F-1/A 1 ff12021a2_ucommuneinter.htm AMENDMENT NO. 2 TO FORM F-1

As filed with the United States Securities and Exchange Commission on January 28, 2021

Registration No. 333-252271

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________

Amendment No. 2
to
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

________________________

UCOMMUNE INTERNATIONAL LTD

(Exact name of Registrant as specified in Its charter)

________________________

Not Applicable
(Translation of Registrant’s name into English)

________________________

Cayman Islands

 

7380

 

Not Applicable

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

________________________

Floor 8, Tower D
No.2 Guang Hua Road
Chaoyang District, Beijing
People’s Republic of China, 100026
+8610 6506
-7789

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

________________________

Cogency Global lnc.
122 East 42
nd Street, 18th Floor
New York, NY 10168
+1 800
-221-0102
(Name, address, including zip code, and telephone number, including area code, of agent for service)

________________________

Copies to:

Allen C. Wang, Esq.
Latham & Watkins LLP
18
th Floor, One Exchange Square
8 Connaught Place
Central, Hong Kong
+852 2912
-2500

 

Mitchell S. Nussbaum, Esq.
Angela M. Dowd, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
212
-407-4000

________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company S

If an emerging growth company that prepares its financial statements in accordance with US 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 7(a)(2)(B) of the Securities Act. £

____________

†         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.

 

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

 

Proposed
Maximum
Aggregate
Offering
Price
(1)(2)

 

Amount of
Registration
Fee

Class A ordinary shares, par value US$0.0001 per share

 

US$      23,000,000

 

US$    2,509.30

 

Warrants to purchase Class A ordinary shares(3)

 

 

 

Class A ordinary shares, par value US$0.0001 per share, issuable upon exercise of Warrants(4)

 

US$      23,000,000

 

US$    2,509.30

 

Total

 

US$      46,000,000

 

US$    5,018.60

(5)

____________

(1)      Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

(2)      Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes ordinary shares that may be purchased by the underwriter(s) pursuant to an option. These ordinary shares are not being registered for the purpose of sales outside the United States.

(3)      Pursuant to Rule 457(g) under the Securities Act of 1933, no separate registration fee is required for the warrants registered hereby.

(4)      Based on a per share exercise price for the Warrants of not less than 100% of the public offering price per Class A ordinary share and Warrant in this offering. In addition to the Class A ordinary shares set forth in this table, pursuant to Rule 416 under the Act, this registration statement also registers such indeterminate number of Class A ordinary shares as may become issuable upon exercise of these securities as the same may be adjusted as a result of stock splits, stock dividends, recapitalizations or other similar transactions.

(5)      The Registrant previously paid US$3,763.96 of the total registration fee in connection with the initial filing of the Registration Statement on January 20, 2021.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

 

 

Table of Contents

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion
Preliminary Prospectus dated January
28, 2021

3,215,435 Class A Ordinary Shares

Warrants to Purchase 3,215,435 Class A Ordinary Shares

Ucommune International Ltd
(incorporated in Cayman Islands)

________________________

We are offering 3,215,435 Class A ordinary shares, par value US $0.0001 per share, or Class A ordinary shares, and warrants to purchase 3,215,435 Class A ordinary shares, or Warrants, at an aggregate assumed offering price of US$6.22 per Class A ordinary share and Warrant which is based on the last reported closing trading price of our Class A ordinary shares on Nasdaq on January 27, 2021. Class A ordinary shares and Warrants will be separately issued, but the Class A ordinary shares and Warrants will be issued and sold to purchasers in a combination of one Class A ordinary share and one Warrant to purchase one Class A ordinary share for a combined offering price of US$6.22, which is the last reported sale price of our Class A ordinary shares on the Nasdaq Capital Market. Each Warrant will be immediately exercisable for one Class A ordinary share at an exercise price of US$             per share (not less than 100% of the public offering price of per Class A ordinary share and Warrant sold in this offering) and expire five years after the issuance date.

Our Class A ordinary shares are listed on the Nasdaq Capital Market, or the Nasdaq, under the symbol “UK” and our 4,673,225 warrants, at an exercise price of $11.50 per share (the “Prior Warrants”), are listed on the Nasdaq under the symbol “UKOMW.” On January 27, 2021, the latest reported sale price of our Class A ordinary shares on the Nasdaq Capital Market was US$6.22 per Class A ordinary share and the latest reported sale price of our Prior Warrants was US$0.267. We do not intend to apply to list the Warrants on any security exchange.

Dr. Daqing Mao and his wife, Angela Bai currently own approximately 66.63% of the voting power of our company due to our dual class share structure. Upon the closing of this offering, Mr. Mao and Ms. Bai will continue to own a combined controlling interest in us, and we will meet the definition of a “controlled company” under the corporate governance standards for NASDAQ listed companies and we will be eligible to utilize certain exemptions from the corporate governance requirements of the NASDAQ Stock Market.

