Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 108

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 108
---
 expenses primarily
including general office expenses, (iv) research and development expenses, (iv) impairment of intangible assets, and (v) office rental
expenses.

Impairment loss on goodwill:

Impairment loss on goodwill
resulted from the impairment of goodwill from the acquisition of subsidiaries.

Share-based compensation:

The Company’s shareholders and Board of Directors approved option
plans from 2014 to 2024 in order to provide incentives and rewards to the Company’s employees, directors, consultants and senior
management (the “ Option Plans”). The cost of share-based compensation also includes options granted related to certain business
acquisitions.

Result of operations

Year ended December 31, 2024 compared to Year ended December
31, 2023

Revenues

For the year ended December
31, 2024, we recorded RMB273.3 million (or US$37.4 million) in total revenue compared to RMB205.5 million for the year ended December
31, 2023, representing a 33.0% increase. The increase in total revenue was due to the increase in offline consumer product sales of RMB84.5
million (US$11.6 million). In additions, we completed an acquisition in February 2024. The acquisition contributed RMB9.9 million (US$1.4
million) offline consumer product sales for the year ended December 31, 2024.

Cost of Revenues

Cost of revenues increased
by 27.1% to RMB195.7 million (US$26.8 million) in 2024 from RMB154.0 million in 2023, which was in line with the increase in our
total revenues.

Product Costs

The product cost increased
by 27.3% from RMB152.7 million for the year ended December 31, 2023 to RMB194.5 million (US$26.6 million) for the year ended December
31, 2024. The increase was mainly due to: (i) we have obtained control over Yai’s Thai on February 1, 2024, a Thai American food
brand selling curry and sauce products based in USA; and (ii) the increase in offline consumer product sales.

Personnel Costs

Our personnel costs remained
stable with RMB0.9 million (US$0.1million) for the year ended December 31, 2023 and 2024.

Le