Management’s discussion and analysis of financial condition and results of operations (Management’s Discussion and Analysis) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management’s current expectations and are subject to various uncertainties and changes in circumstances. Important factors that could cause actual results to differ materially from those described in forward-looking statements are set forth below under the heading “Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995.” We suggest that the following discussion and analysis be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report. Non-GAAP Measures This Management’s Discussion and Analysis includes the concept of Adjusted EBITDA, which is a non-GAAP financial measure. We define Adjusted EBITDA as net income or loss excluding the impact of interest, income taxes, intangible asset amortization, depreciation, stock-based compensation expense, and certain other items such as restructuring costs. We reference this non-GAAP measure in our decision making because it provides supplemental information that facilitates consistent internal comparisons to the operating performance of prior periods and we believe it provides investors with greater transparency to evaluate our operational activities and financial results. For a reconciliation of our reportable segment Adjusted EBITDA to income or loss before income taxes, a related GAAP measure, refer to Note 7, Segment Information, to our unaudited condensed consolidated financial statements. RESULTS OF OPERATIONS Overview Franklin Covey Co., a global leadership and organizational performance company, gives strategy the human edge. Our mission is to “enable greatness in people and organizations everywhere,” and our worldwide resources are organized to help clients achieve breakthrough results and transform how they execute strategy at scale. We believe that our content and services create the connection between capabilities and results. Our business is currently structured around two divisions, the Enterprise Division and the Education Division, which are driven to develop high-performing leaders at all levels of the organization and align people around purpose and priorities. The Enterprise Division consists of our North America and International segments and is focused on selling our offerings to corporations, governments, not-for-profits, and other related organizations. Our Education Division is centered around the principles found in the Leader in Me and is dedicated to helping educational institutions build cultures that will produce great results, including increased student performance, improved school culture, and increased parental and teacher involvement. For Franklin Covey, fiscal 2025 was a year of transition and transformation as we initiated a new go-to-market and sales strategy in North America. In addition, our fiscal 2025 results of operations were adversely impacted by various macroeconomic factors, including reduced U.S. federal government spending and geopolitical tensions that produced instability in certain regions of the world. This resulted in a reduction of invoiced amounts and net revenue for fiscal 2025, which will continue to impact fiscal 2026 as we recognize a lower base of previously deferred revenue. Despite these headwinds, we have retained the vast majority of our client base and now with the bulk of our revenue-generating transformation investments nearly completed, we believe these efforts are beginning to produce growth in invoiced amounts in fiscal 2026. We view fiscal 2026 to be a year of execution, generating solid growth of invoiced amounts in Enterprise North America, and believe fiscal 2027 will continue the momentum and provide increased reported revenue, Adjusted EBITDA, and cash flow. We believe the transformative investments made in our Enterprise North America go-to-market strategy plus our continued investments in content and technology position us for meaningful growth in the future. During the third quarter of fiscal 2026, we continued to be encouraged by growth in Enterprise North America invoiced amounts, which also saw growth in the first half of fiscal 2026. The Education Division also saw invoiced growth during 18 Table of Contents the third quarter despite an unexpected budget reduction for education spending in a state which has a state-wide Leader in Me initiative. We believe invoiced amounts are a primary lead metric that demonstrates the positive momentum building from our go-to-market investments. In the third quarter of fiscal 2026, we were able to translate this operational momentum into increased revenue and Adjusted EBITDA compared with the prior year. Our consolidated revenue for the quarter ended May 31, 2026, increased 1% to $67.8 million compared with $67.1 million in the prior year, and reflected increased invoiced amounts and increased subscription revenue. Revenue growth in the third quarter was partially offset by a $0.5 million decrease in sublease revenue following the exit from our previous headquarters campus. Foreign exchange rates had a $0.3 million favorable impact on our consolidated revenues and an insignificant impact on operating results and Adjusted EBITDA in the third quarter of fiscal 2026. The Company’s revenue performance for the quarter ended May 31, 2026, included the following key metrics: oEnterprise Division revenues for the third quarter of fiscal 2026 increased 2% to $48.1 million compared with $47.3 million in fiscal 2025. Enterprise Division revenue performance benefitted from a $1.0 