6-K: Current report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments
Published on December 31, 2024
Exhibit 99.1
DDC Enterprise Limited Announces Unaudited First Half of 2024 Financial Results
| - | Reduced US$5.6 million in debt by converting debt into equity |
| - | Shareholder equity increased by 109% to US$19.7 million compared to the year ended 31 December, 2023 |
| - | U.S. revenue increased to 15.3% of total revenue versus nil for the six months ended June 30, 2023 |
New York, New York, December 31, 2024 (GLOBE NEWSWIRE) – DDC Enterprise, Limited. (the “Company”, “we” or “DDC”) (NYSE Amex: DDC), today announced its unaudited financial results for the first six months of 2024.
Key Highlights for the First Half of 2024
Total revenues increased to US$17.2 million, up from US$12.3 million in the same period of 2023, representing a 40% increase.
Gross profit margin remained stable at approximately 26% compared to the same period of 2023.
The Company continued to expand its footprint in the Asia food space in the U.S. market. During the first six months of 2024, the Company acquired Yai’s Thai, which provides Thai-based pantry staples in the U.S. market such as curries and stir-fry sauces, making it the second wholly-owned brand in the U.S. market.
During the reporting period, the Company refinanced US$5.6 million of debt by converting it into Class A Ordinary shares.
Expanded management team in the U.S. market by hiring Malik Sadiq, who has more than 25 years of experience in the food and strategy consulting industry in China, India, and the US, as the Company’s Chief Operating Officer, and Jeffrey S. Ervin, who was the co-founded of IMAC Holdings, Inc. (NASDAQ: BACK), as the Company’s Co-Chief Financial Officer as DDC continue to invest in the Asia food space globally.
Norma Chu, CEO of DDC commented, “Despite the challenges we’ve faced, I am proud of our team’s relentless commitment to growth and innovation. Our strategic acquisitions and operational efficiencies position us strongly for the future as we continue to expand our footprint in the U.S. market. We are excited about the opportunities ahead and remain dedicated to delivering value to our shareholders and customers alike.”
ABOUT DAYDAYCOOK
DayDayCook (NYSEAM: DDC) is on a mission to share the joy of Asian cooking culture with the world, offering a suite of accessible and healthy ready-to-eat, ready-to-cook, and ready-to-heat products that cater to the global palate. DayDayCook has evolved from a culinary content authority to a multi-brand powerhouse, curating a broad range of products that champion authenticity, nutrition, and convenience. The company's growing portfolio includes DayDayCook, Nona Lim, Yai’s Thai, and Omsom.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements, including, for example, statements about estimated revenue, margins, cash and growth and expansion. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements are also based on assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Investors can find many (but not all) of these statements by the use of words such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022747650/en/
Investors:
Jeff Ervin
Co-Chief Financial Officer
jeffervin@daydaycook.com
Media:
Jaque Liu
jaque.liu@daydaycook.com
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DDC ENTERPRISE LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Six Months Ended June 30， | ||||||||||||
| 2023 | 2024 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues: | ||||||||||||
| Product revenues | 89,126,070 | 122,513,685 | 17,190,560 | |||||||||
| Service revenues | 298,737 | 385,031 | 54,026 | |||||||||
| Total revenues | 89,424,807 | 122,898,716 | 17,244,586 | |||||||||
| Cost of products | (65,754,556 | ) | (91,031,202 | ) | (12,773,083 | ) | ||||||
| Cost of services | (265,392 | ) | (81,873 | ) | (11,488 | ) | ||||||
| Total cost of revenues | (66,019,948 | ) | (91,113,075 | ) | (12,784,571 | ) | ||||||
| Gross profit | 23,404,859 | 31,785,641 | 4,460,015 | |||||||||
| Operating expenses: | ||||||||||||
| Fulfilment expenses | (3,034,022 | ) | (5,056,932 | ) | (709,566 | ) | ||||||
| Sales and marketing expenses | (7,277,737 | ) | (9,669,218 | ) | (1,356,740 | ) | ||||||
| General and administrative expenses | (20,761,268 | ) | (33,589,607 | ) | (4,713,140 | ) | ||||||
| Share based compensation | (3,121,666 | ) | (9,240,373 | ) | (1,296,567 | ) | ||||||
