Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 211

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 211
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 OF BUSINESS AND ORGANISATION(cont.)

The VIE arrangements with Mengwei Stores

The Company acquired a business engaging in the
online sales of self-heated hotpots through a number of online stores (“ Mengwei Stores”) in January 2021 (note 16).

The Company operates these online stores on E-commerce
platform in the PRC through Chongqing Meng Wei Technology Co., Ltd., Chongqing Yizhichan Leisure Food E-commerce Service Department and
Chongqing Wei Bang Internet Technology Co., Ltd. (“the Transferors”). The legal names of these stores are registered with
the E-commerce platforms under the Transferors as nominal holders. A series of contractual agreements including Purchase Agreement and
Store Operation Agreements (collectively, the “ Mengwei Stores VIE Agreements”), were entered among Shanghai DayDayCook, and
the Transferors.

Pursuant to these contractual agreements, the
Company is able to exercise effective control over, bear the risks of, and enjoy substantially all of the economic benefits of Mengwei
Stores and have the right to, including without limitation to, control such online stores with the assets within the stores. The Company’s
management concluded that Mengwei Stores is a VIE and Shanghai DayDayCook is its primary beneficiary. As such, the consolidated financial
statements of Mengwei Stores are included in the consolidated financial statements of the Company.

The Mengwei Stores VIE agreements between Shanghai
DayDayCook and the Transferors with the principal terms effective as of August 19, 2023 (date of termination of the VIE agreements) summarized
as follows:

1)
Purchase Agreement.

Pursuant to the Purchase Agreement entered into
among the “ Transferors”, Shanghai DayDayCook would have the right to, including without limitation to, control such online
stores and the target assets, receive substantially all of the economic benefits of and bear all the risks of the Mengwei Stores, freely
use certain trademarks of the Transferor, sell products of certain brands of the Transferors, and control all the receipt and payment
accounts, third-party payment platform accounts and bank accounts of the online stores.

2)
Store Operation Agreements.

Pursuant to the Store Operation Agreements entered
into between Shanghai DayDayCook and the Transferors, Shanghai DayDayCook would have the right to enjoy the ownership and the exclusive
right of operation and management of the stores. The Transferors would be delegated to operate the online stores until being required
to terminate by Shanghai