Filed
pursuant to Rule 424(b)(2)
Registration
Statement No. 333-280600
Prospectus
Supplement
(To
prospectus dated September 10, 2024)
Genius
Group Limited
Up
to 90,000,000 Subscription Rights to Purchase Shares of Ordinary Shares and
Up
to 90,000,000 Shares of Ordinary Shares Issuable upon Exercise of Subscription Rights
We
are distributing to the holders of our ordinary shares and certain warrants (as described in more detail below), at no charge, non-transferrable
subscription rights (each, a “Right”) to purchase our ordinary shares (the “Rights Offering”).
Each
shareholder will receive one transferable right (the “Right”) for each ordinary share held on January 24, 2025 (the “Record
Date”). The number of Rights to be issued to a shareholder as of 4.30 p.m., Eastern Time, on the Record Date will be rounded up
to the nearest number of Rights. The Company’s ordinary shares are expected to trade “Ex-Rights” on the NYSE American
beginning on January 27, 2025.
Each
Right entitles the holder to purchase one ordinary share of the Company (the “Basic Subscription Right”) at the subscription
price of $0.50 per whole ordinary share (the “Subscription Price).
Rights
holders who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional ordinary shares of the Company
that remain unsubscribed as a result of any unexercised Basic Subscription Rights (the “Over-subscription Right”). The Over-subscription
Right allows a rights holder to subscribe for additional ordinary shares of the Company at the subscription price on a pro rata
basis. Any record date shareholder who sells any Rights will not be eligible to participate in the over-subscription privilege.
Rights
holders who choose not to exercise their Rights may sell their Rights. Trading in the Rights on the NYSE American is expected to begin
on a “when-issued” basis on January 23, 2025 and trade on a “regular way” basis on January 27, 2025 under the
symbol “GNS RT” and continue until the close of trading on the NYSE American on February 13, 2025 (or if the offer is extended,
on the business day immediately prior to the extended expiration date).
The
Rights Offering expires at 4.30 p.m., Eastern Time, on February 14, 2025 (the “expiration date”) unless extended by the Company.
There
is no minimum number of Rights that must be exercised in this Rights Offering, no minimum number that any Rights holder must exercise,
and no minimum number of shares of ordinary shares that we will issue at the closing of this Rights Offering. Once made, all exercises
of Rights are irrevocable. We may extend the subscription period up to an additional 30 days, at our sole discretion.
The
Company plans to use 100% of the net proceeds of the Rights Offering to purchase Bitcoin for its Bitcoin Treasury. The Company anticipates
that, in the event that the Rights Offering is fully subscribed, the net proceeds will be up to $41.7 million. See “Use of Proceeds.”
Our
ordinary shares are listed on The New York Stock Exchange under the symbol “GNS.”
Our
board of directors is making no recommendation regarding your exercise of the Rights. The Rights may be sold, transferred or assigned
and will be listed for trading on NYSE American under the symbol “GNS RT”. You are urged to obtain a current price quote
for our ordinary shares before exercising your Rights.
We
have engaged a financial advisor (the “Financial Advisor”) for this Rights Offering.
We
have engaged Campaign Management LLC. to act as the information agent (the “Information Agent”) for this Rights Offering.
Investing
in our securities involves a high degree of risk. You should read this prospectus supplement and the information incorporated herein
by reference carefully before you make your investment decision. See “Risk Factors” beginning on page S-11 of this
prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of this prospectus supplement. Any representation to the contrary is a criminal offense.
| | |
Per Share | | |
Total | |
| Public offering price (1) | |
$ | 0.50 | | |
$ | 45,000,000 | |
| Financial Advisor fees (2) | |
$ | 0.04 | | |
$ | 3,300,000 | |
| Proceeds, before expenses, to us (3) | |
$ | 0.46 | | |
$ | 41,700,000 | |
| (1) |
Assumes
the Rights Offering is fully subscribed. |
| (2) |
In
connection with the Rights Offering, we have agreed to pay the Financial Advisor a fee of 7.0% of the proceeds of the Rights Offering.
See “Plan of Distribution.” |
| (3) |
We
have also agreed to pay the Financial Advisor a $150,000 non-accountable expense fee out of the proceeds of the Rights Offering.
These expenses are not included in the table. For more information, see “Plan of Distribution.” |
You
should carefully consider whether to exercise your Rights before February 14, 2025 (unless extended). You may not revoke or revise any
exercises of Rights once made unless we terminate the Rights Offering.
If
you have any questions or need further information about this Rights Offering, please contact Campaign Management LLC, the information
agent for the Rights Offering, by phone at +1 (855) 264-1527 or via email at info@campaign-mgmt.com.
The
date of this prospectus supplement is January 21, 2025
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
You
should rely only on the information we have provided or incorporated by reference in this prospectus supplement and the accompanying
prospectus. We have not authorized anyone to provide you with information different from that contained or incorporated by reference
in this prospectus supplement or the accompanying prospectus.
This
prospectus supplement and any later prospectus supplement is an offer to sell only the securities offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so.
You
should assume that the information contained in this prospectus supplement and in any other prospectus supplement is accurate only as
of their respective dates and that any information we have incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus supplement or any other prospectus supplement for any
sale of securities.
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this Rights Offering.
The second part, the accompanying prospectus, gives more general information, some of which may not apply to this Rights Offering. Generally,
when we refer only to the “prospectus,” we are referring to both parts combined. This prospectus supplement may add to, update
or change information in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement or the
accompanying prospectus.
If
information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement.
This prospectus supplement, the accompanying prospectus, any related free-writing prospectus and the documents incorporated into each
by reference include important information about us, the securities being offered and other information you should know before investing
in our securities.
You
should rely only on this prospectus supplement, the accompanying prospectus, any related free-writing prospectus and the information
incorporated or deemed to be incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing
prospectuses we have prepared. Neither we nor the Financial Advisor has authorized anyone to provide you with information that is in
addition to, or different from, that contained or incorporated by reference in this prospectus supplement, the accompanying prospectus
or in any free writing prospectuses we have prepared. If anyone provides you with different or inconsistent information, you should not
rely on it. We are not offering to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume
that the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free-writing
prospectus is accurate as of any date other than as of the date of this prospectus supplement, the accompanying prospectus or any related
free-writing prospectus, as the case may be, or in the case of the documents incorporated by reference, the date of such documents regardless
of the time of delivery of this prospectus supplement and the accompanying prospectus or any sale of our securities. Our business, financial
condition, liquidity, results of operations, and prospects may have changed since those dates.
Unless
otherwise stated, all references to “us,” “our,” “Genius,” “we,” the “Company”
and similar designations refer to Genius Group Limited. Our logo, trademarks and service marks are the property of Genius Group Limited.
Other trademarks or service marks appearing in this prospectus supplement are the property of their respective holders.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the documents incorporated by reference herein may contain forward looking statements that involve risks and
uncertainties. All statements other than statements of historical fact contained in this prospectus supplement and the documents incorporated
by reference herein, including statements regarding future events, our future financial performance, business strategy, and plans and
objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements
by terminology including “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”
“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although
we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined
under “Risk Factors” or elsewhere in this prospectus supplement and the documents incorporated by reference herein, which
may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking
statements. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New risks emerge from time
to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any
forward-looking statements.
We
have based these forward-looking statements largely on our current expectations and projections about future events and financial trends
that we believe may affect our financial condition, results of operations, business strategy, short term and long term business operations,
and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results
to differ materially from those reflected in the forward looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed (i) in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, (ii)
in this prospectus supplement and, in particular, the risks discussed below and under the heading “Risk Factors” and (iii)
those discussed in other documents we file with the SEC. The following discussion should be read in conjunction with the consolidated
financial statements for the fiscal years ended December 31, 2023 and 2022 and notes incorporated by reference herein. We undertake no
obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may
not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.
You
should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this prospectus supplement.
You are advised to consult any further disclosures we make on related subjects in our reports on Forms 20-F and 6-K filed with the SEC.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus supplement. This summary does not contain all the information
that you should consider before investing in our Company. You should carefully read the entire prospectus supplement, including all documents
incorporated by reference herein. In particular, attention should be directed to our “Risk Factors,” “Information With
Respect to the Company,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and the financial statements and related notes thereto contained herein or otherwise incorporated by reference hereto, before making
an investment decision.
Business
Overview
Our
Company
We
believe that we are a world leading entrepreneur Edtech and education group based on student numbers with a student base of 5.4 million
on GeniusU at the end of June 2024. Our mission is to disrupt the current education model with a student-centered, lifelong learning
curriculum that prepares students with the leadership, entrepreneurial and life skills to succeed in today’s market.
To
help achieve our mission, we have completed an IPO on NYSE American, on April 14, 2022 and then dual listed the company on Upstream on
April 6, 2023 (although we subsequently found that there was little demand for Upstream and on September 19, 2023, Genius Group. Ltd.
publicly announced that it had commenced the process to delist its securities from Upstream, which process was completed on September
29, 2023. The Genius Group will have no further contact with Upstream as a result of this delisting. It will not be involved with or
take part in any distribution of or listing of the shares of its spun off subsidiary, Entrepreneur Resorts Ltd (“ERL”) on
Upstream or any other exchange, which will be the sole responsibility of ERL. The decision to delist the Company from Upstream is due
to complex securities regulations arising from the dual listing on Upstream and NYSE and de minimis use of Upstream by GNS shareholders).
We have also raised additional capital through a follow-on private placement of a Convertible Note in September 2022. We grew from a
Pre-IPO Group of four companies to a post IPO Group of nine companies, once the five Acquisitions closed.
Starting
from October 30, 2023, U.S. individuals have no longer had the authorization to engage in securities trading activities (including buying,
selling, or depositing) on the Upstream/MERJ Exchange. All U.S. shareholders were promptly removed from Upstream and their holdings were
transferred back to the ERL book entry system. Investors will still need to follow the process to claim their ERL shares, but these shares
will be exclusively held with ERL through the registrar. Shareholders have not been able to view their positions on Upstream, as they
can no longer be maintained in Upstream accounts. Trading these securities won’t be possible after a 6-month period, and shareholders
will remain as such until ERL lists on another market or until the SEC accepts the Upstream/MERJ position of 15A-6.
Our
Pre-IPO Group includes our holding company, Genius Group Ltd, our Edtech platform, GeniusU Ltd, and two companies that we acquired: Entrepreneurs
Institute in 2019 and Entrepreneur Resorts in 2020 (spin-off completed on October 2, 2023).
The
entrepreneur education system of our Pre-IPO Group has been delivered virtually and in-person, in multiple languages, locally and globally
mainly via our GeniusU Edtech platform to adults seeking to grow their entrepreneur and leadership skills. Our partners and community
are global with an average of 8,900 new students joining our GeniusU platform each week in 2023. Our City Leaders have been conducting
our events (physically or virtually) in over 100 cities and over 2,500+ faculty members have been operating their microschools using
our online tools.
We
are now expanding our education system to age groups beyond our adult audience, to children and young adults. The five Acquisitions are
our first step towards this. They include: Education Angels, which provides early learning in New Zealand for children from 0-5 years
old; E-Square, which provides primary and secondary school education in South Africa; University of Antelope Valley, which provides vocational
certifications and university degrees in California, USA; Property Investors Network, which provides property investment courses and
events in England, UK; and Revealed Films, a media production company that specializes in multi-part documentaries.
Our
plan is to combine their education programs with our current education programs and Edtech platform as part of one lifelong learning
system, and we have selected these acquisitions because they already share aspects of our Genius Curriculum and our focus on entrepreneur
education.
In
coming years, we plan to continue the growth of our Group through a combination of organic growth of our Edtech platform together with
the acquisition of various education companies that we believe provide complementary programs that can be added to our Genius Curriculum.
This Prospectus provides details of both our acquisition strategy together with our plans to integrate these Acquisitions together with
future acquisitions into our Edtech platform, “entrepreneur education” vision, Genius Curriculum and “freemium”
student and partner conversion models.
We
define “entrepreneur education” as personalized discovery-based learning that leads to higher levels of self-awareness, self-mastery
and self-expression. We believe this in turn develops leadership and entrepreneurial skills through which students can independently
create value and “create a job” rather than being dependent on a system in which they need to “get a job”. We
believe these skills can be nurtured from an early age.
We
also believe these skills can be learned at any age, enabling adults to reskill and upskill themselves. We describe our Genius Curriculum,
together with the philosophy, principles, learning methodology, course content and delivery of our curriculum in the Business section
set forth below in this prospectus.
On
November 12, 2024, the Company adopted a Bitcoin Treasury strategy, with a commitment to keep 90% of its reserves in Bitcoin. To date,
we have acquired 420 Bitcoin for a total cost of $40.0 million, or $95,192 per Bitcoin as of January 21, 2025, and we have achieved a
BTC Yield of 1,649% in Q4 2024.
BTC
Yield is a Bitcoin Treasury KPI that represents the percentage change period-to-period of the ratio between the change in the Company’s
bitcoin holdings and the change in its Assumed Diluted Shares Outstanding. We adopted BTC Yield as a Bitcoin Treasury Key Performance
Indicator (KPI) to help assess the performance of our Bitcoin Treasury strategy, and to ensure any dilution to purchase Bitcoin was accretive
to shareholders.
To
date, we have also secured loan financing for our Bitcoin treasury resulting in, in the aggregate, $19 million principal outstanding
of Bitcoin loan with Arch Lending.
The
Company plans to use 100% of the net proceeds of the Rights Offering to purchase Bitcoin for its Bitcoin Treasury. The Company anticipates
that, in the event that the Rights Offering is fully subscribed, the net proceeds will be up to $42 million. The Company also plans to
pursue one or more additional loan financings of up to, in the aggregate, $18 million. If the Company is successful in raising the maximum
amount in the Rights Offering and obtains additional loans, the Company’s Bitcoin Treasury will increase from approximately $40
million in Bitcoin to $100 million in Bitcoin.
Change
in Registrant’s Certifying Accountant.
On
March 13, 2024, Marcum LLP sent a letter to the Company terminating the auditor client relationship. The termination of auditor relationship
was disclosed in a Form 6-K dated March 19, 2024. The termination is not as a result of a disagreement between the two entities.
On
March 28, 2024, the Group, following approval by the audit committee, appointed Enrome LLP as an independent public accounting firm for
the Group’s IFRS consolidated financial statements for Financial Year 2023 and re-audit Financial Year 2022 and 2021. The engagement
was finalized after inquires completed by the incoming Enrome LLP with Marcum LLP. The appointment of auditor was disclosed in a Form
6-K dated March 28, 2024.
Marcum’s
audit report on our consolidated financial statement as of December 31, 2022 and December 31, 2021 and for each of the years ended December
31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. As previously disclosed in the Company’s Annual Reports on Form 20-F for the
fiscal years ended December 31, 2022, material weaknesses existed in the Company’s internal control over financial reporting at
December 31, 2022 because of
| |
● |
lack
of sufficient documentation of our existing financial processes, risk assessment and internal controls activities and evaluation
of effectiveness of internal controls; |
| |
● |
Inadequate
internal controls, including inadequate segregation of duties, over account reconciliations, the preparation and review of the consolidated
financial statements and untimely annual closings of the books; |
| |
● |
Inadequate
internal control over accounting for and financial reporting related to business combination accounting and subsequent assessment
for impairments as they related to goodwill and other long lived assets; |
| |
● |
Inadequate
information technology general controls as it relates to user access rights and segregation of duties over systems that are critical
to the Company’s system of financial reporting |
During
each of the years ended December 31, 2023 and 2022 and the subsequent interim period through March 28, 2024, neither the Group nor anyone
on behalf of the Group consulted Enrome LLP regarding (i) the application of accounting principles to a specific transaction, either
completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written
report nor oral advice was provided to us that Enrome LLP concluded was an important factor considered by us in reaching a decision as
to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject of a disagreement pursuant to Item 16F(a)(1)(iv)
of Form 20-F, or (iii) any reportable event pursuant to Item 16F(a)(1)(v) of Form 20-F.
Corporate
Information
Our
principal executive offices are located at 8 Amoy Street, #01-01, Singapore 049950, which is also our registered address, and our telephone
number is +65 8940 1200. The address of our website is www.geniusgroup.net. Information contained on, or available through,
our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus. The information on our website
is not a part of, or incorporated in, this prospectus supplement or the accompanying prospectus.
The
Offering
The
following summary contains basic information about the offering and is not intended to be complete. It does not contain all the information
that may be important to you. For a more complete understanding of the securities we are offering, you should read the section entitled
“The Rights Offering.”
| Securities
to be Offered |
We
are distributing to you, at no charge, transferable Rights to purchase one ordinary share (subject to proration) for every one share
of our ordinary shares that you own on the Record Date, either as a holder of record or, in the case of shares held of record by
brokers, banks or other nominees on your behalf, as a beneficial owner of such shares. |
| |
|
| Size
of the Offering |
Up
to 90,000,000 Rights, representing one Right for each share of our ordinary shares currently outstanding, expected issuance before
the record date and one Right for each share of ordinary shares underlying certain of our outstanding warrants (see “Participation
of Certain Warrant Holders” below). |
| |
|
| Subscription
Price |
The
Subscription Price will be $0.50 per Right. Subscribers must fund their subscriptions pursuant to both the Basic Subscription Privilege
and Over-Subscription Privilege at the Initial Price. If, on the Expiration Date, the Alternate Price is lower than the Initial Price,
any excess subscription amounts paid by a subscriber (the “Excess Subscription Amount”) will be put towards the
purchase of additional shares in the Rights Offering unless a subscriber makes an election in the Rights Certificate to have the
Excess Subscription Amount returned in cash. If a subscriber elects to receive his or her Excess Subscription Amount in cash rather
than have such Excess Subscription Amount used to purchase shares in the Rights Offering, the Subscription Agent will refund the
difference to such subscriber promptly after the closing of the Rights Offering with no interest or penalty. |
| |
|
| Basic
Subscription Privilege |
Subject
to proration if more than the Maximum Offering Amount is subscribed for, each Right will entitle its holder to subscribe for one
share of ordinary shares at the Subscription Price. At the end of the subscription period, unexercised Rights will expire and have
no value. |
| Over-Subscription
Privilege |
Rights
holders who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional ordinary shares of the Company
that remain unsubscribed as a result of any unexercised Basic Subscription Rights (the “Over-subscription Right”). The
Over-subscription Right allows a rights holder to subscribe for additional ordinary shares of the Company at the subscription price
on a pro rata basis. Any record date shareholder who sells any Rights will not be eligible to participate in the over-subscription
privilege. For more information, see “Questions and Answers Relating to the Rights Offering” below. |
| |
|
| Proration |
The
Over-Subscription Privilege will be subject to proration to ensure that the aggregate proceeds raised in the Rights Offering does
not exceed the Maximum Offering Amount. For more information regarding proration, including the precise formula for how your Rights
will be prorated, see “Questions and Answers Relating to the Rights Offering – What is proration?” below. |
| |
|
| Record
Date |
4.30
p.m., Eastern Time, January 24, 2025. |
| |
|
| Commencement
Date |
Rights
holders who choose not to exercise their Rights may sell their Rights. Trading in the Rights on the NYSE American is expected to
begin on a “when-issued” basis on January 23, 2025 under the symbol “GNS RTWI” and trade on a “regular
way” basis on January 27, 2025 under the symbol “GNS RT” and continue until the close of trading on the NYSE American
on February 13, 2025 (or if the offer is extended, on the business day immediately prior to the extended expiration date). |
| |
|
| Expiration
Date |
4:30
p.m., Eastern time, February 14, 2025. The Expiration Date is subject to extension of up to 30 days at the sole discretion of the
Company. The Company is not required to give notice of such extension. |
| |
|
| Subscription
Period |
The
Rights Offering will take place beginning on the Commencement Date and trade on a “regular way” basis on January 27,
2025 under the symbol “GNS RT” and continue until the close of trading on the NYSE American on February 13, 2025 of the
Rights Offering. |
| Subscription Procedure |
If
you are a record holder of our ordinary shares, you must deliver a properly completed Rights Certificate (sent to you with this prospectus
supplement) to the Subscription Agent together with payment in cleared or good funds to be received before February 14, 2025 (unless
extended). You may deliver the documents and payments by first class mail or overnight courier service. If you use first class mail
for this purpose, we recommend using registered mail, properly insured, with return receipt requested.
If
you are a beneficial owner of shares that are registered in the name of a broker, dealer, custodian bank or other nominee, you should
instruct your broker, dealer, custodian bank or other nominee to exercise your Rights on your behalf. Please follow the instructions
of your broker or your nominee, who may require that you meet a deadline earlier than the Expiration Date.
|
| |
|
| Delivery of Shares |
As soon as practicable
after the expiration of the Rights Offering, the Subscription Agent will arrange for the issuance of the shares of ordinary shares
purchased pursuant to the Rights Offering. If you hold your shares in the name of a custodian bank, broker, dealer or other nominee,
the Depository Trust Company (the “DTC”) will credit your account with your nominee with the securities you purchased
in the Rights Offering. If you are a holder of record of shares, all shares of ordinary shares that are purchased by you in the Rights
Offering will be issued in book-entry, or uncertificated, form meaning that you will receive a direct registration (DRS) account
statement from our transfer agent reflecting ownership of these securities. |
| |
|
Participation of Certain
Warrant Holders |
Certain holders of our
warrants to purchase ordinary shares have the contractual right to participate in this Rights Offering. Each such warrant holder
will receive one Right for each share of ordinary shares that such warrant holder’s warrant is exercisable for. A total of
6,725,055 Rights will be issued to these warrant holders. |
| No
Recommendation |
None
of the board of directors of our company, the Information Agent or the Financial Advisor is making a recommendation regarding your
exercise of the Rights. You are urged to make your decision to invest based on your own assessment of our business and the terms
of the Rights Offering. Please see “Risk Factors” for a discussion of some of the risks involved in investing
in our securities. |
| |
|
| No
Revocation |
All
exercises of Rights are irrevocable, even if you later learn information that you consider to be unfavorable to the exercise of your
Rights. However, if we make a material change to the terms of the Rights Offering set forth in this prospectus supplement, for example,
extending the Rights Offering beyond the Expiration Date as permitted in this prospectus supplement or materially increasing or decreasing
the Subscription Price (a “Material Change”), you may cancel your subscription and receive a refund of any money
you have advanced. |
| |
|
| No
Minimum Requirements |
There
is no minimum subscription requirement for closing this Rights Offering, and no minimum subscription requirement for any subscription
rights holder. |
| |
|
| Other
Subscription Limitations |
In
the event that the exercise by a stockholder of the Rights could, as determined by us in our sole discretion, potentially result
in a limitation on our ability to use net operating losses, tax credits and other tax attributes (the “Tax Attributes”)
under the Internal Revenue Code of 1986, as amended (the “Code”), and rules promulgated by the Internal Revenue
Service, we may, but we are under no obligation to, reduce the number of shares of ordinary shares to be acquired by such stockholder
to such number of shares of our ordinary shares as we, in our sole discretion, shall determine to be advisable in order to preserve
our ability to use the Tax Attributes. |
| |
|
| Use
of Proceeds |
We
intend to use the net proceeds of this offering to purchase Bitcoin for its Bitcoin Treasury. See “Use of Proceeds.”
|
| |
|
| Subscription
Agent |
VStock
Transfer LLC |
| Information
Agent |
Campaign
Management LLC |
| |
|
| Financial
Advisor |
|
| |
|
U.S.
Federal Income
Tax Considerations |
For
U.S. federal income tax purposes, you generally should not recognize income or loss in connection with the receipt or exercise of
the Rights. You are urged, however, to consult your own tax advisor as to your particular tax consequences resulting from the receipt
and exercise of the Rights. See “Material U.S. Federal Income Tax Considerations.” |
| |
|
| Risk
Factors |
Your
investment in our securities involves substantial risks. You should consider the “Risk Factors” and the “Note
Regarding Forward-Looking Statements” included and incorporated by reference in this prospectus supplement and the accompanying
prospectus, including the risk factors incorporated by reference from our filings with the SEC. |
| |
|
| ticker
symbol |
Our
ordinary shares is listed on NYSE American under the symbol “GNS.” |
| |
|
| Fees
and Expenses |
We
will pay all fees and expenses charged by the Subscription Agent, the Information Agent and the Financial Advisor in connection with
the Rights Offering. You are responsible for paying any other commissions, fees, taxes or other expenses that may be incurred in
connection with the exercise of the Rights. |
| |
|
| Distribution
Arrangements |
Under
the terms and subject to the conditions contained in the Financial Advisor agreement, we have agreed to pay the Financial Advisor
a cash fee of 7% of the gross proceeds of the Rights Offering and $150,000. We have also agreed to indemnify the Financial Advisor
and its affiliates against certain liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”).
The Financial Advisor’s participation in this Rights Offering is subject to customary conditions contained in the Financial
Advisor agreement. The Financial Advisor and its affiliates may provide to us from time to time in the future in the ordinary course
of its business certain financial advisory, investment banking and other services for which it will be entitled to receive customary
fees. The Financial Advisor does not make any recommendation with respect to whether you should exercise the Basic Subscription Privilege
or Over-Subscription Privilege, or to otherwise invest in our company. |
| |
|
| Questions |
If
you have any questions about the Rights Offering, including questions about subscription procedures and requests for additional copies
of this prospectus supplement and the accompanying prospectus or other documents, please contact our Information Agent, Campaign
Management LLC, the information agent for the Rights Offering, by phone at +1 (855) 264-1527 or via email at info@campaign-mgmt.com. |
QUESTIONS
AND ANSWERS RELATING TO THE RIGHTS OFFERING
The
following are examples of what we anticipate will be common questions about the Rights Offering. The following questions and answers
do not contain all of the information that may be important to you and may not address all of the questions that you may have about the
Rights Offering. This prospectus supplement and the documents incorporated by reference into this prospectus supplement and the accompanying
prospectus contain more detailed descriptions of the terms and conditions of the Rights Offering and provide additional information about
us and our business, including potential risks related to the Rights Offering and our business. We urge you to read this entire prospectus
supplement and the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying
prospectus.
Why
are we conducting the Rights Offering?
The
Company plans to use 100% of the net proceeds of the Rights Offering to purchase Bitcoin for its Bitcoin Treasury. The Company anticipates
that, in the event that the Rights Offering is fully subscribed, the net proceeds will be up to $41.7 million. We cannot assure you that
we will not need to seek additional financing in the future.
What
is the Rights Offering?
We
are distributing to the holders of our ordinary shares and certain warrants (as described in more detail below), at no charge, non-transferrable
subscription rights (each, a “Right”) to purchase our ordinary shares (the “Rights Offering”).
Each
shareholder will receive one transferable right (the “Right”) for each ordinary share held on January 24, 2025 (the “Record
Date”). The number of Rights to be issued to a shareholder as of the close of business on the Record Date will be rounded up to
the nearest number of Rights. The Company’s ordinary shares are expected to trade “Ex-Rights” on the NYSE American
beginning on January 24, 2025.
Each
Right entitles the holder to purchase one ordinary share of the Company (the “Basic Subscription Right”) at the subscription
price of $0.50 per whole ordinary share (the “Subscription Price).
Rights
holders who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional ordinary shares of the Company
that remain unsubscribed as a result of any unexercised Basic Subscription Rights (the “Over-subscription Right”). The Over-subscription
Right allows a rights holder to subscribe for additional ordinary shares of the Company at the subscription price on a pro rata
basis. Any record date shareholder who sells any Rights will not be eligible to participate in the over-subscription privilege.
Rights
holders who choose not to exercise their Rights may sell their Rights. Trading in the Rights on the NYSE American is expected to begin
on a “when-issued” basis on January 23, 2025 and trade on a “regular way” basis on January 27, 2025 under the
symbol “GNS RTWI” and continue until the close of trading on the NYSE American on February 13, 2025 (or if the offer is extended,
on the business day immediately prior to the extended expiration date).
The
Rights Offering expires at 4.30 p.m., Eastern Time, on February 14, 2025 (the “expiration date”) unless extended by the Company.
There
is no minimum number of Rights that must be exercised in this Rights Offering, no minimum number that any Rights holder must exercise,
and no minimum number of shares of ordinary shares that we will issue at the closing of this Rights Offering. Once made, all exercises
of Rights are irrevocable. We may extend the subscription period up to an additional 30 days, at our sole discretion.
The Company plans to use 100% of the net proceeds of the Rights Offering to purchase Bitcoin for its Bitcoin Treasury. The Company anticipates
that, in the event that the Rights Offering is fully subscribed, the net proceeds will be up to $41.7 million. See “Use of Proceeds.”
If
I want to subscribe for the shares, how do I get started?
To
subscribe for the ordinary shares, you must follow the process described in the Rights Certificate sent to you. The Rights Certificate
is also available from the Information Agent. For assistance or copies of the documents you may contact the Information Agent, as described
herein.
Where
can I find the number of Rights I hold?
The
number of Rights you hold will be shown on the Rights Certificate. The number shown is the total number of your Rights. You may exercise
any or all of them for shares of ordinary shares, but for purposes of the Basic Subscription Right, the number you exercise cannot exceed
the number shown. That said, if you elect to exercise your Basic Subscription Right in full, you may also elect to exercise your Over-Subscription
Privilege.
What
is the role of the Financial Advisor in this Rights Offering?
The
Financial Advisor, under the terms and subject to the conditions contained in the Financial Advisor agreement, will contact stockholders
of the Company regarding the exercise of their Rights and provide guidance to us on general market conditions and their impact on the
Rights Offering. We have agreed to pay the Financial Advisor certain fees for acting as the Financial Advisor and to reimburse the Financial
Advisor for certain out-of-pocket expenses incurred in connection with the Rights Offering. See the section of this prospectus supplement
titled “Plan of Distribution” for a more complete discussion of the compensation to be paid to the Financial Advisor for
its services as the Financial Advisor. The Financial Advisor is not underwriting or backstopping the Rights Offering and is not making
any recommendation with respect to the Rights (including with respect to the exercise or expiration of such Rights) or shares of ordinary
shares.
The
Financial Advisor may enter into selected dealer agreements with other broker-dealers pursuant to which (i) such other broker-dealers
have agreed or will agree to use their commercially reasonable efforts to procure subscriptions for the shares of ordinary shares, and
(ii) the Financial Advisor has agreed or will agree to reallocate a portion of its Financial Advisor fee to each such broker-dealer whose
clients exercise rights to purchase shares of ordinary shares in this Rights Offering.
Am
I required to exercise any or all of the Rights I receive in the Rights Offering?
No.
You may exercise any number of your Rights, or you may choose not to exercise any Rights at all. Exercising or not exercising your Rights
will not affect the number of shares of our ordinary shares you own (or have the right to own upon exercise of other securities). However,
if you choose not to exercise your Rights, your percentage ownership interest in the Company and your voting and other rights may be
diluted by other stockholder purchases (to the extent we receive any subscriptions in this Rights Offering).
