Skillsoft (SKIL) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01The market for online learning solutions may not grow as we expect, which may harm our business and results of operations
2. 02Increased competition may result in decreased demand for our products and services, which may result in reduced revenue and gross profits and loss of market share
3. 03educational institutions
4. 04We have a history of losses, and we may not be able to generate sufficient revenue to achieve or maintain profitability in the future
5. 05We depend on senior leadership to manage and operate the business, and if we fail to retain and attract highly qualified employees our business could be harmed
6. 06Issues in the development and use of AI (including GenAI) and machine learning may result in liability or reputational harm
7. 07Demand for our products and services is susceptible to general global market and economic conditions
8. 08New products introduced by us may not be successful
9. 09We may be unable to realize intended efficiencies and benefits from our comprehensive resource reallocation plan and go-to-market strategy, which may adversely affect our profitability, financial condition or our business
10. 10Our ILT offering relies on third parties to provide us with learning content and subject matter expertise and have content production relationships with third parties for our courses and learning content, and our relationships with these third parties may be terminated or fail to meet our requirements
11. 11The partners we rely on as part of the production process and for content or subject matter expertise may compete with us, which could harm our results of operations. Our agreements with these third parties generally do not restrict them from developing content for our competitors or from competing directly with us
12. 12Disruption to or failures of our platform and technology could result in our customers becoming unsatisfied with our platform and could harm our reputation
13. 13Failure to effectively optimize, retain, expand, and continue to increase the productivity of our direct sales teams and develop and expand our indirect sales channel may impede our growth
14. 14Our market share for instructor-led, synchronous, learning may continue to decline
15. 15A loss of our status as an authorized training provider with one or more key technology vendors could adversely affect our business
16. 16Our worldwide operations are subject to risks that could negatively impact our future operating results
17. 17the absence or significant lack of legal protection for intellectual property rights
18. 18Increasing scrutiny, complex regulations, and evolving expectations from customers, partners, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us, expose us to new or additional risks, or harm our reputation
19. 19Acquisitions of businesses or technologies may not produce the benefits we anticipate and could harm our current operations
20. 20We review our goodwill and indefinite-lived intangible for impairment at least annually and when events or changes in circumstances indicate that the carrying value may not be recoverable
21. 21Our business is subject to the risks of pandemics, earthquakes, wildfire, droughts, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches, terrorism or war

Legal, Regulatory and Related Risks

1. 22Significant changes to the size, structure, powers and operations of the federal, state, and local government may cause economic disruptions that could, in turn, adversely impact our business, results of operations and financial condition
2. 23Regulatory and legislative developments on the use of AI and machine learning could adversely affect our use of such technologies in our products and services
3. 24Failure or perceived failure to comply with regulations relating to some career training services could result in the imposition of penalties or the interruption of our ability to provide services in certain jurisdictions
4. 25Existing or future laws and regulations relating to privacy or data security could increase the cost of our products, limit their use and adoption, and subject us or our customers to litigation, regulatory investigations and penalties, and other potential liabilities
5. 26Any of these matters could materially adversely affect our business, financial condition, or operational results
6. 27Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws and regulations relating to our international operations could subject us to penalties and other adverse consequences
7. 28Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
8. 29Changes in tax laws, unfavorable resolution of tax examinations, or exposure to additional tax liabilities could have a material adverse effect on our results of operations, financial condition, and liquidity

Risks Related to our Indebtedness and Certain Other Obligations

1. 30Our degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk, and prevent us from meeting obligations on our indebtedness
2. 31Our credit agreements contain restrictions that limit our flexibility in operating our business
3. 32We may not be able to generate sufficient cash to service all of our indebtedness, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful

Risks Related to Ownership of Our Common Stock

1. 33Because there are no current plans to pay cash dividends on our common stock for the foreseeable future, investors may not receive any return on investment unless they sell their common stock for a price greater than the price paid
2. 34We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term stockholder value
3. 35Future sales, or the perception of future sales, by Skillsoft or its stockholders in the public market could cause the market price for our common stock to decline
4. 36We might require additional capital to support our growth, and this capital might not be available on acceptable terms, if at all
5. 37Anti-takeover provisions in our organizational documents could delay or prevent a change of control
6. 38providing that our board of directors is expressly authorized to make, alter or repeal our bylaws
7. 39The New York Stock Exchange ("NYSE") may not continue to list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
8. 40As of April 7, 2025, Prosus holds approximately 36.8 % of the number of shares and voting power of Skillsoft’s outstanding common stock
9. 41We are a smaller reporting company and intend to avail ourselves of certain reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors