in August, 1998. Between 1981 and 1995,
Mr. Kelly served as Director of Information Technology for Father Flanagan's
Boys Home, a non-profit organization offering services to troubled children.

    LARRY R. REMPE has served in the college bookstore industry for 21 years
(all of which have been with us) and was named Senior Vice President of
Complementary Services in April, 2005. Prior to April, 2005, Mr. Rempe served as
Vice President of Information Systems since 1986. Between 1974 and 1986, Mr.
Rempe served in various positions for Lincoln Industries, Inc., a holding
company that owned us until 1995.

AUDIT COMMITTEE

    Our audit committee currently consists of Mark L. Bono and R. Sean Honey.
Among other functions, our audit committee (a) makes recommendations to our
board of directors regarding the selection of independent auditors; (b) reviews
the results and scope of the audit and other services provided by our
independent auditors; (c) reviews our financial statements; and (d) reviews and
evaluates our internal control functions. The Board of Directors has determined
that the audit committee does not have an "audit committee financial expert" as
that term is defined by the applicable rules and regulations of the Securities
and Exchange Commission. However, the Board of Directors is satisfied that the
members of our audit committee have sufficient expertise and business and
financial experience necessary to effectively perform their duties as the audit
committee.

CODE OF ETHICS

    We have adopted a written code of ethics for our principal executive officer
and senior financial officers as required by the United States Securities and
Exchange Commission, or SEC, under Section 406 of the Sarbanes-Oxley Act of
2002. The code sets forth written standards to deter wrongdoing and promote
honest and ethical conduct, accurate and timely disclosure in reports and
documents, compliance with applicable governmental laws and regulations, prompt
internal reporting of violations of the code, and accountability for adherence
to the code.


                        ITEM 11. EXECUTIVE COMPENSATION.

    The following tables and paragraphs provide information concerning
compensation paid by us for the last three fiscal years to our Chief Executive
Officer, Chief Financial Officer, and three other most highly compensated senior
executive officers (each, an "Executive") earning in excess of $100,000 in total
compensation as defined in Regulation S-K, subpart 229.402(a)(3), including
compensation discussion and analysis, summary compensation table, employment
agreements, outstanding equity awards, nonqualified deferred compensation,
potential payments upon termination or change in control, compensation of
directors, compensation committee interlocks and insider participation, and
compensation committee report.

COMPENSATION DISCUSSION AND ANALYSIS

    COMPENSATION PHILOSOPHY. Our compensation programs are intended to attract
and retain vital employees and to properly incent high level talent to work for
and ultimately add value to the Company for the benefit of the shareholders.

    COMPENSATION COMMITTEE AND COMPENSATION PROCESS. We do not have a formal
Compensation Committee; however, the two directors affiliated with Weston
Presidio, the majority equity owner of NBC Holdings Corp. (our ultimate parent
company), act to approve the chief executive officer base salary compensation,
our budget, and all stock option or other equity awards. All other decisions
related to compensation are approved by our chief executive officer and chief
operating officer as appropriate.

                                       70
<PAGE>

    EXECUTIVE COMPENSATION COMPONENTS. Components of our Executive compensation
include base salary, bonus, stock option and other equity awards, severance
benefits, health insurance, disability and life insurance, and various other
insurance coverages as described in further detail below. The following is a
brief description of each principal element of compensation:

     1)   BASE SALARY. Base salaries are intended to compensate the Executives
          and all other salaried employees for their basic services performed
          for us on an annual basis. In setting base salaries, we take into
          account the Executive's experience, the functions and responsibilities
          of the job, and any other factors relevant to that particular job.
          Base salaries are typically adjusted annually by our chief executive
          officer and chief operating officer; however, we do not limit
          ourselves to this schedule. The chief executive officer's base salary
          is approved by Messrs. Bono and Honey of the Board of Directors.

     2)   BONUS PLAN. We use our executive bonus plan to incent each Executive
          on an annual basis. Bonuses for each Executive are initially
          determined by a preset percentage of the Executive's salary based upon
          attainment of goals related to our consolidated EBITDA compared to
          budget. Such goals may be revised for material unbudgeted events.
          Typically the minimum percentage needed to qualify for a bonus is 93%
          of budgeted EBITDA, and the maximum bonus amounts are achieved at 110%
          of budgeted EBITDA. Such initial calculated amounts are then adjusted
          by our chief executive officer and chief operating officer based upon
          non-quantifiable criteria in evaluating job performance.

     3)   STOCK OPTION AND OTHER EQUITY AWARDS. We utilize nonqualified stock
          options and other equity awards to incent the Executives to remain
          with us and to maximize long-term value for our shareholders. We have
          generally awarded stock options on an annual basis to each Executive
          based upon informal performance measures. Generally, we must achieve
          at least 93% of the budgeted EBITDA before options are granted.
          Messrs. Bono and Honey receive a recommendation from our chief
          executive officer regarding the number of stock options to be granted
          to each Executive and then adjust such recommendation as they consider
          appropriate. In addition, in March 2006, upon the approval of the
          entire Board of Directors, our chief executive officer, chief
          financial officer, and chief operating officer were each issued 1,400
          shares of Restricted Stock for $0.01 per share. This issuance of
          shares was designed to incent those named Executives to remain with us
          until at least September 30, 2010. Since this issuance of Restricted
          Stock, these named Executives have not received any further grants of
          stock options.

     4)   SEVERANCE PLANS. Each Executive has signed a memorandum of
          understanding under which they may be paid severance of up to (i) one
          year of base salary, (ii) pro rata bonuses and (iii) continuation of
          health, life and disability benefits for up to 12 months if they are
          terminated without cause (as defined in those agreements).

     5)   OTHER BENEFITS. We maintain health, dental and vision insurance plans
          for the benefit of eligible employees, including the Executives. The
          health and dental plans require the employee to pay a portion of the
          premium and we pay the remainder. The vision plan premium is paid in
          its entirety by the employee. We also maintain a 401(k) retirement
          plan that is available to all eligible employees. We currently match
          elective employee-participant contributions on the basis of 100% of
          the employee's contribution up to 5% of their total compensation.
          Certain amounts of life, accidental death and dismemberment, and short
          and long-term disability insurance coverage is also offered to all
          eligible employees and premiums or costs are paid in full by us.
          Certain other voluntary insurance coverages are available to eligible
          employees, such as supplemental life, cancer and personal accident
          insurance with the entire premium paid by the employee. The foregoing
          benefits are available to each Executive on the same basis as all
          other eligible employees.

    We do not have a policy regarding the adjustment or recovery of compensation
if the results on which that compensation was determined are restated or
otherwise adjusted.

                                       71
<PAGE>

SUMMARY COMPENSATION TABLE

    The table presented below summarizes compensation to each Executive for the
last three fiscal years:
<TABLE>
<CAPTION>
                                           Summary Compensation Table

                                                                                  Change in
                                                                                 Nonqualified
                                                                          Option   Deferred        (3)
                                   Fiscal                       Stock     Awards Compensation  All Other
    Name and Principal Position     Year   Salary     Bonus    Awards(1)   (2)     Earnings   Compensation  Total
---------------------------------- ----- ---------- --------- ---------- ------- ------------ ------------ --------
<S>                                <C>    <C>       <C>       <C>        <C>        <C>        <C>        <C>
Mark W. Oppegard - Chief
Executive Officer, President,
and Director                       2007   $295,006  $195,000  $ 332,319  $     -    $ 4,374    $ 11,516   $ 838,215
                                   2006    295,007         -          -        -      1,446     171,016     467,469
                                   2005    293,778    45,000          -        -          -      10,526     349,304
Alan G. Siemek - Chief
Financial Officer, Senior
Vice President of Finance
and Administration,
Treasurer and Assistant Secretary  2007    202,766   144,000    332,319        -          -      11,180     690,265
                                   2006    197,773         -          -        -          -     170,680     368,453
                                   2005    194,155    30,000          -        -          -      10,370     234,525

Barry S. Major - Chief Operating
Officer and Director               2007    272,770   189,000    332,319        -          -      11,180     805,269
                                   2006    267,775         -          -        -          -     170,680     438,455
                                   2005    263,533    43,000          -        -          -      10,430     316,963

Robert A. Rupe - Senior Vice
President - Bookstore Division     2007    188,307   130,000          -        -          -      11,431     329,738
                                   2006    174,445    30,000          -        -          -      11,016     215,461
                                   2005    158,619    40,000          -        -          -      10,766     209,385

Michael J. Kelly - Senior Vice
President - Textbook Division      2007    194,846    80,000          -        -          -       9,922     284,768
                                   2006    190,784         -          -        -          -      10,680     201,464
                                   2005    187,461    23,000          -        -          -      10,430     220,891

</TABLE>

     (1)  Represents share-based compensation recognized in connection with the
          1,400 shares of restricted stock issued to each of Messrs. Oppegard,
          Siemek, and Major on March 31, 2006. Share-based compensation is being
          recognized from the date of issuance of the restricted stock through
          September 30, 2010. See Note M of the notes to the consolidated
          financial statements in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY
          DATA.

     (2)  There were no stock options granted in fiscal 2007. As further
          discussed in Note B of the notes to the consolidated financial
          statements in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA,
          options granted prior to April 1, 2006 are accounted for under the
          provisions of APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
          EMPLOYEES and related interpretations utilizing the intrinsic value
          method. Under this method, share-based compensation is recorded on the
          date of grant only if the current market price of the underlying stock
          exceeds the exercise price. No share-based compensation was recognized
          in conjunction with such grants.

     (3)  All other compensation consists of the following components: (a) in
          fiscal 2006, bonuses of $160,000 intended to reimburse each of Messrs.
          Oppegard, Siemek, and Major for the federal, state and local taxes
          related to the March 31, 2006 issuance of restricted stock and this
          cash bonus; (b) matching contributions to the NBC Retirement Plan; and
          (c) life insurance premiums paid by us on the Executive's behalf.


                                       72
<PAGE>

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE - EMPLOYMENT AGREEMENTS

   We have employment agreements with each of the Executives. As amended, such
agreements (the "Employment Agreements") with the aforementioned Executives
provide for (1) an annual base salary, (2) incentive compensation based upon the
attainment of financial objectives, and (3) customary fringe benefits. The
salaries of the Executives are approximately as follows: Mr. Oppegard, $295,000
per annum; Mr. Siemek, $206,000 per annum; Mr. Major, $276,000 per annum; Mr.
Rupe, $220,000 per annum; and Mr. Kelly, $197,000 per annum. Each of the
Employment Agreements provides that their term will be automatically extended
from year to year, unless terminated upon specified notice by either party.

   The Employment Agreements also provide that each Executive will be granted a
number of options annually under the stock option plans described in Note M to
the consolidated financial statements presented in Item 8, FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA, with the size of such grant to be determined by the
Board of Directors. Each such option shall have an exercise price not to be less
than the fair market value per share as of the date of grant and will be
exercisable as to 25% of the shares covered thereby on the date of grant and as
to an additional 25% of the shares covered thereby on each of the first three
anniversaries of the date of grant, subject to the Executive's continued
employment with us on such dates.

