F-1/A: DeepGreenX Group Files for Nasdaq Direct Listing Amidst Significant Losses and Strategic Pivot to Digital Assets

DeepGreenX Group Inc., a Canadian holding company, is pursuing a direct listing on Nasdaq for up to 93.7 million common shares, aiming to transition from a legacy green logistics business to an AI-driven platform for tokenizing sustainability and real-world assets, despite a history of substantial losses and a 'going concern' audit opinion.

Summary

• DeepGreenX Group Inc. is seeking to directly list up to 93,745,000 common shares on the Nasdaq Global Market, with no traditional underwriting or book-building process.
• The company is pivoting its business model from legacy green logistics supply chain services, which generated revenue of $24,081,848 in 2024, to an intelligent platform (DXG RWA Factory) for converting sustainability and real-world asset data into digital financial instruments.
• The DXG RWA Factory, currently in early development, aims to generate revenue from subscription and usage fees, and digital asset trading commissions, with full operation not expected for 12-18 months.
• DeepGreenX reported a net loss of $2,453,422 in 2024, significantly higher than the $96,698 net loss in 2023, and has an accumulated deficit of $2,772,203 as of December 31, 2024.
• The company's independent registered public accounting firm has expressed 'substantial doubt' about its ability to continue as a going concern due to historical losses, accumulated deficit, and the need for additional capital.
• A valuation report by Frost & Sullivan, dated July 12, 2025, estimates the fair market value of the company's 'tokenization pipeline' between approximately $13.7 billion and $28.2 billion, based on future cash flow projections and comparable company analysis.
• DeepGreenX is a holding company with primary legacy operations in China, exposing it to significant PRC regulatory and operational risks, including potential disallowance of its holding company structure and restrictions on cash transfers.
• Ms. Lan Yang, the ultimate beneficial owner, will control approximately 92% of the company's voting power, allowing DeepGreenX to operate as a 'controlled company' under Nasdaq rules, exempting it from certain corporate governance requirements.
• The company has engaged Kingswood Capital Partners as its financial advisor for the direct listing process, which will involve Nasdaq's standard auction process for price discovery.
• No proceeds from the sale of common shares by Registered Shareholders in this direct listing will be received by the company.

Sentiment

Score: 3

Explanation: The sentiment is largely negative due to significant financial losses, a 'going concern' audit opinion, high operational and regulatory risks associated with its China-based legacy business and new digital asset pivot, and the inherent volatility risks of a direct listing without traditional underwriting. While the strategic pivot to tokenization offers long-term potential, it is currently unproven and capital-intensive.

Positives

• The company is strategically expanding into the rapidly growing digital asset and tokenization market, projected to reach $16 trillion by 2030 according to Boston Consulting Group.
• DeepGreenX's new intelligent software platform (DXG RWA Factory) aims to create new, high-margin recurring revenue streams from sustainability and real-world asset data monetization.
• The company has secured a valuation report from Frost & Sullivan, indicating a significant potential valuation range for its tokenization pipeline between $13.7 billion and $28.2 billion.
• DeepGreenX has assembled an experienced management team with backgrounds in technology, finance, and sustainability, including former executives from JPMorgan Chase & Co., Alibaba Group, and China Merchants Bank.
• The company's legacy green logistics business provides existing customer relationships and real-world data that can be leveraged for the new digital platform.

Negatives

• DeepGreenX has a history of significant net losses, including a net loss of $2,453,422 in 2024, and negative cash flows from operating activities.
• The company's independent registered public accounting firm has expressed 'substantial doubt' about its ability to continue as a going concern.
• The new intelligent software platform is in early stages of development and is not expected to be fully operational for another 12 to 18 months, with no guarantee of successful implementation or customer acquisition.
• The company has not yet secured capital commitments for strategic partnerships or joint ventures related to its intelligent platform operations, nor completed any tokenizations or transactions involving tokenized data.
• The direct listing structure means there will be no traditional book-building process, no price stabilization activities, and no contractual lock-up agreements for existing shareholders, potentially leading to significant price volatility and oversupply of shares.
• The company is a holding company dependent on distributions from its subsidiaries, which are subject to PRC and Korean restrictions on dividend payments and foreign exchange controls.
• The company may owe significant additional taxes in connection with the reorganization of its Korean subsidiary if Korean tax authorities determine it was undervalued for a share exchange.

