United States securities and exchange commission logo
September 28, 2021
Roger Hamilton
Chief Executive Officer
Genius Group Ltd.
8 Amoy Street, #01-01
Singapore 049950
Re: Genius Group Ltd.
Amendment No. 1 to
Registration Statement on Form F-1
Filed August 31,
2021
File No. 333-257700
Dear Mr. Hamilton:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
August 5, 2021 letter.
Amendment No. 1 to Registration Statement on Form F-1 Filed August 31,
2021
Prospectus Summary
Overview
Our Company, page 5
1. We note that you
include results and metrics here, and throughout the filing, for certain
historical periods
while not disclosing those same results and metrics for 2020. Please
revise here, and
throughout the filing, to discuss historical operating results for all periods
presented in the
financial statements including 2020 in your graphics and charts, as
appropriate.
Roger Hamilton
FirstName LastNameRoger Hamilton
Genius Group Ltd.
Comapany 28,
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2021 Group Ltd.
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2. We reissue comment 4 in part. Please revise the disclosure to
separately quantify the
contribution of revenue of each of the Pre-IPO Group companies.
3. We note your revised disclosure in response to comment 5, and reissue
the comment in
part. Please further explain how your entrepreneur curriculum, as
defined on page 109,
relates to the businesses of Education Angels, E-Square, and
University of Antelope
Valley. In particular, please tell us why a childcare program for 0-5
year-olds (Education
Angels), a school with general education curriculum for pre-primary
and secondary school
programs (E-Square) and a university with a general education program
(University of
Antelope Valley) are actually specific entrepreneur education
programs. To the extent
that you are focused on acquisition of education programs in general,
please state this
specifically and clarify that these do not all relate to a particular
strategic focus on
entrepreneurial education.
4. We note your response to comment 6, and reissue the comment in part.
Please revise to
explain, as you have in your response, what it means that your growth
model is to acquire
accredited schools, colleges and universities.
5. We note your revised disclosure in response to comment 8, and reissue
the comment in
part. With respect to the chart on page 9 under the heading "Our
Revenue Growth," we
note that the second column from the right does not appear to
accurately portray the
growth in your revenue from the IPO acquisitions in 2020. In this
regard, the disclosure
in the column suggests that the IPO Acquisitions contributed to $4.4
million of your
growth in revenue in 2020. However, the disclosure throughout the rest
of your filing
suggests that $16.6 million of your revenue growth in 2020 was
attributable to the IPO
Acquisitions. Please also make clear that the revenue that is included
is based on the pro
forma presentation. In addition, please clarify here and elsewhere
that you discuss the
company's 2020 revenues that over 40% of your total pro forma revenue
in 2020 is from
University of Antelope Valley.
A Brief History, page 8
6. Refer to prior comments 10, 43, and 44. You confirmed that the
combined revenues of
$9.9 million and net loss of ($1.6) million for 2019 includes both
Entrepreneurs Institute,
acquired in August 2019, and Entrepreneur Resorts, acquired in July
2020. Both
companies were under common control, and as a result, you indicate
that you are required
to present the consolidated audited financial statements of the
Pre-IPO Group including
Entrepreneurs Institute and Entrepreneur Resorts in your registration
statement for both
2019 and 2020. On page F-9 in Note 2 to the Consolidated Financial
Statements you
disclose that you account for business combinations using the
acquisition method of
accounting in accordance with IFRS 3, you have elected to do so for
common control
business combinations, and this accounting policy is applied
consistently to similar
transactions. Please tell us how your accounting treatment complies
with paragraph 7
of IFRS 3, which states that the date on which the acquirer obtains
control of the acquiree
is generally the date on which the acquirer legally transfers the
consideration, acquires the
Roger Hamilton
FirstName LastNameRoger Hamilton
Genius Group Ltd.
Comapany 28,
September NameGenius
2021 Group Ltd.
September
Page 3 28, 2021 Page 3
FirstName LastName
assets and assumes the liabilities of the acquiree, which is the
closing date. In this regard,
please tell us your consideration for reassessing your accounting and
providing the
disclosures required by B64(q) of IFRS 3 for your acquisition
transactions during 2019
and 2020.
In addition, since you have elected to account for common control
business combinations
using the acquisition method of accounting, please tell us how your
recognition
of Entrepreneur Resorts shareholders equity immediately prior to
the acquisition
complies with paragraph 10 of IFRS 3, which states that the acquirer
should recognize,
separately from goodwill, the identifiable assets acquired, the
liabilities assumed and any
non-controlling interest in the acquiree.
