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What changed in Recon Technology, Ltd's 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of Recon Technology, Ltd's 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+407 added−391 removedSource: 20-F (2025-10-15) vs 20-F (2024-10-30)

Top changes in Recon Technology, Ltd's 2025 20-F

407 paragraphs added · 391 removed · 286 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

98 edited+66 added−37 removed323 unchanged
Biggest change(All amounts in Renminbi, except for shares outstanding) Statement of operations data: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended June 30, ​ ​ 2024 2023 2022 ​ ​ RMB¥ ​ RMB¥ ​ RMB¥ Revenue 68,854,280 67,114,378 83,777,571 Loss from operations (71,637,911) (69,332,735) (82,313,417) Net income (loss) attributable to Recon Technology, Ltd (49,871,259) (59,167,301) 95,586,795 ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per share* -Basic (9.88) (27.43) 55.52 -Diluted (9.88) (27.43) 55.52 ​ ​ ​ ​ ​ ​ ​ Weighted average number of Class A and Class B Ordinary Shares used in computation* -Basic 5,048,952 2,157,158 1,721,529 -Diluted 5,048,952 2,157,158 1,721,529 *Retrospectively restated for the 1-for-18 reverse stock split effective on May 1, 2024. 8 Table of Contents Balance sheet data: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 ​ ​ RMB¥ ​ RMB¥ ​ RMB¥ Current assets ​ 506,485,249 ​ 504,413,173 ​ 445,617,041 Total assets ​ 552,389,514 ​ 531,824,577 ​ 490,242,084 Current liabilities ​ 47,477,363 ​ 61,032,862 ​ 52,878,284 Total liabilities ​ 61,455,617 ​ 92,673,674 ​ 77,357,323 Total shareholder’s equity ​ 502,554,537 ​ 449,206,962 ​ 420,631,729 Shares outstanding (Class A Ordinary Shares)* ​ 7,987,959 ​ 2,306,295 ​ 1,704,766 Shares outstanding (Class B Ordinary Shares) ​ 7,100,000 ​ 7,100,000 ​ 4,100,000 *Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.
Biggest change(All amounts in Renminbi, except for shares outstanding) 7 Table of Contents Statement of operations data: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended June 30, ​ ​ 2025 2024 2023 ​ ​ RMB¥ ​ RMB¥ ​ RMB¥ Revenue 66,285,032 68,854,280 67,114,378 Loss from operations (57,319,712) (71,637,911) (69,332,735) Net loss attributable to Recon Technology, Ltd (42,588,554) (49,871,259) (59,167,301) ​ ​ ​ ​ ​ ​ ​ Loss per share* ​ ​ -Basic (4.68) (9.88) (27.43) -Diluted (4.68) (9.88) (27.43) ​ ​ ​ ​ ​ ​ ​ Weighted average number of Class A and Class B Ordinary Shares used in computation* ​ ​ -Basic 9,094,902 5,048,952 2,157,158 -Diluted 9,094,902 5,048,952 2,157,158 * Retrospectively restated for the 1-for-18 reverse stock split effective on May 1, 2024.
(“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Technology Co., Ltd. (“Recon-GX) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”), Gan Su BHD Environmental Technology Co. Ltd.
(“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”), Gan Su BHD Environmental Technology Co. Ltd.
Noncompliance with applicable regulations or requirements could subject us to: ● investigations, enforcement actions, and sanctions; ● mandatory changes to our network and products; ● disgorgement of profits, fines, and damages; ● civil and criminal penalties or injunctions; ● claims for damages by our customers or channel partners; ● termination of contracts; 15 Table of Contents ● loss of intellectual property rights; ● failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings ● necessary to conduct our operations; and ● temporary or permanent debarment from sales to public service organizations.
Noncompliance with applicable regulations or requirements could subject us to: ● investigations, enforcement actions, and sanctions; 14 Table of Contents ● mandatory changes to our network and products; ● disgorgement of profits, fines, and damages; ● civil and criminal penalties or injunctions; ● claims for damages by our customers or channel partners; ● termination of contracts; ● loss of intellectual property rights; ● failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings ● necessary to conduct our operations; and ● temporary or permanent debarment from sales to public service organizations.
Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry. 21 Table of Contents 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 become worthless.
Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry. 20 Table of Contents 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 become worthless.
In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over the VIEs, and our ability to conduct our business may be materially and adversely affected. 20 Table of Contents Risks Related to Doing Business in China The recent state government interference into business activities on U.S. listed Chinese companies may negatively impact our existing and future operations in China.
In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over the VIEs, and our ability to conduct our business may be materially and adversely affected. 19 Table of Contents Risks Related to Doing Business in China The recent state government interference into business activities on U.S. listed Chinese companies may negatively impact our existing and future operations in China.
The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interest of our shareholders. 19 Table of Contents Shareholder rights under Cayman Islands law may differ materially from shareholder rights in the United States, which could adversely affect the ability of us and our shareholders to protect our and their interests.
The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interest of our shareholders. 18 Table of Contents Shareholder rights under Cayman Islands law may differ materially from shareholder rights in the United States, which could adversely affect the ability of us and our shareholders to protect our and their interests.
The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022. 22 Table of Contents On August 26, 2022, the PCAOB signed a SOP with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong which establishes a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act.
The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022. 21 Table of Contents On August 26, 2022, the PCAOB signed a SOP with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong which establishes a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act.
In addition, on July 10, 2021, the Cyberspace Administration of China issued the Measures for Cybersecurity Review (Revision Draft for Comments) for public comments, which proposes to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess personal data of more than one million users.
In addition, on July 10, 2021, the Cyberspace Administration of China issued the Measures for Cybersecurity Review (Revised Draft for Comments) for public comments, which proposes to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess personal data of more than one million users.
The selected consolidated balance sheet data for the year ended June 30, 2022 have been derived from our audited consolidated balance sheet as of June 30, 2022, which is not included in this annual report. Our historical results do not necessarily indicate results expected for any future periods.
The selected consolidated balance sheet data for the year ended June 30, 2023 have been derived from our audited consolidated balance sheet as of June 30, 2023, which is not included in this annual report. Our historical results do not necessarily indicate results expected for any future periods.
In addition, any additional actions, proceedings or rules resulting from these efforts could create new uncertainties for our shareholders, and the market price of our shares could be adversely affected, 35 Table of Contents As a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless.
In addition, any additional actions, proceedings or rules resulting from these efforts could create new uncertainties for our shareholders, and the market price of our shares could be adversely affected, As a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless.
The selected consolidated statements of operations data for the three years ended June 30, 2022, 2023 and 2024 and the consolidated balance sheet data as of June 30, 2022, 2023 and 2024 have been derived from our audited consolidated financial statements set forth in “Item 18 – Financial Statements”.
The selected consolidated statements of operations data for the three years ended June 30, 2023, 2024 and 2025 and the consolidated balance sheet data as of June 30, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements set forth in “Item 18 – Financial Statements”.
Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2025, 2026 and 2027. Directors of each class are chosen for three-year terms upon the expiration of their current terms, and each year one class of directors is elected by the shareholders.
Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2026, 2027 and 2028. Directors of each class are chosen for three-year terms upon the expiration of their current terms, and each year one class of directors is elected by the shareholders.
These measures may cause decreased economic activity in China, which may adversely affect our future business and operating results. Adverse changes in China’s political, economic or social conditions or government policies could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially adversely affect our competitive position.
These measures may cause decreased economic activity in China, which may adversely affect our future business and operating results. 25 Table of Contents Adverse changes in China’s political, economic or social conditions or government policies could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially adversely affect our competitive position.
There are no such similar foreign exchange restrictions in the Cayman Islands. 14 Table of Contents Our certificates, permits, and license are subject to governmental control and renewal, and the failure to obtain renewal would cause all or part of our operations to be suspended and may have a material adverse effect on our financial condition.
There are no such similar foreign exchange restrictions in the Cayman Islands. Our certificates, permits, and license are subject to governmental control and renewal, and the failure to obtain renewal would cause all or part of our operations to be suspended and may have a material adverse effect on our financial condition.
Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business and the public announcement of such deficiencies could adversely impact our stock price. 34 Table of Contents The recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S.
Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business and the public announcement of such deficiencies could adversely impact our stock price. The recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S.
Chen could cause a Domestic Company to fail to take actions that are in the best interests of our Company or to fail to pay dividends to Recon-BJ despite its contractual obligation to do so if making such payment would harm the Domestic Company. 18 Table of Contents As Mr. Yin and Mr.
Chen could cause a Domestic Company to fail to take actions that are in the best interests of our Company or to fail to pay dividends to Recon-BJ despite its contractual obligation to do so if making such payment would harm the Domestic Company. As Mr. Yin and Mr.
As a result, we do not have any business liability or disruption insurance coverage for our operations in China. Any business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources. We may be subject to foreign exchange controls in the PRC.
As a result, we do not have any business liability or disruption insurance coverage for our operations in China. Any business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources. 28 Table of Contents We may be subject to foreign exchange controls in the PRC.
Nationalization or expropriation could even result in the total loss of our investment in China and in the total loss of your investment in us. We may be unable to establish and maintain an effective system of internal control over financial reporting, and as a result we may be unable to accurately report our financial results or prevent fraud.
Nationalization or expropriation could even result in the total loss of our investment in China and in the total loss of your investment in us. 32 Table of Contents We may be unable to establish and maintain an effective system of internal control over financial reporting, and as a result we may be unable to accurately report our financial results or prevent fraud.
Therefore, our Contractual Arrangements with the VIEs may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be. 16 Table of Contents We have no equity ownership interest in the Domestic Companies and rely on contractual arrangements to control and operate such businesses.
Therefore, our Contractual Arrangements with the VIEs may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be. We have no equity ownership interest in the Domestic Companies and rely on contractual arrangements to control and operate such businesses.
These agreements may be breached, and in some instances, we may not have an appropriate remedy available for breach of the agreements. We may be accused of infringing the intellectual property rights of others. In the future, the Domestic Companies and we may receive notices claiming that we are infringing the proprietary rights of third parties.
These agreements may be breached, and in some instances, we may not have an appropriate remedy available for breach of the agreements. 10 Table of Contents We may be accused of infringing the intellectual property rights of others. In the future, the Domestic Companies and we may receive notices claiming that we are infringing the proprietary rights of third parties.
We cannot guarantee that shareholders will not lose some of their entire investment in our securities. There has been and may continue to be significant volatility in the volume and price of our ordinary shares on the Nasdaq Capital Market. The market price of our ordinary shares has been and may continue to be highly volatile.
We cannot guarantee that shareholders will not lose some of their entire investment in our securities. 35 Table of Contents There has been and may continue to be significant volatility in the volume and price of our ordinary shares on the Nasdaq Capital Market. The market price of our ordinary shares has been and may continue to be highly volatile.
The PRC economy differs from the economies of most developed countries in many respects, including: ● the higher level of government involvement; ● the early stage of development of the market-oriented sector of the economy; ● the relatively rapid growth rate; 26 Table of Contents ● the higher level of control over foreign exchange; and ● the allocation policies of resources.
The PRC economy differs from the economies of most developed countries in many respects, including: ● the higher level of government involvement; ● the early stage of development of the market-oriented sector of the economy; ● the relatively rapid growth rate; ● the higher level of control over foreign exchange; and ● the allocation policies of resources.
This could have a material and adverse effect on the value of your investment in us and the price of our Class A Ordinary Shares. 31 Table of Contents Risk of potential adverse impact on our business and operations in China due to tax compliance issues in equity transfers of our PRC subsidiaries.