________________________

Investing in our securities involves a high degree of risks See “Risk Factors” beginning on page 20.

________________________

 

Price to
Public

 

Underwriting Discounts and Commissions(1)

 

Proceeds, before Expenses, to Us(2)

Per Class A ordinary share and Warrant

 

US$

 

US$

 

US$

Total

 

US$

 

US$

 

US$

____________

(1)      The per Class A ordinary share and Warrant calculation represents the average underwriting discount and commissions per Class A ordinary share and Warrant. See “Underwriting” for additional disclosure regarding compensation payable by us to the underwriter(s).

(2)      Does not include proceeds from the exercise of the Warrants in cash, if any.

The offering is being underwritten on a firm commitment basis. We have granted the underwriters an option exercisable within 45 days from the date of this prospectus to purchase up to an additional 482,315 Class A ordinary shares from us at a price of US$6.21 per Class A ordinary share and/or up to an additional 482,315 Warrants at a price of US$0.01 per Warrant, less, in each case, underwriting discounts and commissions.

Neither the United States Securities and Exchange Commission, any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriter(s) expect to deliver the Class A ordinary shares and Warrants against payment in U.S. dollars in New York, New York on or about           , 2021.

________________________

Sole Book Running Manager

Maxim Group LLC

________________________

The date of this prospectus is             , 2021.

 

Table of Contents

 

Table of Contents

TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

The Offering

 

11

Our Summary Combined and Consolidated Financial Data and Operating Data

 

13

Risk Factors

 

20

Special Note Regarding Forward-Looking Statements

 

60

Use of Proceeds

 

61

Dividend Policy

 

62

Capitalization

 

63

Dilution

 

64

Enforceability of Civil Liabilities

 

65

Corporate History and Structure

 

67

Selected Combined and Consolidated Financial Data

 

72

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

78

Industry Overview

 

108

Business

 

113

Regulation

 

140

Management

 

152

Principal Shareholders

 

160

Related Party Transactions

 

162

Description of Share Capital

 

164

Shares Eligible for Future Sale

 

176

Taxation

 

179

Underwriting

 

186

Expenses Relating to this Offering

 

194

Legal Matters

 

195

Experts

 

195

Where You Can Find Additional Information

 

195

Index to Financial Statements

 

F-1

________________________

You should rely only on the information contained in this prospectus. We and the underwriter(s) have not authorized anyone to provide you with any information other than that contained in this prospectus, and neither we, nor the underwriter(s) take responsibility for any other information others may give you. We are offering to sell, and seeking offers to buy, ordinary shares and warrants only in jurisdictions where such offers and sales are permitted. The information in this prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of ordinary shares and warrants. Our business, financial condition, results of operations and prospects may have changed since that date.

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Prospectus Summary

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements and the related notes appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ordinary shares discussed under “Risk Factors,” “Business,” and information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before deciding whether to buy the ordinary shares. Investors should note that Ucommune International Ltd, our ultimate Cayman Islands holding company, does not directly own any substantive operations in the PRC and our businesses in the PRC described in this prospectus are operated through our VIEs.

What is Ucommune

We are China’s leading agile office space manager and provider with global ambitions. We operate the largest agile office space community in China in terms of number of agile office spaces, aggregate managed area and number of cities covered in China as of December 31, 2019, according to Frost & Sullivan.

Our mission is to cultivate a new working culture anchored in four foundations: “Sharing, Innovation, Responsibility and Success for all.”

We are dedicated to providing specialized, integrated services for managing agile office spaces in China. With our strong management and chain operating capabilities, we distinguish ourselves through seamless integration of physical spaces offline and member community online, empowering our members to fulfil their dreams.

The agile office space we envisage is based on a standardized, intelligent, humanized, digital and physical setting. It is an open platform complemented by enterprise services, with office space covering both online and offline members.

Our Business

The urban transformation and the evolution in working culture in China have created strong demand for flexible and innovative working space, creating a unique and significant opportunity for the agile office space industry. Our Ucommune brand is the most recognized agile office space brand in China, according to Frost & Sullivan. Our leading brand position, evidenced by brand awareness and member satisfaction according to a survey conducted by Frost & Sullivan, demonstrates our operating excellence and supports our future development.

Our nationwide agile office space network covers economically vibrant regions, including all the tier-1 and new tier-1 cities in China. Our unique and comprehensive network provides enterprise members with flexible and cost-efficient office space solutions, helping them to expand into new geographic locations quickly and enhance productivity. We are also actively involved in the urban transformation of older and under-utilized buildings, redefining the commercial real estate sector in China.

