Barnes & Noble Education, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FINANCIAL STATEMENT INDEX Page No. Report of BDO USA P.C., Independent Registered Public Accounting Firm, on the consolidated financial statements of Barnes & Noble Education, Inc. for the year ended May 3, 2025 (PCAOB ID 243 ) 57 Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on the consolidated financial statements of Barnes & Noble Education, Inc. for the year ended April 27, 2024 (PCAOB ID 42) 57 Consolidated Statements of Operations for the years ended May 3, 2025 and April 27, 2024 63 Consolidated Balance Sheets as of May 3, 2025 and April 27, 2024 64 Consolidated Statements of Cash Flows for the years ended May 3, 2025 and April 27, 2024 65 Consolidated Statements of Equity for the years ended May 3 , 202 5 and April 2 7 , 20 24 67 Notes to Consolidated Financial Statements Note 1. Organization 68 Note 2. Summary of Significant Accounting Policies 68 N ote 3. Restatement of Previously Issued Consolidated Financial Statements 76 Note 4. Revenue 82 Note 5. Segment Reporting 83 Note 6. Equity and Earnings Per Share 84 Note 7. Fair Value Measurements 86 Note 8. Derivative 87 Note 9. Debt 88 Note 10. Leases 94 Note 11. Supplementary Information 96 Note 12. Related Party Transactions 96 Note 13. Employees Benefit Plans 97 Note 14. Long-Term Incentive Compensation Expense 97 Note 15. Income Taxes 100 Note 16. Legal Proceedings 103 Note 17. Commitments and Contingencies 103 Note 18. Concentration Risk 103 Note 19. Selected Quarterly Financial Information (Unaudited) 103 Note 20. Subsequent Events 105 Note 21. Restatement of Quarterly Financial Information (Unaudited) 106 Financial Statement Schedule Schedule II Valuation and Qualifying Accounts 133 56 Index to Form 10-K Index to FS Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Barnes & Noble Education, Inc. Florham Park, New Jersey Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Barnes & Noble Education, Inc. and subsidiaries (the “Company”) as of May 3, 2025, the related consolidated statements of operations, equity, and cash flows for the year then ended, 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 May 3, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. 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 May 3, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated December 22, 2025 expressed an adverse opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Transactions - Product Sales As described in Notes 2 and 4 to the consolidated financial statements, the majority of the Company’s revenue was derived from the sale of products through its bookstore locations, including virtual bookstores, and its bookstore affiliated e-commerce websites. The Company’s total revenue from product sales was approximately $1.4 billion for the fiscal year ended May 3, 2025. We identified the auditing of the accuracy and existence of revenue transactions from product sales as a critical audit matter. Auditing the accuracy and existence of revenue from product sales was especially challenging due to the high degree of auditor effort in performing procedures, given the significance of revenue from product sales and the large volume of transactions. The primary procedures we performed to address this critical audit matter included: • Evaluating the accuracy and existence of revenue transactions, on a sample basis, by inspecting invoices, evidence of delivery of physical and digital content, evidence of collectability, and other supporting information, where applicable. 57 Index to Form 10-K Index to FS • Confirming certain revenue transactions with the customer or delivery of digital content with the provider. • Evaluating the accuracy of product pricing by verifying the cost markup percentage against underlying contract terms for a selected sample of stores. • Testing price changes, on a sample basis, to verify whether those changes were properly authorized. Merchandise Inventories – Reserves for Non-Returnable Inventory As described in Note 2 to the consolidated financial statements, the Company recognizes reserves for non-returnable inventory based on the history of liquidating non-returnable inventory, which includes certain assumptions, including markdowns and inventory aging. We identified the auditing of the non-returnable inventory reserves as a critical audit matter. The Company’s calculation of non-returnable inventory reserves used a number of assumptions, including markdowns and inventory aging. As a result of the number of inputs to the manual calculations and volume of transactions, auditing non-returnable inventory reserves was especially challenging due to the extensive audit effort required. The primary procedures we performed to address this critical audit matter included:  • Evaluating the methodology used to calculate the non-returnable inventory reserves for reasonableness.  • Assessing the sensitivity of certain inputs and assumptions used in the reserve calculation.   • Testing the completeness and accuracy of the markdowns and the underlying data used in calculating the inventory aging.  • Recalculating the reserves using management’s established methodology and assumptions.   • Performing a historical trend analysis by comparing the inventory reserve for each inventory aging category to the related historical reserve. • Performing a trend analysis of the estimated reserves as a percentage of gross inventory.  Accounting for Leases   As described in Note 10 to the consolidated financial statements, the Company recognizes lease assets and lease liabilities on its consolidated balance sheets for leases comprised of operations agreements which grant the Company the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. As described in Note 2 to the consolidated financial statements, the Company identified errors in its application of ASC 842, Leases , related to the accounting for the minimum annual commission guarantees, variable commission arrangements and related amortization associated with the Company's store operating agreements. We identified the accounting evaluation of the minimum annual commission guarantees, variable commission arrangements and related amortization associated with the Company’s store operating agreements as a critical audit matter. Our principal considerations included the existence of accounting complexities related to such evaluation and significant judgments involved in the interpretation of the terms of the agreements and in the application of the appropriate accounting guidance. Auditing these elements required especially challenging and complex auditor judgment due to the nature and extent of audit effort required, including the extent of expertise needed.  The primary procedures we performed to address this critical audit matter included:    • Reviewing and analyzing: (i) the terms of the operating agreements for a sample of on-campus bookstores at colleges and universities, and (ii) the Company’s application of the relevant accounting guidance under ASC Topic 842 for those selected samples.    • Utilizing firm personnel with expertise in the relevant technical accounting to assist in: (i) evaluating the relevant terms of a representative example of the Company’s operating agreements for on-campus bookstores at colleges and universities and (ii) assessing the appropriateness of the conclusions reached by the Company.  Impact of the Investigation   As described in Note 2 to the consolidated financial statements, the Audit Committee initiated an investigation over the Company’s costs of sales associated with digital content and concluded that unsupported manual journal entries were recorded that improperly reduced cost of sales associated with digital content, with a reciprocal impact to accrued liabilities and accounts 58 Index to Form 10-K Index to FS receivable (“the Investigation”). As a result of the Investigation, the Company restated its previously reported financial statements.  Evaluating the sufficiency of audit procedures over the impact of the Investigation was determined to be a critical audit matter. The principal considerations for our determination were: (i) a high degree of auditor judgment and subjectivity that was required to design and execute incremental audit procedures and to assess the sufficiency of the audit procedures performed and evidence obtained, and (ii) the audit effort involved, including the extent of specialized skills or knowledge needed.   The primary procedures we performed to address this critical audit matter included:    • Evaluating the sufficiency of the Investigation initiated by the Audit Committee, including using professionals with specialized skills and knowledge in forensic investigation.  • Expanding the nature and extent of fraud inquiries performed with Company personnel.  • Performing a system access review to evaluate whether any instances of inappropriate use of the in-scope applications existed.  • Considering the Investigation’s findings and performing incremental audit procedures over certain financial accounts, including:   • Testing the completeness and accuracy of the reconciliation for cost of sales associated with digital content.  • Confirming invoices for a selected vendor related to cost of sales associated with digital content.  • Performing additional journal entry testing.   • Testing the completeness and accuracy of the adjustments as a result of the Investigation.  /s/ BDO USA, P.C. We have served as the Company's auditor since 2024. San Francisco, California December 22, 2025 59 Index to Form 10-K Index to FS Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Barnes & Noble Education, Inc. Florham, New Jersey Opinion on Internal Control over Financial Reporting We have audited Barnes & Noble Education, Inc.’s (the “Company’s”) internal control over financial reporting as of May 3, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of May 3, 2025, based on the COSO criteria.  We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of May 3, 2025, the related consolidated statements of operations, equity, and cash flows for the year then ended, 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”) and our report dated December 22, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A(b), Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.  A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses were identified and described in management's assessment regarding the following: • Lack of an effective control environment due to insufficient reporting lines authorities and responsibilities in certain areas and a lack of resources to operate certain internal controls over financial reporting; • Failure to maintain an effective risk assessment related to financial reporting, including the consideration of potential fraud and the impact of business changes on internal controls over financial reporting; • Lack of effective control activities and, in some cases, the design of such control activities related to (a) the review and approval of manual journal entries, including maintaining appropriate segregation of duties, (b) information technology user access controls at a subsidiary, (c) the completeness and accuracy of information produced by the Company, (d) accounting for nonroutine transactions, (e) the monthly account reconciliation process, and (f) controls over lease accounting; • Lack of effective information and communication activities to (a) timely communicate role expectations and backup responsibilities and (b) the evidence of reviews over the completeness and accuracy of information produced by the Company; and • Lack of effective monitoring activities to evaluate the operation of certain key controls, including over account reconciliations. 60 Index to Form 10-K Index to FS These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements, and this report does not affect our report dated December 22, 2025, on those consolidated financial statements.  Definition and Limitations of Internal Control over Financial Reporting  A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  /s/ BDO USA, P.C. San Francisco, California December 22, 2025 61 Index to Form 10-K Index to FS Report of Independent Registered Public Accounting Firm 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 sheet of Barnes & Noble Education, Inc. and subsidiaries (the Company) as of April 27, 2024, the related consolidated statement of operations, equity and cash flows for the year 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 the results of its operations and its cash flows for the year ended April 27, 2024, in conformity with U.S. generally accepted accounting principles. Restatement of 2024 Financial Statements As discussed in Note 3 to the consolidated financial statements, the 2024 consolidated financial statements have been restated to correct misstatements. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. 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. We conducted our audit in accordance with the standards of the PCAOB. 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 audit 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 audit 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. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company’s auditor from 2015 to 2024. Iselin, New Jersey July 1, 2024, except for Note 5, as to which the date is December 11, 2024, and the effects of the restatement disclosed in Note 3, as to which the date is December 22, 2025. 62 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except share and per share data) 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 As Restated Sales: Product sales and other $ 1,463,245 $ 1,430,456 Rental income 146,925 136,679 Total sales 1,610,170 1,567,135 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 1,193,015 1,144,973 Rental cost of sales 79,351 77,249 Total cost of sales 1,272,366 1,222,222 Gross profit 337,804 344,913 Selling and administrative expenses 283,800 311,574 Depreciation and amortization expense 37,939 40,560 Impairment loss 1,713 7,166 Other (income) expense ( 1,572 ) 19,409 Operating income (loss) 15,924 ( 33,796 ) Loss on extinguishment of debt 55,233 — Interest expense, net 22,260 40,365 Loss from continuing operations before income taxes ( 61,569 ) ( 74,161 ) Income tax expense 4,256 858 Loss from continuing operations, net of tax ( 65,825 ) ( 75,019 ) Loss from discontinued operations, net of tax of $ 0 and $ 20 , respectively — ( 730 ) Net loss $ ( 65,825 ) $ ( 75,749 ) Loss per share of Common Stock Basic and Diluted Continuing operations $ ( 2.50 ) $ ( 28.18 ) Discontinued operations $ — $ ( 0.28 ) Total Basic and Diluted Net Loss per share $ ( 2.50 ) $ ( 28.46 ) Weighted average shares of common stock outstanding - Basic and Diluted 26,298,984 2,662,296 See accompanying notes to consolidated financial statements. 63 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AN\ SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) As of May 3, 2025 April 27, 2024 As Restated ASSETS Current assets: Cash and cash equivalents $ 9,058 $ 10,459 Accounts receivable (less allowance $ 2,148 and $ 867 , respectively) 98,077 98,838 Merchandise inventories, net 299,562 344,037 Textbook rental inventories 26,439 28,315 Prepaid expenses and other current assets 32,249 39,158 Total current assets 465,385 520,807 Property and equipment, net 40,229 52,912 Operating lease right-of-use assets 183,695 217,336 Intangible assets, net 78,241 94,191 Other noncurrent assets 22,735 24,703 Total assets $ 790,285 $ 909,949 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 148,848 $ 299,157 Accrued liabilities 65,853 98,622 Current operating lease liabilities 64,524 76,960 Total current liabilities 279,225 474,739 Long-term deferred taxes, net 1,135 1,964 Long-term operating lease liabilities 115,495 140,627 Other long-term liabilities 19,142 15,882 Long-term borrowings 103,100 196,337 Total liabilities 518,097 829,549 Commitments and contingencies (Note 17) Stockholders' equity: Preferred stock, $ 0.01 par value; authorized, 5,000,000 shares; 0 shares issued and 0 shares outstanding — — Common stock, $ 0.01 par value; authorized, 200,000,000 shares; issued, 34,081,114 and 558,402 shares, respectively; outstanding, 34,053,847 and 531,564 shares, respectively 341 6 Additional paid-in capital 1,006,974 749,692 Accumulated deficit ( 712,571 ) ( 646,746 ) Treasury stock, at cost ( 22,556 ) ( 22,552 ) Total stockholders' equity 272,188 80,400 Total liabilities and stockholders' equity $ 790,285 $ 909,949 See accompanying notes to consolidated financial statements. 64 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 As Restated Cash flows from operating activities: Net loss $ ( 65,825 ) $ ( 75,749 ) Less: Loss from discontinued operations, net of tax — ( 730 ) Loss from continuing operations, net of tax ( 65,825 ) ( 75,019 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: Depreciation and amortization expense 37,939 40,560 Impairment loss (non cash) 1,713 7,166 Loss on debt extinguishment 55,233 — Amortization of deferred financing costs 5,164 13,150 Interest expense (paid-in-kind) — 2,652 Deferred taxes ( 829 ) 125 Stock-based compensation expense 5,386 3,380 Changes in operating lease right-of-use assets and liabilities ( 4,218 ) ( 1,322 ) Changes in other long-term assets and liabilities and other, net 7,072 ( 20,997 ) Changes in other operating assets and liabilities, net: Receivables, net 761 ( 6,326 ) Merchandise inventories 44,475 ( 21,058 ) Textbook rental inventories 1,876 ( 704 ) Prepaid expenses and other current assets 7,096 31,593 Accounts payable and accrued liabilities ( 181,256 ) 25,255 Changes in other operating assets and liabilities, net ( 127,048 ) 28,760 Net cash flows used in operating activities from continuing operations ( 85,413 ) ( 1,545 ) Net cash flows used in operating activities from discontinued operations — ( 3,577 ) Net cash flows used in operating activities $ ( 85,413 ) $ ( 5,122 ) Cash flows from investing activities: Purchases of property and equipment $ ( 12,894 ) $ ( 14,070 ) Proceeds from the sale of fixed assets 793 78 Net cash flows used in investing activities from continuing operations ( 12,101 ) ( 13,992 ) Net cash flows provided by investing activities from discontinued operations — 21,395 Net cash flows (used in) provided by investing activities $ ( 12,101 ) $ 7,403 Cash flows from financing activities: Proceeds from borrowings $ 887,055 $ 563,023 Repayments of borrowings ( 948,920 ) ( 552,230 ) Payment of deferred financing costs ( 5,569 ) ( 16,316 ) Proceeds from Private Equity Investment 50,000 — Proceeds from Rights Offering 45,000 — Payment of equity issuance costs ( 9,914 ) — Principal stockholder expense reimbursement 1,940 — Payment on principal portion of finance lease ( 370 ) — Shares sold under at-the-market offering, net of commissions 78,450 — Purchase of treasury shares ( 5 ) ( 176 ) Net cash flows provided by (used in) financing activities $ 97,667 $ ( 5,699 ) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 153 $ ( 3,418 ) Cash, cash equivalents, and restricted cash at beginning of year 28,570 31,988 Cash, cash equivalents, and restricted cash of continuing operations at end of year 28,723 28,570 65 Index to Form 10-K Index to FS Supplemental cash flow information: Cash paid during the period for: Interest paid $ 17,912 $ 24,943 Income taxes paid (net of refunds) $ 2,130 $ ( 7,293 ) See accompanying notes to consolidated financial statements. 