   The Employment Agreements also provide for specified payments to the
Executive upon the expiration of such agreements, in the event of termination of
employment with us without "cause" (as defined in the respective agreements),
and in the event of death or disability of the Executive during the term, as
outlined below:

     o    TERMINATION OF EMPLOYMENT UPON EXPIRATION OF THE TERM OF THE
          EMPLOYMENT AGREEMENT - If we have given the Executive notice of our
          intention to terminate employment at the end of the term of the
          Employment Agreement, the Executive is entitled to continued payment
          of base salary and health, life insurance and disability insurance
          benefits for a period of one year following the expiration of the term
          of the Employment Agreement.

     o    TERMINATION OF EMPLOYMENT WITHOUT "CAUSE" PRIOR TO THE EXPIRATION OF
          THE TERM OF THE EMPLOYMENT AGREEMENT - If we have given the Executive
          notice of our intention to terminate employment without "cause" prior
          to the end of the term of the Employment Agreement, the Executive is
          entitled to continued payment of base salary and health, life
          insurance and disability insurance benefits for a period of one year
          following the date of termination. Additionally, the Executive is
          entitled to payment of any incentive bonus when otherwise due,
          prorated through the date of termination.

     o    TERMINATION OF EMPLOYMENT UPON DEATH OR DISABILITY - If an Executive's
          employment is terminated as a result of death or disability, the
          Executive is entitled to continued payment of base salary for a period
          of six months following the date of termination. Additionally, the
          Executive is entitled to payment of any incentive bonus when otherwise
          due, prorated through the date of termination.

    The Employment Agreements also contain customary confidentiality obligations
and non-competition agreements for each Executive spanning a period of three
years from the date of termination.

   Finally, the Employment Agreements provide that the Executives will not sell,
transfer, pledge or otherwise dispose of any shares of NBC common stock, except
for certain transfers to immediate family members, in the event of disability
and for estate planning purposes prior to the consummation by NBC of an initial
public offering of NBC common stock.

                                       73
<PAGE>

OUTSTANDING EQUITY AWARDS

    The following table provides information concerning outstanding equity
awards held by each Executive as of March 31, 2007:

<TABLE>
<CAPTION>
                                             Outstanding Equity Awards at March 31, 2007

                                       Option Awards                                         Stock Awards
                         ----------------------------------------------- ----------------------------------------------------
                                                                                                                   Equity
                                                                                                    Equity       Incentive
                                                                                                   Incentive     Plan Awards:
                                                                                       Market     Plan Awards:   Market or
                                           (1)                               Number   Value of     Number of     Payout Value
                            Number        Number                           of Shares  Shares or    Unearned      of Unearned
                        of Securities  of Securities                        or Units   Units of  Shares, Units  Shares, Units
                          Underlying     Underlying                        of Stock     Stock      or Other       or Other
                         Unexercised    Unexercised   Option    Option       That        That    Rights That    Rights That
                          Options -     Options -    Exercise Expiration   Have Not    Have Not    Have Not      Have Not
          Name           Exercisable   Unexercisable   Price     Date     Vested (2)  Vested (3)  Vested (2)     Vested (4)
----------------------- ------------- -------------- -------- ---------- ----------- ----------- ------------- --------------
<S>                        <C>         <C>            <C>      <C>         <C>        <C>         <C>           <C>
Mark W. Oppegard - Chief
Executive Officer,
President, and Director        5,950            -   $ 52.47    3/4/2014
                               2,675            -    106.00    3/4/2014
                               2,200            -    146.00    3/4/2014
                               1,472          491    160.00   11/8/2014
                                                                             311      $ 332,319      1,089       $ 1,171,230
Alan G. Siemek - Chief
Financial Officer, Senior
Vice President of Finance
and Administration,
Treasurer, and Assistant
Secretary                      4,728            -     52.47    3/4/2014
                               1,375            -    106.00    3/4/2014
                               1,375            -    146.00    3/4/2014
                               1,414          471    160.00   11/8/2014
                                                                             311        332,319      1,089         1,171,230
Barry S. Major - Chief
Operating Officer and
Director                       4,780            -     52.47    3/4/2014
                               2,500            -    106.00    3/4/2014
                               2,050            -    146.00    3/4/2014
                               1,472          491    160.00   11/8/2014
                                                                             311        332,319      1,089         1,171,230
Robert A. Rupe - Senior
Vice  President - Bookstore
Division                       1,375            -     52.47    3/4/2014
                               1,250            -    106.00    3/4/2014
                               1,175            -    146.00    3/4/2014
                               1,275          425    160.00   11/8/2014
                               1,200        1,200    160.00   8/28/2015
                                 590          590    160.00   3/29/2016

Michael J. Kelly - Senior
Vice President - Textbook
Division                       2,111            -     52.47    3/4/2014
                               1,375            -    106.00    3/4/2014
                               1,175            -    146.00    3/4/2014
                               1,200          400    160.00   11/8/2014
                               1,200        1,200    160.00   8/28/2015
                                 590          590    160.00   3/29/2016

</TABLE>

                                       74
<PAGE>

     (1)  There were three separate grants of stock options at an exercise price
          of $160/option - November 9, 2004, August 29, 2005, and March 30,
          2006. Twenty-five percent of the options granted were exercisable
          immediately upon granting with the remaining options becoming
          exercisable in 25% increments over the subsequent three years. In
          connection with the March 4, 2004 Transaction, all existing options at
          March 4, 2004 vested, certain of which were cancelled in exchange for
          new options granted under the 2004 Stock Option Plan. Options granted
          in fiscal 2004 under the 2004 Stock Option Plan were fully vested and
          exercisable at prices consistent with the options which were
          cancelled.

     (2)  Except in certain circumstances, the shares of restricted stock do not
          vest until September 30, 2010.

     (3)  Represents the recognized portion of share-based compensation
          associated with the 1,400 shares of restricted stock issued to each of
          Messrs. Oppegard, Siemek, and Major on March 31, 2006. Due to the
          existence of the "put" rights, share-based compensation is being
          remeasured at the end of each reporting period and recognized from the
          date of issuance of the restricted stock through September 30, 2010.
          See Note M of the notes to the consolidated financial statements in
          Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     (4)  Represents the unrecognized portion of share-based compensation
          associated with the 1,400 shares of restricted stock issued to each of
          Messrs. Oppegard, Siemek, and Major on March 31, 2006. Due to the
          existence of the "put" rights, share-based compensation is being
          remeasured at the end of each reporting period and recognized from the
          date of issuance of the restricted stock through September 30, 2010.
          See Note M of the notes to the consolidated financial statements in
          Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

NONQUALIFIED DEFERRED COMPENSATION

    The following table provides information concerning nonqualified deferred
compensation for each Executive during the fiscal year ended March 31, 2007:
<TABLE>
<CAPTION>
                   Nonqualified Deferred Compensation - March 31, 2007 (1)

                                                                    (2)       Aggregate    Aggregate
                                     Executive     Registrant    Aggregate   Withdrawals/   Balance
                                   Contributions  Contributions  Earnings   Distributions    as of
                                     in Fiscal      in Fiscal    in Fiscal    in Fiscal     March 31,
           Name                      Year 2007     Year 2007     Year 2007    Year 2007     2007 (2)
----------------------------------- -----------  -------------  ----------  -------------  ----------
<S>                                 <C>          <C>           <C>         <C>          <C>
Mark W. Oppegard - Chief
Executive Officer, President,
and Director                        $       -      $     -       $18,549      $    -        $250,392

Alan G. Siemek - Chief
Financial Officer,
Senior Vice President
of Finance and Administration,
Treasurer, and Assistant Secretary          -            -             -           -               -

Barry S. Major - Chief
Operating Officer and
Director                                    -            -             -           -               -

Robert A. Rupe - Senior
Vice President -
Bookstore Division                          -            -             -           -               -

Michael J. Kelly - Senior
Vice President - Textbook Division          -            -             -           -               -
</TABLE>

     (1)  See Note L of the notes to the consolidated financial statements in
          Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA for a brief
          description of the deferred compensation plan.

                                       75
<PAGE>

     (2)  Included herein are above-market earnings of $4,374 in fiscal year
          2007 and $1,446 in fiscal year 2006 which are included in the Summary
          Compensation Table above.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

    As described above, the employment agreements for each Executive include
provisions for potential payment upon termination of employment. The following
table quantifies the estimated payments and benefits that would be provided to
the Executive in each covered circumstance, assuming the triggering event
occurred on March 31, 2007:
<TABLE>
<CAPTION>
                 Potential Payments Upon Termination or Change in Control - March 31, 2007 (1)

                                                                                                                Total
                                                         (3)                   (5)       (5)         (5)     Potential
                                                (2)    Prorated     (4)       Health     Life    Disability   Payment
                                               Base    Incentive Restricted Insurance  Insurance Insurance     Upon
                       Name                   Salary    Bonus      Stock     Benefits  Benefits   Benefits  Termination
--------------------------------------------- ------  ---------- ---------- --------- ---------- ---------  ------------
<S>                                          <C>      <C>        <C>        <C>        <C>       <C>       <C>
Mark W. Oppegard - Chief Executive Officer,
President, and Director
  Termination of Employment upon Expiration
  of Term                                    $295,006  $     -   $332,319   $10,992     $516        $277      $639,110

  Termination of Employment Without Cause     295,006        -    332,319    10,992      516         277       639,110

  Termination of Employment upon Death or
  Disability                                  147,503        -    332,319         -        -          -        479,822

Alan G. Siemek - Chief Financial Officer,
Senior Vice President of Finance and
Administration, Treasurer, and Assistant
Secretary
  Termination of Employment upon Expiration
  of Term                                     206,003        -    332,319    13,539      180         277       552,318

  Termination of Employment Without Cause     206,003        -    332,319    13,539      180         277       552,318

  Termination of Employment upon Death or
  Disability                                  103,002        -    332,319         -        -           -       435,321

Barry S. Major - Chief Operating
Officer and Director
  Termination of Employment upon Expiration
  of Term                                     275,995        -    332,319    13,539      180         277       622,310

  Termination of Employment Without Cause     275,995        -    332,319    13,539      180         277       622,310

  Termination of Employment upon Death or
  Disability                                  137,998        -    332,319         -        -           -       470,317

Robert A. Rupe - Senior Vice President -
Bookstore Division
  Termination of Employment upon Expiration
  of Term                                     220,002        -          -    11,082      516         277       231,877

  Termination of Employment Without Cause     220,002        -          -    11,082      516         277       231,877

  Termination of Employment upon Death or
  Disability                                  110,001        -          -         -        -           -       110,001

Michael J. Kelly - Senior Vice President -
Textbook Division
  Termination of Employment upon Expiration
  of Term                                     196,997        -          -    10,992      180         277       208,446

  Termination of Employment Without Cause     196,997        -          -    10,992      180         277       208,446

  Termination of Employment upon Death or
  Disability                                   98,499        -          -         -        -           -        98,499
</TABLE>

                                       76
<PAGE>

     (1)  The Employment Agreements are silent as to how payment amounts are
          ultimately determined and how payment is to be made (i.e. - monthly,
          lump sum, etc.). Our Board of Directors would ultimately be
          responsible for approving the terms of such termination payments.

     (2)  Base salary in place at time of termination.

     (3)  It is assumed that incentive bonus earned for fiscal year 2007 was
          paid in the normal course of business. As the assumed termination does
          not fall within a fiscal year, no pro rata allocation is necessary.

     (4)  In accordance with the Stock Repurchase Agreement, if Messrs.
          Oppegard, Siemek, or Major are terminated by us without cause or by
          reason of their death or disability during the period from March 31,
          2006 to September 30, 2010, a number of the shares of Restricted Stock
          will become vested on the date of termination equal to the 1,400
          shares which were issued times the number of days from March 31, 2006
          to the date of termination divided by the number of days from March
          31, 2006 to September 30, 2010. This value represents the cumulative
          balance of share-based compensation accrued at March 31, 2007 in Other
          Long-Term Liabilities - see Note M of the notes to the consolidated
          financial statements in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY
          Data. For purposes of this table, it is assumed that Messrs. Oppegard,
          Siemek, and Major would "put" the vested shares in accordance with the
          Stock Repurchase Agreement upon termination.

