Genius Group Announces That It Is Being Forced To Sell Its Bitcoin Treasury After Having Been Blocked From Selling Shares Or Raising Funds, And Specifically From Using Investor Funds To Buy Bitcoin By The United States District Court Southern District Of New York

Genius Group Limited (NYSE:GNS) ("Genius Group" or the "Company"), a leading AI-powered, Bitcoin-first education group, today announced that it is being forced to sell its Bitcoin Treasury after having been blocked from selling shares or raising funds, and specifically from using investor funds to buy Bitcoin by the United States District Court Southern District of New York (SDNY).

As previously reported by the Company, on October 30, 2024 Genius initiated arbitration procedures to terminate its Asset Purchase Agreement (APA) with Fatbrain AI (LZGI), and on December 17, 2024 both parties agreed to a preliminary injunction on the Company's shares related to the APA (Case 1:24-cv-08468-MKV).

This took place after LZGI's shareholders filed a lawsuit against LZGI and its officers, Michael Moe and Peter Ritz alleging a history of fraud, including in their actions related to the APA (Case 1:24-cv-07551), and after the SEC filed shareholder fraud allegations for defrauding LZGI shareholders amongst others (Case 2:24-cv-00918).

Further to these filings, on February 14, 2025, Moe and Ritz filed for a Temporary Restraining Order (TRO) and Preliminary Injunction (PI) to prevent Genius from selling any shares, or raising any funds, including through the use of its $150m ATM funding, and specifically from buying Bitcoin. On the same day, the TRO was granted, and on March 13, 2025, the SDNY granted the PI.

Over the last six weeks, Genius has filed multiple letters and motions to the court explaining that the TRO and PI did not maintain the status quo pending arbitration, that they were based on false statements designed to defraud the court, and the intent of the filing of the TRO and PI was to extort further money from Genius.

Genius also filed with the court a transcript of a meeting with Ritz and Genius executives recorded in New York on February 27, 2025 in which Ritz explained in detail how he has weaponized the TRO and PI process in order to extort millions more out of Genius to aid his personal scheme to defraud his LZGI shareholders.

This transcript has also been filed by LZGI's shareholders in their derivative case against LZGI, Moe and Ritz in the United States District Court Southern District of Florida (Case 1:25-cv-21062-JEM). Genius, which was initially named in both LZGI shareholder lawsuits has subsequently been voluntarily dismissed from both.

To date, the PI has remained in effect. As a result, Genius has had its financing and Bitcoin Treasury activities blocked by court order for the last six weeks, in direct opposition to the wishes, consent and approvals of the Company's Board and shareholders. As the injunction also prevents Genius from issuing share compensation to employees as part of their long standing employment agreements, Genius is in the unusual position of being legally compelled by a US court to directly break Singapore law.

As a result of the PI, which legally blocks Genius from being able to fund its operations, Genius is currently taking the following actions:

• Pursuing an appeal with the second circuit: The Company filed an emergency motion to vacate the PI and for an immediate administrative stay with the United States Court of Appeals for the Second Circuit on March 19, 2025, and is awaiting the outcome of the appeal.
  
   
• Restructuring operations: With the legal block on the Company's ability to issue shares or raise funds, the Company is taking steps to downsize its operations, including closing various divisions and cancelling all event sponsorships, marketing activity, and investing activities until such time that the Company is legally able to resume its growth plans.
  
   
• Downsize its Bitcoin Treasury: By blocking all share sales and all receipt of investor funds, the Court is forcing the Company to sell its Bitcoin Treasury to fund its operations. Genius is taking all necessary measures to minimize Bitcoin sales but anticipates that it will need to downsize its Bitcoin Treasury in the coming months in the event the PI remains in place. As at today's date, the Company has had to reduce its Bitcoin holdings from 440 Bitcoin to 430 Bitcoin.
  
   
• Retaining its public listed status: The LZGI complaints against Ritz and Moe details an ongoing history of defrauding investors by diverting funds for personal gain and pushing the companies they target into insolvency and closure. The SEC complaint details a pattern of defrauding investors and short selling companies including LZGI. Genius has provided evidence to the court that this same modus operandi is now being applied to Genius. The Company is committed to fighting against this fraudulent behaviour using all legal means available.