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1、F-1 1 ff12023_ddcenterprise.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commission on June 15,2023.Registration Statement No.333-UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_Form F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933_DDC Enterprise Li

2、mited(Exact name of Registrant as specified in its charter)_Not Applicable(Translation of Registrants name into English)_Cayman Islands 2000 Not Applicable(State or otherjurisdiction ofincorporation ororganization)(Primary StandardIndustrialClassification Code Number)(I.R.S.EmployerIdentification Nu

3、mber)Room1601-1602,16/F,Hollywood Centre233 Hollywood RoadSheung Wan,HongKongTelephone:+852-2803-0688(Address,including zip code,and telephone number,including area code,ofRegistrants principal executive offices)_Cogency Global Inc.122 East 42nd Street,18th FloorNewYork,NY10168+1-800-221-0102(Name,a

4、ddress,including zip code,and telephone number,including area code,ofagent for service)_Copies of all communications,including communications sent to agent forservice,should be sent to:Lawrence S.Venick,Esq.Loeb&Loeb LLP2206-19 Jardine House1 Connaught Place,CentralHongKong SARTelephone:+852-3923-11

5、11 Stephanie Tang,Esq.Hogan Lovells11th Floor,One Pacific Place88 Queensway RoadHongKong SARTelephone:+852-2219-0888_Approximate date of commencement of proposed sale to public:As soon as practicableafter this Registration Statement becomes effective.If any of the securities being registered on this

6、 form are to be offered on a delayed orcontinuous basis pursuant to Rule415 under the Securities Actof1933,as amended,check thefollowing box.If this Form is filed to register additional securities for an offering pursuant toRule 462(b)under the Securities Act,check the following box and list the Sec

7、urities Actregistration statement number of the earlier effective registration statement for the sameoffering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under theSecurities Act,check the following box and list the Securities Act registration statement number ofthe earlie

8、r effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under theSecurities Act,check the following box and list the Securities Act registration statement number ofthe earlier effective registration statement for the same offer

9、ing.Indicate by check mark whether the registrant is an emerging growth company as defined inRule405 of the Securities Act:Emerging growthcompany If an emerging growth company that prepares its financial statements in accordance withU.S.GAAP,indicate by check mark if the registrant has elected not t

10、o use the extended transitionperiod for complying with any new or revised financial accounting standards provided pursuant toSection7(a)(2)(B)of the Securities Act.The Registrant hereby amends this Registration Statement on such date or dates asmay be necessary to delay its effective date until the

11、Registrant shall file afurther amendment which specifically states that this registration statement shallthereafter become effective in accordance with Section 8(a)of the SecuritiesActof1933,as amended,or until the registration statement shall become effectiveon such date as the Commission,acting pu

12、rsuant to such Section8(a),may determine._The term“new or revised financial accounting standard”refers to any update issued by theFinancial Accounting Standards Board to its Accounting Standards Codification after April5,2012.Table of ContentsThe information in this preliminary prospectus is not com

13、plete and may be changed.Wemay not sell these securities until the registration statement filed with theSecurities and Exchange Commission is effective.This preliminary prospectus is notan offer to sell these securities and we are not soliciting offers to buy thesesecurities in any jurisdiction wher

14、e the offer or sale is not permitted.PRELIMINARY PROSPECTUS(SUBJECT TO COMPLETION)DATED JUNE 15,2023Class A Ordinary SharesDDC Enterprise LimitedThis is the initial public offering of our Class A ordinary shares(“Class A OrdinaryShares”).We are offering of our Class A Ordinary Shares,par value$persh

15、are,on a firm commitment basis.The estimated initial public offering price is expected to be$per share.Currently,no public market exists for our Class A Ordinary Shares.Wehave applied to list our Class A Ordinary Shares on the NYSE Group,or NYSE,under the symbol“”.We cannot guarantee that we will be

16、 successful in listing our Class A Ordinary Shares on theNYSE Group;however,we will not complete this offering unless we are so listed.We are both an“emerging growth company”and a“foreign private issuer”asdefined under the U.S.federal securities laws and,as such,may elect to complywith certain reduc

17、ed public company reporting requirements for this and futurefilings.See“Prospectus Summary Implications of Being an Emerging GrowthCompany and a Foreign Private Issuer”for additional information.Investors arecautioned that you are buying shares of a shell company issuer incorporated in theCayman Isl

18、ands with operating subsidiaries in China and Hong Kong,investors willnot hold direct equity investments in our China and HongKong operatingsubsidiaries.Our Class A ordinary shares offered in this prospectus are shares ofour Cayman Islands holding company.See“Risk Factors Risks Related to DoingBusin

19、ess in China and Hong Kong Changes in Chinas economic,political or socialconditions or government policies could have a material adverse effect on ourCompanys business and results of operations we may pursue in the future;Uncertainties with respect to the PRC legal system,including uncertainties reg

20、ardingthe enforcement of laws,and sudden or unexpected changes in laws and regulations inChina could adversely affect us;and The Hong Kong legal system embodiesuncertainties which could limit the legal protections available to us.”We will not be a“controlled company”under the New York Stock Exchange

21、 ListedCompany Manual post public offering.Investing in our Class A Ordinary Shares is highly speculative and involves asignificant degree of risk.Our Class A ordinary shares offered in this prospectusare shares of our Cayman Islands holding company.Although“we,”“us,”“our,”“our Group,”“the Group”or“

22、our company”refer to DDC Enterprise Limited andits subsidiaries and the VIEs as a whole for ease of reference and discussion,investors should be aware that DDC Cayman and its subsidiaries do not have directownership in the VIEs,but rather exert control over and receive economic benefitsfrom the VIEs

23、 through various contractual arrangements.In this prospectus wherebusiness activities or functions of the VIEs are described,specific references willbe made to the relevant VIEs.We currently conduct our business through ShanghaiDayDayCook Information Technology Co.,Ltd,or SH DDC,Shanghai Lashu Impor

24、t andExport Trading Co.,Ltd.,or SH Lashu,and Lins Group Limited,each an indirectwholly owned subsidiary of DDC Cayman,and a number of operating subsidiaries non-wholly and wholly owned by SH DDC.All of these operating subsidiaries areestablished under the laws of the PRC.During the two years ended D

25、ecember 31,2021and 2022,we had conducted part of our operations in China through(1)contractualarrangements with two variable interest entities and their consolidated entities(the“Weishi and City Modern VIEs”),namely,Shanghai Weishi Information Technology Co.,Ltd.,Shanghai City Modern Agriculture Dev

26、elopment Co.,Ltd.,Shanghai City VegetableProduction and Distribution Co-op,Shanghai Jiapin Vegetable Planting Co-op,ShanghaiJiapin Ecological Agriculture Co-op,and(2)the Megnwei VIE.Through suchcontractual arrangements,we,through our indirect wholly-owned PRC subsidiary SHDDC,control and receive the

27、 economic benefits of the Weishi and City Modern VIEswithout owning any direct equity interest in them.As of April 2022,such contractualarrangements with the Weishi and City Modern VIEs were terminated.However,as at thedate of this prospectus,we still have contractual arrangements with ChongqingMeng

28、wei Technology Co.,Ltd.,Liao Xuefeng,Chongqing Changshou District WeibangNetwork Co.,Ltd.and Chongqing Yizhichan Snack Food Electronic Commerce ServiceDepartment to enable us to have the ability to control a number of online storespurchased from them since the titles of such online stores cannot be

29、transferred tous due to the limitations from the policies of certain online platforms.These onlinestores are considered VIEs and SH DDC is the primary beneficiary.We refer to theseonline stores the“Mengwei VIE”throughout this prospectus.Recent statements by the Chinese government have indicated an i

30、ntent to exertmore oversight and control over offerings that are conducted overseas and/or foreigninvestments in China based issuers.Any future action by the Chinese governmentexpanding the categories of industries and companies whose foreign securitiesofferings are subject to government review coul

31、d significantly limit or completelyhinder our ability to offer or continue to offer securities to investors and couldcause the value of such securities to significantly decline or be worthless.Recently,the PRC government initiated a series of regulatory actions and made anumber of public statements

32、on the regulation of business operations in China withlittle advance notice,including cracking down on illegal activities in thesecurities market,enhancing supervision over China-based companies listed overseasusing a variable interest entity structure,adopting new measures to extend the scopeof cyb

33、ersecurity reviews,and expanding efforts in anti-monopoly enforcement.Asthere remains significant uncertainty in the interpretation and enforcement ofrelevant PRC cybersecurity laws and regulations,we cannot assure you that we wouldnot be subject to cybersecurity review or investigations launched by

34、 PRC regulators.On December 28,2021,the Cyberspace Administration of China(the“CAC”),and 12other relevant PRC government authorities published the amended Cybersecurity ReviewMeasures,which came into effect on February 15,2022.The final Cybersecurity ReviewMeasures provide that a“network platform op

35、erator”that possesses personalinformation of more than one million users and seeks a listing in a foreign countrymust apply for a cybersecurity review.Further,the relevant PRC governmentalauthorities may initiate a cybersecurity review against any company if they determinecertain network products,se

36、rvices or data processing activities of such companyaffect or may affect national security.Through the contractual arrangements withWeishi,DDC SH had collected and possessed personal information of more than onemillion users.After the contractual arrangements with Weishi were terminated inApril 2022

37、,DDC SH still has been possessing this amount of personal informationwhich are stored in mainland China.For purposes of the Cybersecurity ReviewMeasures,we have applied for the cybersecurity review with respect to our proposedoverseas listing pursuant to the Cybersecurity Review Measures.See“RiskFac

38、tors We may be liable for improper collection,use or appropriation ofpersonal information provided by our customers.”Because these statements andregulatory actions are new,however,it is highly uncertain how soon legislative oradministrative regulation making bodies in China will respond to them,or w

39、hatexisting or new laws or regulations will be modified or promulgated,if any,or thepotential impact such modified or new laws and regulations will have on our dailybusiness operations or our ability to accept foreign investments and list on anU.S.exchange.The Holding Foreign Companies Accountable A

40、ct,or the HFCAA,was enacted onDecember 18,2020.In accordance with the HFCAA,trading in securities of anyregistrant on a national securities exchange or in the over-the-counter tradingmarket in the United States may be prohibited if the Public Company AccountingOversight Board(the“PCAOB”)determines t

41、hat it cannot inspect or fully investigatethe registrants auditor for three consecutive years beginning in 2021,and,as aresult,an exchange may determine to delist the securities of such registrant.OnDecember 23,2022,the Accelerating Holding Foreign Companies Accountable Act,or theAHFCAA,was enacted,

42、which amended the HFCAA by reducing the aforementionedinspection period from three to two consecutive years,thus reducing the time periodbefore our Table of Contentssecurities may be prohibited from trading or delisted if our auditor is unable tomeet the PCAOB inspection requirement.Pursuant to the

43、HFCAAt,the PCAOB issued aDetermination Report on December 16,2021 which found that the PCAOB is unable toinspect or investigate completely registered public accounting firms headquarteredin:(1)mainland China of the Peoples Republic of China because of a position takenby one or more authorities in ma