     (5)  Represents premiums paid by us on the Executive's behalf.

COMPENSATION OF DIRECTORS

   Our Directors receive no compensation for services but are reimbursed for
out-of-pocket expenses. These reimbursements are less than $10,000 annually to
each Director.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    As previously mentioned, we do not currently have a compensation committee.
Although no stock options or other equity awards were granted during the last
fiscal year, Mark W. Oppegard, Chief Executive Officer, President, and Director,
participates with Messrs. Bono and Honey in deliberations concerning stock
options and other equity awards from time to time granted to the Executives.

COMPENSATION COMMITTEE REPORT

    Our Board of Directors has reviewed and discussed the Compensation
Discussion and Analysis above with management and has approved the inclusion of
such Compensation Discussion and Analysis in this Annual Report on Form 10-K for
the year ended March 31, 2007.

    Board of Directors:
        Mark L. Bono;
        R. Sean Honey;
        Mark W. Oppegard; and
        Barry S. Major.


                                       77
<PAGE>

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
                          RELATED STOCKHOLDER MATTERS.

    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - All shares
of our common stock are owned by NBC; therefore, the following table sets forth
information on security ownership of NBC common stock beneficially owned by each
person who owns more than 5.0% of such shares; each director; each senior
executive officer named in Item 11, EXECUTIVE COMPENSATION; and all of our
directors and senior executive officers treated as a group. Shares of NBC common
stock issued and outstanding totaled 554,094 on June 29, 2007. Weston Presidio
owns 36,455 of the issued and outstanding shares directly, with the remaining
517,639 issued and outstanding shares being owned by NBC Holdings Corp, a
company which has 517,639 shares of capital stock issued and outstanding that
are owned either by Weston Presidio or current and former members of management.
The securities underlying the 2004 Stock Option Plan, of which 75,749 options
are outstanding as of June 29, 2007, are shares of NBC Holdings Corp. capital
stock. The shares listed and percentages calculated thereon are based upon NBC
common stock outstanding as of June 29, 2007 and NBC Holdings Corp. capital
stock underlying nonqualified stock options that are exercisable within sixty
days, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934. To the
knowledge of NBC, each of such holders of shares has sole voting and investment
power as to the shares owned unless otherwise noted. The address for each senior
executive officer and director is 4700 South 19th Street, Lincoln, Nebraska
68501 unless otherwise noted.

                                                      Amount and
                                                       Nature of
                                                      Beneficial    Percent of
         Title of Class/Name of Beneficial Owner     Ownership (1)  Class (3)
---------------------------------------------------  -------------  ----------

Common Stock:
  Owning Greater Than 5% of Shares:
    Weston Presidio Capital IV, L.P. (2)                365,449      66.0%
    Weston Presidio Capital III, L.P. (2)               153,623      27.7%
    WPC Entrepreneur Fund, L.P. (2)                       7,579       1.4%
    WPC Entrepreneur Fund II, L.P. (2)                    5,785       1.0%

  Ownership of Directors:
    Mark L. Bono (2)                                    532,436      96.1%
    R. Sean Honey (2)                                         -         -

  Ownership of Senior Executive Officers
  Named in Item 11:
    Mark W. Oppegard                                     17,697       3.1%
    Alan G. Siemek                                       10,292       1.8%
    Barry S. Major (4)                                   13,949       2.5%
    Robert A. Rupe                                        6,865       1.2%
    Michael J. Kelly                                      7,651       1.4%

  Ownership of Directors and All Senior
  Executive Officers as a Group                         595,690      98.4%

     (1)  Beneficial ownership is determined in accordance with the rules of the
          SEC and includes voting and investment power with respect to the
          shares of NBC common stock. Such shares include NBC Holdings Corp.
          shares underlying nonqualified stock options exercisable within sixty
          days, as follows: Mr. Oppegard - 12,297 shares; Mr. Siemek - 8,892
          shares; Mr. Major - 10,802 shares; Mr. Rupe - 6,865 shares; Mr. Kelly
          - 7,651 shares; and 51,307 shares for all directors and senior
          executive officers as a group.

     (2)  The sole general partner of Weston Presidio Capital IV, L.P., Weston
          Presidio Capital III, L.P., WPC Entrepreneur Fund, L.P., and WPC
          Entrepreneur Fund II, L.P. (the "Weston Presidio Funds") is a limited
          liability company of which Messrs. Bono and Honey are members. Messrs.
          Bono and Honey disclaim beneficial ownership of the shares held by the
          Weston Presidio Funds, except to the extent of their respective
          pecuniary interests therein. The address of the Weston Presidio Funds,
          and Messrs. Bono and Honey is 200 Clarendon Street, 50th Floor,
          Boston, Massachusetts 02116.

     (3)  The percentages are calculated based upon 554,094 shares of NBC common
          stock outstanding as of June 29, 2007 and shares underlying
          nonqualified stock options exercisable within sixty days as detailed
          in footnote (1).

                                       78
<PAGE>

     (4)  Beneficial ownership includes 1,747 shares of NBC common stock which
          are pledged as security for the full and timely payment of remaining
          amounts due under a promissory note Mr. Major has with NBC. In
          January, 1999, NBC issued 4,765 shares of its common stock to Mr.
          Major at a price of $52.47 per share, in exchange for $25,000 in cash
          and a promissory note in the principal amount of $225,000 bearing
          interest at 5.25% per year. Remaining amounts due under the promissory
          note at March 31, 2007 totaled approximately $91,000.

    SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS - Through
NBC's parent, NBC Holdings Corp., NBC has a share-based compensation plan
established to provide for the granting of options to purchase capital stock of
NBC Holdings Corp. NBC also has a restricted stock plan established through NBC
Holdings Corp. to provide for the sale of 4,200 shares of NBC Holdings Corp.
capital stock to certain officers and directors of the Company. Details
regarding these plans are presented in the footnotes to the consolidated
financial statements found in Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA. Specific information as of March 31, 2007 regarding the plans, which were
not approved by security holders, is also presented in the following table.

                                   Number of       Weighted-    Number of
                                 Securities to      Average     Securities
                                be Issued Upon     Exercise     Remaining
                                  Exercise of      Price of    Available for
                                  Outstanding     Outstanding     Future
                 Plan               Options         Options      Issuance
------------------------------ ----------------- ------------- -------------

2004 Stock Option Plan               75,749       $ 111.83        4,917

2005 Restricted Stock Plan                -              -            -


          ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
                             DIRECTOR INDEPENDENCE.

    DIRECTOR INDEPENDENCE - We are a corporation with public debt (not listed on
any exchange) whose equity is privately held. Although our Board has not made a
formal determination on the matter, under current New York Stock Exchange
listing standards (which we are not currently subject to) and taking into
account any applicable committee standards, we believe that Messrs. Oppegard and
Major would not be considered independent under any general listing standards or
those applicable to any particular committee due to their employment
relationship with us, and Messrs. Bono and Honey may not be considered
independent under any general listing standards or those applicable to any
particular committee, due to their relationship with Weston Presidio, our
largest indirect stockholder.


                ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

    The following table sets forth the aggregate fees billed to us during fiscal
years 2007 and 2006 by Deloitte & Touche LLP:

                       Fiscal Year Ended March 31,
                            2007         2006
                       ------------ --------------

Audit Fees               $ 155,500      $ 142,389
Audit-Related Fees          40,480         41,240
Tax Fees                   192,359         76,355
Other Fees                       -              -
                       ------------ --------------
Total                    $ 388,339      $ 259,984
                       ============ ==============


    AUDIT FEES include professional services rendered for the audit of our
annual consolidated financial statements and for the reviews of the consolidated
interim financial statements included in our Quarterly Reports on Form 10-Q.

    AUDIT-RELATED FEES consist of fees for assurance and related services that
are related to the performance of the audit or review of our consolidated
financial statements, including services provided in conjunction with the
acquisition of CBA on May 1, 2006, a Securities and Exchange Commission comment
letter dated March 7, 2005, and the audit of the 401(k) compensation plan.

                                       79
<PAGE>

    TAX FEES consist of fees for professional services for tax compliance, tax
advice, and tax planning. These services include assistance regarding federal
and state tax compliance, return preparation, and tax audits.

    The audit committee pre-approves all audit and non-audit services performed
by our independent registered public accounting firm.


                                       80
<PAGE>

                                     PART IV

                ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

  (A)   FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES, AND EXHIBITS.

        (1) Consolidated Financial Statements of Nebraska Book Company, Inc.

             Index to Consolidated Financial Statements.

             Report of Independent Registered Public Accounting Firm.

             Consolidated Balance Sheets as of March 31, 2007 and 2006.

             Consolidated Statements of Operations for the Years Ended March 31,
             2007, 2006, and 2005.

             Consolidated Statements of Stockholder's Equity for the Years Ended
             March 31, 2007, 2006, and 2005.

             Consolidated Statements of Cash Flows for the Years Ended March 31,
             2007, 2006, and 2005.

             Notes to Consolidated Financial Statements.

        (2)  Financial Statement Schedules.

             Report of Independent Registered Public Accounting Firm on
             Schedule.
             Schedule II (Item 15(a)(2)) - Valuation and Qualifying Accounts.

        (3)  Exhibits.

        2.1     Agreement for Purchase and Sale of Stock, dated as of May 26,
                1999 by and among Nebraska Book Company, Inc., Dennis Rother,
                and Larry Rother, filed as Exhibit 2.1 to Nebraska Book Company,
                Inc. Form 8-K, as amended, dated June 4, 1999, is incorporated
                herein by reference.

        2.2     Agreement of Sale, dated as of September 30, 1999 by and among
                Nebraska Book Company, Inc., Michigan College Book Company,
                Inc., Ned's Berkeley Book Company, Inc., Ned Shure, Fred Shure,
                and Jack Barenfanger filed as Exhibit 2.1 to Nebraska Book
                Company, Inc. Form 8-K, as amended, dated November 12, 1999, is
                incorporated herein by reference.

        2.3     Agreement of Sale, as amended, dated as of May 11, 2001 between
                Nebraska Book Company, Inc. and University Co-operative Society,
                filed as Exhibit 2.1 to Nebraska Book Company, Inc. Form 8-K
                dated May 11, 2001, is incorporated herein by reference.

        2.4     Agreement and Plan of Merger, dated as of July 1, 2003, by and
                among TheCampusHub.com, Inc., Nebraska Book Company, Inc. and
                NBC Acquisition Corp., filed as Exhibit 2.1 to Nebraska Book
                Company, Inc. Form 10-Q for the quarter ended June 30, 2003, is
                incorporated herein by reference.

        2.5     Share Purchase Agreement, dated as of April 2, 2006, by and
                among Nebraska Book, CBA and the Sellers referenced therein,
                filed as Exhibit 2.1 to Nebraska Book Company, Inc. Current
                Report on Form 8-K dated April 6, 2006, is incorporated herein
                by reference.

        2.6     Second Amendment to Share Purchase Agreement, dated as of April
                30, 2006, by and among Nebraska Book, CBA and the Sellers
                referenced therein, filed as Exhibit 2.1 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated May 4, 2006, is
                incorporated herein by reference.

