Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 67

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 67
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 Law, came into effect on June 1, 2007. The Bankruptcy Law provides that an enterprise will be liquidated
if the enterprise fails to settle its debts as and when they fall due, but its assets are insufficient to clear such debts or it becomes
demonstrably insolvent.

Our PRC subsidiary holds certain
assets that are important to our business operations. If our PRC subsidiary undergoes a voluntary or involuntary liquidation proceeding,
unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business,
which could materially and adversely affect our business, financial condition and results of operations.

According to SAFE’s
Notice on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, effective on December 17,
2012, and the Provisions for Administration of Foreign Exchange Relating to Inbound Direct Investment by Foreign Investors, effective
on May 13, 2013, if any of our PRC subsidiaries undergoes a liquidation proceeding, prior approval from SAFE for remittance of foreign
exchange to our shareholders abroad is no longer required, but we still need to conduct a registration process with the SAFE local branch.
It is not clear whether “registration” is a mere formality or involves the kind of substantive review process undertaken by
SAFE and its relevant branches in the past.

Fluctuations in exchange rates could adversely
affect our business and the value of our securities.

Changes in the value of the
RMB against the U. S. dollar, Euro and other foreign currencies are affected by, among other things, changes in China’s political
and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition,
and the value of, and any dividends payable on our shares in U. S. dollar terms. For example, to the extent that we need to convert
U. S. dollars we receive from our securities offerings into RMB for our operations, appreciation of the RMB against the U. S. dollar
would have an adverse effect on RMB amount we would receive from the conversion. Conversely, if we decide to convert our RMB into U. S. dollars
for the purpose of paying dividends on our Class A ordinary shares or for other business purposes, appreciation of the U. S. dollar
against the RMB would have a negative effect on the U. S. dollar amount available to us. In addition, fluctuations of the RMB against