# EDGAR Filing Document

**Accession Number:** 0001821424
**File Stem:** 0001213900-26-033208
**Filing Date:** 2026-3
**Character Count:** 992938
**Document Hash:** 6734f9d00f367998f944d4551a564ea3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-033208.hdr.sgml**: 20260324

**ACCESSION NUMBER**: 0001213900-26-033208

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 151

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260324

**DATE AS OF CHANGE**: 20260324

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Ucommune International Ltd
- **CENTRAL INDEX KEY:** 0001821424
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39738
- **FILM NUMBER:** 26784126

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** FLOOR 8, TOWER D
- **STREET 2:** NO.2 GUANG HUA ROAD, CHAOYANG DISTRICT
- **CITY:** BEIJING
- **PROVINCE COUNTRY:** F4
- **ZIP:** 100026
- **BUSINESS PHONE:** 86 (10) 6506-7789

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** FLOOR 8, TOWER D
- **STREET 2:** NO.2 GUANG HUA ROAD, CHAOYANG DISTRICT
- **CITY:** BEIJING
- **PROVINCE COUNTRY:** F4
- **ZIP:** 100026

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 20-F**

(Mark One)

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of event requiring this shell company report ________**

**Commission File Number: 001-39738**

**UCOMMUNE INTERNATIONAL LTD**

(Exact name of Registrant as specified in its charter)

---

| | |
|:---|:---|
| **Not applicable** | **Cayman Islands** |
| (Translation of Registrant's name into English) | (Jurisdiction of incorporation or organization) |

---

**No. 2 Dongsihuan North Road, Building 1, 4th Floor Chaoyang District, Beijing 100016 People's Republic of China** (Address of Principal Executive Offices)

**Mr. Zirui Wang, Chief Executive Officer No. 2 Dongsihuan North Road, Building 1, 4th Floor Chaoyang District, Beijing 100016 People's Republic of China Tel: +8610 65067789 Email: weisf@ucommune.com** (Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange <br> on which registered** |
| Class A ordinary shares, US$0.024 par value per share | UK | The Nasdaq Stock Market LLC |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

**4,555,930 ordinary shares, including 4,436,543 Class A ordinary shares and 119,387 Class B ordinary shares, and 2,750 Series A Preferred Shares, issued and outstanding as of December 31, 2025.** 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ <br> Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

&nbsp;&nbsp;&nbsp;&nbsp;† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [INTRODUCTION](#a_001) | ii |
| [FORWARD-LOOKING INFORMATION](#a_002) | v |
| [PART I](#a_003) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#a_004) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](#a_005) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 3. KEY INFORMATION](#a_006) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 4. INFORMATION ON THE COMPANY](#c_029) | 67 |
| &nbsp;&nbsp;&nbsp;[ITEM 4A. UNRESOLVED STAFF COMMENTS](#a_007) | 104 |
| &nbsp;&nbsp;&nbsp;[ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#a_008) | 104 |
| &nbsp;&nbsp;&nbsp;[ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#a_009) | 124 |
| &nbsp;&nbsp;&nbsp;[ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#a_010) | 133 |
| &nbsp;&nbsp;&nbsp;[ITEM 8. FINANCIAL INFORMATION](#a_011) | 134 |
| &nbsp;&nbsp;&nbsp;[ITEM 9. THE OFFER AND LISTING](#a_012) | 135 |
| &nbsp;&nbsp;&nbsp;[ITEM 10. ADDITIONAL INFORMATION](#a_013) | 135 |
| &nbsp;&nbsp;&nbsp;[ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_014) | 152 |
| &nbsp;&nbsp;&nbsp;[ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#a_015) | 152 |
| [PART II](#a_016) | 153 |
| &nbsp;&nbsp;&nbsp;[ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#a_017) | 153 |
| &nbsp;&nbsp;&nbsp;[ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#a_018) | 153 |
| &nbsp;&nbsp;&nbsp;[ITEM 15. CONTROLS AND PROCEDURES](#a_019) | 154 |
| &nbsp;&nbsp;&nbsp;[ITEM 16. \[RESERVED\]](#a_020) | 156 |
| &nbsp;&nbsp;&nbsp;[ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT](#a_021) | 156 |
| &nbsp;&nbsp;&nbsp;[ITEM 16B. CODE OF ETHICS](#a_022) | 156 |
| &nbsp;&nbsp;&nbsp;[ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES](#a_023) | 157 |
| &nbsp;&nbsp;&nbsp;[ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#a_024) | 157 |
| &nbsp;&nbsp;&nbsp;[ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#a_025) | 157 |
| &nbsp;&nbsp;&nbsp;[ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#a_026) | 157 |
| &nbsp;&nbsp;&nbsp;[ITEM 16G. CORPORATE GOVERNANCE](#a_027) | 158 |
| &nbsp;&nbsp;&nbsp;[ITEM 16H. MINE SAFETY DISCLOSURE](#a_028) | 158 |
| &nbsp;&nbsp;&nbsp;[ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#a_029) | 158 |
| &nbsp;&nbsp;&nbsp;[ITEM 16J. INSIDER TRADING POLICIES](#a_030) | 158 |
| &nbsp;&nbsp;&nbsp;[ITEM 16K. CYBERSECURITY](#a_031) | 158 |
| [PART III](#a_032) | 160 |
| &nbsp;&nbsp;&nbsp;[ITEM 17. FINANCIAL STATEMENTS](#a_033) | 160 |
| &nbsp;&nbsp;&nbsp;[ITEM 18. FINANCIAL STATEMENTS](#a_034) | 160 |
| &nbsp;&nbsp;&nbsp;[ITEM 19. EXHIBITS](#a_035) | 160 |

---

i

**Introduction**

Except where the context otherwise requires and for purposes of this annual report only:

● "AI" refers to artificial intelligence;

● "app" refers to mobile app;

● "Beijing Melo" refers to Beijing Melo Technology Co., Ltd.;

● "Beijing U Bazaar" refers to Beijing Ubazaar Technology Co., Ltd.;

● "Business Combination" refers to (1) reincorporation of Orisun Acquisition Corp in the Cayman Islands by merging with and into our company; and (2) merger of Everstone International Ltd, a Cayman Islands exempted company and wholly owned subsidiary of our company, with and into Ucommune Group Holdings Limited ("Ucommune Group Holdings"), resulting in Ucommune Group Holdings being a wholly owned subsidiary of our company;

● "CAGR" refers to compound annual growth rate;

● "China" or "PRC" refers to the People's Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and the Macau Special Administrative Region;

● "Class A ordinary shares" or "our Class A ordinary shares" refers to the Class A ordinary shares, par value US$0.024 per share, of the Parent, carrying one vote per share;

● "Class B ordinary shares" or "our Class B ordinary shares" refers to the Class B ordinary shares, par value US$0.024 per share, of the Parent, carrying 170 votes per share;

● "Generation Z" refers to the demographic cohort in China of individuals born from 1990 to 2009;

● "GMV" refers to gross merchandize value;

● "Greater China" refers to, for the purpose of this annual report only, China as well as Hong Kong, Macau Special Administrative Region and Taiwan;

● "Hong Kong" or "HK" refers to the Hong Kong Special Administrative Region of the PRC;

● "individual members using workstations" refers to the individuals that use our workstations under a membership agreement as of a given date, excluding the individuals that have access to a workstation on as-needed basis;

● "IoT" refers to internet of things;

● "IT" refers to information technology;

● "mature spaces" refers to spaces that have been open for more than 24 months;

ii

● "members" refers to the individuals and enterprises that have registered on U Bazaar as of a given date;

● "new tier-1 cities" refers to the relatively developed cities following the tier-1 cities: Chengdu, Hangzhou, Nanjing, Qingdao, Kunming, Shenyang, Tianjin, Wuhan, Xi'an, Changsha, Chongqing, Suzhou, Ningbo, Zhengzhou and Dongguan;

● "ordinary shares" refers to our Class A and Class B ordinary shares of par value US$0.024 per share;

● "Parent" refers to Ucommune International Ltd, our ultimate Cayman Islands holding company and a Nasdaq-listed company;

● "PIPE" refers to the investment of US$60.9 million in by certain backstop investors in connection with our company's Business Combination.

● "RMB" or "Renminbi" refers to the legal currency of the PRC;

● "SAFE" refers to the State Administration for Foreign Exchange;

● "Series A Preferred Shares" refers to the Series A Convertible Preferred Shares, par value US$0.024 each, of the Parent, with no voting rights, except as required by law and as expressly provided in the Parent's Certificate of Designations;

● "Shengguang Zhongshuo" refers to Zhuhai Shengguang Zhongshuo Digital Marketing Co., Ltd.;

● "SME" refers to small and medium enterprises;

● "space(s) operated by our associate(s)" refers to the co-working space(s) in which we have a minority interest investment but are operated by our associate(s); and we account for our investment under the equity method but do not consolidate the revenue of such spaces into our consolidated financial statements;

● "tier-1 cities" refers to the most developed cities in the PRC: Beijing, Shanghai, Wuhan and Shenzhen;

● "U Bazaar" refers to the mobile app developed by Beijing U Bazaar Technology Co., Ltd.;

● "Youshenghengtong Technology" refers to Youshenghengtong (Beijing) Technology Co., Ltd., formerly known as Ucommune (Beijing) Technology Co., Ltd.;

● "Ucommune Venture" refers to Ucommune (Beijing) Venture Investment Co., Ltd.;

● "US$," "dollars" or "U.S. dollars" refers to the legal currency of the United States;

● "variable interest entities" or "VIEs" refers to Beijing U Bazaar (including its consolidated subsidiaries in China, if any), which is a PRC company in which the Parent does not have equity interests but whose financial results have been consolidated into the consolidated financial statements in accordance with United States generally accepted accounting principles, or U.S. GAAP, due to the Parent being the primary beneficiary of, such entities. In the context of our historical operations and consolidated financial statements as of and for the year ended December 31, 2022, "variable interest entities" or "VIEs" also includes Weixue Tianxia, the contractual arrangements with respect to which were terminated in December 2023, and Ucommune Venture, the contractual arrangements with respect to which were terminated in October 2024; similarly, in the context of our historical operations and consolidated financial statements as of and for the year ended December 31, 2023, "variable interest entities" or "VIEs" also includes Ucommune Venture;

iii

● "we," "us," "our company," "our" or "Ucommune" refers to (1) Ucommune International Ltd, a Cayman Islands exempted company and its subsidiaries, and (2) in the context of describing our operations and consolidated financial statements, the consolidated VIEs. The consolidated VIEs are PRC companies conducting operations in China, and their financial results have been consolidated into our consolidated financial statements under U.S. GAAP for accounting purposes. Ucommune International Ltd is a holding company with no material operations of its own. We do not have any equity ownership in the consolidated VIEs;

● "Weixue Tianxia" refers to Beijing Weixue Tianxia Education Technology Co., Ltd;

● "Litong Huida" refers to Beijing Litong Huida Information Technology Co., Ltd.;

● "wholly foreign-owned enterprises" or "WFOEs" refers to Youshenghengtong Technology, Beijing Melo, and Litong Huida;

● "2019 plan" refers to a share incentive plan of the Parent adopted on August 22, 2019; and

● "2020 plan" refers to a share incentive plan of the Parent adopted on November 17, 2020, as amended, to assume and replace the 2019 plan.

Unless otherwise noted, all statistics with respect to our co-working spaces, cities covered by our co-working space network, managed area of co-working spaces, workstations, occupancy rates and members exclude the spaces operated by our associates.

Certain amounts, percentages and other figures, such as key operating data, presented in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars or percentages may not represent the arithmetic summation or calculation of the figures that accompany them.

Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report are made at RMB6.9931 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2025. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all.

iv

**FORWARD-LOOKING INFORMATION**

This annual report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "likely to" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are not limited to, statements about:

● our goals and growth strategies;

● our future business development, results of operations and financial condition;

● relevant government policies and regulations relating to our business and industry;

● our expectation regarding the use of proceeds from securities offerings;

● general economic and business conditions in China; and

● assumptions underlying or related to any of the foregoing.

You should read thoroughly this annual report and the documents that we refer to in this annual report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this annual report include additional factors which could adversely impact our business and financial performance.

We operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This annual report also contains statistical data and estimates that we obtained from industry publications and reports generated by third-party providers of market intelligence. These industry publications and reports generally indicate that the information contained therein was obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information.

v

**part I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not Applicable.

**ITEM 3. KEY INFORMATION**

**Implications of Being a Company with the Holding Company Structure and the VIE Structures**

 ****

***The VIE Structures and Associated Risks***

Ucommune International Ltd, the Parent, is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in the VIEs and no material operations of its own. The Parent carries out its business in China through the WFOEs and their respective contractual arrangements, commonly known as the VIE structures, with the VIEs based in China and their respective shareholders, due to the PRC regulatory restrictions on direct foreign investment in value-added telecommunications services ("VATSs") and certain other businesses. Investors in our securities are purchasing the equity securities of Ucommune International Ltd, the Cayman Islands holding company, rather than the equity securities of the VIEs in which our operations are conducted.

The VIE structures are established through a series of agreements, including those by and among Youshenghengtong Technology, Beijing U Bazaar and the shareholder of Beijing U Bazaar. The series of agreements generally comprises executive business cooperation agreement, equity pledge agreement, exclusive option agreement and shareholders' voting rights proxy agreement. The contractual arrangements allow us to (1) be considered as the primary beneficiary of the VIEs for accounting purposes and consolidate the financial results of the VIEs, (2) receive substantially all of the economic benefits of the VIEs, (3) have the pledge right over the equity interests in the VIEs as the pledgee, and (4) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law. For details, see "Item 4. Information on the Company — C. Organizational Structure — Contractual Arrangements with the VIEs and Their Respective Shareholders."

The following chart shows our corporate structure as of February 28, 2026, including our principal subsidiaries and the VIEs. The Nasdaq-listed entity is the Parent, Ucommune International Ltd, and the public shareholders are purchasing the equity interests of the Parent. The VIEs and our principal subsidiaries are the operating entities.

![](ea028275601_img1.jpg)

The Parent is not a Chinese operating company but a Cayman Islands holding company with operations conducted by our subsidiaries and through contractual arrangements with the VIEs based in China, and this structure involves unique risks to investors. The VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies, and investors may never hold equity interests in the Chinese operating companies. Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in VATSs and certain other businesses. We currently conduct our VATS business through Beijing U Bazaar, including value-added online services for our members. The VIE structure would afford us greater flexibility in developing our business scope and implementing our business strategies in compliance with PRC laws and regulations in the future as our business develops. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. If the PRC government deems that our contractual arrangements with the consolidated VIEs domiciled in China do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. In addition, to the extent cash is located in the PRC or within a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations placed on us by the PRC government. To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of the Parent, our subsidiaries or the VIEs by the PRC government to transfer cash. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure."

***Contractual Arrangements with the VIEs and Their Respective Shareholders***

Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in VATSs and certain other businesses. We are a company incorporated in the Cayman Islands. We currently conduct our VATS business through Beijing U Bazaar, including value-added online services for our members.

The Parent and our subsidiaries operate our business mainly through the VIEs in the PRC, based on a series of contractual arrangements. As of December 31, 2023, 2024 and 2025, the consolidated VIEs accounted for an aggregate of 90.4%, 46.9% and 58.8%, respectively, of our consolidated total assets and 96.2%, 75.8% and 47.0%, respectively, of our consolidated total liabilities. In 2023, 2024 and 2025, the consolidated VIEs accounted for an aggregate of 100.0%, 99.8% and 92.0%, respectively, of our consolidated total net revenue. See our consolidated financial statements and the related notes included elsewhere in this annual report.

The following is a summary of the contractual arrangements by and among Youshenghengtong Technology, Beijing U Bazaar and the shareholder of Beijing U Bazaar. For the complete text of these contractual arrangements, see the copies filed or incorporated by reference as exhibits to the annual report filed with the SEC.

These contractual arrangements enable the Parent to:

● receive the economic benefits that could potentially be significant to the consolidated VIEs in consideration for the services provided by our subsidiaries;

● be the primary beneficiary of contractual arrangements with the consolidated VIEs; and

● hold an exclusive option to purchase all or part of the equity interests and an exclusive option to purchase all or part of the assets in the consolidated VIEs when and to the extent permitted by PRC law.

As a result of these contractual arrangements, the Parent is considered the primary beneficiary of the VIEs and consolidate their operating results in our financial statements under U.S. GAAP.

In the opinion of Jingtian& Gongcheng, our PRC legal counsel, the contractual arrangements described below are valid, binding and enforceable under current PRC law. However, these contractual arrangements may not be as effective in providing control as direct ownership. There are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations.

According to our PRC counsel, if the agreements that establish the structure for operating our VATS business and related business do not comply with PRC government restrictions on foreign investment in such businesses, we could be subject to severe penalties including being prohibited from continuing operating such business. For a description of the risks related to these contractual arrangements and our corporate structure, please see "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure."

 ****

***Exclusive Business Cooperation Agreement***

Under the exclusive business cooperation agreement dated May 20, 2019, Youshenghengtong Technology has agreed to provide the following services (among others) to Beijing U Bazaar:

● the provision of technical support and marketing services, including, but not limited to consultancy, collection and research of information thereof, support and training for employees, services related to customers and order management;

● the provision of services related to the transfer, leasing and disposal of equipment or assets;

● the development, maintenance and updates of computer system, hardware and database;

● the licensing of software legally owned by Youshenghengtong Technology; and

● the development of application software and related updates and operational support.

Beijing U Bazaar has agreed to pay fees up to its and its subsidiaries' after-tax profit to Youshenghengtong Technology. This agreement was effective from May 20, 2019 and will continue to be effective unless it is terminated by written notice of Youshenghengtong Technology or, or until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee under the exclusive purchase option agreement.

***Equity Pledge Agreement***

Beijing U Bazaar and its shareholders entered into an equity pledge agreement with Youshenghengtong Technology, dated May 20, 2019. Under such equity pledge agreement, each of the shareholders of Beijing U Bazaar agreed to pledge its respective equity interest in Beijing U Bazaar to Youshenghengtong Technology to secure their obligations under the exclusive option agreement, shareholders' voting rights proxy agreement, and exclusive business cooperation agreement. Each of such shareholders further agreed to not transfer or pledge his or her respective equity interest in Beijing U Bazaar without the prior written consent of Youshenghengtong Technology. The equity pledge agreement will remain binding until the pledgers discharge all their obligations under the above-mentioned agreements.

On June 26, 2023, the then shareholder of Beijing U Bazaar transferred 100% equity interests in Beijing U Bazaar to one of our employees. In connection with this transfer, on June 26, 2023, such employee entered into a new series of contractual arrangements, including equity pledge agreement, exclusive option agreement and voting rights proxy agreement, with Youshenghengtong Technology and Beijing U Bazaar on terms substantially similar to the previous ones, and the contractual arrangements previously entered into on May 20, 2019 were terminated on the same date.

On May 15, 2024, the then shareholder of Beijing U Bazaar transferred 100% equity interests in Beijing U Bazaar to another two of our employees. In connection with this transfer, on May 17, such two employees entered into a new series of contractual arrangements, including equity pledge agreement, exclusive option agreement and voting rights proxy agreement, with Youshenghengtong Technology and Beijing U Bazaar on terms substantially similar to the previous ones, and the contractual arrangements previously entered into on June 26, 2023 were terminated on the same date.

We have completed the registration of equity pledge of Beijing U Bazaar with the relevant offices of the SAMR (formerly, the SAIC).

 

***Exclusive Option Agreement***

Under the exclusive option agreement entered into by Youshenghengtong Technology, Beijing U Bazaar and the shareholders of Beijing U Bazaar, dated May 20, 2019, shareholders of Beijing U Bazaar granted Youshenghengtong Technology or its designee an option to purchase all or a portion of their respective equity interest in Beijing U Bazaar for the minimum amount of consideration permitted by PRC law. Under the exclusive option agreement, Beijing U Bazaar granted Youshenghengtong Technology or its designee an option to purchase all or a portion of the assets of Beijing U Bazaar or its subsidiaries for the minimum amount of consideration permitted by PRC law.

Each of Beijing U Bazaar and its shareholders agreed not to transfer, mortgage or permit any security interest to be created on any equity interest in or assets of Beijing U Bazaar without the prior written consent of Youshenghengtong Technology. The exclusive option agreement shall remain in effect until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee, or until all parties agree in writing to terminate the agreement, or until Youshenghengtong Technology unilaterally terminates the agreement by written notice.

On June 26, 2023, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the exclusive purchase option agreement previously entered into on May 20, 2019 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholder of Beijing U Bazaar.

On May 17, 2024, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the exclusive purchase option agreement previously entered into on June 26, 2023 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholders of Beijing U Bazaar.

 

***Shareholders' Voting Rights Proxy Agreement***

Under the shareholders' voting rights proxy agreement among Youshenghengtong Technology, Beijing U Bazaar and shareholders of Beijing U Bazaar, dated May 20, 2019, each of the shareholders of Beijing U Bazaar, agreed to irrevocably entrust Youshenghengtong Technology or its designee to represent it to exercise all the voting rights and other shareholders' rights to which it is entitled as a shareholder of Beijing U Bazaar. The shareholders' voting rights proxy agreement shall remain effective until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee under the exclusive option agreement, or until Youshenghengtong Technology unilaterally terminates the agreement by written notice.

On June 26, 2023, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the shareholders' voting rights proxy agreement previously entered into on May 20, 2019 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholder of Beijing U Bazaar.

On May 17, 2024, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the shareholders' voting rights proxy agreement previously entered into on June 26, 2023 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholders of Beijing U Bazaar.

However, neither the Parent nor WFOEs own any equity interest in the VIEs. Our contractual arrangements with the VIEs and their respective shareholders are not equivalent of an investment in the equity interest of the VIEs. Instead, as described above, we are regarded as the primary beneficiary of the VIEs and consolidate the financial results of the VIEs under U.S. GAAP in light of the VIE structures.

***Termination of the Ucommune Venture VIE Agreements***

In May 2019, Youshenghengtong Technology entered into a series of contractual arrangements with Ucommune Venture as well as its shareholders, and the contractual arrangements were renewed in July 2019 and in November 2019.

On September 20, 2024, Youshenghengtong Technology issued a notice ("Notice of Termination") to terminate the contractual arrangements with Ucommune Venture, and the existing shareholders of Ucommune Venture. As a result, the series of contractual arrangements entered into by and among Youshenghengtong Technology, Ucommune Venture and/or its shareholders, including exclusive business cooperation agreement, equity pledge agreement, exclusive option agreement, shareholders' voting rights proxy agreement and spousal consent letter, were terminated in accordance with the terms therein following 30 calendar days after the delivery date of the Notice of Termination. Ucommune Venture and its subsidiaries were deconsolidated and their financial results have not been included in the Company's consolidated financial statements since then.

The VIE structures involve unique risks to holders of our securities. It may be less effective than direct ownership in providing us with operational control over the VIEs, and we may incur substantial costs to enforce the terms of the arrangements. For instance, the VIEs and their respective shareholders could breach their contractual arrangements with us by, among other things, failing to conduct the operations of the VIEs in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIEs in China, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by the VIEs and their respective shareholders of their obligations under the contracts to direct the VIEs' activities. The shareholders of the VIEs may not act in the best interests of our company or may not perform its obligations under these contracts. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system.

We may face challenges in enforcing the contractual arrangements due to jurisdictional and legal limitations. There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to the contractual arrangements with the VIEs and their respective shareholders through the WFOEs. As of the date of this annual report, the contractual arrangements governing the VIEs have not been tested in a court of law. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or, if adopted, what they would provide. If we or the VIEs are found to be in violation of any existing or future PRC laws or regulations or fail to obtain or maintain any of the required licenses, permits, registrations or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. The PRC regulatory authorities could disallow the VIE structures at any time in the future. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties and may incur substantial costs to enforce the terms of the arrangements, or be forced to relinquish our interests in those operations. Our Cayman Islands holding company, our subsidiaries, the VIEs and our shareholders face uncertainty with respect to potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of our company and the VIEs as a whole. For details, see "— D. Risk Factors — Risks Relating to Our Corporate Structure."

We, our PRC subsidiaries and the consolidated VIEs face various legal and operational risks and uncertainties related to being based in and having significant operations in China. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us and the VIEs, to conduct its business, accept foreign investments or list on U.S. or other foreign exchanges. The PRC government has recently issued statements and regulatory actions relating to areas such as regulatory approvals of offshore offerings, oversight on cybersecurity and data privacy, the use of VIE structure, anti-monopoly regulatory actions, as well as the uncertainty of the inspection on our auditors by the Public Company Accounting Oversight Board (the "PCAOB"). For example, the PRC anti-monopoly and competition laws and regulations are evolving, and there remains uncertainties as to how the anti-monopoly laws, regulations and guidelines will impact our business and results of operations. See "— D. Risk Factors — Risks Related to Doing Business in China — Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions." The PRC government also has regulatory authority over the conduct of the business of us, our PRC subsidiaries and the consolidated VIEs, and may intervene with or influence our operations or the development of the agile office space industry as it deems appropriate to further regulatory, political and societal goals. See "— D. Risk Factors —Risks Related to Our Corporate Structure — If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future our securities may decline in value or become worthless." These statements and regulatory actions may impact our ability to conduct certain businesses, accept foreign investments, or list on a U.S. or other foreign exchange. Such risks could result in a material change in our operations and/or the value of our Class A ordinary shares, significantly limit or completely hinder our ability to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. For further details, see "— D. Risk Factors — Risks Related to Doing Business in China — The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A ordinary shares."

Revenues contributed by the VIEs accounted for substantially most of our net revenue in 2023, 2024 and 2025. For a condensed consolidation schedule depicting the results of operations, financial position and cash flows for us, the WFOEs and the VIEs during 2023, 2024 and 2025, see "Item 5. Operating and Financial Review and Prospects." For details of the permissions and licenses required for operating our business in China and the related limitations, see "— Our Operations in China and Permissions Required from the PRC Authorities for Our Operations."

 ****

 ****

***Cash and Asset Flows through Our Organization***

Cash may be transferred within our organization in the following manner: (1) the Parent may transfer funds to our subsidiaries, including our PRC subsidiaries, by way of capital contributions or loans; (2) the Parent and our subsidiaries may provide loans to the VIEs and vice versa; (3) funds may be transferred from the VIEs to the WFOEs, as service fees for services contemplated by the contractual arrangements; (4) our PRC subsidiaries, including the WFOEs, may pay dividends to their shareholders, which are the Parent's subsidiaries incorporated in Hong Kong and indirectly wholly-owned by the Parent; and (5) our non-PRC subsidiaries may make dividends or other distributions to the Parent. Because the WFOEs are the primary beneficiary of the VIEs through contractual arrangements and the Parent and its subsidiaries do not have equity ownership in the VIEs, neither the Parent nor its subsidiaries are able to make direct capital contributions to the VIEs or their respective subsidiaries, and the VIEs are not able to make dividends or other distributions to the Parent.

In light of our holding company structure and the VIE structures, our ability to pay dividends to the shareholders, and to service any debt we may incur may highly depend upon dividends paid by the WFOEs to us and service fees paid by the VIEs to the WFOEs, despite that we may obtain financing at the holding company level through other methods. For instance, if any of the WFOEs or the VIEs incur debt on their own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us and our shareholders, as well as the ability to settle amounts owed under the contractual arrangements.

Under PRC laws and regulations, the WFOEs are permitted to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, the WFOEs and the VIEs are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. Remittance of dividends by the WFOEs out of China is also subject to certain procedures with the banks designated by the PRC State Administration of Foreign Exchange ("SAFE"). These restrictions are benchmarked against the paid-in capital and the statutory reserve funds of the WFOEs and the net assets of the VIEs in which we have no legal ownership. In addition, while there are currently no such restrictions on foreign exchange and our ability to transfer cash or assets between Ucommune International Ltd and our subsidiaries incorporated in Hong Kong (the "HK Subsidiaries"), if certain PRC laws and regulations, including existing laws and regulations and those enacted or promulgated in the future were to become applicable to our HK Subsidiaries in the future, and to the extent our cash or assets are in Hong Kong or a Hong Kong entity, such funds or assets may not be available due to interventions in or the imposition of restrictions and limitations on our ability to transfer funds or assets by the PRC government. Furthermore, we cannot assure you that the PRC government will not intervene or impose restrictions on Ucommune International Ltd, its subsidiaries and the VIEs to transfer or distribute cash within the organization, which could result in an inability of or prohibition on making transfers or distributions to entities outside of mainland China and Hong Kong.

Under PRC laws and regulations, we, the Cayman Islands holding company, may fund the WFOEs only through capital contributions or loans, and fund the VIEs only through loans, subject to satisfaction of applicable government registration and approval requirements. For details, see "— D. Risk Factors — Risks Relating to Doing Business in China — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business," and "— D. Risk Factors — Risks Relating to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of securities offerings, to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and develop our business."

As of the date of this annual report, none of Ucommune International Ltd, the WFOEs and the VIEs has paid any dividends or made any distributions to their respective shareholders, including any U.S. investors, nor do we have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and develop our business. See "Dividend Policy" for details. In 2023, 2024 and 2025, the Parent made loans to our subsidiaries located outside China of RMB0.3 million, RMB15.5 million and RMB5.9 million (US$0.8 million), respectively, and collected loans from such subsidiaries of RMB62.9 million, RMB7.1 million and RMB3.9 million (US$0.6 million) in the same periods, respectively. In 2023, 2024 and 2025, the VIEs received loans from our PRC subsidiaries of RMB43.2 million, RMB33.3 million and RMB19.9 million (US$2.8 million), respectively, and made repayments of RMB54.6 million, RMB32.5 million and RMB16.2 million (US$2.3 million), respectively, in the same periods; and, in 2023, 2024 and 2025, the VIEs received loans from our subsidiaries located outside China of RMB277.3 million, nil, and nil respectively, and made repayments RMB305.1 million, RMB2.7 million and nil, respectively, in the same periods. In 2023, 2024 and 2025, the total amount of the service fees that the VIEs paid to the WFOEs under the contractual arrangements was nil, nil and nil, respectively. We expect to continue to distribute earnings and settle the service fees owed under the contractual arrangements at the request of the WFOEs and based on our business needs, and do not expect to declare dividends in the foreseeable future. Except as disclosed above, in 2023, 2024 and 2025, there was no other cash transfer among Ucommune International Ltd, our subsidiaries and the VIEs, and there were no material asset transfers other than cash transfers within our organization. For details of our cash transfers during the relevant years, see "Item 3. Key Information — Implications of Being a Company with the Holding Company Structure and the VIE Structures — Financial Statement Information Related to the VIE Structures" and our consolidated financial statements and the notes thereto included elsewhere in this annual report.

We have established stringent controls and procedures for cash flows within our organization based on internal cash management policies. Each transfer of cash among the Parent, our subsidiaries and the VIEs is subject to internal approval. To effect a cash transfer, a number of steps are needed, including but not limited to the issuance of payment receipt, logging into the online banking system and completing its verification process, inspection of the invoice, and payment execution. Only the finance department is authorized to make cash transfers. Within the finance department, the roles of payment approval, payment execution, record keeping, and auditing are segregated to minimize risk.

See also "Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources. — Holding Company Structure."

***Financial Statement Information Related to the VIE Structures***

 ****

The following condensed consolidated financial statements present information related to the Parent, i.e., Ucommune International Ltd, which is our investment holding company, the VIEs, the WFOEs, the HK Subsidiaries and other subsidiaries as of and for the periods indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Parent** | **VIE and its <br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating <br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Cash and cash equivalent | 18127 | 3989 | 153 | 13679 | 114 |  | 36062 |
| Inter-Company balances due from VIEs/Subsidiaries | 449591 |  |  |  |  | (449591) |  |
| Other current assets | 66848 | 16966 | 3361 | 793 | 281605 | (343036) | 26537 |
| **Total current assets** | 534566 | 20955 | 3514 | 14472 | 281719 | (792627) | 62599 |
| Property and equipment, net |  | 6240 | 9 |  | 41820 |  | 48069 |
| Right of use assets, net |  | 72733 |  |  |  |  | 72733 |
| Other non-current assets |  | 19120 |  |  |  |  | 19120 |
| **Total non-current assets** |  | 98093 | 9 |  | 41820 |  | 139922 |
| **Total assets** | 534566 | 119048 | 3523 | 14472 | 323539 | (792627) | 202521 |
| Accounts payable | 3425 | 4961 |  |  | 2269 | (300) | 10355 |
| Investment deficit in subsidiaries and consolidated VIEs | 320149 |  |  |  |  | (320149) |  |
| Inter-Company balances due to Parent/VIEs/Subsidiaries |  | 182636 | 12668 | 105062 | 149225 | (449591) |  |
| Lease liabilities, current |  | 1204 |  |  |  |  | 1204 |
| Forward sale agreement liability | 16813 |  |  |  |  |  | 16813 |
| Other current liabilities | 64666 | 12841 | 3026 | 41318 | 252877 | (344760) | 29968 |
| **Total current liabilities** | 405053 | 201642 | 15694 | 146380 | 404371 | (1114800) | 58340 |
| Lease liabilities, non-current |  | 13389 |  |  |  |  | 13389 |
| Other non-current liabilities | 1 | 2467 |  |  |  |  | 2468 |
| **Total non-current liabilities** | 1 | 15856 |  |  |  |  | 15857 |
| **Total liabilities** | 405054 | 217498 | 15694 | 146380 | 404371 | (1114800) | 74197 |
| **Total mezzanine equity** | 1262 |  |  |  |  |  | 1262 |
| **Total Equity/(Deficit)** | 128250 | (98450) | (12171) | (131908) | (80832) | 322173 | 127062 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Parent** | **VIE and its <br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating <br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Cash and cash equivalent | 7371 | 6960 | 10 | 10261 | 519 |  | 25121 |
| Inter-Company balances due from VIEs/Subsidiaries | 449238 |  |  |  |  | (449238) |  |
| Other current assets | 61492 | 28199 | 4426 | 2664 | 239979 | (295315) | 41445 |
| Current assets of discontinued operations |  |  |  |  | 87444 |  | 87444 |
| **Total current assets** | **518101** | **35159** | **4436** | **12925** | **327942** | **(744553)** | **154010** |
| Property and equipment, net |  | 5665 | 2 |  | 53777 |  | 59444 |
| Right of use assets, net |  | 89832 |  |  |  |  | 89832 |
| Other non-current assets |  | 22032 |  |  |  |  | 22032 |
| Non-current assets of discontinued operations |  |  |  |  | 460 |  | 460 |
| **Total non-current assets** | **—** | **117529** | **2** |  | **54237** |  | **171768** |
| **Total assets** | **518101** | **152688** | **4438** | **12925** | **382179** | **(744553)** | **325778** |
| Accounts payable | 3719 | 7089 |  |  | 36 |  | 10844 |
| Investment deficit in subsidiaries and consolidated VIEs | 360209 |  |  |  |  | (360209) |  |
| Inter-Company balances due to Parent/VIEs/Subsidiaries |  | 167726 | 4744 | 133688 | 143080 | (449238) |  |
| Lease liabilities, current |  | 7984 |  |  |  |  | 7984 |
| Other current liabilities | 44100 | 90631 | 2937 | 43122 | 219092 | (295662) | 104220 |
| Current liabilities of discontinued operations |  |  |  |  | 24353 |  | 24353 |
| **Total current liabilities** | **408028** | **273430** | **7681** | **176810** | **386561** | **(1105109)** | **147401** |
| Lease liabilities, non-current |  | 20977 |  |  |  |  | 20977 |
| Other non-current liabilities | 467 | 5098 |  |  |  |  | 5565 |
| **Total non-current liabilities** | **467** | **26075** |  |  |  |  | **26542** |
| **Total liabilities** | **408495** | **299505** | **7681** | **176810** | **386561** | **(1105109)** | **173943** |
| **Total Equity/(Deficit)** | **109606** | **(146817)** | **(3243)** | **(163885)** | **(4382)** | **360556** | **151835** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **Parent** | **VIE and its<br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating<br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Total revenue |  | 24019 | 201 |  | 2200 | (300) | 26120 |
| Total cost of revenue |  | (24624) | (1052) |  | (1483) | 293 | (26866) |
| Operating (expenses)/ income | (4912) | (2492) | (27915) | 7 | (4560) | 7 | (39865) |
| **(Loss)/gain from operations** | (4912) | (3097) | (28766) | 7 | (3843) |  | (40611) |
| Loss from equity method <br> investments | (26379) |  |  |  |  | 26379 |  |
| **Net (loss)/gain from continuing operations** | (37842) | (7721) | (19862) | 31212 | (28738) | 26379 | (36572) |
| Net loss from discontinued operation |  |  |  |  | (2681) |  | (2681) |
| **Net (loss)/income** | (37842) | (7721) | (19862) | 31212 | (31419) | 26379 | (39253) |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **Parent** | **VIE and its<br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating<br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Total revenue |  | 77092 |  |  | 121 |  | 77213 |
| Total cost of revenue |  | (76789) | (1595) |  | (629) |  | (79013) |
| Operating income/(expenses) | 484 | (30171) | (12612) | (77) | (2156) |  | (44532) |
| **Gain/(loss) from operations** | **484** | **(29868)** | **(14207)** | **(77)** | **(2664)** |  | **(46332)** |
| Loss from equity method <br> investments | (72236) | (483) |  |  |  | 72236 | (483) |
| **Net (loss)/gain from continuing operations** | **(69530)** | **(139681)** | **(14710)** | **16655** | **63991** | **72236** | **(71039)** |
| Net loss from discontinued operation |  | (7990) |  |  | (1217) |  | (9207) |
| **Net (loss)/income** | **(69530)** | **(147671)** | **(14710)** | **16655** | **62774** | **72236** | **(80246)** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** |
|  | **Parent** | **VIE and its<br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating<br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Total revenue |  | 152030 | 7 |  |  | (7) | 152030 |
| Total cost of revenue |  | (158041) | (2847) |  |  |  | (160888) |
| Operating income /(expenses) | 8747 | (109066) | (1508) | (3427) | (152) | 7 | (105399) |
| **(Loss)/gain from operations** | **8747** | **(115077)** | **(4348)** | **(3427)** | **(152)** |  | **(114257)** |
| Gain/(Loss) from equity method investments | 11366 | 795 |  |  |  | (11366) | 795 |
| **Net loss from continuing operations** | **(5132)** | **(27177)** | **(4348)** | **(3427)** | **40600** | **(11366)** | **(10850)** |
| Net loss from discontinued operation |  | (11974) |  |  |  |  | (11974) |
| **Net (loss)/income** | **(5132)** | **(39151)** | **(4348)** | **(3427)** | **40600** | **(11366)** | **(22824)** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **Parent** | **VIE and its <br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating <br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Net cash (used in)/provided by operating activities from continuing operations** | **(4256)** | **1212** | **(4828)** | **(1776)** | **5922** |  | **(3726)** |
| **Net cash used in operating activities from discontinued operations** |  |  |  |  | **(10128)** |  | **(10128)** |
| **Net cash (used in)/provided by operating activities** | **(4256)** | **1212** | **(4828)** | **(1776)** | **(4206)** |  | **(13854)** |
| Purchase of short-term investments |  |  |  | (70226) |  |  | (70226) |
| Settlement of short-term investments |  |  |  | 70226 |  |  | 70226 |
| Purchase of property and equipment |  | (7246) |  |  |  |  | (7246) |
| Cash received from disposal of Shengguang Zhongshuo |  |  | 16000 |  |  |  | 16000 |
| Loan provided to inter-companies | (5938) |  | (42071) | (3849) | (3517) | 55375 |  |
| Loan collection from inter-companies | 3913 |  | 23340 | 11214 | 127 | (38594) |  |
| Cash injection to subsidiaries |  |  | (33) | (2874) |  | 2907 |  |
| Other investing activities |  | (686) | (2220) |  | 13 |  | (2893) |
| **Net cash (used in)/ provided by investing activities from continuing operations** | **(2025)** | **(7932)** | **(4984)** | **4491** | **(3377)** | **19688** | **5861** |
| **Net cash used in investing activities from discontinued operations** |  |  |  |  |  |  |  |
| **Net cash (used in)/ provided by investing activities** | **(2025)** | **(7932)** | **(4984)** | **4491** | **(3377)** | **19688** | **5861** |
| Loan received from third parties |  |  |  |  | 3 |  | 3 |
| Loan repaid to third parties |  |  |  |  | (45) |  | (45) |
| Cash received from issuing redeemable convertible preferred shares | 18089 |  |  |  |  |  | 18089 |
| Issuance cost of redeemable convertible preferred shares | (523) |  |  |  |  |  | (523) |
| Loan received from inter-companies |  | 19912 | 7081 | 5312 | 23070 | (55375) |  |
| Loan repaid to inter-companies |  | (16163) |  | (3912) | (18519) | 38594 |  |
| Cash contribution from shareholders |  |  | 2874 |  | 33 | (2907) |  |
| Other financing activities | (620) |  |  |  |  |  | (620) |
| **Net cash provided by /(used in) financing activities from continuing operations** | **16946** | **3749** | **9955** | **1400** | **4542** | **(19688)** | **16904** |
| **Net cash provided by /(used in) financing activities from discontinued operations** |  |  |  |  |  |  |  |
| **Net cash provided by /(used in) financing activities** | **16946** | **3749** | **9955** | **1400** | **4542** | **(19688)** | **16904** |
| Effects of exchange rate changes | 91 |  |  | (697) | (7492) |  | (8098) |
| **Net increase/(decrease) in cash, cash equivalents and restricted cash** | **10756** | **(2971)** | **143** | **3418** | **(10533)** |  | **813** |
| Cash, cash equivalents and restricted cash - beginning of the period | 7371 | 6960 | 10 | 10261 | 65768 |  | 90370 |
| **Cash, cash equivalents and restricted cash - end of the period** | **18127** | **3989** | **153** | **13679** | **55235** | **—** | **91183** |
| **Less: Cash, cash equivalents and restricted cash of discontinued operations** | **—** |  |  | **—** | **55121** | **—** | **55121** |
| **Cash, cash equivalents and restricted cash – end of the period from continuing operations** | **18127** | **3989** | **153** | **13679** | **114** |  | **36062** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **Parent** | **VIE and its <br> Subsidiaries** | **WFOEs** | **HK <br> Subsidiaries** | **Other <br> Subsidiaries** | **Eliminating<br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Net cash (used in)/provided by operating activities from continuing operations** | **(11633)** | **(47033)** | **(2368)** | **10028** | **29491** |  | **(21515)** |
| **Net cash used in operating activities from discontinued operations** | **—** | **(3640)** | **—** | **—** | **29018** |  | **25378** |
| **Net cash (used in)/provided by operating activities** | **(11633)** | **(50673)** | **(2368)** | **10028** | **58509** |  | **3863** |
| Purchase of short-term investments | (17254) |  |  | (17284) |  |  | (34538) |
| Settlement of short-term investments | 34504 |  |  | 17284 |  |  | 51788 |
| Purchase of property and equipment |  | (4924) |  |  | 617 |  | (4307) |
| Other investing activities |  | (771) |  |  | 24 |  | (747) |
| **Net cash provided by/(used in) investing activities from continuing operations** | **17250** | **(5695)** | **—** | **—** | **641** |  | **12196** |
| **Net cash used in investing activities from discontinued operations** | **—** | **(169)** | **—** | **—** | **(641)** |  | **(810)** |
| **Net cash provided by/(used in) investing activities** | **17250** | **(5864)** | **—** | **—** | **—** |  | **11386** |
| Loan received from third parties |  | 9658 |  |  |  |  | 9658 |
| Loan repaid to third parties |  | (778) |  |  | (36) |  | (814) |
| Other financing activities | 782 | (118) | 1376 |  | 1 |  | 2041 |
| **Net cash provided by/(used in) financing activities from continuing operations** | **782** | **8762** | **1376** | **—** | **(35)** |  | **10885** |
| **Net cash provided by/(used in) financing activities from discontinued operations** | **—** | **7298** | **—** | **—** | **(98)** |  | **7200** |
| **Net cash provided by/(used in) financing activities** | **782** | **16060** | **1376** | **—** | **(133)** |  | **18085** |
| Effects of exchange rate changes | (62) |  |  | (79) | 7306 |  | 7165 |
| **Net increase/(decrease) in cash, cash equivalents and restricted cash** | **6337** | **(40477)** | **(992)** | **9949** | **65682** |  | **40499** |
| Cash, cash equivalents and restricted cash - beginning of the period | 1034 | 52839 | 1002 | 312 | 86 |  | 55273 |
| **Cash, cash equivalents and restricted cash - end of the period** | **7371** | **12362** | **10** | **10261** | **65768** |  | **95772** |
| **Less: Cash, cash equivalents and restricted cash of discontinued operations** |  | **5402** | **—** | **—** | **65249** |  | **70651** |
| **Cash, cash equivalents and restricted cash – end of the period from continuing operations** | **7371** | **6960** | **10** | **10261** | **519** |  | **25121** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** |
|  | **Parent** | **VIE and its<br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** | **Eliminating<br> Entries** | **Total** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Net cash provided by /(used in) operating activities from continuing operations** | **5872** | **(9359)** | **(2167)** | **(1122)** | **594** |  | **(6182)** |
| **Net cash provided by operating activities from discontinued operations** |  | **23178** |  |  |  |  | **23178** |
| **Net cash provided by /(used in) operating activities** | **5872** | **13819** | **(2167)** | **(1122)** | **594** |  | **16996** |
| Purchase of short-term investments |  | (19123) |  |  |  |  | (19123) |
| Settlement of short-term investments |  | 2126 |  |  |  |  | 2126 |
| Purchase of property and equipment |  | (12968) |  | (556) |  |  | (13524) |
| Other investing activities |  | 39662 |  |  |  |  | 39662 |
| **Net cash provided by/(used in) investing activities from continuing operations** |  | **9697** |  | **(556)** |  |  | **9141** |
| **Net cash used in investing activities from discontinued operations** |  | **7566** |  |  |  |  | **7566** |
| **Net cash provided by /(used in) investing activities** |  | **17263** |  | **(556)** |  |  | **16707** |
| Loan received from third parties |  | 1539 |  |  |  |  | 1539 |
| Loan repaid to third parties |  | (6337) |  |  | (178) |  | (6515) |
| Redemption of convertible bond | (5482) |  |  |  |  |  | (5482) |
| Other financing activities |  | (12000) |  |  |  |  | (12000) |
| **Net cash used in financing activities from continuing operations** | **(5482)** | **(16798)** |  |  | **(178)** |  | **(22458)** |
| **Net cash used in financing activities from discontinued operations** |  | **(8331)** |  |  |  |  | **(8331)** |
| **Net cash used in financing activities** | **(5482)** | **(25129)** |  |  | **(178)** |  | **(30789)** |
| Effects of exchange rate changes | (14) |  |  | (42) | (830) |  | (886) |
| **Net increase/(decrease) in cash, cash equivalents and restricted cash** | **376** | **5953** | **(2167)** | **(1720)** | **(414)** |  | **2028** |
| Cash, cash equivalents and restricted cash - beginning of the period | 658 | 46886 | 3169 | 2032 | 500 |  | 53245 |
| **Cash, cash equivalents and restricted cash - end of the period** | **1034** | **52839** | **1002** | **312** | **86** |  | **55273** |
| **Less: Cash, cash equivalents and restricted cash of discontinued operations** |  | **38883** |  |  |  |  | **38883** |
| **Cash, cash equivalents and restricted cash – end of the period from continuing operations** | **1034** | **13956** | **1002** | **312** | **86** |  | **16390** |

---

The following table sets forth the roll-forwards of the investment in our subsidiaries and the VIEs line item for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Inter-group Balances Due from VIEs/Subsidiaries:** | **Parent** | **VIE and its<br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **December 31, 2023** | **52083** |  | **—** | **190068** | **—** |
| Loss from equity method investment | (72236) |  | **—** | **—** | **—** |
| Additional long-term investment held by share incentive plan<sup>(1)</sup> | 28849 |  | **—** | **—** | **—** |
| Disposal of Ucommune Venture VIE<sup>(2)</sup> | 66213 |  | **—** | **—** | **—** |
| Loan exempt from related parties | 3662 |  | **—** | **—** | **—** |
| Foreign exchange gain for Long-term investments | 533 |  | **—** | **—** | **—** |
| Intercompany loan lent | 15458 |  | 23280 | 3184 | 13404 |
| Intercompany loan collected | (7129) |  | (25900) | (3387) | (14332) |
| Transfer from intercompany | 1596 |  | 2620 | 8846 | 71974 |
| **December 31, 2024** | **89029** |  | **—** | **198711** | **71046** |
| Loss from equity method investment | (26379) |  |  |  |  |
| Additional long-term investment held by share incentive plan<sup>(1)</sup> | 15022 |  |  |  |  |
| Acquisition of a subsidiary | (3054) |  |  |  |  |
| Disposal of subsidiaries | 1461 |  |  |  |  |
| Loan exempt from related parties | 54430 |  |  |  |  |
| Foreign exchange gain for Long-term investments | (1420) |  |  |  |  |
| Intercompany loan lent | 5938 |  | 42071 | 3849 | 3517 |
| Intercompany loan collected | (3913) |  | (23340) | (11214) | (127) |
| Transfer (to)/from intercompany | (1672) |  | (18731) | 55242 | (1477) |
| **December 31, 2025** | **129442** |  | **—** | **246588** | **72959** |

---

(1) Ucommune International
 Ltd issued share incentives to its employees using its ordinary shares. Upon the consummation
 of the Business Combination, the shares previously granted became effective and vest according
 to the related share incentive agreements. Therefore, the parent company recognized long-term
 investments to the subsidiaries and the subsidiaries recognized share-based compensation
 expenses.

(2) On September 20, 2024,
 Youshenghengtong Technology issued a notice to terminate the Ucommune Venture VIE Agreements
 (as defined below) to Ucommune Venture and the existing shareholders of Ucommune Venture.
 As a result, the series of contractual arrangements entered into by and among Youshenghengtong
 Technology, Ucommune Venture and/or its shareholders (the "Ucommune Venture VIE Agreements"),
 including exclusive business cooperation agreement, equity pledge agreement, exclusive option
 agreement, shareholders' voting rights proxy agreement and spousal consent letter,
 were terminated in accordance with the terms therein following 30 calendar days after the
 delivery date of the Notice of Termination, by which time Ucommune Venture and its subsidiaries
 were deconsolidated and their financial results were no longer included in our consolidated
 financial statements.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Inter-group Balances Due to VIEs/Subsidiaries:** | **Parent** | **VIE and its <br> Subsidiaries** | **WFOEs** | **HK<br> Subsidiaries** | **Other<br> Subsidiaries** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **December 31, 2023** |  | **182706** | **9173** | **320607** | **116894** |
| Intercompany loan received |  | 33338 | **—** | 14344 | 7645 |
| Intercompany loan repayment |  | (35106) | (4429) | (2552) | (8661) |
| Transfer (to)/from intercompany |  | (13212) | **—** | **—** | 98248 |
| **December 31, 2024** |  | **167726** | **4744** | **332399** | **214126** |
| Intercompany loan received |  | 19912 | 7081 | 5312 | 23070 |
| Intercompany loan repayment |  | (16163) |  | (3912) | (18519) |
| Transfer from intercompany |  | 11161 | 843 | 17851 | 3507 |
| **December 31, 2025** |  | **182636** | **12668** | **351650** | **222184** |

---

**Our Operations in China and Permissions Required from the PRC Authorities for Our Operations**

We, through the WFOEs and the VIEs, conduct our operations in China. Our operations in China are governed by PRC laws and regulations. We and the VIE are required to obtain certain licenses, permits and approvals from relevant governmental authorities in China in order to operate our business. Specifically, as of the date of this annual report: (1) each of the WFOEs and the VIEs has obtained a business license; (2) Beijing U Bazaar, through which we conduct our VATS business, including value-added online services for our members, has obtained a value-added telecommunications license for internet information service and online data processing and transactions, a license for radio and television program production and a license for internet cultural business; and (3) Beijing Bianbian You International Cultural and Tourism Development Co., Ltd, which engages in tourism business, has obtained a travel agency business operation license; and (4) most of our self-operated model spaces have completed the required as-built acceptance check on fire prevention or fire safety filing. However, a small number our self-operated model spaces have not completed such as-built acceptance check on fire prevention or fire safety filing. As of the date of this annual report, as advised by our PRC counsel, Jingtian & Gongcheng, the WFOEs and the VIEs have obtained the licenses, permits and registrations from the PRC government authorities necessary for our business operations in China. Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, and the promulgation of new laws and regulations and amendment to the existing ones, we may be required to obtain additional licenses, permits, registrations, filings or approvals for our business operations in the future. We cannot assure you that we or the VIEs will be able to obtain, in a timely manner or at all, or maintain such licenses, permits or approvals, and we or the VIEs may also inadvertently conclude that such permissions or approvals are not required. Any lack of or failure to maintain requisite approvals, licenses or permits applicable to us or the VIEs may have a material adverse impact on our business, results of operations, financial condition and prospects and cause the value of any securities we offer to significantly decline or become worthless. For details, see "— D. Risk Factors — Risks Relating to Doing Business in China — Any lack of requisite approvals, licenses or permits applicable to our business may materially and adversely affect our business, financial condition and results of operations."

On December 28, 2021, the Cyberspace Administration of China (the "CAC") and other 12 PRC regulatory authorities jointly issued an amendment to the Measures for Cybersecurity Review (the "Cybersecurity Review Measures"), which took effect on February 15, 2022. See "Item 4. Information on the Company — Regulation — Regulations Relating to Internet Information Security and Privacy Protection."

Pursuant to the Cybersecurity Review Measures, in addition to "critical information infrastructure operators" who procure internet products and services that affect or may affect national security shall be subject to a cybersecurity review, any "online platform operators" carrying out data processing activities that affect or may affect national security should also be subject to the cybersecurity review requirements. The Cybersecurity Review Measures also provide that if a "online platform operator" holding personal information of more than one million users intends to go public in a foreign country, it must apply for a cybersecurity review. In addition, the relevant PRC governmental authorities may initiate cybersecurity review if they determine certain network products, services, or data processing activities affect or may affect national security. As of the date of this annual report, we have not been involved in any investigations on cybersecurity review initiated by the CAC or related governmental regulatory authorities, nor have we received any inquiry, notice, warning, or sanction in such respect. Based on the opinion of our PRC counsel, Jingtian & Gongcheng, we are not required to file an application for the cybersecurity review by the CAC for our previous issuance of securities to foreign investors as of the date of this annual report, because (1) we are not in the industry or business operation that involves critical information infrastructure operation, nor do we operate as an online platform operator engaging in relevant data processing activities which affect or may affect national security of the PRC; (2) we are not in possession of personal information of over one million users; and (3) as of the date of this annual report, we have not received any notice or determination from applicable PRC governmental authorities identifying us as a critical information infrastructure operator or an online platform operator engaging in relevant data processing activities which affect or may affect national security of the PRC. However, if we are not able to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, we may be subject to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our applications from the relevant application stores, among other sanctions, which could materially and adversely affect our business and results of operations. See "— D. Risk Factors — Risks Relating to Doing Business in China — The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A ordinary shares" and "— D. Risk Factors — Risks Relating to Doing Business in China — We may be liable for improper use or appropriation of personal information provided by our customers."

On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Measures of the Overseas Securities Offering and Listing by Domestic Companies (the "Overseas Listing Trial Measures") and the related guidelines, which became effective on March 31, 2023. The Overseas Listing Trial Measures has comprehensively improved and reformed the existing regulatory regime for overseas offering and listing of securities by PRC domestic companies and regulates both direct and indirect overseas offering and listing of securities by PRC domestic companies by adopting a filing-based regulatory regime. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report relevant information. The CSRC provided further notice related to the Overseas Listing Trial Measures that companies that have already been listed on overseas stock exchanges prior to March 31, 2023 are not required to make immediate filings for its listing, but are required to make filings for subsequent offerings in accordance with the Overseas Listing Trial Measures, i.e., to file with the CSRC within three business days after the closing of such subsequent offerings. As we had been listed on Nasdaq prior to March 31, 2023, we are not required to make immediate filing with the CSRC in connection with our listing on Nasdaq. However, we could be subject to the filing requirements with the CSRC if we conduct subsequent offerings. On December 23, 2025 and February 12, 2026, we closed two tranches of Preferred Shares Issuance. On February 12, 2026, we closed the Securities Exchange and issued 6,800 New Preferred Shares to an investor. Subsequently, we made a filing with the CSRC on February 13, 2026. See "Item 4. Information on the Company — Regulation — Regulations Relating to Mergers and Acquisitions and Overseas Listing."

We cannot assure you that we or the VIEs can complete the filing procedures, obtain the approvals or complete other compliance procedures in a timely manner, or at all, or that any completion of filing or approval or other compliance procedures would not be rescinded. Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our Class A ordinary shares. Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless. For details, see "— D. Risk Factors — Risks Relating to Doing Business in China — Recent regulatory development in China may exert more oversight and control over listings and offerings that are conducted overseas. The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing."

**The Holding Foreign Companies Accountable Act**

The Holding Foreign Companies Accountable Act (the "HFCAA") was enacted on December 18, 2020. Pursuant to the HFCAA and related regulations, if we have filed an audit report issued by a registered public accounting firm that the Public Company Accounting Oversight Board (the "PCAOB") has determined that it is unable to inspect and investigate completely, the Securities and Exchange Commission (the "SEC") will identify us as a "Commission-Identified Issuer," and the trading of our securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the United States, will be prohibited if we are identified as a Commission-Identified Issuer for two consecutive years. In August 2022, the PCAOB, the CSRC and the Ministry of Finance of the PRC signed the Statement of Protocol, which establishes a specific and accountable framework for the PCAOB to conduct inspections and investigations of PCAOB-governed accounting firms in mainland China and Hong Kong. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. As a result, we do not expect to be identified as a "Commission-Identified Issuer" under the HFCAA for the fiscal year ended December 31, 2025 after we file our annual report on Form 20-F for such fiscal year. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor's control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. If the PCAOB is unable to inspect and investigate completely registered public accounting firms located in China and we fail to retain a registered public accounting firm that the PCAOB is able to inspect and investigate completely, or if we otherwise fail to meet the PCAOB's requirements, our Class A ordinary shares will be delisted from Nasdaq, and will not be permitted for trading over the counter in the United States under the HFCAA and related regulations. The related risks and uncertainties could cause the value of our Class A ordinary shares to significantly decline or become worthless. For details, see "— D. Risk Factors — Risks Related to Doing Business in China — Our securities will be delisted and be prohibited from trading in the over-the-counter market in the United States under the Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment.

**A. [Reserved]**

**B. Capitalization and Indebtedness**

Not applicable.

**C. Reasons for the Offer and Use of Proceeds**

Not applicable.

**D. Risk Factors**

**Summary of Risk Factors**

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks relating to:

 ****

***Risks relating to our business and industry***

● our limited operating history;

● our ability to attract new members or retain existing ones;

● our ability to manage our business scale, achieve growth and operate effectively;

● our ability to generate profits and positive cash flows, and to maintain sufficient working capital;

● our ability to return to profitability or raise sufficient capital to cover our capital needs;

● our reliance on large enterprise members to sustain our occupancy rates;

● our ability to use key operational metrics to accurately evaluate our performance;

● our significant capital requirements to fund our operations;

● our ability to retain our major customers for marketing and branding services; and

● our development into new regions, markets and business areas.

 ****

***Risks relating to our corporate structure***

● our reliance on contractual arrangements for a large portion of our operations, which may not be as effective as direct ownership in providing operational control;

● actual or potential conflicts of interest of shareholders of the VIEs with us;

● substantial uncertainties in the PRC foreign investment legal regime; and

● our dual-class share structure, which may limit holders of the Class A ordinary shares to influence corporate matters.

 ****

***Risks relating to doing business in China***

● Changes in China's economic, political or social conditions or government policies could materially and adversely affect our business. Given the current regulatory environment in the PRC, the interpretation and enforcement of PRC laws may change quickly and subject to any future actions within the discretion of PRC authorities. See "— Risks Related to Doing Business in China — Changes in China's economic, political or social conditions or government policies could materially and adversely affect our business";

● Uncertainties with respect to the PRC legal system could adversely affect us. Certain rules and regulations may change quickly with little advance notice, and there may be risks and changes regarding the interpretation and enforcement of PRC laws and regulations, which may affect our decisions on the policies and actions to be taken to comply with PRC laws and regulations. See "— Risks Related to Doing Business in China — Uncertainties with respect to the PRC legal system could adversely affect us";

● The PRC government has regulatory oversight and authority over the conduct of our business and may intervene with or influence our operations as the government deems appropriate to further regulatory, political and societal goals. We, our PRC subsidiaries and the VIEs face various legal and operational risks related to being based in and having significant operations in China. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. See "— Risks Related to Doing Business in China — The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A ordinary shares";

● We face material risks relating to our corporate structure. The Parent is not a Chinese operating company but a Cayman Islands holding company with operations conducted by our subsidiaries and through contractual arrangements with VIEs based in China, and this structure involves unique risks to investors. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. See "— Risks Related to Doing Business in China — If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future our securities may decline in value or become worthless"; and

● Our securities will be delisted under the HFCAA if the PCAOB is unable to inspect the audit working papers related to us, which are located in China. See "— Risks Related to Doing Business in China — Our securities will be delisted and be prohibited from trading in the over-the-counter market in the United States under the Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment."

 ****

***Risks relating to being a public company and our securities***

● volatility of the trading price of our Class A ordinary shares;

● potential dilution to our Class A ordinary shareholders caused by the exercise of the outstanding warrants or UPOs or the conversion UPO Rights or Debenture;

● our status as a foreign private issuer;

● our status as an exempted company with limited liability incorporated in the Cayman Islands; and

● our status as a "controlled company" within the meaning of the Nasdaq listing requirements.

**Risks Relating to Our Business and Industry**

 ****

***We have experienced fluctuations of our business performance, including a decline in business scale in recent years due to various reasons, some of which are beyond our control. If we are unable to manage our business scale, achieve growth or otherwise operate our business effectively, our results of operations and financial condition may be materially and adversely affected.***

Our business has experienced volatility. We have also experienced significant decline in business scale in recent years. The number of our agile office spaces decreased from 95 as of December 31, 2023, to 13 as of December 31, 2024, and subsequently decreased to 4 as of December 31, 2025. The number of our spaces in operation decreased from 79 as of December 31, 2023, to 12 as of December 31, 2024, and subsequently decreased to 4 as of December 31, 2025. The number of workstations available in our spaces in operation decreased from approximately 29,850 as of December 31, 2023, to 5,844 as of December 31, 2024, and subsequently decreased to 2,849 as of December 31, 2025.

Our business scale could fluctuate due to various factors, some of which are beyond our control, including increasing competition within the industry, emergence of alternative business models, or changes in government policies or general economic conditions. For example, a significant portion of our existing and target member base consists of SMEs, whose development have benefited from favorable policies encouraging entrepreneurship and innovation in recent years in China. If changes in policies adversely affect the growth of SMEs, our business scale may decline due to the reduction in agile office needs in general. In addition, there could be a reduction in demand for our services as a result of decreased customer spending, weakening economic conditions or otherwise, which could materially and adversely affect our business, results of operations and financial condition.

***We have incurred significant losses historically, and we may experience significant losses in the future.***

We have incurred net losses since our inception in April 2015. For 2023, 2024 and 2025, we incurred net loss of RMB22.8 million, RMB80.2 million and RMB39.3 million (US$5.6 million), respectively.

Our significant losses have resulted primarily from our operating activities. We also expect to incur additional general and administrative expenses and compliance costs. These expenditures may make it difficult for us to achieve profitability, and we cannot predict whether we will achieve profitability in the near term or at all. The costs actually incurred could exceed our expectations, and the investments may be unsuccessful and not generate adequate revenue and cash flow, if any at all.

 ****

***We are exposed to liquidity constraints, which could make it difficult to obtain additional financing on favorable terms or at all and could adversely affect our financial condition, results of operations and ability to repay our debts.***

We intend to finance our future working capital requirements and capital expenditures from cash generated from operating activities and funds raised from financing activities. We may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. We may from time to time incur substantial debt to finance the capital expenditures needed to carry out our daily operations. To service our debt, we may also be required to borrow new loans from commercial banks or other institutions or entities. See "Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources."

If we were unable to obtain financing on favorable terms, this could hamper our ability to obtain further financing and meet our principal and interest payment obligations to our creditors. As a result, we may face liquidity constraints. In order to provide additional liquidity, we could be forced to reduce our planned capital expenditures, implement austerity measures and/or sell additional non-strategic assets to raise funds.

A reduction in our capital expenditure program could adversely affect our financial condition and results of operations, in particular, our ability to achieve our anticipated growth or maintain the operations of our current spaces. Such events, if they occur, would adversely affect our financial condition and results of operations.

 ****

***We have recorded negative cash flows from operating activities historically and may experience significant cash outflows or have net current liabilities in the future.***

We have experienced significant cash outflow from operating activities historically. We generated negative cash flows from operating activities from continuing operations of RMB6.2 million, RMB21.5 million and RMB3.7 million (US$0.5 million) in 2023, 2024 and 2025, respectively. The cost of continuing operations could further reduce our cash position, and our net cash outflow from operating activities could adversely affect our operations by reducing the amount of cash available for our operations and business development.

Failure to generate positive cash flow from operations may adversely affect our ability to raise capital for our business on reasonable terms, if at all. It may also diminish the willingness of members or other parties to enter into transactions with us, and have other adverse effects that harm our long-term viability.

 ****

***We may continue to incur losses and negative cash flows from operating activities and deficit in the future. If we are not able to return to profitability or raise sufficient capital to cover our capital needs, our ability to continue as a going concern would be materially and adversely affected.***

We have incurred recurring operating losses since our inception, including net losses from continuing operations of RMB10.9 million, RMB71.0 million and RMB36.6 million (US$5.2 million) for 2023, 2024 and 2025, respectively. We have experienced significant cash outflow from operating activities historically. In 2023, 2024 and 2025, we generated negative cash flows from operating activities from continuing operations of RMB6.2 million, RMB21.5 million and RMB3.7 million (US$0.5 million). Accumulated deficit was RMB4,639.3 million (US$663.4 million) as of December 31, 2025. As of December 31, 2025, we had cash and cash equivalents of RMB36.1 million (US$5.2 million). These conditions raise substantial doubt about our ability to continue as a going concern.

Historically, we have relied principally on both operational sources of cash and non-operational sources of financing from investors to fund our operations and business development. Our ability to continue as a going concern is dependent on management's ability to successfully execute our business plan which includes continued business transition from asset-heavy model to asset-light model in order to improve the profitability, continued exploration of new business opportunities that have synergies with our core business, controlling operating costs and optimizing operational efficiency to improve our cash flow from operations. We also plan to raise additional capital, including among others, obtaining debt and equity financing, to support our future operation.

We continue to explore opportunities to develop our business. However, we have not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve stable net profit and positive cash flows from operating activities, and we expect the operating losses will continue for the foreseeable future. If we are unable to develop the business to achieve economies of scale in the future, it will become even more difficult for us to sustain a sufficient source of cash to cover our operating costs. There can be no assurance, however, that we will be able to obtain additional financing on terms acceptable, in a timely manner, or at all. In the event that financing sources are not available, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for development, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on our business, financial condition and results of operations and would materially and adversely affect our ability to continue as a going concern.

 ****

***Our financial condition and operational results are affected by our occupancy rates. We face heightened risks as we rely on many large enterprise members to sustain our occupancy rates.***

In pre-opening process, our spaces typically have a three to five month vacancy period to redevelop space and conduct other pre-opening preparation work. The vacancy period might also be longer than expected if we cannot attract members to our new spaces or maintain members of our existing spaces.

We rely on a limited number of key large enterprise members to sustain our occupancy rates. There are two customers from workspace membership revenue segment individually represents 26.9% and 23.7% of total revenue for the year ended December 31, 2025. Such concentration leads to heightened risks, for instance, if one of these key enterprises terminates its contract with us, our business could suffer.

Large enterprise members often sign membership agreements on longer lease terms and for larger spaces or a greater number of workstations than some of our other members. They generally account for a high proportion of our net revenue at a particular community. A default by a large enterprise member under its agreement with us could significantly reduce the operating cash flow generated by the community where that large enterprise member is situated.

In addition, the larger amount of available space occupied by any individual large enterprise member means that the time and effort required to execute a definitive agreement tailored for such a member is greater than that required for our standard membership agreements. In some instances, we agree to varying levels of customization of the spaces we license to these large enterprise members.

Large enterprise members may nevertheless delay commencement of their membership agreements, fail to make timely lease payments, declare bankruptcy or otherwise default on their obligations. Any of these events could result in the termination of that large enterprise member's agreement with us and, potentially, sunk costs and transaction costs that are difficult or impossible for us to recover.

If the members choose not to continue using our spaces, new members may not use the current space or we need additional time and cost to redevelop the space. This may result in longer vacancy periods and adversely affect our operational results.

 ****

***Our limited operating history makes it difficult to predict our future prospects, business and financial performance.***

We launched our first space in September 2015 and officially launched our app, U Bazaar, in April 2016. In addition, we continually review the operating models of our spaces and explore new operating models for enhancing our operational efficiency and our monetization channels. For example, we further developed our operations under U Partner, a category under our asset-light model, in July 2019.

Our short operating history may not serve as an adequate basis for evaluating our prospects and future operating results, including our key operating data, net revenue, cash flows and operating margins. In addition, the co-working space industry in China remains at an early stage of development and continues to evolve. As a result, you may not be able to fully discern the market dynamics to which we are subject and assess our business prospects.

We have encountered risks, challenges and uncertainties experienced by companies at an early stage, including those relating to our ability to adapt to the industry, to maintain and monetize our member base and to introduce new offerings and services. If we cannot successfully address these risks and uncertainties, our business, financial condition and results of operations could be materially and adversely affected.

 ****

***We may not retain existing members, especially those who enter into short-term contracts with us, or attract new members at a level necessary to sustain or grow our business.***

We collect monthly rent in the form of membership service fees or office workstation rental fees, which constitutes an important part of our net revenue, and we depend on the enlargement of our member base to build the vibrant community that we envision. Any failure to attract existing members or bring new members in adequate numbers or at adequate rental rates would materially and adversely affect our business. To sustain our business, we endeavor to retain our existing members and continually add new members to maintain or improve our occupancy rates.

We face various uncertainties and challenges in maintaining and growing our member base. A significant number of our existing and target members consists of SMEs. These members frequently have limited budgets and are more vulnerable to adverse economic conditions and unfavorable changes in the regulatory environment.

If these businesses experience economic hardship, they may be unwilling or unable to use our services. This would reduce demand for our services, increase customer attrition and adversely affect our business, financial condition and results of operations. In addition, we may lose members due to adverse changes in general economic conditions or the regulatory environment in the regions in which we operate or the industries in which our members operate.

We have experienced fluctuations in our member base. Our members may terminate their membership agreements for leasing our workstations or spaces with us at any time upon one-month's notice. Furthermore, our existing spaces may become unsuitable to members for a number of reasons. For example, our community could become less popular because of a shift in the local economic landscape, or our members may no longer favor our products and service offerings because of new work style trends or changes in the large enterprise members' business plans.

Launching new spaces, as mentioned above, is expensive and involves certain risks. Likewise, it would be costly and risky to develop and introduce new lines of products or service offerings. Even if we attract new members, these new members may not maintain the same level of involvement in our community. For example, they may not use our U Plus services. In addition, our net revenue might suffer because of the discounts and other incentives we offer to attract new members.

 ****

***Our key operational metrics and other estimates may not accurately measure our operating performance.***

We continually review the numbers of spaces, workstations, members and occupancy rates to evaluate our development trends, measure our performance and make strategic decisions. We calculate these metrics using internal data and they may not be indicative of our future operating performance. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement, measuring how our spaces are used across a large member base involves significant challenges.

For example, the number of our members may include members who do not actively use our spaces or services. If investors do not perceive our operating metrics to accurately represent our operating performance, or if we discover material inaccuracies in our operating metrics, our business, financial condition and reputation may be materially and adversely affected.

 ****

***We require significant capital to fund our operations and development. If we cannot obtain sufficient capital on acceptable terms, our business, financial condition and prospects may suffer.***

We require significant capital and resources for our operations and continued development. We expect to make significant investments in the operations of our spaces, which may significantly increase our net cash used in operating activities. Our sales and marketing expenses may also increase to retain existing members and attract new members. In addition, we invest heavily in our technology systems, which are essential to our operations. It may take substantial time to realize returns on such investments, if at all.

We have historically funded our cash requirements primarily through capital contributions from our shareholders, short-term/long-term borrowings and securities offerings. If these resources are insufficient to satisfy our cash requirements, we may seek to raise funds through additional equity offerings or debt financing or additional bank facilities.

