Annual report pursuant to Section 13 and 15(d)

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

v3.22.2.2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
12 Months Ended
Dec. 31, 2020
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS  
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Amendment 1

The Company previously accounted for its outstanding Public Warrants (as defined in Note 4) and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. In addition, the Company did not account for its convertible promissory note and Prosus Agreement as derivative liabilities (the convertible promissory note, Prosus Agreement, together with the Warrants, the “Derivative Instruments”). The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of common shares, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Warrant Accounting Statement”). Specifically, the SEC Warrant Accounting Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the Derivative Instruments.

In further consideration of the SEC Warrant Accounting Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815‑40, Contracts in Entity’s Own Equity. ASC Section 815‑40‑15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815‑40‑15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC Section 815‑40‑15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded the tender offer provision included in the warrant agreement fails the “classified in shareholders’ equity” criteria as contemplated by ASC Section 815‑40‑25.

As a result of the above, the Company should have classified the Derivative Instruments as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the Derivative Instruments at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. See Notes 3, 6, 7, 8, 9, 10 and 11.

The Company’s accounting for the Derivative Instruments as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in the Trust Account, operating expenses, or cash.

The table below summarizes the effects of the restatement on the financial statements for all periods being restated:

 

 

 

 

 

 

 

 

 

 

 

 

    

As

    

 

 

    

 

 

 

 

Previously

 

As

 

 

 

 

 

Reported

 

Adjustments

 

Restated

Condensed Balance sheet as of September 30, 2019 (unaudited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

21,438,614

 

$

55,988,000

 

$

77,426,614

Class A Common Stock Subject to Possible Redemption

 

 

669,011,539

 

 

(55,988,000)

 

 

613,023,539

Class A Common Stock

 

 

233

 

 

558

 

 

791

Additional Paid-in Capital

 

 

2,491,696

 

 

19,003,076

 

 

21,494,772

Retained Earnings (Accumulated Deficit)

 

 

2,506,354

 

 

(19,003,634)

 

 

(16,497,280)

Total Stockholders’ Equity

 

 

5,000,008

 

 

 —

 

 

5,000,008

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,673,530

 

 

(5,579,751)

 

 

61,093,779

 

 

 

 

 

 

 

 

 

 

Balance sheet as of December 31, 2019 (audited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

21,638,123

 

$

56,360,000

 

$

77,998,123

Class A Common Stock Subject to Possible Redemption

 

 

671,198,229

 

 

(56,360,000)

 

 

614,838,229

Class A Common Stock

 

 

238

 

 

559

 

 

797

Additional Paid-in Capital

 

 

305,001

 

 

19,375,075

 

 

19,680,076

Retained Earnings (Accumulated Deficit)

 

 

4,693,042

 

 

(19,375,634)

 

 

(14,682,592)

Total Stockholders’ Equity

 

 

5,000,006

 

 

0.00

 

 

5,000,006

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,619,951

 

 

(5,594,026)

 

 

61,025,925

 

 

 

 

 

 

 

 

 

 

 

 

    

As

    

 

 

    

 

 

 

 

Previously

 

 

 

 

As

 

 

Reported

 

Adjustments

 

Restated

 

 

 

 

 

 

 

 

 

 

Condensed Balance sheet as of March 31, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

21,805,994

 

$

66,706,000

 

$

88,511,994

Class A Common Stock Subject to Possible Redemption

 

 

672,720,712

 

 

(66,706,000)

 

 

606,014,712

Class A Common Stock

 

 

240

 

 

660

 

 

900

Additional Paid-in Capital

 

 

 —

 

 

28,503,490

 

 

28,503,490

Retained Earnings (Accumulated Deficit)

 

 

4,998,044

 

 

(28,504,150)

 

 

(23,506,106)

Total Stockholders’ Equity

 

 

5,000,009

 

 

 —

 

 

5,000,009

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,602,417

 

 

(6,604,198)

 

 

59,998,219

 

 

 

 

 

 

 

 

 

 

Condensed Balance sheet as of June 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

21,739,976

 

$

111,342,000

 

