Financial Data and Key Metrics Changes - Bookings for Q3 were $169 million, up $12 million or 7% compared to the prior year, with year-to-date bookings at $453 million, an increase of $37 million or 9% [35] - GAAP revenue for Q3 was $171 million, with year-to-date combined GAAP revenue at $401 million; adjusted revenue for Q3 was $179 million, an increase of $10 million or 6% over the prior year, and year-to-date adjusted revenue was $521 million, an increase of $4 million or 1% [36] - GAAP net loss was $43 million for the quarter, with a year-to-date combined GAAP net loss of $104 million; Q3 adjusted EBITDA was $49 million, flat to the prior year, with a year-to-date adjusted EBITDA of $130 million, down $4 million or 3% compared to the prior year [38][39] Business Line Data and Key Metrics Changes - Bookings for Skillsoft content in Q3 were $78 million, an increase of $5 million or 6%, with year-to-date bookings at $181 million, an increase of $10 million or 6% [41] - Bookings for Global Knowledge in Q3 were $62 million, an increase of $6 million or 11%, with year-to-date bookings at $190 million, an increase of $29 million or 18% [44] - SumTotal bookings were $29 million, an increase of $1 million or 3%, with year-to-date bookings at $82 million, a decrease of $2 million [45] Market Data and Key Metrics Changes - The addressable market for corporate digital learning is estimated to be $28 billion, growing at 10% annually, with 76% of IT decision-makers facing critical skills gaps [22][20] - 56% of IT managers plan to address skills gaps with training, indicating a strong demand for learning solutions [21] Company Strategy and Development Direction - The company is focused on six key pillars for growth: content leadership, platform leadership, go-to-market leadership, operational excellence, disciplined M&A, and a culture of leadership and learning [23] - The migration to the Percipio platform is on track, with 86% of annual recurring revenue on Percipio or dual deployment, up from 81% last quarter [17][26] - The company plans to continue investing in driving top-line growth, both organically and through M&A [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the size and growth of the corporate digital learning market and the company's ability to execute its strategy [15] - The company is raising its bookings outlook for the year to $700 million to $720 million and increasing the bottom end of its adjusted revenue outlook to $685 million to $700 million [47][48] Other Important Information - The company has made significant progress in integrating content from Skillsoft and Global Knowledge, more than doubling its tech and dev collection to 8,000 courses [25] - The company has entered into strategic alliances with partners like Udemy and Good Habits to enhance its content offerings [19] Q&A Session Summary Question: On Global Knowledge's growth trajectory - Management noted that while easier comparisons from COVID contributed to growth, Global Knowledge is on a growth trajectory with improved margins due to a shift to virtual training [55] Question: On sales hiring and team performance - Sales hiring has gone well, with a focus on training and development rather than increasing the size of the salesforce [63][64] Question: On bookings increase and guidance - Management confirmed that both new customers and existing customers are contributing to the increase in bookings, with dollar retention rates moving up [68] Question: On demand driven by turnover and skills gaps - Higher turnover is creating a need for learning and development, which is seen as critical for employee retention and filling skills gaps [71][72] Question: On competitive dynamics - Management expressed confidence in the competitive environment, highlighting the company's scale and integration of offerings as key advantages [80][82]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2021 or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-38960 Skillsoft Corp. (Exact name of registrant as specified in its charter) Delaware 83-43883 ...

PART I — FINANCIAL INFORMATION - UNAUDITED [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Skillsoft Corp.'s unaudited condensed consolidated financial statements are presented, segmented by Successor and Predecessor periods due to recent business combinations and reorganization [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show significant asset and liability increases in the Successor period, driven by goodwill, intangible assets, and warrant liabilities from business combinations Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :---------------------- | :------------------------ | :----------------------------------- | | Cash and cash equivalents | $90,772 | $71,479 | | Accounts receivable, net | $120,980 | $179,784 | | Total current assets | $275,078 | $284,553 | | Goodwill | $761,177 | $495,004 | | Intangible assets, net | $946,731 | $728,633 | | Total assets | $2,034,421 | $1,545,737 | | LIABILITIES (in thousands) | | | | Current maturities of long-term debt | $3,600 | $5,200 | | Deferred revenue | $165,900 | $257,549 | | Total current liabilities | $342,068 | $351,436 | | Long-term debt | $463,799 | $510,236 | | Warrant liabilities | $28,525 | $900 | | Total liabilities and shareholders' equity | $2,034,421 | $1,545,737 | [Condensed Consolidated Statement of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) Statements of operations show net losses across all periods, with the Successor period reporting $57.9 million in revenue and a $37.5 million net loss due to substantial operating expenses Condensed Consolidated Statement of Operations (in thousands) | (in thousands) | Successor (June 12, 2021 to July 31, 2021) | Predecessor (SLH) (May 1, 2021 to June 11, 2021) | Predecessor (SLH) (Feb 1, 2021 to June 11, 2021) | Predecessor (PL) (Three months ended July 31, 2020) | Predecessor (PL) (Six months ended July 31, 2020) | | :--------------- | :----------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :----------------------------------------------- | | Total revenues | $57,912 | $47,935 | $139,636 | $116,835 | $235,164 | | Total operating expenses | $107,525 | $56,855 | $176,259 | $118,019 | $574,093 | | Operating loss | $(49,613) | $(8,920) | $(36,623) | $(1,184) | $(338,929) | | Net loss | $(37,535) | $(11,859) | $(49,264) | $(70,981) | $(504,883) | | Loss per share (Successor) | $(0.28) | * | * | * | * | [Condensed Consolidated Statement of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Loss) Statements of comprehensive loss reflect a comprehensive loss across all periods, mirroring net loss with additional foreign currency adjustments Condensed Consolidated Statement of Comprehensive Loss (in thousands) | (in thousands) | Successor (June 12, 2021 to July 31, 2021) | Predecessor (SLH) (May 1, 2021 to June 11, 2021) | Predecessor (SLH) (Feb 1, 2021 to June 11, 2021) | Predecessor (PL) (Three months ended July 31, 2020) | Predecessor (PL) (Six months ended July 31, 2020) | | :--------------- | :----------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :----------------------------------------------- | | Net loss | $(37,535) | $(11,859) | $(49,264) | $(70,981) | $(504,883) | | Other comprehensive income (loss) — Foreign currency adjustment, net of tax | $906 | $(202) | $(431) | $(1,731) | $(2,360) | | Comprehensive loss | $(36,629) | $(12,061) | $(49,695) | $(72,712) | $(507,243) | [Condensed Consolidated Statement of Stockholders' (Deficit) Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20(Deficit)%20Equity) Stockholders' equity reflects significant changes from the Skillsoft Merger and equity issuances, with Successor period equity increasing to **$1,060.7 million** from paid-in capital Condensed Consolidated Statement of Stockholders' (Deficit) Equity (in thousands) | (in thousands) | Balance June 11, 2021 (Predecessor (SLH)) | Balance June 12, 2021 (Successor) | Balance July 31, 2021 (Successor) | | :--------------- | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Total Shareholders' Equity (Deficit) | $530,275 | $105,027 | $1,060,675 | | Key Equity Changes (Successor Period): | | | | | Issuance of shares, PIPE Investment | — | — | $608,166 | | Issuance of shares, Skillsoft merger consideration | — | — | $306,375 | | Reclassify Public Warrants to equity | — | — | $56,120 | | Net loss | $(11,859) | $(37,535) | $(37,535) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements highlight significant investing and financing activities in the Successor period, driven by acquisitions and related debt and equity financing, with minimal operating cash Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Successor (June 12, 2021 to July 31, 2021) | Predecessor (SLH) (Feb 1, 2021 to June 11, 2021) | Predecessor (PL) (Six months ended July 31, 2020) | | :--------------- | :----------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $738 | $33,811 | $11,573 | | Net cash used in investing activities | $(562,563) | $(2,991) | $(6,386) | | Net cash provided by financing activities | $379,106 | $14,907 | $59,800 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(182,969) | $45,930 | $62,723 | | Cash, cash equivalents and restricted cash, end of period | $105,514 | $120,373 | $96,527 | - Significant cash outflows for investing activities in the Successor period were due to the acquisitions of Skillsoft (**$386.0 million**), Global Knowledge (**$156.9 million**), and Pluma (**$18.6 million**)[24](index=24&type=chunk) - Financing activities in the Successor period included **$464.3 million** from Term Loan proceeds and **$530.0 million** from PIPE equity investment, partially offset by **$605.6 million** in repayments of First and Second Out loans[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's organization, accounting policies, and impact of recent business