|
Delaware
(State or other jurisdiction of incorporation or organization) |
| |
6770
(Primary Standard Industrial Classification Code Number) |
| |
83-4388331
(I.R.S. Employer Identification Number) |
|
|
Ross A. Fieldston
Raphael M. Russo Kenneth M. Schneider Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Telephone: (212) 373-3000 |
| |
John Frederick
Software Luxembourg Holding S.A. Bijou, 17 Boulevard Raiffeisen L-2411 Luxembourg Grand Duchy of Luxembourg R.C.S Luxembourg: B246188 Telephone: (857) 317-7700 |
| |
Jaclyn L. Cohen
Mariel E. Cruz Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-8000 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☐
|
|
| | | |
Emerging growth company
☒
|
|
| | ||||||||||||||||||||||||||||
Title of each class of securities to be
registered |
| | |
Amount
to be registered |
| | |
Proposed maximum
offering price per share |
| | |
Proposed maximum
aggregate offering price |
| | |
Amount of
registration fee |
| ||||||||||||
Class A Common Stock, par value $0.0001 per share
|
| | | | | 28,500,000(1) | | | | | | $ | 10.63 | | | | | | $ | 302,955,000(2) | | | | | | $ | 33,052,39(3) | | |
Class C Common Stock, par value $0.0001 per share
|
| | | | | 3,840,000(4) | | | | | | $ | 136.72 | | | | | | $ | 525,000,000(5) | | | | | | $ | 57,277.50(3) | | |
| | | | | |
|
Michael Klein
Chief Executive Officer and Chairman of the Board of Directors Churchill Capital Corp II |
| |
Ronald W. Hovsepian
Director — Authorised Signatory Software Luxembourg Holding S.A |
|
| | |
Page
|
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| | | | 24 | | | |
| | | | 25 | | | |
| | | | 28 | | | |
Unaudited Historical Comparative and Pro Forma Combined Per Share Data of Churchill and Skillsoft
|
| | | | 0 | | |
| | | | 32 | | | |
| | | | 33 | | | |
| | | | 35 | | | |
| | | | 62 | | | |
| | | | 92 | | | |
| | | | 100 | | | |
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| | | | 130 | | | |
| | | | 135 | | | |
| | | | 148 | | | |
| | | | 154 | | | |
| | | | 157 | | | |
| | | | 184 | | | |
| | | | 187 | | | |
| | | | 191 | | | |
| | | | 198 | | |
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Page
|
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| | | | 199 | | | |
| | | | 215 | | | |
| | | | 244 | | | |
| | | | 245 | | | |
| | | | 246 | | | |
| | | | 247 | | | |
| | | | 263 | | | |
| | | | 267 | | | |
| | | | 272 | | | |
| | | | 279 | | | |
| | | | 281 | | | |
| | | | 294 | | | |
| | | | 298 | | | |
| | | | 302 | | | |
| | | | 303 | | | |
| | | | 303 | | | |
| | | | 303 | | | |
| | | | 303 | | | |
| | | | F-1 | | | |
| | | | A-1 | | | |
| | | | B-1 | | | |
| | | | C-1 | | | |
| | | | D-1 | | | |
| | | | E-1 | | |
| | |
No redemptions
|
| |
Maximum redemptions
|
| ||||||||||||||||||
| | |
Number of
Shares |
| |
Percentage
of Outstanding Shares |
| |
Number of
Shares |
| |
Percentage of
Outstanding Shares |
| ||||||||||||
| | |
(in thousands)
|
| | | | | | | |
(in thousands)
|
| | | | | | | ||||||
Former equityholders of Skillsoft
|
| | | | 28,500 | | | | | | 17% | | | | | | 28,500 | | | | | | 26% | | |
Churchill’s public stockholders(1)
|
| | | | 69,000 | | | | | | 42% | | | | | | 13,260 | | | | | | 12% | | |
The Sponsor
|
| | | | 17,250 | | | | | | 10% | | | | | | 17,250 | | | | | | 16% | | |
PIPE Investors(2)
|
| | | | 51,000 | | | | | | 31% | | | | | | 51,000 | | | | | | 46% | | |
Total(3) | | | | | 165,750 | | | | | | 100% | | | | | | 110,010 | | | | | | 100% | | |
| | |
No redemptions
|
| |
Maximum redemptions
|
| ||||||||||||||||||
| | |
Number of
Shares |
| |
Percentage
of Outstanding Shares |
| |
Number of
Shares |
| |
Percentage of
Outstanding Shares |
| ||||||||||||
| | |
(in thousands)
|
| | | | | | | |
(in thousands)
|
| | | | | | | ||||||
Former equityholders of Skillsoft
|
| | | | 28,500 | | | | | | 23% | | | | | | 28,500 | | | | | | 26% | | |
Churchill’s public stockholders(1)
|
| | | | 69,000 | | | | | | 54% | | | | | | 52,842 | | | | | | 48% | | |
The Sponsor
|
| | | | 17,250 | | | | | | 14% | | | | | | 17,250 | | | | | | 16% | | |
PIPE Investors(2)
|
| | | | 11,000 | | | | | | 9% | | | | | | 11,000 | | | | | | 10% | | |
Total(3) | | | | | 125,750 | | | | | | 100% | | | | | | 109,592 | | | | | | 100% | | |
| | |
Nine Months Ended September 30,
2020 |
| |
For the
Period from April 11, 2019 (Inception) Through September 30, 2019 |
| |
For the
Period from April 11, 2019 (Inception) Through December 31, 2019 |
| |||||||||
Net income
|
| | | $ | 1,303,184 | | | | | $ | 2,506,354 | | | | | $ | 4,693,042 | | |
Less: Income attributable to common stock subject to possible redemption
|
| | | | (1,612,947) | | | | | | (2,489,595) | | | | | | (4,868,674) | | |
Adjusted net income (loss)
|
| | | $ | (309,763) | | | | | $ | 16,759 | | | | | $ | (175,632) | | |
Weighted average shares outstanding, basic and diluted(1)
|
| | | | 19,647,636 | | | | | | 17,433,711 | | | | | | 18,180,430 | | |
Basic and diluted net income (loss) per common share
|
| | | $ | (0.02) | | | | | $ | 0.00 | | | | | $ | (0.01) | | |
| | |
September 30, 2020
|
| |
December 31, 2019
|
| ||||||
Balance Sheet Data (end of period): | | | | ||||||||||
Cash
|
| | | $ | 1,744,991 | | | | | $ | 2,238,275 | | |
Prepaid income taxes
|
| | | | — | | | | | | 27,140 | | |
Prepaid expenses
|
| | | | 162,225 | | | | | | 275,525 | | |
Marketable securities held in Trust Account
|
| | | | 697,283,649 | | | | | | 695,295,418 | | |
Total assets
|
| | | | 699,190,865 | | | | | | 697,836,358 | | |
Total liabilities
|
| | | | 21,689,446 | | | | | | 21,638,123 | | |
Common stock subject to possible redemption
|
| | | | 672,501,414 | | | | | | 671,198,229 | | |
Total stockholders’ equity
|
| | | | 5,000,005 | | | | | | 5,000,006 | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||||||||||||||||||||||||||
| | |
Aug 28,
2020 through Oct 31, 2020 |
| | |
Feb 1, 2020
through Aug 27, 2020 |
| |
Nine
Months Ended October 31, 2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues(1)
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 386,010 | | | | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 15,882 | | | | | | | 52,160 | | | | | | 71,816 | | | | | | 96,044 | | | | | | 98,636 | | | | | | 106,274 | | |
Content and software development
|
| | | | 10,919 | | | | | | | 38,986 | | | | | | 49,977 | | | | | | 67,951 | | | | | | 57,332 | | | | | | 60,500 | | |
Selling and marketing
|
| | | | 18,193 | | | | | | | 75,028 | | | | | | 99,444 | | | | | | 140,785 | | | | | | 150,179 | | | | | | 143,898 | | |
General and administrative
|
| | | | 10,075 | | | | | | | 37,455 | | | | | | 52,031 | | | | | | 73,600 | | | | | | 51,421 | | | | | | 45,344 | | |
Recapitalization and transaction-
related costs |
| | | | 8,225 | | | | | | | 32,099 | | | | | | 6,009 | | | | | | — | | | | | | — | | | | | | — | | |
Amortization of intangible assets
|
| | | | 15,890 | | | | | | | 34,378 | | | | | | 75,076 | | | | | | 96,359 | | | | | | 151,752 | | | | | | 194,739 | | |
Impairment of goodwill and intangible assets
|
| | | | — | | | | | | | 332,376 | | | | | | 438,659 | | | | | | 440,598 | | | | | | 16,094 | | | | | | — | | |
Restructuring
|
| | | | 80 | | | | | | | 1,179 | | | | | | 1,395 | | | | | | 1,900 | | | | | | 2,073 | | | | | | 2,524 | | |
Total operating expenses
|
| | | | 79,264 | | | | | | | 603,661 | | | | | | 794,407 | | | | | | 917,237 | | | | | | 527,487 | | | | | | 553,279 | | |
Operating (loss) income
|
| | | | (42,291) | | | | | | | (329,810) | | | | | | (408,397) | | | | | | (403,216) | | | | | | 6,654 | | | | | | (5,970) | | |
Interest expense, net
|
| | | | (7,910) | | | | | | | (168,236) | | | | | | (319,973) | | | | | | (429,657) | | | | | | (395,842) | | | | | | (346,186) | | |
Reorganization items, net
|
| | | | — | | | | | | | 3,329,245 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other income (expense)
|
| | | | 3,617 | | | | | | | 1,268 | | | | | | (4,750) | | | | | | (5,120) | | | | | | (5,624) | | | | | | 8,812 | | |
Loss before provision (benefit) for income taxes
|
| | | | (46,584) | | | | | | | 2,832,467 | | | | | | (733,120) | | | | | | (837,993) | | | | | | (394,812) | | | | | | (343,344) | | |
Provision for income taxes
|
| | | | (7,870) | | | | | | | 68,455 | | | | | | 7,897 | | | | | | 11,212 | | | | | | 5,027 | | | | | | 1,373 | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | | | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||||||||
| | |
As of October 31,
|
| | |
As of January 31,
|
| ||||||||||||
| | |
2020
|
| | |
2020
|
| |
2019
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 70,836 | | | | | | $ | 18,799 | | | | | $ | 15,584 | | |
Accounts receivable, net
|
| | | | 99,122 | | | | | | | 193,024 | | | | | | 217,354 | | |
Total current assets(1)
|
| | | | 204,009 | | | | | | | 263,250 | | | | | | 300,278 | | |
Accounts payable and accrued liabilities(1)(2)
|
| | | | 62,926 | | | | | | | 68,790 | | | | | | 76,404 | | |
Term loans and related-party debt and accrued interest
|
| | | | 514,950 | | | | | | | 4,238,068 | | | | | | 3,935,568 | | |
Total shareholder’s equity (deficit)
|
| | | | 635,827 | | | | | | | (2,761,744) | | | | | | (1,917,325) | | |
(amounts in thousands)
|
| |
For the year
ended December 31, 2019* |
| |
For the Nine
Months ended September 30, 2020* |
| ||||||
Total pro forma combined revenue(1)
|
| | | $ | 645,690 | | | | | $ | 489,241 | | |
Reversal of pro forma adjustments:
|
| | | | | | | | | | | | |
Skillsoft fresh-start reporting
|
| | | | 121,488 | | | | | | (38,692) | | |
Global Knowledge purchase accounting
|
| | | | 5,862 | | | | | | — | | |
Elimination of inter-company revenues
|
| | | | 1,146 | | | | | | 588 | | |
Plus impact of Skillsoft reorganization, primarily related to deferred revenue
|
| | | | — | | | | | | 44,392 | | |
Combined Adjusted revenue(3)
|
| | | $ | 774,186 | | | | | $ | 495,529 | | |
Skillsoft Adjusted Revenue(2)
|
| | | $ | 514,021 | | | | | $ | 355,216 | | |
Global Knowledge historical revenue
|
| | | | 260,165 | | | | | | 140,313 | | |
Combined Adjusted revenue(3)
|
| | | $ | 774,186 | | | | | $ | 495,529 | | |
Total pro forma combined net (loss) income(4)
|
| | | $ | (703,320) | | | | | $ | 2,754,706 | | |
Reversal of pro forma adjustments:
|
| | | | (338,952) | | | | | | (86,389) | | |
Adjustments based on historical financial statements:(5)
|
| | | | 1,036,538 | | | | | | (2,561,688) | | |
Pro forma combined EBITDA(6)
|
| | | $ | (5,734) | | | | | $ | 106,629 | | |
Reversal of Churchill purchase accounting, as reflected in pro forma
|
| | | | 21,458 | | | | | | (162) | | |
Reversal of Skillsoft fresh-start reporting, as reflected in pro forma
|
| | | | 110,576 | | | | | | (41,647) | | |
Reversal of Skillsoft purchase accounting, as reflected in pro forma
|
| | | | 18,200 | | | | | | — | | |
Reversal of Global Knowledge purchase accounting, as reflected in pro forma
|
| | | | 15,789 | | | | | | — | | |
Plus other adjustments(7)
|
| | | | 58,325 | | | | | | 66,278 | | |
Combined Adjusted EBITDA(8)
|
| | | $ | 218,614 | | | | | $ | 131,098 | | |
| | |
Pro Forma Condensed Combined
|
| |||||||||
(in thousands, except share and per share data)
|
| |
No
Redemptions(1) |
| |
Max
Redemptions(2) |
| ||||||
Summary Unaudited Pro Forma Condensed Combined Statement of Operations: | | | | | | | | | | | | | |
Year ended December 31, 2019
|
| | | $ | 645,690 | | | | | $ | 645,690 | | |
Revenue
|
| | | | (595,222) | | | | | | (595,222) | | |
Operating loss
|
| | | | (703,320) | | | | | | (703,320) | | |
Net (loss) income
|
| | | $ | (4.19) | | | | | $ | (6.01) | | |
Net (loss) earnings per share – basic and diluted
|
| | | | 167,750,000 | | | | | | 116,957,798 | | |
Weighted-average Class A shares outstanding – basic and diluted
|
| | | | | | | | | | | | |
Summary Unaudited Pro Forma Condensed Combined Statement of Operations: | | | | | | | | | | | | | |
Nine months ended September 30, 2020 | | | | | | | | | | | | | |
Revenue
|
| | | $ | 489,241 | | | | | $ | 489,241 | | |
Operating loss
|
| | | | (450,565) | | | | | | (450,565) | | |
Net (loss) income
|
| | | | 2,754,706 | | | | | | 2,754,706 | | |
Net (loss) earnings per share – basic and diluted
|
| | | $ | 16.42 | | | | | $ | 23.55 | | |
Weighted-average Class A shares outstanding – basic and diluted
|
| | | | 167,750,000 | | | | | | 116,957,798 | | |
| | |
Pro Forma Condensed Combined
|
| |||||||||
(in thousands, except share and per share data)
|
| |
No
Redemptions(1) |
| |
Max
Redemptions(2) |
| ||||||
Summary Unaudited Pro Forma Condensed Combined Balance Sheet: | | | | | | | | | | | | | |
As of September 30, 2020 | | | | | | | | | | | | | |
Total current assets
|
| | | $ | 737,725 | | | | | $ | 224,441 | | |
Total assets
|
| | | | 2,536,442 | | | | | | 2,023,158 | | |
Total current liabilities
|
| | | | 313,379 | | | | | | 313,379 | | |
Total liabilities
|
| | | | 1,068,586 | | | | | | 1,068,586 | | |
Total stockholders’ equity
|
| | | | 1,467,856 | | | | | | 954,572 | | |
| | | | | | | | |
Skillsoft
|
| |
Pro Forma Condensed Combined(1)
|
| |||||||||||||||
(in thousands, except share
and per share data) |
| |
Churchill
|
| |
Skillsoft
Predecessor(3) |
| |
Skillsoft
Successor(4) |
| |
No
Redemption |
| |
Max
Redemption |
| ||||||||||||
As of and for the year ended December 31, 2019
|
| | | | | | | | | | | | | | | | | | | | | | | |||||
Book value per share
|
| | | $ | 0.28 | | | | | $ | (27,589.85) | | | |
*
|
| | | | N/A(2) | | | | | | N/A(2) | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 18,180,430 | | | | | | 100,100 | | | |
*
|
| | | | 165,750,000 | | | | | | 110,010,027 | | |
Net (loss) earnings per share – basic
and diluted |
| | | $ | (0.01) | | | | | $ | (8,483.57) | | | |
*
|
| | | $ | (4.07) | | | | | $ | (6.14) | | |
As of and for the nine months ended September 30, 2020
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Book value per share
|
| | | $ | 0.25 | | | | | $ | 6,351.92 | | | |
$165.58 and $3,973.92
|
| | | $ | 0.01 | | | | | $ | 0.01 | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 19,647,636 | | | | | | 100,100 | | | |
3,840 and 160
|
| | | | 165,750,000 | | | | | | 110,010,027 | | |
Net (loss) earnings per share – basic
and diluted |
| | | $ | (0.02) | | | | | $ | 27,640.12 | | | |
$(11.21) and $27.19
|
| | | $ | 17.16 | | | | | $ | 25.86 | | |
| | |
No Redemptions
|
| |
Maximum Redemptions
|
| ||||||||||||||||||
Total Capitalization (in 000s)
|
| |
Shares
|
| |
%
|
| |
Shares
|
| |
%
|
| ||||||||||||
Skillsoft Shareholders
|
| | | | 28,500 | | | | | | 17% | | | | | | 28,500 | | | | | | 26% | | |
Churchill Public Shares*
|
| | | | 69,000 | | | | | | 42% | | | | | | 13,260 | | | | | | 12% | | |
Churchill Sponsor II LLC
|
| | | | 17,250 | | | | | | 10% | | | | | | 17,250 | | | | | | 16% | | |
PIPE Investors**
|
| | | | 51,000 | | | | | | 31% | | | | | | 51,000 | | | | | | 46% | | |
Total Churchill Class A shares***
|
| | | | 165,750 | | | | | | 100% | | | | | | 110,010 | | | | | | 100% | | |
| | |
Global Knowledge
No Redemptions |
| |
Global Knowledge
Maximum Redemptions |
| ||||||||||||||||||
Total Capitalization (in 000s)
|
| |
Shares
|
| |
%
|
| |
Shares
|
| |
%
|
| ||||||||||||
Skillsoft Shareholders
|
| | | | 28,500 | | | | | | 17% | | | | | | 28,500 | | | | | | 24% | | |
Churchill Public Shares*
|
| | | | 69,000 | | | | | | 42% | | | | | | 18,208 | | | | | | 15% | | |
Churchill Sponsor II LLC
|
| | | | 17,250 | | | | | | 10% | | | | | | 17,250 | | | | | | 15% | | |
PIPE Investors**
|
| | | | 51,000 | | | | | | 30% | | | | | | 51,000 | | | | | | 44% | | |
Lodbrok PIPE Investments
|
| | | | 2,000 | | | | | | 1% | | | | | | 2,000 | | | | | | 2% | | |
Total Churchill Class A shares***
|
| | | | 167,750 | | | | | | 100% | | | | | | 116,958 | | | | | | 100% | | |
| | |
As of
September 30, 2020 |
| |
As of October 31,
2020 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
As of September 30, 2020
|
| |||||||||||||||||||||||||||
| | |
Churchill
Capital Corp II |
| |
Skillsoft
|
| |
Pro Forma
Adjustments (Note 4) |
| | | | | | | |
Skillsoft
Purchase Accounting Adjustments (Note 5) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,745 | | | | | $ | 70,836 | | | | | $ | 697,284 | | | | |
|
4A
|
| | | | $ | (505,000) | | | | |
|
5A
|
| | | | $ | 708,692 | | | | | $ | (563,284) | | | | |
|
4F
|
| | | | $ | 145,408 | | |
| | | | | | | | | | | | | | | | | (21,371) | | | | |
|
4B
|
| | | | | (15,700) | | | | |
|
5I
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 500,000 | | | | |
|
4C
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (19,102) | | | | |
|
4D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted cash
|
| | | | — | | | | | | 3,732 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,732 | | | | | | — | | | | | | | | | | | | 3,732 | | |
Accounts receivable (net)
|
| | | | — | | | | | | 99,122 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 99,122 | | | | | | — | | | | | | | | | | | | 99,122 | | |
Prepaid expenses and other current assets
|
| | | | 162 | | | | | | 30,319 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 30,481 | | | | | | — | | | | | | | | | | | | 30,481 | | |
Total Current Assets
|
| | | | 1,907 | | | | | | 204,009 | | | | | | 1,156,811 | | | | | | | | | | | | (520,700) | | | | | | | | | | | | 842,027 | | | | | | (563,284) | | | | | | | | | | | | 278,743 | | |
Property and equipment, net
|
| | | | — | | | | | | 14,881 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 14,881 | | | | | | — | | | | | | | | | | | | 14,881 | | |
Intangible assets, net
|
| | | | — | | | | | | 751,103 | | | | | | — | | | | | | | | | | | | 64,584 | | | | |
|
5D
|
| | | | | 815,687 | | | | | | — | | | | | | | | | | | | 815,687 | | |
Goodwill
|
| | | | — | | | | | | 495,198 | | | | | | — | | | | | | | | | | | | 139,617 | | | | |
|
5H
|
| | | | | 634,815 | | | | | | — | | | | | | | | | | | | 634,815 | | |
Right of use assets
|
| | | | — | | | | | | 16,576 | | | | | | — | | | | | | | | | | | | 2,246 | | | | |
|
5F
|
| | | | | 18,822 | | | | | | — | | | | | | | | | | | | 18,822 | | |
Other assets
|
| | | | — | | | | | | 5,672 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 5,672 | | | | | | — | | | | | | | | | | | | 5,672 | | |
Deferred tax assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Marketable securities held in Trust Account
|
| | | | 697,284 | | | | | | — | | | | | | (697,284) | | | | |
|
4A
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
TOTAL ASSETS
|
| | | $ | 699,191 | | | | | $ | 1,487,439 | | | | | $ | 459,527 | | | | | | | | | | | $ | (314,253) | | | | | | | | | | | $ | 2,331,904 | | | | | $ | (563,284) | | | | | | | | | | | $ | 1,768,620 | | |
Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accrued expenses
|
| | | $ | 216 | | | | | $ | 25,001 | | | | | $ | 2,356 | | | | |
|
4D
|
| | | | $ | 2,500 | | | | |
|
5I
|
| | | | $ | 30,073 | | | | | $ | — | | | | | | | | | | | $ | 30,073 | | |
Accounts payable
|
| | | | — | | | | | | 10,685 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 10,685 | | | | | | — | | | | | | | | | | | | 10,685 | | |
Accrued compensation
|
| | | | — | | | | | | 27,240 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 27,240 | | | | | | — | | | | | | | | | | | | 27,240 | | |
Deferred revenues
|
| | | | — | | | | | | 129,527 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 129,527 | | | | | | — | | | | | | | | | | | | 129,527 | | |
Current maturities of long-term debt
|
| | | | — | | | | | | 3,900 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,900 | | | | | | — | | | | | | | | | | | | 3,900 | | |
Lease liability – short-term
|
| | | | — | | | | | | 4,675 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 4,675 | | | | | | — | | | | | | | | | | | | 4,675 | | |
Credit facility
|
| | | | — | | | | | | 20,119 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 20,119 | | | | | | — | | | | | | | | | | | | 20,119 | | |
Income taxes payable
|
| | | | 103 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 103 | | | | | | — | | | | | | | | | | | | 103 | | |
Total Current Liabilities
|
| | | | 319 | | | | | | 221,147 | | | | | | 2,356 | | | | | | | | | | | | 2,500 | | | | | | | | | | | | 226,322 | | | | | | — | | | | | | | | | | | | 226,322 | | |
Deferred tax liabilities
|
| | | | — | | | | | | 95,717 | | | | | | — | | | | | | | | | | | | 14,034 | | | | |
|
5G
|
| | | | | 109,751 | | | | | | — | | | | | | | | | | | | 109,751 | | |
Lease liability – long-term
|
| | | | — | | | | | | 14,983 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 14,983 | | | | | | — | | | | | | | | | | | | 14,983 | | |
Deferred revenue -non-current
|
| | | | — | | | | | | 1,297 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,297 | | | | | | — | | | | | | | | | | | | 1,297 | | |
Other long-term liabilities
|
| | | | — | | | | | | 7,418 | | | | | | — | | | | | | | | | | | | 20,000 | | | | |
|
5C
|
| | | | | 27,418 | | | | | | — | | | | | | | | | | | | 27,418 | | |
Long term debt
|
| | | | — | | | | | | 511,050 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 511,050 | | | | | | — | | | | | | | | | | | | 511,050 | | |
Deferred underwriting fee payable
|
| | | | 21,371 | | | | | | — | | | | | | (21,371) | | | | |
|
4B
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Total Liabilities
|
| | | | 21,690 | | | | | | 851,612 | | | | | | (19,015) | | | | | | | | | | | | 36,534 | | | | | | | | | | | | 890,821 | | | | | | — | | | | | | | | | | | | 890,821 | | |
Commitments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A Common stock subject to possible redemption
|
| | | | 672,501 | | | | | | — | | | | | | (672,501) | | | | |
|
4E
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Class A Common stock, $0.0001 par value
|
| | | | — | | | | | | — | | | | | | 5 | | | | |
|
4C
|
| | | | | 3 | | | | |
|
5B
|
| | | | | 15 | | | | | | (6) | | | | |
|
4F
|
| | | | | 9 | | |
| | | | | | | | | | | | | | | | | 7 | | | | |
|
4E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class B Common stock, $0.0001 par value
|
| | | | 2 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 2 | | | | | | — | | | | | | | | | | | | 2 | | |
Successor Class A and Class B shares
|
| | | | — | | | | | | 40 | | | | | | — | | | | | | | | | | | | (40) | | | | |
|
5E
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accum. other comprehensive income (loss)
|
| | | | — | | | | | | 168 | | | | | | — | | | | | | | | | | | | (168) | | | | |
|
5E
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Additional paid-in capital
|
| | | | 219 | | | | | | 674,333 | | | | | | 499,995 | | | | |
|
4C
|
| | | | | (674,333) | | | | |
|
5E
|
| | | | | 1,475,945 | | | | | | (563,278) | | | | |
|
4F
|
| | | | | 912,667 | | |
| | | | | | | | | | | | | | | | | 672,494 | | | | |
|
4E
|
| | | | | 303,237 | | | | |
|
5B
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Retained earnings (accumulated deficit)
|
| | | | 4,779 | | | | | | (38,714) | | | | | | (21,458) | | | | |
|
4D
|
| | | | | 38,714 | | | | |
|
5E
|
| | | | | (34,879) | | | | | | — | | | | | | | | | | | | (34,879) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (18,200) | | | | |
|
5I
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Stockholders’ Equity
|
| | | | 5,000 | | | | | | 635,827 | | | | | | 1,151,043 | | | | | | | | | | | | (350,787) | | | | | | | | | | | | 1,441,083 | | | | | | (563,284) | | | | | | | | | | | | 877,799 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 699,191 | | | | | $ | 1,487,439 | | | | | $ | 459,527 | | | | | | | | | | | $ | (314,253) | | | | | | | | | | | $ | 2,331,904 | | | | | $ | (563,284) | | | | | | | | | | | $ | 1,768,620 | | |
|
| | |
As of
September 30, 2020 |
| |
As of
October 2, 2020 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of September 30, 2020, including Global Knowledge
|
| |||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Global
Knowledge |
| |
Pro Forma
Adjustments (Note 4) |
| | | | | | | |
Accounting
Policies, Reclassifications, and Eliminations (Note 6) |
| | | | | | | |
Global
Knowledge Purchase Accounting Adjustments |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Global Knowledge Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Global Knowledge Maximum Redemptions) |
| ||||||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 708,692 | | | | | $ | 19,836 | | | | | $ | 19,600 | | | | |
|
4G
|
| | | | $ | (250) | | | | |
|
6B
|
| | | | $ | (171,500) | | | | |
|
7A
|
| | | | $ | 566,751 | | | | | $ | (513,284) | | | | |
|
4H
|
| | | | $ | 53,467 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (9,627) | | | | |
|
7J
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted cash
|
| | | | 3,732 | | | | | | — | | | | | | — | | | | | | | | | | | | 250 | | | | |
|
6B
|
| | | | | — | | | | | | | | | | | | 3,982 | | | | | | — | | | | | | | | | | | | 3,982 | | |
Accounts receivable (net)
|
| | | | 99,122 | | | | | | 25,441 | | | | | | — | | | | | | | | | | | | (35) | | | | |
|
6C
|
| | | | | — | | | | | | | | | | | | 124,528 | | | | | | — | | | | | | | | | | | | 124,528 | | |
Prepaid expenses and other current
assets |
| | | | 30,481 | | | | | | 12,738 | | | | | | — | | | | | | | | | | | | (755) | | | | |
|
6A
|
| | | | | — | | | | | | | | | | | | 42,464 | | | | | | — | | | | | | | | | | | | 42,464 | | |
Total Current Assets
|
| | | | 842,027 | | | | | | 58,015 | | | | | $ | 19,600 | | | | | | | | | | | | (790) | | | | | | | | | | | | (181,127) | | | | | | | | | | | | 737,725 | | | | | | (513,284) | | | | | | | | | | | | 224,441 | | |
Property and equipment, net
|
| | | | 14,881 | | | | | | 7,062 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 21,943 | | | | | | — | | | | | | | | | | | | 21,943 | | |
Intangible assets, net
|
| | | | 815,687 | | | | | | 45,588 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 127,002 | | | | |
|
7E
|
| | | | | 988,277 | | | | | | — | | | | | | | | | | | | 988,277 | | |
Goodwill
|
| | | | 634,815 | | | | | | 125,614 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (11,800) | | | | |
|
7I
|
| | | | | 748,629 | | | | | | — | | | | | | | | | | | | 748,629 | | |
Right of use assets
|
| | | | 18,822 | | | | | | — | | | | | | — | | | | | | | | | | | | 9,934 | | | | |
|
6A
|
| | | | | 786 | | | | |
|
7G
|
| | | | | 29,548 | | | | | | — | | | | | | | | | | | | 29,548 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | |
|
6B
|
| | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | |
Other assets
|
| | | | 5,672 | | | | | | 3,808 | | | | | | — | | | | | | | | | | | | (31) | | | | |
|
6B
|
| | | | | — | | | | | | | | | | | | 9,449 | | | | | | — | | | | | | | | | | | | 9,449 | | |
Deferred tax assets
|
| | | | — | | | | | | 871 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 871 | | | | | | — | | | | | | | | | | | | 871 | | |
Marketable securities held in Trust Account
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
TOTAL ASSETS
|
| | | $ | 2,331,904 | | | | | $ | 240,958 | | | | | $ | 19,600 | | | | | | | | | | | $ | 9,119 | | | | | | | | | | | $ | (65,139) | | | | | | | | | | | $ | 2,536,442 | | | | | $ | (513,284) | | | | | | | | | | | $ | 2,023,158 | | |
Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accrued expenses
|
| | | $ | 30,073 | | | | | $ | 43,122 | | | | | $ | — | | | | | | | | | | | $ | (10,278) | | | | |
|
6B
|
| | | | $ | (16,294) | | | | |
|
7C
|
| | | | $ | 46,923 | | | | | $ | — | | | | | | | | | | | $ | 46,923 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 300 | | | | |
|
7J
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 10,685 | | | | | | 37,549 | | | | | | — | | | | | | | | | | | | (35) | | | | |
|
6C
|
| | | | | — | | | | | | | | | | | | 48,199 | | | | | | — | | | | | | | | | | | | 48,199 | | |
Accrued compensation
|
| | | | 27,240 | | | | | | — | | | | | | — | | | | | | | | | | | | 9,499 | | | | |
|
6B
|
| | | | | — | | | | | | | | | | | | 36,739 | | | | | | — | | | | | | | | | | | | 36,739 | | |
Deferred revenues
|
| | | | 129,527 | | | | | | 23,604 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (5,862) | | | | |
|
7H
|
| | | | | 147,269 | | | | | | — | | | | | | | | | | | | 147,269 | | |
Current maturities of long-term debt
|
| | | | 3,900 | | | | | | 209,782 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (209,782) | | | | |
|
7C
|
| | | | | 3,900 | | | | | | — | | | | | | | | | | | | 3,900 | | |
Lease liability – short-term
|
| | | | 4,675 | | | | | | — | | | | | | — | | | | | | | | | | | | 4,673 | | | | |
|
6A
|
| | | | | — | | | | | | | | | | | | 9,348 | | | | | | — | | | | | | | | | | | | 9,348 | | |
Credit facility
|
| | | | 20,119 | | | | | | 35,000 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (35,000) | | | | |
|
7C
|
| | | | | 20,119 | | | | | | — | | | | | | | | | | | | 20,119 | | |
Income taxes payable
|
| | | | 103 | | | | | | — | | | | | | — | | | | | | | | | | | | 779 | | | | |
|
6B
|
| | | | | — | | | | | | | | | | | | 882 | | | | | | — | | | | | | | | | | | | 882 | | |
Total Current Liabilities
|
| | | | 226,322 | | | | | | 349,057 | | | | | | — | | | | | | | | | | | | 4,638 | | | | | | | | | | | | (266,638) | | | | | | | | | | | | 313,379 | | | | | | — | | | | | | | | | | | | 313,379 | | |
Deferred tax liabilities
|
| | | | 109,751 | | | | | | 308 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 11,563 | | | | |
|
7K
|
| | | | | 121,622 | | | | | | — | | | | | | | | | | | | 121,622 | | |
Lease liability – long-term
|
| | | | 14,983 | | | | | | — | | | | | | — | | | | | | | | | | | | 6,965 | | | | |
|
6A
|
| | | | | 351 | | | | |
|
7G
|
| | | | | 22,299 | | | | | | — | | | | | | | | | | | | 22,299 | | |
Deferred revenue -non-current
|
| | | | 1,297 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,297 | | | | | | — | | | | | | | | | | | | 1,297 | | |
Other long-term liabilities
|
| | | | 27,418 | | | | | | 4,005 | | | | | | — | | | | | | | | | | | | (2,459) | | | | |
|
6A
|
| | | | | — | | | | | | | | | | | | 28,939 | | | | | | — | | | | | | | | | | | | 28,939 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (25) | | | | |
|
6B
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long term debt
|
| | | | 511,050 | | | | | | 11,181 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (11,181) | | | | |
|
7C
|
| | | | | 581,050 | | | | | | — | | | | | | | | | | | | 581,050 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 70,000 | | | | |
|
7B
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred underwriting fee payable
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Total Liabilities
|
| | | | 890,821 | | | | | | 364,551 | | | | | | — | | | | | | | | | | | | 9,119 | | | | | | | | | | | | (195,905) | | | | | | | | | | | | 1,068,586 | | | | | | — | | | | | | | | | | | | 1,068,586 | | |
Commitments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A Common stock subject to possible redemption
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Stockholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Class A Common stock, $0.0001 par value
|
| | | | 15 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 15 | | | | | | (5) | | | | |
|
4H
|
| | | | | 10 | | |
Class B Common stock, $0.0001 par value
|
| | | | 2 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 2 | | | | | | — | | | | | | | | | | | | 2 | | |
Successor Class A and Class B
shares |
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accum. other comprehensive income (loss)
|
| | | | — | | | | | | 293 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (293) | | | | |
|
7F
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Additional paid-in capital
|
| | | | 1,475,945 | | | | | | 242,375 | | | | | $ | 19,600 | | | | |
|
4G
|
| | | | | — | | | | | | | | | | | | 17,100 | | | | |
|
7D
|
| | | | | 1,512,645 | | | | | | (513,279) | | | | |
|
4H
|
| | | | | 999,366 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (242,375) | | | | |
|
7F
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Retained earnings (accumulated deficit)
|
| | | | (34,879) | | | | | | (366,261) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 366,261 | | | | |
|
7F
|
| | | | | (44,806) | | | | | | — | | | | | | | | | | | | (44,806) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (9,927) | | | | |
|
7J
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Stockholders’ Equity
|
| | | | 1,441,083 | | | | | | (123,593) | | | | | $ | 19,600 | | | | | | | | | | | | — | | | | | | | | | | | | 130,766 | | | | | | | | | | | | 1,467,856 | | | | | | (513,284) | | | | | | | | | | | | 954,572 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 2,331,904 | | | | | $ | 240,958 | | | | | $ | 19,600 | | | | | | | | | | | $ | 9,119 | | | | | | | | | | | $ | (65,139) | | | | | | | | | | | $ | 2,536,442 | | | | | $ | (513,284) | | | | | | | | | | | $ | 2,023,158 | | |
|
| | |
For the period
from April 11, 2019 (inception) through December 31, 2019 |
| |
For the year
ended January 31, 2020 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2019
|
| |||||||||||||||||||||||||||
| | |
Churchill
Capital Corp II |
| |
Pro Forma
Skillsoft As Adjusted (Note 2) |
| |
Pro Forma
Adjustments (Note 4) |
| | | | | | | |
Skillsoft
Purchase Accounting Adjustments (Note 5) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | — | | | | | $ | 392,533 | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 392,533 | | | | | $ | — | | | | | | | | | | | $ | 392,533 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | — | | | | | | 96,044 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 96,044 | | | | | | — | | | | | | | | | | | | 96,044 | | |
Content and software development
|
| | | | — | | | | | | 67,951 | | | | | | — | | | | | | | | | | | | 240 | | | | |
|
5AA
|
| | | | | 68,191 | | | | | | — | | | | | | | | | | | | 68,191 | | |
Selling and marketing
|
| | | | — | | | | | | 129,873 | | | | | | — | | | | | | | | | | | | 247 | | | | |
|
5AA
|
| | | | | 130,120 | | | | | | — | | | | | | | | | | | | 130,120 | | |
General and administrative
|
| | | | — | | | | | | 73,600 | | | | | | 21,458 | | | | |
|
4BB
|
| | | | | 76 | | | | |
|
5AA
|
| | | | | 113,334 | | | | | | — | | | | | | | | | | | | 113,334 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,200 | | | | |
|
5EE
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization of intangible assets
|
| | | | — | | | | | | 101,403 | | | | | | — | | | | | | | | | | | | 6,558 | | | | |
|
5BB
|
| | | | | 107,961 | | | | | | — | | | | | | | | | | | | 107,961 | | |
Impairment of goodwill
|
| | | | — | | | | | | 440,598 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 440,598 | | | | | | — | | | | | | | | | | | | 440,598 | | |
Restructuring
|
| | | | — | | | | | | 1,900 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,900 | | | | | | — | | | | | | | | | | | | 1,900 | | |
Operating and formation
costs |
| | | | 745 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 745 | | | | | | — | | | | | | | | | | | | 745 | | |
Total operating expenses
|
| | | | 745 | | | | | | 911,369 | | | | | | 21,458 | | | | | | | | | | | | 25,321 | | | | | | | | | | | | 958,893 | | | | | | — | | | | | | | | | | | | 958,893 | | |
Operating loss:
|
| | | $ | (745) | | | | | $ | (518,836) | | | | | $ | (21,458) | | | | | | | | | | | $ | (25,321) | | | | | | | | | | | $ | (566,360) | | | | | $ | — | | | | | | | | | | | $ | (566,360) | | |
Other expense, net
|
| | | | 6,685 | | | | | | (1,058) | | | | | | (6,685) | | | | |
|
4AA
|
| | | | | — | | | | | | | | | | | | (1,058) | | | | | | — | | | | | | | | | | | | (1,058) | | |
Loss on derivative instruments
|
| | | | — | | | | | | (4,062) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (4,062) | | | | | | — | | | | | | | | | | | | (4,062) | | |
Interest income
|
| | | | — | | | | | | 306 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 306 | | | | | | — | | | | | | | | | | | | 306 | | |
Interest expense
|
| | | | — | | | | | | (44,667) | | | | | | — | | | | | | | | | | | | (1,530) | | | | |
|
5CC
|
