Skillsoft Corp 8-K/A, filed Jun 21, 2022

Skillsoft Corp. (SKIL)

8-K/A 2022-06-21 For: 2022-04-04

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Added on April 10, 2026

About this 8-K/A

Skillsoft Corp filed this 8-K/A on June 21, 2022, reporting on events of April 4, 2022.

Items reported

Item 9.01: Financial statements and exhibits

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Delaware	001-38960	83-4388331
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Title of each class	Trading Symbol	Name of each exchange on which registered
Shares of Class A common stock, $0.0001 par value per share	SKIL	New York Stock Exchange

Warrants	SKIL WS	New York Stock Exchange


Exhibit Number		Description
99.1		Ryzac, Inc. (D.B.A. Codecademy) audited financial statements as December 31, 2021 and 2020
99.2		Unaudited Pro Forma Condensed Combined Financial Information
104		The cover page from this Amendment No. 1 on Form 8-K/A, formatted in Inline XBRL (included as Exhibit 101)



	SKILLSOFT CORP.


	By:	/s/ Gary W. Ferrera
		Gary W. Ferrera Chief Financial Officer


Independent Auditor’s Report	1-2
Financial Statements
Balance Sheets	3
Statements of Operations	4
Statements of Changes in Stockholders’ Equity	5
Statements of Cash Flows	6
Notes to Financial Statements	7-20
Supplementary Information
Schedules of Cost of Revenue, Research and Development, Sales and Marketing, Content, and General and Administrative Expenses	22


	2021		2020
Assets

Current assets
Cash and cash equivalents	$	45,004,800	$	59,961,475
Contract assets, net		310,644		215,662
Prepaid expenses and other current assets		2,338,464		1,493,343
Total current assets		47,653,908		61,670,480

Restricted cash		766,025		766,025
Property and equipment, net		443,384		412,283
Intangible assets, net		2,260,171		727,718
Digital content, net		2,033,034		1,347,066

	$	53,156,522	$	64,923,572

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable, accrued expenses, and other current liabilities	$	3,597,361	$	2,921,013
Contract liabilities		16,744,139		11,943,351
Deferred rent, current portion		63,194		98,954
Total current liabilities		20,404,694		14,963,318

Deferred rent, net of current portion		—		63,194

Stockholders’ equity
Series A convertible preferred stock, $.00001 par value, 2,231,860 shares authorized, issued and outstanding; liquidation preference $2,530,929		22		22
Series B convertible preferred stock, $.00001 par value, 2,710,028 shares authorized, 2,705,259 shares issued and outstanding: liquidation preference $9,982,406		27		27
Series C convertible preferred stock, $.00001 par value, 6,390,000 shares authorized, 6,389,639 shares issued and outstanding: liquidation preference $31,038,949		64		64
Series D convertible preferred stock, $.00001 par value, 3,131,432 shares authorized, 3,132,432 shares issued and outstanding: liquidation preference $39,999,973		32		32
Common stock, $.00001 par value, 33,000,000 shares authorized, 10,907,419 and 10,473,028 shares issued and outstanding as of December 31, 2021 and 2020, respectively		109		105
Paid-in capital		91,191,287		87,923,438
Accumulated deficit		(58,439,713)		(38,026,628)
Total stockholders’ equity		32,751,828		49,897,060

	$	53,156,522	$	64,923,572


	2021		2020

Revenue, net	$	41,853,306	$	32,841,335

Cost of revenue		5,284,423		3,573,750

Gross margin		36,568,883		29,267,585

Operating expenses
Research and development		19,923,292		13,075,616
Sales and marketing		19,336,120		8,724,411
Content		4,674,759		2,857,076
General and administrative		12,825,627		9,121,106
Total operating expenses		56,759,798		33,778,209

Loss from operations		(20,190,915)		(4,510,624)

Other income (expense)
Other income		20,966		3,481
Interest income		2,323		58,677
Dividend income		486		12,710
Other expense		(312,938)		(257,878)
		(289,163)		(183,010)

Loss before (benefit from) provision for state income taxes		(20,480,078)		(4,693,634)

(Benefit from) provision for state income taxes		(66,993)		64,719

Net loss	$	(20,413,085)	$	(4,758,353)


	Series A			Series B			Series C			Series D
	Preferred Stock			Preferred Stock			Preferred Stock			Preferred Stock			Common Stock							Total
	No. of			No. of			No. of			No. of			No. of			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity

January 1, 2020	2,231,860	$	22	2,705,259	$	27	6,389,639	$	64	—	$	—	10,328,616	$	103	$	45,384,841	$	(33,268,275)	$	12,116,782

Issuance of Series D preferred stock for cash, net of expenses	—		—	—		—	—			3,131,432		32	—		—		39,847,189		—		39,847,221

Issuance of common stock for cash	—		—	—		—	—		—	—			144,412		2		194,250		—		194,252

Stock-based compensation expense	—		—	—		—	—		—	—		—	—		—		2,497,158		—		2,497,158

Net loss	—		—	—		—	—		—	—		—	—		—		—		(4,758,353)		(4,758,353)

December 31, 2020	2,231,860		22	2,705,259		27	6,389,639		64	3,131,432		32	10,473,028		105		87,923,438		(38,026,628)		49,897,060

Exercise of stock options in association with tender offer	—		—	—		—	—		—	—		—	228,837		2		333,104		—		333,106

Issuance of common stock	—		—	—		—	—		—	—		—	205,554		2		340,907		—		340,909

Stock-based compensation expense	—		—	—		—	—		—	—		—	—		—		2,593,838		—		2,593,838

Net loss	—		—	—		—	—		—	—		—	—		—		—		(20,413,085)		(20,413,085)

December 31, 2021	2,231,860	$	22	2,705,259	$	27	6,389,639	$	64	3,131,432	$	32	10,907,419	$	109	$	91,191,287	$	(58,439,713)	$	32,751,828


	2021		2020

Operating activities
Net loss	$	(20,413,085)	$	(4,758,353)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		1,794,101		871,420
Gain on disposal of property and equipment		(11,130)		—
Stock-based compensation		2,593,838		2,497,158
Changes in operating assets and liabilities
Contract assets		(94,982)		(7,978)
Prepaid expenses and other current assets		(811,381)		(682,184)
Accounts payable, accrued expenses, and other current liabilities		676,348		2,024,668
Security deposits		—		(66,150)
Contract liabilities		4,800,788		5,040,667
Deferred rent		(98,954)		(63,112)
Net cash (used in) provided by operating activities		(11,564,457)		4,856,136

Investing activities
Purchases of property and equipment		(308,983)		(342,412)
Proceeds from sale of equipment		11,130		522
Capitalization of internal use software		(2,248,724)		(511,910)
Capitalization of digital content		(1,485,916)		(1,246,700)
Net cash used in investing activities		(4,032,493)		(2,100,500)

Financing activities
Proceeds from issuance of Series D preferred stock, net of issuance costs		—		39,847,221
Proceeds from exercise of options in associate with tender offer		333,106		—
Proceeds from issuance of common stock		307,169		194,252
Net cash provided by financing activities		640,275		40,041,473

Net change in cash, cash equivalents, and restricted cash		(14,956,675)		42,797,109

Cash, cash equivalents, and restricted cash
Beginning of year		60,727,500		17,930,391

End of year	$	45,770,825	$	60,727,500

Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	45,004,800	$	59,961,475
Restricted cash		766,025		766,025
Total cash, cash equivalents, and restricted cash	$	45,770,825	$	60,727,500

Supplemental disclosure of cash flow information
Cash paid for income taxes	$	49,123	$	25,390

Supplemental disclosure of noncash financing activity
During 2021, the Company issued 20,000 shares of common stock for $33,740 which is reflected in other receivables.	$	33,740	$	—


		Estimated
Description		Life (Years)

Machinery and equipment		3
Furniture and fixtures		5
Leasehold improvements		5*


	2021		2020

Capitalized software costs	$	3,672,032	$	1,423,308
Accumulated amortization		(1,411,861)		(695,590)
Capitalized software, net	$	2,260,171	$	727,718