million increase in North America segment revenues, which were partially offset by decreased International segment revenues in the quarter. Revenue performance in our North America segment was favorably impacted by increased invoiced amounts in the first half of fiscal 2026, but growth was still muted by the effects of canceled government contracts, geopolitical tensions, and other macroeconomic difficulties, which significantly lowered invoiced amounts in fiscal 2025 and continues to impact revenue in fiscal 2026 as we recognize previously deferred amounts. Despite ongoing uncertainties and difficulties in the macroeconomic environment, we were encouraged by continued growth in invoiced amounts in the North America segment in the first three quarters of fiscal 2026. oEducation Division revenues in the third quarter of fiscal 2026 increased 2% to $19.0 million compared with the third quarter of fiscal 2025. The increase in Education Division revenue was primarily due to increased subscription revenue, which was partially offset by decreased classroom and training materials sales. Education Division subscription revenue increased by 11% primarily due to the delivery of more training and coaching days. Total training and coaching days delivered in the third quarter increased by over 200 days compared with fiscal 2025. The decrease in classroom and training materials was primarily due to state-wide initiatives in fiscal 2025 that did not repeat as a result of budget cuts or did not repeat at the same level due to the timing of implementation compared with the prior year. Sharp reductions in the funding for health and human services and education initiatives in one of the states had a significant adverse impact on our third quarter revenue and invoiced amounts. While we remain hopeful that some of these funds will be restored in future periods, the timing and amount of this restored governmental funding remains uncertain. oConsolidated subscription and subscription services revenues for the third quarter of fiscal 2026 totaled $57.5 million compared with $57.7 million in the third quarter of fiscal 2025. For the quarter ended May 31, 2026, subscription and contractually committed invoiced amounts increased $5.3 million, or 17%, to $37.0 million compared with $31.7 million in the same period of fiscal 2025. oConsolidated deferred revenue on May 31, 2026, increased $6.7 million, or 7%, to $96.0 million compared with $89.3 million on May 31, 2025. oAs of May 31, 2026, 59% of our North America AAP contracts are for at least two years, compared with 58% at May 31, 2025, and the percentage of contracted amounts represented by multi-year contracts was 60% compared with 62% at May 31, 2025. oUnbilled deferred revenue on May 31, 2026, was $61.1 million compared with $62.0 million on May 31, 2025. Unbilled deferred revenue represents business that is contracted, but unbilled and therefore excluded from our balance sheet. The following is a summary of other unaudited consolidated financial information from the third quarter of fiscal 2026, which ended on May 31, 2026: 19 Table of Contents •Cost of Revenue/Gross Profit – For the quarter ended May 31, 2026, our cost of revenue totaled $17.7 million compared with $15.8 million in the prior year. Gross profit in the third quarter of fiscal 2026 was $50.1 million compared with $51.3 million in the prior year. The decrease in gross profit was primarily due to increased costs which led to a decline in our gross margin to 73.9% of revenue compared with 76.5% in the prior year. The decrease in our gross margin was primarily due to increased costs related to the delivery of training and coaching services, a change in the mix of services delivered and products sold during the quarter, and increased amortization of capitalized curriculum expense. •Operating Expenses – Our operating expenses for the quarter ended May 31, 2026 totaled $45.9 million, a $7.6 million decrease compared with the prior year. Reduced operating expenses were primarily the result of a $4.0 million reduction in restructuring charges and a $3.0 million decrease in selling, general, and administrative (SG&A) expenses, including a $0.7 million decrease in stock-based compensation. While we continued to execute on the long-term restructuring plan initiated in the second quarter of fiscal 2026, our restructuring activities were significantly less than in the third quarter of the prior year. SG&A expenses decreased primarily from ongoing restructuring and cost reduction activities which had a favorable impact on various areas of our operations. •Income Taxes – Our income tax provision for the quarter ended May 31, 2026, was $1.1 million on pre-tax income of $4.2 million, for an effective tax rate of 25.9%. In the third quarter of fiscal 2025, our income tax benefit was $0.7 million on a pre-tax loss of $(2.1) million, for an effective tax benefit rate of 33.8%. The effective tax rate for the third quarter of fiscal 2026 was lower than the effective tax benefit rate for the third quarter of the prior year primarily due to the impact of creditable foreign taxes. •Net Income and Adjusted EBITDA – For the third quarter of fiscal 2026, we recognized net income of $3.1 million, or $0.27 per diluted share, compared with a net loss of $(1.4) million, or $(0.11) per share, in the third quarter of fiscal 2025, reflecting the factors previously discussed. Our Adjusted EBITDA for the quarter ended May 31, 2026, increased $1.0 million, or 14%, to $8.3 million compared with $7.3 million in fiscal 2025. Foreign exchange rates had a $0.3 million favorable impact on our Adjusted EBITDA for the quarter ended May 31, 2026. •Liquidity and Financial Position – Our liquidity and financial position remained strong throughout the first three quarters of fiscal 2026. At May 31, 2026, we had over $74 million of available liquidity which consisted of $12.0 million of cash and our full available $62.5 million line of credit even after using $28.1 million of cash to purchase shares of our common stock for treasury during the first three quarters of fiscal 2026. Further details regarding our results for the quarter and three quarters ended May 31, 2026, are provided throughout the following Management’s Discussion and Analysis. Segment Results of Operations and Analysis Enterprise Division North America Segment The North America segment includes our personnel that serve clients in the United States and Canada. The following third quarter comparative information is for our North America segment in the periods indicated (in thousands): Quarter Ended Quarter Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 38,024 100.0 $ 37,054 100.0 $ 970 Cost of revenue 7,811 20.5 6,346 17.1 1,465 Gross profit 30,213 79.5 30,708 82.9 (495 ) SG&A expenses 22,465 59.1 24,507 66.1 (2,042 ) Adjusted EBITDA $ 7,748 20.4 $ 6,201 16.7 $ 1,547 20 Table of Contents The following comparative year-to-date information is for our North America segment in the periods indicated (in thousands): Three Quarters Three Quarters Ended Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 106,763 100.0 $ 111,711 100.0 $ (4,948 ) Cost of revenue 19,840 18.6 19,208 17.2 632 Gross profit 86,923 81.4 92,503 82.8 (5,580 ) SG&A expenses 67,985 63.7 72,715 65.1 (4,730 ) Adjusted EBITDA $ 18,938 17.7 $ 19,788 17.7 $ (850 ) Revenue. For the quarter ended May 31, 2026, North America segment revenue increased 3%, or $1.0 million, to $38.0 million. North America segment revenues were positively impacted by higher service revenue which was partially offset by lower recognized subscription revenue. Revenue from services and products for the third quarter of fiscal 2026 was $15.4 million, which was 9%, or $1.2 million, higher than the prior year. Revenue from subscription offerings totaled $22.0 million, which was 2%, or $0.5 million lower than the third quarter of fiscal 2025. Lower subscription revenues were primarily due to lower subscription invoiced amounts generated in prior periods. During the third quarter of fiscal 2026, North America subscription plus subscription services revenues were $34.3 million compared with $35.4 million in the prior year. However, we were encouraged by the overall growth in North America segment invoiced amounts during the third quarter, which totaled $36.7 million and was 4% higher than the amount invoiced in the third quarter of fiscal 2025. North America segment revenue for the three quarters ended May 31, 2026 decreased 4%, or $4.9 million, to $106.8 million. The decrease was primarily due to decreased subscription revenue and decreased service and products revenue. For the first three quarters of fiscal 2026, North America subscription plus subscription serviced revenues were $97.4 million, which was 6%, or $6.0 million, lower than the same period of fiscal 2025. However, invoiced amounts for the first three quarters of fiscal 2026 totaled $114.3 million, which was 6%, or $6.6 million, higher than the same period of the prior year. These invoiced amounts have added to our strong base of deferred revenue which will be recognized as revenue in future periods. We remain optimistic about the expected results of our new North America go-to-market strategy as our new North America sales structure is in place and executing on its directives. However, the continued uncertain macroeconomic environment may prevent us from achieving expected sales goals during fiscal 2026. Foreign exchange rates had an insignificant impact on North America revenues and operating results during the third quarter of fiscal 2026. Gross Profit. Gross profit for the third quarter of fiscal 2026 was adversely impacted by increased costs to deliver training and coaching services, a change in the mix of services delivered and products sold, and increased product amortization expense. As a result of these factors, North America gross margin for the third quarter slipped to 79.5% of revenue compared with 82.9% in the prior year. For the three quarters ended May 31, 2026, gross profit decreased primarily due to lower revenue as described above. North America gross margin for the first three quarters of fiscal 2026 declined to 81.4% from 82.8% in fiscal 2025 primarily due to the same issues cited for the third quarter decline. SG&A Expense. North America segment SG&A expenses for the quarter ended May 31, 2026 decreased $2.0 million, or 8%, to $22.5 million. For the three quarters ended May 31, 2026, North America segment SG&A expenses decreased $4.7 million, or 7%, to $68.0 million. Decreased SG&A expense was primarily due to reduced associate costs, which have been lowered by recent restructuring activities, and by other cost reduction initiatives that have reduced expenses in various other areas of North America segment operations. International Segment Our International segment consists of our directly owned international offices and our international licensees that provide our services and products in countries or regions that are not served by a directly owned office. Our directly owned international offices serve clients in Australia, Austria, China, France, Germany, Ireland, Japan, New Zealand, 21 Table of Contents Switzerland, and the United Kingdom. The following comparative information is for our International segment in the periods indicated (in thousands): Quarter Ended Quarter Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 10,052 100.0 $ 10,212 100.0 $ (160 ) Cost of revenue 2,436 24.2 2,343 22.9 93 Gross profit 7,616 75.8 7,869 77.1 (253 ) SG&A expenses 5,543 55.1 6,207 60.8 (664 ) Adjusted EBITDA $ 2,073 20.6 $ 1,662 16.3 $ 411 Three Quarters Three Quarters Ended Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 30,410 100.0 $ 30,685 100.0 $ (275 ) Cost of revenue 7,048 23.2 6,780 22.1 268 Gross profit 23,362 76.8 23,905 77.9 (543 ) SG&A expenses 17,829 58.6 20,340 66.3 (2,511 ) Adjusted EBITDA $ 5,533 18.2 $ 3,565 11.6 $ 1,968 Revenue. International segment revenue for the quarter ended May 31, 2026, decreased slightly compared with the third quarter of fiscal 2025 as growth from our licensee channel was offset by lower direct office revenues in the quarter. Licensee revenue in the third quarter increased 3% over the prior year but were offset by lower revenues in our China, Japan, and United Kingdom direct offices. Our offices in France and Australia each grew compared with the third quarter of fiscal 2025. Our China operations in the third quarter continued to be adversely impacted by ongoing trade tensions and broader macroeconomic uncertainty which have impacted prior periods in fiscal 2026. For the third quarter of fiscal 2026, foreign exchange rates had a $0.2 million favorable impact on revenues and a $0.1 million favorable impact on operating income. International segment revenues for the three quarters ended May 31, 2026, also decreased slightly when compared with the prior year. Increased sales at our offices in France and Australia were more than offset by decreased sales in China, Japan, and the United Kingdom. Licensee revenues for the first three quarters of fiscal 2026 were essentially flat year-over-year. For the first three quarters of fiscal 2026, foreign exchange rates had a $0.8 million favorable impact on revenues and a $0.2 million favorable impact on operating income. We continue to believe International segment revenues will improve in future periods as multiple international trade issues are resolved and economic conditions stabilize and strengthen. Gross Profit. Gross profit in the International segment for the third quarter of fiscal 2026 decreased primarily due to less revenue as previously described and decreased gross margin in the quarter. Gross margin for the quarter ended May 31, 2026, was 75.8% of revenue compared with 77.1% in fiscal 2025. Gross profit for the first three quarters of fiscal 2026 also declined due to decreased revenue and lower gross margins. Gross margin for the three quarters ended May 31, 2026, remained strong, but decreased to 76.8% compared with 77.9% in the prior year. Our international segment gross margins decreased in fiscal 2026 primarily due to the mix of services delivered and products sold, and increased direct costs to deliver programs in certain direct offices. SG&A Expenses. Third quarter fiscal 2026 International segment SG&A expenses decreased $0.7 million compared with the prior year. For the first three quarters of fiscal 2026, International segment SG&A expenses decreased $2.5 million compared with fiscal 2025. Reduced SG&A expense in our International segment was driven by ongoing cost reduction and efficiency initiatives which produced increased Adjusted EBITDA during fiscal 2026. 22 Table of Contents Education Division Our Education Division is comprised of our domestic and international Education practice operations (focused on sales to educational institutions) and includes our widely acclaimed Leader in Me program. The following comparative information is for our Education Division in the periods indicated (in thousands): Quarter Ended Quarter Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 18,998 100.0 $ 18,640 100.0 $ 358 Cost of revenue 7,062 37.2 6,413 34.4 649 Gross profit 11,936 62.8 12,227 65.6 (291 ) SG&A expenses 10,251 54.0 10,174 54.6 77 Adjusted EBITDA $ 1,685 8.9 $ 2,053 11.0 $ (368 ) Three Quarters Three Quarters Ended Ended May 31, % of May 31, % of 2026 Sales 2025 Sales Change Revenue $ 52,590 100.0 $ 50,169 100.0 $ 2,421 Cost of revenue 19,970 38.0 18,201 36.3 1,769 Gross profit 32,620 62.0 31,968 63.7 652 SG&A expenses 31,454 59.8 29,962 59.7 1,492 Adjusted EBITDA $ 1,166 2.2 $ 2,006 4.0 $ (840 ) Revenue. Education Division revenue for the quarter ended May 31, 2026, increased 2%, or $0.4 million, compared with the third quarter of the prior year. The increase in Education Division revenue was primarily due to increased subscription revenue, which was partially offset by decreased classroom and training materials sales. Education Division subscription revenue increased by 11% primarily due to the delivery of more training and coaching days, which are recognized as revenue when they are delivered. Total training and coaching days delivered in the third quarter increased by over 200 days compared with the prior year. The decrease in classroom and training materials was primarily due to state-wide initiatives in the prior year that did not repeat as a result of budget cuts or did not repeat at the same level due to the timing of implementation compared with the prior year. Funding for health and human services and education initiatives were sharply reduced in one of the states where we have a state-wide initiative, which had a significant adverse impact on our invoiced