Our ability to obtain additional capital in the future, however, is subject to a number of uncertainties, including our future business development, financial condition and results of operations, general market conditions for financing activities by companies in our industry, and macro-economic and other conditions in China and globally. If we cannot obtain sufficient capital on acceptable terms to meet our capital needs, we may not execute our development strategies, and our business, financial condition and prospects may be materially and adversely affected. On the other hand, if we raise additional funds through the issuance of equity or convertible debt securities, the ownership interests of our shareholders could be significantly diluted. These newly issued securities may have rights, preferences or privileges senior to those of our existing shareholders.

***Our development into new regions, markets and business areas may pose increased risks.***

Our development into new regions, markets and business areas will incur significant costs, and inherently involves uncertainties and risks as we may encounter unexpected issues or situations for which we are unprepared. For instance, if we enter into new regions, we may invest substantial resources and may face new operational risks and challenges associated with business, economic and regulatory environments with which we are not familiar. We must understand and comply with local regulations, partner with local businesses or individuals, hire, train, manage and retain local workforce, and cope with members or potential members with different preferences.

In launching new spaces in a new region, we need to negotiate satisfactory leasing terms with local parties, adapt the designs and features of our spaces and services to accommodate local conventions, and adjust our pricing and marketing approaches based on local rental prices. All these adjustments we make may be ineffective and adversely affect our business. Our strategy of overseas development will further subject us to different cultural norms and business practices, risks relating to fluctuations in currency exchange rates, and unpredictable disruptions as a result of security threats or political or social unrest and economic instability.

 ****

 ****

***We have incurred, and may in the future incur, impairment loss on long-lived assets and long-term prepaid expenses. Significant impairment of our long-lived assets and long-term prepaid expenses could materially impact our financial position and results of our operations.***

We have made significant investment in long-lived assets. We review our long-lived assets, including right-of-use of assets arising from certain long-term leases, property, plant and equipment and assets recorded in connection with business combinations, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition.

If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we recognize an impairment loss based on the fair value of the assets. The application of long-lived asset impairment test requires significant management judgment. If our estimates and judgments are inaccurate, the fair value determined could be inaccurate and the impairment may not be adequate, and we may need to record additional impairments in the future.

We had impairment loss on long-lived assets and long-term prepaid expenses of RMB29.1 million in 2023, RMB1.0 million in 2024, and RMB2.9 million (US$0.4 million) in 2025. These impairment losses primarily reflected impairment of right-of-use assets, property and equipment, intangible assets and other non-current assets. For further information, see "Item 5. Operating and Financial Review and Prospects — A. Operating Results — Key Components of Results of Operations." We could record additional impairments on long-lived assets in the future. Any significant impairment losses charged against our long-lived assets could materially and adversely affect our results of operations.

 ****

***We face vigorous competition. If we are not able to compete effectively with others, our business, financial condition and results of operations may be materially and adversely affected.***

While we are a leader in China's agile office space industry, the industry remains at an early stage of development. If new companies launch competing solutions in the markets in which we operate, we may face increased competition for members. Our competitors include global players, up-and-coming local companies and traditional workspace operators. Some competitors may have more resources, operate in more jurisdictions and be able to provide a better member experience at more competitive prices.

We may face heightened competition under certain operating models. For example, for our spaces under U Brand, our competitors may charge lower management fees and we may lose clients due to pricing or be forced to lower our fees. Our inability to compete effectively in securing new or repeat businesses could hinder our operation or adversely impact our operating results.

In addition, some of the services we provide or plan to provide are served by companies established in their markets. Failure to compete in such services markets could damage our ability to cultivate the vibrant community we seek to build.

 ****

 ****

***Our success depends on the continuing efforts of our key management and capable personnel as well as our ability to recruit new talent. If we fail to hire, retain or motivate our staff, our business may suffer.***

Our future success depends in a large part on the continued service of our key management. If we lose the services of any member of our key management, we may not hire suitable or qualified replacements, and may incur additional expenses to recruit and train new staff, which could severely disrupt our business and operation. If any member of our key management joins a competitor or forms a competing business, we may lose customers, know-how and key professionals and staff members.

Our operation also requires us to hire, train, and retain a wide range of personnel that can adapt to a dynamic, competitive and challenging business environment and that help us conduct effective marketing, innovate new products and service offerings, and develop technological capabilities. We may need to offer attractive compensation and other benefits packages, including share-based compensation, to attract and retain them.

We also need to provide our employees with sufficient training to help them realize their career development and grow with us. Any failure to attract, train, retain or motivate experienced and capable personnel could severely disrupt our business and operation.

 ****

***Certain of our affiliated persons or entities are now or may in the future lease the building spaces they own to us or have other transactions with us. We may have conflicts of interest with our officers and directors for such related party transactions and we may not resolve such conflicts on terms favorable to us.***

Certain of our officers and directors are now or may in the future lease the building spaces they own to us or have other transactions with us. See "Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions."

Those related parties negotiated satisfactory terms that are in the best interests of their businesses as a whole. Although our audit committee, consisting of independent non-executive directors, reviews and approves all proposed related party transactions, we may not resolve all potential conflicts of interest in this regard.

 ****

***We have engaged in transactions with related parties, and such transactions present potential conflicts of interest that could adversely affect our business and results of operations.***

In addition to leasing building spaces from related parties, we have entered into a number of other transactions with related parties. See "Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions." for more details. We may enter into additional transactions with our related parties. Interests of these related parties may not necessarily be aligned with our interests and the interests of our other shareholders.

For example, conflicts of interest may arise in connection with transaction arrangements which may be less favorable to us than similar arrangements negotiated with unaffiliated third parties. Conflicts of interest may also arise in connection with the exercise of contractual remedies, such as the treatment of events of default. As a result, those related party transactions, individually or in the aggregate, may adversely affect our business and results of operations.

 ****

 ****

***Unexpected termination of leases or other arrangements, failure to negotiate satisfactory terms for or perform leases or other arrangements, failure to renew leases or other arrangements of our existing premises or to renew leases or other arrangements at acceptable terms could materially and adversely affect our business.***

Our ability to increase the number of spaces and to operate them profitably depends on the execution and performance of these leases or other arrangements and whether we can negotiate these leases and other arrangements on satisfactory terms. Lessors may also not duly perform their obligations under the leases or other arrangements due to various reasons, such as lessors' failure to deliver the possession of the premises as agreed.

The increases in rental rates, particularly in markets where initial terms under our leases are shorter, could adversely affect our business. In addition, our ability to negotiate favorable terms to extend a lease agreement or in connection with an alternate space depend on prevailing conditions in the real estate market, such as overall lease expenses, competition from other would-be tenants for desirable leased spaces, our relationships with building owners and landlords, or other factors beyond our control.

If we cannot renew or replace an expiring lease agreement, we will incur significant costs related to vacating that space or redeveloping the space, which could result in loss of members who may have chosen that space based on the design, location or other attributes of that particular space.

Strategic alternatives to pure leasing arrangements, such as acquisitions, strategic alliances and asset management agreements, accounted for a significant percentage of the spaces we obtain. These arrangements are generally more flexible and require less direct capital expenditures than a traditional lease arrangement but also involve risks and uncertainties.

For example, we have experienced delays or failure to deliver the possession of the premises with some of the counterparties for various reasons, including the delay of completion of the construction and the change of title of the premises before delivery. Although we have experienced such delays or failures in limited cases, we could experience delays or failures to deliver the premises in the future. Disruption of these strategic arrangements will adversely affect our business.

 ****

***Development of our business will partially depend on the recognition of our brand. Failure to maintain, protect and enhance our brand would limit our ability to develop or retain our member base, which would materially and adversely affect our business, financial condition and results of operations.***

We believe that recognition of our brand among members and business partners has reduced member acquisition costs and contributed to the development and success of our business. Maintaining, protecting and enhancing our brand remains critical to our business and market position. Maintaining, protecting and enhancing our brand depends on several factors, including our ability to:

● maintain the quality and attractiveness of the services we offer;

● maintain relationships with landlords and other business partners;

● increase brand awareness through marketing and brand promotion activities;

● comply with relevant laws and regulations;

● compete effectively against existing and future competitors; and

● preserve our reputation and goodwill generally and in the event of any negative publicity on our services and data security, or other issues affecting us, and China's agile office space industry in general.

A public perception that we, or other industry participants do not provide satisfactory services, even if factually incorrect or based on isolated incidents, could damage our reputation, diminish the value of our brand, undermine the trust and credibility we have established and negatively impact our ability to attract and retain members, as well as our business, financial condition and results of operations.

 ****

 ****

***We face risks associated with the redevelopment and construction of the spaces we occupy.***

Opening new spaces subjects us to risks associated with redevelopment projects in general, such as delays in construction, contract disputes and claims, fines or penalties levied by government authorities relating to our construction activities. We may also experience delays when opening a new space as a result of building owners or landlords not completing their base building work on time or as a result of delays in our obtaining land-use, building, occupancy and other required governmental permits and authorizations. Failure to open a space on schedule may result in lost revenue from that space, damage our brand and require that we lease and provide temporary space for our members.

Despite having our own design and building team during the development phase of our space, we rely in part on the availability and satisfactory performance of third-party general contractors and subcontractors to perform the actual construction work, and in many cases to select and obtain the related building materials. The timing and quality of the redevelopment of our occupied spaces depend on the performance of these third-party contractors acting on our behalf.

The people we engage in connection with a construction project are subject to the usual hazards associated with providing construction and related services on construction project sites, which can cause personal injury, damage to or destruction of property, plant and equipment, and environmental damage. Although we are insured against many of these risks, our insurance coverage may be inadequate in scope or coverage amount, and may be insufficient to fully compensate us for losses arising from any such events.

Despite our detailed specifications and our inspection, project management and quality control procedures, in some cases, general contractors and their subcontractors may use improper construction practices or defective materials. Improper construction practices or defective materials can result in the need to perform extensive repairs to our spaces and potentially lead to personal injury. We could also suffer damage to our reputation, and may be exposed to possible liability, if these third parties fail to comply with applicable laws.

 ****

***We incur significant costs related to the redevelopment of our spaces, which we may be unable to recover in a timely manner or at all.***

Redevelopment of a space typically takes three to five months from the date we take possession of the space under the relevant occupancy agreement to the opening date. During this time, we incur substantial costs without generating any revenues from the space, especially the costs for spaces under our self-operated model for which we bear lease and redevelopment costs.

If we cannot complete our redevelopment and construction activities, or conditions in the real estate market or the broader economy change in unfavorable ways, we may be unable to recover these costs in a timely manner or at all. In addition, our redevelopment activities are subject to cost and schedule overruns as a result of many factors, some of which are beyond our control and ability to foresee, including increases in the cost of materials and labor.

 ****

***We incur costs relating to the maintenance, refurbishment and remediation of our spaces.***

Our lease agreements generally require that we keep the spaces we occupy in good status and we typically must maintain and repair spaces we decorate. Our lease agreements for overseas spaces may also require us to return the space to the landlord at the end of the term in the same condition it was delivered to us, which, in such instances, will require removing all fixtures and improvements to the space. The costs associated with this maintenance, removal and repair work may be significant.

We may also have to periodically refurbish our spaces to keep pace with the changing needs of our members. Extensive refurbishments may be costly and time-consuming and negatively impact our operational and financial performance. Our member experience may also be adversely affected if extensive refurbishments disrupt our operations at our spaces.

 ****

 ****

***The long-term and fixed cost nature of our leases may limit our operating flexibility and could adversely affect our liquidity.***

We currently lease certain spaces under long-term leases. Our obligations to landlords under these agreements extend for periods that significantly exceed the length of our membership agreements with our members, which our members may terminate upon one-month's notice. Our leases generally provide for fixed monthly payments that are not tied to member usage or the size of our member base, and all of our leases contain minimum lease payment obligations.

As a result, if members at a particular space terminate their membership agreements with us and if we are unable to attract our members to actively use our spaces or services, our lease expenses may exceed our net revenue. In areas where retail cost for real estate is decreasing, we may not lower our fixed monthly payments under our leases to rates commensurate with prevailing market rates. At the same time, we would be pressured to lower our monthly rent in the form of membership service fees or office workstation rental fees charged to the members, potentially resulting in our lease expense exceeding our net revenue. In such events, we could not reduce our lease expenses or otherwise terminate the relevant lease in accordance with its terms.

If we experience a prolonged reduction in net revenue at a particular space, our results of operations in respect of that space would be adversely affected unless and until either the lease expires, or we are able to assign the lease or sublease the space to a third party, or we default under the lease and cease operations at the leased spaces. Our ability to assign a lease or sublease the space to a third party may be constrained by provisions in the lease that restrict these transfers without the prior consent of the landlord.

In addition, we could incur significant costs if we decide to assign or sublease unprofitable leases, as we may incur transaction costs associated with finding and negotiating with potential transferees, and the ultimate transferee may require upfront payments or other inducements. A default under a lease could expose us to breach of contract and other claims which could result in direct and indirect costs to us, and could result in operational disruptions that could harm our reputation and brand.

***Failure to comply with the terms of our indebtedness could result in default, which could have an adverse effect on our cash flow and liquidity.***

We may enter into credit facilities and debt financing arrangements containing financial and other covenants that could, among other things, restrict our operations. If we breach any of these covenants, including the failure to maintain certain financial ratios, our lenders may accelerate our debt obligations. Any default under our credit facility could result in the repayment of these loans prior to maturity as well as the inability to obtain additional financing, which may materially and adversely affect our cash flow and liquidity.

***Some of the lease agreements of our leased properties have not been registered with PRC government authorities as required by PRC law, which may expose us to potential fines.***

Under PRC law, we must register lease agreements of commodity housing tenancy with the local construction (real estate) departments. Some of our lease agreements for our leased properties in China, including leased properties for our spaces, have not been registered with PRC government authorities. The reasons for the incomplete registration and filing of lease agreements include:

● the lessors failed to provide necessary documents for us to register the leases with the local government authorities;

● certain local regulatory authorities do not process certain leases registration applications; and

● we did not file registrations for certain of our lease agreements that were close to expiration.

Failure to complete the registration and filing of lease agreements will typically not affect the validity of the lease agreements. However, if the parties to the lease agreements fail to rectify such non-compliance within the prescribed timeframes after receiving notice from the PRC government authorities, they may be exposed to potential fines ranging from RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the relevant authority. As advised by our PRC counsel, if we fail to rectify the unregistered leases within the period required by relevant government authorities, the maximum amount of potential fines arising from the unregistered leases would be approximately RMB0.8 million as of the date of this annual report. However, no material penalty has been imposed on us to date for the failure to register the relevant lease agreements.

We have taken several steps to strengthen our compliance for registration of lease agreements, including:

● liaising with the relevant lessors to provide required documentation for completing the registration;

● filing registrations for lease agreements that are close to expiration if such agreements are extended; and

● strengthening our internal control procedures to ensure registration of lease agreements for our new spaces.

***Property owners, government authorities or other third parties could challenge our rights to use our leased properties, which may disrupt our operations and incur relocation costs.***

Certain lessors of our leased properties in China have failed to provide us with valid property ownership certificates or authorizations from the property owners for the lessors to sublease the properties. If such lessors do not have the relevant property ownership certificates or the right to lease or sublease such properties to us, the relevant rightful title holders or other third parties may challenge our use of such leased properties. As a result, we may be forced to vacate these properties and be required to seek alternative properties for lease or choose to terminate the lease earlier while bearing the penalty for early termination under the lease.

The usage of our leased properties might also be challenged by other various reasons, such as restrictions purposed by laws, regulations or policies based on the nature or usage of certain leased properties. With respect to these properties, if the lessors violate relevant laws and regulations for providing such leased properties to us, and incur penalties by government authorities, we may not lease and use such properties. In such an event, our operations may be interrupted, and we would incur relocation costs. Moreover, if third parties challenge our lease agreements, we could incur time, attention and costs associated with defending such actions, even if such challenges are ultimately determined in our favor.

 ****

***If our promotional and marketing plans are not effective, our business and prospects may be negatively affected.***

We invest in sales and marketing activities to promote our brand and spaces and deepen our relationships with members. We also pay for online advertisements to platforms to sustain our exposure and publicity. To foster our member base, we may offer discounts or other incentives, which incur costs and might not be effective for obtaining new members.

Our members may not appreciate our sales and marketing activities. The evolving marketing landscape may require us to experiment with new marketing methods to keep pace with industry trends and member preferences. Failure to refine our existing marketing approaches or introduce new marketing approaches in a cost-effective manner could reduce our members, occupancy rates and market share.

We also rely on a number of agencies, business partners and our own business development team to attract new members and enlarge our member base. Any disruption of our relationship with these intermediaries could harm our abilities to promote our business. We may not recover the costs of our sales and marketing activities and these activities may not retain or attract members.

 ****

***A significant interruption in the operations of our suppliers could potentially disrupt our operations.***

We partially rely on third-party suppliers for certain equipment, furniture and other fixtures. We also depend on third-party suppliers to provide certain services to facilitate our daily operations, such as security services and maintenance services. We have limited control over the operations of third-party suppliers, and any significant interruption in their operations may adversely impact our operations. For example, a significant interruption in the operations of our internet service provider could impact the operations of our applications, malfunctioning of our security equipment could lead to safety issues of our spaces, and lighting disruptions could result in poor member experience.

Disruptions in the supply chain may result from weather-related events, natural disasters, trade restrictions, tariffs, border controls, acts of war, terrorist attacks, pandemics, third-party strikes or ineffective cross dock operations, work stoppages or slowdowns, shipping capacity constraints, supply or shipping interruptions or other factors beyond our control. If we cannot resolve the impact of the interruptions of operations of our third-party suppliers or service providers, our operations and financial results may be materially and adversely affected.

In some cases, we may rely on a single source for procurement of construction materials or other supplies in a given region. Any disruption in the supply of certain materials could disrupt operations at our existing spaces or significantly delay our opening of a new space, which may harm our reputation and brand.

 ****

 ****

***A large portion of our members are concentrated in major metropolitan areas and certain industries. An economic downturn in any of these areas or industries may result in reduction of our members and adversely affect our results of operations.***

A significant portion of our existing and target member base consists of SMEs who may be disproportionately affected by adverse economic conditions. In addition, the concentration of our operations in specific cities magnifies the risk of localized economic conditions in those cities or the surrounding regions to any business.

In 2023, 2024 and 2025, we generated an important portion of our net revenue from our agile office spaces located in Beijing, Shanghai, Wuhan and Shenzhen. Adverse changes in general economic conditions or real estate markets as well as relevant regulatory environment in these cities may disproportionately affect our member base, occupancy rates and/or pricing.

In addition, our members are concentrated in certain industries, such as the technology, media and telecommunications industries. Adverse changes in those industries may affect the demand for agile office spaces of our members and further affect our operation results. Our business may also be affected by generally prevailing economic conditions in the markets where we operate, which can result in a general decline in real estate activity, reduce demand for occupancy and our services and exert downward pressure on pricing.

 ****

***We face risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt our operations.***

China has experienced significant natural disasters, including earthquakes, extreme weather conditions, as well as health scares related to epidemic or pandemic diseases, and any similar event could materially impact our business in the future. If a disaster or other disruption occurred that affects the regions where we operate our business, the resulting loss of personnel and damage to property could materially and adversely affect our business. Even if we are not directly affected, such a disaster or disruption could affect the operations or financial condition of our ecosystem participants, which could harm our results of operations.

In addition, our business could be affected by public health epidemics, such as the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola virus, COVID-19 or other disease. Any future resurgence of COVID-19 cases or other epidemics in China may lead to temporary interruptions to business operations. There also remain uncertainties surrounding the COVID-19 outbreak, including with respect to the ultimate spread of the virus, the severity and duration of the pandemic and the further actions government authorities may take in response. Our business, results of operations, financial condition and prospects could be materially and adversely affected to the extent that COVID-19 harms the Chinese and global economy in general. See "Item 5. Operating and Financial Review and Prospects — A. Operating Results — Key Factors Affecting Our Results of Operations"

 ****

***Our business and our reputation may be affected if our employees or members of our community or guests who enter our spaces behave badly.***

Our emphasis on our values makes our reputation particularly sensitive to allegations of violations of community rules or applicable laws by employees, members, or guests who enter our spaces. If employees, members or guests violate our policies or engage in illegal or unethical behavior, or are perceived to do so, we may be subject to negative publicity and our reputation may be harmed. This behavior may also lead to existing members ceasing to use our spaces, which would adversely impact occupancy and revenue for the affected spaces.

 ****

***We are exposed to risks relating to our cooperation with our business partners.***

We select and rely on a number of business partners to provide various services such as corporate secretary and human resources, to facilitate more service options and better experience for our members. Due to the reliance on such business partners, any interruption of their operations, any failure of them to accommodate our business scale, any termination or suspension of our partnership arrangements, any change in cooperation terms, or any deterioration of cooperative relationships with them may materially and adversely affect our brand image and impact our operations.

We have limited control over our business partners. Failure by third parties to provide satisfactory services or comply with laws and regulations could subject us to reputational harm based on their association with us and our brand. If we become subject to claims arising from services provided by our business partners, we may attempt to seek compensation from the relevant business partners. However, such compensation may be limited.

If no claim can be asserted against a business partner, or we cannot fully recover amounts claimed from business partners, we may be required to bear such losses and compensation at our own costs. This could materially and adversely affect our business, financial condition and results of operations.

 ****

***We may not effectively identify, pursue and consummate strategic alliances, investments or acquisitions.***

We may from time to time engage in evaluations of, and discussions with, possible domestic and international acquisitions, investments or alliance candidates. We may also make investments in private or public entities, enter into strategic alliances or issue securities through our parent company or subsidiaries.

We may not identify suitable strategic alliances, investment or acquisition opportunities. Even when we identify an appropriate acquisition or investment target, we may not negotiate the acquisition or investment successfully, obtain financing for the proposed transaction, or integrate the relevant businesses into our existing operations.

Since we retain limited control over the companies in which we only have minority stake, we cannot ensure that these companies will always comply with applicable laws and regulations. Non-compliance of regulatory requirements by our investees may cause substantial harm to our reputation and the value of our investment.

In addition, particular complexities, regulatory or otherwise, may be associated with our development into new markets. We may not successfully implement our strategies beyond our current markets. If we cannot effectively address these challenges, our ability to execute acquisitions as part of our long-term strategy will be impaired, which could adversely affect our operations.

 ****

 ****

***We may not achieve the benefits we expect from recent and future investments and acquisitions and our operations may be materially and adversely affected by such investments and acquisitions.***

We have made equity investments in or acquisitions of businesses that we believe may complement our existing business or may improve the experience of our members. We may make future investments in private or public entities, enter into strategic alliances or issue securities through our parent company or subsidiaries.

While we believe those initiatives may benefit our business long term, such decisions may adversely impact our short- or medium-term operating results. Furthermore, if the businesses we acquire or in which we invest do not subsequently achieve the synergies we expect or do not generate the financial and operational benefits we expect, our investments and acquisitions may not benefit our business strategy or generate sufficient revenues to offset the associated investment or acquisition costs.

Investments and acquisitions present financial, managerial and operational challenges, including difficulty in integrating our operations with businesses we acquire or in which we invest, potential disruption of our ongoing business and distraction of management attention and risks associated with offering new products and services or entering additional markets. For example, we invested in or acquired certain construction and decoration services providers and companies that provide value-added services to customers of agile office spaces.

We have limited experience in these new businesses and services and may fail to generate sufficient revenue or other value to justify our investments in these businesses and services. Our members may not respond favorably to our new services and solutions, which could damage our public image and market reputation and adversely affect our business.

In addition, investments and acquisitions could result in significant impairments to long-term investments and other intangible assets. For example, we recognized RMB25.6 million, RMB18.0 million and nil impairment loss on long-term investments in 2023 2024, and 2025, respectively, as we believe the carrying value was no longer recoverable.

 ****

***Certain industry data and information in this annual report were obtained from third-party sources and were not independently verified by us.***

This annual report contains certain industry data and information from third-party sources. We have not independently verified the data and information contained in such third-party publications and reports. Data and information in such third-party publications and reports may use third-party methodologies, which may differ from the data collection methods used by us. In addition, these industry publications and reports generally indicate that the information is believed to be reliable, but do not guarantee the accuracy and completeness of such information.

Statistical data in these publications also include projections based on a number of assumptions. The agile office space industry may not grow at the rates projected by market data, or at all. If any of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions. Material slowdown of the agile office space industry against the projected rates may have materially and adversely affect our business and the market price of our Class A ordinary shares.

 ****

***We may not adequately protect our intellectual property from unauthorized use by others.***

Our trademarks and other intellectual property are critical to our business. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. Risks include the following:

● Our pending applications for intellectual property rights may not be approved;

● Our intellectual property rights may not be adequately protected;

● Our intellectual property rights could be challenged by third parties or found by a judicial authority to be invalid or unenforceable;

● Third parties may claim that we are infringing their rights, and we may not be successful in defending these claims; and

● We may not enforce and defend our proprietary rights or prevent infringement or misappropriation, without substantial expense to us and a significant diversion of management time and attention from our business strategy.

To protect our trademarks and other proprietary rights, we rely and expect to rely on a combination of protective agreements with our team members and third parties (including local or other strategic partners we may do business with), physical and electronic security measures, and trademark, copyright, patent and trade secret protection laws. If the measures we take to protect our proprietary rights do not prevent the use or misappropriation by third parties or such rights are diminished due to successful challenges, the value of our brand and other intangible assets may be diminished, materially and adversely affecting our ability to attract and retain members.

 ****

***The proper functioning of our technology is essential to our business, and any difficulty experienced by such system would materially and adversely affect us.***

We use a combination of proprietary technology and technology from third-party service providers to support our business and our member experience. For example, U Bazaar, which we developed in-house but also incorporates third-party and open-source software where appropriate, connects local spaces and develops and deepens connections among our members, both at a particular space and across our global network.

Third-party service providers may not support our products and services on commercially reasonable terms or at all. We may be subject to claims by third parties who maintain that our service providers' technology infringes the third party's intellectual property rights. Although our agreements with our third-party service providers often contain indemnities in our favor with respect to these eventualities, we may not be indemnified for these claims or we may not be successful in obtaining indemnification to which we are entitled.

If the technologies and systems that we use to manage the daily operations of our business or that we make available to our members malfunction, our ability to operate our business, retain existing members and attract new members may be impaired. We may not attract and retain sufficiently skilled and experienced professionals to operate and maintain these technologies and systems, and our product and service offerings may not continue to be, and new product and service offerings may not be, supported by the applicable third-party service providers on commercially reasonable terms or at all. Any harm to our members' personal computers or other devices caused by our software, such as our apps, or other sources of harm, such as hackers or computer viruses, could adversely affect the member experience and our reputation.

We need to invest heavily on our technology to sustain and develop our business, and the uncertainties associated with the evolving customer needs and emerging industry standards create risks with respect to such investment. Our ongoing investment in technology may not generate the expected level of returns and failure to adopt new technologies to adapt to such changing environment may materially and adversely impact our business.

 ****

***Our business generates and processes a large amount of data. The improper use or disclosure of such data by unauthorized persons could subject us to significant reputational, financial, legal and operational consequences.***

We generate significant amount of proprietary, sensitive and otherwise confidential information relating to our business. We collect and store personal data regarding our members, including member names and billing data in our system. Privacy laws and regulations in PRC and other jurisdictions around the world govern the collection, protection and use of personal data. These laws and regulations are evolving and may be inconsistent from one jurisdiction to another.

Compliance with applicable privacy laws and regulations may lead to increases in our operating costs and adversely impact our ability to conduct our business and market our products and services to our members. Any failure by us or our third-party service providers to comply with applicable privacy laws, privacy policies or privacy-related contractual obligations may result in governmental enforcement actions, fines, litigation, other claims and adverse publicity.

Similar to other companies, our information technology systems face the threat of cyber-attacks, such as security breaches, phishing scams, malware and denial-of-service attacks. Our systems or the systems of third parties that we use could experience unauthorized intrusions or inadvertent data breaches, which could result in the exposure or erosion of our proprietary information and/or members' data. This data is maintained on our own systems as well as the systems of third-party service providers.

As methods used to obtain unauthorized access to systems or sabotage systems change frequently and may not be known until launched against us or the third parties on which we rely, we and our partners may be unable to anticipate these attacks or implement adequate preventative measures. In addition, any party who illegally obtains identification and password credentials could potentially gain unauthorized access to our systems or the systems of third parties on which we rely. If any such event occurs, we may have to spend significant capital and other resources to mitigate the impact of the event and to develop and implement protection to prevent such future events of that nature from occurring.

From time to time, employees make mistakes with respect to security policies that are not always immediately detected by compliance policies and procedures. These can include errors in software implementation or a failure to follow protocols and patch systems. Employee errors, even if promptly discovered and remediated, may disrupt operations or result in unauthorized disclosure of confidential information.

If a cybersecurity incident occurs, or is perceived to occur, we may be the subject of negative publicity and the perception of the effectiveness of our security measures and our reputation may be harmed. This could damage our relationships and result in the loss of existing or potential members. In addition, even if no compromise of member information occurs, we could incur significant fines or lose the opportunity to support electronic payments from members, which would limit the full effectiveness and efficiency of our payment processing.

 ****

***The wide variety of payment methods that we accept subjects us to third-party payment processing-related risks.***

We accept a variety of payment methods including WeChat Pay and Alipay through third-party payment processors. We pay these payment processors varying service fees, which may increase over time and raise our operating costs. We may also be subject to fraud, security breaches and other illegal activities in connection with the payment methods we offer.

We are subject to various rules, regulations and requirements, regulatory or otherwise, governing payment processing, which could change or be reinterpreted to make it difficult or impossible for us to comply with. For example, according to Announcement No.10 (2018) of the People's Bank of China issued in July 2018 ("Announcement No.10"), companies that refuse to accept cash payment should rectify such non-compliance. According to People's Bank of China's interpretation of Announcement No.10, e-commence platforms, self-service counters and other companies:

● that offer products and services online and in a cashier-less manner,

● whose entire customer purchase process does not involve payment or receipt of cash, and

● who have obtained consent from customers to use electronic payment methods, may use electronic payment methods instead of accepting cash.

We believe that our cashier-less operation complies with Announcement No. 10. However, governmental authorities may not have the same interpretation. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees or no longer be able to offer certain payment methods, materially and adversely affecting our business, financial condition and results of operations.

 ****

 ****

***We may experience significant complaints from members, or adverse publicity involving our spaces and services.***

We face an inherent risk of complaints from our members. Most of the complaints from our members related to the facilities and services of our spaces. We take these complaints seriously and endeavor to reduce these complaints by implementing various remedial measures. Nevertheless, we may not successfully prevent or address all complaints.

Any complaints or claims against us, even if meritless and unsuccessful, may divert management attention and other resources from our business and adversely affect our business. Members may lose confidence in us and our brand, which may adversely affect our business and results of operations. Furthermore, negative publicity including but not limited to negative online reviews on social media and crowd-sourced review platforms, industry findings or media reports related to agile office spaces industry, whether or not accurate, and whether or not concerning our spaces, can adversely affect our business, results of operations and reputation.

 ****

***Pending or future litigation could have a material and adverse impact on our business, financial condition and results of operations.***

We are subject to lawsuits from our competitors, individuals, or other entities against us, in matters relating to intellectual property rights and contractual disputes. The outcomes of actions we institute may not be successful or favorable to us. Lawsuits against us may also generate negative publicity that significantly harms our reputation, which may adversely affect our ability to develop our member base. In addition to the related cost, managing and defending litigation and related indemnity obligations can significantly divert management's attention from operating our business. We may also need to pay damages or settle lawsuits with a substantial amount of cash.

As a publicly listed company, we may face additional exposure to claims and lawsuits. These claims could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merits of the claims. In some instances, we may elect or be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims, which could harm our business, financial condition and results of operations.

 ****

***Share-based compensation may have an impact on our future profit. Exercise of the share options granted will increase the number of our Class A ordinary shares, which may affect the market price of our Class A ordinary shares.***

The Parent adopted share incentive plans in August 2019 and November 2020, which we respectively refer to as 2019 Plan and 2020 Plan in this annual report, to enhance our ability to attract and retain qualified individuals and align their interests with our operations and performance. The maximum aggregate numbers of ordinary shares we are authorized to issue pursuant to all awards under 2019 Plan are 15,028,567 ordinary shares (62,620 ordinary shares after retroactively adjusted to reflect the 20-to-1 share consolidation effected on April 21, 2022 and the 12-to-1 share consolidation effected on November 29, 2023). In November 2020, the Parent adopted the 2020 Plan, under which the Parent is authorized to issue a maximum number of 7,188,661 Class A ordinary shares (29,953 Class A ordinary shares after retroactively adjusted to reflect the 20-to-1 share consolidation effected on April 21, 2022 and the 12-to-1 share consolidation effected on November 29, 2023). Pursuant to the 2020 Plan, as amended and restated in May 2021, August 2022, December 2023, February 2024 and August 2025, the maximum aggregate number of shares that may be issued is 4,071,620 Class A ordinary shares, plus an automatic replenishment to 2,000,000 Class A ordinary shares under the circumstance where the total number of Class A ordinary shares which may be issuable pursuant to the awards granted under the 2020 Plan are less than 200,000. As of the date of this annual report, options to purchase an aggregate number of 267,302 Class A ordinary shares were granted and outstanding, including awards to purchase 19,013 Class A ordinary shares granted to replace the granted and outstanding awards under 2019 Plan.

We believe the granting of share-based awards helps us attract and retain key personnel and employees, and we expect to grant share-based compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.

 ****

 ****

***A severe or prolonged downturn in the PRC or global economy could materially and adversely affect our business and our financial condition.***

The global macroeconomic environment is facing challenges. Uncertainties remain over the long-term effects of the monetary and fiscal policies of the central banks and financial authorities of some of the world's leading economies, including the United States and China. Unrest and terrorist threats in the Middle East, Europe and Africa and conflicts involving Ukraine, Syria and North Korea have also raised concerns. These concerns relate to regional instability and tension, as well as the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes, and the trade disputes between the United States and China.

For example, a growing trade dispute between the United States and China could adversely impact demand for our agile office spaces and services, our costs, our members, suppliers and business partners and China's economy, which could materially and adversely affect our business, operating results and financial condition. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term.

Economic conditions in China are sensitive to global economic conditions, changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. While the economy in China has grown significantly over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China's economy remained relatively stable, China's economic growth may materially decline in the near future. Any severe or prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial condition.

 ****

***If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our Class A ordinary shares may be materially and adversely affected.***

In connection with the preparation and external audits of its consolidated financial statements included in this annual report, we identified the following material weaknesses in our internal control over financial reporting. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. The material weaknesses that have been identified relate to:

● A lack of proper management approval and review on borrowing contract over certain amount,

● Insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP, and

● A lack of proper management approval and review on agency fee contract over certain amount.

As defined in the standards established by the PCAOB, a "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

To remedy the identified material weaknesses, we have adopted and will adopt further measures to improve our internal control over financial reporting. We plan to improve our management approval on all borrowing contracts over certain amount, and to enhance management review control over borrowing related accounting treatment by conducting monthly accounting record inspection. We plan to recruit staff with knowledge of U.S. GAAP and SEC regulations in our finance and accounting department. We also plan to enhance internal training and development programs for financial reporting personnel. When entering into complex transactions, we plan to utilize third-party consultant for accounting services as additional resources. We also plan to enhance the agency fee management review and approval process over certain amount and carry out integrity and compliance education and training within the Company. See "Item 15. Controls and Procedures — Internal Control Over Financial Reporting." However, we cannot assure you that these measures may fully address the material weaknesses and deficiencies in our internal control over financial reporting or that we may conclude that they have been fully remediated.

The Parent is subject to the Sarbanes-Oxley Act of 2002. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404"), we have included a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F for the year ended December 31, 2025. Based on the assessment, our management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025. In addition, once the Parent ceases to be a "non-accelerated filer" as defined under Rule 12b-2 of the Exchange Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. As such, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an adverse opinion on the effectiveness of internal control over financial reporting if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. Our reporting obligations may significantly strain our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

In documenting and testing our internal control procedures, to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. If we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended, we may not conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Our failure to achieve and maintain an effective internal control environment could result in material misstatements in our financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our businesses, financial condition, results of operations and prospects, as well as the trading price of the Class A ordinary shares, may be materially and adversely affected. Ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from Nasdaq, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

 ****

***If the interpretations, estimates or judgments used to prepare our financial statements are incorrect, we may restate our financial results, which could materially and adversely affect us.***

We are subject to complex securities laws and regulations and accounting principles and interpretations. In preparing our financial statements, we must interpret accounting principles and guidance and make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements, as well as the reported expenses incurred during the reporting periods. We base our interpretations, estimates and judgments on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for the preparation of our financial statements.

Generally accepted accounting principles are subject to interpretation by the SEC, the Financial Accounting Standards Board and other bodies that create and interpret accounting principles and guidance. If any of these bodies disagrees with our accounting recognition, measurement or disclosure or our accounting interpretations, estimates or assumptions, this may significantly affect our reported results and may retroactively affect previously reported results.

In connection with its initial public offering, our predecessor company, Orisun Acquisition Corp. ("Orisun"), a special purpose acquisition company, issued 4,440,024 public warrants (the "Public Warrants"), 233,201 private placement warrants (the "Private Warrants"), and 333,002 warrants underlying a unit purchase option issued to the representative of the underwriters in the initial public offering (the "Representative Warrants," and together with the Public Warrants and Private Warrants, the "Orisun Warrants"). For a description of the Orisun Warrants, please refer to (1) the prospectus filed in connection with Orisun's initial public offering on August 5, 2019 (File No. 333-232356) and (2) the proxy statement filed in connection with the Business Combination on November 5, 2020 (File No. 333- 248191) (the "Proxy Statement").

Orisun originally classified the Orisun Warrants as equity in its (1) audited consolidated balance sheet as of December 31, 2019, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes included in its Annual Report on Form 10-K filed on March 30, 2020, and (2) unaudited consolidated balance sheet as of June 30, 2020, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the six months then ended, and the related notes included in the Proxy Statement.

On April 12, 2021, the Staff of the SEC released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the "Statement"). In the Statement, the Staff of the SEC indicated that certain contractual provisions in many special purpose acquisition company warrant agreements may result in such warrants needing to be classified as a liability rather than as equity.

We have reviewed the Statement and the Orisun Warrants with our independent auditors and management has concluded that the Private Warrants should be classified as liabilities measured at fair value, which will result in noncash gains or losses from changes in fair value reported each period in earnings. Additional guidance or new regulations or accounting principles and interpretations could be released that would require us to reclassify the Public Warrants and Representative Warrants as liabilities measured at fair value, with changes in fair value reported each period in earnings and/or require a restatement of our financial statements with respect to treatment of the Public Warrants and Representative Warrants.

Any restatement of our financial results could, among other potential adverse effects:

● result in us incurring substantial costs;

● affect our ability to timely file our periodic reports or registration statements for securities until the restatement is completed;

● divert the attention of our management and employees from managing our business;

● result in material changes to our historical and future financial results;

● result in investors losing confidence in our operating results;

● subject us to securities class action litigation; and

● cause our share price to decline.

 **

***We may not be able to detect or prevent misconduct committed by our employees or third parties.***

 **

Misconduct by our employees, such as unauthorized business transactions, corruption and breach of our internal policies and procedures, or by other third parties, such as breach of law, may be difficult to detect or prevent. It could subject us to financial loss while seriously damaging our reputation. This may also impair our ability to effectively attract prospective users, develop customer loyalty, obtain financing on favorable terms and conduct other business activities. Our risk management systems and internal control procedures are designed to monitor our operations and overall compliance. However, there can be no assurance we will be able to identify non-compliance or illegal activities promptly, or at all.

Historically we have identified certain incidents of employee and third-party misconduct, in response to which we have undertaken internal review and remedial measures. See "Item 15. Controls and Procedures — Internal Control Over Financial Reporting." and "Notes to Consolidated Statements — Note 3. Revision to Prior Period Financial Statements." Any misconduct committed by our employees or third parties and our inability to detect and prevent such misconduct may materially and adversely affect our business, brand, financial condition and results of operations.

 ****

***We have limited insurance coverage for our operations.***

The insurance industry in China remains at an early stage of development, and insurance companies in China currently offer limited business-related insurance products. Although we have purchased insurances including business disruption insurance and property insurance for our space, those insurances might not be able to cover all risks. Any uninsured risks may result in substantial costs and the diversion of resources, which could adversely affect our results of operations and financial condition.

***Heightened tensions in international relations and any resulting changes in international trade policies may adversely impact our business, financial condition, and results of operations.***

 ****

Recently there have been heightened tensions in international relations, particularly between the United States and China. These tensions have resulted in changes in international trade policies and, as they further escalate, may result in additional barriers to trade. Countries impose, modify, and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which contribute to the volatile nature of tariffs and other trade restrictions.

The Trump Administration has announced its desire to use tariffs as a tool to strengthen the U.S. economy and industrial sector, as well as leverage to negotiate trade relations with other countries. The Trump Administration has especially targeted China with trade measures, steadily increasing the tariffs on Chinese goods entering the United States during the first few months of Donald Trump's presidency, reaching an effective rate of 145% on April 9, 2025. Any Section 301 duties and antidumping or countervailing duties would be added on top of this figure. China has responded to these tariffs with an array of measures, including by imposing an effective tariff rate of 125% on U.S. products entering its borders, effective April 10, 2025. China is not the only country whose imports have been targeted by the Trump Administration's rising tariffs. In addition to the tariffs imposed on Canadian and Mexican imports based on concerns over fentanyl and illegal immigration, President Trump has also imposed a 10% "baseline" tariff on all countries, effective April 5, 2025, and proposed to impose country-specific "reciprocal tariffs" on 60 countries. These tariffs are cumulative with tariffs already in effect or recently announced by the Trump Administration, and would result in an effective tariff rate of upwards of 50% on certain goods imported into the United States if the reciprocal tariffs become effective.

This has led to, and may lead to further, retaliatory tariffs against the United States by Canada, Mexico, the European Union, and other jurisdictions. As a result, global trade tensions have heightened substantially may escalate even further, which may materially and adversely affect global trade and global economic conditions. There is significant uncertainty about the future relationship between the United States and China and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs, which has led to concerns regarding the potential for an extended trade war. Heightened tensions among the United States, China, or other countries where we may operate, could reduce or restrict the levels of trade, investments, technological exchanges, and other economic activities between such countries. The existing tensions and any further deterioration in the relationship between such countries may have a negative impact on the general, economic, political, and social conditions in the markets where we operate and could adversely impact our business, financial condition, and results of operations.

In addition, geopolitical tensions may intensify and the United States, China, or other countries may adopt drastic measures in the future that further impact our global business operations. Recent legislative activities in the U.S. regarding a number of technology companies with significant Chinese operations have raised concerns as to whether the U.S. may expand the regulatory challenges and restrictions to other technology companies with significant Chinese operations. Similar or more expansive restrictions that may be imposed by the United States or other jurisdictions in the future, could materially and adversely affect our business. The adoption or expansion of restrictions, including restrictions or complete bans on access to apps and other platforms, cross-border data transfers, or other governmental action, has the potential to adversely impact our business, operational results and financial position. For example, on October 28, 2024, the U.S. Department of the Treasury issued a final rule on outbound investment, or the Outbound Rule, to implement Executive Order 14105, *Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern* (Aug. 9, 2023). The Outbound Rule, which came into effect on January 2, 2025, imposes investment prohibition and notification requirements on U.S. persons for a wide range of investments in entities associated with China (including Hong Kong and Macau), collectively defined as "Covered Foreign Persons," that are engaged in activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems. U.S. persons subject to the Final Rule are prohibited from making, or required to report, certain investments in Covered Foreign Persons, which are defined as "covered transactions." If we were to be deemed a "Covered Foreign Person" under the Outbound Rule, our ability to raise capital would be significantly and negatively affected. Additionally, the trading price of our securities may be materially and adversely affected, and the value of our securities may decline significantly. The Trump Administration has expressed a potential interest in expanding the scope of the Outbound Rule, which may further impact our business.

**Risks Relating to Our Corporate Structure**

 ****

***We rely on contractual arrangements with the VIEs and their shareholders for a large portion of our operations. These arrangements may not be as effective as direct ownership in providing operational control. Any failure by the VIEs or their shareholders to perform their obligations under these contractual arrangements would materially and adversely affect our business.***

We rely on contractual arrangements with the VIEs and their shareholders to operate our business in China. The revenues contributed by the VIEs constituted most of our net revenue for 2023, 2024 and 2025.

These contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs. For example, the VIEs and their shareholders could breach their contractual arrangements with the WFOEs by, among other things, failing to conduct their operations in an acceptable manner or taking other actions detrimental to our interests. If we had direct ownership of the VIEs, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.

However, under our contractual arrangements, the Parent relies on the performance by the VIEs and their shareholders of their obligations under the contracts to be the primary beneficiary of the VIEs for accounting purposes. The shareholders of the consolidated VIEs may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the contractual arrangements with the VIEs.

If the VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may incur substantial costs and expend additional resources to enforce such arrangements. If the shareholders of the VIEs refuse to transfer their equity interest in the VIEs to the WFOEs or the WFOEs' designee if the WFOEs exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith, then we may have to take legal actions to compel the shareholders of the VIEs to perform their contractual obligations.

If any third parties claim any interest in such shareholders' equity interests in the VIEs, the WFOEs' ability to exercise shareholders' rights or foreclose the share pledge according to the contractual arrangements may be impaired. If these or other disputes between the shareholders of the VIEs and third parties were to impair our contractual arrangements with the VIEs, the Parent's ability to consolidate the financial results of the VIEs would be affected, which would in turn materially and adversely affect our business, operations and financial condition.

 ****

***The shareholders of the VIEs may have actual or potential conflicts of interest with the Parent, our subsidiaries and the VIEs, which may materially and adversely affect our business and financial condition.***

We are not aware of any conflicts between the shareholders of the VIEs and the Parent, our subsidiaries and the VIEs. However, the shareholders of the VIEs may have actual or potential conflicts of interest with the Parent, our subsidiaries or the VIEs in the future. These shareholders may refuse to sign or breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements the WFOEs have with them and the VIEs, which would materially and adversely affect our contractual arrangements with the VIEs and receive economic benefits from them. For example, the shareholders could cause our agreements with the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis.

We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor. We do not have any arrangements to address potential conflicts of interest between these shareholders and our company. If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

 ****

***Our contractual arrangements are governed by PRC law. These contracts are interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures.***

Our contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from the contractual arrangements will be resolved through arbitration in China. We may face uncertainties in enforcing the contractual arrangements. Meanwhile, very limited precedents and formal guidance exist as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law. There remain uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary.

Under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts except that parties may apply for a cancellation of such rulings before an intermediate people's court at the place where the arbitration commission is located under certain circumstances. If the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts, which would require additional expenses and delay. If we are unable to enforce these contractual arrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements, our ability to conduct our business would be negatively affected.

 ****

***Substantial uncertainties in the PRC foreign investment legal regime may significantly impact our corporate structure and operations.***

On March 15, 2019, the PRC National People's Congress adopted the Foreign Investment Law, which came into effect as of January 1, 2020 and replaced the existing laws regulating foreign investment in the PRC: the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Invested Enterprise Law. As a result, the Foreign Investment law became the legal foundation for foreign investment in the PRC. The Implementation Regulation of the Foreign Investment Law came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the Foreign Investment Law.

The Foreign Investment Law stipulates three forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate the contractual arrangements as a form of foreign investment. The Foreign Investment Law stipulates that foreign investment includes "foreign investors invest through any other methods under laws, administrative regulations or provisions prescribed by the State Council."

Future laws, administrative regulations or provisions prescribed by the State Council may regard contractual arrangements as a form of foreign investment, and whether our contractual arrangement will be recognized as foreign investment, whether our contractual arrangement will be deemed to be in violation of the foreign investment access requirements and how the above-mentioned contractual arrangement will be handled are uncertain. We may ultimately need to unwind the contractual arrangements and/or dispose of the VIEs or their subsidiaries, which could have a material and adverse effect on our business, financial condition and results of operations.

 ****

***Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.***

Under PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm's-length basis. This could result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIEs in the form of a transfer pricing adjustment.

A transfer pricing adjustment could result in a reduction of expense deductions recorded by the VIEs for PRC tax purposes, which could in turn increase their tax liabilities without reducing our PRC subsidiaries' tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIEs for the adjusted but unpaid taxes under applicable regulations. Our financial position could be materially and adversely affected if the tax liabilities of the VIEs increase or if they are required to pay late payment fees and other penalties.

 ****

***The Parent and our subsidiaries may lose the ability to use, or otherwise benefit from, the licenses, approvals and assets held by the VIEs, which could severely disrupt our business, render us unable to conduct some or all of our business and constrain our development.***

The Parent and our subsidiaries rely on contractual arrangements with the VIEs to use, or otherwise benefit from, certain foreign restricted licenses and permits that we need or may need in the future as our business continues to develop, such as the internet content provider license (the "ICP license") held by one of the VIEs.

The contractual arrangements contain terms that obligate the VIEs' shareholders to ensure the valid existence of the VIEs and restrict the disposal of material assets of the VIEs. If the VIEs' shareholders breach these contractual arrangements and voluntarily liquidate the VIEs, or the VIEs declare bankruptcy and all or part of their assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent, we may be unable to conduct some or all of our business or otherwise benefit from the assets held by the VIEs.

If the VIEs undergo a voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all of the assets of the VIEs, hindering our ability to operate our business and constrain our development. The foregoing risks could materially and adversely affect our business, financial condition and results of operations.

 ****

 ****

***The Parent's dual-class share structure with different voting rights may adversely affect the value and liquidity of the Class A ordinary shares.***

We cannot predict whether the Parent's dual-class share structure with different voting rights will result in a lower or more volatile market price of the Class A ordinary shares, in adverse publicity, or other adverse consequences. Certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. For example, in July 2017, FTSE Russell announced that it plans to require new constituents of its indices to have greater than 5% of the company's voting rights in the hands of public stockholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indices.

In 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices. In October 2018, MSCI announced its decision to include equity securities "with unequal voting structures" in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Because of the Parent's dual-class structure, we will likely be excluded from these indices and other stock indices that take similar actions.

Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A ordinary shares less attractive to investors. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures and the Parent's dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance, adversely affecting the market price and liquidity of the Class A ordinary shares.

 ****

***The Parent's dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of the Parent's Class A ordinary shares may view as beneficial.***

The Parent has adopted a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. In respect of matters requiring the votes of shareholders, each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to 170 votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. The Parent's dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that you, as the holders of the Parent's Class A ordinary shares, may view as beneficial.

 ****

***Certain of the existing shareholders of the Parent have substantial influence over our company, and their interests may not be aligned with the interests of our other stockholders.***

Dr. Daqing Mao, our founder, and his wife, Angela Bai, together hold approximately 82.08% of the voting power of our company as of February 28, 2026 due to the Parent's dual-class share structure. For more information, see "Item 6. Directors, Senior Management and Employees — E. Share Ownership." Dr. Mao is expected to retain significant influence over our business, including decisions regarding mergers, consolidations, liquidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions.

This concentration of ownership may also discourage, delay or prevent a future change of control, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our Class A ordinary shares. Dr. Mao may pursue corporate opportunities independent of us, and the sale of his shares could constitute a change of control under our debt instruments.

 ****

 ****

***You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.***

Our ultimate holding company is the Parent which is an exempted company incorporated under the laws of the Cayman Islands. The Parent's corporate affairs are governed by its memorandum and articles of association, as amended and restated from time to time, the Companies Act (As Revised) of the Cayman Islands (the "Companies Act") and the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands.

The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands have a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standings to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies such as ours have no general rights under Cayman Islands law to inspect or to obtain corporate records or copies of register of members of these companies (except for our memorandum and articles of association, special resolutions which have been passed by our shareholders and our register of mortgages and charges). Under Cayman Islands law, the names of current directors can be obtained from a search conducted at the Registrar of Companies in the Cayman Islands. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Our Class A ordinary shares are listed in Nasdaq Capital Market. As a result, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, users of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in the United States and their shareholders, see "Item 10. Additional Information — B. Memorandum and Articles of Association — Differences in Corporate Law."

 ****

***Certain judgments obtained against us by our shareholders may not be enforceable.***

Our ultimate holding company is incorporated under the laws of the Cayman Islands. We have most of our operations in China and substantially all of our operations are outside of the United States. Most of our assets are located in China, and substantially all of our assets are located outside of the United States. In addition, all our senior executive officers reside within China for a significant portion of the time and most are PRC nationals. Substantially all of the assets of these persons are located outside the United States.

As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States if your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and China, see "Enforceability of Civil Liabilities." section, which is in the registration statement on Form F-1 on Form F-3 (File No. 333-257664), as amended, filed with the SEC.

**Risks Relating to Doing Business in China**

 ****

***Changes in China's economic, political or social conditions or government policies could materially and adversely affect our business.***

Substantially all of our assets and operations are in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally.

In recent years, the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises. Meanwhile, the government still owns a substantial portion of productive assets in China. In addition, the Chinese government plays a significant role in regulating industry development through industrial policies. The Chinese government also exercises significant control over China's economic growth by allocating resources, setting monetary policy and providing preferential treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could materially and adversely affect the overall economic growth of China. Such developments could adversely affect our business and operating results, reducing demand for our services and adversely affecting our competitive position.

The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.

In the past the Chinese government has implemented certain measures, including interest rate adjustments, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results. In addition, since many of our members are concentrated in major metropolitan areas, an economic downturn in any of these areas may materially and adversely affect our business.

 ****

***Uncertainties with respect to the PRC legal system could adversely affect us.***

We face risks arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance notice.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. Since the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation since then has significantly enhanced the protection afforded to various forms of foreign investments in China. However, these laws and regulations may not sufficiently cover all aspects of economic activities in China. In addition, as many of these laws and regulations are relatively new and continue to evolve, the interpretation and enforcement of them involve uncertainties. Moreover, the implementation of new rules, laws and regulations may significantly affect the industry in which we operate, which could affect the value of our securities, such as causing our securities to significantly decline in value or become worthless.

The interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we obtain. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. We may not be aware of our violation of any of government policies and rules until after the violation occurs. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. As a result, we cannot assure you that sufficient legal protection as anticipated would be available to you and us.

 ****

 ****

***The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A ordinary shares.***

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Government actions in the future could significantly affect economic conditions in China or particular regions thereof, and could require us to materially change our operating activities or divest ourselves of any interests we hold in Chinese assets. Our business may be subject to various government and regulatory interference in the provinces in which we operate. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.

Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law (the "Opinions"), which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-related overseas listed companies. As of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection with the Opinions.

On June 10, 2021, the Standing Committee of the National People's Congress of China (the "SCNPC"), promulgated the PRC Data Security Law, which became effective in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

In early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that are listed in the United States. The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company's app be removed from smartphone app stores. On July 5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other internet platforms, China's Full Truck Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and Boss of KANZHUN LIMITED (Nasdaq: BZ).

On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure (the "Regulations"), which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the "Personal Information Protection Law"), which became effective in November 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (1) an individual's consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (2) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and the impact on the individual's rights, and (3) where personal information operators reject an individual's request to exercise his or her rights, the individual may file a lawsuit with a People's Court.

On January 1, 2025, the State Council promulgated the Regulations on the Administration of Cyber Data Security (the "Regulation"). The Regulation is not only the first at the administrative regulation level specifically for cyber data security, but it also serves as a comprehensive implementing regulation for the compliance requirements set out by the Cybersecurity Law, Cyber Security Law, and Personal Information Protection Law. The Regulations introduces several key obligations, including requiring network data handlers to specify the purpose and method of personal information processing, as well as the types of personal information involved, before any personal information is handled. It also establishes broader contractual requirements for data sharing between data handlers.

On December 28, 2021, the CAC, jointly with other 12 governmental authorities, promulgated the revised Cybersecurity Review Measures, which became effective on February 15, 2022. According to the Cybersecurity Review Measures, critical information infrastructure operators that intend to purchase internet products and services which may have an adverse effect on national security must apply for cybersecurity review. Meanwhile, online platform operators holding personal information of over one million users that intend to list their securities on a foreign stock exchange must apply for cybersecurity review.

Given that the above mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, their interpretation, application and enforcement are subject to substantial uncertainties. We are of the view that such requirement for cybersecurity review under the Cybersecurity Review Measures, are not applicable to us, primarily because, as of the date of the annual report: (1) we have not received any notice or determination from competent PRC governmental authorities identifying us as a critical information infrastructure operator; (2) we do not hold or process personal information of over one million users; and (3) we have not received any investigation, notice, warning, or sanctions from applicable government authorities in relation to national security. However, the relevant PRC government agencies could reach a different conclusion, applicable laws, regulations or interpretations could change and we could be required to obtain such approvals in the future.

See "— We may be liable for improper use or appropriation of personal information provided by our customers" and "— Recent regulatory development in China may exert more oversight and control over listings and offerings that are conducted overseas. The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing."

***If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future our securities may decline in value or become worthless.***

We face material risks relating to our corporate structure. Investors in our Class A ordinary shares are not purchasing equity interests in the consolidated VIEs domiciled in China but instead are purchasing equity interests in the Parent, our ultimate Cayman Islands holding company. The Parent is not a Chinese operating company but a Cayman Islands holding company with operations conducted by our subsidiaries and through contractual arrangements with VIEs based in China, and this structure involves unique risks to investors. The VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies, and investors may never hold equity interests in the Chinese operating companies. Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in VATSs and certain other businesses. We currently conduct our VATS business through Beijing U Bazaar, including value-added online services for our members. The VIE structure would afford us greater flexibility in developing our business scope and implementing our business strategies in compliance with PRC laws and regulations in the future as our business develops. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. If the PRC government deems that our contractual arrangements with the consolidated VIEs domiciled in China do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.

The Parent, our subsidiaries and our investors do not have an equity ownership in, direct foreign investment in, or control through such ownership or investment of the VIEs. The contractual arrangements with respect to the VIEs are not equivalent to an equity ownership in the business of the VIEs. Any references in this annual report to control or benefits that accrue to us because of the VIEs are limited to, and subject to conditions for consolidation of, the VIEs under U.S. GAAP. Consolidation of VIEs under U.S. GAAP generally occurs if the Parent or our subsidiaries (1) have an economic interest in the VIEs that provides significant exposure to potential losses or benefits from the VIEs and (2) have power over the most significant economic activities of the VIEs. For accounting purposes, the Parent will be the primary beneficiary of the VIEs. In addition, the contractual agreements governing the VIEs have not been tested in a court of law.

It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. PRC regulatory authorities could disallow this structure, which would materially and adversely affect our operations and the value of our Class A ordinary shares, and could cause the value of such securities to significantly decline or become worthless. If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, our securities may decline in value or become worthless. In addition, to the extent cash is located in the PRC or within a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations placed on us by the PRC government. To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of the Parent, our subsidiaries or the VIEs by the PRC government to transfer cash. See "— Risks Relating to our Corporate Structure."

 ****

***Regulation and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us to liability for information displayed on our website.***

The PRC government has adopted regulations governing internet access and the distribution of news and other information over the internet. Under these regulations, internet content providers and internet publishers may not post or display over the internet content that, among other things, violates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene, superstitious, fraudulent or defamatory. Failure to comply with these requirements may result in the revocation of licenses to provide internet content and other licenses, and the closure of the concerned websites or other internet platforms.

The website or platform operator may also be held liable for such censored information displayed on or linked to the websites or platforms. If our website or internet platform violates any such requirements, we may be penalized by relevant authorities, and our operations or reputation could be adversely affected.

***Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.***

The conversion of Renminbi into foreign currencies, including U.S. dollar, is based on rates set by the People's Bank of China. Renminbi has fluctuated against U.S. dollar and other currencies, at times significantly and unpredictably. The value of Renminbi against U.S. dollar and other currencies may fluctuate due to changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces, international relations especially the trade tensions between U.S. and China, or government policies of PRC or U.S. may impact the exchange rate between Renminbi and U.S. dollar.

A significant majority of our net revenue and costs are denominated in Renminbi. The Parent is a holding company and relies on dividends paid by our subsidiaries in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the ordinary shares in U.S. dollars. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our Renminbi into U.S. dollars to make payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would negatively affect the U.S. dollar amount.

 ****

 ****

***Any lack of requisite approvals, licenses or permits applicable to our business may materially and adversely affect our business, financial condition and results of operations.***

In accordance with the laws and regulations in jurisdictions in which we operate, we must maintain various approvals, licenses and permits to operate our business, including but not limited to business license, fire prevention as-built acceptance check and filing for our spaces, and value-added telecommunications license and other approvals, licenses and permits. These approvals, licenses and permits require satisfactory compliance with, among other things, the applicable laws and regulations.

Based on PRC laws and regulations in effect as of the date of this annual report and the legal advice of our PRC legal counsel, Jingtian & Gongcheng, and subject to different interpretations of these laws and regulations that may be adopted by PRC authorities, our subsidiaries and the VIEs have obtained the following licenses and approvals necessary to operate in China as of the date of this annual report: (1) each of our subsidiaries and the VIEs has obtained a business license; (2) Beijing U Bazaar, through which we conduct our VATS business, including value-added online services for our members, has obtained a value-added telecommunications license for internet information service and online data processing and transactions, a license for radio and television program production and a license for internet cultural operation; (3) Beijing Bianbian You International Cultural and Tourism Development Co., Ltd, which engages in tourism business, has obtained a travel agency business operation license; and (4) most of our self-operated model spaces have completed the required as-built acceptance check on fire prevention or fire safety filing. However, a small number our self-operated model spaces have not completed such as-built acceptance check on fire prevention or fire safety filing.

We cannot assure you that our subsidiaries and the VIEs will be able to maintain existing licenses, permits and approvals or that the government authorities will not subsequently require our subsidiaries and the VIEs to obtain any additional licenses, permit and approvals. If our subsidiaries and the VIEs fail to obtain the necessary licenses, permits and approvals or inadvertently conclude that any permissions or approvals are not required, or if applicable laws, regulations, or interpretations change and our subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, our subsidiaries and the VIEs may be subject to fines, confiscation of revenues generated from incompliant operations or the suspension of relevant operations. Our subsidiaries and the VIEs may also experience adverse publicity arising from such non-compliance with government regulations that negatively impact our brand. Our subsidiaries and the VIEs may experience difficulties or failures in obtaining the necessary approvals, licenses and permits for new spaces or new service offerings.

If our subsidiaries and the VIEs fail to obtain the material licenses, our business plans may be delayed. In addition, our subsidiaries and the VIEs may not obtain, renew and/or convert all of the approvals, licenses and permits required for our existing business upon their expiration in a timely manner or at all, which could adversely affect our operations.

A small number of spaces under of our self-operated model have not completed the required as-built acceptance check on fire prevention or fire safety filing. Our spaces that fail to complete such as-built acceptance check on fire prevention as required by relevant laws and regulations may be ordered by the relevant government authorities to cease business. As a result, we may be subject to fines ranging from RMB30,000 to RMB300,000 per space, and our spaces that fail to complete such fire safety filing as required may be subject to fines of up to RMB5,000 per space.

Based on relevant laws and regulations and our consultation with relevant government authorities, and as advised by our PRC counsel, the maximum amount of potential fines arising from the incompletion of the required as-built acceptance check on fire prevention and fire safety filing is approximately RMB0.6 million, as of the date of this annual report. However, we have not received any material fines or penalties for such non-compliance.

We have taken several steps to strengthen our management over fire prevention or fire safety, including:

● consulting with local regulatory authorities for completing the required as built acceptance checks on fire prevention or fire safety filings;

● equipping the relevant spaces with proper fire safety facilities, equipment and safety signs;

● engaging several fire safety consulting institutions to conduct fire safety inspection on the fire safety equipment and system of the -relevant spaces; and

● implementing our fire safety internal control policy in accordance with applicable laws and regulations and providing fire safety related training to our employees.

 ****

***The custodians or authorized users of our controlling non-tangible assets, including stamps and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.***

Under PRC law, legal documents for corporate transactions, including agreements and contracts, are executed using the stamps or seals of the signing entity or with the signature of a legal representative whose designation is registered and filed with relevant PRC industry and commerce authorities. To secure the use of our stamps and seals, we have established internal control procedures and rules for using these stamps and seals.

When we use the stamps and seals, responsible personnel will apply through our office automation system and authorized employees will verify and approve the application in accordance with our internal control procedures and rules. In order to maintain the physical security of our stamps, we generally store them in secured locations accessible only to authorized employees.

Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. Our employees could abuse their authority by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries or consolidated VIEs. If any employee obtains, misuses or misappropriates our stamps and seals or other controlling non-tangible assets, we could experience disruption to our operations, and we may have to take corporate or legal actions, which could involve significant time and resources to resolve and divert management from our operations.

 ****

***Our operations depend on the performance of the mobile based systems, telecommunications networks and digital infrastructure in China.***

Our operations rely heavily on mobile based systems, telecommunications networks and digital infrastructure. Almost all access to the internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology ("MIIT"). We primarily rely on a limited number of telecommunication service providers to provide data communications capacity through local telecommunications lines and internet data centers to host our servers.

We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China's internet infrastructure or the fixed telecommunications networks provided by telecommunications service providers. With the development of our business, we may need to upgrade our technology and infrastructure to keep up with the increasing traffic on our apps. The digital infrastructure and the telecommunications networks in China may not support the demands associated with the growth in digital usage.

In addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pay for telecommunications and digital services rise significantly, our results of operations may be materially and adversely affected. Furthermore, if data access fees or other charges to mobile members increase, our member traffic may decline and our business may be harmed.

 ****

 ****

***We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business.***

Our ultimate Cayman Islands holding company, the Parent, relies principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt we may incur.

Our PRC subsidiaries' ability to distribute dividends is based upon their distributable earnings. PRC regulations permit a PRC subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries and the VIEs is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.

Each of our PRC subsidiaries as a Foreign Invested Enterprise ("FIE"), is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at its discretion. These reserves are not distributable as cash dividends.

If our PRC subsidiaries incur debt in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries to distribute dividends or other payments to their shareholders could materially and adversely limit our ability to develop, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.

 ****

***PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of securities offerings, to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and develop our business.***

Any funds we transfer to our PRC subsidiaries, either as shareholder loans or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on FIEs in China, capital contributions to our PRC subsidiaries are subject to the information report requirement with the Ministry of Commerce ("MOFCOM") or their respective local branches and registration with a local bank authorized by SAFE. In addition, any foreign loan procured by our PRC subsidiaries cannot exceed statutory limits and is required to be registered with SAFE or its respective local branches.

As an offshore holding company, the Parent may use the proceeds of our offshore fund-raising activities to provide loans or make capital contributions to our PRC subsidiaries or provide loans to the consolidated VIEs, in each case subject to the satisfaction of applicable regulatory requirements. Any medium or long-term loan to be provided by us to the VIEs must be registered with the National Development and Reform Commission ("NDRC") and SAFE or its local branches. Before we or our offshore entities provide loans to our onshore entities (i.e., our PRC subsidiaries and VIE entities), the borrower must make filings with the SAFE or its local counterparts in accordance with relevant PRC laws and regulations. In addition, for loans provided by us or our offshore entities to our PRC subsidiaries or VIE entities with a term of more than one year, the borrower must also obtain a certificate of registration from the NDRC before obtaining such loan, and report relevant information to the NDRC afterward. We may not complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to complete such registrations, our ability to use the proceeds of securities offering, and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and develop our business.

In August 2020, Ucommune Venture entered into a loan agreement with Ucommune Group Holdings (Hong Kong) Limited ("Ucommune HK"), under which Ucommune HK agreed to provide loans of up to a total of US$60 million to Ucommune Venture and Ucommune Venture could drawdown the loans in multiple tranches (up to an aggregate of US$60 million) within three years from the date of the first drawdown. Thereafter, both parties entered into two supplement agreements in January 2021 and March 2021. As of December 31, 2024, Ucommune HK has provided a total of US$41.7 million in loans to Ucommune Venture, of which US$8.3 million have been repaid, under such loan agreements since the completion of our Business Combination in November 2020, using proceeds from the Parent's previous PIPE financing and follow-on offerings. Such loans were included in intercompany loans, and disclosed as roll-forwards of the investment in subsidiaries and VIEs. As of December 31, 2024, Ucommune HK has completed the outstanding $33.3 million debt owed by Ucommune Venture be transferred to Youshenghengtong Technology. Ucommune Venture has completed the filing procedure with Beijing Foreign Exchange Management Department, a local branch of SAFE, and has completed the registration of the debt exemption for this particular debt to Ucommune Venture.

On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises ("SAFE Circular 19"), which took effect on June 1, 2015. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capital of FIEs and allows FIEs to settle their foreign exchange capital at their discretion. However, SAFE Circular 19 prohibits FIEs from using the Renminbi funds converted from their foreign exchange capital for expenditures beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises.

SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts ("SAFE Circular 16"), effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may convert their foreign debts from foreign currency to Renminbi on a discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a discretionary basis which applies to all enterprises registered in China.

SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular is relatively new, its interpretation and application and any other future foreign exchange related rules remain uncertain.

Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to use Renminbi converted from the net proceeds of securities offering, to fund the establishment of new entities in China by the VIEs, to invest in or acquire any other PRC companies through our PRC subsidiaries, or to establish new consolidated VIEs in China, which may adversely affect our business, financial condition and results of operations.

 ****

***Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and our ability to transfer cash between our PRC subsidiaries and us, across borders, and to investors and affect the value of your investment.***

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our net revenue in Renminbi. Under our current corporate structure, the Parent, as our ultimate Cayman Islands holding company, primarily relies on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.

Under PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Under existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends.

However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries and VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.

The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not pay dividends in foreign currencies to our investors.

 ****

 ****

***PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.***

In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles ("SAFE Circular 37"), to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles ("SAFE Circular 75"), which ceased to be effective upon the promulgation of SAFE Circular 37.

SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 applies to our shareholders who are PRC residents and may apply to any offshore acquisitions that we make in the future.

Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles must register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of a special purpose vehicle must update its filed registration with the local branch of SAFE with respect to that special purpose vehicle, to reflect any material change.

If our shareholders who are PRC residents or entities fail to make the required registration or to update the previously filed registration, our PRC subsidiaries may be prohibited from distributing their profits and any proceeds from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to our PRC subsidiaries. On February 13, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment ("SAFE Notice 13"), which became effective on June 1, 2015.

Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

We have requested PRC residents who we know hold direct or indirect interests in us to make the necessary applications, filings and registrations as required under SAFE Circular 37. We believe that most of these shareholders have completed the initial foreign exchange registrations with relevant banks. However, these individuals may not continue to make required filings or updates in a timely manner, or at all.

We may not know the identities of all PRC residents holding direct or indirect interest in our company. Any failure or inability by such individuals to comply with SAFE regulations may subject us to fines or legal sanctions, restrict our cross-border investment activities, and limit our PRC subsidiaries' ability to distribute dividends to us. As a result, our business and our ability to make distributions to you could be materially and adversely affected.

Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation have been evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations.

If we decide to acquire a PRC domestic company, we or the owners of such company, as the case may be, may not obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

 ****

 ****

***We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.***

On February 3, 2015, the State Administration of Taxation (the "SAT"), issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises ("SAT Bulletin 7"). SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company.

In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets, as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.

On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source ("SAT Bulletin 37"), which came into effect on December 1, 2017. SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax.

As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37.

For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request that the relevant transferors from whom we purchase taxable assets comply with these circulars, or establish that our company should not be taxed under these circulars, which may materially and adversely affect our financial condition and results of operations.

 ****

 ****

***Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.***

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rules"), adopted by six PRC regulatory agencies in 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. The Anti-Monopoly Law of the PRC also requires that MOFCOM be notified in advance of any concentration of undertaking if certain thresholds are triggered.

In addition, the Circular of the General Office of the State Council on the Establishment of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors that became effective in March 2011, and the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire *de facto* control over domestic enterprises that raise "national security" concerns are subject to strict review by MOFCOM. The rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.

We may develop our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming. Any required approval processes, including obtaining approval from MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to develop our business or maintain our market share.

***Failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.***

In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, replacing rules promulgated in 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to certain exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas-listed company, and complete certain other procedures. In addition, an overseas-entrusted institution must handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.

We and our executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and who have been granted options are subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions, and additional restrictions may limit their ability to exercise their stock options or remit proceeds gained from the sale of their stock into the PRC. We also face regulatory uncertainties that could restrict our ability to adopt incentive plans for our directors, executive officers and employees under PRC law.

