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Note 12 - Leases, Commitments and Contingencies | 12 Months Ended
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Jan. 31, 2025
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | (12) Leases, Commitments and Contingencies Leases The Company’s lease portfolio includes office space, training centers, and vehicles to support its research and development activities, sales operations and other corporate and administrative functions in North America, Europe and Asia. The Company’s leases have remaining terms of one year to ten years. Some of the Company’s leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. All of the Company's leases are classified as operating leases. Our ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the expected lease term. As the Company’s operating leases generally do not provide an implicit rate, the Company uses an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at the acquisition date to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment. The weighted average incremental borrowing rate for its operating leases as of January 31, 2025 was 6.0%. The operating leases are included in the captions “operating right-of-use assets”, “operating lease liabilities”, and “operating long-term lease liabilities” on the Company’s consolidated balance sheets. The weighted-average remaining lease term of the Company’s operating leases is 6.3 years as of January 31, 2025. Lease costs for minimum lease payments are recognized on a straight-line basis over the lease term. The lease costs were $2.2 million and related cash payments were $4.3 million for the fiscal year ended January 31, 2025. The lease costs were $5.0 million and related cash payments were $4.8 million for the fiscal year ended January 31, 2024. Lease costs are included within the content and software development, selling and marketing, and general and administrative lines on the consolidated statements of operations, and the operating leases related cash payments were included in the operating cash flows on the consolidated statements of cash flows. Short-term lease costs and variable lease costs are not material. See Note 10 for a discussion related to restructuring charges associated with lease termination and lease impairment charges. The below reconciles the undiscounted future minimum lease payments under non-cancellable leases to the total lease liabilities recognized on the consolidated balance sheets as of January 31, 2025 (in thousands):
Fiscal years ended January 31: |  |  |
2026 |  | $ | 2,214 |
2027 |  |  | 1,670 |
2028 |  |  | 1,513 |
2029 |  |  | 1,269 |
2030 |  |  | 718 |
Thereafter |  |  | 2,313 |
Total future minimum lease payments |  |  | 9,697 |
Effects of discounting |  |  | (1,475 | )
Total lease liabilities |  | $ | 8,222 |
Current lease liabilities |  | $ | 1,791 |
Long-term lease liabilities |  |  | 6,431 |
Total lease liabilities |  | $ | 8,222 |
Litigation On November 21, 2023, a Company stockholder (Jonathon Norcross) filed a derivative lawsuit in the Delaware Court of Chancery captioned In re Skillsoft Corp. Stockholders Litigation, C.A. No. 2023-1179-JTL (Del. Ch.), challenging the Company’s acquisition of Codecademy in April 2022. The plaintiff claimed that certain of the Company’s directors, together with Company stockholder MIH Learning B.V., breached their fiduciary duties in connection with the merger. On February 7, 2025, the Court dismissed all claims against all defendants. On February 14, 2025, the plaintiff filed a motion for reargument of the Court’s decision, which the defendants opposed on February 21, 2025. On March 25, 2025, the Court denied the plaintiff's motion for reargument. We currently cannot estimate any possible loss that may result from this action. In addition, the Company is, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business including those relating to commercial and contractual disputes, employment matters, intellectual property, and other business matters. When appropriate, management consults with legal counsel and other appropriate experts to assess claims. If, in management’s opinion, we have incurred a probable loss as determined in accordance with GAAP, an estimate is made of the loss, and the appropriate accrual is reflected in our consolidated financial statements. Currently, there are no material amounts accrued. While it is not possible to quantify the financial impact or predict the outcome of these pending claims and litigation, management does not anticipate that the outcome of any such current proceedings or known claims, either individually or in aggregate, will materially affect the Company’s financial position, results of operations or cash flows. There are no material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of our common stock, or any associate of any of the foregoing is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. Warranties and Indemnities The Company’s software license arrangements and hosting services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and substantially in accordance with the Company’s product documentation under normal use and circumstances. The Company’s arrangements also include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property right. The Company has entered into service level agreements with some of its hosted application customers warranting certain levels of uptime reliability and such agreements permit those customers to receive credits against monthly hosting fees or terminate their agreements in the event that the Company fails to meet those levels for an agreed upon period of time. To date, the Company has not incurred any material costs as a result of such indemnifications or commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

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