Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 79

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 79
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standard-setting are effective. It is unclear if and when the SEC will make rules to implement the recommendations proposed in the PWG
report, especially in light of its ongoing rulemaking pursuant to the HFCAA. Any of these factors and developments could potentially
lead to a material adverse effect on our business, prospects, financial condition and results of operations.

Proceedings instituted by
the SEC against Chinese affiliates of the “big four” accounting firms could result in financial statements being determined
to not be in compliance with the requirements of the Exchange Act. In December 2012, the SEC instituted administrative proceedings
against the “big four” PRC-based accounting firms, including our former independent registered public accounting firm, alleging
that these firms had violated U. S. securities laws and the SEC’s rules and regulations thereunder by failing to provide to
the SEC the firms’ audit work papers with respect to certain PRC-based companies that are publicly traded in the United States.
On January 22, 2014, the administrative law judge, or the ALJ, presiding over the matter rendered an initial decision that each of
the firms had violated the SEC’s rules of practice by failing to produce audit papers and other documents to the SEC. On February 6,
2015, the four China-based accounting firms each agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension
of their ability to practice before the SEC and audit U. S.-listed companies. The settlement required the firms to follow detailed procedures
and to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. Under the terms of the settlement,
the underlying proceeding against the four China-based accounting firms was deemed dismissed with prejudice four years after entry
of the settlement. The four-year mark occurred on February 6, 2019.

While we cannot predict if
the SEC will further challenge the four China-based accounting firms’ compliance with U. S. law in connection with U. S. regulatory
requests for audit work papers or if the results of such a challenge would result in the SEC imposing penalties such as suspensions, if
the accounting firms are subject to additional remedial measures, our ability to file our financial statements in compliance with SEC
requirements could be impacted. A determination that we have not timely filed financial statements in compliance with the SEC requirements
could ultimately lead to the delisting of our securities from the NYSE American or the termination of the registration of our securities
under the Securities