Filed pursuant to Rule 424(b)(3)
Registration No. 333-257718
PROSPECTUS SUPPLEMENT No. 3
(to Prospectus dated August 2, 2021)
70,250,000 Shares of Class A Common Stock
33,966,667 Warrants to Purchase Shares of Class A Common Stock
56,966,667 Shares of Class A Common Stock Underlying Warrants
This prospectus supplement updates and supplements the prospectus dated August 2, 2021, which forms a part of our registration statement on Form S-1 (No. 333-257718). This prospectus supplement is being filed to update and supplement the information in the prospectus dated August 2, 2021, the related prospectus supplement dated August 4, 2021 and the prospectus supplement dated September 15, 2021 (together, the “Prospectus”) with information contained in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 14, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.
The Prospectus and this prospectus supplement relate to the issuance by us of up to 23,000,000 shares of our Class A common stock, par value $0.0001 per share that are issuable upon the exercise of the Public Warrants (as defined below).
In addition, the Prospectus and this prospectus supplement also relate to the offer and sale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”), or their permitted transferees, of (a) up to 104,216,667 shares of our Class A common stock (which includes up to 33,966,667 shares of Class A common stock issuable upon the exercise of outstanding warrants) and (b) up to 33,966,667 warrants. We will not receive any proceeds from the sale of shares of our Class A common stock or warrants by the Selling Securityholders pursuant to the Prospectus, except with respect to amounts received by us upon exercise of the warrants to the extent such warrants are exercised for cash. However, we will pay the expenses, other than underwriting discounts and commissions and expenses incurred by the Selling Securityholders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Securityholders in disposing of the securities, associated with the sale of securities pursuant to the Prospectus.
Our registration of the securities covered by the Prospectus does not mean that either we or the Selling Securityholders will issue, offer or sell, as applicable, any of the securities. The Selling Securityholders may offer and sell the securities covered by the Prospectus in a number of different ways and at varying prices. We provide more information in the section entitled “Plan of Distribution.” In addition, certain of the securities being registered hereby are subject to vesting and/or transfer restrictions that may prevent the Selling Securityholders from offering or selling of such securities upon the effectiveness of the registration statement of which the Prospectus is a part. See “Description of Securities” for more information.
You should read the Prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Our Class A common stock and warrants are traded on the New York Stock Exchange under the symbol “SKIL” and “SKIL.WS”, respectively. On December 14, 2021, the last reported sale price of our Class A common stock on the New York Stock Exchange was $9.96 per share, and the closing price of our warrants was $2.28 per warrant.
This prospectus supplement updates and supplements the information in the Prospectus, and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any subsequent amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus, and if there is any inconsistency between the information in the Prospectus, and this prospectus supplement, you should rely on the information in this prospectus supplement. The information in this prospectus supplement modifies and supersedes, in part, the information in the Prospectus. Any information in the Prospectus that is modified or superseded shall not be deemed to constitute a part of the Prospectus except as modified or superseded by this prospectus supplement. You should not assume that the information provided in this prospectus supplement or the Prospectus is accurate as of any date other than their respective dates. Neither the delivery of this prospectus supplement or the Prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date of this prospectus supplement, or that the information contained in this prospectus supplement or the Prospectus is correct as of any time after the date of that information.
Investing in our securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 8 of the Prospectus and under similar headings in any further amendments or supplements to the Prospectus to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this Prospectus Supplement No. 3. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement is December 15, 2021.
i |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended October 31, 2021
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ____________ to ____________
Commission File Number: 001-38960
Skillsoft Corp.
(Exact name of registrant as specified in its charter)
Delaware |
|
83-4388331 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
300
Innovative Way, Suite 201 (Address of principal executive offices) |
Tel: (603) 324-3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Class A Common Stock, par value $0.0001 per share Warrants, each whole warrant exercisable for one share of Class A common stock |
SKIL SKIL.WS |
New York Stock Exchange New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
|
Accelerated filer ☐ |
Non-accelerated filer ☒ |
|
Smaller reporting company ☒ |
Emerging growth company ☒ |
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of registrant’s common stock outstanding as of December 9, 2021 was: 133,164,526.
