Skillsoft Corp

(1)** Description of Business and Basis of Presentation**

Description of Business

Skillsoft Corp. (together with its consolidated subsidiaries, “Skillsoft”, “we”, “us”, “our” and the “Company”) has been listed on the New York Stock Exchange under the ticker symbol “SKIL” since* June 14, 2021.*Through a portfolio of high-quality content, an AI-enabled platform that is personalized and connected to customer needs, and a broad ecosystem of partners, Skillsoft drives continuous growth and performance for employees and their organizations by overcoming critical skills gaps, unlocking human potential, and developing the workforce.

With more than150,000 expert-led skills-building courses in modalities ranging from video and audio to instructor-led training, coaching, practice labs, and a generative Artificial Intelligence (“GenAI”)-powered conversation simulator, Skillsoft offers transformative learning experiences for leaders to frontline workers, readers to hands-on learners.

References in the accompanying footnotes to the Company’s fiscal year refer to the fiscal year ended* January**31* of that year (e.g., fiscal2024 is the fiscal year ended* January 31, 2024*).

SumTotal

Refer to Note4 “Discontinued Operations” in our fiscal2024 Form10-K for information regarding the SumTotal business and its2022 sale.

Reverse Stock Split

On* September 29, 2023,we effected a1*-for-20 reverse stock split of our common stock and proportionately decreased the number of authorized shares of common stock. All fiscal2024 shares, outstanding options, warrants, restricted stock unit (“RSU”), and per share information throughout this Form10-Q have been retroactively adjusted to reflect the reverse stock split. The shares of common stock retain a par value of $0.0001 per share. Accordingly, an amount equal to the par value of the decreased shares resulting from the reverse stock split was reclassified from “Common stock” to “Additional paid-in capital”.

Basis of Financial Statement Preparation

The accompanying condensed consolidated financial statements include the accounts of Skillsoft and its wholly owned subsidiaries. These financial statements are unaudited. However, in the opinion of management, the condensed consolidated financial statements reflect all normal and recurring adjustments necessary for their fair statement. Interim results arenot necessarily indicative of results expected for any other interim period or a full year. We prepared the accompanying unaudited condensed consolidated financial statements in accordance with the instructions for Form10-Q and Article10 of Regulation S-X and, therefore, include all information and footnotes necessary for a complete presentation of operations, comprehensive income (loss), financial position, changes in shareholders’ equity (deficit) and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The financial statements contained in these interim financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the2024 Form10-K.

Certain amounts reported in prior years have been reclassified to conform to the presentation in the current year. These reclassifications hadno effect on total assets, total liabilities, total stockholders’ equity, or net income (loss) for the prior years.

The Company is an “emerging growth company,” as defined in Section2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of2012 (the “JOBS Act”), and has and* mayin the future take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that arenot* emerging growth companies including, butnot limited to, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute paymentsnot previously approved. We will cease to qualify as an emerging growth company as of* January 31, 2025.As a result, beginning with our Form10*-K for fiscal2025, we will be subject to the provisions of Section404(b) of the Sarbanes-Oxley Act and our independent registered public accounting firm will formally attest to the effectiveness of our internal controls over financial reporting.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from our estimates.

9

(2)** Summary of Significant Accounting Policies**

The Company’s significant accounting policies are discussed in Note2—Summary of Significant Accounting Policies included in the2024 Form10-K and should be read in connection with the reading of these interim unaudited financial statements.

Recently Issued Accounting Guidance

In* December 2023,the FASB issued ASU2023*-07, Improvements to Reportable Segment Disclosures,which will require disclosure of significant segment expenses and other segment items. The Company will adopt this guidance effective in our Form10-K for the fiscal year ending* January 31, 2025.*We are currently evaluating the impact of this amended disclosure guidance.

In* December 2023,the FASB also issued ASU2023*-09, Improvements to *Income Tax Disclosures,which will require additional information in the rate reconciliation table and additional disclosures about income taxes paid. The Company will adopt this guidance effective February 1, 2025.*We are currently evaluating the impact of this amended disclosure guidance.

(3)** Intangible Assets**

Intangible assets consisted of the following (dollars in thousands and weighted average remaining life in years):

Amortization expense related to the existing finite-lived intangible assets is expected to be as follows (in thousands) for the fiscal years ended* January 31:*

Amortization expense related to intangible assets in the aggregate was $31.8 million, $63.4 million, $39.2 million and $77.5 million for thethree andsix months ended* July 31, 2024* and thethree andsix months ended* July 31, 2023*, respectively.

