Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 299

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 299
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 that it is not required to be bifurcated because it is considered to be clearly and closely related to
the debt host, as the loans were not issued at a substantial discount or premium and are redeemable at par. There were no other embedded
derivatives that are required to be bifurcated.

As of December 31, 2022 and 2023, the May 2022
Convertible Loan was recorded as current liability at amortized cost.

August 2022 Convertible Loan

In August 2022, the Company entered into a convertible
loan agreement with a new lender for a total principal amount of RMB3.5million (US$0.5million) (“the August 2022 Convertible Loan”).
Interest rate is8% per annum of the August 2022 Convertible Loan and its maturity date is the third anniversary of the issuance date.
The Company may not prepay the Loan prior to the maturity date. The August 2022 Convertible Loan shall be repayable on demand upon the
occurrence of any of the following: (1) a Qualified IPO has not taken place prior to the maturity date; or (2) the Company’s total
revenue for the year ending December 31, 2023 as shown on its audited consolidated financial statements for the same period being less
than RMB900million.

Loan conversion shall take place on the date of
the corporate transaction conversion date or listing of the qualified IPO. The conversion price is US$11.68per share, or a price per
share that equals to the product of X multiplied by90% (where “ X” equals US$210million divided by the Company’s total
number of shares immediately before Qualified IPO calculated on fully diluted basis), or a price per share that equals to90% of the price
per share of any Initial Public Offering that is not a Qualified IPO, or a price per share that equals to the implied price per share
of any corporate transaction (other than an Initial Public Offering that is not a Qualified IPO), whichever is lower.

The Company elected to record the August 2022
Convertible Loan at fair value. As of December 31, 2023, the August 2022 Convertible Loan was classified as current, as the Company’s
total revenue for the year ended December 31, 2023 was less than RMB900million.

F-89

18. CONVERTIBLE LOANS AND SHAREHOLDER LOANS(cont.)

December