Business Wire | Dec 14, 2021 04:06PM EST

Skillsoft Reports Strong Financial Results for the Third Quarter of Fiscal 2022

Dec. 14, 2021

BOSTON--(BUSINESS WIRE)--Dec. 14, 2021--Skillsoft Corp. (NYSE: SKIL) ("Skillsoft" or the "Company"), a global leader in corporate digital learning, today announced its financial results for the third quarter of fiscal 2022 ended October 31, 2021. The Company delivered bookings growth in each of its business segments and grew revenue. Skillsoft raised its full year outlook for bookings and adjusted revenue and updated its outlook for adjusted EBITDA to the midpoint of the previous range.

"We delivered another strong quarter, driving bookings and adjusted revenue growth above expectations and executing on our strategic priorities," said Jeffrey R. Tarr, Skillsoft's Chief Executive Officer. "We grew each of our segments, won new blue-chip customers and advanced our migration to Percipio. We also signed new strategic alliances and launched new content and platform features, further increasing the value we deliver to our customers."

Mr. Tarr added, "In our first two quarters as a public company, we recapitalized the business, assembled a world-class management team and board of directors, completed two acquisitions, and made foundational investments in content, platform and go-to-market. We continue to advance our vision of being the most highly valued provider of learning solutions and preparing the workforce of today with the skills for tomorrow."

Updated Full Year Fiscal 2022 Outlook1

Updated Outlook Previous Outlook

Bookings $700 million to $720 million $690 million to $710 million

Adjusted Revenue $685 million to $700 million $670 million to $690 million

Adjusted EBITDA Approximately $165 million $155 million to $175 million

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

The adjusted EBITDA outlook at the middle of the original outlook range reflects the Company's growth investments in content, platform, and go-to-market capabilities, contributing to the higher than expected bookings and adjusted revenue growth.

Fiscal 2022 Third Quarter Financial Highlights2

* Grew bookings 7%, with Content up 6%, Global Knowledge up 11%, Content and Global Knowledge combined up 8% and SumTotal up 3%; * Delivered GAAP revenue for the reported period of $171 million and GAAP net loss of $43 million; * Grew adjusted revenue3 6% to $179 million with adjusted EBITDA3 of $49 million, in line with the prior year due to growth investment, synergy timing related to the delay in the closing of the Global Knowledge transaction, and higher D&O insurance costs; * Delivered combined Percipio and dual deployment dollar retention rate of 101%; and * Advanced platform migration to Percipio, with 86% of Skillsoft Content annual recurring revenue on Percipio or Percipio dual deployment, up from 81% last quarter and 68% in the prior year period.

Key Operational Metrics and Non-GAAP Financial Measures

Bookings (previously Order Intake)

The following table sets forth unaudited bookings for the three and nine months ended October 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 October 31:

$000s Three Months Ended Change Nine Months Ended Change October 31, October 31,

2021 2020 $ % 2021 2020 $ %

Content andGlobalKnowledge

Percipio $17,742 $11,063 $6,679 60% $50,276 $31,645 $18,631 59%

DualDeployment & 53,661 36,348 17,313 48% 95,357 75,757 19,600 26%Coaching

Skillport 2,270 21,883 (19,613) -90% 24,318 53,955 (29,637) -55%

Total $73,672 $69,294 $4,379 6% $169,951 $161,357 $8,594 5%Subscription

Services &One-Time 4,620 4,319 301 7% 10,908 9,330 1,578 17%Bookings

Total $78,293 $73,613 $4,680 6% $180,859 $170,687 $10,171 6%Content

Global 61,690 55,419 6,271 11% 190,488 161,225 29,262 18%Knowledge

TotalContent & $139,983 $129,032 $10,951 8% $371,346 $331,913 $39,434 12%GlobalKnowledge

SumTotal

Subscription $22,472 $21,830 $642 3% $64,552 $68,286 ($3,734) -5%

Services &One-Time 6,423 6,262 161 3% 17,224 15,876 1,348 8%Bookings

Total $28,895 $28,092 $803 3% $81,776 $84,162 ($2,386) -3%SumTotal

Total $168,878 $157,124 $11,754 7% $453,122 $416,075 $37,048 9%

Dollar Retention Rate

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

October 31

LTM 2021 2020

Percipio 100% 107% 100%

Dual Deployment 103% 100% 105%

Percipio + Dual Deployment 102% 101% 104%

Skillport 72% 75% 83%

Total Content Business 95% 98% 96%

SumTotal Business 96% 101% 99%

Capital Structure

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

$000s October 31, 2021

Assets

Cash and Equivalents $80,671

Liabilities

Long-Term Debt $467,796

(including current portion)

Weighted average shares outstanding during the period from July 31, 2021 to October 31, 2021 were 133,116,361.

Webcast and Conference Call InformationSkillsoft 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 SkillsoftSkillsoft (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 METRICSWe 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 StatementsThis 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 (including bookings, adjusted revenue and adjusted EBITDA), 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 (including any variant) on our business, operating results and financial condition; * fluctuations in our future operating results; * our ability to successfully identify, consummate and achieve strategic objectives in connection with our acquisition opportunities and realize the benefits expected from the acquisition; * the demand for, and acceptance of, our products and for cloud-based technology learning solutions in general; * our ability to compete successfully in competitive markets and changes in the competitive environment in our industry and the markets in which we operate; * our ability to market existing products and develop new products; * a failure of our information technology infrastructure or any significant breach of security, including in relation to the migration of our key platforms from our systems to cloud storage; * future regulatory, judicial and legislative changes in our industry; * our ability to comply with laws and regulations applicable to our business; * the impact of natural disasters, public health crises, political crises, or other catastrophic events; * our ability to attract and retain key employees and qualified technical and sales personnel; * fluctuations in foreign currency exchange rates; * our ability to protect or obtain intellectual property rights; * our ability to raise additional capital; * the impact of our indebtedness on our financial position and operating flexibility; * our ability to meet future liquidity requirements and comply with restrictive covenants related to long-term indebtedness; * our ability to successfully defend ourselves in legal proceedings; and * our ability to continue to meet applicable listing standards.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see the risk factors included in the Company's S-1 amendment filed on July 29, 2021 and subsequent filings with the SEC.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a 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.

^1 See "Non-GAAP Financial Measures and Key Performance Metrics." The Companydoes not reconcile forward-looking non-GAAP measures.

^2 Growth calculated compared to the prior year as if pre-combination Skillsoftand Global Knowledge had been combined and their fiscal quarters had beenaligned to end on October 31, 2021.

