Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 262

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 262
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 assumed                     ( 433,570  
  Goodwill                                                                      26,368,880  

F-68

16. BUSINESS
COMBINATION(cont.)

Shanghai Yuli Development Limited (“ Yuli”)

On April 1, 2023, Shanghai DayDayCook entered
into a purchase agreement with Ms. Chen Di and two other shareholders (“the Yuli Seller”) to acquire51% equity interest of
Shanghai Yuli Development Limited (“ Yuli”). Yuli is principally engaged in sales of RTC and RTE gift product vouchers.

Acquisition of Yuli shall diversify the Company’s
existing business portfolio and broaden the source of income of the Company.

The transaction was accounted for under the acquisition
method of accounting in accordance with ASC 805, Business Combinations. The acquisition was completed when the Company obtained control
over Yuli on July 1, 2023.

The total consideration payable by the Company
is a fixed cash 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