|
Singapore
|
| |
8200
|
| |
Not Applicable
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification number) |
|
|
Barry Grossman, Esq.
Benjamin S. Reichel, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105 Tel: (212) 370-1300 Fax: (212) 370-7889 |
| |
Rob Condon, Esq.
Dentons US LLP 1221 Avenue of the Americas New York, NY 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 |
|
| | | |
Emerging growth company
☒
|
|
Title of Each Class of Securities to be Registered
|
| |
Proposed Maximum
Aggregate Offering Price(2) |
| |
Amount of
Registration Fee |
| ||||||
Ordinary shares, no par value per share(1)(3)
|
| | | $ | 46,000,000 | | | | | $ | 5,019 | | |
Warrants to be issued to the representative of the underwriters(4)
|
| | | | — | | | | | | — | | |
Ordinary shares underlying warrants to be issued to the representative of the underwriters(5)
|
| | | $ | 2,875,000 | | | | | $ | 314 | | |
Total | | | | $ | 48,875,000 | | | | | $ | 5,333 | | |
|
PRELIMINARY PROSPECTUS
|
| |
SUBJECT TO COMPLETION
|
| |
DATED JULY 6, 2021
|
|
| | |
Per Share
|
| |
Total
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds to us, before expenses
|
| | | $ | | | | | $ | | | |
| | |
Page
|
| |||
| | | | 1 | | | |
| | | | 4 | | | |
| | | | 18 | | | |
| | | | 20 | | | |
| | | | 22 | | | |
| | | | 42 | | | |
| | | | 44 | | | |
| | | | 45 | | | |
CAPITALIZATION | | | | | 46 | | |
DILUTION | | | | | 48 | | |
| | | | 50 | | | |
| | | | 56 | | | |
| | | | 58 | | | |
| | | | 60 | | | |
BUSINESS | | | | | 72 | | |
MANAGEMENT | | | | | 103 | | |
| | | | 109 | | | |
| | | | 110 | | | |
| | | | 112 | | | |
| | | | 135 | | | |
| | | | 137 | | | |
UNDERWRITING | | | | | 144 | | |
| | | | 149 | | | |
| | | | 150 | | | |
EXPERTS | | | | | 150 | | |
| | | | 150 | | | |
| | | | 152 | | | |
| | | | F-1 | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | $ | 24,191 | | | | | $ | 7,634 | | | | | $ | 9,949 | | |
Cost of goods sold
|
| | | | (9,326) | | | | | | (4,704) | | | | | | (5,121) | | |
Gross profit (Loss)
|
| | | | 14,865 | | | | | | 2,930 | | | | | | 4,828 | | |
Other Operating Income
|
| | | | 274 | | | | | | 11 | | | | | | 1,187 | | |
Operating Expenses
|
| | | | (16,859) | | | | | | (6,192) | | | | | | (7,151) | | |
Operating profit (Loss)
|
| | | | (1,720) | | | | | | (3,251) | | | | | | (1,136) | | |
Other income
|
| | | | 1,218 | | | | | | 412 | | | | | | 784 | | |
Other Expense
|
| | | | (975) | | | | | | (854) | | | | | | (864) | | |
Net Income (Loss) Before Tax
|
| | | | (1,477) | | | | | | (3,693) | | | | | | (1,216) | | |
Tax Expense
|
| | | | (122) | | | | | | 216 | | | | | | (95) | | |
Net Income (Loss) After Tax
|
| | | | (1,599) | | | | | | (3,477) | | | | | | (1,311) | | |
Other Comprehensive Income
|
| | | | 2,129 | | | | | | 2,129 | | | | | | (308) | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Total Comprehensive Income (Loss)
|
| | | $ | 530 | | | | | $ | (1,348) | | | | | $ | (1,619) | | |
Net income per share, basic and diluted
|
| | | | 0.03 | | | | | | (0.10) | | | | | | (0.17) | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 18,247,056 | | | | | | 12,949,404 | | | | | | 9,742,998 | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Summary Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Total current assets
|
| | | $ | 27,346 | | | | | $ | 4,937 | | | | | $ | 5,806 | | |
Total non-current assets
|
| | | | 83,600 | | | | | | 48,848 | | | | | | 25,776 | | |
Total Assets
|
| | | | 110,946 | | | | | | 53,785 | | | | | | 31,582 | | |
Total current liabilities
|
| | | | 11,545 | | | | | | 5,379 | | | | | | 6,202 | | |
Total non-current liabilities
|
| | | | 10,764 | | | | | | 7,164 | | | | | | 6,608 | | |
Total Liabilities
|
| | | | 22,309 | | | | | | 12,543 | | | | | | 12,810 | | |
Total Shareholders’ Equity
|
| | | | 88,637 | | | | | | 41,242 | | | | | | 18,772 | | |
Total Liabilities and Shareholders’ Equity
|
| | | | 110,946 | | | | | | 53,785 | | | | | | 31,582 | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Net Income (Loss)
|
| | | $ | (1,599) | | | | | $ | (3,477) | | | | | $ | (1,311) | | |
Tax Expense
|
| | | $ | 123 | | | | | $ | (216) | | | | | $ | 95 | | |
Interest Expense, net
|
| | | $ | 975 | | | | | $ | 854 | | | | | $ | 864 | | |
Depreciation and Amortization
|
| | | $ | 2,975 | | | | | $ | 2,140 | | | | | $ | 1,359 | | |
Goodwill Impairments
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
Stock Based Compensation
|
| | | $ | 395 | | | | | $ | 395 | | | | | $ | 172 | | |
Bad Debt Provision
|
| | | $ | 1,701 | | | | | $ | 162 | | | | | $ | — | | |
Adjusted EBITDA
|
| | | $ | 4,570 | | | | | $ | (142) | | | | | $ | 1,179 | | |
| | |
Pre-IPO Group
Year Ended December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Number of students
|
| | | | 1,800,520 | | | | | | 1,553,132 | | |
Number of Free Students
|
| | | | 1,766,600 | | | | | | 1,522,652 | | |
Number of Paid Students
|
| | | | 33,920 | | | | | | 30,470 | | |
Number of Partners
|
| | | | 9,399 | | | | | | 7,611 | | |
Number of countries of operation
|
| | | | 191 | | | | | | 190 | | |
Marketing Spend
|
| | | $ | 467,508 | | | | | $ | 542,087 | | |
Average Acquisition Cost per Student
|
| | | $ | 0.76 | | | | | $ | 0.74 | | |
Average Annual Revenue per Student
|
| | | $ | 15.48 | | | | | $ | 8.74 | | |
Average LTV (Lifetime Value) per Student
|
| | | $ | 46.44 | | | | | $ | 26.23 | | |
Average Acquisition Cost per Partner
|
| | | $ | 26.15 | | | | | $ | 40.07 | | |
Average Annual Revenue per Partner
|
| | | $ | 618.47 | | | | | $ | 805.79 | | |
| | |
Pre-IPO Group
Year Ended December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Average LTV (Lifetime Value) per Partner
|
| | | $ | 1,885.40 | | | | | $ | 2,417.40 | | |
EBIDTA margin
|
| | | | 18.88% | | | | | | 6.85% | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD000’ s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Digital Education Revenue
|
| | | $ | 20,787 | | | | | $ | 5,298 | | | | | $ | 4,771 | | |
In-Person Education Revenue
|
| | | $ | 1,388 | | | | | $ | 320 | | | | | $ | 746 | | |
Total Education Revenue
|
| | | $ | 22,175 | | | | | $ | 5,618 | | | | | $ | 5,517 | | |
Campus Revenue
|
| | | $ | 2,016 | | | | | $ | 2,016 | | | | | $ | 4,432 | | |
Total Revenue
|
| | | $ | 24,191 | | | | | $ | 7,634 | | | | | $ | 9,949 | | |
| | |
Year Ended
December 31, 2020 (USD) |
| ||||||||||||
| | |
Actual
|
| |
Pro forma
|
| |
Pro forma
As Adjusted |
| ||||||
Cash and cash equivalents
|
| | | | 2,273,151 | | | | | | 4,067,400 | | | | | |
Capitalization: | | | | | | | | | | | | | | | | |
Long-term debt:
|
| | | | 1,689,268 | | | | | | 3,505,891 | | | | | |
Shareholders’ equity:
|
| | | | 48,980,867 | | | | | | 61,134,486 | | | | | |
16,155,810 ordinary shares issued and outstanding on an actual
basis, 16,155,810 ordinary shares issued and outstanding on an adjusted basis to reflect the surrender of an aggregate of 23,293,950 ordinary shares by the existing shareholders on [•], 2020 and [•] ordinary shares to be issued in this offering |
| | | | | | | | | | | | | | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | |
Reserve
|
| | | | 1,788,051 | | | | | | 1,788,051 | | | | | |
Accumulated deficit | | | | | (9,526,614) | | | | | | (9,935,370) | | | | | |
Total shareholders’ equity
|
| | | | 41,242,304 | | | | | | 52,987,167 | | | | | |
Total capitalization
|
| | | | 42,931,572 | | | | | | 56,493,059 | | | | | |
| | | | | | | | | | | | | | | | |
| | |
Per
Ordinary Share |
| |||
| | |
($)
|
| |||
Assumed initial public offering price per ordinary share . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | | | |
Historic net tangible book value per ordinary share as of December 31, 2020
|
| | | $ | 0.44 | | |
Pro forma increase in net tangible book value (deficit) per share as of December 31, 2020 before
giving effect to this offering |
| | | $ | 0.30 | | |
Pro forma net tangible book value per share as of December 31, 2020
|
| | | $ | 0.74 | | |
Pro forma as adjusted net tangible book value per share after giving effect to this offering
|
| | | | | | |
Pro forma as adjusted dilution per share to investors participating in this offering
|
| | | | | | |
| | | | | | | |
| | |
Ordinary Shares
Purchased |
| |
Total Consideration
|
| |
Average
Price Per Ordinary |
| |||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Share
|
| |||||||||
Existing shareholders (Issued)
|
| | | | 16,155,810 | | | | | | | | | 46,421,800 | | | | | | | | $ | 2.87 | | |
New investors
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Adjustments
|
| |
Footnotes
|
| |
Combined
Total |
| ||||||||||||||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 7,634 | | | | | | 10,078 | | | | | | 4,583 | | | | | | 1,068 | | | | | | 828 | | | | | | — | | | | | | | | | | | | 24,191 | | |
Cost of goods sold
|
| | | | (4,704) | | | | | | (2,881) | | | | | | (1,279) | | | | | | (462) | | | | | | — | | | | | | — | | | | | | | | | | | | (9,326) | | |
Gross profit (Loss)
|
| | | | 2,930 | | | | | | 7,197 | | | | | | 3,304 | | | | | | 606 | | | | | | 828 | | | | | | — | | | | | | | | | | | | 14,865 | | |
Operating Income
|
| | | | 12 | | | | | | 6 | | | | | | 16 | | | | | | 240 | | | | | | — | | | | | | — | | | | | | | | | | | | 274 | | |
Operating Expenses
|
| | | | (6,192) | | | | | | (6,164) | | | | | | (2,779) | | | | | | (614) | | | | | | (592) | | | | | | (518) | | | | | | 1 | | | | | | (16,859) | | |
Operating profit (Loss)
|
| | | | (3,250) | | | | | | 1,039 | | | | | | 541 | | | | | | 232 | | | | | | 236 | | | | | | (518) | | | | | | | | | | | | (1,720) | | |
Other income
|
| | | | 412 | | | | | | 807 | | | | | | (1) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,218 | | |
Other Expense
|
| | | | (854) | | | | | | (14) | | | | | | (80) | | | | | | (27) | | | | | | — | | | | | | — | | | | | | | | | | | | (975) | | |
Net Income (Loss) Before Tax
|
| | | | (3,692) | | | | | | 1,832 | | | | | | 460 | | | | | | 205 | | | | | | 236 | | | | | | (518) | | | | | | | | | | | | (1,477) | | |
Income Tax
|
| | | | 215 | | | | | | (27) | | | | | | (375) | | | | | | — | | | | | | (44) | | | | | | 109 | | | | | | 2 | | | | | | (122) | | |
Net Income (Loss) After Tax
|
| | | | (3,477) | | | | | | 1,805 | | | | | | 85 | | | | | | 205 | | | | | | 192 | | | | | | (409) | | | | | | | | | | | | (1,599 | | |
Other Comprehensive Income
|
| | | | 2,129 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 2,129 | | |
Total Income (Loss)
|
| | |
|
(1,348)
|
| | | |
|
1,805
|
| | | |
|
85
|
| | | |
|
205
|
| | | |
|
192
|
| | | |
|
(409)
|
| | | | | | | | | |
|
530
|
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Adjustments
|
| |
Footnotes
|
| |
Combined
Total |
| ||||||||||||||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 2,273 | | | | | | 1,679 | | | | | | 78 | | | | | | 36 | | | | | | 1 | | | | | | 10,533 | | | | | | 3 | | | | | | 14,600 | | |
Accounts receivable, net of
allowance |
| | | | 948 | | | | | | 5,352 | | | | | | 507 | | | | | | 5 | | | | | | 370 | | | | | | — | | | | | | | | | | | | 7,182 | | |
Other receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Inventory
|
| | | | 113 | | | | | | 62 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 175 | | |
Prepaid expenses and other assets
|
| | | | 1,549 | | | | | | 40 | | | | | | 27 | | | | | | 79 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,695 | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | 635 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 635 | | |
Loans receivable – related parties
|
| | | | 54 | | | | | | — | | | | | | 3,005 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 3,059 | | |
Total Current Assets
|
| | | | 4,937 | | | | | | 7,133 | | | | | | 4,252 | | | | | | 120 | | | | | | 371 | | | | | | 10,533 | | | | | | | | | | | | 27,346 | | |
Non Current Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 7,251 | | | | | | 1,219 | | | | | | 36 | | | | | | 38 | | | | | | 3 | | | | | | — | | | | | | | | | | | | 8,547 | | |
Intangible assets, net
|
| | | | 20,741 | | | | | | 24 | | | | | | — | | | | | | 598 | | | | | | 210 | | | | | | 8,517 | | | | | | 4 | | | | | | 30,090 | | |
Operating lease right-of-use asset
|
| | | | 1,664 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5 | | | | | | 1,664 | | |
Investments at fair value
|
| | | | 29 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 29 | | |
Goodwill
|
| | | | 18,647 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 23,862 | | | | | | 4 | | | | | | 42,509 | | |
Other non-current assets
|
| | | | 516 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 516 | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 245 | | | | | | — | | | | | | | | | | | | 245 | | |
Total Non-Current Assets
|
| | | | 48,848 | | | | | | 1,243 | | | | | | 36 | | | | | | 636 | | | | | | 458 | | | | | | 32,379 | | | | | | | | | | | | 83,600 | | |
Total Assets
|
| | | | 53,785 | | | | | | 8,376 | | | | | | 4,288 | | | | | | 756 | | | | | | 829 | | | | | | 42,912 | | | | | | | | | | | | 110,946 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 822 | | | | | | 253 | | | | | | 95 | | | | | | 4 | | | | | | 486 | | | | | | — | | | | | | | | | | | | 1,660 | | |
Accrued expenses and other current liabilities
|
| | | | 1,810 | | | | | | 726 | | | | | | 1,342 | | | | | | 132 | | | | | | — | | | | | | — | | | | | | | | | | | | 4,010 | | |
Deferred revenue
|
| | | | 1,547 | | | | | | 2,009 | | | | | | — | | | | | | 126 | | | | | | — | | | | | | — | | | | | | | | | | | | 3,682 | | |
Operating lease liabilities
|
| | | | 545 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5 | | | | | | 545 | | |
Loans payable
|
| | | | 65 | | | | | | 531 | | | | | | 33 | | | | | | 11 | | | | | | 9 | | | | | | — | | | | | | | | | | | | 648 | | |
Loans payable – related parties
|
| | | | 590 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 590 | | |
Income tax payable
|
| | | | — | | | | | | 34 | | | | | | 376 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 410 | | |
Total current liabilities
|
| | | | 5,379 | | | | | | 3,553 | | | | | | 1,846 | | | | | | 273 | | | | | | 495 | | | | | | — | | | | | | | | | | | | 11,545 | | |
Non-Current Liabilities
|
| | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating lease liabilities
|
| | | | 1,308 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5 | | | | | | 1,308 | | |
Loans payable
|
| | | | 157 | | | | | | 752 | | | | | | 451 | | | | | | 613 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,974 | | |
Loans payable – related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Adjustments
|
| |
Footnotes
|
| |
Combined
Total |
| ||||||||||||||||||||||||
Convertible Debt Obligation
|
| | | | 1,532 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,532 | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | (11) | | | | | | 7 | | | | | | — | | | | | | — | | | | | | | | | | | | (4) | | |
Deferred Tax Liability
|
| | | | 4,167 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,787 | | | | | | 6 | | | | | | 5,954 | | |
Total Non-Current liabilities
|
| | | | 7,164 | | | | | | 752 | | | | | | 440 | | | | | | 620 | | | | | | — | | | | | | 1,787 | | | | | | | | | | | | 10,764 | | |
Total liabilities
|
| | | | 12,543 | | | | | | 4,305 | | | | | | 2,286 | | | | | | 893 | | | | | | 495 | | | | | | 1,787 | | | | | | | | | | | | 22,309 | | |
Stockholders’ Equity:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 50,630 | | | | | | 710 | | | | | | — | | | | | | — | | | | | | — | | | | | | 47,095 | | | | | | 7 | | | | | | 98,435 | | |
Minority Interest
|
| | | | 251 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 251 | | |
Subscriptions receivable
|
| | | | (1,901) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | (1,901) | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | 784 | | | | | | — | | | | | | — | | | | | | (784) | | | | | | 7 | | | | | | — | | |
Retained earnings
|
| | | | (9,526) | | | | | | 3,361 | | | | | | 1,218 | | | | | | (137) | | | | | | 334 | | | | | | (5,186) | | | | | | 7 | | | | | | (9,936) | | |
Reserves
|
| | | | 1,788 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,788 | | |
Total Stockholders’ Equity
|
| | | | 41,242 | | | | | | 4,071 | | | | | | 2,002 | | | | | | (137) | | | | | | 334 | | | | | | 41,125 | | | | | | | | | | | | 88,637 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 53,785 | | | | | | 8,376 | | | | | | 4,288 | | | | | | 756 | | | | | | 829 | | | | | | 42,912 | | | | | | | | | | | | 110,946 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Developed Content
|
| | | | 2,500,000 | | | | | | 773,867 | | | | | | 702,489 | | | | | | 151,645 | | | | | | 4,128,001 | | |
Customer relationships
|
| | | | 500,000 | | | | | | 110,103 | | | | | | 99,948 | | | | | | 21,576 | | | | | | 731,627 | | |
Amortization
|
| | | | (321,429) | | | | | | (93,116) | | | | | | (84,527) | | | | | | (18,247) | | | | | | (517,319) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Income Tax Rate
|
| | | | 21% | | | | | | 25% | | | | | | 15% | | | | | | 28% | | | | | | | | |
Income Tax Provision
|
| | | | 67,500 | | | | | | 23,279 | | | | | | 12,679 | | | | | | 5,109 | | | | | | 108,567 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
IPO Proceeds
|
| | | | 40,000,000 | | |
|
Underwriting Cost
|
| | | | -3,400,000 | | |
|
Other IPO Cost
|
| | | | -950,000 | | |
|
Acquisition Cash Settlement
|
| | | | -25,117,402 | | |
|
Cash Adjustment to Pro forma
|
| | | | 10,532,598 | | |
| | | | | | | | |
| | |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
No of Shares Issues
|
| | | | 1,032,408 | | | | | | 697,494 | | | | | | 361,344 | | | | | | — | | | | | | 2,091,246 | | |
Share Price
|
| | | | 5.81 | | | | | | 5.81 | | | | | | 5.81 | | | | | | 5.81 | | | | | | 5.81 | | |
Share Value
|
| | | | 6,000,000 | | | | | | 4,053,614 | | | | | | 2,100,000 | | | | | | — | | | | | | 12,153,614 | | |
Cash Consideration
|
| | | | 24,000,000 | | | | | | 450,402 | | | | | | — | | | | | | 667,000 | | | | | | 25,117,402 | | |
Purchase Consideration
|
| | | | 30,000,000 | | | | | | 4,504,016 | | | | | | 2,100,000 | | | | | | 667,000 | | | | | | 37,271,016 | | |
Net Working Capital
|
| | | | 3,581,372 | | | | | | 2,406,112 | | | | | | -152,487 | | | | | | -123,807 | | | | | | 5,711,190 | | |
Property and equipment, net
|
| | | | 1,218,914 | | | | | | 35,998 | | | | | | 37,669 | | | | | | 3,433 | | | | | | 1,296,014 | | |
Intangible Assets
|
| | | | 23,345 | | | | | | 0 | | | | | | 597,904 | | | | | | 209,516 | | | | | | 830,765 | | |
Operating Lease Asset
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | — | | |
Goodwill
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | — | | |
Other Non-Current Assets
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 245,214 | | | | | | 245,214 | | |
Loan Payable
|
| | | | -752,808 | | | | | | -450,883 | | | | | | -612,933 | | | | | | 0 | | | | | | (1,816,624) | | |
Convertible Debt Obligation
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | — | | |
Lease Liability
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | — | | |
Other Non-Current Liabilities
|
| | | | 0 | | | | | | 11,335 | | | | | | -7,155 | | | | | | 0 | | | | | | 4,180 | | |
| | | | | 4,070,823 | | | | | | 2,002,562 | | | | | | -137,002 | | | | | | 334,356 | | | | | | 6,270,739 | | |
Developed Content (10 Years)
|
| | | | 2,500,000 | | | | | | 773,867 | | | | | | 702,489 | | | | | | 151,645 | | | | | | 4,128,001 | | |
Trade names and trademarks
|
