Filed by SmartForce Public Limited Company
pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange Act of 1933
Subject Company: SkillSoft Corporation
Commission File No. 000-28823
The following is the script for the conference call for reporters and analysts
held by SmartForce and SkillSoft Corporation on June 10, 2002, to discuss and
answer questions related to the planned merger between SkillSoft Corporation and
a wholly owned subsidiary of SmartForce:
Priest Script for Project Jazz Conference Call
GREG PRIEST:
I. Hello everyone. Welcome to our conference call discussing the pending
merger between SmartForce and SkillSoft. I am joined today by Chuck
Moran, SkillSoft's President and Chief Executive Officer, and Tom
McDonald, SkillSoft's Chief Financial Officer. Thank you for joining
us.
II. In a moment, I'm going to turn the call over to Chuck to walk us
through the basic terms of the merger and the resulting combined
company--specifically, how the companies will come together to form
what we believe will be the clear leading force in e-Learning. Tom will
then provide you some detail about the financials of our new company,
including revenue and profit guidance. We will then open the call to
your questions.
III. Before I turn the call over to Chuck, let me give you a perspective on
the merger--why are we doing it, why are we doing it now and what do we
think it means for the future of our newly combined company, and for
the future of our industry.
A. The answer, I think, is actually quite simple. We are doing this
deal because we believe that we have the potential to take the
clear, leading position in a very attractive market and that
bringing our companies together will significantly strengthen the
platform from which we can attack that market opportunity, and
significantly increase the likelihood of succeeding on our goal.
B. Regarding the market opportunity, the last year has been a tough
one for the e-Learning industry, as for enterprise software
generally. At the same time, while I would not willingly repeat
the experience of going through the last year again, one
significant positive development for our industry occurred over
the last year. That development was, simply, this: the market
landscape in our segment of the e-Learning industry has clarified
dramatically.
1. There is a simply vast amount of money spent by enterprises
on training their staffs. Estimates range from 75 to over 100
billion dollars every year. Now, the great majority of this
training occurs in traditional instructor-led formats. And it has
been obvious to many of us for some time that there is an
enormous market opportunity in delivering this training through
technology. I don't believe that at this point there can be any
question about the magnitude of that potential market.
a. What there have been questions about is how to get at
that market, where the money is going to be spent.
In trying to get at an answer to that question, investors
and industry analysts have created a variety of models of
the market. Most of these show their commonality in
dividing the market into a content segment, an
infrastructure, or technology, segment, and a services
segment.
b. There is still quite a bit of confusion about the
infrastructure segment--what are the categories of
e-Learning infrastructure that customers will want to buy
and which companies will be the long-term winners. Will
the independent LMS companies survive? Is content
management a viable product category? What role will the
large software companies and the ERP and CRM vendors play?
c. At the same time, real questions continue to
exist about the services segment. Can the custom content
development houses generate sustained profits at scale? Is
there an e-Learning systems integration opportunity? What
role will the consulting arms of the Big 5 and firms like
CSC and EDS play?
d. These are all valid questions, and while I have
my opinions on the probable answers to them, the fact is
that the jury is still out on many of them. With respect
to the content area, however, the landscape has clarified
considerably.
(1) It is clear that there is a market of some
significant size for generic content. SmartForce
alone has shown that, and companies like SkillSoft
and NETg have demonstrated it as well.
(2) It is clear that it is possible to generate profits
in this market, at scale. Notwithstanding the fact
that we built up our cost base more quickly than in
the event proved to be appropriate, SmartForce has
successfully generated profits. And based on our
recent cost reduction initiatives, we are well on our
way to returning to profitability. SkillSoft is now
profitable. And NETg was profitable for a number of
years.
(3) The fact is, in short, that there is a large market
opportunity for generic e-Learning content, companies
have successfully built franchises in that market,
and those markets can support quite profitable
businesses.
C. If I had to identify one reason why we are doing this
deal, it would be this: Together, we have the
opportunity, at a
reasonably early stage in the development of the
market, to take an obviously leading position in the
content arena. SmartForce is the leader in IT, sales
and CRM content. SkillSoft is the leader in
interpersonal skills. Both companies have a strong
presence in other generic content areas. The
combination of the two companies' strengths
solidifies our ability to further penetrate and
address enterprises' training needs and so powerfully
expands on our already strong competitive position.