The SAT has also issued relevant rules and regulations concerning employee share incentives. Under these rules and regulations, our employees working in the PRC who participate in the stock incentive plan will be subject to PRC individual income tax upon exercise of the share options. The PRC subsidiaries have obligations to file documents with respect to the granted share options with relevant tax authorities and to withhold individual income taxes for their employees upon exercise of the share options. If employees fail to pay or the PRC subsidiaries fail to withhold their individual income taxes according to relevant rules and regulations, we may face sanctions imposed by the competent governmental authorities.

 ****

 ****

***We may be subject to liability for placing advertisements with content that is deemed inappropriate or misleading under PRC laws.***

PRC laws and regulations prohibit advertising companies from producing, distributing or publishing any advertisement with content that violates PRC laws and regulations, impairs the national dignity of the PRC, involves designs of the PRC national flag, national emblem or national anthem or the music of the national anthem, is considered reactionary, obscene, superstitious or absurd, is fraudulent, or disparages similar products. We cannot assure you that all the content contained in our advertisements is true and accurate as required by, and complies in all respects with, these advertising laws and regulations especially given the uncertainty in the interpretation of these PRC laws and regulations.

The foregoing regulations include the Advertising Law of the People's Republic of China and the Interim Measures for the Administration of Internet Advertising. If we violate applicable PRC advertising laws and regulations, we may be subject to penalties and our reputation may be harmed, which may negatively affect our business, financial condition, results of operations and prospects.

Under PRC advertising laws and regulations, we must monitor the advertising content shown on our platform to ensure that such content is true, accurate and in full compliance with applicable laws and regulations. In addition, where special government review is required for specific types of advertisements prior to posting, such as advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals, we must confirm that such review has been performed and approval has been obtained from competent governmental authority.

Violation of these laws and regulations may subject us to penalties, including fines, confiscation of our advertising income, orders to cease dissemination of the advertisements and orders to publish an announcement correcting the misleading information. In circumstances involving serious violations, PRC governmental authorities may force us to terminate our advertising operation or revoke our licenses.

Third parties provide us with a majority of the advertisements shown on our platform. Although we have implemented manual monitoring systems and made significant efforts to ensure that the advertisements shown on our platform are in full compliance with applicable laws and regulations, the content contained in such advertisements may not be true and accurate as required by the advertising laws and regulations.

Although we have not been subject to material penalties or administrative sanctions in the past for the advertisements shown on our platform, if we violate PRC advertising laws and regulations, we may be subject to penalties and our reputation may be harmed, which may materially and adversely affect our business, financial condition, results of operations and prospects. We may also be subject to claims by customers misled by information on our apps, website or other portals on which we place our advertisements.

We may not recover our losses from advertisers by enforcing the indemnification provisions in the contracts, which may divert management's time and other resources from our business to defend against these infringement claims. As a result, our business, financial condition and results of operations could be materially and adversely affected.

***Our employment practices may be adversely impacted under the labor contract law of the PRC.***

The PRC National People's Congress promulgated the Labor Contract Law which became effective on January 1, 2008 and was amended on December 28, 2012, and the State Council promulgated implementing rules for the labor contract law on September 18, 2008. The labor contract law and the implementing rules impose requirements concerning, among others, the execution of written contracts between employers and employees, the time limits for probationary periods, and the length of employment contracts.

The interpretation and implementation of these regulations are evolving, our employment practices may violate the labor contract law and related regulations and we could be subject to penalties, fines or legal fees as a result. If we violate relevant laws and regulations, we may be subject to severe penalties or incur significant legal fees in connection with labor law disputes or investigations, our business, financial condition and results of operations may be adversely affected.

 ****

 ****

***We may be subject to additional contributions of social insurance and housing fund and late payments and fines imposed by relevant governmental authorities.***

PRC laws and regulations require us to pay various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. The relevant government agencies may examine whether an employer has made adequate payments of the requisite statutory employee benefits, and employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties.

Under the Social Insurance Law and the Regulations on the Administration of Housing Fund, PRC subsidiaries shall register with local social insurance agencies and register with applicable housing fund management centers and establish a special housing fund account in an entrusted bank. As of the date of this annual report, we have not made adequate contributions to the above employee benefits for some of our employees.

Government authorities could require us to pay the outstanding amount and impose late fees or fines on us. If we fail to make the outstanding social insurance and housing fund contributions within the prescribed time frame, we may be subject to fines and late payment fees, and our financial condition may be adversely affected.

 ****

***If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable PRC tax consequences to us and our non-PRC shareholders.***

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its "*de facto* management body" within the PRC is considered a "resident enterprise" and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term "*de facto* management body" as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.

In 2009, the SAT issued a circular, known as SAT Circular 82, which provides certain specific criteria for determining whether the "*de facto* management body" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular applies only to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT's general position on how "*de facto* management body" should be applied in determining the tax resident status of all offshore enterprises.

According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its "*de facto* management body" in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met:

● the primary location of the day-to-day operational management is in the PRC;

● decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC;

● the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and

● at least 50% of voting board members or senior executives habitually reside in the PRC.

We believe our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "*de facto* management body." If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposes, we would be subject to PRC enterprise income tax on our worldwide income at the rate of 25%. Furthermore, we would be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises.

In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of the ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of the ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us).

These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the Class A ordinary shares.

 ****

 ****

***Our securities will be delisted and be prohibited from trading in the over-the-counter market in the United States under the Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment.***

Trading in our securities on U.S. markets, including the over-the-counter market, may be prohibited under the HFCAA if the PCAOB determines that it is unable to inspect or investigate completely our auditor for two consecutive years. On December 16, 2021, the PCAOB issued the HFCAA Determination Report to notify the SEC of its determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong (the "2021 Determinations"). As of the date of this annual report, our auditor is not included in the 2021 Determinations.

In August 2022, the PCAOB, the CSRC and the Ministry of Finance of the PRC signed the Statement of Protocol, which establishes a specific and accountable framework for the PCAOB to conduct inspections and investigations of PCAOB-governed accounting firms in mainland China and Hong Kong. On December 15, 2022, the PCAOB announced that it was able to conduct inspections and investigations completely of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022. The PCAOB vacated its previous 2021 Determinations accordingly. As a result, we do not expect to be identified as a "Commission-Identified Issuer" under the HFCAA for the fiscal year ended December 31, 2025 after we file our annual report on Form 20-F for such fiscal year. However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's, control, including positions taken by authorities of the PRC. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. The possibility of being a "Commission-Identified Issuer" and risk of delisting could continue to adversely affect the trading price of our securities. Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will make determinations under the HFCAA as and when appropriate.

Our current auditor, Marcum Asia CPAs LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Marcum Asia CPAs LLP is headquartered in New York, New York, and has been inspected by the PCAOB on a regular basis. As of the date of this annual report, our current auditor is not among the firms listed on the 2021 Determinations.

If, in the future, we have been identified by the SEC for two consecutive years as a "Commission-Identified Issuer" whose registered public accounting firm is determined by the PCAOB that it is unable to inspect or investigate completely because of a position taken by one or more authorities in China, the SEC may prohibit our securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States. If our securities are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our securities will develop outside of the United States. Such a prohibition would substantially impair your ability to sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our securities. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

 ****

***We may be liable for improper use or appropriation of personal information provided by our customers.***

Our business involves collecting and retaining certain internal and customer data. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.

The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen's personal information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways. On November 7, 2016, the SCNPC issued the Cyber Security Law of the PRC (the "Cyber Security Law"), which became effective on June 1, 2017. Pursuant to the Cyber Security Law, network operators must not, without users' consent, collect their personal information, and may only collect users' personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.

The Civil Code of the PRC (issued by the PRC National People's Congress on May 28, 2020 and effective from January 1, 2021) provides legal basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the CAC, MIIT and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection.

The PRC regulatory requirements regarding cybersecurity are evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation (the "SAMR," formerly the State Administration for Industry and Commerce of the People's Republic of China, the "SAIC"), have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. In April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into effect on June 1, 2020. According to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.

In July 2021, the CAC and other related authorities released the draft amendment to the Cybersecurity Review Measures for public comments through July 25, 2021, which became effective on February 15, 2022. The Cybersecurity Review Measures propose the following key changes:

● companies who are engaged in data processing are also subject to the regulatory scope;

● the CSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism;

● the online platform operators holding more than one million users individual information and seeking a listing outside China shall file for cybersecurity review with the Cybersecurity Review Office; and

● the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity review process.

We may become subject to enhanced cybersecurity review. Certain internet platforms in China have been reportedly subject to heightened regulatory scrutiny in relation to cybersecurity matters. As of the date of this annual report, we have not been informed by any PRC governmental authority of any requirement that we file for a cybersecurity review. However, if we are deemed to be a critical information infrastructure operator or a company that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review.

As there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, we may not be able to pass such review in relation to our securities offerings. In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure, removal of our app from the relevant app stores, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which may have material adverse effect on our business, financial condition or results of operations.

On June 10, 2021, the SCNPC promulgated the PRC Data Security Law, which became effective in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

As uncertainties remain regarding the interpretation and implementation of these laws and regulations, we cannot assure you that we will comply with such regulations in all respects and we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. We may also become subject to fines and/or other sanctions which may have material adverse effect on our business, operations and financial condition.

While we take various measures to comply with all applicable data privacy and protection laws and regulations, our current security measures and those of our third-party service providers may not always be adequate for the protection of our customer, employee or company data. We may be a target for computer hackers, foreign governments or cyber terrorists in the future.

Unauthorized access to our proprietary internal and customer data may be obtained through break-ins, sabotage, breach of our secure network by an unauthorized party, computer viruses, computer denial-of-service attacks, employee theft or misuse, breach of the security of the networks of our third-party service providers, or other misconduct. Because the techniques used by computer programmers who may attempt to penetrate and sabotage our proprietary internal and customer data change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques.

Unauthorized access to our proprietary internal and customer data may also be obtained through inadequate use of security controls. Any of such incidents may harm our reputation and adversely affect our business and results of operations. In addition, we may be subject to negative publicity about our security and privacy policies, systems, or measurements. Any failure to prevent or mitigate security breaches, cyber-attacks or other unauthorized access to our systems or disclosure of our customers' data, including their personal information, could result in loss or misuse of such data, interruptions to our service system, diminished customer experience, loss of customer confidence and trust, impairment of our technology infrastructure, and harm our reputation and business, resulting in significant legal and financial exposure and potential lawsuits.

***Recent regulatory development in China may exert more oversight and control over listings and offerings that are conducted overseas. The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.***

On August 8, 2006, six PRC regulatory agencies jointly adopted M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle formed for the purpose of an overseas listing of securities in a PRC company obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. While the application of the M&A Rules remains unclear, we believe that the CSRC approval was not required in the context of our Business Combination, follow-on public offering or Warrants offerings of the Parent under the M&A Rules, because (1) our WFOEs were incorporated as a wholly foreign-owned enterprise by means of foreign direct investments rather than by merger with or acquisition of any PRC domestic companies owned by PRC companies or individuals as defined under the M&A Rules; (2) no explicit provision in the M&A Rules clearly classifies the contractual arrangements among Youshenghengtong Technology, VIEs and VIEs' shareholders as an acquisition falling under the M&A Rules; and (3) the CSRC has not issued any definitive rule or interpretation concerning whether Business Combination, follow-on public offering or Warrants offerings like ours under this annual report are subject to this regulation. However, there can be no assurance that the relevant PRC government agencies, including the CSRC, would reach the same conclusion.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions, which emphasized the need to strengthen administration over illegal securities activities and supervision of overseas listings by China-based companies. The Opinions proposed promoting regulatory systems to deal with risks facing China-based overseas-listed companies, and provided that the State Council will revise provisions regarding the overseas issuance and listing of shares by companies limited by shares and will clarify the duties of domestic regulatory authorities.

On February 17, 2023, the CSRC promulgated the Trial Measures of the Overseas Listing Trial Measures and the related guidelines, which became effective on March 31, 2023. The Overseas Listing Trial Measures has comprehensively improved and reformed the existing regulatory regime for overseas offering and listing of securities by PRC domestic companies and regulates both direct and indirect overseas offering and listing of securities by PRC domestic companies by adopting a filing-based regulatory regime. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report relevant information. The CSRC provided further notice related to the Overseas Listing Trial Measures that companies that have already been listed on overseas stock exchanges prior to March 31, 2023 are not required to make immediate filings for its listing, but are required to make filings for subsequent offerings in accordance with the Overseas Listing Trial Measures, i.e., to file with the CSRC within three business days after the closing of such subsequent offerings. On December 23, 2025 and February 12, 2026, we closed two tranches of Preferred Shares Issuance. On February 12, 2026, we closed the Securities Exchange and issued 6,800 New Preferred Shares to an investor. Subsequently, we made a filing with the CSRC on February 13, 2026. See "Item 4. Information on the Company — Regulation — Regulations Relating to Mergers and Acquisitions and Overseas Listing." As we had been listed on Nasdaq prior to March 31, 2023, we are not required to make immediate filing with the CSRC in connection with our listing on Nasdaq. However, we could be subject to the filing requirements with the CSRC if we conduct subsequent offerings.

We cannot assure you that we or the VIEs can complete the filing procedures, obtain the approvals or complete other compliance procedures in a timely manner, or at all, or that any completion of filing or approval or other compliance procedures would not be rescinded. Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our Class A ordinary shares. Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless.

On September 6, 2024, NDRC and MOFCOM jointly issued the Special Administrative Measures for Entry of Foreign Investment (Negative List) (2024 Version) (the "Negative List"), which became effective and replaced the previous version on November 1, 2024. According to the Negative List, domestic enterprises engaging in businesses in which foreign investment is prohibited shall obtain approval from the relevant authorities before offering and listing their shares on an overseas stock exchange. In addition, certain foreign investors shall not be involved in the operation or management of the relevant enterprise, and shareholding percentage restrictions under relevant domestic securities investment management regulations shall apply to such foreign investors. Since none of our PRC subsidiaries engages in businesses in which foreign investment is prohibited, we believe that we are not required to obtain such approval under the Negative List. However, the above mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, their interpretation, application and enforcement are subject to substantial uncertainties, and uncertainties remain regarding the interpretation and implementation of the new rules and regulations.

The regulations also established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex, including requirements in some instances that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, or that the approval from MOFCOM be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. We may develop our business in part by acquiring other companies operating in our industry. Complying with the requirements of the new regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to develop our business or maintain our market share.

**Risks Relating to Being a Public Company and Our Securities**

 ****

***The market price of our Class A ordinary shares has recently declined significantly, and our Class A ordinary shares could be delisted from Nasdaq or trading could be suspended.***

The listing of the Parent's Class A ordinary shares on the Nasdaq Capital Market is contingent on the Parent's compliance with the Nasdaq Capital Market's conditions for continued listing. On July 21, 2023, we announced that Parent received written notification (the "Notification Letter") from the Nasdaq Stock Market LLC ("Nasdaq") that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules (the "Bid Price Requirement"). In accordance with Nasdaq Listing Rules, the Parent must regain compliance within 180 calendar days, or until January 17, 2024. To regain compliance, the Parent's Class A ordinary shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event the Parent does not regain compliance by January 17, 2024, the Parent may be eligible for additional time to regain compliance or may face delisting. On November 29, 2023, the Parent effected a 12-to-1 share consolidation in order to cure the deficiency, and on December 14, 2023, the Parent regained compliance. See "Item 4. Information on the Company — A. History and Development of the Company — Nasdaq Notification Letter." On October 7, 2024, the SEC approved a rule change proposed by Nasdaq that impacts companies utilizing reverse stock splits to regain compliance with Nasdaq's minimum bid-price requirement for continued listings. The new Nasdaq Listing Rule 5810(c)(3)(A) modifies the application of the minimum bid-price compliance periods where a listed company takes a corporate action to meet the Bid Price Requirement, such as a reverse stock split, and such corporate action causes noncompliance with another listing requirement. As a result of the new rule, a company will not be deemed to have corrected the initial Bid Price Requirement noncompliance until the company cures any resulting deficiency. In such event, the company will continue to be considered noncompliant until it (1) cures the additional deficiency and (2) thereafter meets the Bid Price Requirement for a minimum of 10 consecutive business days (unless Nasdaq staff, at their discretion and within the framework of the new requirements, extends this period). If the company does not regain compliance with the Bid Price Requirement and the additional deficiency during the initial compliance period applicable to the Bid Price Requirement noncompliance, Nasdaq will issue a staff delisting determination letter.

On January 9, 2026, the Parent announced that it had received written notification from Nasdaq dated January 7, 2026 (the "2026 Notification Letter"), indicating that the Parent was not in compliance with the Bid Price Requirement. Pursuant to the Nasdaq Listing Rules, the Parent is provided with a compliance period of 180 calendar days, or until July 7, 2026, to regain compliance under the Nasdaq Listing Rules. If at any time during the 180-day compliance period, the closing bid price of the Parent's Class A ordinary share is US$1.00 per share or higher for a minimum of ten consecutive business days, the Nasdaq will provide the Parent written confirmation of compliance and the matter will be closed. In the event the Parent does not regain compliance by July 7, 2026, subject to the determination by the staff of Nasdaq, the Parent may be eligible for an additional 180-day compliance period. On February 9, 2026, the Parent held an extraordinary general meeting at which shareholders approved, among other things, a share consolidation to cure this deficiency. The actual time to carry out the share consolidation is subject to further approval from the Board of Directors.

Moreover, in January 2026, Nasdaq proposed additional rule changes to adopt, as a continued listing requirement, a minimum market value of listed securities, or MVLS, of US$5 million. Under the proposed rule changes, companies that fail to comply with the MVLS requirement would be subject to trading suspension and immediate delisting from Nasdaq, and review by the Nasdaq Listing Qualifications Hearings Panel would be limited solely to factual errors. As these proposed rule changes have not been adopted, we cannot predict whether, when or in what form they may become effective, or what impact they may have on the Parent.

The Parent cannot assure you that the Parent will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing price of our Class A ordinary shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If the Parent does not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our Class A ordinary shares. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted ordinary shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such ordinary shares. A suspension or delisting would likely decrease the attractiveness of our Class A ordinary shares to investors, may constitute a breach under certain of our credit facilities, constitute an event of default under certain of our securities (including our agreements with JAK Opportunities LLC) and cause the trading volume of our Class A ordinary shares to decline, which could result in a further decline in the market price of our Class A ordinary shares.

If in the future we fail to meet the continued Nasdaq listing requirements and our Class A ordinary shares are delisted from Nasdaq, investors would likely find it significantly more difficult to buy or sell our Class A ordinary shares, and our ability to raise capital could be materially adversely affected. We may also be unable to list our securities on another national securities exchange, in which case our securities may be quoted on an over-the-counter market, resulting in reduced market quotations, lower liquidity and a decline in the trading price of our Class A ordinary shares. Any such delisting could also reduce institutional investor interest and adversely affect our business development opportunities.

***Because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of the Class A ordinary shares for a return on your investment.***

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and development of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the Class A ordinary shares as a source for any future dividend income.

 ****

***A large, active trading market for our securities may not develop and the trading price for our securities may fluctuate significantly.***

Our Class A ordinary shares are listed on The Nasdaq Capital Market under the symbol "UK." The warrants to purchase up to 23,663 Class A ordinary shares at a price of US$972.00 per share expiring on February 2, 2026 (the "New Warrants"), unit purchase options (the "UPOs"), warrants to purchase Class A ordinary shares upon the exercise of the UPOs (the "UPO Warrants"), rights to convert to Class A ordinary shares upon the exercise of the UPOs (the "UPO Rights"), Debenture and JAK Warrants of the Parent (each as defined below) are not listed on Nasdaq or any national securities exchange or market. We cannot assure you that a liquid public market for our securities will develop. If a large, active public market for our securities does not develop, the market price and liquidity of our securities may be materially and adversely affected. As a result, investors in our securities may experience a significant decrease in the value of our securities.

 ****

***Warrants and UPOs are exercisable for, and UPO Rights are convertible into, our Class A ordinary shares, which may increase the number of Class A ordinary shares eligible for future resale in the public market and result in dilution to our shareholders.***

As of December 31, 2025, there were outstanding warrants (including New Warrants and JAK Warrants) to purchase up to an aggregate of 3,918,323 Class A ordinary shares at exercise prices, which were immediately exercisable. As of December 31, 2025, there were outstanding 333,002 UPOs exercisable for 1,388 Class A ordinary shares, 333,002 UPO Warrants to purchase an additional 694 Class A ordinary shares, and 333,002 UPO Rights to convert to an additional 139 Class A ordinary shares.

 ****

As of February 28, 2026, all JAK Warrants were converted into 6,800 Class A convertible preferred shares on February 12, 2026. As of February 28, 2026, there were outstanding 333,002 UPOs exercisable for 1,388 Class A ordinary shares, 333,002 UPO Warrants to purchase an additional 694 Class A ordinary shares, and 333,002 UPO Rights to convert to an additional 139 Class A ordinary shares.

The Parent may offer and issue additional shares, warrants, rights, units and other securities in the future. To the extent the outstanding warrants or UPOs or future warrants are exercised, or the outstanding UPO Rights or Debenture or future rights or units are converted, additional Class A ordinary shares will be issued, which will result in dilution to holders of our Class A ordinary shares and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants or UPOs may be exercised could adversely affect the market price of our Class A ordinary shares.

 ****

 ****

***The trading prices of the Class A ordinary shares are likely to be volatile, which could result in substantial losses to investors.***

The trading prices of the Class A ordinary shares are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with operations located mainly in China that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for the Class A ordinary shares may be highly volatile for factors specific to our own operations, including the following:

● variations in our net revenue, earnings and cash flows;

● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;

● announcements of new offerings and development by us or our competitors;

● changes in financial estimates by securities analysts;

● detrimental adverse publicity about us, our shareholders, affiliates, directors, officers or employees, our business model, our services or our industry;

● announcements of new regulations, rules or policies relevant for our business;

● additions or departures of key personnel;

● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and

● potential litigation or regulatory investigations.

Any of these factors may result in large and sudden changes in the volume and price at which the Class A ordinary shares will trade.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and require us to incur significant expenses to defend the suit, which could harm our results of operations.

Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could materially and adversely affect our financial condition and results of operations.

 ****

 ****

***The sale or availability for sale of substantial amounts of Class A ordinary shares could adversely affect their market price.***

Sales of substantial amounts of the Class A ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the market price of the Class A ordinary shares and could materially impair our ability to raise capital through equity offerings in the future. Shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lockup agreements.

We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other holders or the availability of these securities for future sale will have on the market price of the Class A ordinary shares. See "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling our securities, which is in the registration statement on Form F-1 on Form F-3 (File No. 333-257664), as amended, filed with the SEC.

In addition, certain holders of our existing shareholders are entitled to certain registration rights. Registration of these shares under the Securities Act of 1933 (the "Securities Act"), would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the public market, or the perception that such sales could occur, could cause the price of our Class A ordinary shares to decline.

***Techniques employed by short sellers may drive down the market price of the Class A ordinary shares.***

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale.

As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its prospects to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend significant resources to investigate such allegations and/or defend ourselves.

While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from developing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business, and any investment in the Class A ordinary shares could be greatly reduced or even rendered worthless.

 ****

***If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the Class A ordinary shares and trading volume could decline.***

The trading market for the Class A ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades the Class A ordinary shares or publishes inaccurate or unfavorable research about our business, the market price for the Class A ordinary shares would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the Class A ordinary shares to decline.

 ****

 ****

***Our management will have broad discretion over the use of any net proceeds from the exercise of Warrants and you may not agree with how we use the proceeds, and the proceeds may not be invested successfully.***

Our management will have broad discretion as to the use of any net proceeds from the exercise of Warrants and could use them for purposes other than those contemplated as of the date of this annual report and in ways that do not necessarily improve our results of operations or enhance the value of our Class A ordinary shares.

Accordingly, you will be relying on the judgment of our management with regard to the use of any proceeds from the exercise of Warrants on a cash basis and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The proceeds could be invested in a way that does not yield a favorable, or any, return for you.

 ****

***The Parent's memorandum and articles of association contain anti-takeover provisions that could materially and adversely affect the rights of holders of our Class A ordinary shares.***

The Parent has adopted a fourth amended and restated memorandum and articles of association that contains provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could deprive our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction.

Our Board of Directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our Board of Directors decides to issue preferred shares, the price of our Class A ordinary shares may fall and the voting and other rights of the holders of our Class A ordinary shares may be materially and adversely affected.

 ****

***The Parent is a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.***

Because the Parent qualifies as a foreign private issuer under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a half-year basis as press releases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K.

However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

 ****

 ****

***As the Parent is an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.***

As the Parent is an exempted company with limited liability incorporated in the Cayman Islands listed on Nasdaq, the Parent is subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like the Parent to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is its home country, may differ significantly from the Nasdaq corporate governance listing standards.

The Parent has relied on home country practice with respect to its corporate governance. The Parent does not have a majority of independent directors serving on its Board of Directors, its audit committee composed entirely of only two independent directors and it has not established a nominating committee and a compensation committee composed entirely of independent directors. For details, please refer to "Management — Committees of our Board of Directors." As a result, the Parent's shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

 ****

***The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from our business.***

We expect to incur significant legal, accounting and other expenses as a public company. As the Parent is a public company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. The Exchange Act requires the filing of annual and current reports with respect to a public company's business and financial condition. The Sarbanes-Oxley Act of 2002 requires, among other things, that a public company establish and maintain effective internal control over financial reporting. The Nasdaq rules also impose various requirements on the corporate governance practices of public companies.

In addition, as a result of the Parent becoming a public company, we have increased the number of independent directors and adopted policies regarding internal controls and disclosure controls and procedures. Operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be difficult for us to attract and retain qualified people to serve on our Board of Directors, our board committees or as executive officers.

Once the Parent ceases to be a "non-accelerated filer" as defined under Rule 12b-2 of the Exchange Act, we may incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC.

 ****

 ****

***There can be no assurance we will not be a passive foreign investment company ("PFIC"), for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our Class A ordinary shares or warrants.***

In general, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes for any taxable year in which (1) 75% or more of its gross income consists of passive income (including interest income) or (2) 50% or more of the value of its assets (generally determined based on an average of the quarterly values of the assets) is attributable to assets that produce, or are held for the production of, passive income. For purposes of the above calculations, we will be treated as earning our proportionate share of the income of, and owning our proportionate share of the assets of, any other corporation in which we own, directly or indirectly, 25% (by value) of the stock.

Based upon the manner in which we operate our business, the composition and characterization of our income and assets and the value of our assets, we believe that it is reasonable to take a position that we were not classified as a PFIC for our taxable year ended December 31, 2025. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you we will not be classified as a PFIC for the current taxable year or future taxable years. The value of the assets of our Parent for purposes of PFIC determination will generally be determined by reference to the market price of our Class A ordinary shares, which could fluctuate significantly. Our market capitalization fluctuated significantly during the taxable year ended December 31, 2025. If our market capitalization does not increase or continues to decline, we may be or become classified as a PFIC for the current or future taxable years. If we are treated as a "controlled foreign corporation" (see "— If a U.S. Holder is treated as owning at least 10% of our ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences." below), the value of the assets owned by our subsidiaries and consolidated VIEs will be determined by reference to the adjusted tax basis of such assets for U.S. federal income tax purposes, which may increase the likelihood that we are a PFIC. Because we do not currently track adjusted tax basis for U.S. federal income tax purposes, we may not be able to determine whether we are a PFIC in future taxable years. In addition, our PFIC status depends on the manner in which we operate our workspace business (and the extent to which our income from workspace membership continues to qualify as active for PFIC purposes). The Internal Revenue Service (the "IRS") may challenge the composition and characterization of our assets or income or the valuation of our assets, goodwill and other unbooked intangibles, which may result in our company being, or becoming classified as, a PFIC for the current or future taxable years. Furthermore, it is not entirely clear how the contractual arrangements between us, the VIEs and their nominal shareholders are treated for purposes of the PFIC rules, and we may be or become a PFIC if the VIEs are not treated as owned by us. Because of these uncertainties, there can be no assurance we will not be classified as a PFIC for the current taxable year, or will not be classified as a PFIC in the future taxable years.

If we were a PFIC for any taxable year during which a U.S. Holder (as defined below) owns our Class A ordinary shares or warrants, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See "Item 10. Additional Information — Taxation — Material U.S. Federal Income Taxation Considerations — Passive Foreign Investment Company."

 ****

***If a U.S. Holder is treated as owning at least 10% of our ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences.***

If a U.S. Holder (as defined below in "Item 10. Additional Information — Taxation — Material U.S. Federal Income Taxation Considerations") is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of our ordinary shares, such U.S. Holder may be treated as a "United States shareholder" with respect to each "controlled foreign corporation" in our group, if any. Generally, a non-U.S. corporation is deemed as a controlled foreign corporation if more than 50% of its stock (by voting power or value) of is owned (directly, indirectly or constructively) by United States shareholders. We will generally be classified as a controlled foreign corporation if more than 50% of our outstanding shares, measured by reference to voting power or value, are owned (directly, indirectly or by attribution) by United States shareholders. If our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations, regardless of whether we are treated as a controlled foreign corporation. In addition, we are likely classified as a controlled foreign corporation, in which case a United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of "Subpart F income," "global intangible low-taxed income" and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder of a U.S. corporation. Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder's U.S. federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist our investors in determining whether any of our non-U.S. subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations. Further, we cannot provide any assurances that we will furnish to any United States shareholder information that may be necessary to comply with the reporting and tax paying obligations described in this risk factor. U.S. Holders should consult their tax advisors regarding the potential application of these rules to their investment in our Class A ordinary shares.

 ****

 ****

***The Parent is a "controlled company" within the meaning of the Nasdaq listing requirements and, as a result, we will qualify for, and may rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.***

The Parent is a "controlled company" as defined under the rules of the Nasdaq since Dr. Daqing Mao and his spouse, Angela Bai, beneficially own, when combined, more than 50% of our total voting power. As long as the Parent remains a controlled company under this definition, we are permitted to elect to rely on certain exemptions from corporate governance rules, including:

● an exemption from the rule that a majority of our Board of Directors must be independent directors;

● an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and

● an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

Although we currently do not intend to rely on the "controlled company" exemptions under the Nasdaq listing rules, we could elect to rely on those exemptions in the future. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

**ITEM 4. INFORMATION ON THE COMPANY**

In this Item, "we," "us," "our company," "our" or "Ucommune" refers to Ucommune International Ltd, a Cayman Islands company, its subsidiaries and the consolidated VIEs.

**A. History and Development of the Company**

Ucommune International Ltd has been our ultimate holding company since November 2020 after the completion of the Business Combination. Ucommune International Ltd was incorporated in the Cayman Islands on June 16, 2020 as an exempted company with limited liability.

We commenced our operations in April 2015 through Ucommune Venture. In August 2018, we established Beijing U Bazaar.

We underwent a series of restructuring transactions, which primarily included the following:

● In September 2018, Ucommune Group Holdings was incorporated under the laws of the Cayman Islands.

● In December 2018, Ucommune HK was incorporated under the laws of Hong Kong.

● In January 2019, Youshenghengtong Technology, formerly known as Ucommune (Beijing) Technology Co., Ltd., was incorporated in the PRC as a wholly owned subsidiary of Ucommune HK.

● In May 2019, Youshenghengtong Technology entered into a series of contractual arrangements with Ucommune Venture as well as its shareholders, and the contractual arrangements were renewed in July 2019 and in November 2019.

● In May 2019, Youshenghengtong Technology entered into a series of contractual arrangements with Beijing U Bazaar as well as its shareholder. In June 2023, in connection with the transfer of equity interests in Beijing U Bazaar, new contractual arrangements on substantially similar terms were entered into to replace the previous ones. Under the contractual arrangements Youshenghengtong Technology entered into with Beijing U Bazaar, the Parent is the primary beneficiary of such entities and its subsidiaries for accounting purposes.

● On September 20, 2024, Youshenghengtong Technology issued a notice to terminate the contractual arrangements with Ucommune Venture, and the existing shareholders of Ucommune Venture. As a result, the series of contractual arrangements entered into by and among Youshenghengtong Technology, Ucommune Venture and/or its shareholders, including exclusive business cooperation agreement, equity pledge agreement, exclusive option agreement, shareholders' voting rights proxy agreement and spousal consent letter, were terminated in accordance with the terms therein following 30 calendar days after the delivery date of the Notice of Termination. Ucommune Venture and its subsidiaries were deconsolidated and their financial results have not been included in the Company's consolidated financial statements since then.

In May 2019, we acquired Melo Inc., a holding company incorporated under the laws of Delaware. Beijing Melo, a company engaging in smart office systems development, is a wholly-owned subsidiary of Melo Inc. We believe the acquisition strengthens our technology capability and enables us to provide advanced office solutions to our members. On January 30, 2019, Beijing Melo entered into a series of contractual arrangements with Weixue Tianxia, a company incorporated in the PRC in December 2017, as well as its shareholders, under which the Parent is the primary beneficiary of Weixue Tianxia for accounting purposes. On December 30, 2023, Beijing Melo, Weixue Tianxia and the shareholders of Weixue Tianxia entered into an agreement to terminate such contractual arrangements. On December 30, 2023, the shareholders of Weixue Tianxia transferred 80% and 20% of the equity interests in Weixue Tianxia to Zhimo Zhao, our director, and one of our employees, respectively. On May 11, 2024, Weixue Tianxia has completed its deregistration.

***Business Combination***

On November 17, 2020, we consummated a business combination pursuant to a merger agreement with Orisun Acquisition Corp. and certain other parties. Upon completion of the Business Combination, the combined company, or Ucommune International Ltd, remains as the surviving publicly traded entity. Following the business combination, Ucommune Group Holdings became a wholly owned subsidiary of Ucommune International Ltd.

Starting from November 17, 2020, the Class A ordinary shares of the Parent are listed on the Nasdaq Capital Market under the symbol "UK" and the Prior Warrants of the Parent, are listed on Nasdaq under the symbol "UKOMW." The Prior Warrants of the Parent expired on November 18, 2025 and are no longer exercisable or traded; on the same date, the Company filed a Form 25 with respect to the delisting of its Prior Warrants from Nasdaq.

The Parent is regarded as the primary beneficiary of Beijing U Bazaar and its subsidiaries. The Parent treats them as our consolidated affiliated entities under U.S. GAAP, and have consolidated the financial results of these entities in our consolidated financial statements in accordance with U.S. GAAP.

In this annual report, each of Youshenghengtong Technology and Beijing Melo is referred to as our WFOE and Beijing U Bazaar is referred to as the VIE. For more details and risks related to the VIE structure, please see "— C. Organizational Structure — Contractual Arrangements with the VIEs and Their Respective Shareholders" and "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure."

Our principal executive offices are located at Floor 4, Building 1, No. 2 Dongsihuan North Road, Chaoyang District, Beijing, People's Republic of China. Our telephone number at this address is +8610 6506-7789. The Parent's registered office in the Cayman Islands is located at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Parent's agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.

The SEC maintains a website at *www.sec.gov* that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC. Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is *https://www.ucommune.com/*. The information contained on our website is not a part of this annual report.

***Registration Statements***

On February 2, 2021, the Parent completed a follow-on offering of 20,577 Class A ordinary shares and warrants to purchase 20,577 Class A ordinary shares at a combined offering price of US$972.00 for one Class A ordinary share and one firm warrant to purchase one Class A ordinary share (after retroactively adjusted to reflect the 12-to-1 share consolidation effected on November 29, 2023) (the "base offering"). The warrants will expire on February 2, 2026. The underwriter in this offering exercised its option in full to purchase an additional 740,740 warrants at an offering price of US$2.40 per warrant to purchase from us an additional 3,087 warrants shares (after retroactively adjusted to reflect the 12-to-1 share consolidation effected on November 29, 2023), which closed concurrently with the base offering.

On March 18, 2021, the Parent filed a registration statement on Form F-1 (File No. 333-254442), as amended, related to (1) the resale from time to time of certain Class A ordinary shares, (2) the issuance by the Parent of certain Class A ordinary shares upon the exercise of Prior Warrants and New Warrants, (3) the issuance by the Parent of (i) the UPOs, (ii) the UPO Warrants, (iii) the UPO Rights, (iv) Class A ordinary shares upon the exercise of the UPO Warrants and (v) Class A ordinary shares upon the conversion of the UPO Rights. The registration statement became effective on March 22, 2021. On July 2, 2021, the Parent withdrew such registration statement.

On July 2, 2021, the Parent filed a registration statement on Form F-1 (File No. 333-257664), registering the securities described in the foregoing paragraph, together with additional securities. On March 11, 2022, the Parent filed a pre-effective amendment to such registration on Form F-3, and registered Class A ordinary shares issuable upon the conversion of the Debenture and exercise of the JAK Warrants, among other things. The registration statement became effective on July 22, 2022.

On August 16, 2022, the Parent filed a registration statement on Form F-3 (File No. 333-266899), which was declared effective on September 20, 2022, to offer Class A ordinary shares, preferred shares, debt securities, warrants, rights and units of an aggregate offering price of up to US$300,000,000.

 ****

***Nasdaq Notification Letter***

On January 24, 2022, the Parent received a written notification letter from the Nasdaq that the Parent is not in compliance with the minimum bid price requirement set forth in Nasdaq Rules for continued listing on Nasdaq. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for 30 consecutive business days. Based on the closing bid price of the Parent's Class A ordinary shares for the 30 consecutive business days from December 8, 2021 to January 21, 2022, the Parent no longer meets the minimum bid price requirement.

On April 21, 2022, the Parent effected a 20-to-1 share consolidation in order to cure the deficiency. On May 6, 2022, Nasdaq confirmed that for the last 10 consecutive business days, from April 22, 2022 to May 5, 2022, the closing bid price of the Parent's Class A ordinary shares was at US$1.00 per share or greater. Accordingly, the Parent has regained compliance with Listing Rule 5550(a)(2) and this matter has been closed.

On July 21, 2023, the Parent received a written notification letter from the Nasdaq that the Parent is not in compliance with the minimum bid price requirement set forth in Nasdaq Rules for continued listing on Nasdaq. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for 30 consecutive business days. Based on the closing bid price of the Parent's Class A ordinary shares for the 30 consecutive business days from June 6, 2023 to July 20, 2023, the Parent no longer meets the minimum bid price requirement.

On November 29, 2023, the Parent effected a 12-to-1 share consolidation in order to cure the deficiency. On December 14, 2023, Nasdaq confirmed that for the last 10 consecutive business days, from November 30, 2023 through December 13, 2023, the closing bid price of the Parent's Class A ordinary shares was at US$1.00 per share or greater. Accordingly, the Parent has regained compliance with Listing Rule 5550(a)(2) and this matter has been closed.

On January 9, 2026, the Parent announced that it had received written notification from Nasdaq dated January 7, 2026 (the "2026 Notification Letter"), indicating that the Parent was not in compliance with the Bid Price Requirement. Pursuant to the Nasdaq Listing Rules, the Parent is provided with a compliance period of 180 calendar days, or until July 7, 2026, to regain compliance under the Nasdaq Listing Rules. If at any time during the 180-day compliance period, the closing bid price of the Parent's Class A ordinary share is US$1.00 per share or higher for a minimum of ten consecutive business days, the Nasdaq will provide the Parent written confirmation of compliance and the matter will be closed. In the event the Parent does not regain compliance by July 7, 2026, subject to the determination by the staff of Nasdaq, the Parent may be eligible for an additional 180-day compliance period. On February 9, 2026, the Parent held an extraordinary general meeting at which shareholders approved, among other things, a share consolidation to cure this deficiency. The actual time to carry out the share consolidation is subject to further approval from the Board of Directors.

 ***Debenture and Warrants Offering***

On January 26, 2022, the Parent completed a private placement pursuant to a securities purchase agreement (the "Securities Purchase Agreement"), with JAK Opportunities LLC (the "Purchaser"), for the offering of:

● A US$3,000,000 principal amount 8% senior convertible debenture of the Parent (the "Debenture"). The Debenture matures on January 25, 2023 and pays interest in cash at the rate of 8.0% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on April 1, 2022. The Parent may also elect to pay accrued interest in Class A ordinary shares at a rate of 12.0% per annum, assuming a conversion rate equal to the lesser of (1) the conversion price then in effect or (2) the average of the volume weighted average price of Class A ordinary shares for the five consecutive trading days ending on the applicable interest payment date. The Debenture is convertible at the option of the Purchaser into Class A ordinary shares equal to 125% of the principal amount of the Debenture at an initial conversion price equal to the lesser of (1) US$1.00, subject to certain adjustments, and (2) 100% of the lowest daily volume weighted average price of Class A ordinary shares during the ten consecutive trading days prior to the conversion date;

● A series A warrant of the Parent (the "Series A Warrant") to purchase up to a number of Class A ordinary shares equal to an aggregate exercise price of $3,750,000, with an exercise price of US$4.05 per Class A ordinary share. The Series A Warrant is exercisable immediately and expires on January 26, 2029;

● A series B warrant of the Parent (the "Series B Warrant") to purchase up to a number of Class A ordinary shares equal to 125% of an aggregate exercise price of $15,000,000, with an exercise price of US$1.00 per 1.25 Class A ordinary shares (equivalent to an exercise price of US$0.80 per Class A ordinary share), each exercise of which entitles the Series B Warrant holder to deduct 10% from the exercise price. The exercise price shall be subject to a one-time downward adjustment to match the lowest volume weighted average price of the Class A ordinary shares on the ten consecutive trading days immediately following the date on which the registration statement registering the Class A ordinary shares underlying the Debenture and JAK Warrants becomes effective (the "Effective Date"). The Series B Warrant is exercisable immediately and expires on the twelve-month anniversary of the Effective Date; and

● A series C warrant of the Parent (the "Series C Warrant," and together with the Series A Warrant and Series B Warrant, the "JAK Warrants") to purchase up to a number of Class A ordinary shares equal to an aggregate exercise price of $18,750,000, with an exercise price of US$4.05 per Class A ordinary share. 50% of Series C Warrant vested upon issuance, and 50% of the Series C Warrant shall vest proportionately based on the number of Series B Warrants exercised. The Series C Warrant shall expire on the seven-year anniversary of Effective Date.

Under the Securities Purchase Agreement, the Parent agreed not to undertake any action which (1) alters or changes the rights, preferences or privileges of the Debenture as a class, (2) results in the company incurring any debt incurred not in the ordinary course of the business, or (3) alters or amends our amended and restated articles of association. The Parent also agreed to maintain a minimum net cash position in cash or marketable securities of no less than US$1.0 million as long as the Debenture is outstanding. In addition, the Parent granted the Purchaser a 36-month right to participate in certain future financings, up to a level of 25%.

Subject to our compliance with certain conditions, the Parent may redeem the Debenture in cash at 120% premium. Upon any optional redemption, the Parent is obligated to issue the Purchaser Series A Warrants to purchase a number of Class A ordinary shares equal to 60% of the principal amount of the Debenture subject to optional redemption, divided by the then conversion price.

The Debenture contains certain events of default (including, but not limited to, default in payment of principal or interest; breaches of covenants, agreements, representations or warranties; an event of default under the transaction documents in connection with the offering; receipt of a deficiency or non-compliance notice from, or ineligibility from listing or quotation for trading on, Nasdaq; changes in control and fundamental transactions; certain bankruptcy events; certain payment defaults with respect to indebtedness; and the entering or filing of certain monetary judgments against us), subject to waiver by the Purchaser. Upon an event of default, the outstanding principal amount of the Debenture for a premium, plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Purchaser's election, immediately due and payable in cash. The Parent is also subject to certain negative covenants under the Debenture, including but not limited to, the incurrence of indebtedness, liens on assets, amendment of charter documents, repayment or repurchase of securities or certain debt, the payment of dividends and affiliate transactions.

The conversion price of the Debenture and the exercise price of the JAK Warrants are subject to adjustments upon certain events, including stock splits, stock dividends, subsequent equity transactions (other than specified exempt issuances), subsequent rights offerings and fundamental transactions. If we fail to timely deliver the Class A ordinary shares upon any conversion of the Debenture or exercise of the JAK Warrants, the Parent will be subject to certain liquidated damages and buy-in provisions. The Purchaser shall not have the right to exercise any portion of the Warrants or convert any portion of the Debenture if such exercise and/or conversion would result in the Purchaser and its affiliates beneficially owning more than 4.99% (or, upon election of the Purchaser, 9.99%) of the Parent's outstanding ordinary shares immediately after giving effect to the issuance of ordinary shares issuable upon the exercise and/or conversion.

Pursuant to a registration rights agreement (the "January 2022 Registration Rights Agreement"), between the Parent and the Purchaser, dated January 26, 2022, the Parent agreed to file a registration statement registering the resale of the Class A ordinary shares underlying the Debenture and the JAK Warrants 60 days from the date of the January 2022 Registration Rights Agreement. The Parent also agreed to have the registration statement declared effective within 120 days from the date of the January 2022 Registration Rights Agreement. In addition, the Parent agreed to pay the purchaser, as partial liquidated damages, a fee of 2.0% of the purchaser's subscription amount per month in cash upon the occurrence of certain events, including our failure to file or have the registration statement declared effective within agreed period.

Concurrently with the execution of the Securities Purchase Agreement, Debenture, JAK Warrants and January 2022 Registration Rights Agreement, the Parent entered into a lock-up agreement (the "January 2022 Lock-Up Agreement"), with (1) the Parent's directors and officers who beneficially own over one million Class A ordinary shares and (2) the Parent's shareholders beneficially owned 10% or more of the Parent's shares. Until 60 days after the Effective Date, the signatories agreed not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition whether by actual disposition or effective economic disposition due to cash settlement or otherwise), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any Class A ordinary shares or securities convertible, exchangeable or exercisable into, Class A ordinary shares beneficially owned, held or hereafter acquired by any such signatory.

The Securities Purchase Agreement, Debenture, JAK Warrants were amended on March 1, 2022, August 29, 2022, October 25, 2022, January 24, 2023, June 7, 2023 and January 30, 2024 to set and amend the Floor Price. Following the 12-to-1 share consolidation effected on November 29, 2023, the Floor Price per Class A ordinary share, par value of US$0.024 each (each an "Ordinary Share") has been automatically adjusted to US$15.6, and effective on December 21, 2023, the exercise price of the Warrants has been automatically adjusted to US$3.37 per Ordinary Share pursuant to the mechanism provided under Section 3(a)(ii) of the JAK Warrants.

Based on the amendment agreements dated January 30, 2024, the Parent and the Purchaser amended and restated the Termination Date for purposes of the Series B Warrant to December 31, 2024 for the Ordinary Shares issuable upon exercise of the Series B Warrant that are registered under the registration statement on Form F-3 of the Parent (File No. 333-257664) (the "F-3 Registration Statement"), which date has passed, and to 12 months following the effectiveness of a registration statement to be filed under the Securities Act registering the remaining unregistered Ordinary Shares issuable upon exercise of the Series B Warrant for such remaining Ordinary Shares. With respect to the Ordinary Shares issuable upon exercise of each of the Warrants that are registered under the F-3 Registration Statement, the Floor Price was amended and restated to US$3.37 per Ordinary Share. Pursuant to the terms of the JAK Warrants, for so long as the JAK Warrants remained outstanding, the Parent was prohibited from issuing Class A ordinary shares or Class A ordinary share equivalents at a price per share, or with a conversion or exercise price per share, as applicable, below the Floor Price without the prior written consent of the Purchaser. As of February 28, 2026, all JAK Warrants were converted into 6,800 Class A convertible preferred shares on February 12, 2026.

On August 1, 2023, we fully repaid the remaining principal amount plus interests accrued and unpaid under the Debenture.

***Extraordinary General Meeting for Reverse Share Split and Voting Ratio Change***

On March 16, 2022, the Parent announced an extraordinary general meeting (the "April EGM") to be held at 10 A.M. on April 21, 2022, Beijing time, to effect a share consolidation of 20 ordinary shares with par value of US$0.0001 each in the Parent's issued and unissued share capital into one ordinary share with par value of US$0.002 each of the Parent (the "2022 Share Consolidation"). At the April EGM, the Parent's shareholders approved the 2022 Share Consolidation. As a result, the 2022 Share Consolidation became effective at 5 P.M. on April 21, 2022, U.S. Eastern time, and the Class A ordinary shares began trading on a post-share consolidation basis on the Nasdaq Capital Market when the market opened on the next business trading day under the same symbol "UK" but under a new CUSIP number of G9449A 209. No fractional shares were issued in connection with the 2022 Share Consolidation. All fractional shares were rounded up to the whole number of shares. Immediately following the 2022 Share Consolidation, the authorized share capital of the Company became US$50,000.00 divided into 25,000,000 ordinary shares of par value of US$0.002 each, comprising (1) 20,000,000 Class A ordinary shares of par value of US$0.002 each and (2) 5,000,000 Class B ordinary shares of par value of US$0.002 each.

On August 2, 2022, the Parent announced an extraordinary general meeting (the "August EGM") to be held at 10 A.M. on August 19, 2022, Beijing time, to change the voting power of the Class B ordinary shares of par value of US$0.002 each from fifteen (15) votes for each Class B ordinary share to thirty-five (35) votes for each Class B ordinary share (the "Voting Ratio Change"). On August 9, 2022, the Parent announced the adjournment of the August EGM to 10 A.M. on August 24, 2022, Beijing time. At the August EGM, the Parent's shareholders approved the Voting Ratio Change. As a result, with immediate effect, each Class A ordinary shares, par value of US$0.002 each, of the Parent was entitled to one (1) vote on all matters subject to vote at general and special meetings of the Parent and each Class B ordinary share was entitled to thirty-five (35) votes on all matters subject to vote at general and special meetings of the Parent.

On October 13, 2023, the Parent announced an extraordinary general meeting (the "November EGM") to be held at 10 A.M. on November 29, 2023, Beijing time. At the November EGM, the Parent's shareholders approved:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) an increase of authorized
 share capital from US$50,000.00 divided into 25,000,000 ordinary shares of par value of US$0.002 each, comprising (i) 20,000,000
 Class A ordinary shares of par value of US$0.002 each and (ii) 5,000,000 Class B ordinary shares of par value of US$0.002 each, to
 US$600,000.00 divided into 300,000,000 ordinary shares of par value of US$0.002 each, comprising (i) 240,000,000 Class A ordinary
 shares of par value of US$0.002 each and (ii) 60,000,000 Class B ordinary shares of par value of US$0.002 each, by creating additional
 220,000,000 authorized but unissued Class A ordinary shares and 55,000,000 authorized but unissued Class B ordinary shares (the "Increase
 of Share Capital");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a share consolidation of
 12 ordinary shares with par value of US$0.002 each in the Parent's issued and unissued share capital into one ordinary share
 with par value of US$0.024 (the "2023 Share Consolidation"), so that the authorized share capital of the Parent will
 be US$600,000.00 divided into 25,000,000 ordinary shares of par value of US$0.024 each, comprising (i) 20,000,000 Class A ordinary
 shares of par value of US$0.024 each and (ii) 5,000,000 Class B ordinary shares of par value of US$0.024 each; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) an amendment of the Parent's
 memorandum and articles of association currently in effect to (i) reflect the Increase of Share Capital and the 2023 Share Consolidation
 and (ii) change the voting power of the Class B ordinary shares of par value of US$0.024 each (the "Class B Ordinary Shares")
 from thirty-five (35) votes for each Class B Ordinary Share to fifty-five (55) votes for each Class B Ordinary Share.

Holders of Class B ordinary shares approved such variation of rights of Class B ordinary shares on October 10, 2023 pursuant to the Current M&A. As a result, with immediate effect, each Class A ordinary shares, par value of US$0.024 each, of the Parent is entitled to one (1) vote on all matters subject to vote at general and special meetings of the Parent and each Class B Ordinary Share is entitled to fifty-five (55) votes on all matters subject to vote at general and special meetings of the Parent.

The 2023 Share Consolidation became effective at 5 P.M. on November 29, 2023, U.S. Eastern time. As a result of the 2023 Share Consolidation, each 12 pre-split ordinary shares outstanding automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholders, and the terms of the outstanding warrants, unit purchase options and awards under share incentive plans of the Parent were adjusted automatically without any action on the part of the holders of those warrants, unit purchase options and awards under share incentive plans.

Beginning with the opening of trading on November 30, 2023, U.S. Eastern time, the Parent's Class A ordinary shares began trading on a post-share consolidation basis on the Nasdaq Capital Market under the same symbol "UK" but under a new CUSIP number of G9449A 134. No fractional shares were issued in connection with the share consolidation. All fractional shares were rounded up to the whole number of shares.

On August 11, 2025, the Parent announced an extraordinary general meeting (the "2025 EGM") to be held at 10 A.M. on September 8, 2025, Beijing time, to change the voting power of the Class B ordinary shares of par value of US$0.024 each from fifty-five (55) votes for each Class B ordinary share to one hundred and seventy (170) votes for each Class B ordinary share (the "Voting Ratio Change"). At the 2025 EGM, the Parent's shareholders approved the Voting Ratio Change. As a result, with immediate effect, each Class A ordinary shares, par value of US$0.024 each, of the Parent was entitled to one (1) vote on all matters subject to vote at general and special meetings of the Parent and each Class B ordinary share was entitled to one hundred and seventy (170) votes on all matters subject to vote at general and special meetings of the Parent.

On January 8, 2026, the Parent announced an extraordinary general meeting (the "January EGM") to be held at 10 A.M. on February 9, 2026, Beijing time. At the January EGM, the Parent's shareholders approved:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to increase and redesignate
 the Parent's authorised share capital from US$600,000 divided into 25,000,000 shares comprising (i) 19,980,000 Class A Ordinary
 Shares par value US$0.024 per share (the "Class A Ordinary Shares"), (ii) 5,000,000 Class B Ordinary Shares, par value
 US$0.024 per share (the "Class B Ordinary Shares"), and (iii) 20,000 Series A Preferred Shares, par value US$0.024 per
 share (the "Series A Preferred Shares") to US$72,000,000 divided into 3,000,000,000 shares comprising (i) 2,994,000,000
 Class A Ordinary Shares, (ii) 3,000,000 Class B Ordinary Shares, and (iii) 3,000,000 Series A Preferred Shares by (a) creation of
 2,972,020,000 authorised but unissued Class A Ordinary Shares; (b) creation of 2,980,000 authorised but unissued Series A Preferred
 Shares; and (c) redesignation of 2,000,000 authorised but unissued Class B Ordinary Shares into 2,000,000 authorised but unissued
 Class A Ordinary Shares (the "Increase and Redesignation of Authorised Share Capital");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a) on a date when the closing market price
 per the Parent's Class A Ordinary Share is less than US$1.00, or on such date as any Director or chief executive officer of
 the Parent deems advisable and may determine in his or her absolute discretion, a sixteen-in-one reverse share split (the "First
 Tranche Scenario 1 Split Ratio") of the Parent's authorized share capital, so that the authorised share capital of the
 Parent will be US$72,000,000 divided into 187,500,000 shares comprising (i) 187,125,000 Class A Ordinary Shares, par value US$0.384
 per share, (ii) 187,500 Class B Ordinary Shares, par value US$0.384 per share and (iii) 187,500 Series A Preferred Shares, par value
 US$0.384 per share. If, following a reverse split at the First Tranche Scenario 1 Split Ratio, the Parent would not be in compliance
 with the continued listing standards of The Nasdaq Capital Market, including but not limited to the minimum publicly held shares
 requirement (the "Continued Listing Requirement"), the reverse split ratio shall be reduced to twelve-point-five-to-one
 (the "First Tranche Scenario 2 Split Ratio"), so that the authorised share capital of the Parent will be US$72,000,000
 divided into 240,000,000 shares comprising (i) 239,520,000 Class A Ordinary Shares, par value US$0.3 per share, (ii) 240,000 Class
 B Ordinary Shares, par value US$0.3 per share, and (iii) 240,000 Series A Preferred Shares, par value US$0.3 per share; ii) If non-compliant
 with the Continued Listing Requirement at the First Tranche Scenario 2 Split Ratio, the ratio shall be reduced to ten-to-one (the
 "First Tranche Scenario 3 Split Ratio"), so that the authorised share capital of the Parent will be US$72,000,000 divided
 into 300,000,000 shares comprising (i) 299,400,000 Class A Ordinary Shares, par value US$0.24 per share, (ii) 300,000 Class B Ordinary
 Shares, par value US$0.24 per share, and (iii) 300,000 Series A Preferred Shares, par value US$0.24 per share; iii) If non-compliant
 with the Continued Listing Requirement at the First Tranche Scenario 3 Split Ratio, the ratio shall be reduced to eight-to-one (the
 "First Tranche Scenario 4 Split Ratio"), so that the authorised share capital of the Parent will be US$72,000,000 divided
 into 375,000,000 shares comprising (i) 374,250,000 Class A Ordinary Shares, par value US$0.192 per share, (ii) 375,000 Class B Ordinary
 Shares, par value US$0.192 per share, and (iii) 375,000 Series A Preferred Shares, par value US$0.192 per share; iv) If non-compliant
 with the Continued Listing Requirement at the First Tranche Scenario 4 Split Ratio, the ratio shall be reduced to five-to-one (the
 "First Tranche Scenario 5 Split Ratio"), so that the authorised share capital of the Parent will be US$72,000,000 divided
 into 600,000,000 shares comprising (i) 598,800,000 Class A Ordinary Shares, par value US$0.12 per share, (ii) 600,000 Class B Ordinary
 Shares, par value US$0.12 per share, and (iii) 600,000 Series A Preferred Shares, par value US$0.12 per share; and v) If non-compliant
 with the Continued Listing Requirement at the First Tranche Scenario 5 Split Ratio, the ratio shall be reduced to four-to-one (the
 "First Tranche Scenario 6 Split Ratio"), so that the authorised share capital of the Parent will be US$72,000,000 divided
 into 750,000,000 shares comprising (i) 748,500,000 Class A Ordinary Shares, par value US$0.096 per share, (ii) 750,000 Class B Ordinary
 Shares, par value US$0.096 per share, and (iii) 750,000 Series A Preferred Shares, par value US$0.096 per share. The reverse split
 effected at the final compliant ratio determined by this process is referred to herein as the "First Reverse Split;" b) subsequently following the First Reverse
 Split, on a date when the closing market price per the Parent's Class A Ordinary Share is less than US$1.00, or on such date
 as any director or chief executive officer of the Parent deems advisable and may determine in his or her absolute discretion, a five-in-one
 reverse share split (the "Second Tranche Scenario 1 Split Ratio") of the Parent's authorized share capital. If,
 following a reverse split at the Second Tranche Scenario 1 Split Ratio, the Parent would not be in compliance with the Continued
 Listing Requirement, the reverse split ratio shall be reduced to two-in-one (the "Second Reverse Split"); c) subsequently following the Second Reverse
 Split, on a date when the closing market price per the Parent's Class A Ordinary Share is less than US$1.00, or on such date
 as any director or chief executive officer of the Parent deems advisable and may determine in his or her absolute discretion, a five-in-one
 reverse share split (the "Third Tranche Scenario 1 Split Ratio") of the Parent's authorized share capital. If,
 following a reverse split at the Third Tranche Scenario 1 Split Ratio, the Parent would not be in compliance with the Continued Listing
 Requirement, the reverse split ratio shall be reduced to two-in-one (the "Third Reverse Split"); and d) subsequently following the Third Reverse
 Split, on a date when the closing market price per the Parent's Class A Ordinary Share is less than US$1.00, or on such date
 as any director or chief executive officer of the Parent deems advisable and may determine in his or her absolute discretion, a five-in-one
 reverse share split (the "Fourth Tranche Scenario 1 Split Ratio") of the Parent's authorized share capital. If,
 following a reverse split at the Fourth Tranche Scenario 1 Split Ratio, the Parent would not be in compliance with the Continued
 Listing Requirement, the reverse split ratio shall be reduced to two-in-one.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) an amendment of the Parent's
 memorandum and articles of association currently in effect to reflect the Increase and Redesignation of Authorised Share Capital.

 ****

 **

***Preferred Shares Issuance***

 **

On December 23, 2025, we entered into a securities purchase agreement (the "Securities Purchase Agreement") with an investor named therein (the "Buyer"), pursuant to which we have agreed to issue and sell to the Buyer up to 5,000 Series A Convertible Preferred Shares (the "Preferred Shares") at the purchase price of US$1,000.00 for each Preferred Share (the "Preferred Shares Issuance"). The Preferred Shares Issuance is structured in two tranches and the closing of each tranche under the Securities Purchase Agreement is conditioned upon customary closing conditions and, in the case of the second closing, approval by our shareholders of an increase to our share capital and authorization for a share consolidation of our Class A Ordinary Shares.

In connection with the execution of the Securities Purchase Agreement, we adopted a Certificate of Designations (the "Certificate of Designations") of Preferred Shares, par value US$0.024 per share, creating the Preferred Shares and providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Preferred Shares, which has become effective upon such adoption. The Preferred Shares are convertible into Class A Ordinary Shares at a conversion price equal to the lower of (x) the fixed conversion price (initially US$0.7454 per share, subject to reset every three months based on the then-current market price of the Class A Ordinary Shares over a specified measurement period) and (y) 85% of the market price of the Class A Ordinary Shares over a specified measurement period. In no event will the conversion price be less than the floor price (initially US$0.149 per share, subject to periodic downward resets as specified in the Certificate of Designations). Notwithstanding the foregoing, except as we may consent to in writing, prior to May 15, 2026, we shall not issue Class A Ordinary Shares at a conversion price below US$1.00 per share.

On December 23, 2025, the closing of the first tranche of the Preferred Shares Issuance occurred and we issued 2,750 Preferred Shares to the Buyer at the purchase price of US$1,000.00 per Preferred Share.

On February 12, 2026, pursuant to the Securities Purchase Agreement, we issued a total of 2,250 Preferred Shares to the Buyer at the purchase price of US$1,000.00 per Preferred Share and closed the second tranche of the Preferred Shares Issuance. The terms of the Preferred Shares are set forth in the Certificate of Designations and the Preferred Shares are convertible into Class A ordinary shares of us, par value $0.024 per share, in accordance with the terms of the Certificate of Designations.

***Securities Exchange***

 ****

On February 10, 2026, we entered into an Amendment, Waiver and Exchange Agreement (the "Exchange Agreement") with an investor named therein (the "Holder"), pursuant to which we have agreed to issue to the Holder 6,800 Series A Convertible Preferred Shares, $0.024 par value per share (the "New Preferred Shares") in exchange of the outstanding JAK Warrants (the "Exchange Warrants") held by such Holder (the "Securities Exchange"). The New Preferred Shares are convertible into Class A ordinary shares of us, par value $0.024 per share, in accordance with the terms of the Certificate of Designations.

On February 12, 2026, the closing of the Securities Exchange occurred and we issued 6,800 New Preferred Shares to the Holder. Immediately following such issuance, the Holder relinquished all rights, title and interest in the Exchange Warrants (including any claims the Holder may have against us related thereto) and assigned the same to us and the Exchange Warrants were cancelled in their entirety.

**B. Business Overview** 

We are a leading agile office space provider in China in terms of the number of spaces, aggregate managed area and number of cities covered. Beyond physical spaces, we have built a technology-driven platform consisting of U Bazaar, a smart office system, IoT solutions and a data management system, Udata, to foster a vibrant Ucommune community by offering U Plus services to satisfy member needs.

We launched our first space in September 2015, and owned our operations in three cities as of December 31, 2025. We operate our spaces under the following two models:

 

*Self-operated Model.* We currently operate *U Space* under our self-operated model, under which we enter into leases with landlords for spaces with area generally over 200 m<sup>2</sup> each, and design and build the spaces using our proprietary SOP. We disposed of the subsidiary responsible for U studio category in December 2022 and terminated related operations, where we leased scattered and small office spaces with area generally less than 200 m<sup>2</sup> each from landlords and built the spaces using our proprietary SOP. We disposed of the subsidiary responsible for *U Design* category in October 2024 and terminated related operations, under which we provided one-stop customized services from location selection to daily operations in accordance with the specifications of our members.

Fees received under our self-operated model pursuant to member service contracts are recognized as workspace membership revenue. Fees charged to members for ancillary services under our self-operated model, such as printing and copying, are recognized as other services revenue.

 

*Asset-light Model.* We provide space design and build as well as management services to develop and manage agile office spaces for landlords who bear most of the capital investments to build out and launch new spaces. We have two categories under our asset-light model.

● *U Brand*, under which we primarily charge landlords management fees for branding, consulting and operating services.

● *U Partner*, under which we share revenue with landlords.

Fees received under U Brand category are recognized as other services revenue. Fees received under U Partner category are recognized as workspace membership revenue.

With our large-scale agile office space network, we consistently seek opportunities to provide U Plus services to improve the experience of our members and to build a vibrant Ucommune community serving wider groups of members beyond physical spaces.

To offer various U Plus services, we cooperate with third-party business partners and have strategically invested in enterprises engaging in a wide range of services.

Our investees extend our offerings and their businesses grow with our development. Cooperating with over 700 business partners, we provide a comprehensive suite of U Plus services, including:

● individual services, such as catering, fitness, healthcare, training and entertainment,

● general corporate services, such as corporate secretary, human resources, legal, finance, IT support and tax services,

● design and build services,

● incubation and corporate venturing services,

● advertising and branding services, and

● related services to serve our community.

We plan to evaluate investment opportunities, including acquiring local agile office brands with strong regional influence to develop our coverage, and companies that may support the integration of industrial chain resources for refining our one-stop space upgrade service. We may also make investments in private or public entities, enter into strategic alliances or issue securities through our parent company or subsidiaries.

In addition, we plan to explore corporate venturing. We expect the wide coverage of services provided by our investees to satisfy the evolving needs of our members. Meanwhile, we expect our investees' businesses to grow with us.

**Agile Office Space Services**

 ****

***Member Base for Agile Office Space Services***

We provide agile office space services to enterprise and individual members on a regular or as-needed basis.

*Enterprise Members*

Our unique and comprehensive network of agile office spaces covering economically vibrant regions, including all the tier-1 and new tier-1 cities in China, provides our enterprise members with flexible and cost-efficient office space solutions, particularly for their geographic development, helping them to rapidly achieve scale and enhance productivity. As of December 31, 2025, we had approximately 39,897 enterprise members ranging from large enterprises to SMEs.

Our enterprise member base is diverse in terms of size, industry and geography with a healthy mix of large enterprise members and SME members.

— *Large enterprise members*

Large enterprise members are enterprise members with 100 or more employees. Compared to SME members, large enterprise members generally occupy more workstations and enter into leases with longer terms, which offer better visibility on our future revenue. Under long-term leases for dedicated spaces of more than 100 workstations, we usually conduct large-scale customization to suit member needs.

— *SME members*

SME members are enterprise members with fewer than 100 employees. Our SME members are a significant driver of the development of our business. As our SME members develop, they typically rely on us to access more workstations and extensively utilize our suite of corporate services.

For SME members that occupy more than 20 workstations, we can conduct moderate customization such as rearranging the furniture and opening the partitions between offices, to better satisfy member needs. In addition, SMEs often lack channels and negotiating power when they seek to purchase general corporate services. As our members, they enjoy discounted rates for general corporate services and employee benefits provided by our business partners in U Bazaar.

We take pride in helping our SME members succeed. We often host events and activities in our spaces to assist SMEs members to resolve problems they encounter during different development stages of the SMEs.

We invite successful investors to our spaces to meet with SME members and provide them with the opportunities to connect with these investors and to seek advice. We also utilize our advertising, marketing and branding capabilities to promote SMEs members to help them attract users and improve brand awareness.

 

 

*Individual Members*

Our individual members consist primarily of employees of our enterprise members and freelancers. As of December 31, 2025, we had approximately 1,171,426 individual members. A large portion of our individual members using workstations have bachelor's or master's degrees and their annual incomes are higher than per capita disposable income in China.

They generally spend an average of eight hours in our spaces during a typical working day, providing us with opportunities to offer services to help their career advancement and improve the quality of their personal lives. As of December 31, 2025, approximately 4,930 of our individual members were using workstations.

 ****

***Our Operating Models***

As of December 31, 2025, we had 4 spaces across three cities of which 4 spaces were in operation, providing approximately 2,849 workstations to our members, and no space was under decoration or preparation for decoration. The following table sets forth some of our operating metrics as of the dates indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of <br> December 31, <br> 2023** | **As of <br> December 31, <br> 2024** | **As of <br> December 31, <br> 2025** |
| **Number of cities** | 53 | 7 | 3 |
| **Number of spaces** | 95 | 13 | 4 |
| Number of spaces under self-operated model<sup>(1)</sup> | 26 | 4 | 2 |
| Number of spaces under asset-light model | 69 | 9 | 2 |
| **Managed area (m<sup>2</sup>)<sup>(2)</sup>** | 466330 | 46370 | 25468 |
| Managed area under self-operated model | 51830 | 15019 | 10488 |
| Managed area under asset-light model | 414500 | 31351 | 14980 |
| **Number of spaces in operation** | 79 | 12 | 4 |
| **Number of workstations of spaces in operation<sup>(2)</sup>** | 29850 | 5844 | 2849 |
| **Number of members<sup>(2)</sup>** | 1205310 | 1210659 | 1211323 |
| Number of individual members | 1166170 | 1170837 | 1171426 |
| Number of individual members using workstations | 19120 | 4485 | 4930 |
| Number of enterprise members | 39130 | 39822 | 39897 |
| **Occupancy rate for all spaces in operation** | 62% | 73% | 65% |
| **Occupancy rate for mature spaces** | 58% | 74% | 73% |

---

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) As spaces under U Studio
 category were small offices, we counted one or more small offices operated under U Studio category in one building as one space.
 We disposed of the subsidiary responsible for U studio category in December 2022 and terminated related operations. We disposed of
 the subsidiary responsible for *U Design* category in October 2024 and terminated related operations.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Approximate number subject
 to rounding adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;(3) As spaces under U Studio
 category were small offices, we leased the entire space to members instead of leasing all or some of the workstations therein. Therefore,
 the number of workstations under U Studio category was counted by dividing the managed area of our spaces in operation under U Studio
 category by the average area per workstation of 4.5 m<sup>2</sup>.

Based on different operating models and revenue sources, we categorize our spaces into two models:

 ****

 ****

***Self-operated Model***

The self-operated model has two categories, namely U Space and U Design. We disposed of the subsidiary responsible for U studio category in December 2022 and terminated related operations, where we leased small office spaces scattered in commercial office buildings, conducted moderate alterations and provided streamlined operating services to members.

 

*U Space*

U Space is the core of our brand and community. We built our initial member base under U Space and built our brand awareness from here. Under this model, we enter into long-term leases with landlords. On average, the length of our leases under the U Space category is approximately nine years.

We design and build the space and then directly lease the space and workstations to our members. We bear the cost of leasing office buildings or floors from the landlords and expenses on design and build and operation of the spaces.

We generate revenue by directly leasing spaces to members and charging monthly rent in the form of membership service fees or office workstation rental fees. We also generate revenue by leasing storefronts, restaurants and workstations to our business partners who occupy our spaces to provide services to our members. As of December 31, 2025, we had two spaces under the U Space category, all of which were spaces in operation with approximately 806 workstations available for members.

 ****

***Asset-light Model***

The asset-light model has two categories, namely U Brand and U Partner. Under both subcategories, we are responsible for operating the spaces and we can deliver our members the same quality services that we provide in U Space. As we enter into other cities and countries under the asset-light model, we can provide our members with spaces in more geographical locations.

As of December 31, 2025, we had two spaces under the asset-light model with managed area of approximately 14,980m<sup>2</sup>, representing 59% of the aggregate managed area of approximately 25,468 m<sup>2</sup> of all spaces. In 2023, 2024 and 2025, we generated operating profit from the subsidiary that operates agile office spaces under our asset-light model. We intend to focus on developing our asset-light business.

*U Brand*

Under this model, landlords engage us to design and build spaces in accordance with our standards and landlords bear the associated costs. Alternatively, landlords can deliver us fully furnished spaces that meet our standards of design and functions. As such, U Brand does not require us to incur significant capital investments to build and launch new spaces. Under this model, our revenue consists of:

● consultation fees relating to branding, design and build services,

● management fees for operating services, and

● under certain contracts, incentive fees based on the financial performance of the spaces.

As of December 31, 2025, we had two spaces under the U Brand category, only one in operation with 484 workstations available for members.

 

 

*U Partner*

We are making substantial effort in exploring a new operation category, U Partner, and launched our first space under U Partner category in July 2019. Under this model, we enter into partnerships with landlords, where the landlords offer the right to use spaces and we operate and manage the spaces under our brand. The landlords deliver us fully furnished spaces that meet our standards of design and functions. If the landlords engage us to design and build the spaces, we charge separate service fees for providing such services.

We generate revenue under a revenue sharing mechanism with landlords. As of December 31, 2025, we had 1 spaces under the U Partner category with approximately 1,559 workstations available for members.

