Diginex Limited

Bollwerk AI Due Diligence Report on “Diginex Limited”

1. Entity map: what exactly is “Diginex Limited”?

1.1 Current listed vehicle

• Diginex Limited (DGNX) is a Cayman-incorporated holding company whose operating subsidiaries are in Hong Kong, the UK and the US, primarily via Diginex Solutions (HK) Limited (“DSL”).(streetinsider.com)
• Business: ESG/Sustainability RegTech – SaaS platforms for ESG reporting and supply-chain risk (diginexESG, diginexLUMEN, diginexGHG) plus advisory services.(globenewswire.com)
• IPO: January 22–23, 2025, 2.25m shares at $4.10 for ~$9.2m gross proceeds.(streetinsider.com)
• Post‑IPO shares: F‑1 shows ~23.19m shares outstanding immediately post-offering, before later stock-split/bonus issues.(streetinsider.com)

1.2 Legacy crypto business: Eqonex (formerly Diginex Limited)

• Diginex started life as a broader fintech/digital-asset group founded by Miles Pelham in 2017, including asset management, exchange, trading, Digivault custody, etc.(sec.gov)
• In 2020 it reverse-merged via SPAC 8i Enterprises onto Nasdaq, becoming Diginex Limited (Nasdaq: EQOS).(sec.gov)
• In mid‑2021, the group rebranded its crypto ecosystem under EQONEX; shareholders voted in Sept 2021 to change the corporate name to EQONEX Limited, keeping ticker EQOS.(prnewswire.com)
• Eqonex operated a spot/derivatives crypto exchange and related divisions (Digivault, Bletchley Park, lending, structured products).(coinmarketcap.com)
• The Eqonex exchange closed trading on 22 August 2022 and stopped withdrawals mid‑September, citing falling volumes and a “crowded” exchange space.(prnewswire.com)
• In November 2022 Eqonex filed for judicial management in Singapore (insolvency restructuring), and Nasdaq initiated delisting; Digivault commenced a voluntary wind-down.(sec.gov)
• Eqonex’s stock ultimately moved to OTC (EQOSQ) and became effectively worthless; Barchart cites annual net income about –$75m on $5.29m sales, with 1‑year return –97.7% and 3‑year return –99%.(barchart.com)

1.3 Carve‑out & new IPO

The present DGNX is essentially the ESG software arm carved out of the old group:

DGNX insists there is now no corporate cross-liability between it and Eqonex, stating that neither DSL nor Pelham’s vehicle Rhino Ventures “have any assets at risk” as a result of Eqonex’s judicial management/liquidation, and that no current officers/directors (except the CFO) have an existing relationship with Eqonex.(ir.diginex.com)

Red-flag takeaways:

2. Management & governance red flags

2.1 Founder / Chairman: Miles Pelham

• Position today: Chairman & Founder of DGNX; owns ~49% of the company through Rhino Ventures and related entities.(ir.diginex.com)
• Background: 21‑year investment banking veteran, former Global Head of Convertible Bonds at Mizuho; founded the original Diginex and later Eqonex; also former chairman of AIM‑listed Woodbois Limited (forestry); sole shareholder of Rhino Ventures Limited and former sole owner of Pelham Limited.(ir.diginex.com)
• Current holdings: MarketScreener estimates Pelham controls ~49.3% of Diginex (99.5m shares) as of Sept 29 2025.(marketscreener.com)

Controversial history / optics:

