F-1/A: DeepGreenX Targets Nasdaq Direct Listing, Shifts to RWA

DeepGreenX Group Inc. is pursuing a direct listing on Nasdaq, pivoting its business from green logistics to an intelligent platform for tokenizing sustainability and real-world asset data.

Summary

• DeepGreenX Group Inc. is a Canadian holding company transitioning its core business from green logistics to an AI-driven platform focused on tokenizing sustainability and real-world asset (RWA) data, aiming for a direct listing on the Nasdaq Global Market under the symbol DXG.
• The new business model, referred to as the 'DXG RWA Factory,' is in early stages of development and is expected to generate revenue primarily from subscription/usage fees and digital asset trading commissions, with commercial tokenization activities projected to begin in fiscal year 2025.
• A valuation report by Frost & Sullivan, dated July 12, 2025, estimates the fair market value of the company's tokenization pipeline to be between $13.686 billion and $28.246 billion as of December 31, 2024, based on projected future revenues.
• The company has a history of net losses, reporting $(2,453,422) in 2024 and $(96,698) in 2023, and an accumulated deficit of $(2,772,203) as of December 31, 2024.
• Operating activities have consistently resulted in negative cash flows, with $(2,195,962) used in 2024 and $(55,119) in 2023.
• The independent registered public accounting firm expressed 'substantial doubt' about the company's ability to continue as a going concern due to historical losses, accumulated deficit, and the need for additional capital.
• DeepGreenX is heavily reliant on related-party financing, having received an additional $10,264,185 in loans from Sun Seven Stars Investment Group (SSSIG), an affiliate, between January 1, 2025, and July 31, 2025, under a facility providing up to $75,000,000.
• The direct listing process differs from a traditional initial public offering (IPO) as there will be no book-building process, no price stabilization activities, and a significant portion of outstanding shares (714,338,756 out of 872,000,000) are not subject to contractual lock-up agreements, potentially leading to high price volatility and immediate sales pressure.
• A material risk exists regarding a potential Korean tax liability of up to approximately $5.167 billion if Korean tax authorities challenge the $602,000 valuation used for a May 2025 share exchange, contrasting it with the Frost & Sullivan valuation.

Sentiment

Score: 3

Explanation: Despite an ambitious pivot to RWA tokenization and a high projected valuation for this future business, the company's current financial position is precarious, marked by significant losses, negative cash flow, an accumulated deficit, and an auditor's 'going concern' warning. Its heavy reliance on related-party financing and the early, unproven nature of its core future revenue streams, coupled with substantial regulatory and market risks in the digital asset space, indicate a high-risk investment despite the long-term potential.

Positives

• The company is strategically pivoting towards the high-growth, high-margin Real-World Asset (RWA) tokenization market, which is projected to expand significantly.
• An independent valuation by Frost & Sullivan estimates the tokenization pipeline's fair market value between $13.686 billion and $28.246 billion, indicating substantial future potential.
• Discussions are underway with several entities in diverse sustainability sectors for customer acquisition, including nature-based carbon capture, alternative energy, and green data centers.
• A key tokenization milestone was successfully completed in a controlled environment for the Forest First Agreement on May 19, 2025, generating a token on the Avalanche blockchain.
• A loan facility of up to $75,000,000 from an affiliate (SSSIG) provides crucial liquidity and capital for business expansion and platform development.
• The company has assembled a management team with extensive experience in technology, finance, and blockchain, including individuals with track records in large-scale technology enterprises.
• Fourcore, Inc., an institutional investment advisor, has confirmed its authority to liquidate assets to fund future investments in the company by the controlling shareholder's affiliated entities, providing a strong backing for future capital needs.

