SKIL 10-K & 10-Q changes, risk factors and insider trading

An investment in our securities involves a high degree of risk. You should carefully consider the following risk factors, together with all of the other information included in this Annual Report, including matters addressed in the section entitled “Cautionary Notes Regarding Forward-Looking Statements,” before making an investment decision. The occurrence of one or more of the events or circumstances described in these risk factors and elsewhere in this Annual Report or subsequent filings that we make with the SEC, alone or in combination with other events or circumstances, may have a material and adverse effect on our business, cash flows, financial condition, and results of operations. You should also carefully consider the following risk factors in addition to the other information included in this Annual Report, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements". We may face additional risks and uncertainties that are not presently known to us or that we currently deem immaterial, which may also impair our business, cash flows, financial condition, and results of operations. Therefore, the risk factors below should not be considered a complete list of potential risks that we may face. Note that the risk factors below reflect our beliefs and opinions as to factors that could materially and adversely affect Skillsoft and its securities in the future; references to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

Our future success will depend in large part on the growth, if any, in the demand for online learning solutions. It is difficult to predict learner or partner demand for our platform, learner or partner adoption and renewal, the rate at which existing learners and partners expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive offerings into the market, or the success of existing competitive offerings. It may take customers a substantial amount of time and resources to fully transition to an online platform or companies may face delays in doing so due to budget constraints, weakening economic conditions, or other factors. We cannot assure you that adoption of our platform will also increase if and as market demand increases. If the market for online learning solutions does not grow as we expect or our platform does not achieve widespread adoption, it could result in reduced customer spending, learner and partner attrition, and decreased revenue, any of which would adversely affect our business and results of operations.

The market for corporate learning and talent development solutions is highly fragmented, rapidly evolving, and competitive. In addition to increased competition from new companies entering the market, established companies are enteringexpanding their presence in the market through acquisitions of smaller companies, which directly compete with us, and this trend is expected to continue. We may also face competition from publishing companies, educational institutions, vendors of enterprise application software, and human resource outsourcers, including those vendors with whom we have formed development and marketing alliances. Our primary sources of direct competition are:

Growing competition mayhas resultresulted in unit price reductions,reductions and may lead to reduced revenue and gross profits, and loss of market share, any one of which would have a material adverse effect on our business. Current and potential competitors have and may have substantially greater financial, technical, sales, marketing, and other resources, as well as greater name recognition, and we may face increasing price pressures from competitors as buyers demand more value for their learning and talent development budgets. Accordingly, we may be unable to provide digital learning and talent development solutions that compare favorably with new technology-led techniques, other interactive training software or human capital management platforms, or new learning solutions. Our future success will depend upon the extent to which we are able to develop and implement products which address emerging market requirements on a cost effective and timely basis. Product development is risky because it is difficult to foresee developments in technology, coordinate technical personnel, and identify and eliminate design flaws. Any significant delay in releasing new products could have a material adverse effect on the ultimate success of our products and could reduce sales of predecessor products.

Emerging technologies also impact the competitive landscape for learning and talent development solutions. New content development methodologies and/or features and functionality, including AI and machine learning, that enhance the learner experience could adversely impact our ability to compete in the market. Large language model programs such as OpenAI’s ChatGPT have the potential to decreasedecreased the cost of producing content significantly and may decrease the willingness of buyers to purchase learning solutions altogether. New market entrants that provide technologies that improve the content delivery and/or management of learning solutions could also increase the level of competition in the market. In addition, even if companies implement technology-based learning solutions, they may still choose to design, develop, deliver, or manage all or part of their learning and development programs internally. If the shift to technology-based learning is not realized, or if companies do not use the products and services of third parties to develop, deliver, or manage their learning and development needs, then some of our products and services may not achieve commercial success.

Lower priced solutions from competitors and access to free content willhave put pricing pressure on our solutions, and our ability to compete and maintain pricing will be dependent onupon our ability to differentiate our learning content and the learner experience our platform delivers.

We have a history of losses, and we may not be able to generate sufficient revenue to achieve or if achieved, maintain profitability in the future.

We incurred net losses of $121.9$139.8 million and $349.3$121.9 million during fiscal 20252026 and fiscal 2024,2025, respectively, and we had an accumulated deficit of $1.4$1.6 billion as of January 31, 2025.2026. Our losses may continue as we make significant investments toward growing our business. We have invested, and expect to continue to invest, substantial financial and other resources in developing our platform, including expanding our platform offerings, developing or acquiring new platform features and services, integrating AI in our product offerings, expanding into new markets and geographies, and increasing our sales and marketing efforts. These expenditures will make achieving and maintaining profitability, if achieved, more difficult, and these efforts may also be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving oror, if achieved, maintaining profitability or positive operating cash flowflows on a consistent basis. As a result, we can provide no assurance as to whether or when we will achieve profitability. If we are not able to achieveachieve, and if achieved maintain profitability, the value of our business and our Class A common stock ("“common stock"”) could decline significantly, and investors could lose some or all of their investment.

OurWhile we have maintained business continuity despite recent management changes, our success is largely dependent on the personal efforts and abilities of our senior management. Failure to retain these executives, or the loss of certain additional senior management personnel or other key employees and the associated loss of institutional knowledge and expertise, could have a material adverse effect on our business and future prospects.prospects, may adversely impact our ability to manage Skillsoft efficiently and effectively, could be disruptive and distracting to remaining management and may lead to additional departures of existing personnel, any of which could have a material adverse effect on our business, operating results, financial results and/or internal control over financial reporting.

We arehave buildingand continue to build AI into many of our products and service offerings. AI presents new risks and challenges that could affect its use or application, and therefore our business. The challenges presented by AI include, but are not limited to, the following:

Weakness in the United States, the European Union and/or the worldwide economy has had and could continue to have a negative effect on demand for our products and our results of operations. For example, certain of our key markets, including the United States, have experienced, and may continue to experience, historically high rates of inflation and our operating costs have increased and may continue to increase. We sell our products to business organizations and consumers whose decisions fluctuate based on general economic and business conditions. The revenue growth and potential profitability of our business dependsdepend on demand for digital learning content and enterprise human capital management application software generally and for learning and talent development solutions in particular. Companies may not view training products and services as critical to the success of their businesses. If companies experience declines in their business or anticipate that they will experience such declines, whether as a result of adverse economic conditions, competitive issues or other factors, they may decrease or forgo employee education and training expenditures to lower their expenses and may do so before limiting their other expenditures. In addition, during economic or financial downturns, companies may slow the rate at which they pay us or may become unable to pay their debts as they become due, which would have a negative effect on our results of operations and financial condition.

In addition, a portion of our customer contract value is attributable to the number of users of our products at each of our customers, which in turn is influenced by the employment and hiring patterns of our customers and potential customers globally. To the extent that economic uncertainty or weak economic or financial conditions cause our customers and potential customers to freeze or reduce their headcount, demand for our products and services may be negatively affected. Additionally, economic downturns have historically resulted in overall reductions in spending on information technology and learning and talent development solutions as well as pressure from customers and potential customers for extended billing terms. If economic, political, or market conditions deteriorate,deteriorate further, including as a result of actions taken by governmental entities, or if there is uncertainty around these conditions, our customers and potential customers may elect to decrease their information technology and people development budgets by deferring or reconsidering product purchases, which would limit our ability to grow our business and negatively affect our operating results.

