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, 2008

                                       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, a non-accelerated filer or a smaller reporting company.
See definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] NON-ACCELERATED FILER [X]
Smaller reporting company [ ]

     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 26, 2008.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

                           Total Number of Pages: 103

                             Exhibit Index: PAGE 96

                                       1
<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.......32
Item 8       Financial Statements and Supplementary Data......................34
Item 9       Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure.........................................71
Item 9A      Controls and Procedures..........................................71
Item 9B      Other Information................................................71

PART III:

Item 10      Directors, Executive Officers, and Corporate Governance..........72
Item 11      Executive Compensation...........................................73
Item 12      Security Ownership of Certain Beneficial Owners and Management
             and Related Stockholder Matters..................................82
Item 13      Certain Relationships and Related Transactions, and
             Director Independence............................................83
Item 14      Principal Accounting Fees and Services...........................83

PART IV:

Item 15      Exhibits, Financial Statement Schedules..........................85
Signatures....................................................................93
Supplemental Information to be Furnished......................................93
Financial Statement Schedule II - Valuation and Qualifying Accounts...........94
Exhibit Index.................................................................96

                                       2

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                                     PART I.

                                ITEM 1. BUSINESS.

    References in this Annual Report on Form 10-K to the "Company" refer to
Nebraska Book Company, Inc., to "NBC" refer to our parent company, NBC
Acquisition Corp., and to "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 used 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, 2008, we operated 260 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 108,000 textbook titles
and selling more than 6.8 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 consulting
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
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. Today, we service the college bookstore industry
through our Bookstore, Textbook, and Complementary Services Divisions.

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    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, 2008, we operated 260 college bookstores on or adjacent to college
campuses. Of these 260 bookstores, 131 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.

    Our college bookstores are located at college campuses of all sizes,
including some of the nation's largest campuses, such as: Miami-Dade College;
Arizona State University; Ohio 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; University of Southern
California; 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).

    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 900 college bookstore locations, and we have
an installed base of approximately 100 college bookstore locations for our
textbook management control systems. In total, including our own bookstores,
almost 1,000 college bookstore locations use our software products.

    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. Over 480 stores license this technology from us.

    In January 1998, we acquired Connect 2 One (formerly Collegiate Stores
Corporation), a centralized buying service for over 750 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.

    We also provide a consulting and store design program to assist college
bookstores in store presentation and layout.

                                       4
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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. In addition to
ongoing efforts to drive in-store revenue growth, we also intend to continue to
pursue revenue growth over the Internet involving third-party websites.

    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.

    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
distance education distribution, our centralized buying group, store design
consulting and other technology-related programs.

INDUSTRY OVERVIEW

    Based on recent industry trade data from the National Association of College
Stores, the college bookstore industry remains strong, with approximately 4,500
college stores generating annual sales of approximately $9.8 billion to college
students and other consumers in the United States. Sales of textbooks and other
education materials used for classroom instruction comprise over fifty percent
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.

    COLLEGE BOOKSTORE MARKET. College stores generally fall into three
categories: (i) INSTITUTIONAL -- stores that are primarily owned and operated by
institutions of higher learning; (ii) CONTRACT-MANAGED -- stores owned by
institutions of higher learning and managed by outside, private companies,
typically found on-campus; and (iii) INDEPENDENT STORES -- privately owned and
operated stores, generally located off campus.

    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.

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    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 (for the fall semester), 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 nine to ten fiscal years, we have
been marketing our exclusive supply program to the industry. This program had
over 280 participating bookstores at the end of fiscal year 2008. 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 2008, over 580 bookstores were
participating in this program, approximately 270 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.

PRODUCTS AND SERVICES

    BOOKSTORE DIVISION. As of March 31, 2008, we operated 260 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, external
customer revenues (revenues excluding intercompany revenues) of our bookstores
from activities other than used and new textbook sales have been between 17.2%
and 18.7% 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 our
proprietary software applications. 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 174,000 titles
in order to better serve our customers.

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    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, external customer revenues of Specialty Books have been
between 44.4% and 50.2% of total Complementary Services Division revenues.

    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 900 college
bookstore locations, and we have an installed base of approximately 100 college
bookstore locations for our textbook management control systems. In total,
including our own bookstores, almost 1,000 college bookstore locations use 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. We also offer a digital delivery solution which allows
a college bookstore to offer students the option of purchasing E-books via
download in addition to new and used textbooks. On April 14, 2008, we announced
an agreement with CourseSmart, a comprehensive supplier of digital course
materials, which establishes us as CourseSmart's preferred supplier of E-books
to the college bookstore community.

    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 750 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.

    We also provide a consulting and store design program to assist college
bookstores in store presentation and layout.

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, 2008 we operated 260 college bookstores nationwide, having
expanded from 109 bookstores at the beginning of fiscal year 2004. During fiscal
year 2008 we completed the acquisition of 10 bookstore locations, initiated the
contract-management of 10 bookstore locations, and established the start-up of 3
bookstore locations.

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    The table below highlights certain information regarding our bookstores
added and closed through March 31, 2008.

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


       2004        109          9            5           113
       2005        113         11            -           124
       2006        124         17            2           139
       2007        139        120           15           244
       2008        244         23            7           260

---------

(1) 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. In fiscal
    year 2008, the recurrence of disappointing operating results at two
    off-campus bookstore locations led to their closure while five
    contract-managed agreements involving on-campus bookstores were not renewed.

    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.

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 31 account representatives
(as of March 31, 2008) 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.

                                       8
<PAGE>

    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 shelve 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. External customer
returns over the past three fiscal years have averaged approximately 23.2% 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.

INFORMATION TECHNOLOGY

    We believe that we can enhance efficiency, profitability and competitiveness
through investments in technology. Because our solutions create a competitive
advantage, establish efficiencies and ensure cost-effectiveness of both our
operations and the operations of our bookstore customers and suppliers, some of
our proprietary software applications are currently in patent pending status
with the United States Patent and Trademark Office. Additionally, we have
registered trademarks for many of our software product names where brand
recognition may be an important factor.

    The center of our technology infrastructure revolves around PRISM and
WinPRISM, our proprietary college store management, textbook management, point
of sale, and inventory control systems. With more than a combined 25 years of
availability in the marketplace, these proven software applications are
maintained and continuously enhanced by a dedicated team of development and
support professionals. In addition, we have developed integrated e-commerce
software and service solutions, allowing college bookstores to launch their own
e-commerce site and effectively compete against other online textbook sellers by
offering both print and digital textbooks and both traditional and
non-traditional store merchandise online. We also develop, license or obtain
certain rights related to other software designed to strengthen our e-commerce
capabilities. Our technology operations process order entry, control inventory,
generate purchase orders and customer invoices, generate various sales reports,
and process and retrieve textbook information.

    In addition to using our technology for our own benefit through management
and inventory control, we license the use of certain technology to bookstores.
The use of our software by bookstore customers and suppliers helps solidify the
business relationship, resulting in increased sales and access to additional
inventory.

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

    Beginning late in fiscal year 2008, we embarked on a project to replace our
internally-developed general ledger system with a general ledger/business
planning and consolidation solution from SAP. We anticipate that the new
solution will be in place and functional during fiscal year 2009. The new
solution will, among other things, provide us with greater flexibility in
recording and analyzing our operating results and streamlining our budgeting
process.

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;
Arizona State University; Ohio 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.


                                       9
<PAGE>

    We sell our Textbook and certain Complementary Services Division products
and services to college bookstores throughout North America, though primarily
the United States. 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; University of
Southern California; and San Diego State University. Our 25 largest Textbook
Division customers accounted for approximately 3.1% of our fiscal year 2008
consolidated revenues. No single Textbook Division customer accounted for more
than 1.0% of our fiscal year 2008 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. For the
fiscal years ended March 31, 2008, 2007 and 2006, one institution accounted for
approximately 63%, 45% and 38%, respectively, of distance education program
external customer revenues.

    No single customer accounted for more than 10.0% of our consolidated
revenues in fiscal year 2008, 2007, or 2006.

COMPETITION

    We compete with a variety of other companies and also individuals, all of
whom seek to provide products and/or services to the college marketplace. Our
main corporate competitors are Follett Higher Education Group ("Follett") and
MBS Textbook Exchange/Barnes & Noble College Booksellers ("MBS"). MBS Textbook
Exchange and Barnes & Noble College Booksellers 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 more than 750 and 600 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,

     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 South Eastern 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.


                                       10
<PAGE>

    Our Complementary Services Division competes with:

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

     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, 2008 we had a total of approximately 3,400 employees, of
which approximately 1,400 were full-time, approximately 900 were part-time and
approximately 1,100 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 use 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, WHICH COULD ADVERSELY IMPACT OUR REVENUE
LEVELS, PROFIT MARGINS AND ABILITY TO ACQUIRE AN ADEQUATE SUPPLY OF USED
TEXTBOOKS. 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. Revenue levels and profit margins could
be adversely impacted if we experience increased competition in the markets in
which we currently operate or in markets in which we will operate in the future.
Over the years, an increasing number of institution-owned college stores have
decided to outsource or "contract-manage" the operation of their bookstores. 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 adversely impact our revenue levels and profit
margins.

    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 these transactions have occurred for many
years, prior to the Internet these 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 adversely impact
our revenue levels and profit margins.

    WE MAY NOT BE ABLE TO SUCCESSFULLY ACQUIRE OR CONTRACT-MANAGE ADDITIONAL
BOOKSTORES OR INTEGRATE THOSE ADDITIONAL STORES, WHICH COULD ADVERSELY IMPACT
OUR ABILITY TO GROW REVENUES AND PROFIT MARGINS. 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 may not be able to identify additional private
bookstores for acquisition or we may not be successful in competing for
contracts to manage additional institutional stores. Due to the seasonal nature
of business in our bookstores, operations may be affected by the time of the
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. Our integration of these future bookstores may not be
successful; or, the anticipated strategic benefits of these future bookstores
may not be realized or may not 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, anticipated revenues and profit margins from these new bookstores could
be adversely impacted.

    WE MAY NOT BE ABLE TO SUCCESSFULLY RENEW OUR CONTRACT-MANAGED BOOKSTORES AT
PROFITABLE TERMS, WHICH COULD ADVERSELY IMPACT OUR PROFIT MARGINS. 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 may not be successful
in renewing our current contracts or those renewals may not 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 profit margins could be adversely impacted.

                                       12
<PAGE>

    WE MAY BE UNABLE TO OBTAIN A SUFFICIENT SUPPLY OF USED TEXTBOOKS, WHICH
COULD ADVERSELY IMPACT OUR REVENUE LEVELS AND PROFIT MARGINS. 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 typically 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, thereby
adversely impacting our revenue levels and profit margins.

    PUBLISHERS MAY NOT CONTINUE TO INCREASE PRICES OF TEXTBOOKS ANNUALLY, WHICH
COULD ADVERSELY IMPACT OUR REVENUE LEVELS AND PROFIT MARGINS. 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 impact our revenue levels and profit margins.

    PUBLISHER PRACTICES REGARDING NEW EDITIONS AND MATERIALS PACKAGED WITH NEW
TEXTBOOKS COULD CHANGE, THEREBY REDUCING THE SUPPLY OF USED TEXTBOOKS AVAILABLE
TO US AND ADVERSELY IMPACTING OUR REVENUE LEVELS AND PROFIT MARGINS. 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, thereby adversely impacting our revenue levels and
profit margins.

    THE LOSS OR RETIREMENT OF KEY MEMBERS OF MANAGEMENT MAY OCCUR, WHICH COULD
NEGATIVELY AFFECT OUR ABILITY TO EXECUTE OUR CURRENT STRATEGY AND/OR OUR ABILITY
TO EFFECTIVELY REACT TO CHANGING INDUSTRY DYNAMICS, THEREBY ADVERSELY IMPACTING
OUR REVENUE LEVELS AND PROFIT MARGINS. Our future success depends to a
significant extent on the efforts and abilities of our senior management team.
Our senior management team has over 90 years of cumulative experience in the
college bookstore industry. The loss of the services of any one of these
individuals could negatively affect our ability to execute our current strategy
and/or our ability to effectively react to changing industry dynamics, thereby
adversely impacting our revenue levels and profit margins.

    OUR WHOLESALE AND BOOKSTORE OPERATIONS ARE SEASONAL IN NATURE - A
SIGNIFICANT REDUCTION IN SALES DURING OUR PEAK SELLING PERIODS COULD ADVERSELY
IMPACT OUR ABILITY TO REPAY THE REVOLVING CREDIT FACILITY, THEREBY INCREASING
INTEREST EXPENSE AND ADVERSELY IMPACTING REVENUE LEVELS BY RESTRICTING OUR
ABILITY TO BUY AN ADEQUATE SUPPLY OF USED TEXTBOOKS. 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 2008, 45% of our annual revenues occurred in the second
fiscal quarter (July-September), while 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 adversely impact our ability to
repay the Revolving Credit Facility, increase the average balance outstanding
under the Revolving Credit Facility (thereby resulting in increased interest
expense), and restrict our ability to buy an adequate supply of used textbooks
(thereby adversely impacting our revenue levels).

    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 COULD PREVENT US FROM INCURRING
ADDITIONAL INDEBTEDNESS AND TAKING CERTAIN OTHER ACTIONS AND COULD RESULT IN ALL
AMOUNTS OUTSTANDING BEING DECLARED DUE AND PAYABLE IF WE ARE NOT IN COMPLIANCE
WITH SUCH RESTRICTIONS. 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.

                                       13
<PAGE>

    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 our operating results and
events beyond our control. 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, our assets may not 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.

