Ucommune International Ltd

Going Concern

The Company has incurred recurring operating losses since its inception, including net losses from continuing operations of RMB75.8 million for the year ended December 31, 2024 and RMB9.1 million for the six months ended June 30, 2025. Accumulated deficit was RMB4,609.1 million as of June 30, 2025. As of June 30, 2025, the Company had cash and cash equivalents of RMB62.6 million and negative working capital RMB0.4 million. For 2024 and the first half of 2025, although the restrictions related to the COVID-19 have been lifted, its influence over the economy continued to impact the Company’s financial position, results of operations and cash flows. Furthermore, in July 2025, the Company disposed its marketing and branding service business, which negatively impacted its working capital.- These conditions collectively raise substantial doubt about the Company’s ability to continue as a going concern.

Historically, the Company has relied principally on both operational sources of cash and non-operational sources of financing from investors to fund its operations and business development. The Company’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 an asset-heavy model to an asset-light model in order to improve profitability, continued exploration of new business opportunities that have synergies with the Company’s core business, controlling operating costs and optimizing operational efficiency to improve the Company’s cash flow from operations. The Company also plans to raise additional capital, including, among others, obtaining debt and equity financing, to support its future operations.

The Company 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 Company expects that 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 Company to sustain a sufficient source of cash to cover its operating costs. There can be no assurance, however, that the Company will be able to obtain additional financing on terms acceptable to the Company, in a timely manner, or at all. In the event that financing sources are not available, or that the Company is unsuccessful in increasing its gross profit margin and reducing operating losses, the Company 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 Company’s business, financial condition and results of operations and would materially adversely affect its ability to continue as a going concern.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the unaudited condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and that contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.