| | | | 2,500,000 | | | | | | 795,887 | | | | | | 722,479 | | | | | | 155,961 | | | | | | 4,174,327 | | |
Customer relationships (7 Years)
|
| | | | 500,000 | | | | | | 110,103 | | | | | | 99,948 | | | | | | 21,576 | | | | | | 731,627 | | |
Intangible Assets (Adjustment)
|
| | | | 5,500,000 | | | | | | 1,679,857 | | | | | | 1,524,916 | | | | | | 329,182 | | | | | | 9,033,955 | | |
Amortization of Intangible Assets
|
| | | | (321,429) | | | | | | (93,116) | | | | | | (84,527) | | | | | | (18,247) | | | | | | (517,319) | | |
Intangible Assets (Net)
|
| | | | 5,178,571 | | | | | | 1,586,741 | | | | | | 1,440,389 | | | | | | 310,935 | | | | | | 8,516,636 | | |
Goodwill
|
| | | | 20,429,177 | | | | | | 821,596 | | | | | | 712,087 | | | | | | 3,463 | | | | | | 21,966,323 | | |
Adjustment to Goodwill (As per Note 6)
|
| | | | 1,155,000 | | | | | | 419,964 | | | | | | 228,737 | | | | | | 92,171 | | | | | | 1,895,872 | | |
Total Goodwill
|
| | | | 21,584,177 | | | | | | 1,241,560 | | | | | | 940,824 | | | | | | 95,634 | | | | | | 23,862,95 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Tax Rate
|
| | | | 21% | | | | | | 25% | | | | | | 15% | | | | | | 28% | | | | | | | | |
Purchase Accounting Adjustment
|
| | | | 1,155,000 | | | | | | 419,964 | | | | | | 228,737 | | | | | | 92,171 | | | | | | 1,895,872 | | |
Income Tax Provision
|
| | | | (67,500) | | | | | | (23,279) | | | | | | (12,679) | | | | | | (5,109) | | | | | | (108,567) | | |
Total Deferred Tax Liability
|
| | | | 1,087,500 | | | | | | 396,685 | | | | | | 216,058 | | | | | | 87,062 | | | | | | 1,787,305 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Entrepreneur
Resorts Ltd |
| |
TOTAL
|
| |||||||||||||||||||||
Share Issue for Acquisition
|
| | | | 12,153,614 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,153,614 | | |
Share Issue for IPO (Net of IPO Cost)
|
| | | | 35,650,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,650,000 | | |
Share Capital (Elimination)
|
| | | | | | | | | | (710,000) | | | | | | (9) | | | | | | — | | | | | | (21) | | | | | | — | | | | | | (710,029) | | |
Total Adjustment Share Capital
|
| | | | 47,803,614 | | | | | | (710,000) | | | | | | (9) | | | | | | — | | | | | | (21) | | | | | | — | | | | | | 47,093,585 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Entrepreneur
Resorts Ltd |
| |
TOTAL
|
| |||||||||||||||||||||
Retained Earnings Adjustment
|
| | | | — | | | | | | (253,929) | | | | | | (69,837) | | | | | | (71,848) | | | | | | (13,138) | | | | | | — | | | | | | (408,752) | | |
Retained Earnings (Elimination)
|
| | | | — | | | | | | (3,360,823) | | | | | | (1,219,004) | | | | | | 137,002 | | | | | | (334,334) | | | | | | — | | | | | | (4,777,159) | | |
Total Adjustment Retained Earning
|
| | | | — | | | | | | (3,614,752) | | | | | | (1,288,841) | | | | | | 65,154 | | | | | | (347,472) | | | | | | — | | | | | | (5,185,911) | | |
Accumulated Other Comprehensive Income (Elimination)
|
| | | | — | | | | | | — | | | | | | (783,551) | | | | | | — | | | | | | — | | | | | | — | | | | | | (783,551) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Year Ended December 31,
(USD 000’s) |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Summary Income Data: | | | | | | | | | | | | | |
Sales
|
| | | | 7,634 | | | | | | 9,949 | | |
Cost of goods sold
|
| | | | (4,704) | | | | | | (5,121) | | |
Gross profit (Loss)
|
| | | | 2,930 | | | | | | 4,828 | | |
Operating Income
|
| | | | 12 | | | | | | 1,187 | | |
Operating Expenses
|
| | | | (6,192) | | | | | | (7,151) | | |
Operating profit (Loss)
|
| | | | (3,250) | | | | | | (1,136) | | |
Other income
|
| | | | 412 | | | | | | 784 | | |
Other Expense
|
| | | | (854) | | | | | | (864) | | |
Net Income (Loss) Before Tax
|
| | | | (3,692) | | | | | | (1,216) | | |
Income Tax
|
| | | | 215 | | | | | | (95) | | |
Net Income (Loss) After Tax
|
| | | | (3,477) | | | | | | (1,311) | | |
Other Comprehensive Income
|
| | | | 2,129 | | | | | | (308) | | |
Total Comprehensive Income (Loss)
|
| | | | (1,348) | | | | | | (1,619) | | |
| | |
Year Ended December 31,
(USD 000’s) |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Balance Sheet Data | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 2,273 | | | | | | 3,290 | | |
Accounts receivable, net of allowance
|
| | | | 948 | | | | | | 1,264 | | |
Other receivable
|
| | | | — | | | | | | — | | |
Inventory
|
| | | | 113 | | | | | | 120 | | |
Prepaid expenses and other assets
|
| | | | 1,549 | | | | | | 1,065 | | |
Loans receivable
|
| | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | 54 | | | | | | 67 | | |
Total Current Assets
|
| | | | 4,937 | | | | | | 5,806 | | |
Non-Current Assets
|
| | | | | | | | | | | | |
Property and equipment, net
|
| | | | 7,251 | | | | | | 7,398 | | |
Intangible assets, net
|
| | | | 20,741 | | | | | | 6,166 | | |
Operating lease right-of-use asset
|
| | | | 1,664 | | | | | | 2,194 | | |
Investments at fair value
|
| | | | 29 | | | | | | 29 | | |
Goodwill
|
| | | | 18,647 | | | | | | 9,989 | | |
Other non-current assets
|
| | | | 516 | | | | | | — | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | |
Total Non-Current Assets
|
| | | | 48,848 | | | | | | 25,776 | | |
Total Assets
|
| | |
|
53,785
|
| | | |
|
31,582
|
| |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | | 822 | | | | | | 487 | | |
Accrued expenses and other current liabilities
|
| | | | 1,810 | | | | | | 1,443 | | |
Deferred revenue
|
| | | | 1,547 | | | | | | 3,231 | | |
Operating lease liabilities
|
| | | | 545 | | | | | | 545 | | |
Loans payable
|
| | | | 65 | | | | | | 63 | | |
Loans payable – related parties
|
| | | | 590 | | | | | | 433 | | |
Income tax payable
|
| | | | — | | | | | | — | | |
Total current liabilities
|
| | | | 5,379 | | | | | | 6,202 | | |
Non-Current Liabilities
|
| | | | | | | | | | | | |
Operating lease liabilities
|
| | | | 1,308 | | | | | | 1,729 | | |
Loans payable
|
| | | | 157 | | | | | | 1,218 | | |
Loans payable – related parties
|
| | | | — | | | | | | 400 | | |
Convertible Debt Obligation
|
| | | | 1,532 | | | | | | 1,918 | | |
Other non-current liabilities
|
| | | | — | | | | | | 25 | | |
Deferred Tax Liability
|
| | | | 4,167 | | | | | | 1,318 | | |
Total Non-Current liabilities
|
| | | | 7,164 | | | | | | 6,608 | | |
Total liabilities
|
| | |
|
12,543
|
| | | |
|
12,810
|
| |
Stockholders’ Equity: | | | | | | | | | | | | | |
Contributed capital
|
| | | | 50,630 | | | | | | 26,846 | | |
Minority Interest
|
| | | | 251 | | | | | | — | | |
Subscriptions receivable
|
| | | | (1,901) | | | | | | (1,126) | | |
Treasury stock, at cost
|
| | | | — | | | | | | (494) | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | |
Retained earnings
|
| | | | (9,526) | | | | | | (6,131) | | |
Reserves
|
| | | | 1,788 | | | | | | (323) | | |
Total Stockholders’ Equity
|
| | | | 41,242 | | | | | | 18,772 | | |
Total Liabilities and Stockholders’ Equity
|
| | |
|
53,785
|
| | | |
|
31,582
|
| |
| | |
For the year
ended December 31, (USD 000’s) |
| |||||||||
| | |
2020
|
| |
2020
|
| ||||||
Summary Income Data: | | | | | | | | | | | | | |
Sales
|
| | | | 10,078 | | | | | | 12,054 | | |
Cost of goods sold
|
| | | | (2,881) | | | | | | (3,863) | | |
Gross profit (Loss)
|
| | | | 7,197 | | | | | | 8,191 | | |
Operating Income
|
| | | | 6 | | | | | | — | | |
Operating Expenses
|
| | | | (6,164) | | | | | | (7,822) | | |
Operating profit (Loss)
|
| | | | 1,039 | | | | | | 369 | | |
Other income
|
| | | | 807 | | | | | | — | | |
Other Expense
|
| | | | (14) | | | | | | (5) | | |
Net Income (Loss) Before Tax
|
| | | | 1,832 | | | | | | 364 | | |
Income Tax
|
| | | | (27) | | | | | | (8) | | |
Net Income (Loss) After Tax
|
| | | | 1,805 | | | | | | 356 | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 1,805 | | | | | | 356 | | |
| | |
Year Ended December 31,
(USD 000’s) |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Balance Sheet Data | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 1,679 | | | | | | 1,253 | | |
Accounts receivable, net of allowance
|
| | | | 5,352 | | | | | | 3,490 | | |
Other receivable
|
| | | | — | | | | | | 4 | | |
Inventory
|
| | | | 62 | | | | | | 197 | | |
Prepaid expenses and other assets
|
| | | | 40 | | | | | | 23 | | |
Total Current Assets
|
| | | | 7,133 | | | | | | 4,967 | | |
Non-Current Assets
|
| | | | | | | | | | | | |
Property and equipment, net
|
| | | | 1,219 | | | | | | 1,192 | | |
Intangible assets, net
|
| | | | 24 | | | | | | 27 | | |
Operating lease right-of-use asset
|
| | | | — | | | | | | 544 | | |
Total Non-Current Assets
|
| | | | 1,243 | | | | | | 1,763 | | |
Total Assets
|
| | | | 8,376 | | | | | | 6,730 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | | 253 | | | | | | 587 | | |
Accrued expenses and other current liabilities
|
| | | | 726 | | | | | | 957 | | |
Deferred revenue
|
| | | | 2,009 | | | | | | 2,145 | | |
Operating lease liabilities
|
| | | | — | | | | | | 134 | | |
Loans payable
|
| | | | 530 | | | | | | — | | |
Income tax payable
|
| | | | 34 | | | | | | 7 | | |
Total current liabilities
|
| | | | 3,552 | | | | | | 3,830 | | |
Non-Current Liabilities
|
| | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | 410 | | |
Loans payable
|
| | | | 753 | | | | | | — | | |
Total Non-Current liabilities
|
| | | | 753 | | | | | | 410 | | |
Total liabilities
|
| | | | 4,305 | | | | | | 4,240 | | |
Stockholders’ Equity: | | | | | | | | | | | | | |
Contributed capital
|
| | | | 710 | | | | | | 709 | | |
Minority Interest
|
| | | | — | | | | | | (1) | | |
Retained earnings
|
| | | | 3,361 | | | | | | 1,781 | | |
Total Stockholders’ Equity
|
| | | | 4,071 | | | | | | 2,489 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 8,376 | | | | | | 6,729 | | |
| | |
Genius Group
Pro forma Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Digital Education Revenue
|
| | | $ | 20,787 | | | | | $ | 5,298 | | | | | $ | 4,771 | | |
In-Person Education Revenue
|
| | | $ | 1,388 | | | | | $ | 320 | | | | | $ | 746 | | |
Total Education Revenue
|
| | | $ | 22,175 | | | | | $ | 5,618 | | | | | $ | 5,517 | | |
Campus Revenue
|
| | | $ | 2,016 | | | | | $ | 2,016 | | | | | $ | 4,432 | | |
Total Revenue
|
| | | $ | 24,191 | | | | | $ | 7,634 | | | | | $ | 9,949 | | |
| | |
Genius Group Pro forma
Year Ended December 31, (USD 000’s) |
| |
Pre-IPO Group Audited
Financials Year Ended December 31, (USD 000’s) |
| ||||||||||||
| | |
2020
|
| |
2020
|
| |
2019
|
| |||||||||
Net Income (Loss)
|
| | | $ | (1,599) | | | | | $ | (3,477) | | | | | $ | (1,311) | | |
Tax Expense
|
| | |
$
|
122
|
| | | |
$
|
(216)
|
| | | |
$
|
95
|
| |
Interest Expense, net
|
| | |
$
|
975
|
| | | |
$
|
854
|
| | | |
$
|
864
|
| |
Depreciation and Amortization
|
| | | $ | 2,975 | | | | | $ | 2,140 | | | | | $ | 1,359 | | |
Stock Based Compensation
|
| | |
$
|
395
|
| | | |
$
|
395
|
| | | |
$
|
172
|
| |
Bad Debt Provision
|
| | | $ | 1,702 | | | | | $ | 162 | | | | | $ | — | | |
Adjusted EBITDA
|
| | | $ | 4,570 | | | | | $ | (142) | | | | | $ | 1,179 | | |
| | |
For the year ended
December 31, (USD) |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net Cash (Used In) Operating Activities
|
| | | | (2,127,213) | | | | | | (1,285,640) | | |
Net Cash Used in Investing Activities
|
| | | | (1,162,647) | | | | | | (1,842,194) | | |
Net Cash Provided By Financing Activities
|
| | | | 3,081,983 | | | | | | 3,976,622 | | |
|
Within one year
|
| | | $ | 545,132 | | |
|
Two to five years
|
| | | | 660,034 | | |
| Thereafter | | | | | 9,924,141 | | |
| | | | | | 11,129,307 | | |
|
Less: finance charges component
|
| | | | (9,276,243) | | |
| | | | | $ | 1,853,064 | | |
| | |
Students
|
| |
Paid
Students |
| |
Partners
and Faculty |
| |||||||||
APAC
|
| | | | 373,558 | | | | | | 9,221 | | | | | | 2,845 | | |
EMEA
|
| | | | 365,347 | | | | | | 9,761 | | | | | | 3,132 | | |
NASA
|
| | | | 286,167 | | | | | | 7,527 | | | | | | 1,896 | | |
Not tracked
|
| | | | 775,167 | | | | | | 7,413 | | | | | | 4,395 | | |
Total
|
| | | | 1,800,520 | | | | | | 33,920 | | | | | | 12,268 | | |
Name
|
| |
Age
|
| |
Position with our Company
|
|
Roger James Hamilton
|
| |
52
|
| | Chief Executive Officer and Chairman | |
Michelle Clarke
|
| |
48
|
| | Chief Marketing Officer and Director | |
Suraj Naik
|
| |
35
|
| | Chief Technology Officer and Director | |
Jeremy Harris
|
| |
50
|
| | Chief Financial Officer | |
Sandra Morrell
|
| |
53
|
| | Director | |
Patrick Grove
|
| |
45
|
| | Director | |
Nic Lim
|
| |
45
|
| | Director | |
Anna Gong
|
| |
46
|
| | Director | |
Year
|
| |
Companies
|
| |
No. of
Shares |
| |
Price
Per Share |
| |
Total
Consideration |
| |
No of Shares
after Share Split |
|
2018
|
| | Genius Group Ltd | | |
20,317
|
| |
$15.45
|
| |
$313,898
|
| |
121,902
|
|
2019
|
| |
Genius Group Ltd, GeniusU Ltd, Entrepreneur Institute Ltd, Entrepreneur Resorts Ltd
|
| |
42,913
|
| |
$21.34
|
| |
$915,763
|
| |
257,478
|
|
2020
|
| |
Genius Group Ltd, GeniusU Ltd, Entrepreneur Institute Ltd, Entrepreneur Resorts Ltd
|
| |
20,075
|
| |
$34.87
|
| |
$700,015
|
| |
120,450
|
|
| | | TOTAL | | |
83,305
|
| | | | |
$1,929,676
|
| |
499,830
|
|
| | |
Year Ended December 31, 2020
|
| |||||||||||||||
Name of the Director and/or Officer
|
| |
Compensation in
USD |
| |
Employee
Shares Granted |
| |
Employee Shares
Granted After Share Split |
| |||||||||
Roger James Hamilton
|
| | | | 551,691 | | | | | | 9,795 | | | | | | 58,770 | | |
Michelle Clarke
|
| | | | 103,748 | | | | | | 1,775 | | | | | | 10,650 | | |
Suraj Naik
|
| | | | 70,917 | | | | | | 1,279 | | | | | | 7,674 | | |
Sandra Morrell
|
| | | | 35,130 | | | | | | 2,608 | | | | | | 15,648 | | |
Jeremy Harris
|
| | | | 91,440 | | | | | | — | | | | | | — | | |
Patrick Grove
|
| | | | 8,824 | | | | | | 1,000 | | | | | | 6,000 | | |
Nic Lim
|
| | | | 8,824 | | | | | | 1,000 | | | | | | 6,000 | | |
Anna Gong
|
| | | | 8,824 | | | | | | 1,000 | | | | | | 6,000 | | |
| | |
Prior to Offering
|
| |
After Offering
|
| ||||||||||||
Name and Address of Beneficial Owner
|
| |
Amount of
Beneficial Ownership(1) |
| |
Percentage of
Outstanding Shares(2) |
| |
Percentage of
Outstanding Shares(3) |
| |||||||||
Executive Officers and Directors | | | | | | ||||||||||||||
Roger James Hamilton
|
| | | | 9,363,582 | | | | | | 40.20% | | | | | | | | |
Sandra Morrell
|
| | | | 776,658 | | | | | | 3.33% | | | | | | | | |
Michelle Clarke
|
| | | | 493,950 | | | | | | 2.12% | | | | | | | | |
Suraj Naik
|
| | | | 263,592 | | | | | | 1.13% | | | | | | | | |
Jeremy Harris
|
| | | | 83,016 | | | | | | **% | | | | | | | | |
Patrick Grove
|
| | | | 6,000 | | | | | | **% | | | | | | | | |
Nic Lim
|
| | | | 6,300 | | | | | | **% | | | | | | | | |
Anna Gong
|
| | | | 6,000 | | | | | | **% | | | | | | | | |
All directors, director nominees and executive officers as
a group (8 individuals) |
| | | | 10,999,098 | | | | | | 47.22% | | | | | | | | |
|
Delaware
|
| |
Singapore
|
|
|
Board of Directors
|
| |||
| A typical certificate of incorporation and bylaws provides that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into classes and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate of incorporation. | | | The constitution of companies will typically state the minimum and maximum number of directors as well as provide that the number of directors may be increased or reduced by shareholders via ordinary resolution passed at a general meeting, provided that the number of directors following such increase or reduction is within the maximum (if any) and minimum number of directors provided in our constitution and the Singapore Companies Act, respectively. | |
|
Limitation on Personal Liability of Directors
|
| |||
| A typical certificate of incorporation provides for the elimination of personal monetary liability of directors for breach of fiduciary duties as directors to the fullest extent permissible under the laws of Delaware, except for liability (i) for any breach of a director’s loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (relating to the liability of directors for unlawful payment of a dividend or an unlawful stock purchase or redemption) or (iv) for any transaction from which the director derived an improper personal benefit. A typical certificate of incorporation also provides that if the Delaware General Corporation Law is amended so as to allow further elimination of, or limitations on, director liability, then the liability of directors will be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law as so amended. | | | Pursuant to the Singapore Companies Act, any provision (whether in the constitution, a contract with the company or otherwise) exempting or indemnifying a director against any liability which by law would otherwise attach to him or her in respect of any negligence, default, breach of duty or breach of trust of which such director may be guilty in relation to the company is void. However, a company is not prohibited from (a) purchasing and maintaining for any such director insurance against any such liability, or (b) indemnifying such director against any liability incurred by him or her to a person other than the company except when the indemnity is against any liability (i) of the director to pay a fine in criminal proceedings, (ii) of the director to pay a penalty in respect of non-compliance with any regulatory requirements, (iii) incurred by the director in defending criminal proceedings in which he or she is convicted, (iv) incurred by the director in defending civil proceedings brought by the company or a related company in which judgment is given against him or her, or (v) incurred by the director in connection with an application for relief under Section 76A(13) or Section 391 of the Singapore Companies Act in which the court refuses to grant him or her relief. Nevertheless, a director can be released by the shareholders of a company for breaches of duty to a | |
|
Delaware
|
| |
Singapore
|
|
| | | | company except in the case of fraud, illegality, insolvency of the company and oppression or disregard of minority interests. | |
| | | | Subject to the Singapore Companies Act and every other Singapore statute for the time being in force and affecting the Company, we may indemnify our directors against costs, charges, fees, and other expenses that may be incurred by any of them in defending any proceedings (whether civil or criminal) relating to anything done or omitted or alleged to be done or omitted by such person acting in his or her capacity as a director of our company, in which judgment is given in his or her favor, or in which he or she is acquitted or in which the courts have granted relief pursuant to the provisions of the Singapore Companies Act, provided that such indemnity shall not extend to any liability which by law would otherwise attach to him or her in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to our company, or which would otherwise result in such indemnity being voided under applicable Singapore laws. | |
|
Interested Shareholders
|
| |||
|
Section 203 of the Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales, and loans) with an “interested stockholder” for three years following the time that the stockholder becomes an interested stockholder. Subject to specified exceptions, an “interested stockholder” is a person or group that owns 15% or more of the corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an affiliate or associate of the corporation and was the owner of 15% or more of the voting stock at any time within the previous three years.