44、inland China;and(2)Hong Kong,a SpecialAdministrative Region and dependency of the PRC,because of a position taken by oneor more authorities in Hong Kong.In addition,the PCAOBs report identified thespecific registered public accounting firms which are subject to thesedeterminations.Our registered pub

45、lic accounting firm,KPMG Huazhen LLP,isheadquartered in mainland China or HongKong and was identified in this report as afirm subject to the PCAOBs determination.On December 15,2022,the PCAOB Boarddetermined that the PCAOB was able to secure complete access to inspect andinvestigate registered publi

46、c accounting firms headquartered in mainland China andHong Kong and voted to vacate its previous determinations to the contrary.However,whether the PCAOB will continue to be able to satisfactorily conduct inspections ofPCAOB-registered public accounting firms headquartered in mainland China and Hong

47、Kong is subject to uncertainties and depends on a number of factors out of our andour auditors control.The PCAOB continues to demand complete access in mainlandChina and Hong Kong moving forward and is making plans to resume regular inspectionsin early 2023 and beyond,as well as to continue pursuing

48、 ongoing investigations andinitiate new investigations as needed.The PCAOB has also indicated that it will actimmediately to consider the need to issue new determinations with the HFCAA ifneeded.If the PCAOB is unable to inspect and investigate completely registeredpublic accounting firms located in

49、 China and we fail to retain another registeredpublic accounting firm that the PCAOB is able to inspect and investigate completelyin 2023 and beyond,or if we otherwise fail to meet the PCAOBs requirements,ourClass A ordinary Shares will be delisted from the NYSE Group and will not bepermitted for tr

50、ading over the counter in the United States under the HFCAA andrelated regulations.On December 2,2021,the SEC adopted final amendmentsimplementing the disclosure and submission requirements under the Holding ForeignCompanies Accountable Act,pursuant to which the SEC will(i)identify an issuer asa“Com

51、mission-Identified Issuer”if the issuer has filed an annual report containingan audit report issued by a registered public accounting firm that the PCAOB hasdetermined it is unable to inspect or investigate completely because of the positiontaken by the authority in the foreign jurisdiction and(ii)i

52、mpose a tradingprohibition on the issuer after it is identified as a Commission-Identified Issuerfor three consecutive years.See“Risk Factors The recent enactment of theHolding Foreign Companies Accountable Act may result in de-listing of oursecurities.”As a holding company,we may rely on dividends

53、and other distributions on equitypaid by our PRC subsidiaries for our cash and financing requirements.If any of ourPRC subsidiaries incurs debt on its own behalf in the future,the instrumentsgoverning such debt may restrict their ability to pay dividends to us.As at the dateof this prospectus,neithe

54、r of our direct wholly or non-wholly owned subsidiaries northe VIEs have made any dividends or other distributions to our holding company andthe holding company has not made any dividends or distributions to any investorsincluding U.S.investors as of the date of this prospectus.The holding company,i

55、tssubsidiaries,and VIEs do not have any plan to distribute dividend or settle amountsowed under the prior or current contractual agreements in the foreseeable future.However,to the extent cash/assets in the business is in PRC/Hong Kong or ourPRC/Hong Kong entity,the funds/assets may not be available

56、 to fund operations or forother use outside of the PRC/Hong Kong due to interventions in or the imposition ofrestrictions and limitations on the ability of us,our subsidiaries or the VIEs bythe PRC government to transfer cash/assets.See“Transfer of Cash Through ourOrganization”,and“Risk FactorsRisks

57、 Related to Doing Business in China and HongKong PRC regulation of loans to and direct investment in PRC entities by offshoreholding companies and governmental control of currency conversion may delay us fromusing part of the proceeds of this offering to make loans or additional capitalcontributions

58、 to our PRC subsidiaries,which could materially and adversely affectour liquidity and our ability to fund and expand our business”and“Restrictions oncurrency exchange may limit our ability to utilize our revenues effectively.”In thefuture,cash proceeds raised from overseas financing activities,inclu

59、ding thisoffering,may be transferred by us to our PRC subsidiaries via capital contributionor shareholder loans,as the case may be.We currently dont have any cashmanagement policies and procedures in place that dictate how funds are transferredthrough our organization.Rather,the funds can be transfe

60、rred in accordance with theapplicable PRC laws and regulations.As of the date of this prospectus,no cashtransfer has been made among the holding company,its subsidiaries and VIE.Before buying any shares,you should carefully read the discussion of materialrisks of investing in our Class A Ordinary Sh

61、ares in“Risk Factors”beginning onpage 34 of this prospectus.Neither the Securities and Exchange Commission nor any other regulatory body hasapproved or disapproved of these securities or passed upon the accuracy or adequacyof this prospectus.Any representation to the contrary is a criminal offense.P

62、ER SHARE TOTALInitial public offering price$Underwriting discounts and commissions(1)$Proceeds,before expenses,to us$_(1)For a description of compensation payable to the underwriter,see“Underwriting”beginningon page 192.We expect our total cash expenses for this offering(including cash expenses paya

63、ble to ourunderwriters for their out-of-pocket expenses)to be approximately$,exclusive of the abovediscounts and commissions.In addition,we will pay additional items of value in connection withthis offering that are viewed by the Financial Industry Regulatory Authority,or FINRA,asunderwriting compen

64、sation.These payments will further reduce proceeds available to us beforeexpenses.See“Underwriting.”This offering is being conducted on a firm commitment basis.The underwriters are obligated totake and pay for all of the shares if any such shares are taken.We have granted the underwriters anoption f

65、or a period of thirty(30)days after the closing of this offering to purchase up to 15%ofthe total number of our Class A Ordinary Shares to be offered by us pursuant to this offering(excluding shares subject to this option),solely for the purpose of covering over-allotments,atthe initial public offer

66、ing price less the underwriting discounts and commissions.If theUnderwriter exercises the option in full,the total underwriting discounts and commissions payablewill be$based on an assumed initial public offering price of$per Class AOrdinary Shares,and the total proceeds to us,before expenses,will b

67、e$.If wecomplete this offering,net proceeds will be delivered to us on the closing date.The underwriters expect to deliver the Class A Ordinary Shares against payment as set forthunder“Underwriting”,on or about,2023.CMB International The Benchmark CompanyGuotaiJunanInternational Eddid Financial Tige

68、r BrokersThe date of this prospectus is,2023.Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of Contents Table of ContentsTABLE OF CONTENTS PageProspectus Summary

69、 1Risk Factors 34Special NoteRegarding Forward-Looking Statements 82Industry and Market Data 83Use of Proceeds 84Dividend Policy 85Capitalization 86Dilution 88Corporate History and Structure 90Selected Consolidated Financial Data 94Managements Discussion and Analysis of Financial Condition and Resul

70、ts ofOperations 96Industry Overview 116Business 119Regulations 143Management 155Principal Shareholders 162Related Party Transactions 164Description of Share Capital and Governing Documents 168Shares Eligible for Future Sale 184Material Income Tax Considerations 186Underwriting 192Expenses Related to

71、 this Offering 203Legal Matters 204Experts 204Enforcement of Civil Liabilities 205Where You Can Find Additional Information 208Index to Consolidated Financial Statements F-1We are responsible for the information contained in this prospectus andany free writing prospectus we prepare or authorize.We h

72、ave not,and theunderwriters have not,authorized anyone to provide you with differentinformation,and we and the underwriters take no responsibility for anyother information others may give you.We are not,and the underwriters arenot,making an offer to sell our Class A Ordinary Shares in anyjurisdictio

73、n where the offer or sale is not permitted.You should notassume that the information contained in this prospectus is accurate as ofany date other than the date on the front cover of this prospectus,regardless of the time of delivery of this prospectus or the sale of anyClass A Ordinary Shares.For in

74、vestors outside the UnitedStates:Neither we nor the underwriters havedone anything that would permit this offering or possession or distribution of thisprospectus in any jurisdiction,other than the UnitedStates,where action for thatpurpose is required.Persons outside the UnitedStates who come into p

75、ossession ofthis prospectus must inform themselves about,and observe any restrictions relatingto,the offering of the Class A Ordinary Shares and the distribution of thisprospectus outside the UnitedStates.We are incorporated under the laws of the Cayman Islands and a majority of ouroutstanding secur

76、ities are owned by non-U.S.residents.Under the rules of theU.S.Securities and Exchange Commission,or the SEC,we currently qualify fortreatment as a“foreign private issuer.”As a foreign private issuer,we will not berequired to file periodic reports and financial statements with the Securities andExch

77、ange Commission,or the SEC,as frequently or as promptly as domestic registrantswhose securities are registered under the Securities Exchange Act of 1934,asamended,or the ExchangeAct.Until and including,2023(twenty-five(25)days after the dateof this prospectus),all dealers that buy,sell or trade our

78、Class AOrdinary Shares,whether or not participating in this offering,may berequired to deliver a prospectus.This delivery requirement is in additionto the obligation of dealers to deliver a prospectus when acting asunderwriters and with respect to their unsold allotments or subscriptions.iTable of C

79、ontentsCONVENTIONS THAT APPLY TO THIS PROSPECTUSUnless we explicitly state otherwise or the context otherwise indicates clearly,all references in this prospectus to“we,”“us,”“our,”“our Group,”“theGroup”or“our company”refer to DDC Enterprise Limited and its subsidiaries andthe VIEs.The“Company”or“DDC

80、 Cayman”refers to DDC Enterprise Limited.“HKD”or“HK$”refers to the legal currency of HongKong.“Hong Kong”refers to Hong Kong Special Administrative Region of the PeoplesRepublic of China.“Macau”refers to Macau Special Administrative Region of the Peoples Republicof China.“RMB”or“Renminbi”refers to t

81、he legal currency of China.“mainland China,”“PRC”or“China”refers to the Peoples Republic ofChina,excluding,for the sole purpose of this prospectus,Hong Kong,Macau andTaiwan,unless the context otherwise indicates.“paid customers”,with respect to a certain point of time,refers to theCompanys current a

82、nd past customers who had,as of that point of time,purchasedproduct or service from the Company.“Prospectus”refers to the public offering prospectus unless we explicitlystate otherwise or the context otherwise indicates clearly.“$”or“U.S.dollars”or“USD”refers to the legal currency of theUnitedStates

83、.We have made rounding adjustments to some of the figures included in thisprospectus.Accordingly,numerical figures shown as totals in some tables may not bean arithmetic aggregation of the figures that preceded them.Unless the context indicates otherwise,all information in this prospectusassumes no

84、exercise by the underwriters of their over-allotment option and noexercise of the Underwriter Warrants.Our business is primarily conducted in China,and the financial records of oursubsidiaries in Asia are maintained in USD,and our functional currency is USD.Ourconsolidated financial statements are p

85、resented in U.S.dollars.We use U.S.dollarsas the reporting currency in our consolidated financial statements and in thisprospectus.TRADEMARKS,SERVICE MARKS AND TRADE NAMESThis prospectus includes trademarks,tradenames and service marks,certain ofwhich belong to us,including the DayDayCook logo,and o

86、thers that are the propertyof other organizations.Solely for convenience,the trademarks,service marks,logosand trade names referred to in this prospectus are without the and symbols,butsuch references are not intended to indicate,in any way,that we will not assert,tothe fullest extent under applicab

87、le law,our rights or the rights of the applicablelicensors to these trademarks,service marks and trade names.This prospectus contains additional trademarks,service marks and trade names ofothers,which are the property of their respective owners.All such trademarks,service marks and trade names appea

88、ring in this prospectus are,to our knowledge,theproperty of their respective owners.We do not intend our use or display of othercompanies trademarks,service marks,copyrights or trade names to imply arelationship with,or endorsement or sponsorship of us by,any other companies.iiTable of ContentsPUBLI

89、C OFFERING PROSPECTUS SUMMARYThe following summary highlights information contained elsewhere in thisprospectus and does not contain all of the information you should consider beforeinvesting in our Class A Ordinary Shares.You should read the entire prospectuscarefully,including“Risk Factors,”“Manag

90、ements Discussion and Analysis ofFinancial Condition and Results of Operations,”and our consolidated financialstatements and the related notes thereto,in each case included in this prospectus.You should carefully consider,among other things,the matters discussed in thesection of this prospectus titl

91、ed“Business”before making an investment decision.This prospectus contains information from an industry report commissioned by us andprepared by Frost&Sullivan,an independent research firm,to provide informationregarding our industry.We refer to this report as the Frost&Sullivan Report.Our MissionOur

92、 mission is to inspire others to enjoy cooking as part of a qualitylifestyle and culture.We are driven to improve lives by creating easy-to-cook,delicious,and healthy meal solutions.It is our vision to create fun experiencesand inspirations in every kitchen.OverviewWe are a leading content driven(i.