	2021		2020

Capitalized course content	$	3,300,040	$	1,814,124
Accumulated amortization		(1,267,006)		(467,058)
Capitalized course content, net	$	2,033,034	$	1,347,066


	2021	2020

(Benefit from) provision for state income taxes	(66,993)	$64,719


	2021		2020

Federal and state net operating loss carryforwards	$	15,111,513	$	6,565,120
Stock-based compensation		212,681		153,287
Deferred rent		16,275		41,893
Accrued expenses		270,542		6,533
Property and equipment		69,375		61,133
Total deferred tax assets		15,680,386		6,827,966
Deferred tax liabilities - intangible assets		(1,105,664)		(536,050)
		14,574,722		6,291,916
Valuation allowance		(14,574,722)		(6,291,916)
Net deferred tax assets	$	—	$	—


2022	$	987,031
2023		864,373
2024		408,767
	$	2,260,171


2022	$	964,598
2023		778,875
2024		286,794
2025		2,767
	$	2,033,034


	2021	2020

Expected term	6	6
Volatility	47%-48%	41%-44%
Risk-free interest rate	0.56%-1.33%	2.70%-3.09%
Dividend yield	0%	0%


		Weighted		Aggregate
	Options	Average		Intrinsic
	Outstanding	Exercise Price		Value

Balance at January 1, 2021	3,975,488	$	1.65	$	9,400,283

Options forfeited	(843,999)	$	1.98

Options exercised	(434,391)	$	1.55

Options granted	2,184,599	$	4.36

Balance at December 31, 2021	4,881,697	$	2.82	$	72,827,529

Exercisable at December 31, 2021	2,995,136	$	2.44	$	46,064,722


	2021		2020

Cost of revenues
Salaries, taxes, benefits and payroll fees	$	965,726	$	533,538
Infrastructure		1,831,306		1,276,306
Instructors		—		94,625
Processing fees		2,050,864		1,547,844
Technology expense		293,827		90,696
Stock-based compensation expense		139,491		7,645
Outside services		—		21,994
Travel, meals and entertainment		3,209		1,102
	$	5,284,423	$	3,573,750

Research and development
Salaries, taxes, benefits and payroll fees	$	16,508,671	$	10,659,329
Stock-based compensation expense		1,650,576		333,359
Outside services		163,419		1,191,309
Technology expense		819,653		530,414
Depreciation and amortization		716,271		348,032
Travel, meals and entertainment		64,702		13,174
	$	19,923,292	$	13,075,617

Sales and marketing
Salaries, taxes, benefits and payroll fees		4,760,008	$	1,999,300
Stock-based compensation expense		94,757		69,076
Technology expense		977,088		715,800
Outside services		1,845,217		483,047
Travel, meals and entertainment		36,528		2,231
Advertising		11,622,522		5,454,957
	$	19,336,120	$	8,724,411

Content
Salaries, taxes, benefits and payroll fees	$	2,109,157	$	1,486,525
Stock-based compensation expense		196,937		59,970
Technology expense		10,002		9,730
Content production and curriculum experience		1,546,085		972,776
Depreciation and amortization		799,948		317,260
Travel, meals and entertainment		12,630		10,815
	$	4,674,759	$	2,857,076

General and administrative
Salaries, taxes, benefits and payroll fees	$	5,693,544	$	2,658,534
Stock-based compensation expense		512,077		2,027,106
Technology expense		673,643		387,660
Office expenses		163,912		80,887
Rent and utilities		1,557,749		1,556,646
Travel, meals and entertainment		401,249		250,955
Legal and professional fees		1,718,476		699,245
Miscellaneous expense		657,094		853,103
Conferences and offsites		235,995		36,235
Recruiting and human resources		296,291		126,682
Depreciation and amortization		277,882		206,128
Outside services		563,034		158,484
Repairs and maintenance		74,681		79,441
	$	12,825,627	$	9,121,106


Unaudited Condensed Pro Forma Combined Balance Sheet
As of January 31, 2022
(in thousands)

