Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 308

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 308
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 shareholders based on the number of shares held
by such shareholders on a fully diluted basis.

Initial measurement and subsequent accounting
for the series seed convertible preferred shares

The series seed convertible preferred shares are
classified as permanent equity in the consolidated balance sheets as they are not redeemable. The series seed convertible preferred shares
are recognized at their fair value at the date of issuance or redesignation from ordinary shares, net of nilissuance costs. No subsequent
adjustment of the carrying amount was required.

F-95

21. SHARE-BASED COMPENSATION

Share Incentive Plan

The Company’s shareholders and Board of
Directors approved of employee option plans from 2014 to 2023 in order to provide incentives and rewards to the Company’s employees,
directors, consultants and senior management (the “ Option Plans”). As of December 31, 2023, the Company authorized3,200,000share options under the Option Plan. Share options awarded under the Option Plan are typically vested based on the service conditions
up to four years agreed with each of the participants in their grant letters, with exercise prices ranging from nominal consideration
to US$9.06. In addition, the share options can only be exercised and converted into shares upon the completion of Company’s qualified
IPO and exercise event which is a public offering or other form of listing (“ Exercise Event”), whichever is earlier, except
for the modifications made in 2023 for two senior management members and14,586share options granted to one senior management member
in 2023. Each share option has a contractual life of10years.

In connection with the acquisition of the51% equity interest of Lishang in May 2022, the Company may be required to grant share options to Ms. Chen Di and two other her
nominee shareholders (“the Lishang Seller”) at the end of each performance period, adjusted based on the achievement of
Lishang’s revenue, gross profit and net profit for each of the four performance periods during May 1, 2022 to December 31,
2024, over the target performance. If the IPO does not occur by January 1, 2024, the Company is obliged to pay RMB3.5million cash
corresponding to30,984share options out of the total base number of43,936share options to be issued for the third performance
period. If the IPO does not occur by January 1, 2025, the Company is