Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 210

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 210
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ixiong and Ms. Wang Yike to transfer
the Farm Entities to Mr. Cui Yixiong and Ms. Wang Yike for RMB1. The share options previously issued to Mr. Cui Yixiong in connection
with the acquisition of Farm Entities were returned and cancelled. At the same time, the Company granted22,509new share options to Mr.
Cui Yixiong. Upon the termination, the Company recognized a gain from termination of the Farm Entities VIE arrangement of RMB13,116,960,
which is measured as the difference between(i) the consideration of RMB1 receivable, (ii) the incremental fair value of RMB1,424,721
of the share options exchanged on April 1, 2022, and (iii) the carrying amount of Farm Entities’ net liabilities of RMB15,658,584,
including goodwill of RMB1,116,904. The disposal of the Farm Entities discontinued the Company’s fresh products business. The Company’s
management believes that the termination of the Farm VIE Agreements does not represent a strategic shift that has a major effect on the
Company’s operations and financial results and is not accounted as discontinued operation.

F-22

1. DESCRIPTION OF BUSINESS AND ORGANISATION(cont.)

The following presents the balance sheet information
of Farm Entities as of March 31, 2022, and the operations and cash flows of Farm Entities for the three months ended March 31, 2022 as
compared to the year ended December 31, 2021.

                                                      March 31,                  
                                                      RMB                        
  Cash and cash equivalents                                             122,578  
  Accounts receivable, net                                              648,809  
  Inventories                                                         1,362,090  
  Prepayments and other current assets                                2,012,330  
  Total current assets                                                4,145,807  
  Long-term investment                                                2,460,000  
  Property, plant and equipment, net                                  3,290,220  
  Operating lease Right-of-use assets                                 4,706,678  
  Total non-current assets                                           10,456,898  
  Total assets                                                       14,602,705  
  Short-term bank borrowings                                          1,100,000  
  Accounts payable                                                    2,281,718  
  Contract liabilities                                                  724,727  
  Accrued expenses and other current liabilities                     15,