SKILLSOFT CORP.
FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 2021
1
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, our product development and planning, our pipeline, future capital expenditures, financial results, the impact of regulatory changes, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully implement our plans, strategies, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as “may,” “will,” “would,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “forecast,” “seek,” “outlook,” “target,” goal,” “probably,” or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of Skillsoft’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.
There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including:
● | our ability to realize the benefits expected from the business combination between Skillsoft, Churchill Capital Corp. II and Global Knowledge; |
● | the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability; |
● | the impact of the ongoing COVID-19 pandemic (including any variant) on our business, operating results and financial condition; |
● | fluctuations in our future operating results; |
● | our ability to successfully identify, consummate and achieve strategic objectives in connection with our acquisition opportunities and realize the benefits expected from the acquisition; |
● | the demand for, and acceptance of, our products and for cloud-based technology learning solutions in general; |
● | our ability to compete successfully in competitive markets and changes in the competitive environment in our industry and the markets in which we operate; |
● | our ability to market existing products and develop new products; |
● | a failure of our information technology infrastructure or any significant breach of security, including in relation to the migration of our key platforms from our systems to cloud storage; |
● | future regulatory, judicial and legislative changes in our industry; |
● | our ability to comply with laws and regulations applicable to our business; |
● | the impact of natural disasters, public health crises, political crises, or other catastrophic events; |
● | our ability to attract and retain key employees and qualified technical and sales personnel; |
● | fluctuations in foreign currency exchange rates; |
● | our ability to protect or obtain intellectual property rights; |
● | our ability to raise additional capital; |
● | the impact of our indebtedness on our financial position and operating flexibility; |
● | our ability to meet future liquidity requirements and comply with restrictive covenants related to long-term indebtedness; |
● | our ability to successfully defend ourselves in legal proceedings; and |
● | our ability to continue to meet applicable listing standards. |
The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see the risk factors included in the Company’s S-1 amendment filed on July 29, 2021, and subsequent filings with the SEC.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a
2
representation or guarantee by us that our objectives and plans will be achieved. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Additionally, statements as to market share, industry data and our market position are based on the most currently available data available to us and our estimates regarding market position or other industry data included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.
Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless required by applicable law. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.
3
PART I – FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS.
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
|
|
Successor |
|
|
Predecessor (SLH) | ||
|
|
October 31, 2021 |
|
|
January 31, 2021 | ||
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
80,671 |
|
|
$ |
71,479 |
Restricted cash |
|
|
2,680 |
|
|
|
2,964 |
Accounts receivable, less reserves of approximately $2,173 and $294 as of October 31, 2021 and January 31, 2021 respectively |
|
|
136,890 |
|
|
|
179,784 |
Prepaid expenses and other current assets |
|
|
42,066 |
|
|
|
30,326 |
Total current assets |
|
|
262,307 |
|
|
|
284,553 |
Property and equipment, net |
|
|
17,253 |
|
|
|
13,780 |
Goodwill |
|
|
872,291 |
|
|
|
495,004 |
Intangible assets, net |
|
|
904,797 |
|
|
|
728,633 |
Right of use assets |
|
|
21,928 |
|
|
|
15,131 |
Deferred tax asset |
|
|
— |
|
|
|
