Skillsoft Corp.

(1) Description of Business and Basis of Presentation

Description of Business

Skillsoft Corp. (together with its consolidated subsidiaries, “Skillsoft”, “we”, “us”, or “our”) provides a skills management platform and associated learning solutions intended to help organizations manage the human and artificial intelligence (“AI”) skills lifecycle, including visibility into the skills they have and the skills they need, closing skills gaps, matching skills to work, and understanding how skills development impacts business performance. Our Class A Common Stock, par value $0.0001 per share (“common stock”), has been listed on the New York Stock Exchange under the ticker symbol “SKIL” since* June 14, 2021.*We havetwo operating and reportable segments: Talent Development Solutions (“TDS”) and Global Knowledge (“GK”).

References in the accompanying footnotes to Skillsoft’s fiscal year refer to the fiscal year ended* January**31* of that year (e.g., fiscal2026 is the fiscal year ended* January 31, 2026*).

Principles of Consolidation and Basis of Financial Statement Preparation

The accompanying consolidated financial statements include the accounts of Skillsoft Corp. and its subsidiaries, all of which are wholly-owned. Any subsidiaries that are formed or acquired during the year are consolidated from their respective dates of formation or acquisition. We prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures with respect to contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. We base our judgments, estimates and assumptions on current facts, historical experience and various other factors that we believe are reasonable under the circumstances. The economic environment also impacts certain estimates and discount rates necessary to prepare our consolidated financial statements, including significant estimates and discount rates applicable to the determination of the fair values used in the impairment testing of our nonfinancial assets. Our assessment of these factors forms the basis for our judgments on the carrying values of our assets and liabilities, and the accrual of our costs and expenses. Actual results could differ materially from our estimates. We review our estimates and underlying assumptions on an ongoing basis and make revisions as determined necessary by management. Revisions are recognized in the period in which the estimates are revised and* may*also impact subsequent periods.

(2) Summary of Significant Accounting Policies

Revenue Recognition

Skillsoft enters into contracts that provide customers access to a broad spectrum of learning options including cloud-based learning content, talent management solutions, virtual, on-demand and classroom training, and individualized coaching. Skillsoft recognizes revenue that reflects the consideration that we expect to be entitled to receive in exchange for these services. We apply judgment in determining our customers’ ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience, credit, or financial information. We arenot required to exercise significant judgment in determining the timing for the satisfaction of performance obligations or the transaction price.

Skillsoft’s cloud-based software as a solution generally doesnot 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 we continually provide access to, and fulfill our obligation to, the 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 generally recognized on a straight-line basis over the contract term, beginning on the date the service is made available to the customer. Skillsoft’s subscription contracts typically vary fromone year tothree years. Skillsoft’s cloud-based solutions arrangements are generally non-cancellable and non-refundable.

Revenue from classroom training and individual coaching is recognized in the period in which the services are rendered. Revenue from virtual and on-demand training for time-based access to unlimited sessions is recognized on a straight-line basis over the period these services are available to the customers.

We also sell professional services related to our 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 over time based on a measure of progress that reasonably reflects our advancement toward satisfying the performance obligation.

While our revenue primarily relates to software as a service* (“SaaS”) subscription services where the entire arrangement fee is recognized on a straight-line basis over the contractual term, we sometimes enter into contractual arrangements that have multiple distinct performance obligations,one or more of which have different periods over which the services or products are delivered. These arrangements may*include a combination of subscriptions and non-subscription products such as professional services. We allocate the transaction price of the arrangement based on the relative standalone selling price (“SSP”) of each distinct performance obligation.

Reimbursements received from customers for out-of-pocket expenses are recorded as revenues, with related costs recorded as costs of revenues. Skillsoft presents revenues net of any taxes collected from customers and remitted to government authorities.

As our contractual agreements predominately call for advanced billing, contract assets are rarely generated.

Deferred Revenue

Skillsoft records as deferred revenue amounts that have been billed in advance for products or services yet to be provided. Deferred revenue includes the unrecognized portion of revenue associated with service fees for which we have received payment or for which amounts have been billed and are due for payment.

Deferred Contract Acquisition Costs

Sales compensation costs are incurred upon the successful acquisition of a new customer, the extension of an existing customer contract, or the expansion of an existing customer relationship. Skillsoft defers certain TDS sales compensation costs to align the recognition of customer contract acquisition costs with the associated revenue recognition period of the underlying customer licensing or service agreement. Deferred sales compensation costs are amortized on a straight-line basis over the contract life. Sales compensation costs related to our GK products and services are expensed as incurred, which typically aligns with the delivery of those services. Sales compensation costs and amortization of deferred sales compensation costs are included within “sales and marketing expenses” in the consolidated statements of operations.

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Foreign Currency Translation

Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (loss). Foreign currency gains or losses on transactions denominated in a currency other than an entity’s functional currency are recorded in the caption “other income (expenses), net” in the accompanying consolidated statements of operations. For the fiscal years ended* January 31, 2026*,2025 and2024, gains (losses) arising from transactions denominated in foreign currencies other than an entity’s functional currency were approximately ($3.8) million, $1.0 million and ($1.5) million, respectively.

Cash, Cash Equivalents and Restricted Cash

Skillsoft considers all highly liquid investments with original maturities of90 days or less at the time of purchase to be cash equivalents. Cash equivalents also include amounts in transit from certain payment processors for credit and debit card transactions, which typically settle withinfive business days. As of* January 31, 2026* and* January 31, 2025*, we didnot have any available-for-sale investments.

As of each* January 31, 2026* and* January 31, 2025*, we had approximately $100.8 million of unrestricted cash and cash equivalents.

As of* January 31, 2026* and* January 31, 2025*, we had approximately $3.7 million and $2.6 million of restricted cash, respectively. As of* January 31, 2026*, our restricted cash consisted primarily of amounts held as reserves by various vendors that process our customers’ payments via credit card transactions.

Acquisition and Integration Related Costs

Skillsoft expenses acquisition and integration related costs as incurred, which consist of professional fees for legal, investment banking and other advisor costs incurred in connection with business combinations and the subsequent integration-related activities.

Risks and Uncertainties

Skillsoft is subject to a number of risks and uncertainties common to companies in similar industries and stages of development, including, butnot limited to, the uncertainty of economic, political and market conditions; data security and privacy risk; regulatory risks; management of growth; dependence on key individuals; management of international operations; intellectual property risks; competition from substitute products and services of larger companies; product development risk; ability to keep pace with technological developments; and customer adoption of new products. We record a loss contingency when it is deemed probable and reasonably estimable, based on our best estimate.

Leases

Skillsoft has operating leases primarily related to office facilities. These leases generally have remaining lease terms ofone tofive years and donot include material renewal options that are reasonably certain of exercise. Lease obligations arenot material to Skillsoft’s consolidated financial position, results of operations, or liquidity. Accordingly, lease related balances are included within other assets and liabilities, and related cash payments are included in operating cash flows.

Content and Software Development Expenses

Content and software development expenses consist primarily of personnel and contractor-related expenditures to develop our content, platform and other product offerings and are expensed as incurred. We outsource certain aspects of content production tothird parties who produce original content on behalf of Skillsoft. Third party costs incurred in these development efforts with external resources* may*include prepayments and are recognized as expense in proportion to the level of services completed.

Software development costs are expensed as incurred, except for costs attributable to upgrades and enhancements that qualify for capitalization. See the “Capitalized Software Development Costs” section below for further discussion on this matter.