66 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Equity (In thousands, except share data) Additional Accumulated Common Stock Paid-In Deficit Treasury Stock Total Shares (a) Amount (b) Capital (b) As Restated Shares (a) Amount Equity Balance April 29, 2023 551,402 $ 6 $ 746,477 $ ( 570,997 ) 25,359 $ ( 22,376 ) $ 153,110 Stock-based compensation expense — — 3,215 — — — 3,215 Vested equity awards 7,000 — — — — — — Shares repurchased for tax withholdings for vested stock awards — — — — 1,479 ( 176 ) ( 176 ) Net loss - As Restated — — — ( 75,749 ) — — ( 75,749 ) Balance April 27, 2024 558,402 $ 6 $ 749,692 $ ( 646,746 ) 26,838 $ ( 22,552 ) $ 80,400 Stock-based compensation expense — — 5,386 — — — 5,386 Vested equity awards 34,198 — — — — — — Shares repurchased for tax withholdings for vested stock awards ( 429 ) — — — 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 — — — 50,000 Rights Offering 9,000,000 90 44,910 — — — 45,000 Equity issuance costs — — ( 9,914 ) — — — ( 9,914 ) Term Loan debt conversion 6,673,978 67 86,688 — — — 86,755 Principal stockholder expense reimbursement — — 1,940 — — — 1,940 Sale of Common Stock under ATM Agreements, net of commissions 7,814,965 78 78,372 — — — 78,450 Net loss — — — ( 65,825 ) — — ( 65,825 ) Balance May 3, 2025 34,081,114 $ 341 $ 1,006,974 $ ( 712,571 ) 27,267 $ ( 22,556 ) $ 272,188 (a) Shares for all years are post-split amounts (restated to reflect the reverse stock split in fiscal 2025). (b) Reflects the reclassification of dollar amounts between Common Stock and Additional Paid-In-Capital in the year the stock split occurred. See accompanying notes to consolidated financial statements. 67 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (In thousands, except share data) Unless the context otherwise indicates, references in these Notes to the accompanying consolidated financial statements to "the Company” refer to Barnes & Noble Education, Inc., or “BNED”, a Delaware corporation. References to “Barnes & Noble College” refer to our college bookstore business operated through our subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to our virtual bookstore and wholesale textbook distribution business operated through our subsidiary MBS Textbook Exchange, LLC. Note 1. Organization Description of Business Barnes & Noble Education, Inc. (“BNED” or the "Company") 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 a textbook wholesaler, and bookstore management hardware and software provider. We operate 1,146 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment. We provide product and service offerings designed to address the most pressing issues in higher education, including affordable 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 ® affordable access course material programs, consisting of First Day Complete and First Day , which provide faculty-required course materials to students on or before the first day of class. • First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students with both physical and digital materials. In addition to providing numerous benefits to students, faculty and administrators, 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”). 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 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 educational publishers who rely on us as one of their primary distribution channels. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Consolidation The results of operations reflected in our consolidated financial statements are presented on a consolidated basis. All material intercompany accounts and transactions have been eliminated in consolidation. Our consolidated financial statements reflect our consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our Consolidated Statements of Operations. 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 two fiscal years consisted of the 53 weeks ended May 3, 2025 (“Fiscal 2025”) and 52 weeks ended April 27, 2024 (“Fiscal 2024”). On June 10, 2024, we completed various transactions (the "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 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, 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 were converted into one share of our common stock. All share and per-share data for all periods presented in the consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the reverse stock split and the bonus element resulting from the equity rights offering. Seasonality Our business is highly 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 68 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 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, 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 digital content is made available to the customer compared to: (i) the rental of physical textbook where revenue is recognized over the rental period, and (ii) a la 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. See Revenue Recognition and Deferred Revenue discussion below. 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 the Revenue Recognition and Deferred Revenue discussion below. Restatement of Previously Issued Consolidated Financial Statements Certain information regarding the recording of cost of digital sales was brought to the attention of the Audit Committee of the Board of Directors (the “Audit Committee”). With the assistance of outside counsel and advisors, we completed an investigation into certain accounting matters related primarily to the recording of cost of digital sales (the “Investigation”). The Investigation identified unsupported manual journal entries that improperly reduced cost of sales, with a reciprocal impact to accrued liabilities and accounts receivable, in fiscal 2024 and fiscal 2025 and additional immaterial unsupported entries in periods prior to fiscal 2024. The Investigation also concluded that certain revenue recognized in the third quarter of fiscal 2025 related to First Day Complete was incorrectly accelerated based upon incorrect opt-out assumptions; this revenue automatically reversed in the fourth quarter based on actual opt-out rates. The Restatement includes corrections related to the digital cost of sales matters identified in the Investigation as well as the following items: Lease Accounting (ASC 842): The Company identified errors in its application of Accounting Standards Codification ("ASC") 842 - Leases related to (i) minimum annual commission guarantees (“MAGs”) under store operating agreements, which were incorrectly treated as giving rise to new right of use ("ROU") assets and liabilities annually rather than as variable lease expense; (ii) amortization of ROU assets for fixed guarantee leases, which was incorrectly recognized using an effective yield method rather than straight-line over the contract term; (iii) recognition of commission expense for variable commission arrangements, which should have been recorded as incurred based on contractual rates rather than using blended effective yield calculations; and (iv) other contract-specific ROU asset and lease liability miscalculations. Lease-related corrections are reflected in all Restated Periods. Textbook Rental Inventory: A review of aged Textbook rental inventory identified $ 4.6 million of rental textbooks that should have been written off in fiscal years prior to fiscal 2025. As a result, $ 2.7 million relating to fiscal 2023 and prior periods was recorded through retained earnings, and $ 1.9 million relating to fiscal 2024 was recorded in cost of sales. Legal Settlement: A $ 1.3 million class action settlement finalized in December 2024 was accrued in the fourth quarter of fiscal 2025. Because the obligation was incurred in the third quarter, the liability and expense have been restated into the period ended January 25, 2025. The quantitative impact of these restatement adjustments is presented in Note 3. Restatement of Previously Issued Audited Consolidated Financial Statements and Note 21. Restatement of Quarterly Financial Information (Unaudited). Use of Estimates In preparing consolidated financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. 69 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Discontinued Operations On May 31, 2023, we completed the sale of these assets related to our Digital Student Solutions ("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 the Credit Facility. The following table summarizes the operating results of the discontinued operations for the periods indicated: 52 weeks ended Dollars in thousands April 27, 2024 Total sales $ 2,784 Cost of sales (a) 76 Gross profit (a) 2,708 Selling and administrative expenses 3,029 Depreciation and amortization 3 Gain on sale of business ( 3,545 ) Impairment loss (non-cash) (b) 610 Other expense (c) 3,308 Transaction costs 13 Operating loss ( 710 ) Income tax expense 20 Loss from discontinued operations, net of tax $ ( 730 ) (a) Cost of sales and Gross profit for the DSS Segment includes amortization expense (non-cash) related to content development costs of $ 0 for the 52 weeks ended April 27, 2024. (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, we recognized restructuring and other charges of $ 3,308 , comprised of severance and other employee termination costs. Cash and Cash Equivalents and Restricted Cash We consider all short-term, highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. As of May 3, 2025, we had cash on hand of $ 9,058 and restricted cash of $ 19,665 , comprised of $ 17,332 in the prepaid expenses and other current assets line item 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 $ 2,333 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 cash on hand of $ 10,459 and restricted cash of $ 18,111 , comprised of $ 17,146 in 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. Accounts Receivable Receivables represent customer, private and public institutional and government billings (colleges, universities and other financial aid providers), credit/debit card receivables, advances for book buybacks, advertising and other receivables due within one year. Components of accounts receivable are as follows: 70 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) As of May 3, 2025 April 27, 2024 As Restated Trade accounts $ 54,952 $ 69,754 Advances for book buybacks 993 1,292 Credit/debit card receivables 14,991 9,075 Other receivables 27,141 18,717 Total receivables, net $ 98,077 $ 98,838 Changes to the allowance for expected credit losses related to Accounts receivable are as follows: As of May 3, 2025 April 27, 2024 As Restated Allowance, beginning of period $ 867 $ 1,156 Current period provision 4,066 2,855 Recoveries ( 2,291 ) ( 1,260 ) Write-offs charged against allowance ( 494 ) ( 1,884 ) Allowance, total end of period $ 2,148 $ 867 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 historical trends, the financial condition of our customers and an evaluation of current economic conditions. We write-off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expense related to textbook rentals not returned and the Company is unable to successfully charge the customer. Merchandise Inventories Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory represent write-downs that reduce the cost basis of the asset. These write-downs are based on our history of liquidating non-returnable inventory, which includes certain assumptions, including markdowns and inventory aging. Cost is determined primarily by the retail inventory method for our retail business. Textbook and trade book inventories for retail and wholesale are valued using the LIFO method. The related LIFO reserve was not material to our inventory balance in Fiscal 2024. In Fiscal, 2025 we recorded a LIFO adjustment of $ 6,446 . For our physical bookstores, we estimate and accrue inventory shortage for the period between the last physical count and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends. The physical bookstores fulfillment order is directed first to our wholesale operations before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers. Textbook Rental Inventories Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period with the amortization expense recognized in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost. Cloud Computing Arrangements Implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract are 71 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. Implementation costs are included in prepaid expenses and other assets in the Consolidated Balance Sheets and amortized to selling and administrative expense in the Consolidated Statements of Operations. Implementation costs incurred in cloud computing arrangements reflected in prepaid and other assets in the Consolidated Balance Sheets were $ 5,504 and $ 6,367 as of May 3, 2025 and April 27, 2024, respectively. We had $ 2,730 and $ 4,286 of amortization of implementation costs in selling and administrative expense in the Consolidated Statements of Operations, for the 53 and the 52 weeks ended May 3, 2025 and April 27, 2024, respectively. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over estimated useful lives. 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 $ 22,876 and $ 27,281 of depreciation expense in the Consolidated Statements of Operations for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024, respectively. Components of property and equipment are as follows: As of Useful Life May 3, 2025 April 27, 2024 Property and equipment: Leasehold improvements (a) $ 100,867 $ 106,764 Machinery, equipment and display fixtures 5 232,883 246,206 Computer hardware and capitalized software costs (b) 169,190 167,347 Office furniture and other 5 - 7 59,122 62,133 Construction in progress 1,698 2,361 Total property and equipment 563,760 584,811 Less accumulated depreciation and amortization 523,531 531,899 Total property and equipment, net $ 40,229 $ 52,912 (a) Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from 5 - 15 years. (b) System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 3 - 5 years. Intangible Assets Amortizable intangible assets as of May 3, 2025 and April 27, 2024 are as follows: As of May 3, 2025 Amortizable intangible assets Estimated Useful Life Gross Carrying Amount Accumulated Amortization Total Customer relationships 5 - 9 $ 209,680 $ ( 132,081 ) $ 77,599 Other (a) 2 3,500 ( 2,858 ) 642 $ 213,180 $ ( 134,939 ) $ 78,241 As of April 27, 2024 Amortizable intangible assets Estimated Useful Life Gross Carrying Amount Accumulated Amortization Total Customer relationships 6 - 10 $ 225,337 $ ( 132,138 ) $ 93,199 Other (a) 1 - 3 3,500 ( 2,508 ) 992 $ 228,837 $ ( 134,646 ) $ 94,191 (a) Other consists of recognized intangibles for non-compete agreements and trade names 72 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, 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 53 weeks ended May 3, 2025 $ 14,842 For the 52 weeks ended April 27, 2024 $ 13,279 Estimated Amortization Expense: (Fiscal Year) 2026 $ 9,114 2027 $ 9,056 2028 $ 8,764 2029 $ 8,764 2030 $ 8,597 After 2030 $ 33,946 See Impairment of Long-Lived Assets below for discussion of impairment loss related to intangible assets. Leases We recognize lease assets and lease liabilities on the Consolidated Balance Sheets for all operating lease arrangements based on the present value of future lease payments as required by ASC 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 for contracts with fixed lease payments on a straight-line basis over the contractual term. We recognize variable lease payments as incurred. We recognize lease expense related to our college and university contracts as cost of sales in our Consolidated Statements of Operations and we recognize lease expense related to our various office spaces as selling and administrative expenses in our Consolidated Statements of Operations. For additional information, see Note 10. Leases . Impairment of Long-Lived Assets As of May 3, 2025, our long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $ 40,229 , $ 183,695 , $ 78,241 , and $ 22,735 , respectively, on our Consolidated Balance Sheet. As of April 27, 2024, our long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $ 52,912 , $ 217,336 , $ 94,191 , and $ 24,703 , respectively, on our Consolidated Balance Sheet. 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 . We evaluate the long-lived assets for impairment at the lowest asset group level for which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the asset group to the estimated future undiscounted cash flows. The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. Many colleges 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 2025, we evaluated certain of our store-level long-lived assets in the retail business for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $ 1,713 (both pre-tax and after-tax), comprised of $ 314 , $ 290 , and $ 1,109 of property and equipment, operating lease right-of-use assets, and amortizable intangibles, respectively, on the Consolidated Statements of Operations. 73 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) During Fiscal 2024, we evaluated certain of our store-level long-lived assets in the retail business 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. The fair value of the impaired long-lived assets was 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 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. For additional information, see Note 7. Fair Value Measurements . Revenue Recognition and Deferred Revenue Product sales and rentals The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 4. Revenue. Product 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. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. 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 upon delivery of 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. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete. Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale. Such buyouts have historically been, and continue to be, immaterial to the financial statements. 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 ® affordable access course material program 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. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain 74 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) substantially all of the remaining benefits from the good or service. 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. Our logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics and we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements. We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year. Service and other revenue 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 brand marketing service and over time 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 Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses. Selling and Administrative Expenses Our selling and administrative expenses consist primarily of store payroll and store operating expenses. 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. Long-Term Incentive Compensation We have granted awards in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan (the “Equity Incentive Plan”). Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock, restricted stock units, performance shares, performance share units, and phantom share units. See Note 14. Long-Term Incentive Compensation Expense for additional information regarding expense recognition for each type of award. Advertising Costs The costs of advertising are expensed as incurred during the year pursuant to ASC 720-35 , Advertising Costs . Advertising costs charged to selling and administrative expenses were $ 5,235 and $ 5,784 in the Consolidated Statements of Operations for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024, respectively. Income Taxes 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. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. For additional information, see Note 15. Income Taxes. Recent Accounting Pronouncements In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 modernizes and simplifies the accounting for software development costs by establishing a single capitalization framework for all internally developed or acquired software, regardless of whether the software is intended for internal use, to be sold, or to be used in delivering products and services. The new guidance retains the concept of project stages but eliminates the historical distinction 75 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) between internal-use software and software to be sold or marketed. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The guidance is required to be applied prospectively, with optional retrospective or modified retrospective transition methods. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements. In September 2025, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2025-07 (“ASU 2025-07”), Derivatives and Hedging (Topic 815) ( "Topic 815") and "Revenue from Contracts with Customers (Topic 606)." The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This ASU also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim reporting periods, with early adoption permitted. The Company plans to adopt the ASU during the fiscal quarter ending November 2, 2025. See Note 8. Derivative for discussion on the impact of the adoption. In November 2024, the FASB issued ASU No. 2024-03, "Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses", which is intended to enhance expense disclosures by requiring additional disaggregation of certain costs and expenses, on an interim and annual basis, within the footnotes to the financial statements. The guidance will be effective for annual disclosures beginning in Fiscal 2028 and subsequent interim periods. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. The Company is evaluating the impact that adopting this guidance will have on the Company's disclosures. In December 2023, the 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. 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 is effective for the Company for the annual report for the fiscal year ended May 3, 2025 and subsequent interim periods. The Company adopted ASU 2023-07 for its annual period ended May 3, 2025. The impact of the adoption did not have a material impact on our consolidated financial statements. Note 3. Restatement of Previously Issued Audited Consolidated Financial Statements Subsequent to filing the Company's April 27, 2024 Annual Report on Form 10-K for the fiscal year ended April 27, 2024 with the SEC on July 1, 2024, the Company determined that the accounting for certain transactions related to the cost of sales for digital content, its accounting for leases in accordance with ASC 842, and certain other immaterial accounting transactions resulted in a material misstatement to its previously reported financial statements. See Restatement of Previously Issued Consolidated Financial Statements in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. As a result, the Company has restated its audited financial statements for the fiscal year ended April 27, 2024, to reflect the impact of these errors. The Company has also restated the impacted amounts within the accompanying Notes to the Consolidated Financial Statements. Below are tables that reconcile the previously filed audited financial statements with the "As Restated" financial statements on this Form 10-K. The following table reflects the impact of the restatements to the specific line items presented in the Company’s previously reported Consolidated Statement of Operations for the fiscal year ended April 27, 2024: 76 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Summary of Restatements Consolidated Statements of Operations April 27, 2024 Digital Cost Of Sales (a) Product and other cost of sales $ 5,739 Leases (b) Product and other cost of sales $ 3,858 Rental cost of sales $ 327 Income tax expense $ 675 Other Adjustments (c) Rental cost of sales $ 1,939 Total Statement Of Operations Product and other cost of sales $ 9,597 Rental cost of sales $ 2,266 Income tax expense (e) $ 675 77 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Consolidated Balance Sheets As of April 27, 2024 Digital Cost Of Sales (a) Accounts receivable $ ( 5,272 ) Accrued liabilities 467 Accumulated deficit ( 5,739 ) Leases (b) Operating lease right-of-use assets 14,814 Accrued liabilities 20,714 Current operating lease liabilities ( 25,246 ) Long-term deferred taxes, net 675 Long-term operating lease liabilities ( 1,566 ) Accumulated deficit (d) 20,237 Other Adjustments (c) Textbook rental inventories ( 4,677 ) Accumulated deficit (d) ( 4,677 ) Total Balance Sheet Accounts receivable ( 5,272 ) Textbook rental inventories ( 4,677 ) Operating lease right-of-use assets 14,814 Accrued liabilities 21,181 Current operating lease liabilities ( 25,246 ) Long-term deferred taxes, net 675 Long-term operating lease liabilities ( 1,566 ) Accumulated deficit $ 9,821 (a) Reflects adjustments to correct errors related to the recording of Cost of Digital Sales (b) Reflects adjustments related to the Company's accounting for its store operating agreements in accordance with ASC 842, Leases . (c) Reflects adjustments related to Textbook rental inventory write-offs . (d) Reflects adjustments of $ 25,097 related to lease accounting and $( 2,738 ) related to rental-inventory write-off, each pertaining to periods prior to fiscal 2024. (e) Reflects the corresponding tax impact recorded for the restatement adjustments. 78 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following table reflects the impact of the restatements to the specific line items presented in the Company’s previously reported Consolidated Statement of Operations for the year ended April 27, 2024 (in thousands, except share and share data): 52 Weeks Ended April 27, 2024 As Previously Adjustments (1) As Restated Reported Sales: Product sales and other $ 1,430,456 $ — $ 1,430,456 Rental income 136,679 — 136,679 Total sales 1,567,135 — 1,567,135 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 1,135,376 9,597 1,144,973 Rental cost of sales 74,983 2,266 77,249 Total cost of sales 1,210,359 11,863 1,222,222 Gross profit 356,776 ( 11,863 ) 344,913 Selling and administrative expenses 311,574 — 311,574 Depreciation and amortization expense 40,560 — 40,560 Impairment loss 7,166 — 7,166 Other expense 19,409 — 19,409 Operating loss ( 21,933 ) ( 11,863 ) ( 33,796 ) Interest expense, net 40,365 — 40,365 Loss from continuing operations before income taxes ( 62,298 ) ( 11,863 ) ( 74,161 ) Income tax expense 183 675 858 Loss from continuing operations, net of tax ( 62,481 ) ( 12,538 ) ( 75,019 ) Loss from discontinued operations ( 730 ) — ( 730 ) Net loss $ ( 63,211 ) $ ( 12,538 ) $ ( 75,749 ) Loss per share of Common Stock Basic and Diluted Continuing operations $ ( 23.47 ) $ ( 4.71 ) $ ( 28.18 ) Discontinued operations $ ( 0.28 ) $ — $ ( 0.28 ) Total Basic and Diluted Net Loss per share $ ( 23.75 ) $ ( 4.71 ) $ ( 28.46 ) Weighted average shares of common stock outstanding - Basic and Diluted 2,662,296 2,662,296 (1) See Summary of Restatements above. 79 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following table reflects the impact of the restatements to the specific line items presented in the Company’s previously reported Consolidated Balance Sheet as of April 27, 2024 (in thousands, except share and share data): 52 Weeks Ended April 27, 2024 As Previously Opening Adjustment (1) As Restated Reported Adjustments ASSETS Current assets: Cash and cash equivalents $ 10,459 $ — $ — $ 10,459 Accounts receivable 104,110 — ( 5,272 ) 98,838 Merchandise inventories, net 344,037 — — 344,037 Textbook rental inventories 32,992 ( 2,738 ) ( 1,939 ) 28,315 Prepaid expenses and other current assets 39,158 — — 39,158 Total current assets 530,756 ( 2,738 ) ( 7,211 ) 520,807 Property and equipment, net 52,912 — — 52,912 Operating lease right-of-use assets 202,522 11,795 3,019 217,336 Intangible assets, net 94,191 — — 94,191 Other noncurrent assets 24,703 — — 24,703 Total assets 905,084 9,057 ( 4,192 ) 909,949 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 299,157 — — 299,157 Accrued liabilities 77,441 15,182 5,999 98,622 Current operating lease liabilities 102,206 ( 22,170 ) ( 3,076 ) 76,960 Total current liabilities 478,804 ( 6,988 ) 2,923 474,739 Long-term deferred taxes, net 1,289 — 675 1,964 Long-term operating lease liabilities 142,193 ( 6,314 ) 4,748 140,627 Other long-term liabilities 15,882 — — 15,882 Long-term borrowings 196,337 — — 196,337 Total liabilities $ 834,505 $ ( 13,302 ) $ 8,346 $ 829,549 Commitments and contingencies (Note 17) Stockholders' equity: Preferred stock, $ 0.01 par value; authorized, 5,000,000 shares; 0 shares issued and 0 shares outstanding — — — — Common stock, $ 0.01 par value; authorized, 200,000,000 shares; issued and outstanding, 558,402 and 531,564 shares, respectively 6 — — 6 Additional paid-in capital 749,692 — — 749,692 Accumulated deficit ( 656,567 ) 22,359 ( 12,538 ) ( 646,746 ) Treasury stock, at cost ( 22,552 ) — — ( 22,552 ) Total stockholders' equity $ 70,579 $ 22,359 $ ( 12,538 ) $ 80,400 Total liabilities and stockholders' equity $ 905,084 $ 9,057 $ ( 4,192 ) $ 909,949 (1) See Summary of Restatements above. 80 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following table reflects the impact of the restatement to the specific line items presented in the Company's previously reported Consolidated Statement of Cash Flows for the year ended April 27, 2024 (in thousands): 52 Weeks Ended April 27, 2024 As Previously Adjustment (1) As Restated Reported Cash flows from operating activities: Net loss $ ( 63,211 ) $ ( 12,538 ) $ ( 75,749 ) Less: Loss from discontinued operations, net of tax ( 730 ) — ( 730 ) Loss from continuing operations, net of tax ( 62,481 ) ( 12,538 ) ( 75,019 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: Depreciation and amortization expense 40,560 — 40,560 Impairment loss (non cash) 7,166 — 7,166 Amortization of deferred financing costs 13,150 — 13,150 Interest expense (paid-in-kind) 2,652 — 2,652 Deferred taxes ( 550 ) 675 125 Stock-based compensation expense 3,380 — 3,380 Changes in operating lease right-of-use assets and liabilities 24 ( 1,346 ) ( 1,322 ) Changes in other long-term assets and liabilities and other, net ( 20,997 ) — ( 20,997 ) Changes in other operating assets and liabilities, net: Receivables, net ( 11,598 ) 5,272 ( 6,326 ) Merchandise inventories ( 21,058 ) — ( 21,058 ) Textbook rental inventories ( 2,643 ) 1,939 ( 704 ) Prepaid expenses and other current assets 31,593 — 31,593 Accounts payable and accrued liabilities 19,257 5,998 25,255 Changes in other operating assets and liabilities, net 15,551 13,209 28,760 Net cash flows used in operating activities from continuing operations ( 1,545 ) — ( 1,545 ) Net cash flows used in operating activities from discontinued operations ( 3,577 ) — ( 3,577 ) Net cash flows used in operating activities ( 5,122 ) — ( 5,122 ) Cash flows from investing activities: Purchases of property and equipment ( 14,070 ) — ( 14,070 ) Proceeds from the sale of fixed assets 78 — 78 Net cash flows used in investing activities from continuing operations ( 13,992 ) — ( 13,992 ) Net cash flows provided by investing activities from discontinued operations 21,395 — 21,395 Net cash flows provided by investing activities 7,403 — 7,403 Cash flows from financing activities: — Proceeds from borrowings 563,023 — 563,023 Repayments of borrowings ( 552,230 ) — ( 552,230 ) Payment of deferred financing costs ( 16,316 ) — ( 16,316 ) Purchase of treasury shares ( 176 ) — ( 176 ) Net cash flows used in financing activities ( 5,699 ) — ( 5,699 ) Net decrease in cash, cash equivalents, and restricted cash ( 3,418 ) — ( 3,418 ) Cash, cash equivalents, and restricted cash at beginning of year 31,988 — 31,988 Cash, cash equivalents, and restricted cash of continuing operations at end of year $ 28,570 $ — $ 28,570 (1) See Summary of Restatements above. 81 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Note 4. Revenue 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. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies for additional information related to our revenue recognition policies. Disaggregation of Revenue The following table disaggregates the revenue associated with our major product and service offerings. 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 Product and Other Sales Course Materials Product Sales $ 1,021,456 $ 971,950 General Merchandise Product Sales (a) 355,274 364,097 Service and Other Revenue (b) 86,515 94,409 Product and Other Sales sub-total 1,463,245 1,430,456 Course Materials Rental Income 146,925 136,679 Total Sales $ 1,610,170 $ 1,567,135 (a) Logo general merchandise sales 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. Contract Assets and Contract Liabilities Contract assets represent the sale of goods or services to a customer before we have the right to obtain consideration from the customer. Contract assets consist of unbilled amounts at the reporting date and are transferred to accounts receivable when the rights become unconditional. Contract assets (unbilled receivables) were $ 0.6 million and immaterial for May 3, 2025 and April 27, 2024, respectively, 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; and • 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. respectively, as discussed in Note 6. Equity and Earnings (Loss) Per Share - Sale of Treasury Shares. 82 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following table presents changes in deferred revenue associated with our contract liabilities: 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 Deferred revenue at the beginning of period $ 14,892 $ 15,356 Additions to deferred revenue during the period 180,174 176,319 Reductions to deferred revenue for revenue recognized during the period ( 181,501 ) ( 176,783 ) Deferred revenue balance at the end of period: $ 13,565 $ 14,892 Balance Sheet classification: Accrued liabilities $ 10,410 $ 11,310 Other long-term liabilities 3,155 3,582 Deferred revenue balance at the end of period: $ 13,565 $ 14,892 Note 5. Segment Reporting We identify our segments in accordance with the way our business is managed. During the 26 weeks ended October 26, 2024, management determined that a realignment of the Company's operating and reporting segments was necessary to better reflect the operations of the organization. With the recent change in Chief Executive Officer and June milestone financing transactions, we have streamlined operations to focus on a centralized management structure to support company-wide procurement, marketing and selling, delivery and customer service. Given the change in how the overall business is managed and how the current Chief Executive Officer (the current Chief Operating Decision Maker ("CODM")) assesses performance and allocates resources, we combined the operating results of the prior two segments, Retail and Wholesale, into one operating and reporting segment. Prior period disclosures have been restated to reflect the change to one segment. The CODM reviews financial information on a consolidated basis to evaluate operational performance, allocate resources, and assess trends over time. The CODM uses Net income (loss) as the primary measure of segment profit or loss. In evaluating performance, the CODM also reviews significant expense categories, including adjusted cost of sales, payroll expense, contract payments, direct expenses, and indirect expenses, which are considered material to understanding the segment’s financial results. This measure provides a consistent basis for strategic decision-making, budgeting, and performance evaluation, reflecting the segment’s contribution to the Company’s overall financial results. Segment assets are not used by the CODM for evaluating performance as presented on our Consolidated Balance Sheet. The following table presents sales, profitability, and significant expense information about our segment. As detailed in Note 2. Summary of Significant Accounting Policies , and Note 3. Restatement of Previously Issued Audited Consolidated Financial Statements , the presentation of certain amounts in Fiscal Year 2024 below has been restated. 53 weeks ended May 3, 2025 52 weeks ended April 27, 2024 (a) Sales $ 1,610,170 $ 1,567,135 Adjusted Cost of sales 1,046,615 (b) 993,349 Payroll expense 206,362 225,646 Contract payments 200,545 201,781 Direct expenses 96,599 108,663 Indirect expenses 659 977 Other segment expenses, net 125,215 (c) 112,468 Net loss $ ( 65,825 ) $ ( 75,749 ) 83 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) (a) Reflects the impact of restatements as noted in Note 3. Restatement of Previously Issued Audited Consolidated Financial Statements. (b) Adjusted Cost of sales includes all cost of sales presented in the Statement of Operations, adjusted for contract payments and other various expenses. (c) Other segment expenses, net, represents GAAP income statement line items that are not considered to be significant segment expenses. These items primarily include stock-based compensation, depreciation and amortization, impairment, restructuring and other charges, loss on extinguishment of debt, interest income and expense, discontinued operations and income tax expense (benefit). Note 6. Equity and Earnings (Loss) Per Share Stock Authorization` As of May 3, 2025, 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 May 3, 2025, 34,081,114 shares of our common stock were issued, of which 34,053,847 shares were outstanding, and 0 shares of our preferred stock were both issued and outstanding. 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 2,179,093 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. See Item 8. Financial Statements and Supplementary Data - Note 14. Long-Term Incentive Compensation Expense . 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. On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the 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. On June 11, 2024, our shareholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to effect a 100 to 1 reverse stock split, thus reducing the number of authorized shares of Common Stock to 100,000,000 . On September 18, 2024, our stockholders (1) approved the Company’s Amended and Restated Certificate of Incorporation to decrease the aggregate number of authorized shares of our Common Stock from 10,000,000,000 shares to 200,000,000 shares; and (2) approved an amendment to the Equity Incentive Plan to increase the number of shares available for issuance by an additional 2,000,000 shares of our Common Stock, for an aggregate total of 2,179,093 shares (post-reverse stock split) . At-the-Market Equity Offerings On September 19, 2024, we entered into an at-the market ("ATM") sales agreement (the "September ATM Sales Agreement") with BTIG, LLC ("BTIG"), under which we sold the maximum of $ 40.0 million of our Common Stock. from time to time at a weighted-average price of $ 10.06 per share and received $ 39.2 million in proceeds, net of commissions. BTIG, as the sales agent, sold the shares based upon our instructions (including as to price, time or size limits or other customary parameters or conditions). We paid BTIG a commission of 2 % of the gross sales proceeds of the Common Stock sold under the September ATM Sales Agreement. We were not obligated to make any sales of Common Stock under the September ATM Sales Agreement. On December 20, 2024, we entered into an additional ATM sales agreement with BTIG (the "December ATM Sales Agreement"), under which we sold the maximum of $ 40.0 million of our Common Stock from time to time at a weighted-average price of $ 10.42 per share and received $ 39.2 million in proceeds, net of commissions. BTIG, as the sales agent, sold the shares based upon our instructions (including as to price, time or size limits or other customary parameters or conditions). We paid BTIG a commission of 2 % of the gross sales proceeds of the Common Stock sold under the December ATM Sales Agreement. We were not obligated to make any sales of Common Stock under the December ATM Sales Agreement. 