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”. General Skillsoft® provides a skills management platform and associated learning solutions that are designed to help organizations manage the human and artificial intelligence (“AI”) skills lifecycle, including visibility into the skills they have and the skills they need, closing skills gaps, matching skills to work, and understanding how skills development impacts business performance. In fiscal 2026, we evolved from a content-centric model to an integrated skills management platform, where we leveraged our market-leading curated learning content and connected it to capabilities in content creation, skills benchmarking, AI-assisted learning, and role-based development journeys. We believe that Skillsoft’s unique capabilities, described below, set us apart as a trusted partner for workforce transformation and preparedness: ● End-to-End Skills Management: A unified platform that combines content, skills mapping, benchmarking, analytics, and administrative controls to support workforce skill visibility, development, validation, and deployment. ● Blended Learning Experiences Across Modalities: Digital courses, interactive AI simulations, coaching, instructor-led training, bootcamps, practice labs, and assessments delivered within a centralized learner and administrative experience designed to support applied skill development. ● In-Platform Content Creation: Enterprise tools designed to enable customers to create, customize, update, and publish learning experiences, including courses, simulations, and skill benchmarks, while maintaining intellectual property (“IP”) protection and governance over their proprietary content. ● Embedded AI Functionality: AI capabilities integrated into personalization, simulation, benchmarking, content creation, and learner assistance within enterprise learning frameworks. ● Enterprise-Scale Infrastructure: Security, compliance capabilities, and system integrations designed to support large, distributed organizations operating across regions and regulatory environments. ● Measurement and Insights: Benchmarking and analytics that help to provide visibility into workforce capability, identified skills gaps, and development progress in relation to organizational priorities. For more details, refer to “Part I – Item 1. Business” in our 2026 Form 10-K. Significant Event On April 30, 2026, we committed to a plan to sell our Global Knowledge instructor-led training (“GK”) business. As previously disclosed, we entered into a definitive agreement (the “Sale Agreement”) on May 20, 2026 to sell our GK business to an affiliate of Enduring Ventures (the “Buyer”), representing a significant milestone in our transformation. The consideration that we are to receive under the Sale Agreement is described in detail in our Current Report on Form 8-K dated May 21, 2026. The transaction is subject to customary closing conditions, including regulatory approvals, and is currently expected to close in the fiscal quarter ending July 31, 2026, although we cannot assure closing in a timely manner, or at all. Results of Operations Our results of operations as reported in our Interim Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The following sets forth certain items from our unaudited condensed consolidated statements of operations as a percentage of total revenues for the periods indicated: Three Months Ended April 30, 2026 2025 Revenues: Total revenues 100.0 % 100.0 % Operating expenses: Costs of revenues 16.8 % 16.7 % Content and software development expenses 13.8 % 13.4 % Selling and marketing expenses 28.5 % 30.0 % General and administrative expenses 17.0 % 19.4 % Amortization of intangible assets 31.3 % 30.4 % Acquisition and integration related costs 0.0 % 0.5 % Restructuring 1.4 % 1.0 % Total operating expenses 108.8 % 111.4 % Operating loss (8.8 )% (11.4 )% Other income (expense), net 2.7 % (0.9 )% Fair value adjustment of interest rate swaps 1.3 % (4.3 )% Interest income 0.6 % 0.5 % Interest expense (14.5 )% (14.5 )% Income (loss) before provision for (benefit from) income taxes (18.7 )% (30.6 )% Provision for (benefit from) income taxes 1.1 % (0.7 )% Income (loss) from continuing operations (19.8 )% (29.9 )% 20 Table of Contents Segment Information 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. Information regarding our TDS segment for the periods indicated is set forth below (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Revenues $ 94,498 $ 99,148 $ (4,650 ) (4.7 )% Adjusted costs of revenues 15,739 16,271 (532 ) (3.3 )% Adjusted content and software development expenses 12,674 12,097 577 4.8 % Adjusted selling and marketing expenses 26,270 28,666 (2,396 ) (8.4 )% Adjusted general and administrative expenses 13,175 15,275 (2,100 ) (13.7 )% Adjusted EBITDA $ 26,640 $ 26,839 $ (199 ) (0.7 )% Revenues We provide enterprise customers with subscription-based access to learning skills development delivered through two platform offerings: (i) our enterprise-focused Skills Management Platform, which provides organizations with subscription-based access to learning and workforce capability development tools, and (ii) our Learner Platform, which provides interactive, practice-based technology skill development experiences for individual learners. 