Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 263

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 263
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, 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-69

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                        
 ───────────────────────────────────────────────────────────────────────────────────
  Cash and cash equivalents acquired in the business combination        1,120,094  
  Accounts receivable                                                     635,396  
  Prepayments and other current assets                                  3,197,779  
  Intangible asset – Customer relationship                              2,400,000  
  Short-term borrowings                                               ( 4,273,000  
  Contract liabilities                                                ( 2,640,046  
  Accrued expenses and other current liabilities                        ( 161,263  
  Deferred tax liabilities                                              ( 572,955  
  Total identifiable assets acquired and liabilities assumed            ( 293,995  
  Add: Fair value of equity held by non-controlling interest*           1,309,393  
  Goodwill                                                              3,496,218  

  The fair value of the non-controlling interest in Yuli was measured based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumption i...  

F-70

16. BUSINESS COMBINATION(cont.)

Yai’s Thai, LLC (“ Yai’s Thai”)

On December 26, 2023, the Company entered into
a purchase agreement with shareholders of Yai’s Thai, Inc. to acquire its100% interest of shares. Yai’s Thai operates the
brand “ Yai’s Thai”, a Thai American food brand selling curry and sauce products based in USA. This acquisition enables
the Company to expand its customer base into the US market.

The transaction was accounted for under the acquisition
method of accounting in accordance with ASC 805, Business Combinations. The acquisition was