amounts, revenue, gross profit, and Adjusted EBITDA during the third quarter and for the three quarters ended May 31, 2026. We believe that a portion of these education funds will be restored in future periods, but the amount and certainty of the restored funding is dependent on legislative action in that state. Foreign exchange rates had an immaterial impact on Education Division revenue and operating results for the third quarter of fiscal 2026. Education Division revenue for the three quarters ended May 31, 2026, increased 5%, or $2.4 million, compared with the first three quarters of fiscal 2025. The increase in Education Division revenue was primarily due to increased subscription revenue, which was partially offset by decreased classroom and training materials sales. Education Division subscription revenue increased primarily due to the delivery of more training and coaching days. For the first three quarters of fiscal 2026 we delivered over 700 more coaching and training days than in the prior year. The decrease in classroom and training materials in the first three quarters of fiscal 2026 was primarily due to state-wide initiatives in the prior year that did not repeat as a result of budget cuts, as previously discussed, or did not repeat at the same level due to the timing of implementation compared with the prior year. We continue to be pleased with the strength and momentum of our Education Division, which added 624 new Leader in Me schools in a very challenging funding environment during fiscal 2025. At May 31, 2026, over 8,000 schools around the world were using the Leader in Me program. Gross Profit. For the quarter ended May 31, 2026, Education Division gross profit decreased primarily due to increased costs which resulted in lower gross margins. Our Education Division gross margin was 62.8% in the third quarter of fiscal 2026 compared with 65.6% in fiscal 2025. For the first three quarters of fiscal 2026, Education Division gross margin 23 Table of Contents was 62.0% compared with 63.7% in the first three quarters of the prior year. Our fiscal 2026 Education Division gross margins were adversely impacted by increased delivery, platform, product amortization, and materials costs combined with a change in the mix of services delivered and products sold when compared with the prior year. SG&A Expenses. For the quarter ended May 31, 2026, Education Division SG&A expenses increased primarily due to increased cost allocations from shared services and increased associate expenses from new personnel, including changes to compensation plans. For the first three quarters of fiscal 2026, Education Division SG&A expenses increased primarily due to increased commissions on previously deferred revenue and increased associate expenses from new personnel. Other Operating Expense Items Depreciation Expense – Our depreciation expense for the quarter ended May 31, 2026, increased $0.2 million to $1.2 million, compared with $1.0 million in the prior year. For the three quarters ended May 31, 2026, our depreciation expense was $3.4 million compared with $3.0 million in the first three quarters of fiscal 2025. The increase in our depreciation expense during fiscal 2026 was primarily due to assets acquired in connection with our new headquarters office. We currently anticipate that depreciation expense will total approximately $4.5 million in fiscal 2026. Amortization Expense – Our amortization expense from definite-lived intangible assets for the quarter ended May 31, 2026, decreased $0.5 million to $0.6 million compared with the third quarter of the prior year. For the three quarters ended May 31, 2026, our amortization expense totaled $2.0 million compared with $3.3 million in fiscal 2025. The decrease in our amortization expense was primarily due to the re-evaluation of the useful lives of content and license rights originally acquired in the merger with the Covey Leadership Center. These intangible assets continue to be some of our primary revenue and cash flow generating assets. Based on the re-evaluation of these intangible assets, we extended the useful lives of these assets by approximately 5 years. We currently anticipate our finite-lived intangible asset amortization expense will total $3.0 million in fiscal 2026. Interest Income – Our interest income for the quarter ended May 31, 2026, decreased $0.2 million compared with the prior year. For the first three quarters of fiscal 2026, our interest income decreased $0.6 million to $0.2 million. The decrease in interest income was primarily due to decreased cash and lower interest rates on those balances throughout fiscal 2026. Interest Expense – Interest expense for the third quarter of fiscal 2026 of $0.1 million decreased by $0.1 million compared with the prior year. For the three quarters ending May 31, 2026, our interest expense decreased $0.2 million to $0.2 million compared with the prior year. The decrease in our interest expense during fiscal 2026 was primarily due to decreased debt balances compared with the prior year as payments have been made in the normal course of business. Income Taxes Our income tax provision for the quarter ended May 31, 2026, was $1.1 million on pre-tax earnings of $4.2 million, for an effective tax rate of 25.9%. In the third quarter of fiscal 2025, our income tax benefit was $0.7 million on a pre-tax loss of $(2.1) million, for an effective tax benefit rate of 33.8%. For the three quarters ended May 31, 2026, our income tax expense totaled $0.7 million on a pre-tax loss of $(1.5) million. In the first three quarters of fiscal 2025, our income tax benefit totaled $0.6 million on a pre-tax loss of $(1.9) million. The change in our income tax expense/benefit between periods is primarily due to the impact of stock‑based compensation. Because we reported pre‑tax losses in both periods, the resulting effective tax rates are not considered meaningful or indicative of our expected annual effective tax rate. We currently estimate that our effective tax rate will normalize during the remainder of fiscal 2026 to approximately 41%, which is higher than normal statutory rates primarily due to non-deductible stock based compensation. We paid $0.4 million of cash for taxes during the three quarters ended May 31, 2026. Our cash paid for taxes in the first three quarters of fiscal 2026 was significantly less than cash paid in fiscal 2025 primarily due to payments made for the 24 Table of Contents fiscal 2024 income tax provision, which was significantly larger than the fiscal 2025 tax provision. We anticipate our total cash paid for income taxes over the coming years will approximate our total income provision on an annual basis. LIQUIDITY AND CAPITAL RESOURCES Introduction At May 31, 2026, we had over $74 million of available liquidity, which consisted of $12.0 million in cash combined with our full available $62.5 million revolving credit facility. Of our $12.0 million of cash on May 31, 2026, $6.0 million was held outside the U.S. by our foreign subsidiaries. We routinely repatriate cash from our foreign subsidiaries and consider cash generated from foreign activities a key component of our overall liquidity position. Our primary sources of liquidity are cash flows from the sale of services and products in the normal course of business and available proceeds from our credit facility. Our primary uses of liquidity include payments for operating activities, opportunistic purchases of our common stock, working capital expansion, and capital expenditures (including curriculum development). We previously entered into a credit agreement (the 2023 Credit Agreement) with KeyBank National Association leading a group of financial institutions. The 2023 Credit Agreement provides up to $70.0 million in total credit, of which $7.5 million was used to replace the outstanding term loan balance from the previous credit agreement. The remaining $62.5 million is available as a revolving line of credit or for future term loans. The 2023 Credit Agreement matures on March 27, 2028. As defined in the 2023 Credit Agreement, we are (i) required to maintain a Leverage Ratio of less than 3.00 to 1.00 and a Fixed Charge Coverage Ratio greater than 1.15 to 1.00; and (ii) we are restricted from making certain distributions to stockholders, including repurchases of common stock. However, we are permitted to make distributions, including through purchases of outstanding common stock, provided that we are in compliance with the Leverage Ratio and Fixed Charge Coverage Ratio financial covenants before and after such distribution. At May 31, 2026, we believe that we were in compliance with the terms and covenants contained in the 2023 Credit Agreement. The following discussion is a description of the primary factors affecting our cash flows and their effects upon our liquidity and capital resources during the three quarters ended May 31, 2026. Cash Flows Provided By Operating Activities Our primary source of cash from operating activities was the sale of services to our customers in the normal course of business. Our primary uses of cash for operating activities were payments for SG&A expenses, direct costs necessary to conduct training programs, to fund working capital changes, and to suppliers for materials used in training manuals sold. Our cash provided by operating activities during the first three quarters of fiscal 2026 was $17.5 million compared with $19.0 million in fiscal 2025. The slight decrease in cash flows from operating activities was primarily attributable to lower operating income and unfavorable changes in working capital balances compared with the first three quarters of fiscal 2025. While we expect our cash flows from operating activities will improve during the fourth quarter of fiscal 2026, certain conditions are beyond our control, including ongoing difficulties in the macroeconomic environment, geopolitical tensions, and further governmental actions, and our cash flows from operating activities may be less than our current expectations. Cash Flows Used For Investing Activities and Capital Expenditures During the first three quarters of fiscal 2026, our cash used for investing activities totaled $9.0 million. Our primary uses of cash for investing activities consisted of additional investments in the development of our offerings and purchases of property and equipment in the normal course of business. Through May 31, 2026, we spent $5.1 million on the development of our various offerings and related content. We believe continued investment in our offerings and content is key to future growth and the development of our business. We currently expect that our cash used for curriculum development will total between approximately $6 million and $8 million in fiscal 2026. Certain projects previously expected to be developed during fiscal 2026 were postponed and are 25 Table of Contents now expected to be developed in fiscal 2027, which may increase our overall spending for curriculum development in the future. Our cash used for purchases of property and equipment during the first three quarters of fiscal 2026 totaled $3.9 million and consisted