Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 207

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 207
---
DayCook is its primary beneficiary. As such, the consolidated financial
statements of Mengwei Stores are included in the consolidated financial statements of the Company.

The Mengwei Stores VIE agreements between Shanghai
DayDayCook and the Transferors with the principal terms effective as of August 19, 2023 (date of termination of the VIE agreements) summarized
as follows:

1) Purchase Agreement.

Pursuant to the Purchase Agreement entered into
among the “ Transferors”, Shanghai DayDayCook would have the right to, including without limitation to, control such online
stores and the target assets, receive substantially all of the economic benefits of and bear all the risks of the Mengwei Stores, freely
use certain trademarks of the Transferor, sell products of certain brands of the Transferors, and control all the receipt and payment
accounts, third-party payment platform accounts and bank accounts of the online stores.

2) Store Operation Agreements.

Pursuant to the Store Operation Agreements entered
into between Shanghai DayDayCook and the Transferors, Shanghai DayDayCook would have the right to enjoy the ownership and the exclusive
right of operation and management of the stores. The Transferors would be delegated to operate the online stores until being required
to terminate by Shanghai DayDayCook. Without prior written consent from Shanghai DayDayCook, the Transferors are prevented from changing
any information of the online stores, sub-entrusting the operation right or the related assets, transferring, disposing, or set any form
of guarantee on the online stores and related proceeds.

F-24

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