Ahead of the Learning Curve Investor Presentation Harris

Ahead of the Learning Curve Investor Presentation Harris Nesbitt Education Conference Chuck Moran, President and CEO Tom Mc. Donald, CFO September 14, 2004

Safe Harbor This presentation includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements. Factors that could cause or contribute to such differences include difficulties in integrating the organizations of Smart. Force and Skill. Soft, competitive pressures, changes in customer demands or industry standards, adverse economic conditions, loss of key personnel, litigation and other risk factors disclosed under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations - Future Operating Results” in Skill. Soft's Quarterly Report on Form 10 -Q for the quarter ended July 31, 2004, as filed with the Securities and Exchange Commission. The forward-looking statements provided by the Company in this presentation represent the Company’s views as of September 14, 2004. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forwardlooking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this presentation. 2

Skill. Soft Overview § Skill. Soft is the largest public company in the world with a sole focus on e-Learning § Uniquely positioned to help global enterprises leverage elearning for maximum impact over the long-term § Dual excellence in e-learning content & technology § Content § 60, 000+ hours of high-quality e-learning content in 15 languages § Offerings cover full spectrum of enterprise learning needs with courseware, Skill. Simulations, 24 x 7 live online mentoring and Referenceware® by Books 24 x 7® § Technology § Skill. Port, a flexible platform for customizing, delivering, managing and reporting on e-learning § Search-and-Learn™ technology gives learners an integrated view of all learning assets § Skill. Soft® Dialogue™ Virtual Classroom technology to support blended learning and rapid learning program development 3

Skill. Soft Corporate Highlights § Largest direct sales & support organization in elearning industry with approximately 200 quota carrying direct sales reps § Approximately 18% of revenue invested in R&D annually § Ownership of all major content and technology products § Systematic customer feedback process ensures market focus § Serving Global 5000 customer base* § Over 5 million registered learners * Excluding Smart. Certify Direct business unit which serves the retail market 4

Strong Cross-Industry Appeal A Sampling Of Skill. Soft’s 2, 000+ Customers Aerospace & Defense Cessna Northrop Grumman Financial Services Automotive Honda Toyota Computer Hewlett Packard NEC Consumer Products Castrol Del Monte Foods Electronic Components Aegis Flextronics Solectron Consulting & Business Services Accenture ADP Booz Allen Hamilton Deloitte IKON CSC Experion IBM SAIC Unisys ING Mellon Financial PSCU Financial Services Government US Air Force US Army Australian Government Healthcare CIGNA Humana Mc. Kesson Saint Barnabas Media Yahoo! Young & Rubicam 5 Pharmaceuticals Merck Staffing K-Force Manpower Robert Half Telecommunications Avaya Marconi TELUS

Trends in Learning – Across Our Customer Base § Learning programs are increasingly aligned with business strategy § “Speed-to-learning” more important than ever § Business metrics are superceding traditional measurement of completions and scores § Informal learning has emerged as a critical need § The ability to discover and access learning assets is just as important as the assets themselves § Blended learning is taking on a new meaning § Integration is major goal and challenge 6

How Business Professionals Naturally Learn On-the-Job Consult Reference Material The Internet Knowledge bases Ask Others Practice & Use Formal Learning Experts & mentors Practice new skills on-the-job Directed, goal oriented Managers & coaches Peers Learning from experience Refine skills over time Books, manuals & Reports Informal Learning - 70% of workplace learning* Books 24 x 7 Referenceware Search-and-Learn™ Mentoring Skill. Soft ® Dialogue™ Skill. Sims Role. Plays 7 To pursue certification, credential or degree To learn a major new skill set For career enhancement Formal Learning Courseware Collections Blended Learning Toolkits Skill. Soft ® Dialogue™ *U. S. Bureau of Labor & Statistics

Skill. Soft Multi-Modal Learning § A strategy that provides “multiple learning modalities” to meet the needs of today’s diverse enterprise § Combines an array of content types from a variety of sources (internally developed or off-the-shelf) formal and informal learning needs § Leverages sophisticated Search-and-Learn technology § Helps learners get what they need, when they need it, so they can get back to work 8

Skill. Soft Courseware Collections § Over 2, 200 business skills course titles § Market-leading depth, breadth, currency and continual reinvestment § Localized in 14 languages § Award-winning instructional design § Collection Includes Skill. Simulations, Job Aids, Skill. Briefs, Blended Learning Toolkits, 24 x 7 x 365 online mentoring for Project Management Certification § More than 2, 100 IT course titles § Over 80 major IT certification exams covered § Localized in 11 languages § Content partnerships with Cisco, Microsoft, Oracle § Includes Express Guide™ Manuals, Test. Prep Exams and 24 x 7 x 365 online mentoring for IT certifications 9 Business Solution Areas: Professional Effectiveness Management/Leadership Project Management Sales & Customer-Facing Skills Business Strategy & Operations Finance Human Resources Environmental Safety & Health Financial Services Workplace Compliance IT Solution Areas: Software Development Operating Systems & Servers Internet & Network Technologies Enterprise Database Systems Web Design Desktop Computer Skills