Risks

• Inability to achieve profitability, positive cash flows, and net working capital surplus due to historical losses and increasing operating expenses.
• Requirement for significant additional capital to support business growth, which may not be available on commercially reasonable terms or could lead to shareholder dilution.
• Failure of the complex new platforms to satisfy customers or perform as desired, harming business and financial condition.
• Inability to successfully develop and deploy new technologies to address customer needs in a rapidly evolving industry.
• Volatility in the carbon credit market, which could materially and adversely affect the business if values decline.
• Uncertainty and rapid evolution of the digital asset industry, including potential for malicious activity, scaling challenges, and flaws in cryptography.
• Legal and regulatory risks associated with the nascent NFT and tokenized real-world asset markets, including potential reclassification of products as securities by regulatory authorities.
• Breaches in data security, failure of information security systems, or privacy concerns, leading to penalties, reputational damage, and financial losses.
• Uncertainties with respect to the PRC legal system, including rapid changes in rules and regulations, and potential government intervention or influence over operations.
• Difficulties for U.S. investors in enforcing judgments against the company or its directors/officers in foreign jurisdictions like China and Canada.
• Potential delisting of securities under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect the company's auditor for two consecutive years.
• Risks associated with foreign exchange rate fluctuations and interest rate changes, impacting financial performance.
• Misconduct by employees leading to legal liabilities, reputational harm, or other damages.
• Exposure to anti-corruption, anti-bribery, anti-money laundering, and financial/economic sanctions laws, with non-compliance leading to severe penalties.
• Potential for the company to be classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, resulting in adverse tax consequences for U.S. holders.
• Potential for the company to be classified as a resident enterprise for PRC enterprise income tax purposes, leading to unfavorable tax consequences for the company and non-PRC shareholders.
• Uncertainty regarding the tradability and regulatory framework of carbon emission credits and RECs in China, and potential restrictions on cross-border trading.

Future Outlook

DeepGreenX intends to expand from a green logistics supply chain firm into an intelligent platform operating company, creating profitable recurring revenue streams by converting sustainability and other real-world asset data into digital currencies. The DXG RWA Factory platform is in early development and is not expected to be fully operational within the next 12 to 18 months. The company expects to generate revenue primarily from subscription and usage fees and digital asset trading revenue from the monetization of digital financial instruments. Future growth is dependent on successful platform deployment, customer acquisition, and securing additional capital.

Management Comments

• "Our long-term mission is to help accelerate world sustainability and digital capital innovation by making it easier for green-focused enterprises, sustainability projects, real-world asset projects, capital, and data to come together in a simple, repeatable, and profitable ecosystem."
• "We believe the incremental profitability produced by adding our services to sustainability projects may induce more capital sources to fund sustainability programs generally."
• "We believe the sum of all these activities may increase the overall economic attractiveness of sustainability initiatives, with the real economic returns on commercial capital deployed being redeployed into additional sustainability projects in the future."
• "While we are confident that our platform has the potential to simplify and automate the conversion of sustainability and RWA data into monetizable instruments, there is no guarantee that our expansion will be successful."
• "The expansion and success of our new platform will be dependent on our ability to generate future revenue from operations and sourcing additional outside investment, none of which are guaranteed."
• "Our model is primarily fee-based, driven by our platforms functionality and not linked to fluctuations in digital asset values. Therefore, even in the event of significant market volatility, we do not expect a material adverse impact on our fee revenue."

Industry Context

DeepGreenX is positioning itself at the intersection of three major global markets: energy, digitalization, and finance, aligning with the increasing global emphasis on sustainable development and digital transformation. The company aims to capitalize on the rapidly growing RWA tokenization market, projected to reach $16 trillion by 2030, by addressing inefficiencies in carbon credit and REC markets through its intelligent platform. This strategic pivot is in line with broader industry trends towards green economy and digital asset innovation, but also exposes the company to the inherent volatility and regulatory uncertainties of the nascent digital asset ecosystem.

Comparison to Industry Standards

• The company's valuation of its tokenization pipeline, ranging from $13.7 billion to $28.2 billion, was derived using a hybrid valuation framework including Discounted Cash Flow (DCF) analysis and Comparable Company Analysis (CCA).
• The CCA applied price-to-sales multiples from selected public market peers in digital asset, data-analytics, and tokenization businesses, including Palantir Technologies Inc. (P/S 39.20), C3.ai Inc. (P/S 12.20), Coinbase, Inc. (P/S 14.50), HIVE Blockchain Technologies Ltd. (P/S 3.27), Marathon Digital Holdings, Inc. (P/S 11.90), and Galaxy Digital Holdings, Ltd. (P/S 28.50). The average P/S ratio used for comparison was 16.78 (excluding highest and lowest values).
• The DCF analysis used a weighted-average cost of capital (WACC) of 18-22%, which is slightly higher than more mature enterprises, reflecting the early stage and unproven nature of the company's planned business and projected revenues.
• Unlike traditional underwritten initial public offerings, this direct listing lacks a book-building process and price stabilization activities, which is a significant deviation from standard market practices and may lead to higher price volatility.
• The company's reliance on related party financing and the 'going concern' opinion from its auditor (J&S Associate PLT) indicates a financial position that is weaker than established industry players, who typically have diversified funding sources and stronger financial health.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently a party to any material legal or administrative proceedings, except as disclosed in the Business Legal Proceedings section (which states no current or outstanding legal proceedings).