combinations, clarifying reporting periods, intangible assets, debt, equity, and revenue recognition [(1) Organization and Description of Business](index=12&type=section&id=(1)%20Organization%20and%20Description%20of%20Business) Skillsoft Corp. (Successor) formed on June 11, 2021, through mergers and acquisitions, provides enterprise learning solutions via its AI-driven Percipio platform, with financial reporting segmented by period - Skillsoft Corp. (Successor) was formed on June 11, 2021, via the merger of Churchill Capital Corp II and Software Luxembourg Holding S.A., and the acquisition of Global Knowledge[28](index=28&type=chunk)[30](index=30&type=chunk) - The company offers enterprise learning solutions through Skillsoft, Global Knowledge, and SumTotal brands, focusing on leadership, business, technology, developer, and compliance curricula, delivered via the AI-driven Percipio platform[35](index=35&type=chunk) - Financial statements are presented for 'Successor' (post-June 11, 2021), 'Predecessor (SLH)' (Aug 28, 2020 to June 11, 2021), and 'Predecessor (PL)' (prior to Aug 28, 2020) periods[32](index=32&type=chunk)[34](index=34&type=chunk) [(2) Summary of Significant Accounting Policies](index=16&type=section&id=(2)%20Summary%20of%20Significant%20Accounting%20Policies) Key accounting policies cover stock-based compensation, derivative liabilities, and contract acquisition costs, with a policy change in the Successor period for amortizing contract acquisition costs - Stock-based compensation expense is recognized over the service period, using the Black-Scholes model for options and an accelerated attribution method for market/performance-conditioned RSUs[42](index=42&type=chunk) - Derivative liabilities are classified based on specific instrument terms and accounting guidance (ASC 480, ASC 815), with changes in fair value recognized in the statements of operations for liability-classified instruments[43](index=43&type=chunk)[44](index=44&type=chunk) - For the Successor period, the company no longer applies the practical expedient for contract acquisition costs, meaning costs are amortized over the expected customer relationship period (3-5 years for new customers) or contractual term for renewals, rather than expensed as incurred if the amortization period is one year or less[45](index=45&type=chunk) [(3) Business Combinations](index=16&type=section&id=(3)%20Business%20Combinations) Skillsoft completed three acquisitions (Skillsoft Legacy, Global Knowledge, Pluma) using the acquisition method, resulting in significant goodwill and intangible assets, with preliminary purchase price allocations subject to refinement - On June 11, 2021, Churchill Capital Corp II merged with Software Luxembourg Holding S.A. (Skillsoft Legacy), with Churchill determined as the accounting acquirer[46](index=46&type=chunk)[47](index=47&type=chunk) Skillsoft Legacy Acquisition Purchase Consideration (in thousands) | Description | Amount | | :---------- | :----- | | Class A Common Stock issued | $258,000 | | Class B Common Stock issued | $48,375 | | Cash payments | $505,000 | | Second Out Term Loan | $20,000 | | Cash settlement of seller transaction costs | $1,308 | | **Total Purchase Price** | **$832,683** | Global Knowledge Acquisition Purchase Consideration (in thousands) | Description | Amount | | :---------- | :----- | | Cash consideration | $170,199 | | Warrants Issued | $14,000 | | Joinder Term Loans | $70,000 | | Cash settlement of seller transaction costs | $4,251 | | **Total Purchase Price** | **$258,450** | - On June 30, 2021, Skillsoft acquired Pluma, Inc. for **$22 million**, enhancing its leadership development portfolio and adding individualized coaching, resulting in **$11.9 million** of goodwill and **$10.0 million** of identified intangible assets[63](index=63&type=chunk) - The preliminary purchase price allocations for all acquisitions are subject to refinement during the measurement period, as the company continues to refine valuations of intangible assets, deferred income taxes, and liabilities[66](index=66&type=chunk) [(4) Intangible Assets](index=23&type=section&id=(4)%20Intangible%20Assets) Intangible assets increased to **$946.7 million** (net) due to business combinations, with annual impairment testing; significant impairment charges were recorded in the Predecessor period due to COVID-19 and capital structure uncertainty Intangible Assets (in thousands) | Description | July 31, 2021 (Successor) Net Carrying Amount | January 31, 2021 (Predecessor (SLH)) Net Carrying Amount | | :------------------------------ | :-------------------------------------- | :--------------------------------------------------- | | Developed software/courseware | $301,132 | $241,089 | | Customer contracts/relationships | $378,821 | $275,873 | | Vendor relationships | $39,360 | — | | Trademarks and trade names | $7,614 | $5,845 | | Publishing rights | $39,981 | $32,267 | | Backlog | $69,723 | $82,059 | | Skillsoft trademark | $84,700 | $91,500 | | Global Knowledge trademark | $25,400 | — | | **Total** | **$946,731** | **$728,633** | Amortization Expense (in thousands) | Period | Amount | | :----------------------------------------- | :------- | | June 12, 2021 - July 31, 2021 (Successor) | $20,023 | | May 1, 2021 - June 11, 2021 (Predecessor SLH) | $16,000 | | Feb 1, 2021 - June 11, 2021 (Predecessor SLH) | $50,902 | | Three months ended July 31, 2020 (Predecessor PL) | $12,800 | | Six months ended July 31, 2020 (Predecessor PL) | $30,100 | - In the Predecessor (PL) period ended April 30, 2020, the company recorded **$332.4 million** in goodwill and intangible asset impairment charges due to the COVID-19 pandemic and an over-leveraged capital structure, including **$62.3 million** for SumTotal definite-lived intangible assets, **$92.2 million** for the Skillsoft trade name, **$107.9 million** for Skillsoft goodwill, and **$70.0 million** for SumTotal goodwill[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) [(5) Taxes](index=26&type=section&id=(5)%20Taxes) Tax benefits were recorded across all periods due to pretax losses, with the Successor period recognizing a **$5.5 million** benefit on a **$43.0 million** pretax loss, influenced by valuation allowance changes and foreign rates Tax Benefit on Pretax Loss (in thousands) | Period | Pretax Loss | Tax Benefit | | :----------------------------------------- | :---------- | :---------- | | June 12, 2021 - July 31, 2021 (Successor) | $(43,039) | $(5,504) | | May 1, 2021 - June 11, 2021 (Predecessor SLH) | $(13,478) | $(1,619) | | Feb 1, 2021 - June 11, 2021 (Predecessor SLH) | $(52,972) | $(3,708) | | Three months ended July 31, 2020 (Predecessor PL) | $(71,890) | $(909) | | Six months ended July 31, 2020 (Predecessor PL) | $(514,683) | $(9,800) | [(6) Prepaid Expenses and Other Current Assets](index=27&type=section&id=(6)%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets increased to **$48.6 million** as of July 31, 2021, from **$30.3 million**, driven by higher prepaid expenses, insurance, and new course material Prepaid Expenses and Other Current Assets (in thousands) | Item | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :-------------------------- | :------------------------ | :----------------------------------- | | Deferred commission costs – current | $2,179 | $3,147 | | Reclaimable tax | $9,842 | $9,927 | | Prepaid software maintenance costs | $10,020 | $8,587 | | Prepaid royalties | $2,981 | $2,958 | | Prepaid insurance costs | $6,270 | $752 | | Prepaid employee benefits | $1,570 | $1,620 | | Other Prepaid expenses | $9,506 | $2,336 | | Course material | $1,333 | — | | Other receivables | $1,834 | $964 | | Other current asset | $3,049 | $35 | | **Total** | **$48,584** | **$30,326** | [(7) Other Assets](index=27&type=section&id=(7)%20Other%20Assets) Other assets slightly decreased to **$8.1 million** as of July 31, 2021, from **$8.6 million**, primarily due to reduced non-current deferred commission costs Other Assets (in thousands) | Item | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :-------------------------- | :------------------------ | :----------------------------------- | | Deferred commission costs – non-current | $2,933 | $4,437 | | Deposits | $3,043 | $1,618 | | Other | $2,116 | $2,581 | | **Total** | **$8,092** | **$8,636** | [(8) Accrued Expenses](index=27&type=section&id=(8)%20Accrued%20Expenses) Accrued expenses significantly increased to **$62.5 million** as of July 31, 2021, from **$23.1 million**, primarily due to accrued acquisition-related costs and refundable payments Accrued Expenses (in thousands) | Item | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :-------------------------- | :------------------------ | :----------------------------------- | | Professional fees | $8,881 | $8,832 | | Accrued sales tax/VAT | $6,583 | $5,379 | | Accrued royalties | $1,580 | $2,152 | | Accrued tax | $5,581 | $2,634 | | Accrued interest | $1,168 | $491 | | Accrued acquisition related costs | $14,526 | — | | Refundable payments | $3,597 | — | | Other accrued liabilities | $20,557 | $3,637 | | **Total** | **$62,473** | **$23,125** | [(9) Restructuring](index=27&type=section&id=(9)%20Restructuring) Restructuring charges and credits were recorded for strategic initiatives, including a **$0.3 million** charge in the Successor period and a **$0.7 million** credit in the Predecessor (SLH) period - Restructuring charges of **$0.3 million** were recorded in the Successor period (June 12, 2021 to July 31, 2021)[90](index=90&type=chunk) - A restructuring credit of **$0.7 million** was recorded in the Predecessor (SLH) period (February 1, 2021 to June 11, 2021)[90](index=90&type=chunk) - Restructuring charges of **$0.8 million** and **$1.1 million** were recorded for the three and six months ended July 31, 2020 (Predecessor PL), primarily for employee severance