We believe the establishment of an Ucommune agile office space can attract more traffic to and improve the image of the surrounding neighborhood. Through our physical spaces, we also offer a comprehensive suite of corporate services to empower our members, which we refer to as U Plus services.

Our expertise in the real estate and retail industries has enabled us to operate our agile office spaces with high efficiency. Since the launch of our first agile office space in September 2015, we have replicated our success across China and expanded our footprint overseas with our strong management and chain operating capabilities.

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We had 222 spaces across 51 cities as of September 30, 2020, which 158 spaces were in operation, providing approximately 58,000 workstations to our members, and 64 spaces were under construction or preparation for construction. The following map illustrates our agile office space network in Greater China as of September 30, 2020:

In addition, we provide spaces operated by our associates (which refer to spaces in which we have a minority interest investment but are operated by our associates and for which we do not consolidate the revenue from such spaces) to supplement our agile office space network. We refer members who need agile office space services in locations we do not operate directly to spaces operated by our associates and share our service experiences for such members with our associates. This network of spaces operated by our associates allows members to expand into new geographic locations by receiving a similar level of services provided by our agile office spaces. As of September 30, 2020, we had five spaces operated by our associates across three cities in Greater China and New York.

We currently operate our spaces under the following two models:

•        Self-operated Model.    We have three categories of spaces under our self-operated model.

•        U Space, under which we enter into leases with landlords for spaces with area generally over 200 m2 each, and design and build the spaces using our proprietary SOP.

•        U Studio, under which we lease scattered and small office spaces with area generally less than 200 m2 each from landlords, and design and build the spaces using our proprietary SOP.

•        U Design, under which we provide one-stop customized services from location selection to daily operations in accordance with the specifications of our members.

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•        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.

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 September 30, 2020, we had 106 spaces under the asset-light model with managed area of approximately 272,900 m2, representing 45.7% of the aggregate managed area of approximately 597,100 m2 of all spaces. In the nine months ended September 30, 2020, we launched 59 new spaces under our asset-light model with managed area of approximately 101,700 m2, representing a 151% increase and a 73% increase in the number and managed area of new spaces under our asset-light model in the same period in 2019. In 2018, 2019 and the nine months ended September 30, 2020, we generated operating profit from the subsidiary that operates agile office spaces under our asset-light model. We intend to focus on expanding our asset-light business as one of our major growth drivers.

The profitability of our agile office space services is partly driven by the maturity of our agile office spaces, or the length of time a space has been open to our members. We define spaces that have been open for more than 24 months as mature spaces. Once a space reaches maturity, occupancy is generally stable, our initial investment in build-out and sales and marketing to drive member acquisition is complete and the space typically generates recurring revenue and cash flows. As of September 30, 2020, the overall occupancy rate for our 158 total spaces in operation and 95 mature spaces was approximately 72% and 78%, respectively.

While physical office spaces constitute our core offering, we have built a smart and integrated platform connecting offline and online services via technological innovation. Our app U Bazaar, and data management system, Udata, together with our smart office system and IoT solutions, have created a seamless working experience for our members to go beyond physical spaces and provide them with convenient access to our U Plus services (described in more detail below), resulting in enhanced member loyalty and an expanded member base. As of September 30, 2020, we had approximately 860,400 members, including approximately 830,500 individuals and 29,900 enterprises, ranging from large enterprises to SMEs.

Agile office spaces provide unique access to a large urban population with high disposable income in an office setting, providing significant monetization opportunities. Our individual members using workstations generally spend an average of eight hours in our spaces during a typical working day, building rapport with our Ucommune community and generating significant traffic and data. Powered by our technology capabilities, we offer various U Plus services meeting our members’ needs and preferences and build a vibrant Ucommune community serving a wider group of members beyond physical spaces.

Cooperating with over 700 business partners and more than 30 investees, 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 related services to our community.

We receive revenue from members by providing U Plus services and charging members fees based on services provided. We also generate revenue from our business partners and investees through different arrangements, including (i) revenue sharing arrangements under which we share part of the revenue of our business partners as fees, and (ii) fixed fee arrangements under which we charge our business partners and investees fixed fees for leasing our spaces to provide services.

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We also generate revenue by providing SAAS services, such as lease contract management, CRM promotion management, IOT intelligent device management, and tenant and member operation management services, to office buildings and industrial parks through our DOMES platform. The client base and revenue of our SAAS business grew significantly in the fourth quarter of 2020 as China recovered from COVID-19. We expect this trend to continue as we develop our SAAS business.