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. Our Learner Platform provides interactive, practice-based experiences focused primarily on technology skill development. The platform supports direct-to-consumer selling and delivery options, offering hands-on learning environments that emphasize applied skill development. The technology underlying this platform has also been deployed as an extension of our Skills Management Platform to support enterprise customers. Subscription and Professional Services and Other Revenues 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. Professional Services and Other Revenue. Professional services revenue primarily consists of implementation, integration, consulting, and other services provided to customers in connection with deployment and optimization of our learning and talent development solutions. Other revenue consists of revenue streams that are ancillary to our core offerings, including project-based work and related one-time incidentals. The professional services and other revenue non-subscription services complement our subscription business in creating strong and comprehensive customer relationships. The following is a summary of our net revenues by type for the periods indicated (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change SaaS and subscription services: Enterprise $ 81,443 $ 84,684 $ (3,241 ) (3.8 )% Consumer 7,087 8,971 (1,884 ) (21.0 )% Professional services and other 5,968 5,493 475 8.6 % Total net revenues $ 94,498 $ 99,148 $ (4,650 ) (4.7 )% 21 Table of Contents Total revenue decreased for the three months ended April 30, 2026 compared with the three months ended April 30, 2025, primarily due to macroeconomic uncertainty and elongated enterprise purchasing cycles, including within certain government-related end markets, which contributed to more cautious discretionary spending on learning and development initiatives during the first quarter of fiscal 2027, as well as declines in our consumer business reflecting continued moderation in demand for direct-to-consumer offerings. Operating Expenses Summary of operating expenses The following provides select operating expenses (in thousands, except percentages), which are discussed in the associated captions that immediately follow: Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Costs of revenues $ 15,889 $ 16,516 $ (627 ) (3.8 )% Content and software development expenses 13,052 13,324 (272 ) (2.0 )% Selling and marketing expenses 26,960 29,748 (2,788 ) (9.4 )% General and administrative expenses 15,994 19,182 (3,188 ) (16.6 )% Amortization of intangible assets 29,561 30,106 (545 ) (1.8 )% Acquisition and integration related costs — 523 (523 ) (100.0 )% Restructuring 1,341 1,016 325 32.0 % Total operating expenses $ 102,797 $ 110,415 $ (7,618 ) (6.9 )% Costs of revenues 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): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Compensation and benefits $ 7,787 $ 8,101 $ (314 ) (3.9 )% Courseware, instructor fees and outside services 5,036 5,531 (495 ) (8.9 )% Hosting and software maintenance 2,925 2,748 177 6.4 % Facilities, utilities and other 141 136 5 3.7 % Total costs of revenues $ 15,889 $ 16,516 $ (313 ) (1.9 )% 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 comparing the 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. Content and software development expenses Content and software development expenses include costs associated with the development of new products and the enhancement of existing products, consisting primarily of employee salaries and benefits; development-related professional services; facilities costs; depreciation; and software maintenance costs. The following provides details regarding the changes in components of content and software development expenses (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Compensation and benefits $ 10,032 $ 10,179 $ (147 ) (1.4 )% Consulting and outside services 1,397 1,569 (172 ) (11.0 )% Software maintenance 1,403 1,346 57 4.2 % Facilities, utilities and other 220 230 (10 ) (4.3 )% Total content and software development expenses $ 13,052 $ 13,324 $ (272 ) (2.0 )% 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 the three months ended April 30, 2026 to the prior year period, are primarily due to cost savings from our restructuring initiatives. Hosting and software maintenance increased year-over-year, primarily reflecting increasing third-party costs. 