Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 129

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 129
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,836      2,113,246  
  Total                                                      61,826,966      53,546,210      3,207,806      2,069,064      3,003,886  

The amount represents contractual
lease obligations entered into by the Group which will be due within the next 5 years and long-term bank borrowings entered by the
group due within the next 5 years.

Internal Control Over Financial Reporting

Prior to our IPO in November 2023, we had been a private company with
limited accounting personnel and other resources with which we address our internal control over financial reporting. We and our independent
registered public accounting firm identified one material weakness in our internal control over financial reporting as of December 31,
2024. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or
interim financial statements will not be prevented or detected on a timely basis.

The material weakness that
has been identified relates to our lack of sufficient financial reporting and accounting personnel with appropriate understanding of accounting
principles generally accepted in the United States of America (“ U. S. GAAP”) and financial reporting requirements set forth
by the Securities and Exchange Commission (“ SEC”) to formalize, design, implement and operate key controls over financial
reporting process to address complex U. S. GAAP accounting issues and related disclosures, in accordance with U. S. GAAP and SEC financial
reporting requirements. We are in the process of implementing a number of measures to address the material weakness identified, including:
(1) hiring additional accounting and financial reporting personnel with U. S. GAAP and SEC financial reporting experience, (2) expanding
the capabilities of existing accounting and financial reporting personnel through continuous training and education in the accounting
and financial reporting requirements under U. S. GAAP, and SEC rules and regulations, (3) establishing clear roles and responsibilities
to develop and implement formal comprehensive financial period-end closing policies and procedures to ensure all transactions are properly
recorded and disclosed, and (4) establishing effective monitoring and oversight controls for non-recurring and complex transactions
to ensure the accuracy and completeness of our consolidated financial statements and related disclosures. We are in the process of sourcing
for additional personnel suitable for the role, but we do not expect a material cash requirement to arise from the