Genius Group Ltd. (NYSE American: GNS) shares advanced after the company confirmed it has cancelled 20 million Class A Ordinary Shares that were returned to it this week. The company said the transaction, tied to an Asset Purchase Agreement with Entrepreneur Resorts Ltd. (ERL), reduced its public float and prompted a positive market reaction.
The company said the cancellation of the 20 million shares was authorized on June 16, when ERL’s board agreed to return the shares. Genius Group’s board then resolved to cancel them immediately and issued a cancellation notice to its transfer agent, VStock Transfer.
This action follows an earlier repurchase and cancellation of 6.6 million Class A Ordinary Shares announced on June 12. Taken together, the two actions removed 26.6 million shares from the company’s issued share capital during the week.
Genius Group characterized the 20 million-share cancellation as representing 16% of its public float. The company also stated that the move reduced its public float by 22% this week. Combined with the prior deletion of 6.6 million shares, the net reduction in issued share capital for the week totaled 26.6 million shares.
Company officials said the cancellations are the result of an internal share count completed on April 23 that identified a cluster of Class A Ordinary Shares targeted for retirement or removal from the public float. The review singled out up to 30.1 million shares for such treatment. Among those were roughly 17.3 million unclaimed shares that had been issued under the Asset Purchase Agreement with ERL and around 5.5 million shares that were payable to Genius Group tied to its prior shareholding in ERL.
According to the company, the 26.6 million shares cancelled this week equate to 61% of the 43.3 million shares it has targeted for repurchase, return, or retirement. Genius Group also said this figure corresponds to approximately 36% of its public float.
Management signaled an intention to exhaust the remaining capacity under its existing shareholder-approved buyback mandate before that authorization expires on July 6. At the company’s Annual General Meeting scheduled for July 7, shareholders are slated to vote on a proposed new buyback mandate that would allow repurchases of up to 20% of issued Class A Ordinary Shares and remain valid for twelve months if approved.
Context and implications: The company has executed both voluntary repurchases and cancellations of shares returned under contractual arrangements with ERL. Those moves have materially reduced the pool of publicly traded Class A Ordinary Shares this week and set the stage for additional buybacks subject to shareholder approval.