— |
Other assets |
|
|
10,083 |
|
|
|
8,636 |
Total assets |
|
$ |
2,088,659 |
|
|
$ |
1,545,737 |
LIABILITIES AND SHAREHOLDER'S EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
4,800 |
|
|
$ |
5,200 |
Borrowings under accounts receivable facility |
|
|
11,080 |
|
|
|
17,022 |
Accounts payable |
|
|
31,472 |
|
|
|
7,425 |
Accrued compensation |
|
|
38,681 |
|
|
|
36,375 |
Accrued expenses and other current liabilities |
|
|
55,772 |
|
|
|
23,125 |
Lease liabilities |
|
|
7,687 |
|
|
|
4,740 |
Deferred revenue |
|
|
246,188 |
|
|
|
257,549 |
Total current liabilities |
|
|
395,680 |
|
|
|
351,436 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
462,996 |
|
|
|
510,236 |
Warrant liabilities |
|
|
65,363 |
|
|
|
900 |
Deferred tax liabilities |
|
|
91,497 |
|
|
|
81,008 |
Long term lease liabilities |
|
|
15,209 |
|
|
|
13,155 |
Deferred revenue - non-current |
|
|
1,883 |
|
|
|
3,035 |
Other long-term liabilities |
|
|
9,699 |
|
|
|
5,998 |
Total long-term liabilities |
|
|
646,647 |
|
|
|
614,332 |
Commitments and contingencies |
|
|
— |
|
|
|
— |
Shareholders’ equity: |
|
|
|
|
|
|
|
(Predecessor SLH) Shareholders’ common stock- 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) at January 31, 2021; 4,000,000 shares issued and outstanding (3,840,000 Class A, 160,000 Class B) at January 31, 2021 |
|
|
— |
|
|
|
40 |
(Successor) Shareholders’ common stock- Class A common shares, $0.0001 par value: 375,000,000 shares authorized and 133,164,526 shares issued and outstanding at October 31, 2021 |
|
|
11 |
|
|
|
— |
Additional paid-in capital |
|
|
1,301,319 |
|
|
|
674,333 |
Accumulated deficit |
|
|
(255,132) |
|
|
|
(93,722) |
Accumulated other comprehensive income (loss) |
|
|
134 |
|
|
|
(682) |
Total shareholders’ equity |
|
|
1,046,332 |
|
|
|
579,969 |
Total liabilities and shareholders’ equity |
|
$ |
2,088,659 |
|
|
$ |
1,545,737 |
The accompanying notes are an integral part of these consolidated financial statements.
4
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
Quarter-to Date Results | ||||||||
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||
|
|
Successor |
|
Predecessor (SLH) |
|
|
Predecessor (PL) | |||
|
|
Three Months |
|
From |
|
|
From | |||
|
|
Ended |
|
August 28, 2020 |
|
|
August 1, 2020 | |||
|
|
October 31, 2021 |
|
to October 31, 2020 |
|
|
to August 27, 2020 | |||
Revenues: |
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
170,559 |
|
$ |
36,973 |
|
|
$ |
38,687 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Costs of revenues |
|
|
48,891 |
|
|
15,882 |
|
|
|
6,329 |
Content and software development |
|
|
16,437 |
|
|
10,919 |
|
|
|
5,208 |
Selling and marketing |
|
|
39,938 |
|
|
18,193 |
|
|
|
8,259 |
General and administrative |
|
|
28,120 |
|
|
10,075 |
|
|
|
5,440 |
Amortization of intangible assets |
|
|
37,064 |
|
|
15,890 |
|
|
|
4,230 |
Recapitalization and acquisition-related costs |
|
|
3,687 |
|
|
8,225 |
|
|
|
64 |
Restructuring |
|
|
777 |
|
|
80 |
|
|
|
38 |
Total operating expenses |
|
|
174,914 |
|
|
79,264 |
|
|
|
29,568 |
Operating (loss) income |
|
|
(4,355) |
|
|
(42,291) |
|
|
|
9,119 |
Other (expense) income, net |
|
|
(611) |
|
|
717 |
|
|
|
(541) |
Fair value adjustment of warrants |
|
|
(36,838) |
|
|
2,900 |
|
|
|
— |
Interest income |
|
|
18 |
|
|
9 |
|
|
|
21 |
Interest expense |
|
|
(7,510) |
|
|
(7,919) |
|
|
|
(1,287) |
Reorganization items, net |
|
|
— |
|
|
— |
|
|
|
3,339,837 |
(Loss) income before (benefit from) provision for income taxes |
|
|
(49,296) |
|
|
(46,584) |
|
|
|
3,347,149 |
(Benefit from) provision for income taxes |
|
|
(6,441) |
|
|
(7,870) |
|
|
|
78,254 |
Net (loss) income |
|
|
(42,855) |
|
|
(38,714) |
|
|
|
3,268,895 |
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per share: |
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and Diluted (PL) |
|
|
* |
|
|
* |
|
|
|
32,656.29 |
Class A and B – Basic and Diluted (SLH) |
|
|
* |
|
|
(9.68) |
|
|
|
* |
Ordinary – Basic and Diluted (Successor) |
|
|
(0.32) |
|
|
* |
|
|
|
* |
Weighted average common share outstanding: |
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and Diluted (PL) |
|
|
* |
|
|
* |
|
|
|
100.1 |
Class A and B – Basic and Diluted (SLH) |
|
|
* |
|
|
4,000 |
|
|
|
* |
Ordinary – Basic and Diluted (Successor) |
|
|
133,116 |
|
|
* |
|
|
|
* |
*Not applicable
The accompanying notes are an integral part of these consolidated financial statements.