$

133,081,976

Class A Common Stock Subject to Possible Redemption

 

 

672,594,363

 

 

(111,342,000)

 

 

561,252,363

Class A Common Stock

 

 

242

 

 

1,102

 

 

1,344

Additional Paid-in Capital

 

 

126,347

 

 

73,139,048

 

 

73,265,395

Retained Earnings (Accumulated Deficit)

 

 

4,871,691

 

 

(73,140,150)

 

 

(68,268,459)

Total Stockholders’ Equity

 

 

5,000,005

 

 

 —

 

 

5,000,005

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,584,915

 

 

(11,022,539)

 

 

55,562,376

 

 

 

 

 

 

 

 

 

 

Condensed Balance sheet as of September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

21,689,446

 

$

83,004,000

 

$

104,693,446

Class A Common Stock Subject to Possible Redemption

 

 

672,501,414

 

 

(83,004,000)

 

 

589,497,414

Class A Common Stock

 

 

244

 

 

821

 

 

1,065

Additional Paid-in Capital

 

 

219,294

 

 

44,801,329

 

 

45,020,623

Retained Earnings (Accumulated Deficit)

 

 

4,778,742

 

 

(44,802,150)

 

 

(40,023,408)

Total Stockholders’ Equity

 

 

5,000,005

 

 

 —

 

 

5,000,005

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,563,478

 

 

(8,215,648)

 

 

58,347,830

 

 

 

 

 

 

 

 

 

 

Balance sheet as of December 31, 2020 (audited)

 

 

  

 

 

  

 

 

  

Total Liabilities

 

$

23,602,761

 

$

129,943,549

 

$

153,546,310

Class A Common Stock Subject to Possible Redemption

 

 

672,322,591

 

 

(129,943,551)

 

 

542,379,040

Class A Common Stock

 

 

242

 

 

1,287

 

 

1,529

Additional Paid-in Capital

 

 

398,119

 

 

91,740,414

 

 

92,138,533

Retained Earnings (Accumulated Deficit)

 

 

4,599,922

 

 

(91,741,699)

 

 

(87,141,777)

Total Stockholders’ Equity

 

 

5,000,008

 

 

 2

 

 

5,000,010

 

 

 

 

 

 

 

 

 

 

Number of Class A common stock subject to redemption

 

 

66,580,981

 

 

(12,868,479)

 

 

53,712,502

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Changes in Stockholders' Equity for the three months ended September 30, 2019 (unaudited)

 

 

  

 

 

  

 

 

  

Sale of 69,000,000 Units, net of underwriting discount and offering expenses

    

$

655,680,193

    

$

(21,184,366)

    

$

634,495,827

Sale of 15,800,000 Private Placement Warrants

 

 

15,800,000

 

 

(15,800,000)

 

 

 —

Class A Common stock subject to possible redemption

 

 

(669,011,539)

 

 

55,988,000

 

 

(613,023,539)

Net income (loss)

 

 

2,507,354

 

 

(19,003,634)

 

 

(16,496,280)

 

 

 

 

 

 

 

 

 

 

Statements of Changes in Stockholders' Equity for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

 

 

 

 

 

 

 

 

Sale of 69,000,000 Units, net of underwriting discount and offering expenses

 

$

655,680,193

 

$

(21,184,366)

 

$

634,495,827

Sale of 15,800,000 Private Placement Warrants

 

 

15,800,000

 

 

(15,800,000)

 

 

 —

Class A Common stock subject to possible redemption

 

 

(669,011,539)

 

 

54,173,310

 

 

(614,838,229)

Net income (loss)

 

 

4,693,042

 

 

(19,375,634)

 

 

(14,682,592)

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Changes in Stockholders' Equity for the three months ended March 31, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

Class A Common stock subject to possible redemption

 

$

(1,522,483)

 

$

10,346,000

 

$

8,823,517

Net income (loss)

 

 

1,522,486

 

 

(10,346,000)

 

 

(8,823,514)

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Changes in Stockholders' Equity for the three months ended June 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

Class A Common stock subject to possible redemption

 

$

126,349

 

