Business Wire | Sep 14, 2021 04:36PM EDT

Skillsoft Raises Full Year Guidance and Reports Strong Financial Results for the Second Quarter of Fiscal 2022

Sep. 14, 2021

BOSTON--(BUSINESS WIRE)--Sep. 14, 2021--Skillsoft Corp. (NYSE: SKIL) ("Skillsoft" or the "Company"), a global leader in corporate digital learning, today announced its financial results for the second quarter of fiscal 2022 ended July 31, 2021. The Company's results exceeded its expectations, and Skillsoft raised its bookings and adjusted revenue guidance for the full year.

"We are pleased with Skillsoft's strong performance during our initial quarter as a public company," said Jeffrey R. Tarr, Skillsoft's Chief Executive Officer. "We delivered double-digit bookings growth, won multiple new blue-chip customers, and acquired fast-growing digital coaching platform Pluma, enabling us to offer an on-demand, executive-quality leadership development solution to our customers, which include approximately 70% of the Fortune 1000."

Mr. Tarr added, "We see substantial opportunity to extend our leadership in the rapidly expanding and highly fragmented corporate learning industry as we innovate and invest in growth. Our new leadership team is executing well against our strategic priorities, and we are well-positioned to create significant value for our customers, shareholders and other stakeholders."

Fiscal 2022 Second Quarter Financial Highlights2

* Strong bookings growth across all three business segments, with Content up 9%, Global Knowledge up 30% and SumTotal up 15%; bookings in Content and Global Knowledge combined were up 19%, and total bookings were up 18%; * GAAP3 revenue for the reported period was $106 million and GAAP net loss was $49 million; * Adjusted revenue of $176 million grew 5% and adjusted EBITDA of $43 million grew 2%; * Combined Percipio and dual deployment dollar retention rate of 103% compared to 102%; and * Refinanced long-term debt, reducing annual cash interest expense by approximately $25 million.

Updated Full Year Fiscal 2022 Outlook

Updated Outlook Previous Outlook

Bookings $690 million to $710 million $660 million to $690 million

Adjusted Revenue $670 million to $690 million $645 million to $675 million

Adjusted EBITDA Unchanged $155 million to $175 million



1 Bookings is identical to what the Company previously referred to as "order intake" and includes (i) subscription renewals, upgrades, churn, and downgrades to existing customers, (ii) non-subscription services, and (iii) sales to new customers. Bookings generally represents a customer's annual obligation (versus the life of the contract), and, for the subscription business, revenue is recognized for such bookings over the following 12 months.

2 Growth calculated as if pre-combination Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31, 2021.

3 GAAP results include the periods from May 1, 2021 to June 11, 2021 (predecessor) and June 12, 2021 to July 31, 2021 (successor) and reflect the impact of business combination accounting on revenue.

Skillsoft increased its bookings and adjusted revenue outlook for full year fiscal 2022 primarily to reflect better than expected performance in the first half of the year.

The unchanged adjusted EBITDA outlook reflects the Company's growth investments in content, platform and go-to-market capabilities. Additionally, the Company experienced a delay in realizing business combination synergies due to the timing of transaction close and higher than anticipated D&O insurance costs.

Key Operational Metrics and Non-GAAP Financial Measures

Bookings (previously Order Intake)

The following table sets forth unaudited bookings for the three and six months ended July 31, 2021 and 2020 as if pre-combination Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31:

Bookings (previouslyOrder Intake) Three Months Six Months$000s Ended July 31, Change Ended July 31, Change 2021 2020 $ % 2021 2020 $ %

Content and GlobalKnowledgePercipio $15,423 $10,465 $4,958 47% $32,534 $20,582 $11,952 58%

Dual 31,827 26,734 5,093 19% 41,696 39,409 2,287 6%DeploymentSkillport 12,730 18,160 (5,430) -30% 22,048 32,072 (10,024) -31%

Total $59,980 $55,359 $4,621 8% $96,278 $92,063 $4,215 5%SubscriptionServices and 3,716 3,206 510 16% 6,288 5,011 1,276 25%One-TimeOrdersTotal $63,696 $58,565 5,131 9% $102,565 $97,075 5,490 6%ContentGlobal 63,541 48,769 14,772 30% 128,798 105,806 22,992 22%KnowledgeTotal Content $127,237 $107,334 $19,903 19% $231,363 $202,881 $28,482 14%+ GlobalKnowledge SumTotalSubscription $21,308 $19,606 $1,702 9% $42,081 $46,457 ($4,376) -9%

Services and 6,150 4,313 1,837 43% 10,801 9,614 1,187 12%One-TimeOrdersTotal $27,458 $23,919 $3,539 15% $52,882 $56,071 ($3,189) -6%SumTotal Total $154,695 $131,253 $23,442 18% $284,245 $258,952 $25,293 10%

Dollar Retention Rate

The following table sets forth dollar retention rates ("DRR") for the last twelve month ("LTM") period ended July 31, 2021 and for the three month periods ended July 31, 2021 and 2020 as if Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31:

July 31

LTM 2021 2020



Percipio 99% 99% 102%

Dual Deployment 102% 104% 102%

Percipio + Dual Deployment 101% 103% 102%

Skillport 78% 88% 68%

Total Content Business 95% 99% 88%

SumTotal Business 96% 99% 79%

Capital Structure

The following table sets forth Skillsoft's cash and cash equivalents and long-term debt as of July 31, 2021:



$000s July 31,

2021

Assets

Cash and Equivalents $90,772



Liabilities

Long-Term Debt $467,399

(including current portion)

Weighted average shares outstanding during the period from June 12, 2021 to July 31, 2021 were 133,059,021.

Webcast and Conference Call Information

Skillsoft will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss its financial results. To access the call, dial (877) 413-9278 from the United States and Canada or (215) 268-9914 from international locations. The live event can be accessed from the Investor Relations section of Skillsoft's website at investor.skillsoft.com. A replay will be available for six months.

