Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 214

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 214
---
’s subsidiaries or the VIEs may not be able to comply;  
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────

  requiring the Company to restructure the ownership structure or operations, including terminating the contractual arrangements with the VIEs;  

  restricting or prohibiting the Company’s use of the proceeds of overseas offering to finance the business and operations in these jurisdictions; or  

  taking other regulatory or enforcement actions that could be harmful to the business.  

In accordance with VIE Agreements, the Company
has the power to direct the activities of the VIEs. Therefore, the Company considers that there are no assets in the VIEs that can be
used only to settle obligations of the VIEs. The creditors of VIEs do not have recourse to the general credit of the Company and its subsidiaries.
To the extent VIEs require financial support, the Company may, at its option and to the extent permitted under the local law, provide
financial support to VIEs.

The VIEs also have assembled work force for sales,
marketing and operations which were not recorded on the Company’s consolidated balance sheets as they do not meet all the capitalization
criteria.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The accompanying consolidated financial statements
of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“ U. S. GAAP”)
assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern
exists.

(b) Going concern

For the year ended December 31, 2023, the Company
incurred a loss from operations of RMB146.2million, and net cash used in operating activities of RMB89.4million. As of December 31,
2023, the Company had an accumulated deficit of RMB1.6billion, and cash and cash equivalents and restricted cash of RMB79.3million.
The Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain
the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing,
issuing debt or entering into other financing arrangements, obtaining agreements with the existing investors to extend the due dates for