93、e.using content to reach and engage targetcustomers)consumer brand offering easy,convenient ready-to-heat(“RTH”),ready-to-cook(“RTC”),ready-to-eat(“RTE”)products.Convenience is at an all-timehigh with ready-to-eat prepared food.They reduce the time and energy needed toprepare a meal at home while ne

94、ver compromising on food safety,variety,and taste.Our brands and products promote healthier lifestyle choices to our predominatelyMillennial and GenerationZ(“GenZ”)customer-base.We are also engaged in theprovision of advertising services.We were founded in Hong Kong in 2012 by Ms.Norma Ka Yin Chu,a

95、highlyregarded entrepreneur and a true cooking enthusiast,as an online platform whichdistributed food recipes and culinary content.Subsequently,we further expandedour business to provide advertising services to brands that wish to placeadvertisements on our platform or video content.In 2015,we enter

96、ed the MainlandChina market through the establishment of Shanghai DayDayCook InformationTechnology Co.,Ltd(“SH DDC”)to engage in technology development of computersoftware,food circulation and advertising production in China.In 2017,we startedexpanded our business from content creation to content co

97、mmerce.Later in 2019,weextened our business to include the production and sale of,among others,own-branded RTH,RTC convenient meal solution products.As of March 31,2023,our main product categories include(i)own-branded RTHproductstypically semi-cooked meals with some but minimal preparation required

98、ahead of serving,(ii)own-branded RTC productsready to be consumed within 8to 15 minutes with some additional cooking preparation,(iii)own-branded RTEproducts typically pre-cooked meals that are ready to serve with minimal levelof additional preparation,which includes our plant-based meal products lo

99、calizedfor the palate of an Asian consumer,and(iv)private label products(i.e.third-party branded food products).Business ModelOur omni-channel(online and offline)sales,end-to-end(“E2E”)productdevelopment and distribution strategy,and data analytics capabilities enable us tosuccessfully identify,asse

100、ss,and pivot to cater to changing consumer preferencesand trends across multiple customer segments and price-points.From a productdistribution standpoint,we have created a network of direct-to-customer(“D2C”),retailer,and wholesaler sale options.We leverage(i)large China-based e-commerce platforms e

101、.g.,Tmall,JD.com,Pinduoduo,(ii)leading livestreaming,video-sharing,content-marketing platforms e.g.,ByteDance(TikTok and sister-app Douyin),Bilibili,Weibo,Little Red Book(小 紅 書),Kuaishou etc.,and(iii)online-merged-offline(OmO)group-buy platforms e.g.,Meituan-Dianping to drive online sales.We would c

102、ooperate with third-party onlinedistributors on these e-commerce platforms to promote and sell ourproducts.We have access to a network of offline point-of-sales(“POS”)throughpartnerships with(i)convenience stores e.g.,7/11,Lawson etc.,(ii)multi-national retail corporations e.g.,Carrefour,Hema etc.,(

103、iii)boutique supermarket chains e.g.,Ole,G-Super etc.,and(iv)various corporate partnerships e.g.,Towngas to distribute and sellour products.1Table of ContentsWe operate in the Mainland China market but are actively expanding intointernational markets including but not limited to the United States an

104、dCanada.We own multiple brands in our portfolio that provide convenient mealsolution products to a wide range of consumers.We are actively lookingfor acquitision opportunities in complimentary brands in the Asian foodand cooking categories as well as targets that can strengthen thecompanys network o

105、f sales distribution.As of March 31,2023,we had 24.5million paid customers.Around 69%of ourfollowers on social media&video platforms are GenZ.50%of customers are fromthe Eastern&Southern parts of China,and 86%are female.In particular,webelieve that our products appeal to GenZ because(1)when compared

106、 to older agegroups,GenZ generally do not want to spend a long time cooking at home and theyvalue cost effective options like RTC,RTH and RTE meals due to the ease of cookingthat RTC,RTH and RTE products provide;(2)we promote our products mainly throughsocial media,the audience of which are mainly t

107、he GenZ population;(3)we mainlysell our products through e-commerce platforms,including livestreaming e-commerce,the customers demographics of which are dominated by GenZ;(4)plant-based dietshave progressed from a food trend to a globally recognized lifestyle which GenZ ismore willing to embrace.The

108、 average age of a viewer engaging with our products ormarketplace is younger than 30 years old.From 2018 to March 2023,we have acontent library with more than 247,874 minutes of in-house created content.For the year ended December 31,2022,we recorded RMB179.6 million(orUS$26.0million)in total revenu

109、e.This drop in revenue was largely a result ofnegative impact from extended zero-covid policy in China which led to massivedisruptions in the companys e-commerce operations.In the face of this challenge,we completed four acquisitions in 2022 to speed up the diversification of revenuestreams as well

110、as aggressive improvement on overall cost structure.Assuming thesefour acquisitions had taken place on 1 January 2022,the unaudited pro formarevenue of the Company for the year ended December 31,2022 will be RMB231.9million(or US$34.3 million).Equally important,our focus has been on improvingthe ove

111、rall cost structure of the business when facing Covid and inflationchallenges.For the year ended December 31,2022,our gross profit marginincreased to 24.5%versus 17.8%for the year ended December31,2021.2Table of ContentsAs the company continues to execute on its M&A strategy,which primarilyfocuses o

112、n the acquisition of complimentary brands in the Asian food and cookingcategories as well as sales channel access,in April 2023,we entered into apurchase agreement to acquire 51%equity interest of Shanghai Yuli DevelopmentLimited(“Yuli”),to add new sales channels in Ready-To-Cook and Ready-To-Eatpro

113、duct categories;also in April 2023,we entered into a purchase agreement toacquire 100%interest in 4 online stores in Pinduoduo platform to increase ouronline Ready-To-Heat customer base;in May 2023,we entered into a purchaseagreement to acquire“Nona Lim”,an Asian food brand based in San Francisco,US

114、A.The brand sells Ready-To-Cook Asian noodle meal kits and a variety of soup bases toits customers through an established distribution network in the United States,including major retailers such as Whole Foods Market,Target,and Kroger.We have incurred a loss from operations,had net cash used in oper

115、atingactivities,net current liabilities and an accumulated deficit.In addition,ourauditors report includes an explanatory paragraph expressing substantial doubtabout our ability to continue as a going concern.Our IndustryWe compete primarily in the convenient meal solutions market providing RTE,RTCa

116、nd RTH products to our customers.With(i)the proliferation of food deliveryservice options,(ii)a shift in customer preference and behavior away from home-cooked to convenience,and(iii)an increase in GDP per capita/overall disposableincome(both in our target demographic and in-general)the demand for c

117、onvenientmeal solution products including RTC/RTE products has increased significantly.Customers have also become more discerning and expect RTC/RTH/RTE products to be ofa high quality,have a higher nutritional value,and taste better when comparedwith other processed or semi-processed food product c

118、ategories.Typically,RTC andRTE meals are made using high-quality and seasonal ingredients with fulltraceability at every stage of the food chain and a focus on nutritional value andmaintaining a balanced diet is factored into the recipe and product R&D process.COVID-19 has accelerated the shift to e

119、-commerce and the need to develop andprofessionalize Chinas cold chain transport infrastructure.The logisticsindustry is benefiting from the proliferation of professional third-party logisticsservice providers as well as improvements in preservation/storage,informationlogistics,analysis,and distribu

120、tion technology.As a result of improvements inlogistical infrastructure and the scale of the distribution network,the RTC andRTE industry has been able to expand its geographical reach,improve productdelivery efficiency,and guarantee food safety and maintain quality over largerdistances.Internationa

121、lly,the development history of mature overseas RTC and RTE marketsnurtures an extensive customer base of RTC and RTE products.The COVID-19 pandemicfurther stimulates such demands in overseas markets as it alters peopleslifestyle and increases health consciousness,especially in Southeast Asia.Inaddit

122、ion,with the development of those mature RTC markets,an increasing number ofcustomers are in pursuit of a healthier lifestyle and start to favor healthierready-to-cook products instead of RTC products of high calories as well ashealthier ready-to-eat products instead of junk food.Chinese companies i

123、n the RTCand RTE industry,because of their well-established value chains,are able to offerRTC and RTE products of competitive prices in markets like North America and Europedespite the additional logistic expenses.Thus,Chinese companies that are activelyseeking international expansion opportunities

124、are well positioned to gain share inthe global RTC and RTE market.Plant-based products are a nascent Fast-Moving Consumer Goods(“FMCG”)category in China.Some Chinese brands have recently emerged as strong competitorsto international incumbents.Younger individuals are the target demographic ofcompani

125、es offering plant-based substitutes/alternatives.Many new brands have beenable to penetrate the younger customer segment by adopting an omnichannel strategyand by offering good quality,varied product offerings at a reasonable price-point.Around the globe,the public has been paying more attention to

126、environmentaland natural resources protection over the past decades.The technology andproduction of plant-based meat has also experienced rapid development.Benefitingfrom the mature production technology of plant-based meat,foreign brands,whencompared with Chinese brands,have obvious advantages in i

127、mitation of meat flavorand texture.However,limiting to product categories,flavor localization,stock-keeping unit(“SKU”)quantity,and high price,it is difficult for them to seizesignificant business opportunities in Chinese market.Compared to foreign brands,domestic brands pay more attention to recipe

128、 R&D and introduce various plant-basedmeat food products into the market,ranging from Western cuisine to Chinesecuisine,including but not limited to Panini,pizza,hamburgers,braised rice,pies,noodles,and other products.Finally,the processed volume of soybean proteinand pea protein in China contribute

