F-1/A: Registration statement for securities of certain foreign private issuers

PUBLIC OFFERING PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our Class A Ordinary Shares. You should read the entire prospectus carefully, including “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes thereto, in each case included in this prospectus. You should carefully consider, among other things, the matters discussed in the section of this prospectus titled “Business” before making an investment decision. This prospectus contains information from an industry report commissioned by us and prepared by Frost & Sullivan, an independent research firm, to provide information regarding our industry. We refer to this report as the Frost & Sullivan Report.

Our Mission

Our mission is to inspire others to enjoy cooking as part of a quality lifestyle and culture. We are driven to improve lives by creating easy-to-cook, delicious, and healthy meal solutions. It is our vision to create fun experiences and inspirations in every kitchen.

Overview

We are a leading content driven (i.e. using content to reach and engage target customers) consumer brand offering easy, convenient ready-to-heat (“RTH”), ready-to-cook (“RTC”) and plant-based meal products (i.e. meal products consisting largely or solely of vegetables, fruits, grains and other foods derived from plant-based protein, rather than animal protein) while promoting healthier lifestyle choices to our predominately Millennial and Generation Z (“GenZ”) customer-base. We are also engaged in the provision of advertising services.

We were founded in Hong Kong in 2012 by Ms. Norma Ka Yin Chu, a highly regarded entrepreneur and a true cooking enthusiast, as an online platform which distributed food recipes and culinary content. Subsequently, we further expanded our business to provide advertising services to brands that wish to place advertisements on our platform or video content. In 2015, we entered the Mainland China market through the establishment of Shanghai DayDayCook Information Technology Co., Ltd (“SH DDC”) to engage in technology development of computer software, food circulation and advertising production in China. In 2017, we started expanded our business from content creation to content commerce. Later in 2019, we extened our business to include the production and sale of, among others, own-branded RTH, RTC convenient meal solution products.

As of March 31, 2023, our main product categories include (i) own-branded RTH products — typically semi-cooked meals with some but minimal preparation required ahead of serving, (ii) own-branded RTC products — ready to be consumed within 8 to 15 minutes with some additional cooking preparation, (iii) own-branded RTE products — typically pre -cooked meals that are ready to serve with minimal level of additional preparation, which includes our plant-based meal products localized for the palate of an Asian consumer, and (iv) private label products (i.e. third-party branded food products).

Business Model

Our omni-channel (online and offline) sales, end-to-end (“E2E”) product development and distribution strategy, and data analytics capabilities enable us to successfully identify, assess, and pivot to cater to changing consumer preferences and trends across multiple customer segments and price-points. From a product distribution standpoint, we have created a network of direct-to-customer (“D2C”), retailer, and wholesaler sale options.

•        We leverage (i) large China-based e-commerce platforms e.g., Tmall, JD.com, Pinduoduo, (ii) leading livestreaming, video-sharing, content-marketing platforms e.g., ByteDance (TikTok and sister-app Douyin), Bilibili, Weibo, Little Red Book (小红书), Kuaishou etc., and (iii) online-merged-offline (OmO) group-buy platforms e.g., Meituan-Dianping to drive online sales. We would cooperate with third-party online distributors on these e-commerce platforms to promote and sell our products.

•        We have access to a network of offline point-of-sales (“POS”) through partnerships with (i) convenience stores e.g., 7/11, Lawson etc., (ii) multi-national retail corporations e.g., Carrefour, Hema etc., (iii) boutique supermarket chains e.g., Ole’, G-Super etc., and (iv) various corporate partnerships e.g., Towngas to distribute and sell our products.

•        We operate in the Mainland China market but are actively expanding into international markets including but not limited to the United States and Canada.

•        We own multiple brands in our portfolio that provide convenient meal solution products to a wide range of consumers. We are actively looking for acquitision opportunities in complimentary brands in the Asian food and cooking categories as well as targets that can strengthen the company’s network of sales distribution.

As of March 31, 2023, we had 24.5 million paid customers. Around 69% of our followers on social media & video platforms are GenZ. 50% of customers are from the Eastern & Southern parts of China, and 86% are female. In particular, we believe that our products appeal to GenZ because (1) when compared to older age groups, GenZ generally do not want to spend a long time cooking at home and they value cost effective options like RTC, RTH and RTE meals due to the ease of cooking that RTC, RTH and RTE products provide; (2) we promote our products mainly through social media, the audience of which are mainly the GenZ population; (3) we mainly sell our products through e-commerce platforms, including livestreaming e-commerce, the customers demographics of which are dominated by GenZ; (4) plant-based diets have progressed from a food trend to a globally recognized lifestyle which GenZ is more willing to embrace. The average age of a viewer engaging with our products or marketplace is younger than 30 years old. From 2018 to March 2023, we have a content library with more than 247,874 minutes of in-house created content.

For the three months ended March 31, 2023, we recorded RMB43.0 million (or US$6.3 million) in total revenue compared to RMB36.9 million for the three months ended March 31, 2022, representing a 16.6% increase. Subsequent to March 31, 2023, we signed purchase agreements for three acquisitions. Assuming these three acquisitions had taken place on 1 January 2023, the unaudited pro forma revenue of the Company for the three months ended March 31, 2023 would be RMB68.9 million (or US$10.0 million).