• Founder of Eqonex, which collapsed
• DGNX’s SEC filing openly states that Pelham “founded Eqonex Ltd, a financial services company dedicated to digital asset infrastructure”.(ir.diginex.com)
• Eqonex racked up cumulative operating losses of $67.2m, $64.6m and $42.5m in FY 2022, 2021 and 2020 on revenues of only $5.3m, $0.29m and $0.49m, according to its 20‑F.(sec.gov)
• Less than two years after rebranding and emphasising regulatory strength, Eqonex closed its exchange, entered judicial management and was delisted.(prnewswire.com)
• Highly promotional “$300m Abu Dhabi royal investment” that was quietly unwound
• In May 2025 Diginex announced that His Highness Shaikh Mohammed Bin Sultan Bin Hamdan Al Nahyan (Abu Dhabi royal family) had purchased warrants for 6.75m Diginex shares for $300m through Nomas Global Investments.(nasdaq.com)
• Crucially, those warrants were not sold by Diginex, but by Pelham’s Rhino Ventures Limited; Diginex would only receive ~$69.2m if the warrants were exercised.(nasdaq.com)
• Rhino confirmed receipt of an initial $50m consideration; the remaining $250m was due to Rhino by 31 Dec 2025.(ir.diginex.com)
• On 22 August 2025, Diginex disclosed in an SEC filing that the Nomas Warrants Purchase Agreement was rescinded by mutual agreement, the warrants were returned to Rhino, and the $50m promissory note was cancelled; Rhino again owns 100% of the IPO warrants.(ir.diginex.com)

Implications:

• Cross‑interests and concentration of control
• SEC filings show officers and directors collectively own around 70.8% of DGINEX shares as of Sept 1 2025, giving insiders effective voting control.(ir.diginex.com)
• No disclosed regulatory sanctions, but aggressive financial engineering across multiple vehicles
• Schedule 13D filings state that Pelham (and his vehicles Rhino BVI/Rhino Cayman) have not been convicted in criminal or securities civil proceedings in the last 5 years.(streetinsider.com)
• Nonetheless, the pattern – SPAC’ing a crypto group that later collapses in judicial management, now promoting a new ESG tech IPO with extreme valuation and complex warrant/royal-family optics – is a governance and judgement red flag, even if not illegal.

2.2 CFO: Paul Ewing – dual role with insolvent Eqonex

• DGNX lists Paul Ewing as Chief Financial Officer.(ir.diginex.com)
• He was also CFO and a director of the old Diginex/Eqonex crypto group. An Eqonex prospectus lists him as CFO and director alongside CEO Richard Byworth and Chairman Chi‑Won Yoon.(sec.gov)
• DGNX’s SEC filing explicitly states that Ewing “still sits on the board of certain subsidiaries of Eqonex Limited”, while all other DGNX officers and directors have no remaining relationship with Eqonex.(ir.diginex.com)

Implications:

2.3 Other key executives and governance

• CEO Mark Blick has been running the ESG software arm since 2020 and before that was Head of Distribution & Engagement at the earlier Diginex group.(ir.diginex.com)
• Board includes non‑executive directors such as Tomicah Tillemann‑Dick, Carnel Geddes, and Katerina Klezlova.(ir.diginex.com)
• DGNX is a foreign private issuer and an emerging growth company, and explicitly notes it can rely on reduced US reporting and governance requirements.(streetinsider.com)

Red flags:

3. Track record of the prior listed company (Eqonex): operational & legal overhang

Although Eqonex is legally separate today, its history is intrinsic to assessing DGNX’s risk culture.

3.1 Catastrophic economics at Eqonex

• Eqonex’s FY 2022 20‑F shows revenue of $5.29m and operating loss of $67.2m, following losses of $64.6m (FY21) and $42.5m (FY20). It also recorded a $13.9m impairment of intangible assets in 2022.(sec.gov)
• Intrinio’s standardized data similarly shows net income around –$75.8m on revenue of roughly –$75m (likely reflecting impairments and discontinued items).(data.intrinio.com)
• Barchart summarizes: annual sales $5.29m, annual net income –$75m, profit margin –1,417.8%, debt/equity 0.68, 1‑year total return –97.7%.(barchart.com)

Signal: management massively over‑promised versus its ability to build a sustainable business, burning capital at extraordinary negative margins.

3.2 Exchange closure & treatment of customers

• On 15 August 2022, Eqonex announced it would close its crypto exchange, giving clients one week to close positions and until 14 September to withdraw assets; EQO, the native token, ceased trading immediately and could not be withdrawn.(prnewswire.com)
• Coindesk reported Eqonex said the closure would “improve the company’s financial position” and cited extreme volatility and declining volumes; trading volumes had been falling sharply.(coindesk.com)
• A retrospective review by CAMLS.org notes that trading volume dropped by 53% from June to December 2021, that Eqonex never secured a full MAS license in Singapore (operating only under a temporary exemption), and that the exchange shut down with limited transparency on user funds. It quotes Traders Union later labeling Eqonex “fraudulent” in a 2025 review due to the sudden shutdown and lack of clear refund plan or detailed bankruptcy filings on user assets.(camls.org)

> This is an external characterization/allegation, not a court finding, but it underscores reputational risk.

