|
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
☒
|
|
|
PRELIMINARY PROSPECTUS
|
| |
SUBJECT TO COMPLETION
|
| |
DATED FEBRUARY 25, 2022
|
|
| | |
Per Share
|
| |
Total
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds to us, before expenses
|
| | | $ | | | | | $ | | | |
| | |
Page
|
| |||
| | | | 1 | | | |
| | | | 4 | | | |
| | | | 27 | | | |
| | | | 29 | | | |
| | | | 33 | | | |
| | | | 61 | | | |
| | | | 63 | | | |
| | | | 64 | | | |
CAPITALIZATION | | | | | 65 | | |
DILUTION | | | | | 67 | | |
| | | | 69 | | | |
| | | | 84 | | | |
| | | | 86 | | | |
| | | | 92 | | | |
BUSINESS | | | | | 131 | | |
MANAGEMENT | | | | | 205 | | |
| | | | 211 | | | |
| | | | 212 | | | |
| | | | 216 | | | |
| | | | 239 | | | |
| | | | 241 | | | |
UNDERWRITING | | | | | 249 | | |
| | | | 257 | | | |
| | | | 258 | | | |
EXPERTS | | | | | 258 | | |
| | | | 258 | | | |
| | | | 260 | | | |
| | | | F-1 | | |
Summary Income Data:
|
| |
Genius Group
Pro forma Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
Reviewed Financials Six Months Ended (USD 000’s) |
| |
Genius Group
Pro forma Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended (USD 000’s) |
| ||||||||||||||||||||||||
|
June 30,
2021 |
| |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||||||||||
Sales
|
| | | | 13,918 | | | | | | 6,352 | | | | | | 4,538 | | | | | | 24,206 | | | | | | 7,634 | | | | | | 9,949 | | |
Cost of goods sold
|
| | | | (7,759) | | | | | | (4,710) | | | | | | (2,294) | | | | | | (8,722) | | | | | | (4,134) | | | | | | (5,024) | | |
Gross profit (Loss)
|
| | | | 6,159 | | | | | | 1,642 | | | | | | 2,244 | | | | | | 15,484 | | | | | | 3,500 | | | | | | 4,925 | | |
Other Operating Income
|
| | | | 82 | | | | | | 67 | | | | | | 85 | | | | | | 284 | | | | | | 11 | | | | | | 1,187 | | |
Operating Expenses
|
| | | | (7,925) | | | | | | (3,203) | | | | | | (3,096) | | | | | | (16,062) | | | | | | (6,192) | | | | | | (7,151) | | |
Operating profit (Loss)
|
| | | | (1,684) | | | | | | (1,494) | | | | | | (767) | | | | | | (294) | | | | | | (2,681) | | | | | | (1,039) | | |
Other income
|
| | | | 1,973 | | | | | | — | | | | | | — | | | | | | 1,218 | | | | | | 412 | | | | | | 784 | | |
Other Expense
|
| | | | (202) | | | | | | (183) | | | | | | (643) | | | | | | (1,014) | | | | | | (854) | | | | | | (864) | | |
Net Income (Loss) Before Tax
|
| | | | 87 | | | | | | (1,677) | | | | | | (1,410) | | | | | | (90) | | | | | | (3,123) | | | | | | (1,119) | | |
Tax Expense
|
| | | | (192) | | | | | | 47 | | | | | | 129 | | | | | | (197) | | | | | | (69) | | | | | | (111) | | |
Net Income (Loss) After Tax
|
| | | | (105) | | | | | | (1,630) | | | | | | (1,281) | | | | | | (287) | | | | | | (3,192) | | | | | | (1,230) | | |
Other Comprehensive Income
|
| | | | 71 | | | | | | 71 | | | | | | (525) | | | | | | 2,129 | | | | | | 2,129 | | | | | | (308) | | |
Total Income (Loss)
|
| | | | (34) | | | | | | (1,559) | | | | | | (1,806) | | | | | | 1,842 | | | | | | (1,063) | | | | | | (1,538) | | |
Net income per share, basic and diluted
|
| | | | 0.00 | | | | | | (0.10) | | | | | | (0.13) | | | | | | (0.02) | | | | | | (0.25) | | | | | | (0.14) | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 18,247,056 | | | | | | 16,155,180 | | | | | | 9,798,478 | | | | | | 14,666,851 | | | | | | 12,575,605 | | | | | | 8,492,924 | | |
| | |
Genius Group
Pro forma Six Months Ended, (USD 000’s) |
| |
Pre-IPO
Group Reviewed Financials Six Months Ended, (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended, (USD 000’s) |
| |||||||||||||||
| | |
June 30, 2021
|
| |
June 30, 2021
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||||||||
Summary Balance Sheet Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Total current assets
|
| | | | 30,122 | | | | | | 6,312 | | | | | | 4,937 | | | | | | 5,806 | | |
Total non-current assets
|
| | | | 50,426 | | | | | | 11,852 | | | | | | 12,021 | | | | | | 11,754 | | |
Total Assets
|
| | | | 80,548 | | | | | | 18,164 | | | | | | 16,958 | | | | | | 17,560 | | |
Total current liabilities
|
| | | | 12,252 | | | | | | 5,803 | | | | | | 5,379 | | | | | | 6,202 | | |
Total non-current liabilities
|
| | | | 11,467 | | | | | | 3,336 | | | | | | 3,873 | | | | | | 6,027 | | |
Total Liabilities
|
| | | | 23,719 | | | | | | 9,139 | | | | | | 9,252 | | | | | | 12,229 | | |
Total Shareholders’ Equity
|
| | | | 56,829 | | | | | | 9,025 | | | | | | 7,706 | | | | | | 5,331 | | |
Total Liabilities and
Shareholders’ Equity |
| | | | 80,548 | | | | | | 18,164 | | | | | | 16,958 | | | | | | 17,560 | | |
| | |
Genius Group
Pro forma Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
Reviewed Financials Six Months Ended (USD 000’s) |
| |
Genius Group
Pro forma Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended (USD 000’s) |
| ||||||||||||||||||||||||
|
June 30,
2021 |
| |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||||||||||
Net Income (Loss)
|
| | | | (105) | | | | | | (1,630) | | | | | | (1,281) | | | | | | (287) | | | | | | (3,192) | | | | | | (1,230) | | |
Tax Expense
|
| | | | 192 | | | | | | (47) | | | | | | (129) | | | | | | 197 | | | | | | 69 | | | | | | 111 | | |
Interest Expense, net
|
| | | | 203 | | | | | | 183 | | | | | | 643 | | | | | | 1,013 | | | | | | 854 | | | | | | 864 | | |
Depreciation and Amortization
|
| | | | 1,112 | | | | | | 793 | | | | | | 979 | | | | | | 2,323 | | | | | | 1,571 | | | | | | 1,262 | | |
Goodwill Impairments
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stock Based
Compensation |
| | | | 121 | | | | | | 121 | | | | | | 159 | | | | | | 399 | | | | | | 399 | | | | | | 172 | | |
Bad Debt Provision
|
| | | | (39) | | | | | | (39) | | | | | | — | | | | | | 924 | | | | | | 162 | | | | | | — | | |
Adjusted EBITDA
|
| | | | 1,484 | | | | | | (619) | | | | | | 371 | | | | | | 4,569 | | | | | | (137) | | | | | | 1,179 | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Number of students
|
| | | | 1,903,726 | | | | | | 3,102 | | | | | | 146,614 | | | | | | 732 | | | | | | 677 | | | | | | 2,054,851 | | |
Number of Free Students
|
| | | | 1,868,171 | | | | | | — | | | | | | 120,246 | | | | | | — | | | | | | — | | | | | | 1,988,417 | | |
Number of Paying Students
|
| | | | 35,555 | | | | | | 3,102 | | | | | | 26,368 | | | | | | 732 | | | | | | 677 | | | | | | 66,434 | | |
Number of Partners
|
| | | | 9,866 | | | | | | 238 | | | | | | 628 | | | | | | 312 | | | | | | 43 | | | | | | 11,087 | | |
Number of countries of
operation |
| | | | 191 | | | | | | 1 | | | | | | 52 | | | | | | 1 | | | | | | 1 | | | | | | 191 | | |
Marketing Spend
|
| | | | 395,114 | | | | | | 110,036 | | | | | | 225,749 | | | | | | 6,074 | | | | | | 31,434 | | | | | | 768,407 | | |
Education Revenue
|
| | | | 5,074,942 | | | | | | 3,488,724 | | | | | | 3,184,343 | | | | | | 478,205 | | | | | | 415,267 | | | | | | 12,641,481 | | |
Revenue from New Paying
Students |
| | | | 1,268,373 | | | | | | 1,672,362 | | | | | | 1,563,898 | | | | | | 239,102 | | | | | | 207,634 | | | | | | 4,951,369 | | |
New Students
|
| | | | 103,206 | | | | | | 281 | | | | | | 15,503 | | | | | | 102 | | | | | | 131 | | | | | | 119,223 | | |
New Paying Students
|
| | | | 1,635 | | | | | | 281 | | | | | | 1,948 | | | | | | 102 | | | | | | 131 | | | | | | 4,097 | | |
Conversion rate
|
| | | | 1.58% | | | | | | N/A | | | | | | 12.57% | | | | | | N/A | | | | | | N/A | | | | | | 3.44% | | |
Average Acquisition Cost per New Paying Student
|
| | | | 181.24 | | | | | | 391.59 | | | | | | 115.89 | | | | | | 59.55 | | | | | | 239.95 | | | | | | 163.44 | | |
Average Annual Revenue per New Paying Student
|
| | | | 775.76 | | | | | | 5,951.47 | | | | | | 802.82 | | | | | | 2,344.14 | | | | | | 1,584.99 | | | | | | 1,208.54 | | |
Net Income (Loss) margin
|
| | | | (7.54%) | | | | | | 12.21% | | | | | | 37.75% | | | | | | (4.39%) | | | | | | 21.91% | | | | | | 10.41% | | |
Adjusted EBITDA margin
|
| | | | (3.20%) | | | | | | 15.10% | | | | | | 47.02% | | | | | | (2.75%) | | | | | | 21.91% | | | | | | 15.34% | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Number of students
|
| | | | 1,800,520 | | | | | | 2,821 | | | | | | 131,111 | | | | | | 630 | | | | | | 546 | | | | | | 1,935,628 | | |
Number of Free Students
|
| | | | 1,766,600 | | | | | | — | | | | | | 106,691 | | | | | | — | | | | | | — | | | | | | 1,873,291 | | |
Number of Paying Students
|
| | | | 33,920 | | | | | | 2,821 | | | | | | 24,420 | | | | | | 630 | | | | | | 546 | | | | | | 62,337 | | |
Number of Partners
|
| | | | 9,399 | | | | | | 214 | | | | | | 570 | | | | | | 270 | | | | | | 43 | | | | | | 10,496 | | |
Number of countries of
operation |
| | | | 191 | | | | | | 1 | | | | | | 52 | | | | | | 1 | | | | | | 1 | | | | | | 191 | | |
Marketing Spend
|
| | | | 576,028 | | | | | | 175,141 | | | | | | 287,694 | | | | | | 34,708 | | | | | | 78,586 | | | | | | 1,152,157 | | |
Education Revenue
|
| | | | 5,618,210 | | | | | | 10,078,158 | | | | | | 4,598,750 | | | | | | 1,068,204 | | | | | | 827,675 | | | | | | 22,190,997 | | |
Revenue from New Paying Students
|
| | | | 1,809,457 | | | | | | 2,418,758 | | | | | | 1,603,998 | | | | | | 534,102 | | | | | | 287,890 | | | | | | 6,654,205 | | |
New Students
|
| | | | 247,388 | | | | | | 559 | | | | | | 27,353 | | | | | | 210 | | | | | | 270 | | | | | | 275,780 | | |
New Paying Students
|
| | | | 3,450 | | | | | | 559 | | | | | | 3,277 | | | | | | 210 | | | | | | 270 | | | | | | 7,766 | | |
Conversion rate
|
| | | | 1.39% | | | | | | N/A | | | | | | 11.98% | | | | | | N/A | | | | | | N/A | | | | | | 2.81% | | |
Average Acquisition Cost per New Paying Student
|
| | | | 121.91 | | | | | | 313.31 | | | | | | 148.82 | | | | | | 165.28 | | | | | | 291.06 | | | | | | 154.10 | | |
Average Annual Revenue per New Paying Student
|
| | | | 524.48 | | | | | | 4327 | | | | | | 489.47 | | | | | | 2,543 | | | | | | 1066 | | | | | | 857 | | |
Net Income (Loss) margin
|
| | | | 1.90% | | | | | | 17.91% | | | | | | 22.89% | | | | | | 19.17% | | | | | | 23.16% | | | | | | 15.14% | | |
Adjusted EBITDA margin
|
| | | | 24.38% | | | | | | 21.29% | | | | | | 45.17% | | | | | | 23.36% | | | | | | 28.35% | | | | | | 27.38% | | |
| | |
Cafe
|
| |
Central
|
| |
Resort
|
| |
Total
|
| ||||||||||||
Revenue
|
| | | | 94,451 | | | | | | 648,492 | | | | | | 533,846 | | | | | | 1,276,789 | | |
No of Location
|
| | | | 2 | | | | | | 1 | | | | | | 3 | | | | | | 6 | | |
No of Seats / Room
|
| | | | 141 | | | | | | 177 | | | | | | 49 | | | | | | 367 | | |
Utilization
|
| | | | 13% | | | | | | 39% | | | | | | 14% | | | | | | 22% | | |
Total Orders
|
| | | | 11,211 | | | | | | 40,556 | | | | | | 2,196 | | | | | | 53,963 | | |
Revenue Per Order
|
| | | $ | 8.42 | | | | | $ | 15.99 | | | | | $ | 243.10 | | | | | $ | 23.66 | | |
| | |
Cafe
|
| |
Central
|
| |
Resort
|
| |
Total
|
| ||||||||||||
Revenue
|
| | | | 342,238 | | | | | | 500,629 | | | | | | 1,172,699 | | | | | | 2,015,566 | | |
No of Location
|
| | | | 2 | | | | | | 1 | | | | | | 3 | | | | | | 6 | | |
No of Seats / Room
|
| | | | 141 | | | | | | 177 | | | | | | 49 | | | | | | 367 | | |
Utilization
|
| | | | 20% | | | | | | 24% | | | | | | 26% | | | | | | 24% | | |
Total Orders
|
| | | | 37,185 | | | | | | 36,182 | | | | | | 8,538 | | | | | | 81,905 | | |
Revenue Per Order
|
| | | $ | 9.20 | | | | | $ | 13.84 | | | | | $ | 137.35 | | | | | $ | 24.61 | | |
| | |
Genius Group
Pro forma Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
Reviewed Financials Six Months Ended (USD 000’s) |
| |
Genius Group
Pro forma Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended (USD 000’s) |
| ||||||||||||||||||||||||
|
June 30,
2021 |
| |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||||||||||
Digital Education Revenue
|
| | | | 12,163 | | | | | | 5,075 | | | | | | 3,068 | | | | | | 20,803 | | | | | | 5,298 | | | | | | 4,771 | | |
In-Person Education
Revenue |
| | | | 478 | | | | | | — | | | | | | 330 | | | | | | 1,388 | | | | | | 320 | | | | | | 746 | | |
Total Education Revenue
|
| | | | 12,641 | | | | | | 5,070 | | | | | | 3,398 | | | | | | 22,191 | | | | | | 5,618 | | | | | | 5,517 | | |
Campus Revenue
|
| | | | 1,277 | | | | | | 1,277 | | | | | | 1,138 | | | | | | 2,016 | | | | | | 2,016 | | | | | | 4,432 | | |
Total Revenue
|
| | | | 13,918 | | | | | | 6,352 | | | | | | 4,538 | | | | | | 24,207 | | | | | | 7,634 | | | | | | 9,949 | | |
| | |
June 30, 2021 (USD)
|
| |||||||||||||||
| | |
Actual
|
| |
Pro forma
|
| |
Pro forma
As Adjusted |
| |||||||||
Cash and cash equivalents
|
| | | | 2,143,358 | | | | | | 2,880,704 | | | | | | 11,032,598 | | |
Capitalization: | | | | | | | | | | | | | | | | | | | |
Long-term debt:
|
| | | | 1,452,547 | | | | | | 2,527,666 | | | | | | 2,527,666 | | |
Shareholders’ equity:
|
| | | | 51,734,435 | | | | | | 51,734,435 | | | | | | 99,538,054 | | |
16,155,810 ordinary shares issued and outstanding on an actual
basis, 18,247,056 ordinary shares issued and outstanding on a pro forma basis to reflect the IPO Acquisitions; 25,519,783 shares issued and outstanding on a pro forma as adjusted basis to reflect the IPO Acquisitions and 7,272,727 ordinary shares to be issued in this offering |
| | | | | | | | | | | | | | | | | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | | | |
Reserve
|
| | | | (31,946,451) | | | | | | (31,946,451) | | | | | | (31,946,451) | | |
Accumulated deficit
|
| | | | (10,763,118) | | | | | | (10,763,118) | | | | | | (10,763,118) | | |
Total shareholders’ equity
|
| | | | 9,024,866 | | | | | | 9,024,866 | | | | | | 56,828,479 | | |
Total capitalization
|
| | | | 10,477,413 | | | | | | 11,552,532 | | | | | | 59,356,146 | | |
| | | | | | | | | | | | | | | | | | | |
| | |
Per
Ordinary Share |
| |||
| | |
($)
|
| |||
Assumed initial public offering price per ordinary share
|
| | | $ | 5.50 | | |
Historic net tangible book value per ordinary share as of June 30, 2021
|
| | | $ | 0.32 | | |
Pro forma increase in net tangible book value (deficit) per share as of June 30, 2021 before giving effect to this offering
|
| | | $ | 0.86 | | |
Pro forma net tangible book value per share as of June 30, 2021
|
| | | $ | 1.18 | | |
Pro forma as adjusted net tangible book value per share after giving effect to this offering
|
| | | $ | 0.84 | | |
Pro forma as adjusted dilution per share to investors participating in this offering
|
| | | $ | 0.34 | | |
| | | | | | | |
| | |
Ordinary Shares
Purchased |
| |
Total Consideration
|
| |
Average
Price Per Ordinary Share |
| |||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||
Existing share-holders (Issued)
|
| | | | 16,155,810 | | | | | | 63.31% | | | | | | 46,421,800 | | | | | | 47.09% | | | | | $ | 2.87 | | |
Existing share-holders (IPO Acqusitions)
|
| | | | 2,091,246 | | | | | | 8.19% | | | | | | 12,153,614 | | | | | | 12.33% | | | | | $ | 5.81 | | |
New investors
|
| | | | 7,272,727 | | | | | | 28.50% | | | | | | 40,000,000 | | | | | | 40.58% | | | | | $ | 5.50 | | |
Total | | | | | 25,519,783 | | | | | | 100.00% | | | | | | 98,575,414 | | | | | | 100.00% | | | | | $ | 3.86 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Adjustments
|
| |
Footnotes
|
| |
Combined
Total |
| ||||||||||||||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 6,352 | | | | | | 3,489 | | | | | | 3,184 | | | | | | 478 | | | | | | 415 | | | | | | — | | | | | | | | | | | | 13,918 | | |
Cost of goods sold
|
| | | | (4,710) | | | | | | (1,712) | | | | | | (1,110) | | | | | | (227) | | | | | | — | | | | | | — | | | | | | | | | | | | (7,759) | | |
Gross profit (Loss)
|
| | | | 1,642 | | | | | | 1,777 | | | | | | 2,074 | | | | | | 251 | | | | | | 415 | | | | | | — | | | | | | | | | | | | 6,159 | | |
Operating Income
|
| | | | 67 | | | | | | — | | | | | | 15 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 82 | | |
Operating Expenses
|
| | | | (3,203) | | | | | | (3,318) | | | | | | (591) | | | | | | (271) | | | | | | (324) | | | | | | (218) | | | | | | 2 | | | | | | (7,925) | | |
Operating profit (Loss)
|
| | | | (1,494) | | | | | | (1,541) | | | | | | 1,498 | | | | | | (20) | | | | | | 91 | | | | | | (218) | | | | | | | | | | | | (1,684) | | |
Other income
|
| | | | — | | | | | | 1,973 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,973 | | |
Other Expense
|
| | | | (183) | | | | | | (5) | | | | | | (13) | | | | | | (1) | | | | | | — | | | | | | — | | | | | | | | | | | | (202) | | |
Net Income (Loss) Before Tax
|
| | | | (1,677) | | | | | | 427 | | | | | | 1,485 | | | | | | (21) | | | | | | 91 | | | | | | (218) | | | | | | | | | | | | 87 | | |
Income Tax
|
| | | | 47 | | | | | | (1) | | | | | | (282) | | | | | | — | | | | | | — | | | | | | 44 | | | | | | 3 | | | | | | (192) | | |
Net Income (Loss) After Tax
|
| | | | (1,630) | | | | | | 426 | | | | | | 1,203 | | | | | | (21) | | | | | | 91 | | | | | | (174) | | | | | | | | | | | | (105) | | |
Other Comprehensive Income
|
| | | | 71 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 71 | | |
Total Income (Loss)
|
| | | | (1,559) | | | | | | 426 | | | | | | 1,203 | | | | | | (21) | | | | | | 91 | | | | | | (174) | | | | | | | | | | | | (34) | | |
Net income per share, basic and diluted
|
| | | | (0.10) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9 | | | | | | 0.00 | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 16,155,810 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9 | | | | | | 18,247,056 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
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 | | | | | | 4,598 | | | | | | 1,068 | | | | | | 828 | | | | | | — | | | | | | | | | | | | 24,206 | | |
Cost of goods sold
|
| | | | (4,134) | | | | | | (2,880) | | | | | | (1,246) | | | | | | (462) | | | | | | — | | | | | | — | | | | | | | | | | | | (8,722) | | |
Gross profit (Loss)
|
| | | | 3,500 | | | | | | 7,198 | | | | | | 3,352 | | | | | | 606 | | | | | | 828 | | | | | | — | | | | | | | | | | | | 15,484 | | |
Operating Income
|
| | | | 12 | | | | | | 6 | | | | | | 26 | | | | | | 240 | | | | | | — | | | | | | — | | | | | | | | | | | | 284 | | |
Operating Expenses
|
| | | | (6,192) | | | | | | (6,164) | | | | | | (2,062) | | | | | | (615) | | | | | | (593) | | | | | | (436) | | | | | | 2 | | | | | | (16,062) | | |
Operating profit (Loss)
|
| | | | (2,680) | | | | | | 1,040 | | | | | | 1,316 | | | | | | 231 | | | | | | 235 | | | | | | (436) | | | | | | | | | | | | (294) | | |
Other income
|
| | | | 412 | | | | | | 806 | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,218 | | |
Other Expense
|
| | | | (854) | | | | | | (14) | | | | | | (119) | | | | | | (27) | | | | | | — | | | | | | — | | | | | | | | | | | | (1,014) | | |
Net Income (Loss) Before Tax
|
| | | | (3,122) | | | | | | 1,832 | | | | | | 1,197 | | | | | | 204 | | | | | | 235 | | | | | | (436) | | | | | | | | | | | | (90) | | |
Income Tax
|
| | | | (70) | | | | | | (27) | | | | | | (145) | | | | | | — | | | | | | (43) | | | | | | 88 | | | | | | 3 | | | | | | (197) | | |
Net Income (Loss) After Tax
|
| | | | (3,192) | | | | | | 1,805 | | | | | | 1,052 | | | | | | 204 | | | | | | 192 | | | | | | (348) | | | | | | | | | | | | (287) | | |
Other Comprehensive Income
|
| | | | 2,129 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 2,129 | | |
Total Income (Loss)
|
| | | | (1,063) | | | | | | 1,805 | | | | | | 1,052 | | | | | | 204 | | | | | | 192 | | | | | | (348) | | | | | | | | | | | | 1,842 | | |
Net income per share, basic and diluted
|
| | | | (0.25) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9 | | | | | | (0.02) | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 12,575,605 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9 | | | | | | 14,666,851 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
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
|
| | | | 2,143 | | | | | | 567 | | | | | | 164 | | | | | | 4 | | | | | | 4 | | | | | | 11,033 | | | | | | 4 | | | | | | 13,915 | | |
Accounts receivable, net of allowance
|
| | | | 1,006 | | | | | | 5,119 | | | | | | 699 | | | | | | (1) | | | | | | 321 | | | | | | — | | | | | | | | | | | | 7,144 | | |
Other receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Inventory
|
| | | | 98 | | | | | | 63 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 161 | | |
Prepaid expenses and other assets
|
| | | | 3,012 | | | | | | 36 | | | | | | 37 | | | | | | 94 | | | | | | — | | | | | | — | | | | | | | | | | | | 3,179 | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Loans receivable – related parties
|
| | | | 53 | | | | | | — | | | | | | 5,670 | | | | | | — | | | | | | — | | | | | | — | | | | | | 10 | | | | | | 5,723 | | |
Total Current Assets
|
| | | | 6,312 | | | | | | 5,785 | | | | | | 6,570 | | | | | | 97 | | | | | | 325 | | | | | | 11,033 | | | | | | | | | | | | 30,122 | | |
Non-Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 7,504 | | | | | | 1,149 | | | | | | 27 | | | | | | 30 | | | | | | 5 | | | | | | — | | | | | | | | | | | | 8,715 | | |
Intangible assets, net
|
| | | | 1,185 | | | | | | 22 | | | | | | — | | | | | | 555 | | | | | | 207 | | | | | | 7,565 | | | | | | 5 | | | | | | 9,534 | | |
Operating lease right-of-use asset
|
| | | | 1,417 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,101 | | | | | | 6 | | | | | | 7,518 | | |
Investments at fair value
|
| | | | 29 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 29 | | |
Goodwill
|
| | | | 1,210 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 23,307 | | | | | | 5 | | | | | | 24,517 | | |
Other non-current assets
|
| | | | 507 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (500) | | | | | | 4 | | | | | | 7 | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 106 | | | | | | — | | | | | | | | | | | | 106 | | |
Total Non-Current Assets
|
| | | | 11,852 | | | | | | 1,171 | | | | | | 27 | | | | | | 585 | | | | | | 318 | | | | | | 36,473 | | | | | | | | | | | | 50,426 | | |
Total Assets
|
| | | | 18,164 | | | | | | 6,956 | | | | | | 6,597 | | | | | | 682 | | | | | | 643 | | | | | | 47,506 | | | | | | | | | | | | 80,548 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 1,199 | | | | | | 470 | | | | | | 90 | | | | | | 24 | | | | | | 461 | | | | | | — | | | | | | | | | | | | 2,244 | | |
Accrued expenses and other current liabilities
|
| | | | 1,892 | | | | | | 767 | | | | | | 1,600 | | | | | | 95 | | | | | | — | | | | | | — | | | | | | | | | | | | 4,354 | | |
Deferred revenue
|
| | | | 1,694 | | | | | | 1,718 | | | | | | — | | | | | | (1) | | | | | | — | | | | | | — | | | | | | | | | | | | 3,411 | | |
Operating lease liabilities
|
| | | | 564 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 583 | | | | | | 6 | | | | | | 1,147 | | |
Loans payable
|
| | | | 70 | | | | | | 27 | | | | | | 115 | | | | | | 73 | | | | | | — | | | | | | — | | | | | | | | | | | | 285 | | |
Loans payable – related parties
|
| | | | 384 | | | | | | — | | | | | | 1 | | | | | | 7 | | | | | | — | | | | | | — | | | | | | 10 | | | | | | 392 | | |
Income tax payable
|
| | | | — | | | | | | 1 | | | | | | 418 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 419 | | |
Total current liabilities
|
| | | | 5,803 | | | | | | 2,983 | | | | | | 2,224 | | | | | | 198 | | | | | | 461 | | | | | | 583 | | | | | | | | | | | | 12,252 | | |
Non-Current Liabilities
|
| | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating lease liabilities
|
| | | | 1,056 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,518 | | | | | | 6 | | | | | | 6,574 | | |
Loans payable
|
| | | | 116 | | | | | | 109 | | | | | | 343 | | | | | | 624 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,192 | | |
Loans payable – related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Adjustments
|
| |
Footnotes
|
| |
Combined
Total |
| ||||||||||||||||||||||||
Convertible Debt Obligation
|
| | | | 1,336 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,336 | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | — | | | | | | 8 | | | | | | — | | | | | | — | | | | | | | | | | | | 8 | | |
Deferred Tax Liability
|
| | | | 828 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,529 | | | | | | 7 | | | | | | 2,357 | | |
Total Non-Current liabilities
|
| | | | 3,336 | | | | | | 109 | | | | | | 343 | | | | | | 632 | | | | | | — | | | | | | 7,047 | | | | | | | | | | | | 11,467 | | |
Total liabilities
|
| | | | 9,139 | | | | | | 3,092 | | | | | | 2,567 | | | | | | 830 | | | | | | 461 | | | | | | 7,630 | | | | | | | | | | | | 23,719 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 50,751 | | | | | | 710 | | | | | | — | | | | | | — | | | | | | — | | | | | | 47,094 | | | | | | 8 | | | | | | 98,555 | | |