For the year ended December 31, 2022, we recorded RMB179.6 million (or US$26.1 million) in total revenue. This drop in revenue was largely a result of negative impact from extended zero-covid policy in China which led to massive disruptions in the company’s e-commerce operations. In the face of this challenge, we completed four acquisitions in 2022 to speed up the diversification of revenue streams as well as aggressive improvement on overall cost structure. Assuming these four acquisitions had taken place on 1 January 2022, the unaudited pro forma revenue of the Company for the year ended December 31, 2022 will be RMB231.9 million (or US$33.8 million). Equally important, our focus has been on improving the overall cost structure of the business when facing Covid and inflation challenges. For the year ended December 31, 2022, our gross profit margin increased to 24.5% versus 17.8% for the year ended December 31, 2021.

As the company continues to execute on its M&A strategy, which primarily focuses on the acquisition of complimentary brands in the Asian food and cooking categories as well as sales channel access, in April 2023, we entered into a purchase agreement to acquire 51% equity interest of Shanghai Yuli Development Limited (“Yuli”), to add new sales channels in Ready-To-Cook and Ready-To-Eat product categories; also in April 2023, we entered into a purchase agreement to acquire 100% interest in 4 online stores in Pinduoduo platform to increase our online Ready-To-Heat customer base; in May 2023, we entered into a purchase agreement to acquire “Nona Lim”, an Asian food brand based in San Francisco, USA. The brand sells Ready-To-Cook Asian noodle meal kits and a variety of soup bases to its customers through an established distribution network in the United States, including major retailers such as Whole Foods Market, Target, and Kroger.

We have incurred a loss from operations, had net cash used in operating activities, net current liabilities and an accumulated deficit. In addition, our auditor’s report includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

Our Industry

We compete primarily in the convenient meal solutions market providing RTE, RTC and RTH products to our customers. With (i) the proliferation of food delivery service options, (ii) a shift in customer preference and behavior away from home-cooked to convenience, and (iii) an increase in GDP per capita/overall disposable income (both in our target demographic and in-general) the demand for convenient meal solution products including RTC/RTE products has increased significantly. Customers have also become more discerning and expect RTC/RTH/RTE products to be of a high quality, have a higher nutritional value, and taste better when compared with other processed or semi-processed food product categories. Typically, RTC and RTE meals are made using high-quality and seasonal ingredients with full traceability at every stage of the food chain and a focus on nutritional value and maintaining a balanced diet is factored into the recipe and product R&D process.

COVID-19 has accelerated the shift to e-commerce and the need to develop and professionalize China’s cold chain transport infrastructure. The logistics industry is benefiting from the proliferation of professional third-party logistics service providers as well as improvements in preservation/storage, information logistics, analysis, and distribution technology. As a result of improvements in logistical infrastructure and the scale of the distribution network, the RTC and RTE industry has been able to expand its geographical reach, improve product delivery efficiency, and guarantee food safety and maintain quality over larger distances.

Internationally, the development history of mature overseas RTC and RTE markets nurtures an extensive customer base of RTC and RTE products. The COVID-19 pandemic further stimulates such demands in overseas markets as it alters people’s lifestyle and increases health consciousness, especially in Southeast Asia. In addition, with the development of those mature RTC markets, an increasing number of customers are in pursuit of a healthier lifestyle and start to favor healthier ready-to-cook products instead of RTC products of high calories as well as healthier ready-to-eat products instead of junk food. Chinese companies in the RTC and RTE industry, because of their well-established value chains, are able to offer RTC and RTE products of competitive prices in markets like North America and Europe despite the additional logistic expenses. Thus, Chinese companies that are actively seeking international expansion opportunities are well positioned to gain share in the global RTC and RTE market.

Plant-based products are a nascent Fast-Moving Consumer Goods (“FMCG”) category in China. Some Chinese brands have recently emerged as strong competitors to international incumbents. Younger individuals are the target demographic of companies offering plant-based substitutes/alternatives. Many new brands have been able to penetrate the younger customer segment by adopting an omnichannel strategy and by offering good quality, varied product offerings at a reasonable price-point.

Around the globe, the public has been paying more attention to environmental and natural resources protection over the past decades. The technology and production of plant-based meat has also experienced rapid development. Benefiting from the mature production technology of plant-based meat, foreign brands, when compared with Chinese brands, have obvious advantages in imitation of meat flavor and texture. However, limiting to product categories, flavor localization, stock-keeping unit (“SKU”) quantity, and high price, it is difficult for them to seize significant business opportunities in Chinese market. Compared to foreign brands, domestic brands pay more attention to recipe R&D and introduce various plant-based meat food products into the market, ranging from Western cuisine to Chinese cuisine, including but not limited to Panini, pizza, hamburgers, braised rice, pies, noodles, and other products. Finally, the processed volume of soybean protein and pea protein in China contributes nearly half of the global volume every year, which provides a significant advantage in raw materials for domestic plant-based meat food products companies.

