Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Discontinued Operations

Note 4 - Discontinued Operations
6 Months Ended
Jul. 31, 2023
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

(4)    Discontinued Operations


On June 12, 2022, Skillsoft entered into a Stock Purchase Agreement (the “Purchase Agreement”), by and among Skillsoft, Skillsoft (US) Corporation (“Seller”), Amber Holding Inc. (“SumTotal”), and Cornerstone OnDemand, Inc. (“Buyer”), pursuant to which, subject to the certain terms and conditions contained therein, Seller agreed to sell, and Buyer agreed to purchase, all of Seller’s right, title and interest in and to one hundred percent (100%) of the outstanding shares of capital stock of SumTotal. The sale was completed on August 15, 2022. Net proceeds from the sale were $174.9 million, after final working capital adjustments in April 2023.


In connection with the sale, the parties to the Purchase Agreement entered into certain other agreements, including a transition services agreement pursuant to which each of Seller and Buyer agreed to provide the other party with certain transition services for a limited period following the closing.


The Company determined that the sale of the SumTotal business met the criteria to be classified as discontinued operations, and its assets and liabilities held for sale, as of June 12, 2022. Accordingly, the Company classified the assets and liabilities of the discontinued operations as held for sale in its consolidated balance sheets at the lower of carrying amount or fair value less cost to sell. Classification for the assets and liabilities in comparative periods retained their previous classification as current or long-term. No losses were recognized upon classification of the discontinued operations' assets and liabilities as held for sale. Depreciation and amortization ceased on assets classified as held for sale. The operating results of SumTotal are reported as discontinued operations, for all periods presented, as the disposition reflects a strategic shift that has, or will have, a major effect on the Company’s operations and financial results.


The financial results of SumTotal are presented as Income from discontinued operations, net of tax in our condensed consolidated statements of operations. The following presents financial results of SumTotal for the three and six months ended July 31, 2022 in our condensed consolidated statements of operations (in thousands):



Three Months


Six Months






July 31, 2022


July 31, 2022




Total revenues

  $ 27,453     $ 56,528  

Operating expenses:


Costs of revenues

    8,152       17,776  

Content and software development

    4,849       11,289  

Selling and marketing

    5,385       10,707  

General and administrative

    289       663  

Amortization of intangible assets

    2,049       6,345  

Acquisition-related costs

    422       553  


    172       201  

Total operating expenses

    21,318       47,534  

Operating income from discontinued operations

    6,135       8,994  

Other income (expense), net

    507       458  

Interest income

    6       12  

Interest expense

    (576 )     (1,320 )

Income (loss) from discontinued operations before income taxes

    6,072       8,144  

Provision for (benefit from) income taxes

    255       852  

Net income (loss) from discontinued operations

  $ 5,817     $ 7,292  


In addition, the amounts described in other footnotes within these condensed consolidated financial statements have been updated to reflect the amounts applicable to continuing operations, unless otherwise noted.