This could have a material and adverse effect on the value of your investment in us and the price of our Class A Ordinary Shares. Risk of potential adverse impact on our business and operations in China due to tax compliance issues in equity transfers of our PRC subsidiaries.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. 24 Table of Contents From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
Finally, Cayman Islands companies may not have standing to initiate shareholder derivative action before the federal courts of the United States.
Finally, Cayman Islands companies may not have stood to initiate shareholder derivative action before the federal courts of the United States.
The development of FGS depends on its cooperation with gas stations. At present, most of the gas stations in China are owned by the sales companies of PetroChina and Sinopec, so FGS’s business expansion is largely dependent on the development of electronic payment systems and online settlement systems of these major oil companies and their cooperation decisions.
At present, most of the gas stations in China are owned by the sales companies of PetroChina and Sinopec, so FGS’s business expansion is largely dependent on the development of electronic payment systems and online settlement systems of these major oil companies and their cooperation decisions.
In the event that there is a lack of inspection or if Enrome LLP, Marcum Asia or Friedman are unable to permit an inspection by the PCAOB, however unlikely, our shares would be prohibited under the HFCA Act which may lead a securities exchange to determine to delist our shares.
In the event that there is a lack of inspection or if Enrome LLP is unable to permit an inspection by the PCAOB, however unlikely, our shares would be prohibited under the HFCA Act which may lead a securities exchange to determine to delist our shares.
We first began to provide services to CNPC in 2000. CNPC accounted for approximately 48%, 43% and 50% of our revenue in the fiscal years ended June 30, 2024, 2023 and 2022, respectively, and any termination of our business relationships with CNPC would materially harm our operations.
We first began to provide services to CNPC in 2000. CNPC accounted for approximately 44%, 48% and 43% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and any termination of our business relationships with CNPC would materially harm our operations.
If we are unable to continually improve our software and hardware to address the changing needs of the Chinese petroleum industry, we may experience a significant decline in the demand for the Domestic Companies’ and our products and services. In such a scenario, our revenue may significantly decline.
If we are unable to continually improve our software and hardware to address the changing needs of the Chinese petroleum industry, we may experience a significant decline in the demand for the Domestic Companies’ and our products and services.
We recognize revenue when it is realized and earned. Revenue is recognized based on the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.
Revenue is recognized based on the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.
To the extent that we choose to utilize the home country exemption for corporate governance matters, our shareholders may be afforded less protection than they otherwise would under the NASDAQ Capital Market corporate governance listing standards applicable to U.S. domestic issuers. We follow home country practice with respect to annual shareholders meetings.
To the extent that we choose to utilize the home country exemption for corporate governance matters, our shareholders may be afforded less protection than they otherwise would under the NASDAQ Capital Market corporate governance listing standards applicable to U.S. domestic issuers.
You may experience future dilution as a result of future equity offerings. In order to raise additional capital, we may in the future offer additional Class A Ordinary Shares or other securities convertible into or exchangeable for our Class A Ordinary Shares at prices that may not be the same as the price per share you paid.
In order to raise additional capital, we may in the future offer additional Class A Ordinary Shares or other securities convertible into or exchangeable for our Class A Ordinary Shares at prices that may not be the same as the price per share you paid.
The market price for our Class A Ordinary Shares has been, and is likely to remain, volatile and subject to wide fluctuations in response to factors including the following: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in the Chinese petroleum and energy industries; ● changes in the Chinese economy; ● announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● future sales of our Class A Ordinary Shares; ● period to period fluctuations in our financial results; ● low trading volume of our Class A Ordinary Shares; ● additions or departures of key personnel; or ● potential litigation. 37 Table of Contents We expect that any other securities of our Company are likely to be similarly volatile.
The market price for our Class A Ordinary Shares has been, and is likely to remain, volatile and subject to wide fluctuations in response to factors including the following: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in the Chinese petroleum and energy industries; ● changes in the Chinese economy; ● announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● future sales of our Class A Ordinary Shares; ● period to period fluctuations in our financial results; ● low trading volume of our Class A Ordinary Shares; ● additions or departures of key personnel; or ● potential litigation.
If any of the Domestic Companies or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses; ● discontinuing or restricting the operations; ● imposing conditions or requirements with which the PRC entities may not be able to comply; ● requiring us and our PRC entities to restructure the relevant ownership structure or operations, including termination of the contractual agreements with the VIE and deregistering the equity pledge of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control the VIE; ● imposing fines or confiscating the income from our PRC subsidiaries or the VIE.
If any of the Domestic Companies or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses; ● discontinuing or restricting the operations; ● imposing conditions or requirements with which the PRC entities may not be able to comply; ● requiring us and our PRC entities to restructure the relevant ownership structure or operations, including termination of the contractual agreements with the VIE and deregistering the equity pledge of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control the VIE; ● imposing fines or confiscating the income from our PRC subsidiaries or the VIE. 16 Table of Contents The imposition of any of these penalties would severely disrupt our ability to conduct business and have a material adverse effect on our financial condition, results of operations and prospects.
A failure by our third-party vendors to fulfill their obligations would negatively affect our ability to operate profitably. In the ordinary course of business, our third-party vendors have historically required advance payments before they deliver goods and services to us that enable our operations.
In such a scenario, our revenue may significantly decline. 9 Table of Contents A failure by our third-party vendors to fulfill their obligations would negatively affect our ability to operate profitably. In the ordinary course of business, our third-party vendors have historically required advance payments before they deliver goods and services to us that enable our operations.
A we developed new product lines, revenue from Sinopec increased and account for 19%, 32% and 28% of our revenue in the fiscal years ended June 30, 2024, 2023 and 2022, respectively. 12 Table of Contents We provide products and services to CNPC under a series of agreements, each of which is terminable without notice.
As we developed new product lines, revenue from Sinopec increased and accounted for 17%, 19% and 32% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively. We provide products and services to CNPC under a series of agreements, each of which is terminable without notice.
In addition, we may, from time to time, experience difficulties relating to the integration of the Domestic Companies’ and our software products with other hardware or software in the customer’s environment that are unrelated to defects in such software products.
We may also experience delays in shipment of our software during the period required to correct such errors. In addition, we may, from time to time, experience difficulties relating to the integration of the Domestic Companies’ and our software products with other hardware or software in the customer’s environment that are unrelated to defects in such software products.
Our standard software license agreements contain an infringement indemnity clause under which we agree to indemnify and hold harmless our customers and business partners against liability and damages arising from claims of various copyright or other intellectual property infringement by our products.
Our standard software license agreements contain an infringement indemnity clause under which we agree to indemnify and hold harmless our customers and business partners against liability and damages arising from claims of various copyright or other intellectual property infringement by our products. Neither the Domestic Companies nor we have been the subject of an intellectual property claim since our formation.
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 effect changes, subject to any applicable fiduciary obligations, at the management and operational level.
In addition, these agreements have not been tested in a court of law. 15 Table of Contents 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 effect changes, subject to any applicable fiduciary obligations, at the management and operational level.
If we cannot resolve any conflict of interest or dispute between us and the shareholders, we would have to 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.
If we cannot resolve any conflict of interest or dispute between us and the shareholders, we would have to 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. 17 Table of Contents The principal shareholders of the Domestic Companies have potential conflicts of interest with us, which may adversely affect our business.
This situation may lead to inefficiencies and additional costs without generating revenue, ultimately impacting the company’s profitability and financial health. The ongoing renewal of the ICP license without active use may also raise concerns among regulatory authorities about the validity of the license and the company’s intentions. This could lead to increased scrutiny or potential regulatory compliance issues.
The ongoing renewal of the ICP license without active use may also raise concerns among regulatory authorities about the validity of the license and the company’s intentions. This could lead to increased scrutiny or potential regulatory compliance issues.
In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies. 30 Table of Contents PRC regulations relating to the establishment of offshore special purpose vehicles by PRC residents, if applied to us, may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into Recon-IN and Recon-BJ, limit Recon-IN’s and Recon-BJ’s ability to distribute profits to us or otherwise materially adversely affect us.
PRC regulations relating to the establishment of offshore special purpose vehicles by PRC residents, if applied to us, may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into Recon-IN and Recon-BJ, limit Recon-IN’s and Recon-BJ’s ability to distribute profits to us or otherwise materially adversely affect us.
Historically, we derived the majority of our revenue from two customers, (i) China National Petroleum Corporation (“CNPC”) and (ii) China Petroleum and Chemical Corporation (“Sinopec”). Since the fiscal year ended June 30, 2017, Sinopec accounted for less than 10% of our revenue.
Our contracts with such customers may be terminated at any time, materially and adversely affecting our business. Historically, we derived the majority of our revenue from two customers, (i) China National Petroleum Corporation (“CNPC”) and (ii) China Petroleum and Chemical Corporation (“Sinopec”). Since the fiscal year ended June 30, 2017, Sinopec accounted for less than 10% of our revenue.
According to the Cybersecurity Review Measures promulgated by the Cyberspace Administration of China and certain other PRC regulatory authorities in April 2020, which became effective in June 2020, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. 27 Table of Contents On June 10, 2021, the Standing Committee of the National People’s Congress of China promulgated the Data Security Law which shall take effect in September 1, 2021.
According to the Cybersecurity Review Measures promulgated by the Cyberspace Administration of China and certain other PRC regulatory authorities in April 2020, which became effective in June 2020, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.
Liu Jia, our Chief Financial Officer. Our performance is substantially dependent on the performance of our executive officers and key employees. In particular, we rely on the services of: ● Mr. Yin Shenping, Chief Executive Officer; ● Mr. Chen Guangqiang, Chief Technology Officer; and ● Ms. Liu Jia, Chief Financial Officer. Each of these individuals would be difficult to replace.
We are substantially dependent upon our key personnel, particularly Mr. Yin Shenping, our Chief Executive Officer, Mr. Chen Guangqiang, our Chief Technology Officer and Ms. Liu Jia, our Chief Financial Officer. Our performance is substantially dependent on the performance of our executive officers and key employees. In particular, we rely on the services of: ● Mr.
If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business, prohibition against new user registration (even for a short period of time) and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected. 28 Table of Contents It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China.
If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business, prohibition against new user registration (even for a short period of time) and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected.
These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds of any other offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary Shares.
These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds of any other offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary Shares. 31 Table of Contents Also, if the CSRC later requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver.
On April 1, 2019, as part of our planned organizational restructuring, Recon-BJ entered into a series of VIE agreements with BHD and Nanjing Recon, respectively, under the same terms and conditions as that of the VIE agreements previously entered into by Recon-JN. As a result, the VIEs were effectively transferred from Recon-JN to Recon-BJ. Our beneficial owners, Mr.
On April 1, 2019, as part of our planned organizational restructuring, Recon-BJ entered into a series of VIE agreements with BHD and Nanjing Recon, respectively, under the same terms and conditions as that of the VIE agreements previously entered into by Recon-JN. On July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively.
Furthermore, there is no assurance our board of directors will declare dividends even if we are profitable. Dividend policy is subject to the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors.
Dividend policy is subject to the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors.
Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries. 32 Table of Contents Among other things, the M&A Rules include new provisions that purport to require that an offshore SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.
Among other things, the M&A Rules include new provisions that purport to require that an offshore SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.
Such uncertainties, including uncertainty over the scope and effect of its contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations. 25 Table of Contents We are also subject to the legal and operational risks associated with being based in and having substantially all operations in China.
Such uncertainties, including uncertainty over the scope and effect of its contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.