Our Competitive Strengths

We believe the following competitive strengths differentiate us from our competitors and will continue to contribute to our success:

Leading Content Driven Consumer Brand in China that Possess a Loyal Customer Base, and Clear Alignment with Consumer Trends

We are a leading content-driven lifestyle brand for young food lovers, especially GenZ customers in China. We believe that our RTH, RTC, RTE, and plant-based meal products portfolio aligns with broader Fast-Moving-Consumer-Goods trends and shifts in consumer behavior. Our products, brand, and mission resonate strongly with our GenZ customer base who seek high quality and nutritional food products that are sustainably and ethically sourced. As of March 31, 2023, more than 24.5 million consumers had purchased our products via one or more e-commerce platforms.

Track Record of Innovation

We allocated and will continue to allocate significant resources to product innovation for our RTC and RTE products. We typically launch new products on a quarterly basis. To position us as a leader in the convenient RTC and RTE categories, we partnered with PFI Foods in the third quarter of 2020, cooperated with Meta Meat in 2021, both companies being leading plant-based meat manufacturers in mainland China, to develop a line of plant-based food products. In 2023, we have also launched a partnership with Nestle China using their Harvest Gourmet brand of plant based meat to bring the first-ever RTC products to market.

In addition, the company is building a library of new product concepts and recipes, ready for further development and testing. We believe that we excel at identifying ingredient combinations, and flavor profiles that appeal to the palate of young Asian consumers. Leveraging our innovation capabilities, our experience in the Chinese markets and our deep understanding of the palate of Asian consumers, we are confident that when executing our international market expansion plan, we can introduce new product innovation and develop food products that appeal to other Asian communities and potentially an even wider audience on the global stage.

Omni-Channel and Multi-Faceted Sales & Distribution Strategy

The Company’s core distribution strategy is to balance the revenue mix of online sales and offline sales. By leveraging the power of e-commerce, we tap into the growing digital market while providing various meal solutions to our consumers all around China. Simultaneously, we maintain a strong presence in physical retail through distributors, ensuring accessibility and brand visibility. This balanced distribution strategy enables us to capture diverse customer segments, optimize sales channels, and mitigate risks associated with concentration on a single distribution channel. In 2022, due to the impact of Covid outbreak in mainland China, we encountered difficult meeting our customers’ need online. As a result, about 83% and 61% of our revenue came from offline sales for the three months ended March 31, 2023 and for the year ended December 31, 2022 respectively.

Our omni-channel (both offline and online) strategy spans (i) popular e-commerce channels e.g., Taobao and JD.com, (ii) social and content platforms e.g., TikTok, Kuaishou, Bilibili, and WeChat, and (iii) community group buying platforms e.g., Meituan-Dianping. From 2019 to March 2023, our online sales network including, among others, Tmall, JD.com, and China Pinduoduo have attracted 107.18 million visitors and for the three months ended March 31, 2023, and for the year ended December 31, 2022, generated online consumer product sales of RMB7.3 million (or US$1.1 million) and RMB67.0 million (or US$9.8 million) respectively. In 2023, we increased our offline retail distribution network and have worked with 709 distributing partners.

We will continue to focus on bringing our customers the best quality Asian meal solution, by implementing a balanced distributing strategy. In 2023, the company’s forecasted online sales will account for 50% of total sales, while offline sales will account for the remaining half.

Customer Engagement Analytics, Customer Service, and Real-Time (“RT”) Feedback Capabilities

We analyze transaction data, collect customer feedbacks through one or more channels, and engage in customer engagement analytics. This helps to (i) streamline the product development lifecycle and reduce the risk of a customer-product mismatch, (ii) uncover new (sub) product categories and/or potential bundling and/or up and cross-sell opportunities within the existing product portfolio, (iii) strengthen our brand image, and (iv) improve customer “stickiness” by providing customers with a forum.

E2E Supply Chain Visibility, Agile Product Development and Go-to-Market (“GTM”) Capabilities

On average, we can deliver a new product to-market within 8 weeks. Our E2E supply chain visibility and strong product execution i.e., product concept, prototyping, product validation and recalibration, commercial manufacturing, product marketing and placement capabilities mean we can react in almost real-time to changes in customer needs and preferences. As part of our more proactive new product development strategy, we leverage our deep industry and cross-disciplinary expertise to uncover potential market and product opportunities. We have an in-house content development team which focuses on building interest and demand pre product launch. They will keep abreast of the latest market developments and identify potential trends and consumers interests. To promote our new products, we also collaborate with key opinion leaders (“KOLs” or “KOL”). We are well placed to continue to grow our market share and become the dominant player in the RTH, RTC, RTE, and plant-based meal products industry in mainland China.

Experienced Management Team, Board of Directors, and Advisory Network

We have an experienced management team. Members of our management team have significant experience across the FMCG, e-commerce, and IT services/technology, media, and telecommunications industries/sectors. More importantly, our management team comprises of a few selected individuals that offer strong understanding of the Chinese market as well as have extensive experiences in operating and expanding FMCG businesses in international markets.

In particular, our founder, Ms. Norma Ka Yin Chu, is a highly regarded entrepreneur and a true cooking enthusiast who has won numerous awards as a visionary entrepreneur in the cooking and lifestyle community. She was named as China New Media Top 100 people in 2016, and one of CY Zone’s Most Notable Female Entrepreneurs for three consecutive years from 2017 to 2019. In 2020, she was awarded the Outstanding ICT Women Awards 2020: Women Entrepreneur Category, Harper’s Bazaar The Visionary Woman 2020 and JESSICA Most Successful Women Award 2020 — Digital Women. Prior to founding our group, Norma was the Head of Research of HSBC Private Bank in Hong Kong. Therefore, not only does Ms. Chu have rich experience in the cooking and food products industry, she also has extensive experience in private equity, which together enable her to lead our group’s drive to become a leader in the market.

