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 first half of 2023.

“We are extremely pleased with the revenue growth we have achieved in the first six months of 2023, and anticipate reporting even stronger numbers for the second half of the year. We believe that the revenue growth we have experienced exceeds the industry as a whole, and underlines the demand for our unique entrepreneur curriculum and the strength of our Edtech business model.” said Roger Hamilton, CEO of Genius Group.

“With the launch of our Genie AI and Genie Metaversity, providing AI-driven personalized learning and virtual global classrooms, we are well positioned towards our long-term goal of impacting 100 million students globally with the 21st century skills they need to succeed.”

Financial Highlights for the First Half of 2023

  • First half revenue of $11.8 million, 120.76% growth over first half of 2022. The revenue on a pro forma basis was $9.0 million, which excludes the spin off entity, Entrepreneur Resorts Ltd
  • First half gross margin of $6.2 million or 52.58% compared to $2.2 million or 41.75% in first half of 2022. The pro forma gross margin was $4.3 million or 48.33% for the six months ending June 30, 2023
  • First half adjusted EBITDA net loss of ($7.3) million, or ($0.22) per basic and diluted share compared to adjusted EBITDA net loss of ($2.0) million or ($0.11) per basic and diluted share in first half of 2022. First half 2023 adjusted EBITDA net loss of ($7.3) million, or ($0.22) per basic and diluted share on a pro forma basis
  • First half net loss of ($10.8) million, or ($0.32) per basic and diluted share compared to ($3.5) million, or ($0.20) per basic and diluted share. On a pro forma basis, first half 2023 net loss was ($10.8) million, or ($0.32) per basic and diluted share
  • $2.6 million cash and equivalents as of June 30, 2023, compared to $5.7 million as of December 31, 2022
  • Adjusting 2023 full year guidance to $26.0 million to $29.0 million

“While the company has put significant focus on various corporate actions and incur significant increased costs in 2023 to protect our shareholders, we have done so while growing our student base and gross margins.” Said Erez Simha, CFO of Genius Group. “We remain committed to achieving our revenue growth targets while cutting costs and moving towards a cash positive operating model.”

Student and Partner Growth Highlights for the First Half of 2023

The Company exceeded its growth targets for students and partners:

  • Students and users growth of 21%, from 4.5 million students at the end of 2022 to 5.4 million students and users at the end of June 2023, representing an annualized growth rate of 41%
  • Paying students and users growth of 4%, from 171,919 students and users at the end of 2022 to 179,149 paying students and users at the end of June 2023, representing an annualized growth rate of 8%
  • Partner growth of 1% from 14,760 at the end of 2022 to 14,942 in June 2023, representing an annualized growth rate of 2%

Strategic and Operational Highlights for the First Half of 2023

  • Genius Group won Real Leaders Impact awards in January 2023
  • Launched California Business School at UAV and Global Entrepreneurship Program at GeniusU in February 2023
  • Strategic partnership with Swiss School of Business Management to launch international DBA in March 2023
  • Launched the Alpha and Beta version of the Genie AI in April and June 2023 to assist students throughout their learning journey on GeniusU
  • Launch of Genius Metaversity in June 2023, a virtual reality learning environmental in partnership with Vatom to hold educational courses and summits in the Metaverse
  • Launch of $1m entrepreneur scholarship fund for students at the University of Antelope Valley with AI Entrepreneur Certification in June 2023
  • Launched legal action against illegal trading activities in company shares
  • Distributed $10 NFT Coupon to Genius Group investors in March 2023
  • Spin off of Entrepreneur Resorts was approved by the Board of Directors in January 2023, approved by shareholders in May 2023 and approved by the Singapore High Court in August 2023.