        3.1     Certificate of Incorporation, as amended, of Nebraska Book
                Company, Inc., filed as Exhibit 3.1 to Nebraska Book Company,
                Inc. Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

                                       81
<PAGE>

        3.2     First Restated By-laws of Nebraska Book Company, Inc., filed as
                Exhibit 3.2 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended September 30, 2003, is incorporated herein by
                reference.

        4.1     Indenture, dated as of February 13, 1998 by and between Nebraska
                Book Company, Inc. and United States Trust Company of New York,
                as Trustee, filed as Exhibit 4.1 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        4.2     Supplemental Indenture, dated as of July 1, 2002, by and among
                Specialty Books, Inc., Nebraska Book Company, Inc., and The Bank
                of New York, as Trustee, filed as Exhibit 10.1 to Nebraska Book
                Company, Inc. Form 10-Q for the quarter ended September 30,
                2002, is incorporated herein by reference.

        4.3     Second Supplemental Indenture, dated March 4, 2004, by and among
                Nebraska Book Company, Inc., the subsidiary guarantor named
                therein and The Bank of New York, as Trustee, filed as Exhibit
                4.3 to Nebraska Book Company, Inc. Registration Statement on
                Form S-4 (File No. 333-114891), is incorporated herein by
                reference.

        4.4     Supplemental Indenture, dated as of December 31, 2004, by and
                among NBC Textbooks LLC, Nebraska Book Company, Inc., each other
                then existing Subsidiary Guarantor under the Indenture, and the
                Trustee, filed as Exhibit 10.1 to Nebraska Book Company. Inc.
                Current Report on Form 8-K dated and filed on January 6, 2005,
                is incorporated herein by reference.

        4.5     Supplemental Indenture, dated as of May 1, 2006, by and among
                CBA, Nebraska Book Company, Inc., each other then existing
                Subsidiary Guarantor under the Indenture, and the Trustee, filed
                as Exhibit 10.2 to Nebraska Book Company, Inc. Current Report on
                Form 8-K dated May 4, 2006, is incorporated herein by reference.

        4.6     Supplemental Indenture, dated as of May 1, 2007, by and among
                Net Textstore LLC, Nebraska Book Company, Inc., each other then
                existing Subsidiary Guarantor under the Indenture, and the
                Trustee, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
                Current Report on Form 8-K dated May 7, 2007, is incorporated
                herein by reference.

        4.7     Form of Initial Note of Nebraska Book Company, Inc. (included in
                Exhibit 4.1 as Exhibit A), filed as Exhibit 4.3 to Nebraska Book
                Company, Inc. Registration Statement on Form S-4, as amended
                (File No. 333-48221), is incorporated herein by reference.

        4.8     Form of Exchange Note of Nebraska Book Company, Inc. (included
                in Exhibit 4.1 as Exhibit B), filed as Exhibit 4.4 to Nebraska
                Book Company, Inc. Registration Statement on Form S-4, as
                amended (File No. 333-48221), is incorporated herein by
                reference.

        4.9     Indenture, dated March 4, 2004, by and among Nebraska Book
                Company, Inc., the subsidiary guarantors parties thereto and BNY
                Midwest Trust Company as Trustee, filed as Exhibit 4.6 to
                Nebraska Book Company, Inc. Registration Statement on Form S-4
                (File No. 333-114891), is incorporated herein by reference.

        4.10    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in
                Exhibit 4.6), filed as Exhibit 4.7 to Nebraska Book Company,
                Inc. Registration Statement on Form S-4 (File No. 333-114891),
                is incorporated herein by reference.

        4.11    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8%
                Senior Subordinated Note Due 2012, filed as Exhibit 4.8 to
                Nebraska Book Company, Inc. Form 10-K for the fiscal year ended
                March 31, 2004, is incorporated herein by reference.

        10.1    Credit Agreement dated as of February 13, 1998 by and among NBC
                Acquisition Corp., Nebraska Book Company, Inc., the Chase
                Manhattan Bank and certain other financial institutions, filed
                as Exhibit 10.1 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4, as amended (File No. 333-48221), is
                incorporated herein by reference.

        10.2    First Amendment, dated as of May 21, 1999, to the Credit
                Agreement, dated as of February 13, 1998 by and among NBC
                Acquisition Corp., Nebraska Book Company, Inc., the Chase
                Manhattan Bank, and certain other financial institutions, filed
                as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 1999, is incorporated herein by
                reference.

                                       82
<PAGE>

        10.3    Second Amendment and Waiver, dated as of April 27, 2000, to the
                Credit Agreement, dated as of February 13, 1998, by and among
                NBC Acquisition Corp., Nebraska Book Company, Inc., the Chase
                Manhattan Bank, and certain other financial institutions, filed
                as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 2000, is incorporated herein by
                reference.

        10.4    Third Amendment, dated as of December 20, 2001, to the Credit
                Agreement, dated as of February 13, 1998, by and among NBC
                Acquisition Corp., Nebraska Book Company, Inc., J.P. Morgan
                Chase Bank, and certain other financial institutions, filed as
                Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended December 31, 2001, is incorporated herein by
                reference.

        10.5    Fourth Amendment and Waiver, dated as of June 4, 2002, to and
                under the Credit Agreement, dated as of February 13, 1998, by
                and among NBC Acquisition Corp., Nebraska Book Company, Inc.,
                JPMorgan Chase Bank, and certain other financial institutions,
                filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
                for the quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.6    Fifth Amendment and Waiver, dated as of June 13, 2003, to and
                under the Credit Agreement, dated as of February 13, 1998, by
                and among NBC Acquisition Corp., Nebraska Book Company, Inc.,
                JPMorgan Chase Bank, and certain other financial institutions,
                filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
                for the quarter ended June 30, 2003, is incorporated herein by
                reference.

        10.7    Amended and Restated Credit Agreement, dated February 13, 1998,
                as amended and restated as of December 10, 2003, by and among
                NBC Acquisition Corp., Nebraska Book Company, Inc., and the
                other parties thereto, filed as Exhibit 99.1 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated December 10,
                2003, is incorporated herein by reference.

        10.8    Amended and Restated Credit Agreement, dated as of March 4,
                2004, by and among NBC Holdings Corp., NBC Acquisition Corp.,
                Nebraska Book Company, Inc., the Several Lenders parties
                thereto, JPMorgan Chase Bank as Administrative Agent and
                Collateral Agent, Citigroup Global Markets Inc. as Syndication
                Agent, and Fleet National Bank and Wells Fargo Bank N.A., as
                Co-Documentation Agents, filed as Exhibit 10.8 to Nebraska Book
                Company, Inc. Registration Statement on Form S-4 (File No.
                333-114891), is incorporated herein by reference.

        10.9    Second Amendment, dated as of October 20, 2004, to the Amended
                and Restated Credit Agreement, dated as of March 4, 2004, by and
                among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book
                Company, Inc., the Several Lenders parties thereto, JPMorgan
                Chase Bank as Administrative Agent and Collateral Agent,
                Citigroup Global Markets Inc. as Syndication Agent, and Fleet
                National Bank and Wells Fargo Bank N.A., as Co-Documentation
                Agents, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
                Current Report on Form 8-K dated and filed on October 26, 2004,
                is incorporated herein by reference.

        10.10   Third Amendment, dated as of August 1, 2005, to the Amended and
                Restated Credit Agreement, dated as of March 4, 2004, by and
                among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book
                Company, Inc., the Several Lenders parties thereto, JPMorgan
                Chase Bank, N.A. as Administrative Agent and Collateral Agent,
                Citigroup Global Markets Inc. as Syndication Agent, and Bank of
                America, N.A. and Wells Fargo Bank N.A., as Co-Documentation
                Agents, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
                Form 10-Q for the quarter ended June 30, 2005, is incorporated
                herein by reference.

        10.11   Fourth Amendment, dated as of April 26, 2006, to the Amended and
                Restated Credit Agreement, dated as of March 4, 2004, and as
                amended by the First Amendment thereto, dated as of August 6,
                2004, the Second Amendment thereto, dated as of October 20, 2004
                and the Third Amendment thereto, dated as of August 1, 2005,
                among Nebraska Book, NBC Holdings Corp., NBC Acquisition Corp.,
                the lenders party from time to time thereto, JPMorgan Chase
                Bank, N.A. (formerly known as JPMorgan Chase Bank),as
                administrative agent and collateral agent, Citigroup Global
                Markets Inc. as syndication agent, and Bank of America, N.A. (as
                successor by merger to Fleet National Bank) and Wells Fargo Bank
                N.A., as co-documentation agents, filed as Exhibit 10.1 to
                Nebraska Book Company, Inc. Current Report on Form 8-K dated May
                4, 2006, is incorporated herein by reference.

                                       83
<PAGE>

        10.12   Fifth Amendment, dated as of March 30, 2007, to the Amended and
                Restated Credit Agreement, dated as of February 13, 1998, as
                amended and restated as of December 10, 2003, as further amended
                and restated as of March 4, 2004, and as amended by the First
                Amendment thereto, dated as of August 6, 2004, the Second
                Amendment thereto, dated as of October 20, 2004 the Third
                Amendment thereto, dated as of August 1, 2005, and the Fourth
                Amendment thereto, dated as of April 26, 2006, among Nebraska
                Book, NBC Holdings Corp., NBC Acquisition Corp., the lenders
                party from time to time thereto, JPMorgan Chase Bank, N.A.
                (formerly known as JPMorgan Chase Bank),as administrative agent
                and collateral agent, Citigroup Global Markets Inc. as
                syndication agent, and Bank of America, N.A. (as successor by
                merger to Fleet National Bank) and Wells Fargo Bank N.A., as
                co-documentation agents, filed as Exhibit 10.1 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated April 3, 2007, is
                incorporated herein by reference.

        10.13   Assumption Agreement, dated as of July 1, 2002 between Specialty
                Books, Inc. and JPMorgan Chase Bank, as Administrative Agent,
                filed as Exhibit 10.2 to Nebraska Book Company, Inc. Form 10-Q
                for the quarter ended September 30, 2002, is incorporated herein
                by reference.

        10.14   Assumption Agreement, dated as of December 31, 2004, made by NBC
                Textbooks LLC, in favor of JPMorgan Chase Bank, N.A., as
                administrative agent for the banks and other financial
                institutions parties to the Credit Agreement, filed as Exhibit
                10.2 to Nebraska Book Company, Inc. Current Report on Form 8-K
                dated and filed on January 6, 2005, is incorporated herein by
                reference.

        10.15   Assumption Agreement, dated as of May 1, 2006, made by CBA, in
                favor of JPMorgan Chase Bank, N.A., as administrative agent for
                the banks and other financial institutions parties to the Credit
                Agreement, filed as Exhibit 10.3 to Nebraska Book Company, Inc.
                Current Report on Form 8-K dated May 4, 2006, is incorporated
                herein by reference.

        10.16   Assumption Agreement, dated as of May 1, 2007, made by Net
                Textstore LLC, in favor of JPMorgan Chase Bank, N.A., as
                administrative agent for the banks and other financial
                institutions parties to the Credit Agreement.

        10.17   Guarantee and Collateral Agreement, dated as of February 13,
                1998 made by NBC Acquisition Corp. and Nebraska Book Company,
                Inc. in favor of the Chase Manhattan Bank, as administrative
                agent, filed as Exhibit 10.2 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        10.18   Amended and Restated Guarantee and Collateral Agreement, dated
                March 4, 2004, by and among NBC Holdings Corp., NBC Acquisition
                Corp., Nebraska Book Company, Inc. and Specialty Books, Inc. in
                favor of JPMorgan Chase Bank, as administrative agent, filed as
                Exhibit 10.11 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4 (File No. 333-114891), is incorporated
                herein by reference.