Non-IFRS Financial Measures--Adjusted EBITDA
Genius Group Operating Data (GeniusU Ltd), page 24
7. We note your response to comment 15, and that you have experienced a
conversion rate of
1% to 1.5% of free students becoming paid students each year. Please
revise to include
the conversion rate from free to paid students in this section, or
tell us why you do not
identify such conversion rate as a key business metric. In addition,
please revise to clarify
how you calculated this conversion rate, including whether the
conversion rate applies to
free students becoming paid students under your GeniusU Ltd and
Property Investors
Network businesses, as well as any of your other businesses. In this
regard, we note that
you only appear to track number of free students under your GeniusU
Ltd and Property
Investors Network businesses based on the operating data disclosed on
pages 24-25.
8. Please tell us why you separately present GeniusU Operating Data, but
do not separately
present operating data for any other business. Please also explain why
you present certain
operating data for GeniusU, such as Average Acquisition Cost per
Student, Net Loss, and
Adjusted EBITDA margin, but do not present it for any of the other
businesses within the
education segment. Please also disclose whether the method for
calculating the operating
data is the same for all businesses. To the extent it varies, please
highlight this fact so that
investors understand whether the data is comparable across businesses.
Risks Related to Our Business and Industry
"The COVID-19 pandemic has significantly negatively impacted segments of . .
..", page 32
9. In light of the time that has passed since the initial outbreak of the
novel coronavirus
(COVID-19) pandemic in December 2019, please revise this risk factor
to specifically
discuss the impact that the COVID-19 pandemic has had on your business
to date, rather
than presenting such risks as hypothetical. In this regard, please
revise to clarify that
COVID-19 has impacted you in 2020, if true, and disclose any material
effects
of COVID-19 on your business, financial condition and results of
operations. For
instance, we note your disclosure elsewhere in the filing indicating
that COVID-19
restrictions contributed to the 55% decrease in your campus revenue
from $4.4 million in
2019 to $2 million in 2020, as well as to the 11% increase in your
digital education
Roger Hamilton
Genius Group Ltd.
September 28, 2021
Page 4
revenue from $4.8 million in 2019 to $5.3 million in 2020. Also,
discuss what
management expects the pandemic's future impact will be (considering,
for example, the
prevalence of COVID-19 vaccines), how management is responding to
evolving events,
and how it is planning for COVID-19-related uncertainties. Please make
conforming
changes to your Management s Discussion and Analysis of Financial
Condition and
Results of Operations section. For guidance, consider the Division of
Corporation
Finance's Disclosure Guidance: Topic Nos. 9 and 9A, available on our
public website.
Capitalization, page 50
10. The amounts of your cash and cash equivalents, shareholders' equity
and total
shareholders' equity in the pro forma column of your capitalization
table do not agree to
the amounts in your pro forma balance sheet on pages 57 and 58. Please
reconcile and
revise these disclosures.
Summary Combined Unaudited Pro Forma Financial Data for Genius Group (Including
IPO
Acquisitions)
Genius Group (Pre-IPO Group and IPO Acquisitions) Profit and Loss for the Year
Ended
December 31, 2020, page 56
11. We note the changes made to your pro forma statement of operations and
footnote (9) in
response to comment 21. Please explain why the weighted average shares
used to
compute both your historical and pro forma basic and diluted net loss
per share for 2020
are the same when you issued 2,091,246 shares in connection with the
IPO Acquisitions
as disclosed in footnote (5). Please advise or revise as appropriate.
Refer to the guidance
in Rule 11-02(a)(9) of Regulation S-X.
Footnotes relating to the Financial Statements above, page 58
12. Reference is made to footnote (5). Please revise adjustment (5) to
eliminate the
$(517,319) adjustment for amortization of intangible assets. Since the
pro forma balance
sheet is being prepared assuming the acquisition was completed on
December 31, 2020,
no adjustment for amortization should be included in the pro forma
balance sheet
adjustments.
13. Reference is made to footnote (7). Please revise your adjustment for
the deferred tax
liability to eliminate the portion of the adjustment attributable to
the income tax provision
of $(108,567). Since the pro forma balance sheet assumes the
acquisition was completed
on December 31, 2020, no adjustment for the income tax provision
should be included in
the calculation of your pro forma balance sheet adjustments.
14. Reference is made to footnote (8). Please revise to eliminate the
retained earnings
FirstName LastNameRoger Hamilton
adjustment of $(408,752) as this appears to represent the net effect of
the adjustments
Comapany NameGenius
referenced Group(5)
in footnotes Ltd.
and (7), which we have requested that you
eliminate in our
comments
September noted
28, 2021 above.
