Genius Group (GNS) Announces $18.13M Private Placement
August 25, 2022 7:02 AM
Genius Group Limited (NYSE American: GNS), a world-leading entrepreneur Edtech and education group, has entered into a Securities Purchase Agreement (the “Purchase Agreement”) for the sale of US$18.13 million principal amount of Senior Secured Convertible Notes (the Notes”) in a private placement with an institutional investor (the “Purchaser”) for a purchase price of US$17 million (the “Purchase Price”). The closing of the sale of the Note is subject to certain customary closing conditions and is expected to occur on or about August 26, 2022.
The Purchase Price will be placed in a deposit account subject to a control agreement. The Note will have 30-month maturity and a conversion price of US$5.17 per ordinary share for voluntary conversions of the Note, subject to adjustment. The Note will bear interest at a per annum rate of 5%.
Beginning three months following the closing the Company is required to make equal monthly installment payments of the Note through the maturity date, which payments are payable in cash or ordinary shares of the Company (or a combination of cash and shares), with such shares being valued for each payment on the terms provided for under the Note. Payment of the indebtedness evidenced by the Note will be secured by a security interest in the assets of the Company and certain of its subsidiaries. Certain of the Company’s subsidiaries have guaranteed payment of the Company’s obligations under the Note.
The Note will impose certain customary affirmative and negative covenants upon the Company. Further, if an event of default under the Note occurs, the Purchaser will be able to elect to redeem the Note for cash equal to 115% of the then-outstanding principal amount of the Note (or such lesser principal amount accelerated by the Lender) plus accrued and unpaid interest thereon. The Notes will include a limitation such that the Purchaser’s beneficial ownership will not exceed 4.99% of the Company’s shares outstanding at the time of exercise (which percentage may be decreased or increased by the Purchaser subject to the terms of the Note but may not exceed 9.99%). Until March 1, 2026, the Purchaser will, subject to certain exceptions, have the right to participate up to 30% of any debt, preferred stock, or equity-linked financing of the Company or its subsidiaries.
The securities to be issued to the Purchaser will not be registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The Purchase Agreement requires the Company to file resale registration statements with respect to the shares to be issued as part of monthly installment payments or issuable upon conversion or redemption of the Notes as soon as practicable and in any event within 30 days after the date hereof .
The Company intends to use the net proceeds available from the issuance and sale of the Notes for general corporate purposes and for acquisitions to the extent permitted under the Purchase Agreement.
Boustead Securities, LLC, the Company’s firm commitment IPO underwriter, also acted as the exclusive placement agent for the Private Placement.
Additional information regarding this transaction will be provided in a Form 6-K to be filed by the Company with Securities and Exchange Commission on or around August 29, 2022.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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