F-1/A: Roze AI Files for Nasdaq Direct Listing

Roze AI Inc. has filed an amended F-1 registration statement detailing its plan for a direct listing on the Nasdaq Capital Market, aiming to list under the ticker RZAI.

Summary

• Roze AI Inc. is seeking to list its common shares on the Nasdaq Capital Market via a direct listing.
• The filing details the resale of up to 18,138,565 common shares by existing shareholders.
• The company specializes in AI-driven disaster prevention technology, with its core product being the Disaster AI Platform (DAP).
• Roze AI Korea Co., Ltd., a South Korean subsidiary, conducts the company's operations.
• The company has experienced significant revenue decreases in 2025 and has a history of operating losses, raising substantial doubt about its ability to continue as a going concern.
• Young Jin Cho, the CEO, will maintain a controlling stake in the company post-listing, holding 61% of the total voting power.
• The company plans to develop a System on Chip (SoC) for disaster prevention, with commercialization not expected before 2027.
• The direct listing process differs from a traditional IPO, potentially leading to increased share price volatility.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the company's significant operating losses, substantial doubt about its ability to continue as a going concern, and the inherent risks associated with a direct listing process.

Positives

• Roze AI has a proprietary AI technology platform (DAP) for disaster prevention, installed in major government and military facilities in Korea.
• The company has secured patents for its AI wireless fire detection, prevention, suppression, and alert transmission system in the US, Korea, and other countries.
• The company has a clear growth strategy focused on platforming its fire and disaster business ecosystem and expanding into global markets, particularly North America.
• The company has a dedicated Project Management Office (PMO) and a network of pre-certified installation partners to manage large-scale projects.
• The company has a roadmap for developing an AI ASIC Chip (SoC) for enhanced disaster prevention capabilities.
• The company has a diversified customer base, with no single customer representing a significant portion of its contracted backlog.

Negatives

• The company incurred a net loss of $6,030,257 in 2025, compared to $1,444,257 in 2024, and has an accumulated deficit of $16,754,384.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• Revenue decreased significantly in 2025 to $2,295,237 from $8,225,475 in 2024, primarily due to macroeconomic uncertainties and a slowdown in the South Korean construction sector.
• The company will be a controlled company, with the CEO holding 61% of the total voting power post-listing, potentially limiting minority shareholder influence.
• The direct listing process, unlike a firm-commitment underwritten IPO, may lead to greater share price volatility and less predictable price discovery.
• The company's SoC development is not expected to generate material revenue within the next 12 months and is estimated to require $9 million in funding.
• The company has a history of operating losses and expects to continue incurring significant expenses in the foreseeable future.
• The company's reliance on project financing for its large-scale projects introduces significant risk, as delays or cancellations due to financing issues could materially affect revenue.

Risks

• The company's operating results are likely to vary significantly and be unpredictable due to various market and economic factors.
• There is substantial doubt about the company's ability to continue as a going concern, dependent on obtaining additional financing.
• The company's revenue and project pipeline may be materially and adversely affected by macroeconomic uncertainties and a slowdown in the construction sector.
• The direct listing process may result in a more volatile trading price for the common shares compared to a firm-commitment underwritten IPO.
• The company will be a controlled company, potentially limiting shareholder protections related to corporate governance.
• The company's ability to manage its expansion of operations effectively is uncertain.
• A security breach or other significant disruption of the company's IT systems could negatively impact operations and results.
• The company may not accurately forecast customer demand, leading to unsold inventory and lower revenues.

Future Outlook

The company expects a gradual recovery in Average Order Value (AOV) starting in the second and third quarters of 2026 as deferred projects resume. However, the outlook is heavily dependent on securing project financing and navigating macroeconomic uncertainties in the South Korean construction sector. The company anticipates needing additional financing to sustain operations and fund its business plan.

Management Comments

• The company expects previously secured backlog projects, which experienced temporary delays in commencement and milestone progression, to resume beginning in the second and third quarters of 2026.
• The company plans to develop an SoC (System on Chip) that can transmit, receive, and process fire and disaster information in real time.
• The company intends to take advantage of reduced reporting requirements and exemptions available to emerging growth companies.
• The company intends to retain most, if not all, of its available funds and any future earnings to fund the operation, development, and growth of its business, and does not expect to pay any dividends on its Common Shares in the foreseeable future.

Industry Context

StockSavvy.ai notes that Roze AI operates in the growing global fire safety equipment market, which is projected for continued growth driven by technological advancements, stringent safety regulations, and increasing adoption of wireless and AI technology. However, the company faces intense competition from established players like Honeywell and Siemens, and its reliance on the cyclical construction market, particularly in South Korea, presents a significant challenge.

Comparison to Industry Standards

• The global fire safety equipment market was valued at approximately $49.82 billion in 2022 and is projected to grow at a CAGR of 6.4% from 2023 to 2030 (Grand View Research). Roze AI's revenue of $2.3 million in 2025 is a small fraction of this market.
• The fire detection equipment market alone was valued at $8.09 billion in 2024 and is projected to reach $11.92 billion by 2029 (The Business Research Company). Roze AI's revenue is significantly lower than the market size.
• Competitors like Johnson Controls, Honeywell, and Siemens are large conglomerates with extensive resources, brand recognition, and longer operating histories, setting a high bar for market penetration and growth.
• The company's transition to integrated AI-based disaster prevention platforms aligns with industry trends towards smart, connected safety solutions, but its current scale is much smaller than industry leaders.

Corporate Governance

Related Party Transactions

• Issuance of 1,000,000 Common Shares to CEO Young Jin Cho as consulting fees.
• Issuance of 61,000,000 Class A Preferred Shares to CEO Young Jin Cho.
• Loan receivable from CFO Seon Ho Lee of $69,226 as of December 31, 2025.
• Loan payable to CEO Young Jin Cho of $358,706 as of December 31, 2025.
• Trade and other payables to CEO Young Jin Cho ($10,364), COO Seog Hun Cho ($9,159), CFO Seon Ho Lee ($9,077), and CTO O Jang Jeong ($8,066) as of December 31, 2025.

Stakeholder Impact

• Shareholders may experience increased share price volatility due to the direct listing process and the company's financial condition.
• Minority shareholders may have limited influence on corporate governance decisions due to the CEO's controlling voting power.
• Investors face significant risks, including the potential loss of their entire investment, given the company's going concern issues and history of losses.
• Employees' job security could be impacted by the company's financial performance and ability to secure future funding.

Next Steps

• Obtain Nasdaq listing approval.
• Complete the private placement of Class C Preferred Shares.
• Issue common shares to the CEO upon listing and private placement closing.
• File a resale registration statement for advisory stock and common shares underlying Class C Preferred Shares within 10 days of Nasdaq listing.
• Begin commercialization of the SoC, not expected before 2027.

Key Dates

Recommendation

While Roze AI's technology in disaster prevention is innovative and addresses a critical market need, the company's significant financial challenges, including substantial operating losses and going concern issues, coupled with the inherent risks of a direct listing and a controlled company structure, warrant a cautious approach. The potential for recovery exists if project financing materializes and the company can execute its growth strategy, but the immediate risks outweigh the potential for significant upside in the short term. Therefore, a 'hold' recommendation is appropriate, pending further clarity on financial stability and market reception post-listing.

Keywords

Roze AI, Direct Listing, Nasdaq, Disaster Prevention Technology, AI Platform, Digital Twin, Fire Safety, F-1 Filing