| | | | | (46,197) | | | | | | — | | | | | | | | | | | | (46,197) | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 5,940 | | | | | | (568,317) | | | | | | (28,143) | | | | | | | | | | | | (26,851) | | | | | | | | | | | | (617,371) | | | | | | — | | | | | | | | | | | | (617,371) | | |
Provision (benefit) for income taxes
|
| | | | 1,247 | | | | | | 67,844 | | | | | | (5,910) | | | | | | | | | | | | (5,638) | | | | |
|
5DD
|
| | | | | 57,543 | | | | | | — | | | | | | | | | | | | 57,543 | | |
Net income (loss)
|
| | | $ | 4,693 | | | | | $ | (636,161) | | | | | $ | (22,233) | | | | | | | | | | | $ | (21,213) | | | | | | | | | | | $ | (674,914) | | | | | $ | — | | | | | | | | | | | $ | (674,914) | | |
Loss per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average Class A shares
outstanding |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 165,750,000 | | | | | | (55,739,973) | | | | |
|
4CC
|
| | | | | 110,010,027 | | |
Loss per share (basic and diluted)
attributable to Class A common stockholders |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (4.07) | | | | | $ | — | | | | | | | | | | | $ | (6.14) | | |
| | |
For the year
ended December 31, 2019 |
| |
For the year
ended September 27, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2019,
including Global Knowledge |
| |||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Global
Knowledge |
| |
Accounting
Policies, Reclassifications, and Eliminations (Note 6) |
| | | | | | | |
Global
Knowledge Purchase Accounting Adjustments |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Global Knowledge Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Global Knowledge Maximum Redemptions) |
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 392,533 | | | | | $ | 260,165 | | | | | $ | (1,146) | | | | |
|
6BB
|
| | | | $ | (5,862) | | | | |
|
7AA
|
| | | | $ | 645,690 | | | | | $ | — | | | | | | | | | | | $ | 645,690 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 96,044 | | | | | | 139,459 | | | | | | (1,146) | | | | |
|
6BB
|
| | | | | — | | | | | | | | | | | | 234,357 | | | | | | — | | | | | | | | | | | | 234,357 | | |
Content and software development
|
| | | | 68,191 | | | | | | 5,378 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 73,569 | | | | | | — | | | | | | | | | | | | 73,569 | | |
Selling and marketing
|
| | | | 130,120 | | | | | | 54,828 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 184,948 | | | | | | — | | | | | | | | | | | | 184,948 | | |
General and administrative
|
| | | | 113,334 | | | | | | 45,118 | | | | | | — | | | | | | | | | | | | 117 | | | | |
|
7BB
|
| | | | | 168,496 | | | | | | — | | | | | | | | | | | | 168,496 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,927 | | | | |
|
7FF
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization of intangible assets
|
| | | | 107,961 | | | | | | 9,100 | | | | | | — | | | | | | | | | | | | 11,674 | | | | |
|
7CC
|
| | | | | 128,735 | | | | | | — | | | | | | | | | | | | 128,735 | | |
Impairment of
goodwill |
| | | | 440,598 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 440,598 | | | | | | — | | | | | | | | | | | | 440,598 | | |
Restructuring
|
| | | | 1,900 | | | | | | 7,564 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 9,464 | | | | | | — | | | | | | | | | | | | 9,464 | | |
Operating and formation
costs |
| | | | 745 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 745 | | | | | | — | | | | | | | | | | | | 745 | | |
Total operating expenses
|
| | | | 958,893 | | | | | | 261,447 | | | | | | (1,146) | | | | | | | | | | | | 21,718 | | | | | | | | | | | | 1,240,912 | | | | | | — | | | | | | | | | | | | 1,240,912 | | |
Operating loss:
|
| | | $ | (566,360) | | | | | $ | (1,282) | | | | | $ | — | | | | | | | | | | | $ | (27,580) | | | | | | | | | | | $ | (595,222) | | | | | $ | — | | | | | | | | | | | $ | (595,222) | | |
Other (expense) income, net
|
| | | | (1,058) | | | | | | 500 | | | | | | 1,439 | | | | |
|
6AA
|
| | | | | — | | | | | | | | | | | | 881 | | | | | | — | | | | | | | | | | | | 881 | | |
Loss on derivative instruments
|
| | | | (4,062) | | | | | | — | | | | | | (1,439) | | | | |
|
6AA
|
| | | | | — | | | | | | | | | | | | (5,501) | | | | | | — | | | | | | | | | | | | (5,501) | | |
Interest income
|
| | | | 306 | | | | | | — | | | | | | 3,830 | | | | |
|
6AA
|
| | | | | — | | | | | | | | | | | | 4,136 | | | | | | — | | | | | | | | | | | | 4,136 | | |
Interest expense
|
| | | | (46,197) | | | | | | (25,489) | | | | | | (3,830) | | | | |
|
6AA
|
| | | | | 23,370 | | | | |
|
7DD
|
| | | | | (52,146) | | | | | | — | | | | | | | | | | | | (52,146) | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | (617,371) | | | | | | (26,271) | | | | | | — | | | | | | | | | | | | (4,210) | | | | | | | | | | | | (647,852) | | | | | | — | | | | | | | | | | | | (647,852) | | |
Provision (benefit) for income taxes
|
| | | | 57,543 | | | | | | 28 | | | | | | — | | | | | | | | | | | | (2,103) | | | | |
|
7EE
|
| | | | | 55,468 | | | | | | — | | | | | | | | | | | | 55,468 | | |
Net loss
|
| | | $ | (674,914) | | | | | $ | (26,299) | | | | | $ | — | | | | | | | | | | | $ | (2,107) | | | | | | | | | | | $ | (703,320) | | | | | $ | — | | | | | | | | | | | $ | (703,320) | | |
Loss per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average Class A shares outstanding
|
| | | | 165,750,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 167,750,000 | | | | | | (50,792,202) | | | | |
|
4DD
|
| | | | | 116,957,798 | | |
Loss per share (basic and diluted) attributable to Class A common stockholders
|
| | | $ | (4.07) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (4.19) | | | | | $ | — | | | | | | | | | | | $ | (6.01) | | |
| | |
For the Nine
Months ended September 30, 2020 |
| |
For the Nine
Months ended October 31, 2020 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine Months ended September 30, 2020
|
| |||||||||||||||||||||||||||
| | |
Churchill
Capital Corp II |
| |
Pro Forma
Combined Skillsoft As Adjusted (Note 2) |
| |
Pro Forma
Adjustments (Note 4) |
| | | | | | | |
Skillsoft
Purchase Accounting Adjustments (Note 5) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | — | | | | | $ | 349,516 | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 349,516 | | | | | $ | — | | | | | | | | | | | $ | 349,516 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | — | | | | | | 68,042 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 68,042 | | | | | | — | | | | | | | | | | | | 68,042 | | |
Content and software development
|
| | | | — | | | | | | 49,905 | | | | | | — | | | | | | | | | | | | 180 | | | | |
|
5AA
|
| | | | | 50,085 | | | | | | — | | | | | | | | | | | | 50,085 | | |
Selling and marketing
|
| | | | — | | | | | | 90,266 | | | | | | — | | | | | | | | | | | | 185 | | | | |
|
5AA
|
| | | | | 90,451 | | | | | | — | | | | | | | | | | | | 90,451 | | |
General and administrative
|
| | | | — | | | | | | 47,530 | | | | | | — | | | | | | | | | | | | 57 | | | | |
|
5AA
|
| | | | | 47,587 | | | | | | — | | | | | | | | | | | | 47,587 | | |
Amortization of intangible assets
|
| | | | — | | | | | | 75,043 | | | | | | — | | | | | | | | | | | | 5,929 | | | | |
|
5BB
|
| | | | | 80,972 | | | | | | — | | | | | | | | | | | | 80,972 | | |
Impairment of intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Impairment of goodwill
|
| | | | — | | | | | | 332,376 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 332,376 | | | | | | — | | | | | | | | | | | | 332,376 | | |
Recapitalization and transaction-related costs
|
| | | | — | | | | | | 40,324 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 40,324 | | | | | | — | | | | | | | | | | | | 40,324 | | |
Restructuring
|
| | | | — | | | | | | 1,259 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,259 | | | | | | — | | | | | | | | | | | | 1,259 | | |
Operating and formation costs
|
| | | | 769 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 769 | | | | | | — | | | | | | | | | | | | 769 | | |
Total operating expenses
|
| | | | 769 | | | | | | 704,745 | | | | | | — | | | | | | | | | | | | 6,351 | | | | | | | | | | | | 711,865 | | | | | | — | | | | | | | | | | | | 711,865 | | |
Operating loss:
|
| | | $ | (769) | | | | | $ | (355,229) | | | | | $ | — | | | | | | | | | | | $ | (6,351) | | | | | | | | | | | $ | (362,349) | | | | | $ | — | | | | | | | | | | | $ | (362,349) | | |
Other income (expense), net
|
| | | | 2,418 | | | | | | 4,890 | | | | | | (2,418) | | | | |
|
4AA
|
| | | | | — | | | | | | | | | | | | 4,890 | | | | | | — | | | | | | | | | | | | 4,890 | | |
Reorganization items, net
|
| | | | — | | | | | | 3,329,245 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,329,245 | | | | | | — | | | | | | | | | | | | 3,329,245 | | |
Loss on derivative instruments
|
| | | | — | | | | | | (5) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (5) | | | | | | — | | | | | | | | | | | | (5) | | |
Interest income
|
| | | | — | | | | | | 114 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 114 | | | | | | — | | | | | | | | | | | | 114 | | |
Interest expense
|
| | | | — | | | | | | (33,975) | | | | | | — | | | | | | | | | | | | (1,148) | | | | |
|
5CC
|
| | | | | (35,123) | | | | | | — | | | | | | | | | | | | (35,123) | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 1,649 | | | | | | 2,945,040 | | | | | | (2,418) | | | | | | | | | | | | (7,499) | | | | | | | | | | | | 2,936,772 | | | | | | — | | | | | | | | | | | | 2,936,772 | | |
Provision (benefit) for income taxes
|
| | | | 346 | | | | | | 94,008 | | | | | | (508) | | | | | | | | | | | | (1,575) | | | | |
|
5DD
|
| | | | | 92,271 | | | | | | — | | | | | | | | | | | | 92,271 | | |
Net income (loss)
|
| | | $ | 1,303 | | | | | $ | 2,851,032 | | | | | $ | (1,910) | | | | | | | | | | | $ | (5,924) | | | | | | | | | | | $ | 2,844,501 | | | | | $ | — | | | | | | | | | | | $ | 2,844,501 | | |
Earnings per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average Class A shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 165,750,000 | | | | | | (55,739,973) | | | | |
|
4CC
|
| | | | | 110,010,027 | | |
Earnings per share (basic and diluted) attributable to Class A common stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 17.16 | | | | | $ | — | | | | | | | | | | | $ | 25.86 | | |
| | |
For the Nine
Months ended September 30, 2020 |
| |
For the Nine
Months ended October 2, 2020 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine Months ended September 30, 2020,
including Global Knowledge |
| |||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Global
Knowledge |
| |
Accounting
Policies, Reclassifications, and Eliminations (Note 6) |
| | | | | | | |
Global
Knowledge Purchase Accounting Adjustments |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Global Knowledge Maximum Redemptions) (Note 4) |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming Global Knowledge Maximum Redemptions) |
| |||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 349,516 | | | | | $ | 140,313 | | | | | $ | (588) | | | | |
|
6BB
|
| | | | $ | — | | | | | | | | | | | $ | 489,241 | | | | | $ | — | | | | | | | | | | | $ | 489,241 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 68,042 | | | | | | 79,504 | | | | | | (588) | | | | |
|
6BB
|
| | | | | — | | | | | | | | | | | | 146,958 | | | | | | — | | | | | | | | | | | | 146,958 | | |
Content and software development
|
| | | | 50,085 | | | | | | 1,783 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 51,868 | | | | | | — | | | | | | | | | | | | 51,868 | | |
Selling and marketing
|
| | | | 90,451 | | | | | | 31,064 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 121,515 | | | | | | — | | | | | | | | | | | | 121,515 | | |
General and administrative
|
| | | | 47,587 | | | | | | 23,726 | | | | | | — | | | | | | | | | | | | 88 | | | | |
|
7BB
|
| | | | | 71,401 | | | | | | — | | | | | | | | | | | | 71,401 | | |
Amortization of intangible assets
|
| | | | 80,972 | | | | | | 5,468 | | | | | | — | | | | | | | | | | | | 12,567 | | | | |
|
7CC
|
| | | | | 99,007 | | | | | | — | | | | | | | | | | | | 99,007 | | |
Impairment of intangible
assets |
| | | | — | | | | | | 7,879 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 7,879 | | | | | | — | | | | | | | | | | | | 7,879 | | |
Impairment of goodwill
|
| | | | 332,376 | | | | | | 59,553 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 391,929 | | | | | | — | | | | | | | | | | | | 391,929 | | |
Recapitalization and transaction-related costs
|
| | | | 40,324 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 40,324 | | | | | | — | | | | | | | | | | | | 40,324 | | |
Restructuring
|
| | | | 1,259 | | | | | | 6,897 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 8,156 | | | | | | — | | | | | | | | | | | | 8,156 | | |
Operating and formation
costs |
| | | | 769 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 769 | | | | | | — | | | | | | | | | | | | 769 | | |
Total operating expenses
|
| | | | 711,865 | | | | | | 215,874 | | | | | | (588) | | | | | | | | | | | | 12,655 | | | | | | | | | | | | 939,806 | | | | | | — | | | | | | | | | | | | 939,806 | | |
Operating loss:
|
| | | $ | (362,349) | | | | | $ | (75,561) | | | | | $ | — | | | | | | | | | | | $ | (12,655) | | | | | | | | | | | $ | (450,565) | | | | | $ | — | | | | | | | | | | | $ | (450,565) | | |
Other income (expense), net
|
| | | | 4,890 | | | | | | (1,043) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,847 | | | | | | — | | | | | | | | | | | | 3,847 | | |
Reorganization items, net
|
| | | | 3,329,245 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,329,245 | | | | | | — | | | | | | | | | | | | 3,329,245 | | |
Loss on derivative instruments
|
| | | | (5) | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | (5) | | | | | | — | | | | | | | | | | | | (5) | | |
Interest income
|
| | | | 114 | | | | | | — | | | | | | 2,952 | | | | |
|
6AA
|
| | | | | — | | | | | | | | | | | | 3,066 | | | | | | — | | | | | | | | | | | | 3,066 | | |
Interest expense
|
| | | | (35,123) | | | | | | (21,040) | | | | | | (2,952) | | | | |
|
6AA
|
| | | | | 19,530 | | | | |
|
7DD
|
| | | | | (39,585) | | | | | | — | | | | | | | | | | | | (39,585) | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 2,936,772 | | | | | | (97,644) | | | | | | — | | | | | | | | | | | | 6,875 | | | | | | | | | | | | 2,846,003 | | | | | | — | | | | | | | | | | | | 2,846,003 | | |
Provision (benefit) for income taxes
|
| | | | 92,271 | | | | | | 215 | | | | | | — | | | | | | | | | | | | (1,189) | | | | |
|
7EE
|
| | | | | 91,297 | | | | | | — | | | | | | | | | | | | 91,297 | | |
Net income (loss)
|
| | | $ | 2,844,501 | | | | | $ | (97,859) | | | | | $ | — | | | | | | | | | | | $ | 8,064 | | | | | | | | | | | $ | 2,754,706 | | | | | $ | — | | | | | | | | | | | $ | 2,754,706 | | |
Earnings per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average Class A shares outstanding
|
| | | | 165,750,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 167,750,000 | | | | | | (50,792,202) | | | | |
|
4DD
|
| | | | | 116,957,798 | | |
Earnings per share (basic and diluted) attributable to Class A common stockholders
|
| | | $ | 17.16 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 16.42 | | | | | $ | — | | | | | | | | | | | $ | 23.55 | | |
| | |
For the year ended
January 31, 2020 |
| | | | | | | | | | |
For the year ended
January 31, 2020 |
| ||||||
(amounts in thousands)
|
| |
Skillsoft
Historical Predecessor |
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined Skillsoft As Adjusted |
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 514,021 | | | | | $ | (121,488) | | | |
2AA
|
| | | $ | 392,533 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 96,044 | | | | | | — | | | | | | | | | 96,044 | | |
Content and software development
|
| | | | 67,951 | | | | | | — | | | | | | | | | 67,951 | | |
Selling and marketing
|
| | | | 140,785 | | | | | | (10,912) | | | |
2AA
|
| | | | 129,873 | | |
General and administrative
|
| | | | 73,600 | | | | | | — | | | | | | | | | 73,600 | | |
Amortization of intangible assets
|
| | | | 96,359 | | | | | | 5,044 | | | |
2BB
|
| | | | 101,403 | | |
Impairment of goodwill
|
| | | | 440,598 | | | | | | — | | | | | | | | | 440,598 | | |
Restructuring
|
| | | | 1,900 | | | | | | — | | | | | | | | | 1,900 | | |
Total operating expenses
|
| | | | 917,237 | | | | | | (5,868) | | | | | | | | | 911,369 | | |
|
| | |
For the year ended
January 31, 2020 |
| | | | | | | | | | |
For the year ended
January 31, 2020 |
| ||||||
(amounts in thousands)
|
| |
Skillsoft
Historical Predecessor |
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined Skillsoft As Adjusted |
| |||||||||
Operating loss:
|
| | | $ | (403,216) | | | | | $ | (115,620) | | | | | | | | $ | (518,836) | | |
Other expense, net
|
| | | | (1,058) | | | | | | — | | | | | | | | | (1,058) | | |
Loss on derivative instruments
|
| | | | (4,062) | | | | | | — | | | | | | | | | (4,062) | | |
Interest income
|
| | | | 306 | | | | | | — | | | | | | | | | 306 | | |
Interest expense, net
|
| | | | (429,963) | | | | | | 385,296 | | | |
2CC
|
| | | | (44,667) | | |
Loss before provision for income taxes
|
| | | | (837,993) | | | | | | 269,676 | | | | | | | | | (568,317) | | |
Provision for income taxes
|
| | | | 11,212 | | | | | | 56,632 | | | |
2DD
|
| | | | 67,844 | | |
Net loss
|
| | | $ | (849,205) | | | | | $ | 213,044 | | | | | | | | $ | (636,161) | | |
|
| | |
Predecessor
|
| | |
Successor
|
| | | | | | | | | | | | | | | | ||||||
(amounts in thousands)
|
| |
For the period
February 1, 2020 through August 27, 2020 |
| | |
For the period
August 28, 2020 through October 31, 2020 |
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined Skillsoft As Adjusted |
| ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 273,851 | | | | | | $ | 36,973 | | | | | $ | 38,692 | | | |
2AA
|
| | | $ | 349,516 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 52,160 | | | | | | | 15,882 | | | | | | — | | | | | | | | | 68,042 | | |
Content and software development
|
| | | | 38,986 | | | | | | | 10,919 | | | | | | — | | | | | | | | | 49,905 | | |
Selling and marketing
|
| | | | 75,028 | | | | | | | 18,193 | | | | | | (2,955) | | | |
2AA
|
| | | | 90,266 | | |
General and administrative
|
| | | | 37,455 | | | | | | | 10,075 | | | | | | — | | | | | | | | | 47,530 | | |
Amortization of intangible assets
|
| | | | 34,378 | | | | | | | 15,890 | | | | | | 24,775 | | | |
2BB
|
| | | | 75,043 | | |
Impairment of intangible assets
|
| | | | — | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Impairment of goodwill
|
| | | | 332,376 | | | | | | | — | | | | | | — | | | | | | | | | 332,376 | | |
Recapitalization and transaction-related costs
|
| | | | 32,099 | | | | | | | 8,225 | | | | | | — | | | | | | | | | 40,324 | | |
Restructuring
|
| | | | 1,179 | | | | | | | 80 | | | | | | — | | | | | | | | | 1,259 | | |
Operating and formation costs
|
| | | | — | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Total operating expenses
|
| | | | 603,661 | | | | | | | 79,264 | | | | | | 21,820 | | | | | | | | | 704,745 | | |
Operating loss:
|
| | | $ | (329,810) | | | | | | $ | (42,291) | | | | | $ | 16,872 | | | | | | | | $ | (355,229) | | |
Other income, net
|
| | | | 1,273 | | | | | | | 3,617 | | | | | | — | | | | | | | | | 4,890 | | |
Reorganization items, net
|
| | | | 3,329,245 | | | | | | | — | | | | | | — | | | | | | | | | 3,329,245 | | |
Loss on derivative instruments
|
| | | | (5) | | | | | | | — | | | | | | — | | | | | | | | | (5) | | |
Interest income
|
| | | | 105 | | | | | | | 9 | | | | | | — | | | | | | | | | 114 | | |
Interest expense, net
|
| | | | (168,341) | | | | | | | (7,919) | | | | | | 142,285 | | | |
2CC
|
| | | | (33,975) | | |
Loss before provision (benefit) for income taxes
|
| | | | 2,832,467 | | | | | | | (46,584) | | | | | | 159,157 | | | | | | | | | 2,945,040 | | |
Provision (benefit) for income taxes
|
| | | | 68,455 | | | | | | | (7,870) | | | | | | 33,423 | | | |
2DD
|
| | | | 94,008 | | |
Net income (loss)
|
| | | $ | 2,764,012 | | | | | | $ | (38,714) | | | | | $ | 125,734 | | | | | | | | $ | 2,851,032 | | |
Pro forma adjustment to amortization:
|
| |
For year ended
January 31, 2020 |
| |
For the period
from February 1, 2020 through August 27, 2020 |
| ||||||
| | |
(in thousands)
|
| |||||||||
Remove predecessor Skillsoft amortization of intangible assets valued at fresh-start
|
| | | $ | (96,359) | | | | | $ | (34,378) | | |
Add amortization of intangible assets valued at fresh-start for predecessor period
|
| | | | 101,403 | | | | | | 59,153 | | |
Pro forma adjustment
|
| | | $ | 5,044 | | | | | $ | 24,775 | | |
Pro forma adjustment to interest and other debt costs, net:
|
| |
For year ended
January 31, 2020 |
| |
For the period
from February 1, 2020 through August 27, 2020 |
| ||||||
| | |
(in thousands)
|
| |||||||||
Remove predecessor interest and other debt costs, net
|
| | | $ | (429,963) | | | | | $ | (168,341) | | |
Add interest and other debt costs, net for Senior Secured Term Loans
|
| | | | 44,667 | | | | | | 26,056 | | |
Pro forma adjustment
|
| | | $ | (385,296) | | | | | $ | (142,285) | | |
| Skillsoft Estimated Consideration (in thousands) | | | | | | | |
|
Cash consideration(1)
|
| | | $ | 505,000 | | |
|
Share consideration(2)
|
| | | | 303,240 | | |
|
Debt consideration(3)
|
| | | | 20,000 | | |
|
Total estimated consideration
|
| | | $ | 828,240 | | |
| Skillsoft Estimated Goodwill (in thousands) | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 74,568 | | |
|
Accounts receivable (net)
|
| | | | 99,122 | | |
|
Prepaid expenses and other current assets
|
| | | | 30,319 | | |
|
Property and equipment, net
|
| | | | 14,881 | | |
|
Intangible assets, net
|
| | | | 815,687 | | |
|
Right of use assets
|
| | | | 18,822 | | |
|
Other assets
|
| | | | 5,672 | | |
|
Total Assets
|
| | | $ | 1,059,071 | | |
|
Accounts payable
|
| | | $ | (10,685) | | |
|
Lease liability – short-term
|
| | | | (4,675) | | |
|
Accrued compensation
|
| | | | (27,240) | | |
|
Term loans – short-term
|
| | | | (3,900) | | |
|
Accrued expenses
|
| | | | (25,001) | | |
|
Deferred revenue
|
| | | | (130,824) | | |
|
Long term debt
|
| | | | (511,050) | | |
|
Lease liability – long-term
|
| | | | (14,983) | | |
|
Credit facility
|
| | | | (20,119) | | |
|
Deferred tax liabilities
|
| | | | (109,751) | | |
|
Other long-term liabilities
|
| | | | (7,418) | | |
|
Total Liabilities
|
| | | $ | (865,646) | | |
|
Net assets acquired (a)
|
| | | $ | 193,425 | | |
|
Estimated purchase consideration (b)
|
| | | | 828,240 | | |
|
Estimated goodwill (b) – (a)
|
| | | $ | 634,815 | | |
| | |
Preliminary
Estimated Asset Fair Value |
| |
Weighted
Average Useful Life |
| |||
| | |
(in thousands, except for useful life)
|
| ||||||
Skillsoft Merger | | | | | | | | | | |
Developed software/ courseware
|
| | | $ | 278,577 | | | |
3 – 5 years
|
|
Customer contracts/ relationships
|
| | | | 297,639 | | | |
12.4 years
|
|
Trademarks and trade names
|
| | | | 6,709 | | | |
9.4 years
|
|
Backlog
|
| | | | 96,054 | | | |
4.4 years
|
|
Skillsoft trademark
|
| | | | 97,438 | | | |
Indefinite
|
|
Publishing rights
|
| | | | 37,484 | | | |
5 years
|
|
Capitalized software
|
| | | | 1,786 | | | |
5 years
|
|
Total
|
| | | $ | 815,687 | | | | | |
Less: net intangible assets reported on Skillsoft’s historical financial
statements as of October 31, 2020 |
| | | | 751,103 | | | | | |
Pro forma adjustment:
|
| | | $ | 64,584 | | | | | |
Financial statement line item reclassifications
|
| |
As of
September 30, 2020 |
| |||
| | |
(in thousands)
|
| |||
Cash and cash equivalents
|
| | | $ | (250) | | |
Restricted cash
|
| | | | 250 | | |
Accrued expenses
|
| | | | (9,499) | | |
Accrued compensation
|
| | | | 9,499 | | |
Accrued expenses
|
| | | | (779) | | |
Income taxes payable
|
| | | | 779 | | |
Other long-term assets
|
| | | | (31) | | |
Other long-term liabilities
|
| | | | (25) | | |
Right of use assets
|
| | | | 6 | | |
Financial statement line item reclassifications
|
| |
For the year ended
December 31, 2019 |
| |||
| | |
(in thousands)
|
| |||
Other expense, net
|
| | | $ | 1,439 | | |
Loss on derivative instruments
|
| | | | (1,439) | | |
Interest income
|
| | | | 3,830 | | |
Interest expense
|
| | | | (3,830) | | |
Financial statement line item reclassifications
|
| |
For the Nine Months ended
September 30, 2020 |
| |||
| | |
(in thousands)
|
| |||
Interest income
|
| | | $ | 2,952 | | |
Interest expense
|
| | | | (2,952) | | |
| Global Knowledge Estimated Consideration (in thousands) | | | | | | | |
|
Cash consideration(1)
|
| | | $ | 171,500 | | |
|
Warrant consideration(2)
|
| | | | 17,100 | | |
|
Global Knowledge Term Loans(3)
|
| | | | 70,000 | | |
|
Total estimated consideration
|
| | | $ | 258,600 | | |
| Global Knowledge Estimated Goodwill (in thousands) | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 19,836 | | |
|
Accounts receivable (net)
|
| | | | 25,441 | | |
|
Prepaid expenses and other current assets
|
| | | | 12,738 | | |
|
Property and equipment, net
|
| | | | 7,062 | | |
|
Intangible assets, net
|
| | | | 172,590 | | |
|
Deferred tax assets
|
| | | | 871 | | |
|
Other assets
|
| | | | 3,808 | | |
|
Favorable leasehold interests
|
| | | | 786 | | |
|
Total assets acquired
|
| | | $ | 243,132 | | |
|
Accounts payable
|
| | | | (37,549) | | |
|
Accrued expenses
|
| | | | (26,828) | | |
|
Deferred revenues
|
| | | | (17,742) | | |
|
Unfavorable leasehold interests
|
| | | | (351) | | |
|
Deferred tax liabilities
|
| | | | (11,871) | | |
|
Other long-term liabilities
|
| | | | (4,005) | | |
|
Total liabilities acquired
|
| | | $ | (98,346) | | |
|
Net assets acquired (a)
|
| | | $ | 144,786 | | |
|
Estimated purchase consideration (b)
|
| | |
|
258,600
|
| |
|
Estimated goodwill (b) – (a)
|
| | | $ | 113,814 | | |
| | |
Preliminary
Estimated Asset Fair Value |
| |
Weighted
Average Useful Life |
| |||
| | |
(in thousands, except for useful life)
|
| ||||||
Global Knowledge Merger | | | | | | | | | | |
Trade name
|
| | | $ | 20,780 | | | |
Indefinite
|
|
Customer and vendor relationships
|
| | | | 151,810 | | | |
6.5 years
|
|
Total
|
| | | | 172,590 | | | | | |
Less: net intangible assets reported on Global Knowledge’s historical financial statements as of October 2, 2020
|
| | | | 45,588 | | | | | |
Pro forma adjustment:
|
| | | | 127,002 | | | | | |
| | |
For the year ended
December 31, 2019 |
| |
For the Nine Months ended
September 30, 2020 |
| ||||||||||||||||||
(Amounts in thousands, except per share data)
|
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||||||||
Pro forma net (loss) income
|
| | | $ | (674,914) | | | | | $ | (674,914) | | | | | $ | 2,844,501 | | | | | $ | 2,844,501 | | |
Weighted average shares calculation, basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Public shares and Founder Shares
|
| | | | 86,250,000 | | | | | | 86,250,000 | | | | | | 86,250,000 | | | | | | 86,250,000 | | |
Shares issued in Merger
|
| | | | 28,500,000 | | | | | | 28,500,000 | | | | | | 28,500,000 | | | | | | 28,500,000 | | |
PIPE Shares
|
| | | | 51,000,000 | | | | | | 51,000,000 | | | | | | 51,000,000 | | | | | | 51,000,000 | | |
Redemptions
|
| | | | — | | | | | | (55,739,973) | | | | | | — | | | | | | (55,739,973) | | |
Weighted average Class A shares outstanding
|
| | | | 165,750,000 | | | | | | 110,010,027 | | | | | | 165,750,000 | | | | | | 110,010,027 | | |
(Loss) earnings per share (basic and
diluted) attributable to Class A common stockholders |
| | | $ | (4.07) | | | | | $ | (6.14) | | | | | $ | 17.16 | | | | | $ | 25.86 | | |
| | |
For the year ended
December 31, 2019 |
| |
For the Nine Months ended
September 30, 2020 |
| ||||||||||||||||||
(Amounts in thousands, except per share data)
|
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Global Knowledge Redemptions |
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Global Knowledge Redemptions |
| ||||||||||||
Pro forma net (loss) income
|
| | | $ | (703,320) | | | | | $ | (703,320) | | | | | $ | 2,754,706 | | | | | $ | 2,754,706 | | |
Weighted average shares calculation, basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Public shares and Founder Shares
|
| | | | 86,250,000 | | | | | | 86,250,000 | | | | | | 86,250,000 | | | | | | 86,250,000 | | |
Shares issued in Merger
|
| | | | 28,500,000 | | | | | | 28,500,000 | | | | | | 28,500,000 | | | | | | 28,500,000 | | |
PIPE Shares
|
| | | | 53,000,000 | | | | | | 53,000,000 | | | | | | 53,000,000 | | | | | | 53,000,000 | | |
Redemptions
|
| | | | — | | | | | | (50,792,202) | | | | | | — | | | | | | (50,792,202) | | |
Weighted average Class A shares outstanding
|
| | | | 167,750,000 | | | | | | 116,957,798 | | | | | | 167,750,000 | | | | | | 116,957,798 | | |
(Loss) earnings per share (basic and
diluted) attributable to Class A common stockholders |
| | | $ | (4.19) | | | | | $ | (6.01) | | | | | $ | 16.42 | | | | | $ | 23.55 | | |
| | |
As of September 30, 2020, excluding Global Knowledge
|
| ||||||||||||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment only |
| | | | | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment under Maximum Redemptions |
| | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| |||||||||||||||
(amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 708,692 | | | | | $ | (392,000) | | | | | | (i) | | | | | $ | 316,692 | | | | | $ | (163,284) | | | |
(ii)
|
| | | $ | 153,408 | | |
Total Assets
|
| | | $ | 2,331,904 | | | | | $ | (392,000) | | | | | | | | | | | $ | 1,939,904 | | | | | $ | (163,284) | | | | | | | | $ | 1,776,620 | | |
Class A Common stock, $0.0001 par value
|
| | | $ | 15 | | | | | $ | (4) | | | | | | (i) | | | | | $ | 11 | | | | | $ | (2) | | | |
(ii)
|
| | | $ | 9 | | |
Additional paid-in capital
|
| | | | 1,475,945 | | | | | | (391,996) | | | | | | (i) | | | | | | 1,083,949 | | | | | | (163,282) | | | |
(ii)
|
| | | | 920,667 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 2,331,904 | | | | | $ | (392,000) | | | | | | | | | | | $ | 1,939,904 | | | | | $ | (163,284) | | | | | | | | $ | 1,776,620 | | |
| | |
For the year ended December 31, 2019, excluding Global Knowledge
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Assuming No Redemptions
|
| |
Assuming Maximum Redemptions
|
| ||||||||||||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment only |
| | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment only |
| | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| ||||||||||||||||||
(amounts in thousands,
except per share amounts) |
| | | | | | | | | ||||||||||||||||||||||||||||||||||
Net loss
|
| | | $ | (674,914) | | | | | $ | — | | | | | | | | $ | (674,914) | | | | | $ | (674,914) | | | | | $ | — | | | | | | | | $ | (674,914) | | |
Weighted average Class A shares outstanding
|
| | | | 165,750,000 | | | | | | (40,000,000) | | | |
(i)
|
| | | | 125,750,000 | | | | | | 110,010,027 | | | | | | (417,830) | | | |
(i)(ii)
|
| | | | 109,592,197 | | |
Loss per share (basic and diluted) attributable to Class A common stockholders
|
| | | $ | (4.07) | | | | | $ | — | | | | | | | | $ | (5.37) | | | | | $ | (6.14) | | | | | $ | — | | | | | | | | $ | (6.16) | | |
| | |
For the nine months ended September 30, 2020, excluding Global Knowledge
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Assuming No Redemptions
|
| |
Assuming Maximum Redemptions
|
| ||||||||||||||||||||||||||||||||||||
| | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment only |
| | | | |
Pro Forma
Condensed Combined (Assuming No Redemptions) |
| |
Pro Forma
Condensed Combined (Assuming Knowledge Redemptions) |
| |
Adjustments to
reflect First Step Prosus investment only |
| | | | |
Pro Forma
Condensed Combined (Assuming Maximum Redemptions) |
| ||||||||||||||||||
(amounts in thousands,
except per share amounts) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Net income
|
| | | $ | 2,844,501 | | | | | $ | — | | | | | | | $ | 2,844,501 | | | | | | 2,844,501 | | | | | $ | — | | | | | | | | $ | 2,844,501 | | | |
Weighted average Class A shares outstanding
|
| | | | 165,750,000 | | | | | | (40,000,000) | | | |
(i)
|
| | | | 125,750,000 | | | | | | 110,010,027 | | | | | | (417,830) | | | |
(i)(ii)
|
| | | | 109,592,197 | | |
Earnings per share (basic and diluted) attributable to Class A common stockholders
|
| | | $ | 17.16 | | | | | $ | — | | | | | | | | $ | 22.62 | | | | | $ | 25.86 | | | | | $ | — | | | | | | | | $ | 25.96 | | |
| | |
No Redemptions
|
| |
Maximum Redemptions
|
| ||||||||||||||||||
Total Capitalization (in 000s)
|
| |
Shares
|
| |
%
|
| |
Shares
|
| |
%
|
| ||||||||||||
Skillsoft Shareholders
|
| | | | 28,500 | | | | | | 23% | | | | | | 28,500 | | | | | | 26% | | |
Churchill Public Shares*
|
| | | | 69,000 | | | | | | 54% | | | | | | 52,842 | | | | | | 48% | | |
Churchill Sponsor II LLC
|
| | | | 17,250 | | | | | | 14% | | | | | | 17,250 | | | | | | 16% | | |
PIPE Investors**
|
| | | | 11,000 | | | | | | 9% | | | | | | 11,000 | | | | | | 10% | | |
Total Churchill Class A shares***
|
| | | | 125,750 | | | | | | 100% | | | | | | 109,592 | | | | | | 100% | | |
Churchill Capital Corp II 2020 Omnibus Incentive Plan
|
| | | | | | | | | | | | |
Name and Position
|
| |
Options
|
| |
Restricted Stock Units
|
| ||||||
Jeffrey R. Tarr, CEO of the Post-Combination Company
|
| | | | 1,000,000 | | | | | | 2,000,000 | | |
Name
|
| |
Age
|
| |
Title
|
| |||
Michael Klein
|
| | | | 56 | | | | Chief Executive Officer and Chairman of the Board of Directors | |
Peter Seibold
|
| | | | 56 | | | | Chief Financial Officer | |
Jeremy Paul Abson
|
| | | | 53 | | | | Director | |
Glenn R. August
|
| | | | 59 | | | | Director | |
Dena J. Brumpton
|
| | | | 56 | | | | Director | |
Mark Klein
|
| | | | 58 | | | | Director | |
Malcolm S. McDermid
|
| | | | 41 | | | | Director | |
Karen G. Mills
|
| | | | 67 | | | | Director | |
| | |
Nine Months
EndedSeptember 30, |
| |
For the
Period from April 11, 2019 (Inception) Through September 30, |
| |
For the
Period from April 11, 2019 (Inception) Through December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |||||||||
Net income
|
| | | $ | 1,303,184 | | | | | $ | 2,506,354 | | | | | $ | 4,693,042 | | |
Less: Income attributable to common stock subject to possible redemption
|
| | | | (1,612,947) | | | | | | (2,489,595) | | | | | | (4,868,674) | | |
Adjusted net income (loss)
|
| | | $ | (309,763) | | | | | $ | 16,759 | | | | | $ | (175,632) | | |
Weighted average shares outstanding, basic and diluted(1)
|
| | | | 19,647,636 | | | | | | 17,433,711 | | | | | | 18,180,430 | | |
Basic and diluted net income (loss) per common
share |
| | | $ | (0.02) | | | | | $ | 0.00 | | | | | $ | (0.01) | | |
| | |
September 30, 2020
|
| |
December 31, 2019
|
| ||||||
Balance Sheet Data (end of period): | | | | | | | | | | | | | |
Cash
|
| | | $ | 1,744,991 | | | | | $ | 2,238,275 | | |
Prepaid income taxes
|
| | | | | | | | | | 27,140 | | |
Prepaid expenses
|
| | | | 162,255 | | | | | | 275,525 | | |
Marketable securities held in Trust Account
|
| | | | 697,283,649 | | | | | | 695,295,418 | | |
Total assets
|
| | | | 699,190,865 | | | | | | 697,836,358 | | |
Total liabilities
|
| | | | 21,689,446 | | | | | | 21,638,123 | | |
Common stock subject to possible redemption
|
| | | | 672,501,414 | | | | | | 671,198,229 | | |
Total stockholders’ equity
|
| | | | 5,000,005 | | | | | | 5,000,006 | | |
| | |
Predecessor
and Successor (Combined) |
| | | | | | | | | | | | | | | | | | | | | | | | | |||
| | |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| |||||||||||||||
Non-GAAP Financial Measures – Adjusted Revenue
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscription revenue
|
| | | $ | 279,322 | | | | | $ | 348,609 | | | | | $ | 463,773 | | | | | $ | 492,401 | | | | | $ | 507,846 | | |
Non-subscription revenue
|
| | | | 31,502 | | | | | | 37,401 | | | | | | 50,248 | | | | | | 41,740 | | | | | | 39,463 | | |
Total revenue
|
| | | | 310,824 | | | | | | 386,010 | | | | | | 514,021 | | | | | | 534,141 | | | | | | 547,309 | | |
Plus: Impact of fresh-start and purchase accounting
|
| | | | 41,692 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Plus: One-time impact of the deconsolidation of Canada
|
| | | | 2,700 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total adjusted revenue
|
| | | | 355,216 | | | | | | 386,010 | | | | | | 514,021 | | | | | | 534,141 | | | | | | 547,309 | | |
Consolidated | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted subscription revenue
|
| | | | 324,641 | | | | | | 348,609 | | | | | | 463,773 | | | | | | 492,401 | | | | | | 507,846 | | |
Adjusted non-subscription revenue
|
| | | | 30,575 | | | | | | 37,401 | | | | | | 50,248 | | | | | | 41,740 | | | | | | 39,463 | | |
Total Consolidated adjusted revenue
|
| | | | 355,216 | | | | | | 386,010 | | | | | | 514,021 | | | | | | 534,141 | | | | | | 547,309 | | |
Content Business | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted subscription revenue
|
| | | | 249,397 | | | | | | 263,568 | | | | | | 351,124 | | | | | | 367,940 | | | | | | 373,804 | | |
Adjusted non-subscription revenue
|
| | | | 7,043 | | | | | | 8,012 | | | | | | 11,379 | | | | | | 10,376 | | | | | | 9,942 | | |
Total Content Business adjusted revenue
|
| | | | 256,440 | | | | | | 271,580 | | | | | | 362,503 | | | | | | 378,316 | | | | | | 383,746 | | |
SumTotal Business | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted subscription revenue
|
| | | | 75,244 | | | | | | 85,041 | | | | | | 112,649 | | | | | | 124,461 | | | | | | 134,042 | | |
Adjusted non-subscription revenue
|
| | | | 23,532 | | | | | | 29,389 | | | | | | 38,869 | | | | | | 31,364 | | | | | | 29,521 | | |
Total SumTotal Business adjusted revenue
|
| | | | 98,776 | | | | | | 114,430 | | | | | | 151,518 | | | | | | 155,825 | | | | | | 163,563 | | |
| | |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| |||||||||||||||
Non-GAAP Financial Measures – EBITDA, Adjusted EBITDA, and Free Cash Flow
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 2,725,298 | | | | | $ | (741,017) | | | | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
Interest expense, net
|
| | | | 176,146 | | | | | | 319,973 | | | | | | 429,657 | | | | | | 395,842 | | | | | | 346,186 | | |
Provision for income taxes
|
| | | | 60,585 | | | | | | 7,897 | | | | | | 11,212 | | | | | | 5,027 | | | | | | 1,373 | | |
Depreciation and amortization
|
| | | | 57,641 | | | | | | 82,622 | | | | | | 106,075 | | | | | | 164,418 | | | | | | 211,403 | | |
Impairment of goodwill and intangible assets
|
| | | | 332,376 | | | | | | 438,659 | | | | | | 440,598 | | | | | | 16,094 | | | | | | — | | |
EBITDA
|
| | | | 3,352,046 | | | | | | 108,134 | | | | | | 138,337 | | | | | | 181,542 | | | | | | 214,245 | | |
Plus: Non-recurring retention and consulting costs
|
| | | | 14,066 | | | | | | 14,983 | | | | | | 10,087 | | | | | | 14,487 | | | | | | 15,235 | | |
Plus: Recapitalization and transaction-related costs
|
| | | | 40,324 | | | | | | 6,009 | | | | | | 16,244 | | | | | | — | | | | | | — | | |
Plus: Restructuring and contract terminations
|
| | | | 1,259 | | | | | | 2,338 | | | | | | 3,046 | | | | | | 2,073 | | | | | | 2,524 | | |
Plus: Integration and migration related
|
| | | | 4,344 | | | | | | 5,039 | | | | | | 6,053 | | | | | | 6,719 | | | | | | 6,482 | | |
Plus: Foreign currency and other non-cash expense
|
| | | | (4,275) | | | | | | 10,284 | | | | | | 10,582 | | | | | | 5,581 | | | | | | (8,674) | | |
Plus: Impact of fresh-start and purchase accounting
|
| | | | (3,287,803) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Plus: Other add backs
|
| | | | (343) | | | | | | 299 | | | | | | 446 | | | | | | 932 | | | | | | 515 | | |
Adjusted EBITDA
|
| | | | 119,618 | | | | | | 147,086 | | | | | | 184,795 | | | | | | 211,334 | | | | | | 230,327 | | |
Net cash provided by (used in) operating activities
|
| | | | 6,790 | | | | | | (37,926) | | | | | | (37,413) | | | | | | 10,160 | | | | | | 24,263 | | |
Less: Capital expenditures
|
| | | | (9,172) | | | | | | (14,082) | | | | | | (17,400) | | | | | | (22,552) | | | | | | (18,535) | | |
Free cash flow
|
| | | | (2,382) | | | | | | (52,008) | | | | | | (54,813) | | | | | | (12,392) | | | | | | 5,728 | | |
| | |
Predecessor
and Successor (Combined) |
| | | | | | | | | | | | | | | | | | | | | | | | | |||
| | |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| |||||||||||||||
Key Performance Metrics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annualized Recurring Revenue (“ARR”) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percipio ARR
|
| | | $ | 56,663 | | | | | $ | 29,616 | | | | | $ | 42,477 | | | | | $ | 13,701 | | | | | | NM | | |
Dual Deployment ARR
|
| | | | 167,978 | | | | | | 91,432 | | | | | | 102,914 | | | | | | 56,459 | | | | | | NM | | |
Skillport ARR
|
| | | | 104,664 | | | | | | 225,269 | | | | | | 181,117 | | | | | | 275,813 | | | | | | NM | | |
Total Content Business ARR
|
| | | | 329,306 | | | | | | 346,317 | | | | | | 326,509 | | | | | | 345,974 | | | | | | 366,051 | | |
SumTotal Business ARR
|
| | | | 101,472 | | | | | | 112,119 | | | | | | 111,029 | | | | | | 124,283 | | | | | | 129,593 | | |
Dollar Retention Rate (“DRR”) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percipio DRR
|
| | | | 100% | | | | | | 96% | | | | | | 94% | | | | | | 96% | | | | | | NM | | |
Dual Deployment DRR
|
| | | | 102% | | | | | | 111% | | | | | | 111% | | | | | | 107% | | | | | | NM | | |
Skillport DRR
|
| | | | 76% | | | | | | 86% | | | | | | 84% | | | | | | 90% | | | | | | NM | | |
Total Content Business DRR
|
| | | | 91% | | | | | | 92% | | | | | | 92% | | | | | | 93% | | | | | | 98% | | |
SumTotal Business DRR
|
| | | | 91% | | | | | | 93% | | | | | | 94% | | | | | | 91% | | | | | | 94% | | |
Content Business Order Intake | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percipio Order Intake
|
| | | $ | 31,645 | | | | | $ | 15,116 | | | | | $ | 31,597 | | | | | $ | 8,379 | | | | | | NM | | |
Dual Deployment Order Intake
|
| | | | 75,757 | | | | | | 46,832 | | | | | | 116,161 | | | | | | 62,000 | | | | | | NM | | |
Skillport Order Intake
|
| | | | 53,955 | | | | | | 106,632 | | | | | | 184,870 | | | | | | 280,550 | | | | | | NM | | |
Total Subscription Order Intake
|
| | | | 161,358 | | | | | | 168,580 | | | | | | 332,627 | | | | | | 350,928 | | | | | | 378,402 | | |
Services & One-Time Order Intake
|
| | | | 9,330 | | | | | | 7,986 | | | | | | 14,383 | | | | | | 13,678 | | | | | | 12,110 | | |
Total Content Business Order Intake
|
| | | | 170,688 | | | | | | 176,566 | | | | | | 347,010 | | | | | | 364,606 | | | | | | 390,513 | | |
SumTotal Business Order Intake | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subscription Order Intake
|
| | | $ | 68,286 | | | | | $ | 75,687 | | | | | $ | 110,955 | | | | | $ | 118,234 | | | | | $ | 133,645 | | |
Services & One-Time Order Intake
|
| | | | 15,876 | | | | | | 21,158 | | | | | | 27,442 | | | | | | 30,453 | | | | | | 26,329 | | |
Total SumTotal Business Order Intake
|
| | | | 84,163 | | | | | | 96,846 | | | | | | 138,397 | | | | | | 148,687 | | | | | | 159,974 | | |
|
Name
|
| |
Age
|
| |
Title
|
|
| Michelle Boockoff-Bajdek | | |
51
|
| | Chief Marketing Officer | |
| John Frederick | | |
57
|
| |
Chief Administrative Officer; Chief Executive Officer (SumTotal)
|
|
| Ronald Hovsepian | | |
59
|
| | Executive Chairman; Director | |
| Bobby Jenkins | | |
58
|
| | Chief Financial Officer | |
| Patrick Manzo | | |
48
|
| | Chief Revenue Officer — Content | |
| Mark Onisk | | |
48
|
| | Chief Content Officer | |
| Greg Porto | | |
53
|
| | Chief People Officer | |
| Apratim Purakayastha | | |
53
|
| | Chief Technology Officer | |
| David Aloise | | |
66
|
| | Director | |
| Alan Carr | | |
50
|
| | Director | |
| Eugene Davis | | |
65
|
| | Director | |
| Sherman Edmiston III | | |
58
|
| | Director | |
| Peter Schmitt | | |
53
|
| | Director | |
Name and Principal Position
|
| |
Year(1)
|
| |
Salary
($) |
| |
Bonus
($)(5) |
| |
All Other
Compensation ($)(6) |
| |
Total
($) |
| |||||||||||||||
Ronald Hovsepian
|
| | | | FY20 | | | | | | 963,333 | | | | | | 500,000 | | | | | | 4,833 | | | | | | 1,467,166 | | |
Executive Chairman(2)
|
| | | | | | |||||||||||||||||||||||||
John Frederick
|
| | | | FY20 | | | | | | 620,833 | | | | | | 400,000 | | | | | |
4,000 78,187 |
| | | | | 1,103,020 | | |
Chief Administrative Officer & CEO, SumTotal(3)
|
| | | | | | |||||||||||||||||||||||||
Apratim Purakayastha
|
| | | | FY20 | | | | | | 445,000 | | | | | | — | | | | | | 4,000 | | | | | | 449,000 | | |
Chief Technology Officer(4)
|
| | | | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||||||||||||||||||||||||||
| | |
Aug 28, 2020
through Oct 31, 2020 |
| | |
Feb 1, 2020
through Aug 27, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues(1)
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 386,010 | | | | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 15,882 | | | | | | | 52,160 | | | | | | 71,816 | | | | | | 96,044 | | | | | | 98,636 | | | | | | 106,274 | | |
Content and software development
|
| | | | 10,919 | | | | | | | 38,986 | | | | | | 49,977 | | | | | | 67,951 | | | | | | 57,332 | | | | | | 60,500 | | |
Selling and marketing
|
| | | | 18,193 | | | | | | | 75,028 | | | | | | 99,444 | | | | | | 140,785 | | | | | | 150,179 | | | | | | 143,898 | | |
General and administrative
|
| | | | 10,075 | | | | | | | 37,455 | | | | | | 52,031 | | | | | | 73,600 | | | | | | 51,421 | | | | | | 45,344 | | |
Recapitalization and transaction-related costs
|
| | | | 8,225 | | | | | | | 32,099 | | | | | | 6,009 | | | | | | — | | | | | | — | | | | | | — | | |
Amortization of intangible assets
|
| | | | 15,890 | | | | | | | 34,378 | | | | | | 75,076 | | | | | | 96,359 | | | | | | 151,752 | | | | | | 194,739 | | |
Impairment of goodwill and intangible assets
|
| | | | — | | | | | | | 332,376 | | | | | | 438,659 | | | | | | 440,598 | | | | | | 16,094 | | | | | | — | | |
Restructuring
|
| | | | 80 | | | | | | | 1,179 | | | | | | 1,395 | | | | | | 1,900 | | | | | | 2,073 | | | | | | 2,524 | | |
Total operating expenses
|
| | | | 79,264 | | | | | | | 603,661 | | | | | | 794,407 | | | | | | 917,237 | | | | | | 527,487 | | | | | | 553,279 | | |
Operating (loss) income
|
| | | | (42,291) | | | | | | | (329,810) | | | | | | (408,397) | | | | | | (403,216) | | | | | | 6,654 | | | | | | (5,970) | | |
Interest expense, net
|
| | | | (7,910) | | | | | | | (168,236) | | | | | | (320,200) | | | | | | (429,657) | | | | | | (395,842) | | | | | | (346,186) | | |
Reorganization items, net
|
| | | | — | | | | | | | 3,329,245 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other income (expense)
|
| | | | 3,617 | | | | | | | 1,268 | | | | | | (4,523) | | | | | | (5,120) | | | | | | (5,624) | | | | | | 8,812 | | |
Loss before provision (benefit) for income
taxes |
| | | | (46,584) | | | | | | | 2,832,467 | | | | | | (733,120) | | | | | | (837,993) | | | | | | (394,812) | | | | | | (343,344) | | |
Provision for income taxes
|
| | | | (7,870) | | | | | | | 68,455 | | | | | | 7,897 | | | | | | 11,212 | | | | | | 5,027 | | | | | | 1,373 | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | | | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||||||||
| | |
As of
October 31, 2020 |
| | |
As of January 31,
|
| ||||||||||||
| | |
2020
|
| |
2019
|
| |||||||||||||
Cash and cash equivalents
|
| | | $ | 70,836 | | | | | | $ | 18,799 | | | | | $ | 15,584 | | |
Accounts receivable, net
|
| | | | 99,122 | | | | | | | 193,024 | | | | | | 217,354 | | |
Total current assets(1)
|
| | | | 204,009 | | | | | | | 263,250 | | | | | | 300,278 | | |
Accounts payable and accrued liabilities(1)(2)
|
| | | | 62,926 | | | | | | | 68,790 | | | | | | 76,404 | | |
Term loans and related-party debt and accrued interest
|
| | | | 514,950 | | | | | | | 4,238,068 | | | | | | 3,935,568 | | |
Total shareholder’s equity (deficit)
|
| | | | 635,827 | | | | | | | (2,761,744) | | | | | | (1,917,325) | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Non-GAAP
Combined |
| |
Predecessor
|
| ||||||||||||
(In thousands)
|
| |
Period from
August 28, 2020 through October 31, 2020 |
| | |
Period from
February 1, 2020 through August 27, 2020 |
| |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 310,824 | | | | | $ | 386,010 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 15,882 | | | | | | | 52,160 | | | | | | 68,042 | | | | | | 71,816 | | |
Content and software development
|
| | | | 10,919 | | | | | | | 38,986 | | | | | | 49,905 | | | | | | 49,977 | | |
Selling and marketing
|
| | | | 18,193 | | | | | | | 75,028 | | | | | | 93,221 | | | | | | 99,444 | | |
General and administrative
|
| | | | 10,075 | | | | | | | 37,455 | | | | | | 47,530 | | | | | | 52,031 | | |
Recapitalization and transaction-related costs
|
| | | | 8,225 | | | | | | | 32,099 | | | | | | 40,324 | | | | | | 6,009 | | |
Amortization of intangible assets
|
| | | | 15,890 | | | | | | | 34,378 | | | | | | 50,268 | | | | | | 75,076 | | |
Impairment of intangible assets
|
| | | | — | | | | | | | 332,376 | | | | | | 332,376 | | | | | | 438,659 | | |
Restructuring
|
| | | | 80 | | | | | | | 1,179 | | | | | | 1,259 | | | | | | 1,395 | | |
Total operating expenses
|
| | | | 79,264 | | | | | | | 603,661 | | | | | | 682,925 | | | | | | 794,407 | | |
Operating loss
|
| | | | (42,291) | | | | | | | (329,810) | | | | | | (372,101) | | | | | | (408,397) | | |
Interest and other expense, net
|
| | | | (4,293) | | | | | | | (166,968) | | | | | | (171,261) | | | | | | (324,723) | | |
Reorganization items, net
|
| | | | — | | | | | | | 3,329,245 | | | | | | 3,329,245 | | | | | | — | | |
(Loss) Income before (benefit) provision for income taxes
|
| | | | (46,584) | | | | | | | 2,832,467 | | | | | | 2,785,883 | | | | | | (733,120) | | |
(Benefit) provision for income taxes
|
| | | | (7,870) | | | | | | | 68,455 | | | | | | 60,585 | | | | | | 7,897 | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | 2,725,298 | | | | | $ | (741,017) | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Non-GAAP
Combined |
| |
Predecessor
|
| ||||||||||||
(In thousands)
|
| |
Period from
August 28, 2020 through October 31, 2020 |
| | |
Period from
February 1, 2020 through August 27, 2020 |
| |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| ||||||||||||
Subscription revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Content
|
| | | $ | 22,317 | | | | | | $ | 187,441 | | | | | $ | 209,758 | | | | | $ | 260,230 | | |
SumTotal
|
| | | | 10,310 | | | | | | | 59,254 | | | | | | 69,564 | | | | | | 88,379 | | |
Total subscription revenues
|
| | | | 32,627 | | | | | | | 246,695 | | | | | | 279,322 | | | | | | 348,609 | | |
Non-subscription revenue | | | | | | | | | | | | | | | | | | | | | | | | | | |
Content
|
| | | | 1,178 | | | | | | | 8,796 | | | | | | 9,974 | | | | | | 11,349 | | |
SumTotal
|
| | | | 3,168 | | | | | | | 18,360 | | | | | | 21,528 | | | | | | 26,052 | | |
Total non-subscription revenues
|
| | | | 4,346 | | | | | | | 27,156 | | | | | | 31,502 | | | | | | 37,401 | | |
Total revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 310,824 | | | | | $ | 386,010 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Non-GAAP
Combined |
| |
Predecessor
|
| ||||||||||||
(In thousands)
|
| |
Period from
August 28, 2020 through October 31, 2020 |
| | |
Period from
February 1, 2020 through August 27, 2020 |
| |
Nine Months
Ended October 31, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | |
SaaS and subscription services
|
| | | $ | 30,433 | | | | | | $ | 234,494 | | | | | $ | 264,927 | | | | | $ | 330,189 | | |
Software maintenance
|
| | | | 2,194 | | | | | | | 12,201 | | | | | | 14,395 | | | | | | 18,420 | | |
Professional services
|
| | | | 3,775 | | | | | | | 24,624 | | | | | | 28,399 | | | | | | 33,816 | | |
Perpetual software licenses
|
| | | | 563 | | | | | | | 2,511 | | | | | | 3,074 | | | | | | 1,042 | | |
Hardware and other
|
| | | | 8 | | | | | | | 21 | | | | | | 29 | | | | | | 2,543 | | |
Total revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 310,824 | | | | | $ | 386,010 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | | 100% | | | | | | 100% | | | | | | 100% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 18.7% | | | | | | 18.5% | | | | | | 19.4% | | |
Content and software development
|
| | | | 13.2% | | | | | | 10.7% | | | | | | 11.1% | | |
Selling and marketing
|
| | | | 27.4% | | | | | | 28.1% | | | | | | 26.3% | | |
General and administrative
|
| | | | 14.3% | | | | | | 9.6% | | | | | | 8.3% | | |
Amortization of intangible assets
|
| | | | 18.7% | | | | | | 28.4% | | | | | | 35.6% | | |
Impairment of intangible assets
|
| | | | 85.7% | | | | | | 3.0% | | | | | | 0.0% | | |
Restructuring
|
| | | | 0.4% | | | | | | 0.4% | | | | | | 0.5% | | |
Total operating expenses
|
| | | | 178.4% | | | | | | 98.8% | | | | | | 101.1% | | |
Operating (loss) income
|
| | | | (78.4)% | | | | | | 1.2% | | | | | | (1.1)% | | |
Interest and other expense, net
|
| | | | (84.6)% | | | | | | (75.2)% | | | | | | (61.6)% | | |
Loss before provision (benefit) for income taxes
|
| | | | (163.0)% | | | | | | (73.9)% | | | | | | (62.7)% | | |
Provision for income taxes
|
| | | | 2.2% | | | | | | 0.9% | | | | | | 0.3% | | |
Net loss
|
| | | | (165.2)% | | | | | | (74.9)% | | | | | | (63.0)% | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | | 78.8% | | | | | | 79.0% | | | | | | 79.3% | | |
Other Americas
|
| | | | 4.3% | | | | | | 4.3% | | | | | | 4.5% | | |
Europe, Middle East, and Africa
|
| | | | 11.9% | | | | | | 12.4% | | | | | | 11.6% | | |
Asia-Pacific
|
| | | | 5.0% | | | | | | 4.4% | | | | | | 4.7% | | |
Total revenues
|
| | | | 100.0% | | | | | | 100.0% | | | | | | 100.0% | | |
|
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Subscription revenues: | | | | | | | | | | | | | | | | | | | |
Content
|
| | | | 351,124 | | | | | | 367,940 | | | | | | 373,804 | | |
SumTotal
|
| | | | 112,649 | | | | | | 124,461 | | | | | | 134,042 | | |
Total subscription revenues
|
| | | | 463,773 | | | | | | 492,401 | | | | | | 507,846 | | |
Non-subscription revenue | | | | | | | | | | | | | | | | | | | |
Content
|
| | | | 11,379 | | | | | | 10,376 | | | | | | 9,942 | | |
SumTotal
|
| | | | 38,869 | | | | | | 31,364 | | | | | | 29,521 | | |
Total non-subscription revenues
|
| | | | 50,248 | | | | | | 41,740 | | | | | | 39,463 | | |
Total revenues
|
| | | | 514,021 | | | | | | 534,141 | | | | | | 547,309 | | |
| | |
Year Ended January 31,
|
| |
Change
Increase/(Decrease) |
| |
Percent
Change |
| |||||||||||||||
(In thousands, except percentages)
|
| |
2020
|
| |
2019
|
| ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
SaaS and subscription services
|
| | | $ | 439,791 | | | | | $ | 462,240 | | | | | $ | (22,449) | | | | | | (4.9)% | | |
Software maintenance
|
| | | | 23,982 | | | | | | 30,161 | | | | | | (6,179) | | | | | | (20.5)% | | |
Professional services
|
| | | | 45,661 | | | | | | 38,043 | | | | | | 7,618 | | | | | | 20.0% | | |
Perpetual and term-based software licenses
|
| | | | 1,885 | | | | | | 3,340 | | | | | | (1,455) | | | | | | (43.6)% | | |
Hardware and other
|
| | | | 2,702 | | | | | | 357 | | | | | | 2,345 | | | | | | 656.9% | | |
Total net revenues
|
| | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | (20,120) | | | | | | (3.8)% | | |
|
| | |
Year Ended January 31,
|
| |
Change
Increase/(Decrease) |
| |
Percent
Change |
| |||||||||||||||
(In thousands, except percentages)
|
| |
2019
|
| |
2018
|
| ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
SaaS and subscription services
|
| | | $ | 462,240 | | | | | $ | 473,684 | | | | | $ | (11,444) | | | | | | (2.4)% | | |
Software maintenance
|
| | | | 30,161 | | | | | | 34,162 | | | | | | (4,001) | | | | | | (11.7)% | | |
Professional services
|
| | | | 38,043 | | | | | | 33,942 | | | | | | 4,101 | | | | | | 12.1% | | |
Perpetual and term-based software licenses
|
| | | | 3,340 | | | | | | 5,095 | | | | | | (1,755) | | | | | | (34.4)% | | |
Hardware and other
|
| | | | 357 | | | | | | 426 | | | | | | (69) | | | | | | (16.2)% | | |
Total net revenues
|
| | | $ | 534,141 | | | | | $ | 547,309 | | | | | $ | (13,168) | | | | | | (2.4)% | | |
| | |
Year Ended January 31,
|
| |
Dollar
Increase/(Decrease) |
| |
Percent
Change |
| |||||||||||||||
(In thousands, except percentages)
|
| |
2020
|
| |
2019
|
| ||||||||||||||||||
Cost of revenues
|
| | | $ | 96,044 | | | | | $ | 98,636 | | | | | $ | (2,592) | | | | | | -2.6% | | |
Content and software development
|
| | | | 67,951 | | | | | | 57,332 | | | | | | 10,619 | | | | | | 18.5% | | |
Selling and marketing
|
| | | | 140,785 | | | | | | 150,179 | | | | | | (9,394) | | | | | | -6.3% | | |
General and administrative
|
| | | | 73,600 | | | | | | 51,421 | | | | | | 22,179 | | | | | | 43.1% | | |
Amortization of intangible assets
|
| | | | 96,359 | | | | | | 151,752 | | | | | | (55,393) | | | | | | -36.5% | | |
Impairment of goodwill and intangible assets
|
| | | | 440,598 | | | | | | 16,094 | | | | | | 424,504 | | | | | | 2637.7% | | |
Restructuring
|
| | | | 1,900 | | | | | | 2,073 | | | | | | (173) | | | | | | -8.3% | | |
Total operating expenses
|
| | | $ | 917,237 | | | | | $ | 527,487 | | | | | $ | 389,750 | | | | | | 73.9% | | |
|
| | |
Year Ended January 31,
|
| |
Dollar
Increase/(Decrease) |
| |
Percent
Change |
| |||||||||||||||
(In thousands, except percentages)
|
| |
2019
|
| |
2018
|
| ||||||||||||||||||
Cost of revenues
|
| | | $ | 98,636 | | | | | $ | 106,274 | | | | | $ | (7,638) | | | | | | -7.2% | | |
Content and software development
|
| | | | 57,332 | | | | | | 60,500 | | | | | | (3,168) | | | | | | -5.2% | | |
Selling and marketing
|
| | | | 150,179 | | | | | | 143,898 | | | | | | 6,281 | | | | | | 4.4% | | |
General and administrative
|
| | | | 51,421 | | | | | | 45,344 | | | | | | 6,077 | | | | | | 13.4% | | |
Amortization of intangible assets
|
| | | | 151,752 | | | | | | 194,739 | | | | | | (42,987) | | | | | | -22.1% | | |
Impairment of goodwill and intangible assets
|
| | | | 16,094 | | | | | | — | | | | | | 16,094 | | | | | | 100% | | |
Restructuring
|
| | | | 2,073 | | | | | | 2,524 | | | | | | (451) | | | | | | -17.9% | | |
Total operating expenses
|
| | | $ | 527,487 | | | | | | 553,279 | | | | | $ | (25,792) | | | | | | -4.7% | | |
| | |
2020 (Decrease)/Increase
From 2019 |
| |
2019 (Decrease)/Increase
From 2018 |
| ||||||||||||||||||
(In thousands, except percentages)
|
| |
$
|
| |
%
|
| |
$
|
| |
%
|
| ||||||||||||
Depreciation
|
| | | $ | (3,098) | | | | | | (36.3)% | | | | | $ | (3,512) | | | | | | (29.2)% | | |
Royalties
|
| | | | (1,466) | | | | | | (7.6)% | | | | | | (2,656) | | | | | | (12.1)% | | |
Compensation and benefits
|
| | | | 733 | | | | | | 1.2% | | | | | | (392) | | | | | | (0.7)% | | |
Hosting and software maintenance
|
| | | | 518 | | | | | | 5.3% | | | | | | (779) | | | | | | (7.4)% | | |
Other
|
| | | | 721 | | | | | | 39.7% | | | | | | (299) | | | | | | (14.1)% | | |
Total cost of revenues decrease
|
| | | $ | (2,592) | | | | | | (2.6)% | | | | | $ | (7,638) | | | | | | (7.2)% | | |
| | |
2020 Increase/(Decrease)
From 2019 |
| |
2019 (Decrease)/Increase
From 2018 |
| ||||||||||||||||||
(In thousands, except percentages)
|
| |
$
|
| |
%
|
| |
$
|
| |
%
|
| ||||||||||||
Compensation and benefits
|
| | | $ | 5,302 | | | | | | 15.0% | | | | | | (830) | | | | | | (2.3)% | | |
Professional services
|
| | | | 4,521 | | | | | | 30.8% | | | | | | (1,168) | | | | | | (7.4)% | | |
Facilities and utilities
|
| | | | 771 | | | | | | 15.7% | | | | | | (1,396) | | | | | | (22.2)% | | |
Other
|
| | | | 25 | | | | | | 1.1% | | | | | | 226 | | | | | | 11% | | |
Total content and software development expenses increase (decrease)
|
| | | $ | 10,619 | | | | | | 18.5% | | | | | $ | (3,168) | | | | | | (5.2)% | | |
| | |
2020 (Decrease)/Increase
From 2019 |
| |
2019 Increase/(Decrease)
From 2018 |
| ||||||||||||||||||
(In thousands, except percentages)
|
| |
$
|
| |
%
|
| |
$
|
| |
%
|
| ||||||||||||
Compensation and benefits
|
| | | $ | (11,329) | | | | | | (9.9)% | | | | | | 4,335 | | | | | | 3.9% | | |
Advertising and promotions
|
| | | | 2,060 | | | | | | 20.1% | | | | | | 2,031 | | | | | | 24.7% | | |
Consulting and outside services
|
| | | | 1,020 | | | | | | 11.2% | | | | | | 1,442 | | | | | | 18.8% | | |
Facilities and utilities
|
| | | | (915) | | | | | | (7.5) | | | | | | (1,075) | | | | | | (8.1)% | | |
Software maintenance
|
| | | | 133 | | | | | | 4.3% | | | | | | (620) | | | | | | (16.7)% | | |
Other
|
| | | | (363) | | | | | | (35.9)% | | | | | | 168 | | | | | | 19.7% | | |
Total S&M expenses (decrease) increase
|
| | | $ | (9,394) | | | | | | (6.3)% | | | | | $ | 6,281 | | | | | | 4.4% | | |
| | |
2020 Increase/(Decrease)
From 2019 |
| |
2019 Increase/(Decrease)
From 2018 |
| ||||||||||||||||||
(In thousands, except percentages)
|
| |
$
|
| |
%
|
| |
$
|
| |
%
|
| ||||||||||||
Consulting and outside services
|
| | | $ | 11,104 | | | | | | 58.8% | | | | | | 8,821 | | | | | | 87.7% | | |
Related party loan impairment
|
| | | | 5,394 | | | | | | 100.0% | | | | | | — | | | | | | 0.0% | | |
Compensation and benefits
|
| | | | 4,116 | | | | | | 17.1% | | | | | | (1,695) | | | | | | (6.6)% | | |
Franchise, sales, and property taxes
|
| | | | 326 | | | | | | 25.6% | | | | | | (306) | | | | | | (19.4)% | | |
Insurance
|
| | | | 213 | | | | | | 28.9% | | | | | | (138) | | | | | | (15.0)% | | |
Other
|
| | | | 1,026 | | | | | | 16.8% | | | | | | (605) | | | | | | (9.0)% | | |
Total G&A expenses increase
|
| | | $ | 22,179 | | | | | | 43.1% | | | | | $ | 6,077 | | | | | | 13.4% | | |
| | |
Year Ended January 31,
|
| |
Change (Increase)/
Decrease |
| |
Percent Change
|
| |||||||||||||||
(In thousands, except percentages)
|
| |
2020
|
| |
2019
|
| ||||||||||||||||||
Other expense, net
|
| | | $ | (1,058) | | | | | $ | (3,340) | | | | | $ | 2,282 | | | | | | (68.3)% | | |
Loss on derivative instruments
|
| | | | (4,062) | | | | | | (2,284) | | | | | | (1,778) | | | | | | 77.8% | | |
Interest income
|
| | | | 306 | | | | | | 687 | | | | | | (381) | | | | | | (55.5)% | | |
Interest expense
|
| | | | (429,963) | | | | | | (396,529) | | | | | | (33,434) | | | | | | 8.4% | | |
Interest and other expense, net
|
| | | $ | (434,777) | | | | | $ | (401,466) | | | | | $ | (33,311) | | | | | | 8.3% | | |
|
| | |
Year Ended January 31,
|
| |
Change (Increase)/
Decrease |
| |
Percent Change
|
| |||||||||||||||
(In thousands, except percentages)
|
| |
2019
|
| |
2018
|
| ||||||||||||||||||
Other (expense) income, net
|
| | | $ | (3,340) | | | | | $ | 579 | | | | | $ | (3,919) | | | | | | (676.9)% | | |
(Loss) gain on derivative instruments
|
| | | | (2,284) | | | | | | 8,233 | | | | | | (10,517) | | | | | | (127.7)% | | |
Interest income
|
| | | | 687 | | | | | | 1,036 | | | | | | (349) | | | | | | (33.7)% | | |
Interest expense
|
| | | | (396,529) | | | | | | (347,222) | | | | | | (49,307) | | | | | | 14.2% | | |
Interest and other expense, net
|
| | | $ | (401,466) | | | | | $ | (337,374) | | | | | $ | (64,092) | | | | | | 19.0% | | |
| | |
Year Ended January 31,
|
| |
Change Increase/
(Decrease) |
| |
Percent Change
|
| |||||||||||||||
(In thousands, except percentages)
|
| |
2020
|
| |
2019
|
| ||||||||||||||||||
Provision for income taxes
|
| | | $ | 11,212 | | | | | $ | 5,027 | | | | | $ | 6,185 | | | | | | 123% | | |
Effective income tax rate
|
| | | | (1.3)% | | | | | | (1.3)% | | | | | | 0.0% | | | | | | 0.0% | | |
| | |
Year Ended January 31,
|
| |
Change Increase/
(Decrease) |
| |
Percent Change
|
| |||||||||||||||
(In thousands, except percentages)
|
| |
2019
|
| |
2018
|
| ||||||||||||||||||
Provision for income taxes
|
| | | $ | 5,027 | | | | | $ | 1,373 | | | | | $ | 3,654 | | | | | | 266.1% | | |
Effective income tax rate
|
| | | | (1.3)% | | | | | | (0.4)% | | | | | | (0.9)% | | | | | | 225% | | |
| | |
Pro Forma Condensed Combined
|
| |||||||||
(in thousands, except share and per share data)
|
| |
No
Redemptions(1) |
| |
Max
Redemptions(2) |
| ||||||
Summary Unaudited Pro Forma Condensed Combined Statement of Operations:
|
| | | | | | | | | | | | |
Year ended December 31, 2019
|
| | | $ | 645,690 | | | | | $ | 645,690 | | |
Revenue
|
| | | | (595,222) | | | | | | (595,222) | | |
Operating loss
|
| | | | (703,320) | | | | | | (703,320) | | |
Net (loss) income
|
| | | $ | (4.19) | | | | | $ | (6.01) | | |
Net (loss) earnings per share – basic and diluted
|
| | | | 167,750,000 | | | | | | 116,957,798 | | |
Weighted-average Class A shares outstanding – basic and diluted
|
| | | | | | | | | | | | |
Summary Unaudited Pro Forma Condensed Combined Statement of Operations:
|
| | | | | | | | | | | | |
Nine months ended September 30, 2020 | | | | | | | | | | | | | |
Revenue
|
| | | $ | 489,241 | | | | | $ | 489,241 | | |
Operating loss
|
| | | | (450,565) | | | | | | (450,565) | | |
Net (loss) income
|
| | | | 2,754,706 | | | | | | 2,754,706 | | |
Net (loss) earnings per share – basic and diluted
|
| | | $ | 16 | | | | | $ | 24 | | |
Weighted-average Class A shares outstanding – basic and diluted
|
| | | | 167,750,000 | | | | | | 116,957,798 | | |
Summary Unaudited Pro Forma Condensed Combined Balance Sheet: | | | | | | | | | | | | | |
As of September 30, 2020 | | | | | | | | | | | | | |
Total current assets
|
| | | $ | 737,725 | | | | | $ | 224,441 | | |
Total assets
|
| | | | 2,532,452 | | | | | | 2,019,168 | | |
Total Current Liabilities
|
| | | | 313,379 | | | | | | 313,379 | | |
Total liabilities
|
| | | | 1,068,586 | | | | | | 1,068,586 | | |
Total Stockholders’ Equity
|
| | | | 1,463,866 | | | | | | 950,582 | | |
(amounts in thousands)
|
| |
For the year
ended December 31, 2019* |
| |
For the Nine
Months ended September 30, 2020* |
| ||||||
Total pro forma combined revenue(1)
|
| | | $ | 645,690 | | | | | $ | 489,241 | | |
Reversal of pro forma adjustments:
|
| | | | | | | | | | | | |
Skillsoft fresh-start reporting
|
| | | | 121,488 | | | | | | (38,692) | | |
Global Knowledge purchase accounting
|
| | | | 5,862 | | | | | | — | | |
Elimination of inter-company revenues
|
| | | | 1,146 | | | | | | 588 | | |
Plus impact of Skillsoft reorganization, primarily related to deferred revenue
|
| | | | — | | | | | | 44,392 | | |
Combined Adjusted revenue(3)
|
| | | $ | 774,186 | | | | | $ | 495,529 | | |
Skillsoft Adjusted Revenue(2)
|
| | | $ | 514,021 | | | | | $ | 355,216 | | |
Global Knowledge historical revenue
|
| | | | 260,165 | | | | | | 140,313 | | |
Combined Adjusted revenue(3)
|
| | | $ | 774,186 | | | | | $ | 495,529 | | |
Total pro forma combined net (loss) income(4)
|
| | | $ | (703,320) | | | | | $ | 2,754,706 | | |
Reversal of pro forma adjustments:
|
| | | | (338,952) | | | | | | (86,389) | | |
Adjustments based on historical financial statements:(5)
|
| | | | 1,036,538 | | | | | | (2,561,688) | | |
Pro forma combined EBITDA(6)
|
| | | $ | (5,734) | | | | | $ | 106,629 | | |
Reversal of Churchill purchase accounting, as reflected in pro forma
|
| | | | 21,458 | | | | | | (162) | | |
Reversal of Skillsoft fresh-start, as reflected in pro forma
|
| | | | 110,576 | | | | | | (41,647) | | |
Reversal of Skillsoft purchase accounting, as reflected in pro forma
|
| | | | 18,200 | | | | | | — | | |
Reversal of Global Knowledge purchase accounting, as reflected in pro forma
|
| | | | 15,789 | | | | | | — | | |
Plus other adjustments(7)
|
| | | | 58,325 | | | | | | 66,278 | | |
Combined Adjusted EBITDA(8)
|
| | | $ | 218,614 | | | | | $ | 131,098 | | |
| | |
Successor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| ||||||||||||||||||
| | |
Aug 28, 2020
through Oct 31, 2020 |
| |
Feb 1, 2020
through Aug 27, 2020 |
| |
Nine Months
Ended October 31,2019 |
| |
Fiscal Year
Ended January 31, 2020 |
| |
Fiscal Year
Ended January 31, 2019 |
| |
Fiscal Year
Ended January 31, 2018 |
| ||||||||||||||||||
Net cash provided by (used in operating activities
|
| | | $ | 2,873 | | | | | $ | 3,917 | | | | | | (37,926) | | | | | $ | (37,413) | | | | | $ | 10,160 | | | | | $ | 24,263 | | |
Net cash used in investing activities
|
| | | | (2,248) | | | | | | (6,924) | | | | | | (14,082) | | | | | | (17,400) | | | | | | (22,552) | | | | | | (18,535) | | |
Net cash (used in) provided by financing activities
|
| | | | (29,071) | | | | | | 73,657 | | | | | | 47,195 | | | | | | 57,801 | | | | | | 27,532 | | | | | | (35,147) | | |
Effect of foreign currency exchange rates on cash and cash equivalents
|
| | | | 699 | | | | | | (2,139) | | | | | | (93) | | | | | | 348 | | | | | | (535) | | | | | | (1,125) | | |
Net increase (decrease) in
cash and cash equivalents |
| | | $ | (27,747) | | | | | $ | 68,511 | | | | | | (4,906) | | | | | $ | 3,336 | | | | | $ | 14,605 | | | | | $ | (30,544) | | |
| | |
Payments due by Fiscal Year
|
| |||||||||||||||||||||||||||
(In thousands)
|
| |
Total
|
| |
2021(1)
|
| |
2021 – 2023
|
| |
2023 – 2025
|
| |
Thereafter
|
| |||||||||||||||
First Out Term Loan
|
| | | $ | 110,000 | | | | | $ | — | | | | | $ | 3,300 | | | | | $ | 106,700 | | | | | $ | — | | |
Second Out Term Loan
|
| | | | 410,000 | | | | | | — | | | | | | 12,300 | | | | | | 16,400 | | | | | | 381,300 | | |
Operating leases
|
| | | | 24,956 | | | | | | 1,277 | | | | | | 9,646 | | | | | | 6,839 | | | | | | 7,194 | | |
Finance lease
|
| | | | 1,415 | | | | | | 303 | | | | | | 1,112 | | | | | | — | | | | | | — | | |
| | | | $ | 546,371 | | | | | $ | 1,580 | | | | | $ | 26,358 | | | | | $ | 129,939 | | | | | $ | 388,494 | | |
| | |
Pre-Merger
|
| |
Post-Combination Company
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
Class A
|
| |
Class B
|
| |
Class A
|
| |||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
No Redemptions
|
| |
Maximum
Redemptions |
| ||||||||||||||||||
Name of Beneficial Owner(1)
|
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Class |
| |
Number of
Shares Beneficially Owned(2) |
| |
Percentage of
Class |
| |
Number
of Shares Beneficially Owned |
| |
Percentage
of Class |
| |
Number
of Shares Beneficially Owned |
| |
Percentage
of Class |
| ||||||||||||||||||||||||
Principal Stockholders of Churchill: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Churchill Sponsor II LLC(3)
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 100.0% | | | | | | 17,250,000 | | | | | | 10.4% | | | | | | 17,250,000 | | | | | | 15.7% | | |
Linden Advisors LP(4)
|
| | | | 3,808,569 | | | | | | 5.5% | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
MMCAP International Inc. SPC(5)
|
| | | | 6,630,387 | | | | | | 9.6% | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Polar Asset Management Partners Inc.(6)
|
| | | | 3,800,000 | | | | | | 5.5% | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Magnetar Financial LLC(7)
|
| | | | 5,000,000 | | | | | | 7.2% | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
HGC Investment Management Inc.(8)
|
| | | | 4,190,414 | | | | | | 6.1% | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Directors and Named Executive Officers of Churchill:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Michael Klein(3)
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 100.0% | | | | | | | | | | | | | | | | | | | | | | | | | | |
Peter Seibold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jeremy Paul Abson
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Glenn R. August
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dena J. Brumpton
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mark Klein
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Malcolm S. McDermid
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Karen G. Mills
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Directors and executive officers as a group (8 individuals)
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 100.0% | | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal Stockholders of Post-Combination Company:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
MIH Ventures B.V.
