GNS - Genius Group Announces 119% Revenue Growth for Full Year 2022 Expansion of Pro Forma Gross Margin to 53%

June, 06 2023 08:05 AM Genius Group Limited

SINGAPORE, June 06, 2023 (GLOBE NEWSWIRE) -- Genius Group Limited (NYSE American: GNS) (“Genius Group” or the “Company”), a leading entrepreneur edtech and education group, today announced its financial results for the full year 2022.

Full Year 2022 Financial Highlights

Revenue growth of 119% to $18.2 million in 2022 from 2021 revenues of $ 8.3 million
Revenues on pro-forma basis of $28.1 million in 2022
Gross margin of 47% in 2022, compared to a gross margin of 33% in 2021
Pro forma gross margin of 53% in 2022
Net loss of ($55.3 million) in 2022 compared to net loss of ($4.5 million) in 2021 and pro forma net loss of ($54.9 million) in 2022, partially due to the Company’s annual valuation testing of its goodwill and intangible asset fair market values,
Adjusted EBITDA net loss of ($7.8 million) in 2022 compared to an adjusted EBITDA net loss of ($2.3 million) in 2021 and pro forma adjusted EBITDA net loss of ($7.3 million) in 2022
Cash and equivalent as of December 31, 2022, of $5.7 million compared to $1.8 million as of December 31, 2021
Total assets of $91.3 million as of December 31, 2022 compared to $17.6 million as of December 31, 2021
Intangible assets of $16.1 million as of December 31, 2022 compared to $1.4 million as of December 31, 2021 as a result of the acquisitions completed this year
Goodwill of $31.7 million as of December 31, 2022 compared to $1.3 million as of December 31, 2021 as a result of the acquisitions completed this year
$36.5 million in derivative liabilities as of December 31, 2022 due to $12.5 million in contingent consideration and $24.0 million in options

2022 Student and Partner Growth Highlights

The Company exceeded its growth targets for students and partners:

Students and users growth of 58%, from 2.8 million students at the end of 2021 to 4.5 million students and users at the end of 2022, representing an average daily growth of 4,452 new students and users per day
Paying students and users growth of 137%, from 72,422 students and users at the end of 2021 to 171,919 paying students and users at the end of 2022, representing an average daily growth of 272 new paying students and users per day
Partner growth of 29% from 11,414 at the end of 2021 to 14,760 at the end of 2022

Roger Hamilton, CEO of Genius Group, commented: “Genius Group has had a transformative year since its IPO in April 2022. We completed the acquisitions of 5 companies, grew at a significantly faster rate than the Edtech industry ¹ , signed strategic partnerships and established an experienced leadership team to drive the growth of Genius Group and its subsidiaries. We plan to continue on this growth trajectory in 2023 as we attract new free and paying students, sign new partnerships, further integrate our past acquisitions and pursue our acquisition strategy.”

2022 Strategic and Operational Highlights

IPO of Genius Group on the NYSE American in April 2022
Appointment of experienced leadership team and Board members including Erez Simha, Rav Karwal, Tim Murphy and Richard Berman
Entered into a Securities Purchase Agreement for the sale of $18.1 million principal amount of Senior Secured Convertible Notes in a private placement with an institutional investor for a purchase price of $17 million
Completed the acquisitions of Education Angels, Property Investors Network Ltd, E-Square Education Enterprises (Pty) Ltd, the University of Antelope Valley Inc and Revealed Films Inc
Continued growth of GeniusU edtech platform with students in 200 countries
Expanded entrepreneur education offering from entrepreneurs and investors to a lifelong learning pathway from early age to 100 years old
Launched Entrepreneur Campus and Investor Campus, with Global Summits featuring New York Times Bestselling Authors and Social Media Thought Leaders.