3.3 Insolvency and Nasdaq delisting

• Eqonex applied in November 2022 to the High Court of Singapore for judicial management due to liquidity issues, and on 21 Nov 2022 Nasdaq notified the company its securities would be delisted due to this filing and prior price non‑compliance.(sec.gov)
• Interim judicial managers from Quantuma were appointed in December 2022.(marketscreener.com)

3.4 Regulatory concerns around the Binance/Bifinity deal

• In March 2022 Eqonex announced a strategic partnership with Bifinity UAB, a Binance‑affiliated payments company, including a $36m convertible loan and Bifinity’s right to appoint Eqonex’s CEO, CFO, Chief Legal Officer and two board members.(prnewswire.com)
• The UK Financial Conduct Authority (FCA) responded with a press release the same day, noting Eqonex is the parent of FCA‑registered Digivault and warning that Binance‑linked entities may have become beneficial owners of that regulated custodian. The FCA explicitly said it did not have powers to assess fitness and propriety of the new beneficial owners before the deal and reiterated its existing concerns over Binance.(fca.org.uk)

Signal: Eqonex invited Binance control into an FCA‑regulated entity in a way that triggered public regulatory concern.

3.5 Securities class action

• In April 2023, law firm Freedman Normand Friedland LLP filed a securities class action in SDNY against Eqonex, Binance Group, Bifinity UAB, “certain Eqonex officers and directors” and Binance’s CEO under Exchange Act §§10(b)/20(a) and Securities Act §§5/12(a)(1).(prnewswire.com)
• The complaint alleges that from March 7 2022 to Nov 29 2022 Eqonex and its partners made materially false/misleading statements and failed to disclose material adverse facts regarding the Bifinity partnership and unregistered EQO token.(prnewswire.com)

Relevance to DGNX:

4. Business model & product risk

4.1 What DGNX actually sells

Per its own filings and Morningstar:

Revenue breakdown FY 2025 (year ended 31 March):(ir.diginex.com)

Red flags on the business quality:

• Tiny scale relative to narrative and market cap
• TTM revenues are only ~$2.0m.(ir.diginex.com)
• Yet by late November 2025, DGNX’s market cap was reported at $2.16–2.34bn by Yahoo Finance.(finance.yahoo.com)

→ Implied Price/Sales (ttm) in the hundreds: Yahoo quotes P/S ~598–794x and EV/Sales ~864–1,150x depending on date.(finance.yahoo.com)

This is ultra‑extreme even for a hot SaaS IPO – and far higher than established ESG/RegTech names such as Workiva, which historically trade at single to low‑double‑digit EV/Sales.

• One‑off deals dominate revenue vs recurring SaaS
• The 57% FY25 revenue growth was driven predominantly by a single $0.9m license fee for white‑label distribution of diginexESG; excluding this, core subscription/license revenue stayed flat at ~$0.4m.(ir.diginex.com)
• Another “strategic agreement” with Indonesian tech firm iNEED includes $1.7m of upfront fees for delivering ESG reporting for rural banks.(stockwatch.com)

→ The headline growth is heavily dependent on lumpy licensing and upfront arrangements, not steadily compounding SaaS ARR. That is inherently lower quality and less predictable.

