Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 78

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 78
---
 a request by the PCAOB for audit working papers in China without the approval of Chinese authorities.
If the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction,
or the PCAOB re-evaluates its determination as a result of any obstruction with the implementation of the Statement of Protocol, then
such lack of inspection or re-evaluation could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately
result in a determination by a securities exchange to delist our securities. Accordingly, the HFCAA calls for additional and more stringent
criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U. S. auditors
who are not inspected by the PCAOB. These developments could add uncertainties to our offering.

If in the future the PCAOB
is unable to conduct full inspections of auditors in China, it will become more difficult to evaluate the effectiveness of our auditors’
audit procedures and quality control procedures as compared to auditors who primarily work in jurisdictions where the PCAOB has full inspection
access. As a result, investors may be deprived of the benefits of PCAOB inspections. In addition, the SEC may initiate proceedings against
our independent registered public accounting firm, which could result in the imposition of penalties against such accounting firm, such
as suspension of its ability to practice before the SEC. If we are required to engage a new audit firm, we may incur significant
expense and management time. All of these could cause our investors and potential investors in our securities to lose confidence in our
audit procedures, reported financial information and the quality of our financial statements. The market price of our Class A ordinary
shares could be adversely affected. Further, if the PCAOB determines that it cannot inspect or investigate completely independent registered
public accounting firm for a period of two consecutive years, trading in our securities may be prohibited under the HFCAA and an
exchange may determine to delist our securities. The delisting of our securities, or the threat of such securities being delisted, may
materially and adversely affect the value of your investment.

In addition, on August 6,
2020, the President’s Working Group on Financial Markets, or PWG, released a report recommending that the SEC take steps to implement
the five recommendations, including enhanced listing standards on U. S. stock exchanges with respect to PCAOB inspection of accounting
firms. This would require, as a condition to initial