Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 91

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 91
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, we use our liquid assets and the cash raised in our initial public offering. If we determine not to deploy significant amounts
of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of
the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance
that we will not be a PFIC for the current taxable year or any future taxable year.

If we are a PFIC in any taxable
year, a U. S. Holder (as defined in “Taxation - United States Federal Income Tax Considerations”)
may incur significantly increased United States income tax on gain recognized on the sale or other disposition of our Class A Ordinary
Shares and on the receipt of distributions on our Class A Ordinary Shares to the extent such gain or distribution is treated as an “excess
distribution” under the United States federal income tax rules and such holder may be subject to burdensome reporting requirements.
Further, if we are a PFIC for any year during which a U. S. Holder holds our Class A Ordinary Shares, we will generally continue to
be treated as a PFIC for all succeeding years during which such U. S. Holder holds our Class A Ordinary Shares. For more information
see “Taxation - United States Federal Income Tax Considerations - Passive Foreign Investment
Company Rules.”

Investors should consult their
own tax advisors regarding all aspects of the application of the PFIC rules to the Class A Ordinary Shares.

We may lose our foreign private issuer status
in the future, which could result in significant additional costs and expenses.

As discussed above, we are
a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements
of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s
most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Ordinary
Shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to
maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with
the SEC periodic reports and registration statements on U. S. domestic issuer forms, which are more detailed and extensive than the
forms available to a foreign private issuer. We will also have to mandator