costs[90](index=90&type=chunk) [(10) Leases, Commitments and Contingencies](index=29&type=section&id=(10)%20Leases,%20Commitments%20and%20Contingencies) ROU assets and lease liabilities of **$24.6 million** and **$25.8 million** were recognized for legacy leases, with a weighted-average operating lease term of **5.3 years**; no material legal proceedings are currently active - ROU assets and lease liabilities of **$24.6 million** and **$25.8 million**, respectively, were recognized for Skillsoft and Global Knowledge's legacy lease agreements at the acquisition date[91](index=91&type=chunk) - The weighted-average remaining lease term for operating leases is **5.3 years** as of July 31, 2021[94](index=94&type=chunk) Future Minimum Lease Payments (in thousands) | Fiscal Year Ended January 31 | Operating Leases | Finance Lease | | :--------------------------- | :--------------- | :------------ | | 2022 (Remaining 6 months) | $5,033 | $905 | | 2023 | $8,782 | — | | 2024 | $4,457 | — | | 2025 | $3,195 | — | | 2026 | $1,396 | — | | Thereafter | $6,150 | — | | **Total future minimum lease payments** | **$29,013** | **$905** | - The company is not currently a party to any material legal proceedings, and two lawsuits related to the Skillsoft Merger were dismissed in July 2021[97](index=97&type=chunk)[98](index=98&type=chunk) [(11) Long-Term Debt](index=31&type=section&id=(11)%20Long-Term%20Debt) Long-term debt decreased to **$463.8 million** as of July 31, 2021, after refinancing with a new **$480 million** Term Loan Facility, maturing July 16, 2028, at LIBOR plus 4.75% Long-Term Debt (in thousands) | Item | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :-------------------------- | :------------------------ | :----------------------------------- | | Term Loan - current portion | $3,600 | $5,200 | | Long-term debt | $463,799 | $510,236 | - On July 16, 2021, Skillsoft Finance II entered into a **$480 million** Term Loan Facility, maturing on July 16, 2028, to refinance previous debt[106](index=106&type=chunk) - The Term Loan Facility bears interest at LIBOR (subject to a **0.75%** floor) plus **4.75%** for Eurocurrency Loans[109](index=109&type=chunk) - The company received **$464.3 million** in net proceeds from the Term Loan Facility and used it to pay down **$608.7 million** of outstanding borrowings from the Exit Credit Facility[111](index=111&type=chunk) Debt Maturity Schedule (in thousands) | Fiscal year ended January 31 | Amount | | :--------------------------- | :----- | | 2022 (remaining 6 months) | $1,200 | | 2023 | $4,800 | | 2024 | $4,800 | | 2025 | $4,800 | | 2026 | $4,800 | | Thereafter | $459,600 | | **Total payments** | **$480,000** | [(12) Long-Term Liabilities](index=33&type=section&id=(12)%20Long-Term%20Liabilities) Other long-term liabilities decreased to **$5.0 million** as of July 31, 2021, from **$6.9 million**, mainly due to a reduction in uncertain tax positions Other Long-Term Liabilities (in thousands) | Item | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :-------------------------- | :------------------------ | :----------------------------------- | | Uncertain tax positions; including interest and penalties – long-term | $4,448 | $5,794 | | Other | $597 | $1,104 | | **Total** | **$5,045** | **$6,898** | [(13) Shareholders' Equity](index=34&type=section&id=(13)%20Shareholders'%20Equity) Skillsoft Corp.'s authorized share capital as of July 31, 2021, included **375 million** Class A common shares and **10 million** preferred shares, with **133 million** Class A shares outstanding; Predecessor (SLH) underwent a 2020 reorganization - As of July 31, 2021, Skillsoft Corp. had **375,000,000** authorized Class A common shares, **3,840,000** Class C common shares, and **10,000,000** preferred shares, with **133,059,021** Class A common shares issued and outstanding[115](index=115&type=chunk) - The Predecessor (SLH) underwent a reorganization on August 27, 2020, transferring Pointwell ownership to lenders and cancelling share-based compensation plans[118](index=118&type=chunk) [(14) Warrants](index=34&type=section&id=(14)%20Warrants) The company holds both liability-classified and equity-classified warrants; Sponsor's Private Placement Warrants are liability-classified at **$28.5 million**, while Public and PIPE Private Placement Warrants are equity-classified post-merger - Private Placement Warrants held by the Sponsor (**16.3 million** shares) are classified as liabilities and measured at fair value, with a fair value of **$28.5 million** as of July 31, 2021[126](index=126&type=chunk)[147](index=147&type=chunk) - Public Warrants (**23 million** shares) and PIPE Private Placement Warrants (**16.7 million** shares) were reclassified to equity after the Skillsoft Merger on June 11, 2021, as they now meet equity classification criteria[127](index=127&type=chunk) - Global Knowledge Private Placement Warrants (**5 million** shares) and CEO Private Placement Warrants (**1 million** shares) are also equity-classified[127](index=127&type=chunk) [(15) Stock-based compensation](index=38&type=section&id=(15)%20Stock-based%20compensation) Skillsoft adopted the 2020 Omnibus Incentive Plan in June 2021, making **13.1 million** shares available; total unrecognized stock-based compensation costs were **$7.1 million** for options, **$28.1 million** for RSUs, and **$4.6 million** for PSUs - The 2020 Omnibus Incentive Plan, adopted in June 2021, initially made **13,105,902** shares available for issuance, with **7,443,086** shares remaining available as of July 31, 2021[132](index=132&type=chunk) Unrecognized Stock-based Compensation Costs (in thousands) | Award Type | Total Unrecognized Costs | Weighted-Average Recognition Period | | :--------- | :----------------------- | :---------------------------------- | | Stock Options | $7,100 | 3.9 years | | RSUs | $28,100 | 3.9 years | | PSUs | $4,600 | 1.6 years | - Stock-based compensation expense for the period from June 12, 2021, to July 31, 2021, totaled **$4.8 million**, including **$2.8 million** attributable to warrants issued to the CEO[140](index=140&type=chunk) [(16) Revenue](index=41&type=section&id=(16)%20Revenue) Successor period revenues totaled **$57.9 million**, primarily from SaaS and subscriptions; deferred revenue was **$167.6 million**, significantly impacted by fair value adjustments from recent acquisitions Revenues by Type (in thousands) | Revenue Type | Successor (June 12, 2021 to July 31, 2021) | Predecessor (SLH) (May 1, 2021 to June 11, 2021) | Predecessor (SLH) (Feb 1, 2021 to June 11, 2021) | Predecessor (PL) (Three months ended July 31, 2020) | Predecessor (PL) (Six months ended July 31, 2020) | | :-------------------------- | :----------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :----------------------------------------------- | | SaaS and subscription services | $34,534 | $40,577 | $119,233 | $100,398 | $201,492 | | Professional services | $3,060 | $5,384 | $13,495 | $10,247 | $21,189 | | Virtual, on-demand and classroom | $18,639 | — | — | — | — | | **Total net revenues** | **$57,912** | **$47,935** | **$139,636** | **$116,835** | **$235,164** | Revenues by Geographic Region (in thousands) | Region | Successor (June 12, 2021 to July 31, 2021) | Predecessor (SLH) (May 1, 2021 to June 11, 2021) | Predecessor (SLH) (Feb 1, 2021 to June 11, 2021) | Predecessor (PL) (Three months ended July 31, 2020) | Predecessor (PL) (Six months ended July 31, 2020) | | :-------------------------- | :----------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :----------------------------------------------- | | United States | $36,572 | $34,913 | $101,884 | $90,565 | $181,242 | | Europe, Middle East and Africa | $14,281 | $6,799 | $19,729 | $14,360 | $28,583 | | **Total net revenues** | **$57,912** | **$47,935** | **$139,636** | **$116,835** | **$235,164** | Deferred Revenue Activity (in thousands) | Item | Amount | | :---------------------------------------- | :------- | | Deferred revenue at January 31, 2021 (Predecessor (SLH)) | $260,584 | | Deferred revenue at June 11, 2021 (Predecessor (SLH)) | $230,398 | | Acquisition of Skillsoft and GK | $146,318 | | Billings deferred | $74,395 | | Recognition of prior deferred revenue | $(57,912) | | Acquisition of Pluma | $4,848 | | **Deferred revenue at July 31, 2021 (Successor)** | **$167,649** | [(17) Fair Value Measurements](index=42&type=section&id=(17)%20Fair%20Value%20Measurements) The company measures certain assets and liabilities at fair value, primarily liability-classified warrants, using a Level 3 hierarchy; Sponsor's Private Placement Warrants were valued at **$28.5 million** using a Black-Scholes model - The company uses a Level 3 fair value hierarchy for instruments with significant unobservable inputs, such as Private Placement Warrants – Sponsor[147](index=147&type=chunk) Fair Value of Private Placement Warrants – Sponsor (in thousands) | Date | Fair Value | | :--- | :--------- | | July 31, 2021 | $28,525 | - The fair value of these warrants is estimated using a Black-Scholes option pricing model, with key assumptions including risk-free interest rates (**0.67%** at July 31, 2021), volatility factor (**33%**), and expected lives (**4.9 years**)[150](index=150&type=chunk) [(18) Segment Information](index=43&type=section&id=(18)%20Segment%20Information) Skillsoft operates three segments: Skillsoft, SumTotal, and Global Knowledge, offering diverse learning and HCM solutions; all segments experienced operating losses in the Successor period - The company's three operating segments are Skillsoft, SumTotal, and Global Knowledge (GK)[153](index=153&type=chunk) - Skillsoft segment focuses on content learning solutions (Leadership & Business, Technology & Developer, Compliance) delivered via Percipio[155](index=155&type=chunk) - SumTotal provides unified, comprehensive SaaS talent management solutions including Talent