Recent Strategic and Operational Highlights

Share repurchase and share consolidation resolutions approved during the Extraordinary General Meeting held in February 2023
Issued a $10 per share digital discount coupon to Genius Group shareholders in partnership with Upstream Exchange
Genius Group dual listing on Upstream in April 2023
Board and shareholder approval, pending NYSE approval for a $37 million spin-off of Entrepreneur Resorts Ltd (based on its current share price), scheduled for Q3 2023
Launch of 2023 Prospectus featuring personalized, lifelong learning pathway in entrepreneur education
Launch of California Business School at UAV and partnership with Swiss School of Business and Management, delivering MBA and DBA courses with access to Genius Group’s Global Entrepreneur Program, featuring New York Times Bestselling Authors in leadership, marketing, technology and entrepreneurship
Continued student and partner growth on GeniusU platform, with launch of AI-based Partner Portal and Genie AI, powered by GPT4
Increased management focus on larger strategic acquisitions as a key growth strategy

Financial Guidance

Genius Group maintains its 2023 financial guidance as we will accelerate the integration of our acquired companies and expect growing operating leverage driven by top line synergies from our EdTech platform and the digitization of our portfolio of products. We believe this will allow Genius Group to accelerate organic growth and provide a clear path to positive EBITDA in 2023.

Webcast and Conference Call

Genius Group will host a live webcast to discuss the results Tuesday June 6 at 5:00 p.m. ET / 5:00 a.m. SGT. The webcast and supplemental information can be accessed on the investor relations section of the Genius Group website . An archive will be available after the conclusion of the live event and will remain available via the same link for 6 months.

Time: Tuesday, June 6, 2023, at 5:00 p.m. ET / 5:00 a.m. SGT

Webcast: Click on this link or go to the Investor Relations section of the Genius Group website to listen and view the slides.

Dial-in: 877-407-0712 / +1 201-493-6716

About Genius Group

Genius Group is a 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 4.5 million students and users in 200 countries, ranging from early age to 100.

For more information, please visit https://www.geniusgroup.net/ .

Investor Notice

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described in our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on June 6, 2023. If any of these risks were to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline, and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. See "Forward-Looking Statements" below.

Forward-Looking Statements

Statements made in this press release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,” “estimate,” “continue,” or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Risk Factors” in the Company's Annual Reports on Form 20-F, as may be supplemented or amended by the Company's Reports of a Foreign Private Issuer on Form 6-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

GENIUS GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in US Dollars)





For the year ended December 31,



Note

2022


2021

ASSETS










Current Assets










Cash and cash equivalents



$
5,720,569


$
1,784,938

Restricted cash

2


11,108,816



—

Accounts receivable, net

2


4,856,637



1,018,003

Other Receivables

5


120,304



66,000

Due from related parties

6


351,357



44,245

Inventories

7


1,001,977



92,530

Prepaid expenses and other current assets

8


1,090,787



3,490,446

Total Current Assets




24,250,447



6,496,162

Property and equipment, net

9


563,131



6,776,116

Operating lease right-of-use asset

10


12,573,710



1,077,241

Investments at fair value

11


29,071



29,069

Goodwill

12


31,688,887



1,320,100

Intangible assets, net

13


16,107,293



1,394,969

Other receivables

5


732,716



—

Due from related parties

6


5,288,264



—

Other non-current assets

15


26,108



501,750

Total Assets



$
91,259,627


$
17,595,407












LIABILITIES AND STOCKHOLDERS’ EQUITY










Current Liabilities










Accounts payable



$
1,672,306


$
1,078,381

Accrued expenses and other current liabilities

16


3,809,540



2,064,302

Deferred revenue

17


6,391,993



2,561,912

Income tax payable

2


355,023



—

Due to related parties

19


2,932,090



425,551

Operating lease liabilities - current portion

10


1,590,538



436,271

Loans payable - current portion

18


334,391



65,415

Convertible debt obligations - current portion

20


5,752,328



507,765

Short term debt

20


539,245



—

Total Current Liabilities




23,377,454



7,139,597

Due to related parties

19


1,729



—

Operating lease liabilities – non-current portion

10


11,394,337



894,589

Loans payable – non-current portion

18


428,025



85,858

Convertible debt obligations - non-current portion

20


2,223,523



766,245

Deferred tax liability

14


3,391,129



723,122

Derivative liabilities

21


36,488,594



—

Total Liabilities




77,304,791


$
9,609,411

Stockholders’ Equity










Contributed capital

22


110,534,000



50,924,276

Subscriptions receivable

22


(1,900,857
)