 ****

***Our Space Offerings***

We aim to provide one-stop office space solutions to members. We provide our members with offices and workstations to help ensure that they can find the most suitable office solutions from our spaces.

● Standard workstations: Standard workstations are dedicated workstations in shared offices.

● On-demand workstations: On-demand workstations are flexible workstations in open spaces. Members who do not need to use workstations every day can book on-demand workstations in our agile office spaces on as-needed basis.

● Private offices and customized offices: Private offices and customized offices are independent enclosed office spaces that are customized depending on the needs and scale of the members.

Our spaces offering includes certain basic services and amenities free of charge, including high-speed internet access, reception services, package handling, security services, office furniture and stationery, lounge and common area and shared kitchen and pantry.

Our spaces also feature various smart functions that aim to improve our members' experience. Facial-recognition and smart monitoring systems are available in the majority of our spaces. As of December 31, 2025, cloud access control had been installed in approximately 71.43% of our spaces; and approximately 78.57% of our conference rooms were equipped with smart conferencing systems, featuring screen casting and video conferencing. Our members can host video conferences across departments and geographical locations.

Our spaces are equipped with air quality sensors, as well as temperature and humidity sensors that generate significant data into our data analytics platform to help with operational and space improvement. Our smart operating systems, connected to power panels and lights in our spaces, can control lights, air conditioners and other devices automatically based on feedback from the sensors in our spaces.

We also provide our members with cloud-based printing services. Members can upload the documents to our smart office system, and print from printers of their choice in our spaces by logging into their user accounts and scanning QR codes to process payment for printing.

 ****

***Our Smart Platform***

Our members can access our service offerings through U Bazaar in a quick and convenient way. U Bazaar is integrated with our smart office system, IoT devices and other technology capabilities to create a seamless working experience for our members in and beyond physical spaces. For more details of U Bazaar and our smart platform, see "— Technology."

Our members can also enjoy various enterprise-level and individual-level services provided by us and our business partners and investees through U Bazaar and our smart platform. For more details, see "— U Plus Services."

 ****

 ****

***Development and Management of our Agile Office Spaces***

 

*Sourcing*

We established our brand by opening Ucommune spaces in centrally located business districts in tier-1 cities. In selecting potential locations for our spaces, we focus on demographics, population density, GDP growth and the surrounding neighborhood. We select locations to cater to the needs and business goals of our target members. We plan to implement our sourcing strategy while we develop in tier-1 cities and enter into new tier-1 cities in China and overseas.

We have strong working relationships and a successful track-record cooperating with China's leading commercial real estate developers and owners as well as local governments, as we can address their concerns and challenges in today's changing environment. Real estate developers and owners seek to enter into long-term leases with customers to generate steady income, which makes agile office space a natural fit for their business models. Local governments hope to support new start-ups to attract young working professionals to cities and space providers, contributing to urban transformation.

Our strong brand and operating capabilities and integrated community of large member base make us a valuable partner for these landlords. Our spaces also bring more foot traffic to surrounding office buildings and shopping malls and improve the neighborhood where our spaces are located. The foregoing factors allow us to address landlord needs and enable us to secure long-term leases at prime locations at favorable rental rates, effectively lowering our real estate procurement costs.

 

*Product Line Development*

Based on factors including redevelopment costs, location and standards of decoration and office facilities, we have developed three product lines based on different design standards, i.e., premium, superior and standard, which can satisfy the various needs and different budgets of our members.

— *Premium Product Line* 

Our premium product line serves as flagship Ucommune spaces and are critical to our branding. As our top product line, it features premium facilities and decor.

— *Superior Product Line* 

We develop the superior product line with high-end facilities and decor. As of December 31, 2025, we had three spaces under our superior product line, all of which were in operation with approximately 1,290 workstations available for members.

— *Standard Product Line* 

We develop our standard product line by utilizing the original facilities and decor and conduct necessary modelling. As of December 31, 2025, we had one space under our standard product line, including one space in operation with approximately 1,559 workstations available for members.

 

*Management* 

Our management team has a deep understanding of and rich experience in operating chain commercial real estate space, such as hotels and serviced apartments. Combined with our refined SOP on agile office space operations, we have significantly streamlined and simplified the operation of our spaces while maintaining our superior services that our members expect.

Led by our management team, we have an experienced operating and community management team including, among others, more than 20 operating staff with hotel operation or other service industry experience. We offer training to our operating staff on various aspects of space operation, including facilities and amenities maintenance, cleaning, security and other services. We also provide an operating guidance manual, which serves as a reference when the operating staff encounters problems in daily operations.

 

 

*Operating Efficiency* 

We have achieved high efficiency as a result of our development and management capabilities. As of December 31, 2025, one operating staff operated on average approximately 1,273.4 m<sup>2</sup> of our spaces in China.

Furthermore, the profitability profile of our agile office space services is partly driven by the maturity of our agile office spaces, or the period a space has been open to our members. Once a space reaches maturity, occupancy is generally stable, our initial investment in build-out and sales and marketing to acquire members is complete and the space typically generates recurring revenue and cash flow. As of December 31, 2025, the overall occupancy rate for our 4 total spaces in operation and 3 mature spaces was approximately 65% and 73%, respectively. We experienced decreased occupancy rates as a result of the recovery of market demand and adjustment of promotion policy in 2025.

**U Plus Services**

In addition to agile office space services, we seek to provide comprehensive services to empower our members, which we refer to as U Plus services, to improve the experience of our members and to build a vibrant Ucommune community serving wider group of members beyond physical spaces.

We are dedicated to providing services by ourselves or through our business partners and investees. Business partners are third-party service providers who, through our spaces or technology-driven platform, sell services to our members. We screen and select reputable business partners through a rigorous screening process to help ensure that the quality of services they provide meet our standards. As of December 31, 2025, we had cooperated with over 700 business partners to provide U Plus services ranging from office services to lifestyle, from general corporate services to advertising and branding services, and from self-development to social networking.

Our individual members using workstations generally spend an average of eight hours in our spaces during a typical working day, establishing rapport with our community and generating significant traffic and data. We have developed Udata, our data management system, which applies data analytics and AI algorithms to analyze and provide us with a better understanding of our members' needs and preferences, enabling us to offer upgraded and satisfactory services to our members. For more details of Udata, see "— Technology — Udata."

Utilizing our offering of U Plus services and technology capabilities, we have experienced growth in our member base, increasing from approximately 1,205,310 as of December 31, 2023, to 1,210,659 as of December 31, 2024, and further to 1,211,323 as of December 31, 2025.

In addition to improving member experience, we have launched online and offline initiatives to increase our member loyalty. We host various events in our spaces, such as reading clubs, career development training and entrepreneur forums, to strengthen the connection among our members and between our members and our business partners and investees, fostering a vibrant community even outside working hours.

Furthermore, we have started to engage in community e-commerce, attracting members and their social contacts to participate in discounted sales of products. Through online orders and offline deliveries to our spaces, we bring value to our members and business partners while creating a vibrant and interactive Ucommune community.

We receive revenue from members by providing U Plus services and charging members fees based on services provided, such as design and build services and advertising and branding services. We also generate revenue from our business partners and investees through different arrangements, including:

● revenue sharing arrangements under which we share part of the revenue of our business partners as fees, and

● fixed fee arrangements under which we charge our business partners and investees fixed fees for leasing our spaces to provide services.

Under a typical agreement for revenue sharing arrangements with our business partners:

● business partners provide services in designated agile office spaces and are primarily responsible for operation and maintenance,

● we provide utilities and ancillary services to support the services provided in the agile office spaces,

● business partners share revenue with us in accordance with the pre-agreed proportion of their monthly/quarterly service income and may enjoy a one-month complimentary trial operating period, and

● our cooperation with business partners has one-to-two-year terms.

Under a typical agreement for fixed fee arrangements with our business partners:

● business partners provide services in designated agile office spaces and are primarily responsible for operations and maintenance,

● we provide utilities and ancillary services to support the services provided in the agile office spaces,

● business partners pay fixed-fees per month/quarter/year for leasing our spaces and may enjoy a one-month complimentary trial operating period, and

● our cooperation with business partners has one-to-two-year terms.

Under our current arrangements, we provide a handful of our business partners with one-off complimentary trial operating periods ranging from one to three months in a few selected cases, at the beginning of our revenue sharing or fixed-fee arrangements, which do not materially increase our cost of revenue (excluding impairment loss). As our member base grows, we are exploring diversified monetization channels to serve our community.

 ****

***Individual Services***

By cooperating with over 700 business partners, we offer comprehensive individual services to improve the experience of our individual members and help them to achieve self-development. Such services include corporate secretarial, cafeteria, café, gyms, self-service supermarkets, vending machines, massage chairs, sleep pods, training and entertainment at agile office spaces.

Individual members access the offered services necessary for their work and lifestyles either within our spaces or through U Bazaar in a place where they spend their working hours. We also provide individual members with opportunities to interact with each other, supporting a cohesive culture among employees of enterprise members and fostering a vibrant community even outside working hours.

 ****

***General Corporate Services***

Start-up companies of smaller scale often lack negotiating power or experience when they seek to purchase services. As our members, they enjoy preferential rates for services from our business partners.

Because of our large member base and density of foot traffic in our spaces, we can select high-quality service providers and negotiate discounts on behalf of our members. Our members not only save time on selecting and subscribing services, but also enjoy discounted rates to lower their costs and expenses, which increase member loyalty.

 ****

In addition, we have consolidated general corporate services on U Bazaar, enabling our enterprise members to access such services on one single platform. The general corporate services provided to enterprise members cover a wide range of services, including corporate secretarial, finance, legal, human resources, tax, trademark and intellectual property registration, software, healthcare and travel services, making us as an integrated general corporate service platform.

 ****

***Incubation Services and Corporate Venture***

We cooperate with our business partners to provide incubation services. We have many start-up members with high demand for financing and mentoring services, such as identifying and addressing market opportunities, and advising on government policies. Through hosting events in our spaces, we and our business partners invite entrepreneurs and mentors to share experiences on early-stage projects with start-up founders, and make connections with business partners and potential investors.

From time to time, we also provide venture financing to companies that develop our service offerings and refine our ecosystem. We expect the wide coverage of services provided by our investees to enable us to keep satisfying the evolving needs of our members.

 ****

***Advertising and Branding Services***

In December 2018, we acquired a 51% equity interest in Shengguang Zhongshuo, a digital marketing services provider co-founded in June 2015 by Guangdong Advertising Group, one of the largest advertising companies in China. Since its inception, Shengguang Zhongshuo has helped companies formulate tailor-made digital marketing strategies in their respective industries, including the internet, automobile, finance, electronics and consumer goods. Shengguang Zhongshuo has won numerous awards and accolades, such as the Golden Award granted at the Kerui International Innovation Festival and the Golden Bi Te Award granted at the Mobile Intelligent Marketing Conference in 2018.

On July 21, 2025, Xinjiang Xinyouzhong Marketing Co., Ltd. ("Xinjiang Xinyouzhong"), an indirectly wholly-owned subsidiary of the Company, entered into an equity transfer agreement with Singularity Digital Marketing (Guangzhou) Co., Ltd. ("Singularity Digital"), a company incorporated in the PRC and a related party of the Company. Pursuant to the agreement, Xinjiang Xinyouzhong agrees to sell, and Singularity Digital agrees to purchase, all of Xinjiang Xinyouzhong's 51% equity interest in Shengguang Zhongshuo, for an aggregate consideration of RMB16.0 million. The transaction has been completed in accordance with the terms of the agreement. Furthermore, the sales of the Company's equity interest in Shengguang Zhongshuo represents its complete exit from all marketing and branding services operations.

 ****

***Related Services to Our Community***

The nature of our business, i.e., providing office space solutions, results in our individual members spending long hours in our physical spaces. Our individual members using workstations generally spend an average of eight hours in our spaces during a typical working day, establishing rapport with our Ucommune community and generating significant traffic and data.

Coupled with our business partners and investees and our technology capabilities, we have launched initiatives, such as community e-commerce and precision marketing, to build a vibrant community serving wider group of members beyond physical spaces.

 

*Community E-commerce*

We analyze the preferences and behavior of our members and launched our community e-commerce initiative, U Product, in August 2019. We partner with emerging or established brands to conduct sales of high-quality products at favorable prices to our members and their social contacts by utilizing our physical spaces and online platform. We obtain favorable discounts from sellers because:

● delivery of products occurs onsite within our spaces, which reduces delivery costs of the sellers,

● orders are made on our online platform, which allows the sellers to pre-plan production to control costs and manage inventories, and

● our community operating staff shares product information with members in our spaces and are rewarded when our members make purchases.

We do not charge members processing fees for the purchase of products through our U Product platform. As U Product is a relatively new service, as of the date of this annual report, we did not charge partnered brands fees for their sale of products on our platform to promote community e-commerce and improvement in product offerings and user experience. In the future, we plan to charge partnered brands fees for selling products through our U Product platform.

Through our members' word-of-mouth referrals through social networks, our platform has attracted a large base of members. As we promote community e-commerce in more spaces and offer broader selection of products, we can draw WeChat mini program users to U Bazaar by offering more products and better prices on U Bazaar, which we believe will significantly increase our member network and business partner base, helping us to keep member acquisition costs low.

*Precision Marketing*

Using traffic from our large member base and technology capabilities to analyze the large amount of data on our platform, making available screens and digital displays in our spaces and in-app push on U Bazaar, we help advertisers, members and business partners understand consumers' needs and preferences to deliver precision marketing online and offline. Our precision marketing services also empower more merchants in surrounding areas by connecting them with our members.

**Discontinued Operations**

On October 26, 2024, the series of contractual arrangements entered into by and among Youshenghengtong Technology, Ucommune Venture and/or its shareholders were terminated and by which time Ucommune Venture and its subsidiaries were deconsolidated, and certain businesses of the Company were disposed accordingly. The disposal of interior design and construction business represented a strategic shift that had a major effect on the Company's operations and financial results, and was accounted for as discontinued operation. Accordingly, assets, liabilities, results of operations, and cash flows related to interior design and construction business have been reflected in the accompanying consolidated financial statements as discontinued operation for all periods presented.

On July 21, 2025, Xinjiang Xinyouzhong Marketing Co., Ltd. ("Xinjiang Xinyouzhong"), an indirectly wholly-owned subsidiary of the Company, entered into an equity transfer agreement (the "Agreement") with Singularity Digital Marketing (Guangzhou) Co., Ltd. ("Singularity Digital"), a related party controlled by Mr. Zhenfei Wu, Chief Marketing Officer of the Group. Pursuant to the Agreement, Xinjiang Xinyouzhong sold all of Xinjiang Xinyouzhong's 51% equity interest in Zhuhai Shengguang Zhongshuo Digital Marketing Co., Ltd. ("Shengguang Zhongshuo") to Singularity Digital for an aggregate consideration of RMB16,000.

The disposal of marketing and branding services business represented a strategic shift that had a major effect on the Group's operations and financial results, and was accounted for as discontinued operation. Accordingly, assets, liabilities, results of operations, and cash flows related to marketing and branding business have been reflected in the consolidated financial statements as discontinued operation for all periods presented.

**Technology**

Technology enables us to operate our spaces with high efficiency and build an integrated platform to serve and empower our members online and offline. Our research and development team, consisting of 9 staff with extensive internet- and technology-industry backgrounds, focuses on optimizing our systems based on business development, data analytics and member feedback. We plan to invest in technology to refine our data analytics and technologies capabilities to improve our operating efficiency and drive monetization opportunities.

***Udata***

Udata is our proprietary data management system for storing, cleaning and processing data. We systematically store and organize unstructured data in our data pool and then store the data on the data processing platform as structured datasets. We utilize AI technology, including machine learning algorithms, and other data processing and statistics tools to automate modelling exercises to find meaningful correlations and intelligent patterns to generate actionable and effective insights from data.

Udata is one of the key drivers for management of our member base and enhancement of member loyalty. It enhances our ability to provide more services meeting members' demands and preferences. Udata also helps us explore diversified monetization opportunities, such as community e-commerce and precision marketing businesses.

 ****

***U Bazaar***

U Bazaar is our official app for members, consolidating various functions and services enabled by other operation systems. Through U Bazaar, members can manage access, including facial recognition access, to our spaces at their level of authorization and control the amenities in their dedicated space. Integrated with our smart conferencing system and Rocket Calendar, an emerging meeting and scheduling tool, U Bazaar provides our members with meeting scheduling, conference room booking, appointment reminders, and visitor management features.

U Bazaar is also a one-stop service platform, providing members with convenient access to comprehensive services provided by us and our business partners and investees. U Bazaar also functions as a social platform, creating connections among our members and between our members and our business partners, fostering a vibrant community around our brand.

 ****

***UDA System***

UDA is our proprietary agile office space operating system. Our UDA system manages our assets, contracts, occupancy data, conference room data, member information and profiles and third-party resources. It is integrated with our customer relations management system ("CRM"), and financial reporting system. Our UDA system enables us to monitor our operations and occupancy on real-time basis and is highly scalable. It provides real-time insights into the performance of our business and provides support to our development under our asset-light model.

 **

***Smart Advertising and Branding System***

 

***Smart Office System***

Our smart office system consists of three major components: smart conferencing system, access control system and UcomOS office operating system.

 

*Smart Conferencing System*

Our smart conferencing system, integrated with U Bazaar, manages the availability and booking of our conference rooms. Screen casting and video conferencing can be enabled through our smart conferencing system and allows members to have video conferences across departments, locations and cities without modifying their current network or having to pre-install software. As of December 31, 2025, approximately 78.57% conference rooms were equipped with smart conferencing systems.

 

 

*Access Control System*

Our artificial intelligence-powered access control system enables centralized management of access to our spaces. We use facial recognition technology to control access. Once members and visitors upload their pictures onto U Bazaar, our access control system allows members and visitors with proper authorization to enter our spaces.

We also use QR codes and Bluetooth-enabled access control technology to allow members and visitors to enter our spaces by using their mobile devices. As of December 31, 2025, most of our agile office spaces were equipped with facial recognition access control, and cloud-based security system cover almost all of our agile office spaces.

 

*UcomOS*

UcomOS is our proprietary cloud office operating system. UcomOS implements a system-level cloud architecture that allows members to enjoy simplified and convenient services, such as content searching and cloud-based printing, achieving a consistent office experience almost anywhere, anytime. UcomOS can be fully integrated with commonly used office systems and software to help ensure a smooth on boarding process for our members.

 ****

***Hui Office***

In June 2019, we launched Hui Office, an office space leasing platform designed to present available office spaces of various sizes, conditions and locations on one single platform. By consolidating information of various office spaces into one single platform, we can help office space providers and potential customers to reach each other in a reliable and efficient way. Under our standard contract with office space providers, we will charge them fixed fees for using the Hui Office brand, listing spaces on the Hui Office platform and using our operating system to operate Hui office spaces.

**Privacy and Data Security**

We have implemented internal rules and policy governing the use and sharing of personal and business data that we collect. Our access to user data is on a strict "need-to-know" basis. We have also developed protocols, technologies and systems to implement such rules and policy. Data encryption and masking are implemented to help ensure data safety.

Our members must acknowledge the terms and conditions of the user agreement before using our spaces or our app.

**Intellectual Property**

We develop and protect our intellectual property portfolio by registering our patents, trademarks, copyrights and domain names. We have also adopted a comprehensive set of internal rules for intellectual property management.

We develop proprietary SOP on agile office space operations. We also own the copyrights of major systems that power our operations, including Udata, U Bazaar, UDA system, UcomOS and Hui Office. For our systems that are not proprietary, we enter into licensing arrangements on reasonable terms to help ensure our right of use.

**Branding, Marketing and Sales**

We have built a strong brand by providing superior experience and distinguished value proposition to our members and business partners. Our highly recognizable brand allows us to develop through word-of-mouth. Active on social media, we regularly interact with our members and business partners to promote our brand and the Ucommune spaces.

Our dedicated sales and marketing team, supported by our integrated operation systems, conduct promotion of our agile office spaces. We occasionally engage real estate agents to conduct offline sales in targeted neighborhoods. We also cooperate with industrial zones, enterprises and organizations to conduct marketing and sales.

We use data analytics and strategically place advertisements on third-party online information platforms such as *58.com* and *Ganji.com* to attract potential members. Our self-developed algorithm proactively searches for potential members on those third-party online information platforms and make recommendations based on the profiles of potential members.

**Competition**

We compete in an emerging and competitive industry for the following:

●  ***Locations:*** The development of our business depends on our ability to source suitable real estate for management under our self-operated model and asset-light model.

●  ***Members:*** While the number of companies and individuals seeking agile office space solutions is growing, we compete to acquire new members and retaining existing members.

●  ***Business Partners:*** Our ability to continue to attract and retain quality business partners and to obtain favorable pricing for our members from such business partners depends on our ability to grow our member base and effectively match our members' needs with the services provided by our business partners.

●  ***Technology:*** Technology drives the development and operating efficiencies of our business. We need to develop better operating systems and more user-friendly apps to remain competitive.

●  ***Personnel:*** Employees are our most valuable assets. We compete with our peer company to retain and recruit talented employees by providing competitive compensation and development opportunities to our employees.

We believe that we are leading the competition in the agile office space industry on the basis of the above factors. However, some of our competitors may have more resources than we do, and may be able to devote greater resources than we can to develop their business and market shares. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — We face vigorous competition. If we are not able to compete effectively with others, our business, financial condition and results of operations may be materially and adversely affected."

**Insurance**

Consistent with industry practices, we maintain three types of insurance: public liability insurance, third-party liability insurance and property all risks insurance. We consider our insurance coverage to be sufficient for our business operations in China.

**Regulation**

This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.

 ****

 ****

***Regulations Relating to Foreign Investment***

 

*Guidance Catalogue of Industries for Foreign Investment*

Investment activities in the PRC by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, which was promulgated and is amended from time to time by MOFCOM and NDRC. In June 2017, MOFCOM and NDRC promulgated a revision of the Guidance Catalogue of Industries for Foreign Investment (the "Catalogue"), which became effective in July 2017. Industries listed in the Catalogue are divided into three categories: encouraged, restricted and prohibited. Industries not listed in the Catalogue are generally deemed as constituting a fourth "permitted" category.

On September 6, 2024, MOFCOM and NDRC promulgated the Special Entry Management Measures (Negative List) for the Access of Foreign Investment (2024 Version) (the "Negative List"), effective on November 1, 2024. According to the Negative List, the proportion of foreign investment in a value-added telecommunications business (excluding e-commerce business, domestic multi-party communications, store-and-forward and call center) shall not exceed 50%. In addition, foreign investments in internet cultural business (except for music) and radio and television program production and operation business are prohibited.

Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and most recently amended in March 2022 and became effective on May 1, 2022 (the "FITE Regulations"), unless otherwise promulgated, the ultimate foreign equity ownership in a VATS provider may not exceed 50%.

In June 2015, MIIT issued the Circular on Removing the Restrictions on Equity Ratio Held by Foreign Investors in Online Data Processing and Transaction Processing (Operating E-Commerce) Business to amend the relevant provisions in the FITE Regulations, allowing foreign investors to own more than 50% of equity interest in a VATS provider that "conducts e-commerce" business. However, other requirements provided by the FITE Regulations (such as the track record and experience requirement for a major foreign investor) still apply, and foreign investors are still prohibited from holding more than 50% of equity interest in a provider of other subcategories of VATS.

 

*Foreign Investment Law (2019)*

The National People's Congress adopted the Foreign Investment Law of the PRC (the "Foreign Investment Law"), on March 15, 2019, which came into effect on January 1, 2020 and replaced the existing laws governing foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law. The organization form, organization and activities of foreign-invested enterprises shall be governed, among others, by the Company Law of PRC and the Partnership Enterprise Law of PRC.

According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment and are subject to a negative list management system. Pre-entry national treatment means that the treatment given to foreign investors and their investment at the stage of investment access is not lower than that of domestic investors and their investments. The negative list management system means that the state implements special administrative measures for access of foreign investment in specific fields.

Foreign investors shall not invest in prohibited fields stipulated in the negative list and shall meet the conditions stipulated in the negative list before investing in any restricted fields. Foreign investors' investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.

On December 26, 2019, the State Council promulgated the Implementation Rules to the Foreign Investment Law, which became effective on January 1, 2020. The implementation rules further clarify that the state encourages and promotes foreign investment, protects the lawful rights and interests of foreign investors, regulates foreign investment administration, continues to optimize foreign investment environment, and advances a higher-level opening of the Chinese market for foreign investors.

On December 30, 2019, MOFCOM and the SAMR, jointly promulgated the Measures for Information Reporting on Foreign Investment, which became effective on January 1, 2020. Pursuant to the Measures for Information Reporting on Foreign Investment, where a foreign investor carries out investment activities in China directly or indirectly, the foreign investor or the foreign-invested enterprise shall submit the investment information to the competent commerce department.

 ****

 ****

***Regulations Relating to Leasing Properties***

Pursuant to the Administration of Urban Real Estate Law of the PRC, which was promulgated by the SCNPC in July 1994 and most recently amended and came into effect in January 2020, a written lease contract shall be entered into between the lessor and the lessee for leasing a property. The contract shall include the terms and conditions such as the term, purpose and price of leasing and liability for maintenance and repair, as well as other rights and obligations of both parties. The contract shall be filed for registration and record with the real estate administration department.

The Administrative Measures for Commercial House Leasing were promulgated by Ministry of Housing and Urban-Rural Development in December 2010, and became effective in February 2011. These measures set out specific rules for commercial house leasing. Houses may not be leased in any of the following circumstances:

● the house is an illegal structure;

● the house fails to meet mandatory engineering construction standards with respect to safety and disaster preventions;

● the house usage is changed in violation of applicable regulations; and

● other circumstances prohibited by laws and regulations.

The lessor and the lessee shall register and file with the local property administration authority within thirty days after entering into the lease contract. Non-compliance with such registration and filing requirements shall be subject to fines from RMB1,000 to RMB10,000 provided that they fail to rectify within required time limits.

 ****

***Regulations Relating to Fire Prevention***

 

*Fire Prevention Design Approval and Filing*

The Fire Prevention Law of the PRC (the "Fire Prevention Law"), was adopted in April 1998 and was most recently amended in April 2021. According to the Fire Prevention Law and other relevant laws and regulations of the PRC, the Ministry of Emergency Management and its local counterparts at or above county level shall monitor and administer the fire prevention affairs. The Fire Prevention Law provides that the fire prevention design or construction of a construction project must conform to national fire prevention technical standards.

Pursuant to Notice of the Adjustments to the Functions, Structure and Staffing of the Ministry of Housing and Urban-Rural Development issued by the General Office of the CPC Central Committee and the General Office of the State Council on September 13, 2018, the review and examine function of fire protection designs for construction projects of the Ministry of Public Security was assigned to the Ministry of Housing and Urban-Rural Development.

According to the requirement of the Fire Prevention Law and Interim Provisions on the Administration of the Fire Protection Design Review and Final Inspection of Construction Projects (the "Interim Provisions"), which became effective in June 2020 and were amended in August 2023, the housing and urban-rural development authorities of the local government at or above the county level (the "fire protection design review and final inspection authorities") shall undertake fire protection design review, fire protection final inspection and recordation and random inspection of construction projects within their respective administrative regions. For construction projects that satisfy certain criteria (the "special construction projects"), the construction institutions shall apply for fire prevention design review and approval.

For construction projects other than the foregoing (the "other construction projects"), the construction institutions shall provide fire protection design drawings or technical information as needed for construction when applying for a construction permit or a construction commencement report. If fire protection design drawings or technical information as needed for construction fail to be submitted, the relevant authority shall neither issue a construction permit nor approve the construction commencement report. According to the Interim Provisions, and the Measures for the Administration of Construction Permits for Construction Projects, for a construction project with an investment amount less than RMB300,000 or a construction area less than 300 m<sup>2</sup>, the fire prevention design approval or the provision of fire protection design drawings or technical information is not required.

 

 

*Fire prevention As-built Acceptance Check and Filing*

According to the requirements of the Fire Prevention Law and the Interim Provisions, upon completion of a construction project to which a fire prevention design has been applied, such project must undergo an as-built acceptance check on fire prevention by, or filed with the fire protection design review and final inspection authorities. For special construction projects, the construction institutions shall, prior to use and operation of any business thereof, apply for a safety acceptance check on fire prevention.

For other construction projects, the construction institutions shall submit the filing for as-built inspection of the project. For a construction project whose investment is less than RMB300,000 or whose construction area is less than 300 m<sup>2</sup> the fire prevention as-built acceptance check or filing is not required.

The construction institutions that (1) carry out a construction project of which the required fire prevention design is required to be approved but such design has not been approved or has failed the examination, or (2) put into use a construction project which is required to undergo a fire prevention acceptance check but the project has not undergone such acceptance check or has failed the acceptance check, shall be ordered to suspend construction, usage, production or operations and be imposed a fine of RMB30,000 to RMB300,000 by competent government authorities. The construction institutions who fail to submit the filing for as-built inspect to the competent department of housing and urban-rural development, will be ordered to effect rectifications and be imposed a fine of not more than RMB5,000 by such department.

 

*Fire Safety Inspection*

The Fire Prevention Law requires that the construction institution or institutions using such venue apply to the fire prevention department of the public security authority of the local people's government at or above the county level for a fire safety inspection before a public gathering place is put into use or opens for business. Public gathering places that have not undergone or have failed the fire safety inspection shall not be put into use or carry out business.

 ****

***Regulations Relating to Value-Added Telecommunication Services***

In September 2000, the State Council issued the Telecommunications Regulations of PRC (the "Telecom Regulations"), which were amended in February 2016, as the primary governing law on telecommunication services. The Telecom Regulations set out the general framework for the provision of telecommunication services by PRC companies. Under the Telecom Regulations, telecommunications service providers must procure operating licenses prior to their commencement of operations. The Telecom Regulations draw a distinction between "basic telecommunications services" and VATSs.

A "Catalog of Telecommunications Business" was issued as an attachment to the Telecom Regulations to categorize telecommunications services as basic telecommunications services or VATS. In December 2015, MIIT released the Catalog of Telecommunication Business (2015 Version) (the "2015 Telecom Catalog"), effective in March 2016 and most recently amended in June 2019. Under the 2015 Telecom Catalog, both the online data processing and transaction processing business (i.e., operating e-commerce business) and information service business, continue to be categorized as VATSs. The information service business as defined under the 2015 Telecom Catalog includes information release and delivery services, information search and query services, information community platform services, information real-time interactive services, and information protection and processing services.

In March 2009, MIIT issued the Administrative Measures for Telecommunications Business Operating Permit (the "Telecom Permit Measures,") which became effective in April 2009 and were most recently amended in July 2017. The Telecom Permit Measures confirm that there are two types of telecom operating licenses for operators in China: licenses for basic telecommunications services and licenses for VATS. The Telecom Permit Measures set forth the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.

Under these regulations, a commercial operator of VATS must first obtain a VATS License from the MIIT or its provincial level counterparts. Otherwise, such operator might be subject to sanctions including corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains and, in the case of significant infringements, closure of websites.

In September 2000, the State Council promulgated the Administrative Measures on Internet Information Services (the "Internet Measures"), which were most recently amended in January 2011. Under the Internet Measures, operators engage in commercial internet information services shall obtain a VATS License for internet information service (the "ICP License"), from the relevant government authorities before engaging in any commercial internet information services operations within China.

In addition to the Telecommunications Regulations and other regulations above, the apps are specially regulated by the Regulations for the Administration of Mobile Internet Applications Information Services (the "APP Provisions"), which were promulgated by the CAC in June 2016 and became effective in August 2016, and were amended in August 2022. Pursuant to the APP Provisions, the APP information service providers shall satisfy relevant qualifications required by laws and regulations, strictly carry out the information security management responsibilities and fulfill their obligations in various aspects relating to the real-name system, protection of users' information and the examination and management of information content.

Our consolidated affiliated entity, Beijing U Bazaar, which is also our main on-line operating entity, has obtained a VATS License for the online data processing and transaction processing business (i.e., operating e-commerce business) and information service business (only for internet information services, except for information search and query services, information community platform services, information real-time interactive services, and information protection and processing services).

 ****

***Regulations Relating to E-Commerce***

In January 2014, SAIC, the predecessor of SAMR, adopted the Administrative Measures for Online Trading (the "Online Trading Measures"). The Online Trading Measures set forth requirements for anyone engaging in online trading and related services within China. Operators engaging in online commodity trading and related services shall undergo industrial and commercial registration in accordance with the law. When selling commodities or providing services to consumers, online commodity operators shall observe the Law on the Protection of Consumer Rights and Interests, the Product Quality Law and provisions of other laws, regulations and rules and shall not infringe on the consumers' legitimate rights and interests.

In addition, when collecting or using information about consumers or operators in business activities, online commodity operators and related service operators shall follow the principles of legality, legitimacy and necessity, explicitly state the purposes, manners and scopes of collecting and using information, and obtain the consent of those from whom information is collected. When collecting or using information about consumers or operators, online commodity operators and related service operators shall disclose their collection and use rules and shall not collect or use information in violation of laws and regulations and the agreement between both parties.

Online commodity operators and related service operators and their staff must strictly keep confidential, and may not divulge, sell or illegally provide others with the data and information about personal information of consumers or trade secrets of operators they collected. Online commodity operators and related service operators shall take technical measures and other necessary measures to ensure information security and prevent information from being divulged or lost. When any information divulgence or loss occurs or may occur, remedial actions shall be taken immediately.

The SCNPC enacted the E-Commerce Law of the PRC or the E-Commerce Law in August 2018, which became effective in January 2019. The E-commerce Law proposes a series of requirements on e-commerce operators including individuals and entities carrying out business online, e-commerce platform operators and merchants on the platform. For example, the operators shall respect and equally protect consumers' legitimate rights and provide options to consumers without targeting their personal characteristics, and also requires e-commerce operators to clearly point out to consumers their tie-in sales in which additional services or products are added by merchants to a purchase, and not to assume consumers' consent to such tie in sales by default. The e-commerce platform operators must establish a credit evaluation system and publicize the credit evaluation rules, and to provide consumers with ways to evaluate products sold or services provided within the platform.

According to the E-Commerce Law, e-commerce platform operators who fail to take necessary actions when they know or should have known that the merchants within the platform infringe others' intellectual property rights or the products or services provided by the merchants do not meet the requirements for personal and property security, or otherwise infringe upon consumers' legitimate rights, will bear joint liability with such merchants. With respect to the products or services affecting consumers' life and health, the e-commerce platform operators will be held jointly liable with the merchants if they fail to review the qualifications of merchants or fail to safeguard the interests of the consumers.

 ****

***Regulations Relating to Advertising Business***

The SAMR is the primary governmental authority regulating advertising activities in China. Regulations that apply to the advertising business primarily include the Advertisement Law of the PRC (the "Advertisement Law"), promulgated by the SCNPC in October 1994 and most recently amended in April 2021, and the Administrative Regulations for Advertising (the "Advertising Regulations"), promulgated by the State Council in October 1987 and which has been effective since December 1987.

According to the Advertisement Law and the Advertising Regulations, companies that engage in advertising activities must obtain, from the SAMR or its local branches, a business license, which specifically includes operating an advertising business in its business scope. Enterprises engaged in the advertising business with such advertising business in its business scope do not need to apply for an advertising operation license. The Advertising Law and the Advertising Regulations set certain content requirements for advertisements, including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest.

Advertisers, advertising agencies, and advertising distributors must ensure that the content of the advertisements they prepare or distribute is true and in complete compliance with applicable laws. In providing advertising services, advertising operators and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws and regulations. Prior to distributing advertisements subject to government censorship and approval, advertising distributors are obligated to confirm that such censorship has been performed and approval has been obtained.

Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. Where serious violations occur, the SAMR or its local branches may suspend their advertisement publishing business or revoke such offenders' business licenses.

On February 25, 2023, the SAMR issued the Measures for the Administration of Internet Advertising, effective on May 1, 2023 ("the Measures"). The Measures defines internet advertising as any commercial advertising that directly or indirectly promotes goods or services through websites, webpages, internet applications and other internet media in the forms of words, picture, audio, video or others. According to the Measures, an internet advertisement must be identifiable and clearly identified as an "advertisement" to the consumers. Paid search advertisements are required to be clearly distinguished from natural search results. Internet advertisement publishers must verify relevant supporting documents and check the content of the advertisement and are prohibited from publishing any advertisement with unverified content or without all the necessary qualifications.

 ****

***Regulations Relating to Internet Information Security and Privacy Protection***

The MIIT issued the Several Provisions on Regulating the Market Order of Internet Information Services (the "Several Provisions"), in December 2011, which became effective in March 2012. Pursuant to the Several Provisions, internet information service providers may not collect any users' personal information or provide any such information to third parties without the consent of the user.

An internet information service provider must expressly inform the users of the method, content and purpose of the collection and processing of such users' personal information and may only collect information necessary for the provision of its services. An internet information service provider is also required to properly maintain the users' personal information, and in case of any leak or likely leak of the users' personal information, the internet information service provider must take immediate remedial measures and, in severe circumstances, immediately report to the telecommunications authority.

The SCNPC has issued the Decision on Strengthening Internet Information Protection in December 2012. Pursuant to this decision, the State protects the electronic information that can identify the personal identity of citizens and that involves privacy of citizens. No organization or individual may obtain the personal electronic information of citizens by steal or other illegal means, nor sell or illegally provide certain information others. The Decision further set out the requirement for the internet service providers.

When collecting or using the personal electronic information of citizens in their business activities, the internet service providers shall follow the principle of lawfulness, properness and necessity, explicitly disclose their purposes, methods and scopes for collection and use of the information, and, upon consent of the information providers, may collect or use information without violation of the provisions of the laws and regulations and the agreement of both parties. Where the internet service providers collect and use the personal electronic information of citizens, they shall disclose the rules for such collection and use.

The network service providers as well as their personnel must keep in strict confidence of the personal electronic information of citizens collected in their business activities. They shall not divulge, distort or damage such information, or shall not sell or illegally provide certain information to others. Furthermore, the network service provider shall take technical measures and other necessary measures to ensure information security and prevent the disclosure, damage or loss of any personal electronic information of citizens collected in their business activities. In case of occurrence or possible occurrence of such disclosure, damage or loss of information, remedial measures shall be immediately taken.

Furthermore, MIIT's Provisions on Protection of Personal Information of Telecommunications and Internet Users which was promulgated in July 2013 and became effective September 2013, contain detailed requirements on the use and collection of personal information as well as security measures required to be taken by telecommunications business operators and internet information service providers.

Pursuant to the Ninth Amendment to the Criminal Law issued by the SCNPC in August 2015 which became effective November 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders, shall be subject to criminal penalty for the result of:

● any dissemination of illegal information in large scale;

● any severe effect due to the leakage of the client's information;

● any serious loss of criminal evidence; or

● other severe situation.

Any individual or entity that (1) sells or provides personal information to others in a way violating the applicable law, or (2) steals or illegally obtains any personal information, shall be subject to criminal penalty in severe situation. In addition, the Interpretations of the Supreme People's Court and the Supreme People's Procuratorate of the PRC on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringing Personal Information, issued in May 2017 and effective June 2017, clarified certain standards for the conviction and sentencing of the criminals in relation to personal information infringement.

The SCNPC promulgated the Cyber Security Law, which became effective in June 2017, to protect cyberspace security and order. Pursuant to the Cyber Security Law, any individual or organization using the network must comply with the Constitution and the applicable laws, follow the public order and respect social moralities, and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others.

The Cyber Security Law sets forth various security protection obligations for network operators, which are defined as "owners and administrators of networks and network service providers", including, among others, complying with a series of requirements of tiered cyber protection systems, verifying users' real identity, localizing the personal information and important data gathered and produced by key information infrastructure operators during operations within the China and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes.

On June 10, 2021, the SCNPC promulgated the PRC Data Security Law, which became effective in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure (the "Regulations"), which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the "Personal Information Protection Law"), which became effective in November 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (1) an individual's consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking; (2) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and the impact on the individual's rights; and (3) where personal information operators reject an individual's request to exercise his or her rights, the individual may file a lawsuit with a People's Court.

On January 1, 2025, the State Council promulgated the Regulations on the Administration of Cyber Data Security (the "Regulation"). The Regulation is not only the first at the administrative regulation level specifically for cyber data security, but it also serves as a comprehensive implementing regulation for the compliance requirements set out by the Cybersecurity Law, Cyber Security Law, and Personal Information Protection Law. The Regulations introduces several key obligations, including requiring network data handlers to specify the purpose and method of personal information processing, as well as the types of personal information involved, before any personal information is handled. It also establishes broader contractual requirements for data sharing between data handlers.

On December 28, 2021, the CAC, jointly with other 12 governmental authorities, promulgated the revised Cybersecurity Review Measures, which became effective on February 15, 2022. According to the Cybersecurity Review Measures, critical information infrastructure operators that intend to purchase internet products and services which may have an adverse effect on national security must apply for cybersecurity review. Meanwhile, online platform operators holding personal information of over one million users that intend to list their securities on a foreign stock exchange must apply for cybersecurity review.

 ****

 ****

***Regulations Relating to Intellectual Property in the PRC***

 

*Trademark*

Pursuant to the Trademark Law of the PRC (the "Trademark Law"), which was most recently amended in November 2019, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to goods for which the use of such trademark has been approved. The period of validity of a registered trademark shall be ten years, counted from the day the registration is approved.

According to the Trademark Law, using a trademark that is identical to or similar to a registered trademark in connection with the same or similar goods without the authorization of the owner of the registered trademark constitutes an infringement of the exclusive right to use a registered trademark. The infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action and pay damages.

*Patents*

Pursuant to the Patent Law of the PRC (the "Patent Law"), as most recently amended in June 2021, a patentable invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability. The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications.

 

A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application date. Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder.

 

*Copyright*

Pursuant to the Copyright Law of the PRC (the "Copyright Law"), as most recently amended in June 2021, copyrights include personal rights such as the right of publication and that of attribution as well as property rights such as the right of production and that of distribution. Reproducing, distributing, performing, projecting, broadcasting or compiling a work or communicating the same to the public via an information network without permission from the owner of the copyright therein, unless otherwise provided in the Copyright Law, shall constitute infringements of copyrights.

The infringer shall, according to the circumstances of the case, undertake to cease the infringement, take remedial action, offer an apology and pay damages. Pursuant to the Computer Software Copyright Protection Regulations promulgated in December 2001 and amended in January 2013, the software copyright owner may undergo registration formalities with a software registration authority recognized by the State Council's copyright administrative department. The software copyright owner may authorize others to exercise that copyright, and is entitled to receive remuneration.

*Domain Name*

Domain names are protected under the Administrative Measures on the Internet Domain Names promulgated by the MIIT in August 2017 and became effective in November 2017. The MIIT is the major regulatory authority of the domain names. The registration of domain names in China is on a "first-apply-first-registration" basis. A domain name applicant will become the domain name holder upon completion of the application procedure.

 ****

 ****

***Regulations Relating to Tax in the PRC***

 

*Income Tax*

The Enterprise Income Tax Law of the PRC (the "Enterprise Income Tax Law"), was promulgated in March 2007 and was most recently amended in December 2018. The Enterprise Income Tax Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects.

Under the Enterprise Income Tax Law, an enterprise established outside China with "de facto management bodies" within China is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation regulations to the Enterprise Income Tax Law, a "de facto management body" is defined as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.

In April 2009, the Ministry of Finance ("MOF"), and SAT, jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business ("Circular 59"). In December 2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises ("Circular 698"). Both Circular 59 and Circular 698 became effective retroactively as of January 2008.

In February 2011, SAT issued the Notice on Several Issues Regarding the Income Tax of Non-PRC Resident Enterprises ("SAT Circular 24"), which became effective in April 2011. By promulgating and implementing these circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-resident enterprise.

In February 2015, SAT issued the Notice on Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises ("SAT Circular 7"), to supersede existing provisions in relation to the indirect transfer as set forth in Circular 698, while the other provisions of Circular 698 remain in force. SAT Circular 7 introduces a new tax regime that is significantly different from that under Circular 698.

SAT Circular 7 extends its tax jurisdiction to capture not only indirect transfers as set forth under Circular 698 but also transactions involving transfer of immovable property in China and assets held under the establishment and placement in China of a foreign company through the offshore transfer of a foreign intermediate holding company. SAT Circular 7 also addresses transfer of the equity interest in a foreign intermediate holding company broadly.

In addition, SAT Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings. However, it also brings challenges to both the foreign transferor and transferee of the indirect transfer as they have to determine whether the transaction should be subject to PRC tax and to file or withhold the PRC tax accordingly. In October 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, ("SAT Circular 37"), which was amended in June 2018.

SAT Circular 37 superseded the Non-resident Enterprises Measures and SAT Circular 698 as a whole and partially amended some provisions in SAT Circular 24 and SAT Circular 7. SAT Circular 37 purports to clarify certain issues in the implementation of the above regime, by providing, among others, the definition of equity transfer income and tax basis, the foreign exchange rate to be used in the calculation of withholding amount, and the date of occurrence of the withholding obligation. Specifically, SAT Circular 37 provides that where the transfer income subject to withholding at source is derived by a non-PRC resident enterprise in instalments, the instalments may first be treated as recovery of costs of previous investments. Upon recovery of all costs, the tax amount to be withheld must then be computed and withheld.

 

*Value-added Tax*

Pursuant to the Provisional Regulations on Value-added Tax of the PRC which was promulgated in December 1993 and most recently amended in November 2017 and its implementation rules, all entities or individuals in the PRC engaging in the sale of goods, the provision of processing services, repairs and replacement services, and the importation of goods are required to pay value-added tax. A value-added tax rate at 6%, 11% or 17% applies to the PRC enterprises unless otherwise exempted or reduced according to the value-added tax Regulations and other relevant regulations. However, the Value-added Tax Law of the People's Republic of China, adopted by the SCNPC on December 25, 2024, came into force as of January 1, 2026, repealing simultaneously the Provisional Regulations on Value-added Tax of the PRC, which further clarified the relevant provisions on Value-added tax.

Pursuant to the Circular on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax which was promulgated in March 2016 and most recently amended on in December 2017, upon approval of the State Council, the pilot program of the collection of value-added tax in lieu of business tax shall be promoted nationwide in a comprehensive manner as of May 1, 2016. All taxpayers of business tax engaged in the building industry, the real estate industry, the financial industry and the life service industry shall be included in the scope of the pilot program with regard to payment of value-added tax instead of business tax.

Pursuant to the Circular of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-added Tax Rates which was promulgated on April 4, 2018 and became effective on May 1, 2018, by MOF and SAT, where a taxpayer engages in a taxable sales activity for the value-added tax purpose or imports goods, the previous applicable tax rates of 17% and 11% shall be adjusted to 16% and 10%. Furthermore, pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform promulgated by MOF, SAT and the General Administration of Customs of PRC on March 20, 2019 and became effective on April 1, 2019, the currently applicable value-added tax rate of 16% shall be adjusted to 13%, and the value-added tax rate of 10% shall be adjusted to 9%.

 ****

***Regulations Relating to Labor Protection in the PRC***

 

*Labor Law and Labor Contract Law*

According to the Labor Law of the PRC (the "Labor Law"), which was promulgated by the SCNPC in July 1994, became effective in January 1995, and was most recently amended in December 2018, an employer shall develop and improve its rules and regulations to safeguard the rights of its employees, and shall develop and improve its labor safety and health system, stringently implement national protocols and standards on labor safety and health, conduct labor safety and health education for workers, guard against labor accidents and reduce occupational hazards.

The Labor Contract Law of the PRC (the "Labor Contract Law"), which was promulgated by the SCNPC in June 2007, became effective in January 2008, and was most recently amended in December 2012, and the Implementation Regulations on Labor Contract Law, promulgated and effective in September 2008, regulate both employer and the employee and contain specific provisions involving the terms of the labor contract. Pursuant to the Labor Contract Law, employers shall establish employment relationships with employees on the date that they start employing employees.

To establish employment, a written employment contract shall be concluded, or employers will be liable for the illegal actions. Furthermore, enterprises and institutions are prohibited from forcing the laborers to work beyond the time limit and the employers shall pay laborers overtime working compensation in accordance with national regulations. In addition, the labor wages shall not be lower than local standards on minimum wages and shall be paid to the laborers timely.

***Regulations on Social Insurance and Housing Provident Fund***

According to the Social Insurance Law of the PRC effective as of July 1, 2011, and as amended on December 29, 2018, the Regulations on Occupational Injury Insurance effective as of January 1, 2004 and as amended on December 20, 2010, the Interim Measures concerning the Maternity Insurance for Enterprise Employees effective as of January 1, 1995, the Interim Regulations concerning the Levy of Social Insurance effective as of January 22, 1999 and most recently amended on March 24, 2019, enterprises and institutions in the PRC shall provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, occupational injury insurance and medical insurance.

An enterprise must provide social insurance by processing social insurance registration with local social insurance agencies, and shall pay or withhold relevant social insurance premiums for or on behalf of employees. If an employer does not pay the full amount of social insurance premiums as required by law, the social insurance premium collection institution shall order the employer to make the payment or make up the difference within the stipulated period and impose a daily surcharge equivalent to 0.05% of the overdue payment from the date on which the payment is overdue. If such overdue payment is not made within the stipulated period, the relevant administration government department shall impose a fine from one to three times the amount of overdue payment.

According to the Regulations on the Administration of Housing Provident Fund, which was promulgated in and became effective in April 1999, and was most recently amended in March 2019, the employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited. The employer shall process housing provident fund payment and deposit registrations with the housing provident fund administration center.

With respect to companies who violate the above regulations and fail to process housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees, such companies shall be ordered by the housing provident fund administration center to complete such procedures within a designated period. Those who fail to process their registrations within the designated period shall be subject to a fine ranging from RMB10,000 to RMB50,000.

When companies violate these regulations and fail to pay up housing provident fund contributions in full amount as due, the housing provident fund administration center shall order such companies to pay up within a designated period, and may further apply to the People's Court for mandatory enforcement against those who still fail to comply after the expiration of such period.

 ****

***Regulations Relating to Foreign Exchange***

 

*General Administration of Foreign Exchange*

According to the Regulations on Foreign Exchange Administration of the PRC (Revised in 2008) which were promulgated by the State Council on January 29, 1996, came into effect on April 1, 1996, and were last revised on August 5, 2008, RMB is convertible into other currencies for the purpose of current account items, such as trade related receipts and payments, payment of interests and dividends. Current account foreign exchange income may, in accordance with relevant provisions of the PRC, be retained or sold to any financial institution engaged in foreign exchange settlement and sales business. The conversion of RMB into other currencies and remittance of the converted foreign currency outside the PRC for the purpose of capital account items, such as direct equity investments, loans and repatriation of investment, require the prior approval from SAFE or its local branches.

Payments for transactions that take place within the PRC must be made in RMB. Unless otherwise approved, PRC companies may repatriate foreign currency payments received from abroad or retain the same abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks under the current account items subject to a cap set by SAFE or its local branches. Pursuant to the Notice of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment ("SAFE Circular No. 59") which was promulgated on November 19, 2012, became effective on December 17, 2012 and was revised on May 4, 2015 and October 10, 2018, the approval is not required for the opening of an account entry in foreign exchange accounts under direct investment or for domestic transfer of the foreign exchange under direct investment.

SAFE Circular No. 59 also simplifies the capital verification and confirmation formalities for foreign invested enterprises, the foreign capital and foreign exchange registration formalities required for the foreign investors to acquire the equity interests and foreign exchange registration formalities required for the foreign investors to acquire the equity interests of Chinese party, and further improves the administration on exchange settlement of foreign exchange capital of foreign invested enterprises.

In light of The Circular of the SAFE on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment ("SAFE Circular No. 13"), promulgated on February 13, 2015 and effective on June 1, 2015, to improve the efficiency on foreign exchange management, the SAFE has cancelled the administrative approvals of foreign exchange registration of direct domestic investment and direct overseas investment. In addition, SAFE Circular No. 13 simplifies the procedure of registration of foreign exchange and investors shall register with banks to have the registration of foreign exchange under the condition of direct domestic investment and direct overseas investment.

The Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises ("SAFE Circular No. 19"), which was promulgated on March 30, 2015 and became effective as of June 1, 2015, adopts the approach of discretional foreign exchange settlement. The discretionary settlement of the foreign exchange capital of foreign-invested enterprises refers to that the settlement of foreign exchange capital in the capital accounts of foreign-funded enterprises that have been subject to the confirmation of cash capital contribution at foreign exchange authorities (or the entry registration of cash contribution at banks) may be handled at banks based on the enterprises' actual requirements for business operation.

The proportion of discretional settlement of foreign exchange capital of foreign-funded enterprises is temporarily determined as 100%. SAFE may, based on the international balance of payments, adjust the aforesaid proportion at appropriate times.

The Notice of the SAFE on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts ("SAFE Circular 16"), was promulgated and became effective on June 9, 2016. According to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency into RMB on discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital, foreign debts and repatriated funds raised through overseas listing) on a discretionary basis, which applies to all enterprises registered in China.

SAFE Circular 16 reiterates the principle that RMB converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or expenditure prohibited by laws and regulations of PRC and may not be used for investments in securities or other investment with the exception of bank financial products that can guarantee the principal within China unless otherwise specifically provided. In addition, the converted RMB may not be used to make loans for unrelated enterprises unless it is within the business scope nor to build or to purchase any real estate that is not for the enterprise own use with the exception for the real estate enterprise.

 ****

***Regulations in Relation to Offshore Investment***

Pursuant to the Circular on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles ("Circular No. 37"), which was promulgated by SAFE and became effective on July 4, 2014, a domestic resident shall, before contributing the domestic and overseas lawful assets or interests to a special purpose vehicle, apply to the foreign exchange office for foreign exchange registration of overseas investments.

In addition, in the event of any change of basic information of the overseas special purpose vehicle such as the individual shareholder, name or operation term, or if there is a capital increase, decrease, equity transfer or swap, merge, spin-off or other amendment of the material items, the domestic resident shall complete the modification of foreign exchange registration procedures for offshore investment. Upon the completion of the overseas financing, the special purpose vehicle shall comply with the related provisions on Chinese foreign investment and foreign debt administration if the capital financed is repatriated for use within the territory of China. Failure to comply with the registration procedures as set out in SAFE Circular 37 may result in penalties.

The SAFE Circular No. 13 has further revised Circular No. 37 by requiring domestic residents to register with qualified banks rather than SAFE or its local counterparts in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

 ****

***Regulations Relating to Dividend Distributions***

The principal regulations governing distribution of dividends of wholly foreign-owned enterprises, include the PRC Company Law, the Foreign Investment Law and the Implementing Regulations of the Foreign Investment Law. Under these regulations, wholly foreign-owned enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with the PRC accounting standards and regulations. In addition, FIEs in the PRC are required to allocate at least 10% of their accumulated profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends.

 ****

 ****

***Regulations Relating to Stock Incentive Plans***

Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company ("Circular 7"), issued by SAFE in February 2012, employees, directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company and complete certain other procedures.

In addition, SAT has issued certain circulars concerning employee share options or restricted shares. Under these circulars, the employees working in the PRC who exercise share options or are granted restricted shares will be subject to PRC individual income tax. The PRC subsidiaries of such overseas listed company have obligations to file documents related to employee share options or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options. If the employees fail to pay or the PRC subsidiaries fail to withhold their income taxes according to relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities.

 ****

***Regulations Relating to Mergers and Acquisitions and Overseas Listing***

On August 8, 2006, six PRC governmental agencies jointly promulgated the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rules"), which became effective on September 8, 2006, and were amended on June 22, 2009. The M&A Rules require that if an overseas company established or controlled by PRC companies or individuals ("PRC Citizens"), intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to MOFCOM for approval. For a detailed description of the risks associated with the M&A Rules, see "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions".

On February 17, 2023, the CSRC promulgated the Trial Measures of the Overseas Securities Offering and Listing by Domestic Companies (the "Overseas Listing Trial Measures") and related guidelines, which became effective on March 31, 2023. Pursuant to the Overseas Listing Trial Measures, domestic enterprises that (1) offer shares, depository receipts, convertible notes or other equity securities overseas, or (2) list securities on an overseas stock exchange, must complete record-filing procedures and report the relevant information to the CSRC.

Pursuant to the Overseas Listing Trial Measures, domestic enterprises that directly or indirectly offer or list securities on an overseas stock exchange shall file with the CSRC within three business days after submitting their initial public offering and/or listing application documents. Issuers already listed on an overseas stock exchange which offer securities to be listed on an overseas stock exchange shall file with the CSRC within three business days after the completion of such offering, see "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — Recent regulatory development in China may exert more oversight and control over listings and offerings that are conducted overseas. The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing."

**C. Organizational Structure**

The following chart shows our corporate structure as of February 28, 2026, including our principal subsidiaries and the VIEs. The Nasdaq-listed entity is the Parent, Ucommune International Ltd, and the public shareholders are purchasing the equity interests of the Parent. The VIEs and our principal subsidiaries are the operating entities.

![](ea028275601_img2.jpg)

The Parent is not a Chinese operating company but a Cayman Islands holding company with operations conducted by our subsidiaries and through contractual arrangements with the VIEs based in China, and this structure involves unique risks to investors. The VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies, and investors may never hold equity interests in the Chinese operating companies. Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in VATSs and certain other businesses. We currently conduct our VATS business through Beijing U Bazaar, including value-added online services for our members. The VIE structure would afford us greater flexibility in developing our business scope and implementing our business strategies in compliance with PRC laws and regulations in the future as our business develops. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. If the PRC government deems that our contractual arrangements with the consolidated VIEs domiciled in China do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. In addition, to the extent cash is located in the PRC or within a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations placed on us by the PRC government. To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of the Parent, our subsidiaries or the VIEs by the PRC government to transfer cash. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure."

**Contractual Arrangements with the VIEs and Their Respective Shareholders**

Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in VATSs and certain other businesses. We are a company incorporated in the Cayman Islands. We currently conduct our VATS business through Beijing U Bazaar, including value-added online services for our members.

The Parent and our subsidiaries operate our business mainly through the VIEs in the PRC, based on a series of contractual arrangements. As of December 31, 2023, 2024 and 2025, the consolidated VIEs accounted for an aggregate of 90.4%, 46.9% and 58.8%, respectively, of our consolidated total assets and 96.2%, 75.8% and 47.0%, respectively, of our consolidated total liabilities. In 2023, 2024 and 2025, the consolidated VIEs accounted for an aggregate of 100.0%, 99.8% and 92.0%, respectively, of our consolidated total net revenue. See our consolidated financial statements and the related notes included elsewhere in this annual report.

The following is a summary of the contractual arrangements by and among Youshenghengtong Technology, Beijing U Bazaar and the shareholder of Beijing U Bazaar. For the complete text of these contractual arrangements, see the copies filed or incorporated by reference as exhibits to the annual report filed with the SEC.

These contractual arrangements enable the Parent to:

● receive the economic benefits that could potentially be significant to the consolidated VIEs in consideration for the services provided by our subsidiaries;

● be the primary beneficiary of contractual arrangements with the consolidated VIEs; and

● hold an exclusive option to purchase all or part of the equity interests and an exclusive option to purchase all or part of the assets in the consolidated VIEs when and to the extent permitted by PRC law.

As a result of these contractual arrangements, the Parent is considered the primary beneficiary of the VIEs and consolidate their operating results in our financial statements under U.S. GAAP.

In the opinion of Jingtian& Gongcheng, our PRC legal counsel, the contractual arrangements described below are valid, binding and enforceable under current PRC law. However, these contractual arrangements may not be as effective in providing control as direct ownership. There are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations.

According to our PRC counsel, if the agreements that establish the structure for operating our VATS business and related business do not comply with PRC government restrictions on foreign investment in such businesses, we could be subject to severe penalties including being prohibited from continuing operating such business. For a description of the risks related to these contractual arrangements and our corporate structure, please see "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure."

 ****

***Exclusive Business Cooperation Agreement***

Under the exclusive business cooperation agreement dated May 20, 2019, Youshenghengtong Technology has agreed to provide the following services (among others) to Beijing U Bazaar:

● the provision of technical support and marketing services, including, but not limited to consultancy, collection and research of information thereof, support and training for employees, services related to customers and order management;

● the provision of services related to the transfer, leasing and disposal of equipment or assets;

● the development, maintenance and updates of computer system, hardware and database;

● the licensing of software legally owned by Youshenghengtong Technology; and

● the development of application software and related updates and operational support.

Beijing U Bazaar has agreed to pay fees up to its and its subsidiaries' after-tax profit to Youshenghengtong Technology. This agreement was effective from May 20, 2019 and will continue to be effective unless it is terminated by written notice of Youshenghengtong Technology or, or until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee under the exclusive purchase option agreement.

***Equity Pledge Agreement***

Beijing U Bazaar and its shareholders entered into an equity pledge agreement with Youshenghengtong Technology, dated May 20, 2019. Under such equity pledge agreement, each of the shareholders of Beijing U Bazaar agreed to pledge its respective equity interest in Beijing U Bazaar to Youshenghengtong Technology to secure their obligations under the exclusive option agreement, shareholders' voting rights proxy agreement, and exclusive business cooperation agreement. Each of such shareholders further agreed to not transfer or pledge his or her respective equity interest in Beijing U Bazaar without the prior written consent of Youshenghengtong Technology. The equity pledge agreement will remain binding until the pledgers discharge all their obligations under the above-mentioned agreements.

On June 26, 2023, the then shareholder of Beijing U Bazaar transferred 100% equity interests in Beijing U Bazaar to one of our employees. In connection with this transfer, on June 26, 2023, such employee entered into a new series of contractual arrangements, including equity pledge agreement, exclusive option agreement and voting rights proxy agreement, with Youshenghengtong Technology and Beijing U Bazaar on terms substantially similar to the previous ones, and the contractual arrangements previously entered into on May 20, 2019 were terminated on the same date.

On May 15, 2024, the then shareholder of Beijing U Bazaar transferred 100% equity interests in Beijing U Bazaar to another two of our employees. In connection with this transfer, on May 17, such two employees entered into a new series of contractual arrangements, including equity pledge agreement, exclusive option agreement and voting rights proxy agreement, with Youshenghengtong Technology and Beijing U Bazaar on terms substantially similar to the previous ones, and the contractual arrangements previously entered into on June 26, 2023 were terminated on the same date.

We have completed the registration of equity pledge of Beijing U Bazaar with the relevant offices of the SAMR (formerly, the SAIC).

 

***Exclusive Option Agreement***

Under the exclusive option agreement entered into by Youshenghengtong Technology, Beijing U Bazaar and the shareholders of Beijing U Bazaar, dated May 20, 2019, shareholders of Beijing U Bazaar granted Youshenghengtong Technology or its designee an option to purchase all or a portion of their respective equity interest in Beijing U Bazaar for the minimum amount of consideration permitted by PRC law. Under the exclusive option agreement, Beijing U Bazaar granted Youshenghengtong Technology or its designee an option to purchase all or a portion of the assets of Beijing U Bazaar or its subsidiaries for the minimum amount of consideration permitted by PRC law.

Each of Beijing U Bazaar and its shareholders agreed not to transfer, mortgage or permit any security interest to be created on any equity interest in or assets of Beijing U Bazaar without the prior written consent of Youshenghengtong Technology. The exclusive option agreement shall remain in effect until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee, or until all parties agree in writing to terminate the agreement, or until Youshenghengtong Technology unilaterally terminates the agreement by written notice.

On June 26, 2023, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the exclusive purchase option agreement previously entered into on May 20, 2019 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholder of Beijing U Bazaar.

On May 17, 2024, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the exclusive purchase option agreement previously entered into on June 26, 2023 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholders of Beijing U Bazaar.

***Shareholders' Voting Rights Proxy Agreement***

Under the shareholders' voting rights proxy agreement among Youshenghengtong Technology, Beijing U Bazaar and shareholders of Beijing U Bazaar, dated May 20, 2019, each of the shareholders of Beijing U Bazaar, agreed to irrevocably entrust Youshenghengtong Technology or its designee to represent it to exercise all the voting rights and other shareholders' rights to which it is entitled as a shareholder of Beijing U Bazaar. The shareholders' voting rights proxy agreement shall remain effective until all of the equity interests in or assets of Beijing U Bazaar have been acquired by Youshenghengtong Technology or its designee under the exclusive option agreement, or until Youshenghengtong Technology unilaterally terminates the agreement by written notice.

On June 26, 2023, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the shareholders' voting rights proxy agreement previously entered into on May 20, 2019 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholder of Beijing U Bazaar.

On May 17, 2024, in connection with the transfer of equity interests in Beijing U Bazaar as discussed above, the shareholders' voting rights proxy agreement previously entered into on June 26, 2023 was terminated, and a new one on substantially similar terms was entered into among Youshenghengtong Technology, Beijing U Bazaar and the new shareholders of Beijing U Bazaar.

**D. Property, Plants and Equipment**

We lease the properties for our agile office spaces. For more information on our spaces, see "Item 4. Information on the Company — B. Business Overview — Agile Office Space Services."

In addition to our leased agile office spaces and offices, as of December 31, 2025, we had self-owned properties in China with an aggregate area of approximately 4,967.97 m<sup>2</sup>. We believe that our existing facilities are sufficient for our current need.

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

None.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

In this Item, "we," "us," "our company," "our" or "Ucommune" refers to Ucommune International Ltd, a Cayman Islands company, its subsidiaries and the consolidated VIEs. The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains forward-looking statements. See "Forward-Looking Information." Our actual results may differ materially from those anticipated in these forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption "Item 3. Key Information — D. Risk Factors" in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. For discussion of year-over-year comparisons between 2024 and 2023 that are not included in this annual report on Form 20-F, refer to "Item 5. Operating and Financial Review and Prospects" found in our Form 20-F for the year ended December 31, 2024, that was filed with the Securities and Exchange Commission on April 28, 2025.

**A. Operating Results**

**Overview**

Our brand is one of the most recognized agile office space brands in China. We had 4 agile office spaces across three cities as of December 31, 2025.

As of the same date, we had 4 spaces in operation or ready for operation, providing approximately 2,849 workstations to our members. As of December 31, 2025, we had approximately 1,211,323 members, including approximately 1,171,426 individuals and 39,897 enterprises, ranging from large enterprises to SMEs.

We have been developing our asset-light model, under which we provide space design and build as well as management services to develop and manage agile office spaces for landlords who bear most of the capital investments to build and launch new spaces. The asset-light model allows more landlords to benefit from our professional capabilities and strong brand recognition, which in turn enables our business to scale in a cost-efficient manner.

As of December 31, 2025, we had two spaces under the asset-light model with managed area of approximately 14,980 m<sup>2</sup>, representing 59% of the aggregate managed area of approximately 25,468 m<sup>2</sup> of all spaces. In 2023 and 2024, we generated operating profit from the subsidiary that operates agile office spaces under our asset-light model. In 2025, we generated operating loss from the subsidiary that operates agile office spaces under our asset-light model. We intend to focus on developing our asset-light business.

Cooperating with over 700 business partners, we provide a comprehensive suite of U Plus services, including individual services, such as catering, fitness, healthcare, training and entertainment; general corporate services, such as corporate secretary, human resources, legal, finance, IT support and tax services; incubation and corporate venturing services; design and build services; advertising and branding services; and services to further energize our community.

We receive revenue from members by providing U Plus services and charging members fees based on the services provided, such as design and build services, and advertising and branding services. We also generate revenue from our business partners and investees through different arrangements, including (1) revenue sharing arrangements under which we share part of the revenue of our business partners as fees, and (2) fixed fee arrangements under which we charge our business partners fixed fees for leasing our spaces to provide services.

**Key Factors Affecting Our Results of Operations**

We operate in China's agile office space industry, and our results of operations and financial condition are influenced by the macroeconomic factors affecting this industry. These factors include China's economic growth, the emergence of China's new economy and internet companies under favorable policies encouraging entrepreneurship and innovation, and urbanization of the workforce.

Our financial condition and results of operations are also affected by a number of emerging market trends, such as companies' rising needs for cost-efficient and flexible office space solutions and one-stop services for both corporates and employees, and new demand for intelligent office systems and working environments.

Our results of operations and financial condition are also subject to changes in the regulatory regime governing China's agile office space industry, as well as the U Plus services we provide. The PRC government regulates various aspects of our operations, such as leasing, design and build and the operation of office spaces and online advertising and branding content. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — Regulation and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us to liability for information displayed on our website."

Our workspace membership services revenues decreased in 2023, partially due to closures of unprofitable spaces primarily caused by the COVID-19 outbreak. The COVID-19 outbreak has resulted in, and may intensify global economic distress, and the extent to which it may affect our financial condition, results of operations, and cash flows in 2022 and beyond will depend on future developments, which are highly uncertain and cannot be reasonably estimated at this time. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — We face risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt our operations."

Our results of operations and financial condition also depend on a number of company-specific factors, including the factors discussed below.

 ****

***Our Ability to Refine our Agile Office Space Network***

Given that an important portion of our net revenue is from workspace membership, our net revenue development depends on our ability to refine our agile office space network and develop our community. Since the launch of our first agile office space in September 2015, we derive substantially all of our net revenue from operations within Greater China.

We have developed an asset-light model by providing landlords with our design and build and operation capabilities. Our asset-light model has two categories, i.e., U Brand and U Partner. Under U Brand, we primarily receive management fees from landlords. Under U Partner, we primarily share revenue with landlords. We operate agile office spaces under our asset-light model through one subsidiary.

Our spaces under the asset-light model decreased from 69 as of December 31, 2023 to 9 as of December 31, 2024 and decreased to 2 as of December 31, 2025. As a result of our agile office space network, our business may be exposed to additional risks. For example, our impairment loss on property and equipment and right-of-use assets was RMB2.9 million (US$0.4 million) in 2025, as compared to RMB1.0 million in 2024, primarily associated with the spaces where carrying value is not expected to be fully recoverable.

The changes in impairment loss on long-lived assets and long-term prepaid expenses are affected by various factors, primarily including our spaces in operation and the new operating risks and challenges associated with our development into existing markets and new markets, and therefore are subject to fluctuations. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — Our development into new regions, markets and business areas may pose increased risks." However, we believe that we can improve the performance of our spaces in operation leveraging on our management capabilities and our experience of developing into new markets.

 ****

***Our Ability to Manage Costs and Expenses Effectively***

Our ability to manage our costs and expenses effectively is critical to the success of our business. We have benefited from the use of technologies and the standardization of our processes and achieved economies of scale as we have developed a core competency in the efficient sourcing, design and build, and operation of our spaces. Building on our operating capabilities, we have also developed an asset-light model, which can free up a large amount of capital investments to build out and launch new spaces.

The financial and business performance of our agile office spaces under the U Space category highly depends on our ability to source and lease suitable properties on reasonable terms. We plan to utilize our management team's expertise in developing and operating commercial properties and our strong relationships with landlords to identify new locations suitable for the development of our business and to negotiate leasing terms of such properties to effectively manage our costs and expenses.

Our design and build capabilities enable us to shorten the time from taking possession of a new space to making the space ready for leasing to members. We typically complete this process within three to five months for spaces under the U Space category, compared to the industry average of approximately six months.

We expect our costs and expenses to increase in absolute amount as we develop our business and to decrease a percentage of our net revenue as we improve operational efficiency, achieve economies of scale and enhance our brand recognition.

 ****

***Our Member Base and Pricing of Our Agile Office Space Services***

We generate an important portion of our net revenue from providing various agile office space solutions to our members from whom we collect monthly rent in the form of membership service fees in accordance with membership service contracts or office workstation rental fees in accordance with office workstation rental contracts. The key contract terms and services provided under both membership service contracts and office workstation rental contracts are identical. Therefore, our results of operations are directly affected by the growth in our member base and the pricing of our agile office space services. The number of individual members using workstations decreased from approximately 19,120 as of December 31, 2023 to approximately 4,485 as of December 31, 2024, and increased to approximately 4,930 as of December 31, 2025.

The pricing of our agile office space services is affected by our service positioning strategy, locations of our spaces, brand recognition, the competitive landscape of the agile office space industry in China and the design and build and maintenance cost of our agile office spaces. Our ability to maintain or increase the pricing of our agile office space services largely depends on our ability to compete effectively and differentiate our services through our strong brand recognition, our unique and nationwide agile office space network and our ability to meet our members' needs for office space solutions.

 ****

***Development of U Plus Services***

We derive revenue from U Plus services in cooperation with our business partners. As of December 31, 2024, we had over 700 business partners. Our member base has grown from approximately 1,205,310 as of December 31, 2023, to approximately 1,210,659 as of December 31, 2024, and further to approximately 1,211,323 as of December 31, 2025. As our business develops, we have opportunities to provide more services and build a vibrant community serving wider group of members beyond the physical spaces.

