Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 272

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 272
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 Convertible
Loan”). The repayment date falls on 12 months from the date of the May 2022 Convertible Loan agreement, provided, that if a Qualified
IPO has not occurred within 12 months from the date of the May 2022 Convertible Loan, the parties hereby agree that the repayment date
shall be extended by 3 months. Interest rate is0% per annum. The Company, at its discretion shall issue the conversion shares to the
lender at the conversion price on the date of listing of the qualified IPO. The conversion price is US$13.5552per share.

As the embedded conversion features are underlying
ordinary shares of a private company and could not be publicly traded or readily convertible into cash, the embedded conversion feature
is not an embedded derivative and does not require bifurcation.

The Company further evaluated the embedded contingent
redemption feature and concluded that it is not required to be bifurcated because it is considered to be clearly and closely related to
the debt host, as the loans were not issued at a substantial discount or premium and are redeemable at par. There were no other embedded
derivatives that are required to be bifurcated.

As of December 31, 2023, the May 2022 Convertible
Loan was recorded as current liability at amortized cost with a balance of RMB3,541,350. As of December 31, 2024, the May 2022 Convertible
Loan has been reclassified to other payables due to maturity.

August 2022 Convertible Loan

In August 2022, the Company entered into a convertible
loan agreement with a new lender for a total principal amount of RMB3.5million (US$0.5million) (“the August 2022 Convertible Loan”).
Interest rate is8% per annum of the August 2022 Convertible Loan and its maturity date is the third anniversary of the issuance date.
The Company may not prepay the Loan prior to the maturity date. The August 2022 Convertible Loan shall be repayable on demand upon the
occurrence of any of the following: (1) a Qualified IPO has not taken place prior to the maturity date; or (2) the Company’s total
revenue for the year ending December 31, 2023 as shown on its audited consolidated financial statements for the same period being less
than RMB900million.

Loan conversion shall take place on the date of