Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 303

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 303
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 into a
share purchase agreement (the “ SPA”) to acquire51% of the outstanding shares of GLI Industry S. p. A (“ GLI”), an
Italian producer of specialized Asian ready-meals, for approximately USD$9.3million cash to be paid out over three years plus additional
potential consideration of cash and stock depending on the performance of GLI. The transaction did not close and in September 2024 and
the Company received notice that the shareholders of GLI filed for an arbitration alleging that the Company failed to fulfill its obligations
under the SPA by not satisfying the closing conditions and claiming damages of EU$4.7million. In 2025, the Company entered into a settlement
agreement with GLI which requires that it pays GLI or its designee US$100,000and issue to them Class A Ordinary shares valued at US$100,000.
US$200,000has been accrued and recorded as liability as of December 31, 2024.

Nona Lim, the former Chief Executive Officer of
Cook San Francisco LLC (“ Cook”), an indirect subsidiary of the Company, has alleged that she had Good Reason (as defined in
her employment agreement) to resign from Cook and is thus owed severance by the Company and Cook. Ms. Lim, in her capacity
as Sellers’ Representative in the Membership Interests Purchase Agreement (the “ MIPA”) between the Company and Cook
members pursuant to which the Company purchased the interests in Cook, has also alleged that the Company breached the MIPA relating to
post-closing payments. On November 26, 2024, Ms. Lim filed a complaint with the Superior Court State of California, County of San Francisco,
against the Company, Cook and our CEO, Norma Chu, as an individual, asserting breach of contract and breach of various labor laws. The
Company disputes the merits of Ms. Lim’s claims but has been negotiating a settlement with her to resolve all outstanding disputes.
Failure to obtain a favorable resolution could have a material adverse effect on the Company’s business, results of operations and
financial condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability
has been recorded for these claims as of December 31, 2024.

On April 1, 2025, Plaintiff Leland Copenhagen
(“ Copenhagen”) filed a civil action before the United States District Court for the Southern District of New York alleging
a single claim for breach of contract against D