For fiscal2026, fiscal2025 and fiscal2024, Skillsoft incurred $20.3 million, $23.4 million and $26.3 million, respectively of proprietary content development expenses.

Capitalized Software Development Costs

Skillsoft capitalizes certain internal use software development costs related to its SaaS platforms incurred during the application development stage when management with the relevant authority authorizes and commits to the funding of the project, it is probable that the project will be completed, and the software will be used as intended. Skillsoft also capitalizes costs related to specific upgrades and enhancements when it is probable that the expenditures will result in additional functionality. Costs related to preliminary project activities and to post-implementation activities are expensed as incurred. Internal use software is amortized on a straight-line basis over its estimated useful life, which is generally 3 to 5 years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of the assets. Capitalized costs are recorded as intangible assets on the accompanying consolidated balance sheets. For fiscal2026, fiscal2025 and fiscal2024, we capitalized $16.8 million, $16.8 million and $13.7 million of internal use software and development costs, respectively, and recognized amortization of$12.1 million, $8.6 million and $4.9 million, respectively.

Content Partner****Expenses

For fiscal2026, fiscal2025 and fiscal2024, we recognized $24.5 million, $24.8 million and $30.9 million, respectively of royalty and course material expenses forthird party content used or provisioned in our content library. Content partner expenses are included within “costs of revenues” in the consolidated statements of operations.

Short-Term and Long-Term Debt

Short-term debt has contractual or expected maturities ofone year or less. Long-term debt has contractual or expected maturities greater thanone year. Skillsoft amortizes deferred debt financing costs (including issuance costs and creditor fees) and original issuance discounts, both recorded as a reduction to the carrying amount of the related debt liability, as interest expense over the terms of the underlying obligations using the effective interest method.

Financial Instruments

Financial instruments consist mainly of cash and cash equivalents, restricted cash, accounts receivable, accounts payable interest rate swap agreements and warrants.

The carrying amount of accounts receivable is net of an allowance for credit losses, which is based on historical collections and known credit risks. Skillsoft’s allowance for credit losses isnot material to the consolidated financial statements. There wereno material changes in the allowance for credit losses during the periods presented, and credit loss activity didnot have a material impact on Skillsoft’s results of operations or financial position.

See Note18 “Fair Value Measurements” for a discussion related to the fair value of Skillsoft’s borrowing agreements.

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We account for debt and equity issuances as either equity-classified or liability-classified instruments based on an assessment of each instrument’s specific terms and applicable accounting guidance. The assessment considers whether the instruments are freestanding financial instruments that meet the definition of a liability, whether the instruments meet all of the requirements for equity classification, including whether an instrument is indexed to Skillsoft’s own common stock and whether the holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the instrument and as of each subsequent quarterly period end date while the instrument is outstanding.

For issued or modified instruments that meet all of the criteria for equity classification, the instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that donot meet all the criteria for equity classification, the instruments are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the instruments are recognized as a non-cash gain or loss on the consolidated statements of operations.

Skillsoft has elected tonot designate its derivatives as hedging relationships. As such, the changes in the fair value of the derivatives are recorded directly in the consolidated statements of operations.

Concentrations of Credit Risk and Off-Balance-Sheet Risk

For fiscal2026, fiscal2025 and fiscal2024, no customer individually comprised greater than10% of revenue. As of* January 31, 2026* and2025, no customer individually comprised more than10% of accounts receivable.

Skillsoft considers its customers’ financial condition and generally doesnot require collateral. We maintain an allowance for credit losses that is our best estimate of potentially uncollectible trade receivables. Provisions are made based upon a specific review of all significant outstanding invoices that are considered potentially uncollectible in whole or in part. For those invoicesnot specifically reviewed or considered uncollectible, an allowance for credit loss is recorded utilizing different rates, based upon the age of the receivable, historical experience, and other currently available evidence. The allowances are adjusted as additional information becomes known or payments are made.

We haveno off-balance-sheet arrangements nor concentration of credit risks such as foreign exchange contracts, option contracts or other foreign exchange hedging arrangements.

Intangible Assets, Goodwill and Indefinite‑Lived Intangible Impairment Assessments

We recognize the excess of the purchase price, plus the fair value of any noncontrolling interest in an acquiree, over the fair value of identifiable net assets acquired, which includes the fair value of specifically identifiable intangible assets, as goodwill.

Skillsoft amortizes its finite-lived intangible assets, including acquired customer contracts and internally developed software, over their estimated useful life. We review the carrying values of intangible assets subject to amortization at least annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in remaining useful life. Conditions that would indicate impairment and trigger a more frequent impairment assessment include, but arenot limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator.

In addition, Skillsoft reviews the carrying values of its indefinite-lived intangible assets, including goodwill and the Skillsoft trademark, during thefourth quarter of each fiscal year for impairment, or more frequently if certain indicators are present or changes in circumstances suggest that impairment* may*exist and reassesses their classification as indefinite-lived assets.

The fair value of our indefinite-lived trademark intangible 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 didnot 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. Changes in these key assumptions could materially affect the estimated fair value of the indefinite-lived trademark intangible asset and result in future impairment charges.

If current discount rates rise or if relevant market-based inputs for our impairment assessment worsen, subsequent reviews of goodwill and intangibles could result in impairment. Factors that could result in an impairment include, but arenot limited to, the following:

See Note4 “Intangible Assets” for a discussion of impairment charges recognized for fiscal2026 and fiscal2024.

Restructuring Charges

Liabilities for restructuring costs include, but arenot limited to,one-time involuntary termination benefits provided to employees under the terms of a benefit arrangement that, in substance, arenot an ongoing benefit arrangement or a deferred compensation contract, which are recognized on the communication date and certain contract termination costs, including operating lease termination costs which are recognized on the termination date or cease-use date for ongoing lease payments.

In addition, Skillsoft accounts for certain employee-related restructuring charges as an ongoing benefit arrangement, based on its prior practices and policies for the calculation and payment of severance benefits. We recognize employee-related restructuring charges when the likelihood of future payment is probable, and the amount of the severance benefits is reasonably estimable.

Stock-Based Compensation Expense

We recognize compensation expense for time-based restricted stock units granted to employees on a straight-line basis over the service period that awards are expected to vest, based on the fair value of the awards on the date of the grant. For restricted-stock units subject to meeting specified market conditions, we recognize compensation expense using an accelerated attribution method. We recognize forfeitures as they occur. The fair value of restricted stock units that vest based on market conditions are estimated using the Monte Carlo valuation method. These fair value estimates of stock related awards and assumptions inherent therein are estimates and, as a result,* may**not* be reflective of future results or amounts ultimately realized by recipients of the grants.

Advertising Costs

Costs incurred for production and communication of advertising initiatives are expensed when incurred. Advertising expenses amounted to approximately $10.9 million, $10.6 million and $15.4 million for fiscal2026, fiscal2025 and fiscal2024, respectively. Advertising expense is included in the caption “selling and marketing” in the consolidated statements of operations.

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Income Taxes

Skillsoft provides for deferred income taxes resulting from temporary differences between the basis of its assets and liabilities for financial reporting purposes as compared to tax purposes, using rates expected to be in effect when such differences reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely thannot to be realized.

Skillsoft follows the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which requires us to determine whether a tax position of Skillsoft is more likely thannot to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely thannot threshold, the tax amount recognized in the financial statements is reduced to the largest benefit that has a greater thanfifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority.

