Part I [Business](index=7&type=section&id=Item%201.%20Business) Skillsoft is a global leader in corporate digital learning, serving over 75% of the Fortune 1000 with AI-driven platforms and content, operating in a growing market driven by upskilling needs - Skillsoft is a global leader in corporate digital learning, serving over **75% of the Fortune 1000** and more than **90 million learners globally** through its primary solutions: Percipio, Global Knowledge, Codecademy, Pluma, and SumTotal[18](index=18&type=chunk) - The company operates in three main segments: Content, Global Knowledge, and SumTotal[31](index=31&type=chunk) Corporate Digital Learning Market Overview | Metric | Value/Rate | | :--- | :--- | | Global Professional Digital Learning TAM (2021) | ~$28 billion | | Anticipated CAGR through 2025 | ~10% | | Global HCM Market Size | ~$17.6 billion | | Anticipated HCM Market CAGR | ~7% | - A key strategic focus is migrating customers to the AI-driven Percipio platform, with approximately **90% of the content segment's annual recurring revenue base** contracted for Percipio as of January 31, 2022[38](index=38&type=chunk) - Skillsoft acquired Codecademy on April 4, 2022, to enhance its Technology & Developer offerings[61](index=61&type=chunk) - The business experiences significant seasonality, with the fourth quarter representing about **40% of annual bookings volume**[60](index=60&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including global economic conditions, intense competition, system disruptions, acquisition integration challenges, significant leverage, and shareholder influence - Business operations are susceptible to adverse global economic trends, public health crises, and geopolitical events, which could reduce demand for training products[64](index=64&type=chunk)[74](index=74&type=chunk)[84](index=84&type=chunk) - The corporate learning market is highly competitive and fragmented, potentially leading to price reductions, reduced revenue, and loss of market share[90](index=90&type=chunk)[91](index=91&type=chunk) - The business is vulnerable to system disruptions, security breaches, and cybersecurity attacks, which could lead to customer loss, reputational damage, and significant liabilities[103](index=103&type=chunk)[105](index=105&type=chunk)[108](index=108&type=chunk) - The company may be unable to successfully integrate Codecademy's business or achieve anticipated merger benefits, potentially impacting results if expanded operations are not managed effectively[72](index=72&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) - Significant leverage could adversely affect operations, limit flexibility, and expose the company to interest rate risk, with debt agreements containing restrictive covenants[160](index=160&type=chunk)[161](index=161&type=chunk) - Major shareholder Prosus holds approximately **37.5% of the voting power** of Skillsoft's Class A common stock as of April 11, 2022, potentially exerting substantial influence[210](index=210&type=chunk)[212](index=212&type=chunk) [Unresolved Staff Comments](index=69&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[215](index=215&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) The company's U.S. headquarters are in Nashua, New Hampshire, and worldwide in Dublin, Ireland, with other facilities in North America and India, deemed adequate for current needs - The company's U.S. headquarters are in Nashua, New Hampshire, and its worldwide headquarters are in Dublin, Ireland[216](index=216&type=chunk)[217](index=217&type=chunk) - Management believes existing facilities are adequate for current needs and suitable additional space will be available if required[218](index=218&type=chunk) [Legal Proceedings](index=69&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 14 of the Consolidated Financial Statements - The company incorporates information regarding legal proceedings by reference to Note 14 of the financial statements[219](index=219&type=chunk) [Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[220](index=220&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=70&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Skillsoft's Class A common stock trades on the NYSE under "SKIL," with 164 stockholders of record as of April 11, 2022, and no anticipated cash dividends - The company's Class A common stock trades on the NYSE under the symbol "**SKIL**"[223](index=223&type=chunk) - As of April 11, 2022, there were **164 stockholders of record**[223](index=223&type=chunk) - The company has never declared or paid cash dividends and does not anticipate paying any in the foreseeable