Page 4
FirstName LastName
Roger Hamilton
FirstName LastNameRoger Hamilton
Genius Group Ltd.
Comapany 28,
September NameGenius
2021 Group Ltd.
September
Page 5 28, 2021 Page 5
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 66
15. We note your amended disclosure in response to comment 24, and that
you saw a "marked
increase in the amount of activity on GeniusU" during the pandemic.
Please revise your
to disclosure to elaborate on this "marked increase" and quantify the
impact. Please also
discuss the effects of the pandemic on the other businesses aside from
GeniusU and
discuss whether you expect it to continue in future periods.
Key Business Metrics and Non-IFRS Financial Measures
Key Business Metrics, page 67
16. We note your amended disclosure in response to comment 25, and reissue
the comment in
part. Please amend to quantify the metrics discussed in this section
and discuss each
metric's applicability to each of the eight companies within your
group, as the disclosure
appears to relate only to GeniusU. In doing so, please also discuss
the specific
reasons why each individual metric provides meaningful information to
investors, given
the fact that each company within your group appears to contribute to
your revenue and
generates revenue in different ways.
17. We note that you provide operating data for Entrepreneur Resorts under
your education
segment in the operating data on page 25, including number of
students, number of paying
students, number of partners, education revenue, revenue from new
paying students, new
paying students, and total paying students. We also note your
disclosure indicates
that groups attend events and courses at your Entrepreneur Resorts
venues that take place
on GeniusU. Please clarify whether GeniusU or Entrepreneur Resorts
generates revenue
specifically from the fees paid to attend events and courses, not
including payment for
food and accommodations. Based on the fact that groups attend GeniusU
events and
courses at the Entrepreneur Resorts, please also clarify whether any
of the
abovementioned metrics are counted twice in the operating data under
the education
segment on page 25 (i.e., accounted for under both Entrepreneur
Resorts and GeniusU).
Further, revise to discuss how Entrepreneur Resorts generates revenue
under your
education segment and how certain of the operating data relating to
the number of
students is relevant to Entrepreneur Resorts.
Contractual Obligations, page 77
18. We note your response to comment 30, which suggests that you have
added the novation
agreement for Genius Central Singapore Pte Ltd as an exhibit to the
registration
statement. However, we were unable to locate any such agreement.
Please advise/revise.
Business, page 82
19. We partially reissue comment 36, as your disclosure in this section
continues to focus
primarily on the business of GeniusU. As requested in prior comment
36, please revise
Roger Hamilton
Genius Group Ltd.
September 28, 2021
Page 6
this section to include a comprehensive description of the business
and operations of each
of the companies that will be part of the Genius Group, including all
of the IPO
Acquisitions. For instance, in your "Our Curriculum" subsection on
page 104,
please revise to provide a comprehensive summary of your entire
education curriculum
and combined products to be offered by all of your companies in both
the Pre-IPO Group
and IPO Acquisitions. Please ensure it is clear which business is
offering which
programs, as your current disclosure references general programs like
microcamps, but it's
unclear if this relates to any business outside of GeniusU. In
addition, revise to include a
description of all material intellectual property related not only to
the Pre-IPO Group
companies, but also the IPO Acquisitions. Please make confirming
changes throughout
this entire section of your registration statement.
Our Company, page 83
20. We note your amended disclosures in response to comment 34, and
reissue the comment
in part. Please amend your disclosure to explain why you have
analogized your growth
plan to the fifteen-year plan set by the United Nations to achieve the
17 United Nations
Sustainable Development Goals. It is unclear how this relates to your
business given that
these development goals address things like hunger, poverty, clean
water and sanitation,
and clean energy. In the alternative, please remove references to the
United Nations
Sustainable Development Goals. We also note your disclosure that you
intend to integrate
your education tools into existing education systems, and ultimately
intend to have a full
curriculum accredited and receiving funding from multiple government
bodies. Given
that your company contains a number of businesses relating from
childcare to for-profit
university education, it is unclear how your current businesses fit
into your long-term
goals, if at all. Please clearly explain how your goals are supported
by your current
businesses, or please remove this disclosure. To the extent you keep
this disclosure,
please indicate whether you have made any progress toward the goals
you list in this
section. If the goals are aspirational only, please state this
clearly.
Our History and Corporate Structure, page 89
21. We note your disclosure here and on page 100 indicates that you intend
to integrate and
digitize Education Angels' business on to your GeniusU platform to
provide your global
community of students and partners access to Education Angels' business.