Recent Strategic and Operational Highlights

  • Appointment of Jennifer Brady as Head of Digital Marketing to lead marketing efforts across our subsidiaries
  • Appointment of Jason Jaingue as Head of Global Product to enhance our customer and partner experiences across all of our products
  • Genius Group Launches Genius Metaversity 2.0 in Partnership with Vatom and GeniusX
  • Signed, executed and delivered a bridge note with an accredited investor in the face amount of $3.2 million, which has a $200,000 original issue discount, out of it $2M were received by the company in July and August
  • Senior Secured Convertible Note signed in August 2022 with Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B has been reduced to current balance of US$53,344 as of August 2023
  • Dual listed Genius Group on Upstream on April 6, 2023 but delisting expected on or about September 29, 2023 due to complex securities regulations arising from dual listing on Upstream and NYSE and de minimis use of Upstream by GNS shareholders
  • ERL was dual listed on Upstream in September 2023 and the share dividend distribution and spin off date is expected to be on 2 October 2023

Financial Guidance

Genius Group changes its 2023 financial guidance:

  • 2023 revenue of $26 million to $29 million compared to 2022 revenue of $18.2 million
  • 2023 net loss of ($15.5) million to ($17.0) million compared to 2022 net loss of ($55.3) million (before expected adjustments writing back contingent liabilities at year end, which will reduce net loss)
  • 2023 adjusted EBITDA net loss of ($10.0) million to ($12.0) million compared to 2022 adjusted EBITDA net loss of ($7.8) million
  • Number of students and users between 5.7 million and 6.0 million, a 27% to 33% increase from 4.5 million students and users in 2022

Changes in the financial guidance are mainly driven by:

  • The exclusion of Entrepreneur Resorts Ltd financial performance due to the spin off
  • The delay of several new product launches, partnerships and acquisitions
  • Restructuring of business model of most recent acquisition
  • Significant increase in professional cost due to spin-off, investigation and audit

Other

The audit opinion of its audited consolidated financial statements for the fiscal year ended December 31, 2022, included in the Company’s Annual Form on 20F filed with the Securities and Exchange Commission on June 6, 2023, contained a going concern qualification. The Company’s unaudited condensed consolidated financial statements as of June 30, 2023 have been prepared on a going concern basis.

Webcast and Conference Call

Genius Group will host a live webcast to discuss the results Friday September 29 at 8:30 a.m. ET / 8:30 p.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: Friday, September 29, 2023, at 8:30 p.m. ET / 8:30 p.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. Through its learning platform, GeniusU, the Genius Group has a member base of 5.4 million 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, as amended for the fiscal year ended December 31, 2022, filed with the SEC on June 6, 2023 and August 3, 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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(In US Dollars)

    As of June 30,     As of December 31,  
    2023       2022  
    (Unaudited)     (Audited)  
Assets                
Current Assets                
Cash and cash equivalents   $ 2,624,432       $ 5,720,569  
Restricted cash     -         11,108,816  
Accounts receivable, net     3,843,414         4,856,637  
Other receivables     88,594         120,304  
Income tax receivable     130,957         -  
Due from related parties     252,060         351,357  
Inventories     1,171,728         1,001,977  
Prepaid expenses and other current assets     1,238,196         1,090,787  
Total Current Assets     9,349,381         24,250,447  
Property and equipment, net     203,934         563,131  
Operating lease right-of-use asset     12,344,687         12,573,710  
Investments at fair value     44,413         29,071  
Other receivables     767,982         732,716  
Due from related parties     5,566,247         5,288,264  
Goodwill     31,677,406         31,688,887  
Intangible assets, net     15,421,531         16,107,293  
Other non-current assets     26,286         26,108  
Total Assets     75,401,867         91,259,627  
Liabilities and Stockholders’ Equity                
Current Liabilities                
Accounts payable     2,224,294         1,672,306  
Accrued expenses and other current liabilities     3,391,966         3,809,540  
Deferred revenue     5,050,855         6,391,993  
Operating lease liabilities – current portion     1,325,839         1,590,538  
Income tax payable     -         355,023  
Loans payable – current portion     330,108         334,391  
Loans payable – related parties – current portion     1,018,628         2,932,090  
Convertible debt obligations, current portion     3,773,790         5,752,328  
Short term debt     369,245         539,245  
Total Current Liabilities     17,484,725         23,377,454  
Due to related parties     1,812         1,729  
Operating lease liabilities – non-current portion     11,436,814         11,394,337  
Loans payable – non-current portion     412,121         428,025  
Convertible debt obligations, non-current portion     137,500         2,223,523  
Deferred tax liability     3,300,516         3,391,129  
Derivative liabilities     36,488,594         36,488,594  
Total Liabilities     69,262,082         77,304,791  
Commitments and Contingencies Stockholders’ Equity:                
Contributed capital     114,218,578         110,534,000  
Subscriptions receivable     (1,900,857   )     (1,900,857 )
Reserves     (33,697,262   )     (32,933,714 )
Accumulated deficit     (78,522,639   )     (68,539,210 )
Capital and reserves attributable to owners of Genius Group Ltd     (97,820 )       7,160,219  
Non controlling interest     6,041,965         6,794,617  
Total Stockholders’ Equity     6,139,785         13,954,836  
Total Liabilities and Stockholders’ Equity     75,401,867         91,259,627  