An important part of our growth strategy is the continued development and enhancement of our existing offerings and the introduction of new learning content and the delivery of enhanced platform features and functionality, which includes the integration of AI in our products and services. These activities can open new revenue streams, ensure the currency of our content portfolio, and support customer renewals and upgrades. Despite our efforts, we cannot assure you that we will be successful in updating and enhancing our current learning assets, developing and introducing new learning content, or delivering enhanced or new platform features and functionality, or that what we develop or introduce will be met with commercial acceptance. The failure to successfully introduce new, and enhance existing, learning content and platform functionality will not only hamper our growth prospects, but may also adversely impact our net income due to the development and marketing expenses associated with those offerings. Further, even if we are successful in introducing new learning content and platform functionality, our new offerings could cannibalize the market share of our existing offerings, resulting in lower growth than anticipated. There can be no assurance that sales cannibalization will not occur or become more significant in the future asto the extent we increase our presence in existing markets.

We may be unable to realize intended efficiencies and benefits from our comprehensive resource reallocation plan (“CRRP”) and go-to-market strategy, which may adversely affect our profitability, financial condition or our business.

To operate more efficiently, we have undertaken athe comprehensive resource reallocation plan,CRRP, which includes reducing and realigning our cost structure, investing into areas of our business that we believe represent opportunities for significant growth, redesigning our go-to-market strategy and strengthening the focus on our core business. If we do not successfully manage our comprehensive resource reallocation planCRRP and go-to-market strategy, our expected efficiencies and benefits might be delayed or not realized. The implementation of our comprehensive resource reallocation planCRRP may also be disruptive to our operations, result in higher than anticipated restructuring charges, and otherwise adversely affect our results of operations and financial condition. Additional risks associated with the continuing impact of our comprehensive resource reallocation planCRRP include employee attrition, the inability to hire new employees in the future, diversion of management attention, and adverse effects on employee morale. In addition, we may incur additional impairment charges (in addition to those incurred during fiscal 2026) related to goodwill or other intangible assets, which may be material and may exceed our current estimates. Furthermore, our ability to complete our comprehensive resource reallocation planCRRP and go-to-market strategy and achieve anticipated benefits within the expected time frame, or at all, is subject to management’s estimates and assumptions and may vary materially from our expectations, including as a result of factors that are beyond our control. Moreover, we could make changes to, or experience delays in executing our plans, which could cause further disruption and additional unanticipated expense, and our business may not be more efficient or effective than prior to their implementation.

Our ILT offering relies on third parties to provide us with learning content and subject matter expertise and requires us to have content production relationships with third parties for our courses and learning content, and our relationships with these third parties may be terminated or fail to meet our requirements.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act ("“SOX"”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting. Our internal control over financial reporting will not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no system of internal controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. Our management has identified and remediated a matter that constituted a material weakness in our internal controls over financial reporting in the past. We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent or avoid potential future material weaknesses. Our current controls and any new controls that we develop may become inadequate for a variety of reasons, including changes in conditions in our business. Further, additional weaknesses in our disclosure controls and/or internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our annual or interim financial statements. This could also subject us to litigation or investigations requiring management resources and payment of legal and other expenses and negatively impact the price of our common stock.

Our independent registered public accounting firm is currently required to attest to the effectiveness of our internal control over financial reporting each year. Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Ineffective disclosure controls and procedures and/or internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.New York Stock Exchange (“NYSE”). Also see “We are currently out of compliance with the NYSE minimum market capitalization requirement and are at risk of the NYSE delisting our common stock; such a delisting could reduce the liquidity and market price of our common stock, limit investors’ ability to make transactions in our securities, subject us to additional trading restrictions, and/or negatively impact our ability to raise equity financing.”

Our platform and the other systems or networks used in our business are also at risk for breaches as a result of third-party action, or employee, vendor, or contractor error or malfeasance, including as a result of intentional or accidental misuse of authorized access to our systems. Additionally, we and many other companies with whom we interact increasingly rely on automated systems and processes, which createscreate and heightensheighten certain security threats. Security is one of the learning curricula we provide on our platform, which may cause our platform to be a target for hackers and others, and which may cause our brand, credibility, and reputation to be particularly sensitive to any security breaches. We have incurred and expect to continue to incur significant expenses to prevent security breaches, including deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants. However, since the techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not identified until after they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period and, therefore, have a greater impact on our platform, the proprietary and other confidential data contained therein or otherwise stored or processed in our operations, and ultimately on our business.

While we maintain insurance to cover operational risks, such as cyber risk and technology outages, our insurance may not be sufficient to cover all liability from cybersecurity incidents. These risks will likely increase as we expand our hosted offerings, integrate our products, services and solutions and store and process more data. Moreover, delayed sales, lower margins or lost customers resulting from disruptions caused by cyberattacks, overly burdensome preventativepreventive security measures or failure to fully meet information security control certification requirements could materially and adversely affect our financial results, stock price and reputation.

Our market share for instructor-led, synchronous, learning mayis expected to continue to decline.

During our last three fiscal 2025 and fiscal 2024,years, our GK segment, which accounted for 21.2%, 23.6% and 26.8% of our revenues in fiscal 2026, fiscal 2025, and fiscal 2024, respectively, experienced a decline in bookings and revenue.revenue from the applicable immediately preceding fiscal year. The future success of our ILT platform will depend on our ability to offer clients the learning solutions they need in the format they desire and trust. It remains unclear what evolving customer preferences will be on the in-classroom learning market and other instructor-led training, including synchronous remote learning. In connection therewith, we are exploring strategic alternatives with respect to our GK business. See “Our exploration of strategic alternatives with respect to our GK business may not be successful and may disrupt our ongoing business, result in increased expenses and present certain other risks” below.

Our GK businesssegment derives a large portion of its revenue in any financial reporting period from delivering corporate training as an authorized training provider for certain technology companies, and has a concentrated portfolio of relationships with these technology companies. Our status as an authorized training partner for certain key technology companies provides certain benefits, including, among others, the ability to use official curricula created by key technology vendors, to receive subsidies and other financial incentives provided by these technology vendors to support training on their products, representation on official training websites operated by the technology vendors, and the ability to issue certified training certificates from the technology vendors. Our operating results depend to a significant degree on our ability to maintain our status as an authorized training partner with such key technology vendors, and an inability to retain such status, or a significant change in our relationship with one or more of our technology vendors, could significantly reduce our revenue.

We expect that international operations will continue to account for a large portion of our revenue (35.6% in fiscal 2026) and are subject to inherent risks, including:

Additionally, our business and financial conditions have been, and may continue to be, impactedaffected by worldwide macroeconomic and geopolitical conditions outside of our control, such as inflation, recessionary pressures, interest rate and exchange rate fluctuations, and volatility in global financial markets, including instability in the banking sector. If we are not able to effectively prepare for and respond to changes in such conditions, our business, results of operations and financial condition could be materially adversely impacted.