129、s nearly half of the global volume every year,which provides a significant advantage in raw materials for domestic plant-basedmeat food products companies.3Table of ContentsOur Competitive StrengthsWe believe the following competitive strengths differentiate us from ourcompetitors and will continue

130、to contribute to our success:Leading Content Driven Consumer Brand in China that Possess a LoyalCustomer Base,and Clear Alignment with Consumer TrendsWe are a leading content-driven lifestyle brand for young food lovers,especially GenZ customers in China.We believe that our RTH,RTC,RTE,and plant-bas

131、ed meal products portfolio aligns with broader Fast-Moving-Consumer-Goods trendsand shifts in consumer behavior.Our products,brand,and mission resonate stronglywith our GenZ customer base who seek high quality and nutritional food productsthat are sustainably and ethically sourced.As of March 31,202

132、3,more than24.5 million consumers had purchased our products via one or more e-commerceplatforms.Track Record of InnovationWe allocated and will continue to allocate significant resources to productinnovation for our RTC and RTE products.We typically launch new products on aquarterly basis.To positi

133、on us as a leader in the convenient RTC and RTEcategories,we partnered with PFI Foods in the third quarter of 2020,cooperatedwith Meta Meat in 2021,both companies being leading plant-based meat manufacturersin mainland China,to develop a line of plant-based food products.In 2023,we havealso launched

134、 a partnership with Nestle China using their Harvest Gourmet brand ofplant based meat to bring the first-ever RTC products to market.In addition,the company is building a library of new product concepts andrecipes,ready for further development and testing.We believe that we excel atidentifying ingre

135、dient combinations,and flavor profiles that appeal to the palateof young Asian consumers.Leveraging our innovation capabilities,our experience inthe Chinese markets and our deep understanding of the palate of Asian consumers,weare confident that when executing our international market expansion plan

136、,we canintroduce new product innovation and develop food products that appeal to otherAsian communities and potentially an even wider audience on the global stage.Omni-Channel and Multi-Faceted Sales&Distribution StrategyThe Companys core distribution strategy is to balance the revenue mix ofonline

137、sales and offline sales.By leveraging the power of e-commerce,we tap intothe growing digital market while providing various meal solutions to our consumersall around China.Simultaneously,we maintain a strong presence in physical retailthrough distributors,ensuring accessibility and brand visibility.

138、This balanceddistribution strategy enables us to capture diverse customer segments,optimizesales channels,and mitigate risks associated with concentration on a singledistribution channel.In 2022,due to the impact of Covid outbreak in mainlandChina,we encountered difficult meeting our customers need

139、online.As a result,about 61%of our revenue came from offline sales for the year ended December 31,2022.Our omni-channel(both offline and online)strategy spans(i)popular e-commerce channels e.g.,Taobao and JD.com,(ii)social and content platforms e.g.,TikTok,Kuaishou,Bilibili,and WeChat,and(iii)commun

140、ity group buying platformse.g.,Meituan-Dianping.From 2019 to March 2023,our online sales networkincluding,among others,Tmall,JD.com,and China Pinduoduo have attracted107.18million visitors and for the year ended December31,2022,generated onlineconsumer product sales of RMB67.0 million(or US$9.7 mill

141、ion).In 2022,weincreased our offline retail distribution network and have worked with 709distributing partners.We will continue to focus on bringing our customers the best quality Asian mealsolution,by implementing a balanced distributing strategy.In 2023,the companysforecasted online sales will acc

142、ount for 50%of total sales,while offline saleswill account for the remaining half.Customer Engagement Analytics,Customer Service,and Real-Time(“RT”)Feedback CapabilitiesWe analyze transaction data,collect customer feedbacks through one or morechannels,and engage in customer engagement analytics.This

143、 helps to(i)streamline the product development lifecycle and reduce the risk of acustomer-product mismatch,(ii)uncover new(sub)product categories and/orpotential bundling and/or up and cross-sell opportunities within the existingproduct portfolio,(iii)strengthen our brand image,and(iv)improve custom

144、er“stickiness”by providing customers with a forum.4Table of ContentsE2E Supply Chain Visibility,Agile Product Development and Go-to-Market(“GTM”)CapabilitiesOn average,we can deliver a new product to-market within 8weeks.Our E2Esupply chain visibility and strong product execution i.e.,product concep

145、t,prototyping,product validation and recalibration,commercial manufacturing,product marketing and placement capabilities mean we can react in almost real-timeto changes in customer needs and preferences.As part of our more proactive newproduct development strategy,we leverage our deep industry and c

146、ross-disciplinaryexpertise to uncover potential market and product opportunities.We have an in-house content development team which focuses on building interest and demand preproduct launch.They will keep abreast of the latest market developments andidentify potential trends and consumers interests.

147、To promote our new products,wealso collaborate with key opinion leaders(“KOLs”or“KOL”).We are well placedto continue to grow our market share and become the dominant player in the RTH,RTC,RTE,and plant-based meal products industry in mainland China.5Table of ContentsExperienced Management Team,Board

148、 of Directors,and Advisory NetworkWe have an experienced management team.Members of our management team havesignificant experience across the FMCG,e-commerce,and IT services/technology,media,and telecommunications industries/sectors.More importantly,our managementteam comprises of a few selected ind

149、ividuals that offer strong understanding of theChinese market as well as have extensive experiences in operating and expandingFMCG businesses in international markets.In particular,our founder,Ms.Norma Ka Yin Chu,is a highly regardedentrepreneur and a true cooking enthusiast who has won numerous awa

150、rds as avisionary entrepreneur in the cooking and lifestyle community.She was named asChina New Media Top 100 people in 2016,and one of CY Zones Most Notable FemaleEntrepreneurs for three consecutive years from 2017 to 2019.In 2020,she wasawarded the Outstanding ICT Women Awards 2020:Women Entrepren

151、eur Category,Harpers Bazaar The Visionary Woman 2020 and JESSICA Most Successful Women Award2020 Digital Women.Prior to founding our group,Norma was the Head of Researchof HSBC Private Bank in HongKong.Therefore,not only does Ms.Chu have richexperience in the cooking and food products industry,she a

152、lso has extensiveexperience in private equity,which together enable her to lead our groups driveto become a leader in the market.We further augmented the management team with a Board of Directors and anadvisory network with significant operator expertise and experience spanningPepsiCo,General Mills,

153、Danone and Meitu.Name Previous Roles DescriptionChia Hung YangIndependentDirector Tuniu Corp.,AirMedia,Dangdang Inc.,andGoldman Sachs Group,Inc.Mr.Yang has over 30 years ofexperience in capital market acrossthe US&China,held C-levelpositions at several US-listedChinese TMT companiesFormer CFO of Tun

154、iu,51Talk,DangDang and AirMedia.Previously,Mr.Yang was a banker at GoldmanSachs,Morgan Stanley&LehmanBrothersMr.Yang currently serves as anindependent director ofI-Mab(Nasdaq:IMAB),Ehang(Nasdaq:EH),iQIYI(Nasdaq:IQ)andUp Fintech Holding(TigerSecurities)(Nasdaq:TIGR)Matthew Gene MouwIndependentDirecto

155、r Danone S.A.,BarillaGroup,MARS Inc Mr.Mouw has over 30 years ofextensive experience in the foodindustry,both convenience drivenproducts such as confectionary,water&biscuits as well as plannedpurchase driven products such asjuices,pastaand ready mealsFormer Regional President Asia,Africa,and Austral

156、ia for BarillaSpA.and General Manager for DanoneS.A.,in ChinaMr.Mouw has experience with bothemerging markets ranging from Chinato Turkey to Russia as well asdeveloped markets ranging fromAustralia to Japan and KoreaSam ShihIndependentDirector PepsiCo,Inc.,RedBull GmbH,Accor S.A,and OYO Rooms Mr.Shi

157、h has over 30 years ofexperience in food&hospitalityindustry in China.Mr.Shih is currently a Partner andChief Operating Officer of OYO HotelCompany,a unicorn start-up backedby Softbank in China.Previously Mr.Shih has served asCEO of PepsiCo Investment(China)Ltd.,Asia Pacific Managing Directorfor Red

158、 Bull Gmbh as well asChairman and CEO of Accor GreatChina6Table of ContentsName Previous Roles DescriptionMalik Sadiq,PhDAdvisory BoardMember The LIVEKINDLYCompany,Inc.,TysonFoods,Inc.,ArthurAndersen LLP,andHitachi Vantara Mr.Sadiq has more than 25yearsof experience in the food andstrategy consultin

159、g industry inChina,India,and the USMr.Sadiq is currently theconsulting business owner of GreatDoorway ConsultingPrevious roles include severalsenior management positions at TysonFoods,most notably,CEO India,COOChina,and Head of Global Sourcingand Business Optimization,COO ofLIVEKINDLY Co,as well as

160、the VicePresident,Consumer Practice atHitachi ConsultingChenling ZhangAdvisory BoardMember Primavera CapitalAcquisition Corp,VCleanse Being an investor,entrepreneur andinfluencer,Ms.Zhang started hercareer on Wall Street,raised NYSE-listed SPAC and founded her owncompany VCLEANSE as key suppliers of

161、various popular brandsMs.Zhang also works closely with avariety of global consumer brands,making contributions to theirbranding strategies and communitybuilding initiativesHer roles include director ofPrimavera Capital Acquisition Corpand founder of VCLEANSEOur StrategiesInternational market expansi

162、onInternationally,the development history of mature overseas RTC and RTE marketsnurtures an extensive customer base of RTC and RTE products.The COVID-19 pandemicfurther stimulates such demands in overseas markets as it alters peopleslifestyle and increases health consciousness,especially in Southeas

163、t Asia,.Chinese companies in the RTC and RTE industry,attributable to their well-established value chains,are able to offer RTC and RTE products of competitiveprices in markets like North America and Europe despite the additional logisticexpenses.Thus,Chinese companies that are actively seeking inte

164、rnational expansionopportunities are well positioned to further gain share in the global RTC and RTEmarket.Moreover,around the globe,the public has been paying more attention toenvironmental and natural resources protection over the past decades.Compared toforeign brands,domestic Chinese brands pay

165、more attention to the recipe R&D andintroduce various plant-based meat food products into the market,covering fromWestern cuisine to Chinese cuisine,including but not limited to Panini,pizza,hamburgers,braised rice,pies,noodles,and other products to cater consumers.Theprocessed volume of soybean pro

166、tein and pea protein in China contributes nearlyhalf of the global volume every year,which provides a significant advantage in rawmaterials for Chinese plant-based meat food products companies.In view of the above and to the extent permitted due to our recurring lossesfrom operations and an accumula

167、ted deficit,we are raising funds from investors forthe purpose of expanding our business in the U.S.and Southeast Asia in hope ofwidening our customer base.For the U.S.,we have devised a three-fold strategy:(1)to launch ourproducts through major Asian-focused online and offline sales channels,(2)tol

168、aunch our direct-to-consumer stores on Amazon and our U.S.website by the end ofthe first quarter 2023,and(3)to grow through acquisitions.Since July2022,wehave successfully gained access to the U.S.market through sales on Y,one of the largest Asia food e-commerce platforms headquartered in the U.S.In

