Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 257

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 257
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On April 30, 2023, SH DDC entered into a purchase
agreement with four entities controlled by Mr. Liao Xuefeng, (together as “the MW Sellers”) to acquire100% interest in four
online stores on Pinduoduo platform (“collectively referred to as PDD Stores”), for cash of approximately RMB402,755, subject
to adjustments during the subsequent performance periods. PDD Stores are principally engaged in online sales of self-heated hotpots. This
acquisition enables the Company to expand its custom traffic through a wide range of online channels and broadens the source of income
of the Company.

F-64

16. BUSINESS COMBINATION(cont.)

Lin’s

On February 1, 2022, the Company entered into
a Share Subscription Agreement (“the SSA”) with Mr. Lin Kai Hang, and other two natural persons, (collectively referred to
as “the Founder”) to subscribe209ordinary shares, representing51% of the entire issued share capital of Lin’s Group
Limited (“ Lin’s”), immediately upon completion of such issuance and allotment on February 1, 2022. Lin’s is principally
engaged in sales of ready-to-cook seasoning packages to online and offline customers.

The subscription consideration includes cash consideration
of US$138,000and11,938Series C-1 redeemable convertible preferred shares to be issued by the Company. As of December 31, 2022, the
Company has not issued any preferred shares to the Founder.

The Company made estimates and judgments in determining
the fair value of consideration transferred, acquired assets and liabilities assumed, based on management’s experiences with similar
assets and liabilities with the assistance of an independent valuation firm. The allocation of the purchase price is as follows:

  Considerations:                                                                
  Consideration - Cash payable                                          880,291  
  Consideration - Fair value of preferred shares to be issued *       1,398,431  
  Total considerations                                                2,278,722  
  Less: Identifiable net assets acquired as of February 1, 2022                  
  Cash and cash equivalents acquired in the business combination        151,470  
  Accounts receivable, net                                              311,041  
  Prepayments and other current assets                                   16,812