##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
 ANNUAL REPORT PURSUANT TO
    SECTIONS 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)   OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission
    file: 0-25674
 SkillSoft Public Limited
    Company
 (Exact name of registrant as
    specified in its charter)
  Republic of Ireland

None(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)107 Northeastern Boulevard

03062Nashua, New Hampshire

(Zip Code)(Address of principal executive
    offices)   Registrants telephone number, including area code:
 (603) 324-3000
 Securities registered pursuant to section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredOrdinary Shares, 0.11


NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act: None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    Company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




---



##### 





SKILLSOFT
    PUBLIC LIMITED COMPANY
  FORM 10-K
  TABLE OF CONTENTS
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


22Item 1B.


Unresolved Staff Comments


30Item 2.


Properties


30Item 3.


Legal Proceedings


30Item 4.


Submission of Matters to a Vote of Security
    Holders


31PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


31Item 6.


Selected Financial Data


32Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


32Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


50Item 8.


Financial Statements and Supplementary Data


51Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


51Item 9A.


Control and Procedures


51Item 9B.


Other Information


54PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


54Item 11.


Executive Compensation


54Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


54Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


54Item 14.


Principal Accountant Fees and Services


54PART IVItem 15.


Exhibits and Financial Statement Schedules


54Signatures


55EX-23.1 Consent of Ernst & Young LLPEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO   1




---



##### Table of Contents



PART I
  Form 10-K ®
  Form 10-K,
  Item 1.
    Business  General
  e-learning e-learning tm ® ® Search-and-Learn ® ® tm
       2




---



##### Table of Contents



SkillChoice Multi-Modal Learning
    Solutions: ® tm
  SkillPort: e-learning Search-and-Learn ® e-learning e-learning
  KnowledgeCenters:
  SkillSoft Dialogue:
  Business Exploration Series:
  Business Impact Series:
  Challenge Series:
  Business Skills Courseware Collection:
 3




---



##### Table of Contents



IT Skills and Certification Courseware
    Collection:
  Desktop Skills Courseware Collection:
  Legal Compliance, Federal Government Compliance, and
    Environmental Safety and Health (ES&H) Courseware
    Collection:
  SkillSoft Academy:
  Online Mentoring: e-mail,
  Books24x7:
 4




---



##### Table of Contents



Executive Content: tm tm
  Leadership Development Channel: one-on-one
  Live Learning: three-hour
  (011) 353-1-2181000. (603) 324-3000.
  Form 10-K. Form 10-K, Form 10-Q Form 8-K,
  Industry
    Background
    
    The evolution of our economy to a service-based and
    knowledge-based economy, in which the skills of the workforce
    often represent the most important corporate assets;
    The increasing recognition by businesses that it is imperative
    to continually improve the skills of their employees to remain
    competitive;
    The rapidly evolving business environment, which necessitates
    continual training and education of employees;
    The increased competition in todays economy for skilled
    employees and the recognition that effective training can be
    used to recruit and retain employees; and 5




---



##### Table of Contents




    The retirement of baby boom generation workers during the coming
    10-to-15 years, which will result in industries seeking
    technically skilled and educated workers to meet the projected
    shortage of qualified and trained candidates to replace those
    retiring workers. This phenomenon is widely projected to create
    a major increase in demand for training in technical and
    business skills.  e-learning e-learning e-learning
  e-learning e-Learning e-learning e-learning e-learning
  Content
    Products
  e-learning e-learning e-learning
    Business
    Skills Courseware and Simulations
  e-learning
 6




---



##### Table of Contents



Professional Effectiveness

Business Strategy & OperationsManagement & Leadership

Sales & Customer-Facing SkillsProject Effectiveness

Finance, HR & Administration     IT
    Skills Courseware
  e-learning
  Software Development

OS & Server TechnologiesInternet & Network Technologies

Database SystemsWeb Design     Microsoft

ISC(2)

CiscoMCITP  Enterprise Support Technician

CISSP (ISC2)

CCENTMCITP  Database Administrator

SSCP (ISC2)

CCNAMCTS  .NET Framework 2.0



CCDAMCTS  SQL Server 2005



CCNPMCTS  SharePoint Server 2007

Linux Professional Institute

CCDPMCTS  Windows Vista Configuration

LPI: Level 1

CCSPMCDST

LPI: Level II

CCIPMCSA 2003



CCVPMCSE 2003MCSD .NET

Project Mgmt InstituteMCDBA

Project Management ProfessionalMCP

Certified Associate in Project Mgmt.MCSA 2000

Program Management ProfessionalMCSE 2000   Macromedia

CompTIA

SunDreamweaver 8 Developer

A+ 2006

Sun Certified ProgrammerDreamweaver MX 2004 Developer

Network+

for the Java 2 PlatformFlash MX 2004 Designer

I-Net+

Solaris 9ColdFusion MX Developer

Server+Linux+Security+   7




---



##### Table of Contents



CIW

Oracle

ITILCIW Associate

10g Administrator, OCA

Foundations V3CIW Professional

10g DBA OCP

Foundations V2CIW Security Analyst

Application Server 10g, OCAMaster CIW Administrator

9i DBA OCPMaster CIW Enterprise Developer

91 DBA OCAMaster CIW Site Designer     Desktop
    Skills Courseware Collection
  e-learning
    Compliance
    Solutions
  e-learning
        Leadership
    Development Channel
   8




---



##### Table of Contents



one-on-one
    Books24x7
               9




---



##### Table of Contents



E-Gov &
        ®
      Learning
    Design for Business Skills, Compliance and
    ES&H
   10




---



##### Table of Contents



11




---



##### Table of Contents



just-in-time and/or
  and/or
  e-learning
    and/or e-learning e-learning.
  nd
  Business
    Impact and Challenge Series
   12




---



##### Table of Contents



Learning
    Design for IT Skills
  step-by-step and/or
    pop-up pop-up
  pop-up
       13




---



##### Table of Contents



Narrated
    Animation
  and/or
    Practice
    and Guided Practice Strategies
        and/or
       14




---



##### Table of Contents



TestPrep
    Certification Practice Exams
    Our
    Instructional Design Model
        
    Learning outcomes specified by performance goals and objectives;
    Content and learning activities based on specified objectives;
    Assessment based on the knowledge and skills specified in the
    objectives;
    Options to take assessments in either pre- or post-test mode;
    Instructional strategies and multimedia elements tailored to the
    specific course content;
    Tools to promote the transfer of learning into the workplace,
    such as online Job Aids, Code Samples and Follow-On Activities;
    Instructional strategies appropriate for the content and
    learning level, such as examples, RolePlays, case studies,
    guided practice, and simulations; and
    Levels of learning appropriate for the content and the target
    audience.    
    A friendly, intuitive graphical user interface;
    A course structure and navigation that supports self-paced,
    user-controlled instruction;
    Unlimited access to instruction and assessments;
    Standardized templates to create unified and predictable
    functionality;
    A variety of presentation, practice, and assessment templates
    supporting high levels of user interactivity and
    engagement; and
    A standardized, yet flexible, flow of instruction.   15




---



##### Table of Contents



Learning
    Design for Workplace Performance
    Web-Based
    Architecture and Deployment Technology
    Learning Management Platforms: e-learning
  SkillPort
    Search-and-Learn®
    Technology: Search-and-Learn
  SkillPort Customer Content Support:
  SkillSoft Dialogue:
 16




---



##### Table of Contents



Assistive Technology Support: Section 508-compliant and/or
  High Performance Web Technology: e-learning
  Flexible Deployment Options:
  Open Learning Services Architecture: (Search-and-Learn);
  Product
    Pricing
       17




---



##### Table of Contents



Sales and
    Marketing
        90-day 120-day
        
    Customer advisory forums and user group events;
    Product and strategy updates with industry analysts;
    Public relations activities resulting in articles in trade press
    and speaking engagements;
    Print advertising in trade publications;
    Printed promotional materials and direct mail;
    Online marketing in the form of Web banners, content
    syndication, email sponsorships, newsletters and key-word buying
    on search engines; and
    Events, seminars and trade shows.   18




---



##### Table of Contents



Customer
    Service and Support
  e-learning
  Application engineering.
  Learning consulting. e-learning e-learning
  Customer support. e-mail
    Competition
    
    The expected growth of this market will attract new entrants.
    Our course content providers are often not prohibited from
    developing courses on similar topics for other companies,
    provided that they do not use our toolkit or templates.
    The tremendously fragmented nature of the competitive landscape,
    including many competitors in the
    e-learning
    segment of the market.    
    Providers of traditional classroom instruction, including
    American Management Association, AchieveGlobal, ESI, DDI, New
    Horizons and GlobalKnowledge. Many of the companies in this
    category are attempting to adapt their courses to
    e-learning
    formats suitable for access via Web browsers or offer
    e-Learning
    courses in conjunction with their instructor-led training and,
    in general, compete for the same training dollars in the
    customers budget.
    Technology companies such as IBM, Cisco, Oracle, Adobe and
    Microsoft that offer
    e-learning
    courses.
    Suppliers of online corporate education and training courses,
    including NIIT, Thirdforce, Cengage, Harvard Business School
    Publishing, SAI Global Ninth House and Corpedia. Our Books24x7
    business competes with companies such as Safari, a joint venture
    between Pearson Technology Group and OReilly &
    Associates, which offers aggregated IT and business content
    primarily consisting of its own titles on a subscription basis.
    Other companies that compete with one or more of Books24x7
    collections include Knovel, which offers an Engineering
    collection; and GetAbstract and BusinessBook Review, which offer
    condensed summaries of business books. NIIT offers a competitive
    online book collection that consists of a 19




---



##### Table of Contents



combination of their own products, Safari, GetAbstracts and
    books from book publishers that NIIT has established licenses
    with.  
    With our SkillSoft Dialogue product, we are competing with
    companies such as WebEx (now a part of Cisco), Saba, Interwise
    and Microsoft; and with rapid content development technology
    suppliers such as Adobe Captivate, Articulate Studio, and
    Microsoft PowerPoint.
    With our SkillPort LMS platform technology, we compete with
    other suppliers of LMS products such as SumTotal, Saba, Plateau,
    GeoLearning, Oracle, SAP and IBM.    
    The breadth, depth, currency and instructional design quality of
    the course content;
    Informal performance support and other features of the training
    solution;
    Adaptability, flexibility, reliability, scalability and
    performance of technology platforms offered;
    Standards compliance and ease-of-integration with third party
    systems and customer learning portals;
    The deployment options offered to customers, such as hosted,
    intranet and low bandwidth access;
    Customer service and support;
    Price/value relationship;
    Relationships with the customer; and
    Corporate reputation.    Product
    Development
     20