(1,900,857
)
Reserves




(32,933,714
)


(31,888,638
)
Accumulated deficit




(68,539,210
)


(13,493,684
)
Capital and reserves attributable to owners of Genius Group Ltd




7,160,219



3,641,097

Non-controlling interest




6,794,617



4,344,899

Total Stockholders’ Equity




13,954,836



7,985,996

Total Liabilities and Stockholders’ Equity



$
91,259,627


$
17,595,407

The accompanying notes are an integral part of these consolidated financial statements and are disclosed in the 20F filing.

GENIUS GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in US Dollars)





For the year ended December 31,



Note

2022


2021 As restated (1)

Revenue

23

$
18,193,616


$
8,294,804

Cost of revenue

2


(9,554,327
)


(5,537,346
)
Gross profit




8,639,289



2,757,458












Operating (Expenses) Income










General and administrative

25


(21,073,794
)


(7,211,204
)
Depreciation and amortization

9


(1,182,413
)


(38,864
)
Other operating income

24


144,396



490,300

Impairment loss

9,12,13


(28,246,010
)


—

(Loss) gains from foreign currency transactions

2


135,625



(166,174
)
Total operating expenses




(50,222,196
)


(6,925,942
)
Loss from Operations




(41,582,907
)


(4,168,484
)
Other Expense










Other Income

24


418,437



—

Revaluation adjustment of contingent liabilities

21


(13,838,197
)


—

Interest expense, net

26


(1,312,476
)


(449,566
)
Total Other Expense




(14,732,236
)


(449,566
)
Loss Before Income Tax




(56,315,143
)


(4,618,050
)
Income Tax Benefit

27


1,063,596



128,852

Net Loss




(55,251,547
)


(4,489,198
)
Other comprehensive income:










Foreign currency translation

2


(1,045,076
)


230,081

Total Comprehensive Loss



$
(56,296,623
)

$
(4,259,117
)











Net Loss is attributed to:

28








Owners of Genius Group Ltd




(55,045,526
)


(4,315,239
)
Non-controlling interest




(206,021
)


(173,959
)
Net Loss




(55,251,547
)


(4,489,198
)











Total Comprehensive Loss is attributable to:










Owners of Genius Group Ltd




(56,090,602
)


(4,085,158
)
Non-controlling interest




(206,021
)


(173,959
)
Total Comprehensive Loss



$
(56,296,623
)

$
(4,259,117
)











Net loss per share attributed to common stockholders, basic and diluted



$
(2.44
)

$
(0.28
)
Weighted-average number of shares outstanding, basic, and diluted




22,634,366



16,155,812

Number of shares outstanding, basic, and diluted




27,705,227



16,155,812

1) Restatement details in 20F filing.

The accompanying notes are an integral part of these consolidated financial statements and are disclosed in the 20F filing.

GENIUS GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in US Dollars)



For the year Ended December 31,



2022


2021

CASH FLOWS FROM OPERATING ACTIVITIES:








Net Loss

$
(55,251,547
)

$
(4,489,198
)
Adjustments to reconcile net loss to net cash used in operating activities:








Stock-based compensation


1,308,784



293,837

Depreciation and amortization


2,350,640



1,574,913

Amortization of tax liability


(1,284,166
)


105,650

(Gain) loss on foreign exchange transactions


(135,625
)


166,174

Provision for doubtful accounts


(1,509,486
)


(39,108
)
Impairment loss


28,246,010



—

Revaluation adjustment on contingent liabilities


13,838,197



—

Amortization of debt discount


—



140,837

Interest expense on lease liabilities


491,336



131,291

Changes in operating assets and liabilities








Accounts receivable


1,161,349



(30,554
)
Other receivable


(19,138
)