$

44,636,000

 

$

44,762,349

Net loss

 

 

(126,353)

 

 

(44,636,000)

 

 

(44,762,353)

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Changes in Stockholders' Equity for the three months ended September 30, 2020 (unaudited)

 

 

 

 

 

 

 

 

 

Class A Common stock subject to possible redemption

 

$

92,949

 

$

(28,338,000)

 

$

(28,245,051)

Net income (loss)

 

 

(92,949)

 

 

28,338,000

 

 

28,245,051

 

 

 

 

 

 

 

 

 

 

Statements of Changes in Stockholders' Equity for the year ended December 31, 2020 (audited)

 

 

 

 

 

 

 

 

 

Class A Common stock subject to possible redemption

 

$

(1,124,362)

 

$

73,583,551

 

$

72,459,189

Net income (loss)

 

 

1,124,364

 

 

(73,583,549)

 

 

(72,459,185)

 

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended September 30, 2019 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

    

$

2,507,354

    

$

(19,003,634)

    

$

(16,496,280)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,650,019

 

 

(3,811,000)

 

 

62,839,019

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.04

 

 

 —

 

 

0.04

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,549,981

 

 

3,769,576

 

 

23,319,557

Basic and diluted net loss per share, Non-redeemable common stock

 

 

0.00

 

 

(0.81)

 

 

(0.81)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the period from April 11, 2019 (inception) to September 30, 2019 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

2,506,354

 

$

(19,003,634)

 

$

(16,497,280)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,650,019

 

 

(3,811,000)

 

 

62,839,019

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.04

 

 

 —

 

 

0.04

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

17,433,711

 

 

2,016,285

 

 

19,449,996

Basic and diluted net loss per share, Non-redeemable common stock

 

 

0.00

 

 

(0.98)

 

 

(0.98)

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

4,693,042

 

$

(19,375,634)

 

$

(14,682,592)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,661,839

 

 

(4,700,208)

 

 

61,961,631

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.07

 

 

0.01

 

 

0.08

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

18,180,430

 

 

3,258,099

 

 

21,438,529

Basic and diluted net loss per share, Non-redeemable common stock

 

 

(0.01)

 

 

(0.90)

 

 

(0.91)

 

 

1

 

 

 

 

 

 

 

 

 

    

As

    

 

 

    

 

 

 

 

Previously

 

 

 

 

As

 

 

Reported

 

Adjustments

 

Restated

Condensed Statement of Operations for the three months ended March 31, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,522,486

 

$

(10,346,000)

 

$

(8,823,514)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,619,951

 

 

(5,594,026)

 

 

61,025,925

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.02

 

 

 —

 

 

0.02

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,630,049

 

 

5,594,026

 

 

25,224,075

Basic and diluted net loss per share, Non-redeemable common stock

 

 

0.00

 

 

(0.41)

 

 

(0.41)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended June 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net loss

 

$

(126,353)

 

$

(44,636,000)

 

$

(44,762,353)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,585,251

 

 

(6,587,032)

 

 

59,998,219

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.00

 

 

 —

 

 

0.00

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,664,749

 

 

6,587,032

 

 

26,251,781

Basic and diluted net loss per share, Non-redeemable common stock

 

 

(0.01)

 

 

(1.70)

 

 

(1.71)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the six months ended June 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,396,133

 

$

(54,982,000)

 

$

(53,585,867)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,602,601

 

 

(6,090,529)

 

 

60,512,072

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.02

 

 

0.01

 

 

0.03

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,647,399

 

 

6,090,529

 

 

25,737,928

Basic and diluted net loss per share, Non-redeemable common stock

 

 

(0.01)

 

 

(2.13)

 

 

(2.14)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

(92,949)

 

$

28,338,000

 

$

28,245,051

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,563,636

 

 

(11,001,260)

 

 

55,562,376

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.00

 

 

 —

 

 

0.00

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,686,364

 

 

11,001,260

 

 

30,687,624

Basic and diluted net loss per share, Non-redeemable common stock

 

 

0.00

 

 

0.92

 

 