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000,000 | | | | | | 30.2% | | | | | | 50,000,000 | | | | | | 45.5% | | |
Directors and Named Executive Officers of Post-Combination Company:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jeffrey R. Tarr
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Directors and executive officers as a group ( individuals)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
| |
Age
|
| |
Title
|
|
Jeffrey R. Tarr | | |
57
|
| | Chief Executive Officer and Director Nominee | |
| | | | | | Director Nominee | |
| | | | | | Director Nominee | |
| | | | | | Director Nominee | |
| | | | | | | |
| | |
Nine Months
Ended October 2, 2020 |
| |
Fiscal Year
Ended October 2, 2020 |
| |
Fiscal Year
Ended September 27, 2019 |
| |||||||||
(in thousands)
|
| | | | | | | | | | | | | | | | | | |
Non-GAAP Financial Measures – EBITDA,Adjusted EBITDA, and Free Cash Flow
|
| | | | | | | | | | | | | | | | | | |
Net loss
|
| | | $ | (97,859) | | | | | $ | (101,358) | | | | | $ | (26,299) | | |
Interest expense, net
|
| | | | 21,040 | | | | | | 27,455 | | | | | | 25,489 | | |
Provision for income taxes
|
| | | | 215 | | | | | | 271 | | | | | | 28 | | |
Depreciation and amortization
|
| | | | 10,680 | | | | | | 15,598 | | | | | | 23,479 | | |
Impairment of goodwill and intangible assets
|
| | | | 67,432 | | | | | | 67,432 | | | | | | — | | |
EBITDA
|
| | | | 1,508 | | | | | | 9,398 | | | | | | 22,697 | | |
Plus: Non-recurring retention and consulting costs
|
| | | | 2,304 | | | | | | 2,464 | | | | | | 164 | | |
Plus: Recapitalization and transaction-related costs
|
| | | | 2,632 | | | | | | 2,732 | | | | | | 1,378 | | |
Plus: Restructuring and contract terminations
|
| | | | 4,503 | | | | | | 5,028 | | | | | | 4,982 | | |
Plus: Integration and migration related expenses
|
| | | | 90 | | | | | | 728 | | | | | | 3,348 | | |
Plus: Foreign currency and other non-cash expense
|
| | | | 904 | | | | | | 1,195 | | | | | | 287 | | |
Plus: Other add backs
|
| | | | 470 | | | | | | 1,045 | | | | | | 1,708 | | |
Adjusted EBITDA
|
| | | $ | 12,411 | | | | | $ | 22,590 | | | | | $ | 34,564 | | |
Net Cash provided by (used in) operating activities
|
| | | $ | 7,187 | | | | | $ | 3,021 | | | | | $ | (19,056) | | |
Less: Capital expenditures
|
| | | | (3,306) | | | | | | (3,739) | | | | | | (3,276) | | |
Free cash flow
|
| | | $ | 3,881 | | | | | $ | (718) | | | | | $ | (22,332) | | |
| | |
Nine Months
Ended October 2, 2020 |
| |
Fiscal Year
Ended October 2, 2020 |
| |
Fiscal Year
Ended September 27, 2019 |
| |||||||||
Key Performance Metrics | | | | | | | | | | | | | | | | | | | |
(in thousands) | | | | | | | | | | | | | | | | | | | |
Annualized Recurring Revenue (“ARR”)
|
| | | $ | 12,514 | | | | | $ | 12,514 | | | | | $ | 8,870 | | |
Order Intake
|
| | | $ | 156,100 | | | | | $ | 224,786 | | | | | $ | 291,127 | | |
| | |
Year Ended
|
| |||||||||
| | |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
(in thousands)
|
| | | | | | | | | | | | |
Statement of Operations And Comprehensive Loss Data: | | | | | | | | | | | | | |
Revenue
|
| | | $ | 208,535 | | | | | $ | 260,165 | | |
Cost of revenue
|
| | | | 116,203 | | | | | | 139,459 | | |
Gross margin
|
| | | | 92,332 | | | | | | 120,706 | | |
Total operating expenses
|
| | | | 164,636 | | | | | | 121,988 | | |
Loss from operations
|
| | | | (72,304) | | | | | | (1,282) | | |
Interest expense
|
| | | | (27,455) | | | | | | (25,489) | | |
Other (expense) income, net
|
| | | | (1,328) | | | | | | 500 | | |
Loss before income taxes
|
| | | | (101,087) | | | | | | (26,271) | | |
Income tax expense
|
| | | | (271) | | | | | | (28) | | |
Net Loss
|
| | | $ | (101,358) | | | | | $ | (26,299) | | |
|
| | |
As of
|
| |||||||||
| | |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
(in thousands)
|
| | | | | | | | | | | | |
Balance Sheet Data: | | | | | | | | | | | | | |
Cash
|
| | | $ | 19,836 | | | | | $ | 9,621 | | |
Total assets
|
| | | | 240,958 | | | | | | 314,244 | | |
Total liabilities
|
| | | | 364,551 | | | | | | 344,439 | | |
Total stockholder’s deficit
|
| | | | (123,593) | | | | | | (30,195) | | |
| | |
Year Ended
|
| |||||||||
| | |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
(in thousands)
|
| | | | | | | | | | | | |
Statement of Cash Flow Data: | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | $ | 3,021 | | | | | $ | (19,056) | | |
Net cash used in investing activities
|
| | | | (3,828) | | | | | | (800) | | |
Net cash provided by financing activities
|
| | | | 10,562 | | | | | | 23,935 | | |
| | |
Fiscal Year Ended
|
| |||||||||||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||
| | |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||||||||||||||
Revenue
|
| | | $ | 208,535 | | | | | | 100% | | | | | $ | 260,165 | | | | | | 100% | | |
Cost of revenue
|
| | | | 116,203 | | | | | | 56% | | | | | | 139,459 | | | | | | 54% | | |
Gross profit
|
| | | | 92,332 | | | | | | 44% | | | | | | 120,706 | | | | | | 46% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | | 44,093 | | | | | | 21% | | | | | | 54,828 | | | | | | 21% | | |
General and administrative
|
| | | | 34,204 | | | | | | 16% | | | | | | 45,118 | | | | | | 17% | | |
Product development
|
| | | | 3,064 | | | | | | 1% | | | | | | 5,378 | | | | | | 2% | | |
Intangible assets impairment
|
| | | | 7,879 | | | | | | 4% | | | | | | — | | | | | | 0% | | |
Goodwill impairment
|
| | | | 59,553 | | | | | | 29% | | | | | | — | | | | | | 0% | | |
Amortization of intangible assets
|
| | | | 7,623 | | | | | | 4% | | | | | | 9,100 | | | | | | 3% | | |
Restructuring charges
|
| | | | 8,220 | | | | | | 4% | | | | | | 7,564 | | | | | | 3% | | |
Total operating expenses
|
| | | | 164,636 | | | | | | 79% | | | | | | 121,988 | | | | | | 47% | | |
Loss from operations
|
| | | | (72,304) | | | | | | -35% | | | | | | (1,282) | | | | | | 0% | | |
Other (expense) income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (27,455) | | | | | | -13% | | | | | | (25,489) | | | | | | -10% | | |
Other (expense) income, net
|
| | | | (1,328) | | | | | | -1% | | | | | | 500 | | | | | | 0% | | |
Loss before income taxes
|
| | | | (101,087) | | | | | | -48% | | | | | | (26,271) | | | | | | -10% | | |
Income tax expense
|
| | | | (271) | | | | | | 0% | | | | | | (28) | | | | | | 0% | | |
Net loss
|
| | | $ | (101,358) | | | | | | -49% | | | | | $ | (26,299) | | | | | | -10% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
United States
|
| | | $ | 85,735 | | | | | $ | 116,023 | | | | | | (30,288) | | | | | | -26% | | |
Canada
|
| | | | 22,602 | | | | | | 30,832 | | | | | | (8,230) | | | | | | -27% | | |
Europe
|
| | | | 85,353 | | | | | | 96,579 | | | | | | (11,226) | | | | | | -12% | | |
Middle East and Africa
|
| | | | 14,845 | | | | | | 16,731 | | | | | | (1,886) | | | | | | -11% | | |
Total revenues
|
| | | $ | 208,535 | | | | | $ | 260,165 | | | | | $ | (51,630) | | | | | | -20% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Virtual and on-demand
|
| | | $ | 132,846 | | | | | $ | 112,083 | | | | | $ | 20,763 | | | | | | 19% | | |
Classroom and all other
|
| | | | 104,651 | | | | | | 182,145 | | | | | | (77,494) | | | | | | -43% | | |
Reseller fees
|
| | | | (28,962) | | | | | | (34,063) | | | | | | 5,101 | | | | | | -15% | | |
Total revenue
|
| | | $ | 208,535 | | | | | $ | 260,165 | | | | | $ | (51,630) | | | | | | -20% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Subscriptions
|
| | | $ | 9,551 | | | | | $ | 7,080 | | | | | $ | 2,471 | | | | | | 35% | | |
All other
|
| | | | 227,946 | | | | | | 287,148 | | | | | | (59,202) | | | | | | -21% | | |
Reseller fees
|
| | | | (28,962) | | | | | | (34,063) | | | | | | 5,101 | | | | | | -15% | | |
Total revenue
|
| | | $ | 208,535 | | | | | $ | 260,165 | | | | | $ | (51,630) | | | | | | -20% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Course materials
|
| | | $ | 35,679 | | | | | $ | 41,284 | | | | | $ | (5,605) | | | | | | -14% | | |
Contract labor
|
| | | | 30,741 | | | | | | 37,961 | | | | | | (7,220) | | | | | | -19% | | |
Salaries and benefits
|
| | | | 25,507 | | | | | | 29,741 | | | | | | (4,234) | | | | | | -14% | | |
Facilities
|
| | | | 13,064 | | | | | | 15,760 | | | | | | (2,696) | | | | | | -17% | | |
Travel
|
| | | | 3,430 | | | | | | 6,445 | | | | | | (3,015) | | | | | | -47% | | |
Professional fees
|
| | | | 2,579 | | | | | | 2,083 | | | | | | 496 | | | | | | 24% | | |
Depreciation
|
| | | | 1,579 | | | | | | 2,153 | | | | | | (574) | | | | | | -27% | | |
Other
|
| | | | 3,624 | | | | | | 4,032 | | | | | | (408) | | | | | | -10% | | |
Total cost of revenue
|
| | | $ | 116,203 | | | | | $ | 139,459 | | | | | $ | (23,256) | | | | | | -17% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Sales and marketing
|
| | | $ | 44,093 | | | | | $ | 54,828 | | | | | $ | (10,735) | | | | | | -20% | | |
General and administrative
|
| | | | 34,204 | | | | | | 45,118 | | | | | | (10,914) | | | | | | -24% | | |
Product development
|
| | | | 3,064 | | | | | | 5,378 | | | | | | (2,314) | | | | | | -43% | | |
Intangible assets impairment
|
| | | | 7,879 | | | | | | — | | | | | | 7,879 | | | | | | 100% | | |
Goodwill impairment
|
| | | | 59,553 | | | | | | — | | | | | | 59,553 | | | | | | 100% | | |
Amortization of intangible assets
|
| | | | 7,623 | | | | | | 9,100 | | | | | | (1,477) | | | | | | -16% | | |
Restructuring charges
|
| | | | 8,220 | | | | | | 7,564 | | | | | | 656 | | | | | | 9% | | |
Total operating expenses
|
| | | $ | 164,636 | | | | | $ | 121,988 | | | | | $ | 42,648 | | | | | | 35% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Salaries and benefits
|
| | | $ | 30,959 | | | | | $ | 38,904 | | | | | $ | (7,945) | | | | | | -20% | | |
Commissions
|
| | | | 6,733 | | | | | | 9,719 | | | | | | (2,986) | | | | | | -31% | | |
Advertising and marketing
|
| | | | 2,949 | | | | | | 3,024 | | | | | | (75) | | | | | | -2% | | |
Professional fees
|
| | | | 2,073 | | | | | | 492 | | | | | | 1,581 | | | | | | 321% | | |
Travel
|
| | | | 486 | | | | | | 1,049 | | | | | | (563) | | | | | | -54% | | |
Other
|
| | | | 893 | | | | | | 1,640 | | | | | | (747) | | | | | | -46% | | |
Total sales and marketing
|
| | | $ | 44,093 | | | | | $ | 54,828 | | | | | $ | (10,735) | | | | | | -20% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Salaries and benefits
|
| | | $ | 11,896 | | | | | $ | 16,348 | | | | | $ | (4,452) | | | | | | -27% | | |
Professional fees
|
| | | | 7,389 | | | | | | 7,395 | | | | | | (6) | | | | | | 0% | | |
Depreciation
|
| | | | 4,696 | | | | | | 7,661 | | | | | | (2,965) | | | | | | -39% | | |
Facilities
|
| | | | 2,606 | | | | | | 4,330 | | | | | | (1,724) | | | | | | -40% | | |
Repair and maintenance
|
| | | | 2,443 | | | | | | 2,755 | | | | | | (312) | | | | | | -11% | | |
Contract Labor
|
| | | | 1,469 | | | | | | 668 | | | | | | 801 | | | | | | 120% | | |
Telecom
|
| | | | 801 | | | | | | 1,103 | | | | | | (302) | | | | | | -27% | | |
Travel
|
| | | | 558 | | | | | | 534 | | | | | | 24 | | | | | | 4% | | |
Bad debt expense
|
| | | | 423 | | | | | | 1,720 | | | | | | (1,297) | | | | | | -75% | | |
Tax expense
|
| | | | 402 | | | | | | 399 | | | | | | 3 | | | | | | 1% | | |
Other
|
| | | | 1,521 | | | | | | 2,205 | | | | | | (684) | | | | | | -31% | | |
Total general and administrative
|
| | | $ | 34,204 | | | | | $ | 45,118 | | | | | $ | (10,914) | | | | | | -24% | | |
| | |
Fiscal Year Ended
|
| | | | | | | | | | | | | |||||||||
| | |
(in thousands, except percentages)
|
| | | | | | | | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |
Change %
|
| ||||||||||||
Salaries and benefits
|
| | | $ | 901 | | | | | $ | 485 | | | | | $ | 416 | | | | | | 86% | | |
Depreciation
|
| | | | 1,675 | | | | | | 4,467 | | | | | | (2,792) | | | | | | -63% | | |
Other
|
| | | | 488 | | | | | | 426 | | | | | | 62 | | | | | | 15% | | |
Total product development
|
| | | $ | 3,064 | | | | | $ | 5,378 | | | | | $ | (2,314) | | | | | | -43% | | |
|
| | |
Fiscal Year Ended
|
| | | | | | | |||||||||
| | |
(in thousands)
|
| | | | | | | |||||||||
| | |
October 2,
2020 |
| |
September 27,
2019 |
| |
Change $
|
| |||||||||
Net cash provided by (used in) operating activities
|
| | | $ | 3,021 | | | | | $ | (19,056) | | | | | $ | 22,077 | | |
Net cash used in investing activities
|
| | | | (3,828) | | | | | | (800) | | | | | | (3,028) | | |
Net cash provided by financing activities
|
| | | | 10,562 | | | | | | 23,935 | | | | | | (13,373) | | |
Effect of exchange rate changes on cash
|
| | | | 460 | | | | | | (37) | | | | | | 497 | | |
Net increase in cash
|
| | | | 10,215 | | | | | | 4,042 | | | | | | 6,173 | | |
Cash, beginning of period
|
| | | | 9,621 | | | | | | 5,579 | | | | | | 4,042 | | |
Cash, end of period
|
| | | $ | 19,836 | | | | | $ | 9,621 | | | | | $ | 10,215 | | |
| | | | | | | | |
Payments due by period
|
| |||||||||||||||||||||
| | | | | | | | |
(in thousands)
|
| |||||||||||||||||||||
| | |
Total
|
| |
Less than
1 Year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
Credit Suisse facility
|
| | | $ | 234,535 | | | | | $ | 234,535 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Blue Torch facility
|
| | | | 15,500 | | | | | | 15,500 | | | | | | — | | | | | | — | | | | | | — | | |
Related party loans
|
| | | | 11,181 | | | | | | — | | | | | | 7,814 | | | | | | 3,367 | | | | | | | | |
Operating lease obligations
|
| | | | 15,805 | | | | | | 7,114 | | | | | | 7,760 | | | | | | 931 | | | | | | — | | |
Total
|
| | | $ | 277,021 | | | | | $ | 257,149 | | | | | $ | 15,574 | | | | | $ | 4,298 | | | | | $ | — | | |
| | |
Skillsoft Standalone
|
| |
New Skillsoft
|
| ||||||||||||||||||||||||
(in millions)
|
| |
Calendar Year
2021E |
| |
Calendar Year
2022E |
| |
Calendar Year
2020E |
| |
Calendar Year
2021E |
| |
Calendar Year
2022E |
| |||||||||||||||
Total revenue
|
| | | $ | 450(3) | | | | | $ | 470(3) | | | | | $ | 660 – $690 | | | | | $ | 645 – $675 | | | | | $ | 675 – $725(4) | | |
Adjusted EBITDA(1)
|
| | | $ | 120 | | | | | $ | 135 | | | | | $ | 145 – $165 | | | | | $ | 155 – $175 | | | |
$175 – 225 (5)
|
| |||
Adjusted levered free cash flow(2)
|
| | | | N/A | | | | | $ | 110 | | | |
N/A
|
| |
N/A
|
| |
$160(6)
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|
|
Luxembourg
|
| |
Delaware
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Under Luxembourg law and the Skillsoft Articles, the board of directors has the widest power to take any action necessary or useful to achieve the corporate objective. The board of directors’ powers are limited only by law, the Skillsoft Articles and the Skillsoft Shareholders’ Agreement.
Any type of business combination that would require an amendment to the Skillsoft Articles, such as a merger, de-merger, consolidation, dissolution, or voluntary liquidation, requires an extraordinary resolution of a general meeting of shareholders.
The Skillsoft Articles specifically provide that the board of directors shall not have the power to effect the Merger without the approval of holders representing at least sixty-six and two-thirds percent (66-2∕3%) of the issued and outstanding share capital of Skillsoft, subject to higher voting thresholds for a sale of Skillsoft through certain transactions other than the Merger.
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| | Generally, under the DGCL, completion of a merger, consolidation, dissolution, or the sale, lease, or exchange of substantially all of a corporation’s assets requires approval by the board of directors and by a majority (unless the certificate of incorporation requires a higher percentage) of outstanding stock of the corporation entitled to vote. | |
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Luxembourg
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Delaware
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Under Luxembourg law, no restriction exists as to the transactions that a shareholder may engage in with Skillsoft. A shareholder, however, may be held liable on the basis of common rules of tort (the party invoking the tort must establish the fault, the damage and the causal link between the fault and the damage) in connection with such a transaction.
Skillsoft may only enter into transactions which are in its corporate interest. The Skillsoft Articles provide that it shall not enter into, directly or indirectly, any transaction with a shareholder, director or any officer of Skillsoft, any entity in which one or more of such individuals owns, directly or indirectly, individually or in the aggregate, 5% or more of the outstanding equity securities of such entity, or any “affiliate”, “associate” or member of the “immediate family” (as each term is defined under the Exchange Act), other than (i) commercial transactions in the ordinary course of business consistent with past practice and on arms’-length terms, (ii) the future issuance of shares in accordance with Luxembourg law, and (iii) transactions that are not sufficiently material to require approval by the board of directors and for which no such approval is obtained.
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Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales, and loans) with an “interested shareholder” for three years following the time that the shareholder becomes an interested shareholder. Subject to specified exceptions, an “interested shareholder” is a person or group that owns 15% or more of the corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement, or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an affiliate or associate of the corporation and was the owner of 15% or more of the voting stock at any time within the previous three years.
The Proposed Charter provides that the Post-Combination Company will not be subject to Section 203 of the DGCL. Notwithstanding the Post-Combination Company’s opting out of DGCL Section 203, the Proposed Charter provides that the Post-Combination Company shall not engage in specified transactions at any point in time at which the Post-Combination Company’s common stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any “interested stockholder” for a period of three years following the time that such stockholder became an “interested stockholder” unless: (i) prior to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder”, the interested stockholder owned at least eighty-five percent (85%) of the voting stock of the Post-Combination Company outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers of the Post-Combination Company or (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding voting stock of the Post-Combination Company which is not owned by the interested stockholder.
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Luxembourg
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Delaware
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Pursuant to Luxembourg law, it is possible to create an authorized share capital from which the board of directors is authorized by the shareholders (i) to issue further ordinary shares and, (ii) under certain conditions, to limit, or cancel the preferential subscription rights of existing shareholders.
The authority of the board of directors to issue additional ordinary shares included in the Skillsoft Articles (and, as applicable to limit or cancel, as the case may be, preferential subscription rights) is valid for a period of up to five years starting from the date of the extraordinary general meeting of the shareholders of August 27, 2020, unless renewed in accordance with Luxembourg law.
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Under the DGCL, the certificate of incorporation of a corporation may give the board of directors the right to issue new classes of preferred shares with voting, conversion, dividend distribution, and other rights to be determined by the board of directors at the time of issuance, which could prevent a takeover attempt and thereby preclude shareholders from realizing a potential premium over the market value of their shares.
In addition, Delaware law does not prohibit a corporation from adopting a shareholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.
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Luxembourg
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Delaware
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| Neither Luxembourg law nor the Skillsoft Articles provide for appraisal rights. | | | Under the DGCL, a shareholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction. | |
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Luxembourg
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Delaware
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A shareholder meeting must always be called if the matter to be considered requires a shareholder resolution under Luxembourg law or the Skillsoft Articles.
Luxembourg law does not specifically provide for the possibility for shareholders of a public limited liability company to take actions by written consent. As such, it is generally recognized that all shareholder actions must be approved at an actual meeting of shareholders held before a notary public or under private seal, depending on the nature of the matter. Shareholders may vote in person, by proxy or, if the articles of association provide for that possibility, by correspondence (i.e., a voting form).
The Skillsoft Articles provide that shareholders may participate in general meetings by conference call, videoconferencing or any other similar means of communication enabling the persons participating therein to simultaneously communicate with each
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| | Under the DGCL, unless otherwise provided in a corporation’s certificate of incorporation, any action that may be taken at a meeting of shareholders may be taken without a meeting, without prior notice, and without a vote if the holders of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize such action, consent in writing. | |
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Luxembourg
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| |
Delaware
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other, which shall be deemed equivalent to physical presence at such meeting for the purposes of quorum and majority requirements. Additionally, the shareholders may vote at any general meeting by means of voting forms submitted to Skillsoft less than 24 hours prior to the general meeting. The Skillsoft Articles provide that if a shareholder appoints a proxy to act on such shareholder’s behalf at any such general meeting, such appointment must be made in writing and delivered to the registered office of Skillsoft (transmitted by any means of communication allowing for the transmission of a written text), at least five days prior to such general meeting.
In light of the COVID-19 pandemic, several updated measures relating to shareholder meetings have been put in place in Luxembourg. In particular, pursuant to Luxembourg law of September 23, 2020, extending the measures regarding the meetings held by companies and other legal entities (the “September Law”), Luxembourg companies can hold their general meetings without any physical presence, and can require their shareholders or any other participants of the general meeting to exercise their rights exclusively through (1) a written voting form or electronic voting form, (2) a proxy granted to a person designated by the company or (3) videoconference or any other telecommunication means that permits identification of the participants to the meeting. Currently, the September Law will remain in effect until and including June 30, 2021. It is possible that after June 30, 2021, similar provisions granting such flexibility to Luxembourg companies may be adopted in the context of the continuing COVID-19 pandemic.
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Luxembourg
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Delaware
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Pursuant to Luxembourg law, at least one general meeting of shareholders must be held each year, within six months following the end of the financial year. The purpose of such annual general meeting is to approve the annual accounts, allocate the company’s results, approve statutory appointments, and elect the directors and auditor.
Other meetings of shareholders may be convened.
Pursuant to Luxembourg law, the board of directors or the statutory auditor may convene a general meeting. Such general meeting must be convened within one month of receiving a written request |
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The Churchill A&R Bylaws provide that annual meetings of shareholders are to be held on a date and at a time fixed by the board of directors. Under the DGCL, a special meeting of shareholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws.
Under the DGCL, a corporation’s certificate of incorporation or bylaws can specify the number of shares that constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than one-third
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Luxembourg
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Delaware
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from shareholders representing at least one-tenth of the issued capital. Such request must indicate the agenda of the requested meeting.
Luxembourg law distinguishes between ordinary resolutions and extraordinary resolutions for the purpose of determining quorum for meetings of shareholders. Extraordinary resolutions relate to proposed amendments to the articles of association and certain other limited matters described below. All other resolutions are ordinary resolutions. Pursuant to Luxembourg law, there is no requirement of a quorum for any ordinary resolutions to be considered at a general meeting and such ordinary resolutions shall be adopted by a simple majority of votes validly cast on such resolution. Abstentions are not considered “votes.”
Extraordinary resolutions are required for any of the following matters, among others: (i) an increase or decrease of the authorized or issued capital, (ii) a limitation or exclusion of preemptive rights, (iii) approval of a statutory merger or de-merger (scission), (iv) dissolution, and (v) an amendment of the articles of association.
Pursuant to Luxembourg law, for any extraordinary resolutions to be considered at a general meeting, a quorum of at least one half (50%) of the issued share capital must generally be established. If the said quorum is not present, a second meeting may be convened, at which second meeting Luxembourg law does not prescribe a quorum. Any extraordinary resolution shall be adopted at a quorate general meeting (except as otherwise provided by mandatory law) by a two-thirds majority of the votes validly cast on such resolution by shareholders. Abstentions are not considered “votes.”
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| | of the shares entitled to vote at a meeting. The Churchill A&R Bylaws will provide that, unless otherwise required by law, the Proposed Charter or the rules of any stock exchange upon which Churchill’s securities are listed, the holders of record of a majority of the voting power of the issued and outstanding shares Churchill capital stock entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of shareholders. | |
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Luxembourg
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Delaware
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Under Luxembourg law, the amount and payment of dividends or other distributions is determined by a simple majority vote at a general shareholders’ meeting based on the recommendation of the board of directors, except in certain limited circumstances.
Pursuant to the Skillsoft Articles, the shareholders may, by resolution duly passed at a general meeting, decide to distribute a dividend amongst the shareholders and/or distribute the share premium and assimilated premiums accounts, provided, in each case, that the aggregate amount to be
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Under the DGCL, the board of directors may, subject to any restrictions in the corporation’s certificate of incorporation, declare and pay dividends out of:
•
surplus of the corporation, which is defined as net assets less statutory capital; or
•
if no surplus exists, out of the net profits of the corporation for the year in which the dividend is declared and/or the preceding year.
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Luxembourg
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Delaware
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distributed pursuant to any dividend/distribution may not exceed an amount equal to the sum of (i) the annual net profit of the immediately preceding financial year, plus (ii) the carried forward profits and sums drawn from reserves available for the purpose of distributing a dividend/distribution, minus (iii) carried forward losses and sums to be allocated to Skillsoft’s reserve account in accordance with Luxembourg law.
Pursuant to the Skillsoft Articles, the board of directors has the power to pay interim dividends or make other distributions in accordance with applicable Luxembourg law. Distributions may be lawfully declared and paid if the aggregate amount of any interim dividend does not exceed an amount equal to the sum of (i) the amount of Skillsoft’s total profits since the end of the immediately preceding financial year, plus (ii) any profits carried forward and sums drawn from reserves available for the purpose of distributing an interim dividend, minus (iii) losses carried forward and any sums to be allocated to the reserve account created and maintained by Skillsoft in accordance with Luxembourg law. Luxembourg law provides for other conditions for the distribution of interim dividends: (a) interim accounts must be drawn-up, showing that the funds available for distribution are sufficient; (b) the decision of the board of directors to distribute an interim dividend may not be taken more than two months after the date at which the interim accounts referred to under (a) above have been made up; and (c) in their report to the board of directors, the commissaire aux comptes (supervisory auditor) or the réviseur d’entreprises (statutory auditor) must verify whether the above conditions have been satisfied.
All of Skillsoft’s ordinary shares rank pari passu with respect to the payment of dividends or other distributions unless the right to dividends or other distributions has been suspended in accordance with applicable law.
Under Luxembourg law, at least 5% of Skillsoft’s net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of Skillsoft’s issued share capital. The allocation to the legal reserve becomes compulsory again when the legal reserve no longer represents 10% of Skillsoft’s issued share capital. The legal reserve is not available for distribution.
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If, however, the capital of the corporation has been diminished to an amount less than the aggregate amount of capital represented by the issued and outstanding shares of all classes having preference upon the distribution of assets, the board of directors may not declare and pay dividends out of the corporation’s net profits until the deficiency in the capital has been repaired.
Under the DGCL, any corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem these shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced.
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Luxembourg
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Delaware
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Pursuant to Luxembourg law and the Skillsoft Articles, Skillsoft may repurchase its own ordinary shares and hold them in treasury, provided that:
•
its shareholders at a general meeting have previously authorized the board of directors to acquire its ordinary shares. The general meeting shall determine the terms and conditions of the proposed acquisition and in particular the maximum number of shares to be acquired, the period for which the authorization is given (which may not exceed five years), and, in the case of acquisition for value, the maximum and minimum consideration;
•
the acquisitions, including ordinary shares previously acquired by the Post-Combination Company and held by it and shares acquired by a person acting in his or her own name but on Skillsoft’s behalf, may not have the effect of reducing the net assets below the amount of the issued share capital plus the reserves (which may not be distributed by law or under the articles of association);
•
the ordinary shares repurchased are fully paid-up; and
•
the acquisition offer must be made on the same terms and conditions to all the shareholders who are in the same position, except for acquisitions which were unanimously approved at a general meeting at which all the shareholders were present or represented. In addition, listed companies may repurchase their own shares on the stock exchange without an acquisition offer having to be made to shareholders.
Following any such repurchase:
•
the voting rights attached to the shares held by the company are suspended;
•
the repurchased shares are not taken into account for determining the quorum and majority conditions for general meetings; and
•
if the board of directors decides to suspend the right to dividends attached to the shares held by the company, the dividend coupons remain attached to them. In this case, the distributable profits are reduced in accordance with the number of securities held and the amounts that should have been distributed are kept until the shares are sold, coupons attached.
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Luxembourg
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Delaware
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Pursuant to Luxembourg law, for so long as it has more than one shareholder, Skillsoft’s board of directors must be comprised of at least three directors. The directors are appointed at a general meeting of shareholders (by proposal of the board of directors, the shareholders, or a spontaneous candidacy), by a simple majority of votes cast. Directors may be reelected, however the term of any director’s office may not exceed six years.
Pursuant to the Skillsoft Articles, Skillsoft’s board of directors shall be composed of up to six directors, and the directors shall serve a term from the date of appointment until the next annual general meeting of the shareholders. The Skillsoft Shareholders’ Agreement provides additional requirements for the composition of Skillsoft’s board of directors, including that, for the period prior to the Merger, the board shall consist of: (i) the Chief Executive Officer or Executive Chairman of Skillsoft; (ii) three individuals proposed for appointment collectively by the shareholders affiliated with Eaton Vance Management, Lodbrok Capital LLP and EQT; and (iii) two individuals proposed for appointment collectively by a committee comprised of eight fund managers (being referred to as the Steering Committee in the Skillsoft Shareholders’ Agreement).
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A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. The Proposed Charter provides that the board of directors will be divided into three classes, with only one class of directors being elected in each year, and each class serving a three-year term. Pursuant to the Churchill Stockholders Agreement, the board of directors of the Post-Combination Company will initially be composed of seven directors, and from and after its first annual meeting following the Merger, it will increase in size to nine directors.
Pursuant to the Churchill Stockholders Agreement, the Sponsor will have the right to designate two individuals for election to the board of directors so long as the Sponsor’s percentage ownership interest of the Post-Combination Company’s Class A common stock remains above 5%, and if such percentage ownership interest is less than 5% but greater than 1%, then the Sponsor will have the right to designate one individual for election to the board of directors, and the Sponsor shall not have the right to designate any individual for election if its percentage ownership interest falls below 1%. Under the Skillsoft Merger Agreement, the holders of a majority of the Skillsoft Shares are entitled to collectively designate one individual for nomination to the board of directors.