D. Moreover, it is also clear that there are a wide
variety of applications outside of the formal
training function for e-Learning. There are a number
of business processes that are performed within
enterprises that involve the transfer of knowledge
around the business that are not formally part of the
training function. These business processes include
managing contact centers, launching products, rolling
out new enterprise software applications and getting
new sales hires up to quota productivity.
E. SmartForce has begun to pursue these applications
through our solution sets. Long term, we believe that
these are some of the most exciting opportunities for
the combined company. These "packaged solutions" are
some of the stronger elements of SmartForce's current
sales pipeline. Moreover, since they are built from a
combination of generic content, infrastructural
technologies and services, no one other than
SmartForce has been successful in bringing such an
application to market.
F. We believe that we can build on our position in
content to establish the industry's strongest
packaged solutions business as well.
G. So far, I've been talking about long term strategic
rationales for the deal, but there are some immediate
benefits as well.
1. First, we have the potential to leverage dramatic
cost benefits.
a. SmartForce has just reduced its cost base considerably.
On April 18, we announced that we intended to make 421
job cuts (or approximately 20% of our workforce). That
has now been achieved. It would be difficult to pursue
more aggressive cuts, however, because, as we discussed
on
our April 18 conference call, to do so would potentially
put our backlog at risk.
b. But much of our planned expenditures for next year
overlapped with SkillSoft's. We can therefore
significantly reduce our planned expenditures for next
year, while maintaining, and even increasing, the
resources we will devote to content build, software,
support and the like.
2. Second, we strengthen the management team, I
believe dramatically.
a. At SmartForce, I was acting as Chairman, CEO and
President. Chuck has effectively had a similar role at
SkillSoft. SmartForce needed to reduce the span of
control of our top management, and SkillSoft was going
to face the same issue in the near future. We are
combining what I believe (from an admittedly biased
perspective) to be the two best management teams in the
industry to create what is certainly the most
experienced team in the industry, bar none.
b. And I really think the management culture is
strong. I know that everybody who does a merger always
talks about how happy they are to be doing the deal, but
in our case, Chuck and I have known each other for many
years. We have been competitors, and I can say without
hesitation that I have always held him in the greatest
respect. We have looked at bringing our businesses
together in the past, and for one reason and another
have not been able to make it happen. I think Chuck and
I both genuinely believe that we have complementary
strengths, and there is no one I would rather be working
with to drive our company, and our industry, forward.
IV. I'm now going to hand off to Chuck. But before I do, I'd like to make
one final comment, and that is to address why we're doing this now.
A. I can say without hesitation that now would not have
been a good time to sell SmartForce. I think that there
is great value to be created for shareholders simply by
returning SmartForce to profitability and growth, and I
do not have the slightest doubt about our ability to
achieve that.
B. At the same time, what this deal does is powerful in
the immediate, and the long term. Immediately, we can
achieve major efficiencies and cost savings together
that would have been practically impossible apart. This
will allow us, I
believe, to deliver strong earnings, even if the
challenging environment we are presently in continues.
Over the longer term, I genuinely believe that this
deal positions us as an e-Learning powerhouse. When the
market does turn, and it will, we will be in a unique
position to leverage that turn.
C. On a personal note, I and my executive team are very
excited to have the opportunity to work with Chuck and
his team to build what we believe can be the strongest
corporate e-Learning company in the world now and over
the long term.
I'd now like to turn the call over to Chuck and Tom to discuss the combined
company.
CHUCK MORAN:
Let me talk briefly about the deal.
Financially, this is a merger of equals, but where SmartForce is receiving a
premium to its current market price as we bring the companies together. The
premium that SmartForce shareholders are receiving amounts to approximately 30%
using a 30-day trailing average and approximately 19% using today's close.
Looking at the same point from another angle, for each share a SmartForce
shareholder owns, they will effectively receive value of $7.88 using a 30-day
trailing average, and $6.38 using Friday's close.
Following the deal, former shareholders of SmartForce will hold approximately
58% of the combined company. Former shareholders of SkillSoft will hold
approximately 42% of the combined company.
Legally, rather than creating a new company and issuing shares to both sets of
shareholders from the new company, we are structuring this transaction as a
merger of SkillSoft into a newly formed subsidiary of SmartForce. Legally,
SmartForce will be issuing shares to the former shareholders of SkillSoft, and
SmartForce will be the surviving corporation legally.
The deal will be tax free and will be accounted for as a purchase. The deal is
subject to the approval of both companies' shareholders, antitrust clearance and
other customary conditions. We expect the deal to close by the end of the third
quarter.