5
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
Year-to Date Results | ||||||||||||
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||||||
|
|
Successor |
|
|
Predecessor (SLH) |
|
Predecessor (SLH) |
|
|
Predecessor (PL) | ||||
|
|
From |
|
|
From |
|
From |
|
|
From | ||||
|
|
June 12, 2021 to |
|
|
February 1, 2021 |
|
August 28, 2020 |
|
|
February 1, 2020 | ||||
|
|
October 31, 2021 |
|
|
to June 11, 2021 |
|
to October 31, 2020 |
|
|
to August 27, 2020 | ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
261,572 |
|
|
$ |
139,636 |
|
$ |
36,973 |
|
|
$ |
273,851 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of revenues |
|
|
76,897 |
|
|
|
35,881 |
|
|
15,882 |
|
|
|
52,160 |
Content and software development |
|
|
26,316 |
|
|
|
24,084 |
|
|
10,919 |
|
|
|
38,986 |
Selling and marketing |
|
|
62,171 |
|
|
|
41,940 |
|
|
18,193 |
|
|
|
75,028 |
General and administrative |
|
|
45,194 |
|
|
|
17,217 |
|
|
10,075 |
|
|
|
37,455 |
Amortization of intangible assets |
|
|
57,087 |
|
|
|
50,902 |
|
|
15,890 |
|
|
|
34,378 |
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
332,376 |
Recapitalization and acquisition-related costs |
|
|
13,682 |
|
|
|
6,938 |
|
|
8,225 |
|
|
|
32,099 |
Restructuring |
|
|
1,093 |
|
|
|
(703) |
|
|
80 |
|
|
|
1,179 |
Total operating expenses |
|
|
282,440 |
|
|
|
176,259 |
|
|
79,264 |
|
|
|
603,661 |
Operating loss |
|
|
(20,868) |
|
|
|
(36,623) |
|
|
(42,291) |
|
|
|
(329,810) |
Other (expense) income, net |
|
|
(1,308) |
|
|
|
(493) |
|
|
717 |
|
|
|
1,268 |
Fair value adjustment of warrants |
|
|
(19,723) |
|
|
|
900 |
|
|
2,900 |
|
|
|
— |
Interest income |
|
|
30 |
|
|
|
64 |
|
|
9 |
|
|
|
105 |
Interest expense |
|
|
(17,366) |
|
|
|
(16,820) |
|
|
(7,919) |
|
|
|
(168,341) |
Reorganization items, net |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
3,329,245 |
(Loss) income before (benefit from) provision for income taxes |
|
|
(59,235) |
|
|
|
(52,972) |
|
|
(46,584) |
|
|
|
2,832,467 |
(Benefit from) provision for income taxes |
|
|
(4,527) |
|
|
|
(3,708) |
|
|
(7,870) |
|
|
|
68,455 |
Net (loss) income |
|
|
(54,708) |
|
|
|
(49,264) |
|
|
(38,714) |
|
|
|
2,764,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and Diluted (PL) |
|
|
* |
|
|
|
* |
|
|
* |
|
|
|
27,612.51 |
Class A and B – Basic and Diluted (SLH) |
|
|
* |
|
|
|
(12.32) |
|
|
(9.68) |
|
|
|
* |
Ordinary – Basic and Diluted (Successor) |
|
|
(0.41) |
|
|
|
* |
|
|
* |
|
|
|
* |
Weighted average common share outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and Diluted (PL) |
|
|
* |
|
|
|
* |
|
|
* |
|
|
|
100.1 |
Class A and B – Basic and Diluted (SLH) |
|
|
* |
|
|
|
4,000 |
|
|
4,000 |
|
|
|
* |
Ordinary – Basic and Diluted (Successor) |
|
|
133,096 |
|
|
|
* |
|
|
* |
|
|
|
* |
*Not applicable
The accompanying notes are an integral part of these consolidated financial statements.