future, intending to retain earnings for growth and debt obligations[224](index=224&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=70&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Skillsoft's financial condition and results, including the Global Knowledge and Codecademy acquisitions, presenting non-GAAP combined results for comparability, and detailing liquidity and fresh-start accounting - On June 11, 2021, the company completed a business combination with Software Luxembourg Holding S.A. and acquired Global Knowledge, operating as Skillsoft Corp[226](index=226&type=chunk) - The company acquired Codecademy on April 4, 2022, for approximately **$390.3 million** in stock and cash[227](index=227&type=chunk) Non-GAAP Combined Financial Results (Fiscal Year Ended Jan 31) | (In thousands) | 2022 | 2021 | | :--- | :--- | :--- | | **Total revenues** | **$567,390** | **$382,619** | | Operating loss | ($79,891) | ($428,982) | | Net (loss) income | ($96,070) | $2,670,290 | - The **48.3% increase in total revenues** in fiscal 2022 was primarily driven by the inclusion of **$132.6 million** in revenue from the Global Knowledge acquisition, with prior year revenue impacted by a fresh-start accounting adjustment[248](index=248&type=chunk) - As of January 31, 2022, the company had **$154.7 million in cash and cash equivalents** and access to a **$75.0 million accounts receivable facility**[280](index=280&type=chunk)[288](index=288&type=chunk) - In July 2021, the company entered into a new **$480 million term loan facility** to refinance existing debt, maturing in July 2028[281](index=281&type=chunk) - The company adopted fresh-start accounting on August 28, 2020, following its emergence from Chapter 11, materially impacting financial statement comparability[297](index=297&type=chunk)[436](index=436&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - Not applicable as a smaller reporting company[333](index=333&type=chunk) [Financial Statements and Supplementary Data](index=99&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2022, including balance sheets, income statements, and cash flows, presented for "Successor" and "Predecessor" periods due to bankruptcy emergence and acquisitions, with detailed notes Consolidated Balance Sheet Highlights (as of Jan 31) | (In thousands) | 2022 (Successor) | 2021 (Predecessor) | | :--- | :--- | :--- | | **Total Assets** | **$2,221,948** | **$1,545,737** | | Cash and cash equivalents | $154,672 | $71,479 | | Goodwill | $871,504 | $495,004 | | **Total Liabilities** | **$1,162,050** | **$965,768** | | Deferred revenue | $332,853 | $260,584 | | Long-term debt | $462,185 | $510,236 | | **Total Shareholders' Equity** | **$1,059,898** | **$579,969** | - The company adopted fresh-start reporting effective August 27, 2020, upon emergence from Chapter 11, making financial statements after this date not comparable to prior periods[341](index=341&type=chunk)[437](index=437&type=chunk) - Note 5 details business combinations, including the acquisition of Skillsoft Legacy for **$832.7 million** and Global Knowledge for **$258.5 million**, with preliminary purchase price allocations provided[469](index=469&type=chunk)[478](index=478&type=chunk) - Note 22 provides segment information, breaking down revenues and operating loss/income for the Skillsoft, SumTotal, and Global Knowledge segments[616](index=616&type=chunk)[621](index=621&type=chunk) [Controls and Procedures](index=201&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of January 31, 2022, with no material changes to internal control over financial reporting - Based on an evaluation as of January 31, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[655](index=655&type=chunk) - There were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls[656](index=656&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=202&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) This section provides biographical information for Skillsoft's directors and executive officers, detailing the nine-member staggered board, its independent majority, and three standing committees, along with adopted governance guidelines - The report lists the **nine members of the Board of Directors** and **ten executive officers**, including CEO Jeffrey R. Tarr[661](index=661&type=chunk)[662](index=662&type=chunk) - The Board is divided into three classes serving staggered three-year terms, which can increase the time needed to change a majority of the Board[693](index=693&type=chunk) - The Board has determined that a majority of its directors are independent, with the Audit, Compensation, and Nominating and Governance committees composed entirely of independent directors[695](index=695&type=chunk)[696](index=696&type=chunk) [Executive Compensation](index=217&type=section&id=Item%2011.