primarily of leasehold improvements on our new corporate headquarters, and computer software and hardware. We currently anticipate that our cash used for purchases of property and equipment will total between approximately $5 million and $7 million in fiscal 2026. Cash Flows Used For Financing Activities For the three quarters ended May 31, 2026, our net cash used for financing activities totaled $28.1 million. Our primary uses of financing cash was $28.1 million used to purchase shares of our common stock, which consisted of shares purchased on the open market and shares withheld for income taxes on stock-based compensation awards (Note 2), and $0.8 million used for the final payment for the purchase of Strive. Partially offsetting our uses of cash for financing activities were $0.9 million of proceeds received from our ESPP participants to purchase shares of common stock during the first three quarters of fiscal 2026. We utilized proceeds from our available line of credit to facilitate purchases of common stock during the second quarter of fiscal 2026. However, we repaid the outstanding balance on the line of credit prior to the end of the second quarter. On April 18, 2024, our Board of Directors approved a plan to purchase up to $50.0 million of our outstanding common stock. On August 11, 2025, the Board of Directors approved a replenishment of the plan to purchase up to $50.0 million of common stock. On August 14, 2025, we initiated a 10b5-1 plan to purchase up to $10.0 million of our common stock through daily transactions. This 10b5-1 plan was completed in October 2025. On November 17, 2025, we initiated a new 10b5-1 plan to purchase up to $20.0 million of our common stock through daily transactions. This purchase plan was completed in January 2026. Our uses of financing cash during the remainder of fiscal 2026 may include purchases of our common stock. However, the timing and amount of common stock purchases is dependent on a number of factors, including available resources, and we are not obligated to make purchases of our common stock during any future period except as required by any outstanding 10b5-1 purchase plan. Sources of Liquidity We expect to pay the liabilities from our leases; pay for projected capital expenditures; and meet other obligations in fiscal 2026 and beyond from current cash balances and future cash flows from operating activities. Going forward, we will continue to incur costs necessary for the day-to-day operation of the business and may use additional credit and other financing alternatives, if necessary, for these expenditures. We have a credit agreement (the 2023 Credit Agreement) which we expect to renew and amend on a regular basis to maintain the long-term borrowing capacity of this credit facility. Additional potential sources of liquidity available to us include factoring receivables, issuance of additional equity, or issuance of debt to public or private sources. If necessary, we will evaluate all of these options and select one or more of them depending on overall capital needs and the associated cost of capital. We believe that our existing cash and cash equivalents, cash generated by operating activities, and the availability of external funds as described above, will be sufficient for us to maintain our operations for at least the upcoming 12 months. However, our ability to maintain adequate capital for our operations in the future is dependent upon a number of factors, including sales trends, macroeconomic activity, our ability to contain costs, levels of capital expenditures, collection of accounts receivable, opportunistic purchases of our common stock, and other factors. Some of the factors that influence our operations are not within our control, such as general economic conditions, business conditions in international locations, geopolitical tensions in various locations, and the introduction of new offerings or technology by our competitors. We will continue to monitor our liquidity position and may pursue additional financing alternatives, as described above, to maintain sufficient resources for future growth and capital requirements. However, there can be no assurance such financing alternatives will be available to us on acceptable terms, or at all. 26 Table of Contents Material Uses of Cash and Contractual Obligations We do not operate any manufacturing, mining, or other capital-intensive facilities, and we have not structured any special purpose entities, or participated in any commodity trading activities, which would expose us to potential undisclosed liabilities or create adverse consequences to our liquidity. However, we have normal ongoing cash expenditures and are subject to various contractual obligations that are required to run our business. Our material cash requirements include the following: •Associate and Consultant Compensation •Information Technology Expenditures •Content Development Costs •Income Taxes •Other Contractual Obligations These material cash requirements are discussed in more detail in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report. During the quarter ended May 31, 2026, there have been no material changes to our expected uses of cash and contractual obligations from those discussed in our Annual Report. However, current economic conditions and other forecasts may change and could alter our expected material uses of cash in future periods. For further information on our material uses of cash and contractual obligations, refer to the information included in our Annual Report. CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements were prepared in accordance with GAAP. For information on our critical accounting policies, see “Critical Accounting Estimates” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report. Refer to those disclosures for further information regarding our uses of estimates and critical accounting policies. There have been no significant changes to our previously disclosed estimates or critical accounting policies. Estimates Some of the accounting guidance we use requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements. We regularly evaluate our estimates and assumptions and base those estimates and assumptions on historical experience, factors that are believed to be reasonable under the circumstances, and requirements under GAAP. Actual results may differ from these estimates under different assumptions or conditions, including changes in economic conditions and other circumstances that are not within our control, but which may have an impact on these estimates and our actual financial results. NEW ACCOUNTING PRONOUNCEMENTS Refer to Note 1 to our unaudited condensed consolidated financial statements for a description of new accounting pronouncements that may impact us. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements made by the Company in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 as amended (the Exchange Act). Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “project,” or words or phrases of similar meaning. In our reports and filings we may make forward-looking statements regarding, among other things, our expectations about future revenue levels and financial results, our financial performance during fiscal 2026, anticipated improvement in International segment revenues, our expectations regarding a new go-to-market strategy, expected future cash flows, future training and consulting revenue, expected increases in add-on subscription services revenue and delivered training and coaching days, anticipated renewals of 27 Table of Contents subscription offerings, our ability to hire sales professionals, the amount and timing of capital expenditures, anticipated expenses, including SG&A expenses, depreciation, and amortization, future gross margins, the release of new services or products, the adequacy of existing capital resources, our ability to renew or extend our line of credit facility, expected effective income tax rates and cash paid for income taxes, our ability to maintain adequate capital for our operations for at least the upcoming 12 months, the expected impact of the resolution of significant macroeconomic issues and geopolitical tensions, the seasonality of future revenues, future compliance with the terms and conditions of our line of credit, the ability to borrow on our line of credit, expected collection of accounts receivable, estimated capital expenditures, and cash flow estimates used to determine the fair value of long-lived assets. These, and other forward-looking statements, are subject to certain risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are disclosed from time to time in reports filed by us with the SEC, including reports on Forms 8-K, 10-Q, and 10-K. Such risks and uncertainties include, but are not limited to, the matters discussed in Item 1A of our Annual Report, entitled “Risk Factors.” In addition, such risks and uncertainties may include unanticipated developments in any one or more of the following areas: cybersecurity risks; macroeconomic risks; litigation; unanticipated costs or capital expenditures; delays or unanticipated outcomes relating to our strategic plans; dependence on existing products or services; the rate and consumer acceptance of new product introductions, including the All Access Pass; competition; the impact of foreign exchange rates; the number and nature of customers and their product orders, including changes in the timing or mix of product or training orders; pricing of our products and services and those of competitors; adverse publicity; and other factors which may adversely affect our business. The risks included here are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors may emerge and it is not possible for our management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any single factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. Given these risks and uncertainties, investors should not rely on forward-looking statements as a prediction of actual results. The market price of our common stock has been and may remain volatile. In addition, stock markets in general have experienced significant volatility. Factors such as quarter-to-quarter variations in revenues and earnings or losses and our failure to meet expectations could have a significant impact on the market price of our common stock. In addition, the price of our common stock can change for reasons unrelated to our performance, such as government actions on spending and trade. Due to our low market capitalization, the price of our common stock may also be affected by conditions such as a lack of analyst coverage, and fewer potential investors. Forward-looking statements are based on management’s expectations as of the date made, and we do not undertake any responsibility to update any of these statements in the future except as required by law. Actual future performance and results will differ and may differ materially from that contained in or suggested by forward-looking statements as a result of the factors set forth in this Management’s Discussion and Analysis and elsewhere in our filings with the SEC.