Interest and penalties related to uncertain tax positions are included in the provision for income taxes in the consolidated statements of operations.

Recently Adopted Accounting Guidance

In* November 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09, Improvements to Income Tax Disclosures,which requires additional information in the rate reconciliation table and additional disclosures about income taxes paid. We adopted this guidance effective February 1, 2025.The impact of our adoption of this guidance is reflected in Note5 “Taxes”. The adoption didnot* have a material impact to our consolidated financial statements, but it resulted in the presentation of more detailed income tax disclosures.

Recently Issued Accounting Guidance

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-40), which requires disclosure of specified information about certain costs and expenses, including employee compensation, depreciation and intangible asset amortization. ASU2024*-03 is effective for annual periods beginning after* December 15, 2026,with early adoption permitted. We will adopt this guidance effective February 1, 2027.*The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In* September 2025,the FASB issued ASU2025*-06*, Intangibles - Goodwill and Other*–* Internal-Use Software (Topic350-40): Targeted Improvements to the Accounting for Internal-Use Software.This ASU removes all references to prescriptive and sequential software development stages (referred to as “project stages”) and requires capitalization of software costs when both of the following occur: (i) management has authorized and committed to funding the software project; and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). ASU2025*-06 is effective for fiscal years beginning after* December 15, 2027,with early adoption permitted. We expect to adopt this guidance effective February 1, 2028.We may*apply the guidance prospectively, retrospectively, or via a modified prospective transition method. We are evaluating the impact that this ASU will have on our consolidated financial statements.

We believe that other recently issued accounting standards will eithernot have a material impact on our consolidated financial statements or willnot apply to our operations.

(3) Discontinued Operations

On* August 15, 2022,we completed the sale of our SumTotal business to athird* party. The disposal of SumTotal assets met the criteria to be reported as held for sale and discontinued operations. The* April 2023final working capital adjustments are included in the captions “gain (loss) on sale of business” in the consolidated statements of operations separate from the results of continuing operations and “Sale of SumTotal, net of cash transferred” within investing activities in the consolidated statements of cash flows for fiscal2024.*

(4) Intangible Assets

Intangible assets consisted of the following (in thousands, except for remaining life):

Amortization expense related to our 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 $127.3 million for fiscal2026, $127.2 million for fiscal2025, and $152.5 million for fiscal2024.

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Our goodwill as of the dates indicated is as follows (in thousands):

Impairment Review Requirements and Assumption Uncertainty

Skillsoft monitors adverse events, conditions or changes in circumstances that indicate impairment of the definite-lived (amortizable) intangible assets of each of our 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 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.

Skillsoft 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, Skillsoft 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 or indefinite-lived intangible asset is less than its carrying amount. If Skillsoft determines that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, or elects to bypass 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 using the income approach (discounted cash flow approach) and the market approach. These approaches require management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ materially from these assumptions. Management endeavors to use assumptions that are reflective of what a market participant would have used in calculating fair value considering the current economic conditions. This process was followed for our impairment test of intangible assets completed during fiscal2026,2025, and2024.

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 didnot 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 impairment test completed during fiscal2026,2025, and2024.

In determining reporting units, Skillsoftfirst 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 the CODM regularly reviews the operating results. Our CEO determined that this wasnot the case, and that our reporting units coincided with our segments.

Impairments During the Fiscal Year Ended January 31, 2026**

During thefourth quarter of fiscal2026, we identified triggering events indicating that the carrying value of our TDS reporting unit* may**not* be recoverable. These events were primarily attributable to a prolonged and significant decline in Skillsoft’s stock price and market capitalization. The decline reflected, in part, broader market conditions affecting the corporate digital learning and talent development industry, including heightened budget scrutiny by enterprise customers, longer purchasing and sales cycles, and increasing competition among digital learning platforms and other technology-enabled training solutions. These industry dynamics contributed to weaker market sentiment toward companies in our sector and a sustained decrease in our market capitalization relative to the carrying value of our reporting unit. In addition, these factors contributed to an increase in the discount rate used in our valuation analysis. Additionally, but to a lesser extent, during thefourth quarter of fiscal2026, our estimated future revenues for the TDS reporting unit declined, particularly within our consumer business associated with our Learner Platform, reflecting updated expectations regarding demand trends and customer purchasing behavior within the digital learning market.

As of* January 1, 2026,the estimated undiscounted future cash flows attributable to carrying value of the TDS and GK asset groups were determined to be greater than the carrying values, therefore management concluded that there wasno impairment of long-lived assets or amortizable intangibles during thefourth* quarter of fiscal2026.

As of* January 1, 2026,we estimated the fair value of our indefinite-lived trademark intangible using the relief-from-royalty method discussed inImpairment Review* Requirements and Assumption Uncertainty above and, as of such date, determined that the fair value was lower than the carrying value. As a result, management recorded a $10.9 million non-cash impairment for the indefinite-lived trademark intangible for thethree months ended* January 31, 2026.This impairment charge is included under impairment ofgoodwill and intangible assets” in the consolidated statements of operations. After theimpairment charge, theindefinite-lived trademark intangible associated with the TDS reporting unit had a carrying value of $65.6 million. Changes in the key assumptions, discussed inImpairment Review Requirements and Assumption Uncertainty* above, could materially affect the estimated fair value of the indefinite-lived trademark intangible asset and result in additional future impairment charges.

Management next estimated the fair value of the TDS and GK reporting units using the weighted average valuation model discussed inImpairment Review Requirements and Assumption Uncertainty above. As of* January 1, 2026,*we estimated the fair value of the TDS and GK reporting units, as of such date, and concluded that the fair value was in excess of the carrying value for each reporting unit.

As of the date of this filing, Skillsoft continues to monitor events and circumstances subsequent to* January 31, 2026,including market capitalization trends and strategic developments related to the GK reporting unit. While these events didnot* require an impairment adjustment as of* January 31, 2026,they may*give rise to a triggering event requiring an interim impairment assessment in subsequent periods.

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During thethird quarter of fiscal2026, we identified triggering events requiring testing for 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, we lowered our expectations for the GK reporting unit’s revenue and estimated future cash flows. As of* October 1, 2025,the estimated undiscounted future cash flows attributable to carrying value of the GK asset group were determined to be greater than the carrying values, therefore management concluded that there wasno* impairment of long-lived assets or amortizable intangibles during thethird quarter of fiscal2026.

Management next estimated the fair value of the GK reporting unit as of* October 1, 2025,using the income approach discussed in Intangible Asset Impairment Review Requirements and Assumption Uncertainty above. Management didnot use the market approach in the weighting of the fair value of the GK reporting unit given its low profitability. For the reasons described above, the estimated future cash flows of this reporting unit declined, and when applied to the impairment analysis resulted in a lower fair value of the GK reporting unit. As a result, management recorded a $20.8 million non-cash goodwill impairment for the GK reporting unit for thethree* months ended* October 31, 2025.*This impairment charge is included under“impairment of goodwill and intangible assets” in the consolidated statements of operations. After the impairment charge, $8.7 million goodwill associated with the GK reporting unit remains. The key assumptions used in the discounted cash flow analysis included projected revenue growth, EBITDA margin, the EBITDA exit multiple, and the discount rate.

We didnot identify any interim triggering events during thethird quarter of fiscal2026 in connection with either the TDS reporting unit or our indefinite-lived trademark intangible.