22 Table of Contents Selling and marketing expenses Selling and marketing (“S&M”) expenses consist primarily of employee compensation and benefits for selling, marketing and pre-sales support personnel; commissions and travel expenses; advertising and promotional expenses; consulting and outside services; facilities costs; depreciation; and software maintenance costs. The following provides details regarding the changes in components of S&M expenses (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Compensation and benefits $ 20,055 $ 23,573 $ (3,518 ) (14.9 )% Advertising and promotions 3,978 3,080 898 29.2 % Software maintenance 2,331 2,553 (222 ) (8.7 )% Consulting and outside services 365 401 (36 ) (9.0 )% Facilities, utilities and other 231 141 90 63.8 % Total S&M expenses $ 26,960 $ 29,748 $ (2,788 ) (9.4 )% 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 attributable to higher investments in targeted demand generation and marketing programs. General and administrative General and administrative (“G&A”) expenses consist primarily of employee salaries and benefits for executive, finance, administrative, and legal personnel; audit, legal and consulting fees; insurance; franchise, sales and property taxes; facilities costs; and depreciation. The following provides details regarding the changes in components of G&A expenses (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Compensation and benefits $ 10,170 $ 11,525 $ (1,355 ) (11.8 )% Consulting and outside services 4,100 5,848 (1,748 ) (29.9 )% Insurance 485 532 (47 ) (8.8 )% Facilities, utilities and other 214 95 119 125.3 % Software maintenance 742 976 (234 ) (24.0 )% Franchise, sales, and property tax 283 206 77 37.4 % Total G&A expenses $ 15,994 $ 19,182 $ (3,188 ) (16.6 )% 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. Amortization of intangible assets Intangible assets arising from business combinations consist of developed technology, customer-related intangibles, trade names and other identifiable intangible assets with finite lives. These intangible assets are amortized over the estimated useful lives of such assets. We also capitalize certain internal use software development costs related to our SaaS platforms incurred during the application development stage. The internal use software is amortized on a straight-line basis over its estimated useful life. 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. Impairment of goodwill and intangible assets 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. Acquisition and integration related costs Acquisition and integration related costs consist of professional fees for legal, investment banking and other advisor costs incurred in connection with the business combinations completed in April 2022 and the subsequent integration related activities. Changes in these costs primarily reflect fluctuations in the level of integration activities incurred during each period. Restructuring 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. In addition, the sale of our GK business may include additional workforce reductions, facility closures and consolidations, the exit or modification of certain contracts, and/or other actions intended to improve operating efficiency or rationalize our cost structure, any or all of which may be material. We will continue to evaluate our cost structure and operating model to align operating expenses with existing economic conditions, which could result in further restructuring actions. 23 Table of Contents Interest and other Interest and other, net, consists of gain or loss on derivative instruments, interest income, interest expense, and other expenses and income (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Other income (expense), net $ 2,606 $ (917 ) $ 3,523 (384.2 )% Interest income 545 468 77 16.5 % Interest expense (13,748 ) (14,396 ) 648 (4.5 )% 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. Fair value adjustment of interest rate swaps We entered into two fixed-rate interest rate swap agreements on June 17, 2022 for a combined notional amount of $300 million and a maturity date of June 5, 2027. The objective of the interest rate swaps is to eliminate fluctuations in cash flows for interest payments on $300 million of variable rate debt attributable to changes in the benchmark one-month Secured Overnight Financing Rate (“SOFR”) interest rates. The interest rate swaps are not designated for hedge accounting and are carried on the unaudited condensed consolidated balance sheets at their fair value. Unrealized gains and losses from changes in fair value of the interest rate swaps, which arise from variations in the forward-looking yield curve, are included in the caption “fair value adjustment of interest rate swaps” in the statements of operations as they occur. 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. Provision for (benefit from) income taxes The following provides select provision for (benefit from) income taxes information (in thousands, except percentages): Three Months Ended April 30, Dollar Increase Percent 2026 2025 (Decrease) Change Provision for (benefit from) income taxes $ 1,044 $ (741 ) $ 1,785 (240.9 )% Effective income tax rate (5.9 )% 2.4 % 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. Liquidity and Capital Resources Liquidity and sources of cash 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 subject to certain qualifications and exceptions, which are expected to permit distributions to enable us to make required principal and interest payments on our indebtedness. However, in the event we are not able to receive cash from our subsidiaries, we will be unable to make the required payments. In addition, although we anticipate we will be able to refinance outstanding obligations under our credit agreement prior to or when they mature, there can be no assurance we will be able to do so, or that the terms of any refinancing will be favorable. Further, we may require additional capital in the future to fund capital expenditures, acquisitions (including contingent consideration payments), strategic transactions or other investments. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our objectives, operating performance, economic and capital market conditions and other relevant circumstances. Our operating cash flow performance may also be affected by matters discussed under "Risk Factors" in Part I, Item 1A of our 2026 Form 10-K and in this Form 10-Q. These risks and uncertainties may adversely affect our long-term liquidity. 24 Table of Contents Term Loans On July 16, 2021, Skillsoft Finance II, Inc. (“Skillsoft Finance II”), a subsidiary of Skillsoft Corp., entered into a Credit Agreement (the “Credit Agreement”), by and among Skillsoft Finance II, as borrower, another subsidiary - Skillsoft Finance I, Inc. (“Holdings”), the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, pursuant to which the lenders provided term loans in the original principal amount of $480 million (“Original Term Loans”), which were drawn in full on the closing date thereof and are scheduled to mature on July 16, 2028 (the “Maturity Date”). In connection with the closing of our Codecademy acquisition, Skillsoft Finance II entered into Amendment No. 1 to the Credit Agreement, dated as of April 4, 2022 (the “First Amendment”), among Skillsoft Finance II, Holdings, certain subsidiaries of Skillsoft Finance II, as guarantors, Citibank N.A., as administrative agent, and the financial institutions party thereto as Term B-1 Lenders, which amended the Credit Agreement (as amended by the First Amendment, the “Amended Credit Agreement”). 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. Prior to the maturity thereof, the Initial Term Loans are subject to aggregate quarterly amortization payments of $1.6 million. The proceeds of the Term B-1 Loans were used by Skillsoft to finance, in part, the Codecademy acquisition, and to pay costs, fees, and expenses related thereto. 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. 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. The Amended Credit Agreement contains customary events of default. If an event of default occurs and is continuing (and is not waived), the administrative agent may declare all amounts outstanding thereunder to be immediately due and payable. In the event of payment or other specified defaults, outstanding obligations accrue interest at the then applicable rate plus 2.00%. All obligations under the Amended Credit Agreement, and the guarantees of those obligations, are secured by substantially all of Skillsoft Finance II’s personal property as well as the assets of each subsidiary guarantor. Accounts Receivable Facility 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. 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. When borrowing more than the minimum, the lenders require us to deposit receipts from pledged receivables to a restricted bank account within two business days of receipt. A reconciliation detailing collections against the prior month’s borrowing base and additional receivables to be pledged is submitted monthly. If additional pledged receivables exceed the prior month’s collections, funds from the restricted bank account are returned to us. 25 Table of Contents Currently Out of Compliance with the NYSE’s Continued Listing Standards On March 26, 2026, we received the Notice from the NYSE that we were no longer in compliance with the Market Cap Standard, each as defined and described in detail (including potential adverse consequences to our stockholders) in the following risk factor in Part I, Item 1A. Risk Factors of our 2026 Form 10-K,: “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.” The Notice had no immediate impact on the listing of our common stock. While we are not aware of any single event or development that directly caused the decline in our market capitalization, we believe that our stock price has been affected by a combination of factors, including heightened market volatility associated with recent geopolitical and macroeconomic developments, a broader decline in valuations and investor sentiment across portions of the corporate learning, talent development and education technology sectors, corporate and government spending sensitivity in response to macroeconomic conditions, a slowdown in demand for live upskilling, which contributed to the recent operating performance of our discontinued operations, and relatively low trading volume in our common stock. 