Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 141

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 141
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 adversely affected as uncertainty remains over whether there will be a compromise solution. In the worst case, our Class A Ordinary
Shares could be delisted if we were unable to cure the situation to meet the PCAOB inspection requirement in time.

On December 2, 2021,
the SEC adopted final rules implementing the HFCAA. On a rolling basis, the SEC will identify issuers with auditors that the PCAOB
is unable to inspect or investigate completely because of non-US governmental restrictions. If an issuer is identified for three consecutive years,
the SEC will publish an order prohibiting the trading of the issuer’s securities on a U.S. stock exchange and the U.S. over-the-counter
market. If the SEC identifies us for three consecutive years as an issuer with auditors that the PCAOB is unable to inspect or investigate
completely because of non-US governmental restrictions, under the HFCAA, our securities may be prohibited from being traded on a national
securities exchange or in the over-the-counter trading market in the United States. Pursuant to the HFCAA, the PCAOB issued a Determination
Report on December 16, 2021, which found that the PCAOB is unable to inspect or investigate completely registered public accounting
firms headquartered in mainland China or Hong Kong, a Special Administrative Region of the PRC, because of a position taken by one
or more authorities in the PRC or Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting
firms which are subject to these determinations. Our registered public accounting firm, KPMG Huazhen LLP, is headquartered in mainland
China or Hong Kong and was identified in this report as a firm subject to the PCAOB’s determination.

On Aug. 26, 2022, the PCAOB
signed a Statement of Protocol with the CSRC and the Ministry of Finance of the PRC governing inspections and investigations of audit
firms based in China and Hong Kong, and stated the cooperation will be launched soon. The Statement scheduled several important issues
including the purpose, scope and form of the cooperation, use of information and specific data protection during the cooperation, etc.
In particular, Chinese authorities have committed to four critical items: First, in accordance with the Sarbanes-Oxley Act, the PCAOB
has independent discretion to select any issuer audits for inspection or investigation; Second, the PCAOB gets direct access to interview
or take testimony from all personnel of the audit firms whose issuer engagements are being inspected