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Item 9A. Controls and Procedures

2022-06-29 compared with 2021-06-30 · 50 added, 32 removed, 188 unchanged (30% of the section changed)

5 unchanged sentences

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Based on management’s evaluation, and considering the items noted below, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) Management’s Annual Report on Internal Control over Financial Reporting

5 unchanged sentences

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013 framework).

Based upon the Company’s evaluation under this framework, management concluded that the Company’s internal control over financial reporting was effective as of May 1, 2021.

Based upon the Company’s evaluation under this framework, management concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2022 due to a material weakness in our internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management has concluded that a material weakness existed at April 30, 2022 due to an operating deficiency resulting from insufficient precision applied in the execution of management’s review of the analysis of its deferred tax asset valuation allowance.

The Company acknowledges that its management is responsible for establishing and maintaining adequate internal control over financial reporting and assessing the effectiveness of its internal controls.

The Company is committed to maintaining a strong internal control environment and implementing measures to ensure that the control deficiency identified above is remediated.

Management is in the process of implementing its remediation plan, which includes steps to implement enhanced documentation associated with this management review control and training of relevant personnel around the required precision of their review when executing this control.

The Company will consider the material weakness remediated after management has concluded, through testing, that the control is operating effectively.

The effectiveness of internal control over financial reporting was audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report included on page 105.

Index to Form 10-K Index to FS

There have been no changes in the Company’s internal control over financial reporting during the most recent quarter ended May 1, 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

There have been no changes in the Company’s internal control over financial reporting during the most recent quarter ended April 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Index to Form 10-K Index to FS

9 unchanged sentences

The role of Ernst & Young LLP, an independent registered public accounting firm, is to provide an objective examination of the Consolidated Financial Statements and the underlying transactions in accordance with the standards of the Public Company Accounting Oversight Board.

The report of Ernst & Young LLP appears on page 91 of this report on Form 10-K for the year ended May 1, 2021.

The report of Ernst & Young LLP appears on page 105 of this report on Form 10-K for the year ended April 30, 2022.

OTHER INFORMATION

5 unchanged sentences

We have audited Barnes & Noble Education, Inc.

and subsidiaries’ internal control over financial reporting as of May 1, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Barnes & Noble Education, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 1, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 1, 2021 and May 2, 2020, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended May 1, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated June 30, 2021 expressed an unqualified opinion thereon.

and subsidiaries’ internal control over financial reporting as of April 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Barnes & Noble Education, Inc.

and subsidiaries (the Company) has not maintained effective internal control over financial reporting as of April 30, 2022, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in the control related to the review of the company’s deferred tax asset valuation allowance.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 30, 2022 and May 1, 2021, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended April 30, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2).

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal 2022 consolidated financial statements, and this report does not affect our report dated June 29, 2022 which expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

Iselin, New Jersey

Index to Form 10-K Index to FS

June 29, 2022

4 unchanged sentences

Business - Executive Officers of this Annual Report on Form 10-K.

The remaining information with respect to directors, executive officers, the code of ethics and corporate governance of the Company is incorporated herein by reference to the Company’s definitive Proxy Statement relating to the Company’s 2021 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the Company’s fiscal year ended May 1, 2021 (the “Proxy Statement”).

The remaining information with respect to directors, executive officers, the code of ethics and corporate governance of the Company is incorporated herein by reference to the Company’s definitive Proxy Statement relating to the Company’s 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the Company’s fiscal year ended April 30, 2022 (the “Proxy Statement”).

The information with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the Proxy Statement.

4 unchanged sentences

Equity Compensation Plan Information

The following table sets forth equity compensation plan information as of May 1, 2021:

The following table sets forth equity compensation plan information as of April 30, 2022:

Plan Category Number of

26 unchanged sentences

Included in Part II of this Report:

Consolidated Statements of Operations for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Consolidated Balance Sheets as of May 1, 2021 and May 2, 2020

Consolidated Statements of Cash Flows for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Consolidated Statements of Equity for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Notes to Consolidated Financial Statements, for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

Consolidated Statements of Operations for the years ended April 30, 2022, May 1, 2021, and May 2, 2020

Consolidated Balance Sheets as of April 30, 2022 and May 1, 2021

Consolidated Statements of Cash Flows for the years ended April 30, 2022, May 1, 2021, and May 2, 2020

Consolidated Statements of Equity for the years ended April 30, 2022, May 1, 2021, and May 2, 2020

Notes to Consolidated Financial Statements, for the years ended April 30, 2022, May 1, 2021, and May 2, 2020

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on the consolidated financial statements of Barnes & Noble Education, Inc.

for the years ended May 1, 2021, May 2, 2020, and April 27, 2019

for the years ended April 30, 2022, May 1, 2021, and May 2, 2020

Financial Statement Schedules of Barnes & Noble Education, Inc.:

10 unchanged sentences

Description of Registrant’s Securities.

Description of Capital Stock

Description of Capital Stock, filed as Exhibit 4.1 to Report on Form 10-K filed with the SEC on June 30, 2021, and incorporated herein by reference.

Material contracts.

4 unchanged sentences

Third Amendment and Waiver to Credit Agreement and First Amendment to Security Agreement, dated as of March 31, 2021, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on April 5, 2021, and incorporated herein by reference.

Fourth Amendment and Waiver to Credit Agreement dated as of March 7, 2022, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015, filed as Exhibit 10.1 to Report on Form 10-Q filed with the SEC on March 8, 2022, and incorporated herein by reference.

