What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-07-01 compared with 2023-07-31 · 644 added, 475 removed, 965 unchanged (54% of the section changed)

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

for the years ended April 29, 2023, April 30, 2022, and May 1, 2021 (PCAOB ID 42 )

Consolidated Statements of Operations for the years ended April 29, 2023, April 30, 2022, and May 1, 2021

for the years ended April 27, 2024, and April 29, 2023 (PCAOB ID 42 )

Consolidated Statements of Operations for the years ended April 27, 2024 and April 29, 2023

Consolidated Balance Sheets as of April 27, 2024 and April 29, 2023

Consolidated Statements of Cash Flows for the years ended April 29, 2023, April 30, 2022, and May 1, 2021

Consolidated Statements of Equity for the years ended April 29, 2023, April 30, 2022, and May 1, 2021

Consolidated Statements of Cash Flows for the years ended April 27, 2024 and April 29, 2023

Consolidated Statements of Equity for the years ended April 27, 2024 and April 29, 2023

Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Barnes & Noble Education, Inc.

To the Stockholders and the Board of Directors of Barnes & Noble Education, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Barnes & Noble Education, Inc.

and subsidiaries (the Company) as of April 29, 2023 and April 30, 2022, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended April 29, 2023 and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 29, 2023 and April 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended April 29, 2023, in conformity with U.S.

and subsidiaries (the Company) as of April 27, 2024 and April 29, 2023, the related consolidated statements of operations, equity and cash flows for each of the two years in the period ended April 27, 2024 and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 27, 2024 and April 29, 2023, and the results of its operations and its cash flows for each of the two years in the period ended April 27, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of April 29, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated July 31, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee of the Company’s board of directors and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

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In particular, the reserve calculations are sensitive to certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's inventory reserve process, including management’s review controls over the determination of significant assumptions and the data underlying the calculations of the inventory reserves.

Index to Form 10-K Index to FS

Our procedures included, among others, evaluating the significant assumptions, identified above, and testing the accuracy and completeness of the underlying data used in management’s inventory reserve calculation.

How We Addressed the Matter in Our Audit Our procedures included, among others, evaluating the significant assumptions, identified above, and testing the accuracy and completeness of the underlying data used in management’s inventory reserve calculation.

We recalculated the reserve using management’s methodology and assumptions, and we evaluated the methodology and the significant assumptions for reasonableness by comparing them to the related actual historical activity and expected future market and economic conditions.

We also analyzed the impact of reasonable changes to the significant assumptions on the recorded inventory reserves.

Index to Form 10-K Index to FS

Long-Lived Asset Impairment

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These assumptions are subjective in nature and are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the store long-lived assets impairment process, including controls over the determination of the undiscounted projected cash flows of the stores with indicators of impairment, the fair values of the stores with carrying values that were not recoverable and the fair values of operating right-of-use assets within those stores.

We also tested controls over management’s review of the significant assumptions described above.

Our testing of the Company's impairment analysis included, among other procedures, evaluating the significant assumptions described above and the operating data used to calculate the estimated future cash flows of the stores and to determine fair values.

How We Addressed the Matter in Our Audit Our testing of the Company's impairment analysis included, among other procedures, evaluating the significant assumptions described above and the operating data used to calculate the estimated future cash flows of the stores and to determine fair values.

We tested the completeness and accuracy of the data used by the Company in its analysis.

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Iselin, New Jersey

July 31, 2023

Index to Form 10-K Index to FS

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52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Product sales and other $ 1,430,456 $ 1,406,655

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Other noncurrent assets 24,703 17,889

Assets held for sale, noncurrent — 28,140

Total assets $ 905,084 $ 980,779

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Current operating lease liabilities 102,206 99,980

Short-term borrowings — 40,000

Liabilities held for sale — 8,423

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52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024

April 29, 2023

Cash flows from operating activities:

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Impairment loss (non-cash) 7,166 6,008

Merchandise inventory loss and write-off — 434 14,960

Merchandise inventory loss — —

Content amortization expense — 26

Amortization of deferred financing costs 13,150 3,129

Non-cash interest expense (paid-in-kind) 2,652 —

Deferred taxes ( 550 ) 409

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Changes in other operating assets and liabilities, net 15,551 115,580

Net cash flows provided by (used in) operating activities from continuing operations 90,513 ( 16,195 ) 27,049

Net cash flows provided by operating activities from discontinued operations 1,157 17,356 5,847

Net cash flows provided by operating activities $ 91,670 $ 1,161 $ 32,896

Net cash flows (used in) provided by operating activities from continuing operations

( 1,545 ) 90,513

Net cash flows (used in) provided by operating activities from discontinued operations

( 3,577 ) 1,157

Net cash flows (used in) provided by operating activities

$ ( 5,122 ) $ 91,670

Cash flows from investing activities:

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Net cash flows used in investing activities from continuing operations ( 13,992 ) ( 24,501 )

Net cash flows used in investing activities from discontinued operations ( 6,542 ) ( 9,926 ) ( 9,661 )

Net cash flows used in investing activities $ ( 31,043 ) $ ( 42,661 ) $ ( 36,888 )

Net cash flows provided by (used in) investing activities from discontinued operations

21,395 ( 6,542 )

Net cash flows provided by (used in) investing activities

$ 7,403 $ ( 31,043 )

Cash flows from financing activities:

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Payment of deferred financing costs ( 16,316 ) ( 7,265 )

Sale of treasury shares — — 10,869

Purchase of treasury shares ( 176 ) ( 864 )

Proceeds from the exercise of stock options, net — —

Net cash flows (used in) provided by financing activities from continuing operations ( 49,675 ) 45,721 11,799

Net cash flows used in financing activities from continuing operations

( 5,699 ) ( 49,675 )

Net cash flows provided by financing activities from discontinued operations — —

Net cash flows (used in) provided by financing activities $ ( 49,675 ) $ 45,721 $ 11,799

Net increase in cash, cash equivalents, and restricted cash $ 10,952 $ 4,221 $ 7,807

Index to Form 10-K Index to FS

Net cash flows used in financing activities

$ ( 5,699 ) $ ( 49,675 )

Net (decrease) increase in cash, cash equivalents, and restricted cash

$ ( 3,418 ) $ 10,952

Cash, cash equivalents, and restricted cash at beginning of period 31,988 21,036

Cash, cash equivalents, and restricted cash at end of period 28,570 31,988

Index to Form 10-K Index to FS

Cash and cash equivalents of discontinued operations at end of period — ( 1,057 )

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Shares Amount Capital Deficit Shares Amount Equity

Balance at May 2, 2020 52,140 $ 521 $ 732,958 $ ( 282,827 ) 3,842 $ ( 32,901 ) $ 417,751

Balance at April 30, 2022 54,234 $ 542 $ 740,838 $ ( 491,494 ) 2,188 $ ( 21,512 ) $ 228,374

Stock-based compensation expense

Vested equity awards 906 9 ( 9 ) —

1,187 12 ( 12 ) —

Sale of treasury shares ( 3,784 ) ( 2,308 ) 14,653 10,869

Shares repurchased for tax withholdings for vested stock awards

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Net loss ( 101,862 ) ( 101,862 )

Balance at May 1, 2021 53,327 $ 533 $ 734,257 $ ( 422,637 ) 1,948 $ ( 19,142 ) $ 293,011

Stock-based compensation expense

Vested equity awards 829 8 ( 8 ) —

Shares repurchased for tax withholdings for vested stock awards

240 ( 2,370 ) ( 2,370 )

Issuance of common stock upon exercise of stock options 78 1 256 257

( 68,857 ) ( 68,857 )

Balance at April 29, 2023 55,140 $ 551 $ 745,932 $ ( 593,356 ) 2,536 $ ( 22,376 ) $ 130,751

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148 ( 176 ) ( 176 )

( 101,862 ) ( 101,862 )

Net loss ( 63,211 ) ( 63,211 )

Reverse Stock Split ( 55,282 ) — — — ( 2,657 ) — —

Balance at April 27, 2024 558 $ 558 $ 749,140 $ ( 656,567 ) 27 $ ( 22,552 ) $ 70,579

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(“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States.

We are also one of the largest textbook wholesalers, inventory management hardware and software providers, and a leading provider of digital education solutions.

We are also one of the largest textbook wholesalers and inventory management hardware and software providers.

We operate 1,245 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.

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We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes.

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

The BNC First Day discounted price is offered as a course fee or included in tuition.

During Fiscal 2023, BNC First Day total revenue increased 48% from the prior year period.

We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc.

(“Fanatics”) and Fanatics Lids College, Inc.

D/B/A "Lids" (“Lids”) (collectively referred to herein as the “F/L Partnership”), win new accounts, and expand our strategic opportunities through acquisitions and partnerships.

We expect gross general merchandise sales to continue to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Partnership.

Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business.

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results.

See BNC First Day Equitable and Inclusive Access Programs discussion below .

We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc.

D/B/A “Lids” (“Lids”) (collectively referred to herein as the “F/L Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships.

We expect gross comparable store general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship.

Fanatics and Lids, acting on our behalf as our service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business.

See Relationship with Fanatics and Lids discussion below .

The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States.

Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.

During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment.

On May 31, 2023, subsequent to the end of Fiscal 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $20,000, net of certain transaction fees, severance costs, escrow, and other considerations.

During the first quarter of Fiscal 2024, we expect to record a Gain on Sale of Business in the range of $2,500 to $4,500.

Net cash proceeds from the sale was used for debt repayment and provided additional funds for working capital needs under our Credit Facility.

We have two reportable segments:

Retail and Wholesale.

For additional information related to our strategies, operations and segments, see Part I - Item 1.

Business and Part II - Item 8.

Financial Statements and Supplementary Data - Note 4.

Segment Reporting.

BNC First Day Equitable and Inclusive Access Programs

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the

During the 52 weeks ended April 27, 2024, BNC First Day total revenue increased by $ 127,211 , or 37 %, to $ 473,863 compared to $ 346,652 during the prior year period.

• First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials.

The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.

In the Spring of 2024, 160 campus stores are utilizing First Day ® Complete representing enrollment of nearly 805,000 undergraduate and post graduate students (as reported by National Center for Education Statistics as of October 26, 2023), an increase of approximately 39% compared to Spring of 2023.

During the 52 weeks ended April 27, 2024, First Day Complete sales increased by $ 94,948 , or 48.0 %, to $ 292,704 as compared to $ 197,756 in the prior year period.

Index to Form 10-K Index to FS

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(Thousands of dollars, except share and per share data)

first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

The BNC First Day discounted price is offered as a course fee or included in tuition.

• First Day Complete is adopted by an institution and includes all undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials.

The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.

• First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS").

Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted.

We are moving quickly and decisively to accelerate our First Day Complete strategy.

We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter.