The development of our net revenue from U Plus services depends on our own capabilities, including through acquisitions or strategic investments, or through selected quality business partners to provide services that match the needs of our members at reasonable prices. We will make ongoing efforts, including investing time and money, to identify the needs of our members and provide quality and diversified services to them.

 ****

***Acquisition Activities to Develop Our Offerings***

We have made acquisitions or investments that we believe will develop our agile office space network and service offerings that benefit our members and have the potential to become meaningful revenue streams in the future. We intend to continue selectively pursuing strategic partnerships and acquisitions, which could include investments in private or public entities, strategic alliances, or securities offerings through our parent company or subsidiaries, to develop our Ucommune community.

**Key Components of Results of Operations for our Continuing Operations**

We have two operating segments including (1) workspace membership, and (2) other services. Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available. Our chief operating decision makers, which is the CEO, regularly evaluate our operating segments in deciding how to allocate resources and assess performance. See our consolidated financial statements included elsewhere in this annual report for additional information regarding our two reportable segments.

 ****

***Net Revenue***

The following table sets forth a breakdown of our net revenue from continuing operations, in absolute amounts and as percentages of total net revenue from continuing operations, for the periods indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Net Revenue** |  |  |  |  |  |  |  |
| Workspace membership revenue | 124140 | 81.7 | 68558 | 88.8 | 22630 | 3236 | 86.6 |
| Other services revenue | 27890 | 18.3 | 8655 | 11.2 | 3490 | 499 | 13.4 |
| **Total net revenue** | **152030** | **100.0** | **77213** | **100.0** | **26120** | **3735** | **100.0** |

---

*Workspace Membership Revenue.* We generate our net revenue by providing various agile office space solutions to members from whom we collect monthly rent in the form of membership service fees or office workstation rental fees. Our workspace membership net revenue primarily includes fees generated through our agile office spaces services under our self-operated model, fees generated through revenue sharing under U Partner, and also includes other net revenue in relation to utilizing our spaces, such as net revenue generated from service fees for using our conference rooms.

 

*Other Services Revenue.* Other services net revenue primarily consists of (1) co-working space management fees, (2) SaaS services, IOT solutions and technical support revenue; (3) charges to members for ancillary services such as printing and copying fees and catering service fees; (4) Tour service and (5) Hotel service.

 ****

***Cost of Revenue (Excluding Impairment Loss)***

The following table sets forth a breakdown of our cost of revenue (excluding impairment loss) from continuing operations, in absolute amounts and as percentages of total cost of revenue (excluding impairment loss) from continuing operations, for the periods indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Cost of revenue (excluding impairment loss)** |  |  |  |  |  |  |  |
| Workspace membership | 141462 | 87.9 | 74065 | 93.7 | 22587 | 3230 | 84.1 |
| Other services | 19426 | 12.1 | 4948 | 6.3 | 4279 | 612 | 15.9 |
| **Total cost of revenue (excluding impairment loss)** | **160888** | **100.0** | **79013** | **100.0** | **26866** | **3842** | **100.0** |

---

Note: Our cost of revenue from continuing operations does not include impairment loss, and we generally do not consider impairment on a routine basis when operating and managing our agile office space business.

 

*Workspace Membership.* The following table sets forth a breakdown of the cost of revenue (excluding impairment loss) for workspace membership, in absolute amounts and as percentage of total cost of revenue (excluding impairment loss) for workspace membership, for period indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Cost of revenue (excluding impairment loss) for workspace membership** |  |  |  |  |  |  |  |
| Lease expenses | 60464 | 42.7 | 35065 | 47.3 | 14831 | 2121 | 65.7 |
| Employee compensation and benefits | 14648 | 10.4 | 5418 | 7.3 | 3197 | 457 | 14.2 |
| Depreciation and amortization | 11116 | 7.9 | 9082 | 12.3 | 660 | 94 | 2.8 |
| Other workspace operating costs | 55234 | 39.0 | 24500 | 33.1 | 3899 | 558 | 17.3 |
| **Total cost of revenue (excluding impairment loss) for workspace membership** | **141462** | **100.0** | **74065** | **100.0** | **22587** | **3230** | **100.0** |

---

Cost of revenue (excluding impairment loss) for workspace membership primarily consists of (1) lease expenses, (2) employee compensation and benefits, (3) depreciation and amortization expenses, and (4) other workspace operating costs, such as costs for daily maintenance and cleaning, and insurance costs.

 

*Other Services.* The following table sets forth a breakdown of the cost of revenue (excluding impairment loss) for workspace membership, in absolute amounts and as percentage of total cost of revenue (excluding impairment loss) for workspace membership, for period indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Cost of revenue (excluding impairment loss) for other services** |  |  |  |  |  |  |  |
| Development and hardware purchase cost | 7017 | 36.1 | 2137 | 43.2 | 376 | 54 | 8.8 |
| Employee compensation and benefits | 5632 | 29.0 | 1026 | 20.7 | 667 | 95 | 15.6 |
| Depreciation and amortization | 5211 | 26.8 | 539 | 10.9 | 250 | 36 | 5.8 |
| Travelling service cost |  |  | 198 | 4.0 | 1034 | 148 | 24.2 |
| Hotel rental cost |  |  |  |  | 983 | 141 | 23.0 |
| Other operating costs | 1566 | 8.1 | 1048 | 21.2 | 969 | 138 | 22.6 |
| **Total cost of revenue (excluding impairment loss) for other services** | **19426** | **100.0** | **4948** | **100.0** | **4279** | **612** | **100.0** |

---

Cost of revenue (excluding impairment loss) for other service primarily consists of (1) development and hardware purchase cost, (2) employee compensation and benefits, (3) depreciation and amortization expenses, (4) travelling service cost, (5) hotel rental cost and (6) other workspace operating costs, such as costs for daily maintenance and cleaning.

***Impairment Loss on Long-lived Assets and Long-term Prepaid Expenses***

Our impairment loss on long-lived assets and long-term prepaid expenses was recognized whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset and long-term prepaid expenses may no longer be recoverable and their carrying value exceed fair value.

***Sales and Marketing Expenses***

Our sales and marketing expenses consist primarily of (1) marketing and promotion expenses and (2) compensation for our sales and marketing personnel.

***General and Administrative Expenses***

Our general and administrative expenses consist primarily of (1) compensation for our management and administrative personnel, (2) expenses in connection with our operation and financing supporting functions such as legal and human resources, (3) share-based compensation expense, and (4) other administrative expenses.

***Change in Fair Value of Warrant Liability***

Warrants classified as liabilities are initially recorded at fair value with gains and losses arising from changes in fair value recognized in the consolidated statements of operations during the period in which such instruments are outstanding.

***Change in Fair Value of Put Option Liability***

Put option classified as liabilities is initially recorded at fair value with gains and losses arising from changes in fair value recognized in the consolidated statements of operations during the period in which such instruments are outstanding.

***Impairment Loss on Long-term Investments***

Our impairment loss on long-term investments was recognized when the investees' operating performances indicate that the carrying value of the investment is no longer recoverable.

***Gain on Disposal of Long-term Investments***

Our gain on disposal of long-term investments was generated from disposal of equity investments.

***Gain/(Loss) on Disposal of Subsidiaries***

Our gain/(loss) on disposal of subsidiaries was generated from the disposal of several subsidiaries.

**Taxation** 

***Cayman Islands***

Ucommune International Ltd and Ucommune Group Holdings are incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to income, corporate or capital gains tax in the Cayman Islands. In addition, our payment of dividends, if any, is not subject to withholding tax in the Cayman Islands.

 ****

***British Virgin Islands***

Ucommune International Limited, our subsidiary incorporated in the British Virgin Islands, is not subject to income tax in the British Virgin Islands.

 ****

***Hong Kong***

Ucommune Group Holdings (Hong Kong) Limited, and Melo Hongkong Limited, two of our subsidiaries incorporated in Hong Kong, is subject to a two-tiered income tax rate for taxable income earned in Hong Kong effectively since April 1, 2018. The first two million Hong Kong dollars of profits earned by a company are subject to be taxed at an income tax rate of 8.25%, while the remaining profits will continue to be taxed at the existing tax rate, 16.5%. No provision for Hong Kong profits tax has been made in the consolidated financial statements as it had no assessable profit for 2023, 2024 and 2025.

 ****

***Singapore***

Ucommune Technology Pte. Ltd, our subsidiary incorporated in Singapore, is subject to Singapore corporate income taxes at the rate of 17% for 2023, 2024 and 2025.

 ****

***United States***

Melo Inc. and Ucommune N.Y. Corp. are incorporated in the U.S. and are subject to the U.S. federal income taxes. According to U.S. tax reform, a flat corporate income tax rate of 21% was effective beginning in 2018.

 ****

***PRC***

Effective from January 1, 2008, a new Enterprise Income Tax Law, or ("the New EIT Law"), combined the previous income tax laws for foreign invested and domestic invested enterprises in the PRC by the adoption of a unified tax rate of 25% for most enterprises with the following exceptions.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2023, 2024 and 2025, some PRC subsidiaries are qualified small and low-profit enterprises as defined, and thus they are eligible for the above preferential tax rates for small and low-profit enterprises.

The Parent, as our Cayman Islands holding company, may receive dividends from Ucommune Group Holdings, our another Cayman Islands holding company wholly owned by the Parent. Ucommune Group Holdings may receive dividends from our PRC subsidiaries through Ucommune HK. The PRC EIT Law and its implementing rules provide that dividends paid by a PRC entity to a nonresident enterprise for income tax purposes is subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with China. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise.

Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements ("SAT Circular 81"), a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply for the reduced withholding tax rate: (1) it must be a company; (2) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (3) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends.

In October 2019, the SAT promulgated the Administrative Measures for Non-Resident Taxpayers Enjoying Treaties Benefits ("Announcement 35"), which became effective on January 1, 2020. Announcement 35 provides that nonresident enterprises do not need to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities.

Accordingly, Ucommune HK may be able to benefit from the 5% withholding tax rate for the dividends it receives from its PRC subsidiaries, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations. However, according to SAT Circular 81 and Announcement 35, if the relevant tax authorities believe that the primary purpose of our transactions or arrangements is to enjoy a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

If our holding companies in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a "resident enterprise" under the PRC EIT Law, we would be subject to enterprise income tax on our worldwide income at a rate of 25%. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable PRC tax consequences to us and our non-PRC shareholders."

**Results of Operations**

The following table summarizes our consolidated results of operations both in absolute amounts and as percentages of our total net revenue for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** |
| **Net revenue** |  |  |  |  |  |  |  |
| Workspace membership revenue | 124140 | 81.7 | 68558 | 88.8 | 22630 | 3236 | 86.6 |
| Other services revenue | 27890 | 18.3 | 8655 | 11.2 | 3490 | 499 | 13.4 |
| **Total net revenue** | **152030** | **100.0** | **77213** | **100.0** | **26120** | **3735** | **100.0** |
| **Cost of revenue (excluding impairment loss):** |  |  |  |  |  |  |  |
| Workspace membership | (141462) | (93.0) | (74065) | (95.9) | (22587) | (3230) | (86.5) |
| Other services | (19426) | (12.8) | (4948) | (6.4) | (4279) | (612) | (16.4) |
| **Total cost of revenue (excluding impairment loss)** | **(160888)** | **(105.8)** | **(79013)** | **(102.3)** | **(26866)** | **(3842)** | **(102.9)** |
| Impairment loss on long-lived assets and long-term prepaid expenses | (29109) | (19.1) | (967) | (1.3) | (2948) | (422) | (11.3) |
| Sales and marketing expenses | (8643) | (5.7) | (3540) | (4.6) | (714) | (102) | (2.7) |
| General and administrative expenses | (77119) | (50.7) | (44974) | (58.2) | (36666) | (5243) | (140.4) |
| Change in fair value of warrant liability | 9099 | 6 | 4949 | 6.4 | 463 | 66 | 1.8 |
| Change in fair value of put option liability | 373 | 0.1 |  |  |  |  |  |
| **Loss from operations** | **(114257)** | **(75.2)** | **(46332)** | **(60.0)** | **(40611)** | **(5808)** | **(155.5)** |
| Interest (expense)/income, net | 907 | 0.6 | (2253) | (2.9) | 185 | 26 | 0.7 |
| Subsidy income | 7754 | 5.1 | 804 | 1 | 5 | 1 | 0 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** | **(in thousands, except for percentages, shares and per share data)** |
| Impairment loss on long-term investments | (25603) | (16.8) | (17979) | (23.3) |  |  |  |
| Gain on disposal of long-term investments | 6370 | 4.2 |  |  |  |  |  |
| Gain/(Loss) on disposal of subsidiaries | 112792 | 74.2 | (607) | (0.8) | 3217 | 460 | 12.3 |
| Other (expense)/income, net | 8673 | 5.7 | 2180 | 2.8 | 725 | 104 | 2.8 |
| **Loss before income taxes and loss from equity method investments** | **(3364)** | **(2.2)** | **(64187)** | **(83.2)** | **(36479)** | **(5217)** | **(139.7)** |
| Provision for income taxes | (8281) | (5.4) | (6369) | (8.2) | (93) | (13) | (0.4) |
| Gain/(Loss) from Equity method investments | 795 | 0.5 | (483) | (0.6) |  |  |  |
| **Net loss from continuing operations** | **(10850)** | **(7.1)** | **(71039)** | **(92.0)** | **(36572)** | **(5230)** | **(140.0)** |
| Net loss from discontinued operations | (11974) | (7.9) | (9207) | (11.9) | (2681) | (383) | (10.3) |
| **Net loss** | **(22824)** | **(15.0)** | **(80246)** | **(103.9)** | **(39253)** | **(5613)** | **(150.3)** |
| Less: net loss attributable to non-controlling interests from continuing operations | (3766) | (2.5) | (4961) | (6.4) | (97) | (14) | (0.3) |
| Less: Net loss attributable to noncontrolling interests from discontinued operations | (13926) | (9.2) | (5755) | (7.5) | (1314) | (188) | (5.0) |
| **Net loss attributable to Ucommune International Ltd, from continuing operations** | **(7084)** | **(4.7)** | **(66078)** | **(85.6)** | **(36475)** | **(5216)** | **(139.7)** |
| Net income/(loss) attributable to shareholders from discontinued operations | 1952 | 1.4 | (3452) | (4.4) | (1367) | (195) | (5.2) |
| Net loss per share attributable to ordinary shareholders of Ucommune international Ltd. |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;- Basic and diluted | (13.10) | N/A | (56.38) | N/A | (13.53) | (1.93) | N/A |
| Net income/(loss) per share attributable to ordinary shareholders of discontinued operations |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;- Basic and diluted | 3.61 | N/A | (2.95) | N/A | (0.51) | (0.07) | N/A |
| Weighted average shares used in calculating net loss per share |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;- Basic and diluted | 540836 | N/A | 1172103 | N/A | 2697970 | 2697970 | N/A |

---

Note: On October 26, 2024, the Ucommune Venture VIE Agreements were terminated and by which time Ucommune Venture and its subsidiaries were deconsolidated, and certain businesses of the Company were disposed accordingly. The disposal of interior design and construction business represented a strategic shift that had a major effect on the Company's operations and financial results, and was accounted for as discontinued operation. On July 21, 2025, we disposed a subsidiary which is the only subsidiary operates in marketing and branding service, upon which we completely exited from all marketing and branding services operations. The disposal represented a strategic shift that had a major effect on our operations and financial results, and was accounted for as discontinued operation. Our consolidated statements of operations in this annual report separates the discontinued operations from our remaining business operations for all years presented. Please see Note 4.b of the financial statements in this annual report.

**Year Ended December 31, 2025 Compared to Year Ended December 31, 2024**

***Net Revenue***

Our total net revenue from continuing operations decreased by 66.2% to RMB26.1 million (US$3.7 million) in 2025 from RMB77.2 million in 2024. Revenues from our asset-light model decreased by 57.3% to RMB15.0 million (US$2.1 million) in 2025 from RMB35.1 million in 2024.

*Workspace Membership Services Revenues*

Our workspace membership services revenues decreased by 67.1% to RMB22.6 million (US$3.2 million) in 2025 from RMB68.6 million in 2024, primarily due to (1) the disposal or closure of 21 self-operated spaces in FY2024, which contributed revenue of RMB24.5 million (US$3.5 million) with no such revenue in FY2025; (2) the closure of 2 unprofitable self-operated spaces which were disposed of in 2025 and as a result, the revenue decreased RMB3.9 million (US$0.6 million) as compared to 2024; and (3) a decrease in revenue generated from U Partner category under our asset-light model of RMB16.6 million (US$2.4 million) as a result of decreased number of spaces and expiration of large customer contract.

*Other Services Revenues*

Our other services revenues decreased by 59.8% to RMB3.5million (US$0.5 million) in 2025 from RMB8.7 million in 2024, primarily due to decreased revenue from U Brand under our asset-light model of RMB3.1 million (US$0.4 million) as the number of spaces of this category decreased from 2 as of December 31, 2024 to nil as of December 31, 2025.

***Cost of Revenue (Excluding Impairment Loss)***

Our total cost of revenue (excluding impairment loss) from continuing operations decreased by 65.9% to RMB26.9 million (US$3.8 million) in 2025 from RMB79.0 million in 2024. Cost of revenue from our asset-light model decreased by 63.2% to RMB12.3 million (US$1.8 million) in 2025 from RMB33.4 million in 2024, which was in line with the decrease in revenues from our asset-light model businesses.

*Workspace Membership*

Our costs of workspace membership decreased by 69.5% to RMB22.6 million (US$3.2 million) in 2025 from RMB74.1 million in 2024, primarily due to a decrease in operating costs related to leases and staff along with the closure of unprofitable self-operated spaces in 2025. Our cost of revenue (excluding impairment loss) for workspace membership accounted for 95.9% and 86.5% of our total net revenue in 2024 and 2025, respectively.

*Other Services*

Our costs of other services decreased by 12.2% to RMB4.3 million (US$0.6 million) in 2025 from RMB4.9 million in 2024, which was generally in line with the decrease in revenues. Our cost of revenue (excluding impairment loss) for other services accounted for 6.4% and 16.4% of our total net revenue in 2024 and 2025, respectively.

***Impairment Loss on Long-lived Assets and Long-term Prepaid Expenses***

We had impairment loss on long-lived assets and long-term prepaid expenses of RMB2.9 million (US$0.4 million) in 2025, as compared to RMB1.0 million in 2024, primarily due to impairment losses on right-of-use assets of RMB2.8 million (US$0.4 million) in 2025.

***Sales and Marketing Expenses***

Our sales and marketing expenses decreased by 80.0% to RMB0.7 million (US$0.1 million) in 2025 from RMB3.5 million in 2024, mainly due to (1) a decrease in promotion cost of RMB1.5 million (US$0.2 million) as a result of closure of spaces, and (2) a decrease in entertainment cost of RMB1.1 million (US$0.2 million). Our sales and marketing expenses accounted for 4.6% and 2.7% of our total net revenue in 2024 and 2025, respectively.

***General and Administrative Expenses***

Our general and administrative expenses decreased by 18.4% to RMB36.7 million (US$5.2 million) in 2025 from RMB45.0 million in 2024, mainly due to (1) a decrease in staff cost of RMB6.4 million (US$0.9 million) due to we laid off certain employees in administrative and back-office departments, and (2) a decrease in share-based compensation expenses of RMB1.4 million (US$0.2 million). Our general and administrative expenses accounted for 58.2% and 140.4% of our total net revenue in 2024 and 2025, respectively. The increase in general and administrative expenses as a percentage of total net revenue is mainly due to decreased revenue scale.

***Change in Fair Value of Warrant Liability***

We had a gain in change in fair value of warrant liability of RMB0.5 million (US$0.1 million) in 2025 as compared to RMB4.9 million in 2024, primarily attributable to the fair value decrease of warrants issued in a private placement on January 26, 2022.

 ****

***Loss from Operations***

As a result of the foregoing, our loss from operations was RMB40.6 million (US$5.8 million) in 2025, as compared to RMB46.3 million in 2024.

***Interest (Expense)/Income, Net***

Our interest income, net was RMB0.2 million (US$26 thousand) in 2025, as compared to interest expense, net of RMB2.3 million in 2024, due to the interest expense accrued for third-party loans in 2024 while no such expenses in 2025 since the borrower Ucommune Venture was disposed of in 2024.

***Subsidy Income***

Our subsidy income was subsidies granted by local governments to support the development and operation of agile office spaces. Our subsidy income was RMB5 thousand (US1 thousand) in 2025, as compared to RMB0.8 million in 2024.

***Impairment Loss on Long-term Investments***

Impairment loss on long-term investments was nil in 2025, as compared to RMB18.0 million in 2024, primarily because the investee's performance was stable in 2025 with no impairment recognized as compared with 2024.

***Gain/(Loss) on Disposal of Subsidiaries***

We had gain on disposal of subsidiaries of RMB3.2 million (US$0.5 million) in 2025, as compared to loss on disposal of subsidiaries of RMB0.6 million in 2024, primarily attributable to the disposal of subsidiaries with nil consideration that was at net liability position in 2025 compared with subsidiaries at net asset position in 2024.

***Other Income, Net***

We had other income, net of RMB0.7 million (US$0.1 million) in 2025, as compared with other income RMB2.2 million in 2024, mainly due to gain from asset transfer in 2024 while no such situation in 2025.

***Provision for Income Taxes***

We had provision for income taxes of RMB6.4 million and RMB0.1 million (US$13 thousand) in 2024 and 2025, respectively.

***Net Loss from Continuing Operations***

As a result of the foregoing, our net loss from continuing operations decreased by 48.5% to RMB36.6 million (US$5.2 million) in 2025 from RMB71.0 million in 2024.

***Net Loss from Discontinued Operations***

Our net loss from discontinued operations decreased by 70.7% to RMB2.7 million (US$0.4 million) in 2024 from RMB9.2 million in 2024.

**Year Ended December 31, 2024 Compared to Year Ended December 31, 2023**

On July 21, 2025, Xinjiang Xinyouzhong Marketing Co., Ltd. ("Xinjiang Xinyouzhong"), an indirectly wholly-owned subsidiary of the Company, entered into an equity transfer agreement (the "Agreement") with Singularity Digital Marketing (Guangzhou) Co., Ltd. ("Singularity Digital"), a related party controlled by Mr. Zhenfei Wu, our Chief Marketing Officer. Pursuant to the Agreement, Xinjiang Xinyouzhong sold all of its 51% equity interest in Zhuhai Shengguang Zhongshuo Digital Marketing Co., Ltd. ("Shengguang Zhongshuo") to Singularity Digital. This disposal represented that we completely exited from all marketing and branding services operations. The disposal of marketing and branding services business represented a strategic shift that had a major effect on our operations and financial results, and was accounted for as discontinued operation. Accordingly, results of operations related to marketing and branding business have been reflected in the accompanying consolidated financial statements as discontinued operation for all periods presented.

We've restated the consolidated balance sheet as of December 31, 2024 and consolidated statements of operation, comprehensive loss, changes in shareholder's equity and cash flows for the years ended December 31, 2023 and 2024, as we identified fraudulent acts conducted by certain employees through fabricating the agency fees of the Group's workspace membership business in specific workspace projects to earn kickback from the real estate agencies. You should consider the information provided under Note 3 of our financial statements. The discussion of year-over-year comparisons under this section for periods between 2025 and 2024, and 2024 and 2023 has reflected the impact of restatement.

However, the Company's management believes that such retroactive adjustment of discontinue operation and restatement does not cause material change to the description of the comparison of the Company's operating results for the year ended December 31, 2024 to the year ended December 31, 2023 included in its annual report on Form 20-F for the fiscal year ended December 31, 2024. For a detailed description of the comparison of our operating results for the year ended December 31, 2023 to the year ended December 31, 2022, see "Item 5.A. Operating Results — Results of Operations — Year Ended December 31, 2023 Compared to Year Ended December 31, 2022" of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 25, 2024.

**Non-GAAP Financial Measures**

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures for our consolidated results: EBITDA (including EBITDA margin), adjusted EBITDA (including adjusted EBITDA margin) and adjusted net loss from continuing operations. We believe that EBITDA, adjusted EBITDA and adjusted net loss from continuing operations help understand and evaluate our core operating performance.

EBITDA, adjusted EBITDA and adjusted net loss from continuing operations are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP financial measures. As EBITDA, adjusted EBITDA and adjusted net loss from continuing operations have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies.

In light of the foregoing limitations, you should not consider EBITDA, adjusted EBITDA and adjusted net loss from continuing operations as substitutes for, or superior to, net loss prepared in accordance with U.S. GAAP. We encourage investors and others to review our financial information in its entirety and not rely on any single financial measure. For more information on these non-GAAP financial measures, please see the table below.

EBITDA represents net loss before interest expense, net, provision for income taxes, depreciation of property and equipment and amortization of intangible assets.

Adjusted EBITDA represents net loss before (1) interest expense/(income), net, other income, net, provision for income taxes, gain on disposal of long-term investments and loss/(gain) on disposal of subsidiaries and (2) certain non-cash expenses, consisting of share-based compensation expense, impairment loss on long-term investments, impairment loss on long-lived assets and long-term prepaid expenses, depreciation of property and equipment, amortization of intangible assets, change in fair value of warrant liability and change in fair value of put option liability, which we do not believe are reflective of our core operating performance during the periods presented.

Adjusted net loss from continuing operations represents net loss before share-based compensation expense, impairment loss on long-lived assets and long-term prepaid expenses, impairment loss on long-term investments, change in fair value of warrant liability, change in fair value of put option liability, gain on disposal of long-term investments and loss/(gain) on disposal of subsidiaries.

The following table sets forth a reconciliation of net loss to EBITDA and adjusted EBITDA for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Net loss from continuing operations** | **(10850)** | **(71039)** | **(36572)** | **(5230)** |
| Interest expense/(income), net | (907) | 2253 | (185) | (26) |
| Provision for income taxes | 8281 | 6369 | 93 | 13 |
| Depreciation of property and equipment | 16400 | 9196 | 3220 | 460 |
| Amortization of intangible assets | 1437 | 472 |  |  |
| **EBITDA (non-GAAP) from continuing operations** | **14361** | **(52749)** | **(33444)** | **(4783)** |
| Share-based compensation expense | 25722 | 11333 | 15022 | 2148 |
| Impairment loss on long-lived assets and long-term prepaid expenses | 29109 | 967 | 2948 | 422 |
| Change in fair value of warrant liability | (9099) | (4949) | (463) | (66) |
| Change in fair value of put option liability | (373) |  |  |  |
| Impairment loss on long-term investments | 25603 | 17979 |  |  |
| Gain on disposal of long-term investments | (6370) |  |  |  |
| (Gain)/Loss on disposal of subsidiaries | (112792) | 607 | (3217) | (460) |
| Other income, net | (8673) | (2180) | (725) | (104) |
| **Adjusted EBITDA (non-GAAP) from continuing operations** | **(42512)** | **(28992)** | **(19879)** | **(2843)** |

---

The table below sets forth a reconciliation of net loss to adjusted net loss for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Net loss from continuing operations** | **(10850)** | **(71039)** | **(36572)** | **(5230)** |
| Share-based compensation expense | 25722 | 11333 | 15022 | 2148 |
| Impairment loss on long-lived assets and long-term prepaid expenses | 29109 | 967 | 2948 | 422 |
| Change in fair value of warrant liability | (9099) | (4949) | (463) | (66) |
| Change in fair value of put option liability | (373) |  |  |  |
| Impairment loss on long-term investments | 25603 | 17979 |  |  |
| Gain on disposal of long-term investments | (6370) |  |  |  |
| (Gain)/Loss on disposal of subsidiaries | (112792) | 607 | (3217) | (460) |
| **Adjusted net loss (non-GAAP) from continuing operations** | **(59050)** | **(45102)** | **(22282)** | **(3186)** |

---

**Recent Accounting Pronouncements**

For detailed discussion on recent accounting pronouncements, see Note 2 to our consolidated financial statements.

**Inflation**

See "Item 11. Quantitative and Qualitative Disclosures About Market Risk."

**B. Liquidity and Capital Resources**

**Cash Flows and Working Capital**

Our principal sources of liquidity have been cash from capital contributions by our shareholders, short-term/long-term borrowings and capital market financings. As of December 31, 2024 and 2025, we had RMB25.1 million, and RMB36.1 million (US$5.2 million), respectively, in cash and cash equivalents. Our cash and cash equivalents consist primarily of cash at bank and on hand and are primarily denominated in Renminbi, US dollars and Hong Kong dollars.

Historically, we have not been profitable. In 2023, 2024 and 2025 we incurred losses from operations of RMB114.3 million, RMB46.3 million, and RMB40.6 million (US$5.8 million), respectively. We have incurred recurring operating losses since our inception, including net losses from continuing operations of RMB10.9 million, RMB71.0 million and RMB36.6 million (US$5.2 million) for the years ended December 31, 2023, 2024 and 2025, respectively. In 2023, 2024 and 2025, we generated negative cash flows from operating activities from continuing operations of RMB6.2 million, RMB21.5 million and RMB3.7 million (US$0.5 million). In addition, as of December 31, 2025, we had an accumulated deficit of RMB4,639.3 million (US$663.4 million). In addition, as of December 31, 2025, we had no unused credit line. These conditions raise substantial doubt about our ability to continue as a going concern.

We are seeking to develop our asset-light model, under which we can reduce upfront capital investments for opening new spaces. We regularly monitor our current and expected liquidity requirements to help ensure that we maintain sufficient cash balances to meet our existing and reasonably likely long-term liquidity needs.

Historically, we have relied principally on both operational sources of cash and non-operational sources of financing from investors and creditors to fund our operations and business development. Our ability to continue as a going concern is dependent on management's ability to successfully execute our business plan which includes continued business transition from asset-heavy model to asset-light model in order to improve the profitability, continued exploration of new business opportunities that have synergies with our core business, controlling operating costs and optimizing operational efficiency to improve our cash flow from operations. We also plan to raise additional capital, including among others, obtaining debt and equity financing, to support our future operation.

We continue to explore opportunities to develop our business. However, we have not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve stable net profit and positive cash flows from operating activities, and we expect the operating losses will continue for the foreseeable future. If we are unable to develop the business to achieve economies of scale in the future, it will become even more difficult for us to sustain a sufficient source of cash to cover our operating costs. There can be no assurance, however, that we will be able to obtain additional financing on terms acceptable to us, in a timely manner, or at all. In the event that financing sources are not available, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for development, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on our business, financial condition and results of operations and would materially and adversely affect our ability to continue as a going concern.

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.

We intend to finance our future working capital requirements and capital expenditures from cash generated from operating activities and funds raised from financing activities. We may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

If our existing cash is insufficient to meet our requirements, we may seek to issue debt or equity securities or obtain additional credit facilities. Financing may be unavailable in the amounts we need or on terms acceptable to us, if at all. Issuance of additional equity securities, including convertible debt securities, would dilute our earnings per share. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders.

If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — We require significant capital to fund our operations and development. If we cannot obtain sufficient capital on acceptable terms, our business, financial condition and prospects may suffer."

As a holding company with no material operations of its own, the Parent operates its businesses in the PRC through our PRC subsidiaries and the consolidated VIEs in China. Under PRC laws and regulations, the Parent may provide funding to our PRC subsidiaries in China through capital contributions or loans, subject to the approval of government authorities and limits on the amount of capital contributions and loans. In addition, our subsidiaries in China may only provide Renminbi funding to the consolidated VIEs through entrusted loans. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of securities offerings, to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and develop our business" and "Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds — Use of Proceeds."

The ability of our PRC subsidiaries to make dividends or other cash payments to their shareholders, which are our subsidiaries incorporated in Hong Kong and indirectly wholly-owned by the Parent, is subject to restrictions under PRC laws and regulations. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business" and "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable PRC tax consequences to us and our non-PRC shareholders."

The following table presents our selected consolidated cash flow data for the periods indicated.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Net cash used in operating activities from continuing operations | (6182) | (21515) | (3726) | (534) |
| Net cash provided by/(used in) operating activities from discontinued operations | 23178 | 25378 | (10128) | (1448) |
| Net cash provided by/(used in) operating activities | 16996 | 3863 | (13854) | (1982) |
| Net cash provided by investing activities from continuing operations | 9141 | 12196 | 5861 | 839 |
| Net cash provided by/(used in) investing activities from discontinued operations | 7566 | (810) |  |  |
| Net cash provided by investing activities | 16707 | 11386 | 5861 | 839 |
| Net cash (used in)/provided by financing activities from continuing operations | (22458) | 10885 | 16904 | 2417 |
| Net cash (used in)/provided by financing activities from discontinued operations | (8331) | 7200 |  |  |
| Net cash (used in)/provided by financing activities | (30789) | 18085 | 16904 | 2417 |
| Effects of exchange rate changes | (886) | 7165 | (8098) | (1158) |
| Net increase in cash, cash equivalents and restricted cash | 2028 | 40499 | 813 | 116 |
| Cash, cash equivalents and restricted cash - beginning of the year | 53245 | 55273 | 90370 | 12923 |
| Cash, cash equivalents and restricted cash - end of the year | 55273 | 95772 | 91183 | 13039 |
| Less: Cash, cash equivalents and restricted cash of discontinued operations | 38883 | 70651 | 55121 | 7882 |
| Cash, cash equivalents and restricted cash – end of the period from continuing operations | 16390 | 25121 | 36062 | 5157 |

---

***Operating Activities from Continuing Operations***

Net cash used in operating activities from continuing operations in 2025 was RMB3.7 million (US$0.5 million). The difference between net loss from continuing operations of RMB36.6 million (US$5.2 million) and the net cash used in operating activities from continuing operations was mainly due to (1) share-based compensation of RMB15.0 million (US$2.1 million), (2) a decrease in prepaid expenses and other current assets of RMB11.6 million (US$1.7 million), (3) amortization of right-of-use assets of RMB7.4 million (US$1.1 million), (4) depreciation of property and equipment of RMB3.2 million (US$0.5 million), and (5) impairment of long-lived assets and long-term prepaid expenses of RMB2.9 million(US$0.4 million), partially offset by (i) gain on disposal of subsidiaries of RMB3.2 million (US$0.5 million), (ii) a decrease in lease liability of RMB2.1 million (US$0.3 million), (iii) a decrease in refundable deposits from members, non-current of RMB1.9 million (US$0.3 million), and (iv) a decrease in amount due to related parties of RMB1.3 million (US$0.2 million).

Net cash used in operating activities from continuing operations in 2024 was RMB21.5 million. The difference between net loss from continuing operations of RMB71.0 million and the net cash used in operating activities from continuing operations was mainly due to (1) an increase in amount due to related parties of RMB69.3 million, (2) a decrease in prepaid expenses and other current assets of RMB28.3 million, (3) amortization of right-of-use assets of RMB18.8 million, (4) impairment loss of long-term investment of RMB18.0 million, (5) an increase in accounts payable of RMB 11.7 million, and (6) share-based compensation of RMB11.3 million, partially offset by (i) an increase in amount due from related parties of RMB72.3 million, (ii) other income, net of RMB29.9 million, and (iii) a decrease in accrued expenses and other current liabilities of RMB7.2 million.

Net cash used in operating activities from continuing operations in 2023 was RMB6.2 million. The difference between net loss from continuing operations of RMB10.9 million and the net cash used in operating activities from continuing operations was mainly due to (1) amortization of right-of-use assets of RMB62.4 million, (2) loss on disposal of creditor's right of long-term prepaid expense of RMB46.9 million, (3) impairment loss of long-lived assets of RMB29.1 million, (4) share-based compensation of RMB25.7 million, (5) impairment loss of long-term investment of RMB25.6 million, (6) a decrease in long-term prepaid expenses of RMB25.3 million, (7) a decrease in accounts receivable of RMB 17.2 million, (8) depreciation of property and equipment of RMB16.4 million, (9) credit loss of RMB16.1 million, (10) loss on disposal of property, equipment and other long-lived assets of RMB14.1 million, (11) an increase of income tax payable of RMB8.3 million, and (12) an increase in refundable rental deposit, non-current of RMB4.4 million, partially offset by (i) gain on disposal of subsidiaries of RMB112.8 million, (ii) a decrease in lease liabilities of RMB37.9 million, (iii) a decrease in accrued expenses and other current liabilities of RMB33.4 million, (iv) gain from termination of right-of-use assets of RMB30.4 million, (v) gain on dissolution of subsidiaries of RMB16.9 million, (vi) a decrease in accounts payable of RMB15.4 million, (vii) an increase in prepaid expenses and other current assets of RMB11.9 million, (viii) change in fair value of warrant liabilities of RMB9.1 million, (ix) a decrease of contract liabilities of RMB6.4 million, (x) gain on disposal of long-term investments of RMB6.4 million, (xi) a decrease in deferred workspace membership fee of RMB3.2 million, and (xii) a decrease in deferred subsidiary income or RMB2.2 million.

***Investing Activities from Continuing Operations***

Net cash provided by investing activities from continuing operations in 2025 was RMB5.9 million (US$0.8 million), primarily attributable to cash received from disposal of Shengguang Zhongshuo of RMB16.0 million (US$2.3 million), partially offset by (i) purchase of property and equipment of RMB7.2 million (US$1.0 million) and (ii) loan provided to related parties of RMB2.2 million (US$0.3 million).

Net cash provided by investing activities from continuing operations in 2024 was RMB12.2 million, primarily attributable to (1) redemption of short-term investments of RMB51.8 million, and (2) proceeds from settlement of non-current assets of RMB5.0 million, partially offset by (i) purchase of short-term investments of RMB34.5 million, (ii) net cash reduction due to termination of the Ucommune Venture VIE Agreement of RMB5.6 million, and (iii) purchase of property, plant and equipment of RMB4.3 million.

Net cash provided by investing activities from continuing operations in 2023 was RMB9.1 million, primarily attributable to (1) proceeds from settlement of non-current assets of RMB35.0 million, and (2) proceeds from disposal of long-term investment of RMB6.4 million, partially offset by (i) purchase of short-term investments of RMB19.1 million and (ii) purchase of property, plant and equipment of RMB13.5 million.

***Financing Activities from Continuing Operations***

Net cash provided by financing activities from continuing operations in 2025 was RMB16.9 million (US$2.4 million), primarily attributable to cash received from issuing redeemable convertible preferred shares of RMB18.1 million (US$2.6 million).

Net cash provided by financing activities from continuing operations in 2024 was RMB10.9 million, primarily attributable to (1) loans received from third parties of RMB9.7 million, (2) loans received from related parties of RMB2.5 million, and (3) capital contribution from shareholders of RMB1.7 million, partially offset by loan repayment to a related party of RMB2.6 million.

Net cash used in financing activities from continuing operations in 2023 was RMB22.5 million, primarily attributable to (1) loan repayment to a related party of RMB12.0 million, (2) loan repayment to third parties of RMB6.5 million, and (3) redemption of convertible bond of RMB5.5 million, partially offset by loans received from third parties of RMB1.5 million.

**Capital Expenditures**

Our capital expenditures are incurred primarily in connection with purchase of property and equipment and purchase of intangible assets. Our capital expenditures were RMB13.5 million, RMB4.3 million and RMB7.2 million (US$1.0 million) for 2023, 2024 and 2025, respectively. We have no significant outstanding commitments for capital expenditures as of December 31, 2025. We intend to fund our future capital expenditures with our existing cash balance and proceeds from securities offerings.

**Holding Company Structure**

Ucommune International Ltd, the Parent, is our ultimate Cayman Islands holding company with no material operations of its own. The Parent operates its business through our subsidiaries and the consolidated VIEs. As a result, the Parent's ability to pay dividends depends upon dividends paid by our subsidiaries. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

In addition, our PRC subsidiaries are permitted to pay dividends to their shareholders, which are our subsidiaries incorporated in Hong Kong and indirectly wholly-owned by the Parent, only out of their retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC ("PRC GAAP"). In accordance with PRC company laws, the consolidated VIEs in China must make appropriations from their after-tax profit to non-distributable reserve funds including (1) statutory surplus fund and (2) discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the consolidated VIEs. Appropriation to discretionary surplus fund is made at the discretion of the consolidated VIEs. Pursuant to the law applicable to China's foreign investment enterprises, our subsidiaries that are foreign investment enterprise in the PRC have to make appropriation from their after-tax profit, as determined under PRC GAAP, to reserve funds including (1) general reserve fund, (2) enterprise expansion fund and (3) staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of our subsidiary. Appropriation to the other two reserve funds is at our subsidiary's discretion. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business."

Notwithstanding the foregoing, our PRC subsidiaries may use their own retained earnings (rather than Renminbi converted from foreign currency denominated capital) to provide financial support to the VIEs either through entrusted loans from our PRC subsidiaries to the consolidated VIEs or direct loans to such VIEs' nominee shareholders, which would be contributed to the VIEs as capital injections. Such direct loans to the nominee shareholders would be eliminated in our consolidated financial statements against the VIEs' share capital.

As an offshore holding company, the Parent is permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fund-raising activities to the WFOEs only through loans or capital contributions, and to the VIEs only through loans, in each case subject to the satisfaction of the applicable government registration and approval requirements. Before providing loans to our onshore entities (i.e., our PRC subsidiaries and VIE entities), we are required to make filings about details of the loans with the SAFE in accordance with relevant PRC laws and regulations. Our PRC subsidiaries and VIE entities that receive the loans are only allowed to use the loans for the purposes set forth in these laws and regulations. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of securities offerings, to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and develop our business." As a result, there is uncertainty with respect to our ability to provide prompt financial support to our PRC subsidiaries and consolidated VIEs when needed. In August 2020, Ucommune Venture entered into a loan agreement with Ucommune HK, under which Ucommune HK agreed to provide loans of up to a total of US$60 million to Ucommune Venture and Ucommune Venture could draw down the loans in multiple tranches (up to an aggregate of US$60 million) within three years from the date of the first draw-down. Thereafter, both parties entered into two supplement agreements in January 2021 and March 2021. As of December 31, 2024, Ucommune HK has provided a total of US$41.7 million in loans to Ucommune Venture, of which US$8.3 million have been repaid, under such loan agreements since the completion of our Business Combination in November 2020, using proceeds from the Parent's previous PIPE financing and follow-on offerings. Such loans were included in intercompany loans, and disclosed as roll-forwards of the investment in subsidiaries and VIEs. As of December 31, 2024, Ucommune HK has completed the outstanding $33.3 million debt owed by Ucommune Venture be transferred to Youshenghengtong Technology. See "Item 3. Key Information — Implications of Being a Company with the Holding Company Structure and the VIE Structures — Financial Statement Information Related to the VIE Structures."

We are subject to restrictions on foreign exchange and our ability to transfer cash between entities, across borders, and to U.S. investors. Under PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries and VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — Governmental control of currency conversion may limit our ability to utilize our net revenue effectively and our ability to transfer cash between our PRC subsidiaries and us, across borders, and to investors and affect the value of your investment."

We have established stringent controls and procedures for cash flows within our organization based on internal cash management policies. Each transfer of cash among the Parent, our subsidiaries and the VIEs is subject to internal approval. To effect a cash transfer, a number of steps are needed, including but not limited to the issuance of payment receipt, logging into the online banking system and completing its verification process, inspection of the invoice, and payment execution. Only the finance department is authorized to make cash transfers. Within the finance department, the roles of payment approval, payment execution, record keeping, and auditing are segregated to minimize risk.

Cash may be transferred within our organization in the following manner: (1) the Parent may transfer funds to our subsidiaries, including our PRC subsidiaries, by way of capital contributions or loans; (2) the Parent and our subsidiaries may provide loans to the VIEs and vice versa; (3) funds may be transferred from the VIEs to the WFOEs, as service fees for services contemplated by the contractual arrangements; (4) our PRC subsidiaries, including the WFOEs, may pay dividends to their shareholders, which are the Parent's subsidiaries incorporated in Hong Kong and indirectly wholly-owned by the Parent; and (5) our non-PRC subsidiaries may make dividends or other distributions to the Parent. Because the Parent is the primary beneficiary of the VIEs through contractual arrangements and the Parent and its subsidiaries do not have equity ownership in the VIEs, neither the Parent nor its subsidiaries are able to make direct capital contributions to the VIEs or their respective subsidiaries, and the VIEs are not able to make dividends or other distributions to the Parent. See "Item 3. Key Information — Implications of Being a Company with the Holding Company Structure and the VIE Structures — Financial Statement Information Related to the VIE Structures."

Since January 1, 2018, cash has been transferred through the organization in terms of loans; there have been no other transfers, dividends or distributions made to date between the Parent as the holding company, its subsidiaries and the consolidated VIEs, or to investors; and there have been no other cash flows and transfers of other assets by type that have occurred between the Parent as the holding company, its subsidiaries, and the consolidated VIEs. As of the date of this annual report, none of our subsidiaries had distributed any dividends or made any other distributions to the Parent. As of the same date, the Parent had not distributed any dividends or made any other distributions to U.S. investors. See "Item 3. Key Information — Implications of Being a Company with the Holding Company Structure and the VIE Structures — Financial Statement Information Related to the VIE Structures." We do not intend to distribute earnings or settle amounts owed under the contractual arrangements.

**C. Research and Development, Patents and Licenses**

See "Item 4. Information on the Company — B. Business Overview — Technology" and "— Intellectual Property."

**D. Trend Information**

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2025 to December 31, 2025 that are reasonably likely to have a material effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause the reported financial information not necessarily to be indicative of future operating results or financial conditions.

**E. Critical Accounting Policies and Estimates**

We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.

The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our consolidated financial statements are described below, which should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report. When reviewing our financial statements, you should consider:

● our selection of critical accounting policies,

● the judgments and other uncertainties affecting the application of such policies,

● the sensitivity of reported results to changes in conditions and assumptions.

Our critical accounting policies and practices include the following: (1) impairment of right-of-use assets and other long-lived assets; (2) lease; and (3) revenue recognition. See Note 2 — Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.

Among which, estimates used for impairment of right-of-use assets and other long-lived assets, require management to make difficult, subjective and complex judgments that often as a result of the need to make estimate on matters that are inherently uncertain and which is likely that materially different amounts would be reported under different conditions or assumptions.

***Impairment of Right-of-use Assets and Other Long-lived Assets***

We review our right-of-use ("ROU") assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Factors we consider to be important which could trigger an impairment review primarily includes (1) significant underperformance relative to projected operating results; (2) significant changes in the overall business strategy; (3) significant adverse changes in legal or business environment and (4) significant competition, unfavorable industry trend, or economic outlook. When these events occur, we measure impairment by comparing the carrying value of the ROU assets and property and equipment to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposal. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we would recognize an impairment loss based on excess of carrying value over the fair value of the assets. We measured the fair value of impaired space by using discounted cash flow model. The estimates used in projected future cash flows include rental charges and occupancy rate. The gross yield rate is used as the discount rate.

We recorded RMB2.5 million, RMB1.0 million and RMB2.8 million impairment losses on our ROU assets, RMB0.8 million, RMB17 thousand and RMB0.1 million impairment losses on our property and equipment, RMB25.8, nil and nil impairment losses on our other non-current assets during the years ended December 31, 2023, 2024 and 2025, respectively.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES** 

In this Item, "we", "us" or "our" refers to Ucommune International Ltd, the Parent.

**A. Directors and Senior Management**

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Daqing Mao | 57 | Chairman of the Board of Directors |
| Zirui Wang | 35 | Chief Executive Officer, Chief Risk Officer |
| Wei Hu | 51 | Director, Financial Reporting Director |
| Zhimo Zhao | 44 | Director |
| Jinghong Xu | 62 | Independent Director |
| Gray Zhu | 51 | Independent Director |
| Xiaodong Li | 50 | Chief Operating Officer |

---

\* Mr. Jianghai Shen and Mr. Zhenfei Wu ceased to be our chief product designer and chief marketing officer since January 15, 2026. Ms. Yan Xu ceased to be our financial reporting director since June 30, 2025.

*Daqing Mao* is our founder and has served as our director since December 2020. Mr. Mao has served as the chairman of our Board of Directors since June 2021. Since March 2021, Mr. Mao has also served as a director of UK Wisdom Limited, and we own an 85% equity interest of Ucommune Talent Limited, the sponsor of UK Wisdom Limited. Prior to founding our company, Dr. Mao served as the executive vice president of China Vanke Co., Ltd. (HKEX: 2202) from 2009 to 2015 and the chief executive officer of Vanke Company Limited Beijing Region from 2015 to 2016. Prior to that, Dr. Mao served as the Bohai-Rim region general manager of CapitaLand China Holdings Pte Ltd (Beijing) from 2002 to 2009, and was the chief representative of The Ascott Limited (Beijing) from 2000 to 2002, was a resident architect and project manager at Somerset Holding's Limited from 1996 to 1999, was a senior designer at Nikken Sekkei International from 1994 to 1996, and was a senior planner at Thailand's Saha Group from 1992 to 1993. Dr. Mao is also the founder and chairman of 5Lmeet, a lifestyle innovation company based in Beijing. He is a Chartered Architect in China and serves as visiting professor in multiple universities and an expert consultant of the Beijing Municipal People's Government. Dr. Mao received his bachelor's degree in architecture from Southeast University in 1991 and his Ph.D. degree in management science and engineering from Tongji University in 2002. He also completed his post-doctoral program in regional economics at Peking University in 2006.

*Zirui Wang* has served as our chief executive officer since November 2023 and chief risk officer since June 2021. Mr. Wang joined us in July 2016 and has served as our risk officer of our risk control department, legal director and legal manager of our legal department. Mr. Wang received his master's degree in law from Beijing Normal University in July 2016. Mr. Wang has maintained a legal professional qualification certificate since March 2015.

*Wei Hu* has served as our director since June 2024 and financial reporting director since July 2025. Mr. Hu has held various positions including financial director and the head of internal audit at Ucommune since January 2016. Mr. Hu has over 20 years of experiences in finance management. Before joining Ucommune, from March 2011 to December 2015, Mr. Hu served as a financial analysis manager and global internal audit manager at John Deere China. From May 2007 to March 2011, he worked as a financial analysis manager at CTS Tianjin. From August 2003 to May 2007, he served as a finance manager at Fiberweb (China) Airlaid Co., Ltd. From March 1997 to August 2003, he worked in several financial roles at Honeywell Tianjin. Mr. Hu received his bachelor's degree in accounting from Nankai University in June 1996 and received his master's degree in professional accounting from Nankai University in June 2008.

*Zhimo Zhao* has served as our director since November 2020. Mr. Zhao is in charge of our investor relations. Mr. Zhao served as chief marketing officer and chief representative for East Asia region at Eurofr Environment Tech. Ltd. Mr. Zhao received his master's degree in management from the Australian National University in 2013.

*Jinghong Xu* has served as our independent director since November 2020. Mr. Xu is the chairman of Zhongguancun Longmen Investment Limited, and served as the chairman of Tsinghua Holdings Co., Ltd. from 2012 to 2018. Mr. Xu has years of experience at Tsinghua University at various positions including Deputy Director of President's Office, Director of Administration, and Vice Dean of General Affairs. Mr. Xu received his master's degree in mechanical engineering from Tsinghua University in 1988.

*Gray Zhu* has served as our independent director since June 2024. Since June 2021, Mr. Zhu has served as the president of PharmaGend Global Medical Services Pte Ltd, the vice president of Pharmaron Beijing Co., Ltd. (SHE: 300759), and a partner of Bayland Capital. Prior to that, from February 2010 to February 2020, Mr. Zhu served as the general manger and the director of Dingli Corp Ltd (SHE: 300050). Mr. Zhu also served as an independent director of Beijing Kaiwen Education Tech Co Ltd (SHE: 002659) from February 2010 to February 2020. From October 2007 to January 2009, Mr. Zhu served as the vice president and chief financial officer of Zhonghe Co., Ltd. From October 2004 to October 2007, Mr. Zhu served as an executive director and the chief financial officer of Asia Media Co., Ltd. (TSE: 2149). From September 2001 to October 2004, Mr. Zhu served as a senior financial officer at Mars Foods (Beijing) Co., Ltd. From July 1999 to September 2001, Mr. Zhu served as a finance manager at Lucent Technologies China. From July 1997 to July 1999, Mr. Zhu served as a senior accountant at KMPG Huazhen LLP. Mr. Zhu received his bachelor's degree in economics from University of International Business and Economics in July 1997 and received his EMBA degree from China Europe International Business School in July 2008.

 

*Xiaodong Li* has served as our chief operating officer since November 2023. Mr. Li served in multiple positions at our company from 2016, including the director of Central China region and the general manager of Shanghai region. Mr. Li has extensive experience of approximately 20 years in chain business operation and management. Prior to joining us, Mr. Li served as an operations director at Wuhan TSS Catering Management Co., Ltd. from 2013 to 2016. From 2008 to 2013, Mr. Li served as an operations director at Wuhan Sanming Food Co., Ltd. From 2004 to 2008, Mr. Li served in various positions including a director of regional operations at Huapu Supermarket (Hebei) Co., Ltd. From 1998 to 2004, Mr. Li served as a commercial representative at Auqisn (Australia) Electric. Mr. Li graduated from Wuhan University of Technology with the major of architecture in 1998.

**B. Compensation**

For the fiscal year ended December 31, 2025, we paid an aggregate of RMB3.5 million (US$0.5 million) in cash to our directors and executive officers. For share incentive grants to our directors and executive officers, see "— Share Incentive Plan." We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee's salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.

**Employment Agreements and Indemnification Agreements** 

We have entered into employment agreements with each of our executive officers. Each of our executive officers is employed for a specified time period, which can then be renewed upon mutual agreement before the expiration of the current employment term. We may terminate an executive officer's employment for cause at any time without advance notice in certain events. We may also terminate an executive officer's employment by giving a prior written notice or by paying certain compensation. An executive officer may terminate his or her employment at any time by giving prior written notice.

Each executive officer has agreed to hold, unless expressly consented to by us, at all times during and after the termination of his or her employment agreement, in strict confidence and not to use, any of our confidential information or the confidential information of our customers and suppliers. In addition, each executive officer has agreed to be bound by certain non-compete and non-solicitation restrictions during the term of his or her employment and for twenty-four months following the last date of employment.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

**Share Incentive Plan** 

***2019 Plan***

We adopted the 2019 Plan on August 22, 2019, to attract and retain exceptionally qualified personnel and to encourage them to acquire a proprietary interest in our development and performance. The 2019 Plan provides for the issuance of up to an aggregate of 15,028,567 of our ordinary shares (62,620 ordinary shares after retroactively adjusted to reflect the 2022 Share Consolidation and the 2023 Share Consolidation). As of date of this annual report, options to purchase an aggregate number of 19,013 ordinary shares are outstanding under the 2019 Plan.

The options granted under the 2019 Plan have been completely assumed and replaced by the options under the 2020 Plan. One option granted under the 2019 Plan was assumed and replaced by 0.478333 option under the 2020 Plan.

***2020 Plan***

We adopted the 2020 Plan on November 17, 2020, to assume and replace the 2019 Plan. The Parent rolled over options granted under the 2019 Plan with the same terms. The 2020 Plan provides for the issuance of up to an aggregate of 7,188,661 Class A ordinary shares (an aggregate of 29,953 of Class A ordinary shares after retroactively adjusted to reflect the 2022 Share Consolidation and the 2023 Share Consolidation). Pursuant to the 2020 Plan, as amended and restated on May 6, 2021, August 2022, December 2023, February 2024 and August 2025, the maximum aggregate number of shares of the Company that may be issued is 4,071,620 Class A ordinary shares, plus an automatic replenishment to 2,000,000 Class A ordinary shares under the circumstance where the total number of Class A ordinary shares which may be issuable pursuant to the awards granted under the 2020 Plan are less than 200,000. As of the date of this annual report, options to purchase an aggregate number of 267,302 Class A ordinary shares were granted and outstanding, including 19,013 Class A ordinary shares granted to replace the granted and outstanding awards under 2019 Plan.

The terms under the 2020 Plan are substantially the same with the 2019 Plan. The following paragraphs summarize the terms of the 2020 Plan.

*Types of Awards.* The 2020 Plan permits the awards of options, share appreciation rights, rights to dividends and dividend equivalent right, restricted shares and restricted share units and other rights or benefits under the 2020 Plan.

*Plan Administration.* The 2020 Plan shall be administrated by a committee formed in accordance with applicable stock exchange rules, unless otherwise determined by our Board of Directors.

*Eligibility.* Our employees and consultants are eligible to participate in the 2020 Plan. An employee or consultant who has been granted an award may, if he or she is otherwise eligible, be granted additional awards.

*Designation of Award.* Each award under the 2020 Plan is designated in an award agreement, which is a written agreement evidencing the grant of an award executed by our company and the grantee, including any amendments thereto.

*Conditions of Award.* Our Board of Directors or any entity appointed by our Board of Directors to administer the 2020 Plan shall determine the provisions, terms, and conditions of each award including, but not limited to, the award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, and form of payment upon settlement of the award.

*Terms of Award.* The term of each award is stated in the award agreement between our company and the grantee of such award.

*Transfer Restrictions.* Unless otherwise determined by the administrator of the 2020 Plan, no award and no right under any such award, shall be assignable, alienable, saleable or transferable by the employee otherwise than by will or by the laws of descent and distribution unless, if so determined by the administrator of the 2020 Plan, the employee may, in the manner established by such administrator, designate a beneficiary or beneficiaries to exercise the rights of the employee, and to receive any property distributable, with respect to any award upon the death of the employee.

 

*Exercise of Award.* Any award granted under the 2020 Plan is exercisable at such times and under such conditions as determined by the administrator under the terms of the 2020 Plan and specified in the award agreement. An award is deemed to be exercised when exercise notice has been given to our company in accordance with the terms of the award by the person entitled to exercise the award and full payment for the shares with respect to which the award is exercised.

*Amendment, Suspension or Termination of the 2020 Plan.* The administrator of the 2020 Plan may amend, alter, suspend, discontinue or terminate the 2020 Plan, or any award agreement hereunder or any portion hereof or thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without:

● shareholder approval with such legally mandated threshold for a resolution of the shareholders if such approval is necessary to comply with any tax or regulatory requirement for which or with which the administrator of the 2020 Plan deems it necessary or desirable to qualify, or

● shareholder approval with such threshold for a resolution of the shareholders in respect of such amendment, alteration, suspension, discontinuation or termination as provided in our memorandum and articles of association for any amendment to the 2020 Plan that increases the total number of shares reserved for the purposes of the 2020 Plan, and

● with respect to any award agreement, the consent of the affected employee, if such action would materially and adversely affect the rights of such employee under any outstanding award.

The following table summarizes, as of February 28, 2026, the outstanding options that we granted to the persons who serve as our directors and executive officers under the 2020 Plan, which have been retroactively adjusted to reflect the 2022 Share Consolidation and the 2023 Share Consolidation. Such options were granted to reflect assumption of the awards granted to such persons under the 2019 Plan.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position** | **Class A <br> Ordinary <br> Shares <br> Underlying <br> Outstanding <br> Options<br> to Be <br> Assumed** | **Option <br> Exercise <br> Price (US$ <br> per Share)** | **Date of <br> Grant** | **Date of <br> Expiration** |
| Daqing Mao | Director |  |  |  |  |
| Zirui Wang | Chief Executive Officer and Chief Risk Officer |  |  |  |  |
| Zhimo Zhao | Director |  |  |  |  |
| Wei Hu | Director, |  |  |  |  |
| Jinghong Xu | Independent Director |  |  |  |  |
| Gray Zhu | Independent Director |  |  |  |  |
| Zhenfei Wu<sup>(1)</sup> | Chief Marketing Officer |  |  |  |  |
| Jianghai Shen<sup>(2)</sup> | Chief Product Designer |  |  |  |  |
| Xiaodong Li | Chief Operating Officer |  |  |  |  |
| Yan Xu<sup>(3)</sup> | Financial Reporting Director |  |  |  |  |
| All directors and executive officers as a group |  |  |  |  |  |
| All non-executive employees as a group |  | 267302 | 0.00021 | Various dates from September 19, 2019 to December 26, 2025 | Various dates from September 19, 2029 to December 25, 2035 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Mr. Zhenfei Wu ceased to
 be our chief marketing officer since January 15, 2026.

(2) Mr. Jianghai Shen ceased
 to be our chief product designer since January 15, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Ms. Yan Xu ceased to be our financial reporting director
 since June 30, 2025.

**C. Board Practices**

**Board of Directors**

Our Board of Directors consists of six directors, including two independent directors: Jinghong Xu and Gray Zhu. A director is not required to hold any of our shares to qualify as a director. The Listing Rules of the Nasdaq generally require that a majority of an issuer's board of directors must consist of independent directors.

A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with us is required to declare the nature of his or her interest at a meeting of our directors. A general notice given to the directors by any director to the effect that he or she is a member, shareholder, director, partner, officer or employee of any specified company or firm and is to be regarded as interested in any contract or transaction with that company or firm shall be deemed a sufficient declaration of interest for the purposes of voting on a resolution in respect to a contract or transaction in which he/she has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

A director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he/she may be interested therein and if he/she does so, his/her vote shall be counted and he/she may be counted in the quorum at any meeting of the directors at which any such contract or proposed contract or arrangement is considered. Our Board of Directors may exercise all of the powers to borrow money, to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock or other securities whenever money is borrowed or as security for any of our debt, liability or obligation or of any third party. None of our directors has a service contract with us that provides for benefits upon termination of service as a director.

**Committees of our Board of Directors**

We have established an audit committee, a compensation committee and a nominating and corporate governance committee under our Board of Directors. We have also adopted a charter for each of the three committees. Each committee's members and functions are described below.

 

*Audit Committee.* Our audit committee consists of Gray Zhu and Jinghong Xu, chaired by Gray Zhu. We have determined that each of them satisfies the "independence" requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq and meet the independence standards under Rule 10A-3 under the Exchange Act, as amended. We have determined that Gray Zhu qualifies as an "audit committee financial expert." The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements. The audit committee is responsible for, among other things:

● establishing clear hiring policies for employees or former employees of the independent auditors;

● reviewing and recommending to our Board of Directors for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor;

● approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors at least annually;

● obtaining a written report from our independent auditor describing matters relating to its independence and quality control procedures;

● reviewing with the independent registered public accounting firm any audit problems or difficulties and management's response;

● discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices;

● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

● reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our Board of Directors for inclusion in our annual reports;

● discussing the annual audited financial statements with management and the independent registered public accounting firm;

● reviewing policies with respect to risk assessment and risk management;

● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures;

● periodically reviewing and reassessing the adequacy of the committee charter;

● approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function;

● establishing and overseeing procedures for the handling of complaints and whistleblowing;

● meeting separately and periodically with management, the internal auditors and the independent registered public accounting firm;

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of its procedures to ensure proper compliance;

● reporting periodically to our Board of Directors; and

● handling other matters that are specifically delegated to our audit committee by our Board of Directors from time to time.

 

*Compensation Committee.* Our compensation committee consists of Wei Hu and Gray Zhu. The compensation committee assists our Board of Directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which their compensation is deliberated upon. The compensation committee is responsible for, among other things:

● reviewing and evaluating our executive compensation and benefits policies generally;

● reviewing and recommending any incentive compensation or equity plans, programs or other similar arrangements;

● periodically reviewing and reassessing the adequacy of the committee charter;

● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's independence from management; and

● reporting periodically to our Board of Directors; and

● handling other matters that are specifically delegated to the compensation committee by our Board of Directors from time to time.

*Nominating and Corporate Governance Committee.* Our nominating and corporate governance committee consists of Jinghong Xu, Daqing Mao and Zhimo Zhao, chaired by Jinghong Xu. We have determined that Jinghong Xu satisfies the "independence" requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq. The nominating and corporate governance committee assists our Board of Directors in selecting individuals qualified to become directors and in determining the composition of our Board of Directors and its committees. The nominating and corporate governance committee is responsible for, among other things:

● recommending nominees to our Board of Directors for election or re-election to our Board of Directors, or for appointment to fill any vacancy or newly created directorships on our Board of Directors;

● reviewing periodically with our Board of Directors the current composition of our Board of Directors with respect to characteristics such as judgment, experience, expertise, diversity and background;

● recommending to our Board of Directors such criteria with respect to nomination or appointment of members of our Board of Directors and chairs and members of its committees or other corporate governance matters as may be required pursuant to any SEC or Nasdaq rules, or otherwise considered desirable and appropriate;

● recommending to our Board of Directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself;

● periodically and reassessing the adequacy of the committee charter;

● overseeing compliance with the corporate governance guidelines and code of business conduct and ethics; and

● overseeing and leading the self-evaluation of our Board of Directors in its performance and effectiveness as a whole.

**Duties and Functions of Directors**

Under Cayman Islands law, our directors owe fiduciary duties to us, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to us a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.

However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. We have the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. The functions and powers of our Board of Directors include, among others:

● convening shareholders' annual and extraordinary general meetings and reporting its work to shareholders at such meetings;

● declaring dividends;

● appointing directors or officers and determining their terms of offices and responsibilities;

● exercising the borrowing powers of our company and mortgaging the property of our company; and

● approving the transfer of our shares, including the registering of such shares in our share register.

**Terms of Directors and Officers**

Our officers are elected by and serve at the discretion of our Board of Directors. Each director is not subject to a term of office and holds office until such time as his successor takes office or until the earlier of his death, resignation or removal from office by ordinary resolution of all shareholders. A director will be removed from office automatically if, among other things, the director:

● becomes bankrupt or makes any arrangement or composition with his creditors;

● dies or is found by us to be of unsound mind;

● resigns by notice in writing to us;

● is prohibited by law from being a director; or

● is removed from office pursuant to any other provisions of our memorandum and articles of association.

**Interested Transactions**

A director may, subject to any separate requirement for audit and risk committee approval under applicable law or applicable Nasdaq rules, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any directors in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter.

**D. Employees** 

We had a total of 149, 38 and 42 employees as of December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, approximately 63% of our employees held a bachelor's degree or above. The following table gives a breakdown of our employees as of December 31, 2025 by function:

---

| | |
|:---|:---|
| **Function** | **Number** |
| Operation and development | 23 |
| Technology and product development | 4 |
| Finance | 4 |
| General administrative and others | 11 |
| **Total** | 42 |

---

As of December 31, 2025, all of our employees were based in Greater China.

We enter into standard labor contracts with our employees. We also enter into standard confidentiality agreements with our senior management that contain non-compete restrictions. We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes.

**E. Share Ownership** 

The following table sets forth information regarding the beneficial ownership of the ordinary shares of the Parent as of February 28, 2026 by:

● each person known to us to beneficially own 5% or more of our outstanding shares;

● each of the officers and directors of the Parent; and

● all of the officers and directors of the Parent as a group.

The calculations in the table below were based on 4,555,930 ordinary shares, comprising of 4,436,543 Class A ordinary shares (excluding 2,223,568 Class A ordinary shares reserved for future issuance under our 2020 Plan) and 119,387 Class B ordinary shares, and 11,800 Series A Preferred Shares issued and outstanding as of February 28, 2026. The 2,223,568 Class A ordinary shares, although legally issued, are not deemed as issued from an accounting perspective.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Shares Beneficially Owned** | **Shares Beneficially Owned** | **Shares Beneficially Owned** | **Shares Beneficially Owned** | **Shares Beneficially Owned** | **Shares Beneficially Owned** |
| <br>**Name and Address of Beneficial Owner<sup>(1)</sup>** | **Class A<br> Ordinary <br> Shares** | **Class B <br> Ordinary <br> Shares** | **Total <br> Ordinary <br> Shares\*\*** | **Series A<br> Preferred <br> Shares\*\*** | **% of <br> Beneficial <br> Ownership\*\*** | **% of <br> Aggregate <br> Voting <br> Power\*\*\*** |
| *Executive Officers and Directors* |  |  |  |  |  |  |
| Daqing Mao<sup>(2)</sup> | 5625 | 119387 | 125013 |  | 2.74% | 82.08% |
| Zirui Wang |  |  |  |  |  |  |
| Xiaodong Li |  |  |  |  |  |  |
| Wei Hu |  |  |  |  |  |  |
| Zhimo Zhao |  |  |  |  |  |  |
| Jinghong Xu |  |  |  |  |  |  |
| Gray Zhu |  |  |  |  |  |  |
| Zhenfei Wu<sup>(3)</sup> |  |  |  |  |  |  |
| Jianghai Shen<sup>(3)</sup> |  |  |  |  |  |  |
| Yan Xu<sup>(3)</sup> |  |  |  |  |  |  |
| All Executive Officers and Directors as a group | 5626 | 119387 | 125013 |  | 2.74% | 82.08% |
| *5% or Greater Holders* |  |  |  |  |  |  |
| Holding group of Dr. Daqing Mao/Angela Bai<sup>(2)</sup> | 5626 | 119387 | 125013 |  | 2.74% | 82.08% |

---

\* On as-converted basis. The Parent has adopted a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. In respect of matters requiring the votes of shareholders, each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to 170 votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

\*\* Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days as of February 28, 2026, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

\*\*\* For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Except for Jinghong Xu,
 the address of our directors and executive officers is 4th Floor, Building 1, No. 2 Dongsihuan North Road, Chaoyang District,
 Beijing, People's Republic of China. The business address of Jinghong Xu is Rm. 1110, Shouxiang Technology Building, No.51 Xueyuan Road, Haidian
District, Beijing, China.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents (i)
 5,626 Class A ordinary shares and 97,500 Class B ordinary shares, directly held by Maodq Limited, a limited liability company incorporated
 in the British Virgin Islands wholly owned by Dr. Daqing Mao, (ii) 15,907 Class B ordinary shares held by Fair Vision Group Limited,
 a British Virgin Islands company wholly owned by Planet MDQ Limited, which is in turn wholly owned by Dr. Daqing Mao, and (iv) 5,980
 Class B ordinary shares held by Astro Angel Limited, a British Virgin Islands company wholly owned by Baixh Limited and ultimately
 controlled by Ms. Angela Bai, the spouse of Dr. Daqing Mao. The registered address of Maodq Limited is Commerce House, Wickhams Cay
 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands. The registered address of Fair Vision Group Limited and Astro Angel
 Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Mr. Jianghai Shen and Mr.
 Zhenfei Wu ceased to be our chief product designer and chief marketing officer since January 15, 2026. Ms. Yan Xu ceased to be our
 financial reporting director since June 30, 2025.

To our knowledge, as of February 28, 2026, 2,282 of our Class A ordinary shares are held by 30 record holders in the United States, representing approximately 0.1% of our total outstanding shares on an as converted basis.

**F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation**

Not applicable.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A. Major Shareholders**

See "Item 6. Directors, Senior Management and Employees — E. Share Ownership."

**B. Related Party Transactions**

**Contractual Arrangements with the VIEs and Their Respective Shareholders**

See "Item 4. Information on the Company — C. Organizational Structure."

**Employment Agreements and Indemnification Agreements**

See "Item 6. Directors, Senior Management and Employees — B. Compensation — Employment Agreements and Indemnification Agreements."

**Share Incentives**

See "Item 6. Directors, Senior Management and Employees — B. Compensation — Share Incentive Plan."

**Other Transactions of Ucommune**

***Transactions with Angela Bai and Dr. Daqing Mao***

In September 2022, Angela Bai, spouse of Dr. Daqing Mao, entered into two new loan agreements of RMB3.5 million (US$0.5 million) and RMB8.5 million (US$1.2 million) with us, respectively. One loan had an interest rate of 8.0% per annum with a maturity date of March 18, 2023, and the other had an interest rate of 8.0% per annum with a maturity date of September 20, 2023. Pursuant to the loan agreements, the loan must be repaid within 90 days of the maturity date. We fully repaid the loans in the total principal amount of RMB12.0 million (US$1.7 million) in 2023.

 ****

On March 6, 2024, we entered into a share subscription agreement with Maodq Limited, an entity wholly owned by Dr. Daqing Mao, pursuant to which Maodq Limited subscribed for 80,000 newly issued Class B ordinary shares at a per share subscription price of US$3.00, for an aggregate cash consideration of US$240,000, to incentivize Dr. Daqing Mao to provide continued services and contribution to our company. The consideration was received by us in March 2024.

On April 15, 2024, we entered into two loan agreements of RMB0.7 million (US$0.1 million) and RMB1.4 million (US$0.2 million) with Dr. Daqing Mao, which have no interest with a maturity date of April 15, 2025. As of the date of this annual report, the loans have not been repaid.

***Transactions with Youxiang Group***

For 2023, 2024 and 2025, the lease expenses incurred in connection with lease agreements with Youxiang Group were RMB27,000, nil, and nil respectively. As of December 31, 2023, 2024 and 2025, the amounts due to Youxiang Group under these lease agreements were RMB0.4 million, RMB1.3 million, and RMB1.6 million (US$0.2 million), respectively.

