Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 224

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 224
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 RMB1.7million and RMB1.2million for the years ended December
31, 2022, 2023 and 2024, respectively.

(y) Research and development expenses

Research and development expenses are primarily
of expenses for consulting work performed by third party involved in the development of new products innovation. Research and development
expenses are expensed as incurred.

(z) General and Administrative Expenses

General and administrative expenses mainly consist
of payroll and related costs for employees involved in general corporate functions, expenses associated with the use of facilities and
equipment by these employees, such as operating lease and depreciation expenses, professional fees, information service fees, technical
service fees, amortization expenses related to intangible assets acquired in business combinations, bank charges and other general corporate
expenses.

(aa) Government grants

Government grants are received from provincial
and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments.
During the years ended December 31, 2022, 2023 and 2024, the Company received financial subsidies of RMB0.2million, RMB0.1million and
RMB0.4million, respectively, from various local PRC government authorities. There are no defined rules and regulations to govern the
criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the
relevant government authorities. Such amounts are recorded in other income when received as the amount of the subsidies and the timing
of payment are determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will
continue to receive any or similar subsidies in the future.

(ab) Share-based Compensation

The Company determines whether an award should
be classified and accounted for as a liability award or an equity award. Both liability-classified awards and equity-classified awards
are initially measured at their grant-date fair value. At each financial reporting date and ultimately at settlement date, the fair value
of a liability-classified award is remeasured. An equity-classified award is not remeasured after grant date. If share-based awards are
subject to both service conditions and the occurrence of an initial public offering (“ IPO”) as performance condition, cumulative
share-based compensation expenses for the awards that have satisfied the service condition will be recorded upon the completion of the
IPO, using the graded-vesting method. The fair value of share options at the time of grant or modification, if applicable, is determined