Skillsoft Corp.

Previous wording

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

Current wording

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

Previous wording

Effective April 30, 2026, following the classification of the Global Knowledge ("GK) business as held for sale and discontinued operations, Skillsoft operates as a single reportable segment, Talent Development Solutions ("TDS"). Skillsoft's Chief Executive Officer, who serves as the Chief Operating Decision Maker, evaluates performance and allocates resources based primarily on TDS revenue and Adjusted EBITDA. See Note 13, Segment Information, for additional information regarding Skillsoft's reportable segment and the reconciliation of Adjusted EBITDA to income (loss) from continuing operations.

Current wording

Effective April 30, 2026, following the classification of our Global Knowledge ("GK”) business as held for sale and discontinued operations, Skillsoft operates as a single operating and reportable segment. In connection with Skillsoft’s transition to a single reportable segment, Skillsoft's Chief Executive Officer, who serves as the Chief Operating Decision Maker ("CODM"), changed the measures used to evaluate performance and allocate resources from segment revenues and business unit contribution profit to revenue from continuing operations (which we refer to herein as “revenue”), income (loss) from continuing operations, and non-GAAP adjusted EBITDA from continuing operations (which we refer to herein as “adjusted EBITDA”). Prior-period amounts have been recast to conform to the current presentation (segment revenue determinations are unchanged). In addition to net income (loss) from continuing operations, our CODM uses adjusted EBITDA to evaluate segment performance and allocate resources. We believe that adjusted EBITDA can be useful in evaluating our performance against our peer companies because we believe it provides users with valuable insight into key components of our GAAP financial disclosures. In addition, adjusted EBITDA is used to assess operating performance, financial leverage and the effective use and allocation of resources; to provide more normalized period-to-period comparisons of operating results; and to enhance investors’ understanding of the core operating results of our business. See Note 13, Segment Information, to the Interim Financial Statements for additional information regarding Skillsoft's reportable segment (including how adjusted EBITDA is determined), and the reconciliation of adjusted EBITDA to income (loss) from continuing operations for each of the three and six month periods ended July 31, 2026 and July 31, 2025.

Previous wording

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

Current wording

Segment information for the periods indicated is set forth below (in thousands, except percentages):

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Costs of revenues consists primarily of employee salaries and benefits for hosting operations, professional service and customer support personnel; royalties; hosting and software maintenance services; and facilities and utilities costs. The following provides details regarding the changes in components of costs of revenues (in thousands, except percentages):

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The decrease in compensation and benefits, when comparing the three months ended April 30, 2026 to the corresponding period in 2025, primarily reflected cost savings from our continued optimization of our go-to-market model and sales coverage strategy. The increases in advertising and promotions, when comparing the three months ended April 30, 2026 to the corresponding period in 2025, were primarily attributableto higher investments in targeted demand generation and marketing programs.

Current wording

The decrease in compensation and benefits and software maintenance, when comparing the three and six months ended July 31, 2026 to the corresponding periods in 2025, primarily reflected cost savings from our continued optimization of our go-to-market model and sales coverage strategy. The decreases in advertising and promotions, when comparing the three and six months ended July 31, 2026 to the corresponding periods in 2025, were primarily attributableto efforts to optimize marketing expenditures and improve operating efficiency.

Previous wording

Compensation and benefits and consulting and outside services expenses decreased during the three months ended April 30, 2026 compared to the prior year period, primarily due to cost savings resulting from our restructuring initiatives. In addition, compensation and benefits decreased due to reduced stock-based compensation expense driven by forfeitures and lower grants.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Refer to Note 4 “Intangible Assets” to the 2026 AFS for information regarding impairment review requirements and assumption uncertainty. This process was completed for the three months ended April 30, 2026, and we concluded that there were no impairment indicators related to the intangible assets of our continuing operations (our TDS reporting unit). For information regarding goodwill, intangible assets and long-lived assets impairments associated with discontinued operations (our former GK reporting unit), see Note 3, "Discontinued Operations and Assets Held for Sale" to the Interim Financial Statements.

Current wording

Refer to Note 4 “Intangible Assets” to the 2026 AFS for information regarding impairment review requirements and assumption uncertainty. This process was completed for the three and six months ended July 31, 2026, and we considered both adverse and mitigating relevant market-based inputs and factors. Based on the totality of the information considered, we concluded that it was not more likely than not that the fair values of the goodwill, intangible, and long-lived assets of our continuing operations were less than their carrying values and that no triggering event had occurred requiring a quantitative impairment assessment. Accordingly, no impairment charges related to these assets of our continuing operations were recognized during the three and six months ended July 31, 2026. For information regarding goodwill, intangible assets and long-lived assets impairments associated with discontinued operations (our former GK reporting unit), see Note 3, "Discontinued Operations" to the Interim Financial Statements.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The effective income tax rate for the three months ended April 30, 2026 and 2025 differed from the United States federal statutory rate of 21.0% due primarily to the impact of non-deductible items, foreign rate differential, changes in unremitted earnings, changes in uncertain tax positions, and changes in the valuation allowance on our deferred tax assets.

Current wording

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

Previous wording

As of April 30, 2026, we had $115.6 million of unrestricted cash and cash equivalents. Most of our cash and cash equivalents are held at large financial institutions with high rating agency designations, and our exposure to regional banks is not significant. Our investment policy is approved and reviewed annually by the Audit Committee. Our current investment policy’s primary objectives when investing available cash are, in order of importance: (1) preservation of capital and protection of principal; (2) maintenance of liquidity that is sufficient to meet cash flow needs; and (3) maximize rate of return. Our cash requirements from period to period vary depending on factors such as the growth of the business, changes in working capital needs and capital expenditures. We expect our cash and cash equivalents balance to decline during the second quarter of fiscal 2027 compared to April 30, 2026, due to the seasonal nature of our business, as a significant portion of annual bookings are typically collected during the first quarter of each fiscal year. In addition, cash outflows associated with the planned sale of the GK segment, including the transfer of cash balances held by the disposal group at closing, transaction-related costs, and restructuring expenditures, are anticipated to reduce cash flows and balances during the second quarter. The timing and magnitude of these cash outflows will depend on the timing of the closing of the transaction and the ultimate amount of transaction and restructuring costs incurred. We have funded operations primarily through the use of cash collected from our customers and the proceeds received from the Amended Credit Agreement (defined below), supplemented with borrowings under our accounts receivable facility (described below). We expect to operate the business and execute our strategic initiatives principally with funds generated from operations, supplemented by borrowings up to a maximum of $75.0 million under our accounts receivable facility. Based on our current cash flow budgets and forecasts of both short-term and long-term liquidity needs, we anticipate we will have sufficient internal and external sources of liquidity to fund operations and anticipated working capital and other expected cash needs for at least the next twelve months, as well as for the foreseeable future, with capital sources currently available. Specifically, we believe cash flow from operating activities, together with cash on hand and availability under our accounts receivable facility, will be sufficient to fund our anticipated working capital needs, planned capital spending, contractual obligations and other cash requirements, including debt repayments, finance costs, and any stranded and other costs in connection with our sale of the GK business. While our Amended Credit Agreement does include restrictions on the ability of our guarantor subsidiaries to pay dividends or make other intercompany payments to us, these limitations are su…