Our total revenue increased by 160.3% from RMB448.5 million in 2018 to RMB1,167.4 million (US$167.3 million) in 2019, and decreased by 31.6% from RMB874.6 million for the nine months ended September 30, 2019 to RMB598.5 million (US$88.1 million) in the same period of 2020. Our spaces in operation increased from 162 as of December 31, 2018 to 174 as of December 31, 2019 and decreased to 158 as of September 30, 2020. Our member base increased from approximately 252,000 as of December 31, 2018 to approximately 715,600 as of December 31, 2019 and further to approximately 860,400 as of September 30, 2020. In the first nine months of 2020, our financial condition and results of operation were materially and adversely affected by the impact of COVID-19 outbreak. Despite the adverse conditions, we have maintained our market leading position, as evidenced by the overall occupancy rate of 72% for all our spaces in operation as of September 30, 2020.

The following chart illustrates our business model:

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The following chart illustrates our community:

Our Strengths

We believe that the following strengths contribute to our success:

•        China’s leading agile office space brand rooted in deep understanding of local market dynamics;

•        our superior space operating efficiency and chain operating capabilities;

•        our technology-driven platform;

•        our dynamic agile office ecosystem empowering enterprise members;

•        our diversified monetization channels enabled by expansion of member base beyond physical spaces; and

•        our innovative management.

Our Strategies

We intend to achieve our mission and further grow our business by pursuing the following strategies:

•        reinforce leading market position by exploring growth under our asset-light model and pursuing target expansion;

•        expand U Plus services to refine our ecosystem;

•        invest in technology to enhance operating efficiency and upgrade smart office system; and

•        selectively pursue acquisition and investment opportunities.

Our Challenges

Investing in the ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties summarized below, the risks described under the “Risk Factors” section beginning on page 20 of, and the other information contained in, this prospectus before you decide whether to purchase the ordinary shares.

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Our ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including our ability to:

•        sustain and manage our growth and expansion;

•        obtain sufficient funds to expand our business and respond to business opportunities;

•        attract more members;

•        successfully operate our spaces and U Plus services;

•        develop our technology;

•        compete with other players in co-working space industry efficiently; and

•        comply with the relevant laws and regulations in the PRC and other jurisdictions in which we operate.

Our History and Corporate Structure

Our Corporate History

We commenced our operations in April 2015 through Ucommune Venture. We expanded our operations beyond Greater China to Singapore in July 2017. We entered into New York market through the space operated by our associate in April 2018. 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 Limited was incorporated under the laws of the Cayman Islands.

•        In December 2018, Ucommune Group Holdings (Hong Kong) Limited was incorporated under the laws of Hong Kong.

•        In January 2019, Ucommune (Beijing) Technology Co., Ltd., or Ucommune Technology, was incorporated in the PRC as a wholly owned subsidiary of Ucommune Group Holdings (Hong Kong) Limited.

•        In May 2019, Ucommune 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, Ucommune Technology entered into a series of contractual arrangements with Beijing U Bazaar as well as its shareholder. We obtained control over Ucommune Venture and Beijing U Bazaar and their respective subsidiaries through contractual arrangements.

In May 2019, we acquired Melo Inc., a holding company incorporated under the laws of Delaware. Beijing Melo Technology Co., Ltd., or 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. 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 respective shareholders, through which we obtained control over Weixue Tianxia.

On November 17, 2020, we consummated a business combination pursuant to a merger agreement with Orisun Acquisition Corp. and certain other parties. Following the business combination, Ucommune Group Holdings Limited became a wholly owned subsidiary of Ucommune International Ltd.

We are regarded as the primary beneficiary of each of Ucommune Venture, Beijing U Bazaar and Weixue Tianxia and their respective subsidiaries. We treat them as our consolidated affiliated entities under U.S. GAAP, and have consolidated the financial results of these entities in our combined and consolidated financial statements in accordance with U.S.GAAP.

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We refer to Ucommune Technology and Beijing Melo as our wholly foreign owned entities, or WFOEs, and to each of Ucommune Venture, Beijing U Bazaar and Weixue Tianxia as our variable interest entities, or VIEs, in this prospectus. For more details and risks related to our variable interest entity structure, please see “— Contractual Arrangements with our VIEs and Their Respective Shareholders” and “Risk Factors — Risks Relating to Our Corporate Structure.”

Our Corporate Structure

The following chart shows our corporate structure as of the date of this prospectus, including our principal subsidiaries and our VIEs.

____________

Notes:

(1)      Our shareholders and their affiliates hold 100% of Ucommune Venture’s equity interests.

(2)      Ms. Nan Shi, our employee responsible for our branding and marketing strategies, holds 100% of Beijing U Bazaar’s equity interests.

(3)      Our shareholders and their affiliates hold 100% of Weixue Tianxia’s equity interests.