Impairment Review Requirements and Assumption Uncertainty

The Company reviews intangible assets subject to amortization if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in remaining useful life. The Company reviews indefinite lived intangible assets, including goodwill, on the annual impairment test date (* January**1*) or more frequently if there are indicators of impairment.

In connection with the impairment evaluation, the Company* may**first* consider qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely thannot (i.e., a likelihood of more than50%) that the fair value of a reporting unit is less than its carrying amount. Performing a quantitative goodwill and indefinite lived intangible impairment test isnot necessary if an entity determines based on this assessment that it isnot more likely thannot that the fair value of a reporting unit is less than its carrying amount. If the Company fails or elects to bypass the qualitative assessment, the goodwill impairment test must be performed.

This test requires:

10

The fair value of our reporting units is determined using a weighted average valuation model of the income approach (discounted cash flow approach) and market approach. The income approach requires management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ from these assumptions. We pay particular attention to ensure the assumptions used are reflective of what a market participant would have used in calculating fair value considering the then current economic conditions.

In determining reporting units, the Companyfirst identifies its operating segments, and then assesses whether any components of these segments constitute a business for which discrete financial information is available and where management regularly reviews the operating results.

The Company completed the qualitative assessment discussed above for thesix months ended* July 31, 2024* and concluded that there wereno indicators of impairment for our reporting units.

A roll forward of goodwill is as follows (in thousands):

(4)** Taxes**

For thethree andsix months ended* July 31, 2024*, for continuing operations, the Company recorded a tax benefit of $2.1 million and $3.6 million, respectively, on a pretax loss of $41.6 million and $70.8 million, respectively. For thethree andsix months ended* July 31, 2023*, for continuing operations, the Company recorded a tax benefit of $1.9 million and $6.3 million, respectively, on a pretax loss of $33.9 million and $81.8 million, respectively. For each period, the tax benefit reflects the effect of non-deductible items, current period changes in the Company’s valuation allowance on its deferred tax assets and the impact of foreign tax rate differential.

(5)** Restructuring**

On* July 11, 2024,the Company announced a comprehensive resource reallocation plan. In connection with this and other strategic initiatives implemented during thethree* andsix months ended* July 31, 2024and July 31, 2023*, the Company’s management approved and initiated plans to reduce its cost structure and better align operating expenses with existing economic conditions and the Company’s operating model.

The following is a summary of restructuring charges by segment for thethree andsix months ended* July 31, 2024and July 31, 2023* (in thousands):

These restructuring charges are presented separately in the accompanying condensed consolidated statements of operations. The restructuring charges for thesix months ended* July 31, 2024and July 31, 2023are substantially all related toseverance costs of terminated employees and lease termination and lease impairment charges. As of July 31, 2024* and* January 31, 2024,the Company had restructuring charge liabilities of $8.0 million and $3.3 million, respectively. Management anticipates further restructuring charges during the remainder of fiscal2025* as the identified resource reallocation measures initiated in mid-* July 2024*are fully implemented.

(6)** Leases, Commitments and Contingencies**

Leases

The Company’s lease portfolio includes office space, training centers, and vehicles to support its research and development activities, sales operations and other corporate and administrative functions in North America, Europe and Asia. The Company’s leases have remaining terms ofone year toten years. Some of the Company’s leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

All of the Company's leases are classified as operating leases. Our right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the expected lease term. As the Company’s operating leases generally donot provide an implicit rate, the Company uses an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at the acquisition date to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment. The weighted average incremental borrowing rate for its operating leases as of* July 31, 2024* and* January 31, 2024* was 5.9% and 5.7%, respectively.

The operating leases are included in the captions “Right of use assets”, “Lease liabilities”, and “Long-term lease liabilities” on the Company’s condensed consolidated balance sheets. The weighted-average remaining lease term of the Company’s operating leases is 6.3 years as of* July 31, 2024*. Lease costs for minimum lease payments are recognized on a straight-line basis over the lease term. The lease costs were $1.4 million and related cash payments were $1.4 million for thesix months ended* July 31, 2024*. The lease costs were $2.9 million and related cash payments were $1.4 million for thesix months ended* July 31, 2023*. Lease costs are included within the content and software development, selling and marketing, and general and administrative lines on the condensed consolidated statements of operations, and the operating leases related cash payments were included in the operating cash flows on the condensed consolidated statements of cash flows. Short-term lease costs and variable lease costs arenot material.

