Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 269

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 269
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achievements of the performance target. As the Selling Shareholders are continuously providing services to the Company under the Company’s
instructions to operate the online stores and such contingent payments are linked to the achievement of performance target at the end
of each service period, these share options will be accounted for as share-based compensation.

F-68

16. BUSINESS COMBINATION(cont.)

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                                        3,000,000  
  Consideration - Contingent cash payable *                           3,331,019  
  Total considerations                                                6,331,019  
  Less: Identifiable net assets acquired as of January 12, 2021                  
  Cash and cash equivalents acquired in the business combination        349,323  
  Accounts receivable, net                                            2,648,789  
  Prepayments and other current assets                                   90,755  
  Intangible asset - franchise agreement                              2,200,000  
  Accrued expenses and other current liabilities                       ( 43,279  
  Deferred tax liabilities                                            ( 550,000  
  Total identifiable assets acquired and liabilities assumed          4,695,588  
  Goodwill                                                            1,635,431  

Goodwill recognized on the acquisition is attributable
mainly to the skills and technical talent of the target Company’s work force. None of the goodwill is expected to be deductible
for income tax purpose.

  In December 2022, the Company and the sellers confirmed separately                                                                               
  in writing that the performance target for the third performance period from October 2021 to December 2021 and the performance target            
  for the fourth performance period from January 2022 to March 2022 were partially achieved and the cash payment for the third performance         
  period and fourth performance period from October 2021 to March 2022 was RMB 0.6 million and subsequently paid in January 2023. The difference   
  between the actual payment and fair value of the contingent consideration payable of RMB 0.1 million was included in general and administrative  
  expenses for the year ended December 31, 2022.                                                                                                   
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