F-1/A: Philippines Recycler One and one Green Tech Files for Nasdaq IPO

One and one Green Technologies. INC, a Philippine-based metal recycling company, filed an amended registration statement for its initial public offering of 2.5 million Class A Ordinary Shares on Nasdaq.

Summary

• One and one Green Technologies. INC (One and one Cayman) is a Cayman Islands holding company operating a waste materials and scrap metal recycling business in the Philippines through Variable Interest Entities (VIEs), Yoda Metal and DL Metal.
• The company is offering 2,500,000 Class A Ordinary Shares in its initial public offering (IPO), representing approximately 5.64% of Class A Ordinary Shares post-offering.
• The estimated initial public offering price per share will be between $4 and $6.
• The company plans to list its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol YDDL.
• For the fiscal year ended December 31, 2024, net revenue increased by 29.54% to $53,463,785 from $41,270,484 in 2023.
• Net income for FY2024 was $6,476,772, up from $5,567,174 in FY2023.
• Gross profit for FY2024 was $10,570,827 (19.77% margin), compared to $8,882,183 (21.52% margin) in FY2023.
• The company's annual processing capacity is estimated to be around 300,000 tons.
• Ms. Caifen Yan, Chairman of the Board and Director, will control approximately 91.75% of the aggregate voting power post-offering, making the company a 'controlled company' under Nasdaq rules.

Sentiment

Score: 7

Explanation: The company demonstrates strong revenue and net income growth, operates with environmentally friendly technology in a growing industry, and has clear expansion plans. However, significant risks related to its VIE structure, high customer/supplier concentration, lack of commercial insurance, and concentrated voting power temper the overall positive outlook.

Positives

• Significant revenue growth of 29.54% in FY2024, reaching $53,463,785.
• Net income increased to $6,476,772 in FY2024 from $5,567,174 in FY2023.
• Possesses environmentally friendly technology, including an exhaust gas recirculation system, which enhances efficiency and minimizes contamination.
• Fully authorized by the Philippine government to process hazardous wastes under The Basel Convention, holding all necessary permits (ECC, Permit to Operate, Discharge Permit, Import and Export Permit).
• Benefits from an experienced and visionary management team with extensive industry knowledge and networks.
• Operates in a resource recycling industry that exhibits counter-cyclical characteristics, showing resilience to economic downturns.
• Has established stable customer and supplier bases, with a network of over 60 suppliers.
• Plans to extend production capabilities by leveraging advanced separation technology to isolate precious metals from copper products, potentially increasing profit margins by 8% to 10%.
• Aims to reduce transportation costs by acquiring a bulk carrier terminal and setting up a new manufacturing facility nearby, projected to save approximately USD $5 million for every 100,000 tons of volume annually.

Negatives

• High supplier concentration, with 4 suppliers accounting for 45.7%, 12.6%, 10.7%, and 10.5% of total purchases in FY2024, and 3 suppliers accounting for 59.6%, 13.8%, and 11.6% in FY2023.
• Significant customer concentration, with 3 major customers accounting for 56.4%, 22.2%, and 17.43% of total revenue in FY2024, and 2 customers accounting for 52.4% and 21.4% in FY2023.
• Reliance on customers in China and Hong Kong exposes the company to significant geopolitical, regulatory, and economic risks.
• Does not currently maintain any commercial insurance coverage, exposing it to substantial financial liabilities from accidents, property damage, or legal claims.
• Operates through a Variable Interest Entity (VIE) structure, which may be less effective than direct ownership in providing operational control and is subject to Philippine legal system uncertainties.
• Ms. Caifen Yan, the Chairman, will control approximately 91.75% of the total voting power post-offering, concentrating control and potentially limiting minority shareholder influence.
• Gross margin slightly decreased to 19.77% in FY2024 from 21.52% in FY2023, mainly due to higher raw material purchase prices.
• Net cash provided by operating activities decreased to $2,009,738 in FY2024 from $4,060,835 in FY2023, mainly due to an increase in accounts receivable.