A Delaware corporation may elect to “opt out” of, and not be governed by, Section 203 through a provision in either its original certificate of incorporation, or an amendment to its original certificate or bylaws that was approved by majority stockholder vote. With a limited exception, this amendment would not become effective until 12 months following its adoption.
|
| | There are no comparable provisions under the Singapore Companies Act with respect to public companies which are not listed on the Singapore Exchange Securities Trading Limited. | |
|
Delaware
|
| |
Singapore
|
|
|
Removal of Directors
|
| |||
| A typical certificate of incorporation and bylaws provide that, subject to the rights of holders of any preferred stock, directors may be removed at any time by the affirmative vote of the holders of at least a majority, or in some instances a supermajority, of the voting power of all of the then outstanding shares entitled to vote generally in the election of directors, voting together as a single class. A certificate of incorporation could also provide that such a right is only exercisable when a director is being removed for cause (removal of a director only for cause is the default rule in the case of a classified board). | | | Under the Singapore Companies Act, directors of a public company may be removed before expiration of their term of office, notwithstanding anything in its constitution or in any agreement between the public company and such directors, by ordinary resolution (i.e., a resolution which is passed by a simple majority of those shareholders present and voting in person or by proxy). Notice of the intention to move such a resolution has to be given to the company not less than 28 days before the meeting at which it is moved. The company shall then give notice of such resolution to its shareholders not less than 14 days before the meeting. Where any director removed in this manner was appointed to represent the interests of any particular class of shareholders or debenture holders, the resolution to remove such director will not take effect until such director’s successor has been appointed. | |
|
Filling Vacancies on the Board of Directors
|
| |||
| A typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director has been elected expires. | | | The constitution of a Singapore company typically provides that the directors have the power to appoint any person to be a director, either to fill a vacancy or as an addition to the existing directors, but so that the total number of directors shall not at any time exceed the maximum number (if any) fixed by or in accordance with the constitution. Any director so appointed shall hold office until the next following annual general meeting, where such director will then be eligible for re-election. Our constitution provides that the directors may appoint any person to be a director either to fill a casual vacancy or as an additional director but so that the total number of Directors shall not at any time exceed the maximum number fixed by or in accordance with the constitution. | |
|
Amendment of Governing Documents
|
| |||
| Under the Delaware General Corporation Law, amendments to a corporation’s certificate of incorporation require the approval of stockholders holding a majority of the outstanding shares entitled to vote on the amendment. If a class vote on the amendment is required by the Delaware General Corporation Law, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other provisions of the Delaware General Corporation Law. Under the Delaware General Corporation Law, the board of directors may amend bylaws if so authorized in the charter. The stockholders of a Delaware | | |
Our constitution may be altered by special resolution (i.e., a resolution passed by at least a three-fourths majority of the shareholders entitled to vote, present in person or by proxy at a meeting for which not less than 21 days’ written notice is given). The board of directors has no right to amend the constitution.
Under the Singapore Companies Act, an entrenching provision may be included in the constitution with which a company is formed and may at any time be inserted into the constitution of a company only if all the shareholders of the company agree. An entrenching provision is a
|
|
|
Delaware
|
| |
Singapore
|
|
| corporation also have the power to amend bylaws. | | | provision of the constitution of a company to the effect that other specified provisions of the constitution may not be altered in the manner provided by the Singapore Companies Act or may not be so altered except (i) by a resolution passed by a specified majority greater than 75% (the minimum majority required by the Singapore Companies Act for a special resolution) or (ii) where other specified conditions are met. The Singapore Companies Act provides that such entrenching provision may be removed or altered only if all the members of the company agree. | |
|
Meetings of Shareholders
|
| |||
|
Annual and Special Meetings
Typical bylaws provide that annual meetings of stockholders are to be held on a date and at a time fixed by the board of directors. Under the Delaware General Corporation Law, a special meeting of stockholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws.
|
| |
Annual General Meetings
All companies are required to hold an annual general meeting after the end of each financial year within either 4 months (in the case of a public company that is listed on an exchange in Singapore approved by the Monetary Authority of Singapore) or 6 months (in the case of any other company).
|
|
| | | |
Extraordinary General Meetings
Any general meeting other than the annual general meeting is called an “extraordinary general meeting.” Notwithstanding anything in the constitution, directors of a company are required to convene an extraordinary general meeting if required to do so by requisition (i.e. written notice, requiring that a meeting be called, given to the directors) by shareholder(s) holding not less than 10% of the total number of paid-up shares as at the date of the deposit of the requisition carrying the right of voting at general meetings of the company. In addition, the constitution usually also provides that general meetings may be convened in accordance with the Singapore Companies Act by the directors.
|
|
| Quorum Requirements | | | Quorum Requirements | |
| Under the Delaware General Corporation Law, a corporation’s certificate of incorporation or bylaws can specify the number of shares which constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than one-third of the shares entitled to vote at a meeting. | | | Our constitution provides that any two shareholders present in person or by proxy or by attorney or, in the case of a corporation, by a representative and entitled to vote thereat; in each case representing in aggregate not less than a majority of the total voting rights of all shareholders having the right to vote at a general meeting, shall constitute a quorum. In the event a quorum is not present, the meeting if not convened on the requisition of shareholders may be adjourned for one week. When reconvened, the quorum for the meeting will be the same and if at such adjourned meeting a quorum is not present, | |
|
Delaware
|
| |
Singapore
|
|
| vote of a quorum consisting of directors who were not parties to the suit or proceeding, if the person: | | |
company;
|
|
|
➢
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or, in some circumstances, at least not opposed to its best interests; and
➢
in a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Delaware corporate law permits indemnification by a corporation under similar circumstances for expenses (including attorneys’ fees) actually and reasonably incurred by such persons in connection with the defense or settlement of a derivative action or suit, except that no indemnification may be made in respect of any claim, issue or matter as to which the person is adjudged to be liable to the corporation unless the Delaware Court of Chancery or the court in which the action or suit was brought determines upon application that the person is fairly and reasonably entitled to indemnity for the expenses which the court deems to be proper.
To the extent a director, officer, employee or agent is successful in the defense of such an action, suit or proceeding, the corporation is required by Delaware corporate law to indemnify such person for reasonable expenses incurred thereby. Expenses (including attorneys’ fees) incurred by such persons in defending any action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of that person to repay the amount if it is ultimately determined that that person is not entitled to be so indemnified.
|
| |
➢
indemnify such officer against any liability incurred by him or her to a person other than the company except when the indemnity is against any liability (i) of the officer to pay a fine in criminal proceedings, (ii) of the officer to pay a penalty in respect of non-compliance with any regulatory requirements, (iii) incurred by the officer in defending criminal proceedings in which he or she is convicted, (iv) incurred by the officer in defending civil proceedings brought by the company or a related company in which judgment is given against him or her, or (v) incurred by the officer in connection with an application for relief under Section 76A(13) or Section 391 of the Singapore Companies Act in which the court refuses to grant him or her relief.
In cases where a director is sued by the company, the Singapore Companies Act gives the court the power to relieve directors either wholly or partially from their liability for their negligence, default, breach of duty or breach of trust. In order for relief to be obtained, it must be shown that (i) the director acted reasonably and honestly; and (ii) it is fair, having regard to all the circumstances of the case including those connected with such director’s appointment, to excuse the director. However, Singapore case law has indicated that such relief will not be granted to a director who has benefited as a result of his or her breach of trust.
|
|
| | | | Our constitution provides that subject to the provisions of the Singapore Companies Act and every other applicable statute for the time being in force concerning companies and affecting the company, the directors and officers are entitled to be indemnified against costs, charges, fees and other expenses that may be incurred by such person in defending any proceedings, whether civil or criminal, which relates to anything done or omitted or alleged to be done or omitted by such person as a director, officer or employee of the company and in which judgment is given in his or her favor or in which such person is acquitted or in which the courts have granted relief pursuant to the provisions of the Singapore Companies Act, provided that such indemnity shall not extend to any liability | |
|
Delaware
|
| |
Singapore
|
|
| | | | which by law would otherwise attach to him or her in respect of any negligence, default, breach of duty or breach of trust of which he or she may be guilty in relation to the company, or which would otherwise result in such indemnity being voided under applicable Singapore laws. | |
|
Shareholder Approval of Issuances of Shares
|
| |||
| Under Delaware law, the board of directors has the authority to issue, from time to time, capital stock in its sole discretion, as long the number the shares to be issued, together with those shares that are already issued and outstanding and those shares reserved to be issued, do not exceed the authorized capital for the corporation as previously approved by the stockholders and set forth in the corporation’s certificate of incorporation. Under the foregoing circumstances, no additional stockholder approval is required for the issuance of capital stock. Under Delaware law, stockholder approval is required (i) for any amendment to the corporation’s certificate of incorporation to increase the authorized capital and (ii) for the issuance of stock in a direct merger transaction where the number of shares exceeds 20% of the corporation’s shares outstanding prior to the transaction, regardless of whether there is sufficient authorized capital. | | | Section 161 of the Singapore Companies Act provides that notwithstanding anything in the company’s constitution, the directors shall not exercise any power to issue shares without prior approval of Company’s shareholders in a general meeting. The affirmative vote of shareholders holding at least a majority of the ordinary shares held by the shareholders present in person or represented by proxy at the annual general meeting and entitled to vote is required for this authorization. Once this shareholders’ approval is obtained, unless previously revoked or varied by the company in general meeting, it continues in force until the conclusion of the next annual general meeting or the expiration of the period within which the next annual general meeting after that date is required by law to be held, whichever is earlier; but any approval may be revoked or varied by the company in general meeting. Notwithstanding this general authorization to allot and issue our ordinary shares, the Company will be required to seek shareholder approval with respect to future issuances of ordinary shares, where required under the [•] rules, such as if we were to propose an issuance of ordinary shares that would result in a change in control of the Company or in connection with a transaction involving the issuance of ordinary shares representing 20% or more of our outstanding ordinary shares. | |
|
Shareholder Approval of Business Combinations
|
| |||
|
Generally, under the Delaware General Corporation Law, completion of a merger, consolidation, or the sale, lease or exchange of substantially all of a corporation’s assets or dissolution requires approval by the board of directors and by a majority (unless the certificate of incorporation requires a higher percentage) of outstanding stock of the corporation entitled to vote.
The Delaware General Corporation Law also requires a special vote of stockholders in connection with a business combination with an “interested stockholder” as defined in section 203 of the Delaware General Corporation Law. See “— Interested Shareholders” above.
|
| |
The Singapore Companies Act mandates that specified corporate actions require approval by the shareholders in a general meeting, notably:
➢
notwithstanding anything in the company’s constitution, directors are not permitted to carry into effect any proposals for disposing of the whole or substantially the whole of the company’s undertaking or property unless those proposals have been approved by shareholders in a general meeting;
|
|
|
Delaware
|
| |
Singapore
|
|
| | | |
➢
the company may by special resolution resolve that it be wound up voluntarily;
➢
subject to the constitution of each amalgamating company, an amalgamation proposal must be approved by the shareholders of each amalgamating company via special resolution at a general meeting;
➢
a compromise or arrangement proposed between a company and its shareholders, or any class of them, must, among other things, be approved by a majority in number representing three-fourths in value of the shareholders or class of shareholders present and voting either in person or by proxy at the meeting ordered by the court; and
➢
notwithstanding anything in the company’s constitution, the directors may not, without the prior approval of shareholders, issue shares, including shares being issued in connection with corporate actions.
|
|
|
Shareholder Action Without A Meeting
|
| |||
| Under the Delaware General Corporation Law, unless otherwise provided in a corporation’s certificate of incorporation, any action that may be taken at a meeting of stockholders may be taken without a meeting, without prior notice and without a vote if the holders of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize such action, consent in writing. It is not uncommon for a corporation’s certificate of incorporation to prohibit such action. | | | There are no equivalent provisions under the Singapore Companies Act in respect of public companies which are listed on a securities exchange, like our company. | |
|
Shareholder Suits
|
| |||
| Under the Delaware General Corporation Law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated stockholders where the requirements for maintaining a class action under the Delaware General Corporation Law have been met. A person may institute and maintain such a suit only if such person was a stockholder at the time of the transaction which is the subject of the suit or his or her shares thereafter devolved upon him or her by operation of law. | | |
Standing
Only registered shareholders of our company reflected in our register of members are recognized under Singapore law as shareholders of our company. As a result, only registered shareholders have legal standing to institute shareholder actions against us or otherwise seek to enforce their rights as shareholders. Holders of book-entry interests in our shares will be required to exchange their book-entry interests for certificated shares and to be registered as shareholders in our shareholder register in order to institute or enforce any legal proceedings or claims against us, our directors or our executive officers relating to shareholder rights. A holder of book-entry interests may become a registered shareholder of our company by
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Delaware
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Singapore
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| | | | exchanging its interest in our shares for certificated shares and being registered in our shareholder register. | |
| Additionally, under Delaware case law, the plaintiff generally must be a stockholder not only at the time of the transaction which is the subject of the suit, but also through the duration of the derivative suit. The Delaware General Corporation Law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile. | | |
Personal remedies in cases of oppression or injustice
A shareholder may apply to the court for an order under Section 216 of the Singapore Companies Act to remedy situations where (i) the company’s affairs are being conducted or the powers of the company’s directors are being exercised in a manner oppressive to, or in disregard of the interests of one or more of the shareholders or holders of debentures of the company, including the applicant; or (ii) the company has done an act, or threatens to do an act, or the shareholders or holders of debentures have passed some resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more of the company’s shareholders or holders of debentures, including the applicant.
Singapore courts have wide discretion as to the relief they may grant under such application, including, inter alia, directing or prohibiting any act or cancelling or varying any transaction or resolution, providing that the company be wound up, or authorizing civil proceedings to be brought in the name of or on behalf of the company by such person or persons and on such terms as the court directs.
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Derivative actions and arbitrations
The Singapore Companies Act has a provision which provides a mechanism enabling shareholders to apply to the court for leave to bring a derivative action or commence an arbitration on behalf of the company. Derivative actions are also allowed as a common law action.
Applications are generally made by shareholders of the company, but courts are given the discretion to allow such persons as they deem proper to apply (e.g., beneficial owner of shares).
It should be noted that this provision of the Singapore Companies Act is primarily used by minority shareholders to bring an action or arbitration in the name and on behalf of the company or intervene in an action or arbitration to which the company is a party for the purpose of prosecuting, defending or discontinuing the action or arbitration on behalf of the company. Prior to commencing a derivative action or arbitration, the court must be satisfied that (i) 14 days’ notice has been given to the directors of the company of the party’s intention to commence such action or
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Delaware
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Singapore
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| | | | arbitration if the directors of the company do not bring, diligently prosecute or defend or discontinue the action, (ii) the party is acting in good faith and (iii) it appears to be prima facie in the interests of the company that the action be brought, prosecuted, defended or discontinued. | |
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Class actions
The concept of class action suits in the United States, which allows individual shareholders to bring an action seeking to represent the class or classes of shareholders, does not exist in the same manner in Singapore. In Singapore, it is possible as a matter of procedure for a number of shareholders to begin proceedings on behalf of themselves and other shareholders who have the same interest in the proceedings whom they represent. These shareholders are known as “representative plaintiffs.”
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Distributions and Dividends; Repurchases and Redemptions
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The Delaware General Corporation Law permits a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.
Under the Delaware General Corporation Law, any corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem these shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem out of capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced.
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The Singapore Companies Act provides that no dividends can be paid to shareholders except out of profits.
The Singapore Companies Act does not provide a definition on when profits are deemed to be available for the purpose of paying dividends and this is accordingly governed by case law.
Our constitution provides that no dividend can be paid otherwise than out of profits.
Acquisition of a company’s own shares
The Singapore Companies Act generally prohibits a company from acquiring its own shares or purporting to acquire the shares of its holding company or ultimate holding company, whether directly or indirectly, in any way, subject to certain exceptions. Any contract or transaction made or entered into in contravention of the aforementioned prohibition by which a company acquires or purports to acquire its own shares or shares in its holding company or ultimate holding company is void. However, provided that it is expressly permitted to do so by its constitution and subject to the special conditions of each permitted acquisition contained in the Singapore Companies Act, a company may:
➢
redeem redeemable preferred shares on such terms and in such manner as is provided by its constitution. Preferred shares may be redeemed out of capital only if all the directors make a solvency statement in relation to such
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Delaware
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Singapore
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Financial assistance for the acquisition of shares
A public company or a company whose holding company or ultimate holding company is a public company may not give financial assistance to any person whether directly or indirectly for the purpose of or in connection with:
➢
the acquisition or proposed acquisition of shares in the company or units of such shares; or
➢
the acquisition or proposed acquisition of shares in its holding company or ultimate holding company, or units of such shares.
Financial assistance may take the form of a loan, the giving of a guarantee, the provision of security, the release of an obligation, the release of a debt or otherwise.
However, it should be noted that a company may provide financial assistance for the acquisition of its shares or shares in its holding company or ultimate holding company if it complies with the requirements (including approval by special resolution) set out in the Singapore Companies Act.
Our constitution provides that subject to the provisions of the Singapore Companies Act, we may purchase or otherwise acquire our own shares upon such terms and subject to such conditions as we may deem fit. We may deal with any such shares which is so purchased or acquired by us in such manner as may be permitted under the Singapore Companies Act (including, without limitation, hold such shares as treasury shares).
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Transactions with Officers or Directors
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| Under the Delaware General Corporation Law, some contracts or transactions in which one or more of a corporation’s directors has an interest are not void or voidable because of such interest provided that some conditions, such as obtaining the required approval and fulfilling the requirements of good faith and full disclosure, are met. Under the Delaware General Corporation Law, either (a) the stockholders or the board of directors of a corporation must approve in good faith any such contract or transaction after full disclosure of the material facts or (b) the contract or transaction must have been “fair” as to the corporation at the time it was approved. If board approval is sought, the contract or transaction must be approved in good faith by a majority of disinterested directors after full disclosure of material facts, even though | | | Under the Singapore Companies Act, directors and the chief executive officer of the company are not prohibited from dealing with the company, but where they have an interest, whether directly or indirectly, in a transaction with the company, that interest must be disclosed to the board of directors. In particular, every director or chief executive officer who is in any way, whether directly or indirectly, interested in a transaction or proposed transaction with the company must, as soon as is practicable after the relevant facts have come to such director’s or, as the case may be, the chief executive officer’s knowledge, declare the nature of such interest at a meeting of the directors or send a written notice to the company detailing the nature, character and extent of the interest. | |
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Delaware
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Singapore
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| less than a majority of a quorum. | | | | |
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In addition, a director or chief executive officer who holds any office or possesses any property which directly or indirectly might create interests in conflict with such director’s or, as the case may be, the chief executive officer’s duties as director or chief executive officer is required to declare the fact and the nature, character and extent of the conflict at a meeting of directors or send a written notice to the company detailing the nature, character and extent of the conflict.
The Singapore Companies Act extends the scope of this statutory duty of a director and chief executive officer to disclose any interests by pronouncing that an interest of a member of a director’s or, as the case may be, the chief executive officer’s family (including spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter) will be treated as an interest of the director or chief executive officer (as the case may be).
A director or chief executive officer shall not be deemed to be interested or at any time interested in a transaction or proposed transaction where the interest of the director or chief executive officer (as the case may be) consists only of being a member or creditor of a corporation which is interested in the transaction or proposed transaction with the company if the interest may properly be regarded as immaterial. Where the transaction or the proposed transaction relates to any loan to the company, no disclosure need be made where the director or chief executive officer (as the case may be) has only guaranteed the repayment of such loan, unless the constitution provides otherwise.
Further, where the transaction or the proposed transaction has been or will be made with or for the benefit of a related corporation (i.e., the holding company, subsidiary or subsidiary of a common holding company), the director or chief executive officer shall not be deemed to be interested or at any time interested in such transaction or proposed transaction by virtue of only being a director or chief executive officer (as the case may be) of the related corporation, unless the constitution provides otherwise.
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| | | | Subject to specified exceptions, the Singapore Companies Act prohibits a company (other than an exempt private company) from, among others, (i) making a loan or a quasi-loan to its directors or to directors of a related corporation, or giving a guarantee or security in connection with such a loan | |
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Delaware
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Singapore
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or quasi-loan, (ii) entering into a credit transaction as creditor for the benefit of its directors or the directors of a related corporation, or giving a guarantee or any security in connection with such a credit transaction, (iii) arranging an assignment to or assumption by us of any rights, obligations or liabilities under a transaction which, if it had been entered into by us, would have been a restricted transaction, and (iv) taking part in an arrangement under which another person enters into a transaction which, if entered into by us, would have been a restricted transaction and such person obtains a benefit from us or our related corporation pursuant thereto. Companies are also prohibited from entering into any of these transactions with the spouse or children (whether adopted or natural or step-children) of its directors.