Minority Interest
|
| | | | 2,884 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 2,884 | | |
Subscriptions receivable
|
| | | | (1,901) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | (1,901) | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8 | | | | | | — | | |
Retained earnings
|
| | | | (10,763) | | | | | | 3,154 | | | | | | 4,030 | | | | | | (148) | | | | | | 182 | | | | | | (7,218) | | | | | | 8 | | | | | | (10,763) | | |
Reserves
|
| | | | (31,946) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | (31,946) | | |
Total Stockholders’ Equity
|
| | |
|
9,025
|
| | | |
|
3,864
|
| | | |
|
4,030
|
| | | |
|
(148)
|
| | | |
|
182
|
| | | |
|
39,876
|
| | | | | — | | | | |
|
56,829
|
| |
Total Liabilities and Stockholders’ Equity
|
| | | | 18,164 | | | | | | 6,956 | | | | | | 6,597 | | | | | | 682 | | | | | | 643 | | | | | | 47,506 | | | | |
|
—
|
| | | | | 80,548 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
University of Antelope
Valley |
| |
Property Investors
Network |
| |
Education Angels
|
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Developed Content
|
| | | | 2,500,000 | | | | | | 97,244 | | | | | | 702,489 | | | | | | 151,645 | | | | | | 3,451,378 | | |
Customer relationships
|
| | | | 500,000 | | | | | | 13,836 | | | | | | 99,948 | | | | | | 21,576 | | | | | | 635,360 | | |
Amortization
|
| | | | (160,714) | | | | | | (5,850) | | | | | | (42,264) | | | | | | (9,123) | | | | | | (217,951) | | |
| | |
University of Antelope
Valley |
| |
Property Investors
Network |
| |
Education Angels
|
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Developed Content
|
| | | | 2,500,000 | | | | | | 97,244 | | | | | | 702,489 | | | | | | 151,645 | | | | | | 3,451,378 | | |
Customer relationships
|
| | | | 500,000 | | | | | | 13,836 | | | | | | 99,948 | | | | | | 21,576 | | | | | | 635,360 | | |
Amortization
|
| | | | (321,429) | | | | | | (11,701) | | | | | | (84,527) | | | | | | (18,247) | | | | | | (435,904) | | |
| | |
University of
Antelope Valley |
| |
Property Investors
Network |
| |
Education Angels
|
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Income Tax Rate
|
| | | | 21% | | | | | | 25% | | | | | | 15% | | | | | | 28% | | | | | | | | |
Income Tax Provision
|
| | | | 33,750 | | | | | | 1,463 | | | | | | 6,340 | | | | | | 2,555 | | | | | | 44,108 | | |
| | |
University of
Antelope Valley |
| |
Property Investors
Network |
| |
Education Angels
|
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Income Tax Rate
|
| | | | 21% | | | | | | 25% | | | | | | 15% | | | | | | 28% | | | | | | | | |
Income Tax Provision
|
| | | | 67,500 | | | | | | 2,925 | | | | | | 12,679 | | | | | | 5,109 | | | | | | 88,213 | | |
|
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
Issued |
| | | | 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
|
| | | | 2,801,781 | | | | | | 4,346,127 | | | | | | (100,686) | | | | | | (136,347) | | | | | | 6,910,875 | | |
Property and equipment, net
|
| | | | 1,149,849 | | | | | | 26,526 | | | | | | 29,262 | | | | | | 4,824 | | | | | | 1,210,461 | | |
Intangible Assets
|
| | | | 21,886 | | | | | | — | | | | | | 554,682 | | | | | | 206,682 | | | | | | 783,250 | | |
Operating Lease Asset
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Goodwill
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Non-Current Assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | 106,806 | | | | | | 106,806 | | |
| | |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Loan Payable
|
| | | | (109,165) | | | | | | (342,902) | | | | | | (623,052) | | | | | | — | | | | | | (1,075,119) | | |
Convertible Debt Obligation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Lease Liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Non-Current Liabilities
|
| | | | — | | | | | | — | | | | | | (8,310) | | | | | | — | | | | | | (8,310) | | |
| | | | | 3,864,351 | | | | | | 4,029,751 | | | | | | (148,104) | | | | | | 181,965 | | | | | | 7,927,963 | | |
Developed Content (10 Years)
|
| | | | 2,500,000 | | | | | | 97,244 | | | | | | 702,489 | | | | | | 151,645 | | | | | | 3,451,378 | | |
Trade names and trademarks
|
| | | | 2,500,000 | | | | | | 100,011 | | | | | | 722,479 | | | | | | 155,961 | | | | | | 3,478,451 | | |
Customer relationships (7 Years)
|
| | | | 500,000 | | | | | | 13,836 | | | | | | 99,948 | | | | | | 21,576 | | | | | | 635,360 | | |
Intangible Assets (Net)
|
| | | | 5,500,000 | | | | | | 211,091 | | | | | | 1,524,916 | | | | | | 329,182 | | | | | | 7,565,189 | | |
Goodwill
|
| | | | 20,635,649 | | | | | | 263,174 | | | | | | 723,188 | | | | | | 155,853 | | | | | | 21,777,864 | | |
Adjustment to Goodwill (As per
Note 7) |
| | | | 1,155,000 | | | | | | 52,773 | | | | | | 228,737 | | | | | | 92,171 | | | | | | 1,528,681 | | |
Total Goodwill
|
| | | | 21,790,649 | | | | | | 315,947 | | | | | | 951,925 | | | | | | 248,024 | | | | | | 23,306,545 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Leases
|
| |
ROU Assets
|
| |
ROU Liabilities
|
| ||||||
Total | | | | | 6,100,680 | | | | | | 6,100,680 | | |
ROU Liabilities | | | | | | | | | | | | | |
Current | | | | | | | | | | | 583,281 | | |
Non-current | | | | | | | | | | | 5,517,399 | | |
Total | | | | | | | | | |
|
6,100,680
|
| |
| | |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| |||||||||||||||
Tax Rate
|
| | | | 21% | | | | | | 25% | | | | | | 15% | | | | | | 28% | | | | | | | | |
Purchase Accounting Adjustment
|
| | | | 1,155,000 | | | | | | 52,773 | | | | | | 228,737 | | | | | | 92,171 | | | | | | 1,528,681 | | |
Total Deferred Tax Liability
|
| | | | 1,155,000 | | | | | | 52,773 | | | | | | 228,737 | | | | | | 92,171 | | | | | | 1,528,681 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University
of Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Entrepreneur
Resorts |
| |
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) | | | | | | — | | | | | | (710,030) | | |
Total Adjustment Share Capital
|
| | | | 47,803,614 | | | | | | (710,000) | | | | | | (9) | | | | | | — | | | | | | (21) | | | | | | — | | | | | | 47,093,584 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius
Group |
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Entrepreneur
Resorts Ltd |
| |
TOTAL
|
| |||||||||||||||||||||
Retained Earnings (Elimination)
|
| | | | — | | | | | | (3,154,351) | | | | | | (4,029,741) | | | | | | 148,104 | | | | | | (181,944) | | | | | | — | | | | | | (7,217,932) | | |
Total Adjustment Retained Earning
|
| | | | — | | | | | | (3,154,351) | | | | | | (4,029,741) | | | | | | 148,104 | | | | | | (181,944) | | | | | | — | | | | | | (7,217,932) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Genius Group
Pro forma Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
Reviewed Financials Six Months Ended (USD 000’s) |
| |
Genius Group
Pro forma Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended (USD 000’s) |
| ||||||||||||||||||||||||
|
June 30, 2021
|
| |
June 30, 2021
|
| |
June 30, 2020
|
| |
December 31, 2020
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||||
Total Income (Loss) After Tax
|
| | | | (105) | | | | | | (1,630) | | | | | | (1,281) | | | | | | (287) | | | | | | (3,192) | | | | | | (1,230) | | |
Number of shares outstanding, basic and diluted
|
| | | | 18,247,056 | | | | | | 16,155,810 | | | | | | 9,831,684 | | | | | | 18,247,056 | | | | | | 16,155,810 | | | | | | 9,742,998 | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 18,247,056 | | | | | | 16,155,810 | | | | | | 9,798,478 | | | | | | 14,666,851 | | | | | | 12,575,605 | | | | | | 8,492,924 | | |
Net income (Loss) per share, basic and diluted
|
| | | | (0.01) | | | | | | (0.10) | | | | | | (0.13) | | | | | | (0.02) | | | | | | (0.25) | | | | | | (0.14) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Mastermind
Principles (GBP 000’s) |
| |
Property
Investors Network (GBP 000’s) |
| |
Elimination
(GBP 000’s) |
| |
Total
(GBP 000’s) |
| |
Total
(USD 000’s) |
| |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 94 | | | | | | 24 | | | | | | — | | | | | | 118 | | | | | | 164 | | |
Accounts receivable, net of allowance
|
| | | | 425 | | | | | | 79 | | | | | | — | | | | | | 504 | | | | | | 699 | | |
Other receivable
|
| | | | 1,554 | | | | | | — | | | | | | — | | | | | | 1,554 | | | | | | 2,157 | | |
Inventory
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Prepaid expenses and other assets
|
| | | | 27 | | | | | | — | | | | | | — | | | | | | 27 | | | | | | 37 | | |
| | |
Mastermind
Principles (GBP 000’s) |
| |
Property
Investors Network (GBP 000’s) |
| |
Elimination
(GBP 000’s) |
| |
Total
(GBP 000’s) |
| |
Total
(USD 000’s) |
| |||||||||||||||
Loans receivable – current portion
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties – current portion
|
| | | | 2,482 | | | | | | 748 | | | | | | (699) | | | | | | 2,531 | | | | | | 3,513 | | |
Total Current Assets
|
| | | | 4,582 | | | | | | 851 | | | | | | -699 | | | | | | 4,734 | | | | | | 6,570 | | |
Property and equipment, net
|
| | | | 18 | | | | | | 1 | | | | | | — | | | | | | 19 | | | | | | 27 | | |
Intangible assets, net
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Operating lease right-of-use asset
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Investments at fair value
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Goodwill
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other non-current assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties – non-current
portion |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Assets
|
| | | | 4,600 | | | | | | 852 | | | | | | -699 | | | | | | 4,753 | | | | | | 6,597 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 60 | | | | | | 5 | | | | | | — | | | | | | 65 | | | | | | 90 | | |
Accrued expenses and other current liabilities
|
| | | | 1,020 | | | | | | 133 | | | | | | — | | | | | | 1,153 | | | | | | 1,600 | | |
Deferred revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities – current portion
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loans payable – current portion
|
| | | | 82 | | | | | | — | | | | | | — | | | | | | 82 | | | | | | 115 | | |
Loans payable – related parties – current portion
|
| | | | 699 | | | | | | 1 | | | | | | (699) | | | | | | 1 | | | | | | 1 | | |
Income tax payable
|
| | | | 301 | | | | | | — | | | | | | — | | | | | | 301 | | | | | | 418 | | |
Total current liabilities
|
| | | | 2,162 | | | | | | 139 | | | | | | -699 | | | | | | 1,602 | | | | | | 2,224 | | |
Operating lease liabilities – non
current portion |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans payable – non current portion
|
| | | | 198 | | | | | | 49 | | | | | | — | | | | | | 247 | | | | | | 343 | | |
Loans payable – related parties – noncurrent
portion |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Convertible debt obligations
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Deferred Tax Liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total liabilities
|
| | | | 2,360 | | | | | | 188 | | | | | | -699 | | | | | | 1,849 | | | | | | 2,567 | | |
| | |
Mastermind
Principles (GBP 000’s) |
| |
Property
Investors Network (GBP 000’s) |
| |
Elimination
(GBP 000’s) |
| |
Total
(GBP 000’s) |
| |
Total
(USD 000’s) |
| |||||||||||||||
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 0 | | | | | | 0 | | | | | | — | | | | | | 0 | | | | | | 0 | | |
Minority Interest
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Subscriptions receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accumulated other comprehensive income
(loss) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Retained earnings
|
| | | | 2,240 | | | | | | 664 | | | | | | — | | | | | | 2,904 | | | | | | 4,030 | | |
Reserves
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Total Stockholders’ Equity
|
| | | | 2,240 | | | | | | 664 | | | | | | 0 | | | | | | 2,904 | | | | | | 4,030 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 4,600 | | | | | | 852 | | | | | | -699 | | | | | | 4,753 | | | | | | 6,597 | | |
|
| | |
Mastermind
Principles (GBP 000’s) |
| |
Property
Investors Network (GBP 000’s) |
| |
Elimination
(GBP 000’s) |
| |
Total
(GBP 000’s) |
| |
Total
(USD 000’s) |
| |||||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 1,530 | | | | | | 764 | | | | | | — | | | | | | 2,294 | | | | | | 3,184 | | |
Cost of goods sold
|
| | | | (460) | | | | | | (340) | | | | | | — | | | | | | (800) | | | | | | (1,110) | | |
Gross profit (Loss)
|
| | | | 1,070 | | | | | | 424 | | | | | | — | | | | | | 1,494 | | | | | | 2,074 | | |
Other Operating Income
|
| | | | 11 | | | | | | — | | | | | | — | | | | | | 11 | | | | | | 15 | | |
Operating Expenses
|
| | | | (377) | | | | | | (49) | | | | | | — | | | | | | (426) | | | | | | (591) | | |
Operating profit (Loss)
|
| | | | 704 | | | | | | 375 | | | | | | — | | | | | | 1,079 | | | | | | 1,498 | | |
Other income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Expense
|
| | | | (7) | | | | | | (2) | | | | | | — | | | | | | (9) | | | | | | (13) | | |
Net Income (Loss) Before Tax
|
| | | | 697 | | | | | | 373 | | | | | | — | | | | | | 1,070 | | | | | | 1,485 | | |
Tax Expense
|
| | | | (132) | | | | | | (71) | | | | | | — | | | | | | (203) | | | | | | (282) | | |
Net Income (Loss) After Tax
|
| | | | 565 | | | | | | 302 | | | | | | — | | | | | | 867 | | | | | | 1,203 | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 565 | | | | | | 302 | | | | | | — | | | | | | 867 | | | | | | 1,203 | | |
| | |
Mastermind
Principles (GBP 000’s) |
| |
Property
Investors Network (GBP 000’s) |
| |
Elimination
(GBP 000’s) |
| |
Total
(GBP 000’s) |
| |
Total
(USD 000’s) |
| |||||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 2,790 | | | | | | 575 | | | | | | — | | | | | | 3,365 | | | | | | 4,598 | | |
Cost of goods sold
|
| | | | (805) | | | | | | (107) | | | | | | — | | | | | | (912) | | | | | | (1,246) | | |
Gross profit (Loss)
|
| | | | 1,985 | | | | | | 468 | | | | | | — | | | | | | 2,453 | | | | | | 3,352 | | |
Other Operating Income
|
| | | | 19 | | | | | | — | | | | | | — | | | | | | 19 | | | | | | 26 | | |
Operating Expenses
|
| | | | (1,389) | | | | | | (120) | | | | | | — | | | | | | (1,509) | | | | | | (2,062) | | |
Operating profit (Loss)
|
| | | | 615 | | | | | | 348 | | | | | | — | | | | | | 963 | | | | | | 1,316 | | |
Other income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Expense
|
| | | | (59) | | | | | | (28) | | | | | | — | | | | | | (87) | | | | | | (119) | | |
Net Income (Loss) Before Tax
|
| | | | 556 | | | | | | 320 | | | | | | — | | | | | | 876 | | | | | | 1,197 | | |
Tax Expense
|
| | | | (106) | | | | | | — | | | | | | — | | | | | | (106) | | | | | | (145) | | |
Net Income (Loss) After Tax
|
| | | | 450 | | | | | | 320 | | | | | | — | | | | | | 770 | | | | | | 1,052 | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 450 | | | | | | 320 | | | | | | — | | | | | | 770 | | | | | | 1,052 | | |
| | |
June 30, 2021
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| |||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 2,143 | | | | | | 2,273 | | | | | | 3,290 | | |
Accounts receivable, net of allowance
|
| | | | 1,006 | | | | | | 948 | | | | | | 1,264 | | |
Other receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Inventory
|
| | | | 98 | | | | | | 113 | | | | | | 120 | | |
Prepaid expenses and other assets
|
| | | | 3,012 | | | | | | 1,549 | | | | | | 1,065 | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | 53 | | | | | | 54 | | | | | | 67 | | |
Total Current Assets
|
| | | | 6,312 | | | | | | 4,937 | | | | | | 5,806 | | |
Non-Current Assets | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 7,504 | | | | | | 7,597 | | | | | | 7,399 | | |
Intangible assets, net
|
| | | | 1,185 | | | | | | 1,005 | | | | | | 922 | | |
Operating lease right-of-use asset
|
| | | | 1,417 | | | | | | 1,664 | | | | | | 2,194 | | |
Investments at fair value
|
| | | | 29 | | | | | | 29 | | | | | | 29 | | |
Goodwill
|
| | | | 1,210 | | | | | | 1,210 | | | | | | 1,210 | | |
Other non-current assets
|
| | | | 507 | | | | | | 516 | | | | | | — | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | | | | | — | | |
Total Non-Current Assets
|
| | | | 11,852 | | | | | | 12,021 | | | | | | 11,754 | | |
Total Assets
|
| | | | 18,164 | | | | | | 16,958 | | | | | | 17,560 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 1,199 | | | | | | 822 | | | | | | 487 | | |
Accrued expenses and other current liabilities
|
| | | | 1,892 | | | | | | 1,810 | | | | | | 1,443 | | |
Deferred revenue
|
| | | | 1,694 | | | | | | 1,547 | | | | | | 3,231 | | |
Operating lease liabilities
|
| | | | 564 | | | | | | 545 | | | | | | 545 | | |
Loans payable
|
| | | | 70 | | | | | | 65 | | | | | | 63 | | |
Loans payable – related parties
|
| | | | 384 | | | | | | 590 | | | | | | 433 | | |
Income tax payable
|
| | | | — | | | | | | — | | | | | | — | | |
Total current liabilities
|
| | | | 5,803 | | | | | | 5,379 | | | | | | 6,202 | | |
Non-Current Liabilities | | | | | | | | | | | | | | | | | | | |
Operating lease liabilities
|
| | | | 1,056 | | | | | | 1,308 | | | | | | 1,729 | | |
Loans payable
|
| | | | 116 | | | | | | 158 | | | | | | 1,218 | | |
Loans payable – related parties
|
| | | | — | | | | | | — | | | | | | 400 | | |
Convertible Debt Obligation
|
| | | | 1,336 | | | | | | 1,532 | | | | | | 1,918 | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | 25 | | |
| | |
June 30, 2021
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| |||||||||
Deferred Tax Liability
|
| | | | 828 | | | | | | 875 | | | | | | 737 | | |
Total Non-Current liabilities
|
| | | | 3,336 | | | | | | 3,873 | | | | | | 6,027 | | |
Total liabilities
|
| | | | 9,139 | | | | | | 9,252 | | | | | | 12,229 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 50,751 | | | | | | 50,880 | | | | | | 26,846 | | |
Minority Interest
|
| | | | 2,884 | | | | | | 257 | | | | | | — | | |
Subscriptions receivable
|
| | | | (1,901) | | | | | | (1,901) | | | | | | (1,126) | | |
Derivative liability
|
| | | | — | | | | | | (250) | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | (494) | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | |
Retained earnings
|
| | | | (10,763) | | | | | | (9,167) | | | | | | (6,051) | | |
Reserves
|
| | | | (31,946) | | | | | | (32,113) | | | | | | (13,844) | | |
Total Stockholders’ Equity
|
| | | | 9,025 | | | | | | 7,706 | | | | | | 5,331 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 18,164 | | | | | | 16,958 | | | | | | 17,560 | | |
| | |
Genius Group Pre-IPO Group
For the Six Months Ended (USD 000’s) |
| |||||||||||||||||||||
| | |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 6,352 | | | | | | 4,538 | | | | | | 7,634 | | | | | | 9,949 | | |
Cost of goods sold
|
| | | | (4,710) | | | | | | (2,294) | | | | | | (4,134) | | | | | | (5,024) | | |
Gross profit (Loss)
|
| | | | 1,642 | | | | | | 2,244 | | | | | | 3,500 | | | | | | 4,925 | | |
Other Operating Income
|
| | | | 67 | | | | | | 85 | | | | | | 11 | | | | | | 1,187 | | |
Operating Expenses
|
| | | | (3,203) | | | | | | (3,096) | | | | | | (6,192) | | | | | | (7,151) | | |
Operating profit (Loss)
|
| | | | (1,494) | | | | | | (767) | | | | | | (2,681) | | | | | | (1,039) | | |
Other income
|
| | | | — | | | | | | — | | | | | | 412 | | | | | | 784 | | |
Other Expense
|
| | | | (183) | | | | | | (643) | | | | | | (854) | | | | | | (864) | | |
Net Income (Loss) Before Tax
|
| | | | (1,677) | | | | | | (1,410) | | | | | | (3,123) | | | | | | (1,119) | | |
Tax Expense
|
| | | | 47 | | | | | | 129 | | | | | | (69) | | | | | | (111) | | |
Net Income (Loss) After Tax
|
| | | | (1,630) | | | | | | (1,281) | | | | | | (3,192) | | | | | | (1,230) | | |
Other Comprehensive Income
|
| | | | 71 | | | | | | (525) | | | | | | 2,129 | | | | | | (308) | | |
Total Income (Loss)
|
| | | | (1,559) | | | | | | (1,806) | | | | | | (1,063) | | | | | | (1,538) | | |
Net income per share, basic and diluted
|
| | | | (0.10) | | | | | | (0.13) | | | | | | (0.25) | | | | | | (0.14) | | |
Weighted-average number of shares outstanding,
basic and diluted |
| | | | 16,155,810 | | | | | | 9,798,478 | | | | | | 12,575,605 | | | | | | 8,492,924 | | |
| | |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 2,143 | | | | | | 3,377 | | | | | | 2,273 | | | | | | 3,290 | | |
Accounts receivable, net of allowance
|
| | | | 1,006 | | | | | | 2,700 | | | | | | 948 | | | | | | 1,264 | | |
Other receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Inventory
|
| | | | 98 | | | | | | 158 | | | | | | 113 | | | | | | 120 | | |
Prepaid expenses and other assets
|
| | | | 3,012 | | | | | | 1,624 | | | | | | 1,549 | | | | | | 1,065 | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | 53 | | | | | | 4 | | | | | | 54 | | | | | | 67 | | |
Total Current Assets
|
| | | | 6,312 | | | | | | 7,863 | | | | | | 4,937 | | | | | | 5,806 | | |
Non-Current Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 7,504 | | | | | | 8,523 | | | | | | 7,597 | | | | | | 7,399 | | |
Intangible assets, net
|
| | | | 1,185 | | | | | | 6,008 | | | | | | 1,005 | | | | | | 922 | | |
Operating lease right-of-use asset
|
| | | | 1,417 | | | | | | 808 | | | | | | 1,664 | | | | | | 2,194 | | |
Investments at fair value
|
| | | | 29 | | | | | | 28 | | | | | | 29 | | | | | | 29 | | |
Goodwill
|
| | | | 1,210 | | | | | | 8,454 | | | | | | 1,210 | | | | | | 1,210 | | |
Other non-current assets
|
| | | | 507 | | | | | | — | | | | | | 516 | | | | | | — | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Non-Current Assets
|
| | | | 11,852 | | | | | | 23,821 | | | | | | 12,021 | | | | | | 11,754 | | |
Total Assets
|
| | | | 18,164 | | | | | | 31,684 | | | | | | 16,958 | | | | | | 17,560 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 1,199 | | | | | | 1,144 | | | | | | 822 | | | | | | 487 | | |
Accrued expenses and other current liabilities
|
| | | | 1,892 | | | | | | 1,225 | | | | | | 1,810 | | | | | | 1,443 | | |
Deferred revenue
|
| | | | 1,694 | | | | | | 1,597 | | | | | | 1,547 | | | | | | 3,231 | | |
Operating lease liabilities
|
| | | | 564 | | | | | | 406 | | | | | | 545 | | | | | | 545 | | |
Loans payable
|
| | | | 70 | | | | | | 25 | | | | | | 65 | | | | | | 63 | | |
Loans payable – related parties
|
| | | | 384 | | | | | | 431 | | | | | | 590 | | | | | | 433 | | |
Income tax payable
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total current liabilities
|
| | | | 5,803 | | | | | | 4,828 | | | | | | 5,379 | | | | | | 6,202 | | |
Non-Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating lease liabilities
|
| | | | 1,056 | | | | | | 453 | | | | | | 1,308 | | | | | | 1,729 | | |
Loans payable
|
| | | | 116 | | | | | | 1,000 | | | | | | 158 | | | | | | 1,218 | | |
Loans payable – related parties
|
| | | | — | | | | | | 400 | | | | | | — | | | | | | 400 | | |
Convertible Debt Obligation
|
| | | | 1,336 | | | | | | 3,466 | | | | | | 1,532 | | | | | | 1,918 | | |
Other non-current liabilities
|
| | | | — | | | | | | 259 | | | | | | — | | | | | | 25 | | |
Deferred Tax Liability
|
| | | | 829 | | | | | | 631 | | | | | | 875 | | | | | | 737 | | |
Total Non-Current liabilities
|
| | | | 3,337 | | | | | | 6,209 | | | | | | 3,873 | | | | | | 6,027 | | |
Total liabilities
|
| | | | 9,140 | | | | | | 11,037 | | | | | | 9,252 | | | | | | 12,229 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 50,751 | | | | | | 27,820 | | | | | | 50,880 | | | | | | 26,846 | | |
Minority Interest
|
| | | | 2,872 | | | | | | — | | | | | | 257 | | | | | | — | | |
Subscriptions receivable
|
| | | | (1,901) | | | | | | (1,045) | | | | | | (1,901) | | | | | | (1,126) | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | (250) | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | (860) | | | | | | — | | | | | | (494) | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Retained earnings
|
| | | | (10,751) | | | | | | (7,750) | | | | | | (9,167) | | | | | | (6,051) | | |
Reserves
|
| | | | (31,947) | | | | | | 2,482 | | | | | | (32,113) | | | | | | (13,844) | | |
Total Stockholders’ Equity
|
| | | | 9,024 | | | | | | 20,647 | | | | | | 7,706 | | | | | | 5,331 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 18,164 | | | | | | 31,684 | | | | | | 16,958 | | | | | | 17,560 | | |
| | |
June 30,
2021 |
| |
