DDC Enterprise’s Chairwoman and CEO to Increase Stake

Rhea-AI Summary

DDC Enterprise (NYSEAM: DDC) announced that Chairwoman and CEO Norma Chu has completed a 10,000,000 share subscription, alongside a new investor, bringing $2,278,080 in total new funds to the company. Chu also plans to purchase up to 10% of DDC's outstanding shares in the open market.

The company provided preliminary 2024 financial guidance, anticipating record revenue in its first full year as a NYSE:AM listed company with expected gross revenue between $34-$40 million and gross margins of 23.5-27%. Cash and equivalents are estimated at $26.2 million as of December 31, 2024.

Additionally, DDC announced it has regained full compliance with NYSE continued listing standards on February 14, 2025, resolving the deficiency referenced in a NYSE letter dated April 23, 2024.

Positive

• CEO Norma Chu increased stake with 10,000,000 share subscription
• New investor participation brought in $2,278,080 total new funds
• Projected record revenue of $34-$40 million for 2024
• Expected gross margins of 23.5-27% for 2024
• Strong cash position with $26.2 million estimated by end of 2024
• Regained NYSE listing compliance, resolving previous deficiency

Negative

• CEO acknowledged 2024 was a challenging year for DDC
• Previous NYSE listing compliance issues (now resolved)
• Adjusted EBITDA for 2024 expected to remain flat compared to June 30, 2024 levels

Insights

Financial Analyst

DDC Enterprise's leadership doubles down with significant capital infusion and share purchases

The announcement from DDC Enterprise reveals several significant developments that warrant investor attention. Chairwoman and CEO Norma Chu has completed a 10 million share subscription via private placement, bringing $2.28 million in fresh capital to the company. This transaction prices shares at approximately $0.228 each, slightly above the current market price of $0.22, indicating confidence rather than seeking a discount.

What's particularly notable is that this 10 million share purchase represents roughly 14% of the company's outstanding shares (based on the current market cap and share price). Additionally, Chu plans to purchase up to 10% more shares on the open market, potentially increasing her ownership to nearly a quarter of the company. This level of insider buying typically signals strong conviction in a company's prospects and may help align management interests with shareholders.

The financial guidance provides mixed signals. The projected $34-40 million revenue for 2024 is described as "record" revenue, but without year-over-year comparisons, it's difficult to assess growth rates. The 23.5-27% gross margin range suggests reasonable profitability for a consumer food company, though below premium food brands that often achieve 30-40% margins.

Perhaps most intriguing is DDC's cash position: at $26.2 million as of December 2024, the company's cash holdings exceed its entire market capitalization of $15.5 million by nearly 69%. This substantial cash buffer creates an unusual situation where investors are effectively valuing the operating business at a negative enterprise value, suggesting extreme market skepticism or potential overlooked value.

The company's recent compliance with NYSE listing requirements removes a significant regulatory overhang. For microcap stocks, maintaining exchange listing is important for institutional investor access and liquidity. The previous deficiency likely related to Section 1003(a)(i) of the NYSE American Company Guide, which typically concerns stockholders' equity thresholds relative to sustained losses.

Despite Chu's optimistic outlook, her acknowledgment of 2024 as a "challenging year" indicates the company faced significant headwinds. Investors should carefully weigh the disconnect between management's confidence and recent performance challenges, while recognizing that the substantial cash position provides both operational runway and potential for strategic initiatives in the Asian consumer food market.

DDC announces that Norma Chu, Chairwoman and CEO, increases her holdings in the company via a private placement and will purchase no more than 10% of DDC shares in Open Market

NEW YORK--(BUSINESS WIRE)-- DDC Enterprise, Ltd. (NYSEAM: DDC), (“DayDayCook,” “DDC,” or the “Company”), a leading multi-brand Asian consumer food company, today announced that the Chairwoman and CEO, Ms. Norma Chu, has completed an increase of 10,000,000 share subscription, alongside a new investor that has set the terms for this round of placement. Total new funds to the company is $2,278,080.

“2024 was a challenging year for DDC but I saw resilient and perseverance amongst our team. With our recent regained compliance with the NYSE, I am excited that we are starting the new year on more solid footings. I am confident in DDC’s potential and our goal of achieving long-term growth for the company.”

Regarding the open market purchase, “I must follow all of the rules and regulations on purchasing DDC shares in the open market during insider trading window,” said Chu about her plan to purchase no more than 10% of DDC’s outstanding shares in the open market from time to time at prevailing market prices in accordance with applicable rules and regulations.

Preliminary 2024 Annual Financial Guidance

DDC anticipates achieving record revenue in its first full year as a NYSE:AM listed company. For calendar year 2024, DDC is expecting to generate gross revenue between $34-$40 million with performance between 23.5-27% gross margin. Adjusted EBITDA for 2024 is expected to be consistent (on an annualize-basis) with amounts reported as of June 30, 2024. Cash, cash equivalents and short-term investments are estimated at $26.2 million as of December 31, 2024.

Regained NYSE Full Compliance

On 14 February 2025, DDC announced that it regained compliance with the New York Stock Exchange (“NYSE”) continued listing standards set forth in Part 10 of the NYSE American Company Guide. The Company has resolved the continued listing deficiency with respect to Section 1003(a)(i) referenced in a NYSE letter dated April 23, 2024.

ABOUT DAYDAYCOOK

DayDayCook 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 press release are forward-looking statements, including, for example, statements about modifying the terms of and repaying loans with shareholders, NYSE and SEC compliance, 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/20250225147435/en/

Investors:

Jeff Ervin

jeffervin@daydaycook.com

Source: DDC Enterprise, Ltd.

FAQ

How many shares did Norma Chu subscribe to in DDC Enterprise's private placement?

Norma Chu subscribed to 10,000,000 shares in DDC Enterprise's private placement.

What is DDC Enterprise's projected revenue range for 2024?

DDC Enterprise projects gross revenue between $34-$40 million for calendar year 2024.

When did DDC regain compliance with NYSE listing standards?

DDC regained compliance with NYSE listing standards on February 14, 2025.

What percentage of DDC shares does Norma Chu plan to purchase in the open market?

Norma Chu plans to purchase no more than 10% of DDC's outstanding shares in the open market.

What is DDC Enterprise's expected gross margin range for 2024?

DDC Enterprise expects a gross margin range of 23.5-27% for 2024.

How much cash and equivalents does DDC Enterprise expect to have by the end of 2024?

DDC Enterprise estimates $26.2 million in cash, cash equivalents and short-term investments as of December 31, 2024.