0.92

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the nine months ended September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,303,184

 

$

(26,644,000)

 

$

(25,340,816)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,589,518

 

 

(7,739,388)

 

 

58,850,130

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.02

 

 

0.01

 

 

0.03

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,660,482

 

 

7,739,388

 

 

27,399,870

Basic and diluted net loss per share, Non-redeemable common stock

 

 

(0.02)

 

 

(0.96)

 

 

(0.98)

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations for the year ended December 31, 2020 (audited)

    

 

  

    

 

  

    

 

  

Net income (loss)

 

$

1,124,364

 

$

(73,583,549)

 

$

(72,459,185)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

 

 

66,592,589

 

 

(7,868,720)

 

 

58,723,869

Basic and diluted net income per share, Class A common stock subject to possible redemption

 

 

0.02

 

 

0.01

 

 

0.03

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

 

 

19,657,411

 

 

7,868,720

 

 

27,526,131

Basic and diluted net loss per share, Non-redeemable common stock

 

 

(0.02)

 

 

(2.67)

 

 

(2.68)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the period from April 11, 2019 (inception) to September 30, 2019 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

2,506,354

 

$

(19,003,634)

 

$

(16,497,280)

Transaction costs attributable to the Initial Public Offering

 

 

 —

 

 

(1,125,634)

 

 

(1,125,634)

Loss on derivative liabilities

 

 

 —

 

 

(17,878,000)

 

 

(17,878,000)

Initial classification of Class A common stock subject to redemption

 

 

666,500,190

 

 

(38,110,000)

 

 

628,390,190

Change in value of Class A common stock subject to possible redemption

 

 

2,511,349

 

 

(17,878,000)

 

 

(15,366,651)

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

4,693,042

 

$

(19,375,634)

 

$

(14,682,592)

Transaction costs attributable to the Initial Public Offering

 

 

 —

 

 

(1,125,634)

 

 

(1,125,634)

Loss on derivative liabilities

 

 

 —

 

 

(18,250,000)

 

 

(18,250,000)

Initial classification of Class A common stock subject to redemption

 

 

666,500,190

 

 

(38,110,000)

 

 

628,390,190

Change in value of Class A common stock subject to possible redemption

 

 

4,698,039

 

 

(18,250,000)

 

 

(13,551,961)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the three months ended March 31, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,522,486

 

$

(10,346,000)

 

$

(8,823,514)

Loss on derivative liabilities

 

 

 —

 

 

(10,346,000)

 

 

(10,346,000)

Change in value of Class A common stock subject to possible redemption

 

 

1,522,483

 

 

(10,346,000)

 

 

(8,823,517)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the six months ended June 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,396,133

 

$

(54,982,000)

 

$

(53,585,867)

Loss on derivative liabilities

 

 

 —

 

 

(54,982,000)

 

 

(54,982,000)

Change in value of Class A common stock subject to possible redemption

 

 

1,396,134

 

 

(54,982,000)

 

 

(53,585,866)

 

 

 

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the nine months ended September 30, 2020 (unaudited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,303,184

 

$

(26,644,000)

 

$

(25,340,816)

Loss on derivative liabilities

 

 

 —

 

 

(26,644,000)

 

 

(26,644,000)

Change in value of Class A common stock subject to possible redemption

 

 

1,303,185

 

 

(26,644,000)

 

 

(25,340,815)

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows for the year ended December 31, 2020 (audited)

 

 

  

 

 

  

 

 

  

Net income (loss)

 

$

1,124,364

 

$

(73,583,549)

 

$

(72,459,185)

Loss on derivative liabilities

 

 

 —

 

 

(73,583,549)

 

 

(73,583,549)

Change in value of Class A common stock subject to possible redemption

 

 

1,124,362

 

 

(73,583,551)

 

 

(72,459,189)

 

Amendment 2

In connection with the preparation of a registration statement and the requirement to include audited financial statements for the year ended December 31, 2021, Skillsoft’s management re-evaluated Churchill’s application of Accounting Standards Codification Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) to its accounting classification of the Class A Common Stock issued as part of the units sold in the Initial Public Offering. Churchill had previously classified a portion of the Public Shares in permanent equity because, although the Churchill did not specify a maximum redemption threshold, the Churchill’s Amended and Restated Certificate of Incorporation provides that Churchill will 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 Churchill 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 Churchill’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,” Skillsoft evaluated the error and has determined that the related impact was material to previously issued 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 Churchill’s total assets, liabilities or operating results.