Subject to specified exceptions, the Singapore Companies Act prohibits a company (other than an exempt private company) from making a loan or a quasi-loan to another company or a limited liability partnership or entering into any guarantee or providing any security in connection with a loan or a quasi-loan made to another company or a limited liability partnership by a person other than the first-mentioned company, entering into a credit transaction as a creditor for the benefit of another company or a limited liability partnership, or entering into any guarantee or provide any security in connection with a credit transaction entered into by any person for the benefit of another company or a limited liability partnership if a director or directors of the first-mentioned company is or together are interested in 20% or more of the total voting power in the other company or the limited liability partnership (as the case may be).
Such prohibition shall extend to apply to a loan, quasi-loan, credit transaction made by a company (other than an exempt private company), a credit transaction made by a company (other than an exempt private company) for the benefit of another company or limited liability partnership and a guarantee or security provided by a company (other than an exempt private company) in connection with a loan or quasi-loan made by a person other than the first-mentioned company to another company or a limited liability partnership where such other company or limited liability partnership is incorporated or formed (as the case may be) outside Singapore, if a director or directors of the first-mentioned company (a) is or together are interested in 20% or more of the total voting power
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Delaware
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Singapore
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in the other company or limited liability partnership or (b) in a case where the other company does not have a share capital, exercises or together exercise control over the other company whether by reason of having the power to appoint directors or otherwise.
The Singapore Companies Act also provides that an interest of a member of a director’s family (including spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter) will be treated as an interest of the director.
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Dissenters’ Rights
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| Under the Delaware General Corporation Law, a stockholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction. | | | There are no equivalent provisions in Singapore under the Singapore Companies Act. | |
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Cumulative Voting
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| Under the Delaware General Corporation Law, a corporation may adopt in its bylaws that its directors shall be elected by cumulative voting. When directors are elected by cumulative voting, a stockholder has the number of votes equal to the number of shares held by such stockholder times the number of directors nominated for election. The stockholder may cast all of such votes for one director or among the directors in any proportion. | | | There are no equivalent provisions in Singapore under the Singapore Companies Act. | |
Underwriter
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Number of
Ordinary Shares |
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ThinkEquity, a division of Fordham Financial Management, Inc.
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Total
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Per Share
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Total Without
Over-Allotment Option |
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Total With Full
Over-Allotment Option |
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Public offering price
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| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount (7.5%)
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| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%)
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| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us
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| | | $ | | | | | $ | | | | | $ | | |
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SEC Registration Fee
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| | | $ | 5,333 | | |
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[•] Listing Fee
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| | | | [•] | | |
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FINRA Filing Fee
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| | | | [•] | | |
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Legal Fees and Expenses
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| | | | 350,000 | | |
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Accounting Fees and Expenses
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| | | | 690,000 | | |
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Printing and Engraving Expenses
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| | | | 50,000 | | |
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Transfer Agent Fee
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| | | | 500 | | |
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Miscellaneous Expenses
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| | | | 0 | | |
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Total
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| | | $ | [•] | | |
| | | | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-8 | | |
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Note
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As of December 31,
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2020
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2019
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Assets | | | | | | | | | | | | | | | | |
Current Assets
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Cash and cash equivalents
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| | | | | | $ | 2,273,151 | | | | | $ | 3,290,095 | | |
Accounts receivable, net
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| | | | | | | 948,341 | | | | | | 1,263,849 | | |
Due from related parties
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5
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| | | | 53,851 | | | | | | 67,310 | | |
Inventories
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6
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| | | | 112,543 | | | | | | 119,516 | | |
Prepaid expenses and other current assets
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7
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| | | | 1,548,717 | | | | | | 1,065,035 | | |
Total Current Assets
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| | | | | | | 4,936,603 | | | | | | 5,805,805 | | |
Property and equipment, net
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8
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| | | | 7,250,846 | | | | | | 7,399,412 | | |
Operating lease right-of-use asset
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9
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| | | | 1,663,881 | | | | | | 2,194,073 | | |
Investments at fair value
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10
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| | | | 29,076 | | | | | | 28,526 | | |
Goodwill
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11
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| | | | 18,647,498 | | | | | | 9,988,857 | | |
Intangible assets, net
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12
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| | | | 20,741,249 | | | | | | 6,165,712 | | |
Other non-current assets
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14
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| | | | 516,296 | | | | | | — | | |
Total Assets
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| | | | | | $ | 53,785,449 | | | | | $ | 31,582,385 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | |
Current Liabilities
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| | | | | | | | | | | | | | | |
Accounts payable
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| | | | | | $ | 821,820 | | | | | $ | 486,871 | | |
Accrued expenses and other current liabilities
|
| |
15
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| | | | 1,810,222 | | | | | | 1,442,590 | | |
Deferred revenue
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| |
16
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| | | | 1,546,712 | | | | | | 3,231,431 | | |
Operating lease liabilities – current portion
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| |
9
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| | | | 545,132 | | | | | | 544,551 | | |
Loans payable – current portion
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17
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| | | | 65,611 | | | | | | 64,379 | | |
Loans payable – related parties – current portion
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18
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| | | | 589,502 | | | | | | 432,800 | | |
Total Current Liabilities
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| | | | | | | 5,378,999 | | | | | | 6,202,622 | | |
Operating lease liabilities – non-current portion
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9
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| | | | 1,307,932 | | | | | | 1,729,188 | | |
Loans payable – non-current portion
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17
|
| | | | 157,629 | | | | | | 1,217,509 | | |
Loans payable – related parties – noncurrent portion
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18
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| | | | — | | | | | | 400,000 | | |
Convertible debt obligations, net of debt discount of $0 and $337,838 as of December 31, 2020 and December 31, 2019, respectively
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19
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| | | | 1,531,639 | | | | | | 1,918,340 | | |
Deferred tax liability
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| |
13
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| | | | 4,166,946 | | | | | | 1,317,779 | | |
Other non-current liabilities
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20
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| | | | — | | | | | | 25,147 | | |
Total Liabilities
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| | | | | | | 12,543,145 | | | | | | 12,810,585 | | |
Commitments and Contingencies | | | | | | | | | | | | | | | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | |
Contributed capital
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21
|
| | | | 50,630,439 | | | | | | 26,846,043 | | |
Subscriptions receivable
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21
|
| | | | (1,900,857) | | | | | | (1,125,774) | | |
Reserves
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| | | | | | | 1,788,051 | | | | | | (323,067) | | |
Accumulated deficit
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| | | | | | | (9,526,614) | | | | | | (6,130,926) | | |
Treasury stock, at cost
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21
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| | | | — | | | | | | (494,476) | | |
Capital and reserves attributable to owners of Genius Group Ltd
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| | | | | | | 40,991,019 | | | | | | 18,771,800 | | |
Non controlling interest
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| | | | | | | 251,285 | | | | | | — | | |
Total Stockholders’ Equity
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| | | | | | | 41,242,304 | | | | | | 18,771,800 | | |
Total Liabilities and Stockholders’ Equity
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| | | | | | $ | 53,785,449 | | | | | $ | 31,582,385 | | |
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Note
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For the Years ended
December 31, |
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2020
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2019
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Revenue
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| |
22
|
| | | $ | 7,633,776 | | | | | $ | 9,949,057 | | |
Cost of revenue
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| | | | | | | (4,703,841) | | | | | | (5,120,969) | | |
Gross profit
|
| | | | | | | 2,929,935 | | | | | | 4,828,088 | | |
Operating (Expenses) Income | | | | | | | | | | | | | | | | |
General and administrative
|
| |
24
|
| | | | (6,151,221) | | | | | | (7,102,720) | | |
Depreciation and amortization
|
| | | | | | | (40,906) | | | | | | (47,537) | | |
Other operating income
|
| |
23
|
| | | | 133,519 | | | | | | 94,131 | | |
Bargain purchase gain
|
| | | | | | | — | | | | | | 1,060,794 | | |
(Loss) gains from foreign currency transactions
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| | | | | | | (121,909) | | | | | | 31,704 | | |
Total operating expenses
|
| | | | | | | (6,180,517) | | | | | | (5,963,628) | | |
Loss from Operations
|
| | | | | | | (3,250,582) | | | | | | (1,135,540) | | |
(Expense) Income | | | | | | | | | | | | | | | | |
Interest expense, net
|
| |
25
|
| | | | (853,983) | | | | | | (863,871) | | |
Change in fair value of derivative liabilities
|
| | | | | | | — | | | | | | 783,735 | | |
Other income
|
| | | | | | | 411,763 | | | | | | — | | |
Total Other Expense
|
| | | | | | | (442,220) | | | | | | (80,136) | | |
Loss Before Income Tax
|
| | | | | | | (3,692,802) | | | | | | (1,215,676) | | |
Income Tax Benefit (Expense)
|
| |
27
|
| | | | 216,086 | | | | | | (94,877) | | |
Net Loss
|
| | | | | | | (3,476,716) | | | | | | (1,310,553) | | |
Other comprehensive income:
|
| | | | | | | | | | | | | | | |
Foreign currency translation
|
| | | | | | | 2,129,081 | | | | | | (308,172) | | |
Total Comprehensive Income (Loss)
|
| | | | | | $ | (1,347,635) | | | | | $ | (1,618,725) | | |
Total Comprehensive Income (Loss) is attributable to:
|
| | | | | | | | | | | | | | | |
Owners of Genius Group Ltd
|
| | | | | | | (1,284,570) | | | | | | (1,618,725) | | |
Non controlling interest
|
| | | | | | | (63,065) | | | | | | — | | |
Total Comprehensive Income (Loss)
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| | | | | | $ | (1,347,635) | | | | | $ | (1,618,725) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Accumulated
Other Comprehensive Loss |
| | ||||||||||||||
| | |
Contributed
Capital |
| |
Minority
Interest |
| |
Subscriptions
Receivable |
| |
Foreign
Currency |
| |
Treasury
Stock |
| |
Accumulated
Deficit |
| |
Total
Equity |
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Balance, January 1, 2019
|
| | | $ | 16,460,431 | | | | | $ | — | | | | | $ | — | | | | | $ | (14,895) | | | | | $ | (132,501) | | | | | $ | (5,071,564) | | | | | $ | 11,241,471 | | |
Net loss
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,310,553) | | | | | | (1,310,553) | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | | | | | (308,172) | | | | | | | | | | | | | | | | | | (308,172) | | |
Impact of Entrepreneurs Institute common control merger
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| | | | 6,400,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 398,748 | | | | | | 6,798,748 | | |
Shares issued for cash
|
| | | | 2,599,978 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,599,978 | | |
Shares issued in satisfaction of liability
|
| | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Shares issued for subscriptions receivable
|
| | | | 1,125,774 | | | | | | | | | | | | (1,125,774) | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Share based compensation
|
| | | | 171,768 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 171,768 | | |
Purchase of treasury shares
|
| | | | — | | | | | | | | | | | | | | | | | | | | | | | | (656,513) | | | | | | | | | | | | (656,513) | | |
Resale of treasury stock
|
| | | | 88,092 | | | | | | | | | | | | | | | | | | | | | | | | 294,538 | | | | | | | | | | | | 382,630 | | |
Dividend
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (147,557) | | | | | | (147,557) | | |
Balance, December 31, 2019
|
| | | $ | 26,846,043 | | | | | $ | — | | | | | $ | (1,125,774) | | | | | $ | (323,067) | | | | | $ | (494,476) | | | | | $ | (6,130,926) | | | | | $ | 18,771,800 | | |
Net loss
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,476,716) | | | | | | (3,476,716) | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | | | | | 2,129,081 | | | | | | | | | | | | | | | | | | 2,129,081 | | |
Shares issued for cash
|
| | | | 2,222,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,222,000 | | |
Shares issued for subscriptions receivable
|
| | | | 915,763 | | | | | | | | | | | | (915,763) | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Shares issued for conversion of convertible notes
|
| | | | 2,664,004 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,664,004 | | |
Shares issued for acquisition of Entrepreneur Resorts Ltd
|
| | | | 17,798,374 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,798,374 | | |
Eliminations on acquisition of Entrepreneur Resorts
|
| | | | | | | | | | | | | | | | 140,680 | | | | | | | | | | | | 494,476 | | | | | | | | | | | | 635,156 | | |
Shares issued in satisfaction of a liability, net of derivative liability
|
| | | | 100,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000 | | |
Non-controlling Interest
|
| | | | (314,350) | | | | | | 251,285 | | | | | | | | | | | | (17,963) | | | | | | | | | | | | 81,028 | | | | | | — | | |
Share based compensation
|
| | | | 398,605 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 398,605 | | |
Balance December 31, 2020
|
| | | $ | 50,630,439 | | | | | $ | 251,285 | | | | | $ | (1,900,857) | | | | | $ | 1,788,051 | | | | | $ | — | | | | | $ | (9,526,614) | | | | | $ | 41,242,304 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Cash Flows From Operating Activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (3,476,716) | | | | | $ | (1,310,553) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Stock-based compensation
|
| | | | 398,605 | | | | | | 171,768 | | |
Depreciation and amortization
|
| | | | 2,140,326 | | | | | | 1,358,775 | | |
Bargain purchase gain
|
| | | | — | | | | | | (1,060,794) | | |
Amortization of deferred tax liability
|
| | | | (166,396) | | | | | | (16,433) | | |
Amortization of debt discount
|
| | | | 322,947 | | | | | | 580,049 | | |
Provision for doubtful debts
|
| | | | 161,788 | | | | | | — | | |
Loss (gain) on foreign exchange transactions
|
| | | | 121,904 | | | | | | (31,704) | | |
Loss on disposal of property and equipment
|
| | | | 294 | | | | | | — | | |
Change in fair value of derivative liability
|
| | | | — | | | | | | (783,735) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 153,720 | | | | | | (557,044) | | |
Prepaid expenses and other current assets
|
| | | | (483,682) | | | | | | (699,189) | | |
Inventory
|
| | | | 6,973 | | | | | | (27,793) | | |
Accounts payable
|
| | | | 334,949 | | | | | | (138,625) | | |
Accrued expenses and other current liabilities
|
| | | | 117,632 | | | | | | 290,219 | | |
Deferred revenue
|
| | | | (1,684,719) | | | | | | 833,050 | | |
Deferred tax liability .
|
| | | | (49,691) | | | | | | 84,046 | | |
Other non-current liabilities
|
| | | | (25,147) | | | | | | 22,323 | | |
Total adjustments
|
| | | | 1,349,503 | | | | | | 24,913 | | |
Net Cash Used In Operating Activities
|
| | | | (2,127,213) | | | | | | (1,285,640) | | |
Cash Flows From Investing Activities | | | | | | | | | | | | | |
Purchase of intangible assets
|
| | | | (437,764) | | | | | | (423,959) | | |
Purchase of equipment
|
| | | | (233,823) | | | | | | (636,165) | | |
Sale of equipment
|
| | | | 25,236 | | | | | | 3,545 | | |
Acquisition of Entrepreneurs Institute
|
| | | | — | | | | | | (800,000) | | |
Cash paid in Matla acquisition
|
| | | | — | | | | | | (1) | | |
Cash acquired in Matla acquisition
|
| | | | — | | | | | | 14,759 | | |
Purchase of investment in Health360
|
| | | | — | | | | | | (373) | | |
Deposit on investment in UAV
|
| | | | (516,296) | | | | | | — | | |
Net Cash Used In Investing Activities
|
| | | | (1,162,647) | | | | | | (1,842,194) | | |
Cash Flows From Financing Activities | | | | | | | | | | | | | |
Amount due to/from related party
|
| | | | 13,459 | | | | | | 48,066 | | |
Dividends paid
|
| | | | — | | | | | | (147,557) | | |
Purchase of treasury stock
|
| | | | — | | | | | | (656,513) | | |
Proceeds from sale of treasury stock
|
| | | | — | | | | | | 382,630 | | |
Proceeds from convertible debt, net of issuance costs
|
| | | | 1,819,145 | | | | | | 2,256,178 | | |
