Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 151

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 8
Chunk 151
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 of the outstanding shares of GLI Industry S. p. A (“ GLI”), an Italian producer of specialized
Asian ready-meals, for approximately USD$9.3 million 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 we received notice that the shareholders
of GLI filed for an arbitration alleging that we failed to fulfill our obligations under the SPA by not satisfying the closing conditions
and claiming damages of EU$4.7 million. In 2025, we entered into a settlement agreement with GLI which requires that we pay GLI or its
designee US$100,000 and issue to them Class A Ordinary shares valued at US$100,000. US$200,000 has been accrued and recorded as liability
as of December 31, 2024.

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, 2024.

A former service provider
has made allegations against the Company regarding alleged undisclosed related party transactions, improper value-added-tax transactions,
inaccurate SEC filings and other matters. The Company and a third-party expert conducted comprehensive investigations of these allegations,
which included, for example, obtaining advice of legal counsel, review of relevant laws and rules