Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 230

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 230
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 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, 2021, 2022 and 2023, the Company received financial subsidies of RMB4.4million, RMB0.2million and
RMB0.1million, 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
using the binomial-lattice option pricing model. The Company elects to recognize the effect of forfeitures as compensation costs when
they occur. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously
recognized compensation expense relating to those awards is reversed.

F-40

2. SUMMARY OF SIGNIFICANT ACCOUNTING