84 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Reverse Stock Split 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 were converted into one share of the Company’s Common Stock. No change was 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 was 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 was also 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 did not change the authorized number of shares of Common Stock or preferred stock. No fractional shares were issued in connection with the reverse split; instead any fractional shares as a result of the Reverse Stock Split were rounded up to the next whole number of post-split shares of Common Stock. Repurchase of Shares On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $ 50,000 in the aggregate, of our outstanding common stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During Fiscal 2025 and Fiscal 2024, we did not purchase shares under the stock repurchase program. As of May 3, 2025, approximately $ 26,669 remains available under the stock repurchase program. During Fiscal 2025 and Fiscal 2024, we repurchased 429 shares and 1,482 shares of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards. Sale of Treasury Shares 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 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 approximately $ 4,131 and was recorded as a contract liability which is recognized over the term of the merchandising contracts for Fanatics and Lids ($ 300 and $ 211 , respectively, in accrued liabilities, and $ 2,905 and $ 3,287 , respectively, as of May 3, 2025 and April 27, 2024, in other long-term liabilities our Consolidated Balance Sheets) which is expected to be recognized over the term of the merchandising contracts for Fanatics and Lids. For information related to additional equity investments by TopLids, see Note 12. Related Party Transactions . Dividends We paid no other dividends to common stockholders during Fiscal 2025 and Fiscal 2024. 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. See Note 9. Debt for details. Earnings (Loss) Per Share Basic EPS is computed based upon the weighted average number of common shares outstanding for the period. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the period. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or 85 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) dividend equivalents) in the computation of EPS pursuant to the two-class method. 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. On June 10, 2024, we completed the Transactions, including an Rights Offering, Private Investment, Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. 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, we completed 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 were converted into one share of the Company’s common stock. 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 26,298,984 , and 52,935,533 , respectively, for the 53 weeks ended May 3, 2025 and 52 weeks ended April 27, 2024. The weighted average common shares and loss per common share reflect the bonus element resulting from the Rights Offering and the Reverse Stock Split for all periods presented on the Consolidated Statements of Operations. The following is a reconciliation of the basic and diluted earnings per share calculation: 53 weeks ended 52 weeks ended As Restated (in thousands except share and per share data) May 3, 2025 April 27, 2024 Numerator for basic and diluted earnings (loss) per share: Loss from continuing operations, net of tax $ ( 65,825 ) $ ( 75,019 ) Loss from discontinued operations, net of tax — ( 730 ) Net loss available to common shareholders $ ( 65,825 ) $ ( 75,749 ) Denominator for basic and diluted earnings (loss) per share: Basic and diluted weighted average shares of Common Stock (a) 26,298,984 2,662,296 Loss per share of Common Share: Basic and Diluted Continuing operations $ ( 2.50 ) $ ( 28.18 ) Discontinued operations — ( 0.28 ) Basic and diluted loss per share of Common Stock $ ( 2.50 ) $ ( 28.46 ) (a) During Fiscal 2025 and Fiscal 2024, 407,763 and 32,304 , respectively, were excluded from the diluted earnings per share calculation using the two- class method as their inclusion would have been antidilutive. Note 7. Fair Value Measurements In accordance with ASC 820 , Fair Value Measurements and Disclosures , the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1—Observable inputs that reflect quoted prices in active markets Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions 86 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Our financial instruments include cash and cash equivalents, receivables, accrued liabilities, accounts payable, and long-term debt. The fair values of cash and cash equivalents, receivables, accrued liabilities, and accounts payable approximate their carrying values because of the short-term nature of these instruments, which are all considered Level 1 within the fair value hierarchy. The fair value of our short-term and long-term debt approximates its carrying value and is classified as Level 2, as it is estimated using observable market inputs such as current interest rates and credit spreads for similar instruments. See Note 8. Derivative , for fair value information about our derivative instrument that is fair valued using Level 3 inputs. Non-Financial Assets Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. 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 53 weeks ended and the 52 weeks ended May 3, 2025 and April 27, 2024, respectively, we evaluated certain of our store-level long-lived assets for impairment, and recognized an impairment losses (non-cash) of $ 1,713 and $ 7,166 , respectively, on the Consolidated Statements of Operations. The fair value of the impaired long-lived assets was 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 Note 2. Basis of Presentation and Summary of Significant Accounting Policies. The following table shows the fair values of our non-financial assets 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: 53 weeks ended May 3, 2025 52 weeks ended April 27, 2024 Carrying Value Prior to Impairment Fair Value Impairment Loss (non-cash) Carrying Value Prior to Impairment Fair Value Impairment Loss (non-cash) Property and equipment, net $ 314 $ — $ 314 $ 460 $ 55 $ 405 Operating lease right-of-use assets 1,006 716 290 8,044 4,444 3,600 Intangible assets, net 1,109 — 1,109 3,860 699 3,161 Other noncurrent assets — — — — — — Total $ 2,429 $ 716 $ 1,713 $ 12,364 $ 5,198 $ 7,166 Non-Financial Liabilities We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards is remeasured at the end of each reporting period through settlement using a Black-Scholes option-pricing model, which incorporates significant inputs including the risk-free interest rate, expected volatility, expected dividend yield, and expected term or vesting period. As of May 3, 2025, we recorded a liability, which is immaterial to the balance sheet (Level 2 input) and is reflected in accrued liabilities on the Consolidated Balance Sheet. As of May 3, 2025 and April 27, 2024, respectively, we recorded an immaterial liability (Level 2 input) which is reflected in accrued liabilities on the Consolidated Balance Sheet. As of May 3, 2025, all phantom share units have been settled or forfeited. For additional information, see Note 14. Long-Term Incentive Compensation Expense . Note 8. Derivative Participation Interest Purchase Agreement During April 2025, the Company entered into a Participation Interest Purchase Agreement (the “Agreement”) with Jefferies Leveraged Credit Products LLC (“Jefferies”), under which Jefferies paid the Company $ 12,625 in exchange for a participation 87 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) interest in the proceeds of a specified litigation claim. The Agreement is presented in Other long-term liabilities on the Consolidated Balance Sheet as of May 3, 2025. The Agreement is non-recourse to the Company with respect to financial risk; Jefferies’ entitlement to payment is limited to proceeds, if any, received from the litigation. However, the Company has continuing contractual obligations under the Agreement, including remaining the plaintiff of record, cooperating with Jefferies and its counsel, providing access to litigation-related documents, and following directions regarding the settlement of monetary damages. These obligations are necessary to preserve Jefferies’ entitlement and avoid any clawback. Management evaluated the Agreement under ASC 815, Derivatives and Hedging , ASC 470, Debt-Overall , and ASU 2025-07, Scope Application of Derivative Guidance to Litigation Funding and Similar Arrangements . Prior to adoption of ASU 2025-07, the Agreement was concluded to meet the definition of a derivative under ASC 815 because its value is derived from the outcome of the litigation, it required no significant initial investment other than the participation amount, and it could be settled based on net proceeds. Accordingly, the Agreement was accounted for as a derivative liability, measured at fair value with subsequent changes recognized in earnings. ASU 2025-07 has not yet been adopted. The derivative liability is classified within Level 3 of the fair value hierarchy under ASC 820, as valuation is based on significant unobservable inputs, including management’s assessment of the underlying litigation's outcome and timing of potential settlement proceeds. At inception, the fair value of the derivative liability approximated the transaction price of $ 12,625 , which represented an orderly, arm’s-length exchange between market participants. The fair value will continue to be measured on a recurring basis using unobservable inputs consistent with Level 3 classification. The fair value will continue to be measured on a recurring basis using unobservable inputs consistent with Level 3 classification. As of May 3, 2025, the fair value of the derivative liability remained substantially unchanged from the initial recognition amount of $ 12,625 , and any mark-to-market adjustments recognized through year-end were inconsequential. Upon adoption of ASU 2025-07, which provides a scope exception from derivative accounting for litigation funding and similar arrangements that do not create or modify debt, the Agreement will no longer meet the definition of a derivative under ASC 815. Under the new guidance, the Agreement will be accounted for under ASC 470 - Debt as deferred income, as the arrangement does not create a debt obligation of the Company. The deferred income will be recognized in earnings when the related litigation is resolved and any proceeds are distributed. The guidance in ASU 2025-07 will be applied using a modified retrospective approach, under which the previously recognized derivative liability will be reclassified to deferred income and a cumulative effect adjustment will be recorded to retained earnings as of the Company’s planned early adoption date, during the fiscal quarter ending November 1, 2025. Note 9. Debt As of Maturity Date (a) May 3, 2025 April 27, 2024 Credit Facility June 9, 2028 $ 103,100 $ 164,947 Term Loan April 7, 2025 — 32,653 Sub-total 103,100 197,600 Less: Deferred financing costs, Term Loan (b) — ( 1,263 ) Total long-term debt $ 103,100 $ 196,337 Balance Sheet classification: Long-term borrowings 103,100 196,337 Total long-term debt $ 103,100 $ 196,337 (a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock. (b) For additional information, see Deferred Financing Costs below. 88 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Transaction On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the 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, 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. 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 $ 85,500 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. Credit Facility The Company has informed its lenders of the ongoing investigation and related restatement process, and its inability to deliver its fiscal 2025 annual financial statements, as well as its first and second quarter fiscal 2026 financial statements, by the dates originally required under its asset-based revolving credit facility (the “Credit Facility”). The Company requested that the lenders extend these reporting deadlines and waive certain related representations and warranties that may be impacted by the investigation and the resulting restatement of the Company’s previously issued financial statements. On August 8, 2025, the lenders and the administrative agent entered into a limited consent and waiver, providing a 75-day extension of the reporting deadlines to October 22, 2025, and waiving any potential breach of certain representations related to financial reporting impacted by the review. In connection with the waiver, the Company paid a fee of $ 325 , equal to 0.10 % of the aggregate revolving commitments, which was fully earned and payable on the effective date. On October 21, 2025, the Company exercised its option to request the additional 45-day extension permitted under the waiver, and the lenders granted the request, extending the reporting deadline to December 6, 2025. In accordance with the agreement, the Company paid a second waiver fee of $ 325 , also equal to 0.10 % of the revolver commitments, fully earned and payable on the effective date of the extension. On December 5,2025, the Company and its lenders entered into a Second Limited Consent and Waiver, further extending the delivery deadlines for the fiscal 2025 annual financial statements, and the first and second quarter fiscal 2026 financial statements to January 20, 2026. Under the Second Limited Consent and Waiver, the lenders agreed to (i) extend the reporting deadlines to the Permitted January Deadline of January 20, 2026, and (ii) waive potential breaches of representations under Section 5.15 of the Credit Agreement related solely to the ongoing financial reporting review during the extension period. In consideration of the extension, the Company paid an additional fee equal to 0.10 % of each consenting lender’s revolving credit commitment, which was fully earned and payable on the effective date. During the limited extension period, the Company is required to (i) deliver weekly Approved Budget Updates and Variance Reports, (ii) make members of management available for bi-weekly update calls with the lenders, and (iii) maintain minimum excess availability of at least $ 30,000 under the Credit Facility. Failure to comply with these conditions constitutes an immediate event of default. The Company has informed its lenders that it is conducting a detailed review of certain financial reporting and accounting practices related to the calculation of EBITDA for fiscal years 2025 and 2024. As a result of this ongoing review, the Company was not able to deliver its fiscal 2025 annual financial statements or its fiscal first quarter 2026 financial statements by the deadlines originally required under the Credit Facility. Pursuant to the A&R Credit Agreement, the lenders have committed to provide a four-year asset-backed revolving credit facility (the "Credit Facility") in an aggregate committed principal amount of up to $ 325,000 . and extended the maturity date of the Credit Facility to June 9, 2028. During the 53 weeks ended May 3, 2025, we incurred debt issuance costs totaling $ 3,669 related to the Credit Facility under the A&R Credit Agreement. 89 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Proceeds from the Credit Facility are and will be used for general corporate purposes, including seasonal working capital needs. The Company has interest-only obligations under the Credit Facility until the maturity date, at which time the total principal outstanding is due and payable. Interest under the Credit 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 A&R 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 (as defined in the A&R Credit Agreement) and other specified payments, merge with other entities, dispose of or acquire assets, or engage in transactions with affiliates, among other things. Additionally, the A&R Credit Agreement 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 A&R 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 on or about May 31, 2025, the Company is required to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) 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; and • commencing with the quarter ending on or about October 31, 2024, the Company is required to maintain a minimum Consolidated EBITDA (as defined in the A&R Credit Agreement), 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 A&R Credit Agreement contains customary events of default, including for non-payment of obligations owing under the Credit 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 A&R Credit Agreement also contains customary affirmative covenants and representations and warranties. 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-assets lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate). In connection with the Credit Facility, a 1.00 % fee was payable in connection with the eighth amendment to the Original Credit Agreement (prior to its amendment and restatement), of which 50 % was paid on September 2, 2024 and 50 % is due and payable on June 10, 2025. During the 53 weeks ended May 3, 2025, we borrowed $ 887,055 and repaid $ 948,920 under the Credit Facility, with $ 103,100 of outstanding borrowings under the Credit Facility as of May 3, 2025. During the 52 weeks ended April 27, 2024, we borrowed $ 563,023 and repaid $ 552,230 under the Credit Facility, with $ 164,947 of outstanding borrowings as of April 27, 2024. As of May 3, 2025 and April 27, 2024, we issued $ 575 and $ 3,575 , respectively, in letters of credit under the Credit Facility. During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $ 11,516 related to the July 2023 amendment the Original Credit Agreement. 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 A&R Credit Agreement. As of May 3, 2025, and as of the issuance date of this Annual Report on Form 10-K , the Company remained in compliance with all covenants under the A&R Credit Agreement. The following is a summary of the various Credit Agreement amendments. April 2024 Credit Agreement Amendment 90 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 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, 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 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. Under the Credit Agreement, the lenders originally committed to providing us with an asset-backed revolving credit facility in an aggregate principal amount of $ 400,000 , which was reduced to $ 380,000 by the April 2024 amendment. During the 52 weeks ended April 27, 2024, we incurred debt issuance costs totaling $ 851 related to the April 2024 Credit Agreement amendment. 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. 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. 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. 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 (i) 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 (ii) 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. 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. July 2023 Credit Agreement Amendment 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 91 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 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). 