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

 

 

 

 

 

 

 

 

 

    

As

    

 

    

 

 

 

Previously

 

 

 

 

 

 

Reported in

 

 

 

 

 

 

Form 10K

 

 

 

As

 

 

Amendment 1

 

Adjustments

 

Restated

 

 

 

 

 

 

 

Condensed Balance sheet as of September 30, 2019 (unaudited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

613,023,539

 

79,082,126

 

692,105,665

Class A Common Stock

 

791

 

(791)

 

 —

Additional Paid-in Capital

 

21,494,772

 

(21,494,772)

 

 —

Accumulated Deficit

 

(16,497,280)

 

(57,586,563)

 

(74,083,843)

Total Stockholders’ Equity (Deficit)

 

5,000,008

 

(79,082,126)

 

(74,082,118)

Number of Class A common stock subject to redemption

 

61,093,779

 

7,906,221

 

69,000,000

 

 

 

 

 

 

 

Balance sheet as of December 31, 2019 (audited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

614,838,229

 

80,089,074

 

694,927,303

Class A Common Stock

 

797

 

(797)

 

 —

Additional Paid-in Capital

 

19,680,076

 

(19,680,076)

 

 —

Accumulated Deficit

 

(14,682,592)

 

(60,408,201)

 

(75,090,793)

Total Stockholders’ Equity (Deficit)

 

5,000,006

 

(80,089,074)

 

(75,089,068)

Number of Class A common stock subject to redemption

 

61,025,925

 

7,974,075

 

69,000,000

 

 

 

 

 

 

 

Condensed Balance sheet as of March 31, 2020 (unaudited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

606,014,712

 

90,672,895

 

696,687,607

Class A Common Stock

 

900

 

(900)

 

 —

Additional Paid-in Capital

 

28,503,490

 

(28,503,490)

 

 —

Accumulated Deficit

 

(23,506,106)

 

(62,168,505)

 

(85,674,611)

Total Stockholders’ Equity (Deficit)

 

5,000,009

 

(90,672,895)

 

(85,672,886)

Number of Class A common stock subject to redemption

 

59,998,219

 

9,001,781

 

69,000,000

 

 

 

 

 

 

 

Condensed Balance sheet as of June 30, 2020 (unaudited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

561,252,363

 

135,487,504

 

696,739,867

Class A Common Stock

 

1,344

 

(1,344)

 

 —

Additional Paid-in Capital

 

73,265,395

 

(73,265,395)

 

 —

Accumulated Deficit

 

(68,268,459)

 

(62,220,765)

 

(130,489,224)

Total Stockholders’ Equity (Deficit)

 

5,000,005

 

(135,487,504)

 

(130,487,499)

Number of Class A common stock subject to redemption

 

55,562,376

 

13,437,624

 

69,000,000

 

 

 

 

 

 

 

Condensed Balance sheet as of September 30, 2020 (unaudited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

589,497,414

 

107,091,530

 

696,588,944

Class A Common Stock

 

1,065

 

(1,065)

 

 —

Additional Paid-in Capital

 

45,020,623

 

(45,020,623)

 

 —

Accumulated Deficit

 

(40,023,408)

 

(62,069,842)

 

(102,093,250)

Total Stockholders’ Equity (Deficit)

 

5,000,005

 

(107,091,530)

 

(102,091,525)

Number of Class A common stock subject to redemption

 

58,347,830

 

10,652,170

 

69,000,000

 

 

 

 

 

 

 

Balance sheet as of December 31, 2020 (audited)

 

  

 

  

 

  

Class A Common Stock Subject to Possible Redemption

 

542,379,040

 

154,119,491

 

696,498,531

Class A Common Stock

 