	Historical As of January 31, 2022			Historical As of December 31, 2021									As of January 31, 2022
							Codecademy		Codecademy Transaction
	Skillsoft Corp.			Codecademy (Note 2)		Financing Transaction (Note 3)			Accounting Adjustments (Note 4)			Pro Forma Condensed Combined
ASSETS
Current Assets
Cash and cash equivalents	$	154,672		$	45,005	$	157,088	3A	$	(42,005)	4A	$	107,814
							-			(203,434)	4B
							-			(3,512)	4F
Restricted cash		14,251			-		-			-			14,251
Accounts receivable, net		212,463			311		-			-			212,774
Prepaid expenses and other current assets		45,837			2,338		-			-			48,175
Total Current Assets		427,223			47,654		157,088			(248,951)			383,014
Property and equipment, net		18,084			443		-			-			18,527
Goodwill		871,504			-		-			309,146	4E		1,180,650
Intangible assets, net		869,487			2,373		-			109,627	4E		981,487
Right of use assets		19,925			1,238		-			-			21,163
Deferred tax assets		-			-		-			-			-
Other assets		15,725			766		-			-			16,491
TOTAL ASSETS	$	2,221,948		$	52,474	$	157,088		$	169,822		$	2,601,332
Current liabilities
Current maturities of long-term debt	$	4,800		$	-	$	1,600	3A	$	-		$	6,400
Borrowings under accounts receivable facility		74,629			-		-						74,629
Accounts payable		25,661			-		-			-			25,661
Accrued compensation		51,115			-		-			-			51,115
Accrued expenses and other current liabilities		51,017			3,661		-			-			54,678
Lease liability		6,895			1,238		-			-			8,133
Deferred revenue		331,605			16,744		-			-			348,349
Total Current Liabilities		545,722			21,643		1,600			-			568,965
Long-term Debt		462,185			-		155,488	3A		-			617,673
Warrant liabilities		28,199			-		-			-			28,199
Deferred tax liabilities		99,911			-		-			21,615	4G		121,526
Long-term lease liabilities		13,355			-		-			-			13,355
Deferred revenue -non-current		1,248			-		-			-			1,248
Other long-term liabilities		11,430			-		-			-			11,430
Total Liabilities		1,162,050	-		21,643		157,088			21,615			1,362,396


Stockholders' Equity
Class A common stock		11			-		-			3	4C		14
Common stock and additional paid-in capital		-			91,191		-			(91,191)	4D		-
Additional paid-in capital		1,306,146			-		-			182,547	4C		1,488,693
Accumulated deficit		(247,229)			(60,360)		-			60,360	4D		(250,741)
										(3,512)	4F

Accum. other comprehensive income (loss)		970			-		-						970
													-
													-
Total Stockholders' Equity		1,059,898			30,831		-			148,207			1,238,936
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,221,948		$	52,474	$	157,088		$	169,822		$	2,601,332


Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended January 31, 2022
(in thousands, except per share amounts)

	For the Year Ended January 31, 2022		For the Year Ended December 31, 2021								For the Year Ended January 31, 2022
	Skillsoft (Note 5)		Codecademy (Note 2)		Codecademy Financing Transaction (Note 3)			Codecademy Transaction Accounting Adjustments (Note 4)			Pro Forma Condensed Combined
Revenues:
Total revenues	$	662,570	$	41,853	$	-		$	-		$	704,423
Operating expenses
Cost of revenues		196,846		5,284		-			-			202,130
Content and software development		71,258		26,084		-			-			97,342
Selling and marketing		161,629		19,336		-			-			180,965
General and administrative		108,986		12,826		-			8,258	4H		130,070
Amortization of intangible assets		164,947		-		-			18,063	4I		183,010
Recapitalization and transaction-related costs		118,352		-					3,512	4F		121,864
Restructuring		5,757		-		-			-			5,757
Operating and formation costs		2,952		-		-			-			2,952
Total operating expenses		830,727		63,530		-			29,833			924,090
Operating income (loss):	$	(168,157)	$	(21,677)	$	-		$	(29,833)		$	(219,667)
Other income (expense), net		(1,719)		(291)		-			-			(2,010)
Gain on derivative liabilities		(4,160)		-		-			-			(4,160)
Interest income		158		2		-			-			160
Interest expense		(30,381)		-		(13,600)	3B		-			(43,981)
Income (loss) before provision (benefit) for income taxes		(204,259)		(21,966)		(13,600)			(29,833)			(269,658)
Provision for (benefit from) income taxes		(8,192)		(67)		(2,856)			(6,265)	4G		(17,380)
Net loss	$	(196,067)	$	(21,899)	$	(10,744)		$	(23,568)		$	(252,278)