    The Revolving Credit Facility (which is included in the Senior Credit
Facility) expires on March 4, 2009. We do not yet know the impact of
negotiations surrounding the extension of the Revolving Credit Facility and/or
other potential changes in the Senior Credit Facility. The extension of the
Revolving Credit Facility and any other changes to the Senior Credit Facility
may increase our interest expense.

    WE ARE CONTROLLED BY ONE PRINCIPAL EQUITY HOLDER, WHO HAS THE POWER TO TAKE
UNILATERAL ACTION AND COULD HAVE AN INTEREST IN PURSUING ACQUISITIONS,
DIVESTITURES AND OTHER TRANSACTIONS, EVEN THOUGH SUCH TRANSACTIONS MIGHT INVOLVE
RISKS TO OTHER AFFECTED PARTIES. 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, if any, 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.

    WE HAVE A SUBSTANTIAL LEVEL OF INDEBTEDNESS. We have $375.2 million of
outstanding indebtedness at March 31, 2008. NBC has additional outstanding
indebtedness of $77.0 million as of March 31, 2008 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.

                                       14
<PAGE>

                               ITEM 2. PROPERTIES.


    At March 31, 2008, our Bookstore Division locations consisted of the
following: (i) 6 owned off-campus bookstore locations, (ii) 123 leased
off-campus bookstore locations, and (iii) 131 leased on-campus
(contract-managed) bookstore locations serving university and post-graduate
educational institutions throughout the United States. These institutions serve
more than 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 2008.

                                       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 2008. 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 2008 and 2007.

    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 table on the following page sets forth our selected historical
consolidated financial and other data. 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 Ended   11 Months Ended
                                                March 31,    March 31,   March 31,      March 31,       March 31,       February 29,
                                                   2008        2007         2006           2005            2004             2004
                                               -----------  ----------- -----------   -------------- --------------- --------------
<S>                                             <C>          <C>         <C>         <C>             <C>              <C>
STATEMENT OF OPERATIONS DATA:                                               (dollars in thousands)
  Revenues                                      $ 581,248    $ 544,428   $ 420,108        $ 402,154        $ 13,317       $ 385,364
  Costs of sales (exclusive of
  depreciation shown below)                       354,140      332,444     250,914          240,638           7,768         231,874
                                               -----------  ----------- -----------   -------------- --------------- ---------------
      Gross profit                                227,108      211,984     169,194          161,516           5,549         153,490
  Operating expenses:
    Selling, general and administrative (2)       157,193      143,096     107,991          100,513           8,540          99,004
    Closure of California Warehouse                   (36)         774           -                -               -               -
    Depreciation                                    7,209        5,916       4,913            4,908             350           3,396
    Amortization                                   10,443        9,613       8,762            8,258             649           1,162
                                               -----------  ----------- -----------   -------------- --------------- ---------------
      Income (Loss) from operations                52,299       52,585      47,528           47,837          (3,990)         49,928
  Other expenses (income):
    Interest expense                               33,559       33,135      29,395           25,854           2,226          22,409
    Interest income                                (1,332)      (1,643)     (1,275)            (639)            (97)           (308)
    (Gain) Loss on derivative instrument              198          225        (525)               -               -             (57)
                                               -----------  ----------- -----------   -------------- --------------- ---------------
      Income (Loss) before income taxes            19,874       20,868      19,933           22,622          (6,119)         27,884
  Income tax expense (benefit)                      7,418        8,256       7,691            9,162          (2,400)         10,949
                                               -----------  ----------- -----------   -------------- --------------- ---------------
      Net income (loss)                         $  12,456    $  12,612   $  12,242        $  13,460        $ (3,719)       $ 16,935
                                               ===========  =========== ===========   ============== =============== ===============
OTHER DATA:
  EBITDA (3)                                    $  69,951    $  68,114   $  61,203        $  61,003        $ (2,991)       $ 54,486
  Net cash flows from operating activities         21,101       27,516      22,573           16,682          (7,764)         46,913
  Net cash flows from investing activities        (22,179)     (32,809)    (18,122)            (748)        (29,656)         (6,452)
  Net cash flows from financing activities         (2,578)       4,893      (2,293)         (17,986)         (8,965)           (204)
  Capital expenditures                              7,261        6,543       7,312            7,666             720           3,965
  Business acquisition expenditures (4)            14,682       25,874      10,849           20,160           1,849           2,355
  Number of bookstores open at end of the period      260          244         139              124             113             112

BALANCE SHEET DATA (AT END OF PERIOD):
  Cash and cash equivalents                     $  29,326    $  32,983   $  33,383        $  31,224        $ 33,276        $ 79,662
  Working capital                                 137,100      130,389     111,066          104,008         106,259         132,729
  Total assets                                    702,087      695,488     645,346          627,239         646,265         252,449
  Total debt, including current maturities        375,204      375,587     354,309          356,402         373,179         187,782

</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 $1,041; $997 and $7,264 for the
        fiscal years ended March 31, 2008 and 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 use 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 Ended     11 Months Ended
                                              March 31,    March 31,   March 31,    March 31,       March 31,        February 29,
                                                 2008        2007         2006         2005            2004              2004
                                             -----------  ----------- ----------- ------------- ---------------- -----------------
                                                                             (dollars in thousands)
<S>                                            <C>          <C>         <C>            <C>               <C>               <C>
EBITDA                                         $ 69,951     $ 68,114    $ 61,203      $ 61,003         $ (2,991)         $ 54,486

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

  Share-based compensation                        1,041          997           -             -                -                 -
  Interest income                                 1,332        1,644       1,275           639               97               308
  Provision for losses on receivables               468          834         231           316              218                66
  Cash paid for interest                        (31,755)     (31,389)    (27,875)      (25,796)          (4,174)          (11,956)
  Cash paid for income taxes                    (13,031)      (6,551)     (9,589)       (4,946)             (10)           (6,467)
  (Gain) Loss on disposal of assets                 285           (1)         90            68               14               408

  Changes in operating assets and liabilities,
  net of effect of acquisitions (5)              (7,190)      (6,132)     (2,762)      (14,602)            (918)           10,068
                                             -----------  ----------- ----------- ------------- ---------------- -----------------
Net Cash Flows from Operating Activities       $ 21,101     $ 27,516    $ 22,573      $ 16,682         $ (7,764)         $ 46,913
                                             ===========  =========== =========== ============= ================ =================
 </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. Our Bookstore Division continues to grow its number of
bookstore locations. We acquired 20 bookstore locations in 14 separate
transactions and established the start-up of 3 bookstore locations during the
fiscal year ended March 31, 2008. We believe that there continue to be
attractive opportunities for us to expand our chain of bookstores across the
country.

    REVENUE RESULTS. Consolidated revenues for the fiscal year ended March 31,
2008 increased $36.8 million, or 6.8% from the fiscal year ended March 31, 2007.
This increase is primarily attributable to growth in the Bookstore Division,
including acquisition activity and same-store sales growth of 4.0%. Revenues
increased in the Textbook Division by 2.9% as a result of price increases and
lower returns that were partially offset by a decrease in units sold. The
Complementary Services Division also experienced growth during the fiscal year
ended March 31, 2008, primarily as a result of increased revenues from our
distance education business. Finally, as a result of our growth in the Bookstore
Division, intercompany revenues and the corresponding intercompany eliminations
for the fiscal year ended March 31, 2008 increased from the fiscal year ended
March 31, 2007.

    EBITDA RESULTS. Consolidated EBITDA for the fiscal year ended March 31, 2008
increased $1.8 million from the fiscal year ended March 31, 2007. The EBITDA
increase is attributable to increases in both our Bookstore and our Textbook
Divisions. EBITDA in the Complementary Services Division was down due primarily
to lower results from our systems businesses. 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.

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, increasing competition for the supply of used textbooks
from other textbook wholesalers and from student to student transactions,
increasing 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. Finally, we are uncertain what impact the
recent downturn in general economic conditions and the ongoing disruption in the
capital markets might have on negotiations around the Revolving Credit Facility,
which expires on March 4, 2009. Despite these challenges, we expect that we will
continue to grow revenue and EBITDA on a consolidated basis in fiscal year 2009.
We also expect that our capital expenditures will remain modest for a company of
our size.

                                       19
<PAGE>

        FISCAL YEAR ENDED MARCH 31, 2008 COMPARED WITH FISCAL YEAR ENDED
                                 MARCH 31, 2007.


    REVENUES. Revenues for the fiscal years ended March 31, 2008 and 2007 and
the corresponding change in revenues were as follows:
<TABLE>
<CAPTION>

                                                                               Change
                                 Fiscal Year Ended  Fiscal Year Ended  ---------------------------
                                 March 31, 2008     March 31, 2007         Amount      Percentage
                                ------------------ ------------------  -------------- ------------
<S>                                 <C>                <C>              <C>                 <C>
Bookstore Division                  $ 454,374,873      $ 418,476,613    $ 35,898,260        8.6 %
Textbook Division                     139,685,035        135,798,392       3,886,643        2.9 %
Complementary Services Division        34,372,223         32,215,306       2,156,917        6.7 %
Intercompany Eliminations             (47,184,345)       (42,062,347)     (5,121,998)      12.2 %
                                ------------------ ------------------  -------------- ------------
                                    $ 581,247,786      $ 544,427,964    $ 36,819,822        6.8 %
                                ================== ==================  ============== ============
</TABLE>

    The increase in Bookstore Division revenues was primarily attributable to
the addition of 143 bookstore locations through acquisitions or start-ups since
April 1, 2006 and improved same store sales. The new bookstores (which include
the impact of bookstores acquired on or after April 1, 2006 and subsequently
closed) provided an additional $24.8 million of revenue for the fiscal year
ended March 31, 2008. Same-store sales for the fiscal year ended March 31, 2008
increased $12.1 million, or 4.0%, from the fiscal year ended March 31, 2007,
primarily due to increased used textbook and clothing and insignia wear
revenues. The Company defines same-store sales for the fiscal year ended March
31, 2008 as sales from any store, even if expanded or relocated, that has been
operated by the Company since the start of fiscal year 2007. Finally, revenues
declined $1.0 million as a result of certain store closings (excluding the
impact of bookstores acquired on or after April 1, 2006 which were subsequently
closed) since April 1, 2006.

    For the fiscal year ended March 31, 2008, Textbook Division revenues
increased 2.9% from the fiscal year ended March 31, 2007, due primarily to an
approximate 5.2% increase in the average price per book sold and lower returns
that was offset in part by an approximate 3.6% decrease in units sold.
Complementary Services Division revenues increased primarily as a result of
strong results in the distance education business. As a result of our growth in
the Bookstore Division, intercompany revenues and the corresponding intercompany
eliminations for the fiscal year ended March 31, 2008 increased $4.8 million and
$0.3 million in the Textbook and Complementary Services Divisions, respectively,
from the fiscal year ended March 31, 2007.

    GROSS PROFIT. Gross profit for the fiscal year ended March 31, 2008
increased $15.1 million, or 7.1%, to $227.1 million from $212.0 million for the
fiscal year ended March 31, 2007. The increase in gross profit was primarily
attributable to the increase in revenues, as the consolidated gross margin
percentage increased only slightly to 39.1% for the fiscal year ended March 31,
2008 from 38.9% for the fiscal year ended March 31, 2007. The increase in
consolidated gross margin percentage is primarily attributable to an increase in
revenues coming from higher margin used textbooks in the Bookstore Division and
to overall improvement in gross margin from the bookstores acquired in the CBA
transaction.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the fiscal year ended March 31, 2008 increased $14.1
million, or 9.9%, to $157.2 million from $143.1 million for the fiscal year
ended March 31, 2007. Selling, general and administrative expenses as a
percentage of revenues were 27.0% and 26.3% for the fiscal years ended March 31,
2008 and 2007, respectively. The increase in selling, general and administrative
expenses, which includes a $4.3 million increase in commission expense, a $3.1
million increase in rent, a $2.5 million increase in shipping expense and a $2.0
million increase in personnel costs, is primarily attributable to our continued
growth in the Bookstore Division. The increased commission and shipping expenses
were primarily due to increased Bookstore Division sales on the Internet
involving third party websites.

    CLOSURE OF CALIFORNIA WAREHOUSE EXPENSES. Closure of California warehouse
expenses are attributable to costs associated with the October 27, 2006 closure
of our California warehouse facility, including one-time termination benefits,
costs to terminate contracts and costs of consolidation/relocation. Payments of
one-time termination benefits extended through April of 2008 and were slightly
lower than the remaining accrual for such benefits at March 31, 2007, resulting
in an adjustment to the accrual during fiscal year 2008.

                                       20
<PAGE>

    EARNINGS (LOSS) BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION
(EBITDA). EBITDA for the fiscal years ended March 31, 2008 and 2007 and the
corresponding change in EBITDA were as follows:
<TABLE>
<CAPTION>

                                                                                  Change
                                 Fiscal Year Ended    Fiscal Year Ended --------------------------
                                  March 31, 2008      March 31, 2007        Amount      Percentage
                                -------------------- -----------------  -------------- -----------
<S>                                    <C>               <C>             <C>               <C>
Bookstore Division                     $ 45,941,624      $ 44,511,202    $ 1,430,422       3.2 %
Textbook Division                        33,731,382        32,210,010      1,521,372       4.7 %
Complementary Services Division           1,558,414         2,716,144     (1,157,730)    (42.6)%
Corporate Administration                (11,280,477)      (11,323,483)        43,006       0.4 %
                                -------------------- -----------------  ------------- ------------
                                       $ 69,950,943      $ 68,113,873    $ 1,837,070       2.7 %
                                ==================== =================  ============= ============
</TABLE>

    The increase in Bookstore Division EBITDA was primarily due to the
previously mentioned increase in revenues and gross profit offset partially by
the increased selling, general and administrative expenses. The increase in
Textbook Division EBITDA was primarily due to the previously mentioned increase
in revenues, as well as solid control of expenses and $0.8 million of expenses
incurred in the fiscal year ended March 31, 2007 associated with the closure of
our California warehouse. The decrease in Complementary Services Division EBITDA
was primarily due to lower results in our systems businesses. Corporate
Administration's EBITDA loss was flat in comparison to the prior fiscal year.