How
do I exercise my Rights?
If
you are a shareholder of record (meaning you hold your shares of our ordinary shares in your name and not through a broker, dealer, bank
or other nominee) and you wish to participate in the Rights Offering, you must deliver a properly completed and signed Rights Certificate,
together with payment of the Subscription Price for the Rights you elect to exercise (including any Over-Subscription Rights that you
would like to exercise, if available), to the Subscription Agent before Friday, February 14, 2025 (unless extended). If you are exercising
your Rights through your broker, dealer, bank or other nominee, you should promptly contact your broker, dealer, bank or other nominee
and submit your subscription documents and payment for the shares subscribed for in accordance with the instructions and within the time
period provided by your broker, dealer, bank or other nominee. For assistance you may contact the Information Agent, as set forth herein.
What
if my shares are held in “street name”?
If
you hold your shares of our ordinary shares in the name of a broker, dealer, bank or other nominee, then your broker, dealer, bank or
other nominee is the record holder of the shares you own. The record holder must exercise the Rights on your behalf. Therefore, you will
need to have your record holder act for you.
If
you wish to participate in this Rights Offering and purchase shares, please promptly contact the record holder of your shares. We will
ask the record holder of your shares, who may be your broker, dealer, bank or other nominee, to notify you of this Rights Offering and
to send you all of the information and documentation necessary for you to participate in the Rights Offering. For assistance you may
contact the Information Agent, Campaign Management LLC, by phone at +1 (855) 264-1527 or via email at info@campaign-mgmt.com.
What
form of payment is required?
You
must timely pay the full Subscription Price for the full number of shares you wish to acquire pursuant to the exercise of Rights by delivering
to the Subscription Agent:
●
a bank certified check;
●
wire transfer.
If
you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not
specified in the forms, the payment received will be applied to exercise your Rights to the fullest extent possible based on the amount
of the payment received.
Bank
certified checks should be sent to VStock Transfer LLC at 18 Lafayette Place Woodmere, New York 11598.
If
you are exercising your Rights pursuant to a wire transfer, please use the wire instructions below:
Account
Name: VStock Transfer, LLC as escrow agent on behalf of Genius Group Ltd.
Bank:
CitiBank NA
Routing
No.: 021000089
Acct.
No.: 6882495451
To
whom should I send my forms and payment?
If
your shares are held in the name of a broker, dealer, bank or other nominee, then you should send your subscription documents and subscription
payment to that broker, dealer, bank or other nominee. If you are the record holder, then you should send your Rights Certificate and
payment of your Subscription Price to the Subscription Agent hand delivery, first class mail or overnight courier service to: VStock
Transfer at 18 Lafayette Place Woodmere, New York 11598.
You
or, if applicable, your nominee are solely responsible for completing delivery to the Subscription Agent of your subscription documents,
Rights Certificate and payment. You should allow sufficient time for delivery of your subscription materials to the Subscription Agent
and clearance of payment before the expiration of the Rights Offering.
When
will I receive my new shares of ordinary shares?
The
Subscription Agent will arrange for the issuance of the ordinary shares promptly after the expiration of the Rights Offering and all
prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected. If you hold your shares in
the name of a broker, dealer, bank or other nominee, DTC will credit your account with your nominee with the securities you purchase
in the Rights Offering. If you are a holder of record of shares, all shares that you purchase in the Rights Offering will be issued in
book-entry, or uncertificated, form meaning that you will receive a direct registration (DRS) account statement from our transfer agent
reflecting ownership of the ordinary shares.
If
I exercise some or all of my Rights, may I cancel my exercise before the Rights Offering closes?
No.
All exercises of Rights are irrevocable, even if you later learn information that you consider to be unfavorable to the exercise of your
Rights and even if our board of directors extends the rights offering for a period of up to 30 days. However, if we amend the Rights
Offering to allow for an extension of the subscription period of more than 30 days or make a Material Change to the terms of the Rights
Offering set forth in this prospectus supplement, you may cancel your purchase and receive a refund of any money you have advanced. You
should not exercise your Rights unless you are certain that you wish to purchase shares at the Subscription Price.
May
I transfer my Rights?
yes.
Are
we requiring a minimum subscription to complete the Rights Offering?
No.
We may complete the Rights Offering regardless of the number of Rights that may be exercised.
Are
there any conditions to completing the Rights Offering?
No,
but we have the right to cancel or modify the terms of the Rights Offering in our sole discretion.
Are
there any other limitations on the exercise of the Rights aside from potential proration?
Yes.
In the event that the exercise by a stockholder of the Rights could, as determined by us in our sole discretion, potentially result in
a limitation on our ability to use the Tax Attributes under the Code and rules promulgated by the Internal Revenue Service, we may, but
we are under no obligation to, reduce the number of shares of ordinary shares to be acquired by such stockholder to such number of shares
of our ordinary shares as we, in our sole discretion, shall determine to be advisable in order to preserve our ability to use the Tax
Attributes.
Can
our board of directors extend, cancel or amend the Rights Offering?
Yes.
We have the option to extend the Rights Offering and the period for exercising your Rights for a period not to exceed 30 days, at our
sole discretion. We do not presently intend to extend the Rights Offering. If we elect to extend the Expiration Date to a date following
Friday, February 14, 2025, we will issue a press release announcing such extension no later than 9:00 a.m., Eastern time, on the next
business day after the most recently announced Expiration Date. We will extend the duration of the Rights Offering as required by applicable
law or regulation and may choose to extend it if we decide to give stockholders more time to exercise their Rights in the Rights Offering.
Our
board of directors may cancel the Rights Offering at any time in its sole discretion. If the Rights Offering is cancelled, we will issue
a press release notifying stockholders of the cancellation and all subscription payments received by the Subscription Agent will be promptly
returned, without interest or penalty.
Our
board of directors also has the right to amend or modify the terms of the Rights Offering in its sole discretion. If we make any Material
Change to the terms of the Rights Offering set forth in this prospectus, we will offer persons who have exercised their Rights the opportunity
to cancel their purchases and the Subscription Agent will refund the funds advanced by each such person and recirculate an updated prospectus
supplement. In addition, upon such event, we may extend the Expiration Date to allow holders of Rights ample time to make new investment
decisions and for us to recirculate updated documentation. Promptly following any such occurrence, we will issue a press release announcing
any changes with respect to the Rights Offering and the new expiration date. The terms of the Rights Offering cannot be modified or amended
after the Expiration Date. Although we do not presently intend to do so, we may choose to amend or modify the terms of the Rights Offering
for any reason, including, without limitation, in order to increase participation in the Rights Offering. Such amendments or modifications
may include a change in the Subscription Price, although we do not currently anticipate any such change.
Has
our board of directors made any recommendation to our stockholders regarding the Rights Offering?
No.
Neither our board of directors nor the Financial Advisor is making any recommendation to stockholders regarding the exercise of Rights
in the Rights Offering. You should make an independent investment decision about whether or not to exercise your Rights. Stockholders
who exercise Rights risk the loss of the amount invested. Please see “Risk Factors” for a discussion of material risks involved
in investing in our ordinary shares.
Will
our directors and executive officers participate in the Rights Offering?
To
the extent they hold ordinary shares as of the Record Date, our directors and executive officers will be entitled to participate in the
Rights Offering on the same terms and conditions applicable to other Rights holders. While none of our directors or executive officers
has entered into any binding commitment or agreement to exercise Rights received in the Rights Offering, our directors and executive
officers have indicated that they intend on participating in the Rights Offering. The CEO and Director of the Company has notified that
he would fully subscribe to his rights under this Rights Offering, which will amount to rights to an additional 6.8 million shares on
the same terms as all shareholders on the Record Date as detailed above.
How
many shares of the company’s ordinary shares will be outstanding after the rights offering?
At
the Record Date, up to 90,000,000 ordinary shares were outstanding. The number of shares of ordinary shares outstanding after the Rights
Offering will depend on the final Subscription Price and the number of Rights that are exercised. If the Subscription Price does not
decrease and if all of the Rights are exercised, there will be 180,000,000 ordinary shares outstanding after the Rights Offering.
How
much proceeds will we receive from the Rights Offering?
Assuming
the Rights Offering is subscribed in full, we will receive net proceeds of approximately $41,700,000, net of expenses and fees incident
to this Rights Offering estimated at approximately $3,300,000, including Financial Advisor fees. However, until the subscription period
ends, we will not know the total proceeds that we have received in the Rights Offering. For a description on how we plan to use the proceeds
of the Rights Offering, please see “Use of Proceeds.”
Are
there material risks in exercising my Rights?
Yes.
The exercise of your Rights involves material risks. Among other things, you should carefully consider each of the risks described under
the heading “Risk Factors” in this prospectus supplement, the accompanying prospectus and the documents incorporated
by reference.
If
the Rights Offering is not completed, will my subscription payment be refunded to me?
Yes.
The Subscription Agent will hold all funds it receives in a segregated bank account until completion of the Rights Offering. If the Rights
Offering is not completed, all subscription payments received by the Subscription Agent will be promptly returned, without interest.
If you own your ordinary shares in a brokerage account, it may take longer for you to receive the return of your payment because the
Subscription Agent will return your payment through the broker, dealer, bank or other nominee that is the record holder of your shares
of ordinary shares.
Will
the Rights be listed on a stock exchange or national market?
Yes.
The Rights are tradable. The shares of our ordinary shares are, and the shares to be issued in the Rights Offering will be, traded on
NYSE under the symbol “GNS RT”.
Will
the shares of ordinary shares that I receive upon exercise of my Rights be freely-tradable?
Yes.
The Rights Offering is being conducted pursuant to an effective registration statement. Accordingly, all shares issued upon exercise
of the Rights will be free of any restrictive legend and will be freely-tradable on NYSE.
How
do I exercise my Rights if I live outside the United States?
To
exercise your Rights, you must follow the process described in the subscription documents sent to you and also available from the Information
Agent. For assistance you may contact the Information Agent.
What
fees or charges apply if I exercise my Rights?
We
are not charging any fee or sales commission to issue Rights to you or to issue the shares to you if you exercise your Rights. If you
hold your shares in “street name” and exercise your Rights through a broker, dealer, bank or other nominee that is the record
holder of your shares, you are responsible for paying any fees your record holder may charge you.
What
are the U.S. federal income tax consequences of exercising Rights?
For
U.S. federal income tax purposes, you generally should not recognize income or loss in connection with the receipt or exercise of Rights
unless the Rights Offering is treated as a distribution described in either Section 305(b) or 305(c) of the Code. We believe that the
Rights Offering should not be treated as either such distribution, but certain aspects of that determination are unclear. Our position
is not binding on the Internal Revenue Service or the courts, however. You are urged to consult your own tax advisor as to your particular
tax consequences resulting from the receipt and exercise of Rights and the receipt, ownership and disposition of our shares. For further
information, please see “Material U.S. Federal Income Tax Consequences.”
Who
should I contact if I have other questions?
If
you have other questions or need assistance, please contact the Information Agent, Campaign Management, LLC by phone at +1 (855) 264-1527
or via email at info@campaign-mgmt.com.
RISK FACTORS
Summary
of Risks Affecting Our Company
The
following is a summary of certain, but not all, of the risks that could adversely affect our business, operations and financial results.
If any of the risks actually occur, our business could be materially impaired, the trading price of our ordinary shares could decline,
and you could lose all or part of your investment, all of which are incorporated by reference from our Form 20-F filed with the SEC on
May 15, 2024 for the year ended December 31, 2023.
Risks
Related to Our Business and Industry (All Group companies)
| |
Ø |
We
are a global business subject to complex economic, legal, political, tax, foreign currency and other risks associated with international
operations, which risks may be difficult to adequately address. |
| |
Ø |
Our
growth strategy anticipates that we will create new products, services, and distribution channels and expand existing distribution
channels. If we are unable to effectively manage these initiatives, our business, financial condition, results of operations and
cash flows would be adversely affected. |
| |
Ø |
Our
growth may have a negative effect on the successful expansion of our business, on our people management, and on the increase in complexity
of our software and platforms. |
| |
Ø |
If
our growth rate decelerates significantly, our prospects and financial results would be adversely affected, preventing us from achieving
profitability. |
| |
Ø |
We
may be unable to recruit, train and/or retain qualified teachers, mentors, and other skilled professionals. |
| |
Ø |
Our
business may be materially adversely affected if we are not able to maintain or improve the content of our existing courses or to
develop new courses on a timely basis and in a cost-effective manner. |
| |
Ø |
Failure
to attract and retain students to enroll in our courses and programs, and to maintain tuition levels, may have a material adverse
impact on our business and prospects. |
| |
Ø |
If
student performance falls or parent and student satisfaction declines, a significant number of students may not remain enrolled in
our programs, and our business, financial condition and results of operations will be adversely affected. |
| |
Ø |
Our
curriculum and approach to instruction may not achieve widespread acceptance, which would limit our growth and profitability. |
| |
Ø |
The
continued development of our brand identity is important to our business. If we are not able to maintain and enhance our brand, our
business and operating results may suffer. |
| |
Ø |
If
our partnerships are unable to maintain educational quality, we may be adversely affected. |
| |
Ø |
There
is significant competition in the market segments that we serve, and we expect such competition to increase; we may not be able to
compete effectively. |
| |
Ø |
We
cannot assure you that we will not be subject to liability claims for any inaccurate or inappropriate content in our training programs,
which could cause us to incur legal costs and damage our reputation. |
| |
Ø |
We
may be subject to legal liability resulting from the actions of third parties, including independent contractors and teachers, which
could cause us to incur substantial costs and damage our reputation. |
| |
Ø |
We
may not have sufficient insurance to protect ourselves against substantial losses. |
| |
Ø |
A
cybersecurity attack or other security breach or incident could delay or interrupt service to our users and customers, harm our reputation
or subject us to significant liability. |
Risks
Related to Our Business and Industry
| |
Ø |
We
are a growing company with a limited operating history. If we fail to achieve further marketplace acceptance for our products and
services, our business, financial condition and results of operations will be adversely affected. |
| |
Ø |
Our
Edtech platform is technologically complex, and potential defects in our platforms or in updates to our platforms could be difficult
or even impossible to fix. |
| |
Ø |
System
disruptions, capacity constraints and vulnerability from security risks to our online computer networks could impact our ability
to generate revenues and damage our reputation, limiting our ability to attract and retain students. |
| |
Ø |
Our
current success and future growth depend on the continued acceptance of the Internet and the corresponding growth in users seeking
educational services on the Internet. |
| |
Ø |
We
are susceptible to the illegal or improper use of our content, Edtech and platform (whether from students, teachers, mentors, management
personnel and other employees, or third parties), or other forms of misconduct, which could expose us to liability and damage our
business and brand. |
Risks
Related to Our Business and Industry (Specific to Acquisitions)
| |
Ø |
We
have acquired the acquisitions and may pursue other strategic acquisitions or investments. The failure of an acquisition or investment
(including but not limited to the Acquisitions) to be completed or to produce the anticipated results, or the inability to fully
integrate an acquired company, could harm our business. |
| |
Ø |
Public
perception and regulatory changes in the primary school and secondary school systems in countries that E-Square may expand to may
have a materially adverse impact on the company. |
| |
Ø |
Our
growth plans for E-Square and our plans to expand into the primary school and high school markets will be a complex and lengthy process
where future success is not assured. |
| |
Ø |
If
we cannot maintain student enrollments and maintain tuition levels in our Acquisition, UAV, the university’s results of operations
may be materially adversely affected. |
Risks
Related to Investing in a Foreign Private Issuer or a Singapore Company
| |
Ø |
As
a foreign private issuer, we are permitted to follow certain home country corporate governance practices in lieu of certain requirements
under the NYSE American listing standards. This may afford less protection to holders of our ordinary shares than U.S. regulations. |
| |
Ø |
We
are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are instead subject to the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) reporting obligations that, to some extent, are more lenient and less detailed
than those for a U.S. issuer. |
| |
Ø |
We
may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting
regime and cause us to incur additional legal, accounting and other expenses. |
Risks
related to our Bitcoin Acquisition Strategy
WE
ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED
WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY COMMODITIES EXCHANGE REGULATIONS.
Our
bitcoin acquisition strategy may expose us to various risks associated with bitcoin
Our
bitcoin acquisition strategy may expose us to various risks associated with bitcoin, including the following:
Bitcoin
is a highly volatile asset. Bitcoin is a highly volatile asset that has traded below $39,000 per bitcoin and above $108,000 per
bitcoin on Coinbase in the 12 months preceding the date of this disclosure. The trading price of bitcoin was significantly lower during
prior periods, and such decline may occur again in the future. Further risk includes requirements to redeem the above mentioned loan
if LTV approaches 50% or less, which could happen if the price of Bitcoin is significantly lower than current levels.
Our
bitcoin acquisition strategy has not been tested. This bitcoin acquisition strategy has not been tested. Although we believe
bitcoin, due to its limited supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of
bitcoin declined in recent periods during which the inflation rate increased. Some investors and other market participants may disagree
with our bitcoin acquisition strategy or actions we undertake to implement it. If bitcoin prices were to decrease or our bitcoin acquisition
strategy otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our common stock would
be materially adversely impacted.
The
broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of bitcoin.
A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating
to companies operating in the digital asset industry, the closure or liquidation of certain financial institutions that provided lending
and other services to the digital assets industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York
Attorney General have highlighted the counterparty risks applicable to owning and transacting in digital assets. Any such bankruptcies,
closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry may negatively
impact the adoption rate, price, and use of bitcoin, limit the availability to us of financing collateralized by bitcoin, or create or
expose additional counterparty risks.
Changes
in the legal and/or accounting treatment of our bitcoin holdings could have significant accounting impacts, including increasing the
volatility of our results.
The
broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and
use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets
are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.
We
may use the net proceeds from this offering to purchase bitcoin, the price of which has been, and will likely continue to be, highly
volatile.
We
may use the net proceeds from this offering to purchase bitcoin. Bitcoin is a highly volatile asset In addition, bitcoin does not pay
interest or other returns and so ability to generate a return on investment from the net proceeds from this offering will depend on whether
there is appreciation in the value of bitcoin following our purchases of bitcoin with the net proceeds from this offering. Future fluctuations
in bitcoin trading prices may result in our converting bitcoin purchased with the net proceeds from this offering into cash with a value
substantially below the net proceeds from this offering.
Bitcoin
and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.
Bitcoin
and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The
application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and
it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner
that adversely affects the price of bitcoin.
The
U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory,
legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions
such as us to own or transfer bitcoin. It is not possible to predict whether, or when, any of these developments will lead to Congress
granting additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative
bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional
legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and
other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing
regulations might impact the value of digital assets generally and bitcoin specifically. The consequences of increased regulation of
digital assets and digital asset activities could adversely affect the market price of bitcoin and in turn adversely affect the market
price of our common stock.
Moreover,
the risks of engaging in a bitcoin treasury strategy are relatively novel and have created, and could continue to create, complications
due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director
and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.
The
growth of the digital assets industry in general, and the use and acceptance of bitcoin in particular, may also impact the price of bitcoin
and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of bitcoin may depend, for instance,
on public familiarity with digital assets, ease of buying, accessing or gaining exposure to bitcoin, institutional demand for bitcoin
as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for bitcoin
as a means of payment, and the availability and popularity of alternatives to bitcoin. Even if growth in bitcoin adoption occurs in the
near or medium-term, there is no assurance that bitcoin usage will continue to grow over the long-term.
Because
bitcoin has no physical existence beyond the record of transactions on the bitcoin blockchain, a variety of technical factors related
to the bitcoin blockchain could also impact the price of bitcoin. For example, malicious attacks by miners, inadequate mining fees to
incentivize validating of bitcoin transactions, hard “forks” of the bitcoin blockchain into multiple blockchains, and advances
in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the bitcoin blockchain and negatively
affect the price of bitcoin. The liquidity of bitcoin may also be reduced and damage to the public perception of bitcoin may occur, if
financial institutions were to deny or limit banking services to businesses that hold bitcoin, provide bitcoin-related services or accept
bitcoin as payment, which could also decrease the price of bitcoin. Similarly, the open-source nature of the bitcoin blockchain means
the contributors and developers of the bitcoin blockchain are generally not directly compensated for their contributions in maintaining
and developing the blockchain, and any failure to properly monitor and upgrade the bitcoin blockchain could adversely affect the bitcoin
blockchain and negatively affect the price of bitcoin.
Recent
actions by U.S. banking regulators have reduced the ability of bitcoin-related services providers to gain access to banking services
and liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact
the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.
Our
intended bitcoin holdings may be less liquid than our existing cash and cash equivalents and may not be able to serve as a source of
liquidity for us to the same extent as cash and cash equivalents.
Historically,
the bitcoin markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign
currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation,
compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and
decentralized network. During times of market instability, we may not be able to sell our bitcoin at favorable prices or at all. For
example, a number of bitcoin trading venues temporarily halted deposits and withdrawals in 2022. As a result, our bitcoin holdings may
not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, bitcoin we may hold with
our custodians and transact with our trade execution partners may not enjoy the same protections as are available to cash or securities
deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor
Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized
by our unencumbered bitcoin or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability
or when the price of bitcoin has declined significantly. If we are unable to sell our bitcoin, enter into additional capital raising
transactions using bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin
at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
Risks
Related to This Offering
If
you do not participate in the Rights Offering, your interest in the Company will likely be diluted.
Ordinary
shareholders who do not fully exercise their respective Rights should expect that they will, at the completion of the Rights Offering,
own a smaller proportional interest in the Company than would otherwise be the case had they fully exercised their Rights.
Our
ordinary shares price may be volatile as a result of the Rights Offering.
The
trading price of our ordinary shares may fluctuate substantially as a result of the Rights Offering. The price of the ordinary shares
that will prevail in the market following the Rights Offering may be higher or lower than the Subscription Price depending on many factors,
some of which are beyond our control and may not be directly related to our operating performance.
The
Rights Offering may cause the price of our ordinary shares to decline.
The
Rights Offering may result in an immediate decline in the market value of our ordinary shares. This decline may continue after the completion
of Rights Offering. Further, if a substantial number of Rights are exercised and the holders of the shares received upon exercise of
those Rights choose to sell some or all of the shares of ordinary shares, the resulting sales could depress the market price of our ordinary
shares. There is no assurance that, following the Expiration Date, you will be able to sell the ordinary shares you receive from the
exercise of your Rights at a price equal to or greater than the Subscription Price.
Although
the pricing mechanism determined by our board of directors in the Rights Offering is intended to provide stockholders that exercise their
Rights with shares at a discount to the market price of our ordinary shares, there is no guarantee that by the time the shares are delivered
to you, the market price of our ordinary shares will be above the discounted price. Further, because the exercise of your Rights is not
revocable and because the Rights are not transferrable, you will not be able to revoke your subscription if the market price decreases
prior to the delivery of the shares or transfer of the shares until after they are delivered.
Our
board of directors has approved a pricing mechanism intended to provide Rights holders with an opportunity to exercise their Rights at
a discount to the market price of our ordinary shares. However, there is no guarantee that the Subscription Price, whether it is set
at the Initial Price or the Alternate Price, will be lower than the market price of our ordinary shares at the time that the shares are
purchased and delivered. Further, because the exercise of your Rights is not revocable and because the Rights are not transferable, you
will not be able to revoke your subscription if the market price decreases prior to the delivery of the shares or transfer of the shares
until after they are delivered to you. Accordingly, the Subscription Price at which you are purchasing shares of ordinary shares may
be above the prevailing market price by the time that the shares of ordinary shares are purchased and delivered.
Completion
of the Rights Offering and the sale of the shares is not subject to our raising a minimum offering amount and therefore proceeds may
be insufficient to meet our objectives, thereby increasing the risk to investors.
Completion
of the Rights Offering is not subject to our raising a minimum offering amount. As such, proceeds from the Rights Offering and the sale
of the shares may not be sufficient to meet the objectives we state in this prospectus supplement, including the repayment of the Redemption
Debenture, or other corporate milestones that we may set. Stockholders should not rely on the success of the Rights Offering and the
sale of the shares to entirely address our need for funding. If we fail to complete the Rights Offering or raise capital from other sources,
we would anticipate having to significantly scale back our growth plans and operating expenses, which will curtail the progress of our
business.
If
we terminate the Rights Offering for any reason, we will have no obligation other than to return subscription monies promptly and without
interest.
We
may decide, in our discretion and for any or no reason, to cancel or terminate the Rights Offering at any time prior to the Expiration
Date. If the Rights Offering is terminated, we will have no obligation with respect to Rights that have been exercised except to promptly
return, without interest or deduction, the subscription monies deposited with the Subscription Agent.
If
you do not act on a timely basis and follow subscription instructions, your exercise of the Rights may be rejected.
Holders
of shares of ordinary shares who desire to purchase shares in the Rights Offering must act on a timely basis to ensure that all required
forms and payments are actually received by the Subscription Agent prior to 4:30 p.m., Eastern time, on Friday, February 14, 2025 (unless
extended). If you are a beneficial owner of shares of ordinary shares and you wish to exercise your Rights, you must act promptly to
ensure that your broker, dealer, custodian bank, trustee or other nominee acts for you and that all required forms and payments are actually
received by your broker, dealer, custodian bank, trustee or other nominee in sufficient time to deliver the forms and payments to the
Subscription Agent prior to 4:30 p.m., Eastern time, on Friday, February 14, 2025 (unless extended). We will not be responsible if your
broker, dealer, custodian bank, trustee or other nominee fails to ensure that all required forms and payments are actually received by
the Subscription Agent prior to 4:30 p.m., Eastern time, on Friday, February 14, 2025.
If
you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription
procedures that apply to your exercise in the Rights Offering, the Subscription Agent may, depending on the circumstances, reject your
subscription or accept it only to the extent of the payment received. Neither we nor the Subscription Agent undertakes to contact you
concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct such forms or payment.
We have the sole discretion to determine whether a subscription exercise properly follows the subscription procedures.
The
receipt of Rights may be treated as a taxable distribution to you.
We
believe the distribution of the Rights in the Rights Offering should be a non-taxable distribution to holders of shares of ordinary shares
under Section 305(a) of the Code. Please see the discussion of “Material U.S. Federal Income Tax Considerations” below.
This position is not binding on the IRS or the courts, however. If this Rights Offering is deemed to be part of a “disproportionate
distribution” under Section 305 of the Code, your receipt of Rights in the Rights Offering may be treated as the receipt of a taxable
distribution to you equal to the fair market value of the Rights. Any such distribution would be treated as dividend income to the extent
of our current and accumulated earnings and profits, if any, with any excess being treated as a return of capital to the extent thereof
and then as capital gain. Each holder of shares of ordinary shares is urged to consult his, her or its own tax advisor with respect to
the particular tax consequences of this Rights Offering.
The
Subscription Price determined for the Rights Offering is not an indication of the fair value of our ordinary shares.
In
determining the method for computing the Subscription Price, our board of directors considered a number of factors, including, but not
limited to, the price at which our stockholders might be willing to participate in the Rights Offering, historical and current trading
prices for our ordinary shares including volatility, the amount of proceeds desired, the potential need for liquidity and capital, potential
market conditions and the desire to provide an opportunity to our stockholders to participate in the Rights Offering. In conjunction
with its review of these factors, our board of directors also reviewed a range of discounts to market value represented by the subscription
prices in rights offerings by other public companies. The Subscription Price does not necessarily bear any relationship to the book value
of our assets, results of operations, cash flows, losses, financial condition or any other established criteria for value, other than
the current market price of our ordinary shares on certain dates. You should not necessarily consider the Subscription Price as an indication
of the fair value of our ordinary shares. After the date of this prospectus supplement, our ordinary shares may trade at prices above
or below the Subscription Price.
There
is no back-stop or standby commitment in place to purchase shares that are not purchased in the Rights Offering, and no minimum number
of shares that we must sell in the Rights Offering.
There
is no back-stop or standby commitment in place to purchase shares that are not purchased in the Rights Offering. The Financial Advisor
is not acting as an underwriter or placement agent of the Rights or the shares of ordinary shares issuable upon exercise of the Basic
Subscription Privilege or Over-Subscription Privilege. The Financial Advisor’s services to us in this Rights Offering cannot be
construed as any assurance that the Rights Offering will be successful. The Financial Advisor does not make any recommendation with respect
to whether you should exercise the Basic Subscription Privilege or Over-Subscription Privilege, or to otherwise invest in our company.
Furthermore, there is no minimum number of shares that we must sell in the Rights Offering. Consequently, the Rights Offering may not
raise significant funds or achieve any minimum liquidity threshold.
We
do not anticipate declaring any cash dividends on our ordinary shares which may adversely impact the market price of our stock.
We
have never declared or paid cash dividends on our ordinary shares and do not plan to pay any cash dividends in the near future. Our current
policy is to retain all funds and any earnings for use in the operation and expansion of our business. If we do not pay dividends, our
stock may be less valuable to you because a return on your investment will only occur if our stock price appreciates.
Sales
of a significant number of shares of our ordinary shares in the public markets, or the perception that such sales could occur, could
depress the market price of our ordinary shares.
Sales
of a significant number of shares of our ordinary shares in the public market, or the perception that such sales could occur could depress
the market price of our ordinary shares and impair our ability to raise capital through the sale of additional equity securities. We
cannot predict the effect that future sales of our ordinary shares or the market perception that we are permitted to sell a significant
number of our securities would have on the market price of our ordinary shares.
USE
OF PROCEEDS
We
will use all net proceeds of this offering to purchase Bitcoin.
DILUTION
Purchasers
of our ordinary shares in the Rights Offering will experience dilution to the extent of the difference between the Subscription Price
and our as-adjusted net tangible book value (deficit) per share immediately after this Rights Offering. Net tangible book value (deficit)
per share is equal to the amount of our total tangible assets, less total liabilities, divided by the number of outstanding shares of
our ordinary shares. As of June 30, 2024, our net tangible book value (deficit) was approximately ($28,745,558), or approximately ($0.32)
per share.
After
giving effect to the sale by us in the Rights Offering of up to 90,000,000 of our ordinary shares at an assumed Subscription Price of
$0.50 per share, after deducting the estimated offering fees and expenses payable by us estimated at approximately $3,300,000, including
Financial Advisor fees, our as-adjusted net tangible book value (deficit) as of June 30, 2024 would have been approximately $70,445,558,
or approximately $0.39 per share. This represents an immediate increase in net tangible book value (deficit) of $0.04 per share to existing
stockholders who do not participate in the Rights Offering and an immediate dilution of $0.11 per share to investors purchasing shares
of our ordinary shares in this Rights Offering. The following table illustrates this per share dilution (unaudited):
| Subscription Price | |
| | | |
$ | 0.50 | |
| Net tangible book value per share as of June 30, 2024 before the Rights Offering | |
$ | 0.32 | | |
| | |
| Increase in net tangible book value per share attributable to the Rights Offering | |
$ | 0.07 | | |
| | |
| As-adjusted net tangible book value per share after giving effect to the Rights Offering | |
| | | |
$ | 0.39 | |
Dilution in net tangible book value per share to existing stockholders who participate in the
Rights Offering | |
| | | |
$ | 0.11 | |
To
the extent that the Alternative Price is lower than the Initial Price, then purchasers of our ordinary shares in the Rights Offering
will experience further dilution.
