BNED

New in FY2026

• We face competition from other college bookstore operators and educational content providers, including Follett Corporation, eCampus, University Gear Shop, Valore Campus, Textbook Brokers, Slingshot, and BibliU.
• During Fiscal 2026, our four largest suppliers accounted for approximately 56% of our merchandise purchased, with the largest supplier accounting for approximately 50% of our merchandise purchased.
• Our wholesale business is a national distributor for rental textbooks offered through McGraw-Hill Education's consignment rental program (which includes approximately 1,428 titles) and Pearson Education’s consignment rental program (which includes approximately 1,077 titles).
• Through its centrally located, advanced distribution center, our wholesale business offers the seamless integration of these consignment rental programs and centralized administration and distribution to approximately 1,268 stores, including our retail stores.
• The Trump administration announced a series of tariffs throughout 2025 and 2026 on many products originating from countries worldwide, including potential higher tariffs on most products of Chinese origin.
• We plan to continue to scale the number of schools adopting First Day Complete .
• Restrictions on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal Communications Commission, states and through the availability of statutory damages and class action lawsuits for violations of the TCPA; • The Restore Online Shopper Confidence Act (“ROSCA”), and similar state laws, impose requirements and restrictions on online services that automatically charge payment cards on a periodic basis to renew a subscription service, if the consumer does not cancel the service; • In the absence of a federal comprehensive data privacy law, 22 U.S. states have enacted comprehensive consumer privacy laws as of May 2, 2026, including California with the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020, with enforcement commencing on July 1, 2020.
• Other states enacting comprehensive consumer privacy laws include Alabama, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia.
• There have been numerous recent actions and proposals by the federal government that have created uncertainty for public and private college institutions, as well as their students.
• In 2026, we have continued to witness high profile instances of students with traditionally protective immigration status being arrested, deported, or having their student visas revoked.
• In addition, an executive order issued in late 2025 that bans travelers from 19 countries from entering the U.S. and partial bans apply with respect to 20 other countries.
• Expectations regarding environmental, social, and governance matters may affect our business.
• Certain stakeholders, including some investors, customers, and employees, have expectations regarding environmental, social, and governance (“ESG”) matters, including with respect to human capital management, diversity and inclusion, and corporate governance.
• These expectations may influence our business practices and disclosures.
• If our practices or disclosures do not meet the expectations of particular stakeholders, our relationships with those stakeholders could be adversely affected.
• Risks Related to Controls and Procedures and the Investigation We have concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of May 2, 2026 due to material weaknesses, which could adversely affect our ability to report our financial results in a timely and accurate manner and have a material adverse impact on our business and financial condition.
• Controls and Procedures of this Annual Report on Form 10-K, our remediation of material weaknesses in internal controls over financial reporting first identified in connection with the audit of our Fiscal 2025 financial results have not yet been fully completed or tested by us and our independent auditors, and therefore, remain outstanding.
• As a result of these material weaknesses, our management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of May 2, 2026.
• We have developed and implemented our remediation plan, as described in Part II - Item 9A.
• Controls and Procedures of this Form 10-K, designed to address the material weaknesses, but our remediation efforts are not complete and are ongoing, and must be tested by us before such weaknesses can be deemed to no longer exist.
• Although we continue to remedy the ineffectiveness of the Company’s internal control over financial reporting, there can be no assurance as to when the remediation plan will be implemented; our management will continue to devote time and attention to these efforts.
• As previously reported, in July 2025, certain information regarding the recording of cost of digital sales was brought to the attention of the Audit Committee of the Board of Directors (the “Audit Committee”).
• With the assistance of outside counsel and advisors, the Audit Committee conducted an investigation into these matters (the “Investigation”).
• The Investigation was completed in the fall of 2025 and, based on the Investigation, the Audit Committee concluded that a former employee made unsupported manual journal entries that improperly reduced cost of sales.
• As a result of the Investigation and additional accounting matters, the Audit Committee concluded that our previously issued audited consolidated financial statements and related disclosures for certain prior periods should no longer be relied upon, and we have since restated those financial statements in our Annual Report on Form 10-K for the fiscal year ended May 3, 2025 (the “Restatement”).
• We have incurred, and may continue to incur, significant expenses related to legal, accounting and other professional services in connection with matters relating to or arising from the subject of the Investigation and Restatement.
• We have taken and continue to take significant efforts to remediate material weaknesses in our internal control over financial reporting and to enhance our disclosure controls and procedures.
• We may incur substantial costs in connection with these remediation activities, including consulting fees, audit and professional service fees, and upgrades to our financial reporting systems and controls and internal control processes.
• Our past failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital, may impact our ability to obtain alternative financing, and could have negative consequences under the terms of our existing credit agreements.
• As a result of matters arising from the Investigation and Restatement, we were unable to timely file our Annual Report on Form 10-K for Fiscal 2025 and certain Quarterly Reports on Form 10-Q.
• Although we have since filed those reports and are currently in compliance with our SEC reporting obligations, our prior untimely filings continue to restrict our ability to use a registration statement on Form S-3, which limits our ability to access the public markets quickly and efficiently.
• It may also restrict our ability to raise capital through traditional private placements, as potential investors may be reluctant to invest in a company that has a history of not being current in its SEC filings.
• In addition, our past failure to file periodic reports could constitute a default under certain covenants in existing or future credit facilities, which could lead to the acceleration of outstanding indebtedness or other adverse consequences.
• Risks Relating to our Common Stock and the Securities Market Two of our stockholders collectively own close to a majority of the Company’s outstanding shares, and their interests could differ from the interests of our other stockholders.
• As of May 2, 2026, Immersion Corporation (“Immersion”) and VitalSource own 32.9% and 9.5%, respectively, of the Company’s outstanding shares of Common Stock.
• Based on the foregoing, Immersion and VitalSource have considerable influence or effective control regarding the outcome of any transaction or action that requires stockholder approval, including the election of our Board of Directors, mergers, acquisitions, amendments to our charter and various corporate governance actions.
• Our Board of Directors is composed of six members, three of whom are members of the Board of Directors of Immersion Corporation, two of whom are also executives of Immersion Corporation.
• Each of Immersion and VitalSource may have interests different than those of other stockholders.