About Skillsoft

Skillsoft (NYSE: SKIL) is a global leader in corporate digital learning, focused on transforming today's workforce for tomorrow's economy. The Company provides enterprise learning solutions designed to prepare organizations for the future of work, overcome critical skill gaps, drive demonstrable behavior-change, and unlock the potential in their people. Skillsoft offers a comprehensive suite of premium, original, and authorized partner content, including one of the broadest and deepest libraries of leadership & business skills, technology & developer, and compliance curricula. With access to a broad spectrum of learning options (including video, audio, books, bootcamps, live events, and practice labs), organizations can meaningfully increase learner engagement and retention. Skillsoft's offerings are delivered through Percipio, its award-winning, AI-driven, immersive learning platform purpose built to make learning easier, more accessible, and more effective. Learn more at www.skillsoft.com.

NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE METRICS

We track several non-GAAP financial measures and key performance metrics that we believe are key financial measures of our success. Non-GAAP measures and key performance metrics are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures and key performance metrics when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of U.S. GAAP financial disclosures. For example, a company with higher U.S. GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, excluding the effects of interest income and expense moderates the impact of a company's capital structure on its performance. However, non-GAAP measures and key performance metrics have limitations as analytical tools. Because not all companies use identical calculations, our presentation of non-GAAP financial measures and key performance metrics may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with U.S. GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. As a result, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.

We do not reconcile our forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information. We provide non-GAAP financial measures that we believe will be achieved, however we cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.

Forward Looking Statements

This document 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," "projects," "forecasts," "seeks," "outlook," "target," goals," "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 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; * the effects of pending and future legislation; * 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 successfully defend ourselves in legal proceedings; * our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting; 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 Churchill Capital Corp. II's Annual Report on Form 10-K/A for the year ended December 31, 2020 in Part I, Item 1A and in the registration statement on Form S-4 filed by Churchill Capital Corp. II and declared effective by the Securities and Exchange Commission (the "SEC") on May 27, 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 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.

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(IN THOUSANDS, EXCEPT NUMBER OF SHARES) Successor Predecessor (SLH) July 31, January 31, 2021 2021ASSETSCurrent assets:Cash and cash equivalents $ 90,772 $ 71,479

Restricted cash 14,742 2,964

Accounts receivable, less reserves of approximately 120,980 179,784$2,662 and $294 as of July 31, 2021 and January 31,2021, respectivelyPrepaid expenses and other current assets 48,584 30,326

Total current assets 275,078 284,553

Property and equipment, net 15,055 13,780

Goodwill 761,177 495,004

Intangible assets, net 946,731 728,633

Right of use assets 24,578 15,131

Deferred tax asset 3,710 --

Other assets 8,092 8,636

Total assets $ 2,034,421 $ 1,545,737

LIABILITIES AND SHAREHOLDER'S EQUITYCurrent liabilities:Current maturities of long-term debt $ 3,600 $ 5,200

Borrowings under accounts receivable facility 24,822 17,022

Accounts payable 34,514 7,425

Accrued compensation 41,097 36,375

Accrued expenses and other current liabilities 62,473 23,125

Lease liabilities 9,662 4,740

Deferred revenue 165,900 257,549

Total current liabilities 342,068 351,436

Long-term debt 463,799 510,236

Warrant liabilities 28,525 900

Deferred tax liabilities 116,462 81,008

Long term lease liabilities 16,098 13,155

Deferred revenue - non-current 1,749 3,035

Other long-term liabilities 5,045 5,998

Total long-term liabilities 631,678 614,332

Commitments and contingencies - -

Shareholders' equity :(Predecessor SLH) Shareholders' common stock- ClassA and Class B common shares, $0.01 par value:1,000,000,000 shares authorized (800,000,000 Class - 40A, 200,000,000 Class B) at January 31, 2021;4,000,000 shares issued and outstanding (3,840,000Class A, 160,000 Class B) at January 31, 2021(Successor) Shareholders' common stock- Class Acommon shares, $0.0001 par value: 375,000,000 shares 11 -authorized and 133,059,021 shares issued andoutstanding at July 31, 2021Additional paid-in capital 1,297,716 674,333

Accumulated deficit (237,958) (93,722)

Accumulated other comprehensive income (loss) 906 (682)

Total shareholders' equity 1,060,675 579,969

Total liabilities and shareholders' equity $ 2,034,421 $ 1,545,737

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)SuccessorPredecessor (SLH)Predecessor (PL)FromFromFromJune 12, 2021to July 31, 2021May 1, 2021 toJune 11, 2021February 1,2021 to June11, 2021Three monthsended July 31, 2020Six months endedJuly 31, 2020Revenues:Total revenues$57,912

47,935

139,636

116,835

235,164

Operating expenses:Cost of revenues28,006

11,360

35,881

21,618

45,831

Content and software development9,878

7,477

24,084

16,835

33,778

Selling and marketing22,234

13,438

41,940

34,033

66,769

General and administrative17,073

4,855

17,217

15,324

32,015

Amortization of intangible assets20,023

15,959

50,902

12,779

30,148

Impairment of goodwill and intangible assets-

-

-

-

332,376

Recapitalization and transaction-related costs9,995

5,006

6,938

16,659

32,035

Restructuring316

(1,240

)

(703

)

771

1,141

Total operating expenses107,525

56,855

176,259

118,019

574,093

Operating loss(49,613

)

(8,920

)

(36,623

)

(1,184

)

(338,929

)

Other (expense) income, net(697

)

(41

)

(493

)

898

1,809

Fair value adjustment of warrants17,115

800

900

-

-

Interest income12

54

64

65

84

Interest expense, net(9,856

)

(5,371

)

(16,820

)

(61,076

)

(167,054

)

Reorganization items, net-

-

-

(10,593

)

(10,593

)

Loss before benefit from income taxes(43,039

)

(13,478

)

(52,972

)

(71,890

)

(514,683

)

Benefit from income taxes(5,504

)

(1,619

)

(3,708

)

(909

)

(9,800

)

Net loss$(37,535

)

(11,859

)

(49,264

)

(70,981

)

(504,883

)

Loss per share:Ordinary - Basic and Diluted (Predecessor (PL))***$(709.10

)

$(5,043.79

)

Class A and B - Basic and Diluted (Predecessor (SLH))*$(2.96

)