169、 May2023,we entered into a purchase agreement to acquire“Nona Lim”,an Asian foodbrand based in San Francisco,USA.The brand sells Ready-To-Cook Asian noodle mealkits and a variety of soup bases to its customers through an establisheddistribution network in the United States,including major retailers

170、such as Whole7Table of ContentsFoods Market,Target,and Kroger.This acquisition enables us to expand ourcustomer base into the US market.As for the Southeast Asian market,we arecurrently negotiating with local companies that would give us instant access to agrowing customer base in the RTC and RTE me

171、al markets.Enhance our sales and marketing capabilities,as well as our sphere ofinfluenceWe will continue to monitor the performance of our e-commerce partners andplatforms,adapt our product pricing strategy and offerings,and expand ourfulfilment capabilities to support our revenue targets.We are ra

172、ising funds frominvestors to deepen and broaden our existing partnerships and continue to expandcooperation with a wider network of influencers and KOLs to build our brandawareness.Also,we plan to engage more up-and-coming social e-commerce platformsto(i)drive higher traffic to our stores through mo

173、re and closer collaborations;(ii)improve our ability to aggressively penetrate non-tier 1 cities and(iii)accelerate the growth of our paid customer base.In addition,we willcontinue to improve our sales and marketing capabilities and leverage the internetand various social media platforms to build br

174、and awareness in non-Tier 1 cities inChina.We will also engage content and social media marketing providers andplatforms to drive an increase in average order value(“AOV”),repeat purchases,and to attract net-new users to our platform.As of March 31,2023,we had 24.5 million paid customers.Continue to

175、 innovate and expand product offeringsWe expect consumer demand for RTH,RTC,RTE and plant-based meal products tonot only persist,but to grow at an accelerated rate.We plan to leverage our deepindustry expertise,data-informed consumer insights,and predictive analytics toidentify meaningful consumer t

176、rends and then partner with and solicit productfeedback from our customers to optimize and expand on our existing productportfolio.We are committed to strengthening our R&D and product developmentcapabilities to improve our ability to innovate more effectively within our coreproduct categories.Merge

177、rs and Acquisitions(“M&A”)RollupM&A is a key growth strategy going forward for the company in order for us toexecute on the multi-brand strategy and also further diversify away from brandconcentration risks.We have already identified several targets but to the extentpermitted due to our recurring lo

178、sses from operations and an accumulated deficit,we will evaluate and opportunistically execute on strategic joint ventures(JV),potential investments and acquisition opportunities across the value-chain with afocus on supplementing and/or complementing our existing products,sales channels,customer-ba

179、se and/or allow us to optimize our existing brand marketing and saleschannel management capabilities.Apart from executing acquisitions withconsiderations paid through share exchanges,we are also raising funds frominvestors to have an option to acquire companies through a mixture of cash andshares.8T

180、able of ContentsCorporate History and StructureDDC Enterprise Limited(“DDC Cayman”)is a Cayman Islands holding company andconducts its operations primarily in China through its wholly-owned or controlledsubsidiaries.We were founded in HongKong in 2012 by Ms.Norma Ka Yin Chu as anonline platform whic

181、h distributed food recipes and culinary content.Subsequently,we further expanded its business to provide advertising services to brands thatwish to place advertisements on our platform or video content.In 2015,we enteredthe Mainland China market through the establishment of Shanghai DayDayCookInform

182、ation Technology Co.,Ltd.(“SH DDC”)and Shanghai Weishi InformationTechnology Co.,Ltd.(“Weishi”).In 2017,we expanded our business from contentcreation to content commerce.Later in 2019,we extended our business to includethe production and sale of,among others,own-branded RTH,RTC convenient mealsoluti

183、on products.During the periods covered by the financial statements included elsewhere inthis prospectus,SH DDC had entered into a series of contractual arrangement withWeishi and Shanghai City Modern Agriculture Development Co.,Ltd.(“City Modern”),in 2016 and 2019 respectively,which allows SH DDC to

184、 exercise effective controlover Weishi and City Modern and receive substantially all the economic benefits ofWeishi,City Modern and their consolidated entities(collectively,the“Weishi andCity Modern VIEs”)via variable interest entity structures.As of the date of thisprospectus,such contractual arran

185、gements with the Weishi and City Modern VIEs havebeen terminated.After the termination of the contractual arrangements with Weishi,we will continue cooperation with it in certain online service areas.For instance,Weishi will develop and maintain the WeChat mini-program related to our business,ensure

186、 the ordinary operation of our official websites,make sure the cybersecurity of the systems and maintain our IT systems and servers.As advised by thePRC legal adviser,our continue cooperation with Weishi does not constitute a VIEbecause that,since the termination of the contractual arrangements with

187、 Weishi,(i)we have no longer enjoyed any controlling rights or decision-making power overthe operation of Weishi;(ii)Weishi has independently operated its assets andproperties and conducted its businesses,and its shareholder,instead of us,hasenjoyed its residual interests and born the loss(if any);(

188、iii)we and Weishihave no contractual relations other than the service contract to be signed betweenSH DDC and Weishi;and(iv)we have not enjoyed any interests or benefits,or anyother transfers,contributed by Weishi,or offered any financial assistance forWeishi.DDC Cayman directly and wholly owns(a)DD

189、C OpenStudio Limited(“DDCOpenStudio”),a Cayman Islands company incorporated in May 2017,(b)PerfectFoods Inc.(“Perfect Foods Inc.”),a Cayman Islands company incorporated inSeptember 2019 and(c)Grand Leader Technology Limited(“Grand Leader”),aHongKong company incorporated in January2011.DDC OpenStudio

190、 in turn holds allthe share capital of DDC OpenStudio Media Limited(“DDC OpenStudio Media”),whichwas incorporated in July2018 in HongKong.Perfect Foods Inc.in turns holds allthe share capital of Good Foods HK Limited(“Good Foods HK”),which wasincorporated in September2019 in HongKong.9Table of Conte

191、ntsThrough its wholly-owned subsidiary Grand Leader,which was incorporated forthe purpose of handling advertising,business-to-consumer e-commerce and cookingclasses in Hong Kong,DDC Cayman owns a direct equity interest in SH DDC andShanghai Lashu Import and Export Trading Co.,Ltd.(“SH Lashu”).SH DDC

192、 wasestablished in January2015 in China for the purpose of engaging in technologydevelopment of computer hardware and software,food circulation and advertisingproduction in China,whilst SH Lashu was established in August2017 in China as animport and export vehicle in China.As of December,2017,Shangh

193、ai Youlong Industrial Co.,Ltd.(“SH Youlong”),awholly owned subsidiary of SH DDC,was established for the purpose of engaging incooking class services,food and beverage and retail business in China.SH Youlongowns a direct equity interest in Guangzhou Youlong DayDayCook Food and BeverageCo.,Ltd.,which

194、was established in March2018 with its main business of engagingin cooking class services,food and beverage and retail business in China.As of June2019,Shanghai Juxiang Culture Media Co.,Ltd.(“SH Juxiang”),awholly owned subsidiary of SH DDC,was established for the purpose of engaging ine-commerce bus

195、iness in China.In January2019,SH DDC acquired 60%equity interest in Fujian Jinjiang YunmaoElectronic Commerce Co.,Ltd.(“Yunmao”),a limited liability company incorporatedunder the Laws of the PRC,for a combination of a share option considerationequivalent to a value of RMB10.2 million,and a cash cons

196、ideration of RMB10.2million,to engage in food and beverage retail and e-commerce.Yunmao owns a directequity interest in Hangzhou Damao Technology Co.,Ltd.,which was established inJune2020 with a main business of e-commerce.In January 2021,SH DDC acquired a number of online stores from ChongqingMengw

197、ei Technology Co.,Ltd.,Liao Xuefeng,Chongqing Changshou District WeibangNetwork Co.,Ltd.and Chongqing Yizhichan Snack Food Electronic Commerce ServiceDepartment(the“Transferors”).In July 2021,SH DDC and Chongqing MengweiTechnology Co.,Ltd.set up a joint venture named Chongqing DayDayCook E-commerceC

198、o.,Ltd.(“CQ DDC”),which is established for accepting the online storesacquired and operating newly set-up online stores,in which,SH DDC holds 51%equity interest.CQ DDC was established for the purpose of engaging in online foodretail business in China.However,due to certain limitations from the polic

199、ies ofthird-party online platforms,the titles of such online stores currently cannot betransferred to CQ DDC and the operation of such online stores are still delegatedto the Transferors through relevant contractual arrangements to enable us to havethe ability to control such online stores.Therefore

200、,these online stores areconsidered VIEs and SH DDC is the primary beneficiary.We refer to these onlinestores the“Mengwei VIE”throughout this prospectus.Investors should be awarethat they are purchasing equity securities of our ultimate Cayman Islands holdingcompany,namely DDC Cayman,rather than equi

201、ty securities of the Mengwei VIE,andinvestors in our securities may never hold equity interests in the Mengwei VIE.DDCCayman is a Cayman Islands holding company with no material operations of its own.The operations of online stores are conducted through contractual arrangements withthe Transferors w

202、hile other parts of our operations are conducted through ouroperating subsidiaries established in Hong Kong and mainland China.Although wetook every precaution available to effectively enforce the contractual andcorporate relationship with the Mengwei VIE,these contractual arrangements maystill be l

203、ess effective than direct ownership and that we may incur substantialcosts to enforce the terms of the arrangements.For example,the Transferors,namely the operating agents of the Mengwei VIE,could breach their contractualarrangements by,among other things,failing to conduct their operations in anacc

204、eptable manner or taking other actions that are detrimental to our interests.Ifwe had direct ownership of the Mengwei VIE,we would be able to exercise our rightsas a direct asset-holder to directly and effectively effect changes in themanagement and daily operation of the Mengwei VIE.However,under t

205、he currentcontractual arrangements,we rely on the performance of the Transferors of theirobligations under the contracts to exercise control over the Mengwei VIE.TheTransferors may not act in our best interests or may not perform their obligationsunder these contracts.In addition,failure of the Tran

206、sferors to perform certainobligations could compel us to rely on legal remedies available under PRC laws,including seeking specific performance or injunctive relief,and claiming damages,which may not be effective or sufficient.All the agreements under the Mengwei VIEarrangements are governed by PRC

207、law and provide for the resolution of disputesthrough arbitration in China.Accordingly,these contracts would be interpreted inaccordance with PRC law and any disputes would be resolved in accordance with PRClegal procedures.The legal system in the PRC is not as developed as in some otherjurisdiction

208、s,such as the United States.As a result,uncertainties in the PRClegal system could limit our ability to enforce these VIE agreements.The status ofthe rights of DDC Cayman,as a Cayman Islands holding company,with respect to thecontractual arrangements with the Transferors is uncertain.Meanwhile,there

209、 arevery few precedents and little formal guidance as to how contractual arrangementsin the context of a VIE structure should be interpreted or enforced under PRC law.There remain significant uncertainties regarding the ultimate outcome of sucharbitration should legal action become necessary.In addi

210、tion,under PRC law,rulings10Table of Contentsby arbitrators are final,parties cannot appeal the arbitration results in courts,and if the losing parties fail to carry out the arbitration awards within aprescribed time limit,the prevailing parties may only enforce the arbitrationawards in PRC courts t

