Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 306

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 306
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 redesignation of all of the issued and outstanding Class B ordinary shares with
such the rights, preferences and privileges and the authorized Class B Ordinary shares would be875,000as of December 31, 2023.

F-93

20. SERIES SEED CONVERTIBLE PREFERRED SHARES

In November 2015, the Company entered into
a share subscription agreement with a number of investors that the investors agreed to subscribe3,858(subsequently subdivided to241,125)
number of series seed preferred shares for US$1.2million (equivalent of RMB7.6million). The Company also agreed with a number
of ordinary shareholders to redesignate13,366(subsequently subdivided to835,376) number of ordinary shares to series seed preferred
shares. Upon the redesignation, the difference between the carrying amount of the ordinary shares and the fair value of the series seed
preferred shares was recorded as deemed dividend in accumulated losses.

In July 2019, in order to facilitate the
Company to close the round C financing, some holders of series seed preferred shares transferred124,175number of series seed preferred
shares to a new investor at the fair value of US$33.6928per share for a total consideration of US$4.2million (equivalent of RMB28.7million).
As a result, the difference between the carrying amount and the fair value of the series seed preferred shares of US$3.6million
(equivalent of RMB24.5million) was recorded as deemed dividend in accumulated losses.

The key terms of the series seed convertible preferred
shares are summarized below:

Conversion Rights

The series seed convertible preferred shares shall
be convertible, at the option of the holder at any time after the date of issuance of such share according to the initial conversion ratio
of1:1, subject to adjustments for dilution, including but not limited to share splits, share combination, share dividends and distribution
and certain other events.

Each series seed convertible preferred share shall
automatically be converted into ordinary shares upon the earlier of (i) the consummation of a qualified IPO or (ii) the date,
or the occurrence of an event, specified by vote or written consent or agreement of the requisite majority (voting as separate series,
and on an as-converted basis).

Voting Rights

The series seed convertible preferred shareholder
shall be entitled toonevote for each ordinary share into which such series seed convertible preferred shares could then be converted,
and with respect