Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 86

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 86
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 are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if
there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered
securities in a particular case. Further, if we were no longer listed on the NYSE American, our securities would not be covered securities
and we would be subject to regulations in each state in which we offer our securities.

We have identified one material weakness
in our internal control over financial reporting. If we are unable to remediate the material weakness, or if our remediation of the material
weakness is not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain proper and effective
internal control over financial reporting, our ability to produce accurate and timely consolidated financial statements could be impaired,
investors may lose confidence in our financial reporting and the trading price of our Class A ordinary shares may decline.

Pursuant to Section 404 of
Sarbanes-Oxley Act of 2002, our management will be required to report upon the effectiveness of our internal control over financial reporting
beginning with the annual report for our fiscal year ending December 31, 2024. When we lose our status as an “emerging growth company”
and reach an accelerated filer threshold, our independent registered public accounting firm will be required to attest to the effectiveness
of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal
control over financial reporting are complex and require significant documentation, testing and possible remediation. To comply with the
requirements of being a reporting company under the Exchange Act, we will need to upgrade our information technology systems, implement
additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. If we
or, if required, our auditor is unable to conclude that our internal control over financial reporting is effective, investors may lose
confidence in our financial reporting and the trading price of our Class A ordinary shares may decline.

We and our independent registered
public accounting firm identified one material weakness in our internal control over financial reporting as of December 31, 2023. The
material weakness identified is our lack of sufficient accounting personnel with appropriate U. S. GAAP knowledge to prepare financial
statements in accordance with U. S. GAAP and SEC reporting requirements. Neither we nor our independent registered public accounting firm
undertook