Related Party Transactions

• The company has outstanding consulting service fee receivables of $195,000 as of December 31, 2024, from Giga Carbon Neutrality Inc., an entity with the same ultimate beneficial owner (Ms. Lan Yang). These are non-interest bearing and repayable on demand, with intent to settle prior to listing.
• The company received loans to support business operations from Enlighta Medical Technology Group Limited (a subsidiary of Sun Seven Stars Investment Group, controlled by Ms. Lan Yang) totaling $483,842 as of December 31, 2024. These loans are non-interest bearing, non-secured, have no stated maturity date, and are payable on demand with discretion to delay repayment.
• The company received loans from Sun Seven Stars Investment Group (SSSIG) totaling $3,138,285 as of December 31, 2024. These loans are non-interest bearing, non-secured, have no stated maturity date, and are payable on demand with discretion to delay repayment.
• Non-trade reimbursements are due to related parties including PSI, Beijing Powermers Smart Technology Co. Ltd., and Tianjin Powermers Energy Technology Ltd., totaling $3,206 as of December 31, 2024.
• In August 2024, Beijing Deep Green Intelligent Technology Co., Ltd. disposed of its 100% equity interest in Fujian GCN IoT Ltd. to Beijing Powermers Smart Industries Technology Co., a wholly-owned subsidiary of the then-controlling shareholder, Powermers Smart Industries Inc. (PSI), as part of an internal reorganization plan.
• In May 2025, a group reorganization under common control occurred where all shareholders of DeepGreenX Korea (related parties) exchanged their equity interests for common stock of the Canadian holding company, making DeepGreenX Korea a wholly-owned subsidiary.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from future equity financing, potential volatility in share price due to direct listing structure (no book-building, no lock-ups), and limited protections due to 'controlled company' and 'foreign private issuer' status. Also exposed to potential loss of investment due to 'going concern' issues and PRC regulatory risks.
• **Employees:** The company expects to increase headcount for software development and expand commercial sales/service teams, potentially creating new job opportunities. Executive officers are expected to convert to full-time employee status post-listing.
• **Customers:** The company aims to provide new intelligent platform services for sustainability and real-world asset data monetization, potentially offering new profit centers and enhanced efficiency for customers in green logistics and other sectors. However, the platform is in early development, and success is not guaranteed.
• **Suppliers/Creditors:** The 'going concern' opinion and reliance on related-party financing may raise concerns for third-party suppliers and creditors regarding the company's long-term financial stability and ability to meet obligations.
• **Regulatory Authorities:** The company's operations in China and its pivot to digital assets subject it to evolving and uncertain regulatory frameworks in multiple jurisdictions (PRC, U.S., Canada, Korea), requiring continuous compliance efforts and posing risks of penalties for non-compliance.

Next Steps

• Complete the direct listing on Nasdaq, with common shares expected to begin trading on or about July [ ], 2025.
• Continue development and deployment of the DXG RWA Factory intelligent software platform, with full operation not expected for 12-18 months.
• Source third-party capital to fund business expansion, platform development, and sustainability projects of potential customers.
• Develop relationships and interfaces with global digital trading platforms (e.g., Binance, Coinbase, Bybit, OKX) and certification/standards-setting agencies (e.g., WSSO, CBDCCO, Climate Action Reserve).
• Finalize specific entity assignments and operational processes for the DXG RWA Factory as platform development progresses.
• Pursue customer acquisition activities in nature-based carbon capture, alternative energy solutions, green data and computing centers, and critical commodities/metals trading.
• Establish an Audit Committee prior to the direct listing, with plans to establish a compensation committee and a nomination and corporate governance committee within 12 months following the listing.
• Secure directors and officers liability insurance coverage for DeepGreenX Group Inc. prior to the effectiveness of the listing.

Key Dates

Recommendation

Keywords

Direct Listing, DeepGreenX, DXG RWA Factory, Tokenization, Real-World Assets, Sustainability, Green Logistics, Carbon Credits, Renewable Energy Certificates, Digital Assets, Nasdaq, SEC Filing, Financial Technology, China Operations, Corporate Governance, Risk Factors, Going Concern, AI Platform