        10.19   Purchase Agreement dated February 10, 1998 by and between
                Nebraska Book Company, Inc. and Chase Securities Inc., filed as
                Exhibit 10.3 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4, as amended (File No. 333-48221), is
                incorporated herein by reference.

        10.20   Purchase Agreement, dated as of March 4, 2004, by and among
                Nebraska Book Company, Inc. and J.P. Morgan Securities Inc.,
                Citigroup Global Markets Inc. and Fleet Securities, Inc., filed
                as Exhibit 10.13 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4 (File No. 333-114891), is incorporated
                herein by reference.

        10.21   Exchange and Registration Rights Agreement, dated as of February
                13, 1998 by and among Nebraska Book Company, Inc. and Chase
                Securities Inc., filed as Exhibit 4.2 to Nebraska Book Company,
                Inc. Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        10.22   Registration Rights Agreement, dated as of March 4, 2004, by and
                among Nebraska Book Company, Inc. and J.P. Morgan Securities
                Inc., Citigroup Global Markets Inc. and Fleet Securities, Inc.,
                filed as Exhibit 10.15 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4 (File No. 333-114891), is
                incorporated herein by reference.

                                       84
<PAGE>

        10.23*  Form of Memorandum of Understanding, dated as of February 13,
                1998 by and between NBC Acquisition Corp. and each of Mark W.
                Oppegard, Bruce E. Nevius, Larry R. Rempe, Kenneth F. Jirovsky,
                William H. Allen, Thomas A. Hoff and Ardean A. Arndt, filed as
                Exhibit 10.4 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4, as amended (File No. 333-48221), is
                incorporated herein by reference.

        10.24*  Memorandum of Understanding, dated as of December 22, 1998 by
                and between Nebraska Book Company, Inc. and Barry S. Major,
                Chief Operating Officer, filed as Exhibit 10.1 to Nebraska Book
                Company, Inc. Form 10-Q for the quarter ended December 31, 1998,
                is incorporated herein by reference.

        10.25*  Addendum to the Memorandum of Understanding, dated as of
                December 22, 1998 by and between Nebraska Book Company, Inc. and
                Barry S. Major, dated March 29, 2002, filed as Exhibit 10.9 to
                Nebraska Book Company, Inc. Form 10-K for the fiscal year ended
                March 31, 2002, is incorporated herein by reference.

        10.26*  Amended and Restated Secured Promissory Note dated July 9, 2002
                by and between NBC Acquisition Corp. and Barry S. Major, filed
                as Exhibit 10.4 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.27*  Memorandum of Understanding, dated as of July 1, 1999 by and
                between Nebraska Book Company, Inc. and Alan Siemek, Chief
                Financial Officer, filed as Exhibit 10.1 to Nebraska Book
                Company, Inc. Form 10-Q for the quarter ended September 30,
                1999, is incorporated herein by reference.

        10.28*  Addendum to the Memorandum of Understanding, dated as of July 1,
                1999 by and between Nebraska Book Company, Inc. and Alan Siemek,
                dated March 29, 2002, filed as Exhibit 10.11 to Nebraska Book
                Company, Inc. Form 10-K for the fiscal year ended March 31,
                2002, is incorporated herein by reference.

        10.29*  Amended and Restated Secured Promissory Note dated July 9, 2002
                by and between NBC Acquisition Corp. and Alan Siemek, filed as
                Exhibit 10.5 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.30*  Memorandum of Understanding, dated as of November 1, 1999 by and
                between Nebraska Book Company, Inc. and Michael J. Kelly, Vice
                President of E-commerce, filed as Exhibit 10.1 to Nebraska Book
                Company, Inc. Form 10-Q for the quarter ended December 31, 1999,
                is incorporated herein by reference.

        10.31*  Amended and Restated Secured Promissory Note dated July 9, 2002
                by and between NBC Acquisition Corp. and Michael J. Kelly, filed
                as Exhibit 10.6 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.32*  Memorandum of Understanding, dated as of April 17, 2001 by and
                between Nebraska Book Company, Inc. and Robert Rupe, Senior Vice
                President of the Bookstore Division, filed as Exhibit 10.1 to
                Nebraska Book Company, Inc. Form 10-Q for the quarter ended June
                30, 2001, is incorporated herein by reference.

        10.33*  Amended and Restated Secured Promissory Note dated July 9, 2002
                by and between NBC Acquisition Corp. and Robert Rupe, filed as
                Exhibit 10.7 to Nebraska Book Company, Inc. Form 10-Q for the
                quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.34*  Amendment to the Memorandums of Understanding by and between
                Nebraska Book Company, Inc. and each of Mark W. Oppegard, Larry
                R. Rempe, Kenneth F. Jirovsky, William H. Allen, Thomas A. Hoff,
                Barry S. Major, Alan Siemek, Michael J. Kelly, and Robert Rupe,
                dated March 4, 2004, filed as Exhibit 10.27 to Nebraska Book
                Company, Inc. Form 10-K for the fiscal year ended March 31,
                2004, is incorporated herein by reference.

        10.35*  NBC Acquisition Corp. 1995 Stock Incentive Plan adopted August
                31, 1995, filed as Exhibit 10.5 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

                                       85
<PAGE>

        10.36*  NBC Acquisition Corp. 1998 Performance Stock Option Plan adopted
                June 30, 1998, filed as Exhibit 10.1 to Nebraska Book Company,
                Inc. Form 10-Q for the quarter ended June 30, 1998, is
                incorporated herein by reference.

        10.37*  First Amendment, dated as of June 12, 2002, to the NBC
                Acquisition Corp. 1998 Performance Stock Option Plan adopted
                June 30, 1998, filed as Exhibit 10.2 to Nebraska Book Company,
                Inc. Form 10-Q for the quarter ended June 30, 2002, is
                incorporated herein by reference.

        10.38*  NBC Acquisition Corp. 1998 Stock Option Plan adopted June 30,
                1998, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Form
                10-Q for the quarter ended June 30, 1998, is incorporated herein
                by reference.

        10.39*  First Amendment, dated as of June 12, 2002, to the NBC
                Acquisition Corp. 1998 Stock Option Plan adopted June 30, 1998,
                filed as Exhibit 10.3 to Nebraska Book Company, Inc. Form 10-Q
                for the quarter ended June 30, 2002, is incorporated herein by
                reference.

        10.40*  NBC Acquisition Corp. 2003 Performance Stock Option Plan adopted
                July 1, 2003, filed as Exhibit 10.1 to Nebraska Book Company,
                Inc. Form 10-Q for the quarter ended September 30, 2003, is
                incorporated herein by reference.

        10.41*  NBC Acquisition Corp. 2003 Stock Option Plan adopted July 1,
                2003, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Form
                10-Q for the quarter ended September 30, 2003, is incorporated
                herein by reference.

        10.42*  NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004,
                filed as Exhibit 10.34 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4 (File No. 333-114891), is
                incorporated herein by reference.

        10.43*  NBC Holdings Corp. 2005 Restricted Stock Plan adopted September
                29, 2005, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
                Form 10-Q for the quarter ended September 30, 2005, is
                incorporated herein by reference.

        10.44*  Restricted Stock Purchase Agreement, dated as of March 31, 2006,
                between Holdings and Oppegard, filed as Exhibit 10.1 to Nebraska
                Book Company, Inc. Current Report on Form 8-K dated April 6,
                2006, is incorporated herein by reference.

        10.45*  Restricted Stock Purchase Agreement, dated as of March 31, 2006,
                between Holdings and Major, filed as Exhibit 10.2 to Nebraska
                Book Company, Inc. Current Report on Form 8-K dated April 6,
                2006, is incorporated herein by reference.

        10.46*  Restricted Stock Purchase Agreement, dated as of March 31, 2006,
                between Holdings and Siemek, filed as Exhibit 10.3 to Nebraska
                Book Company, Inc. Current Report on Form 8-K dated April 6,
                2006, is incorporated herein by reference.

        10.47*  Stock Repurchase Agreement, dated as of March 31, 2006, between
                Holdings and Oppegard, filed as Exhibit 10.4 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated April 6, 2006, is
                incorporated herein by reference.

        10.48*  Stock Repurchase Agreement, dated as of March 31, 2006, between
                Holdings and Major, filed as Exhibit 10.5 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated April 6, 2006, is
                incorporated herein by reference.

        10.49*  Stock Repurchase Agreement, dated as of March 31, 2006, between
                Holdings and Siemek, filed as Exhibit 10.6 to Nebraska Book
                Company, Inc. Current Report on Form 8-K dated April 6, 2006, is
                incorporated herein by reference.

        10.50*  Restricted Stock Plan Special Bonus Agreement, dated as of March
                31, 2006, between Nebraska Book and Oppegard, filed as Exhibit
                10.7 to Nebraska Book Company, Inc. Current Report on Form 8-K
                dated April 6, 2006, is incorporated herein by reference.

                                       86
<PAGE>

        10.51*  Restricted Stock Plan Special Bonus Agreement, dated as of March
                31, 2006, between Nebraska Book and Major, filed as Exhibit 10.8
                to Nebraska Book Company, Inc. Current Report on Form 8-K dated
                April 6, 2006, is incorporated herein by reference.

        10.52*  Restricted Stock Plan Special Bonus Agreement, dated as of March
                31, 2006, between Nebraska Book and Siemek, filed as Exhibit
                10.9 to Nebraska Book Company, Inc. Current Report on Form 8-K
                dated April 6, 2006, is incorporated herein by reference.

        10.53*  NBC Acquisition Corp. Senior Management Bonus Plan adopted June
                30, 1998, filed as Exhibit 10.3 to Nebraska Book Company, Inc.
                Form 10-Q for the quarter ended June 30, 1998, is incorporated
                herein by reference.

        10.54*  Form of Deferred Compensation Agreement by and among Nebraska
                Book Company, Inc. and each of Mark W. Oppegard, Bruce E.
                Nevius, Larry R. Rempe and Thomas A. Hoff, filed as Exhibit 10.6
                to Nebraska Book Company, Inc. Registration Statement on Form
                S-4, as amended (File No. 333-48221), is incorporated herein by
                reference.

        10.55*  Amendment of Form of Deferred Compensation Agreement, dated
                December 30, 2002, by and among Nebraska Book Company, Inc. and
                each of Mark W. Oppegard, Larry R. Rempe and Thomas A. Hoff,
                filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
                for the quarter ended December 31, 2002, is incorporated herein
                by reference.

        10.56*  NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.7
                to Nebraska Book Company, Inc. Registration Statement on Form
                S-4, as amended (File No. 333-48221), is incorporated herein by
                reference.

        10.57   Agreement for Purchase and Sale of Stock dated January 9, 1998
                by and among Nebraska Book Company, Inc. and Martin D. Levine,
                the Lauren E. Levine Grantor Trust and the Jonathan L. Levine
                Grantor Trust (the "Collegiate Stores Corporation Agreement"),
                filed as Exhibit 10.8.1 to Nebraska Book Company, Inc.
                Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        10.58   First Amendment dated January 23, 1998 to the Collegiate Stores
                Corporation Agreement, filed as Exhibit 10.8.2 to Nebraska Book
                Company, Inc. Registration Statement on Form S-4, as amended
                (File No. 333-48221), is incorporated herein by reference.