Let me briefly move from a financial point of view to an operational point of
view. Operationally, this is a true merger of equals. We are taking the
strongest elements of each of our companies, and bringing them together. Our
goal is simple--to be the leading player in the e-Learning content and packaged
solutions landscape. We believe that the combined company has the power to
generate the outsize returns that tend to flow to companies that are leaders in
a market space. Customers are looking for a provider that can offer
comprehensive e-Learning solutions, and who brings financial stability and
long-term dependability. Together we are better positioned than any other player
in the market to be our customers' long-term partner for their e-Learning needs.
In terms of management, Greg will be Chairman of the Board and Chief Strategy
Officer, and I will be Chief Executive Officer. I will run the day to day
business of the company. Greg will spend his time helping to bring to fruition
some of our strategic initiatives that have the power to act as catalysts of the
company's growth over time. Our management team will consist of three executives
from SmartForce and three from SkillSoft, all reporting directly to me. Tom
McDonald, from SkillSoft, will be the Company's Chief Financial Officer. Jeff
Newton, from SmartForce, and Jerry Nine, from SkillSoft, will run the key
business units, with Jeff running the complex solutions business and Jerry
focusing on the content business. Paul Henry, from SmartForce, will run
corporate marketing and customer support. Mark Townsend, from SkillSoft, will
run software development. And Colm Darcy, from SmartForce, will run content
development.
Regarding the board, three members of the board will be from SmartForce, three
members will be from SkillSoft, and we have identified a new, seventh director
who has not previously served on either company's board and who was originally
nominated by SkillSoft. All seven board members have already been identified.
Our plan is to select a new name for the combined company that is different from
both of the companies' existing names, and we are working on the alternatives
now. Depending on the availability of appropriate names, we may continue with
one of the existing names.
Corporate headquarters of the combined company will be in Dublin, Ireland, where
SmartForce is headquartered. North American headquarters will be in Nashua, New
Hampshire, SkillSoft's headquarters. The company expects to maintain a
significant presence in Redwood City, California, which is SmartForce's North
American headquarters.
The companies' fiscal years are different by one month. In order to reduce the
impact of the deal on our sales forces, we will adopt SkillSoft's fiscal year
end of January 31.
On behalf of everyone at SkillSoft, I'd like to express our excitement about
this transaction. As Greg mentioned, the next growth phase of the e-Learning
industry will be driven by vendors like us providing solutions designed to meet
comprehensive enterprise-wide training needs, and this transaction positions us
to capture a leading share of this growing market. As companies continue to
manage their costs, the future of the e-Learning industry is very positive, and
we believe that properly designed e-Learning solutions can effectively and
economically help companies control costs and help them become more competitive.
While each company individually has a strong offering of e-Learning solutions,
together we can provide customers with access to tremendous breadth and depth of
IT and Critical Business Skills content. Currently, SkillSoft offers customers
one the largest e-Learning Business Skills libraries and SmartForce offers one
of the largest IT, sales and CRM content libraries that together, can target
sales, marketing, IT, HR, operations, channel and customer service departments.
SkillSoft has over 1,500 courses, translations and simulations. With the
addition of the recently integrated Book 24x7 acquisition, we have added over
2,000 digitized IT and Business books to comprise our ReferenceWare offering.
SmartForce has over 1,500 courses in 10 languages, real-time mentors,
interactive workshops, and role-play simulations. The combined entity will have
over 3,000 courses and simulations along with over 2,000 Referenceware products,
which will be supported by a comprehensive infrastructure.
Just as important as products; is the distribution and support of those
solutions. We believe that our complementary sales and distribution approaches
will be a significant strength for the company. We both employ a direct sales
approach, which will allow us to capitalize on significant cross-sell
opportunities that exist. Our sales forces post closing will begin joint-selling
immediately. Although both companies call on the Global 5000, there is minimal
overlap of the products actually sold to our respective customers in this
target market. We believe that the majority of SmartForce's customers will be
excellent prospects for SkillSoft's Critical Business skills offering and since
SkillSoft has just begun its sales efforts on IT products, we have a great
opportuntiy to sell IT in addition to sales and CRM to all of our customers that
are not presently SmartForce accounts.
Importantly, we are also going to leverage SmartForce's strong Indirect sales
channel through their international presence and channel partnerships which
accounts for approximately 25-30% of their revenues. As a point of reference,
SkillSoft's long-term target model of Direct versus Indirect sales is
approximately 25-30%. As of today SkillSoft's percentage is much smaller,
approximately 10-15%.