Acquisition, Learning Management, Talent Management, and Workforce Management[156](index=156&type=chunk) - Global Knowledge offers IT and business skills training through instructor-led (in-person/virtual) and self-paced (on-demand) modalities[157](index=157&type=chunk) Segment Revenues and Operating Loss (Successor: June 12, 2021 to July 31, 2021, in thousands) | Segment | Revenues | Operating Loss | | :------ | :------- | :------------- | | Skillsoft | $23,379 | $(37,008) | | SumTotal | $9,873 | $(5,010) | | Global Knowledge | $24,660 | $(7,595) | | **Consolidated** | **$57,912** | **$(49,613)** | Segment Assets (in thousands) | Segment | July 31, 2021 (Successor) | January 31, 2021 (Predecessor (SLH)) | | :------ | :------------------------ | :----------------------------------- | | Skillsoft | $1,471,444 | $1,398,379 | | SumTotal | $196,071 | $147,358 | | Global Knowledge | $366,906 | — | | **Consolidated** | **$2,034,421** | **$1,545,737** | [(19) Net Loss Per Share](index=46&type=section&id=(19)%20Net%20Loss%20Per%20Share) The company reported a basic and diluted net loss per share of **$(0.28)** for the Successor period; potentially dilutive securities were excluded from diluted EPS due to anti-dilutive effects from net losses Net Loss Per Share (in thousands, except per share data) | Period | Net Loss | Weighted Average Common Shares Outstanding | Net Loss Per Share | | :----------------------------------------- | :------- | :----------------------------------------- | :----------------- | | June 12, 2021 - July 31, 2021 (Successor) | $(37,535) | 133,059 | $(0.28) | | May 1, 2021 - July 31, 2021 (Predecessor SLH) | $(11,859) | 4,000 | $(2.96) | | Feb 1, 2021 - July 31, 2021 (Predecessor SLH) | $(49,264) | 4,000 | $(12.32) | | Three months ended July 31, 2020 (Predecessor PL) | $(70,981) | 100.1 | $(709.10) | | Six months ended July 31, 2020 (Predecessor PL) | $(504,883) | 100.1 | $(5,043.79) | - Potentially dilutive securities, including **61,967 thousand** warrants, **2,198 thousand** stock options, and **3,465 thousand** RSUs, were excluded from diluted EPS calculations due to the anti-dilutive effect of net losses[162](index=162&type=chunk) [(20) Related Party Transactions](index=47&type=section&id=(20)%20Related%20Party%20Transactions) Predecessor (SLH) exit facility debt, financed by Class A shareholders, was repaid in July 2021; the Successor entered a strategic support agreement with its largest shareholder, with no new affiliate transactions in the period - The Predecessor's exit facility debt was financed by Class A shareholders and was fully repaid in connection with the July 2021 refinancing[163](index=163&type=chunk) - The Successor company entered a strategic support agreement with its largest shareholder for business development and investor relations, but no new affiliate transactions occurred in the period from June 11, 2021, to July 31, 2021[164](index=164&type=chunk) [(21) Subsequent Events](index=47&type=section&id=(21)%20Subsequent%20Events) All subsequent events through the Form 10-Q filing date were evaluated, with no additional disclosures required beyond those already presented in the financial statements - No subsequent events requiring disclosure have occurred between July 31, 2021, and the filing date of the Form 10-Q, beyond those already disclosed[165](index=165&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Skillsoft's financial condition and operational results, highlighting the impact of business combinations and fiscal year change, presenting combined (non-GAAP) results for comparability - Skillsoft Corp. completed a business combination on June 11, 2021, merging with Software Luxembourg Holding S.A. and acquiring Global Knowledge, and subsequently changed its fiscal year end to January 31[168](index=168&type=chunk)[169](index=169&type=chunk) - The company is a global leader in corporate digital learning, serving approximately **70%** of Fortune 1000 companies and over **45 million** learners, with solutions delivered through Percipio, Skillport, Global Knowledge, and SumTotal[170](index=170&type=chunk)[171](index=171&type=chunk) - Management presents combined (non-GAAP) financial results for the three and six months ended July 31, 2021, to provide a more meaningful comparison to prior periods, acknowledging these are not GAAP pro forma results[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [Completion of the Business Combination](index=48&type=section&id=Completion%20of%20the%20Business%20Combination) Skillsoft Corp. completed its business combination with Software Luxembourg Holding S.A. and acquired Global Knowledge on June 11, 2021, now trading as 'SKIL' on the NYSE - Skillsoft Corp. completed its business combination with Software Luxembourg Holding S.A. and acquired Global Knowledge on June 11, 2021[168](index=168&type=chunk) - The combined company operates as Skillsoft Corp. and began trading on the New York Stock Exchange under 'SKIL' on June 14, 2021[168](index=168&type=chunk) [Change in Fiscal Year](index=48&type=section&id=Change%20in%20Fiscal%20Year) Skillsoft's board approved changing the fiscal year end from December 31 to January 31, effective June 21, 2021, aligning with the pre-combination fiscal year - Skillsoft's board of directors approved a change in the company's fiscal year end from December 31 to January 31, effective June 21, 2021[169](index=169&type=chunk) [Company's Business following the Business Combination](index=48&type=section&id=Company's%20Business%20following%20the%20Business%20Combination) Post-combination, Skillsoft Corp. is a global leader in corporate digital learning, offering enterprise solutions like Percipio, Global Knowledge, and SumTotal to address skill gaps in a growing digital learning market - Skillsoft is a global leader in corporate digital learning, serving approximately **70%** of Fortune 1000 companies and over **45 million** learners globally[170](index=170&type=chunk) - Primary learning solutions include Skillsoft Percipio (AI-driven platform), Skillport (legacy platform), Global Knowledge (IT & professional skills training), and SumTotal (SaaS-based HCM solution)[171](index=171&type=chunk) - The corporate digital learning industry is experiencing rapid growth due to focus on upskilling/reskilling workforces and the accelerated shift to digital training, partly driven by the COVID-19 pandemic[173](index=173&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Skillsoft's combined results show revenue decreases of **9.4%** (three months) and **16.0%** (six months) due to fresh-start reporting and business combination adjustments, while operating expenses significantly increased from intangible asset amortization Combined (Non-GAAP) Financial Highlights (in thousands) | Item | Three Months Ended July 31, 2021 | Six Months Ended July 31, 2021 | | :---------------------------------- | :------------------------------- | :----------------------------- | | Total revenues | $105,847 | $197,548 | | Total operating expenses | $164,380 | $283,784 | | Operating loss | $(58,533) | $(86,236) | | Net loss | $(49,394) | $(86,799) | Revenue Comparison (Non-GAAP, in thousands) | Period | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :----- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Total revenues | $105,847 | $116,835 | $197,548 | $235,164 | | **Change** | **$(10,988) (-9.4%)** | | **$(37,616) (-16.0%)** | | - The decrease in GAAP revenue was primarily due to fresh-start reporting (**$5.9 million** for three months, **$25.8 million** for six months) and business combination accounting (**$22.4 million** for three and six months), partially offset by the Global Knowledge acquisition[189](index=189&type=chunk) [Revenues](index=52&type=section&id=Revenues) Skillsoft generates revenue from SaaS, subscriptions, professional services, and training, with SaaS recognized ratably and non-subscription revenue upon delivery; the United States is the largest geographic contributor - Skillsoft's revenue sources include SaaS and subscription services, software maintenance, professional services, perpetual software licenses, and virtual, on-demand, and classroom training[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - SaaS and subscription revenue is generally recognized ratably over the contract term (typically two to five years), while non-subscription revenue (e.g., classroom training) is recognized on the delivery date[186](index=186&type=chunk)[187](index=187&type=chunk) Revenue by Geographic Region (Non-GAAP, % of total revenues) | Region | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :----- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | United States | 67.5% | 77.5% | 70.1% | 77.1% | | Other Americas | 7.1% | 4.1% | 6.7% | 4.8% | | Europe, Middle East and Africa | 19.9% | 12.3% | 17.2% | 12.2% | | Asia-Pacific | 5.4% | 6.1% | 6.0% | 6.0% | Revenue by Product and Service Type (Non-GAAP, in thousands) | Product/Service Type | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :------------------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | SaaS and subscription services | $75,111 | $100,398 | $153,767 | $201,492 |\ | Virtual, on-demand and classroom | $18,639 | — | $18,639 | — |\ | **Total revenues** | **$105,847** | **$116,835** | **$197,548** | **$235,164** | [Operating expenses](index=55&type=section&id=Operating%20expenses) Total operating expenses increased **39.3%** (three months) but decreased **50.6%** (six months); the three-month rise was due to higher cost of revenues, G&A, and intangible asset amortization from acquisitions, while the six-month decrease was due to the absence of prior year impairment charges Operating Expenses (Non-GAAP, in thousands) | Expense Category | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :--------------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Cost