        10.59   Commercial Lease Agreement made and entered into March 8, 1989,
                by and among Robert J. Chaney, Mary Charlotte Chaney and Robert
                J. Chaney, as Trustee under the Last Will and Testament of James
                A Chaney, and Nebraska Book Company, Inc., filed as Exhibit 10.9
                to Nebraska Book Company, Inc. Registration Statement on Form
                S-4, as amended (File No. 333-48221), is incorporated herein by
                reference.

        10.60   Lease Agreement entered into as of September 1, 1986, by and
                among Odell Associates Limited Partnership and Nebraska Book
                Company, Inc., filed as Exhibit 10.10 to Nebraska Book Company,
                Inc. Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        10.61   Lease Agreement entered into as of September 1, 1986, by and
                among John B. DeVine, successor trustee of the Fred C. Ulrich
                Trust, as amended, and Nebraska Book Company, Inc., filed as
                Exhibit 10.11 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4, as amended (File No. 333-48221), is
                incorporated herein by reference.

        10.62   Lease Agreement entered into as of September 1, 1986 by and
                among Odell Associates Limited Partnership and Nebraska Book
                Company, Inc., filed as Exhibit 10.12 to Nebraska Book Company,
                Inc. Registration Statement on Form S-4, as amended (File No.
                333-48221), is incorporated herein by reference.

        10.63   Lease Agreement made and entered into October 12, 1988 by and
                among Hogarth Management and Nebraska Book Company, Inc., filed
                as Exhibit 10.13 to Nebraska Book Company, Inc. Registration
                Statement on Form S-4, as amended (File No. 333-48221), is
                incorporated herein by reference.

                                       87
<PAGE>

        12.1    Statements regarding computation of ratios, filed as Exhibit
                12.1 to Nebraska Book Company, Inc. Registration Statement on
                Form S-4 (File No. 333-114891), is incorporated herein by
                reference.

        14.1    Code of Business Conduct and Ethics and Code of Ethics for Our
                Principal Executive Officer and Senior Financial Officers for
                Nebraska Book Company, Inc., filed as Exhibit 14.1 to Nebraska
                Book Company, Inc. Form 10-K for the fiscal year ended March 31,
                2004, is incorporated herein by reference.

        21.1    Subsidiaries of Nebraska Book Company, Inc.

        31.1    Certification of Chief Executive Officer pursuant to Rules
                13a-15(e) of the Securities Exchange Act of 1934, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

        31.2    Certification of Chief Financial Officer pursuant to Rules
                13a-15(e) of the Securities Exchange Act of 1934, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

        32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.

        32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.

        99.1    Mirror Option Agreement between NBC Acquisition Corp. and NBC
                Holdings Corp., dated September 30, 2005, filed as Exhibit 99.1
                to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
                September 30, 2005, is incorporated herein by reference.

        99.2    Mirror Restricted Stock Agreement between NBC Acquisition Corp.
                and NBC Holdings Corp., dated March 31, 2006, filed as Exhibit
                99.2 to Nebraska Book Company, Inc. Form 10-K for the fiscal
                year ended March 31, 2006, is incorporated herein by reference.

    * - Management contracts or compensatory plans filed herewith or
incorporated by reference.

    All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are either not required
under the related instructions, are not applicable (and therefore have been
omitted), or the required disclosures are contained in the consolidated
financial statements included herein.

                                       88
<PAGE>

    Pursuant to the requirements of Section 13 or 15(d) 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.

                                NEBRASKA BOOK COMPANY, INC.


                                /s/ Mark W. Oppegard
                                ------------------------------------------------
                                Mark W. Oppegard
                                Chief Executive Officer, President, and Director
                                June 29, 2007

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


/s/  Mark W. Oppegard                            /s/  Mark L. Bono
----------------------------------------         -------------------------------
Mark W. Oppegard                                 Mark L. Bono
Chief Executive Officer, President               Director
and Director                                     June 29, 2007
June 29, 2007


/s/ Alan G. Siemek                               /s/  R. Sean Honey
----------------------------------------         -------------------------------
Alan G. Siemek                                   R. Sean Honey
Chief Financial Officer, Senior Vice             Director
President of Finance                             June 29, 2007
and Administration, Treasurer, and
Assistant Secretary
June 29, 2007


/s/  Barry S. Major
----------------------------------------
Barry S. Major
Director
June 29, 2007


    SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT:

    No annual report or proxy material with respect to any annual or other
meeting of security holders for the fiscal year ended March 31, 2007 has been,
or will be, sent to security holders.

                                       89
<PAGE>

                          FINANCIAL STATEMENT SCHEDULES



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
Nebraska Book Company, Inc.
Lincoln, Nebraska

    We have audited the consolidated financial statements of Nebraska Book
Company, Inc. (a wholly-owned subsidiary of NBC Acquisition Corp.) and
subsidiaries as of March 31, 2007 and 2006 and for each of the three years in
the period ended March 31, 2007 and have issued our report thereon dated June
28, 2007; such report is included elsewhere in this Form 10-K. Our audits also
included the financial statement schedule listed in Item 15(a)(2). This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.


/s/  Deloitte & Touche LLP

Lincoln, Nebraska
June 28, 2007


                                       90
<PAGE>
NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>
SCHEDULE II (ITEM 15(a)(2)) - VALUATION AND QUALIFYING ACCOUNTS
----------------------------------------------------------------------------------------------------------------

                                                             Charged to      Added
                                  Beginning of  Charged to      Other       through                    End of
                                  Fiscal Year    Costs and    Accounts       Stock         Net      Fiscal Year
                                    Balance      Expenses     (Revenue)  Acquisitions  Charge-Offs    Balance
                                  ------------ ------------ ------------ ------------  ------------ ------------
<S>                                <C>           <C>         <C>            <C>       <C>           <C>
FISCAL YEAR ENDED MARCH 31, 2007
  Allowance for doubtful accounts  $  510,839    $ 834,442   $         -    $510,846  $   (755,767) $ 1,100,360
  Allowance for sales returns       4,874,516            -    29,553,584           -   (29,470,010)   4,958,090

FISCAL YEAR ENDED MARCH 31, 2006
  Allowance for doubtful accounts     510,839      231,497             -           -      (231,497)     510,839
  Allowance for sales returns       6,630,962            -    31,251,607           -   (33,008,053)   4,874,516

FISCAL YEAR ENDED MARCH 31, 2005
  Allowance for doubtful accounts     510,839      315,958             -           -      (315,958)     510,839
  Allowance for sales returns       5,269,177            -    28,285,698           -   (26,923,913)   6,630,962

</TABLE>



                                       91
<PAGE>


                                  EXHIBIT INDEX

2.1     Agreement for Purchase and Sale of Stock, dated as of May 26, 1999 by
        and among Nebraska Book Company, Inc., Dennis Rother, and Larry Rother,
        filed as Exhibit 2.1 to Nebraska Book Company, Inc. Form 8-K, as
        amended, dated June 4, 1999, is incorporated herein by reference.

2.2     Agreement of Sale, dated as of September 30, 1999 by and among Nebraska
        Book Company, Inc., Michigan College Book Company, Inc., Ned's Berkeley
        Book Company, Inc., Ned Shure, Fred Shure, and Jack Barenfanger filed as
        Exhibit 2.1 to Nebraska Book Company, Inc. Form 8-K, as amended, dated
        November 12, 1999, is incorporated herein by reference.

2.3     Agreement of Sale, as amended, dated as of May 11, 2001 between Nebraska
        Book Company, Inc. and University Co-operative Society, filed as Exhibit
        2.1 to Nebraska Book Company, Inc. Form 8-K dated May 11, 2001, is
        incorporated herein by reference.

2.4     Agreement and Plan of Merger, dated as of July 1, 2003, by and among
        TheCampusHub.com, Inc., Nebraska Book Company, Inc. and NBC Acquisition
        Corp., filed as Exhibit 2.1 to Nebraska Book Company, Inc. Form 10-Q for
        the quarter ended June 30, 2003, is incorporated herein by reference.

2.5     Share Purchase Agreement, dated as of April 2, 2006, by and among
        Nebraska Book, CBA and the Sellers referenced therein, filed as Exhibit
        2.1 to Nebraska Book Company, Inc. Current Report on Form 8-K dated
        April 6, 2006, is incorporated herein by reference.

2.6     Second Amendment to Share Purchase Agreement, dated as of April 30,
        2006, by and among Nebraska Book, CBA and the Sellers referenced
        therein, filed as Exhibit 2.1 to Nebraska Book Company, Inc. Current
        Report on Form 8-K dated May 4, 2006, is incorporated herein by
        reference.

3.1     Certificate of Incorporation, as amended, of Nebraska Book Company,
        Inc., filed as Exhibit 3.1 to Nebraska Book Company, Inc. Registration
        Statement on Form S-4, as amended (File No. 333-48221), is incorporated
        herein by reference.

3.2     First Restated By-laws of Nebraska Book Company, Inc., filed as Exhibit
        3.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
        September 30, 2003, is incorporated herein by reference.

4.1     Indenture, dated as of February 13, 1998 by and between Nebraska Book
        Company, Inc. and United States Trust Company of New York, as Trustee,
        filed as Exhibit 4.1 to Nebraska Book Company, Inc. Registration
        Statement on Form S-4, as amended (File No. 333-48221), is incorporated
        herein by reference.

4.2     Supplemental Indenture, dated as of July 1, 2002, by and among Specialty
        Books, Inc., Nebraska Book Company, Inc., and The Bank of New York, as
        Trustee, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
        for the quarter ended September 30, 2002, is incorporated herein by
        reference.

4.3     Second Supplemental Indenture, dated March 4, 2004, by and among
        Nebraska Book Company, Inc., the subsidiary guarantor named therein and
        The Bank of New York, as Trustee, filed as Exhibit 4.3 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4 (File No. 333-114891),
        is incorporated herein by reference.

4.4     Supplemental Indenture, dated as of December 31, 2004, by and among NBC
        Textbooks LLC, Nebraska Book Company, Inc., each other then existing
        Subsidiary Guarantor under the Indenture, and the Trustee, filed as
        Exhibit 10.1 to Nebraska Book Company. Inc. Current Report on Form 8-K
        dated and filed on January 6, 2005, is incorporated herein by reference.

4.5     Supplemental Indenture, dated as of May 1, 2006, by and among CBA,
        Nebraska Book Company, Inc., each other then existing Subsidiary
        Guarantor under the Indenture, and the Trustee, filed as Exhibit 10.2 to
        Nebraska Book Company, Inc. Current Report on Form 8-K dated May 4,
        2006, is incorporated herein by reference.

                                       92
<PAGE>

4.6     Supplemental Indenture, dated as of May 1, 2007, by and among Net
        Textstore LLC, Nebraska Book Company, Inc., each other then existing
        Subsidiary Guarantor under the Indenture, and the Trustee, filed as
        Exhibit 10.1 to Nebraska Book Company, Inc. Current Report on Form 8-K
        dated May 7, 2007, is incorporated herein by reference.

4.7     Form of Initial Note of Nebraska Book Company, Inc. (included in Exhibit
        4.1 as Exhibit A), filed as Exhibit 4.3 to Nebraska Book Company, Inc.
        Registration Statement on Form S-4, as amended (File No. 333-48221), is
        incorporated herein by reference.