Demand for our services could be harmed by volatility in those industries. There can be no assurance that we will be able to continue our historical revenue growth or sustain our profitability on a quarterly or annual basis or that our results of operations will not be adversely affected by continuing or future volatility in those industries.
There can be no assurance that we will be able to continue our historical revenue growth or sustain our profitability on a quarterly or annual basis or that our results of operations will not be adversely affected by continuing or future volatility in those industries. 11 Table of Contents Our revenue are highly dependent on a very limited number of customers, which subjects our business to high seasonality.
Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of our operations, it may adversely affect our results of operations and profitability.
Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of our operations, it may adversely affect our results of operations and profitability. Failure to renew expired Hazardous Waste Operating Permit and unutilized ICP License could adversely affect our operations and financial performance.
Chen Guangqiang and Mr. Yin Shenping, both PRC residents, initially completed their SAFE registration at the Jining branch of SAFE. However, they failed to comply with the required procedures to update and amend their SAFE registration in a timely manner. Failure to register or comply with relevant requirements may subject Mr. Chen, Mr.
Chen Guangqiang and Mr. Yin Shenping, both PRC residents, initially completed their SAFE registration at the Jining branch of SAFE. We are under the process to amend and update the filing for Mr. Yin and Chen in Beijing. 23 Table of Contents Failure to register or comply with relevant requirements may subject Mr. Chen, Mr.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. As a result, to the extent shareholders sell our securities in negative market fluctuation, they may not receive a price per share that is based solely upon our business performance.
As a result, to the extent shareholders sell our securities in negative market fluctuation, they may not receive a price per share that is based solely upon our business performance.
Changes in the value of the RMB against the U.S. dollar and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on the value of, and any dividends payable on our shares in U.S. dollar terms.
Any significant revaluation of the RMB may have a material adverse effect on the value of, and any dividends payable on our shares in U.S. dollar terms.
We do not plan to enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all.
We do not plan to enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.
Please also read carefully the section above entitled “Special Note Regarding Forward-Looking Statements.” Risks Related to Our Business We operate in a very competitive industry and may not be able to maintain our revenue and profitability. Since the 1990s, several international companies engaged in supplying integrated automation services for the petroleum extraction industry have been qualified in China.
Please also read carefully the section above entitled “Special Note Regarding Forward-Looking Statements.” 8 Table of Contents Risks Related to Our Business We operate in a very competitive industry and may not be able to maintain our revenue and profitability.
We are a holding company with no operations of our own and substantially all of our operations are conducted through Nanjing Recon and BHD, hereafter referred to as the Domestic Companies, which are established as variable interest entities (“VIEs”) under the laws of the PRC.
If we decide to pay dividends on any of our Class A Ordinary Shares in the future, we will be dependent, in large part, on receipt of funds from the Domestic Companies. 13 Table of Contents We are a holding company with no operations of our own and substantially all of our operations are conducted through Nanjing Recon and BHD, hereafter referred to as the Domestic Companies, which are established as variable interest entities (“VIEs”) under the laws of the PRC.
We cannot assure you, however, that the regulators will not take a contrary view or will not subsequently require us to undergo the approval procedures and subject us to penalties for non-compliance.
As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. We cannot assure you, however, that the regulators will not take a contrary view or will not subsequently require us to undergo the approval procedures and subject us to penalties for non-compliance.
Such potential delisting would substantially impair your ability to sell or purchase our shares when you wish to do so, and such risk and uncertainty associated with a potential delisting due to a lack of inspection would have a negative impact on the price of our shares. 23 Table of Contents Additional compliance procedures may be required due to the promulgation of the new filing-based administrative rules for overseas offering and listing by domestic companies in China, which could significantly limit or completely hinder our ability to offer or continue to offer our Ordinary Shares to investors and could cause the value of our Ordinary Shares to significantly decline or become worthless.
Additional compliance procedures may be required due to the promulgation of the new filing-based administrative rules for overseas offering and listing by domestic companies in China, which could significantly limit or completely hinder our ability to offer or continue to offer our Ordinary Shares to investors and could cause the value of our Ordinary Shares to significantly decline or become worthless.
This agreement marks an important step towards resolving the audit oversight issue that concern mutual interests, and sets forth arrangements for both sides to cooperate in conducting inspections and investigations of relevant audit firms, and specifies the purpose, scope and approach of cooperation, as well as the use of information and protection of specific types of data.
This agreement marks an important step towards resolving the audit oversight issue that concern mutual interests, and sets forth arrangements for both sides to cooperate in conducting inspections and investigations of relevant audit firms, and specifies the purpose, scope and approach of cooperation, as well as the use of information and protection of specific types of data. 33 Table of Contents On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations.
Banks shall directly examine and handle foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, and SAFE and its branch shall indirectly regulate the foreign exchange registration of direct investment through banks. 24 Table of Contents In 2008, to protect our shareholders from possible future foreign ownership restrictions, our Founders signed a series of agreements with Recon-JN, BHD and Nanjing Recon, so Recon-JN became the primary beneficiary of BHD and Nanjing Recon for accounting purposes.
In 2008, to protect our shareholders from possible future foreign ownership restrictions, our Founders signed a series of agreements with Recon-JN, BHD and Nanjing Recon, so Recon-JN became the primary beneficiary of BHD and Nanjing Recon for accounting purposes.
As such, our majority stake in FGS presents both a substantial investment in the downstream of the oil industry and comprises a large part of our operations. As such, our controlling interest in FGS represents both a significant investment in the downstream of the oil industry and a large part of our business.
As such, our controlling interest in FGS represents both a significant investment in the downstream of the oil industry and a large part of our business. The development of FGS depends on its cooperation with gas stations.
We may suffer a significant loss on our substantial investment in FGS. Our contractual arrangements with the Domestic Companies may result in adverse tax consequences to us.
FGS is currently exploring new business ventures and client acquisition opportunities; however, there is no guarantee of success. We may suffer a significant loss on our substantial investment in FGS. Our contractual arrangements with the Domestic Companies may result in adverse tax consequences to us.
The principal shareholders of the Domestic Companies have potential conflicts of interest with us, which may adversely affect our business. Yin Shenping, our Chief Executive Officer, and Chen Guangqiang, our Chief Technology Officer, are significant shareholders in our company. They are also the principal shareholders of each of the Domestic Companies and collectively control the Domestic Companies.
Shenping Yin, our Chief Executive Officer, and Guangqiang Chen, our Chief Technology Officer, are significant shareholders in our company. They are also the principal shareholders of each of the Domestic Companies and collectively control the Domestic Companies. Conflicts of interests between their duties to our company and the respective Domestic Companies may arise. For example, Mr. Yin and Mr.
We rely on a combination of trademark, trade secret, nondisclosure, copyright and patent law to protect the Domestic Companies’ and our software and hardware, which may afford only limited protection. 10 Table of Contents Although the Chinese government has issued Nanjing Recon and BHD over fifty copyrights on software and Nanjing Recon and BHD over sixty patents on products, we cannot guarantee that competitors will be unable to develop technologies that are similar or superior to the Domestic Companies’ and our technology.
Although the Chinese government has issued Nanjing Recon and BHD and their subsidiaries over seventy copyrights on software and Nanjing Recon and BHD and their subsidiaries over fifty patents on products, we cannot guarantee that competitors will be unable to develop technologies that are similar or superior to the Domestic Companies’ and our technology.
We currently intend to retain our future earnings, if any, to finance the operation and growth of our business and currently do not plan to pay any cash dividends in the foreseeable future. 36 Table of Contents Future sales of a significant number of our Class A Ordinary Shares in the public markets, or the perception that such sales could occur, could depress the market price of our Class A Ordinary Shares.
We have never paid cash dividends on our Class A Ordinary Shares. We currently intend to retain our future earnings, if any, to finance the operation and growth of our business and currently do not plan to pay any cash dividends in the foreseeable future.
Pursuant to the Trial Administrative Measures, we have to file with the CSRC with respect to public offering, and the CSRC will conclude the filing procedures and publish the filing results on the CSRC website within twenty working days after receiving the filing documents, if the filing documents are complete and in compliance with stipulated requirements.
The required filing materials with the CSRC in relation to the offering in the same overseas market include (without limitation): (i) record-filing reports and related undertakings; and (ii) PRC legal opinions issued by domestic law firms (with related undertakings). 22 Table of Contents Pursuant to the Trial Administrative Measures, we have to file with the CSRC with respect to public offering, and the CSRC will conclude the filing procedures and publish the filing results on the CSRC website within twenty working days after receiving the filing documents, if the filing documents are complete and in compliance with stipulated requirements.
Despite extensive testing, we may, from time to time, discover defects or errors in the Domestic Companies’ and our software only after use by a customer. We may also experience delays in shipment of our software during the period required to correct such errors.
Our software products may contain integration challenges, design defects or software errors that could be difficult to detect and correct. Despite extensive testing, we may, from time to time, discover defects or errors in the Domestic Companies’ and our software only after use by a customer.
For example, the Energy Law of the People’s Republic of China (Draft), issued on April 26, 2024, is China’s first draft energy law that encourages the optimization of the layout and structure of the petroleum processing and conversion industry through the use of advanced and intensive processing methods, though it has not yet come into effect.
For example, the Energy Law of the People’s Republic of China , adopted on November 8, 2024, and took effect on January 1, 2025, is China’s first comprehensive energy law. It encourages, among other things, the optimization of the layout and structure of the petroleum processing and conversion industry through the use of advanced and intensive processing methods.
The Domestic Companies’ and our technology may not enable our customers to accurately assess the geological characteristics of any new reserves, which may adversely affect their decision to use the Domestic Companies’ and our products in the future.
The Domestic Companies’ and our technology may not enable our customers to accurately assess the geological characteristics of any new reserves, which may adversely affect their decision to use the Domestic Companies’ and our products in the future. 12 Table of Contents We are heavily dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have to actively compete for their services.
These competitors have significantly greater financial and marketing resources and name recognition than we have. In addition, at least five domestic private competitors also compete with us, and more competitors may enter the market as Chinese petroleum companies seek to reduce oil production costs and improve efficiencies.
In addition, at least five domestic private competitors also compete with us, and more competitors may enter the market as Chinese petroleum companies seek to reduce oil production costs and improve efficiencies. There can be no assurance that we will be able to compete effectively in our industry. In addition, our competitors may introduce new systems.
We do not intend to pay dividends in the foreseeable future and there are certain restrictions on the payment of dividend under PRC laws. We have not previously paid any cash dividends, and we do not anticipate paying any dividends on our Class A Ordinary Shares.
We have not previously paid any cash dividends, and we do not anticipate paying any dividends on our Class A Ordinary Shares. As we intend to remain in a growth mode, we intend to reinvest any profits in the foreseeable future to grow the business.
For example, BHD could fail to take actions required for our business or fail to pay dividends to Recon-BJ despite its contractual obligation to do so. If the Domestic Companies fail to perform under their agreements with us, we may have to rely on legal remedies under PRC law, which may not be effective.
If the Domestic Companies fail to perform under their agreements with us, we may have to rely on legal remedies under PRC law, which may not be effective.
Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China.
For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China.
There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Additionally, the absence of such certificates may lead to further scrutiny by tax authorities, which could result in delays or additional costs in completing future transactions involving equity transfers. 30 Table of Contents There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Compliance with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, including data security and personal information protection laws, may result in additional expenses to us and subject us to negative publicity, which could harm our reputation among users and negatively affect the trading price of our shares in the future.
Although we believe we currently are not required to obtain clearance from the Cyberspace Administration of China under the Measures for Cybersecurity Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities, we face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance can be timely obtained, or at all. 27 Table of Contents Compliance with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, including data security and personal information protection laws, may result in additional expenses to us and subject us to negative publicity, which could harm our reputation among users and negatively affect the trading price of our shares in the future.