$(12.32

)

**Ordinary - Basic and Diluted (Successor)$(0.28

)

****Weighted average common share outstanding:Ordinary - Basic and Diluted (Predecessor (PL))***100.1

100.1

Class A and B - Basic and Diluted (Predecessor (SLH))*4,000

4,000

**Ordinary - Basic and Diluted (Successor)133,059

*****Not applicableSKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Successor Predecessor (SLH) Predecessor (PL) From From From June 12, May 1, February Three Six months 2021 2021 to 1, months ended to July June 11, 2021 to ended July 31, 31, 2021 2021 June July 31, 2020 11, 2021 2020Revenues:Total revenues $ 57,912 47,935 139,636 116,835 235,164

Operating expenses:Cost of revenues 28,006 11,360 35,881 21,618 45,831

Content and 9,878 7,477 24,084 16,835 33,778 softwaredevelopmentSelling and 22,234 13,438 41,940 34,033 66,769 marketingGeneral and 17,073 4,855 17,217 15,324 32,015 administrativeAmortization of 20,023 15,959 50,902 12,779 30,148 intangible assetsImpairment of - - - - 332,376 goodwill andintangible assetsRecapitalizationand 9,995 5,006 6,938 16,659 32,035 transaction-relatedcostsRestructuring 316 (1,240 ) (703 ) 771 1,141

Total operating 107,525 56,855 176,259 118,019 574,093 expensesOperating loss (49,613 ) (8,920 ) (36,623 ) (1,184 ) (338,929 )

Other (expense) (697 ) (41 ) (493 ) 898 1,809 income, netFair value 17,115 800 900 - - adjustment ofwarrantsInterest income 12 54 64 65 84

Interest expense, (9,856 ) (5,371 ) (16,820 ) (61,076 ) (167,054 )netReorganization - - - (10,593 ) (10,593 )items, netLoss before benefit (43,039 ) (13,478 ) (52,972 ) (71,890 ) (514,683 )from income taxesBenefit from income (5,504 ) (1,619 ) (3,708 ) (909 ) (9,800 )taxesNet loss $ (37,535 ) (11,859 ) (49,264 ) (70,981 ) (504,883 )

Loss per share:Ordinary - Basic (709.10 ) (5,043.79 )and Diluted * * * $ $(Predecessor (PL))Class A and B - (2.96 ) (12.32 )Basic and Diluted * $ $ * *(Predecessor (SLH))Ordinary - Basic (0.28 )and Diluted $ * * * *(Successor)Weighted averagecommon shareoutstanding:Ordinary - Basic 100.1 100.1 and Diluted * * *(Predecessor (PL))Class A and B - 4,000 4,000 Basic and Diluted * * *(Predecessor (SLH))Ordinary - Basic 133,059 and Diluted * * * *(Successor) *Not applicable SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS)SuccessorPredecessor (SLH)Predecessor (PL)FromFromJune 12, 2021 toJuly 31, 2021February 1, 2021 toJune 11, 2021Six months endedJuly 31, 2020Cash flows from operating activities:Net loss$(37,535)

$(49,264)

$(504,883)

Adjustments to reconcile net loss to net cash provided by operating activities:Share-based compensation4,817

-

-

Depreciation1,705

3,572

5,120

Amortization of intangible assets20,023

50,902

30,148

Change in bad debt reserve(170)

(174)

19

Provision for (benefit from) income taxes - non-cash(6,180)

(5,886)

(11,478)

Non-cash interest expense434

487

2,829

Impairment of goodwill and intangible assets-

-

332,376

Right-of-use assets amortizations1,445

748

1,435

Fair value adjustment to warrants(17,115)

(900)

-

Non-cash reorganization items, net-

-

4,818

Changes in current assets and liabilities, net of effects from acquisitions:Accounts receivable6,963

88,622

93,124

Prepaid expenses and other assets(13,065)

3,379

(9,265)

Accounts payable5,175

(6,417)

(5,520)

Accrued expenses and non-current liabilities18,026

(18,592)

159,565

Lease liability(1,690)

(1,301)

(1,942)

Deferred revenue17,905

(31,365)

(84,773)

Net cash provided by operating activities738

33,811

11,573

Cash flows from investing activities:Purchases of property and equipment(75)

(641)

(2,985)

Internal use software development costs(881)

(2,350)

(3,401)

Acquisition of Skillsoft, net of cash received(386,035)

-

-

Acquisition of Global Knowledge, net of cash received(156,926)

-

-

Acquisition of Pluma, net of cash received(18,646)

-

-

Net cash used in investing activities(562,563)

(2,991)

(6,386)

Cash flows from financing activities:Borrowings under revolving line of credit, net of repayments-

-

19,500

Borrowings under DIP Facility-

-

60,000

Proceeds from issuance of Term Loan, net of fees464,290

-

-

Proceeds from equity investment (PIPE)530,000

-

-

Principal repayments of capital lease obligations(137)

(370)

(430)

Repayments of accounts receivable facility, net of borrowings(9,456)

16,577

(19,270)

Repayments of First and Second Out loans(605,591)

(1,300)

-

Net cash provided by financing activities379,106

14,907

59,800

Effect of exchange rate changes on cash and cash equivalents(250)

203

(2,264)

Net (decrease) increase in cash, cash equivalents and restricted cash(182,969)

45,930

62,723

Cash, cash equivalents and restricted cash, beginning of period288,483

74,443

33,804

Cash, cash equivalents and restricted cash, end of period$105,514

$120,373

$96,527

Key Performance Metrics

We use key performance metrics to help us evaluate our performance and make strategic decisions. Additionally, we believe these metrics are useful as a supplement to investors in evaluating the Company's ongoing operational performance and trends. These key performance metrics are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled metrics presented by other companies.

Annualized Recurring Revenue ("ARR")

ARR represents the annualized recurring value of all active subscription contracts at the end of a reporting period. We believe ARR is useful for assessing the performance of our recurring subscription revenue base and identifying trends affecting our business.