Earnings per Share
Weighted average Class A shares outstanding		133,143							30,374			163,517
Loss per share (basic and diluted) attributable to Class A common stockholders	$	(1.47)									$	(1.54)


	As of December 31, 2021					As of January 31, 2022
	Codecademy Historical Condensed		Accounting Policies and Reclassifications			Codecademy As Adjusted
ASSETS
Current Assets
Cash and cash equivalents	$	45,005	$	-		$	45,005
Restricted cash		-		-			-
Accounts receivable, net		311		-			311
Prepaid expenses and other current assets		2,338		-			2,338
Total Current Assets		47,654		-			47,654
Property and equipment, net		443		-			443
Goodwill		-		-			-
Intangible assets, net		4,293		(1,920)	2A		2,373
Right of use assets		-		1,238	2B		1,238
Other assets		766		-			766
TOTAL ASSETS	$	53,156	$	(682)		$	52,474
Current liabilities
Accrued expenses and other current liabilities	$	3,661	$	-		$	3,661
Lease liability		-		1,238	2B		1,238
Deferred revenue		16,744		-			16,744
Total Current Liabilities		20,405		1,238			21,643
Deferred tax liabilities		-		-			-
Long-term lease liabilities		-		-			-
Total Liabilities		20,405		1,238			21,643


Stockholders' Equity
Common stock, preferred stock and paid-in capital		91,191		-			91,191
Accumulated deficit		(58,440)		(1,920)	2A		(60,360)
Total Stockholders' Equity		32,751		(1,920)			30,831
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	53,156	$	(682)		$	52,474


	For the Fiscal Year Ended December 31, 2021					For the Fiscal Year Ended January 31, 2022
	Codecademy Historical Condensed		Accounting Policies, Reclassifications, and Eliminations			Pro Forma Condensed Combined
Revenues:
Total revenues	$	41,853	$	-		$	41,853
Operating expenses
Cost of revenues		5,284		-			5,284
Content and software development		24,598		1,486	2A		26,084
Selling and marketing		19,336		-			19,336
General and administrative		12,826		-			12,826
Amortization of intangible assets		-		-			-
Recapitalization and transaction-related costs		-					-
Restructuring		-		-			-
Operating and formation costs		-		-			-
Total operating expenses		62,044		1,486			63,530
Operating income (loss):	$	(20,191)	$	(1,486)		$	(21,677)
Other income (expense), net		(291)		-			(291)
Gain on derivative liabilities		-		-			-
Interest income		2		-			2
Interest expense		-		-			-
Loss before provision for income taxes		(20,480)		(1,486)			(21,966)
Provision for income taxes		(67)		-			(67)
Net loss	$	(20,413)	$	(1,486)		$	(21,899)


Cash consideration	$	203,434
Equity consideration ⁽¹⁾		182,550
Total estimated consideration	$	385,984


(1)	Based on the issuance of 30.4 million shares at a closing price on April 4, 2022 of $6.01 per share.


Codecademy Estimated Goodwill
Cash. cash equivalents and restricted cash	$	3,766
Current assets		2,649
Property and equipment, net		443
Intangible assets		112,000
Total assets acquired		118,858
Accrued expenses and other current liabilities		3,660
Deferred revenues		16,744
Deferred tax liabilities		21,615
Total liabilities acquired		42,019
Net assets acquired (a)		76,839
Estimated purchase consideration (b)		385,984
Estimated goodwill (b) - (a)	$	309,145

	Preliminary Estimated Asset Fair Value		Preliminary Weighted Average Useful Life (Years)

