Ucommune(UK) - 2024 Q4 - Annual Report

Financial Position - As of December 31, 2024, the company had cash and cash equivalents of RMB90.4 million (US$12.4 million) and a working capital deficit of RMB2.0 million (US$0.3 million) [776] - The accumulated deficit as of December 31, 2024, was RMB4,610.1 million (US$631.6 million) [780] - The company has not yet achieved a business scale sufficient to generate stable net profit and positive cash flows from operating activities [782] Operating Performance - The company incurred operating losses of RMB326.7 million, RMB113.7 million, and RMB52.1 million (US$7.1 million) for the years 2022, 2023, and 2024, respectively [776] - In 2023, the company generated positive cash flows from operating activities of RMB14.5 million, while in 2024, it generated RMB7.5 million (US$1.0 million) [776] - Net cash provided by operating activities from continuing operations in 2024 was RMB7.5 million (US$1.0 million) [789] Cash Flow Activities - Net cash provided by investing activities from continuing operations in 2024 was RMB11.6 million (US$1.6 million) [792] - Net cash provided by financing activities from continuing operations in 2024 was RMB10.8 million (US$1.5 million) [795] - The company intends to finance future working capital requirements through cash generated from operations and funds raised from financing activities [784] Capital Expenditures - Capital expenditures for 2022, 2023, and 2024 were RMB13.0 million, RMB13.5 million, and RMB4.9 million (US$0.7 million) respectively [798] - The company intends to fund future capital expenditures with existing cash balance and proceeds from securities offerings [798] Loans and Financing - Ucommune HK has provided a total of US$41.7 million in loans to Ucommune Venture, with US$8.3 million repaid as of the date of the annual report [801] - The Parent's ability to pay dividends depends on dividends paid by its subsidiaries, which may be restricted by debt instruments [799] - The Parent is permitted to provide funding to WFOEs only through loans or capital contributions, subject to government approval [801] Impairment Losses - Impairment losses recorded on right-of-use assets were RMB13,005, RMB2,510, and RMB950 for the years ended December 31, 2022, 2023, and 2024 respectively [810] - Impairment losses on property and equipment were RMB875, RMB774, and RMB17 for the same periods [810] Dividend Distribution - As of the date of the annual report, none of the subsidiaries had distributed any dividends to the Parent [803] - The appropriation to the statutory surplus fund must be at least 10% of after-tax profits calculated in accordance with PRC GAAP [800] Operational Strategy - The company plans to transition to an asset-light model to improve profitability and reduce upfront capital investments [777] - The company has established stringent controls for cash flows, requiring internal approval for cash transfers among entities [802]