^3 Signifies non-GAAP measure. See "Non-GAAP Financial Measures and KeyPerformance Metrics" in this release.

SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

Successor

Predecessor (SLH)

October 31, 2021

January 31, 2021

ASSETS

Current Assets:

Cash and cash equivalents

$

80,671

$

71,479

Restricted cash

2,680

2,964

Accounts receivable, less reserves of approximately $2,173 and $294 as of October 31, 2021 and January 31, 2021 respectively

136,890

179,784

Prepaid expenses and other current assets

42,066

30,326

Total current assets

262,307

284,553

Property and equipment, net

17,253

13,780

Goodwill

872,291

495,004

Intangible assets, net

904,797

728,633

Right of use assets

21,928

15,131

Deferred tax asset

-

-

Other assets

10,083

8,636

Total assets

$

2,088,659

$

1,545,737

LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:

Current maturities of long-term debt

$

4,800

$

5,200

Borrowings under accounts receivable facility

11,080

17,022

Accounts payable

31,472

7,425

Accrued compensation

38,681

36,375

Accrued expenses and other current liabilities

55,772

23,125

Lease liabilities

7,687

4,740

Deferred revenue

246,188

257,549

Total current liabilities

395,680

351,436

Long-term debt

462,996

510,236

Warrant liabilities

65,363

900

Deferred tax liabilities

91,497

81,008

Long term lease liabilities

15,209

13,155

Deferred revenue - non-current

1,883

3,035

Other long-term liabilities

9,699

5,998

Total long-term liabilities

646,647

614,332

Commitments and contingencies

-

-

Shareholders' equity:

(Predecessor SLH) Shareholders' common stock- Class A and Class B common shares, $0.01 par value: 1,000,000,000 shares authorized (800,000,000 Class A, 200,000,000 Class B) at January 31, 2021; 4,000,000 shares issued and outstanding (3,840,000 Class A, 160,000 Class B) at January 31, 2021

-

40

(Successor) Shareholders' common stock- Class A common shares, $0.0001 par value: 375,000,000 shares authorized and 133,164,526 shares issued and outstanding at October 31, 2021

11

-

Additional paid-in capital

1,301,319

674,333

Accumulated deficit

(255,132

)

(93,722

)

Accumulated other comprehensive income (loss)

134

(682

)

Total shareholders' equity

1,046,332

579,969

Total liabilities and shareholders' equity

$

2,088,659

$

1,545,737

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(IN THOUSANDS, EXCEPT NUMBER OF SHARES)



Successor Predecessor (SLH)

October 31, January 31, 2021 2021

ASSETS

Current Assets:

Cash and cash equivalents $ 80,671 $ 71,479

Restricted cash 2,680 2,964

Accounts receivable, less reserves ofapproximately $2,173 and $294 as of October 31, 136,890 179,784 2021 and January 31, 2021 respectively

Prepaid expenses and other current assets 42,066 30,326

Total current assets 262,307 284,553

Property and equipment, net 17,253 13,780

Goodwill 872,291 495,004

Intangible assets, net 904,797 728,633

Right of use assets 21,928 15,131

Deferred tax asset - -

Other assets 10,083 8,636

Total assets $ 2,088,659 $ 1,545,737

LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:

Current maturities of long-term debt $ 4,800 $ 5,200

Borrowings under accounts receivable facility 11,080 17,022

Accounts payable 31,472 7,425

Accrued compensation 38,681 36,375

Accrued expenses and other current liabilities 55,772 23,125

Lease liabilities 7,687 4,740

Deferred revenue 246,188 257,549

Total current liabilities 395,680 351,436

Long-term debt 462,996 510,236

Warrant liabilities 65,363 900

Deferred tax liabilities 91,497 81,008

Long term lease liabilities 15,209 13,155

Deferred revenue - non-current 1,883 3,035

Other long-term liabilities 9,699 5,998

Total long-term liabilities 646,647 614,332

Commitments and contingencies - -

Shareholders' equity:

(Predecessor SLH) Shareholders' common stock-Class A and Class B common shares, $0.01 parvalue:1,000,000,000 shares authorized (800,000,000 - 40 Class A, 200,000,000 Class B) at January 31,2021; 4,000,000 shares issued and outstanding(3,840,000 Class A, 160,000 Class B) at January31, 2021

(Successor) Shareholders' common stock- Class Acommon shares, $0.0001 par value: 375,000,000 11 - shares authorized and 133,164,526 shares issuedand outstanding at October 31, 2021

Additional paid-in capital 1,301,319 674,333

Accumulated deficit (255,132 ) (93,722 )

Accumulated other comprehensive income (loss) 134 (682 )

Total shareholders' equity 1,046,332 579,969

Total liabilities and shareholders' equity $ 2,088,659 $ 1,545,737

SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Quarter-to Date Results

Fiscal 2022

Fiscal 2021

Successor

Predecessor (SLH)

Predecessor (PL)

Three Months EndedOctober 31, 2021

From August 28, 2020to October 31, 2020

From August 1, 2020to August 27, 2020

Revenues:

Total revenues

$

170,559

$

36,973

$

38,687

Operating expenses:

Costs of revenues

48,891

15,882

6,329

Content and software development

16,437

10,919

5,208

Selling and marketing

39,938

18,193

8,259

General and administrative

28,120

10,075

5,440

Amortization of intangible assets

37,064

15,890

4,230

Recapitalization and acquisition-related costs

3,687

8,225

64

Restructuring

777

80

38

Total operating expenses

174,914

79,264

29,568

Operating (loss) income

(4,355

)

(42,291

)

9,119

Other (expense) income, net

(611

)

717

(541

)

Fair value adjustment of warrants

(36,838

)

2,900

-

Interest income

18

9

21

Interest expense

(7,510

)

(7,919

)

(1,287

)

Reorganization items, net

-

-

3,339,837

Loss (income) before (benefit from) provision for income taxes

(49,296

)

(46,584

)

3,347,149

(Benefit from) provision for income taxes

(6,441

)

(7,870

)

78,254

Net (loss) income

(42,855

)

(38,714

)

3,268,895

(Loss) income per share:

Ordinary - Basic and Diluted (PL)

*

*

32,656.29

Class A and B - Basic and Diluted (SLH)

*

(9.68

)

*

Ordinary - Basic and Diluted (Successor)

(0.32

)

*

*

Weighted average common share outstanding:

Ordinary - Basic and Diluted (PL)

*

*

100.1

Class A and B - Basic and Diluted (SLH)

*

4,000

*

Ordinary - Basic and Diluted (Successor)

133,116

*

*

*Not applicable

The accompanying notes are an integral part of these consolidated financial statements.