Trade name	$	44,000	14 years
Developed Technology		40,000	5 years
Content		18,000	5 years
Customer Relationships		10,000	6 years
Total	$	112,000
Less: net intangible assets reported on Codecademy's historical financial statements as of December 31, 2021		4,293
Pro forma adjustment	$	107,707


4A.	Represents estimated cash that will be retained by the seller in accordance with the terms of the merger agreement whereby any cash in excess of $3 million at the closing date will not be transferred to the buyer.
4B.	Reflects payment of approximately $203.4 million, representing the cash consideration component of the purchase price.
4C.	Reflects issuance of 30.4 million shares of Common Stock representing equity consideration of $182.5 million based and a closing price of Common Stock of $6.01 per share on the April 4, 2022 acquisition date.
4D.	Reflects the elimination of previously issued and outstanding shares of common stock of Codecademy at the date of the Codecademy Transaction and accumulated deficit balance.
4E.	Reflects the increase in intangible assets and goodwill due to the step up in fair value adjustments recognized as part of the Codecademy Transaction based on the preliminary purchase price allocation.
4F.	Reflects the settlement and payment of estimated transaction costs related to the Mergers, including, among others, fees paid for financial advisors, legal services, and professional accounting services. These transaction costs are not reflected in the historical consolidated balance sheet of Skillsoft or Codecademy.
4G.	Reflects adjustments for the tax impact on the pro forma adjustments at the U.S. federal statutory tax rate of 21% as of January 31, 2022 resulting from the acquisition. The effective tax rate of Skillsoft following the Mergers could be significantly different than what is presented within the unaudited pro forma financial information based on several factors including geographic mix of our taxable income or legal entity structure, among others.
4H.	Reflects additional stock-based compensation expense that would have been recognized had the Mergers occurred as of February 1, 2021.
4I.	Reflects additional amortization expense as if the Mergers had occurred as of February 1, 2021. Amortization expense is based on the fair value of the amortizable assets and the estimated economic useful life of the identified intangible assets.


	Predecessor Companies for the period from February 1, 2021 to June 11, 2021						Successor Company for the Period from June 12, 2021 to January 31, 2022		For the Fiscal Year Ended January 31, 2022
	Churchill Capital Corp II (Note 6)		Software Luxembourg (Note 7)		Global Knowledge (Note 8)		Skillsoft Corp. (Note 9)		Skillsoft Pro Forma Condensed Combined
Revenues:
Total revenues	$	-	$	163,031	$	71,785	$	427,754	$	662,570
Operating expenses
Cost of revenues		-		35,881		34,551		126,414		196,846
Content and software development		-		24,084		492		46,682		71,258
Selling and marketing		-		36,198		16,404		109,028		161,629
General and administrative		-		17,217		19,765		72,004		108,986
Amortization of intangible assets		-		51,384		17,034		96,529		164,947
Recapitalization and transaction-related costs		59,121		47,760		-		11,471		118,352
Restructuring		-		(703)		2,764		3,696		5,757
Operating and formation costs		2,952		-		-		-		2,952
Total operating expenses		62,073		211,820		91,010		465,824		830,727
Operating income (loss):	$	(62,073)	$	(48,789)	$	(19,225)	$	(38,070)	$	(168,157)
Other income (expense), net		-		(493)		624		(1,850)		(1,719)
Gain on derivative liabilities		(22,501)		900		-		17,441		(4,160)
Interest income		-		64		-		94		158
Interest expense		-		(10,904)		-		(19,477)		(30,381)
Income (loss) before provision (benefit) for income taxes		(84,574)		(59,222)		(18,601)		(41,862)		(204,259)
Provision (benefit) for income taxes		2		(5,021)		(149)		(3,025)		(8,192)
Net income (loss)	$	(84,576)	$	(54,202)	$	(18,452)	$	(38,837)	$	(196,067)


