Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 75

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 75
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 on December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued
challenges faced by the U. S. regulators in their oversight of financial statement audits of U. S.-listed companies with significant
operations in China. On April 21, 2020, the SEC and the PCAOB reiterated in another joint statement the greater risk associated with
the PCAOB’s inability to inspect audit work paper and practices of accounting firms in China, with respect to their audit work of
U. S. reporting companies.

As part of a continued regulatory
focus in the United States on access to audit and other information currently protected by laws in China, on December 2, 2020,
U. S. Congress passed S. 945, the Holding Foreign Companies Accountable Act. The HFCAA has been signed by the President into law.
Pursuant to the HFCAA, the SEC is required to propose rules to prohibit the securities of any registrant from being listed on any of the
U. S. securities exchanges or traded “over the counter” if the PCAOB is unable to inspect the work of the accounting firm
for three consecutive years. On March 24, 2021, the SEC issued amendments to Form 20 and sought public comment in response
to the HFCAA. Consistent with the HFCAA, these amendments require the submission of documentation to the SEC establishing that a
“commission-identified registrant” (as defined in the amendments) is not owned or controlled by a governmental entity in that
foreign jurisdiction and also require disclosure in a foreign issuer’s annual report regarding the audit arrangements of, and governmental
influence on, such registrant. We will be required to comply with these rules if the SEC identifies us as having a ‘non-inspection’
year under a process to be subsequently established by the SEC.

On December 23, 2022, the
Accelerating Holding Foreign Companies Accountable Act, was signed into law, which reduced the number of consecutive non-inspection years
required for triggering the prohibitions under the HFCAA from three years to two years, thus reducing the time period before
which our securities may be prohibited from trading or delisted. The enactment of the HFCAA and other efforts to increase U. S. regulatory
access to audit work papers could cause investor uncertainty for affected issuers, including us, and the market price of the share could
be adversely affected as uncertainty remains over whether there will be a compromise solution