Another important note is that our respective sales forces have extensive
experience in selling e-Learning solutions and although we will train the sales
forces on products, they already have the experience of selling technology
delivered e-Learning solutions to the Global 5000.
In terms of synergies, we have identified significant cost savings that Tom will
walk you through in a moment. Tom will also discuss how the combined company
will standardize on SkillSoft contracting methodology which will result in
forward visibility.
Our Strategy in running the combined business is to grow top and bottom line but
when balancing the two, we will prioritize bottom line. We feel that our
business model lends itself to leverage and we intend to take advantage of that.
Both companies have high gross and operating margin models with cost structures
that are comprised of primarily headcount. We expect to continue focusing on
generic solutions such that as revenues increase, costs remain constant and the
result will be positive margin growth with high earnings potential.
Although no integration is easy, we are confident in our ability to integrate
the companies with minimal disruption due to our familiarity with each others'
business model, compatible corporate cultures, minimal product overlap, shared
direct sales approach and
an experienced management team. We have a detailed integration plan that is
broken into departmental analysis and plan on combining the two companies with
little disruption to customers and partners.
Given the size of this merger and the affect the accounting regulations will
have on the financials, we thought it advantageous to have Tom walk you through
the details. Tom?
TOM MCDONALD:
Thanks, Chuck. Good afternoon, everyone. I am excited about the opportunities
that the combination of SkillSoft and SmartForce can provide to customers,
investors, employees and partners. Let me provide some of the financial
highlights this combined company should achieve. First, it will be accretive to
SmartForce shareholders immediately excluding deal related costs and intangible
amortization, and accretive to SkillSoft shareholders in fiscal year ending
January 31,2004. Second, substantial cost synergies have been identified
leveraging the strengths of both organizations while eliminating redundancy and
underperforming operations and assets. Third, revenue synergies provide an
upside due to cross selling opportunities, but are not required or assumed to
make this deal accretive as stated. Fourth, this combination positions the
combined company for future growth and profitability.
There are key accounting and financial reporting impacts that I would like to
bring to your attention. First: SkillSoft will be the acquirer in this
transaction for accounting purposes as determined by the SEC. This means that,
despite the fact that SmartForce is issuing shares in this transaction, the
transaction will be accounted for considering SkillSoft as the acquirer. The
determination of who is treated as the acquirer for accounting purposes is
driven by FAS 141. Therefore, the purchase accounting impact will cause the
combined company to lose a significant amount of SmartForce's balance sheet
deferred revenue to goodwill. It will create intangible assets requiring a
non-cash quarterly amortization expense and also, a one-time charge for
transaction related expenses. Second: The accounting methods and customer
contracting will standardize around SkillSoft's current policies, resulting in
more contracts using subscription revenue recognition instead of delivery-based
up front recognition. We support this conversion because it is the most
conservative position and provides enhanced financial visibility and
stability. As we undertake the conversion of up-front license based revenues to
subscription, we will see a one time reduction in revenue as revenue recognized
under converted contracts is pushed out to future periods. Third: The
combination will also result in some commercial overlap that will result in loss
of revenue in the short term. This involves a select number of situations where
the nature of our contract, such as an "all product inclusive" contract, will
result in a renegotiation of fees, or where the combined offering for common
customers drives a more attractive pricing structure according to our standard
fee schedules. In addition, our intention to de-emphasize custom service revenue
activities to focus on the higher margin segments of the business will result in
a modest amount of lost revenue growth.
Before explaining the financial guidance for the combined company for fiscal
year 2003 and 2004, I would like to review the current guidance for both
companies as stand alone entities for calendar year 2002 and SkillSoft's fiscal
year ending January 31, 2003, to set a baseline for assessing the combined
company numbers. The assumption is the merger will close on September 30, 2002.
The fiscal year end will be January 31, 2003.
. SmartForce has provided revenue baseline guidance on Q4 calendar year 2002,
with a range of $48 to $52 million and a midpoint of $50.0 million, with
corresponding net income before amortization of approximately $1.0 million.
. SkillSoft has provided revenue baseline guidance for the fiscal year ending
January 31, 2003 with a range of $72 to $74 million and a midpoint of
approximately $73.5 million and a corresponding net income of approximately
$10.0 million, consistent with our previously stated guidance. The combined
revenue for fiscal year 2003, therefore, is approximately $124 million with
net income of $11.0 million before amortization and deal related expenses.