Term Loan Credit Agreement, dated as of June 7, 2022, among Barnes & Noble Education, Inc., as borrower, the guarantors party thereto, TopLids LendCo, LLC and Vital Fundco, LLC, as lenders, and TopLids LendCo, LLC, as administrative agent and collateral agent, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on June 10, 2022, and incorporated herein by reference.

Limited Waiver Agreement, dated as of June 28 , 2022, among Barnes & Noble Education, Inc., as borrower, the guarantors party thereto, TopLids LendCo, LLC and Vital Fundco, LLC, as lenders, and TopLids LendCo, LLC, as administrative agent and collateral agent for the lenders, to the Term Loan Credit Agreement, dated as of June 7, 2022.

Fifth Amendment to Credit Agreement, dated as of June 7, 2022, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015, filed as Exhibit 10.2 to Report on Form 8-K filed with the SEC on June 10, 2022, and incorporated herein by reference.

Limited Waiver Agreement, dated as of June 28 , 2022, among Barnes & Noble Education, Inc., as the lead borrower, the other borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders, to the Credit Agreement, dated as of August 3, 2015.

Trademark License Agreement, dated as of August 2, 2015, between Barnes & Noble Education, Inc.

and Barnes & Noble, Inc., filed as Exhibit 10.4 to Report on Form 8-K filed with the SEC on August 3, 2015, and incorporated herein by reference.

Registration Statement on Form S-8 regarding the Barnes & Noble Education, Inc.

Amended and Restated Equity Incentive Plan as filed with the SEC on October 8, 2021, and incorporated herein by reference.

Barnes & Noble Education, Inc.

Amended and Restated Equity Incentive Plan filed as Exhibit 10.1 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.

Amended and Restated Equity Incentive Plan, amended and restated as of September 23, 2021, filed as Exhibit 10.1 to Report on Form 10-Q filed with the SEC on November 11, 2021, and incorporated herein by reference.

Barnes & Noble Education, Inc.

14 unchanged sentences

Form of Restricted Stock Award Agreement, filed as Exhibit 10.4 to Report on Form 10-Q filed with the SEC on December 4, 2018, and incorporated herein by reference.

Index to Form 10-K Index to FS

Barnes & Noble Education, Inc.

Form of Phantom Share Units Award Agreement.

Form of Phantom Share Units Award Agreement, filed as Exhibit 10.15 to Annual Report on Form 10-K filed with the SEC on June 30, 2021, and incorporated herein by reference.

Barnes & Noble Education, Inc.

Form of Non-Qualified Stock Options Award Agreement.

Form of Non-Qualified Stock Options Award Agreement, filed as Exhibit 10.16 to Annual Report on Form 10-K filed with the SEC on June 30, 2021, and incorporated herein by reference.

Amended and Restated Employment Agreement, dated July 19, 2017, between Barnes & Noble Education, Inc.

5 unchanged sentences

Huseby, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on September 29, 2020, and incorporated herein by reference.

Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education, Inc.

and Kanuj Malhotra, filed as Exhibit 10.23 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.

Resignation Letter, dated November 9, 2020, between Barnes & Noble Education, Inc.

and Kanuj Malhotra, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on November 12, 2020, and incorporated herein by reference.

Retention Letter, dated February 28, 2019, between Barnes & Noble Education, Inc.

and Michael C.

Miller, filed as Exhibit 10.4 to Report on Form 10-Q filed with the SEC on March 5, 2019, and incorporated herein by reference.

Amendment to Employment Agreement, dated June 23, 2022, with Michael P.

Huseby, filed as Exhibit 10.1 to Report on Form 8-K filed with the SEC on June 24, 2022, and incorporated herein by reference.

Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education Inc., Barnes & Noble College Booksellers, LLC and Michael C.

Miller, filed as Exhibit 10.24 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.

Index to Form 10-K Index to FS

Amended and Restated Employment Letter, effective as of June 19, 2019, between Barnes & Noble Education, Inc.

1 unchanged sentence

Donohue, filed as Exhibit 10.26 to Annual Report on Form 10-K filed with the SEC on June 25, 2019, and incorporated herein by reference.

Amended and Restated Employment Letter, dated June 19, 2019, between MBS Textbook Exchange, LLC and Dave Henderson, filed as Exhibit 10.1 to Form 10-Q filed with the SEC on September 2, 2021, and incorporated herein by reference.

Amended and Restated Employment Letter, dated June 19, 2019, between B&N Education, LLC, a subsidiary of Barnes & Noble Education, Inc.

and Jonathan Shar, filed as Exhibit 10.2 to Form 10-Q filed with the SEC on September 2, 2021, and incorporated herein by reference.

Employment Letter, dated February 19, 2021, between BNED Digital Holdings, LLC and David Nenke.

Form of Director and/or Officer Indemnification Agreement, filed as Exhibit 10.14 to Report on Form S-1/A filed with the SEC on June 29, 2015, and incorporated herein by reference.

14 unchanged sentences

101.LAB XBRL Taxonomy Extension Label Linkbase Document

Index to Form 10-K Index to FS

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

6 unchanged sentences

/s/ Michael P.

Chairman and Chief Executive Officer

Chief Executive Officer

June 29, 2022

2 unchanged sentences

/s/ Michael P.

Huseby Chairman and Chief Executive Officer and Director

Huseby Chief Executive Officer and Director

(Principal Executive Officer) June 29, 2022

5 unchanged sentences

(Principal Accounting Officer) June 29, 2022

Ryan Chairman and Director June 29, 2022

Chiu Director June 29, 2022

6 unchanged sentences

Robinson Director June 29, 2022

Ryan Director June 30, 2021

/s/ Jerry Sue Thornton Director June 29, 2022

Jerry Sue Thornton

Wilson Director June 30, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures