Skillsoft Corp. Form 8-K Summary
Business Context and Reporting Period
Filed under Item 4.02 on June 1, 2022, with the report signed June 3, 2022. The filing concerns Churchill Capital Corp. II, Skillsoft’s SPAC predecessor, in connection with a registration statement requiring audited financial statements for the year ended December 31, 2021.
Software Luxembourg Holding S.A. merged with the SPAC predecessor on June 10, 2021, after which the predecessor changed its name to Skillsoft Corp. The filing does not report current operating results for Skillsoft.
Financial and Accounting Matters
- The Audit Committee determined that specified SPAC predecessor financial statements should no longer be relied upon.
- Affected periods include the year ended December 31, 2020; balances and periods from July 1, 2019 through September 30, 2020; and the period from inception on April 11, 2019 through December 31, 2019.
- The required restatement relates to the classification of the SPAC predecessor’s temporary and permanent equity and the resulting initial carrying value of Class A common stock subject to possible redemption.
- Management determined that the Class A shares could become redeemable upon events outside the predecessor’s control. Under ASC 480, the shares should have been valued at $10.00 per share without considering the $5,000,001 net tangible asset limitation.
- The restatement will be included in the registration statement and does not affect Skillsoft’s continuing operations because the redeemable equity was eliminated in the Business Combination.
- The filing states that the restatement does not affect the SPAC predecessor’s cash position or cash held in its IPO trust account.
- The filing provides no current-period revenue, profit, cash flow, margin, debt, liquidity, or operating performance figures.
Material Changes, Outlook, and Risks
The principal material development is the non-reliance determination and planned restatement of the SPAC predecessor’s historical financial statements. The filing expressly states that, other than the predecessor financial statements, Skillsoft’s previously issued financial statements remain reliable in the form filed with the SEC.
No numerical guidance or updated operating outlook is provided. The filing includes customary forward-looking statement disclosures and identifies risks involving acquisition integration, economic and geopolitical conditions, COVID-19, personnel retention, third-party content providers, demand and competition, product development, cybersecurity and technology migration, regulation, internal controls, foreign exchange, intellectual property, capital raising, indebtedness, liquidity and restrictive covenants, litigation, and continued exchange-listing compliance.
The Audit Committee discussed the matter with Marcum LLP, the predecessor’s independent registered public accounting firm.
Investor Verification Checklist
- Verify the restated SPAC predecessor financial statements and related disclosures in the subsequent registration statement.
- Confirm the periods affected and the quantitative impact of the equity reclassification.
- Confirm that cash, the IPO trust account, and Skillsoft’s continuing operations were unaffected.
- Review Skillsoft’s Form 10-K for the fiscal year ended January 31, 2022 for current financial results, debt, liquidity, controls, and risk disclosures.
- Assess whether any subsequent filings identify additional accounting or reporting implications.