Corporate Information

Our principal executive offices are located at Floor 8, Tower D, No.2 Guang Hua Road, Chaoyang District, Beijing, People’s Republic of China. Our telephone number at this address is +8610 6506-7789.

Our registered office in the Cayman Islands is located at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

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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 prospectus.

Conventions Which Apply to this Prospectus

Unless we indicate otherwise, all information in this prospectus reflects the following:

•        no exercise by the underwriter(s) of their option to purchase up to an additional 482,315 Class A ordinary shares and/or up to an additional 482,315 Warrants from us and no exercise of the Warrants; and

Except where the context otherwise requires and for purposes of this prospectus 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 Cayman Islands by merging with and into our company; (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, resulting in Ucommune Group Holdings Limited 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 prospectus only, Taiwan, Hong Kong and the Macau Special Administrative Region;

•        “Class A ordinary shares” refers to our Class A ordinary shares, par value US$0.0001 per share, carrying one vote per share, that will be designated immediately upon completion of this offering;

•        “Class B ordinary shares” refers to our Class B ordinary shares, par value US$0.0001 per share, carrying 15 votes per share, that will be designated immediately upon completion of this offering;

•        “Frost & Sullivan” refers to Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a third-party industry research firm;

•        “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 prospectus 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;

•        “members” refers to the individuals and enterprises that have registered on U Bazaar and have received reward points as of a given date;

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•        “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, Dongguan;

•        “ordinary shares” prior to the completion of this offering refers to our Class A and Class B ordinary shares of par value US$0.0001 per share;

•        “PIPE investment” refers to the investment of $60.9 million in by certain backstop investors in connection with the Company’s Business Combination.

•        “RMB” or “Renminbi” refers to the legal currency of the PRC;

•        “SAFE” refers to the State Administration for Foreign Exchange;

•        “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 combined and consolidated financial statements;

•        “tier-1 cities” refers to the most developed cities in the PRC: Beijing, Shanghai, Guangzhou and Shenzhen;

•        “U Bazaar” refers to the mobile app developed by Beijing U Bazaar Technology Co., Ltd.;

•        “Ucommune Technology” refers to 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 Ucommune (Beijing) Venture Investment Co., Ltd., Beijing U Bazaar Technology Co., Ltd. and Beijing Weixue Tianxia Education Technology Co., Ltd., which are PRC companies in which we do not have equity interests but whose financial results have been consolidated into our combined and consolidated financial statements in accordance with United States generally accepted accounting principles, or U.S. GAAP, due to our having effective control over, and our being the primary beneficiary of, such entities;

•        “we,” “us,” “our company,” “our” or “Ucommune” refers to Ucommune International Ltd, a Cayman Islands company, its subsidiaries and, in the context of describing our operations and combined and consolidated financial statements, its VIEs;

•        “Weixue Tianxia” refers to Beijing Weixue Tianxia Education Technology Co., Ltd;

•        “2019 plan” refers to a share incentive plan we adopted on August 22, 2019; and

•        “2020 plan” refers to a share incentive plan we adopted in November 17, 2020, 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.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriter of its option to purchase up to an additional 482,315 Class A ordinary shares and/or up to an additional 482,315 Warrants and no exercise of the Warrants or other outstanding warrants.

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Table of Contents

Certain amounts, percentages and other figures, such as key operating data, presented in this prospectus 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 prospectus are made at RMB6.7896 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2020. 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. On January 22 2021, the noon buying rate for Renminbi was RMB6.4810 to US$1.00.

This prospectus contains information derived from various public sources and certain information from an industry report commissioned by us and prepared by Frost & Sullivan, a third-party industry research firm, to provide information regarding our industry and market position. Such information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the “Risk Factors” section. These and other factors could cause the results to differ materially from those expressed in these publications and reports.

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Table of Contents

The Offering

Offering price

 

Assumed aggregate price of US$6.22 for one Class A ordinary share and one Warrant to purchase one Class A ordinary share.

Class A ordinary shares
offered

 


3,215,435 Class A ordinary shares (or 3,697,750 Class A ordinary shares if the underwriter exercises its option to purchase addition Class A ordinary shares in full). See “Capitalization.”

Warrants offered

 

Warrants to purchase 3,215,435 of our Class A ordinary shares (or 3,697,750 Class A ordinary shares if the underwriter exercises its option to purchase such additional Warrants in full). Each Warrant will have an exercise price of US$          per Class A ordinary share, exercisable commencing on the date of issuance and will expire five years from the date of issuance. The terms of the Warrants will be governed by a warrant agent agreement, dated as of the closing date of this offering, that we expect to be entered into among us and American
Stock Transfer & Trust Company LLC, or the Warrant Agent. This prospectus also relates to the offering of the Class A ordinary shares issuable upon exercise of the Warrants. For additional information regarding the Warrants, see “Description of Share Capital.”