    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 use 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.

    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, 2008     March 31, 2007
                                            -----------------  -----------------

EBITDA                                         $  69,950,943      $  68,113,873

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

  Share-based compensation                         1,040,599            996,957
  Interest income                                  1,332,497          1,643,598
  Provision for losses on receivables                468,007            834,442
  Cash paid for interest                         (31,755,319)       (31,388,513)
  Cash paid for income taxes                     (13,030,853)        (6,551,344)
  (Gain) Loss on disposal of assets                  284,891               (575)
  Changes in operating assets and
  liabilities,net of effect of
  acquisitions (1)                                (7,190,132)        (6,132,260)
                                            -----------------  -----------------
Net Cash Flows from Operating Activities       $  21,100,633      $  27,516,178
                                            =================  =================

Net Cash Flows from Investing Activities       $ (22,179,160)     $ (32,808,754)
                                            =================  =================

Net Cash Flows from Financing Activities       $  (2,577,893)     $   4,892,730
                                            =================  =================

        (1) Changes in operating assets and liabilities, net of effect of
        acquisitions, include 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.

                                       21
<PAGE>

    DEPRECIATION EXPENSE. Depreciation expense for the fiscal year ended March
31, 2008 increased $1.3 million, or 21.9%, to $7.2 million from $5.9 million for
the fiscal year ended March 31, 2007, due primarily to growth in the Bookstore
Division (including new stores added since April 1, 2006, a new capital lease,
and store remodeling projects).

    AMORTIZATION EXPENSE. Amortization expense for the fiscal year ended March
31, 2008 increased $0.8 million, or 8.6%, to $10.4 million from $9.6 million for
the fiscal year ended March 31, 2007, due in part to a $0.3 million increase in
amortization of contract-managed acquisition costs primarily associated with
contract-managed bookstore acquisitions/renewals occurring since April 1, 2006
and $0.3 million of amortization of certain contractual rights associated with a
September 1, 2007 agreement with a third-party software company.

    INTEREST EXPENSE, NET. Interest expense, net for the fiscal year ended March
31, 2008 increased $0.7 million, or 2.2%, to $32.4 million from $31.7 million
for the fiscal year ended March 31, 2007, due in part to a $0.3 million decline
in interest income.

    INCOME TAXES. Income tax expense for the fiscal year ended March 31, 2008
decreased $0.9 million, or 10.1%, to $7.4 million from $8.3 million for the
fiscal year ended March 31, 2007. Our effective tax rate for the fiscal years
ended March 31, 2008 and 2007 was 37.3% and 39.6%, respectively. Our effective
tax rate differs from the statutory tax rate primarily as a result of state
income taxes. The lower effective tax rate in fiscal year 2008 is due primarily
to certain state income tax benefits recorded in connection with a tax incentive
program.


                                       22
<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:
<TABLE>
<CAPTION>

                                                                         Change
                        Fiscal Year Ended  Fiscal Year Ended  ---------------------------
                          March 31, 2007     March 31, 2006       Amount       Percentage
                        ------------------ ------------------ --------------  -----------
<S>                         <C>                <C>            <C>                 <C>
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 %
                        ================== ================== ==============  ===========
</TABLE>

    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 (which include the impact of bookstores
acquired on or after April 1, 2005 and subsequently closed) 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 (excluding the impact of bookstores acquired
on or after April 1, 2005 which were subsequently closed) 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 businesses. 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. nonvested 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.


                                       23
<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:
<TABLE>
<CAPTION>

                                                                        Change
                         Fiscal Year Ended  Fiscal Year Ended  --------------------------
                         March 31, 2007     March 31, 2006      Amount       Percentage
                         ------------------ ------------------ ------------- ------------
<S>                           <C>                <C>            <C>               <C>
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 %
                         ================== ================== ============= ============
</TABLE>

    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 businesses, 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. nonvested 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 use 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.

                                       24
<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.


                                       25
<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. Our acquisitions of college bookstores
result in the application of purchase accounting as of the transaction date. In
certain circumstances, our 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. 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.

                                       26
<PAGE>

    ACCRUED INCENTIVES. Our Textbook Division offers certain incentive programs
to its customers that allow the participating customers the opportunity to earn
rebates for used textbooks sold to the Textbook Division. The rebates can be
redeemed in a number of ways, including to pay for freight charges on textbooks
sold to the customer or to pay for certain of the products or services we offer
through our Complementary Services Division. The customer can also use the
rebates to pay for the cost of textbooks sold by the Textbook Division to the
customer; however, a portion of the rebates earned by the customer are forfeited
if the customer chooses to use rebates in this manner. If the customer fails to
comply with the terms of the program, rebates earned during the year are
forfeited. Significant judgment is required in estimating the expected level of
forfeitures on rebates earned. Although we believe that our estimates of
anticipated forfeitures, which are based upon historical experience, are
reasonable, actual results could differ from these estimates resulting in an
ultimate redemption of rebates which differs from that which is reflected in
accrued incentives in the consolidated financial statements.

    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 different from that which
is reflected in the consolidated financial statements.

    DERIVATIVE FINANCIAL INSTRUMENTS. We use 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 allows 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 used 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.

    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 income tax payments, 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, 2008, our total
indebtedness was $375.2 million, consisting of a $195.1 million Term Loan,
$175.0 million of Senior Subordinated Notes, and $5.1 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, 2008 was $77.0 million (face value).

                                       27
<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
$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 was no excess cash flow obligation for the fiscal years ended
March 31, 2008 and 2007. An excess cash flow payment of $1.7 million for the
fiscal year ended March 31, 2006 was made in September of 2006.

    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 and expires September 30, 2008. 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.

    In July 2007, a bookstore location was relocated, the new property lease for
which has been classified as a capital lease. This lease expires in fiscal year
2018 and contains two five-year options to renew. The capital lease obligation
and corresponding property recorded at inception of the lease totaled $2.2
million. 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.

INVESTING CASH FLOWS

    Our capital expenditures were $7.3 million, $6.5 million and $7.3 million
for the fiscal years ended March 31, 2008, 2007 and 2006, 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 2008 was $16.1 million. We expect capital
expenditures to be between $8.0 million and $10.0 million for fiscal year 2009.

    Business acquisition and contract-management renewal expenditures were $14.7
million, $25.9 million and $10.8 million for the fiscal years ended March 31,
2008, 2007 and 2006, respectively. During the fiscal year ended March 31, 2008,
20 bookstore locations were acquired in 14 separate transactions (10 of which
were contract-managed locations). During the fiscal year ended March 31, 2007,
118 bookstore locations were acquired in 17 separate transactions (110 of which
were contract-managed locations), including the acquisition of CBA's 101
bookstore locations for $18.8 million (net of cash acquired) on May 1, 2006.
During the fiscal year ended March 31, 2006, we acquired 13 bookstore locations
in 11 separate transactions (6 of which were contract-managed locations). Our
ability to make acquisition expenditures is subject to certain restrictions
under the Senior Credit Facility.

    During the fiscal years ended March 31, 2008 and 2007, we capitalized $0.3
million and $0.7 million, respectively, in software development costs associated
with new software products and enhancements to existing software products.

    Effective September 1, 2007, we entered into an agreement whereby we agreed
to pay $1.7 million over a period of thirty-six months to a software company in
return for certain rights related to that company's products that are designed
to enhance web-based sales. This other identifiable intangible is being
amortized on a straight-line basis over the thirty-six month base term of the
agreement. The asset and corresponding liability were recorded based upon the
present value of the future payments assuming an imputed interest rate of 6.7%,
resulting in a discount of $0.1 million which will be recorded as interest
expense over the base term of the agreement utilizing the effective interest
method of accounting.

    In addition to the previously mentioned business acquisition and
contract-management renewal expenditures, the purchase price of one of the
bookstores acquired during the fiscal year ended March 31, 2008 included $0.7
million of contingent consideration, which is paid to the previous owner on a
monthly basis and is calculated as a percentage of revenues generated by the
acquired bookstore each month. Such payments totaled $41,219 for the fiscal year
ended March 31, 2008.

                                       28
<PAGE>

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, 2008, weighted-average borrowings
under the Revolving Credit Facility approximated $15.2 million, with actual
borrowings ranging from a low of no borrowings to a high of $70.0 million. Net
cash flows from operating activities for the fiscal year ended March 31, 2008
were $21.1 million, down $6.4 million from $27.5 million for the fiscal year
ended March 31, 2007. The decrease in net cash flows from operating activities
is due primarily to a $6.5 million increase in income taxes paid during the
fiscal year ended March 31, 2008. Fluctuations in certain balances, including
receivables and accounts payable, were due in part to the impact of CBA
(acquired on May 1, 2006). 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.

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.

SOURCES OF AND NEEDS FOR CAPITAL

    As of March 31, 2008, we could borrow up to $50.2 million under the
Revolving Credit Facility. The Revolving Credit Facility was unused at March 31,
2008. 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 expect to renegotiate the terms of our Revolving
Credit Facility prior to its expiration on March 4, 2009.

    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 , income tax payments, 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, 2008, 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.

                                       29
<PAGE>

    The following tables present aggregated information as of March 31, 2008
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                            $ 370,433,833    $  2,070,657     $ 193,179,629   $ 175,127,935   $      55,612
Interest on long-term debt (1)               88,515,808      25,852,802        47,539,960      15,120,521           2,525
Capital lease obligations                     4,770,173         658,415         1,731,027         982,973       1,397,758
Interest on capital lease obligations         1,552,114         380,920           598,988         311,557         260,649
Operating leases                             80,434,000      17,854,000        27,141,000      17,210,000      18,229,000
Uncertain tax position liabilities                    -               -                 -               -               -
Unconditional purchase obligations                    -               -                 -               -               -
                                        ---------------- ---------------  ---------------- --------------- ---------------
  Total                                   $ 545,705,928    $ 46,816,794     $ 270,190,604   $ 208,752,986   $  19,945,544
                                        ================ ===============  ================ =============== ===============


                                                                     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, 2008, as adjusted for the
        impact of the interest rate swap agreement in place as of March 31,
        2008.

(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

    No dividends were declared or paid to NBC in fiscal years 2008, 2007 or
2006.

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 March 2008, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (AN AMENDMENT OF FASB STATEMENT
NO. 133). SFAS No. 161 requires entities to provide enhanced disclosures about
how and why an entity uses derivative instruments, how derivative instruments
and related hedged items are accounted for under FASB Statement No. 133, and how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This Statement becomes
effective for us in fiscal year 2010. Our present interest rate swap agreement
expires on September 30, 2008; however, our current disclosure format will need
to be expanded (particularly as it relates to the specific components of gains
and losses on derivative instruments) if we use derivative instruments in the
future.

                                       30
<PAGE>

    In December 2007, the FASB issued SFAS No. 141 (revised 2007), BUSINESS
COMBINATIONS and SFAS No. 160, NONCONTROLLING INTERESTS IN CONSOLIDATED
FINANCIAL STATEMENTS. SFAS No. 141 (revised 2007) establishes principles and
requirements for how an acquirer recognizes and measures the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and determines what information
to disclose to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. In addition, SFAS No. 141
(revised 2007) requires that direct costs associated with an acquisition be
expensed as incurred. SFAS No. 160 establishes accounting and reporting
standards for the noncontrolling interest (minority interest) in a subsidiary
and for the deconsolidation of a subsidiary. Included in SFAS No. 160 is the
requirement that noncontrolling interests be reported in the equity section of
the balance sheet. These Statements become effective for us in fiscal year 2010.
We have not yet determined if SFAS No. 141 (revised 2007) will have a material
impact on our consolidated financial statements. SFAS No. 160 is not expected to
have a material impact on our consolidated financial statements.

    In February 2007, the FASB issued SFAS 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. We did not adopt any provisions of this Statement,
which became effective for us in fiscal year 2009.

    In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS.
This Statement defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair value measurements. The Statement has
been subsequently amended by FASB Staff Position No.'s 157-1 and 157-2 to
exclude lease classification or measurement (except in certain instances) from
the scope of SFAS No. 157 and to defer the effective date of SFAS No. 157 for
most nonfinancial assets and nonfinancial liabilities. This Statement becomes
effective for us partially in fiscal year 2009 and partially in fiscal year
2010. We are reviewing this Statement and have not yet determined the impact, if
any, on our 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; increased
competition from alternative media and alternative sources of textbooks for
students, including 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
practices regarding 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 renew or raise additional debt or raise additional 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.