211、hrough arbitration award recognition proceedings,which wouldrequire additional expenses and delay.In the event we are unable to enforce theseVIE agreements for the Mengwei VIE,or if it suffers significant delay or otherobstacles in the process of enforcing these VIE agreements,we may not be able toe

212、xert effective control over the Mengwei VIE,and our ability to conduct ourbusiness may be negatively affected.On July 1,2021,the Company,through its wholly owned subsidiary,SH DDC,entered into a purchase agreement(“the SPA”)with Mr.Zheng Dongfang and Mr.HanMin(“collectively the YJW Seller”),the shar

213、eholders of Fujian Yujiaweng FoodCo.,Ltd.(“Yujiaweng”)to acquire 60%interests of Yujiawengs product salesbusiness,primarily including distribution contracts,the sales and marketing team,procurement team and other supporting function personnel(“the YJW TargetAssets”).Yujiaweng is principally engaged

214、in manufacturing and the distributionof snack foods.SH DDC and Mr.Zheng Dongfang agreed to form an entity(“YJWNewco”)with the Company holding 60%equity interest and Mr.Zheng Dongfangholding 40%equity interests.According to the SPA,during the period from July 1,2021 until the date when YJW Newco is f

215、ormed(“the transition period”),theCompany manages and operates the Target Assets and is entitled to 60%of the netprofit arising from the operation of the Target Assets.On July 1,2021,the Company,through its wholly owned subsidiary,SH DDC,entered into a purchase agreement(“the SPA”)with Mr.Xu Fuyi,(“

216、the KeKeSeller”),the shareholder of Fujian Keke Food Co.,Ltd.(“KeKe”)and Mr.ZhengDongfang,the president of KeKe,to acquire a 60%interest in KeKes product salesbusiness,primarily including distribution contracts,the sales and marketing team,procurement team and other supporting function personnel(“th

217、e KeKe TargetAssets”).KeKe is principally engaged in manufacturing and distribution of candyproducts.SH DDC and Mr.Zheng Dongfang agreed to form an entity(“KeKe Newco”)with the Company holding 60%equity interest and Mr.Zheng Dongfang holding 40%equity interests.According to the SPA,during the period

218、 from July 1,2021 and thedate when KeKe Newco is formed(“the transition period”),the Company manages andoperates the Target Assets and is entitled to 60%of the net profit arising fromthe operation of the Target Assets.On February 1,2022,the Company,through its wholly owned subsidiary,enteredinto a p

219、urchase agreement with Mr.LIN Kai Hang,Mr.SIO Leng Kit and Mr.Tang WaiCheung,to acquire 51%shares of Lins Group Limited(“Lins Group”).LinsGroup have its own brand“Deliverz”and principally engaged in manufacturing anddistribution of RTC products with its major online sales channel.This was anupstream

220、 integration where Lins Group is the major supplier of RTC meal kits forthe companys Hong Kong operations.This acquisition allows the company tooptimize cost structure for the RTC meal kits in the Hong Kong market.It alsoenables the company to expand its product offerings with its own productionfaci

221、lity.As of April 1,2022,all contractual arrangements with Weishi and City Modern,have been terminated.As a result of the termination of the contractualarrangements with the Weishi and City Modern VIEs,we expect to be able to focusour capital and efforts on selling our products through online e-comme

222、rce platformsand offline distributors and retailers.We intend for the termination anddiscontinuation of business streams to reduce the companys overall net losses,and free up capital to be allocated into our other fast growing RTH,RTC,RTE andplant based product businesses.On May 1,2022,the Company,t

223、hrough its wholly owned subsidiary,entered intoa purchase agreement with Mr.Gao Xiaomin,Mr.Zhang Yi and Ms Chen Di,to acquire51%shares of Shanghai Lishang Trading Ltd,(“Lishang”).Lishang is principallyengaged in manufacturing and distribution of private label products.Thisacquisition was completed d

224、uring the nation-wide lock down when the companyexpedited its strategy to diversify revenue streams and improve overall marginstructure.Lishang has strong sales channel access into the corporate giftingchannel which carries higher margin compared to the companys existing e-commerceand offline distri

225、bution channels.By acquiring Lishang,the Company now hashealthier gross margins as well as access to sales and distribution partnershipswith global FMCG brands such as Pepsi Co(Lays brand.)These partnerships in turncan help the company secure better traffic and overall sales conversion on socialcomm

226、erce platforms to drive higher sales for its own branded product business.On June 17,2022,the“YJW Newco”,Quanzhou DayDayCook Food Co.,Limited(“Quanzhou DDC”)was formed.As part of the transaction dated July 1,2021,theYJW Target Assets and Keke Target Assets from the acquisition were transferred intoQ

227、uanzhou DDC.And on the same day,SH DDC has obtained control over the YJW TargetAssets and Keke Target Assets,and the results were consolidated into the Group.On June 17,2022,the“KeKe Newco”,Quanzhou Weishi Food Co.,Limited wasformed.The company does not hold any assets or operations.11Table of Conte

228、ntsThe following diagram illustrates our corporate structure as of the date ofthis prospectus.Unless otherwise indicated,equity interests depicted in thisdiagram are held 100%.Government Regulations and Approvals for this OfferingAs our operations are currently conducted through our operating entiti

229、esestablished in Hong Kong and mainland China and we have VIE arrangements withvarious Chinese entities and individuals to enable us to have the ability tocontrol a number of online stores,we are potentially subject to significantregulations by various agencies of the Chinese government.The Regulati

230、ons onMergers and Acquisitions of Domestic Companies by Foreign Investors,or the M&ARules,adopted by six PRC regulatory agencies in 2006 and amended in 2009,requirean overseas special purpose vehicle formed for listing purposes throughacquisitions of PRC domestic companies and controlled by PRC comp

231、anies orindividuals to obtain the approval of the CSRC and Ministry of Commerce of the PRC(“MOFCOM”),prior to the listing and trading of such special purpose vehiclessecurities on an overseas stock exchange.Substantial uncertainty remains regardingthe scope and applicability of the M&A Rules to offs

232、hore special purpose vehicles.As at the date of this prospectus,we have been advised by Grandall Law Firm(Shanghai)that CSRCs approval under the M&A Rules is not required for thelisting and trading of our Class A Ordinary Shares on the NYSE Group in the contextof this offering given that(i)our PRC s

233、ubsidiaries were incorporated as whollyforeign-owned enterprises by means of direct investment rather than by merger oracquisition of equity interest or assets of a PRC domestic company owned by PRCcompanies or individuals as defined under the M&A Rules that are DDC Caymansbeneficial owners;(ii)we a

234、re a company incorporated under the laws of the CaymanIslands controlled by non-PRC citizens and we do not fit into the definition of“overseas special purpose vehicle”under the M&A Regulations;and(iii)the CSRCcurrently has not issued any definitive rule or interpretation concerning whetherofferings

235、like ours under this prospectus are subject to the M&ARules.As such,we have never conducted any mergers or acquisitions of any PRC domestic companieswith a related party relationship.MOFCOMs approval under the M&A Rules is alsonot required as we have never conducted any mergers or acquisitions of an

236、y PRCdomestic companies with a related party relationship.We cannot assure you thatrelevant PRC governmental agencies,including the CSRC,would reach the sameconclusion as we do.On July6,2021,the General Office of the Central Committee of the CommunistParty of China and the General Office of the Stat

237、e Council jointly issued theOpinions on Strictly Cracking Down on Illegal Securities Activities According toLaw(the“Opinions”),which called for strengthened regulation over illegalsecurities activities and12Table of Contentssupervision on overseas listings by China-based companies and propose to tak

238、eeffective measures.As at the date of this prospectus,no official guidance orrelated implementation rules have been issued in relation to the Opinions,and theinterpretation and implementation of the Opinions also remain unclear to someextent at this stage.Based on our understanding of the current PR

239、C laws andregulations in effect at the time of this prospectus,no prior permission isrequired under the M&A Rules or the Opinions from any PRC governmental authorities(including the CSRC)for consummating this offering by our company,as advised byour PRC legal adviser,Grandall Law Firm(Shanghai).Howe

240、ver,there can be noassurance that the relevant PRC governmental authorities,including the CSRC,wouldreach the same conclusion as us,or that the CSRC or any other PRC governmentalauthorities would not promulgate new rules or new interpretation of current rules(with retrospective effect)to require us

241、to obtain the CSRC or other PRCgovernmental approvals for this offering.If we or our subsidiaries inadvertentlyconclude that such permission is not required,our ability to offer or continue tooffer our ClassA Ordinary Shares to investors could be significantly limited orcompleted hindered,which coul

242、d cause the value of our ClassA Ordinary Shares tosignificantly decline or become worthless.Our Group may also face sanctions by theCSRC,the CAC or other PRC regulatory agencies.These regulatory agencies mayimpose fines and penalties on our operations in China,limit our ability to paydividends outsi

243、de of China,limit our operations in China,delay or restrict therepatriation of the proceeds from this offering into China or take other actionsthat could have a material adverse effect on our business,financial condition,results of operations and prospects,as well as the trading price of oursecuriti

244、es.The PRC Data Security Law,which took effect on September1,2021,imposesdata security and privacy obligations on entities and individuals that carry outdata activities,provides for a national security review procedure for dataactivities that may affect national security and imposes export restricti

245、ons oncertain data and information.On August20,2021,the Standing Committee of theNational Peoples Congress,or the SCNPC,promulgated the PRC Personal InformationProtection Law(the“PIPL”),which took effect on November1,2021.The PIPLsets out the regulatory framework for handling and protection of perso

246、nalinformation and transmission of personal information to overseas.The PRCregulatory requirements regarding cybersecurity are constantly evolving.Forinstance,various regulatory bodies in China,including the CyberspaceAdministration of China,the Ministry of Public Security and State Administrationfo

247、r Market Regulation,or the SAMR,have enforced data privacy and protection lawsand regulations with varying and evolving standards and interpretations.OnNovember14,2021,the Cyberspace Administration of China,or the CAC,issued theDraft Cyber Data Security Regulations for public comments,pursuant to wh

248、ich,dataprocessors carrying out the following activities must,in accordance with therelevant national regulations,apply for a cybersecurity review:(i)the merger,reorganization or spin-off of internet platform operators that possess a largenumber of data resources related to national security,economi

249、c development andpublic interests that affects or may affect national security;(ii)listing in aforeign country of data processors that process the personal information of morethan one million users;(iii)listing in HongKong of data processors that affectsor may affect national security;and(iv)other d

250、ata processing activities thataffect or may affect national security.The scope of and threshold for determiningwhat“affects or may affect national security”is still subject to uncertainty andfurther elaboration by the CAC.On December 28,2021,the Cyberspace Administration of China(the“CAC”),and12 oth

251、er relevant PRC government authorities published the amended CybersecurityReview Measures,which came into effect on February 15,2022.The finalCybersecurity Review Measures provide that a“network platform operator”thatpossesses personal information of more than one million users and seeks a listingin

252、 a foreign country must apply for a cybersecurity review.Further,the relevantPRC governmental authorities may initiate a cybersecurity review against anycompany if they determine certain network products,services or data processingactivities of such company affect or may affect national security.Thr