   

The Class A ordinary shares and Warrants will be separately issued, but the Class A ordinary shares and Warrants will be issued and sold to purchasers in a combination of one Class A ordinary share and one Warrant to purchase one Class A ordinary share for a combined offering price of US$6.22.

Class A ordinary shares outstanding immediately after this offering

 



74,214,871 Class A ordinary shares (or 74,697,186 Class A ordinary shares if the underwriter(s) exercise their option to purchase additional Class A ordinary shares and/or additional Warrants in full).

Option

 

We have granted to the underwriter(s) an option, which is exercisable within 45 days from the date of this prospectus, to purchase up to an additional 482,315 Class A ordinary shares at a price of US$6.21 per Class A ordinary share and and/or up to an additional 482,315 Warrants at a price of US$0.01 per Warrant.

Use of proceeds

 

We expect to receive net proceeds of approximately US$17.3 million from this offering, based on an assumed public offering price of US$6.22 per Class A ordinary share and Warrant (the last reported closing trading price of our Class A ordinary shares on the Nasdaq on January 27, 2021) and assuming the underwriter(s) do not exercise their option to purchase additional Class A ordinary shares or Warrants and excluding the Class A ordinary shares issuable upon the exercise of the Warrants or other outstanding warrants, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

   

We plan to use the net proceeds we receive from this offering primarily for the following purposes: 50% of the net proceeds (approximately US$8.6 million) for expansion of our spaces and services offerings, 30% of the net proceeds (approximately US$5.2 million) for strengthening of our technology capabilities, and 20% of the net proceeds (approximately US$3.5 million) for working capital and other general corporate purposes. See “Use of Proceeds.”

Lock-up

 

We, our directors and executive officers and the holders of 10% or more of our outstanding Class A ordinary shares have agreed with the underwriter(s), subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of Class A ordinary shares or securities convertible into or exercisable or exchangeable for the Class A ordinary shares for a period of 90 days after the date of this prospectus.

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Table of Contents

NASDAQ trading symbol

 

UK

Payment and settlement

 

The underwriter(s) expect to deliver the Class A ordinary shares and the Warrants against payment on              , 2021.

Risk factors

 

See “Risk Factors” and other information included in this prospectus for discussions of the risks relating to investing in the Class A ordinary shares. You should carefully consider these risks before deciding to invest in the Class A ordinary shares.

Transfer Agent, Registrar and Warrant Agent

 


The transfer agent and registrar for our Class A ordinary shares is American Stock Transfer & Trust Company LLC. Its address is 6201 15th Ave, Brooklyn, NY 11219, and its telephone number is 718-921-8380.

The number of Class A ordinary shares to be outstanding immediately after this offering is based on 70,999,436 Class A ordinary shares outstanding as of the date of this prospectus and excludes:

•        2,336,612 Class A ordinary shares issuable upon the exercise of the Prior Warrants; and

•        3,215,435 Class A ordinary shares issuable upon the exercise of the Warrants issued in this offering.

Unless otherwise stated, all information in this prospectus assumes (i) no exercise of the outstanding options or warrants into Class A ordinary shares, (ii) no exercise of the underwriter’s option to purchase additional securities, and (iii) no exercise of the Warrants.

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Table of Contents

Our Summary Combined and Consolidated Financial Data and Operating Data

Summary Pro Forma Financial Information

The following pro forma selected financial data for the year ended December 31, 2019 and the nine months ended September 30, 2020 and is derived from the Ucommune International Ltd’s unaudited combined condensed pro forma financial statements and related notes included elsewhere in this prospectus.

The unaudited combined condensed pro forma financial information for the year ended December 31, 2019 are based on the historical financial statements of Orisun Acquisition Corp included in its Annual Report on Form 10-K for the year ended December 31, 2019, and on the historical financial statements of Ucommune Group Holdings Limited also included elsewhere in this prospectus.

The unaudited combined condensed pro forma financial information for the nine months ended September 30, 2020 has been prepared based on the historical statement of operations of Orisun Acquisition Corp for the nine months ended September 30, 2020, and on the historical financial statements of Ucommune Group Holdings Limited for the nine months ended September 30, 2020 included elsewhere in this prospectus.

The following pro forma financial data are being presented to illustrate the effects of the business combination that was completed in November 2020. The information is being presented for informational purposes only and does not purport to be indicative of the financial condition that would have resulted if the acquisition had been consummated at December 31, 2019 or at September 30, 2020.