                                       31
<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 $375.2 million in total
indebtedness outstanding at March 31, 2008, approximately $195.1 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, 2008 was $130.0 million. The interest rate swap
agreement expires 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, 2008):
<TABLE>
<CAPTION>

                                        Fixed Rate Debt                   Variable Rate Debt
                                  --------------------------------  ------------------------------
                                                      Weighted-                        Weighted-
                                                       Average                          Average
                                     Principal         Interest        Principal       Interest
                                     Cash Flows          Rate        Cash Flows (1)      Rate
                                  -----------------  -------------  -----------------  -----------
<C>                                  <C>               <C>           <C>                  <C>
Fiscal Year Ended March 31:
  2009                               $     702,336          8.65%      $   2,026,736        4.85%
  2010                                     861,983          8.64%          2,026,736        5.25%
  2011                                     972,328          8.64%        191,049,609        6.04%
  2012                                 175,649,664          8.63%                  -            -
  2013                                     461,244          8.63%                  -            -
  Thereafter                             1,453,370          8.36%                  -            -
                                  -----------------  -------------  -----------------  -----------
    Total                            $ 180,100,925          8.64%      $ 195,103,081        5.38%
                                  =================  =============  =================  ===========

    Fair Value                       $ 161,984,000             -       $ 195,103,081           -
                                  =================                 =================


                                        Interest Rate Swap
                                  ---------------------------------------------------
                                                      Weighted-        Weighted-
                                      Average          Average          Average
                                      Notional         Receive            Pay
                                      Amounts            Rate             Rate
                                  -----------------  -------------  -----------------
Fiscal Year Ended March 31:
  2009                               $  65,000,000          2.63%              4.34%
                                  =================  =============  =================


    Fair Value("out-of-the-money")   $  (1,119,000)            -                  -
                                  =================
</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.


                                       32
<PAGE>

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

<TABLE>
<CAPTION>

                                                             March 31,       March 31,
                                                                2008            2007
                                                          --------------- ---------------
<S>                                                        <C>             <C>
Fair Values:
  Fixed rate debt                                          $ 161,984,000   $ 179,933,000
  Variable rate debt                                         195,103,081     197,021,472
  Interest rate swap - "in-the-money" ("out-of-the-money")    (1,119,000)      1,301,000

Overall Weighted-Average Interest Rates:
  Fixed rate debt                                                  8.64%           8.65%
  Variable rate debt                                               5.38%           7.39%
  Interest rate swap receive rate                                  2.63%           4.95%
  Interest rate swap pay rate                                      4.34%           4.34%
</TABLE>


                                       33
<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                       35

Consolidated Balance Sheets as of March 31, 2008 and March 31, 2007           36

Consolidated Statements of Operations for the Years Ended
March 31, 2008, 2007 and 2006                                                 37

Consolidated Statements of Stockholder's Equity for the Years Ended
March 31, 2008, 2007 and 2006                                                 38

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2008, 2007 and 2006                                                 39

Notes to Consolidated Financial Statements                                    40


                                       34
<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, 2008 and 2007, 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, 2008. 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, 2008 and 2007, and the results of their operations
and their cash flows for each of the three years in the period ended March 31,
2008 in conformity with accounting principles generally accepted in the United
States of America.


/s/  Deloitte & Touche LLP

Lincoln, Nebraska
June 27, 2008


                                       35
<PAGE>

NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------------------

                                                                 March 31,      March 31,
                                                                  2008            2007
                                                            ---------------  ---------------
<S>                                                          <C>              <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                  $  29,326,456    $  32,982,876
  Receivables, net                                              57,396,508       54,949,070
  Inventories                                                   99,011,087       94,548,706
  Deferred income taxes                                          6,058,093        5,261,114
  Prepaid expenses and other assets                              2,539,077        1,993,644
                                                            ---------------  ---------------
    Total current assets                                       194,331,221      189,735,410

PROPERTY AND EQUIPMENT, net of depreciation & amortization      45,066,180       43,078,109

GOODWILL                                                       320,367,273      311,606,364

IDENTIFIABLE INTANGIBLES, net of amortization                  134,809,217      139,824,716

DEBT ISSUE COSTS, net of amortization                            5,119,263        6,939,046

OTHER ASSETS                                                     2,394,267        4,303,947
                                                            ---------------  ---------------
                                                             $ 702,087,421    $ 695,487,592
                                                            ===============  ===============
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
  Accounts payable                                           $  28,631,029    $  28,505,138
  Accrued employee compensation and benefits                    12,100,640       14,213,001
  Accrued interest                                               1,778,937          710,800
  Accrued incentives                                             7,108,857        6,983,262
  Accrued expenses                                               3,172,122        2,334,239
  Income taxes payable                                             847,370        3,253,074
  Deferred revenue                                                 862,994          898,666
  Current maturities of long-term debt                           2,070,657        1,957,854
  Current maturities of capital lease obligations                  658,415          490,815
                                                            ---------------  ---------------
    Total current liabilities                                   57,231,021       59,346,849

LONG-TERM DEBT, net of current maturities                      368,363,176      370,433,831

CAPITAL LEASE OBLIGATIONS, net of current maturities             4,111,758        2,704,268

OTHER LONG-TERM LIABILITIES                                      4,467,504        2,983,350

DEFERRED INCOME TAXES                                           55,104,415       58,612,118

DUE TO PARENT                                                   16,970,151       16,733,279

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                                   138,087,705      138,017,229
  Retained earnings                                             58,499,591       46,043,568
  Accumulated other comprehensive income (loss)                   (748,000)         613,000
                                                            ---------------  ---------------
    Total stockholder's equity                                 195,839,396      184,673,897
                                                            ---------------  ---------------
                                                             $ 702,087,421    $ 695,487,592
                                                            ===============  ===============

See notes to consolidated financial statements.
</TABLE>


                                       36
<PAGE>

NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------------------------------------

                                                            Year Ended      Year Ended       Year Ended
                                                            March 31,        March 31,       March 31,
                                                               2008            2007             2006
                                                          --------------- ---------------  ---------------
<S>                                                        <C>             <C>              <C>
REVENUES, net of returns                                   $ 581,247,786   $ 544,427,964    $ 420,107,899

COSTS OF SALES (exclusive of depreciation shown below)       354,139,474     332,443,991      250,914,049
                                                          --------------- ---------------  ---------------
  Gross profit                                               227,108,312     211,983,973      169,193,850

OPERATING EXPENSES:
  Selling, general and administrative                        157,193,426     143,095,625      107,990,817
  Closure of California Warehouse                                (36,057)        774,475                -
  Depreciation                                                 7,208,504       5,915,758        4,912,731
  Amortization                                                10,443,335       9,613,598        8,762,398
                                                          --------------- ---------------  ---------------
                                                             174,809,208     159,399,456      121,665,946
                                                          --------------- ---------------  ---------------
INCOME FROM OPERATIONS                                        52,299,104      52,584,517       47,527,904
                                                          --------------- ---------------  ---------------
OTHER EXPENSES (INCOME):
  Interest expense                                            33,559,239      33,135,537       29,395,142
  Interest income                                             (1,332,497)     (1,643,598)      (1,274,836)
  (Gain) Loss on derivative financial instrument                 198,000         225,000         (525,000)
                                                          --------------- ---------------  ---------------

                                                              32,424,742      31,716,939       27,595,306
                                                          --------------- ---------------  ---------------

INCOME BEFORE INCOME TAXES                                    19,874,362      20,867,578       19,932,598

INCOME TAX EXPENSE                                             7,418,339       8,256,092        7,691,105
                                                          --------------- ---------------  ---------------

NET INCOME                                                 $  12,456,023   $  12,611,486    $  12,241,493
                                                          =============== ===============  ===============


See notes to consolidated financial statements.
</TABLE>



                                       37
<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 (Loss)      Total          Income
                                             --------  -------------- --------------  --------------- --------------  --------------

<S>                                             <C>     <C>              <C>              <C>          <C>             <C>
BALANCE, April 1, 2005                         $ 100   $ 137,957,730    $21,190,589      $        -   $ 159,148,419

  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
                                                                                                                      ==============

  Contributed capital                              -             (13)             -               -             (13)    $         -

  Net income                                       -               -     12,456,023               -      12,456,023      12,456,023

  Share-based compensation attributable to
   NBC Holdings Corp. stock options                -          70,489              -               -          70,489               -

  Other comprehensive loss, net of taxes:

    Unrealized loss on interest rate swap
    agreement, net of taxes of $861,000            -               -              -      (1,361,000)     (1,361,000)     (1,361,000)

                                             --------  -------------- --------------  --------------  --------------  --------------
BALANCE, March 31, 2008                        $ 100   $ 138,087,705    $58,499,591      $ (748,000)  $ 195,839,396     $11,095,023
                                             ========  ============== ==============  ==============  ==============  ==============



See notes to consolidated financial statements.
</TABLE>


                                       38
<PAGE>
NEBRASKA BOOK COMPANY, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------------------------------------

                                                                 Year Ended      Year Ended     Year Ended
                                                                 March 31,       March 31,      March 31,
                                                                    2008            2007           2006
                                                               --------------- -------------- ----------------
<S>                                                              <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                     $ 12,456,023    $ 12,611,486   $ 12,241,493
  Adjustments to reconcile net income to
  net cash flows from operating activities:
    Share-based compensation                                        1,040,599         996,957              -
    Provision for losses on receivables                               468,007         834,442        231,497
    Depreciation                                                    7,208,504       5,915,758      4,912,731
    Amortization                                                   12,298,118      11,336,553     10,282,835
    (Gain) Loss on derivative financial instrument                    198,000         225,000       (525,000)
    (Gain) Loss on disposal of assets                                 284,891            (575)        90,263
    Deferred income taxes                                          (3,443,682)     (2,148,119)         3,539
    Changes in operating assets and liabilities,
    net of effect of acquisitions:
      Receivables                                                  (2,920,327)     (9,924,934)    (7,012,834)
      Inventories                                                  (1,425,783)     (3,566,490)        99,541
      Recoverable income taxes                                              -       1,438,819     (1,438,819)
      Prepaid expenses and other assets                              (545,433)       (219,494)    (1,017,502)
      Other assets                                                    490,219        (714,295)       396,569
      Accounts payable                                             (1,098,060)      5,123,589      3,351,602
      Accrued employee compensation and benefits                   (2,112,361)      2,617,465      1,895,832
      Accrued interest                                                (50,863)         24,069              -
      Accrued incentives                                              125,595        (576,234)      (201,800)
      Accrued expenses                                                837,883       1,226,030       (157,122)
      Income taxes payable                                         (2,405,704)      2,330,451       (538,161)
      Deferred revenue                                                (35,672)        184,243       (328,237)
      Other long-term liabilities                                    (506,193)       (282,140)       211,698
      Due to parent                                                   236,872          83,597         75,107
                                                               --------------- --------------- ---------------
        Net cash flows from operating activities                   21,100,633      27,516,178     22,573,232

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                              (7,260,909)     (6,543,074)    (7,311,694)
  Acquisitions, net of cash acquired                              (14,681,655)    (25,873,662)   (10,848,509)
  Proceeds from sale of property and equipment                         36,385         313,505         38,029
  Software development costs                                         (272,981)       (705,523)             -
                                                               --------------- --------------- ---------------
        Net cash flows from investing activities                  (22,179,160)    (32,808,754)   (18,122,174)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                                  -      24,000,000              -
  Payment of financing costs                                                -        (964,774)      (248,813)
  Principal payments on long-term debt                             (1,957,852)     (3,821,172)    (1,832,143)
  Principal payments on capital lease obligations                    (624,910)       (390,205)      (260,920)
  Net decrease in revolving credit facility                                 -     (13,931,119)             -
  Capital contributions                                                 4,869               -         49,197
                                                               --------------- --------------- ---------------

        Net cash flows from financing activities                   (2,577,893)      4,892,730     (2,292,679)
                                                               --------------- --------------- ---------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               (3,656,420)       (399,846)     2,158,379

CASH AND CASH EQUIVALENTS, Beginning of period                     32,982,876      33,382,722     31,224,343
                                                               --------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, End of period                         $ 29,326,456    $ 32,982,876   $ 33,382,722
                                                               =============== =============== ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
  Cash paid during the period for:
    Interest                                                     $ 31,755,319    $ 31,388,513   $ 27,874,705
    Income taxes                                                   13,030,853       6,551,344      9,589,439
  Noncash investing and financing activities:
    Property acquired through capital leases                     $  2,200,000    $  1,079,000   $          -
    Accumulated other comprehensive income (loss):
      Unrealized gain (loss) on interest rate
      swap agreement, net of income taxes                          (1,361,000)       (801,000)     1,414,000

      Deferred taxes resulting from unrealized
      gain (loss) on interest rate swap agreements                   (861,000)       (506,000)       894,000

  Tax benefit on exercise of stock options                                  -               -         20,000
  Other intangible agreement to be paid over three years            1,585,407               -              -
  Contingent consideration associated with bookstore acquisition      700,000               -              -


See notes to consolidated financial statements.
</TABLE>


                                       39
<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 and Net Textstore LLC (accounted for in
the Company's Textbook Division), Specialty Books, Inc. (the Company's distance
education business), 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. On April 24, 2007, the Company established Net Textstore LLC as
a wholly-owned subsidiary separately incorporated under the laws of the State of
Delaware. 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 balances of Specialty Books, Inc., NBC Textbooks LLC, CBA and Net
Textstore LLC, after elimination of all intercompany balances and transactions.
In connection with their incorporation, Specialty Books, Inc., NBC Textbooks
LLC, CBA and Net Textstore LLC 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.

                                       40
<PAGE>

    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 $5.7 million, $3.3 million and $3.2
million for the fiscal years ended March 31, 2008, 2007 and 2006, respectively.
Shipping and handling costs are included in operating expenses in the
consolidated statements of operations and approximated $9.9 million, $7.4
million and $7.4 million for the fiscal years ended March 31, 2008, 2007 and
2006, respectively.

    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, $7.3 million and $5.9 million for the fiscal years ended March 31,
2008, 2007 and 2006, 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 technology (PRISM and WinPRISM) and
e-commerce technology (WebPRISM), which are used 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.

