Ucommune(UK) - 2025 Q4 - Annual Report

Financial Position - As of December 31, 2025, the company had cash and cash equivalents of RMB36.1 million (US$5.2 million) compared to RMB25.1 million in 2024[791]. - The accumulated deficit as of December 31, 2025, was RMB4,639.3 million (US$663.4 million)[792]. - The company has no unused credit line as of December 31, 2025, raising concerns about its ability to continue as a going concern[792]. Operating Performance - The company incurred operating losses of RMB40.6 million (US$5.8 million) in 2025, following losses of RMB46.3 million in 2024 and RMB114.3 million in 2023[792]. - Net cash used in operating activities from continuing operations was RMB3.7 million (US$0.5 million) in 2025, compared to RMB21.5 million in 2024 and RMB6.2 million in 2023[801]. Cash Flow Activities - The company generated net cash provided by investing activities of RMB5.9 million (US$0.8 million) in 2025, down from RMB12.2 million in 2024 and RMB9.1 million in 2023[805]. - Net cash provided by financing activities was RMB16.9 million (US$2.4 million) in 2025, primarily from issuing redeemable convertible preferred shares[808]. Capital Expenditures - Capital expenditures were RMB7.2 million (US$1.0 million) in 2025, following RMB4.3 million in 2024 and RMB13.5 million in 2023[811]. Strategic Plans - The company plans to transition to an asset-light model to improve profitability and reduce upfront capital investments[793]. Financing and Debt - Future financing may be required due to changing business conditions, and there is uncertainty regarding the availability of financing on acceptable terms[798]. - Ucommune HK has provided a total of $41.7 million in loans to Ucommune Venture as of December 31, 2024, with $8.3 million repaid[814]. - Ucommune Venture can draw down loans of up to $60 million from Ucommune HK within three years from the first draw-down date[814]. - As of December 31, 2024, Ucommune HK has completed the transfer of $33.3 million debt owed by Ucommune Venture to Youshenghengtong Technology[814]. Internal Controls and Regulations - Cash transfers within the organization are subject to stringent internal controls, requiring multiple approval steps[815]. - The company has established internal cash management policies to minimize risks associated with cash transfers[815]. - The company is subject to PRC foreign exchange regulations, requiring approval for converting Renminbi to foreign currency for capital expenses[815]. Profit Distribution - Since January 1, 2018, no dividends or distributions have been made between the Parent and its subsidiaries or to investors[816]. - The appropriation to the statutory surplus fund must be at least 10% of after-tax profits calculated under PRC GAAP, unless the fund has reached 50% of registered capital[813]. - The appropriation to the general reserve fund must also be at least 10% of after-tax profits calculated under PRC GAAP[813]. Impairment Losses - The company recorded impairment losses of RMB2.5 million, RMB1.0 million, and RMB2.8 million on ROU assets for the years ended December 31, 2023, 2024, and 2025, respectively[822].