No Impairment During the Fiscal Year Ended January 31, 2025**

As of* January 1, 2025,*we estimated the fair value of the TDS and GK reporting units, which are the same as our segments, as of such date, the fair value was in excess of the carrying value for each reporting unit.

As of* January 1, 2025,we estimated the fair value of our indefinite-lived trademark intangible using the relief-from-royalty method discussed inImpairment Review* Requirements and Assumption Uncertainty above and, as of such date, the fair value was in excess of the carrying value. However, the excess wasnot significant and changes in the key assumptions, discussed inImpairment Review Requirements and Assumption Uncertainty above, could materially affect the estimated fair value of the indefinite-lived trademark intangible asset and result in future impairment charges.

Impairments During the Fiscal Year Ended January 31, 2024**

During thefourth quarter of fiscal2024, we identified triggering events for impairment primarily attributable to the impact of the observed prolonged and substantial decline in Skillsoft’s stock price and market capitalization, industry analysis and observable industry multiples, which increased our discount rate assumption. In addition, the estimated future cash flows for ourtwo reporting units declined. These declines when comparing fiscal2024 to fiscal2023 were due primarily to: (i) increased competition that drove down the growth experience and expectations for the industry in which the TDS reporting unit operates; and (ii) our GK reporting unit experiencing continued declines in bookings and GAAP revenues.

For the reasons discussed above, for our identifiable intangibles subject to amortization, management believed there were unfavorable changes to assumptions and factors that occurred during fiscal2024 that would indicate impairment or a change in the remaining useful life. Our estimated undiscounted future cash flows attributable to the amortizable intangibles were projected to be less than the carrying values for the GK reporting unit. Therefore, we updated the fair values for all of our identifiable intangibles, including the indefinite-lived intangible in our TDS reporting unit, that are fair valued using the income approach, as of* January 1, 2024.We compared the fair values to their carrying values, which resulted in aggregate impairment losses of $60.5 million during thefourth* quarter of fiscal2024.

Management next estimated the fair value of the TDS and GK reporting units using the weighted average valuation model discussed inImpairment Review Requirements and Assumption Uncertainty above. For the reasons discussed above, the discount rate applied to the analysis increased from the prior year, which drove a lower fair value of our reporting units, resulting in goodwill being impaired for the TDS and GK reporting units as of* January 1, 2024,as the fair values fell below their respective carrying values. As such, Skillsoft recorded goodwill impairment of $129.1 million for the TDS reporting unit and $12.6 million for the GK reporting unit during thefourth* quarter of fiscal2024.

(5)Taxes

The following table presents the domestic and foreign components of income (loss) before income taxes (in thousands):

Significant components of the income tax provision (benefit) consist of the following (in thousands):

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A reconciliation of the effective tax rate differences for the year ended* January 31, 2026*was as follows (dollars in thousands):

(1) State taxes in Massachusetts and Texas made up the majority (greater than50%) of the tax effect in this category.

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Skillsoft’s effective tax rate differed from the statutory rate as follows:

Significant components of the net cash paid (received) for income taxes for the year ended* January 31, 2026,*consisted of the following (in thousands):

(1) State jurisdictions below the threshold for the period presented.

(2) Local country jurisdictions below the threshold for the period presented.

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Deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes. Significant components of Skillsoft’s deferred tax assets and liabilities as of the periods presented were as follows (in thousands):

In assessing the realization of deferred tax assets, Skillsoft considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot be realized. Skillsoft considers the scheduled reversal of deferred tax assets and liabilities in assessing the realization of deferred tax assets. As of the periods presented, Skillsoft had established a valuation allowance of $207.6 million and $180.0 million, respectively, against its deferred tax assets due to uncertainty about whether the deferred tax assets will be realized. The change in total valuation allowance from* January 31, 2025to January 31, 2026*was an increase of $29.4 million.

As of* January 31, 2026,Skillsoft had U.S. federal, state and foreign net operating loss (“NOL”) carryforwards of $278.5 million, $353.2 million and $73.9 million, respectively. Ifnot* utilized, certain of the federal, state and foreign NOL carryforwards will expire beginning in fiscal2027 with the remaindernot subject to an expiration.

The United States enacted the Tax Cuts and Jobs Act in* December 2017,which requires companies to capitalize all their research and development costs for U.S. tax purposes, including software development costs, incurred in tax years beginning after December 31, 2021.Beginning in fiscal2022,* Skillsoft began capitalizing and amortizing research and development costs over afive-year period for domestic research and afifteen-year period for international research rather than expensing these costs for tax purposes. During fiscal2026, Congress passed theH.R.1 (the “Tax Reform Act of2025” commonly referred to as the One Big Beautiful Bill Act (“OBBBA”)). Per the guidance in the bill, domestic entities areno longer required to capitalize research and development (“R&D”) costs. Skillsoft has elected to continue to amortize previously capitalized amounts over thefive-year period initially allowed and will continue to capitalize and amortize international R&D over afifteen-year period.

The utilization of Skillsoft’s NOL carryforwards, other attributes, and credit carryforwards* maybe subject to a limitation due to the “ownership change” provisions under Section382* of the Internal Revenue Code and similar state and foreign provisions. Such limitation* mayresult in the expiration of the NOLs, other attributes, and credit carryforwards prior to their utilization. Certain attributes and carryforwards will be permanently disallowed due to historical Section382* ownership changes and have been removed from Skillsoft’s deferred tax assets. As of* January 31, 2026,we had written off $31.4 million of NOLs, deferred interest, and credit carryforwards that will expire unused due to Section382* limitations along with the corresponding valuation allowance.

We provide for income taxes on the undistributed earnings and other differences between the financial reporting and tax basis of our investments in foreign subsidiaries unless those amounts are considered indefinitely reinvested outside the United States. As of* January 31, 2026,Skillsoft had accrued $11.3 million related to undistributed earnings from foreign subsidiaries as they arenot* considered indefinitely reinvested outside the United States. Any basis differencesnot related to undistributed earnings continues to be considered indefinitely reinvested outside the United States.

We are subject to a U.S. tax requirement that certain income earned by foreign subsidiaries, known as global intangible low-tax income (“GILTI”), must be included in the gross income of their U.S. shareholder. The FASB allows an accounting policy election of either recognizing deferred taxes for temporary differences expected to reverse as GILTI in future years or recognizing such taxes as a current-period expense when incurred. Skillsoft has elected to treat the tax effect of GILTI as a current-period expense when incurred.

Uncertain Tax Positions

As of* January 31, 2026,*Skillsoft had$6.7 million of unrecognized tax benefits associated with uncertain tax positions and an additional$0.6 million of accrued interest and penalties, all of which, if recognized, would affect Skillsoft’s effective tax rate.

A reconciliation of the beginning and ending balance of unrecognized tax benefit is as follows (in thousands):

We recognized ($1.2) million, $0.9 million and $0.7 million of interest (recoveries)/expense and penalties during fiscal2026, fiscal2025, and fiscal2024, respectively. We have accrued $0.6 million and $1.8 million for the payment of interest and penalties as of* January 31, 2026,and January 31, 2025,respectively. We estimate that $1.6 million of our unrecognized tax benefits that we have accrued as of January 31, 2026,will be released within the next12* months due to expiration of the applicable statute of limitations.

Skillsoft and its subsidiaries filed tax returns for the United States, multiple states and localities, and for various non-United States jurisdictions. Skillsoft has identified the United States and Ireland as its major tax jurisdictions. Our tax filings are subject to examination by U.S. federal, state, and various non-United States jurisdictions. Skillsoft’s U.S. federal tax returns are open for years after* January 31, 2022.*

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(6) Prepaid Expenses and Other Current Assets

Prepaid expense and other current assets on the accompanying consolidated balance sheets consist of the following (in thousands):

(7) Other Assets

Other assets on the accompanying consolidated balance sheets consist of the following (in thousands):

(1) Accumulated depreciation wasnot material.

(8) Accrued Expenses

Accrued expenses on the accompanying consolidated balance sheets consisted of the following (in thousands):

(9) Restructuring

In connection with the previously disclosed review of strategic alternatives for the GK segment, including a potential sale, the implementation of our comprehensive resource reallocation plan the (“CRRP”), the integration of recent acquisitions, 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 operating model. These initiatives were intended to enhance operating efficiency, competitiveness, and overall profitability and included workforce reductions and facility consolidations.

The following is a summary of restructuring charges by segment for the periods presented (in thousands):

These restructuring charges are presented separately in the accompanying consolidated statements of operations. The above restructuring charges included employee termination costs of $9.2 million, $11.9 million, and $8.7 million, as well as lease termination and impairment charges of $1.1 million, $1.4 million, and $3.6 million during fiscal2026, fiscal2025 and fiscal2024, respectively. In addition, our restructuring charges for fiscal2026 included $3.9 million associated with contract termination costs.

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The restructuring charge liability activity consisted of the following for the periods presented (in thousands):

(1) As of* January 31, 2026,$5.3 million was included in “accrued compensation”, $1.6 million was included in “accrued expenses and other current liabilities”, and $2.4 million was included in “other long-term liabilities” on the consolidated balance sheets. As of January 31, 2025,*the related balance was included in “accrued compensation” on the consolidated balance sheets.

Management is in the process of implementing planned restructuring actions under the CRRP, and continues its review of strategic alternatives for the GK segment. We will continue to evaluate our cost structure and operating model to align operating expenses with existing economic conditions, which could result in further restructuring actions.

(10) Employee Benefit Plan

We have a401(k) plan covering all US-based employees of Skillsoft who have met certain eligibility requirements. Under the terms of the plan, employees* mayelect to make tax-deferred contributions to the401*(k) plan. In addition, Skillsoft* maymake discretionary contributions. Under this plan, aggregate Skillsoft contributions of approximately$2.6 million were made for each of the fiscal years ended January 31, 2026*,2025, and2024.

In addition, we have various retirement and post-employment plans covering certain international employees. Certain of the plans allow Skillsoft to match employee contributions up to a specified percentage as defined by the plans. Under these plans, aggregate Skillsoft contributions of approximately$3.6 million,$3.3 million and$3.5 million were made for the fiscal years ended* January 31, 2026*,2025, and2024, respectively.

(11) Commitments and Contingencies

Litigation

Skillsoft 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 consolidated financial statements. Currently, there areno material amounts accrued. While it isnot possible to quantify the financial impact or predict the outcome of these pending claims and litigation, management doesnot anticipate that the outcome of any such current proceedings or known claims, either individually or in aggregate, will materially affect Skillsoft’s financial position, results of operations or cash flows.

There areno material proceedings to which any director, officer or affiliate of Skillsoft, any owner of record or beneficially of more thanfive percent of our common stock, or any associate of any of the foregoing, is a party adverse to Skillsoft or any of its subsidiaries or has a material interest adverse to Skillsoft or any of its subsidiaries.

Warranties and Indemnities

Skillsoft’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 our product documentation under normal use and circumstances. Our arrangements also include certain provisions for indemnifying customers against liabilities if our products or services infringe athird party’s intellectual property rights. We have entered into service level agreements with some of our hosted application customers warrantying 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 Skillsoft fails to meet those levels for an agreed upon period of time.

To date, Skillsoft 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 consolidated financial statements.

(12) Long-Term Debt

Debt consisted of the following (in thousands):

Term Loans

On* July16,* 2021, a Skillsoft subsidiary, Skillsoft Finance II, Inc. (“Skillsoft Finance II”) entered into a Credit Agreement (the “Credit Agreement”), by and among Skillsoft Finance II, as borrower, another subsidiary - Skillsoft Finance I, Inc. (“Holdings”), the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, pursuant to which the lenders provided a term loan in the original principal amount of $480 million (the “Original Term Loan”). In connection with the closing of our Codecademy acquisition, Skillsoft Finance II entered into AmendmentNo. 1 to the Credit Agreement, dated as of* April 4, 2022 (the “First Amendment”), among Skillsoft Finance II, Holdings, certain subsidiaries of Skillsoft Finance II, as guarantors, Citibank N.A., as administrative agent, and the financial institutions party thereto as Term B-1 Lenders, which amended the Credit Agreement (as amended by the First Amendment, the “Amended Credit Agreement”), which provided additional Term B-1 Loans in the original principal amount of $160 million. The Original Term Loan and the Term B-1 Loans were each drawn in full on their respective closing dates, and are scheduled to mature on July16,* 2028 (the “Maturity Date”).

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In addition to the provision of the Term B-1 Loans, the First Amendment, among other things, (a) provided for early opt-in to the Secured Overnight Financing Rate (“SOFR”) for the Original Term Loans (the Original Term Loans together with the Term B-1 Loans, the “Initial Term Loans”) and (b) provided for the applicable margin for the Initial Term Loans at 4.25% with respect to base rate borrowings and 5.25% with respect to SOFR borrowings.

We received $153.2 million of net proceeds (net of $4.0 million of financing costs and $2.8 million of original issuance discounts) from the Term B-1 Loans on* April 4, 2022.We used the net proceeds and cash on hand for the closing of the Codecademy acquisition on April 4, 2022.*

The refinancing via the First Amendment was accounted for as a loan modification for certain lenders and a loan extinguishment for other lenders and debt issuance costs and lender fees were accounted for in proportion to whether the related principal balance was considered modified or extinguished. Accordingly, both newly incurred and deferred financing costs and original issuance discounts of $0.1 million and $2.8 million, respectively, are being amortized as additional interest expense over the term of the Initial Term Loans.

Prior to the maturity thereof, the Initial Term Loans are subject to quarterly principal repayments of $1.6 million.

All obligations under the Amended Credit Agreement, and the guarantees of those obligations (as well as certain cash management obligations and interest rate hedging or other swap agreements), are secured by substantially all of Skillsoft Finance II’s personal property as well as the assets of each subsidiary guarantor.

Amounts outstanding under the Amended Credit Agreement bear interest, at the option of Skillsoft Finance II, at a rate equal to (a) SOFR (subject to a floor of 0.75%) plus a credit premium based on the tenor of the interest period plus 5.25% for SOFR Loans or (b) the highest of (i) the Federal Funds Effective Rate plus 10.50%, (ii) the “prime rate” quoted by the administrative agent, (iii) Adjusted Term SOFR plus 1.00% and (iv)1.75%, plus 3.75% for alternative base rate loans. As of* January 31, 2026*, the outstanding principal balance of $583.4 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%.