---



##### Table of Contents



e-learning
      e-learning e-learning
        Proprietary
    Rights
     21




---



##### Table of Contents



Search-and-Learn, and/or
  Employees
          Item 1A.
    Risk
    Factors    RISKS
    RELATED TO THE OPERATION OF OUR BUSINESS
  OUR
    QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY,
    LIMITING YOUR ABILITY TO EVALUATE HISTORICAL FINANCIAL RESULTS
    AND INCREASING THE LIKELIHOOD THAT OUR RESULTS WILL FALL BELOW
    MARKET ANALYSTS EXPECTATIONS, WHICH COULD CAUSE THE PRICE
    OF OUR ADSs TO DROP RAPIDLY AND SEVERELY.
   22




---



##### Table of Contents




    the size and timing of new/renewal agreements and upgrades;
    royalty rates;
    the announcement, introduction and acceptance of new products,
    product enhancements and technologies by us and our competitors;
    the mix of sales between our field sales force, our other direct
    sales channels and our telesales channels;
    general conditions in the U.S. or the international economy;
    the loss of significant customers;
    delays in availability of new products;
    product or service quality problems;
    seasonality  due to the budget and purchasing cycles
    of our customers, we expect our revenue and operating results
    will generally be strongest in the second half of our fiscal
    year and weakest in the first half of our fiscal year;
    the spending patterns of our customers;
    litigation costs and expenses;
    non-recurring charges related to acquisitions;
    growing competition that may result in price reductions; and
    currency fluctuations.    PAST AND
    FUTURE ACQUISITIONS, INCLUDING OUR ACQUISITION OF NETG, MAY NOT
    PRODUCE THE BENEFITS WE ANTICIPATE AND COULD HARM OUR CURRENT
    OPERATIONS.
    
    difficulties in integrating the technologies, operations,
    financial controls and personnel of the acquired company;
    difficulties in retaining or transitioning customers and
    employees of the acquired company;
    diversion of management time and focus;
    the incurrence of unanticipated expenses associated with the
    acquisition or the assumption of unknown liabilities or
    unanticipated financial, accounting or other problems of the
    acquired company; and
    accounting charges related to the acquisition, including
    restructuring charges, write-offs of in-process research and
    development costs, and subsequent impairment charges relating to
    goodwill or other intangible assets acquired in the transaction. 23




---



##### Table of Contents



DEMAND FOR
    OUR PRODUCTS AND SERVICES MAY BE ESPECIALLY SUSCEPTIBLE TO
    ADVERSE ECONOMIC CONDITIONS.
    INCREASED
    COMPETITION MAY RESULT IN DECREASED DEMAND FOR OUR PRODUCTS AND
    SERVICES, WHICH MAY RESULT IN REDUCED REVENUE AND GROSS PROFITS
    AND LOSS OF MARKET SHARE.
      
    third-party suppliers of instructor-led information technology,
    business, management and professional skills education and
    training;
    technology companies that offer learning courses covering their
    own technology products;
    suppliers of computer-based training and
    e-learning
    solutions;
    internal education, training departments and HR outsourcers of
    potential customers; and
    value-added resellers and network integrators.  e-learning e-learning
  WE RELY ON A
    LIMITED NUMBER OF THIRD PARTIES TO PROVIDE US WITH EDUCATIONAL
    CONTENT FOR OUR COURSES AND REFERENCEWARE, AND OUR ALLIANCES
    WITH THESE THIRD PARTIES MAY BE TERMINATED OR FAIL TO MEET OUR
    REQUIREMENTS.
     24




---



##### Table of Contents



e-learning
    OUR SUCCESS
    DEPENDS ON OUR ABILITY TO MEET THE NEEDS OF THE RAPIDLY CHANGING
    MARKET.
    THE
    E-LEARNING
    MARKET IS A DEVELOPING MARKET, AND OUR BUSINESS WILL SUFFER IF
    E-LEARNING
    IS NOT WIDELY ACCEPTED.
  e-learning
  e-learning
 25




---



##### Table of Contents



NEW PRODUCTS
    INTRODUCED BY US MAY NOT BE SUCCESSFUL.
    THE SUCCESS
    OF OUR
    E-LEARNING
    STRATEGY DEPENDS ON THE RELIABILITY AND CONSISTENT PERFORMANCE
    OF OUR INFORMATION SYSTEMS AND INTERNET INFRASTRUCTURE.
  e-learning e-learning
  BECAUSE MANY
    USERS OF OUR
    E-LEARNING
    SOLUTIONS WILL ACCESS THEM OVER THE INTERNET, FACTORS ADVERSELY
    AFFECTING THE USE OF THE INTERNET OR OUR CUSTOMERS
    NETWORKING INFRASTRUCTURES COULD HARM OUR BUSINESS.
  e-learning e-learning
    e-learning
 26




---



##### Table of Contents



WE DEPEND ON
    A FEW KEY PERSONNEL TO MANAGE AND OPERATE THE BUSINESS AND MUST
    BE ABLE TO ATTRACT AND RETAIN HIGHLY QUALIFIED EMPLOYEES.
    OUR BUSINESS
    IS SUBJECT TO CURRENCY FLUCTUATIONS THAT COULD ADVERSELY AFFECT
    OUR OPERATING RESULTS.
    WE MAY BE
    UNABLE TO PROTECT OUR PROPRIETARY RIGHTS. UNAUTHORIZED USE OF
    OUR INTELLECTUAL PROPERTY MAY RESULT IN DEVELOPMENT OF PRODUCTS
    OR SERVICES THAT COMPETE WITH OURS.
      OUR
    WORLDWIDE OPERATIONS ARE SUBJECT TO RISKS WHICH COULD NEGATIVELY
    IMPACT OUR FUTURE OPERATING RESULTS.
    
    difficulties or delays in developing and supporting non-English
    language versions of our products and services;
    political and economic conditions in various jurisdictions;
    difficulties in staffing and managing foreign subsidiary
    operations;
    longer sales cycles and account receivable payment cycles; 27




---



##### Table of Contents




    multiple, conflicting and changing governmental laws and
    regulations;
    foreign currency exchange rate fluctuations;
    protectionist laws and business practices that may favor local
    competitors;
    difficulties in finding and managing local resellers;
    potential adverse tax consequences; and
    the absence or significant lack of legal protection for
    intellectual property rights.    OUR SALES
    CYCLE MAY MAKE IT DIFFICULT TO PREDICT OUR OPERATING RESULTS.
    
    our need to educate potential customers about the benefits of
    our products;
    competitive evaluations by customers;
    the customers internal budgeting and approval processes;
    the fact that many customers view training products as
    discretionary spending, rather than purchases essential to their
    business; and
    the fact that we target large companies, which often take longer
    to make purchasing decisions due to the size and complexity of
    the enterprise.    OUR BUSINESS
    COULD BE ADVERSELY AFFECTED IF OUR PRODUCTS CONTAIN ERRORS.
    RISKS
    RELATED TO LEGAL PROCEEDINGS
  WE ARE THE
    SUBJECT OF AN INVESTIGATION BY THE SEC.
       28




---



##### Table of Contents



CLAIMS THAT
    WE INFRINGE UPON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS
    COULD RESULT IN COSTLY LITIGATION OR ROYALTY PAYMENTS TO THIRD
    PARTIES, OR REQUIRE US TO REENGINEER OR CEASE SALES OF OUR
    PRODUCTS OR SERVICES.
    e-learning
  WE COULD
    INCUR SUBSTANTIAL COSTS RESULTING FROM PRODUCT LIABILITY CLAIMS
    RELATING TO OUR CUSTOMERS USE OF OUR PRODUCTS AND SERVICES.
    WE COULD BE
    SUBJECTED TO LEGAL ACTIONS BASED UPON THE CONTENT WE OBTAIN FROM
    THIRD PARTIES OVER WHOM WE EXERT LIMITED CONTROL.
    SOME OF OUR
    INTERNATIONAL SUBSIDIARIES HAVE NOT COMPLIED WITH REGULATORY
    REQUIREMENTS RELATING TO THEIR FINANCIAL STATEMENTS AND TAX
    RETURNS.
    RISKS
    RELATED TO OUR ADSs
  THE MARKET
    PRICE OF OUR ADSs MAY FLUCTUATE AND MAY NOT BE SUSTAINABLE.
   29




---



##### Table of Contents



SALES OF
    LARGE BLOCKS OF OUR ADSs COULD CAUSE THE MARKET PRICE OF OUR
    ADSs TO DROP SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties                Item 3.
    Legal
    Proceedings  SEC
    Investigations
   30




---



##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    Quarter Ended

High


LowApril 30, 2006

$
5.95


$
4.60July 31, 2006


6.53



5.19October 31, 2006


6.86



5.35January 31, 2007


6.98



5.41April 30, 2007


8.80



6.72July 31, 2007


9.40



7.47October 31, 2007


9.30



7.26January 31, 2008


10.22



8.26     and/or
 31




---



##### Table of Contents



Irish
    Stamp Duty
          Item 6.
    Selected
    Financial Data  Appendix A
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
  Overview
  e-learning e-learning
 32




---



##### Table of Contents



Accounting for the Costs of Computer Software to be
    Sold, Leased or Otherwise Marketed,
            Business
    Outlook
    e-learning
 33




---



##### Table of Contents



®
    
    cross selling and up selling;
    looking at new markets;
    acquiring new customers;
    continuing to execute on our new product and telesales
    distribution initiatives; and
    continuing to evaluate merger and acquisition opportunities that
    could contribute to our long-term objectives.  Critical
    Accounting Policies
   34




---



##### Table of Contents



Revenue
    Recognition
    97-2, Software Revenue Recognition, SOP 98-4 SOP 98-9 00-21, Revenue Arrangements with Multiple
    Deliverables Revenue
    Recognition
  ®
  and/or
         35




---



##### Table of Contents



No. 01-14, Income Statement Characterization of Reimbursements
    Received for Out-of-Pocket Expenses Incurred (EITF 01-14).
        Amortization
    of Intangible Assets and Impairment of Goodwill
        Share
    Based Compensation
  Share-Based Payment Accounting for Stock-Based Compensation. Accounting for Stock Issued to
    Employees Statement of Cash Flows. Accounting for Stock-based
    Compensation  Transition and Disclosure
 36




---



##### Table of Contents



37




---



##### Table of Contents



Deferral
    of Commissions
  Bulletin 90-1 Accounting for Separately Priced Extended Warranty and
    Product Maintenance Contracts Revenue Recognition,
  Derivative
    financial instruments
  Accounting for Derivative Instruments and Hedging
    Activities
      Restructuring
    Charges
  Business Combinations, EITF 95-3 Accounting
    for Costs Associated with Exit or Disposal Activities.
     38




---



##### Table of Contents



Income
    Taxes
  Accounting for Income Taxes
    Accounting for Uncertainty in Income
    Taxes, Accounting for Income
    Taxes
    Business
    Combinations
     39




---



##### Table of Contents



Results
    of Operations
    Fiscal Year Ended January 31,Dollar


Percent ChangeIncrease (Decrease)


Increase (Decrease)