11

See Note5 for a discussion related to restructuring charges associated with lease termination and lease impairment charges.

The below reconciles the undiscounted future minimum lease payments under non-cancellable leases to the total lease liabilities recognized on the condensed consolidated balance sheet as of* July 31, 2024* (in thousands):

Litigation

On* November 21, 2023,the Company was named as a nominal defendant in a shareholder derivative action filed in the Delaware Court of Chancery captionedNorcross v. Prosus N.V., et al.* The plaintiff, a Company shareholder, alleges that the Company's directors and controlling shareholders breached their fiduciary duties to plaintiffs by causing the Company to acquire Codecademy at an above-market price. Plaintiff seeks monetary damages as compensation for the harm caused by the alleged breaches. We currently cannot estimate any possible loss that* may*result from this action.

In addition, the Company is, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business including those relating to commercial and contractual disputes, employment matters, intellectual property, and other business matters. When appropriate, management consults with legal counsel and other appropriate experts to assess claims. If, in management’s opinion, we have incurred a probable loss as determined in accordance with GAAP, an estimate is made of the loss and the appropriate accrual is reflected in our condensed consolidated financial statements. Currently, there areno material amounts accrued. While it isnot possible to quantify the financial impact or predict the outcome of all pending claims and litigation, management doesnot anticipate that the outcome of any current proceedings or known claims, either individually or in aggregate, will materially affect the Company’s financial position, results of operations or cash flows.

Guarantees

The Company’s software license arrangements and hosting services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and substantially in accordance with the Company’s product documentation under normal use and circumstances. The Company’s arrangements also include certain provisions for indemnifying customers against liabilities if its products or services infringe athird party’s intellectual property right. The Company has entered into service level agreements with some of its hosted application customers warranting certain levels of uptime reliability and such agreements permit those customers to receive credits against monthly hosting fees or terminate their agreements in the event that the Company fails to meet those levels for an agreed upon period of time.

To date, the Company hasnot incurred any material costs as a result of such indemnifications or commitments and hasnot accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements.

12

(7)** Long-Term Debt**

Debt consisted of the following (in thousands):

The Company’s debt outstanding as of* July 31, 2024* matures as shown below (in thousands):

Refer to Note14 “Long-Term Debt” in our2024 Form10-K for information regarding the Company's term loan and accounts receivable facility.

The reserve balance associated with the accounts receivable facility was $5.0 million on* July 31, 2024* and is classified as restricted cash on the condensed consolidated balance sheet. The interest rate on borrowings outstanding under the accounts receivable facility was 8.46% at* July 31, 2024*. As of* July 31, 2024*, $40.4 million was drawn under the accounts receivable facility and is classified as a current liability on the balance sheet.

(8)** Shareholders**’** Equity**

Common Stock

As of* July 31, 2024*, the Company’s authorized share capital consisted of 18,750,000 shares of Class A common stock and 10,000,000 shares of preferred stock, with a par value $0.0001 each, and 8,504,829 shares of Class A common stock were issued and 8,205,052 shares were outstanding. As of* July 31, 2024*, the Company hadno shares of preferred stock or Class C common stock outstanding. Except as required by law, holders of shares of Class C common stock arenot entitled to vote any such shares.

Subject to applicable law, the Company* maydeclare dividends to be paid ratably to holders of Class A common stock out of the Company’s assets that are legally available to be distributed as dividends in the discretion of the Company’s board of directors. Holders of Class C common stock are generallynot* entitled to dividends.

Warrants

Refer to Note16 “Shareholders’ Equity” in our2024 Form10-K, for information related to the equity and liability-classified warrants.