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. Term Loan On June 10, 2024, our existing Term Loan Credit Agreement (the "Term Loan") dated June 7, 2022, lenders converted approximately $ 34,000 of outstanding principal and accrued and unpaid interest into our Common Stock, resulting in financing noncash flow activity totaling $ 86,755 . We recognized a loss on extinguishment of debt of $ 55,233 in the Consolidated Statement of Operations in connection with the Term Loan debt conversion which represents the difference between the Common Stock fair value issued upon conversion and the net carrying value of the Term Loan, plus unamortized deferred financing costs related to the Term Loan. As a result of the Term Loan Debt Conversion, the Term Loan and its related agreements were terminated. See Note 6. Equity and Earnings (Loss) Per Share . On June 7, 2022, we entered into a Term Loan Credit Agreement with TopLids LendCo, LLC and Vital Fundco, LLC (the “Term Loan” or “Term Loan Credit Agreement”). The Term Loan provided for term loans in an amount equal to $ 30,000 and matured on April 7, 2025. The proceeds of the Term Loans were being used to finance working capital, and to pay fees and expenses related to the Term Loan. The Term Loan provided for term loans in an amount equal to $ 30,000 and, the loans thereunder, matured on April 7, 2025. The proceeds of the Term Loan were being used to finance working capital, and to pay fees and expenses. During the 53 weeks ended May 3, 2025, we incurred $ 0 for interest in kind and repaid $ 0 under the Term Loan, with $ 0 of outstanding borrowings as of May 3, 2025. During the 52 weeks ended April 27, 2024, we incurred $ 2,652 for interest in kind and repaid $ 0 , with $ 32,652 of outstanding borrowings as of April 27, 2024. The Term Loan accrued interest at a rate equal to 11.25 %, payable quarterly. 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 did not amortize prior to maturity. The Term Loan did 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 A&R 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. The Term Loan was secured by second-priority liens on all assets securing the obligations under the A&R Credit Agreement, which are all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan and the other loan documents executed in connection therewith. 92 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The A&R Credit Agreement permits us to incur the Term Loan and also provides that, upon repayment of the Term Loan (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 . 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 required 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). 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 On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Credit 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 Credit Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Credit Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $ 50 to the lenders under the Term Loan Credit Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in 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. 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) May 3, 2025 April 27, 2024 Credit Facility - Prepaid and Other Current Assets June 9, 2028 $ — $ — Credit Facility - Other noncurrent assets 11,597 12,897 Credit Facility - sub-total 11,597 12,897 Term Loan - Contra Debt — 1,263 Total deferred financing costs $ 11,597 $ 14,160 (a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility 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 Note 9. Debt. 93 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Interest The following table presents interest expense and cash interest paid: 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 Interest Incurred Credit Facility $ 16,279 $ 24,409 Term Loan 1,167 3,984 Total Interest Incurred $ 17,446 $ 28,393 Amortization of Deferred Financing Costs Credit Facility $ 5,014 $ 11,910 Term Loan 150 1,240 Total Amortization of Deferred Financing Costs $ 5,164 $ 13,150 Interest Income, net of expense $ ( 350 ) $ ( 1,178 ) Total Interest Expense $ 22,260 $ 40,365 Cash Interest Paid $ 17,912 $ 24,943 Note 10. Leases 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 Topic 842, Leases . Our portfolio of leases consists of operating leases comprised of operating agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We have one immaterial finance lease and no short-term leases (i.e., those with a term of twelve months or less). 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. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years , and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year. Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: (i) a percentage of revenues or sales arising at the relevant premises (“variable commissions”), and/or (ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term. For variable commissions, we recognize lease expense as incurred. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants. We use our incremental borrowing rate to determine the present value of fixed lease payments based on the information available at the lease commencement date, if the rate implicit in the lease is not readily determinable. We utilize an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later. 94 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following table summarizes lease expenses: 53 weeks ended 52 weeks ended As Restated May 3, 2025 April 27, 2024 Variable lease expense $ 134,934 $ 132,833 Fixed lease expense 60,515 63,865 Total lease expense $ 195,449 $ 196,698 The following table summarizes our minimum fixed lease obligations, excluding variable commissions, as of May 3, 2025: As of May 3, 2025 Fiscal 2026 $ 71,853 Fiscal 2027 35,457 Fiscal 2028 29,448 Fiscal 2029 26,063 Fiscal 2030 19,586 Thereafter 18,469 Total lease payments 200,876 Less: imputed interest ( 20,857 ) Operating lease liabilities at period end $ 180,019 Future lease payment obligations related to leases that were entered into, but did not commence as of May 3, 2025, were not material. The following summarizes additional information related to our operating leases: As of May 3, 2025 April 27, 2024 As Restated Weighted average remaining lease term (in years) 4.6 years 4.6 years Weighted average discount rate 5.5 % 4.8 % Supplemental cash flow information related to leases is as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 72,434 $ 66,397 Operating cash flows from financing leases 32 — Financing cash flows from financing leases 370 — ROU assets obtained in exchange for lease obligations: Operating leases 24,716 30,090 Financing leases 1,128 — 95 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Note 11. Supplementary Information Other (income) expenses During the 53 weeks ended May 3, 2025, we recognized other income totaling $ 1,572 , comprised primarily of an $ 8,780 gain related to the termination of liabilities related to a frozen retirement benefit plan (non-cash), primarily offset by $ 2,095 related to severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction initiatives, $ 2,091 for legal and advisory professional service costs primarily related to restructuring activities and other charges, $ 1,963 of severance primarily related to the resignation of our former Chief Executive Officer on June 11, 2024, $ 1,388 of which is included in accrued liabilities in the Consolidated Balance Sheet as of May 3, 2025, and $ 1,059 related to the settlement of a class action lawsuit and related legal fees. We recognized an increase to additional paid in capital on the Consolidated Balance Sheet for the reimbursement of the former Chief Executive Officer severance from VitalSource (a principal stockholder) as part of the June 10, 2024 financing transactions. During the 52 weeks ended April 27, 2024, we recognized other expense 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, partially offset by $ 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. On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet, and provide additional flexibility for working capital needs. For additional information, see Note 9. Debt. 0Note 12. Related Party Transactions MBS Textbook Exchange, LLC Prior to the acquisition of MBS on February 27, 2017, MBS was considered a related-party as it was majority-owned by Leonard Riggio, who is a principal owner holding substantial shares of our common stock, and other members of the Riggio family. Subsequent to the acquisition, the consolidated financial statements include the accounts of MBS and all material intercompany accounts and transactions have been eliminated in consolidation. MBS leases its main warehouse and distribution facility located in Columbia, Missouri from MBS Realty Partners L.P. which is majority-owned by Leonard Riggio, with the remaining ownership by other sellers of MBS. The lease was originally entered into in 1991 and included a renewal option which extended the lease through September 1, 2023. Effective January 1, 2025, MBS amended the lease agreement to lower the rent and extend the term to December 31, 2028. Rent payments to MBS Realty Partners L.P. were approximately $ 660 and $ 690 during the 53 weeks ended May 3, 2025 and 52 weeks ended April 27, 2024, 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., jointly as 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). On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. TopLids owns approximately 5 % of our Common Stock outstanding following the closing of the Transactions. Total commission revenue from the F/L Relationship was $ 116,546 and $ 126,886 , during the 53 weeks ended May 3, 2025 and 52 weeks ended April 27, 2024, respectively. Total receivables from Fanatics was $ 1,208 and $ 1,061 , as of May 3, 2025 and April 27, 2024, respectively. For additional information, see Note 1. Organization, Note 6. Equity and Earnings (Loss) Per Share, and Note 9. Debt. VitalSource Technologies, Inc. On June 7, 2022, we entered into a Term Loan Credit Agreement with TopLids LendCo, LLC (see discussion above) and 96 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Vital Fundco, LLC (a subsidiary of Vital Technologies, Inc. (“VitalSource”)). We have contracted with VitalSource to provide digitally formatted courseware, from all major publishers. On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. VitalSource owns more than 5 % of our Common Stock outstanding following the closing of the Transactions. Total purchases from VitalSource were $ 454,502 and $ 331,232 , during the 53 weeks ended May 3, 2025 and 52 weeks ended April 27, 2024, respectively. Total accounts payable to VitalSource was $ 38,484 and $ 132,611 , as of May 3, 2025 and April 27, 2024, respectively. For additional information, see Note 1. Organization, Note 6. Equity and Earnings (Loss) Per Share, and Note 9. Debt. Immersion On June 10, 2024, Immersion purchased a controlling interest in the Company. During Fiscal 2025, the Company reimbursed Immersion approximately $ 750 in transaction costs related to the purchase and integration due to such transaction. Note 13. Employees 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 $ 0 and $ 1,687 , during the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024, 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. Note 14. Long-Term Incentive Compensation Expense We have reserved 2,179,093 shares of our common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. 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 phantom share units (or "Phantom Shares"). 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 . We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied. Restricted Stock Awards An RS award is an award of common stock that is subject to certain restrictions during a specified period. RS awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. RS awards will have a minimum vesting period of one year . An RSU is a grant valued in terms of our common stock, but no stock is issued at the time of grant. Each RSU may be redeemed for one share of our common stock once vested. RSUs are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested RSUs have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). RSUs generally vest over a period of three years , but will have a minimum vesting period of one year . Phantom Shares Phantom Shares were 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 a specific value per share. 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. The fair value of the liability for the cash-settled Phantom Share awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. 97 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) As of May 3, 2025 and April 27, 2024, respectively, we recorded an immaterial liability (Level 2 input) related to phantom share unit grants which is reflected in accrued liabilities on the Consolidated Balance Sheets. Stock Options For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. 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. 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. 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. 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 On June 11, 2024, we completed 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 were converted into one share of the Company’s common stock. 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 Performance Share Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance, April 27, 2024 — $ — 4,853 $ 503.72 468 $ 850.00 — $ — Granted 111,484 $ 9.79 68,731 $ 9.46 — $ — 1,729,750 $ 9.55 Vested ( 29,764 ) $ 9.79 ( 9,515 ) $ 147.17 ( 428 ) $ — — $ — Forfeited — $ — ( 2,076 ) $ 448.33 ( 40 ) $ — ( 92,800 ) $ 9.61 Balance, May 3, 2025 81,720 $ 9.79 61,993 $ 12.39 — $ — 1,636,950 $ 9.55 As of the 53 weeks ended May 3, 2025, we granted the following awards under the Equity Incentive Plan: • On June 18, 2024, we granted 7,441 RSUs and 29,764 RSAs to members of the Board of Directors. The RSAs vested on September 18, 2024. • On September 20, 2024, we granted 61,290 RSUs and 81,720 RSAs to members of the Board of Directors. The RSUs vest on the earlier of one year from the date of grant or the next annual meeting of stockholders. • On September 20, 2024, we granted 1,533,250 PSUs to employees that include both a service condition and a market condition in order for PSUs to vest. The PSUs vest upon our Common Stock achieving a specified price per share (measured using a 100-day average volume weighted average price ("VWAP") for each of three tranches), and continued employment through a specified date. There is a period of seven years from the grant date in order to achieve the specific target share price. We have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the derived service period regardless of whether the market condition is satisfied. The fair value models for the PSUs use assumptions that include the risk-free interest rate and expected volatility. 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 PSU term. Volatility is based on the historical volatility of the Company’s Common Stock over a period of time corresponding to the expected PSU term. • On February 21, 2025, March 12, 2025, and March 31, 2025, we granted 77,000 , 112,000 and 7,500 PSUs, respectively, to employees that include both a service condition and market condition in order for PSUs to vest. The PSUs vest upon our Common Stock achieving a specified price per share (measured using a 100-trading-day average VWAP for each of three tranches), and continued employment through a specified date. There is a period of seven years from the grant date in order to achieve the specific target share price. We have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the derived 98 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) service period regardless of whether the market condition is satisfied. The fair value models for the PSUs use assumptions that include the risk-free interest rate and expected volatility. 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 PSU term. Volatility is based on the historical volatility of the Company’s Common Stock over a period of time corresponding to the expected PSU term. September 20, 2024 PSU Tranche #1 PSU Tranche #2 PSU Tranche #3 Performance Milestone (VWAP) $ 10.00 $ 15.00 $ 20.00 Valuation method utilized Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 3.53 % 3.53 % 3.53 % Company volatility 119.84 % 119.84 % 119.84 % Derived service period 1.0 year 2.0 years 3.0 years Grant date fair value per award $ 9.74 $ 9.62 $ 9.46 February 21, 2025 PSU Tranche #1 PSU Tranche #2 PSU Tranche #3 Performance Milestone (VWAP) $ 10.00 $ 15.00 $ 20.00 Valuation method utilized Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 4.27 % 4.27 % 4.27 % Company volatility 120.50 % 120.50 % 120.50 % Derived service period 0.40 years 0.67 years 1.00 year Grant date fair value per award $ 10.10 $ 10.02 $ 9.94 March 12, 2025 PSU Tranche #1 PSU Tranche #2 PSU Tranche #3 Performance Milestone (VWAP) $ 10.00 $ 15.00 $ 20.00 Valuation method utilized Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 4.13 % 4.13 % 4.13 % Company volatility 120.51 % 120.51 % 120.51 % Derived service period 0.41 years 0.87 years 1.21 years Grant date fair value per award $ 8.46 $ 8.38 $ 8.29 March 31, 2025 PSU Tranche #1 PSU Tranche #2 PSU Tranche #3 Performance Milestone (VWAP) $ 10.00 $ 15.00 $ 20.00 Valuation method utilized Monte Carlo Monte Carlo Monte Carlo Risk-free interest rate 4.03 % 4.03 % 4.03 % Company volatility 120.68 % 120.68 % 120.68 % Derived service period 0.40 years 0.63 years 0.96 years Grant date fair value per award $ 10.41 $ 10.32 $ 10.24 99 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Stock Options Number of Shares Weighted Average Grant Date Fair Value Weighted Average Exercise Price Balance, April 27, 2024 25,190 $ 241.00 $ 524.00 Granted — $ — $ — Exercised — $ — $ — Forfeited ( 6,978 ) $ 269.24 $ 562.92 Expired ( 14,394 ) $ 222.71 $ 496.92 Balance, May 3, 2025 3,818 $ 261.35 $ 552.07 Exercisable, May 3, 2025 3,200 $ 248.85 $ 533.70 The aggregate grant date fair value of stock options that vested during the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024 was $ 566 and $ 1,540 , respectively. Total fair value of vested share awards during the periods ended May 3, 2025 and April 27, 2024 was $ 2,258 and $ 4,405 , respectively. Long-Term Incentive Compensation Expense We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows: 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 Stock-based awards Restricted stock expense $ 667 $ 11 Restricted stock units expense 604 2,041 Performance share units expense (a) 4,913 — Stock option expense (b) ( 798 ) 1,328 Sub-total stock-based awards: $ 5,386 $ 3,380 Cash settled awards Phantom share units expense $ ( 4 ) $ ( 154 ) Total compensation expense for long-term incentive awards $ 5,382 $ 3,226 (a) Long-term incentive compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants. (b) The stock option expense for the 53 weeks ended May 3, 2025 was primarily impacted due to forfeitures resulting from the resignation of our former Chief Executive Officer on June 11, 2024. Total unrecognized compensation cost related to unvested awards as of May 3, 2025 was $ 11,384 and is expected to be recognized over a weighted-average period of 1.86 years. Note 15. Income Taxes For Fiscal 2025 and Fiscal 2024, we had no material revenue or expense in jurisdictions outside the United States other than India. Impact of U.S. Tax Reform On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”) was enacted. We have analyzed the provisions, which provide for a technical correction to allow for full expensing of qualified leasehold improvements, modifications to charitable contributions 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 100 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 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. As of May 3, 2025, we recognized a current income tax receivable for NOL carrybacks in prepaid and other current assets on the Consolidated Balance Sheet. We received a $ 15,774 refund in Fiscal 2023 and a $ 7,621 refund in Fiscal 2024 and a final refund of $ 2,403 in Fiscal 2025. The components of Income tax expense are as follows: 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 Current: As Restated Federal $ 3,484 $ — State 1,329 318 International 272 417 Total Current 5,085 735 Deferred: Federal ( 829 ) 123 State — — International — — Total Deferred ( 829 ) 123 Total $ 4,256 $ 858 Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows: 53 weeks ended 52 weeks ended May 3, 2025 April 27, 2024 As Restated Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal income tax benefit ( 0.4 ) 2.5 Permanent book / tax differences ( 18.1 ) ( 1.4 ) Changes in valuation allowance ( 8.9 ) ( 23.2 ) Other, net ( 0.5 ) ( 0.1 ) Effective income tax rate ( 6.9 ) % ( 1.2 ) % The effective tax rate for the 53 weeks ended May 3, 2025 is lower than the prior year comparable period due to permanent differences related to the debt-to-equity conversion, attribute limitations due to IRC 382, and valuation allowance movement. One percentage point on our Fiscal 2025 effective tax rate is approximately $ 616 . The other permanent book to tax differences are principally comprised of a loss on the conversion of debt to equity, 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. 101 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The significant components of our deferred taxes consisted of the following: As of May 3, 2025 April 27, 2024 As Restated Deferred tax assets: Estimated accrued liabilities $ 7,061 $ 3,279 Inventory 18,964 19,402 Stock-based compensation 1,809 979 Operating lease liabilities 43,582 52,070 Tax credits 1,072 1,131 Goodwill 6,395 7,329 Divestitures & Capital Losses 2,796 — Net operating losses 65,404 81,714 Interest carryforwards 14,889 14,897 Property and equipment 2,514 795 Other 1,398 4,071 Gross deferred tax assets 165,884 185,667 Valuation allowance ( 84,566 ) ( 79,065 ) Net deferred tax assets 81,318 106,602 Deferred tax liabilities: Intangible asset amortization ( 16,304 ) ( 19,757 ) Operating lease right-of-use assets ( 46,955 ) ( 55,417 ) Deferred Financing Costs ( 2,250 ) — LIFO inventory valuation ( 16,944 ) ( 33,392 ) Gross deferred tax liabilities ( 82,453 ) ( 108,566 ) Net deferred tax liability $ ( 1,135 ) $ ( 1,964 ) As of May 3, 2025 and April 27, 2024, we had $ 0 of unrecognized tax benefits. Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of both May 3, 2025 and April 27, 2024, we had accrued $ 0 for net interest and penalties. In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. In evaluating our ability to utilize our deferred tax assets, we considered all available evidence, both positive and negative, in determining future taxable income on a jurisdiction-by-jurisdiction basis. As of May 3, 2025, we recorded a valuation allowance of $ 84,566 compared to $ 79,065 as of April 27, 2024, a net increase of $ 5,501 due to fluctuations in U.S. deferred tax assets and liabilities. As of May 3, 2025, we had state NOL carryforwards of approximately $ 406,041 , which will begin to expire in 2026, state tax credit carryforwards totaling $ 295 which will begin to expire in 2025, federal tax credit carryforward of $ 1,071 which will begin to expire in 2040 and federal NOLs of approximately $ 211,913 , which have an indefinite carryforward period. As of May 3, 2025, we recorded $ 229 of foreign withholding tax related to future repatriations of earnings from certain foreign subsidiaries. We are subject to U.S. federal income tax, as well as income tax in jurisdictions of each state having an income tax. The tax years that remain subject to examination are primarily Fiscal 2018 and forward. Some earlier years remain open for a small minority of states. 102 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (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 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 Term Loan Debt Conversion completed on June 10, 2024, we may have experienced an ownership change as defined by Sections 382 and 383. The Company conducted a study to determine if an ownership change occurred. It was determined that an ownership change occurred under Section 382 and 383, and the corresponding annual limitations materially impact the utilization of our tax attributes including our $ 211,913 NOL carryforwards, $ 60,195 disallowed interest expense carryforwards, and $ 1,071 tax credit carryforwards as of May 3, 2025. The Company anticipates that $ 63,092 of these tax attributes will be made available during Fiscal 2026 and Fiscal 2027. The Company does not have any material uncertain tax positions requiring recognition in the financial statements as of May 3, 2025. Note 16. 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. We record a liability when we believe that it is both probable that a loss has been incurred and the amount of loss can be reasonably estimated. Based on our current knowledge, we do not believe that there is a reasonable possibility that the final outcome of any pending or threatened legal proceedings to which we or any of our subsidiaries are a party, either individually or in the aggregate, will have a material adverse effect on our future financial results. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. As such, there can be no assurance that the final outcome of these matters will not materially and adversely affect our business, financial condition, results of operations or cash flows. Note 17. Commitments and Contingencies We generally operate our physical bookstores pursuant to multi-year school management contracts under which a school designates us to operate the official school physical bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these operating agreements for our physical bookstores under lease accounting. We recognize lease assets and lease liabilities on the Consolidated Balance Sheets for substantially all fixed lease arrangements (excluding variable obligations) with a term greater than twelve months. For additional information on lease expense and minimum fixed lease obligations, excluding variable commissions, see Note 10. Leases . Purchase obligations, which includes information technology contracts, as of May 3, 2025, are as follows: Less Than 1 Year $ 9,970 1-3 Years 4,209 3-5 Years 2,074 Total $ 16,253 Note 18. Concentration Risk The Company purchases a significant portion of its merchandise from a related-party supplier, which accounted for approximately 45 % of total purchases for the fiscal year ended May 3, 2025. In accordance with ASC 850 – Related Parties , the Company discloses this related-party relationship and evaluates all transactions with this supplier to ensure they are conducted on terms comparable to those with unrelated parties. While the Company actively monitors supplier performance, seeks to diversify its supplier base, and pursues alternative sources of supply where feasible, a disruption in the supply chain from this supplier could have a material adverse effect on the Company’s operations and financial results. Note 19. Selected Quarterly Financial Information (Unaudited) Prior to filing the Company’s May 3, 2025, Form 10-K, management determined that both the cost of digital sales and the expense recognition for store operating agreements under ASC 842, Leases , had been recorded inappropriately. In addition, as a part of completing our year-end financial statement close and preparation of our consolidated financial statements and related disclosures for the fiscal year ended May 3, 2025, we determined we had additional errors related to Textbook rental inventory and a legal settlement, see Note 2, Summary of Significant Accounting Policies for further detail. The Company's Audit 103 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Committee of the Company's Board of Directors concluded it is appropriate to restate the unaudited quarterly condensed consolidated financial statements for the 13 weeks ended July 29 , 2023, October 28, 2023, January 27, 2024, July 27, 2024, October 26, 2024 and January 25, 2025. A summary of quarterly financial information for the 53 weeks and 52 weeks ended May 3, 2025 and April 27, 2024, respectively, is as follows: 13 Weeks Ended (a) 14 Weeks Ended (a) As Restated As Restated As Restated July 27, 2024 October 26, 2024 January 25, 2025 May 3, 2025 Sales $ 263,431 $ 602,122 $ 462,825 $ 281,792 Gross profit $ 44,996 $ 128,477 $ 93,750 $ 70,581 Net (loss) income (b)(c)(d) $ ( 103,925 ) $ 43,162 $ 17,942 $ ( 23,004 ) (Loss) earnings per common share: (e) Basic and Diluted Total Basic (Loss) Earnings per share $ ( 7.69 ) $ 1.63 $ 0.59 $ ( 0.68 ) Weighted average common shares outstanding - Basic: 13,510,667 26,527,174 30,507,723 34,053,847 Total Diluted (Loss) Earnings per share $ ( 7.69 ) $ 1.63 $ 0.59 $ ( 0.68 ) Weighted average common shares outstanding - Diluted: 13,510,667 26,541,804 30,642,958 34,053,847 (a) For information related to quarterly seasonality and other variance components, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies - Seasonality . (b) Includes $ 3,618 , $( 150 ), $( 6,268 ), and $ 1,228 of other (income) expense for the 13 weeks ended July 27, 2024, October 26, 2024, January 25, 2025 and 14 weeks ended May 3, 2025, respectively. (c) Includes $ 0 , $ 0 , $ 1,713 , and $ 0 of impairment loss (non-cash) for the 13 weeks ended July 27, 2024, October 26, 2024, January 25, 2025 and 14 weeks ended May 3, 2025, respectively. (d) Includes $ 7,618 , $ 5,463 , $ 5,083 , and $ 4,096 of interest expense for the 13 weeks ended July 27, 2024, October 26, 2024, January 25, 2025 and 14 weeks ended May 3, 2025, respectively. (e) On June 10, 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, 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 were 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. 104 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 13 Weeks Ended (a) As Restated July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 Sales $ 264,161 $ 610,379 $ 456,673 $ 235,922 Gross profit $ 48,205 $ 140,697 $ 100,601 $ 55,410 (Loss) income from continuing operations, net of tax (b)(c)(d) $ ( 52,500 ) $ 29,091 $ ( 9,621 ) $ ( 41,989 ) (Loss) income from discontinued operations, net of tax $ ( 417 ) $ ( 674 ) $ 289 $ 72 Net (loss) income (b)(c)(d) $ ( 52,917 ) $ 28,417 $ ( 9,332 ) $ ( 41,917 ) (Loss) earnings per common share: (e) Basic and Diluted Continuing operations $ ( 19.83 ) $ 10.96 $ ( 3.60 ) $ ( 15.71 ) Discontinued operations ( 0.16 ) ( 0.25 ) 0.11 0.02 Total Basic (Loss) Earnings per share $ ( 19.99 ) $ 10.71 $ ( 3.49 ) $ ( 15.69 ) Weighted average common shares outstanding - Basic: 2,647,536 2,655,006 2,673,240 2,673,403 Continuing operations $ ( 19.83 ) $ 10.95 $ ( 3.60 ) $ ( 15.71 ) Discontinued operations ( 0.16 ) ( 0.25 ) 0.11 0.02 Total Diluted (Loss) Earnings per share $ ( 19.99 ) $ 10.70 $ ( 3.49 ) $ ( 15.69 ) Weighted average common shares outstanding - Diluted: 2,647,536 2,655,799 2,673,240 2,673,403 (a) For information related to quarterly seasonality and other variance components, see Part II - Item 7. Management's Discussion and Analysis - Results of Operations and Note 2. Basis of Presentation and 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. (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. (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. (e) On June 10, 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, 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 were 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. Note 20. Subsequent Events As previously disclosed, the Company was unable to timely file certain periodic reports due to the completion of a review of certain accounting matters and, as a result, has restated its previously issued consolidated financial statements for certain prior periods, as described in Note 2, Basis of Presentations and Summary of Significant Accounting Policies . Subsequent to May 3, 2025, the Company entered into limited consent and waiver arrangements with its lenders related to the timing of required financial statement deliveries and was in compliance with the applicable terms of these arrangements as of the issuance date of these financial statements. 105 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Note 21. Restatement of Quarterly Financial Information (Unaudited) Prior to filing the Company's Annual Report on Form 10-K for the fiscal year ended May 3, 2025, management determined that there were errors made related to the recording of digital cost of sales, as well as its expense recognition for its store operating agreements, which was not recorded in accordance with ASC Topic 842, Leases . In addition, as a part of completing our year-end financial statement close and preparation of our consolidated financial statements and related disclosures for the fiscal year ended May 3, 2025, we determined we had additional errors related to Textbook rental inventory and a legal settlement, see Note 2, Summary of Significant Accounting Policies for further detail. The Company's Audit Committee of the Board of Directors concluded that it is appropriate to restate the unaudited quarterly condensed consolidated financial statements for the quarterly periods ended July 29, 2023, October 28, 2023, January 27, 2024, July 27, 2024, October 26, 2024, and January 25, 2025 (collectively, the "Restated Periods"). The following tables summarize the impact of the restatements on the Company’s unaudited quarterly condensed consolidated financial statements for the Restated Periods: Summary of Restatements Consolidated Statements of Operations July 27, 2024 October 26, 2024 January 25, 2025 July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 Digital Cost Of Sales (a) Total sales $ — $ — $ ( 3,500 ) $ — $ — $ — $ — Product and other cost of sales $ ( 659 ) $ 12,409 $ ( 2,050 ) $ — $ — $ ( 2,513 ) $ 8,252 Rental cost of sales $ — $ 641 $ 143 $ — $ — $ — $ — Income tax expense (benefit) $ 2,458 $ ( 2,542 ) $ ( 12,655 ) $ — $ — $ — $ — Leases (b) July 27, 2024 October 26, 2024 January 25, 2025 July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 Product and other cost of sales $ 2,619 $ ( 3,475 ) $ 993 $ 2,266 $ ( 3,880 ) $ 1,898 $ 3,574 Rental cost of sales $ 250 $ ( 409 ) $ 43 $ 163 $ ( 575 ) $ 50 $ 689 Depreciation and amortization expense $ 14 $ 12 $ 13 $ — $ — $ — $ — Income tax expense (benefit) $ ( 236 ) $ ( 63 ) $ ( 2,117 ) $ 100 $ 218 $ 258 $ 99 Other Adjustments (c) July 27, 2024 October 26, 2024 January 25, 2025 July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 Rental cost of sales $ — $ — $ — $ — $ — $ — $ 1,939 Other (income) expense $ — $ — $ 1,300 $ — $ — $ — $ — Total Statement of Operations July 27, 2024 October 26, 2024 January 25, 2025 July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 Total sales $ — $ — $ ( 3,500 ) $ — $ — $ — $ — Product and other cost of sales $ 1,960 $ 8,934 $ ( 1,057 ) $ 2,266 $ ( 3,880 ) $ ( 615 ) $ 11,826 Rental cost of sales $ 250 $ 232 $ 186 $ 163 $ ( 575 ) $ 50 $ 2,628 Depreciation and amortization expense $ 14 $ 12 $ 13 $ — $ — $ — $ — Other (income) expense $ — $ — $ 1,300 $ — $ — $ — $ — Income tax expense (benefit) (d) $ 2,222 $ ( 2,605 ) $ ( 14,772 ) $ 100 $ 218 $ 258 $ 99 106 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Consolidated Balance Sheets As of As of As of As of As of As of As of July 27, 2024 October 26, 2024 January 25, 2025 July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024 (e) Digital Cost of Sales (a) Accounts receivable $ ( 2,424 ) $ ( 16,079 ) $ ( 10,722 ) $ — $ — $ 211 $ ( 5,272 ) Prepaid expenses and other current assets $ ( 1,811 ) $ ( 59 ) $ 3,700 $ — $ — $ — $ — Deferred tax assets, net $ — $ — $ ( 1,055 ) $ — $ — $ — $ — Accrued liabilities $ 2,656 $ 2,245 $ ( 4,691 ) $ — $ — $ ( 2,298 ) $ 467 Long-term deferred taxes, net $ 647 $ ( 337 ) $ 3,598 $ — $ — $ — $ — Accumulated deficit $ ( 7,538 ) $ ( 18,046 ) $ ( 6,984 ) $ — $ — $ 2,509 $ ( 5,739 ) Leases (b) Prepaid expenses and other current assets $ ( 411 ) $ — $ 3,067 $ — $ — $ — $ — Property and equipment, net $ 224 $ 211 $ 197 $ — $ — $ — $ — Operating lease right-of-use assets $ ( 22,949 ) $ ( 3,537 ) $ 15,096 $ ( 30,428 ) $ ( 3,298 ) $ 12,824 $ 14,814 Accrued liabilities $ 15,785 $ 21,120 $ 21,312 $ 16,649 $ 19,940 $ 34,607 $ 20,714 Current operating lease liabilities $ ( 62,510 ) $ ( 47,471 ) $ ( 28,461 ) $ ( 65,341 ) $ ( 46,581 ) $ ( 43,342 ) $ ( 25,246 ) Long-term deferred taxes, net $ 28 $ 385 $ 1,326 $ 100 $ 318 $ 576 $ 675 Long-term operating lease liabilities $ 5,971 $ 1,115 $ 1,590 $ ( 4,404 ) $ ( 3,780 ) $ ( 3,620 ) $ ( 1,566 ) Accumulated deficit $ 17,590 $ 21,525 $ 22,593 $ 22,568 $ 26,805 $ 24,603 $ 20,237 Other Adjustments (c) Textbook rental inventories $ ( 4,677 ) $ ( 4,677 ) $ ( 4,677 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 4,677 ) Accrued liabilities $ — $ — $ 1,300 $ — $ — $ — Other long-term liabilities $ — $ ( 7,828 ) $ — $ — $ — $ — $ — Comprehensive Income $ — $ 7,828 $ — $ — $ — $ — $ — Accumulated deficit $ ( 4,677 ) $ ( 4,677 ) $ ( 5,977 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 4,677 ) Total Balance Sheet Accounts receivable $ ( 2,424 ) $ ( 16,079 ) $ ( 10,722 ) $ — $ — $ 211 $ ( 5,272 ) Textbook rental inventories $ ( 4,677 ) $ ( 4,677 ) $ ( 4,677 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 2,738 ) $ ( 4,677 ) Prepaid expenses and other current assets $ ( 2,222 ) $ ( 59 ) $ 6,767 $ — $ — $ — $ — Property and equipment, net $ 224 $ 211 $ 197 $ — $ — $ — $ — Operating lease right-of-use assets $ ( 22,949 ) $ ( 3,537 ) $ 15,096 $ ( 30,428 ) $ ( 3,298 ) $ 12,824 $ 14,814 Deferred tax assets, net $ — $ — $ ( 1,055 ) $ — $ — $ — $ — Accrued liabilities $ 18,441 $ 23,365 $ 17,921 $ 16,649 $ 19,940 $ 32,309 $ 21,181 Current operating lease liabilities $ ( 62,510 ) $ ( 47,471 ) $ ( 28,461 ) $ ( 65,341 ) $ ( 46,581 ) $ ( 43,342 ) $ ( 25,246 ) Long-term deferred taxes, net $ 675 $ 48 $ 4,924 $ 100 $ 318 $ 576 $ 675 Long-term operating lease liabilities $ 5,971 $ 1,115 $ 1,590 $ ( 4,404 ) $ ( 3,780 ) $ ( 3,620 ) $ ( 1,566 ) Other long-term liabilities $ — $ ( 7,828 ) $ — $ — $ — $ — $ — Comprehensive Income $ — $ 7,828 $ — $ — $ — $ — $ — Accumulated deficit $ 5,375 $ ( 1,198 ) $ 9,632 $ 19,830 $ 24,067 $ 24,374 $ 9,821 (a) Reflects restatement adjustments to correct errors related to the recording of Cost of Digital Sales. (b) Reflects restatement adjustments related to the Company's accounting for its store operating agreements in accordance with ASC 842, Leases. (c) Reflects restatement adjustments primarily related to an accrued legal settlement of $ 1,300 reclassified from Q4 to Q3 2025, Textbook rental write offs of $ 1,939 in Q4 2024, and other immaterial error corrections primarily related to pension accounting in fiscal year 2025. (d) Reflects restatement adjustments related to the Company’s income tax accounting in accordance with ASC 740, Income Taxes for the three fiscal quarters ended January 25, 2025. The restatement adjustments are primarily a result of the changes to forecasted and actual pre-tax book income/(loss) utilized in arriving at the estimated annual effective tax rate. The income tax effects of the error corrections are also included in the consolidated balance sheet accounts. (e) Accumulated deficit reflects impact of the pre-2024 restatement adjustments $ 25,097 related to lease accounting and $( 2,738 ) related to Textbook rental inventory corrections. 107 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) The following presents the restated unaudited quarterly condensed financial statements for the quarter and year to date Restated Periods. BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share data) 13 Weeks Ended July 27, 2024 13 Weeks Ended July 29, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Sales: Product sales and other $ 250,926 $ — $ 250,926 $ 252,650 $ — $ 252,650 Rental income 12,505 — 12,505 11,511 — 11,511 Total sales 263,431 — 263,431 264,161 — 264,161 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 209,425 1,960 211,385 207,014 2,266 209,280 Rental cost of sales 6,800 250 7,050 6,513 163 6,676 Total cost of sales 216,225 2,210 218,435 213,527 2,429 215,956 Gross profit 47,206 ( 2,210 ) 44,996 50,634 ( 2,429 ) 48,205 Selling and administrative expenses 67,023 — 67,023 77,476 — 77,476 Depreciation and amortization expense 13,057 14 13,071 10,253 — 10,253 Loss on extinguishment of debt (a) 55,233 ( 55,233 ) — — — — Other expense 3,618 — 3,618 4,633 — 4,633 Operating loss ( 91,725 ) 53,009 ( 38,716 ) ( 41,728 ) ( 2,429 ) ( 44,157 ) Loss on extinguishment of debt — 55,233 55,233 — — — Interest expense, net 7,618 — 7,618 8,254 — 8,254 Loss from continuing operations before income taxes ( 99,343 ) ( 2,224 ) ( 101,567 ) ( 49,982 ) ( 2,429 ) ( 52,411 ) Income tax expense (benefit) 136 2,222 2,358 ( 11 ) 100 89 Loss from continuing operations ( 99,479 ) ( 4,446 ) ( 103,925 ) ( 49,971 ) ( 2,529 ) ( 52,500 ) Loss from discontinued operations — — — ( 417 ) — ( 417 ) Net loss $ ( 99,479 ) $ ( 4,446 ) $ ( 103,925 ) $ ( 50,388 ) $ ( 2,529 ) $ ( 52,917 ) Loss per share of Common Stock Basic and Diluted Continuing operations $ ( 7.36 ) $ ( 0.33 ) $ ( 7.69 ) $ ( 18.87 ) $ ( 0.96 ) $ ( 19.83 ) Discontinued operations — — — ( 0.16 ) — ( 0.16 ) Total Basic and Diluted Net Loss per share $ ( 7.36 ) $ ( 0.33 ) $ ( 7.69 ) $ ( 19.03 ) $ ( 0.96 ) $ ( 19.99 ) Weighted average shares of common stock outstanding - Basic and Diluted 13,510,667 — 13,510,667 2,647,536 — 2,647,536 (a) Reclassified the loss on debt extinguishment to non-operating income (loss). 108 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share data) 13 Weeks Ended October 26, 2024 13 Weeks Ended October 28, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Sales: Product sales and other $ 559,674 $ — $ 559,674 $ 569,698 $ — $ 569,698 Rental income 42,448 — 42,448 40,681 — 40,681 Total sales 602,122 — 602,122 610,379 — 610,379 Cost of sales (exclusive of depreciation and amortization expense): — Product and other cost of sales 442,092 8,934 451,026 451,953 ( 3,880 ) 448,073 Rental cost of sales 22,387 232 22,619 22,184 ( 575 ) 21,609 Total cost of sales 464,479 9,166 473,645 474,137 ( 4,455 ) 469,682 Gross profit 137,643 ( 9,166 ) 128,477 136,242 4,455 140,697 Selling and administrative expenses 72,940 — 72,940 85,961 — 85,961 Depreciation and amortization expense 8,530 12 8,542 10,175 — 10,175 Other (income) expense ( 150 ) — ( 150 ) 4,274 — 4,274 Operating income 56,323 ( 9,178 ) 47,145 35,832 4,455 40,287 Interest expense, net 5,463 — 5,463 10,664 — 10,664 Income from continuing operations before income taxes 50,860 ( 9,178 ) 41,682 25,168 4,455 29,623 Income tax expense (benefit) 1,125 ( 2,605 ) ( 1,480 ) 314 218 532 Income from continuing operations 49,735 ( 6,573 ) 43,162 24,854 4,237 29,091 Loss from discontinued operations — — — ( 674 ) — ( 674 ) Net income $ 49,735 $ ( 6,573 ) $ 43,162 $ 24,180 $ 4,237 $ 28,417 Income per share of Common Stock Basic and Diluted Continuing operations $ 1.87 $ ( 0.24 ) $ 1.63 $ 9.36 $ 1.60 $ 10.96 Discontinued operations — — — ( 0.25 ) — ( 0.25 ) Total Basic Earnings per share $ 1.87 $ ( 0.24 ) $ 1.63 $ 9.11 $ 1.60 $ 10.71 Weighted average common shares outstanding - Basic 26,527,174 — 26,527,174 2,655,006 — 2,655,006 Continuing operations $ 1.87 $ ( 0.24 ) $ 1.63 $ 9.36 $ 1.59 $ 10.95 Discontinued operations — — — ( 0.25 ) — ( 0.25 ) Total Diluted Earnings per share $ 1.87 $ ( 0.24 ) $ 1.63 $ 9.11 $ 1.59 $ 10.70 Weighted average common shares outstanding - Diluted 26,541,804 — 26,541,804 2,655,799 — 2,655,799 109 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share data) 13 Weeks Ended January 25, 2025 13 Weeks Ended January 27, 2024 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Sales: Product sales and other $ 423,163 $ ( 3,500 ) $ 419,663 $ 415,375 $ — $ 415,375 Rental income 43,162 — 43,162 41,298 — 41,298 Total sales 466,325 ( 3,500 ) 462,825 456,673 — 456,673 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 344,616 ( 1,057 ) 343,559 332,728 ( 615 ) 332,113 Rental cost of sales 25,330 186 25,516 23,909 50 23,959 Total cost of sales 369,946 ( 871 ) 369,075 356,637 ( 565 ) 356,072 Gross profit 96,379 ( 2,629 ) 93,750 100,036 565 100,601 Selling and administrative expenses 71,561 — 71,561 79,756 — 79,756 Depreciation and amortization expense 7,814 13 7,827 10,148 — 10,148 Impairment loss 1,713 — 1,713 5,798 — 5,798 Other (income) expense ( 7,568 ) 1,300 ( 6,268 ) 3,413 — 3,413 Operating income 22,859 ( 3,942 ) 18,917 921 565 1,486 Interest expense, net 5,083 — 5,083 10,620 — 10,620 Income (loss) from continuing operations before income taxes 17,776 ( 3,942 ) 13,834 ( 9,699 ) 565 ( 9,134 ) Income tax expense (benefit) 10,664 ( 14,772 ) ( 4,108 ) 229 258 487 Income (loss) from continuing operations 7,112 10,830 17,942 ( 9,928 ) 307 ( 9,621 ) Income from discontinued operations — — — 289 — 289 Net income (loss) $ 7,112 $ 10,830 $ 17,942 $ ( 9,639 ) $ 307 $ ( 9,332 ) Income (loss) per share of Common Stock Basic and Diluted Continuing operations $ 0.23 $ 0.36 $ 0.59 $ ( 3.71 ) $ 0.11 $ ( 3.60 ) Discontinued operations — — — 0.11 — 0.11 Total Basic Earnings per share $ 0.23 $ 0.36 $ 0.59 $ ( 3.60 ) $ 0.11 $ ( 3.49 ) Weighted average common shares outstanding - Basic 30,507,723 — 30,507,723 2,673,240 — 2,673,240 Continuing operations $ 0.23 $ 0.36 $ 0.59 $ ( 3.71 ) $ 0.11 $ ( 3.60 ) Discontinued operations — — — 0.11 — 0.11 Total Diluted Earnings per share $ 0.23 $ 0.36 $ 0.59 $ ( 3.60 ) $ 0.11 $ ( 3.49 ) Weighted average common shares outstanding - Diluted 30,642,958 — 30,642,958 2,673,240 — 2,673,240 110 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share data) 26 Weeks Ended October 26, 2024 26 Weeks Ended October 28, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Sales: Product sales and other $ 810,600 $ — $ 810,600 $ 822,348 $ — $ 822,348 Rental income 54,953 — 54,953 52,192 — 52,192 Total sales 865,553 — 865,553 874,540 — 874,540 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 651,517 10,894 662,411 658,967 ( 1,614 ) 657,353 Rental cost of sales 29,187 482 29,669 28,697 ( 412 ) 28,285 Total cost of sales 680,704 11,376 692,080 687,664 ( 2,026 ) 685,638 Gross profit 184,849 ( 11,376 ) 173,473 186,876 2,026 188,902 Selling and administrative expenses 139,963 — 139,963 163,437 — 163,437 Depreciation and amortization expense 21,587 26 21,613 20,428 — 20,428 Loss on extinguishment of debt 55,233 ( 55,233 ) — — — — Other expense 3,468 — 3,468 8,907 — 8,907 Operating income (loss) ( 35,402 ) 43,831 8,429 ( 5,896 ) 2,026 ( 3,870 ) Loss on extinguishment of debt (a) — 55,233 55,233 — — — Interest expense, net 13,081 — 13,081 18,918 — 18,918 Loss from continuing operations before income taxes ( 48,483 ) ( 11,402 ) ( 59,885 ) ( 24,814 ) 2,026 ( 22,788 ) Income tax expense 1,261 ( 383 ) 878 303 318 621 Loss from continuing operations ( 49,744 ) ( 11,019 ) ( 60,763 ) ( 25,117 ) 1,708 ( 23,409 ) Loss from discontinued operations — — — ( 1,091 ) — ( 1,091 ) Net loss $ ( 49,744 ) $ ( 11,019 ) $ ( 60,763 ) $ ( 26,208 ) $ 1,708 $ ( 24,500 ) Loss per share of Common Stock Basic and Diluted Continuing operations $ ( 2.48 ) $ ( 0.56 ) $ ( 3.04 ) $ ( 9.47 ) $ 0.64 $ ( 8.83 ) Discontinued operations — — — ( 0.41 ) — ( 0.41 ) Total Basic and Diluted Net Loss per share $ ( 2.48 ) $ ( 0.56 ) $ ( 3.04 ) $ ( 9.88 ) $ 0.64 $ ( 9.24 ) Weighted average shares of common stock outstanding - Basic and Diluted 20,018,920 — 20,018,920 2,651,271 — 2,651,271 (a) Reclassified the loss on debt extinguishment to non-operating income (loss). 111 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except share data) 39 Weeks Ended January 25, 2025 39 Weeks Ended January 27, 2024 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Sales: Product sales and other $ 1,233,763 $ ( 3,500 ) $ 1,230,263 $ 1,237,723 $ — $ 1,237,723 Rental income 98,115 — 98,115 93,490 — 93,490 Total sales 1,331,878 ( 3,500 ) 1,328,378 1,331,213 — 1,331,213 Cost of sales (exclusive of depreciation and amortization expense): Product and other cost of sales 996,133 9,837 1,005,970 991,695 ( 2,229 ) 989,466 Rental cost of sales 54,517 668 55,185 52,606 ( 362 ) 52,244 Total cost of sales 1,050,650 10,505 1,061,155 1,044,301 ( 2,591 ) 1,041,710 Gross profit 281,228 ( 14,005 ) 267,223 286,912 2,591 289,503 Selling and administrative expenses 211,524 — 211,524 243,193 — 243,193 Depreciation and amortization expense 29,401 39 29,440 30,576 — 30,576 Impairment loss 1,713 — 1,713 5,798 — 5,798 Loss on extinguishment of debt 55,233 ( 55,233 ) — — — — Other (income) expense ( 4,100 ) 1,300 ( 2,800 ) 12,320 — 12,320 Operating (loss) income ( 12,543 ) 39,889 27,346 ( 4,975 ) 2,591 ( 2,384 ) Loss on extinguishment of debt (a) — 55,233 55,233 — — — Interest expense, net 18,164 — 18,164 29,538 — 29,538 Loss from continuing operations before income taxes ( 30,707 ) ( 15,344 ) ( 46,051 ) ( 34,513 ) 2,591 ( 31,922 ) Income tax expense (benefit) 11,925 ( 15,155 ) ( 3,230 ) 532 576 1,108 Loss from continuing operations ( 42,632 ) ( 189 ) ( 42,821 ) ( 35,045 ) 2,015 ( 33,030 ) Loss from discontinued operations — — — ( 802 ) — ( 802 ) Net loss $ ( 42,632 ) $ ( 189 ) $ ( 42,821 ) $ ( 35,847 ) $ 2,015 $ ( 33,832 ) Loss per share of Common Stock Basic and Diluted Continuing operations $ ( 1.81 ) $ ( 0.01 ) $ ( 1.82 ) $ ( 13.18 ) $ 0.76 $ ( 12.42 ) Discontinued operations — — — ( 0.30 ) — ( 0.30 ) Total Basic and Diluted Net Loss per share $ ( 1.81 ) $ ( 0.01 ) $ ( 1.82 ) $ ( 13.48 ) $ 0.76 $ ( 12.72 ) Weighted average shares of common stock outstanding - Basic and Diluted 23,515,188 — 23,515,188 2,658,594 — 2,658,594 (a) Reclassified the loss on debt extinguishment to non-operating income (loss) 112 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) July 27, 2024 July 29, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated ASSETS Current assets: Cash and cash equivalents $ 8,212 $ — $ 8,212 $ 7,657 $ — $ 7,657 Accounts receivable 154,405 ( 2,424 ) 151,981 140,858 — 140,858 Merchandise inventories, net 395,272 — 395,272 384,185 — 384,185 Textbook rental inventories 10,320 ( 4,677 ) 5,643 6,860 ( 2,738 ) 4,122 Prepaid expenses and other current assets 33,152 ( 2,222 ) 30,930 59,012 — 59,012 Total current assets 601,361 ( 9,323 ) 592,038 598,572 ( 2,738 ) 595,834 Property and equipment, net 48,264 224 48,488 64,438 — 64,438 Operating lease right-of-use assets 241,852 ( 22,949 ) 218,903 283,096 ( 30,428 ) 252,668 Intangible assets, net 87,828 — 87,828 107,413 — 107,413 Other noncurrent assets 25,930 — 25,930 17,298 — 17,298 Total assets $ 1,005,235 $ ( 32,048 ) $ 973,187 $ 1,070,817 $ ( 33,166 ) $ 1,037,651 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 266,304 $ — $ 266,304 $ 275,380 $ — $ 275,380 Accrued liabilities 75,713 18,441 94,154 89,792 16,649 106,441 Current operating lease liabilities 147,839 ( 62,510 ) 85,329 150,917 ( 65,341 ) 85,576 Total current liabilities 489,856 ( 44,069 ) 445,787 516,089 ( 48,692 ) 467,397 Long-term deferred taxes, net 1,306 675 1,981 1,836 100 1,936 Long-term operating lease liabilities 132,200 5,971 138,171 171,154 ( 4,404 ) 166,750 Other long-term liabilities 15,553 — 15,553 23,016 — 23,016 Long-term borrowings 221,916 — 221,916 277,663 — 277,663 Total liabilities 860,831 ( 37,423 ) 823,408 989,758 ( 52,996 ) 936,762 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.01 par value — — — — — — Common stock, $ 0.01 par value 263 — 263 6 — 6 Additional paid-in capital 922,743 — 922,743 747,271 — 747,271 Accumulated deficit ( 756,046 ) 5,375 ( 750,671 ) ( 643,744 ) 19,830 ( 623,914 ) Treasury stock, at cost ( 22,556 ) — ( 22,556 ) ( 22,474 ) — ( 22,474 ) Total stockholders' equity 144,404 5,375 149,779 81,059 19,830 100,889 Total liabilities and stockholders' equity $ 1,005,235 $ ( 32,048 ) $ 973,187 $ 1,070,817 $ ( 33,166 ) $ 1,037,651 113 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) October 26, 2024 October 28, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated ASSETS Current assets: Cash and cash equivalents $ 11,619 $ — $ 11,619 $ 15,008 $ — $ 15,008 Accounts receivable 275,847 ( 16,079 ) 259,768 221,805 — 221,805 Merchandise inventories, net 315,469 — 315,469 364,292 — 364,292 Textbook rental inventories 49,672 ( 4,677 ) 44,995 51,840 ( 2,738 ) 49,102 Prepaid expenses and other current assets 33,425 ( 59 ) 33,366 63,410 — 63,410 Total current assets 686,032 ( 20,815 ) 665,217 716,355 ( 2,738 ) 713,617 Property and equipment, net 44,926 211 45,137 61,403 — 61,403 Operating lease right-of-use assets 210,271 ( 3,537 ) 206,734 246,531 ( 3,298 ) 243,233 Intangible assets, net 85,137 — 85,137 104,026 — 104,026 Other noncurrent assets 25,684 — 25,684 16,664 — 16,664 Total assets $ 1,052,050 $ ( 24,141 ) $ 1,027,909 $ 1,144,979 $ ( 6,036 ) $ 1,138,943 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 298,952 $ — $ 298,952 $ 385,895 $ — $ 385,895 Accrued liabilities 99,670 23,365 123,035 112,075 19,940 132,015 Current operating lease liabilities 124,939 ( 47,471 ) 77,468 126,426 ( 46,581 ) 79,845 Total current liabilities 523,561 ( 24,106 ) 499,455 624,396 ( 26,641 ) 597,755 Long-term deferred taxes, net 2,050 48 2,098 1,936 318 2,254 Long-term operating lease liabilities 129,748 1,115 130,863 160,185 ( 3,780 ) 156,405 Other long-term liabilities 14,334 ( 7,828 ) 6,506 18,625 — 18,625 Long-term borrowings 177,551 — 177,551 233,873 — 233,873 Total liabilities 847,244 ( 30,771 ) 816,473 1,039,015 ( 30,103 ) 1,008,912 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.01 par value — — — — — — Common stock, $ 0.01 par value 274 — 274 6 — 6 Additional paid-in capital 933,399 — 933,399 748,070 — 748,070 Other Comprehensive Income — 7,828 7,828 — — — Accumulated deficit ( 706,311 ) ( 1,198 ) ( 707,509 ) ( 619,564 ) 24,067 ( 595,497 ) Treasury stock, at cost ( 22,556 ) — ( 22,556 ) ( 22,548 ) — ( 22,548 ) Total stockholders' equity 204,806 6,630 211,436 105,964 24,067 130,031 Total liabilities and stockholders' equity $ 1,052,050 $ ( 24,141 ) $ 1,027,909 $ 1,144,979 $ ( 6,036 ) $ 1,138,943 114 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) January 25, 2025 January 27, 2024 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated ASSETS Current assets: Cash and cash equivalents $ 9,185 $ — $ 9,185 $ 8,123 $ — $ 8,123 Accounts receivable 354,241 ( 10,722 ) 343,519 315,126 211 315,337 Merchandise inventories, net 326,825 — 326,825 341,544 — 341,544 Textbook rental inventories 41,033 ( 4,677 ) 36,356 44,521 ( 2,738 ) 41,783 Prepaid expenses and other current assets 26,729 6,767 33,496 54,337 — 54,337 Total current assets 758,013 ( 8,632 ) 749,381 763,651 ( 2,527 ) 761,124 Property and equipment, net 41,956 197 42,153 57,273 — 57,273 Operating lease right-of-use assets 180,710 15,096 195,806 220,238 12,824 233,062 Intangible assets, net 81,630 — 81,630 97,947 — 97,947 Deferred tax assets, net 1,055 ( 1,055 ) — — — — Other noncurrent assets 24,217 — 24,217 12,488 — 12,488 Total assets $ 1,087,581 $ 5,606 $ 1,093,187 $ 1,151,597 $ 10,297 $ 1,161,894 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 303,577 $ — $ 303,577 $ 343,100 $ — $ 343,100 Accrued liabilities 130,069 17,921 147,990 156,874 32,309 189,183 Current operating lease liabilities 101,062 ( 28,461 ) 72,601 125,545 ( 43,342 ) 82,203 Short-term borrowings — — — 224,067 — 224,067 Total current liabilities 534,708 ( 10,540 ) 524,168 849,586 ( 11,033 ) 838,553 Long-term deferred taxes, net — 4,924 4,924 2,010 576 2,586 Long-term operating lease liabilities 121,835 1,590 123,425 155,226 ( 3,620 ) 151,606 Other long-term liabilities 6,521 — 6,521 17,451 — 17,451 Long-term borrowings 141,200 — 141,200 30,191 — 30,191 Total liabilities 804,264 ( 4,026 ) 800,238 1,054,464 ( 14,077 ) 1,040,387 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.01 par value — — — — — — Common stock, $ 0.01 par value 341 — 341 6 — 6 Additional paid-in capital 1,004,731 — 1,004,731 748,882 — 748,882 Accumulated deficit ( 699,199 ) 9,632 ( 689,567 ) ( 629,203 ) 24,374 ( 604,829 ) Treasury stock, at cost ( 22,556 ) — ( 22,556 ) ( 22,552 ) — ( 22,552 ) Total stockholders' equity 283,317 9,632 292,949 97,133 24,374 121,507 Total liabilities and stockholders' equity $ 1,087,581 $ 5,606 $ 1,093,187 $ 1,151,597 $ 10,297 $ 1,161,894 115 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) 13 Weeks Ended July 27, 2024 13 Weeks Ended July 29, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Cash flows from operating activities: Net loss $ ( 99,479 ) $ ( 4,446 ) $ ( 103,925 ) $ ( 50,388 ) $ ( 2,529 ) $ ( 52,917 ) Less: Loss from discontinued operations, net of tax — — — ( 417 ) — ( 417 ) Loss from continuing operations, net of tax ( 99,479 ) ( 4,446 ) ( 103,925 ) ( 49,971 ) ( 2,529 ) ( 52,500 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: Depreciation and amortization expense 13,057 14 13,071 10,253 — 10,253 Amortization of deferred financing costs 2,417 — 2,417 1,244 — 1,244 Loss on debt extinguishment 55,233 — 55,233 — — — Deferred taxes 17 — 17 ( 3 ) 100 97 Stock-based compensation expense ( 863 ) — ( 863 ) 957 — 957 Changes in operating lease right-of-use assets and liabilities ( 3,691 ) 8,036 4,345 721 963 1,684 Changes in other long-term assets and liabilities and other, net 2,446 ( 1,290 ) 1,156 4,056 — 4,056 Changes in other operating assets and liabilities, net: Receivables, net ( 50,295 ) ( 2,848 ) ( 53,143 ) ( 48,346 ) — ( 48,346 ) Merchandise inventories ( 51,235 ) — ( 51,235 ) ( 61,206 ) — ( 61,206 ) Textbook rental inventories 22,672 — 22,672 23,489 — 23,489 Prepaid expenses and other current assets 315 2,222 2,537 ( 12,168 ) — ( 12,168 ) Accounts payable and accrued liabilities ( 34,586 ) ( 1,198 ) ( 35,784 ) 11,116 1,466 12,582 Changes in other operating assets and liabilities, net ( 113,129 ) ( 1,824 ) ( 114,953 ) ( 87,115 ) 1,466 ( 85,649 ) Net cash flows used in operating activities from continuing operations ( 143,992 ) 490 ( 143,502 ) ( 119,858 ) — ( 119,858 ) Net cash flows used in operating activities from discontinued operations — — $ — ( 3,266 ) — $ ( 3,266 ) Net cash flow used in operating activities ( 143,992 ) 490 ( 143,502 ) ( 123,124 ) — ( 123,124 ) Cash flows from investing activities: Purchases of property and equipment ( 3,470 ) ( 490 ) ( 3,960 ) ( 4,219 ) — ( 4,219 ) Net change in other noncurrent assets 223 — 223 78 — 78 Net cash flows used in investing activities from continuing operations ( 3,247 ) ( 490 ) ( 3,737 ) ( 4,141 ) — ( 4,141 ) Net cash flows provided by (used in) investing activities from discontinued operations — — — 21,395 — 21,395 Net cash flow used in investing activities ( 3,247 ) ( 490 ) ( 3,737 ) 17,254 — 17,254 Cash flows from financing activities: Proceeds from borrowings 217,647 — 217,647 145,187 — 145,187 Repayments of borrowings ( 160,696 ) — ( 160,696 ) ( 49,606 ) — ( 49,606 ) Proceeds from Private Equity Investment 50,000 — 50,000 — — — Proceeds from Rights Offering 45,000 — 45,000 — — — Payment of equity issuance costs ( 9,524 ) — ( 9,524 ) — — — Payment of deferred financing costs ( 3,669 ) — ( 3,669 ) ( 2,307 ) — ( 2,307 ) Purchase of treasury shares ( 4 ) — ( 4 ) ( 98 ) — ( 98 ) Proceeds from principal stockholder expense reimbursement 1,190 — 1,190 — — — Net cash flows provided by financing activities from continuing operations 139,944 — 139,944 93,176 — 93,176 116 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Net decrease in cash, cash equivalents and restricted cash ( 7,295 ) — ( 7,295 ) ( 12,694 ) — ( 12,694 ) Cash, cash equivalents and restricted cash at beginning of period 28,570 — 28,570 31,988 — 31,988 Cash, cash equivalents and restricted cash at end of period 21,275 — 21,275 19,294 — 19,294 Less: Cash, cash equivalents and restricted cash of discontinued operations at end of period — — — — — — Cash, cash equivalents, and restricted cash of continuing operations at end of period $ 21,275 $ — $ 21,275 $ 19,294 $ — $ 19,294 117 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) 26 Weeks Ended October 26, 2024 26 Weeks Ended October 28, 2023 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Cash flows from operating activities: Net loss $ ( 49,744 ) $ ( 11,019 ) $ ( 60,763 ) $ ( 26,208 ) $ 1,708 $ ( 24,500 ) Less: Loss from discontinued operations, net of tax — — — ( 1,091 ) — ( 1,091 ) Loss from continuing operations, net of tax ( 49,744 ) ( 11,019 ) ( 60,763 ) ( 25,117 ) 1,708 ( 23,409 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: Depreciation and amortization expense 21,587 26 21,613 20,428 — 20,428 Amortization of deferred financing costs 3,333 — 3,333 4,406 — 4,406 Loss on debt extinguishment 55,233 — 55,233 — — — Deferred taxes 762 ( 627 ) 135 97 318 415 Pension adjustments — 7,828 7,828 — — — Stock-based compensation expense 392 — 392 1,756 — 1,756 Interest expense (paid-in-kind) — — — 863 — 863 Changes