Company: DDC
Filing Date: 2025-10-24
Form Type: F-1
Source: 0001213900-25-102214
Chunk: 270

Company: DDC Enterprise Ltd
Filing Date: 2025-10-24
Form: F-1
Chunk 270
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 or the related assets, transferring, disposing, or set any form of guarantee on the online stores and related proceeds.

F-20

DDC ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND ORGANISATION (cont.) Termination of the VIE agreements with Mengwei Stores On August 19, 2023, the Company entered into a sale and purchase agreement with Mr. Liao Xuefeng and three companies controlled by him, to transfer the Mengwei Stores for RMB1. The Mengwei VIE agreements will terminate accordingly. At the same time, the Company terminated the purchase agreement signed on April 30, 2023, with Mr. Liao Xuefeng and four companies controlled by him for the four online stores on Pinduoduo platform (“collectively referred to as PDD Stores”). Upon the termination, the Company recognized a gain from termination of the Mengwei Stores VIE arrangement of RMB134,665, which is measured as at the difference between (i) the consideration of RMB1 receivable, (ii) the carrying amount of Mengwei’s net liabilities of RMB1,770,095, including goodwill of RMB1,635,431. The Company’s management believes that the termination of the Mengwei Stores 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 operations. The following presents the balance sheet information of Mengwei Stores as of December 31, 2022 and August 19, 2023, and the operations and cash flows of Mengwei for the period from January 1, 2023 to August 19, 2023 as compared to the year ended December 31, 2021 and 2022.

|                                                |     | December 31, 
         2022 |     | August 19, 
       2023 |
|:-----------------------------------------------|:----|-------------:|:----|-----------:|
|                                                |     |          RMB |     |        RMB |
| Cash and cash equivalents                      |     |      352,291 |     |     52,917 |
| Accounts receivable, net                       |     |       79,656 |     |     22,199 |
| Inventories                                    |     |       83,516 |     |      8,980 |
| Prepayments and other