Any of these competitive factors could have a material adverse effect on our revenue and profitability. 9 Table of Contents We must continually research and develop new technologies and products to remain competitive. Because our industry is so competitive, we will need to continually research, develop and refine new technologies and offer new products to compete effectively.
Because our industry is so competitive, we will need to continually research, develop and refine new technologies and offer new products to compete effectively.
As the energy consumption market opened to private and foreign companies, and as the online payment technology continually developed, we began investing in the downstream oil industry. Over the years, we developed a close relationship with Future Gas Station (Beijing) (also referred to as “FGS”) and we now own 51% of the equity of FGS.
Over the years, we developed a close relationship with Future Gas Station (Beijing) (also referred to as “FGS”) and we now own 51% of the equity of FGS. As such, our majority stake in FGS presents both a substantial investment in the downstream of the oil industry and comprises a large part of our operations.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

59 edited+24 added−7 removed179 unchanged
Biggest changeDollar and RMB. ” Select Condensed Financial Statements on Consolidated VIEs The following table below provides a condensed consolidating schedule depicting the financial position, cash flows, and results of operations for the parent, the consolidated VIEs, and any eliminating adjustments separately as of the same dates and for the same periods for which audited consolidated financial statements are required. ​ 45 Table of Contents SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2024 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ¥ — ¥ — ¥ 68,854,280 ¥ — ¥ 68,854,280 Cost of Revenue ​ — ​ 135,705 ​ 47,841,131 ​ — ​ 47,976,836 Gross Profit ​ — ​ (135,705) ​ ​ 21,013,149 ​ ​ — ​ ​ 20,877,444 Operating expenses ​ ​ 44,012,602 ​ ​ 3,200,926 ​ ​ 45,301,827 ​ ​ — ​ ​ 92,515,355 Loss from operations ​ ​ (44,012,602) ​ ​ (3,336,631) ​ ​ (24,288,678) ​ ​ — ​ ​ (71,637,911) Other income (expenses), net ​ ​ 16,452,789 ​ ​ (778,939) ​ ​ 4,528,251 ​ ​ — ​ ​ 20,202,101 Loss from subsidiaries ​ ​ — ​ ​ (18,195,846) ​ ​ — ​ ​ 18,195,846 ​ ​ — Loss from VIEs ​ ​ (22,311,446) ​ ​ — ​ ​ — ​ ​ 22,311,446 ​ ​ — Income tax expenses ​ ​ — ​ ​ 30 ​ ​ — ​ ​ — ​ ​ 30 Net loss ​ ​ (49,871,259) ​ ​ (22,311,446) ​ ​ (19,760,427) ​ ​ 40,507,292 ​ ​ (51,435,840) Non-controlling interest ​ ​ — ​ ​ — ​ ​ (1,564,581) ​ ​ — ​ ​ (1,564,581) Net Loss Attributable to Recon Technology, Ltd ​ ¥ (49,871,259) ​ ¥ (22,311,446) ​ ¥ (18,195,846) ​ ¥ 40,507,292 ​ ¥ (49,871,259) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2023 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ​ ¥ — ​ ¥ — ​ ¥ 67,114,378 ​ ¥ — ​ ¥ 67,114,378 Cost of Revenue ​ — ​ ​ — ​ ​ 48,247,395 ​ ​ — ​ ​ 48,247,395 Gross Profit ​ — ​ ​ — ​ ​ 18,866,983 ​ ​ — ​ ​ 18,866,983 Operating expenses ​ ​ 50,352,631 ​ ​ 1,343,355 ​ ​ 36,503,732 ​ ​ — ​ ​ 88,199,718 Loss from operations ​ ​ (50,352,631) ​ ​ (1,343,355) ​ ​ (17,636,749) ​ ​ — ​ ​ (69,332,735) Other income (expenses), net ​ ​ 16,224,783 ​ ​ 343,437 ​ ​ (8,693,538) ​ ​ — ​ ​ 7,874,682 Loss from subsidiaries ​ ​ — ​ ​ (24,039,535) ​ ​ — ​ ​ 24,039,535 ​ ​ — Loss from VIEs ​ ​ (25,039,453) ​ ​ — ​ ​ — ​ ​ 25,039,453 ​ ​ — Income tax expenses ​ ​ — ​ ​ — ​ ​ 18,339 ​ ​ — ​ ​ 18,339 Net loss ​ ​ (59,167,301) ​ ​ (25,039,453) ​ ​ (26,348,626) ​ ​ 49,078,988 ​ ​ (61,476,392) Non-controlling interest ​ ​ — ​ ​ — ​ ​ (2,309,091) ​ ​ — ​ ​ (2,309,091) Net Loss Attributable to Recon Technology, Ltd ​ ¥ (59,167,301) ​ ¥ (25,039,453) ​ ¥ (24,039,535) ​ ¥ 49,078,988 ​ ¥ (59,167,301) ​ ​ 46 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2022 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ​ ¥ — ​ ¥ — ​ ¥ 83,777,571 ​ ¥ — ​ ¥ 83,777,571 Cost of Revenue ​ — ​ ​ — ​ ​ 64,352,834 ​ ​ — ​ ​ 64,352,834 Gross Profit ​ — ​ ​ — ​ ​ 19,424,737 ​ ​ — ​ ¥ 19,424,737 Operating expenses ​ ​ 64,842,004 ​ ​ 1,170,913 ​ ​ 35,725,237 ​ ​ — ​ ​ 101,738,154 Loss from operations ​ ​ (64,842,004) ​ ​ (1,170,913) ​ ​ (16,300,500) ​ ​ — ​ ​ (82,313,417) Other income (expenses), net ​ ​ 178,590,691 ​ ​ (108,074) ​ ​ (2,493,679) ​ ​ — ​ ​ 175,988,938 Loss from subsidiaries ​ ​ — ​ ​ (16,882,905) ​ ​ — ​ ​ 16,882,905 ​ ​ — Loss from VIEs ​ ​ (18,161,892) ​ ​ — ​ ​ — ​ ​ 18,161,892 ​ ​ — Income tax benefit ​ ​ — ​ ​ — ​ ​ (613,874) ​ ​ — ​ ​ (613,874) Net loss ​ ​ 95,586,795 ​ ​ (18,161,892) ​ ​ (18,180,305) ​ ​ 35,044,797 ​ ​ 94,289,395 Non-controlling interest ​ ​ — ​ ​ — ​ ​ (1,297,400) ​ ​ — ​ ​ (1,297,400) Net income(loss) Attributable to Recon Technology, Ltd ​ ¥ 95,586,795 ​ ¥ (18,161,892) ​ ¥ (16,882,905) ​ ¥ 35,044,797 ​ ¥ 95,586,795 ​ ​ 47 Table of Contents SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2024 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 16,473,018 ​ ¥ 58,161,122 ​ ¥ 35,357,534 ​ ¥ — ​ ¥ 109,991,674 Restricted cash ​ — ​ ​ — ​ ​ 848,936 ​ ​ — ​ ​ 848,936 Short-term investments ​ 88,091,794 ​ ​ — ​ ​ — ​ ​ — ​ ​ 88,091,794 Other current assets ​ 170,158,947 ​ ​ 13,263,107 ​ ​ 125,157,390 ​ ​ — ​ ​ 308,579,444 Intercompany receivables ​ 375,736,992 ​ ​ 157,821,815 ​ ​ — ​ ​ (533,558,807) ​ ​ — Total current assets ​ 650,460,751 ​ ​ 229,246,044 ​ ​ 161,363,860 ​ ​ (533,558,807) ​ ​ 507,511,848 Investments in subsidiaries and VIEs ​ ​ (145,408,577) ​ ​ — ​ ​ — ​ ​ 145,408,577 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ ​ — ​ ​ (129,879,588) ​ ​ — ​ ​ 129,879,588 ​ ​ — Other non-current assets ​ ​ — ​ ​ 15,044,379 ​ ​ 29,833,287 ​ ​ — ​ ​ 44,877,666 Total non-current assets ​ ​ (145,408,577) ​ ​ (114,835,209) ​ ​ 29,833,287 ​ ​ 275,288,165 ​ ​ 44,877,666 Total Assets ​ ​ 505,052,174 ​ ​ 114,410,835 ​ ​ 191,197,147 ​ ​ (258,270,642) ​ ​ 552,389,514 Intercompany payables ​ ​ — ​ ​ 264,135,617 ​ ​ 269,423,190 ​ ​ (533,558,807) ​ ​ — Other liabilities and accrued liabilities ​ ​ 2,497,637 ​ ​ 432,795 ​ ​ 58,525,185 ​ ​ — ​ ​ 61,455,617 Total Liabilities ​ ​ 2,497,637 ​ ​ 264,568,412 ​ ​ 327,948,375 ​ ​ (533,558,807) ​ ​ 61,455,617 Class A common stock, $0.0001 U.S. dollar par value,500,000,000 shares authorized; 2,306,295 shares and 7,987,959 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* ​ 99,634 ​ ​ — ​ ​ — ​ ​ — ​ ​ 99,634 Class B common stock, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* ​ 4,693 ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,693 Additional paid-in capital ​ ​ 681,476,717 ​ ​ — ​ ​ 4,749,000 ​ ​ (4,749,000) ​ ​ 681,476,717 Retained earnings ​ ​ (216,163,156) ​ ​ (125,967,252) ​ ​ (112,989,285) ​ ​ 238,956,537 ​ ​ (216,163,156) Accumulated other comprehensive income ​ ​ 37,136,649 ​ ​ (24,190,325) ​ ​ (16,890,303) ​ ​ 41,080,628 ​ ​ 37,136,649 Total Shareholders’ Equity ​ ​ 502,554,537 ​ ​ (150,157,577) ​ ​ (125,130,588) ​ ​ 275,288,165 ​ ​ 502,554,537 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (11,620,640) ​ ​ — ​ ​ (11,620,640) Total Liabilities and Equity ​ ¥ 505,052,174 ​ ¥ 114,410,835 ​ ¥ 191,197,147 ​ ¥ (258,270,642) ​ ¥ 552,389,514 * Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 48 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2023 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 54,864,089 ​ ¥ 11,600,593 ​ ¥ 37,661,118 ​ ¥ — ​ ¥ 104,125,800 Restricted cash ​ — ​ ​ — ​ ​ 731,545 ​ ​ — ​ ​ 731,545 Short-term investments ​ 184,184,455 ​ ​ — ​ ​ — ​ ​ — ​ ​ 184,184,455 Other current assets ​ 77,134,062 ​ ​ 35,567 ​ ​ 138,201,744 ​ ​ — ​ ​ 215,371,373 Intercompany receivables ​ 291,525,426 ​ ​ 156,313,805 ​ ​ — ​ ​ (447,839,231) ​ ​ — Total current assets ​ 607,708,032 ​ ​ 167,949,965 ​ ​ 176,594,407 ​ ​ (447,839,231) ​ ​ 504,413,173 Investments in subsidiaries and VIEs ​ (122,920,490) ​ ​ — ​ ​ — ​ ​ 122,920,490 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ ​ — ​ ​ (111,196,475) ​ ​ — ​ ​ 111,196,475 ​ ​ — Other non-current assets ​ ​ — ​ ​ — ​ ​ 27,411,404 ​ ​ — ​ ​ 27,411,404 Total non-current assets ​ ​ (122,920,490) ​ ​ (111,196,475) ​ ​ 27,411,404 ​ ​ 234,116,965 ​ ​ 27,411,404 Total Assets ​ ​ 484,787,542 ​ ​ 56,753,490 ​ ​ 204,005,811 ​ ​ (213,722,266) ​ ​ 531,824,577 Intercompany payables ​ ​ — ​ ​ 183,903,309 ​ ​ 263,935,922 ​ ​ (447,839,231) ​ ​ — Other liabilities and accrued liabilities ​ ​ 35,580,580 ​ ​ 519,671 ​ ​ 56,573,423 ​ ​ 92,673,674 ​ ​ — Total Liabilities ​ ​ 35,580,580 ​ ​ 184,422,980 ​ ​ 320,509,345 ​ ​ (447,839,231) ​ ​ 92,673,674 Class A common stock, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 1,704,766 shares and 2,306,295 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* ​ 26,932 ​ ​ — ​ ​ — ​ ​ — ​ ​ 26,932 Class B common stock, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 4,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* ​ ​ 4,693 ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,693 Additional paid-in capital ​ ​ 580,340,061 ​ ​ — ​ ​ 4,749,000 ​ ​ (4,749,000) ​ ​ 580,340,061 Retained earnings ​ ​ (166,291,897) ​ ​ (103,655,803) ​ ​ (94,793,438) ​ ​ 198,449,241 ​ ​ (166,291,897) Accumulated other comprehensive income ​ ​ 35,127,173 ​ ​ (24,013,687) ​ ​ (16,403,037) ​ ​ 40,416,724 ​ ​ 35,127,173 Total Shareholders’ Equity ​ ​ 449,206,962 ​ ​ (127,669,490) ​ ​ (106,447,475) ​ ​ 234,116,965 ​ ​ 449,206,962 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (10,056,059) ​ ​ — ​ ​ (10,056,059) Total Liabilities and Equity ​ ¥ 484,787,542 ​ ¥ 56,753,490 ​ ¥ 204,005,811 ​ ¥ (213,722,266) ​ ¥ 531,824,577 *Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 49 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2022 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 296,838,959 ​ ¥ 2,102,232 ​ ¥ 18,033,666 ​ ¥ — ​ ¥ 316,974,857 Restricted cash ​ — ​ ​ — ​ ​ 723,560 ​ ​ — ​ ​ 723,560 Other current assets ​ 20,364,424 ​ ​ 4,851 ​ ​ 107,549,349 ​ ​ — ​ ​ 127,918,624 Intercompany receivables ​ 205,224,961 ​ ​ 127,906,141 ​ ​ — ​ ​ (333,131,102) ​ ​ — Total current assets ​ 522,428,344 ​ ​ 130,013,224 ​ ​ 126,306,575 ​ ​ (333,131,102) ​ ​ 445,617,041 Investments in subsidiaries and VIEs ​ (77,566,835) ​ ​ — ​ ​ — ​ ​ 77,566,835 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ — ​ ​ (73,117,024) ​ ​ — ​ ​ 73,117,024 ​ ​ — Other non-current assets ​ ​ — ​ ​ — ​ ​ 44,625,043 ​ ​ — ​ ​ 44,625,043 Total non-current assets ​ ​ (77,566,835) ​ ​ (73,117,024) ​ ​ 44,625,043 ​ ​ 150,683,859 ​ ​ 44,625,043 Total Assets ​ ​ 444,861,509 ​ ​ 56,896,200 ​ ​ 170,931,618 ​ ​ (182,447,243) ​ ​ 490,242,084 Intercompany payables ​ ​ — ​ ​ 138,758,092 ​ ​ 194,373,010 ​ ​ (333,131,102) ​ ​ — Other liabilities and accrued liabilities ​ ​ 24,229,780 ​ ​ 453,943 ​ ​ 52,673,600 ​ ​ — ​ ​ 77,357,323 Total Liabilities ​ ​ 24,229,780 ​ ​ 139,212,035 ​ ​ 247,046,610 ​ ​ (333,131,102) ​ ​ 77,357,323 Class A common stock, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 1,547,415 shares and 1,704,766 shares issued and outstanding as of June 30, 2021 and June 30, 2022, respectively* ​ ​ 19,461 ​ ​ — ​ ​ — ​ ​ — ​ ​ 19,461 Class B common stock, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; nil and 4,100,000 shares issued and outstanding as of June 30, 2021 and June 30, 2022, respectively* ​ 2,604 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,604 Additional paid-in capital ​ ​ 516,426,799 ​ ​ — ​ ​ 4,749,000 ​ ​ (4,749,000) ​ ​ 516,426,799 Retained earnings ​ ​ (107,124,596) ​ ​ (78,616,347) ​ ​ (70,753,901) ​ ​ 149,370,248 ​ ​ (107,124,596) Accumulated other comprehensive income ​ ​ 11,307,461 ​ ​ (3,699,488) ​ ​ (2,363,123) ​ ​ 6,062,611 ​ ​ 11,307,461 Total Shareholders’ Equity ​ ​ 420,631,729 ​ ​ (82,315,835) ​ ​ (68,368,024) ​ ​ 150,683,859 ​ ​ 420,631,729 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (7,746,968) ​ ​ — ​ ​ (7,746,968) Total Liabilities and Equity ​ ¥ 444,861,509 ​ ¥ 56,896,200 ​ ¥ 170,931,618 ​ ¥ (182,447,243) ​ ¥ 490,242,084 *Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 50 Table of Contents SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2024 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ (Hong Kong ​ ​ ​ ​ ​ Consolidated ​ Islands) and PRC) VIE (PRC) Eliminations Total Net cash used in operating activities ​ ¥ (5,802,631) ​ ¥ (9,255,014) ​ ¥ (28,690,288) ​ ​ — ​ ¥ (43,747,933) Net cash provided by (used in) investing activities ​ ​ (261,267,638) ​ ​ (23,219,383) ​ ​ 203,260,432 ​ ​ 84,211,565 ​ ​ 2,984,976 Net cash provided by financing activities ​ ​ 45,094,034 ​ ​ 78,724,299 ​ ​ 5,417,289 ​ ​ (84,211,565) ​ ​ 45,024,057 Effect of exchange rate fluctuation on cash and cash equivalents ​ ​ 2,302,664 ​ ​ 310,627 ​ ​ (891,126) ​ ​ — ​ ​ 1,722,165 Net change in cash ​ ​ (219,673,571) ​ ​ 46,560,529 ​ ​ 179,096,307 ​ ​ — ​ ​ 5,983,265 Opening cash balance ​ ​ 236,146,589 ​ ​ 11,600,593 ​ ​ (142,889,837) ​ ​ — ​ ​ 104,857,345 Restricted cash ​ ​ — ​ ​ — ​ ​ 848,936 ​ ​ — ​ ​ 848,936 Ending cash balance ​ ¥ 16,473,018 ​ ¥ 58,161,122 ​ ¥ 35,357,534 ​ ​ — ​ ¥ 109,991,674 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2023 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ (Hong Kong ​ ​ ​ ​ ​ Consolidated ​ Islands) and PRC) VIE (PRC) Eliminations Total Net cash used in operating activities ​ ¥ (22,888,678) ​ ¥ (964,905) ​ ¥ (27,834,748) ​ ​ — ​ ¥ (51,688,331) Net cash used in investing activities ​ ​ (314,716,414) ​ ​ ​ ​ ​ (16,808,723) ​ ​ 86,300,464 ​ ​ (245,224,673) Net cash provided by financing activities ​ ​ 49,418,344 ​ ​ 16,737,550 ​ ​ 76,527,843 ​ ​ (86,300,464) ​ ​ 56,383,273 Effect of exchange rate fluctuation on cash and cash equivalents ​ ​ 46,211,878 ​ ​ (6,274,284) ​ ​ (12,248,935) ​ ​ — ​ ​ 27,688,659 Net change in cash ​ ​ (241,974,870) ​ ​ 9,498,361 ​ ​ 19,635,437 ​ ​ — ​ ​ (212,841,072) Opening cash balance ​ ​ 296,838,959 ​ ​ 2,102,232 ​ ​ 18,757,226 ​ ​ — ​ ​ 317,698,417 Restricted cash ​ ​ — ​ ​ — ​ ​ 731,545 ​ ​ — ​ ​ 731,545 Ending cash balance ​ ¥ 54,864,089 ​ ¥ 11,600,593 ​ ¥ 37,661,118 ​ ​ — ​ ¥ 104,125,800 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2022 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ Ltd.
