SEC Comment Letter 0000000000-23-008693 to DDC Enterprise Ltd (DDC)
DDC Enterprise Ltd
Date: Aug. 10, 2023 · CIK: 0001808110 · Accession: 0000000000-23-008693
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-272689
Letter
United States securities and exchange commission logo August 10, 2023 Norma Chu Chief Executive Officer DDC Enterprise Ltd Room 1601-1602, 16/F, Hollywood Centre 233 Hollywood Road Sheung Wan, Hong Kong Re:DDC Enterprise Ltd Registration Statement on Form F-1 Filed on July 25, 2023 File No. 333-272689 Dear Norma Chu: We have reviewed your amended registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Form F-1 Amendment No 1 filed on July 25, 2023 General 1.We note your response to comment 1. Please discuss in your risk factors the sixth to last sentences of paragraph two. Prospectus Summary, page 1 2.We note your revised disclosures in response to comment 6. Please revise the filing to clarify that the failure to obtain the CSRC approval will completely hinder your ability to offer your shares, rather than that it “may” do so. Further, your revised disclosures that you “still need to complete the filing procedure with the CSRC for consummating this offering according to the Trial Measures” appear inconsistent with the disclosures that no
FirstName LastNameNorma Chu Comapany NameDDC Enterprise Ltd August 10, 2023 Page 2 FirstName LastNameNorma Chu DDC Enterprise Ltd August 10, 2023 Page 2 prior permission is required under the “the Opinions from any PRC governmental authorities (including the CSRC) for consummating this offering.” Please revise the filing to remove the apparent inconsistent disclosures. Management's Discussion and Analysis of Financial Condition and Results of Operations Cost of Revenues, page 109 3.We note your disclosure that your product costs increased for the three months ended March 31, 2023 and decreased for the year ended December 2022, as compared to their comparable year periods, which were “in line with consumer product sales.” Please revise to elaborate on the reasons underlying such changes. Further, please revise page 111 to clarify that your total cost of revenues increased for the three months ended March 31, 2023, as compared to the prior year quarter. Operating Expenses, page 110 4.We note your disclosure that your general and administrative expenses increased for the three months ended March 31, 2023, as compared to the prior year quarter. Please revise to elaborate on the reasons underlying such change. Further, we note your disclosure on page 112 that this expense decreased rather than increased. Please revise to clarify this inconsistency. Liquidity and Capital Resources, page 118 5.We note your disclosures about certain significant short-term bank borrowings with China Citic Bank and HSBC that were repayable by July and June 2023, respectively. Please update these disclosures given that this prospectus is dated after such dates. Part II Information Not Required in Prospectus Exhibit Index Exhibit 3.2 - Form of Tenth Amended and Restated Memorandum and Articles of Association of the Registrant..., page II-5 6.We note your response to comment 11 and reissue the last sentence of our comment to revise the par value in this exhibit for consistency.
FirstName LastNameNorma Chu Comapany NameDDC Enterprise Ltd August 10, 2023 Page 3 FirstName LastName Norma Chu DDC Enterprise Ltd August 10, 2023 Page 3 You may contact Ernest Greene at 202-551-3733 or Kevin Woody at 202-551-3629 if you have questions regarding comments on the financial statements and related matters. Please contact Jenny O'Shanick at 202-551-8005 or Erin Purnell at 202-551-3454 with any other questions. Sincerely, Division of Corporation Finance Office of Manufacturing cc: Lawrence Venick
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United States securities and exchange commission logo
August 10, 2023
Norma Chu
Chief Executive Officer
DDC Enterprise Ltd
Room 1601-1602, 16/F, Hollywood Centre
233 Hollywood Road
Sheung Wan, Hong Kong
Re:DDC Enterprise Ltd
Registration Statement on Form F-1
Filed on July 25, 2023
File No. 333-272689
Dear Norma Chu:
We have reviewed your amended registration statement and have the following
comments. In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
Form F-1 Amendment No 1 filed on July 25, 2023
General
1.We note your response to comment 1. Please discuss in your risk factors the sixth to last
sentences of paragraph two.
Prospectus Summary, page 1
2.We note your revised disclosures in response to comment 6. Please revise the filing to
clarify that the failure to obtain the CSRC approval will completely hinder your ability to
offer your shares, rather than that it “may” do so. Further, your revised disclosures that
you “still need to complete the filing procedure with the CSRC for consummating this
offering according to the Trial Measures” appear inconsistent with the disclosures that no
FirstName LastNameNorma Chu
Comapany NameDDC Enterprise Ltd
August 10, 2023 Page 2
FirstName LastNameNorma Chu
DDC Enterprise Ltd
August 10, 2023
Page 2
prior permission is required under the “the Opinions from any PRC governmental
authorities (including the CSRC) for consummating this offering.” Please revise the filing
to remove the apparent inconsistent disclosures.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cost of Revenues, page 109
3.We note your disclosure that your product costs increased for the three months ended
March 31, 2023 and decreased for the year ended December 2022, as compared to their
comparable year periods, which were “in line with consumer product sales.” Please revise
to elaborate on the reasons underlying such changes. Further, please revise page 111 to
clarify that your total cost of revenues increased for the three months ended March 31,
2023, as compared to the prior year quarter.
Operating Expenses, page 110
4.We note your disclosure that your general and administrative expenses increased for the
three months ended March 31, 2023, as compared to the prior year quarter. Please revise
to elaborate on the reasons underlying such change. Further, we note your disclosure on
page 112 that this expense decreased rather than increased. Please revise to clarify this
inconsistency.
Liquidity and Capital Resources, page 118
5.We note your disclosures about certain significant short-term bank borrowings with China
Citic Bank and HSBC that were repayable by July and June 2023, respectively. Please
update these disclosures given that this prospectus is dated after such dates.
Part II
Information Not Required in Prospectus
Exhibit Index
Exhibit 3.2 - Form of Tenth Amended and Restated Memorandum and Articles of Association of
the Registrant..., page II-5
6.We note your response to comment 11 and reissue the last sentence of our comment to
revise the par value in this exhibit for consistency.
FirstName LastNameNorma Chu
Comapany NameDDC Enterprise Ltd
August 10, 2023 Page 3
FirstName LastName
Norma Chu
DDC Enterprise Ltd
August 10, 2023
Page 3
You may contact Ernest Greene at 202-551-3733 or Kevin Woody at 202-551-3629 if
you have questions regarding comments on the financial statements and related matters. Please
contact Jenny O'Shanick at 202-551-8005 or Erin Purnell at 202-551-3454 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing
cc: Lawrence Venick