June 30,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||
Summary Income Data: | | | | | | ||||||||||||||||||||
Sales | | | | | 3,489 | | | | | | 5,340 | | | | | | 10,078 | | | | | | 12,054 | | |
Cost of goods sold
|
| | | | (1,712) | | | | | | (1,396) | | | | | | (2,881) | | | | | | (3,863) | | |
Gross profit (Loss)
|
| | | | 1,777 | | | | | | 3,944 | | | | | | 7,197 | | | | | | 8,191 | | |
Other Operating Income
|
| | | | — | | | | | | (2) | | | | | | 6 | | | | | | — | | |
Operating Expenses
|
| | | | (3,318) | | | | | | (2,964) | | | | | | (6,164) | | | | | | (7,822) | | |
Operating profit (Loss)
|
| | | | (1,541) | | | | | | 978 | | | | | | 1,039 | | | | | | 369 | | |
Other income
|
| | | | 1,973 | | | | | | — | | | | | | 807 | | | | | | — | | |
Other Expense
|
| | | | (5) | | | | | | (5) | | | | | | (14) | | | | | | (5) | | |
Net Income (Loss) Before Tax
|
| | | | 427 | | | | | | 973 | | | | | | 1,832 | | | | | | 364 | | |
Tax Expense
|
| | | | (1) | | | | | | — | | | | | | (27) | | | | | | (8) | | |
Net Income (Loss) After-tax
|
| | | | 426 | | | | | | 973 | | | | | | 1,805 | | | | | | 356 | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 426 | | | | | | 973 | | | | | | 1,805 | | | | | | 356 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| |||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 567 | | | | | | 1,679 | | | | | | 1,253 | | |
Accounts receivable, net of allowance
|
| | | | 5,119 | | | | | | 5,352 | | | | | | 3,490 | | |
Other receivable
|
| | | | — | | | | | | — | | | | | | 4 | | |
Inventory
|
| | | | 63 | | | | | | 62 | | | | | | 197 | | |
Prepaid expenses and other assets
|
| | | | 36 | | | | | | 40 | | | | | | 23 | | |
Total Current Assets
|
| | |
|
5,785
|
| | | |
|
7,133
|
| | | |
|
4,967
|
| |
Non-Current Assets
|
| | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 1,149 | | | | | | 1,219 | | | | | | 1,192 | | |
Intangible assets, net
|
| | | | 22 | | | | | | 24 | | | | | | 27 | | |
Operating lease right-of-use asset
|
| | | | — | | | | | | — | | | | | | 544 | | |
Total Non-Current Assets
|
| | | | 1,171 | | | | | | 1,243 | | | | | | 1,763 | | |
Total Assets
|
| | |
|
6,956
|
| | | |
|
8,376
|
| | | |
|
6,730
|
| |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 470 | | | | | | 253 | | | | | | 587 | | |
Accrued expenses and other current liabilities
|
| | | | 767 | | | | | | 726 | | | | | | 957 | | |
Deferred revenue
|
| | | | 1,718 | | | | | | 2,009 | | | | | | 2,145 | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | 134 | | |
Loans payable
|
| | | | 27 | | | | | | 530 | | | | | | — | | |
Income tax payable
|
| | | | 1 | | | | | | 34 | | | | | | 7 | | |
Total current liabilities
|
| | |
|
2,983
|
| | | |
|
3,552
|
| | | |
|
3,830
|
| |
Non-Current Liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | 410 | | |
Loans payable
|
| | | | 109 | | | | | | 753 | | | | | | — | | |
Total Non-Current liabilities
|
| | | | 109 | | | | | | 753 | | | | | | 410 | | |
Total liabilities
|
| | |
|
3,092
|
| | | |
|
4,305
|
| | | |
|
4,240
|
| |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 710 | | | | | | 710 | | | | | | 709 | | |
Retained earnings
|
| | | | 3,154 | | | | | | 3,361 | | | | | | 1,781 | | |
Total Stockholders’ Equity
|
| | |
|
3,864
|
| | | |
|
4,071
|
| | | |
|
2,490
|
| |
Total Liabilities and Stockholders’ Equity
|
| | |
|
6,956
|
| | | |
|
8,376
|
| | | |
|
6,730
|
| |
| | |
June 30,
2021 (GBP 000’s) |
| |
June 30,
2020 (GBP 000’s) |
| |
December 31,
2020 (GBP 000’s) |
| |
December 31,
2019 (GBP 000’s) |
| ||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 764 | | | | | | 344 | | | | | | 575 | | | | | | 608 | | |
Cost of goods sold
|
| | | | (340) | | | | | | (97) | | | | | | (107) | | | | | | (244) | | |
Gross profit (Loss)
|
| | | | 424 | | | | | | 247 | | | | | | 468 | | | | | | 364 | | |
Other Operating Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Operating Expenses
|
| | | | (49) | | | | | | (38) | | | | | | (120) | | | | | | (697) | | |
Operating profit (Loss)
|
| | | | 375 | | | | | | 209 | | | | | | 348 | | | | | | (333) | | |
Other income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Expense
|
| | | | (2) | | | | | | (14) | | | | | | (28) | | | | | | (11) | | |
Net Income (Loss) Before Tax
|
| | | | 373 | | | | | | 195 | | | | | | 320 | | | | | | (344) | | |
Tax Expense
|
| | | | (71) | | | | | | — | | | | | | — | | | | | | — | | |
Net Income (Loss) After Tax
|
| | | | 302 | | | | | | 195 | | | | | | 320 | | | | | | (344) | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 302 | | | | | | 195 | | | | | | 320 | | | | | | (344) | | |
| | |
June 30,
2021 (GBP 000’s) |
| |
December 31,
2020 (GBP 000’s) |
| |
December 31,
2019 (GBP 000’s) |
| |||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 24 | | | | | | 8 | | | | | | 26 | | |
Accounts receivable, net of allowance
|
| | | | 79 | | | | | | 18 | | | | | | 15 | | |
Other receivable
|
| | | | — | | | | | | 2 | | | | | | 3 | | |
Inventory
|
| | | | — | | | | | | — | | | | | | — | | |
Prepaid expenses and other assets
|
| | | | — | | | | | | 7 | | | | | | — | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | 748 | | | | | | 449 | | | | | | 179 | | |
Total Current Assets
|
| | | | 851 | | | | | | 484 | | | | | | 223 | | |
Non-Current Assets | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | — | | | | | | — | | | | | | — | | |
Intangible assets, net
|
| | | | 1 | | | | | | 1 | | | | | | 1 | | |
Operating lease right-of-use asset
|
| | | | — | | | | | | — | | | | | | — | | |
Investments at fair value
|
| | | | — | | | | | | — | | | | | | — | | |
Goodwill
|
| | | | — | | | | | | — | | | | | | — | | |
Other non-current assets
|
| | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | — | | | | | | — | | | | | | — | | |
Total Non-Current Assets
|
| | | | 1 | | | | | | 1 | | | | | | 1 | | |
Total Assets
|
| | | | 852 | | | | | | 485 | | | | | | 224 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 5 | | | | | | 45 | | | | | | 42 | | |
Accrued expenses and other current liabilities
|
| | | | 133 | | | | | | 19 | | | | | | 28 | | |
Deferred revenue
|
| | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Loans payable
|
| | | | — | | | | | | 1 | | | | | | — | | |
Loans payable – related parties
|
| | | | 1 | | | | | | — | | | | | | — | | |
Income tax payable
|
| | | | — | | | | | | — | | | | | | 17 | | |
Total current liabilities
|
| | | | 139 | | | | | | 65 | | | | | | 87 | | |
Non-Current Liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Loans payable
|
| | | | 49 | | | | | | 57 | | | | | | 95 | | |
Loans payable – related parties
|
| | | | — | | | | | | — | | | | | | — | | |
Convertible Debt Obligation
|
| | | | — | | | | | | — | | | | | | — | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Deferred Tax Liability
|
| | | | — | | | | | | — | | | | | | — | | |
Total Non-Current liabilities
|
| | | | 49 | | | | | | 57 | | | | | | 95 | | |
Total liabilities
|
| | | | 188 | | | | | | 122 | | | | | | 182 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | |
Minority Interest
|
| | | | — | | | | | | — | | | | | | — | | |
Subscriptions receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | — | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | |
Retained earnings
|
| | | | 664 | | | | | | 363 | | | | | | 42 | | |
Reserves
|
| | | | — | | | | | | — | | | | | | — | | |
Total Stockholders’ Equity
|
| | | | 664 | | | | | | 363 | | | | | | 42 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 852 | | | | | | 485 | | | | | | 224 | | |
| | |
June 30,
2021 (GBP 000’s) |
| |
June 30,
2020 (GBP 000’s) |
| |
December 31,
2020 (GBP 000’s) |
| |
December 31,
2019 (GBP 000’s) |
| ||||||||||||
Summary Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales
|
| | | | 1,530 | | | | | | 1,483 | | | | | | 2,790 | | | | | | 2,939 | | |
Cost of goods sold
|
| | | | (460) | | | | | | (485) | | | | | | (805) | | | | | | (1,410) | | |
Gross profit (Loss)
|
| | | | 1,070 | | | | | | 998 | | | | | | 1,985 | | | | | | 1,529 | | |
Other Operating Income
|
| | | | 11 | | | | | | 13 | | | | | | 19 | | | | | | 31 | | |
Operating Expenses
|
| | | | (377) | | | | | | (412) | | | | | | (1,389) | | | | | | (1,151) | | |
Operating profit (Loss)
|
| | | | 704 | | | | | | 599 | | | | | | 615 | | | | | | 409 | | |
Other income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other Expense
|
| | | | (7) | | | | | | (33) | | | | | | (59) | | | | | | (73) | | |
Net Income (Loss) Before Tax
|
| | | | 697 | | | | | | 566 | | | | | | 556 | | | | | | 336 | | |
Tax Expense
|
| | | | (132) | | | | | | (108) | | | | | | (106) | | | | | | (158) | | |
Net Income (Loss) After Tax
|
| | | | 565 | | | | | | 458 | | | | | | 450 | | | | | | 178 | | |
Other Comprehensive Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Income (Loss)
|
| | | | 565 | | | | | | 458 | | | | | | 450 | | | | | | 178 | | |
| | |
June 30,
2021 (GBP 000’s) |
| |
December 31,
2020 (GBP 000’s) |
| |
December 31,
2019 (GBP 000’s) |
| |||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 94 | | | | | | 40 | | | | | | 1 | | |
Accounts receivable, net of allowance
|
| | | | 425 | | | | | | 353 | | | | | | 298 | | |
Other receivable
|
| | | | — | | | | | | 1,157 | | | | | | 1,747 | | |
Inventory
|
| | | | — | | | | | | — | | | | | | 11 | | |
Prepaid expenses and other assets
|
| | | | 27 | | | | | | 3 | | | | | | 20 | | |
Loans receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Loans receivable – related parties
|
| | | | 4,036 | | | | | | 2,126 | | | | | | 742 | | |
Total Current Assets
|
| | | | 4,582 | | | | | | 3,679 | | | | | | 2,819 | | |
Non-Current Assets | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | — | | | | | | — | | | | | | — | | |
Intangible assets, net
|
| | | | 18 | | | | | | 17 | | | | | | 18 | | |
Operating lease right-of-use asset
|
| | | | — | | | | | | — | | | | | | — | | |
Investments at fair value
|
| | | | — | | | | | | — | | | | | | — | | |
Goodwill | | | | | — | | | | | | — | | | | | | — | | |
Other non-current assets
|
| | | | — | | | | | | — | | | | | | — | | |
Loans receivable - related parties
|
| | | | — | | | | | | — | | | | | | | | |
Total Non-Current Assets
|
| | | | 18 | | | | | | 17 | | | | | | 18 | | |
Total Assets
|
| | | | 4,600 | | | | | | 3,696 | | | | | | 2,837 | | |
Liabilities and Stockholders’ Equity
|
| | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 60 | | | | | | 113 | | | | | | 90 | | |
Accrued expenses and other current liabilities
|
| | | | 1,020 | | | | | | 965 | | | | | | 1,021 | | |
Deferred revenue
|
| | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Loans payable
|
| | | | 82 | | | | | | 82 | | | | | | 139 | | |
Loans payable – related parties
|
| | | | 699 | | | | | | 399 | | | | | | 129 | | |
Income tax payable
|
| | | | 301 | | | | | | 264 | | | | | | 193 | | |
Total current liabilities
|
| | | | 2,162 | | | | | | 1,823 | | | | | | 1,572 | | |
Non-Current Liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Operating lease liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Loans payable
|
| | | | 198 | | | | | | 198 | | | | | | — | | |
Loans payable – related parties
|
| | | | — | | | | | | — | | | | | | — | | |
Convertible Debt Obligation
|
| | | | — | | | | | | — | | | | | | — | | |
Other non-current liabilities
|
| | | | — | | | | | | — | | | | | | — | | |
Deferred Tax Liability
|
| | | | — | | | | | | — | | | | | | — | | |
Total Non-Current liabilities
|
| | | | 198 | | | | | | 198 | | | | | | — | | |
Total liabilities
|
| | |
|
2,360
|
| | | |
|
2,021
|
| | | |
|
1,572
|
| |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Contributed capital
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | |
Minority Interest
|
| | | | — | | | | | | — | | | | | | — | | |
Subscriptions receivable
|
| | | | — | | | | | | — | | | | | | — | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | — | | |
Treasury stock, at cost
|
| | | | — | | | | | | — | | | | | | — | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | |
Retained earnings
|
| | | | 2,240 | | | | | | 1,675 | | | | | | 1,265 | | |
Reserves
|
| | | | — | | | | | | — | | | | | | — | | |
Total Stockholders’ Equity
|
| | |
|
2,240
|
| | | |
|
1,675
|
| | | |
|
1,265
|
| |
Total Liabilities and Stockholders’ Equity
|
| | |
|
4,600
|
| | | |
|
3,696
|
| | | |
|
2,837
|
| |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | 1,903,726 | | | | | | 3,102 | | | | | | 146,614 | | | | | | 732 | | | | | | 677 | | | | | | 2,054,851 | | |
Year ended December 31, 2020
|
| | | | 1,800,520 | | | | | | 2,821 | | | | | | 131,111 | | | | | | 630 | | | | | | 546 | | | | | | 1,935,628 | | |
Year ended December 31, 2019
|
| | | | 1,553,132 | | | | | | 2,636 | | | | | | 103,758 | | | | | | 420 | | | | | | 732 | | | | | | 1,660,678 | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | 1,868,171 | | | | | | — | | | | | | 120,246 | | | | | | — | | | | | | — | | | | | | 1,988,417 | | |
Year ended December 31, 2020
|
| | | | 1,766,600 | | | | | | — | | | | | | 106,691 | | | | | | — | | | | | | — | | | | | | 1,873,291 | | |
Year ended December 31, 2019
|
| | | | 1,522,662 | | | | | | — | | | | | | 81,595 | | | | | | — | | | | | | — | | | | | | 1,604,257 | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | 35,555 | | | | | | 3,102 | | | | | | 26,368 | | | | | | 732 | | | | | | 677 | | | | | | 66,434 | | |
Year ended December 31, 2020
|
| | | | 33,920 | | | | | | 2,821 | | | | | | 24,420 | | | | | | 630 | | | | | | 546 | | | | | | 62,337 | | |
Year ended December 31, 2019
|
| | | | 30,470 | | | | | | 2,636 | | | | | | 22,163 | | | | | | 420 | | | | | | 732 | | | | | | 56,421 | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | 9,866 | | | | | | 238 | | | | | | 628 | | | | | | 312 | | | | | | 43 | | | | | | 11,087 | | |
Year ended December 31, 2020
|
| | | | 9,399 | | | | | | 214 | | | | | | 570 | | | | | | 270 | | | | | | 43 | | | | | | 10,496 | | |
Year ended December 31, 2019
|
| | | | 7,611 | | | | | | 237 | | | | | | 456 | | | | | | 180 | | | | | | 48 | | | | | | 8,532 | | |
| | |
GeniusU
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | 5,074,942 | | | | | | 3,488,724 | | | | | | 3,184,343 | | | | | | 478,205 | | | | | | 415,267 | | | | | | 12,641,481 | | |
Year ended December 31, 2020
|
| | | | 5,618,211 | | | | | | 10,078,158 | | | | | | 4,598,750 | | | | | | 1,068,204 | | | | | | 827,675 | | | | | | 22,190,997 | | |
| | |
Genius Group
Pro forma Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
Reviewed Financials Six Months Ended (USD 000’s) |
| |
Genius
Group Pro forma Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials Year Ended (USD 000’s) |
| ||||||||||||||||||||||||
|
June 30, 2021
|
| |
June 30, 2021
|
| |
June 30, 2020
|
| |
December 31,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||||||||||||||||
Net Income (Loss)
|
| | | | (105) | | | | | | (1,630) | | | | | | (1,281) | | | | | | (287) | | | | | | (3,192) | | | | | | (1,230) | | |
Adjusted EBITDA
|
| | | | 1,484 | | | | | | (619) | | | | | | 371 | | | | | | 4,569 | | | | | | (137) | | | | | | 1,179 | | |
Net Income (Loss) Margin
|
| | | | (0.76%) | | | | | | (25.66%) | | | | | | (28.23%) | | | | | | (1.18%) | | | | | | (41.81%) | | | | | | (12.36%) | | |
Adjusted EBITDA Margin
|
| | | | 10.66% | | | | | | (9.75%) | | | | | | 8.18% | | | | | | 18.88% | | | | | | (1.78%) | | | | | | 11.85% | | |
| | |
Pre-IPO Group
|
| |
University of
Antelope Valley |
| |
Property
Investors Network |
| |
Education
Angels |
| |
E-Square
|
| |
Total
|
| ||||||||||||||||||
Six months ended June 30, 2021
|
| | | | (617,737) | | | | | | 526,919 | | | | | | 1,497,332 | | | | | | (13,148) | | | | | | 91,000 | | | | | | 1,484,366 | | |
Year ended December 31, 2020
|
| | | | (138,099) | | | | | | 2,145,566 | | | | | | 2,077,310 | | | | | | 249,547 | | | | | | 234,613 | | | | | | 4,568,937 | | |
| | |
Genius Group Pro forma
For the Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
For the Six Months Ended (USD 000’s) |
| ||||||||||||
|
June 30, 2021
|
| |
June 30, 2021
|
| |
June 30, 2020
|
| |||||||||||
Digital Education Revenue
|
| | | | 12,163 | | | | | | 5,075 | | | | | | 3,068 | | |
In-Person Education Revenue
|
| | | | 478 | | | | | | — | | | | | | 330 | | |
Total Education Revenue
|
| | | | 12,641 | | | | | | 5,075 | | | | | | 3,398 | | |
Campus Revenue
|
| | | | 1,277 | | | | | | 1,277 | | | | | | 1,140 | | |
Total Revenue
|
| | |
|
13,918
|
| | | |
|
6,352
|
| | | |
|
4,538
|
| |
| | |
Genius Group Pro forma
For the Six Months Ended (USD 000’s) |
| |
Pre-IPO Group
For the Six Months Ended (USD 000’s) |
| ||||||||||||
|
June 30, 2021
|
| |
June 30, 2021
|
| |
June 30, 2020
|
| |||||||||||
Net Income (Loss)
|
| | | | (105) | | | | | | (1,630) | | | | | | (1,281) | | |
Tax Expense
|
| | | | 192 | | | | | | (47) | | | | | | (129) | | |
Interest Expense, net
|
| | | | 203 | | | | | | 183 | | | | | | 643 | | |
Depreciation and Amortization
|
| | | | 1,112 | | | | | | 793 | | | | | | 979 | | |
Goodwill Impairments
|
| | | | — | | | | | | — | | | | | | — | | |
Stock Based Compensation
|
| | | | 121 | | | | | | 121 | | | | | | 159 | | |
Bad Debt Provision
|
| | | | (39) | | | | | | (39) | | | | | | — | | |
Adjusted EBITDA
|
| | | | 1,484 | | | | | | (619) | | | | | | 371 | | |
| | |
Genius Group
Pro forma For the Year Ended (USD 000’s) |
| |
Pre-IPO Group
Audited Financials For the Year Ended (USD 000’s) |
| ||||||||||||
| | |
December 31,
2020 |
| |
December 31,
2020 |
| |
December 31,
2019 |
| |||||||||
Digital Education Revenue
|
| | | | 20,803 | | | | | | 5,298 | | | | | | 4,771 | | |
In-Person Education Revenue
|
| | | | 1,388 | | | | | | 320 | | | | | | 746 | | |
Total Education Revenue
|
| | | | 22,191 | | | | | | 5,618 | | | | | | 5,517 | | |
Campus Revenue
|
| | | | 2,016 | | | | | | 2,016 | | | | | | 4,432 | | |
Total Revenue
|
| | | | 24,207 | | | | | | 7,634 | | | | | | 9,949 | | |
| | |
Genius Group Pro forma
For the Year Ended (USD 000’s) |
| |
Pre-IPO Group
For the Year Ended (USD 000’s) |
| ||||||||||||
|
December 31, 2020
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| |||||||||||
Net Income (Loss)
|
| | | | (287) | | | | | | (3,192) | | | | | | (1,230) | | |
Tax Expense
|
| | | | 197 | | | | | | 69 | | | | | | 111 | | |
Interest Expense, net
|
| | | | 1,013 | | | | | | 854 | | | | | | 864 | | |
Depreciation and Amortization
|
| | | | 2,323 | | | | | | 1,571 | | | | | | 1,262 | | |
Goodwill Impairments
|
| | | | — | | | | | | — | | | | | | — | | |
Stock Based Compensation
|
| | | | 399 | | | | | | 399 | | | | | | 172 | | |
Bad Debt Provision
|
| | | | 924 | | | | | | 162 | | | | | | — | | |
Adjusted EBITDA
|
| | | | 4,569 | | | | | | (137) | | | | | | 1,179 | | |
| | |
For the six months ended
June 30, (USD) |
| |
For the year ended
December 31, (USD) |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
Net Cash Used In Operating Activities
|
| | | | (1,533,350) | | | | | | (1,670,749) | | | | | | (2,127,213) | | | | | | (1,285,640) | | |
Net Cash Used in Investing Activities
|
| | | | (553,737) | | | | | | (214,729) | | | | | | (1,162,647) | | | | | | (1,842,194) | | |
| | |
For the six months
ended June 30, (USD) |
| |
For the year ended
December 31, (USD) |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
Net Cash Provided By Financing Activities
|
| | | | 1,917,461 | | | | | | 2,296,598 | | | | | | 3,081,983 | | | | | | 3,976,622 | | |
| | |
For the six months ended
June 30, (USD) |
| |
For the year ended
December 31, (USD) |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
Net Cash Provided By (Used In) Operating
Activities |
| | | | (103,125) | | | | | | (53,781) | | | | | | (308,049) | | | | | | 1,474,788 | | |
Net Cash Used in Investing Activities
|
| | | | (24,542) | | | | | | (307,852) | | | | | | (324,411) | | | | | | (222,388) | | |
Net Cash Provided By (Used In) Financing
Activities |
| | | | (984,588) | | | | | | 1,307,620 | | | | | | 1,058,699 | | | | | | (1,273,312) | | |
|
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
|
| |
Paying
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
|
| | | | 1,800,239 | | | | | | 33,922 | | | | | | 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 | |
Richard J. Berman
|
| |
79
|
| | 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, 2021
|
| |
December 31, 2020
|
| ||||||||||||||||||||||||||||||
Name of the
Director and/or Officer |
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Compensation
in USD |
| |
Employee
Shares Granted |
| |
Employee
Shares Granted After Share Split |
| |
Compensation
in USD |
| |
Employee
Shares Granted |
| |
Employee
Shares Granted After Share Split |
| ||||||||||||||||||
Roger James Hamilton
|
| | | | 594,072 | | | | | | 2,310 | | | | | | 13,860 | | | | | | 551,691 | | | | | | 9,795 | | | | | | 58,770 | | |
Michelle Clarke
|
| | | | 109,298 | | | | | | 425 | | | | | | 2,550 | | | | | | 103,748 | | | | | | 1,775 | | | | | | 10,650 | | |
Suraj Naik
|
| | | | 87,464 | | | | | | 340 | | | | | | 2,040 | | | | | | 70,917 | | | | | | 1,279 | | | | | | 7,674 | | |
Sandra Morrell
|
| | | | 36,972 | | | | | | 144 | | | | | | 864 | | | | | | 35,130 | | | | | | 2,608 | | | | | | 15,648 | | |
Jeremy Harris
|
| | | | 185,446 | | | | | | 721 | | | | | | 4,326 | | | | | | 91,440 | | | | | | — | | | | | | — | | |
Patrick Grove
|
| | | | 8,824 | | | | | | 34 | | | | | | 204 | | | | | | 8,824 | | | | | | 1,000 | | | | | | 6,000 | | |
Nic Lim
|
| | | | 8,824 | | | | | | 34 | | | | | | 204 | | | | | | 8,824 | | | | | | 1,000 | | | | | | 6,000 | | |
Anna Gong
|
| | | | 8,824 | | | | | | 34 | | | | | | 204 | | | | | | 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 | | | | | | 57.96% | | | | | | 36.69% | | |
Sandra Morrell
|
| | | | 776,658 | | | | | | 4.81% | | | | | | 3.04% | | |
Michelle Clarke
|
| | | | 493,950 | | | | | | 3.06% | | | | | | 1.94% | | |
Suraj Naik
|
| | | | 263,592 | | | | | | 1.63% | | | | | | 1.03% | | |
Jeremy Harris
|
| | | | 83,016 | | | | | | **% | | | | | | **% | | |
Patrick Grove
|
| | | | 6,000 | | | | | | **% | | | | | | **% | | |
Nic Lim
|
| | | | 6,300 | | | | | | **% | | | | | | **% | | |
Anna Gong
|
| | | | 6,000 | | | | | | **% | | | | | | **% | | |
Richard J. Berman
|
| | | | 0 | | | | | | **% | | | | | | **% | | |
All directors and executive officers as a group (9 individuals)
|
| | | | 10,999,098 | | | | | | 68.08% | | | | | | 43.10% | | |
|
Delaware
|
| |
Singapore
|
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|
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 (if any) 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 the constitution and the Singapore Companies Act, respectively. | |
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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 would otherwise attach to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. However, a company is not prohibited from (a) purchasing and maintaining for 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 to a regulatory authority in respect of non-compliance with any requirements of a regulatory nature (howsoever arising), (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. | |
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Delaware
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| |
Singapore
|
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|
Removal of Directors
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| 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 | |
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Delaware
|
| |
Singapore
|
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| | | | not take effect until such director’s successor has been appointed. | |
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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 casual 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. 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 in accordance with the constitution. Our constitution also provides that any director so appointed shall hold office only until the next retirement of directors under our constitution. | |
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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 corporation also have the power to amend bylaws. | | |
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 power 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 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.
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Meetings of Shareholders
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| |||
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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
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| |
Annual General Meetings
Subject to the Singapore Companies Act, all companies are required to hold an annual general meeting after the end of each financial year within
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Delaware
|
| |
Singapore
|
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| 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. | | | 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). | |
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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 to the directors requiring that a meeting be called) 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.
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| 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 the quorum at any general meeting shall be any two shareholders present in person or by proxy or, in the case of a corporation, by a representative and entitled to vote thereat]. In the event a quorum is not present within half an hour from the time appointed for the meeting, the meeting, if convened upon the requisition of members, shall be dissolved. In any other case, the meeting shall be adjourned for one week, or to such other day and at such other time and place as the directors may determine. | |
| | | |
Shareholders’ Rights at Meetings
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 under Singapore law to institute shareholder actions against us or otherwise seek to enforce their rights as shareholders.
The Singapore Companies Act provides that every member shall, notwithstanding any provision in the constitution, have a right to attend any general meeting of the company and to speak on any resolution before the meeting. The holder of a share may vote on a resolution before a general meeting of the company if the share confers on the holder a right to vote on that resolution. The company’s constitution may provide that a member shall not be entitled to vote unless all calls or other sums
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Delaware
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Singapore
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| vote of a quorum consisting of directors who were not parties to the suit or proceeding, if the person: | | | | |
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➢
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.
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➢
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 to a regulatory authority in respect of non-compliance with any requirements of a regulatory nature (howsoever arising), (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.
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| | | | Under our constitution, it is provided that every director shall be indemnified out of the assets of our Company to the extent permitted by the Singapore Companies Act. | |
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Shareholder Approval of Issuances of Shares
|
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| 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 | | | 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 the company’s shareholders in a general meeting. Such authorization may be obtained by ordinary resolution. Once this shareholders’ approval is obtained, unless previously revoked or varied by the company in a general meeting, it continues in force until the conclusion of the next | |
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Delaware
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| |
Singapore
|
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| 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. | | | 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 a 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 NYSE American 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. | |
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Shareholder Approval of Business Combinations
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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.
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| |
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;
➢
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; 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.
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Shareholder Action Without A Meeting
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| |||
| 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 outside Singapore, like our Company. | |
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Delaware
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Singapore
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Shareholder Suits
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| 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 under Singapore law 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 register of members in order to institute or enforce any legal proceedings or claims against us relating to shareholder rights. A holder of book-entry interests may become a registered shareholder of our company by exchanging its interest in our shares for certificated shares and being registered in our register of members.
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| 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 proposed or 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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Delaware
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Singapore
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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 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 (as the case may be) and subject to the special conditions of each permitted acquisition contained in the Singapore Companies Act, a company may:
➢
redeem redeemable preference shares on such terms and in such manner as is provided by its constitution. Preference shares may be redeemed out of capital only if all the directors make a solvency statement in relation to such redemption in accordance with the Singapore Companies Act, and the company lodges a copy of the statement with the Registrar of Companies;
➢
whether listed on an exchange in Singapore approved by the Monetary Authority of Singapore or any securities exchange outside Singapore, or not, make an off-market purchase of its own shares in accordance with an equal access scheme authorized in advance at a general meeting;
➢
make a selective off-market purchase of its own shares in accordance with an agreement authorized in advance at a general meeting by a special resolution where persons whose shares are to be acquired and their associated persons have abstained from voting;
➢
whether listed on an exchange in Singapore approved by the Monetary Authority of Singapore or any securities exchange outside Singapore, or not, make an acquisition of its own shares under a contingent purchase contract which has been authorized in advance at a general meeting by a special resolution; and
➢
where listed on a securities exchange, make an acquisition of its own shares on the securities exchange, in accordance with the terms and limits authorized in advance at a general meeting.
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| | | |
A company may also purchase its own shares by an
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Delaware
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Singapore
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| | | | accordance with the provisions of the Singapore Companies Act, we may purchase or otherwise acquire our own shares on such terms and in such manner as we may think fit. Any share that is so purchased or acquired by us shall, unless held in treasury in accordance with the Singapore Companies Act, be deemed to be cancelled immediately on purchase or acquisition. On the cancellation of a share as aforesaid, the rights and privileges attached to that share shall expire. | |
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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 less than a majority of a quorum. | | | 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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In addition, a director or chief executive officer who holds any office or possesses any property whereby, whether directly or indirectly, any duty or interest might be created in conflict with such director’s or, as the case may be, the chief executive officer’s duties as director or chief executive officer (as the case may be) 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 fact and 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).
There is, however, no requirement for disclosure where the interest of the director or chief executive
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Delaware
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Singapore
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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 or joined in guaranteeing 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 where he is a director or chief executive officer (as the case may be) of the related corporation, unless the constitution provides otherwise.
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 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 the company of any rights, obligations or liabilities under a transaction which, if it had been entered into by the company, 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 the company, would have been a restricted transaction and such person obtains a benefit from the company or its 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, among others, making a loan or a quasi-loan to another company or a limited liability partnership or entering into any
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Delaware
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Singapore
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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 providing 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, among others, a loan or quasi-loan made by a company (other than an exempt private company) to another company or a limited liability partnership, 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 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 | | | There are no equivalent provisions in Singapore under the Singapore Companies Act. | |
|
Delaware
|
| |
Singapore
|
|
| otherwise receive in the transaction. | | | | |
|
Cumulative Voting
|
| |||
| 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
|
| |
Number of
Ordinary Shares |
| |||
ThinkEquity LLC
|
| | | | | | |
| | | | | | | |
Total
|
| | | | | | |
| | | | | | | |
| | |
Per Share
|
| |
Total Without
Over-Allotment Option |
| |
Total With Full
Over-Allotment Option |
|
Public offering price
|
| |
|
| |
|
| |
|
|
Underwriting discount (7.5%)
|
| | | | | | | |||
Non-accountable expense allowance (1%)
|
| | | | | | | |||
Proceeds, before expenses, to us
|
| | | | | | |
|
SEC Registration Fee
|
| | | $ | 5,333 | | |
|
NYSE American Listing Fee
|
| | | | 75,000 | | |
|
FINRA Filing Fee
|
| | | | 7,831 | | |
|
Legal Fees and Expenses
|
| | | | 350,000 | | |
|
Accounting Fees and Expenses
|
| | | | 830,000 | | |
|
Printing and Engraving Expenses
|
| | | | 50,000 | | |
|
Transfer Agent Fee
|
| | | | 500 | | |
|
Miscellaneous Expenses
|
| | | | 181,336 | | |
|
Total
|
| | | $ | 1,500,000 | | |
| | | | | | | | |
Audited Consolidated Financial Statements
|
| | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 | | |
Unaudited Financial Statements
|
| | | | | | |
| | | | F-52 | | | |
| | | | F-53 | | | |
| | | | F-54 | | | |
| | | | F-55 | | | |
| | | | F-56 | | | |
| | | | F-57 | | |
| | | | | |
As of December 31,
|
| |||||||||
| | | | | |
2020
|
| |
2019
|
| ||||||
| | |
Note
|
| |
As restated(1)
|
| |
As restated(1)
|
| ||||||
Assets | | | | | | | | | | | | | | | | |
Current Assets
|
| | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | $ | 2,273,151 | | | | | $ | 3,290,095 | | |
Accounts receivable, net
|
| | | | | | | 948,341 | | | | | | 1,263,849 | | |
Due from related parties
|
| |
5
|
| | | | 53,851 | | | | | | 67,310 | | |
Inventories
|
| |
6
|
| | | | 112,543 | | | | | | 119,516 | | |
Prepaid expenses and other current assets
|
| |
7
|
| | | | 1,548,717 | | | | | | 1,065,035 | | |
Total Current Assets
|
| | | | | | | 4,936,603 | | | | | | 5,805,805 | | |
Property and equipment, net
|
| |
8
|
| | | | 7,596,990 | | | | | | 7,399,412 | | |
Operating lease right-of-use asset
|
| |
9
|
| | | | 1,663,881 | | | | | | 2,194,073 | | |
Investments at fair value
|
| |
10
|
| | | | 29,076 | | | | | | 28,526 | | |
Goodwill
|
| |
11
|
| | | | 1,209,953 | | | | | | 1,209,953 | | |
Intangible assets, net
|
| |
12
|
| | | | 1,004,914 | | | | | | 922,379 | | |
Other non-current assets
|
| |
14
|
| | | | 516,296 | | | | | | — | | |
Total Assets
|
| | | | | | $ | 16,957,713 | | | | | $ | 17,560,148 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | |
Current Liabilities
|
| | | | | | | | | | | | | | | |
Accounts payable
|
| | | | | | $ | 821,820 | | | | | $ | 486,871 | | |
Accrued expenses and other current liabilities
|
| |
15
|
| | | | 1,810,222 | | | | | | 1,442,590 | | |
Deferred revenue
|
| |
16
|
| | | | 1,546,712 | | | | | | 3,231,431 | | |
Operating lease liabilities – current portion
|
| |
9
|
| | | | 545,132 | | | | | | 544,551 | | |
Loans payable – current portion
|
| |
17
|
| | | | 65,611 | | | | | | 64,379 | | |
Loans payable – related parties – current portion
|
| |
18
|
| | | | 589,502 | | | | | | 432,800 | | |
Total Current Liabilities
|
| | | | | | | 5,378,999 | | | | | | 6,202,622 | | |
Operating lease liabilities – non-current portion
|
| |
9
|
| | | | 1,307,932 | | | | | | 1,729,188 | | |
Loans payable – non-current portion
|
| |
17
|
| | | | 157,629 | | | | | | 1,217,509 | | |
Loans payable – related parties – noncurrent portion
|
| |
18
|
| | | | — | | | | | | 400,000 | | |
Convertible debt obligations, net of debt discount of $0 and
$337,838 as of December 31, 2020 and December 31, 2019, respectively |
| |
19
|
| | | | 1,531,639 | | | | | | 1,918,340 | | |
Deferred tax liability
|
| |
13
|
| | | | 875,425 | | | | | | 736,645 | | |
Other non-current liabilities
|
| |
20
|
| | | | — | | | | | | 25,147 | | |
Total Liabilities
|
| | | | | | | 9,251,624 | | | | | | 12,229,451 | | |
Commitments and Contingencies Stockholders’ Equity: | | | | | | | | | | | | | | | | |
Contributed capital
|
| |
21
|
| | | | 50,630,439 | | | | | | 26,846,043 | | |
Subscriptions receivable
|
| |
21
|
| | | | (1,900,857) | | | | | | (1,125,774) | | |
Reserves
|
| | | | | | | (32,112,799) | | | | | | (13,844,404) | | |
Accumulated deficit
|
| | | | | | | (9,167,848) | | | | | | (6,050,692) | | |
Treasury stock, at cost
|
| |
21
|
| | | | — | | | | | | (494,476) | | |
Capital and reserves attributable to owners of Genius Group Ltd
|
| | | | | | | 7,448,935 | | | | | | 5,330,697 | | |
Non-controlling interest
|
| | | | | | | 257,154 | | | | | | — | | |
Total Stockholders’ Equity
|
| | | | | | | 7,706,089 | | | | | | 5,330,697 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | | | $ | 16,957,713 | | | | | $ | 17,560,148 | | |
| | | | | | | | |
For the Years ended
|
| |||||||||
| | | | | | | | |
December 31,
|
| |||||||||
| | | | | | | | |
2020
|
| |
2019
|
| ||||||
| | |
Note
|
| |
As restated(1)
|
| |
As restated(1)
|
| |||||||||
Revenue
|
| | | | 22 | | | | | $ | 7,633,776 | | | | | $ | 9,949,057 | | |
Cost of revenue
|
| | | | | | | | | | (4,134,108) | | | | | | (5,024,302) | | |
Gross profit
|
| | | | | | | | | | 3,499,668 | | | | | | 4,924,755 | | |
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
|
| | | | | | | | | | (121,909) | | | | | | 31,704 | | |
Total operating expenses
|
| | | | | | | | | | (6,180,517) | | | | | | (5,963,628) | | |
Loss from Operations
|
| | | | | | | | | | (2,680,849) | | | | | | (1,038,873) | | |
(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
|
| | | | | | | | | | (3,123,069) | | | | | | (1,119,009) | | |
Income Tax Expense
|
| | | | 27 | | | | | | (69,245) | | | | | | (111,310) | | |
Net Loss
|
| | | | | | | | | | (3,192,314) | | | | | | (1,230,319) | | |
Other comprehensive income:
|
| | | | | | | | | | | | | | | | | | |
Foreign currency translation
|
| | | | | | | | | | 2,129,081 | | | | | | (308,172) | | |
Total Comprehensive Loss
|
| | | | | | | | | $ | (1,063,233) | | | | | $ | (1,538,491) | | |
Total Comprehensive Loss is attributable to:
|
| | | | | | | | | | | | | | | | | | |
Owners of Genius Group Ltd
|
| | | | | | | | | | (1,006,037) | | | | | | (1,538,491) | | |
Non-controlling interest
|
| | | | | | | | | | (57,196) | | | | | | — | | |
Total Comprehensive Loss
|
| | | | | | | | | $ | (1,063,233) | | | | | $ | (1,538,491) | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | 28 | | | | | | 12,575,605 | | | | | | 8,492,924 | | |
Basic and diluted loss per share from continuing operations
|
| | | | 28 | | | | | $ | (0.25) | | | | | $ | (0.14) | | |
| | | | | | | | | | | | | | | | | | | | |
Accumulated Other Comprehensive Loss
|
| | | | | | | | | | | | | | | | | | | |||||||||
| | |
Contributed
Capital As restated |
| |
Non-
controlling Interest |
| |
Subscriptions
Receivable |
| |
Foreign
Currency As restated |
| |
Reserves
As restated |
| |
Treasury
Stock |
| |
Accumulated
Deficit As restated |
| |
Total
Equity As restated |
| ||||||||||||||||||||||||
Balance, January 1, 2019, as restated
|
| | | $ | 16,460,431 | | | | | $ | — | | | | | $ | — | | | | | $ | (14,895) | | | | | | (5,123,337) | | | | | $ | (132,501) | | | | | $ | (5,071,564) | | | | | $ | 6,118,134 | | |
Net loss, as restated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,230,319) | | | | | | (1,230,319) | | |
Foreign currency translation
adjustments |
| | | | | | | | | | | | | | | | | | | | | | (308,172) | | | | | | | | | | | | | | | | | | | | | | | | (308,172) | | |
Impact of Entrepreneurs Institute common control merger
|
| | | | 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) | | |
Adjustments to book value method(1)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,398,000) | | | | | | | | | | | | | | | | | | (8,398,000) | | |
Balance, December 31, 2019,
as restated |
| | | $ | 26,846,043 | | | | | $ | — | | | | | $ | (1,125,774) | | | | | $ | (323,067) | | | | | $ | (13,521,337) | | | | | $ | (494,476) | | | | | $ | (6,050,692) | | | | | $ | 5,330,697 | | |
Net loss, as restated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,192,315) | | | | | | (3,192,315) | | |
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) | | | | | | 257,154 | | | | | | | | | | | | (17,963) | | | | | | | | | | | | | | | | | | 75,159 | | | | | | — | | |
Share based compensation
|
| | | | 398,605 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 398,605 | | |
Adjustments to book value method(1)
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | (20,379,513) | | | | | | | | | | | | | | | | | | (20,379,513) | | |
Balance, December 31, 2020, as restated
|
| | | $ | 50,630,439 | | | | | $ | 257,154 | | | | | $ | (1,900,857) | | | | | $ | 1,788,051 | | | | | | (33,900,850) | | | | | $ | — | | | | | $ | (9,167,848) | | | | | $ | 7,706,089 | | |
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
As restated(1)
|
| |
As restated(1)
|
| ||||||
Cash Flows From Operating Activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (3,192,314) | | | | | $ | (1,230,319) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Stock-based compensation
|
| | | | 398,605 | | | | | | 171,768 | | |
Depreciation and amortization
|
| | | | 1,570,593 | | | | | | 1,262,108 | | |
Bargain purchase gain
|
| | | | — | | | | | | (1,060,794) | | |
Amortization of deferred tax liability
|
| | | | (68,808) | | | | | | — | | |
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
|
| | | | 138,052 | | | | | | 84,046 | | |
Other non-current liabilities
|
| | | | (25,147) | | | | | | 22,323 | | |
Total adjustments
|
| | | | 1,065,101 | | | | | | (55,321) | | |
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 | | |
Share issued in satisfaction of a liability, net of derivative liability (2020: $250,000)
|
| | | $ | 100,000 | | | | | $ | — | | |
Shares issued for the acquisition of Entrepreneur Resorts and Entrepreneurs Institute
|
| | | $ | 17,798,374 | | | | | $ | 6,400,000 | | |
Shares issued for conversion of convertible notes
|
| | | $ | 2,664,004 | | | | | $ | — | | |
Loan payable for the acquisition of Entrepreneurs Institute
|
| | | $ | — | | | | | $ | 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 | | |
Other assets
|
| | | | 9,000 | | |
Total acquired assets
|
| | | | 2,450,000 | | |
Less: Acquired liabilities | | | | | | | |
Accounts payable
|
| | | | (566,000) | | |
Accrued expenses
|
| | | | (58,000) | | |
Deferred revenue
|
| | | | (2,224,000) | | |
Net assets acquired
|
| | | $ | (398,000) | | |
| | | | | | | |
| | |
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 | | |
Other intangible assets
|
| | | | 67,849 | | |
Goodwill
|
| | | | 1,209,953 | | |
Total acquired assets
|
| | | | 12,230,521 | | |
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
|
| | | | 607,270 | | |
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
|
| | | | 6,292,940 | | |
Net assets
|
| | | $ | 5,937,581 | | |
Net assets acquired – 97.8% controlling interest
|
| | | $ | 5,806,954 | | |
| | | | | | | |
| | |
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
As restated |
| |
2019
|
| ||||||||||||||||||||||||||||||
| | |
Cost
As restated |
| |
Accumulated
Depreciation |
| |
Carrying
Value As restated |
| |
Cost
|
| |
Accumulated
Depreciation |
| |
Carrying
Value |
| ||||||||||||||||||
Land . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 1,486,718 | | | | | $ | — | | | | | $ | 1,486,718 | | | | | $ | 1,486,718 | | | | | $ | — | | | | | $ | 1,486,718 | | |
Buildings, as restated . . . . . . . . . . . . . .
|
| | | | 4,625,408 | | | | | | (674,781) | | | | | | 3,950,627 | | | | | | 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 | | |
| | | | $ | 11,733,570 | | | | | $ | (4,136,580) | | | | | $ | 7,596,990 | | | | | $ | 10,833,494 | | | | | $ | (3,434,082) | | | | | $ | 7,399,412 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Opening
Balance |
| |
Additions
|
| |
Disposals
|
| |
Translation
|
| |
Reclass
|
| |
Depreciation
|
| |
Closing Balance
As restated |
| |||||||||||||||||||||
Land . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 1,486,718 | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | 1,486,718 | | |
Buildings, as restated . . . . . . . . . . . .