Biggest changeDollar and RMB. ” Select Condensed Financial Statements on Consolidated VIEs The following table below provides a condensed consolidating schedule depicting the financial position, cash flows, and results of operations for the parent, the consolidated VIEs, and any eliminating adjustments separately as of the same dates and for the same periods for which audited consolidated financial statements are required. ​ 44 Table of Contents SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2025 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ¥ — ¥ — ¥ 66,285,032 ¥ — ¥ 66,285,032 Cost of Revenue ​ — ​ — ​ 51,044,495 ​ — ​ 51,044,495 Gross Profit ​ — ​ — ​ ​ 15,240,537 ​ ​ — ​ ​ 15,240,537 Operating expenses ​ ​ 27,947,713 ​ ​ 3,238,542 ​ ​ 41,373,994 ​ ​ — ​ ​ 72,560,249 Loss from operations ​ ​ (27,947,713) ​ ​ (3,238,542) ​ ​ (26,133,457) ​ ​ — ​ ​ (57,319,712) Other income, net ​ ​ 8,956,425 ​ ​ 2,373,646 ​ ​ 2,289,944 ​ ​ — ​ ​ 13,620,015 Loss from subsidiaries ​ ​ — ​ ​ (22,732,400) ​ ​ — ​ ​ 22,732,400 ​ ​ — Loss from VIEs ​ ​ (23,597,266) ​ ​ — ​ ​ — ​ ​ 23,597,266 ​ ​ — Income tax expenses ​ ​ — ​ ​ (30) ​ ​ 1,610 ​ ​ — ​ ​ 1,580 Net loss ​ ​ (42,588,554) ​ ​ (23,597,266) ​ ​ (23,845,123) ​ ​ 46,329,666 ​ ​ (43,701,277) Non-controlling interest ​ ​ — ​ ​ — ​ ​ (1,112,723) ​ ​ — ​ ​ (1,112,723) Net Loss Attributable to Recon Technology, Ltd ​ ¥ (42,588,554) ​ ¥ (23,597,266) ​ ¥ (22,732,400) ​ ¥ 46,329,666 ​ ¥ (42,588,554) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2024 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ​ ¥ — ​ ¥ — ​ ¥ 68,854,280 ​ ¥ — ​ ¥ 68,854,280 Cost of Revenue ​ — ​ ​ 135,705 ​ ​ 47,841,131 ​ ​ — ​ ​ 47,976,836 Gross Profit ​ — ​ ​ (135,705) ​ ​ 21,013,149 ​ ​ — ​ ​ 20,877,444 Operating expenses ​ ​ 44,012,602 ​ ​ 3,200,926 ​ ​ 45,301,827 ​ ​ — ​ ​ 92,515,355 Loss from operations ​ ​ (44,012,602) ​ ​ (3,336,631) ​ ​ (24,288,678) ​ ​ — ​ ​ (71,637,911) Other income (expenses), net ​ ​ 16,452,789 ​ ​ (778,939) ​ ​ 4,528,251 ​ ​ — ​ ​ 20,202,101 Loss from subsidiaries ​ ​ — ​ ​ (18,195,846) ​ ​ — ​ ​ 18,195,846 ​ ​ — Loss from VIEs ​ ​ (22,311,446) ​ ​ — ​ ​ — ​ ​ 22,311,446 ​ ​ — Income tax expenses ​ ​ — ​ ​ 30 ​ ​ — ​ ​ — ​ ​ 30 Net loss ​ ​ (49,871,259) ​ ​ (22,311,446) ​ ​ (19,760,427) ​ ​ 40,507,292 ​ ​ (51,435,840) Non-controlling interest ​ ​ — ​ ​ — ​ ​ (1,564,581) ​ ​ — ​ ​ (1,564,581) Net Loss Attributable to Recon Technology, Ltd ​ ¥ (49,871,259) ​ ¥ (22,311,446) ​ ¥ (18,195,846) ​ ¥ 40,507,292 ​ ¥ (49,871,259) ​ ​ 45 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2023 ​ Recon ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ “Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) ​ (Hong Kong and PRC)” ​ subsidiaries (PRC) ​ Eliminations ​ Total Revenue ​ ¥ — ​ ¥ — ​ ¥ 67,114,378 ​ ¥ — ​ ¥ 67,114,378 Cost of Revenue ​ — ​ ​ — ​ ​ 48,247,395 ​ ​ — ​ ​ 48,247,395 Gross Profit ​ — ​ ​ — ​ ​ 18,866,983 ​ ​ — ​ ​ 18,866,983 Operating expenses ​ ​ 50,352,631 ​ ​ 1,343,355 ​ ​ 36,503,732 ​ ​ — ​ ​ 88,199,718 Loss from operations ​ ​ (50,352,631) ​ ​ (1,343,355) ​ ​ (17,636,749) ​ ​ — ​ ​ (69,332,735) Other income (expenses), net ​ ​ 16,224,783 ​ ​ 343,437 ​ ​ (8,693,538) ​ ​ — ​ ​ 7,874,682 Loss from subsidiaries ​ ​ — ​ ​ (24,039,535) ​ ​ — ​ ​ 24,039,535 ​ ​ — Loss from VIEs ​ ​ (25,039,453) ​ ​ — ​ ​ — ​ ​ 25,039,453 ​ ​ — Income tax expenses ​ ​ — ​ ​ — ​ ​ 18,339 ​ ​ — ​ ​ 18,339 Net loss ​ ​ (59,167,301) ​ ​ (25,039,453) ​ ​ (26,348,626) ​ ​ 49,078,988 ​ ​ (61,476,392) Non-controlling interest ​ ​ — ​ ​ — ​ ​ (2,309,091) ​ ​ — ​ ​ (2,309,091) Net Loss Attributable to Recon Technology, Ltd ​ ¥ (59,167,301) ​ ¥ (25,039,453) ​ ¥ (24,039,535) ​ ¥ 49,078,988 ​ ¥ (59,167,301) ​ ​ 46 Table of Contents SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2025 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 58,938,178 ​ ¥ 31,449,654 ​ ¥ 8,486,745 ​ ¥ — ​ ¥ 98,874,577 Restricted cash ​ — ​ ​ — ​ ​ 8,204 ​ ​ — ​ ​ 8,204 Short-term investments ​ 3,599,211 ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,599,211 Other current assets ​ 101,882,614 ​ ​ 34,282,844 ​ ​ 117,510,448 ​ ​ — ​ ​ 253,675,906 Intercompany receivables ​ 467,888,857 ​ ​ 162,007,955 ​ ​ — ​ ​ (629,896,812) ​ ​ — Total current assets ​ 632,308,860 ​ ​ 227,740,453 ​ ​ 126,005,397 ​ ​ (629,896,812) ​ ​ 356,157,898 Investments in subsidiaries and VIEs ​ ​ (162,651,169) ​ ​ — ​ ​ — ​ ​ 162,651,169 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ ​ — ​ ​ (149,604,219) ​ ​ — ​ ​ 149,604,219 ​ ​ — Other non-current assets ​ ​ — ​ ​ 126,551,114 ​ ​ 42,912,113 ​ ​ — ​ ​ 169,463,227 Total non-current assets ​ ​ (162,651,169) ​ ​ (23,053,105) ​ ​ 42,912,113 ​ ​ 312,255,388 ​ ​ 169,463,227 Total Assets ​ ​ 469,657,691 ​ ​ 204,687,348 ​ ​ 168,917,510 ​ ​ (317,641,424) ​ ​ 525,621,125 Intercompany payables ​ ​ — ​ ​ 364,307,856 ​ ​ 265,588,956 ​ ​ (629,896,812) ​ ​ — Other liabilities and accrued liabilities ​ ​ 2,230,173 ​ ​ 8,604,069 ​ ​ 60,817,136 ​ ​ — ​ ​ 71,651,378 Total Liabilities ​ ​ 2,230,173 ​ ​ 372,911,925 ​ ​ 326,406,092 ​ ​ (629,896,812) ​ ​ 71,651,378 Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 7,987,959 shares and 10,627,426 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively* ​ 101,548 ​ ​ — ​ ​ — ​ ​ — ​ ​ 101,548 Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 20,000,000 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively* ​ 14,038 ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,038 Additional paid-in capital ​ ​ 692,569,747 ​ ​ — ​ ​ 5,573,408 ​ ​ (5,573,408) ​ ​ 692,569,747 Retained earnings ​ ​ (258,751,710) ​ ​ (149,564,514) ​ ​ (135,721,678) ​ ​ 285,286,192 ​ ​ (258,751,710) Accumulated other comprehensive income ​ ​ 33,493,895 ​ ​ (18,660,063) ​ ​ (13,882,541) ​ ​ 32,542,604 ​ ​ 33,493,895 Total Shareholders’ Equity ​ ​ 467,427,518 ​ ​ (168,224,577) ​ ​ (144,030,811) ​ ​ 312,255,388 ​ ​ 467,427,518 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (13,457,771) ​ ​ — ​ ​ (13,457,771) Total Liabilities and Equity ​ ¥ 469,657,691 ​ ¥ 204,687,348 ​ ¥ 168,917,510 ​ ¥ (317,641,424) ​ ¥ 525,621,125 * Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 47 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2024 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 16,473,018 ​ ¥ 58,161,122 ​ ¥ 35,357,534 ​ ¥ — ​ ¥ 109,991,674 Restricted cash ​ — ​ ​ — ​ ​ 848,936 ​ ​ — ​ ​ 848,936 Short-term investments ​ 88,091,794 ​ ​ — ​ ​ — ​ ​ — ​ ​ 88,091,794 Other current assets ​ 170,158,947 ​ ​ 13,263,107 ​ ​ 125,157,390 ​ ​ — ​ ​ 308,579,444 Intercompany receivables ​ 375,736,992 ​ ​ 157,821,815 ​ ​ — ​ ​ (533,558,807) ​ ​ — Total current assets ​ 650,460,751 ​ ​ 229,246,044 ​ ​ 161,363,860 ​ ​ (533,558,807) ​ ​ 507,511,848 Investments in subsidiaries and VIEs ​ (145,408,577) ​ ​ — ​ ​ — ​ ​ 145,408,577 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ ​ — ​ ​ (129,879,588) ​ ​ — ​ ​ 129,879,588 ​ ​ — Other non-current assets ​ ​ — ​ ​ 15,044,379 ​ ​ 29,833,287 ​ ​ — ​ ​ 44,877,666 Total non-current assets ​ ​ (145,408,577) ​ ​ (114,835,209) ​ ​ 29,833,287 ​ ​ 275,288,165 ​ ​ 44,877,666 Total Assets ​ ​ 505,052,174 ​ ​ 114,410,835 ​ ​ 191,197,147 ​ ​ (258,270,642) ​ ​ 552,389,514 Intercompany payables ​ ​ — ​ ​ 264,135,617 ​ ​ 269,423,190 ​ ​ (533,558,807) ​ ​ — Other liabilities and accrued liabilities ​ ​ 2,497,637 ​ ​ 432,795 ​ ​ 58,525,185 ​ ​ — ​ ​ 61,455,617 Total Liabilities ​ ​ 2,497,637 ​ ​ 264,568,412 ​ ​ 327,948,375 ​ ​ (533,558,807) ​ ​ 61,455,617 Class A ordinary shares, $0.0001 U.S. dollar par value,500,000,000 shares authorized; 7,987,959 shares and 7,987,959 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* ​ 99,634 ​ ​ — ​ ​ — ​ ​ — ​ ​ 99,634 Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* ​ ​ 4,693 ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,693 Additional paid-in capital ​ ​ 681,476,717 ​ ​ — ​ ​ 4,749,000 ​ ​ (4,749,000) ​ ​ 681,476,717 Retained earnings ​ ​ (216,163,156) ​ ​ (125,967,252) ​ ​ (112,989,285) ​ ​ 238,956,537 ​ ​ (216,163,156) Accumulated other comprehensive income ​ ​ 37,136,649 ​ ​ (24,190,325) ​ ​ (16,890,303) ​ ​ 41,080,628 ​ ​ 37,136,649 Total Shareholders’ Equity ​ ​ 502,554,537 ​ ​ (150,157,577) ​ ​ (125,130,588) ​ ​ 275,288,165 ​ ​ 502,554,537 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (11,620,640) ​ ​ — ​ ​ (11,620,640) Total Liabilities and Equity ​ ¥ 505,052,174 ​ ¥ 114,410,835 ​ ¥ 191,197,147 ​ ¥ (258,270,642) ​ ¥ 552,389,514 * Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 48 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2023 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ Non-VIE Subsidiaries ​ VIEs and VIE’s ​ ​ ​ Consolidated ​ ​ Islands) (Hong Kong and PRC) subsidiaries (PRC) Eliminations Total Cash and cash equivalents ¥ 54,864,089 ​ ¥ 11,600,593 ​ ¥ 37,661,118 ​ ¥ — ​ ¥ 104,125,800 Restricted cash ​ — ​ ​ — ​ ​ 731,545 ​ ​ — ​ ​ 731,545 Short-term investments ​ ​ 184,184,455 ​ ​ — ​ ​ — ​ ​ — ​ ​ 184,184,455 Other current assets ​ 77,134,062 ​ ​ 35,567 ​ ​ 138,201,744 ​ ​ — ​ ​ 215,371,373 Intercompany receivables ​ 291,525,426 ​ ​ 156,313,805 ​ ​ — ​ ​ (447,839,231) ​ ​ — Total current assets ​ 607,708,032 ​ ​ 167,949,965 ​ ​ 176,594,407 ​ ​ (447,839,231) ​ ​ 504,413,173 Investments in subsidiaries and VIEs ​ (122,920,490) ​ ​ — ​ ​ — ​ ​ 122,920,490 ​ ​ — Benefits through VIEs and VIE’s subsidiaries ​ — ​ ​ (111,196,475) ​ ​ — ​ ​ 111,196,475 ​ ​ — Other non-current assets ​ ​ — ​ ​ — ​ ​ 27,411,404 ​ ​ — ​ ​ 27,411,404 Total non-current assets ​ ​ (122,920,490) ​ ​ (111,196,475) ​ ​ 27,411,404 ​ ​ 234,116,965 ​ ​ 27,411,404 Total Assets ​ ​ 484,787,542 ​ ​ 56,753,490 ​ ​ 204,005,811 ​ ​ (213,722,266) ​ ​ 531,824,577 Intercompany payables ​ ​ — ​ ​ 183,903,309 ​ ​ 263,935,922 ​ ​ (447,839,231) ​ ​ — Other liabilities and accrued liabilities ​ ​ 35,580,580 ​ ​ 519,671 ​ ​ 56,573,423 ​ ​ 92,673,674 ​ ​ — Total Liabilities ​ ​ 35,580,580 ​ ​ 184,422,980 ​ ​ 320,509,345 ​ ​ (447,839,231) ​ ​ 92,673,674 Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 1,704,766 shares and 2,306,295 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* ​ ​ 26,932 ​ ​ — ​ ​ — ​ ​ — ​ ​ 26,932 Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 4,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* ​ 4,693 ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,693 Additional paid-in capital ​ ​ 580,340,061 ​ ​ — ​ ​ 4,749,000 ​ ​ (4,749,000) ​ ​ 580,340,061 Retained earnings ​ ​ (166,291,897) ​ ​ (103,655,803) ​ ​ (94,793,438) ​ ​ 198,449,241 ​ ​ (166,291,897) Accumulated other comprehensive income ​ ​ 35,127,173 ​ ​ (24,013,687) ​ ​ (16,403,037) ​ ​ 40,416,724 ​ ​ 35,127,173 Total Shareholders’ Equity ​ ​ 449,206,962 ​ ​ (127,669,490) ​ ​ (106,447,475) ​ ​ 234,116,965 ​ ​ 449,206,962 Non-controlling interests ​ ​ — ​ ​ — ​ ​ (10,056,059) ​ ​ — ​ ​ (10,056,059) Total Liabilities and Equity ​ ¥ 484,787,542 ​ ¥ 56,753,490 ​ ¥ 204,005,811 ​ ¥ (213,722,266) ​ ¥ 531,824,577 * Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024. ​ 49 Table of Contents SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2025 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ (Hong Kong ​ ​ ​ ​ ​ Consolidated ​ Islands) and PRC) VIE (PRC) Eliminations Total Net cash used in operating activities ​ ¥ (17,338,325) ​ ¥ (10,682,873) ​ ¥ (5,749,976) ​ ​ — ​ ¥ (33,771,174) Net cash provided by (used in) investing activities ​ ​ 70,015,052 ​ ​ (114,537,192) ​ ​ (13,916,739) ​ ​ 92,151,863 ​ ​ 33,712,984 Net cash provided by financing (used in) activities ​ ​ (2,529,724) ​ ​ 95,986,095 ​ ​ (4,577,855) ​ ​ (92,151,863) ​ ​ (3,273,347) Effect of exchange rate fluctuation on cash and cash equivalents ​ ​ (7,681,843) ​ ​ 2,522,502 ​ ​ (3,466,951) ​ ​ — ​ ​ (8,626,292) Net change in cash ​ ​ 42,465,160 ​ ​ (26,711,468) ​ ​ (27,711,521) ​ ​ — ​ ​ (11,957,829) Opening cash balance ​ ​ 16,473,018 ​ ​ 58,161,122 ​ ​ 36,206,470 ​ ​ — ​ ​ 110,840,610 Restricted cash ​ ​ — ​ ​ — ​ ​ 8,204 ​ ​ — ​ ​ 8,204 Ending cash balance ​ ¥ 58,938,178 ​ ¥ 31,449,654 ​ ¥ 8,486,745 ​ ​ — ​ ¥ 98,874,577 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2024 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ltd. ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ (Cayman ​ (Hong Kong ​ ​ ​ ​ ​ Consolidated ​ Islands) and PRC) VIE (PRC) Eliminations Total Net cash used in operating activities ​ ¥ (5,802,631) ​ ¥ (9,255,014) ​ ¥ (28,690,288) ​ ​ — ​ ¥ (43,747,933) Net cash provided by (used in) investing activities ​ ​ (261,267,638) ​ ​ (23,219,383) ​ ​ 203,260,432 ​ ​ 84,211,565 ​ ​ 2,984,976 Net cash provided by financing activities ​ ​ 45,094,034 ​ ​ 78,724,299 ​ ​ 5,417,289 ​ ​ (84,211,565) ​ ​ 45,024,057 Effect of exchange rate fluctuation on cash and cash equivalents ​ ​ 2,302,664 ​ ​ 310,627 ​ ​ (891,126) ​ ​ — ​ ​ 1,722,165 Net change in cash ​ ​ (219,673,571) ​ ​ 46,560,529 ​ ​ 179,096,307 ​ ​ — ​ ​ 5,983,265 Opening cash balance ​ ​ 236,146,589 ​ ​ 11,600,593 ​ ​ (142,889,837) ​ ​ — ​ ​ 104,857,345 Restricted cash ​ ​ — ​ ​ — ​ ​ 848,936 ​ ​ — ​ ​ 848,936 Ending cash balance ​ ¥ 16,473,018 ​ ¥ 58,161,122 ​ ¥ 35,357,534 ​ ​ — ​ ¥ 109,991,674 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30, 2023 ​ ​ Recon ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology, ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ Ltd.
Each of BHD and Nanjing Recon and the shareholders who owned all the equity interest of each of BHD and Nanjing Recon shall not terminate this agreement in any circumstance for any reason. 42 Table of Contents Shareholders’ Power of Attorney Pursuant to the shareholders’ amended and restated power of attorney, the shareholders of each of BHD and Nanjing Recon gives Recon-BJ irrevocable proxies to act on their behaves on all matters pertaining to each of BHD and Nanjing Recon and to exercise all of their rights as shareholders of each of BHD and Nanjing Recon, including the right to execute and deliver shareholder resolutions, to dispose any or all equity interests, to nominate, elect, designate, or appoint officers and directors, to supervise company’s performance, to approve submission of any registration documents, to attend shareholders meetings, to exercise voting rights and all of the other rights, to take legal actions against the harmful actions by directors or officers, to approve the amendments to the articles of association of the company, and any other rights under the articles of association of the company.
Each of BHD and Nanjing Recon and the shareholders who owned all the equity interest of each of BHD and Nanjing Recon shall not terminate this agreement in any circumstance for any reason. 41 Table of Contents Shareholders’ Power of Attorney Pursuant to the shareholders’ amended and restated power of attorney, the shareholders of each of BHD and Nanjing Recon gives Recon-BJ irrevocable proxies to act on their behaves on all matters pertaining to each of BHD and Nanjing Recon and to exercise all of their rights as shareholders of each of BHD and Nanjing Recon, including the right to execute and deliver shareholder resolutions, to dispose any or all equity interests, to nominate, elect, designate, or appoint officers and directors, to supervise company’s performance, to approve submission of any registration documents, to attend shareholders meetings, to exercise voting rights and all of the other rights, to take legal actions against the harmful actions by directors or officers, to approve the amendments to the articles of association of the company, and any other rights under the articles of association of the company.
Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. exchange. 43 Table of Contents Permission Required from the PRC Authorities for the VIEs’ Operation We are currently not required to obtain permission from any of the PRC authorities to operate and issue our Class A Ordinary Shares to foreign investors.
Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. exchange. 42 Table of Contents Permission Required from the PRC Authorities for the VIEs’ Operation We are currently not required to obtain permission from any of the PRC authorities to operate and issue our Class A Ordinary Shares to foreign investors.
Because we own our intellectual property, we are able to avoid licensing fees or contravening licensing agreements. 56 Table of Contents Our Strategies Our goal is to help our customers improve their efficiency and profitability by providing them with software and hardware solutions and services to improve their ability to locate productive oil reservoirs, manage the oil extraction process, reduce extraction costs, and enhance recovery from extraction activities.
Because we own our intellectual property, we are able to avoid licensing fees or contravening licensing agreements. 55 Table of Contents Our Strategies Our goal is to help our customers improve their efficiency and profitability by providing them with software and hardware solutions and services to improve their ability to locate productive oil reservoirs, manage the oil extraction process, reduce extraction costs, and enhance recovery from extraction activities.
As a result of the new agreement, Recon-JN absorbed 100% of the expected losses and received 90% of the expected net income of BHD and Nanjing Recon, which resulted in Recon-JN being the primary beneficiary of these Companies. Recon-JN also entered into Share Pledge Agreements with the Founders, who pledged all their equity interest in these entities to Recon-JN.
As a result of such agreement, Recon-JN absorbed 100% of the expected losses and received 90% of the expected net income of BHD and Nanjing Recon, which resulted in Recon-JN being the primary beneficiary of these Companies. Recon-JN also entered into Share Pledge Agreements with the Founders, who pledged all their equity interest in these entities to Recon-JN.
Property, Plants and Equipment We currently operate in several facilities throughout China. Our headquarters are located in Beijing. Following is a list of our properties. The first five properties are rentals. Gan Su BHD has received a land usage rights certificate regarding the last property and has constructed a plant on that piece of land. ​ No.
Property, Plants and Equipment We currently operate in several facilities throughout China. Our headquarters are located in Beijing. Following is a list of our properties. The first six properties are rentals. Gan Su BHD has received a land usage rights certificate regarding the last property and has constructed a plant on that piece of land. ​ No.
For a description of our corporate structure and VIE contractual arrangements, see “ Corporate History and Structure. ” See also “ Risk Factors – Risks Related to Our Corporate Structure. ” 44 Table of Contents U.S. Dollar as the Functional Currency under FASB ASC 830-10-45-4 The functional currency of the Company, as a Cayman Islands holding entity, is the U.S.
For a description of our corporate structure and VIE contractual arrangements, see “ Corporate History and Structure. ” See also “ Risk Factors – Risks Related to Our Corporate Structure. ” 43 Table of Contents U.S. Dollar as the Functional Currency under FASB ASC 830-10-45-4 The functional currency of the Company, as a Cayman Islands holding entity, is the U.S.
Chemical recycling Plan used for lower-value mixed plastics treatment (Under Construction) · A chemical recycling plant in Wei Fang City is in the preparation stage and scheduled to be operational in late 2024. The plant is meant to process more than 40,000 tons of low-value plastic a year through pyrolysis techniques.
Chemical recycling Plan used for lower-value mixed plastics treatment (Under Construction) ● A chemical recycling plant in Wei Fang City is in the preparation stage and scheduled to be operational in late 2025. The plant is meant to process more than 40,000 tons of low-value plastic a year through pyrolysis techniques.
China has a “first-to-register” system that requires no evidence of prior use or ownership. The Domestic Companies and we have registered a number of product names with the Trademark Office. 61 Table of Contents Regulations on Foreign Exchange Foreign Currency Exchange .
China has a “first-to-register” system that requires no evidence of prior use or ownership. The Domestic Companies and we have registered a number of product names with the Trademark Office. 60 Table of Contents Regulations on Foreign Exchange Foreign Currency Exchange .
LTD (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the production of high efficiency heating furnaces. As of June 30, 2024, BHD had invested a total of ¥5.09 million to HH BHD.
LTD (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the production of high efficiency heating furnaces. As of June 30, 2025, BHD had invested a total of ¥5.09 million to HH BHD.
We market our products under the following trademarks which are registered with the PRC Trademark Bureau under the State Administration for Industry and Commerce. We currently own the following trademarks: 1. Trademark of “BHD” valid from June 7, 2020 through June 6, 2030; 2.
We market our products under the following trademarks which are registered with the PRC Trademark Bureau under the State Administration for Industry and Commerce. We currently own the following trademarks: 1. Trademark of “BHD” of the 7 th classification valid from June 7, 2020 through June 6, 2030; 2.
Our Class A ordinary shares began to trade on the NASDAQ Capital Market on April 12, 2021 under the same symbol, “RCON.” 40 Table of Contents On December 5, 2021, our board of directors and its compensation committee approved issuances of a total of 2,500,000 Class B Ordinary Shares from such shares reserved under the Company’s 2021 Equity Incentive Plan to directors and officers Shenping Yin and Guangqiang Chen.
