Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 293

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 293
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 (1) or new preferred shares in the case of (2) and (3), determined
by a formula, at a total nominal consideration of US$1.0for all shares. The lenders shall each have the right to choose either to exercise
the C-1 Warrant or the conversion options, but not both.

Lenders have the right to demand immediate repayment
of the 2020 Convertible Loan together with accrued but unpaid interest upon the occurrence of a trigger event as long as no conversion
option or C-1 Warrant (see below) have been exercised. In particular, upon the occurrence of a liquidation event or event of default,
the lenders shall have the right to elect to require the Company to redeem the 2020 Convertible Loan at an effective interest rate of60% per annum.

F-85

18. CONVERTIBLE LOANS AND SHAREHOLDER LOANS(cont.)

The C-1 Warrant was considered an embedded
feature rather than a freestanding instrument as it is not separately exercisable. As the embedded variable share conversion features
will be share settled by a number of shares with a fair value equal to a fixed monetary amount, they are considered as an in-substance
redemption feature because the settlement amount does not vary with the share price. The Company elected to record the 2020 Convertible
Loans at fair value in their entirety.

In February 2021, in connection with a qualified
financing of Series C-1 Redeemable Convertible Preferred Shares, holders of US$3.8million principal amount of the 2020 Convertible
Loan agreed a modification with the Company (note 17) and these US$3.8million was extinguished upon the modification.

In August 2021, one of the holders of US$250,000principal amount of 2020 Convertible Loan agreed with the Company to modify the conversion term and converted into16,264ordinary shares
at the conversion price of US$15.36per share. The Company applied the debt extinguishment guidance, recognized the fair value of Class A
ordinary shares and derecognized the carrying value of the 2020 Convertible Loan of US$0.4million, which resulted in an extinguishment
gain of RMB0.7million (US$0.1million) (note 23).

In August 2023, the Company further extended the
repayment date of the 2020 Convertible Loan to January 1,