4.8     Form of Exchange Note of Nebraska Book Company, Inc. (included in
        Exhibit 4.1 as Exhibit B), filed as Exhibit 4.4 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

4.9     Indenture, dated March 4, 2004, by and among Nebraska Book Company,
        Inc., the subsidiary guarantors parties thereto and BNY Midwest Trust
        Company as Trustee, filed as Exhibit 4.6 to Nebraska Book Company, Inc.
        Registration Statement on Form S-4 (File No. 333-114891), is
        incorporated herein by reference.

4.10    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in Exhibit
        4.6), filed as Exhibit 4.7 to Nebraska Book Company, Inc. Registration
        Statement on Form S-4 (File No. 333-114891), is incorporated herein by
        reference.

4.11    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8% Senior
        Subordinated Note Due 2012, filed as Exhibit 4.8 to Nebraska Book
        Company, Inc. Form 10-K for the fiscal year ended March 31, 2004, is
        incorporated herein by reference.

10.1    Credit Agreement dated as of February 13, 1998 by and among NBC
        Acquisition Corp., Nebraska Book Company, Inc., the Chase Manhattan Bank
        and certain other financial institutions, filed as Exhibit 10.1 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4, as
        amended (File No. 333-48221), is incorporated herein by reference.

10.2    First Amendment, dated as of May 21, 1999, to the Credit Agreement,
        dated as of February 13, 1998 by and among NBC Acquisition Corp.,
        Nebraska Book Company, Inc., the Chase Manhattan Bank, and certain other
        financial institutions, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Form 10-Q for the quarter ended June 30, 1999, is incorporated
        herein by reference.

10.3    Second Amendment and Waiver, dated as of April 27, 2000, to the Credit
        Agreement, dated as of February 13, 1998, by and among NBC Acquisition
        Corp., Nebraska Book Company, Inc., the Chase Manhattan Bank, and
        certain other financial institutions, filed as Exhibit 10.1 to Nebraska
        Book Company, Inc. Form 10-Q for the quarter ended June 30, 2000, is
        incorporated herein by reference.

10.4    Third Amendment, dated as of December 20, 2001, to the Credit Agreement,
        dated as of February 13, 1998, by and among NBC Acquisition Corp.,
        Nebraska Book Company, Inc., J.P. Morgan Chase Bank, and certain other
        financial institutions, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Form 10-Q for the quarter ended December 31, 2001, is incorporated
        herein by reference.

10.5    Fourth Amendment and Waiver, dated as of June 4, 2002, to and under the
        Credit Agreement, dated as of February 13, 1998, by and among NBC
        Acquisition Corp., Nebraska Book Company, Inc., JPMorgan Chase Bank, and
        certain other financial institutions, filed as Exhibit 10.1 to Nebraska
        Book Company, Inc. Form 10-Q for the quarter ended June 30, 2002, is
        incorporated herein by reference.

10.6    Fifth Amendment and Waiver, dated as of June 13, 2003, to and under the
        Credit Agreement, dated as of February 13, 1998, by and among NBC
        Acquisition Corp., Nebraska Book Company, Inc., JPMorgan Chase Bank, and
        certain other financial institutions, filed as Exhibit 10.1 to Nebraska
        Book Company, Inc. Form 10-Q for the quarter ended June 30, 2003, is
        incorporated herein by reference.

                                       93
<PAGE>

10.7    Amended and Restated Credit Agreement, dated February 13, 1998, as
        amended and restated as of December 10, 2003, by and among NBC
        Acquisition Corp., Nebraska Book Company, Inc., and the other parties
        thereto, filed as Exhibit 99.1 to Nebraska Book Company, Inc. Current
        Report on Form 8-K dated December 10, 2003, is incorporated herein by
        reference.

10.8    Amended and Restated Credit Agreement, dated as of March 4, 2004, by and
        among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company,
        Inc., the Several Lenders parties thereto, JPMorgan Chase Bank as
        Administrative Agent and Collateral Agent, Citigroup Global Markets Inc.
        as Syndication Agent, and Fleet National Bank and Wells Fargo Bank N.A.,
        as Co-Documentation Agents, filed as Exhibit 10.8 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4 (File No. 333-114891),
        is incorporated herein by reference.

10.9    Second Amendment, dated as of October 20, 2004, to the Amended and
        Restated Credit Agreement, dated as of March 4, 2004, by and among NBC
        Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the
        Several Lenders parties thereto, JPMorgan Chase Bank as Administrative
        Agent and Collateral Agent, Citigroup Global Markets Inc. as Syndication
        Agent, and Fleet National Bank and Wells Fargo Bank N.A., as
        Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Current Report on Form 8-K dated and filed on October 26, 2004, is
        incorporated herein by reference.

10.10   Third Amendment, dated as of August 1, 2005, to the Amended and Restated
        Credit Agreement, dated as of March 4, 2004, by and among NBC Holdings
        Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Several
        Lenders parties thereto, JPMorgan Chase Bank, N.A. as Administrative
        Agent and Collateral Agent, Citigroup Global Markets Inc. as Syndication
        Agent, and Bank of America, N.A. and Wells Fargo Bank N.A., as
        Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Form 10-Q for the quarter ended June 30, 2005, is incorporated
        herein by reference.

10.11   Fourth Amendment, dated as of April 26, 2006, to the Amended and
        Restated Credit Agreement, dated as of March 4, 2004, and as amended by
        the First Amendment thereto, dated as of August 6, 2004, the Second
        Amendment thereto, dated as of October 20, 2004 and the Third Amendment
        thereto, dated as of August 1, 2005, among Nebraska Book, NBC Holdings
        Corp., NBC Acquisition Corp., the lenders party from time to time
        thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase
        Bank),as administrative agent and collateral agent, Citigroup Global
        Markets Inc. as syndication agent, and Bank of America, N.A. (as
        successor by merger to Fleet National Bank) and Wells Fargo Bank N.A.,
        as co-documentation agents, filed as Exhibit 10.1 to Nebraska Book
        Company, Inc. Current Report on Form 8-K dated May 4, 2006, is
        incorporated herein by reference.

10.12   Fifth Amendment, dated as of March 30, 2007, to the Amended and Restated
        Credit Agreement, dated as of February 13, 1998, as amended and restated
        as of December 10, 2003, as further amended and restated as of March 4,
        2004, and as amended by the First Amendment thereto, dated as of August
        6, 2004, the Second Amendment thereto, dated as of October 20, 2004 the
        Third Amendment thereto, dated as of August 1, 2005, and the Fourth
        Amendment thereto, dated as of April 26, 2006, among Nebraska Book, NBC
        Holdings Corp., NBC Acquisition Corp., the lenders party from time to
        time thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan
        Chase Bank),as administrative agent and collateral agent, Citigroup
        Global Markets Inc. as syndication agent, and Bank of America, N.A. (as
        successor by merger to Fleet National Bank) and Wells Fargo Bank N.A.,
        as co-documentation agents, filed as Exhibit 10.1 to Nebraska Book
        Company, Inc. Current Report on Form 8-K dated April 3, 2007, is
        incorporated herein by reference.

10.13   Assumption Agreement, dated as of July 1, 2002 between Specialty Books,
        Inc. and JPMorgan Chase Bank, as Administrative Agent, filed as Exhibit
        10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
        September 30, 2002, is incorporated herein by reference.

10.14   Assumption Agreement, dated as of December 31, 2004, made by NBC
        Textbooks LLC, in favor of JPMorgan Chase Bank, N.A., as administrative
        agent for the banks and other financial institutions parties to the
        Credit Agreement, filed as Exhibit 10.2 to Nebraska Book Company, Inc.
        Current Report on Form 8-K dated and filed on January 6, 2005, is
        incorporated herein by reference.

                                       94
<PAGE>

10.15   Assumption Agreement, dated as of May 1, 2006, made by CBA, in favor of
        JPMorgan Chase Bank, N.A., as administrative agent for the banks and
        other financial institutions parties to the Credit Agreement, filed as
        Exhibit 10.3 to Nebraska Book Company, Inc. Current Report on Form 8-K
        dated May 4, 2006, is incorporated herein by reference.

10.16   Assumption Agreement, dated as of May 1, 2007, made by Net Textstore
        LLC, in favor of JPMorgan Chase Bank, N.A., as administrative agent for
        the banks and other financial institutions parties to the Credit
        Agreement.

10.17   Guarantee and Collateral Agreement, dated as of February 13, 1998 made
        by NBC Acquisition Corp. and Nebraska Book Company, Inc. in favor of the
        Chase Manhattan Bank, as administrative agent, filed as Exhibit 10.2 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4, as
        amended (File No. 333-48221), is incorporated herein by reference.

10.18   Amended and Restated Guarantee and Collateral Agreement, dated March 4,
        2004, by and among NBC Holdings Corp., NBC Acquisition Corp., Nebraska
        Book Company, Inc. and Specialty Books, Inc. in favor of JPMorgan Chase
        Bank, as administrative agent, filed as Exhibit 10.11 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4 (File No. 333-114891),
        is incorporated herein by reference.

10.19   Purchase Agreement dated February 10, 1998 by and between Nebraska Book
        Company, Inc. and Chase Securities Inc., filed as Exhibit 10.3 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4, as
        amended (File No. 333-48221), is incorporated herein by reference.

10.20   Purchase Agreement, dated as of March 4, 2004, by and among Nebraska
        Book Company, Inc. and J.P. Morgan Securities Inc., Citigroup Global
        Markets Inc. and Fleet Securities, Inc., filed as Exhibit 10.13 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4 (File No.
        333-114891), is incorporated herein by reference.

10.21   Exchange and Registration Rights Agreement, dated as of February 13,
        1998 by and among Nebraska Book Company, Inc. and Chase Securities Inc.,
        filed as Exhibit 4.2 to Nebraska Book Company, Inc. Registration
        Statement on Form S-4, as amended (File No. 333-48221), is incorporated
        herein by reference.

10.22   Registration Rights Agreement, dated as of March 4, 2004, by and among
        Nebraska Book Company, Inc. and J.P. Morgan Securities Inc., Citigroup
        Global Markets Inc. and Fleet Securities, Inc., filed as Exhibit 10.15
        to Nebraska Book Company, Inc. Registration Statement on Form S-4 (File
        No. 333-114891), is incorporated herein by reference.

10.23*  Form of Memorandum of Understanding, dated as of February 13, 1998 by
        and between NBC Acquisition Corp. and each of Mark W. Oppegard, Bruce E.
        Nevius, Larry R. Rempe, Kenneth F. Jirovsky, William H. Allen, Thomas A.
        Hoff and Ardean A. Arndt, filed as Exhibit 10.4 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

10.24*  Memorandum of Understanding, dated as of December 22, 1998 by and
        between Nebraska Book Company, Inc. and Barry S. Major, Chief Operating
        Officer, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
        for the quarter ended December 31, 1998, is incorporated herein by
        reference.

10.25*  Addendum to the Memorandum of Understanding, dated as of December 22,
        1998 by and between Nebraska Book Company, Inc. and Barry S. Major,
        dated March 29, 2002, filed as Exhibit 10.9 to Nebraska Book Company,
        Inc. Form 10-K for the fiscal year ended March 31, 2002, is incorporated
        herein by reference.

10.26*  Amended and Restated Secured Promissory Note dated July 9, 2002 by and
        between NBC Acquisition Corp. and Barry S. Major, filed as Exhibit 10.4
        to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
        2002, is incorporated herein by reference.

                                       95
<PAGE>

10.27*  Memorandum of Understanding, dated as of July 1, 1999 by and between
        Nebraska Book Company, Inc. and Alan Siemek, Chief Financial Officer,
        filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
        quarter ended September 30, 1999, is incorporated herein by reference.