in operating lease right-of-use assets and liabilities 2,538 ( 1,193 ) 1,345 1,826 ( 6,783 ) ( 4,957 ) Changes in other long-term assets and liabilities and other, net 1,287 ( 7,828 ) ( 6,541 ) ( 2,311 ) — ( 2,311 ) Changes in other operating assets and liabilities, net: — Receivables, net ( 171,737 ) 10,806 ( 160,931 ) ( 129,293 ) — ( 129,293 ) Merchandise inventories 28,568 — 28,568 ( 41,313 ) — ( 41,313 ) Textbook rental inventories ( 16,680 ) — ( 16,680 ) ( 21,491 ) — ( 21,491 ) Prepaid expenses and other current assets 4,282 59 4,341 2,756 — 2,756 Accounts payable and accrued liabilities 23,597 2,438 26,035 140,233 4,757 144,990 Changes in other operating assets and liabilities, net ( 131,970 ) 13,303 ( 118,667 ) ( 49,108 ) 4,757 ( 44,351 ) Net cash flows used in operating activities from continuing operations ( 96,582 ) 490 ( 96,092 ) ( 47,160 ) — ( 47,160 ) Net cash flows used in operating activities from discontinued operations — — — ( 3,939 ) — $ ( 3,939 ) Net cash flow used in operating activities ( 96,582 ) 490 ( 96,092 ) ( 51,099 ) — ( 51,099 ) Cash flows from investing activities: Purchases of property and equipment ( 6,528 ) ( 490 ) ( 7,018 ) ( 8,196 ) — ( 8,196 ) Net change in other noncurrent assets 792 — 792 78 — 78 Net cash flows used in investing activities from continuing operations ( 5,736 ) ( 490 ) ( 6,226 ) ( 8,118 ) — ( 8,118 ) Net cash flows provided by investing activities from discontinued operations — — — 21,395 — 21,395 Net cash flow (used in) provided by investing activities ( 5,736 ) ( 490 ) ( 6,226 ) 13,277 — 13,277 Cash flows from financing activities: Proceeds from borrowings 455,044 — 455,044 284,698 — 284,698 Repayments of borrowings ( 442,461 ) — ( 442,461 ) ( 233,970 ) — ( 233,970 ) Proceeds from Private Equity Investment 50,000 — 50,000 — — — Proceeds from Rights Offering 45,000 — 45,000 — — — Shares sold under at-the-market offering, net of commissions 9,590 — 9,590 — Payment of equity issuance costs ( 9,702 ) — ( 9,702 ) — — — Payment of deferred financing costs ( 5,569 ) — ( 5,569 ) ( 9,381 ) — ( 9,381 ) Purchase of treasury shares ( 4 ) — ( 4 ) ( 172 ) — ( 172 ) 118 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Proceeds from principal stockholder expense reimbursement 1,190 — 1,190 — — — Payment of finance lease principal ( 398 ) — ( 398 ) — Net cash flows provided by financing activities from continuing operations 102,690 — 102,690 41,175 — 41,175 Net decrease in cash, cash equivalents and restricted cash 372 — 372 3,353 — 3,353 Cash, cash equivalents and restricted cash at beginning of period 28,570 — 28,570 31,988 — 31,988 Cash, cash equivalents and restricted cash at end of period 28,942 — 28,942 35,341 — 35,341 Less: Cash, cash equivalents and restricted cash of discontinued operations at end of period — — — — — — Cash, cash equivalents, and restricted cash of continuing operations at end of period $ 28,942 $ — $ 28,942 $ 35,341 $ — $ 35,341 119 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) 39 Weeks Ended January 25, 2025 39 Weeks Ended January 27, 2024 As Previously As Previously Reported Adjustment As Restated Reported Adjustment As Restated Cash flows from operating activities: Net loss $ ( 42,632 ) $ ( 189 ) $ ( 42,821 ) $ ( 35,847 ) $ 2,015 $ ( 33,832 ) Less: Loss from discontinued operations, net of tax — — — ( 802 ) — ( 802 ) Loss from continuing operations, net of tax ( 42,632 ) ( 189 ) ( 42,821 ) ( 35,045 ) 2,015 ( 33,030 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: Depreciation and amortization expense 29,401 39 29,440 30,576 — 30,576 Amortization of deferred financing costs 4,248 — 4,248 8,380 — 8,380 Impairment loss (non cash) 1,713 — 1,713 5,798 — 5,798 Loss on debt extinguishment 55,233 — 55,233 — — — Deferred taxes ( 2,344 ) 5,304 2,960 171 576 747 Stock-based compensation expense 2,953 — 2,953 2,568 — 2,568 Interest expense (paid-in-kind) — — — 1,750 — 1,750 Changes in operating lease right-of-use assets and liabilities 19 ( 341 ) ( 322 ) 19,553 ( 19,506 ) 47 Changes in other long-term assets and liabilities and other, net ( 6,006 ) — ( 6,006 ) ( 2,961 ) — ( 2,961 ) Changes in other operating assets and liabilities, net: — Receivables, net ( 250,131 ) 5,450 ( 244,681 ) ( 222,614 ) ( 211 ) ( 222,825 ) Merchandise inventories 17,212 — 17,212 ( 18,565 ) — ( 18,565 ) Textbook rental inventories ( 8,041 ) — ( 8,041 ) ( 14,172 ) — ( 14,172 ) Prepaid expenses and other current assets 1,232 ( 6,767 ) ( 5,535 ) 2,436 — 2,436 Accounts payable and accrued liabilities 58,616 ( 3,006 ) 55,610 138,904 17,126 156,030 Changes in other operating assets and liabilities, net ( 181,112 ) ( 4,323 ) ( 185,435 ) ( 114,011 ) 16,915 ( 97,096 ) Net cash flows used in operating activities from continuing operations ( 138,527 ) 490 ( 138,037 ) ( 83,221 ) — ( 83,221 ) Net cash flows used in operating activities from discontinued operations — — — ( 3,650 ) — $ ( 3,650 ) Net cash flow used in operating activities ( 138,527 ) 490 ( 138,037 ) ( 86,871 ) — ( 86,871 ) Cash flows from investing activities: Purchases of property and equipment ( 9,300 ) ( 490 ) ( 9,790 ) ( 11,459 ) — ( 11,459 ) Net change in other noncurrent assets 792 — 792 78 — 78 Net cash flows used in investing activities from continuing operations ( 8,508 ) ( 490 ) ( 8,998 ) ( 11,381 ) — ( 11,381 ) Net cash flows provided by investing activities from discontinued operations — — — 21,395 — 21,395 Net cash flow (used in) provided by investing activities ( 8,508 ) ( 490 ) ( 8,998 ) 10,014 — 10,014 Cash flows from financing activities: Proceeds from borrowings 667,355 — 667,355 454,459 — 454,459 Repayments of borrowings ( 691,121 ) — ( 691,121 ) ( 384,545 ) — ( 384,545 ) Proceeds from Private Equity Investment 50,000 — 50,000 — — — Proceeds from Rights Offering 45,000 — 45,000 — — — Shares sold under at-the-market offering, net of commissions 78,450 — 78,450 — — — Payment of equity issuance costs ( 9,724 ) — ( 9,724 ) — — — Payment of deferred financing costs ( 5,569 ) — ( 5,569 ) ( 9,845 ) — ( 9,845 ) Purchase of treasury shares ( 4 ) — ( 4 ) ( 176 ) — ( 176 ) 120 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) Proceeds from principal stockholder expense reimbursement 1,190 — 1,190 — — — Payment of finance lease principal ( 385 ) — ( 385 ) — — — Net cash flows provided by financing activities from continuing operations 135,192 — 135,192 59,893 — 59,893 Net decrease in cash, cash equivalents and restricted cash ( 11,843 ) — ( 11,843 ) ( 16,964 ) — ( 16,964 ) Cash, cash equivalents and restricted cash at beginning of period 28,570 — 28,570 31,988 — 31,988 Cash, cash equivalents and restricted cash at end of period 16,727 — 16,727 15,024 — 15,024 Less: Cash, cash equivalents and restricted cash of discontinued operations at end of period — — — — — — Cash, cash equivalents, and restricted cash of continuing operations at end of period $ 16,727 $ — $ 16,727 $ 15,024 $ — $ 15,024 121 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended July 29, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 551 $ 745,932 $ ( 593,356 ) 25,359 $ ( 22,376 ) $ 130,751 Stock-based compensation expense 794 794 Vested equity awards 2,000 2 ( 2 ) — Shares repurchased for tax withholdings for vested stock awards 779 ( 98 ) ( 98 ) Net loss ( 50,388 ) ( 50,388 ) Balance July 29, 2023 553,402 $ 553 $ 746,724 $ ( 643,744 ) 26,138 $ ( 22,474 ) $ 81,059 As Restated for the 13 Weeks Ended July 29, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 6 $ 746,477 $ ( 570,997 ) 25,359 $ ( 22,376 ) $ 153,110 Stock-based compensation expense 794 794 Vested equity awards 2,000 — — — Shares repurchased for tax withholdings for vested stock awards 779 ( 98 ) ( 98 ) Net loss ( 52,917 ) ( 52,917 ) Balance July 29, 2023 553,402 $ 6 $ 747,271 $ ( 623,914 ) 26,138 $ ( 22,474 ) $ 100,889 122 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended July 27, 2024: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 27, 2024 558,402 558 749,140 ( 656,567 ) 26,838 ( 22,552 ) 70,579 Stock-based compensation expense ( 863 ) ( 863 ) Vested equity awards 2,923 — Shares repurchased for tax withholdings for vested stock awards 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,524 ) ( 9,524 ) Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal Stockholder expense reimbursement 1,940 1,940 Adjustment to Additional Paid-In Capital, reverse stock split ( 553 ) 553 — Net loss ( 99,479 ) ( 99,479 ) Balance July 27, 2024 26,235,303 262 922,744 ( 756,046 ) 27,267 ( 22,556 ) 144,404 As Restated for the 13 Weeks Ended July 27, 2024: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 27, 2024 558,402 $ 6 $ 749,692 $ ( 646,746 ) 26,838 $ ( 22,552 ) $ 80,400 Stock-based compensation expense ( 863 ) ( 863 ) Vested equity awards 2,923 — Shares repurchased for tax withholdings for vested stock awards — 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,524 ) ( 9,524 ) Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal Stockholder expense reimbursement 1,940 1,940 Adjustment to Additional Paid-In Capital, reverse stock split — Net loss ( 103,925 ) ( 103,925 ) Balance July 27, 2024 26,235,303 $ 263 $ 922,743 $ ( 750,671 ) 27,267 $ ( 22,556 ) $ 149,779 123 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended October 28, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance July 29, 2023 553,402 $ 553 $ 746,724 $ ( 643,744 ) 26,138 $ ( 22,474 ) $ 81,059 Stock-based compensation expense 799 799 Vested equity awards 5,000 5 ( 5 ) — Shares repurchased for tax withholdings for vested stock awards 700 ( 74 ) ( 74 ) Net income 24,180 24,180 Balance October 28, 2023 558,402 $ 558 $ 747,518 $ ( 619,564 ) 26,838 $ ( 22,548 ) $ 105,964 As Restated for the 13 Weeks Ended October 28, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance July 29, 2023 553,402 $ 6 $ 747,271 $ ( 623,914 ) 26,138 $ ( 22,474 ) $ 100,889 Stock-based compensation expense 799 799 Vested equity awards 5,000 — — — Shares repurchased for tax withholdings for vested stock awards 700 ( 74 ) ( 74 ) Net income 28,417 28,417 Balance October 28, 2023 558,402 $ 6 $ 748,070 $ ( 595,497 ) 26,838 $ ( 22,548 ) $ 130,031 124 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended October 26, 2024: Additional Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Amount Capital Deficit Shares Amount Income Equity Balance July 27, 2024 26,235,303 $ 262 $ 922,744 $ ( 756,046 ) 27,267 $ ( 22,556 ) $ — $ 144,404 Stock-based compensation expense 1,255 1,255 Vested equity awards 31,275 — Equity issuance costs ( 178 ) ( 178 ) Proceeds from sales of Common Stock under ATM facility, net of commissions 1,046,460 11 9,579 9,590 Net income 49,735 49,735 Balance October 26, 2024 27,313,038 $ 273 $ 933,400 $ ( 706,311 ) 27,267 $ ( 22,556 ) $ — $ 204,806 As Restated for the 13 Weeks Ended October 26, 2024: As Restated: Additional Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Amount Capital Deficit Shares Amount Income Equity Balance July 27, 2024 26,235,303 $ 263 $ 922,743 $ ( 750,671 ) 27,267 $ ( 22,556 ) $ — $ 149,779 Stock-based compensation expense 1,255 $ 1,255 Vested equity awards 31,275 $ — Equity issuance costs ( 178 ) $ ( 178 ) Pension adjustments 7,828 $ 7,828 Proceeds from sales of Common Stock under ATM facility, net of commissions 1,046,460 11 9,579 $ 9,590 Net income 43,162 $ 43,162 Balance October 26, 2024 27,313,038 $ 274 $ 933,399 $ ( 707,509 ) 27,267 $ ( 22,556 ) $ 7,828 $ 211,436 125 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended January 27, 2024: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance October 28, 2023 558,402 $ 558 $ 747,518 $ ( 619,564 ) 26,838 $ ( 22,548 ) $ 105,964 Stock-based compensation expense 812 812 Vested equity awards — Shares repurchased for tax withholdings for vested stock awards ( 4 ) ( 4 ) Net loss ( 9,639 ) ( 9,639 ) Balance January 27, 2024 558,402 $ 558 $ 748,330 $ ( 629,203 ) 26,838 $ ( 22,552 ) $ 97,133 As Restated for the 13 Weeks Ended January 27, 2024: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance October 28, 2023 558,402 $ 6 $ 748,070 $ ( 595,497 ) 26,838 $ ( 22,548 ) $ 130,031 Stock-based compensation expense 812 812 Vested equity awards — Shares repurchased for tax withholdings for vested stock awards ( 4 ) ( 4 ) Net loss ( 9,332 ) ( 9,332 ) Balance January 27, 2024 558,402 $ 6 $ 748,882 $ ( 604,829 ) 26,838 $ ( 22,552 ) $ 121,507 126 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 13 Weeks Ended January 25, 2025: Additional Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Amount Capital Deficit Shares Amount Income Equity Balance October 26, 2024 27,313,038 $ 273 $ 933,400 $ ( 706,311 ) 27,267 $ ( 22,556 ) $ — $ 204,806 Stock-based compensation expense 2,561 2,561 Vested equity awards — Equity issuance costs ( 22 ) ( 22 ) Proceeds from sales of Common Stock under ATM facility, net of commissions 6,768,076 68 68,792 68,860 Net income 7,112 7,112 Balance January 25, 2025 34,081,114 $ 341 $ 1,004,731 $ ( 699,199 ) 27,267 $ ( 22,556 ) $ — $ 283,317 As Restated for the 13 Weeks Ended January 25, 2025: Additional Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Amount Capital Deficit Shares Amount Income Equity Balance October 26, 2024 27,313,038 $ 274 $ 933,399 $ ( 707,509 ) 27,267 $ ( 22,556 ) $ 7,828 $ 211,436 Stock-based compensation expense 2,561 2,561 Vested equity awards — Equity issuance costs ( 22 ) ( 22 ) Pension adjustments ( 7,828 ) ( 7,828 ) Proceeds from sales of Common Stock under ATM facility, net of commissions 6,768,076 67 68,793 68,860 Net income 17,942 17,942 Balance January 25, 2025 34,081,114 $ 341 $ 1,004,731 $ ( 689,567 ) 27,267 $ ( 22,556 ) $ — $ 292,949 127 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 26 Weeks Ended October 28, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 551 $ 745,932 $ ( 593,356 ) 25,359 $ ( 22,376 ) $ 130,751 Stock-based compensation expense 1,593 1,593 Vested equity awards 7,000 7 ( 7 ) — Shares repurchased for tax withholdings for vested stock awards 1,479 ( 172 ) ( 172 ) Net loss ( 26,208 ) ( 26,208 ) Balance October 28, 2023 558,402 $ 558 $ 747,518 $ ( 619,564 ) 26,838 $ ( 22,548 ) $ 105,964 As Restated for the 26 Weeks Ended October 28, 2023: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 6 $ 746,477 $ ( 570,997 ) 25,359 $ ( 22,376 ) $ 153,110 Stock-based compensation expense 1,593 1,593 Vested equity awards 7,000 — — — Shares repurchased for tax withholdings for vested stock awards 1,479 ( 172 ) ( 172 ) Net loss ( 24,500 ) ( 24,500 ) Balance October 28, 2023 558,402 $ 6 $ 748,070 $ ( 595,497 ) 26,838 $ ( 22,548 ) $ 130,031 128 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 26 Weeks Ended October 26, 2024: As Previously Reported: Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Capital Deficit Shares Amount Income Equity Balance at April 27, 2024 558,402 $ 558 $ 749,140 $ ( 656,567 ) 26,838 $ ( 22,552 ) $ — $ 70,579 Stock-based compensation expense 392 392 Vested equity awards 34,198 — Shares repurchased for tax withholdings for vested stock awards 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,702 ) ( 9,702 ) Proceeds from sales of Common Stock under ATM facility, net of commissions 1,046,460 11 9,579 9,590 Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal stockholder expense reimbursement 1,940 1,940 Adjustment to Additional Paid-In Capital, reverse stock split ( 553 ) 553 — Net loss ( 49,744 ) ( 49,744 ) Balance October 26, 2024 27,313,038 $ 273 $ 933,400 $ ( 706,311 ) 27,267 $ ( 22,556 ) $ — $ 204,806 As Restated for the 26 Weeks Ended October 26, 2024: Additional Other Common Stock Paid-In Accumulated Treasury Stock Comprehensive Total Shares Capital Deficit Shares Amount Income Equity Balance at April 27, 2024 558,402 $ 6 $ 749,692 $ ( 646,746 ) 26,838 $ ( 22,552 ) $ — $ 80,400 Stock-based compensation expense 392 392 Vested equity awards 34,198 — Shares repurchased for tax withholdings for vested stock awards 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,702 ) ( 9,702 ) Pension adjustments 7,828 7,828 Proceeds from sales of Common Stock under ATM facility, net of commissions 1,046,460 11 9,579 9,590 Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal stockholder expense reimbursement 1,940 1,940 Adjustment to Additional Paid-In Capital, reverse stock split — Net loss ( 60,763 ) ( 60,763 ) Balance October 26, 2024 27,313,038 $ 274 $ 933,399 $ ( 707,509 ) 27,267 $ ( 22,556 ) $ 7,828 $ 211,436 129 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 39 Weeks Ended January 27, 2024: As Previously Reported: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 551 $ 745,932 $ ( 593,356 ) 25,359 $ ( 22,376 ) $ 130,751 Stock-based compensation expense 2,405 2,405 Vested equity awards 7,000 7 ( 7 ) — Shares repurchased for tax withholdings for vested stock awards 1479 ( 176 ) ( 176 ) Net loss ( 35,847 ) ( 35,847 ) Balance January 27, 2024 558,402 $ 558 $ 748,330 $ ( 629,203 ) 26,838 $ ( 22,552 ) $ 97,133 As Restated for the 39 Weeks Ended January 27, 2024: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 29, 2023 551,402 $ 6 $ 746,477 $ ( 570,997 ) 25,359 $ ( 22,376 ) $ 153,110 Stock-based compensation expense 2,405 2,405 Vested equity awards 7,000 — — — Shares repurchased for tax withholdings for vested stock awards 1479 ( 176 ) ( 176 ) Net loss ( 33,832 ) ( 33,832 ) Balance January 27, 2024 558,402 6 748,882 ( 604,829 ) 26,838 ( 22,552 ) 121,507 130 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (In thousands, except share data) As Previously Reported for the 39 Weeks Ended January 25, 2025: As Previously Reported: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 27, 2024 558,402 $ 558 $ 749,140 $ ( 656,567 ) 26,838 $ ( 22,552 ) $ 70,579 Stock-based compensation expense 2,953 2,953 Vested equity awards 34,198 — Shares repurchased for tax withholdings for vested stock awards 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,724 ) ( 9,724 ) Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal stockholder expense reimbursement 1,940 1,940 Proceeds from sales of Common Stock under ATM facility, net of commissions 7,814,536 79 78,371 78,450 Other ( 553 ) 553 — Net loss ( 42,632 ) ( 42,632 ) Balance January 25, 2025 34,081,114 $ 341 $ 1,004,731 $ ( 699,199 ) 27,267 $ ( 22,556 ) $ 283,317 As Restated for the 39 Weeks Ended January 25, 2025: Additional Common Stock Paid-In Accumulated Treasury Stock Total Shares Amount Capital Deficit Shares Amount Equity Balance at April 27, 2024 558,402 $ 6 $ 749,692 $ ( 646,746 ) 26,838 $ ( 22,552 ) $ 80,400 Stock-based compensation expense 2,953 2,953 Vested equity awards 34,198 — Shares repurchased for tax withholdings for vested stock awards 0 429 ( 4 ) ( 4 ) Private Equity Investment 10,000,000 100 49,900 50,000 Rights Offering 9,000,000 90 44,910 45,000 Equity issuance costs ( 9,724 ) ( 9,724 ) Term Loan debt conversion 6,673,978 67 86,688 86,755 Principal stockholder expense reimbursement 1,940 1,940 Proceeds from sales of Common Stock under ATM facility, net of commissions 7,814,536 78 78,372 78,450 Other — Net loss ( 42,821 ) ( 42,821 ) Balance January 25, 2025 34,081,114 $ 341 $ 1,004,731 $ ( 689,567 ) 27,267 $ ( 22,556 ) $ 292,949 131 Index to Form 10-K Index to FS BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - Continued (In thousands, except share and per share data) 132 Index to Form 10-K Index to FS Schedule II—Valuation and Qualifying Accounts Receivables Valuation and Qualifying Accounts (In thousands) Balance at beginning of period Charge (recovery) to costs and expenses Write-offs Balance at end of period Allowance for Doubtful Accounts May 3, 2025 $ 867 $ 1,775 $ ( 494 ) $ 2,148 April 27, 2024 $ 1,156 $ 1,595 $ ( 1,884 ) $ 867 Balance at beginning of period Addition Charged to Costs Deductions Balance at end of period Sales Returns Reserves May 3, 2025 $ 2,181 $ 165,055 $ ( 165,406 ) $ 1,830 April 27, 2024 $ 2,426 $ 142,660 $ ( 142,905 ) $ 2,181 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. 133 Index to Form 10-K Index to FS Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no disagreements with accountants on accounting and financial disclosure.