Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 288

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 288
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 S. treasury bonds denominated in US$ for a term consistent with the expected term in ef...  

  (2)      The expected volatility was estimated based on the historical average volatility of comparable peer public companies with a time horizon close to the expected term of the Company’s warrant liab...  

  (3)      The determination of the fair value of the Company’s preferred shares and ordinary shares requires complex and subjective judgments to be made regarding the cash flow forecasts and the weighted...  

The fair value of the convertible loans measured
at fair value was RMB14.3million and RMB10.1million (US$1.4million) as of December 31, 2023 and 2024, respectively. The Company estimated
the fair value of the convertible loans based on a probability-weighted analysis which included the discounted cash flows from the convertible
loans and the value of the conversion option as determined by the binomial option pricing model. The inputs used in the analysis were
classified as Level 3 inputs within the fair value hierarchy due to the lack of observable market data and activity. If different estimates
and assumptions had been used, the fair values of the preferred shares and ordinary shares could be significantly different, and the fair
value of the convertible loans may materially differ from the recognized amount. Interest expense on the Company’s fixed- rate debt
is displayed separately from other changes in its fair value. The amount presented as interest expense is determined each period by applying
the interest method using the effective interest rate on the debt at its issuance.

The Company did not transfer any financial assets
or liabilities in or out of Level 3 during the years ended December 31, 2023 and 2024, respectively.

F-88

22. OTHER EXPENSES, NET

Other expenses, net for the year ended December
31, 2024 consisted of the following (for the years ended December 31, 2022 and 2023: niland RMB10.4million):

                                                                For the years ended                                      
                                                                December 31                                              
                                                                2022                     2023                      2024  
                                                                RMB                      RMB                       RMB   
  Extinguishment losses                                                                            10,440,057            
  Extinguishment gain                                                                              -                     
  Excess of fair value of instruments issued over proceeds                                         -                     
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Total                                                                                            10,440,057