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Luxembourg
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Delaware
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| The Skillsoft Articles provide that, in the case of a vacancy on the board of directors, the board shall not be authorized to appoint a new director upon a vacancy on the board. Under the Skillsoft Shareholders’ Agreement, any vacancy on the board of directors resulting from the death, resignation, removal or otherwise of a director appointed upon proposition of the relevant shareholder pursuant to the terms of the Skillsoft Shareholders’ Agreement shall be filled only upon proposal for appointment by the relevant designating shareholders. | | | The Proposed Charter provides that any vacancy may be filled solely and exclusively by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, subject to the requirements of the Churchill Stockholder Agreement described above. Any director elected to fill a vacancy or from an increase in the number of directors will hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director’s successor has been duly elected and qualified. | |
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Luxembourg
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Delaware
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Under Luxembourg law a director may be removed by action taken at a general meeting of shareholders (by proposal of the board of directors, the shareholders, or a spontaneous request), approved by a simple majority of the votes cast.
The Skillsoft Articles do not provide for different classes of directors and directors may be removed at any time, with or without cause, by a resolution adopted at an annual general meeting of the shareholders or an extraordinary general meeting of the shareholders.
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| | Under Delaware law, a board of directors can be divided into classes; the Proposed Charter provides that the Board will be divided into three classes, with only one class of directors being elected in each year and each class serving a three-year term. The Proposed Charter provides that directors may be removed from office by the stockholders only for cause. | |
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Luxembourg
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Delaware
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| Luxembourg law and the Skillsoft Articles provide that the board of directors may create committees, the composition and duties and which shall be determined by the board of directors. The Skillsoft Shareholders’ Agreement provides that the composition of any committee of the board of directors shall at all times reflect the composition of the Board. | | | The Churchill A&R Bylaws authorizes the board of directors to designate one or more committees, including but not limited to an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each such committee to consist of one or more of the directors of the Post-Combination Company and to include representatives, in the amount specified in the Churchill Stockholders Agreement, appointed by the Sponsor in accordance with the terms and subject to the conditions of the Stockholders Agreement (subject to applicable laws and stock exchange regulations, and unless waived by the Sponsor in its sole discretion). | |
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Luxembourg
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Delaware
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| Not applicable. | | |
Under the DGCL, a corporation may adopt in its bylaws that its directors shall be elected by cumulative voting. When directors are elected by cumulative voting, a shareholder has a number of votes equal to the number of shares held by such shareholder times the number of directors nominated for election. The shareholder may cast all of such votes for one director or among the directors in any proportion.
The Churchill A&R Bylaws do not provide for cumulative voting.
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Luxembourg
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Delaware
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Under Luxembourg law, amendments to the Skillsoft’s Articles require an extraordinary general meeting of shareholders held in front of a public notary at which at least one half (50%) of the share capital is represented.
The notice of the extraordinary general meeting must set out the proposed amendments to the articles of association.
If the aforementioned quorum is not reached, a second meeting may be convened by means of a notice published in the Luxembourg official electronic gazette (RESA) and in a Luxembourg newspaper 15 days before the meeting. However, if all shares are issued in registered form, the shareholders’ meeting could be convened with 8 day notice period by registered letter.
Luxembourg law provides that the second meeting shall be validly constituted regardless of the proportion of the share capital represented.
The Skillsoft Articles however provide for higher quorum requirements by providing that if a quorum of at least a majority of the issued and outstanding share capital is not reached at the first meeting, the shareholders may be convened a second time; provided that, for the avoidance of doubt, a quorum of at least a majority of the issued and outstanding share capital shall be required at any such second meeting.
Resolutions will be adopted if approved by at least two-thirds of the votes cast by shareholders (unless otherwise required by Luxembourg law or the articles of association). Where classes of shares exist and the resolution to be adopted by the general meeting of shareholders changes the respective rights attaching to such shares, the resolution will be validly adopted only if the conditions as to quorum and majority set out above are fulfilled with respect to each class of shares.
An increase of the commitments of its shareholders requires the unanimous consent of the shareholders.
The Skillsoft Articles provide that at any duly convened and quorate general meeting convened for the purpose of voting on resolutions pertaining to amending the articles of association, such resolutions shall be adopted in compliance with the majority requirements pursuant to Luxembourg Law for amendments to the articles of association, except if such proposed amendment relates to a |
| |
Under the DGCL, a certificate of incorporation may be amended if:
•
the board of directors sets forth the proposed amendment in a resolution, declares the advisability of the amendment and directs that it be submitted to a vote at a meeting of stockholders; and
•
the holders of at least a majority of shares of stock entitled to vote on the matter approve the amendment, unless the certificate of incorporation requires the vote of a greater number of shares.
In addition, under the DGCL, class voting rights exist with respect to amendments to the charter that adversely affect the terms of the shares of a class. Class voting rights do not exist as to other extraordinary matters, unless the charter provides otherwise.
Under the DGCL, the board of directors may amend by-laws if so authorized in the charter. The stockholders of a Delaware corporation also have the power to amend by-laws.
The Proposed Charter provides that Article V, Article VI, Article VII, Article IX, Article X, Article XI of the Proposed Charter may not be altered, amended or repealed in any respect, nor may any provision or bylaw inconsistent therewith be adopted, unless, in addition to any other vote required by the Proposed Charter or otherwise required by law, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of at least fifty percent (50%) in voting power of all the then-outstanding shares of stock of the Post-Combination Company entitled to vote thereon, voting together as a single class.
The Proposed Charter provides that the board of directors is expressly authorized to make, alter, amend, change, add to, rescind or repeal, in whole or in part, the Churchill A&R Bylaws without the assent or vote of the stockholders in any manner not inconsistent with Delaware law or the Proposed Charter, the Churchill Stockholders Agreement or the Prosus Subscription Agreement.
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Luxembourg
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Delaware
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| provision of the articles of association which requires the approval, in order to take the action described in such provision, of a higher percentage of Skillsoft’s shareholders than is otherwise required by the aforementioned statutes, then the applicable amendment resolutions shall be adopted (at a duly convened and quorate general meeting) by shareholders representing at least such higher percentage. | | | | |
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Luxembourg
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Delaware
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Luxembourg law permits Skillsoft to indemnify its directors against any expenses, judgments, fines and amounts paid in connection with liability of a director towards a third party for acts committed during the execution of the mandate (mandat) granted to the director by Skillsoft, except in connection with criminal offences, gross negligence or fraud.
The Skillsoft Articles provide that Skillsoft shall indemnify its directors, to the extent permitted by law, against any reasonable costs and expenses incurred by them by virtue of their involvement in legal proceedings or suits initiated against them by reason of their current or former holding of offices as directors of Skillsoft, except for any action for liability initiated by Skillsoft, and except where they shall be found guilty of gross negligence or willful misconduct to Skillsoft in the performance of their duties.
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| |
The DGCL generally permits a corporation to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a third-party action, other than a derivative action, and against expenses actually and reasonably incurred in the defense or settlement of a derivative action, provided that there is a determination that the individual acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation. That determination must be made, in the case of an individual who is a director or officer at the time of the determination:
•
by a majority of the disinterested directors, even though less than a quorum;
•
by a committee of disinterested directors designated by a majority vote of disinterested, directors, even though less than a quorum;
•
by independent legal counsel, regardless of whether a quorum of disinterested directors exists; or
•
by a majority vote of the stockholders, at a meeting at which a quorum is present.
Without court approval, however, no indemnification may be made in respect of any derivative action in which an individual is adjudged liable to the corporation.
The DGCL requires indemnification of directors and officers for expenses relating to a successful defense on the merits or otherwise of a derivative or third-party action. The DGCL permits a corporation to advance expenses relating to the defense of any proceeding to directors and officers contingent upon those individuals’ commitment to repay any advances, unless it is determined ultimately that those individuals are entitled to be indemnified.
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Luxembourg
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Delaware
|
|
| | | | The Churchill A&R Bylaws provide that each person who was or is made party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she is or was, or has agreed to become, a director or an officer of the Post-Combination Company, shall be indemnified and held harmless by the Post-Combination Company to the fullest extent permitted by the DGCL, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by or on behalf of such indemnitee in connection with such proceeding and appeal therefrom. | |
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Luxembourg
|
| |
Delaware
|
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Luxembourg law does not provide for an ex ante limitation of liability but it permits Skillsoft to indemnify its directors as set out above.
The Skillsoft Articles provide that its directors, officers and employees to whom the day-to-day management of Skillsoft is delegated shall not assume, by reason of their position, any personal liability in relation to any commitment validly made in the name of Skillsoft.
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| | Delaware law permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The Proposed Charter will provide that to the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, a director of the Post-Combination Company shall not be personally liable to the Post-Combination Company or its stockholders for monetary damages for breach of fiduciary duty owed to the Post-Combination Company or its stockholders. | |
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Luxembourg
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Delaware
|
|
| One or several shareholders holding at least 10% of the share capital may request the addition of items to the agenda of a general meeting of shareholders. Such request must be addressed to the registered office of Skillsoft by registered mail at least five days before the general meeting. | | | Under the Churchill A&R Bylaws, any stockholder will be able to bring proper business before an annual meeting, including nominations to the board of directors, but only if the stockholder (i) was a stockholder of record at the time the notice was given, on the record date for the determination of Churchill stockholders entitled to vote at the meeting, and at the time of the meeting, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in the Churchill A&R Bylaws as to such business or nomination. In addition, nominations of persons for election to the board of directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders: (a) as provided in the Churchill Stockholders Agreement (b) as provided in the Prosus | |
|
Luxembourg
|
| |
Delaware
|
|
| | | | Subscription Agreement, (c) pursuant to the Post-Combination Company’s notice of meeting (or any supplement thereto), or (d) by or at the direction of the board of directors or any authorized committee thereof. | |
| | |
Churchill
|
| |
Skillsoft
Class A Shares |
| ||||||||||||||||||||||||||||||||||||||||||
| | |
CCX.U
Units |
| |
CCX.WS
Warrants |
| |
CCX Class A
Common Stock |
| |||||||||||||||||||||||||||||||||||||||
Period
|
| |
High
|
| |
Low
|
| |
High
|
| |
Low
|
| |
High
|
| |
Low
|
| |
Dividends
Declared |
| |
Dividends
Declared |
| ||||||||||||||||||||||||
2021:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | — | | | | | $ | — | | |
First Quarter*
|
| | | | 11.62 | | | | | | 10,82 | | | | | | 2.50 | | | | | | 1.70 | | | | | | 10.90 | | | | | | 10.21 | | | | | | | | | | | | | | |
2020:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | — | | | | | $ | — | | |
Fourth Quarter
|
| | | | 11.70 | | | | | | 10.07 | | | | | | 2.20 | | | | | | 1.01 | | | | | | 10.74 | | | | | | 9.95 | | | | | | | | | | | | | | |
Third Quarter
|
| | | | 13.56 | | | | | | 10.80 | | | | | | 3.39 | | | | | | 1.61 | | | | | | 11.99 | | | | | | 10.26 | | | | | | | | | | | | | | |
Second Quarter
|
| | | | 12.63 | | | | | | 10.10 | | | | | | 3.19 | | | | | | 1.26 | | | | | | 11.93 | | | | | | 9.71 | | | | | | | | | | | | | | |
First Quarter
|
| | | | 11.90 | | | | | | 9.82 | | | | | | 2.50 | | | | | | 0.60 | | | | | | 11.08 | | | | | | 9.25 | | | | | | | | | | | | | | |
2019:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | — | | |
Fourth Quarter
|
| | | | 10.84 | | | | | | 10.51 | | | | | | 1.65 | | | | | | 1.25 | | | | | | 10.49 | | | | | | 9.90 | | | | | | | | | | | | | | |
Third Quarter
|
| | | | 10.55 | | | | | | 10.13 | | | | | | 1.50 | | | | | | 1.20 | | | | | | 10.26 | | | | | | 9.81 | | | | | | | | | | | | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-8 | | |
| | | | | F-20 | | | |
| | | | | F-21 | | | |
| | | | | F-22 | | | |
| | | | | F-23 | | | |
| | | | | F-24 | | |
| | | | | F-36 | | | |
| | | | | F-37 | | | |
| | | | | F-38 | | | |
| | | | | F-39 | | | |
| | | | | F-40 | | | |
| | | | | F-41 | | | |
| | | | | F-43 | | |
| | | | | F-76 | | | |
| | | | | F-77 | | | |
| | | | | F-78 | | | |
| | | | | F-80 | | |
| | | | | F-81 | | | |
| | | | | F-83 | | |
| | | | | F-112 | | | |
| | | | | F-114 | | | |
| | | | | F-115 | | | |
| | | | | F-116 | | | |
| | | | | F-117 | | | |
| | | | | F-118 | | |
| ASSETS | | | | | | | |
| Current assets | | | | | | | |
|
Cash
|
| | | $ | 2,238,275 | | |
|
Prepaid income taxes
|
| | | | 27,140 | | |
|
Prepaid expenses
|
| | | | 275,525 | | |
|
Total Current Assets
|
| | | | 2,540,940 | | |
|
Marketable securities held in Trust Account
|
| | | | 695,295,418 | | |
|
TOTAL ASSETS
|
| | | $ | 697,836,358 | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
|
Current liabilities – Accrued expenses
|
| | | $ | 257,466 | | |
|
Total Current Liabilities
|
| | | | 257,466 | | |
|
Deferred income tax payable
|
| | | | 9,657 | | |
|
Deferred underwriting fee payable
|
| | | | 21,371,000 | | |
|
Total Liabilities
|
| | | | 21,638,123 | | |
| Commitments | | | | | | | |
|
Class A Common stock subject to possible redemption, 66,619,951 shares at redemption value
|
| | | | 671,198,229 | | |
| Stockholders’ Equity | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding
|
| | | | — | | |
|
Class A Common stock, $0.0001 par value; 200,000,000 shares authorized; 2,380,049 shares issued and outstanding
(excluding 66,619,951 shares subject to possible redemption) |
| | | | 238 | | |
|
Class B Common stock, $0.0001 par value; 20,000,000 shares authorized; 17,250,000 shares
issued and outstanding |
| | | | 1,725 | | |
|
Additional paid-in capital
|
| | | | 305,001 | | |
|
Retained earnings
|
| | | | 4,693,042 | | |
|
Total Stockholders’ Equity
|
| | | | 5,000,006 | | |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 697,836,358 | | |
|
Operating and formation costs
|
| | | $ | 744,859 | | |
|
Loss from operations
|
| | | | (744,859) | | |
| Other income: | | | | | | | |
|
Interest earned on marketable securities held in Trust Account
|
| | | | 6,639,430 | | |
|
Unrealized gain on marketable securities held in Trust Account
|
| | | | 45,988 | | |
|
Other income
|
| | | | 6,685,418 | | |
|
Income before provision for income taxes
|
| | | | 5,940,559 | | |
|
Provision for income taxes
|
| | | | (1,247,517) | | |
|
Net income
|
| | | $ | 4,693,042 | | |
|
Weighted average shares outstanding, basic and diluted(1)
|
| | | | 18,180,430 | | |
|
Basic and diluted net income per common share(2)
|
| | | $ | (0.01) | | |
| | |
Class A Common Stock
|
| |
Class B Common Stock
|
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
|
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||
Balance – April 11, 2019 (inception)
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of Founder Shares to Sponsor
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 1,725 | | | | | | 23,275 | | | | | | — | | | | | | 25,000 | | |
Sale of 69,000,000 Units, net of underwriting discount and offering expenses
|
| | | | 69,000,000 | | | | | | 6,900 | | | | | | — | | | | | | — | | | | | | 655,673,293 | | | | | | — | | | | | | 655,680,193 | | |
Sale of 15,800,000 Private Placement Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,800,000 | | | | | | — | | | | | | 15,800,000 | | |
Common stock subject to possible redemption
|
| | | | (66,619,951) | | | | | | (6,662) | | | | | | — | | | | | | — | | | | | | (671,191,567) | | | | | | — | | | | | | (671,198,229) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,693,042 | | | | | | 4,693,042 | | |
Balance – December 31, 2019
|
| | | | 2,380,049 | | | | | $ | 238 | | | | | | 17,250,000 | | | | | $ | 1,725 | | | | | $ | 305,001 | | | | | $ | 4,693,042 | | | | | $ | 5,000,006 | | |
|
| Cash Flows from Operating Activities: | | | | | | | |
|
Net income
|
| | | $ | 4,693,042 | | |
| Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | |
|
Interest earned on marketable securities held in Trust Account
|
| | | | (6,639,430) | | |
|
Unrealized gain on marketable securities held in Trust Account
|
| | | | (45,988) | | |
|
Deferred tax provision
|
| | | | 9,657 | | |
|
Changes in operating assets and liabilities:
|
| | | | | | |
|
Prepaid expenses
|
| | | | (275,525) | | |
|
Prepaid income taxes
|
| | | | (27,140) | | |
|
Accrued expenses
|
| | | | 257,466 | | |
|
Net cash used in operating activities
|
| | | | (2,027,918) | | |
| Cash Flows from Investing Activities: | | | | | | | |
|
Investment of cash in Trust Account
|
| | | | (690,000,000) | | |
|
Cash withdrawn from Trust Account to pay income taxes
|
| | | | 1,390,000 | | |
|
Net cash used in investing activities
|
| | | | (688,610,000) | | |
| Cash Flows from Financing Activities: | | | | | | | |
|
Proceeds from issuance of Class B common stock to Sponsor
|
| | | | 25,000 | | |
|
Proceeds from sale of Units, net of underwriting discounts paid
|
| | | | 677,788,000 | | |
|
Proceeds from sale of Private Placement Warrants
|
| | | | 15,800,000 | | |
|
Proceeds from promissory note – related party
|
| | | | 200,000 | | |
|
Repayment of promissory note – related party
|
| | | | (200,000) | | |
|
Payment of offering costs
|
| | | | (736,807) | | |
|
Net cash provided by financing activities
|
| | | | 692,876,193 | | |
|
Net Change in Cash
|
| | | | 2,238,275 | | |
|
Cash – Beginning of period, April 11, 2019 (inception)
|
| | | | — | | |
|
Cash – End of period
|
| | | $ | 2,238,275 | | |
| Supplemental cash flow information: | | | | | | | |
|
Cash paid for income taxes
|
| | | $ | 1,265,000 | | |
| Non-Cash investing and financing activities: | | | | | | | |
|
Initial classification of common stock subject to redemption
|
| | | $ | 666,500,190 | | |
|
Deferred underwriting fee payable
|
| | | $ | 21,371,000 | | |
|
Change in value of common stock subject to possible redemption
|
| | | $ | 4,698,039 | | |
| | |
For the Period
from April 11, 2019 (Inception) Through December 31, 2019 |
| |||
Net income
|
| | | $ | 4,693,042 | | |
Less: Income attributable to common stock subject to possible redemption
|
| | | | (4,868,674) | | |
Adjusted net loss
|
| | | $ | (175,632) | | |
Weighted average shares outstanding, basic and diluted
|
| | | | 18,180,430 | | |
Basic and diluted net loss per share
|
| | | $ | (0.01) | | |
| Deferred tax liability | | | | | | | |
|
Unrealized gain on securities
|
| | | $ | (9,657) | | |
|
Total deferred tax liability
|
| | | | (9,657) | | |
|
Valuation allowance
|
| | | | — | | |
|
Deferred tax liability, net of allowance
|
| | | $ | (9,657) | | |
|
| Federal | | | | | | | |
|
Current
|
| | | $ | 1,237,860 | | |
|
Deferred
|
| | | | 9,657 | | |
| State | | | | | | | |
|
Current
|
| | | $ | — | | |
|
Deferred
|
| | | | — | | |
|
Change in valuation allowance
|
| | | | — | | |
|
Income tax provision
|
| | | $ | 1,247,517 | | |
|
Statutory federal income tax rate
|
| | | | 21.0% | | |
|
State taxes, net of federal tax benefit
|
| | | | 0.0% | | |
|
Income tax provision
|
| | | | 21.0% | | |
Description
|
| |
Level
|
| |
December 31,
2019 |
| ||||||
Assets: | | | | | | | | | | | | | |
Marketable securities held in Trust Account
|
| | | | 1 | | | | | $ | 695,295,418 | | |
| | |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 1,744,991 | | | | | $ | 2,238,275 | | |
Prepaid income taxes
|
| | | | — | | | | | | 27,140 | | |
Prepaid expenses
|
| | | | 162,225 | | | | | | 275,525 | | |
Total Current Assets
|
| | | | 1,907,216 | | | | | | 2,540,940 | | |
Marketable securities held in Trust Account
|
| | | | 697,283,649 | | | | | | 695,295,418 | | |
TOTAL ASSETS
|
| | | $ | 699,190,865 | | | | | $ | 697,836,358 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accrued expenses
|
| | | $ | 215,415 | | | | | $ | 257,466 | | |
Income taxes payable
|
| | | | 102,787 | | | | | | — | | |
Total Current Liabilities
|
| | | | 318,202 | | | | | | 257,466 | | |
Deferred income tax payable
|
| | | | 244 | | | | | | 9,657 | | |
Deferred underwriting fee payable
|
| | | | 21,371,000 | | | | | | 21,371,000 | | |
Total Liabilities
|
| | | | 21,689,446 | | | | | | 21,638,123 | | |
Commitments | | | | | | | | | | | | | |
Class A Common stock subject to possible redemption, 66,563,478 and 66,619,951 shares at redemption value as of September 30, 2020 and December 31, 2019, respectively
|
| | | | 672,501,414 | | | | | | 671,198,229 | | |
Stockholders’ Equity | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding
|
| | | | — | | | | | | — | | |
Class A Common stock, $0.0001 par value; 200,000,000 shares authorized; 2,436,522 and 2,380,049 shares issued and outstanding (excluding 66,563,478 and 66,619,951 shares subject to possible redemption) as of September 30, 2020 and December 31, 2019, respectively
|
| | | | 244 | | | | | | 238 | | |
Class B Common stock, $0.0001 par value; 20,000,000 shares authorized;
17,250,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019 |
| | | | 1,725 | | | | | | 1,725 | | |
Additional paid-in capital
|
| | | | 219,294 | | | | | | 305,001 | | |
Retained earnings
|
| | | | 4,778,742 | | | | | | 4,693,042 | | |
Total Stockholders’ Equity
|
| | | | 5,000,005 | | | | | | 5,000,006 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 699,190,865 | | | | | $ | 697,836,358 | | |
| | |
Three Months Ended
September 30, |
| |
Nine Months
Ended September 30, 2020 |
| |
For the
Period from April 11, 2019 (Inception) Through September 30, 2019 |
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Formation and operating costs
|
| | | $ | 240,937 | | | | | $ | 369,066 | | | | | $ | 768,783 | | | | | $ | 370,066 | | |
Loss from operations
|
| | | | (240,937) | | | | | | (369,066) | | | | | | (768,783) | | | | | | (370,066) | | |
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earned on marketable securities held in Trust Account
|
| | | | 118,097 | | | | | | 3,530,496 | | | | | | 2,417,317 | | | | | | 3,530,496 | | |
Unrealized gain on marketable securities held in Trust Account
|
| | | | 5,184 | | | | | | 12,169 | | | | | | 1,164 | | | | | | 12,169 | | |
Other income, net
|
| | | | 123,281 | | | | | | 3,542,665 | | | | | | 2,418,481 | | | | | | 3,542,665 | | |
(Loss) income before income taxes
|
| | | | (117,656) | | | | | | 3,173,599 | | | | | | 1,649,698 | | | | | | 3,172,599 | | |
Benefit (provision) for income taxes
|
| | | | 24,707 | | | | | | (666,245) | | | | | | (346,514) | | | | | | (666,245) | | |
Net (loss) income
|
| | | $ | (92,949) | | | | | $ | 2,507,354 | | | | | $ | 1,303,184 | | | | | $ | 2,506,354 | | |
Weighted average shares outstanding, basic and
diluted(1) |
| | | | 19,665,085 | | | | | | 19,549,981 | | | | | | 19,647,636 | | | | | | 17,433,711 | | |
Basic and diluted net loss per common share(2)
|
| | | $ | (0.00) | | | | | $ | 0.00 | | | | | $ | (0.02) | | | | | $ | 0.00 | | |
| | |
Class A Common Stock
|
| |
Class B Common Stock
|
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
|
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||
Balance – January 1, 2020
|
| | | | 2,380,049 | | | | | $ | 238 | | | | | | 17,250,000 | | | | | $ | 1,725 | | | | | $ | 305,001 | | | | | $ | 4,693,042 | | | | | $ | 5,000,006 | | |
Change in value of common stock subject to possible redemption
|
| | | | 17,534 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | (305,001) | | | | | | (1,217,484) | | | | | | (1,522,483) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,522,486 | | | | | | 1,522,486 | | |
Balance – March 31, 2020
|
| | | | 2,397,583 | | | | | | 240 | | | | | | 17,250,000 | | | | | | 1,725 | | | | | | — | | | | | | 4,998,044 | | | | | | 5,000,009 | | |
Change in value of common stock subject to possible redemption
|
| | | | 17,502 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | 126,347 | | | | | | — | | | | | | 126,349 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (126,353) | | | | | | (126,353) | | |
Balance – June 30, 2020
|
| | | | 2,415,085 | | | | | $ | 242 | | | | | | 17,250,000 | | | | | $ | 1,725 | | | | | $ | 126,347 | | | | | $ | 4,871,691 | | | | | $ | 5,000,005 | | |
Change in value of common stock subject to possible redemption
|
| | | | 21,437 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | 92,947 | | | | | | — | | | | | | 92,949 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (92,949) | | | | | | (92,949) | | |
Balance – September 30, 2020
|
| | | | 2,436,522 | | | | | $ | 244 | | | | | | 17,250,000 | | | | | $ | 1,725 | | | | | $ | 219,294 | | | | | $ | 4,778,742 | | | | | $ | 5,000,005 | | |
|
| | |
Class A Common Stock
|
| |
Class B Common Stock
|
| |
Additional
Paid in Capital |
| |
Retained
Earnings/ (Accumulated Deficit) |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
|
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||
Balance – April 11, 2019 (inception)
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of Class B common stock to Sponsor
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 1,725 | | | | | | 23,275 | | | | | | — | | | | | | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,000) | | | | | | (1,000) | | |
Balance – June 30, 2019
|
| | | | — | | | | | | — | | | | | | 17,250,000 | | | | | | 1,725 | | | | | | 23,275 | | | | | | (1,000) | | | | | | 24,000 | | |
Sale of 69,000,000 Units, net of underwriting discount and offering expenses
|
| | | | 69,000,000 | | | | | | 6,900 | | | | | | — | | | | | | — | | | | | | 655,673,293 | | | | | | — | | | | | | 655,680,193 | | |
Sale of 15,800,000 Private Placement Warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,800,000 | | | | | | — | | | | | | 15,800,000 | | |
Common stock subject to possible redemption
|
| | | | (66,673,530) | | | | | | (6,667) | | | | | | — | | | | | | — | | | | | | (669,004,872) | | | | | | — | | | | | | (669,011,539) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,507,354 | | | | | | 2,507,354 | | |
Balance – September 30, 2019
|
| | | | 2,326,470 | | | | | | 233 | | | | | | 17,250,000 | | | | | $ | 1,725 | | | | | $ | 2,491,696 | | | | | $ | 2,506,354 | | | | | $ | 5,000,008 | | |
|
| | |
Nine Months
Ended September 30, 2020 |
| |
For the Period
from April 11, 2019 (Inception) Through September 30, 2019 |
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 1,303,184 | | | | | $ | 2,506,354 | | |
Adjustments to reconcile net income to net cash used in operating activities:
|
| | | | | | | | | | | | |
Interest earned on marketable securities held in Trust Account
|
| | | | (2,417,317) | | | | | | (3,530,496) | | |
Unrealized gain on marketable securities held in Trust Account
|
| | | | (1,164) | | | | | | (12,169) | | |
Deferred tax (benefit) provision
|
| | | | (9,413) | | | | | | 2,555 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Prepaid expenses
|
| | | | 113,300 | | | | | | (347,462) | | |
Prepaid income taxes
|
| | | | 27,140 | | | | | | (473,310) | | |
Accrued expenses
|
| | | | (42,051) | | | | | | 65,059 | | |
Income taxes payable
|
| | | | 102,787 | | | | | | — | | |
Net cash used in operating activities
|
| | | | (923,534) | | | | | | (1,789,469) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Investment of cash in Trust Account
|
| | | | — | | | | | | (690,000,000) | | |
Cash withdrawn from Trust Account to pay franchise and income taxes
|
| | | | 430,250 | | | | | | 1,137,000 | | |
Net cash provided by (used in) investing activities
|
| | | | 430,250 | | | | | | (688,863,000) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Proceeds from issuance of Class B common stock to Sponsor
|
| | | | — | | | | | | 25,000 | | |
Proceeds from sale of Units, net of underwriting discounts paid
|
| | | | — | | | | | | 677,788,000 | | |
Proceeds from sale of Private Placement Warrants
|
| | | | — | | | | | | 15,800,000 | | |
Proceeds from promissory note – related party
|
| | | | — | | | | | | 200,000 | | |
Repayment of promissory note – related party
|
| | | | — | | | | | | (200,000) | | |
Payment of offering costs
|
| | | | — | | | | | | (736,807) | | |
Net cash provided by financing activities
|
| | | | — | | | | | | 692,876,193 | | |
Net Change in Cash
|
| | | | (493,284) | | | | | | 2,223,724 | | |
Cash – Beginning of period
|
| | | | 2,238,275 | | | | |
|
—
|
| |
Cash – End of period
|
| | | $ | 1,744,991 | | | | | $ | 2,223,724 | | |
Supplemental cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 226,000 | | | | | $ | 1,137,000 | | |
Non-Cash investing and financing activities: | | | | | | | | | | | | | |
Initial classification of common stock subject to possible redemption
|
| | | $ | — | | | | | $ | 665,500,190 | | |
Change in value of common stock subject to possible redemption
|
| | | $ | 1,303,185 | | | | | $ | 2,511,349 | | |
Deferred offering costs included in accrued offering costs
|
| | | $ | — | | | | | $ | — | | |
| | |
Three Months
Ended September 30, |
| |
Nine Months
Ended September 30, 2020 |
| |
For the
Period from April 11, 2019 (Inception) Through September 30, 2019 |
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Net (loss) income
|
| | | $ | (92,949) | | | | | $ | 2,507,354 | | | | | $ | 1,303,184 | | | | | $ | 2,506,354 | | |
Less: Income attributable to common stock subject to possible redemption
|
| | | | — | | | | | | (2,489,595) | | | | | | (1,612,947) | | | | | | (2,489,595) | | |
Adjusted net loss
|
| | | $ | (92,949) | | | | | $ | 17,759 | | | | | $ | (309,763) | | | | | $ | 16,759 | | |
Weighted average shares outstanding, basic and
diluted |
| | | | 19,665,085 | | | | | | 19,549,981 | | | | | | 19,647,636 | | | | | | 17,433,711 | | |
Basic and diluted net loss per common share
|
| | | $ | (0.00) | | | | | $ | 0.00 | | | | | $ | (0.02) | | | | | $ | 0.00 | | |
Description
|
| |
Level
|
| |
September 30,
2020 |
| |
December 31,
2019 |
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Marketable securities held in Trust Account
|
| | | | 1 | | | | | $ | 697,283,649 | | | | | $ | 695,295,418 | | |
| | |
January 31, 2020
|
| |
January 31, 2019
|
| ||||||
ASSETS
|
| ||||||||||||
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 18,799 | | | | | $ | 15,584 | | |
Restricted cash (Note 2)
|
| | | | 15,005 | | | | | | 14,884 | | |
Accounts receivable, less reserves of approximately $696 and $741 as of January 31, 2020 and 2019, respectively
|
| | | | 193,024 | | | | | | 217,354 | | |