We further augmented the management team with a Board of Directors and an advisory network with significant operator expertise and experience spanning PepsiCo, General Mills, Danone and Meitu.

Our Strategies

International market expansion

Internationally, the development history of mature overseas RTC and RTE markets nurtures an extensive customer base of RTC and RTE products. The COVID-19 pandemic further stimulates such demands in overseas markets as it alters people’s lifestyle and increases health consciousness, especially in Southeast Asia,. Chinese companies in the RTC and RTE industry, attributable to their well-established value chains, are able to offer RTC and RTE products of competitive prices in markets like North America and Europe despite the additional logistic expenses. Thus, Chinese companies that are actively seeking international expansion opportunities are well positioned to further gain share in the global RTC and RTE market.

Moreover, around the globe, the public has been paying more attention to environmental and natural resources protection over the past decades. Compared to foreign brands, domestic Chinese brands pay more attention to the recipe R&D and introduce various plant-based meat food products into the market, covering from Western cuisine to Chinese cuisine, including but not limited to Panini, pizza, hamburgers, braised rice, pies, noodles, and other products to cater consumers. The processed volume of soybean protein and pea protein in China contributes nearly half of the global volume every year, which provides a significant advantage in raw materials for Chinese plant-based meat food products companies.

In view of the above and to the extent permitted due to our recurring losses from operations and an accumulated deficit, we are raising funds from investors for the purpose of expanding our business in the U.S. and Southeast Asia in hope of widening our customer base.

For the U.S., we have devised a three-fold strategy: (1) to launch our products through major Asian-focused online and offline sales channels, (2) to launch our direct-to-consumer stores on Amazon and our U.S. website, and (3) to grow through acquisitions. Since July 2022, we have successfully gained access to the U.S. market through sales on Yamibuy.com, one of the largest Asia food e-commerce platforms headquartered in the U.S.. In May 2023, we entered into a purchase agreement to acquire “Nona Lim”, an Asian food brand based in San Francisco, USA. The brand sells Ready-To-Cook Asian noodle meal kits and a variety of soup bases to its customers through an established distribution network in the United States, including major retailers such as Whole Foods Market, Target, and Kroger.

This acquisition enables us to expand our customer base into the US market. As for the Southeast Asian market, we are currently negotiating with local companies that would give us instant access to a growing customer base in the RTC and RTE meal markets.

Enhance our sales and marketing capabilities, as well as our sphere of influence

We will continue to monitor the performance of our e-commerce partners and platforms, adapt our product pricing strategy and offerings, and expand our fulfilment capabilities to support our revenue targets. We are raising funds from investors to deepen and broaden our existing partnerships and continue to expand cooperation with a wider network of influencers and KOLs to build our brand awareness. Also, we plan to engage more up-and-coming social e-commerce platforms to (i) drive higher traffic to our stores through more and closer collaborations; (ii) improve our ability to aggressively penetrate non-tier 1 cities and (iii) accelerate the growth of our paid customer base. In addition, we will continue to improve our sales and marketing capabilities and leverage the internet and various social media platforms to build brand awareness in non-Tier 1 cities in China. We will also engage content and social media marketing providers and platforms to drive an increase in average order value (“AOV”), repeat purchases, and to attract net-new users to our platform.

As of March 31, 2023, we had 24.5 million paid customers.

Continue to innovate and expand product offerings

We expect consumer demand for RTH, RTC, RTE and plant-based meal products to not only persist, but to grow at an accelerated rate. We plan to leverage our deep industry expertise, data-informed consumer insights, and predictive analytics to identify meaningful consumer trends and then partner with and solicit product feedback from our customers to optimize and expand on our existing product portfolio. We are committed to strengthening our R&D and product development capabilities to improve our ability to innovate more effectively within our core product categories.

Mergers and Acquisitions (“M&A”) Rollup

M&A is a key growth strategy going forward for the company in order for us to execute on the multi-brand strategy and also further diversify away from brand concentration risks. We have already identified several targets but to the extent permitted due to our recurring losses from operations and an accumulated deficit, we will evaluate and opportunistically execute on strategic joint ventures (JV), potential investments and acquisition opportunities across the value-chain with a focus on supplementing and/or complementing our existing products, sales channels, customer-base and/or allow us to optimize our existing brand marketing and sales channel management capabilities. Apart from executing acquisitions with considerations paid through share exchanges, we are also raising funds from investors to have an option to acquire companies through a mixture of cash and shares.

Corporate History and Structure

DDC Enterprise Limited (“DDC Cayman”) is a Cayman Islands holding company and conducts its operations primarily in China through its wholly-owned or controlled subsidiaries. We were founded in Hong Kong in 2012 by Ms. Norma Ka Yin Chu as an online platform which distributed food recipes and culinary content. Subsequently, we further expanded its business to provide advertising services to brands that wish to place advertisements on our platform or video content. In 2015, we entered the Mainland China market through the establishment of Shanghai DayDayCook Information Technology Co., Ltd. (“SH DDC”) and Shanghai Weishi Information Technology Co., Ltd. (“Weishi”). In 2017, we expanded our business from content creation to content commerce. Later in 2019, we extended our business to include the production and sale of, among others, own-branded RTH, RTC convenient meal solution products.