GENIUS GROUP LIMITED AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In US Dollars)

    June 30,     June 30,  
    2023       2022(Restated)  
    (Unaudited)     (Unaudited)  
Revenue   $ 11,795,714       $ 5,343,247    
Cost of revenue     (5,593,340   )     (3,112,654   )
Gross profit     6,202,374         2,230,593    
Operating (Expenses) Income                
General and administrative     (13,672,668   )     (5,249,054   )
Depreciation and amortization     (919,568   )     (178,807   )
Other operating income     1,213         166,001    
Legal expenses     (776,867 )       -    
Loss from foreign currency transactions     2,425         58,759    
Total operating expenses     (15,365,465   )     (5,203,101   )
Loss from Operations     (9,163,091   )     (2,972,508   )
(Expense) Income                
Interest expense, net     (1,999,361   )     (99,298   )
Impairment loss     -         (480,372 )  
Other expense     (5,227 )       -    
Other income     68,311         30,713    
Total Other Expense     (1,936,277   )     (548,957   )
Loss Before Income Tax     (11,099,368   )     (3,521,465   )
Income Tax Benefit     324,666         24,238    
Net Loss     (10,774,702   )     (3,497,227   )
Other comprehensive income:                
Foreign currency translation     (599,818   )     (69,375  
Total Comprehensive Loss     (11,374,520   )     (3,566,602   )
Total Comprehensive Loss is attributable to:                
Owners of Genius Group Ltd     (10,746,977   )     (3,420,929   )
Non controlling interest     (627,543   )     (145,673   )
Total Comprehensive Loss     (11,374,520   )     (3,566,602   )
Weighted-average number of shares outstanding, basic and diluted     33,668,483         17,794,634    
Basic and diluted loss per share from continuing operations     (0.32   )     (0.20   )

 GENIUS GROUP LIMITED AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In US Dollars)

    For the Six months Ended  
    June 30, 2023     June 30, 2022  
    (Unaudited)     (Unaudited)  
Cash Flows from Operating Activities                
Net loss   $ (10,774,701   )   $ (3,497,227   )
Adjustments to reconcile net loss to net cash used in operating activities:                
Stock-based compensation     402,565         150,317    
Depreciation and amortization     1,208,772         835,757    
Provision for interest expense     1,277,162            
Provision for doubtful accounts     170,318            
Deferred income taxes             (29,679 )  
Impairment loss             480,372    
Gain on foreign exchange transactions     (2,425   )     (58,759 )  
Interest expense on lease liabilities     444,553         58,026    
Changes in operating assets and liabilities:                
Accounts receivable     842,905         (480,438 )  
Other receivable     (3,556 )          
Prepaid expenses and other current assets     (147,408   )     (1,840,348 )  
Inventory     (169,751 )       (3,651 )  
Accounts payable     551,988         430,633    
Accrued expenses and other current liabilities     (417,574 )       (609,406 )  
Deferred revenue     (1,341,138 )       82,841    
Deferred tax liability     (90,613 )          
Income tax payable     (485,980 )          
Other non-current asset     178            
Total adjustments     2,239,996         (984,335 )  
Net Cash Used in Operating Activities     (8,534,705   )     (4,481,562   )
Cash Flows from Investing Activities                
Internally developed software     (322,419   )     (313,876   )
Purchase of equipment     (111,151   )     (79,455   )
Acquisitions     (2,299,231   )     (2,116,456  
Deposit on investment in UAV             (6,604,194 )  
Purchase of investment     (20,000   )     (80,514 )  
Net Cash Used in Investing Activities     (2,752,801   )     (9,194,496   )
Cash Flows from Financing Activities                
Amount due to/from related party, net     726,648         (338,280 )  
Proceeds from IPO, net             18,060,447    
Proceeds from convertible debt, net of issuance costs     8,923,994         -    
Proceeds from equity issuances             2,605,215    
Issuance from convertible debt             (147,582 )  
Lease liabilities     (639,096   )     (306,811   )
Repayment of loan     (170,000   )     (192,465   )
Net Cash Provided by Financing Activities     8,841,547         19,680,524    
Effect of Exchange Rate Changes on Cash     (650,096   )     (212,817 )  
Net (Decrease) Increase in Cash     (3,096,137       5,791,649    
Cash – Beginning of year     5,720,569         1,784,938    
Cash – End of period     2,624,432         7,576,587    

Summary Combined Consolidated Financial Data

  Unaudited Financials Six Months Ended (USD 000’s)     Audited FinancialsYear Ended(USD 000’s)
Summary Income Data: June 30, 2023     June 30, 2022 (Restated)     December 31,2022     December 31,2021
Sales 11,796         5,343         18,194         8,295  
Cost of goods sold (5,593 )       (3,112 )       (9,555 )       (5,537 )
Gross profit 6,203         2,231         8,639         2,757  
Other Operating Income 4         225         280         324  
Operating Expenses (15,639 )       (5,428 )       (50,502 )       (7,250 )
Operating Loss (9,162 )       (2,972 )       (41,583 )       (4,168 )
Other income 68         31         419         -  
Other Expense (2,005 )       (580 )       (15,151 )       (450 )
Net Loss Before Tax (11,099 )       (3,521 )       (56,315 )       (4,618 )
Tax Expense 325         24         1,064         129  
Net Loss After Tax (10,774 )       (3,497 )       (55,252 )       (4,489 )
Other Comprehensive Income (600 )       (70 )       (1,045 )       230  
Total Loss (11,374 )       (3,567 )       (56,297 )       (4,259 )
Net income per share, basic and diluted (0.32 )       (0.20 )       (2.44 )       (0.28 )
Weighted-average number of shares outstanding, basic and diluted 33,668,483         17,794,634         22,634,366         16,155,812  
    Unaudited FinancialsSix Months Ended,(USD 000’s)     Audited FinancialsYear Ended(USD 000’s)  
    June 30, 2023     December 31,2022     December 31,2021  
Summary Balance Sheet Data:                        
Total current assets     9,350       24,251       6,496  
Total non-current assets     66,052       67,009       11,099  
Total Assets     75,402       91,260       17,595  
Total current liabilities     17,486       23,378       7,140  
Total non-current liabilities     51,776       53,927       2,469  
Total Liabilities     69,262       77,305       9,609  
Total Shareholders’ Equity     6,140       13,955       7,986  
Total Liabilities and Shareholders’ Equity     75,402       91,260       17,595  

Pro Forma Financials

To provide an accurate discussion and analysis of financial condition and results of operation, the financial reports provided and discussed below are grouped in the following two sections:

Condensed financials for the Group including acquired companies results for acquisitions closed before June 30th 2023: Audited financials provided for the financial years ended December 31, 2022 and 2021 and unaudited condensed financials provided for the six-month period ended June 30, 2023 and June 30, 2022.

