Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 122

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 5
Chunk 122
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 decide to
enhance our liquidity position or increase our cash reserve for future investments or operations through additional capital and finance
funding. Issuance of additional equity securities, including convertible debt securities, would dilute our earnings per share. The incurrence
of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial
covenants that restrict our operations and our ability to pay dividends to our shareholders.

We also utilize short-term
and long-term banking facilities to fund our listing expenses, and to manage our working capital requirements. Short-term banking facilities
are mainly drawn from financial institutions such as Hang Seng Bank (“ HSB”) and Hong Kong and Shanghai Banking Corporation
(“ HSBC”), while we utilize long-term banking facilities from Bank of China (“ BOC”) and Industrial and Commercial
Bank of China (“ ICBC”). As at December 31, 2023, short-term bank loans amount to RMB19.5 million (US$2.8 million), current
portion of long-term bank loans amount to RMB2.0 million (US$0.3 million), and long-term bank loans amount to RMB5.5 million (US$0.8 million).
As at December 31, 2022, short-term bank loans amount to RMB54.8 million, current portion of long-term bank loans amount to RMB2.0
million, and long-term bank loans amount to RMB1.7 million.

Significant short-term bank borrowings

In September 2021, the Company
entered into a banking facility with Hang Seng Bank (“ HSB”). The facility includes one revolving loan facility with the facility
amount of US$5.0 million or its equivalent in HK$ (equivalent to RMB32,280,200) to finance/refinance the Company’s listing expenses
(RLN1), and another revolving loan facility with the facility amount of US$5.0 million or its equivalent in HK$, subject to achievement
of certain conditions, to finance/refinance the Company’s general working capital purposes (RLN2). The facility is only available
upon HSB’s receipt of guarantees in HSB’s standard form for unlimited amount from the Company’s subsidiaries, Grand
Leader Technology Limited, DDC OpenStudio Media Limited and DDC OpenStudio Limited, and guarantee in HSB’s standard form for US$10.0
million from Ms. Norma Ka Yin Chu and Mr. Samuel Derk