10.28*  Addendum to the Memorandum of Understanding, dated as of July 1, 1999 by
        and between Nebraska Book Company, Inc. and Alan Siemek, dated March 29,
        2002, filed as Exhibit 10.11 to Nebraska Book Company, Inc. Form 10-K
        for the fiscal year ended March 31, 2002, is incorporated herein by
        reference.

10.29*  Amended and Restated Secured Promissory Note dated July 9, 2002 by and
        between NBC Acquisition Corp. and Alan Siemek, filed as Exhibit 10.5 to
        Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
        2002, is incorporated herein by reference.

10.30*  Memorandum of Understanding, dated as of November 1, 1999 by and between
        Nebraska Book Company, Inc. and Michael J. Kelly, Vice President of
        E-commerce, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form
        10-Q for the quarter ended December 31, 1999, is incorporated herein by
        reference.

10.31*  Amended and Restated Secured Promissory Note dated July 9, 2002 by and
        between NBC Acquisition Corp. and Michael J. Kelly, filed as Exhibit
        10.6 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June
        30, 2002, is incorporated herein by reference.

10.32*  Memorandum of Understanding, dated as of April 17, 2001 by and between
        Nebraska Book Company, Inc. and Robert Rupe, Senior Vice President of
        the Bookstore Division, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Form 10-Q for the quarter ended June 30, 2001, is incorporated
        herein by reference.

10.33*  Amended and Restated Secured Promissory Note dated July 9, 2002 by and
        between NBC Acquisition Corp. and Robert Rupe, filed as Exhibit 10.7 to
        Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
        2002, is incorporated herein by reference.

10.34*  Amendment to the Memorandums of Understanding by and between Nebraska
        Book Company, Inc. and each of Mark W. Oppegard, Larry R. Rempe, Kenneth
        F. Jirovsky, William H. Allen, Thomas A. Hoff, Barry S. Major, Alan
        Siemek, Michael J. Kelly, and Robert Rupe, dated March 4, 2004, filed as
        Exhibit 10.27 to Nebraska Book Company, Inc. Form 10-K for the fiscal
        year ended March 31, 2004, is incorporated herein by reference.

10.35*  NBC Acquisition Corp. 1995 Stock Incentive Plan adopted August 31, 1995,
        filed as Exhibit 10.5 to Nebraska Book Company, Inc. Registration
        Statement on Form S-4, as amended (File No. 333-48221), is incorporated
        herein by reference.

10.36*  NBC Acquisition Corp. 1998 Performance Stock Option Plan adopted June
        30, 1998, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q
        for the quarter ended June 30, 1998, is incorporated herein by
        reference.

10.37*  First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp.
        1998 Performance Stock Option Plan adopted June 30, 1998, filed as
        Exhibit 10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter
        ended June 30, 2002, is incorporated herein by reference.

10.38*  NBC Acquisition Corp. 1998 Stock Option Plan adopted June 30, 1998,
        filed as Exhibit 10.2 to Nebraska Book Company, Inc. Form 10-Q for the
        quarter ended June 30, 1998, is incorporated herein by reference.

10.39*  First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp.
        1998 Stock Option Plan adopted June 30, 1998, filed as Exhibit 10.3 to
        Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
        2002, is incorporated herein by reference.

10.40*  NBC Acquisition Corp. 2003 Performance Stock Option Plan adopted July 1,
        2003, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for
        the quarter ended September 30, 2003, is incorporated herein by
        reference.

                                       96
<PAGE>

10.41*  NBC Acquisition Corp. 2003 Stock Option Plan adopted July 1, 2003, filed
        as Exhibit 10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter
        ended September 30, 2003, is incorporated herein by reference.

10.42*  NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004, filed
        as Exhibit 10.34 to Nebraska Book Company, Inc. Registration Statement
        on Form S-4 (File No. 333-114891), is incorporated herein by reference.

10.43*  NBC Holdings Corp. 2005 Restricted Stock Plan adopted September 29,
        2005, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for
        the quarter ended September 30, 2005, is incorporated herein by
        reference.

10.44*  Restricted Stock Purchase Agreement, dated as of March 31, 2006, between
        Holdings and Oppegard, filed as Exhibit 10.1 to Nebraska Book Company,
        Inc. Current Report on Form 8-K dated April 6, 2006, is incorporated
        herein by reference.

10.45*  Restricted Stock Purchase Agreement, dated as of March 31, 2006, between
        Holdings and Major, filed as Exhibit 10.2 to Nebraska Book Company, Inc.
        Current Report on Form 8-K dated April 6, 2006, is incorporated herein
        by reference.

10.46*  Restricted Stock Purchase Agreement, dated as of March 31, 2006, between
        Holdings and Siemek, filed as Exhibit 10.3 to Nebraska Book Company,
        Inc. Current Report on Form 8-K dated April 6, 2006, is incorporated
        herein by reference.

10.47*  Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings
        and Oppegard, filed as Exhibit 10.4 to Nebraska Book Company, Inc.
        Current Report on Form 8-K dated April 6, 2006, is incorporated herein
        by reference.

10.48*  Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings
        and Major, filed as Exhibit 10.5 to Nebraska Book Company, Inc. Current
        Report on Form 8-K dated April 6, 2006, is incorporated herein by
        reference.

10.49*  Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings
        and Siemek, filed as Exhibit 10.6 to Nebraska Book Company, Inc. Current
        Report on Form 8-K dated April 6, 2006, is incorporated herein by
        reference.

10.50*  Restricted Stock Plan Special Bonus Agreement, dated as of March 31,
        2006, between Nebraska Book and Oppegard, filed as Exhibit 10.7 to
        Nebraska Book Company, Inc. Current Report on Form 8-K dated April 6,
        2006, is incorporated herein by reference.

10.51*  Restricted Stock Plan Special Bonus Agreement, dated as of March 31,
        2006, between Nebraska Book and Major, filed as Exhibit 10.8 to Nebraska
        Book Company, Inc. Current Report on Form 8-K dated April 6, 2006, is
        incorporated herein by reference.

10.52*  Restricted Stock Plan Special Bonus Agreement, dated as of March 31,
        2006, between Nebraska Book and Siemek, filed as Exhibit 10.9 to
        Nebraska Book Company, Inc. Current Report on Form 8-K dated April 6,
        2006, is incorporated herein by reference.

10.53*  NBC Acquisition Corp. Senior Management Bonus Plan adopted June 30,
        1998, filed as Exhibit 10.3 to Nebraska Book Company, Inc. Form 10-Q for
        the quarter ended June 30, 1998, is incorporated herein by reference.

10.54*  Form of Deferred Compensation Agreement by and among Nebraska Book
        Company, Inc. and each of Mark W. Oppegard, Bruce E. Nevius, Larry R.
        Rempe and Thomas A. Hoff, filed as Exhibit 10.6 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

                                       97
<PAGE>

10.55*  Amendment of Form of Deferred Compensation Agreement, dated December 30,
        2002, by and among Nebraska Book Company, Inc. and each of Mark W.
        Oppegard, Larry R. Rempe and Thomas A. Hoff, filed as Exhibit 10.1 to
        Nebraska Book Company, Inc. Form 10-Q for the quarter ended December 31,
        2002, is incorporated herein by reference.

10.56*  NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.7 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4, as
        amended (File No. 333-48221), is incorporated herein by reference.

10.57   Agreement for Purchase and Sale of Stock dated January 9, 1998 by and
        among Nebraska Book Company, Inc. and Martin D. Levine, the Lauren E.
        Levine Grantor Trust and the Jonathan L. Levine Grantor Trust (the
        "Collegiate Stores Corporation Agreement"), filed as Exhibit 10.8.1 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4, as
        amended (File No. 333-48221), is incorporated herein by reference.

10.58   First Amendment dated January 23, 1998 to the Collegiate Stores
        Corporation Agreement, filed as Exhibit 10.8.2 to Nebraska Book Company,
        Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

10.59   Commercial Lease Agreement made and entered into March 8, 1989, by and
        among Robert J. Chaney, Mary Charlotte Chaney and Robert J. Chaney, as
        Trustee under the Last Will and Testament of James A Chaney, and
        Nebraska Book Company, Inc., filed as Exhibit 10.9 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

10.60   Lease Agreement entered into as of September 1, 1986, by and among Odell
        Associates Limited Partnership and Nebraska Book Company, Inc., filed as
        Exhibit 10.10 to Nebraska Book Company, Inc. Registration Statement on
        Form S-4, as amended (File No. 333-48221), is incorporated herein by
        reference.

10.61   Lease Agreement entered into as of September 1, 1986, by and among John
        B. DeVine, successor trustee of the Fred C. Ulrich Trust, as amended,
        and Nebraska Book Company, Inc., filed as Exhibit 10.11 to Nebraska Book
        Company, Inc. Registration Statement on Form S-4, as amended (File No.
        333-48221), is incorporated herein by reference.

10.62   Lease Agreement entered into as of September 1, 1986 by and among Odell
        Associates Limited Partnership and Nebraska Book Company, Inc., filed as
        Exhibit 10.12 to Nebraska Book Company, Inc. Registration Statement on
        Form S-4, as amended (File No. 333-48221), is incorporated herein by
        reference.

10.63   Lease Agreement made and entered into October 12, 1988 by and among
        Hogarth Management and Nebraska Book Company, Inc., filed as Exhibit
        10.13 to Nebraska Book Company, Inc. Registration Statement on Form S-4,
        as amended (File No. 333-48221), is incorporated herein by reference.

12.1    Statements regarding computation of ratios, filed as Exhibit 12.1 to
        Nebraska Book Company, Inc. Registration Statement on Form S-4 (File No.
        333-114891), is incorporated herein by reference.

14.1    Code of Business Conduct and Ethics and Code of Ethics for Our Principal
        Executive Officer and Senior Financial Officers for Nebraska Book
        Company, Inc., filed as Exhibit 14.1 to Nebraska Book Company, Inc. Form
        10-K for the fiscal year ended March 31, 2004, is incorporated herein by
        reference.

21.1    Subsidiaries of Nebraska Book Company, Inc.

31.1    Certification of Chief Executive Officer pursuant to Rules 13a-15(e) of
        the Securities Exchange Act of 1934, as adopted pursuant to Section 302
        of the Sarbanes-Oxley Act of 2002.

31.2    Certification of Chief Financial Officer pursuant to Rules 13a-15(e) of
        the Securities Exchange Act of 1934, as adopted pursuant to Section 302
        of the Sarbanes-Oxley Act of 2002.

                                       98
<PAGE>

32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002.

32.2    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002.

99.1    Mirror Option Agreement between NBC Acquisition Corp. and NBC Holdings
        Corp., dated September 30, 2005, filed as Exhibit 99.1 to Nebraska Book
        Company, Inc. Form 10-Q for the quarter ended September 30, 2005, is
        incorporated herein by reference.

99.2    Mirror Restricted Stock Agreement between NBC Acquisition Corp. and NBC
        Holdings Corp., dated March 31, 2006, filed as Exhibit 99.2 to Nebraska
        Book Company, Inc. Form 10-K for the fiscal year ended March 31, 2006,
        is incorporated herein by reference.

    * - Management contracts or compensatory plans filed herewith or
incorporated by reference.

    All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are either not required
under the related instructions, are not applicable (and therefore have been
omitted), or the required disclosures are contained in the consolidated
financial statements included herein.


                                       99