Voluntary prepayment of the Initial Term Loans is permitted under the Amended Credit Agreement. We are also required to make annual prepayments of outstanding obligations under the Amended Credit Agreement of specified excess cash flow for the prior fiscal year. In addition, prepayments of outstanding obligations under the Amended Credit Agreement* mayalso be required in the amount of specified net cash proceeds received above a specified threshold. Loan parties are subject to various affirmative and negative covenants and reporting obligations under the Amended Credit Agreement. These include, among other things, limitations on indebtedness, liens, sale and leaseback transactions, investments, fundamental changes, assets sales, restricted payments, affiliate transactions, and restricted debt payments. Events of default under the Term Loan Facility include non-payment of amounts due to the lenders, violation of covenants, materially incorrect representations, defaults under other material indebtedness, judgments and specified insolvency-related events, certain ERISA events, and invalidity of loan or collateral documents, subject to, in certain instances, specified thresholds, cure periods and exceptions. As of January 31, 2026*, we are in compliance with all covenants.

The Amended Credit Agreement contains customary events of default. In the event of a payment or other specified defaults, outstanding obligations accrue interest at the then applicable rate plus 2.00%. If an event of default occurs and is continuing (and isnot waived), the administrative agent* may*declare all amounts outstanding thereunder to be immediately due and payable.

Our debt outstanding under the Amended Credit Agreement as of* January 31, 2026* matures as shown below (in thousands):

Accounts Receivable Facility

We also have access to up to $75.0 million of borrowings under our accounts receivable credit agreement (the “A/R Agreement”) with First Citizens Bank and Trust Company, pursuant to which certain of our accounts receivable are pledged as security for loans made by participating lenders.

In* November 2024,the A/R agreement was amended to, among other things: (a) extend the maturity date from December 27, 2024to the earlier of (i) November 26, 2029or (ii)90 days prior to the maturity of any corporate debt, (b) reduce the fixed component of the interest rate to 2.61% per annum from 3.11% per annum, (c) increase the highest advance rate on certain eligible receivables from 85% to 90%, (d) reduce the minimum outstanding balance requirement from $10 million to $1 million, and (e) allow for ad hoc borrowings and repayments. Based on seasonality of billings and the characteristics of accounts receivable, some of which arenot* eligible for advances, we arenot always able to access the full $75.0 million available capacity. As of* January 31, 2026*, $1.0 million was drawn under the A/R agreement and is classified as “borrowings under accounts receivable facility” on the consolidated balance sheet. As of* January 31, 2026*, approxi mately$74.0 million was available to be drawn under the A/R Agreement. 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 6.31% as of * January 31, 2026*. Skillsoft accounts for these transactions as borrowings since the assets pledged contain the right to future receivables. Borrowings and repayments are presented as cash flows from financing activities in the accompanying consolidated statements of cash flows.

When borrowing more than the minimum, the lenders require us to deposit receipts from pledged receivables to a restricted bank account withintwo business days of receipt. A reconciliation detailing collections against the prior month’s borrowing base and additional receivables to be pledged is submitted monthly. If additional pledged receivables exceed the prior month’s collections, funds from the restricted bank account are returned to us. Skillsoft is required to maintain a restricted concentration balance equal tothree months’ interest in a bank account classified as restricted cash on the consolidated balance sheet. The balance in this account was less than $0.1 million as of * January 31, 2026*.

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(13) Long-Term Liabilities

Other long-term liabilities on the accompanying consolidated balance sheets consist of the following (in thousands):

(14) Shareholders’** Equity**

Common Stock

As of* January 31, 2026*, Skillsoft’s authorized share capital consisted of 18,750,000 shares of common stock and 10,000,000 shares of preferred stock, with a par value $0.0001 each. As of such date,9,095,922 shares of common stock were issued, including treasury shares, and 8,796,145 shares were outstanding. As of* January 31, 2026*, Skillsoft hadno shares of preferred stock outstanding.

Subject to applicable law, Skillsoft* may*declare dividends to be paid ratably to holders of common stock out of our assets that are legally available to be distributed as dividends in the discretion of Skillsoft’s Board of Directors (“Board”).

Warrants

See Note15 “Warrants” for information related to the equity and liability-classified warrants.

Share Repurchase Authorization

On* July 10, 2024,Skillsoft’s Board authorized Skillsoft to repurchase up to $10 million of its common stock. The share repurchase authorization will terminate on July 11, 2028and doesnot* obligate Skillsoft 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 January 31, 2026*, no 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):

(15) Warrants

In connection with the formation of Skillsoft and subsequent acquisitions of Software Luxembourg Holding S.A. and Albert DE Holdings Inc., warrants to purchase common stock were issued to investors, sellers of Albert DE Holdings Inc. and an executive of Skillsoft. Warrants that arenot subject to ASC718, Compensation - Stock Compensation and (i) contain features that could cause the warrant to be puttable to Skillsoft for cash or (ii) had terms that prevented the conversion of the warrant from being fixed in all circumstances, are classified as a liability on Skillsoft’s balance sheet and measured at fair value, with changes in fair value being recorded in the statements of operations, whereas all other warrants meet the equity scope exception and are classified as equity andnot remeasured.

A summary of outstanding liability-classified warrants is as follows (in thousands, except per share amounts):

Simultaneously with the closing of Skillsoft’s initial public offering, Churchill Capital Corp II (the “Sponsor”) purchased an aggregate of 15,800,000 private placement warrants. An additional 1,500,000 of private placement warrants were issued to the Sponsor at the closing of the business combination with Software Luxembourg Holding S.A. on* June 11, 2021in connection with the repayment of a promissory note due to the Sponsor. One million of the private placement warrants held by the Sponsor were transferred to the then-incoming and now former CEO as described below. The private placement warrants issued to the Sponsor include conditions that provide for potential changes to the settlement amounts on redemptions and are dependent upon the characteristics of the holder of the warrant. As of January 31, 2026*,453,596 private placement warrants held by the Sponsor had been transferred to public holders (included in “Public warrants” in the table below). Because the holder of the instrument isnot an input into the pricing of a fixed-for-fixed option on equity shares, the warrants are precluded from being indexed to the entity’s stock and are classified as a liability measured at fair value, with changes in fair value each period reported in earnings.

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A summary of outstanding equity classified warrants is as follows (in thousands, except per share amounts):

(1) The warrants issued to the then-owner of Albert DE Holdings Inc. upon acquisition (the “Global Knowledge Merger”) to purchase 250 shares of common stock expired on* October 12, 2025.*

A description of each category of warrants issued and outstanding is as follows:

Public warrants and PIPE private placement warrants (hereinafter referred to as “redeemable warrants”) are currently exercisable and* mayonly be exercised for 1/20th of a whole number of shares for each warrant. Skillsoft may*redeem these warrants:

If and when the redeemable warrants become redeemable by Skillsoft, we* may*exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If Skillsoft calls the redeemable warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants* maybe adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants willnot* be adjusted for issuance of common stock at a price below their exercise price. Additionally, inno event will Skillsoft be required to net cash settle the warrants.

The Sponsor and former CEO private placement warrants have the same terms as the public warrants, except they will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Sponsor private placement warrants are transferred to someone other than the initial purchasers or their permitted transferees, they will be redeemable by Skillsoft and exercisable by such holders on the same basis as the public warrants.

(16) Stock-Based Compensation

Equity Incentive Plans

In* June2021,* Skillsoft adopted the2020 Omnibus Incentive Plan, which was amended on* June 6, 2024 (as so amended the“2020* Plan”). The2020 Plan provides for the grant of incentive stock options, non-qualified 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 Skillsoft. Under the2020 Plan,655,295 shares were initially made available for issuance, increased by amendment to 2,908,333 shares. The2020 Plan also 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. Our Talent and 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 (to date such discretion hasnot been exercised). As of* January 31, 2026*, a total of 508,128 shares of common stock remain available for issuance under the2020 Plan.