6
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(IN THOUSANDS)
|
|
Quarter-to Date Results | ||||||||
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||
|
|
Successor |
|
Predecessor (SLH) |
|
|
Predecessor (PL) | |||
|
|
Three Months |
|
From |
|
|
From | |||
|
|
Ended |
|
August 28, 2020 |
|
|
August 1, 2020 | |||
|
|
October 31, 2021 |
|
to October 31, 2020 |
|
|
to August 27, 2020 | |||
Comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(42,855) |
|
$ |
(38,714) |
|
|
$ |
3,268,895 |
Other comprehensive (loss) income — Foreign currency adjustment, net of tax |
|
|
(772) |
|
|
168 |
|
|
|
92 |
Comprehensive (loss) income |
|
$ |
(43,627) |
|
$ |
(38,546) |
|
|
$ |
3,268,987 |
|
|
Year-to Date Results | ||||||||||||
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||||||
|
|
Successor |
|
|
Predecessor (SLH) |
|
Predecessor (SLH) |
|
|
Predecessor (PL) | ||||
|
|
From |
|
|
From |
|
From |
|
|
From | ||||
|
|
June 12, 2021 to |
|
|
February 1, 2021 |
|
August 28, 2020 |
|
|
February 1, 2020 | ||||
|
|
October 31, 2021 |
|
|
to June 11, 2021 |
|
to October 31, 2020 |
|
|
to August 27, 2020 | ||||
Comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(54,708) |
|
|
$ |
(49,264) |
|
$ |
(38,714) |
|
|
$ |
2,764,012 |
Other comprehensive income (loss) — Foreign currency adjustment, net of tax |
|
|
134 |
|
|
|
(430) |
|
|
168 |
|
|
|
(2,268) |
Comprehensive (loss) income |
|
$ |
(54,574) |
|
|
$ |
(49,694) |
|
$ |
(38,546) |
|
|
$ |
2,761,744 |
The accompanying notes are an integral part of these consolidated financial statements.
