Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 296

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 296
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 of the modified debt instrument
is at least 10 percent different from the present value of the remaining cash flows under the terms of the original debt instrument. If
the terms of a non-convertible debt instrument are modified and the cash flow effect on a present value basis is less than 10 percent,
the debt instruments are not considered to be substantially different. The calculation of the present value of the cash flows of the new
debt instruments included all cash flows specified by the terms of the new debt instruments plus any amounts paid by the Company.

Based on the above assessment, it was determined
that there was no substantial change of terms in the modification and the new debt was accounted for at amortized cost using a new effective
interest rate determined based on the original debt’s net carrying amount after deducting the revised cash flow under the term of
the modified debt instrument.

As the embedded conversion features are underlying
ordinary shares of a private company and could not be publicly traded or readily convertible into cash, the embedded conversion feature
is not an embedded derivative and does not require bifurcation.

The Company further evaluated the embedded contingent
redemption feature and concluded that it is not required to be bifurcated because it is considered to be clearly and closely related to
the debt host, as the loans were not issued at a substantial discount or premium and are redeemable at par. There were no other embedded
derivatives that are required to be bifurcated.

In June 2023, the Company further extended the
repayment date of the August 2021 Convertible Loan to January 1, 2025, or an earlier date if agreed by both parties. Other terms remained
the same.

It was determined that there was no substantial
change of terms for this modification and the new debt was accounted for at amortized cost using a new effective interest rate determined
based on the original debt’s net carrying amount after deducting the revised cash flow under the term of the modified debt instrument.

F-87

18. CONVERTIBLE LOANS AND SHAREHOLDER LOANS(cont.)

In November 2023, in connection with the completion
of the IPO, which is not the qualified IPO according to the original term of the August 2021 Convertible Loan, the holder agreed with
the Company to convert part of the loan with the carrying amount of RMB8.5million into340,365class A ordinary shares at the conversion
price of US$3.5per share. The Company applied the debt