Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 331

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 331
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 an Italian producer
of specialized Asian ready-meals, for approximately USD$9.3M cash to be paid out over three years plus additional potential consideration
of cash and stock depending on the performance of GLI. The transaction did not close and in September 2024 DDC received notice that the
shareholders of GLI filed for an arbitration alleging that DDC failed to fulfill its obligations under the SPA by not satisfying the closing
conditions and claiming damages of EU$4.7million. DDC responded by denying any breach of the SPA and by asserting that GLI breached the
SPA by failing to provide documents and failing to satisfy the closing conditions. DDC believes that the GLI shareholders’ claims
are without merit and plans to vigorously defend itself and assert counterclaims; however, failure to obtain a favorable resolution could
have a material adverse effect on DDC’s business, results of operations and financial condition. Currently, the amount of such material
adverse effect cannot be reasonably estimated, and no provision or liability has been recorded for these claims as of December 31, 2023.

Nona Lim, the former Chief Executive Officer of
Cook San Francisco LLC (“ Cook”), an indirect subsidiary of the Company, has alleged that she had Good Reason (as defined in
her employment agreement) to resign from Cook and is thus owed severance by the Company and Cook. Ms. Lim, in her capacity
as Sellers’ Representative in the Membership Interests Purchase Agreement (the “ MIPA”) between the Company and Cook
members pursuant to which the Company purchased the interests in Cook, has also alleged that the Company breached the MIPA relating to
post-closing payments. On November 26, 2024, Ms. Lim filed a complaint with the Superior Court State of California, County of San Francisco,
against the Company, Cook and our CEO, Norma Chu, as an individual, asserting breach of contract and breach of various labor laws. The
Company disputes the merits of Ms. Lim’s claims but has been negotiating a settlement with her to resolve all outstanding disputes.
Failure to obtain a favorable resolution could have a material adverse effect on the Company’s business, results of operations and
financial condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability
has been recorded for these claims as of December 31, 2023.

F-117