Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 285

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 285
---
 December 31, 2023                     1,655,928                           3.8499                              8.8161      7.02      14,598,906  
  Exercisable as of December 31, 2024                                     1,284,872                           2.1511                              9.8368      6.62      12,639,067  

F-84

20. SHARE-BASED COMPENSATION(cont.)

The expected volatility was estimated based on
the historical volatility of comparable peer public companies with a time horizon close to the expected term of the Company’s options.
The risk-free interest rate was estimated based on the yield to maturity of U. S. treasury bonds denominated in US$ for a term consistent
with the expected term of the Company’s options in effect at the option valuation date. Expected dividend yield is zero as the Company
does not anticipate any dividend payments in the foreseeable future. The expected exercise multiple was estimated as the average ratio
of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. Expected term is
the contract life of the option.

In 2022, the Company modified the share options
for senior management members. Upon the modifications, service condition which originally ended on July 29, 2022 for60,269share options
was removed. In addition, another361,614share options became fully vested as the performance condition of occurrence of a qualified
IPO was removed. In June 2022 these two persons exercised their fully vested361,614share options. In connection with those share options
that the performance condition was removed, the Company recognized compensation cost of RMB33,485,823(US$5,141,560) on the dates based
on the modification fair values of these awards.

The Company did not grant any options in 2024
and the fair values of the options granted in 2023 are estimated on the dates of grant or modification using the binomial option pricing
model with the following assumptions used:

                                               For the Years Ended   
                                               December 31,          
                                               2023                  
 ─────────────────────────────────────────────────────────────────────
  Risk-free rate of return                     3.56%- 5.00%          
  Volatility                                   35.62 - 36.17%        
  Expected dividend yield                      -                     
  Exercise multiple                            2.2 - 2.8             
  Fair value of