7
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Ordinary Shares |
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other |
|
|
| |
|
|
Number of |
|
|
|
|
Additional Paid- |
|
Accumulated |
|
Comprehensive |
|
|
Total Shareholder's | |||
|
|
Shares |
|
Par Value |
|
In Capital |
|
(Deficit) Equity |
|
(Loss) Income |
|
(Deficit) Equity | |||||
Balance January 31, 2020 (Predecessor (PL)) |
|
100,100 |
|
$ |
138 |
|
$ |
83 |
|
$ |
(2,761,499) |
|
$ |
(466) |
|
$ |
(2,761,744) |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(629) |
|
|
(629) |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(433,902) |
|
|
— |
|
|
(433,902) |
Balance April 30, 2020 (Predecessor (PL)) |
|
100,100 |
|
|
138 |
|
|
83 |
|
|
(3,195,401) |
|
|
(1,095) |
|
|
(3,196,275) |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,731) |
|
|
(1,731) |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(70,981) |
|
|
— |
|
|
(70,981) |
Balance July 31, 2020 (Predecessor (PL)) |
|
100,100 |
|
|
138 |
|
|
83 |
|
|
(3,266,382) |
|
|
(2,826) |
|
|
(3,268,987) |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
92 |
|
|
92 |
Net income |
|
— |
|
|
— |
|
|
— |
|
|
3,268,895 |
|
|
— |
|
|
3,268,895 |
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 27, 2020 (Predecessor (PL)) |
|
4,000,000 |
|
$ |
40 |
|
$ |
666,933 |
|
$ |
— |
|
$ |
— |
|
$ |
666,973 |
Balance August 28, 2020 (Predecessor (SLH)) |
|
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 (Predecessor (SLH)) |
|
4,000,000 |
|
$ |
40 |
|
$ |
674,333 |
|
$ |
(38,714) |
|
$ |
168 |
|
$ |
635,827 |
The accompanying notes are an integral part of these consolidated financial statements.
8
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
|
|
Ordinary Shares |
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other |
|
|
| |
|
|
Number of |
|
|
|
|
Additional Paid- |
|
Accumulated |
|
Comprehensive |
|
|
Total Shareholder's | |||
|
|
Shares |
|
Par Value |
|
In Capital |
|
(Deficit) Equity |
|
(Loss) Income |
|
(Deficit) Equity | |||||
Balance January 31, 2021 (Predecessor (SLH)) |
|
4,000,000 |
|
$ |
40 |
|
$ |
674,333 |
|
$ |
(93,722) |
|
$ |
(682) |
|
$ |
579,969 |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(228) |
|
|
(228) |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(37,405) |
|
|
— |
|
|
(37,405) |
Balance April 30, 2021 (Predecessor (SLH)) |
|
4,000,000 |
|
|
40 |
|
|
674,333 |
|
|
(131,127) |
|
|
(910) |
|
|
542,336 |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(202) |
|
|
(202) |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(11,859) |
|
|
— |
|
|
(11,859) |
Balance June 11, 2021 (Predecessor (SLH)) |
|
4,000,000 |
|
$ |
40 |
|
$ |
674,333 |
|
$ |
(142,986) |
|
$ |
(1,112) |
|
$ |
530,275 |
Balance June 12, 2021 (Successor) |
|
51,559,021 |
|
|
3 |
|
|
305,447 |
|
|
(200,423) |
|
|
— |
|
|
105,027 |
Issuance of shares, PIPE Investment |
|
53,000,000 |
|
|
5 |
|
|
608,161 |
|
|
— |
|
|
— |
|
|
608,166 |
Issuance of shares, Skillsoft Merger consideration |
|
28,500,000 |
|
|
3 |
|
|
306,372 |
|
|
— |
|
|
— |
|
|
306,375 |
Issuance of shares, Global Knowledge acquisition |
|
— |
|
|
— |
|
|
14,000 |
|
|
— |
|
|
— |
|
|
14,000 |
Reclassify Public Warrants to equity |
|
— |
|
|
— |
|
|
56,120 |
|
|
— |
|
|
— |
|
|
56,120 |
Reclassify Private Placement Warrants - CEO to equity |
|
— |
|
|
— |
|
|
2,800 |
|
|
— |
|
|
— |
|
|
2,800 |
Cash payout for fractional shares |
|
— |
|
|
— |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(1) |
Share-based compensation |
|
— |
|
|
— |
|
|
4,817 |
|
|
— |
|
|
— |
|
|
4,817 |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
906 |
|
|
906 |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(11,854) |
|
|
— |
|
|
(11,854) |
Balance July 31, 2021 (Successor) |
|
133,059,021 |
|
|
11 |
|
|
1,297,716 |
|
|
(212,277) |
|
|
906 |
|
|
1,086,356 |
Share-based compensation |
|
— |
|
|
— |
|
|
4,217 |
|
|
— |
|
|
— |
|
|
4,217 |
Common stock issued |
|
166,667 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Shares repurchased for tax withholding upon vesting of restricted stock-based awarded |
|
(61,162) |
|
|
— |
|
|
(614) |
|
|
— |
|
|
— |
|
|
(614) |
Translation adjustment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(772) |
|
|
(772) |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(42,855) |
|
|
— |
|
|
(42,855) |
Balance October 31, 2021 (Successor) |
|
133,164,526 |
|
$ |
11 |
|
$ |
1,301,319 |
|
$ |
(255,132) |
|
$ |
134 |
|
$ |
1,046,332 |
The accompanying notes are an integral part of these consolidated financial statements.
