GNS Genius Group Limited

Genius Group Limited (“Genius Group” or the “Company”) (NYSE American: GNS), a leading entrepreneur Edtech and education group, today announced its financial results for the nine months ended September 30, 2022.

Financial Highlights For the Nine Months ended September 30, 2022

• Nine months ended September 30, 2022 revenue growth to $14.42 million, 60.68% growth over nine months ended September 2021 and revenue of $24.67 million on a pro forma basis for the nine months ended September 40, 2022
• Nine months ended September 30, 2022 gross margin of 33.96%, compared to 32.95% for the nine months ended September 30, 2021 and gross margin of 47.33% on a pro forma basis for the nine months ended September 30, 2022
• Nine months ended September 30, 2022 net loss of ($6.09) million and net loss on a pro forma basis of ($5.26) million for the nine months ended September 30, 2022
• Nine months ended September 30, 2022 EBITDA net loss of ($3.89) million compared to EBITDA net loss of ($1.59) million for the nine months ended September 30, 2021 and EBITDA net loss on a pro forma basis of ($2.99) million for the nine months ended September 30, 2022
• Cash and equivalent as of September 30, 2022, of $8.97 million compared to $1.78 million as of December 31, 2021

Roger Hamilton, CEO of Genius Group, commented: “Genius Group continues to deliver strong growth in number of students, paying students and partners, which allows the company to grow at a higher rate than the industry. This is a testament of our strong and loyal community which grows mainly through word of mouth.”

Operational Highlights

• The number of students grew to 3.01 million, which represents a 17% growth on an annualized basis. On a pro forma basis, Genius Group had a group user base of 4.35 million (students and users) at the end of September 2022.
• The number of paying students grew to 41,282 at the end of September 2022, a 14% annualized growth rate. On a pro forma basis, the company had 167,915 paying students and users.
• The number of partners grew to 10,751 at the end of September 2022, a 7% annualized growth rate. On a pro forma basis, partners grew to 12,521.

Other Recent Highlights

• Appointment of Dr. Tracy Lynn as President of the University of Antelope Valley
• Appointment of Saranjit Sagar as Chief Executive Officer of GeniusU
• On July 7, 2022, completed the acquisition of the U.S.-based University of Antelope Valley, a fully accredited university in California
• On August 24, 2022, sold a senior secured convertible note with a principal amount of $18.13m for a purchase price of $17.00 million
• On October 4, 2022, completed the acquisition of U.S.-based Revealed Films Inc., a media production company that specializes in multi-part documentaries
• Contracted the two law firms Christian Levine Law Group and Warshaw Burstein, LLP to investigate the recent trading history of Genius Group and possible market manipulation

Financial Guidance

We are maintaining our 2022 pro forma revenue guidance and revising our adjusted EBITDA guidance.

• Pro forma annual revenue of $35.0m-$38.0m
• Pro forma adjusted EBITDA loss of $4m - $5m
• Weighted average share count of 22,580,739
• Number of students (and users) 4.4m-4.6m

Webcast and Conference Call

Genis Group will host a live webcast to discuss the results today, November 30, 2022, at 8:00 a.m. EST / 9:00 p.m. SGT. The webcast and supplemental information can be accessed on the investor relations section of the Genius Group website at ir.geniusgroup.net. An archive will be available after the conclusion of the live event and will remain available via the same link for 6 months.

Time:

Wednesday, November 30, 2022, at 8:00 a.m. EST / 9:00 p.m. SGT

 

Webcast:

Go to the Investor Relations section of the Genius Group website to listen and view the slides.

 

Dial-in:

877-407-0712 (U.S. Toll Free); +1 201-493-6716 (International)

About Genius Group

Genius Group is a world leading entrepreneur Edtech and education group, with a mission to disrupt the current education model with a student-centered, life-long learning curriculum that prepares students with the leadership, entrepreneurial and life skills to succeed in today’s market. The group has a group user base of 4.3 million users in 200 countries, ranging from ages 0 to 100.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the U.S. federal securities laws, including (without limitation) statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.

Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: the Company’s goals and strategies; the Company’s future business development; changes in demand for online learning; changes in technology; fluctuations in economic conditions; the growth of the online learning industry the United States and the other markets the Company serves or plans to serve; reputation and brand; the impact of competition and pricing; government regulations; and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission (the “SEC”). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Key Business Metrics

We monitor the key business metrics and Non-IFRS financial measures to help us evaluate our business and growth trends, set growth targets and budgets, and measure the effectiveness of our sales and marketing efforts. These key business metrics and Non-IFRS financial measures are presented for supplemental informational purposes only, are not a substitute for IFRS financial measures, and may differ from similarly titled metrics or measures presented by other companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Business Metrics and Non-IFRS Financial Measures” for detailed descriptions of the measures and metrics.

Non-IFRS Financial Measure

We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.

We calculate Adjusted EBITDA as net profit / loss for the period plus income taxes and social contribution plus / minus finance revenue /expense result plus depreciation and amortization plus share-based compensation expenses plus bad debt provision.

GENIUS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(In US Dollars)

 

 

 

As of September 30,

 

 

As of December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

(Audited)

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

8,972,559

 

 

$

1,784,938

 

Restricted Cash

 

 

11,333,283

 

 

 

-

 

Accounts receivable, net

 

 

7,074,898

 

 

 

1,018,003

 

Other receivables

 

 

4,018,845

 

 

 

66,000

 

Due from related parties

 

 

1,790,417

 

 

 

44,245

 

Inventories

 

 

491,604

 

 

 

92,530

 

Prepaid expenses and other current assets

 

 

2,543,792

 

 

 

3,490,446

 

Total Current Assets

 

 

36,225,398

 

 

 

6,496,162

 

Property and equipment, net

 

 

7,553,384

 

 

 

6,776,116

 

Operating lease right-of-use asset

 

 

8,012,578

 

 

 

1,077,241

 

Investments at fair value

 

 

247,599

 

 

 

29,069

 

Goodwill

 

 

22,206,302

 

 

 

1,320,100

 

Intangible assets, net

 

 

8,954,207

 

 

 

1,394,969

 

Other non-current assets

 

 

-

 

 

 

501,750

 

Total Assets

 

 

83,199,468

 

 

 

17,595,407

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

1,678,078

 

 

 

1,078,381

 

Accrued expenses and other current liabilities

 

 

2,925,349

 

 

 

2,064,302

 

Deferred revenue

 

 

5,942,897

 

 

 

2,561,912

 

Operating lease liabilities – current portion

 

 

643,866

 

 

 

436,271

 

Income tax payable

 

 

261,217

 

 

 

-

 

Loans payable – current portion

 

 

65,964

 

 

 

65,415

 

Loans payable – related parties – current portion

 

 

504,988

 

 

 

425,551

 

Convertible debt obligations, current portion

 

 

4,193,078

 

 

 

507,765

 

Total Current Liabilities

 

 

16,215,437

 

 

 

7,139,597

 

Due to related parties

 

 

1,593

 

 

 

-

 

Operating lease liabilities – non-current portion

 

 

7,610,252

 

 

 

894,589

 

Loans payable – non-current portion

 

 

1,052,254

 

 

 

85,858

 

Convertible debt obligations, non-current portion

 

 

-

 

 

 

766,245

 

Deferred tax liability

 

 

2,203,632

 

 

 

723,122

 

Convertible note

 

 

3,288,771

 

 

 

-

 

Total Liabilities

 

 

30,371,939

 

 

 

9,609,411

 

Commitments and Contingencies Stockholders’ Equity:

 

 

 

 

 

 

 

 

Contributed capital

 

 

102,429,144

 

 

 

50,924,276

 

Subscriptions receivable

 

 

(1,954,415

)

 

 

(1,900,857

)

Reserves

 

 

(35,999,824

)

 

 

(31,888,638

)

Accumulated deficit

 

 

(18,502,842

)

 

 

(13,493,684

)

Capital and reserves attributable to owners of Genius Group Ltd

 

 

45,972,063

 

 

 

3,641,097

 

Non-controlling interest

 

 

6,855,466

 

 

 

4,344,899

 

Total Stockholders’ Equity

 

 

52,827,529

 

 

 