Risks

• Our Group does not have a long operating history as an integrated group.
• We have limited experience operating as a standalone public company.
• We may incur losses in the future.
• Our historical financial and operating results are not a guarantee of our future performance.
• We have a substantial supplier concentration with a limited number of suppliers accounting for a substantial portion of our total purchases. Changes or difficulties in our relationships with our suppliers and loss may harm our business and financial results.
• We are currently dependent on a small group of customers for most of our revenue and the loss of, or a significant reduction in purchases by, one or more of our principal customers could materially and adversely affect our business, financial condition, and results of operations.
• Our reliance on customers located in China and Hong Kong exposes us to significant geopolitical, regulatory, and economic risks that could adversely affect our business operations and financial performance.
• We may face operational, regulatory, and reputational risks related to environmental compliance, workplace safety, and the handling of waste materials.
• We do not have any commercial insurance coverage.
• We may be subject to litigation and regulatory investigations and proceedings and may not always be successful in defending ourselves against such claims or proceedings.
• Our future strategic acquisitions, investments and partnerships could pose various risks, increase our leverage, dilute existing shareholders and significantly impact our ability to expand our overall profitability.
• Any failure by the VIEs or their shareholders to perform their obligations under our Contractual Arrangements with them would have a material and adverse effect on our business.
• Our Executive Officers do not have any prior experience conducting an initial public offering and have limited experience with management of a public company.
• Any lack of requisite approvals, licenses or permits applicable to our business, or any non-compliance with relevant laws and regulations, may have a material and adverse effect on our business, financial condition, results of operations and prospects.
• Any adverse material changes to the Philippines market (whether localized or resulting from global economic or other conditions) such as the occurrence of an economic recession, pandemic or widespread outbreak of an infectious disease, could have a material adverse effect on our business, results of operations and financial condition.
• We may be affected by disruptions to our production.
• We may regularly encounter potential conflicts of interest, and our failure to identify and address such conflicts of interest could adversely affect our business.
• We may face political and social instability in the Philippines.
• Inflation in the Philippines could negatively affect our profitability and growth.
• We may face customs restrictions for the importation and exportation of metals.
• Our ability to source our products efficiently and cost-effectively could be negatively impacted if new trade restrictions are imposed, existing trade restrictions become more burdensome or relationships with exporters are impaired or terminated.
• It may be difficult for you to enforce any judgment obtained in the United States against us, our Directors, Executive Officers or our affiliates.
• Our corporate actions will be substantially controlled by Ms. Caifen Yan, the Chairman of the Board and Director of the Company, through One and one International Limited, which will have the ability to control or exert significant influence over important corporate matters that require approval of shareholders, which may deprive you of an opportunity to receive a premium for your ordinary shares and materially reduce the value of your investment. Additionally, we may be deemed to be a controlled company and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.
• We and our Hong Kong subsidiary rely on Contractual Arrangements with the VIEs and the VIEs shareholders to operate their business, which may not be as effective as direct ownership in providing operational control.
• Our Chairman of the Board and Director, Ms. Caifen Yan, has significant control over shareholder matters and the minority shareholder will have little or no control over our affairs.
• We are a foreign private issuer within the meaning of the rules under the Exchange Act, and, as such, we are exempt from certain provisions applicable to U.S. domestic public companies.
• As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
• We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
• There can be no assurance that we will not be a PFIC for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.
• An active trading market for our Class A Ordinary Shares may not develop and could affect the trading price of our Class A Ordinary Shares.
• Our share price may fluctuate significantly in the future and you may lose all or part of your investment, and litigation may be brought against us.
• Investors in our Class A Ordinary Shares likely will face immediate and substantial dilution in the net tangible book value per share and may experience future dilution.
• The dual class structure of our Class A Ordinary Shares has the effect of concentrating voting control with our Chair and Chief Executive Officer, and their interest may not be aligned with the interests of our other shareholders.
• Our Class A Ordinary Shares may trade under $5.00 per share and thus would be known as penny stock. Trading in penny stocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our Class A Ordinary Shares.
• We may not be able to pay dividends in the future.
• If we fail to meet applicable listing requirements, Nasdaq may delist our Class A Ordinary Shares from trading, in which case the liquidity and market price of our Class A Ordinary Shares could decline.
• We will incur significant expenses and devote other significant resources and management time as a result of being a public company, which may negatively impact our financial performance and could cause our results of operations and financial condition to suffer.
• If we fail to maintain an effective system of disclosure controls and internal controls over financial reporting, our ability to timely produce accurate financial statements or comply with applicable regulations could be impaired.
• We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• We have broad discretion in the use of the net proceeds from this Offering and may not use them effectively.