Share Repurchase Authorization

On* July 10, 2024,the Company’s board of directors authorized Skillsoft to repurchase up to $10 million of its Class A common stock, with an objective to manage potential dilution from future vesting of employee equity grants. The share repurchase authorization will terminate on July 11, 2028and doesnot* obligate the Company to purchase any minimum number of shares of Common Stock, and the authorization* maybe suspended, modified, or discontinued at any time without prior notice. As of July 31, 2024,*no Class A common stock had been repurchased under the share repurchase authorization.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss) associated with foreign currency translation adjustments consisted of the following (in thousands):

13

(9)** Stock-Based Compensation**

Equity Incentive Plans

In* June2021,* Skillsoft adopted the2020 Omnibus Incentive Plan (“2020 Plan”). The2020 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other equity-based awards, and cash-based incentive awards to employees, directors, and consultants of the Company. Under the2020 Plan,655,295 shares were initially made available for issuance. The2020 Plan includes an annual increase on* January1* each year beginning on* January1,* 2022, in an amount equal to 5.0% of the total number of shares of common stock outstanding on* December31* of the preceding calendar year. The Compensation Committee* mayact prior to January1* of a given year to provide that there will beno * January1* increase for such year or that the increase for such year will be a lesser number of shares of common stock than provided for in the2020 Plan. As of* July 31, 2024*, a total of 1,367,132 shares of common stock were available for issuance under the2020 Plan.

In* May 2024,Skillsoft adopted the Skillsoft Corp.2024 Employment Inducement Incentive Award Plan (the “Inducement Plan”). The Inducement Plan provides for the inducement grants of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other equity-based awards, and cash-based incentive awards to new hires, or individuals being rehired following a bona fide period of non-employment with the Company, in compliance with Section303A.08* of the New York Stock Exchange Listed Company Manual. As of* July 31, 2024,*a total of 160,000 shares of common stock were available for issuance under the Inducement Plan.

Stock Options

Under the2020 Plan, all employees are eligible to receive incentive share options and all employees, directors and consultants are eligible to receive non-statutory share options. The options generally vest over four years and have a term often years. Vested options under the plan generally expirenot later than 90 days following termination of employment or service ortwelve months following an optionee’s death or disability. The fair value of stock options is determined on the grant date and amortized over the vesting period on a straight-line basis.

The following summarizes the stock option activity for thesix months ended* July 31, 2024*:

The total unrecognized equity-based compensation costs related to the stock options was $0.4 million based on the $67.23 weighted average grant date fair value of the options, which is expected to be recognized over a weighted-average period of 0.9 years.

Time-Based Restricted Stock Units

Restricted stock units (“RSUs”) represent a right to receiveone share of the Company’s common stock that is both non-transferable and forfeitable unless and until certain conditions are satisfied. Other than RSUs granted to our non-employee directors, which vest upon the earlier of the anniversary of the grant date and the Company’s next annual meeting of stockholders, RSUs generally vest ratably over athree orfour-year period, subject to continued employment through each anniversary. The fair value of RSUs is determined on the grant date and is amortized over the vesting period on a straight-line basis.

The following summarizes the time-based RSU activity for thesix months ended* July 31, 2024*:

The total unrecognized stock-based compensation costs related to time-based RSUs was $24.5 million, which is expected to be recognized over a weighted-average period of 2.6 years.

14

Market-Based Restricted Stock Units

Market-based restricted stock units (“MBRSUs”) vest over athree orfour-year performance period, subject to continued employment through each anniversary and achievement of market conditions, specifically the Company's stock price and an objective relative total shareholder return. The fair value of MBRSUs that include vesting based on market conditions are estimated using the Monte Carlo valuation method. Compensation cost for these awards is recognized based on the grant date fair value which is recognized over the vesting period using the accelerated attribution method.

The following summarizes the MBRSUs activity for thesix months ended* July 31, 2024*:

The total unrecognized stock-based compensation costs related to MBRSUs was $1.3 million, which is expected to be recognized over a weighted-average period of 1.2 years.

Stock-Based Compensation Expense

The following summarizes the classification of stock-based compensation expense in the condensed consolidated statements of operations (in thousands):

(1) Stock-based compensation expense during the three months ended July 31, 2024 was reduced by $6.0 million due to forfeitures of share-based payments, including unvested equity-based awards associated with the former Chief Executive Officer whose employment with the Company ended on May 9, 2024.

(10)** Revenue**

Revenue Components and Performance Obligations

SaaS Subscription Services

The Company offers subscriptions that provide customers access to a broad-based spectrum of learning options including access to cloud-based Software as a Service (“SaaS”) learning content and individualized coaching. The Company’s cloud-based subscription solutions normally donot provide customers with the right to take possession of the software supporting the platform or to download course content without continuing to incur fees for hosting services and, as a result, are accounted for as service arrangements. Access to the platform and course content represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is usually recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company’s subscription contracts typically vary fromone year tothree years. The Company’s cloud-based solutions arrangements are mostly non-cancellable, non-refundable, and are invoiced in advance of the subscription services being provided.