Dollar Retention Rate ("DRR")

For existing customers at the beginning of a given period, DRR represents subscription renewals, upgrades, churn, and downgrades in such period divided by the beginning total renewable base for such customers for such period. Renewals reflect customers who renew their subscription, inclusive of auto-renewals for multi-year contracts, while churn reflects customers who choose to not renew their subscription. Upgrades include orders from customers that purchase additional licenses or content (e.g., a new Leadership and Business module), while downgrades reflect customers electing to decrease the number of licenses or reduce the size of their content package. Upgrades and downgrades also reflect changes in pricing. We use our DRR to measure the long-term value of customer contracts as well as our ability to retain and expand the revenue generated from our existing customers.

Bookings

Bookings (previously referred to as order intake) in any particular period represents orders received during that period and reflects (i) subscription renewals, upgrades, churn, and downgrades to existing customers, (ii) non- subscription services, and (iii) sales to new customers. Bookings generally represents a customer's annual obligation (versus the life of the contract), and, for the subscription business, revenue is recognized for such bookings over the following 12 months. We use bookings to measure and monitor current period business activity with respect to our ability to sell subscriptions and services to our platform

SKILLSOFT CORP

KEY OPERATING METRICS

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS) Successor Predecessor Predecessor (SLH) (PL) From From June 12, February 1, Six months 2021 to 2021 to ended July 31, June 11, July 31, 2021 2021 2020Cash flows from operating activities:Net loss $ (37,535) $ (49,264) $ (504,883)

Adjustments to reconcile net loss tonet cash provided by operatingactivities:Share-based compensation 4,817 - -

Depreciation 1,705 3,572 5,120

Amortization of intangible assets 20,023 50,902 30,148

Change in bad debt reserve (170) (174) 19

Provision for (benefit from) income (6,180) (5,886) (11,478)taxes - non-cashNon-cash interest expense 434 487 2,829

Impairment of goodwill and intangible - - 332,376assetsRight-of-use assets amortizations 1,445 748 1,435

Fair value adjustment to warrants (17,115) (900) -

Non-cash reorganization items, net - - 4,818

Changes in current assets andliabilities, net of effects fromacquisitions:Accounts receivable 6,963 88,622 93,124

Prepaid expenses and other assets (13,065) 3,379 (9,265)

Accounts payable 5,175 (6,417) (5,520)

Accrued expenses and non-current 18,026 (18,592) 159,565liabilitiesLease liability (1,690) (1,301) (1,942)

Deferred revenue 17,905 (31,365) (84,773)

Net cash provided by operating 738 33,811 11,573activitiesCash flows from investing activities:Purchases of property and equipment (75) (641) (2,985)

Internal use software development (881) (2,350) (3,401)costsAcquisition of Skillsoft, net of cash (386,035) - -receivedAcquisition of Global Knowledge, net (156,926) - -of cash receivedAcquisition of Pluma, net of cash (18,646) - -receivedNet cash used in investing activities (562,563) (2,991) (6,386)

Cash flows from financing activities:Borrowings under revolving line of - - 19,500credit, net of repaymentsBorrowings under DIP Facility - - 60,000

Proceeds from issuance of Term Loan, 464,290 - -net of feesProceeds from equity investment 530,000 - -(PIPE)Principal repayments of capital lease (137) (370) (430)obligationsRepayments of accounts receivable (9,456) 16,577 (19,270)facility, net of borrowingsRepayments of First and Second Out (605,591) (1,300) -loansNet cash provided by financing 379,106 14,907 59,800activitiesEffect of exchange rate changes on (250) 203 (2,264)cash and cash equivalentsNet (decrease) increase in cash, cash (182,969) 45,930 62,723equivalents and restricted cashCash, cash equivalents and restricted 288,483 74,443 33,804cash, beginning of periodCash, cash equivalents and restricted $ 105,514 $ 120,373 $ 96,527cash, end of period Key Performance Metrics

We use key performance metrics to help us evaluate our performance and make strategic decisions. Additionally, we believe these metrics are useful as a supplement to investors in evaluating the Company's ongoing operational performance and trends. These key performance metrics are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled metrics presented by other companies.

Annualized Recurring Revenue ("ARR")

ARR represents the annualized recurring value of all active subscription contracts at the end of a reporting period. We believe ARR is useful for assessing the performance of our recurring subscription revenue base and identifying trends affecting our business.

Dollar Retention Rate ("DRR")

For existing customers at the beginning of a given period, DRR represents subscription renewals, upgrades, churn, and downgrades in such period divided by the beginning total renewable base for such customers for such period. Renewals reflect customers who renew their subscription, inclusive of auto-renewals for multi-year contracts, while churn reflects customers who choose to not renew their subscription. Upgrades include orders from customers that purchase additional licenses or content (e.g., a new Leadership and Business module), while downgrades reflect customers electing to decrease the number of licenses or reduce the size of their content package. Upgrades and downgrades also reflect changes in pricing. We use our DRR to measure the long-term value of customer contracts as well as our ability to retain and expand the revenue generated from our existing customers.

Bookings

Bookings (previously referred to as order intake) in any particular period represents orders received during that period and reflects (i) subscription renewals, upgrades, churn, and downgrades to existing customers, (ii) non- subscription services, and (iii) sales to new customers. Bookings generally represents a customer's annual obligation (versus the life of the contract), and, for the subscription business, revenue is recognized for such bookings over the following 12 months. We use bookings to measure and monitor current period business activity with respect to our ability to sell subscriptions and services to our platform

SKILLSOFT CORP

KEY OPERATING METRICS

Bookings Three Months Six Months(in thousands) Ended July 31, Ended July 31, 2021 2020 2021 2020