Gone since FY2025

• We face competition from other college bookstore operators and educational content providers, including Follett Corporation, eCampus, University Gear Shop, Valor Campus, Textbook Brokers, Slingshot, and BibliU.
• During Fiscal 2025, our four largest suppliers accounted for approximately 54% of our merchandise purchased, with the largest supplier accounting for approximately 45% of our merchandise purchased.
• Our wholesale business is a national distributor for rental textbooks offered through McGraw-Hill Educations consignment rental program (which includes approximately 1,292 titles) and Pearson Education’s consignment rental program (which includes approximately 998 titles).
• Through its centrally located, advanced distribution center, our wholesale business offers the seamless integration of these consignment rental programs and centralized administration and distribution to approximately 1,333 stores, including our retail stores.
• The Trump administration announced a series of tariffs throughout 2025 on most products originating from countries worldwide, including potential higher tariffs on most products of Chinese origin.
• We are moving quickly to accelerate our First Day Complete strategy.
• Many institutions adopted First Day Complete in Fiscal 2025, and we continue to scale the number of schools adopting First Day Complete .
• Restrictions on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal Communications Commission, states and through the availability of statutory damages and class action lawsuits for violations of the TCPA; • The Restore Online Shopper Confidence Act (“ROSCA”), and similar state laws, impose requirements and restrictions on online services that automatically charge payment cards on a periodic basis to renew a subscription service, if the consumer does not cancel the service; • In the absence of a federal comprehensive data privacy law, 20 U.S. states have enacted comprehensive consumer privacy laws as of May 3, 2025, including California with the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020, with enforcement commencing on July 1, 2020.
• Other states enacting comprehensive consumer privacy laws include Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia.
• In 2025, there have been numerous actions and proposals by the federal government that have created uncertainty for public and private college institutions, as well as their students.
• In 2025, there have been high profile instances of students with traditionally protective immigration status being arrested, deported, or having their student visas revoked.
• In addition, an executive order was recently issued that bans travelers from 19 countries from entering the U.S.
• Risks Related to Controls and Procedures and the Investigation We have concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of May 3, 2025 due to material weaknesses, which has adversely affected our ability to report our financial results in a timely and accurate manner and could have a material adverse impact on our business and financial condition.
• Controls and Procedures of this Annual Report on Form 10-K, we have identified material weaknesses in internal controls over financial reporting.
• As a result of these material weaknesses, our management concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of May 3, 2025.
• We are engaged in developing and implementing a remediation plan, as described in Part II - Item 9A.
• Controls and Procedures of this Form 10-K, designed to address the material weaknesses, but our remediation efforts are not complete and are ongoing.
• Although we are working to remedy the ineffectiveness of the Company’s internal control over financial reporting, there can be no assurance as to when the remediation plan will be fully developed, when it will be fully implemented, or the aggregate cost of implementation.
• Until our remediation plan is fully implemented, our management will continue to devote time and attention to these efforts.
• We have incurred, and may continue to incur, significant expenses related to legal, accounting and other professional services in connection with matters relating to or arising from the subject of the Investigation in fiscal years 2025 and 2026.