of revenues | $39,366 | $21,618 | $63,887 | $45,831 | | Content and software development | $17,355 | $16,835 | $33,962 | $33,778 | | Selling and marketing | $35,672 | $34,033 | $64,174 | $66,769 | | General and administrative | $21,928 | $15,324 | $34,290 | $32,015 | | Amortization of intangible assets | $35,982 | $12,779 | $70,925 | $30,148 | | Impairment of goodwill and intangible assets | — | — | — | $332,376 | | Recapitalization and transaction related costs | $15,001 | $16,659 | $16,933 | $32,035 | | Restructuring | $(924) | $771 | $(387) | $1,141 | | **Total operating expenses** | **$164,380** | **$118,019** | **$283,784** | **$574,093** | [Cost of revenues](index=55&type=section&id=Cost%20of%20revenues) Cost of revenues increased **82.1%** to **$39.4 million** (three months) and **39.4%** to **$63.9 million** (six months), primarily due to Global Knowledge's expenses in compensation, royalties, and consulting Cost of Revenues Components (Non-GAAP, in thousands) | Component | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :-------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Compensation and benefits | $16,753 | $12,996 | $29,941 | $26,539 | | Royalties | $8,814 | $4,033 | $13,664 | $8,300 | | Consulting and outside services | $7,387 | $731 | $8,468 | $2,246 | | **Total cost of revenues** | **$39,366** | **$21,618** | **$63,887** | **$45,831** | - The increases were primarily a result of including Global Knowledge's expenses incurred from June 12, 2021, to July 31, 2021[194](index=194&type=chunk) [Content and software development](index=56&type=section&id=Content%20and%20software%20development) Content and software development expenses slightly increased **3.1%** to **$17.4 million** (three months) and **0.5%** to **$34.0 million** (six months), with compensation increases offset by reduced consulting due to offshore shifts Content and Software Development Expenses Components (Non-GAAP, in thousands) | Component | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :-------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Compensation and benefits | $12,374 | $10,755 | $23,182 | $21,999 | | Consulting and outside services | $3,111 | $3,950 | $6,869 | $7,627 | | **Total** | **$17,355** | **$16,835** | **$33,962** | **$33,778** | - Increases in compensation and benefits were due to higher incentive-based compensation accruals, while decreases in consulting and outside services resulted from shifting software development to offshore employees[196](index=196&type=chunk) [Selling and marketing](index=57&type=section&id=Selling%20and%20marketing) Selling and marketing expenses increased **4.8%** to **$35.7 million** (three months) but decreased **3.9%** to **$64.2 million** (six months), with the three-month rise driven by Global Knowledge's S&M compensation Selling and Marketing Expenses Components (Non-GAAP, in thousands) | Component | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :-------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Compensation and benefits | $27,019 | $25,210 | $48,230 | $48,543 | | Advertising and promotions | $4,657 | $4,737 | $8,142 | $8,137 | | Facilities and utilities | $1,751 | $2,487 | $3,454 | $5,020 | | **Total S&M expenses** | **$35,672** | **$34,033** | **$64,174** | **$66,769** | - The three-month increase in compensation and benefits was due to Global Knowledge's S&M costs, offset by Skillsoft's sales workforce reduction and deferred commission eliminations due to fresh-start reporting and business combination accounting[198](index=198&type=chunk) [General and administrative](index=58&type=section&id=General%20and%20administrative) General and administrative expenses increased **43.1%** to **$21.9 million** (three months) and **7.1%** to **$34.3 million** (six months), primarily due to Global Knowledge's G&A, executive stock-based compensation, and higher insurance General and Administrative Expenses Components (Non-GAAP, in thousands) | Component | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :-------- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Compensation and benefits | $14,685 | $11,164 | $22,375 | $23,177 | | Consulting and outside services | $3,854 | $2,665 | $6,716 | $5,620 | | Insurance | $1,556 | $299 | $1,927 | $618 | | **Total G&A expenses** | **$21,928** | **$15,324** | **$34,290** | **$32,015** | - Increases were driven by Global Knowledge's G&A expenses, stock-based compensation for executives, higher audit and tax services, and increased Directors and Officers insurance policies due to the business combination[201](index=201&type=chunk) [Amortization of intangible assets](index=58&type=section&id=Amortization%20of%20intangible%20assets) Amortization of intangible assets significantly increased **181.6%** to **$36.0 million** (three months) and **135.3%** to **$70.9 million** (six months), directly attributable to intangible assets from June 2021 business combinations Amortization of Intangible Assets (Non-GAAP, in thousands) | Period | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :----- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Amortization of intangible assets | $35,982 | $12,779 | $70,925 | $30,148 | | **Change** | **$23,203 (181.6%)** | | **$40,777 (135.3%)** | | - The increases were primarily due to intangible assets arising from the business combinations completed in June 2021[203](index=203&type=chunk) [Impairment of goodwill and intangible assets](index=59&type=section&id=Impairment%20of%20goodwill%20and%20intangible%20assets) No goodwill or intangible asset impairment charges were recorded for the combined three or six months ended July 31, 2021, contrasting with a **$332.4 million** charge in the prior year due to COVID-19 and capital structure uncertainty - No impairment of goodwill and intangible assets was recorded for the combined three or six months ended July 31, 2021[191](index=191&type=chunk) - In the six months ended July 31, 2020 (Predecessor PL), a **$332.4 million** impairment charge was recorded due to the COVID-19 pandemic's impact and uncertainty around the company's over-leveraged capital structure[191](index=191&type=chunk)[204](index=204&type=chunk)[208](index=208&type=chunk) [Recapitalization and transaction-related costs](index=59&type=section&id=Recapitalization%20and%20transaction-related%20costs) Recapitalization and transaction costs decreased **10.0%** to **$15.0 million** (three months) and **47.1%** to **$16.9 million** (six months), primarily related to the June 2021 business combination, lower than prior year Chapter 11 costs Recapitalization and Transaction-Related Costs (Non-GAAP, in thousands) | Period | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :----- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Recapitalization and transaction related costs | $15,001 | $16,659 | $16,933 | $32,035 | | **Change** | **$(1,658) (-10.0%)** | | **$(15,102) (-47.1%)** | | - Costs in 2021 relate to the June 2021 business combination, while prior year costs were for Chapter 11 filing and recapitalization efforts[209](index=209&type=chunk) [Restructuring](index=59&type=section&id=Restructuring) Restructuring recoveries of **$0.9 million** (three months) and **$0.4 million** (six months) were recorded due to severance estimate changes, contrasting with prior year charges of **$0.7 million** and **$1.1 million** for severance and lease termination Restructuring (Non-GAAP, in thousands) | Period | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :----- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Restructuring | $(924) | $771 | $(387) | $1,141 | | **Change** | **$(1,695) (-219.8%)** | | **$(1,528) (-133.9%)** | | - Restructuring recoveries in 2021 were due to severance cost estimate changes from a plan initiated in January 2021 to improve operating efficiency[210](index=210&type=chunk)[212](index=212&type=chunk) - Prior year charges were for employee severance cost adjustments and lease termination fees related to strategic initiatives in 2020[213](index=213&type=chunk) [Interest and other expense](index=61&type=section&id=Interest%20and%20other%20expense) Interest and other expense, net, significantly decreased **73.6%** to **$15.9 million** (three months) and **83.2%** to **$27.8 million** (six months), primarily due to reduced debt after the August 2020 Chapter 11 reorganization Interest and Other Expense, Net (Non-GAAP, in thousands) | Item | Combined Three Months Ended July 31, 2021 | Predecessor (PL) Three Months Ended July 31, 2020 | Combined Six Months Ended July 31, 2021 | Predecessor (PL) Six Months Ended July 31, 2020 | | :--- | :---------------------------------------- | :------------------------------------------------ | :-------------------------------------- | :---------------------------------------------- | | Other income, net | $(738) | $898 | $(1,190) | $1,819 | | Interest income | $66 | $65 | $76 | $84 | | Interest expense, net | $(15,227) | $(61,076) | $(26,676) | $(167,054) | | **Interest and other expense, net** | **$(15,899)** | **$(60,113)** | **$(27,790)** | **$(165,151)** | | **Change** | **$44,214 (-73.6%)** | | **$137,361 (-83.2%)** | |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2021 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38960 Churchill Capital Corp II (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction of incorporation or org ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of incorporation or organization) 83-4388331 (I.R.S. Employer Identification No.) 640 Fifth Avenue, 12 Floor New York, NY 10019 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (212) 380-7500 For the fiscal year ended December 31, 2020 OR ¨ TRANS ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38960 CHURCHILL CAPITAL CORP II (Exact Name of Registrant as Specified in Its Charter) Delaware 83-4388331 (State or other jurisdiction ...