Prepaid expenses and other current assets
|
| | | | 36,422 | | | | | | 52,456 | | |
Total current assets
|
| | | | 263,250 | | | | | | 300,278 | | |
Property and equipment, net
|
| | | | 17,902 | | | | | | 18,125 | | |
Goodwill
|
| | | | 1,253,822 | | | | | | 1,694,313 | | |
Intangible assets, net
|
| | | | 434,985 | | | | | | 525,330 | | |
Derivative asset at fair value
|
| | | | 6 | | | | | | 1,092 | | |
Other assets
|
| | | | 16,300 | | | | | | 6,037 | | |
Total assets
|
| | | $ | 1,986,265 | | | | | $ | 2,545,175 | | |
LIABILITIES AND SHAREHOLDER’S DEFICIT
|
| ||||||||||||
Current liabilities: | | | | | | | | | | | | | |
Current maturities of long-term debt and revolver
|
| | | $ | 981,998 | | | | | $ | 5,567 | | |
Borrowings under accounts receivable facility
|
| | | | 84,786 | | | | | | 74,975 | | |
Loan amounts due to parent entity
|
| | | | 2,188,938 | | | | | | — | | |
Accrued interest due to parent entity
|
| | | | 1,067,132 | | | | | | — | | |
Accounts payable
|
| | | | 14,947 | | | | | | 23,031 | | |
Accrued compensation
|
| | | | 24,576 | | | | | | 31,288 | | |
Accrued expenses, and other current liabilities
|
| | | | 29,267 | | | | | | 22,085 | | |
Deferred revenue
|
| | | | 307,383 | | | | | | 337,086 | | |
Total current liabilities
|
| | | | 4,699,027 | | | | | | 494,032 | | |
Long-term debt
|
| | | | — | | | | | | 922,003 | | |
Loan amounts due to parent entity
|
| | | | — | | | | | | 2,188,938 | | |
Accrued interest due to parent entity
|
| | | | — | | | | | | 819,060 | | |
Deferred tax liabilities
|
| | | | 37,623 | | | | | | 31,949 | | |
Deferred revenue – non-current
|
| | | | 3,787 | | | | |
|
—
|
| |
Other long-term liabilities
|
| | | | 7,572 | | | | | | 6,518 | | |
Total long-term liabilities
|
| | | | 48,982 | | | | | | 3,968,468 | | |
Commitments and contingencies (Note 8) | | | | | | | | | | | | | |
Shareholder’s deficit: | | | | | | | | | | | | | |
Ordinary shares, $1.38 par value: 1,000,000 shares authorized; 100,100 shares issued and outstanding at January 31, 2020 and 2019
|
| | | | 138 | | | | | | 138 | | |
Additional paid-in capital
|
| | | | 83 | | | | | | — | | |
Loans made to related parties
|
| | |
|
—
|
| | | | | (5,367) | | |
Accumulated deficit
|
| | | | (2,761,499) | | | | | | (1,910,846) | | |
Accumulated other comprehensive loss
|
| | | | (466) | | | | | | (1,250) | | |
Total shareholder’s deficit
|
| | | | (2,761,744) | | | | | | (1,917,325) | | |
Total liabilities and shareholder’s deficit
|
| | | $ | 1,986,265 | | | | | $ | 2,545,175 | | |
|
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 96,044 | | | | | | 98,636 | | | | | | 106,274 | | |
Content and software development
|
| | | | 67,951 | | | | | | 57,332 | | | | | | 60,500 | | |
Selling and marketing
|
| | | | 140,785 | | | | | | 150,179 | | | | | | 143,898 | | |
General and administrative
|
| | | | 73,600 | | | | | | 51,421 | | | | | | 45,344 | | |
Amortization of intangible assets
|
| | | | 96,359 | | | | | | 151,752 | | | | | | 194,739 | | |
Impairment of goodwill and intangible assets
|
| | | | 440,598 | | | | | | 16,094 | | | | | | — | | |
Restructuring
|
| | | | 1,900 | | | | | | 2,073 | | | | | | 2,524 | | |
Total operating expenses
|
| | | | 917,237 | | | | | | 527,487 | | | | | | 553,279 | | |
Operating (loss) income
|
| | | | (403,216) | | | | | | 6,654 | | | | | | (5,970) | | |
Other (expense) income, net
|
| | | | (1,058) | | | | | | (3,340) | | | | | | 579 | | |
(Loss) gain on derivative instruments
|
| | | | (4,062) | | | | | | (2,284) | | | | | | 8,233 | | |
Interest income
|
| | | | 306 | | | | | | 687 | | | | | | 1,036 | | |
Interest expense
|
| | | | (429,963) | | | | | | (396,529) | | | | | | (347,222) | | |
Loss before provision (benefit) for income taxes
|
| | | | (837,993) | | | | | | (394,812) | | | | | | (343,344) | | |
Provision for income taxes
|
| | | | 11,212 | | | | | | 5,027 | | | | | | 1,373 | | |
Net loss
|
| | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
Losses per share: | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (8,483.57) | | | | | $ | (3,994.40) | | | | | $ | (3,443.73) | | |
Diluted
|
| | | $ | (8,483.57) | | | | | $ | (3,994.40) | | | | | $ | (3,443.73) | | |
Weighted average common share outstanding: | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 100,100 | | | | | | 100,100 | | | | | | 100,100 | | |
Diluted
|
| | | | 100,100 | | | | | | 100,100 | | | | | | 100,100 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Cost of revenues
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
Content and software development
|
| | | | 6 | | | | | | 23 | | | | | | 23 | | |
Selling and marketing
|
| | | | 77 | | | | | | 110 | | | | | | 155 | | |
General and administrative
|
| | | | — | | | | | | 42 | | | | | | 627 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Comprehensive loss: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
Other comprehensive income (loss) – Foreign currency adjustment, net of tax
|
| | | | 784 | | | | | | 957 | | | | | | (3,799) | | |
Comprehensive loss
|
| | | $ | (848,421) | | | | | $ | (398,882) | | | | | $ | (348,516) | | |
| | |
Ordinary Shares
|
| |
Additional
Paid-In Capital |
| |
Loans
Made to Related Parties |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive (Loss) Income |
| |
Total
Shareholder’s Deficit |
| ||||||||||||||||||||||||
| | |
Number of Shares
|
| |
Par Value
|
| ||||||||||||||||||||||||||||||||||||
Balance January 31, 2017
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | — | | | | | $ | (5,007) | | | | | $ | (1,161,912) | | | | | $ | 1,592 | | | | | $ | (1,165,189) | | |
Shared-based compensation
|
| | | | — | | | | | | — | | | | | | 805 | | | | | | — | | | | | | — | | | | | | — | | | | | | 805 | | |
Distribution to parent company
|
| | | | — | | | | | | — | | | | | | (805) | | | | | | — | | | | | | (1,782) | | | | | | — | | | | | | (2,587) | | |
Loans, and interest, made to related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | (382) | | | | | | — | | | | | | — | | | | | | (382) | | |
Repayments from related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | 123 | | | | | | — | | | | | | — | | | | | | 123 | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,799) | | | | | | (3,799) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (344,717) | | | | | | — | | | | | | (344,717) | | |
Balance January 31, 2018
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | — | | | | | $ | (5,266) | | | | | $ | (1,508,411) | | | | | $ | (2,207) | | | | | $ | (1,515,746) | | |
Shared-based compensation
|
| | | | — | | | | | | — | | | | | | 175 | | | | | | — | | | | | | — | | | | | | — | | | | | | 175 | | |
Distribution to parent company
|
| | | | — | | | | | | — | | | | | | (175) | | | | | | — | | | | | | (2,596) | | | | | | — | | | | | | (2,771) | | |
Loans, and interest, made to related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | (101) | | | | | | — | | | | | | — | | | | | | (101) | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 957 | | | | | | 957 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (399,839) | | | | | | — | | | | | | (399,839) | | |
Balance January 31, 2019
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | — | | | | | $ | (5,367) | | | | | $ | (1,910,846) | | | | | $ | (1,250) | | | | | $ | (1,917,325) | | |
Shared-based compensation
|
| | | | — | | | | | | — | | | | | | 83 | | | | | | — | | | | | | — | | | | | | — | | | | | | 83 | | |
Reserve on loans made to related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,367 | | | | | | — | | | | | | — | | | | | | 5,367 | | |
Cumulative effect of accounting changes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,448) | | | | | | — | | | | | | (1,448) | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 784 | | | | | | 784 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (849,205) | | | | | | — | | | | | | (849,205) | | |
Balance January 31, 2020
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | 83 | | | | | $ | — | | | | | $ | (2,761,499) | | | | | $ | (466) | | | | | $ | (2,761,744) | | |
|
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | |
Share-based compensation
|
| | | | 83 | | | | | | 175 | | | | | | 805 | | |
Depreciation and amortization
|
| | | | 9,716 | | | | | | 12,666 | | | | | | 16,664 | | |
Amortization of intangible assets
|
| | | | 96,359 | | | | | | 151,752 | | | | | | 194,739 | | |
Change in bad debt reserve
|
| | | | (42) | | | | | | 184 | | | | | | (52) | | |
Provision (benefit) for income taxes – non-cash
|
| | | | 5,759 | | | | | | (415) | | | | | | (1,872) | | |
Non-cash interest expense
|
| | | | 5,687 | | | | | | 5,555 | | | | | | 7,818 | | |
Impairment of goodwill and intangible assets
|
| | | | 440,598 | | | | | | 16,094 | | | | | | — | | |
Impairment of notes receivable
|
| | | | — | | | | | | 3,181 | | | | | | — | | |
Impairment of notes receivable from related parties
|
| | | | 5,367 | | | | | | — | | | | | | — | | |
Unrealized loss (gain) on derivative instruments
|
| | | | 4,062 | | | | | | 2,284 | | | | | | (8,233) | | |
Loss on disposition of assets
|
| | | | 104 | | | | | | 366 | | | | | | 186 | | |
Changes in current assets and liabilities:
|
| | | | | | | | | | | | | | | | | | |
Purchase of derivative instruments
|
| | | | — | | | | | | (2,418) | | | | | | (2,339) | | |
Accounts receivable
|
| | | | 23,678 | | | | | | 13,310 | | | | | | 3,494 | | |
Prepaid expenses and other assets
|
| | | | (2,547) | | | | | | (1,606) | | | | | | (21,591) | | |
Accounts payable
|
| | | | (6,581) | | | | | | 6,279 | | | | | | 3,580 | | |
Accrued expenses and other liabilities
|
| | | | 250,694 | | | | | | 221,496 | | | | | | 181,139 | | |
Deferred revenue
|
| | | | (21,145) | | | | | | (18,904) | | | | | | (5,358) | | |
Net cash (used in) provided by operating activities
|
| | | | (37,413) | | | | | | 10,160 | | | | | | 24,263 | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (10,353) | | | | | | (14,142) | | | | | | (7,485) | | |
Internal use software development costs
|
| | | | (7,047) | | | | | | (8,410) | | | | | | (11,050) | | |
Net cash used in investing activities
|
| | | | (17,400) | | | | | | (22,552) | | | | | | (18,535) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Payments received on note for sale of TCE
|
| | | | — | | | | | | — | | | | | | 327 | | |
Loans made to related parties, net of repayments
|
| | | | — | | | | | | (101) | | | | | | (259) | | |
Distribution to parent company
|
| | | | — | | | | | | (2,771) | | | | | | (2,587) | | |
Principal repayments of capital lease obligations
|
| | | | (756) | | | | | | — | | | | | | — | | |
Proceeds from accounts receivable facility, net of principal payments
|
| | | | 9,798 | | | | | | 61,942 | | | | | | (54,965) | | |
Borrowings under revolving line of credit, net of repayments
|
| | | | 55,400 | | | | | | (26,600) | | | | | | 30,575 | | |
Principal payments on First and Second Lien Term Loans
|
| | | | (6,641) | | | | | | (4,938) | | | | | | (8,238) | | |
Net cash provided by financing activities
|
| | | | 57,801 | | | | | | 27,532 | | | | | | (35,147) | | |
Effect of exchange rate changes on cash and cash equivalents
|
| | | | 348 | | | | | | (535) | | | | | | (1,125) | | |
Net increase (decrease) in cash, cash equivalents and restricted cash
|
| | | | 3,336 | | | | | | 14,605 | | | | | | (30,544) | | |
Cash, cash equivalents and restricted cash, beginning of year
|
| | | | 30,468 | | | | | | 15,863 | | | | | | 46,407 | | |
Cash, cash equivalents and restricted cash, end of year
|
| | | $ | 33,804 | | | | | $ | 30,468 | | | | | | 15,863 | | |
Supplemental Cash Flow Information: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 18,799 | | | | | $ | 15,584 | | | | | $ | 13,822 | | |
Restricted cash
|
| | | | 15,005 | | | | | | 14,884 | | | | | | 2,041 | | |
Cash, cash equivalents and restricted cash, end of year
|
| | | $ | 33,804 | | | | | $ | 30,468 | | | | | $ | 15,863 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Supplemental disclosure of cash flow information and non-cash investing and financing activities:
|
| | | | | | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 175,748 | | | | | $ | 167,670 | | | | | $ | 167,876 | | |
Cash (received) paid for income taxes, net of refunds
|
| | | $ | (2,069) | | | | | $ | 3,421 | | | | | $ | 4,650 | | |
Purchases of property and equipment in payables and accrued expenses
|
| | | $ | 170 | | | | | $ | 889 | | | | | $ | 2,257 | | |
Note issued to parent entity for paid in kind interest
|
| | | $ | — | | | | | $ | 50,000 | | | | | $ | 54,000 | | |
Description
|
| |
Estimated Useful Lives
|
|
Computer equipment | | |
3 years
|
|
Furniture and fixtures | | |
5 years
|
|
Leasehold improvements | | |
Lesser of 7 years or life of lease
|
|
| | |
As of February 1, 2019
|
| |||||||||||||||
| | |
Prior to Adoption
of Topic 606 |
| |
Impact of Adoption
of Topic 606(3) |
| |
As Adjusted
|
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Prepaid expenses and other current assets(1)
|
| | | $ | 52,456 | | | | | $ | (15,523) | | | | | $ | 36,933 | | |
Other long-term assets(1)
|
| | | | 6,037 | | | | | | 10,131 | | | | | | 16,168 | | |
Total assets
|
| | | | 2,545,175 | | | | | | (5,392) | | | | | | 2,539,783 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Deferred revenue, current(2)
|
| | | | 337,086 | | | | | | (3,859) | | | | | | 333,227 | | |
Total current liabilities
|
| | | | 494,032 | | | | | | (3,859) | | | | | | 490,173 | | |
Deferred tax liabilities
|
| | | | 31,949 | | | | | | (85) | | | | | | 31,864 | | |
Total long-term liabilities
|
| | | | 3,968,468 | | | | | | (85) | | | | | | 3,968,383 | | |
Shareholder’s deficit: | | | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (1,910,846) | | | | | | (1,448) | | | | | | (1,912,294) | | |
Total shareholder’s deficit
|
| | | | (1,917,325) | | | | | | (1,448) | | | | | | (1,918,773) | | |
| | |
As of January 31, 2020
|
| |||||||||||||||
| | |
As Reported
|
| |
Impact of Adoption
of Topic 606(3) |
| |
Under Previous
GAAP |
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Prepaid expenses and other current assets
|
| | | $ | 36,422 | | | | | $ | 12,028 | | | | | $ | 48,450 | | |
Other long-term assets
|
| | | | 16,300 | | | | | | (11,692) | | | | | | 4,608 | | |
Total assets
|
| | | | 1,986,265 | | | | | | 336 | | | | | | 1,986,601 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Deferred revenue, current
|
| | | | 307,383 | | | | | | 8,075 | | | | | | 315,458 | | |
Total current liabilities
|
| | | | 4,699,027 | | | | | | 8,075 | | | | | | 4,707,102 | | |
Deferred revenue, non-current
|
| | | | 3,787 | | | | | | (3,787) | | | | | | — | | |
Total long-term liabilities
|
| | | | 48,982 | | | | | | (3,787) | | | | | | 45,195 | | |
Shareholder’s deficit: | | | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (2,761,499) | | | | | | (3,952) | | | | | | (2,765,451) | | |
Total shareholders’ deficit
|
| | | | (2,761,744) | | | | | | (3,952) | | | | | | (2,765,696) | | |
| | |
For the fiscal year ended January 31, 2020
|
| |||||||||||||||
| | |
As Reported
|
| |
Impact of Adoption
of Topic 606 |
| |
Under Previous
GAAP |
| |||||||||
Total revenues
|
| | | $ | 514,021 | | | | | $ | (429) | | | | | $ | 513,592 | | |
Selling and marketing
|
| | | | 140,785 | | | | | | 5,056 | | | | | | 145,841 | | |
Operating loss
|
| | | | (403,216) | | | | | | (5,485) | | | | | | (408,701) | | |
Loss before income taxes
|
| | | | (837,993) | | | | | | (5,485) | | | | | | (843,478) | | |
Provision for income taxes
|
| | | | 11,212 | | | | | | (85) | | | | | | 11,127 | | |
Net loss
|
| | | | (849,205) | | | | | | (5,400) | | | | | | (854,605) | | |
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
SaaS and subscription services
|
| | | $ | 439,791 | | | | | $ | 462,240 | | | | | $ | 473,684 | | |
Software maintenance
|
| | | | 23,982 | | | | | | 30,161 | | | | | | 34,162 | | |
Professional services
|
| | | | 45,661 | | | | | | 38,043 | | | | | | 33,942 | | |
Perpetual and term-based software licenses
|
| | | | 1,885 | | | | | | 3,340 | | | | | | 5,095 | | |
Hardware and other
|
| | | | 2,702 | | | | | | 357 | | | | | | 426 | | |
Total net revenues(1)
|
| | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
| | |
Year Ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 405,065 | | | | | $ | 421,746 | | | | | $ | 433,812 | | |
Other Americas
|
| | | | 21,925 | | | | | | 22,807 | | | | | | 24,802 | | |
Europe, Middle East and Africa
|
| | | | 61,321 | | | | | | 66,244 | | | | | | 63,227 | | |
Asia-Pacific
|
| | | | 25,710 | | | | | | 23,344 | | | | | | 25,468 | | |
Total net revenues(1)
|
| | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
| | |
January 31,
2020 |
| |||
Deferred revenue at February 1, 2019 (as adjusted)
|
| | | $ | 333,227 | | |
Billings deferred
|
| | | | 491,964 | | |
Recognition of prior deferred revenue
|
| | | | (514,021) | | |
Deferred revenue at January 31, 2020 (includes current and non-current components)
|
| | | $ | 311,170 | | |
| | |
January 31,
2020 |
| |||
Deferred contract acquisition costs at February 1, 2019 (as adjusted)
|
| | | $ | 20,122 | | |
Deferred contract costs
|
| | | | 19,080 | | |
Recognition of deferred contract acquisition costs
|
| | | | (16,315) | | |
Deferred contract acquisition costs at January 31, 2020 (includes current and non-current)
|
| | | $ | 22,887 | | |
| | |
Fiscal Year Ended January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Computer equipment
|
| | | $ | 80,483 | | | | | $ | 80,447 | | |
Furniture and fixtures
|
| | | | 3,046 | | | | | | 2,527 | | |
Leasehold improvements
|
| | | | 5,220 | | | | | | 3,413 | | |
Construction in progress
|
| | | | 18 | | | | | | 859 | | |
| | | | | 88,767 | | | | | | 87,246 | | |
Less accumulated depreciation and amortization
|
| | | | (70,865) | | | | | | (69,121) | | |
| | | | $ | 17,902 | | | | | $ | 18,125 | | |
| | |
Employee
Severance and Related Costs |
| |
Contractual
Obligations |
| |
Total
|
| |||||||||
Restructuring accrual as of January 31, 2017
|
| | | $ | 3,485 | | | | | $ | 427 | | | | | $ | 3,912 | | |
Restructuring charges incurred
|
| | | | 2,524 | | | | | | — | | | | | | 2,524 | | |
Payments made
|
| | | | (4,636) | | | | | | (402) | | | | | | (5,038) | | |
Foreign currency translation adjustment
|
| | | | 131 | | | | | | — | | | | | | 131 | | |
Restructuring accrual as of January 31, 2018
|
| | | | 1,504 | | | | | | 25 | | | | | | 1,529 | | |
Restructuring charges incurred
|
| | | | 1,971 | | | | | | 102 | | | | | | 2,073 | | |
Payments made
|
| | | | (1,720) | | | | | | (100) | | | | | | (1,820) | | |
| | |
Employee
Severance and Related Costs |
| |
Contractual
Obligations |
| |
Total
|
| |||||||||
Foreign currency translation adjustment
|
| | | | (42) | | | | | | — | | | | | | (42) | | |
Restructuring accrual as of January 31, 2019
|
| | | | 1,713 | | | | | | 27 | | | | | | 1,740 | | |
Restructuring charges incurred
|
| | | | 1,610 | | | | | | 290 | | | | | | 1,900 | | |
Payments made
|
| | | | (2,588) | | | | | | (41) | | | | | | (2,629) | | |
Foreign currency translation adjustment
|
| | | | 26 | | | | | | — | | | | | | 26 | | |
Restructuring accrual as of January 31, 2020
|
| | | $ | 761 | | | | | $ | 276 | | | | | $ | 1,037 | | |
|
| | |
January 31, 2020
|
| |
January 31, 2019
|
| | | | ||||||||||||||||||||||||||||||
| | |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| |
Weighted
Average Useful Life |
| ||||||||||||||||||
Developed software/ courseware
|
| | | $ | 130,700 | | | | | $ | 119,743 | | | | | $ | 10,957 | | | | | $ | 418,500 | | | | | $ | 390,069 | | | | | $ | 28,431 | | | |
89 months
|
|
Customer contracts/ relationships
|
| | | | 670,800 | | | | | | 466,972 | | | | | | 203,828 | | | | | | 670,800 | | | | | | 400,872 | | | | | | 269,928 | | | |
130 months
|
|
Trademarks and trade names
|
| | | | 45,300 | | | | | | 27,648 | | | | | | 17,652 | | | | | | 45,300 | | | | | | 23,171 | | | | | | 22,129 | | | |
124 months
|
|
Backlog
|
| | | | — | | | | | | — | | | | | | — | | | | | | 92,400 | | | | | | 89,367 | | | | | | 3,033 | | | |
- months
|
|
Skillsoft trademark
|
| | | | 186,000 | | | | | | — | | | | | | 186,000 | | | | | | 186,000 | | | | | | — | | | | | | 186,000 | | | |
Indefinite
|
|
Capitalized software
|
| | | | 26,468 | | | | | | 9,920 | | | | | | 16,548 | | | | | | 20,495 | | | | | | 4,686 | | | | | | 15,809 | | | |
60 months
|
|
Total
|
| | | $ | 1,059,268 | | | | | $ | 624,283 | | | | | $ | 434,985 | | | | | $ | 1,433,495 | | | | | $ | 908,165 | | | | | $ | 525,330 | | | |
122 months
|
|
Fiscal Year
|
| |
Amortization Expense
|
| |||
2021
|
| | | $ | 68,639 | | |
2022
|
| | | | 57,687 | | |
2023
|
| | | | 47,488 | | |
2024
|
| | | | 37,960 | | |
2025
|
| | | | 20,108 | | |
Thereafter
|
| | | | 17,103 | | |
Total
|
| | | $ | 248,985 | | |
Description
|
| |
Skillsoft
|
| |
SumTotal
|
| |
Consolidated
|
| |||||||||
Gross carrying amount of goodwill, January 31, 2017
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,694,383 | | |
Foreign currency translation adjustment
|
| | | | — | | | | | | — | | | | | | (477) | | |
Gross carrying amount of goodwill, January 31, 2018
|
| | | | — | | | | | | — | | | | | | 1,693,906 | | |
Re-allocation of goodwill upon change in reporting units
|
| | | | 1,433,662 | | | | | | 260,244 | | | | | | — | | |
Foreign currency translation adjustment
|
| | | | 385 | | | | | | 22 | | | | | | 407 | | |
Gross carrying amount of Goodwill, January 31, 2019
|
| | | | 1,434,047 | | | | | | 260,266 | | | | | | 1,694,313 | | |
Foreign currency translation adjustment
|
| | | | 113 | | | | | | (6) | | | | | | 107 | | |
Impairment of goodwill
|
| | | | (321,340) | | | | | | (119,258) | | | | | | (440,598) | | |
Goodwill, net January 31, 2020
|
| | | $ | 1,112,820 | | | | | $ | 141,002 | | | | | $ | 1,253,822 | | |
|
Goodwill, gross at January 31, 2020
|
| | | $ | 1,434,160 | | | | | $ | 260,260 | | | | | $ | 1,694,420 | | |
|
Accumulated impairment losses
|
| | | | (321,340) | | | | | | (119,258) | | | | | | (440,598) | | |
|
Goodwill, net January 31, 2020
|
| | | $ | 1,112,820 | | | | | $ | 141,002 | | | | | $ | 1,253,822 | | |
| | |
January 31,
2020 |
| |
January 31,
2019 |
| |
January 31,
2018 |
| |||||||||
Ireland
|
| | | $ | (645,360) | | | | | $ | (336,002) | | | | | $ | (291,052) | | |
United States
|
| | | | (197,600) | | | | | | (62,805) | | | | | | (53,471) | | |
Rest of World
|
| | | | 4,967 | | | | | | 3,995 | | | | | | 1,179 | | |
Total
|
| | | $ | (837,993) | | | | | $ | (394,812) | | | | | $ | (343,344) | | |
| | |
January 31,
2020 |
| |
January 31,
2019 |
| |
January 31,
2018 |
| |||||||||
Current: | | | | | | | | | | | | | | | | | | | |
Ireland
|
| | | $ | 1,099 | | | | | $ | 1,559 | | | | | $ | 1,041 | | |
United States
|
| | | | 2,405 | | | | | | 652 | | | | | | 866 | | |
Rest of World
|
| | | | 1,949 | | | | | | 3,231 | | | | | | 1,338 | | |
| | | | $ | 5,453 | | | | | $ | 5,442 | | | | | $ | 3,245 | | |
Deferred: | | | | | | | | | | | | | | | | | | | |
Ireland
|
| | | $ | 8,533 | | | | | | 1,517 | | | | | | 522 | | |
United States
|
| | | | (2,693) | | | | | | (1,906) | | | | | | (5,539) | | |
Rest of World
|
| | | | (81) | | | | | | (26) | | | | | | 3,145 | | |
| | | | $ | 5,759 | | | | | $ | (415) | | | | | $ | (1,872) | | |
Tax provision (benefit)
|
| | | $ | 11,212 | | | | | $ | 5,027 | | | | | $ | 1,373 | | |
| | |
January 31,
2020 |
| |
January 31,
2019 |
| ||||||
Assets: | | | | | | | | | | | | | |
Net operating loss carryforwards
|
| | | $ | 29,753 | | | | | $ | 42,568 | | |
Deferred interest expense
|
| | | | 145,399 | | | | | | 112,680 | | |
Customer relationships
|
| | | | 6,888 | | | | | | 8,137 | | |
Reserves and Accruals
|
| | | | 7,204 | | | | | | 5,396 | | |
Tax credits
|
| | | | 5,893 | | | | | | 5,528 | | |
Transaction costs
|
| | | | 4,216 | | | | | | — | | |
Other intangibles
|
| | | | 7,237 | | | | | | 8,346 | | |
Gross deferred tax assets
|
| | | $ | 206,590 | | | | | $ | 182,655 | | |
Less: Valuation allowance
|
| | | | (160,531) | | | | | | (114,816) | | |
|
| | |
January 31,
2020 |
| |
January 31,
2019 |
| ||||||
Net deferred tax assets
|
| | | $ | 46,059 | | | | | $ | 67,839 | | |
Liabilities: | | | | | | | | | | | | | |
Intangible assets – Customer relationships
|
| | | $ | (38,662) | | | | | $ | (50,906) | | |
Intangible assets – Tradenames
|
| | | | (28,035) | | | | | | (29,345) | | |
Intangible assets – Technology
|
| | | | (2,950) | | | | | | (5,976) | | |
Intangible assets – Contractual Backlog
|
| | | | — | | | | | | (830) | | |
Accrued interest income
|
| | | | — | | | | | | (429) | | |
Property and equipment, net
|
| | | | (5,665) | | | | | | (5,370) | | |
Other
|
| | | | — | | | | | | (16) | | |
Other intangibles
|
| | | | (8,370) | | | | | | (6,916) | | |
Gross deferred tax liabilities
|
| | | $ | (83,682) | | | | | $ | (99,788) | | |
Total net deferred tax liabilities, net
|
| | | $ | (37,623) | | | | | $ | (31,949) | | |
Gross deferred tax assets per consolidated balance sheets
|
| | | $ | — | | | | | $ | — | | |
Gross deferred tax liabilities per consolidated balance sheets
|
| | | | (37,623) | | | | | | (31,949) | | |
Total net deferred tax liabilities, net
|
| | | $ | (37,623) | | | | | $ | (31,949) | | |
|
| | |
January 31,
2020 |
| |
January 31,
2019 |
| |
January 31,
2018 |
| |||||||||
Income tax provision (benefit) at Irish statutory rate
|
| | | | (12.5)% | | | | | | (12.5)% | | | | | | (12.5)% | | |
Increase (decrease) in tax resulting from: | | | | | | | | | | | | | | | | | | | |
U.S. state tax provision, net of U.S. federal benefit
|
| | | | (0.2) | | | | | | (0.8) | | | | | | (0.6) | | |
Foreign rate differential
|
| | | | (1.9) | | | | | | (1.2) | | | | | | (3.3) | | |
Nondeductible items
|
| | | | 1.2 | | | | | | 2.5 | | | | | | 2.1 | | |
Unrecognized tax benefit
|
| | | | 0.2 | | | | | | 0.3 | | | | | | (0.2) | | |
Foreign tax credits
|
| | | | — | | | | | | — | | | | | | (0.6) | | |
Tax reform-federal rate change
|
| | | | — | | | | | | — | | | | | | 2.2 | | |
Change in valuation allowance
|
| | | | 5.5 | | | | | | 9.6 | | | | | | 12.8 | | |
Impairment of goodwill
|
| | | | 7.9 | | | | | | — | | | | | | — | | |
Other
|
| | | | 1.2 | | | | | | 3.4 | | | | | | 0.5 | | |
Effective tax rate – provision (benefit)
|
| | | | 1.4% | | | | | | 1.3% | | | | | | 0.4% | | |
| | |
January 31,
2020 |
| |
January 31,
2019 |
| |
January 31,
2018 |
| |||||||||
Unrecognized tax benefits, beginning balance
|
| | | $ | 2,081 | | | | | $ | 5,035 | | | | | $ | 2,290 | | |
Increases for tax positions taken during the current period
|
| | | | — | | | | | | — | | | | | | 3,515 | | |
Increases for tax positions taken during a prior period
|
| | | | 1,987 | | | | | | 915 | | | | | | 167 | | |
Decreases for tax positions taken during a prior period
|
| | | | (295) | | | | | | (3,736) | | | | | | (407) | | |
Decreases related to settlements
|
| | | | — | | | | | | — | | | | | | (251) | | |
Decreases resulting from the expiration of statute of limitations
|
| | | | — | | | | | | (133) | | | | | | (279) | | |
Unrecognized tax benefits, ending balance
|
| | | $ | 3,773 | | | | | $ | 2,081 | | | | | $ | 5,035 | | |
Fiscal year ended January 31:
|
| |
Operating Leases
|
| |
Capital Leases
|
| ||||||
2021
|
| | | $ | 4,892 | | | | | $ | 1,427 | | |
2022
|
| | | | 3,761 | | | | | | 1,679 | | |
2023
|
| | | | 3,220 | | | | | | — | | |
2024
|
| | | | 2,607 | | | | | | — | | |
2025
|
| | | | 1,826 | | | | | | — | | |
Thereafter
|
| | | | 6,906 | | | | | | — | | |
Total(a) | | | | $ | 23,212 | | | | | $ | 3,106 | | |
| | |
U nits
|
| |||
Outstanding at January 31, 2019
|
| | | | 356,771 | | |
Issued
|
| | | | — | | |
Forfeited
|
| | | | (104,007) | | |
Outstanding at January 31, 2020
|
| | | | 252,764 | | |
Payable in Fiscal Year
|
| |
First Lien
|
| |
Second Lien
|
| |
Revolving
Credit |
| |
Total
|
| ||||||||||||
Fiscal 2021
|
| | | $ | 627,536 | | | | | $ | 302,336 | | | | | | 60,000 | | | | | $ | 989,872 | | |
Total
|
| | | $ | 627,536 | | | | | $ | 302,336 | | | | | | 60,000 | | | | | $ | 989,872 | | |
Instrument
|
| |
Balance
|
| |
Weighted
Average Interest Rate |
| |
Interest Type
|
| |
Issuance Date
|
| |
Maturity Date
|
| ||||||
Series 1
|
| | | $ | 933,615 | | | | | | 13.0% | | | |
Variable, Compounding
|
| |
Apr 25, 2014
|
| |
Apr 25, 2045
|
|
Series 2
|
| | | | 598,787 | | | | | | 8.0% | | | |
Variable, Simple
|
| |
Apr 25, 2014
|
| |
Apr 28, 2021
|
|
Series 3
|
| | | | 327,537 | | | | | | 11.5% | | | |
Variable, Simple
|
| |
Apr 25, 2014
|
| |
Apr 28, 2021
|
|
Series 4
|
| | | | 60,000 | | | | | | 13.0% | | | |
Variable, Compounding
|
| |
Sep 25, 2014
|
| |
Sep 30, 2044
|
|
Series 5(a)
|
| | | | 71,538 | | | | | | 8.0% | | | |
Variable, Simple
|
| |
Sep 25, 2014
|
| |
Sep 30, 2044
|
|
Series 5(b)
|
| | | | 28,461 | | | | | | 11.5% | | | |
Variable, Simple
|
| |
Sep 25, 2014
|
| |
Sep 30, 2044
|
|
Intra-group Loan Agreement
|
| | | | 65,000 | | | | | | 12.0% | | | |
Variable, Compounding
|
| |
Dec 3, 2015
|
| |
Nov 3, 2044
|
|
Funding Bond # 1
|
| | | | 54,000 | | | | | | 13.0% | | | |
Variable, Simple
|
| |
Jan 31, 2018
|
| |
Apr 28, 2021
|
|
Funding Bond # 2
|
| | | | 50,000 | | | | | | 13.0% | | | |
Variable, Simple
|
| |
Jan 29, 2019
|
| |
Apr 28, 2021
|
|
Total
|
| | | $ | 2,188,938 | | | | | | | | | | | | | | | | | |
Derivatives not designated as
hedging instruments |
| |
Notional
Value (in thousands) |
| |
Interest rate/
strike rate |
| |
Index
|
| |
Effective Date
|
| |
Maturity
|
| ||||||
Interest rate cap
|
| | | $ | 884,394 | | | | | | 2.869% | | | |
1 month LIBOR
|
| |
January 31, 2020
|
| |
April 30, 2021
|
|
| | |
Assets
|
| |
Liabilities
|
| ||||||
Balances as of January 31, 2017
|
| | | $ | — | | | | | $ | (6,638) | | |
Purchase of derivative instrument
|
| | | | 2,339 | | | | | | — | | |
Change in fair value of derivative instrument
|
| | | | 1,725 | | | | | | 6,508 | | |
Balances as of January 31, 2018
|
| | | | 4,064 | | | | | | (130) | | |
Sale of derivative instrument
|
| | | | (6,776) | | | | | | — | | |
Purchase of derivative instrument
|
| | | | 9,194 | | | | | | — | | |
Change in fair value of derivative instrument
|
| | | | (2,414) | | | | | | 130 | | |
Balances as of January 31, 2019
|
| | | | 4,068 | | | | | $ | — | | |
Change in fair value of derivative instrument
|
| | | | (4,062) | | | | | | — | | |
Balances as of January 31, 2020
|
| | | $ | 6 | | | | | $ | — | | |
Derivatives not designated as hedging
instruments |
| |
Balance sheet location
|
| |
Fair value
(in thousands) |
| |
Fair value
(in thousands) |
| ||||||
|
January 31, 2020
|
| |
January 31, 2019
|
| |||||||||||
Interest rate derivative contracts
|
| |
Prepaid expense and other current assets
|
| | | $ | — | | | | | $ | 2,976 | | |
Interest rate derivative contracts
|
| | Derivative asset at fair value | | | | $ | 6 | | | | | $ | 1,092 | | |
| | |
January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Deferred commission costs – current
|
| | | $ | 11,195 | | | | | $ | 25,513 | | |
Refundable income tax
|
| | | | 6,726 | | | | | | 8,192 | | |
Prepaid software maintenance costs
|
| | | | 6,569 | | | | | | 5,200 | | |
Prepaid royalties
|
| | | | 2,294 | | | | | | 2,245 | | |
Employee bonus advance
|
| | | | 1,867 | | | | | | — | | |
Other
|
| | | | 7,771 | | | | | | 11,396 | | |
Total prepaid expenses and other current assets
|
| | | $ | 36,422 | | | | | $ | 52,546 | | |
| | |
January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Deferred commission costs – non-current
|
| | | $ | 11,692 | | | | | $ | — | | |
Other
|
| | | | 2,629 | | | | | | 2,303 | | |
Non-current refundable income tax
|
| | | | 1,979 | | | | | | 3,734 | | |
Total other assets
|
| | | $ | 16,300 | | | | | $ | 6,037 | | |
| | |
January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Professional fees
|
| | | $ | 12,947 | | | | | $ | 4,452 | | |
Accrued sales tax/VAT
|
| | | | 5,824 | | | | | | 7,382 | | |
Accrued royalties
|
| | | | 1,869 | | | | | | 2,255 | | |
Accrued tax
|
| | | | 1,288 | | | | | | 890 | | |
Other accrued liabilities
|
| | | | 7,339 | | | | | | 7,106 | | |
Total accrued expenses
|
| | | $ | 29,267 | | | | | $ | 22,085 | | |
| | |
January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Uncertain tax positions; including interest and penalties – long-term
|
| | | $ | 6,025 | | | | | $ | 4,017 | | |
Other
|
| | | | 1,547 | | | | | | 2,501 | | |
Total other long -term liabilities
|
| | | $ | 7,572 | | | | | $ | 6,518 | | |
|
| | |
Total
|
| |
Significant
Unobservable Inputs (Level 2) |
| ||||||
Derivative asset instruments
|
| | | $ | 6 | | | | | $ | 6 | | |
Total assets recorded at fair value
|
| | | $ | 6 | | | | | $ | 6 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Skillsoft | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | $ | 362,503 | | | | | $ | 378,316 | | | | | $ | 383,746 | | |
Operating expenses
|
| | | | 637,658 | | | | | | 364,581 | | | | | | 381,961 | | |
Operating (loss) income
|
| | | $ | (275,155) | | | | | $ | 13,735 | | | | | $ | 1,785 | | |
SumTotal | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | $ | 151,518 | | | | | $ | 155,825 | | | | | $ | 163,563 | | |
Operating expenses
|
| | | | 279,579 | | | | | | 162,906 | | | | | | 171,318 | | |
Operating income (loss)
|
| | | $ | (128,061) | | | | | $ | (7,081) | | | | | $ | (7,755) | | |
Consolidated | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | $ | 514,021 | | | | | $ | 534,141 | | | | | $ | 547,309 | | |
Operating expenses
|
| | | | 917,237 | | | | | | 527,487 | | | | | | 553,279 | | |
Operating income (loss)
|
| | | | (403,216) | | | | | | 6,654 | | | | | | (5,970) | | |
Total non-operating (expense) income
|
| | | | (5,120) | | | | | | (5,624) | | | | | | 8,812 | | |
Interest expense, net
|
| | | | (429,657) | | | | | | (395,842) | | | | | | (346,186) | | |
Provision for income taxes
|
| | | | (11,212) | | | | | | (5,027) | | | | | | (1,373) | | |
Net loss
|
| | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
| | |
Fiscal Year Ended January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Skillsoft
|
| | | $ | 1,655,474 | | | | | $ | 2,060,540 | | |
SumTotal
|
| | | | 330,785 | | | | | | 483,543 | | |
Corporate
|
| | | | 6 | | | | | | 1,092 | | |
Consolidated
|
| | | $ | 1,986,265 | | | | | $ | 2,545,175 | | |
| | |
Fiscal Year Ended January 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
United States
|
| | | $ | 13,469 | | | | | $ | 14,779 | | |
Ireland
|
| | | | 897 | | | | | | 1,130 | | |
Rest of world
|
| | | | 3,536 | | | | | | 2,216 | | |
Total
|
| | | $ | 17,902 | | | | | $ | 18,125 | | |
| | |
Year ended January 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
Net loss
|
| | | $ | (849,205) | | | | | $ | (399,839) | | | | | $ | (344,717) | | |