Content and Global KnowledgePercipio $15,423 $10,465 $32,534 $20,582

Dual Deployment 31,827 26,734 41,696 39,409

Skillport 12,730 18,160 22,048 32,072

Total Subscription $59,980 $55,359 $96,278 $92,063

Services and One-Time Orders 3,716 3,206 6,288 5,011

Total Content $63,696 $58,565 $102,565 $97,075

Global Knowledge 63,541 48,769 128,798 105,806

Total Content and Global Knowledge $127,237 $107,334 $231,363 $202,881

SumTotal BusinessSubscription $21,308 $19,606 $42,081 $46,457

Services and One-Time Orders 6,150 4,313 10,801 9,614

Total SumTotal $27,458 $23,919 $52,882 $56,071

Total Bookings $154,695 $131,253 $284,245 $258,952

Annualized Recurring Revenue(in thousands)July 31,January 31,2021

2021

Content and Global KnowledgePercipio$84,185

$75,802

Dual Deployment173,256

161,327

Skillport60,282

80,245

Total Content$317,723

$317,374

Global Knowledge15,273

10,504

Total Content and Global Knowledge$332,996

$327,878

SumTotal96,020

99,148

Total Annualized Recurring Revenue$429,016

$427,026

Annualized Recurring Revenue (in thousands) July 31, January 31, 2021 2021

Content and Global KnowledgePercipio $84,185 $75,802

Dual Deployment 173,256 161,327

Skillport 60,282 80,245

Total Content $317,723 $317,374

Global Knowledge 15,273 10,504

Total Content and Global Knowledge $332,996 $327,878

SumTotal 96,020 99,148

Total Annualized Recurring Revenue $429,016 $427,026

Dollar Retention RateJuly 31LTM2021

2020

Percipio99%

99%

102%

Dual Deployment102%

104%

102%

Percipio + Dual Deployment101%

103%

102%

Skillport78%

88%

68%

Total Content Business95%

99%

88%

SumTotal Business96%

99%

79%

Dollar Retention Rate July 31 LTM 2021 2020

Percipio 99% 99% 102%

Dual Deployment 102% 104% 102%

Percipio + Dual Deployment 101% 103% 102%

Skillport 78% 88% 68%

Total Content Business 95% 99% 88%

SumTotal Business 96% 99% 79%

Non-GAAP Financial Measures - Adjusted Revenue

SKILLSOFT CORP

RECONCILIATION OF NON-GAAP FINANICAL MEASURES

(in thousands)

(Unaudited)

Skillsoft and Global Knowledge CombinedThree MonthsEnded July 31,Six MonthsEnded July 31,2021

2020

2021

2020

ConsolidatedAdjusted subscription revenue$

104,628

$

107,874

$

205,976

$

215,162

Adjusted non-subscription revenue10,883

10,561

21,011

21,611

Adjusted Global Knowledge revenue60,976

49,811

115,742

111,216

Total Consolidated adjusted revenue176,487

168,246

342,729

347,989

Content BusinessAdjusted subscription revenue80,428

81,860

157,950

162,287

Adjusted non-subscription revenue4,015

3,827

8,178

7,727

Total Content Business adjusted revenue84,443

85,687

166,128

170,014

Global Knowledge BusinessVirtual and on-demand50,836

40,447

97,563

72,400

Classroom and all other10,140

9,364

18,179

38,816

Total Global Knowledge adjusted revenue60,976

49,811

115,742

111,216

SumTotal BusinessAdjusted subscription revenue24,200

26,014

48,026

52,875

Adjusted non-subscription revenue6,868

6,734

12,833

13,884

Total SumTotal adjusted revenue$

31,068

$

32,748

$

60,859

$

66,759

Non-GAAP Financial Measures - Adjusted Revenue



SKILLSOFT CORP

RECONCILIATION OF NON-GAAP FINANICAL MEASURES

(in thousands)

(Unaudited)



Skillsoft and Global Knowledge Combined Three Months Six Months Ended July 31, Ended July 31, 2021 2020 2021 2020

Consolidated Adjusted subscription revenue $ 104,628 $ 107,874 $ 205,976 $ 215,162

Adjusted non-subscription revenue 10,883 10,561 21,011 21,611

Adjusted Global Knowledge revenue 60,976 49,811 115,742 111,216

Total Consolidated adjusted 176,487 168,246 342,729 347,989 revenue Content Business Adjusted subscription revenue 80,428 81,860 157,950 162,287

Adjusted non-subscription revenue 4,015 3,827 8,178 7,727

Total Content Business adjusted 84,443 85,687 166,128 170,014 revenue Global Knowledge Business Virtual and on-demand 50,836 40,447 97,563 72,400

Classroom and all other 10,140 9,364 18,179 38,816

Total Global Knowledge adjusted 60,976 49,811 115,742 111,216 revenue SumTotal Business Adjusted subscription revenue 24,200 26,014 48,026 52,875

Adjusted non-subscription revenue 6,868 6,734 12,833 13,884

Total SumTotal adjusted revenue $ 31,068 $ 32,748 $ 60,859 $ 66,759

For the Three Months Ended July 31, 2021For thePeriod from5/1/21 to 6/11/21For thePeriod from5/1/21 to 6/11/21For thePeriod from6/12/21 to 7/31/21Non-GAAP Revenue Adjustments (1)Global KnowledgeSkillsoftSkillsoft (2)CombinedRevenues:Total revenues$ 25,255

$ 47,935

$ 57,912

$ 45,385

$ 176,487

Operating expensesCost of revenues11,836

11,360

28,006

6,468

57,670

Content and software development258

7,477

9,878

-

17,613

Selling and marketing5,398

13,438

22,234

-

41,070

General and administrative10,765

4,855

17,073

-

32,693

Amortization of intangible assets1,063

15,959

20,023

-

37,045

Recapitalization and transaction-related costs5,006

9,995

-

15,001

Restructuring146

(1,240)

316

-

(778)

Total operating expenses29,466

56,855

107,525

6,468

200,314

Operating loss:$ (4,212)

$ (8,920)

$ (49,613)

$ 38,917

$ (23,828)

Other income (expense), net(852)

759

16,418

-

16,325

Interest income54

12

-

66

Interest expense(1,901)

(5,371)

(9,856)

-

(17,128)

Reorganization items, net-

-

-

Loss before provision for (benefit from) income taxes(6,965)

(13,478)

(43,039)

38,917

(24,565)

Provision for (benefit from) income taxes481

(1,619)

(5,504)

-

(6,642)

Net loss$ (7,446)

$ (11,859)

$ (37,535)

$ 38,917

$ (17,923)

EBITDA ComputationInterest expense, net$ 1,901

$ 5,317

$ 9,844

$ -

$ 17,062

Provision for (benefit from) income taxes481

(1,619)