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. The Notice did not affect our business operations or our reporting obligations with the SEC, and it does not conflict with or cause an event of default under any of Skillsoft’s material debt or other agreements. Share Repurchase Authorization On July 10, 2024, the Board approved a share repurchase authorization for up to $10 million of Skillsoft’s outstanding shares of common stock. The share repurchase authorization commenced on July 11, 2024, and will terminate on the fourth anniversary of such date. Under the share repurchase authorization, we may purchase shares of common stock from time to time in the open market, in private negotiated transactions, or by other means. We cannot predict when or if we will repurchase any shares of common stock. The timing and number of shares of common stock that may be purchased will depend on a variety of factors, including the share price of the common stock, general market conditions, alternative uses for capital, our financial performance, and other considerations. This authorization does not obligate us to purchase any minimum number of shares of common stock, and the authorization may be suspended, modified, or discontinued at any time without prior notice. As of April 30, 2026, no common stock had been repurchased under the share repurchase authorization. Cash Flows 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): Dollar Three Months Ended April 30, Increase Percent 2026 2025 (Decrease) Change Net cash provided by (used in) operating activities $ 28,940 $ 31,298 $ (2,358 ) (7.5 )% Net cash provided by (used in) investing activities (3,501 ) (5,134 ) 1,633 (31.8 )% Net cash provided by (used in) financing activities (3,316 ) (1,953 ) (1,363 ) 69.8 % Effect of foreign currency exchange rates on cash and cash equivalents (356 ) 3,384 (3,740 ) (110.5 )% Net increase (decrease) in cash and cash equivalents and restricted cash $ 21,767 $ 27,595 $ (5,828 ) (21.1 )% 26 Table of Contents Cash flows provided by (used in) operating activities 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 operations and the timing of working capital settlements. Cash flows provided by (used in) investing activities 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. Cash flows provided by (used in) financing activities 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. 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. Effect of foreign currency exchange rates on cash and cash equivalents The effect of exchange rate changes on cash and cash equivalents represents translation adjustments, which vary with fluctuations in foreign currency exchange rates relative to the U.S. dollar. 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. Contractual and Commercial Obligations The scheduled future principal payments for maturities of our debt and future minimum rental commitments under non-cancelable lease agreements as of April 30, 2026 were as set forth below (in thousands): Payments due by Fiscal Year Total Remainder of 2027 2028-2029 2030-2031 Thereafter Initial Term Loans $ 580,192 $ 3,202 $ 576,990 * $ — $ — Operating leases 6,917 1,025 2,626 1,371 1,896 Total $ 587,109 $ 4,227 $ 579,616 $ 1,371 $ 1,896 * The maturity date for the Initial Terms Loans is July 16, 2028, which occurs in fiscal 2029. Contingencies From time to time, we are a party to or may be threatened with litigation in the ordinary course of our business. We regularly analyze the then current information, including, as applicable, our defense and insurance coverage and, as necessary, provide accruals for probable and estimable liabilities for the eventual disposition of these matters. For information regarding legal proceedings see Note 6 to the Interim Financial Statements. Critical Accounting Estimates 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. Significant accounting policies and methods used in the preparation of the Interim Financial Statements are described in Note 2 “Summary of Significant Accounting Policies” to the 2026 AFS and Note 2 to the Interim Financial Statements. The following is a discussion of accounting estimates which management considers to be “critical,” defined as accounting estimates made in accordance with GAAP that involve a significant level of estimation uncertainty, and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. 27 Table of Contents Revenue recognition Skillsoft enters into contracts that provide customers with access to a broad spectrum of learning and talent development solutions, including cloud-based learning content, talent development and skills management solutions, and individualized coaching. We recognize revenue that reflects the consideration that we expect to be entitled to receive in exchange for these services. We apply judgment in determining our customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience, credit, or financial information. We are not required to exercise significant judgment in determining the timing for the satisfaction of performance obligations or the transaction price. While the majority of our revenue relates to SaaS and subscription services where the entire arrangement fee is recognized on a straight-line basis over the contractual term, we sometimes enter into contractual arrangements that have multiple distinct performance obligations, one or more of which have different periods over which the services or products are delivered. These arrangements may include a combination of subscriptions and non-subscription products such as professional services. We allocate the transaction price of the arrangement based on the relative estimated standalone selling price of each distinct performance obligation. Our cloud-based solutions generally do not provide customers with the right to take possession of the software supporting the platform or to download course content without continuing to incur fees for hosting services and, as a result, are accounted for as service arrangements. Access to