Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066342
Chunk: 131

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 131
---

current account transactions. As we have some operations in PRC, we expect a portion of our cash will be denominated in Renminbi, any
existing and future restrictions on currency exchange may limit our ability to utilize our Renminbi to fund our business activities outside
of the PRC or pay dividends in foreign currencies to our shareholders. Foreign exchange transactions under the capital account remain
subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities. This could
affect our ability to obtain foreign currency through debt or equity financing for our subsidiary.

A significant portion of our cash has been invested in short term investments which may decline in value and which we may not be able to convert to cash when necessary to satisfy our obligations

As of December 31, 2024, approximately
RMB130.1 million (US$17.8 million) of our cash is invested in short term investment accounts at money market fund. These accounts could
decline in value and may not be available for withdrawal when cash is needed, which would negatively impact our financial condition and
ability to operate.

Dividends paid to our foreign investors and gains on the sale of the Class A Ordinary Shares by our foreign investors may become subject to PRC tax.

Under the Enterprise Income
Tax Law and its implementation regulations issued by the State Council, a 10% PRC withholding tax is applicable to dividends paid to investors
that are non-resident enterprises, which do not have an establishment or place of business in the PRC or which have such establishment
or place of business but the dividends are not effectively connected with such establishment or place of business, to the extent such
dividends are derived from sources within the PRC. Any gain realized on the transfer of Class A Ordinary Shares by such investors
is also subject to PRC tax at a current rate of 10%, if such gain is regarded as income derived from sources within the PRC. If we
are deemed a PRC resident enterprise, dividends paid on our Class A Ordinary Shares, and any gain realized from the transfer of our Class
A Ordinary Shares, would be treated as income derived from sources within the PRC and would as a result be subject to PRC taxation. Furthermore,
if we are deemed a PRC resident enterprise, dividends paid to individual investors who are non-PRC residents and any gain realized on
the transfer of Class A Ordinary Shares by such investors may be subject to PRC tax (which in the