Convertible debt issuance costs
|
| | | | — | | | | | | (134,151) | | |
Proceeds from equity issuances, net of issuance costs
|
| | | | 2,222,000 | | | | | | 2,599,978 | | |
Operating lease liability
|
| | | | (420,675) | | | | | | (153,437) | | |
Repayments of loans payable
|
| | | | (551,946) | | | | | | (218,572) | | |
Net Cash Provided By Financing Activities
|
| | | | 3,081,983 | | | | | | 3,976,622 | | |
Effect of Exchange Rate Changes on Cash
|
| | | | (809,067) | | | | | | (296,582) | | |
Net (Decrease) Increase In Cash
|
| | | | (1,016,944) | | | | | | 552,206 | | |
Cash – Beginning of year
|
| | | | 3,290,095 | | | | | | 2,737,889 | | |
Cash – End of year
|
| | | $ | 2,273,151 | | | | | $ | 3,290,095 | | |
Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
Cash paid during the period for interest
|
| | | $ | 335,606 | | | | | $ | 266,059 | | |
Non-Cash Investing and Financing Activities | | | | | | | | | | | | | |
Debt discount for derivative liability
|
| | | $ | — | | | | | $ | 783,735 | | |
ROU asset for lease liability
|
| | | $ | — | | | | | $ | 2,427,176 | | |
Treasury stock adjustment
|
| | | $ | 494,476 | | | | | $ | — | | |
Condonation of loan
|
| | | $ | 400,000 | | | | | $ | — | | |
Shares issued for subscription receivable
|
| | | $ | 915,763 | | | | | $ | 1,125,774 | | |
Shares issued in satisfaction of a liability, net of derivative liability (2020: $250,000)
|
| | | $ | 100,000 | | | | | $ | — | | |
Shares issued for the acquisition of Entrepreneur Resorts and Wealth Dynamics
|
| | | $ | 17,798,374 | | | | | $ | 6,400,000 | | |
Shares issued for conversion of convertible notes
|
| | | $ | 2,664,004 | | | | | $ | — | | |
Loan payable for the acquisition of Wealth Dynamics
|
| | | $ | — | | | | | $ | 800,000 | | |
Category
|
| |
Depreciation
Method |
| |
Useful
Life |
|
Buildings
|
| |
Straight line
|
| |
20 years
|
|
Machinery
|
| |
Straight line
|
| |
5 years
|
|
Furniture and fixtures
|
| |
Straight line
|
| |
5 years
|
|
Motor vehicles
|
| |
Straight line
|
| |
5 years
|
|
Office equipment
|
| |
Straight line
|
| |
5 years
|
|
IT equipment
|
| |
Straight line
|
| |
3 – 5 years
|
|
Computer software
|
| |
Straight line
|
| |
2 – 8 years
|
|
Spa equipment, curtains, crockery, glassware and linen
|
| |
Straight line
|
| |
5 years
|
|
| | | | | | | |
Standard/Interpretation
|
| |
Effective for periods
beginning on or after |
|
Amendments to References to the Conceptual Framework in IFRS Standards
|
| |
January 1, 2020
|
|
Amendments to FRS 1 and FRS 8 Definition of Material
|
| |
January 1, 2020
|
|
Amendments to IFRS 3 Definition of a Business
|
| |
January 1, 2020
|
|
Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform
|
| |
January 1, 2020
|
|
Amendment to IFRS 16 COVID-19 Related Rent Concessions
|
| |
June 1, 2020
|
|
| | | | |
Standard/Interpretation
|
| |
Effective for periods
beginning on or after |
|
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2
|
| |
January 1, 2021
|
|
Amendments to IFRS 3 Reference to the Conceptual Framework Relating to Business Combinations
|
| |
January 1, 2022
|
|
Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract
|
| |
January 1, 2022
|
|
Annual Improvements to IFRS Standards 2018-2020
|
| |
January 1, 2022
|
|
Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use
|
| |
January 1, 2022
|
|
Amendments to IAS 1 Classification of Liabilities as Current or Non-current
|
| |
January 1, 2023
|
|
Amendments to IFRS 17 Insurance Contracts
|
| |
January 1, 2023
|
|
| | | | |
| | |
Amount
|
| |||
Cash & equivalents
|
| | | $ | 159,000 | | |
Accounts receivable
|
| | | | 984,000 | | |
Advances to affiliates
|
| | | | 830,000 | | |
Prepaid expenses
|
| | | | 468,000 | | |
Trade names and trademarks
|
| | | | 2,530,000 | | |
Developed content
|
| | | | 2,460,000 | | |
Customer relationships
|
| | | | 350,000 | | |
Goodwill
|
| | | | 3,655,567 | | |
Other assets
|
| | | | 9,000 | | |
Total acquired assets
|
| | | | 11,445,567 | | |
Less: Acquired liabilities | | | | | | | |
Accounts payable
|
| | | | (566,000) | | |
Accrued expenses
|
| | | | (58,000) | | |
Deferred tax liability
|
| | | | (597,567) | | |
Deferred revenue
|
| | | | (2,224,000) | | |
Net assets acquired
|
| | | $ | 8,000,000 | | |
| | | | | | | |
| | |
Amount
|
| |||
Cash & equivalents
|
| | | $ | 14,759 | | |
Buildings
|
| | | | 975,008 | | |
Right of use asset
|
| | | | 166,925 | | |
Other property and equipment
|
| | | | 290,865 | | |
Other assets
|
| | | | 9,888 | | |
Total acquired assets
|
| | | | 1,457,445 | | |
Less: Acquired liabilities | | | | | | | |
Accounts payable
|
| | | | (8,499) | | |
Lease liability
|
| | | | (166,925) | | |
Deferred tax liability
|
| | | | (218,402) | | |
Other liabilities
|
| | | | (2,824) | | |
Net assets acquired
|
| | | $ | 1,060,795 | | |
| | | | | | | |
| | |
Amount
|
| |||
Cash and cash equivalents
|
| | | | 1,376,396 | | |
Accounts receivable, net
|
| | | | 196,434 | | |
Due from related parties
|
| | | | 3,171 | | |
Inventories
|
| | | | 157,927 | | |
Prepaid expenses and other current assets
|
| | | | 613,164 | | |
Property and equipment, net
|
| | | | 6,865,544 | | |
Operating lease right-of-use asset
|
| | | | 1,740,083 | | |
Trademarks , Trade Names and Domain Names
|
| | | | 9,919,269 | | |
Developed Content
|
| | | | 3,769,322 | | |
Databases
|
| | | | 1,290,000 | | |
Other intangible assets
|
| | | | 67,849 | | |
Goodwill
|
| | | | 14,991,931 | | |
Total acquired assets
|
| | | | 40,991,090 | | |
Less: Acquired liabilities | | | | | | | |
Accounts payable
|
| | | | 56,490 | | |
Accrued expenses and other current liabilities
|
| | | | 1,013,665 | | |
Deferred revenue
|
| | | | 564,215 | | |
Operating lease liabilities – current portion
|
| | | | 519,740 | | |
Deferred tax liability
|
| | | | 3,602,988 | | |
Operating lease liabilities – non-current portion
|
| | | | 1,311,110 | | |
Loans payable – non-current portion
|
| | | | 1,000,000 | | |
Convertible debt obligations
|
| | | | 1,220,450 | | |
Total acquired liabilities
|
| | | | 9,288,658 | | |
Net assets
|
| | | $ | 31,702,432 | | |
Net assets acquired – 97.8% controlling interest
|
| | | $ | 30,997,810 | | |
| | | | | | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Food and beverage
|
| | | $ | 42,694 | | | | | $ | 47,224 | | |
Merchandise
|
| | | | 59,943 | | | | | | 65,098 | | |
Consumables
|
| | | | 9,906 | | | | | | 7,194 | | |
Total inventories
|
| | | $ | 112,543 | | | | | $ | 119,516 | | |
| | | | | | | | | | | | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Prepaid expenses
|
| | | $ | 1,305,088 | | | | | $ | 832,280 | | |
Deposits
|
| | | | 226,189 | | | | | | 223,718 | | |
Other receivables
|
| | | | 17,440 | | | | | | 9,037 | | |
Total
|
| | | $ | 1,548,717 | | | | | $ | 1,065,035 | | |
| | | | | | | | | | | | | |
| | |
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||
|
Cost
|
| |
Accumulated
Depreciation |
| |
Carrying
Value |
| |
Cost
|
| |
Accumulated
Depreciation |
| |
Carrying
Value |
| ||||||||||||||||||||
Land
|
| | | $ | 1,486,718 | | | | | $ | — | | | | | $ | 1,486,718 | | | | | $ | 1,486,718 | | | | | $ | — | | | | | $ | 1,486,718 | | |
Buildings
|
| | | | 4,270,388 | | | | | | (665,905) | | | | | | 3,604,483 | | | | | | 3,774,580 | | | | | | (344,035) | | | | | | 3,430,545 | | |
Leasehold property
|
| | | | 4,251,845 | | | | | | (2,596,718) | | | | | | 1,655,127 | | | | | | 3,373,869 | | | | | | (2,354,975) | | | | | | 1,018,894 | | |
Plant and machinery
|
| | | | 164,137 | | | | | | (79,453) | | | | | | 84,684 | | | | | | 167,428 | | | | | | (71,509) | | | | | | 95,919 | | |
Furniture and fixtures
|
| | | | 466,277 | | | | | | (276,904) | | | | | | 189,373 | | | | | | 450,618 | | | | | | (219,166) | | | | | | 231,452 | | |
Motor vehicles
|
| | | | 341,906 | | | | | | (248,580) | | | | | | 93,326 | | | | | | 356,094 | | | | | | (220,244) | | | | | | 135,850 | | |
Office equipment
|
| | | | 23,599 | | | | | | (13,164) | | | | | | 10,435 | | | | | | 23,700 | | | | | | (10,909) | | | | | | 12,791 | | |
IT equipment
|
| | | | 113,790 | | | | | | (80,800) | | | | | | 32,990 | | | | | | 113,630 | | | | | | (71,190) | | | | | | 42,440 | | |
Computer Software
|
| | | | 4,456 | | | | | | (4,456) | | | | | | — | | | | | | 4,456 | | | | | | (4,456) | | | | | | — | | |
Construction in progress
|
| | | | — | | | | | | — | | | | | | — | | | | | | 825,307 | | | | | | — | | | | | | 825,307 | | |
Spa equipment, curtains, crockery,
glassware and linen |
| | | | 255,434 | | | | | | (161,724) | | | | | | 93,710 | | | | | | 257,094 | | | | | | (137,598) | | | | | | 119,496 | | |
| | | | $ | 11,378,550 | | | | | $ | (4,127,704) | | | | | $ | 7,250,846 | | | | | $ | 10,833,494 | | | | | $ | (3,434,042) | | | | | $ | 7,399,412 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Opening
Balance |
| |
Additions
|
| |
Disposals
|
| |
Translation
|
| |
Reclass
|
| |
Depreciation
|
| |
Closing
Balance |
| |||||||||||||||||||||
Land
|
| | | | 1,486,718 | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | 1,486,718 | | |
Buildings
|
| | | | 3,430,545 | | | | | | 135,941 | | | | | | — | | | | | | 359,867 | | | | | | | | | | | | (321,870) | | | | | | 3,604,483 | | |
Leasehold Property
|
| | | | 1,018,894 | | | | | | 54,250 | | | | | | — | | | | | | (1,579) | | | | | | 825,307 | | | | | | (241,743) | | | | | | 1,655,129 | | |
Plant & Machinery
|
| | | | 95,919 | | | | | | — | | | | | | — | | | | | | (3,291) | | | | | | | | | | | | (7,944) | | | | | | 84,684 | | |
Furniture and Fixtures
|
| | | | 231,452 | | | | | | 39,739 | | | | | | (24,033) | | | | | | | | | | | | | | | | | | (57,785) | | | | | | 189,373 | | |
Motor Vehicles
|
| | | | 135,850 | | | | | | — | | | | | | — | | | | | | (13,734) | | | | | | | | | | | | (28,336) | | | | | | 93,780 | | |
Office Equipment
|
| | | | 12,791 | | | | | | 3,893 | | | | | | (1,203) | | | | | | (2,751) | | | | | | | | | | | | (2,295) | | | | | | 10,435 | | |
IT Equipment
|
| | | | 42,440 | | | | | | — | | | | | | — | | | | | | (341) | | | | | | | | | | | | (9,564) | | | | | | 32,535 | | |
Construction in progress
|
| | | | 825,307 | | | | | | — | | | | | | — | | | | | | | | | | | | (825,307) | | | | | | — | | | | | | — | | |
Spa Equipment, curtains, crockery, glassware and linen
|
| | | | 119,496 | | | | | | — | | | | | | — | | | | | | (1,661) | | | | | | | | | | | | (24,126) | | | | | | 93,709 | | |
| | | | $ | 7,399,412 | | | | | $ | 233,823 | | | | | $ | (25,236) | | | | | $ | 336,510 | | | | | $ | — | | | | | $ | (693,663) | | | | | $ | 7,250,846 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Opening
Balance |
| |
Additions
|
| |
Disposals
|
| |
Translation
|
| |
Revaluation
|
| |
Depreciation
|
| |
Closing
Balance |
| |||||||||||||||||||||
Land
|
| | | | 1,486,453 | | | | | | 265 | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | 1,486,718 | | |
Buildings
|
| | | | 3,448,091 | | | | | | 147,815 | | | | | | — | | | | | | | | | | | | | | | | | | (165,361) | | | | | | 3,430,545 | | |
Leasehold Property
|
| | | | 832,002 | | | | | | 706,146 | | | | | | — | | | | | | | | | | | | | | | | | | (519,254) | | | | | | 1,018,894 | | |
Plant & Machinery
|
| | | | 13,390 | | | | | | 93,074 | | | | | | (3,309) | | | | | | | | | | | | | | | | | | (7,236) | | | | | | 95,919 | | |
Furniture and Fixtures
|
| | | | 239,759 | | | | | | 14,372 | | | | | | — | | | | | | | | | | | | | | | | | | (22,679) | | | | | | 231,452 | | |
Motor Vehicles
|
| | | | 74,055 | | | | | | 70,791 | | | | | | — | | | | | | | | | | | | | | | | | | (8,996) | | | | | | 135,850 | | |
Office Equipment
|
| | | | 1,359 | | | | | | 16,658 | | | | | | (214) | | | | | | | | | | | | | | | | | | (5,012) | | | | | | 12,791 | | |
IT Equipment
|
| | | | 36,015 | | | | | | 18,682 | | | | | | — | | | | | | | | | | | | | | | | | | (12,257) | | | | | | 42,440 | | |
Construction in progress
|
| | | | — | | | | | | 825,307 | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | 825,307 | | |
Spa Equipment, curtains, crockery,
glassware and linen |
| | | | 130,301 | | | | | | 8,928 | | | | | | (22) | | | | | | | | | | | | | | | | | | (19,711) | | | | | | 119,496 | | |
| | | | $ | 6,261,425 | | | | | $ | 1,902,038 | | | | | $ | (3,545) | | | | | $ | — | | | | | $ | — | | | | | $ | (760,506) | | | | | $ | 7,399,412 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Right of use asset – buildings
|
| | | $ | 1,378,312 | | | | | $ | 1,378,312 | | |
Right of use asset – office space
|
| | | | 58,412 | | | | | | 58,412 | | |
Right of use asset – leaseholds
|
| | | | 992,410 | | | | | | 992,410 | | |
Foreign currency translation
|
| | | | (39,007) | | | | | | — | | |
Accumulated depreciation on right of use assets
|
| | | | (726,246) | | | | | | (235,061) | | |
Right of use asset, net
|
| | | $ | 1,663,881 | | | | | $ | 2,194,073 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Within one year
|
| | | $ | 545,132 | | | | | $ | 544,551 | | |
Two to five years
|
| | | | 660,034 | | | | | | 1,214,787 | | |
Thereafter
|
| | | | 9,924,141 | | | | | | 15,534,632 | | |
| | | | | 11,129,307 | | | | | | 17,293,970 | | |
Less: finance charges component
|
| | | | (9,276,243) | | | | | | (15,020,231) | | |
| | | | $ | 1,853,064 | | | | | $ | 2,273,739 | | |
Lease liabilities, current
|
| | | $ | 545,132 | | | | | $ | 544,551 | | |
Lease liabilities, non-current
|
| | | | 1,307,932 | | | | | | 1,729,188 | | |
| | | | $ | 1,853,064 | | | | | $ | 2,273,739 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Investments in YouGo World
|
| | | $ | 28,698 | | | | | $ | 28,155 | | |
Other investments
|
| | | | 378 | | | | | | 371 | | |
Total
|
| | | $ | 29,076 | | | | | $ | 28,526 | | |
| | | | | | | | | | | | | |
|
Balance as of December 31, 2018
|
| | | | 6,333,290 | | |
|
Additions – acquisition of Entrepreneurs Institute
|
| | | | 3,655,567 | | |
|
Balance as of December 31, 2019
|
| | | $ | 9,988,857 | | |
|
Additions – acquisition of Entrepreneur Resorts
|
| | | | 8,986,921 | | |
|
Translation adjustment
|
| | | | (328,280) | | |
|
Balance as of December 31, 2020
|
| | | $ | 18,647,498 | | |
| | | | | | | | |
| | |
Balance at
December 31, 2019 |
| |
Software
Development Additions |
| |
Purchase
of Intangibles |
| |
Amortization
Expense |
| |
Foreign
Currency Translation |
| |
Balance at
December 31, 2020 |
| ||||||||||||||||||
GeniusU software platform
|
| | | $ | 1,563,193 | | | | | $ | 424,530 | | | | | $ | — | | | | | $ | — | | | | | $ | 19,459 | | | | | $ | 2,007,182 | | |
Trademarks
|
| | | | | | | | | | 13,234 | | | | | | | | | | | | | | | | | | | | | | | $ | 13,234 | | |
Wealth Dynamics acquired: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Developed content
|
| | | | 2,460,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 42,854 | | | | | | 2,502,854 | | |
Trade names/marks
|
| | | | 2,530,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 44,070 | | | | | | 2,574,070 | | |
Customer relationships
|
| | | | 350,000 | | | | | | | | | | | | — | | | | | | | | | | | | 6,096 | | | | | | 356,096 | | |
Accumulated amortization
|
| | | | (737,481) | | | | | | — | | | | | | — | | | | | | (657,822) | | | | | | (14,866) | | | | | | (1,410,169) | | |
Entrepreneur Resorts acquired:
|
| | | | — | | | | | | — | | | | | | 14,978,591 | | | | | | (280,609) | | | | | | — | | | | | | 14,697,982 | | |
Net carrying value
|
| | | $ | 6,165,712 | | | | | $ | 437,764 | | | | | $ | 14,978,591 | | | | | $ | (938,431) | | | | | $ | 97,613 | | | | | $ | 20,741,249 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance at
December 31, 2018 |
| |
Software
Development Additions |
| |
Purchase
of Intangibles |
| |
Amortization
Expense |
| |
Foreign
Currency Translation |
| |
Balance at
December 31, 2019 |
| ||||||||||||||||||
GeniusU software platform
|
| | | $ | 1,103,705 | | | | | $ | 423,959 | | | | | $ | — | | | | | $ | — | | | | | $ | 35,529 | | | | | $ | 1,563,193 | | |
Entrepreneurs Institute acquired: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Developed content
|
| | | | — | | | | | | — | | | | | | 2,460,000 | | | | | | — | | | | | | — | | | | | | 2,460,000 | | |
Trade names/marks
|
| | | | — | | | | | | — | | | | | | 2,530,000 | | | | | | — | | | | | | — | | | | | | 2,530,000 | | |
Customer relationships
|
| | | | | | | | | | | | | | | | 350,000 | | | | | | | | | | | | | | | | | | 350,000 | | |
Accumulated amortization
|
| | | | (358,067) | | | | | | — | | | | | | — | | | | | | (365,166) | | | | | | (14,248) | | | | | | (737,481) | | |
Net carrying value
|
| | | $ | 745,638 | | | | | $ | 423,959 | | | | | $ | 5,340,000 | | | | | $ | (365,166) | | | | | $ | 21,281 | | | | | $ | 6,165,712 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance
December 31, 2019 |
| |
Recognized
In Business Combinations |
| |
Recognized
In Provision For Income Taxes |
| |
Balance
December 31, 2020 |
| ||||||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets
|
| | | $ | (891,367) | | | | | $ | 2,995,717 , | | | | | $ | 106,018 | | | | | $ | (3,781,066) | | |
Property, plant, and equipment
|
| | | | (1,005,005) | | | | | | (69,537) | | | | | | 94,930 | | | | | | (979,612) | | |
| | | | | (1,896,372) | | | | | | (3,065,254) | | | | | | 200,948 | | | | | | (4,760,678) | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Other (Section 24C allowance)
|
| | | | (11,709) | | | | | | — | | | | | | (140) | | | | | | (11,849) | | |
Other (Other)
|
| | | | — | | | | | | — | | | | | | 26,452 | | | | | | 26,452 | | |
| | | | | (11,709) | | | | | | — | | | | | | 26,312 | | | | | | 14,603 | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Income in Advance
|
| | | | 105,108 | | | | | | — | | | | | | (7,093) | | | | | | 98,015 | | |
Tax Losses
|
| | | | 485,195 | | | | | | | | | | | | (4,081) | | | | | | 481,114 | | |
| | | | | 590,303 | | | | | | — | | | | | | (11,174) | | | | | | 579,129 | | |
Net deferred tax assets and (liabilities)
|
| | | $ | (1,317,778) | | | | | $ | (3,065,254) | | | | | $ | 216,086 | | | | | $ | (4,166,946) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance
December 31, 2018 |
| |
Recognized
In Business Combinations |
| |
Recognized
In Provision For Income Taxes |
| |
Balance
December 31, 2019 |
| ||||||||||||
Non-current assets:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets
|
| | | $ | — | | | | | $ | (907,800) | | | | | $ | 16,433 | | | | | $ | (891,367) | | |
Property, plant, and equipment
|
| | | | (853,231) | | | | | | (218,402) | | | | | | 66,628 | | | | | $ | (1,005,005) | | |
Other
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | |
| | | | | (853,231) | | | | | | (1,126,202) | | | | | | 83,061 | | | | | | (1,896,372) | | |
Current assets:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Receivables
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | |
Prepaid expenses
|
| | | | (1,536) | | | | | | — | | | | | | 1,536 | | | | | $ | — | | |
Other (Section 24C allowance)
|
| | | | (70,427) | | | | | | — | | | | | | 58,718 | | | | | $ | (11,709) | | |
| | | | | (71,963) | | | | | | — | | | | | | 60,254 | | | | | | (11,709) | | |
Current liabilities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | |
Income in Advance
|
| | | | 117,378 | | | | | | — | | | | | | (12,270) | | | | | $ | 105,108 | | |
Tax Losses
|
| | | | 373,618 | | | | | | 310,233 | | | | | | (198,656) | | | | | $ | 485,195 | | |
| | | | | 490,996 | | | | | | 310,233 | | | | | | (210,926) | | | | | | 590,303 | | |
Net deferred tax assets and (liabilities)
|
| | | $ | (434,198) | | | | | $ | (815,969) | | | | | $ | (67,611) | | | | | $ | (1,317,778) | | |
| | |
Year Ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Unused tax losses for which no deferred tax assets has been
recognized |
| | | $ | (3,565,064) | | | | | $ | (4,141,417) | | |
Potential tax benefit of such unused tax losses at applicable statutory
tax rates |
| | | $ | (863,874) | | | | | $ | (784,847) | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Accrued expenses
|
| | | $ | 233,842 | | | | | $ | 275,258 | | |
North West Parks Board
|
| | | | 1,049,515 | | | | | | 986,516 | | |
Other taxation payable
|
| | | | 104,368 | | | | | | 135,381 | | |
VAT
|
| | | | 28,271 | | | | | | 33,938 | | |
Derivative liability
|
| | | | 250,000 | | | | | | — | | |
Sundry payables
|
| | | | 144,226 | | | | | | 11,497 | | |
Total
|
| | | $ | 1,810,222 | | | | | $ | 1,442,590 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Advance bookings for lodges
|
| | | $ | 379,305 | | | | | $ | 399,291 | | |
Educational revenue paid in advance
|
| | | | 1,026,700 | | | | | | 2,724,427 | | |
Other prepaid income
|
| | | | 140,706 | | | | | | 107,713 | | |
Total
|
| | | $ | 1,546,712 | | | | | $ | 3,231,431 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Loans payable – current portion
|
| | | $ | 65,611 | | | | | $ | 64,379 | | |
Loans payable – non-current portion
|
| | | | 157,629 | | | | | | 1,217,509 | | |
Total
|
| | | $ | 223,240 | | | | | $ | 1,281,888 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Loan payable to related parties for the acquisition of Wealth Dynamics | | | | | | | | | | | | | |
Current portion
|