253、ough thecontractual arrangements with Weishi,DDC SH had collected and possessed personalinformation of more than one million users.After the contractual arrangements withWeishi were terminated in April 2022,DDC SH still have been possessing this amountof personal information which are stored in main

254、land China.For purposes of theCybersecurity Review Measures,we have applied for the cybersecurity review withrespect to our proposed overseas listing pursuant to the Cybersecurity ReviewMeasures.As there remains significant uncertainty in the interpretation andenforcement of relevant PRC cybersecuri

255、ty laws and regulations,we cannot assureyou that we would not become subject to enhanced cybersecurity review orinvestigations launched by PRC regulators in the future.Any failure or delay inthe completion of the cybersecurity review procedures or any other non-compliancewith the related laws and re

256、gulations may result in rectification,fines or otherpenalties,including suspension of business,website closure,removal of our appfrom the relevant app stores,and revocation of prerequisite licenses,as well asreputational damage or legal proceedings or actions against us,which may havematerial advers

257、e effect on our business,financial condition or results ofoperations.See“RiskFactors Risks Relating to Doing Business in China andHongKongWe may be liable for improper collection,use or appropriation ofpersonal information provided by our customers.”13Table of ContentsOn February 17,2023,CSRC promul

258、gated the Trial Administrative Measures ofOverseas Securities Offering and Listing by Domestic Enterprises(the“TrialMeasures”),which became effective on March 31,2023.On the same date,the CSRCcirculated Supporting Guidance Rules No.1 through No.5,Notes on the TrialMeasures,Notice on Administration A

259、rrangements for the Filing of Overseas Listingsby Domestic Enterprises and relevant CSRC Answers to Reporter Questions(collectively,the“Guidance Rules and Notice”)on the CSRCs official website.Under the Trial Measures,either direct or indirect overseas offering and listingby domestic companies shall

260、 fulfill the filing procedure with the CSRC withsubmitting relevant materials.Any overseas offering and listing made by an issuerthat meets both the following conditions will be determined as indirect:(1)50%ormore of the issuers operating revenue,total profit,total assets or net assetsas documented

261、in its audited consolidated financial statements for the most recentaccounting year is accounted for by domestic companies;and(2)the main parts ofthe issuers business activities are conducted in the Chinese Mainland,or itsmain places of business are located in the Chinese Mainland,or the senior mana

262、gersin charge of its business operation and management are mostly Chinese citizens ordomiciled in the Chinese Mainland.The determination as to whether or not anoverseas offering and listing by domestic companies is indirect,shall be made on asubstance over form basis.When certain circumstances happe

263、n,overseas offering andlisting shall not be made.And If the intended overseas offering and listingnecessitates a national security review,relevant security review procedures shallbe completed according to law before the application for such offering and listingis submitted to any overseas parties su

264、ch as securities regulatory agencies andtrading venues.Pursuant to the Trial Measures and the Guidance Rules and Notice,initial public offerings or listings in overseas markets shall be filed with theCSRC within 3 working days after the relevant application is submitted overseas,while PRC domestic e

265、nterprises that have submitted valid applications for overseasofferings and listing but have not obtained the approval from the relevant overseasregulatory authority or overseas stock exchanges shall complete filings with theCSRC prior to their overseas offerings and listings.We will submit the fili

266、ngmaterials with the CSRC to fulfill the filing procedure with the CSRC as perrequirement of the Trial Measures,but we cannot predict whether or how soon itwill be able to complete such proceeding.Any failure of us to obtain the relevantapproval or complete the filings and other relevant regulatory

267、procedures in atimely manner may significantly limit or completely hinder our ability to offer orcontinue to offer our Class A Ordinary Shares,cause significant disruption to ourbusiness operations,and severely damage our reputation,which would materially andadversely affect our financial condition

268、and results of operations and cause ourClass A Ordinary Shares to significantly decline in value or become worthless.See“Risk Factors The approval of the China Securities Regulatory Commission andother PRC governmental authorities provided under the M&A rules are not required inconnection with this

269、offering,and,if required,we cannot predict whether we willbe able to obtain such approval.Except for the cybersecurity review from the CACand the CSRC filing for this issuance and listing,we are not required to obtainany permission or approval from any Chinese authority to issue securities toforeign

270、 investors or in connection with this offering,which,we cannot predict,whether or how soon will be completed.”On February 24,2023,the CSRC,together with the MOF,National Administrationof State Secrets Protection and National Archives Administration of China,revisedthe Provisions on Strengthening Con

271、fidentiality and Archives Administration forOverseas Securities Offering and Listing,which were issued by the CSRC andNational Administration of State Secrets Protection and National ArchivesAdministration of China in 2009,or the“Provisions.”The revised Provisions wereissued under the title the“Prov

272、isions on Strengthening Confidentiality andArchives Administration of Overseas Securities Offering and Listing by DomesticCompanies”,and came into effect on March 31,2023,together with the TrialMeasures.One of the major revisions to the revised Provisions is expanding theirapplication to cover indir

273、ect overseas offering and listing,as is consistent withthe Trial Measures.The revised Provisions require that,among other things,(a)adomestic company that plans to,either directly or indirectly through its overseaslisted entity,publicly disclose or provide to relevant individuals or entitiesincludin

274、g securities companies,securities service providers and overseasregulators,any documents and materials that contain state secrets or workingsecrets of government agencies,shall first obtain approval from competentauthorities according to law,and file with the secrecy administrative departmentat the

275、same level;and(b)a domestic company that plans to,either directly orindirectly through its overseas listed entity,publicly disclose or provide torelevant individuals and entities including securities companies,securitiesservice providers and overseas regulators,any other documents and materials that

276、,if leaked,will be detrimental to national security or public interest,shallstrictly fulfill relevant procedures stipulated by applicable national regulations.Any failure or perceived failure by our Company or our PRC subsidiaries to complywith the above confidentiality and archives administration r

277、equirements under therevised Provisions and other PRC laws and regulations may result in the relevantentities being held legally liable by competent authorities and referred to thejudicial organ to be investigated for criminal liability if suspected of committinga crime.14Table of ContentsRequisite

278、Licenses and Approvals for Our OperationsOur business is subject to governmental supervision and regulation by therelevant PRC governmental authorities,including but not limited to the StateCouncil,the SAMR,the Ministry of Commerce(the“MOFCOM”),the State InternetInformation Office,the General Admini

279、stration of Customs and other governmentalauthorities in charge of the relevant services provided by us.These governmentauthorities promulgate and enforce regulations that cover various aspects of theoperation of food products and e-commerce,including entry into these industries,scope of permitted b

280、usiness activities,licenses and permits for various businessactivities.To operate our general business activities currently conducted in China,we arerequired and has obtained business licenses and food operation licenses,except forQuanzhou Weishi Food Co.,Limited which does not hold any assets or op

281、erations fornow and we are in the process of applying for relevant food operation licenses forit.In addition,SH Lashu have been filed for record as consignee or consignor ofimport and export goods.However,we cannot assure you that we can successfullyrenew these licenses in a timely manner.No applica

282、tion for any such licenses havebeen denied.See“Risk FactorsRisks Relating to Our Business and IndustryIf wefail to obtain and maintain the requisite licenses and approvals required under thecomplex regulatory environment applicable to our businesses in China,or if we arerequired to take compliance a

283、ctions that are time-consuming or costly,ourbusiness,results of operations and financial condition may be materially andadversely affected.”The following tables present the Companys condensed consolidating schedulesdepicting the consolidated statements of comprehensive loss for the fiscalyearsended

284、December 31,2021 and 2022 of the Company,its subsidiaries,the VIEs(comprising the Weishi and City Modern VIEs,and the Mengwei VIE)and thecorresponding eliminating adjustments separately.December31,2022 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB RMB RMB RMBTotal Revenue

285、169,787,120 11,648,984(1,850,038)(2)179,586,066Grossprofit 39,588,296 4,513,915 43,926,869Loss fromoperations(51,660,369)(26,469,787)(1,698,798)(80,004,296)Share of lossofsubsidiariesandconsolidatedVIEs(18,180,868)18,180,868(1)Net Loss(122,248,608)(30,188,188)(1,360,988)3,995,338(122,248,608)Decembe

286、r31,2021 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB RMB RMB RMBTotal Revenue 145,865,084 66,408,787(7,094,429)(2)205,179,442Grossprofit 15,834,045 20,623,563 36,457,608Loss fromoperations(32,861,932)(54,509,591)(26,248,467)(113,619,990)Share of lossofsubsidiariesandcons

287、olidatedVIEs(79,060,126)79,060,126(1)Net Loss(458,683,434)(51,028,568)(20,937,129)71,965,697(458,683,434)_(1)To eliminate the Companys share of loss of its subsidiaries and consolidated VIEs.(2)To eliminate the related party transactions between subsidiaries of the Company andconsolidated VIEs15Tabl

288、e of ContentsThe following tables present the Companys condensed consolidating schedulesdepicting the consolidated balance sheets as of December31,2021 and 2022 of theCompany,its subsidiaries,the VIEs(comprising the Weishi and City Modern VIEs,and the Mengwei VIE)and corresponding eliminating adjust

289、ments separately.December31,2022 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB RMB RMB RMBASSETS Currentassets Cash and cashequivalents 23,066,336 3,383,140 352,291 26,801,767Restricted cash 69,646,001 456,863 70,102,863Amounts duefrom relatedparties Other currentassets 20

290、,253,623 35,458,095 3,201,058(175,342)(2)58,737,435Total currentassets 112,965,960 39,298,098 3,553,349(175,342)155,642,065Non-currentassets Long-terminvestment 22,440,969 22,440,969Other non-currentassets 73,920,401 3,374,338 77,294,739Total non-currentassets 22,440,969 73,920,401 3,374,338 99,735,

291、708Total assets 135,406,929 113,218,499 6,927,687(175,342)255,377,773 Liabilities Currentliabilities Share of lossofsubsidiariesandconsolidatedVIEs 49,689,927 (49,689,927)(3)Amounts due torelatedparties Other currentliabilities 116,452,96 137,120,053 8,219,721 261,792,735Total currentliabilities 166

292、,142,888 137,120,053 8,219,721(49,689,927)261,792,735Non-currentliabilities 102,669,792 9,894,709 112,564,501Total non-currentliabilities 102,669,792 9,894,709 112,564,501Totalliabilities 268,812,680 147,014,762 8,219,721(49,689,927)374,357,236 Mezzanineequity 1,368,520,061 1,368,520,061Totalshareho

293、ldersdeficit(1,501,925,812)(33,796,263)(1,292,034)(49,514,585)(2)(3)(1,487,499,524)Totalliabilities,mezzanineequity andshareholdersdeficit 135,406,929 113,218,499 6,927,687(175,342)255,377,77316Table of Contents December31,2021 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB

294、 RMB RMB RMBASSETS Current assets Cash and cashequivalents 7,791,447 4,585,770 1,116,284 13,493,501Restricted cash 63,757,000 63,757,000Amounts due fromrelated parties 21,210,284 302,887,132 83,274,065(407,371,481)(1)Other currentassets 8,826,824 29,362,193 8,305,565(4,279,414)(2)42,215,168Total cur

295、rentassets 101,585,555 336,835,095 92,695,914(411,650,895)119,465,669Non-currentassets Long-terminvestment 49,289,160 2,460,000 51,749,160Other non-currentassets 53,552,489 3,733,646 57,286,135Total non-currentassets 49,289,160 53,552,489 6,193,646 109,035,295Total assets 150,874,715 390,387,584 98,

296、889,560(411,650,895)228,500,964 Liabilities Currentliabilities Share of loss ofsubsidiariesandconsolidatedVIEs 18,359,545 (18,359,545)(3)Amounts due torelated parties 2,257,268 267,167,771 145,358,698(407,371,481)(1)7,412,256Other currentliabilities 87,896,086 73,274,896 29,583,313(21,125,869)169,62

297、8,426Total currentliabilities 108,512,899 340,442,667 174,942,011(446,856,895)177,040,682Non-currentliabilities 79,021,847 5,961,794 2,900,000 87,883,641Totalliabilities 79,021,847 5,961,794 2,900,000 87,883,641Mezzanineequity 187,534,746 346,404,461 177,842,011(446,856,895)264,924,323 Totalsharehol

298、dersdeficit 1,149,874,154 1,149,874,154Totalliabilities,mezzanineequity andshareholdersdeficit(1,186,534,185)43,983,123(78,952,451)35,206,000(2)(3)(1,186,297,513)_(1)Being elimination of balances resulted from amounts paid/received by VIEs on behalf of theCompanys subsidiaries.(2)To eliminate the lo

299、ans provided by the Shanghai DayDayCook Information Technology Co.,Ltd.to the VIE.(3)To eliminate the Companys share of loss of its subsidiaries and consolidated VIEs.17Table of ContentsThe following tables present the Companys condensed consolidating schedulesdepicting the consolidated cash flows f

300、or the fiscalyears ended December31,2021and 2022 of the Company,its subsidiaries,the VIEs(comprising the Weishi and CityModern VIEs,and the Mengwei VIE),and corresponding eliminating adjustmentsseparately.December31,2022 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB RMB RM

301、B RMBNet cash used inoperatingactivities(2,356,633)(32,814,117)(1,912,315)(37,083,065)Net cash used ininvestingactivities(348,230)(87,847)(8,550)(1)(444,627)Net cash provided byfinancingactivities 23,868,752 26,198,411 1,284,986 (1)51,352,149Effect of foreigncurrency exchangerate changes oncash 5,82

302、9,672 5,829,672Net(decrease)/increasein cash,cashequivalents andrestricted cash 21,163,889(873,881)(635,879)19,654,129Cash,cashequivalents andrestricted cash atthe beginning ofthe period 71,548,447 4,585,770 1,116,284 77,250,501Cash,cashequivalents andrestricted cashat the end of theperiod 92,712,33

303、6 3,711,889 480,405 96,904,630 December31,2021 TheCompany Subsidiaries VIEs Eliminationadjustments Consolidated RMB RMB RMB RMB RMBNet cash used inoperating activities(25,175,497)(60,234,248)(6,015,545)(91,425,290)Net cash used ininvesting activities(62,413,924)2,029,305(96,601)52,123,958(1)(8,357,2

304、62)Net cash provided byfinancing activities 141,201,960 19,683,516 6,995,537(52,123,958)(1)115,757,055Effect of foreigncurrency exchangerate changes on cash 2,652,471 2,652,471Net(decrease)/increasein cash,cashequivalents andrestricted cash 53,612,539(35,868,956)883,391 18,626,974Cash,cash equivalen

305、tsand restricted cashat the beginning ofthe period 17,935,908 40,454,726 232,893 58,623,527Cash,cashequivalents andrestricted cash atthe end of theperiod 71,548,447 4,585,770 1,116,284 77,250,501_(1)Being elimination of cash contributions from the Company to its subsidiary.18Table of ContentsTransfe

306、r of Cash Through our OrganizationCurrently,DDC Cayman is incorporated in Cayman Islands to be the ultimateparent company of the Group.As a holding company with no material operations ofour own,DDC Cayman conduct our operations through our operating subsidiariesestablished in HongKong and mainland C

307、hina.DDC Cayman is permitted under thelaws of Cayman Islands to provide funding to our subsidiaries in Cayman Islands,HongKong and mainland China through loans or capital contributions on the amountof the funds.DDC Cayman can distribute earnings from its businesses,includingsubsidiaries,to the U.S.i

308、nvestors as well as the ability to settle amounts owedunder intercompany agreements.Our operating subsidiaries are permitted under the laws of the PRC andHong Kong,respectively,to provide funding to DDC Cayman,the holding companyincorporated in the Cayman Islands through dividend distributions.Our G

309、roupcurrently intend to retain all available funds and future earnings,if any,for theoperation and expansion of our business and do not anticipate declaring or payingany dividends in the foreseeable future.We currently do not have any dividendpolicy,and we do not anticipate declaring or paying divid

310、ends in the foreseeablefuture.We intend to retain all available funds and any future earnings to fund thedevelopment and expansion of our business.However,to the extent cash and assetsin our business are in the PRC or our PRC entities,the funds/assets may not beavailable to fund operations or for ot

311、her use outside of the PRC due tointerventions in or the imposition of restrictions and limitations on the abilityof us or our subsidiaries,by the PRC government.If our subsidiaries incur debt onits own behalf in the future,the instruments governing such debt may restricttheir ability to pay dividen

312、ds to us.Other than cash transferred in the ordinarycourse of business among our subsidiaries,there were no other significant cashtransfers and transfers of other assets among DDC Cayman and its subsidiaries todate.Moreover,to the extent cash and assets in our business are in the PRC or ourPRC entit

313、ies,the funds/assets may not be available to fund operations or for otheruse outside of the PRC due to interventions in or the imposition of restrictionsand limitations on the ability of us or our subsidiaries,by the PRC government.Currently,our operations are currently conducted through our operati

314、ngentities established in HongKong and mainland China,and we have VIE arrangementswith various Chinese entities and individuals to enable us to have the ability tocontrol a number of online stores.During the two years ended December 31,2021 and2022,we had conducted part of our operations in China th

315、rough contractualarrangements with the Weishi and City Modern VIEs(namely,Shanghai WeishiInformation Technology Co.,Ltd.,Shanghai City Modern Agriculture Development Co.,Ltd.,Shanghai City Vegetable Production and Distribution Co-op,Shanghai JiapinVegetable Planting Co-op,Shanghai Jiapin Ecological

316、Agriculture Co-op).Throughsuch contractual arrangements,we,through our indirect wholly-owned PRC subsidiarySH DDC,control and receive the economic benefits of the Weishi and City ModernVIEs without owning any direct equity interest in them.As of April2022,suchcontractual arrangements with the Weishi

317、 and City Modern VIEs have been terminated.However,we still have contractual arrangements with Chongqing Mengwei TechnologyCo.,Ltd.,Liao Xuefeng,Chongqing Changshou District Weibang Network Co.,Ltd.andChongqing Yizhichan Snack Food Electronic Commerce Service Department to enable usto have the abili

318、ty to control a number of online stores purchased from them sincethe titles of such online stores cannot be transferred to us due to the limitationsfrom the policies of certain online platforms.These online stores which we referto collectively as the Mengwei VIE,are considered VIEs and SH DDC is the

319、 primarybeneficiary.The contractual arrangements for the Mengwei VIE are not designed tocreate any ownership over the Mengwei VIE but are designed to provide SH DDC withthe power,rights,and obligations equivalent in all material respects to those itwould possess as the principal asset-holder of the

320、Mengwei VIE.Neither DDC Caymannor any of its subsidiaries has an equity ownership or direct foreign investmentin,or control of,through such ownership or investment,the Mengwei VIE.Consolidated VIEs are the assets in which our PRC subsidiary SH DDC,throughcontractual arrangements,exercises effective

321、control over the operating activitiesthat most impact the economic performance,bears the risks of,and enjoys therewards normally associated with ownership of the assets,and therefore SH DDC isthe primary beneficiary of the Mengwei VIE and have,for accounting purposes,consolidated their financial res

322、ults in our consolidated financial statements inaccordance with U.S.GAAP.In this prospectus,any description of control over theMengwei VIE or benefits from the Mengwei VIE that accrue to us is made based on theassumption that we have met and will continue to meet all the conditions forconsolidation

323、under U.S.GAAP.Uncertainties exist as to our ability to enforce thecontractual agreements with regard to the Mengwei VIE,and the enforceability ofsuch contractual agreements has not been tested in a court of law.See“CorporateHistory and Structure Contractual Arrangements Regarding Several Online Sto

324、res the Mengwei VIE”below.HongKong is a special administrative region of the PRC and the basic policiesof the PRC regarding HongKong are reflected in the Basic Law,providing HongKongwith a high degree of autonomy and executive,legislative and independent judicialpowers,including that of final adjudi

325、cation under the principle of“one country,two systems”.Under Hong Kong law,dividends could only be paid out ofdistributable profits(that is,accumulated realized profits19Table of Contentsless accumulated realized losses)or other distributable reserves.Dividends cannotbe paid out of share capital.Und

326、er the current practice of the Inland RevenueDepartment of HongKong,no tax is payable in HongKong in respect of dividendspaid by us.We may make loans to our PRC subsidiaries subject to the approval orregistration from governmental authorities and limitation of amount,or we may makeadditional capital

327、 contributions to our wholly foreign-owned subsidiaries in China.Any loans to our subsidiaries in China are subject to foreign debt registrations.In addition,a foreign-invested enterprise,or FIE,shall use its capital pursuantto the principle of authenticity and self-use within its business scope.And

328、 thecapital shall not be used for the purposes prohibited by law.Non-investingforeign-invested enterprises are permitted to make equity investments in the PRCwith their capital funds in accordance with applicable PRC laws and regulationsunder the premise that the domestic investment projects are tru

329、e and in compliancewith applicable PRC laws and regulations.As the relevant government authoritieshave broad discretion in interpreting the regulation,it is unclear whether SAFEwill permit such capital funds to be used for equity investments in the PRC inactual practice.Under existing PRC foreign ex

330、change regulations,payment of current accountitems,such as profit distributions and trade and service-related foreign exchangetransactions,can be made in foreign currencies without prior approval from StateAdministration of Foreign Exchange,or SAFE,by complying with certain proceduralrequirements.Th

331、erefore,our subsidiaries are able to pay dividends in foreigncurrencies to us without prior approval from SAFE,subject to the condition thatthe remittance of such dividends outside of the PRC complies with certainprocedures under PRC foreign exchange regulations,such as the overseas investmentregist

332、rations by our shareholders or the ultimate shareholders of our corporateshareholders who are PRC residents.Approval from,or registration with,appropriate government authorities is,however,required where the RMB is to beconverted into foreign currency and remitted out of China to pay capital expense

333、ssuch as the repayment of loans denominated in foreign currencies.The PRCgovernment may also at its discretion restrict access in the future to foreigncurrencies for current account transactions.Current PRC regulations permit our PRCsubsidiaries to pay dividends to the Company only out of their accumulated profits,if any,determined in accordance with Chinese accounting standards and regulations.As