The
information above is as of June 30, 2024 and excludes as of such date:
| |
● |
The
additional purchase of 420 BTC after June 30, 2024 and before January 21, 2025 at an average purchase price of $95,192, The BTC valued
at $43 million using a price of $103,000 per BTC. |
| |
● |
The
loan with a commercial lender for $18 million principal amount loan to purchase Bitcoin. The loan has an 18 month term and bears
interest at 13.9% per annum, with interest repaid monthly over the 18 month term and the principal payable in full at the end of
the term. |
| |
● |
The
full repayment of principal of $5,720,000 Promissory Note to lender Alto Opportunity Master Fund, SPC – Segregated Master Portfolio
B. |
To
the extent that any of our outstanding stock options or warrants are exercised, or if we grant additional options or other awards under
our stock incentive plan or additional warrants, or issue additional shares of ordinary shares in the future, there may be further dilution.
THE
RIGHTS OFFERING
Subscription
Rights
We
are distributing to the holders of our ordinary shares, at no charge, non-transferrable subscription rights to purchase our ordinary
shares. Each holder of our ordinary shares at 4:30 p.m., Eastern time, on January 24, 2025 will receive one (1) Right to purchase one
(1) share of our ordinary shares (subject to proration) for each one (1) share of ordinary shares owned by such holder on the Record
Date. The Rights will be evidenced by a Rights Certificate. Each Right will entitle the holder to a Basic Subscription Privilege and
an Over-Subscription Privilege for all Basic Subscription Privileges that remain unsubscribed, in each case subject to proration and
as described below. You will only be permitted to exercise your Over-Subscription Privilege, if any, if you fully exercise your Basic
Subscription Privilege (provided that any Excess Subscription Amount may be applied to your Over-Subscription Privilege as described
below). You may exercise all or a portion of your Rights, or you may choose not to exercise any of your Rights. Rights may only be exercised
in aggregate for whole numbers of shares of our ordinary shares. No fractional shares of our ordinary shares will be issued in the Rights
Offering and in the event of proration, all fractional shares will be rounded down to the nearest whole share.
In
addition to the foregoing, certain holders of our warrants to purchase ordinary shares have the contractual right to participate in this
Rights Offering. Each such warrant holder will receive one Right for each share of ordinary shares that such warrant holder’s warrant
is exercisable for. A total of 6,725,055 Rights will be issued to these warrant holders.
Limitation
on the Purchase of Shares
Your
Basic Subscription Right permits you to only purchase the number of shares upon exercise of the number of Rights distributed to you in
the Rights Offering. Accordingly, the number of shares that you may purchase in the Rights Offering is limited by the number of shares
of our ordinary shares you held on the Record Date. Your Over-Subscription Privilege permits you to subscribe for additional shares to
the extent to which other stockholders do not exercise their Rights, which we cannot determine prior to the end of the Subscription Period.
Further,
in the event that the exercise by a stockholder of the Rights could, as determined by us in our sole discretion, potentially result in
a limitation on our ability to use net operating losses, tax credits and other tax attributes under the Code and rules promulgated by
the Internal Revenue Service, we may, but we are under no obligation to, reduce the number of shares of ordinary shares to be acquired
by such stockholder to such number of shares of our ordinary shares as we, in our sole discretion, shall determine to be advisable in
order to preserve our ability to use the Tax Attributes.
Proration
The
Over-Subscription Privilege will be subject to proration to ensure that the aggregate proceeds raised in the Rights Offering does not
exceed the Maximum Offering Amount.
Subscription
Price
Each
Right will be exercisable at a price per share equal to $0.50. The Subscription Price does not necessarily bear any relationship to our
past or expected future results of operations, cash flows, current financial condition, or any other established criteria for value,
other than the current market price of our ordinary shares on certain dates.
Determination
of Subscription Price
Our
board of directors considered, among other things, the following factors in determining the discount to market price for purposes of
establishing the Subscription Price:
●
the current and historical trading prices of our ordinary shares;
●
the price at which stockholders might be willing to participate in the Rights Offering;
●
our need for additional capital and liquidity;
●
the cost of capital from other sources; and
●
comparable precedent transactions, including the percentage of shares offered, the terms of the Rights being offered, the
subscription price and the discount that the subscription price represented to the immediately prevailing closing prices for those
offerings.
In
conjunction with the review of these factors and following discussions with the Financial Advisor, our board of directors also reviewed
our history and prospects, including our past and present burn rate and cash requirements, our prospects for the future, the outlook
for our industry and our current financial condition. Our board of directors believes that the discount to market price should be designed
to provide an incentive to our current stockholders to participate in the Rights Offering and exercise their Rights.
The
Subscription Price does not necessarily bear any relationship to any established criteria for value, other than the current market price
of our ordinary shares on certain dates. No valuation consultant or investment banker has opined upon the fairness or adequacy of the
Subscription Price. You should not consider the Subscription Price as an indication of actual value of our company. You should not assume
or expect that, after the Rights Offering, our shares of ordinary shares will trade at or above the Subscription Price in any given time
period. The market price of our ordinary shares may decline during or after the Rights Offering. We cannot assure you that you will be
able to sell the shares of our ordinary shares purchased during the Rights Offering at a price equal to or greater than the Subscription
Price. You should obtain a current price quote for our ordinary shares before exercising your Rights and make your own assessment of
our business and financial condition, our prospects for the future, and the terms of this Rights Offering. Once made, all exercises of
Rights are irrevocable.
Transferability
of Rights
The
Rights are transferable.
Expiration
Date
The
subscription period during which you may exercise your Rights expires at 4:30 p.m., Eastern time, on February 14, 2025, which is the
expiration of the Rights Offering. If you do not exercise your Rights before that time, your Rights will expire and will no longer be
exercisable. We will not be required to issue shares to you if the Subscription Agent receives your Rights Certificate or your subscription
payment after that time.
If
you hold your shares of ordinary shares in the name of a broker, dealer, custodian bank or other nominee, the nominee will exercise the
Rights on your behalf in accordance with your instructions. Please note that the nominee may establish a deadline that may be before
4:30 p.m., Eastern time, on February 14, 2025, which is the Expiration Date that we have established for the Rights Offering.
Termination
We
may terminate the Rights Offering at any time and for any or no reason prior to the completion of the Rights Offering. If we terminate
the Rights Offering, we will issue a press release notifying shareholders and the public of the termination.
Return
of Funds upon Completion or Termination
The
Subscription Agent will hold funds received in payment for shares in a segregated account pending completion of the Rights Offering.
The Subscription Agent will hold this money until the Rights Offering is completed or is terminated. If the Rights Offering is terminated
for any reason, all subscription payments received by the Subscription Agent and held in escrow for investors will be promptly returned,
without interest or penalty.
Shares
of Our Ordinary shares Outstanding After the Rights Offering
On
the Record Date, assuming no additional issuances of our ordinary shares prior to the Record Date, we will have up to 90,000,000 shares
of our ordinary shares issued and outstanding. Based on the foregoing, and assuming no other transactions by us involving our ordinary
shares prior to the expiration of the Rights Offering, if the Rights Offering is fully subscribed, approximately 180,000,000 shares of
our ordinary shares will be issued and outstanding. However, the exact number of shares of ordinary shares that we will issue in this
Rights Offering will depend on the Subscription Price, the number of shares that are subscribed for in the Rights Offering and whether
the unsubscribed Rights are exercised pursuant to the Over-Subscription Privilege.
Methods
for Exercising Subscription Rights
The
exercise of Rights is irrevocable and may not be cancelled. You may exercise your Rights as follows:
Subscription
by Record Holders
If
you are a shareholder of record, the number of shares you may purchase pursuant to your Rights is indicated on the enclosed Rights Certificate.
You may exercise your Rights by properly completing and executing the Rights Certificate and forwarding it, together with your full payment
of the Subscription Price, to the Subscription Agent at the address given below under “Subscription Agent,” to be received
before 4:30 p.m., Eastern time, on February 14, 2025. Your Rights will not be considered exercised unless the Subscription Agent receives
from you, your broker, custodian, nominee or institution, as the case may be, all of the required documents and your full subscription
price payment prior to 4:30 p.m., Eastern time, on the Expiration Date.
Subscription
by Beneficial Owners
If
you are a beneficial owner of shares of our ordinary shares that are registered in the name of a broker, dealer, custodian bank or other
nominee, you will not receive a Rights Certificate. Instead, we will issue one Right to such nominee record holder for all shares of
our ordinary shares held by such nominee at the Record Date. If you are not contacted by your nominee, you should promptly contact your
nominee in order to subscribe for shares in the Rights Offering and follow the instructions provided by your nominee. Your Rights will
not be considered exercised unless the Subscription Agent receives from your broker, custodian, nominee or institution, as the case may
be, all of the required documents and your full subscription price payment prior to 4:30 p.m., Eastern time, on the Expiration Date.
Payment
Method
Payments
must be made in full in U.S. currency by bank certified check or by wire transfer, and payable to “VStock Transfer LLC”.
You must timely pay the full Subscription Price for the full number of shares of our ordinary shares at the Initial Price if you wish
to acquire pursuant to the exercise of Rights (including any exercise of the Over-Subscription Privilege, if available) by delivering
a:
●
bank certified check payable to “VStock Transfer LLC”; or
●
wire transfer of immediately available funds directly to the account maintained VStock Transfer, as escrow agent, for purposes of
accepting subscriptions in this Rights Offering at:
Account
Name: VStock Transfer, LLC as escrow agent on behalf of Genius Group Ltd.
Bank:
CitiBank NA
Routing
No.: 021000089
Acct.
No.: 6882495451
You
should read the instruction letter accompanying the Rights Certificate carefully and strictly follow it. DO NOT SEND RIGHTS CERTIFICATES
OR PAYMENTS DIRECTLY TO US. We will not consider your subscription received until the Subscription Agent has received delivery of a properly
completed and duly executed Rights Certificate and payment of the full Subscription Price.
The
method of delivery of Rights Certificates and payment of the Subscription Price to the Subscription Agent will be at the risk of the
holders of Rights. If sent by mail, we recommend that you send those statements and payments by registered mail, properly insured, with
return receipt requested, or by overnight courier, and that you allow a sufficient number of days to ensure delivery to the Subscription
Agent before the Rights Offering expires.
If
you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not
specified in the forms, the payment received will be applied to exercise your Rights to the fullest extent possible based on the amount
of the payment received.
Bank
certified checks should be sent to VStock Transfer LLC at LLC18 Lafayette Place Woodmere, New York 11598.
Missing
or Incomplete Subscription Forms or Payment
If
you fail to complete and sign the Rights Certificate or otherwise fail to follow the subscription procedures that apply to the exercise
of your Rights before the Rights Offering expires, the Subscription Agent will reject your subscription or accept it to the extent of
the payment received. Neither we nor our Subscription Agent undertake any responsibility or action to contact you concerning an incomplete
or incorrect subscription form, nor are we under any obligation to correct such forms. We have the sole discretion to determine whether
a subscription exercise properly complies with the subscription procedures.
If
we determine that your incomplete Rights Certificate otherwise complies with the subscription procedures and if you do not indicate the
number of Rights that you wish to exercise, the payment received will be applied to exercise your Rights to the fullest extent possible
based on the amount of the payment received after determination of the Subscription Price.
Any
excess subscription payments received by the Subscription Agent caused by proration will be promptly returned to the subscriber, without
interest. Any Excess Subscription Amount resulting from the reduction of the Subscription Price from the Initial Price to the Alternate
Price will be put towards the purchase of additional shares in the Rights Offering (either towards your Basic Subscription Privilege,
if available, or towards the Over-Subscription Privilege if you have already exercised your Basic Subscription Privilege in full) unless
a subscriber makes an election in the Rights Certificate to have the Excess Subscription Amount returned in cash without interest.
Issuance
of Ordinary shares
The
shares of ordinary shares that are purchased in the Rights Offering will be issued in book-entry, or uncertificated, form meaning that
you will receive a direct registration (DRS)account statement from our transfer agent reflecting ownership of these securities if you
are a holder of record of shares. If you hold your shares of ordinary shares in the name of a custodian bank, broker, dealer or other
nominee, DTC will credit your account with your nominee with the securities you purchased in the Rights Offering.
Subscription
Agent
The
Subscription Agent for the Rights Offering is VStock Transfer LLC. The address to which Rights Certificates and payments should
be mailed or delivered by overnight courier is provided below. If sent by mail, we recommend that you send documents and payments by
registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to
the Subscription Agent and clearance or payment before the Rights Offering expires. Do not send or deliver these materials to us.
VStock
Transfer
If
you deliver the Rights Certificates in a manner different than that described in this prospectus supplement, we may not honor the exercise
of your Rights.
Information
For
any questions or further information about the Rights Offering, please call Campaign Management LLC, the information agent for the Rights
Offering, by phone at +1 (855) 264-1527, or via email at info@campaign-mgmt.com.
No
Fractional Shares
We
will not issue fractional shares of ordinary shares in the Rights Offering. Rights holders will only be entitled to purchase a number
of shares representing a whole number of shares of ordinary shares, rounded down to the nearest whole number of shares a holder would
otherwise be entitled to purchase. Any excess subscription payments received by the Subscription Agent caused by proration will be promptly
returned to the subscriber, without interest. Any Excess Subscription Amount resulting from the reduction of the Subscription Price from
the Initial Price to the Alternate Price will be put towards the purchase of additional shares in the Rights Offering (either towards
your Basic Subscription Privilege, if available, or towards the Over-Subscription Privilege if you have already exercised your Basic
Subscription Privilege in full) unless a subscriber makes an election in the Rights Certificate to have the Excess Subscription Amount
returned in cash without interest.
Notice
to Brokers and Nominees
If
you are a broker, dealer, bank or other nominee holder that holds shares of our ordinary shares for the account of others on the Record
Date, you should notify the beneficial owners of the shares for whom you are the nominee of the Rights Offering as soon as possible to
learn their intentions with respect to exercising their Rights. If a beneficial owner of our ordinary shares so instructs, you should
complete the Rights Certificate and submit it to the Subscription Agent with the proper subscription payment by the expiration date.
You may exercise the number of Rights to which all beneficial owners in the aggregate otherwise would have been entitled had they been
direct holders of our ordinary shares on the Record Date, provided that you, as a nominee record holder, make a proper showing to the
Subscription Agent by submitting the form titled “Nominee Holder Certification,” which is provided with your Rights Offering
materials. If you did not receive this form, you should contact our Subscription Agent to request a copy.
Validity
of Subscriptions
We
will resolve all questions regarding the validity and form of the exercise of your Rights, including time of receipt and eligibility
to participate in the Rights Offering. Our determination will be final and binding. Once made, subscriptions are irrevocable; we will
not accept any alternative, conditional or contingent subscriptions. We reserve the absolute right to reject any subscriptions not properly
submitted or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before
the Expiration Date of the Rights Offering, which is February 14, 2025 (unless extended), unless we waive them in our sole discretion.
Neither we nor the Subscription Agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription
will be considered accepted, subject to our right to withdraw or terminate the Rights Offering, only when the Subscription Agent receives
a properly completed and duly executed Rights Certificate and any other required documents and the full Subscription Price. Our interpretations
of the terms and conditions of the Rights Offering will be final and binding.
Shareholder
Rights
You
will have no rights as a holder of the shares of our ordinary shares you purchase in the Rights Offering until shares are issued in book-entry
form or your account at your broker, dealer, bank or other nominee is credited with the shares of our ordinary shares purchased in the
Rights Offering.
No
Revocation
Once
you submit the Rights Certificate or have instructed your nominee of your subscription request, you are not allowed to revoke the exercise
or request a refund of monies paid. All exercises of Rights are irrevocable, even if you learn information about us that you consider
to be unfavorable. You should not exercise your Rights unless you are certain that you wish to purchase shares of ordinary shares at
the Subscription Price.
Increase
of Subscription Amount
While
you may not revoke any exercise of your Rights once you submit the Rights Certificate or have instructed your nominee of your subscription
request, if you desire to increase your subscription you may do so. To increase your subscription amount, you should contact the Information
Agent, Campaign Management, LLC by phone at +1 (855) 264-1527 or via email at info@campaign-mgmt.com.
U.S.
Federal Income Tax Treatment of Rights Distribution
For
U.S. federal income tax purposes, we do not believe holders of shares of our ordinary shares should recognize income or loss upon receipt
or exercise of a Right. See “Material U.S. Federal Income Tax Consequences.”
No
Recommendation to Rights Holders
Our
board of directors is not making a recommendation regarding your exercise of the Rights. Shareholders who exercise Rights risk investment
loss on money invested. We cannot assure you that the market price of our ordinary shares will reach or exceed the Subscription Price
and, even if it does so, that it will not decline during or after the Rights Offering. We also cannot assure you that you will be able
to sell shares of our ordinary shares purchased in the Rights Offering at a price equal to or greater than the Subscription Price. You
should make your investment decision based on your assessment of our business and financial condition, our prospects for the future and
the terms of this Rights Offering. Please see “Risk Factors” for a discussion of some of the risks involved in investing
in our ordinary shares.
Fees
and Expenses
We
will pay all fees and expenses charged by the Financial Advisor, the Subscription Agent and the Information Agent. You are responsible
for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of your Rights.
Listing
The
Rights are tradable. The shares of our ordinary shares are, and the shares to be issued in the Rights Offering will be, traded on NYSE
under the symbol “GNS RT”.
Important
Do
not send Rights Certificates directly to us. You are responsible for choosing the payment and delivery method for your Rights Certificate
and you bear the risks associated with such delivery. If you choose to deliver your Rights Certificate and payment by mail, we recommend
that you use registered mail, properly insured, with return receipt requested. We also recommend that you allow a sufficient number of
days to ensure delivery to the Subscription Agent and clearance of payment prior to the Expiration Date of Friday, February 14, 2025.
Financial
Advisor Arrangements
The
Company has engaged a Financial Advisor for this Rights Offering.
Under
the terms and subject to the conditions contained in the Financial Advisor agreement between our company and the Financial Advisor, the
Financial Advisor will provide advice to us in connection with this Rights Offering. This Rights Offering is not contingent upon any
number of Rights being exercised. The Financial Advisor is not underwriting any of the Rights or the shares of ordinary shares in this
Rights Offering.
Pursuant
to the Financial Advisor agreement, we are obligated to pay the Financial Advisor as compensation a cash fee of 7.0% of the proceeds
of the Rights Offering, plus a non-accountable expense fee of $150,000 and to indemnify the Financial Advisor for, or contribute to losses
arising out of, certain liabilities, including liabilities under the Securities Act. The Financial Advisor agreement also provides that
the Financial Advisor will not be subject to any liability to us in rendering the services contemplated by the Financial Advisor agreement
except for any act of bad faith or gross negligence of the Financial Advisor. The Financial Advisor and its affiliates may provide to
us from time to time in the future in the ordinary course of its business certain financial advisory, investment banking and other services
for which it will be entitled to receive customary fees. The Financial Advisor does not make any recommendation with respect to whether
you should exercise the Basic Subscription Privilege or Over-Subscription Privilege, or to otherwise invest in our company.
The
Financial Advisor has informed us that it may enter into selected dealer agreements with other broker-dealers pursuant to which (i) such
other broker-dealers have agreed or will agree to use their commercially reasonable efforts to procure subscriptions for the shares of
ordinary shares, and (ii) the Financial Advisor has agreed or will agree to reallocate a portion of its Financial Advisor fee to each
such broker-dealer whose clients exercise rights to purchase shares of ordinary shares in this Rights Offering.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The
following discussion is a summary of material U.S. federal income tax consequences relating to the receipt and exercise (or expiration)
of the Rights acquired through the Rights Offering and the ownership and disposition of shares of our ordinary shares received upon exercise
of the Rights.
This
summary deals only with Rights acquired through the Rights Offering and shares of our ordinary shares acquired upon exercise of Rights,
in each case, that are held as capital assets by a beneficial owner. This discussion does not address all aspects of U.S. federal income
taxation that may be relevant to such a beneficial owner in light of their personal circumstances, including the alternative minimum
tax and the Medicare contribution tax on investment income. This discussion also does not address tax consequences to holders that may
be subject to special tax rules, including, without limitation, insurance companies, real estate investment trusts, regulated investment
companies, grantor trusts, tax-exempt organizations, employee stock purchase plans, partnerships and other pass-through entities, persons
holding Rights or shares of our ordinary shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle,
financial institutions, brokers, dealers in securities or currencies, traders that elect to mark-to-market their securities, persons
that acquired Rights or shares of our ordinary shares in connection with employment or other performance of services, U.S. Holders (as
defined below) that have a functional currency other than the U.S. dollar, U.S. expatriates, and certain former citizens or residents
of the United States. In addition, the discussion does not describe any tax consequences arising out of the tax laws of any state, local
or foreign jurisdiction, or any U.S. federal tax considerations other than income taxation (such as estate, generation skipping or gift
taxation).
The
discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended, the United States Treasury regulations
promulgated thereunder, rulings and judicial decisions, as of the date hereof, and such authorities may be repealed, revoked or modified,
perhaps retroactively. We have not sought, and will not seek, any rulings from the Internal Revenue Service (“IRS”) regarding
the matters discussed below. There can be no assurance that the IRS or a court (if the matter were contested) will not take positions
concerning the tax consequences of the receipt of Rights acquired through the Rights Offering by persons holding shares of our ordinary
shares, the exercise (or expiration) of the Rights, and the acquisition, ownership and disposition of shares of our ordinary shares acquired
upon exercise of the Rights that are different from those discussed below.
As
used herein, a “U.S. Holder” means a beneficial owner of shares of our ordinary shares, Rights and shares of our ordinary
shares acquired upon exercise of Rights, as the case may be, that is for U.S. federal income tax purposes: (1) an individual who is a
citizen or resident of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes)
created or organized in or under the laws of the United States or any state thereof or the District of Columbia; (3) an estate the income
of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust (a) the administration of which is subject
to the primary supervision of a court within the United States and one or more United States persons as described in Section 7701(a)(30)
of the Code have authority to control all substantial decisions of the trust or (b) that has a valid election under the Treasury Regulations
in effect to be treated as a United States person. A “Non-U.S. Holder” is such a beneficial owner (other than an entity or
arrangement that is treated as a partnership for U.S. federal income tax purposes) that is not a U.S. Holder.
If
any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes is the record owner, the U.S. federal
income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. Holders
that are partnerships (and partners in such partnerships) are urged to consult their own tax advisors.
HOLDERS
OF SHARES OF OUR ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS
TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES
OF THE RECEIPT, OWNERSHIP AND EXERCISE OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR ORDINARY
SHARES ACQUIRED UPON EXERCISE OF SUBSCRIPTION RIGHTS.
Tax
Consequences to U.S. Holders
Taxation
of Subscription Rights
Receipt
of Subscription Rights
Although
the authorities governing transactions such as this Rights Offering are complex and do not speak directly to the consequences of certain
aspects of this Rights Offering, we do not believe your receipt of Rights pursuant to the Rights Offering should be treated as a taxable
distribution with respect to your existing shares of ordinary shares for U.S. federal income tax purposes. Pursuant to Section 305(a)
of the Code, in general, the receipt by a stockholder of a right to acquire stock should not be included in the taxable income of the
recipient. The general rule of non-recognition in Section 305(a) is subject to exceptions in Section 305(b), which include “disproportionate
distributions”. A disproportionate distribution is a distribution or a series of distributions, including deemed distributions,
that has the effect of the receipt of cash or other property by some stockholders and an increase in the proportionate interest of other
stockholders in a corporation’s assets or earnings and profits. During the last 36 months, we have not made any distributions of
cash or non-stock property with respect to: (i) our ordinary shares or (ii) our options or warrants to acquire ordinary shares. Currently
we do not intend to make any future distributions of cash or non-stock property with respect to: (i) our ordinary shares or (ii) our
options or warrants to acquire ordinary shares; however, there is no guarantee that we will not make such distributions in the future.
Our
position regarding the tax-free treatment of the Rights distribution is not binding on the IRS or the courts. If this position is finally
determined by the IRS or a court to be incorrect, whether on the basis that the issuance of the Rights is a disproportionate distribution
or otherwise, the fair market value of the Rights would be taxable to holders of our ordinary shares as a dividend to the extent of the
holder’s pro rata share of our current and accumulated earnings and profits, if any, with any excess being treated as a return
of capital to the extent thereof and then as capital gain. Although no assurance can be given, it is anticipated that we will not have
current and accumulated earnings and profits through the end of 2017.
Taxation
of Ordinary shares
Distributions
Distributions
with respect to shares of our ordinary shares acquired upon exercise of Rights will be taxable as dividend income when actually or constructively
received to the extent of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes. We currently
have a substantial accumulated deficit of approximately $151 million as of October 31, 2016.
Dividend
income received by certain non-corporate U.S. Holders with respect to shares of our ordinary shares generally will be “qualified
dividends” subject to preferential rates of U.S. federal income tax, provided that the U.S. Holder meets applicable holding period
and other requirements. Subject to similar exceptions for short-term and hedged positions, dividend income on our shares of ordinary
shares paid to U.S. Holders that are domestic corporations generally will qualify for the dividends-received deduction. To the extent
that the amount of a distribution exceeds our current and accumulated earnings and profits, such distribution will be treated first as
a tax-free return of capital to the extent of your adjusted tax basis in such shares of our ordinary shares and thereafter as capital
gain.
Dispositions
If
you sell or otherwise dispose of shares of ordinary shares acquired upon exercise of Rights in a taxable transaction, you will generally
recognize capital gain or loss equal to the difference between the amount realized and your adjusted tax basis in the shares. Such capital
gain or loss will be long-term capital gain or loss if your holding period for such shares is more than one year at the time of disposition.
Long-term capital gain of a non-corporate U.S. Holder is generally taxed at preferential rates of U.S. federal income tax. The deductibility
of capital losses is subject to limitations.
Information
Reporting and Backup Withholding
You
may be subject to information reporting and/or backup withholding with respect to the gross proceeds from the disposition shares of our
ordinary shares acquired through the exercise of Rights, or dividend payments. Backup withholding (currently at the rate of 28%) may
apply under certain circumstances if you (1) fail to furnish your social security or other taxpayer identification number, or TIN, (2)
furnish an incorrect TIN, (3) fail to report interest or dividends properly or (4) fail to provide a certified statement, signed under
penalty of perjury, that the TIN provided is correct, that you are not subject to backup withholding and that you are a U.S. person for
U.S. federal income tax purposes on IRS Form W-9. Any amount withheld from a payment under the backup withholding rules is allowable
as a credit against (and may entitle you to a refund with respect to) your U.S. federal income tax liability, provided that the required
information is timely furnished to the IRS. Certain persons are exempt from information reporting and backup withholding, including corporations
and certain financial institutions, provided that they demonstrate this fact, if requested. You are urged to consult your own tax advisor
as to your qualification for exemption from backup withholding and the procedure for obtaining such exemption.
Tax
Consequences to Non-U.S. Holders
Receipt,
Exercise and Expiration of the Subscription Rights
The
discussion assumes that the receipt of Rights will be treated as a non-taxable distribution. See “Tax Consequences to U.S. Holders-Taxation
of Subscription Rights-Receipt of Subscription Rights” above.
Taxation
of Distributions on Ordinary shares
Any
distributions of cash or property made with respect to our ordinary shares generally will be subject to withholding tax to the extent
paid out of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes, if any, at a rate of
30% (or a lower rate prescribed by an applicable income tax treaty). In order to obtain a reduced withholding tax rate, if applicable,
you will be required to provide a properly completed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, certifying your entitlement
to benefits under a treaty. In addition, you will not be subject to withholding tax if you provide an IRS Form W-8ECI certifying that
the distributions are effectively connected with your conduct of a trade or business within the United States (and, if an applicable
income tax treaty so provides, are attributable to a permanent establishment within the United States); instead, you generally will be
subject to U.S. federal income tax, net of certain deductions, with respect to such income at the same rates applicable to U.S. persons.
If you are a corporation, a “branch profits tax” of 30% (or a lower rate prescribed by an applicable income tax treaty) also
may apply to such effectively connected income.
Non-U.S.
Holders may be required to periodically update their IRS Forms W-8.
Any
distribution will also be subject to the discussion below under the heading “FATCA”.
Sale
or Other Disposition of Our Ordinary shares
Subject
to the discussion below regarding backup withholding and FATCA, you generally will not be subject to U.S. federal income tax on any gain
realized on a sale or other disposition of shares of our ordinary shares unless:
●
the gain is effectively connected with your conduct of a trade or business within the United States (and, if an applicable income tax
treaty so provides, is attributable to a permanent establishment in the United States);
●
you are an individual, you hold your Rights or shares of ordinary shares as capital assets, you are present in the United States for
183 days or more in the taxable year of disposition and certain other conditions are met (in which case you will be subject to a 30%
tax, or such lower rate as may be specified by an applicable income tax treaty, on the net gain derived from the disposition, which may
be offset by your U.S.-source capital losses, if any); or
●
we are or have been a “United States real property holding corporation”, or USRPHC, for U.S. federal income tax purposes
unless an exception for 5% or less shareholders applies.
Gain
that is effectively connected with your conduct of a trade or business within the United States (and, if an applicable income tax treaty
so provides, is attributable to a permanent establishment within the United States) generally will be subject to U.S. federal income
tax, net of certain deductions, at the same rates applicable to U.S. persons. If you are a corporation, a “branch profits tax”
of 30% (or a lower rate prescribed in an applicable income tax treaty) also may apply to such effectively connected gain.
A
domestic corporation is treated as a USRPHC if the fair market value of its United States real property interests equals or exceeds 50%
of the sum of (1) the fair market value of its United States real property interests, (2) the fair market value of its non-United States
real property interests and (3) the fair market value of any other of its assets which are used or held for use in a trade or business.
We believe that we are not currently, and have not been within the relevant testing period, a USRPHC. However, no assurance can be given
that we will not become a USRPHC in the future. If we are a USRPHC or become a USRPHC in the future, a Non-U.S. Holder may still not
be subject to U.S. federal income tax on a sale or other disposition if an exception for 5% or less shareholders applies. You are urged
to consult your own tax advisor regarding the U.S. federal income tax considerations that could result if we are, or become, a USRPHC
and with respect to the exception for 5% or less shareholders.
Information
Reporting and Backup Withholding
Distributions
on our ordinary shares and the amount of tax withheld, if any, with respect to such distributions will generally be subject to information
reporting. If you comply with certification procedures to establish that you are not a United States person, additional information reporting
and backup withholding should not generally apply to distributions on our ordinary shares and information reporting and backup withholding
should not generally apply to the proceeds from a sale or other disposition of shares of our ordinary shares. Generally, a Non-U.S. Holder
will comply with such procedures if it provides a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable, (or other applicable
IRS Form W-8) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. Holder, or otherwise establishes
an exemption. The amount of any backup withholding will generally be allowed as a refund or credit against your U.S. federal income tax
liability, provided that the required information is timely furnished to the IRS.
FATCA
Payments
of dividends on our ordinary shares to a Non-U.S. Holder will be subject to a 30% withholding tax if the Non-U.S. Holder fails to provide
the withholding agent with documentation sufficient to show that it is compliant with FATCA. Generally such documentation is provided
on an executed and properly completed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. If dividends are subject to the 30% withholding
tax under FATCA, they will not be subject to the 30% withholding tax described above under “Tax Consequences to Non-U.S. Holders-Taxation
of Distributions on Ordinary shares.” Starting in 2019, payments of the gross proceeds from a sale or exchange of our ordinary
shares or other securities may also be subject to FATCA withholding absent proof of FATCA compliance prior to January 1, 2019.
THE
PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES IS NOT TAX ADVICE. HOLDERS OF SUBSCRIPTION RIGHTS AND SHARES OF
OUR ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS AND THE CONSEQUENCES UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES OF THE RECEIPT,
OWNERSHIP AND EXERCISE OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR ORDINARY SHARES ACQUIRED
UPON EXERCISE OF SUBSCRIPTION RIGHTS.
DESCRIPTION
OF SECURITIES WE ARE OFFERING
For
a description of the Rights being offered hereby, please see “The Rights Offering” above. For a description of the
ordinary shares issuable upon exercise of the Rights, please see “Description of Securities We May Offer” in the accompanying
prospectus.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our ordinary shares. We currently intend to retain earnings, if any, to support our
business strategy and do not anticipate paying cash dividends in the foreseeable future. Payment of future dividends, if any, will be
at the sole discretion of our board of directors after taking into account various factors, including our financial condition, operating
results, capital requirements and any plans for expansion.
PLAN
OF DISTRIBUTION
Introduction
Promptly
after the Record Date for the Rights Offering, we will distribute the Rights Certificate and any other subscription documents to stockholders
of record as of January 24, 2025. If you wish to exercise your Rights, you should follow the instructions in the subscription documents
sent to you and also available from the Information Agent. If you are unable to do so, you may call the Information Agent for assistance.
See “The Rights Offering — Methods for Exercising Subscription Rights.” If you have any questions, you should
contact the Information Agent.
Financial
Advisor
Under
the terms and subject to the conditions contained in the Financial Advisor agreement between our company and the Financial Advisor, the
Financial Advisor will provide advice to us in connection with this Rights Offering. This Rights Offering is not contingent upon any
number of Rights being exercised. The Financial Advisor is not underwriting any of the Rights or the shares of ordinary shares in this
Rights Offering.
Pursuant
to the Financial Advisor agreement, we are obligated to pay the Financial Advisor as compensation a cash fee of 7.0% of the proceeds
of the Rights Offering, plus a $150,000 non-accountable expense fee and to indemnify the Financial Advisor for, or contribute to losses
arising out of, certain liabilities, including liabilities under the Securities Act. The Financial Advisor agreement also provides that
the Financial Advisor will not be subject to any liability to us in rendering the services contemplated by the Financial Advisor agreement
except for any act of bad faith or gross negligence of the Financial Advisor. The Financial Advisor and its affiliates may provide to
us from time to time in the future in the ordinary course of its business certain financial advisory, investment banking and other services
for which it will be entitled to receive customary fees. The Financial Advisor does not make any recommendation with respect to whether
you should exercise the Basic Subscription Privilege or Over-Subscription Privilege, or to otherwise invest in our company.
The
Financial Advisor has informed us that it may enter into selected dealer agreements with other broker-dealers pursuant to which (i) such
other broker-dealers have agreed or will agree to use their commercially reasonable efforts to procure subscriptions for the shares of
ordinary shares, and (ii) the Financial Advisor has agreed or will agree to reallocate a portion of its Financial Advisor fee to each
such broker-dealer whose clients exercise rights to purchase shares of ordinary shares in this Rights Offering.
Other
than as described in this prospectus supplement, we do not know of any existing agreements between or among any stockholder, broker,
dealer, underwriter or agent relating to the sale or distribution of the shares offered hereby.
Electronic
Distribution
This
prospectus may be made available in electronic format on websites or via email or through other online services maintained by the Financial
Advisor. Other than this prospectus supplement and the accompanying prospectus in electronic format, the information on the Financial
Advisor’s websites and any information contained on any other websites maintained by the Financial Advisor is not part of this
prospectus supplement or the accompanying prospectus, has not been approved and/or endorsed by us or the Financial Advisor, and should
not be relied upon by investors.
The
foregoing does not purport to be a complete statement of the terms and conditions of the Financial Advisor agreement. A copy of the Financial
Advisor agreement will be included as an exhibit to a current report on Form 8-K that we will file with the SEC within four business
days of the date hereof. See “Where You Can Find More Information.”
Regulation
M Restrictions
The
Financial Advisor may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees received
by it might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the Financial Advisor
would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of any purchases and sales of securities by
the Financial Advisor acting as a principal. Under these rules and regulations, the Financial Advisor must not engage in any stabilization
activity in connection with our securities, and must not bid for or purchase any of our securities or attempt to induce any person to
purchase any of our securities, other than as permitted under the Exchange Act.
Price
Stabilization, Short Positions
No
person has been authorized by our company to engage in any form of price stabilization in connection with this Rights Offering.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus supplement will be passed upon for us by Jolie Kahn, Esq., New York, New York.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus supplement is part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and does not contain
all the information set forth in the registration statement. Whenever a reference is made in this prospectus to any of our contracts,
agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration
statement or the exhibits to the reports or other documents incorporated by reference into this prospectus supplement for a copy of such
contract, agreement or other document. Because we are subject to the information and reporting requirements of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with
the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov. You may also
read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
are “incorporating by reference” certain documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents. The information in the documents incorporated by reference is considered to be part of this
prospectus supplement. Statements contained in documents that we file with the SEC and that are incorporated by reference in this prospectus
supplement will automatically update and supersede information contained in this prospectus supplement, including information in previously
filed documents or reports that have been incorporated by reference in this prospectus supplement, to the extent the new information
differs from or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they are
incorporated herein by reference as of their respective dates of filing:
| ● |
Our
Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on May 15, 2024; |
| |
|
| ● |
Our
Form 6-K Current Reports filed on May 15, 2024, May 17, 2024, May 20, 2024, May 22, 2024, June 4, 2024, June 6, 2024, June 6, 2024,
June 11, 2024 June 25, 2024, June 26, 2024, June 26, 2024, June 28, 2024, July 15, 2024, July 19, 2024, July 24, 2024, July 24, 2024,
July 26, 2024, August 06, 2024, August 09, 2024, August 13, 2024, August 16, 2024; August 16, 2024, September 12, 2024, September 16, 2024, September 24, 2024, September 25, 2024, October 1, 2024, October 4, 2024, October 8, 2024, October 15, 2024, October 24, 2024, October 25, 2024, October 28, 2024, November 12, 2024, November 13, 2024, November 14, 2024, November 18, 2024, November 20, 2024, November 21, 2024, November 27, 2024, December 3, 2024, December 4, 2024, December 6, 2024, December 10, 2024, December 13, 2024, December 17, 2024, December 27, 2024, December 30, 2024, December 31, 2024, January 3, 2025, January 10, 2025, January 14, 2025 and January 16, 2025; and |
| |
|
| ● |
the
description of our Ordinary Shares contained in our Registration Statement on Form 8-A (File No. 001-41353) filed with the SEC on
April 11, 2022, as it may be amended from time to time. |
All
documents that we filed with the SEC pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this
registration statement and prior to the filing of a post-effective amendment to this registration statement that indicates that all securities
offered under this prospectus supplement have been sold, or that deregisters all securities then remaining unsold, will be deemed to
be incorporated in this registration statement by reference and to be a part hereof from the date of filing of such documents.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus supplement shall be deemed
modified, superseded or replaced for purposes of this prospectus supplement to the extent that a statement contained in this prospectus
supplement, or in any subsequently filed document that also is deemed to be incorporated by reference in this prospectus supplement,
modifies, supersedes or replaces such statement. Any statement so modified, superseded or replaced shall not be deemed, except as so
modified, superseded or replaced, to constitute a part of this prospectus supplement. None of the information that we disclose any Current
Report on Form 6-K or any corresponding information, either furnished under Item 9.01 or included as an exhibit therein, that we may
from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus supplement, except
as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus supplement
is qualified in its entirety by the information appearing in the documents incorporated by reference.
We
will promptly provide, without charge to each person (including any beneficial owners) who receives a copy of this prospectus, upon written
or oral request, a copy of any or all of the documents incorporated by reference in this prospectus supplement. You may request, orally
or in writing, a copy of these documents, by contacting our Corporate Secretary at 8 Amoy Street, #01-01, Singapore 049950, which is
also our registered address, and our telephone number is +65 8940 1200. Information about us is also available at our website at http://www.geniusgroup.net.
However, the information on our website is not a part of this prospectus supplement or the accompanying prospectus and is not incorporated
by reference.
PROSPECTUS
GENIUS
GROUP LIMITED
$250,000,000
Ordinary
Shares
Preferred
Stock
Debt
Securities
Warrants
Subscription
Rights
Units
We
may offer and sell, from time to time in one or more offerings, any combination of the securities identified above, either individually
or in combination with other securities. This base prospectus provides you with a general description of the securities. On August
16, 2024, we effected a 1-for-10 reverse share split with respect to our ordinary shares. Unless we indicate otherwise or the context
otherwise requires, all information in this prospectus gives effect to this share split.
Each
time we offer and sell securities, we will provide a supplement to this base prospectus that contains specific information about the
offering and the amounts, prices, and terms of the securities. We may also authorize one or more free writing prospectuses to be provided
to you in connection with these offerings. Each prospectus supplement and any related free writing prospectuses may also add, update,
or change information contained in this base prospectus with respect to that offering. You should carefully read this base prospectus
and the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference,
before you invest in any of our securities.
We
may offer and sell the securities described in this base prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are
involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission, or discount arrangement
between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement.
See the sections of this base prospectus entitled “About this Prospectus” and “Plan of Distribution”
for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing
the method and terms of the offering of such securities.
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE
HEADING “RISK FACTORS” ON PAGE 5 OF THIS BASE PROSPECTUS, THE APPLICABLE PROSPECTUS SUPPLEMENT, AND IN ANY
APPLICABLE FREE WRITING PROSPECTUS, AS WELL AS UNDER SIMILAR HEADINGS IN THE DOCUMENTS INCORPORATED BY REFERENCE INTO THIS BASE
PROSPECTUS.
Our
common stock is currently listed on The NYSE American (“NYSE”) under the symbol “GNS.” On August 26, 2024,
the last reported sales price for our common stock was $1.15 per share. The applicable prospectus supplement will contain information,
where applicable, as to any other listing on NYSE or any securities market or other exchange of the securities, if any, covered by the
applicable prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is August 27, 2024.
TABLE
OF CONTENTS
Explanatory Note: On August 16, 2024, we effected
a 1-for-10 reverse split with respect to our issued and outstanding ordinary shares. Unless we indicate otherwise or the context otherwise
requires, all information in this prospectus gives effect to this share split.
ABOUT
THIS PROSPECTUS
Under
this shelf registration process, we may offer and sell any combination of the securities described in this base prospectus in one or
more offerings. This base prospectus provides you with a general description of the securities we may offer.
Each
time we offer securities under this base prospectus, we will provide a prospectus supplement that will contain more specific information
about the terms of those securities and that offering. We may also authorize one or more free writing prospectuses to be provided to
you that may contain material information relating to these offerings. The prospectus supplement and any related free writing prospectus
we have authorized for use in connection with a specific offering may also add, update, or change any of the information contained in
this prospectus or in the documents that we have incorporated by reference into this prospectus. If there is any inconsistency between
the information in this prospectus and the applicable prospectus supplement or free writing prospectus, you should rely on the prospectus
supplement or free writing prospectus, as applicable. However, no prospectus supplement will offer a security that is not registered
and described in this prospectus at the time of its effectiveness. This base prospectus, together with the applicable prospectus supplements
and the documents incorporated by reference into this prospectus, includes all material information relating to the offering of securities
under this base prospectus.
Before
purchasing any securities, we urge you to read carefully this prospectus, the applicable prospectus supplement and any free writing prospectuses
we have authorized for use in connection with a specific offering, together with the information incorporated herein by reference as
described under the section entitled “Information Incorporated by Reference” before buying any of the securities being
offered.
THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
You
should rely only on the information contained in, or incorporated by reference into, this base prospectus, the applicable prospectus
supplement and any free writing prospectuses, along with the information contained in any free writing prospectuses we have authorized
for use in connection with a specific offering. We have not authorized anyone to provide you with different or additional information.
This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is
lawful to do so.
The
information appearing in this base prospectus, the applicable prospectus supplement, or any related free writing prospectus is accurate
only as of the date on the front of the document and any information we have incorporated by reference is accurate only as of the date
of the document incorporated by reference, regardless of the time of delivery of this prospectus, the applicable prospectus supplement
or any related free writing prospectus, or any sale of a security. Our business, financial condition, results of operations, and prospects
may have changed since those dates.
This
base prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the heading “Where
You Can Find More Information.”
Before
buying any of the securities that the selling shareholder is offering, you should carefully read both this prospectus and any prospectus
supplement with all of the information incorporated by reference in this prospectus, as well as the additional information described
under the heading “Where You Can Find More Information” and “Information Incorporated by Reference.” These documents
contain important information that you should consider when making your investment decision. We have filed or incorporated by reference
exhibits to the registration statement of which this prospectus forms a part. You should read the exhibits carefully for provisions that
may be important to you.
To
the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in
any prospectus supplement or in any document incorporated by reference in this prospectus, on the other hand, you should rely on the
information in this prospectus, provided that if any statement in one of these documents is inconsistent with a statement in another
document having a later date—for example, a prospectus supplement or a document incorporated by reference in this prospectus—the
statement in the document having the later date modifies or supersedes the earlier statement.
The
information contained in this prospectus, any applicable prospectus supplement or any document incorporated by reference in this prospectus
is accurate only as of their respective dates, regardless of the time of delivery of this prospectus, any applicable prospectus supplement
or the documents incorporated by reference in this prospectus or the sale of any securities. Our business, financial condition, results
of operations and prospects may have changed materially since those dates.
We
have not authorized anyone to provide any information or to make any representations other than as contained in this prospectus, any
amendment or supplement to this prospectus, or any free writing prospectus prepared by or on behalf of us or to which we may have referred
you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give
you. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the ordinary
shares described in this prospectus or an offer to sell or the solicitation of an offer to buy such ordinary shares in any circumstances
in which such offer or solicitation is unlawful.
For
investors outside the United States: We have not taken any action that would permit the offering or possession or distribution of this
prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United
States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering
of the securities described herein and the distribution of this prospectus outside the United States.
Unless
otherwise indicated or the context otherwise requires, all references in this prospectus to Genius Group, the “Company,”
“we,” “our,” “ours,” “us” or similar terms refer to Genius Group Limited and its consolidated
subsidiaries.
Presentation
of Financial Information
Our
consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with IFRS Accounting Standards as
issued by the International Accounting Standards Board. None of the consolidated financial statements were prepared in accordance with
generally accepted accounting principles in the United States (“U.S. GAAP”). The terms “dollar,” “USD”
and “$” refer to U.S. dollars, unless otherwise indicated.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus or incorporated by reference in this prospectus. This summary may
not contain all the information that may be important to you, and we urge you to read this entire prospectus and the documents incorporated
by reference in this prospectus carefully before deciding to invest in our securities.
Our
Company
We
believe that we are a world leading entrepreneur Edtech and education group based on student numbers with a student base of 3.5
million on GeniusU at the end of December 2023. Our mission is to disrupt the current education model with a student-centered,
lifelong learning curriculum that prepares students with the leadership, entrepreneurial and life skills to succeed in today’s
market.
To
help achieve our mission, we have completed an IPO on NYSE American, on April 14, 2022 and then dual listed the company on Upstream on
April 6, 2023 (although we subsequently found that there was little demand for Upstream and on September 19, 2023, Genius Group. Ltd.
publicly announced that it had commenced the process to delist its securities from Upstream, which process was completed on September
29, 2023. The Genius Group will have no further contact with Upstream as a result of this delisting. It will not be involved with or
take part in any distribution of or listing of the shares of its spun off subsidiary, Entrepreneur Resorts Ltd (“ERL”) on
Upstream or any other exchange, which will be the sole responsibility of ERL. The decision to delist the Company from Upstream is due
to complex securities regulations arising from the dual listing on Upstream and NYSE and de minimis use of Upstream by GNS shareholders).
We have also raised additional capital through a follow-on private placement of a Convertible Note in September 2022. We grew from a
Pre-IPO Group of four companies to a post IPO Group of nine companies, once the five Acquisitions closed.
Starting
from October 30, 2023, U.S. individuals will no longer have the authorization to engage in securities trading activities (including buying,
selling, or depositing) on the Upstream/MERJ Exchange. All U.S. shareholders will be promptly removed from Upstream and their holdings
will be transferred back to the ERL book entry system. Investors will still need to follow the process to claim their ERL shares, but
these shares will be exclusively held with ERL through the registrar. Shareholders won’t be able to view their positions on Upstream,
as they will no longer be maintained in Upstream accounts. Trading these securities won’t be possible after a 6-month period, and
shareholders will remain as such until ERL lists on another market or until the SEC accepts the Upstream/MERJ position of 15A-6.
Our
Pre-IPO Group includes our holding company, Genius Group Ltd, our Edtech platform, GeniusU Ltd, and two companies that we acquired: Entrepreneurs
Institute in 2019 and Entrepreneur Resorts in 2020 (spin-off completed on October 2, 2023).
The
entrepreneur education system of our Pre-IPO Group has been delivered virtually and in-person, in multiple languages, locally and globally
mainly via our GeniusU Edtech platform to adults seeking to grow their entrepreneur and leadership skills. Our partners and community
are global with an average of 8,900 new students joining our GeniusU platform each week in 2023. Our City Leaders have been conducting
our events (physically or virtually) in over 100 cities and over 2,500+ faculty members have been operating their microschools using
our online tools.
We
are now expanding our education system to age groups beyond our adult audience, to children and young adults. The five Acquisitions are
our first step towards this. They include: Education Angels, which provides early learning in New Zealand for children from 0-5 years
old; E-Square, which provides primary and secondary school education in South Africa; University of Antelope Valley, which provides vocational
certifications and university degrees in California, USA; Property Investors Network, which provides property investment courses and
events in England, UK; and Revealed Films, a media production company that specializes in multi-part documentaries.
Our
plan is to combine their education programs with our current education programs and Edtech platform as part of one lifelong learning
system, and we have selected these acquisitions because they already share aspects of our Genius Curriculum and our focus on entrepreneur
education.
The
FatBrain AI acquisition has added $51.8 million in revenue to the Group in the year ended Dec 31, 2023, which represents 74% of the $70.4
million pro forma Group revenue during this period, while the rest of the Group generated $18.7 million in pro forma revenue. For the
year ended December 31, 2023, the audited group revenue was $23.1 million compared to $18.2 million in 2022.
In
coming years, we plan to continue the growth of our Group through a combination of organic growth of our Edtech platform together with
the acquisition of various education companies that we believe provide complementary programs that can be added to our Genius Curriculum.
This Prospectus provides details of both our acquisition strategy together with our plans to integrate these Acquisitions together with
future acquisitions into our Edtech platform, “entrepreneur education” vision, Genius Curriculum and “freemium”
student and partner conversion models.
We
define “entrepreneur education” as personalized discovery-based learning that leads to higher levels of self-awareness, self-mastery
and self-expression. We believe this in turn develops leadership and entrepreneurial skills through which students can independently
create value and “create a job” rather than being dependent on a system in which they need to “get a job”. We
believe these skills can be nurtured from an early age.
We
also believe these skills can be learned at any age, enabling adults to reskill and upskill themselves. We describe our Genius Curriculum,
together with the philosophy, principles, learning methodology, course content and delivery of our curriculum in the Business section
set forth below in this prospectus.
Change
in Registrant’s Certifying Accountant.
On
March 13, 2024, Marcum LLP sent a letter to the Company terminating the auditor client relationship. The termination of auditor relationship
was disclosed in a Form 6-K dated March 19, 2024. The termination is not as a result of a disagreement between the two entities.
On
March 28, 2024, the Group, following approval by the audit committee, appointed Enrome LLP as an independent public accounting firm for
the Group’s IFRS consolidated financial statements for Financial Year 2023 and re-audit Financial Year 2022 and 2021. The engagement
was finalized after inquires completed by the incoming Enrome LLP with Marcum LLP. The appointment of auditor was disclosed in a Form
6-K dated March 28, 2024.
Marcum’s
audit report on our consolidated financial statement as of December 31, 2022 and December 31, 2021 and for each of the years ended December
31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. As previously disclosed in the Company’s Annual Reports on Form 20-F for the
fiscal years ended December 31, 2022, material weaknesses existed in the Company’s internal control over financial reporting at
December 31, 2022 because of
| |
● |
lack
of sufficient documentation of our existing financial processes, risk assessment and internal controls activities and evaluation
of effectiveness of internal controls; |
| |
● |
Inadequate
internal controls, including inadequate segregation of duties, over account reconciliations, the preparation and review of the consolidated
financial statements and untimely annual closings of the books; |
| |
● |
Inadequate
internal control over accounting for and financial reporting related to business combination accounting and subsequent assessment
for impairments as they related to goodwill and other long lived assets; and |
| |
● |
Inadequate
information technology general controls as it relates to user access rights and segregation of duties over systems that are critical
to the Company’s system of financial reporting. |
During
each of the years ended December 31, 2023 and 2022 and the subsequent interim period through March 28, 2024, neither the Group nor anyone
on behalf of the Group consulted Enrome LLP regarding (i) the application of accounting principles to a specific transaction, either
completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written
report nor oral advice was provided to us that Enrome LLP concluded was an important factor considered by us in reaching a decision as
to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject of a disagreement pursuant to Item 16F(a)(1)(iv)
of Form 20-F, or (iii) any reportable event pursuant to Item 16F(a)(1)(v) of Form 20-F.
We
provided Marcum LLP with a copy of the disclosures under this Item 16F and requested from Marcum a letter addressed to the Securities
and Exchange Commission indicating whether it agrees with such disclosures.
Resignation
of director and appointment of a director
On
June 20, 2024, Eric Pulier resigned as a director of the Company. He will serve as a Board advisor and will also be a consultant to the
Company. On June 20, 2024, Michael Moe was appointed as a director to fill the vacancy arising from Mr. Pulier’s resignation. Mr.
Moe was also appointed to fill the vacancies arising from Mr. Pulier’s resignation from each of the Company’s Audit Committee,
Compensation Committee and Governance Committee. Mr. Moe has been deemed by the Board of Directors of the Company to be an independent
director. On July 24, 2024, Riaz Shah was appointed as a director and has been deemed by the Board of Directors of the Company to
be an independent director.
Corporate
Information
Our
principal executive offices are located at 8 Amoy Street, #01-01, Singapore 049950, which is also our registered address, and our telephone
number is +65 8940 1200. The address of our website is www.geniusgroup.net. Information contained on, or available through,
our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus. Our agent for service of
process in the United States is Jolie Kahn, Esq..
RISK
FACTORS
Investing
in our securities involves risk. Before making a decision to invest in our securities, you should carefully consider the risks described
under “Risk Factors” in our then-most recent Annual Report on Form 20-F, and any updates to those risk factors in our reports
on Form 6-K incorporated by reference in this prospectus, together with all of the other information appearing or incorporated by reference
in this prospectus, in light of your particular investment objectives and financial circumstances. Although we discuss key risks in our
discussion of risk factors, new risks may emerge in the future, which may prove to be significant. We cannot predict future risks or
estimate the extent to which they may affect our business, results of operations, financial condition and prospects.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference in this prospectus contain statements that constitute forward-looking statements
within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”). All statements other than statements of historical facts, including statements regarding our future results of operations
and financial position, business strategy, technology, collaborations and partnerships, as well as plans and objectives of management
for future operations are forward-looking statements. Many of the forward-looking statements contained in this prospectus can be identified
by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,”
“should,” “plan,” “intend,” “estimate,” “will” and “potential,”
among others.
Forward-looking
statements are based on our management’s beliefs and assumptions and on information available to our management at the time such
statements are made. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed
or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the “Risk
Factors” section of this prospectus and in the documents incorporated by reference in this prospectus. Forward-looking statements
speak only as of the date on which they were made. Because forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking
statements as predictions of future events. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge
from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable
law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events,
changed circumstances or otherwise. You should read this prospectus, the documents incorporated by reference in this prospectus and the
documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding
that our actual future results may be materially different from what we expect.
In
addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These
statements are based upon information available to us as of the date of such statements, and while we believe such information forms
a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate
that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are
inherently uncertain and investors are cautioned not to unduly rely upon these statements.
USE
OF PROCEEDS
Except
as described in the applicable prospectus supplement or in any free-writing prospectuses we have authorized for use in connection with
a specific offering, we currently intend to use the net proceeds from the sale of securities under this prospectus, if any, for general
corporate purposes, including strategic acquisitions, joint ventures, expansion of existing assets, and repayment of debt and other outstanding
obligations.
The
amounts and timing of our use of the net proceeds from the sale of securities under this prospectus will depend on a number of factors,
such as the timing and progress of our research and development efforts, the timing and progress of any partnering and commercialization
efforts, technological advances and the competitive environment for our products. As of the date of this prospectus, we cannot specify
with certainty all of the particular uses for the net proceeds to us from the sale of securities under this prospectus or any applicable
prospectus supplement. Accordingly, our management will have broad discretion in the timing and application of these proceeds. Pending
application of the net proceeds as described above, we intend to temporarily invest the proceeds in interest-bearing instruments.
DIVIDEND
POLICY
We
currently anticipate that we will retain any future earnings for the operation and expansion of our business. Accordingly, we do not
currently anticipate declaring or paying any cash dividends on our ordinary shares for the foreseeable future. Any future determination
relating to our dividend policy will be made at the discretion of our Board and will depend on then existing conditions. We may, by ordinary
resolution, declare dividends at a general meeting of shareholders, but we are restricted from paying dividends in excess of the amount
recommended by our Board. Pursuant to Singapore law, no dividend may be paid except out of our profits.
DESCRIPTION
OF SHARE CAPITAL
General
For
the purposes of this section, references to “shareholders” mean those persons whose names and number of shares are entered
in our register of members. Only persons who are registered in our register of members are recognized under Singapore law as shareholders
of our Company. As a result, only registered shareholders have legal standing to institute shareholder actions against us or otherwise
seek to enforce their rights as shareholders. The branch register of members is maintained by VStock Transfer, LLC, our transfer agent.
We
will not, except as required by applicable law, recognize any equitable, contingent, future or partial interest in any ordinary share,
or any interest in any fractional part of an ordinary share, or other rights for any ordinary share other than the absolute right thereto
of the registered holder of that ordinary share.
The
shares offered in the offering pursuant to this prospectus are expected to be held through the Depository Trust Company (“DTC”).
Accordingly, DTC or its nominee, Cede & Co., will be the shareholder on record registered in our register of members. The holder
of our shares held in book-entry interests through DTC or its nominee may become a registered shareholder by exchanging its interest
in our shares for certificated shares and being registered in our register of members in respect of such shares. The procedures by which
a holder of book-entry interests held through DTC or its nominee may exchange such interests for certificated shares are determined by
DTC and VStock Transfer, LLC, in accordance with their internal policies and guidelines regulating the withdrawal and exchange of book-entry
interests for certificated shares, and following such an exchange VStock Transfer, LLC will perform the procedures to register the shares
in the branch register of members.
Under
the Singapore Companies Act, if (a) the name of any person is without sufficient cause entered in or omitted from the register of members;
or (b) default is made or unnecessary delay takes place in entering in the register of members the fact of any person having ceased to
be a member, the person aggrieved or any member of the public company or the company itself, may apply to the Singapore courts for rectification
of the register of members. The Singapore courts may either refuse the application or order rectification of the register of members,
and may direct the company to pay any damages sustained by any party to the application. The Singapore courts will not entertain any
application for the rectification of a register of members in respect of an entry which was made in the register of members more than
30 years before the date of the application.
The
number of ordinary shares outstanding after effecting for 1-for-10 reverse split as of August 26, 2024 is 21,708,798
and excludes:
| |
● |
152,492
management and employee share options issued
and reserved. |
| |
● |
6,725,072 warrants
issued and outstanding. |
| |
● |
Any
further conversion from the convertible debt issuance or any outstanding warrants. |
Ø
The
following description of our share capital and provisions of our constitution (formerly known as our memorandum and articles of
association) are summaries and are qualified by reference to the applicable provisions of Singapore law (including the Singapore
Companies Act) and our constitution. A copy of our constitution has been filed with the SEC as an exhibit to the registration
statement of which this prospectus forms a part.
Ordinary
Shares
As
of the date of this prospectus, our issued and paid-up ordinary share capital consisted of 21,708,798 ordinary shares as described
above. We currently have only one class of issued ordinary shares, which have identical rights in all respects and rank equally with
one another. Our ordinary shares have no par value as there is no concept of authorized share capital under Singapore law. There is a
provision in our constitution which provides that subject to the Singapore Companies Act, we may issue shares with such preferred, deferred
or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as our board of directors
may determine.
All
of our shares presently issued are fully paid-up, and existing shareholders are not subject to any calls on these shares. Although Singapore
law does not recognize the concept of “non-assessability” with respect to newly issued shares, we note that any subscriber
of our shares who has fully paid up all amounts due with respect to such shares will not be subject under Singapore law to any personal
liability to contribute to the assets or liabilities of our Company in such subscriber’s capacity solely as a holder of such shares.
We believe that this interpretation is substantively consistent with the concept of “non-assessability” under most, if not
all, U.S. state corporations’ laws. All of our shares are in registered form. We cannot, except in the circumstances permitted
by the Singapore Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our own shares. Except
as described below under “— Take-overs,” there are no limitations imposed by the Singapore Companies Act or by our
constitution on the rights of shareholders not resident in Singapore to hold or vote in respect of our ordinary shares.
Transfer
Agent and Branch Registrar
The
transfer agent and branch registrar for our ordinary shares is VStock Transfer, LLC.
Listing
We
have listed our ordinary shares listed on the NYSE American under the symbol “GNS”.