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Quarter-to Date Results

Fiscal 2022 Fiscal 2021

Successor Predecessor Predecessor (SLH) (PL)

Three From August From August Months 28, 2020 1, 2020 Ended to October to August 27, October 31, 31, 2020 2020 2021

Revenues:

Total revenues $ 170,559 $ 36,973 $ 38,687

Operating expenses:

Costs of revenues 48,891 15,882 6,329

Content and software development 16,437 10,919 5,208

Selling and marketing 39,938 18,193 8,259

General and administrative 28,120 10,075 5,440

Amortization of intangible assets 37,064 15,890 4,230

Recapitalization and 3,687 8,225 64 acquisition-related costs

Restructuring 777 80 38

Total operating expenses 174,914 79,264 29,568

Operating (loss) income (4,355 ) (42,291 ) 9,119

Other (expense) income, net (611 ) 717 (541 )

Fair value adjustment of warrants (36,838 ) 2,900 -

Interest income 18 9 21

Interest expense (7,510 ) (7,919 ) (1,287 )

Reorganization items, net - - 3,339,837

Loss (income) before (benefit from) (49,296 ) (46,584 ) 3,347,149 provision for income taxes

(Benefit from) provision for income (6,441 ) (7,870 ) 78,254 taxes

Net (loss) income (42,855 ) (38,714 ) 3,268,895



(Loss) income per share:

Ordinary - Basic and Diluted (PL) * * 32,656.29

Class A and B - Basic and Diluted * (9.68 ) * (SLH)

Ordinary - Basic and Diluted (0.32 ) * * (Successor)

Weighted average common share outstanding:

Ordinary - Basic and Diluted (PL) * * 100.1

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

Ordinary - Basic and Diluted 133,116 * * (Successor)

*Not applicable

The accompanying notes are an integral part of these consolidated financialstatements.

SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Year-to Date Results

Fiscal 2022

Fiscal 2021

Successor

Predecessor (SLH)

Predecessor (SLH)

Predecessor (PL)

From June 12, 2021 toOctober 31, 2021

From February 1, 2021to June 11, 2021

From August 28, 2020to October 31, 2020

From February 1, 2020to August 27, 2020

Revenues:

Total revenues

$

261,572

$

139,636

$

36,973

$

273,851

Operating expenses:

Costs of revenues

76,897

35,881

15,882

52,160

Content and software development

26,316

24,084

10,919

38,986

Selling and marketing

62,171

41,940

18,193

75,028

General and administrative

45,194

17,217

10,075

37,455

Amortization of intangible assets

57,087

50,902

15,890

34,378

Impairment of intangible assets

-

-

-

332,376

Recapitalization and acquisition-related costs

13,682

6,938

8,225

32,099

Restructuring

1,093

(703

)

80

1,179

Total operating expenses

282,440

176,259

79,264

603,661

Operating loss

(20,868

)

(36,623

)

(42,291

)

(329,810

)

Other (expense) income, net

(1,308

)

(493

)

717

1,268

Fair value adjustment of warrants

(19,723

)

900

2,900

-

Interest income

30

64

9

105

Interest expense

(17,366

)

(16,820

)

(7,919

)

(168,341

)

Reorganization items, net

-

-

-

3,329,245

Loss (income) before (benefit from) provision for income taxes

(59,235

)

(52,972

)

(46,584

)

2,832,467

(Benefit from) provision for income taxes

(4,527

)

(3,708

)

(7,870

)

68,455

Net (loss) income

(54,708

)

(49,264

)

(38,714

)

2,764,012

(Loss) income per share:

Ordinary - Basic and Diluted (PL)

*

*

*

27,612.51

Class A and B - Basic and Diluted (SLH)

*

(12.32

)

(9.68

)

*

Ordinary - Basic and Diluted (Successor)

(0.41

)

*

*

*

Weighted average common share outstanding:

Ordinary - Basic and Diluted (PL)

*

*

*

100.1

Class A and B - Basic and Diluted (SLH)

*

4,000

4,000

*

Ordinary - Basic and Diluted (Successor)

133,096

*

*

*

*Not applicable

The accompanying notes are an integral part of these consolidated financial statements.

SKILLSOFT CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Year-to Date Results

Fiscal 2022 Fiscal 2021

Successor Predecessor Predecessor Predecessor (SLH) (SLH) (PL)

From From From From June 12, February 1, August 28, February 1, 2021 to 2021 2020 2020 October 31, to June 11, to October to August 27, 2021 2021 31, 2020 2020

Revenues:

Total revenues $ 261,572 $ 139,636 $ 36,973 $ 273,851

Operating expenses:

Costs of revenues 76,897 35,881 15,882 52,160

Content and software 26,316 24,084 10,919 38,986 development

Selling and marketing 62,171 41,940 18,193 75,028

General and 45,194 17,217 10,075 37,455 administrative

Amortization of 57,087 50,902 15,890 34,378 intangible assets

Impairment of - - - 332,376 intangible assets

Recapitalization andacquisition-related 13,682 6,938 8,225 32,099 costs

Restructuring 1,093 (703 ) 80 1,179

Total operating 282,440 176,259 79,264 603,661 expenses

Operating loss (20,868 ) (36,623 ) (42,291 ) (329,810 )

Other (expense) (1,308 ) (493 ) 717 1,268 income, net

Fair value adjustment (19,723 ) 900 2,900 - of warrants

Interest income 30 64 9 105

Interest expense (17,366 ) (16,820 ) (7,919 ) (168,341 )

Reorganization items, - - - 3,329,245 net

Loss (income) before(benefit from) (59,235 ) (52,972 ) (46,584 ) 2,832,467 provision for incometaxes

(Benefit from)provision for income (4,527 ) (3,708 ) (7,870 ) 68,455 taxes

Net (loss) income (54,708 ) (49,264 ) (38,714 ) 2,764,012



(Loss) income per share:

Ordinary - Basic and * * * 27,612.51 Diluted (PL)

Class A and B - Basic * (12.32 ) (9.68 ) * and Diluted (SLH)

Ordinary - Basic and (0.41 ) * * * Diluted (Successor)

Weighted averagecommon share outstanding:

Ordinary - Basic and * * * 100.1 Diluted (PL)

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

Ordinary - Basic and 133,096 * * *Diluted (Successor)

*Not applicable

The accompanying notes are an integral part of these consolidated financialstatements.

SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)

Fiscal 2022

Fiscal 2021

Successor

Predecessor (SL)

Predecessor (SL)

Predecessor (PL)

June 12, 2021throughOctober 31, 2021

February 1, 2021throughJune 11, 2021

August 28, 2020throughOctober 31, 2020

February 1, 2020throughAugust 27, 2020

Cash flows from operating activities:

Net (loss) income

$

(54,708

)

$

(49,264

)

$

(38,714

)

$

2,764,012

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Share-based compensation

9,034

-

-

-

Depreciation and amortization

4,309

3,572

1,509

5,864

Amortization of intangible assets

57,087

50,902

15,890

34,378

Change in bad debt reserve

(668

)

(174

)

186

24

(Benefit from) provision for income taxes - non-cash

(9,937

)

(5,886

)

(8,214

)

66,234

Non-cash interest expense

913

487

143

2,407

Impairment of intangible assets

-

-

-

332,376

Fair value adjustment to warrants

19,723

(900

)

(2,900

)

-

Right-of-use asset

3,473

748

1,245

1,594

Non-cash reorganization items, net

-

-

-

(3,353,326

)

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

Accounts receivable

(8,446

)

88,622

(24,396

)

116,478

Prepaid expenses and other current assets

(5,002

)

1,828

(4,017

)

66

Accounts payable

(1,636

)

(4,866

)

3,776

(7,909

)

Accrued expenses, including long-term

13,962

(18,592

)

11,888

145,816

Lease liability

(4,046

)

(1,301

)

(1,510

)

(2,332

)

Deferred revenue

(24,599

)

(31,365

)

47,987

(101,765

)

Net cash (used in) provided by operating activities

(541

)

33,811

2,873

3,917

Cash flows from investing activities:

Purchase of property and equipment

(4,351

)

(641

)

(1,340

)

(3,105

)

Internally developed software - capitalized costs

(2,293

)

(2,350

)

(908

)

(3,819

)

Acquisition of Global Knowledge, net of cash received

(156,926

)

-

-

-

Acquisition of Skillsoft, net of cash received

(386,035

)

-

-

-

Acquisition of Pluma, net of cash received

(18,646

)

-

-

-

Net cash used in investing activities

(568,251

)

(2,991

)

(2,248

)

(6,924

)

Cash flows from financing activities:

Borrowings under revolving line of credit, net of repayments

-

-

-

19,500

Borrowings under DIP Facility

-

-

-

60,000

Proceeds from Exit Facility borrowing

-

-

-

50,000

Debt issuance costs associated with DIP and Exit facilities

-

-

-

(19,524

)

Shares repurchased for tax withholding upon vesting of restricted stock-based awarded

(614

)

-

-

-

Proceeds from equity investment (PIPE)

530,000

-

-

-

Proceeds from issuance of term loans, net of fees

464,290

-

-

-

Principal payments on capital lease obligation

(407

)

(370

)

(162

)

(532

)

Proceeds from accounts receivable facility, net of borrowings

(23,198

)

16,577

(28,909

)

(35,787

)

Repayment of First and Second Out loans

(605,591

)

(1,300

)

-

-

Net cash provided by (used in) financing activities

364,480

14,907

(29,071

)

73,657

Effect of exchange rate changes on cash and cash equivalents

(820

)

203

699

(2,139

)

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

(205,132

)

45,930

(27,747

)

68,511

Cash, cash equivalents and restricted cash, beginning of period

288,483

74,443

102,315

33,804

Cash, cash equivalents and restricted cash, end of period

$

83,351

$

120,373

$

74,568

$

102,315

Supplemental disclosure of cash flow information:

Cash and cash equivalents

$

80,671

$

117,299

$

70,836

$

92,009

Restricted cash

2,680

3,074

3,732

10,306

Cash, cash equivalents and restricted cash, end of period

$

83,351

$

120,373

$

74,568

$

102,315

The accompanying notes are an integral part of these consolidated financial statements.

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.

BookingsBookings (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.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS)

Fiscal 2022 Fiscal 2021

Successor Predecessor Predecessor Predecessor (SL) (SL) (PL)

June 12, February 1, August 28, February 1, 2021 2021 2020 2020 through through through through October 31, June 11, October 31, August 27, 2021 2021 2020 2020

Cash flows fromoperating activities:

Net (loss) $ (54,708 ) $ (49,264 ) $ (38,714 ) $ 2,764,012 income

Adjustments toreconcile netincome (loss)to net cash provided by(used in)operatingactivities:

Share-based 9,034 - - - compensation

Depreciationand 4,309 3,572 1,509 5,864 amortization

Amortization ofintangible 57,087 50,902 15,890 34,378 assets

Change in bad (668 ) (174 ) 186 24 debt reserve

(Benefit from)provision for (9,937 ) (5,886 ) (8,214 ) 66,234 income taxes -non-cash

Non-cashinterest 913 487 143 2,407 expense

Impairment ofintangible - - - 332,376 assets

Fair valueadjustment to 19,723 (900 ) (2,900 ) - warrants

Right-of-use 3,473 748 1,245 1,594 asset

Non-cashreorganization - - - (3,353,326 )items, net

Changes incurrent assetsandliabilities, net of effectsfromacquisitions:

Accounts (8,446 ) 88,622 (24,396 ) 116,478 receivable

Prepaidexpenses and (5,002 ) 1,828 (4,017 ) 66 other currentassets

Accounts (1,636 ) (4,866 ) 3,776 (7,909 )payable

Accruedexpenses, 13,962 (18,592 ) 11,888 145,816 includinglong-term

Lease liability (4,046 ) (1,301 ) (1,510 ) (2,332 )

Deferred (24,599 ) (31,365 ) 47,987 (101,765 )revenue

Net cash (usedin) provided by (541 ) 33,811 2,873 3,917 operatingactivities

Cash flows frominvesting activities:

Purchase ofproperty and (4,351 ) (641 ) (1,340 ) (3,105 )equipment

Internallydevelopedsoftware - (2,293 ) (2,350 ) (908 ) (3,819 )capitalizedcosts

Acquisition ofGlobalKnowledge, net (156,926 ) - - - of cashreceived

Acquisition ofSkillsoft, net (386,035 ) - - - of cashreceived

Acquisition ofPluma, net of (18,646 ) - - - cash received

Net cash usedin investing (568,251 ) (2,991 ) (2,248 ) (6,924 )activities

Cash flows fromfinancing activities:

Borrowingsunder revolvingline of credit, - - - 19,500 net ofrepayments

Borrowingsunder DIP - - - 60,000 Facility

Proceeds fromExit Facility - - - 50,000 borrowing

Debt issuancecostsassociated with - - - (19,524 )DIP and Exitfacilities

Sharesrepurchased fortax withholdingupon vesting of (614 ) - - - restrictedstock-basedawarded

Proceeds fromequity 530,000 - - - investment(PIPE)

Proceeds fromissuance of 464,290 - - - term loans, netof fees

Principalpayments on (407 ) (370 ) (162 ) (532 )capital leaseobligation

Proceeds fromaccountsreceivable (23,198 ) 16,577 (28,909 ) (35,787 )facility, netof borrowings

Repayment ofFirst and (605,591 ) (1,300 ) - - Second Outloans

Net cashprovided by(used in) 364,480 14,907 (29,071 ) 73,657 financingactivities

Effect ofexchange ratechanges on cash (820 ) 203 699 (2,139 )and cashequivalents

Net (decrease)increase incash, cash (205,132 ) 45,930 (27,747 ) 68,511 equivalents andrestricted cash

Cash, cashequivalents andrestricted 288,483 74,443 102,315 33,804 cash, beginningof period

Cash, cashequivalents andrestricted $ 83,351 $ 120,373 $ 74,568 $ 102,315 cash, end ofperiod

Supplementaldisclosure of cash flowinformation:

Cash and cash $ 80,671 $ 117,299 $ 70,836 $ 92,009 equivalents

Restricted cash 2,680 3,074 3,732 10,306

Cash, cashequivalents andrestricted $ 83,351 $ 120,373 $ 74,568 $ 102,315 cash, end ofperiod

The accompanying notes are an integral part of these consolidated financialstatements.

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.

BookingsBookings (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 Nine Months$000s Ended October 31, Ended October 31,

2021 2020 2021 2020

CONTENT AND GLOBAL KNOWLEDGEBOOKINGS

Percipio Bookings $ 17,742 $ 11,063 $ 50,276 $ 31,645

Dual Deployment & Coaching Bookings 53,661 36,348 95,357 75,757

Skillport Bookings 2,270 21,883 24,318 53,955

Total Subscription Bookings 73,673 69,294 169,951 161,357

Services & One-Time Bookings 4,620 4,319 10,908 9,330

Global Knowledge Bookings 61,690 55,419 190,488 161,225

Total Content & Global Knowledge 139,983 129,032 371,347 331,912Bookings

SUMTOTAL BOOKINGS

Subscription Bookings 22,472 21,830 64,552 68,286

Services & One-Time Bookings 6,423 6,262 17,224 15,876

Total 28,895 28,092 81,776 84,162

Total Bookings $ 168,877 $ 157,124 $ 453,123 $ 416,074

Annualized Recurring Revenue

$000s

October 31, 2021

January 31, 2021

CONTENT AND GLOBAL KNOWLEDGE ARR

Percipio ARR

$

90,638

$

75,802

Dual Deployment ARR

184,825

161,327

Skillport ARR

46,106

80,245

Total Content ARR

321,568

317,374

Global Knowledge ARR

13,407

10,504

Total Content & Global Knowledge ARR

334,975

327,878

SUMTOTAL ARR

SumTotal ARR

95,519

99,148

Total ARR

$

430,494

$

427,026

Annualized Recurring Revenue

$000s October 31, 2021 January 31, 2021

CONTENT AND GLOBAL KNOWLEDGE ARR

Percipio ARR $ 90,638 $ 75,802

Dual Deployment ARR 184,825 161,327

Skillport ARR 46,106 80,245

Total Content ARR 321,568 317,374

Global Knowledge ARR 13,407 10,504

Total Content & Global Knowledge ARR 334,975 327,878

SUMTOTAL ARR

SumTotal ARR 95,519 99,148

Total ARR $ 430,494 $ 427,026

Dollar Retention Rate

October 31

LTM

2021

2020

Percipio

100%

107%

100%

Dual Deployment

103%

100%

105%

Percipio + Dual Deployment

102%

101%

104%

Skillport

72%

75%

83%

Total Content Business

95%

98%

96%

SumTotal Business

96%

101%

99%

Dollar Retention Rate

October 31

LTM 2021 2020

Percipio 100% 107% 100%

Dual Deployment 103% 100% 105%

Percipio + Dual Deployment 102% 101% 104%

Skillport 72% 75% 83%

Total Content Business 95% 98% 96%

SumTotal Business 96% 101% 99%

Non-GAAP Financial Measures - Adjusted Revenue$000sSkillsoft and Global Knowledge Combined

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

CONSOLIDATEDAdjusted subscription revenue$

106,055

$

107,924

$

311,815

$

323,054

Adjusted non-subscription revenue11,298

10,518

32,525

32,161

Adjusted Global Knowledge revenue61,523

50,839

177,265

162,055

Total Consolidated adjusted revenue178,876

169,281

521,605

517,270

CONTENT BUSINESSAdjusted subscription revenue82,523

82,953

242,093

246,575

Adjusted non-subscription revenue4,424

3,995

12,661

11,619

Total Content Business adjusted revenue86,947

86,947

254,754

258,194

GLOBAL KNOWLEDGE BUSINESSVirtual and on-demand48,717

36,719

146,280

109,119

Classroom and all other12,806

14,120

30,985

52,936

Total Global Knowledge adjusted revenue61,523

50,839

177,265

162,055

SUMTOTAL BUSINESSAdjusted subscription revenue23,532

24,971

69,722

76,479

Adjusted non-subscription revenue6,874

6,523

19,864

20,542

Total SumTotal adjusted revenue5$

30,406

$

31,495

$

89,586

$

97,021

Non-GAAP Financial Measures - Adjusted Revenue $000s Skillsoft and Global Knowledge Combined

Three Months Nine Months Ended October 31, Ended October 31,

2021 2020 2021 2020

CONSOLIDATEDAdjusted subscription revenue $ 106,055 $ 107,924 $ 311,815 $ 323,054

Adjusted non-subscription revenue 11,298 10,518 32,525 32,161

Adjusted Global Knowledge revenue 61,523 50,839 177,265 162,055

Total Consolidated adjusted 178,876 169,281 521,605 517,270revenue CONTENT BUSINESSAdjusted subscription revenue 82,523 82,953 242,093 246,575

Adjusted non-subscription revenue 4,424 3,995 12,661 11,619

Total Content Business adjusted 86,947 86,947 254,754 258,194revenue GLOBAL KNOWLEDGE BUSINESSVirtual and on-demand 48,717 36,719 146,280 109,119

Classroom and all other 12,806 14,120 30,985 52,936

Total Global Knowledge adjusted 61,523 50,839 177,265 162,055revenue SUMTOTAL BUSINESSAdjusted subscription revenue 23,532 24,971 69,722 76,479

Adjusted non-subscription revenue 6,874 6,523 19,864 20,542

Total SumTotal adjusted revenue^5 $ 30,406 $ 31,495 $ 89,586 $ 97,021

5 The table above reflects a product level view of revenue whereas in prior quarters we showed revenue based on the contracting business unit, which is slightly different due to cross selling. We intend to present product level views going forward which we believe provides the most accurate depiction of the underlying trends in our business.

^5 The table above reflects a product level view of revenue whereas in priorquarters we showed revenue based on the contracting business unit, which isslightly different due to cross selling. We intend to present product levelviews going forward which we believe provides the most accurate depiction ofthe underlying trends in our business.

SKILLSOFT CORP.RECONCILIATION OF NON-GAAP FINANICAL MEASURES(in thousands, unaudited)For the Three Months Ended October 31, 2021

Skillsoft Corp.

Non-GAAP Revenue Adjustments (1)

Combined

REVENUES:

Total revenues

$

170,559

$

8,317

$

178,876

Operating expenses

Cost of revenues

48,891

8,317

57,208

Content and software development

16,437

16,437

Selling and marketing

39,938

39,938

General and administrative

28,120

28,120

Amortization of intangible assets

37,064

37,064

Recapitalization and acquisition-related costs

3,687

3,687

Restructuring

777

777

Total operating expenses

174,914

8,317

183,231

Operating loss:

$

(4,355

)

$

-

$

(4,355

)

Other income (expense), net

(37,449

)

(37,449

)

Interest income

18

18

Interest expense

(7,510

)

(7,510

)

Reorganization items, net

-

-

Loss before provision for (benefit from) income taxes

(49,296

)

-

(49,296

)

Provision for (benefit from) income taxes

(6,441

)

(6,441

)

Net loss

$

(42,855

)

$

-

$

(42,855

)

EBITDA COMPUTATION

Interest expense, net

$

7,492

$

7,492

Provision for (benefit from) income taxes

(6,441

)

(6,441

)

Depreciation and amortization

39,668

39,668

Impairment of goodwill and intangible assets

-

-

EBITDA

(2,136

)

-

(2,136

)

ADJUSTED EBITDA COMPUTATION

Plus: Non-recurring retention and consulting costs

3,892

3,892

Plus: Recapitalization and acquisition-related costs

3,687

3,687

Plus: Restructuring and contract terminations

777

777

Plus: Integration and migration related

883

883

Plus: Warrant fair value adjustment and foreign currency

37,391

37,391

Plus: Stock-based compensation expense

4,217

4,217

Plus: Other add backs

554

554

Adjusted EBITDA

$

49,265

$

-

$

49,265

(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.

SKILLSOFT CORP.RECONCILIATION OF NON-GAAP FINANICAL MEASURES(in thousands, unaudited) For the Three Months Ended October 31, 2021

Non-GAAP Skillsoft Revenue Combined Corp. Adjustments (1)

REVENUES:

Total revenues $ 170,559 $ 8,317 $ 178,876

Operating expenses

Cost of revenues 48,891 8,317 57,208

Content and software development 16,437 16,437

Selling and marketing 39,938 39,938

General and administrative 28,120 28,120

Amortization of intangible assets 37,064 37,064

Recapitalization and 3,687 3,687 acquisition-related costs

Restructuring 777 777

Total operating expenses 174,914 8,317 183,231

Operating loss: $ (4,355 ) $ - $ (4,355 )

Other income (expense), net (37,449 ) (37,449 )

Interest income 18 18

Interest expense (7,510 ) (7,510 )

Reorganization items, net - -

Loss before provision for (benefit (49,296 ) - (49,296 )from) income taxes

Provision for (benefit from) income (6,441 ) (6,441 )taxes

Net loss $ (42,855 ) $ - $ (42,855 )



EBITDA COMPUTATION

Interest expense, net $ 7,492 $ 7,492

Provision for (benefit from) income (6,441 ) (6,441 )taxes

Depreciation and amortization 39,668 39,668

Impairment of goodwill and intangible - - assets

EBITDA (2,136 ) - (2,136 )



ADJUSTED EBITDA COMPUTATION

Plus: Non-recurring retention and 3,892 3,892 consulting costs

Plus: Recapitalization and 3,687 3,687 acquisition-related costs

Plus: Restructuring and contract 777 777 terminations

Plus: Integration and migration 883 883 related

Plus: Warrant fair value adjustment 37,391 37,391 and foreign currency

Plus: Stock-based compensation 4,217 4,217 expense

Plus: Other add backs 554 554

Adjusted EBITDA $ 49,265 $ - $ 49,265



(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.

SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANICAL MEASURES (in thousands, unaudited)

For the Three Months Ended October 31, 2020

For the Period from 8/1/20 to 10/31/20

For the Period from 8/1/20 to 8/27/20

For the Period from 8/28/20 to 10/31/20

Global Knowledge

Predecessor (PL)

Predecessor (SLH)

Non-GAAP Revenue Adjustments (1)

Combined

Revenues:

Total revenues

$

43,690

$

38,687

$

36,973

$

49,931

$

169,281

Operating expenses

Cost of revenues

24,470

6,329

15,882

7,148

53,829

Content and software development

231

5,208

10,919

16,358

Selling and marketing

10,978

8,259

18,193

37,430

General and administrative

8,100

5,440

10,075

23,615

Amortization of intangible assets

9,526

4,230

15,890

29,646

Impairment of goodwill and intangible assets

4,520

4,520

Recapitalization and acquisition-related costs

-

64

8,225

8,289

Restructuring

2,066

38

80

2,184

Total operating expenses

59,891

29,568

79,264

7,148

175,871

Operating loss:

$

(16,201

)

$

9,119

$

(42,291

)

$

42,783

$

(6,590

)

Other income, net

625

(541

)

3,617

3,701

Interest income

-

21

9

30

Interest expense

(6,431

)

(1,287

)

(7,919

)

(15,637

)

Reorganization items, net

3,339,837

-

3,339,837

Loss before provision for (benefit from) income taxes

(22,007

)

3,347,149

(46,584

)

42,783

3,321,341

Provision for (benefit from) income taxes

(944

)

78,254

(7,870

)

69,440

Net loss

$

(21,063

)

$

3,268,895

$

(38,714

)

$

42,783

$

3,251,901

EBITDA COMPUTATION

Interest expense, net

$

6,431

$

1,266

$

7,910

$

-

$

15,607

Provision for (benefit from) income taxes

(944

)

78,254

(7,870

)

-

69,440

Depreciation and amortization

10,455

6,484

15,890

-

32,829

Impairment of goodwill and intangible assets

4,520

-

-

-

4,520

EBITDA

(601

)

3,354,899

(22,784

)

42,783

3,374,297

ADJUSTED EBITDA COMPUTATION

Plus: Non-recurring retention and consulting costs

669

1,549

3,032

5,250

Plus: Recapitalization and acquisition-related costs

2,671

(672

)

8,961

10,960

Plus: Restructuring and contract terminations

1,397

40

78

1,515

Plus: Integration and migration related

-

2,212

965

3,177

Plus: Foreign currency and other non-cash expense

(982

)

(229

)

(3,156

)

(4,367

)

Plus: Impact of fresh-start and purchase accounting

-

(3,339,838

)

41,442

(42,783

)

(3,341,179

)

Plus: Stock-based compensation expense

-

-

-

-

Plus: Other add backs

187

(247

)

(310

)

(370

)

Adjusted EBITDA

$

3,341

$

17,714

$

28,228

$

-

$

49,283

(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.