(5,504)

-

(6,642)

Depreciation and amortization1,530

17,112

21,728

-

40,370

Impairment of goodwill and intangible assets-

-

-

-

EBITDA(3,534)

8,951

(11,467)

38,917

32,867

Adjusted EBITDA ComputationPlus: Non-recurring retention and consulting costs28

446

15

-

489

Plus: Recapitalization and transaction-related costs7,469

5,006

9,995

-

22,470

Plus: Restructuring and contract terminations266

(1,240)

316

-

(658)

Plus: Integration and migration related-

381

500

-

881

Plus: Foreign currency and other non-cash expense632

(37)

(16,677)

-

(16,082)

Plus: Impact of fresh-start and purchase accounting-

5,374

32,485

(38,917)

(1,058)

Plus: Stock-based compensation expense-

4,817

-

4,817

Plus: Other add backs49

(722)

259

-

(414)

Adjusted EBITDA$ 4,910

$ 18,159

$ 20,243

$ -

$ 43,312

For the Three Months Ended July 31, 2021

For the For the For the Period Period Period from from from Non-GAAP 5/1/21 to 5/1/21 to 6/12/21 Revenue 6/11/21 6/11/21 to 7/31/ Adjustments 21 (1)

Global Skillsoft Skillsoft Combined Knowledge (2)Revenues: $ 25,255 $ 47,935 $ 57,912 $ 45,385 $Total revenues 176,487

Operating expensesCost of revenues 11,836 11,360 28,006 6,468 57,670

Content and software 258 7,477 9,878 - 17,613developmentSelling and marketing 5,398 13,438 22,234 - 41,070

General and 10,765 4,855 17,073 - 32,693administrativeAmortization of 1,063 15,959 20,023 - 37,045intangible assetsRecapitalization and 5,006 9,995 - 15,001transaction-related costsRestructuring 146 (1,240) 316 - (778)

Total operating 29,466 56,855 107,525 6,468 200,314expenses $ (4,212) $ (8,920) $ $ 38,917 $Operating loss: (49,613) (23,828)

Other income (852) 759 16,418 - 16,325(expense), netInterest income 54 12 - 66

Interest expense (1,901) (5,371) (9,856) - (17,128)

Reorganization items, - - -netLoss before provision (6,965) (13,478) (43,039) 38,917 (24,565)for (benefit from)income taxesProvision for 481 (1,619) (5,504) - (6,642)(benefit from) incometaxes $ (7,446) $ $ $ 38,917 $Net loss (11,859) (37,535) (17,923)

EBITDA ComputationInterest expense, net $ 1,901 $ 5,317 $ 9,844 $ - $ 17,062

Provision for 481 (1,619) (5,504) - (6,642)(benefit from) incometaxesDepreciation and 1,530 17,112 21,728 - 40,370amortizationImpairment of - - - -goodwill andintangible assetsEBITDA (3,534) 8,951 (11,467) 38,917 32,867

Adjusted EBITDAComputationPlus: Non-recurring 28 446 15 - 489retention andconsulting costsPlus: Recapitalizationand 7,469 5,006 9,995 - 22,470transaction-relatedcostsPlus: Restructuring 266 (1,240) 316 - (658)and contractterminationsPlus: Integration and - 381 500 - 881migration relatedPlus: Foreign currency 632 (37) (16,677) - (16,082)and other non-cashexpensePlus: Impact of - 5,374 32,485 (38,917) (1,058)fresh-start andpurchase accountingPlus: Stock-based compensation - 4,817 - 4,817expensePlus: Other add backs 49 (722) 259 - (414)

Adjusted EBITDA $ 4,910 $ 18,159 $ 20,243 $ - $ 43,312

(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue.(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferredrevenue fair value adjustments and (ii) reseller fees, which are presented on anet basis in GAAP revenue.

(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11, 2021.(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11,2021.For the Six Months Ended July 31, 2021For thePeriod from2/1/21 to 6/11/21For thePeriod from2/1/21 to 6/11/21For thePeriod from6/12/21 to 7/31/21Non-GAAP Revenue Adjustments (1)Global KnowledgeSkillsoftSkillsoft (2)CombinedRevenues:Total revenues$ 71,932

$ 139,636

$ 57,912

$ 73,249

$ 342,729

Operating expensesCost of revenues34,698

35,881

28,006

14,557

113,142

Content and software development492

24,084

9,878

-

34,454

Selling and marketing16,404

41,940

22,234

-

80,578

General and administrative19,765

17,217

17,073

-

54,055

Amortization of intangible assets2,646

50,902

20,023

-

73,571

Recapitalization and transaction-related costs-

6,938

9,995

-

16,933

Restructuring2,764

(703)

316

-

2,377

Total operating expenses76,770

176,259

107,525

14,557

375,111

Operating loss:$ (4,838)

$ (36,623)

$ (49,613)

$ 58,692

$ (32,382)

Other income, net624

407

16,418

-

17,449

Interest income-

64

12

-

76

Interest expense(11,970)

(16,820)

(9,856)

-

(38,646)

Reorganization items, net-

-

-

-

Loss before benefit from income taxes(16,184)

(52,972)

(43,039)

58,692

(53,503)

Benefit from income taxes(359)

(3,708)

(5,504)

-

(9,571)

Net loss$ (15,826)

$ (49,264)

$ (37,535)

$ 58,692

$ (43,933)

EBITDA ComputationInterest expense, net$ 11,970

$ 16,756

$ 9,844

$ -

$ 38,570

Benefit from income taxes(359)

(3,708)

(5,504)

-

(9,571)

Depreciation and amortization4,119

54,474

21,728

-

80,321

Impairment of goodwill and intangible assets-

-

-

-

-

EBITDA(95)

18,258

(11,467)

58,692

65,388

Adjusted EBITDA ComputationPlus: Non-recurring retention and consulting costs28

1,153

15

-

1,196

Plus: Recapitalization and transaction-related costs8,862

6,938

9,995

-

25,795

Plus: Restructuring and contract terminations2,884

(703)

