Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 208

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 208
---
 of the VIEs and its
nominee shareholders, governed by local laws, as described above, are valid, binding and enforceable in accordance with their terms and
applicable local laws, rules, and regulations currently in effect, both currently and immediately after giving effect to the listing in
capital market, and do not and will not violate any applicable local laws, regulations, or rules currently in effect. However, there are
substantial uncertainties regarding the interpretation and application of current and future local laws and regulations. Accordingly,
if the local government finds that the contractual arrangements do not comply with its restrictions on foreign ownership of businesses,
or if the local government otherwise finds that the Company and the VIEs are in violation of local laws or regulations or lack the necessary
permits or licenses to operate the Company’s business, the relevant regulatory authorities would have broad discretion in dealing
with such violations, including:

  revoking the business and operating licenses of the Company;  

  discontinuing or restricting the operations;  

F-26

1. DESCRIPTION OF BUSINESS AND ORGANISATION(cont.)

  imposing fines or confiscating any of VIEs’ income that they deem to have been obtained through illegal operations;  

  imposing conditions or requirements with which the Company’s subsidiaries or the VIEs may not be able to comply;  
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────

  requiring the Company to restructure the ownership structure or operations, including terminating the contractual arrangements with the VIEs;  

  restricting or prohibiting the Company’s use of the proceeds of overseas offering to finance the business and operations in these jurisdictions; or  

  taking other regulatory or enforcement actions that could be harmful to the business.  

In accordance with VIE Agreements, the Company
has the power to direct the activities of the VIEs. Therefore, the Company considers that there are no assets in the VIEs that can be
used only to settle obligations of the VIEs. The creditors of VIEs do not have recourse to the general credit of the Company and its subsidiaries.
To the extent VIEs require financial support, the Company may, at its option and to the extent permitted under the local law, provide
financial support to VIEs.

The VIEs also have assembled work force for sales,
marketing and operations which were not recorded on the Company’s consolidated balance sheets as they do not meet all the capitalization
criteria.

2. SUMMARY OF SIGNIFIC