For the 2023 Spring Term, 116 campus stores adopted our First Day Complete course materials delivery program, representing approximately 580,000 in total undergraduate student enrollment (as reported by National Center for Education Statistics), compared to 76 campus stores representing approximately 380,000 in total undergraduate student enrollment for the 2022 Spring Term.

During the 52 weeks ended April 29, 2023, First Day Complete sales increased by 88% as compared to the prior year period.

Partnership with Fanatics and Lids

In December 2020, we entered into the F/L Partnership.

Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform.

During the 52 weeks ended April 27, 2024, First Day sales increased by $ 32,263 , or 21.7 %, to 181,159 as compared to $ 148,896 in the prior year period.

Offering course materials through our equitable and inclusive access First Day Complete and First Day models is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

In Fiscal 2024, the growth of our BNC First Day programs offset the declines in a la carte courseware sales and closed store sales.

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

Relationship with Fanatics and Lids

In December 2020, we entered into the F/L Relationship.

Fanatics operates as our service provider, including processing consumer personal information on our behalf, using their cutting-edge e-commerce and technology expertise to offer our campus store websites expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform.

Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.

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Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.

COVID-19 Pandemic Business Impact

Our business was significantly negatively impacted by the COVID-19 pandemic, as many schools adjusted their learning models and on-campus activities.

The impact of COVID-19 store closings during Fiscal 2021 to Fiscal 2022 resulted in the loss of cash flow and increased borrowings that we would not otherwise have expected to incur.

However, on campus traffic continues to grow from increased campus events and activities, as compared to the last two years.

We cannot accurately predict the lingering impact of the COVID-19 pandemic on enrollments, primarily at community colleges and international student enrollment, campus activities, university budgets, athletics, the continuation of remote and hybrid class offerings, and other areas that directly affect our business operations .

Refer to Part II - Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Summary of Significant Accounting Policies

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Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April.

The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended April 29, 2023 (“Fiscal 2023”), 52 weeks ended April 30, 2022 (“Fiscal 2022”), and 52 weeks ended May 1, 2021 (“Fiscal 2021”).

Liquidity and Going Concern

The accompanying consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.

Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these Consolidated Financial Statements are issued.

In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

Evaluation in conjunction with the issuance of the April 29, 2023 Consolidated Financial Statements

Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing.

Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively.

As of April 29, 2023, we had $ 30,931 of cash on hand, including $ 16,712 of restricted cash related to segregated funds for commission due to Fanatics for logo merchandise sales as per the merchandising partnership agreement.

We incurred a Net Loss from Continuing Operations of $( 90,140 ), $( 61,559 ), and $( 133,569 ), for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively, and Cash Flow Provided By (Used In) Operating Activities from Continuing Operations of $ 90,513 , $( 16,195 ), and $ 27,049 , respectively.

The tightening of our available credit commitments, including the elimination and repayment of our seasonal borrowing facility (FILO Facility) of $ 40,000 , has had a significant impact on our liquidity during the year ended April 29, 2023, including our ability to make timely vendor payments and school commission payments resulting in a positive cash flow from operations offset by a use of cash for financing activities.

Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities.

Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023.

Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes.

The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur.

Our losses and projected cash needs, combined with our current liquidity level, initially raised substantial doubt about our ability to continue as a going concern.

As discussed below, Management’s plan to improve the Company’s liquidity and

The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended April 27, 2024 (“Fiscal 2024”) and 52 weeks ended April 29, 2023 (“Fiscal 2023”).

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering.

Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 5.03 .

On June 11, 2024, subsequent to the end of Fiscal 2024, we completed a reverse stock split of our outstanding shares of common stock at a ratio of 1-for-100 in which every 100 shares of the common stock issued and outstanding was converted into one share of our common stock.

The weighted average common shares and loss per common share reflect the bonus element resulting from the equity rights offering and the reverse stock split for all periods presented on the consolidated statements of operations.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Index to Form 10-K Index to FS

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(Thousands of dollars, except share and per share data)

successfully alleviate substantial doubt includes (1) raising additional liquidity an d (2) taking additional operational restructuring actions.

Debt amendments

On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment.

The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors).

The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement).

There can be no guarantee or assurances that any such transaction or transactions be consummated.

We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).

On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants.

We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).

See Part II - Item 8.

Liquidity and Going Concern Evaluation in conjunction with the issuance of the April 27, 2024 Consolidated Financial Statements

The accompanying consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

Our primary sources of cash are net cash flows from operating activities and funds available under our Credit Facility.

The tightening of our available credit commitments, including the elimination and repayment of our seasonal borrowing facility (FILO Facility) of $ 40,000 , has had a significant impact on our liquidity during Fiscal 2023 and Fiscal 2024, including our ability to make timely vendor payments and school commission payments.

Our recurring losses and projected cash needs, combined with our current liquidity levels and the maturity of our Credit Facility and Term Loan, which were originally scheduled to become due on December 28, 2024 and April 7, 2025, respectively, raised substantial doubt about our ability to continue as a going concern beyond twelve months from the issuance of our third quarter financial statements as of March 12, 2024 as disclosed in our previously filed Quarterly Report on Form 10-Q.

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, to substantially deleverage our consolidated balance sheet.

These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs.

Upon closing of the Transactions on June 10, 2024:

• We received gross proceeds of $ 95,000 of new equity capital through a $ 50,000 new equity investment (the “Private Investment”) led by Immersion Corporation (“Immersion”) and a $ 45,000 fully backstopped equity rights offering (the “Rights Offering”).

The Transactions infused approximately $ 80,000 of net cash proceeds after transaction costs.

The transaction resulted in Immersion obtaining controlling financial interest.

• Our existing Term Loan credit agreement lenders, TopLids LendCo, LLC and Vital Fundco, LLC, converted approximately $ 34,000 of outstanding principal and any accrued and unpaid interest into our common stock.

• We refinanced our Credit Facility providing access to a $ 325,000 facility maturing in 2028.

The refinanced Credit Facility will meaningfully enhance our financial flexibility and reduce our annual interest expense.

As a result of the equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, all executed on June 10, 2024, Management concluded that substantial doubt about the Company's ability to continue as a going concern no longer exists.

For additional information related to the rights offering, new equity investment, Term Loan credit agreement debt conversion, and Credit Facility refinancing terms, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 7.

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Subsequent Events.

Operational restructuring plans

We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability.

We have taken steps to significantly reduce our workforce during non-rush seasonal sales periods, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs.

reduced capital expenditures, and evaluated operating contractual obligations for cost savings.

We have achieved meaningful cost savings from this program of approximately $17,000 d uring the year ended April 29, 2023.

These initiatives are expected to provide annualized savings of $30,000 to $35,000 in Fiscal 2024.

Management's plans over the next twelve months include the further reduction of gross capital expenditures and other cost saving measures of approximately $25,000.

Management believes that these plans are within its control and probable of being implemented on a timely basis.

Management believes that the expected impact on our liquidity and cash flows resulting from the Debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these consolidated financial statements and alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern.

See Part I - Risk Factors - We are dependent upon access to the capital markets, bank credit facilities, and short-term vendor financing for liquidity needs.

Our business is highly seasonal.

Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates.

These shifts in timing may affect the comparability of our

For example, our retail business is seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters.

Our quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, the ability to secure inventory on a timely basis, as well as shifts in our fiscal calendar dates.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to:

(i) the rental of physical textbook where revenue is recognized over the rental period, and (ii) ala carte courseware sales where revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

Index to Form 10-K Index to FS

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(Thousands of dollars, except share and per share data)

results across periods.

Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters.

Sales attributable to our wholesale business are generally highest in our first, second and third quarter, as it sells textbooks and other course materials for retail distribution.

These shifts in timing may affect the comparability of our results across periods.

Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution.

See Revenue Recognition and Deferred Revenue discussion below.

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All corresponding prior year periods presented in our financial statements and related information in the accompanying notes have been reclassified to reflect the Asset Held for Sale and Discontinued Operations presentation.

During the first quarter of Fiscal 2024, we expect to record a Gain on Sale of Business in the range of $2,500 to $4,500.

Net cash proceeds from the sale was used for debt repayment and provided additional funds for working capital needs under our Credit Facility.

On May 31, 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $ 20,000 , net of certain transaction fees, severance costs, escrow, and other considerations.

During the 52 weeks ended April 27, 2024, we recorded a Gain on Sale of Business of $ 3,545 in Loss from Discontinued Operations, Net, related to the sale.

Net cash proceeds from the sale were used for debt repayment and provided additional funds for working capital needs under our Credit Facility.

The following table summarizes the operating results of the discontinued operations for the periods indicated:

52 weeks ended

Dollars in thousands April 29, 2023 April 30, 2022 May 1, 2021

Dollars in thousands April 27, 2024 April 29, 2023

Total sales $ 2,784 $ 35,353

Cost of sales (a)

7,156 5,738 5,056

Gross profit (a)

28,197 29,928 22,318

Selling and administrative expenses 3,029 34,137

Depreciation and amortization 3 3,155

Restructuring costs 1,848 — 571

Gain on sale of business ( 3,545 ) —

Impairment loss (non-cash) (b)

Restructuring costs (c)

Transaction costs 13 381

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Loss from discontinued operations, net of tax $ ( 730 ) $ ( 11,722 )

(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $ 6,594 , $ 5,068 , and $ 4,289 for the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $ 0 and $ 6,594 for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

(b) During the 52 weeks ended April 27, 2024 , we recognized an impairment loss (non-cash) of $ 610 (both pre-tax and after-tax), comprised of $ 119 and $ 491 of property and equipment and operating lease right-of-use assets, respectively, on the consolidated statement of operations as part of discontinued operations.

(c) During the 52 weeks ended April 27, 2024 and April 29, 2023 , we recognized restructuring and other charges of $ 3,308 and $ 1,848 , respectively, comprised of severance and other employee termination costs.

Index to Form 10-K Index to FS

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Restricted Cash

As of April 29, 2023, we had restricted cash of $ 16,712 , comprised of $ 15,790 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids Partnership's merchandising agreement and $ 922 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.

As of April 30, 2022, we had restricted cash of $ 11,545 , comprised of $ 10,649 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids Partnership's merchandising agreement and $ 897 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.

As of April 27, 2024, we had restricted cash of $ 18,111 , comprised of $17,146 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $ 965 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.

As of April 29, 2023, we had restricted cash of $ 16,712 , comprised of $ 15,790 in prepaid and other current assets in the consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $ 922 in other noncurrent assets in the consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.

Accounts Receivable

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Accounts receivable are presented on our consolidated balance sheets net of allowances.

An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on

An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historical trends, the financial condition of our customers and an evaluation of economic conditions.

We write-off uncollectible

Index to Form 10-K Index to FS

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(Thousands of dollars, except share and per share data)

historical trends, the financial condition of our customers and an evaluation of economic conditions.