New
Shares
Under
the Singapore Companies Act, new shares may be issued only with the prior approval of our shareholders in a general meeting. General
approval may be sought from our shareholders in a general meeting for the issuance of shares. Such approval, if granted, will lapse at
the earlier of:
Ø
the conclusion of the next annual general meeting; or
Ø
the expiration of the period within which the next annual general meeting is required by law to be held
(i.e., within six months after the end of each financial year), but any approval may be revoked or varied by the shareholders in a general
meeting.
Our
shareholders have in April 2021 provided such general authority to issue new ordinary shares until the conclusion of our next annual
general meeting, or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier.
Such approval will lapse in accordance with the preceding paragraph if our shareholders do not grant a new approval at our next annual
general meeting, or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier.
Subject to this and the provisions of the Singapore Companies Act and our constitution, our board of directors may allot and issue new
ordinary shares on such terms and conditions and for such purposes as may be determined by our board of directors in its sole discretion.
Preference
Shares
We
currently do not have any preference shares issued.
Under
the Singapore Companies Act, different classes of shares in a public company may be issued only if (a) the issue of the class or classes
of shares is provided for in the constitution of the public company and (b) the constitution of the public company sets out in respect
of each class of shares the rights attached to that class of shares. Our constitution provides that subject to the Singapore Companies
Act we may issue shares with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise as our board of directors may determine.
We
may, subject to the Singapore Companies Act and the prior approval in a general meeting of our shareholders, issue preference shares
which are, or at our option are to be, subject to redemption provided that such preference shares may not be redeemed out of capital
unless:
Ø
all the directors have made a solvency statement in relation to such redemption; and
Ø
we have lodged a copy of the statement with the Singapore Registrar of Companies.
Further,
such shares must be fully paid-up before they are redeemed.
As
of the date of this prospectus, we have no preference shares outstanding. At present, we have no plans to issue preference shares.
Registration
Rights
There
are currently no registration rights relating to our securities.
Transfer
of Ordinary Shares
Subject
to applicable securities laws in relevant jurisdictions and our constitution, our ordinary shares are freely transferable. Our constitution
provides that shares may be transferred by a duly signed instrument of transfer in any usual or common form or in a form approved by
the directors. The directors may decline to register any transfer unless, among other things, evidence as the directors may reasonably
require to show the right of the transferor to make the transfer.
Election
and Re-election of Directors
We
may, by ordinary resolution, remove any director before the expiration of his or her period of office, notwithstanding anything in our
constitution or in any agreement between us and such director but where any director so removed was appointed to represent the interests
of any particular class of shareholders or debenture holders the resolution to remove him or her shall not take effect until his or her
successor has been appointed. We may also, by an ordinary resolution, appoint another person in place of a director removed from office
pursuant to the foregoing.
Our
constitution provides that at each annual general meeting, one-third of the directors for the time being, or if the number is not three
or a multiple of three, then the number nearest one-third, shall retire from office by rotation and will be eligible for re-election
at that annual general meeting (the directors so to retire being those longest in office since their last election).
Our
board of directors shall have the power, at any time and from time to time, to appoint any person to be a director either to fill a casual
vacancy or as an additional director so long as the total number of directors shall not at any time exceed the maximum number (if any)
fixed in accordance with our constitution. Any director so appointed shall hold office only until the next retirement of directors under
our constitution and shall then be eligible for re-election but shall not be taken into account in determining the directors who are
to retire by rotation under our constitution.
Shareholders’
Meetings
Subject
to the Singapore Companies Act, we are required to hold an annual general meeting within six months after the end of each financial year.
The directors may convene an extraordinary general meeting whenever they think fit and they must do so upon the written requisition of
shareholders holding not less than 10% of the total number of paid-up shares as of the date of deposit of the requisition carrying the
right to vote at a general meeting (disregarding paid-up shares held as treasury shares). In addition, two or more shareholders holding
not less than 10% of our total number of issued shares (excluding our treasury shares) may call a meeting of our shareholders.
The
Singapore Companies Act provides that a shareholder is entitled to attend any general meeting and speak on any resolution put before
the general meeting. The holder of a share may vote on a resolution before a general meeting of the company if the share confers on the
holder a right to vote on that resolution. Unless otherwise required by law or by our constitution, resolutions put forth at general
meetings may be decided by ordinary resolution, requiring the affirmative vote of a simple majority of the shareholders present in person
or represented by proxy at the meeting and entitled to vote on the resolution. An ordinary resolution suffices, for example, for appointments
of directors (unless the constitution otherwise provides). A special resolution, requiring an affirmative vote of not less than three-fourths
of the shareholders present in person or represented by proxy at the meeting and entitled to vote on the resolution, is necessary for
certain matters under Singapore law, such as an alteration of our constitution. We must give at least 21 days’ notice in writing
for every general meeting convened for the purpose of passing a special resolution. General meetings convened for the purpose of passing
ordinary resolutions generally require at least 14 days’ notice in writing. A shareholder entitled to attend and vote at a meeting
of the company, or at a meeting of any class of shareholders of the company, shall be entitled to appoint another person or persons,
whether a shareholder of the company or not, as the shareholder’s proxy to attend and vote instead of the shareholder at the meeting.
Under the Singapore Companies Act, a proxy appointed to attend and vote instead of the shareholder shall also have the same right as
the shareholder to speak at the meeting, but unless the constitution of the company otherwise provides, (i) a proxy shall not be entitled
to vote except on a poll, (ii) a shareholder shall not be entitled to appoint more than two proxies to attend and vote at the same meeting
and (iii) where a shareholder appoints two proxies, the appointment shall be invalid unless the shareholder specifies the proportions
of his holdings to be represented by each proxy.
Notwithstanding
the foregoing, a registered shareholder entitled to attend and vote at a meeting of the company held pursuant to an order of court under
Section 210(1) of the Singapore Companies Act, or at any adjourned meeting under Section 210(3) of the Singapore Companies Act, is, unless
the court orders otherwise, entitled to appoint only one proxy to attend and vote at the same meeting, and except where the aforementioned
applies, a registered shareholder of a company having a share capital who is a relevant intermediary (as defined under the Singapore
Companies Act) may appoint more than two proxies in relation to a meeting to exercise all or any of the shareholder’s rights to
attend and to speak and vote at the meeting, but each proxy must be appointed to exercise the rights attached to a different share or
shares held by the shareholder (which number and class of shares shall be specified), and at such meeting, the proxy has the right to
vote on a show of hands.
Shares
in a public company may confer special, limited or conditional voting rights or not confer voting rights. In this regard, different classes
of shares in a public company may be issued only if the issue of the class or classes of shares is provided for in the constitution of
the public company and the constitution of the public company sets out in respect of each class of shares the rights attached to that
class of shares. A public company shall not undertake any issuance of shares that confer special, limited or conditional voting rights
or that confer no voting rights unless it is approved by shareholders by special resolution.
Voting
Rights
As
provided under our constitution and subject to the Singapore Companies Act, voting at any meeting of shareholders is by show of hands
unless a poll has been demanded prior to or on the declaration of the result of the show of hands by, among others, (i) the chairman
or (ii) at least three shareholders present in person or by proxy. On a poll every holder of ordinary shares who is present in person
or by proxy or by attorney, or other duly authorized representative, has one vote for every ordinary share held by such shareholder.
Proxies need not be shareholders.
Subject
to the Singapore Companies Act and our constitution, only those shareholders who are registered in our register of members will be entitled
to vote at any meeting of shareholders. Therefore, since the shares offered in this offering are expected to be held through DTC or its
nominee, DTC or its nominee will grant an omnibus proxy to DTC participants holding our shares in book-entry form. A person holding through
a broker, bank, nominee, or other institution that is a direct or indirect participant in DTC will have the right to instruct his or
her broker, bank, nominee or other institution holding these shares on how to vote such shares by completing the voting instruction form
provided by the applicable broker, bank, nominee, or other institution. Whether voting is by a show of hands or by a poll, the vote of
DTC or its nominee will be voted by the chairman of the meeting according to the results of the DTC’s participants’ votes
(which results will reflect the instructions received from persons that own our shares electronically in book-entry form through DTC).
Minority
Rights
The
rights of minority shareholders of Singapore companies are protected, among other things, under Section 216 of the Singapore Companies
Act, which gives the Singapore courts a general power to make any order, upon application by any shareholder of a company, as they think
fit to remedy any of the following situations:
Ø
the affairs of a company are being conducted or the powers of the board of directors are being exercised
in a manner oppressive to, or in disregard of the interests of, one or more of the shareholders, including the applicant; or
Ø
a company takes an action, or threatens to take an action, or the shareholders pass a resolution, or propose to pass a resolution, which
unfairly discriminates against, or is otherwise prejudicial to, one or more of the shareholders, including the applicant.
Singapore
courts have a wide discretion as to the remedies they may grant, and the remedies listed in the Singapore Companies Act itself are not
exclusive. In general, the Singapore courts may:
Ø
direct or prohibit any act or cancel or modify any transaction or resolution;
Ø
regulate the conduct of the affairs of the company in the future;
Ø
authorize civil proceedings to be brought in the name of, or on behalf of, the company by a person or persons
and on such terms as the court may direct;
Ø
provide for the purchase of a minority shareholder’s shares by the other shareholders or by the company;
Ø
in the case of a purchase of shares by the company provide for a reduction accordingly of the company’s
capital; or
Ø
provide that the company be wound up.
In
addition, Section 216A of the Singapore Companies Act allows a complainant (including a minority shareholder) to apply to the Singapore
courts for leave to bring an action in a court proceeding or arbitration to which a company is a party or intervene in an action in a
court proceeding or arbitration to which a company is a party for the purchase of prosecuting, defending or discontinuing the action
or arbitration on behalf of a company.
Dividends
We
may, by ordinary resolution, declare dividends at a general meeting of shareholders, but we are restricted from paying dividends in excess
of the amount recommended by our board of directors. Pursuant to Singapore law and our constitution, no dividend may be paid except out
of our profits. To date, we have not declared any cash dividends on our ordinary shares and have no current plans to pay cash dividends
in the foreseeable future.
Bonus
and Rights Issues
In
a general meeting, our shareholders may, upon the recommendation of the directors, resolve that it is desirable to capitalize any reserves
or profits and distribute them as shares, credited as paid-up, to the shareholders in proportion to their shareholdings.
Subject
to the provisions of the Singapore Companies Act and our constitution, our directors may also issue rights to take up additional ordinary
shares to our shareholders in proportion to their respective ownership. Such rights are subject to any condition attached to such issue
and the regulations of any stock exchange on which our shares are listed, as well as U.S. federal and blue-sky securities laws applicable
to such issue.
Take-overs
The
Singapore Take-over Code regulates, among other things, the acquisition of voting shares of Singapore-incorporated public companies.
In this regard, the Singapore Take-over Code applies to, among others, corporations with a primary listing of their equity securities
in Singapore. While the Singapore Take-over Code is drafted with, among others, listed public companies in mind, unlisted public companies
with more than 50 shareholders and net tangible assets of S$5 million or more must also observe the letter and spirit of the general
principles and rules of the Singapore Take-over Code, wherever this is possible and appropriate. Public companies with a primary listing
overseas may apply to SIC to waive the application of the Singapore Take-over Code. As at the date of this prospectus, no application
has been made to SIC to waive the application of the Singapore Take-over Code in relation to us. We may submit an application to SIC
for a waiver from the Singapore Take-over Code so that the Singapore Take-over Code will not apply to us for so long as we are not listed
on a securities exchange in Singapore. We will make an appropriate announcement if we submit the application and when the result of the
application is known.
Any
person acquiring an interest, whether by a series of transactions over a period of time or not, either on his or her own or together
with parties acting in concert with such person, in 30% or more of the voting rights in the Company, or any person holding, either on
his or her own or together with parties acting in concert with such person, between 30% and 50% (both amounts inclusive) of the voting
rights in the Company, and if such person (or parties acting in concert with such person) acquires additional voting shares representing
more than 1% of the voting rights in the Company in any six-month period, must, except with the consent of the SIC in Singapore, extend
a mandatory take-over offer for all the remaining voting shares in accordance with the provisions of the Singapore Take-over Code. Responsibility
for ensuring compliance with the Singapore Take-over Code rests with parties (including company directors) to a take-over or merger and
their advisors.
Under
the Singapore Take-over Code, “parties acting in concert” comprise individuals or companies who, pursuant to an agreement
or understanding (whether formal or informal), cooperate, through the acquisition by any of them of shares in a company, to obtain or
consolidate effective control of that company. Certain persons are presumed (unless the presumption is rebutted) to be acting in concert
with each other. They are as follows:
Ø
A company, its parent company, subsidiaries and fellow subsidiaries (together, the related companies),
the associated companies of any of the company and its related companies, companies whose associated companies include any of these foregoing
companies and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing
for the purchase of voting rights;
Ø
A company with any of its directors (together with their close relatives, related trusts and companies
controlled by any of the directors, their close relatives and related trusts);
Ø
A company with any of its pension funds and employee share schemes;
Ø
A person with any investment company, unit trust or other fund whose investment such person manages on
a discretionary basis, but only in respect of the investment account which such person manages;
Ø
A financial or other professional adviser, including a stockbroker, with its client in respect of the shareholdings
of the adviser and persons controlling, controlled by or under the same control as the adviser;
Ø
Directors of a company (together with their close relatives, related trusts and companies controlled by
any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe
a bona fide offer for their company may be imminent;
Ø
Partners; and
An
individual and (i) such individual’s close relatives, (ii) such individual’s related trusts, (iii) any person who is accustomed
to act in accordance with such individual’s instructions, (iv) companies controlled by any of the individual, such individual’s
close relatives, related trusts or any person who is accustomed to act in accordance with such individual’s instructions and (v)
any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing for the
purchase of voting rights.
Subject
to certain exceptions, a mandatory offer must be in cash or be accompanied by a cash alternative at not less than the highest price paid
by the offeror or parties acting in concert with the offeror during the offer period and within the six months prior to its commencement.
Under
the Singapore Take-over Code, where effective control of a company is acquired or consolidated by a person, or persons acting in concert,
a general offer to all other shareholders is normally required. An offeror must treat all shareholders of the same class in an offeree
company equally. A fundamental requirement is that shareholders in the company subject to the take-over offer must be given sufficient
information, advice and time to enable them to reach an informed decision on the offer. These legal requirements may impede or delay
a take-over of our Company by a third party.
Liquidation
or Other Return of Capital
On
a winding-up or other return of capital, subject to any special rights attaching to any other classes of shares, holders of ordinary
shares will be entitled to participate in any surplus assets in proportion to their shareholdings.
Limitations
of Liability and Indemnification Matters
Under
Section 172 of the Singapore Companies Act, any provision exempting or indemnifying the officers of a company (including directors) against
any liability that would otherwise attach to them in connection with any negligence, default, breach of duty or breach of trust in relation
to the company is void. However, a company is not prohibited from (a) purchasing and maintaining for any such individual insurance against
liability incurred by him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company,
or (b) indemnifying the individual against liability incurred by him or her to a person other than the company except when the indemnity
is against any liability (i) of the individual to pay a fine in criminal proceedings, (ii) of the individual to pay a penalty to a regulatory
authority in respect of non-compliance with any requirements of a regulatory nature (howsoever arising), (iii) incurred by the individual
in defending criminal proceedings in which he or she is convicted, (iv) incurred by the individual in defending civil proceedings brought
by the company or a related company in which judgment is given against him or her, or (v) incurred by the individual in connection with
an application for relief under Section 76A(13) or Section 391 of the Singapore Companies Act in which the court refuses to grant him
or her relief.
Under
our constitution, it is provided that every director shall be indemnified out of the assets of our Company to the extent permitted by
the Singapore Companies Act.
We
have entered into deeds of indemnity with each of our directors and officers. These agreements will require us to indemnify these individuals
to the fullest extent permitted under our constitution and the Singapore Companies Act against liabilities that may arise by reason of
their service to us as a director or officer of the Company (as the case may be), and to advance expenses incurred in connection with
any proceeding against them by reason of their status as a director, officer, agent or employee of the Company in accordance with the
terms of the deeds. These indemnification rights shall not be exclusive of any other right which an indemnified person may have or thereafter
acquire under any applicable law, provision of our constitution, agreement, vote of shareholders or disinterested directors or otherwise.
We
expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss arising from claims
made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such
directors and officers.
COMPARISON
OF SHAREHOLDER RIGHTS
We
are incorporated under the laws of Singapore. The following discussion summarizes material differences between the rights of holders
of our ordinary shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the state
of Delaware which result from differences in governing documents and the laws of Singapore and Delaware.
This
discussion does not purport to be a complete or comprehensive statement of the rights of holders of our ordinary shares under applicable
law in Singapore and our constitution or the rights of holders of the common stock of a typical corporation under applicable Delaware
law and a typical certificate of incorporation and bylaws.
| Delaware
|
|
Singapore
|
| |
|
|
| Board
of Directors |
| |
| A
typical certificate of incorporation and bylaws provides that the number of directors on the board of directors will be fixed from
time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into
classes and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate
of incorporation. |
|
The
constitution of companies will typically state the minimum and maximum (if any) number of directors as well as provide that the number
of directors may be increased or reduced by shareholders via ordinary resolution passed at a general meeting, provided that the number
of directors following such increase or reduction is within the maximum (if any) and minimum number of directors provided in the
constitution and the Singapore Companies Act, respectively. |
| |
|
|
| Limitation
on Personal Liability of Directors |
| |
| A
typical certificate of incorporation provides for the elimination of personal monetary liability of directors for breach of fiduciary
duties as directors to the fullest extent permissible under the laws of Delaware, except for liability (i) for any breach of a director’s
loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (relating to the liability of directors
for unlawful payment of a dividend or an unlawful stock purchase or redemption) or (iv) for any transaction from which the director
derived an improper personal benefit. A typical certificate of incorporation also provides that if the Delaware General Corporation
Law is amended so as to allow further elimination of, or limitations on, director liability, then the liability of directors will
be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law as so amended. |
|
Pursuant
to the Singapore Companies Act, any provision (whether in the constitution, a contract with
the company or otherwise) exempting or indemnifying a director against any liability which
would otherwise attach to him or her in connection with any negligence, default, breach of
duty or breach of trust in relation to the company is void. However, a company is not prohibited
from (a) purchasing and maintaining for such director insurance against any such liability,
or (b) indemnifying such director against any liability incurred by him or her to a person
other than the company except when the indemnity is against any liability (i) of the director
to pay a fine in criminal proceedings, (ii) of the director to pay a penalty to a regulatory
authority in respect of non-compliance with any requirements of a regulatory nature (howsoever
arising), (iii) incurred by the director in defending criminal proceedings in which he or
she is convicted, (iv) incurred by the director in defending civil proceedings brought by
the company or a related company in which judgment is given against him or her, or (v) incurred
by the director in connection with an application for relief under Section 76A(13) or Section
391 of the Singapore Companies Act in which the court refuses to grant him or her relief.
Under
our constitution, it is provided that every director shall be indemnified out of the assets of our Company to the extent permitted
by the Singapore Companies Act. |
| Delaware
|
|
Singapore
|
| |
|
|
| Interested
Shareholders |
| |
Section
203 of the Delaware General Corporation Law generally prohibits a Delaware corporation from
engaging in specified corporate transactions (such as mergers, stock and asset sales, and
loans) with an “interested stockholder” for three years following the time that
the stockholder becomes an interested stockholder. Subject to specified exceptions, an “interested
stockholder” is a person or group that owns 15% or more of the corporation’s
outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant,
agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights,
and stock with respect to which the person has voting rights only), or is an affiliate or
associate of the corporation and was the owner of 15% or more of the voting stock at any
time within the previous three years.
A
Delaware corporation may elect to “opt out” of, and not be governed by, Section 203 through a provision in either its
original certificate of incorporation, or an amendment to its original certificate or bylaws that was approved by majority stockholder
vote. With a limited exception, this amendment would not become effective until 12 months following its adoption. |
|
There
are no comparable provisions under the Singapore Companies Act with respect to public companies which are not listed on the Singapore
Exchange Securities Trading Limited. |
| Removal
of Directors |
| |
| A
typical certificate of incorporation and bylaws provide that, subject to the rights of holders of any preferred stock, directors
may be removed at any time by the affirmative vote of the holders of at least a majority, or in some instances a supermajority, of
the voting power of all of the then outstanding shares entitled to vote generally in the election of directors, voting together as
a single class. A certificate of incorporation could also provide that such a right is only exercisable when a director is being
removed for cause (removal of a director only for cause is the default rule in the case of a classified board). |
|
Under
the Singapore Companies Act, directors of a public company may be removed before expiration of their term of office, notwithstanding
anything in its constitution or in any agreement between the public company and such directors, by ordinary resolution (i.e., a resolution
which is passed by a simple majority of those shareholders present and voting in person or by proxy). Notice of the intention to
move such a resolution has to be given to the company not less than 28 days before the meeting at which it is moved. The company
shall then give notice of such resolution to its shareholders not less than 14 days before the meeting. Where any director removed
in this manner was appointed to represent the interests of any particular class of shareholders or debenture holders, the resolution
to remove such director will not take effect until such director’s successor has been appointed. |
| Delaware
|
|
Singapore
|
| |
|
|
| Filling
Vacancies on the Board of Directors |
| |
| A
typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy,
whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any
other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute
less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full
term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director
has been elected expires. |
|
The
constitution of a Singapore company typically provides that the directors have the power to appoint any person to be a director,
either to fill a casual vacancy or as an addition to the existing directors, but so that the total number of directors shall not
at any time exceed the maximum number (if any) fixed by or in accordance with the constitution. Our constitution provides that the
directors may appoint any person to be a director either to fill a casual vacancy or as an additional director but so that the total
number of Directors shall not at any time exceed the maximum number fixed in accordance with the constitution. Our constitution also
provides that any director so appointed shall hold office only until the next retirement of directors under our constitution. |
| Amendment
of Governing Documents |
| |
| Under
the Delaware General Corporation Law, amendments to a corporation’s certificate of incorporation require the approval of stockholders
holding a majority of the outstanding shares entitled to vote on the amendment. If a class vote on the amendment is required by the
Delaware General Corporation Law, a majority of the outstanding stock of the class is required, unless a greater proportion is specified
in the certificate of incorporation or by other provisions of the Delaware General Corporation Law. Under the Delaware General Corporation
Law, the board of directors may amend bylaws if so authorized in the charter. The stockholders of a Delaware corporation also have
the power to amend bylaws. |
|
Our
constitution may be altered by special resolution (i.e., a resolution passed by at least
a three-fourths majority of the shareholders entitled to vote, present in person or by proxy
at a meeting for which not less than 21 days’ written notice is given). The board of
directors has no power to amend the constitution.
Under
the Singapore Companies Act, an entrenching provision may be included in the constitution with which a company is formed and may
at any time be inserted into the constitution of a company only if all the shareholders of the company agree. An entrenching provision
is a provision of the constitution of a company to the effect that other specified provisions of the constitution may not be altered
in the manner provided by the Singapore Companies Act or may not be so altered except (i) by a resolution passed by a specified majority
greater than 75% (the minimum majority required by the Singapore Companies Act for a special resolution) or (ii) where other specified
conditions are met. The Singapore Companies Act provides that such entrenching provision may be removed or altered only if all the
members of the company agree. |
| Delaware
|
|
Singapore
|
| |
|
|
| Meetings
of Shareholders |
| |
Annual
and Special Meetings
Typical
bylaws provide that annual meetings of stockholders are to be held on a date and at a time fixed by the board of directors. Under
the Delaware General Corporation Law, a special meeting of stockholders may be called by the board of directors or by any other person
authorized to do so in the certificate of incorporation or the bylaws. |
|
Annual
General Meetings
Subject
to the Singapore Companies Act, all companies are required to hold an annual general meeting after the end of each financial year
within either 4 months (in the case of a public company that is listed on an exchange in Singapore approved by the Monetary Authority
of Singapore) or 6 months (in the case of any other company). |
| |
|
|
| |
|
Extraordinary
General Meetings
Any
general meeting other than the annual general meeting is called an “extraordinary general meeting.” Notwithstanding anything
in the constitution, directors of a company are required to convene an extraordinary general meeting if required to do so by requisition
(i.e. written notice to the directors requiring that a meeting be called) by shareholder(s) holding not less than 10% of the total
number of paid-up shares as at the date of the deposit of the requisition carrying the right of voting at general meetings of the
company. In addition, the constitution usually also provides that general meetings may be convened in accordance with the Singapore
Companies Act by the directors. |
| |
|
|
| Quorum
Requirements |
|
Quorum
Requirements |
| |
|
|
| Under
the Delaware General Corporation Law, a corporation’s certificate of incorporation or bylaws can specify the number of shares
which constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than
one-third of the shares entitled to vote at a meeting. |
|
Our
constitution provides that the quorum at any general meeting shall be any two shareholders present in person or by proxy or, in the
case of a corporation, by a representative and entitled to vote thereat]. In the event a quorum is not present within half an hour
from the time appointed for the meeting, the meeting, if convened upon the requisition of members, shall be dissolved. In any other
case, the meeting shall be adjourned for one week, or to such other day and at such other time and place as the directors may determine.
|
| |
|
|
| |
|
Shareholders’
Rights at Meetings
Only
registered shareholders of our company reflected in our register of members are recognized under Singapore law as shareholders of
our company. As a result, only registered shareholders have legal standing under Singapore law to institute shareholder actions against
us or otherwise seek to enforce their rights as shareholders.
The
Singapore Companies Act provides that every member shall, notwithstanding any provision in the constitution, have a right to attend
any general meeting of the company and to speak on any resolution before the meeting. The holder of a share may vote on a resolution
before a general meeting of the company if the share confers on the holder a right to vote on that resolution. The company’s
constitution may provide that a member shall not be entitled to vote unless all calls or other sums personally payable by him in
respect of shares in the company have been paid. |
| Delaware
|
|
Singapore
|
| |
|
|
| |
|
Shares
in a public company may confer special, limited or conditional voting rights or not confer
voting rights. In this regard, different classes of shares in a public company may be issued
only if the issue of the class or classes of shares is provided for in the constitution of
the public company and the constitution of the public company sets out in respect of each
class of shares the rights attached to that class of shares. A public company shall not undertake
any issuance of shares that confer special, limited or conditional voting rights or that
confer no voting rights unless it is approved by shareholders by special resolution.
Circulation
of Shareholders’ Resolutions
Under
the Singapore Companies Act, a company shall on the requisition of (a) any number of shareholders representing not less than 5% of
the total voting rights of all the shareholders having at the date of requisition a right to vote at a meeting to which the requisition
relates or (b) not less than 100 shareholders holding shares on which there has been paid up an average sum, per shareholder, of
not less than S$500, and unless the company otherwise resolves, at the expense of the requisitionists, (i) give to shareholders entitled
to receive notice of the next annual general meeting notice of any resolution which may properly be moved and is intended to be moved
at that meeting, and (ii) circulate to shareholders entitled to receive notice of any general meeting any statement of not more than
1,000 words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting. |
| |
|
|
| Indemnification
of Officers, Directors and Employees |
| |
| Under
the Delaware General Corporation Law, subject to specified limitations in the case of derivative suits brought by a corporation’s
stockholders in its name, a corporation may indemnify any person who is made a party to any third-party action, suit or proceeding
on account of being a director, officer, employee or agent of the corporation (or was serving at the request of the corporation in
such capacity for another corporation, partnership, joint venture, trust or other enterprise) against expenses, including attorney’s
fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action,
suit or proceeding through, among other things, a majority vote of a quorum consisting of directors who were not parties to the suit
or proceeding, if the person: |
|
Under
Section 172 of the Singapore Companies Act, any provision exempting or indemnifying the officers
of a company (including directors) against liability, which would otherwise attach to them
in connection with any negligence, default, breach of duty or breach of trust in relation
to the company is void.
However,
the Singapore Companies Act allows a company to:
Ø
purchase and maintain for any officer insurance against any liability which would otherwise attach to such officer in connection
with any negligence, default, breach of duty or breach of trust in relation to the company; and |
| Delaware
|
|
Singapore
|
| |
|
|
Øacted
in good faith and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation or, in some circumstances, at least not opposed to its
best interests; and
Ø
in a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Delaware
corporate law permits indemnification by a corporation under similar circumstances for expenses (including attorneys’ fees)
actually and reasonably incurred by such persons in connection with the defense or settlement of a derivative action or suit, except
that no indemnification may be made in respect of any claim, issue or matter as to which the person is adjudged to be liable to the
corporation unless the Delaware Court of Chancery or the court in which the action or suit was brought determines upon application
that the person is fairly and reasonably entitled to indemnity for the expenses which the court deems to be proper.
To
the extent a director, officer, employee or agent is successful in the defense of such an action, suit or proceeding, the corporation
is required by Delaware corporate law to indemnify such person for reasonable expenses incurred thereby. Expenses (including attorneys’
fees) incurred by such persons in defending any action, suit or proceeding may be paid in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of that person to repay the amount if it is ultimately
determined that that person is not entitled to be so indemnified. |
|
Øindemnify
such officer against any liability incurred by him or her to a person other than the company
except when the indemnity is against any liability (i) of the officer to pay a fine in criminal
proceedings, (ii) of the officer to pay a penalty to a regulatory authority in respect of
non-compliance with any requirements of a regulatory nature (howsoever arising), (iii) incurred
by the officer in defending criminal proceedings in which he or she is convicted, (iv) incurred
by the officer in defending civil proceedings brought by the company or a related company
in which judgment is given against him or her, or (v) incurred by the officer in connection
with an application for relief under Section 76A(13) or Section 391 of the Singapore Companies
Act in which the court refuses to grant him or her relief.
In
cases where a director is sued by the company, the Singapore Companies Act gives the court the power to relieve directors either
wholly or partially from their liability for their negligence, default, breach of duty or breach of trust. In order for relief to
be obtained, it must be shown that (i) the director acted reasonably and honestly; and (ii) it is fair, having regard to all the
circumstances of the case including those connected with such director’s appointment, to excuse the director. However, Singapore
case law has indicated that such relief will not be granted to a director who has benefited as a result of his or her breach of trust.
Under
our constitution, it is provided that every director shall be indemnified out of the assets of our Company to the extent permitted
by the Singapore Companies Act. |
| Delaware
|
|
Singapore
|
| |
|
|
| Shareholder
Approval of Issuances of Shares |
| |
| Under
Delaware law, the board of directors has the authority to issue, from time to time, capital stock in its sole discretion, as long
the number the shares to be issued, together with those shares that are already issued and outstanding and those shares reserved
to be issued, do not exceed the authorized capital for the corporation as previously approved by the stockholders and set forth in
the corporation’s certificate of incorporation. Under the foregoing circumstances, no additional stockholder approval is required
for the issuance of capital stock. Under Delaware law, stockholder approval is required (i) for any amendment to the corporation’s
certificate of incorporation to increase the authorized capital and (ii) for the issuance of stock in a direct merger transaction
where the number of shares exceeds 20% of the corporation’s shares outstanding prior to the transaction, regardless of whether
there is sufficient authorized capital. |
|
Section
161 of the Singapore Companies Act provides that notwithstanding anything in the company’s constitution, the directors shall
not exercise any power to issue shares without prior approval of the company’s shareholders in a general meeting. Such authorization
may be obtained by ordinary resolution. Once this shareholders’ approval is obtained, unless previously revoked or varied by
the company in a general meeting, it continues in force until the conclusion of the next annual general meeting or the expiration
of the period within which the next annual general meeting after that date is required by law to be held, whichever is earlier; but
any approval may be revoked or varied by the company in a general meeting. Notwithstanding this general authorization to allot and
issue our ordinary shares, the Company will be required to seek shareholder approval with respect to future issuances of ordinary
shares, where required under the NYSE American rules, such as if we were to propose an issuance of ordinary shares that would result
in a change in control of the Company or in connection with a transaction involving the issuance of ordinary shares representing
20% or more of our outstanding ordinary shares. |
| Shareholder
Approval of Business Combinations |
| |
Generally,
under the Delaware General Corporation Law, completion of a merger, consolidation, or the
sale, lease or exchange of substantially all of a corporation’s assets or dissolution
requires approval by the board of directors and by a majority (unless the certificate of
incorporation requires a higher percentage) of outstanding stock of the corporation entitled
to vote.
The
Delaware General Corporation Law also requires a special vote of stockholders in connection with a business combination with an “interested
stockholder” as defined in section 203 of the Delaware General Corporation Law. See “— Interested Shareholders”
above. |
|
The
Singapore Companies Act mandates that specified corporate actions require approval by the
shareholders in a general meeting, notably:
Ø
notwithstanding anything in the company’s constitution, directors are not permitted to carry into effect any proposals for
disposing of the whole or substantially the whole of the company’s undertaking or property unless those proposals have been
approved by shareholders in a general meeting;
Ø
subject to the constitution of each amalgamating company, an amalgamation proposal must be approved by the shareholders of each amalgamating
company via special resolution at a general meeting; and
Ø
notwithstanding anything in the company’s constitution, the directors may not, without the prior approval of shareholders,
issue shares, including shares being issued in connection with corporate actions. |
| |
|
|
| Shareholder
Action Without A Meeting |
| |
| Under
the Delaware General Corporation Law, unless otherwise provided in a corporation’s certificate of incorporation, any action
that may be taken at a meeting of stockholders may be taken without a meeting, without prior notice and without a vote if the holders
of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize such action, consent
in writing. It is not uncommon for a corporation’s certificate of incorporation to prohibit such action. |
|
There
are no equivalent provisions under the Singapore Companies Act in respect of public companies which are listed on a securities exchange
outside Singapore, like our Company. |
| Delaware
|
|
Singapore
|
| |
|
|
| Shareholder
Suits |
| |
| Under
the Delaware General Corporation Law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights
of the corporation. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated
stockholders where the requirements for maintaining a class action under the Delaware General Corporation Law have been met. A person
may institute and maintain such a suit only if such person was a stockholder at the time of the transaction which is the subject
of the suit or his or her shares thereafter devolved upon him or her by operation of law. |
|
Standing
Only
registered shareholders of our company reflected in our register of members are recognized under Singapore law as shareholders of
our company. As a result, only registered shareholders have legal standing under Singapore law to institute shareholder actions against
us or otherwise seek to enforce their rights as shareholders. Holders of book-entry interests in our shares will be required to exchange
their book-entry interests for certificated shares and to be registered as shareholders in our register of members in order to institute
or enforce any legal proceedings or claims against us relating to shareholder rights. A holder of book-entry interests may become
a registered shareholder of our company by exchanging its interest in our shares for certificated shares and being registered in
our register of members. |
| |
|
|
| Additionally,
under Delaware case law, the plaintiff generally must be a stockholder not only at the time of the transaction which is the subject
of the suit, but also through the duration of the derivative suit. The Delaware General Corporation Law also requires that the derivative
plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the
derivative plaintiff, unless such demand would be futile. |
|
Personal
remedies in cases of oppression or injustice
A
shareholder may apply to the court for an order under Section 216 of the Singapore Companies Act to remedy situations where (i) the
company’s affairs are being conducted or the powers of the company’s directors are being exercised in a manner oppressive
to, or in disregard of the interests of, one or more of the shareholders or holders of debentures of the company, including the applicant;
or (ii) the company has done an act, or threatens to do an act, or the shareholders or holders of debentures have proposed or passed
some resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more of the company’s shareholders
or holders of debentures, including the applicant.
Singapore
courts have wide discretion as to the relief they may grant under such application, including, inter alia, directing or prohibiting
any act or cancelling or varying any transaction or resolution, providing that the company be wound up, or authorizing civil proceedings
to be brought in the name of or on behalf of the company by such person or persons and on such terms as the court directs. |
| |
|
|
| |
|
Derivative
actions and arbitrations
The
Singapore Companies Act has a provision which provides a mechanism enabling shareholders to apply to the court for leave to bring
a derivative action or commence an arbitration on behalf of the company.
Applications
are generally made by shareholders of the company, but courts are given the discretion to allow such persons as they deem proper
to apply (e.g., beneficial owner of shares).
It
should be noted that this provision of the Singapore Companies Act is primarily used by minority shareholders to bring an action
or arbitration in the name and on behalf of the company or intervene in an action or arbitration to which the company is a party
for the purpose of prosecuting, defending or discontinuing the action or arbitration on behalf of the company. Prior to commencing
a derivative action or arbitration, the court must be satisfied that (i) 14 days’ notice has been given to the directors of
the company of the party’s intention to make such an application if the directors of the company do not bring, diligently prosecute
or defend or discontinue the action or arbitration, (ii) the party is acting in good faith and (iii) it appears to be prima facie
in the interests of the company that the action or arbitration be brought, prosecuted, defended or discontinued. |
| |
|
|
| |
|
Class
actions
The
concept of class action suits in the United States, which allows individual shareholders to bring an action seeking to represent
the class or classes of shareholders, does not exist in the same manner in Singapore. In Singapore, it is possible as a matter of
procedure for a number of shareholders to lead an action and establish liability on behalf of themselves and other shareholders who
join in or who are made parties to the action. These shareholders are commonly known as “lead plaintiffs”. |
| Delaware
|
|
Singapore
|
| |
|
|
| Distributions
and Dividends; Repurchases and Redemptions |
| |
| The
Delaware General Corporation Law permits a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus,
out of net profits for the fiscal year in which the dividend is declared and/or for the preceding fiscal year as long as the amount
of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the
capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets. |
|
The
Singapore Companies Act provides that no dividends can be paid to shareholders except out
of profits. The Singapore Companies Act does not provide a definition on when profits are
deemed to be available for the purpose of paying dividends and this is accordingly governed
by case law.
Our
constitution provides that no dividend can be paid otherwise than out of profits. |
| |
|
|
| Under
the Delaware General Corporation Law, any corporation may purchase or redeem its own shares, except that generally it may not purchase
or redeem these shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption.
A corporation may, however, purchase or redeem out of capital shares that are entitled upon any distribution of its assets to a preference
over another class or series of its shares if the shares are to be retired and the capital reduced. |
|
Acquisition
of a company’s own shares
The
Singapore Companies Act generally prohibits a company from acquiring its own shares or purporting to acquire the shares of its holding
company or ultimate holding company, whether directly or indirectly, in any way, subject to certain exceptions. Any contract or transaction
made or entered into in contravention of the aforementioned prohibition by which a company acquires or purports to acquire its own
shares or shares in its holding company or ultimate holding company is void. However, provided that it is expressly permitted to
do so by its constitution (as the case may be) and subject to the special conditions of each permitted acquisition contained in the
Singapore Companies Act, a company may:
Ø
redeem redeemable preference shares on such terms and in such manner as is provided by its constitution.
Preference shares may be redeemed out of capital only if all the directors make a solvency statement in relation to such redemption
in accordance with the Singapore Companies Act, and the company lodges a copy of the statement with the Registrar of Companies;
Ø
whether listed on an exchange in Singapore approved by the Monetary Authority of Singapore or any securities
exchange outside Singapore, or not, make an off-market purchase of its own shares in accordance with an equal access scheme authorized
in advance at a general meeting;
Ø
make a selective off-market purchase of its own shares in accordance with an agreement authorized in
advance at a general meeting by a special resolution where persons whose shares are to be acquired and their associated persons have
abstained from voting;
Ø
whether listed on an exchange in Singapore approved by the Monetary Authority of Singapore or any securities
exchange outside Singapore, or not, make an acquisition of its own shares under a contingent purchase contract which has been authorized
in advance at a general meeting by a special resolution; and
Ø
where listed on a securities exchange, make an acquisition of its own shares on the securities exchange,
in accordance with the terms and limits authorized in advance at a general meeting. |
| |
|
|
| |
|
A
company may also purchase its own shares by an order of a Singapore court. |
| Delaware
|
|
Singapore
|
| |
|
|
| |
|
Ø
The total number of ordinary shares, stocks in any class and non-redeemable preference shares that
may be acquired by a company in a relevant period may not exceed 20% (or such other prescribed percentage) of the total number of
ordinary shares, stocks in that class or non-redeemable preference shares (as the case may be) as of the date of the resolution passed
to authorize the acquisition of the shares. Where, however, a company has reduced its share capital by a special resolution or a
Singapore court has made an order confirming the reduction of share capital of the company, the total number of ordinary shares,
stocks in any class or non-redeemable preference shares shall be taken to be the total number of ordinary shares, stocks in any class
or non-redeemable preference shares (as the case may be) as altered by the special resolution or the order of the court. Payment,
including any expenses (including brokerage or commission) incurred directly in the acquisition by the company of its own shares,
may be made out of the company’s profits or capital, provided that the company is solvent. |
| |
|
|
| |
|
Financial
assistance for the acquisition of shares
A
public company or a company whose holding company or ultimate holding company is a public company shall not give financial assistance
to any person whether directly or indirectly for the purpose of or in connection with:
Ø
the acquisition or proposed acquisition of shares in the company or units of such shares; or
Ø
the acquisition or proposed acquisition of shares in its holding company or ultimate holding company,
or units of such shares.
Financial
assistance may take the form of a loan, the giving of a guarantee, the provision of security, the release of an obligation, the release
of a debt or otherwise.
However,
it should be noted that a company may provide financial assistance for the acquisition of its shares or shares in its holding company
or ultimate holding company if it complies with the requirements (including approval by special resolution) set out in the Singapore
Companies Act.
Our
constitution provides that subject to and in accordance with the provisions of the Singapore Companies Act, we may purchase or otherwise
acquire our own shares on such terms and in such manner as we may think fit. Any share that is so purchased or acquired by us shall,
unless held in treasury in accordance with the Singapore Companies Act, be deemed to be cancelled immediately on purchase or acquisition.
On the cancellation of a share as aforesaid, the rights and privileges attached to that share shall expire. |
| Delaware
|
|
Singapore
|
| |
|
|
| Transactions
with Officers or Directors |
| |
| Under
the Delaware General Corporation Law, some contracts or transactions in which one or more of a corporation’s directors has
an interest are not void or voidable because of such interest provided that some conditions, such as obtaining the required approval
and fulfilling the requirements of good faith and full disclosure, are met. Under the Delaware General Corporation Law, either (a)
the stockholders or the board of directors of a corporation must approve in good faith any such contract or transaction after full
disclosure of the material facts or (b) the contract or transaction must have been “fair” as to the corporation at the
time it was approved. If board approval is sought, the contract or transaction must be approved in good faith by a majority of disinterested
directors after full disclosure of material facts, even though less than a majority of a quorum. |
|
Under
the Singapore Companies Act, directors and the chief executive officer of the company are not prohibited from dealing with the company,
but where they have an interest, whether directly or indirectly, in a transaction with the company, that interest must be disclosed
to the board of directors. In particular, every director or chief executive officer who is in any way, whether directly or indirectly,
interested in a transaction or proposed transaction with the company must, as soon as is practicable after the relevant facts have
come to such director’s or, as the case may be, the chief executive officer’s knowledge, declare the nature of such interest
at a meeting of the directors or send a written notice to the company detailing the nature, character and extent of the interest.
|
| |
|
|
| |
|
In
addition, a director or chief executive officer who holds any office or possesses any property
whereby, whether directly or indirectly, any duty or interest might be created in conflict
with such director’s or, as the case may be, the chief executive officer’s duties
as director or chief executive officer (as the case may be) is required to declare the fact
and the nature, character and extent of the conflict at a meeting of directors or send a
written notice to the company detailing the fact and the nature, character and extent of
the conflict.
The
Singapore Companies Act extends the scope of this statutory duty of a director and chief executive officer to disclose any interests
by pronouncing that an interest of a member of a director’s or, as the case may be, the chief executive officer’s family
(including spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter) will be treated as an interest of the
director or chief executive officer (as the case may be). |
| Delaware
|
|
Singapore
|
| |
|
There
is, however, no requirement for disclosure where the interest of the director or chief executive
officer (as the case may be) consists only of being a member or creditor of a corporation
which is interested in the transaction or proposed transaction with the company if the interest
may properly be regarded as immaterial. Where the transaction or the proposed transaction
relates to any loan to the company, no disclosure need be made where the director or chief
executive officer (as the case may be) has only guaranteed or joined in guaranteeing the
repayment of such loan, unless the constitution provides otherwise.
Further,
where the transaction or the proposed transaction has been or will be made with or for the benefit of a related corporation (i.e.,
the holding company, subsidiary or subsidiary of a common holding company), the director or chief executive officer shall not be
deemed to be interested or at any time interested in such transaction or proposed transaction where he is a director or chief executive
officer (as the case may be) of the related corporation, unless the constitution provides otherwise.
Subject
to specified exceptions, the Singapore Companies Act prohibits a company (other than an exempt private company) from, among others,
(i) making a loan or a quasi-loan to its directors or to directors of a related corporation, or giving a guarantee or security in
connection with such a loan or quasi-loan, (ii) entering into a credit transaction as creditor for the benefit of its directors or
the directors of a related corporation, or giving a guarantee or any security in connection with such a credit transaction, (iii)
arranging an assignment to or assumption by the company of any rights, obligations or liabilities under a transaction which, if it
had been entered into by the company, would have been a restricted transaction, and (iv) taking part in an arrangement under which
another person enters into a transaction which, if entered into by the company, would have been a restricted transaction and such
person obtains a benefit from the company or its related corporation pursuant thereto. Companies are also prohibited from entering
into any of these transactions with the spouse or children (whether adopted or natural or step-children) of its directors. |
| Delaware
|
|
Singapore
|
| |
|
|
| |
|
Subject
to specified exceptions, the Singapore Companies Act prohibits a company (other than an exempt
private company) from, among others, making a loan or a quasi-loan to another company or
a limited liability partnership or entering into any guarantee or providing any security
in connection with a loan or a quasi-loan made to another company or a limited liability
partnership by a person other than the first-mentioned company, entering into a credit transaction
as a creditor for the benefit of another company or a limited liability partnership, or entering
into any guarantee or providing any security in connection with a credit transaction entered
into by any person for the benefit of another company or a limited liability partnership
if a director or directors of the first-mentioned company is or together are interested in
20% or more of the total voting power in the other company or the limited liability partnership
(as the case may be).
Such
prohibition shall extend to apply to, among others, a loan or quasi-loan made by a company (other than an exempt private company)
to another company or a limited liability partnership, a credit transaction made by a company (other than an exempt private company)
for the benefit of another company or limited liability partnership and a guarantee or security provided by a company (other than
an exempt private company) in connection with a loan or quasi-loan made by a person other than the first-mentioned company to another
company or a limited liability partnership, where such other company or limited liability partnership is incorporated or formed (as
the case may be) outside Singapore, if a director or directors of the first-mentioned company (a) is or together are interested in
20% or more of the total voting power in the other company or limited liability partnership or (b) in a case where the other company
does not have a share capital, exercises or together exercise control over the other company whether by reason of having the power
to appoint directors or otherwise.
The
Singapore Companies Act also provides that an interest of a member of a director’s family (including spouse, son, adopted son,
step-son, daughter, adopted daughter and step-daughter) will be treated as an interest of the director. |
| |
|
|
| Dissenters’
Rights |
| |
| Under
the Delaware General Corporation Law, a stockholder of a corporation participating in some types of major corporate transactions
may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount
of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction.
|
|
There
are no equivalent provisions in Singapore under the Singapore Companies Act. |
DESCRIPTION
OF EXISTING WARRANTS
Series
2024-A Warrants
The
following description of the Series 2024-A warrants is a summary, is not complete and is subject to, and qualified in its entirety by,
the provisions of the Series 2024-A warrants, the form of which is to be filed as an exhibit to the registration statement of which this
prospectus forms a part, by amendment. It summarizes only those aspects of the Series 2024-A warrants that we believe will be most important
to your decision to invest in the Series 2024-A warrants. You should keep in mind, however, that it is the terms in the Series 2024-A
warrants, and not this summary, which define your rights as a holder of the Series 2024-A warrants. There may be other provisions in
the Series 2024-A warrants that are also important to you. You should read the form of the Series 2024-A warrants for a full description
of the terms of the Series 2024-A warrants.
Duration
and Exercise Price
Each
full Series 2024-A warrant entitles the holder thereof to purchase one share of our ordinary shares at an exercise price equal to $3.50
per share (effecting for 1-for-10 reverse split). The Series 2024-A warrants will be exercisable during the period commencing
on the date of issuance and will expire on the five year anniversary of the date of issuance. The Series 2024-A warrants will be
issued in certificated form.
Exercisability
The
Series 2024-A warrants may be exercised by delivering to the Company a duly-executed notice of election to exercise the Series 2024-A
warrant and delivering to the Company cash payment of the exercise price. Upon delivery of the written notice of election to exercise
the Series 2024-A warrant and cash payment of the exercise price, on and subject to the terms and conditions of the Series 2024-A warrants,
we will deliver or cause to be delivered to such holder, the number of whole shares of ordinary shares to which the holder is entitled,
which shares shall be delivered in book-entry form. If a Series 2024-A warrant is exercised for fewer than all of the shares of ordinary
shares for which such Series 2024-A warrant may be exercised, then upon request of the holder and surrender of such Series 2024-A warrant,
we shall issue a new Series 2024-A warrant exercisable for the remaining number of shares of ordinary shares.
A
holder (together with its affiliates) may not exercise any portion of the Series 2024-A warrants to the extent that the holder (together
with its affiliates) would beneficially own more than 4.99% (or, at the election of the holder prior to the date of issuance, 9.99%)
of our outstanding ordinary shares after exercise. The holder may increase or decrease this beneficial ownership limitation to any other
percentage not in excess of 9.99%, upon notice to us, provided that, in the case of an increase of such beneficial ownership limitation,
such notice shall not be effective until 61 days following notice to us.
Cashless
Exercise
If,
and only if, a registration statement relating to the issuance of the shares underlying the Series 2024-A warrants is not then effective
or the prospectus therein is not available for use, a holder of Series 2024-A warrants may exercise the Series 2024-A warrants on a cashless
basis, where the holder receives the net value of the Series 2024-A warrants in shares of ordinary shares pursuant to the formula set
forth in the Series 2024-A warrants. However, if an effective registration statement and the prospectus is available for the issuance
of the shares underlying the Series 2024-A warrants, a holder may only exercise the Series 2024-A warrants through a cash exercise. Shares
issued pursuant to a cashless exercise would be issued pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”), and the shares of ordinary shares issued upon such cashless exercise would take on the registered characteristics of the
Series 2024-A warrants being exercised.
Failure
to Timely Deliver Shares of Ordinary shares
If
we fail to timely deliver shares of ordinary shares pursuant to any exercise of the Series 2024-A warrants, and such exercising holder
elects or is required to purchase shares of ordinary shares (in an open market transaction or otherwise) to deliver in satisfaction of
a sale by such holder of all or a portion of the shares of ordinary shares for which such Series 2024-A warrant was exercised, then we
will be required to deliver an amount in cash by which holder’s purchase price, including commissions, exceeds the number of shares
of ordinary shares to be delivered multiplied by the price at which the sell order was executed and, at option of holder, reinstate the
portion of warrant for the exercise that was not honored or deliver the number of shares of ordinary shares.
Fundamental
Transaction
If,
at any time while the Series 2024-A warrants are outstanding, we directly or indirectly, in one or more related transactions, enter into
a fundamental transaction, which includes any merger with or into another entity, sale of all or substantially all of our assets, tender
offer or exchange offer, or reclassification of our ordinary shares as further described in the Series 2024-A warrants, then each holder
shall become entitled to receive the same amount and kind of securities, cash or property as such holder would have been entitled to
receive upon the occurrence of such fundamental transaction if the holder had been, immediately prior to such fundamental transaction,
the holder of the number of shares of ordinary shares then issuable upon exercise of such holder’s Series 2024-A warrants. Any
successor to us, surviving entity or the corporation purchasing or otherwise acquiring such assets shall assume the obligation to deliver
to the holder such alternate consideration, and the other obligations, under the Series 2024-A warrants. In addition, upon a fundamental
transaction, the holder will have the right to require us to repurchase its Series 2024-A warrant at its fair value using the Black Scholes
option pricing formula in the Series 2024-A warrants; provided, however, that, if the fundamental transaction is not within our control,
including not approved by our board of directors, then the holder shall only be entitled to receive the same type or form of consideration
(and in the same proportion), at the Black Scholes value of the unexercised portion of the warrant, that is being offered and paid to
the holders of our ordinary shares in connection with the fundamental transaction.
Certain
Adjustments
The
exercise price and the number of shares purchasable upon exercise of the Series 2024-A warrants are subject to adjustment upon certain
reclassifications, stock dividends and stock splits. Subject to NYSE rules and regulations, we have the right at any time during the
term of the Series 2024-A warrants to reduce the then-existing exercise price, with respect to all or any portion of any outstanding
Series 2024-A warrants to any amount and for any period of time deemed appropriate by our board of directors.
Pro
Rata Distributions
If,
at any time while the Series 2024-A warrants are outstanding, we declare or make any dividend or other distribution of our assets to
holders of shares of our ordinary shares, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property, or options, by way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) or we grant, issue or sell any options, convertible securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of ordinary shares (in each case, “Series 2024-A
Distributed Property”), then each holder of a Series 2024-A warrant shall receive, with respect to the shares of ordinary shares
issuable upon exercise of such Series 2024-A warrant, the Series 2024-A Distributed Property that such holder would have been entitled
to receive had the holder been the record holder of such number of shares of ordinary shares issuable upon exercise of the warrant immediately
prior to the record date for such Series 2024-A Distributed Property.
Authorized
and Unreserved Shares of Ordinary shares
So
long as any of the Series 2024-A warrants remain outstanding, we are required to maintain a number of authorized and unreserved shares
of ordinary shares equal to the number of shares of ordinary shares issuable upon the exercise of all of the Series 2024-A warrants then
outstanding.
Fractional
Shares
No
fractional shares will be issued upon exercise of the Series 2024-A warrants, but we will pay a cash adjustment or round up to the next
whole share in connection with any fractional share.
Rights
as a Stockholder
Except
as set forth in the Series 2024-A warrants, the Series 2024-A warrants do not confer upon holders any voting or other rights as stockholders
of the Company.
Trading
Market
There
is no established public trading market available for the Series 2024-A warrants on any national securities exchange or other nationally
recognized trading system. In addition, we do not intend to apply to list the Series 2024-A warrants on any national securities exchange
or other nationally recognized trading system, including the NYSE American.
Series
2024-C Warrants
The
following description of the Series 2024-C warrants is a summary, is not complete and is subject to, and qualified in its entirety by,
the provisions of the Series 2024-C warrants, the form of which is to be filed as an exhibit to the registration statement of which this
prospectus forms a part, by amendment. It summarizes only those aspects of the Series 2024-C warrants that we believe will be most important
to your decision to invest in the Series 2024-C warrants. You should keep in mind, however, that it is the terms in the Series 2024-C
warrants, and not this summary, which define your rights as a holder of the Series 2024-C warrants. There may be other provisions in
the Series 2024-C warrants that are also important to you. You should read the form of the Series 2024-C warrants for a full description
of the terms of the Series 2024-C warrants.
Duration
and Exercise Price
Each
full Series 2024-C warrant entitles the holder thereof to purchase one share of our ordinary shares at an exercise price equal to $3.50
per share (effecting for 1-for-10 reverse split). The Series 2024-C warrants will be exercisable during the period commencing
on the date of issuance and will expire on the 18-month anniversary of the date of issuance. The Series 2024-C warrants will be issued
in certificated form.
Exercisability
The
Series 2024-C warrants may be exercised by delivering to the Company a duly-executed notice of election to exercise the Series 2024-C
warrant and delivering to the Company cash payment of the exercise price. Upon delivery of the written notice of election to exercise
the Series 2024-C warrant and cash payment of the exercise price, on and subject to the terms and conditions of the Series 2024-C warrants,
we will deliver or cause to be delivered to such holder, the number of whole shares of ordinary shares to which the holder is entitled,
which shares shall be delivered in book-entry form. If a Series 2024-C warrant is exercised for fewer than all of the shares of ordinary
shares for which such Series 2024-C warrant may be exercised, then upon request of the holder and surrender of such Series 2024-C warrant,
we shall issue a new Series 2024-C warrant exercisable for the remaining number of shares of ordinary shares.
A
holder (together with its affiliates) may not exercise any portion of the Series 2024-C warrants to the extent that the holder (together
with its affiliates) would beneficially own more than 4.99% (or, at the election of the holder prior to the date of issuance, 9.99%)
of our outstanding ordinary shares after exercise. The holder may increase or decrease this beneficial ownership limitation to any other
percentage not in excess of 9.99%, upon notice to us, provided that, in the case of an increase of such beneficial ownership limitation,
such notice shall not be effective until 61 days following notice to us.
Cashless
Exercise
If,
and only if, a registration statement relating to the issuance of the shares underlying the Series 2024-C warrants is not then effective
or the prospectus therein is not available for use, a holder of Series 2024-C warrants may exercise the Series 2024-C warrants on a cashless
basis, where the holder receives the net value of the Series 2024-C warrants in shares of ordinary shares pursuant to the formula set
forth in the Series 2024-C warrants. However, if an effective registration statement and the prospectus is available for the issuance
of the shares underlying the Series 2024-C warrants, a holder may only exercise the Series 2024-C warrants through a cash exercise. Shares
issued pursuant to a cashless exercise would be issued pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”), and the shares of ordinary shares issued upon such cashless exercise would take on the registered characteristics of the
Series 2024-C warrants being exercised.
Failure
to Timely Deliver Shares of Ordinary shares
If
we fail to timely deliver shares of ordinary shares pursuant to any exercise of the Series 2024-C warrants, and such exercising holder
elects or is required to purchase shares of ordinary shares (in an open market transaction or otherwise) to deliver in satisfaction of
a sale by such holder of all or a portion of the shares of ordinary shares for which such Series 2024-C warrant was exercised, then we
will be required to deliver an amount in cash by which holder’s purchase price, including commissions, exceeds the number of shares
of ordinary shares to be delivered multiplied by the price at which the sell order was executed and, at option of holder, reinstate the
portion of warrant for the exercise that was not honored or deliver the number of shares of ordinary shares.
Fundamental
Transaction
If,
at any time while the Series 2024-C warrants are outstanding, we directly or indirectly, in one or more related transactions, enter into
a fundamental transaction, which includes any merger with or into another entity, sale of all or substantially all of our assets, tender
offer or exchange offer, or reclassification of our ordinary shares as further described in the Series 2024-C warrants, then each holder
shall become entitled to receive the same amount and kind of securities, cash or property as such holder would have been entitled to
receive upon the occurrence of such fundamental transaction if the holder had been, immediately prior to such fundamental transaction,
the holder of the number of shares of ordinary shares then issuable upon exercise of such holder’s Series 2024-C warrants. Any
successor to us, surviving entity or the corporation purchasing or otherwise acquiring such assets shall assume the obligation to deliver
to the holder such alternate consideration, and the other obligations, under the Series 2024-C warrants. In addition, upon a fundamental
transaction, the holder will have the right to require us to repurchase its Series 2024-C warrant at its fair value using the Black Scholes
option pricing formula in the Series 2024-C warrants; provided, however, that, if the fundamental transaction is not within our control,
including not approved by our board of directors, then the holder shall only be entitled to receive the same type or form of consideration
(and in the same proportion), at the Black Scholes value of the unexercised portion of the warrant, that is being offered and paid to
the holders of our ordinary shares in connection with the fundamental transaction.
Certain
Adjustments
The
exercise price and the number of shares purchasable upon exercise of the Series 2024-C warrants are subject to adjustment upon certain
reclassifications, stock dividends and stock splits. Subject to NYSE rules and regulations, we have the right at any time during the
term of the Series 2024-C warrants to reduce the then-existing exercise price, with respect to all or any portion of any outstanding
Series 2024-C warrants to any amount and for any period of time deemed appropriate by our board of directors.
Pro
Rata Distributions
If,
at any time while the Series 2024-C warrants are outstanding, we declare or make any dividend or other distribution of our assets to
holders of shares of our ordinary shares, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property, or options, by way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) or we grant, issue or sell any options, convertible securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of ordinary shares (in each case, “Series 2024-C
Distributed Property”), then each holder of a Series 2024-C warrant shall receive, with respect to the shares of ordinary shares
issuable upon exercise of such Series 2024-C warrant, the Series 2024-C Distributed Property that such holder would have been entitled
to receive had the holder been the record holder of such number of shares of ordinary shares issuable upon exercise of the warrant immediately
prior to the record date for such Series 2024-C Distributed Property.
Authorized
and Unreserved Shares of Ordinary shares
So
long as any of the Series 2024-C warrants remain outstanding, we are required to maintain a number of authorized and unreserved shares
of ordinary shares equal to the number of shares of ordinary shares issuable upon the exercise of all of the Series 2024-C warrants then
outstanding.
Fractional
Shares
No
fractional shares will be issued upon exercise of the Series 2024-C warrants, but we will pay a cash adjustment or round up to the next
whole share in connection with any fractional share.
Rights
as a Stockholder
Except
as set forth in the Series 2024-C warrants, the Series 2024-C warrants do not confer upon holders any voting or other rights as stockholders
of the Company.
Trading
Market
There
is no established public trading market available for the Series 2024-C warrants on any national securities exchange or other nationally
recognized trading system. In addition, we do not intend to apply to list the Series 2024-C warrants on any national securities exchange
or other nationally recognized trading system, including the NYSE American.
Series
2024-D and -E Warrants
The
following description of the Series 2024-D and -E warrants is a summary, is not complete and is subject to, and qualified in its entirety
by, the provisions of those warrants, the form of which has been filed with the SEC on Form 6-K dated May 20, 2024. It summarizes only
those aspects of the Series 2024-D and-E warrants that we believe will be most important to your decision to invest in the Series 2024-C
warrants.
