Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 132

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 132
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 for the company’s Hong Kong operations. This acquisition allows the
company to optimize cost structure for the RTC meal kits in the Hong Kong market. It also enables the company to expand its product offerings
with its own production facility.

On May 1, 2022, the Company,
through its wholly owned subsidiary, entered into a purchase agreement with Mr. Gao Xiaomin, Mr. Zhang Yi and Ms Chen Di, to acquire 51%
shares of Shanghai Lishang Trading Ltd, (“ Lishang”). Lishang is principally engaged in distribution of private label products.
This acquisition was completed during the nation-wide lock down when the company expedited its strategy to diversify revenue streams and
improve overall margin structure. Lishang has strong sales channel access into the corporate gifting channel which carries higher margin
compared to the company’s existing e-commerce and offline distribution channels. By acquiring Lishang, the company now has healthier
gross margins as well as access to sales and distribution partnerships with global FMCG brands such as Pepsi Co (Lays brand.) These partnerships
in turn can help the company secure better traffic and overall sales conversion on social commerce platforms to drive higher sales for
its own branded product business.

On June 17, 2022, SH DDC and
Mr. Zheng Dongfang set up QZ DDC to transfer the YJW Target Assets and Keke Target Assets. On the same day, SH DDC has obtained control
over the Target Assets, and the results were consolidated into the Group. Whereas before the completion of the transferring of the target
assets, SH DDC would have the right to receive 60% of the net profits generated by the target business and participate in the management.

On April 1, 2023, SH DDC and
the Company entered into a purchase agreement with Mr. Zhang Yi, Ms. Shen Zhouzhou and Ms. Chen Di, to acquire 51% equity interest of
Shanghai Yuli Development Limited (“ Yuli”) for cash of RMB4.1 million. In addition, the Company will issue share options of
DDC equivalent to a value of approximately RMB24.5 million. The number of share options is subject to adjustments, based on certain performance
targets to be achieved during the performance period. Yuli is principally engaged in sales of RTC and RTE product giftboxes. The acquisition
of Yuli is expected to give the Company access to a wide range of new offline enterprise customers. The acquisition