Virtual, On-Demand and Classroom

The Company’s virtual, on-demand and classroom training provides customers with technical training. Revenue is recognized in the period in which the services are performed. Billing is in advance of the services being provided or immediately after the services have been provided.

Professional Services

The Company also sells professional services related to its cloud solutions which are typically considered distinct performance obligations and are recognized over time as services are performed. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided (proportional performance method). These services usually consist of implementation, integration, and general consulting. Mostly, the Company’s professional service engagements are short in duration. Billing is commonly in advance of the services being provided.

15

Disaggregated Revenue and Geography Information

The following is a summary of revenues by type for thethree andsix months ended* July 31, 2024and July 31, 2023* (in thousands):

Generally, SaaS subscription services revenues are recognized over the service period, while virtual, on demand, classroom and professional services revenues are recognized at the point they are delivered.

The following sets forth our revenues by geographic region for thethree andsix months ended* July 31, 2024and July 31, 2023* (in thousands):

Other than the United States, no single country accounted for more than10% of revenue for all periods presented.

Deferred Revenue

Deferred revenue activity for thesix months ended* July 31, 2024* was as follows (in thousands):

Deferred revenue performance obligations relate predominantly to time-based SaaS subscription services that are billed in advance of services being rendered.

Deferred Contract Acquisition Costs

Deferred contract acquisition cost activity for thesix months ended* July 31, 2024* was as follows (in thousands):

(11)** Fair Value Measurements**

ASC Topic820, Fair Value Measurements and Disclosures (“ASC820”) establishes a fair value hierarchy that prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are information that reflect the assumptions that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are variables that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Thethree levels of the fair value hierarchy established by ASC820 in order of priority are as follows:

16

The following summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as of* July 31, 2024* and are categorized using the fair value hierarchy (in thousands):

Cash, Cash Equivalents and Restricted Cash

The cost of our cash, cash equivalents and restricted cash agreed to the estimated fair value as of* July 31, 2024*. Refer to Note2 “Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash” in our2024 Form10-K for additional detail.

Interest Rate Swaps

On* June 17, 2022,the Company entered intotwo fixed-rate interest rate swap agreements to change the Secured Overnight Financing Rate (“SOFR”)-based component of the interest rate on a portion of the Company’s variable rate debt to a fixed rate (the “Interest Rate Swaps”). The Interest Rate Swaps have a combined notional value of $300.0 million and a maturity date of June 5, 2027.The objective of the Interest Rate Swaps is to eliminate the variability of cash flows in interest payments on $300.0 million of variable rate debt attributable to changes in benchmarkone*-month SOFR interest rates. The hedged risk is the exposure to changes in interest payments, attributable to fluctuations in benchmark SOFR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to offset changes in cash flows of the variable rate debt. The Interest Rate Swaps arenot designated as a cash flow hedge and changes in the fair value of the interest rate swaps are recorded in earnings each period. For thethree andsix months ended* July 31, 2024*, the Company recognized a non-cash loss of $6.5 million and a non-cash gain of $1.2 million attributable to the Interest Rate Swaps, respectively. For thethree andsix months ended* July 31, 2023*, the Company recognized a non-cash gain of $6.9 million and $7.2 million attributable to the Interest Rate Swaps, respectively.

The inputs for determining fair value of the Interest Rate Swaps are classified as Level2 inputs. Level2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves, index forward curves, discount curves, and volatility surfaces. The counterparties to these derivative contracts are highly rated financial institutions which we believe carry only a minimal risk of nonperformance.

Depending on whether the Interest Rate Swaps are in an asset or liability position as of the end of a reporting period, they are included in either the captions “Other assets” or “Other long-term liabilities” on the Company's condensed consolidated balance sheets.

Other Fair Value Instruments

The Company currently invests excess cash balances primarily in money market funds invested in United States Treasury securities and United States Treasury securities repurchase agreements, as well as cash deposits held at major banks. The carrying amounts of cash and cash equivalents, trade receivables, trade payables and accrued liabilities, as reported on the condensed consolidated balance sheet as of* July 31, 2024*, approximate their fair value because of the short maturity of those instruments.