• Revenue still microscopic vs addressable market story
• Diginex’s own materials cite a sustainability RegTech market projected to grow from ~$20bn in 2025 to over $80bn by 2032.(app.researchpool.com)
• Yet after several years operating as DSL, revenues are still $2m with net loss $5.2m and negative operating cash flow –$7.7m.(ir.diginex.com)

This points to either:

• Extremely promotional partnership and alliance strategy

Diginex issues a high volume of partnership press releases relative to its size:

Against $2m revenue, the ratio of PR to demonstrable economic output looks high. That in itself is not proof of wrongdoing, but it is exactly the pattern we saw in the old Eqonex: lots of high‑gloss announcements, very poor unit economics.(digfingroup.com)

5. Financial profile & balance sheet

5.1 Income statement & cash flow

Key numbers from FY 2024–2025 combined statements:(streetinsider.com)

For years ended 31 March (USD):

Yahoo’s key stats summarise FY25 as revenue $2.04m, net income –$5.21m, EBITDA –$8.22m, gross margin effectively 100% (software/services), and operating margin –265%.(de.finance.yahoo.com)

Cash flow:

Red flag: structurally loss‑making with no clear operating leverage yet

5.2 Pre‑IPO balance sheet: deeply negative equity, going‑concern warning

DGNX’s F‑1 presents the following as of March 31, 2023–2024:(streetinsider.com)

The F‑1 explicitly states that:

Post‑IPO balance sheet “transformation”:

By March 31, 2025, Diginex claims a “transformed balance sheet”:(ir.diginex.com)

On Google Finance and Yahoo snapshots around late 2025:

So the IPO plus equitisation of insider funding did what it was meant to do: patch an insolvent balance sheet. But the operating business remains small and loss‑making.

5.3 Valuation: extreme multiples

As of late Nov–early Dec 2025:

By 11 December 2025, Marketscreener quotes the stock at $8.61, down ~15% over 5 days but still with a market cap around $1.7–2.0bn (depending on share count assumptions).(marketscreener.com)

Red flag: this is one of the most stretched fundamental valuations in global equities relative to current scale. ESG SaaS peers do not trade at 500–1,000x revenue with negative margins.

6. Capital structure dynamics, warrants, splits & acquisitions – potential dilution and story‑engineering

6.1 Warrant overhang and founder self‑dealing optics

From F‑1 and subsequent filings:(streetinsider.com)

Implications:

6.2 8‑for‑1 “bonus share” stock split

• On August 18 2025, Diginex announced an 8‑for‑1 forward stock split, paid via a “bonus share” issuance: shareholders of record 5 Sept 2025 receive 7 new shares per share on 8 Sept.(ir.diginex.com)

Interpretation:

6.3 Aggressive, highly dilutive acquisition MOUs

6.3.1 Matter DK ApS (ESG data, ~$13m)

• May 23 2025: Diginex signs MOU to acquire Copenhagen-based Matter DK ApS, an ESG data company whose largest shareholder is a Nasdaq subsidiary. Deal value: $13m, paid entirely in DGNX shares at the 60‑day VWAP as of 23 May; shares locked up 18 months.(diginex.com)
• A loan agreement saw Diginex advance €250k to Matter as bridge financing; repayable only if Diginex fails to close the acquisition for specified reasons.(ir.diginex.com)
• August 18 2025: Diginex signs a definitive agreement, valuing Matter’s equity at $13m, paid in shares at $83.77 per DGNX share; additional $2.5m of DGNX stock is to be granted to Matter management as retention incentives.(ir.diginex.com)

Given the pre‑split context, this is modest in size relative to DGNX’s market cap and appears industrially sensible (expanding ESG data capabilities). The main red flags are:

6.3.2 Resulticks (AI marketing; MOU for $2bn)

Far more concerning is the Resulticks deal:

Issues:

• Size vs DGNX
• At the time, DGNX’s own market cap was in the low single‑digit billions; acquiring a $2bn private company largely in stock doubles or more the effective enterprise value.(google.com)
• The implied issuance of ≈19.4m DGNX shares ($1.4bn ÷ $72) at closing (pre‑split) is close to DGNX’s entire existing share count at IPO (23.2m), i.e., near‑100% dilution before earn‑out.(streetinsider.com)
• Aggressive valuation & financing assumptions
• No public financials for Resulticks are disclosed to justify a $2bn price; the entire argument is about “transforming AI and data capabilities.”(ir.diginex.com)
• Diginex will need to raise or internally generate $100m cash within 90 business days of closing – a huge sum relative to its current revenues and cash (~$3m).(ir.diginex.com)
• Execution status unclear as of Dec 2025
• An August 14 2025 update only extended the Resulticks MOU due-diligence deadline to 31 August 2025, noting “most material due diligence” was complete and parties needed more time for a definitive agreement.(diginex.com)
• As of December 11 2025 there is no public announcement of a signed definitive merger agreement or closing; press continues to refer to Resulticks as MOU‑stage.(abnewswire.com)