|
| | | | 3,430,545 | | | | | | 490,961 | | | | | | — | | | | | | 359,867 | | | | | | | | | | | | (330,746) | | | | | | 3,950,627 | | |
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 | | | | | $ | 588,843 | | | | | $ | (25,236) | | | | | $ | 336,510 | | | | | $ | — | | | | | $ | (702,539) | | | | | $ | 7,596,990 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
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, as restated
|
| | | | 1,209,953 | | |
|
Additions -
|
| | | | — | | |
|
Balance as of December 31, 2019, as restated
|
| | | $ | 1,209,953 | | |
|
Additions -
|
| | | | — | | |
|
Balance as of December 31, 2020, as restated
|
| | | $ | 1,209,953 | | |
| | | | | | | | |
| | |
Balance at
December 31, 2019 |
| |
Software
Development Additions |
| |
Purchase
of Intangibles |
| |
Amortization
Expense |
| |
Foreign
Currency Translation |
| |
Balance at
December 31, 2020, as restated |
| ||||||||||||||||||
Trademarks
|
| | | $ | — | | | | | $ | — | | | | | $ | 13,234 | | | | | $ | — | | | | | $ | — | | | | | $ | 13,234 | | |
GeniusU software platform
|
| | | $ | 1,563,193 | | | | | $ | 424,530 | | | | | $ | — | | | | | $ | — | | | | | $ | 19,459 | | | | | $ | 2,007,182 | | |
Accumulated amortization
|
| | | | (640,814) | | | | | | — | | | | | | — | | | | | | (359,822) | | | | | | (14,866) | | | | | | (1,015,502) | | |
Net carrying value
|
| | | $ | 922,379 | | | | | $ | 424,530 | | | | | $ | 13,234 | | | | | $ | (359,822) | | | | | $ | 4,593 | | | | | $ | 1,004,914 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance at
December 31, 2018 |
| |
Software
Development Additions |
| |
Purchase
of Intangibles |
| |
Amortization
Expense |
| |
Foreign
Currency Translation |
| |
Balance at
December 31, 2019, as restated |
| ||||||||||||||||||
GeniusU software platform
|
| | | $ | 1,103,705 | | | | | $ | 423,959 | | | | | $ | — | | | | | $ | — | | | | | $ | 35,529 | | | | | $ | 1,563,193 | | |
Accumulated Amortization
|
| | | | (358,067) | | | | | | | | | | | | | | | | | | (268,499) | | | | | | (14,248) | | | | | | (640,814) | | |
Net carrying value
|
| | | $ | 745,638 | | | | | $ | 423,959 | | | | | $ | — | | | | | $ | (268,499) | | | | | $ | 21,281 | | | | | $ | 922,379 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance
December 31, 2019, as restated |
| |
Recognized
In Business Combinations |
| |
Recognized
In Provision For Income Taxes |
| |
Balance
December 31, 2020, as restated |
| ||||||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Property, plant, and equipment
|
| | | | (1,005,005) | | | | | | (69,537) | | | | | | 94,930 | | | | | | (979,612) | | |
Other
|
| | | | — | | | | | | | | | | | | (8,431) | | | | | | (8,431) | | |
| | | | | (1,005,005) | | | | | | (69,537) | | | | | | 86,499 | | | | | $ | (988,043) | | |
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
|
| | | | 174,963 | | | | | | | | | | | | (174,963) | | | | | | — | | |
| | | | | 280,071 | | | | | | — | | | | | | (182,056) | | | | | | 98,015 | | |
Net deferred tax assets and (liabilities)
|
| | | $ | (736,645) | | | | | $ | (69,537) | | | | | $ | (69,245) | | | | | $ | (875,425) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Balance
December 31, 2018 |
| |
Recognized
In Business Combinations |
| |
Recognized
In Provision For Income Taxes |
| |
Balance
December 31, 2019, as restated |
| ||||||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Property, plant, and equipment
|
| | | | (853,231) | | | | | | (218,402) | | | | | | 66,628 | | | | | $ | (1,005,005) | | |
Other
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | |
| | | | | (853,231) | | | | | | (218,402) | | | | | | 66,628 | | | | | | (1,005,005) | | |
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 | | | | | | | | | | | | (198,656) | | | | | $ | 174,963 | | |
| | | | | 490,996 | | | | | | | | | | | | (210,926) | | | | | | 280,071 | | |
Net deferred tax assets and (liabilities)
|
| | | $ | (434,198) | | | | | $ | (218,402) | | | | | $ | (84,044) | | | | | $ | (736,645) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Unused tax losses for which no deferred tax assets has been recognized
|
| | | $ | (6,155,623) | | | | | $ | (4,044,750) | | |
Potential tax benefit of such unused tax losses at applicable statutory tax rates
|
| | | $ | (1,305,245) | | | | | $ | (768,413) | | |
| | | | | | | | | | | | | |
| | |
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
|
| | | | 140,707 | | | | | | 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 Entrepreneurs Institute
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
|
| | | | 257,478 | | | | | | 3.56 | | | | | | 0.00 | | | | | | 0 | | |
Exercised
|
| | | | -253,818 | | | | | | 2.43 | | | | | | 0.00 | | | | | | 0 | | |
Expired
|
| | | | 0 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Outstanding Dec 31, 2019
|
| | | | 257,478 | | | | | | 3.56 | | | | | | 1.00 | | | | | | 580,613 | | |
Granted
|
| | | | 73,428 | | | | | | 5.81 | | | | | | 0.00 | | | | | | 0 | | |
Exercised
|
| | | | -257,478 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Expired
|
| | | | 0 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Outstanding Dec 31, 2020
|
| | | | 73,428 | | | | | | 5.81 | | | | | | 1.00 | | | | | | 97,782 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Options Outstanding
|
| |
Options Exercisable
|
| |||||||||||||||||||||
Year
|
| |
Exercise
Price |
| |
Outstanding
Number of options |
| |
Underlying
Common Stock |
| |
Weighted
Average Remaining Life in Years |
| |
Exercisable
Number of Warrants |
| ||||||||||||
2019
|
| | | $ | 3.56 | | | | | | 257,478 | | | |
Genius Group
|
| | | | n/a | | | | | | n/a | | |
2020
|
| | | $ | 5.81 | | | | | | 73,428 | | | |
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
|
| ||||||
| | |
As restated
|
| |
As restated
|
| ||||||
Current tax: | | | | | | | | | | | | | |
Current tax on profits for the year
|
| | | $ | — | | | | | $ | 27,265 | | |
| | | | | — | | | | | | 27,265 | | |
Deferred income tax: | | | | ||||||||||
(Increase) decrease in deferred tax assets
|
| | | | 155,603 | | | | | | 210,926 | | |
Decrease in deferred tax liabilities
|
| | | | (86,358) | | | | | | (126,881) | | |
| | | | | 69,245 | | | | | | 84,045 | | |
Provision for income taxes, as restated
|
| | | $ | 69,245 | | | | | $ | 111,310 | | |
| | | | | | | | | | | | | |
| | |
Years ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
As restated
|
| |||||||||
Income (loss) from continuing operations before provision for income
taxes |
| | | $ | (3,123,070) | | | | | $ | (1,119,009) | | |
Tax at the Singapore rate of 17%
|
| | | $ | (530,922) | | | | | $ | (190,232) | | |
Reconciling items: | | | | | | | | | | | | | |
Permanent differences
|
| | | | 39,478 | | | | | | 91,519 | | |
Usage of unrecorded net operating loss deferred tax asset
|
| | | | — | | | | | | (316,226) | | |
Current period net operating losses not recognized as a deferred tax asset
|
| | | | 407,519 | | | | | | 272,204 | | |
Rate differential – non-Singapore entities
|
| | | | (24,305) | | | | | | 188,728 | | |
Reversal of deferred tax liability
|
| | | | — | | | | | | — | | |
Other deferred tax activity
|
| | | |
177,474
|
| | | | | 65,317 | | |
Provision for income taxes, as restated
|
| | | $ | 69,245 | | | | | $ | 111,310 | | |
| | | | | | | | | | | | | |
| | |
Years ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Basic loss per share from continuing operations, as restated
|
| | | $ | (0.25) | | | | | $ | (0.14) | | |
The calculation of basic and diluted earnings per share has been
based on the following loss attributable to ordinary shareholders and the weighted average number of ordinary shares |
| | | | | | | | | | | | |
Net Loss, as restated
|
| | | $ | (3,192,314) | | | | | $ | (1,230,319) | | |
Non-controlling Interest
|
| | | | 75,159 | | | | | | — | | |
Loss attributable to ordinary shareholders, as restated
|
| | | $ | (3,117,155) | | | | | $ | (1,230,319) | | |
Weighted average number of ordinary shares: | | | | | | | | | | | | | |
Issued at the beginning of the year
|
| | | | 9,742,998 | | | | | | 7,926,570 | | |
Issued in current year
|
| | | | 6,412,812 | | | | | | 1,816,428 | | |
Issued at the end of the year
|
| | | | 16,155,812 | | | | | | 9,742,998 | | |
Weighted average
|
| | | | 12,575,605 | | | | | | 8,492,924 | | |
Diluted earnings (loss) per share:
|
| | | | | | | | | | | | |
There are no dilutive instruments and therefore diluted earnings per share is the same as basic earnings per share
|
| | | | | | | | | | | | |
Instruments that could potentially dilute basic earnings per share
in the future, but were not included in the calculation of diluted earnings per share because they are antidilutive: |
| | | | | | | | | | | | |
Share Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 7,138,140 | | | | | | 377,928 | | |
| | | | | | | | | | | | | |
| | |
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 | |
| | | | |
| | | | | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
| | | | | |
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||
Name of the Director
|
| |
Job Title
|
| |
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 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||
| | | | | | | | |
2020
|
| |
2019
|
| ||||||||||||||||||||||||||||||
Name of the Director
|
| |
Job Title
|
| |
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, as restated(1)(2)
|
| | | $ | 616,195 | | | | | $ | 954,398 | | | | | $ | 1,570,593 | | | | | | 276,798 | | | | | $ | 985,310 | | | | | $ | 1,262,108 | | |
(Loss) income from Operations, as restated
|
| | | $ | 306,710 | | | | | $ | (2,987,559) | | | | | $ | (2,680,849) | | | | | $ | (1,205,784) | | | | | $ | 166,911 | | | | | | (1,038,873) | | |
Net (Loss) income as restated
|
| | | $ | (67,609) | | | | | $ | (3,124,705) | | | | | $ | (3,192,314) | | | | | $ | (1,205,785) | | | | | $ | (24,534) | | | | | $ | (1,230,319) | | |
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 , as
restated. . |
| | | $ | 10,881 | | | | | $ | 7,586,109 | | | | | $ | 7,596,990 | | | | | $ | 11,519 | | | | | $ | 7,387,893 | | | | | $ | 7,399,412 | | |
Total Assets, as restated
|
| | | $ | 3,336,242 | | | | | $ | 13,621,471 | | | | | $ | 16,957,713 | | | | | $ | 3,523,344 | | | | | $ | 14,036,804 | | | | | $ | 17,560,148 | | |
Total Liabilities, as restated
|
| | | $ | 5,852,323 | | | | | $ | 3,399,301 | | | | | $ | 9,251,624 | | | | | $ | 4,468,709 | | | | | $ | 7,760,742 | | | | | $ | 12,229,451 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
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, as previously reported
|
| | | | 914,195 | | | | | $ | 1,226,131 | | | | | $ | 2,140,326 | | | | | $ | 373,465 | | | | | $ | 985,310 | | | | | $ | 1,358,775 | | |
Adjustments (Note 4)(1)
|
| | | | (298,000) | | | | | | (271,733) | | | | | | (569,733) | | | | | | (96,667) | | | | | | — | | | | | | (96,667) | | |
Depreciation and Amortization, as restated
|
| | | | 616,195 | | | | | $ | 954,398 | | | | | $ | 1,570,593 | | | | | | 276,798 | | | | | $ | 985,310 | | | | | $ | 1,262,108 | | |
(Loss) income from Operations, as previously reported
|
| | | | 8,710 | | | | | $ | (3,259,292) | | | | | $ | (3,250,582) | | | | | $ | (1,302,451) | | | | | $ | 166,911 | | | | | $ | (1,135,540) | | |
Adjustments (Note 4)
|
| | | | 298,000 | | | | | | 271,733 | | | | | | 569,733 | | | | | | 96,667 | | | | | | — | | | | | | 96,667 | | |
(Loss) income from Operations, as restated
|
| | | | 306,710 | | | | | $ | (2,987,559) | | | | | $ | (2,680,849) | | | | | $ | (1,205,784) | | | | | $ | 166,911 | | | | | | (1,038,873) | | |
Net (Loss), as previously reported
|
| | | $ | (135,636) | | | | | $ | (3,341,080) | | | | | $ | (3,476,716) | | | | | $ | (1,286,019) | | | | | | (24,534) | | | | | $ | (1,310,553) | | |
Adjustments (Note 4)
|
| | | | 298,000 | | | | | | 271,733 | | | | | | 569,733 | | | | | | 96,667 | | | | | | — | | | | | | 96,667 | | |
Adjustments (Note 4 – income tax)
|
| | | | (229,973) | | | | | | (55,358) | | | | |
|
(285,331)
|
| | | | | (16,433) | | | | | | — | | | | |
|
(16,433)
|
| |
Net (Loss), as restated
|
| | | | (67,609) | | | | | $ | (3,124,705) | | | | | $ | (3,192,314) | | | | | $ | (1,205,785) | | | | | $ | (24,534) | | | | | $ | (1,230,319) | | |
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, as previously reported
|
| | | | 10,881 | | | | | $ | 7,239,965 | | | | | $ | 7,250,846 | | | | | $ | 11,519 | | | | | $ | 7,387,893 | | | | | $ | 7,399,412 | | |
Adjustments (Note 4)
|
| | | | — | | | | | | 346,144 | | | | | | 346,144 | | | | | | — | | | | | | — | | | | | | — | | |
Total Property and Equipment, net, as restated
|
| | | | 10,881 | | | | | $ | 7,586,109 | | | | | $ | 7,596,990 | | | | | $ | 11,519 | | | | | $ | 7,387,893 | | | | | $ | 7,399,412 | | |
Total Assets, as previously reported
|
| | | $ | 12,030,161 | | | | | $ | 41,755,288 | | | | | $ | 53,785,449 | | | | | $ | 12,422,243 | | | | | $ | 19,160,141 | | | | | $ | 31,582,385 | | |
Adjustments (Note 4 – Property and equipment)
|
| | | | — | | | | | | 346,144 | | | | | | 346,144 | | | | | | — | | | | | | — | | | | | | — | | |
Adjustments (Note 4 – Goodwill)
|
| | | | (3,655,567) | | | | | | (14,110,257) | | | | | | (17,765,824) | | | | | | (3,655,567) | | | | | | (5,123,337) | | | | | | (8,778,904) | | |
Adjustments (Note 4 – Intangible assets)
|
| | | | (4,945,333) | | | | | | (14,697,982) | | | | | | (19,643,315) | | | | | | (5,243,333) | | | | | | — | | | | | | (5,243,333) | | |
Adjustments (Foreign currency translation)
|
| | | | — | | | | | | 235,259 | | | | | | 235,259 | | | | | | — | | | | | | — | | | | | | — | | |
Total Assets, as restated
|
| | | $ | 3,429,261 | | | | | $ | 13,528,452 | | | | | $ | 16,957,713 | | | | | $ | 3,523,343 | | | | | $ | 14,036,804 | | | | | $ | 17,560,147 | | |
Total Liabilities, as previously reported
|
| | | .$ | 5,673,010 | | | | | $ | 6,870,135 | | | | | $ | 12,543,145 | | | | | $ | 4,468,709 | | | | | $ | 8,341,876 | | | | | $ | 12,810,585 | | |
Adjustments (Note 4 – deferred tax liability)
|
| | | | 229,973 | | | | | | (3,521,494) | | | | | | (3,291,521) | | | | | | — | | | | | | (581,134) | | | | | | (581,134) | | |
Total Liabilities, as restated
|
| | | $ | 5,902,983 | | | | | $ | 3,348,641 | | | | | $ | 9,251,624 | | | | | $ | 4,468,709 | | | | | $ | 7,760,742 | | | | | $ | 12,229,451 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
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
|
| |
As restated
|
| | | | | | | |
2019
|
| |
As restated
|
| ||||||||||||
| | |
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||
Europe / Middle East / Africa
|
| | | $ | 802 | | | | | $ | 503,853 | | | | | $ | 504,655 | | | | | $ | — | | | | | $ | 7,786,240 | | | | | $ | 7,786,240 | | |
Asia / Pacific
|
| | | | 499,772 | | | | | | 10,500,387 | | | | | | 11,000,159 | | | | | | 962,424 | | | | | | 3,005,679 | | | | | | 3,968,103 | | |
North America / South America
|
| | | | 516,296 | | | | | | — | | | | | | 516,296 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | 1,016,870 | | | | | $ | 11,004,240 | | | | | $ | 12,021,110 | | | | | $ | 962,424 | | | | | $ | 10,791,919 | | | | | $ | 11,754,343 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Statement of financial position | | | | | | | | | | | | | | | | | | | |
As of December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Property and equipment
|
| | | | 7,250,846 | | | | | | 346,144 | | | | | | 7,596,990 | | |
Goodwill
|
| | | | 18,647,498 | | | | | | (17,437,545) | | | | | | 1,209,953 | | |
Intangible assets
|
| | | | 20,741,249 | | | | | | (19,736,335) | | | | | | 1,004,914 | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Total Assets
|
| | | | 53,785,449 | | | | | | (36,827,736) | | | | | | 16,957,713 | | |
Deferred tax liability
|
| | | | 4,166,946 | | | | | | (3,291,521) | | | | | | 875,425 | | |
Total Liabilities
|
| | | | 12,543,145 | | | | | | (3,291,521) | | | | | | 9,251,624 | | |
Reserves
|
| | | | 1,788,051 | | | | | | (33,900,850) | | | | | | (32,112,799) | | |
Accumulated deficit
|
| | | | (9,526,614) | | | | | | 358,766 | | | | | | (9,167,848) | | |
Capital and reserves attributable to owners of Genius Group Ltd.
|
| | | | 40,991,019 | | | | | | (33,542,084) | | | | | | 7,448,935 | | |
Non-controlling interest
|
| | | | 251,285 | | | | | | 5,869 | | | | | | 257,154 | | |
Total Stockholder’s Equity
|
| | | | 41,242,304 | | | | | | (33,536,215) | | | | | | 7,706,089 | | |
Total Liabilities and Stockholder’s Equity
|
| | | | 53,785,449 | | | | | | (36,827,736) | | | | | | 16,957,713 | | |
As of December 31, 2019 | | | | | | | | | | | | | | | | | | | |
Goodwill
|
| | | | 9,988,857 | | | | | | (8,778,904) | | | | | | 1,209,953 | | |
Intangible assets
|
| | | | 6,165,712 | | | | | | (5,243,333) | | | | | | 922,379 | | |
Total assets
|
| | | | 31,582,385 | | | | | | (14,022,237) | | | | | | 17,560,148 | | |
Deferred tax liability
|
| | | | 1,317,779 | | | | | | (581,134) | | | | | | 736,645 | | |
Total liabilities
|
| | | | 12,810,585 | | | | | | (581,134) | | | | | | 12,229,451 | | |
Reserves
|
| | | | (323,067) | | | | | | (13,521,337) | | | | | | (13,844,404) | | |
Accumulated deficit
|
| | | | (6,130,926) | | | | | | 80,234 | | | | | | (6,050,692) | | |
Capital and reserves attributable to owners of Genius Group Ltd.
|
| | | | 18,771,800 | | | | | | (13,441,103) | | | | | | 5,330,697 | | |
Total Stockholder’s Equity
|
| | | | 18,771,800 | | | | | | (13,441,103) | | | | | | 5,330,697 | | |
Total Liabilities and Stockholder’s Equity
|
| | | | 31,582,385 | | | | | | (14,022,237) | | | | | | 17,560,148 | | |
Statement of profit or loss and other comprehensive income | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Cost of Revenue
|
| | | | (4,703,841) | | | | | | 569,733 | | | | | | (4,134,108) | | |
Gross profit
|
| | | | 2,929,935 | | | | | | 569,733 | | | | | | 3,499,668 | | |
Loss from Operations
|
| | | | (3,250,582) | | | | | | 569,733 | | | | | | (2,680,849) | | |
Loss Before Income Tax
|
| | | | (3,692,802) | | | | | | 569,733 | | | | | | (3,123,069) | | |
Income tax benefit (expense)
|
| | | | 216,086 | | | | | | (285,331) | | | | | | (69,245) | | |
Net (loss)
|
| | | | (3,476,716) | | | | | | 284,402 | | | | | | (3,192,314) | | |
Non-controlling interest
|
| | | | (63,065) | | | | | | 5,869 | | | | | | (57,196) | | |
Total Comprehensive (loss)
|
| | | | (1,347,635) | | | | | | 284,402 | | | | | | (1,063,233) | | |
Basic and diluted earnings (loss) per share from continuing operations
|
| | | | (0.27) | | | | | | 0.02 | | | | | | (0.25) | | |
For the year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | |
Cost of Revenue
|
| | | | (5,120,969) | | | | | | 96,667 | | | | | | (5,024,302) | | |
Gross profit
|
| | | | 4,828,088 | | | | | | 96,667 | | | | | | 4,924,755 | | |
Loss from Operations
|
| | | | (1,135,540) | | | | | | 96,667 | | | | | | (1,038,873) | | |
Loss Before Income Tax
|
| | | | (1,215,676) | | | | | | 96,667 | | | | | | (1,119,009) | | |
Income tax benefit (expense)
|
| | | | (94,877) | | | | | | (16,433) | | | | | | (111,310) | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Net (loss)
|
| | | | (1,310,553) | | | | | | 80,234 | | | | | | (1,230,319) | | |
Total Comprehensive Income (loss)
|
| | | | (1,618,725) | | | | | | 80,234 | | | | | | (1,538,491) | | |
Basic and diluted earnings (loss) per share from continuing operations
|
| | | | (0.15) | | | | | | 0.01 | | | | | | (0.14) | | |
Statement of changes in equity | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Non-controlling interest
|
| | | | 251,285 | | | | | | 5,869 | | | | | | 257,154 | | |
Reserves
|
| | | | 1,788,051 | | | | | | (33,900,850) | | | | | | (32,112,799) | | |
Accumulated losses
|
| | | | (9,526,614) | | | | | | 358,766 | | | | | | (9,167,848) | | |
Total Equity
|
| | | | 41,242,304 | | | | | | (33,536,215) | | | | | | 7,706,089 | | |
For the year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | |
Reserves
|
| | | | (323,067) | | | | | | (13,521,337) | | | | | | (13,844,404) | | |
Accumulated deficit
|
| | | | (6,130,926) | | | | | | 80,234 | | | | | | (6,050,692) | | |
Total Equity
|
| | | | 18,771,800 | | | | | | (13,441,103) | | | | | | 5,330,697 | | |
Statement of cash flows | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (3,476,716) | | | | | | 284,402 | | | | | | (3,192,314) | | |
Amortization of deferred tax liability
|
| | | | (166,396) | | | | | | 97,588 | | | | | | (68,808) | | |
Deferred tax liability
|
| | | | (49,691) | | | | | | 187,743 | | | | | | 138,052 | | |
Depreciation and amortization
|
| | | | 2,140,326 | | | | | | (569,733) | | | | | | 1,570,593 | | |
Total adjustments to reconcile net loss to net cash used in operating activities
|
| | | | 1,349,503 | | | | | | (284,402) | | | | | | 1,065,101 | | |
For the year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | |
Net loss before income tax
|
| | | | (1,310,553) | | | | | | 80,234 | | | | | | (1,230,319) | | |
Amortization of deferred tax liability
|
| | | | (16,433) | | | | | | 16,433 | | | | | | — | | |
Depreciation and amortization
|
| | | | 1,358,775 | | | | | | (96,667) | | | | | | 1,262,108 | | |
Total adjustments to reconcile net loss to net cash used in operating activities
|
| | | | 24,913 | | | | | | (80,234) | | | | | | (55,321) | | |
| | | | | | | | | | | | | | | | | | | |
| | |
Note
|
| |
For the
Six-Months Ended June 30, 2021 As restated(1) |
| |
For the
Year Ended December 31, 2020 As restated(1) |
| ||||||
| | | | | |
(Unaudited)
|
| | | | | | | |||
Assets | | | | | | | | | | | | | | | | |
Current Assets
|
| | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | $ | 2,143,358 | | | | | $ | 2,273,151 | | |
Accounts receivable, net
|
| | | | | | | 1,006,162 | | | | | | 948,341 | | |
Due from related parties
|
| |
4
|
| | | | 52,360 | | | | | | 53,851 | | |
Inventories
|
| |
5
|
| | | | 98,223 | | | | | | 112,543 | | |
Prepaid expenses and other current assets
|
| |
6
|
| | | | 3,012,438 | | | | | | 1,548,717 | | |
Total Current Assets
|
| | | | | | | 6,312,541 | | | | | | 4,936,603 | | |
Property and equipment, net
|
| |
7
|
| | | | 7,503,710 | | | | | | 7,596,990 | | |
Operating lease right-of-use asset
|
| |
8
|
| | | | 1,416,551 | | | | | | 1,663,881 | | |
Investments at fair value
|
| |
9
|
| | | | 28,566 | | | | | | 29,076 | | |
Goodwill
|
| |
10
|
| | | | 1,209,953 | | | | | | 1,209,953 | | |
Intangible assets, net
|
| |
11
|
| | | | 1,185,819 | | | | | | 1,004,914 | | |
Other non-current assets
|
| |
13
|
| | | | 507,231 | | | | | | 516,296 | | |
Total Assets
|
| | | | | | $ | 18,164,371 | | | | | $ | 16,957,713 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | |
Current Liabilities
|
| | | | | | | | | | | | | | | |
Accounts payable
|
| | | | | | $ | 1,198,561 | | | | | $ | 821,820 | | |
Accrued expenses and other current liabilities
|
| |
14
|
| | | | 1,892,255 | | | | | | 1,810,222 | | |
Deferred revenue
|
| |
15
|
| | | | 1,693,578 | | | | | | 1,546,712 | | |
Operating lease liabilities – current portion
|
| |
9
|
| | | | 563,684 | | | | | | 545,132 | | |
Loans payable – current portion
|
| |
16
|
| | | | 70,149 | | | | | | 65,611 | | |
Loans payable – related parties – current portion
|
| |
17
|
| | | | 384,016 | | | | | | 589,502 | | |
Total Current Liabilities
|
| | | | | | | 5,802,243 | | | | | | 5,378,999 | | |
Operating lease liabilities – non-current portion
|
| |
9
|
| | | | 1,056,329 | | | | | | 1,307,932 | | |
Loans payable – non-current portion
|
| |
16
|
| | | | 116,228 | | | | | | 157,629 | | |
Convertible debt obligations, net of debt discount
|
| |
18
|
| | | | 1,336,319 | | | | | | 1,531,639 | | |
Deferred tax liability
|
| |
12
|
| | | | 828,386 | | | | | | 875,425 | | |
Total Liabilities
|
| | | | | | $ | 9,139,505 | | | | | $ | 9,251,624 | | |
Stockholders’ Equity:
|
| | | | | | | | | | | | | | | |
Contributed capital
|
| |
19
|
| | | | 50,751,367 | | | | | | 50,630,439 | | |
Subscriptions receivable
|
| | | | | | | (1,900,857) | | | | | | (1,900,857) | | |
Reserves
|
| | | | | | | (31,946,451) | | | | | | (32,112,799) | | |
Accumulated deficit
|
| | | | | | | (10,763,118) | | | | | | (9,167,848) | | |
Capital and reserves attributable to owners of
Genius Group Ltd. |
| | | | | | $ | 6,140,941 | | | | | $ | 7,448,935 | | |
Non-controlling Interest
|
| | | | | | $ | 2,883,925 | | | | | $ | 257,154 | | |
Total Stockholders’ Equity
|
| | | | | | $ | 9,024,866 | | | | | $ | 7,706,089 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | | | $ | 18,164,371 | | | | | $ | 16,957,713 | | |
| | |
Note
|
| |
For the Six Months Ended
June 30, |
| |||||||||
|
2021
As restated(1) |
| |
2020
As restated(1) |
| |||||||||||
| | | | | |
(Unaudited)
|
| |
(Unaudited)
|
| ||||||
Revenue
|
| |
20
|
| | | $ | 6,351,731 | | | | | $ | 4,537,836 | | |
Cost of revenue
|
| |
21
|
| | | | (4,708,872) | | | | | | (2,294,277) | | |
Gross profit
|
| | | | | | $ | 1,642,859 | | | | | $ | 2,243,559 | | |
Operating (Expenses) Income | | | | | | | | | | | | | | | | |
General and administrative
|
| |
23
|
| | | | (3,055,332) | | | | | | (3,032,133) | | |
Depreciation and amortization
|
| | | | | | | (81,993) | | | | | | (38,586) | | |
Other operating income
|
| |
22
|
| | | | 67,230 | | | | | | 85,748 | | |
(Loss) from foreign currency transactions
|
| | | | | | | (66,187) | | | | | | (25,165) | | |
Total operating expenses
|
| | | | | | $ | (3,136,282) | | | | | $ | (3,010,136) | | |
Loss from Operations
|
| | | | | | $ | (1,493,423) | | | | | $ | (766,577) | | |
Other Expense | | | | | | | | | | | | | | | | |
Interest expense, net
|
| |
24
|
| | | | (182,783) | | | | | | (642,976) | | |
Total Other Expense
|
| | | | | | $ | (182,783) | | | | | $ | (642,976) | | |
Loss Before Income Tax
|
| | | | | | $ | (1,676,206) | | | | | $ | (1,409,553) | | |
Income Tax Benefit
|
| |
25
|
| | | | 47,039 | | | | | | 129,375 | | |
Net Loss
|
| | | | | | $ | (1,629,167) | | | | | $ | (1,280,178) | | |
Other comprehensive income:
|
| | | | | | | | | | | | | | | |
Foreign currency translation
|
| | | | | | | 70,711 | | | | | | (524,925) | | |
Total Comprehensive Loss
|
| | | | | | $ | (1,558,456) | | | | | $ | (1,805,103) | | |
Total Comprehensive Loss is attributable to:
|
| | | | | | | | | | | | | | | |
Owners of Genius Group Ltd.