| | | $ | 400,000 | | | | | $ | 400,000 | | |
Non-current portion
|
| | | | — | | | | | | 400,000 | | |
Subtotal
|
| | | | 400,000 | | | | | | 800,000 | | |
Other loans payable to related parties, current
|
| | | | 189,502 | | | | | | 32,800 | | |
Total loans payable to related parties
|
| | | $ | 589,502 | | | | | $ | 832,800 | | |
| | | | | | | | | | | | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Convertible debt obligations, gross
|
| | | $ | 1,531,639 | | | | | $ | 2,256,178 | | |
Deferred debt discount
|
| | | | — | | | | | | (337,838) | | |
Convertible debt obligations, net
|
| | | $ | 1,531,639 | | | | | $ | 1,918,340 | | |
| |
| | |
For the Years Ended
December 31, |
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Risk-free interest rate
|
| | | | 0.13% | | | | | | 2.50% | | |
Contractual term (years)
|
| | | | 2.00 | | | | | | 2.00 | | |
Expected volatility
|
| | | | 42.00% | | | | | | 39.00% | | |
Expected dividends
|
| | | | 0.00% | | | | | | 0.00% | | |
| | | | | | | | | | | | | |
| | |
No of
Options |
| |
Weighted
Average Share Price |
| |
Weighted
Average Remaining Life |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding Jan. 1, 2018
|
| | | | 253,818 | | | | | | 2.43 | | | | | | 1.00 | | | | | | 119,667 | | |
Granted
|
| | | | 42,913 | | | | | | 21.34 | | | | | | 0.00 | | | | | | 0 | | |
Exercised
|
| | | | -253,818 | | | | | | 2.43 | | | | | | 0.00 | | | | | | 0 | | |
Expired
|
| | | | 0 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Outstanding Dec 31, 2019
|
| | | | 42,913 | | | | | | 21.34 | | | | | | 1.00 | | | | | | 580,613 | | |
Granted
|
| | | | 12,238 | | | | | | 34.87 | | | | | | 0.00 | | | | | | 0 | | |
Exercised
|
| | | | -42,913 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Expired
|
| | | | 0 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Outstanding Dec 31, 2020
|
| | | | 12,238 | | | | | | 34.87 | | | | | | 1.00 | | | | | | 97,782 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Year
|
| |
Options Outstanding
|
| |
Underlying
Common Stock |
| |
Options Exercisable
|
| ||||||||||||||||||
|
Exercise
Price |
| |
Outstanding
Number of options |
| |
Weighted
Average Remaining Life in Years |
| |
Exercisable
Number of Warrants |
| |||||||||||||||||
2019
|
| | | $ | 21.34 | | | | | | 42,913 | | | |
Genius Group
|
| | | | n/a | | | | | | n/a | | |
2020
|
| | | $ | 34.87 | | | | | | 12,238 | | | |
Genius Group
|
| | | | n/a | | | | | | n/a | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Campus Revenue | | | | | | | | | | | | | |
– Sale of goods
|
| | | $ | 1,280,320 | | | | | $ | 1,796,961 | | |
– Rendering of services
|
| | | | 735,246 | | | | | | 2,635,035 | | |
Campus sub-total
|
| | | | 2,015,566 | | | | | | 4,431,996 | | |
Education Revenue | | | | | | | | | | | | | |
– Digital
|
| | | | 5,298,227 | | | | | | 4,771,253 | | |
– In-Person
|
| | | | 319,983 | | | | | | 745,808 | | |
Education sub-total
|
| | | | 5,618,210 | | | | | | 5,517,061 | | |
Total Revenue
|
| | | $ | 7,633,776 | | | | | $ | 9,949,057 | | |
| | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Administration and management fees received
|
| | | $ | — | | | | | $ | 12,458 | | |
Other income
|
| | | | 133,519 | | | | | | 81,673 | | |
| | | | $ | 133,519 | | | | | $ | 94,131 | | |
| | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Consulting and professional services
|
| | | $ | 424,891 | | | | | $ | 606,738 | | |
Marketing
|
| | | | 72,942 | | | | | | 814,873 | | |
Rent expense
|
| | | | 144,423 | | | | | | 457,735 | | |
Repairs and maintenance
|
| | | | 103,152 | | | | | | 120,023 | | |
Salaries, wages, bonuses and other benefits
|
| | | | 3,031,485 | | | | | | 3,538,114 | | |
Travel
|
| | | | 13,356 | | | | | | 447,383 | | |
Utilities
|
| | | | 112,027 | | | | | | 85,319 | | |
Other
|
| | | | 1,314,430 | | | | | | 499,834 | | |
Development charges
|
| | | | 378,010 | | | | | | 360,933 | | |
Stock-based compensation
|
| | | | 394,717 | | | | | | 171,768 | | |
Provision for doubtful debts
|
| | | | 161,788 | | | | | | — | | |
Total general and administrative expenses
|
| | | $ | 6,151,221 | | | | | $ | 7,102,720 | | |
| | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Interest income | | | | | | | | | | | | | |
Bank and other cash
|
| | | $ | 55,649 | | | | | $ | 1,996 | | |
Other financial assets – loans
|
| | | | — | | | | | | 102,431 | | |
Total interest income
|
| | | | 55,649 | | | | | | 104,427 | | |
Interest expense/finance costs | | | | | | | | | | | | | |
Lease liabilities
|
| | | | 131,291 | | | | | | 122,190 | | |
Other interest paid – loans
|
| | | | 455,394 | | | | | | 266,059 | | |
Amortization of debt discount
|
| | | | 322,947 | | | | | | 580,049 | | |
Total interest expense/ finance costs
|
| | | | 909,632 | | | | | | 968,298 | | |
Total interest (expense) income, net
|
| | | $ | (853,983) | | | | | $ | (863,871) | | |
| | | | | | | | | | | | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Current tax: | | | | | | | | | | | | | |
Current tax on profits for the year
|
| | | $ | — | | | | | $ | 27,265 | | |
| | | | | — | | | | | | 27,265 | | |
Deferred income tax: | | | | | | | | | | | | | |
(Increase) decrease in deferred tax assets
|
| | | | (15,278) | | | | | | 210,926 | | |
Decrease in deferred tax liabilities
|
| | | | (200,808) | | | | | | (143,315) | | |
| | | | | (216,086) | | | | | | 67,612 | | |
(Benefit from) Provision for income taxes
|
| | | $ | (216,086) | | | | | $ | 94,877 | | |
| | | | | | | | | | | | | |
| | |
Years ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Income (loss) from continuing operations before provision for income
taxes |
| | | $ | (3,692,802) | | | | | $ | (1,215,676) | | |
Tax at the Singapore rate of 17%
|
| | | $ | (627,776) | | | | | $ | (206,665) | | |
Reconciling items: | | | | | | | | | | | | | |
Permanent differences
|
| | | | 39,478 | | | | | | 91,519 | | |
Usage of unrecorded net operating loss deferred tax asset
|
| | | | (170,881) | | | | | | (316,226) | | |
Current period net operating losses not recognised as a deferred tax asset
|
| | | | 405,034 | | | | | | 272,204 | | |
Rate differential – non-Singapore entities
|
| | | | 24,375 | | | | | | 188,728 | | |
Reversal of deferred tax liability
|
| | | | — | | | | | | (16,432) | | |
Other deferred tax activity
|
| | | | 113,684 | | | | | | 81,749 | | |
Provision for income taxes
|
| | | $ | (216,086) | | | | | $ | 94,877 | | |
| | | | | | | | | | | | | |
| | |
As of December 31, 2020
|
| |||||||||||||||||||||
|
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||||
FINANCIAL ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial assets at amortized cost
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 2,273,151 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,273,151 | | |
Accounts receivable
|
| | | | — | | | | | | 948,341 | | | | | | — | | | | | | 948,341 | | |
Due from related parties
|
| | | | — | | | | | | 53,851 | | | | | | — | | | | | | 53,851 | | |
Financial assets at fair value through profit or loss
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Investments at fair value
|
| | | | — | | | | | | — | | | | | | 29,076 | | | | | | 29,076 | | |
FINANCIAL LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial liabilities at amortized cost
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | — | | | | | | 821,820 | | | | | | — | | | | | | 821,820 | | |
Derivative liability
|
| | | | — | | | | | | 250,000 | | | | | | — | | | | | | 250,000 | | |
Loans payable
|
| | | | — | | | | | | 223,240 | | | | | | — | | | | | | 223,240 | | |
Loans payable, related parties
|
| | | | — | | | | | | 589,502 | | | | | | — | | | | | | 589,502 | | |
Lease liabilities
|
| | | | — | | | | | | 1,853,064 | | | | | | — | | | | | | 1,853,064 | | |
Convertible debt obligations, net
|
| | | | — | | | | | | 1,531,639 | | | | | | — | | | | | | 1,531,639 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
As of December 31, 2019
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
FINANCIAL ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial assets at amortized cost
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 3,290,095 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,290,095 | | |
Accounts receivable
|
| | | | — | | | | | | 1,263,849 | | | | | | — | | | | | | 1,263,849 | | |
Due from related parties
|
| | | | — | | | | | | 67,310 | | | | | | — | | | | | | 67,310 | | |
Financial assets at fair value through profit or loss
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Investments at fair value
|
| | | | — | | | | | | — | | | | | | 28,526 | | | | | | 28,526 | | |
FINANCIAL LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial liabilities at amortized cost
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | — | | | | | | 486,871 | | | | | | — | | | | | | 486,871 | | |
Loans payable
|
| | | | — | | | | | | 1,281,888 | | | | | | — | | | | | | 1,281,888 | | |
Loans payable, related parties
|
| | | | — | | | | | | 832,800 | | | | | | — | | | | | | 832,800 | | |
Lease liabilities
|
| | | | — | | | | | | 2,273,739 | | | | | | — | | | | | | 2,273,739 | | |
Convertible debt obligations, net
|
| | | | — | | | | | | 1,918,340 | | | | | | — | | | | | | 1,918,340 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Relationships
|
| | | |
Members of key management | | | Roger James Hamilton | |
| | | Dennis Owen Du Bois | |
| | | Sandra Lee Morrell | |
| | | Vilma Lisa Bovio | |
| | | Jeremy Justin Harris | |
| | |
MI Senne
Suraj Naik
|
|
| | | | |
Name of the Director
|
| |
Job Title
|
| |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |||||||||||||||||||||||||||||||||||
|
Salary
|
| |
Stock-based
|
| |
Total
|
| |
Salary
|
| |
Stock-based
|
| |
Total
|
| |||||||||||||||||||||||
Roger James Hamilton
|
| | Chief Executive Officer | | | | $ | 463,235 | | | | | $ | 103,223 | | | | | $ | 566,458 | | | | | $ | 432,411 | | | | | $ | 60,007 | | | | | $ | 492,418 | | |
Michelle Clarke
|
| |
Chief Marketing Officer
|
| | | | 83,235 | | | | | | 18,553 | | | | | | 101,788 | | | | | | 93,746 | | | | | | 15,870 | | | | | | 109,616 | | |
Suraj Naik
|
| |
Chief Technology Officer
|
| | | | 67,719 | | | | | | 13,274 | | | | | | 80,993 | | | | | | 75,701 | | | | | | 11,588 | | | | | | 82,289 | | |
Sandra Morrell
|
| | Chief Operating Officer | | | | | 151,439 | | | | | | 30,284 | | | | | | 181,723 | | | | | | 165,947 | | | | | | 20,150 | | | | | | 186,097 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name of the Director
|
| |
Job Title
|
| |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |||||||||||||||||||||||||||||||||||
|
Salary
|
| |
Stock-based
|
| |
Total
|
| |
Salary
|
| |
Stock-based
|
| |
Total
|
| |||||||||||||||||||||||
Patrick Grove
|
| | Director | | | | $ | 8,705 | | | | | $ | 34,870 | | | | | $ | 43,575 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Nic Lim
|
| | Director | | | | | 6,964 | | | | | | 36,614 | | | | | | 43,578 | | | | | | 5,882 | | | | | | — | | | | | | 5,882 | | |
Anna Gong
|
| | Director | | | | | 8,705 | | | | | | 34,870 | | | | | | 43,575 | | | | | | 5,882 | | | | | | — | | | | | | 5,882 | | |
Jeremy Harris
|
| | Director | | | | | 39,652 | | | | | | 8,578 | | | | | | 48,230 | | | | | | 50,688 | | | | | | — | | | | | | 50,688 | | |
Dennis DuBois
|
| | Director | | | | | 20,400 | | | | | | 3,592 | | | | | | 23,992 | | | | | | 24,000 | | | | | | — | | | | | | 24,000 | | |
Lisa Bovio
|
| | Director | | | | | 20,400 | | | | | | 3,592 | | | | | | 23,992 | | | | | | 24,000 | | | | | | — | | | | | | 24,000 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||||
|
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||||
Revenues
|
| | | $ | 5,618,210 | | | | | $ | 2,015,566 | | | | | $ | 7,633,776 | | | | | $ | 5,517,061 | | | | | $ | 4,431,996 | | | | | $ | 9,949,057 | | |
Depreciation and Amortization
|
| | | $ | 914,195 | | | | | $ | 1,226,131 | | | | | $ | 2,140,326 | | | | | $ | 373,465 | | | | | $ | 985,310 | | | | | $ | 1,358,775 | | |
(Loss) income from Operations
|
| | | $ | 8,710 | | | | | $ | (3,259,292) | | | | | $ | (3,250,582) | | | | | $ | (1,302,451) | | | | | $ | 166,911 | | | | | $ | (1,135,540) | | |
Net Profit or Loss
|
| | | $ | (135,636) | | | | | $ | (3,341,080) | | | | | $ | (3,476,716) | | | | | $ | (1,286,019) | | | | | $ | (24,534) | | | | | $ | (1,310,553) | | |
Interest Expense, net
|
| | | $ | 107,833 | | | | | $ | 746,150 | | | | | $ | 853,983 | | | | | $ | — | | | | | $ | 863,871 | | | | | $ | 863,871 | | |
Capital Expenditures
|
| | | $ | 437,764 | | | | | $ | 233,823 | | | | | $ | 671,587 | | | | | $ | 423,959 | | | | | $ | 636,165 | | | | | $ | 1,060,124 | | |
Total Property and Equipment, net
|
| | | $ | 10,881 | | | | | $ | 7,239,965 | | | | | $ | 7,250,846 | | | | | $ | 11,519 | | | | | $ | 7,387,893 | | | | | $ | 7,399,412 | | |
Total Assets
|
| | | $ | 12,030,161 | | | | | $ | 41,755,288 | | | | | $ | 53,785,449 | | | | | $ | 12,422,243 | | | | | $ | 19,160,141 | | | | | $ | 31,582,385 | | |
Total Liabilities
|
| | | $ | 5,673,010 | | | | | $ | 6,870,135 | | | | | $ | 12,543,145 | | | | | $ | 4,468,709 | | | | | $ | 8,341,876 | | | | | $ | 12,810,585 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||||
|
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||||
Europe / Middle East / Africa
|
| | | $ | 2,068,037 | | | | | $ | 1,010,699 | | | | | $ | 3,078,736 | | | | | $ | 1,818,859 | | | | | $ | 1,951,769 | | | | | $ | 3,770,628 | | |
Asia / Pacific
|
| | | | 1,954,842 | | | | | | 1,004,867 | | | | | | 2,959,709 | | | | | | 2,108,503 | | | | | | 2,480,027 | | | | | | 4,588,530 | | |
North America / South America
|
| | | | 1,595,331 | | | | | | — | | | | | | 1,595,331 | | | | | | 1,589,899 | | | | | | — | | | | | | 1,589,899 | | |
| | | | $ | 5,618,210 | | | | | $ | 2,015,566 | | | | | $ | 7,633,776 | | | | | $ | 5,517,261 | | | | | $ | 4,431,796 | | | | | $ | 9,949,057 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||||
|
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||||
Europe / Middle East / Africa
|
| | | $ | 802 | | | | | $ | 28,637,668 | | | | | $ | 28,638,470 | | | | | $ | — | | | | | $ | 12,909,577 | | | | | $ | 12,909,577 | | |
Asia / Pacific
|
| | | | 9,193,692 | | | | | | 10,500,388 | | | | | | 19,694,080 | | | | | | 9,861,324 | | | | | | 3,005,679 | | | | | | 12,867,003 | | |
North America / South America
|
| | | | 516,296 | | | | | | — | | | | | | 516,296 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | 9,710,790 | | | | | $ | 39,138,056 | | | | | $ | 48,848,846 | | | | | $ | 9,861,324 | | | | | $ | 15,915,256 | | | | | $ | 25,776,580 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Description
|
| |
Date of Sale
|
| |
Number of
Shares |
| |
Consideration
(USD) |
| ||||||
Opening Share Capital Balance (Before 2018)
|
| |
2017 and Prior
|
| | | | 1,300,007 | | | | | | 1,649,201 | | |
Share Issue – 10 Investors @ $21.34 per share
|
| |
Q2 2018
|
| | | | 21,088 | | | | | | 450,020 | | |
Share Issue – 3 Investors @ $26.13 per share
|
| |
Jan 2019
|
| | | | 7,653 | | | | | | 200,000 | | |
Share Issue – 37 Investors @ 28.75 per share
|
| |
May to Jul 2019
|
| | | | 39,349 | | | | | | 1,131,000 | | |
Share Issue – 34 Investors @ 29.53 per share
|
| |
Aug 2019
|
| | | | 21,372 | | | | | | 631,168 | | |
Share Issue – 3 Investors @ 32.81 per share (Entrepreneurs Institute Acquisition)
|
| |
Aug 2019
|
| | | | 195,062 | | | | | | 6,399,984 | | |
Share Issue – 35 Investors @ 32.91 per share
|
| |
Aug 2019 to Sep 2019
|
| | | | 8,054 | | | | | | 265,049 | | |
Share Issue – 5 Investors @ 32.91 per share
|
| |
Dec 2019
|
| | | | 4,255 | | | | | | 140,000 | | |
Share Issue – 23 Investors @ 34.87 per share
|
| |
Dec 2019
|
| | | | 6,676 | | | | | | 232,760 | | |
Share Issue – 13 Investors (Employee Share Issue for 2018 Options – Exercised)
|
| |
Dec 2019
|
| | | | 20,317 | | | | | | 313,897 | | |
Share Issue – 7 Investors @ 32.91
|
| |
Jan 2020
|
| | | | 5,167 | | | | | | 170,033 | | |
Share Issue – 22 Investors @ 34.87
|
| |
Feb 2020 to Jun 2020
|
| | | | 8,863 | | | | | | 309,000 | | |
Share Issue – 112 Investors @ 34.87
|
| |
Jul to Aug 2020
|
| | | | 55,046 | | | | | | 1,919,427 | | |
Share Issue – 251 Investors @ 34.87 (Entrepreneur Resorts Acquisition)
|
| |
Jul 2020
|
| | | | 888,962 | | | | | | 30,997,810 | | |
Share Issue – 51 Investors @ 42.86
|
| |
Sep 2020
|
| | | | 37,582 | | | | | | 1,610,809 | | |
Share Issue – 7 @ 0.01 (Entrepreneur Resorts Directors)
|
| |
Sep 2020
|
| | | | 72,264 | | | | | | 722.64 | | |
Share Issue – 14 @ 1 (City Leader Promotion)
|
| |
Sep 2020
|
| | | | 918 | | | | | | 918 | | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Roger James Hamilton
Roger James Hamilton
|
| |
Chief Executive Officer, Chairman
(principal executive officer) |
| |
July 6, 2021
|
|
|
/s/ Michelle Clarke
Michelle Clarke
|
| | Chief Marketing Officer, Director | | |
July 6, 2021
|
|
|
/s/ Suraj Naik
Suraj Naik
|
| | Chief Technology Officer, Director | | |
July 6, 2021
|
|
|
/s/ Jeremy Harris
Jeremy Harris
|
| |
Chief Financial Officer
(principal financial and accounting officer) |
| |
July 6, 2021
|
|
|
Exhibit
Number |
| |
Description of Document
|
|
| 1.1* | | | Form of Underwriting Agreement | |
| 2.1* | | | Share Purchase Agreement dated Oct. 22, 2020 among Genius Group Ltd, David Raymond Hitchins and Angela Stead | |
| 2.2* | | | Share Purchase Agreement dated Nov. 28, 2020 between Genius Group Ltd and Lillian Magdalena Niemann | |
| 2.3* | | | Share Purchase Agreement dated Nov. 30, 2020 between Genius Group Ltd and Property Mastermind International PTE Ltd. | |
| 2.4* | | | Stock Purchase Agreement dated Dec. 18, 2020 among Sandra Johnson, Marco Johnson, University of Antelope Valley, Inc., and University of Antelope Valley, LLC, and Genius Group Ltd | |
| 2.5* | | | Tender Offer Letter dated May 14, 2020 for Genius Group Ltd to acquire Entrepreneur Resorts Limited | |
| 2.6* | | | Asset Transfer Agreement dated Oct. 1, 2019 between Genius Group Ltd and GeniusU Ltd | |
| 2.7* | | |
Share Purchase Agreement dated Aug. 30, 2019 between Genius Group Ltd and Wealth
Dynamics Pte Ltd |
|
| 3.1* | | | Constitution of the Registrant | |
| 4.1* | | | Registrant’s Specimen Certificate for Ordinary Shares | |
| 5.1* | | | Opinion of CNP Law LLP regarding legality of offered shares | |
| 8.1* | | | Opinion of Ellenoff Grossman & Schole LLP regarding certain U.S. tax matters | |
| 8.2* | | | Opinion of CNP Law LLP regarding certain Singapore tax matters | |
| 10.1* | | | Tenancy Agreement dated June 27, 2019 between China Classic Pte Ltd and Entrepreneur Resorts Pte Ltd | |
| 10.2* | | | Employment and Board of Directors Agreement dated June 15, 2020 between Genius Group Ltd and Roger James Hamilton | |
| 10.3* | | | Employment and Board of Directors Agreement dated June 15, 2020 between Genius Group Ltd and Michelle Clarke | |
| 10.4* | | | Employment and Board of Directors Agreement dated June 15, 2020 between Genius Group Ltd and Suraj Naik | |
| 10.5* | | | Employment of Director Agreement dated June 15, 20202 between Genius Group Ltd and Sandra Morrell | |
| 10.6* | | | Employment Agreement dated June 15, 2020 between Genius Group Ltd and Jeremy Harris | |
| 10.7* | | | Board of Directors Services Agreement dated Jan. 1, 2020 between Genius Group Ltd and Patrick Grove | |
| 10.8* | | | Board of Directors Services Agreement dated Jan. 1, 2020 between Genius Group Ltd and Anna Gong | |
| 10.9* | | | Board of Directors Services Agreement dated Jan. 1, 2020 between Genius Group Ltd and Nic Lim Kah Wui | |
| 10.10* | | | Facility Letter dated Sept. 12, 2019 between Wealth Dynamics PTE Ltd and United Overseas Bank Limited | |
| 10.11* | | | Employee Share Option Scheme Rules | |
| 14.1* | | | Code of Ethics | |
| 21.1* | | | List of Subsidiaries | |
|
Exhibit
Number |
| |
Description of Document
|
|
| 23.1 | | | | |
| 23.2* | | | Consent of CNP Law LLP (contained in Exhibit 5.1) | |
| 23.3* | | | Consent of Ellenoff Grossman & Schole LLP (contained in Exhibit 8.1) | |
| 23.4* | | | Consent of CNP Law LLP (contained in Exhibit 8.2) | |
| 23.5 | | | Consent of Lightheart, Sanders and Associates | |
| 99.1* | | | Charter of Audit Committee | |
| 99.2* | | | Charter of Compensation Committee | |
| 99.3* | | | Charter of Nominating and Corporate Governance Committee | |
| 99.4 | | | University of Antelope Valley, Inc. Audited Financial Statements for the Year Ended Dec. 31, 2019 | |
| 99.5 | | | University of Antelope Valley, Inc. Audited Financial Statements for the Year Ended Dec. 31, 2020 | |
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in the Registration Statement of Genius Group Limited and Subsidiaries on Form F-1 of our report dated July 2, 2021 with respect to our audits of the consolidated financial statements of Genius Group Limited and Subsidiaries as of December 31, 2020 and 2019 and for each of the two years in the period ended December 31, 2020, which report is included in this Annual Report on Form F-1 of Genius Group Limited and Subsidiaries for each of the two years in the period ended December 31, 2020.