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38960 CHURCHILL CAPITAL CORP II UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) (Exact Name of Registrant as Specified in Its Charter) Delaware 83-4388331 (State or other jurisdiction of i ...

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2020 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38960 CHURCHILL CAPITAL CORP II UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) (Exact Name of Registrant as Specified in Its Charter) | 83-4388331 | | --- | | Delaware | (State or other ...

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section clarifies that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ - Forward-looking statements are based on current expectations and projections, but **actual results may vary materially** due to known and unknown risks, uncertainties, and assumptions[10](index=10&type=chunk)[12](index=12&type=chunk) - Such statements include, but are not limited to, possible business combinations, financing, performance of target businesses, retention of key personnel, and financial performance[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) [PART I](index=5&type=section&id=PART%20I) This part details the company's business as a blank check company, associated risks, properties, and legal status [Item 1. Business](index=5&type=section&id=Item%201.%20Business) The company is a blank check company formed to effect a business combination, with no operations or revenue to date - The company is a blank check company formed to effect a business combination, with **no current operations or revenue**[16](index=16&type=chunk) **IPO and Capital Raised** | Item | Amount | Date | Source | | :--- | :--- | :--- | :--- | | IPO Gross Proceeds | $690,000,000 | July 1, 2019 | 69,000,000 units at $10,00/unit | | Private Placement Warrants | $15,800,000 | Concurrently with IPO | 15,800,000 warrants at $1,00/warrant | | Trust Account Deposit | $690,000,000 | Post-IPO | IPO proceeds + private placement warrants | | Funds available for business combination (as of Dec 31, 2019) | ~$673,924,000 | Dec 31, 2019 | After deferred underwriting fees | - The company must complete an initial business combination with a fair market value equal to **at least 80% of the net assets** held in the trust account[24](index=24&type=chunk) - The company is an 'emerging growth company' and intends to take advantage of extended transition periods for new accounting standards and other reporting exemptions[27](index=27&type=chunk)[28](index=28&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The company's success may depend entirely on the future performance of a single business after the initial business combination, leading to a **lack of diversification risk**[32](index=32&type=chunk)[34](index=34&type=chunk) - Public stockholders will be provided with the opportunity to redeem all or a portion of their shares of common stock upon the completion of the initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account[37](index=37&type=chunk) - If the company is unable to complete its initial business combination by July 1, 2021, it will **liquidate and redeem public shares**, with warrants expiring worthless[57](index=57&type=chunk) - The sponsor has agreed to be liable for third-party claims that reduce the trust account below **$10,00 per public share**, with certain exceptions[63](index=63&type=chunk)[86](index=86&type=chunk) - Potential conflicts of interest exist due to the founder's (Michael Klein) and management's affiliations with M, Klein and Company, which may compete for acquisition opportunities[79](index=79&type=chunk)[84](index=84&type=chunk) - The company currently has two officers and does not intend to have any full-time employees prior to the completion of its initial business combination[88](index=88&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section outlines risks related to the company's blank check status, potential business combinations, and structure - The company has **no operating history or revenues**, making it difficult for investors to evaluate its ability to achieve its business objective[99](index=99&type=chunk) - Past performance by M, Klein and Company and members of the management team is **not indicative of future performance** or success in identifying a suitable business combination[100](index=100&type=chunk) - Public stockholders may not be afforded an opportunity to vote on the proposed initial business combination, and even if a vote is held, founder shares will participate, potentially leading to approval **without majority public stockholder support**[102](index=102&type=chunk)[103](index=103&type=chunk) - The ability of public stockholders to redeem their shares for cash may make the company's financial condition unattractive to potential business combination targets, potentially hindering or delaying a transaction[105](index=105&type=chunk)[106](index=106&type=chunk) - Failure to complete an initial business combination within the completion window (July 1, 2021) will result in liquidation, with public stockholders receiving approximately **$10,00 per share** (or less) and warrants expiring worthless[111](index=111&type=chunk)[112](index=112&type=chunk) - Insufficient funds outside the trust account could limit the search for a target business, and the company may depend on **non-obligatory loans** from its sponsor or management team[113](index=113&type=chunk)[114](index=114&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - Post-business combination, the company may be required to take write-downs, restructuring, or impairment charges, which could **significantly negatively affect its financial condition** and the price of its securities[133](index=133&type=chunk) - Third-party claims against the company could reduce the proceeds held in the trust account, potentially leading to a per-share redemption amount **less than $10,00**[134](index=134&type=chunk)[136](index=136&type=chunk) - **Conflicts of interest** may arise from officers' and directors' affiliations with other entities (e,g,, M, Klein and Company), potentially diverting business opportunities[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - The sponsor's significant investment in founder shares and private placement warrants creates a conflict of interest, as these would be **worthless if an initial business combination is not completed**[190](index=190&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk) - Issuing additional shares of Class A common stock or preferred stock, or incurring substantial debt, to complete a business combination could **dilute existing stockholders' interests** or negatively impact financial condition[165](index=165&type=chunk)[166](index=166&type=chunk)[194](index=194&type=chunk) - Lack of business diversification, if only a single business is acquired, may subject the company to numerous economic, competitive, and regulatory risks[196](index=196&type=chunk)[198](index=198&type=chunk) - The company's status as an 'emerging growth company' allows for exemptions from certain disclosure requirements, which might make its securities **less attractive to some investors**[226](index=226&type=chunk)[227](index=227&type=chunk) - Pursuing acquisition opportunities outside of the United States may introduce additional burdens and risks, including cross-border operational complexities, currency fluctuations, and political instability[234](index=234&type=chunk)[235](index=235&type=chunk) [Item 1B. Unresolved Staff Comments](index=63&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - No unresolved staff comments[238](index=238&type=chunk) [Item 2. Properties](index=63&type=section&id=Item%202.%20Properties) The company's executive offices are located in New York, NY, with costs covered by a monthly fee paid to a sponsor affiliate - Executive offices are located at 640 Fifth Avenue, 12th Floor, New York, NY 10019[239](index=239&type=chunk) - A monthly fee of **$20,000** is paid to an affiliate of the sponsor for office space, administrative and support services[239](index=239&type=chunk) [Item 3. Legal Proceedings](index=63&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - No material legal proceedings are currently pending or threatened against the company or its management[240](index=240&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[241](index=241&type=chunk) [PART II](index=64&type=section&id=PART%20II) This part covers market information for the company's securities, selected financial data, and management's analysis [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=64&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the trading of the company's securities on the NYSE and information on its equity structure **Securities Trading Information** | Security Type | Trading Symbol | Exchange | | :--- | :--- | :--- | | Units | CCX,U | New York Stock Exchange | | Class A Common Stock | CCX | New York Stock Exchange | | Warrants | CCX WS | New York Stock Exchange | - The company has not paid any cash dividends on its common stock to date and **does not intend to pay cash dividends** prior to the completion of its initial business combination[246](index=246&type=chunk) **Founder Shares and Private Placement Warrants Issuance** | Item | Shares/Warrants | Purchase Price | Date | | :--- | :--- | :--- | :--- | | Founder Shares (Class B common stock) | 17,250,000 | $25,000 (approx, $0,003/share) | May-June 2019 | | Private Placement Warrants | 15,800,000 | $15,800,000 ($1,00/warrant) | Concurrently with IPO | - The number of founder shares issued was determined based on the expectation that they would represent **20% of the outstanding shares** of common stock upon completion of the IPO[250](index=250&type=chunk) [Item 6. Selected Financial Data](index=66&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a summary of key financial data from inception through December 31, 2019 **Selected Financial Data (April 11, 2019 - December 31, 2019)** | Metric | Amount | | :--- | :--- | | **Income Statement Data:** | | | Loss from operations | $(744,859) | | Net income | $4,693,042 | | **Balance Sheet Data (as of Dec 31, 2019):** | | | Cash | $2,238,275 | | Marketable securities held in trust account | $695,295,418 | | Total assets | $697,836,358 | | Total liabilities | $21,638,123 | | Common stock subject to possible redemption | $671,198,229 | | Total stockholders' equity | $5,000,006 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations - The company has neither engaged in any operations nor generated any revenues to date, with activities focused on IPO preparation and identifying a target company for a business combination[262](index=262&type=chunk) - Non-operating income is generated in the form