Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 215

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 215
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outstanding debt and the redemption dates of redeemable equity securities. In addition, the Company plans to diversify revenue streams
and implement cost saving measures to grow revenues and decrease expenses. However, the Company may be unable to access further equity
or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed
or under acceptable terms, if at all.

The consolidated financial statements do not include
any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the
Company were unable to continue as a going concern.

(c) Principles of Consolidation

The consolidated financial statements include
the unaudited condensed financial statements of the Company and its subsidiaries, which include the Hong Kong-registered entities, and
PRC-registered entities directly or indirectly owned by the Company. All transactions and balances among the Company and its subsidiaries
have been eliminated upon consolidation. The results of subsidiaries acquired or disposed of are recorded in the unaudited condensed consolidated
(loss)/income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.

A subsidiary is an entity in which (i) the Company directly or indirectly
controls more than
50
% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the
board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating policies
of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

(d) Use of Estimates

The preparation of the consolidated financial
statements in accordance with U. S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, related disclosures of contingent assets and liabilities at the balance sheet dates, and the reported revenues and expenses
during the reported periods in the consolidated financial statements and accompanying notes.

F-28

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

Estimates are used for, but not limited to, valuation
allowance for deferred tax assets, assessment for impairment of goodwill, long-lived assets and long-term investments, allowance for doubtful
accounts, lower of cost and net realizable value of inventories, useful lives of property, plant and equipment and intangible assets,
commitments and contingencies, the fair values of financial instruments including redeemable convertible preferred shares, convertible
loans, warrant liabilities