DDC offers preferred shares with a 13.5% annual yield and cash bonuses tied to bitcoin prices

Key Facts

DDC Enterprise announced on November 4 that it had launched a public offering of perpetual cumulative Series A preferred shares, with a stated annual yield of 13.5% and cash bonuses conditional on bitcoin reaching specified price levels. The company estimated the public offering price at $20 per share and said the offering remained subject to market conditions and other terms, with no assurance it would be completed or retain its expected size and terms. The announcement gives underwriters a 45-day option to purchase additional shares of up to 15% of the shares offered. In a separate transaction, institutional and accredited investors agreed to buy at least 1.2 million shares at the same price. The plan thus combines a public offering whose announcement specified no minimum number of shares with a direct subscription that has an agreed minimum.

The annual yield of 13.5% is calculated on a par value of $25 per share, not on the expected offering price of $20; this equates to annual cash distributions of $3.375 per share. Distributions accrue daily and are expected to be paid on each business day from funds legally available for that purpose. If any distribution due is not paid, additional distributions accrue on it. The $25 par value is the basis for the calculation, making clear that the stated yield is tied to this value specified in the share terms. According to the company, it will maintain a separate cash reserve sufficient to cover daily distributions for at least 12 months, but the account remains the company's property and does not grant preferred shareholders a lien or security interest in it.

The bitcoin-linked bonuses are one-time cash payments, not an automatic increase in the regular distribution. The terms specify a payment of $0.75 per share if bitcoin reaches or exceeds $180,000 for ten consecutive trading days. The payment rises to $1.25 at the $250,000 threshold and to $2 at $350,000, with each threshold required to hold for ten consecutive trading days. The payments total $4 per share if all three conditions are met. This part of the offering terms ties additional value to specified levels and the price remaining above them, while leaving base distributions subject to the availability of funds that may legally be used for payment.

Investors in the separate direct subscription agreed to purchase at least 1.2 million shares at $20 per share, for an aggregate par value of $30 million and expected gross proceeds of at least about $24 million before expenses. This minimum differs from the public offering, for which the company's announcement set no minimum number of shares, though it gave underwriters an option to buy additional shares. The prospectus sets interdependent conditions for completing the two transactions: closing requires the sale of at least 1.2 million shares in the direct offering and the execution of a subscription agreement to sell at least 200,000 shares in the concurrent public offering. The direct subscription price must also be no higher than the public offering price. The public offering will close only after the direct subscription closes and receipt of its proceeds is confirmed.

DDC describes the shares as perpetual, with no stated maturity date, and senior to common shares in the order of claims, but subordinate to the company's existing and future debt. The company may redeem them before the third anniversary of issuance for 105% of their par value, plus any accrued and unpaid distributions; after that, redemption would be at par value plus accrued and unpaid distributions. Their ranking means preferred shareholders have priority over common shareholders in claims, but their rights remain subordinate to creditors. From the public offering proceeds, the company said it may allocate, at its discretion, up to 20% to repay part of its outstanding convertible notes. Other uses include the distribution reserve and general corporate purposes, which may include bitcoin purchases and mergers and acquisitions.

The new transaction comes as DDC transforms into an Asian food platform and a digital-asset treasury management company. The company recorded revenue of $39.2 million in fiscal 2025, up 4.6% year over year, and reported its first positive adjusted earnings before interest, taxes, depreciation and amortization of $0.4 million, compared with a loss of $3.5 million in 2024. In China, its primary market, revenue rose 9.8% in 2025; the company attributed this to expanded offline distribution and higher sales in smaller cities. But its report for the first half of 2026 showed a net loss of $38.4 million, which it said was driven mainly by unrealized losses of $34.3 million from revaluing its bitcoin holdings. Revenue in dollar terms rose about 29% to $20.2 million in the first half, while the company's holdings increased to about 2,899 bitcoin, from 1,181 on December 31, 2025, a 145% increase since the start of 2026.

Chief Executive Norma Chu said in a shareholder letter published on November 5 that repaying the outstanding convertible note was a priority, and that using up to 20% of the offering proceeds for that purpose would depend on the amounts raised, the availability of financing and final agreements. She added that the company would announce when repayment arrangements were complete and the note had been retired. In the same letter, the company said the preferred shares had launched and would trade on the NYSE American under the ticker SVOR. DDC shares closed at $0.1357 on November 5, according to EL7 daily closing data. Completion of the offering, its size and its final terms remain subject to market conditions and the closing requirements set out in the prospectus.