of **interest income** on marketable securities held in the trust account[262](index=262&type=chunk) **Financial Performance (April 11, 2019 - December 31, 2019)** | Metric | Amount | | :--- | :--- | | Net income | $4,693,042 | | Interest earned on marketable securities held in Trust Account | $6,639,430 | | Unrealized gain on marketable securities held in Trust Account | $45,988 | | Formation and operating costs | $744,859 | | Provision for income taxes | $1,247,517 | **IPO Proceeds and Transaction Costs** | Item | Amount | | :--- | :--- | | IPO Gross Proceeds | $690,000,000 | | Private Placement Warrants Proceeds | $15,800,000 | | Total Trust Account Deposit | $690,000,000 | | Total Transaction Costs | $34,319,807 | | - Underwriting Fees | $12,212,000 | | - Deferred Underwriting Fees | $21,371,000 | | - Other Costs | $736,807 | - As of December 31, 2019, **$695,3 million was held in the trust account**, primarily in U,S, Treasury Bills, with $1,39 million withdrawn for income taxes[267](index=267&type=chunk) - Funds held outside the trust account (**$2,24 million** as of December 31, 2019) are intended to be used to identify and evaluate target businesses, perform due diligence, and cover other related expenses[270](index=270&type=chunk) - The sponsor or its affiliates may loan funds for working capital deficiencies or transaction costs, which may be **convertible into warrants**[271](index=271&type=chunk) - Common stock subject to possible redemption is classified as temporary equity, and net income per common share is calculated using the **two-class method**, excluding redeemable shares from basic EPS[279](index=279&type=chunk)[280](index=280&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company was not subject to material market or interest rate risk as of December 31, 2019 - As of December 31, 2019, the company was **not subject to any material market or interest rate risk**[282](index=282&type=chunk) - The net proceeds in the trust account are invested in U,S, Treasury Bills with a maturity of 180 days or less or in certain money market funds, **limiting exposure to interest rate risk**[282](index=282&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the financial statements and supplementary data located after Item 15 of the Form 10-K - Financial statements and supplementary data are included following Item 15 of this Form 10-K[283](index=283&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=71&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - There have been no changes in and disagreements with accountants on accounting and financial disclosure[284](index=284&type=chunk) [Item 9A. Controls and Procedures](index=72&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls and procedures were evaluated as effective, though a management report on internal controls is not included - The company's disclosure controls and procedures were evaluated as **effective** as of December 31, 2019[286](index=286&type=chunk) - This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the independent registered public accounting firm due to a **transition period** established by SEC rules for newly public companies[288](index=288&type=chunk) - There were **no changes** in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[289](index=289&type=chunk) [Item 9B. Other Information](index=73&type=section&id=Item%209B.%20Other%20Information) No other information is required to be disclosed under this item - No other information is required to be disclosed under this item[302](index=302&type=chunk) [PART III](index=73&type=section&id=PART%20III) This part provides information on directors, executive officers, corporate governance, compensation, and security ownership [Item 10. Directors, Executive Officers and Corporate Governance](index=73&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's management team, board structure, and corporate governance policies **Directors and Executive Officers** | Name | Age | Title | | :--- | :--- | :--- | | Michael Klein | 56 | Chief Executive Officer and Chairman of the Board of Directors | | Peter Seibold | 55 | Chief Financial Officer | | Jeremy Paul Abson | 52 | Director | | Glenn R, August | 58 | Director | | Mark Klein | 58 | Director | | Malcolm S, McDermid | 41 | Director | | Karen G, Mills | 66 | Director | - Michael Klein is the founder and managing partner of M, Klein and Company, and Peter Seibold is a managing director at M, Klein and Company, indicating **potential conflicts of interest**[304](index=304&type=chunk)[306](index=306&type=chunk) - The board of directors consists of six members, divided into **three classes with staggered three-year terms**[313](index=313&type=chunk) - Jeremy Paul Abson, Glenn R, August, Malcolm S, McDermid, and Karen G, Mills are determined to be **independent directors** under applicable SEC and NYSE rules[316](index=316&type=chunk) - The board of directors has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee, all composed **solely of independent directors**[321](index=321&type=chunk) - The company's amended and restated certificate of incorporation **renounces its interest in any corporate opportunity** offered to any director or officer unless such opportunity is expressly offered solely in their capacity as a director or officer of the company and is legally and contractually permitted[338](index=338&type=chunk)[345](index=345&type=chunk) **Conflicts of Interest (Summary of Affiliations)** | Name of Individual | Entity Name | Affiliation | | :--- | :--- | :--- | | Michael Klein | M, Klein and Company | Founder and Managing Member | | | Credit Suisse Group AG | Director | | | Clarivate Analytics | Director | | | Churchill Capital Corp III | Chief Executive Officer, President and Chairman of the Board of Directors | | Peter Seibold | M, Klein and Company | Managing Director | | Jeremy Paul Abson | TBG AG | President and Chief Financial Officer | | | Churchill Capital Corp III | Director | | Glenn R, August | Oak Hill Advisors | Founder, Senior Partner and Chief Executive Officer | | | Churchill Capital Corp III | Director | | Mark Klein | M, Klein and Company | Managing Member and Majority Partner | | | Sutter Rock Capital | Chief Executive officer and Director | | | Atlantic Alliance Partnership Corp, | Director | | | Churchill Capital Corp III | Director | | Malcolm S, McDermid | Emerson Collective | Managing Director | | | Churchill Capital Corp III | Director | | Karen G, Mills | MMP Group | President | | | Envoy Global | Vice Chair | | | Clarivate Analytics | Director | | | Churchill Capital Corp III | Director | [Item 11. Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) No executive officers or directors have received cash compensation for services rendered to the company - None of the executive officers or directors have received any **cash compensation** for services rendered to the company[355](index=355&type=chunk) - The company pays a monthly recurring expense of **$20,000** to an affiliate of its sponsor for office space, administrative, and support services, which will cease upon completion of the initial business combination or liquidation[355](index=355&type=chunk) - The sponsor, executive officers, directors, or their affiliates are reimbursed for **out-of-pocket expenses** incurred in connection with identifying potential target businesses and performing due diligence, with no cap on reimbursement[356](index=356&type=chunk) - After the completion of the business combination, any compensation to be paid to executive officers will be determined by a **compensation committee constituted solely by independent directors**[357](index=357&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details the beneficial ownership of the company's common stock by its sponsor, management, and significant shareholders **Beneficial Ownership of Common Stock (as of March 26, 2020)** | Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Common Stock | | :--- | :--- | :--- | | Churchill Sponsor II LLC | 17,250,000 | 20% | | Michael Klein | 17,250,000 | 20% | | Linden Advisors LP | 3,808,569 | 5,5% | | MMCAP International Inc, SPC | 6,630,387 | 9,6% | | Polar Asset Management Partners Inc, | 3,800,000 | 5,5% | | Magnetar Financial LLC | 5,000,000 | 7,3% | | HGC Investment Management Inc, | 4,190,414 | 6,1% | | All officers and directors as a group (7 individuals) | 17,250,000 | 20% | - The sponsor beneficially owns **20,0%** of the issued and outstanding shares of common stock and has the right to elect all directors prior to the consummation of the initial business combination, exerting substantial influence over stockholder matters[364](index=364&type=chunk) - Founder shares (Class B common stock) will **automatically convert into shares of Class A common stock** on a one-for-one basis upon completion of a business combination, subject to certain adjustments[365](index=365&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=88&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section outlines various related party transactions and the company's policies for their review and approval - The sponsor purchased **17,25 million founder shares for $25,000** and **15,8 million private placement warrants for $15,8 million**[369](index=369&type=chunk)[370](index=370&type=chunk) - Directors have an indirect economic interest in the founder shares and private placement warrants through their membership interest in the sponsor[372](index=372&type=chunk) - A **$300,000 promissory note** from the sponsor to cover IPO expenses was repaid on July 1, 2019[374](index=374&type=chunk) - The company pays an affiliate of its sponsor **$20,000 per month** for office space, administrative, and support services[375](index=375&type=chunk) - The sponsor, officers, and directors, or their affiliates, are reimbursed for out-of-pocket expenses incurred in connection with company activities, subject to quarterly review by the audit committee[376](index=376&type=chunk) - The sponsor or its affiliates may loan funds for transaction costs, with up to **$1,500,000 of such loans convertible into warrants** identical to private placement warrants[377](index=377&type=chunk) - The company has a registration rights agreement for founder shares, private placement warrants, and warrants issued upon conversion of working capital loans[380](index=380&type=chunk) - The **audit committee** is responsible for reviewing and approving related party transactions to determine if they impair director independence or present conflicts of interest[385](index=385&type=chunk) - For business combinations with affiliated entities, the company will obtain a **fairness opinion** from an independent investment banking or accounting firm[387](index=387&type=chunk) [Item 14. Principal