Companies are facing increasing scrutiny from customers, partners, regulators, and investors related to their sustainability and social impact practices and disclosure. Additionally, public interest and legislative pressure related to public companies’ practices continues to grow along with various changing rules and regulations related to these types of matters from governmental and self-regulatory organizations. Conversely, anti-sustainability and anti-social impact sentiment has gained significant momentum in the United States, with recent executive orders from the newcurrent U.S. Administration and actions by the federal and certain state governments targeting various aspects of corporate practices and disclosure. If our practices fail to meet regulatory requirements or investorinvestors’ or other industry stakeholders’ evolving expectations as they relate to the environment, health and safety, human capital management, human rights, product quality, supply chain management, corporate governance and/or transparency, our reputation and employee retention may be negatively impacted, and customers may reduce or be unwilling to do business with us. It is also possible that stakeholders may not be satisfied with our reporting or practices on these topics. As attitudes toward these matters and our approach to these issues evolves,evolve, we cannot guarantee that our approach will align with the expectations or preferences of any particular stakeholders. If we are unable to successfully manage divergent sustainability and social impact expectations, we could see a deterioration of stakeholder trust and we may be subjected to scrutiny by the government, the media, or various stakeholders in a manner that may adversely impact our reputation, result in the loss of customers or potential customers, lead to government investigations and the potential for fines or other adverse regulatory action, or otherwise adversely affect our business.

AcquisitionsAcquisition or disposition of businesses or technologies may not produce the benefits we anticipate and could harm our current operations.

We may seek to identify and acquire businesses or technologies that will contribute to our future growth or dispose or shut down business or technologies that we believe do not contribute to our future growth. We may not, however, be successful in identifying or consummating attractive acquisitionsuch opportunities. Moreover, any acquisitions or dispositions we do consummate may not produce benefits commensurate with the purchase price we pay or receive or our expectations for the acquisition.transaction. Acquisitions and dispositions involve numerous risks, including:

Goodwill and indefinite-lived intangibleintangibles recorded in connection with our acquisitions ishave been, and may in the future be, subject to impairment, which could reduce our earnings.

We review our goodwill and indefinite-lived intangible assets for impairment at least annually and when events or changes in circumstances indicate that the carrying value may not be recoverable.

During the fourth quarter of fiscal 2024, we identified triggering events for impairment primarily attributable to the impact of the observed prolonged and substantial decline in the Company’sSkillsoft’s stock price and market capitalization, competitive market analysis and observable industry multiples, which increased our discount rate assumption. In addition, the estimated future cash flows for our two reporting segments declined. As a result, the CompanySkillsoft recorded aggregate impairment losses of $202.2 million associated with its goodwill and intangible assets. AsDuring the third quarter of Januaryfiscal 31,2026, 2025,we identified triggering events requiring the Companytesting has $317.1 million of goodwill and $427.2 million of intangible assets on its balance sheet. Should we experience business challenges or significant negative industry or general economic trends, we may be required to recognize additional impairments to our goodwill and indefinite-lived intangible assets. Anyfor impairment of our GK reporting unit, primarily attributable to the impact of industry macroeconomic uncertainty, the industry shift to integrated learning experience, as well as a continued decline in public sector business that contributed to lower enrollment. As a result of the foregoing, management recorded a $20.8 million goodwill impairment for the GK reporting unit for the three months ended October 31, 2025. During the fourth quarter of fiscal 2025, we identified triggering events for impairment primarily attributable to the impact of the observed prolonged and significant decline in Skillsoft’s stock price and market capitalization, which increased our discount rate assumption. Additionally, but to a lesser extent, during the fourth quarter of fiscal 2026, our estimated revenue for the TDS reporting segment declined, particularly within our consumer business. As a result, Skillsoft recorded an impairment loss of $10.9 million associated with its indefinite-lived trademark intangible. Changes in key assumptions could materially affect the estimated fair value of goodwill orthe indefinite-lived trademark intangible assetsasset willand result in afuture chargeimpairment against earnings, which could have a material adverse impact on our reported results of operations and financial condition.charges.

Our operations are subject to interruption by natural disasters, flooding, fire, power shortages, public health emergencies, terrorism, political unrest, cyber-attacks, geopolitical instability, war, the effects of climate change and other events beyond our control. A significant natural disaster, such as a drought, wildfire, severe storm, hurricane, fire or flood, occurring at one of our facilities or where a partner or service provider is located could adversely affect our business, results of operations and financial condition. Climate change could result in an increase in the frequency or severity of natural disasters. Further, if a natural disaster or man-made problem were to affect our service providers, this could adversely affect the ability of our customers to use our products and platform. Natural disasters, public health emergencies, and geopolitical events, such as the war in Ukraine, the on-going conflicts in the Middle East or other parts of the world, could cause disruptions in our businesses, national economies or the world economy as a whole, and may also negatively affect the financial resources available to learners or the operating budgets of our partners or customers, any of which could in turn negatively impactaffect our business and operating results.

Significant changes to the size, structure, powers and operations of the federal, state, and local governmentgovernments may cause economic disruptions that could, in turn, adversely impact our business, results of operations and financial condition.

The newcurrent U.S. Administration hashas, and continuescontinues, to implement significant changes related to the size and scope of the federal government and has and continues to reform its operations to achieve stated goals that include reducing the federal budget deficit and national debt,budget, improving the efficiency of government operations, and promoting innovation and economic growth. These changes, if implemented and/or maintained, may also have adverse effects on state and local governments that rely on federal funding as well as the economy as a whole, that are difficult to predict.

In addition, U.S. President Trump has recently issued various executive orders which may have an impact on the Company’sSkillsoft’s operations and financial condition. Certain of these executive orders require federal agencies to terminate any policies, programs, mandates, guidance, regulations, and other actions and orders involving diversity, equity, gender ideology, inclusion and accessibility practices based preferences, and to enforce federal civil rights laws to combat such preferences, mandates, policies, programs and activities of entities operating in the private sector including, but not limited to, entities that contract with the U.S federal government. See “Increasing scrutiny, complex regulations, and evolving expectations from customers, partners, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us, expose us to new or additional risks, or harm our reputation.” While the enforceability of the executive orders and the steps that various federal agencies may take in response to them areremain uncertain at this time,uncertain, these actions signal a material shift in federal policy that can be expected to have significant implications for the federal, state and local governments as well as the private sector. In addition, the CompanySkillsoft maintains significant relationships with various governmental entities and agencies, and with private sector entities that maintain such relationships of their own, and any of these relationships may be adversely impacted by this shift in federal policy. Furthermore, as a U.S. government contractor we may be subject to the recent executive orders and related regulatory changes which may adversely affect various aspects of our operations. In addition, if we fail or are otherwise unable to comply with the new requirements, doing so could expose us to administrative, civil, or criminal liabilities, including fines, penalties, repayments or suspension or debarment from eligibility for future U.S. government contracts. Moreover, we may be required to incur significant costs responding to any such activity and our relationships and reputation with existing and prospective customers and third parties with which we do business could be affected as well. This, in turn, could have an adverse effect on our ability to attract and retain customers and employees and could have a negative impact on the market price for our securities. Certain of our customers, suppliers, or other stakeholders are also subject to such expectations and risks, which may result in additional or augmented risks to us.