                                       41
<PAGE>

    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 technology 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.

    Development costs also include the development of new software products and
enhancements to existing software products used 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, capitalization of which totaled $0.3 million and $0.7
million for the fiscal year ended March 31, 2008 and 2007, respectively, are
amortized on a straight-line basis over a period of six years.

    Amortization of the capitalized costs associated with developed technology
totaled $2.0 million, $1.9 million and $1.9 million for the fiscal years ended
March 31, 2008, 2007 and 2006, 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 generally
represents payments made at the time of contract signing or renewal 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 agreements, which range from 1 to 15 years.

    IDENTIFIABLE INTANGIBLES - OTHER: The other identifiable intangible asset
relates to an agreement whereby NBC agreed to pay $1.7 million over a period of
3 years to a software company in return for certain rights related to that
company's products that are designed to enhance web-based sales. This
identifiable intangible is amortized on a straight-line basis over the 3 year
base term of the agreement.

    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, 2008 and 2007 was approximately $6.7 million and $4.8 million, respectively.

    DERIVATIVE FINANCIAL INSTRUMENTS: Interest rate swap agreements are used 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, 2008 and 2007, because
of the relatively short maturity of these instruments. The fair value of
long-term debt, including the current maturities, was approximately $357.1
million and $377.0 million as of March 31, 2008 and 2007, 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
"out-of-the-money" and totaled a loss of $1.1 million as of March 31, 2008 and
"in-the-money" and totaled a gain of $1.3 million as of March 31, 2007, 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 and recognize 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.

                                       42
<PAGE>

    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 used the minimum value method for pro
forma disclosure of the impact of SFAS No. 123 prior to the adoption of SFAS No.
123R.

    NONVESTED 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 recognized 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.

    The Company adopted the provisions of Financial Accounting Standards Board
("FASB") Interpretation No. 48, "ACCOUNTING FOR UNCERTAINTY TO INCOME TAXES"
(FIN 48) on April 1, 2007. Under FIN 48, tax benefits are recorded only for tax
positions that are more likely than not to be sustained upon examination by tax
authorities. The amount recognized is measured as the largest amount of benefit
that is greater than 50% likely to be realized upon ultimate settlement.
Unrecognized tax benefits are tax benefits claimed in the tax returns that do
not meet these recognition and measurement standards. The adoption of FIN 48 had
no impact on the Company's consolidated financial statements. Although the
statute of limitations varies by state, generally starting with fiscal year
2003, tax years remain open and subject to examination by either the Internal
Revenue Service or a number of states where the Company does business. Interest
and penalties associated with underpayments of income taxes are classified in
the consolidated statements of operations as income tax expense.

    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 March 2008, the FASB issued SFAS
No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (AN
AMENDMENT OF FASB STATEMENT NO. 133). SFAS No. 161 requires entities to provide
enhanced disclosures about how and why an entity uses derivative instruments,
how derivative instruments and related hedged items are accounted for under FASB
Statement No. 133, and how derivative instruments and related hedged items
affect an entity's financial position, financial performance, and cash flows.
This Statement becomes effective in fiscal year 2010. The Company's present
interest rate swap agreement expires on September 30, 2008; however, the current
disclosure format will need to be expanded (particularly as it relates to the
specific components of gains and losses on derivative instruments) if derivative
instruments are used in the future.

    In December 2007, the FASB issued SFAS No. 141 (revised 2007), BUSINESS
COMBINATIONS and SFAS No. 160, NONCONTROLLING INTERESTS IN CONSOLIDATED
FINANCIAL STATEMENTS. SFAS No. 141 (revised 2007) establishes principles and
requirements for how an acquirer recognizes and measures the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and determines what information
to disclose to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. In addition, SFAS No. 141
(revised 2007) requires that direct costs associated with an acquisition be
expensed as incurred. SFAS No. 160 establishes accounting and reporting
standards for the noncontrolling interest (minority interest) in a subsidiary
and for the deconsolidation of a subsidiary. Included in SFAS No. 160 is the
requirement that noncontrolling interests be reported in the equity section of
the balance sheet. These Statements become effective for the Company in fiscal
year 2010. Management has not yet determined if SFAS No. 141 (revised 2007) will
have a material impact on its consolidated financial statements. SFAS No. 160 is
not expected to have a material impact on the Company's consolidated financial
statements.

                                       43
<PAGE>

    In February 2007, the FASB issued SFAS 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. The Company did not adopt any provisions of this
Statement, which became effective for the Company in fiscal year 2009.

    In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS.
This Statement defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair value measurements. The Statement has
been subsequently amended by FASB Staff Position No.'s 157-1 and 157-2 to
exclude lease classification or measurement (except in certain instances) from
the scope of SFAS No. 157 and to defer the effective date of SFAS No. 157 for
most nonfinancial assets and nonfinancial liabilities. This Statement becomes
effective for the Company partially in fiscal year 2009 and partially in fiscal
year 2010. Management has not yet determined if the Statement will have a
material impact on its consolidated financial statements.

C.  RECEIVABLES

    Receivables are summarized as follows:

                                                            March 31,
                                                 -------------------------------
                                                      2008             2007
                                                 --------------  ---------------
Trade receivables, less allowance for doubtful
accounts of $1,033,360 and $1,100,360 at
March 31, 2008 and 2007, respectively             $ 24,992,495     $ 27,836,739
Receivables from book publishers for returns        25,096,497       20,875,916
Advances for book buy-backs                          3,773,634        4,855,202
Other                                                3,533,882        1,381,213
                                                 --------------  ---------------
                                                  $ 57,396,508     $ 54,949,070
                                                 ==============  ===============

   Trade receivables include the effect of estimated product returns. The amount
of estimated product returns at March 31, 2008 and 2007 was $5.3 million and
$5.0 million, respectively.

D.  INVENTORIES

    Inventories are summarized as follows:

                                                     March 31,
                                         -------------------------------------
                                               2008                2007
                                         -----------------   -----------------
Bookstore Division                           $ 65,769,314        $ 61,297,777
Textbook Division                              30,575,106          30,323,636
Complementary Services Division                 2,666,667           2,927,293
                                         -----------------   -----------------
                                             $ 99,011,087        $ 94,548,706
                                         =================   =================

    Textbook Division inventories include the effect of estimated product
returns. The amount of estimated product returns at March 31, 2008 and 2007 was
$2.4 million and $2.3 million, respectively.

    General and administrative costs associated with the storage and handling of
inventory approximated $10.4 million and $10.8 million for the fiscal years
ended March 31, 2008 and 2007, respectively, of which $2.4 million and $2.5
million was capitalized into inventory at March 31, 2008 and 2007, respectively.


                                       44
<PAGE>

E.  PROPERTY AND EQUIPMENT

    A summary of the cost of property and equipment follows:

                                                            March 31,
                                                 -------------------------------
                                                      2008             2007
                                                 --------------  ---------------
Land                                              $  3,565,382     $  3,565,382
Buildings and improvements                          25,028,868       21,956,795
Leasehold improvements                              10,376,770        8,962,778
Furniture and fixtures                              13,750,380       12,269,822
Information systems                                 12,831,900       10,713,109
Automobiles and trucks                                 234,620          221,046
Machinery                                              374,074          357,241
Projects in process                                  1,282,801          705,735
                                                 --------------  ---------------
                                                    67,444,795       58,751,908
Less:  Accumulated depreciation & amortization     (22,378,615)     (15,673,799)
                                                 --------------  ---------------
                                                  $ 45,066,180     $ 43,078,109
                                                 ==============  ===============

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.

    For the fiscal year ended March 31, 2008, 20 bookstore locations were
acquired in 14 separate transactions. The total purchase price, net of cash
acquired, of such acquisitions was $14.3 million, of which $8.8 million was
assigned to tax-deductible goodwill, $1.9 million was assigned to covenants not
to compete with amortization periods of three years, and $0.6 million was
assigned to contract-managed acquisition costs with amortization periods of up
to five years. Included in the total purchase price, net of cash acquired, is
$0.7 million of contingent consideration associated with one of the bookstores
acquired, which will be paid to the previous owner on a monthly basis and is
calculated as a percentage of revenues generated by the acquired bookstore each
month. Payments of contingent consideration totaled $41,219 for the fiscal year
ended March 31, 2008.

    The Company also incurred $0.7 million in contract-managed acquisition costs
with amortization periods of up to ten years associated with the renewal of 12
contract-managed locations during the fiscal year ended March 31, 2008.

    Effective September 1, 2007, the Company entered into an agreement whereby
it agreed to pay $1.7 million over a period of 3 years to a software company in
return for certain rights related to that company's products that are designed
to enhance web-based sales. This other identifiable intangible is being
amortized on a straight-line basis over the 3 year base term of the agreement.
The asset and corresponding liability were recorded based upon the present value
of the future payments assuming an imputed interest rate of 6.7%, resulting in a
discount of $0.1 million which will be recorded as interest expense over the
base term of the agreement utilizing the effective interest method of
accounting.

    On May 1, 2006, the Company 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, of which $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. Additionally, for the fiscal year ended March 31, 2007, another 17
bookstore locations were acquired in 16 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. 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.

                                       45
<PAGE>

    The changes in the carrying amount of goodwill, in total and by reportable
segment, are as follows:


                                  Bookstore      Corporate
                                  Division     Administration       Total
                               -------------- ----------------  ---------------
Balance, April 1, 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

  Additions to goodwill:

    Bookstore acquisitions         8,760,909                -        8,760,909

                               -------------- ----------------  ---------------
Balance, March 31, 2008         $ 51,305,398    $ 269,061,875    $ 320,367,273
                               ============== ================  ===============

     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, where
applicable, 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:
<TABLE>
<CAPTION>

                                                          March 31, 2008
                                        ------------------------------------------------
                                            Gross                             Net
                                           Carrying        Accumulated      Carrying
                                            Amount         Amortization      Amount
                                        ---------------  --------------- ---------------
<S>                                      <C>              <C>              <C>
 Customer relationships                  $ 114,830,000    $ (23,444,140)   $ 91,385,860
 Developed technology                       12,452,254       (7,950,631)      4,501,623
 Covenants not to compete                    7,451,032       (3,546,939)      3,904,093
 Contract-managed acquisition costs          3,652,771       (1,232,261)      2,420,510
 Other                                       1,585,407         (308,276)      1,277,131
                                        ---------------  --------------- ---------------
                                         $ 139,971,464    $ (36,482,247)  $ 103,489,217
                                        ===============  =============== ===============

                                                       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
                                        ===============  =============== ===============
</TABLE>

    Information regarding aggregate amortization expense for identifiable
intangibles subject to amortization is presented in the following table:

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

Fiscal year ended March 31, 2008                                 $ 10,443,335
Fiscal year ended March 31, 2007                                    9,613,598
Fiscal year ended March 31, 2006                                    8,762,398

Estimated amortization expense for the fiscal years ending
March 31:
  2009                                                           $ 10,799,000
  2010                                                              9,990,000
  2011                                                              7,055,000
  2012                                                              6,249,000
  2013                                                              6,047,000

    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. The tradename was determined to have an indefinite life based on
the Company's current intentions. The Company periodically reviews the
underlying factors relative to this intangible asset. If factors were to change
that would indicate the need to assign a definite life to this asset, the
Company would do so and commence amortization.


                                       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,
                                                                    -------------------------------
                                                                         2008           2007
                                                                    -------------- ----------------
<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 (5.13% and 7.83%, as reset
on March 31, 2008 and March 30, 2007, respectively)                  $195,103,081     $197,021,472

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%                                                        330,752          370,213
                                                                    --------------    -------------
                                                                      370,433,833      372,391,685

Less current maturities of long-term debt                              (2,070,657)      (1,957,854)

                                                                    --------------    -------------
Long-term debt                                                       $368,363,176     $370,433,831
                                                                    ==============    =============
</TABLE>

    Indebtedness at March 31, 2008 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 other indebtedness. 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, 2008 was $50.2 million. The Revolving
Credit Facility was unused at March 31, 2008.

    The interest rate on the 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, 2008 and 2007 were $15.2 million
and $15.7 million at an average rate of 8.8% and 9.2%, 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 was no excess cash flow obligation for the fiscal years ended March 31,
2008 and 2007.

    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, 2008.

                                       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 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 used 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, 2008, the aggregate maturities of long-term debt for the next
five fiscal years were as follows:

   Fiscal
   Year
-----------

   2009                 $  2,070,657
   2010                    2,075,617
   2011                  191,104,012
   2012                  175,060,548
   2013                       67,387

H.  LEASES AND OTHER COMMITMENTS

    The Company has 7 bookstore facility leases classified as capital leases.
These leases expire at various dates through fiscal year 2018 and contain
options to renew for periods of up to ten years. Capitalized leased property
included in property and equipment was $4.1 million at March 31, 2008, net of
accumulated depreciation.

    The Company also leases bookstore facilities and data processing equipment
under noncancelable operating leases expiring at various dates through fiscal
year 2022, 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 14.6%.