Future Outlook

The company plans to geographically expand into Southeast Asia and other international markets in 2025, establishing stable raw material sources from Japan and South Korea. It also expects to recruit an international business development team to strengthen capabilities across Europe, America, and Asia, with operations in Japan and Korea commencing next year via joint ventures, aiming for profitability in these markets within two years. Production capabilities will be enhanced by advancing separation technology to isolate precious metals from copper products, expected to increase profit margins by 8% to 10%. A new manufacturing facility near a bulk carrier terminal is planned within three years to reduce transportation costs by approximately $5 million per 100,000 tons annually, and this facility will also be used for lithium battery recycling.

Management Comments

• We believe that our proprietary technologies and research and development capabilities help us develop products to satisfy our customers and we can retain and develop business with existing customers and to attract new customers.
• We are committed to renovating our existing waste treatment technology in the industry in a cost-effective way for our customers.
• Our analysis of customer needs and product demand trends reveals a strong and stable demand for copper and aluminum recycling.
• The resource recycling industry exhibits counter-cyclical characteristics, showing resilience to economic recessions and fluctuations in demand.
• We are confident that our advanced technology, products and license advantages will position us as formidable competitors in various overseas markets.
• Asia market has great potential evidenced by fast industry growth and evolving regulation landscapes.
• We anticipate that our experience in building our business operation in the Philippines will serve as a solid foundation for our business expansion across Asia.
• We foresee significant opportunities growth in the lithium battery recycling market.

Industry Context

The company operates in the global metal waste recycling industry, specifically processing metal and hazardous wastes under the Basel Convention. This industry is experiencing growth, driven by rapid urbanization, increasing infrastructure development, and a growing awareness of sustainability. The market for recycled non-ferrous metals (aluminum, copper) was valued at over $150-$160 billion in 2024, with significant increases in scrap production for copper (41% increase from 2023 to 2024) and aluminum (13.7% increase). The Philippines scrap metal recycling market is projected to grow at a CAGR of 3.9% from 2020-2026, similar to the global region. The industry is fragmented, with many small players and larger enterprises gaining competitive advantages through scale and legal compliance. The company positions itself with environmentally friendly technology and government authorization for hazardous waste, differentiating it from many competitors who have limited processing capabilities for specific raw materials like e-waste. The growth in electric vehicle sales (17 million in 2024, 30% CAGR) is creating a significant future market for lithium battery recycling, which the company plans to enter.

Comparison to Industry Standards

• The company's exhaust gas recirculation system is highlighted as superior to 'competing technologies, such as table concentrators,' which 'cannot prevent pollution during the final stages of processing.'
• The company's production costs are 'on average lower than the cost associated with mining and processing' virgin materials.
• The Philippines' current recycling rate is 'lower than the average rate in the region, but it is expected to increase by 2050,' indicating growth potential for the company within its primary market.
• The industry is described as 'highly diversified and competitive, with many players,' but most small enterprises have 'weak technical, financial, and research capabilities,' suggesting the company's larger scale and legal compliance provide a competitive edge.

Management Changes

Corporate Governance

Legal Proceedings

• As of the date of this prospectus, neither the Company, its subsidiary, nor the VIEs have been involved in any legal or administrative litigation that may have a material adverse effect on the business, balance sheet, operating performance, and cash flow.
• The two VIEs registered under Philippine laws have complied with all applicable laws and regulations currently in force in all major aspects and have obtained all necessary licenses and approvals required for business operations in the Philippines from the relevant government departments.

Related Party Transactions

• Huajun Yan (Chief Operating Officer and Director) provided working capital advances to the company.
• Advances from Huajun Yan were $980,833 as of December 31, 2024, and $897,638 as of December 31, 2023. These advances are non-interest bearing and without maturity.
• The Audit Committee will be tasked with the review and approval of all related party transactions upon the effectiveness of the registration statement.

Stakeholder Impact

• Shareholders: Potential for dilution from the IPO, concentrated voting power with Ms. Caifen Yan, risks associated with the VIE structure, and potential for adverse U.S. federal income tax consequences if classified as a PFIC. However, the IPO provides an opportunity for public investment in a growing company with environmental technology.
• Employees: Workforce of 97 employees as of December 31, 2024, provided with fully paid social insurance (medical care, accident insurance). The company is committed to attracting, retaining, and developing staff.
• Customers: Company aims to strengthen customer partnerships and provide value-add products, expanding into new regions. Stable demand for copper and aluminum materials.
• Suppliers: Company relies on a limited number of waste exporters and commercial agents, with a substantial supplier concentration. Long-term contracts are typically for one year with automatic extensions.
• Creditors: The company currently has no interest-bearing debt. Creditors of the VIEs can only claim against the assets of the VIEs.

Next Steps

• Apply to list Class A Ordinary Shares on the Nasdaq Capital Market under the symbol YDDL.
• Complete the initial public offering (IPO) as soon as practicable after the registration statement becomes effective.
• Expand existing business by acquiring additional machinery and equipment (15% of net proceeds).
• Expand real estate portfolio through acquisition of additional land properties (5% of net proceeds).
• Construct a new manufacturing facility (15% of net proceeds).
• Utilize 65% of net proceeds for working capital and general corporate purposes.
• Extend production capabilities by advancing processing techniques to isolate precious metals from copper products.
• Strengthen customer and sales agent partnerships and expand into untapped regions in China.
• Develop overseas markets in Southeast Asia, Korea, Japan, Europe, and USA, including commencing operations in Japan and Korea by joint venture next year.
• Acquire a bulk carrier terminal and set up a new manufacturing facility near it to reduce transportation costs.
• Set up an additional processing center for lithium battery recycling within three years.
• Recruit an international business development team.
• Monitor legal proceedings and adjust accruals/disclosures as needed.
• Develop corporate policies and business practices to support ESG leadership.

Key Dates

Recommendation

While One and one Green Technologies demonstrates strong revenue and net income growth in the metal recycling sector, driven by environmentally friendly technology and strategic expansion plans, the investment carries substantial risks. The reliance on a Variable Interest Entity (VIE) structure in the Philippines introduces legal and operational uncertainties, and the high concentration of both suppliers and customers poses significant business continuity risks. The absence of commercial insurance coverage is a critical concern, exposing the company to potentially severe financial liabilities. Furthermore, the dual-class share structure and concentrated voting power with the Chairman limit minority shareholder influence. Given these inherent structural and operational risks, a seasoned investor would likely adopt a 'hold' stance, awaiting further operational maturity, risk mitigation strategies, and a clearer track record as a public company before considering a stronger position. The growth potential is notable, but the risk profile is elevated.

Keywords

Metal recycling, Waste management, Philippines, SEC filing, IPO, Nasdaq Capital Market, Environmental technology, Scrap metal, Electronic waste, Copper alloy, Aluminum alloy, VIE structure, Foreign private issuer, Emerging growth company, Caifen Yan, YDDL