Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 276

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 276
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 December 31, 2023 and 2024, RMB1,424,552due to two lenders was recorded as non-current liability at fair value, respectively.

August 2023 Convertible Loans

In August 2023, the Company entered into convertible
loan agreements with an employee and an individual for the aggregate principal amount of RMB0.8million (“the August 2023 Convertible
Loans”). Interest rate is12% per annum and maturity dates are the third anniversary from the issuance date. The Company may not
prepay the August 2023 Convertible Loans prior to the maturity date.

Loan conversion shall take place on the date of
the corporate transaction or the QIPO. In the event of a QIPO, the total outstanding principal balance of the convertible loan (plus accrued
and unpaid interest) shall automatically convert in whole without any further action by the Lenders into ordinary shares at the conversion
price (the “ Qualified IPO Conversion”) on or immediately before the date of listing of the Qualified IPO (the “ QIPO
Conversion Date”). The conversion price for employee is a price per share that equals to60% of the price per share of any IPO that
is not a QIPO, or a price per share that equals to the implied price per share of any corporate transaction and a QIPO, whichever is lower.
The conversion price for individual is a price per share that equals to70% of the price per share of any IPO that is not a QIPO, or a
price per share that equals to the implied price per share of any corporate transaction and a QIPO, whichever is lower.

The Company elected to record the August 2023
Convertible Loans at fair value.

In November 2023, in connection with the completion
of the IPO, which is not the qualified IPO according to the original term of the August 2023 Convertible Loans, the employee converted
the loan with the principal plus accrued interest of RMB0.3million into12,616class A ordinary shares at the conversion price of US$3.4per share, the individual converted the loan with the principal plus accrued interest of RMB0.5million into18,029class A ordinary shares
at the conversion price of US$3.97per share. The Company applied the debt extinguishment guidance, recognized the fair value of Class
A ordinary shares and derecognized the carrying value of the August 2023 Convertible Loans (note