Interpretation:

6.4 GCC / ADX dual‑listing & capital‑raise narrative

• March 17 2025: Diginex signs MOUs with Nomas Global and others for a planned dual listing on Abu Dhabi Securities Exchange (ADX) and a potential $250m capital raise from GCC institutions.(sa.marketscreener.com)
• August 25 2025: Diginex provides an update saying numerous meetings have been held in UAE, but the dual‑listing now appears likely to take “a few more months if not longer” to complete.(ad-hoc-news.de)

Combined with the now‑rescinded Nomas warrants deal, there is a pattern of large, UAE‑linked capital narratives that have yet to translate into confirmed long‑term funding at the company level (as opposed to Pelham personally).

7. Legal, regulatory & structural risk at DGNX itself

7.1 Operating structure

• DGNX is a Cayman Islands exempted company; operations run through subsidiaries in Hong Kong, UK, US, and now Denmark (via Matter acquisition).(streetinsider.com)
• It explicitly warns that it is not a Chinese operating company but a holding company – standard language but underscores structural complexity.(streetinsider.com)

7.2 Risk factors disclosed by the company

In its F‑1 and subsequent SEC filings, Diginex itself flags:

Material legal proceedings:

But there is clear disclosure that:

Red-flag assessment:

8. Market behaviour, shareholder base & technicals

8.1 Price action & returns

• By early March 2025, HK media highlighted Diginex as “one of Nasdaq’s best‑performing IPOs of the past decade”, with the stock trading up from $4.10 to ~$82.51 within ~6 weeks (before later split/bonus adjustments), implying potential peak gains of 19x for early investors.(hkej.com)
• After the 8‑for‑1 bonus share issuance, split‑adjusted prices have been far lower (~$8–12 range into December 2025), but trailing 1‑year total return is still reported around +1,500–1,900% on Yahoo and StatMuse.(statmuse.com)

The stock is thus a hyper‑multi‑bagger in a very short time, with the usual hallmarks of:

8.2 Ownership & index inclusion

• Morningstar’s AU site notes DGNX and provides basic profile; as of June 26 2025, DGNX was added to the S&P Global Broad Market Index (BMI).(morningstar.com.au)
• That index inclusion likely forced passive and benchmarked active funds to take small positions, despite the tiny fundamentals.

Signal for a short:

9. Macro & competition

9.1 Macro tailwinds vs bubble risk in ESG/RegTech

• ESG data, reporting and climate‑disclosure requirements are clearly growing; Diginex itself cites projections of sustainability RegTech rising from ~$20bn (2025) to >$80bn by 2032.(app.researchpool.com)
• At the same time, there is a backlash and commoditisation risk: dozens of vendors (Workiva, OneTrust, Persefoni, Sphera, etc.) compete in ESG reporting; large ERP and financial‑reporting software firms are integrating ESG modules directly. Diginex acknowledges that many financial-reporting software vendors are rapidly integrating ESG into their core suites.(streetinsider.com)

Red flag: Diginex’s valuation seems to assume it will be a winner‑take‑most in this global market, with its AI/bloc­kchain features forming a unique moat. But its current revenue and client base are far too small to support that narrative with certainty.

10. Consolidated red-flag checklist (short thesis framing)

Here’s a structured list of issues that a short seller could lean on:

10.1 People & governance

• Founder track record:
• Founded Eqonex, which destroyed >95% of shareholder value, closed its exchange, entered judicial management and was delisted after repeated large operating losses.(sec.gov)
• New DGNX is effectively a second public spin from the same entrepreneurial ecosystem.
• CFO dual roles: DGNX CFO still sits on boards of Eqonex subsidiaries under judicial management – ongoing entanglement with a failed crypto group.(ir.diginex.com)
• Insider control: Insiders control ~70% of voting power; Pelham personally owns ~49% via Rhino, plus warrants.(marketscreener.com)
• Foreign private issuer status & early stage: Lower disclosure standards; heavy reliance on founder loans historically.(streetinsider.com)

