NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection with the preparation of a registration statement, which requires the inclusion of audited financial statements for the year ended December 31, 2021, Skillsoft’s management re-evaluated the Company’s application of Accounting Standards Codification Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) to its accounting classification of Class A Common Stock issued as part of the units sold in the Initial Public Offering. The Company had previously classified a portion of the Public Shares in permanent equity because, although the Company did not specify a maximum redemption threshold, the Company’s Amended and Restated Certificate of Incorporation provided that the Company would not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Based on such re-evaluation, Skillsoft’s management determined that, in accordance with the ASC 480, redemption provisions not solely within the control of the Company would require common stock subject to redemption to be classified outside of permanent equity and therefore all of the Public Shares subject to redemption should be classified outside of permanent equity. Skillsoft’s management has also determined that the shares of Class A Common Stock issued in connection with the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control.

Therefore, Skillsoft’s management has concluded that temporary equity should include all the shares of Class A Common Stock subject to possible redemption. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and has determined that the related impact was material to previously presented financial statements. As a result, Skillsoft’s management has noted a classification error related to temporary equity and permanent equity. These restatements result in a change in classification of Class A common stock, presenting the Class A common stock as common stock subject to possible redemption. The common stock subject to possible redemption was remeasured to adjust form carrying value to redemption value. Increases or decreases in the carry amount of common stock subject to possible redemption are affected by charges against additional paid-in capital (to the extent available), accumulated deficit and common stock.

There has been no change in the Company’s total assets, liabilities or operating results.

In connection with the correction in presentation for the Class A common stock subject to possible redemption, the Company’s income (loss) per common share was restated to allocate net income (loss) evenly to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company. There is no impact to the reported amounts for total assets, total liabilities, cash flows, or net income (loss).

The impact of the restatement on the Company’s financial statements is reflected in the following tables: