What changed in this filing

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Item 1A. Risk Factors

2026-07-09 compared with 2025-12-23 · 51 added, 53 removed, 420 unchanged (20% of the section changed)

25 unchanged sentences

We operate within a competitive and rapidly changing business environment, in general, and each of our lines of business faces competition for the products and services they offer.

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.

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.

Our online/virtual course material store operations also face competition from providers including eCampus, Akademos, and Ambassador Educational Solutions.

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These programs, if successful, will result in a substantial decrease in the supply of those titles from the used textbook inventory supply, which impacts our wholesale business.

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).

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.

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Many of our products are sourced and manufactured abroad.

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.

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.

The Trump administration has since reduced or temporarily paused some of the tariffs and has reached agreement on tariffs with certain countries.

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These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted.

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 .

We plan to continue to scale the number of schools adopting First Day Complete .

We cannot guarantee that we will be able to achieve these plans within these timeframes or at all.

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CPRA amends and adds to CCPA by strengthening rights of California consumers, further restricting business use of consumer personal information, and establishing a new government agency for enforcement.

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.

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.

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7 unchanged sentences

Recent actual and proposed federal policy changes and enforcement practices could negatively impact college students, and our client educational institutions.

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.

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.

Should any of these actions and policies move forward they, or even the threat of these actions, could negatively impact student enrollment at U.S.

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• Restrictions on issuances of student visas, and deportation of foreign 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 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.

There have also been proposals to expand the scope of bans on visa issuances.

In addition, an executive order was recently issued that bans travelers from 19 countries from entering the U.S.

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.

Changes in U.S.

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While management believes that the financial statements included elsewhere in this Form 10-K reflect management’s best current estimate of any potential additional sales tax liability based on current discussions with taxing authorities, we cannot assure you that the outcome of any discussions with any taxing authority will not result in the payment of sales taxes for prior periods or otherwise, or that the amount of any such payments will not be materially in excess of any liability currently recorded.

In the future, our businesses may be subject to claims for not collecting sales tax on the products and services we currently sell for

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which sales tax is not collected.

future, our businesses may be subject to claims for not collecting sales tax on the products and services we currently sell for which sales tax is not collected.

In addition, our provision for income taxes and our obligation to pay income tax is based on existing federal, state and local tax laws.

Changes to these laws, in particular as they relate to depreciation, amortization and cost of goods sold, could have a significant impact on our income tax provision, our projected cash tax liability, or both.

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 Relating to Intellectual Property

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The protection of our intellectual property may require the expenditure of significant financial and managerial resources.

Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights.

Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or

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misappropriating our proprietary rights.

We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights.

5 unchanged sentences

We may be subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business.

If we were found to have infringed the

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intellectual property rights of a third party, we could be liable to that party for license fees, royalty payments, lost profits or other damages, and the owner of the intellectual property might be able to obtain injunctive relief to prevent us from using the technology or software in the future.

If we were found to have infringed the intellectual property rights of a third party, we could be liable to that party for license fees, royalty payments, lost profits or other damages, and the owner of the intellectual property might be able to obtain injunctive relief to prevent us from using the technology or software in the future.

If the amounts of these payments were significant or we were prevented from incorporating certain technology or software into our products, our business could be significantly harmed.

19 unchanged sentences

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.

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.

We are required to evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on a periodic basis and publicly disclose the results of these evaluations and related matters in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

As described in Part II - Item 9A.

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.

If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that we will be unable to timely file future periodic reports with the SEC and that our future consolidated financial statements could contain errors that will be undetected.

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

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described in Risks Related to our Business and Industry, “We are dependent upon access to the capital markets, bank credit facilities and short-term vendor financing for liquidity needs.” In addition, we could be subject to regulatory investigations and penalties or stockholder litigation.

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.

If we are unable to report our results in a timely and accurate manner, our stock may be delisted from the New York Stock Exchange (the “NYSE”) and we will not be able to comply with the applicable covenants in our financing arrangements, including our credit agreement, as described in Risks Related to our Business and Industry, “We are dependent upon access to the capital markets, bank credit facilities and short-term vendor financing for liquidity needs.” In addition, we could be subject to regulatory investigations and penalties or stockholder litigation.

Any of these risks could have a material adverse impact on our business and financial condition.

13 unchanged sentences

Matters relating to or arising from the subject of the Investigation, including expenses and diversion of personnel and resources, regulatory investigations, and proceedings and litigation matters, could have an adverse effect on our business, results of operations and financial condition.

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.

To the extent steps we take to remediate deficiencies in our internal controls over financial reporting are not successfully identified and implemented, we may incur significant additional time and expense.

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”).

To the extent

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steps we take to remediate deficiencies in our internal controls over financial reporting are not successfully identified and implemented, we may incur significant additional time and expense.

In addition, we elected to self-report the Investigation to the Securities and Exchange Commission (the “SEC”).

5 unchanged sentences

We may incur additional substantial costs in connection with remediation efforts following the Restatement, which could adversely affect our results of operations.

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 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.

These efforts have required and will continue to require significant management time and financial resources.

We may incur substantial costs in connection with these remediation activities,

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including consulting fees, audit and professional service fees, and upgrades to our financial reporting systems and controls.

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.

These additional expenses could materially adversely affect our results of operations and financial condition.

3 unchanged sentences

These indemnification obligations could significantly increase our legal expenses and could materially adversely affect our financial condition and cash flows.

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.

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.

The combined effect of these factors could materially and adversely affect our liquidity, financial condition, and results of operations.

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.

Immersion has agreed to maintain at least three directors on our Board of Directors that satisfy the independence standard under NYSE rules applicable to audit committee members.

However, Immersion through its stock ownership may have significant influence over the election of all Board members, inclusive of the independent directors.

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.

Immersion has agreed to maintain at least three directors on our Board of Directors that satisfy the independence standard under NYSE rules applicable to audit committee

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Each of Immersion, VitalSource and Fanatics may have interests different than those of other stockholders.

However, Immersion through its stock ownership may have significant influence over the election of all Board members, inclusive of the independent directors.

Each of Immersion and VitalSource may have interests different than those of other stockholders.

For example, they may delay or prevent a change of control of us, even if such a change of control would benefit other stockholders, or pursue strategies that are different from the wishes of other investors.

33 unchanged sentences

These provisions may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of the Company, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their Common Stock at a price above the prevailing market price.

Our Amended and Restated By-laws designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

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Our Amended and Restated By-laws provide that, subject to limited exceptions, the state and federal courts of the State of Delaware are the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-laws or (d) any other action asserting a claim that is governed by the internal affairs doctrine.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors