Case 1:26-cv-25837-RKA Document 1 Entered on FLSD Docket 08/26/2026 Page 1 of 15

Case 1:26-cv-25837-RKA Document 1 Entered on FLSD Docket 08/26/2026 Page 1 of 15

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO.: ________________

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

v.

GENESISAI CORP.

and

ARCHIL CHEISHVILI,

Defendants.

_________________________________________/

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Plaintiff Securities and Exchange Commission (“Commission”) alleges as follows:

I.

INTRODUCTION

1.

From approximately December 2019 through December 2024 (“the Relevant

Period”), GenesisAI Corp. (“GenesisAI” or “the Company”), and its co-founder and then-CEO,

Archil Cheishvili (“Cheishvili”) (collectively, “Defendants”), raised more than $5.3 million from

more than 4,000 investors while negligently making material misrepresentations regarding the

Company’s projected revenue, current valuation, and customer demand.

2.

Throughout the Relevant Period, Defendants solicited investors through the

Company’s website, social media, mass marketing emails, online advertising, and other means, to

invest in a series of Regulation Crowdfunding and Regulation A offerings of GenesisAI stock.

GenesisAI’s business objective was to connect companies in need of AI with companies which

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developed AI and were looking for ways to monetize it. By chaining multiple AI models together,

the Company sought to improve the functionality and quality of AI products and services.

3.

Defendants’ negligently made material misrepresentations to prospective investors

about GenesisAI’s anticipated revenue growth and its claimed substantially increasing year-toyear valuations belied its functionality and the lack of actual customers contracted to utilize its

promoted services.

4.

In 2019 and early 2020, Defendants forecasted that Genesis AI would be generating

significant revenue within a few months and that revenue would increase steadily, reaching up to

$250 million in 2024. When Defendants disseminated this revenue forecast, Defendants should

have known they lacked a reasonable basis to forecast such revenue as the Company had no

agreements with customers to justify their revenue projections. In other words, Defendants should

have known that the Company did not have a concrete existing source of revenue to justify these

revenue projections. In fact, in early 2020 GenesisAI’s marketplace remained in its beta stage and

would not be fully launched until May 2022.

5.

Defendants also disseminated increasing valuations of the Company to prospective

investors that rose steadily from $7.5 million in 2019 to more than $204 million for the Company’s

June 2022 crowdfunding. Defendants did this despite knowing the Company did not have a robust

comparison analysis of its valuation. Here too, Defendants lacked sufficient basis to support their

claims about GenesisAI’s valuation and acted negligently because they should have known that a

more robust objective analysis was needed before any such valuation-related statements were

made to potential investors.

6.

Defendants also negligently misrepresented to prospective investors on the

Company’s website, crowdfunding webpage, investor slide decks, offering materials, and emails,

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that the Company had partnerships with other companies when the Company only had signed nonbinding memoranda of understanding with other companies which were not actual partnership

agreements.

7.

On January 2, 2025, GenesisAI announced that it was in the best interests of the

Company to cease developing its products and that Cheishvili was stepping down from his role as

CEO and other roles with the Company.

8.

As a result of the conduct alleged in this Complaint, Defendants have violated

Section 17(a)(2) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(2)].

9.

Unless enjoined, Defendants will continue to violate the federal securities laws.

Among other relief, the Commission seeks permanent injunctions against Defendants,

disgorgement of ill-gotten gains with prejudgment interest, a civil monetary penalty, and an officer

and director bar against Cheishvili.

II.

DEFENDANTS

10.

GenesisAI is a Delaware corporation incorporated in July 2018, with its principal

place of business in Sunnyvale, California.

During the Relevant Period, GenesisAI was

headquartered in Miami, Florida.

11.

Cheishvili, 33, is a resident of Sunnyvale, California. During the Relevant Period,

Cheishvili resided in Miami, Florida. From August 2018 to January 2025, Cheishvili served as

the CEO, officer, and a board member of GenesisAI.

III.

JURISDICTION AND VENUE

12.

This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)].

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13.

This Court has personal jurisdiction over Defendants and venue is proper in the

Southern District of Florida because Defendants engaged in acts and transactions in this District

constituting violations of the Securities Act. During the Relevant Period, GenesisAI’s principal

place of business was in Miami, Florida, and Cheishvili resided in Miami, Florida.

14.

In connection with the conduct alleged in the Complaint, Defendants, directly and

indirectly, singly or in concert with others, made use of the means or instruments of transportation

or communication in interstate commerce, and of the mails.

IV.

FACTUAL ALLEGATIONS

A.

GenesisAI’s Business Model and Securities Offerings

i.

15.

GenesisAI’s Operations and Evolving Business Models

Cheishvili co-founded GenesisAI in 2018 to attempt to produce a functional and

decentralized marketplace for AI services. Cheishvili was GenesisAI’s CEO, officer, and one of

its board members. Cheishvili created or approved all statements made or posted by GenesisAI.

16.

On the Company’s website, Defendants stated GenesisAI had “agreements with AI

suppliers” who would “bring technology” while the Company would bring users. Defendants

stated in offering documents and their crowdfunding webpages that GenesisAI would generate

revenue by charging users a monthly subscription fee to use the tools on the marketplace and by

taking a 30% fee on transactions that occurred directly between buyers and sellers on the

marketplace.

17.

Defendants continually published updates about developments in the Company’s

marketplace and technology, such as:

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•

In October 2021, Defendants stated on a StartEngine Primary LLC (“StartEngine”)

crowdfunding offering page for GenesisAI, “[w]e have a beta version of the marketplace

up and running…[with] 23 models deployed…”

•

In May 2022, Defendants announced the launch of GenesisAI’s marketplace, which

allowed AI companies to offer and showcase their services, on Netcapital Funding Portal

Inc.’s (“Netcapital”) crowdfunding offering page for GenesisAI, YouTube, social media,

and elsewhere. The marketplace had approximately 35 AI models available.

•

In a slide deck emailed to investors in May 2022, Defendants stated that the marketplace

allowed developers to “discover, test, and integrate various AI related” application

programming interfaces.

•

In a form filed with the SEC in June 2022, GenesisAI stated that it had developed “an

artificial intelligence, or AI, protocol and platform that enables different AI systems to

communicate with each other, exchange data, and trade services.” GenesisAI claimed its

product had a competitive advantage of better quality at lower prices.

18.

During the Relevant Period, GenesisAI targeted customers in various fields,

including financial services, asset management, climatology, and healthcare, among others.

Defendants promoted these broadening customer targets in their investor solicitations.

19.

In 2023, GenesisAI developed an AI application email server tool capable of

sending large and inexpensive email blasts that were not constrained by the limitations of thirdparty email providers. That same year, Defendants announced the launch of GenesisAI’s email

server tool as a product. The Company deployed the email server tool and used it to reach new

potential investors.

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ii.

20.

GenesisAI’s Securities Offerings

From approximately December 2019 through December 2024, Defendants

continuously solicited and raised money from investors. Defendants used various means to solicit

investors, including social media, online advertisements, mass marketing email campaigns, the

crowdfunding intermediaries’ fundraising webpages, GenesisAI’s own webpage, and a sidewalk

display advertisement. The Company spent a portion of the investor funds it raised to pay for ads

on X (then Twitter), Google, Facebook, and other websites to promote the Company and its

product offerings as well as to solicit new investors. From 2020 through 2024, GenesisAI paid X,

Google, and Meta (Facebook) at least $780,000, combined, for advertising.

21.

Through these efforts, Defendants raised more than $5.3 million from more than

4,000 investors in public and private offerings of simple agreements for future equity (“SAFE”)

and stock. Investors in GenesisAI were predominantly retail investors who were attracted to the

Company’s AI focus, revenue projections, rising valuation, and purported customer demand.

Defendants raised most of the investor funds through Regulation Crowdfunding offerings through

crowdfunding intermediaries and relying on a provision in the 2012 JOBS Act 1 allowing

unaccredited investors to purchase equity in early-stage private companies.

22.

The SAFEs that investors purchased from GenesisAI are securities because, under

their terms, they convert to shares of GenesisAI preferred stock upon certain conditions, such as if

the company receives equity financing or has a liquidity event. Thus, the SAFEs meet the

definition of security under Securities Act § 2(a)(1) and Exchange Act § 3(a)(10). Additionally,

the company’s offering documents referred to the investment as securities. GenesisAI’s offering

1

Pub. L. 112-106 (April 5, 2012).

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of stock was also an offering of securities because stock is a “security” under the Section 2(a)(1)

of the Securities Act and Section 3(a)(10) of the Exchange Act.

23.

Beginning in December 2019, GenesisAI conducted four crowdfunding campaigns

through crowdfunding intermediaries. The first was through Wefunder Portal LLC (“Wefunder”),

which was followed by three campaigns through Netcapital. Defendants initiated an additional

crowdfunding round through StartEngine in September 2021, but StartEngine cancelled this

offering. In 2022, the Company also conducted an offering of stock under Regulation A through

the Dalmore Group, a registered broker-dealer. This offering permitted Cheishvili to sell a small

portion of his own GenesisAI stock, which had been granted to him by the Company. Between

February 2022 and June 2022, Cheishvili sold 12,000 shares of GenesisAI stock and made

approximately $51,000 in profit.

B.

Defendants’ Material Misrepresentations to Prospective Investors and

Investors

24.

Defendants negligently made material misrepresentations on the Company’s

website, its crowdfunding webpages, its public filings, in social media, and in email

communications to certain individual prospective investors in soliciting prospective investors to

invest in GenesisAI’s securities offerings. These included projections that GenesisAI would

generate revenue within months despite the absence of specific commitments from customers that

could support such statements; misrepresentations about the Company’s valuation; and

misrepresentations about the Company’s agreements with other companies.

i.

25.

Defendants’ Misrepresentations Regarding GenesisAI’s Revenue Prospects

In 2019 and 2020, in investor slide decks and via email communications,

Defendants negligently made material misrepresentations to prospective investors about

GenesisAI’s anticipated revenue growth, forecasting that GenesisAI would be generating

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significant revenue within a few months and that revenue would increase steadily.

These

statements, written and approved by Cheishvili, created unfounded expectations that GenesisAI

would soon realize revenue and that the revenue would quickly rise to tens and then hundreds of

millions of dollars annually.

26.

In an email sent to a potential investor in December 2019, Cheishvili projected

revenue of $1 million in 2020 and $8 million in 2021 for the Company. Although there were

preliminary expressions of interest from potential clients, Cheishvili’s anticipation of such revenue

was not reasonable at that time because GenesisAI did not have any concrete commitments from

potential clients to create potential revenue for its business model, and its marketplace was still in

its beta stage.

27.

Similarly, in a slide deck available to investors on GenesisAI’s December 2019

Wefunder offering page, Defendants included a graph entitled “Revenue Forecast” with a revenue

line that began in mid-2020 at $0, projected revenue by late 2020, and rose steadily upward to

$250 million in revenue by 2024, as seen here:

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28.

Although the graph included a disclaimer “that this forecast is not guaranteed,”

Defendants were still negligent in using this graph as it created a misleading impression that the

Company would generate revenue a few months from its 2019 publication. It also included that

Defendants projected that revenue would increase sharply, when, in fact, Defendants had no

reasonable basis to expect any such revenue.

29.

In another instance, in February 2020, Cheishvili responded to a question from a

prospective investor in the comments section of the Company’s webpage on Wefunder, stating,

“We estimate to reach revenue of around $25M in 3 years! Goal is to become market leader in all

things AI . . .” Also, in an April 2020 email exchange with a prospective investor, Cheishvili

stated that the Company had “lots of companies and users in the waitlist” and that they were

“targeting $500k in revenue this year and $5M next year.” At the time that Cheishvili made those

statements, those statements were misleading, and Cheishvili should have known they were

misleading.

30.

Although GenesisAI indicated that its projected revenues were not guaranteed and

potential users had expressed interest in GenesisAI’s marketplace, Defendants should have known

that the Company did not have concrete prospects for potential sources of revenue to justify their

projections. When these projections were made in 2020, GenesisAI’s marketplace was in its beta

stage and would not be fully launched until 2022. There was no charge for subscription fees for

users before the marketplace launch, the Company had no agreements or commitments from users,

and, although there was interest expressed during the beta stage, there was no “waitlist.” Later in

2020, the Company ceased making revenue projections.

