Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 94

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 94
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) prices on the active exchange, indicated that it was more likely than not that any of our bitcoin
assets were impaired. In determining if an impairment had occurred, we considered the lowest price of one bitcoin quoted on the active
exchange at any time since acquiring the specific bitcoin held. If the carrying value of a bitcoin exceeded that lowest price at any time
during the quarter, an impairment loss was deemed to have occurred with respect to that bitcoin in the amount equal to the difference
between its carrying value and such lowest price, and subsequent increases in the price of bitcoin did not affect the carrying value of
our bitcoin. Gains (if any) were not recorded until realized upon sale, at which point they would be presented net of any impairment losses.
In determining the gain to be recognized upon sale, we calculated the difference between the sale price and carrying value of the specific
bitcoin sold immediately prior to sale.

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ASU 2023-08 requires us to measure our bitcoin
holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our
bitcoin in net income each reporting period. ASU 2023-08 also requires us to provide certain interim and annual disclosures with respect
to our bitcoin holdings. We have applied a cumulative-effect adjustment to the opening balance of retained earnings as of January 1, 2025
of $12.745 billion. ASU 2023-08 does not permit retrospective restatement of prior periods. Accordingly, we expect the adoption of ASU
2023-08 to significantly affect the carrying value of our bitcoin on our balance sheet.

As a result of our adoption of ASU 2023-08, we
may incur greater losses during periods when we previously would have incurred smaller losses or no losses because we had already impaired
the carrying value of our bitcoin to a low price observed during a prior period, and we may also incur gains during periods when the market
value of bitcoin rises, as compared to periods prior to January 1, 2025, when we would not have incurred any gains under similar circumstances.
Accordingly, due in particular to the volatility in the price of bitcoin, we expect the adoption of ASU 2023-08 to increase the volatility
of our financial results. Additionally, as a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of
retained earnings as of January 1,