Negatives

• The company has a history of significant net losses, including $(2,453,422) in 2024 and $(96,698) in 2023, and an accumulated deficit of $(2,772,203) as of December 31, 2024.
• Operating activities consistently resulted in negative cash flows, with $(2,195,962) used in 2024 and $(55,119) in 2023, indicating a reliance on external funding for operations.
• The independent registered public accounting firm included an explanatory paragraph in its audit opinion expressing 'substantial doubt' about the company's ability to continue as a going concern.
• No revenue has been generated from the new tokenization business to date, making its future profitability and success highly uncertain and dependent on successful execution of unproven initiatives.
• The company is substantially dependent on related-party loans for liquidity, which may limit financial flexibility and increase risk perception.
• A significant portion of outstanding common shares (714,338,756 out of 872,000,000) are not subject to contractual lock-up agreements, potentially leading to an oversupply and downward pressure on the stock price immediately after listing.
• A potential Korean tax liability of up to approximately $5.167 billion could arise if tax authorities challenge the valuation used for a subsidiary in a recent reorganization, posing a material adverse effect on financial position.
• The direct listing process lacks traditional book-building and price stabilization activities, which could result in higher volatility and rapid decline in the trading price of common shares upon listing.
• The company's core operations are planned to be based in China, exposing it to significant regulatory and political uncertainties, including potential government intervention and restrictions on capital transfers.