9
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||||||
|
|
Successor |
|
|
Predecessor (SL) |
|
Predecessor (SL) |
|
|
Predecessor (PL) | ||||
|
|
June 12, 2021 |
|
|
February 1, 2021 |
|
August 28, 2020 |
|
|
February 1, 2020 | ||||
|
|
through |
|
|
through |
|
through |
|
|
through | ||||
|
|
October 31, 2021 |
|
|
June 11, 2021 |
|
October 31, 2020 |
|
|
August 27, 2020 | ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(54,708) |
|
|
$ |
(49,264) |
|
$ |
(38,714) |
|
|
$ |
2,764,012 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
9,034 |
|
|
|
— |
|
|
— |
|
|
|
— |
Depreciation and amortization |
|
|
4,309 |
|
|
|
3,572 |
|
|
1,509 |
|
|
|
5,864 |
Amortization of intangible assets |
|
|
57,087 |
|
|
|
50,902 |
|
|
15,890 |
|
|
|
34,378 |
Change in bad debt reserve |
|
|
(668) |
|
|
|
(174) |
|
|
186 |
|
|
|
24 |
(Benefit from) provision for income taxes – non-cash |
|
|
(9,937) |
|
|
|
(5,886) |
|
|
(8,214) |
|
|
|
66,234 |
Non-cash interest expense |
|
|
913 |
|
|
|
487 |
|
|
143 |
|
|
|
2,407 |
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
332,376 |
Fair value adjustment to warrants |
|
|
19,723 |
|
|
|
(900) |
|
|
(2,900) |
|
|
|
— |
Right-of-use asset |
|
|
3,473 |
|
|
|
748 |
|
|
1,245 |
|
|
|
1,594 |
Non-cash reorganization items, net |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(3,353,326) |
Changes in current assets and liabilities, net of effects from acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(8,446) |
|
|
|
88,622 |
|
|
(24,396) |
|
|
|
116,478 |
Prepaid expenses and other current assets |
|
|
(5,002) |
|
|
|
1,828 |
|
|
(4,017) |
|
|
|
66 |
Accounts payable |
|
|
(1,636) |
|
|
|
(4,866) |
|
|
3,776 |
|
|
|
(7,909) |
Accrued expenses, including long-term |
|
|
13,962 |
|
|
|
(18,592) |
|
|
11,888 |
|
|
|
145,816 |
Lease liability |
|
|
(4,046) |
|
|
|
(1,301) |
|
|
(1,510) |
|
|
|
(2,332) |
Deferred revenue |
|
|
(24,599) |
|
|
|
(31,365) |
|
|
47,987 |
|
|
|
(101,765) |
Net cash (used in) provided by operating activities |
|
|
(541) |
|
|
|
33,811 |
|
|
2,873 |
|
|
|
3,917 |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(4,351) |
|
|
|
(641) |
|
|
(1,340) |
|
|
|
(3,105) |
Internally developed software - capitalized costs |
|
|
(2,293) |
|
|
|
(2,350) |
|
|
(908) |
|
|
|
(3,819) |
Acquisition of Global Knowledge, net of cash received |
|
|
(156,926) |
|
|
|
— |
|
|
— |
|
|
|
— |
Acquisition of Skillsoft, net of cash received |
|
|
(386,035) |
|
|
|
— |
|
|
— |
|
|
|
— |
Acquisition of Pluma, net of cash received |
|
|
(18,646) |
|
|
|
— |
|
|
— |
|
|
|
— |
Net cash used in investing activities |
|
|
(568,251) |
|
|
|
(2,991) |
|
|
(2,248) |
|
|
|
(6,924) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving line of credit, net of repayments |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
19,500 |
Borrowings under DIP Facility |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
60,000 |
Proceeds from Exit Facility borrowing |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
50,000 |
Debt issuance costs associated with DIP and Exit facilities |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(19,524) |
Shares repurchased for tax withholding upon vesting of restricted stock-based awarded |
|
|
(614) |
|
|
|
— |
|
|
— |
|
|
|
— |
Proceeds from equity investment (PIPE) |
|
|
530,000 |
|
|
|
— |
|
|
— |
|
|
|
— |
Proceeds from issuance of term loans, net of fees |
|
|
464,290 |
|
|
|
— |
|
|
— |
|
|
|
— |
Principal payments on capital lease obligation |
|
|
(407) |
|
|
|
(370) |
|
|
(162) |
|
|
|
(532) |
Proceeds from accounts receivable facility, net of borrowings |
|
|
(23,198) |
|
|
|
16,577 |
|
|
(28,909) |
|
|
|
(35,787) |
Repayment of First and Second Out loans |
|
|
(605,591) |
|
|
|
(1,300) |
|
|
— |
|
|
|
— |
Net cash provided by (used in) financing activities |
|
|
364,480 |
|
|
|
14,907 |
|
|
(29,071) |
|
|
|
73,657 |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(820) |
|
|
|
203 |
|
|
699 |
|
|
|
(2,139) |
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
|
(205,132) |
|
|
|
45,930 |
|
|
(27,747) |
|
|
|
68,511 |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
288,483 |
|
|
|
74,443 |
|
|
102,315 |
|
|
|
33,804 |
Cash, cash equivalents and restricted cash, end of period |
|
$ |
83,351 |
|
|
$ |
120,373 |
|
$ |
74,568 |
|
|
$ |
102,315 |
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
80,671 |
|
|
$ |
117,299 |
|
$ |
70,836 |
|
|
$ |
92,009 |
Restricted cash |
|
|
2,680 |
|
|
|
3,074 |
|
|
3,732 |
|
|
|
10,306 |
Cash, cash equivalents and restricted cash, end of period |
|
$ |
83,351 |
|
|
$ |
120,373 |
|
$ |
74,568 |
|
|
$ |
102,315 |
The accompanying notes are an integral part of these consolidated financial statements.
10
SKILLSOFT CORP.
UNAUDITED SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
(IN THOUSANDS)
|
|
Fiscal 2022 |
|
Fiscal 2021 | ||||||||||
|
|
Successor |
|
|
Predecessor (SL) |
|
Predecessor (SL) |
|
|
Predecessor (PL) | ||||
|
|
June 12, 2021 |
|
|
February 1, 2021 |
|
August 28, 2020 |
|
|
February 1, 2020 | ||||
|
|
through |
|
|
through |
|
through |
|
|
through | ||||
|
|
October 31, 2021 |
|
|
June 11, 2021 |
|
October 31, 2020 |
|
|
August 27, 2020 | ||||
Supplemental disclosure of cash flow information and non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
5,030 |
|
|
$ |
16,439 |
|
$ |
— |
|
|
$ |
— |
Cash paid for income taxes, net of refunds |
|
$ |
1,505 |
|
|
$ |
1,161 |
|
$ |
560 |
|
|
$ |
913 |
Unpaid capital expenditures |
|
$ |
123 |
|
|
$ |
39 |
|
$ |
140 |
|
|
$ |
1,039 |
Note issued to parent entity for paid in kind interest |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
160,000 |
Lease liabilities arising from right-of-use assets and tenant improvements recognized upon adoption of new accounting standard |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|