We use AI in our product and service offerings and throughout our business generally. As theThe regulatory frameworkenvironment for machine learning technology and AI evolves,is rapidly evolving in the United States and internationally, and may adversely affect our business, financial condition, and results of operations may be adversely affected. The regulatory framework for AI, machine learning technology, and automated decision making is evolving.business. It is possible that new laws and regulations will be adopted throughout the United States and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our learning platforms and the way in which we use AI and machine learning technology. Existing and proposed laws, and emerging U.S. federal and state requirements, may impose significant compliance obligations relating to transparency, risk management, bias testing, human oversight, and data usage. Various U.S. states, including California and Colorado, have also recently adopted laws and regulations applicable to the development and use of AI systems and outputs, and U.S. federal AI legislation has also been introduced in the U.S. Senate. Additionally, the European Commission adopted the Artificial Intelligence Act (“AI Act”), which is expected to take full effect in 2026.August 2026, although adjustments are currently under consideration. The AI ActAct, in its current form, would introduce significant compliance obligations and regulatory fines for breaches on all operators of AI systems and may potentially classify certain uses of AI systems in an educational context as high risk. Actual or alleged failures to comply with the current AI Act may result in penalties of up to 35 million euros or up to 7% of an operator'soperator’s total worldwide annual turnover, whichever is greater. The full extent and applicability of these requirements to our business will not be certain until the proposaladjustments becomesare effective. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.finalized.

The U.S. federal government and various state governments have adopted or proposed laws and regulations governing the collection, use, storage, sharing and processing of personal data. Several foreign jurisdictions, including but not limited to the European Union (“EU”) and its member states, the UK,United Kingdom (“UK”), South Korea, Japan, Singapore, Australia, and India, have adopted legislation (including directives or regulations) that increase or change the requirements governing the collection, use, disclosure, and other processing of personal data of individuals in these jurisdictions. In some cases, these laws impose obligations not only on many of our customers, but also directly on us. These laws and regulations are complex, and their scope and number are expanding, with new laws and regulations proposed frequently. Some of the existing laws and regulations also are frequently updated, at times due to differing economic conditions and changes in political climate, and they are subject to different and sometimes conflicting interpretations. Monitoring and abiding by these laws and regulations entailsentail costs that may be unpredictable, risks of penalties and reputational damage in the event of noncompliance, and may increase the cost and operational complexity of selling and delivering our solutions.

Moreover, although the GDPR allows companies, subject to strict data protection requirements, to transfer personal data outside of the European Economic Area (“EEA”), the sufficiency of those requirements hasis facedsubject to ongoing legal challenges by privacy advocates in the EU, with a new challenge recently threatened.EU. These challenges seek to invalidate the mechanisms on which we rely to transfer personal data from the EEA. Loss of our ability to lawfully transfer personal data out of the EEA to any other jurisdictions may cause reluctance or refusal by current or prospective European customers to use our products. Additionally, countries outside of the EEA have passed or are considering passing laws requiring local data residency (retaining personal data within those countries), which could increase the cost and complexity of delivering our services.

In addition, many U.S. states have passed privacy laws giving residents rights similar to the individual rights given under the GDPR, including the right to access and delete their personal information, to opt-out of certain personal information sharing, and to receive detailed information about how their personal information is used and disclosed. These state laws have various enforcement mechanisms, including in some cases private rights of action as well as government agency enforcement authorities. Claims against us under these laws and their implementingimplementation of regulations could expose us to significant fines and judgments, as well as reputational harm. The number of states with such laws has rapidly increased over the past fiveseveral years and is anticipated to continue to increase. The U.S. Congress, while slower to act in recent years,Congress also may pass comparable legislation, with potentially greater penalties, and more rigorous compliance requirements relevant to our business.

Any of these matters could materially adversely affect our business, financial condition, operational results, or operationalcash results.flows.

Our success depends to a degree upon the protection of our rights in intellectual property. We rely upon a combination of patent applications, trade secret, copyright, and trademark laws to protect our proprietary rights. We have also entered into, and will continue to enter into, confidentiality agreements with our employees, consultants and third parties to seek to limit and protect the distribution of confidential information. However, we may not have signed protective agreements in every case.

Significant TransactionsTransaction

On August 15, 2022, we completed the sale of our SumTotal business to a third party. Net proceeds from the sale were $174.9 million, after final working capital adjustments in April 2023. The disposal of SumTotal assets met the criteria to be reported as held for sale and discontinued operations. AsThe aApril result,2023 SumTotal’sfinal resultsworking capital adjustments are included in the captions “gain (loss) on sale of business” on the consolidated statements of operations are presented, net of tax, separate from the results of continuing operations and “Sale of SumTotal, net of cash transferred” within investing activities on the consolidated statements of cash flows for allfiscal periods presented.2024.

Refer toSee Note 2019 "“Segment Information"” ofto our Consolidated Financial Statements for information regarding our segments, including reconcilinga reconciliation of segment (“business unit”) contribution profit orto net income (loss) for the periods presented toin the consolidated statements of operations. Segment ("“business unit"”) contribution profit and segment (“business unit”) contribution margin are internalthe measures used by our Chief Operating Decision Maker (i.e.,“CODM”), who is our Chief Executive Officer)Officer, to evaluateallocate resources and to assess the resultsperformance of our segments. We disclose these non-GAAP segment results because we believe they provide meaningful supplemental information. Business unit contribution profit is defineddetermined asby subtracting the following from segment revenue: business unit revenue, less business unit costcosts of revenue,revenues, business unit content and software development expenses, and with respect to our TDS segment, business unit product research and management expenses. We have excluded the following items in our determination of businessBusiness unit costcosts of revenues, business unit content and software development expenses, and business unit product research and management expenses are defined as the costs of revenues, content and software development expenses, and product research and management expenses attributable to each segment, respectively (allocated as described in Note 19 “Segment Information”), but excluding in each case the following items, as our Chief Executive OfficerCODM does not includeconsider them in the measurement of thesegment performance of the segment:

TheBusiness keyunit performancecontribution metricmargin usedis todefined assessas the segment results is business unit contribution margin,profit whichof isa defined as business unit contribution profit,segment divided by businessthat unitsegment’s revenue for the same period.revenue.

Software as a service ("“SaaS"”) Subscription Revenue. Represents revenue generated from contracts specifying a minimum fixed fee for services delivered over the life of the contract. The initial term of enterprise contracts is generally one to three years and is usually non-cancellable for the term of the subscription. The fixed fee is commonly paid upfront on an annual basis. These contracts typically consist of subscriptions to our various offerings which provide access to our SaaS platforms, associated content and services, and individualized coaching, over the contract term.

Non-Subscription Revenue. Primarily comprised of instructor-led training offerings,offerings in our GK segment, which consist of both in-person and virtual environments. Instructor-led training, including virtual offerings, areis first scheduled, then delivered later, with revenue realized on the delivery date. Non-subscription revenues also include professional services in our TDS segment related to implementation of our products and subsequent, ongoing consulting engagements. Our non-subscription services complement our subscription business in creating strong and comprehensive customer relationships.

The following is a summary of our net revenues by productsegment and service type for the periods indicated (in thousands, except percentages):

TotalRevenues for the GK segment declined when comparing fiscal 2025 to fiscal 2024 while TDS revenues remained relatively flat,flat. when comparing fiscal 2024 to fiscal 2023. AThe decline in revenues in our GK segment was primarily due to weaker market demand, particularly in Europe, as well as a higher mix of reseller business, which is recorded in revenue net of fees. The decrease was partially offset by both organic growth in our TDS segment due to higher bookings in the prior two years, as revenue from our subscription offerings is typically recognized over the twelve months that follow a booking, and the inclusion of Codecademy’s revenues earned subsequent to its acquisition on April 4, 2022.