Risks

• The company is a growth stage company with a history of losses, negative cash flows from operating activities, and negative working capital.
• Significant additional capital will be required to support business growth, which may not be available on commercially reasonable terms or at all, potentially leading to dilution.
• Reliance on a single funding source (SSSIG) for liquidity; loss or reduction of this support could materially affect the business.
• The independent registered public accounting firm has expressed substantial doubt about the company's ability to continue as a going concern.
• Long-term results depend on the successful introduction and marketing of new products and services, which may expose the company to new and increased challenges and risks.
• The company may not succeed in growing its brand in markets outside China or other markets in which it currently operates, and negative publicity could harm its reputation.
• Breaches in data security, failure of information security systems, and privacy concerns could subject the company to penalties, damage its reputation, and adversely impact its business.
• Failure to manage future growth effectively could harm the business.
• Any decline in the value of carbon credits or carbon offsets could materially adversely affect the business due to market volatility and regulatory issues.
• Digital assets represent a new and rapidly evolving industry, and the value of common shares may depend on the acceptance of proposed digital asset products.
• The DXG RWA Factory platform may not be successful and may expose the company to legal, regulatory, and other risks, including the inability to adequately evaluate such risks.
• Recent developments in the digital asset economy have led to extreme volatility and disruption, loss of confidence, and market-wide declines in liquidity, which could materially adversely affect the value of common shares.
• Failure to maintain an effective system of internal control over financial reporting in the future may adversely affect investor confidence and could lead to delisting or sanctions.
• Reliance on third-party service providers for key aspects of the business; any failure could adversely impact operations and reputation.
• Research and development efforts may not yield expected results, leading to delays in product/service introduction or failure to meet customer demand.
• Historical results of operations are not indicative of future performance or prospects, especially with the expansion into a substantially different marketplace.
• Business depends on the continued efforts of personnel and the ability to recruit new talent; operations may be disrupted if services are lost.
• Exposure to risks associated with foreign exchange rate fluctuations and interest rate changes.
• Global operations expose the company to business and legal risks, including the complexity of foreign laws, enforcement uncertainties, and compliance with anti-corruption laws.
• Could be subject to significant penalties and liabilities if Korean tax authorities disagree with the valuation used for the share exchange in connection with the reorganization.
• The green industrial supply chain industry is in an early developmental stage and is subject to an uncertain and evolving regulatory regime; changes or non-compliance could harm the business.
• Policies and procedures for assessing whether digital assets are securities are internal and not binding on regulatory authorities; disagreement could lead to enforcement actions, penalties, or being deemed an unregistered investment company.
• Tokenization of certain green data real-world assets may subject the company to additional costly and difficult regulatory requirements.
• The DXG RWA Factory relies on blockchain technology, exposing the company to risks related to cybersecurity, malicious attack, and technological obsolescence.
• Misconduct by employees could expose the company to legal liabilities, reputational harm, and other damages.
• The company may from time to time be subject to claims, disputes, lawsuits, and other legal and administrative proceedings.
• Insurance coverage strategy may not be adequate to protect from all business risks.
• Increasing scrutiny and changing expectations from investors, customers, and employees with respect to ESG practices may impose additional costs or expose to new risks.
• Subject to anti-corruption, anti-bribery, anti-money laundering, financial, and economic sanctions laws; noncompliance can lead to severe penalties.
• The amended and restated bylaws provide that certain internal affairs actions must be litigated in Canada, which could limit the ability to obtain a favorable judicial forum for disputes.
• Inability to prevent others from unauthorized use of intellectual property could harm business and competitive position.
• May need to defend against patent, trademark, and/or other intellectual property right infringement claims, incurring substantial costs.
• Uncertainties with respect to the PRC legal system, including rapid changes in rules and regulations, could adversely affect the business.
• It may not be possible for investors to enforce U.S. judgments against PRC subsidiaries or directors/officers in China.
• The PRC government may intervene or influence operations at any time, or exert more control over overseas offerings and foreign investment in China-based issuers, potentially limiting the ability to offer securities or causing their value to decline.
• The approval or filing of the CSRC or other PRC regulatory agencies may be required to obtain listing status or conduct future offshore securities offerings, and failure to comply could lead to sanctions.
• The PRC government may disallow the holding company structure, which would likely result in a material change in operations and the value of securities.
• Recent greater oversight by the Cyberspace Administration of China (CAC) over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact the business.
• Legal risks exist with activities relating to Carbon Emission Credits and Renewable Energy Certificates (REC); Chinese regulatory authorities may restrict or prohibit trading of REC-based or carbon emission-based financial products.
• PRC regulations establish complex procedures for some acquisitions conducted by foreign investors, making it more difficult to pursue growth through acquisitions in China.
• PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent funding of PRC subsidiaries.
• Inflation in the PRC, or a slowing PRC economy, could negatively affect profitability and growth.
• Korean and PRC subsidiaries are subject to restrictions on paying dividends and making other payments.
• Governmental control of currency conversion may affect payment of any dividends or foreign currency denominated obligations.
• Fluctuation of the Renminbi may materially and adversely affect investment.
• PRC SAFE regulations regarding offshore financing activities by PRC residents have undergone changes which may increase administrative burden and create uncertainties.
• The PCAOB may determine that it is unable to inspect the auditor, which could result in the delisting of securities under the Holding Foreign Companies Accountable Act (HFCA Act).
• The HFCA Act may result in the delisting of securities and limit or restrict trading.
• Canadian law differs in some material respects from laws generally applicable to U.S. corporations and shareholders, affording less protection.
• Provisions of charter documents and certain Canadian legislation could delay or deter a change of control, limit attempts by shareholders to replace management, and affect the market price of common shares.
• The constating documents permit the issuance of an unlimited number of common shares, which could result in immediate dilution to existing shareholders.
• No intention to pay cash dividends on common shares for the foreseeable future.
• The company is a holding company, dependent upon distributions from subsidiaries to service debt and pay expenses.
• There is no assurance that the company will not be classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences.
• The company may be subject to additional tax liabilities in connection with operations or due to future legislation, including a global minimum tax.
• Increased costs will be incurred as a public company, particularly after ceasing to qualify as an emerging growth company.
• As a controlled company, the company may not have protections of certain corporate governance requirements otherwise required by Nasdaq.
• As a foreign private issuer, the company is exempt from certain provisions applicable to U.S. domestic public companies, resulting in less extensive and timely information.
• Loss of foreign private issuer status would require compliance with the Exchange Act's domestic reporting regime, incurring significant additional expenses.

Future Outlook

The company 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 real-world asset data into digital currencies. It expects revenue-generating tokenization activities to commence in fiscal year 2025, with a projected $541 million in tokenization revenue for that year, assuming successful execution and market adoption. The fully scaled 'DXG RWA Factory' platform is not anticipated to be operational within the next 12 to 18 months, with interim tokenized products being offered using a combination of manual and partially automated processes. The company plans to continue operating its legacy logistics business as a strategic component supporting data acquisition and customer engagement for the new platform.

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.
• We currently believe that the projected tokenization revenue of $541 million for the 2025 fiscal year is a reasonable estimate, assuming successful execution of our current business plans, continued market adoption of tokenized assets, and no material delays or regulatory impediments. Actual results may differ materially from these projections due to execution risks, regulatory delays, or customer adoption rates.
• We are not involved in handling crypto assets for third parties, nor do we expect to have exposure to customer funds in the future. Our model is primarily fee-based, driven by our platforms functionality and not linked to fluctuations in digital asset values.
• We do not expect a material adverse impact on our fee revenue even in the event of significant market volatility.
• We do not anticipate holding material assets that could be impacted by the bankruptcy of other market participants.
• We do not foresee any significant risks related to excessive or suspended redemptions or withdrawals, as we are not directly involved in managing client funds or acting as a custodian for digital assets.
• We also do not anticipate any unauthorized or impermissible access to our products and services in jurisdictions where such access is prohibited or restricted. We intend to fully comply with applicable laws and regulatory requirements in all jurisdictions where we operate, including the United States.
• Our company motto, 'Turning Green into Gold,' encapsulates our ambition to redefine sustainability by making it profitable and, therefore, inherently sustainable.

Industry Context

The company operates at the convergence of the energy, digitalization, and finance sectors, aligning with the increasing global focus on sustainable development and digital transformation. It aims to capitalize on the growing ESG investment trend, which has surpassed $30 trillion globally, and the rapidly expanding market for digitally converted assets, projected to reach $16 trillion by 2030. The company's strategy leverages blockchain technology to address inefficiencies in carbon credit and Renewable Energy Certificate (REC) markets by standardizing metrics and using AI for verification, aiming to enhance market confidence and liquidity. This approach positions the company to benefit from the broader industry shift towards tokenization of real-world assets, which seeks to modernize traditional financial structures by improving transaction efficiency, lowering investment thresholds, and increasing transparency.

Comparison to Industry Standards

• Frost & Sullivan's valuation of the company's tokenization pipeline utilized a hybrid framework, combining a Discounted Cash Flow (DCF) analysis with a Comparable Company Analysis.
• The Comparable Company Analysis applied price-to-sales multiples from selected public market peers in digital asset, data-analytics, and tokenization businesses, including Palantir Technologies, C3.ai, Coinbase, HIVE Blockchain, Marathon Digital, and Galaxy Digital.
• The average price-to-sales ratio (excluding the highest and lowest values) of these comparable companies was 16.8x, which was applied to the company's projected 2026 revenue, discounted back to January 1, 2025, using a 20% rate.
• The company states it is 'modeling our approach on successful institutional tokenization efforts (such as BlackRocks BUIDL fund) that are designed to appeal to traditional investors,' indicating an aspiration to meet high industry standards for institutional adoption.

Management Changes

Corporate Governance

Related Party Transactions

• Outstanding consulting service fee receivable of $195,039 as of December 31, 2024, from Giga Carbon Neutrality Inc., an entity with the same ultimate beneficial owner as the company. This is non-interest bearing and repayable on demand, with an intention to settle prior to listing.
• Non-trade reimbursement of $39 as of December 31, 2024, from Tianjin Powermers Technology Co., Ltd., a subsidiary of Powermers Smart Industries Inc. (PSI), which has the same ultimate beneficial owner as the company. This is repayable on demand.
• Loans from Enlighta Medical Technology Group (a subsidiary of SSSIG, 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 after January 1, 2027, with board discretion to delay repayment for up to one year (interest accrues at 1% per month after deferral).
• Loans from Sun Seven Stars Investment Group (SSSIG, controlled by Ms. Lan Yang) totaling $3,138,285 as of December 31, 2024. These loans have the same terms as the Enlighta Medical Technology Group loans.
• All previous related-party loans were consolidated into a single Loan Agreement on April 10, 2025, amended on August 3, 2025, providing for loans up to an aggregate of $75,000,000.
• Between January 1, 2025, and July 31, 2025, SSSIG increased its loans to the company by $10,264,185.
• An Asset Authority Confirmation Letter was received from Fourcore, Inc., an entity partially owned by Ms. Lan Yang's children and an affiliate, confirming its authority to liquidate assets to fund current or future investments in the company by Ms. Yang's affiliated entities.
• The company engaged Griffitts LLP, a law firm in which its Chief Legal Officer has an interest, for legal services, paying or accruing approximately $631,594 in fees through the date of the prospectus.
• 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.
• In May 2025, a group reorganization under common control occurred where the sole shareholder of DeepGreenX Korea exchanged its equity interests for common stock of the company, making DeepGreenX Korea a wholly-owned subsidiary.