1,529

 

(1,529)

 

 —

Additional Paid-in Capital

 

92,138,533

 

(92,138,533)

 

 —

Accumulated Deficit

 

(87,141,777)

 

(61,979,429)

 

(149,121,206)

Total Stockholders’ Equity (Deficit)

 

5,000,010

 

(154,119,491)

 

(149,119,481)

Number of Class A common stock subject to redemption

 

53,712,502

 

15,287,498

 

69,000,000

 

 

 

 

 

 

 

 

Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended September 30, 2019 (unaudited)

    

  

    

  

    

  

Sale of 69,000,000 Units, net of underwriting discount and offering expenses

 

634,495,827

 

(634,495,827)

 

 —

Class A common stock subject to possible redemption

 

(613,023,539)

 

613,023,539

 

 —

Remeasurement for Class A common stock to redemption amount

 

 —

 

(57,586,563)

 

(57,586,563)

 

 

 

 

 

 

 

Statement of Changes in Stockholders’ Equity (Deficit) for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

  

 

  

 

  

Sale of 69,000,000 Units, net of underwriting discount and offering expenses

 

634,495,827

 

(634,495,827)

 

 —

Class A common stock subject to possible redemption

 

(614,838,229)

 

614,838,229

 

 —

Remeasurement for Class A common stock to redemption amount

 

 

 

(60,431,476)

 

(60,431,476)

 

 

 

 

 

 

 

Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended March 31, 2020 (unaudited)

 

  

 

  

 

  

Class A common stock subject to possible redemption

 

8,823,517

 

(8,823,517)

 

 —

Remeasurement for Class A common stock to redemption amount

 

 

 

(1,760,304)

 

(1,760,304)

 

 

 

 

 

 

 

Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended June 30, 2020 (unaudited)

 

  

 

  

 

  

Class A common stock subject to possible redemption

 

44,762,349

 

(44,762,349)

 

 —

Remeasurement for Class A common stock to redemption amount

 

 

 

(52,260)

 

(52,260)

 

 

 

 

 

 

 

Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended September 30, 2020 (unaudited)

 

  

 

  

 

  

Class A common stock subject to possible redemption

 

(28,245,051)

 

28,245,051

 

 —

Remeasurement for Class A common stock to redemption amount

 

 

 

150,923

 

150,923

 

 

 

 

 

 

 

Statement of Changes in Stockholders’ Equity (Deficit) for the year ended December 31, 2020 (audited)

 

  

 

  

 

  

Class A common stock subject to possible redemption

 

72,459,189

 

(72,459,189)

 

 

Remeasurement for Class A common stock to redemption amount

 

 

 

1,571,228

 

1,571,228

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the period from April 11, 2019 (inception) to September 30, 2019 (unaudited)

 

  

 

  

 

  

Initial classification of Class A common stock subject to redemption

 

628,390,190

 

63,715,475

 

692,105,665

Change in value of Class A common stock subject to possible redemption

 

(15,366,651)

 

17,472,316

 

2,105,665

 

 

 

 

 

 

 

Statement of Cash Flows for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

  

 

  

 

  

Initial classification of Class A common stock subject to redemption

 

628,390,190

 

63,415,475

 

692,105,665

Change in value of Class A common stock subject to possible redemption

 

(13,551,961)

 

16,373,959

 

2,821,638

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the three months ended March 31, 2020 (unaudited)

 

  

 

  

 

  

Change in value of Class A common stock subject to possible redemption

 

(8,823,517)

 

10,583,821

 

1,760,304

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the six months ended June 30, 2020 (unaudited)

 

  

 

  

 

  

Change in value of Class A common stock subject to possible redemption

 

(53,585,866)

 

55,397,930

 

1,812,564

 

 

 

 

 

 

 

Condensed Statement of Cash Flows for the nine months ended September 30, 2020 (unaudited)

 

  

 

  

 

  

Change in value of Class A common stock subject to possible redemption

 

(25,340,815)

 

27,002,456

 

1,661,641

 

 

 

 

 

 

 

Statement of Cash Flows for the year ended December 31, 2020 (audited)