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Current wording

As of July 31, 2026, we had $90.3 million of unrestricted cash and cash equivalents. Most of our cash and cash equivalents are held at large financial institutions with high rating agency designations, and our exposure to regional banks is not significant. Our investment policy is approved and reviewed annually by the Audit Committee. Our current investment policy’s primary objectives when investing available cash are, in order of importance: (1) preservation of capital and protection of principal; (2) maintenance of liquidity that is sufficient to meet cash flow needs; and (3) maximize rate of return. Our cash requirements from period to period vary depending on factors such as the growth of the business, changes in working capital needs and capital expenditures. We have funded operations primarily through the use of cash collected from our customers and the proceeds received from the Amended Credit Agreement (defined below), supplemented with borrowings under our accounts receivable facility (described below). We expect to operate the business and execute our strategic initiatives principally with funds generated from operations, supplemented by borrowings up to a maximum of $75.0 million under our accounts receivable facility. Based on our current cash flow budgets and forecasts of both short-term and long-term liquidity needs, we anticipate we will have sufficient internal and external sources of liquidity to fund operations and anticipated working capital and other expected cash needs for at least the next twelve months, with capital sources currently available. Specifically, we believe cash flow from operating activities, together with cash on hand and availability under our accounts receivable facility, will be sufficient to fund our anticipated working capital needs, planned capital spending, contractual obligations and other cash requirements, including debt repayments, finance costs, and any stranded and other costs in connection with the sale of our GK business. Beyond the next twelve months, our liquidity requirements will depend on many factors, including macroeconomic conditions, our revenue growth rate, the timing and the amount of cash collected from our customers, availability under our accounts receivable facility, the expansion of sales and marketing activities, the introduction of platform enhancements, and the continuing market adoption of our platform. While our Amended Credit Agreement does include restrictions on the ability of our guarantor subsidiaries to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions, which are expected to permit distributions to enable us to make required principal and interest payments on our indebtedness. However, in the event we are not able to receive cash from our subsidiaries, we will be unable to make the required payments. In addition, although we anticipate we will be able to refinance outstanding obligations unde…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

In November 2024, the A/R Agreement was amended to, among other things: (a) extend the maturity date from December 27, 2024 to the earlier of (i) November 26, 2029 or (ii) 90 days prior to the maturity of any corporate debt (including the Initial Term Loans); (b) 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 our accounts receivable, some of which are not eligible for advances, we are not always able to access the full $75.0 million available capacity. As of April 30, 2026 and January 31, 2026, $1.0 million was drawn under the A/R Agreement, respectively. As of April 30, 2026, approximately $35 million was available to be drawn there under. Under this agreement, when borrowing more than the required minimum, Skillsoft receives proceeds equal to the net present value of the accounts receivable balances used to calculate the borrowing base. The interest rate on borrowings outstanding under the accounts receivable facility was 6.28% as of April 30, 2026.

Current wording

Under the A/R Agreement, the fixed component of the interest rate is 2.61% per annum; the highest advance rate on certain eligible receivables is 90%; and the minimum outstanding balance requirement is $1 million. The A/R Agreement currently permits ad hoc borrowings and repayments. Based on seasonality of billings and the characteristics of our accounts receivable, some of which are not eligible for advances, we are not always able to access the full $75.0 million available capacity. As of July 31, 2026 and January 31, 2026, $1.0 million was drawn under the A/R Agreement. As of July 31, 2026, approximately $32.5 million was available to be drawn thereunder. Under this agreement, when borrowing more than the required minimum, Skillsoft receives proceeds equal to the net present value of the accounts receivable balances used to calculate the borrowing base. The interest rate on borrowings outstanding under the accounts receivable facility was 6.26% as of July 31, 2026.