Youxiang Group provides property management services to us. For 2023, 2024 and 2025, the expenses incurred in connection with property management services provided by Youxiang Group were RMB0.9 million, RMB0.5 million, and nil, respectively. As of December 31, 2023, 2024 and 2025, the amounts due to Youxiang Group for property management services were nil.

We provide workspace membership services to Youxiang Group. For 2023, 2024 and 2025, revenue generated from Youxiang Group for workspace membership services was RMB34,000, RMB26,000, and nil, respectively. As of December 31, 2023, 2024 and 2025, the amounts due from Youxiang Group for workspace membership services were nil.

 ****

***Transactions with Ucommune Venture***

In May 2019, Youshenghengtong Technology entered into a series of contractual arrangements with Ucommune Venture, a company influenced significantly by Dr. Daqing Mao and his spouse Angela Bai, as well as its shareholders, and the contractual arrangements were renewed in July 2019 and in November 2019, respectively. On September 20, 2024, Youshenghengtong Technology issued the Notice of Termination to terminate the contractual arrangements with Ucommune Venture, and the existing shareholders of Ucommune Venture. As a result, the series of contractual arrangements entered into by and among Youshenghengtong Technology, Ucommune Venture and/or its shareholders, including exclusive business cooperation agreement, equity pledge agreement, exclusive option agreement, shareholders' voting rights proxy agreement and spousal consent letter, were terminated in accordance with the terms therein following 30 calendar days after the delivery date of the Notice of Termination. Ucommune Venture became a related party of us since October 26, 2024, due to the termination of contractual arrangements.

After October 26 in 2024, Ucommune Venture forgave an aggregate of RMB11.5 million (US$1.6 million) in connection with the termination of contractual arrangements. As of December 31, 2025, the amount due to Ucommune Venture was RMB6.0 million (US$0.9 million).

After October 26 in 2024, we forgave an aggregate of RMB7.9 million (US$1.1 million) in connection with the termination of contractual arrangements. As of December 31, 2025, the amount due from Ucommune Venture was nil.

In 2025, Ucommune Venture exempted the payable RMB56.7 million from the company. And the company exempted RMB2.2 million of lawyer's fee paid by the company on behalf of Ucommune Venture.

On August 1 2025, the Group disposed of two subsidiaries, Beijing Anlingranliu Enterprise Management Co., Ltd. and Beijing Anlingranqi Enterprise Management Co., Ltd.to Beijing Dongyi Yuanda Architectural Decoration Engineering Co., Ltd. ("Dongyi Yuanda), subsidiary of Ucommune Venture Group. The consideration of the disposal was settle by the payables due to Dongyi Yuanda. The disposal recognized a gain of RMB 55 recorded as additional paid-in capital as it is the transaction under common control as of the transaction date. Dongyi Yunda was no longer the related party of the Group after Ucommune Venture Group disposed of 46.05% shares of Dongyi Yuanda in September 2025.

**C. Interests of Experts and Counsel**

Not Applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Statements and Other Financial Information**

We have appended consolidated financial statements filed as part of this annual report.

**Legal Proceedings** 

As of the date of this annual report, we are not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management's time and attention.

**Dividend Policy**

We have not previously declared or paid cash dividends and we have no plan to declare or pay any dividends in the near future on our shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and develop our business.

The Parent is our ultimate holding company incorporated in the Cayman Islands, and relies principally on dividends from our PRC subsidiaries for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business."

Our Board of Directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our Board of Directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business.

If our Board of Directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant.

**B. Significant Changes**

Except as otherwise disclosed in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included herein.

**ITEM 9. THE OFFER AND LISTING**

**A. Offer and Listing Details**

See "— C. Markets" for our host market and trading symbol. Holders of our Class A ordinary shares and warrants should obtain current market quotations for their securities. The Parent has a dual-class ordinary share structure in which Class A ordinary shares have different voting rights from Class B ordinary shares. Class A ordinary shares are each entitled to one vote, whereas Class B ordinary shares are each entitled to 170 votes. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Our Corporate Structure — The Parent's dual-class share structure with different voting rights may adversely affect the value and liquidity of the Class A ordinary shares."

**B. Plan of Distribution**

Not applicable.

**C. Markets**

The Parent's Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "UK" since November 17, 2020. The Parent's Prior Warrants were listed on the Nasdaq Capital Market under the symbol "UKOMW" from November 17, 2020 until their expiration on November 18, 2025, at which time they ceased trading and were delisted. On November 18, 2025, the Company filed a Form 25 with respect to the delisting of its Prior Warrants from Nasdaq. The New Warrants, UPOs, UPO Warrants, UPO Rights, Debenture and JAK Warrants of the Parent are not listed in any national securities exchange or market.

**D. Selling Shareholders**

Not applicable.

**E. Dilution**

Not applicable.

**F. Expenses of the Issue**

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION**

**A. Share Capital**

Not applicable.

**B. Memorandum and Articles of Association**

The Parent is an exempted company with limited liability incorporated under the laws of the Cayman Islands and the Parent's affairs are governed by its memorandum and articles of association, as amended and restated from time to time, and the Companies Act (As Revised) of the Cayman Islands, which we refer to as the Companies Act below, and the common law of the Cayman Islands. In this section, "we," "us" or "our" refers to Ucommune International Ltd, the Parent.

The following are summaries of material provisions of our fourth amended and restated memorandum and articles of association and the Companies Act insofar as they relate to the material terms of our ordinary shares.

**Registered Office and Objects**

Our registered office in the Cayman Islands is at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

According to Clause 3 of our fourth amended and restated memorandum and articles of association, the objects for which we are established are unrestricted and we shall have full power and authority to carry out any object not prohibited by the Companies Act or as the same may be revised from time to time, or any other law of the Cayman Islands.

**Board of Directors**

See "Item 6. Directors, Senior Management and Employees."

**Ordinary Shares**

 ****

***General.*** Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. All of our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.

 ****

***Dividends.*** The holders of our ordinary shares are entitled to such dividends as may be declared by our Board of Directors subject to our fourth amended and restated memorandum and articles of association and the Companies Act. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Our fourth amended and restated articles of association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our Board of Directors determine is no longer needed. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless our directors determine that, immediately after the payment, we will be able to pay our debts as they become due in the ordinary course of business and we have funds lawfully available for such purpose. Holders of Class A ordinary shares and Class B ordinary shares will be entitled to the same amount of dividends, if declared.

 ****

***Voting Rights; Meetings of Shareholders.*** In respect of all matters subject to a shareholders' vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 170 votes, voting together as one class. Voting at any meeting of shareholders is by poll and not on a show of hands.

A quorum required for a meeting of shareholders consists of two or more shareholders holding not less than one-half of the votes attaching to the issued and outstanding shares entitled to vote at general meetings present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders' annual general meetings. Our memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we will specify the meeting as such in the notices calling it, and the annual general meeting will be held at such time and place as may be determined by our directors. We, however, will hold an annual shareholders' meeting during each fiscal year, as required by the Listing Rules at the Nasdaq. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting. Shareholders' annual general meetings and any other general meetings of our shareholders may be called by a majority of our Board of Directors or our chairman or upon a requisition of shareholders holding at the date of deposit of the requisition not less than one-third of the votes attaching to the issued and outstanding shares entitled to vote at general meetings, in which case the directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, our fourth amended and restated memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Advance notice of at least fifteen (15) days is required for the convening of our annual general meeting and other general meetings unless such notice is waived in accordance with our articles of association.

An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution also requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting. A special resolution will be required for important matters such as a change of name or making changes to our fourth amended and restated memorandum and articles of association.

***Conversion.*** Each Class B ordinary share is convertible into one Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holder to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into the equivalent number of Class A ordinary shares.

 ****

***Transfer of Ordinary Shares.*** Subject to the restrictions in our fourth amended and restated memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our Board of Directors.

Our Board of Directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our Board of Directors may also decline to register any transfer of any ordinary share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our Board of Directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

● a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of the Nasdaq, be suspended and the register closed at such times and for such periods as our Board of Directors may from time to time determine, *provided*, *however*, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our Board of Directors may determine.

 ****

***Liquidation.*** On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them. Any distribution of assets or capital to a holder of ordinary share will be the same in any liquidation event. Any distribution of assets or capital to a holder of a Class A ordinary share and a holder of a Class B ordinary share will be the same in any liquidation event.

 ****

***Calls on Shares and Forfeiture of Shares.*** Our Board of Directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

 ****

***Redemption, Repurchase and Surrender of Ordinary Shares.*** We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our Board of Directors. Our company may also repurchase any of our shares provided that the manner and terms of such purchase have been approved by our Board of Directors or are otherwise authorized by our memorandum and articles of association. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company's profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if the company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (1) unless it is fully paid up, (2) if such redemption or repurchase would result in there being no shares issued and outstanding, or (3) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

 ****

***Variations of Rights of Shares.*** If at any time our share capital is divided into different classes or series of shares, the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not our company is being wound-up, may be varied with the consent in writing of a majority the holders of the issued shares of that class or series or with the sanction of an ordinary resolution at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking *pari passu* with such existing class of shares.

***Inspection of Books and Records.*** Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (except for the memorandum and articles of association, special resolutions which have been passed by our shareholders, and our register of mortgages and charges). The Registrar of Companies of the Cayman Islands shall make available the list of the names of the current directors of the Company (and where applicable the current alternate directors of the Company) for inspection by any person upon payment of a fee by such person. However, we will provide our shareholders with annual audited financial statements. See "Where You Can Find Additional Information."

 ****

 ****

***Issuance of Additional Shares.*** Our fourth amended and restated memorandum of association authorizes our Board of Directors to issue additional ordinary shares from time to time as our Board of Directors shall determine, to the extent of available authorized but unissued shares.

Our fourth amended and restated memorandum of association also authorizes our Board of Directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

● the designation of the series;

● the number of shares of the series;

● the dividend rights, dividend rates, conversion rights, voting rights; and

● the rights and terms of redemption and liquidation preferences.

Our Board of Directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

 ****

***Changes in Capital.*** We may from time to time by ordinary resolutions:

● increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

● consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

● divide our share into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential deferred, qualified or special rights, privileges, conditions or such restrictions;

● sub-divide our existing shares, or any of them into shares of a smaller amount that is fixed by our fourth amended and restated memorandum and articles of association; and

● cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.

Subject to the Companies Act and our memorandum and articles of association with respect to matters to be dealt with by ordinary resolution, we may, by special resolution, reduce our share capital and any capital redemption reserve in any manner authorized by law.

 ****

***Anti-Takeover Provisions.*** Some provisions of our fourth amended and restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our Board of Directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

 ****

***Exempted Company.*** We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

● does not have to file an annual return of its shareholders with the Registrar of Companies;

● is not required to open its register of members for inspection;

● does not have to hold an annual general meeting;

● may issue shares with no par value;

● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

"Limited liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder's shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

 ****

***Register of Members.*** Under the Companies Act, we must keep a register of members and there should be entered therein:

● the names and addresses of our members, together with a statement of the shares held by each member, and such statement shall confirm (1) of the amount paid or agreed to be considered as paid, on the shares of each member, (2) the number and category of shares held by each member, and (3) whether each relevant category of shares held by a member carries voting rights under the articles of association of the company, and if so, whether such voting rights are conditional;

● the date on which the name of any person was entered on the register as a member; and

● the date on which any person ceased to be a member.

Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption of fact on the matters referred to above unless legal title to the shares as set against its name in the register of members. We will perform the procedure necessary to immediately update the register of members to record and give effect to the issuance of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name.

If the name of any person is incorrectly entered in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a member of our company, the person or member aggrieved (or any member of our company or our company itself) may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

 ****

 ****

***Differences in Corporate Law***

The Companies Act is derived, to a large extent, from the older Companies Acts of England, but does not follow many recent English law statutory enactments. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware.

 

*Mergers and Similar Arrangements.* The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (1) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (2) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (1) a special resolution of the shareholders of each constituent company, and (2) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a "parent" of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provide the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, *provided* that the arrangement is approved by (1) 75% in value of the shareholders or class of shareholders, as the case may be, or (2) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

● the statutory provisions as to the required majority vote have been met;

● the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

● the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

● the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of a dissenting minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of not less than 90.0% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction is thus approved, or if a tender offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

 

*Shareholders' Suits.* In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in *Foss v. Harbottle* and the exceptions thereto) which permit a minority shareholder to commence a class action against or derivative actions in the name of the company to challenge actions where:

● a company acts or proposes to act illegally or ultra vires;

● the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

● those who control the company are perpetrating a "fraud on the minority."

 

*Indemnification of Directors and Executive Officers and Limitation of Liability.* Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide that that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our fourth amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

 

*Directors' Fiduciary Duties.* Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company - a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

 

*Shareholder Action by Written Consent.* Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. The Companies Act and our fourth amended and restated articles of association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

 

*Shareholder Proposals.* Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Companies Act provide shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our fourth amended and restated articles of association allow our shareholders holding in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our Board of Directors is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders' meeting, our fourth amended and restated articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders. As an exempted Cayman Islands company, we are not obliged by law to call shareholders' annual general meetings.

 

*Cumulative Voting.* Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our fourth amended and restated articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

 

*Removal of Directors.* Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our fourth amended and restated articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated. In addition, a director's office shall be vacated if the director (1) gives notice in writing to the company that he resigns the office of director; (2) dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; (3) is prohibited by any applicable law or designated stock exchange rules from being a director; (4) is found to be or becomes of unsound mind; or (5) is removed from office pursuant to any other provision of our fourth amended and restated memorandum and articles of association.

*Transactions with Interested Shareholders.* The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, the directors of the company are required to comply with fiduciary duties which they owe to the company under Cayman Islands laws, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company, and are entered into for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

 

*Restructuring.* A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is or is likely to become unable to pay its debts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) intends to present a compromise or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

 

*Dissolution; Winding up.* Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

 

 

*Variation of Rights of Shares.* Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our fourth amended and restated articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of a majority of the issued shares of that class or with the sanction of an ordinary resolution passed at a general meeting of the holders of the shares of that class.

*Amendment of Governing Documents.* Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our fourth amended and restated memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

 

*Rights of Nonresident or Foreign Shareholders.* There are no limitations imposed by our fourth amended and restated memorandum and articles of association on the rights of nonresident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in fourth amended and restated memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

**C. Material Contracts**

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item 4. Information on the Company," "Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions" or elsewhere in this annual report.

**D. Exchange Controls**

Under the laws of the Cayman Islands, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our ordinary shares. See "Item 4. Information of the Company — B. Business Overview — Regulation — Regulations Relating to Foreign Exchange" and "Item 4. Information of the Company — B. Business Overview — Regulation — Regulations Relating to Dividend Distribution."

**E. Taxation**

**Cayman Islands Taxation** 

According to Maples and Calder (Hong Kong) LLP, our Cayman Islands legal counsel, the Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of the ordinary shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands.

The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of the ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the ordinary shares, nor will gains derived from the disposal of the ordinary shares be subject to Cayman Islands income or corporate tax.

**People's Republic of China Taxation**

Under the PRC EIT Law, which became effective on January 1, 2008 and most recently amended on December 29, 2018, an enterprise established outside the PRC with "*de facto* management bodies" within the PRC is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation rules to the PRC EIT Law, a "*de facto* management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.

In addition, the SAT Circular 82 issued by the SAT in April 2009 specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or resident in the PRC:

● senior management personnel and departments that are responsible for daily production, operation and management;

● financial and personnel decision-making bodies;

● key properties, accounting books, company seal, minutes of board meetings and shareholders' meetings; and

● half or more of the senior management or directors having voting rights.

Further to SAT Circular 82, the SAT issued the SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration on post-determination matters. Our company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. As such, we do not believe that our company meets all of the conditions above or is a PRC resident enterprise for PRC tax purposes. For the same reasons, we believe our other entities outside China are not PRC resident enterprises.

However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "*de facto* management body." There can be no assurance that the PRC government will ultimately take a view that is consistent with us. If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. For example, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders.

In addition, nonresident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us).

These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. See "Item 3. Key Information — D. Risk Factors — Risks Relating to Doing Business in China — If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable PRC tax consequences to us and our non-PRC shareholders."

**Material U.S. Federal Income Taxation Considerations** 

The following discussion describes certain material U.S. federal income tax consequences to U.S. Holders (defined below) of an investment in our Class A ordinary shares or warrants. This summary applies only to investors that hold our Class A ordinary shares or warrants as capital assets (generally, property held for investment) and that have the U.S. dollar as their functional currency. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), as in effect on the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below. No ruling has been sought from the U.S. Internal Revenue Service (the "IRS") with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. The summary below does not discuss certain U.S. federal tax consequences that may be relevant to a particular U.S. Holder's particular circumstances, such as consequences relating to the Medicare contribution tax on net investment income or the alternative minimum tax.

The following discussion neither deals with the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations such as:

● banks;

● certain financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● broker dealers;

● U.S. expatriates;

● traders that elect to use the mark-to-market method of accounting;

● tax-exempt entities;

● persons holding Class A ordinary shares or warrants as part of a straddle, hedging, conversion or integrated transaction;

● persons that actually or constructively (including through the ownership of warrants) own 10% or more of our stock, by total combined voting power or by value;

● persons who acquired Class A ordinary shares or warrants pursuant to the exercise of any employee share option or otherwise as compensation;

● persons holding Class A ordinary shares or warrants through partnerships or other pass-through entities; or

● persons required to accelerate the recognition of any item of gross income with respect to our Class A ordinary shares as a result of such income being recognized on an applicable financial statement.

**INVESTORS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES OR WARRANTS.**

The discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of Class A ordinary shares or warrants and you are, for U.S. federal income tax purposes,

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof or the District of Columbia;

● an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

● a trust (1) that is subject to the supervision of a court within the United States and the control of one or more United States persons as described in Internal Revenue Code Section 7701(a)(30), or (2) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Class A ordinary shares or warrants, the tax treatment of a partner will generally depend upon the status and the activities of the partnership. A U.S. Holder that is a partner in a partnership holding Class A ordinary shares or warrants is urged to consult its tax advisor.

**Taxation of Dividends and Other Distributions on Class A Ordinary Shares** 

Subject to the PFIC rules discussed below, the gross amount of any distributions we make to you with respect to our Class A ordinary shares (without reduction for any amounts withheld) generally will be includible in your gross income as foreign source dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Any such dividends will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a tax-free return of your tax basis in your Class A ordinary shares, and then, to the extent such excess amount exceeds your tax basis in your Class A ordinary shares, as capital gains. However, we currently do not, and we do not intend to, calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that any distribution will generally be reported as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gains under the rules described above.

With respect to certain non-corporate U.S. Holders, including individual U.S. Holders, dividends may be taxed at the lower capital gains rate applicable to "qualified dividend income", provided that (1) our Class A ordinary shares are readily tradable on an established securities market in the United States or we are eligible for the benefits of a qualifying income tax treaty with the United States, (2) we are neither a PFIC nor treated as such with respect to you (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year, and (3) the Class A ordinary shares are held for a holding period of more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. Class A ordinary shares are generally considered for the purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on Nasdaq, as our Class A ordinary shares currently are. If we are treated as a "resident enterprise" for PRC tax purposes (see "Taxation — People's Republic of China Taxation"), we may be eligible for the benefits of the income tax treaty between the United States and the PRC (the "Treaty"). You should consult your tax advisors regarding the availability of the lower capital gains rate applicable to qualified dividend income for any dividends paid with respect to our Class A ordinary shares.

Any non-U.S. withholding tax (including any PRC withholding tax (see "Taxation — People's Republic of China Taxation") paid (or deemed paid) by a U.S. Holder at the rate applicable to such holder may be eligible for foreign tax credits (or deduction in lieu of such credits) for U.S. federal income tax purposes, subject to applicable limitations. Any dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, any dividends distributed by us with respect to Class A ordinary shares will generally constitute "passive category income."

The rules relating to the determination of the foreign tax credit are complex and U.S. Holders should consult their tax advisors to determine whether and to what extent a credit would be available in their particular circumstances, including the effects of any applicable income tax treaties.

**Constructive Dividends on Class A Ordinary Shares or Warrants**

If the exercise price of our warrants is adjusted in certain circumstances (or in certain circumstances, there is a failure to make adjustments or a failure to make adequate adjustments), that adjustment (or failure to adjust) may result in the deemed payment of a taxable dividend to a U.S. Holder of warrants or our Class A ordinary shares. Any such constructive dividend will be taxable generally as described above under "— Taxation of Dividends and Other Distributions on Class A Ordinary Shares." Generally, a U.S. Holder's tax basis in our Class A ordinary shares or warrants will be increased to the extent of any such constructive dividend. It is not entirely clear whether a constructive dividend deemed paid to a non-corporate U.S. Holder could be "qualified dividend income" as discussed above under "— Taxation of Dividends and Other Distributions on Class A Ordinary Shares." U.S. Holders should consult their tax advisers regarding the proper U.S. federal income tax treatment of any adjustments to (or failure to adjust, or adjust adequately) the exercise price of the warrants.

We are currently required to report the amount of any constructive dividends on our website or to the IRS and to holders not exempt from reporting. The IRS has proposed regulations addressing the amount and timing of constructive dividends, as well as, obligations of withholding agents and filing and notice obligations of issuers in respect of such constructive dividends. If adopted as proposed, the regulations would generally provide that (1) the amount of a constructive dividend is the excess of the fair market value of the right to acquire stock immediately after the exercise price adjustment over the fair market value of the right to acquire stock (after the exercise price adjustment) without the adjustment, (2) the constructive dividend occurs at the earlier of the date the adjustment occurs under the terms of the instrument and the date of the actual distribution of cash or property that results in the constructive dividend and (3) we are required to report the amount of any constructive dividends on our website or to the IRS and to all holders (including holders that would otherwise be exempt from reporting). The final regulations will be effective for constructive dividends occurring on or after the date of adoption, but holders and withholding agents may rely on them prior to that date under certain circumstances.

**Taxation of a Disposition of Class A Ordinary Shares or Warrants** 

Subject to the PFIC rules discussed below, upon a sale or other disposition of Class A ordinary shares or warrants, a U.S. Holder will generally recognize a capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized (including the amount of any tax withheld) and such U.S. Holder's tax basis in such Class A ordinary shares or warrants. Any such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in our Class A ordinary shares or warrants at the time of the disposition exceeds one year. Long-term capital gain of individual U.S. Holders generally will be subject to U.S. federal income tax at reduced tax rates. The deductibility of capital losses is subject to limitations.

Any such gain or loss that you recognize generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes. However, if we are treated as a "resident enterprise" for PRC tax purposes, we may be eligible for the benefits of the Treaty. In such event, if PRC tax were to be imposed on any gain from the disposition of our Class A ordinary shares or warrants, a U.S. Holder that is eligible for the benefits of the Treaty may elect to treat the gain as PRC source income for foreign tax credit purposes. U.S. Holders should consult their tax advisors regarding the proper treatment of gain or loss in their particular circumstances, including the effects of any applicable income tax treaties.

**Taxation of Exercise or Expiration of Warrants** 

In general, you will not be required to recognize income, gain or loss upon exercise of our warrants by payment of the exercise price. Your tax basis in our Class A ordinary shares received upon exercise of the warrants will be equal to the sum of (1) your tax basis in the warrants exchanged therefor and (2) the exercise price of the warrants. Your holding period in our Class A ordinary shares received upon exercise will commence on the day after you exercise the warrants.

If the warrants expire without being exercised, you will recognize a capital loss in an amount equal to your tax basis in the warrants. Such loss will be long-term capital loss if, at the time of the expiration, your holding period in the warrants is more than one year. The deductibility of capital losses is subject to limitations.

**Passive Foreign Investment Company** 

A non-U.S. corporation will be a PFIC for U.S. federal income tax purposes for any taxable year if, after applying certain look-through rules, either:

● at least 75% of its gross income for such taxable year is passive income (the income test), or

● at least 50% of the total value of its assets (generally based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income (the asset test).

For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.

Passive income generally includes rents, royalties, dividends, interest and certain gains. Cash is a passive asset for these purposes. Goodwill is an active asset under the PFIC rules to the extent attributable to activities that produce active income. Although "passive income" generally includes rents, certain "active rental income" is not considered passive for purposes of determining whether a company is a PFIC.

Based on the manner in which we operate our business, the composition and characterization of our income and assets, and the value of our assets, including goodwill, although not clear, we believe that it is reasonable to take a position that we were not classified as a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2025. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you we will not be classified as a PFIC for the current or future taxable years. The value of the assets of our Parent for purposes of the PFIC determination will generally be determined by reference to the market price of our Class A ordinary shares, which could fluctuate significantly. Our market capitalization fluctuated significantly during the taxable year ended December 31, 2025. Among other matters, if our market capitalization does not increase or continues to decline, we may be or become classified as a PFIC for the current or future taxable years. If we are treated as a "controlled foreign corporation" (see "Item 3. Key Information — D. Risk Factors — Risks Relating to Being a Public Company and Our Securities — If a U.S. Holder is treated as owning at least 10% of our ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences." above), the value of the assets owned by our subsidiaries and consolidated VIEs will be determined by reference to the adjusted tax basis of such assets for U.S. federal income tax purposes, which may increase the likelihood that we are a PFIC. Because we do not currently track adjusted tax basis for U.S. federal income tax purposes, we may not be able to determine whether we are a PFIC in future taxable years. In addition, our PFIC status depends on the manner in which we operate our workspace business (and the extent to which our income from workspace membership continues to qualify as active for PFIC purposes). It is also possible that the IRS may challenge the composition and characterization of our assets or income or the valuation of our assets, goodwill and other unbooked intangibles, which may result in our company being, or becoming classified as, a PFIC for the current or future taxable years. Furthermore, it is not entirely clear how the contractual arrangements between us, the VIEs and their nominal shareholders are treated for purposes of the PFIC rules, and we may be or become a PFIC if the VIEs are not treated as owned by us. Because of these uncertainties, there can be no assurance we were not classified as a PFIC for our taxable year ended December 31, 2025, or will not be classified as a PFIC in the current taxable year or future taxable years.

If we are a PFIC for any taxable year during your holding period for our Class A ordinary shares (or under proposed U.S. Treasury regulations, the warrants), we generally will continue to be treated as a PFIC with respect to you for all succeeding years during which you hold our Class A ordinary shares or warrants, and, although subject to uncertainty, potentially our Class A ordinary shares received upon exercise of such warrants. Certain elections (such as a "deemed sale" election) may be available under certain circumstances.

For each taxable year that we are treated as a PFIC with respect to you, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you recognize from a sale or other disposition (including a pledge) of our Class A ordinary shares or warrants, unless you make a "mark-to-market" election as discussed below, which may not be available for the warrants. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period;

● the amount allocated to the current taxable year, and any taxable year in your holding period prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and

● the amount allocated to each other year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

In addition, non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us (as described above under "— Taxation of Dividends and Other Distributions on Class A Ordinary Shares") if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale or other disposition of our Class A ordinary shares or warrants cannot be treated as capital gains, even if you hold our Class A ordinary shares or warrants as capital assets.

If we are treated as a PFIC with respect to you for any taxable year, to the extent any of our subsidiaries are also PFICs or we make direct or indirect equity investments in other entities that are PFICs, you may be deemed to own a proportionate interest in such lower-tier PFICs that are directly or indirectly owned by us, and you may be subject to the adverse tax consequences described in the preceding paragraphs with respect to the shares of such lower-tier PFICs that you would be deemed to own. As a result, you may incur liability for any excess distribution described above if we receive a distribution from our lower-tier PFICs or if any shares in such lower-tier PFICs are disposed of (or deemed disposed of). You should consult your tax advisor regarding the applicability of the PFIC rules to any of our subsidiaries.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the PFIC rules described above regarding excess distributions and recognized gains. The mark-to-market election is available only for "marketable stock" and may not include warrants. If you make a valid mark-to-market election for our Class A ordinary shares, you will include in income for each year that we are a PFIC an amount equal to the excess, if any, of the fair market value of our Class A ordinary shares as of the close of your taxable year over your adjusted basis in such Class A ordinary shares. You will be allowed a deduction for the excess, if any, of the adjusted basis of our Class A ordinary shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on our Class A ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A ordinary shares will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on our Class A ordinary shares, as well as to any loss realized on the actual sale or other disposition of our Class A ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A ordinary shares. Your basis in our Class A ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a mark-to-market election, any distributions that we make would generally be subject to the tax rules discussed above under "— Taxation of Dividends and Other Distributions on Class A Ordinary Shares," except that the lower rate applicable to qualified dividend income (discussed above) would not apply.

The mark-to-market election is available only for "marketable stock," which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market, as defined in the applicable U.S. Treasury regulations, and may not include warrants. Nasdaq is a qualified exchange. Our Class A ordinary shares are listed on Nasdaq and, consequently, if you are a U.S. Holder of Class A ordinary shares and our Class A ordinary shares are regularly traded, the mark-to-market election might be available to you if we become a PFIC. Because a mark-to-market election may not be made for equity interests in any lower-tier PFICs we own, a U.S. Holder may continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. You should consult your tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.

Alternatively, if a non-U.S. corporation is a PFIC, a holder of shares in that corporation may avoid taxation under the PFIC rules described above regarding excess distributions and recognized gains by making a "qualified electing fund" election (a "QEF Election"), to include in income its share of the corporation's income on a current basis. However, you may make a QEF Election with respect to our Class A ordinary shares only if we agree to furnish you annually with certain tax information. We do not intend to provide information necessary for U.S. Holders to make QEF Elections which, if available, would result in tax treatment different from the general tax treatment for PFICs described above. A QEF Election may not be available for warrants regardless of whether we provide such information.

A U.S. Holder of a PFIC is generally required to file an annual report with the IRS. If we are or become a PFIC, you should consult your tax advisor regarding any reporting requirements that may apply to you.

You should consult your tax advisor regarding the application of the PFIC rules to your investment in our Class A ordinary shares or warrants.

**Information Reporting and Backup Withholding** 

Any dividend payments (including constructive dividends) with respect to Class A ordinary shares or warrants and proceeds from the sale, exchange, redemption or other disposition of Class A ordinary shares or warrants may be subject to information reporting to the IRS and possible U.S. backup withholding (currently at a rate of 24%). Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.

**Additional Reporting Requirements**

Certain U.S. Holders who are individuals (and certain entities) are required to report to the IRS information relating to an interest in our Class A ordinary shares or warrants, subject to certain exceptions (including an exception for Class A ordinary shares held in accounts maintained by certain financial institutions). U.S. Holders should consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of our Class A ordinary shares or warrants issued.

**F. Dividends and Paying Agents**

Not applicable.

**G. Statement by Experts**

Not applicable.

**H. Documents on Display**

We are subject to certain of the informational filing requirements of the Exchange Act. Since the Parent is a "foreign private issuer," we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. We also furnish to the SEC, on Form 6-K, unaudited financial information on a half-year basis. The SEC also maintains a website at *http://www.sec.gov* that contains reports and other information that we file with or furnish electronically with the SEC.

**I. Subsidiary Information**

Not applicable.

**J. Annual Report to Security Holders**

Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS**

 ****

***Foreign Currency Risk***

The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the Peoples Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Our cash and cash equivalents denominated in RMB amounted to RMB7.5 million, and RMB4.3 million (US$0.6 million) as of December 31, 2024 and 2025, respectively.

 ****

***Inflation Risk***

Since our inception, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2023, 2024 and 2025 were increases of 0.2%, 0.2% and 0.2%, respectively. Although we have not in the past been materially affected by inflation since our inception, we may be affected in the future by higher rates of inflation in China.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A. Debt Securities**

Not applicable.

**B. Warrants and Rights**

Not applicable.

**C. Other Securities**

Not applicable.

**D. American Depositary Shares**

Not applicable.

**part II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**Material Modifications to the Rights of Security Holders**

See "Item 10 — Additional Information — B. Memorandum and Articles of Association — Ordinary Shares" for a description of the rights of securities holders, which remain unchanged.

**Use of Proceeds**

 ****

***Follow-on and Warrants Registration Statement***

The following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number 333-252271) (the "Follow-on and Warrants F-1 Registration Statement") filed by the Parent, including the prospectus contained therein (on a retroactive basis to reflect the 12-to-1 share consolidation effected on November 29, 2023) in relation to the Parent's 20,577 Class A ordinary shares and warrants to purchase 20,577 Class A ordinary shares at a combined offering price of US$972.00 for one Class A ordinary share and one warrant to purchase one Class A ordinary share, i.e., the base offering, and the underwriter's exercise of option to purchase from us an additional 740,740 warrants at a price of US$2.40 per warrant to purchase from us an additional 3,087 warrants shares, less underwriting discounts and commissions, i.e., the option offering. The Follow-on and Warrants F-1 Registration Statement registered US$23 million of Class A ordinary shares, par value US$0.024 per share and another US$23 million of Class A ordinary shares, par value US$0.024 per share, issuable upon exercise of the warrants issued thereunder.

Maxim Group LLC was the sole book-running manager for the offering. Maxim Group LLC exercised its option in full to purchase an additional 61,729 warrants at an offering price of US$2.40 per warrant to purchase from us an additional 3,087 warrants shares. The Follow-on and Warrants F-1 Registration Statement became effective on January 28, 2021. The base offering and the option offering for the warrants closed concurrently in February 2021.

The Parent incurred total expenses in connection with the offering of approximately US$2.7 million, which included US$1.4 million in underwriting discounts and commissions for the offering and approximately US$1.3 million in other costs and expenses for the offering. The Parent received net proceeds of approximately US$17.3 million from offering. None of the transaction expenses included payments to directors or officers of our company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds from the offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. We have used up the proceeds from this offering.

 ****

***Resale of PIPE Shares, Warrants, UPOs and Debenture and JAK Warrants Registration Statement***

The following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number 333-257664) (the "Resale of PIPE Shares, Warrants, UPOs and Debenture and JAK Warrants Registration Statement") filed by the Parent, including the prospectus contained therein, relating to (1) the resale from time to time of certain Class A ordinary shares, (2) the issuance by the Parent of certain Class A ordinary shares upon the exercise of Prior Warrants and New Warrants, (3) the issuance by the Parent of (i) the UPOs, (ii) the UPO Warrants, (iii) the UPO Rights, (iv) Class A ordinary shares upon the exercise of the UPO Warrants and (v) Class A ordinary shares upon the conversion of the UPO Rights. On March 11, 2022, the Parent filed a pre-effective amendment to such registration on Form F-3, and registered Class A ordinary shares issuable upon the conversion of the Debenture and exercise of the JAK Warrants, among other things. See "Item 4. Information on the Company — A. History and Development of the Company — Debenture and Warrants Offering." The registration statement became effective on July 22, 2022.

We will not receive any of the proceeds from the resale of the Class A ordinary shares by the selling shareholders. We will receive proceeds from the exercise of the Warrants, UPOs, UPO Warrants and JAK Warrants for cash but not from the sale of the Class A ordinary shares underlying the Warrants, UPOs, UPO Warrants, UPO Rights, Debenture and JAK Warrants.

The selling shareholders will pay any underwriting fees, discounts, selling commissions, stock transfer taxes and certain legal expenses incurred by such selling shareholders in disposing of their Class A ordinary shares, and we will bear all other costs, fees and expenses incurred in effecting the registration of such securities covered thereby, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accountants. We incurred total expenses in connection with the offering of approximately US$0.4 million. The net proceeds to us from the offering were approximately US$2.6 million. None of the transaction expenses included payments to directors or officers of our company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds from the offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. As of December 31, 2025, all of the net proceeds from the offering was used for working capital and general corporate purposes. We intend to use the remainder of the proceeds as disclosed in the Resale of PIPE Shares, Warrants, UPOs and Debenture and JAK Warrants Registration Statement.

 ****

***Universal Primary Offering Registration Statement***

On August 16, 2022, the Parent filed a registration statement on Form F-3 (File No. 333-266899) (the "Universal Primary Offering Registration Statement"), which was declared effective on September 20, 2022, to offer Class A ordinary shares, preferred shares, debt securities, warrants, rights and units of an aggregate offering price of up to US$300,000,000. We have not offered any securities under such registration statement on Form F-3.

**ITEM 15. CONTROLS AND PROCEDURES**

**Disclosure Controls and Procedures**

Our management, with the participation of our chief executive officer and financial reporting director, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this annual report, as required by Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our management has concluded that our disclosure controls and procedures were ineffective as of December 31, 2025 and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, because of the material weakness in our internal control over financial reporting described below. Our disclosure controls and procedures were not effective to satisfy the objectives for which they are intended.

To remedy the identified material weaknesses, we have adopted and will adopt further measures to improve our internal control over financial reporting. See "— Internal Control Over Financial Reporting."

Notwithstanding management's assessment that our internal control over financial reporting was ineffective as of December 31, 2025 due to the material weakness described below, we believe that the consolidated financial statements included in this annual report correctly present our financial position, results of operations and cash flows for the fiscal years covered thereby in all material respects.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such item is defined in Rules 13a-15(f) under the Exchange Act, for our company.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of a company's assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that a company's receipts and expenditures are being made only in accordance with authorizations of a company's management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of a company's assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-Oxley Act and related rules as promulgated by the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 using criteria established in "Internal Control — Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025 due to the material weaknesses identified in our internal control over financial reporting as described below under "Internal Control over Financial Reporting."

**Attestation Report of the Registered Public Accounting Firm**

This annual report does not include an attestation report on internal control over financial reporting from our registered public accounting firm, because we, as a "non-accelerated filer" as defined under Rule 12b-2 of the Exchange Act, are not required to have an attestation report on internal control over financial reporting from our external auditors**.**

**Internal Control Over Financial Reporting**

In connection with the preparation and external audits of our consolidated financial statements included in this annual report, we identified the following material weaknesses in our internal control over financial reporting. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting.

The material weaknesses that have been identified relate to:

● A lack of proper management approval and review on borrowing contract over certain amount, and

● Insufficient accounting personnel with appropriate experience and knowledge to address complex accounting matters in accordance with U.S. GAAP.

● A lack of proper management approval and review on agency fee contract over certain amount.

Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control under the Sarbanes-Oxley Act of 2002 for purposes of identifying and reporting any weakness in our internal control over financial reporting. Once the Parent ceases to be a "non-accelerated filer" as defined under Rule 12b-2 of the Exchange Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified. The material weaknesses, if not timely remedied, may lead to significant misstatements in our consolidated financial statements in the future.

To remedy the identified material weaknesses, we have adopted and will adopt further measures to improve our internal control over financial reporting, as follows.

● We plan to improve our management approval on all borrowing contracts over certain amount, and to enhance management review control over borrowing related accounting treatment by conducting monthly accounting record inspection;

● We plan to recruit staff with knowledge of U.S. GAAP and SEC regulations in our finance and accounting department. We also plan to enhance internal training and development programs for financial reporting personnel; and

● When entering into complex transactions, we plan to utilize third-party consultant for accounting services as additional resources.

● Enhance the agency fee management review and approval process over certain amount.

● Carry out integrity and compliance education and training within the company.

We intend to remediate these material weaknesses in multiple phases and expect that we will incur certain costs for implementing our remediation measures. The implementation of the measure, however, may not fully address the material weaknesses identified in our internal control over financial reporting, and we cannot conclude that the material weaknesses have been fully remedied as of December 31, 2025. In addition, we cannot assure you that we will be able to continue implementing these measures in the future. See "Item 3. Key Information — D. Risk Factors — Risk Factors Relating to our Business and Industry — If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our Class A may be materially and adversely affected."

**Changes in Internal Control over Financial Reporting**

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this annual report on Form 20-F that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [RESERVED]** 

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

The Parent's board of directors has determined that Gray Zhu, a member of its audit committee and independent director (under the standards set forth in Rule 5605(c)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the Securities Exchange Act of 1934), is an audit committee financial expert.

**ITEM 16B. CODE OF ETHICS**

The Parent's board of directors has adopted a code of business conduct and ethics that applies to our directors, officers and employees. We have posted a copy of the code of business conduct and ethics on our website at *https://ucommune.investorroom.com*.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

**Auditor Fees**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by our principal external auditors, Marcum Asia CPAs LLP, the independent registered public accounting firm of Ucommune Group Holdings before the Business Combination and our independent registered public accounting firm after the Business Combination. We did not pay any other fees to Marcum Asia CPAs LLP during the periods indicated below.

---

| | | |
|:---|:---|:---|
|  | **For the year ended<br> December 31,** | **For the year ended<br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| **Services** |  |  |
| Audit Fees | 3568 | 2433 |
| Audit - Related Fees |  |  |
| Tax Fees |  |  |
| All Other Fees |  |  |
| **Total** | **3568** | **2433** |

---

Note:

&nbsp;&nbsp;&nbsp;&nbsp;(1) "Audit fees"
 means the aggregate fees billed for each of the fiscal years listed for professional services rendered by our independent registered
 public accounting firm for the audit of our annual financial statements and the review of our comparative interim financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;(2) "Audit-related fees"
 means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our independent registered
 public accounting firm for the assurance and related services, which mainly included the audit and review of financial statements
 and are not reported under "Audit fees" above.

&nbsp;&nbsp;&nbsp;&nbsp;(3) "Tax fees"
 means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our independent registered
 public accounting firm for tax compliance, tax advice and tax planning.

&nbsp;&nbsp;&nbsp;&nbsp;(4) "All other fees"
 means the aggregate fees billed in each of the fiscal years listed for products or services provided by our independent registered
 public accounting firm other than those reported above.

The policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent registered public accounting firm, including audit services, audit-related services and tax services as described above, other than those for *de minimis* services which are approved by the audit committee prior to the completion of the audit.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

None.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

Not applicable.

**ITEM 16G. CORPORATE GOVERNANCE**

The Parent is an exempted company with limited liability incorporated in the Cayman Islands and its corporate governance practices are governed by applicable Cayman Islands law. In addition, because the Parent's Class A ordinary shares are listed on the Nasdaq Capital Market, the Parent is subject to corporate governance requirements of the Nasdaq. Nasdaq Marketplace Rule 5615(a)(3) allows foreign private issuers like the Parent to follow "home country practice" with respect to certain corporate governance matters.

The Parent has relied on home country practice with respect to its corporate governance. As of the date of this annual report, the Parent does not have a majority of independent directors serving on its Board of Directors, its audit committee composed entirely of only two independent directors and the Parent has not established a nominating committee and a compensation committee composed entirely of independent directors. For details, please refer to "Management — Committees of our Board of Directors."

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16J. INSIDER TRADING POLICIES**

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of our insider trading policies is filed as Exhibit 11.2 to this annual report on Form 20-F.

**ITEM 16K. CYBERSECURITY** 

**Cybersecurity Risk Management and Strategy**

To maintain a consistently high level of service experience for our clients, preserve the confidentiality, integrity, and availability of our information systems, safeguard our assets, data, intellectual property, and network infrastructure, while meeting regulatory requirements, it is crucial to effectively manage cybersecurity risks. To achieve this, we have implemented a comprehensive cybersecurity risk management framework, which is integrated in our overall enterprise risk management system and processes and is internally managed.

Our dedicated cybersecurity staff is tasked with assessing, identifying and managing risks related to cybersecurity threats and, under the leadership of our head of cybersecurity, is responsible for:

● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

● development of risk-based action plans to manage identified vulnerabilities and implementation of new protocols and infrastructure improvements;

● cybersecurity incident investigations;

● monitoring threats to sensitive data and unauthorized access to our systems;

● secure access control measures applied to critical IT systems, equipment and devices, designed to prevent unauthorized users, processes, and devices from assessing IT systems and data;

● developing and executing protocols to ensure that information regarding cybersecurity incidents is promptly shared with the board of directors, as appropriate, to allow for risk and materiality assessments and to consider disclosure and notice requirements; and

● developing and implementing training on cybersecurity, information security and threat awareness.

There were no cybersecurity incidents during the year ended December 31, 2025, that resulted in an interruption to our operations, known losses of any critical data or otherwise had a material impact on our strategy, financial condition or results of operations. However, the scope and impact of any future incident cannot be predicted. See "Item 3. Key Information — D. Risk Factors" for more information on how material cybersecurity attacks may impact our business.

**Governance**

Our board of directors acknowledges the significance of robust cybersecurity management programs and actively participates in overseeing and reviewing our cybersecurity risk profile and exposures.

Our board of directors receives reports on cybersecurity risks, including recent legislative developments and evolving standards on cybersecurity, key issues, priorities and challenges in our cybersecurity management, and relevant data or metrics. Our board of directors also receives prompt and timely information regarding any significant cybersecurity incidents, as well as ongoing updates regarding any such incidents. Furthermore, in the event of any significant updates or adjustments to our cybersecurity related policies, our head of cybersecurity will present them to the board of directors for their review and approval.

Our chief risk officer leads the overall assessment, identification and management of risks related to cybersecurity threats. He works collaboratively within our management and receives regular briefings on cybersecurity matters, such as report on cybersecurity incidents and responses and remedial measures.

Our chief risk officer and dedicated staff are responsible for the daily management of our cybersecurity efforts. This includes updates and refinement of cybersecurity policies, execution and management of cybersecurity measures, and the preparation of regular reports on cybersecurity execution. Their primary focus is to consistently update our cybersecurity programs and mitigation strategies, ensuring they align with industry best practices and procedures.

**part III**

**ITEM 17. FINANCIAL STATEMENTS**

See "Item 18. Financial Statements."

**ITEM 18. FINANCIAL STATEMENTS**

The consolidated financial statements of Ucommune International Ltd. are included at the end of this annual report.

**ITEM 19. EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 1.1 | [Fourth Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated by reference to Exhibit 3.1 of the current report on Form 6-K (File No. 001-39738) filed with the SEC on February 9, 2026)](https://www.sec.gov/Archives/edgar/data/1821424/000121390026013451/ea027611701ex3-1_ucommune.htm) |
| 1.2 | [Certificate of Designations of Series A Convertible Preferred Shares of Ucommune International Ltd (incorporated by reference to Exhibit 4.1 of the current report on Form 6-K (File No. 001-39738), filed with the SEC on December 29, 2025)](https://www.sec.gov/Archives/edgar/data/1821424/000121390025125576/ea027099101ex4-1_ucommune.htm) |
| 2.1 | [Registrant's Specimen Ordinary Share Certificate, as currently effective (incorporated by reference to Exhibit 4.2 of the registration statement on Form S-8 (File No. 001-39738), as amended, filed with the SEC on December 15, 2023)](https://www.sec.gov/Archives/edgar/data/1821424/000121390023096071/ea189678ex4-2_ucommune.htm) |
| 2.2 | [Registrant's Specimen Warrant Certificate (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.2 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1770251/000121390019011513/fs12019ex4-4_orisunacq.htm) |
| 2.3 | [Warrant Agreement for Warrants issued in connection with the Business Combination (incorporated by reference to Exhibit 4.3 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1770251/000121390019014826/f8k080219ex4-1_orisunacq.htm) |
| 2.4 | [Form of Warrant Agent Agreement between the Registrant and American Stock Transfer & Trust Company, LLC. (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.4 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](https://www.sec.gov/Archives/edgar/data/1821424/000121390021004210/ea133859ex4-4_ucommune.htm) |
| 2.5 | [Form of Warrant issued by the Registrant in February 2021 (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.5 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](https://www.sec.gov/Archives/edgar/data/1821424/000121390021004775/ff12021a2ex4-5_ucommune.htm) |
| 2.6 | [Form of US$3,000,000 principal sum of 8% Senior Convertible Debenture (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 28, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022004229/ea154471ex4-1_ucommuneinter.htm) |
| 2.7 | [Form of Series A/B/C Warrants (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 28, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022004229/ea154471ex4-2_ucommuneinter.htm) |
| 2.8 | [Amendment to US$3,000,000 principal sum of 8% Senior Convertible Debenture dated as of March 1, 2022 entered into between Ucommune International Ltd and the Holder named therein (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on March 2, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022010253/ea156398ex4-1_ucommuneinter.htm) |
| 2.9 | [Amendment to Series A/B/C Warrants (prior to the 2022 Share Consolidation) (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on March 2, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022010253/ea156398ex4-2_ucommuneinter.htm) |
| 2.10 | [Amendment to US$3,000,000 principal sum of 8% Senior Convertible Debenture entered into between Ucommune International Ltd and the Holder named therein (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on August 29, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022051631/ea165079ex4-1_ucommune.htm) |

---

---

| | |
|:---|:---|
| 2.11 | [Amendment to Series A/B/C Warrants (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on August 29, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022051631/ea165079ex4-2_ucommune.htm) |
| 2.12 | [Amendment to US$3,000,000 principal sum of 8% Senior Convertible Debenture entered into between Ucommune International Ltd and the Holder named therein (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on October 25, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022066155/ea167532ex4-1_ucommune.htm) |
| 2.13 | [Amendment to Series A/B/C Warrants (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on October 25, 2022)](https://www.sec.gov/Archives/edgar/data/1821424/000121390022066155/ea167532ex4-2_ucommune.htm) |
| 2.14 | [Amendment to US$3,000,000 principal sum of 8% Senior Convertible Debenture entered into between Ucommune International Ltd and the Holder named therein (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 25, 2023)](https://www.sec.gov/Archives/edgar/data/1821424/000121390023004987/ea172045ex4-1_ucommune.htm) |
| 2.15 | [Amendment to Series A/B/C Warrants (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 25, 2023)](https://www.sec.gov/Archives/edgar/data/1821424/000121390023004987/ea172045ex4-2_ucommune.htm) |
| 2.16 | [Amendment to US$3,000,000 principal sum of 8% Senior Convertible Debenture entered into between Ucommune International Ltd and the Holder named therein (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on June 8, 2023)](https://www.sec.gov/Archives/edgar/data/1821424/000121390023047289/ea179992ex4-1_ucommune.htm) |
| 2.17 | [Amendment to Series A/B/C Warrants (incorporated by reference to Exhibit 4.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on June 8, 2023)](https://www.sec.gov/Archives/edgar/data/1821424/000121390023047289/ea179992ex4-2_ucommune.htm) |
| 2.18 | [Amendment to Series A/B/C Warrants (incorporated by reference to Exhibit 4.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 30, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024008104/ea192470ex4-1_ucommune.htm) |
| 2.19\* | [Description of Securities](ea028275601ex2-19.htm) |
| 4.1 | [Merger Agreement dated June 29, 2020 (incorporated by reference to Exhibit 10.1 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](https://www.sec.gov/Archives/edgar/data/1770251/000121390020016667/ea123686ex2-1_orisun.htm) |
| 4.2 | [Ucommune Group Holdings Limited 2019 Share Incentive Plan (incorporated by reference to Exhibit 10.2 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](https://www.sec.gov/Archives/edgar/data/1821424/000121390021003262/ff12021ex10-2_ucommune.htm) |
| 4.3 | [Ucommune International Ltd 2020 Share Incentive Plan (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's registration statement on Form S-8 (File No. 333-289594), filed with the SEC on August 14, 2025)](https://www.sec.gov/Archives/edgar/data/1821424/000121390025075994/ea025301801ex10-1_ucommune.htm) |
| 4.4 | [Form of Indemnification Agreement with the Registrant's directors (incorporated by reference to Exhibit 10.4 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390021004210/ea133859ex10-4_ucommune.htm) |
| 4.5 | [Form of Employment Agreement between the Registrant and its executive officers (incorporated by reference to Exhibit 10.5 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-7_ucommuneint.htm) |
| 4.6 | [English translation of Exclusive Business Cooperation Agreement dated May 20, 2019 between Ucommune (Beijing) Technology Co., Ltd and Beijing Ubazaar Technology Co., Ltd. (incorporated by reference to Exhibit 10.19 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-21_ucommuneint.htm) |
| 4.7 | [English translation of Equity Pledge Agreement dated May 20, 2019 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Nan Shi (incorporated by reference to Exhibit 10.20 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-22_ucommuneint.htm) |

---

4.8 [English translation of Exclusive Option Agreement dated May 20, 2019 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Nan Shi (incorporated by reference to Exhibit 10.21 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-23_ucommuneint.htm)

4.9 [English translation of Shareholders' Voting Right Proxy Agreement dated May 20, 2019 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Nan Shi (incorporated by reference to Exhibit 10.22 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-24_ucommuneint.htm)

4.10 [English translation of Exclusive Technology Consulting and Service Agreement dated January 30, 2019 between Beijing Melo Technology Co., Ltd. and Beijing Weixue Tianxia Education Technology Co., Ltd. (incorporated by reference to Exhibit 10.23 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-25_ucommuneint.htm)

4.11 [English translation of Equity Pledge Agreement dated January 30, 2019 among Beijing Melo Technology Co., Ltd., Beijing Weixue Tianxia Education Technology Co., Ltd. and the shareholders of Beijing Weixue Tianxia Education Technology Co., Ltd. (incorporated by reference to Exhibit 10.24 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-26_ucommuneint.htm)

4.12 [English translation of Exclusive Option Agreement dated January 30, 2019 among Beijing Melo Technology Co., Ltd., Beijing Weixue Tianxia Education Technology Co., Ltd. and the shareholders of Beijing Weixue Tianxia Education Technology Co., Ltd. (incorporated by reference to Exhibit 10.25 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-27_ucommuneint.htm)

4.13 [English translation of Shareholders' Voting Right Proxy Agreement dated January 30, 2019 among Beijing Melo Technology Co., Ltd., Beijing Weixue Tianxia Education Technology Co., Ltd. and the shareholders of Beijing Weixue Tianxia Education Technology Co., Ltd. (incorporated by reference to Exhibit 10.26 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020022968/ff42020ex10-28_ucommuneint.htm)

4.14 [Form of Backstop Agreement (incorporated by reference to Exhibit 10.27 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1770251/000121390020023361/ea125925ex2-1_orisunacq.htm)

4.15 [Form of lock-up agreement entered into with former shareholders of UCommune Group Holdings Limited (incorporated by reference to Exhibit 10.28 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390020038818/f20fr12b2020ex4-25_ucommune.htm)

4.16 [Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 28, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022004229/ea154471ex10-1_ucommuneinter.htm)

4.17 [Amendment to Securities Purchase Agreement dated as of March 1, 2022 entered into between Ucommune International Ltd and the Purchaser named therein (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on March 2, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022010253/ea156398ex10-1_ucommuneinter.htm)

4.18 [Amendment to Securities Purchase Agreement dated as of August 29, 2022 entered into between Ucommune International Ltd and the Purchaser named therein (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on August 29, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022051631/ea165079ex10-1_ucommune.htm)

4.19 [Amendment to Securities Purchase Agreement dated as of October 25, 2022 entered into between Ucommune International Ltd and the Purchaser named therein (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on October 25, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022066155/ea167532ex10-1_ucommune.htm)

4.20 [Amendment to Securities Purchase Agreement dated as of January 24, 2023 entered into between Ucommune International Ltd and the Purchaser named therein (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 25, 2023)](http://www.sec.gov/Archives/edgar/data/1821424/000121390023004987/ea172045ex10-1_ucommune.htm)

4.21 [Amendment to Securities Purchase Agreement dated as of June 7, 2023 entered into between Ucommune International Ltd and the Purchaser named therein (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on June 8, 2023)](http://www.sec.gov/Archives/edgar/data/1821424/000121390023047289/ea179992ex10-1_ucommune.htm)

4.22 [Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 28, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022004229/ea154471ex10-2_ucommuneinter.htm)

4.23 [Form of Lock-up Agreement (incorporated by reference to Exhibit 10.3 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on January 28, 2022)](http://www.sec.gov/Archives/edgar/data/1821424/000121390022004229/ea154471ex10-3_ucommuneinter.htm)

4.24 [English translation of Agreement to Terminate Series of Contractual Arrangements dated June 26, 2023 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Nan Shi (incorporated by reference to Exhibit 4.37 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex4-37_ucomm.htm)

---

| | |
|:---|:---|
| 4.25 | [English translation of Equity Pledge Agreement dated June 26, 2023 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Geng Cao (incorporated by reference to Exhibit 4.38 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex4-38_ucomm.htm) |
| 4.26 | [English translation of Exclusive Option Agreement dated June 26, 2023 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Geng Cao (incorporated by reference to Exhibit 4.39 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex4-39_ucomm.htm) |
| 4.27 | [English translation of Shareholders' Voting Right Proxy Agreement dated June 26, 2023 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Geng Cao (incorporated by reference to Exhibit 4.40 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex4-40_ucomm.htm) |
| 4.28 | [English translation of Agreement to Terminate Series of Contractual Arrangements dated December 30, 2023 among Beijing Melo Technology Co., Ltd., Beijing Weixue Tianxia Education Technology Co., Ltd. and the shareholders of Beijing Weixue Tianxia Education Technology Co., Ltd. (incorporated by reference to Exhibit 4.41 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex4-41_ucomm.htm) |
| 4.29 | [English translation of Equity Pledge Agreement dated May 17, 2024 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd., Kaili Kong and Xinyu Ji (incorporated by reference to Exhibit 4.29 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025036276/ea023877201ex4-29_ucommune.htm) |
| 4.30 | [English translation of Exclusive Option Agreement dated May 17, 2024 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd., Kaili Kong and Xinyu Ji (incorporated by reference to Exhibit 4.30 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025036276/ea023877201ex4-30_ucommune.htm) |
| 4.31 | [English translation of Shareholder Rights Proxy Agreement dated May 17, 2024 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd., Kaili Kong and Xinyu Ji (incorporated by reference to Exhibit 4.31 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025036276/ea023877201ex4-31_ucommune.htm) |
| 4.32 | [English translation of Agreement to Terminate Series of Original Agreements dated May 17, 2024 among Ucommune (Beijing) Technology Co., Ltd., Beijing Ubazaar Technology Co., Ltd. and Geng Cao (incorporated by reference to Exhibit 4.32 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025036276/ea023877201ex4-32_ucommune.htm) |
| 4.33 | [Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on December 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025125576/ea027099101ex10-1_ucommune.htm) |
| 4.34 | [Form of Amendment, Waiver and Exchange Agreement (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on February 12, 2026)](http://www.sec.gov/Archives/edgar/data/1821424/000121390026015169/ea027654501ex10-1_ucommune.htm) |
| 4.35 | [Equity Transfer Agreement, dated July 21, 2025, by and between Xinjiang Xinyouzhong Marketing Co., Ltd. and Singularity Digital Marketing (Guangzhou) Co., Ltd. (incorporated by reference to Exhibit 10.1 of Ucommune International Ltd's current report on Form 6-K (File No. 001-39738), filed with the SEC on September 12, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025087206/ea025695901ex10-1_ucommune.htm) |
| 8.1\* | [List of Principal Subsidiaries and VIEs](ea028275601ex8-1.htm) |
| 11.1 | [Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 of the registration statement on Form F-1 (File No. 333-252271), as amended, filed with the SEC on January 28, 2021)](http://www.sec.gov/Archives/edgar/data/1821424/000121390021004210/ea133859ex99-1_ucommune.htm) |
| 11.2 | [Insider Trading Policy (incorporated by reference to Exhibit 11.2 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 29, 2025)](http://www.sec.gov/Archives/edgar/data/1821424/000121390025036276/ea023877201ex11-2_ucommune.htm) |
| 12.1\* | [CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028275601ex12-1.htm) |
| 12.2\* | [CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028275601ex12-2.htm) |
| 13.1\*\* | [CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028275601ex13-1.htm) |
| 13.2\*\* | [CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028275601ex13-2.htm) |
| 15.1\* | [Consent of Marcum Asia CPAs LLP](ea028275601ex15-1.htm) |
| 15.2\* | [Consent of Jingtian & Gongcheng](ea028275601ex15-2.htm) |
| 15.3\* | [Consent of Maples and Calder (Hong Kong) LLP](ea028275601ex15-3.htm) |
| 97.1 | [Policy Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 of Ucommune International Ltd's annual report on Form 20-F (File No. 001-39738), filed with the SEC on April 24, 2024)](http://www.sec.gov/Archives/edgar/data/1821424/000121390024035928/ea020401501ex97-1_ucomm.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Filed herewith.

\*\* Furnished herewith.

&nbsp;&nbsp;&nbsp;&nbsp;† Certain confidential portions
 of this exhibit were omitted by means of marking such portions with brackets and asterisks because the identified confidential portions
 (i) are not material and (ii) would be competitively harmful if publicly disclosed, or constituted personally identifiable information
 that is not material.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf.

---

| | | |
|:---|:---|:---|
|  | **UCOMMUNE INTERNATIONAL LTD** | **UCOMMUNE INTERNATIONAL LTD** |
| Date: March 24, 2026 | By: | /s/ Zirui Wang |
|  | Name: | Zirui Wang |
|  | Title: | Chief Executive Officer and Chief Risk Officer |

---

**UCOMMUNE INTERNATIONAL LTD.**

**Index to the consolidated financial statements**

---

| | |
|:---|:---|
| **Contents** | **Pages** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 5395)](#a_036) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2024 and 2025](#a_037) | F-3 – F-5 |
| [Consolidated Statements of Operations for the years ended December 31, 2023, 2024 and 2025](#a_038) | F-6 |
| [Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023, 2024 and 2025](#a_039) | F-7 |
| [Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2023, 2024 and 2025](#a_040) | F-8 |
| [Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025](#a_041) | F-9 – F-10 |
| [Notes to Consolidated Financial Statements](#a_042) | F-11 |

---

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Directors of Ucommune International Ltd.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Ucommune International Ltd. (the "Company") as of December 31, 2024 and 2025, the related consolidated statements of operations, comprehensive loss, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph – Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1.b, the Company has recurring operating cash out flow and significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1.b. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

Marcum Asia CPAs LLP

We have served as the Company's auditor since 2020

Beijing, China

March 24, 2026

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED BALANCE SHEETS**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD** |
|  | | | **(Note 2h)** |
| **ASSETS** |  |  |  |
| Current assets: |  |  |  |
| Cash and cash equivalents | 25121 | 36062 | 5157 |
| Accounts receivable, net of provision for credit losses of RMB4,413 and RMB6,271 as of December 31, 2024 and 2025, respectively | 11328 | 9807 | 1402 |
| Prepaid expenses and other current assets, net | 28652 | 16730 | 2392 |
| Amounts due from related parties, current | 1465 |  |  |
| Current assets of discontinued operations | 87444 |  |  |
| **Total current assets** | **154010** | **62599** | **8951** |
| Non-current assets |  |  |  |
| Long-term investments, net | 18881 | 18881 | 2700 |
| Property and equipment, net | 59444 | 48069 | 6874 |
| Operating leases right-of-use assets, net | 89832 | 72733 | 10401 |
| Rental deposits | 3151 | 239 | 34 |
| Non-current assets of discontinued operations | 460 |  |  |
| **Total non-current assets** | **171768** | **139922** | **20009** |
| **TOTAL ASSETS** | **325778** | **202521** | **28960** |

---

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED BALANCE SHEETS — (Continued)**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD** |
|  | | | **(Note 2h)** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| Current liabilities: |  |  |  |
| Accounts payable (including accounts payable of the consolidated VIEs without recourse to the Company of RMB7,089 and RMB4,961 as of December 31, 2024 and 2025, respectively) | 10844 | 10355 | 1481 |
| Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Company of RMB13,839 and RMB8,853 as of December 31, 2024 and 2025, respectively) | 20361 | 18089 | 2586 |
| Amounts due to related parties, current (including amounts due to related parties, current of the consolidated VIEs without recourse to the Company of RMB71,969 and RMB1,779 as of December 31, 2024 and 2025, respectively) | 78851 | 9041 | 1293 |
| Deferred workspace membership fee (including advance workspace membership fee of the consolidated VIEs without recourse to the Company of RMB4,715 and RMB2,164 as of December 31, 2024 and 2025, respectively) | 4715 | 2164 | 309 |
| Contract liabilities (including contract liabilities of the consolidated VIEs without recourse to the Company of RMB108 and RMB45 as of December 31, 2024 and 2025, respectively) | 293 | 674 | 96 |
| Operating lease liabilities, current (including lease liabilities, current of the consolidated VIEs without recourse to the Company of RMB7,984 and RMB1,204 as of December 31, 2024 and 2025, respectively) | 7984 | 1204 | 172 |
| Forward sale contract liability (including forward sale contract liability of the consolidated VIEs without recourse to the Company of nil and nil as of December 31, 2024 and 2025, respectively) |  | 16813 | 2404 |
| Current liabilities of discontinued operations (including current liabilities of discontinued operations of the consolidated VIEs without recourse to the Company of nil and nil as of December 31, 2024 and 2025, respectively) | 24353 |  |  |
| **Total current liabilities** | **147401** | **58340** | **8341** |

---

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED BALANCE SHEETS — (Continued)**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD** |
|  | | | **(Note 2h)** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| Non-current liabilities: |  |  |  |
| Refundable deposits from members, non-current (including refundable deposits from members, non-current of the consolidated VIEs without recourse to the Company of RMB5,098 and RMB2,467 as of December 31, 2024 and 2025, respectively) | 5098 | 2467 | 353 |
| Operating lease liabilities, non-current (including lease liabilities, non-current of the consolidated VIEs without recourse to the Company of RMB20,977 and RMB13,389 as of December 31, 2024 and 2025, respectively) | 20977 | 13389 | 1915 |
| Warrant liabilities (including warrant liabilities of the consolidated VIEs without recourse to the Company of nil and nil as of December 31, 2024 and 2025, respectively) | 467 | 1 |  |
| **Total non-current liabilities** | **26542** | **15857** | **2268** |
| **TOTAL LIABILITIES** | **173943** | **74197** | **10609** |
| Commitments and contingencies (Note 23) |  |  |  |
| **MEZZANINE EQUITY** |  |  |  |
| Redeemable Convertible Series A Preferred Shares (nil and 20,000 authorized, nil and 2,750 issued and outstanding as of December 31, 2024 and 2025, with par value of nil and US$0.024, respectively; Redemption value of nil and RMB32,242 as of December 31, 2024 and 2025, respectively; Liquidation preference of nil and RMB24,193 as of December 31, 2024 and 2025, respectively) |  | 1262 | 180 |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| Class A ordinary shares (20,000,000 and 19,980,000 authorized, 2,024,460 and 4,436,543 issued and outstanding as of December 31, 2024 and 2025, with par value of US$0.024 and US$0.024, respectively) | 335 | 746 | 107 |
| Class B ordinary shares (5,000,000 and 5,000,000 authorized, 119,387 and 119,387 issued and outstanding as of December 31, 2024 and 2025, with par value of US$0.024 and US$0.024, respectively) | 20 | 20 | 3 |
| Additional paid-in capital | 4676706 | 4744210 | 678413 |
| Statutory reserves | 3860 | 418 | 60 |
| Accumulated deficit | (4601502) | (4639344) | (663417) |
| Accumulated other comprehensive income | 30187 | 22200 | 3175 |
| **Total Ucommune International Ltd. shareholders' equity** | **109606** | **128250** | **18341** |
| Noncontrolling interests | 42229 | (1188) | (170) |
| **TOTAL EQUITY** | **151835** | **127062** | **18171** |
| **TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY** | **325778** | **202521** | **28960** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| **Revenue:** |  |  |  |  |
| Workspace membership revenue (including services provided to a related party of RMB34, RMB26 and nil for the years ended December 31, 2023, 2024 and 2025, respectively) | 124140 | 68558 | 22630 | 3236 |
| Other service revenue (including services provided to related parties of RMB442, RMB111 and RMB177 for the years ended December 31, 2023, 2024 and 2025, respectively) | 27890 | 8655 | 3490 | 499 |
| **Total revenue** | **152030** | **77213** | **26120** | **3735** |
| Cost of revenue: |  |  |  |  |
| Workspace membership (including services provided by related parties of RMB27, nil and nil for the years ended December 31, 2023, 2024 and 2025, respectively) | (141462) | (74065) | (22587) | (3230) |
| Other services | (19426) | (4948) | (4279) | (612) |
| **Total cost of revenue** | **(160888)** | **(79013)** | **(26866)** | **(3842)** |
| Operating expenses: |  |  |  |  |
| Impairment loss on long-lived assets and long-term prepaid expenses | (29109) | (967) | (2948) | (422) |
| Sales and marketing expenses | (8643) | (3540) | (714) | (102) |
| General and administrative expenses | (77119) | (44974) | (36666) | (5243) |
| Change in fair value of warrant liability | 9099 | 4949 | 463 | 66 |
| Change in fair value of put option liability | 373 |  |  |  |
| **Loss from operations** | **(114257)** | **(46332)** | **(40611)** | **(5808)** |
| Non-operating income/(expense): |  |  |  |  |
| Interest income/(expense), net | 907 | (2253) | 185 | 26 |
| Subsidy income | 7754 | 804 | 5 | 1 |
| Impairment loss on long-term investments | (25603) | (17979) |  |  |
| Gain on disposal of long-term investments | 6370 |  |  |  |
| Gain/(Loss) on disposal of subsidiaries | 112792 | (607) | 3217 | 460 |
| Other income, net | 8673 | 2180 | 725 | 104 |
| **Loss before income taxes and loss from equity method investments** | **(3364)** | **(64187)** | **(36479)** | **(5217)** |
| Provision for income taxes | (8281) | (6369) | (93) | (13) |
| Gain/(Loss) from equity method investments | 795 | (483) |  |  |
| **Net loss from continuing operations** | **(10850)** | **(71039)** | **(36572)** | **(5230)** |
| Net loss from discontinued operations, net of tax | (11974) | (9207) | (2681) | (383) |
| **Net loss** | **(22824)** | **(80246)** | **(39253)** | **(5613)** |
| Less: Net loss attributable to noncontrolling interests from continuing operations | (3766) | (4961) | (97) | (14) |
| Less: Net loss attributable to noncontrolling interests from discontinued operations | (13926) | (5755) | (1314) | (188) |
| **Net loss attributable to Ucommune International Ltd. from continuing operations** | **(7084)** | **(66078)** | **(36475)** | **(5216)** |
| **Net income/(loss) attributable to shareholders from discontinued operations** | **1952** | **(3452)** | **(1367)** | **(195)** |
| Net loss per share attributable to ordinary shareholders of Ucommune International Ltd. from continuing operations<sup>(i)</sup> |  |  |  |  |
| –Basic and diluted<sup>(i)</sup> | (13.10) | (56.38) | (13.53) | (1.93) |
| Net income/(loss) per share attributable to ordinary shareholders from discontinued operations<sup>(i)</sup> |  |  |  |  |
| –Basic and diluted<sup>(i)</sup> | 3.61 | (2.95) | (0.51) | (0.07) |
| Weighted average shares used in calculating net loss per share<sup>(i)</sup> |  |  |  |  |
| –Basic and diluted<sup>(i)</sup> | 540836 | 1172103 | 2697970 | 2697970 |

---

(i) Share and per share data have been retroactively restated to reflect the Company's share consolidation on November 29, 2023, to effect a share consolidation of 12 ordinary shares with par value of US$0.002 each in the Company's issued and unissued share capital into one ordinary share with par value of US$0.024 each of the Company.

The accompanying notes are an integral part of these consolidated financial statements.

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Net loss | (22824) | (80246) | (39253) | (5613) |
| Other comprehensive (loss)/income, net of tax: |  |  |  |  |
| Foreign currency translation adjustments | (1548) | 7386 | (8039) | (1150) |
| **Total Comprehensive loss** | (24372) | (72860) | (47292) | (6763) |
| Less: Comprehensive loss attributable to noncontrolling interest | (17697) | (10763) | (1403) | (201) |
| **Comprehensive loss attributable to Ucommune International Ltd.'s shareholders** | **(6675)** | **(62097)** | **(45889)** | **(6562)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares** | **Ordinary Shares** | | | | | | | |
|  | **Shares<sup>(i)</sup>** | **Amount** | **Additional<br> paid-in**<br>**capital** | **Statutory**<br>**reserve** | **Accumulated**<br>**deficit** | **Accumulated<br> other<br> comprehensive**<br>**loss** | **Total<br> Ucommune<br> International<br> Ltd.<br> shareholders'**<br>**equity** | **Noncontrolling**<br>**interests** | **Total**<br>**equity** |
| **Balance as of December 31, 2022** | **385471** | **63** | **4550134** | **6246** | **(4520329)** | **24297** | **60411** | **26125** | **86536** |
| Adoption of ASC 326 |  |  |  |  | (6308) |  | (6308) |  | (6308) |
| Net loss |  |  |  |  | (5132) |  | (5132) | (17692) | (22824) |
| Foreign currency translation adjustment |  |  |  |  |  | (1543) | (1543) | (5) | (1548) |
| Provision for statutory reserve |  |  |  | 203 | (203) |  |  |  |  |
| Shares issued for conversion of convertible debt | 213138 | 36 | 15174 |  |  |  | 15210 |  | 15210 |
| Stock-based compensation | 18332 |  | 8207 |  |  |  | 8207 |  | 8207 |
| Capital contribution from noncontrolling shareholders |  |  |  |  |  |  |  | 500 | 500 |
| Disposal of subsidiaries |  |  |  |  |  |  |  | (1377) | (1377) |
| Round-up of fractional shares in connection with share consolidation | 34224 |  |  |  |  |  |  |  |  |
| **Balance as of December 31, 2023** | **651165** | **99** | **4573515** | **6449** | **(4531972)** | **22754** | **70845** | **7551** | **78396** |
| Net loss |  |  |  |  | (69530) |  | (69530) | (10716) | (80246) |
| Foreign currency translation adjustment |  |  |  |  |  | 7433 | 7433 | (47) | 7386 |
| Capital contribution from shareholder | 80000 | 14 | 1691 |  |  |  | 1705 |  | 1705 |
| Exercise of Warrant | 25000 | 4 | 426 |  |  |  | 430 |  | 430 |
| Stock-based compensation |  |  | 28849 |  |  |  | 28849 |  | 28849 |
| Exercise of share options | 1387682 | 238 | (238) |  |  |  |  |  |  |
| Capital contribution from noncontrolling shareholders |  |  |  |  |  |  |  | 193 | 193 |
| Disposal of subsidiaries |  |  |  |  |  |  |  | (72) | (72) |
| Disposal of Ucommune Venture VIE |  |  | 68801 | (2589) |  |  | 66212 | 45418 | 111630 |
| Loan exempt from related parties |  |  | 3662 |  |  |  | 3662 |  | 3662 |
| Distribution of dividend to noncontrolling interest shareholders |  |  |  |  |  |  |  | (98) | (98) |
| **Balance as of December 31, 2024** | **2143847** | **355** | **4676706** | **3860** | **(4601502)** | **30187** | **109606** | **42229** | **151835** |
| Net loss |  |  |  |  | (37842) |  | (37842) | (1411) | (39253) |
| Foreign currency translation adjustment |  |  |  |  |  | (8047) | (8047) | 8 | (8039) |
| Stock-based compensation |  |  | 15022 |  |  |  | 15022 |  | 15022 |
| Exercise of share options | 2412083 | 411 | (334) |  |  |  | 77 |  | 77 |
| Disposal of subsidiaries |  |  | 1461 | (3442) |  | 60 | (1921) | (39328) | (41249) |
| Loan exempt from related parties |  |  | 54430 |  |  |  | 54430 |  | 54430 |
| Acquisition of a subsidiary |  |  | (3054) |  |  |  | (3054) | (2686) | (5740) |
| Accrued preferred shares dividends |  |  | (25) |  |  |  | (25) |  | (25) |
| Effect of exchange rates on preferred shares |  |  | 4 |  |  |  | 4 |  | 4 |
| **Balance as of December 31, 2025 in RMB** | **4555930** | **766** | **4744210** | **418** | **(4639344)** | **22200** | **128250** | **(1188)** | **127062** |
| **Balance as of December 31, 2025 in USD** | **4555930** | **110** | **678413** | **60** | **(663417)** | **3175** | **18341** | **(170)** | **18171** |

---

(i) Par
value of ordinary shares and share data have been retroactively restated to reflect the Company's share consolidation on November
29, 2023, to effect a share consolidation of 12 ordinary shares with par value of US$0.002 each in the Company's issued and unissued
share capital into one ordinary share with par value of US$0.024 each of the Company.

The accompanying notes are an integral part of these consolidated financial statements.

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Cash flows from operating activities: |  |  |  |  |
| Net loss | (22824) | (80246) | (39253) | (5613) |
| Less: net loss from discontinued operations | (11974) | (9207) | (2681) | (383) |
| Net loss from continuing operations | (10850) | (71039) | (36572) | (5230) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
| Depreciation of property and equipment | 16400 | 9196 | 3220 | 460 |
| Amortization of intangible assets | 1437 | 472 |  |  |
| Loss on disposal of property, equipment and other long-lived assets | 14146 | 2558 |  |  |
| Gain from termination of right-of-use assets | (30427) | (953) | (1) |  |
| Loss on disposal of intangible assets | 95 |  |  |  |
| Loss on disposal of creditor's right of long-term prepaid expense | 46866 |  |  |  |
| Impairment of long-lived assets and long-term prepaid expenses | 29109 | 967 | 2948 | 422 |
| Impairment of long-term investment | 25603 | 17979 |  |  |
| (Gain)/Loss on disposal of subsidiaries | (112792) | 607 | (3217) | (460) |
| Gain on dissolution of subsidiaries | (16932) |  | 539 | 77 |
| Gain on disposal of long-term investments | (6370) |  |  |  |
| Amortization of right-of-use assets | 62401 | 18771 | 7398 | 1058 |
| Change in fair value of warrant liabilities | (9099) | (4949) | (463) | (66) |
| Change in fair value of put option liabilities | (373) |  |  |  |
| Share-based compensation | 25722 | 11333 | 15022 | 2148 |
| Credit loss | 16071 | (3712) | (1668) | (239) |
| (Gain)/Loss from equity method investment | (795) | 483 |  |  |
| Interest (income)/expense | (1395) | 496 | 24 | 3 |
| Other expense/(income), net | 1174 | (29885) |  |  |
| Changes in operating assets and liabilities: |  |  |  |  |
| Accounts receivable | 17245 | 4241 | 1287 | 184 |
| Prepaid expenses and other current assets | (11855) | 28317 | 11638 | 1664 |
| Amount due from related parties | (492) | (72302) | 1698 | 243 |
| Long-term prepaid expenses | 25269 |  |  |  |
| Rental deposit, non-current | 4409 | (887) | (5) | (1) |
| Accounts payable | (15404) | 11695 | (794) | (114) |
| Accrued expenses and other current liabilities | (33400) | (7245) | 1041 | 149 |
| Deferred workspace membership fee | (3216) | (2732) | (847) | (121) |
| Contract liabilities | (6394) | (821) | 368 | 53 |
| Income tax payable | 8278 | 6375 |  |  |
| Deferred subsidy income | (2163) | (644) |  |  |
| Amount due to related parties | (1663) | 69288 | (1274) | (182) |
| Lease liabilities | (37904) | (5982) | (2130) | (305) |
| Refundable deposits from members, non-current | 1117 | (3142) | (1938) | (277) |
| **Net cash used in operating activities from continuing operations** | **(6182)** | **(21515)** | **(3726)** | **(534)** |
| **Net cash provided by/(used in) operating activities from discontinued operations** | **23178** | **25378** | **(10128)** | **(1448)** |
| **Net cash provided by/(used in) operating activities** | **16996** | **3863** | **(13854)** | **(1982)** |

---

**UCOMMUNE INTERNATIONAL LTD.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)**

**(Amounts in thousands, except share and per share data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Cash Flows from investing activities: |  |  |  |  |
| Purchase of short-term investments | (19123) | (34538) | (70226) | (10042) |
| Redemption of short-term investments | 2126 | 51788 | 70226 | 10042 |
| Purchase of property and equipment | (13524) | (4307) | (7246) | (1036) |
| Proceeds from disposal of property and equipment | 85 | 29 |  |  |
| Acquisition of a subsidiary |  |  | 13 | 2 |
| Loan provided to related parties |  | (473) | (2220) | (317) |
| Loan collection from related parties |  | 343 |  |  |
| Loan provided to third parties |  |  | (410) | (59) |
| Proceeds from disposal of long-term investments | 6370 |  |  |  |
| Proceeds from settlement of non-current assets | 35000 | 5000 |  |  |
| Cash received from disposal of Shengguang Zhongshuo |  |  | 16000 | 2288 |
| Cash net decrease due to disposal of subsidiaries | (1793) |  | (276) | (39) |
| Cash net decrease due to termination of the Ucommune Venture VIE Agreement |  | (5646) |  |  |
| **Net cash provided by investing activities from continuing operations** | **9141** | **12196** | **5861** | **839** |
| **Net cash provided by/(used in) investing activities from discontinued operations** | **7566** | **(810)** |  |  |
| **Net cash provided by investing activities** | **16707** | **11386** | **5861** | **839** |
| Cash flows from financing activities: |  |  |  |  |
| Capital contribution from shareholders |  | 1705 |  |  |
| Loan repaid to related parties | (12000) | (2622) | (697) | (100) |
| Loan received from related parties |  | 2528 |  |  |
| Loan received from third parties | 1539 | 9658 | 3 |  |
| Loan repaid to third parties | (6515) | (814) | (45) | (6) |
| Redemption of convertible bond | (5482) |  |  |  |
| Cash received from issuing redeemable convertible preferred shares |  |  | 18089 | 2587 |
| Issuance cost of redeemable convertible preferred shares |  |  | (523) | (75) |
| Cash received from exercise of share option |  |  | 77 | 11 |
| Cash received from exercise of warrant |  | 430 |  |  |
| **Net cash (used in)/provided by financing activities from continuing operations** | **(22458)** | **10885** | **16904** | **2417** |
| **Net cash (used in)/provided by financing activities from discontinued operations** | **(8331)** | **7200** |  |  |
| **Net cash (used in)/provided by financing activities** | **(30789)** | **18085** | **16904** | **2417** |
| Effects of exchange rate changes | (886) | 7165 | (8098) | (1158) |
| **Net increase in cash, cash equivalents and restricted cash** | **2028** | **40499** | **813** | **116** |
| Cash, cash equivalents and restricted cash – beginning of the period | 53245 | 55273 | 90370 | 12923 |
| Cash and cash equivalents | 54288 | 95772 | 91183 | 13039 |
| Restricted cash, current | 985 |  |  |  |
| Cash, cash equivalents and restricted cash – end of the period | 55273 | 95772 | 91183 | 13039 |
| Less: Cash, cash equivalents and restricted cash of discontinued operations | 38883 | 70651 | 55121 | 7882 |
| **Cash, cash equivalents and restricted cash – end of the period from continuing operations** | **16390** | **25121** | **36062** | **5157** |
| Supplemental disclosure of cash flow information from continuing operations: |  |  |  |  |
| Interest paid | 3834 | 1614 |  |  |
| Income taxes paid | 58 |  | 93 | 13 |
| Supplemental disclosure of noncash information from continuing operations: |  |  |  |  |
| Payable for purchase of property and equipment | 2511 |  | 1197 | 171 |
| Payable for financing cost |  |  | 764 | 109 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | 12980 |  | 14578 | 2085 |
| ROU assets disposed as reduction of operating lease liabilities due to lease termination | 140507 | 32375 | 390 | 56 |
| Conversion of convertible bond's principal | 15199 |  |  |  |
| Disposal of properties and prepaid expenses and other current assets in exchange for long-term investments | 48300 |  |  |  |
| Settlement of accrued expenses and other current liabilities with other non-current assets |  | 15685 |  |  |
| Settlement of accrued expenses and other current liabilities by disposal of subsidiaries |  |  | 9657 | 1381 |
| Settlement of other non-current assets with properties |  | 54200 |  |  |
| Accrued payroll payable settled by share-based compensation |  | 17516 |  |  |
| Exemption of loan from related party |  | 11537 | 56650 | 8101 |
| Exemption of loan to related party |  | 7875 | 2220 | 317 |
| Accrued preferred shares dividends |  |  | 25 | 4 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**UCOMMUNE INTERNATIONAL LTD. NOTES TO CONSOLIDATED STATEMENTS FOR THE YEAS ENDED DECEMBER 31, 2023, 2024 and 2025 (Amounts in thousands, except share and per share data, or otherwise noted)**

**1. ORGANIZATIONS AND PRINCIPAL ACTIVITIES**

Ucommune Group Holdings Limited ("Ucommune Group") was founded in 2018 and was incorporated in the Cayman Islands. On June 29, 2020, Orisun Acquisition Corp. ("Orisun"), a special purpose acquisition company ("SPAC"), entered into a share exchange agreement (the "Share Exchange Agreement") with Ucommune Group. Pursuant to the Share Exchange Agreement, Ucommune International Ltd ("the Company"), which is a subsidiary wholly owned by Orisun, acquired all of the issued and outstanding ordinary shares of Ucommune Group from the shareholders of Ucommune Group by newly issuing ordinary shares of Orisun to the shareholders of Ucommune Group ("SPAC Transaction"). The SPAC Transaction was consummated on November 17, 2020. Ucommune Group's shareholders remains the controlling financial interests of Ucommune Group after the SPAC Transaction, which was accounted for as a reverse recapitalization and fully described below. In connection with the closing of the SPAC Transaction, Orisun had been ceased and Ucommune International Ltd continued as the surviving company.

Ucommune International Ltd, its consolidated subsidiaries, variable interest entities ("VIEs") and VIEs' subsidiaries (collectively referred to as the "Group") is primarily engaged in providing long-term leasing, on-demand and short-term leasing solutions to freelancers, start-up entrepreneurs, small medium enterprises and corporations by delivering well-furnished and fully-serviced space on a flexible basis in the People's Republic of China ("PRC"). The individuals and enterprises registered on U bazaar, a mobile app of the Group, are referred to as members.

**Reorganization and termination of VIE agreement**

From May to September 2024, the Company has also carried out a series of restructuring transactions and several subsidiaries were transferred from Ucommune (Beijing) Venture Investment Co., Ltd. ("Ucommune Venture"), a variable interest entity of the Company to Beijing U Bazaar Technology Co., Ltd ("Beijing U Bazaar"), another VIE of the Group, and Youshenghengtong (Beijing) Technology Co., Ltd. ("WFOE"), a wholly foreign-owned enterprise of the Company. Since the transactions parties were under common control by the Company at the transaction date, no disposal gain/losses were recognized.

On September 20, 2024, WFOE issued a notice ("Notice of Termination") to terminate the Ucommune Venture VIE Agreements (as defined below) to Ucommune Venture, and the existing shareholders of Ucommune Venture. As a result, the series of contractual arrangements entered into by and among WFOE, Ucommune Venture and/or its shareholders (the "Ucommune Venture VIE Agreements"), including exclusive business cooperation agreement, equity pledge agreement, exclusive option agreement, shareholders' voting rights proxy agreement and spousal consent letter, was terminated in accordance with the terms therein following 30 calendar days after the delivery date of the Notice of Termination. On October 26, 2024, the Ucommune Venture VIE Agreements were terminated and by which time Ucommune Venture and its subsidiaries were deconsolidated, and their financial results were no longer included in the Group's consolidated financial statements.

After these transactions, the Company's workspace membership business for mid- to large-sized enterprise members and marketing and branding business were continued to be operated by the Company, with the financial results being included in the Company's consolidated financial statements; and certain non-core businesses of the Company was disposed in connection with the Notice of Termination.

No gain or loss were recognized for this transaction for the year ended December 31, 2024. The impact was reflected as increase of additional-paid-in-capital in the statement of change in shareholders' equity of RMB14,172, excluding the portion related to discontinued operation. The net loss, excluding the portion related to discontinued operation, from Ucommune Venture and its subsidiaries attribute to the Company and non-controlling interest was RMB44,973 and RMB5,492, respectively, for the year ended December 31, 2024.

**Disposal of certain business**

The Group disposed of marketing and branding services on July 21, 2025, and therefore completely exited from all marketing and branding services operations. The disposal of marketing and branding services business represented a strategic shift that had a major effect on the Group's operations and financial results, and was accounted for as discontinued operation. (See Note 4.b)

As of December 31, 2025, the Company's major subsidiaries and its VIEs were as follow:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Later of date of<br> establishment or<br> acquisition** | **Place of <br> establishment** | **Percentage of legal<br> ownership of the Company** | **Principal activities** |
| **Major Subsidiaries of the Company:** |  |  | |  |
| Ucommune Group Holdings Limited | September 21, 2018 | Cayman | 100% | Investment <br> holding |
| Ucommune Group Holdings (Hong Kong) Limited ("Ucommune HK") | December 7, 2018 | Hong Kong | 100% | Shared <br> workspace |
| Youshenghengtong (Beijing) Technology Co., Ltd. ("WFOE") | January 3, 2019 | PRC | 100% | Technology and<br> internet service |
| Melo, Inc. | May 15, 2019 | Delaware | 100% | Technology <br> Innovation |
| Melo Hongkong Limited | May 15, 2019 | Hong Kong | 100% | Technology <br> Innovation |
| Beijing Melo Technology Co. Ltd | May 15, 2019 | PRC | 100% | Technology<br> Innovation |
| Beijing Litong Huida Information Technology Co., Ltd | November 17, 2023 | PRC | 100% | Technology and<br> internet service |
| **VIEs:** |  |  |  |  |
| Beijing UBazaar Technology Co., Ltd ("Beijing U Bazaar") | August 29, 2018 | PRC | Nil | Technology and<br> internet service |
| **Major VIEs' subsidiaries:** |  |  |  |  |
| Beijing Ucommune Zhongke Venture Capital Co., Ltd. | September 7, 2015 | PRC | Nil | Shared <br> workspace |
| Huanyi Lingyu (Beijing) Space Technology Co., Ltd. | September 14, 2024 | PRC | Nil | Hotel <br> service |
| Shanghai Yueban Enterprise Consulting Management Co., Ltd. | March 15, 2021 | PRC | Nil | Shared <br> workspace |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a. The VIE arrangements**

The Company operates substantially all of its business through its VIEs including Beijing U Bazaar. On May 20, 2019, WFOE entered into a series of contractual arrangements with Ucommune Venture, Beijing U Bazaar, and the respective equity interest holders. The series of contractual agreements include exclusive business cooperation agreement, exclusive call option agreement, equity pledge agreement, powers of attorney and spousal consent letters.

The Group believes that these contractual arrangements enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. Accordingly, the Company is considered the primary beneficiary of the VIEs and is able to consolidate the VIEs and VIEs' subsidiaries.

Details of the contractual agreements are set forth below.

● Agreements that transfer economic benefits to the Group:

*Exclusive Business Cooperation Agreement*

Pursuant to the exclusive business cooperation agreement between WFOE and the VIEs, WFOE has the exclusive right to provide or designate any third-party to provide, among other things, leasing solution, permission of intellectual property rights, technological support and business support to the VIEs and their subsidiaries. In exchange, the VIEs and their subsidiaries pay service fees to WFOE in an amount determined by WFOE in its sole discretion. Without the prior written consent of WFOE, the VIEs and their subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party. WFOE owns the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by PRC laws or regulations. The agreement will be effective upon signing by both parties until WFOE signs a separate agreement to acquire the whole equity of the VIEs. Unless otherwise required by applicable PRC laws, the VIEs and their shareholders do not have any right to terminate the agreement.

 

● Agreements that provide the Company effective control over VIEs:

 

*Equity Pledge Agreement*

Under the equity interest pledge agreement among WFOE, the VIEs and their shareholders, the VIEs' shareholders pledged all of their equity interests of the VIEs to WFOE as security for performance of the obligations of the VIEs and its shareholders under the exclusive call option agreement, the exclusive business cooperation agreement and the powers of attorney. If any of the specified events of default occurs, WFOE may exercise the right to enforce the pledge immediately. WFOE may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s) at any time. The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement, the exclusive business cooperation agreement and the powers of attorney.

 

*Exclusive Call Option Agreement*

Under the exclusive call option agreement among WFOE, the VIEs and their shareholders, each of the shareholders of the VIEs irrevocably granted WFOE a right to purchase, or designate a third-party to purchase, all or any part of their equity interests in the VIEs at a purchase price equal to the lowest price permissible by the then-applicable PRC laws and regulations at WFOE's sole and absolute discretion to the extent permitted by PRC law. The shareholders of the VIEs shall promptly give all considerations they received from the exercise of the options to WFOE or its designee(s). The VIEs and their shareholders covenant that, without WFOE's prior written consent, they will not, among other things, (i) sell, transfer, create any pledge or otherwise dispose of their equity interests in the VIEs or create any pledge or encumbrance on their equity interests in the VIEs; (ii) vote for shareholders' resolution regarding sell, transfer, create any pledge or otherwise dispose of their equity interests in the VIEs; (iii) change the VIEs' registered capital; (iv) amend the VIEs' articles of association; (v) cause the VIEs to enter into any major contracts or terminate any material contracts to which the VIEs is a party; (vi) declare or distribute dividends; (vii) terminate, liquidate or dissolve the VIEs; or (viii) allow the VIEs to incur, inherit, guarantee or permit any debts, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing. The agreement will remain effective until terminated by WFOE at its discretion or the entire equity interests in the VIEs have been transferred to WFOE or its designee(s).

 

*Powers of Attorney*

Pursuant to the powers of attorney executed by the VIEs' shareholders, each of them irrevocably authorized WFOE or its designee(s) to act on their respective behalf as exclusive agent and attorney, to the extent permitted by law, with respect to all rights of shareholders concerning all the equity interest held by each of them in the VIEs, including but not limited to proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the rights as shareholders (including but not limited to voting rights, nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole).

 

 

*Spousal Consent Letters*

Pursuant to the spousal consent letters executed by the spouses of relevant individual shareholders of the VIEs, the signing spouses unconditionally and irrevocably agreed that the equity interest in the VIEs held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement, the exclusive business cooperation agreement, the equity interest pledge agreement and the powers of attorney described above, and that their spouses may perform, amend or terminate such agreements without their additional consent. Additionally, the signing spouses agreed not to assert any rights over the equity interest in the VIEs held by their spouses. In addition, in the event that the signing spouses obtain any equity interests in the VIEs held by their spouses for any reason, they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above, as may be amended from time to time.

Risks in relation to VIE structure

The Company believes that the contractual arrangements with VIEs and their shareholders are in compliance with existing PRC laws and regulations and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including:

VIEs and their shareholders may have or develop interests that conflict with the Group's interests, which may lead them to pursue opportunities in violation of the aforementioned contractual agreements. If the Group cannot resolve any conflicts of interest or disputes between the Group and the shareholders of VIEs, the Group would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

VIEs and their shareholders could fail to obtain proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on the VIE or the Group, mandate a change in ownership structure or operations for the VIEs or the Group, restrict the VIEs or the Group's use of financing sources or otherwise restrict the VIEs or the Group's ability to conduct business.

The PRC government may declare the aforementioned contractual arrangements invalid. They may modify the relevant regulations, have a different interpretation of such regulations, or otherwise determine that the Group or the VIEs have failed to comply with the legal obligations required to effectuate such contractual arrangements.

— If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government may restrict or prohibit the Group's business and operations in China.

The Group's ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Group may not be able to consolidate VIEs and their subsidiaries in the consolidated financial statements as the Group may lose the ability to exert effective control over VIEs and their shareholders, and the Group may lose the ability to receive economic benefits from VIEs.

The Group's business has been directly operated by the VIEs and their subsidiaries. As of December 31, 2024 and 2025, the VIEs and their subsidiaries accounted for an aggregate of 46.9% and 58.8%, respectively, of the Group's consolidated total assets, and 75.8% and 47.0% respectively of the Group's consolidated total liabilities.

The following financial information of the Company's VIEs and VIEs' subsidiaries after the elimination of inter-company transactions and balances as of December 31, 2024 and 2025 and for the years ended December 31, 2023, 2024 and 2025 was included in the accompanying consolidated financial statements:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD** |
|  | | | **(Note 2h)** |
| Cash and cash equivalents | 6960 | 3989 | 570 |
| Other current assets | 28199 | 16966 | 2426 |
| **Total current assets** | **35159** | **20955** | **2996** |
| Property and equipment, net | 5665 | 6240 | 892 |
| Right-of-use assets, net | 89832 | 72733 | 10401 |
| Other non-current assets | 22032 | 19120 | 2734 |
| **Total non-current assets** | **117529** | **98093** | **14027** |
| **TOTAL ASSETS** | **152688** | **119048** | **17023** |
| Accounts payable | 7089 | 4961 | 709 |
| Lease liabilities, current | 7984 | 1204 | 172 |
| Other current liabilities | 90631 | 12841 | 1836 |
| **Total current liabilities** | **105704** | **19006** | **2717** |
| Lease liabilities, non-current | 20977 | 13389 | 1915 |
| Other non-current liabilities | 5098 | 2467 | 353 |
| **Total non-current liabilities** | **26075** | **15856** | **2268** |
| **Total liabilities** | **131779** | **34862** | **4985** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Net revenues | 152030 | 77092 | 24019 | 3435 |
| Net loss from continuing operations | (27177) | (139681) | (7721) | (1104) |
| Net loss from discontinued operations | (11974) | (7990) |  |  |
| Net cash (used in)/provided by operating activities from continuing operations | (9359) | (47033) | 1212 | 173 |
| Net cash provided by/(used in) operating activities from discontinued operations | 23178 | (3640) |  |  |
| Net cash provided by/(used in) investing activities from continuing operations | 9697 | (5695) | (7932) | (1134) |
| Net cash provide by/(used in) investing activities from discontinued operations | 7566 | (169) |  |  |
| Net cash (used in)/provided by financing activities from continuing operations | (16798) | 8762 | 3749 | 536 |
| Net cash (used in)/provided by financing activities from discontinued operations | (8331) | 7298 |  |  |

---

There are no consolidated VIEs' assets that are collateral for the VIEs' obligations. No creditors (or beneficial interest holders) of the VIEs have recourse to the general credit of the Company or any of its consolidated subsidiaries. No terms in any arrangements, considering both explicit arrangements and implicit variable interests, require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE through loans to the shareholders of the VIEs or entrustment loans to the VIEs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b. Going Concern**

The Group has incurred recurring operating losses since its inception, including net losses from continuing operations of RMB10.9 million, RMB71.0 million and RMB36.6 million for the years ended December 31, 2023, 2024 and 2025, respectively. The Group also generated negative cash flows from operating activities from continuing operations of RMB6.2 million, RMB21.5 million and RMB3.7 million for the years ended December 31, 2023, 2024 and 2025, respectively. Accumulated deficit was RMB4,639.3 million as of December 31, 2025. The Company needs to raise additional funds to meet its obligations and sustain its operations. As of December 31, 2025, the Group had cash and cash equivalents of RMB36.1 million. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Historically, the Group has relied principally on both operational sources of cash and non-operational sources of financing from investors and creditors to fund its operations and business development. The Group's ability to continue as a going concern is dependent on management's ability to successfully execute its business plan which includes continued business transition from asset-heavy model to asset-light model in order to improve the profitability, continued exploration of new business opportunities that have synergies with the Group's core business, controlling operating costs and optimizing operational efficiency to improve the Group's cash flow from operations. The Group also plans to raise additional capital, including among others, obtaining debt and equity financing, to support its future operation.

The Group continues to explore opportunities to grow its business. However, it has not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve stable net profit and positive cash flows from operating activities, and the Group expects the operating losses will continue for the foreseeable future. If it is unable to grow the business to achieve economies of scale in the future, it will become even more difficult for the Group to sustain a sufficient source of cash to cover its operating costs. There can be no assurance, however, that the Group will be able to obtain additional financing on terms acceptable to the Group, in a timely manner, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group's business, financial condition and results of operations and would materially adversely affect its ability to continue as a going concern.

The Group's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.

**2. SIGNIFICANT ACCOUNTING POLICIES**

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***a. Basis of presentation and use of estimates***

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") which include the Company, its subsidiaries, its VIEs and VIEs' subsidiaries.

These accounting principles require management to make certain estimates and assumptions that affect the amounts in the accompanying financial statements. The Group bases its estimates on past experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements include, but are not limited to, impairment of right-of-use ("ROU") assets, other long-lived assets and long-term investments. Actual results may differ materially from those estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***b. Principles of consolidation***

The accompanying consolidated financial statements include the financial information of the Company and its subsidiaries, the VIEs and VIEs' subsidiaries. All intercompany balances and transactions were eliminated upon consolidation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***c. Discontinued operation***

 ****

A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held-for-sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale.

For any component classified as held for sale or disposed of by sale or other than by sale that qualify for presentation as a discontinued operation in the period, the Group has reclassified certain comparative balances in the consolidated balance sheet as of December 31, 2024 and December 31, 2025 and certain comparative amounts in the consolidated statements of operations for the years ended December 31, 2023, 2024 and 2025 to conform to the current year's presentation. The results of discontinued operations for the years ended December 31, 2023, 2024 and 2025 have been reflected separately in the consolidated statement of operations as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the years ended December 31, 2023, 2024 and 2025 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***d. Foreign currency translation and transactions***

The Group's reporting currency is Renminbi ("RMB"). The functional currency of the subsidiaries and VIEs' subsidiaries incorporated outside the mainland China is United States dollar ("USD" or "US$"), Hong Kong dollar ("HK$") or Singapore dollar ("SGD"). The functional currency of all the other subsidiaries and the VIEs and VIEs' subsidiaries is RMB.

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***e. Impairment of ROU assets and other long-lived assets***

The Group reviews its ROU assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Factors the Group considers to be important which could trigger an impairment review primarily include (a) Significant underperformance relative to projected operating results; (b) Significant changes in the overall business strategy; (c) Significant adverse changes in legal or business environment and (d) Significant competition, unfavorable industry trend, or economic outlook. When these events occur, the Group measures impairment by comparing the carrying value of the ROU assets and property and equipment to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposal. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on excess of carrying value over the fair value of the assets. The Group measured the fair value of impaired space by using discounted cash flow model. The estimates used in projected future cash flows include rental charges and occupancy rate. The gross yield rate is used as the discount rate.

The Group reviews its other non-current assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Factors the Group considers to be important which could trigger an impairment review primarily includes (a) Significant adverse changes in legal or business environment and (b) significant competition, unfavorable industry trend, or economic outlook. When these events occur, the Group measures impairment by comparing the carrying value of the non-current assets to the estimated collection of receivables.

The Group recorded RMB2,510, RMB950 and RMB2,812 impairment losses on its ROU assets, RMB774, RMB17 and RMB136 impairment losses on its property and equipment, RMB25,825, nil and nil impairment losses on its other non-current assets for the years ended December 31, 2023, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***f. Fair value***

Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***g. Financial instruments***

The Group's financial instruments consist primarily of cash and cash equivalents, amounts due from/to related parties, accounts receivable, prepaid expenses and other current assets, accounts payable, warrant liability, forward sale contract liability and other liabilities.

As of December 31, 2024 and 2025, the carrying values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and other liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments.

The Group, with the assistance of independent third-party valuation firms, determined the estimated fair value of its warrant liability and forward sale contract liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***h. Convenience translation***

The Group's business is primarily conducted in China and substantially all of the revenues are denominated in Renminbi ("RMB"). However, periodic reports made to shareholders will include current period amounts translated into US dollars using the exchange rate as of balance sheet date, for the convenience of the readers. Translations of balances in the consolidated balance sheets and the related consolidated statements of operations, comprehensive loss, change in shareholders' equity and cash flows from RMB into US dollars as of and for the year ended December 31, 2025 are solely for the convenience of the readers and were calculated at the rate of USD1.00=RMB6.9931 representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate on December 31, 2025, or at any other rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***i. Cash, cash equivalents and restricted cash***

Cash, cash equivalents and restricted cash comprise cash at banks and on hand, which have original maturities of three months or less when purchased and are subject to an insignificant risk of changes in value. The carrying value of cash equivalents and restricted cash approximates market value. Restricted cash represent bank deposits which were frozen in relation to a legal case.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***j. Short-term investments***

Short-term investments include various financial products with variable interest rates placed with financial institutions. The Group classifies the financial products as trading securities and are carried at fair value. The original maturities of the short-term investments are longer than three months, but shorter than twelve months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***k. Allowance for credit losses***

On January 1, 2023, the Group adopted ASC 326, Credit Losses ("ASC 326") which replaced previously issued guidance regarding the impairment of financial instruments with an expected loss methodology that will result in more timely recognition of credit losses. The Group used a modified retrospective approach and did not restate the comparable prior periods, which resulted in RMB5,376 credit losses for accounts receivable and RMB85 credit losses for prepayment and other current assets recorded in the opening balance of accumulated deficit, a cumulative effect to increase the opening balance of accumulated deficit on January 1, 2023 by RMB5,461.

Upon adoption of ASC 326, the Group maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to assets such as accounts receivable, prepayments and other current assets and due from related parties which are not under common control, etc., and the estimated credit losses charged to the allowance is classified as "General and administrative expenses" in the consolidated statements of operations. The Group assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on size, nature and on an individual basis when we identify specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Group considers historical collectability based on past due status, the age of the receivable balances, credit quality of the Group's customer or vendor based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Group's ability to collect from customers. Receivables are written off after all collection efforts have ceased. The Group generally does not require collateral from its customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***l. Property and equipment, net***

Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the assets, as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Leasehold improvement | Shorter of the lease term or estimated economic life |
| Building | 20 years |
| Furniture | 5 years |
| Office equipment | 3 years |

---

Repair and maintenance costs are charged to expenses as incurred, whereas the costs of renewals and betterment that extend the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***m. Intangible assets***

Intangible assets are amortized using the straight-line basis over the estimated useful lives. The Group recorded amortization expense of RMB1,437, RMB472 and nil for the years ended December 31, 2023, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***n. Long-term investments***

The Group's long-term investments include equity securities without readily determinable fair values (cost method investments before adoption of Accounting Standard Codification ("ASC") 321) and equity method investments.

 

 

*<u>Equity securities without readily determinable fair values</u>*

For equity securities without readily determinable fair value, the Group elected to use the measurement alternative to measure those investments at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The adoption did not have a material impact on the Group's consolidated financial position or results of operations.

The Group reviews its equity securities without readily determinable fair value for impairment at each reporting period. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment's fair value in accordance with the principles of ASC Topic 820 — Fair Value Measurement ("ASC 820"). If the fair value is less than the investment's carrying value, the Group would recognize an impairment loss in the consolidated statements of operations.

 

*<u>Equity method investments</u>*

Investee companies over which the Group has the ability to exercise significant influence, but does not have a controlling interest through investment in common shares or in-substance common shares, are accounted for using the equity method. Significant influence is generally considered exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee's board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate.

Under the equity method, the Group initially records its investment at cost and subsequently recognizes the Group's proportionate share of each equity investee's net income or loss after the date of investment into accumulated deficit and accordingly adjusts the carrying amount of the investment. The Group reviews its equity method investments for impairment whenever an event or circumstance indicates that any other-than-temporary impairment ("OTTI") has occurred. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investment.

An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary.

*<u>Nonmonetary transactions</u>*

 

The Group engages in nonmonetary exchanges of equity interest of certain long-term investments. The transaction price of the nonmonetary consideration is based on the fair values of the assets involved. The cost of equity interest acquired in exchange is initially measured at the fair value of the assets the Group surrendered to obtain them.

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***o. Convertible bond and detachable warrants***

The Group issued convertible bond with detachable warrants in January 2022. The Group has evaluated that the convertible bond with detachable warrants is a bundle of freestanding financial instruments and should be separately accounted. With respect to the convertible bond, the Group has evaluated whether the conversion feature of the bond is considered an embedded derivative instrument subject to bifurcation in accordance with ASC 815 —Accounting for Derivative Instruments and Hedging Activities ("ASC 815"). Based on the Group's evaluation, the conversion feature is not considered to be bifurcated because the conversion feature is either clearly and closely related to the Convertible Bond or meet the scope exception under ASC 815-10-15. The Group has determined that there was no beneficial conversion feature attributable to the convertible bond, as the adoption of ASU 2020-06 since January 1, 2022.

The Group has evaluated the embedded put option in accordance with ASC815 has had determined the put option meet the definition of a derivative and need to be bifurcated and measured under the fair value as the convertible bond was issued at a substantial discount and is contingently exercisable. The Group classifies put option in its consolidated balance sheets as a liability which is revalued at each balance sheet date subsequent to the initial issuance.

The Group has evaluated the detachable warrants in accordance with ASC 815 has had determined the detachable warrants meet the definition of a derivative and need to be measured under the fair value. The Group classifies warrants in its consolidated balance sheets as a liability which is revalued at each balance sheet date subsequent to the initial issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***p. Warrant liability***

In connection with the issuances of ordinary shares, the Group may issue options or warrants to purchase ordinary shares. In certain circumstances, these options or warrants may be classified as liabilities, rather than as equity.

Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. Warrants classified as liabilities are initially recorded at fair value with gains and losses arising from changes in fair value recognized in the consolidated statements of operations during the period in which such instruments are outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***q. Lease***

The Group made an accounting policy election for all lease related asset classes, to account for the lease and non-lease components as a single lease component. The Group has also made an accounting policy election to exempt leases with an initial term of 12 months or less from being recognized on the balance sheet. Short-term leases are not significant in comparison to the Group's overall lease portfolio. Payments related to those leases continue to be recognized in the consolidated statement of operations on a straight-line basis over the lease term.

*<u>From the Perspective of Lessee</u>*

The Group leases properties for its co-working space and other locations. At the commencement of each lease, management determines its classification as an operating or finance lease. For leases that qualify as operating leases, the Group recognizes the associated lease expense on a straight-line basis over the term of the lease beginning on the date of initial possession, which is generally when the Group enters the leased premises and begins to make improvements in preparation for its intended use.

At the commencement date of a lease, the Group recognizes a lease liability for future fixed lease payments and a ROU asset representing the right to use the underlying asset during the lease term.

The future fixed lease payments are discounted using the incremental borrowing rate as the rate implicit in the lease is not readily determinable. The incremental borrowing rate is estimated on a portfolio basis and incorporating lease term, currency risk, credit risk and an adjustment for collateral.

The Group uses the discount rate as of the commencement date of the lease, incorporating the entire lease term. Current maturities and long-term portions of operating lease liabilities are classified as lease liabilities, current and lease liabilities, non-current, respectively, in the consolidated balance sheets.

The ROU asset is measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred and lease incentives. Variable lease expenses include rent contingent payments based on percentages of revenue as defined in the lease. It is not included in lease expenses before it incurs or becomes probable.

Termination of a lease before the expiration of the lease term is accounted by removing the right-of-use asset and the lease liability, with gain or loss recognized for the difference. A termination penalty paid or received upon termination that was not already included in the lease payments is generally included in the gain or loss on termination. The Group recorded gain from termination of leases of RMB30,427, RMB953 and RMB1 for the years ended December 31, 2023, 2024 and 2025 in other income, net in the consolidated statement of operations, respectively.

 

 

*<u>From the Perspective of Lessor</u>*

The Group recognizes workspace membership revenue under ASC 842, and all the lease contracts are operating leases. The Group provides various leasing solutions for its members and generates revenues from monthly rent in the form of membership services fees or office desk rental fee. The workspace memberships enable members to access to office space, use of a shared internet connection, access to certain facilities (kitchen, common areas, etc.), as well as fee-based for the use of conference room. The price of each membership varies, based on the basis of the particular characteristics of the office space occupied by the member, the geographic location of the workspace, and the amount of desk space in the contract. The members do not have options to purchase underlying assets at termination. Renewal of memberships are on a negotiation basis before termination. The majority of the Group's lease contracts are fixed lease payment contracts. The Group's variable lease payments consist of certain contracts indexed to future sales revenues of the lessees. Variable membership fees are recognized when incurred. Workspace membership revenue consists primarily of fees from members and is recognized ratably, on a monthly basis, over the lease term, as access to office space is provided. The Group applied practical expedients to choose not to separate lease and non-lease components for all lease related asset classes. The consolidated component is accounted for under ASC842. The lease term for most of the membership services is less than one year. The leases do not have renewal options and penalty is imposed if the lessees early terminate the leases. Workspace membership fees are generally collected in advance each quarter. Members are generally required to provide the Group with a deposit which is normally one-month service fee. Pursuant to the term of membership agreement, the amount of deposit may be applied against the member's unpaid balance.

The residual value of the Group's lease assets represents the fair value of the leased assets at the end of the lease terms. The Group relies on industry data, historical experience, independent appraisals and the experience of the management team to value lease residuals.

Operating lease income from fixed payments and variable lease income for the years ended December 31, 2023, 2024 and 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Operating lease income from fixed payments | 124140 | 68558 | 22630 |
| **Total** | **124140** | **68558** | **22630** |

---

Lease payments receivable for the following five years were as follows:

---

| | |
|:---|:---|
|  | **As of <br> December 31,<br> 2025** |
|  | **RMB** |
| 2026 | 10296 |
| 2027 | 6835 |
| 2028 | 6854 |
| 2029 | 6835 |
| 2030 | 6835 |
| Thereafter | 47904 |
| **Total** | **85559** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***r. Revenue recognition***

Revenue is recognized when control of promised goods or services is transferred to the Group's customers in an amount of consideration to which the Group expects to be entitled to in exchange for those goods or services. The Group follows the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Group satisfies a performance obligation.

The primary sources of the Group's revenues are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Workspace membership revenue

As set out in Note 2 "Lease, from the perspective of lessor", workspace membership revenue is recognized under ASC 842.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Other services revenue

Other services revenue primarily consists of 1) co-working space management fees, 2) SaaS services, IOT solutions and technical support revenue, 3) charges to members for ancillary services including printing and copying, 4) tour service and 5) hotel service, etc. There is no variable consideration arrangement provided to customers. There is no significant payment term or financing component within each revenue type. There is no sales return, refund or warranty right provided to customers. The Group identified the performance obligations based on the services stated within the contracts as further outlined below.

1) Co-working space management fees

The Group recognized revenue of RMB9,007, RMB3,316 and RMB71 for the years ended December 31, 2023, 2024 and 2025 from co-working space management service which are derived from managing branded co-working space locations for leased property owners. The fee generally consists of a monthly base amount plus revenue sharing. The Group primarily charge landlords management fees for branding, consulting and operating services as the single performance obligation due to the services being highly interdependent inputs to the co-working space management. The Group provides services within the contract term and recognizes revenue over time under output method when service is completed.

2) SaaS services, IOT solutions and technical support revenue

The Group recognized SaaS service and IOT solutions revenue of RMB14,568, RMB982 and RMB6 for the years ended December 31, 2023, 2024 and 2025. The Group provides intranet connected devices to customers under SaaS service and IOT solution which is identified as a single performance obligation as the goods are not able to be distinctly used. The Group recognizes revenue at a point in time for the SaaS services and IOT solutions revenue when devices are delivered to customers.

The Group recognized technical support revenue of RMB1,610, RMB1,557 and RMB794 for the years ended December 31, 2023, 2024 and 2025. The Group provides technical support services as the single performance obligation and recognizes revenue over time ratably throughout a fixed term or under output method based on the agreed price for system development, because the customer simultaneously receives and consumes the benefits as the Group performs throughout a fixed term.

3) Ancillary services and other revenue

The Group recognized ancillary service and other revenue of RMB2,705, RMB2,578 and RMB347 for the years ended December 31, 2023, 2024 and 2025.The Group provides one-off ancillary services including printing and copying services to customers as needed. The Group recognizes revenue at a point in time when such services are completely rendered to members.

4) Tour service

The Group recognized tour service revenue of nil, RMB222 and RMB1,124 for the years ended December 31, 2023, 2024 and 2025. Tour service is service fee derived from providing oversea tour services to customers. The Group cooperates with travel agencies and charges tour service fee to the third-party customers, mainly including transportation fee, accommodation fee, catering fee, attraction ticket fee, tour guide service fee, etc., which are highly interrelated to provide customers with the entire travel experience. The Group recognizes revenue over the period of the tour because the customers simultaneously receive and consume the benefits provided by the Group as they complete the performance obligation.

5) Hotel service

The Group recognized hotel service revenue of nil, nil and RMB1,148 for the years ended December 31, 2023, 2024 and 2025. The Group leases properties from property owners or lessors and uses for the hotel operation. The revenue is mainly driven from the rental of rooms, sales of food and beverages and other goods and services. Each of the services and products represents an individual performance obligation and the Group receives fixed prices in exchange for these services and products. The Group recognize room rental revenue overtime on a daily basis when the rooms are occupied because the customers simultaneously receive and consume the benefits during the accommodation period. Sales of food and beverage revenue and other goods and services revenue are recognized at a point in time when they have been delivered or rendered to the guests as the respective performance obligations are satisfied. Substantially all of hotel service revenue was recognized over time from room rental revenue.

Contract liabilities primarily result from the timing difference between the Group's satisfaction of performance obligation and the customers' payment. Substantial all other services revenue is recognized over time during the years ended December 31, 2023, 2024 and 2025. Balance of contract liabilities were RMB293 and RMB674 as of December 31, 2024 and 2025, respectively. Revenue recognized that was included in deferred revenue balance at the beginning of year were RMB5,075, RMB1,999 and RMB184 for the years ended December 31, 2023, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***s. Cost of revenue (excluding impairment loss)***

Cost of revenue (excluding impairment loss) primarily consists of lease expenses, employee compensation and benefits, depreciation and amortization and other workspace operational costs such as utilities, maintenance, daily cleaning, insurance costs, office expenses, and consumables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***t. Government subsidies***

The government subsidies provided by the local government mainly included funding to support the development of the Group's business. The Group reports government subsidies as subsidy income when received from local government authority with no limitation on the use of the subsidies. From time to time, the Group receives government subsidies related to government sponsored projects and records such government subsidies as a liability when received and recognizes as income when the performance obligation is met or fulfilled. For the years ended December 31, 2023, 2024 and 2025, RMB7,754, RMB804 and RMB5 were received and recognized as subsidy income in the Group's consolidated statements of operations, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***u. Value added taxes***

Value-added tax ("VAT") is reported as a deduction to revenue. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expense and other current liabilities on the consolidated balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***v. Income taxes***

Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions for income taxes. There is no interest and penalty accrued or paid for the year ended December 31, 2023, 2024 and 2025.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The Group adopted the new guidance from January 1, 2025 prospectively. (See Note 14)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***w. Share-based compensation***

Share-based compensation expense arises from the Company's share-based awards granted to its employees and non-employees.

In determining the fair value of share options granted, a binomial option pricing model is applied.

Share-based compensation expense for share options granted is recognized on a tranche-by-tranche method over the requisite service period. The Company elected to not estimate the forfeiture rate, but to account for the forfeiture when forfeitures occur.

A change in any of the terms or conditions of share awards is accounted for as a modification. The Company calculates the incremental compensation cost of modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. The Company recognizes, over the remaining requisite service period of the modified awards, the sum of the incremental compensation cost and the remaining unrecognized compensation cost, if any, for the original award on the modification date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***x. Comprehensive loss***

Comprehensive loss includes net loss and foreign currency translation adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***y. Commitments and Contingencies***

In the normal course of business, the Group is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as business disputes, government investigations and tax matters. The Group recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***z. Mezzanine equity***

Where equity interests are determined to be conditionally redeemable upon the occurrence of certain events that are not solely within the control of the Group, and upon such event, the shares would become redeemable at the option of the holders, they are classified as mezzanine equity (temporary equity). The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in a demand for cash or other assets of the entity in the future. When the equity interests are currently redeemable or it becomes probable that the equity interests will become redeemable, the Group accretes the redeemable equity interests to their redemption value. The accretions and paid-in-kind dividends of the Preferred Shares are recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid-in capital. Once additional paid-in capital had been exhausted, additional charges were recorded by increasing the accumulated deficit.

***aa. Forward sale contract liability***

The Group signed an agreement with an investor to sell redeemable convertible preferred shares, including an offer of forward sales contract which required the Company to sell and the investor to purchase redeemable convertible preferred shares of the company at an agreed fixed per share price in the future, upon certain circumstances within the control of the Group and the investor. The Group has evaluated that the sale of redeemable convertible preferred shares with detachable forward contract liability is a bundle of freestanding financial instruments and should be separately accounted.

The outstanding redeemable convertible preferred shares are recorded as mezzanine equity considering its potential redemption at the option of the holders. With respect to the detachable forward sale contract, based on the Group's evaluation, the forward sale contract is considered to be recorded as liability measured initially and subsequently at fair value under ASC 480 because the Preferred Shares included certain contingent redemption features which created an obligation for the Company to repurchase its shares.

***bb. Net loss per share***

Basic and diluted loss per share from continuing operation and discontinued operation are computed by dividing net loss attributable to holders of ordinary shares from continuing operation and discontinued operation, respectively, by the weighted average number of ordinary shares outstanding during the period. Because the Class A ordinary shares and Class B ordinary shares have the same dividend and other rights, except for voting and conversion rights for Class B ordinary shares to be converted into Class A ordinary shares on one-to-one basis, as such, this two-class share structure has no impact to the loss per share calculation. Basic loss per share and diluted loss per share are the same for each Class A ordinary shares and Class B ordinary shares. The two classes of ordinary shares have been presented on a combined basis in the consolidated statements of operations and in the computation of net loss per share.

Diluted loss per share from continuing operation and discontinued operation are computed by dividing net loss attributable to holders of ordinary shares from continuing operation and discontinued operation, respectively, as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary and dilutive ordinary share equivalents outstanding during the period. Ordinary share equivalents include the ordinary shares issuable upon the exercise of share options, unit purchase options and warrants using the treasury stock method, and conversion of redeemable convertible preferred share using the if-converted method. Potential dilutive securities are not included in the calculation of diluted loss per share from continuing operation and discontinued operation if the impact is anti-dilutive under continuing operation.

During the years ended December 31, 2023, 2024 and 2025, the Group has ordinary shares issuable upon the exercise of share options, unit purchase options, warrants and conversion of redeemable convertible preferred shares as potentially dilutive ordinary shares and are excluded from the calculation for the period, as their effects would be anti-dilutive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***cc. Significant risks and uncertainties***

*<u>Foreign currency risk</u>*

The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the Peoples Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group's cash and cash equivalents denominated in RMB amounted to RMB7,486 and RMB 4,256 as of December 31, 2024 and 2025, respectively.

*<u>Concentration risks</u>*

Financial instruments that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. Under PRC law, it is generally required that a commercial bank in the PRC that holds third-party cash deposits protect the depositors' rights over principal and interests in their deposited money; PRC banks are subject to a series of risk control regulatory standards; and PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. Accounts receivable is typically unsecured and are derived from revenue earned from customers. The risk is mitigated by credit evaluations the Group performs on its ongoing credit evaluations of its customers' financial conditions and ongoing monitoring process of outstanding balances. The Group maintains reserves for estimated credit losses and these losses have generally been within expectations.

As of December 31, 2024 and 2025, 99.82% and 62.98% of the Group's cash and cash equivalents were deposited in financial institutions located in the PRC.

No customer that individually represents greater than 10% of the total revenue for the years ended December 31, 2023 and 2024. There are two customers (customers A and B) from workspace membership revenue segment individually represents 26.9% and 23.7% of total revenue for the year ended December 31, 2025.

There is one customer (customer B) individually represents greater than 10% of total accounts receivable as of December 31, 2024 and 2025. Its percentage to total accounts receivable is 85.5% and 94.8% as of December 31, 2024 and 2025, respectively.

No supplier that individually represents greater than 10% of the total cost of revenue (excluding impairment loss) for the years ended December 31, 2023, 2024 and 2025.

There are two suppliers individually represent greater than 10% of total accounts payable as of December 31, 2024. Their aggregated percentage to total accounts payable is 44.3% as of December 31, 2024. There are three suppliers individually represent greater than 10% of total accounts payable as of December 31, 2025. Their aggregated percentage to total accounts payable is 54.80% as of December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***dd. Segment reporting***

In November 2023, the FASB issued Accounting Standards Update, or ASU 2023-07 – Improvements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment's expenses. The Group adopted ASU 2023-07 during the year ended December 31, 2024, retrospectively to all periods presented in the consolidated financial statement. The adoption of this ASU did not have a material impact on the Group's consolidated financial statements and related disclosures.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the "CODM"), which is the CEO. The Group has two operating segments identified including workspace membership and other services.

***ee. Recent accounting pronouncements not yet adopted***

In November 2024, the FASB issued ASU No.2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027 either prospectively or retrospectively. Early adoption is permitted. The Group does not expect to adopt the update early and is evaluating the impact on its consolidated financial statements.

In July 2025, the FASB issued ASU No.2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses, that all entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods prospectively. Early adoption is permitted. The Group did not adopt the update early and is evaluating the impact on its consolidated financial statements.

In December 2025, the FASB issued ASU No.2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides further guidance on accounting treatment for government grants. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods either prospectively or retrospectively. Early adoption is permitted. The Group does not expect to adopt the update early and is evaluating the impact on its consolidated financial statements.

**3. REVISION TO PRIOR PERIOD FINANCIAL STATEMENTS**

In 2025, an internal investigation of the Group uncovered several fraudulent acts conducted by certain employees through fabricating the agency fees of the Group's workspace membership business in specific workspace projects to earn kickback from the real estate agencies. The Group reported this matter to the public security authorities upon discovering the fraudulent acts. The public security authorities have taken compulsory measures against the implicated employees. The implicated employees, their family members and relevant agencies have returned a total of RMB8.7 million involved in the incident to the Group. Based on the information available to the Group, as of the issuance date of this annual report, the investigation has now entered its final stage. The Group does not expect to receive any further significant refunds or compensations related to the incident. The Group will continue to closely monitor and evaluate any future development of the legal proceedings in connection with the incident.

The Group assessed the impact of this incident on its consolidated financial statements in accordance with Staff Accounting Bulletin ("SAB") 99, "Materiality", and SAB 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements". For the years ended December 31, 2023 and 2024, there is an overstatement of agency fee included in sales and marketing expense, other income and accumulated deficit of the Group, and an understatement of the prepaid expenses and other current assets, net and net loss of the Group. The Group evaluated the materiality of the errors from qualitative and quantitative perspectives, individually and in aggregate, and concluded that the errors are not material to the consolidated financial statements for prior years, but is material to the current-period financial statements if corrected in current year. Management revised the consolidated balance sheets as of December 31, 2024, and the consolidated statements of operations, comprehensive loss, changes in shareholders' equity and cash flows for the years ended December 31, 2023 and 2024.

The following table summarized the corrections made to the previously reported consolidated financial statements as of December 31, 2024 and for the years ended December 31, 2023 and 2024, which has retrospectively reflected the impact of discontinued operation as in Note 4.

The effects of adjustment for the error on the consolidated statements of balance sheets are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** |
|  | **RMB** | **RMB** | **RMB** |
| **Assets** | | | |
| Prepaid expenses and other current assets, net | 20055 | 8597 | 28652 |
| **Total current assets** | **145413** | **8597** | **154010** |
| **Total assets** | **317181** | **8597** | **325778** |
| **Shareholders' Equity** |  |  |  |
| Accumulated deficits | (4610099) | 8597 | (4601502) |
| **Total Ucommune International Ltd. Shareholders' Equity** | **101009** | **8597** | **109606** |
| **Total Equity** | **143238** | **8597** | **151835** |
| **Tota Liability and Equity** | **317181** | **8597** | **325778** |

---

The effects of adjustment for the error on the consolidated statements of operations are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Sales and marketing expenses | (8826) | 183 | (8643) | (3540) |  | (3540) |
| **Loss from operations** | **(114440)** | **183** | **(114257)** | **(46332)** | **—**  | **(46332)** |
| Other income, net | 9124 | (451) | 8673 | 2459 | (279) | 2180 |
| **Loss before income taxes and loss from equity method investments** | **(3096)** | **(268)** | **(3364)** | **(63908)** | **(279)** | **(64187)** |
| **Net loss from continuing operations** | **(10582)** | **(268)** | **(10850)** | **(70760)** | **(279)** | **(71039)** |
| **Net loss** | **(22556)** | **(268)** | **(22824)** | **(79967)** | **(279)** | **(80246)** |
| **Net loss attributable to Ucommune International Ltd. from continuing operations** | **(6816)** | **(268)** | **(7084)** | **(65799)** | **(279)** | **(66078)** |
| Net loss per share attributable to ordinary shareholders of Ucommune International Ltd. from continuing operations | (12.60) | (0.50) | (13.10) | (56.14) | (0.24) | (56.38) |

---

The effects of adjustment for the error on the consolidated statements of comprehensive losses are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Net loss | (22556) | (268) | (22824) | (79967) | (279) | (80246) |
| **Total Comprehensive loss** | **(24104)** | **(268)** | **(24372)** | **(72581)** | **(279)** | **(72860)** |
| **Comprehensive loss attributable to Ucommune International Ltd.'s shareholders** | **(6407)** | **(268)** | **(6675)** | **(61818)** | **(279)** | **(62097)** |

---

The effects of adjustment for the error on the consolidated statements of changes in Shareholders' equity are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Accumulated deficit** | **Accumulated deficit** | **Accumulated deficit** |
|  | **As<br> previously<br> reported** | **Adjustments** | **Adjusted** |
|  | **RMB** | **RMB** | **RMB** |
| **Balance as of December 31, 2022** | **(4529473)** | **9144** | **(4520329)** |
| Net loss | (4864) | (268) | (5132) |
| **Balance as of December 31, 2023** | **(4540848)** | **8876** | **(4531972)** |
| Net loss | (69251) | (279) | (69530) |
| **Balance as of December 31, 2024** | **(4610099)** | **8597** | **(4601502)** |

---

**4. DISCONTINUED OPERATION**

***<u>a. Disposition of interior design and construction</u>***

On October 26, 2024, the Ucommune Venture VIE Agreements were terminated and by which time Ucommune Venture and its subsidiaries were deconsolidated, and certain businesses of the Group were disposed accordingly. (Note 1)

The disposal of interior design and construction business represented a strategic shift that had a major effect on the Group's operations and financial results, and was accounted for as discontinued operation. Accordingly, assets, liabilities, results of operations, and cash flows related to interior design and construction business have been reflected in the consolidated financial statements as discontinued operation for all periods presented.

Interior design and construction business results of operations for the year ended December 31, 2023 and for the period from January 1, 2024 to October 26, 2024, shown in the table below, are included in the consolidated statement of operations as "net loss from discontinued operations" for those respective periods, after intercompany eliminations, as applicable.

---

| | | |
|:---|:---|:---|
|  | **For the<br> year ended<br> December 31, <br> 2023** | **For the<br> period from<br> January 1<br> to<br> October 26,<br> 2024** |
|  | **RMB** | **RMB** |
| Net revenue | 70417 | 37034 |
| Cost of revenue | (70035) | (38145) |
| Sales and marketing expenses | (228) |  |
| General and administrative expenses | (15927) | 1899 |
| **(Loss)/Income from operations of discontinued operations** | **(15773)** | **788** |
| Interest expense, net | (556) | (876) |
| Subsidy income | 107 | **—**  |
| Loss on disposal of subsidiaries |  | (4408) |
| Other expense, net | (162) |  |
| **Loss before income taxes and loss from equity method investments** | **(16384)** | **(4496)** |
| Income tax benefits | 1333 | **—**  |
| **Loss from discontinued operation, net of tax** | **(15051)** | **(4496)** |

---

The condensed cash flows of interior design and construction business were as follows for the year ended December 31, 2023 and for the period from January 1, 2024 to October 26, 2024 are included in the consolidated statements of cash flows of the Group as cash flow from discontinued operation:

---

| | | |
|:---|:---|:---|
|  | **For the<br> years ended<br> December 31,<br> 2023** | **For the<br> period from<br> January 1<br> to<br> October 26,<br> 2024** |
|  | **RMB** | **RMB** |
| Net cash provided by/(used in) operating activities | 2479 | (3640) |
| Net cash used in investing activities | (154) | (169) |
| Net cash (used in)/provided by financing activities | (7541) | 7298 |

---

No gain or loss were recognized for the disposal of discontinued operation for the year ended December 31, 2024. The impact was reflected as increase of additional-paid-in-capital in the statement of change in shareholders' equity of RMB54,629.

The significant accounting policy of discontinued operation, except those disclosed in Note 2 are summarized as below.

***Revenue recognition***

Interior design and construction revenue

The Group provides interior design service to customers for agreed location as the single performance obligation and recognizes interior design revenue over time upon the achievement of milestones, which represents the design stages agreed in the contract. The Group provides construction service as the single performance obligation and recognizes revenue using a cost-based input method that recognizes revenue as work is performed based on the relationship between actual costs incurred compared to the total estimated cost of the contract, to determine the Group's progress towards contract completion and to calculate the corresponding amount of revenue to recognize. The Group has the right and ability to direct which sub-contractors or third-party designers to provide construction or design work for the customers, and the Group is the primary obligator and bearing the service risk of the interior design and construction services. So, the Group is identified as a principal.

***<u>b. Disposition of marketing and branding services</u>***

On July 21, 2025, Xinjiang Xinyouzhong Marketing Co., Ltd. ("Xinjiang Xinyouzhong"), an indirectly wholly-owned subsidiary of the Company, entered into an equity transfer agreement (the "Agreement") with Singularity Digital Marketing (Guangzhou) Co., Ltd. ("Singularity Digital"), a related party controlled by Mr. Zhenfei Wu, Chief Marketing Officer of the Group. Pursuant to the Agreement, Xinjiang Xinyouzhong sold all of Xinjiang Xinyouzhong's 51% equity interest in Zhuhai Shengguang Zhongshuo Digital Marketing Co., Ltd. ("Shengguang Zhongshuo") to Singularity Digital for an aggregate consideration of RMB16,000.

RMB 1,726 disposal loss was recognized for the disposal in gain/(loss) on disposal of subsidiaries for the year ended December 31, 2025. After this disposal, the Group did not have any remaining investment and did not retain significant continuing involvement in Shengguang Zhongshuo. And Shengguang Zhongshuo became a related party of the Group during the period from this disposal till January 15, 2026, the date which Mr. Zhenfei Wu resigned from the Group. This disposal also represented that the Group completely exited from all marketing and branding services operations.

The disposal of marketing and branding services business represented a strategic shift that had a major effect on the Group's operations and financial results, and was accounted for as discontinued operation. Accordingly, assets, liabilities, results of operations, and cash flows related to marketing and branding business have been reflected in the consolidated financial statements as discontinued operation for all periods presented.

The assets and liabilities are included in the captions "Current assets of discontinued operations", "Non-current assets of discontinued operations" and "Current liabilities of discontinued operations", in the consolidated balance sheets as of December 31, 2024 consist of the following:

---

| | |
|:---|:---|
|  | **As of<br> December 31,**<br>**2024** |
|  | **RMB** |
| Cash and cash equivalents | 65249 |
| Accounts receivable, net of allowance of RMB 3,390 as of December 31, 2024 | 10192 |
| Prepaid expenses and other current assets, net | 3495 |
| Amounts due from related parties, current | 8508 |
| Property and equipment, net | 460 |
| **Total assets of discontinued operations** | **87904** |
| **Balance sheet classification:** |  |
| Current assets of discontinued operations | 87444 |
| Non-current assets of discontinued operations | 460 |
| **Total assets of discontinued operations** | **87904** |
| Accounts payable | 10464 |
| Accrued expenses and other current liabilities | 12431 |
| Contract liabilities | 1458 |
| **Total liabilities of discontinued operations** | **24353** |
| **Balance sheet classification:** |  |
| Current liabilities of discontinued operations | 24353 |
| **Total liabilities of discontinued operations** | **24353** |

---

Marketing and branding services business results of operations for the years ended December 31, 2023, 2024 and for the period from January 1, 2025 to July 21, 2025, shown in the table below, are included in the consolidated statement of operations as "net loss from discontinued operations" for those respective periods, after intercompany eliminations, as applicable.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended <br> December 31,** | **For the years ended <br> December 31,** | |
|  | **2023** | **2024** | **For the<br> period from<br> January 1<br> to July 21,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| Net revenue | 237373 | 97411 | 53956 |
| Cost of revenue | (223861) | (95480) | (53757) |
| Sales and marketing expenses | (4747) | (691) | (466) |
| General and administrative expenses | (8073) | (7053) | (2798) |
| **Income/(Loss) from operations of discontinued operations** | **692** | **(5813)** | **(3065)** |
| Interest income, net | 800 | 934 | 355 |
| Subsidy income | 710 | **—**  | **—**  |
| Other income, net | 142 | 168 | 29 |
| **Income/(Loss) before income taxes and loss from equity method investments** | **2344** | **(4711)** | **(2681)** |
| Income tax benefits | 733 | **—**  | **—**  |
| **Income/(Loss) from discontinued operation, net of tax** | **3077** | **(4711)** | **(2681)** |

---

The condensed cash flows of marketing and branding services business were as follows for the years ended December 31, 2023, 2024 and for the period from January 1, 2025 to July 21, 2025, are included in the consolidated statements of cash flows of the Group as cash flow from discontinued operation:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** | |
|  | **2023** | **2024** | **For the<br> period from<br> January 1<br> to July 21,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| Net cash provided by/(used in) operating activities | 20699 | 29018 | (10128) |
| Net cash provided by/(used in) investing activities | 7720 | (641) |  |
| Net cash used in financing activities | (790) | (98) |  |

---

The significant accounting policy of discontinued operation, except those disclosed in Note 2 are summarized as below.

***Revenue recognition***

Marketing and branding services revenue

The Group provides integrated branding services primarily including the tailor-made digital marketing strategy design and placement on different media platforms based on the customer's needs in respective industries, including the internet, automobile, finance, electronics and consumer goods as the single performance obligation and revenue is recognized over time during the contract period under input method according to the actual placement. The Group also provides online targeted marketing services to provide marketing strategy design and placement on famous advertising platform for the promotion of the customer as the single performance obligation and recognize revenue over time during the contract period under output method according to the agreed settlement statement. The Group is the primary obligator and bearing the service risk of the marketing and branding services, and the Group has the right and ability to direct which media channel to place the advertisement to the customer on the Group's behalf and has discretion in establishing the price for the service. So, the Group is identified as a principal.

**5. BUSINESS COMBINATION**

During the year ended December 31, 2025, the Group made an insignificant business acquisition from one of its related parties. The consideration of the business acquisitions was nil and the acquired had a net liability. The Group recorded the impact of acquiring net liability as a reduction to the additional paid-in capital. The results of operations for the acquired entity has been included in the Group's consolidated financial statements from the acquisition date.

**6. ACCOUNTS RECEIVABLE, NET**

Accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,** | **As of<br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Account receivable | 15741 | 16078 |
| Less: Allowance for credit losses | (4413) | (6271) |
| **Total** | **11328** | **9807** |

---

The following table provide a summary of changes of the allowance for credit loss for the years ended December 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Balance at beginning of period | 28863 | 4413 |
| Amounts charged to expenses | 1112 | 274 |
| Amounts written off\* | (1374) | (378) |
| Disposal of subsidiaries | (24188) | (5) |
| Acquisition |  | 1967 |
| **Balance at end of period** | **4413** | **6271** |

---

\* It represents the credit loss written off due to the deregistration of the counter party.

As of December 31, 2024 and 2025, all accounts receivable was due from third party customers. Provision for credit losses for the years ended December 31, 2023, 2024 and 2025 were RMB9,778, RMB1,112 and RMB274, respectively. There is no recovery collected for the year ended December 31, 2023, 2024 and 2025.

**7. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET**

Prepaid expenses and other current assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,** | **As of <br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Advances to suppliers<sup>(i)</sup> | 3782 | 3911 |
| Prepaid VAT | 12416 | 11273 |
| Rental and other short-term deposits | 1701 | 719 |
| Staff advances | 1276 | 383 |
| Prepaid consulting expenses | 35 | 208 |
| Prepaid short-term rent | 1052 | 465 |
| Receivables from third-party payment platform | 7 | 8 |
| Others<sup>(ii)</sup> | 16500 | 5938 |
| Total | 36769 | 22905 |
| Less: Provision for credit losses | (8117) | (6175) |
| **Total** | **28652** | **16730** |

---

Notes:

(i) Advances to suppliers mainly includes prepaid operation expenses.

(ii) Others mainly includes the loans provided to third parties and the non-trade receivables from third parties.

The following table provide a summary of changes of the provision for credit loss for the years ended December 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Balance at beginning of period | 25360 | 8117 |
| Amounts reversed | (4824) | (1942) |
| Amounts written off\* | (1963) |  |
| Disposal of subsidiaries | (10456) |  |
| **Balance at end of period** | **8117** | **6175** |

---

\* It represents the credit loss written off due to the deregistration of the counter party.

Provision for credit losses for prepayment and other current assets for the year ended December 31, 2023 was RMB6,293, and reversal for credit losses for prepayment and other current assets for the year ended December 31, 2024 and 2025 were RMB4,824 and RMB 1,942, respectively. There is no recovery collected for the year ended December 31, 2023, 2024 and 2025.

**8. PROPERTY AND EQUIPMENT, NET**

Property and equipment, net, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Buildings | 54200 | 44270 |
| Leasehold improvement | 21162 | 16504 |
| Office equipment | 1144 | 1073 |
| Furniture | 529 | 400 |
| Total cost of property and equipment | 77035 | 62247 |
| Less: Accumulated depreciation | (10882) | (7333) |
| Less: Impairment | (6709) | (6845) |
| **Total** | **59444** | **48069** |

---

Depreciation expenses for the years ended December 31, 2023, 2024 and 2025 were RMB16,400, RMB9,196 and RMB3,220, respectively.

Impairment loss for the years ended December 31, 2023, 2024 and 2025 were RMB774, RMB17 and 136, respectively.

Loss on disposal for the years ended December 31, 2023, 2024 and 2025 were RMB14,146, RMB2,558, and nil, respectively.

As of December 31, 2025, the Group had no significant outstanding capital commitments.

**9. LONG-TERM INVESTMENTS**

Long-term investments consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,** | **As of <br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| **Equity method investments:** |  |  |
| Other equity method investments<sup>(a)</sup> | 686 |  |
| Less: impairment loss on equity method investments | (686) |  |
| **Equity securities without readily determinable fair values investments:** |  |  |
| Hangzhou Renjunxing Technology Co., Ltd (Renjunxing)<sup>(b)</sup> | 18681 | 18681 |
| Other equity securities without readily determinable fair values investments | 200 | 200 |
| **Total** | **18881** | **18881** |

---

Notes:

(a) The Group invested RMB686 in Ucommune N.Y. Corp. (Delaware) on March 20, 2017, holding a 35% share. The Group fully impaired this investment in 2019. Ucommune N.Y. Corp. (Delaware) was deregistered on January 3, 2025.

(b) In June 2023, the Group acquired 0.8974% of equity interest of Renjunxing through nonmonetary transactions with Renjunxing, a game Company, in exchange of the Group's creditor's right of prepaid rental expense receivables due to early termination of two leases of which carrying value is RMB18,681. The cost of equity interest acquired in exchange is initially measured at the fair value of the creditor's right that the Group surrendered to obtain the equity interest which is equal to RMB18,681. As the Group does not have the ability to exercise significant influence over the investee, the investment was accounted for by using equity securities without readily determinable fair value.

**10. LEASE**

<u>From the Perspective of Lessee</u>

The Group leases real estate for terms between 2 to 20 years from real estate companies. The Group generally does not have options to extend or terminate leases, as the renewal or termination of relevant lease is on negotiation basis. Lease commences when the landlords make the space available for the Group to use.

The Group sub-leased the leased premises to provide various lease solutions. All of the Group's leases are operating leases under ASC 842.

Supplemental balance sheet information related to the leases were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,** | **As of <br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| ROU assets | 89832 | 72733 |
| Operating lease liabilities – current | (7984) | (1204) |
| Operating lease liabilities – non-current | (20977) | (13389) |
| Weighted average remaining lease terms | 10.72year | 11.41year |
| Weighted average incremental borrowing rate | 10.47% | 9.67% |

---

The components of lease expenses for the years ended December 31, 2023, 2024 and 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Operating lease expenses for variable payments | 7382 |  |  |
| Operating lease expenses for fixed payments | 57195 | 27903 | 8548 |
| Short-term lease expenses | 10527 | 7592 | 7704 |
| **Total** | **75104** | **35495** | **16252** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows for operating leases |  | 37904 |  | 5982 |  | 2130 |

---

Supplemental noncash information:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Operating lease liabilities arising from obtaining ROU assets | 12980 |  | 14578 |
| ROU assets disposed as reduction of operating lease liabilities due to lease termination | 140507 | 32375 | 390 |

---

The future lease payments were as follows:

---

| | |
|:---|:---|
|  | **As of<br> December 31,<br> 2025** |
|  | **RMB** |
| 2026 | 1136 |
| 2027 | 1699 |
| 2028 | 1729 |
| 2029 | 1746 |
| 2030 | 1796 |
| Thereafter | 8683 |
| **Total lease payments** | **16789** |
| Less: imputed interest | (2196) |
| **Total lease liabilities** | **14593** |

---

**11. FAIR VALUE MEASUREMENT**

**Measured at fair value on a non-recurring basis**

The Group measures ROU assets, property and equipment and other long-lived assets on a non-recurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. The fair value is determined using income approach – discounted cash flow model with significant unobservable inputs (Level 3 inputs), primarily the management projection of future cash flow and the discount rate. The Group recorded RMB2,510, RMB950 and RMB2,812 impairment losses on its ROU assets, RMB774, RMB17 and RMB136 impairment losses on property and equipment for the years ended December 31, 2023, 2024 and 2025, respectively.

There is no transfer between different levels during the years ended December 31, 2023, 2024 and 2025.