In* May 2024,Skillsoft adopted the Skillsoft Corp.2024 Employment Inducement Incentive Award Plan amended as of June 5, 2025,to increase the number of shares authorized for issuance thereunder from 200,000 to a total of 400,000 (as so amended the “Inducement Plan”). The Inducement Plan provides for 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 us, in compliance with Section303A.08* of the New York Stock Exchange Listed Company Manual. As of* January 31, 2026*, a total of 206,252 shares of common stock remain 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.

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The following summarizes stock option activity for the fiscal year ended* January 31, 2026*:

The stock option expense was fully recognized in fiscal2026.

Time-Based Restricted Stock Units

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

The following summarizes time-based RSU activity for the fiscal year ended* January 31, 2026*:

(1) Includes 80,724 vested RSUs, where the shares due on settlement have been irrevocably deferred at the election of the recipients.

The total unrecognized stock-based compensation costs related to time-based RSUs was $16.5 million as of* January 31, 2026*, which is expected to be recognized over a weighted-average period of 2.4 years.

Market-Based Restricted Stock Units

Market-based RSUs (“MBRSUs”) vest over athree-year orfour-year performance period, subject to continued employment through each anniversary and achievement of market conditions (specified targets related to Skillsoft’s stock price and objective relative total shareholder return). The fair value of MBRSUs is 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 MBRSU activity for the fiscal year ended* January 31, 2026*:

The total unrecognized stock-based compensation costs related to MBRSUs was $0.1 million as of* January 31, 2026*, which is expected to be recognized over a weighted-average period of 0.6 year.

Performance-Based Restricted Stock Units

Performance-based RSUs (“PBRSUs”) vest over atwo-year period, subject to continued employment through each grant date anniversary and achievement of specified corporate goals during a less thanone-year performance-period. The grant-date fair value of PBRSUs is based on the closing market price of Skillsoft’s common stock on the grant date, and is recognized over the requisite service period when it becomes probable that the performance condition will be achieved. The expense and shares vested for our PBRSU awards depend on the achievement of specified results; the ultimate expense and number of shares vested can range from 0% to 200% of the target amount granted.

The following summarizes PBRSU activity for the fiscal year ended* January 31, 2026*:

(1) Reflects the number of shares that would vest based on achieving the “Target” level of performance.

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The total unrecognized stock-based compensation costs related to PBRSUs was $0.2 million as of* January 31, 2026*, which is expected to be recognized over a weighted-average period of 2.1 years.

Liability-Classified Market-Based Awards

In thethird quarter of fiscal2025, we granted market-based awards to Ronald W. Hovsepian, initially intended to be settled in cash upon vesting, unless determined by the Board or a committee thereof to be settled in shares. These awards are eligible to be earned based on the volume-weighted average of our daily trading prices over a30-consecutive trading day period (“30-day VWAP”) prior to specified dates. During thesecond quarter of fiscal2026, the Board certified the achievement of thefirst 30-day VWAP hurdle for a total award corresponding to such hurdle of $6 million. Payment of this award is divided into two, equal50% tranches, each valued at $3.0 million. Thefirst 50% of the award was settled in shares during thesecond quarter of fiscal2026. Thesecond 50% of the award will be settled after the required service period. The unvested awards are classified as liabilities and remeasured at fair value using a Monte Carlo simulation at each reporting date and included in the caption “accrued compensation” on the consolidated balance sheets. Expense is recognized using an accelerated attribution method over the requisite service period. The market-based awards potentially vest overtwo-year tofour-year service periods, subject to continued employment and a specified appreciation of Skillsoft’s share price.

The following summarizes the liability-classified market-based performance award balances as of* January 31, 2026* (in thousands):

(1) Included in the caption “accrued compensation” on the consolidated balance sheets

(2) Expected to be recognized over a weighted-average period of 0.4 year.

Stock-Based Compensation Expense

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

(1) When comparing fiscal2026 to fiscal2025, the decrease was primarily the result of a decline in the fair value of the liability-classified market-based awards. When comparing fiscal2025 to fiscal2024, the decrease was primarily the result of higher forfeitures of share-based payments in fiscal2025, including unvested equity-based awards associated with our former Chief Executive Officer whose employment with Skillsoft ended on* May 9, 2024*

(17) Revenue

Revenue Components and Performance Obligations

Subscription Services

Skillsoft offers subscriptions that provide customers access to a broad spectrum of learning options including access to cloud-based Software as a Service (“SaaS”) learning content and individualized coaching. Our 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 we continually provide access to, and fulfill our obligation to, the 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. Our subscription contracts typically vary fromone year tothree years. Our cloud-based solutions arrangements are mostly non-cancellable, non-refundable, and are invoiced in advance of the subscription services being provided. Revenue from individualized coaching for time-based access to unlimited sessions is recognized on a straight-line basis over the period these services are available to the customers.

Virtual, On-Demand and Classroom

Revenue from classroom training is recognized in the period in which the services are rendered. Revenue from virtual and on-demand training for time-based access to unlimited sessions is recognized on a straight-line basis over the period these services are available to the customers. Billing is in advance of the services being provided or immediately after the services have been provided.

Professional Services

Skillsoft 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 at 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. Skillsoft’s professional service engagements are mostly short in duration. Billing is commonly in advance of the services being provided.

Disaggregated Revenue and Geography Information

The following is a summary of revenues by segment and type for the periods presented (in thousands):

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Generally, SaaS and 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 the periods presented (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 the fiscal year ended* January 31, 2026* was as follows (in thousands):

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

Deferred Contract Acquisition Costs

Deferred contract acquisition cost activity for the fiscal year ended* January 31, 2026* was as follows (in thousands):

(18**)** 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 us. Unobservable inputs are variables that reflect our 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:

The following summarizes our assets (liabilities) that are measured at fair value on a recurring basis as of* January 31, 2026* 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 was consistent with their estimated fair values as of* January 31, 2026*. See Note2 “Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash” for additional detail.

Interest Rate Swaps

On* June 17, 2022,Skillsoft entered intotwo fixed-rate interest rate swap agreements to change the SOFR - based component of the interest rate on a portion of our variable rate debt to a fixed rate (the “Interest Rate Swaps”). The Interest Rate Swaps have a combined notional amount 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 interest rate risk exposure to changes in interest payments, attributable to changes in benchmark SOFR interest rates over the interest rate swap term. The changes in cash flow of the Interest Rate Swaps are expected to offset changes in cash flow of the variable rate debt. The Interest Rate Swaps arenot designated as a cash flow hedge and unrealized gains and losses from changes in fair value of the Interest Rate Swaps are included in the caption “fair value adjustment of interest rate swaps” in the statements of operations as they occur. For the fiscal year ended* January 31, 2026*, we recognized a non-cash gain (loss) of ($3.7) million attributable to the Interest Rate Swaps. For the fiscal year ended* January 31, 2025*, we recognized a non-cash gain (loss) of $1.3 million attributable to the Interest Rate Swaps.

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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 at the end of the reporting period, they are included in either the captions “other assets” or “other long-term liabilities” on our consolidated balance sheets.

Liability-Classified Market-Based Awards

The fair value of the liability-classified market-based awards are determined using a Monte Carlo simulation, weighted for the service period completed, at each reporting date. The most significant inputs for determining the fair value either originate from the grant agreement (e.g., stock price hurdles, vesting amounts, and service dates) or are derived from or corroborated by observable market data (e.g., interest rates, stock prices, equity risk, market betas, size premiums, average stock volatility); therefore we have classified the fair value measurement as Level2. See Note16 “Stock-Based Compensation” above for additional information related to the liability-classified market-based awards.