Pro forma financials for Genius Group (The full Group including the Group and all Acquisitions YTD): Unaudited pro forma financials provided for the six-month period ended June 30, 2023 for the full Group, including all the acquired companies YTD as if they were operating as one during these periods and include additional two acquisitions: University of Antelope Valley (acquired July 2022) and Revealed Film (acquired October 2022) and excluding Entrepreneur Resorts Ltd as spin off entity

    Genius Group UnauditedPro formaSix Months EndedJune 30, 2023  
    Unaudited Financials     Entrepreneur Resorts     Acquisitions     Pro forma Financials  
    (USD 000’s)     (USD 000’s)     (USD 000’s)     (USD 000’s)  
Sales     11,796         (2,834 )     -       8,962  
Cost of goods sold     (5,593 )       963       -       (4,631 )
Gross profit     6,203         (1,871 )     -       4,331  
Other Operating Income     4         3       -       7  
Operating Expenses     (15,639 )       1,613       -       (13,756 )
Operating Loss from the continuing operations     (9,162 )       255       -       (9,418 )
    Genius Group UnauditedPro formaSix Months EndedJune 30, 2023  
    Unaudited Financials     Entrepreneur Resorts     Pro formaAdjustment     Pro forma Financials  
    (USD 000’s)     (USD 000’s)     (USD 000’s)     (USD 000’s)  
Summary Balance Sheet Data:                                
Total current assets     9,350       3,229       -       12,580  
Total non-current assets     66,052       (946 )     -       65,106  
Total Assets     75,402       2,283       -       77,686  
Total current liabilities     17,486       (2,527 )     -       14,959  
Total non-current liabilities     51,776       (2,266 )     -       49,511  
Total Liabilities     69,262       (4,793 )     -       64,470  
Total Stockholders’ Equity     6,140       7,076       -       13,216  
Total Liabilities and Shareholders’ Equity     75,402       2,283       -       77,686  

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 impairments plus revaluation adjustment of contingent liabilities plus share-based compensation expenses plus bad debt provision.

Derived from Financial Statements

    Genius GroupUnaudited FinancialsSix Months Ended(USD 000’s)     Group Audited FinancialsYear Ended(USD 000’s)  
    June 30, 2023     June 30,2022     December 31,2022     December 31,2021  
Net Income (Loss)     (10,775 )         (3,497 )       (55,252 )     (4,489  
Tax Expense     (325 )         (24 )       (1,064 )     129    
Interest Expense, net     1,999           99         1,312       450    
Depreciation and Amortization     1,209           836         2,351       1,575    
Impairments     0           480         28,246       0    
Revaluation adjustment of ContingentLiabilities     0           0         13,838       0    
Stock Based Compensation     403           150         1,309       294    
Bad Debt Provision     170           0         1,509       (39 )  
Adjusted EBITDA     (7,318 )         (1,956 )       (7,750 )     (2,338 )  

Pro forma Financials

    Genius GroupUnaudited Pro formaSix Months Ended June 30, 2023  
    Unaudited Financials     Entrepreneur Resorts     Acquisitions     Pro forma Financials  
    (USD 000’s)     (USD 000’s)     (USD 000’s)     (USD 000’s)  
Net Loss     (10,775 )     -         -       (10,775 )
Tax Benefits     (325 )     -         -       (325 )
Interest Expense, net     1,999       -         -       1,999  
Depreciation and Amortization     1,209       (30 )       -       1,179  
Impairment     -       -         -       -  
Revaluation Adjustment of Contingent Liabilities     -       -         -       -  
Stock Based Compensation     403               -       403  
Bad Debt Provision     170               -       170  
Adjusted EBITDA     (7,318 )     (30 )       -       (7,348 )

Contacts

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

Media Contacts: Adia PREmail: gns@adiapr.co.uk

US Investors: Dave Gentry, RedChip Companies Inc1-800-RED-CHIPGNS@redchip.com

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