References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Churchill Capital Corp II. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to Churchill Sponsor II LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Quarterly Report and the Risk Factors section of the Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC. The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.





Overview

We are a blank check company formed under the laws of the State of Delaware for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

The issuance of additional shares of our stock in a Business Combination:





     •  may significantly dilute the equity interest of investors, which
        dilution would increase if the anti-dilution provisions in the Class B
        common stock resulted in the issuance of Class A shares on a greater
        than one-to-one basis upon conversion of the Class B common stock;
     •  may subordinate the rights of holders of common stock if preferred stock
        is issued with rights senior to those afforded our common stock;
     •  could cause a change of control if a substantial number of shares of our
        common stock are issued, which may affect, among other things, our
        ability to use our net operating loss carry forwards, if any, and could
        result in the resignation or removal of our present officers and
        directors;
     •  may have the effect of delaying or preventing a change of control of us
        by diluting the stock ownership or voting rights of a person seeking to
        obtain control of us; and
     •  may adversely affect prevailing market prices for our Class A common
        stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:





     •  default and foreclosure on our assets if our operating revenues after a
        Business Combination are insufficient to repay our debt obligations;
     •  acceleration of our obligations to repay the indebtedness even if we
        make all principal and interest payments when due if we breach certain
        covenants that require the maintenance of certain financial ratios or
        reserves without a waiver or renegotiation of that covenant;
     •  our immediate payment of all principal and accrued interest, if any, if
        the debt is payable on demand;
     •  our inability to obtain necessary additional financing if the debt
        contains covenants restricting our ability to obtain such financing
        while the debt is outstanding;
     •  our inability to pay dividends on our common stock;
     •  using a substantial portion of our cash flow to pay principal and
        interest on our debt, which will reduce the funds available for
        dividends on our common stock if declared, expenses, capital
        expenditures, acquisitions and other general corporate purposes;
     •  limitations on our flexibility in planning for and reacting to changes
        in our business and in the industry in which we operate;
     •  increased vulnerability to adverse changes in general economic, industry
        and competitive conditions and adverse changes in government regulation;
        and




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     •  limitations on our ability to borrow additional amounts for expenses,
        capital expenditures, acquisitions, debt service requirements, execution
        of our strategy and other purposes and other disadvantages compared to
        our competitors who have less debt.




Recent Developments

On October 12, 2020, we entered into the Skillsoft Merger Agreement with Skillsoft. Pursuant to the terms of the Skillsoft Merger Agreement, a business combination between us and Skillsoft will be effected through the merger of Skillsoft with and into us, with the Company surviving as the surviving company (the "Skillsoft Merger"). See Note 9 to Item 1 above for a description of the Skillsoft Merger Agreement and the transactions contemplated thereby.





Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through September 30, 2020 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2020, we had a net loss of $92,949, which consists of operating costs of $240,937, offset by interest income on marketable securities held in the Trust Account of $118,097, an unrealized gain on marketable securities held in our Trust Account of $5,184 and an income tax benefit of $24,707.

For the nine months ended September 30, 2020, we had net income of $1,303,184, which consists of interest income on marketable securities held in the Trust Account of $2,417,317, offset by operating costs of $768,783, an unrealized gain on marketable securities held in our Trust Account of $1,164 and a provision for income taxes of $346,514.

For the three months ended September 30, 2019, we had net income of $2,507,354, which consists of interest income on marketable securities held in the Trust Account of $3,530,496 and unrealized gain on marketable securities held in our Trust Account of $12,169, offset by formation and operating costs of $369,066, and a provision for income taxes of $666,245.

For the period from April 11, 2019 (inception) through September 30, 2019, we had net income of $2,506,354, which consists of interest income on marketable securities held in the Trust Account of $3,530,496 and unrealized gain on marketable securities held in our Trust Account of $12,169, offset by formation and operating costs of $370,066, and a provision for income taxes of $666,245

Liquidity and Capital Resources

On July 1, 2019, we consummated the Initial Public Offering of 69,000,000 Units at a price of $10.00 per Unit, which includes the full exercise by the underwriters of the over-allotment option, at $10.00 per Unit, generating gross proceeds of $690,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 15,800,000 Private Placement Warrants to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $15,800,000.

Following the IPO, the exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $690,000,000 was placed in the Trust Account. We incurred $34,319,807 in transaction costs, including $12,212,000 of underwriting fees, $21,371,000 of deferred underwriting fees and $736,807 of other costs.

As of September 30, 2020, we had marketable securities held in the Trust Account of $697,283,649 (including approximately $7,284,000 of interest income and unrealized losses) consisting of U.S. Treasury Bills with a maturity of 180 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through September 30, 2020, we withdrew $1,820,250 of interest earned on the Trust Account to pay our income taxes and for permitted withdrawals, of which $430,250 was withdrawn during the nine months ended September 30, 2020.

For the nine months September 30, 2020, cash used in operating activities was $923,534. Net income of $1,303,184 was affected by interest earned on marketable securities held in the Trust Account of $2,417,317, an unrealized gain on marketable securities held in our Trust Account of $1,164 and a deferred tax benefit of $9,413. Changes in operating assets and liabilities provided $201,176 of cash for operating activities.

For the period from April 11, 2019 (inception) through September 30, 2019, cash used in operating activities was $1,789,469. Net income of $2,506,354 was affected by interest earned on marketable securities held in the Trust Account of $3,530,496, an unrealized gain on marketable securities held in our Trust Account of $12,169 and a deferred tax provision of $2,555. Changes in operating assets and liabilities used $755,713 of cash for operating activities.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of September 30, 2020, we had cash of $1,744,991. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.





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In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the initial stockholders or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.00 per warrant at the option of the lender.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2020.





Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $20,000 for office space, administrative and support services to the Company. We began incurring these fees on June 26, 2019 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of $21,371,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that we do not complete a Business Combination, subject to the terms of the underwriting agreement. On July 1, 2019, the underwriters agreed to waive the upfront and deferred underwriting discount on 7,940,000 units, resulting in a reduction of the upfront and deferred underwriting discount of $1,588,000 and $2,779,000, respectively.





Critical Accounting Policies

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Common Stock Subject to Possible Redemption

We account for our common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of our condensed balance sheets.





Net Loss Per Common Share

We apply the two-class method in calculating earnings per share. Common stock subject to possible redemption which is not currently redeemable and is not redeemable at fair value, has been excluded from the calculation of basic net loss per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.





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Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

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