Weighted average common shares outstanding
|
| | | | 100,100 | | | | | | 100,100 | | | | | | 100,100 | | |
Effect of incremental diluted shares outstanding
|
| | | | — | | | | | | — | | | | | | — | | |
Diluted weighted average common shares outstanding
|
| | | | 100,100 | | | | | | 100,100 | | | | | | 100,100 | | |
Basic earnings per share
|
| | | $ | (8,483.57) | | | | | $ | (3,994.40) | | | | | $ | (3,443.73) | | |
Dilutive earnings per share
|
| | | $ | (8,483.57) | | | | | $ | (3,994.40) | | | | | $ | (3,443.73) | | |
| | |
(Unaudited)
Successor October 31, 2020 |
| | |
Predecessor
January 31, 2020 |
| ||||||
ASSETS | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 70,836 | | | | | | $ | 18,799 | | |
Restricted cash
|
| | | | 3,732 | | | | | | | 15,005 | | |
Accounts receivable, less reserves of approximately $186 and $696 as of October 31, 2020 and January 31, 2020, respectively
|
| | | | 99,122 | | | | | | | 193,024 | | |
Prepaid expenses and other current assets
|
| | | | 30,319 | | | | | | | 36,422 | | |
Total current assets
|
| | | | 204,009 | | | | | | | 263,250 | | |
Property and equipment, net
|
| | | | 14,881 | | | | | | | 17,902 | | |
Goodwill
|
| | | | 495,198 | | | | | | | 1,253,822 | | |
Intangible assets, net
|
| | | | 751,103 | | | | | | | 434,985 | | |
Derivative asset at fair value
|
| | | | — | | | | | | | 6 | | |
Right of use assets
|
| | | | 16,576 | | | | | | | — | | |
Other assets
|
| | | | 5,672 | | | | | | | 16,300 | | |
Total assets
|
| | | $ | 1,487,439 | | | | | | $ | 1,986,265 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT) | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt
|
| | | | 3,900 | | | | | | | 981,998 | | |
Borrowings under accounts receivable facility
|
| | | | 20,119 | | | | | | | 84,786 | | |
Loan amounts due to predecessor parent
|
| | | | — | | | | | | | 2,188,938 | | |
Accrued interest due to predecessor parent
|
| | | | — | | | | | | | 1,067,132 | | |
Accounts payable
|
| | | | 10,685 | | | | | | | 14,947 | | |
Accrued compensation
|
| | | | 27,240 | | | | | | | 24,576 | | |
Accrued expenses and other current liabilities
|
| | | | 25,001 | | | | | | | 29,267 | | |
Lease liabilities
|
| | | | 4,675 | | | | | | | — | | |
Deferred revenue
|
| | | | 129,527 | | | | | | | 307,383 | | |
Total current liabilities
|
| | | | 221,147 | | | | | | | 4,699,027 | | |
Long-term debt
|
| | | | 511,050 | | | | | | | — | | |
Deferred tax liabilities
|
| | | | 95,717 | | | | | | | 37,623 | | |
Long term lease liabilities
|
| | | | 14,983 | | | | | | | — | | |
Deferred revenue – non-current
|
| | | | 1,297 | | | | | | | 3,787 | | |
Other long-term liabilities
|
| | | | 7,418 | | | | | | | 7,572 | | |
Total long-term liabilities
|
| | | | 630,465 | | | | | | | 48,982 | | |
Commitments and contingencies | | | | | — | | | | | | | — | | |
Shareholders’ equity (deficit): | | | | | | | | | | | | | | |
Predecessor Shareholder’s (deficit)- Predecessor ordinary shares, $1.38 par value:
1,000,000 shares authorized; 100,100 shares issued and outstanding |
| | | | — | | | | | | | 138 | | |
Successor Shareholders’ equity- Successor Class A and Class B common shares,
$0.01 par value: 1,000,000,000 shares authorized (800,000,000 Class A, 200,000,000 Class B); 4,000,000 shares issued and outstanding (3,840,000 Class A, 160,000 Class B) |
| | | | 40 | | | | | | | — | | |
Additional paid-in capital
|
| | | | 674,333 | | | | | | | 83 | | |
Accumulated deficit
|
| | | | (38,714) | | | | | | | (2,761,499) | | |
Accumulated other comprehensive income (loss)
|
| | | | 168 | | | | | | | (466) | | |
Total shareholders’ equity (deficit)
|
| | | | 635,827 | | | | | | | (2,761,744) | | |
Total liabilities and shareholders’ equity (deficit)
|
| | | $ | 1,487,439 | | | | | | $ | 1,986,265 | | |
| | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | |
Total revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 386,010 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Cost of revenues
|
| | | | 15,882 | | | | | | | 52,160 | | | | | | 71,816 | | |
Content and software development
|
| | | | 10,919 | | | | | | | 38,986 | | | | | | 49,977 | | |
Selling and marketing
|
| | | | 18,193 | | | | | | | 75,028 | | | | | | 99,444 | | |
General and administrative
|
| | | | 10,075 | | | | | | | 37,455 | | | | | | 52,031 | | |
Recapitalization and transaction-related costs
|
| | | | 8,225 | | | | | | | 32,099 | | | | | | 6,009 | | |
Amortization of intangible assets
|
| | | | 15,890 | | | | | | | 34,378 | | | | | | 75,076 | | |
Impairment of goodwill and intangible assets
|
| | | | — | | | | | | | 332,376 | | | | | | 438,659 | | |
Restructuring
|
| | | | 80 | | | | | | | 1,179 | | | | | | 1,395 | | |
Total operating expenses
|
| | | | 79,264 | | | | | | | 603,661 | | | | | | 794,407 | | |
Operating loss
|
| | | | (42,291) | | | | | | | (329,810) | | | | | | (408,397) | | |
Other income (expense), net
|
| | | | 3,617 | | | | | | | 1,273 | | | | | | (694) | | |
Loss on derivative instruments
|
| | | | — | | | | | | | (5) | | | | | | (4,056) | | |
Interest income
|
| | | | 9 | | | | | | | 105 | | | | | | 227 | | |
Interest expense, net
|
| | | | (7,919) | | | | | | | (168,341) | | | | | | (320,200) | | |
Reorganization items, net
|
| | | | — | | | | | | | 3,329,245 | | | | | | — | | |
(Loss) income before (benefit) provision for income
taxes |
| | | | (46,584) | | | | | | | 2,832,467 | | | | | | (733,120) | | |
(Benefit) provision for income taxes
|
| | | | (7,870) | | | | | | | 68,455 | | | | | | 7,897 | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | |
Net loss per share class (Successor only) | | | | | | | | | | | | | | | | | | | | |
Net loss for Class A
|
| | | $ | (37,165) | | | | | | | * | | | | | | * | | |
Loss on modifications of terms of participation rights held by other shareholders and warrants
|
| | | | (5,900) | | | | | | | * | | | | | | * | | |
Net loss attributable to Class A
|
| | | $ | (43,065) | | | | | | | * | | | | | | * | | |
Net loss for Class B
|
| | | $ | (1,549) | | | | | | | * | | | | | | * | | |
Gain on modifications of terms of participation rights held by other shareholders and warrants
|
| | | | 5,900 | | | | | | | * | | | | | | * | | |
Net income attributable to Class B
|
| | | $ | 4,351 | | | | | | | * | | | | | | * | | |
(Losses) income per share: | | | | | | | | | | | | | | | | | | | | |
Ordinary – Basic and Diluted (Predecessor)
|
| | | | * | | | | | | $ | 27,640.12 | | | | | $ | (7,410.17) | | |
Class A – Basic and Diluted (Successor)
|
| | | $ | (11.21) | | | | | | | * | | | | | | * | | |
Class B – Basic and Diluted (Successor)
|
| | | $ | 27.19 | | | | | | | * | | | | | | * | | |
Weighted average common share outstanding: | | | | | | | | | | | | | | | | | | | | |
Ordinary – Basic and Diluted (Predecessor)
|
| | | | * | | | | | | | 100 | | | | | | 100 | | |
Class A – Basic and Diluted
|
| | | | 3,840 | | | | | | | * | | | | | | * | | |
Class B – Basic and Diluted
|
| | | | 160 | | | | | | | * | | | | | | * | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |||||||||
Comprehensive (loss) income: | | | | | | | | | | | | | | | | | | | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | |
Other comprehensive income (loss) – Foreign currency adjustment, net of tax
|
| | | | 168 | | | | | | | (2,268) | | | | | | 611 | | |
Comprehensive (loss) income
|
| | | $ | (38,546) | | | | | | $ | 2,761,744 | | | | | $ | (740,406) | | |
| | |
Ordinary Shares
|
| |
Additional
Paid-In Capital |
| |
Loans
made to related parties |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive (Loss) Income |
| |
Total
Shareholders’ Deficit |
| ||||||||||||||||||||||||
| | |
Number of
Shares |
| |
Par
Value |
| ||||||||||||||||||||||||||||||||||||
Balance January 31, 2019 (Predecessor)
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | — | | | | | $ | (5,367) | | | | | $ | (1,910,846) | | | | | $ | (1,250) | | | | | $ | (1,917,325) | | |
Reserve on loans made to related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,367 | | | | | | — | | | | | | — | | | | | | 5,367 | | |
Shared-based compensation
|
| | | | — | | | | | | — | | | | | | 83 | | | | | | — | | | | | | — | | | | | | — | | | | | | 83 | | |
Cumulative effect of accounting changes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,448) | | | | | | — | | | | | | (1,448) | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 611 | | | | | | 611 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (741,017) | | | | | | — | | | | | | (741,017) | | |
Balance October 31, 2019 (Predecessor)
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | 83 | | | | | $ | — | | | | | $ | (2,653,311) | | | | | $ | (639) | | | | | $ | (2,653,729) | | |
|
| | |
Ordinary Shares
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive (Loss) Income |
| |
Total
Shareholders’ (Deficit) Equity |
| |||||||||||||||||||||
| | |
Number of
Shares |
| |
Par
Value |
| ||||||||||||||||||||||||||||||
Balance January 31, 2020 (Predecessor)
|
| | | | 100,100 | | | | | $ | 138 | | | | | $ | 83 | | | | | $ | (2,761,499) | | | | | $ | (466) | | | | | $ | (2,761,744) | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,268) | | | | | | (2,268) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,764,012 | | | | | | — | | | | | | 2,764,012 | | |
Cancellation of Predecessor equity
|
| | | | (100,100) | | | | | | (138) | | | | | | (83) | | | | | | 221 | | | | | | — | | | | | | — | | |
Elimination of Predecessor accumulated other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (2,734) | | | | | | 2,734 | | | | | | — | | |
Issuance of Successor shares
|
| | | | 4,000,000 | | | | | | 40 | | | | | | 666,933 | | | | | | — | | | | | | — | | | | | | 666,973 | | |
Balance August 28, 2020 (Successor)
|
| | | | 4,000,000 | | | | | $ | 40 | | | | | $ | 666,933 | | | | | $ | — | | | | | $ | — | | | | | $ | 666,973 | | |
Impact of Warrant modification
|
| | | | — | | | | | | — | | | | | | 7,400 | | | | | | — | | | | | | — | | | | | | 7,400 | | |
Translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 168 | | | | | | 168 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (38,714) | | | | | | — | | | | | | (38,714) | | |
Balance October 31, 2020 (Successor)
|
| | | | 4,000,000 | | | | | $ | 40 | | | | | $ | 674,333 | | | | | $ | (38,714) | | | | | $ | 168 | | | | | $ | 635,827 | | |
|
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
| | | | | | | | | | | | | | | | | | | |
Share-based compensation
|
| | | | — | | | | | | | — | | | | | | 83 | | |
Depreciation
|
| | | | 1,509 | | | | | | | 5,864 | | | | | | 7,546 | | |
Amortization of intangible assets
|
| | | | 15,890 | | | | | | | 34,378 | | | | | | 75,076 | | |
Change in bad debt reserve
|
| | | | 186 | | | | | | | 24 | | | | | | (193) | | |
(Benefit) provision for income taxes – non-cash
|
| | | | (8,214) | | | | | | | 66,234 | | | | | | 5,287 | | |
Non-cash interest expense
|
| | | | 143 | | | | | | | 2,407 | | | | | | 4,269 | | |
Impairment of goodwill and intangible assets
|
| | | | — | | | | | | | 332,376 | | | | | | 438,659 | | |
Non-cash reorganization items, net
|
| | | | — | | | | | | | (3,353,326) | | | | | | — | | |
Impairment of note receivable from related parties
|
| | | | — | | | | | | | — | | | | | | 5,367 | | |
Fair value adjustment on warrants
|
| | | | (2,900) | | | | | | | — | | | | | | — | | |
Unrealized loss on derivative instruments
|
| | | | 1 | | | | | | | 5 | | | | | | 4,056 | | |
Right-of-use assets
|
| | | | 1,245 | | | | | | | 1,594 | | | | | | — | | |
Changes in current assets and liabilities:
|
| | | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (24,396) | | | | | | | 116,478 | | | | | | 101,646 | | |
Prepaid expenses and other assets
|
| | | | (4,017) | | | | | | | 66 | | | | | | 6,883 | | |
Accounts payable
|
| | | | 3,776 | | | | | | | (7,909) | | | | | | (8,017) | | |
Accrued expenses, including long-term
|
| | | | 11,887 | | | | | | | 145,811 | | | | | | 177,539 | | |
Lease liabilities
|
| | | | (1,510) | | | | | | | (2,332) | | | | | | — | | |
Deferred revenue
|
| | | | 47,987 | | | | | | | (101,765) | | | | | | (115,110) | | |
Net cash provided by (used in) operating activities
|
| | | | 2,873 | | | | | | | 3,917 | | | | | | (37,926) | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (1,340) | | | | | | | (3,105) | | | | | | (8,185) | | |
Internal use software development costs
|
| | | | (908) | | | | | | | (3,819) | | | | | | (5,897) | | |
Net cash used in investing activities
|
| | | | (2,248) | | | | | | | (6,924) | | | | | | (14,082) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | |
Borrowings under DIP Facility
|
| | | | — | | | | | | | 60,000 | | | | | | — | | |
Borrowings under Exit Facility
|
| | | | — | | | | | | | 50,000 | | | | | | — | | |
Debt issuance costs associated with DIP and Exit Facilities
|
| | | | — | | | | | | | (19,524) | | | | | | — | | |
Principal repayments of capital lease obligations
|
| | | | (162) | | | | | | | (532) | | | | | | (555) | | |
Proceeds from accounts receivable facility, net of principal payments and issuance costs
|
| | | | (28,909) | | | | | | | (35,787) | | | | | | 2,330 | | |
Borrowings under revolving line of credit, net of
repayments |
| | | | — | | | | | | | 19,500 | | | | | | 50,400 | | |
Principal payments on First and Second Lien Term Loans
|
| | | | — | | | | | | | — | | | | | | (4,980) | | |
Net cash (used in) provided by financing activities
|
| | | | (29,071) | | | | | | | 73,657 | | | | | | 47,195 | | |
Effect of exchange rate changes on cash and cash
equivalents |
| | | | 699 | | | | | | | (2,139) | | | | | | (93) | | |
Net (decrease) increase in cash, cash equivalents and restricted cash
|
| | | | (27,747) | | | | | | | 68,511 | | | | | | (4,906) | | |
Cash, cash equivalents and restricted cash, beginning of
period |
| | | | 102,315 | | | | | | | 33,804 | | | | | | 30,468 | | |
Cash, cash equivalents and restricted cash, end of period
|
| | | $ | 74,568 | | | | | | $ | 102,315 | | | | | $ | 25,562 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 70,836 | | | | | | $ | 92,009 | | | | | $ | 14,293 | | |
Restricted cash
|
| | | | 3,732 | | | | | | | 10,306 | | | | | | 11,269 | | |
Cash, cash equivalents and restricted cash, end of period
|
| | | $ | 74,568 | | | | | | $ | 102,315 | | | | | $ | 25,562 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months
Ended October 31, 2019 |
| |||||||||
Supplemental disclosure of cash flow information and non-cash investing activities:
|
| | | | | | | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | — | | | | | | $ | — | | | | | $ | 131,147 | | |
Cash paid for income taxes, net of refunds
|
| | | $ | 560 | | | | | | $ | 913 | | | | | $ | (2,348) | | |
Unpaid capital expenditures
|
| | | $ | 140 | | | | | | $ | 1,039 | | | | | $ | 1,236 | | |
Note issued to parent entity for paid in kind interest
|
| | | $ | — | | | | | | $ | 160,000 | | | | | $ | — | | |
Lease liabilities arising from obtaining right-of-use assets and tenant improvements
|
| | | $ | — | | | | | | $ | 19,415 | | | | | $ | — | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months Ended
October 31, 2019 |
| |||||||||
Cost of revenues
|
| | | $ | — | | | | | | $ | — | | | | | $ | — | | |
Content and software development
|
| | | | — | | | | | | | — | | | | | | 6 | | |
Selling and marketing
|
| | | | — | | | | | | | — | | | | | | 77 | | |
General and administrative
|
| | | | — | | | | | | | — | | | | | | — | | |
| | |
As of February 1, 2020
|
| |||||||||||||||
| | |
As Previously
Reported |
| |
Impact of Adoption of
Topic 842 |
| |
As Adjusted
|
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Right of use assets
|
| | | $ | — | | | | | $ | 19,415 | | | | | $ | 19,415 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Accrued expenses and other current liabilities
|
| | | $ | 29,267 | | | | | $ | (2,116) | | | | | $ | 27,151 | | |
Lease liabilities
|
| | | | — | | | | | | 3,500 | | | | | | 3,500 | | |
Long-term lease liabilities
|
| | | | — | | | | | | 18,031 | | | | | | 18,031 | | |
|
Enterprise value(1)
|
| | | $ | 1,150,000 | | |
|
Plus: Cash
|
| | | | 92,009 | | |
|
Less: Borrowings under accounts receivable facility
|
| | | | (48,886) | | |
|
Less: Fair value of debt
|
| | | | (514,950) | | |
|
Less: Fair value of warrants
|
| | | | (11,200) | | |
|
Implied value of Successor Company common stock
|
| | | $ | 666,973 | | |
|
Shares issued upon emergence (Class A and B common stock)
|
| | | | 4,000 | | |
|
Per share
|
| | | $ | 167 | | |
|
Enterprise value(1)
|
| | | $ | 1,150,000 | | |
| Plus: | | | | | | | |
|
Cash
|
| | | | 92,009 | | |
|
Current liabilities (excluding AR facility and Current maturity of long-term
debt) |
| | | | 134,257 | | |
|
Deferred tax liabilities
|
| | | | 103,930 | | |
|
Other long-term liabilities
|
| | | | 7,140 | | |
|
Non-current lease obligations
|
| | | | 16,399 | | |
|
Reorganization value
|
| | | $ | 1,503,735 | | |
| | |
Predecessor
|
| |
Reorganization
Adjustments |
| |
Fresh-Start
Adjustments |
| |
Successor
|
| ||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 42,341 | | | | | $ | 49,668(1) | | | | | $ | — | | | | | $ | 92,009 | | |
Restricted cash
|
| | | | 35,306 | | | | | | (25,000)(1) | | | | | | — | | | | | | 10,306 | | |
Accounts receivable
|
| | | | 73,607 | | | | | | 1,700(2) | | | | | | (990)(10) | | | | | | 74,317 | | |
Prepaid expense and other current assets
|
| | | | 39,317 | | | | | | (300)(2) | | | | | | (10,573)(11) | | | | | | 28,444 | | |
Total current assets
|
| | | | 190,571 | | | | | | 26,068 | | | | | | (11,563) | | | | | | 205,076 | | |
Property and equipment, net
|
| | | | 15,523 | | | | | | 500(2) | | | | | | — | | | | | | 16,023 | | |
Goodwill
|
| | | | 1,070,674 | | | | | | 5,100(2) | | | | | | (580,639)(12) | | | | | | 495,135 | | |
Intangible asset, net
|
| | | | 249,962 | | | | | | — | | | | | | 516,124(13) | | | | | | 766,086 | | |
Right-of-use assets
|
| | | | 17,454 | | | | | | — | | | | | | 367(14) | | | | | | 17,821 | | |
Other assets
|
| | | | 17,313 | | | | | | (3,500)(2) | | | | | | (10,219)(11) | | | | | | 3,594 | | |
Total assets
|
| | | $ | 1,561,497 | | | | | $ | 28,168 | | | | | $ | (85,930) | | | | | $ | 1,503,735 | | |
Liabilities and shareholders’ (deficit) equity
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Current maturity of long-term debt
|
| | | $ | 60,000 | | | | | | (57,400)(3) | | | | | | — | | | | | | 2,600 | | |
Borrowings under accounts receivable facility
|
| | | | 48,886 | | | | | | — | | | | | | — | | | | | | 48,886 | | |
Accounts payable
|
| | | | 7,851 | | | | | | 300(2) | | | | | | — | | | | | | 8,151 | | |
Accrued compensation
|
| | | | 23,587 | | | | | | 1,400(2) | | | | | | — | | | | | | 24,987 | | |
Accrued expenses and other liabilities
|
| | | | 12,105 | | | | | | 500(2) | | | | | | — | | | | | | 12,605 | | |
Lease liabilities
|
| | | | 1,699 | | | | | | 3,245(6) | | | | | | (175)(14) | | | | | | 4,769 | | |
Deferred revenue
|
| | | | 196,469 | | | | | | 2,400(2) | | | | | | (115,124)(15) | | | | | | 83,745 | | |
Total current liabilities
|
| | | | 350,597 | | | | | | (49,555) | | | | | | (115,299) | | | | | | 185,743 | | |
Long-term debt
|
| | | | — | | | | | | 517,400(4) | | | | | | (5,050)(17) | | | | | | 512,350 | | |
Long term lease liabilities
|
| | | | 3,732 | | | | | | 12,442(6) | | | | | | 225(14) | | | | | | 16,399 | | |
Warrants
|
| | | | — | | | | | | 11,200(6)(8) | | | | | | — | | | | | | 11,200 | | |
Deferred tax liabilities
|
| | | | — | | | | | | 30,484(5)(6) | | | | | | 73,446(16) | | | | | | 103,930 | | |
Deferred revenue – non-current
|
| | | | 1,783 | | | | | | — | | | | | | (1,128)(15) | | | | | | 655 | | |
Other long-term liabilities
|
| | | | 2,289 | | | | | | 3,796(6) | | | | | | 400(17) | | | | | | 6,485 | | |
Total long-term liabilities
|
| | | | 7,804 | | | | | | 575,322 | | | | | | 67,893 | | | | | | 651,019 | | |
Liabilities subject to compromise
|
| | | | 4,472,954 | | | | | | (4,472,954)(6) | | | | | | — | | | | | | — | | |
Total liabilities
|
| | | | 4,831,355 | | | | | | (3,947,187) | | | | | | (47,406) | | | | | | 836,762 | | |
Shareholders’ (deficit) equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Ordinary shares (Predecessor)
|
| | | | 138 | | | | | | (138)(7) | | | | | | — | | | | | | — | | |
Additional paid in capital (Predecessor)
|
| | | | 83 | | | | | | (83)(7) | | | | | | — | | | | | | — | | |
Ordinary shares (Successor)
|
| | | | — | | | | | | 40(6)(8) | | | | | | — | | | | | | 40 | | |
Additional paid in capital (Successor)
|
| | | | — | | | | | | 666,933(6)(8) | | | | | | — | | | | | | 666,933 | | |
(Accumulated deficit) retained earnings
|
| | | | (3,267,346) | | | | | | 3,308,603(9) | | | | | | (41,257)(17) | | | | | | — | | |
Accumulated other comprehensive loss
|
| | | | (2,733) | | | | | | — | | | | | | 2,733(18) | | | | | | — | | |
Total shareholder (deficit) equity
|
| | | | (3,269,858) | | | | | | 3,975,355 | | | | | | (38,524) | | | | | | 666,973 | | |
Total liabilities and shareholders’ (deficit) equity
|
| | | $ | 1,561,497 | | | | | $ | 28,168 | | | | | $ | (85,930) | | | | | $ | 1,503,735 | | |
| Sources: | | | | | | | |
|
Release of restricted cash(a)
|
| | | $ | 25,000 | | |
|
Additional funding from First Out Term Loan
|
| | | | 50,000 | | |
|
Reconsolidation of Canadian subsidiary
|
| | | | 1,100 | | |
|
Total sources of cash
|
| | | | 76,100 | | |
| Uses: | | | | | | | |
|
Exit Facility and DIP Facility rollover financing costs paid upon Effective Date
|
| | | | (5,032) | | |
|
Professional success fees paid upon Effective Date(b)
|
| | | | (21,400) | | |
|
Total uses of cash
|
| | | | (26,432) | | |
|
Net increase in cash
|
| | | $ | 49,668 | | |
(in thousands)
|
| | | | | | |
Term Loan Facility: | | | | | | | |
Senior Secured First Out Term Loan
|
| | | $ | 110,000 | | |
Senior Secured Second Out Term Loan
|
| | | | 410,000 | | |
Total Debt – Exit facility(a)
|
| | | $ | 520,000 | | |
Less: | | | | | | | |
Current portion of Long-term debt
|
| | | | (2,600) | | |
Long-term debt, net of current portion
|
| | | $ | 517,400 | | |
|
Liabilities subject to compromise pre-emergence
|
| | | $ | 4,472,954 | | |
| Reinstated on the Effective Date: | | | | | | | |
|
Lease liabilities (current and non-current)
|
| | | | (15,687) | | |
|
Deferred tax liabilities
|
| | | | (26,107) | | |
|
Other long-term liabilities
|
| | | | (3,796) | | |
|
Total liabilities reinstated
|
| | | $ | (45,590) | | |
| Less amounts settled per the Plan of Reorganization | | | | | | | |
|
Issuance of new debt
|
| | | | (410,000) | | |
|
Issuance of warrants
|
| | | | (11,200) | | |
|
Equity issued at emergence to creditors in settlement of Liabilities Subject to Compromise
|
| | | | (666,973) | | |
|
Total amounts settled
|
| | | | (1,088,173) | | |
|
Gain on settlement of Liabilities Subject to Compromise
|
| | | $ | 3,339,191 | | |
|
Gain on settlement of Liabilities subject to compromise
|
| | | $ | 3,339,191 | | |
|
Provision for income taxes
|
| | | | (4,377) | | |
|
Professional success fees paid upon Effective Date
|
| | | | (21,400) | | |
|
Exit Facility and DIP Facility rollover financing costs paid upon Effective Date
|
| | | | (5,032) | | |
|
Cancellation of predecessor shares and additional paid in capital
|
| | | | 221 | | |
|
Net impact on Accumulated deficit
|
| | | $ | 3,308,603 | | |
(in thousands)
|
| | | | | | |
Reorganization value of Successor company
|
| | | $ | 1,503,735 | | |
Less: Fair value of Successor company assets
|
| | | | (1,008,600) | | |
Reorganization value of Successor company in excess of asset fair
value – Goodwill |
| | | $ | 495,135 | | |
| | |
Estimated
fair value |
| |
Estimated
useful life |
| |||
Developed software/ courseware
|
| | | $ | 261,600 | | | |
3-5 years
|
|
Customer contracts/ relationships
|
| | | | 279,500 | | | |
12.4 years
|
|
Trademarks and trade names
|
| | | | 6,300 | | | |
9.4 years
|
|
Backlog
|
| | | | 90,200 | | | |
4.4 years
|
|
Skillsoft trademark
|
| | | | 91,500 | | | |
Indefinite
|
|
Publishing rights
|
| | | | 35,200 | | | |
5 years
|
|
Capitalized software
|
| | | | 1,786 | | | |
5 years
|
|
Total intangible asset upon emergence
|
| | | | 766,086 | | | | | |
Elimination of historical acquired intangible assets
|
| | | | (249,962) | | | |
|
|
Fresh-start adjustment to acquired intangibles assets
|
| | | $ | 516,124 | | | |
|
|
|
Fresh-start adjustment to accounts receivable, net
|
| | | $ | (990) | | |
|
Fresh-start adjustment to prepaid assets and other assets (including long-term)
|
| | | | (20,792) | | |
|
Fresh-start adjustment to goodwill
|
| | | | (580,639) | | |
|
Fresh-start adjustment to intangible assets, net
|
| | | | 516,124 | | |
|
Fresh-start adjustment to operating lease right-of-use assets and liabilities, net
|
| | | | 317 | | |
|
Fresh-start adjustment to deferred revenue (current and non-current)
|
| | | | 116,252 | | |
|
Fair value adjustment to debt
|
| | | | 5,050 | | |
|
Fair value adjustment to other long-term liabilities
|
| | | | (400) | | |
|
Total fresh-start adjustments impacting reorganization items, net
|
| | | | 34,922 | | |
|
Elimination of accumulated other comprehensive loss
|
| | | | (2,733) | | |
|
Tax impact of fresh-start adjustments
|
| | | | (73,446) | | |
|
Net impact on accumulated deficit
|
| | | $ | (41,257) | | |
| | |
Predecessor
|
| |||
| | |
February 1, 2020
through August 27, 2020 |
| |||
Gain on settlement of Liabilities subject to compromise
|
| | | | (3,339,191) | | |
Impact of fresh-start adjustments
|
| | | | (34,922) | | |
Exit Facility and DIP Facility rollover financing costs paid upon Effective Date
|
| | | | 5,032 | | |
Write-off of pre-petition debt and DIP issuance costs
|
| | | | 9,461 | | |
Professional success fees paid upon Effective Date
|
| | | | 21,399 | | |
Professional fees and other bankruptcy related costs
|
| | | | 13,076 | | |
Gain on Deconsolidation of Canadian subsidiary
|
| | | | (4,100) | | |
Reorganization items, net
|
| | | $ | (3,329,245) | | |
|
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| ||||||
Cash payment for reorganization items, net
|
| | | $ | 784 | | | | | | $ | 42,916 | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||||||||||||||||||||||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||||||||||||||||||||||||||
| | |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| | |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| ||||||||||||||||||
Developed software/ courseware
|
| | | $ | 261,600 | | | | | $ | 9,654 | | | | | $ | 251,946 | | | | | | $ | 130,700 | | | | | $ | 119,743 | | | | | $ | 10,957 | | |
Customer contracts/ relationships
|
| | | | 279,500 | | | | | | 1,451 | | | | | | 278,049 | | | | | | | 670,800 | | | | | | 466,972 | | | | | | 203,828 | | |
Trademarks and trade names
|
| | | | 6,300 | | | | | | 182 | | | | | | 6,118 | | | | | | | 45,300 | | | | | | 27,648 | | | | | | 17,652 | | |
Publishing rights
|
| | | | 35,200 | | | | | | 1,173 | | | | | | 34,027 | | | | | | | — | | | | | | — | | | | | | — | | |
Backlog
|
| | | | 90,200 | | | | | | 3,257 | | | | | | 86,943 | | | | | | | — | | | | | | — | | | | | | — | | |
Skillsoft trademark
|
| | | | 91,500 | | | | | | — | | | | | | 91,500 | | | | | | | 186,000 | | | | | | — | | | | | | 186,000 | | |
Capitalized software
|
| | | | 2,690 | | | | | | 170 | | | | | | 2,520 | | | | | | | 26,468 | | | | | | 9,920 | | | | | | 16,548 | | |
Total
|
| | | $ | 766,990 | | | | | $ | 15,887 | | | | | $ | 751,103 | | | | | | $ | 1,059,268 | | | | | $ | 624,283 | | | | | $ | 434,985 | | |
Fiscal Year
|
| |
Amortization
Expense |
| |||
Remainder of 2021
|
| | | $ | 23,904 | | |
2022
|
| | | | 139,402 | | |
2023
|
| | | | 119,582 | | |
2024
|
| | | | 105,451 | | |
2025
|
| | | | 93,612 | | |
Thereafter
|
| | | | 177,652 | | |
Total
|
| | | $ | 659,603 | | |
Description
|
| |
Skillsoft
|
| |
SumTotal
|
| |
Consolidated
|
| |||||||||
Gross carrying amount of Goodwill, January 31, 2019
|
| | | $ | 1,434,047 | | | | | $ | 260,266 | | | | | $ | 1,694,313 | | |
Foreign currency translation adjustment
|
| | | | 96 | | | | | | 1 | | | | | | 97 | | |
Impairment of goodwill
|
| | | | (321,340) | | | | | | (117,319) | | | | | | (438,659) | | |
Goodwill, net October 31, 2019
|
| | | $ | 1,112,803 | | | | | $ | 142,948 | | | | | $ | 1,255,751 | | |
Description
|
| |
Skillsoft
|
| |
SumTotal
|
| |
Consolidated
|
| |||||||||
Goodwill, net January 31, 2020 (Predecessor)
|
| | | $ | 1,112,820 | | | | | $ | 141,002 | | | | | $ | 1,253,822 | | |
Foreign currency translation adjustment
|
| | | | (158) | | | | | | (4) | | | | | | (162) | | |
Impairment of goodwill
|
| | |
|
(107,934)
|
| | | | | (69,952) | | | | | | (177,886) | | |
Canada deconsolidation
|
| | | | (5,100) | | | | | | — | | | | | | (5,100) | | |
Impact of Fresh-Start reporting
|
| | | | (507,843) | | | | | | (67,696) | | | | | | (575,539) | | |
Goodwill, net August 27, 2020 (Predecessor)
|
| | | $ | 491,785 | | | | | $ | 3,350 | | | | | $ | 495,135 | | |
Goodwill, net August 28, 2020 (Successor)
|
| | | $ | 491,785 | | | | | $ | 3,350 | | | | | $ | 495,135 | | |
Foreign currency translation adjustment
|
| | | | 63 | | | | | | — | | | | | | 63 | | |
Goodwill, net October 31, 2020 (Successor)
|
| | | $ | 491,848 | | | | | $ | 3,350 | | | | | $ | 495,198 | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||
Deferred commission costs – non-current
|
| | | $ | 2,100 | | | | | | $ | 11,692 | | |
Other
|
| | | | 3,572 | | | | | | | 2,629 | | |
Non-current refundable income tax
|
| | | | — | | | | | | | 1,979 | | |
Total other assets
|
| | | $ | 5,672 | | | | | | $ | 16,300 | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||
Professional fees
|
| | | $ | 7,347 | | | | | | $ | 12,947 | | |
Accrued sales tax/VAT
|
| | | | 2,272 | | | | | | | 5,824 | | |
Accrued royalties
|
| | | | 1,588 | | | | | | | 1,869 | | |
Accrued tax
|
| | | | 1,025 | | | | | | | 1,288 | | |
Accrued interest
|
| | | | 8,103 | | | | | | | 274 | | |
Other accrued liabilities
|
| | | | 4,666 | | | | | | | 7,065 | | |
Total accrued expenses
|
| | | $ | 25,001 | | | | | | $ | 29,267 | | |
| | |
Employee Severance
and Related Costs |
| |
Contractual
Obligations |
| |
Total
|
| |||||||||
Restructuring accrual as of January 31, 2020 (Predecessor)
|
| | | | 761 | | | | | | 276 | | | | | | 1,037 | | |
Restructuring charges incurred
|
| | | | 1,032 | | | | | | 147 | | | | | | 1,179 | | |
Payments made
|
| | | | (559) | | | | | | (154) | | | | | | (713) | | |
Foreign currency translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | |
Restructuring accrual as of August 27, 2020
(Predecessor) |
| | | $ | 1,234 | | | | | $ | 269 | | | | | $ | 1,503 | | |
Restructuring charges incurred
|
| | | | 80 | | | | | | — | | | | | | 80 | | |
Payments made
|
| | | | (80) | | | | | | (34) | | | | | | (114) | | |
Foreign currency translation adjustment
|
| | | | — | | | | | | — | | | | | | — | | |
Restructuring accrual as of October 31, 2020
(Successor) |
| | | $ | 1,234 | | | | | $ | 235 | | | | | $ | 1,469 | | |
As of October 31, 2020 (in thousands):
|
| |
Operating
Leases |
| |
Finance
Leases |
| ||||||
2021 (excluding nine months ended October 31, 2020)
|
| | | $ | 1,277 | | | | | $ | 303 | | |
2022
|
| | | | 5,219 | | | | | | 1,112 | | |
2023
|
| | | | 4,427 | | | | | | — | | |
2024
|
| | | | 3,880 | | | | | | — | | |
2025
|
| | | | 2,959 | | | | | | — | | |
Thereafter
|
| | | | 7,194 | | | | | | — | | |
Total future minimum lease payments
|
| | | $ | 24,956 | | | | | $ | 1,415 | | |
Less effects of discounting
|
| | | | (6,572) | | | | | | (141) | | |
Total lease liabilities
|
| | | $ | 18,384 | | | | | $ | 1,274 | | |
Reported as of October 31, 2020
|
| | | | | | | | | | | | |
Lease liabilities
|
| | | $ | 3,598 | | | | | $ | 1,077 | | |
Long term lease liabilities
|
| | | | 14,786 | | | | | | 197 | | |
Total lease liabilities
|
| | | $ | 18,384 | | | | | $ | 1,274 | | |
As of January 31, 2020:
|
| |
Operating
Leases |
| |
Finance
Leases |
| ||||||
2021
|
| | | $ | 4,892 | | | | | $ | 1,427 | | |
2022
|
| | | | 3,761 | | | | | | 1,679 | | |
2023
|
| | | | 3,220 | | | | | | — | | |
2024
|
| | | | 2,607 | | | | | | — | | |
2025
|
| | | | 1,826 | | | | | | — | | |
Thereafter
|
| | | | 6,906 | | | | | | — | | |
Total
|
| | | $ | 23,212 | | | | | $ | 3,106 | | |
Fiscal year ended January 31:
|
| | | | | | |
2021
|
| | | $ | — | | |
2022
|
| | | | 5,200 | | |
2023
|
| | | | 10,400 | | |
2024
|
| | | | 10,400 | | |
2025
|
| | | | 112,700 | | |
2026
|
| | | | 381,300 | | |
Total payments
|
| | | | 520,000 | | |
Less: Current portion
|
| | | | (3,900) | | |
Less: Fresh-Start Reporting Fair Value Adjustment
|
| | | | (5,050) | | |
Long-term portion
|
| | | $ | 511,050 | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||
Uncertain tax positions; including interest and penalties – long-term
|
| | | $ | 6,326 | | | | | | $ | 6,025 | | |
Warrants
|
| | | | 900 | | | | | | | — | | |
Other
|
| | | | 192 | | | | | | | 1,547 | | |
Total other long-term liabilities
|
| | | $ | 7,418 | | | | | | $ | 7,572 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine months ended
October 31, 2019 |
| |||||||||
SaaS and subscription services
|
| | | $ | 30,433 | | | | | | $ | 234,494 | | | | | $ | 330,189 | | |
Software maintenance
|
| | | | 2,194 | | | | | | | 12,201 | | | | | | 18,420 | | |
Professional services
|
| | | | 3,775 | | | | | | | 24,624 | | | | | | 33,816 | | |
Perpetual software licenses
|
| | | | 563 | | | | | | | 2,511 | | | | | | 1,042 | | |
Hardware and other
|
| | | | 8 | | | | | | | 21 | | | | | | 2,543 | | |
Total net revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 386,010 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine months ended
October 31, 2019 |
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 28,858 | | | | | | $ | 217,783 | | | | | $ | 305,424 | | |
Other Americas
|
| | | | 1,566 | | | | | | | 8,899 | | | | | | 16,417 | | |
Europe, Middle East and Africa
|
| | | | 4,559 | | | | | | | 32,788 | | | | | | 45,508 | | |
Asia-Pacific
|
| | | | 1,990 | | | | | | | 14,381 | | | | | | 18,661 | | |
Total net revenues
|
| | | $ | 36,973 | | | | | | $ | 273,851 | | | | | $ | 386,010 | | |
|
Deferred revenue at February 1, 2020 (includes current and non-current components)
|
| | | $ | 311,170 | | |
|
Billings deferred
|
| | | | 163,333 | | |
|
Recognition of prior deferred revenue
|
| | | | (273,851) | | |
|
Fresh start reporting, fair value adjustment
|
| | | | (116,252) | | |
|
Deferred revenue at August 27, 2020 (Predecessor)
|
| | | $ | 84,400 | | |
|
Deferred revenue at August 28, 2020 (Successor)
|
| | | | 84,400 | | |
|
Billings deferred
|
| | | | 83,397 | | |
|
Recognition of prior deferred revenue
|
| | | | (36,973) | | |