. Non-Cash accounting adjustments to the $124.0 midpoint revenue number will
be:
. lost deferred revenue of $13.0 million and
. $8.0 million of up front license revenue converted to subscription revenue
. Other adjustments due to business overlap and realignment are expected to
be $3.5 million due to de-emphasizing growth in the custom service area as
well as commercial overlap and business realignment.
. The total revenue adjustment for the fourth quarter would therefore be
$24.5 million again, $21 million of which has no cash impact.
.. On the cost synergy side, cost stabilization in the custom service area,
immediate reduction of overlap product build plans, immediate reduction of
overlap marketing expenditures and redundant public company, depreciation
and facility costs will allow an expected $6.5 million reduction.
.. Taking into account our full year as well as SmartForces's Q4 under
purchase accounting, the pro forma fiscal year 2003 results are expected to
be approximately $99 million and net loss before amortization and taxes of
$7.0 million resulting in a pro forma EPS of ($0.06) loss per basic and
diluted share.
Moving on to calendar year 2003 / fiscal year 2004, we will first discuss the
standalone financial guidance for SmartForce and SkillSoft. For the fiscal year
ending January 31, 2004, SkillSoft is reaffirmed at $92-97 million, with EPS of
$0.83-0.91 per share. I'll now turn it back to Greg to briefly introduce
standalone guidance for SmartForce.
GREG PRIEST:
Thanks, Tom.
As you are aware, to this point in time we have not shared formal guidance on
the calendar year 2003. Have focused on our restructuring and developed a more
comprehensive understanding of our operating structure for the forward year, we
are introducing 2003 guidance today and feel confident in our ability to
deliver.
For the calendar year 2003, we are estimating revenue of approximately $220-230
million, and EPS of approximately $0.34-42 cents per share. This compares to
2002 guidance previously shared of approximately $180-185 million and a net loss
of ($0.40) to ($0.50) per share.
With that guidance, I'll turn it back to Tom to more fully describe our combined
expectations for the merged company.
TOM MCDONALD:
Thanks, Greg. With that baseline guidance set for each company, I'll move on to
assessing the combined company numbers as follows:
.. The SmartForce baseline revenue is the midpoint $225.0 million with a net
income midpoint before amortization of approximately $24.0 million.
.. The SkillSoft baseline revenue is the midpoint $95.0 million on the
guidance range of $92 to $97 million with net income of approximately $18.0
million The combined midpoint baseline revenue therefore is $320 million
with net income of approximately $42.0 million before amortization and one
time charges.
.. Non-Cash accounting adjustments to the $320.0 revenue number will be lost
deferred revenue of $25.0 million and a $22.0 million adjustment of up
front license revenue converted to subscription revenue.
.. Cash adjustments due to commercial overlap and business realignment would
be $18.0 million due to de-emphasizing growth in the custom service area as
well as commercial overlap situations.
.. Therefore, the total revenue adjustment for the year would be a $65.0
million, comprised of $47 million non-cash accounting adjustments and $18
million of other adjustments due to commercial overlap and business
realignment.
.. On the cost synergy side:,
.. cost stabilization in the custom service area for approximately $4.0
million of savings, o reduction of overlap product build plans, reduction
of R&D platform & simulation redundancies as well as consolidating the
learning delivery technology would result in cost savings of approximately
$10 million.
.. Reduction of marketing expenditures to be more in line with the SkillSoft
model and eliminating redundant sales management and the bottom 20% sales
and support performers would result in cost savings of approximately $39.0
million.
.. And redundant facilities, public company costs, accounting, legal and
general administrative costs would result in additional cost savings of
approximately $13.0 million.
.. The net adjusted impact for calendar year 2003 and SkillSoft's fiscal year
2004 will be combined revenue of $255.0 million with a net profit of
approximately $43 million before amortization for a pro forma EPS of
approximately $0.39 per diluted share.
The combined company's target long-term operating model is 86% to 88% gross
margin, 17% to 18% for product development, 40% to 42% for sales and marketing,
6% to 7 % for G&A to achieve a 19% to 25% operating profit. We would target
annual revenue growth to be 20% plus and target EPS growth to be 30% plus.
Additionally, looking forward, we expect our combined diluted share count as of
January 31 2003 to be approximately 107 to 108 million shares, and January 31
2004 to be approximately 110 to 111 million shares, excluding the effect of any
future acquisitions
I would now like to open the call up for questions. Operator?
------------
Additional Information And Where To Find It
SmartForce intends to file a registration statement on Form S-4 in connection
with the transaction, and SmartForce and SkillSoft intend to mail a joint proxy
statement/prospectus to their respective stockholders in connection with the
transaction. Investors and security holders of SmartForce and SkillSoft are
urged to read the joint proxy statement/prospectus when it becomes available
because it will contain important information about SmartForce, SkillSoft and
the transaction. Investors and security holders may obtain a free copy of the
joint proxy statement/prospectus (when it is available) at the SEC's web site at
www.sec.gov. A free copy of the joint proxy statement/prospectus may also be
obtained from SmartForce or SkillSoft. SmartForce and its executive officers and
directors may be deemed to be participants in the solicitation of proxies from
the stockholders of SmartForce and SkillSoft in favor of the transaction.
SkillSoft and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from the stockholders of SmartForce
and SkillSoft in favor of the transaction. Information regarding SmartForce's
directors and executive officers is contained in SmartForce's Form 10-K for the
year ended December 31, 2001, as amended, which is filed with the SEC. As of May
31, 2002, SmartForce's directors and executive officers beneficially owned
approximately 4.5 percent of SmartForce's outstanding voting stock. Information
regarding SkillSoft's executive officers is contained in SkillSoft's Form 10-K
for the year ended January 31, 2002 and its proxy statement dated May 13, 2002,
which are filed with the SEC. As of May 31, 2002, SkillSoft's directors and
executive officers beneficially owned approximately 43 percent of SkillSoft's
outstanding common stock. A description of employment agreements and other
interests of the SmartForce and SkillSoft directors and officers will be
available in the registration statement and the joint proxy
statement/prospectus.
In addition to the registration statement on Form S-4 to be filed by SmartForce
in connection with the transaction, and the joint proxy statement/prospectus to
be mailed to the stockholders of SmartForce and SkillSoft in connection with the
transaction, each of SmartForce and SkillSoft file annual, quarterly and special
reports, proxy and information statements, and other information with the SEC.
Investors may read and copy any of these reports, statements and other
information at the SEC's public reference
rooms located at 450 5th Street, N.W., Washington, D.C., 20549, or any of the
SEC's other public reference rooms. Investors should call the SEC at
1-800-SEC-0330 for further information on these public reference rooms. The
reports, statements and other information filed by SmartForce and SkillSoft with
the SEC are also available for free at the SEC's web site at www.sec.gov. A free
copy of these reports, statements and other information may also be obtained
from SmartForce or SkillSoft.
Forward Looking Statements
This document contains 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, including statements regarding expected
synergies, the effect of the merger on long-term customer and shareholder value,
the ability to grow revenues and profits, the return on training investments for
the companies' customers, timing of closing, industry ranking, execution of
integration plans, management and organizational structure, the name of the
combined company, and the tax effect to the shareholders of both companies. All
forward-looking statements in this document are subject to risks, uncertainties
and assumptions that could cause actual results or events to differ materially
from those contained in the forward-looking statements. The factors that could
cause actual results or events to differ include, but are not limited to, the
possibility that the market for the sale of certain products and services may
not develop as expected, that development of these products and services may not
proceed as planned, that the transaction does not close, that the companies may
be required to modify aspects of the transaction to achieve regulatory approval,
that prior to the closing of the proposed merger, the businesses of the
companies suffer due to uncertainty, that the parties opt for a different name
for the combined company or that the parties are unable to transition customers,
successfully execute their integration strategies, or achieve planned synergies.
Additional factors that could cause actual results or events to differ
materially from those in the forward-looking statements are included in
SmartForce's and SkillSoft's filings with the Securities and Exchange
Commission, specifically SmartForce's annual report on Form 10-K for the year
ended December 31, 2001, SkillSoft's quarterly report on Form 10-Q for the
quarter ended April 30, 2002, and subsequently filed reports. The
forward-looking information provided by SmartForce and SkillSoft in this
document represents SmartForce's and SkillSoft's views as of June 10, 2002.
SmartForce and SkillSoft anticipate that subsequent events and developments may
cause these views to change. However, while SmartForce and SkillSoft may elect
to update this forward-looking information at some point in the future,
SmartForce and SkillSoft specifically disclaim any obligation to do so. This
forward-looking information should not be relied upon as representing
SmartForce's or SkillSoft's views at any date subsequent to the date of this
document.