CostCosts of revenues consists primarily of employee salaries and benefits for hosting operations, professional service and customer support personnel; royalties; hosting and software maintenance services; facilities and utilities costs; consulting services; and instructor fees, course materials, logistics costs and overhead costs associated with virtual, in-classroom, and on-demand training solutions. The following provides details regarding the changes in components of costcosts of revenues (in thousands, except percentages):

CostCosts of revenues is a variable expenseand thatgenerally iscorrelates primarily driven bywith revenue volume and the compositionmix of productproducts and serviceservices, typesas different offerings carry different margin profiles. Despite lower overall revenue, however, when theycomparing havefiscal different2026 margins.to Thefiscal decreases in2025, courseware, instructor fees and outside servicesservices, andas well as compensation and benefits, whendid comparingnot fiscaldecline 2025proportionately. toThis fiscal 2024, werewas primarily attributabledue to the declinerevenue inmix of our GK segmentbusiness, revenueswhich asreflects discussedlower-margin offerings, and to a lesser extent, increases in Subscriptionthird-party costs within our TDS business. Hosting and Non-Subscriptionsoftware Revenuemaintenance above.increased Theyear-over-year, decreaseprimarily reflecting continued investments in facilitiestechnology. Facilities and utilities expenses,expenses decreased, when comparing fiscalthese 2025same to fiscal 2024, wasperiods, primarily attributabledue to cost savings resulting from the consolidation of our facilities.

The costs of revenues rose in fiscal 2024 compared to fiscal 2023 due to Codecademy’s added expenses after its acquisition on April 4, 2022. The decreasedecreases in courseware, instructor fees and outside services and compensation and benefits, when comparing thesefiscal same periods was partially offset by rising third-party costs and product mix in our GK segment. Refer2025 to Subscriptionfiscal and2024, Non-Subscriptionwere Revenueprimarily above for information relatedattributable to: 1) the organic growth in our TDS segment, which contributed to the increase in hosting and software maintenance; and 2) the decline in our GK segment.segment revenues as discussed in Subscription and Non-Subscription Revenue above. The decrease in facilities and utilities expenses, when comparing fiscal 20242025 to fiscal 2023,2024, was primarily attributable to cost savings from the consolidation of our facilities.

Selling and marketing ("“S&M"”) expenses consist primarily of employee salariescompensation and benefits for selling, marketing and pre-sales support personnel;personnel, commissions;commissions, and travel expenses; advertising and promotional expenses; consulting and outside services; facilities costs; depreciation; and software maintenance costs. The following provides details regarding the changes in components of S&M expenses (in thousands, except percentages):

The decreases in advertising and promotions and consulting and outside services, when comparing fiscal 2025 to fiscal 2024, were primarily attributable to proactive reductions in branding initiatives and paid media spend, partially offset by targeted strategic go-to-market reinvestments. The decrease in compensation and benefits, when comparing fiscal 2025 to fiscal 2024, were primarily attributable to the CRRP discussed above,CRRP, partially offset by an S&M executive's forfeiture of a share-based payment award that lowered stock-compensation expense during fiscal year 2024. The decrease in facilities, utilities and other expenses, when comparing fiscal 2025 to fiscal 2024, was primarily attributable to cost savings from the consolidation of our facilities. These decreases were partially offset by the increase in software maintenance expenses, which was primarily the result of investments in our go-to-market transformation activities and enablement programs.

When comparing fiscal 2025 to fiscal 2024, reductions in consulting and outside services, cost savings from the consolidation of our facilities, and lower insurance, contributed to the overall decline in G&A expenses. In addition, compensation and benefits, when comparing these periods increased due to severance costs for our former Chief Executive Officer, whose employment with the CompanySkillsoft ended on May 9, 2024, and increases in bonuses, partially offset by cost savings resulting from the CRRP discussed above and lower stock-compensation expense due to forfeitures and lower grants of share-based payment awards. Further, the increases in software maintenance,maintenance expenses, when comparing fiscal 2025 to fiscal 2024, primarily reflect investments in technology.

ImpairmentIntangible asset impairment review requirements and assumption uncertainty

The CompanySkillsoft monitors adverse events, conditions or changes in circumstances that would indicate impairment of the definite-lived (amortizable) intangible assets thatof areeach subjectof toour amortization.reporting units. When such events, conditions or changes in circumstances occur, we assess the recoverability of the assets by comparing the undiscounted future cash flows attributable to the intangible assets to their carrying amount. If the undiscounted future cash flows are less than the carrying amount, an impairment charge based on the excess of the carrying amount over the fair value of the assets,assets is recorded. Fair value is estimated using income- and market-based valuation techniques that require significant judgment regarding future cash flows, discount rates, and market participant assumptions. Because these estimates are inherently uncertain, actual results may differ from the assumptions used in the analysis, which could materially affect the determination of fair value in future periods.

The CompanySkillsoft evaluates impairment for indefinite-lived intangible assets, including goodwill, on an annual impairment test date (January 1) or more frequently if there are indicators of impairment. In connection with the goodwill and indefinite-lived intangible assets impairment evaluation, the CompanySkillsoft may first consider qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount. If theSkillsoft Companydetermines failsthat the qualitativefair assessmentvalue of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, or elects to bypass it,this qualitative assessment, a comparison of the carrying value of the reporting unit or indefinite-lived intangible asset to its fair value is completed. If the carrying value exceeds the fair value, an impairment loss equal to the difference (for goodwill, not to exceed the amount of goodwill allocated to the reporting unit) is recorded.

The fair value of our reporting units is determined using a weighted average valuation model ofusing the income approach (discounted cash flow approach) and the market approach. TheThese incomeapproaches approach requiresrequire management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ materially from these assumptions. TheManagement endeavors to use assumptions usedthat are reflective of what a market participant would have used in calculating fair value considering the then current economic conditions. This process was followed duringfor our annual impairment testtests ascompleted of January 1st of the last threeduring fiscal years.2026, 2025, and 2024.

The fair value of our indefinite-lived trademark intangible (our only indefinite-lived intangible asset other than goodwill) is determined using an income approach referred to as the relief-from-royalty method. The relief-from-royalty method requires management to estimate the portion of our earnings attributable to this trademark based on a royalty rate we would have paid for the use of the asset if we did not own it. The determination of fair value involves significant estimates and assumptions, including projected revenue growth rates, the royalty savings rate, and the discount rate applied to future cash flows, which are forward-looking and could be affected by future economic and market conditions. This process was followed during our annual impairment testtests ascompleted of January 1st of the last threeduring fiscal years.2026, 2025, and 2024.

ImpairmentImpairments forduring the fiscal year ended January 31, 20242026

As of OctoberJanuary 31,1, 2022,2026, the estimated undiscounted future cash flows attributable to carrying value of the amortizableTDS intangibles,and GK asset groups were greaterdetermined thanto the carrying values. In addition, the fair values for indefinite-lived intangibles, were alsobe greater than their carrying values.values, Therefore,therefore duringmanagement theconcluded third quarter of fiscal 2023that there was no impairment of identifiablelong-lived intangibles.assets or amortizable intangibles during the fourth quarter of fiscal 2026.

Except asfor the risk factors described below,below (which have been updated from those set forth in Part II, Item 1A. of our Quarterly Report on Form 10-Q for the quarter ended April 30, 2026 to reflect the consummation of the sale of our GK business on July 6, 2026), there have been no material changes to the risk factors previously disclosed in Part I, Item IA1A of our 2026 Form 10-K.