Percentage of Revenue2007/2008


2007/2008


2006


2007


2008(In thousands)Revenues

$
56,051



25
%


100
%


100
%


100
%Cost of revenues  amortization of intangible assets


1,001



23
%


3
%


2
%


2
%Cost of revenues


6,036



23
%


12
%


12
%


12
%Gross profit


49,014



25
%


85
%


86
%


86
%Research and development


8,836



22
%


18
%


18
%


18
%Selling and marketing


6,599



7
%


41
%


40
%


35
%General and administrative


6,895



25
%


12
%


12
%


12
%Legal settlements (insurance recoveries)






*



(8
)%






Amortization of intangible assets


9,585



580
%


1
%


1
%


4
%Merger and integration related expenses


12,283



*











4
%Restructuring


8



31
%










Restatement  SEC investigation


448



50
%


1
%






Total operating expenses


44,654



28
%


65
%


72
%


73
%Operating income


4,360



14
%


20
%


14
%


13
%Other income (expense), net


(90
)


94
%










Interest income


(362
)


(8
)%


1
%


2
%


1
%Interest expense


(11,871
)


4,270
%










(4
)%Income before income taxes


(7,963
)


(22
)%


21
%


16
%


10
%Benefit for income taxes


43,538



*



4
%


5
%


(11
)%Income from continuing operations


35,575



147
%


16
%


11
%


21
%Income from operations of businesses to be disposed, net of
    income tax


270



*











Net income

$
35,845



148
%


16
%


11
%


21
%     *
    
    Not meaningful
    
    Does not add due to rounding. 40




---



##### Table of Contents



Comparison
    of the Fiscal Years Ended January 31, 2008 and
    2007
  Revenues
  Fiscal Year Ended January 31,2007


2008


Change(In thousands)Revenues:Multi-Modal Learning (MML)

$
220,150


$
281,006


$
60,856Retail Certification


5,022



217



(4,805
)Total

$
225,172


$
281,223


$
56,051       Fiscal Year Ended January 31,2007


2008


Change(In thousands)Revenues:United States

$
175,483


$
217,669


$
42,186International


49,689



63,554



13,865Total

$
225,172


$
281,223


$
56,051       Operating
    Expenses
     41




---



##### Table of Contents



Other
    (Expense) Income, net
    Interest
    Income
    Interest
    Expense
   42




---



##### Table of Contents



Provision
    for Income Taxes
    Comparison
    of the Fiscal Years Ended January 31, 2007 and
    2006
  Fiscal Year Ended January 31,Dollar


Percent ChangeIncrease (Decrease)


Increase (Decrease)


Percentage of Revenue2006/2007


2006/2007


2005


2006


2007(In thousands)Revenues

$
9,605



4
%


100
%


100
%


100
%Cost of revenues  amortization of intangible assets


(2,517
)


(36
)%


3
%


3
%


2
%Cost of revenues


1,294



5
%


10
%


12
%


12
%Gross profit


10,828



6
%


87
%


85
%


86
%Research and development


1,604



4
%


22
%


18
%


18
%Selling and marketing


2,456



3
%


44
%


41
%


40
%General and administrative


1,959



8
%


12
%


12
%


12
%Legal settlements (insurance recoveries)


17,710



*







(8
)%


Amortization of intangible assets


(522
)


(24
)%


1
%


1
%


1
%Impairment charge






*



9
%






Restructuring


(615
)


(96
)%


6
%






Restatement:SEC investigation


(1,090
)


(55
)%


1
%


1
%


Other professional fees






*



1
%






Total operating expenses


21,502



15
%


96
%


65
%


72
%Operating income


(10,674
)


(25
)%


(9
)%


20
%


14
%Other income (expense), net


(837
)


*











Gain (loss) on sale assets, net


586



*











Interest income


2,531



142
%






1
%


2
%Interest expense


153



(35
)%










Income before provision for income taxes


(8,241
)


(19
)%


(9
)%


21
%


16
%Provision for income taxes


2,821



31
%






4
%


5
%Net income (loss)

$
(11,062
)


(31
)%


(9
)%


16
%


11
%     *
    
    Not meaningful
    
    Does not add due to rounding. 43




---



##### Table of Contents



Revenues
  Fiscal Year Ended January 31,2006


2007


Change(In thousands)Revenues:Multi-Modal Learning (MML)

$
201,236


$
220,150


$
18,914Retail Certification


14,331



5,022



(9,309
)Total

$
215,567


$
225,172


$
9,605     Fiscal Year Ended January 31,2006


2007


Change(In thousands)Revenues:United States

$
168,525


$
175,483


$
6,958International


47,042



49,689



2,647Total

$
215,567


$
225,172


$
9,605     Operating
    Expenses
           44




---



##### Table of Contents



Other
    (Expense) Income, net
    Gain
    (Loss) on Sale of Assets, net
    Interest
    Income
    Provision
    for Income Taxes
    Liquidity
    and Capital Resources
     45




---



##### Table of Contents



46




---



##### Table of Contents



Payments Due by PeriodLess Than


1-3


3-5


More ThanContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating Lease Obligations

$
19,490


$
6,621


$
4,528


$
1,867


$
6,474Debt Obligations


199,000



2,000



4,000



4,000



189,000Total Obligations

$
218,490


$
8,621


$
8,528


$
5,867


$
195,474            47




---



##### Table of Contents



Recent
    Accounting Pronouncements
  Fair Value
    Measurements
  The Fair Value
    Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115 )
 48




---



##### Table of Contents



Business
    Combinations
  Noncontrolling
    Interests in Consolidated Financial Statements, an amendment of
    ARB No. 51
  Disclosures about Derivative
    Instruments and Hedging Activities, an amendment of FASB
    Statement No. 133 Accounting for Derivative Instruments
    and Hedging Activities
  Explanation
    of Use of Non-GAAP Financial Results
       49




---



##### Table of Contents



Information
    Regarding Forward-Looking Statements
  Form 10-K Form 10-K.
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
      Foreign
    Currency Risk
   50




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Appendix B
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls & Procedures
  Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Control
    Managements
    Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f) 15d-15(f)
  
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the company;
    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
    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.   51




---



##### Table of Contents



Form 10-K,
 52




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                 
    53




---



##### Table of Contents



Item 9B.
    Other
    Information    PART III  Item 10.
    Directors,
    and Executive Officers and Corporate Governance  Form 10-K,
  Item 11.
    Executive
    Compensation  Form 10-K,
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K,
  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Form 10-K,
  Item 14.
    Principal
    Accounting Fees and Services  Form 10-K,
  PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Financial Statements. Appendix B Form 10-K:
                Financial Statement Schedules.
  Exhibits. Form 10-K.
 54




---



##### Table of Contents



SIGNATURES       By:
    /s/  CHARLES
    E. MORAN   President and Chief Executive Officer
      Signature

Title

Date/s/  CHARLES
    E. MORANCharles
    E. Moran

President and Chief Executive
    Officer and Director
    (Principal Executive Officer)

March 31, 2008/s/  THOMAS
    J. MCDONALDThomas
    J. McDonald

Chief Financial Officer 
    (Principal Financial Officer)

March 31, 2008/s/  ANTHONY
    P. AMATOAnthony
    P. Amato

Vice President, Finance and Chief
    Accounting Officer
    (Principal Accounting Officer)

March 31, 2008/s/  P.
    HOWARD EDELSTEINP.
    Howard Edelstein

Director

March 31, 2008/s/  STEWART
    K. P. GROSSStewart
    K. P. Gross

Director

March 31, 2008/s/  JAMES
    S. KRZYWICKIJames
    S. Krzywicki

Director

March 31, 2008/s/  FERDINAND
    VON PRONDZYNSKIFerdinand
    von Prondzynski

Director

March 31, 2008/s/  WILLIAM
    F. MEAGHER, JR.William
    F. Meagher, Jr.

Director

March 31, 2008  55




---



##### Table of Contents



APPENDIX A
  SELECTED
    FINANCIAL DATA
  Form 10-K.
  Year Ended


Year Ended


Year Ended


Year Ended


Year EndedJanuary 31,


January 31,


January 31,


January 31,


January 31,2004


2005


2006


2007


2008(In thousands, except per share data)Statement of Operations Data:Revenues

$
193,475


$
212,300


$
215,567


$
225,172


$
281,223Cost of revenues  amortization of intangible assets(1)


6,791



6,864



6,939



4,422



5,423Cost of revenues


18,401



21,724



25,307



26,601



32,637Gross profit


168,283



183,712



183,321



194,149



243,163Operating expenses:Research and development(1)


54,399



45,841



39,172



40,776



49,612Selling and marketing


87,978



94,365



88,438



90,894



97,493General and administrative


28,647



25,208



25,776



27,735



34,630Legal settlements (insurance recoveries)


93,750







(17,710
)






Amortization of intangible assets(1)


3,281



2,711



2,174



1,652



11,237Merger and integration related expenses


















12,283Restructuring


1,857



13,361



641



26



34Impairment charge






19,268











Restatement and option granting investigation:SEC Investigation


1,898



2,182



1,988



898



1,346Other professional fees


14,473



320











Total operating expenses


286,283



203,256



140,479



161,981



206,635Operating (loss) income


(118,000
)


(19,544
)


42,842



32,168



36,528Other income (expense), net


786



(692
)


741



(96
)


(186
)Gain (loss) on sale of investments, net


3,682







(586
)






Interest income


954



1,091



1,779



4,310



3,948Interest expense


(167
)


(337
)


(431
)


(278
)


(12,149
)(Loss) income before provision for income taxes


(112,745
)


(19,482
)


44,345



36,104



28,141Provision for income taxes


529



631



9,130



11,951



(31,587
)Net (loss) income from continuing operations


(113,274
)


(20,113
)


35,215



24,153



59,728Income from operations of businesses to be disposed, net of
    income tax expense of $181 for the fiscal year ended
    January 31, 2008


















270Net (loss) income

$
(113,274
)

$
(20,113
)

$
35,215


$
24,153


$
59,998Net (loss) income per share(2):Basic  continuing operations


(1.13
)


(0.19
)


0.34



0.24



0.57Basic  discontinued operations


















0.00$
(1.13
)

$
(0.19
)

$
0.34


$
0.24


$
0.57Basic weighted average shares outstanding


100,115



105,134



102,473



101,698



104,391Diluted  continuing operations


(1.13
)


(0.19
)


0.34



0.23



0.55Diluted  discontinued operations


















0.00$
(1.13
)

$
(0.19
)

$
0.34


$
0.23


$
0.55Diluted weighted average shares outstanding


100,115



105,134



103,352



104,240



108,289   A-1




---



##### Table of Contents



As of


As of


As of


As of


As ofJanuary 31,


January 31,


January 31,


January 31,


January 31,2004


2005


2006


2007


2008(In thousands)Balance Sheet Data:Cash, cash equivalents and short-term investments

$
61,606


$
55,158


$
73,569


$
104,117


$
89,584Working capital (deficit)