Previous wording

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

Current wording

Status of Compliance with the NYSE’s Continued Listing Standards

Previous wording

In accordance with NYSE procedures, we timely submitted a plan to the NYSE demonstrating how we intended to regain compliance with the Market Cap Standard within 18 months of our receipt of the Notice (the “Plan”). The Plan included strategic steps already in process intended to reduce costs, and reallocate capital to higher-growth, higher margin offerings, including our planned disposition of our GK business. Subsequent to receipt of the Notice, our average global market capitalization has increased above the minimum threshold required under the Market Capitalization Standard. However, there can be no assurance that we will continue to satisfy the Market Capitalization Standard during the remainder of the applicable compliance period or that the NYSE will determine that we have regained compliance on a sustained basis. In addition, there can be no assurance that the NYSE will accept our Plan or that we will be able to maintain compliance with all other NYSE continued listing standards. If the Plan is not accepted, or if the Plan is accepted but we are unable to meet material aspects of the Plan, any quarterly milestones, cure the deficiency by the end of the applicable cure period, or comply with any other continued listing standard of the NYSE, our common stock would be subject to delisting from the NYSE, which may, among other things, reduce the liquidity and market price for our common stock, and hinder our ability to raise additional capital.

Current wording

In accordance with NYSE procedures, we timely submitted a plan to the NYSE demonstrating how we intended to regain compliance with the Market Cap Standard within 18 months of our receipt of the Notice (the “Plan”). On July 8, 2026, the NYSE accepted the Plan. In accordance with NYSE rules, we have until September 26, 2027, to regain compliance with the Market Cap Standard. Subsequent to receipt of the Notice, our average global market capitalization has increased above the minimum threshold required under the Market Capitalization Standard. However, there can be no assurance that we will continue to satisfy the Market Capitalization Standard during the remainder of the applicable compliance period or that the NYSE will determine that we have regained compliance on a sustained basis. Skillsoft’s common stock will continue to be listed on the NYSE during the 18-month cure period, subject to our compliance with the NYSE’s other continued listing standards. We are also subject to quarterly monitoring by the NYSE for compliance with the Plan. If Skillsoft fails to comply with the Plan, does not meet the Market Cap Standard at the end of the cure period, or fails to comply with any other NYSE continued listing standard, it will be subject to the prompt initiation of NYSE suspension and delisting procedures, which may, among other things, reduce the liquidity and market price for our common stock, and hinder our ability to raise additional capital. See “We are currently out of compliance with the NYSE minimum market capitalization requirement and are at risk of the NYSE delisting our common stock; such a delisting could reduce the liquidity and market price of our common stock, limit investors’* ability to make transactions in our securities, subject us to additional trading restrictions, and/or negatively impact our ability to raise equity financing*” in Part I, Item 1A. “Risk Factors” of our 2026 Form 10-K.

Previous wording

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

Current wording

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

Previous wording

The decrease in operating activity cash flows in the three months ended April 30, 2026 compared to the corresponding period in 2025, was primarily the result of lower margins in our discontinued operationsand the timing of working capital settlements.

Current wording

The decrease in operating activity cash flows in the six months ended July 31, 2026 compared to the corresponding period in 2025, was primarily the result of transaction-related costs associated with the sale of the GK business, partially offset by lower expenses attributable to ongoing efficiency efforts.

Previous wording

The decrease in cash flows used in investing activities, when comparing the three months ended April 30, 2026 to the same period in 2025, was due primarily to a $1.5 million decrease in cash payments for internally developed software.

Current wording

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

Previous wording

Cash flows used in financing activities consist primarily of borrowings and repayments under our Amended Credit Agreement and A/R Agreement and payments to repurchase shares on surrender by stockholders for tax withholding upon vesting of restricted stock-based awards.

Current wording

Cash flows used in financing activities consist primarily of borrowings and repayments under our Amended Credit Agreement and A/R Agreement and cash payments made in connection with employee tax withholding obligations through net share settlements upon vesting of restricted stock awards.

Previous wording

The increase in cash flows used in financing activities, when comparing the three months ended April 30, 2026 to the same period in 2025, was due to the timing of principal payments on our outstanding term loans, partially offset by a decrease in cash used to repurchase shares on surrender by stockholders for tax withholding upon vesting of restricted stock-based awards.

Current wording

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

Previous wording

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

Current wording

Due to the completion of the GK business disposition, our future cash flow disclosures will reflect only our continuing operations, and therefore may not be comparable to historical results.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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