(66,000
)
Prepaid expenses and other current assets


1,489,459



(1,927,176
)
Inventory


(545,449
)


20,013

Accounts payable


(107,372
)


256,562

Accrued expenses and other current liabilities


751,442



254,080

Deferred revenue


996,324



1,015,200

Deferred tax liability


220,570



(257,953
)
Income tax payable


(237,759
)


—

Other non-current liabilities


—



(217,291
)
Total Adjustments


47,015,116



1,420,475

Net cash used in operations


(8,236,431
)


(3,068,723
)
CASH FLOWS FROM INVESTING ACTIVITIES:








Internally developed software


(743,995
)


(804,314
)
Acquisitions


(8,843,458
)


—

Purchase of equipment


(222,680
)


(77,797
)
Acquisition of intangible


(279,356
)


—

Net cash used in investing activities:


(10,089,489
)


(882,111
)
CASH FLOWS FROM FINANCING ACTIVITIES:








Amount due to/from related party, net


(221,842
)


(154,345
)
Proceeds from derivative liability, net


(250,000
)


—

Advance received for share issuances






953,087

Proceeds from IPO, net


17,308,453



—

Proceeds from convertible debt, net of issuance costs


4,184,964



—

Proceeds from equity issuances


2,701,215



3,127,442

Issuance from convertible debt


(509,311
)


—

Lease liabilities


(957,430
)


(758,522
)
Proceeds from Loan


972,593



—

Repayment of Loan


(1,285,181
)


(71,967
)
Net cash provided by financing activities


21,943,461



3,095,695

Increase (decrease) in cash and cash equivalents during the year


3,617,541



(855,139
)
Foreign exchange impact on cash


318,090



366,926

Cash and cash equivalents, beginning of year


1,784,938



2,273,151

CASH AND CASH EQUIVALENTS, END OF THE YEAR

$
5,720,569


$
1,784,938

Supplemental Disclosures of Cash Flow Information:








Cash paid during the period for interest

$
847,520


$
202,176

Non-Cash Investing and Financing Activities








Fair value of shares issued in satisfaction of a liability

$
350,000


$
—

Fair value of shares issued for the acquisition of entities

$
35,098,001


$
—

Fair value of shares issued for conversion of convertible notes

$
7,829,607


$
293,837

The accompanying notes are an integral part of these consolidated financial statements and are disclosed in the 20F filing.

Pro Forma Financials

The following tables set forth summary combined pro forma financial data and audited summary consolidated financial data for the periods and as of the dates indicated. The summary combined unaudited pro forma financial data below includes the consolidated financials of all companies in the Genius Group, including the Pre-IPO Group and the Acquisitions as if they were operating as one group in the periods indicated. The pro forma financials for 2022 include the audited financial data of the Pre-IPO Group and Acquisitions from the audited financials and the unaudited financial data of the Acquisitions.

The summary income data for the years ended December 31, 2022 and 2021 and the summary balance sheet data as of December 31, 2022 and 2021 for the Group are derived from the audited consolidated financial statements included in this Annual Report. Our audited consolidated financial statements have been prepared in U.S. dollars and in accordance with IFRS, as issued by the IASB.

Genius Group is made up of nine companies (taking into account the Acquisitions) that have varying financial performance. For this reason, you should read the summary combined pro forma financial data in conjunction with our audited consolidated financial statements and related notes beginning on page F-1 of this Annual Report, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report. Our historical results do not necessarily indicate our expected results for any future periods.



Genius Group


Group



Pro forma


Audited Financials



Year Ended


Year Ended



December 31,


December 31,



2022


2022


2021



(USD 000’s)


(USD 000’s)


(USD 000’s)

Sales


28,129



18,194



8,295

Cost of goods sold


(13,328
)


(9,555
)


(5,537
)
Gross profit


14,801



8,639



2,757

Other Operating Income


280



280



324

Operating Expenses


(57,013
)


(50,502
)


(7,250
)
Operating Loss


(41,932
)


(41,583
)


(4,168
)
Other income


1,172



419



0

Other Expense


(15,207
)


(15,151
)


(450
)
Net Loss Before Tax


(55,967
)


(56,315
)


(4,618
)
Tax Benefits


1,064



1,064



129

Net Loss After Tax


(54,903
)


(55,252
)


(4,489
)
Other Comprehensive Loss


(1,045
)


(1,045
)


230

Total Loss


(55,948
)


(56,297
)


(4,259
)
Net income per share, basic and diluted


(2.43
)


(2.44
)


(0.28
)
Weighted-average number of shares outstanding, basic and diluted


22,634,366



22,634,366



16,155,812

Genius Group

Group

Pro forma

Audited Financials

Year Ended

December 31,

2022

2021

(USD 000’s)

Summary Balance Sheet Data:

Total current assets

24,251

6,496

Total non-current assets

67,009

11,099

Total Assets

91,260

17,595

Total current liabilities

23,378

7,140

Total non-current liabilities

53,927

2,469

Total Liabilities

77,305

9,609

Total Stockholders’ Equity

13,955

7,986

Total Liabilities and Shareholders’ Equity

91,260

17,595

Non-IFRS Financial Measure

We have included Adjusted EBITDA in this Annual Report 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. Non-IFRS financial measures are not a substitute for IFRS financial measures.

We calculate Adjusted EBITDA as Net loss for the period plus income taxes plus/ minus net finance result plus depreciation and amortization plus/minus share-based compensation expenses plus bad debt provision. Share-based compensation expenses and bad debt provision are included in General and administrative expenses in the Consolidated Statements of Operations.



Genius Group


Group



Pro forma


Audited Financials



Year Ended


Year Ended



December 31,


December 31,



2022


2022


2021



(USD 000’s)


(USD 000’s)


(USD 000’s)

Net Loss


(54,903
)


(55,252
)


(4,489
)
Tax Benefits


(1,064
)


(1,064
)


(129
)
Interest Expense, net


1,325



1,312



450

Depreciation and Amortization


2,453



2,351



1,575

Impairment


28,246



28,246



—

Revaluation Adjustment of Contingent Liabilities


13,838



13,838



—

Stock Based Compensation


1,309



1,309



294

Bad Debt Provision


1,529



1,509



(39
)
Adjusted EBITDA


(7,267
)


(7,750
)


(2,338
)

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.

Education segment – Genius Group (including Acquisitions)



Key Business Metrics – Education Segment Pro Forma Y ear E nded December 31,



2022


2021

Number of students and users


4,450,852



2,825,628

Number of Free Students and users


4,278,933



2,768,530

Number of Paying Students and users


171,919



72,422

Number of Partners


14,760



11,414

Number of countries of operation


191



191

Marketing Spend


1,994,331



1,139,928

Education Revenue


23,469,609



25,468,253

Revenue from New Paying Students


10,164,848



7,377,236

New Students


1,640,698



890,328

New Paying Students


19,681



10,425

Conversion rate


1.20
%


1.17
%
Average Acquisition Cost per New Paying Student


101



109

Average Annual Revenue per New Paying Student


516



707

Net Income (Loss) margin


(172.07
)%


(4.56
)%
Adjusted EBITDA margin


(11.76
)%


4.10
%

Campus segment – Entrepreneur Resorts



Key Business Metrics – Campus Segment Pro Forma Year Ended December 31,



2022


2021

Revenue


4,638,122



3,100,750

No of Locations


6



6

No of Seats/Rooms


367



367

Utilization


33
%


28
%
Total Orders


136,204



96,390

Revenue Per Order


34



32

Contacts

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

Media Contacts: Adia PR
Email: gns@adiapr.co.uk

US Investors:
Dave Gentry
RedChip Companies Inc
1-800-RED-CHIP
GNS@redchip.com

¹ Holon IQ Edtech growth estimated of 16.3% CAGR from 2019 to 2025

Company Name:	Genius Group Limited
Stock Symbol:	GNS
Market:	NYSE
Website:	geniusgroup.net

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