/s/ Marcum LLP |
Marcum llp
Melville, NY
July 2, 2021
Exhibit 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our Auditors' Reports, dated May 6, 2021 and December 14, 2020, on the financial statements of University of Antelope Valley, Inc. for the years ended December 31, 2020 and 2019, respectively, in the Company's Report on Form 20F. We also consent to application of such report to the financial information in the Report on Form 20F, when such financial information is read in conjunction with the financial statements referred to in our reports.
Lightheart, Sanders and Associates
Certified Public Accountants
Madison, Mississippi
May 6, 2021
140 Fountains Blvd., Suite D, Madison MS 39110 ♦ 601-898-2727 ♦ www.lsacpafirm.com
Exhibit 99.4
University of Antelope Valley, Inc.
Financial Statements
Year Ended December 31, 2019
University of Antelope Valley, Inc.
Table of Contents
INDEPENDENT AUDITORS’ REPORT | 1 |
CONSOLIDATED FINANCIAL STATEMENTS | 3 |
BALANCE SHEET | 3 |
INCOME STATEMENT | 5 |
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY | 6 |
STATEMENT OF CASH FLOWS | 7 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 8 |
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders of
University of Antelope Valley, Inc.
We have audited the accompanying financial statements of University of Antelope Valley, Inc. (a California Corporation), which comprise the balance sheet as of December 31, 2019, and the related statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Institution’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institution’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
116 One Madison Plaza, Suite 1200, Madison MS 39110 ♦ 601-898-2727 ♦ www.lsacpafirm.com
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of University of Antelope Valley, Inc., as of December 31, 2019, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Lightheart, Sanders and Associates
Certified Public Accountants
Madison, Mississippi
December 14, 2020
University of Antelope Valley, Inc.
Balance Sheet
December 31, 2019
Assets | ||||
Current Assets | ||||
Cash and cash equivalents | $ | 1,252,866 | ||
Accounts receivable, net of allowance for doubtful accounts | 3,490,247 | |||
Other receivable | 4,140 | |||
Inventory | 197,680 | |||
Prepaid expenses | 23,180 | |||
Total Current Assets | 4,968,113 | |||
Depreciable Assets | ||||
Leasehold improvements | 659,856 | |||
Vehicles | 245,448 | |||
Equipment | 1,118,581 | |||
Furniture and fixtures | 647,126 | |||
Other depreciable assets | 196,595 | |||
Signs | 59,366 | |||
Total Depreciable Assets | 2,926,972 | |||
Accumulated depreciation | (2,206,392 | ) | ||
Net Depreciable Assets | 720,580 | |||
Construction In Progress | 470,984 | |||
Other Assets | ||||
Intangible assets, net of amortization | 26,263 | |||
Total Other Assets | 26,263 | |||
Total Assets | $ | 6,185,940 |
3
University of Antelope Valley, Inc.
Balance Sheet
December 31, 2019
Liabilities and Stockholders' Equity | ||||
Current Liabilities | ||||
Accounts payable | $ | 587,065 | ||
Accrued liabilities | 362,570 | |||
Income tax payable | 6,558 | |||
Due to students | 594,061 | |||
Deferred income | 2,144,861 | |||
Total Current Liabilities | 3,695,115 | |||
Stockholders' Equity | ||||
Common stock | 25,000 | |||
Additional paid in capital | 685,000 | |||
Retained earnings (deficit) | 1,780,825 | |||
Total Stockholders' Equity | 2,490,825 | |||
Total Liabilities and Stockholders' Equity | $ | 6,185,940 |
4
University of Antelope Valley, Inc.
Income Statement
For the Year Ended December 31, 2019
Revenue | ||||
Tuition revenue | $ | 10,216,021 | ||
Rental income | 4,885 | |||
Retail sales | 788,188 | |||
Auxiliary income | 889,249 | |||
Other fees | 155,875 | |||
Total Net Revenue | 12,054,218 | |||
Cost of Goods | ||||
Instructional | 2,935,822 | |||
Books and supplies | 927,748 | |||
Total Cost of Goods | 3,863,570 | |||
Operating Expenses | ||||
Marketing | 405,779 | |||
Depreciation and amortization | 134,084 | |||
General and administrative | 5,925,411 | |||
Occupancy and maintenance | 1,356,810 | |||
Total Operating Expenses | 7,822,084 | |||
Other Income (Expense) | ||||
Interest income | 24 | |||
Interest expense | (4,891 | ) | ||
Other expense | (27,369 | ) | ||
Gain (loss) on sale of assets | 27,673 | |||
Total Other Income (Expense) | (4,563 | ) | ||
Net Income (Loss) Before Income Taxes | 364,001 | |||
Income Tax Provision | ||||
Income tax expense | (7,500 | ) | ||
Total Income Tax Provisions | (7,500 | ) | ||
Net Income (loss) | $ | 356,501 |
5
University of Antelope Valley, Inc.
Statement of Changes in Stockholders' Equity
For the Year Ended December 31, 2019
Common
Stock |
Additional
Paid-In- Capital |
Retained
Earnings (deficit) |
Total | |||||||||||||
Balance on December 31, 2018 | $ | 25,000 | $ | 685,000 | $ | 2,697,636 | $ | 3,407,636 | ||||||||
Net income (loss) | - | 356,501 | 356,501 | |||||||||||||
Dividends to stockholders | - | (1,273,312 | ) | (1,273,312 | ) | |||||||||||
Balance on December 31, 2019 | $ | 25,000 | $ | 685,000 | $ | 1,780,825 | $ | 2,490,825 |
6
University of Antelope Valley, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash Flows from Operating Activities | ||||
Net income (loss) | $ | 356,501 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 134,084 | |||
Unrealized (gain) loss on investments | ||||
(Increase) decrease in: | ||||
Accounts receivable | 386,099 | |||
Other receivables | (4,140 | ) | ||
Inventory | 50,771 | |||
Prepaid expenses | (3,524 | ) | ||
Due from related party | 878,368 | |||
(Decrease) increase in: | ||||
Accounts payable | (77,121 | ) | ||
Accrued liabilities | 199,848 | |||
Income tax payable | 4,958 | |||
Due to students | (186,120 | ) | ||
Deferred income | (264,936 | ) | ||
Net Cash Provided By (Used In) Operating Activities | 1,474,788 | |||
Cash Flows from Investing Activities | ||||
Investments in related party | 80,000 | |||
Loss on disposition of fixed assets | 3,196 | |||
Acquisition of fixed assets | (305,584 | ) | ||
Net Cash Provided By (Used In) Investing Activities | (222,388 | ) | ||
Cash Flows from Financing Activities | ||||
Dividends to stockholders | (1,273,312 | ) | ||
Net Cash Provided By (Used In) Financing Activities | (1,273,312 | ) | ||
Net Increase In Cash | (20,912 | ) | ||
Cash at Beginning of Year | 1,273,778 | |||
Cash at End of Year | $ | 1,252,866 |
7
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 1 – Business
University of Antelope Valley, Inc. is referred to as the “Institution” throughout this report.
University of Antelope Valley, Inc. (UAV, Inc.) located in Lancaster, California was formed in 1997. The Institution is a private post-secondary school located in Lancaster, California. UAV, Inc. provides degrees in business, communications, criminal justice, education, electrical engineering, nursing, sports management, career training in culinary arts, dental assistant, emergency care technician, fire science, medical assistant, paramedic, pharmacy technician, vocational nursing, and several other programs. The Institution is accredited by WASC Senior College and University Commission (WSCUC) and approved by the California Bureau for Private Postsecondary Education (BPPE). The Institution is certified by the U.S. Department of Education as eligible to participate in the federal financial aid programs under Title IV of the Higher Education Act of 1965, as amended.
University of Antelope Valley, LLC (UAV, LLC), a California limited liability company, is under the same ownership as UAV, Inc. UAV, LLC is engaged in the business of exclusively holding and renting land and buildings to UAV, Inc. as its primary business location.
The Institution elected the accounting alternative not to apply VIE guidance to a legal entity under common control leasing arrangement.
Note 2 – Significant Accounting Policies
Accounting Change – In prior years the Institution had consolidated the financial statements of UAV, LLC, a leasing company under common control with the Institution, because management believed that the Institution was the primary beneficiary of that variable interest entity.
The Institution has elected to apply the alternative accounting and disclosures for certain variable interest entities provided to private companies pursuant to generally accepted accounting principles. Accordingly, the Institution has deconsolidated UAV, LLC beginning January 1, 2019. (See also Note 7.)
Significant Accounting Policies – The significant accounting policies are presented to assist in the understanding of the Institution’s financial statements. The financial statements and notes are representations of the Institution's management, who is responsible for their integrity and objectivity. These accounting principles conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Pronouncement – The Institution has not elected to early implement Accounting Standards Update (ASU) 2016-2, Leases Topic 842. The Institution is evaluating the requirements to recognize lease asset(s) and liability(ies) on the balance sheet under the standard and the effects of the two implementation methods on financial results. Implementation of the standard requires additional disclosures and is required to be implemented for fiscal years beginning after December 15, 2021. The options for implementation are 2 transition methods which include a retrospective method based on the initiation of new leases or a cumulative entry to equity when adopted.
8
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 2 – Significant Accounting Policies (continued)
Management Estimates – The preparation of financial statements 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 and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basis of Accounting – The financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Cash and Cash Equivalents – The statement of cash flows is prepared using the indirect method. The Institution considers all cash on hand and in banks, and all highly liquid investments with an initial maturity of three months or less to be cash equivalents.
Student Receivables and the Allowance for Doubtful Student Accounts – Student receivables consist of tuition advances against each student’s financial aid received through the Department of Education. Balances are expected to be collected within 6 months of the balance sheet date. If the student withdraws before the full advance has been earned the excess tuition is returned to the Department of Education and the Institution pursues the student for the remainder. The Institution maintains an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments. The Institution determines the adequacy of this allowance by regularly reviewing the receivables and applying expected loss percentages to certain student accounts receivable categories based upon historical bad debt experience. The Institution generally writes-off receivable balances deemed uncollectible as they are sent to collection agencies. The allowance for doubtful accounts as of December 31, 2019 was $1,713,857.
Inventory – The Institution maintains inventory consisting principally of books, kits and educational supplies. The inventory stated at the lower of cost or market. Cost is determined using the first-in, first-out method.
Property and Equipment – Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 5 to 39 years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Maintenance, repairs, minor renewals and betterments, which do not extend the useful life of property are charged to expense as incurred. Major renewals and betterments are capitalized. For assets sold or otherwise disposed of, the cost and the related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. Depreciation was $131,166 for the year ended December 31, 2019.
Deferred Revenue – Deferred revenue consists of the portion of tuition charged but not earned and is reflected as a current liability in the accompanying balance sheet as such amount is expected to be earned within the next year.
Intangible Assets – An intangible asset, which consists a liquor license, is being accounted for in accordance with Financial Accounting Standards Board Statement 142. The costs of intangible assets with identifiable useful lives are amortized over the longer of their economic or legal life.
9
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 2 – Significant Accounting Policies (continued)
Intangible Assets (continued) – “Goodwill and Other Intangible Assets”, requires management, at least annually, to test this asset for impairment. Impaired assets, under this statement, are required to be written down to their fair value. The amortization expense was $2,918 for the year ended December 31, 2019.
Revenue Recognition Related to Student Contracts – We have analyzed the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, and have concluded that no changes to accounting or policy are necessary to conform with the new standard. Revenues consist primarily of tuition and fees derived from courses offered by the Institution. Each student enters into a contract with the Institution for an instructional program at a fixed price for a fixed amount of course hours. Revenue from tuition and fees are recognized pro-rata (on a straight-line basis) over the relevant period attended by the student of the applicable course or program.
Sources of Revenue – Revenue is derived from student tuition, retail sales, auxiliary income and other fees in Lancaster, California.
Timing of Contract Revenue Recognition – Products transferred at a point in time consist of consumer retail. Revenue from retail during the year ended December 31, 2019 was $788,188. Retail products and services are sold directly to consumers and are recognized and collected generally concurrently as sales occur and/or services are completed.
Services transferred over time consist of instructional services for which tuition totaling $10,216,021 for the year ended December 31, 2019 was charged. Revenues are recognized based on the hour thresholds designated specific to each educational program.
Revenue Contract Balances – The timing of revenue recognition and cash collections results in tuition receivables and deferred income on the balance sheet. Amounts are billed to students or submitted for payment of Title IV funds as each respective student progresses through the credit hours required for program completion noted in the contract with each respective student. The beginning and ending balances of tuition receivables based on contracts were $5,168,670 and $5,144,901, for the year ended December 31, 2019 respectively.
Refunds – Refunds of retail services and/or goods are handled in accordance with Institution policy and are not included in net retail amounts after the date of the return. Refunds of tuition require the Institution to determine the date the respective student withdrew and the amount of earned and unearned tuition based on the amount of actual credit hours or scheduled credit hours the respective former student was in attendance. Refunds are determined on a case-by-case basis in accordance with Institution and federal policies.
Contract Performance Obligations – The Institution is obligated to perform under student contracts until it has been determined that the student has completed the contacted program(s) or withdrawn. Payments are requested/due as each student accumulates actual or scheduled program credit hours. The Institution’s goal in relation to students is to graduate each student from program(s) which meet or exceed industry, state and federal requirements. There are no guarantees related to the program(s) other than the previously mentioned refunds.
10
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 2 – Significant Accounting Policies (continued)
Contract Performance Obligations (continued) – Beginning and ending balances on unearned revenue which is recognized based on actual or scheduled credit hours completed were $2,409,797 and $2,144,861, respectively. Unearned revenue is expected to be earned within one year from the balance sheet date.
Significant Judgements Related to Revenue Timing – The Institution recognizes tuition revenue and deferred revenue based on the actual or scheduled credit hours completed. The Institution believes that this output method is the best and most accurate measure of progress and most representative of services performed, as the hours portion of the calculation is consistent across the Institution’s students. Additionally, this method appropriately depicts the Institution’s performance as all institutions and students receiving Title IV assistance are held to the same measure of progress prior to student graduation. Fees for student tuition range from $2,612 to $82,078 based on each respective contract. The Institution recognizes retail revenue as sales/services are completed and when control/delivery takes place at the time of payment upon completion of the sale. There is no deferred revenue related to retail operations. All amounts involved in revenue recognition are short-term and have not been adjusted to reflect the time-value of money. There are no significant contract prices or non-cash consideration which are considered variable or otherwise in need of adjustment. The Institution recognizes all refunds and returns within industry standard expectations.
Advertising – Advertising costs are charged to expense when incurred. Advertising costs for the year ended December 31, 2019 were $405,779. Advertising costs consist of various online and print ads.
Income Taxes – UAV, Inc. has elected to be treated as an S Corporation for the purposes of reporting income taxes. Accordingly, no provision for federal income tax has been recorded in the accompanying financial statements since the UAV, Inc.’s stockholders are required to report the results of the UAV, Inc.’s operations on their personal income tax returns but UAV, Inc. is subject to a California franchise tax of 1.5% of taxable income or minimum of $800 for the year ended December 31, 2019.
The Institution believes that is has support for any tax position taken, and as such, do not have any uncertain tax positions that are material to the financial statements.
With few exceptions, the Institution is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2016.
Note 3 – Concentrations
Financial instruments that potentially subject the Institution to credit risk include tuition notes and accounts receivable from its students, a substantial number of whom rely on Title IV financial assistance from the U.S. Department of Education (ED) to fund their education. Collection of Title IV funds is reasonably assured, provided the students and the Institution comply with various student financial assistance requirements. The Institution does not require collateral from its students; however, the deferral of tuition income over the enrollment period limits credit risk to the tuition earned. Although changes in Title IV funding could significantly impact the Institution’s ability to attract students, recent trends indicate that funding levels will not be reduced.
11
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 3 – Concentrations (continued)
The majority of the Institution’s students are within the Lancaster, California area. The Institution is subject to the economic conditions of that area.
Financial instruments that potentially subject the Institution to concentrations of credit risk consist principally of cash accounts in various financial institutions. The balances are insured by the Federal Deposit Insurance Corporation to $250,000. As of December 31, 2019 cash balances in excess of insured limits approximately $1,110,000.
Note 4 – Transactions with Related Party
The Institution has two month-to-month leases, between the UAV, Inc. and UAV, LLC, for the facilities referred to as the Sierra Campus and the Pioneer Event Center. Total lease expenses of $799,685 was recorded. See note 7 for detail.
Note 5 – Intangible Assets
The liquor license of $29,181 is amortized on a straight-line basis over ten years and is presented net of accumulated amortization of $26,263. Amortization expense was $2,918 for the year ended December 31, 2019. Future amortization expense is as follows:
For the years ended December 31, | |||||
2020 | $ | 2,918 | |||
2021 | 2,918 | ||||
2022 | 2,918 | ||||
2023 | 2,918 | ||||
2024 | 2,918 | ||||
Thereafter | 11,673 | ||||
$ | 26,263 |
Note 6 – Contingencies
The Institution was involved in a lawsuit in which confidential party was awarded approximately $126,523. The amount of the settlement was approved by both parties on May 19, 2019. Payment of the sentiment was tendered in February of 2020.
Note 7 – Commitments and Contingencies
The Institution has two month-to-month leases, between the UAV, Inc. and UAV, LLC, for the facilities referred to as the Sierra Campus and the Pioneer Event Center. The two leases have monthly rents of $51,100 and $15,150, respectively.
For information regarding this lease and the Lessor, the Institution has elected to apply the alternative accounting and disclosures for certain variable interest entities provided to private companies pursuant to generally accepted accounting principles.
12
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 7 – Commitments and Contingencies (continued)
UAV, LLC leases five acres of land that comprise a portion of the Sierra Campus. The lease was assigned to UAV, Inc. on June 26, 2009, when the Sierra Campus was acquired. Lease payments are included in rent expense. The land lease requires UAV, Inc. to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. The land lease originated on January 28, 1964 and expires on January 31, 2034, with future rent increases scheduled on January 31 of 2021, 2026, and 2031. Rent increases are based on the change in the Consumer Price Index between the base date of February 1, 1964, and the date of the scheduled rent increase. The monthly land lease payment was $5,328 during the year ended December 31, 2019.
Occupancy rent expense was $842,865 for the year ended December 31, 2019.
The Institution has an operating lease, secured by office equipment, which commenced in March 2013 and renewed in April 2018. The current lease will expire in June 2021, at which time the Institution intends to upgrade the office equipment. Equipment lease expense was $57,194 for the year ended December 31, 2019.
The Institution entered into a three-year lease on January 31, 2019. The lease will commence on or about August 22, 2019 for the rental use of fifteen passenger vehicles for nine months of each year, until 2021. The annual lease rate is $27,000 with no rate increase during the term of the lease.
Management is evaluating the potential effects of FASB ASU 2016-2 Leases (Topic 842) and has not elected to early implement as discussed per note 2, Pronouncement.
Minimum future lease payments under these operating leases are as follows:
For the years ended December 31, | |||||
2020 | $ | 133,920 | |||
2021 | 112,428 | ||||
2022 | 63,936 | ||||
2023 | 63,936 | ||||
2024 | 63,936 | ||||
Thereafter | 580,752 | ||||
$ | 1,018,908 |
Note 8 – Retirement Plan
The Institution maintains a Cash or Deferred Profit-Sharing Plan (401(k) Plan) for the benefit of all their eligible employees. Eligibility is based on the completion of 1,000 hours and one year of service. Employer contributions are discretionary and are determined and authorized by the Institution each plan year. For the year ended December 31, 2019, there were no matching contributions.
13
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2019
Note 9 – Supplemental Disclosures of Cash Information and Income Tax Provisions Cash paid for interest for the year ended December 31, 2019 was $4,891.
Cash paid for state income taxes during the year ended December 31, 2019 was $942.
Note 10 – Subsequent Events
The Institution has evaluated all events or transactions that occurred after December 31, 2019 through December 14, 2020, the date these financial statements were available for issue.
In early 2020, the Institution was directly impacted by the by the coronavirus outbreak (COVID-19). On January 31, 2020, U.S. Health and Human Services Secretary declared a public health emergency for the United States. In response to COVID-19, the Institution temporarily halted significant portions of their operations. The Institution does not know what the overall effect on its operations will be.
In March 2020, the Institution received approval for total of $1,613,796 grants through the Higher Education Emergency Relief Fund (HEERF) under the Coronavirus Aid, Relief and Economic Security Act (Cares Act).
In May 2020, the Institution received approval for a $1,136,120 note payable through the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (Cares Act). A portion of this note may be forgiven under the terms of the Cares Act depending on the use of the funds. Amounts determined unforgivable will be charged interest at a rate of 1.00%.
In September 2020, the Institution made distributions of $48,333 to the stockholders of the Institution. In October 2020, the Institution made distributions of $69,750 to the stockholders of the Institution. In November 2020, the Institution made distributions of $94,750 to the stockholders of the Institution.
For the period from December 31, 2019 through December 14, 2020 there were no other material recognizable subsequent events.
14
Exhibit 99.5
University of Antelope Valley, Inc.
Financial Statements
Year Ended December 31, 2020
University of Antelope Valley, Inc.