                                       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
-----------                                    ------------- -------------
2009                                            $ 1,039,335  $ 17,854,000
2010                                              1,155,450    14,855,000
2011                                              1,174,565    12,286,000
2012                                                764,607     9,991,000
2013                                                529,923     7,219,000
Thereafter                                        1,658,407    18,229,000
                                               ------------- -------------
Total minimum lease payments                      6,322,287  $ 80,434,000
                                                             =============
Less amount representing interest at 9.3%        (1,552,114)
                                               -------------
Present value of minimum lease payments           4,770,173
Less obligations due within one year               (658,415)
                                               -------------
Long-term obligations                           $ 4,111,758
                                               =============

    Total rent expense for the fiscal years ended March 31, 2008, 2007 and 2006
was $29.7 million, $26.5 million and $17.1 million, respectively. Percentage
rent expense for the fiscal years ended March 31, 2008, 2007 and 2006 was
approximately $9.3 million, $8.4 million and $2.6 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 uses 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
were reduced periodically until reaching $130.0 million. General information
regarding the Company's exposure to fluctuations in variable interest rates is
presented in the following table:

                                                              March 31,
                                                         2008           2007
                                                    ------------- -------------
Total indebtedness outstanding                      $ 375,204,006 $ 375,586,768

Term Loan subject to Eurodollar fluctuations          195,103,081   197,021,472

Notional amount under swap agreement                  130,000,000   140,000,000

Fixed interest rate indebtedness                      180,100,925   178,565,296

Variable interest rate, including applicable margin:
  Term Loan                                                 5.13%         7.83%


                                       50
<PAGE>

    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.

     (2)  The interest rate swap agreement was 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, 2008. 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 (loss)" 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".


                                       51
<PAGE>

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

                                              Fiscal Year Ended   Fiscal Year Ended  Fiscal Year Ended
                                                  March 31,           March 31,          March 31,
                                                    2008                2007               2006
                                              ------------------  ------------------ -----------------
<S>                                                <C>                  <C>               <C>
Balance Sheet Components:
  Other assets (Accrued interest) - fair
  value of swap agreement                          $ (1,119,000)        $ 1,301,000       $ 2,833,000

  Deferred income taxes                                 433,473            (503,975)       (1,097,433)
                                              ------------------  ------------------ -----------------
                                                   $   (685,527)        $   797,025       $ 1,735,567
                                              ==================  ================== =================

Portion of Agreement Subsequent to
September 30, 2005 Hedge Designation:
  Increase (Decrease) in fair value
  of swap agreement                                $ (2,222,000)       $ (1,307,000)      $ 2,308,000

Portion of Agreement Prior to
September 30, 2005 Hedge Designation:
  Increase (Decrease) in fair
  value of swap agreement                              (198,000)           (225,000)          525,000
</TABLE>

J.  INCOME TAXES

    The provision (benefit) for income taxes consists of:

              Fiscal Year Ended  Fiscal Year Ended  Fiscal Year Ended
                  March 31,          March 31,          March 31,
                    2008               2007               2006
             ------------------ ------------------ ------------------
Current:
  Federal          $ 9,375,591     $    8,964,579       $  7,715,245
  State              1,486,430          1,439,632            (27,679)
Deferred            (3,443,682)        (2,148,119)             3,539
             ------------------ ------------------ ------------------
                   $ 7,418,339     $    8,256,092       $  7,691,105
             ================== ================== ==================

    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 Ended  Fiscal Year Ended  Fiscal Year Ended
                            March 31,          March 31,          March 31,
                              2008               2007               2006
                        ----------------- ------------------ ------------------
Statutory rate                35.0%              35.0%              35.0%
State income tax effect        1.0                3.8                3.8
Meals and entertainment        1.0                0.8                0.8
Other                          0.3                  -               (1.0)
                        ----------------- ------------------ ------------------
                              37.3%              39.6%              38.6%
                        ================= ================== ==================

                                       52
<PAGE>

    The decline in the state income tax effect in fiscal year 2008 is
attributable to $0.8 million in state income tax benefits recorded in
conjunction with a State of Nebraska tax incentive program based upon employment
and investment growth ("LB775"). This program offers income tax credits, sales
tax refunds and property tax exemptions to companies who make investments that
meet minimum levels of investment and employment. The state income tax benefits
recorded in fiscal year 2008 represent estimated credits earned as of March 31,
2008 which are projected to be applied against Nebraska state income taxes
during fiscal years 2006 through 2019.

    The components of the deferred tax assets (liabilities) consist of the
following:

                                                          March 31,
                                                    2008             2007
                                              ---------------- ---------------
Deferred income tax assets (liabilities),
current:
  Vacation accruals                            $    1,022,517   $     893,582
  Inventories                                         642,910         547,979
  Allowance for doubtful accounts                     400,298         426,252
  Product returns                                   1,104,107       1,033,719
  Incentive programs                                2,730,654       2,672,741
  Interest rate swap agreement                        433,473               -
  Other                                              (275,866)       (313,159)
                                              ---------------- ---------------
                                                    6,058,093       5,261,114
                                              ---------------- ---------------
Deferred income tax assets (liabilities),
noncurrent:
  Deferred compensation agreements                    133,014         123,140
  Goodwill amortization                            (6,793,181)     (4,874,676)
  Covenants not to compete                          1,180,890         933,564
  Identifiable intangibles                        (49,160,579)    (52,111,204)
  Property and equipment                           (1,130,263)     (1,593,541)
  Interest rate swap agreement                              -        (503,975)
  Other                                               665,704        (585,426)
                                              ---------------- ---------------
                                                  (55,104,415)    (58,612,118)
                                              ---------------- ---------------
                                               $  (49,046,322)  $ (53,351,004)
                                              ================ ===============

     The Company had no unrecognized tax benefits as of March 31, 2008 and 2007.
Interest and penalties were $8,211 and $54,099, respectively, for the fiscal
year ended March 31, 2008; $2,615 and $6,892, respectively, for the fiscal year
ended March 31, 2007; and $2,067 and $3,964, respectively, for the fiscal year
ended March 31, 2006.

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 matching feature (100% of the employee's contribution up to 5% of their
total compensation). The Company's contributions for the fiscal years ended
March 31, 2008, 2007 and 2006 were $2.1 million, $2.0 million and $1.4 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 totaled $0.3 million as of March 31, 2008 and 2007.

                                       53
<PAGE>

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, 2008, there were no 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 prior to April 1, 2007, 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.

    On October 12, 2007, NBC's Board of Directors approved the grant of the
remaining 4,917 options available for grant under the 2004 Stock Option Plan.
The options, which have an exercise price of $205 per share, vest 25% on each of
October 12, 2007, 2008, 2009 and 2010. The options expire on October 12, 2017.
The fair value of such options was estimated on the date of grant under the
calculated value method using a closed-form option valuation model that
contained the following assumptions - expected volatility of 13.1%, no expected
dividends, an expected term of four years, and a risk-free rate of 4.3%. As the
stock underlying such options is not publicly traded, the expected volatility
was based upon quarterly observations of the Dow Jones Global Index for Small
Cap General Retailers over the four year period ended October 12, 2007. This
index was selected as one which fit the industry in which the Company operates,
and the volatility of that index was calculated utilizing a standard deviation
formula. The expected term was an estimate of the period of time that such
options granted are expected to remain outstanding after considering the vesting
period and historical experience. The risk-free rate was based upon the October
12, 2007 estimated yield of a U.S. Treasury constant maturity series with a four
year term.

                                       54
<PAGE>

    Specific information regarding share-based compensation for stock options
granted after March 31, 2007 is presented in the following table:

Stock Options Granted October 12, 2007:

  General information:

    Grant date calculated fair value per option                   $    38.23

    Shares at March 31, 2008:
      Vested                                                           1,229
      Nonvested                                                        3,688
                                                                 ---------------
        Total                                                          4,917
                                                                 ===============

    Unrecognized share-based compensation
    at March 31, 2008                                             $  117,483

    Period over which unrecognized share-based
    compensation will be realized (in years) at March 31, 2008           2.5

Financial information:
                                                                  Fiscal Year
                                                                 Ended March 31,
                                                                      2008
                                                                ----------------

  Consolidated Statement of Operations:

    Share-based compensation                                      $   70,489
    Deferred tax benefit                                              27,305

  Other Required Disclosures:

    Total calculated fair value of shares vested
    during the period                                             $   46,993


                                       55
<PAGE>


    A summary of the Company's share-based compensation activity related to
stock options vested or expected to vest for the 2004 Stock Option Plan is as
follows:

                                                   Fiscal Year Ended
                                                        March 31,
                                                          2008
                                                 ------------------------
                                                               Weighted-
                                                               Average
                                                              Exercise
                                                   Number       Price
                                                 ----------- ------------

2004 Stock Option Plan:
  Outstanding - beginning of year                    75,749     $ 111.83
  Granted                                             4,917       205.00
  Exercised or converted                                  -            -
  Forfeited                                               -            -
  Expired                                                 -            -
                                                 ----------- ------------
  Outstanding - end of year                          80,666     $ 117.51
                                                 =========== ============

  Exercisable - end of year                          73,481     $ 111.10
                                                 =========== ============

                                          2004 Stock Option Plan
                            ----------------------------------------------------
                                  Outstanding                 Exercisable
                            -------------------------- -------------------------
                                          Weighted-                 Weighted-
                                           Average                   Average
                                          Remaining                 Remaining
                                         Contractual               Contractual
                               Number     Term (Yrs)     Number     Term (Yrs)
                            ----------- -------------- ---------- --------------
March 31, 2008:
  Exercise price of $52.47      26,628            5.9     26,628            5.9
  Exercise price of $106        11,760            5.9     11,760            5.9
  Exercise price of $146        10,750            5.9     10,750            5.9
  Exercise price of $160        26,611            7.1     23,114            7.1
  Exercise price of $205         4,917            9.5      1,229            9.5
                            ----------- -------------- ---------- --------------
                                80,666            6.5     73,481            6.3
                            =========== ============== ========== ==============

    2005 RESTRICTED STOCK PLAN - This plan provides for the issuance of shares
of nonvested stock 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 re-acquire such shares at
less than their then fair market value under certain conditions.

    On March 31, 2006, 1,400 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.

                                       56
<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
nonvested 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 is
re-measured at the end of each reporting period and recognized 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
nonvested stock until September 30, 2010 and is recorded as "other long-term
liabilities" in the consolidated balance sheets and as selling, general and
administrative expenses in the consolidated statements of operations. No
additional nonvested shares have been issued nor have any of the 4,200 nonvested
shares vested or been forfeited since the original issuance on March 31, 2006.

    In re-measuring share-based compensation at the end of each reporting
period, the Company recognizes to the greater of (a) the minimum compensation
benefits associated with the nonvested shares or (b) the estimated fair value of
such shares. As of March 31, 2008, the minimum compensation benefits exceed the
estimated fair value of the nonvested shares and are thus used as the basis for
recording share-based compensation. Fair value is estimated utilizing a
methodology which is consistent with the transaction-based method under the
market approach described in the AICPA Audit and Accounting Practice Aid Series,
VALUATION OF PRIVATELY-HELD-COMPANY EQUITY SECURITIES (the "Practice Aid"). This
methodology is consistent with the approaches that have been used in all four
arms-length negotiated transactions involving NBC's common stock since 1995,
including the last transaction on March 4, 2004 and includes the following
steps: (a) the determination of an estimated enterprise value using a multiple
of EBITDA; (b) the enterprise value is reduced by outstanding debt to derive an
equity value; and (c) the equity value is then divided by outstanding common
stock and common stock equivalents to arrive at an estimated equity value per
share. As NBC Holdings Corp.'s common stock is not publicly traded and the
nonvested shares represent a minority interest position, the estimated equity
value per share is discounted for these factors to arrive at the fair value of
the nonvested shares. The factors to be considered in performing a valuation as
outlined in the Practice Aid, as well as the risks outlined in this Annual
Report on Form 10-K and other factors, impact the selection of the EBITDA
multiple used in the previously mentioned valuation methodology. As these
factors and risks change, their impact on the valuation methodology is also
considered. The Company does not believe that the results of a contemporaneous
valuation by an unrelated valuation specialist would provide more reliable
evidence of valuation compared to the current methodology, given its consistent
application in all four arms-length negotiated transactions involving NBC's
common stock over the past thirteen years. Specific information regarding
nonvested stock share-based compensation is presented in the following table:

                                       57
<PAGE>


                                            Fiscal Years Ended March 31,
                                               2008             2007
                                          --------------- ----------------
NONVESTED STOCK:
  Valuation methodology                       Minimum         Minimum
                                           Compensation    Compensation
  Share-based compensation:
    Recognized:
      Value of nonvested shares              $   666,666      $   666,667
      Reimbursement for taxes                    303,444          330,290
                                          --------------- ----------------
        Total                                $   970,110      $   996,957
                                          =============== ================
    Unrecognized:
      Value of nonvested shares              $ 1,666,667      $ 2,333,333
      Reimbursement for taxes                    839,618        1,180,357
                                          --------------- ----------------
        Total                                $ 2,506,285      $ 3,513,690
                                          =============== ================

  Deferred tax benefit                       $   375,797      $   125,880

  Period over which unrecognized
  share-based compensation will be
  realized (in years)                                2.5              3.5

    During fiscal year 2006, the Company also recognized $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, Net Textstore 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.

    EBITDA is the measure of segment profit or loss used 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.


                                       58
<PAGE>

    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:
<TABLE>
<CAPTION>
                                                                                Complementary
                                                Bookstore        Textbook         Services
                                                 Division        Division         Division         Total
                                              -------------------------------- --------------- ---------------
<S>                                            <C>               <C>             <C>            <C>
Fiscal year ended March 31, 2008:
  External customer revenues                   $ 452,992,078     $ 99,584,957    $ 28,670,751   $ 581,247,786
  Intersegment revenues                            1,382,795       40,100,078       5,701,472      47,184,345
  Depreciation and amortization expense            7,908,134        6,096,196       2,614,015      16,618,345
  Earnings before interest, taxes,
  depreciation, and amortization (EBITDA)         45,941,624       33,731,382       1,558,414      81,231,420
  Total assets                                   186,707,038      137,629,109      21,639,502     345,975,649

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

</TABLE>

                                       59
<PAGE>

    The following table reconciles segment information presented above with
consolidated information as presented in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>

                                                                 Fiscal Year Ended March 31,
                                                             2008              2007            2006
                                                        ---------------  --------------- ---------------
<S>                                                      <C>              <C>             <C>
Revenues:
  Total for reportable segments                          $ 628,432,131    $ 586,490,311   $ 451,347,884
  Elimination of intersegment revenues                     (47,184,345)     (42,062,347)    (31,239,985)
                                                        ---------------  --------------- ---------------
    Consolidated total                                   $ 581,247,786    $ 544,427,964   $ 420,107,899
                                                        ===============  =============== ===============

Depreciation and Amortization Expense:
  Total for reportable segments                          $  16,618,345    $  15,043,463   $  13,238,081
  Corporate Administration                                   1,033,494          485,893         437,048
                                                        ---------------  --------------- ---------------
    Consolidated total                                   $  17,651,839    $  15,529,356   $  13,675,129
                                                        ===============  =============== ===============

Income Before Income Taxes:
  Total EBITDA for reportable segments                   $  81,231,420    $  79,437,356   $  69,215,652
  Corporate Administration EBITDA loss (including
  interdivision profit elimination)                        (11,280,477)     (11,323,483)     (8,012,619)
                                                        ---------------  --------------- ---------------
                                                            69,950,943       68,113,873      61,203,033
Depreciation and amortization                              (17,651,839)     (15,529,356)    (13,675,129)
                                                        ---------------  --------------- ---------------
  Consolidated income from operations                       52,299,104       52,584,517      47,527,904
Interest and other expenses, net                           (32,424,742)     (31,716,939)    (27,595,306)
                                                        ---------------  --------------- ---------------
  Consolidated income before income taxes                $  19,874,362    $  20,867,578   $  19,932,598
                                                        ===============  =============== ===============

                                                           March 31,        March 31,        March 31,
                                                             2008             2007             2006
                                                        ---------------  --------------- ---------------
Total Assets:
  Total for reportable segments                          $ 345,975,649    $ 335,434,355   $ 277,383,148
  Assets not allocated to segments:
    Cash and cash equivalents                               12,110,876       20,180,524      26,806,386
    Receivables, net                                        19,490,619       13,985,140      13,868,221
    Recoverable income taxes                                         -                -       1,438,819
    Deferred income taxes                                    1,901,092        1,290,113       1,102,002
    Prepaid expenses and other assets                        2,259,681        1,791,710       1,559,788
    Property and equipment, net                             12,017,331       12,453,302      11,664,269
    Goodwill                                               269,061,875      269,061,875     269,061,875
    Identifiable intangibles, net                           33,347,263       31,968,596      31,320,000
    Debt issue costs, net                                    5,119,263        6,939,046       7,697,227
    Other assets                                               803,772        2,382,931       3,444,595
                                                        ---------------  --------------- ---------------
    Consolidated total                                   $ 702,087,421    $ 695,487,592   $ 645,346,330
                                                        ===============  =============== ===============
</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

    There were no dividends declared and paid by the Company to NBC during the
fiscal years ended March 31, 2008, 2007 and 2006.


                                       60
<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. Closure
activities were completed in fiscal year 2007. Payments of one-time termination
benefits were completed in April of 2008. Details regarding the warehouse
closure and its impact on the Textbook Division are outlined below:

<TABLE>
<CAPTION>

                                      Fiscal Year Ended
                                          March 31,
                                           2007 (1)
                                      ------------------
<S>                                    <C>                <C>            <C>            <C>            <C>
Costs of Closure:
  One-time termination benefits               $ 473,000

  Costs to terminate contracts                  189,000

  Costs of consolidation/relocation             112,475
                                      ------------------
                                              $ 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.

    One-time termination benefits paid in fiscal year 2008 totaled $0.2 million,
resulting in an adjustment of $36,057 to reduce the liability for one-time
termination benefits to $2,855 at March 31, 2008 (the final payout of $2,855 was
made in April of 2008).

Q.  CONDENSED CONSOLIDATING FINANCIAL INFORMATION

    On April 24, 2007, the Company established Net Textstore LLC as a
wholly-owned subsidiary separately incorporated under the laws of the State of
Delaware. 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


                                       61
<PAGE>

Books, Inc., a wholly-owned subsidiary of the Company. In connection with their
incorporation, Net Textstore LLC, CBA, NBC Textbooks LLC and Specialty Books,
Inc. have 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. Net Textstore LLC, 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 (Net Textstore LLC (from
April 24, 2007), CBA (from May 1, 2006), NBC Textbooks LLC and Specialty Books,
Inc.), consolidating eliminations, and consolidated totals.


                                       62
<PAGE>

NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2008
----------------------------------------------------------------------------------------------------------------------

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

CURRENT ASSETS:
  Cash and cash equivalents                            $  23,588,130   $   5,738,326  $            -    $  29,326,456
  Receivables, net                                        50,231,144      35,404,082     (28,238,718)      57,396,508
  Inventories                                             54,029,013      44,982,074               -       99,011,087
  Deferred income taxes                                    1,901,092       4,157,001               -        6,058,093
  Prepaid expenses and other assets                        2,259,681         279,396               -        2,539,077
                                                       --------------  -------------- --------------- ----------------
    Total current assets                                 132,009,060      90,560,879     (28,238,718)     194,331,221

PROPERTY AND EQUIPMENT, net                               39,757,056       5,309,124               -       45,066,180

GOODWILL                                                 304,831,164      15,536,109               -      320,367,273

IDENTIFIABLE INTANGIBLES, NET                             46,586,976      88,222,241               -      134,809,217

INVESTMENT IN SUBSIDIARIES                               131,583,301               -    (131,583,301)               -

OTHER ASSETS                                               6,750,356         763,174               -        7,513,530
                                                       --------------  -------------- --------------- ----------------
                                                       $ 661,517,913   $ 200,391,527  $ (159,822,019)   $ 702,087,421
                                                       ==============  ============== =============== ================
LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
  Accounts payable                                     $  32,282,516   $  24,587,231  $  (28,238,718)   $  28,631,029
  Accrued employee compensation and benefits               8,963,654       3,136,986               -       12,100,640
  Accrued interest                                         1,778,937               -               -        1,778,937
  Accrued incentives                                          59,736       7,049,121               -        7,108,857
  Accrued expenses                                         2,843,900         328,222               -        3,172,122
  Income taxes payable                                      (121,296)        968,666               -          847,370
  Deferred revenue                                           862,994               -               -          862,994
  Current maturities of long-term debt                     2,070,657               -               -        2,070,657
  Current maturities of capital lease obligations            658,415               -               -          658,415
                                                       --------------  -------------- --------------- ----------------
    Total current liabilities                             49,399,513      36,070,226     (28,238,718)      57,231,021

LONG-TERM DEBT, net of current maturities                368,363,176               -               -      368,363,176

CAPITAL LEASE OBLIGATIONS, net of current maturities       4,111,758               -               -        4,111,758

OTHER LONG-TERM LIABILITIES                                4,387,504          80,000               -        4,467,504

DEFERRED INCOME TAXES                                     22,446,415      32,658,000               -       55,104,415

DUE TO PARENT                                             16,970,151               -               -       16,970,151

COMMITMENTS

STOCKHOLDER'S EQUITY                                     195,839,396     131,583,301    (131,583,301)     195,839,396
                                                       --------------  -------------- --------------- ----------------
                                                       $ 661,517,913   $ 200,391,527  $ (159,822,019)   $ 702,087,421
                                                       ==============  ============== =============== ================

</TABLE>

                                       63
<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, net                                               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

INVESTMENT IN SUBSIDIARIES                                      115,974,467              -     (115,974,467)              -

OTHER ASSETS                                                     10,349,127        893,866                -      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>



                                       64
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2008
-------------------------------------------------------------------------------------------------------------------------

                                                            Nebraska
                                                              Book         Subsidiary                      Consolidated
                                                          Company, Inc.    Guarantors     Eliminations        Totals
                                                         --------------- --------------- ---------------  ---------------
<S>                                                      <C>             <C>             <C>             <C>
REVENUES, net of returns                                  $ 381,697,820   $ 240,155,652   $ (40,605,686)   $ 581,247,786

COSTS OF SALES (exclusive of depreciation shown below)      240,688,980     156,028,070     (42,577,576)     354,139,474
                                                         --------------- --------------- ---------------  ---------------

  Gross profit                                              141,008,840      84,127,582       1,971,890      227,108,312

OPERATING EXPENSES (INCOME):
  Selling, general and administrative                       108,050,482      47,171,054       1,971,890      157,193,426
  Closure of California Warehouse                                     -         (36,057)              -          (36,057)
  Depreciation                                                5,676,303       1,532,201               -        7,208,504
  Amortization                                                4,511,635       5,931,700               -       10,443,335
  Intercompany administrative fee                            (4,838,800)      4,838,800               -                -
  Equity in earnings of subsidiaries                        (15,608,834)              -      15,608,834                -
                                                         --------------- --------------- ---------------  ---------------
                                                             97,790,786      59,437,698      17,580,724      174,809,208
                                                         --------------- --------------- ---------------  ---------------
INCOME FROM OPERATIONS                                       43,218,054      24,689,884     (15,608,834)      52,299,104
                                                         --------------- --------------- ---------------  ---------------

OTHER EXPENSES (INCOME):
  Interest expense                                           33,559,239               -               -       33,559,239
  Interest income                                            (1,287,547)        (44,950)              -       (1,332,497)
  Loss on derivative financial instrument                       198,000               -               -          198,000
                                                         --------------- --------------- ---------------  ---------------
                                                             32,469,692         (44,950)              -       32,424,742
                                                         --------------- --------------- ---------------  ---------------

INCOME BEFORE INCOME TAXES                                   10,748,362      24,734,834     (15,608,834)      19,874,362

INCOME TAX EXPENSE (BENEFIT)                                 (1,707,661)      9,126,000               -        7,418,339
                                                         --------------- --------------- ---------------  ---------------
NET INCOME                                                $ 12,456,023    $  15,608,834   $ (15,608,834)   $  12,456,023
                                                         =============== =============== ===============  ===============
</TABLE>

                                       65
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL 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 instrument                      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>

                                       66
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL 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 instrument                    (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>
                                       67
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2008
-----------------------------------------------------------------------------------------------------------------


                                                         Nebraska
                                                           Book        Subsidiary                  Consolidated
                                                       Company, Inc.   Guarantors    Eliminations     Totals
                                                      --------------- ------------  ------------- ---------------
<S>                                                     <C>            <C>             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES                   $ 18,644,826    $ 2,455,807    $        -   $  21,100,633

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                    (6,607,380)      (690,551)       37,022      (7,260,909)
  Acquisitions, net of cash acquired                    (14,246,655)      (435,000)            -     (14,681,655)
  Proceeds from sale of property and equipment               21,985         51,422       (37,022)         36,385
  Software development costs                               (272,981)             -             -        (272,981)
                                                      --------------  ------------- ------------- ---------------
    Net cash flows from investing activities            (21,105,031)    (1,074,129)            -     (22,179,160)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on long-term debt                   (1,957,852)             -             -      (1,957,852)
  Principal payments on capital lease obligations          (624,910)             -             -        (624,910)
  Net increase in revolving credit facility                       -              -             -               -
  Capital contributions                                       4,869              -             -           4,869
                                                      --------------  ------------- ------------- ---------------
    Net cash flows from financing activities             (2,577,893)             -             -      (2,577,893)
                                                      --------------  ------------- ------------- ---------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (5,038,098)     1,381,678             -      (3,656,420)

CASH AND CASH EQUIVALENTS, Beginning of period           28,626,228      4,356,648             -      32,982,876
                                                      --------------  ------------- ------------- ---------------
CASH AND CASH EQUIVALENTS, End of period               $ 23,588,130    $ 5,738,326    $        -   $  29,326,456
                                                      ==============  ============= ============= ===============
</TABLE>
                                       68
<PAGE>
NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL 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>

                                       69
<PAGE>

NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL 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>


                                       70
<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, 2008. 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, 2008, our disclosure controls and procedures
were effective.

    (b) MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING:

        Management is responsible for establishing and maintaining adequate
        internal control over financial reporting. The Company's internal
        control system was designed to provide reasonable assurance to
        management and the board of directors regarding the preparation and fair
        presentation of published financial statements.

        Management assessed the effectiveness of the Company's internal control
        over financial reporting as of March 31, 2008. In making this
        assessment, it used the criteria set forth by the Committee of
        Sponsoring Organizations of the Treadway Commission (COSO) in INTERNAL
        CONTROL - INTEGRATED FRAMEWORK. Based on our assessment we believe that,
        as of March 31, 2008, the Company's internal control over financial
        reporting was effective.


        /s/  Mark W. Oppegard               /s/  Alan G. Siemek
        ----------------------------------  ------------------------------------
        Mark W. Oppegard                    Alan G. Siemek
        Chief Executive Officer, President  Chief Financial Officer, Senior Vice
        and Director                        President of Finance
        June 26, 2008                       and Administration, Treasurer and
                                            Assistant Secretary
                                            June 26, 2008

    (c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM. This annual
report does not include an attestation report of the Company's registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this annual report.

    (d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. Except for changes
made in preparation for our first management report on internal control over
financial reporting included herein, 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, 2008
that materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.


                           ITEM 9B. OTHER INFORMATION.