%20Executive%20Compensation) This section details fiscal year 2022 compensation for Named Executive Officers, including base salary, bonuses, and equity, with CEO Jeffrey R. Tarr's total compensation at approximately $28.6 million, and bonus payouts adjusted by discretion FY 2022 Summary Compensation for Named Executive Officers | Name and Principal Position | Salary ($) | Stock Awards ($) | Option Awards ($) | All Other Comp. ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Jeffrey R. Tarr**, CEO | $477,273 | $21,500,000 | $3,330,000 | $2,916,668 | $28,586,524 | | **Gary W. Ferrera**, CFO | $220,455 | $2,362,189 | $1,332,996 | $317,055 | $4,232,745 | | **Apratim Purakayastha**, CTO | $450,000 | $2,496,150 | $865,060 | $381,838 | $4,192,650 | - The fiscal 2022 annual cash bonus was based on a Bookings target of **$739 million**, resulting in a **76% payout**, though the Compensation Committee exercised discretion to approve a **100% payout** for certain executives[715](index=715&type=chunk)[716](index=716&type=chunk) - The company maintains the 2020 Omnibus Incentive Plan for granting equity awards to align interests with long-term shareholder value[719](index=719&type=chunk)[720](index=720&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=232&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section discloses beneficial ownership of Skillsoft's Class A common stock as of April 7, 2022, with MIH Learning B.V. (Prosus) and Churchill Sponsor II LLC as the two largest owners holding a majority of voting power Principal Stockholders (as of April 7, 2022) | Name of Beneficial Holder | Number of Shares | Percentage of Shares | | :--- | :--- | :--- | | MIH Learning B.V. (Prosus) | 77,916,895 | 43.4% | | Churchill Sponsor II LLC | 33,550,000 | 18.7% | - Beneficial ownership is based on **162,911,755 shares** of Class A common stock outstanding on April 7, 2022[744](index=744&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=236&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section details significant related party transactions, including business combinations with Churchill and Global Knowledge, and the Codecademy acquisition, involving major shareholders like Prosus and affiliates, with advisory fees paid to The Klein Group - The consummation of the Skillsoft and Global Knowledge mergers on June 11, 2021, involved complex transactions with related parties, including PIPE investments from MIH Learning B.V. (Prosus) and Lodbrok Capital LLP[752](index=752&type=chunk)[754](index=754&type=chunk) - The acquisition of Codecademy involved related parties, as Prosus held a significant equity stake in both Skillsoft (**37.5%**) and Codecademy (**23.8%**), with the transaction approved by Skillsoft's audit committee and board without Prosus-affiliated directors' participation[757](index=757&type=chunk) - The Klein Group, LLC, an affiliate of director Michael Klein, was engaged as a consultant for the Codecademy transaction and was paid a transaction fee of **$2.0 million**[640](index=640&type=chunk)[758](index=758&type=chunk) [Principal Accountant Fees and Services](index=242&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section details fees paid to Ernst & Young LLP for fiscal years 2022 and 2021, with all services pre-approved by the Audit Committee Accountant Fees (in thousands) | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $3,195 | $3,310 | | Tax fees | $2,211 | $2,700 | | **Total** | **$5,406** | **$6,010** | Part IV [Exhibits and Financial Statement Schedules](index=242&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section incorporates financial statements from Item 8 by reference, noting the omission of schedules and referring to the Exhibit Index for filed exhibits - The financial statements required by this item are incorporated by reference from Item 8 of the Annual Report[763](index=763&type=chunk) - All financial statement schedules have been omitted because they are not required, not applicable, or the information is included elsewhere in the report[763](index=763&type=chunk) [Form 10-K Summary](index=244&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary - None[765](index=765&type=chunk)

| --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | DISCLAIMER FORWARD LOOKING STATEMENTS This document includes statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws. These forward-looking stat ...

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 ...