Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 51

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 51
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 shareholder of such SPV fails to make the required registration or
to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the
proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional
capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and
Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015
and was further amended in December 2019. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign
direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be registered with
qualified banks instead of the SAFE. The qualified banks will directly examine the applications and accept registrations under the
supervision of the SAFE or its local branch. Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas
non-publicly-listed companies due to their position as director, senior management or employees of the PRC subsidiaries of the overseas
companies may submit applications to the SAFE or its local branches for the foreign exchange registration with respect to offshore special
purpose companies. Our directors, executive officers and other employees who are PRC residents and who were granted options may follow
SAFE Circular 37 to apply for the foreign exchange registration before our company became an overseas listed company.

We cannot provide any assurance
that the PRC residents will make or obtain any applicable registrations or comply with other requirements under SAFE Circular 37
and other applicable laws and regulations or compel all such PRC residents to do so. The failure or inability of our PRC resident shareholders
to comply with the registration procedures set forth in such regulations may subject us to fines and legal sanctions, restrict our cross-border
investment activities, limit the ability of our wholly foreign-owned subsidiaries in China to distribute dividends and the proceeds from
any reduction in capital, share transfer or liquidation to us, and we may also be prohibited from injecting additional capital into these
subsidiaries. Moreover, failure to comply with the various foreign exchange registration requirements described above could result in
liability under PRC law for circumventing applicable foreign exchange restrictions. As a result, our business operations and prospects
and our ability to distribute profits to you could be materially and adversely affected.

We and certain of