|
Deferred revenue at October 31, 2020 (Successor)
|
| | | $ | 130,824 | | |
|
|
Deferred contract acquisition costs at February 1, 2020
|
| | | $ | 22,887 | | |
|
Deferred contract costs
|
| | | | 11,965 | | |
|
Recognition of deferred contract acquisition costs
|
| | | | (14,060) | | |
|
Fresh start reporting, fair value adjustment
|
| | | | (20,792) | | |
|
Deferred contract acquisition costs at August 27, 2020 (Predecessor)
|
| | | $ | — | | |
|
Deferred contract acquisition costs at August 28, 2020 (Successor)
|
| | | | — | | |
|
Deferred contract costs
|
| | | | 6,106 | | |
|
Recognition of deferred contract acquisition costs
|
| | | | (2,718) | | |
|
Deferred contract acquisition costs at October 31, 2020 (Successor)
|
| | | $ | 3,388 | | |
| | |
Total
|
| |
(Level 3)
|
| ||||||
Warrants to purchase Company common stock
|
| | | $ | 900 | | | | | $ | 900 | | |
Total assets recorded at fair value
|
| | | $ | 900 | | | | | | 900 | | |
| | |
Successor
|
| |||
| | |
August 28, 2020
through October 31, 2020 |
| |||
Balance as of August 28, 2020
|
| | | $ | 11,200 | | |
Impact of warrant modification, recorded in shareholders’ equity
|
| | | | (7,400) | | |
Unrealized gains recognized as other income
|
| | | | (2,900) | | |
Balance as of October 31, 2020
|
| | | $ | 900 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine months ended
October 31, 2019 |
| |||||||||
Skillsoft | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | $ | 23,495 | | | | | | $ | 196,238 | | | | | $ | 271,580 | | |
Operating expenses
|
| | | | 60,969 | | | | | | | 398,178 | | | | | | 552,851 | | |
Operating loss
|
| | | | (37,474) | | | | | | | (201,940) | | | | | | (281,271) | | |
SumTotal | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | | 13,478 | | | | | | | 77,613 | | | | | | 114,430 | | |
Operating expenses
|
| | | | 18,295 | | | | | | | 205,483 | | | | | | 241,556 | | |
Operating loss
|
| | | | (4,817) | | | | | | | (127,870) | | | | | | (127,126) | | |
Consolidated | | | | | | | | | | | | | | | | | | | | |
Revenues
|
| | | | 36,973 | | | | | | | 273,851 | | | | | | 386,010 | | |
Operating expenses
|
| | | | 79,264 | | | | | | | 603,661 | | | | | | 794,407 | | |
Operating loss
|
| | | | (42,291) | | | | | | | (329,810) | | | | | | (408,397) | | |
Total non-operating (expense) income
|
| | | | 3,617 | | | | | | | 1,268 | | | | | | (4,750) | | |
Interest expense, net
|
| | | | (7,910) | | | | | | | (168,236) | | | | | | (319,973) | | |
Reorganization items, net
|
| | | | — | | | | | | | 3,329,245 | | | | | | — | | |
(Provision) benefit for income taxes
|
| | | | 7,870 | | | | | | | (68,455) | | | | | | (7,897) | | |
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||
Skillsoft
|
| | | $ | 1,349,794 | | | | | | $ | 1,655,474 | | |
SumTotal
|
| | | | 137,645 | | | | | | | 330,785 | | |
Corporate
|
| | | | — | | | | | | | 6 | | |
Consolidated
|
| | | $ | 1,487,439 | | | | | | $ | 1,986,265 | | |
| | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| ||||||
| | |
October 31, 2020
|
| | |
January 31, 2020
|
| ||||||
United States
|
| | | $ | 11,434 | | | | | | $ | 13,469 | | |
Ireland
|
| | | | 685 | | | | | | | 897 | | |
Rest of world
|
| | | | 2,762 | | | | | | | 3,536 | | |
Total
|
| | | $ | 14,881 | | | | | | $ | 17,902 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
August 28, 2020
through October 31, 2020 |
| | |
February 1, 2020
through August 27, 2020 |
| |
Nine Months Ended
October 31, 2019 |
| |||||||||
Net (loss) income
|
| | | $ | (38,714) | | | | | | $ | 2,764,012 | | | | | $ | (741,017) | | |
Weighted average common share outstanding:
|
| | | | | | | | | | | | | | | | | | | |
Ordinary – Basic and Diluted (Predecessor)
|
| | | | * | | | | | | | 100 | | | | | | 100 | | |
Class A – Basic and Diluted
|
| | | | 3,840 | | | | | | | * | | | | | | * | | |
Class B – Basic and Diluted
|
| | | | 160 | | | | | | | * | | | | | | * | | |
Net loss per share class (Successor only)
|
| | | | | | | | | | | | | | | | | | | |
Net loss for Class A
|
| | | $ | (37,165) | | | | | | | * | | | | | | * | | |
Loss on modifications of terms of participation rights held by other shareholders and warrants
|
| | | | (5,900) | | | | | | | * | | | | | | * | | |
Net loss attributable to Class A
|
| | | $ | (43,065) | | | | | | | * | | | | | | * | | |
Net loss for Class B
|
| | | $ | (1,549) | | | | | | | * | | | | | | * | | |
Gain on modifications of terms of participation rights held by other shareholders and warrants
|
| | | | 5,900 | | | | | | | * | | | | | | * | | |
Net loss attributable to Class B
|
| | | $ | 4,351 | | | | | | | * | | | | | | * | | |
(Losses) income per share:
|
| | | | | | | | | | | | | | | | | | | |
Ordinary – Basic and Diluted (Predecessor)
|
| | | | * | | | | | | $ | 27,640.12 | | | | | $ | (7,410.17) | | |
Class A – Basic and Diluted (Successor)
|
| | | $ | (11.21) | | | | | | | * | | | | | | * | | |
Class B – Basic and Diluted (Successor)
|
| | | $ | 27.19 | | | | | | | * | | | | | | * | | |
| | |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
Assets | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | |
Cash
|
| | |
$
|
19,836
|
| | | | $ | 9,621 | | |
Accounts receivable, less allowance for uncollectible accounts of $2,109
and $1,898 as of October 2, 2020, and September 27, 2019, respectively |
| | |
|
25,441
|
| | | | | 40,687 | | |
Prepaid expenses and other current assets
|
| | |
|
12,738
|
| | | | | 7,733 | | |
Total Current Assets
|
| | |
|
58,015
|
| | | | | 58,041 | | |
Property and equipment, net
|
| | |
|
7,062
|
| | | | | 11,284 | | |
Goodwill
|
| | |
|
125,614
|
| | | | | 178,866 | | |
Intangible assets, net
|
| | |
|
45,588
|
| | | | | 60,128 | | |
Deferred tax assets
|
| | |
|
871
|
| | | | | 1,116 | | |
Other long-term assets
|
| | |
|
3,808
|
| | | | | 4,809 | | |
Total Assets
|
| | |
$
|
240,958
|
| | | | $ | 314,244 | | |
Liabilities and Stockholder’s Deficit | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | |
$
|
37,549
|
| | | | $ | 33,253 | | |
Term loans – short-term portion, net
|
| | |
|
209,782
|
| | | | | 2,187 | | |
Credit facility
|
| | |
|
35,000
|
| | | | | — | | |
Accrued expenses
|
| | |
|
43,122
|
| | | | | 31,795 | | |
Deferred revenue
|
| | |
|
23,604
|
| | | | | 29,763 | | |
Total Current Liabilities
|
| | |
|
349,057
|
| | | | | 96,998 | | |
Term loans – long-term portion, net
|
| | |
|
—
|
| | | | | 211,616 | | |
Related party loan
|
| | |
|
11,181
|
| | | | | 8,547 | | |
Credit facility
|
| | |
|
—
|
| | | | | 19,598 | | |
Deferred tax liabilities
|
| | |
|
308
|
| | | | | 1,482 | | |
Other long-term liabilities
|
| | |
|
4,005
|
| | | | | 6,198 | | |
Total Liabilities
|
| | |
|
364,551
|
| | | | | 344,439 | | |
Commitments and Contingencies (Note 9) | | | | | | | | | | | | | |
Stockholder’s Deficit | | | | | | | | | | | | | |
Common stock, par value $0.01 per share; 5,000 shares authorized and
2,954 issued and outstanding as of October 2, 2020, and September 27, 2019 |
| | |
|
—
|
| | | | | — | | |
Additional paid-in capital
|
| | |
|
242,375
|
| | | | | 242,375 | | |
Accumulated deficit
|
| | |
|
(366,261)
|
| | | | | (264,903) | | |
Accumulated other comprehensive income (loss)
|
| | |
|
293
|
| | | | | (7,667) | | |
Total Stockholder’s Deficit
|
| | |
|
(123,593)
|
| | | | | (30,195) | | |
Total Liabilities and Stockholder’s Deficit
|
| | |
$
|
240,958
|
| | | | $ | 314,244 | | |
Fiscal Year Ended
|
| |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
Revenue
|
| | |
$
|
208,535
|
| | | | $ | 260,165 | | |
Cost of revenue
|
| | |
|
116,203
|
| | | | | 139,459 | | |
Gross Margin
|
| | |
|
92,332
|
| | | | | 120,706 | | |
Operating Expenses: | | | | | | | | | | | | | |
Sales and marketing
|
| | |
|
44,093
|
| | | | | 54,828 | | |
General and administrative
|
| | |
|
34,204
|
| | | | | 45,118 | | |
Product development
|
| | |
|
3,064
|
| | | | | 5,378 | | |
Intangible assets impairment
|
| | |
|
7,879
|
| | | | | — | | |
Goodwill impairment
|
| | |
|
59,553
|
| | | | | — | | |
Amortization of intangible assets
|
| | |
|
7,623
|
| | | | | 9,100 | | |
Restructuring charges
|
| | |
|
8,220
|
| | | | | 7,564 | | |
Total Operating Expenses
|
| | |
|
164,636
|
| | | | | 121,988 | | |
Loss from Operations
|
| | |
|
(72,304)
|
| | | | | (1,282) | | |
Interest expense
|
| | |
|
(27,455)
|
| | | | | (25,489) | | |
Other (expense) income, net
|
| | |
|
(1,328)
|
| | | | | 500 | | |
Loss before Income Taxes
|
| | |
|
(101,087)
|
| | | | | (26,271) | | |
Income tax expense
|
| | |
|
(271)
|
| | | | | (28) | | |
Net Loss
|
| | |
$
|
(101,358)
|
| | | | $ | (26,299) | | |
Other Comprehensive Income (Loss): | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | |
|
7,960
|
| | | | | (2,817) | | |
Total Comprehensive Loss
|
| | |
$
|
(93,398)
|
| | | | $ | (29,116) | | |
| | |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive (Loss) Income |
| |
Stockholder’s
Deficit |
| |||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balance at September 28, 2018
|
| | | | 2,953 | | | | | $ | — | | | | | $ | 219,862 | | | | | $ | (238,604) | | | | | $ | (4,850) | | | | | $ | (23,592) | | |
Contributions from stockholder
|
| | | | 1 | | | | | | — | | | | | | 22,513 | | | | | | — | | | | | | — | | | | | | 22,513 | | |
Foreign currency translation adjustments
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,817) | | | | | | (2,817) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (26,299) | | | | | | — | | | | | | (26,299) | | |
Balance at September 27, 2019
|
| | | | 2,954 | | | | | | — | | | | | | 242,375 | | | | | | (264,903) | | | | | | (7,667) | | | | | | (30,195) | | |
Foreign currency translation adjustments
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
7,960
|
| | | |
|
7,960
|
| |
Net loss
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
(101,358)
|
| | | |
|
—
|
| | | |
|
(101,358)
|
| |
Balance at October 2, 2020
|
| | | | 2,954 | | | | | $ | — | | | | | $ | 242,375 | | | | | $ | (366,261) | | | | | $ | 293 | | | | | $ | (123,593) | | |
Fiscal Year Ended
|
| |
October 2, 2020
|
| |
September 27, 2019
|
| ||||||
Operating activities | | | | | | | | | | | | | |
Net loss
|
| | |
$
|
(101,358)
|
| | | | $ | (26,299) | | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization of property and equipment
|
| | |
|
6,301
|
| | | | | 9,929 | | |
Intangible assets impairment
|
| | |
|
7,879
|
| | | | | — | | |
Goodwill impairment
|
| | |
|
59,553
|
| | | | | — | | |
Amortization of intangible assets
|
| | |
|
7,623
|
| | | | | 9,100 | | |
Amortization of original issue discounts and deferred financing costs
|
| | |
|
3,234
|
| | | | | 2,117 | | |
Amortization of capitalized curriculum development costs
|
| | |
|
1,674
|
| | | | | 4,450 | | |
Loss on disposal of property and equipment
|
| | |
|
1
|
| | | | | 59 | | |
Unrealized foreign exchange loss
|
| | |
|
408
|
| | | | | 161 | | |
Realized and unrealized gain on derivative financial instruments
|
| | |
|
—
|
| | | | | (822) | | |
Deferred income tax benefit
|
| | |
|
(943)
|
| | | | | (3,632) | | |
Change in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | |
|
16,205
|
| | | | | 4,093 | | |
Prepaid expenses and other assets
|
| | |
|
(3,717)
|
| | | | | 540 | | |
Accounts payable
|
| | |
|
3,665
|
| | | | | (12,242) | | |
Deferred revenue
|
| | |
|
(6,437)
|
| | | | | (3,916) | | |
Accrued expenses and other long-term liabilities
|
| | |
|
8,933
|
| | | | | (2,594) | | |
Net cash provided by (used in) operating activities
|
| | |
|
3,021
|
| | | | | (19,056) | | |
Investing activities | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | |
|
(1,963)
|
| | | | | (2,539) | | |
Cash paid for capitalized curriculum development costs
|
| | |
|
(1,776)
|
| | | | | (737) | | |
Cash received upon termination of derivative contracts
|
| | |
|
—
|
| | | | | 2,476 | | |
Cash paid for acquisition of a business, net of cash received
|
| | |
|
(89)
|
| | | | | — | | |
Net cash used in investing activities
|
| | |
|
(3,828)
|
| | | | | (800) | | |
Financing activities | | | | | | | | | | | | | |
Payments under financing arrangements
|
| | |
|
(210)
|
| | | | | (542) | | |
Advances under credit facility
|
| | |
|
15,500
|
| | | | | 900 | | |
Payments on term loans
|
| | |
|
(2,188)
|
| | | | | (1,313) | | |
Payments on advances under credit facility
|
| | |
|
—
|
| | | | | (2) | | |
Debt issuance costs
|
| | |
|
(5,040)
|
| | | | | (305) | | |
Borrowings from related party loan
|
| | |
|
2,500
|
| | | | | 2,684 | | |
Contributions from stockholder
|
| | |
|
—
|
| | | | | 22,513 | | |
Net cash provided by financing activities
|
| | |
|
10,562
|
| | | | | 23,935 | | |
Effect of exchange rate changes on cash
|
| | |
|
460
|
| | | | | (37) | | |
Net increase in cash
|
| | |
|
10,215
|
| | | | | 4,042 | | |
Cash, beginning of period
|
| | |
|
9,621
|
| | | | | 5,579 | | |
Cash, end of period
|
| | |
$
|
19,836
|
| | | | $ | 9,621 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | | | | |
Cash paid for interest
|
| | |
$
|
11,130
|
| | | | $ | 22,310 | | |
Cash paid for income taxes
|
| | |
$
|
2,854
|
| | | | $ | 1,350 | | |
| | |
Useful Life
|
| |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Computers and office equipment
|
| |
2-5 years
|
| | |
$
|
55,292
|
| | | | $ | 53,310 | | |
Leasehold improvements
|
| |
Shorter of the
life of the lease or estimated useful life |
| | |
|
9,568
|
| | | | | 10,228 | | |
Furniture and fixtures
|
| |
3 years
|
| | |
|
4,594
|
| | | | | 4,330 | | |
Property and equipment, gross
|
| | | | | |
|
69,454
|
| | | | | 67,868 | | |
Accumulated depreciation and amortization
|
| | | | | |
|
(62,392)
|
| | | | | (56,584) | | |
Property and equipment, net
|
| | | | | |
$
|
7,062
|
| | | | $ | 11,284 | | |
| | |
Gross Carrying
Amount |
| |
Accumulated
Impairments |
| |
Net Carrying
Amount |
| |||||||||
Balance at September 28, 2018
|
| | | $ | 268,413 | | | | | $ | (86,801) | | | | | $ | 181,612 | | |
Currency translation adjustments
|
| | | | (2,746) | | | | | | — | | | | | | (2,746) | | |
Balance at September 27, 2019
|
| | | | 265,667 | | | | | | (86,801) | | | | | | 178,866 | | |
Acquired through business combination
|
| | | | 582 | | | | | | — | | | | | | 582 | | |
Impairment loss
|
| | | | — | | | | | | (59,553) | | | | | | (59,553) | | |
Currency translation adjustments
|
| | | | 5,719 | | | | | | — | | | | | | 5,719 | | |
Balance at October 2, 2020
|
| | | $ | 271,968 | | | | | $ | (146,354) | | | | | $ | 125,614 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
U.S.
|
| | |
$
|
72,264
|
| | | | $ | 131,817 | | |
Canada
|
| | |
|
6,801
|
| | | | | 6,825 | | |
Europe
|
| | |
|
41,487
|
| | | | | 35,189 | | |
Middle East and Africa
|
| | |
|
5,062
|
| | | | | 5,035 | | |
Total goodwill
|
| | |
$
|
125,614
|
| | | | $ | 178,866 | | |
October 2, 2020
|
| |
Weighted
Average Remaining Life in Years |
| |
Gross Carrying
Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| ||||||||||||
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and domain names
|
| | | | N/A | | | | | $ | 16,424 | | | | | $ | — | | | | | $ | 16,424 | | |
Definite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Covenant not to compete
|
| | | | 0.0 | | | | | | 63 | | | | | | (63) | | | | | | — | | |
Courseware
|
| | | | 0.0 | | | | | | 9,270 | | | | | | (9,270) | | | | | | — | | |
Customer relationships
|
| | | | 6.7 | | | | | | 87,690 | | | | | | (58,526) | | | | | | 29,164 | | |
Total definite-lived intangible assets
|
| | | | 6.7 | | | | | | 97,023 | | | | | | (67,859) | | | | | | 29,164 | | |
Total intangible assets
|
| | | | | | | | | $ | 113,447 | | | | | $ | (67,859) | | | | | $ | 45,588 | | |
|
September 27, 2019
|
| |
Weighted
Average Remaining Life in Years |
| |
Gross Carrying
Amount |
| |
Accumulated
Amortization |
| |
Net
Carrying Amount |
| ||||||||||||
Indefinite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and domain names
|
| | | | N/A | | | | | $ | 23,851 | | | | | $ | — | | | | | $ | 23,851 | | |
Definite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Covenant not to compete
|
| | | | 0.0 | | | | | | 63 | | | | | | (63) | | | | | | — | | |
Courseware
|
| | | | 0.0 | | | | | | 9,271 | | | | | | (9,271) | | | | | | — | | |
Customer relationships
|
| | | | 7.7 | | | | | | 86,257 | | | | | | (49,980) | | | | | | 36,277 | | |
Total definite-lived intangible assets
|
| | | | 7.7 | | | | | | 95,591 | | | | | | (59,314) | | | | | | 36,277 | | |
Total intangible assets
|
| | | | | | | | | $ | 119,442 | | | | | $ | (59,314) | | | | | $ | 60,128 | | |
Fiscal year ending
|
| | | | | | |
October 1, 2021
|
| | | $ | 6,553 | | |
September 30, 2022
|
| | | | 5,577 | | |
September 29, 2023
|
| | | | 4,368 | | |
September 27, 2024
|
| | | | 3,727 | | |
September 26, 2025
|
| | | | 3,180 | | |
Thereafter
|
| | | | 5,759 | | |
Total future amortization expense
|
| | | $ | 29,164 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Outsourcing, retention, and severance costs for operational, sales and administrative employees
|
| | |
$
|
6,245
|
| | | | $ | 8,347 | | |
Facility closing costs, net
|
| | |
|
1,975
|
| | | | | (783) | | |
Total restructuring expense
|
| | |
$
|
8,220
|
| | | | $ | 7,564 | | |
|
Balance at September 28, 2018
|
| | | $ | 8,759 | | |
|
Amount charged to operating expense
|
| | | | 7,564 | | |
|
Currency translation adjustments
|
| | | | (58) | | |
|
Cash payments
|
| | | | (10,351) | | |
|
Balance at September 27, 2019
|
| | | $ | 5,914 | | |
|
Amount charged to operating expense
|
| | | | 8,220 | | |
|
Currency translation adjustments
|
| | | | (38) | | |
|
Cash payments
|
| | | | (8,309) | | |
|
Balance at October 2, 2020
|
| | | $ | 5,787 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Outsourcing, retention, and severance costs for operational, sales and administrative employees
|
| | |
$
|
2,724
|
| | | | $ | 3,124 | | |
Facility closing costs
|
| | |
|
3,063
|
| | | | | 2,790 | | |
Total restructuring liabilities
|
| | |
$
|
5,787
|
| | | | $ | 5,914 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Deferred expenses
|
| | |
$
|
2,185
|
| | | | $ | 1,141 | | |
Prepaid expenses
|
| | |
|
1,335
|
| | | | | 1,864 | | |
Course materials
|
| | |
|
328
|
| | | | | 472 | | |
Salary advances
|
| | |
|
120
|
| | | | | 67 | | |
Deposits
|
| | |
|
5,429
|
| | | | | 203 | | |
Other receivables
|
| | |
|
649
|
| | | | | 1,252 | | |
Other current assets
|
| | |
|
2,692
|
| | | | | 2,734 | | |
Total prepaid expenses and other current assets
|
| | |
$
|
12,738
|
| | | | $ | 7,733 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Employee compensation and related benefits
|
| | |
$
|
9,499
|
| | | | $ | 8,503 | | |
Income, property, and other taxes payable
|
| | |
|
3,933
|
| | | | | 5,716 | | |
Customer credit balances
|
| | |
|
3,780
|
| | | | | 4,970 | | |
Restructuring (Note 6)
|
| | |
|
4,260
|
| | | | | 2,983 | | |
Accrued professional fees
|
| | |
|
211
|
| | | | | 435 | | |
Royalties and course director fees
|
| | |
|
829
|
| | | | | 837 | | |
Accrued interest
|
| | |
|
16,294
|
| | | | | 5,445 | | |
Other
|
| | |
|
4,316
|
| | | | | 2,906 | | |
Total accrued expenses
|
| | |
$
|
43,122
|
| | | | $ | 31,795 | | |
Fiscal year ending
|
| | | | | | |
October 1, 2021
|
| | | $ | 7,114 | | |
September 30, 2022
|
| | | | 5,909 | | |
September 29, 2023
|
| | | | 1,851 | | |
September 27, 2024
|
| | | | 622 | | |
September 26, 2025
|
| | | | 309 | | |
Thereafter
|
| | | | — | | |
Total future minimum operating lease commitments
|
| | | $ | 15,805 | | |
|
Fiscal year ending
|
| | | | | | |
October 1, 2021
|
| | | $ | 214,938 | | |
Less: unamortized discounts
|
| | | | (273) | | |
Less: unamortized deferred financing costs
|
| | | | (4,883) | | |
Term loans – short-term portion, net
|
| | | $ | 209,782 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
U.S.
|
| | |
$
|
(105,012)
|
| | | | $ | (33,853) | | |
Foreign
|
| | |
|
3,925
|
| | | | | 7,582 | | |
Total loss before income taxes
|
| | |
$
|
(101,087)
|
| | | | $ | (26,271) | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
U.S. Federal
|
| | |
$
|
(116)
|
| | | | $ | 20 | | |
U.S. state
|
| | |
|
141
|
| | | | | 74 | | |
Foreign
|
| | |
|
246
|
| | | | | (66) | | |
Total income tax expense
|
| | |
$
|
271
|
| | | | $ | 28 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Current (benefit) expense: | | | | | | | | | | | | | |
U.S. Federal
|
| | |
$
|
(116)
|
| | | | $ | — | | |
U.S. State
|
| | |
|
141
|
| | | | | 74 | | |
Foreign
|
| | |
|
1,189
|
| | | | | 3,586 | | |
Total current income tax expense
|
| | |
|
1,214
|
| | | | | 3,660 | | |
Deferred expense (benefit): | | | | | | | | | | | | | |
U.S. Federal
|
| | |
|
—
|
| | | | | 20 | | |
U.S. State
|
| | |
|
—
|
| | | | | — | | |
Foreign
|
| | |
|
(943)
|
| | | | | (3,652) | | |
Total deferred income tax benefit
|
| | |
|
(943)
|
| | | | | (3,632) | | |
Total income tax expense
|
| | |
$
|
271
|
| | | | $ | 28 | | |
| | |
Fiscal Year Ended
October 2, 2020 |
| |
Fiscal Year Ended
September 27, 2019 |
| ||||||
Loss for the year
|
| | |
$
|
(101,358)
|
| | | | $ | (26,299) | | |
Income tax expense
|
| | |
|
271
|
| | | | | 28 | | |
Loss before income taxes
|
| | |
$
|
(101,087)
|
| | | | $ | (26,271) | | |
Tax using the Company’s domestic tax rate of 21%
|
| | |
$
|
(21,228)
|
| | | | $ | (5,517) | | |
Expenses not deductible for tax purposes
|
| | |
|
(370)
|
| | | | | 36 | | |
Goodwill impairment
|
| | |
|
12,506
|
| | | | | — | | |
Tax rate change
|
| | |
|
(19)
|
| | | | | (197) | | |
Deferred tax assets not benefited
|
| | |
|
10,638
|
| | | | | 4,339 | | |
Different tax rates applied in overseas jurisdictions
|
| | |
|
(292)
|
| | | | | 538 | | |
Other
|
| | |
|
(964)
|
| | | | | 829 | | |
Total income tax expense
|
| | |
$
|
271
|
| | | | $ | 28 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating losses and credit carryforwards
|
| | |
$
|
44,410
|
| | | | $ | 40,805 | | |
Depreciation and amortization
|
| | |
|
6,796
|
| | | | | 6,522 | | |
Deferred revenue
|
| | |
|
786
|
| | | | | 1,021 | | |
Interest limitation
|
| | |
|
11,508
|
| | | | | 5,811 | | |
Other reserves and accruals
|
| | |
|
4,263
|
| | | | | 4,813 | | |
Gross deferred tax assets
|
| | |
|
67,763
|
| | | | | 58,972 | | |
Less valuation allowances
|
| | |
|
(52,120)
|
| | | | | (41,802) | | |
Deferred tax assets, net of valuation allowances
|
| | |
|
15,643
|
| | | | | 17,170 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | |
|
(14,418)
|
| | | | | (16,605) | | |
Other reserves and accruals
|
| | |
|
(662)
|
| | | | | (931) | | |
Gross deferred tax liabilities
|
| | |
|
(15,080)
|
| | | | | (17,536) | | |
Net deferred tax assets (liabilities)
|
| | |
$
|
563
|
| | | | $ | (366) | | |
Jurisdiction
|
| |
Expiration Date
|
| | | | | | |
United States
|
| |
Beginning in 2025
|
| | |
$
|
134,744
|
| |
Canada
|
| |
Beginning in 2031
|
| | |
|
24,489
|
| |
Spain
|
| |
Unlimited
|
| | |
|
7,805
|
| |
United Kingdom
|
| |
Unlimited
|
| | |
|
4,507
|
| |
Denmark
|
| |
Unlimited
|
| | |
|
3,760
|
| |
Netherlands
|
| |
Unlimited
|
| | |
|
1,786
|
| |
Total net operating loss carryforwards
|
| | | | | |
$
|
177,091
|
| |
Jurisdiction
|
| |
Years
|
| |||
Canada
|
| | | | 2015 – 2020 | | |
France
|
| | | | 2017 – 2020 | | |
Netherlands
|
| | | | 2017 – 2020 | | |
United Kingdom
|
| | | | 2017 – 2020 | | |
U.S. (federal and state)
|
| | | | 2017 – 2020 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Rhône – monitoring fees and expense reimbursements
|
| | |
$
|
597
|
| | | | $ | 798 | | |
Falco – consulting services
|
| | |
|
179
|
| | | | | 1,186 | | |
Total related party expenses
|
| | |
$
|
776
|
| | | | $ | 1,984 | | |
Related Party
|
| |
Balance Sheet Location
|
| |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
Abercrombie
|
| |
Other long-term assets
|
| | |
$
|
375
|
| | | | $ | 375 | | |
Rhône
|
| |
Accounts payable
|
| | |
|
(2,129)
|
| | | | | (1,641) | | |
Falco
|
| |
Accounts payable
|
| | |
|
(270)
|
| | | | | (529) | | |
Albert Lux
|
| |
Related party loans
|
| | |
|
(11,181)
|
| | | | | (8,547) | | |
Rhône
|
| |
Accrued expenses
|
| | |
|
(412)
|
| | | | | (364) | | |
Falco
|
| |
Accrued expenses
|
| | |
|
(127)
|
| | | | | (99) | | |
MidOcean
|
| |
Accrued expenses
|
| | |
|
(770)
|
| | | | | (770) | | |
Net related party liabilities
|
| | | | | | $ | (14,514) | | | | |
$
|
(11,575)
|
| |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
U.S.
|
| | |
$
|
85,735
|
| | | | $ | 116,023 | | |
Canada
|
| | |
|
22,602
|
| | | | | 30,832 | | |
Europe
|
| | |
|
85,353
|
| | | | | 96,579 | | |
Middle East and Africa
|
| | |
|
14,845
|
| | | | | 16,731 | | |
Total revenues
|
| | |
$
|
208,535
|
| | | | $ | 260,165 | | |
| | |
October 2,
2020 |
| |
September 27,
2019 |
| ||||||
U.S.
|
| | |
$
|
(56,935)
|
| | | | $ | 50,498 | | |
Canada
|
| | |
|
(28,875)
|
| | | | | (28,429) | | |
Europe
|
| | |
|
(37,079)
|
| | | | | (51,544) | | |
Middle East and Africa
|
| | |
|
(704)
|
| | | | | (720) | | |
Net liabilities
|
| | |
$
|
(123,593)
|
| | | | $ | (30,195) | | |
| | |
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| EXHIBITS | | | | |
| Exhibit A | | | Definitions | |
| Exhibit B | | | Joint Merger Proposal | |
| Exhibit C | | | Form of Company Support Agreement | |
| Exhibit D | | | Sponsor Support Agreement | |
| Exhibit E | | | Stockholders Agreement | |
| Exhibit F | | | Registration Rights Agreement | |
| Exhibit G | | | Form of PIPE Subscription Agreement | |
| Exhibit H | | | Buyer A&R Charter Amendment | |
| Exhibit I | | | Buyer Second A&R Charter | |
| Exhibit J | | | Buyer A&R Bylaws | |
| Exhibit K | | | Form of Letter of Transmittal | |
Term
|
| |
Section
|
|
Agreement | | | Preamble | |
Agreement Date | | | Preamble | |
Alternative Proposal | | | 5.16(a) | |
Audited Pointwell Financial Statements | | | 3.06(a) | |
Auditor Report | | | Recitals | |
Board Confirmation | | | 2.04 | |
Business Combination Proposals | | | 5.15(c) | |
Business Information Systems | | | 3.10(j) | |
Buyer | | | Preamble | |
Buyer A&R Bylaws | | | Recitals | |
Buyer A&R Charter Amendment | | | Recitals | |
Buyer Board | | | Recitals | |
Buyer Board Recommendation | | | 5.15(d) | |
Buyer Board Report | | | Recitals | |
Buyer Change in Recommendation | | | 5.15(d) | |
Buyer Recommendation | | | Recitals | |
Buyer Second A&R Charter | | | Recitals | |
Buyer Stockholder Approval | | | 4.02(b) | |
Certificate of Merger | | | 2.04 | |
Class C Common Stock Redemption | | | 2.06(d) | |
Class C Redemption Amount | | | 2.06(d) | |
Closing | | | 2.03 | |
Closing Date | | | 2.03 | |
Company | | | Preamble | |
Company Affiliate Agreement | | | 3.20 | |
Company Board | | | Recitals | |
Company Board Report | | | Recitals | |
Company Shareholder Approval | | | Recitals | |
Term
|
| |
Section
|
|
Company Subsidiaries | | | Recitals | |
Company Support Agreements | | | Recitals | |
Contracting Parties | | | 11.17 | |
COVID-19 Response | | | 5.01(i) | |
D&O Indemnified Parties | | | 6.02(a) | |
DGCL | | | Recitals | |
Director Election Proposal | | | 5.15(c) | |
Effective Time | | | 2.04 | |
Exchange Fund | | | 2.09(b) | |
Excluded Share | | | 2.06(a)(iii) | |
Financial Statements | | | 3.06(a) | |
First Charter Amendment Proposal | | | 5.15(c) | |
Incentive Plan Proposal | | | 5.15(c) | |
Joint Merger Proposal | | | Recitals | |
Joint Proxy Statement | | | 5.15(a) | |
Joint Proxy Statement/Prospectus | | | 5.15(a) | |
Letter of Transmittal | | | 2.09(c)(i) | |
Luxembourg Auditor | | | Recitals | |
Luxembourg Companies’ Law | | | Recitals | |
Material Contracts | | | 3.12(a) | |
Material Permits | | | 3.22 | |
Merger | | | Recitals | |
Nonparty Affiliates | | | 11.17 | |
Outside Date | | | 10.01(e) | |
Parties | | | Preamble | |
Per Class A Share Merger Consideration | | | 2.06(a)(i) | |
Per Class B Share Merger Consideration | | | 2.06(a)(ii) | |
Per Share Merger Consideration | | | 2.06(a)(ii) | |
Pointwell | | | 3.06(a) | |
Post-Emergence Financial Statements | | | 3.06(a) | |
Proposals | | | 5.15(c) | |
Registration Statement | | | 5.15(a) | |
SEC Reports | | | 4.09(a) | |
Second Charter Amendment Proposal | | | 5.15(c) | |
Share Issuance Proposal | | | 5.15(c) | |
Sponsor Support Agreement | | | Recitals | |
Surviving Corporation | | | 2.01 | |
Third Party Consents | | | 5.05 | |
Transaction Dispute | | | 11.12 | |
Trust Account | | | 4.06(a) | |
Trust Agreement | | | 4.06(a) | |
Trustee | | | 4.06(a) | |
Unaudited Pointwell Financial Statements | | | 3.06(a) | |
WARN Act | | | 3.13(k) | |
|
Class A First Lien Exchange Ratio =
|
| |
24,000,000
Aggregate number of Company Class A Shares outstanding
as of immediately prior to the Closing |
|
|
Class A Second Lien Exchange Ratio =
|
| |
4,500,000
Aggregate number of Company Class B Shares outstanding
as of immediately prior to the Closing. |
|
|
Class C Exchange Ratio =
|
| |
3,840,000
Aggregate number of Company Class A Shares outstanding
as of immediately prior to the Closing |
|
Sponsor
|
| |
Founder Shares
|
| |
Private Placement Warrants
|
| ||||||
Churchill Sponsor II LLC
|
| | | | 17,250,000 | | | | | | 15,800,000 | | |
Total | | | | | 17,250,000 | | | | | | 15,800,000 | | |
Insider
|
| |
Founder Shares
|
| |
Private Placement Warrants
|
| ||||||
Michael Klein
|
| | | | 0 | | | | | | 0 | | |
Peter Seibold
|
| | | | 0 | | | | | | 0 | | |
Mark Klein
|
| | | | 0 | | | | | | 0 | | |
Malcom S. McDermid
|
| | | | 0 | | | | | | 0 | | |
Glenn August
|
| | | | 0 | | | | | | 0 | | |
Karen G. Mills
|
| | | | 0 | | | | | | 0 | | |
Jeremy Paul Abson
|
| | | | 0 | | | | | | 0 | | |
Dena Brumpton
|
| | | | 0 | | | | | | 0 | | |
Total | | | | | 0 | | | | | | 0 | | |
| Accepted and agreed this [•] day of October, 2020. | | | | |
| SUBSCRIBER: | | | | |
|
Signature of Subscriber:
By:
Name:
Title: |
| |
Signature of Joint Subscriber, if applicable:
By:
Name:
Title: |
|
| Date: October [•], 2020 | | | | |
|
Name of Subscriber:
(Please print. Please indicate name and
capacity of person signing above) |
| |
Name of Joint Subscriber, if applicable:
(Please Print. Please indicate name and
capacity of person signing above) |
|
|
Name in which securities are to be registered
(if different from the name of Subscriber listed directly above): |
| | | |
| Email Address: | | | | |
| If there are joint investors, please check one: | | | | |
| ☐ Joint Tenants with Rights of Survivorship | | | | |
| ☐ Tenants-in-Common | | | | |
| ☐ Community Property | | | | |
|
|
| |
Joint Subscriber’s EIN:
|
|
| Business Address-Street: | | | Mailing Address-Street (if different): | |
|
|
| |
|
|
|
|
| |
|
|
| City, State, Zip: | | | City, State, Zip: | |
| Attn: | | | Attn: | |
| Telephone No.: | | |
Telephone No.:
|
|
| Facsimile No.: | | |
|
|
| | |
Page
|
| |||
| | | | A-I-1 | | | |
| | | | A-I-1 | | | |
| | | | A-I-1 | | | |
| | | | A-I-1 | | | |
| | | | A-I-3 | | | |
| | | | A-I-4 | | | |
| | | | A-I-5 | | | |
| | | | A-I-5 | | | |
| | | | A-I-5 | | | |
| | | | A-I-7 | | | |
| | | | A-I-9 | | | |
| | | | A-I-12 | | |
| |
BOX A – Signature of Registered Holder(s)
|
| | |
BOX B – Company Shares to be cancelled
|
| | ||||
| |
(Must be signed by all registered shareholders; include legal capacity
if signing on behalf of an entity) |
| | | | | | |
Class and amount of Company Shares
held by shareholder of the Company |
| |
| | | | | |
|
| | | | | |
| |
Signature(s)
|
| | | | | | | | | |
|
|
| | | | | | |||||
| |
Print Name Here (and capacity, if the registered holder is an entity)
|
| | | | | | | | | |
|
|
| | | | | | |||||
| |
Telephone Number
|
| | |
Total Company Shares to be cancelled:
|
| | | | | |
| |
BOX C – New Registration Instructions
|
| | |
BOX D – One Time Delivery Instructions
|
| |
| |
To be completed ONLY if the check and/or stock is to be issued in the name(s) of (or wire transfer made to account of) someone other than the registered holder(s) in Box A. ISSUE TO:
|
| | |
To be completed ONLY if the check and/or stock is to be delivered to an address other than that listed in Box E. MAIL TO:
|
| |
| |
|
| | | | | |
| |
Name
|
| | |
Name
|
| |
| |
Street Address
|
| | |
Street Address
|
| |
| |
City, State and Zip Code
|
| | |
City, State and Zip Code
|
| |
| |
BOX E – Name and Address of Registered Holder(s)
|
| | |
BOX F – Medallion Guarantee
|
| |
| |
Please confirm that your address below is correct or mark any corrections
|
| | |
If (and only if) you have completed Box C, or all registered holders are not listed on the bank account provided in Box G (if you elected a wire payment) your signature must be
Medallion Guaranteed by an eligible financial institution. |
| |
| | ☐ indicates permanent address change | | | |
Note: A notarization by a notary public is not acceptable |
| |
| |
BOX G — Optional Bank Wire Instructions
|
| | ||||
| |
NOTE: This wire request is optional. If the name on the bank account does not include all registered holders, a medallion guarantee is required in Box F. If you complete Box G and any of the information is incomplete, illegible or otherwise deficient, you will receive a check for your proceeds. In connection with the above referenced merger, please wire the entitled funds as follows:
|
| | ||||
| | *ABA Routing Number | | | | | | |
| | Bank Name | | | | | | |
| | Bank Address | | | | | | |
| | Name on Bank Account | | | | | | |
| | Bank Account Number | | | | | | |
| | For Further Credit To Name | | | | | | |
| | For Further Credit To Account Number | | | | | | |
| |
SWIFT Code (if applicable/foreign)
|
| | | | | |
| | IBAN (if applicable/foreign) | | | | | | |
| | |
Page
|
| |||
| | | | C-1 | | | |
| | | | C-1 | | | |
| | | | C-1 | | | |
| | | | C-1 | | | |
| | | | C-3 | | | |
| | | | C-4 | | | |
| | | | C-5 | | | |
| | | | C-5 | | | |
| | | | C-5 | | | |
| | | | C-7 | | | |
| | | | C-9 | | | |
| | | | C-12 | | |
| | | | Churchill Capital Corp II | | |||
| | | | By: | | | /s/ Peter Seibold | |
| | | | | | | Name: Peter Seibold | |
| | | | | | | Title: Chief Financial Officer | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Michael Klein
Michael Klein
|
| |
Chief Executive Officer, Chairman of the Board of Directors and Director
(Principal Executive Officer) |
| |
January 22, 2021
|
|
|
/s/ Peter Seibold
Peter Seibold
|
| |
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
| |
January 22, 2021
|
|
|
/s/ Jeremy Paul Abson
Jeremy Paul Abson
|
| |
Director
|
| |
January 22, 2021
|
|
|
/s/ Glenn R. August
Glenn R. August
|
| |
Director
|
| |
January 22, 2021
|
|
|
/s/ Dena J. Brumpton
Dena J. Brumpton
|
| |
Director
|
| |
January 22, 2021
|
|
|
/s/ Mark Klein
Mark Klein
|
| |
Director
|
| |
January 22, 2021
|
|
|
/s/ Malcolm S. McDermid
Malcolm S. McDermid
|
| |
Director
|
| |
January 22, 2021
|
|
|
/s/ Karen G. Mills
Karen G. Mills
|
| |
Director
|
| |
January 22, 2021
|
|