During the periods covered by the financial statements included elsewhere in this prospectus, SH DDC had entered into a series of contractual arrangement with Weishi and Shanghai City Modern Agriculture Development Co., Ltd. (“City Modern”), in 2016 and 2019 respectively, which allows SH DDC to exercise effective control over Weishi and City Modern and receive substantially all the economic benefits of Weishi, City Modern and their consolidated entities (collectively, the “Weishi and City Modern VIEs”) via variable interest entity structures. As of the date of this prospectus, such contractual arrangements with the Weishi and City Modern VIEs have been terminated. After the termination of the contractual arrangements with Weishi, we will continue cooperation with it in certain online service areas. For instance, Weishi will develop and maintain the WeChat mini-program related to our business, ensure the ordinary operation of our official websites, make sure the cyber security of the systems and maintain our IT systems and servers. As advised by the PRC legal adviser, our continue cooperation with Weishi does not constitute a VIE because that, since the termination of the contractual arrangements with Weishi, (i) we have no longer enjoyed any controlling rights or decision-making power over the operation of Weishi; (ii) Weishi has independently operated its assets and properties and conducted its businesses, and its shareholder, instead of us, has enjoyed its residual interests and born the loss (if any); (iii) we and Weishi have no contractual relations other than the service contract to be signed between SH DDC and Weishi; and (iv) we have not enjoyed any interests or benefits, or any other transfers, contributed by Weishi, or offered any financial assistance for Weishi.

DDC Cayman directly and wholly owns (a) DDC OpenStudio Limited (“DDC OpenStudio”), a Cayman Islands company incorporated in May 2017, (b) Perfect Foods Inc. (“Perfect Foods Inc.”), a Cayman Islands company incorporated in September 2019 and (c) Grand Leader Technology Limited (“Grand Leader”), a Hong Kong company incorporated in January 2011. DDC OpenStudio in turn holds all the share capital of DDC OpenStudio Media Limited (“DDC OpenStudio Media”), which was incorporated in July 2018 in Hong Kong. Perfect Foods Inc. in turns holds all the share capital of Good Foods HK Limited (“Good Foods HK”), which was incorporated in September 2019 in Hong Kong.

Through its wholly-owned subsidiary Grand Leader, which was incorporated for the purpose of handling advertising, business-to-consumer e-commerce and cooking classes in Hong Kong, DDC Cayman owns a direct equity interest in SH DDC and Shanghai Lashu Import and Export Trading Co., Ltd. (“SH Lashu”). SH DDC was established in January 2015 in China for the purpose of engaging in technology development of computer hardware and software, food circulation and advertising production in China, whilst SH Lashu was established in August 2017 in China as an import and export vehicle in China.

As of December, 2017, Shanghai Youlong Industrial Co., Ltd. (“SH Youlong”), a wholly owned subsidiary of SH DDC, was established for the purpose of engaging in cooking class services, food and beverage and retail business in China. SH Youlong owns a direct equity interest in Guangzhou Youlong DayDayCook Food and Beverage Co., Ltd., which was established in March 2018 with its main business of engaging in cooking class services, food and beverage and retail business in China.

As of June 2019, Shanghai Juxiang Culture Media Co., Ltd. (“SH Juxiang”), a wholly owned subsidiary of SH DDC, was established for the purpose of engaging in e-commerce business in China.

In January 2019, SH DDC acquired 60% equity interest in Fujian Jinjiang Yunmao Electronic Commerce Co., Ltd. (“Yunmao”), a limited liability company incorporated under the Laws of the PRC, for a combination of a share option consideration equivalent to a value of RMB10.2 million, and a cash consideration of RMB10.2 million, to engage in food and beverage retail and e-commerce. Yunmao owns a direct equity interest in Hangzhou Damao Technology Co., Ltd., which was established in June 2020 with a main business of e-commerce.

In January 2021, SH DDC acquired a number of online stores from Chongqing Mengwei Technology Co., Ltd. (“CQ MW”), Liao Xuefeng, Chongqing Changshou District Weibang Network Co., Ltd. (“Weibang”) and Chongqing Yizhichan Snack Food Electronic Commerce Service Department (“Yizhichan”) (the “Transferors”). In July 2021, SH DDC and Chongqing Mengwei Technology Co., Ltd. set up a joint venture named Chongqing DayDayCook E-commerce Co., Ltd. (“CQ DDC”), which is established for accepting the online stores acquired and operating newly set-up online stores, in which, SH DDC holds 51% equity interest. CQ DDC was established for the purpose of engaging in online food retail business in China. However, due to certain limitations from the policies of third-party online platforms, the titles of such online stores currently cannot be transferred to CQ DDC and the operation of such online stores are still delegated to the Transferors through relevant contractual arrangements to enable us to have the ability to control such online stores. In April 2023, SH DDC acquired more Pinduoduo online stores from CQ MW, Weibang, Yizhichan and Chongqing Ningqi E-commerce Co. Ltd. (“Ningqi”), and has been operating these online stores in the same way. Therefore, these online stores are considered VIEs and SH DDC is the primary beneficiary. We refer to these online stores the “Mengwei VIE” throughout this prospectus. Investors should be aware that they are purchasing equity securities of our ultimate Cayman Islands holding company, namely DDC Cayman, rather than equity securities of the Mengwei VIE, and investors in our securities may never hold equity interests in the Mengwei VIE. DDC Cayman is a Cayman Islands holding company with no material operations of its own. The operations of online stores are conducted through contractual arrangements with the Transferors while other parts of our operations are conducted through our operating subsidiaries established in Hong Kong and mainland China. Although we took every precaution available to effectively enforce the contractual and corporate relationship with the Mengwei VIE, these contractual arrangements may still be less effective than direct ownership and that we may incur substantial costs to enforce the terms of the arrangements. For example, the Transferors, namely the operating agents of the Mengwei VIE, could breach their contractual arrangements by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the Mengwei VIE, we would be able to exercise our rights as a direct asset-holder to directly and effectively effect changes in the management and daily operation of the Mengwei VIE. However, under the current contractual arrangements, we rely on the performance of the Transferors of their obligations under the contracts to exercise control over the Mengwei VIE. The Transferors may not act in our best interests or may not perform their obligations under these contracts. In addition, failure of the Transferors to perform certain obligations could compel us to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective or sufficient. All the agreements under the Mengwei VIE arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these VIE agreements. The status of the rights of DDC Cayman, as a Cayman Islands holding company, with respect to the contractual arrangements with the Transferors is uncertain. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in

the context of a VIE structure should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. In the event we are unable to enforce these VIE agreements for the Mengwei VIE, or if it suffers significant delay or other obstacles in the process of enforcing these VIE agreements, we may not be able to exert effective control over the Mengwei VIE, and our ability to conduct our business may be negatively affected.

On July 1, 2021, the Company, through its wholly owned subsidiary, SH DDC, entered into a purchase agreement (“the SPA”) with Mr. Zheng Dongfang and Mr. Han Min (“collectively the YJW Seller”), the shareholders of Fujian Yujiaweng Food Co., Ltd. (“Yujiaweng”) to acquire 60% interests of Yujiaweng’s product sales business, primarily including distribution contracts, the sales and marketing team, procurement team and other supporting function personnel (“the YJW Target Assets”). Yujiaweng is principally engaged in manufacturing and the distribution of snack foods. SH DDC and Mr. Zheng Dongfang agreed to form an entity (“YJW Newco”) with the Company holding 60% equity interest and Mr. Zheng Dongfang holding 40% equity interests. According to the SPA, during the period from July 1, 2021 until the date when YJW Newco is formed (“the transition period”), the Company manages and operates the Target Assets and is entitled to 60% of the net profit arising from the operation of the Target Assets.

On July 1, 2021, the Company, through its wholly owned subsidiary, SH DDC, entered into a purchase agreement (“the SPA”) with Mr. Xu Fuyi, (“the KeKe Seller”), the shareholder of Fujian Keke Food Co., Ltd. (“KeKe”) and Mr. Zheng Dongfang, the president of KeKe, to acquire a 60% interest in KeKe’s product sales business, primarily including distribution contracts, the sales and marketing team, procurement team and other supporting function personnel (“the KeKe Target Assets”). KeKe is principally engaged in manufacturing and distribution of candy products. SH DDC and Mr. Zheng Dongfang agreed to form an entity (“KeKe Newco”) with the Company holding 60% equity interest and Mr. Zheng Dongfang holding 40% equity interests. According to the SPA, during the period from July 1, 2021 and the date when KeKe Newco is formed (“the transition period”), the Company manages and operates the Target Assets and is entitled to 60% of the net profit arising from the operation of the Target Assets.

On February 1, 2022, the Company, through its wholly owned subsidiary, entered into a purchase agreement with Mr. LIN Kai Hang, Mr. SIO Leng Kit and Mr. Tang Wai Cheung, to acquire 51% shares of Lin’s Group Limited (“Lin’s Group”). Lin’s Group have its own brand “Deliverz” and principally engaged in manufacturing and distribution of RTC products with its major online sales channel. This was an upstream integration where Lin’s Group is the major supplier of RTC meal kits for the company’s Hong Kong operations. This acquisition allows the company to optimize cost structure for the RTC meal kits in the Hong Kong market. It also enables the company to expand its product offerings with its own production facility.

As of April 1, 2022, all contractual arrangements with Weishi and City Modern, have been terminated. As a result of the termination of the contractual arrangements with the Weishi and City Modern VIEs, we expect to be able to focus our capital and efforts on selling our products through online e-commerce platforms and offline distributors and retailers. We intend for the termination and discontinuation of business streams to reduce the company’s overall net losses, and free up capital to be allocated into our other fast growing RTH, RTC, RTE and plant based product businesses.

On May 1, 2022, the Company, through its wholly owned subsidiary, entered into a purchase agreement with Mr. Gao Xiaomin, Mr. Zhang Yi and Ms Chen Di, to acquire 51% shares of Shanghai Lishang Trading Ltd, (“Lishang”). Lishang is principally engaged in distribution of private label products. This acquisition was completed during the nation-wide lock down when the company expedited its strategy to diversify revenue streams and improve overall margin structure. Lishang has strong sales channel access into the corporate gifting channel which carries higher margin compared to the company’s existing e-commerce and offline distribution channels. By acquiring Lishang, the Company now has healthier gross margins as well as access to sales and distribution partnerships with global FMCG brands such as Pepsi Co (Lays brand.) These partnerships in turn can help the company secure better traffic and overall sales conversion on social commerce platforms to drive higher sales for its own branded product business.