Stakeholder Impact

• Shareholders face significant dilution risk from future equity offerings and potential volatility in share price due to the direct listing structure and the large number of shares not subject to lock-up agreements.
• Shareholders are exposed to the risk of total loss of investment given the auditor's 'going concern' opinion and the unproven nature of the new business model.
• Shareholders may experience adverse U.S. federal income tax consequences if the company is classified as a Passive Foreign Investment Company (PFIC) and adverse Canadian federal income tax consequences.
• Shareholders may have fewer corporate governance protections compared to companies subject to all Nasdaq rules due to the company's 'controlled company' status.
• Employees' job security and growth opportunities are tied to the successful execution of the new business strategy and the company's ability to secure sufficient capital.
• Customers may experience service disruptions or dissatisfaction if the new platforms fail to perform as desired or if the company's reliance on third-party vendors leads to issues.
• Suppliers face risks related to the company's financial stability and its ability to meet payment obligations, especially given the 'going concern' warning.
• Creditors, particularly related-party lenders, bear significant financial risk due to the company's accumulated losses and negative cash flows, with repayment terms potentially subject to board discretion.
• The company's ability to attract and retain key personnel is crucial for its success, and failure to do so could negatively impact operations.

Next Steps

• Complete the direct listing of common shares on the Nasdaq Global Market under the symbol DXG.
• Continue development and full deployment of the DXG RWA Factory intelligent software platform, which is not expected to be fully operational within the next 12 to 18 months.
• Begin revenue-generating tokenization activities in fiscal year 2025, with a projected $541 million in tokenization revenue for that year.
• Source new customers for the intelligent platform from existing green logistics contacts and new relationships in sustainability and RWA sectors.
• 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).
• Work with financial institutions to create new capital sources for traditional asset classes, sustainability initiatives, and other RWA projects.
• Finalize specific entity assignments and operational processes for the DXG RWA Factory.
• Continue iterative development of platform components, including data pipelines, token issuance mechanisms, and exchange integration.
• Actively evaluate and engage with third-party partners for blockchain infrastructure, tokenization engines, asset verification, and custody.
• Secure directors and officers liability insurance coverage for DeepGreenX Group Inc. prior to the effectiveness of the listing.
• Establish an Audit Committee prior to the consummation of the Direct Listing.
• Establish a compensation committee and a nomination and corporate governance committee within the first 12 months following the Direct Listing.
• Convert independent-contracted executive, operational, and administrative personnel to full-time employee status, with executive officers converting shortly after the Direct Listing.
• Propose an incentive compensation program for executive officers and key employees for adoption by the board of directors.
• Monitor and assess strategic risk exposure, including cybersecurity and data protection, with oversight from the board and Audit Committee.
• Settle outstanding related-party receivables from Giga Carbon Neutrality Inc. prior to the completion of the listing.
• Update foreign exchange filings and complete remedial processes with Korean authorities regarding past non-compliance.

Key Dates

Recommendation

Despite an ambitious pivot to RWA tokenization and a high projected valuation for this future business, the company's current financial position is extremely weak, marked by substantial accumulated losses, negative operating cash flows, and an auditor's 'going concern' warning. Its heavy reliance on related-party financing, coupled with the unproven nature of its new revenue streams and significant regulatory uncertainties in the digital asset space, presents an exceptionally high-risk profile. The potential multi-billion dollar Korean tax liability further exacerbates financial instability. The direct listing structure, lacking traditional price stabilization, adds to the volatility risk. Given these severe financial and operational challenges, a seasoned investor would likely recommend selling to avoid potential significant capital loss.

Keywords

DeepGreenX, Nasdaq, Direct Listing, RWA Tokenization, Sustainability, Green Logistics, Carbon Credits, Renewable Energy Certificates, Blockchain, AI, SEC Filing, F-1/A, Financial Technology, China Operations, Corporate Governance, Risk Management, Valuation, Controlled Company, Emerging Growth Company, Supply Chain, Digital Assets