 

  

 

  

 

  

Change in value of Class A common stock subject to possible redemption

 

(72,459,189)

 

74,030,417

 

1,571,228

 

In connection with the change in presentation for the Class A common stock subject to possible redemption, the Company also restated its income (loss) per common share calculated 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 this restatement on the Company’s financial statements is reflected in the following table:

 

 

 

 

 

 

 

 

 

    

As

    

 

    

 

 

 

Previously

 

 

 

 

 

 

Reported in

 

 

 

 

 

 

Form 10K

 

 

 

As

 

 

Amendment 1

 

Adjustments

 

Restated

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended September 30, 2019 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

62,839,019

 

5,410,981

 

68,250,000

Basic and diluted net income per share, Class A common stock

 

0.04

 

(0.23)

 

(0.19)

Basic and diluted weighted average shares outstanding, Class B common stock

 

23,319,557

 

(6,069,557)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(0.81)

 

0.62

 

(0.19)

 

 

 

 

 

 

 

Condensed Statement of Operations for the period from April 11, 2019 (inception) to September 30, 2019 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

62,839,019

 

(26,333,205)

 

36,505,814

Basic and diluted net income per share, Class A common stock

 

0.04

 

(0.35)

 

(0.31)

Basic and diluted weighted average shares outstanding, Class B common stock

 

19,449,996

 

(2,199,996)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(0.98)

 

0.67

 

(0.31)

 

 

 

 

 

 

 

Statement of Operations for the period from April 11, 2019 (inception) to December 31, 2019 (audited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

61,961,631

 

(14,132,086)

 

47,829,545

Basic and diluted net income per share, Class A common stock

 

0.08

 

(0.31)

 

(0.23)

Basic and diluted weighted average shares outstanding, Class B common stock

 

21,438,529

 

(4,188,529)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(0.91)

 

0.68

 

(0.23)

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended March 31, 2020 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

61,025,925

 

7,974,075

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

0.02

 

(0.12)

 

(0.10)

Basic and diluted weighted average shares outstanding, Class B common stock

 

25,224,075

 

(7,974,075)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(0.41)

 

0.31

 

(0.10)

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended June 30, 2020 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

59,998,219

 

9,001,781

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

 —

 

(0.52)

 

(0.52)

Basic and diluted weighted average shares outstanding, Class B common stock

 

26,251,781

 

(9,001,781)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(1.71)

 

1.19

 

(0.52)

 

 

 

 

 

 

 

 

Condensed Statement of Operations for the six months ended June 30, 2020 (unaudited)

    

  

    

  

    

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

60,512,072

 

8,487,928

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

0.03

 

(0.65)

 

(0.62)

Basic and diluted weighted average shares outstanding, Class B common stock

 

25,737,928

 

(8,487,928)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(2.14)

 

1.52

 

(0.62)

 

 

 

 

 

 

 

Condensed Statement of Operations for the three months ended September 30, 2020 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

55,562,376

 

13,437,624

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

 —

 

0.33

 

0.33

Basic and diluted weighted average shares outstanding, Class B common stock

 

30,687,624

 

(13,437,624)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

0.92

 

(0.59)

 

0.33

 

 

 

 

 

 

 

Condensed Statement of Operations for the nine months ended September 30, 2020 (unaudited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

58,850,130

 

10,149,870

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

0.03

 

(0.32)

 

(0.29)

Basic and diluted weighted average shares outstanding, Class B common stock

 

27,399,870

 

(10,149,870)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(0.98)

 

0.69

 

(0.29)

 

 

 

 

 

 

 

Statement of Operations for the year ended December 31, 2020 (audited)

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, Class A common stock

 

58,723,869

 

10,276,131

 

69,000,000

Basic and diluted net income per share, Class A common stock

 

0.03

 

(0.87)

 

(0.84)

Basic and diluted weighted average shares outstanding, Class B common stock

 

27,526,131

 

(10,276,131)

 

17,250,000

Basic and diluted net loss per share, Class B common stock

 

(2.68)

 

1.84

 

(0.84)