|
| | | | | | $ | (1,530,682) | | | | | $ | (1,805,103) | | |
Non-controlling interest
|
| | | | | | $ | (27,774) | | | | | $ | — | | |
Total Comprehensive Loss
|
| | | | | | $ | (1,558,456) | | | | | $ | (1,805,103) | | |
Weighted-average number of shares outstanding, basic and diluted
|
| | | | | | | 16,155,810 | | | | | | 9,798,478 | | |
Basic and diluted earnings (loss) per share from continuing operations
|
| | | | | | $ | (0.10) | | | | | $ | (0.13) | | |
| | | | | | | | | | | | | | | | | | | | |
Accumulated
Other Comprehensive Loss |
| | | | | | | | | |||||||||||||||||||
| | |
Contributed
Capital |
| |
Non-controlling
Interest |
| |
Subscriptions
Receivable |
| |
Foreign
Currency |
| |
Other
Reserves |
| |
Treasury
Stock |
| |
Accumulated
Deficit |
| |
Total
Equity |
| ||||||||||||||||||||||||
Balance, December 31, 2019, as restated(1)
|
| | | $ | 26,846,043 | | | | | $ | — | | | | | $ | (1,125,774) | | | | | $ | (323,067) | | | | | $ | (13,521,337) | | | | | $ | (494,476) | | | | | $ | (6,050,692) | | | | | $ | 5,330,697 | | |
Net loss, as restated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,192,315) | | | | | | (3,192,315) | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | | | | | 2,129,081 | | | | | | | | | | | | | | | | | | | | | | | | 2,129,081 | | |
Shares issued for cash
|
| | | | 2,222,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,222,000 | | |
Shares issued in satisfaction of liability
|
| | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
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
ER |
| | | | | | | | | | | | | | | | 140,680 | | | | | | | | | | | | | | | | | | 494,476 | | | | | | | | | | | | 635,156 | | |
Shares issued in satisfaction of liability
|
| | | | 100,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000 | | |
Non-controlling interest
|
| | | | (314,350) | | | | | | 257,154 | | | | | | | | | | | | (17,963) | | | | | | | | | | | | | | | | | | 75,159 | | | | | | — | | |
Share based compensation
|
| | | | 398,605 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 398,605 | | |
Capital reserve (book value method adjustment)
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | (20,379,513) | | | | | | | | | | | | | | | | | | (20,379,513) | | |
Balance December 31, 2020, as restated(1)
|
| | | $ | 50,630,439 | | | | | $ | 257,154 | | | | | $ | (1,900,857) | | | | | $ | 1,788,051 | | | | | $ | (33,900,850) | | | | | $ | — | | | | | $ | (9,167,848) | | | | | $ | 7,706,089 | | |
Net loss, as restated
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,629,167) | | | | | | (1,629,167) | | |
Foreign currency translation adjustments
|
| | | | | | | | | | | | | | | | | | | | | | 70,711 | | | | | | | | | | | | | | | | | | | | | | | | 70,711 | | |
Shares issued for cash
|
| | | | 2,473,370 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,473,370 | | |
Shares issued for conversion of convertible notes
|
| | | | 181,175 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 181,175 | | |
Non-controlling interest
|
| | | | (2,654,545) | | | | | | 2,626,771 | | | | | | | | | | | | (6,123) | | | | | | | | | | | | | | | | | | 33,897 | | | | | | — | | |
Share based compensation
|
| | | | 120,928 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 120,928 | | |
Capital reserve (book value method adjustment)
|
| | | | | | | | | | | | | | | | | | | | | | 101,760 | | | | | | | | | | | | | | | | | | | | | | | | 101,760 | | |
Balance June 30, 2021, as restated(1)
|
| | | $ | 50,751,367 | | | | | $ | 2,883,925 | | | | | $ | (1,900,857) | | | | | $ | 1,954,399 | | | | | $ | (33,900,850) | | | | | $ | — | | | | | $ | (10,763,118) | | | | | $ | 9,024,866 | | |
| | |
For the Six-Months Ended
June 30, |
| |||||||||
|
2021
As restated(1) |
| |
2020
As restated(1) |
| ||||||||
Cash Flows From Operating Activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,629,167) | | | | | $ | (1,280,178) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Stock-based compensation
|
| | | | 120,928 | | | | | | 158,799 | | |
Depreciation and amortization
|
| | | | 793,279 | | | | | | 978,582 | | |
Amortization of deferred tax liability
|
| | | | (24,369) | | | | | | (53,473) | | |
Amortization of debt discount
|
| | | | — | | | | | | 322,927 | | |
Provision for doubtful debts
|
| | | | (38,949) | | | | | | — | | |
Loss (gain) on foreign exchange transactions
|
| | | | 66,188 | | | | | | 25,165 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (18,872) | | | | | | 385,010 | | |
Prepaid expenses and other current assets
|
| | | | (1,454,146) | | | | | | (235,245) | | |
Inventory
|
| | | | 14,320 | | | | | | (38,411) | | |
Accounts payable
|
| | | | 376,741 | | | | | | (166,021) | | |
Accrued expenses and other current liabilities
|
| | | | 82,033 | | | | | | (411,863) | | |
Deferred revenue
|
| | | | 146,866 | | | | | | (1,321,691) | | |
Deferred tax liability
|
| | | | (22,670) | | | | | | (75,902) | | |
Lease liabilities
|
| | | | 68,613 | | | | | | 66,699 | | |
Other non-current liabilities
|
| | | | (14,145) | | | | | | (25,147) | | |
Total adjustments
|
| | | | 95,817 | | | | | | (390,571) | | |
Net Cash Used In Operating Activities
|
| | | | (1,533,350) | | | | | | (1,670,749) | | |
Cash Flows From Investing Activities | | | | | | | | | | | | | |
Purchase of software assets
|
| | | | (386,284) | | | | | | (187,460) | | |
Purchase of equipment
|
| | | | (167,453) | | | | | | (27,269) | | |
Net Cash Used In Investing Activities
|
| | | | (553,737) | | | | | | (214,729) | | |
Cash Flows From Financing Activities | | | | | | | | | | | | | |
Amount due to/from related party
|
| | | | (203,995) | | | | | | 62,597 | | |
Proceeds from convertible debt, net of issuance costs
|
| | | | — | | | | | | 1,827,237 | | |
Proceeds from equity issuances, net of issuance costs
|
| | | | 2,473,370 | | | | | | 733,033 | | |
Operating lease liability
|
| | | | (315,051) | | | | | | (287,005) | | |
Repayments of loans payable
|
| | | | (36,863) | | | | | | (39,264) | | |
Net Cash Provided By Financing Activities
|
| | | | 1,917,461 | | | | | | 2,296,598 | | |
Effect of Exchange Rate Changes on Cash
|
| | | | 39,833 | | | | | | (227,192) | | |
Net (Decrease) Increase In Cash
|
| | | | (129,793) | | | | | | 183,928 | | |
Cash – Beginning of year
|
| | | | 2,273,151 | | | | | | 3,290,095 | | |
Cash – End of year
|
| | | | 2,143,358 | | | | | | 3,474,023 | | |
Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
Cash paid during the period for interest
|
| | | | 176,910 | | | | | | 243,463 | | |
Non-Cash Investing and Financing Activities | | | | | | | | | | | | | |
Shares issued for conversion of convertible notes
|
| | | $ | 181,175 | | | | | $ | — | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Prepaid expenses
|
| | | $ | 2,714,741 | | | | | $ | 1,305,088 | | |
Deposits | | | | | 269,155 | | | | | | 226,189 | | |
Other receivables
|
| | | | 28,542 | | | | | | 17,440 | | |
Total prepaid expenses and other current assets
|
| | | $ | 3,012,438 | | | | | $ | 1,548,717 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
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
|
| | | | (30,047) | | | | | | (39,007) | | |
Accumulated depreciation on right of use assets
|
| | | | (982,536) | | | | | | (726,246) | | |
Right of use asset, net
|
| | | $ | 1,416,551 | | | | | $ | 1,663,881 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
Within one year
|
| | | $ | 563,684 | | | | | $ | 545,132 | | |
Two to five years
|
| | | | 587,867 | | | | | | 660,034 | | |
Thereafter
|
| | | | 9,914,083 | | | | | | 9,924,141 | | |
| | | | | 11,065,634 | | | | | | 11,129,307 | | |
Less: finance charges component
|
| | | | (9,445,621) | | | | | | (9,276,243) | | |
| | | | $ | 1,620,013 | | | | | $ | 1,853,064 | | |
Lease liabilities, current
|
| | | $ | 563,684 | | | | | $ | 545,132 | | |
Lease liabilities, non-current
|
| | | | 1,056,329 | | | | | | 1,307,932 | | |
| | | | $ | 1,620,013 | | | | | $ | 1,853,064 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Loans payable – current portion
|
| | | $ | 70,149 | | | | | $ | 65,611 | | |
Loans payable – non-current portion
|
| | | | 116,228 | | | | | | 157,629 | | |
Total
|
| | | $ | 186,377 | | | | | $ | 223,240 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Loan payable to related parties for the acquisition of Entrepreneurs Institute Current portion
|
| | | $ | 348,000 | | | | | $ | 400,000 | | |
Other loans payable to related parties, current
|
| | | | 36,016 | | | | | | 189,502 | | |
Total loans payable to related parties
|
| | | $ | 384,016 | | | | | $ | 589,502 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
Convertible debt obligations, gross
|
| | | $ | 1,336,319 | | | | | $ | 1,531,639 | | |
| | |
For the Six-Months Ended June 30,
|
| |||
| | |
2021
|
| |
2020
|
|
Risk-free interest rate
|
| |
0.25%
|
| |
0.13%
|
|
Contractual term (years)
|
| |
1 or 3
|
| |
2
|
|
Expected volatility
|
| |
66.00%
|
| |
42.00%
|
|
Expected dividends
|
| |
0.00%
|
| |
0.00%
|
|
| | |
No of
Options |
| |
Weighted
Average Share Price |
| |
Weighted
Average Remaining Life |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding Dec 31, 2019
|
| | | | 257,478 | | | | | | 3.56 | | | | | | 1.00 | | | | | | 580,613 | | |
Granted
|
| | | | 73,428 | | | | | | 5.81 | | | | | | 0.00 | | | | | | 0 | | |
Exercised
|
| | | | (257,478) | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Expired
|
| | | | 0 | | | | | | 0.00 | | | | | | 0.00 | | | | | | 0 | | |
Outstanding Dec 31, 2020
|
| | | | 73,428 | | | | | | 5.81 | | | | | | 1.00 | | | | | | 97,782 | | |
Granted
|
| | | | 89,034 | | | | | | 12.08 | | | | | | 2.71 | | | | | | 0 | | |
Outstanding June 30, 2021
|
| | | | 162,462 | | | | | | 9.24 | | | | | | 1.94 | | | | | | 632,287 | | |
| | |
Options Exercisable
|
| |
Options Outstanding
|
| |||||||||||||||||||||
Year
|
| |
Exercise
Price |
| |
Outstanding
Number of options |
| |
Underlying
Common Stock |
| |
Weighted
Average Remaining Life in Years |
| |
Exercisable
Number of Warrants |
| ||||||||||||
2021
|
| | | $ | 12.08 | | | | | | 89,034 | | | |
Genius Group
|
| | | | n/a | | | | | | n/a | | |
2020
|
| | | $ | 5.81 | | | | | | 73,428 | | | |
Genius Group
|
| | | | n/a | | | | | | n/a | | |
| | |
For the Six-Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Campus Revenue
– Sale of goods |
| | | $ | 807,657 | | | | | $ | 437,450 | | |
– Rendering of services
|
| | | | 469,132 | | | | | | 701,967 | | |
Campus sub-total
|
| | | | 1,276,789 | | | | | | 1,139,417 | | |
Education Revenue
|
| | | | | | | | | | | | |
– Digital
|
| | | | 5,074,942 | | | | | | 3,068,511 | | |
– In-Person
|
| | | | — | | | | | | 329,908 | | |
Education sub-total
|
| | | | 5,074,942 | | | | | | 3,398,419 | | |
Total Revenue
|
| | | $ | 6,351,731 | | | | | $ | 4,537,836 | | |
| | |
For the Six-Months Ended June 30,
|
| |||||||||
| | |
2021
As restated |
| |
2020
As restated |
| ||||||
Costs
|
| | | $ | 3,997,586 | | | | | $ | 1,354,281 | | |
Depreciation and amortization
|
| | | | 711,286 | | | | | | 939,996 | | |
As restated
|
| | |
|
4,708,872
|
| | | |
|
2,294,277
|
| |
| | |
Six-Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Consulting and professional services
|
| | | | 180,123 | | | | | | 136,783 | | |
Marketing
|
| | | | 56,125 | | | | | | 200,323 | | |
Rent expense
|
| | | | 59,913 | | | | | | 10,733 | | |
Repairs and maintenance
|
| | | | 30,283 | | | | | | 32,558 | | |
Salaries, wages, bonuses and other benefits
|
| | | | 2,076,401 | | | | | | 1,690,599 | | |
Travel
|
| | | | 3,893 | | | | | | 252,470 | | |
Utilities
|
| | | | 95,568 | | | | | | 51,505 | | |
Other
|
| | | | 278,126 | | | | | | 317,695 | | |
Development charges
|
| | | | 192,441 | | | | | | 180,668 | | |
Stock-based compensation
|
| | | | 121,408 | | | | | | 158,799 | | |
Provision for doubtful debts
|
| | | | (38,949) | | | | | | — | | |
Total general and administrative expenses
|
| | | $ | 3,055,332 | | | | | $ | 3,032,133 | | |
| | |
For the Six-Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Interest income
Bank and other cash |
| | | $ | 7,825 | | | | | $ | 37,003 | | |
Interest expense/finance costs
Lease liabilities |
| | | | (68,435) | | | | | | (66,728) | | |
Other interest paid – loans
|
| | | | (122,173) | | | | | | (290,304) | | |
Amortization of debt discount
|
| | | | — | | | | | | (322,947) | | |
Total interest expense/ finance costs
|
| | | | (190,608) | | | | | | (679,979) | | |
Total interest (expense) income, net
|
| | | $ | (182,783) | | | | | $ | (642,976) | | |
| | |
Six-Months Ended June 30,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Basic loss per share from continuing operations
|
| | | $ | (0.10) | | | | | $ | (0.13) | | |
The calculation of basic and diluted earnings per share has been based on the following loss attributable to ordinary shareholders and the weighted average number of ordinary shares
|
| | | | | | | | | | | | |
Net Loss
|
| | | $ | (1,629,167) | | | | | $ | (1,280,178) | | |
Non-controlling Interest
|
| | | | 33,897 | | | | | | — | | |
Loss attributable to ordinary shareholders
|
| | | $ | (1,595,270) | | | | | $ | (1,280,178) | | |
Weighted average number of ordinary shares: | | | | | | | | | | | | | |
Issued at the beginning of the period
|
| | | | 16,155,810 | | | | | | 9,742,998 | | |
Issued in current period
|
| | | | — | | | | | | 88,686 | | |
Issued at the end of the period
|
| | | | 16,155,810 | | | | | | 9,831,684 | | |
Weighted average
|
| | | | 16,155,810 | | | | | | 9,798,478 | | |
Diluted earnings (loss) per share:
|
| | | | | | | | | | | | |
There are no dilutive instruments and therefore diluted earnings per share is the same as basic earnings per share Instruments that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share because they are antidilutive:
|
| | | ||||||||||
Share Options
|
| | | | 7,138,140 | | | | | | 377,928 | | |
| | |
IFRS 13
Fair value hierarchy level |
| |
IFRS 9 Classification
|
| |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
FINANCIAL ASSETS | | | | | | | | | | | | | | | | | | | |
Financial assets | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | | |
Amortized cost
|
| | | $ | 2,143,358 | | | | | $ | 2,273,151 | | |
Accounts receivable
|
| | | | |
Amortized cost
|
| | | | 1,006,162 | | | | | | 948,341 | | |
Due from related parties
|
| | | | |
Amortized cost
|
| | | | 52,360 | | | | | | 53,851 | | |
Investments at fair value
|
| |
3
|
| |
Fair value through profit or loss
|
| | | | 28,566 | | | | | | 29,076 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | |
Amortized cost
|
| | | | 1,198,561 | | | | | | 821,820 | | |
Derivative liability
|
| |
2
|
| |
Fair value through profit or loss
|
| | | | 250,000 | | | | | | 250,000 | | |
Loans payable
|
| | | | |
Amortized cost
|
| | | | 186,377 | | | | | | 223,240 | | |
Loans payable, related parties
|
| | | | |
Amortized cost
|
| | | | 384,016 | | | | | | 589,502 | | |
Lease liabilities
|
| | | | |
Amortized cost
|
| | | | 1,620,013 | | | | | | 1,853,064 | | |
Convertible debt obligations,
net |
| | | | |
Amortized cost
|
| | | | 1,336,319 | | | | | | 1,531,639 | | |
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 Six-Months Ended June 30,
|
| |||||||||||||||||||||||||||||||||
|
2021
|
| |
2020
|
| |||||||||||||||||||||||||||||||||||
|
Salary
|
| |
Stock-based
|
| |
Total
|
| |
Salary
|
| |
Stock-based
|
| |
Total
|
| |||||||||||||||||||||||
Roger James Hamilton
|
| | Chief Executive Officer | | | | | 342,602 | | | | | | 47,961 | | | | | | 390,563 | | | | | | 231,618 | | | | | | 51,612 | | | | | | 283,230 | | |
Michelle Clarke
|
| |
Chief Marketing Officer
|
| | | | 47,119 | | | | | | 6,596 | | | | | | 53,715 | | | | | | 41,618 | | | | | | 9,277 | | | | | | 50,895 | | |
Suraj Naik
|
| |
Chief Technology Officer
|
| | | | 45,387 | | | | | | 6,354 | | | | | | 51,741 | | | | | | 33,860 | | | | | | 6,637 | | | | | | 40,497 | | |
Sandra Morrell
|
| | Chief Operating Office | | | | | 20,635 | | | | | | 2,889 | | | | | | 23,524 | | | | | | 75,720 | | | | | | 15,142 | | | | | | 90,862 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name of the Director
|
| |
Job Title
|
| |
For the Six-Months Ended June 30,
|
| |||||||||||||||||||||||||||||||||
|
2021
|
| |
2020
|
| |||||||||||||||||||||||||||||||||||
|
Salary
|
| |
Stock-based
|
| |
Total
|
| |
Salary
|
| |
Stock-based
|
| |
Total
|
| |||||||||||||||||||||||
Patrick Grove
|
| | Director | | | | | 4,412 | | | | | | — | | | | | | 4,412 | | | | | | 4,353 | | | | | | 17,435 | | | | | | 21,788 | | |
Nic Lim
|
| | Director | | | | | 4,412 | | | | | | — | | | | | | 4,412 | | | | | | 3,482 | | | | | | 18,307 | | | | | | 21,789 | | |
Anna Gong
|
| | Director | | | | | 4,412 | | | | | | — | | | | | | 4,412 | | | | | | 4,353 | | | | | | 17,435 | | | | | | 21,788 | | |
Jeremy Harris
|
| | Director | | | | | 44,280 | | | | | | 6,199 | | | | | | 50,479 | | | | | | 19,826 | | | | | | 4,289 | | | | | | 24,115 | | |
Dennis DuBois
|
| | Director | | | | | 12,000 | | | | | | — | | | | | | 12,000 | | | | | | 10,200 | | | | | | 1,796 | | | | | | 11,996 | | |
Lisa Bovio
|
| | Director | | | | | 12,000 | | | | | | — | | | | | | 12,000 | | | | | | 10,200 | | | | | | 1,796 | | | | | | 11,996 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Six-Months Ended June 30,
|
| |||||||||||||||||||||||||||||||||
|
2021
|
| |
2020
|
| ||||||||||||||||||||||||||||||||
|
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||||
Revenues
|
| | | $ | 5,074,942 | | | | | $ | 1,276,789 | | | | | $ | 6,351,731 | | | | | $ | 3,398,419 | | | | | $ | 1,139,417 | | | | | $ | 4,537,836 | | |
Depreciation and Amortization, as restated
|
| | | $ | 196,978 | | | | | $ | 596,301 | | | | | $ | 793,279 | | | | | $ | 162,847 | | | | | $ | 815,735 | | | | | $ | 978,582 | | |
(Loss) income from Operations, as restated
|
| | | $ | (404,643) | | | | | $ | (1,088,780) | | | | | $ | (1,493,423) | | | | | $ | 598,072 | | | | | $ | (1,364,649) | | | | | $ | (766,577) | | |
Net (Loss) income, as restated
|
| | | $ | (475,154) | | | | | $ | (1,154,013) | | | | | $ | (1,629,167) | | | | | $ | 613,458 | | | | | $ | (1,893,636) | | | | | $ | (1,280,178) | | |
Interest Expense, net
|
| | | $ | (55,453) | | | | | $ | (127,330) | | | | | $ | (182,783) | | | | | $ | (18,377) | | | | | $ | (624,599) | | | | | $ | (642,976) | | |
| | |
Education
|
| |
For the
Period Ended June 30, 2021 Campus |
| |
Total
|
| |
Education
|
| |
For the
Year Ended December 31, 2020 Campus |
| |
Total
|
| ||||||||||||||||||
Capital Expenditures
|
| | | $ | 386,284 | | | | | $ | 167,453 | | | | | $ | 553,737 | | | | | $ | 437,764 | | | | | $ | 233,823 | | | | | $ | 671,587 | | |
Total Property and Equipment, net, as restated
|
| | | $ | 10,137 | | | | | $ | 7,493,573 | | | | | $ | 7,503,710 | | | | | $ | 10,881 | | | | | $ | 7,586,109 | | | | | $ | 7,596,990 | | |
Total Assets, as restated
|
| | | $ | 2,967,135 | | | | | $ | 15,197,236 | | | | | $ | 18,164,371 | | | | | $ | 3,336,241 | | | | | $ | 13,621,472 | | | | | $ | 16,957,713 | | |
Total Liabilities, as restated
|
| | | $ | 6,337,423 | | | | | $ | 2,802,082 | | | | | $ | 9,139,505 | | | | | $ | 5,852,323 | | | | | $ | 3,399,301 | | | | | $ | 9,251,624 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
For the Six-Months Ended June 30,
|
| |||||||||||||||||||||||||||||||||
|
2021
|
| |
2020
|
| ||||||||||||||||||||||||||||||||
|
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||||
Europe / Middle East / Africa
|
| | | $ | 1,877,729 | | | | | $ | 693,107 | | | | | $ | 2,570,836 | | | | | $ | 1,257,415 | | | | | $ | 618,534 | | | | | $ | 1,875,949 | | |
Asia / Pacific
|
| | | | 1,776,230 | | | | | | 583,682 | | | | | | 2,359,912 | | | | | | 1,189,447 | | | | | | 520,883 | | | | | | 1,710,330 | | |
North America / South America
|
| | | | 1,420,984 | | | | | | — | | | | | | 1,420,984 | | | | | | 951,557 | | | | | | — | | | | | | 951,557 | | |
| | | | $ | 5,074,943 | | | | | $ | 1,276,789 | | | | | $ | 6,351,732 | | | | | $ | 3,398,419 | | | | | $ | 1,139,417 | | | | | $ | 4,537,836 | | |
| | |
As of June 30, 2021
|
| |
As of December 31, 2020
|
| ||||||||||||||||||||||||||||||
| | |
AS RESTATED
|
| |||||||||||||||||||||||||||||||||
| | |
Education
|
| |
Campus
|
| |
Total
|
| |
Education
|
| |
Campus
|
| |
Total
|
| ||||||||||||||||||
Europe / Middle East / Africa
|
| | | $ | — | | | | | $ | 6,564,715 | | | | | $ | 6,564,715 | | | | | $ | 802 | | | | | $ | 503,853 | | | | | $ | 504,655 | | |
Asia / Pacific
|
| | | | 1,883,985 | | | | | | 3,403,130 | | | | | | 5,287,115 | | | | | | 499,772 | | | | | | 10,500,387 | | | | | | 11,000,159 | | |
North America/South America
|
| | | | — | | | | | | — | | | | | | — | | | | | | 516,296 | | | | | | 0 | | | | | | 516,296 | | |
| | | | $ | 1,883,985 | | | | | $ | 9,967,845 | | | | | $ | 11,851,830 | | | | | $ | 1,016,870 | | | | | $ | 11,004,240 | | | | | $ | 12,021,110 | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Statement of financial position | | | | | | | | | | | | | | | | | | | |
As of June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Property and equipment
|
| | | | 7,157,566 | | | | | | 346,144 | | | | | | 7,503,710 | | |
Goodwill
|
| | | | 18,647,498 | | | | | | (17,437,545) | | | | | | 1,209,953 | | |
Intangible assets
|
| | | | 20,395,439 | | | | | | (19,209,620) | | | | | | 1,185,819 | | |
Total Assets
|
| | | | 54,465,392 | | | | | | (36,301,021) | | | | | | 18,164,371 | | |
Deferred tax liability
|
| | | | 3,966,798 | | | | | | (3,138,412) | | | | | | 828,386 | | |
Total Liabilities
|
| | | | 12,277,917 | | | | | | (3,138,412) | | | | | | 9,139,505 | | |
Reserves
|
| | | | 1,856,293 | | | | | | (33,802,744) | | | | | | (31,946,451) | | |
Accumulated deficit
|
| | | | (11,391,385) | | | | | | 628,267 | | | | | | (10,763,118) | | |
Capital and reserves attributable to owners of Genius Group Ltd.