	For the period from February 1, 2021 to June 11, 2021
	Churchill Capital Corp II		Pro Forma Adjustments			Pro Forma Condensed Combined
Revenues:
Total revenues	$	-				$	-
Operating expenses
Cost of revenues		-					-
Content and software development		-		-			-
Selling and marketing		-		-			-
General and administrative		-		-			-
Amortization of intangible assets		-		-			-
Impairment of goodwill		-		-			-
Recapitalization and transaction-related costs		59,121		-			59,121
Restructuring		-		-			-
Operating and formation costs		2,952		-			2,952
Total operating expenses		62,073		-			62,073
Operating income (loss):	$	(62,073)	$	-		$	(62,073)
Other income (expense), net		60		(60)	6A		-
(Loss) gain on derivative liabilities		(51,282)		28,781	6B		(22,501)
Reorganization items, net		-		-			-
Interest income		-		-			-
Interest expense		-		-			-
(Loss) income before provision (benefit) for income taxes		(113,295)		28,721			(84,574)
Provision (benefit) for income taxes		2		-			2
Net (loss) income	$	(113,297)	$	28,721		$	(84,576)


	For the period from February 1, 2021 through June 11, 2021
(amounts in thousands)	Skillsoft Predecessor Basis		Pro Forma Adjustments			Pro Forma Skillsoft
Revenues:
Total revenues	$	139,636	$	23,395	7A	$	163,031
Operating expenses
Cost of revenues		35,881		-			35,881
Content and software development		24,084		-			24,084
Selling and marketing		41,940		(5,742)	7B		36,198
General and administrative		17,217		-			17,217
Amortization of intangible assets		50,902		482	7C		51,384
Impairment of goodwill		-		-			-
Recapitalization and transaction-related costs		6,938		40,822	7D		47,760
Restructuring		(703)		-			(703)
Total operating expenses		176,259		35,561			211,820
Operating loss:	$	(36,623)	$	(12,166)		$	(48,789)
Other expense, net		(493)		-			(493)
Reorganization items, net		-		-			-
Loss on derivative instruments		900		-			900
Interest income		64		-			64
Interest expense, net		(16,820)		5,916	7E		(10,904)
Income (loss) before provision for income taxes		(52,972)		(6,250)			(59,222)
Provision for income taxes		(3,708)		(1,313)	7F		(5,021)
Net income (loss)	$	(49,264)	$	(4,938)		$	(54,202)


7A.	Reflects the elimination of deferred revenue “fresh start reporting” and fair value adjustments recorded in Skillsoft’s historical periods based on the assumed adoption of ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) as of February 1, 2021, which requires deferred revenue to be recognized using the revenue recognition guidance in Accounting Standards Codification Topic 606 rather than fair value.
7B.	Reflects the reduction of commissions expense based due to the assumed elimination of Skillsoft’s deferred contract acquisition costs as of February 1, 2021 which were replaced by the establishment of customer relationship assets and corresponding increases to amortization expense.
7C.	Reflects adjustments to amortization expense assuming as if the Skillsoft Merger had occurred as of February 1, 2021. Amortization expense is based on the fair value of the amortizable assets and the estimated economic useful life of the identified intangible assets.
7D.	Reflects transaction costs incurred by Skillsoft related to the acquisition by Churchill Capital Corp II. including, among others, fees paid for financial advisors, legal services and professional accounting services. These transaction costs were incurred during the period from June 11, 2021 to January 31, 2022 but have been reclassified to the earliest period presented as if the acquisitions had occurred on February 1, 2021.
7E.	Reflects adjustment to interest expense based on the current capital structure in place after completion of the Skillsoft Merger and Global Knowledge Merger.
7F.	Reflects adjustments for the tax impact on the pro forma adjustments at the US federal statutory tax rate of 21%. The prospective effective tax rate of the combined company could be significantly different than what is presented within the unaudited pro forma financial information based on several factors including geographic mix of our taxable income or legal entity structure and tax planning strategies, among other things.