| Total operating expenses | (34,194,693 | ) | (57,556,130 | ) | (8,076,013 | ) | ||||||
| Loss from operations | (10,789,834 | ) | (25,770,489 | ) | (3,615,998 | ) | ||||||
| Interest expenses | (9,439,287 | ) | (8,488,238 | ) | (1,191,031 | ) | ||||||
| Interest income | 1,072,886 | 1,419,568 | 199,187 | |||||||||
| Foreign currency exchange gain/(loss), net | 33,791 | (7,375 | ) | (1,035 | ) | |||||||
| Other income | 351,449 | 142,683 | 20,021 | |||||||||
| Changes in fair value of financial instruments | 12,651,972 | - | - | |||||||||
| Loss before income tax expenses | (6,119,023 | ) | (32,703,851 | ) | (4,588,856 | ) | ||||||
| Income tax expense | (2,834,095 | ) | (4,042,618 | ) | (567,242 | ) | ||||||
| Net loss | (8,953,118 | ) | (36,746,469 | ) | (5,156,098 | ) | ||||||
| Accretion of redeemable convertible preferred shares to redemption value | (59,603,833 | ) | - | - | ||||||||
| Net loss attributable to ordinary shareholders | (68,556,951 | ) | (36,746,469 | ) | (5,156,098 | ) | ||||||
| Net loss attributable to non-controlling interest | 3,122,783 | 4,404,877 | 618,072 | |||||||||
| Net loss attributable to DDC Enterprise Limited | (71,679,734 | ) | (41,151,346 | ) | (5,774,170 | ) | ||||||
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DDC ENTERPRISE LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS – (Continued)
|
For the Six Months Ended June 30， |
||||||||||||
| 2023 | 2024 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Other comprehensive loss, net of nil income taxes: | ||||||||||||
| Foreign currency translation adjustment, net of nil income taxes | (58,857,569 | ) | (2,035,230 | ) | (285,574 | ) | ||||||
| Net unrealized gains on available-for-sale debt Securities |
- | 2,989,431 | 419,463 | |||||||||
| Total other comprehensive (loss)/income | (58,857,569 | ) | 954,201 | 133,889 | ||||||||
| Comprehensive loss: | (127,414,520 | ) | (35,792,268 | ) | (5,022,209 | ) | ||||||
| Comprehensive income attributable to non-controlling interests | 3,122,783 | 4,404,877 | 618,072 | |||||||||
| Comprehensive loss attributable to DDC Enterprise Limited | (130,537,303 | ) | (40,197,145 | ) | (5,640,281 | ) | ||||||
| Net loss per ordinary share | ||||||||||||
| — Basic and diluted – Class A | (12.71 | ) | (1.83 | ) | (0.26 | ) | ||||||
| — Basic and diluted – Class B | - | - | - | |||||||||
| Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share | ||||||||||||
| — Basic and diluted – Class A | 5,638,277 | 22,432,700 | 22,432,700 | |||||||||
| — Basic and diluted – Class B | 875,000 | 875,000 | 875,000 | |||||||||
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Use of Non-GAAP Financial Measure
The Company used adjusted EBITDA, non-GAAP financial measures, in evaluating its operating results and for financial and operational decision-making purposes. Adjusted EBITDA represents net loss excluding changes in income tax expense, interest expenses, interest income, foreign currency exchange loss/(gain), other income, depreciation and amortization, gains arising from modification of financial instruments, and share-based compensation.
The Company provided adjusted EBITDA because we believe that investors and analysts may find it useful in measuring operating performance.
Reconciliation from net loss to adjusted EBITDA
| For the Six months Ended June 30, |
||||||||||||
| 2023 | 2024 | 2024 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Net loss | (8,953,118 | ) | (36,746,469 | ) | (5,156,097 | ) | ||||||
| Add: | ||||||||||||
| Income tax expense | 2,834,095 | 4,042,618 | 567,242 | |||||||||
| Interest expenses | 9,439,287 | 8,488,238 | 1,191,031 | |||||||||
| Interest income | (1,072,886 | ) | (1,419,568 | ) | (199,187 | ) | ||||||
| Foreign currency exchange (gain)/loss, net | (33,791 | ) | 7,375 | 1,035 | ||||||||
| Other income | (351,449 | ) | (142,683 | ) | (20,021 | ) | ||||||
| Changes in fair value of financial instruments | (12,651,972 | ) | - | - | ||||||||
| Depreciation and amortization | 1,418,629 | 1,982,413 | 278,163 | |||||||||
| Share-based compensation | 3,121,666 | 9,240,373 | 1,296,567 | |||||||||
| Adjusted EBITDA | (6,249,539 | ) | (14,547,703 | ) | (2,041,267 | ) | ||||||
For the six months ended June 30, 2023 and 2024, the Company incurred an adjusted EBITDA with loss of RMB6.2 million and RMB14.5 million (US$2.0 million) respectively.