|
| | | | 39,315,418 | | | | | | (33,174,477) | | | | | | 6,140,941 | | |
Non-controlling interest
|
| | | | 2,872,057 | | | | | | 11,868 | | | | | | 2,883,925 | | |
Total Stockholder’s Equity
|
| | | | 42,187,475 | | | | | | (33,162,609) | | | | | | 9,024,866 | | |
Total Liabilities and Stockholder’s Equity
|
| | | | 54,465,392 | | | | | | (36,301,021) | | | | | | 18,164,371 | | |
Statement of profit or loss and other comprehensive income | | | | | | | | | | | | | | | | | | | |
For the six months ended June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Cost of Revenue
|
| | | | (5,137,481) | | | | | | 428,609 | | | | | | (4,708,872) | | |
Gross profit
|
| | | | 1,214,250 | | | | | | 428,609 | | | | | | 1,642,859 | | |
Loss from Operations
|
| | | | (1,922,032) | | | | | | 428,609 | | | | | | (1,493,423) | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Loss Before Income Tax
|
| | | | (2,104,815) | | | | | | 428,609 | | | | | | (1,676,206) | | |
Income tax benefit (expense)
|
| | | | 200,148 | | | | | | (153,109) | | | | | | 47,039 | | |
Net loss
|
| | | | (1,904,667) | | | | | | 275,500 | | | | | | (1,629,167) | | |
Non-controlling interest
|
| | | | (33,773) | | | | | | 5,999 | | | | | | (27,774) | | |
Total Comprehensive Income (loss)
|
| | | | (1,833,956) | | | | | | 275,500 | | | | | | (1,558,456) | | |
Basic and diluted earnings (loss) per share from continuing operations
|
| | | | (0.12) | | | | | | 0.02 | | | | | | (0.10) | | |
For the six months ended June 30, 2020 | | | | | | | | | | | | | | | | | | | |
Cost of Revenue
|
| | | | (2,444,277) | | | | | | 150,000 | | | | | | (2,294,277) | | |
Gross profit
|
| | | | 2,093,559 | | | | | | 150,000 | | | | | | 2,243,559 | | |
Loss from Operations
|
| | | | (916,577) | | | | | | 150,000 | | | | | | (766,577) | | |
Loss Before Income Tax
|
| | | | (1,559,553) | | | | | | 150,000 | | | | | | (1,409,553) | | |
Income tax benefit (expense)
|
| | | | 154,875 | | | | | | (25,500) | | | | | | 129,375 | | |
Net loss
|
| | | | (1,404,678) | | | | | | 124,500 | | | | | | (1,280,178) | | |
Total Comprehensive Income (loss)
|
| | | | (1,929,603) | | | | | | 124,500 | | | | | | (1,805,103) | | |
Basic and diluted earnings (loss) per share from continuing operations
|
| | | | (0.14) | | | | | | 0.01 | | | | | | (0.13) | | |
Statement of changes in equity | | | | | | | | | | | | | | | | | | | |
For the six-months ended June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Reserves
|
| | | | 1,856,293) | | | | | | (33,802,744) | | | | | | (31,946,451) | | |
Accumulated deficit
|
| | | | (11,391,385) | | | | | | 628,267 | | | | | | (10,763,118) | | |
Non-controlling interest
|
| | | | 2,872,057 | | | | | | 11,868 | | | | | | 2,883,925 | | |
Total Equity
|
| | | | 42,187,475 | | | | | | (33,162,609) | | | | | | 9,024,866 | | |
Statement of cash flows | | | | | | | | | | | | | | | | | | | |
For the six-months ended June 30, 2021 | | | | | | | | | | | | | | | | | | | |
Loss before income tax
|
| | | | (1,904,667) | | | | | | 275,500 | | | | | | (1,629,167) | | |
Amortization of deferred tax liability
|
| | | | (105,650) | | | | | | 81,281 | | | | | | (24,369) | | |
Deferred tax liability
|
| | | | (94,498) | | | | | | 71,828 | | | | | | (22,670) | | |
Depreciation and amortization
|
| | | | 1,221,888 | | | | | | (428,609) | | | | | | 793,279 | | |
Total adjustments to reconciled net loss to net cash used in operating activities
|
| | | | 371,317 | | | | | | (275,500) | | | | | | 95,817 | | |
For the six-months ended June 30, 2020 | | | | | | | | | | | | | | | | | | | |
Loss before income tax
|
| | | | (1,404,678) | | | | | | 124,500 | | | | | | (1,280,178) | | |
Amortization of deferred tax liability
|
| | | | (78,973) | | | | | | 25,500 | | | | | | (53,473) | | |
Depreciation and amortization
|
| | | | 1,128,582 | | | | | | (150,000) | | | | | | 978,582 | | |
Total adjustments to reconciled net loss to net cash used in operating activities
|
| | | | (266,071) | | | | | | (124,500) | | | | | | (390,571) | | |
| | | | | | | | | | | | | | | | | | | |
| | |
As previously
reported $ |
| |
Adjustments
$ |
| |
Restated
$ |
| |||||||||
Statement of financial position | | | | | | | | | | | | | | | | | | | |
As of December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Property and equipment
|
| | | | 7,250,846 | | | | | | 346,144 | | | | | | 7,596,990 | | |
Goodwill
|
| | | | 18,647,498 | | | | | | (17,437,545) | | | | | | 1,209,953 | | |
Intangible assets
|
| | | | 20,741,249 | | | | | | (19,736,335) | | | | | | 1,004,914 | | |
Total Assets
|
| | | | 53,785,449 | | | | | | (36,827,736) | | | | | | 16,957,713 | | |
Deferred tax liability
|
| | | | 4,166,946 | | | | | | (3,291,521) | | | | | | 875,425 | | |
Total Liabilities
|
| | | | 12,543,145 | | | | | | (3,291,521) | | | | | | 9,251,624 | | |
Reserves
|
| | | | 1,788,051 | | | | | | (33,900,850) | | | | | | (32,112,799) | | |
Non-controlling interest
|
| | | | 251,285 | | | | | | 5,869 | | | | | | 257,154 | | |
Accumulated deficit
|
| | | | (9,526,614) | | | | | | 358,766 | | | | | | (9,167,848) | | |
Capital and reserves attributable to owners of Genius Group Ltd.
|
| | | | 40,991,019 | | | | | | (33,542,084) | | | | | | 7,448,935 | | |
Total Stockholder’s Equity
|
| | | | 41,242,304 | | | | | | (33,536,215) | | | | | | 7,706,089 | | |
Total Liabilities and Stockholder’s Equity
|
| | | | 53,785,449 | | | | | | (36,827,736) | | | | | | 16,957,713 | | |
Statement of profit or loss and other comprehensive income | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Cost of Revenue
|
| | | | (4,703,841) | | | | | | 569,733 | | | | | | (4,134,108) | | |
Gross profit
|
| | | | 2,929,935 | | | | | | 569,733 | | | | | | 3,499,668 | | |
Loss from Operations
|
| | | | (3,250,582) | | | | | | 569,733 | | | | | | (2,680,849) | | |
Loss Before Income Tax
|
| | | | (3,692,802) | | | | | | 569,733 | | | | | | (3,123,069) | | |
Income tax benefit (expense)
|
| | | | 216,086 | | | | | | (285,331) | | | | | | (69,245) | | |
Net loss
|
| | | | (3,476,716) | | | | | | 284,402 | | | | | | (3,192,314) | | |
Non-controlling interest
|
| | | | (63,065) | | | | | | 5,869 | | | | | | (57,196) | | |
Total Comprehensive loss
|
| | | | (1,347,635) | | | | | | 284,402 | | | | | | (1,063,233) | | |
Basic and diluted earnings loss per share from continuing operations
|
| | | | (0.27) | | | | | | 0.02 | | | | | | (0.25) | | |
Statement of changes in equity | | | | | | | | | | | | | | | | | | | |
For the year ended December 31, 2020 | | | | | | | | | | | | | | | | | | | |
Reserves
|
| | | | 1,788,051 | | | | | | (33,900,850) | | | | | | (32,112,799) | | |
Accumulated deficit
|
| | | | (9,526,614) | | | | | | 358,766 | | | | | | (9,167,848) | | |
Non-controlling interest
|
| | | | 251,285 | | | | | | 5,869 | | | | | | 257,154 | | |
Total Equity
|
| | | | 41,242,304 | | | | | | (33,536,215) | | | | | | 7,706,089 | | |
| | | | | | | | | | | | | | | | | | | |
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) |
| |
February 25, 2022
|
|
|
/s/ Michelle Clarke
Michelle Clarke
|
| | Chief Marketing Officer, Director | | |
February 25, 2022
|
|
|
/s/ Suraj Naik
Suraj Naik
|
| | Chief Technology Officer, Director | | |
February 25, 2022
|
|
|
/s/ Jeremy Harris
Jeremy Harris
|
| |
Chief Financial Officer
(principal financial and accounting officer) |
| |
February 25, 2022
|
|
|
/s/ Sandra Morrell
Sandra Morrell
|
| | Director | | |
February 25, 2022
|
|
|
/s/ Patrick Grove
Patrick Grove
|
| | Director | | |
February 25, 2022
|
|
|
/s/ Nic Lim
Nic Lim
|
| | Director | | |
February 25, 2022
|
|
|
/s/ Anna Gong
Anna Gong
|
| | Director | | |
February 25, 2022
|
|
|
/s/ Richard J. Berman
Richard J. Berman
|
| | Director | | |
February 25, 2022
|
|
|
Exhibit
Number |
| |
Description of Document
|
|
| 99.6** | | | University of Antelope Valley, Inc. Interim Financial Statements for the Six Months Ended June 30, 2020 | |
| 99.7** | | | University of Antelope Valley, Inc. Interim Financial Statements for the Six Months Ended June 30, 2021 | |
| 99.8** | | | | |
| 99.9** | | | | |
| 99.10** | | | | |
| 99.11** | | | | |
| 99.12** | | | Mastermind Principles Limited Audited Consolidated Financial Statements for the Year Ended December 31, 2019 | |
| 99.13** | | | Mastermind Principles Limited Audited Consolidated Financial Statements for the Year Ended December 31, 2020 | |
| 99.14** | | | Mastermind Principles Limited Consolidated Financial Statements as of June 30, for the Six Months Ended June 30, 2020 | |
| 99.15** | | | | |
| 99.16** | | | | |
| 107** | | | |
Exhibit 1.1
UNDERWRITING AGREEMENT
between
GENIUS GROUP LIMITED
and
THINKEQUITY LLC
as Representative of the Several Underwriters
GENIUS GROUP LIMITED
UNDERWRITING AGREEMENT
New York, New York
[•], 2022
ThinkEquity LLC
As Representative of the several Underwriters named on Schedule 1 attached
hereto
17 State Street, 22nd Floor
New York, NY 10004
Ladies and Gentlemen:
The undersigned, Genius Group Limited, a public limited company formed under the laws of Singapore (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries or affiliates of Genius Group Limited, the “Company”), hereby confirms its agreement (this “Agreement”) with ThinkEquity LLC (hereinafter referred to as “you” (including its correlatives) or the “Representative”) and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”) as follows:
1. | Purchase and Sale of Shares. |
1.1 Firm Shares.
1.1.1. Nature and Purchase of Firm Shares.
(i) On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the several Underwriters, an aggregate of [•] shares (“Firm Shares”) of the Company’s ordinary shares, no par value per share (the “Ordinary Shares”).
(ii) The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $[•] per share (92.5% of the per Firm Share offering price). The Firm Shares are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Shares Payment and Delivery.
(i) Delivery and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the second (2nd) Business Day following the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) (or the third (3rd) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Dentons US LLP, 1221 Avenue of the Americas, New York, New York 10020 (“Representative Counsel”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.”
(ii) Payment for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term “Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.
1.2 Over-allotment Option.
1.2.1. Option Shares. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Company hereby grants to the Underwriters an option to purchase up to [•] additional Ordinary Shares, representing fifteen percent (15%) of the Firm Shares sold in the offering, from the Company (the “Over-allotment Option”). Such [•] additional Ordinary Shares, the net proceeds of which will be deposited with the Company’s account, are hereinafter referred to as “Option Shares.” The purchase price to be paid per Option Share shall be equal to the price per Firm Share set forth in Section 1.1.1 hereof. The Firm Shares and the Option Shares are hereinafter referred to together as the “Public Securities.” The offering and sale of the Public Securities is hereinafter referred to as the “Offering.”
1.2.2. Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within forty-five (45) days after the Closing Date. The Underwriters shall not be under any obligation to purchase any Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the “Option Closing Date”), which shall not be later than one (1) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Shares, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Option Shares specified in such notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Option Shares then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.
1.2.3. Payment and Delivery. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Underwriters) representing the Option Shares (or through the facilities of DTC) for the account of the Underwriters. The Option Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least one (1) full Business Day prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative for applicable Option Shares.
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1.3 Representative’s Warrants.
1.3.1. Purchase Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date and Option Closing Date, as applicable, a warrant (“Representative’s Warrant”) for the purchase of an aggregate number of Ordinary Shares representing 5% of the Public Securities, for an aggregate purchase price of $100.00. The Representative’s Warrant agreement, in the form attached hereto as Exhibit A (the “Representative’s Warrant Agreement”), shall be exercisable, in whole or in part, commencing on a date which is one hundred eighty (180) days after the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price per Ordinary Share of $[•], which is equal to 125% of the initial public offering price of the Firm Shares. The Representative’s Warrant Agreement and the Ordinary Shares issuable upon exercise thereof are hereinafter referred to together as the “Representative’s Securities.” The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant Agreement and the underlying Ordinary Shares during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant Agreement, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.
1.3.2. Delivery. Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may request.
2. Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing of Registration Statement.
2.1.1. Pursuant to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement, and an amendment or amendments thereto, on Form F-1 (File No. 333-257700), including any related prospectus or prospectuses, for the registration of the Public Securities and the Representative’s Securities under the Securities Act of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule 430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been declared effective by the Commission on the date hereof.
Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary Prospectus.” The Preliminary Prospectus, subject to completion, dated [•], 2022, that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.
- 3 -
“Applicable Time” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
“Pricing Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (File Number 001-[•]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Ordinary Shares. The registration of the Ordinary Shares under the Exchange Act has been declared effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Ordinary Shares under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.
2.2 Stock Exchange Listing. The Ordinary Shares have been approved for listing on the NYSE American (the “Exchange”) under the symbol “GNS”, and the Company has taken no action designed to, or likely to have the effect of, delisting the Ordinary Shares from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.3 No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.
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2.4 Disclosures in Registration Statement.
2.4.1. Compliance with Securities Act and 10b-5 Representation.
(i) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus: the disclosures under the headings “Discretionary Accounts,” “Price Stabilization, Short Positions and Penalty Bids,” and “Electronic Offer, Sale and Distribution of Securities” (the “Underwriters’ Information”); and
(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations.
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2.4.3. Prior Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.5 Changes After Dates in Registration Statement.
2.5.1. No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital shares.
2.6 Independent Accountants. To the knowledge of the Company, Marcum LLP, Accountants and Advisors (the “Auditor”), Lightheart, Sanders and Associates, Certified Public Accountants, and SKS Bailey Group Ltd., Certified Public Accountants (together, the “Acquisition Auditors”), whose reports are filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, are each an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, and the Acquisition Auditors have not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
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2.7 Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with International Financial Reporting Standards (“IFRS”), consistently applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by IFRS); and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. Except as included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-IFRS financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital shares, (c) there has not been any change in the share capital of the Company or any of its Subsidiaries, or, other than in the course of business, any grants under any share compensation plan, and (d) there has not been any material adverse change in the Company’s long-term or short-term debt.
2.8 Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted share capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no share options, warrants, or other rights to purchase or otherwise acquire any Ordinary Shares of the Company or any security convertible or exercisable into Ordinary Shares of the Company, or any contracts or commitments to issue or sell Ordinary Shares or any such options, warrants, rights or convertible securities.
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2.9 Valid Issuance of Securities, etc.
2.9.1. Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized Ordinary Shares conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding Ordinary Shares were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements.
2.9.2. Securities Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public Securities and Representative’s Securities has been duly and validly taken. The Public Securities and Representative’s Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Representative’s Warrant Agreement has been duly and validly taken; the Ordinary Shares issuable upon exercise of the Representative’s Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when paid for and issued in accordance with the Representative’s Warrant and the Representative’s Warrant Agreement, such Ordinary Shares will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; and such Ordinary Shares are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.
2.10 Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in a registration statement to be filed by the Company.
2.11 Validity and Binding Effect of Agreements. This Agreement and the Representative’s Warrant Agreement have been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
2.12 No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Representative’s Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the provisions of the Company’s Constitution (as the same may be amended or restated from time to time, the “Charter”); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof.
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2.13 No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its Charter, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity.
2.14 Corporate Power; Licenses; Consents.
2.14.1. Conduct of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.14.2. Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this Agreement and the Representative’s Warrant Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.15 D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”) completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”) as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.24 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.
2.16 Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus or in connection with the Company’s listing application for the listing of the Public Securities on the Exchange.
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2.17 Good Standing. The Company has been duly incorporated and is validly existing as a corporation under the laws of Singapore as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.18 Insurance. The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks which the Company believes are adequate, including, but not limited to, directors and officers insurance coverage at least equal to $3,000,000 and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.
2.19 Transactions Affecting Disclosure to FINRA.
2.19.1. Finder’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.19.2. Payments Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.19.3. Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
2.19.4. FINRA Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company's securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
2.19.5. Information. All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
2.20 Foreign Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
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2.21 Compliance with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.22 Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.23 Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.24 Lock-Up Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and each owner of the Company’s outstanding Ordinary Shares (or securities convertible or exercisable into Ordinary Shares) (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.25 Subsidiaries. All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not result in a Material Adverse Change. The Company’s ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.26 Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required.
2.27 Board of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.
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2.28 Sarbanes-Oxley Compliance.
2.28.1. Disclosure Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act filings and other public disclosure documents.
2.28.2. Compliance. The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act then applicable to it.
2.29 Accounting Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’ ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
2.30 No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.31 No Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent.
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2.32 Intellectual Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons..
2.33 Taxes. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes” means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
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2.34 ERISA Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA, as applicable. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
2.35 Compliance with Laws. The Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or notice from any other governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”);(C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any governmental authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.
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2.36 Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
2.37 Real Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or its Subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.
2.38 Contracts Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described as required.
2.39 Loans to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.40 [Reserved].
2.41 Industry Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.42 [Reserved].
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2.43 Emerging Growth Company. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly in or through any Person authorized to act on its behalf in any Testing-the Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
2.44 Testing-the-Waters Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters Communications with the written consent of the Representative and with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company confirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule 2-C hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
2.45 Electronic Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities Act Regulations) is required in connection with the Offering.
2.46 Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Ordinary Shares to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
2.47 Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its Subsidiaries as currently conducted, and, to the knowledge of the Company, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its Subsidiaries have implemented commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; (iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any data related to an identified person’s health or sexual orientation. Except as disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same. The Company and its Subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
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2.48 Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in material compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries are in compliance with the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have, to the knowledge of the Company, at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
2.49 Foreign Private Issuer. From the time of initial confidential submission of the Registration Statement to the Commission (or if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.
3. | Covenants of the Company. The Company covenants and agrees as follows: |
3.1 Amendments to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.
3.2 Federal Securities Laws.
3.2.1. Compliance. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
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3.2.2. Continued Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Exchange Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its best efforts to maintain the registration of the Ordinary Shares under the Exchange Act. The Company shall not deregister the Ordinary Shares under the Exchange Act without the prior written consent of the Representative.
3.2.4. Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
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3.2.5. Testing-the-Waters Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
3.3 Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.4 Delivery to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.5 Effectiveness and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
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3.6 Review of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 Listing. The Company shall use its best efforts to maintain the listing of the Ordinary Shares (including the Public Securities) on the Exchange for at least three years from the date of this Agreement.
3.8 Financial Public Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably acceptable to the Representative and the Company, which shall initially be Red Chip Companies, Inc., which firm shall be experienced in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the Effective Date.
3.9 Reports to the Representative.
3.9.1. Periodic Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2. Transfer Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Vstock Transfer LLC is acceptable to the Representative to act as Transfer Agent for the Ordinary Shares.
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3.9.3. Trading Reports. During such time as the Public Securities are listed on the Exchange, the Company shall provide to the Representative, at the Company’s expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative shall reasonably request.
3.10 Payment of Expenses
3.10.1. General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Ordinary Shares to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Public Securities on the Exchange and such other stock exchanges as the Company and the Representative together determine; (d) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount not to exceed $15,000 in the aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification of the Public Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees); (f) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and delivering certificates representing the Public Securities; (j) fees and expenses of the transfer agent for the Ordinary Shares; (k) share transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (l) to the extent approved by the Company in writing, the costs associated with post-Closing advertising the Offering in the national editions of the Wall Street Journal and New York Times; (m) the costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request, in an amount not to exceed $3,000; (n) the fees and expenses of the Company’s accountants; (o) the fees and expenses of the Company’s legal counsel and other agents and representatives; (p) fees and expenses of the Representative’s legal counsel not to exceed $125,000; (q) the $29,500 cost associated with the Underwriter’s use of Ipreo’s book-building, prospectus tracking and compliance software for the Offering; (r) $10,000 for data services and communications expenses; and (s) up to $20,000 of the Underwriters’ actual accountable “road show”, market making and trading, and clearing firm settlement expenses for the Offering; provided that fees and expenses paid to or on behalf of the Underwriters under this Section 3.10.1 shall not exceed $200,000 in the aggregate. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.
3.10.2. Non-accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares (excluding the Option Shares), less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
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3.11 Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
3.12 Delivery of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Securities.
3.14 Internal Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with IFRS and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
3.15 Accountants. As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the Representative.
3.16 FINRA. The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.17 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.
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3.18 Company Lock-Up Agreements.
3.18.1. Restriction on Sales of Shares. The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 180 days after the date of this Agreement (the “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company; (ii) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of the Company or such other securities, in cash or otherwise.
The restrictions contained in this Section 3.18.1 shall not apply to (i) the Ordinary Shares to be sold hereunder, (ii) the issuance by the Company of Ordinary Shares upon the exercise of a share option or warrant or the conversion of a security outstanding on the date hereof, which is disclosed in the Registration Statement, Disclosure Package and Prospectus, provided that such options, warrants, and securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, or (iii) the issuance by the Company of share options or shares of the Company under any equity compensation plan of the Company, provided that in each of (ii) and (iii) above, the underlying shares shall be restricted from sale during the entire Lock-Up Period.
3.18.2. Restriction on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company.
3.19 Release of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in Section 2.24 hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.21 Reporting Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under Rule 463 under the Securities Act Regulations.
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3.22 Emerging Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the Securities Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.
3.23 Foreign Private Issuer Status. The Company shall promptly notify the Representative if the Company ceases to be a Foreign Private Issuer at any time prior to three (3) years from the date of this Agreement.
4. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1 Regulatory Matters.
4.1.1. Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m., Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
4.1.2. FINRA Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange Stock Market Clearance. On the Closing Date, the Company’s Ordinary Shares, including the Firm Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the Company’s Ordinary Shares, including the Option Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance.
4.2 Company Counsel Matters.
4.2.1. Closing Date Opinion of Singapore Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Allen & Gledhill LLP, Singapore counsel to the Company, dated the Closing Date and addressed to the Representative, in form and substance reasonably acceptable to the Representative.
4.2.2. Closing Date Opinion U.S. Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Ellenoff Grossman & Schole LLP, U.S. counsel to the Company, dated the Closing Date and addressed to the Representative, in form and substance reasonably acceptable to the Representative.
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4.2.3. Option Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions having custody of documents respecting the corporate existence or incorporation of the Company, provided that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinion of Allen & Gledhill LLP and Ellenoff Grossman & Schole LLP and any opinion relied upon by Allen & Gledhill LLP and Ellenoff Grossman & Schole LLP shall include a statement to the effect that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.
4.3 Comfort Letters.
4.3.1. Cold Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter from each of the Auditor and the Acquisition Auditors containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to you, dated as of the date of this Agreement.
4.3.2. Bring-down Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from each of the Auditor and the Acquisition Auditors a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that each of the Auditor and the Acquisition Auditors reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date not more than three (3) Business Days prior to the Closing Date or the Option Closing Date, as applicable.
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4.4 Officers’ Certificates.
4.4.1. Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any material adverse change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying: (i) that the Charter is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5 No Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material Adverse Change or development involving a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may result in a Material Adverse Change, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6 Delivery of Agreements.
4.6.1. Lock-Up Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.6.2. Representative’s Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Representative’s Warrant Agreement.
4.7 Additional Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities and the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative Counsel.
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5. | Indemnification. |
5.1 Indemnification of the Underwriters.
5.1.1. General. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a “Claim”), (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each may be amended and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (C) any application or other document or written communication (in this Section 5, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information or (ii) otherwise arising in connection with or allegedly in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified Party for all fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) (collectively, the “Expenses”), and further agrees wherever and whenever possible to advance payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending any Claim.
5.1.2. Procedure. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the approval of such Underwriter Indemnified Party) and payment of actual expenses if an Underwriter Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company, and shall be advanced by the Company. The Company shall not be liable for any settlement of any action effected without its consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.
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5.2 Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.
5.3 Contribution.
5.3.1. Contribution Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering of the Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the Ordinary Shares purchased under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of the Public Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
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5.3.2. Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3.2 are several and not joint.
6. | Default by an Underwriter. |
6.1 Default Not Exceeding 10% of Firm Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to more than 10% of the Firm Shares or Option Shares, you may in your discretion arrange for yourself or for another party or parties to purchase such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
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6.3 Postponement of Closing Date. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of Representative’s Counsel may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Ordinary Shares.
7. | Additional Covenants. |
7.1 Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members of the Board of Directors and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act, with the Exchange Act and with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks to have its Public Securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st) Business Day following the forty-fifth (45th) day after the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.
7.3 Right of First Refusal. Provided that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of eighteen (18) months after the date the Offering is completed, to act as sole and exclusive investment banker, sole and exclusive book-runner, sole and exclusive financial advisor, sole and exclusive underwriter and/or sole and exclusive placement agent, at the Representative’s sole and exclusive discretion, for each and every future public and private equity and debt offering, including all equity linked financings (each, a “Subject Transaction”), during such eighteen (18) month period, of the Company, or any successor to or subsidiary of the Company, on terms and conditions customary to the Representative for such Subject Transactions. For the avoidance of any doubt, the Company shall not retain, engage or solicit any additional investment banker, book-runner, financial advisor, underwriter and/or placement agent in a Subject Transaction without the express written consent of the Representative.
The Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction during the eighteen (18) month period agreed to above.
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8. | Effective Date of this Agreement and Termination Thereof. |
8.1 Effective Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.
8.2 Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.
8.3 Expenses. Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of Representative Counsel) up to $200,000, inclusive of the $35,000 advance for accountable expenses previously paid by the Company to the Representative (the “Advance”) and upon demand the Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).
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8.4 Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.
8.5 Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. | Miscellaneous. |
9.1 Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
ThinkEquity LLC
17 State Street, 22nd Floor
New York, NY 10004
Attn: Mr. Eric Lord, Head of Investment Banking
Fax: (212) 349-2550
with a copy (which shall not constitute notice) to:
Dentons US LLP
1221 Avenue of the Americas
New York, NY 10020
Attn: Rob Condon, Esq.
Fax: (212) 768-6800
If to the Company:
Genius Group Limited
8 Amoy Street, #01-01
Singapore 049950
Attention:
Fax:
with a copy (which shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, NY 10105
Attention: Barry Grossman, Esq.