The pro forma financial data are prepared based upon available information and assumptions that are believed to be reasonable. However, future results of operations and financial position may vary significantly from the results reflected in the following unaudited combined condensed pro forma financial data due to the factors described in “Risk Factors” included elsewhere herein.

Ucommune International Ltd Pro Forma

 

Nine Months Ended September 30, 2020

 

Year Ended December 31, 2019

Net revenues

 

$

88,145

 

 

$

167,334

 

Formation and operating costs

 

 

(328

)

 

 

(335

)

Cost of revenues

 

 

(100,569

)

 

 

(196,295

)

Sales and marketing expenses

 

 

(3,366

)

 

 

(10,871

)

General and administrative expenses

 

 

(12,542

)

 

 

(26,029

)

Pre-operating expenses

 

 

 

 

 

(2,168

)

Impairment loss on long-lived assets

 

 

(4,928

)

 

 

(7,458

)

Remeasurement gain of previously held equity interests in connection with step acquisition

 

 

 

 

 

55

 

Change in fair value of liabilities to be settled in share

 

 

 

 

 

(25,727

)

Operating loss

 

 

(33,588

)

 

 

(101,494

)

   

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

623

 

 

 

852

 

Interest expense

 

 

(2,204

)

 

 

(2,343

)

Other expense, net

 

 

(17,382

)

 

 

(12,063

)

Loss before income taxes

 

 

(52,551

)

 

 

(115,048

)

(Provision) Benefit for income taxes

 

 

(469

)

 

 

(622

)

Loss from equity method investment

 

 

21

 

 

 

(222

)

Net Loss

 

 

(52,999

)

 

 

(115,892

)

Less: net loss attributable to non-controlling interests

 

 

(2,282

)

 

 

(2,225

)

Net loss attributable to Company

 

$

(50,717

)

 

$

(113,667

)

   

 

 

 

 

 

 

 

Weighted average shares outstanding, basic and diluted

 

 

80,451,843

 

 

 

80,451,843

 

Basic and diluted net (loss) income per share

 

$

(0.63

)

 

$

(1.41

)

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Table of Contents

Summary Financial Information

The following summary combined and consolidated statements of operations data for the years ended December 31, 2018 and 2019, summary combined and consolidated balance sheet data as of December 31, 2018 and 2019 and summary combined and consolidated cash flow data for the years ended December 31, 2018 and 2019 have been derived from our audited combined and consolidated financial statements included elsewhere in this prospectus.

The following summary combined and consolidated statements of operations data for the nine months ended September 30, 2019 and 2020, summary combined and consolidated balance sheet data as of September 30, 2020 and summary combined and consolidated cash flow data for the nine months ended September 30, 2019 and 2020 have been derived from our unaudited combined and consolidated interim financial statements included elsewhere in this prospectus and have been prepared on the same basis as our audited combined and consolidated financial statements and include all adjustments, consisting only of normal and recurring adjustments, that we consider necessary for a fair statement of our financial position and operating results for the periods presented.

Our historical results are not necessarily indicative of results expected for future periods. You should read this Summary Combined and Consolidated Financial Data and Operating Data section together with our combined and consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

 

For the Year Ended
December 31,

 

For the Nine Months Ended
September 30,

   

2018

 

2019

 

2019

 

2020

   

RMB

 

%

 

RMB

 

US$

 

%

 

RMB

 

%

 

RMB

 

US$

 

%

   

(in thousands, except for percentages, shares and per share data)

Selected Combined and Consolidated Statements of Operation:

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Revenue:

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Workspace membership revenue

 

394,356

 

 

87.9

 

 

557,994

 

 

79,985

 

 

47.8

 

 

419,634

 

 

48.0

 

 

346,162

 

 

50,984

 

 

57.9

 

Marketing and branding service revenue

 

24,617

 

 

5.5

 

 

534,826

 

 

76,664

 

 

45.8

 

 

403,484

 

 

46.1

 

 

207,357

 

 

30,540

 

 

34.6

 

Other service revenue

 

29,535

 

 

6.6

 

 

74,538

 

 

10,685

 

 

6.4

 

 

51,451

 

 

5.9

 

 

44,957

 

 

6,621

 

 

7.5

 

Total revenue

 

448,508

 

 

100.0

 

 

1,167,358

 

 

167,334

 

 

100.0

 

 

874,569

 

 

100.0

 

 

598,476

 

 

88,145

 

 

100.0

 

Cost of revenue:

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Workspace membership

 

(624,844

)

 

(139.3

)

 

(814,002

)

 

(116,683

)

 

(69.7

)

 

(605,190

)

 

(69.2

)

 

(446,526

)

 

(65,766

)

 

(74.6

)

Marketing and branding
services

 

(22,481

)

 

(5.0

)

 

(485,473

)

 

(69,590

)

 