	For the period from February 1, 2021 through June 11, 2021
(amounts in thousands)	Global Knowledge Predecessor Basis		Pro Forma Adjustments			Pro Forma Global Knowledge
Revenues:
Total revenues	$	71,932	$	(147)	8A	$	71,785
Operating expenses
Cost of revenues		34,698		(147)	8A		34,551
Content and software development		492		-			492
Selling and marketing		16,404		-			16,404
General and administrative		19,765		-			19,765
Amortization of intangible assets		2,646		14,388	8B		17,034
Impairment of goodwill		-		-			-
Recapitalization and transaction-related costs		-		-			-
Restructuring		2,764		-			2,764
Total operating expenses		76,769		14,241			91,010
Operating loss:	$	(4,837)	$	(14,388)		$	(19,225)
Other expense, net		624		-			624
Reorganization items, net		-		-			-
Loss on derivative instruments		-		-			-
Interest income		-		-			-
Interest expense, net		(11,970)		11,970	8C		-
Income (loss) before provision for income taxes		(16,183)		(2,418)			(18,601)
Provision for income taxes		359		(508)	8D		(149)
Net income (loss)	$	(16,542)	$	(1,910)		$	(18,452)


8A.	Reflects the elimination of historical intercompany revenues and cost of revenues between Skillsoft and Global Knowledge.
8B.	Reflects adjustments to amortization expense assuming as if the Global Knowledge Merger had occurred as of February 1, 2021. Amortization expense is based on the fair value of the amortizable assets and the estimated economic useful life of the identified intangible assets.
8C.	Reflects the elimination of interest expense for historical periods. See Note 5 for pro forma interest of the combined company.
8D.	Reflects adjustments for the tax impact on the pro forma adjustments at the US federal statutory tax rate of 21%. The prospective effective tax rate of the combined company could be significantly different than what is presented within the unaudited pro forma financial information based on several factors including geographic mix of our taxable income or legal entity structure and tax planning strategies, among other things.


	For the period from June 12, 2021 through January 31, 2022
(amounts in thousands)	Skillsoft Successor Basis		Pro Forma Adjustments			Pro Forma Skillsoft
Revenues:
Total revenues	$	427,754	$	-		$	427,754
Operating expenses
Cost of revenues		126,414		-			126,414
Content and software development		46,682		-			46,682
Selling and marketing		106,110		2,918	9A		109,028
General and administrative		72,004		-			72,004
Amortization of intangible assets		95,922		607	9B		96,529
Impairment of goodwill		-		-			-
Recapitalization and transaction-related costs		20,194		(8,723)	9C		11,471
Restructuring		3,696		-			3,696
Total operating expenses		471,022		(5,198)			465,824
Operating loss:	$	(43,268)	$	5,198		$	(38,070)
Other expense, net		(1,850)		-			(1,850)
Reorganization items, net		-		-			-
Loss on derivative instruments		17,441		-			17,441
Interest income		94		-			94
Interest expense, net		(24,366)		4,889	9D		(19,477)
Income (loss) before provision for income taxes		(51,946)		10,087			(41,862)
Provision for (benefit from) income taxes		(5,143)		2,118	9E		(3,025)
Net income (loss)	$	(46,806)	$	7,969		$	(38,837)


9A.	Reflects the increase in commissions expense due to the assumed elimination of Skillsoft’s deferred contract acquisition costs as of February 1, 2021 which were replaced by the establishment of customer relationship assets and corresponding increases to amortization expense.
9B.	Reflects adjustments to amortization expense assuming as if the Skillsoft Merger had occurred as of February 1, 2021. Amortization expense is based on the fair value of the amortizable assets and the estimated economic useful life of the identified intangible assets.
9C.	Reflects transaction costs incurred by Skillsoft related to the acquisition by Churchill Capital Corp II. including, among others, fees paid for financial advisors, legal services and professional accounting services. These transaction costs were incurred during the period from June 11, 2021 to January 31, 2022 but have been reclassified to the earliest period presented as if the acquisitions had occurred on February 1, 2021.
9D.	Reflects adjustment to interest expense based on the current capital structure in place after completion of the Skillsoft Merger and Global Knowledge Merger.
9E.	Reflects adjustments for the tax impact on the pro forma adjustments at the US federal statutory tax rate of 21%. The prospective effective tax rate of the combined company could be significantly different than what is presented within the unaudited pro forma financial information based on several factors including geographic mix of our taxable income or legal entity structure and tax planning strategies, among other things.