SKILLSOFT CORP.RECONCILIATION OF NON-GAAP FINANICAL MEASURES(in thousands, unaudited)

For the Three Months Ended October 31, 2020

For the For the For the Period from Period from Period from 8/1/20 to 8/1/20 to 8/27 8/28/20 to 10/31/20 /20 10/31/20

Non-GAAP Global Predecessor Predecessor Revenue Combined Knowledge (PL) (SLH) Adjustments (1)

Revenues:

Total revenues $ 43,690 $ 38,687 $ 36,973 $ 49,931 $ 169,281

Operating expenses

Cost of revenues 24,470 6,329 15,882 7,148 53,829

Content andsoftware 231 5,208 10,919 16,358 development

Selling and 10,978 8,259 18,193 37,430 marketing

General and 8,100 5,440 10,075 23,615 administrative

Amortization of 9,526 4,230 15,890 29,646 intangible assets

Impairment ofgoodwill and 4,520 4,520 intangible assets

Recapitalizationand - 64 8,225 8,289 acquisition-relatedcosts

Restructuring 2,066 38 80 2,184

Total operating 59,891 29,568 79,264 7,148 175,871 expenses

Operating loss: $ (16,201 ) $ 9,119 $ (42,291 ) $ 42,783 $ (6,590 )

Other income, net 625 (541 ) 3,617 3,701

Interest income - 21 9 30

Interest expense (6,431 ) (1,287 ) (7,919 ) (15,637 )

Reorganization 3,339,837 - 3,339,837 items, net

Loss beforeprovision for (22,007 ) 3,347,149 (46,584 ) 42,783 3,321,341 (benefit from)income taxes

Provision for(benefit from) (944 ) 78,254 (7,870 ) 69,440 income taxes

Net loss $ (21,063 ) $ 3,268,895 $ (38,714 ) $ 42,783 $ 3,251,901



EBITDA COMPUTATION

Interest expense, $ 6,431 $ 1,266 $ 7,910 $ - $ 15,607 net

Provision for(benefit from) (944 ) 78,254 (7,870 ) - 69,440 income taxes

Depreciation and 10,455 6,484 15,890 - 32,829 amortization

Impairment ofgoodwill and 4,520 - - - 4,520 intangible assets

EBITDA (601 ) 3,354,899 (22,784 ) 42,783 3,374,297



ADJUSTED EBITDA COMPUTATION

Plus: Non-recurringretention and 669 1,549 3,032 5,250 consulting costs

Plus:Recapitalizationand 2,671 (672 ) 8,961 10,960 acquisition-relatedcosts

Plus: Restructuringand contract 1,397 40 78 1,515 terminations

Plus: Integrationand migration - 2,212 965 3,177 related

Plus: Foreigncurrency and other (982 ) (229 ) (3,156 ) (4,367 )non-cash expense

Plus: Impact offresh-start and - (3,339,838 ) 41,442 (42,783 ) (3,341,179 )purchase accounting

Plus: Stock-basedcompensation - - - - expense

Plus: Other add 187 (247 ) (310 ) (370 )backs

Adjusted EBITDA $ 3,341 $ 17,714 $ 28,228 $ - $ 49,283



(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.

SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANICAL MEASURES (in thousands, unaudited)

For the Nine Months Ended October 31, 2021

For the Period from 2/1/21 to 6/11/21

For the Period from 2/1/21 to 6/11/21

For the Period from 6/12/21 to 10/31/21

Global Knowledge

Skillsoft

Skillsoft Corp.(1)

Non-GAAP Revenue Adjustments(2)

Combined

Revenues:

Total revenues

$

71,932

$

139,636

$

261,572

$

48,465

$

521,605

Operating expenses

Cost of revenues

34,698

35,881

76,897

22,874

170,350

Content and software development

492

24,084

26,316

50,892

Selling and marketing

16,404

41,940

62,172

120,516

General and administrative

19,765

17,217

45,194

82,176

Amortization of intangible assets

2,646

50,902

57,087

110,635

Recapitalization and acquisition-related costs

-

6,938

13,682

20,620

Restructuring

2,764

(703

)

1,093

3,154

Total operating expenses

76,769

176,259

282,440

22,874

558,343

Operating loss:

$

(4,837

)

$

(36,623

)

$

(20,868

)

$

25,591

$

(36,737

)

Other income, net

624

407

(21,031

)

(20,000

)

Interest income

-

64

30

94

Interest expense

(11,970

)

(16,820

)

(17,366

)

(46,156

)

Loss before benefit from income taxes

(16,183

)

(52,972

)

(59,235

)

25,591

(102,799

)

Provision for (benefit from) income taxes

359

(3,708

)

(4,527

)

(7,876

)

Net loss

$

(16,542

)

$

(49,264

)

$

(54,708

)

$

25,591

$

(94,923

)

EBITDA COMPUTATION

Interest expense, net

$

11,970

$

16,756

$

17,336

$

46,062

Benefit from income taxes

359

(3,708

)

(4,527

)

(7,876

)

Depreciation and amortization

4,119

54,474

61,396

119,989

EBITDA

(94

)

18,258

19,497

25,591

63,252

ADJUSTED EBITDA COMPUTATION

Plus: Non-recurring retention and consulting costs

28

1,153

1,551

2,732

Plus: Recapitalization and acquisition-related costs

8,862

6,938

16,038

31,838

Plus: Restructuring and contract terminations

2,884

(703

)

1,093

3,274

Plus: Integration and migration related

-

1,160

1,383

2,543

Plus: Warrant fair value adjustment and foreign currency

377

134

20,714

21,225

Plus: Impact of fresh-start and purchase accounting

-

23,395

-

(25,591

)

(2,196

)

Plus: Stock-based compensation expense

-

-

9,034

9,034

Plus: Other add backs

(1,119

)

(300

)

198

(1,221

)

Adjusted EBITDA

$

10,938

$

50,035

$

69,508

$

-

$

130,481

(1) GAAP results of Skillsoft Corp. include Global Knowledge subsequent to June 11, 2021. (2) 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.

