Company: DDC
Filing Date: 2025-08-05
Form Type: F-3/A
Source: 0001213900-25-072059
Chunk: 115

Company: DDC Enterprise Ltd
Filing Date: 2025-08-05
Form: F-3/A
Chunk 115
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 (the “FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments
and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining
business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials.
We have operations agreements with third parties, and make sales in China, which may experience corruption. Our activities in China create
the risk of unauthorized payments or offers of payments by one of our franchisees and their employees, consultants or distributors, because
these parties are not always subject to our control. Our franchisees are independent operators and are not subject to our control regarding
to our FCPA practice.

Although we believe, to date,
we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law, our existing safeguards and
any future improvements may prove to be less than effective, and the employees, consultants, franchisees or distributors of our franchisees
may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe
criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results
and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed
by companies in which we invest or that we acquire.

Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.

The PRC tax authorities have
enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in
a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing Notice 59 with the Ministry of Finance, which
was partially amended by Notice 109, and SAT Circular 698, which became effective in January 2008, and SAT Circular 7 in replacement
of some of the existing rules in SAT Circular 698, which became effective in February 2015. SAT Circular 698 was fully abolished
by SAT Circular 37 in December 2017.

Under SAT Circular 698, where
a non-resident enterprise conducts an “indirect transfer” by transferring the equity interests of a PRC “resident enterprise”
indirectly by disposing of the equity interests of an overseas holding company, the