On June 17, 2022, the “YJW Newco”, Quanzhou DayDayCook Food Co., Limited (“Quanzhou DDC”) was formed. As part of the transaction dated July 1, 2021, the YJW Target Assets and Keke Target Assets from the acquisition were transferred into Quanzhou DDC. And on the same day, SH DDC has obtained control over the YJW Target Assets and Keke Target Assets, and the results were consolidated into the Group.

On June 17, 2022, the “KeKe Newco”, Quanzhou Weishi Food Co., Limited was formed. The company does not hold any assets or operations.

The following diagram illustrates our corporate structure as of the date of this prospectus. Unless otherwise indicated, equity interests depicted in this diagram are held 100%.

Immediately upon consummation of this offering, our ordinary shares will be classified into Class A Ordinary Shares and Class B Ordinary Shares. In respect of matters requiring shareholders’ vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to [thirty] votes.

Government Regulations and Approvals for this Offering

As our operations are currently conducted through our operating entities established in Hong Kong and mainland China and we have VIE arrangements with various Chinese entities and individuals to enable us to have the ability to control a number of online stores, we are potentially subject to significant regulations by various agencies of the Chinese government. The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC and Ministry of Commerce of the PRC (“MOFCOM”), prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. Substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. As at the date of this prospectus, we have been advised by Grandall Law Firm (Shanghai) that CSRC’s approval under the M&A Rules is not required for the listing and trading of our Class A Ordinary Shares on the NYSE Group in the context of this offering given that (i) our PRC subsidiaries were incorporated as wholly foreign-owned enterprises by means of direct investment rather than by merger or acquisition of equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules that are DDC Cayman’s beneficial owners; (ii) we are a company incorporated under the laws of the Cayman Islands controlled by non-PRC citizens and we do not fit into the definition of “overseas special purpose vehicle” under the M&A Regulations; and (iii) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject

to the M&A Rules. As such, we have never conducted any mergers or acquisitions of any PRC domestic companies with a related party relationship. MOFCOM’s approval under the M&A Rules is also not required as we have never conducted any mergers or acquisitions of any PRC domestic companies with a related party relationship. We cannot assure you that relevant PRC governmental agencies, including the CSRC, would reach the same conclusion as we do.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities According to Law (the “Opinions”), which called for strengthened regulation over illegal securities activities and supervision on overseas listings by China-based companies and propose to take effective measures. As at the date of this prospectus, no official guidance or related implementation rules have been issued in relation to the Opinions, and the interpretation and implementation of the Opinions also remain unclear to some extent at this stage. Based on our understanding of the current PRC laws and regulations in effect at the time of this prospectus, no prior permission is required under the M&A Rules or the Opinions from any PRC governmental authorities (including the CSRC) for consummating this offering by our company, as advised by our PRC legal adviser, Grandall Law Firm (Shanghai). However, we still need to complete the filing procedure with the CSRC for consummating this offering according to the Trial Measures as described below. Further, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules (with retrospective effect) to require us to obtain the CSRC or other PRC governmental approvals for this offering. If we or our subsidiaries inadvertently conclude that such permission is not required, our ability to offer or continue to offer our Class A Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Class A Ordinary Shares to significantly decline or become worthless. Our Group may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities.

The PRC Data Security Law, which took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals that carry out data activities, provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. On August 20, 2021, the Standing Committee of the National People’s Congress, or the SCNPC, promulgated the PRC Personal Information Protection Law (the “PIPL”), which took effect on November 1, 2021. The PIPL sets out the regulatory framework for handling and protection of personal information and transmission of personal information to overseas. The PRC regulatory requirements regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the Cyberspace Administration of China, the Ministry of Public Security and State Administration for Market Regulation, or the SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. On November 14, 2021, the Cyberspace Administration of China, or the CAC, issued the Draft Cyber Data Security Regulations for public comments, pursuant to which, data processors carrying out the following activities must, in accordance with the relevant national regulations, apply for a cybersecurity review: (i) the merger, reorganization or spin-off of internet platform operators that possess a large number of data resources related to national security, economic development and public interests that affects or may affect national security; (ii) listing in a foreign country of data processors that process the personal information of more than one million users; (iii) listing in Hong Kong of data processors that affects or may affect national security; and (iv) other data processing activities that affect or may affect national security. The scope of and threshold for determining what “affects or may affect national security” is still subject to uncertainty and further elaboration by the CAC. 

On December 28, 2021, the Cyberspace Administration of China (the “CAC”), and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, which came into effect on February 15, 2022. The final Cybersecurity Review Measures provide that a “network platform operator” that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review. Further, the relevant PRC governmental authorities may initiate a cybersecurity review against any company if they determine certain network products, services or data processing activities of such company affect or may affect national security. Through the contractual arrangements with Weishi, DDC SH had collected and possessed personal information of more than one million users. After the contractual arrangements with Weishi were terminated in April 2022, DDC SH still have been possessing this amount of personal information which are stored in mainland China. For purposes of the Cybersecurity Review Measures, we have applied for and completed the cybersecurity review with

respect to our proposed overseas listing pursuant to the Cybersecurity Review Measures. As there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we cannot assure you that we would not become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in rectification, fines or other penalties, including suspension of business, website closure, removal of our app from the relevant app stores, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which may have material adverse effect on our business, financial condition or results of operations. See “Risk Factors — Risks Relating to Doing Business in China and Hong Kong — We may be liable for improper collection, use or appropriation of personal information provided by our customers.”

On February 17, 2023, CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “Trial Measures”), which became effective on March 31, 2023. On the same date, the CSRC circulated Supporting Guidance Rules No. 1 through No. 5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and relevant CSRC Answers to Reporter Questions (collectively, the “Guidance Rules and Notice”) on the CSRC’s official website. Under the Trial Measures, either direct or indirect overseas offering and listing by domestic companies shall fulfill the filing procedure with the CSRC with submitting relevant materials. Any overseas offering and listing made by an issuer that meets both the following conditions will be determined as indirect: (1) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (2) the main parts of the issuer’s business activities are conducted in the Chinese Mainland, or its main places of business are located in the Chinese Mainland, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in the Chinese Mainland. The determination as to whether or not an overseas offering and listing by domestic companies is indirect, shall be made on a substance over form basis. When certain circumstances happen, overseas offering and listing shall not be made. And If the intended overseas offering and listing necessitates a national security review, relevant security review procedures shall be completed according to law before the application for such offering and listing is submitted to any overseas parties such as securities regulatory agencies and trading venues. Pursuant to the Trial Measures and the Guidance Rules and Notice, initial public offerings or listings in overseas markets shall be filed with the CSRC within 3 working days after the relevant application is submitted overseas, while PRC domestic enterprises that have submitted valid applications for overseas offerings and listing but have not obtained the approval from the relevant overseas regulatory authority or overseas stock exchanges shall complete filings with the CSRC prior to their overseas offerings and listings. We have submitted the filing materials with the CSRC to fulfill the filing procedure with the CSRC as per requirement of the Trial Measures, but we cannot predict whether or how soon it will be able to complete such proceeding. If we fail to comply with the Trial Measures, we will be required to correct our behaviors, facing warnings and fines which amount will range from RMB1,000,000 to RMB10,000,000, and directly responsible personnel will also be warned and fined which amount will range from RMB500,000 to RMB 5,000,000. Any failure of us to obtain the relevant approval or complete the filings and other relevant regulatory procedures in a timely manner may significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless. See “Risk Factors — The approval of the China Securities Regulatory Commission and other PRC governmental authorities provided under the M&A rules are not required in connection with this offering, and, if required, we cannot predict whether we will be able to obtain such approval. Except for the CSRC filing for this issuance and listing, we are not required to obtain any permission or approval from any Chinese authority to issue securities to foreign investors or in connection with this offering, which, we cannot predict, whether or how soon will be completed.”

On February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the “Provisions.” The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised

Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by our Company or our PRC subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Requisite Licenses and Approvals for Our Operations

Our business is subject to governmental supervision and regulation by the relevant PRC governmental authorities, including but not limited to the State Council, the SAMR, the Ministry of Commerce (the “MOFCOM”), the State Internet Information Office, the General Administration of Customs and other governmental authorities in charge of the relevant services provided by us. These government authorities promulgate and enforce regulations that cover various aspects of the operation of food products and e-commerce, including entry into these industries, scope of permitted business activities, licenses and permits for various business activities.

To operate our general business activities currently conducted in China, we are required and has obtained business licenses and food operation licenses, except for Quanzhou Weishi Food Co., Limited which does not hold any assets or operations for now and we are in the process of applying for relevant food operation licenses for it. In addition, SH Lashu have been filed for record as consignee or consignor of import and export goods. However, we cannot assure you that we can successfully renew these licenses in a timely manner. No application for any such licenses have been denied.

See “Risk Factors — Risks Relating to Our Business and Industry — If we fail to obtain and maintain the requisite licenses and approvals required under the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, results of operations and financial condition may be materially and adversely affected.”

The following tables present the Company’s condensed consolidating schedules depicting the consolidated statements of comprehensive loss for the three months ended March 31, 2022 (comprising the Weishi and City Modern VIEs, and the Mengwei VIE) and 2023 (comprising the Mengwei VIE), and for the fiscal years ended December 31, 2021 and 2022 of the Company, its subsidiaries, the VIEs (comprising the Weishi and City Modern VIEs, and the Mengwei VIE) and the corresponding eliminating adjustments separately.

____________

(1)      To eliminate the Company’s share of loss of its subsidiaries and consolidated VIEs.

(2)      To eliminate the related party transactions between subsidiaries of the Company and consolidated VIEs

The following tables present the Company’s condensed consolidating schedules depicting the consolidated balance sheets as of March 31, 2022 (comprising the Weishi and City Modern VIEs, and the Mengwei VIE), March 31, 2023 (comprising the Mengwei VIE), December 31, 2021 and 2022 of the Company, its subsidiaries, the VIEs (comprising the Weishi and City Modern VIEs, and the Mengwei VIE) and corresponding eliminating adjustments separately.