10.2 Financials & valuation

• Microscopic revenue base – $2.0m FY25; TTM ~2.04m.(ir.diginex.com)
• Persistent large losses – net loss –$5.2m FY25, –$4.9m FY24; EBITDA –$8.2m; operating margins ~–265%.(ir.diginex.com)
• Going‑concern history – auditors flagged doubt pre‑IPO; balance sheet was deeply negative before recapitalisation.(streetinsider.com)
• Extreme valuation – current P/S 600–800x, P/B 400–500x, EV/Sales ~864–1150x, far above any reasonable peer.(finance.yahoo.com)

10.3 Business quality

• Revenue quality questionable – topline driven by a handful of one‑off deals and upfront license fees (e.g., $0.9m white‑label license, $1.7m from iNEED) rather than a large, growing subscription base.(ir.diginex.com)
• Over‑reliance on PR and partnerships – numerous alliances (Forvis Mazars, Russell Bedford, Baker Tilly, AIKYA, BlockRidge, Allocations, etc.) without commensurate revenue scale.(diginex.com)
• Re‑entry into digital assets (via BlockRidge) despite Eqonex’s failure – Diginex is now moving into digital‑asset sustainability verification, a sector adjacent to the same crypto ecosystem that previously burned shareholders.(globenewswire.com)

10.4 Capital structure & deal‑making

• Warrant games & rescinded royal deal –
• $300m Nomas warrant purchase from Pelham’s vehicle trumpeted as a massive “investment” in Diginex;
• deal rescinded a few months later;
• Pelham retains warrants; Diginex never saw $300m, only potential future exercise proceeds; rescission disclosed quietly via SEC.(nasdaq.com)
• $2bn Resulticks MOU – huge, still‑uncertain stock‑and‑cash acquisition that could double share count and requires $100m cash from a $2m‑revenue, loss‑making company.(ir.diginex.com)
• Aggressive stock split / bonus share in the midst of a speculative run‑up – typical of companies leaning into momentum rather than grounding expectations.(ir.diginex.com)

10.5 Legacy overhang from Eqonex

• Regulatory concerns – FCA statement flagging Binance/Bifinity control of Digivault via Eqonex partnership; potential for revocation of registrations in crypto lines.(fca.org.uk)
• Securities class action – FNF LLP class action vs Eqonex, Binance, Bifinity and certain officers/directors for alleged 10b‑5 and Securities Act violations relating to the Bifinity partnership and EQO tokens.(prnewswire.com)
• User‑trust questions – CAMLS/Traders Union calling Eqonex “fraudulent” in hindsight for its abrupt exchange shutdown and lack of clear user-asset disclosures (again, an allegation, not adjudicated).(camls.org)

11. What could go right (risks to a short)

It’s important to acknowledge upside risks:

12. Summary

From a risk perspective, Diginex Limited (DGNX) exhibits a convergence of classic red flags:

• Leadership continuity from a failed, heavily loss‑making prior listed vehicle (Eqonex) that ended in judicial management, delisting, regulatory concern and litigation.(sec.gov)
• A current business whose scale (≈$2m revenue, ≈$5m annual loss) is wildly out of line with its fully‑diluted market value ($1.7–3.8bn), producing P/S of ~600–800x and P/B >400x.(ir.diginex.com)
• Heavy reliance on story‑driving announcements (royal‑family deals, massive AI acquisitions, dual listings, AI/RegTech buzz) that, in key instances (Nomas $300m warrants, Resulticks $2bn MOU), remain non‑consummated or have been quietly reversed.(nasdaq.com)
• Governance structure dominated by a single founder with a prior record of extremely poor public equity outcomes, and a CFO concurrently sitting on the board of insolvent Eqonex subsidiaries.(ir.diginex.com)
• Revenue quality skewed to lumpy, one‑off licensing and upfront deals rather than a proven, scaling SaaS ARR engine – making the current valuation highly sensitive to any slowdown or failure of marquee partnerships.(ir.diginex.com)