There can be no assurance that the disposition of our GK business will(the be consummated in a timely manner or at all, and that if consummated,"Transaction") will achieve the anticipated benefits.benefits, including the receipt of anticipated consideration.

WhileNotwithstanding consummation of the Transaction is pending,Transaction, we areremain subject to business uncertainties and contractual restrictions that could harm our business relationships, financial condition and results of operations.

DuringDespite the period prior to the closingconsummation of the Transaction, our business isremains exposed to certain inherent risks and contractual restrictions that could harm our business relationships, financial condition, results of operations, and business, including: (i) our ability to continue to develop and protect our brand and reputation; (ii) our ability to successfully develop, launch, maintain, and scale new programs, offerings and features; (iii) potential uncertainty in the market for our products and services,services as a result of our disposition of the GK business, which could lead current and prospective customers to purchase products and services from other providers or delay purchasing from us; and (iv) risks relating to our relationships with employees and business partners. If any of these effectsrisks were to occur, it could adversely impact our business, cash flow, results of operations or financial condition, as well as the market price of our common stock and our perceived value, regardless of whether the Transaction is completed.value.

As a result of the Transaction, our current and prospective employees could experience uncertainty about their future with us, or decide that they do not want to continue their employment followingwith the completion of the Transaction. As a result, key employees may depart.us. Losses of officers or employees could materially harm our business, results of operations and financial condition. Such adverse effects could also be exacerbated by a delay in the completion of the Transaction for any reason, including delays associated with obtaining requisite regulatory approvals. On the other hand, we may experience challenges in hiring and retaining new employees because of uncertainty or other conditions associated with the pendency or terminationcompletion of the Transaction, which could materially harm our business, results of operations and financial condition.

In this Form 10-Q, including the following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “Skillsoft”, “we”, “our” or “us” refers to Skillsoft Corp. and its consolidated subsidiaries. This MD&A should be read in conjunction with: (i) the unaudited condensed consolidated financial statements and the accompanying notes presented in “Part II, – Item 1. “Financial Statements” of this Form 10-Q (the "Interim Financial Statements"), (ii) our consolidated financial statements, notes thereto, and the related MD&A contained in our 2026 Form 10-K; and (iii) the disclosuredisclosures under “Cautionary Notes Regarding Forward-Looking Statements” and “Risk Factors” in this Form 10-Q and in the 2026 Form 10-K. The consolidated financial statements contained in the 2026 10-K are referred to herein as the “2026 AFS”.

InformationSegment regarding our TDS segmentinformation for the periods indicated is set forth below (in thousands, except percentages):

Our Skills Management Platform is delivered primarily through subscription-based agreements that provide enterprise customers with access to our multi-modal learning offerings and related platform capabilities. Customers subscribe to curated learning content across leadership and business, technology, and compliance subject areas, delivered through multiple modalities including digital courses, coaching, bootcamps, practice labs, simulations, and assessments. Subscription arrangements may include varying combinations of content libraries and delivery modalities, reflecting enterprise scope and user needs. Customers may also purchase expanded access to additional platform capabilities, including content creation and skills benchmarking tools. Contracts are typically multi-yearannual agreements and priced based on enterprise scope, number of users, and product configuration.

Software as a service (“SaaS”) Subscription Revenue. Represents revenue generated from contracts specifying a minimum fixed fee for services delivered over the life of the contract to both enterprise and consumer customers. Enterprise revenue is derived from subscription arrangements with organizations that provide access to Skillsoft’s learning and talent development solutions to their employees, members or students. Consumer revenue is derived from subscriptions purchased directly by individual learners for personal and professional development. The initial term of enterprise contracts is generally one to three years and is usually non-cancellable for the term of the subscription. The fixed fee is commonly paid upfront on an annual basis. These contracts typically consist of subscriptions to our various offerings which provide access to our SaaS platforms, associated content and services, and individualized coaching, over the contract term.

Costs of revenues consists primarily of employee salaries and benefits for hosting operations, professional service and customer support personnel; royalties; hosting and software maintenance services; and facilities and utilities costs; consulting services; and instructor fees, course materials, logistics costs and overhead costs associated with virtual, in-classroom, and on-demand training solutions.costs. The following provides details regarding the changes in components of costs of revenues (in thousands, except percentages):

Costs of revenues is variable and generally correlates with revenue volume and the mix of products and services, as different offerings carry different margin profiles. The decrease in compensation and benefits and courseware, instructor feescourseware and outside services, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding periodperiods in 2025, was primarily attributable to lower revenue, partially offset by lower-margin offerings. Hosting and software maintenance increased year-over-year,when comparing the six months ended July 31, 2026 to the corresponding period in 2025, primarily reflecting continued investments in technology and increasing third-party costs.

The decreases in compensation and benefits, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding prior year period,periods, were attributable to lower stock-compensation expense due to forfeitures and lower grants of share-based payment awards. The decreases in consulting and outside services expenses, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding prior year period,periods, are primarily due to cost savings from our restructuring initiatives. Hosting and softwareSoftware maintenance increased year-over-year,when comparing the three and six months ended July 31, 2026 to the corresponding prior year periods, primarily reflecting increasing third-party costs.

The decrease in compensation and benefits,benefits and software maintenance, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding periodperiods in 2025, primarily reflected cost savings from our continued optimization of our go-to-market model and sales coverage strategy. The increasesdecreases in advertising and promotions, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding periodperiods in 2025, were primarily attributable to higherefforts investmentsto inoptimize targetedmarketing demand generationexpenditures and marketingimprove programs.operating efficiency.

Compensation and benefits and consulting and outside services expenses decreased during the threesix months ended AprilJuly 30,31, 2026 compared to the prior year period, primarily due to cost savings resulting from our restructuring initiatives.initiatives, In addition, compensation and benefits decreased due toincluding reduced stock-based compensation expense driven by forfeitures and lower grants. When comparing the three months ended July 31, 2026 to the corresponding period in 2025, consulting and outside services increased primarily reflecting higher spending on third-party professional services supporting efficiency initiatives.

Amortization of intangible assets, when comparing the three and six months ended AprilJuly 30,31, 2026 to the same periodperiods in 2025, decreased primarily due to certain intangible assets becoming fully amortized, partially offset by increases in amortization of capitalized internal use software development costs.

Refer to Note 4 “Intangible Assets” to the 2026 AFS for information regarding impairment review requirements and assumption uncertainty. This process was completed for the three and six months ended AprilJuly 30,31, 2026, and we considered both adverse and mitigating relevant market-based inputs and factors. Based on the totality of the information considered, we concluded that thereit werewas nonot impairmentmore indicatorslikely relatedthan tonot that the intangiblefair values of the goodwill, intangible, and long-lived assets of our continuing operations (were less than their carrying values and that no triggering event had occurred requiring a quantitative impairment assessment. Accordingly, no impairment charges related to these assets of our TDScontinuing reportingoperations unit).were recognized during the three and six months ended July 31, 2026. For information regarding goodwill, intangible assets and long-lived assets impairments associated with discontinued operations (our former GK reporting unit), see Note 3, "Discontinued Operations and Assets Held for Sale" to the Interim Financial Statements.