**Measured at fair value on a recurring basis**

The Group measures warrant liabilities and forward sale contract liability on a recurring basis. The fair value is determined using models with significant unobservable inputs (Level 3 inputs).

The following table presents the fair value hierarchy for the Group's liabilities that are measured and recorded at fair value as of December 31, 2024 and 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Level 1<br> Inputs** | **Level 1<br> Inputs** | **Level 2<br> Inputs** | **Level 2<br> Inputs** | **Level 3 <br> Inputs** | **Level 3 <br> Inputs** | **Balance at<br> fair value** | **Balance at<br> fair value** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Warrant liabilities |  |  |  |  |  | 1 |  | 1 |
| Forward sale contract liability |  |  |  |  |  | 16813 |  | 16813 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Level 1<br> Inputs** | **Level 1<br> Inputs** | **Level 2<br> Inputs** | **Level 2<br> Inputs** | **Level 3<br> Inputs** | **Level 3<br> Inputs** | **Balance at<br> fair value** | **Balance at<br> fair value** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Warrant liabilities |  |  |  |  |  | 467 |  | 467 |

---

The Group adopted Black Scholes model to assess the warrant's fair value. The valuation involves complex and subjective judgements as well as the Group's best estimates on the valuation date. Key inputs related to the Black Scholes model for the valuation of the fair value of warrants are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** |
|  | **2024** | **2024** | **2025** | **2025** |
| Risk-free interest rate |  | 4.26% |  | 3.49% |
| Volatility |  | 52.71% |  | 31.53% |
| Dividend yield |  |  |  |  |
| Life of warrants (in years) |  | 4.07 |  | 3.07 |
| Fair value of underlying ordinary shares | US$ | 1.18 | US$ | 0.63 |

---

The Group adopted Monte Carlo model using a Longstaff Schwartz algorithm to assess the forward sale contract's fair value. The valuation involves complex and subjective judgements as well as the Group's best estimates on the valuation date. Key inputs related to the model for the valuation of the fair value of the forward sale contract are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the <br> year ended<br> December 31,<br> 2025** | **For the <br> year ended<br> December 31,<br> 2025** |
| Risk-free interest rate |  | 3.59% – 3.67 |
| Volatility |  | 64.61% |
| Dividend yield |  |  |
| Life of forward sale contract (in years) |  | 0.14 |
| Fair value of underlying ordinary shares | US$ | 0.79 |

---

**12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**

Accrued expenses and other current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Penalty payable<sup>(i)</sup> | 8620 | 6820 |
| Refundable deposits from members, current | 4044 | 2086 |
| Accrued payroll | 2442 | 2538 |
| VAT payable | 209 | 265 |
| Other taxes payable | 876 | 512 |
| Third-party loans<sup>(ii)</sup> | 330 | 735 |
| Amounts reimbursable to employees | 123 | 118 |
| Others | 3717 | 5015 |
| **Total** | **20361** | **18089** |

---

Notes:

(i) This item represents penalty for early termination of lease, overdue rent and legal proceedings.

(ii) This item represents loans borrowed from third-party individuals with annual interest rate from 0% to 24%.

**13. COST OF REVENUE (EXCLUDING IMPAIRMENT LOSS)**

Cost of revenue (excluding impairment loss) consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Lease expenses | 69053 | 35065 | 14831 |
| Employee compensation and benefits | 19555 | 6444 | 3864 |
| Depreciation and amortization | 16327 | 9621 | 910 |
| Construction and design costs | 1003 | 1005 |  |
| Other operating costs<sup>(i)</sup> | 54950 | 26878 | 7261 |
| **Total** | **160888** | **79013** | **26866** |

---

Notes:

(i) Including utilities, maintenance, daily cleaning and others.

**14. INCOME TAXES**

**Cayman Islands & BVI**

The Company and Ucommune Group are tax-exempted companies incorporated in the Cayman Islands. A subsidiary, Ucommune International Limited, is incorporated in BVI. The foregoing companies are not subject to income tax.

**United States ("U.S.")**

Melo Inc. and Ucommune N.Y. Corp. are incorporated in the U.S. and are subject to the U.S. federal income taxes. According to U.S. tax reform, a flat corporate income tax rate of 21% is effective beginning in 2018. Ucommune N.Y. Corp. was disposed of during 2025.

**Hong Kong**

Ucommune HK and Melo Hongkong Limited were established in Hong Kong and are subject to a two-tiered income tax rate for taxable income earned in Hong Kong effectively since April 1, 2018. The first 2,000 Hong Kong dollars of profits earned by a company is subject to be taxed at an income tax rate of 8.25%, while the remaining profits will continue to be taxed at the existing tax rate, 16.5%. No provision for Hong Kong profits tax has been made in the consolidated financial statements as it has no assessable profit for the years ended December 31, 2023, 2024 and 2025.

**Singapore**

Ucommune Technology Pte. Ltd. was established in Singapore and is subject to Singapore corporate income taxes at the rate of 17% for the years ended December 31, 2023, 2024 and 2025. Ucommune Technology Pte. Ltd. was disposed of during 2025.

**PRC**

Effective from January 1, 2008, a new Enterprise Income Tax Law, or ("the New EIT Law"), combined the previous income tax laws for foreign invested and domestic invested enterprises in the PRC by the adoption of a unified tax rate of 25% for most enterprises with the following exceptions.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2023, 2024 and 2025, some PRC subsidiaries are qualified small and low-profit enterprises as defined, and thus they are eligible for the above preferential tax rates for small and low-profit enterprises.

The income tax provision consists of the following components:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| **Current income tax expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;PRC | 8281 | 7395 | 93 |
| &nbsp;&nbsp;&nbsp;U.S. |  | (1026) |  |
| **Total current income tax expense** | **8281** | **6369** | **93** |
| **Deferred income tax expense** | **—**  | **—**  | **—**  |
| **Total income tax expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;PRC | 8281 | 7395 | 93 |
| &nbsp;&nbsp;&nbsp;U.S. |  | (1026) |  |
| **Total** | **8281** | **6369** | **93** |

---

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Group's deferred tax assets were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Deferred tax assets: |  |  |
| Allowance for credit losses | 1242 | 1509 |
| Impairment loss on long-lived assets and long-term prepaid expenses | 18601 | 17978 |
| Impairment loss on long-term investments | 1036 |  |
| Accrued liabilities | 2155 | 1705 |
| Deductible temporary difference related to advertising expenses | 2 | 6 |
| Net operating loss carrying forwards | 23967 | 15565 |
| **Total deferred tax assets** | **47003** | **36763** |
| Less: valuation allowance | (47003) | (36763) |
| **Deferred tax assets, net** |  |  |

---

Net change in the valuation allowance of deferred tax assets are summarized as follows:

---

| | |
|:---|:---|
|  | **RMB** |
| Net change of valuation allowance of deferred tax assets |  |
| **Balance as of December 31, 2023** | 399929 |
| Additions-change to tax expense | 79368 |
| NOL Reductions / expirations | (432294) |
| **Balance as of December 31, 2024** | **47003** |
| Additions-change to tax expense | 1536 |
| Decrease-change to tax expense | (3274) |
| Addition due to acquisition | 1501 |
| NOL Reductions / expirations | (10003) |
| **Balance as of December 31, 2025** | **36763** |

---

The aggregate NOLs as of December 31, 2025 was RMB147,604 deriving from entities in the PRC, Hong Kong and U.S. The aggregate NOLs as of December 31 2024 was RMB195,272 deriving from entities in the PRC, Hong Kong, Singapore and U.S.

As of December 31, 2025 and 2024, the certain entities of the Company had PRC net operating tax loss carry forwards of RMB119,694 and RMB132,974, respectively. As of December 31, 2025 and 2024, the certain entities of the Company had Hong Kong net operating tax loss carry forwards of RMB26,022 and RMB57,157, respectively. As of December 31, 2025 and 2024, the certain entities of the Company had Singapore net operating tax loss carry forwards of nil and RMB3,253, respectively. As of December 31, 2025 and 2024, the certain entities of the Company had U.S. net operating tax loss carry forwards of RMB1,888 and RMB1,888, respectively. The cumulative net operating loss in the PRC can be carried forward for five years, to offset future net profits for income tax purposes. The NOLs in PRC will start to expire from in 2026 through 2030 if they are not used. The tax losses in Hong Kong, Singapore and U.S. can be carried forward without an expiration date.

The Group does not file combined or consolidated tax returns, therefore, losses from individual subsidiaries of the Group may not be used to offset other subsidiaries' earnings within the Group. Valuation allowance is considered on each individual subsidiary basis. There were valuation allowance of RMB47,003 and RMB36,763 as of December 31, 2024 and 2025, respectively, in respect of all deferred tax assets as it is considered more likely than not that the relevant deferred tax assets will not be realized in the foreseeable future.

As a result of the Tax Act, the Company has evaluated whether it has an additional tax liability from the Global Intangible Low Taxed Income ("GILTI") inclusion on current earnings and profits of its foreign controlled corporations. The law also provides that corporate taxpayers may benefit from a 50% reduction in the GILTI inclusion, which effectively reduces the tax rate on the foreign income to 10.5%. The GILTI inclusion further provides for a foreign tax credit in connection with the foreign taxes paid. As of December 31, 2025 and 2024, the Company does not have any aggregated positive tested income; and as such, did not record a liability for GILTI tax.

The Company will account for future tax liability arising from Global Intangible Low-Taxed Income, if any, as a period cost.

The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes.

The Group has concluded that there are no significant uncertain tax positions requiring recognition in financial statements for the years ended December 31, 2023, 2024 and 2025. The Group did not incur any significant interest and penalties related to potential underpaid income tax expenses and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months. The Group has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future years.

According to the PRC Tax Administration and Collection Law, the tax authority may require the taxpayer or the withholding agent to make delinquent tax payment within three years if the underpayment of taxes is resulted from the tax authority's act or error. No late payment surcharge will be assessed under such circumstances. The statute of limitation will be three years if the underpayment of taxes is due to the computational errors made by the taxpayer or the withholding agent. Late payment surcharge will be assessed in such case. The statute of limitation will be extended to five years under special circumstances which are not clearly defined (but an underpayment of tax liability exceeding RMB100 is specifically listed as a "special circumstance"). The statute of limitation for transfer pricing related issue is ten years. There is no statute of limitation in the case of tax evasion.

Therefore, the Group is subject to examination by the PRC tax authorities based on the above.

The components of (loss) profit before income taxes are summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| PRC | (29001) | (115268) | (24830) |
| Cayman Islands | (13416) | 30210 | (84015) |
| BVI | 49082 | 5380 | 41154 |
| Hong Kong | (8657) | 16655 | 31212 |
| Singapore | (1372) | (1164) |  |
| **Total** | **(3364)** | **(64187)** | **(36479)** |

---

The reconciliation of the effective tax rate and the statutory income tax rate applicable to PRC operations was as follow:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Loss before provision for income taxes and before loss from equity method investments | (3364) | (64187) |
| Income tax benefit computed at an applicable tax rate of 25% | (841) | (16047) |
| Non-deductible expenses related to share-based compensation | 6431 | 2833 |
| Non-deductible expenses on debt waive for the dissolved HK subsidiaries | 18868 |  |
| Non-taxable gain related to disposal gain on subsidiaries | (28198) |  |
| Non-taxable gain on dissolution of HK subsidiaries | (23071) |  |
| Effect of other non-deductible items | 5136 | 403 |
| Effect of preferential tax rate | (30497) | 2328 |
| Effect of income tax rate difference in other jurisdictions | (2054) | (11594) |
| Effect of change in tax rate | 18907 |  |
| Prior year true up | (41372) | (50922) |
| Change in valuation allowance | 84972 | 79368 |
| **Total** | **8281** | **6369** |

---

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> December 31, 2025** | **For the years ended<br> December 31, 2025** |
|  | **RMB** | **%** |
| **Loss before income tax** | **(36479)** | **100.0%** |
| PRC statutory income tax rate | 25% | 25% |
| Computed income tax benefit with PRC statutory income tax rate | (9120) | 25.0% |
| Domestic tax effects |  |  |
| &nbsp;&nbsp;&nbsp;Preferential tax rate | 2085 | (5.7)% |
| &nbsp;&nbsp;&nbsp;Non-deductible expenses related to share-based compensation | 751 | (2.1)% |
| &nbsp;&nbsp;&nbsp;Other non-deductible expenses | 30 | (0.1)% |
| &nbsp;&nbsp;&nbsp;Changes in valuation allowance | (6076) | 16.7% |
| &nbsp;&nbsp;&nbsp;Expired NOL | 1148 | (3.1)% |
| &nbsp;&nbsp;&nbsp;NOL decrease due to disposal of subsidiaries | 7289 | (20)% |
| &nbsp;&nbsp;&nbsp;NOL increase due to acquisition | (1501) | 4.1% |
| Foreign tax effects |  |  |
| &nbsp;&nbsp;&nbsp;Hong Kong |  |  |
| &nbsp;&nbsp;&nbsp;- Statutory tax rate difference between Hong Kong and PRC | (2653) | 7.3% |
| &nbsp;&nbsp;&nbsp;- Changes in valuation allowances | (2575) | 7.1% |
| &nbsp;&nbsp;&nbsp;Singapore |  |  |
| &nbsp;&nbsp;&nbsp;- Changes in valuation allowances | (553) | 1.5% |
| &nbsp;&nbsp;&nbsp;- NOL decrease due to disposal of subsidiaries | 553 | (1.5)% |
| &nbsp;&nbsp;&nbsp;Cayman Islands |  |  |
| &nbsp;&nbsp;&nbsp;- Statutory tax rate difference between Cayman Islands and PRC | 21004 | (57.7)% |
| &nbsp;&nbsp;&nbsp;BVI |  |  |
| &nbsp;&nbsp;&nbsp;- Statutory tax rate difference between BVI and PRC | (10289) | 28.2% |
| &nbsp;&nbsp;&nbsp;U.S. |  |  |
| &nbsp;&nbsp;&nbsp;- Changes in valuation allowances | (1036) | 2.8% |
| &nbsp;&nbsp;&nbsp;- NOL decrease due to disposal of subsidiaries | 1036 | (2.8)% |
| **Effective tax rate** | **93** | **(0.3)%** |

---

The comparative period of the years ended December 31, 2024 and 2023 have not been restated and follows the prior disclosure requirements in ASC 740, while the current period of the year ended December 31, 2025 reflects the new disclosures requirement under ASU 2023-09. The effect of different tax rates in other jurisdictions is now included in foreign tax effects, and the changes in valuation allowance is now separated in domestic tax effects and foreign tax effects as there are a valuation allowances in PRC, Hong Kong, Singapore and U.S.

Income taxes paid by jurisdiction are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| PRC | 58 |  | 93 |
| **Total** | **58** |  | **93** |

---

New EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed a resident enterprise, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income tax at a rate of 25% with the statute subject to the determination by PRC tax authorities.

If the Company were to be a non-resident for PRC tax purpose, dividends paid to it out of profits earned by PRC subsidiaries after January 1, 2008 would be subject to 10% withholding tax, if no tax treaty is applicable. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate may be reduced to 5%, if the investor holds at least 25% in the Foreign Invested Enterprise ("FIE"); or 10%, if the investor holds less than 25% in the FIE.

**15. REDEEMABLE CONVERTIBLE PREFERRED SHARES AND DETACHABLE FORWARD SALE CONTRACT LIABILITY**

On December 23, 2025, the Company entered into a securities purchase agreement (the "Preferred Securities Purchase Agreement") with JAK COWORK II LLC (the "Buyer" or the "Holder"), pursuant to which the Company has agreed to issue and sell to the Buyer up to 5,000 Series A Convertible Preferred Shares (the "Preferred Shares") at the purchase price of US$1,000.00 for each Preferred Share (the "Preferred Shares Issuance"). The Preferred Shares Issuance is structured in two tranches and the closing of each tranche under the Preferred Securities Purchase Agreement is conditioned upon customary closing conditions and, in the case of the second closing, approval by the Company's shareholders of an increase to the Company's share capital and authorization for a share consolidation of the Company's Class A Ordinary Shares. In the event that the second closing shall not have occurred within one hundred and twenty (120) days of the first closing date, then each party shall have the right to terminate its obligations under this agreement solely with respect to the second closing and the second closing at any time on or after the close of business on such date.

In connection with the execution of the Preferred Securities Purchase Agreement, the Company adopted a Certificate of Designations (the "Certificate of Designations") of Preferred Shares, par value US$0.024 per share, creating the Preferred Shares and providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Preferred Shares, which has become effective upon such adoption.

On December 23, 2025, the closing of the first tranche of the Preferred Shares Issuance occurred and the Company issued 2,750 Preferred Shares to the Buyer at the purchase price of US$1,000.00 per Preferred Share at a total consideration of RMB 19,394 (US$2,750).

On February 12, 2026, the closing of the second tranche of the Preferred Shares Issuance occurred and the Company issued 2,250 Preferred Shares to the Buyer at the purchase price of US$1,000.00 per Preferred Share at a total consideration of RMB 15,628 (US$2,250).

The Group has classified the Preferred Shares in the mezzanine equity of the consolidated balance sheets as they are contingently redeemable at the option of the holders. Each issuance of preferred shares is recognized at the respective fair value at the issuance date.

The Group recognizes changes in the redemption value immediately as Bankruptcy Triggering Event as defined below occurs and adjusts the carrying amount of the redeemable preferred shares to equal the redemption value at the end of each reporting period as if it was the redemption date for the redeemable equity. As of December 31, 2025, it was not probable that the Preferred Shares will become redeemable. Therefore, the Group did not make accretion adjustment to the carrying value of the Preferred Shares.

The arrangement for the second tranche of 2,250 Preferred Shares to the Buyer at the purchase price of US$1,000.00 per Preferred Share at a future date was accounted for as forward sale contract at fair value, separately from the issued redeemable convertible preferred shares, in accordance with ASC 480 — Distinguishing Liabilities from Equities.

The forward sale contract liability is measured at fair value initially and remeasured at each reporting date as well as the date of issuance of new preferred shares according to the agreement, with changes in fair value recorded in the consolidated statement of operations. Fair value change from the issuance date to December 31, 2025 is nil as the fair value is approximately the same.

The issuance cost for the sales of preferred shares equity is allocated between the redeemable convertible preferred share and the forward sale contract liability in proportion according to the issuance date fair value. Issuance cost allocated to redeemable convertible preferred shares was recorded as a deduction against the mezzanine equity in the consolidated balance sheet. The issuance costs for the first closing of Series A redeemable convertible preferred shares are RMB 1,284. Issuance cost allocated to forward sale contract liability of RMB 1,117 is recorded as general and administrative expense in the consolidated statement of operations. A portion of the issuance costs is deferred for the future closing of the forward sale contract and recorded as deferred offering costs included in prepaid expenses and other current assts on the consolidated balance sheet as of December 31, 2025.

The movement of the Preferred Shares is set out as below

---

| | | |
|:---|:---|:---|
|  | **Series A Convertible <br> Preferred Shares** | **Series A Convertible <br> Preferred Shares** |
|  | **Shares** | **Amount** |
|  | | **RMB** |
| **Balance as of December 31, 2024** |  |  |
| Issuance of the Preferred Shares | 2750 | 1241 |
| Accrual of redeemable convertible preferred shares dividends |  | 25 |
| Foreign exchange impact |  | (4) |
| **Balance as of December 31, 2025** | **2750** | **1262** |

---

***Key terms of the Preferred Shares***

*Conversion*

The holders of preferred shares have the right to convert any or all of their holdings of preferred shares into Class A Ordinary Shares at a conversion price (the "Conversion Price") equal to the lower of (x) the fixed conversion price (initially US$0.7454 per share, subject to reset every three months based on the then-current market price of the Class A Ordinary Shares over a specified measurement period) and (y) 85% of the market price of the Class A Ordinary Shares over a specified measurement period. In no event will the conversion price be less than the floor price (initially US$0.149 per share, subject to periodic downward resets as specified in the Certificate of Designations). Notwithstanding the foregoing, except as the Company may consent to in writing, prior to May 15, 2026, the Company shall not issue Class A Ordinary Shares at a conversion price below US$1.00 per share.

*Redemption rights*

Upon the occurrence of a Bankruptcy Triggering Event (including nine circumstances such as the Company fails to pay, or states that it is unable to pay, or is unable to pay, its debts generally as they become due etc.), the Company shall immediately redeem the applicable Preferred Shares in cash for the Bankruptcy Triggering Event Redemption Price (as defined below).

Bankruptcy Triggering Event Redemption Price means a price equal to the greater of (A) 125% of the product of the Conversion Base Amount (as defined below) to be redeemed and (B) the product of the Conversion Rate (as defined below) with respect to the Conversion Base Amount in effect at the time of the applicable Bankruptcy Triggering Event multiplied by 125% of the greatest Closing Sale Price of the Class A Ordinary Shares on any Trading Day (as defined below) during the period commencing on the date immediately preceding such Bankruptcy Triggering Event and ending on the date the Company makes the entire payment required to be made.

Conversion Base Amount means the sum of (1) $1,000 per share and the aggregate amount of any paid-in-kind dividends thereof plus (2) all accrued and unpaid dividends thereon as of such date of determination plus (3) any other amounts owed to the Holder.

Conversion Rate means the number of the Company's Class A Ordinary Shares issuable upon conversion of any Series A Preferred Share determined by dividing (x) 125% of the Conversion Base Amount of such Series A Preferred Share by (y) the Conversion Price.

At any time, the Company shall have the right to redeem all, or any part pro rata based on the number of the Preferred Shares then held by the Holders, of the Preferred Shares then outstanding on the Company optional redemption date.

*Voting rights*

Holders of the Preferred Shares shall have no voting rights, except as required by law (including without limitation, the Companies Act) and as expressly provided in the Certificate of Designations.

*Liquidation preference*

In the event of a liquidation event, the Holders shall be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its shareholders (the "Liquidation Funds"), before any amount shall be paid to the holders of any shares other than the Preferred Shares, an amount per Preferred Share equal the greater of (A) 125% of the Conversion Base Amount of such Preferred Share on the date of such payment and (B) the amount per share such Holder would receive if such Holder converted such Preferred Share into Class A Ordinary Shares immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders, then each Holder shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Preferred Shares. All the preferential amounts to be paid to the Holders shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the holders of shares of any shares other than the Preferred Shares in connection with a liquidation event.

*Dividends*

From and after the first date of issuance of any Preferred Shares, dividends on the Preferred Shares shall commence accruing at the dividend rate (6% per annum) and shall be payable semi-annually with the first dividend date being July 1, 2026. Dividends shall be payable on each dividend date, by increasing the stated value of each such Preferred Share, on a dollar-for-dollar basis, by such aggregate amount of dividends payable on such dividend date.

Prior to the payment of dividends on a dividend date, dividends on the Preferred Shares shall accrue at the dividend rate and be payable by way of inclusion of the dividends in the Conversion Base Amount on each conversion date or upon any redemption or any payment upon any Bankruptcy Triggering Event or in connection with any Triggering Event. In the event that such Triggering Event is subsequently cured (and no other Triggering Event then exists), the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure.

Additional dividends may be declared by the Board on the Preferred Shares, from time to time, in its sole and absolute discretion. No such dividend was declared during the years ended December 31, 2025.

**16. SHAREHOLDER'S EQUITY**

The following paragraphs are presented on a retroactive basis to reflect the Company's share consolidation on April 21, 2022 and November 29, 2023.

**Ordinary shares**

Upon the closing of the underwritten public offering on February 2, 2021, the Company issued 20,577 Class A ordinary shares with net proceeds of RMB111,559 after deduction of underwriting discounts and commissions and other offering expenses of which RMB18,244 was allocated to the issuance of new warrants at a combined offering.

On May 8, 2021, the Company issued 8,334 Earn-out Shares to certain shareholders for the revenue of the fiscal year of 2020 satisfied the corresponding condition.

On August 23, 2022, the Company was authorized to issue 41,667 Class A ordinary shares held by the Company itself reserved for future issuance under the 2020 Share Incentive Plan.

On December 15, 2023, the Company was authorized to issue 1,000,000 Class A ordinary shares held by the Company itself reserved for future issuance under the 2020 Share Incentive Plan.

By the end of December 31, 2025, the Company was authorized to issue 2,170,000 Class A ordinary shares held by the Company itself reserved for future issuance under the 2020 Share Incentive Plan.

From October 2022 to July 2023, the Company issued 234,121 Class A ordinary shares with an aggregate ordinary share value of RMB39 in exchange for conversion of convertible bond.

On November 29, 2023, the Company increased authorized share capital from (i) 20,000,000 Class A ordinary shares of par value of US$0.002 each and (ii) 5,000,000 Class B ordinary shares of par value of US$0.002 each, to (i) 240,000,000 Class A ordinary shares of par value of US$0.002 each and (ii) 60,000,000 Class B ordinary shares of par value of US$0.002 each, by creating additional 220,000,000 authorized but unissued Class A ordinary shares and 55,000,000 authorized but unissued Class B ordinary shares.

Effective on November 29, 2023, a share consolidation of 12 ordinary shares with par value of US$0.002 each in the Company's issued and unissued share capital into one ordinary share with par value of US$0.024, so that the authorized share capital of the Company will be (i) 20,000,000 Class A ordinary shares of par value of US$0.024 each and (ii) 5,000,000 Class B ordinary shares of par value of US$0.024 each. As a result of the Share Consolidation, each 12 pre-consolidation ordinary shares outstanding will automatically combine and convert to one issued and outstanding ordinary share without any action on the part of the shareholders, resulted in 34,224 additional round-up shares.

On November 29, 2023, the Company changed the voting power of the Class B ordinary shares of par value of US$0.024 each (the "Class B Ordinary Shares") from thirty-five (35) votes for each Class B Ordinary Share to fifty-five (55) votes for each Class B Ordinary Share.

On March 6, 2024, the Company entered into a share subscription agreement with Maodq Limited, pursuant to which Maodq Limited, a limited liability company owned by Dr. Daqing Mao, subscribed for 80,000 newly issued Class B Ordinary Shares of the Group at a per share subscription price of US$3.00, for an aggregate cash consideration of US$240 (RMB1,705).

**Warrants**

As of December 31, 2025, there were 10,352,236 warrants outstanding (including Prior Warrants, New Warrants) to purchase up to an aggregate of 33,399 Class A ordinary shares at exercise prices, which consist of 4,673,225 warrants (including public warrants and private warrants, collectively referred to as the "Prior Warrants") outstanding before the SPAC Transaction to purchase 9,736 Class A ordinary shares, 5,679,011 warrants issued upon the closing of the Underwritten Public Offering on February 2, 2021 (the "New Warrants") to purchase 23,663 Class A ordinary shares.

*<u>Prior Warrants</u>*

Each whole public warrant that was issued with units in the initial public offering ("IPO") of Orisun in 2019 is exercisable for 0.004167 ordinary share at a price of US$2,760.00 per full share (after considering the effect of share consolidation on April 21, 2022 and November 29, 2023). No fractional shares will be issued upon exercise of the public warrants. The warrants became exercisable on the date of the SPAC Transaction. No public warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the public warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within 90 days from the consummation of the SPAC Transaction, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the public warrants on a cashless basis pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act provided that such exemption is available. If an exemption from registration is not available, holders will not be able to exercise their public warrants on a cashless basis. The public warrants will expire five years from the consummation of the SAPC Transaction or earlier upon redemption or liquidation.

The Company may redeem the outstanding public warrants, in whole and not in part, at a price of US$2.4 per warrant (after considering the effect of share consolidation on April 21, 2022 and November 29, 2023):

● at any time while the warrants are exercisable,

● upon not less than 30 days' prior written notice of redemption to each warrant holder,

● if, and only if, the reported last sale price of the shares of common stock equals or exceeds US$3,960.00 per share, for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to warrant holders, and

● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the public warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a "cashless basis," as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

The private warrants are identical to the public warrants underlying the units sold in the initial public offering, except that the private warrants will be exercisable on a cashless basis at the holder's option and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers or their permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.

*<u>New Warrants</u>*

On February 2, 2021, the Company completed a follow-on offering of 20,577 Class A ordinary shares and warrants to purchase 20,577 Class A ordinary shares at a combined offering price of US$972.00 for one ordinary share and one firm warrant ("New Warrants") to purchase one ordinary share, or the base offering. The warrants will expire on February 2, 2026. The underwriter in this offering exercised its option in full to purchase an additional 740,740 warrants to purchase ordinary shares at an offering price of US$2.4 per warrant, which closed concurrently with the base offering.

No fractional shares will be issued upon exercise of the new warrant. No new warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the new warrants and a current prospectus relating to such shares of common stock.

The new Warrants are classified as a liability and the fair value allocated to the new Warrants was nil and nil as of December 31, 2024 and 2025, respectively. The warrants liability will be re-measured at each reporting period until the warrants are exercised or expire and any changes will be recognized in the statement of operations. No warrants were exercised as of December 31, 2025.

**17. CONVERTIBLE BOND AND DETACHABLE WARRANTS**

The following paragraphs are presented on a retroactive basis to reflect the Company's share consolidation on April 21, 2022 and November 29, 2023.

On January 26, 2022, the Company entered into and closed a private placement pursuant to a securities purchase agreement (the "Securities Purchase Agreement") with JAK Opportunities LLC (the "Purchaser") for the offering of a US$3,000 principal amount 8% senior convertible bond (the "Bond"), warrant (the "Series A Warrant") to purchase Class A ordinary shares of the Company at an exercise price of US$972 per ordinary share, warrant (the "Series B Warrant") to purchase Class A ordinary shares at an exercise price of US$240 per ordinary share, and warrant (the "Series C Warrant", together with the Series A Warrant and the Series B Warrant, the "JAK Warrants") to purchase Class A ordinary shares at an exercise price of US$972 per ordinary Share. The net proceeds to the Company from the offering were approximately US$2,635.

The Bond matures on January 25, 2023 and pays interest in cash at the rate of 8.0% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on April 1, 2022. The Company may also elect to pay accrued interest in Class A ordinary shares, at a rate of 12.0% per annum, assuming a conversion rate equal to the lesser of (a) the conversion price then in effect or (b) the average of the volume weighted average price of Class A ordinary shares for the five consecutive trading days ending on the applicable interest payment date. The Bond is convertible at the option of the purchaser into Class A ordinary shares equal to 125% of the principal amount of the Bond at an initial conversion price equal to the lesser of (i) US$240, subject to certain adjustments, and (ii) 100% of the lowest daily volume weighted average price of Class A ordinary shares during the ten consecutive trading days prior to the conversion date.

On March 1, 2022, the Company and the Purchaser entered amendment agreements to the Securities Purchase Agreement, Bond, and JAK Warrants to set a floor price of US$72.00 per Ordinary Share for the conversion price of the Bond and exercise price of the Warrants.

On August 29, 2022, the Company and the Purchaser entered amendment agreements to the Securities Purchase Agreement, Bond, and JAK Warrants to change the floor price to US$54.00 per Ordinary Share from US$72.00 per Ordinary Share as amended on March 1, 2022 for the conversion price of the Bond and exercise price of the Warrants.

On October 25, 2022, the Company and the Purchaser entered amendment agreements to the Securities Purchase Agreement, Bond, and JAK Warrants to change the floor price to US$27.60 per Ordinary Share from US$54.00 per Ordinary Share as amended on August 29, 2022 for the conversion price of the Bond and exercise price of the Warrants.

On January 24, 2023, the Company and the Purchaser entered amendment agreements to the Securities Purchase Agreement, Bond, and JAK Warrants to change the floor price to US$15.60 per Ordinary Share from US$27.60 per Ordinary Share as amended on October 25, 2022 for the conversion price of the Bond and exercise price of the Warrants.

On June 7, 2023, the Company and the Purchaser entered amendment agreements to the Securities Purchase Agreement, Bond, and JAK Warrants to change the floor price to US$8.40 per Ordinary Share from US$15.60 per Ordinary Share as amended on January 24, 2023 for the conversion price of the Bond, while the exercise price of the Warrants shall remain at US$15.60 per Ordinary share. In addition, the Termination Date for purposes of the Series B Warrant shall be amended and restated to December 31, 2023.

On January 30, 2024, the Company and the Purchaser entered amendment agreement to the Warrants to amend and restate the Termination Date for purposes of the Series B Warrant to December 31, 2024 for the Ordinary Shares issuable upon exercise of the Series B Warrant that are registered under the registration statement on Form F-3 of Ucommune International Ltd (File No. 333-257664) (the "F-3 Registration Statement"), and to 12 months following the effectiveness of a registration statement to be filed under the Securities Act registering the remaining unregistered Ordinary Shares issuable upon exercise of the Series B Warrant for such remaining Ordinary Shares. With respect to the Ordinary Shares issuable upon exercise of each of the Warrants that are registered under the F-3 Registration Statement, the Floor Price shall be amended and restated to US$3.37 per Ordinary Share.

From October 2022 to July 2023, the Company issued 234,121 Class A ordinary shares in exchange for conversion of US$2,275 of principle balance on a convertible bond and US$387 of accrued interest (Approximately RMB18,892 in total).

On March 12, 2024, the Purchaser exercised 20,000 Series B Warrant at an exercise price of US$3.37 per Ordinary Share to purchase 25,000 Class A ordinary shares, for an aggregate cash consideration of US$61 (RMB430).

As of December 31, 2025, there are outstanding JAK Warrants to purchase an aggregate of 3,894,660 Class A ordinary shares.

No fractional shares will be issued upon exercise of the new warrant. No new warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the new warrants and a current prospectus relating to such shares of common stock.

The JAK Warrants are classified as a liability. The Company uses the binomial lattice model to value JAK Warrants and the fair value allocated to the JAK Warrants at the date of issuance was RMB11,020. The warrants liability will be re-measured at each reporting period until the warrants are exercised or expire and any changes will be recognized in the consolidated statement of operations. The fair value change gain of the warrant liability was RMB9,099, RMB4,949 and RMB463 for the year ended December 31, 2023, 2024 and 2025, respectively.

Subsequently on February 10, 2026, the Group signed a supplemental agreement with the Purchaser to exchange the JAK Warrants into the Company's Series A convertible preferred shares without redemption right as those discussed in Note 15.

**18. EMPLOYEE DEFINED CONTRIBUTION**

Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund, unemployment insurance and other welfare benefits are provided to employees. Chinese labor regulations require that the Group's PRC entities make contributions to the government for these benefits based on certain percentages of the employees' salaries. The Group has no legal obligation for the benefits beyond the contributions made. The total amount for such employee benefits, which was expensed as incurred, was RMB9,338, RMB6,053 and RMB2,851 for years ended December 31, 2023, 2024 and 2025, respectively.

**19. SHARE-BASED COMPENSATION**

The following paragraphs are presented on a retroactive basis to reflect the Company's share consolidation on November 29, 2023.

***2019 Plan***

On September 19, 2019, September 1, 2020 and October 13, 2020, Ucommune Group granted 57,793, 7,683 and 797 share options to Ucommune Group's employees and non-employees (the "Grantees") at an exercise price of US$0.024 per share respectively. The expiration date of the share options was the 10<sup>th</sup> anniversary of the date of grant. The options will vest in accordance with four types of vesting schedules set out in the respective option award agreement.

For type 1, 100% of the awarded options shall vest and become exercisable upon the date of the Company's IPO.

For type 2, 50% of the awarded options shall vest and become exercisable upon the date of the Company's IPO; 50% of the options shall vest and become exercisable on the first anniversary date of the Company's IPO.

For type 3, 50% of the awarded options shall vest and become exercisable upon the date of the Company's IPO; 30% of the options shall vest and become exercisable on the first anniversary date of the Company's IPO; 20% of the options shall vest and become exercisable on the second anniversary date of the Company's IPO.

For type 4, 50% of the awarded options shall vest and become exercisable on the first anniversary date of the Company's IPO; 30% of the options shall vest and become exercisable on the second anniversary date of the Company's IPO; 20% of the options shall vest and become exercisable on the third anniversary date of the Company's IPO.

On September 1, 2020, the vesting schedule of the award options for certain employees and non-employees has been changed from "50% of the awarded options shall vest and become exercisable upon the date of the Company's IPO; 30% of the options shall vest and become exercisable on the first anniversary date of the Company's IPO; 20% of the options shall vest and become exercisable on the second anniversary date of the Company's IPO"(Type 3) to "100% of the awarded options shall vest and become exercisable upon the date of the Company's IPO"(Type 1).

***2020 Plan***

In connection with the SPAC Transaction, the Company adopted the 2020 Plan on November 17, 2020 (the "Replacement Date"), which is also the effective date of the SAPC Transaction to assume and replace the 2019 Plan. The Company rolled over options granted under the 2019 Plan with nearly the same terms. One option granted under the 2019 Plan was assumed and replaced by 0.4783 option under the 2020 Plan and the exercise price of the options was increased from US$0.024 per share to US$0.05018 (0.024 divided by 0.4783) per share. The 2020 Plan provides for the issuance of up to an aggregate of 29,953 of Class A ordinary shares. On August 19, 2022, the Company adopted a second amendment to the 2020 Plan to increase the maximum aggregate number of shares that may be issued thereunder by 41,667 Class A ordinary shares from 29,953 Class A ordinary shares to 71,620 Class A ordinary shares. On December 15, 2023, the Company adopted a third amendment to the 2020 Plan to increase the maximum aggregate number of shares that may be issued thereunder by 1,000,000 Class A ordinary shares from 71,620 Class A ordinary shares to 1,071,620 Class A ordinary shares. On February 20, 2024, the Company adopted a fourth amendment to the 2020 Plan to increase the maximum aggregate number of shares that may be issued thereunder by 3,000,000 Class A ordinary shares from 1,071,620 Class A ordinary shares to 4,071,620 Class A ordinary shares. On August 7, 2025, the Company adopted a fifth amendment to the 2020 Plan to increase the maximum aggregate number of shares that may be issued thereunder by 2,000,000 Class A ordinary shares from 4,071,620 Class A ordinary shares to 6,071,620 Class A ordinary shares. 100% of the share options shall vest and become exercisable upon the date of grant.

The fair value of option granted was estimated on the date of grant using the binominal option- pricing model with the following assumptions used for grants during the applicable periods:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Risk-free interest rate | 3.54% | 3.85% - 4.49 | 4.02% - 4.16 |
| Volatility | 102.39% | 50.78% - 51.43 | 35.92% - 38.43 |
| Dividend yield |  |  |  |
| Life of options (in years) | 10 | 10 | 10 |
| Fair value of underlying ordinary shares | 54.21 | 8.84 - 28.26 | 6.75 - 7.26 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Risk-free interest rate

Risk-free interest rate was estimated based on the daily treasury long term rate of the U.S. Treasury Department with a maturity period close to the expected term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Volatility

The volatility of the underlying ordinary shares during the lives of the options was estimated based on the historical stock price volatility of comparable listed companies including the Company itself over a period comparable to the expected term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Dividend yield

The dividend yield was estimated by the Group based on its expected dividend policy over the expected term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Life of options

Life of options is extracted from option agreements.

Prior to the consummation of the SPAC Transaction, the estimated fair value of the ordinary shares underlying the options as of the valuation date was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal of the Company, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation date was determined with the assistance of an independent third-party appraiser. The fair values of the underlying ordinary shares on each date of the grant after November 17, 2020, were the closing prices of the Company's ordinary shares traded in the stock exchange.

A summary of options activities during the years ended December 31, 2024 and 2025 is presented below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Number of<br> options** | **Weighted<br> average<br> exercise <br> price<br> USD** | **Weighted<br> average<br> grant<br> date fair<br> value<br> RMB** | **Weighted<br> average<br> remaining<br> contractual<br> term<br> (years)** | **Aggregate<br> intrinsic<br> value** |
| Options outstanding at December 31, 2023 | 43366 | 0.0504 | 5289.26 | 7.45 | 1116 |
| Granted | 1900000 | 0.00021 | 17.37 |  |  |
| Exercised | (1387682) | 0.00021 | 20.01 |  |  |
| Forfeited | (3598) | 0.00441 | 684.41 |  |  |
| Options outstanding at December 31, 2024 | 552086 | 0.00132 | 419.51 | 9.59 | 4652 |
| Granted | 2170000 | 0.00021 | 7.06 |  |  |
| Exercised | (2412083) | 0.00021 | 9.00 |  |  |
| Forfeited | (42701) | 0.00051 | 58.53 |  |  |
| Options outstanding at December 31, 2025 | 267302 | 0.00206 | 704.90 | 9.31 | 1183 |
| Options vested as of December 31, 2025 | 267302 | 0.00206 | 704.90 | 9.31 | 1183 |

---

The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying awards and the closing stock price of US$0.63 of the Company's ordinary share on December 31, 2025.

The fair values of the options granted for the years ended December 31, 2024 and 2025 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** |
|  | **2024** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** |
| Weighted average grant date fair value of option per share |  | 17.37 |  | 7.06 |
| Aggregate grant date fair value of options |  | 33009 |  | 15318 |

---

As of December 31, 2025, there was no unrecognized compensation cost related to unvested share options.

Total share-based compensation expense of the above-mentioned incentive plan for the years ended December 31, 2023, 2024 and 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Cost of revenue | 887 | (4119) | 1010 |
| Selling and marketing | 1572 |  |  |
| General and administrative | 23263 | 15452 | 14012 |
| **Total share-based compensation expense** | **25722** | **11333** | **15022** |

---

**20. NET LOSS PER SHARE**

Basic and diluted net loss per share for each of the year presented were calculated as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Numerator: |  |  |  |
| Net income/(loss) attributable to shareholders from discontinued operations | 1952 | (3452) | (1367) |
| Denominator: |  |  |  |
| Weighted average ordinary shares used in computing basic and diluted income/(loss) per share<sup>(i) (ii)</sup> | 540836 | 1172103 | 2697970 |
| Basic and diluted net income/(loss) per share of discontinued operations<sup>(i) (ii)</sup> | 3.61 | (2.95) | (0.51) |
| Numerator: |  |  |  |
| Net loss attributable to Ucommune International Ltd.'s shareholders from continuing operations | (7084) | (66078) | (36475) |
| Less: Redeemable convertible preferred shares dividends |  |  | 25 |
| Net loss attributable to Ucommune International Ltd.'s common shareholders from continuing operations | (7084) | (66078) | (36500) |
| Denominator: |  |  |  |
| Weighted average ordinary shares used in computing basic and diluted loss per share<sup>(i) (ii)</sup> | 540836 | 1172103 | 2697970 |
| Basic and diluted net loss per share of continuing operations<sup>(i) (ii)</sup> | (13.10) | (56.38) | (13.53) |

---

(i) For the years ended December 31, 2023, 2024 and 2025, the Group has 43,366, 552,086 and 267,302 ordinary shares issuable upon the exercise of share options as potentially dilutive ordinary shares, nil , nil and 5,824,850 ordinary shares issuable upon the conversion of redeemable convertible preferred shares, 9,736, 9,736 and nil ordinary shares issuable upon the exercise of the Prior Warrants, 23,663, 23,663 and 23,663 ordinary shares issuable upon the exercise of the New Warrants, 12,240,358, 11,979,941 and 3,894,660 ordinary shares issuable upon the exercise of the JAK Warrants are excluded from the calculation, as their effects would be anti-dilutive.

(ii) The ordinary shares are presented on a retroactive basis to reflect the Company's share consolidation on November 29, 2023, to effect a share consolidation of 12 ordinary shares with par value of US$0.002 each in the Company's issued and unissued share capital into one ordinary share with par value of US$0.024 each of the Company.

**21. RELATED PARTIES BALANCES AND TRANSACTIONS**

The Group had the following related parties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Companies are influenced significantly by the controlling
shareholder and his spouse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Companies are influenced significantly by the controlling
shareholder and his spouse. Ucommune Venture Group became the related party of the Group since October 26, 2024 due to the disposal of
Ucommune Venture and its subsidiaries through termination of VIE Agreements. (Note 1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I. Balances:**

The Group had the following related party balances:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | **As of <br> December 31,** | **As of <br> December 31,** | **As of <br> December 31,** | **As of <br> December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** |
| **Amounts due from related parties:** |  |  | | | | |
| Ucommune Venture Group | (b) | (i) | | 1,465 | |  |
|  |  |  | | **1,465** | |  |

---

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,** | **As of <br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| **Amounts due to related parties:** |  |  |
| Youxiang Group (a) (ii) | 1345 | 1626 |
| Ucommune Venture Group (b) (i) | 75669 | 5982 |
| Others (iii) | 1837 | 1433 |
|  | **78851** | **9041** |

---

Notes:

(i) Amounts due from and amounts due to Ucommune Venture Group are loans between the Group and the Ucommune Venture Group.

(ii) Amounts due to Youxiang Group are accrued lease expenses and property management expenses payable.

(iii) Amounts due to others are loan received from Dr. Daqing Mao and investment principal due to an entity under control of Angela Bai.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II. Transactions:**

**Lease expenses**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Youxiang Group | (a) | (i) |  | 27 |  |  |  |  |

---

**Revenues**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Youxiang Group | (a) | (ii) |  | 476 |  | 95 |  | 177 |
| Ucommune Venture Group | (b) |  |  |  |  | 42 |  |  |

---

**Property management expense**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Youxiang Group | (a) | (iii) |  | 915 |  | 492 |  |  |

---

**Loans exempt from related parties**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Ucommune Venture Group | (b) | (iv) |  |  |  | 11537 |  | 56650 |

---

**Loans exempt to related parties**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Ucommune Venture Group | (b) | (iv) |  |  |  | 7875 |  | 2220 |

---

**Settlement of payable by disposal of subsidiaries**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | <br>**Relationship** | <br>**Notes** | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  |  |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Ucommune Venture Group | (b) | (v) |  |  |  |  |  | 9657 |

---

Notes:

(i) The amount represents rental expense for the operating lease to Youxiang Group.

(ii) The amount represents consulting and workspace membership service provided to Youxiang Group.

(iii) The amount represents property management services provided by Youxiang Group.

(iv) The amount represents loans exempt from and exempt to Ucommune Venture Group.

(v) On August 1, 2025, the Group disposed of two subsidiaries, Beijing Anlingranliu Enterprise Management Co., Ltd. and Beijing Anlingranqi Enterprise Management Co., Ltd. to Beijing Dongyi Yuanda Architectural Decoration Engineering Co., Ltd. ("Dongyi Yuanda"), subsidiary of Ucommune Venture Group. The consideration of the disposal was settled by the payables due to Dongyi Yuanda. RMB 55 disposal gain was recorded as additional paid-in capital as it was the transaction under common control as of the transaction date. Dongyi Yuanda was no longer the related party of the Group after Ucommune Venture Group disposed of 46.05% shares of Dongyi Yuanda in September 2025.

**22. COMMITMENTS AND CONTINGENCIES**

<u>Capital commitment</u>

As of December 31, 2025, the Group had no significant outstanding capital commitments.

<u>Contingencies</u>

The Group is not a party to any material legal or administrative proceedings. From time to time, the Group is involved in various other legal and regulatory proceedings arising in the normal course of business. While the Group cannot predict the occurrence or outcome of these proceedings with certainty, it does not believe that an adverse result in any pending legal or regulatory proceeding, individually or in the aggregate, would be material to the Group's consolidated financial condition or cash flows.

**23. RESTRICTED NET ASSETS**

Relevant PRC statutory laws and regulations permit payments of dividends by the Group's PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company's subsidiaries.

In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, a foreign invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise's PRC statutory accounts, which is included in retained earnings accounts in equity section of the consolidated balance sheets. A wholly-owned foreign invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve reaches 50% of its respective registered capital based on the enterprise's PRC statutory accounts.

Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. If any PRC subsidiary incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to the Group. Any limitation on the ability of the PRC subsidiaries to distribute dividends or other payments to their respective shareholders could materially and adversely limit the ability to grow, make investments or acquisitions that could be beneficial to pay dividends.

Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide statutory common reserve at least 10% of its annual after-tax profit until such reserve reaches 50% of its respective registered capital based on the enterprise's PRC statutory accounts. The Group's provision for the statutory common reserve is in compliance with the aforementioned requirement of the Company Law. A domestic enterprise is also required to provide for discretionary surplus reserve, at the discretion of the board of directors, from the profits determined in accordance with the enterprise's PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

Because the Group's entities in the PRC can only be paid out of distributable profits reported in accordance with PRC accounting standards, the Group's entities in the PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital, additional paid-in capital and statutory reserves of the Group's entities in the PRC. The aggregate amount of paid-in capital, additional paid-in capital and statutory reserves, which is the amount of net assets of the Group's entities in the PRC (mainland) not available for distribution, was RMB3,950 as of December 31, 2025.

**24. SEGMENT INFORMATION**

Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the Group's chief operating decision makers ("CODM") in deciding how to allocate resources and assess performance.

The Group's CODM has been identified as the CEO. For the years ended December 31, 2023, 2024 and 2025, there are two operating segments identified including workspace membership and other services.

The Group primarily operates in the PRC and substantially all of the Group's long-lived assets are located in the PRC. Segment information is presented after elimination of inter-segment transactions and revenues and cost of revenues are directly attributable, or are allocated, to each segment. The Group's CODM evaluates performance based on each operating segment's revenue and costs of revenue (excluding impairment loss) and uses these results to evaluate the performance of, and to allocate resources to each of the segments. The Group's CODM does not review the financial position by operating segment, thus total assets by operating segment is not presented.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Revenue: |  |  |  |
| Workspace membership | 124140 | 68558 | 22630 |
| Other services | 27890 | 8655 | 3490 |
| **Total revenue** | **152030** | **77213** | **26120** |
| Cost of revenue (excluding impairment loss) |  |  |  |
| Workspace membership | (141462) | (74065) | (22587) |
| Other services | (19426) | (4948) | (4279) |
| **Total cost of revenue (excluding impairment loss)<sup>(1)</sup>** | **(160888)** | **(79013)** | **(26866)** |
| **Reconciliation of profit or loss** |  |  |  |
| Operating expenses: |  |  |  |
| Impairment loss on long-lived assets and long-term prepaid expenses | (29109) | (967) | (2948) |
| Sales and marketing expenses | (8643) | (3540) | (714) |
| General and administrative expenses | (77119) | (44974) | (36666) |
| Change in fair value of warrant liability | 9099 | 4949 | 463 |
| Change in fair value of put option liability | 373 |  |  |
| **Loss from operations** | **(114257)** | **(46332)** | **(40611)** |
| Non-operating income/(expense): |  |  |  |
| Interest income/(expense), net | 907 | (2253) | 185 |
| Subsidy income | 7754 | 804 | 5 |
| Impairment loss on long-term investments | (25603) | (17979) |  |
| Gain on disposal of long-term investments | 6370 |  |  |
| Gain/(Loss) on disposal of subsidiaries | 112792 | (607) | 3217 |
| Other income, net | 8673 | 2180 | 725 |
| Gain/(Loss) from equity method investments | 795 | (483) |  |
| **Loss before income taxes and discontinued operations** | **(2569)** | **(64670)** | **(36479)** |

---

(1) A summary of depreciation and amortization expenses for the years presented is as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Workspace membership |  | 11116 |  | 9082 |  | 660 |
| Other services |  | 5211 |  | 539 |  | 250 |

---

**25. PARENT ONLY INFORMATION**

*Basis of presentation*

The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Group's consolidated financial statements except that the Parent Company used the equity method to account for investments in its subsidiaries and VIEs.

*Investments in subsidiaries and VIEs*

The Parent Company and its subsidiaries, VIEs and VIEs' subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation. For purpose of the Parent Company's stand-alone financial statements, its investments in subsidiaries, VIEs and VIEs' subsidiaries were reported using the equity method of accounting. The Parent Company's share of loss from its subsidiaries, VIEs and VIEs' subsidiaries were reported as share of loss of subsidiaries, VIEs and VIEs' subsidiaries in the accompanying Parent Company financial statements. Ordinarily under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to RMB nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of Parent Company Information, preparation the Parent Company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries, VIEs and VIEs' subsidiaries regardless of the carrying value of the investment even though the Parent Company is not obligated to provide continuing support or fund losses.

The following represents condensed unconsolidated financial information of Ucommune International Ltd.

***Condensed Balance Sheets:***

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD** |
|  | | | **(Note 2h)** |
| **ASSETS** |  |  |  |
| Current assets |  |  |  |
| Cash and cash equivalents | 7371 | 18127 | 2592 |
| Amount due from inter-company | 449238 | 449591 | 64291 |
| Other current assets | 61492 | 66848 | 9559 |
| Non-current assets |  |  |  |
| Investment in subsidiaries |  |  |  |
| **TOTAL ASSETS** | **518101** | **534566** | **76442** |
| **LIABILITIES AND EQUITY** |  |  |  |
| Current liabilities |  |  |  |
| Investment deficit in subsidiaries and consolidated VIEs | 360209 | 320149 | 45781 |
| Forward sale contract liability |  | 16813 | 2404 |
| Other current liabilities | 47819 | 68091 | 9736 |
| **Total current liabilities** | **408028** | **405053** | **57921** |
| Non-current liabilities: |  |  |  |
| Other non-current liabilities | 467 | 1 |  |
| **TOTAL LIABILITIES** | **408495** | **405054** | **57921** |
| **MEZZANINE EQUITY** |  |  |  |
| Redeemable Convertible Series A Preferred Shares (nil and 20,000 authorized, nil and 2,750 issued and outstanding as of December 31, 2024 and 2025, with par value of nil and US$0.024, respectively; Redemption value of nil and RMB32,242 as of December 31, 2024 and 2025, respectively; Liquidation preference of nil and RMB24,193 as of December 31, 2024 and 2025, respectively) |  | 1262 | 180 |
| **EQUITY** |  |  |  |
| Class A ordinary shares (20,000,000 and 19,980,000 authorized, 2,024,460 and 4,436,543 issued and outstanding as of December 31, 2024 and 2025, with par value of US$0.024 and US$0.024, respectively) | 335 | 746 | 107 |
| Class B ordinary shares (5,000,000 and 5,000,000 authorized, 119,387 and 119,387 issued and outstanding as of December 31, 2024 and 2025, with par value of US$0.024 and US$0.024, respectively) | 20 | 20 | 3 |
| Additional paid-in capital | 4676706 | 4744210 | 678413 |
| Accumulated deficit | (4597642) | (4638926) | (663357) |
| Accumulated other comprehensive loss | 30187 | 22200 | 3175 |
| **TOTAL EQUITY** | **109606** | **128250** | **18341** |
| **TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY** | **518101** | **534566** | **76442** |

---

***Condensed Statements of Operations and Comprehensive Loss:***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Income/(Loss) from operations | 8747 | 484 | (4912) | (702) |
| Non-operating (loss)/income | (25245) | 2222 | (6551) | (937) |
| Income/(Loss) from investment in subsidiaries | 11366 | (72236) | (26379) | (3772) |
| Net loss | (5132) | (69530) | (37842) | (5411) |
| Other comprehensive (loss)/income | (1543) | 7433 | (8047) | (1151) |
| **Total Comprehensive loss** | **(6675)** | **(62097)** | **(45889)** | **(6562)** |

---

***Condensed Statements of Cash Flows:***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
|  | | | | **(Note 2h)** |
| Net cash provided by/(used in) operating activities | 5872 | (11633) | (4256) | (609) |
| Net cash provided by/(used in) investing activities |  | 17250 | (2025) | (290) |
| Net cash (used in)/provided by financing activities | (5482) | 782 | 16946 | 2423 |
| Cash received from issuance of redeemable convertible preferred shares |  |  | 18089 | 2587 |
| Issuance cost of redeemable convertible preferred shares |  |  | (523) | (75) |
| Redemption of convertible bond | (5482) |  |  |  |
| Capital contribution from shareholders |  | 1705 |  |  |
| Cash received from exercise of warrant |  | 430 |  |  |
| Cash received from exercise of share option |  |  | 77 | 11 |
| Loan repaid to related parties |  | (2072) | (697) | (100) |
| Loan received from related parties |  | 719 |  |  |
| Effects of exchange rate changes | (14) | (62) | 91 | 14 |
| Net increase in cash and cash equivalents | 376 | 6337 | 10756 | 1538 |
| Cash and cash equivalents at beginning of the year | 658 | 1034 | 7371 | 1054 |
| Cash and cash equivalents at end of the year | 1034 | 7371 | 18127 | 2592 |

---

**26. SUBSEQUENT EVENTS**

The Group has evaluated the impact of events that have occurred subsequent to December 31, 2025, through the issuance date of the consolidated financial statements, other than the subsequent event described above, the Group did not identify any subsequent events that would have required adjustment or disclosure on the consolidated financial statements.

## Exhibit 2.19

**Exhibit 2.19**

**Description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act")**

 ****

As of December 31, 2025, Ucommune International Ltd ("we," "our," "our company," or "us") had the following series of securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which<br> registered** |
| Class A ordinary shares, par value of US$0.024 per share | UK | The Nasdaq Stock Market LLC |

---

This exhibit contains a description of the rights of the holders of Class A ordinary shares.

**Description of Class A Ordinary Shares**

The following is a summary of material provisions of our currently effective Fourth Amended and Restated Memorandum and Articles of Association (the "Memorandum and Articles of Association"), as well as the Companies Act (As Revised) of the Cayman Islands (the "Companies Act") insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Memorandum and Articles of Association, as amended, which is filed with the SEC as an exhibit to our annual report on Form 20-F.

 ****

***Type and Class of Securities (Item 9.A.5 of Form 20-F)***

Our authorized share capital consists of Class A ordinary shares, Class B ordinary shares and Series A preferred shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. All of our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares. Each Class A ordinary share has US$0.024 par value. The respective number of our ordinary shares that have been issued as of the end of the fiscal year is provided on the cover of the annual report on Form 20-F filed with the SEC (the "Form 20-F").

 ****

***Preemptive Rights (Item 9.A.3 of Form 20-F)***

Our shareholders do not have preemptive rights.

 ****

 ****

***Limitations or Qualifications (Item 9.A.6 of Form 20-F)***

Our authorized share capital consists of Class A ordinary shares, Class B ordinary shares and Series A preferred shares.. In respect of matters requiring the votes of shareholders, each Class A ordinary share is entitled to one vote, each Class B ordinary share is entitled to 170 votes and the Series A preferred shares carry no voting rights except as required by law (including without limitation, the Companies Act (As Revised) of the Cayman Islands) and as expressly provided in the Certificate of Designations. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Each Series A preferred share is convertible into one Class A ordinary share pursuant to the Certificate of Designations. Due to the super voting power of Class B ordinary share holder, the voting power of the Class A ordinary shares may be materially limited.

***Rights of Other Types of Securities***

Not applicable.

 ****

***Rights of Class A Ordinary Shares (Item 10.B.3 of Form 20-F)***

 

*Dividends*

The holders of our ordinary shares are entitled to such dividends as may be declared by our Board of Directors subject to the Memorandum and Articles of Association and the Companies Act. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. The Memorandum and Articles of Association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our Board of Directors determine is no longer needed. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless our directors determine that, immediately after the payment, we will be able to pay our debts as they become due in the ordinary course of business and we have funds lawfully available for such purpose. Holders of Class A ordinary shares and Class B ordinary shares will be entitled to the same amount of dividends, if declared.

 

*Voting Rights; Meetings of Shareholders*

In respect of all matters subject to a shareholders' vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 170 votes, voting together as one class. Voting at any meeting of shareholders is by poll and not on a show of hands.

A quorum required for a meeting of shareholders consists of two or more shareholders holding not less than one-half of the votes attaching to the issued and outstanding shares entitled to vote at general meetings present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders' annual general meetings. The Memorandum and Articles of Association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we will specify the meeting as such in the notices calling it, and the annual general meeting will be held at such time and place as may be determined by our directors. We, however, will hold an annual shareholders' meeting during each fiscal year, as required by the Listing Rules at the Nasdaq. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting. Shareholders' annual general meetings and any other general meetings of our shareholders may be called by a majority of our Board of Directors or our chairman or upon a requisition of shareholders holding at the date of deposit of the requisition not less than one-third of the votes attaching to the issued and outstanding shares entitled to vote at general meetings, in which case the directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, the Memorandum and Articles of Association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Advance notice of at least fifteen (15) days is required for the convening of our annual general meeting and other general meetings unless such notice is waived in accordance with the Memorandum and Articles of Association.

An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution also requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting. A special resolution will be required for important matters such as a change of name or making changes to the Memorandum and Articles of Association.

 

*Conversion*

Each Class B ordinary share is convertible into one Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holder to any person or entity which is not an affiliate of such holder, such Class B ordinary shares shall not be automatically and immediately converted into the equivalent number of Class A ordinary shares.

 

*Transfer of Ordinary Shares*

Subject to the restrictions in the Memorandum and Articles of Association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our Board of Directors.

Our Board of Directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our Board of Directors may also decline to register any transfer of any ordinary share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our Board of Directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

● a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of the Nasdaq, be suspended and the register closed at such times and for such periods as our Board of Directors may from time to time determine, *provided*, *however*, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our Board of Directors may determine.

 

 

*Liquidation*

On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them. Any distribution of assets or capital to a holder of ordinary share will be the same in any liquidation event. Any distribution of assets or capital to a holder of a Class A ordinary share and a holder of a Class B ordinary share will be the same in any liquidation event.

 

*Calls on Shares and Forfeiture of Shares*

Our Board of Directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

 

*Redemption, Repurchase and Surrender of Ordinary Shares*

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our Board of Directors. Our company may also repurchase any of our shares provided that the manner and terms of such purchase have been approved by our Board of Directors or are otherwise authorized by the Memorandum and Articles of Association. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company's profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if the company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (1) unless it is fully paid up, (2) if such redemption or repurchase would result in there being no shares issued and outstanding, or (3) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

 

*Sinking Fund Provision*

There is no sinking fund provision under the Memorandum and Articles of Association.

 ****

***Requirements to Change the Rights of Holders of Class A Ordinary Shares (Item 10.B.4 of Form 20-F)***

 

*Variations of Rights of Shares*

If at any time our share capital is divided into different classes or series of shares, the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not our company is being wound-up, may be varied with the consent in writing of a majority the holders of the issued shares of that class or series or with the sanction of an ordinary resolution at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking *pari passu* with such existing class of shares.

 ****

 ****

***Limitations on the Rights to Own Class A Ordinary Shares (Item 10.B.6 of Form 20-F)***

There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote ordinary shares.

 ****

***Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)***

 

*Anti-Takeover Provisions*

Some provisions of the Memorandum and Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our Board of Directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

 ****

***Ownership Threshold (Item 10.B.8 of Form 20-F)***

There are no provisions under Cayman Islands law applicable to us, or under the Memorandum and Articles of Association, that require us to disclose shareholder ownership above any particular ownership threshold.

 ****

***Differences between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)***

The Companies Act is derived, to a large extent, from the older Companies Acts of England, but does not follow many recent English law statutory enactments. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware.

 

*Mergers and Similar Arrangements*

The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (1) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (2) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (1) a special resolution of the shareholders of each constituent company, and (2) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the *Cayman Islands Gazette*. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a "parent" of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provide the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, *provided* that the arrangement is approved by (1) 75% in value of the shareholders or class of shareholders, as the case may be, or (2) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

● the statutory provisions as to the required majority vote have been met;

● the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

● the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

● the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of a dissenting minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of not less than 90.0% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction is thus approved, or if a tender offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

 

*Shareholders' Suits*

In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in *Foss v. Harbottle* and the exceptions thereto) which permit a minority shareholder to commence a class action against or derivative actions in the name of the company to challenge actions where:

● a company acts or proposes to act illegally or ultra vires;

● the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

● those who control the company are perpetrating a "fraud on the minority."

*Indemnification of Directors and Executive Officers and Limitation of Liability*

Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. The Memorandum and Articles of Association provide that that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in the Memorandum and Articles of Association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

*Directors' Fiduciary Duties*

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company — a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

 

*Shareholder Action by Written Consent*

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. The Companies Act and the Memorandum and Articles of Association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

 

 

*Shareholder Proposals*

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Companies Act provide shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. The Memorandum and Articles of Association allow our shareholders holding in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our Board of Directors is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders' meeting, the Memorandum and Articles of Association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders. As a Cayman Islands exempted company, we are not obliged by law to call shareholders' annual general meetings.

*Cumulative Voting*

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but the Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

 

*Removal of Directors*

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Memorandum and Articles of Association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated. In addition, a director's office shall be vacated if the director (1) gives notice in writing to the Company that he resigns the office of director; (2) dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; (3) is prohibited by any applicable law or designated stock exchange rules from being a director; (4) is found to be or becomes of unsound mind; or (5) is removed from office pursuant to any other provision of the Memorandum and Articles of Association.

 

*Transactions with Interested Shareholders*

The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, the directors of the Company are required to comply with fiduciary duties which they owe to the Company under Cayman Islands laws, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company, and are entered into for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

*Restructuring* 

A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is or is likely to become unable to pay its debts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) intends to present a compromise or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (1) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (2) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

 

*Dissolution; Winding up*

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

 

*Variation of Rights of Shares*

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and the Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of a majority of the issued shares of that class or with the sanction of an ordinary resolution passed at a general meeting of the holders of the shares of that class.

 

 

*Amendment of Governing Documents*

Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and the Memorandum and Articles of Association, the Memorandum and Articles of Association may only be amended by a special resolution of our shareholders.

 

*Rights of Nonresident or Foreign Shareholders*

There are no limitations imposed by the Memorandum and Articles of Association on the rights of nonresident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in the Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

***Changes in Capital (Item 10.B.10 of Form 20-F)***

We may from time to time by ordinary resolutions:

● increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

● consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

● divide our share into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential deferred, qualified or special rights, privileges, conditions or such restrictions;

● sub-divide our existing shares, or any of them into shares of a smaller amount that is fixed by the Memorandum and Articles of Association; and

● cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.

Subject to the Companies Act and the Memorandum and Articles of Association with respect to matters to be dealt with by ordinary resolution, we may, by special resolution, reduce our share capital and any capital redemption reserve in any manner authorized by law.

**Debt Securities (Item 12.A of Form 20-F)**

Not applicable.

**Warrants and Rights (Item 12.B of Form 20-F)** 

Not applicable.

**Other Securities (Item 12.C of Form 20-F)**

Not applicable.

**Description of American Depositary Shares (Items 12.D of Form 20-F)**

Not applicable.

## Exhibit 8.1

**Exhibit 8.1**

**List of Principal Subsidiaries and VIEs**

---

| | |
|:---|:---|
| **Significant Subsidiaries** | **Place of Incorporation** |
| Ucommune Group Holdings Limited | Cayman Islands |
| Ucommune Group Holdings (Hong Kong) Limited | Hong Kong |
| Melo Inc. | Delaware |
| Melo HongKong Limited | Hong Kong |
| Youshenghengtong (Beijing) Technology Co., Ltd. | PRC |
| Beijing Melo Technology Co., Ltd. | PRC |
| Beijing Litong Huida Information Technology Co., Ltd. | PRC |

---

---

| | |
|:---|:---|
| **VIEs** | **Place of Incorporation** |
| Beijing Ubazaar Technology Co., Ltd. | PRC |

---

## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Zirui Wang, certify that:

1. I
have reviewed this annual report on Form 20-F of Ucommune International Ltd (the "Company");

2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;

3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The
Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The
Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the
equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal
control over financial reporting.

Date: March 24, 2026

---

| | |
|:---|:---|
| By: | /s/ Zirui Wang |
| Name: | Zirui Wang |
| Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Wei Hu, certify that:

1. I
have reviewed this annual report on Form 20-F of Ucommune International Ltd (the "Company");

2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;

3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The
Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The
Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the
equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal
control over financial reporting.

Date: March 24, 2026

---

| | |
|:---|:---|
| By: | /s/ Wei Hu |
| Name: | Wei Hu |
| Title: | Financial Reporting Director |

---

## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Ucommune International Ltd (the "Company") on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Zirui Wang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 24, 2026

---

| | |
|:---|:---|
| By: | /s/ Zirui Wang |
| Name: | Zirui Wang |
| Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Ucommune International Ltd (the "Company") on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Wei Hu, Financial Reporting Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 24, 2026

---

| | |
|:---|:---|
| By: | /s/ Wei Hu |
| Name: | Wei Hu |
| Title: | Financial Reporting Director |

---

## Exhibit 15.1

**Exhibit 15.1**

![](ea028275601_ex15-1img1.jpg)

**<u>Independent Registered Public Accounting Firm's Consent</u>**

We consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-254072, 333-267017, 333-276066, 333-281202, 333-289594) of our report dated March 24, 2026 relating to the consolidated financial statements of Ucommune International Ltd. appearing in the Annual Report on Form 20-F for the year ended December 31, 2025.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

Beijing, China

March 24, 2026

BEIJING OFFICE ● Units 06-09 ● 46th Floor ● China World Tower B ● No. 1 Jian Guo Men Wai Avenue ● Chaoyang District ● Beijing ● 100004

Phone 8610.8518.7992 ● Fax 8610.8518.7993 ● www.marcumasia.com

## Exhibit 15.2

**Exhibit 15.2**

![](ea028275601_ex15-2img1.jpg)

34/F, Tower 3, China Central Place, 77 Jianguo Road, Beijing 100025, China

Telephone: (86-10) 5809-1000 Facsimile: (86-10) 5809-1100

March 24, 2026

**Ucommune International Ltd**

No. 2 Dongsihuan North Road, Building 1, 4th Floor

Chaoyang District, Beijing 100016

People's Republic of China

Dear Sir/Madam:

We hereby consent to the reference of our name under the headings "Item 3. Key Information—Implications of Being a Company with the Holding Company Structure and the VIE Structures," "Item 3. Key Information—Our Operations in China and Permissions Required from the PRC Authorities for Our Operations," "Item 3. Key Information—D. Risk Factors" and "Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Respective Shareholders" included in Ucommune International Ltd's Annual Report on Form 20-F for the year ended December 31, 2025 (the "Annual Report"), which will be filed with the Securities and Exchange Commission (the "SEC") in the month of March 2026, and further consent to the incorporation by reference, into Ucommune International Ltd's registration statements on Form S-8 (File Nos. 333-254072, 333-267017, 333-276066, 333-281202 and 333-289594) pertaining to Ucommune International Ltd's Share Incentive Plan and the Registration Statements on Form F-3 (File Nos. 333-257664 and 333-266899), of the reference of our name under the headings "Item 3. Key Information—Implications of Being a Company with the Holding Company Structure and the VIE Structures," "Item 3. Key Information—Our Operations in China and Permissions Required from the PRC Authorities for Our Operations," "Item 3. Key Information—D. Risk Factors" and "Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Respective Shareholders" in the Annual Report. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully,

---

| |
|:---|
| /s/ Jingtian & Gongcheng |
| Jingtian & Gongcheng |

---

## Exhibit 15.3

**Exhibit 15.3**

---

| | |
|:---|:---|
| **Our ref** | **SQG/774298-000001/86097609v1** |
| **Direct tel** | **+852 2522 9333** |
| **Email** | **sarena.gong@maples.com** |

---

**Ucommune International Ltd**

No. 2 Dongsihuan North Road, Building 1, 4th Floor

Chaoyang District, Beijing 100026

People's Republic of China

24 March 2026

Dear Sir and/or Madam

**Ucommune International Ltd**

We have acted as legal advisers as to the laws of the Cayman Islands to Ucommune International Ltd, an exempted company with limited liability incorporated in the Cayman Islands (the "**Company**"), in connection with the filing by the Company with the United States Securities and Exchange Commission (the "**SEC**") of an annual report on Form 20-F for the year ended 31 December 2025 (the "**Form 20-F**").

We hereby consent to the reference of our firm under the heading "Item 10. Additional Information – E. Taxation – Cayman Islands Taxation" in the Form 20-F, and we further consent to the incorporation by reference of the summary of our opinions under this heading into the Company's registration statements on (i) Form S-8 (No. 333-254072) that was filed on 10 March 2021, pertaining to the Company's 2020 Share Incentive Plan, (ii) Form S-8 (No. 333-267017) that was filed on 23 August 2022, pertaining to the Company's 2020 Share Incentive Plan, (iii) Form F-1 on Form F-3 (No. 333-257664) that was filed on 2 July 2021, (iv) Form F-3 (No. 333-266899) that was filed on 16 August 2022, (v) Form S-8 (No. 333-276066) that was filed on 15 December 2023, pertaining to the Company's 2020 Share Incentive Plan, (vi) Form S-8 (No. 333-281202) that was filed on 2 August 2024, pertaining to the Company's 2020 Share Incentive Plan and (vii) Form S-8 (No. 333-289594) that was filed on 14 August 2025, pertaining to the Company's 2020 Share Incentive Plan.

We also consent to the filing with the SEC of this consent letter as an exhibit to the Form 20-F. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, or under the U.S. Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully

/s/ Maples and Calder (Hong Kong) LLP

Maples and Calder (Hong Kong) LLP