Yet, your
disclosure indicates that Education Angels generates revenue from
parents of
young children from 0-5 years old paying for an Education Angels'
trained educator to
both educate and care for their child. To the extent that a significant
portion of Education
FirstName LastNameRoger Hamilton
Angels' revenues are dependent upon the trained educator's care for the
children, please
Comapany NameGenius
enhance Group to
your disclosure Ltd.
explain how you intend to integrate and
digitize this element of
Education
September Angels'
28, 2021 Page business
6 onto your GeniusU platform.
FirstName LastName
Roger Hamilton
FirstName LastNameRoger Hamilton
Genius Group Ltd.
Comapany 28,
September NameGenius
2021 Group Ltd.
September
Page 7 28, 2021 Page 7
FirstName LastName
Our Courses, Products and Services, page 93
22. You state that E-Square is being developed as a primary school campus
model that you
are licensing to global partners and city leaders, beginning with
Southeast Asia, the U.K.,
and the U.S. Please clearly disclose the status of such development,
the negotiations
relating to any licenses, and when you anticipate that you will be
ready to license this
program. To the extent that you have not taken any steps toward
licensing, please state
this clearly.
Our Conversion Model, page 98
23. Reference is made to the measures you refer to on page 98 as
"Marketing Cost per
Student" and 24 Month Revenue per Student. In this regard, we
have the following
comments related to these measures:
Based on your disclosure on page 98, it appears that you are
using free students to
calculate the $0.76 marketing cost per student and $15.46 revenue
per student within
24 months. Please revise to clarify whether you include the
number of free students
in these calculations, and if so, why.
Please revise to clarify whether your calculations of
"Marketing Cost per Student"
and 24 Month Revenue per Student include revenue derived
from all of the IPO
Acquisitions that contribute to your education revenue segment
and GeniusU Ltd, or
only education revenue derived from GeniusU Ltd.
We note that the graphic on page 98 depicting your student
pathway indicates that
1,326 [s]tudents pay for courses, camps, mentoring and
memberships.
Yet according to the narrative disclosure provided on page 98,
only one percent of
these 1,326 students convert to paying students that pay for
courses, camps,
mentoring and memberships. Please advise or revise your
disclosure accordingly.
Given these measures appear to be distinguishable from the
metrics average
acquisition cost per new paying student and average annual
revenue per new paying
student referred to on pages 24-25 and 68, please tell us why you
have not included
"Marketing Cost per Student" and "24 Month Revenue per Student"
in the operating
data presented on pages 24-25 and in your discussion of "Key
Business Metrics"
starting on page 67.
24. Please revise your disclosure to clarify how you calculate the
"Lifetime Value" of your
students and partners. For instance, it is unclear how you calculate
the annual average
revenue by three years. If you are using overall revenue for the
entire Pre-IPO Group and
IPO Acquisitions to calculate the annual average revenue, please tell
us why you believe
this is appropriate given that, for example, Entrepreneur Resorts does
not appear to have
students and E-Square does not appear to have any partners. In
addition, please disclose
why you believe it is appropriate to use three years to estimate the
"Lifetime Value" of
Roger Hamilton
Genius Group Ltd.
September 28, 2021
Page 8
your students and partners. Further, please revise to clarify whether
you are referring only
to paying students and partners in your calculation of Lifetime Value
of your students and
partners, or if this calculation also includes free students and
non-paying partners. To the
extent these calculations include free students and non-paying
partners, please tell us why
you believe this is appropriate.
Our Strategy
Partnership Strategy, page 108
25. Based on your operating data on page 25, we note that all of the
companies within your
group appear to utilize partners, except for E-Square. However, it
appears that this section
only discusses your partnership strategy as it relates to GeniusU Ltd.
Please revise your
disclosure to discuss your partnership strategy as its relates to all
of the companies within
your group, including the IPO Acquisitions. As a related matter, we
note that the graphic
under the heading Our Growth Model on page 100 references global
sponsors, country
partners, city leaders, event partners, mentors and faculty, genius
partners, and product
partners. In an appropriate place in your filing, please revise to
discuss how each of these
entities fits into each company within your group, including the IPO
Acquisitions.
Further, to the extent any such entities would be relevant to your
discussion in this section,
please revise your disclosure accordingly.
Related Party Transactions, page 127
26. We note your amended disclosure in response to comment 40, and reissue
the comment in
part. Please revise your disclosure on the top of page 127 to indicate
that the related party
transactions set forth below occurred during the past three fiscal
years up to the date of the
prospectus.