• We are undertaking significant efforts to remediate material weaknesses in our internal control over financial reporting and to enhance our disclosure controls and procedures.
• We may incur substantial costs in connection with these remediation activities, including consulting fees, audit and professional service fees, and upgrades to our financial reporting systems and controls.
• It may be difficult or costly to obtain director and officer insurance coverage in the future as a result of the Restatement.
• As a result of the Restatement, the investigation and related risks, our current directors’ and officers’ liability insurance (“D&O Insurance”) providers may seek to increase premiums significantly, impose additional exclusions, or refuse to renew coverage altogether.
• In addition, we may face challenges in obtaining comparable coverage from alternative insurance carriers on commercially reasonable terms, or at all.
• A reduction in the scope or amount of D&O Insurance coverage could adversely affect our ability to attract and retain qualified directors and officers, and expose us to greater potential liability, which could have a material adverse effect on our financial condition, governance, and ability to operate our business.
• We have not been in compliance with SEC reporting requirements and NYSE continued listing rules.
• If we are unable to return to or remain in compliance with SEC reporting requirements and NYSE continued listing rules, there may be a material adverse effect on the Company and our stockholders.
• Due to the delays in filing our periodic reports with the SEC, as a result of the investigation and the Restatement, we failed to timely file our Annual report on Form 10-K for the fiscal year ended May 3, 2025, and our Quarterly Report on Form 10-Q for the fiscal quarter ended August 2, 2025.
• As a result, we have not been in compliance with the reporting requirements of the Exchange Act, and have received notice of noncompliance from the NYSE regarding our failure to comply with the NYSE continued listing requirements.
• Although we are actively working to regain compliance through the filing of our restated financial statements and other delayed reports, there is no assurance that we will timely regain and maintain compliance.
• If we are unable to maintain our listing on the NYSE, it could materially adversely affect the liquidity and trading price of our Common Stock, reduce our access to the capital markets, and impair our ability to attract and retain employees, customers, and suppliers.
• Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital, may impact our ability to obtain alternative financing, and could have negative consequences under the terms of our existing credit agreements.
• Our failure to timely file our periodic reports with the SEC restricts our ability to use a registration statement on Form S-3, which limits our ability to access the public markets quickly and efficiently.
• It may also restrict our ability to raise capital through traditional private placements, as potential investors may be reluctant to invest in a company that is not current or has a history of not being current in its SEC filings.
• In addition, our failure to file periodic reports could constitute a default under certain covenants in existing or future credit facilities, which could lead to the acceleration of outstanding indebtedness or other adverse consequences.
• Risks Relating to our Common Stock and the Securities Market Three of our stockholders collectively own close to a majority of the Company’s outstanding shares, and their interests could differ from the interests of our other stockholders.
• As of May 3, 2025, Immersion Corporation (“Immersion”), VitalSource, and Fanatics, respectively, own 32.9%, 9.5% and 4.9%, of the Company’s outstanding shares of Common Stock.
• Based on the foregoing, Immersion, VitalSource and Fanatics have considerable influence or effective control regarding the outcome of any transaction or action that requires stockholder approval, including the election of our Board of Directors, mergers, acquisitions, amendments to our charter and various corporate governance actions.
• Our Board of Directors is composed of seven members, four of whom are members of the Board of Directors of Immersion Corporation, two of whom are also executives of Immersion Corporation.

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