Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 106

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 106
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 the investment, leverage and cash management policies it authorizes, whether in respect
of our bitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of
acquiring and holding bitcoin.

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Our bitcoin strategy exposes us to risk of non-performance by counterparties.

Our bitcoin strategy exposes us to the risk of
non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty
to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason. For example,
our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with
them, which could result in a loss of bitcoin, a loss of the opportunity to generate funds, or other losses.

Our primary counterparty risk with respect to our
bitcoin is custodian performance obligations under the various custody arrangements we have entered into. A series of recent high-profile
bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset
industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis
Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets
industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc., Binance Holdings Ltd., and Kraken,
the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business
and Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global
Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company have highlighted the perceived and actual
counterparty risk applicable to digital asset ownership and trading. Although these bankruptcies, closures and liquidations have not resulted
in any loss or misappropriation of our bitcoin, nor have such events adversely impacted our access to our bitcoin, legal precedent created
in these bankruptcy and other proceedings may increase the risk of future rulings adverse to our interests in the event one or more of
our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.

While all of our custodians are subject to regulatory
regimes intended to protect customers in the event of a custodial