Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 275

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 275
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 consideration of RMB4.14million to be paid in four installments.

In addition, the Company may be required to grant
share options to the Yuli Seller at the end of each performance period, adjusted based on the achievement of Yuli’s revenue, gross
profit and net profit for each of the four performance periods during July 1, 2023 to December 31, 2026, over the target performance.
If the qualified IPO does not occur by March 31, 2026, the Company is obliged to deliver a fixed amount of RMB24.50million cash, with
all previously issued share options, if any, cancelled.

As the Company completed IPO on November 17, 2023,
RMB24.50million is not required to be paid by the Company. All share options will be settled in shares based on the actual performances
during the performance periods.

On December 1, 2023, the Company entered into
a supplemental agreement with the Yuli Seller to adjust the cash consideration to RMB2.15million due to the subsequent financial due
diligence results of the historical financial information of Yuli. The Company adjusted the provisional amount at the acquisition date
on July 1, 2023, because this adjustment results from new information about facts and circumstances that existed at the acquisition date
and falls within the measurement period.

In addition, the performance periods of the share
options to be granted to the Yuli Seller were shortened to two performance periods during July 1, 2023 to December 31, 2024. And the target
performances were also modified accordingly.

As of December 31, 2023, the Company has not issued
any share options to the Yuli Seller as the financial information of Yuli for the first performance periods up to December 31, 2023 was
still under preparation and was subject to audit.

F-74

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:

  Consideration - Cash payable                                          1,892,830  
  Less: Identifiable net assets acquired as of July 1, 2023                        
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  Cash and cash equivalents acquired in the business combination