Table of Contents
INDEPENDENT AUDITORS' REPORT | 1 | |||
FINANCIAL STATEMENTS | 3 | |||
BALANCE SHEET | 3 | |||
INCOME STATEMENT | 5 | |||
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | 6 | |||
STATEMENT OF CASH FLOWS | 7 | |||
NOTES TO FINANCIAL STATEMENTS | 8 |
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
University of Antelope Valley, Inc.
We have audited the accompanying financial statements of University of Antelope Valley, Inc. (a California Corporation), which comprise the balance sheet as of December 31, 2020, and the related statements of income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the fmancial statements.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these fmancial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fmancial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Institution's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institution's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
140 Fountains Blvd., Suite D, Madison MS 39110 ♦ 601-898-2727 ♦ www.lsacpafirm.com
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the fmancial position of University of Antelope Valley, Inc., as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Lightheart, Sanders and Associates
Certified Public Accountants
Madison, Mississippi
May 6, 2021
University of
Antelope Valley, Inc.
Balance Sheet
December 31, 2020
Assets | ||||
Current Assets | ||||
Cash and cash equivalents | $ | 1,679,105 | ||
Accounts receivable, net of allowance for doubtful accounts | 5,351,359 | |||
Inventory | 62,789 | |||
Prepaid expenses | 40,481 | |||
Total Current Assets | 7,133,734 | |||
Depreciable Assets | ||||
Leasehold improvements | 1,144,818 | |||
Vehicles | 371,091 | |||
Equipment | 1,171,285 | |||
Furniture and fixtures | 647,126 | |||
Other depreciable assets | 211,295 | |||
Signs | 59,366 | |||
Total Depreciable Assets | 3,604,981 | |||
Accumulated depreciation | (2,434,417 | ) | ||
Net Depreciable Assets | 1,170,564 | |||
Construction In Progress | 48,350 | |||
Other Assets | ||||
Intangible assets, net of amortization | 23,345 | |||
Total Other Assets | 23,345 | |||
Total Assets | $ | 8,375,993 |
3
University
of Antelope Valley, Inc.
Balance Sheet
December 31, 2020
Liabilities and Stockholders' Equity | ||||
Current Liabilities | ||||
Accounts payable | $ | 252,514 | ||
Accrued liabilities | 325,156 | |||
Income tax payable | 34,039 | |||
Due to students | 400,996 | |||
Deferred income | 2,009,181 | |||
Current portion of long-term debt | 530,476 | |||
Total Current Liabilities | 3,552,362 | |||
Long-Term Liabilities, Net of Current Portion | ||||
Long-term debt | 752,808 | |||
Total Long-Term Liabilities | 752,808 | |||
Total Liabilities | 4,305,170 | |||
Stockholders' Equity | ||||
Common stock (25,000 shares authorized, issued and outstanding, $1 par value) | 25,000 | |||
Additional paid in capital | 685,000 | |||
Retained earnings (deficit) | 3,360,823 | |||
Total Stockholders' Equity | 4,070,823 | |||
Total Liabilities and Stockholders' Equity | $ | 8,375,993 |
4
University of Antelope Valley, Inc.
Income Statement
For the Year Ended December 31, 2020
Revenue | ||||
Tuition revenue | $ | 8,936,915 | ||
Retail sales | 624,606 | |||
Auxiliary income | 386,027 | |||
Other fees | 130,610 | |||
Total Net Revenue | 10,078,158 | |||
Cost of Goods | ||||
Instructional | 2,581,956 | |||
Books and supplies | 299,318 | |||
Total Cost of Goods | 2,881,274 | |||
Operating Expenses | ||||
Marketing | 175,141 | |||
Depreciation and amortization | 299,979 | |||
General and administrative | 4,215,345 | |||
Occupancy and maintenance | 1,473,697 | |||
Total Operating Expenses | 6,164,162 | |||
Other Income (Expense) | ||||
Interest expense | (13,523 | ) | ||
Other income | 806,898 | |||
Other expense | 5,967 | |||
Total Other Income (Expense) | 799,342 | |||
Net Income (Loss) Before Income Taxes | 1,832,064 | |||
Income Tax Provision | ||||
Income tax expense | (27,481 | ) | ||
Total Income Tax Provisions | (27,481 | ) | ||
Net Income (loss) | $ | 1,804,583 |
5
University of Antelope Valley, Inc.
Statement of Changes in Stockholders' Equity
For the Year Ended December 31, 2020
Common
Stock |
Additional
Paid-In- Capital |
Retained
Earnings (deficit) |
Total | |||||||||||||
Balance on December 31, 2019 | $ | 25,000 | $ | 685,000 | $ | 1,780,825 | $ | 2,490,825 | ||||||||
Net income (loss) | 1,804,583 | 1,804,583 | ||||||||||||||
Dividends to stockholders | (224,585 | ) | (224,585 | ) | ||||||||||||
Balance on December 31, 2020 | $ | 25,000 | $ | 685,000 | $ | 3,360,823 | $ | 4,070,823 |
6
University of Antelope Valley, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2020
Cash Flows from Operating Activities | ||||
Net income (loss) | $ | 1,804,583 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 299,979 | |||
(Increase) decrease in: | ||||
Accounts receivable | (1,861,112 | ) | ||
Other receivables | 4,140 | |||
Inventory | 134,891 | |||
Prepaid expenses | (17,301 | ) | ||
(Decrease) increase in: | ||||
Accounts payable | (334,551 | ) | ||
Accrued liabilities | (37,414 | ) | ||
Income tax payable | 27,481 | |||
Due to students | (193,065 | ) | ||
Deferred income | (135,680 | ) | ||
Net Cash Provided By (Used In) Operating Activities | (308,049 | ) | ||
Cash Flows from Investing Activities | ||||
Acquisition of fixed assets | (324,411 | ) | ||
Net Cash Provided By (Used In) Investing Activities | (324,411 | ) | ||
Cash Flows from Financing Activities | ||||
Proceeds from debt | 1,300,799 | |||
Payments on debt | (17,515 | ) | ||
Dividends to stockholders | (224,585 | ) | ||
Net Cash Provided By (Used In) Financing Activities | 1,058,699 | |||
Net Increase In Cash | 426,239 | |||
Cash at Beginning of Year | 1,252,866 | |||
Cash at End of Year | $ | 1,679,105 |
7
University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 1 – Business
University of Antelope Valley, Inc. is referred to as the "Institution" throughout this report.
University of Antelope Valley, Inc. (UAV, Inc.) located in Lancaster, California was formed in 1997. The Institution is a private post-secondary school located in Lancaster, California. UAV, Inc. provides degrees in business, communications, criminal justice, education, electrical engineering, nursing, sports management, career training in culinary arts, dental assistant, emergency care technician, fire science, medical assistant, paramedic, pharmacy technician, vocational nursing, and several other programs. The Institution is accredited by WASC Senior College and University Commission (WSCUC) and approved by the California Bureau for Private Postsecondary Education (BPPE). The Institution is certified by the U.S. Department of Education as eligible to participate in the federal financial aid programs under Title IV of the Higher Education Act of 1965, as amended.
University of Antelope Valley, LLC (UAV, LLC), a California limited liability company, is under the same ownership as UAV, Inc. UAV, LLC is engaged in the business of exclusively holding and renting land and buildings to UAV, Inc. as its primary business location.
The Institution elected the accounting alternative not to apply VIE guidance to a legal entity under common control leasing arrangement.
Note 2 – Significant Accounting Policies
Accounting Change – In prior years the Institution had consolidated the financial statements of UAV, LLC, a leasing company under common control with the Institution, because management believed that the Institution was the primary beneficiary of that variable interest entity.
The Institution has elected to apply the alternative accounting and disclosures for certain variable interest entities provided to private companies pursuant to generally accepted accounting principles. Accordingly, the Institution has deconsolidated UAV, LLC beginning January 1, 2018. (See also Note 8.)
Significant Accounting Policies – The significant accounting policies are presented to assist in the understanding of the Institution's financial statements. The financial statements and notes are representations of the Institution's management, who is responsible for their integrity and objectivity. These accounting principles conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Pronouncement – The Institution has not elected to early implement Accounting Standards Update (ASU) 2016-2, Leases Topic 842. The Institution is evaluating the requirements to recognize lease asset(s) and liability(ies) on the balance sheet under the standard and the effects of the two implementation methods on financial results. Implementation of the standard requires additional disclosures and is required to be implemented for fiscal years beginning after December 15, 2021. The options for implementation are 2 transition methods which include a retrospective method based on the initiation of new leases or a cumulative entry to equity when adopted.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 2 – Significant Accounting Policies (continued)
Management Estimates – The preparation of financial statements 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 and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basis of Accounting – The financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Cash and Cash Equivalents – The statement of cash flows is prepared using the indirect method. The Institution considers all cash on hand and in banks, and all highly liquid investments with an initial maturity of three months or less to be cash equivalents.
Student Receivables and the Allowance for Doubtful Student Accounts – Student receivables consist of tuition advances against each student's financial aid received through the Department of Education. Balances are expected to be collected within 6 months of the balance sheet date. If the student withdraws before the full advance has been earned the excess tuition is returned to the Department of Education and the Institution pursues the student for the remainder. The Institution maintains an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments. The Institution determines the adequacy of this allowance by regularly reviewing the receivables and applying expected loss percentages to certain student accounts receivable categories based upon historical bad debt experience. The Institution generally writes-off receivable balances deemed uncollectible as they are sent to collection agencies. The allowance for doubtful accounts as of December 31, 2020 was $1,945,144.
Inventory – The Institution maintains inventory consisting principally of books, kits and educational supplies. The inventory stated at the lower of cost or market. Cost is determined using the first-in, first-out method.
Property and Equipment – Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 5 to 39 years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Maintenance, repairs, minor renewals and betterments, which do not extend the useful life of property are charged to expense as incurred. Major renewals and betterments are capitalized. For assets sold or otherwise disposed of, the cost and the related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. Depreciation was $297,061 for the year ended December 31, 2020.
Deferred Revenue – Deferred revenue consists of the portion of tuition charged but not earned and is reflected as a current liability in the accompanying balance sheet as such amount is expected to be earned within the next year.
Intangible Assets – An intangible asset, which consists a liquor license, is being accounted for in accordance with Financial Accounting Standards Board Statement 142.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 2 – Significant Accounting Policies (continued)
Intangible Assets (continued) – The costs of intangible assets with identifiable useful lives are amortized over the longer of their economic or legal life. "Goodwill and Other Intangible Assets", requires management, at least annually, to test this asset for impairment. Impaired assets, under this statement, are required to be written down to their fair value. The amortization expense was $2,918 for the year ended December 31, 2020.
Revenue Recognition Related to Student Contracts – We have analyzed the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, and have concluded that no changes to accounting or policy are necessary to conform with the new standard. Revenues consist primarily of tuition and fees derived from courses offered by the Institution. Each student enters into a contract with the Institution for an instructional program at a fixed price for a fixed amount of course hours. Revenue from tuition and fees are recognized pro-rata (on a straight-line basis) over the relevant period attended by the student of the applicable course or program.
Sources of Revenue – Revenue is derived from student tuition, retail sales, auxiliary income and other fees in Lancaster, California.
Timing of Contract Revenue Recognition – Products transferred at a point in time consist of consumer retail. Revenue from retail during the year ended December 31, 2020 was $788,188. Retail products and services are sold directly to consumers and are recognized and collected generally concurrently as sales occur and/or services are completed.
Services transferred over time consist of instructional services for which tuition totaling $10,216,021 for the year ended December 31, 2020 was charged. Revenues are recognized based on the hour thresholds designated specific to each educational program.
Revenue Contract Balances – The timing of revenue recognition and cash collections results in tuition receivables and deferred income on the balance sheet. Amounts are billed to students or submitted for payment of Title IV funds as each respective student progresses through the credit hours required for program completion noted in the contract with each respective student. The beginning and ending balances of tuition receivables based on contracts were $5,144,901 and $7,283,910, for the year ended December 31, 2020 respectively.
Refunds – Refunds of retail services and/or goods are handled in accordance with Institution policy and are not included in net retail amounts after the date of the return. Refunds of tuition require the Institution to determine the date the respective student withdrew and the amount of earned and unearned tuition based on the amount of actual credit hours or scheduled credit hours the respective former student was in attendance. Refunds are determined on a case-by-case basis in accordance with Institution and federal policies.
Contract Performance Obligations – The Institution is obligated to perform under student contracts until it has been determined that the student has completed the contacted program(s) or withdrawn. Payments are requested/due as each student accumulates actual or scheduled program credit hours. The Institution's goal in relation to students is to graduate each student from program(s) which meet or exceed industry, state and federal requirements. There are no guarantees related to the program(s) other than the previously mentioned refunds.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 2 – Significant Accounting Policies (continued)
Contract Performance Obligations (continued) – Beginning and ending balances on unearned revenue which is recognized based on actual or scheduled credit hours completed were $2,144,861 and $1,972,030, respectively. Unearned revenue is expected to be earned within one year from the balance sheet date.
Significant Judgements Related to Revenue Timing – The Institution recognizes tuition revenue and deferred revenue based on the actual or scheduled credit hours completed. The Institution believes that this output method is the best and most accurate measure of progress and most representative of services performed, as the hours portion of the calculation is consistent across the Institution's students. Additionally, this method appropriately depicts the Institution's performance as all institutions and students receiving Title IV assistance are held to the same measure of progress prior to student graduation. Fees for student tuition range from $2,612 to $82,078 based on each respective contract. The Institution recognizes retail revenue as sales/services are completed and when control/delivery takes place at the time of payment upon completion of the sale. There is no deferred revenue related to retail operations. All amounts involved in revenue recognition are short-term and have not been adjusted to reflect the time-value of money. There are no significant contract prices or non-cash consideration which are considered variable or otherwise in need of adjustment. The Institution recognizes all refunds and returns within industry standard expectations.
Advertising – Advertising costs are charged to expense when incurred. Advertising costs for the year ended December 31, 2020 were $175,141. Advertising costs consist of various online and print ads.
Income Taxes – UAV, Inc. has elected to be treated as an S Corporation for the purposes of reporting income taxes. Accordingly, no provision for federal income tax has been recorded in the accompanying financial statements since the UAV, Inc.'s stockholders are required to report the results of the UAV, Inc.'s operations on their personal income tax returns but UAV, Inc. is subject to a California franchise tax of 1.5% of taxable income or minimum of $800 for the year ended December 31, 2020.
The Institution believes that is has support for any tax position taken, and as such, do not have any uncertain tax positions that are material to the financial statements.
With few exceptions, the Institution is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2017.
Note 3 – Concentrations
Financial instruments that potentially subject the Institution to credit risk include tuition notes and accounts receivable from its students, a substantial number of whom rely on Title IV financial assistance from the U.S. Department of Education (ED) to fund their education. Collection of Title IV funds is reasonably assured, provided the students and the Institution comply with various student financial assistance requirements. The Institution does not require collateral from its students; however, the deferral of tuition income over the enrollment period limits credit risk to the tuition earned. Although changes in Title IV funding could significantly impact the Institution's ability to attract students, recent trends indicate that funding levels will not be reduced.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 3 – Concentrations (continued)
The majority of the Institution's students are within the Lancaster, California area. The Institution is subject to the economic conditions of that area.
Financial instruments that potentially subject the Institution to concentrations of credit risk consist principally of cash accounts in various financial institutions. The balances are insured by the Federal Deposit Insurance Corporation to $250,000. As of December 31, 2020 cash balances in excess of insured limits approximately $1,400,000.
Note 4 – Transactions with Related Party
The Institution has two month-to-month leases, between the UAV, Inc. and UAV, LLC, for the facilities referred to as the Sierra Campus and the Pioneer Event Center. Total lease expenses of $793,800 was recorded. See note 7 for detail.
Note 5 – Intangible Assets
The liquor license of $29,181 is amortized on a straight-line basis over ten years and is presented net of accumulated amortization of $5,836. Amortization expense was $2,918 for the year ended December 31, 2020. Future amortization expense is as follows:
For the years ended December 31, | ||||
2021 | $ | 2,918 | ||
2022 | 2,918 | |||
2023 | 2,918 | |||
2024 | 2,918 | |||
2025 | 2,918 | |||
Thereafter | 8,755 | |||
$ | 23,345 |
Note 6 – Debt
Long-term debts consisted of the following as of December 31, 2020:
Note payable to the Small Business Administration (PPP Loan), payable in
monthly installments of $63,619 including interest at 1%, principal payments and interest is deferred for six months, final payment due April 2022 |
$ | 1,136,120 | ||
Note payable to a bank, payable in monthly installments of $1,259 plus interest
at 3.99%, final payment due February 2026, secured by a vehicle with a net book value of $78,615 |
73,534 | |||
Note payable to a bank, payable in monthly installments of $1,291 plus interest
at 3.24%, final payment due February 2026, secured by a vehicle with a net book value of $81,821 |
73,630 |
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 6 – Debt (continued)
Long-term debts consisted of the following as of December 31, 2020:
Total | $ | 1,283,284 | ||
Less current portion | (530,476 | ) | ||
Long-term debt | $ | 752,808 |
Maturities of long-term debt are as follows:
Years Ending December 31, | Amount | |||
2021 | $ | 530,476 | ||
2022 | 659,696 | |||
2023 | 28,377 | |||
2024 | 29,317 | |||
2025 | 30,289 | |||
Thereafter | 5,129.00 | |||
$ | 1,283,284 |
PPP Loan – In May 2020, the Institution received $1,136,120 through the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (Cares Act). This loan is forgivable from the SBA if the Institution meets certain payroll requirements. Amounts determined unforgivable will be charged interest at a rate of 1.00%. The Institution is in the application process towards loan forgiveness.
Note 7 – Other Income
For the year ended December 31, 2020, the Institution incurred a few different sources of other income, which are listed as below.
HEERF Grant | $ | 806,898 | |||
Total Other Income | $ | 806,898 |
Higher Education Emergency Relief Fund – The Institution was awarded Higher Education Emergency Relief Funds (HEERF) under Section 18004(a)(1) of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), for both the Institution and eligible students. In April 2020, the Institution received $1,613,796 for the Institution portion and student portion in total. The amount allocated to the students was $806,898, and the amount allocated to the Institution was $806,898. The student portion of $806,898 had been disbursed to eligible students as of December 31, 2020. The Institution incurred $806,898 related to Covid-19 expenses for the year ended December 31, 2020, which was included as other income on the accompanying income statement.
Note 8 – Commitments and Contingencies
The Institution has two month-to-month leases, between the UAV, Inc. and UAV, LLC, for the facilities referred to as the Sierra Campus and the Pioneer Event Center. The two leases have monthly rents of $51,100 and $15,150, respectively.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 8 – Commitments and Contingencies (continued)
For information regarding the leases and the Lessor, the Institution has elected to apply the alternative accounting and disclosures for certain variable interest entities provided to private companies pursuant to generally accepted accounting principles.
UAV, LLC leases five acres of land that comprise a portion of the Sierra Campus. The lease was assigned to UAV, Inc. on June 26, 2009, when the Sierra Campus was acquired. Lease payments are included in rent expense. The land lease requires UAV, Inc. to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. The land lease originated on January 28, 1964 and expires on January 31, 2034, with future rent increases scheduled on January 31 of 2021, 2026, and 2031. Rent increases are based on the change in the Consumer Price Index between the base date of February 1, 1964, and the date of the scheduled rent increase. The monthly land lease payment was $5,328 during the year ended December 31, 2020.
Occupancy rent expense was $804,680 for the year ended December 31, 2020.
The Institution has an operating lease, secured by office equipment, which commenced in March 2013 and renewed in April 2018. The current lease will expire in June 2021, at which time the Institution intends to upgrade the office equipment. Equipment lease expense was $57,194 for the year ended December 31, 2020.
The Institution entered into a three-year lease on January 31, 2019. The lease will commence on or about August 22, 2019 for the rental use of fifteen passenger vehicles for nine months of each year, until 2021. The annual lease rate is $27,000 with no rate increase during the term of the lease.
Management is evaluating the potential effects of FASB ASU 2016-2 Leases (Topic 842) and has not elected to early implement as discussed per note 2, Pronouncement.
Minimum future lease payments under these operating leases are as follows:
For the years ended December 31, | ||||
2021 | $ | 112,428 | ||
2022 | 63,936 | |||
2023 | 63,936 | |||
2024 | 63,936 | |||
2025 | 63,936 | |||
Thereafter | 516,816 | |||
$ | 884,988 |
Note 9 – Retirement Plan
The Institution maintains a Cash or Deferred Profit-Sharing Plan (401(k) Plan) for the benefit of all their eligible employees. Eligibility is based on the completion of 1,000 hours and one year of service. Employer contributions are discretionary and are determined and authorized by the Institution each plan year. For the year ended December 31, 2020, there were no matching contributions.
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University of Antelope Valley, Inc.
Notes to Financial Statements
Year Ended December 31, 2020
Note 10 – Supplemental Disclosures of Cash Information and Income Tax Provisions
Cash paid for interest for the year ended December 31, 2020 was $4,891.
Cash paid for state income taxes during the year ended December 31, 2020 was $0.
Note 11 – Subsequent Events
The Institution has evaluated all events or transactions that occurred after December 31, 2019 through May 6, 2021, the date these financial statements were available for issue.
The Institution made distributions to the stockholders of the Institution:
January 2021 | $ | 5,000 | ||||
February 2021 | $ | 10,970 | ||||
March 2021 | $ | 9,995 | ||||
April 2021 | $ | 5,000 |
For the period from December 31, 2020 through May 6, 2021 there were no other material recognizable subsequent events.
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