Fax: (212) 370-7889
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9.2 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and the Representative, dated June 19, 2020, as amended, shall remain in full force and effect.
9.5 Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
9.7 Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.
9.8 Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
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9.9 Waiver of Immunity. With respect to any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled, and with respect to any such suit or proceeding, each party waives any such immunity in any court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such immunity at or in respect of any such suit or proceeding, including, without limitation, any immunity pursuant to the U.S. Foreign Sovereign Immunities Act of 1976, as amended.
9.10 Judgment Currency. The obligation of the Company in respect of any sum due to any Underwriter under this Agreement shall, notwithstanding any judgment in a currency other than U.S. dollars or any other applicable currency (the “Judgment Currency”), not be discharged until the first business day, following receipt by such Underwriter of any sum adjudged to be so due in the Judgment Currency, on which (and only to the extent that) such Underwriter may in accordance with normal banking procedures purchase U.S. dollars or any other applicable currency with the Judgment Currency; if the U.S. dollars or other applicable currency so purchased are less than the sum originally due to such Underwriter hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter against such loss. If the U.S. dollars or other applicable currency so purchased are greater than the sum originally due to such Underwriter hereunder, such Underwriter agrees to pay to the Company an amount equal to the excess of the U.S. dollars or other applicable currency so purchased over the sum originally due to such Underwriter hereunder.
[Signature Page Follows]
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If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours, | ||
GENIUS GROUP LIMITED | ||
By: | ||
Name: | ||
Title: |
Confirmed as of the date first written
above mentioned,
on behalf of itself and as
Representative of the several Underwriters
named on Schedule 1 hereto:
THINKEQUITY LLC
By: | ||
Name: | ||
Title: |
[Signature Page]
Genius Group Limited – Underwriting Agreement
SCHEDULE 1
Underwriter |
Total Number of Firm Shares to be |
Number of Option Shares to be Purchased if the Over-Allotment Option is Fully Exercised | ||
ThinkEquity LLC | ||||
TOTAL |
Sch. 1-1
SCHEDULE 2-A
Pricing Information
Number of Firm Shares: [•]
Number of Option Shares: [•]
Public Offering Price per Share: $[•]
Underwriting Discount per Share: $[•]
Underwriting Non-accountable expense allowance per Share: $[•]
Proceeds to Company per Firm Share (before expenses): $[•]
Proceeds to Company per Option Share (before expenses): $[•]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 2-C
Written Testing-the-Waters Communications
[None.]
Sch. 2-1
SCHEDULE 3
List of Lock-Up Parties
Sch. 3-1
EXHIBIT A
Form of Representative’s Warrant Agreement
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) THINKEQUITY LLC, OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF THINKEQUITY LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS [180 DAYS OR ONE YEAR] FROM THE EFFECTIVE DATE OF THE OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING].
WARRANT TO PURCHASE ORDINARY SHARES
GENIUS GROUP LIMITED
Warrant Shares: _______
Initial Exercise Date: ______, 2022
THIS WARRANT TO PURCHASE ORDINARY SHARES (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ____, 2022 (the “Initial Exercise Date”) and, in accordance with FINRA Rule 5110(g)(8)(A), prior to at 5:00 p.m. (New York time) on the date that is five (5) years following the Effective Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Genius Group Limited, a Singapore corporation (the “Company”), up to ______ Ordinary Shares, no par value per share, of the Company (the “Warrant Shares”), as subject to adjustment hereunder. The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
Ex. A-1
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the United States Securities and Exchange Commission.
“Effective Date” means the effective date of the registration statement on Form F-1 (File No. 333-257700), including any related prospectus or prospectuses, for the registration of the Company’s Ordinary Shares, no par value per share and the Warrant Shares under the Securities Act, that the Company has filed with the Commission.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading Day” means a day on which the Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Ordinary Shares is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of a share of Ordinary Shares for such date (or the nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if Ordinary Shares is not then listed or quoted for trading on the OTCQB or OTCQX and if prices for Ordinary Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Ordinary Shares so reported, or (d) in all other cases, the fair market value of the Ordinary Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Ex. A-2
Section 2. Exercise.
a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The exercise price per Ordinary Share under this Warrant shall be $_______1, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier’s check, at the election of the Holder this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
1 125% of the public offering price per share of Ordinary Shares in the offering.
Ex. A-3
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a “cashless exercise,” the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2(c).
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the second Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
Ex. A-4
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall be required to return any Warrant Shares or Ordinary Shares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as required pursuant to the terms hereof.
Ex. A-5
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
viii. Signature. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Purchase Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Purchase Warrant. No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Purchase Warrant. The Company shall honor exercises of this Purchase Warrant and shall deliver Warrant Shares underlying this Purchase Warrant in accordance with the terms, conditions and time periods set forth herein.
Ex. A-6
e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and its Affiliates shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Share equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Ex. A-7
Section 3. Certain Adjustments.
a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of shares of the Ordinary Shares any capital shares of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any Subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Ordinary Shares or Ordinary Share equivalents, at an effective price per share less than the Exercise Price then in effect.
b) [RESERVED]
c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary Share equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
Ex. A-8
d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable by holders of Ordinary Shares as a result of such Fundamental Transaction for each share of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Ordinary Shares in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Ex. A-9
f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of the Company of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed a notice to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their shares of the Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to provide such notice or any defect therein shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Ex. A-10
Section 4. Transfer of Warrant.
a) Transferability. Pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which this Warrant is being issued, except the transfer of any security:
i. by operation of law or by reason of reorganization of the Company;
ii. to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;
iii. if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;
iv. that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or
v. the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.
Ex. A-11
Subject to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
d) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Registration Rights.
5.1. Demand Registration.
5.1.1 Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Warrants and/or the underlying Warrant Shares, agrees to register, on one occasion, all or any portion of the Warrant Shares underlying the Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 5.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time beginning on the Initial Exercise Date and expiring on the fifth anniversary of the Effective Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.
Ex. A-12
5.1.2 Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 5.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under Section 5.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 5.1.2, the Holder shall be entitled to a demand registration under this Section 5.1.2 on only one (1) occasion and such demand registration right shall terminate on the fifth anniversary of the date of the Underwriting Agreement (as defined below) in accordance with FINRA Rules 5110(g)(8)(B) and 5110(g)(8)(C).
5.2 “Piggy-Back” Registration.
5.2.1 Grant of Right. In addition to the demand right of registration described in Section 5.1 hereof, the Holder shall have the right, for a period of no more than two (2) years from the Initial Exercise Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Warrant Shares which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
Ex. A-13
5.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the two (2) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5.2.2; provided, however, that such registration rights shall terminate on the second anniversary of the Initial Exercise Date.
5.3 General Terms
5.3.1 Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between ThinkEquity LLC as representative of the underwriters set forth therein and the Company, dated as of [___], 2022 (the “Underwriting Agreement”). The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
5.3.2 Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
Ex. A-14
5.3.3 Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.
5.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Warrant Shares and their intended methods of distribution.
5.3.5 Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
5.3.6 Damages. Should the registration or the effectiveness thereof required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.
Ex. A-15
Section 6. Miscellaneous.
a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Warrant Shares.
The Company covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its constitution or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Ex. A-16
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Underwriting Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Underwriting Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
Ex. A-17
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
Ex. A-18
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
GENIUS GROUP LIMITED | ||
By: | ||
Name: | ||
Title: |
Ex. A-19
NOTICE OF EXERCISE
TO: [COMPANY]
_________________________
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. If the Warrant is being exercised via cash exercise, the undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended
[SIGNATURE OF HOLDER]
Name of Investing Entity: _______________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________
Name of Authorized Signatory: ___________________________________________________________
Title of Authorized Signatory: ____________________________________________________________
Date: _______________________________________________________________________________
Ex. A-20
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder’s Signature: ___________________________
Holder’s Address: ___________________________
____________________________
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
Ex. A-21
EXHIBIT B
Lock-Up Agreement
Ex. B-1
EXHIBIT C
Form of Press Release
GENIUS GROUP LIMITED
[Date]
Genius Group Limited (the “Company”) announced today that ThinkEquity LLC, acting as representative for the underwriters in the Company’s recent public offering of _______ shares of the Company’s Ordinary Shares, is [waiving] [releasing] a lock-up restriction with respect to _________ shares of the Company’s Ordinary Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such date.
This press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended.
Ex. C-1
Exhibit 2.17
SIXTH AMENDMENT TO STOCK PURCHASE AGREEMENT
This Sixth Amendment to Stock Purchase Agreement (“Amendment”) is entered into and effective this 25th day of February 2022, by and among: SANDRA JOHNSON AND MARCO JOHNSON, residents of the State of California (collectively, “Seller”), UNIVERSITY OF ANTELOPE VALLEY, INC., a California corporation (“UAV”), GENIUS GROUP LIMITED, a corporation organized under the laws of the Republic of Singapore (“Purchaser”), and UNIVERSITY OF ANTELOPE VALLEY, LLC, a California limited liability company (“UAV Property Company”).
RECITALS
WHEREAS, Seller, UAV, Purchaser and UAV Property Company (solely with respect to Section 1.2(b) of the Purchase Agreement) entered into that certain Stock Purchase Agreement dated as of March 22, 2021, the Amendment to Stock Purchase Agreement dated as of July 29, 2021, the Second Amendment to Stock Purchase Agreement dated September 30, 2021, the Third Amendment to Stock Purchase Agreement dated November 22, 2021, the Fourth Amendment to Stock Purchase Agreement dated December 21, 2021, and the Fifth Amendment to Stock Purchase Agreement dated January 23, 2022 (collectively, “Stock Purchase Agreement”).
WHEREAS, Seller, UAV, Purchaser and UAV Property Company wish to amend the Stock Purchase Agreement by mutual written consent.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual representations, warranties, covenants and premises contained herein, the adequacy and sufficiency of which are hereby acknowledged, the parties to this Amendment, intending to be legally bound, agree as follows:
1. The above Recitals are incorporated as if fully set forth herein.
2. All capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to them in the Stock Purchase Agreement.
3. The Stock Purchase Agreement is hereby amended by mutual written consent of the undersigned parties pursuant to Section 11.11 of the Stock Purchase Agreement as follows:
a. | Section 1.4(b)(i)(B) is amended by changing the date of “February 28, 2022” to “March 31, 2022”; |
b. | Section 4.4(a) is amended by changing the date of “February 28, 2022” to “March 31, 2022”; |
c. | Section 7.7 is amended by changing the date of “February 28, 2022” to “March 31, 2022”; |
d. | Section 9.1(b) is amended by changing the date of “March 4, 2022” to “March 31, 2022”; and |
e. | Section 9.2(b) is amended by changing the date of “March 4, 2022” to “March 31, 2022”. |
4. This Amendment will become effective as of the date first written above (the “Effective Date”). Except as set specifically forth herein, all other terms and conditions of the Stock Purchase Agreement remain in full force and effect. On and after the Effective Date, each reference in the Stock Purchase Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference to the Stock Purchase Agreement in any other agreements, documents, or instruments executed and delivered pursuant to, or in connection with, the Stock Purchase Agreement will mean and be a reference to the Stock Purchase Agreement as amended by this Amendment.
[Remainder of page intentionally left blank.]
The parties hereby have caused this Amendment to be executed and delivered as of the Effective Date.
By: | /s/ Sandra Johnson | |
Sandra Johnson | ||
By: | /s/ Marco Johnson | |
Marco Johnson | ||
University of Antelope Valley, Inc., | ||
a California corporation | ||
By: | /s/ Marco Johnson | |
Name: | Marco Johnson | |
Title: | President and Chief Executive Officer | |
University of Antelope Valley, LLC | ||
a California limited liability company | ||
By: | /s/ Marco Johnson | |
Name: | Marco Johnson | |
Title: | President and Chief Executive Officer | |
Genius Group Limited, | ||
a Singapore corporation | ||
By: | /s/ Roger Hamilton | |
Name: | Roger Hamilton | |
Title: | Founder and Director |
[Signature Page to SPA Sixth Amendment]
Exhibit 5.1
From : Leonard Ching | DID : +65 6890 7730 | |
leonard.ching@allenandgledhill.com | Fax : +65 6302 3111 | |
Our reference | : LCTP/1021009701 | 25 February 2022 |
Your reference | : |
Genius Group Limited
8 Amoy Street #01-01
Singapore 049950
Board of Directors of Genius Group Limited
Dear Sirs
GENIUS GROUP LIMITED (THE “COMPANY”) – REGISTRATION STATEMENT ON FORM F-1 OF THE COMPANY
1. | We have acted as Singapore legal counsel to the Company in connection with the Offering (as defined below) and we refer to the Registration Statement on Form F-1 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “SEC”) in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the public offering (“Offering”) of (a) 7,272,727 ordinary shares in the capital of the Company (“Shares”) being offered by the Company (“New Shares”), (b) up to 1,090,909 Shares which may be purchased by the Underwriter (as defined below) pursuant to an option to purchase additional Shares granted by the Company (the “Over-allotment Option Shares”), pursuant to the Underwriting Agreement (as defined below), and (c) up to 418,181 Shares which may be purchased by the Underwriter (as defined below) pursuant to a warrant to purchase additional Shares granted by the Company (the “Warrant Shares”), pursuant to the Underwriting Agreement (as defined below). We have taken instructions solely from the Company. This opinion is being rendered solely to the Company in connection with the filing of the Registration Statement. |
2. | For the purpose of rendering this opinion, we have examined: |
(a) | the form of underwriting agreement (the “Underwriting Agreement”) filed as Exhibit 1.1 to the Registration Statement, to be entered into between (i) the Company and (ii) ThinkEquity LLC (the “Underwriter”); |
(b) | a copy of the Registration Statement on Form F-1; |
(c) | a copy of the Constitution of the Company; |
(d) | a copy of the Certificate Confirming Incorporation of Company dated 2 July 2020 issued by the Accounting and Corporate Regulatory Authority of Singapore (“ACRA”) confirming that the Company is a public company limited by shares; |
Allen & Gledhill LLP
One Marina Boulevard #28-00 Singapore 018989
Tel: +65 6890 7188 | Fax: +65 6327 3800
allenandgledhill.com
Allen & Gledhill LLP (UEN/Registration No. T07LL0925F) is registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A) with limited liability. A list of the Partners and their professional qualifications may be inspected at the address specified above.
(e) | copies of the resolutions in writing of the board of directors of the Company dated 27 November 2020 and 24 February 2022 (the “Board Resolutions”); |
(f) | copies of the minutes of annual general meeting of the shareholders of the Company dated 29 April 2021 (together with the Board Resolutions, the “Resolutions”); and |
(g) | such other documents as we have considered necessary or desirable in order that we may render this opinion. |
3. | Save as expressly provided in paragraph 5 of this legal opinion, we express no opinion whatsoever with respect to any agreement or document described in paragraph 2 of this legal opinion. |
4. | We have assumed: |
(a) | the correctness of all facts stated in all documents submitted to us; |
(b) | the genuineness of all signatures and seals on all documents and the completeness, and the conformity to original documents, of all copies submitted to us; |
(c) | that copies of each of the Resolutions submitted to us for examination are true, complete and up-to-date copies and have not been modified, supplemented or superseded; |
(d) | that the Resolutions have not been rescinded or modified and they remain in full force and effect and that no other resolution or other action has been taken which may affect the validity of the Resolutions; |
(e) | that the appointment of each of the corporate representatives in relation to the Shareholders’ approval for the allotment and issuance of Shares by the board of directors of the Company had been validly authorised; |
(f) | that the Company was converted into a public company on 31 July 2019 in accordance and in compliance with Section 31(2) of the Companies Act 1967 of Singapore; |
(g) | that, save in respect of certain information relating to the number of existing issued shares of the Company which the Company has on 24 February 2022 informed us is being updated by way of additional filings with ACRA, (i) the information disclosed by the electronic searches made on 23 February 2022 (the “ACRA Searches”) of the electronic records of the ACRA against the Company is true and complete, (ii) such information has not since then been materially altered, and (iii) the ACRA Searches did not fail to disclose any material information which has been delivered for filing but did not appear on the public file at the time of the ACRA Searches; |
2
(h) | that where a document has been submitted to us in draft form, it will be executed in the form of that draft; and |
(i) | the board of directors of the Company or, as the case may be, such person(s) as authorised by the board of directors of the Company shall, before the issue of the New Shares to be issued under the Underwriting Agreement, resolve to approve the allotment and issue of such number of New Shares to be sold to the Underwriter under the Underwriting Agreement at the offering price at which such New Shares will be offered. |
5. | Based upon and subject to the foregoing, and subject to any matters or documents not disclosed to us, we are of the opinion that the New Shares, the Over-allotment Option Shares, and the Warrant Shares to be issued under the final Underwriting Agreement will have been duly authorised by the Company for issuance and subscription thereof in accordance with the provisions of the final Underwriting Agreement and, when issued and delivered by the Company pursuant to the provisions of the final Underwriting Agreement against payment of the full consideration payable for such New Shares, the Over-allotment Option Shares, and the Warrant Shares will be validly issued, fully paid and non-assessable. |
6. | For the purposes of this opinion, we have assumed that the term “non-assessable” in relation to the New Shares, the Over-allotment Option Shares, and the Warrant Shares offered means under Singapore law that holders of such shares, having fully paid up all amounts due on such shares as to the issue price thereon, are under no further personal liability to contribute to the assets or liabilities of the Company in their capacities purely as holders of such shares. |
7. | This opinion relates only to the laws of general application of the Republic of Singapore as published at the date hereof and as currently applied by the courts of the Republic of Singapore, and is given on the basis that it will be governed by and construed in accordance with the laws of the Republic of Singapore. We have made no investigation of, and do not express or imply any views on, the laws of any country other than the Republic of Singapore. In respect of the Registration Statement, we have assumed due compliance with all matters concerning the laws of all other jurisdictions other than the Republic of Singapore. |
8. | We hold ourselves out as only having legal expertise and our statements in this letter are made only to the extent that a law firm practising Singapore law in the Republic of Singapore, having our role in connection with the Offering, would reasonably be expected to have become aware of relevant facts and/or to have identified the implications of those facts. |
9. | Our opinion is strictly limited to the matters stated herein and is not to be read as extending by implication to any other matter in connection with the Offering or otherwise including, but without limitation, any other document signed in connection with the Offering. Subject to the foregoing, we consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us, if any, in the Registration Statement and any amendments thereto. In giving such consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations promulgated thereunder. Further, save for the use of this opinion as an exhibit to the Registration Statement, this opinion is not to be circulated to, or relied upon by, any other person (other than persons entitled to rely on it pursuant to applicable federal securities laws in the United States, if applicable) or quoted or referred to in any public document or filed with any governmental body or agency without our prior written consent. |
10. | This opinion is given on the basis of the laws of the Republic of Singapore in force as at the date of this opinion and we undertake no responsibility to notify you of any change in the laws of the Republic of Singapore after the date of this opinion. |
Yours faithfully
Allen & Gledhill LLP
3
Exhibit 5.2
February 25, 2022
Genius Group Limited
8 Amoy Street, #01-01
Singapore 049950
Re: Registration Statement on Form F-1
Ladies and Gentlemen:
We have acted as United States counsel to Genius Group Limited, a Singapore public limited company (the “Company”), in a public offering pursuant to the Registration Statement on Form F-1 (Registration Statement No. 333-257700) initially filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), on July 6, 2021 (the “Registration Statement”), of the Company’s ordinary shares, no par value (the “Ordinary Shares”), plus warrants to purchase Ordinary Shares (the “Warrants”).
The Ordinary Shares are to be sold by the Company pursuant to an underwriting agreement (the “Underwriting Agreement”) to be entered into by and between the Company and ThinkEquity LLC, on behalf of themselves and as representative to the several underwriters to be named therein (the “Representative”). The securities are to be offered and sold in the manner described in the Registration Statement and the related prospectus included therein (the “Prospectus”). The Warrants are to be issued to the Representative.
For purposes of rendering the opinions set forth below, we have examined such documents and reviewed such questions of law as we have considered necessary and appropriate for the purposes of our opinion. We have not independently established any of the facts so relied on.
We have further assumed the legal capacity of natural persons, and we have assumed that each party to the documents we have examined or relied on has the legal capacity or authority and has satisfied all legal requirements that are applicable to that party to the extent necessary to make such documents enforceable against that party.
Based on the foregoing, we are of the opinion that:
1. Warrants. When the Registration Statement becomes effective under the Act and when the Warrants are issued and delivered, as contemplated by the Registration Statement, such Warrants will be legally binding obligations of the Company enforceable in accordance with their terms except: (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law); (b) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; (c) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought; and (d) we express no opinion as to whether a state court outside of the State of New York or a federal court of the United States would give effect to the choice of New York law provided for in the Warrant Agreement.
We express no opinion as to matters governed by any laws other than the laws of the State of New York and the federal laws of the United States of America, as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Prospectus. In giving such permission, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Commission thereunder. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.
Very truly yours,
/s/ Ellenoff Grossman & Schole LLP | |
Ellenoff Grossman & Schole LLP |
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of Genius Group Limited on Amendment No. 7 to Form F-1, File No. 333-257700, of our report dated July 3, 2021 except for the stock split described in Note 34 and the effects of the restatement described in Notes 2 and 35 and reflected in Notes 4, 8, 11, 12, 13, 21, 27, 28 and 33 as to which the date is December 30, 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 appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
Melville, NY
February 25, 2022
Exhibit 23.2
Lightheart | Sanders
C e r t I f I e d P u b l I c A c c o u n t a n t s
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, and Accountants’ Review Reports, dated September 17, 2021 and February 4, 2021, on the financial statements of University of Antelope Valley, Inc. for the six months then ended June 30, 2021 and 2020, respectively, in Genius Group Ltd's registration statement on Form F-1. We also consent to application of such report to the financial information in the Report in Genius Group Ltd's registration statement on Form F-1, 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
February 25, 2022
140 Fountains Blvd., Suite D, Madison MS 39110 ♦ 601-898-2727 ♦ www.lsacpafirm.com
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our Auditor’s Report, dated 20 September 2021, on the financial statements of Property Investors Network Ltd, for the years ended December 31, 2020 and 2019, respectively and Accountant’s Review Reports, dated December 23 2021 on the financial statements of Property Investors Network Ltd, for the six months then ended June 30, 2021 and 2020, respectively, in Genius Group Ltd’s registration statement on the form F-1. We also consent to application of such report to the financial information in the Report in Genius Group Ltd’s registration statement on Form F-1, when such financial information is read in conjunction with the financial statements referred to in our reports.
SKS Bailey Group Ltd
Chartered Accountants
Peterlee, County Durham
25 February, 2022
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our Auditor’s Report, dated 20 September 2021, on the financial statements of Mastermind Principles Ltd, for the years ended December 31, 2020 and 2019, respectively and Accountant’s Review Reports, dated December 23 2021 on the financial statements of Mastermind Principles Ltd, for the six months then ended June 30, 2021 and 2020, respectively, in Genius Group Ltd’s registration statement on the form F-1. We also consent to application of such report to the financial information in the Report in Genius Group Ltd’s registration statement on Form F-1, when such financial information is read in conjunction with the financial statements referred to in our reports.
SKS Bailey Group Ltd
Chartered Accountants
Peterlee, County Durham
25 February, 2022
Exhibit 107
Calculation of Filing Fee Tables
FORM F-1
(Form Type)
Genius
Group Limited
(Exact Name of Registrant as Specified in its Charter)
Not Applicable
(Translation of Registrant’s Name into English)
Table 1: Newly Registered and Carry Forward Securities
Security Type | Security Class Title |
Fee Calculation or Carry Forward Rule |
Amount Registered |
Proposed Maximum Offering Price Per Unit |
Maximum Aggregate Offering Price(2) |
Fee Rate(3) | Amount
of Registration Fee |
Carry Forward Form Type |
Carry Forward File Number |
Carry Forward Initial effective date |
Filing
Fee Previously Paid In Connection with Unsold Securities to be Carried Forward |
|||||||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||||||
Fees to Be Paid | ||||||||||||||||||||||||||||
Fees Previously Paid | Equity | Ordinary shares, no par value per share(1)(4) | 457(o) | $ | 46,000,000 | 0.0001091 | $ | 5,019 | ||||||||||||||||||||
Equity | Warrants to be issued to the representative of the underwriters(5) | 457(g) | — | — | — | |||||||||||||||||||||||
Equity | Ordinary shares underlying warrants to be issued to the representative of the underwriters(6) | 457(g) | $ | 2,875,000 | 0.0001091 | $ | 314 | |||||||||||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||||||
Total Offering Amounts | $ | 48,875,000 | $ | 5,333 | ||||||||||||||||||||||||
Total Fees Previously Paid | $ | 5,333 | ||||||||||||||||||||||||||
Total Fee Offsets | ||||||||||||||||||||||||||||
Net Fee Due | $ | 0 |
1) | In accordance with Rule 416(a), the Registrant is also registering an indeterminate number of additional ordinary shares that shall be issuable to prevent dilution resulting from share splits, share dividends or similar transactions. |
2) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
3) | As in effect when previously paid.. |
4) | Includes additional ordinary shares which may be issued upon exercise of the underwriters’ over-allotment option. |
5) | No registration fee required pursuant to Rule 457(g). |
6) | We have agreed to issue to the representative of the underwriters warrants to purchase ordinary shares representing up to 5% of the ordinary shares issued in the offering. The representative’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per ordinary share offered hereby. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the representative’s warrants is $2,875,000, which is equal to 125% of $2,300,000 (5% of $46,000,000). |
Table 2: Fee Offset Claims and Sources
Registrant or Filer Name |
Form or Filing Type |
File Number |
Initial Filing Date |
Filing Date | Fee
Offset Claimed |
Security
Type Associated with Fee Offset Claimed |
Security
Title Associated with Fee Offset Claimed |
Unsold Securities Associated with Fee Offset Claimed |
Unsold
Aggregate Offering Amount Associated with Fee Offset Claimed |
Fee
Paid with Fee Offset Source |
||||||||||||
Rules 457(b) and 0-11(a)(2) | ||||||||||||||||||||||
Fee Offset Claims | ||||||||||||||||||||||
Fee Offset Sources | ||||||||||||||||||||||
Rule 457(p) | ||||||||||||||||||||||
Fee Offset Claims | ||||||||||||||||||||||
Fee Offset Sources |
Table 3: Combined Prospectuses
Security Type | Security Class Title | Amount of Securities Previously Registered |
Maximum Aggregate Offering Price of Securities Previously Registered |
Form Type |
File Number |
Initial Effective Date |
|||||||