On
May 18, 2024, the Company entered into agreements for the immediate exercise of certain outstanding Series 2024-C warrants to purchase
up to an aggregate of 1,095,045 of the Company’s ordinary shares originally issued in January 2024, at the current
exercise price of $3.50 per share. The ordinary shares issuable upon exercise of the warrants are registered pursuant to an effective
registration statement on Form F-1 (No. 333-273841). The gross proceeds to the Company from the exercise of the warrants are approximately
$3.8 million, prior to deducting placement agent fees and estimated offering expenses.
In
consideration for the immediate exercise of the warrants for cash, the Company will issue new unregistered Series 2024-D warrants to
purchase up to 1,095,045 ordinary shares and new unregistered Series 2024-E warrants to purchase up to 1,095,045 ordinary
shares (effecting for 1-for-10 reverse split). The new warrants will have an exercise price of $3.50 per share and will
be immediately exercisable upon issuance. The Series 2024-D warrants will have a term of five and one-half years from the issuance date
and the Series 2024-E warrants will have a term of two years from the issuance date. Except as set forth above, the Series 2024-D and
-E warrants have the same terms as the Series 2024-C Warrants.
2024
Ordinary Share Purchase Warrants
The
following description of the 2024 Ordinary Share Purchase warrants is a summary, is not complete and is subject to, and qualified in
its entirety by, the provisions of the 2024 Ordinary Share Purchase warrants, the form of which is filed as an exhibit to the Company’s
Current Report on Form 6-K filed with the SEC on April 29, 2024. It summarizes only those aspects of the 2024 Ordinary Share Purchase
warrants that we believe will be most important to your decision to invest in the 2024 Ordinary Share Purchase warrants. You should keep
in mind, however, that it is the terms in the 2024 Ordinary Share Purchase warrants, and not this summary, which define your rights as
a holder of the 2024 Ordinary Share Purchase warrants. There may be other provisions in the 2024 Ordinary Share Purchase warrants that
are also important to you. You should read the form of the 2024 Ordinary Share Purchase warrants for a full description of the terms
of the 2024 Ordinary Share Purchase warrants.
Duration
and Exercise Price
Each
full 2024 Ordinary Share Purchase warrant entitles the holder thereof to purchase one share of our ordinary shares at an exercise price
equal to $3.50 per share (effecting for 1-for-10 reverse split) (as a result of the May 15, 2024 Waiver). The 2024 Ordinary
Share Purchase warrants will be exercisable during the period commencing on the date of issuance and will expire on the 5 year anniversary
of the date of issuance. The 2024 Ordinary Share Purchase warrants will be issued in certificated form. As a result of the May 2024 warrant
inducement transaction set forth above, the exercise price of the 2024 Ordinary Share Purchase warrants was reduced to $3.50 and
an additional 600,000 (effecting for 1-for-10 reverse split) of these warrants were issued to the holder.
Exercisability
The
2024 Ordinary Share Purchase warrants may be exercised by delivering to the Company a duly-executed notice of election to exercise the
2024 Ordinary Share Purchase warrant and delivering to the Company cash payment of the exercise price. Upon delivery of the written notice
of election to exercise the 2024 Ordinary Share Purchase warrant and cash payment of the exercise price, on and subject to the terms
and conditions of the 2024 Ordinary Share Purchase warrants, we will deliver or cause to be delivered to such holder, the number of whole
shares of ordinary shares to which the holder is entitled, which shares shall be delivered in book-entry form. If a 2024 Ordinary Share
Purchase warrant is exercised for fewer than all of the shares of ordinary shares for which such 2024 Ordinary Share Purchase warrant
may be exercised, then upon request of the holder and surrender of such 2024 Ordinary Share Purchase warrant, we shall issue a new 2024
Ordinary Share Purchase warrant exercisable for the remaining number of shares of ordinary shares.
A
holder (together with its affiliates) may not exercise any portion of the 2024 Ordinary Share Purchase warrants to the extent that the
holder (together with its affiliates) would beneficially own more than 4.99% (or, at the election of the holder prior to the date of
issuance, 9.99%) of our outstanding ordinary shares after exercise. The holder may increase or decrease this beneficial ownership limitation
to any other percentage not in excess of 9.99%, upon notice to us, provided that, in the case of an increase of such beneficial ownership
limitation, such notice shall not be effective until 61 days following notice to us.
Cashless
Exercise
If,
and only if, a registration statement relating to the issuance of the shares underlying the 2024 Ordinary Share Purchase warrants is
not then effective or the prospectus therein is not available for use, a holder of 2024 Ordinary Share Purchase warrants may exercise
the 2024 Ordinary Share Purchase warrants on a cashless basis, where the holder receives the net value of the 2024 Ordinary Share Purchase
warrants in shares of ordinary shares pursuant to the formula set forth in the 2024 Ordinary Share Purchase warrants. However, if an
effective registration statement and the prospectus is available for the issuance of the shares underlying the 2024 Ordinary Share Purchase
warrants, a holder may only exercise the 2024 Ordinary Share Purchase warrants through a cash exercise. Shares issued pursuant to a cashless
exercise would be issued pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), and
the shares of ordinary shares issued upon such cashless exercise would take on the registered characteristics of the 2024 Ordinary Share
Purchase warrants being exercised.
Failure
to Timely Deliver Shares of Ordinary shares
If
we fail to timely deliver shares of ordinary shares pursuant to any exercise of the 2024 Ordinary Share Purchase warrants, and such exercising
holder elects or is required to purchase shares of ordinary shares (in an open market transaction or otherwise) to deliver in satisfaction
of a sale by such holder of all or a portion of the shares of ordinary shares for which such 2024 Ordinary Share Purchase warrant was
exercised, then we will be required to deliver an amount in cash by which holder’s purchase price, including commissions, exceeds
the number of shares of ordinary shares to be delivered multiplied by the price at which the sell order was executed and, at option of
holder, reinstate the portion of warrant for the exercise that was not honored or deliver the number of shares of ordinary shares.
Certain
Adjustments
The
exercise price and the number of shares purchasable upon exercise of the 2024 Ordinary Share Purchase warrants are subject to adjustment
upon certain reclassifications, stock dividends and stock splits. The Warrants are also subject to a most favored nation provision if
the Company issues other ordinary share equivalents with terms which the holders of the Warrants reasonably believe are more favorable
than the terms of these Warrants.
Pro
Rata Distributions
If,
at any time while the 2024 Ordinary Share Purchase warrants are outstanding, we declare or make any dividend or other distribution of
our assets to holders of shares of our ordinary shares, by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property, or options, by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) or we grant, issue or sell any options, convertible securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of ordinary shares (in each case, “2024
Ordinary Share Purchase Distributed Property”), then each holder of a 2024 Ordinary Share Purchase warrant shall receive, with
respect to the shares of ordinary shares issuable upon exercise of such 2024 Ordinary Share Purchase warrant, the 2024 Ordinary Share
Purchase Distributed Property that such holder would have been entitled to receive had the holder been the record holder of such number
of shares of ordinary shares issuable upon exercise of the warrant immediately prior to the record date for such 2024 Ordinary Share
Purchase Distributed Property.
Authorized
and Unreserved Shares of Ordinary shares
So
long as any of the 2024 Ordinary Share Purchase warrants remain outstanding, we are required to maintain a number of authorized and unreserved
shares of ordinary shares equal to the number of shares of ordinary shares issuable upon the exercise of all of the 2024 Ordinary Share
Purchase warrants then outstanding.
Fractional
Shares
No
fractional shares will be issued upon exercise of the 2024 Ordinary Share Purchase warrants, but we will pay a cash adjustment or round
up to the next whole share in connection with any fractional share.
Rights
as a Stockholder
Except
as set forth in the 2024 Ordinary Share Purchase warrants, the 2024 Ordinary Share Purchase warrants do not confer upon holders any voting
or other rights as stockholders of the Company.
Trading
Market
There
is no established public trading market available for the 2024 Ordinary Share Purchase warrants on any national securities exchange or
other nationally recognized trading system. In addition, we do not intend to apply to list the 2024 Ordinary Share Purchase warrants
on any national securities exchange or other nationally recognized trading system, including the NYSE American.
CERTAIN
MATERIAL TAX CONSIDERATIONS
Material
United States Federal Income Tax Considerations
The
following is a discussion of certain material United States federal income tax considerations relating to the acquisition, ownership,
and disposition of our ordinary shares by a U.S. Holder, as defined below, that acquires our ordinary shares in this offering and holds
our ordinary shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue
Code of 1986, as amended (the “Code”). This discussion is based on existing United States federal income tax law, which is
subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue
Service (the “IRS”) with respect to any United States federal income tax consequences described below, and there can be no
assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal
income taxation that may be important to particular investors in light of their individual circumstances, including investors subject
to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment companies, real
estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or other entities
treated as partnerships for United States federal income tax purposes) and their partners, tax-exempt organizations (including private
foundations)), investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) 5% or more of our voting
shares, investors that hold their ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction),
or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly
from those summarized below. In addition, this discussion does not address any tax laws other than the United States federal income tax
laws, including any state, local, alternative minimum tax or non-United States tax considerations, or the Medicare tax on unearned income.
Each potential investor is urged to consult its tax advisor regarding the United States federal, state, local and non-United States income
and other tax considerations of an investment in our ordinary shares.
General
For
purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ordinary shares that is, for United States federal
income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated
as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any
state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal
income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of
a United States court and which has one or more United States persons who have the authority to control all substantial decisions of
the trust or (B) that has otherwise elected to be treated as a United States person under the Code.
If
a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary
shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership.
Partnerships and partners of a partnership holding our ordinary shares are urged to consult their tax advisors regarding an investment
in our ordinary shares.
The
discussion set forth below is addressed only to U.S. Holders that purchase ordinary shares in this offering. Prospective purchasers are
urged to consult their own tax advisors about the application of U.S. federal income tax law to their particular circumstances as well
as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our ordinary shares.
Taxation
of Dividends and Other Distributions on our Ordinary Shares
Subject
to the passive foreign investment company rules discussed below, distributions of cash or other property made by us to you with respect
to the ordinary shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend
income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings
and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not
be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable
to qualified dividend income, provided that (1) the ordinary shares are readily tradable on an established securities market in the United
States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange
of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which
the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. You are urged to consult your
tax advisors regarding the availability of the lower rate for dividends paid with respect to our ordinary shares, including the effects
of any change in law after the date of this prospectus.
To
the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal
income tax principles), it will be treated first as a tax-free return of your tax basis in your ordinary shares, and to the extent the
amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings
and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a
dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described
above.
Taxation
of Dispositions of Ordinary Shares
Subject
to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other
taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis
(in U.S. dollars) in the ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including
an individual U.S. Holder, who has held the ordinary shares for more than one year, you may be eligible for reduced tax rates on any
such capital gains. The deductibility of capital losses is subject to limitations.
Passive
Foreign Investment Company
A
non-U.S. corporation is considered a PFIC for any taxable year if either:
Ø
at least 75% of its gross income for such taxable year is passive income; or
Ø
at least 50% of the value of its assets (based on an average of the quarterly values of the assets during
a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
Passive
income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets
and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise
in this offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be
determined based on the market value of our ordinary shares from time to time, which could cause the value of our non-passive assets
to be less than 50% of the value of all of our assets (including the cash raised in this offering) on any particular quarterly testing
date for purposes of the asset test.
We
must make a separate determination each year as to whether we are a PFIC. Depending on the amount of cash we raise in this offering,
together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any
subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination
following the end of any particular tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities
as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation
of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their
operating results in our combined and consolidated financial statements. In particular, because the value of our assets for purposes
of the asset test will generally be determined based on the market price of our ordinary shares and because cash is generally considered
to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our ordinary
shares and the amount of cash we raise in this offering. Accordingly, fluctuations in the market price of the ordinary shares may cause
us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition
of our income and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. We are under no obligation
to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets
will depend upon material facts (including the market price of our ordinary shares from time to time and the amount of cash we raise
in this offering) that may not be within our control. If we are a PFIC for any year during which you hold ordinary shares, we will continue
to be treated as a PFIC for all succeeding years during which you hold ordinary shares. However, if we cease to be a PFIC and you did
not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse effects of the
PFIC regime by making a “purging election” (as described below) with respect to the ordinary shares.
If
we are a PFIC for your taxable year(s) during which you hold ordinary shares, you will be subject to special tax rules with respect to
any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge)
of the ordinary shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable
year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years
or your holding period for the ordinary shares will be treated as an excess distribution. Under these special tax rules:
Ø
the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;
Ø
the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s)
prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
Ø
the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect
for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable
to each such year.
The
tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by
any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as
capital, even if you hold the ordinary shares as capital assets.
A
U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect
out of the tax treatment discussed above. If you make a mark-to-market election for the first taxable year during which you hold (or
are deemed to hold) ordinary shares and for which we are determined to be a PFIC, you will include in your income each year an amount
equal to the excess, if any, of the fair market value of the ordinary shares as of the close of such taxable year over your adjusted
basis in such ordinary shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss
for the excess, if any, of the adjusted basis of the ordinary shares over their fair market value as of the close of the taxable year.
However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the ordinary shares included in your income
for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other
disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the
actual sale or disposition of the ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market
gains previously included for such ordinary shares. Your basis in the ordinary shares will be adjusted to reflect any such income or
loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs
would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above
under “— Taxation of Dividends and Other Distributions on our ordinary shares” generally would not apply. The mark-to-market
election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities
on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined
in applicable U.S. Treasury regulations). If the ordinary shares are regularly traded on a qualified stock exchange or other market,
and if you are a holder of ordinary shares, the mark-to-market election would be available to you were we to be or become a PFIC.
Alternatively,
a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of
the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally
include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the
taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information
regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide
the information that would enable you to make a qualified electing fund election. If you hold ordinary shares in any taxable year in
which we are a PFIC, you will be required to file IRS Form 8621 in each such year and provide certain annual information regarding such
ordinary shares, including regarding distributions received on the ordinary shares and any gain realized on the disposition of the ordinary
shares.
If
you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period
you hold our ordinary shares, then such ordinary shares will continue to be treated as stock of a PFIC with respect to you even if we
cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging
election” creates a deemed sale of such ordinary shares at their fair market value on the last day of the last year in which we
are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating
the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the
fair market value of the ordinary shares on the last day of the last year in which we are treated as a PFIC) and holding period (which
new holding period will begin the day after such last day) in your ordinary shares for tax purposes.
You
are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and the
elections discussed above.
Information
Reporting and Backup Withholding
Dividend
payments with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject
to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder
who furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 or who is otherwise
exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification
on IRS Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and
backup withholding rules.
Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,
and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions
effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such
brokers or intermediaries may be required by law to withhold such taxes.
Under
the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our ordinary
shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions),
by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which
they hold ordinary shares.
Material
Singapore Tax Considerations
The
following discussion is a summary of material Singapore income tax, Goods and Services Tax, stamp duty and estate duty considerations
relevant to the purchase, ownership and disposition of our ordinary shares by an investor who is not tax resident or domiciled in Singapore
and who does not carry on business or otherwise have a presence in Singapore. The statements made herein regarding taxation are based
on certain aspects of the tax laws of Singapore and administrative guidelines issued by the relevant authorities in force as of the date
hereof and are subject to any changes in such laws or administrative guidelines, or in the interpretation of those laws or guidelines,
occurring after such date, which changes could be made on a retroactive basis. The statements made herein do not describe all of the
tax considerations that may be relevant to all our shareholders, some of which (such as dealers in securities) may be subject to different
rules. The statements are not intended to be and do not constitute legal or tax advice and no assurance can be given that courts or fiscal
authorities responsible for the administration of such laws will agree with the interpretation adopted therein. Each prospective investor
should consult an independent tax advisor regarding all Singapore income and other tax consequences applicable to them from owning or
disposing of our ordinary shares in light of the investor’s particular circumstances.
Income
Taxation Under Singapore Law
Dividend
Distributions with Respect to Ordinary Shares
On
the basis that a company is not tax resident in Singapore for Singapore tax purposes, dividends paid by the company should generally
be considered as sourced outside Singapore. Dividends paid by the company incorporated in Singapore under the one-tier tax exemption
scheme would allow such dividends not to be subjected to a withholding tax at the point of the distribution nor to be taxed in Singapore
upon receipt of such dividends in the hands of the holders of the shares.
Foreign-sourced
dividends received or deemed received in Singapore by an individual not resident in Singapore would be exempt from Singapore income tax.
This exemption will also apply in the case of a Singapore tax resident individual who receives such foreign-sourced income in Singapore
(except where such income is received through a partnership in Singapore).
Foreign-sourced
dividends received or deemed received by corporate investors in Singapore will be liable for Singapore tax. However, if the conditions
for the exemption of specified foreign-sourced income are met, foreign-sourced dividends received by corporate investors resident in
Singapore would be exempt from Singapore tax.
Foreign-sourced
dividends received or deemed received in Singapore on or after June 1, 2003 by a Singapore resident corporate taxpayer is exempt from
tax, provided certain prescribed conditions are met, including the following:
(a)
such income is subject to tax of a similar character to income tax under the law of the jurisdiction from which such income is received;
(b)
at the time the income is received in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called)
levied under the law of the territory from which the income is received on any gains or profits from any trade or business carried on
by any company in that territory at that time is not less than 15%; and
(c)
the Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the person resident in Singapore.
In
the case of dividends paid by a company resident in a territory from which the dividends are received, the “subject to tax condition”
in (a) above is considered met where tax is paid in that territory by such company in respect of its income out of which such dividends
are paid or tax is paid on such dividends in that territory from which such dividends are received. Certain concessions and clarifications
have also been announced by the Inland Revenue Authority of Singapore (“IRAS”) with respect to the above conditions.
Capital
Gains upon Disposition of Ordinary Shares
Under
current Singapore tax law, there is no tax on capital gains. As such, any profits from the disposal of our ordinary shares would not
ordinarily (where such decision to transact would have been made in Singapore) be taxable in Singapore unless the profits are deemed
to be income in nature. However, there are no specific laws or regulations which deal with the characterization of whether a gain is
income or capital in nature. If the decision to transact can be construed as having been made in Singapore and the gains from the disposal
of ordinary shares can be construed to be of an income nature (the IRAS would look at the determining factors such as the motive, the
holding period, the frequency of transactions, the nature of the subject matter, the circumstances of realization, the mode of financing
and other factors to determine the nature of the trade), the disposal profits would be taxable as income rather than capital gains. As
the precise status of each prospective investor will vary from one another, each prospective investor should consult an independent tax
advisor on the Singapore income tax and other tax consequences that will apply to their individual circumstances.
Subject
to certain conditions being satisfied, gains derived by a company from the disposal of our ordinary shares between the period of June
1, 2012 and December 31, 2027 (inclusive of both dates) will not be subject to Singapore income tax, if the divesting company holds a
minimum shareholding of 20% of our ordinary shares and these shares have been held for a continuous minimum period of 24 months. For
disposals during the period from June 1, 2012, and May 31, 2022 (inclusive of both dates), this exemption would not apply to the disposal
of unlisted shares in a company that is in the business of trading or holding immovable properties in Singapore (excluding property development).
For disposals during the period from June 1, 2022, and December 31, 2027 (inclusive of both dates), this exemption would not apply to
the disposal of unlisted shares in a company that is in the business of trading, holding or developing immovable properties in Singapore
or abroad.
In
addition, shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 (“FRS 39”),
Financial Reporting Standard 109 (“FRS 109”) or Singapore Financial Reporting Standard (International) 9 (Financial Instruments)
(“SFRS(I) 9”) (as the case may be), for the purposes of Singapore income tax may be required to recognize gains or losses
(not being gains or losses in the nature of capital) in accordance with the provisions of FRS 39, FRS 109 or SFRS(I) 9 (as modified by
the applicable provisions of Singapore income tax law) even though no sale or disposal of our ordinary shares is made. Singapore corporate
shareholders who may be subject to such tax treatment should consult their own accounting and tax advisors regarding the Singapore income
tax consequences of their acquisition, holding and disposal of our ordinary shares.
Stamp
Duty
There
is no Singapore stamp duty payable in respect of the issuance or holding of our new ordinary shares. Singapore stamp duty will be payable
if there is an instrument of transfer of our ordinary shares executed in Singapore or if there is an instrument of transfer executed
outside of Singapore which is received in Singapore. Under Singapore law, and subject to meeting the qualifying requirements, stamp duty
is not applicable to electronic transfers of our shares effected on a book entry basis outside Singapore. We therefore expect that if
all qualifying conditions are met, no Singapore stamp duty will be payable in respect of ordinary shares purchased by U.S. holders in
this offering assuming that they are acquired solely in book entry form through the facility outside Singapore established by our transfer
agent and registrar outside Singapore.
Where
shares evidenced in certificated form are transferred and an instrument of transfer is executed (whether physically or in the form of
an electronic instrument) in Singapore or outside Singapore and which is received in Singapore, Singapore stamp duty is payable on the
instrument of transfer for the sale of our ordinary shares at the rate of 0.2% of the consideration for, or market value of, the transferred
shares, whichever is higher. The Singapore stamp duty is borne by the purchaser unless there is an agreement to the contrary. Where the
instrument of transfer is executed outside of Singapore and is received in Singapore, Singapore stamp duty must be paid within 30 days
of receipt of the instrument of transfer in Singapore. Electronic instruments that are executed outside Singapore are treated as received
in Singapore in any of the following scenarios: (a) it is retrieved or accessed by a person in Singapore; (b) an electronic copy of it
is stored on a device (including a computer) and brought into Singapore; or (c) an electronic copy of it is stored on a computer in Singapore.
Where the instrument of transfer is executed in Singapore, Singapore stamp duty must be paid within 14 days of the execution of the instrument
of transfer.
Goods
and Services Tax
The
issue or transfer of ownership of our ordinary shares would be exempt from Singapore goods and services tax, or GST. Hence, no GST would
be incurred on the subscription or subsequent transfer of our ordinary shares.
The
sale of our ordinary shares by a GST-registered investor belonging in Singapore for GST purposes to another person belonging in Singapore
is an exempt supply not subject to GST. Any input GST incurred by the GST-registered investor in making the exempt supply is generally
not recoverable from the Singapore Comptroller of GST.
Where
our ordinary shares are sold by a GST-registered investor in the course of or furtherance of a business carried on by such investor contractually
to and for the direct benefit of a person belonging outside Singapore, the sale should generally, subject to satisfaction of certain
conditions, be considered a taxable supply subject to GST at 0%. Subject to the normal rules for input tax claims, any input GST incurred
by the GST-registered investor in making such a supply in the course of or furtherance of a business carried out by such investor may
be fully recoverable from the Singapore Comptroller of GST.
Each
prospective investor should consult an independent tax advisor on the recoverability of input GST incurred on expenses in connection
with the purchase and sale of our ordinary shares if applicable.
Services
consisting of arranging, brokering, placement agent’s or advising on the issue, allotment or transfer of ownership of our ordinary
shares rendered by a GST-registered person to an investor belonging in Singapore for GST purposes in connection with the investor’s
purchase, sale or holding of our ordinary shares will be subject to GST at the standard rate of 7%. Similar services rendered by a GST-registered
person contractually to and for the direct benefit of an investor belonging outside Singapore should generally, subject to the satisfaction
of certain conditions, be subject to GST at 0%.
With
the implementation of reverse charge from January 1, 2020, the “directly benefit” condition for zero-rating (i.e. GST at
0%) will be amended to allow the zero-rating of a supply of services to the extent that the services directly benefit a person belonging
outside Singapore or a GST-registered person in Singapore. Under the reverse charge regime, a GST-registered partially exempt business
that is not entitled to full input tax claims will be required to account for GST on all services that it procures from overseas suppliers
(except for certain services which are specifically exempt from reverse charge). A non GST-registered person whose total value of imported
services for a 12-month period exceeds S$1 million and is not entitled to full input tax claims even if such person was GST-registered
may become liable for GST registration and be required to account for GST both on its taxable supplies and imported services subject
to reverse charge.
Estate
Duty
Singapore
estate duty has been abolished with effect from February 15, 2008 in relation to the estate of any person whose death has occurred on
or after February 15, 2008.
Tax
Treaties Regarding Withholding Taxes
There
is currently no comprehensive avoidance of double taxation agreement between the United States and Singapore which applies to withholding
taxes on dividends or capital gains.
POTENTIAL
PURCHASERS OF OUR ORDINARY SHARES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S.
INCOME, GIFT, ESTATE OR GENERATION-SKIPPING TRANSFER, AND OTHER TAX AND TAX TREATY CONSIDERATIONS OF PURCHASING, OWNING AND DISPOSING
OF OUR ORDINARY SHARES.
DESCRIPTION
OF DEBT SECURITIES
This
base prospectus describes the general terms and provisions of our debt securities. When we offer to sell a particular series of debt
securities, we will describe the specific terms of the series in a supplement to this base prospectus. We will also indicate in the supplement
whether the general terms and provisions described in this base prospectus apply to a particular series of debt securities. To the extent
the information contained in the prospectus supplement differs from this summary description, you should rely on the information in the
prospectus supplement.
Unless
otherwise specified in a supplement to this base prospectus, the debt securities will be our direct, unsecured obligations and will rank
equally with all of our other unsecured and unsubordinated indebtedness. In the event that any series of debt securities will be subordinated
to other indebtedness that we have outstanding or may incur, the terms of the subordination will be set forth in the prospectus supplement
relating to the subordinated debt securities.
The
debt securities will be issued under an indenture between Genius Group and a trustee named in the prospectus supplement. We have summarized
select portions of the indenture below. The summary is not complete. The form of the indenture has been filed as an exhibit to the registration
statement of which this base prospectus forms a part, and you should read the indenture for provisions that may be important to you.
Capitalized terms used in the summary have the meaning specified in the indenture.
General
The
terms of each series of debt securities will be established by or pursuant to a resolution of our board of directors and set forth or
determined in the manner provided in a resolution of our board of directors, in an officer’s certificate or by a supplemental indenture.
The particular terms of each series of debt securities will be described in a prospectus supplement relating to such series, including
any pricing supplement or term sheet.
We
can issue an unlimited amount of debt securities under the indenture that may be in one or more series with the same or various maturities,
at par, at a premium, or at a discount. We will set forth in a prospectus supplement, including any pricing supplement or term sheet,
relating to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities,
to the extent applicable:
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the
title of the debt securities; |
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the
price or prices (expressed as a percentage of the principal amount) at which we will issue the debt securities; |
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any
limit on the aggregate principal amount of the debt securities; |
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the
date or dates on which we will pay the principal on the debt securities; |
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the
form of the debt securities; |
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the
rate or rates (which may be fixed or variable) per annum or the method used to determine the rate or rates (including any commodity,
commodity index, stock exchange index or financial index) at which the debt securities will bear interest, the date or dates from
which interest will accrue, the date or dates on which interest will commence and be payable and any regular record date for the
interest payable on any interest payment date; |
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the
place or places where principal of and interest on the debt securities will be payable; |
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the
applicability of any guarantees; |
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the
terms and conditions upon which we may redeem the debt securities; |
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whether
and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a United
States person for tax purposes, and whether we can redeem the debt securities if we have to pay such additional amounts; |
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any
obligation we have to redeem or purchase the debt securities pursuant to any sinking fund or analogous provisions or at the option
of a holder of debt securities; |
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the
dates on which and the price or prices at which we will repurchase debt securities at the option of the holders of debt securities
and other detailed terms and provisions of these repurchase obligations; |
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the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof; |
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whether
the debt securities will be issued in the form of certificated debt securities or global debt securities; |
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if
the debt securities of the series will be issued in whole or in part in the form of a global debt security, the terms and conditions,
if any, upon which such global debt security may be exchanged in whole or in part for other individual debt securities in definitive
registered form, the depositary (as defined in the applicable prospectus supplement) for such global security and the form of any
legend or legends to be borne by any such global security in addition to or in lieu of the legend referred to in the indenture; |
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the
principal amount due at maturity, and whether the debt securities will be issued with original issue discount; |
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the portion of principal
amount of the debt securities payable upon declaration of acceleration of the maturity date, if other than the principal amount; |
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the currency of denomination
of the debt securities; |
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the designation of the
currency, currencies or currency units in which payment of principal of and interest on the debt securities will be made; |
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if payments of principal
of or interest on the debt securities will be made in one or more currencies or currency units other than that or those in which
the debt securities are denominated, the manner in which the exchange rate with respect to these payments will be determined; |
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the manner in which the
amounts of payment of principal of or interest on the debt securities will be determined, if these amounts may be determined by reference
to an index based on a currency or currencies other than that in which the debt securities are denominated or designated to be payable
or by reference to a commodity, commodity index, stock exchange index or financial index; |
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any provisions relating
to any security provided for the debt securities; |
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the terms of the subordination
of any series of the debt securities; |
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restrictions on transfer,
sale or other assignment of the debt securities, if any; |
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if the principal amount
payable at the stated maturity of debt securities of the series will not be determinable as of any one or more dates prior to such
stated maturity, the amount that will be deemed to be such principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any maturity other than the stated maturity or which will be deemed to be outstanding
as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined), and if necessary,
the manner of determining the equivalent thereof in U.S. dollars; |
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the right, if any, to extend
the interest payment periods or defer the payment of interest and maximum length of any such deferral period; |
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with regard to the debt
securities that do not bear interest, the dates for certain required reports to the trustee; |
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any provisions granting
special rights to holders when a specified event occurs; |
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any addition to or change
in the provisions relating to or dealing with defeasance; |
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any addition to or change
in the events of default described in this prospectus or in the indenture with respect to the debt securities and any change in the
acceleration provisions described in this prospectus or in the indenture with respect to the debt securities; |
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any addition to or change
in the covenants described in this prospectus or in the indenture with respect to the debt securities; |
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any other terms of the
debt securities, which may supplement, modify or delete any provision of the indenture as it applies to that series; and |
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In
addition, the indenture does not limit our ability to issue convertible or subordinated debt securities. Any conversion or subordination
provisions of a particular series of debt securities will be set forth in the resolution of our board of directors, the officer’s
certificate or supplemental indenture related to that series of debt securities and will be described in the relevant prospectus supplement.
Such terms may include provisions for conversion, either mandatory, at the option of the holder or at our option, in which case the number
of shares of common stock or other securities to be received by the holders of debt securities would be calculated as of a time and in
the manner stated in the prospectus supplement.
We
may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of
acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the federal income tax
considerations and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.
If
we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units,
or if the principal of and interest on any series of debt securities is payable in a foreign currency or currencies or a foreign currency
unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific terms and other
information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in
the applicable prospectus supplement.
Transfer
and Exchange
Each
debt security will be represented by either one or more global securities registered in the name of The Depository Trust Company, as
depositary, or a nominee (we will refer to any debt security represented by a global debt security as a book-entry debt security), or
a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a certificated
debt security) as set forth in the applicable prospectus supplement. Except as set forth under the heading “—Global Debt
Securities and Book-Entry System” below, book-entry debt securities will not be issuable in certificated form.
Certificated
Debt Securities. You may transfer or exchange certificated debt securities at any office we maintain for this purpose in accordance
with the terms of the indenture. No service charge will be made for any transfer or exchange of certificated debt securities, but we
may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange.
You
may effect the transfer of certificated debt securities and the right to receive the principal of and interest on, certificated debt
securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the trustee
of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global
Debt Securities and Book-Entry System. Each global debt security representing book-entry debt securities will be deposited with,
or on behalf of, the depositary, and registered in the name of the depositary or a nominee of the depositary.
We
will require the depositary to agree to follow the following procedures with respect to book-entry debt securities.
Ownership
of beneficial interests in book-entry debt securities will be limited to persons who have accounts with the depositary for the related
global debt security, which we refer to as participants, or persons who may hold interests through participants. Upon the issuance of
a global debt security, the depositary will credit, on its book-entry registration and transfer system, the participants’ accounts
with the respective principal amounts of the book-entry debt securities represented by such global debt security beneficially owned by
such participants. The accounts to be credited will be designated by any dealers, underwriters or agents participating in the distribution
of the book-entry debt securities. Ownership of book-entry debt securities will be shown on, and the transfer of such ownership interests
will be effected only through, records maintained by the depositary for the related global debt security (with respect to interests of
participants) and on the records of participants (with respect to interests of persons holding through participants). The laws of some
states may require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may
impair the ability to own, transfer or pledge beneficial interests in book-entry debt securities.
So
long as the depositary for a global debt security, or its nominee, is the registered owner of that global debt security, the depositary
or its nominee, as the case may be, will be considered the sole owner or holder of the book-entry debt securities represented by such
global debt security for all purposes under the indenture. Except as described below, beneficial owners of book-entry debt securities
will not be entitled to have securities registered in their names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing securities and will not be considered the owners or holders of those securities under the
indenture. Accordingly, each person beneficially owning book-entry debt securities must rely on the procedures of the depositary for
the related global debt security and, if such person is not a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the indenture.
We
understand, however, that under existing industry practice, the depositary will authorize the persons on whose behalf it holds a global
debt security to exercise certain rights of holders of debt securities, and the indenture provides that we, the trustee and our respective
agents will treat as the holder of a debt security the persons specified in a written statement of the depositary with respect to that
global debt security for purposes of obtaining any consents or directions required to be given by holders of the debt securities pursuant
to the indenture.
We
will make payments of principal of, and premium and interest on, book-entry debt securities to the depositary or its nominee, as the
case may be, as the registered holder of the related global debt security. Genius Group, the trustee and any other agent of ours or agent
of the trustee will not have any responsibility or liability for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a global debt security or for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We
expect that the depositary, upon receipt of any payment of principal of, and premium or interest on, a global debt security, will immediately
credit participants’ accounts with payments in amounts proportionate to the respective amounts of book-entry debt securities held
by each participant as shown on the records of such depositary. We also expect that payments by participants to owners of beneficial
interests in book-entry debt securities held through those participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of customers in bearer form or registered in “street name,”
and will be the responsibility of those participants.
We
will issue certificated debt securities in exchange for each global debt security if the depositary is at any time unwilling or unable
to continue as depositary or ceases to be a clearing agency registered under the Exchange Act and a successor depositary registered as
a clearing agency under the Exchange Act is not appointed by us within 90 days. In addition, we may at any time and in our sole discretion
determine not to have the book-entry debt securities of any series represented by one or more global debt securities and, in that event,
will issue certificated debt securities in exchange for the global debt securities of that series. Global debt securities will also be
exchangeable by the holders for certificated debt securities if an event of default with respect to the book-entry debt securities represented
by those global debt securities has occurred and is continuing. Any certificated debt securities issued in exchange for a global debt
security will be registered in such name or names as the depositary shall instruct the trustee. We expect that such instructions will
be based upon directions received by the depositary from participants with respect to ownership of book-entry debt securities relating
to such global debt security.
We
have obtained the foregoing information concerning the depositary and the depositary’s book-entry system from sources we believe
to be reliable, but we take no responsibility for the accuracy of this information.
No
Protection in the Event of a Change of Control
Unless
we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions that may afford holders
of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction (whether
or not such transaction results in a change in control) that could adversely affect holders of debt securities.
Covenants
We
will set forth in the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities.
Subordination
Debt
securities of a series may be subordinated, which we refer to as subordinated debt securities, to senior indebtedness (as defined in
the applicable prospectus supplement) to the extent set forth in the prospectus supplement relating thereto. To the extent we conduct
operations through subsidiaries, the holders of debt securities (whether or not subordinated debt securities) will be structurally subordinated
to the creditors of our subsidiaries.
Consolidation,
Merger or Sale of Assets
We
may not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to,
any person, which we refer to as a successor person, unless:
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we
are the surviving corporation or the successor person (if other than our Company) is a corporation organized and validly existing
under the laws of any U.S. domestic jurisdiction and expressly assumes our obligations on the debt securities and under the indenture; |
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immediately
after giving effect to the transaction, no event of default, and no event which, after notice or lapse of time, or both, would become
an event of default, shall have occurred and be continuing under the indenture; and |
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Notwithstanding
the above, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties to us.
Events
of Default
Event
of default means, with respect to any series of debt securities, any of the following:
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default
in the payment of any interest upon any debt security of that series when it becomes due and payable, and continuance of that default
for a period of 30 days (unless the entire amount of the payment is deposited by us with the trustee or with a paying agent prior
to the expiration of the 30-day period); |
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default
in the payment of principal of any debt security of that series when due and payable; |
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default
in the performance or breach of any other covenant or warranty by us in the indenture or any debt security (other than a covenant
or warranty that has been included in the indenture solely for the benefit of a series of debt securities other than that series),
which default continues uncured for a period of 60 days after we receive written notice from the trustee or we and the trustee receive
written notice from the holders of not less than 25% in principal amount of the outstanding debt securities of that series as provided
in the indenture; |
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certain
events of bankruptcy, insolvency or reorganization of our company; and |
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any
other event of default provided with respect to debt securities of that series that is described in the applicable prospectus supplement
accompanying this prospectus. |
No
event of default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization)
necessarily constitutes an event of default with respect to any other series of debt securities. The occurrence of certain events of
default or an acceleration under the indenture may constitute an event of default under certain of our other indebtedness outstanding
from time to time.
If
an event of default with respect to debt securities of any series outstanding at the time occurs and is continuing, then the trustee
or the holders of not less than 25% in principal amount of the outstanding debt securities of that series may, by a notice in writing
to us (and to the trustee if given by the holders), declare to be due and payable immediately the principal (or, if the debt securities
of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) of, and
accrued and unpaid interest, if any, on all debt securities of that series. In the case of an event of default resulting from certain
events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any,
on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of
the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities
of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders
of a majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all events
of default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. We refer you to the prospectus supplement relating to any series of debt securities
that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount
securities upon the occurrence of an event of default.
The
indenture provides that the trustee will be under no obligation to exercise any of its rights or powers under the indenture, unless the
trustee receives indemnity satisfactory to it against any loss, liability or expense. Subject to certain rights of the trustee, the holders
of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee
with respect to the debt securities of that series.
No
holder of any debt security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the
indenture or for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:
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that
holder has previously given to the trustee written notice of a continuing event of default with respect to debt securities of that
series; and |
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the
holders of not less than 25% in principal amount of the outstanding debt securities of that series have made written request, and
offered reasonable indemnity, to the trustee to institute the proceeding as trustee, and the trustee has not received from the holders
of not less than 25% in principal amount of the outstanding debt securities of that series a direction inconsistent with that request
and has failed to institute the proceeding within 60 days. |
Notwithstanding
the foregoing, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of and
any interest on that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement
of payment.
The
indenture requires us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with
the indenture. The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any default
or event of default (except in payment on any debt securities of that series) with respect to debt securities of that series if it in
good faith determines that withholding notice is in the interest of the holders of those debt securities.
Modification
and Waiver
We
may modify and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding debt
securities of each series affected by the modifications or amendments. We may not make any modification or amendment without the consent
of the holders of each affected debt security then outstanding if that amendment will:
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reduce
the amount of debt securities whose holders must consent to an amendment, supplement or waiver; |
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reduce
the rate of or extend the time for payment of interest (including default interest) on any debt security; |
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reduce
the principal of or change the fixed maturity of any debt security or reduce the amount of, or postpone the date fixed for, the payment
of any sinking fund or analogous obligation with respect to any series of debt securities; |
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reduce
the principal amount of discount securities payable upon acceleration of maturity; |
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waive
a default in the payment of the principal of or interest on any debt security (except a rescission of acceleration of the debt securities
of any series by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities of that
series and a waiver of the payment default that resulted from such acceleration); |
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make
the principal of or interest on any debt security payable in currency other than that stated in the debt security; |
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make
any change to certain provisions of the indenture relating to, among other things, the right of holders of debt securities to receive
payment of the principal of and interest on those debt securities and to institute a suit for the enforcement of any such payment
and to waivers or amendments; or |
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waive
a redemption payment with respect to any debt security. |
Except
for certain specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series
may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture. The holders
of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the debt securities
of such series waive any past default under the indenture with respect to that series and its consequences, except a default in the payment
of the principal of or any interest on, any debt security of that series; provided, however, that the holders of a majority
in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any
related payment default that resulted from the acceleration.
Defeasance
of Debt Securities and Certain Covenants in Certain Circumstances
Legal
Defeasance. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities,
we may be discharged from any and all obligations in respect of the debt securities of any series (except for certain obligations to
register the transfer or exchange of debt securities of such series, to replace stolen, lost or mutilated debt securities of such series,
and to maintain paying agencies and certain provisions relating to the treatment of funds held by paying agents). We will be so discharged
upon the deposit with the trustee, in trust, of money and/or U.S. government obligations or, in the case of debt securities denominated
in a single currency other than U.S. dollars, foreign government obligations (as defined below), that, through the payment of interest
and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm
of independent certified public accountants to pay and discharge each installment of principal and interest on and any mandatory sinking
fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms
of the indenture and those debt securities.
This
discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel stating that we have received
from, or there has been published by, the United States Internal Revenue Service a ruling or, since the date of execution of the indenture,
there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the holders of the debt securities of that series will not recognize income, gain or loss for United
States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit, defeasance and
discharge had not occurred.
Defeasance
of Certain Covenants. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities,
upon compliance with certain conditions:
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we
may omit to comply with the covenant described under the heading “—Consolidation, Merger or Sale of Assets”
and certain other covenants set forth in the indenture, as well as any additional covenants that may be set forth in the applicable
prospectus supplement; and |
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any
omission to comply with those covenants will not constitute a default or an event of default with respect to the debt securities
of that series, or covenant defeasance. |
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The
conditions include: |
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depositing
with the trustee money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other
than U.S. dollars, foreign government obligations, that, through the payment of interest and principal in accordance with their terms,
will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent certified public accountants
to pay and discharge each installment of principal of and interest on and any mandatory sinking fund payments in respect of the debt
securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities;
and |
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delivering
to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income,
gain or loss for United States federal income tax purposes as a result of the deposit and related covenant defeasance and will be
subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the
case if the deposit and related covenant defeasance had not occurred. |
Covenant
Defeasance and Events of Default. In the event we exercise our option to effect covenant defeasance with respect to any series
of debt securities and the debt securities of that series are declared due and payable because of the occurrence of any event of default,
the amount of money and/or U.S. government obligations or foreign government obligations on deposit with the trustee will be sufficient
to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts
due on the debt securities of that series at the time of the acceleration resulting from the event of default. In such a case, we would
remain liable for those payments.
“Foreign
government obligations” means, with respect to debt securities of any series that are denominated in a currency other than U.S.
dollars:
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direct
obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith
and credit is pledged which are not callable or redeemable at the option of the issuer thereof; or |
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obligations
of a person controlled or supervised by or acting as an agency or instrumentality of that government, the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by that government which are not callable or redeemable at the
option of the issuer thereof. |
Regarding
the Trustee
The
indenture provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically
set forth in the indenture. During the existence of an event of default, the trustee will exercise such rights and powers vested in it
under the indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person’s own affairs.
The
indenture and provisions of the Trust Indenture Act of 1939, as amended, that are incorporated by reference therein contain limitations
on the rights of the trustee, should it become one of our creditors, to obtain payment of claims in certain cases or to realize on certain
property received by it in respect of any such claim as security or otherwise. The trustee is permitted to engage in other transactions
with us or any of our affiliates; provided, however, that if it acquires any conflicting interest (as defined in the indentures
or in the Trust Indenture Act of 1939, as amended), it must eliminate such conflict or resign.
Regarding
Payments and Paying Agents
Unless
we state otherwise in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest
payment date to the person in whose name the debt securities are registered at the close of business on the regular record date for the
interest payment.
We
will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agent designated
by us, except that unless we indicate otherwise in the applicable prospectus supplement, we will make interest payments by check that
we will mail to the holder or by wire transfer to certain holders. Unless we indicate otherwise in the applicable prospectus supplement,
we will designate the corporate trust office of the debenture trustee as our sole paying agent for payments with respect to debt securities
of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt
securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All
money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that
remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us,
and the holder of the debt security thereafter may look only to us for payment thereof.
Governing
Law
The
indenture and the debt securities will be governed by, and construed in accordance with, the internal laws of the State of New York.
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include in the applicable prospectus supplements and free-writing
prospectuses we have authorized for use in connection with a specific offering, summarizes the material terms and provisions of the warrants
that we may offer under this prospectus, which may consist of warrants to purchase common stock, preferred stock or debt securities and
may be issued in one or more series.
Warrants
may be issued independently or together with common stock, preferred stock, or debt securities offered by any prospectus supplement,
and may be attached to or separate from those securities. While the terms we have summarized below will apply generally to any warrants
that we may offer under this prospectus, we will describe the particular terms of any series of warrants that we may offer in more detail
in the applicable prospectus supplement and any applicable free writing prospectus we authorize for use in connection with the specific
offering. The terms of any warrants offered under a prospectus supplement may differ from the terms described below.
We
will file as exhibits to the registration statement of which this prospectus is a part, or we will incorporate by reference from reports
that we file with the SEC, the form of warrant agreement, if any, including a form of warrant certificate, that describes the terms of
the particular series of warrants we are offering. The following summaries of material provisions of the warrants and the warrant agreements
are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement and warrant certificate
applicable to the particular series of warrants that we may offer under this prospectus. We urge you to read the applicable prospectus
supplements related to the particular series of warrants that we may offer under this prospectus, as well as any related free-writing
prospectuses we have authorized for use in connection with a specific offering, and the complete warrant agreements and warrant certificates
that contain the terms of the warrants.
General
Matters
We
will describe in the applicable prospectus supplement the terms relating to a series of warrants being offered, including:
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the
title of such securities; |
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the
offering price or prices and aggregate number of warrants offered; |
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the
currency or currencies for which the warrants may be purchased; |
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if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with
each such security or each principal amount of such security; |
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if
applicable, the date on and after which the warrants and the related securities will be separately transferable; |
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if
applicable, the minimum or maximum amount of such warrants which may be exercised at any one time; |
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in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant
and the price at which, and currency in which, this principal amount of debt securities may be purchased upon such exercise; |
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in
the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the
case may be, purchasable upon the exercise of one warrant and the price at which, and the currency in which, these shares may be
purchased upon such exercise; |
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the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants; |
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the
terms of any rights to redeem or call the warrants; |
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the
terms of any rights to force the exercise of the warrants; |
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any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
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the
dates on which the right to exercise the warrants will commence and expire; |
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the
manner in which the warrant agreements and warrants may be modified; |
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a
discussion of any material or special United States federal income tax consequences of holding or exercising the warrants; |
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the
terms of the securities issuable upon exercise of the warrants; and |
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any
other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise,
including:
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in
the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or |
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in
the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any. |
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price
that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable
prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Unless
we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants by delivering the warrant
certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant
agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of the
warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver
to the warrant agent in connection with the exercise of the warrant.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable
upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new
warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for warrants.
Governing
Law
Unless
we provide otherwise in the applicable prospectus supplement, the warrants and warrant agreements, and any claim, controversy or dispute
arising under or related to the warrants or warrant agreements, will be governed by and construed in accordance with the laws of the
State of New York.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or
warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action
its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
Warrant
Agreement Will Not Be Qualified Under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture
Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect
to their warrants.
Calculation
Agent
Calculations
relating to warrants may be made by a calculation agent, an institution that we appoint as our agent for this purpose. The prospectus
supplement for a particular warrant will name the institution that we have appointed to act as the calculation agent for that warrant
as of the original issue date for that warrant. We may appoint a different institution to serve as calculation agent from time to time
after the original issue date without the consent or notification of the holders.
The
calculation agent’s determination of any amount of money payable or securities deliverable with respect to a warrant will be final
and binding in the absence of manifest error.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
General
We
may issue rights to purchase common stock, preferred stock, debt securities, warrants, units and/or any of the other securities described
in this prospectus. We may offer rights separately or together with one or more additional rights, preferred stock, common stock, debt
securities, warrants, units or any combination of those securities in the form of units, as described in the applicable prospectus supplement.
Each series of rights will be issued under a separate rights agreement to be entered into between us and a bank or trust company, as
rights agent. This prospectus and any accompanying prospectus supplement will contain the material terms and conditions for each right.
The accompanying prospectus supplement may add, update or change the terms and conditions of the rights as described in this prospectus.
We
will describe in the applicable prospectus supplement the terms and conditions of the issue of rights being offered, the rights agreement
relating to the rights and the rights certificates representing the rights, including, as applicable:
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the
title of the rights; |
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the
date of determining the stockholders entitled to the rights distribution; |
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the
title, aggregate number or amount of underlying securities purchasable upon exercise of the rights; |
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the
exercise price; |
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the
currencies in which the rights are being offered; |
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the
aggregate number of rights issued; |
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whether
the rights are transferable and the date, if any, on and after which the rights will be separately transferable; |
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the
date on which the right to exercise the rights will commence and the date on which the right to exercise the rights will expire; |
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the
method by which holders of rights will be entitled to exercise; |
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the
conditions to the completion of the offering, if any; |
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the
withdrawal, termination and cancellation rights, if any; |
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whether
there are backstop or standby purchaser or purchases and the terms of their commitment, if any; |
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whether
stockholders are entitled to oversubscription rights, if any; and |
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any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of the
rights, as applicable, including any provisions for modifying any of the terms of the rights. |
Exercise
of Rights
Each
right will entitle the holder of rights to purchase for cash the principal amount of shares of common stock, preferred stock, debt securities,
warrants, units or other securities, as applicable, at the exercise price provided in the applicable prospectus supplement. Rights may
be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement.
After the close of business on the expiration date, all unexercised rights will be void.
Holders
may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly
completed and duly executed at the corporate trust office of the rights or subscription agent or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the shares of common stock, preferred stock, debt securities, warrants, units or
other securities, as applicable, purchasable upon exercise of the rights. If less than all of the rights issued in any rights offering
are exercised, we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters,
brokers or dealers or through a combination of such methods, including pursuant to standby underwriting arrangements, as described in
the applicable prospectus supplement.
The
rights agent for any rights we offer will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF UNITS
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a particular series of units.
The
following description, together with the additional information included in the applicable prospectus supplement, summarizes the general
features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free-writing prospectus
we authorize for use in connection with a specific offering of units, as well as the complete unit agreements that contain the terms
of the units. Specific unit agreements will contain additional important terms and provisions, and we will file as an exhibit to the
registration statement of which this prospectus is a part, or we will incorporate by reference from another report that we file with
the SEC, the form of each unit agreement relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without
limitation, the following, as applicable:
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the
title of the series of units; |
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identification
and description of the separate constituent securities comprising the units; |
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the
price or prices at which the units will be issued; |
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the
date, if any, on and after which the constituent securities comprising the units will be separately transferable; |
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a
discussion of certain U.S. federal income tax considerations applicable to the units; and |
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any
other terms of the units and their constituent securities. |
LEGAL
OWNERSHIP OF SECURITIES
We
can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail
below. We refer to those persons who have securities registered in their own names on the books that we or any applicable trustee or
depositary maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the securities.
We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered in their own
names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders, and investors
in securities issued in book-entry form or in street name will be indirect holders.
Book-Entry
Holders
We
may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be
represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf
of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which
are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only
the person in whose name a security is registered is recognized as the holder of that security. Global securities will be registered
in the name of the depositary or its participants. Consequently, for global securities, we will recognize only the depositary as the
holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments
it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary
and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so
under the terms of the securities.
As
a result, investors in a global security will not own securities directly. Instead, they will own beneficial interests in a global security,
through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest
through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not legal holders,
of the securities.
Street
Name Holders
We
may terminate a global security in certain situations, as described under “—Special Situations When a Global Security
Will Be Terminated,” or issue securities that are not issued in global form. In these cases, investors may choose to hold their
securities in their own names or in “street name.” Securities held by an investor in street name would be registered in the
name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest
in those securities through an account he or she maintains at that institution.
For
securities held in street name, we or any applicable trustee or depositary will recognize only the intermediary banks, brokers and other
financial institutions in whose names the securities are registered as the holders of those securities, and we or any such trustee or
depositary will make all payments on those securities to them. These institutions pass along the payments they receive to their customers
who are the beneficial owners but only because they agree to do so in their customer agreements or because they are legally required
to do so. Investors who hold securities in street name will be indirect holders, not holders, of those securities.
Legal
Holders
Our
obligations, as well as the obligations of any applicable trustee or third party employed by us or a trustee, run only to the legal holders
of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any
other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because
we are issuing the securities only in global form.
For
example, once we make a payment or give a notice to the legal holder, we have no further responsibility for the payment or notice even
if that legal holder is required, under agreements with its participants or customers or by law, to pass the payment or notice along
to the indirect holders but does not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture, to relieve
us of the consequences of a default or of our obligation to comply with a particular provision of an indenture, or for other purposes.
In such an event, we would seek approval only from the legal holders, and not the indirect holders, of the securities. Whether and how
the legal holders contact the indirect holders is up to the legal holders.
Special
Considerations for Indirect Holders
If
you hold securities through a bank, broker or other financial institution, either in book-entry form because the securities are represented
by one or more global securities or in street name, you should check with your own institution to find out:
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how
it handles securities payments and notices; |
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|
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whether
it imposes fees or charges; |
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|
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how
it would handle a request for the holders’ consent, if ever required; |
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|
|
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whether
and how you can instruct it to send you securities registered in your own name so you can be a holder, if that is permitted in the
future; |
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how
it would exercise rights under the securities if there were a default or other event triggering the need for holders to act to protect
their interests; and |
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if
the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters. |
Global
Securities
A
global security is a security that represents one or any other number of individual securities held by a depositary. Generally, all securities
represented by the same global securities will have the same terms.
Each
security issued in book-entry form will be represented by a global security that we issue to, deposit with and register in the name of
a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the depositary.
Unless we specify otherwise in the applicable prospectus supplement, The Depository Trust Company, New York, New York, known as DTC,
will be the depositary for all securities issued in book-entry form.
A
global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary,
unless special termination situations arise. We describe those situations below under “—Special Situations When a Global
Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered
owner and legal holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests
in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that
in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by
a global security will not be a legal holder of the security, but only an indirect holder of a beneficial interest in the global security.
If
the prospectus supplement for a particular security indicates that the security will be issued as a global security, then the security
will be represented by a global security at all times unless and until the global security is terminated. If termination occurs, we may
issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry
clearing system.
Special
Considerations for Global Securities
As
an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s
financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize an indirect
holder as a holder of securities and instead deal only with the depositary that holds the global security.
If
securities are issued only as global securities, an investor should be aware of the following:
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an
investor cannot cause the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her
interest in the securities, except in the special situations described below; |
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an
investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection
of his or her legal rights relating to the securities, as described above; |
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an
investor may not be able to sell interests in the securities to some insurance companies and to other institutions that are required
by law to own their securities in non-book-entry form; |
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an
investor may not be able to pledge his or her interest in the global security in circumstances where certificates representing the
securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; |
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the
depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating
to an investor’s interest in the global security; |
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we
and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership
interests in the global security, nor will we or any applicable trustee supervise the depositary in any way; |
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the
depositary may, and we understand that DTC will, require that those who purchase and sell interests in the global security within
its book-entry system use immediately available funds, and your broker or bank may require you to do the same; and |
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financial
institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in the
global security, may also have their own policies affecting payments, notices and other matters relating to the securities. |
There
may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for
the actions of any of those intermediaries.
Special
Situations When a Global Security Will Be Terminated
In
a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates
representing those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to
the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to
their own names, so that they will be direct holders. The rights of holders and street name investors are described above.
A
global security will terminate when the following special situations occur:
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if
the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security
and we do not appoint another institution to act as depositary within 90 days; |
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if
we notify any applicable trustee that we wish to terminate that global security; or |
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if
an event of default has occurred with regard to securities represented by that global security and has not been cured or waived. |
The
applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular
series of securities covered by the prospectus supplement. When a global security terminates, the depositary, and neither we nor any
applicable trustee, is responsible for deciding the names of the institutions that will be the initial direct holders.
PLAN
OF DISTRIBUTION
We
may sell the securities from time to time pursuant to underwritten public offerings, direct sales to the public, “at the market”
offerings, negotiated transactions, block trades or a combination of these methods. We may sell the securities to or through underwriters
or dealers, through agents, directly to one or more purchasers or through any combination of the foregoing. We may distribute securities
from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed; |
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at
market prices prevailing at the time of sale; |
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at
prices related to such prevailing market prices; or |
In
addition, we may issue the securities as a dividend or distribution to our existing securityholders.
A
prospectus supplement or supplements (and any related free writing prospectus that we may have authorized for use in connection with
a specific offering) will describe the terms of the offering of the securities, including, to the extent applicable:
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the
name or names of the agents, dealers or underwriters, if any; |
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the
purchase price of the securities or other consideration therefor, and the proceeds, if any, we will receive from the sale; |
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any
over-allotment options under which underwriters may purchase additional securities from us; |
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any
agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation; |
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any
public offering price; |
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any
discounts or concessions allowed or re-allowed or paid to dealers; and |
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any
securities exchange or market on which the securities may be listed. |
Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If
underwriters or agents are used in the sale of the securities in respect of which this prospectus is delivered, we will enter into an
underwriting agreement or other agreement with them at the time of sale to them, and we will set forth in the prospectus supplement relating
to such offering the names of the underwriters or agents and the terms of the related agreement with them.
We
may directly solicit offers to purchase securities or agents may be designated to solicit such offers. We will, in the prospectus supplement
relating to such offering, name any agent that could be viewed as an underwriter under the Securities Act and describe any commissions
that we must pay. Any such agent will be acting on a best efforts basis for the period of its appointment or, if indicated in the applicable
prospectus supplement, on a firm commitment basis. This prospectus may be used in connection with any offering of our securities through
any of these methods or other methods described in the applicable prospectus supplement.
We
may engage in at-the-market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. We
may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
If
a dealer is utilized in the sale of the securities in respect of which the prospectus is delivered, we will sell such securities to the
dealer, as principal. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the
time of resale.
We
may provide agents and underwriters with indemnification against civil liabilities, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
In
order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the securities or any other securities the prices of which may be used to determine payments on such securities.
Specifically, any underwriters may over-allot in connection with the offering, creating a short position for their own accounts. In addition,
to cover over-allotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and
purchase, the securities or any such other securities in the open market. Finally, in any offering of the securities through a syndicate
of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the
securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions,
in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above
independent market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at
any time.
The
securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national
securities exchange. We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus, and any supplement
thereto, will be passed upon for us by Joseph Lopez LLP, Singapore.
EXPERTS
The consolidated balance sheets of Genius Group
Limited (the “Company”) and its subsidiaries (the “Group”) as of December 31, 2023 and 2022, the related consolidated
statements of Operations and comprehensive (Loss)/Income, statements of changes in shareholders’ equity, and cash flows for the
years ended December 31, 2023, 2022 and 2021 and the related notes (collectively referred to as the “consolidated financial statements”)
have been included in this registration statement in reliance upon the report of Enrome LLP, an independent registered public accounting
firm, and upon the authority of said firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement under the Securities Act of 1933, as amended, with respect to the Ordinary Shares offered
hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in
the registration statement or the exhibits and schedules filed therewith. For further information about us and the Ordinary Shares offered
hereby, we refer you to the registration statement, the documents incorporated by reference herein and the exhibits and schedules filed
thereto. Statements contained or incorporated by reference in this prospectus regarding the contents of any contract or any other document
that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects
by reference to the full text of such contract or other document filed as an exhibit to the registration statement. The SEC maintains
an Internet website that contains reports, proxy statements and other information about registrants, like us, that file electronically
with the SEC. The address of that site is www.sec.gov.
We
are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic
reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information is available
for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.geniusgroup.net.
You may access our Registration Statement on Form F-1, annual reports on Form 20-F, current reports on Form 6-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon
as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The reference to our website address
does not constitute incorporation by reference of the information contained on our website, and you should not consider the contents
of our website in making an investment decision with respect to our Ordinary Shares.
You
may also request all information free of charge from the Company at:
Genius
Group Limited
c/o
Roger Hamilton, Chief Executive Officer
8
Amoy Street, #01-01
Singapore
049950
Tel:
+65 8940 1200
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to
you by referring you to another document that we have filed separately with the SEC. You should read the information incorporated by
reference herein because it is an important part of this prospectus. We incorporate by reference into this prospectus and the registration
statement of which this prospectus is a part the information or documents listed below that we have filed with the SEC:
| (i) |
our
Annual Reports on Form 20-F (File No. 001-41353) filed on May 15, 2024. |
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|
| (ii) |
Our
Form 6-K Current Reports filed on May
15, 2024, May
17, 2024, May
20, 2024, May
22, 2024, June
4, 2024, June
6, 2024, June
6, 2024, June
11, 2024 June
25, 2024, June
26, 2024, June
26, 2024, June
28, 2024, July
15, 2024, July
19, 2024, July
24, 2024, July
24, 2024, July
26, 2024, August
06, 2024, August
09, 2024, August
13, 2024, August
16, 2024 and August
16, 2024. |
| |
|
| (iii) |
the
description of our Ordinary Shares contained in our Registration Statement on Form 8-A (File No. 001-41353) filed with the SEC on
April 11, 2022. |
Genius (AMEX:GNS)
과거 데이터 주식 차트
부터 12월(12) 2024 으로 1월(1) 2025
Genius (AMEX:GNS)
과거 데이터 주식 차트
부터 1월(1) 2024 으로 1월(1) 2025