Our long-term debt is a financial instrument, and the fair value of the Company’s outstanding principal as of* July 31, 2024* was $476.2 million. This fair value is determined based on inputs that are classified as Level2 within the fair value hierarchy.

(12)** Segment Information**

ASC280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in determining how to allocate resources and in assessing performance. The Company’s CODM is its Principal Executive Officer. The Company’s CODM evaluates results using the operating segment structure as the primary basis for which the allocation of resources and financial results are assessed.

The Company has organized its business intotwo segments: Talent Development Solutions (formerly known as Content & Platform) and Global Knowledge (formerly known as Instructor-Led Training). Both of the Company’s segments market and sell their offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs. The CODM primarily uses revenues and operating income as measures to evaluate financial results and allocation of resources. The Company allocates certain operating expenses to the reportable segments, including general and administrative costs based on the usage and relative contribution provided to the segments. There areno intercompany revenue transactions reported between the Company’s reportable segments.

The Talent Development Solutions business engages in the sale, marketing and delivery of its content learning solutions, in areas such as Leadership and Business, Technology and Developer and Compliance. This includes individualized coaching as well as technical skill areas assumed in the Codecademy acquisition. In addition, Talent Development Solutions offers Percipio, an artificial intelligence (“AI”)-driven online learning platform that delivers an immersive learning experience through SaaS solutions. It leverages its highly engaging content, curated into nearly 700 learning paths (channels) that are continuously updated to ensure customers always have access to the latest information.

The Global Knowledge business offers training solutions covering information technology and business skills for corporations and their employees. Global Knowledge guides its customers throughout their lifelong technology learning journey by offering relevant and up-to-date skills training through instructor-led (in-person “classroom” or online “virtual”) and self-paced (“on-demand”), vendor certified, and other proprietary offerings. Global Knowledge offers a wide breadth of training topics and delivery modalities both on a transactional and subscription basis.

17

The following presents summary results for each of the segments for thethree andsix months ended* July 31, 2024and July 31, 2023*:

Talent Development Solutions’ segment depreciation for thethree andsix months ended* July 31, 2024* was $0.5 million and $1.0 million, respectively. Talent Development Solutions’ segment depreciation for thethree andsix months ended* July 31, 2023* was $0.6 million and $1.4 million, respectively.

Global Knowledge’s segment depreciation for thethree andsix months ended* July 31, 2024* was $0.2 million and $0.4 million, respectively. Global Knowledge’s segment depreciation for thethree andsix months ended* July 31, 2023* was $0.5 million and $0.9 million, respectively.

The Company’s segment assets primarily consist of cash and cash equivalents, accounts receivable, prepaid expenses, deferred taxes, property and equipment, goodwill and intangible assets. The following sets forth the Company’s segment assets as of* July 31, 2024* and* January 31, 2024* (in thousands):

The following sets forth the Company’s long-lived tangible assets by geographic region as of* July 31, 2024* and* January 31, 2024* (in thousands):

18

(13)** Net Loss Per Share**

Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options, and shares issuable under the employee stock purchase plan using the treasury stock method.

The following sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

During thethree andsix months ended* July 31, 2024and July 31, 2023*, the Company incurred net losses and, therefore, the effect of the Company’s potentially dilutive securities wasnot included in the calculation of diluted loss per share as the effect would be anti-dilutive. The following contains share/unit totals with a potentially dilutive impact, which excludes the effect of the treasury stock method (in thousands):

(14)** Related Party Transactions**

Agreement with Largest Shareholder

On* January 31,*2022, Skillsoft entered into a commercial agreement to provide off-the-shelf Skillsoft products to the Company’s largest shareholder, MIH Learning B.V., and its affiliates for $0.7 million over three years.

(15)** Subsequent Events**

As previously announced, effective* April 16, 2024,the Board of Directors of the Company appointed Ronald W. Hovsepian as the Company’s interim Principal Executive Officer and Executive Chairman. On September 4, 2024,*the Company entered into a letter agreement with Mr. Hovsepian, pursuant to which he will serve as our Executive Chair and Chief Executive Officer.

In addition to the above, the Company has completed an evaluation of all subsequent events after the balance sheet date of* July 31, 2024* through the date this Quarterly Report on Form10-Q was filed with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of* July 31, 2024*, and events which occurred subsequently but werenot recognized in the financial statements. The Company has concluded thatno subsequent events have occurred that require disclosure, except as disclosed within these financial statements.

19