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DDC ENTERPRISE LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, | June 30, | |||||||||||
| 2023 | 2024 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 78,790,697 | 79,941,616 | 11,217,042 | |||||||||
| Restricted cash | 497,108 | 53 | 7 | |||||||||
| Short-term investment | 104,086,826 | 124,888,519 | 17,523,786 | |||||||||
| Accounts receivable, net | 29,508,542 | 54,921,678 | 7,706,359 | |||||||||
| Inventories | 9,984,100 | 10,084,426 | 1,415,001 | |||||||||
| Prepayments and other current assets | 97,589,397 | 117,032,618 | 16,421,482 | |||||||||
| Total current assets | 320,456,670 | 386,868,910 | 54,283,677 | |||||||||
| Non-current assets | ||||||||||||
| Long-term investments | 14,136,050 | 14,136,050 | 1,983,506 | |||||||||
| Property, plant and equipment, net | 603,035 | 481,501 | 67,562 | |||||||||
| Operating lease Right-of-use assets | 6,169,983 | 5,015,252 | 703,717 | |||||||||
| Intangible assets, net | 9,426,569 | 31,912,386 | 4,477,800 | |||||||||
| Goodwill | 46,999,355 | 100,699,401 | 14,129,680 | |||||||||
| Other non-current assets | 43,150,129 | 41,366,390 | 5,804,343 | |||||||||
| Total non-current assets | 120,485,121 | 193,610,980 | 27,166,608 | |||||||||
| Total assets | 440,941,791 | 580,479,890 | 81,450,285 | |||||||||
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DDC ENTERPRISE LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS – (Continued)
| December 31, | June 30, | |||||||||||
| 2023 | 2024 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Short-term bank borrowings | 19,500,000 | 43,500,000 | 6,103,721 | |||||||||
| Current portion of long-term bank borrowings | 1,993,168 | 1,853,791 | 260,115 | |||||||||
| Accounts payable | 20,793,699 | 39,793,134 | 5,583,591 | |||||||||
| Contract liabilities | 13,773,974 | 31,568,757 | 4,429,584 | |||||||||
| Shareholder loans, at amortized cost | 26,150,243 | 81,406,491 | 11,422,587 | |||||||||
| Amounts due to related parties | 17,605,694 | 21,191,036 | 2,973,429 | |||||||||
| Accrued expenses and other current liabilities | 168,952,161 | 174,081,709 | 24,426,349 | |||||||||
| Current portion of lease liabilities | 2,590,785 | 1,957,352 | 274,647 | |||||||||
| Current portion of finance lease liabilities | 103,310 | 86,111 | 12,083 | |||||||||
| Convertible loans, at fair value | 6,372,830 | 8,807,788 | 1,235,869 | |||||||||
| Convertible loans, at amortized cost | 3,541,350 | 7,041,350 | 988,010 | |||||||||
| Total current liabilities | 281,377,214 | 411,287,519 | 57,709,985 | |||||||||
| Non-current liabilities | ||||||||||||
| Long-term bank borrowings | 5,519,461 | 4,700,394 | 659,538 | |||||||||
| Operating lease liabilities | 4,045,089 | 3,545,569 | 497,498 | |||||||||
| Finance lease liabilities | 37,411 | - | - | |||||||||
| Warrant liabilities | 87,279 | 87,279 | 12,247 | |||||||||
| Shareholder loans, at amortized cost | 56,928,815 | - | - | |||||||||
| Convertible loans, at fair value | 7,964,014 | 1,068,651 | 149,948 | |||||||||
| Convertible loans, at amortized cost | 3,500,000 | - | - | |||||||||
| Deferred tax liabilities | 3,827,489 | 8,694,628 | 1,219,990 | |||||||||
| Other non-current liabilities | 10,405,554 | 10,405,554 | 1,460,060 | |||||||||
| Total non-current liabilities | 92,315,112 | 28,502,075 | 3,999,281 | |||||||||
| Total liabilities | 373,692,326 | 439,789,594 | 61,709,266 | |||||||||
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DDC ENTERPRISE LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS – (Continued)
| December 31, | June 30, | |||||||||||
| 2023 | 2024 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Shareholders’ equity | ||||||||||||
| Class A ordinary shares (US$0.016 par value per share, 55,248,154 shares and 200,000,000 shares authorized as of December 31, 2023 and June 30, 2024, respectively; 20,028,168 shares and 31,168,607 shares issued and outstanding as of December 31, 2023 and June 30, 2024, respectively) | 2,230,296 | 3,500,627 | 491,192 | |||||||||
| Class B ordinary shares (US$0.016 par value per share, 875,000 shares and 1,700,000 shares authorized as of December 31, 2023 and June 30, 2024, respectively; 875,000 shares issued and outstanding as of December 31, 2023 and June 30, 2024, respectively) | 96,589 | 96,589 | 13,553 | |||||||||
| Additional paid-in-capital | 1,816,654,303 | 1,924,617,071 | 270,053,470 | |||||||||
| Accumulated deficit | (1,637,790,086 | ) | (1,678,941,432 | ) | (235,581,388 | ) | ||||||
| Accumulated other comprehensive loss | (135,581,744 | ) | (134,627,543 | ) | (18,890,321 | ) | ||||||
| Total shareholders’ equity attributable to DDC Enterprise Limited | 45,609,358 | 114,645,312 | 16,086,506 | |||||||||
| Non-controlling interest | 21,640,107 | 26,044,984 | 3,654,513 | |||||||||
| Total shareholders’ equity | 67,249,465 | 140,690,296 | 19,741,019 | |||||||||
| Total liabilities and shareholders’ equity | 440,941,791 | 580,479,890 | 81,450,285 | |||||||||
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