Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 50

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 50
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country or region to implement cross-border supervision and administration, the regulatory cooperation with the securities regulatory
authorities in the Unities States has not been efficient in the absence of a mutual and practical cooperation mechanism. According to
Article 177 of the PRC Securities Law which became effective in March 2020, no foreign securities regulator is allowed to directly
conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without the consent of the
competent PRC securities regulators and relevant authorities, no organization or individual may provide the documents and materials relating
to securities business activities to foreign securities regulators.

As a result, our public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a company incorporated in, or that is based primarily in, the United States.

PRC regulations relating to the establishment
of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability
or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their
registered capital or distribute profits to us, or may otherwise adversely affect us.

In July 2014, the SAFE
promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing
and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC
individuals and PRC entities) to register with SAFE or its local branches in connection with their establishment or control of an offshore
entity established for the purpose of overseas investment or financing with such PRC residents’ legally owned assets or equity interests
in domestic enterprises or offshore assets or interests. SAFE Circular 37 is applicable to our shareholders who are PRC residents and
may be applicable to any offshore acquisitions that we make in the future.

Under SAFE Circular 37, PRC
residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose
vehicles (“ SPV”), will be required to register such investments with the SAFE or its local branches. In addition, any PRC
resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local branch of SAFE
with respect to that SPV, to reflect any material change. If any PRC