Accounting Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section details the fees paid to Marcum LLP, the independent registered public accounting firm, for audit services **Fees Paid to Marcum LLP (April 11, 2019 - December 31, 2019)** | Fee Type | Amount | | :--- | :--- | | Audit Fees | $72,510 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | - The audit committee, formed upon the consummation of the IPO, now **pre-approves all auditing services** and permitted non-audit services to be performed by the auditors[397](index=397&type=chunk) [PART IV](index=96&type=section&id=PART%20IV) This part lists the exhibits and financial statement schedules filed with the annual report [Item 15. Exhibits, Financial Statement Schedules](index=96&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the exhibits and financial statement schedules filed as part of the annual report on Form 10-K - The section lists various exhibits filed as part of the annual report, including corporate governance documents (Amended and Restated Certificate of Incorporation, Bylaws), warrant agreements, and indemnity agreements[400](index=400&type=chunk)[402](index=402&type=chunk) - It includes certifications of the Principal Executive Officer and Principal Financial Officer pursuant to the **Sarbanes-Oxley Act**[403](index=403&type=chunk) [SIGNATURES](index=99&type=section&id=SIGNATURES) This section contains the official signatures authorizing the filing of the annual report - The annual report on Form 10-K was signed on behalf of Churchill Capital Corp II by Peter Seibold, Chief Financial Officer, on **March 26, 2020**[405](index=405&type=chunk)[406](index=406&type=chunk) [POWERS OF ATTORNEY](index=100&type=section&id=POWERS%20OF%20ATTORNEY) This section grants authority to designated individuals to sign and file the report on behalf of the directors - Each of the undersigned directors constitutes and appoints Michael Klein and Peter Seibold as **attorneys-in-fact** to sign and file this annual report on Form 10-K and related documents[408](index=408&type=chunk) - The section includes the signatures of Michael Klein (CEO, Chairman, Director) and Peter Seibold (CFO), along with other directors, confirming their positions and the signing date of March 26, 2020[410](index=410&type=chunk) [INDEX TO FINANCIAL STATEMENTS](index=101&type=section&id=INDEX%20TO%20FINANCIAL%20STATEMENTS) This section provides an index to the company's audited financial statements and the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=102&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an unqualified opinion on the company's financial statements - Marcum LLP issued an **unqualified opinion** on the accompanying financial statements of Churchill Capital Corp II as of December 31, 2019, and for the period from April 11, 2019 (inception) through December 31, 2019[414](index=414&type=chunk) - The audit was conducted in accordance with PCAOB standards, but **no opinion was expressed on the effectiveness of the Company's internal control** over financial reporting[416](index=416&type=chunk) [Balance Sheet](index=103&type=section&id=Balance%20Sheet) This statement presents the company's financial position as of December 31, 2019 **Balance Sheet Data (as of December 31, 2019)** | ASSETS | Amount | | :--- | :--- | | Cash | $2,238,275 | | Prepaid income taxes | $27,140 | | Prepaid expenses | $275,525 | | Total Current Assets | $2,540,940 | | Marketable securities held in Trust Account | $695,295,418 | | **TOTAL ASSETS** | **$697,836,358** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | Current liabilities – Accrued expenses | $257,466 | | Total Current Liabilities | $257,466 | | Deferred income tax payable | $9,657 | | Deferred underwriting fee payable | $21,371,000 | | **Total Liabilities** | **$21,638,123** | | Class A Common stock subject to possible redemption | $671,198,229 | | Preferred stock | — | | Class A Common stock | $238 | | Class B Common stock | $1,725 | | Additional paid-in capital | $305,001 | | Retained earnings | $4,693,042 | | **Total Stockholders' Equity** | **$5,000,006** | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$697,836,358** | [Statement of Operations](index=104&type=section&id=Statement%20of%20Operations) This statement details the company's financial performance from inception through December 31, 2019 **Statement of Operations Data (April 11, 2019 - December 31, 2019)** | Metric | Amount | | :--- | :--- | | Operating and formation costs | $744,859 | | Loss from operations | $(744,859) | | Interest earned on marketable securities held in Trust Account | $6,639,430 | | Unrealized gain on marketable securities held in Trust Account | $45,988 | | Income before provision for income taxes | $5,940,559 | | Provision for income taxes | $(1,247,517) | | **Net income** | **$4,693,042** | | Weighted average shares outstanding, basic and diluted | 18,180,430 | | Basic and diluted net income per common share | $(0,01) | - Net income per common share calculation excludes interest income of **$4,868,674** attributable to shares subject to possible redemption[423](index=423&type=chunk) [Statement of Changes in Stockholders' Equity](index=105&type=section&id=Statement%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines the changes in stockholders' equity from inception through December 31, 2019 **Changes in Stockholders' Equity (April 11, 2019 - December 31, 2019)** | Item | Class A Common Stock (Shares) | Class A Common Stock (Amount) | Class B Common Stock (Shares) | Class B Common Stock (Amount) | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance – April 11, 2019 (inception) | — | $— | — | $— | $— | $— | $— | | Issuance of Founder Shares to Sponsor | — | — | 17,250,000 | $1,725 | $23,275 | — | $25,000 | | Sale of 69,000,000 Units, net of underwriting discount and offering expenses | 69,000,000 | $6,900 | — | — | $655,673,293 | — | $655,680,193 | | Sale of 15,800,000 Private Placement Warrants | — | — | — | — | $15,800,000 | — | $15,800,000 | | Common stock subject to possible redemption | (66,619,951) | $(6,662) | — | — | $(671,191,567) | — | $(671,198,229) | | Net income | — | — | — | — | — | $4,693,042 | $4,693,042 | | **Balance – December 31, 2019** | **2,380,049** | **$238** | **17,250,000** | **$1,725** | **$305,001** | **$4,693,042** | **$5,000,006** | [Statement of Cash Flows](index=106&type=section&id=Statement%20of%20Cash%20Flows) This statement presents the company's cash flows from inception through December 31, 2019 **Statement of Cash Flows (April 11, 2019 - December 31, 2019)** | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(2,027,918) | | Net cash used in investing activities | $(688,610,000) | | Net cash provided by financing activities | $692,876,193 | | **Net Change in Cash** | **$2,238,275** | | Cash – End of period | $2,238,275 | | Cash paid for income taxes | $1,265,000 | - Investing activities primarily included the investment of **$690,000,000** in the Trust Account and withdrawal of $1,390,000 to pay income taxes[428](index=428&type=chunk) - Financing activities included proceeds from the issuance of Class B common stock ($25,000), sale of IPO Units ($677,788,000), sale of Private Placement Warrants ($15,800,000), and a promissory note from a related party ($200,000), offset by repayment of the note and payment of offering costs[428](index=428&type=chunk) [Notes to Financial Statements](index=107&type=section&id=Notes%20to%20Financial%20Statements) These notes provide detailed information supporting the financial statements and accounting policies - The company is a blank check company, an early stage and emerging growth company, formed for a business combination, with no operations until its completion[431](index=431&type=chunk)[433](index=433&type=chunk) - The IPO of 69,000,000 units at $10,00 per unit and the sale of 15,800,000 private placement warrants at $1,00 per warrant resulted in **$690,000,000 being placed in the trust account**[434](index=434&type=chunk)[435](index=435&type=chunk)[437](index=437&type=chunk) - Transaction costs amounted to **$34,319,807**, including underwriting discount and deferred underwriting discount[436](index=436&type=chunk) - Public stockholders have **redemption rights** upon completion of a business combination or if no combination is completed by July 1, 2021 (or October 1, 2021), leading to liquidation[439](index=439&type=chunk)[444](index=444&type=chunk) - The sponsor waived redemption and liquidation rights for its Founder Shares but is liable for third-party claims that reduce the trust account below **$10,00 per Public Share**, with certain exceptions[443](index=443&type=chunk)[448](index=448&type=chunk) - The company has elected not to opt out of the **extended transition period** for complying with new or revised accounting standards as an emerging growth company[451](index=451&type=chunk) - Common stock subject to possible redemption is classified as **temporary equity**, as its redemption rights are considered outside the company's control[457](index=457&type=chunk) - Net income per common share is computed using the **two-class method**, excluding shares subject to possible redemption from the calculation of basic net income per common share[460](index=460&type=chunk)[463](index=463&type=chunk) - Related party transactions include the sponsor's purchase of **17,250,000 Founder Shares for $25,000** and **15,800,000 Private Placement Warrants for $15,800,000**[470](index=470&type=chunk)[468](index=468&type=chunk) - An affiliate of the sponsor receives **$20,000 per month** for office space, administrative, and support services[474](index=474&type=chunk) - Public Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from the IPO closing, expiring five years after a Business Combination or earlier upon redemption or liquidation[487](index=487&type=chunk)[490](index=490&type=chunk) **Deferred Tax Liability (as of December 31, 2019)** | Item | Amount | | :--- | :--- | | Unrealized gain on securities | $(9,657) | | Total deferred tax liability | $(9,657) | | Valuation allowance | — | | **Deferred tax liability, net of allowance** | **$(9,657)** | **Income Tax Provision (April 11, 2019 - December 31, 2019)** | Item | Amount | | :--- | :--- | | Federal Current | $1,237,860 | | Federal Deferred | $9,657 | | State Current | — | | State Deferred | — | | Change in valuation allowance | — | | **Income tax provision** | **$1,247,517** | - The company follows ASC 820 for fair value measurements, classifying marketable securities held in the Trust Account as **Level 1**[499](index=499&type=chunk)[501](index=501&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38960 CHURCHILL CAPITAL CORP II (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction of incorporation or ...