Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066342
Chunk: 79

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 79
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 governance of these entities could be severely and adversely compromised.

In China, a company chop or
seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered
company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to
this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries
are generally held securely by personnel designated or approved by us in accordance with our internal control procedures. To the extent
those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance
of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms of any documents
so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so. In addition, if the chops
are misused by unauthorized persons, we could experience disruption to our normal business operations. We may have to take corporate or
legal action, which could involve significant time and resources to resolve while distracting management from our operations.

We face uncertainties with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.

On March 15, 2019, the
National People’s Congress approved the Foreign Investment Law (the “FIL”), which took effect on January 1, 2020
(with the Implementation Rules to the FIL come into effect from the same day) and replaced the Sino-Foreign Equity Joint Venture
Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Foreign-invested Enterprise Law, together with their
implementation rules and ancillary regulations, to become the legal foundation for foreign investment in the PRC.

However, uncertainties still
exist in relation to interpretation and implementation of the FIL, especially in regard to, including, among other things, and specific
rules regulating the organization form of foreign-invested enterprises within the five-year transition period. Under the FIL, foreign
investors and foreign-invested enterprises will be subject to legal liabilities if they fail to report investment information in accordance
with the FIL. In addition, the FIL provides that foreign-invested enterprises established according to the existing laws regulating
foreign investment may maintain their structure and corporate governance within a five-year transition period, which means that