Genius Group Limited and Subsidiaries Consolidated Financial Statements
Consolidated Statements of Operations and Comprehensive Income, page F-5
27. Please revise to disclose basic and diluted earnings (loss) per share
from continuing
operations for all periods presented on the face of your consolidated
statements of
operations and comprehensive income as required by paragraph 66 of IAS
33. Also, the
notes to the consolidated financial statements should be revised to
include the disclosures
outlined in paragraph 70 of IAS 33, as applicable.
Exhibits
FirstName LastNameRoger Hamilton
28. Reference is made to Exhibit 23.5. The consent of Lightheart, Sanders
and Associates is
Comapany NameGenius
currently stale as itGroup Ltd.
is older than 30 days. Please revise to include a
currently dated
consent
September of thisPage
28, 2021 independent
8 accounting firm.
FirstName LastName
Roger Hamilton
FirstName LastNameRoger Hamilton
Genius Group Ltd.
Comapany 28,
September NameGenius
2021 Group Ltd.
September
Page 9 28, 2021 Page 9
FirstName LastName
General
29. We note your response to comment 50, and that you have removed the
statement on your
website indicating that you had over $29 million in revenue in 2019.
However, your
website continues to state that you had over $29 million in revenue in
2019. Please advise
or revise accordingly.
30. Your disclosure throughout the registration statement continues to
focus primarily on
GeniusU. For example, the Prospectus Overview begins with a discussion
of the number
of students in GeniusU, the MD&A Overview addresses only GeniusU, and
the Business
section places significant focus on GeniusU including its particular
curriculum, courses,
products, and EdTech platform. It is unclear why you are focusing
primarily on GeniusU
given that GeniusU is only one of four businesses that are part of
Genius Group Ltd, and
that in the post-IPO company Genius U will be one of eight separate
businesses with
various business plans. In particular, we note that over 40% of your
pro forma revenue
for 2020 was from University of Antelope Valley, which suggests that
your revenue going
forward will come disproportionately from the university, but your
disclosure about the
university is minimal. Please substantially revise your prospectus
throughout to present a
comprehensive and balanced picture of the post-IPO company. In
addition, we note
throughout that you discuss disrupting the education industry and that
your "entrepreneur
education system" is present in all of the businesses that will be
part of the post-IPO
company. However, given the significant differences in each of the
businesses, such as
childcare for ages 0-5 in New Zealand, a small private school in South
Africa with 500
students, and a small university in California, it is unclear how
these businesses are related
and why they would be part of one "entrepreneur education system"
given the differences
in focus and geography. To the extent that the company's focus is
acquiring various
private educational schools or facilities, but not integrating them
into one system, please
clearly state this fact and remove the disclosure suggesting that
these companies are
related or all use the same curriculum. Further, if the
entrepreneurial education system
relates only to GeniusU, please also make this clear. We have issued
some related
comments in our comment letter, but please note these comments are not
exclusive and
you should revise the registration statement thoroughly to present a
balanced picture of the
post-IPO company.
31. The Stock Purchase Agreement for University of Antelope Valley filed
as Exhibit 2.4
indicates in Section 7.7 that you shall have completed the IPO or
secured an equity
investor to fund the closing consideration by September 30, 2021,
otherwise the
University is entitled to terminate the agreement according to Section
9.1(b). Please
disclose whether you have further amended the Stock Purchase Agreement
to extend this
date or have otherwise amended the agreement, and file such agreement
as an exhibit.
Please also tell us whether the consideration amount has changed given
that you have not
completed the IPO, as contemplated by Section 1.4(b)(1)(b). Please
revise your disclosure
in the registration statement to disclose the material terms of the
Stock Purchase
Agreement, such as calculation of the Bonus Closing Consideration, and
indicate the
Roger Hamilton
Genius Group Ltd.
September 28, 2021
Page 10
consents that are required to complete the transaction, such as those
discussed in Section
7.3, and whether you have received all such consents.
32. We note that each of your Share Purchase Agreements filed as exhibits
2.1, 2.2 and 2.3
are linked to a September 30, 2021 deadline for the IPO, and some of the
agreements
indicate that they will "terminate with immediate effect" if the IPO does
not take place by
this date. Please tell us the status of each of these agreements and file
amendments, if
any, as exhibits. Please also revise to disclose the material terms of
each of these
agreements in the registration statement.
You may contact Patrick Kuhn at 202-551-3308 or Linda Cvrkel at
202-551-3813 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas Lamparski at 202-551-4695 or Erin Jaskot at 202-551-3442 with
any other
questions.
Sincerely,
FirstName LastNameRoger Hamilton
Division of
Corporation Finance
Comapany NameGenius Group Ltd.
Office of Trade &
Services
September 28, 2021 Page 10
cc: Benjamin S. Reichel
FirstName LastName