In connection with Skillsoft's activities with respect to the sale of its GK business, which was classified as held for sale and discontinued operations as of April 30, 2026, the implementation of our comprehensive resource reallocation plan, and our workplace flexibility policy, we continued to execute initiatives aimed at reducing costs and aligning our operating expenses with current economic conditions and our evolving operating model. These initiatives were intended to enhance operating efficiency, competitiveness, and overall profitability, and included workforce reductions and facility closures and consolidations. Our restructuring charges recognized during the three months and six months ended AprilJuly 30,31, 2026 totaling $1.3$4.4 million and $5.7 million, respectively, were primarily associated with professional fees in connection with our sale efforts relating to the GK business, employee termination costs, and contract termination costs. Our restructuring charges recognized during the three and six months ended AprilJuly 30,31, 2025 totaling $1.0$1.6 million and $2.6 million, respectively, were primarily associated with the employee termination costs.

Other income (expense), net consists primarily of the foreign exchange gains and losses (specifically, resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities), which fluctuate as the U.S. dollar appreciates or depreciates against other currencies. Interest income for the three and six months ended AprilJuly 30,31, 2026 compared to the same periodperiods in 2025 increased primarily due to higher money market balances. The decrease in interest expense, when comparing the three and six months ended AprilJuly 30,31, 2026 to the corresponding periodperiods in 2025, was primarily due to lower average interest rates for our borrowings. As a result of our interest rate swaps agreements, described below, we have a fixed cash interest rate of 8.94% on $300 million of our outstanding term loans.

The gains (losses) reflected for the change in value of the interest rate swaps during the three and six months ended AprilJuly 30,31, 2026 and 2025 are primarily attributable to increases (decreases) in the expectation for one-month SOFR interest rates through June 5, 2027.

The effective income tax rate for the three and six months ended AprilJuly 30,31, 2026 and 2025 differed from the United States federal statutory rate of 21.0% due primarily to the impact of non-deductible items, foreign rate differential,differentials, changes in unremitted earnings, changes in uncertain tax positions, and changes in the valuation allowance on our deferred tax assets. During the second quarter of fiscal 2027, we recorded a $7.8 million increase in uncertain tax positions related to certain international tax positions. This discrete item increased income tax expense and unfavorably impacted the effective tax rate for the period.

As of AprilJuly 30,31, 2026, we had $115.6$90.3 million of unrestricted cash and cash equivalents. Most of our cash and cash equivalents are held at large financial institutions with high rating agency designations, and our exposure to regional banks is not significant. Our investment policy is approved and reviewed annually by the Audit Committee. Our current investment policy’s primary objectives when investing available cash are, in order of importance: (1) preservation of capital and protection of principal; (2) maintenance of liquidity that is sufficient to meet cash flow needs; and (3) maximize rate of return. Our cash requirements from period to period vary depending on factors such as the growth of the business, changes in working capital needs and capital expenditures. We expect our cash and cash equivalents balance to decline during the second quarter of fiscal 2027 compared to April 30, 2026, due to the seasonal nature of our business, as a significant portion of annual bookings are typically collected during the first quarter of each fiscal year. In addition, cash outflows associated with the planned sale of the GK segment, including the transfer of cash balances held by the disposal group at closing, transaction-related costs, and restructuring expenditures, are anticipated to reduce cash flows and balances during the second quarter. The timing and magnitude of these cash outflows will depend on the timing of the closing of the transaction and the ultimate amount of transaction and restructuring costs incurred. We have funded operations primarily through the use of cash collected from our customers and the proceeds received from the Amended Credit Agreement (defined below), supplemented with borrowings under our accounts receivable facility (described below). We expect to operate the business and execute our strategic initiatives principally with funds generated from operations, supplemented by borrowings up to a maximum of $75.0 million under our accounts receivable facility. Based on our current cash flow budgets and forecasts of both short-term and long-term liquidity needs, we anticipate we will have sufficient internal and external sources of liquidity to fund operations and anticipated working capital and other expected cash needs for at least the next twelve months, as well as for the foreseeable future, with capital sources currently available. Specifically, we believe cash flow from operating activities, together with cash on hand and availability under our accounts receivable facility, will be sufficient to fund our anticipated working capital needs, planned capital spending, contractual obligations and other cash requirements, including debt repayments, finance costs, and any stranded and other costs in connection with ourthe sale of theour GK business. Beyond the next twelve months, our liquidity requirements will depend on many factors, including macroeconomic conditions, our revenue growth rate, the timing and the amount of cash collected from our customers, availability under our accounts receivable facility, the expansion of sales and marketing activities, the introduction of platform enhancements, and the continuing market adoption of our platform. While our Amended Credit Agreement does include restrictions on the ability of our guarantor subsidiaries to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions, which are expected to permit distributions to enable us to make required principal and interest payments on our indebtedness. However, in the event we are not able to receive cash from our subsidiaries, we will be unable to make the required payments. In addition, although we anticipate we will be able to refinance outstanding obligations under our credit agreement prior to or when they mature, there can be no assurance we will be able to do so, or that the terms of any refinancing will be favorable. Further, we may require additional capital in the future to fund capital expenditures, acquisitions (including contingent consideration payments),acquisitions, strategic transactions or other investments. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our objectives, operating performance, economic and capital market conditions and other relevant circumstances. Our operating cash flow performance may also be affected by matters discussed under "Risk Factors" in Part I, Item 1A of our 2026 Form 10-K and in this Form 10-Q. These risks and uncertainties may adversely affect our long-term liquidity.

The First Amendment provided additional Term B-1 Loans in the original principal amount of $160 million (the “Term B-1 Loans”), all of which was drawn in full on the closing date thereof, and are scheduled to mature on the Maturity Date. In addition, the First Amendment, among other things, (a) provided for early opt-in to SOFR subject to a 0.75% floor, for the Original Term Loans (the Original Term Loans together with the Term B-1 Loans, the “Initial Term Loans”) and (b) provided for an applicable margin for the Initial Term Loans of 4.25% with respect to base rate borrowings and 5.25% with respect to SOFR borrowings.

Interest rates applicable to the Initial Term Loans are described in Note 12 to the 2026 AFS. As of April 30,July 31, 2026, the outstanding principal balance of $580.2 $578.6 million of Initial Term Loans bears interest at a rate equal to SOFR plus a credit premium of 0.11% plus a margin of 5.25%, per annum, with a SOFR floor of 0.75%. As a result of our interest rate swaps, we have a fixed cash interest rate of 8.94% on $300 million of our outstanding term loans.

We are also required to make prepayments of outstanding obligations under the Amended Credit Agreement if certain criteria are met including, but not limited to excess cash flow for the prior fiscal year (as defined in the Amended Credit Agreement), net cash proceeds from asset sales and net cash proceeds from issuances of equity or indebtedness. No prepayments were required during the three and six months ended AprilJuly 30,31, 2026 or 2025. Loan parties are subject to various affirmative and negative covenants and reporting obligations under the Amended Credit Agreement, as described in Note 12 to the 2026 AFS. As of AprilJuly 30,31, 2026, we are in compliance with all such covenants.

We also have access to up to $75.0 million of borrowings under an accounts receivable credit agreementagreement, as amended (the “A/R Agreement”) with First Citizens Bank and Trust Company.Company, which matures on the earlier of (i) November 26, 2029 or (ii) 90 days prior to the maturity of any corporate debt (including the Initial Term Loans). Pursuant to this agreement, certain of our accounts receivable are pledged as security for loans made by participating lenders.