316

-

2,497

Plus: Integration and migration related-

1,160

500

-

1,660

Plus: Foreign currency and other non-cash expense377

134

(16,677)

-

(16,166)

Plus: Impact of fresh-start and purchase accounting-

23,395

32,485

(58,692)

(2,812)

Plus: Stock-based compensation expense-

-

4,817

-

4,817

Plus: Other add backs(1,119)

(300)

259

-

(1,160)

Adjusted EBITDA$ 10,938

$ 50,035

$ 20,243

$ -

$ 81,216

For the Six Months Ended July 31, 2021

For the For the For the Period Period Period from from from Non-GAAP 2/1/21 to 2/1/21 to 6/12/21 Revenue 6/11/21 6/11/21 to 7/31/ Adjustments 21 (1)

Global Skillsoft Skillsoft Combined Knowledge (2)Revenues: $ 71,932 $ 139,636 $ 57,912 $ 73,249 $Total revenues 342,729

Operating expensesCost of revenues 34,698 35,881 28,006 14,557 113,142

Content and software 492 24,084 9,878 - 34,454developmentSelling and marketing 16,404 41,940 22,234 - 80,578

General and 19,765 17,217 17,073 - 54,055administrativeAmortization of 2,646 50,902 20,023 - 73,571intangible assetsRecapitalization and - 6,938 9,995 - 16,933transaction-relatedcostsRestructuring 2,764 (703) 316 - 2,377

Total operating 76,770 176,259 107,525 14,557 375,111expenses $ (4,838) $ $ $ 58,692 $Operating loss: (36,623) (49,613) (32,382)

Other income, net 624 407 16,418 - 17,449

Interest income - 64 12 - 76

Interest expense (11,970) (16,820) (9,856) - (38,646)

Reorganization items, - - - -netLoss before benefit (16,184) (52,972) (43,039) 58,692 (53,503)from income taxesBenefit from income (359) (3,708) (5,504) - (9,571)taxes $ $ $ $ 58,692 $Net loss (15,826) (49,264) (37,535) (43,933)

EBITDA ComputationInterest expense, net $ 11,970 $ 16,756 $ 9,844 $ - $ 38,570

Benefit from income (359) (3,708) (5,504) - (9,571)taxesDepreciation and 4,119 54,474 21,728 - 80,321amortizationImpairment of - - - - -goodwill andintangible assetsEBITDA (95) 18,258 (11,467) 58,692 65,388

Adjusted EBITDAComputationPlus: Non-recurring 28 1,153 15 - 1,196retention andconsulting costsPlus: Recapitalizationand 8,862 6,938 9,995 - 25,795transaction-relatedcostsPlus: Restructuring 2,884 (703) 316 - 2,497and contractterminationsPlus: Integration and - 1,160 500 - 1,660migration relatedPlus: Foreign currency 377 134 (16,677) - (16,166)and other non-cashexpensePlus: Impact of - 23,395 32,485 (58,692) (2,812)fresh-start andpurchase accountingPlus: Stock-based - - 4,817 - 4,817compensation expensePlus: Other add backs (1,119) (300) 259 - (1,160)

Adjusted EBITDA $ 10,938 $ 50,035 $ 20,243 $ - $ 81,216

(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue.(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferredrevenue fair value adjustments and (ii) reseller fees, which are presented on anet basis in GAAP revenue.

(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11, 2021.(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11,2021.For the Three Months Ended July 31, 2020Non-GAAPRevenueAdjustments (1)Global KnowledgeSkillsoftCombinedRevenues:Total revenues$ 44,522

$ 116,835

$ 6,889

$ 168,246

Operating expensesCost of revenues23,339

21,618

6,889

51,846

Content and software development721

16,835

-

17,556

Selling and marketing9,302

34,033

-

43,335

General and administrative7,934

15,324

-

23,258

Amortization of intangible assets1,862

12,779

-

14,641

Recapitalization and transaction-related costs-

16,659

-

16,659

Restructuring2,275

771

-

3,046

Total operating expenses45,434

118,019

6,889

170,342

Operating loss:$ (912)

$ (1,184)

$ -

$ (2,096)

Other income, net622

898

-

1,520

Interest income65

-

65

Interest expense(7,507)

(61,076)

-

(68,583)

Reorganization items, net-

(10,593)

(10,593)

Loss before provision for (benefit from) income taxes(7,797)

(71,890)

-

(79,687)

Provision for (benefit from) income taxes96

(909)

-

(813)

Net loss$ (7,893)

$ (70,981)

$ -

$ (78,874)

EBITDA ComputationInterest expense, net$ 7,507

$ 61,011

$ -

$ 68,518

Provision for (benefit from) income taxes96

(909)

-

(813)

Depreciation and amortization3,640

15,267

-

18,907

Impairment of goodwill and intangible assets-

-

-

-

EBITDA3,350

4,388

-

7,738

Adjusted EBITDA ComputationPlus: Non-recurring retention and consulting costs673

3,607

-

4,280

Plus: Recapitalization and transaction-related costs455

16,659

-

17,114

Plus: Restructuring and contract terminations1,603

771

-

2,374

Plus: Integration and migration related-

609

-

609

Plus: Foreign currency and other non-cash expense(868)

(36)

-

(904)

Plus: Impact of fresh-start and purchase accounting-

10,593

-

10,593

Plus: Stock-based compensation expense-

-

-

Plus: Other add backs291

156

-

447

Adjusted EBITDA$ 5,504

$ 36,747

$ -

$ 42,251

For the Three Months Ended July 31, 2020

Non-GAAP Global Revenue Knowledge Skillsoft Adjustments (1) Combined

Revenues: $ 44,522 $ 116,835 $ 6,889 $Total revenues 168,246

Operating expensesCost of revenues 23,339 21,618 6,889 51,846

Content and software development 721 16,835 - 17,556

Selling and marketing 9,302 34,033 - 43,335

General and administrative 7,934 15,324 - 23,258

Amortization of intangible assets 1,862 12,779 - 14,641

Recapitalization and - 16,659 - 16,659transaction-related costsRestructuring 2,275 771 - 3,046