Books 24 x 7™ Referenceware® § Largest collection of books online and most flexible licensing model § Over 6, 200 unabridged titles § Over 2, 000 Reference. Points § 1. 1 Million pages of new content added in 2003 § Utilization in 2003 § Over 35 million pages served § Nearly 1 million hours of instant learning § Average use 16. 6 minutes/session § New in 2004 § Exec. Summaries™ Collections § Engineering. Pro™ Collection 10

Skill. Port Learning Management System § Skill. Port™: scalable, reliable, flexible § Strong management and reporting capabilities relevant to managing e-learning and blended learning programs § Fast time-to-learning, with low IT support requirements § Search-and-Learn™ provides unified discovery/view/access of all e-learning assets on system § Custom content support and localized interface § Coming in 2004: modules for managing instructor-led training and credentialing programs § A platform proving value – chosen by over 60% of our customers 11

Commitment to Interoperability § We actively work to support customers on 3 rd party LMS’s § Several hundred customers successfully using our content with 3 rd party LMS’s § All courseware architectures are AICC and SCORM certified § Skill. Soft is the only major e-learning content provider certified with SCORM § Established relationships with major LMS providers § Interoperability Lab allows testing of pre-release courseware on major LMS systems 12

Skill. Soft® Dialogue™ Newest Addition to Skill. Soft’s e-learning Solution § What It Is § Virtual classroom technology for delivering online & recorded learning events § Rapid publishing toolkit that allows customers to mix/match portions of Skill. Soft content products with their own content to create new learning events targeted to specific customer needs § Supports our customers’ need for blended learning programs § Leverages Skill. Soft’s existing assets and deep knowledge of instructional design § Available to customers in late 2004 § Enabling technology for future Skill. Soft blended learning products 13

Financial Highlights • Cash of $87 million at 7/31/2004 • Guaranteed Revenue Backlog at 1/31/04 for FY 05 of approximately $170 M or approximately 75% of FY 05 Revenue Target • Costs to support SEC investigation and re-filing of tax returns relating to the restatement of Smart. Force historical financial statements ongoing at $500 K per quarter • 65% renewal rate FY 04/CY 03 used to model FY 05/CY 04 • 121% Upgrade Rate FY 04/CY 03 used to model FY 05/CY 04 • Reseller revenue recognition based on sell through seasonality was skewed to the 4 th quarter of FY 04 • Well Positioned for Future Free Cash Flow Generation and Profitability • Updated FY 05 projected annual tax rate to 4. 5% - 6. 0% from previously projected 28% - 32%; US Fed NOL’s of $350 M • Investment of $6. 5 M in FY 05 for launch of new Virtual Classroom product offering 14

FY 2005 Cash Operating Model 15

Fiscal 2005 Target *Pro forma cash EPS (non-GAAP) represents GAAP Net Income without amortization and non-cash tax expense 16

Fiscal 2005 Tax Provision Highlights: • Skill. Soft strategy is to maximize cash by minimizing the CASH effective tax rate • Utilized $22 M of NETg settlement reducing taxable income in FY 05 • Updated FY 05 projected annual tax rate to 4. 5% - 6. 0% from previously projected 28% - 32%; US Fed NOL’s of $350 M • Acquired NOL (Smart. Force) are the oldest and must be used first (FIFO) and have an annual limitation cap • Skillsoft historic NOL’s serve to drive the effective tax rate significantly lower than acquired NOL’s • Tax benefit for acquired NOL’s utilized reduces Goodwill • For financial statement purposes Skill. Soft will provide full tax expense (noncash) on any profit sheltered by acquired NOL • Limitations on utilization of acquired NOL per year • NOL generated as Skill. Soft standalone and as a combined company after 9/6/2002 can be used against income to reduce tax expense 17

Estimated Tax Schedule Until Skillsoft fully executes on FY 05 and finalizes its outlook on FY 06, it would be premature to predict the mix of NOL utilization. 18

EPS: Diluted Shares Outstanding 19

Skill. Soft: Operating Model Poised for Cash Earnings Growth FY 05 6 -Mo Actual % Current FY 05 Fcst % (est) Target Long -term % (est) 100% 100 % GM 90% 89 -91 % R&D (FY 05 R&D Acq 2%) % 21% 19 -20 % 17 -18 S&M 45% 41 - 42 % 40 -42 % G&A 12% 11 - 12% 10 -11 % G&A† 2% 1% 10% 14 - 15% Revenue *Cash Op. Income 18 -24% * Excluded amortization of intangibles and deferred compensation † SEC Investigation & re-filing tax returns due to restatement • Approx. Revenue Growth Target: 10 - 15% Annually • Approx. EPS Growth Target: 25 - 30% Annually 20

Ahead of the Learning Curve