(48,849
)


(46,523
)


(8,018
)


38,134



30,408Long-term investments, deferred tax assets, net &
    other assets


124



8,772



736



6,719



95,596Total assets


342,378



303,497



299,902



342,970



696,681Long-term debt


















197,000Stockholders equity


85,758



84,919



102,272



137,929



213,088     (1)
    
    Certain reclassifications have been made to prior year amounts
    to conform to the fiscal 2008 presentation.(2)
    
    See Note 2(e) of the Notes to the Consolidated Financial
    Statements for the determination of shares used in computing
    basic and diluted net loss per common share. A-2




---



##### 



APPENDIX B
  FINANCIAL
    STATEMENTS
  INDEX
   
 PageReport of Independent Registered Public
    Accounting Firm


B-2Consolidated Balance Sheets as of
    January 31, 2007 and 2008


B-3Consolidated Statements of Income for the Years
    Ended January 31, 2006, 2007 and 2008


B-4Consolidated Statements of Stockholders
    Equity and Comprehensive Income for the Years
    Ended January 31, 2006, 2007 and 2008


B-5Consolidated Statements of Cash Flows for the
    Years Ended January 31, 2006, 2007 and 2008


B-6Notes to the Consolidated Financial Statements


B-7   B-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Share-Based Payment. Accounting for Uncertainty in Income Taxes-An
    Interpretation of FASB Statement No. 109
    
    B-2




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
 CONSOLIDATED
    BALANCE SHEETS  January 31,2007


2008(In thousandsexcept share data)ASSETSCurrent assets:Cash and cash equivalents

$
48,612


$
76,059Short-term investments


55,505



13,525Accounts receivable, less reserves of approximately $206 and
    $446 as of January 31, 2007 and 2008, respectively


94,343



171,708Prepaid expenses and other current assets


22,215



29,061Restricted cash


20,095



3,963Deferred tax assets






13,476Total current assets


240,770



307,792Property and equipment, at cost:Computer equipment


34,610



38,983Furniture and fixtures


2,370



2,902Leasehold improvements


1,659



1,76538,639



43,650Less  accumulated depreciation and amortization


(28,967
)


(36,440
)9,672



7,210Intangible assets:Acquired intangible assets, net


2,638



29,887Goodwill


83,171



256,19685,809



286,083Long-term investments


3,598



Deferred tax assets


159



87,866Other assets


2,962



7,730Total assets

$
342,970


$
696,681LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current maturities of long-term debt

$



$
2,000Accounts payable


3,327



2,139Accrued compensation


17,870



24,577Accrued expenses


35,427



29,507Deferred revenue


146,012



219,161Total current liabilities


202,636



277,384Long term debt






197,000Other long term liabilities


2,405



9,209Total long term liabilities


2,405



206,209Commitments and Contingencies (Note 8)Stockholders equity:Ordinary Shares, 0.11 par value:
    250,000,000 shares authorized; 109,255,366 and 111,663,813
    issued at January 31, 2007 and January 31, 2008,
    respectively


12,039



12,397Additional paid-in capital


573,394



591,303Treasury stock, at cost, 6,533,884 ordinary shares


(24,524
)


(24,524
)Accumulated deficit


(421,661
)


(361,663
)Accumulated other comprehensive loss


(1,319
)


(4,425
)Total stockholders equity


137,929



213,088Total liabilities and stockholders equity

$
342,970


$
696,681    B-3




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF INCOME  Years Ended January 31,2006


2007


2008(In thousands, except per share data)Revenues

$
215,567


$
225,172


$
281,223Cost of revenues  amortization of intangible assets


6,939



4,422



5,423Cost of revenues(1)


25,307



26,601



32,637Gross profit


183,321



194,149



243,163Operating expenses:Research and development(1)


39,172



40,776



49,612Selling and marketing(1)


88,438



90,894



97,493General and administrative(1)


25,776



27,735



34,630Insurance recoveries


(17,710
)






Amortization of intangible assets


2,174



1,652



11,237Merger and integration related expenses










12,283Restructuring


641



26



34Restatement  SEC investigation


1,988



898



1,346Total operating expenses


140,479



161,981



206,635Operating income


42,842



32,168



36,528Other income (expense), net


741



(96
)


(186
)Loss on sale of assets, net


(586
)






Interest income


1,779



4,310



3,948Interest expense


(431
)


(278
)


(12,149
)Income before provision (benefit) for income taxes from
    continuing operations


44,345



36,104



28,141Provision (benefit) for income taxes


9,130



11,951



(31,587
)Income from continuing operations

$
35,215


$
24,153


$
59,728Income from discontinued operations, net of income tax expense
    of $181










270Net income

$
35,215


$
24,153


$
59,998Net income per share:Basic  continuing operations

$
0.34


$
0.24


$
0.57Basic  discontinued operations

$



$



$
0.00$
0.34


$
0.24


$
0.57Basic weighted average shares outstanding


102,473



101,698



104,391Diluted  continuing operations

$
0.34


$
0.23


$
0.55Diluted  discontinued operations

$



$



$
0.00$
0.34


$
0.23


$
0.55Diluted weighted average shares outstanding


103,352



104,240



108,289     (1)
    
    The following summarizes the allocation of stock-based
    compensation (in thousands):  2006


2007


2008Cost of revenues

$



$
90


$
203Research and development


187



952



958Selling and marketing


674



1,883



1,911General and administrative


120



2,134



2,879    B-4




---



##### Table of Contents






SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE
    INCOME

(In thousands except number of shares) AccumulatedOtherOrdinary Shares





Additional


Treasury Stock








Comprehensive


Total


TotalNumber of


0.11 Par


Paid-In


Number of





Accumulated


Deferred


Income


Stockholders


ComprehensiveShares


Value


Capital


Shares


Cost


Deficit


Compensation


(Loss)


Equity


IncomeBALANCE, JANUARY 31, 2005


106,207,818


$
11,617


$
559,052



443,757


$
(2,523
)

$
(481,029
)

$
(1,358
)

$
(840
)

$
84,919


$Exercise of stock options


370,930



51



797























848



Issuance of common stock under employee stock purchase plan


765,495



105



2,105























2,210



Stock option modification










89























89



Tax Benefit  Non-qualified stock options










9























9



Purchase of treasury stock














6,090,127



(22,001
)














(22,001
)


Amortization of deferred compensation


























893







893



Unrealized gains on marketable securities, net of tax of $0






























44



44



44Translation adjustment






























46



46



46Net income






















35,215











35,215



35,215Comprehensive net income for the year ended January 31, 2006





































$
35,305BALANCE, JANUARY 31, 2006


107,344,243


$
11,773


$
562,052



6,533,884


$
(24,524
)

$
(445,814
)

$
(465
)

$
(750
)

$
102,272Exercise of stock options


1,288,128



182



5,178























5,360



Issuance of common stock under employee stock purchase plan


622,995



84



1,570























1,654



Stock-based compensation










5,059























5,059



Reclassification of deferred compensation










(465
)














465











Unrealized gains on marketable securities, net of tax of $0






























82



82



82Translation adjustment






























(651
)


(651
)


(651
)Net income






















24,153











24,153



24,153Comprehensive net income for the year ended January 31, 2007





































$
23,584BALANCE, JANUARY 31, 2007


109,255,366


$
12,039


$
573,394



6,533,884


$
(24,524
)

$
(421,661
)

$



$
(1,319
)

$
137,929Exercise of stock options


1,928,374



287



8,833























9,120



Issuance of common stock under employee stock purchase plan


480,073



71



2,712























2,783



Stock-based compensation










5,951























5,951



Reclassification of deferred compensation






































Tax benefit from non-qualified stock options










413























413



Unrealized (loss) on marketable securities, net of tax of $0






























(45
)


(45
)


(45
)Unrealized (loss) on financial derivatives, net of tax effect of
    $1,387






























(2,080
)


(2,080
)


(2,080
)Translation adjustment






























(981
)


(981
)


(981
)Net income






















59,998











59,998



59,998Comprehensive net income for the year ended January 31, 2008





































$
56,892BALANCE, JANUARY 31, 2008


111,663,813


$
12,397


$
591,303



6,533,884


$
(24,524
)

$
(361,663
)

$



$
(4,425
)

$
213,088    B-5




---



##### Table of Contents





SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended January 31,2006


2007


2008(In thousands)Cash flows from operating activities from continuing operations:Net income from continuing operations

$
35,215


$
24,153


$
59,728Adjustments to reconcile net income to net cash provided by
    operating activities:Stock-based compensation


981



5,059



5,951Depreciation and amortization


5,224



6,100



6,935Amortization of acquired intangible assets and capitalized
    development costs


9,113



6,074



16,660(Recovery of) provision for bad debts


(593
)


(589
)


237Non-cash interest expense










735Provision (benefit) for income tax  non-cash


7,922



10,073



(33,958
)Realized gain (loss) on sale of assets, net


586







(58
)Tax benefit related to exercise of non qualified stock options










(413
)Changes in current assets and liabilities, net of acquisitions:Accounts receivable


784



(7,033
)


(43,261
)Prepaid expenses and other current assets


407



878



7,607Accounts payable


(1,935
)


(532
)


(2,584
)Accrued expenses, including long-term liabilities


(12,859
)


(1,839
)


(33,101
)Deferred revenue


(2,693
)


7,581



45,490Net cash provided by operating activities from continuing
    operations


42,152



49,925



29,968Cash flows from investing activities from continuing operations:Purchases of property and equipment


(6,423
)


(5,519
)


(2,968
)Capitalized software development costs


(1,652
)






Cash paid for business acquisitions






(2,881
)


(261,330
)Purchase of investments


(20,048
)


(91,168
)


(18,437
)Maturity of investments


27,219



53,585



63,928(Designation) release of restricted cash, net


(4,045
)


(15,056
)


16,138Net cash used in investing activities from continuing operations


(4,949
)


(61,039
)


(202,669
)Cash flows from financing activities from continuing operations:Borrowings under long-term debt, net of debt financing costs
    withheld










194,133Principal payment on long-term debt










(1,000
)Exercise of stock options


848



5,360



9,120Proceeds from employee stock purchase plan


2,210



1,654



2,783Tax benefit related to exercise of non qualified stock options










413Payments to acquire treasury shares


(22,001
)






Net cash (used in) provided by financing activities from
    continuing operations


(18,943
)


7,014



205,449Change in cash from discontinued operations










(7,658
)Effect of exchange rate changes on cash and cash equivalents


(1,229
)


775



2,357Net increase (decrease) in cash and cash equivalents


17,031



(3,325
)


27,447Cash and cash equivalents, beginning of year


34,906



51,937



48,612Cash and cash equivalents, end of year

$
51,937


$
48,612


$
76,059Supplemental disclosure of cash flow information:Cash paid for interest

$
431


$
279


$
10,308Cash paid for income taxes

$
1,375


$
2,280


$
2,867    B-6




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  (1)
    Basis of
    Presentation  e-learning
  (2)
    Summary
    of Significant Accounting Policies    (a)
    Principles
    of Consolidation    (b)
    Use of
    Estimates    (c)
    Revenue
    Recognition    97-2, Software Revenue Recognition, SOP 98-4 SOP 98-9 00-21, Revenue Arrangements with Multiple
    Deliverables Revenue
    Recognition
  ®
 B-7




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
            No. 01-14, Income Statement Characterization of Reimbursements
    Received for Out-of-Pocket Expenses
    Incurred (EITF 01-14).
     B-8




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (d)
    Deferred
    Commissions  Bulletin 90-1, Accounting for Separately Priced Extended Warranty and
    Product Maintenance Contracts Revenue Recognition,
  (e)
    Net
    Income Per Share      Year Ended January 31,2006


2007


2008Basic weighted average shares outstanding


102,473



101,698



104,391Effect of diluted shares outstanding


879



2,542



3,898Diluted weighted average common shares outstanding


103,352



104,240



108,289     Year Ended January 31,2006

2007

2008Options outstanding


9,858



8,520



8,659   (f)
    Foreign
    Currency Translation  Foreign Currency
    Translation.
 B-9




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (g)
    Cash,
    Cash Equivalents, Restricted Cash, Short-term Investments, and
    Long-term Investments        Accounting for Certain Investments
    in Debt and Equity Securities
 B-10




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007
  Gross


GrossContracted





Unrealized


UnrealizedDescription

Maturity


Cost


Gains


Losses


Fair ValueCash and cash equivalents:Cash


N/A


$
32,776


$



$



$
32,776Commercial paper


0-3 months



15,838







(2
)


15,836$
48,614







(2
)

$
48,612Short-term investments:Publicly-traded equity securities


N/A



138



94







232Commercial paper


4-12 months



11,829







(1
)


11,828Federal agency notes


4-12 months



3,495







(2
)


3,493Corporate debt securities


4-12 months



37,964







(12
)


37,952Certificates of deposit


4-12 months



2,000











2,000$
55,426



94



(15
)

$
55,505Long-term investments:Corporate debt securities


13-24 months


$
3,607







(9
)

$
3,598   2008
  Gross


GrossContracted





Unrealized


UnrealizedDescription

Maturity


Cost


Gains


Losses


Fair ValueCash and cash equivalents:Cash


N/A


$
32,576


$



$



$
32,576Commercial paper


0-3 months



16,680











16,680Federal agency notes


0-3 months



26,800



3







26,803$
76,056



3






$
76,059Short-term investments:Commercial paper


4-12 months



7,396











7,396Corporate debt securities


4-12 months



4,709



20







4,729Certificates of deposit


4-12 months



1,400











1,400$
13,505



20






$
13,525    B-11




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (h)
    Depreciation
    and Amortization    Estimated Useful LivesComputer equipment

2-3 yearsFurniture and fixtures

5 yearsLeasehold improvements

Lesser of 7 years or life of lease     (i)
    Research
    and Development Expenses  Accounting for the Costs of
    Computer Software to Be Sold, Leased or Otherwise Marketed
      (j)
    Other
    Comprehensive Income  Reporting Comprehensive
    Income
  Year EndedJanuary 31,2007


2008Unrealized holding gains

$
67


$
23Change in fair value of interest rate hedge, net of tax






(2,080
)Foreign currency adjustment


(1,386
)


(2,368
)Total accumulated other comprehensive loss

$
(1,319
)

$
(4,425
)  B-12




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (k)
    Fair
    Value of Financial Instruments      (l)
    Deferred
    Financing Costs    (m)
    Derivative
    Financial Instruments          (n)
    Concentrations
    of Credit Risk and Off-Balance-Sheet Risk       B-13




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (o)
    Amortization
    and Impairment of Goodwill and Intangible Assets    Goodwill and Other Intangible
    Assets.
  (p)
    Restructuring
    Charges  Accounting for Costs Associated
    with Exit or Disposal Activities
  (q)
    Merger
    and Integration Related Costs    (r)
    Business
    Combinations   B-14




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (s)
    Advertising
    Costs    (t)
    Accounting
    for Stock-Based Compensation    Share-Based Payment Accounting for Stock-Based
    Compensation. Accounting for Stock Issued
    to Employees Statement of Cash Flows
       B-15




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year EndedJanuary 31,2006Net income  
    As reported

$
35,215Add: Share-based employee compensation expense recognized
    under
    APB No. 25


893Less: Total share-based employee compensation expense determined
    under fair value based method for all awards under the employee
    share option plan


(24,551
)Less: Total share-based employee compensation expense determined
    under fair value based method for all awards under the ESPP


(753
)Pro forma net income

$
10,804Basic and diluted net loss per share  
    As reported

$
0.34Pro forma

$
0.11        B-16




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended January 31,2006


2007


2008Risk-free interest rates


3.86-4.48
%


4.41-5.03
%


3.25-4.93
%Expected dividend yield










Volatility factor


67
%


60
%


60
%Expected lives


7 years



4 years



4 yearsWeighted average fair value of options granted

$
2.78


$
3.16


$
4.69Weighted average remaining contractual life of options
    outstanding


5.99 years



5.47 years



4.76 years       (u)
    Recent
    Accounting Pronouncements  Fair Value
    Measurements
  The Fair Value
    Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115.
 B-17




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Business
    Combinations
  Noncontrolling
    Interests in Consolidated Financial Statements, an amendment of
    ARB No. 51
  Disclosures about Derivative
    Instruments and Hedging Activities, an amendment of FASB
    Statement No. 133 Accounting for Derivative Instruments
    and Hedging Activities
  (v)
    Income
    Taxes  Accounting for Income Taxes Accounting for Uncertainty in
    Income Taxes
  (3)
    Acquisitions  (a)
    NETg   B-18




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business
    Combinations
  Cash paid

$
254,737Transaction costs incurred


7,288Total purchase price

$
262,025       May 14,


Allocation


January 31,Description

2007


Adjustments


2008Current assets

$
38,300


$
2,654


$
40,954Deferred tax asset






10,194



10,194Property and equipment


4,638



(3,168
)


1,470Goodwill


262,291



(37,251
)


225,040Amortizable intangible assets


42,650



400



43,050Current liabilities*


(44,786
)


11,588



(33,198
)Deferred revenue


(25,485
)






(25,485
)Total

$
277,608


$
(15,583
)

$
262,025     *
    
    Includes exit costs of $12.5 million.     B-19




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accumulated


Net BookAmortization as of


Value as ofAscribed





January 31,


January 31,Description

Fair Value


Life


2008


2008Non-compete agreement

$
6,900



2.5 years


$
(2,070
)

$
4,830Trademark/tradename


2,700



2 years



(1,013
)


1,687Developed software/courseware


9,950



1.5 years



(4,975
)


4,975Customer contractual relationships


1,000



1 year



(750
)


250Customer non-contractual relationships


22,500



4 years



(5,980
)


16,520$
43,050






$
(14,788
)

$
28,262           EITF 01-03, Accounting in a Business Combination for Deferred
    Revenue of an Acquiree
  No. 95-3, Recognition of Liabilities in Connection with a
    Purchase Business Combination (EITF 95-3) No. 95-3
 B-20




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SUPPLEMENTAL
    PRO-FORMA INFORMATION (UNAUDITED)
    Year Ended January 31,2008


2007(In thousandsexcept per share data)Revenues

$
343,723


$
284,162Net income (loss)


15,650



(44,962
)Net income (loss) per share  basic

$
0.15


$
(0.44
)Net income (loss) per share  diluted

$
0.14


$
(0.44
)     (b)
    Targeted
    Learning Corporation    Business
    Combinations
   B-21




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accumulated


Net BookAmortization as of


Value as ofAscribed





January 31,


January 31,Description

Fair Value


Life


2008


2008Trademark/tradename


20



2 years



(10
)


10Developed software/courseware


510



4 years



(128
)


382Customer contractual relationships


330



3 years



(110
)


220$
860






$
(248
)

$
612         Business Acquisitions, Net of Cash Acquired:Fair value of tangible assets acquired

$
53,638Liabilities assumed


(59,521
)Cost in excess of fair value (goodwill)


228,365Fair value of acquired identifiable intangible assets


43,910266,392Less cash acquired


2,181Net cash paid for
    acquisitions*

$
264,211     *
    
    Includes $2,881 paid for acquisition costs in the fiscal year
    ended January 31, 2007  (4)  Special
    Charges
  (a)
    Merger
    and Exit Costs Recognized as Liabilities in Purchase
    Accounting  EITF 95-3, Recognition of Liabilities in Connection with Purchase
    Business Combinations
   B-22




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      EITF 95-3, Recognition of Liabilities in Connection with Purchase
    Business Combinations
    Accounting for Contingencies Business Combinations
 B-23




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    EmployeeSeverance and


ClosedownRelated Costs


of Facilities


Other


TotalMerger and exit accrual, January 31, 2006

$
1,186


$
3,457


$
169


$
4,812Payments made during the year ended January 31, 2007


(308
)


(1,288
)


(48
)


(1,644
)Reversal without utilization to accrual during the year ended
    January 31, 2007






(68
)






(68
)Adjustments to accrual during the year ended January 31,
    2007






177







177Merger and exit accrual, January 31, 2007

$
878


$
2,278


$
121


$
3,277Payments made during the year ended January 31, 2008


(7,993
)


(1,282
)


(328
)


(9,603
)NETg acquisition cost accrual during the year ended
    January 31, 2008


8,761



1,957



1,753



12,471Adjustments to accrual during the year ended January 31,
    2008






271



(176
)


95Merger and exit accrual, January 31, 2008

$
1,646


$
3,224


$
1,370


$
6,240Long-term obligation

$



$
1,502


$



$
1,502Current obligation

$
1,646


$
1,722


$
1,370


$
4,738       Year Ended January 31, 2009

$
4,738Year Ended January 31, 2010


567Year Ended January 31, 2011


935Total

$
6,240   (b)
    Discontinued
    Operations    Accounting for the Impairment or Disposal of Long-Lived
    Assets.
 B-24




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Financial
    Campus
    EITF 03-13, Applying the Conditions in Paragraph 42 of FASB
    Statement No. 144 in Determining Whether to Report
    Discontinued Operations (EITF 03-13),
    Year EndedJanuary 31, 2008(In thousands)Revenues from discontinued operations

$
90Loss from discontinued operations before income taxes


(409
)Income tax (benefit)


(164
)Loss from discontinued operations

$
(245
)   NETg
    Press
      EITF 03-13, Applying the Conditions in Paragraph 42 of FASB
    Statement No. 144 in Determining Whether to Report
    Discontinued Operations (EITF 03-13),
 B-25




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedJanuary 31, 2008(In thousands)Revenues from discontinued operations