7,985,996

 

Total Liabilities and Stockholders’ Equity

 

 

83,199,468

 

 

 

17,595,407

 

GENIUS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In US Dollars)

 

 

 

Nine Months Ended

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenue

 

$

14,415,681

 

 

$

8,971,423

 

Cost of revenue

 

 

(9,519,540

)

 

 

(6,015,497

)

Gross profit

 

 

4,896,141

 

 

 

2,955,926

 

Operating (Expenses) Income

 

 

 

 

 

 

 

 

General and administrative

 

 

(10,668,488

)

 

 

(5,036,086

)

Depreciation and amortization

 

 

(178,478

)

 

 

(316,721

)

Other operating income

 

 

140,082

 

 

 

28,921

 

Loss from foreign currency transactions

 

 

104,577

 

 

 

36,117

 

Total operating expenses

 

 

(10,602,307

)

 

 

(5,287,769

)

Loss from Operations

 

 

(5,706,166

)

 

 

(2,331,843

)

(Expense) Income

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(83,196

)

 

 

(125,518

)

Impairment loss

 

 

(480,272

)

 

 

—

 

Other income

 

 

121,034

 

 

 

107,228

 

Total Other Expense

 

 

(442,434

)

 

 

(18,290

)

Loss Before Income Tax

 

 

(6,148,600

)

 

 

(2,350,133

)

Income Tax Benefit (Expense)

 

 

59,616

 

 

 

37,713

 

Net Loss

 

 

(6,088,984

)

 

 

(2,312,420

)

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

(42,423

)

 

 

(15,066

)

Total Comprehensive Loss

 

 

(6,131,407

)

 

 

(2,327,486

)

Total Comprehensive Loss is attributable to:

 

 

 

 

 

 

 

 

Owners of Genius Group Ltd

 

 

(5,880,980

)

 

 

(2,232,424

)

Non-controlling interest

 

 

(250,427

)

 

 

(95,062

)

Total Comprehensive Loss

 

 

(6,131,407

)

 

 

(2,327,486

)

Weighted-average number of shares outstanding, basic and diluted

 

 

19,966,999

 

 

 

16,155,180

 

Basic and diluted earnings (loss) per share from continuing operations

 

 

(0.30

)

 

 

(0.14

)

GENIUS GROUP LIMITED AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In US Dollars)

 

 

 

For the Nine Months Ended

September 30, 2022

 

 

For the Year Ended December 31, 2021

 

 

 

(Unaudited)

 

 

(Audited)

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

Net loss

 

$

(6,088,984

)

 

$

(4,489,198

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

261,550

 

 

 

293,837

 

Depreciation and amortization

 

 

1,452,431

 

 

 

1,574,913

 

Deferred tax liability

 

 

—

 

 

 

105,650

 

Amortization of debt discount

 

 

—

 

 

 

140,837

 

Provision for doubtful debts

 

 

—

 

 

 

(39,108

)

Amortization of tax liability

 

 

(65,057

)

 

 

—

 

Impairment loss

 

 

480,372

 

 

 

—

 

Loss on foreign exchange transactions

 

 

(104,577

)

 

 

153,692

 

Interest expense on lease liabilities

 

 

3,690

 

 

 

131,291

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,355,320

)

 

 

(30,554

)

Other receivable

 

 

—

 

 

 

(66,000

)

Prepaid expenses and other current assets

 

 

(817,727

)

 

 

(1,927,176

)

Inventory

 

 

(399,074

)

 

 

20,013

 

Accounts payable

 

 

256,835

 

 

 

256,562

 

Accrued expenses and other current liabilities

 

 

(1,444,596

)

 

 

254,080

 

Deferred revenue

 

 

2,072,996

 

 

 

1,015,200

 

Deferred tax liability

 

 

—

 

 

 

(257,953

)

Other non-current liabilities

 

 

—

 

 

 

(217,291

)

Total adjustments

 

 

(658,477

)

 

 

1,407,993

 

Net Cash Used In Operating Activities

 

 

(6,747,461

)

 

 

(3,081,205

)

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

 

(643,157

)

 

 

(804,314

)

Proceeds from Sale/(Purchase) of equipment

 

 

68,867

 

 

 

(77,797

)

Acquisition of PIN, EA and ESQ

 

 

(8,788,989

)

 

 

—

 

Deposit on investment in UAV

 

 

—

 

 

 

—

 

Investment at fair value

 

 

(218,530

)

 

 

 

 

Net Cash Used In Investing Activities

 

 

(9,581,809

)

 

 

(882,111

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

Amount due to/from related party

 

 

(128,941

)

 

 

(154,345

)

Proceeds from sale of future shares

 

 

—

 

 

 

953,087

 

Proceeds from equity issuances, net of issuance costs

 

 

2,605,215

 

 

 

3,127,442

 

Proceeds from IPO, net

 

 

18,060,447

 

 

 

—

 

Proceeds from convertible debt, net of issuance costs

 

 

4,155,495

 

 

 

—

 

Issuance from convertible debt

 

 

(147,582

)

 

 

—

 

Operating lease liability payments

 

 

(678,039

)

 

 

(758,522

)

Proceeds/ (Repayments) of loans payable

 

 

(425,804

)

 

 

(71,967

)

Net Cash Provided By Financing Activities

 

 

23,440,791

 

 

 

3,095,695

 

Effect of Exchange Rate Changes on Cash

 

 

76,100

 

 

 

379,408

 

Net Increase (Decrease) In Cash

 

 

7,187,621

 

 

 

(488,213

)

Cash – Beginning of year

 

 

1,784,938

 

 

 

2,273,151

 

Cash – End of period

 

 

8,972,559

 

 

 

1,784,938

 

Pro Forma Financials

Pro forma financials for Genius Group (The full Group including the Group and all the Acquisitions YTD): Unaudited pro forma financials provided for the period ended September 30, 2022, for the full Group, including all acquired companies YTD as if they were operating as one during these periods. The acquisitions included in the table below are Property Investors Network (acquired April 30, 2020), Education Angels (acquired April 30, 2022), E-Square (acquired May 31, 2022), University of Antelope Valley (acquired July 07, 2022) and Revealed Films (acquired October 04, 2022).

 

 

Genius Group Pro forma Nine Months Ended (USD 000’s)

Summary Income Statement

 

September 30, 2022

Sales

 

 

24,667

Cost of goods sold

 

 

(12,992)

Gross profit (Loss)

 

 

11,675

Other Operating Income

 

 

245

Operating Expenses

 

 

(17,495)

Operating profit (Loss)

 

 

(5,575)

Other income

 

 

879

Other Expense

 

 

(625)

Net Income (Loss) Before Tax

 

 

(5,321)

Tax Expense

 

 

60

Net Income (Loss) After Tax

 

 

(5,261)

Other Comprehensive Income

 

 

(43)

Total Income (Loss)

 

 

(5,304 )

Net income per share, basic and diluted

 

 

(0.26)

Weighted-average number of shares outstanding, basic and diluted

 

 

19,966,999

 

 

Genius Group Pro forma Nine Months Ended (USD 000’s) 

Adjusted EBITDA

 

 September 30, 2022

Net Loss

 

(5,262)

Tax Expense

 

(60)

Interest Expense, net

 

145

Depreciation and Amortization

 

1,426

Goodwill Impairments

 

480

Stock Based Compensation

 

262

Bad debt Provision

 

21

Adjusted EBITDA

 

(2,988)

 

 

Genius Group Pro forma Nine Months Ended (USD 000’s)

 

 

September 30, 2022

Summary Balance Sheet Data:

 

 

 

Total current assets

 

 

33,962

Total non-current assets

 

 

57,983

Total Assets

 

 

91,945

Total current liabilities

 

 

17,382

Total non-current liabilities

 

 

14,317

Total Liabilities

 

 

31,699

Total Shareholders’ Equity

 

 

60,246

Total Liabilities and Shareholders’ Equity

 

 

91,945

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221130005453/en/

Investors: Flora Hewitt, Vice President of Investor Relations and Mergers and Acquisitions Email: investor@geniusgroup.net

Media: Ruth Shearman, Senior Account Manager, Adia PR Email: gns@adiapr.co.uk