We write-off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer.

trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer.

Allowance for doubtful accounts were $ 867 , and $ 1,156 as of April 27, 2024 and April 29, 2023, respectively.

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Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories.

There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021.

There were no LIFO adjustments in Fiscal 2024 and Fiscal 2023.

For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date.

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For our Wholesale Segment, the four largest suppliers, excluding textbooks purchased from students at our Retail Segment's bookstores, accounted for approximately 24 % of merchandise purchases during the 52 weeks ended April 27, 2024.

As contemplated by the F/L Partnership merchandising partnership agreement, we sold our logo and emblematic general merchandise inventory to Lids and received proceeds of $ 41,773 , and recognized a merchandise inventory loss on the sale of $ 10,262 in cost of goods sold in the consolidated statement of operations during the 52 weeks ended May 1, 2021 for the Retail Segment.

The final inventory sale price was determined during the first quarter of Fiscal 2022, at which time, we received additional proceeds of $ 1,906 , and recognized a merchandise inventory loss on the sale of $ 434 in cost of goods sold in the consolidated statement of operations for the Retail Segment.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 1.

Organization.

Additionally, during the 52 weeks ended May 1, 2021, we also recognized a merchandise inventory write-off of $ 4,698 in cost of goods sold in the statement of operations for the Retail Segment related to our initiative to exit certain product offerings and streamline/rationalize our overall non-logo general merchandise product assortment resulting from the centralization of our merchandising decision-making during the year.

Textbook Rental Inventories

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Implementation costs incurred in cloud computing arrangements reflected in prepaid and other assets in the consolidated balance sheets were $ 6,367 and $ 9,359 as of April 27, 2024 and April 29, 2023, respectively.

We had $ 6,460 , $ 3,179 , and $ 283 of amortization of implementation costs in selling and administrative expense in the consolidated statement of operations, for the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

We had $ 4,286 and $ 6,460 of amortization of implementation costs in selling and administrative expense in the consolidated statement of operations, for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

Property and Equipment

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Maintenance and repairs are expensed as incurred, however major maintenance and remodeling costs are capitalized if they extend the useful life of the asset.

We had $ 29,401 , $ 30,132 , and $ 33,198 , of depreciation expense in the consolidated statement of operations for the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

We had $ 27,281 and $ 29,401 of depreciation expense in the consolidated statement of operations for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

Content development costs are primarily related to development of courseware.

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Amortization of content development costs is recorded to cost of goods sold.

We had $ 26 , $ 386 , and $ 745 , of content amortization expense in the consolidated statement of operations for the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

We had $ 0 and $ 26 of content amortization expense in the consolidated statement of operations for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Components of property and equipment are as follows:

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$ 228,837 $ ( 134,646 ) $ 94,191

$ 245,617 $ ( 134,985 ) $ 110,632

As of April 29, 2023

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$ 245,617 $ ( 134,985 ) $ 110,632

(a) Other consists of recognized intangibles for non-compete agreements, trade names, and favorable leasehold interests.

(a) Other consists of recognized intangibles for non-compete agreements and trade names

All amortizable intangible assets are being amortized over their useful life on a straight-line basis.

Aggregate Amortization Expense:

For the 52 weeks ended April 27, 2024 $ 13,279

For the 52 weeks ended April 29, 2023 $ 12,761

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

All amortizable intangible assets are being amortized over their useful life on a straight-line basis.

Aggregate Amortization Expense:

For the 52 weeks ended April 29, 2023 $ 12,761

For the 52 weeks ended April 30, 2022 $ 11,992

For the 52 weeks ended May 1, 2021 $ 12,006

Estimated Amortization Expense:

(Fiscal Year)

2024 $ 10,344

2025 $ 10,344

2026 $ 10,344

2027 $ 10,286

After 2029 $ 46,164

For additional information about intangible assets, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies .

We recognize lease assets and lease liabilities on the consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by FASB Accounting Standards Codification (“ASC”) 842, Leases (Topic 842).

See Impairment of Long-Lived Assets below for discussion of impairment loss related to intangible assets.

We recognize lease assets and lease liabilities on the consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases .

We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less).

We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset.

We recognize lease expense related to our college and university contracts as cost of sales in our consolidated statement of operations and we recognize lease expense related to our various office spaces as selling and administrative expenses in our consolidated statement of operations.

For additional information, see Part II - Item 8.

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As of April 29, 2023, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $ 68,153 , $ 246,972 , $ 110,632 , and $ 17,889 , respectively, on our consolidated balance sheet.

These amortizable intangible assets relate primarily to our customer and bookstore relationships with our colleges and university clients, and technology acquired.

For additional information related to amortizable intangibles, see Intangible Assets above.

We review our long-lived assets for impairment whenever events or changes in circumstances, including but not limited to contractual changes, renewals or amendments are made to agreements with our college, university, or K-12 schools, indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets .

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If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Our business has been significantly negatively impacted by the COVID-19 pandemic, as many schools adjusted their learning models and on-campus activities.

Although most academic institutions have since reopened, some are providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes.

Enrollment trends have been negatively impacted overall by COVID-19 concerns at physical campuses.

While many athletic conferences resumed their sport activities, other events, such as parent and alumni weekends and prospective student campus tour activities, some may still be curtailed or offer a virtual option.

These combined events continue to impact the Company’s course materials and general merchandise business.

Many college and universities are providing alternatives to traditional in-person instruction, including online and hybrid learning options.

Additionally, enrollment trends have been negatively impacted at physical campuses.

Many other events, such as parent and alumni weekends and prospective student campus tour activities, offer a virtual option.

These combined events have reduced on-campus activity, as well as increased competition and disintermediation, continue to impact the Company’s course materials and general merchandise business.

During Fiscal 2024, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $ 7,166 (both pre-tax and after-tax), comprised of $ 405 , $ 3,600 , and $ 3,161 of property and equipment, operating lease right-of-use assets, and amortizable intangibles, respectively, on the consolidated statements of operations.

During Fiscal 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $ 6,008 (both pre-tax and after-tax), comprised of $ 708 , $ 1,697 , $ 3,599 and $ 4 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

The significant assumptions used in the income approach included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

During the third quarter of Fiscal 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

During the third quarter of Fiscal 2022, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $ 6,411 (both pre-tax and after-tax), comprised of $ 739 , $ 1,793 , $ 3,668 and $ 211 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

During the third quarter of Fiscal 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $ 27,630 , $ 20,506 after-tax, comprised of $ 5,085 , $ 13,328 , $ 6,278 and $ 2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

The significant assumptions used in the income approach included annual revenue growth rates, gross margin rates and the estimated relationship of selling and administrative costs to revenue used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value.

used to estimate the projected cash-flow directly related to the future operation of the stores as well as the weighted average cost of capital used to calculate the fair value.

Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate.

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Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our consolidated financial statements.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product revenue in our consolidated financial statements.

A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content.

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In these instances, we accelerate any remaining deferred rental revenue at the point of sale.

Revenue for our BNC First Day offerings are recognized consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision.

Revenue recognized for our BNC First Day offerings is consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision.

Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the student drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

We estimate returns based on an analysis of historical experience.

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For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis.

Effective in April 2021, as contemplated by the F/L Partnership's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics.

The transition to Lids for campus stores was effective in April 2021, and the e-commerce websites transitioned to Fanatics throughout Fiscal 2022.

As the logo general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements, as compared to the recognition of logo general merchandise sales on a gross basis in the periods prior to the transition.

Effective in April 2021, as contemplated by the F/L Relationship's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics.

As the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis prior to April 2021.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

We do not have gift card or customer loyalty programs.

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Service and other revenue

Service and other revenue is primarily derived from partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.

Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers.

Service and other revenue is primarily derived from brand marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.

Brand marketing agreements often include multiple performance obligations which are individually negotiated with our customers.

For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract.

The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.

Cost of Sales

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Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting.

Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services.

Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services.

Long-Term Incentive Compensation

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720-35, Advertising Costs .

Advertising costs charged to selling and administrative expenses were $ 9,139 , $ 9,932 , and $ 10,895 in the consolidated statement of operations for the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Advertising costs charged to selling and administrative expenses were $ 5,784 and $ 9,139 in the consolidated statement of operations for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities.

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Income Taxes.

For the fiscal year ended April 30, 2022, the Company filed an application to change its tax year from January to April under the automatic consent provisions.

As a result of the tax year-end change, there is no longer a long-term tax payable associated with the LIFO reserve in other long-term liabilities.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures to improve annual income tax disclosure requirements, primarily to (1) disclose specific categories in the rate reconciliation (2) provide additional information for reconciling items that meet a quantitative threshold, and (3) enhance cash tax payment disclosures.

This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently assessing this guidance and determining the impact on our consolidated financial statements.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance will be effective for the Company for the annual report for the fiscal year ending April 26, 2025 and subsequent interim periods.

Early adoption is permitted, and retrospective adoption is required for all prior periods presented.

We are currently assessing this guidance and determining the impact on our consolidated financial statements .

Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services.

3 unchanged sentences

Financial Statements and Supplementary Data - Note 4.

Segment Reporting for a description of each segments product and service offerings.

Segment Reporting for a description of each segment's product and service offerings.

Disaggregation of Revenue

1 unchanged sentence

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Course Materials Product Sales $ 971,950 $ 927,915

10 unchanged sentences

Total Sales $ 1,567,135 $ 1,543,208

(a) Effective in April 2021, as contemplated by the F/L Partnership's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics.

The transition to Lids for campus stores was effective in April 2021, and the e-commerce websites transitioned to Fanatics throughout Fiscal 2022.

(b) Service and other revenue primarily relates to brand partnerships and other service revenues.

(a) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the consolidated financial statements.

(b) Service and other revenue primarily relates to brand marketing programs and other service revenues.

(c) The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

3 unchanged sentences

Contract assets (unbilled receivables) were $ 0 as of both April 27, 2024 and April 29, 2023 on our consolidated balance sheets.

Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue).

Deferred revenue consists of the following:

• advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;

• unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to our partnership marketing customers;

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue).

Deferred revenue consists of the following:

• advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;

• unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to our partnership marketing customers;

• unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the merchandising contracts for Fanatics and Lids.

18 unchanged sentences

On May 31, 2023, we completed the sale of these assets related to our DSS Segment.

For additional information, see Part II - Item 8.

3 unchanged sentences

Retail and Wholesale.

Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to any specific reporting segment and continue to be presented as “Corporate Services”.

Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to a specific reporting segment and continue to be presented as “Corporate Services”.

We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance.

The following summarizes the three segments.

For additional information about this segments operations, see Part I - Item 1.

The following summarizes the two segments.

For additional information about this segment's operations, see Part I - Item 1.

Retail Segment

The Retail Segment operates 1,245 college, university, and K-12 school bookstores, comprised of 707 physical bookstores and 538 virtual bookstores.

Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products.

The majority of the physical campus bookstores have school-branded e-commerce websites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts.

The Retail Segment offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty requested course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately.

The BNC First Day discounted price is offered as a course fee or included in tuition.

Our bookstores typically operate under agreements with the colleges, universities, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products.

The majority of the physical campus bookstores have school-branded e-commerce websites, which we operate independently or along with our merchant service providers, and which offer students access to required and recommended course materials and affinity products, including emblematic apparel and gifts.

The Retail Segment offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class.

Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Wholesale Segment

4 unchanged sentences

Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Intercompany Eliminations

11 unchanged sentences

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Capital Expenditures from Continuing Operations

10 unchanged sentences

52 weeks ended

April 29, 2023 April 30, 2022 (a)

May 1, 2021 (a)

April 27, 2024 April 29, 2023

Retail $ 1,514,917 $ 1,491,726

17 unchanged sentences

Total Depreciation and Amortization $ 40,560 $ 42,163

Impairment loss (non-cash) - Retail (c)

Impairment loss (non-cash) - Retail (a)

$ 7,166 $ 6,008

Restructuring and Other Charges (c)

Restructuring and Other Charges (b)

Retail $ 571 $ 2,964

2 unchanged sentences

Total Restructuring and Other Charges $ 19,409 $ 10,103

Operating Loss

Operating Income (Loss)

Retail $ 11,457 $ ( 35,095 )

12 unchanged sentences

(Thousands of dollars, except share and per share data)

(a) In Fiscal 2022 and Fiscal 2021, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic.

The impact of which affects the comparability of our results of operations and cash flows.

(b) In Fiscal 2022 and 2021, gross margin includes a merchandise inventory loss and write-off of $ 434 and $ 14,960 , respectively, in the Retail Segment.

See Part II - Item 8.

(a) See Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies - Merchandise Inventories .

Summary of Significant Accounting Policies - Impairment of Long-Lived Assets.

(b) See Part II - Item 8.

Financial Statements and Supplementary Data - Note 9.

1 unchanged sentence

Equity and Earnings Per Share

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $ 0.01 per share, and 5,000,000 shares of preferred stock, par value $ 0.01 per share.

As of April 27, 2024, our authorized capital stock consists of 200,000,000 shares of common stock, par value $ 0.01 per share, and 5,000,000 shares of preferred stock, par value $ 0.01 per share.

As of April 27, 2024, 55,840,166 shares and 53,156,369 shares of our common stock were issued and outstanding, respectively, and 0 shares of our preferred stock were both issued and outstanding.

Our common stock trades on the NYSE under the symbol “BNED”.

Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BNED”.

On October 5, 2023, our shareholders approved an amendment and restatement of the Equity Incentive Plan to increase the number of shares available for issuance by an additional 4,500,000 of our Common Stock.

We have reserved an aggregate of 17,909,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc.

Equity Incentive Plan.

Financial Statements and Supplementary Data - Note 12.

Long-Term Incentive Compensation Expense .

These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

On June 11, 2024, we completed a reverse stock split of the Company’s outstanding shares of common stock at a ratio of 1-for-100 (the “Reverse Stock Split”), which was previously approved by stockholders at a special meeting held on June 5, 2024.

In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock.

The Reverse Stock Split reduced the number of shares of the Company’s outstanding common stock from approximately 2,620,495,552 shares (as of June 11, 2024) to approximately 26,204,956 shares, subject to adjustment for rounding.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders.

7 unchanged sentences

Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.

During the Fiscal 2023, Fiscal 2022 and Fiscal 2021, we did not purchase shares under the stock repurchase program.

During Fiscal 2024 and Fiscal 2023, we did not purchase shares under the stock repurchase program.

As of April 27, 2024, approximately $ 26,669 remains available under the stock repurchase program.

During the Fiscal 2023, Fiscal 2022 and Fiscal 2021, we also repurchased 347,808 , 239,751 shares, and 414,174 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

During Fiscal 2024 and Fiscal 2023, we also repurchased 147,885 shares and 347,808 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

Sale of Treasury Shares

In December 2020 (Fiscal 2021), we entered into a new merchandising partnership with Fanatics and Lids which included a strategic equity investment in the Company.

In December 2020 (Fiscal 2021), we entered into a merchandising agreement with Fanatics and Lids which included a strategic equity investment in the Company.

Fanatics, Inc.

and Lids Holdings, Inc,.

jointly purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $ 15,000 , representing a share price of $ 6.50 per share.

The premium price paid above the fair market value of our common stock at closing was approximately $ 4,131 and was recorded as a contract liability which is recognized over the term of the merchandising contracts for Fanatics and Lids ($ 211 and $ 211 , respectively, in accrued liabilities, and $ 3,498 and $ 3,709 , respectively, as of April 29, 2023 and April 30, 2022, in other long-term liabilities our consolidated balance sheet) which is expected to be recognized over the term of the merchandising contracts for Fanatics and Lids, as discussed in Part II - Item 8.

jointly as TopLids LendCo, LLC (“TopLids”), purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $ 15,000 , representing a share price of $ 6.50 per share.

The premium price paid above the fair market value of our common stock at closing was

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

approximately $ 4,131 and was recorded as a contract liability which is recognized over the term of the merchandising contracts for Fanatics and Lids ($ 211 and $ 211 , respectively, in accrued liabilities, and $ 3,287 and $ 3,498 , respectively, as of April 27, 2024 and April 29, 2023, in other long-term liabilities our consolidated balance sheet) which is expected to be recognized over the term of the merchandising contracts for Fanatics and Lids, as discussed in Part II - Item 8.

Financial Statements and Supplementary Data - Note 1.

Organization - Partnership with Fanatics and Lids .

We paid no other dividends to common stockholders during Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Organization - Relationship with Fanatics and Lids.

For information related to additional equity investments by TopLids subsequent to the end of Fiscal 2024, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 10.

Related Party Transactions and Note 17 Subsequent Events .

We paid no other dividends to common stockholders during Fiscal 2024 and Fiscal 2023.

We do not intend to pay dividends on our common stock in the foreseeable future and dividend payments are not permitted under current or future financing arrangements.

2 unchanged sentences

Subsequent Event for details.

On April 16, 2024, our Board of Directors approved the adoption of a short-term stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock.

Each right will entitle stockholders to buy one one-thousandth of a share of our preferred stock at an established exercise price.

The dividend was payable to holders of record as of the close of business on April 29, 2024.

The rights will be exercisable only if a person or group acquires 10% or more of our outstanding common stock and various other criteria are met (the “Distribution Date”).

Until the Distribution Date, the rights will not be exercisable;

the rights will not be evidenced by separate rights certificates;

and the rights will be transferable by, and only in connection with, the transfer of common stock .

The rights will expire no later than January 31, 2025.

Earnings Per Share

2 unchanged sentences

We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method.

Our participating securities consist solely of

Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock.

The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities.

During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

During Fiscal 2024 and Fiscal 2023, average shares of 32,304 and 47,404 , respectively, were excluded from the diluted earnings per share calculation using the two-class method as their inclusion would have been antidilutive.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

On June 11, 2024, we completed a reverse stock split of the Company’s outstanding shares of common stock at a ratio of 1-for-100 (the “Reverse Stock Split”), which was approved by stockholders at a special meeting held on June 5, 2024.

In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Weighted average shares for both basic and diluted, prior to giving effect to the bonus element of the rights offering and the Reverse Stock Split was 52,935,533 for the 52 weeks ended April 27, 2024.

The weighted average common shares and loss per common share reflect the bonus element resulting from the equity rights offering and the Reverse Stock Split for all periods presented on the consolidated statements of operations.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock.

The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities.

During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

During the Fiscal 2023, Fiscal 2022 and Fiscal 2021, average shares of 4,740,436 , 3,995,990 , and 3,387,185 , respectively, were excluded from the diluted earnings per share calculation using the two-class method as their inclusion would have been antidilutive.

The following is a reconciliation of the basic and diluted earnings per share calculation:

52 weeks ended

(shares in thousands) April 29, 2023 April 30, 2022 May 1, 2021

(shares in thousands) April 27, 2024

April 29, 2023

Numerator for basic and diluted earnings per share:

25 unchanged sentences

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets .

During the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment, and we recognized an impairment loss (non-cash) of $ 6,008 , $ 6,411 , and $ 27,630 ($ 20,506 after-tax), respectively, on the consolidated statement of operations.

The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using our best estimates of the amount and timing of future

During the 52 weeks ended April 27, 2024 and April 29, 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment, and we recognized an impairment loss (non-cash) of $ 7,166 and $ 6,008 , respectively, on the consolidated statement of operations.

The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using our best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies.

The following table shows the fair values of our non-financial assets and liabilities that were required to be remeasured at fair value on a non-recurring basis for each respective period and the total impairments recorded as a result of the remeasurement process:

52 weeks ended April 29, 2023 52 weeks ended April 30, 2022 52 weeks ended May 1, 2021

52 weeks ended April 27, 2024 52 weeks ended April 29, 2023

Carrying Value

2 unchanged sentences

Prior to Impairment Fair Value Impairment Loss

(non-cash) Carrying Value

Prior to Impairment Fair Value Impairment Loss

Property and equipment, net $ 460 $ 55 $ 405 $ 708 $ — $ 708

6 unchanged sentences

The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions.

As of April 29, 2023, we recorded a liability of $ 777 (Level 2 input) which is reflected in accrued liabilities ($ 734 ) and other long-term liabilities ($ 42 ) on the consolidated balance sheet.

As of April 27, 2024, we recorded a liability of $ 8 (Level 2 input) which is reflected in accrued liabilities on the consolidated balance sheet.

As of April 29, 2023, we recorded a liability of $ 777 (Level 2 input) which is reflected in accrued liabilities ($ 734 ) and other long-term liabilities ($ 42 ) on the consolidated balance sheet.

2 unchanged sentences

Long-Term Incentive Compensation Expense .

Maturity Date (a)

April 27, 2024 April 29, 2023

Credit Facility $ 154,154 $ 185,700

FILO Facility — 40,000

Term Loan 30,000 —

Credit Facility December 28, 2024 $ 164,947 $ 154,154

Term Loan April 7, 2025 32,653 30,000

sub-total 197,600 184,154

Deferred financing costs ( 2,003 ) —

Deferred financing costs, Term Loan (b)

( 1,263 ) ( 2,003 )

Total debt $ 196,337 $ 182,151

Balance Sheet classification:

Short-term borrowings $ — $ 40,000

Long-term borrowings $ 196,337 $ 182,151

Total debt $ 182,151 $ 225,700

Credit Facility

We have a credit agreement (the “Credit Agreement”), amended from time to time including on March 31, 2021 and March 1, 2019, under which the lenders committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $ 400,000 (the “Credit Facility”) effective from the March 1, 2019 amendment.

