DDC Enterprise Ltd. Announces the Closing of $4.8m Loan Restructuring

Rhea-AI Summary

DDC Enterprise (NYSEAM: DDC), a leading multi-brand Asian consumer food company, has successfully recapitalized its debt and secured additional funding. The company completed a $4.8 million loan restructuring with ten creditors, converting outstanding principal and interest into Class A Ordinary shares. Additionally, DDC raised $1.7 million through a private placement of Class A Ordinary shares with four investors. These transactions resulted in the issuance of approximately 9.5 million Class A Ordinary shares.

CEO Norma Chu expressed enthusiasm about the creditors' support and the positive impact on the company's balance sheet. The proceeds will be used for working capital and other corporate purposes, supporting brand growth and expanded distribution channels. The securities were offered and sold in a private transaction and are not registered under the Securities Act of 1933.

Positive

• Conversion of $4.8 million in debt to equity, improving the balance sheet
• Raised $1.7 million in additional capital through private placement
• Increased working capital for brand growth and expanded distribution channels

Negative

• Issuance of 9.5 million new shares, potentially diluting existing shareholders

Financial Analyst

This debt restructuring and private placement are significant positive developments for DDC Enterprise. The conversion of $4.8 million in debt to equity substantially improves the company's balance sheet, reducing interest expenses and enhancing financial flexibility. The additional $1.7 million raised through private placement provides important working capital for growth initiatives.

The transaction's structure, converting debt to equity and attracting new investment, signals investor confidence in DDC's future prospects. However, the 9.5% dilution from issuing 9.5 million new shares is a consideration for existing shareholders. Overall, this financial maneuver strengthens DDC's position in the competitive Asian consumer food market, potentially setting the stage for accelerated growth and improved profitability.

Market Research Analyst

DDC's strategic move to restructure debt and secure additional funding comes at a important time in the Asian consumer food market. With changing consumer preferences and an increasing demand for convenience foods, DDC is now better positioned to capitalize on these trends. The $1.7 million influx allows for potential expansion of product lines and distribution channels, which could lead to increased market share.

However, investors should closely monitor how effectively DDC utilizes this capital. The success of this recapitalization will largely depend on the company's ability to translate improved financial health into tangible market gains. Keep an eye on upcoming quarterly reports for indicators of revenue growth and market penetration as key metrics to evaluate the impact of this financial restructuring.

and $1.7m private placement to bolster balance sheet

NEW YORK--(BUSINESS WIRE)-- DDC Enterprise, Ltd., (NYSEAM: DDC) (“DayDayCook,” “DDC,” or the “Company”), a leading multi-brand Asian consumer food company, is pleased to announce that the Company has recapitalized its debt obligations and achieved additional funding through the sale of equity in a private placement.

DDC recently completed a transaction with ten creditors to retire $4,800,000 USD of outstanding principal and interest which was converted into Class A Ordinary shares. Additionally, four investors participated in a private placement to purchase approximately $1,700,000 USD of Class A Ordinary shares. The transactions resulted in the issuance of approximately 9,500,000 Class A Ordinary shares.

“DDC is very excited about the support demonstrated from some of our creditors that were enthusiastic about the opportunity to invest in the Company,” said Norma Chu, Chief Executive Officer. “Converting the loans and gaining additional financial support have a meaningful impact on our balance sheet and provide the Company with cash to grow our brands and fund expanded distribution channels.”

The Company expects to use the proceeds from the financing for working capital and other corporate purposes. The offer and sale of the Class A Ordinary shares were made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended, and may not be reoffered or resold except pursuant to an effective registration statement or an applicable exemption from the registration requirements. The Company reported on a Form 6-K filed with the SEC on June 21, 2024, that it had entered into agreements with the creditors and investors and that the transactions were subject to closing conditions. Those conditions have now been satisfied.

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, Omsom, MengWei, and Yujia Weng. Follow the Company on LinkedIn.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements, including, for example, statements about 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/20240823046662/en/

Jeff Ervin

Co-CFO

jeffervin@daydaycook.com

Source: DDC Enterprise Limited

FAQ

What was the total value of DDC Enterprise's (DDC) recent financial transactions?

DDC Enterprise's recent financial transactions totaled $6.5 million, consisting of a $4.8 million loan restructuring and a $1.7 million private placement.

How many Class A Ordinary shares did DDC Enterprise (DDC) issue in these transactions?

DDC Enterprise issued approximately 9.5 million Class A Ordinary shares as a result of the loan restructuring and private placement transactions.

What does DDC Enterprise (DDC) plan to do with the proceeds from the financing?

DDC Enterprise plans to use the proceeds from the financing for working capital, growing their brands, and funding expanded distribution channels.

Are the newly issued Class A Ordinary shares of DDC Enterprise (DDC) registered under the Securities Act of 1933?

No, the newly issued Class A Ordinary shares are not registered under the Securities Act of 1933 and were sold in a private transaction not involving a public offering.