$
3,901Income from discontinued operations before income taxes


520Income tax


209Income from discontinued operations

$
311   Interact
    Now
      Year EndedJanuary 31, 2008(In thousands)Revenues from discontinued operations

$
809Loss from discontinued operations before income taxes


(162
)Income tax (benefit)


(65
)Loss from discontinued operations

$
(97
)   Wave
    Year EndedJanuary 31, 2008(In thousands)Revenues from discontinued operations

$
2,426Income from discontinued operations before income taxes


502Income tax


201Income from discontinued operations

$
301   (c)
    Restructuring   B-26




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    EmployeeSeverance and


ContractualRelated Costs


Obligations


TotalTotal restructuring accrual as of January 31, 2006

$



$
1,987


$
1,987Payments and write downs made during the year ended
    January 31, 2007






(415
)


(415
)Restructuring charge for year ended January 31, 2007


88



(239
)


(151
)Total restructuring accrual as of January 31, 2007


88



1,333



1,421Payments and write downs made during the year ended
    January 31, 2008


(122
)


(372
)


(494
)Restructuring charge for year ended January 31, 2008


34







34Total restructuring accrual as of January 31, 2008

$



$
961


$
961Long-term obligation

$



$



$
Current obligation

$



$
961


$
961     Year


Year


YearEnded


Ended


EndedJanuary 31,


January 31,


January 31,2006


2007


2008Research and development

$
5


$
(226
)

$
Selling and marketing


394



53



34General and administrative


62



22



Merger and exit related restructure


180



177



Total

$
641


$
26


$
34    B-27




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (5)
    Goodwill
    and Intangible Assets    January 31, 2007


January 31, 2008Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountInternally developed software/courseware

$
28,257


$
27,836


$
421


$
38,717


$
33,259


$
5,458Customer contracts


13,018



11,701



1,317



36,848



19,846



17,002Non-compete agreement














6,900



2,070



4,830Trademarks and trade names


5



5







2,725



1,028



1,697Books trademark


900







900



900







90042,180



39,542



2,638



86,090



56,203



29,887Goodwill


83,171







83,171



256,196







256,196Total

$
125,351


$
39,542


$
85,809


$
342,286


$
56,203


$
286,083    B-28




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    TotalGross carrying amount of goodwill, January 31, 2006

$
93,929Utilization of tax benefit


(10,073
)Tax refund received in excess of purchase price allocation


(390
)Reserve adjustment


(295
)Gross carrying amount of goodwill, January 31, 2007


83,171Utilization of tax benefit


(54,561
)Acquisition of TLC


3,325Acquisition of NETg


225,040Other


(779
)Gross carrying amount of goodwill, January 31, 2008

$
256,196     AmortizationFiscal Year

Expense2009

$
16,4152010


8,2452011


3,7122012


615Total

$
28,987     Goodwill
    Impairment
    (6)
    Related
    Party Transactions     B-29




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (7)
    Income
    Taxes    January 31,2006


2007


2008Ireland

$
13,178


$
1,526


$
6,236United States


28,365



29,296



20,476Rest of World


2,802



5,282



1,429$
44,345


$
36,104


$
28,141     January 312006


2007


2008Current:Ireland

$



$



$
United States


2,382



3,158



2,966Rest of World


968



832



580$
3,350


$
3,990


$
3,546Deferred:Ireland

$



$
183


$
United States


5,709



7,778



(35,206
)Rest of World


71







73$
5,780


$
7,961


$
(35,133
)Tax provision

$
9,130


$
11,951


$
(31,587
)     January 31,2007


2008CurrentNet operating loss carryforwards

$
18,037


$
11,473Nondeductible expenses and reserves


3,387



2,26121,424



13,734Non-currentNet operating loss carryforwards

$
95,957


$
95,302Tax credits


6,823



2,459Intangibles


(1,018
)


8,884FAS 123(R) compensation


1,762



4,143Nondeductible expenses and reserves






4,791Interest rate swap






1,386103,524



116,965Total current and non-current


124,948



130,699Less  valuation allowance


(124,789
)


(29,357
)$
159


$
101,342  B-30




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Taxes
  Accounting for Income Taxes
       B-31




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    January 31,2006


2007


2008Income tax provision at Irish statutory rate


12.5
%


12.5
%


12.5
%Increase (decrease) in tax resulting from:U.S. state tax provision, net of U.S. federal benefit


4.5



6.5



6.3Tax exempt legal settlements (insurance proceeds)


(4.9
)


0.0



0.0Foreign rate differential, primarily U.S.


15.7



17.2



16.8Nondeductible items


2.0



2.9



2.8Other










0.6Change in valuation allowance


(9.2
)


(6.0
)


(151.2
)Effective tax rate


20.6
%


33.1
%


(112.2
)%                 Accounting for
    Uncertainty in Income Taxes-an interpretation of FASB Statement
    No. 109 ,
 B-32




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Unrecognized tax benefits at February 1, 2007

$
3.2Increases for tax positions taken during a prior period


0.7Increases for tax positions taken during the current period


0.2Decreases related to settlements


(0.5
)Increase (decreases) resulting from the expiration of statute of
    limitations


Unrecognized tax benefits at January 31, 2008

$
3.6   non-U.S. income
  (8)
    Commitments
    and Contingencies  (a)
    Leases     B-33




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Facilities


Other


TotalFiscal year ended January 31:2009

$
5,566


$
1,054


$
6,6202010


2,311



434



2,7452011


1,731



51



1,7822012


1,055







1,0552013


812







812Thereafter


6,474







6,474$
17,949


$
1,539


$
19,488   (b)
    Minimum
    Commitments  and/or
  (c)
    Litigation      SEC
    Investigations
   B-34




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Lawsuits
    (d)
    Delinquent
    Foreign Filings    (9)
    Stockholders
    Equity  (a)
    Stock
    Option Plans     B-35




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    Under the 1990 Share Option Scheme (the 1990 Plan), options
    to acquire ordinary shares in the Company could have been
    granted to any director or employee of the Company. The 1990
    Plan has expired by its terms.
    Under the 1994 Share Option Plan (the 1994 Plan), all
    employees and directors of the Company and any independent
    contractor who performed services for the Company were eligible
    to receive grants of
    non-statutory
    options (NSOs). Employees were also eligible to receive grants
    of incentive share options intended to qualify under
    Section 422 of the Internal Revenue Code. The 1994 Plan has
    expired by terms.
    Under the 2001 Outside Director Plan (the Outside Director
    Plan), all outside directors of the Company are eligible to
    receive option grants upon appointment to the Board of Directors
    and each subsequent year thereafter.
    Under the 1996 Supplemental Stock Plan (the 1996 Plan), all
    employees, with the exception of directors and executive
    officers, were eligible to receive grants of NSOs. The 1996
    Supplemental Stock Plan has expired by terms on October 15,
    2006.
    Under the ForeFront92 Plan, (the FF92 Plan) NSOs and ISOs
    were granted to any employee or director of ForeFront. The FF92
    Plan has expired by terms.
    Under the 1996 ForeFront Group Inc. Non-Qualified Stock Option
    Plan, (the FF96 Plan) NSOs were granted to employees and
    directors of ForeFront. The FF96 Plan has expired by terms.
    Under the Forefront Directors 1996 Plan, (the
    FF96 Directors Plan) non-employee directors were
    eligible to receive grants of options to acquire common stock
    upon election to the Board of Directors and each subsequent year
    thereafter. The FF96 Directors Plan has expired by
    terms.
    Under the Knowledge Well Limited 1998 Share Option Plan,
    (the KWL Plan) and the Knowledge Well Group Limited
    1998 Share Option Plan, (the KWGL Plan), employees and
    directors and any independent contractor who performs services
    for Knowledge Well Limited (KWL) and Knowledge Well Group
    Limited (KWGL) were eligible to receive grants of NSOs.
    Employees of KWL and KWGL were also eligible to receive grants
    of ISOs which were intended to qualify under Section 422 of
    the Internal Revenue Code.
    Under the 2002 Stock Incentive Plan, (the 2002 Plan) all
    employees, inside directors and consultants are eligible to
    receive incentive share options or non-statutory share options.
    Share purchase rights may also be granted under the plan. B-36




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Plan Name

Authorized


Outstanding


Available for Grant1990 Share Option Scheme (the 1990 Plan)


4,700,000



142,708



1994 Share Option Plan (the 1994 Plan)


11,747,036



1,084,570



1996 Supplemental Stock Plan (the 1996 Plan)(1)(2)


8,701,554



3,181,763



2001 Outside Director Option Plan (the Outside Director Plan)


750,000



435,000



298,7501996 ForeFront Group Inc. Non-Qualified Stock Option Plan (the
    FF96 Plan)(1)


456,101







Knowledge Well Limited 1998 Share Option Plan (the KWL
    Plan)(1)


420,531







Knowledge Well Group Limited 1998 Share Option Plan (the
    KWGL Plan)(1)


30,338



88



Books24x7.com, Inc. 1994 Stock Option Plan (the Books Plan)


867,436



24,413



1998 Stock Incentive Plan (the 1998 Plan)


7,402,071



544,862



2001 Stock Incentive Plan (the 2001 Plan)


11,354,512



6,238,192



2002 Stock Incentive Plan (the 2002 Plan)(1)(2)


8,850,000



4,979,167



2,114,51355,279,579



16,630,763



2,413,263     (1)
    
    On March 23, 2006, the Companys shareholders approved
    a resolution to transfer an aggregate of 5,100,000 shares
    from certain non-shareholder approved plans to the 2002 Plan.
    This includes 342,823 shares from the FF96 Plan,
    624,462 shares from the KWGL Plan, 234,269 shares from
    the KWL Plan and 3,898,446 shares from the 1996 Plan.(2)
    
    On September 28, 2006, the Companys shareholders
    approved a resolution to transfer 1,400,000 shares from the
    1996 Plan to the 2002 Plan. B-37




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     WeightedAverageWeighted


Remaining


AggregateAverage


Contractual


IntrinsicShares


Exercise Price


Exercise Price


Term (Years)


Value(In thousands)Outstanding, January 31, 2007


20,188,177


$
0.11 - 42.88


$
7.48



5.47


$
26,669Granted


265,000



9.31 - 9.69



9.51Exercised


(1,928,374
)


0.11 - 8.68



4.73Canceled


(1,894,040
)


3.83 - 31.50



14.94Outstanding, January 31, 2008


16,630,763


$
0.11 - 42.88


$
7.05



4.76


$
51,072Exercisable, January 31, 2008


12,335,123


$
0.11 - $42.88


$
7.23



4.36


$
39,940Vested and Expected to Vest, January 31, 2008(1)


15,974,771






$
7.08



4.72


$
49,365Exercisable, January 31, 2007


14,315,877


$
0.11 - $42.88


$
7.94     (1)
    