In November 2024,Under the A/R Agreement was amended to, among other things: (a) extend the maturity date from December 27, 2024 to the earlier of (i) November 26, 2029 or (ii) 90 days prior to the maturity of any corporate debt (including the Initial Term Loans); (b) reduceAgreement, the fixed component of the interest rate tois 2.61% per annum from 3.11% per annum; (c) increase the highest advance rate on certain eligible receivables from 85% tois 90%; (d) reduceand the minimum outstanding balance requirement from $10 million tois $1 million;million. andThe (e)A/R allowAgreement forcurrently permits ad hoc borrowings and repayments. Based on seasonality of billings and the characteristics of our accounts receivable, some of which are not eligible for advances, we are not always able to access the full $75.0 million available capacity. As of April 30,July 31, 2026 and January 31, 2026, $1.0 million was drawn under the A/R Agreement, respectively.Agreement. As of April 30,July 31, 2026, approximately $35$32.5 million was available to be drawn there under.thereunder. Under this agreement, when borrowing more than the required minimum, Skillsoft receives proceeds equal to the net present value of the accounts receivable balances used to calculate the borrowing base. The interest rate on borrowings outstanding under the accounts receivable facility was 6.28% 6.26% as of April 30,July 31, 2026.

Currently OutStatus of Compliance with the NYSE’s Continued Listing Standards

In accordance with NYSE procedures, we timely submitted a plan to the NYSE demonstrating how we intended to regain compliance with the Market Cap Standard within 18 months of our receipt of the Notice (the “Plan”). TheOn PlanJuly included8, strategic2026, stepsthe alreadyNYSE inaccepted processthe intendedPlan. In accordance with NYSE rules, we have until September 26, 2027, to reduceregain costs,compliance andwith reallocatethe capitalMarket toCap higher-growth, higher margin offerings, including our planned disposition of our GK business.Standard. Subsequent to receipt of the Notice, our average global market capitalization has increased above the minimum threshold required under the Market Capitalization Standard. However, there can be no assurance that we will continue to satisfy the Market Capitalization Standard during the remainder of the applicable compliance period or that the NYSE will determine that we have regained compliance on a sustained basis. InSkillsoft’s addition,common therestock canwill continue to be nolisted assurance thaton the NYSE willduring acceptthe our18-month Plancure orperiod, that we will be ablesubject to maintainour compliance with allthe NYSE’s other continued listing standards. We are also subject to quarterly monitoring by the NYSE for compliance with the Plan. If Skillsoft fails to comply with the Plan, does not meet the Market Cap Standard at the end of the cure period, or fails to comply with any other NYSE continued listing standards.standard, Ifit the Plan is not accepted, or if the Plan is accepted but we are unable to meet material aspects of the Plan, any quarterly milestones, cure the deficiency by the end of the applicable cure period, or comply with any other continued listing standard of the NYSE, our common stock wouldwill be subject to the prompt initiation of NYSE suspension and delisting from the NYSE,procedures, which may, among other things, reduce the liquidity and market price for our common stock, and hinder our ability to raise additional capital. See “We are currently out of compliance with the NYSE minimum market capitalization requirement and are at risk of the NYSE delisting our common stock; such a delisting could reduce the liquidity and market price of our common stock, limit investors’ ability to make transactions in our securities, subject us to additional trading restrictions, and/or negatively impact our ability to raise equity financing” in Part I, Item 1A. “Risk Factors” of our 2026 Form 10-K.

On July 10, 2024, the Board approved a share repurchase authorization for up to $10 million of Skillsoft’s outstanding shares of common stock. The share repurchase authorization commenced on July 11, 2024, and will terminate on the fourth anniversary of such date. Under the share repurchase authorization, we may purchase shares of common stock from time to time in the open market, in private negotiated transactions, or by other means. We cannot predict when or if we will repurchase any shares of common stock. The timing and number of shares of common stock that may be purchased will depend on a variety of factors, including the share price of the common stock, general market conditions, alternative uses for capital, our financial performance, and other considerations. This authorization does not obligate us to purchase any minimum number of shares of common stock, and the authorization may be suspended, modified, or discontinued at any time without prior notice. As of AprilJuly 30,31, 2026, no common stock had been repurchased under the share repurchase authorization.

Cash flows from discontinued operations are included within the operating, investing, and financing activities and effect of foreign currency exchange rates on cash and cash equivalents presentedas set forth below and onin the unaudited condensed consolidated statements of cash flows. Cash flows directly attributable to discontinued operations were not significantmaterial for the periods presented herein. The following summarizes our cash flows for the periods presented (in thousands, except percentages):

The decrease in operating activity cash flows in the threesix months ended AprilJuly 30,31, 2026 compared to the corresponding period in 2025, was primarily the result of lowertransaction-related marginscosts inassociated our discontinued operations andwith the timingsale of workingthe capitalGK settlements.business, partially offset by lower expenses attributable to ongoing efficiency efforts.

The decreaseincrease in cash flows used in investing activities, when comparing the threesix months ended AprilJuly 30,31, 2026 to the same period in 2025, was due primarily to the $9.9 million net cash transferred out upon sale of the GK business, partially offset by a $1.5$2.6 million decrease in cash payments for internally developed software.software and a $0.4 million decrease for purchases of property and equipment.

Cash flows used in financing activities consist primarily of borrowings and repayments under our Amended Credit Agreement and A/R Agreement and cash payments tomade repurchasein sharesconnection onwith surrender by stockholders foremployee tax withholding obligations through net share settlements upon vesting of restricted stock-basedstock awards.

The increasedecrease in cash flows used in financing activities, when comparing the threesix months ended AprilJuly 30,31, 2026 to the same period in 2025, was primarily due to lower cash used to satisfy employee tax withholding obligations through net share settlements upon vesting of restricted stock-based awards, partially offset by the timing of principal payments on our outstanding term loans, partially offset by a decrease in cash used to repurchase shares on surrender by stockholders for tax withholding upon vesting of restricted stock-based awards.loans.

UponDue to the completion of the GK segmentbusiness disposition, our future results of operations, cash flow,flow and financial positiondisclosures will reflect only our continuing operations, and therefore may not be comparable to historical results.

The scheduled future principal payments for maturities of our debt and future minimum rental commitments under non-cancelable lease agreements as of AprilJuly 30,31, 2026 were as set forth below (in thousands):

The Interim Financial Statements and the related notes have been prepared in accordance with GAAP. The preparation of our Interim Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of such financial statements, and the reported amounts of assets, liabilities, revenues and expenses during the applicable reporting period. We regularly reevaluate our estimates and judgments, including those related to the following: business combinations, revenue recognition, impairment of goodwill and intangible assets, the remaining useful lives of capitalized assets, income tax assets and liabilities, and restructuring charges and accruals. We base our estimates and judgments on historical experience and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. The economic environment also impacts certain estimates and discount rates necessary to prepare our financial statements, including significant estimates and discount rates applicable to the determination of the fair value used in the impairment testing of our assets. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, or results of operations could be impacted.

Revenue from classroom training and individualindividualized coaching for time-based access to unlimited sessions is recognized inon a straight-line basis over the period in which thethese services are rendered.available to the customers.

For additional information on goodwill and intangible assets see Note 4 to the Interim Financial Statements. For a discussion of impairment charges to goodwill and intangible assets incurred with respect to our discontinued operations for the three and six months ended AprilJuly 30,31, 2026, see Note 3 to the Interim Financial Statements.