Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066342
Chunk: 78

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 78
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 be used by the domestic institution for expenditures under the current
account within its business scope or the expenditure under the capital account permitted by laws and regulations. Such receipts and funds
of the domestic institutions shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the
business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for
investment in securities or other investments than principal-secured products of banks unless otherwise provided by relevant laws and
regulations; (iii) directly or indirectly used for granting of loans to non-affiliated enterprises, with the exception that such
granting is expressly permitted in the business license; and (iv) used for construction or purchase of real estate for purpose other
than self-use (exception applies for real estate enterprises). Where there is any contractual agreement on the use scope of receipt under
the capital account between a domestic institution and other parties involved, the domestic institution shall not use such receipts and
funds beyond the scope. On October 23, 2019, SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border
Trade and Investment, or SAFE Circular No. 28, under which non-investing foreign-invested enterprises are permitted to make equity investments
in the PRC with their capital funds in accordance with applicable PRC laws and regulations under the premise that the domestic investment
projects are true and in compliance with applicable PRC laws and regulations. As the relevant government authorities have broad discretion
in interpreting the regulation, it is unclear whether SAFE will permit such capital funds to be used for equity investments in the PRC
in actual practice.

In light of the various requirements
imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that
we will be able to complete the necessary government registrations or filing on a timely basis, if at all, with respect to future loans
by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such
registrations or filing, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.

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If the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate