Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 149

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 149
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 attention of our management, which could seriously harm our business.

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We intend to grant employee share options and other share-based awards in the future. We will recognize any share-based compensation expenses in our consolidated statements of operations and comprehensive loss. Any additional grant of employee share options and other share-based awards in the future may have a material adverse effect on our results of operation.

We adopted an employee share
option plan in 2023, or the 2023 ESOP, for the purpose of granting share-based compensation awards to our employees, directors and consultants
to incentivize their performance and align their interests with ours. As of the date of filing the Annual Report, awards may be granted
under the 2023 ESOP for up to 5,200,000 Class A Ordinary Shares. In addition, on January 1 of each year, additional shares will be added
to the 2023 ESOP in an amount up to 10% of the Company’s issued and outstanding Class A Ordinary Shares as of December 31 of the
prior year; provided that the total number of Class A Ordinary Shares which may be issued upon exercise of all options to be granted to
all participants under the 2023 ESOP shall not in aggregate exceed 15% of the Company’s issued and outstanding Class A Ordinary
Shares. As a result of this annual automatic increase, we expect that as of January 1, 2025, an additional 6.6 million shares will be
available for issuance under the 2023 ESOP As a result of these grants and potential future grants, we expect to continue to incur significant
share-based compensation expenses in the future. The amount of these expenses is based on the fair value of the share-based awards. We
account for compensation costs for all share options using a fair-value based method and recognize expenses in our consolidated statements
of profit or loss and other comprehensive income. The expenses associated with share-based compensation will decrease our profitability,
perhaps materially, and the additional securities issued under share-based compensation plans will dilute the ownership interests of our
shareholders. However, if we limit the scope of our share-based compensation plan, we may not be able to attract or retain key personnel
who expect to be compensated by options.

If we fail to meet applicable listing requirements, the NYSE American may delist our Class A Ordinary Shares from trading, in which case the liquidity and market price of our Class A Ordinary Shares could decline.

We cannot assure you