the platform and course content represents a series of distinct services as we continually provide access to, and fulfill our obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date the service is made available to the customer. Our subscription contracts typically vary from one year to three years. Our cloud-based solutions arrangements are generally non-cancellable and non-refundable. Revenue from classroom training and individual coaching is recognized in the period in which the services are rendered. We also sell professional services related to our cloud solutions which are typically considered distinct performance obligations and are recognized over time as services are performed. For fixed-price contracts, revenue is recognized over time based on a measure of progress that reasonably reflects our advancement toward satisfying the performance obligation. Reimbursements received from customers for out-of-pocket expenses are recorded as revenues, with related costs recorded as costs of revenues. We present revenues net of any taxes collected from customers and remitted to government authorities. As our contractual agreements predominantly call for advanced billing, contract assets are rarely generated. Intangible assets, including goodwill We recognize the excess of the purchase price, plus the fair value of any noncontrolling interest in an acquiree, over the fair value of identifiable net assets acquired, which includes the fair value of specifically identifiable intangible assets, as goodwill. We amortize finite-lived intangible assets, including customer contracts and internally developed software, over their estimated useful life. We review the carrying values of intangible assets subject to amortization at least annually to determine if any adverse conditions exist or a change in circumstances has occurred that indicates impairment or a change in remaining useful life. Conditions that indicate impairment and trigger a more frequent impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator. In addition, we review the carrying values of our indefinite-lived intangible assets, including goodwill and the Skillsoft trademark, during the fourth quarter of each fiscal year for impairment, or more frequently if certain indicators are present or changes in circumstances suggest that impairment may exist and reassess their classification as indefinite-lived assets. The fair value of our indefinite-lived trademark intangible is determined using an income approach referred to as the relief-from-royalty method. The relief-from-royalty method requires management to estimate the portion of our earnings attributable to this trademark based on a royalty rate we would have paid for the use of the asset if we did not own it. The determination of fair value involves significant estimates and assumptions, including projected revenue growth rates, the royalty savings rate, and the discount rate applied to future cash flows, which are forward-looking and could be affected by future economic and market conditions. Changes in these key assumptions could materially affect the estimated fair value of the indefinite-lived trademark intangible asset and result in future impairment charges. If current discount rates rise or if relevant market-based inputs for our impairment assessment worsen, subsequent reviews of goodwill and intangibles could result in impairment. Factors that could result in future impairment include, but are not limited to, the following: ● Prolonged period of our estimated fair value of our reporting unit exceeding our market capitalization; ● Lower expectations for future profitability of bookings or EBITDA (a non-GAAP measure), which in part could be impacted by legislative, regulatory or tax changes that affect the cost of, or demand for, products and services as well as the loss of key personnel; ● Deterioration in key assumptions used in our income approach estimates of fair value, such as higher discount rates from higher stock market volatility; and ● Valuations of significant mergers or acquisitions of companies that provide relevant market-based inputs for our impairment assessment that could support less favorable conclusions regarding the estimated fair value of our reporting unit. 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. Income taxes As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the tax jurisdictions in which we operate. This process involves estimating our actual current tax obligations together with assessing temporary differences between the basis of assets and liabilities for financial reporting purposes as compared to tax purposes. We provide for deferred income taxes resulting from such temporary differences, using rates expected to be in effect when such differences reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. Determining the amount of valuation allowance requires significant judgment in estimating future taxable income, applicable tax strategies, and the expected timing of reversals of temporary differences. Recently Issued Accounting Pronouncements The effect of recently issued accounting pronouncements is set forth in Note 2 “Summary of Significant Accounting Policies” to the Interim Financial Statements. 28 Table of Contents