(41.6

)

 

(364,442

)

 

(41.7

)

 

(189,077

)

 

(27,848

)

 

(31.6

)

Other services

 

(16,284

)

 

(3.6

)

 

(69,917

)

 

(10,022

)

 

(6.0

)

 

(47,722

)

 

(5.5

)

 

(47,222

)

 

(6,955

)

 

(7.9

)

Total cost of revenue (excluding impairment loss)

 

(663,609

)

 

(148.0

)

 

(1,369,392

)

 

(196,295

)

 

(117.3

)

 

(1,017,354

)

 

(116.4

)

 

(682,825

)

 

(100,569

)

 

(114.1

)

Impairment loss on long-lived assets

 

(111,203

)

 

(24.8

)

 

(52,030

)

 

(7,458

)

 

(4.5

)

 

(46,122

)

 

(5.3

)

 

(33,457

)

 

(4,928

)

 

(5.6

)

Pre-opening expenses

 

(20,165

)

 

(4.5

)

 

(15,124

)

 

(2,168

)

 

(1.3

)

 

(14,148

)

 

(1.6

)

 

 

 

 

 

 

Sales and marketing expenses

 

(44,783

)

 

(10.0

)

 

(75,841

)

 

(10,871

)

 

(6.5

)

 

(48,344

)

 

(5.5

)

 

(22,853

)

 

(3,366

)

 

(3.8

)

General and administrative expenses

 

(118,798

)

 

(26.5

)

 

(181,582

)

 

(26,029

)

 

(15.6

)

 

(128,836

)

 

(14.7

)

 

(87,220

)

 

(12,846

)

 

(14.6

)

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Table of Contents

 

For the Year Ended
December 31,

 

For the Nine Months Ended
September 30,

   

2018

 

2019

 

2019

 

2020

   

RMB

 

%

 

RMB

 

US$

 

%

 

RMB

 

%

 

RMB

 

US$

 

%

   

(in thousands, except for percentages, shares and per share data)

Remeasurement gain of previously held equity interests in connection with step acquisitions

 

27,543

 

 

6.1

 

 

386

 

 

55

 

 

0.0

 

 

386

 

 

 

 

 

 

 

 

 

Change in fair value of liabilities to be settled in shares

 

25,607

 

 

5.7

 

 

(179,475

)

 

(25,727

)

 

(15.4

)

 

(179,475

)

 

(20.5

)

 

 

 

 

 

 

Loss from
operations

 

(456,900

)

 

(102.0

)

 

(705,700

)

 

(101,159

)

 

(60.5

)

 

(559,324

)

 

(64.0

)

 

(227,879

)

 

(33,564

)

 

(38.1

Interest income

 

21,574

 

 

4.8

 

 

5,944

 

 

852

 

 

0.5

 

 

4,901

 

 

0.6

 

 

4,233

 

 

623

 

 

0.7

 

Interest expense

 

(9,902

)

 

(2.2

)

 

(16,346

)

 

(2,343

)

 

(1.4

)

 

(7,960

)

 

(0.9

)

 

(14,962

)

 

(2,204

)

 

(2.5

)

Subsidy income

 

31,783

 

 

7.1

 

 

16,782

 

 

2,406

 

 

1.4

 

 

20,521

 

 

2.3

 

 

12,706

 

 

1,871

 

 

2.1

 

Impairment loss on long-term investments

 

(18,990

)

 

(4.2

)

 

(37,453

)

 

(5,369

)

 

(3.2

)

 

(2,000

)

 

(0.2

)

 

(3,507

)

 

(517

)

 

(0.6

)

Gain/loss on disposal of long-term investments

 

2,030

 

 

0.5

 

 

 

 

 

 

 

 

 

 

 

 

(43,032

)

 

(6,338

)

 

(7.2

)

Other income (expense), net

 

(11,715

)

 

(2.6

)

 

(63,480

)

 

(9,100

)

 

(5.4

)

 

(20,469

)

 

(2.3

)

 

(84,176

)

 

(12,398

)

 

(14.1

)

Loss before income taxes and loss from equity method investments

 

(442,120

)

 

(98.6

)

 

(800,253

)

 

(114,713

)

 

(68.6

)

 

(564,331

)

 

(64.5

)

 

(356,617

)

 

(52,527

)

 

(59.7

)

Provision for income taxes

 

(2,087

)

 

(0.5

)

 

(4,872

)

 

(698

)

 

(0.4

)

 

(4,780

)

 

(0.5

)

 

(2,330

)

 

(343

)

 

(0.4

)

Loss from equity method investments

 

(948

)

 

(0.2

)

 

(1,548

)

 

(222

)

 

(0.1

)

 

(1,600

)

 

(0.2

)