We have the option to request an increase in commitments under the Credit Facility of up to $ 100,000 , subject to certain restrictions.

Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs.

(a) On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including amending and extending the maturity date of the Credit Facility to June 9, 2028 and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

(b) For additional information, see Deferred Financing Costs below.

These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $ 100,000 maintaining the maximum availability under the Credit Agreement at $ 500,000 .

As of July 31, 2022, the FILO Facility was repaid according to its terms and future commitments under the FILO Facility were reduced to $ 0 .

On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event.

For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.

As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement).

See Part II - Item 8.

Upon closing of the Transactions on June 10, 2024:

The Transactions infused approximately $ 80,000 of net cash proceeds after transaction costs.

The transaction resulted in Immersion obtaining controlling financial interest.

• We refinanced our Credit Facility providing access to a $ 325,000 facility maturing in 2028.

The refinanced Credit Facility will meaningfully enhance our financial flexibility and reduce our annual interest expense.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023 .

We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.

On May 24, 2023 and July 28, 2023, subsequent to quarter end, we amended the Credit Agreement to extend the maturity date, as well as other changes as described in Part II - Item 8.

Subsequent Events.

Credit Facility

As of April 27, 2024, we are party to a credit agreement (the “Credit Agreement”), which was amended from time to time including on April 16, 2024, March 12, 2024, December 12, 2023, October 10, 2023, July 28, 2023, May 24, 2023, March 8, 2023, March 31, 2021, and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $ 400,000 (the “Credit Facility”) effective from the March 1, 2019 amendment.

We had the option to request an increase in commitments under the Credit Facility of up to $ 100,000 , subject to certain restrictions.

Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs.

The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for $ 100,000 maintaining the maximum availability under the Credit Agreement at $ 500,000 .

As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $ 0 .

See Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

As of April 29, 2023, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility.

This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

During the 52 weeks ended April 29, 2023, we borrowed $ 590,303 and repaid $ 631,849 under the Credit Agreement, and had outstanding borrowings of $ 154,154 as of April 29, 2023, comprised entirely of borrowing under the Credit Facility and $ 0 under the FILO Facility, which was repaid on August 1, 2022.

During the 52 weeks ended April 30, 2022, we borrowed $ 632,220 and repaid $ 584,120 under the Credit Agreement, and had outstanding borrowings of $ 185,700 and $ 40,000 under the Credit Facility and FILO Facility, respectively, as of April 30, 2022.

During the 53 weeks ended May 1, 2021, we borrowed $ 722,600 and repaid $ 719,700 under the Credit Agreement, and had outstanding borrowings of $ 127,600 and $ 50,000 under the Credit Facility and FILO Facility, respectively, as of May 1, 2021.

As of April 27, 2024, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.

During the 52 weeks ended April 27, 2024, we borrowed $ 563,023 and repaid $ 552,230 under the Credit Agreement, with $ 164,947 of outstanding borrowings under the Credit Facility as of April 27, 2024.

During the 52 weeks ended April 29, 2023, we borrowed $ 590,303 and repaid $ 631,849 under the Credit Agreement, with $ 154,154 of outstanding borrowings as of April 29, 2023, comprised entirely of borrowing under the Credit Facility and $0 under the FILO Facility, which was repaid on August 1, 2022.

As of April 27, 2024 and April 29, 2023, we issued $ 3,575 and $ 2,059 , respectively, in letters of credit under the Credit Facility.

During the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021 we incurred debt issuance costs totaling $ 4,081 , $ 265 , and $ 1,076 , respectively.

The following is a summary of the various Credit Agreement amendments.

March 2023 Credit Agreement Amendment

On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, no later than May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event.

For additional information related to the

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.

As noted above, the amendment required the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement).

Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023 .

During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment.

The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the consolidated balance sheets, and subsequently amortized ratably over the term of the Credit Agreement.

On June 7, 2022, we entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC and we entered into an amendment to our existing Credit Agreement, which permitted us to incur the Term Loan Facility (as defined below).

For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022.

May 2023 Credit Agreement Amendment

On May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023.

We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment.

For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023.

July 2023 Credit Agreement Amendment

There can be no guarantee or assurances that any such transaction or transactions be consummated.

For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $11,516 related to the July 2023 Credit Agreement amendment.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

The Term Loan Credit Agreement provides for term loans in an amount equal to $ 30,000 (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on June 7, 2024.

The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility.

During the 52 weeks ended April 29, 2023, we borrowed $ 30,000 and repaid $ 0 under the Term Loan Credit Agreement, with $ 30,000 of outstanding borrowings as of April 29, 2023.

On May 24, 2023 and July 28, 2023, subsequent to quarter end, we amended the Term Loan Agreement to extend the maturity date, as well as other changes as described in Part II - Item 8.

October 2023 Credit Agreement Amendment

On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement.

The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (a) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement.

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $1,428 related to the October 2023 Credit Agreement amendment.

December 2023 Credit Agreement Amendment

On December 12, 2023, we amended our existing Credit Agreement to, among other things:

(i) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times to be greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 or, subject to the satisfaction of certain conditions relating to the repayment of the Credit Agreement in full, (B) (a) $20,000 for the period of December 8, 2023 through January 12, 2024, (b) $25,000 for the period from January 26, 2024 through February 9, 2024, (c) $25,000 for the period of April 1, 2024 through April 30, 2024 and (d) $30,000 for the period of May 1, 2024 through May 31, 2024, and (ii) revise certain reporting requirements under the Credit Agreement.

The amendment also revised the Specified Liquidity Transaction Fee introduced in the October 2023 Credit Agreement Amendment such that the $3,800 became due and was paid on January 31, 2024.

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $4,047 related to the December 2023 Credit Agreement amendment.

For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated December 12, 2023 and filed with the SEC on December 13, 2023.

March 2024 Credit Agreement Amendment

On March 12, 2024, we amended our existing Credit Agreement to, among other things, (i) revise certain reporting requirements under the Credit Agreement and (ii) set certain milestones for liquidity and refinancing contingency plans, with respect to which we must execute a binding commitment no later than April 3, 2024 (as may be extended by the administrative agent to April 10, 2024).

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $1,929 related to the March 2024 Credit Agreement amendment.

April 2024 Credit Agreement Amendment

On April 16, 2024, we amended our existing Credit Agreement to, among other things, revise certain milestones related to the previously-disclosed liquidity and refinancing contingency plans to align such milestones with the Transactions contemplated by the Purchase Agreement (as defined in Note 17.

Subsequent Events ) (the “Twelfth Amendment to Credit Agreement”), which milestones include (i) filing the Form S-1 no later than two (2) business days after the date of such amendment, (ii) obtaining receipt of support letters in support of the Transactions from persons owning not less than 20% of the outstanding voting stock of the Company by no later than May 3, 2024 (or such later date as agreed to in writing by the administrative agent in its sole discretion), (iii) obtaining receipt of the Securities and Exchange Commission (“SEC”) approval with respect to such Form S-1 on or before May 24, 2024 (or such later date as agreed to in writing by the administrative agent in its sole discretion) and (iv) closing the Transactions contemplated by the Purchase Agreement on or before the date that is 25 days after the receipt of SEC approval with respect to the Form S-1.

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $851 related to the April 2024 Credit Agreement amendment.

On June 10, 2024, subsequent to the end of the quarter, we amended and extended the Credit Agreement to provide access to a $ 325,000 facility (the “ABL Facility”) maturing in 2028.

The refinanced ABL Facility will meaningfully enhance our financial flexibility and reduce our annual interest expense.

For information on the refinanced Credit Agreement terms, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $3,184 related to the Term Loan Credit Agreement.

The debt issuance costs have been deferred and are presented as a reduction to the long-term borrowings in the consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

to incur the Term Loan Facility (as defined below).

For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022.

The Term Loan Credit Agreement provides for term loans in an amount equal to $ 30,000 (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on April 7, 2025.

The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility.

During the 52 weeks ended April 27, 2024, we incurred $ 2,652 for interest in kind on the Term Loans and repaid $ 0 under the Term Loan Credit Agreement, with $ 32,652 of outstanding borrowings as of April 27, 2024.

During the 52 weeks ended April 29, 2023, we borrowed $ 30,000 and repaid $ 0 under the Term Loan Credit Agreement, with $ 30,000 of outstanding borrowings as of April 29, 2023.

The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly.

We have the right, through December 31, 2022, to pay all or a portion of the interest on the Term Loans in kind.

To date, all interest on the term loan has been paid in cash.

All interest on the Term Loan prior to July 29, 2023 was paid in cash.

Subsequent to July 29, 2023, all interest incurred on the Term Loan was incurred in kind as permitted under the July 2023 Term Loan Amendment and is part of the outstanding debt balance.

The Term Loans do not amortize prior to maturity.

Solely to the extent that any Term Loans remain outstanding on June 7, 2023, we paid a fee of 1.5% of the outstanding principal amount of the Term Loans on such date.

The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions.

1 unchanged sentence

The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000.

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed certain equity transactions to substantially deleverage our consolidated balance sheet, including converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock .

For information on the Term Loan Credit Agreement conversion transaction subsequent to the end of Fiscal 2024, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

The following is a summary of the various Term Loan Credit Agreement amendments.

March 2023 Term Loan Credit Agreement Amendment

On March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement.

In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without consent from lenders under the Term Loan Credit Agreement).

For additional information, see the Company's Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.

During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment.

We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement.

The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.

July 2023 Term Loan Credit Agreement Amendment

We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).

For additional information, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $499 related to the July 2023 Term Loan Credit Agreement amendment.

Deferred Financing Costs

The debt issuance costs have been deferred and are presented as noted below in the consolidated balance sheets and are subsequently amortized ratably over the term of respective debt.

Dollars in thousands As of

Balance Sheet Location

Maturity Date/

Amortization Term (a)

April 27, 2024 April 29, 2023

Credit Facility - Prepaid and Other Current Assets

December 28, 2024 $ — $ 3,776

Credit Facility - Other noncurrent assets

Credit Facility - sub-total

Term Loan - Contra Debt

April 7, 2025 1,263 2,003

Total deferred financing costs

$ 14,160 $ 7,038

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Interest Expense

The following table presents interest expense on the consolidated statement of operations and cash interest paid during the 52 week periods:

52 weeks ended

April 27, 2024 April 29, 2023

Interest Incurred

Credit Facility $ 24,409 $ 16,994

Term Loan 3,984 3,078

Total Interest Incurred $ 28,393 $ 20,072

Amortization of Deferred Financing Costs

Credit Facility $ 11,910 $ 1,948

Term Loan 1,240 1,181

Total Amortization of Deferred Financing Costs $ 13,150 $ 3,129

Interest Income, net of expense $ ( 1,178 ) $ ( 518 )

Total Interest Expense $ 40,365 $ 22,683

Cash Interest Paid

$ 24,943 $ 19,024

We recognize lease assets and lease liabilities on the consolidated balance sheets for substantially all lease arrangements based on the present value of future lease payments as required by ASC 842, Leases (Topic 842).

3 unchanged sentences

We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

We recognize a right of use (“ROU”) asset and lease liability in our consolidated balance sheets for leases with a term greater than twelve months.

7 unchanged sentences

We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

The following table summarizes lease expense:

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Variable lease expense $ 69,550 $ 69,570

1 unchanged sentence

Net lease expense $ 192,513 $ 204,607

The increase in lease expense is primarily due to higher sales for contracts based on a percentage of revenue and the impact of the timing due to contract renewals, and the increase in minimum contractual guarantees which were temporarily eliminated in the prior years due to limited on campus store traffic resulting from the COVID-19 pandemic.

The decrease in lease expense is primarily due to lower commission rates related to the shift from physical to digital course materials, closed stores, and the impact of the timing due to contract renewals, partially offset by higher sales for contracts based on a percentage of sales.

The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of April 27, 2024:

10 unchanged sentences

Future lease payment obligations related to leases that were entered into, but did not commence as of April 27, 2024, were not material.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

The following summarizes additional information related to our operating leases:

April 29, 2023 April 30, 2022 May 1, 2021

Weighted average remaining lease term (in years) 5.3 years 6.2 years 5.5 years

April 27, 2024 April 29, 2023

Weighted average remaining lease term (in years) 4.6 years 5.3 years

Weighted average discount rate 4.8 % 4.7 %

3 unchanged sentences

Supplementary Information

Impairment Loss (non-cash)

For information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies .

During the 52 weeks ended April 29, 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

During the 52 weeks ended April 30, 2022, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

During the 52 weeks ended May 1, 2021, we recognized an impairment loss (non-cash) of $ 27,630 , $ 20,506 after-tax, in the Retail segment comprised of $ 5,085 , $ 13,328 , $ 6,278 and $ 2,939 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively, on the consolidated statement of operations.

Restructuring and Other Charges

During the 52 weeks ended April 27, 2024, we recognized restructuring and other charges totaling $ 19,409 , comprised primarily of $ 19,651 for costs associated with professional service costs for restructuring (as discussed below) and process improvements, and $ 1,097 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($ 33 is included in accrued liabilities in the consolidated balance sheet as of April 27, 2024), partially offset by a $ 1,339 in an actuarial gain related to a frozen retirement benefit plan (non-cash).

Pursuant to the July 28, 2023 Credit Agreement amendment, the Board established a committee consisting of three independent directors to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement).

Restructuring and other charges include costs associated with the costs of this committee, as well as other related legal and advisory professional service costs.

and provide additional flexibility for working capital needs.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

During the 52 weeks ended April 29, 2023, we recognized restructuring and other charges totaling $ 10,103 , comprised primarily of $ 4,359 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, ($ 1,712 is included in accrued liabilities in the consolidated balance sheet as of April 29, 2023), and $ 5,744 for costs primarily associated with professional service costs for restructuring and process improvements.

During the 52 weeks ended April 30, 2022, we recognized restructuring and other charges totaling $ 944 , comprised primarily of $ 1,250 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($ 71 is included in accrued liabilities in the consolidated balance sheet as of April 30, 2022) and $ 1,825 for costs associated with professional service costs for restructuring, process improvements, development and integration associated with the F/L Partnership, shareholder activist activities, and liabilities for a facility closure, partially offset by a $ 2,131 in an actuarial gain related to a frozen retirement benefit plan (non-cash).

During the 52 weeks ended May 1, 2021, we recognized restructuring and other charges totaling $ 10,107 , comprised primarily of $ 6,035 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, $ 5,213 for professional service costs related to restructuring, process improvements, the financial advisor strategic review process, costs related to development and integration associated with the F/L Partnership and shareholder activist activities, and $ 454 related to liabilities for a facility closure, partially offset by a $ 1,595 in an actuarial gain related to a frozen retirement benefit plan (non-cash).

Related Party Transactions

7 unchanged sentences

Rent payments to MBS Realty Partners L.P.

were approximately $ 1,150 , $ 1,380 and $ 1,380 during the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

Employee Benefit Plans

We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC and DSS.

MBS maintains a profit sharing plan covering substantially all full-time employees of MBS.

For all plans, we are responsible to fund the employer contributions directly, if any.

Total employee benefit expense for these plans was $ 4,391 , $ 3,200 , and $ 0 , during the 52 weeks ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively.

Effective April 2020, due to the significant impact as a result of COVID-19 related campus store closures, we temporarily suspended employer matching contributions into our 401(k) plans.

The matching contributions were reinstated effective July 25, 2021.

were approximately $ 690 and $ 1,150 during the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

TopLids LendCo, LLC

In December 2020 (Fiscal 2021), we entered into the F/L Relationship to execute a merchandising agreement with Fanatics and Lids which included a strategic equity investment in the Company.

Fanatics, Inc.

and Lids Holdings, Inc,.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

TopLids LendCo, LLC (“TopLids”), purchased an aggregate 2,307,692 of our common shares.

On June 7, 2022, we entered into a Term Loan Credit Agreement with TopLids LendCo, LLC and Vital Fundco, LLC (see discussion below).

TopLids will own more than 5% of our Common Stock outstanding following the closing of the transactions.

Total commission revenue from the F/L Relationship was $ 126,886 and $ 145,416 , during the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 1.

Organization, Note 5.

Equity and Earnings Per Share, Note 7.

Debt, and Note 17.

Subsequent Events.

VitalSource Technologies, Inc.

On June 7, 2022, we entered into a Term Loan Credit Agreement with TopLids LendCo, LLC (see discussion above) and Vital Fundco, LLC (a subsidiary of Vital Technologies, Inc.

(“VitalSource”)).

We have contracted with VitalSource to provide digitally formatted courseware, from all major publishers.

VitalSource will own more than 5% of our Common Stock outstanding following the closing of the transactions.

Total purchases from the VitalSource were $ 331,232 and $ 249,464 , during the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 1.

Organization, Note 5.

Equity and Earnings Per Share, Note 7.

Debt, and Note 17.

Subsequent Events.

Employee Benefit Plans

We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC.

MBS maintains a profit sharing plan covering substantially all full-time employees of MBS.

For all plans, we are responsible to fund the employer contributions directly, if any.

Total employee benefit expense for these plans was $ 1,687 and $ 4,391 , during the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

Commencing in September 2023, we revised the 401(k)-retirement savings plan to an annual end of plan year discretionary match, in lieu of the current pay period match.

Long-Term Incentive Compensation Expense

2 unchanged sentences

Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and stock options.

During the 52 weeks ended April 27, 2024, no equity share awards were granted to employees or board members.

We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years.

12 unchanged sentences

The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee.

Shares associated with unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested).

Restricted stock units generally vest over a period of three years, but will have a minimum vesting period of one year.

Performance Share Awards

PS awards and PSU awards were granted to employees.

Each PS and PSU may be redeemed for one share of our common stock once vested and are generally subject to forfeiture if employment terminates prior to the release of the restrictions.

The grantee cannot transfer the PS or PSU awards except in very limited circumstances and with the consent of the compensation committee.

Shares of unvested PSU awards have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares or units, as the case may be, have vested).

The PS and PSU awards will only vest based upon the achievement of pre-established performance goals related to Adjusted EBITDA, segment revenue, new business, and/or total shareholder return performance achieved over a period of time.

The PS and PSU awards will vest based on company performance and/or market conditions during the subsequent two year period with one additional year of time-based vesting.

The number of PS and PSU awards that will vest range from 0%-150% of the target award based on actual performance.

Phantom Shares

During Fiscal 2022, we granted 183,348 phantom share units granted to employees.

Each phantom share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed $ 32.40 per share.

The phantom shares vest and will be settled in three equal installments commencing one year after the date of grant.

The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model.

The average fair value on the date of grant was $ 8.50 per phantom share using risk-free rates ranging from 0.08%-0.53% for the three tranches and annual volatility ranging from 78%-92% for the three tranches.

As of April 29, 2023, we recorded a liability of $ 777 (Level 2 input) related to phantom share units grants of which $ 734 and $ 42 is reflected in accrued liabilities and other long-term liabilities, respectively, on the consolidated balance sheet.

As of April 30, 2022, we recorded a liability of $ 2,774 (Level 2 input) related to phantom share units grants of which $ 1,726 and

Shares associated with unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

$ 1,048 is reflected in accrued liabilities and other long-term liabilities, respectively, on the consolidated balance sheet, respectively.

the units have vested).

Restricted stock units generally vest over a period of three years, but will have a minimum vesting period of one year.

Phantom Shares

Phantom share units were granted to employees.

The phantom shares vest and settle in three equal installments commencing one year after the date of grant.

The fair value of the phantom shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model.

As of April 27, 2024, we recorded a liability of $ 8 (Level 2 input) related to phantom share units grants which is reflected in accrued liabilities on the consolidated balance sheet.

Stock Options

1 unchanged sentence

The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options.

During Fiscal 2023, we granted 322,495 stock options with an exercise price of $ 2.36 per stock option, which was the fair market value on the date of grant (Stock Option Grant #1) and 348,723 stock options with an exercise price of $ 4.86 per stock option (Stock Option Grant #2) granted to employees.

The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term.

Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.

The following summarizes the stock option fair value assumptions:

Stock Option Grant #1 Stock Option Grant #2

Exercise Price $ 2.36 $ 4.86

Valuation method utilized Black-Scholes Monte Carlo

Risk-free interest rate 3.28 % 3.28 %

Expected option term 6.3 years 10.0 years

Company volatility 74 % 74 %

Dividend yield — % — %

Grant date fair value per award $ 1.61 $ 1.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term.

For Stock Option Grant #1, we are permitted to use the simplified approach to estimate the expected term of the stock options, which typically assumes exercise occurs at the mid-point between the end of the vesting period and the expiration date.

The simplified approach is not allowed for premium-priced options (Stock Option Grant #2), which were estimated using a stock price multiple, as there is no option exercise history which to base an early exercise option.

The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options.

Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten year term.

Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.

Long-Term Incentive Compensation Activity

The following table presents a summary of awards activity related to our current Equity Incentive Plan:

Restricted Stock Awards Restricted Stock Units

In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

The following table presents a summary of awards activity related to our current Equity Incentive Plan and reflects the Reverse Stock Split for all periods presented:

Restricted Stock Awards Restricted Stock Units Phantom Shares

Shares Weighted

1 unchanged sentence

Shares Weighted

Grant Date Fair Value

Balance, April 30, 2022 35,412 $ 10.59 1,205,079 $ 8.71

Granted 11,804 $ 2.30 990,875 $ 2.37

Vested ( 35,412 ) $ 10.59 ( 627,330 ) $ 7.00

Forfeited — $ — ( 477,651 ) $ 5.54

Balance, April 29, 2023 11,804 $ 2.30 1,090,973 $ 5.33

Performance Share Units Phantom Shares

Shares Weighted

Grant Date Fair Value Number of

3 unchanged sentences

Vested ( 118 ) $ 230.00 ( 4,260 ) $ 541.00 ( 5,048 ) $ 253.00

Forfeited (a)

( 286,747 ) $ 2.23 ( 216,595 ) $ 3.02

Forfeited — $ — ( 1,797 ) $ 590.00 ( 505 ) $ 273.00

Balance, April 27, 2024 — $ — 4,853 $ 504.00 468 $ 850.00

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Stock Options

4 unchanged sentences

Granted — $ — $ —

Exercised (b)

Exercised (a)

Forfeited — $ — $ —

2 unchanged sentences

Exercisable, April 27, 2024 15,369 $ 223.00 $ 498.00

(a) The PSUs forfeitures reflect a cumulative adjustment to reflect changes to the expected level of achievement of the respective grants.

(b) During the period ended April 29, 2023, no options were exercised with a total intrinsic value of $ 0 .

(a) During the period ended April 27, 2024, no options were exercised with a total intrinsic value of $ 0 .

The aggregate grant date fair value of stock options that vested during the 52 weeks ended April 27, 2024 and April 29, 2023 was $ 1,540 and $ 1,903 , respectively.

There were no stock options that vested during the 52 weeks ended May 1, 2021.

Total fair value of vested share awards during the periods ended April 29, 2023, April 30, 2022, and May 1, 2021 was $ 8,851 , $ 9,651 , and $ 6,631 , respectively.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Total fair value of vested share awards during the periods ended April 27, 2024 and April 29, 2023 was $ 4,405 and $ 8,851 , respectively.

Long-Term Incentive Compensation Expense

1 unchanged sentence

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024

April 29, 2023

Stock-based awards

11 unchanged sentences

Income Taxes - Continuing Operations

For Fiscal 2023, Fiscal 2022 and Fiscal 2021, we had no material revenue or expense in jurisdictions outside the United States other than India.

For Fiscal 2024 and Fiscal 2023, we had no material revenue or expense in jurisdictions outside the United States other than India.

Impact of U.S.

1 unchanged sentence

We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contribution and net operating loss limitations (“NOLs”), modifications to the deductibility of business interest expense, as well as Alternative Minimum Tax (“AMT”) credit acceleration.

The most significant impact of the legislation for the Company was an income tax benefit of $ 7,164 for the carryback of NOLs to higher tax rate years, recorded in Fiscal 2021.

The most significant impact of the legislation for the Company was an income tax benefit of $ 7,164 for the carryback of NOLs to higher

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

tax rate years, recorded in Fiscal 2021.

As of April 29, 2024, we recognized a current income tax receivable for NOL carrybacks in prepaid and other current assets on the consolidated balance sheet.

We received a $ 7,841 refund in Fiscal 2022, a $ 15,774 refund in Fiscal 2023 and expect to receive additional refunds of approximately $ 10,019 .

Income tax benefits for Fiscal 2023, Fiscal 2022 and Fiscal 2021 are as follows:

We received a $ 15,774 refund in Fiscal 2023 and a $ 7,621 refund in Fiscal 2024 and expect to receive additional refunds of approximately $ 2,403 in Fiscal 2025.

Income tax benefits for Fiscal 2024 and Fiscal 2023 are as follows:

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Federal $ — $ —

3 unchanged sentences

Federal ( 552 ) 458

State — 4,113 ( 1,970 )

International — —

1 unchanged sentence

Total US tax provision $ 183 $ 1,011

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:

52 weeks ended

April 29, 2023 April 30, 2022 May 1, 2021

April 27, 2024 April 29, 2023

Federal statutory income tax rate (a)

2 unchanged sentences

Permanent book / tax differences ( 1.7 ) ( 1.2 )

CARES Act NOL Carryback — — 4.1

Valuation allowance ( 24.6 ) ( 12.3 ) ( 4.2 )

Changes in valuation allowance

( 23.0 ) ( 24.6 )

Other, net ( 0.6 ) 0.1

Effective income tax rate ( 0.3 ) % ( 1.1 ) %

The effective tax rate for Fiscal 2023 is significantly lower as compared to the prior year comparable period due to the valuation allowance benefit of changing the tax fiscal year in the prior year.

The effective tax rate for Fiscal 2024 is materially consistent with the prior year.

One percentage point on our Fiscal 2024 effective tax rate is approximately $ 623 .

The permanent book / tax differences are principally comprised of non-deductible officer's compensation, and non-deductible stock compensation.

The other permanent book/tax differences are principally comprised of non-deductible officer's compensation, and non-deductible stock compensation.

We account for income taxes using the asset and liability method.

Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

The significant components of our deferred taxes consisted of the following:

10 unchanged sentences

Interest carryforwards 14,897 7,246

Property and equipment 795 —

Other 4,052 2,456

9 unchanged sentences

Net deferred tax liability $ ( 1,289 ) $ ( 1,838 )

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

As of April 29, 2023, we had $ 0 of unrecognized tax benefits.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at May 2, 2020 $ 52

Additions for tax positions of the current period —

Additions for tax positions of prior periods —

Reductions due to settlements —

Other reductions for tax positions of prior periods ( 52 )

Balance at May 1, 2021 $ —

Additions for tax positions of the current period —

Additions for tax positions of prior periods —

Reductions due to settlements —

Other reductions for tax positions of prior periods —

Balance at April 30, 2022 $ —

Additions for tax positions of the current period —

Additions for tax positions of prior periods —

Reductions due to settlements —

Other reductions for tax positions of prior periods —

Balance at April 29, 2023 $ —

As of April 27, 2024 and April 29, 2023, we had $ 0 of unrecognized tax benefits.

Our policy is to recognize interest and penalties related to income tax matters in income tax expense.

11 unchanged sentences

Some earlier years remain open for a small minority of states.

Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters.

The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Potential Limitation to Future Tax Attribute Utilization

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change” (generally defined as a cumulative change in our ownership by “5-percent shareholders” that exceeds 50

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

percentage points over a rolling three-year period), the corporation’s ability to use its pre-change net operating losses and certain other pre-change tax attributes to offset its post-change income and taxes may be limited.

Similar rules may apply under state tax laws.

As a result of the rights offering, backstop commitment, private investment, and debt conversion completed on June 10, 2024, we may have experienced an ownership changes as defined by Sections 382 and 383.

The Company intends to perform a study to determine if an ownership change has occurred.

If it is determined that an ownership change has occurred under Section 382 and 383, we expect any corresponding annual limitations to severely impact the future utilization of our tax attributes including our $ 265,522 NOL carryforward.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Legal Proceedings

The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Commitments and Contingencies

7 unchanged sentences

1-3 Years 6,497

3-5 Years 476

Total $ 18,563

9 unchanged sentences

Loss from discontinued operations, net of tax $ ( 417 ) $ ( 674 ) $ 289 $ 72 $ ( 730 )

Net (loss) income $ ( 52,707 ) $ 22,144 $ ( 25,049 ) $ ( 46,250 ) $ ( 101,862 )

Net (loss) income (b)(c)(d)

$ ( 50,388 ) $ 24,180 $ ( 9,639 ) $ ( 27,364 ) $ ( 63,211 )

(Loss) earnings per common share:

7 unchanged sentences

2,648 2,655 2,673 2,673 2,662

(a) For information related to quarterly seasonality and other variance components, see Part II - Item 7.

Management Discussion and Analysis - Results of Operations and Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies - Seasonality .

(b) (Loss) income from continuing operations includes $ 375 , $ 260 , $ 4,127 , and $ 5,341 of restructuring and other charges for the 13 weeks ended July 30, 2022, October 29, 2022, January 28, 2023 and April 29, 2023, respectively, and $ 10,103 for the 52 weeks ended April 29, 2023.

(c) (Loss) income from continuing operations includes an impairment loss (non-cash) of $ 6,008 for the 13 weeks ended January 28, 2023 and 52 weeks ended April 29, 2023.

(d) (Loss) income from continuing operations includes $ 7,011 and $ 22,683 of interest expense for the 13 and 52 weeks ended April 29, 2023, respectively.

Interest expense increased by $ 4,724 and $ 12,587 primarily due to higher borrowings and higher interest rates compared to the prior year.

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

(a) For information related to quarterly seasonality and other variance components, see Part II - Item 7.

Management Discussion and Analysis - Results of Operations and Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies - Seasonality .

(b) Includes $ 4,633 , $ 4,274 , $ 3,413 , and $ 7,089 of restructuring and other charges for the 13 weeks ended July 29, 2023, October 28, 2023, January 27, 2024 and April 27, 2024, respectively, and $ 19,409 for the 52 weeks ended April 27, 2024.

(c) Includes $ 0 , $ 0 , $ 5,798 , and $ 1,368 of impairment loss (non-cash) for the 13 weeks ended July 29, 2023, October 28, 2023, January 27, 2024 and April 27, 2024, respectively, and $ 7,166 for the 52 weeks ended April 27, 2024.

(d) Includes $ 8,254 , $ 10,664 , $ 10,620 , and $ 10,827 of interest expense for the 13 weeks ended July 29, 2023, October 28, 2023, January 27, 2024 and April 27, 2024, respectively, and $ 40,365 for the 52 weeks ended April 27, 2024.

The increase in interest expense is primarily due to higher borrowings, higher interest rates and increased amortization of deferred financing costs.

(e) On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

13 weeks ended (a)

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Loss from discontinued operations, net of tax $ ( 2,385 ) $ ( 2,024 ) $ ( 2,915 ) $ ( 4,398 ) $ ( 11,722 )

Net (loss) income (

Net (loss) income (b)(c)(d)

$ ( 52,707 ) $ 22,144 $ ( 25,049 ) $ ( 46,250 ) $ ( 101,862 )

3 unchanged sentences

Total Basic Earnings per share

$ ( 20.09 ) $ 8.39 $ ( 9.47 ) $ ( 17.48 ) $ ( 38.61 )

Weighted average common shares outstanding - Basic:

9 unchanged sentences

Summary of Significant Accounting Policies - Seasonality .

(b) (Loss) income from continuing operations includes $ 1,905 , $ 1,116 , $ 46 , and $( 2,123 ) of restructuring and other charges for the 13 weeks ended July 31, 2021, October 30, 2021, January 29, 2022 and April 30, 2022, respectively, and $ 944 for the 52 weeks ended April 30, 2022.

(c) (Loss) income from continuing operations also includes an impairment loss (non-cash) of $ 6,411 for the 13 weeks ended January 29, 2022 and 52 weeks ended April 30, 2022.

(d) (Loss) income from continuing operations includes $( 9,608 ) and $( 9,152 ) of an income tax benefit for the 13 and 52 weeks ended April 30, 2022, respectively.

The income tax benefit was primarily due to the change in pre-tax loss and the change in the assessment of the realization of deferred tax assets, driven by a change in our tax year.

(b) Includes $ 375 , $ 260 , $ 4,127 , and $ 5,341 of restructuring and other charges for the 13 weeks ended July 30, 2022, October 29, 2022, January 28, 2023 and April 29, 2023, respectively, and $ 10,103 for the 52 weeks ended April 29, 2023.

(c) Includes $ 0 , $ 0 , $ 6,008 , and $ 0 of impairment loss (non-cash) for the 13 weeks ended July 30, 2022, October 29, 2022, January 28, 2023 and April 29, 2023, respectively, and $ 6,008 for the 52 weeks ended April 29, 2023.

(d) Includes $ 3,868 , $ 4,886 , $ 6,918 , and $ 7,011 of interest expense for the 13 weeks ended July 30, 2022, October 29, 2022, January 28, 2023 and April 29, 2023, respectively, and $ 22,683 for the 52 weeks ended April 29, 2023.

(e) On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering.

On June 11, 2024, subsequent to the end of Fiscal 2024, we completed a reverse stock split of our outstanding shares of common stock at a ratio of 1-

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

for-100 in which every 100 shares of the common stock issued and outstanding was converted into one share of our common stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

May 2023 Debt Amendments

On May 24, 2023, subsequent to quarter end, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023.

For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023.

July 2023 Debt Amendments

Subsequent Events

On June 5, 2024, our shareholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to increase the aggregate number of authorized shares of Common Stock from 200,000,000 shares to 10,000,000,000 shares, and approved the transactions (the “Transactions”) as outlined below pursuant to a Standby, Securities Purchase and Debt Conversion Agreement, dated as of April 16, 2024, by and among the Company and certain investors (the “Purchase Agreement”) .

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various Transactions to substantially deleverage our consolidated balance sheet.

These Transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program.

The proceeds will be used to reduce the balance under the Company’s existing Credit Facility and pay expenses in connection with the Transactions.

For additional information related to the Transactions, see the Company’s Report on Form 8-K dated June 11, 2024.

For information related to the Credit Agreement and Term Loan Credit Agreement prior to the execution of these Transaction, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 7.

Upon closing of the Transactions on June 10, 2024:

The Transactions infused approximately $ 80,000 of net cash proceeds after transaction costs.

The transaction resulted in Immersion obtaining controlling financial interest.

See Private Investment, Rights Offering, and Backstop Commitment below;

• Our existing Term Loan Credit Agreement lenders, TopLids LendCo, LLC (“TopLids”) and Vital Fundco, LLC (“VitalSource”), converted approximately $ 34,000 of outstanding principal and any accrued and unpaid interest into shares of our common stock.

See Term Loan Credit Agreement Debt Conversion below;

• We amended and extended our existing asset based loan facility (the “Credit Facility”) providing access to a $ 325,000 revolving loan facility (the “Restated ABL Facility”) maturing in 2028.

The amended ABL Facility will meaningfully enhance our financial flexibility and reduce our annual interest expense.

See Restated ABL Facility terms below.

Private Investment, Rights Offering, and Backstop Commitment

Immersion and VitalSource purchased approximately $ 45,000 and $ 5,000 , respectively, in shares of our Common Stock, at the Subscription Price, defined below, in a private placement exempt from the registration requirements under the Securities Act and separate from the Rights Offering (the “Private Investment”).

The Private Investment is in addition to shares of Common Stock purchased by Immersion pursuant to the Backstop Commitment discussed below.

Through the Rights Offering, we issued 900,000,000 shares of our common stock at a cash subscription price (the “Subscription Price”) of $0.05 per share.

In the Rights Offering, we distributed to each holder of Common Stock, one non-transferable subscription right (each, a “Subscription Right”) for every share of Common Stock owned by such holder on May 14, 2024 (the “Record Date”), and each Subscription Right entitled the holder to purchase 17 shares of Common Stock.

Each holder that fully exercised their Subscription Rights was entitled to Over-Subscription Rights to subscribe for additional shares of Common Stock that remain unsubscribed as a result of any unexercised Subscription Rights, which allowed such holder to subscribe for additional shares of Common Stock up to the number of shares purchased under such holder’s basic Subscription Right at $0.05 per share.

We received approximately $ 32,100 in gross proceeds from the exercise of Subscriptions Rights and Over-Subscription Rights from the Company's stockholders.

For those Subscription Rights which remained unexercised, upon the expiration of the Rights Offering after accounting for all Over-Subscription Rights exercised, the standby purchasers, led by Immersion, Outerbridge Capital Management, LLC (“Outerbridge”) and Selz Family 2011 Trust (“Selz”), collectively purchased the unexercised Subscription Rights at the Subscription Price (“Backstop Commitment”).

We received approximately $ 12,900 in gross proceeds for the exercise of Subscription Rights not subscribed for by the Company’s stockholders.

We paid Immersion and Selz approximately $2,850

Index to Form 10-K Index to FS

3 unchanged sentences

(Thousands of dollars, except share and per share data)

forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment.

There can be no guarantee or assurances that any such transaction or transactions be consummated.

We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) .

and $350, respectively, comprised of commitment fees in consideration for the Backstop Commitment, and expense reimbursements for all out-of-pocket costs, fees and expenses incurred in connection with the Transactions and we paid Outerbridge approximately $1,250 for expense reimbursements for all out-of-pocket costs, fees and expenses incurred in connection with the Transactions.

The Rights Offering was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 5.03.

Term Loan Credit Agreement Debt Conversion

Upon closing of the Rights Offering, we converted all outstanding principal and any accrued and unpaid interest under the Term Loan Credit Agreement, totaling $ 34,000 , into shares of our Common Stock.

Restated ABL Facility

On June 10, 2024 (the “Closing Date”), we amended and restated and extended the maturity of our existing asset-based Credit Facility with Bank of America, N.A., as administrative agent, collateral agent and swing line lender, and other lenders from time to time party thereto (such amended and restated credit facility, the “Restated ABL Facility”).

Pursuant to the Restated ABL Facility, the lenders thereunder have committed to provide a four-year asset-backed revolving credit facility in an aggregate committed principal amount of up to $ 325,000 .

The Restated ABL Facility has a maturity date of June 9, 2028.

Interest under the Restated ABL Facility accrues, at the election of the Company, either (x) based on the Secured Overnight Financing Rate (“SOFR”), which is subject to a floor of 2.50% per annum, plus a spread of 3.50% per annum or (y) at an alternate base rate, which is subject to a floor of 3.50% per annum, plus a spread of 2.50% per annum, provided that, in the event the Company meets certain financial metrics for a consecutive six-month period beginning and ending after the one-year anniversary of the Closing Date, the foregoing spreads shall be reduced by 0.25% per annum.

The Credit Agreement contains customary negative covenants that limit the Company’s ability to incur or assume additional indebtedness, grant or permit liens, make investments, make restricted payments and other specified payments, merge with other entities, dispose of or acquire assets, or engage in transactions with affiliates, among other things.

Additionally, the Restated ABL Facility includes the following financial maintenance covenants:

• following the date that is six months following the Closing Date, the Company is required to maintain a minimum Availability (as defined in the Credit Agreement) of (x) $25,000 for the first thirty (30) months after the Closing Date and (y) $30,000 after the date that is thirty (30) months after the Closing Date;

• commencing with the month ending May 31, 2025, the Company is required to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Restated ABL Facility) of not less than 1.10 to 1.00, which will be tested monthly on the last day of each fiscal month for the trailing 12-month period;

• commencing with the quarter ending October 31, 2024, the Company is required to maintain a minimum Consolidated EBITDA (as defined in the Restated ABL Facility), which will be tested quarterly on the last day of each fiscal quarter for (a) the trailing six-month period for the first test date, (b) the trailing nine-month period of the second test date and (c) for the trailing 12-month period thereafter.

The Restated ABL Facility does not require the retention of a chief restructuring officer or the formation or maintenance of any special committees of the board of directors of the company.

The Credit Agreement contains customary events of default, including for non-payment of obligations owing under the Restated ABL Facility, material breaches of representations and warranties, failure to perform or observe covenants, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business.

The Credit Agreement also contains customary affirmative covenants and representations and warranties.

In connection with the Restated ABL Facility, the 1.00% fee payable in connection with the eighth amendment to the Restated ABL Facility (prior to its having been restated) is due and payable (x) 50% on September 2, 2024 and (y) 50% on June 10, 2025.

Index to Form 10-K Index to FS

BARNES & NOBLE EDUCATION, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

(Thousands of dollars, except share and per share data)

Reverse Stock Split

In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock.

No change will be made to the trading symbol for the Company’s shares of Common Stock, “BNED,” in connection with the Reverse Stock Split.

The Reverse Stock Split is part of the Company’s plan to regain compliance with the minimum bid price requirement of $1.00 per share required to maintain continued listing on the NYSE.

The Reverse Stock Split reduced the number of shares of the Company’s outstanding common stock from approximately 2,620,495,552 shares (as of the date June 11, 2024, when including issuances pursuant to the Transactions) to approximately 26,204,956 shares, subject to adjustment for rounding.

The Reverse Stock Split affected all issued and outstanding shares of Common Stock.

All outstanding options and restricted stock units, and other securities entitling their holders to purchase or otherwise receive shares of Common Stock were adjusted as a result of the Reverse Stock Split, as required by the terms of each security.

The number of shares available to be awarded under the Company’s equity compensation plans will also be appropriately adjusted.

Following the Reverse Stock Split, the par value of the Common Stock will remain unchanged at $0.01 per share.

The Reverse Stock Split will not change the authorized number of shares of Common Stock or preferred stock.

No fractional shares will be issued in connection with the reverse split;

instead any fractional shares as a result of the Reverse Stock Split will be rounded up to the next whole number of post-split shares of Common Stock .

Index to Form 10-K Index to FS

Schedule II—Valuation and Qualifying Accounts

7 unchanged sentences

April 29, 2023 $ 2,243 $ 575 $ ( 1,662 ) $ 1,156

May 1, 2021 $ 1,986 $ 4,600 $ ( 2,992 ) $ 3,594

of period Addition

3 unchanged sentences

April 29, 2023 $ 2,723 $ 122,831 $ ( 123,128 ) $ 2,426

May 1, 2021 $ 5,063 $ 145,595 $ ( 147,327 ) $ 3,331

All other schedules are omitted because the conditions requiring their filing do not exist, or because the required information is provided in the consolidated financial statements, including the notes thereto.

3 unchanged sentences

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 8. Financial Statements and Supplementary Data