Barnes & Noble Education, Inc.

Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of August 2, 2025, we had $22.4 million of cash on hand, including $15.0 million of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.

On June 10, 2024, we completed the Transactions, including a Private Investment, a Rights Offering, a Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. These transactions also raised additional capital for repayment of indebtedness and provide additional flexibility for future working capital needs. For additional information, see Financing Arrangements below. Additionally, on September 19 2024 and December 20, 2024, respectively, we entered into an at-the market ("ATM") sales agreement with BTIG, LLC ("BTIG") under which we sold our Common Stock from time to time through BTIG as the sales agent (See Note 6. Equity).

We believe that our future cash from operations, access to borrowings under the Credit Facility Refinancing, and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the next twelve months and beyond. To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity. Our access to, and the availability of, financing in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that we will have access to capital markets on acceptable terms.

Liquidity

Sources and Uses of Cash Flows

As of August 2, 2025 and July 27, 2024, we had restricted cash of $15.0 million and $13.1 million, respectively, comprised of $12.7 million and $10.7 million, respectively, in prepaid and other current assets in the condensed Consolidated Balance Sheets related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $2.4 million and $2.4 million, respectively, in other noncurrent assets in the condensed Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Cash Flow from Operating Activities

Our business is highly seasonal. Cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester. Given the growth of our 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. As a higher percentage of our sales shift to BNC First Day® affordable access course material program offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and cash inflows from collections from schools. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Cash flows used in operating activities during the 13 weeks ended August 2, 2025 were $(67.6) million compared to $(143.5) million during the 13 weeks ended July 27, 2024. The decrease in cash flows used in operating activities of $75.9 million was primarily due the timing of payables to vendors for inventory purchases and expenses, offset by increase in Textbook inventory in preparation for Fall rush.

Cash Flow from Investing Activities

Cash flows used in investing activities remained flat at $(3.7) million during the 13 weeks ended August 2, 2025 and July 27, 2024, respectively.

Cash Flow from Financing Activities

Cash flows provided by financing activities during the 13 weeks ended August 2, 2025 were $65.0 million compared to $139.9 million during the 13 weeks ended July 27, 2024. The decrease of $(74.9) million is primarily reflected by higher equity financing proceeds received in 2025 of $95.0 million of new equity capital through a $50.0 million new equity investment led by Immersion Corporation, and a $45.0 million fully backstopped Rights Offering, partially offset by 2025 payments for equity issuance costs of $9.7 million and higher net borrowings for the 13 weeks ended August 2, 2025 of $9.9 million.

Capital Resources

Financing Arrangements

On June 10, 2024 (the “Closing Date”), the Company completed a series of financing and recapitalization Transactions that significantly deleveraged its consolidated balance sheet and enhanced liquidity. The Transactions included equity issuances, the conversion of the Company’s term loan indebtedness into equity, and the refinancing of the Company’s asset-based revolving credit facility.

As of August 2, 2025, the Company’s revolving credit facility had a maximum borrowing capacity of $325 million with no borrowing base or collateral limitations, subject to compliance with applicable covenants with $170 million outstanding.

In connection with the Transactions, the Company raised $95.0 million of gross equity proceeds through a private investment and a fully backstopped rights offering, resulting in net cash proceeds of approximately $85.5 million after transaction costs. Upon closing, Immersion Corporation obtained a controlling interest in the Company.

Also on the Closing Date, the Company’s existing term loan indebtedness was converted into shares of the Company’s Common Stock and extinguished. The Company refinanced its asset-based revolving credit facility, which provides aggregate revolving commitments of up to $325.0 million and matures in 2028. Refer to Note 6. Equity and Note 10. Debt for additional information.

Subsequent to the Closing Date, the Company entered into at-the-market equity sales agreements pursuant to which it sold an aggregate of $80.0 million of Common Stock. The Company maintains an effective shelf registration statement for potential future issuances, however, the shelf registration statement will be available for use again after the date of this filing. It is not considered a source of liquidity as of the date of this filing.

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.

All share and per-share amounts presented in the accompanying condensed consolidated financial statements and related disclosures have been retroactively adjusted to reflect the Reverse Stock Split.

Share Repurchases

During the 13 weeks ended August 2, 2025, we did not repurchase any of our Common Stock under the stock repurchase program. As of August 2, 2025, approximately $26.7 million remains available under the stock repurchase program.

During the 13 ended August 2, 2025, we repurchased 0 and 429 of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Critical Accounting Estimates

Our policies regarding the use of estimates and other critical accounting policies are consistent with the disclosures in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimatesin our Annual Report on Form 10-K for the fiscal year ended May 3, 2025.