31.

The Company did not generate any revenue from 2018 to 2021. In 2022, the

Company generated only approximately $8,000 in revenue and most of this revenue was generated

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by hosting an AI conference in Miami, Florida. And despite having launched its marketplace in

May 2022, GenesisAI’s revenue increased only to approximately $9,000 in 2023. By 2024, the

Company was realizing some revenue, mostly from its email server tool—not its AI marketplace.

In 2024, GenesisAI realized approximately $40,000 in revenue–far short of the $250 million

Defendants had projected.

ii.

32.

Defendants’ Misrepresentations About GenesisAI’s Valuation

Despite the lack of meaningful revenue, Defendants continued to increase the

Company’s stated valuation in each of its offerings. Defendants negligently used the increasing

valuation of GenesisAI in investment solicitation materials, such as the Company’s webpage on

Netcapital and StartEngine, and other public statements.

33.

In its first crowdfunding offering in 2019, Defendants used an implied valuation of

$7.5 million. Cheishvili set this valuation, which was stated in the offering documents and by

Cheishvili in the comments section of the Company’s solicitation page on Wefunder. When

Defendants initiated a second crowdfunding offering April 2021, Defendants stated in the offering

documents that the Company was now valued at approximately $47 million. Defendants increased

the valuation despite the Company having no revenue and its technology remaining in a beta stage.

When the Company initiated its next crowdfunding offering in September 2021, Defendants

increased the stated valuation of GenesisAI to approximately $89 million.

34.

On GenesisAI’s Netcapital webpage for a crowdfunding offering begun in July

2022, Defendants stated that the Company had a valuation of $204 million. This valuation was

more than twice the valuation Defendants had used the previous year. By increasing the valuation,

Defendants negligently created a misleading impression that the Company was achieving

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significant developments when in fact the Company had failed to generate any significant revenue

and its only significant asset was the cash derived mostly from investor funds.

35.

In support of GenesisAI’s misleading statements about its valuation, Defendants

cited GenesisAI’s increasing number of registered users. On GenesisAI’s website and elsewhere,

Defendants told prospective investors that GenesisAI was “going to charge users monthly

subscription fees per [AI] model.” Additionally, Defendants repeatedly communicated increases

in the number of registered users for the marketplace in investor solicitations. In the 2021

StartEngine crowdfunding offering, GenesisAI stated it had 1,000 registered users. In its offering

circular in February 2022, GenesisAI stated that “on the demand side, we have over 1,400

individual registered users and companies.” In a video solicitation for a crowdfunding offering

that was available to investors on YouTube, Cheishvili stated that a reason “you should invest”

was that GenesisAI had “around 2,000 users and product launched.”

36.

By 2023, Defendants stated on GenesisAI’s investor decks that the Company had

more than 2,600 registered users on its platform. However, Defendants failed to disclose that

becoming a “registered user” did not necessarily mean purchasing or intending to purchase

GenesisAI’s services; it meant filling out a registration form and providing GenesisAI a name,

affiliation, and email address as an expression of potential interest. GenesisAI did not require any

financial commitment to become or remain a user. GenesisAI did not even keep track of how

many users were active. Given GenesisAI’s stated business model to charge users subscription

fees, it was negligently misleading of Defendants to announce the number of registered users as a

metric for success while failing to disclose that becoming and remaining a registered user did not

require a financial commitment and that the Company did not always track if users were active.

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37.

When investors raised questions about the basis for such a high valuation,

Cheishvili stated that the valuation was based on “comparables.” While Defendants had disclosed

in connection with this offering that the estimated valuation was established by the Company,

Cheishvili omitted to inform investors that he alone came up with the estimated valuation, and that

it was based on his comparison of companies he personally deemed comparable to GenesisAI. In

fact, his comparison process had no independent support, and Cheishvili selected companies that

had substantial customers, were much further ahead in developing their products and services, or

had substantial financial backing from high-profile venture capitalists, all of which GenesisAI

lacked.

iii.

38.

Defendants Misled Investors Regarding GenesisAI’s Customer Demand

Defendants negligently made misleading statements about GenesisAI’s operations

on the Company’s webpage, social media, and investor solicitations.

These material

misrepresentations included misleading claims of partnerships with other companies and

misleading statements about the users of the marketplace.

39.

In 2020 and 2021, Defendants featured a slide deck on GenesisAI’s webpage and

its crowdfunding fundraising page that stated that the Company had “[o]ver 25 partnerships!”

Defendants were negligent in using the word “partnerships” because they created a misleading

impression that the Company had signed partnership agreements to do business when, in fact, the

Company only had signed non-binding memoranda of understanding.

40.

In 2021, Defendants also announced on their crowdfunding fundraising page that

the Company had “over 15 companies willing to join [its] marketplace…” And in 2022, in the

Company’s offering circular available to investors, Defendants stated to investors that the

Company had “over 15 agreements with AI companies and individuals who are interested in

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deploying AI tools” in the marketplace. Although some of the companies that entered into

MOUs with GenesisAI deployed their AI tools on the GenesisAI platform, Defendants were

negligent in making these statements because the Company did not have actual partnership

agreements with any companies, much less 15 of them. Rather, all the Company had were nonbinding memoranda of understanding with other companies and even some of these had expired

by 2021.

V.

CLAIM FOR RELIEF

COUNT I

Violations of Section 17(a)(2) of the Securities Act

(Against All Defendants)

41.

The Commission repeats and realleges Paragraphs 1 through 40 of this Complaint

as if fully set forth herein.

42.

Since as early as December 2019 through at least December 2024, Defendants, in

the offer or sale of securities by use of the means or instruments of transportation or

communication in interstate commerce or by use of the mails, directly or indirectly, negligently

obtained money or property by means of untrue statements of material facts and omissions to state

material facts necessary in order to make the statements made, in light of the circumstances under

which they were made, not misleading.

43.

By reason of the foregoing, Defendants violated and, unless enjoined, are

reasonably likely to continue to violate Section 17(a)(2) of the Securities Act [15 U.S.C. §

77q(a)(2)].

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VI.

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that this Court find Defendants

committed the violations alleged in this Complaint, and:

A.

Permanent Injunction

(Against Defendants)

Issue Permanent Injunctions enjoining Defendants GenesisAI and Cheishvili, and their

officers, agents, servants, employees, attorneys, and all persons in active concert or participation

with them and each of them, from violating Section 17(a)(2) of the Securities Act [15 U.S.C. §

77q(a)(2)].

B.

Disgorgement and Prejudgment Interest

(Against Cheishvili)

Issue an Order directing Defendant Cheishvili to disgorge all ill-gotten gains received,

including prejudgment interest, resulting from the acts and/or courses of conduct alleged in this

Complaint, pursuant to Sections 21(d)(5) and (7) of the Securities Exchange Act of 1934

(“Exchange Act”) [15 U.S.C. § 78u(d)(5) and (7)].

C.

Civil Monetary Penalty

(Against Cheishvili)

Issue an Order directing Cheishvili to pay a civil money penalty pursuant to Section 20(d)

of the Securities Act [15 U.S.C. § 77t(d)].

D.

Officer and Director Bar

(Against Cheishvili)

Issue an Order prohibiting Cheishvili from serving as an officer or director of any company

that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is

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required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to

Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)], for a period of three (3) years;

E.

Further Relief

Grant such other and further relief as may be necessary and appropriate.

VII.

DEMAND FOR JURY TRIAL

The Commission hereby demands a trial by jury on any and all issues in this action so

triable.

Dated: August 26, 2026

Respectfully submitted,

By: /s/ Russell Koonin

Russell Koonin

Acting Supervisory Trial Counsel

Fla. Bar No. 0474479

Direct Dial: (305) 982-6390

Email: kooninr@sec.gov

Eric E. Morales

Senior Counsel

Bar No. 1010791

Direct Dial: (305) 416-6261

Email: moralese@sec.gov

Attorneys for Plaintiff

Securities and Exchange Commission

801 Brickell Avenue, Suite 1950

Miami, FL 33131

Telephone: (305) 982-6300

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