    The Company is not required to file reports with the Securities and Exchange
Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, but is filing this Annual Report on Form 10-K on a voluntary
basis.

                                       71
<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         48   Director
   R. Sean Honey        37   Director
   Mark W. Oppegard     58   Chief Executive Officer, President and Director
   Barry S. Major       51   Chief Operating Officer and Director
   Alan G. Siemek       48   Chief Financial Officer, Senior Vice President of
                             Finance and Administration, Treasurer, and
                             Assistant Secretary
   Robert A. Rupe       60   Senior Vice President - Bookstore Division
   Michael J. Kelly     50   Senior Vice President - Textbook Division
   Larry R. Rempe       60   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,
Summit Energy, Herbal Science 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 38 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 9 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.

    ALAN G. SIEMEK, who has served in the college bookstore industry for 9 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.

    ROBERT A. RUPE, 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
Bookstore Division in April, 2001.

    MICHAEL J. KELLY, who has served in the college bookstore industry for 8
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.

    LARRY R. REMPE has served in the college bookstore industry for 22 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.

                                       72
<PAGE>

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 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, grants of
plan-based awards, 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.

    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.

                                       73
<PAGE>

     3)   STOCK OPTION AND OTHER EQUITY AWARDS. We use 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 nonvested 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 nonvested 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.


                                       74
<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
                                                                                              Deferred         (3)
                                     Fiscal                          Stock       Option     Compensation    All Other
     Name and Principal Position      Year     Salary     Bonus     Awards (1)   Awards (2)    Earnings    Compensation    Total
----------------------------------  -------  ---------- ---------- ----------- ------------ ------------- ------------- ---------
<S>                                   <C>    <C>         <C>         <C>            <C>          <C>         <C>         <C>
Mark W. Oppegard - Chief
Executive Officer, President,
and Director                          2008   $ 295,006   $ 76,000    $ 323,370      $     -      $ 5,439     $ 11,502   $ 711,317
                                      2007     295,006    195,000      332,319            -        4,374       11,516     838,215
                                      2006     295,007          -            -            -        1,446      171,016     467,469
Alan G. Siemek - Chief
Financial Officer, Senior
Vice President of Finance
and Administration, Treasurer,
and Assistant Secretary               2008     209,690     25,000      323,370            -            -       11,502     569,562
                                      2007     202,766    144,000      332,319            -            -       11,180     690,265
                                      2006     197,773          -            -            -            -      170,680     368,453

Barry S. Major - Chief
Operating Officer and Director        2008     279,691     73,000      323,370            -            -       11,502     687,563
                                      2007     272,770    189,000      332,319            -            -       11,180     805,269
                                      2006     267,775          -            -            -            -      170,680     438,455

Robert A. Rupe - Senior
Vice President - Bookstore Division   2008     222,926     40,000            -       12,429            -       11,502     286,857
                                      2007     188,307    130,000            -            -            -       11,431     329,738
                                      2006     174,445     30,000            -            -            -       11,016     215,461

Michael J. Kelly - Senior
Vice President - Textbook Division    2008     199,771     50,000            -       10,035            -       11,502     271,308
                                      2007     194,846     80,000            -            -            -        9,922     284,768
                                      2006     190,784          -            -            -            -       10,680     201,464

</TABLE>

     (1)  Represents share-based compensation recognized in connection with the
          1,400 shares of nonvested 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 nonvested 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)  The assumptions underlying share-based compensation recognized in
          connection with the options granted in fiscal year 2008 are outlined
          in Note M of the notes to the consolidated financial statements in
          Item 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. There were no
          stock options granted in fiscal year 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 year 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 nonvested 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.


                                       75
<PAGE>

GRANTS OF PLAN-BASED AWARDS

    The following table provides information concerning each grant of an award
to an Executive in the last completed fiscal year:
<TABLE>
<CAPTION>

                                                        All Other
                                                     Option Awards:   Exercise     Grant
                                                       Number of       or Base   Date Fair
                                                       Securities     Price of   Value of
                                            Grant      Underlying      Option     Option
                Name                        Date        Options        Awards     Awards
------------------------------------------------------------------------------------------
<S>                                         <C>           <C>         <C>        <C>
Mark W. Oppegard - Chief
Executive Officer, President,
and Director                                   -               -      $   -    $     -

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

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

Robert A. Rupe - Senior
Vice President - Bookstore Division   10/12/2007             867        205     33,145

Michael J. Kelly - Senior
Vice President - Textbook Division    10/12/2007             700        205     26,760
</TABLE>

    The exercise price of the options granted under the 2004 Stock Option Plan
approximated the estimated fair value at the date of grant of the shares
underlying such options. The estimated fair value of the shares underlying such
options was determined utilizing the methodology described in Note M of the
notes to the consolidated financial statements in Item 8, FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA.

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED
AWARDS TABLE- EMPLOYMENT AGREEMENTS

   We have employment agreements with each of the Executives. As amended, such
agreements (the "Employment Agreements") with the previously mentioned
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, $214,000 per annum; Mr. Major,
$284,000 per annum; Mr. Rupe, $230,000 per annum; and Mr. Kelly, $203,000 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.

                                       76
<PAGE>

     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.


                                       77
<PAGE>

OUTSTANDING EQUITY AWARDS

     The following table provides information concerning outstanding equity
awards held by each Executive:
<TABLE>
<CAPTION>

             Outstanding Equity Awards at March 31, 2008

                                              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
                                 1,963             -      160.00     11/9/2014
                                                                                      623     $ 655,689          777     $ 835,428

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
                                 1,885             -      160.00     11/9/2014
                                                                                      623       655,689          777       835,428

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
                                 1,963             -      160.00     11/9/2014
                                                                                      623       655,689          777       835,428

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
                                 1,700             -      160.00     11/9/2014
                                 1,800           600      160.00     8/29/2015
                                   885           295      160.00     3/30/2016
                                   217           650      205.00    10/12/2017

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
                                 1,600             -      160.00     11/9/2014
                                 1,800           600      160.00     8/29/2015
                                   885           295      160.00     3/30/2016
                                   175           525      205.00    10/12/2017
</TABLE>


                                       78
<PAGE>

     (1)  Separate grants of stock options occurred on October 12, 2007, March
          30, 2006, August 29, 2005 and November 9, 2004. 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 year 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 nonvested stock do not
          vest until September 30, 2010.

     (3)  Represents the recognized portion of share-based compensation
          associated with the 1,400 shares of nonvested 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 nonvested 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 nonvested 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 nonvested 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:
<TABLE>
<CAPTION>

                     Nonqualified Deferred Compensation - March 31, 2008 (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 2008     Year 2008    Year 2008    Year 2008     2008 (2)
--------------------------------  ------------- --------------- --------- --------------- -----------
<S>                                 <C>          <C>           <C>           <C>          <C>

Mark W. Oppegard - Chief
Executive Officer, President,
and Director                            $ -           $ -       $ 20,077          $ -        $270,469

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.

                                       79
<PAGE>

     (2)  Included herein are above-market earnings of $5,439 in fiscal year
          2008, $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, 2008:
<TABLE>
<CAPTION>
                        Potential Payments Upon Termination or Change in Control - March 31, 2008 (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   $      -   $ 655,689   $ 11,498      $ 252      $ 285    $ 962,730

  Termination of Employment Without Cause              295,006          -     655,689     11,498        252        285      962,730

  Termination of Employment upon Death
  or Disability                                        147,503          -     655,689          -          -          -      803,192

Alan G. Siemek - Chief Financial
Officer, Senior Vice President of
Finance and Administration,
Treasurer, and Assistant Secretary
  Termination of Employment upon Expiration of Term    213,990          -     655,689     10,397        252        285      880,613

  Termination of Employment Without Cause              213,990          -     655,689     10,397        252        285      880,613

  Termination of Employment upon Death
  or Disability                                        106,995          -     655,689          -          -          -      762,684

Barry S. Major - Chief Operating
Officer and Director
  Termination of Employment upon Expiration of Term    284,003          -     655,689     12,424        252        285      952,653

  Termination of Employment Without Cause              284,003          -     655,689     12,424        252        285      952,653

  Termination of Employment upon Death
  or Disability                                        142,002          -     655,689          -          -          -      797,691

Robert A. Rupe - Senior Vice
President - Bookstore Division
  Termination of Employment upon Expiration of Term    230,006          -           -          -        252        285      230,543

  Termination of Employment Without Cause              230,006          -           -          -        252        285      230,543

  Termination of Employment upon Death
  or Disability                                        115,003          -           -          -          -          -      115,003

Michael J. Kelly - Senior Vice
President - Textbook Division
  Termination of Employment upon Expiration of Term    203,008          -           -     11,498        252        285      215,043

  Termination of Employment Without Cause              203,008          -           -     11,498        252        285      215,043

  Termination of Employment upon Death
  or Disability                                        101,504          -           -          -          -          -      101,504
</TABLE>

                                       80
<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 the incentive bonus earned for fiscal year 2008 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 nonvested 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 recognized at March 31, 2008 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.
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, 2008.

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


                                       81
<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 26, 2008. 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 80,666 options
are outstanding as of June 26, 2008, 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 26, 2008 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.
<TABLE>
<CAPTION>

                                                            Amount and
                                                            Nature of
                                                            Beneficial     Percent of
          Title of Class/Name of Beneficial Owner           Ownership (1)   Class (3)
--------------------------------------------------------  --------------  ------------
<S>                                                            <C>            <C>
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                                                18,188         3.2%
  Alan G. Siemek                                                  10,763         1.9%
  Barry S. Major (4)                                              14,440         2.6%
  Robert A. Rupe                                                   8,402         1.5%
  Michael J. Kelly                                                 9,121         1.6%

Ownership of Directors and All Senior
Executive Officers as a Group                                    600,814        98.4%

</TABLE>

     (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 - 12,788 shares; Mr. Siemek - 9,363
          shares; Mr. Major - 11,293 shares; Mr. Rupe - 8,402 shares; Mr. Kelly
          - 9,121 shares; and 56,431 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 26, 2008 and shares underlying
          nonqualified stock options exercisable within sixty days as detailed
          in footnote (1).

                                       82
<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, 2008 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, 2008 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                   80,666       $ 117.51               -

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 shows our fees for audit and audit-related services and
fees paid for tax and all other services rendered by Deloitte & Touche LLP, the
member firms of Deloitte Touche Tohmatsu, and their respective affiliates for
each of the last two years:

                            Fiscal Year Ended March 31,
                                 2008         2007
                            ------------   ------------

Audit Fees                    $ 218,000      $ 199,500
Audit-Related Fees               47,583         40,480
Tax Fees                        191,460        192,359
Other Fees                            -              -
                            ------------   ------------

Total                         $ 457,043      $ 432,339
                            ============   ============

    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.

                                       83
<PAGE>

    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
acquisition activity, Securities and Exchange Commission comment letters dated
March 30, 2007 and July 6, 2007, internal control benchmarking and the audit of
the 401(k) compensation plan.

    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.


                                       84
<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, 2008 and 2007.

                Consolidated Statements of Operations for the Years Ended
                March 31,
                2008, 2007 and 2006.

                Consolidated Statements of Stockholder's Equity for the Years
                Ended March 31, 2008, 2007 and 2006.

                Consolidated Statements of Cash Flows for the Years Ended
                March 31, 2008, 2007 and 2006.

                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.

                                       85
<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.

                                       86
<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.

                                       87
<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, filed as Exhibit
                10.16 to Nebraska Book Company, Inc. Form 10-K for the fiscal
                year ended March 31, 2007, is incorporated herein by reference.

        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.

                                       88
<PAGE>

        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.

        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.

                                       89
<PAGE>

        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.

        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.

                                       90
<PAGE>

        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.

        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.

                                       91
<PAGE>

        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., filed as Exhibit
                21.1 to Nebraska Book Company, Inc. Form 10-K for the fiscal
                year ended March 31, 2007, is incorporated herein by reference.

        31.1    Certification of Chief Executive Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.

        31.2    Certification of Chief Financial Officer pursuant to 18 U.S.C.
                Section 1350, 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.


                                       92
<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 26, 2008

    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 26, 2008
June 26, 2008


/s/ Alan G. Siemek                        /s/  R. Sean Honey
--------------------------------------    ------------------------------------
Alan G. Siemek                            R. Sean Honey
Chief Financial Officer,                  Director
Senior Vice President of Finance          June 26, 2008
and Administration, Treasurer,
and Assistant Secretary
June 26, 2008


/s/  Barry S. Major
--------------------------------------
Barry S. Major
Director
June 26, 2008



    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, 2008 has been,
or will be, sent to security holders.

                                       93
<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, 2008 and 2007 and for each of the three years in
the period ended March 31, 2008 and have issued our report thereon dated June
27, 2008; 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 27, 2008


                                       94
<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, 2008
  Allowance for doubtful accounts    $ 1,100,360    $ 468,007   $         -     $       -   $   (535,007)  $ 1,033,360
  Allowance for sales returns          4,958,090            -    29,591,517             -    (29,256,987)    5,292,620

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

</TABLE>

                                       95
<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.

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        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.

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<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.

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<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, filed as Exhibit
                10.16 to Nebraska Book Company, Inc. Form 10-K for the fiscal
                year ended March 31, 2007, is incorporated herein by reference.

        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.

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<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.

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        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.

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        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., filed as Exhibit
                21.1 to Nebraska Book Company, Inc. Form 10-K for the fiscal
                year ended March 31, 2007, is incorporated herein by reference.

        31.1    Certification of Chief Executive Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.

        31.2    Certification of Chief Financial Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.

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<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.


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