    This represents the number of vested options as of
    January 31, 2008 plus the number of unvested options as of
    January 31, 2008 that are expected to vest as adjusted to
    reflect an estimated forfeiture rate of 11.6%. The Company
    recognizes expense incurred under SFAS 123(R) on a straight
    line basis. Due to the Companys vesting schedule, expense
    is incurred on options that have not yet vested but which are
    expected to vest in a future period. The options for which
    expense has been incurred but have not yet vested are included
    above as options expected to vest.  in-the-money
   B-38




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Outstanding


ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageNumber of


Contractual


Exercise


Number of


ExerciseRange of Exercise Prices

Shares


Life (Years)


Price


Shares


Price$ 0.11 - $ 3.30


465,490



4.17


$
2.49



465,490


$
2.49$ 3.37 - $ 3.66


741,297



4.83



3.63



741,297



3.63$ 3.72 - $ 4.06


4,059,208



4.56



4.06



4,059,208



4.06$ 4.07 - $ 6.12


1,687,801



4.78



5.68



1,161,747



5.54$ 6.18 - $ 6.84


6,417,815



5.34



6.40



2,904,479



6.38$ 6.94 - $11.01


1,058,559



4.48



9.61



802,309



9.63$11.32 - $16.44


1,426,325



4.24



12.84



1,426,325



12.84$17.13 - $42.88


774,268



2.63



23.06



774,268



23.06$ 0.11 - $42.88


16,630,763



4.76


$
7.05



12,335,123


$
7.23       (b)
    Employee
    Share Purchase Plan    (10)
    Credit
    Facilities   B-39




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             B-40




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Fiscal 2009

$
2,000Fiscal 2010


2,000Fiscal 2011


2,000Fiscal 2012


2,000Fiscal 2013


2,000Thereafter


189,000Total

$
199,000   (11)
    Derivative
    Instruments and Hedging Agreements  Accounting for Derivative Instruments and Hedging
    Activities
       B-41




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (12)
    Employee
    Benefit Plan    (13)
    Disclosures
    About Segments of an Enterprise   B-42




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended January 31, 2006Multi-Modal


Retail Certification


Combined(In thousands)Revenues

$
201,236


$
14,331


$
215,567Cost of revenues


25,103



204



25,307Cost of revenues  amortization of intangible
    assets


6,939







6,939Gross profit


169,194



14,127



183,321Operating expenses:Research and development


39,172







39,172Selling and marketing


85,662



2,776



88,438General and administrative


25,377



399



25,776Legal settlements (insurance recoveries)


(17,710
)






(17,710
)Amortization of intangible assets


2,174







2,174Restructuring


123



518



641Restatement:SEC investigation


1,988







1,988Other professional fees










Total operating expenses


136,786



3,693



140,479Operating income

$
32,408


$
10,434


$
42,842Supplemental segment disclosures
    Provision for income taxes


9,130







9,130Depreciation, amortization and stock based compensation expense

$
15,212


$
17


$
15,229     As of January 31, 2006Multi-Modal


Retail Certification


CombinedCurrent assets, net

$
186,295


$



$
186,295Property and equipment, net


10,231







10,231Goodwill


93,929







93,929Other assets


9,447







9,477Total consolidated assets

$
299,902


$



$
299,902Current liabilities

$
189,091


$
5,222


$
194,313Long-term liabilities


3,317







3,317Total liabilities


192,408



5,222



197,630Stockholders equity


107,494



(5,222
)


102,272Total consolidated liabilities and stockholders equity

$
299,902


$



$
299,902Supplemental segment disclosuresCapital expenditures

$
6,423


$



$
6,423   B-43




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended January 31, 2007Multi-Modal


Retail Certification


Combined(In thousands)Revenues

$
220,150


$
5,022


$
225,172Cost of revenues


26,601







26,601Cost of revenues  amortization of intangible
    assets


4,422







4,422Gross profit


189,127



5,022



194,149Operating expenses:Research and development


40,776







40,776Selling and marketing


90,875



19



90,894General and administrative


27,743



(8
)


27,735Amortization of intangible assets


1,652







1,652Restructuring


74



(48
)


26Restatement:SEC investigation


898







898Other professional fees










Total operating expenses


162,018



(37
)


161,981Operating income

$
27,109


$
5,059


$
32,168Supplemental segment disclosuresProvision for income taxes


11,951







11,951Depreciation, amortization and share-based compensation expense

$
17,233


$



$
17,233     As of January 31, 2007Multi-Modal


Retail Certification


CombinedCurrent assets, net

$
240,226


$
544


$
240,770Property and equipment, net


9,672







9,672Goodwill


83,171







83,171Other assets


9,357







9,357Total consolidated assets

$
342,426


$
544


$
342,970Current liabilities

$
202,151


$
485


$
202,636Long-term liabilities


2,405







2,405Total liabilities


204,556



485



205,041Stockholders equity


137,870



59



137,929Total consolidated liabilities and stockholders equity

$
342,426


$
544


$
342,970Supplemental segment disclosuresCapital expenditures

$
5,519


$



$
5,519  B-44




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Geographical
    Reporting
      Year Ended January 31,2006


2007


2008Revenues:United States

$
168,525


$
175,483


$
217,670United Kingdom


22,838



26,030



33,082Canada


9,147



9,595



11,090Europe, excluding UK


4,793



2,001



3,538Australia/New Zealand


7,691



8,963



12,640Other (Countries less than 5% individually, by region)


2,573



3,100



3,203All Foreign Locations


47,042



49,689



63,553Total revenues

$
215,567


$
225,172


$
281,223     (14)
    Prepaid
    Expenses and Other Current Assets    Year EndedJanuary 31,2007


2008Prepaid commissions and recoverable sales draw


14,011



18,827Other


8,204



10,234Total prepaid expenses and other current assets

$
22,215


$
29,061   (15)
    Other
    Assets    Year Ended January 31,2007


2008Note receivable  long term (See Note 5)






3,507Debt financing cost  long term (See Note 10)






4,126Other


2,962



97Total other assets

$
2,962


$
7,730  B-45




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (16)
    Accrued
    Expenses  Current    Year EndedJanuary 31,2007


2008Professional fees


2,639



5,308Sales tax payable/VAT payable


4,405



4,366Accrued royalties


3,693



6,892Accrued litigation settlements


15,250



Other accrued liabilities


9,440



12,941Total accrued expenses

$
35,427


$
29,507   (17)
    Other
    Long Term Liabilities    Year Ended January 31,2007


2008Merger accrual  long term






5,443Interest rate swap liability






3,467Other


2,405



299Total other long-term liabilities

$
2,405


$
9,209   (18)
    Valuation &
    Qualifying Accounts  Allowance
    for Doubtful Accounts (amounts in thousands)
  Balance at


Net provision





BalanceBeginning


added/(credited





at Endof Period


without utilization)


Write-offs


of PeriodYear ended January 31, 2006

$
1,383


$
254


$
(850
)

$
787Year ended January 31, 2007

$
787


$
(452
)

$
(129
)

$
206Year ended January 31, 2008

$
206


$
242


$
(2
)

$
446   (19)
    Share
    Repurchase Program     B-46




---



##### Table of Contents



SKILLSOFT
    PUBLIC LIMITED COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (20)
    Concentration
    of Suppliers    (21)
    Quarterly
    Statement of Operation Information  Quarterly
    Operating Results for Fiscal Years Ended January 31, 2008
    and 2007 (unaudited)
  The following table sets forth, for the periods indicated,
    certain financial data of SkillSoft PLC
  Q1 2008


Q2 2008


Q3 2008


Q4 2008(In thousands, except per share data)Revenues

$
57,140


$
71,469


$
75,124


$
77,490Gross Profit


50,114



61,007



65,102



66,941Income from continuing operations


7,489



11,864



6,176



34,200Net income

$
7,489


$
12,388


$
5,825


$
34,297Basic  continuing operations

$
0.07


$
0.11


$
0.06


$
0.33Basic  discontinued operations






0.01



(0.00
)


0.00$
0.07


$
0.12


$
0.06


$
0.33Diluted  continuing operations

$
0.07


$
0.11


$
0.06


$
0.31Diluted  discontinued operations






0.00



(0.00
)


0.00$
0.07


$
0.11


$
0.05


$
0.31   Q1 2007


Q2 2007


Q3 2007


Q4 2007(In thousands, except per share data)Revenues

$
54,653


$
55,734


$
57,135


$
57,650Net income

$
4,053


$
4,825


$
7,084


$
8,191Basic and dilutive income per share

$
0.04


$
0.05


$
0.07


$
0.08  B-47




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Title2
.1

Agreement and Plan of Merger, dated as of June 10, 2002, by
    and among SmartForce Public Limited Company, SkillSoft
    Corporation and Slate Acquisition Corp. (Incorporated by
    reference to Exhibit 2.1 to SkillSoft PLCs Current
    Report on
    Form 8-K
    dated June 14, 2002 (File
    No. 000-25674)).2
.2

Stock and Asset Purchase Agreement among T.N.H. France SARL,
    T.N.H. Holdings GmbH, The Thomson Corporation (Australia) Pty
    Ltd, Thomson Information and Solutions Limited, Thomson Global
    Resources, Thomson Learning Inc., SkillSoft Public Limited
    Company and SkillSoft Corporation, dated October 25, 2006
    (Incorporated by reference to Exhibit 2.1 to SkillSoft
    PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    October 26, 2006 (File
    No. 000-25674)).2
.3

Side Letter to Purchase Agreement, dated as of May 14,
    2007, by and among SkillSoft Public Limited Company, SkillSoft
    Corporation, Thompson Learning Inc., Thomson Global Resources,
    T.N.H. France SARL, T.N.H. Holdings GmbH, The Thomson
    Corporation (Australia) Pty Ltd., and Thomson
    Information & Solutions Limited (Incorporated by
    reference to Exhibit 2.2 of SkillSoft PLCs Current
    Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    May 14, 2007 (File
    No. 000-25674)).3
.1

Memorandum of Association of SkillSoft PLC as amended on
    March 24, 1992, March 31, 1995, April 28, 1998,
    January 26, 2000, July 10, 2001, September 6,
    2002 and November 19, 2002 (Incorporated by reference to
    Exhibit 3.1 to SkillSoft PLCs Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended October 31, 2002 as filed with
    the Securities and Exchange Commission on January 21, 2003
    (File
    No. 000-25674)).3
.2

Articles of Association of SkillSoft PLC as amended on
    July 6, 1995, April 28, 1998, January 26, 2000,
    July 10, 2001, September 6, 2002 and November 19,
    2002 (Incorporated by reference to Exhibit 3.2 to SkillSoft
    PLCs Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended October 31, 2002 as filed with
    the Securities and Exchange Commission on January 21, 2003
    (File
    No. 000-25674)).4
.1

Specimen certificate representing the ordinary shares of
    SkillSoft PLC (Incorporated by reference to Exhibit 4.1 to
    SkillSoft PLCs Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2003 as filed with
    the Securities and Exchange Commission on April 29, 2003
    (File
    No. 000-25674)).4
.2

Amended and Restated Deposit Agreement (including the form of
    American Depositary Receipt), dated as of April 13, 1995 as
    amended and restated as of September 4, 2002, among
    SkillSoft PLC, The Bank of New York, as Depositary, and each
    Owner and Beneficial Owner from time to time of American
    Depositary Receipts issued thereunder (Incorporated by reference
    to Exhibit 4.1 to SkillSoft PLCs Current Report on
    Form 8-K
    dated November 14, 2002 (File
    No. 000-256740)).4
.3

Amended and Restated Restricted Deposit Agreement (including the
    form of American Depositary Receipt), dated as of
    November 30, 1995 and amended and restated as of
    September 4, 2002, among SkillSoft PLC, The Bank of New
    York, as Depositary, and each Owner and Beneficial Owner from
    time to time of American Depositary Receipts issued thereunder
    (Incorporated by reference to Exhibit 4.2 to SkillSoft
    PLCs Current Report on
    Form 8-K
    dated November 14, 2002 (File
    No. 000-25674)).4
.4

Restricted Deposit Agreement(B) dated as of June 8,
    1998 and amended and restated as of September 4, 2002 among
    SkillSoft PLC, The Bank of New York, and the owners and
    beneficial owners of Restricted American Depositary Receipts
    (Incorporated by reference to Exhibit 4.3 to SkillSoft
    PLCs Current Report on
    Form 8-K
    dated November 14, 2002 (File
    No. 000-25674)).10
.1**

1990 Share Option Scheme (Incorporated by reference to
    Exhibit 10.1 to SkillSoft PLCs Registration Statement
    on
    Form F-1
    declared effective with the Securities and Exchange Commission
    on April 13, 1995 (File
    No. 333-89904)).10
.2**

1994 Share Option Plan (Incorporated be reference to
    Exhibit 10.2 to SkillSoft PLCs Registration Statement
    on
    Form F-1
    declared effective with the Securities and Exchange Commission
    on April 13, 1995 (File
    No. 333-89904)).10
.3**

Form of Indemnification Agreement between CBT Systems USA, Ltd.
    (formerly, Thornton Holdings, Ltd.) and its directors and
    officers dated as of April 1995 (Incorporated by reference to
    Exhibit 10.5 to SkillSoft PLCs Registration Statement
    on
    Form F-1
    declared effective with the Securities and Exchange Commission
    on April 13, 1995 (File
    No. 333-89904)).




---



##### Table of Contents



ExhibitNo.

Title10
.4**

Form of Indemnification Agreement between SmartForce (USA) and
    its directors and officers dated as of September 6, 2002
    (Incorporated by reference to Exhibit 10.5 to SkillSoft
    PLCs Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2003 as filed with
    the Securities and Exchange Commission on April 29, 2003
    (File
    No. 000-25674)).10
.5**

1996 Supplemental Stock Plan (Incorporated by reference to
    Exhibit 10.3 to SkillSoft PLCs Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended October 31, 2006 as filed with
    the Securities and Exchange Commission on December 8, 2006
    (File
    No. 000-25674)).10
.6**

2002 Share Option Plan, as amended (Incorporated by
    reference to Exhibit 10.2 to SkillSoft PLCs Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended October 31, 2006 as filed with
    the Securities and Exchange Commission on December 8, 2006
    (File
    No. 000-25674)).10
.7**

2001 Outside Director Option Plan, as amended (Incorporated by
    reference to Exhibit 10.1 to SkillSoft PLCs Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended October 31, 2007 as filed with
    the Securities and Exchange Commission on December 10, 2007
    (File
    No. 000-25674)).10
.8**

Employment Agreement dated June 10, 2002 between SkillSoft
    PLC and Charles E. Moran (Incorporated by reference to
    Exhibit 10.31 to SkillSoft PLCs Amendment No. 1
    to Registration Statement on
    Form S-4
    as filed with the Securities and Exchange Commission on
    July 30, 2002 (File
    No. 333-90872)).10
.9**

Employment Agreement dated as of June 10, 2002 between
    SkillSoft PLC and Jerald A. Nine, Jr. (Incorporated by reference
    to Exhibit 10.33 to SkillSoft PLCs Amendment
    No. 1 to Registration Statement on
    Form S-4
    as filed with the Securities and Exchange Commission on
    July 30, 2002 (File
    No. 333-90872)).10
.10

Registration Rights Agreement dated as of June 10, 2002
    between SkillSoft PLC and Warburg Pincus Ventures, L.P.
    (Incorporated by reference to Exhibit 10.27 to SkillSoft
    PLCs Amendment No. 1 to Registration Statement on
    Form S-4
    as filed with the Securities and Exchange Commission on
    July 30, 2002 (File
    No. 333-90872)).10
.11**

Employment Agreement dated January 12, 1998 between
    SkillSoft Corporation and Mark A. Townsend (Incorporated by
    reference to Exhibit 10.15 to SkillSoft PLCs Annual
    Report on
    Form 10-K
    for the fiscal year ended January 31, 2003 as filed with
    the Securities and Exchange Commission on April 29, 2003
    (File
    No. 000-25674)).10
.12**

Employment Agreement dated January 12, 1998 between
    SkillSoft Corporation and Thomas J. McDonald (Incorporated by
    reference to Exhibit 10.16 to SkillSoft PLCs Annual
    Report on
    Form 10-K
    for the fiscal year ended January 31, 2003 as filed with
    the Securities and Exchange Commission on April 29, 2003
    (File
    No. 000-25674)).10
.13**

Employment Agreement dated effective September 6, 2002
    between SkillSoft PLC and Colm Darcy (Incorporated by reference
    to Exhibit 10.17 to SkillSoft PLCs Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2003 as filed with
    the Securities and Exchange Commission on April 29, 2003
    (File
    No. 000-25674)).10
.14

Lease dated May 25, 2001, as amended between 1987 Tamposi
    Limited Partnership and SkillSoft Corporation (Incorporated by
    reference to Exhibit 10.15 to SkillSoft PLCs Annual
    Report on
    Form 10-K
    for the fiscal year ended January 31, 2006 as filed with
    the Securities and Exchange Commission on April 13, 2006
    (File
    No. 000-25674)).10
.15**

Indemnification Agreement, dated November 13, 2003, by and
    between SkillSoft Corporation and P. Howard Edelstein
    (Incorporated by reference to Exhibit 10.2 to SkillSoft
    PLCs Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2003 as filed with the
    Securities and Exchange Commission on December 15, 2003
    (File
    No. 000-25674)).10
.16**

Indemnification Agreement, dated March 4, 2004, by and
    between SkillSoft Corporation and William Meagher. (Incorporated
    by reference to Exhibit 10.27 to SkillSoft PLCs
    Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2004 as filed with
    the Securities and Exchange Commission on April 15, 2004
    (File
    No. 000-25674)).10
.17

Lease agreement, dated June 9, 2004, as amended, by and
    between Hewlett-Packard Company and SkillSoft Corporation
    (Incorporated by reference to Exhibit 10.19 to SkillSoft
    PLCs Annual Report on
    Form 10-K
    for the fiscal year ended January 31, 2006 as filed with
    the Securities and Exchange Commission on April 13, 2006
    (File
    No. 000-25674)).




---



##### Table of Contents



ExhibitNo.

Title10
.18

Pledge Agreement, dated January 31, 2007, by and between
    Silicon Valley Bank and SkillSoft Corporation (Incorporated by
    reference to Exhibit 10.19 to SkillSoft PLCs Annual
    Report on
    Form 10-K
    for the fiscal year ended January 31, 2007 as filed with
    the Securities and Exchange Commission on April 13, 2007
    (File
    No. 000-25674)).10
.19**

Form of Director Option Agreement for initial grants under the
    2001 Director Option Plan (Incorporated by reference to
    Exhibit 99.2 to SkillSoft PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    January 4, 2006 (File
    No. 000-25674)).10
.20**

Form of Director Option Agreement for subsequent grants under
    the 2001 Director Option Plan (Incorporated by reference to
    Exhibit 99.3 to SkillSoft PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    January 4, 2006 (File
    No. 000-25674)).10
.21**

Form of Option Agreement under 2002 Share Option Plan
    (Incorporated by reference to Exhibit 10.5 to SkillSoft
    PLCs Quarterly Report on
    Form 10-Q
    for the quarter ended July 31, 2004 as filed with the
    Securities and Exchange Commission on September 9, 2004
    (File
    No. 000-25674))10
.22**

Summary of Fiscal 2007 Executive Incentive Compensation Program.
    (Incorporated by reference to Exhibit 99.1 to SkillSoft
    PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    April 28, 2006 (File
    No. 000-25674)).10
.23

Release and Settlement Agreement (Incorporated by reference to
    Exhibit 10.1 to SkillSoft PLCs Quarterly Report on
    Form 10-Q
    for the quarter ended July 31, 2005 as filed with the
    Securities and Exchange Commission on September 9, 2005
    (File
    No. 000-25674)).10
.24

Credit Agreement, dated May 14, 2007, among SkillSoft PLC,
    SkillSoft Corporation, Credit Suisse, Credit Suisse Securities
    (USA) LLC, Keybank National Association, Silicon Valley Bank,
    and the lenders party thereto (Incorporated by reference to
    Exhibit 10.1 of SkillSoft PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    May 14, 2007 (File
    No. 000-25674)).10
.25

Guarantee and Collateral Agreement, dated May 14, 2007,
    among SkillSoft PLC, SkillSoft Corporation and the subsidiary
    guarantors party thereto (Incorporated by reference to
    Exhibit 10.2 of SkillSoft PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    May 14, 2007 (File
    No. 000-25674)).10
.26

Summary of Fiscal 2008 Executive Cash Incentive Compensation
    Program (Incorporated by reference to Exhibit 99.1 to
    SkillSoft PLCs Current Report on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    May 25, 2007 (File
    No. 000-25674)).21
.1

List of Significant Subsidiaries.23
.1

Consent of Ernst & Young LLP.31
.1

Certification of SkillSoft PLCs Chief Executive Officer
    pursuant to
    Rule 13a-
    14(a)/Rule 15d-14(a)
    under the Securities Exchange Act of 1934.31
.2

Certification of SkillSoft PLCs Chief Financial Officer
    pursuant to
    Rule 13a-
    14(a)/Rule 15d-14(a)
    under the Securities Exchange Act of 1934.32
.1

Certification of SkillSoft PLCs Chief Executive Officer
    pursuant to
    Rule 13a-
    14(b)/Rule 15d-14(b)
    under the Securities Exchange Act of 1934, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of SkillSoft PLCs Chief Financial Officer
    pursuant to
    Rule 13a-
    14(b)/Rule 15d-14(b)
    under the Securities Exchange Act of 1934, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.     
    
    Filed herewith.**
    
    Denotes management or compensatory plan or arrangement required
    to be filed by registrant pursuant to Item 15(c) of this
    report on Form
    10-K.