Other Fair Value Instruments

Skillsoft currently invests available 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 consolidated balance sheet as of* January 31, 2026*, 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 Skillsoft’s outstanding principal amounts as of* January 31, 2026*, was $378.0 million. This fair value is determined based on inputs that are classified as Level2 within the fair value hierarchy.

(19) Segment Information

ASC280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise that earn revenue and incur expenses, for which discrete financial information is available, and whose operating results are regularly reviewed by the chief operating decision maker (“CODM”), in determining how to allocate resources and to assess performance. Skillsoft’s CODM is its Chief Executive Officer.No operating segments have been aggregated to determine our reportable segments.

Our CODM organizes Skillsoft’s business management resource allocation and measures performance throughtwo operating and reportable segments: Talent Development Solutions (“TDS”) and Global Knowledge (“GK”). Thesetwo businesses, described below, are highly complementary. The CODM uses segment revenues, segment (“business unit”) contribution profit and business unit contribution margin (business unit contribution profit as a percentage of business unit revenue) to evaluate segment performance and allocate resources. There areno intercompany revenue transactions reported between our reportable segments. When our segments enter into transactions to provide products and services tothird-parties, revenue is generally allocated to our segments based on relative value.

Business unit contribution profit is determined by subtracting the following from segment revenue: business unit costs of revenues, business unit content and software development expenses, and with respect to our TDS segment, business unit product research and management expenses. Business unit costs 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 (as described below), but excluding in each case the following items, as our CODM doesnot consider them in measuring segment performance:

In determining business unit costs of revenues, business unit content and software development expenses, and business unit product research and management expenses, identifiable costs and expenses are allocated directly to the applicable segment while other costs and expenses, including indirect costs and certain corporate charges, are allocated to our segments based on an analysis of the relative usage or benefit derived therefrom by each segment.

Business unit contribution profit excludes the following, as these items are managed and reviewed by the CODM at the company level: selling and marketing expenses; general and administrative expenses; amortization of intangible assets; impairment of goodwill and intangible assets; acquisition and integration-related costs; restructuring expenses; net other income (expense); interest rate swap fair value adjustments; interest income; and interest expense. Although business unit contribution profit and business unit contribution margin are used to evaluate the performance of our segments, we* mayincur operating costs inone* segment that* mayalso benefit the other segment. Operating segment performance isnot* evaluated based on segment asset or liability information. Our accounting policies for segment reporting are the same as those applied to Skillsoft as a whole.

Our TDS segment is delivered throughtwo complementary platform offerings: (i) our enterprise-focused Skills Management Platform, which provides organizations with subscription-based access to learning and workforce capability development tools, and (ii) our Learner Platform, which provides interactive, practice-based technology skill development experiences for individual learners and enterprise teams.

Our GK segment provides instructor-led training delivered both in-person and virtually. GK offers vendor-authored and certified courses delivered by certified instructors. The portfolio focuses on technology and professional certification training, including access to authorized content and interactive labs from leading technology vendors, with Leadership and Management content also available. GK maintains longstanding partnerships with major technology companies and certification authorities, which support the delivery of accredited and certification-aligned programs.

Combined, the TDS and GK segments provide enterprise customers with subscription-based access to learning, skills development, and instructor-led training solutions delivered through a unified platform environment.

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The following reconciles business unit contribution profit to GAAP net income (loss) for the periods presented (in thousands):

Our 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 our segment assets as of the periods presented (in thousands):

The following sets forth our long-lived tangible assets by geographic region as of the periods presented (in thousands):

Skillsoft’s long-lived assets are primarily located in the United States. Long-lived assets located in any individual foreign country arenot material.

(20) Net Income (Loss) Per Share

Basic earnings (loss) 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 (loss) 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 and stock options using the treasury stock method.

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

During fiscal2026, fiscal2025 and fiscal2024, we incurred net losses and, therefore, the effect of our 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):

(21) Related Party Transactions

Agreement with Largest Shareholder

In* January 2025,Skillsoft renewed a previousthree*-year agreement to provide off-the-shelf Skillsoft products to companies affiliated with Prosus N.V. and Naspers Ltd. (collectively known as “Prosus Companies”) for an aggregate of $0.8 million over the next three years (the “Prosus Commercial Agreement”). In* March 2024,Skillsoft entered into aone*-year commercial arrangement to provide training and coaching services to Prosus Companies in the amount of $84,000. These services werenot provided in2024, and were therefore extended in* March 2025for another year (collectively, the “Coaching Arrangement”). In June 2025,the parties consolidated these arrangements and added certain upgraded licenses (the“2025* Consolidation”). The2025 Consolidation includes Skillsoft's customary automaticone-year renewal term unless terminated by either party upon specified advance notice. However, the Coaching Arrangement portion terminated in* January 2026.In April 2025,the parties also entered into an additionalone*-year off-the-shelf product agreement for specific training products for approximately $69,000 and in* March 2026,the parties added a number of additional licenses to the2025* Consolidation for the remaining term of thethree-year agreement for approximately $40,000 per year.

(22) Subsequent Events

Our common stock is currently listed on the NYSE. On* March 26, 2026,the NYSE notified Skillsoft (the “Notice”) that we wereno* longer in compliance with Section802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive30 trading-day period that ended on* March 23, 2026,and, at the same time, our last reported stockholders’ equity, were each less than$50* million (the “Market Cap Standard”).

In accordance with NYSE procedures, we have45 days from receipt of the Notice to submit a plan to the NYSE demonstrating how we intend to regain compliance with the Market Cap Standard within18 months of our receipt of the Notice. We intend to submit a plan to bring the Company into compliance with the Market Cap Standard within the required timeframe (the “Plan”). However, there can beno assurance that the NYSE will accept the Plan, or if accepted, that it will be successful. If the plan isnot submitted on a timely basis, or the NYSE doesnot accept the Plan, it will commence suspension and delisting procedures. If the NYSE accepts the Plan, our common stock would continue to be listed and traded on the NYSE during the18-month cure period, subject to quarterly monitoring and compliance with other continued listing requirements. If we fail to meet material aspects of the Plan or any quarterly milestones, the NYSE* maycommence suspension and delisting procedures. If we fail to regain compliance with the Market Cap Standard at the end of the cure period, the NYSE will commence suspension and delisting procedures. Our common stock would also be subject to delisting if the average closing price of our common stock falls below$1.00* per share over a period of30 consecutive trading days or our common stock trades at an “abnormally low” price.

There can beno assurance that Skillsoft’s plan will be accepted by the NYSE or that we will be able to regain compliance within the applicable cure period. If we fail to regain compliance, its common stock* may*be subject to suspension and delisting from the NYSE.

Management evaluated subsequent events through the date of issuance of the financial statements. Certain events occurring after* January 31, 2026,including continued declines in market capitalization and market volatility, were considered non‑recognized subsequent events but may*impact future impairment assessments.

In addition to the above, we have completed an evaluation of all subsequent events after the balance sheet date of* January 31, 2026through the date this Annual Report on Form10‑K* was filed with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of* January 31, 2026,and events which occurred subsequently but werenot* recognized in the financial statements. We have concluded thatno subsequent events have occurred that require disclosure, except as disclosed within these financial statements.

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