SKILLSOFT CORP.RECONCILIATION OF NON-GAAP FINANICAL MEASURES(in thousands, unaudited)

For the Nine Months Ended October 31, 2021

For the For the For the Period from Period from Period from 2/1/21 to 6 2/1/21 to 6 6/12/21 to /11/21 /11/21 10/31/21

Non-GAAP Global Skillsoft Skillsoft Revenue Combined Knowledge Corp.^(1) Adjustments ^(2)

Revenues:

Total revenues $ 71,932 $ 139,636 $ 261,572 $ 48,465 $ 521,605

Operating expenses

Cost of revenues 34,698 35,881 76,897 22,874 170,350

Content andsoftware 492 24,084 26,316 50,892 development

Selling and 16,404 41,940 62,172 120,516 marketing

General and 19,765 17,217 45,194 82,176 administrative

Amortization of 2,646 50,902 57,087 110,635 intangible assets

Recapitalizationand - 6,938 13,682 20,620 acquisition-relatedcosts

Restructuring 2,764 (703 ) 1,093 3,154

Total operating 76,769 176,259 282,440 22,874 558,343 expenses

Operating loss: $ (4,837 ) $ (36,623 ) $ (20,868 ) $ 25,591 $ (36,737 )

Other income, net 624 407 (21,031 ) (20,000 )

Interest income - 64 30 94

Interest expense (11,970 ) (16,820 ) (17,366 ) (46,156 )



Loss before benefit (16,183 ) (52,972 ) (59,235 ) 25,591 (102,799 )from income taxes

Provision for(benefit from) 359 (3,708 ) (4,527 ) (7,876 )income taxes

Net loss $ (16,542 ) $ (49,264 ) $ (54,708 ) $ 25,591 $ (94,923 )



EBITDA COMPUTATION

Interest expense, $ 11,970 $ 16,756 $ 17,336 $ 46,062 net

Benefit from income 359 (3,708 ) (4,527 ) (7,876 )taxes

Depreciation and 4,119 54,474 61,396 119,989 amortization



EBITDA (94 ) 18,258 19,497 25,591 63,252



ADJUSTED EBITDA COMPUTATION

Plus: Non-recurringretention and 28 1,153 1,551 2,732 consulting costs

Plus:Recapitalizationand 8,862 6,938 16,038 31,838 acquisition-relatedcosts

Plus: Restructuringand contract 2,884 (703 ) 1,093 3,274 terminations

Plus: Integrationand migration - 1,160 1,383 2,543 related

Plus: Warrant fairvalue adjustment 377 134 20,714 21,225 and foreigncurrency

Plus: Impact offresh-start and - 23,395 - (25,591 ) (2,196 )purchase accounting

Plus: Stock-basedcompensation - - 9,034 9,034 expense

Plus: Other add (1,119 ) (300 ) 198 (1,221 )backs

Adjusted EBITDA $ 10,938 $ 50,035 $ 69,508 $ - $ 130,481



(1) GAAP results of Skillsoft Corp. include Global Knowledge subsequent to June11, 2021.(2) 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.

SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANICAL MEASURES (in thousands, unaudited)

For the Nine Months Ended October 31, 2020

For the Period from 2/1/20 to 10/31/20

For the Period from 2/1/20 to 8/27/20

For the Period from 8/28/20 to 10/31/20

Global Knowledge

Predecessor (PL)

Predecessor (SLH)

Non-GAAP Revenue Adjustments (1)

Combined

Revenues:

Total revenues

$

142,192

$

273,851

$

36,973

$

64,254

$

517,270

Operating expenses

Cost of revenues

78,527

52,160

15,882

19,862

166,431

Content and software development

1,751

38,986

10,919

51,656

Selling and marketing

30,896

75,028

18,193

124,117

General and administrative

24,186

37,455

10,075

71,716

Amortization of intangible assets

13,249

34,378

15,890

63,517

Impairment of intangible assets

59,553

332,376

-

391,929

Recapitalization and acquisition-related costs

-

32,099

8,225

40,324

Restructuring

6,373

1,179

80

7,632

Total operating expenses

214,535

603,661

79,264

19,862

917,323

Operating loss:

$

(72,343

)

$

(329,810

)

$

(42,291

)

$

44,392

$

(400,053

)

Other income (expense), net

(156

)

1,268

3,617

4,729

Interest income

-

105

9

114

Interest expense

(20,993

)

(168,341

)

(7,919

)

(197,253

)

Reorganization items, net

3,329,245

-

3,329,245

Loss before benefit from income taxes

(93,493

)

2,832,467

(46,584

)

44,392

2,736,783

Provision for (benefit from) income taxes

(733

)

68,455

(7,870

)

-

59,852

Net loss

$

(92,759

)

$

2,764,012

$

(38,714

)

$

44,392

$

2,676,931

EBITDA COMPUTATION

Interest expense, net

$

20,993

$

168,236

$

7,910

$

197,139

Benefit from income taxes

(733

)

68,455

(7,870

)

59,852

Depreciation and amortization

18,080

41,751

15,890

75,721

Impairment of goodwill and intangible assets

59,553

332,376

-

391,929

EBITDA

5,134

3,374,830

(22,784

)

44,392

3,401,572

ADJUSTED EBITDA COMPUTATION

Plus: Non-recurring retention and consulting costs

2,031

11,034

3,032

16,097

Plus: Recapitalization and acquisition-related costs

3,375

31,363

8,961

43,699

Plus: Restructuring and contract terminations

4,336

1,181

78

5,595

Plus: Integration and migration related

8

3,379

965

4,352

Plus: Foreign currency and other non-cash expense

(29

)

(1,119

)

(3,156

)

(4,304

)

Plus: Impact of fresh-start and purchase accounting

-

(3,329,245

)

41,442

(44,392

)

(3,332,195

)

Plus: Stock-based compensation expense

-

-

-

-

Plus: Other add backs

171

(33

)

(310

)

(172

)

Adjusted EBITDA

$

15,026

$

91,390

$

28,228

$

-

$

134,644

(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/20211213005985/en/

CONTACT: Investors James Gruskin james.gruskin@skillsoft.com

CONTACT: Media Caitlin Leddy caitlin.leddy@skillsoft.com