Total operating expenses 45,434 118,019 6,889 170,342

$ (912) $ (1,184) $ - $Operating loss: (2,096)

Other income, net 622 898 - 1,520

Interest income 65 - 65

Interest expense (7,507) (61,076) - (68,583)

Reorganization items, net - (10,593) (10,593)

Loss before provision for (benefit (7,797) (71,890) - (79,687)from) income taxesProvision for (benefit from) 96 (909) - (813)income taxes $ (7,893) $ $ - $Net loss (70,981) (78,874)

EBITDA ComputationInterest expense, net $ 7,507 $ 61,011 $ - $ 68,518

Provision for (benefit from) 96 (909) - (813)income taxesDepreciation and amortization 3,640 15,267 - 18,907

Impairment of goodwill and - - - -intangible assetsEBITDA 3,350 4,388 - 7,738

Adjusted EBITDA ComputationPlus: Non-recurring retention and 673 3,607 - 4,280consulting costsPlus: Recapitalization and 455 16,659 - 17,114transaction-related costsPlus: Restructuring and contract 1,603 771 - 2,374terminationsPlus: Integration and migration - 609 - 609relatedPlus: Foreign currency and other (868) (36) - (904)non-cash expensePlus: Impact of fresh-start and - 10,593 - 10,593purchase accountingPlus: Stock-based compensation expense - - -

Plus: Other add backs 291 156 - 447

Adjusted EBITDA $ 5,504 $ 36,747 $ - $ 42,251

(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue.(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferredrevenue fair value adjustments and (ii) reseller fees, which are presented on anet basis in GAAP revenue.

For the Six Months Ended July 31, 2020Non-GAAPRevenueAdjustments (1)Global KnowledgeSkillsoftCombinedRevenues:Total revenues$ 98,502

$ 235,164

$ 14,323

$ 347,989

Operating expensesCost of revenues54,057

45,831

14,323

114,211

Content and software development1,520

33,778

-

35,298

Selling and marketing19,918

66,769

-

86,687

General and administrative16,086

32,015

-

48,101

Amortization of intangible assets3,723

362,524

-

366,247

Recapitalization and transaction-related costs-

32,035

-

32,035

Restructuring4,307

1,141

-

5,448

Total operating expenses99,612

574,093

14,323

688,028

Operating loss:$ (1,110)

$ (338,929)

$ -

$ (340,039)

Other income (expense), net(781)

1,809

-

1,028

Interest income-

84

-

84

Interest expense(14,562)

(167,054)

-

(181,616)

Reorganization items, net-

(10,593)

(10,593)

Loss before benefit from income taxes(16,453)

(514,683)

-

(531,136)

Benefit from income taxes(211)

(9,800)

-

(10,011)

Net loss$ (16,242)

$ (504,883)

$ -

$ (521,125)

EBITDA ComputationInterest expense, net$ 14,562

$ 166,970

$ -

$ 181,532

Benefit from income taxes(211)

(9,800)

-

(10,011)

Depreciation and amortization7,625

35,268

-

42,893

Impairment of goodwill and intangible assets-

332,376

-

332,376

EBITDA5,734

19,931

-

25,665

Adjusted EBITDA ComputationPlus: Non-recurring retention and consulting costs1,362

9,485

-

10,847

Plus: Recapitalization and transaction-related costs704

32,035

-

32,739

Plus: Restructuring and contract terminations2,939

1,141

-

4,080

Plus: Integration and migration related8

1,167

-

1,175

Plus: Foreign currency and other non-cash expense953

(890)

-

63

Plus: Impact of fresh-start and purchase accounting-

10,593

-

10,593

Plus: Stock-based compensation expense-

-

-

-

Plus: Other add backs(16)

214

-

198

Adjusted EBITDA$ 11,684

$ 73,676

$ -

$ 85,360

For the Six Months Ended July 31, 2020

Non-GAAP Global Revenue Knowledge Skillsoft Adjustments (1) Combined

Revenues:Total revenues $ 98,502 $ 235,164 $ 14,323 $ 347,989

Operating expensesCost of revenues 54,057 45,831 14,323 114,211

Content and software development 1,520 33,778 - 35,298

Selling and marketing 19,918 66,769 - 86,687

General and administrative 16,086 32,015 - 48,101

Amortization of intangible assets 3,723 362,524 - 366,247

Recapitalization and - 32,035 - 32,035transaction-related costsRestructuring 4,307 1,141 - 5,448

Total operating expenses 99,612 574,093 14,323 688,028

$ (1,110) $ $ - $Operating loss: (338,929) (340,039)

Other income (expense), net (781) 1,809 - 1,028

Interest income - 84 - 84

Interest expense (14,562) (167,054) - (181,616)

Reorganization items, net - (10,593) (10,593)

Loss before benefit from income (16,453) (514,683) - (531,136)taxesBenefit from income taxes (211) (9,800) - (10,011)

$ (16,242) $ $ - $Net loss (504,883) (521,125)

EBITDA ComputationInterest expense, net $ 14,562 $ 166,970 $ - $ 181,532

Benefit from income taxes (211) (9,800) - (10,011)

Depreciation and amortization 7,625 35,268 - 42,893

Impairment of goodwill and - 332,376 - 332,376intangible assetsEBITDA 5,734 19,931 - 25,665

Adjusted EBITDA ComputationPlus: Non-recurring retention and 1,362 9,485 - 10,847consulting costsPlus: Recapitalization and 704 32,035 - 32,739transaction-related costsPlus: Restructuring and contract 2,939 1,141 - 4,080terminationsPlus: Integration and migration 8 1,167 - 1,175relatedPlus: Foreign currency and other 953 (890) - 63non-cash expensePlus: Impact of fresh-start and - 10,593 - 10,593purchase accountingPlus: Stock-based compensation - - - -expensePlus: Other add backs (16) 214 - 198

Adjusted EBITDA $ 11,684 $ 73,676 $ - $ 85,360

(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue. View source version on businesswire.com: https://www.businesswire.com/news/home/20210914006156/en/

CONTACT: Investors James Gruskin james.gruskin@skillsoft.com Media Caitlin Leddy caitlin.leddy@skillsoft.com