Our Class A ordinary shares began to trade on the NASDAQ Capital Market on April 12, 2021 under the same symbol, “RCON.” On December 5, 2021, our board of directors and its compensation committee approved issuances of a total of 2,500,000 Class B Ordinary Shares from such shares reserved under the Company’s 2021 Equity Incentive Plan to directors and officers Shenping Yin and Guangqiang Chen.
These reserves are not distributable as cash dividends. 62 Table of Contents In July 2014, SAFE promulgated SAFE Circular 37, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005.
These reserves are not distributable as cash dividends. 61 Table of Contents In July 2014, SAFE promulgated SAFE Circular 37, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005.
BHD owns an interest of 100% of HH BHD. 39 Table of Contents 2) On May 23, 2017, Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established by BHD and another investor under the laws of the PRC, with registered capital of ¥50 million. It is focusing on oilfield sewage treatment and oily sludge disposal projects.
BHD owns an interest of 100% of HH BHD. 2) On May 23, 2017, Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established by BHD and another investor under the laws of the PRC, with registered capital of ¥50 million. It is focusing on oilfield sewage treatment and oily sludge disposal projects.
(“Nanjing Recon”). 38 Table of Contents Chinese laws and regulations currently do not prohibit or restrict foreign ownership in petroleum businesses. However, Chinese laws and regulations do prevent direct foreign investment in certain industries.
(“Nanjing Recon”). 36 Table of Contents Chinese laws and regulations currently do not prohibit or restrict foreign ownership in petroleum businesses. However, Chinese laws and regulations do prevent direct foreign investment in certain industries.
After the introduction of Baker CAC’s products into China’s petroleum industry, Chinese companies have also sought to provide automation solutions. 52 Table of Contents In the primary oil recovery stage, oil pressure in an oil reservoir may be high enough to force oil to the surface. Approximately 20% of oil may be harvested at this stage.
After the introduction of Baker CAC’s products into China’s petroleum industry, Chinese companies have also sought to provide automation solutions. In the primary oil recovery stage, oil pressure in an oil reservoir may be high enough to force oil to the surface. Approximately 20% of oil may be harvested at this stage.
(“Recon-SD”) under the laws of HK. On February 22, 2024, Guangxi Recon Renewable Resources Technology Co., Ltd. (“Recon-GX”) was also established under the laws of HK. Recon-SD and Recon-GX will carry out wasted plastic chemical recycling business to serve customers located in different areas.
(“Recon-SD”) under the laws of PRC. On February 22, 2024, Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”) was also established under the laws of PRC. Recon-SD and Recon-GX will carry out wasted plastic chemical recycling business to serve customers located in different areas.
Tenant/Transferee Address Rental/Use Term Space Usage Productive Capacity Extent of utilization 1 ​ Recon-BJ BHD ​ 601, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 813.35 square meters ​ Headquarter and office ​ N/A ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Nanjing Recon ​ Room 311, No. 2 Building, Chu Qiao Cheng, Andemen Street, Yu Hua District, Nanjing City, PRC ​ April 1, 2024 to March 31, 2026 ​ 334.2 square meters ​ Office ​ N/A ​ 80% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ South side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 577.65 square meters ​ Office ​ N/A ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ BHD ​ West building, Zhengfu Street, Huo ying, Changping District, PRC ​ January 1, 2024 to December 31, 2025 ​ 420 square meters ​ Warehouse ​ N/A ​ 50% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 ​ HH BHD ​ No. 1767, Yin Bin South Street, Huang Hua Economic Development Zone, He Bei Province, PRC ​ July 1, 2024 to June 30, 2025 ​ 4,624 square meters ​ Office and Plant ​ N/A (Equipment Installation) ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 ​ Gan Su BHD ​ North of Dongyun Road and West of Petroleum Management Bureau Wooden Furniture Factory, Old District, Yumen City, Gansu Province, PRC ​ August 1, 2017 to July 31, 2067 ​ 26,235.59 square meters ​ Plant ​ 60,000 tons ​ 80% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ FGS ​ Northeast side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 677.65 square meters ​ Office ​ N/A ​ 50% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ Recon-SD ​ West of Lingang Road, Weifang Binhai Economic and Technological Development Zone, south of Shandong Huachen Biochemistry Co., Ltd. ​ December 13, 2023 to December 12, 2073 ​ 32,363 square meters ​ Plant ​ N/A ​ 100% ​ ​ ITEM 4A.
Tenant/Transferee Address Rental/Use Term Space Usage Productive Capacity Extent of utilization 1 ​ Recon-BJ BHD ​ 601, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 813.35 square meters ​ Headquarter and office ​ N/A ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Nanjing Recon ​ Room 311, No. 2 Building, Chu Qiao Cheng, Andemen Street, Yu Hua District, Nanjing City, PRC ​ April 1, 2024 to March 31, 2026 ​ 334.2 square meters ​ Office ​ N/A ​ 80% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ South side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 577.65 square meters ​ Office ​ N/A ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ BHD ​ West building, Zhengfu Street, Huo ying, Changping District, PRC ​ January 1, 2024 to December 31, 2025 ​ 420 square meters ​ Warehouse ​ N/A ​ 50% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 ​ HH BHD ​ No. 1767, Yin Bin South Street, Huang Hua Economic Development Zone, He Bei Province, PRC ​ July 1, 2025 to June 30, 2026 ​ 4,624 square meters ​ Office and Plant ​ N/A (Equipment Installation) ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 ​ FGS ​ Northeast side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC ​ May 1, 2024 to April 30, 2027 ​ 677.65 square meters ​ Office ​ N/A ​ 50% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ Recon-SD ​ West of Lingang Road, Green Chemical Park, Binhai District, Weifang City, Shandong Province, north of Air Products USA. ​ December 13, 2023 to December 12, 2073 ​ 32,363 square meters ​ Plant ​ N/A ​ 100% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ Gan Su BHD ​ North of Dongyun Road and West of Petroleum Management Bureau Wooden Furniture Factory, Old District, Yumen City, Gansu Province, PRC ​ August 1, 2017 to July 31, 2067 ​ 26,235.59 square meters ​ Plant ​ 60,000 tons ​ 80% ​ ​ ITEM 4A.
We do not anticipate expending any material amounts for such compliance purposes for the remainder of our current or succeeding fiscal year. China’s Intellectual Property Rights Enforcement System In 1998, China established the State Intellectual Property Office (“SIPO”) to coordinate China’s intellectual property enforcement efforts.
We do not anticipate expending any material amounts for such compliance purposes for the remainder of our current or succeeding fiscal year. 59 Table of Contents China’s Intellectual Property Rights Enforcement System In 1998, China established the State Intellectual Property Office (“SIPO”) to coordinate China’s intellectual property enforcement efforts.
Unlike the United States, which has lengthy case law related to the interpretation and applicability of intellectual property law, China has a less developed body of relevant intellectual property case law. 60 Table of Contents REGULATIONS We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business.
Unlike the United States, which has lengthy case law related to the interpretation and applicability of intellectual property law, China has a less developed body of relevant intellectual property case law. REGULATIONS We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business.
(limited to cooperative joint ventures); and ● Exploration and development of unconventional oil resources such as oil shale, oil sands, heavy oil, and excess oil (limited to cooperative joint ventures). 63 Table of Contents C.
(limited to cooperative joint ventures); and ● Exploration and development of unconventional oil resources such as oil shale, oil sands, heavy oil, and excess oil (limited to cooperative joint ventures). 62 Table of Contents C.
This business line assists oilfield companies recover residual oils, including aged oil and spilled oil through our unique formula and equipment to enhance the profitability for oilfield companies. 54 Table of Contents Platform Outsourcing Services: Intelligent marketing system and digitalization solution for gas stations · Gas Station operation and management solution.
This business line assists oilfield companies recover residual oils, including aged oil and spilled oil through our unique formula and equipment to enhance the profitability for oilfield companies. Platform Outsourcing Services: Intelligent marketing system and digitalization solution for gas stations ● Gas Station operation and management solution.
Our products and services described below correlate to the numbered stages of the oilfield production system graphical expression shown below. ​ The following list shows Domestic Companies’ products and services. The first three items are covered by our (1) automation product and software segment and (2) equipment and accessories segment.
The products and services described below correlate to the numbered stages of the oilfield production system graphical expression shown below. 52 Table of Contents ​ The following list shows Domestic Companies’ products and services. The first three items are covered by the (1) automation product and software segment and (2) equipment and accessories segment.
The last item is covered by our oilfield environmental protection segment. 53 Table of Contents Equipment for Oil and Gas Production and Transportation · High-Efficiency Heating Furnaces (as shown above by process “3”). Crude petroleum contains certain impurities that must be removed before the petroleum can be sold, including water and natural gas.
The last item is covered by the oilfield environmental protection segment. Equipment for Oil and Gas Production and Transportation ● High-Efficiency Heating Furnaces (as shown above by process “3”). Crude petroleum contains certain impurities that must be removed before the petroleum can be sold, including water and natural gas.
The Domestic Companies began providing automation services to other companies in the broader energy industry in China and also to provide the following products and services beyond the oilfield production process in 2017: Waste Water and Oil Treatment Products and Services · Oilfield sewage treatment.
The Domestic Companies began providing automation services to other companies in the broader energy industry in China and also to provide the following products and services beyond the oilfield production process in 2017: 53 Table of Contents Waste Water and Oil Treatment Products and Services ● Oilfield sewage treatment.
Research and Development We focus our research and development efforts on improving our development efficiency and the quality of our products and services. As of June 30, 2024, our research and development team consisted of over 60 experienced engineers, developers and programmers.
Research and Development We focus our research and development efforts on improving our development efficiency and the quality of our products and services. As of June 30, 2025, our research and development team consisted of over 70 experienced engineers, developers and programmers.
Recon’s Video Intelligent Recognition Software version 1.0 was published on April 13, 2021; 10. Solar permanent magnet semi-direct drive intelligent control software V1.0 was published on August 31, 2021; 11. An intelligent billing system that does not rely on physical cards to achieve self-service refueling for vehicle owners (Android) V2.0 was published on April 9 , 201 9 ; 12.
Solar permanent magnet semi-direct drive intelligent control software V1.0 was published on August 31, 2021; 11. An intelligent billing system that does not rely on physical cards to achieve self-service refueling for vehicle owners (Android) V2.0 was published on April 9 , 201 9 ; 12.
In addition, some of our support employees regularly participate in our research and development programs. 57 Table of Contents In the fiscal years ended June 30, 2024, 2023 and 2022, we spent approximately RMB14.29 million (approximately $2.0 million), RMB8.8 million (approximately $1.2 million) and RMB9.0 million (approximately $1.3 million) respectively, on research and development activities.
In addition, some of our support employees regularly participate in our research and development programs. 56 Table of Contents In the fiscal years ended June 30, 2025, 2024 and 2023, we spent approximately RMB16.43 million (approximately $2.3 million), RMB14.29 million (approximately $2.0 million) and RMB8.8 million (approximately $1.2 million) respectively, on research and development activities.
Recon RCNAMT software version 1 was published on January 8, 2013; 4. Recon Process Auto software version 1 was published on January 8, 2013; 5. Recon Production Process Control system software V2.0 was published on November 1 8 , 2013, and V1.0 was published on February 4 , 201 3 ; 6.
Recon Process Auto software version 1 was published on January 8, 2013; 58 Table of Contents 5. Recon Production Process Control system software V2.0 was published on November 1 8 , 2013, and V1.0 was published on February 4 , 201 3 ; 6.
Patent of Tubular type Heating furnace valid until March 6 , 2030; 2. Patent of Vacuum phase change furnace valid until March 6 , 2030; 3. Patent of Intelligent diagnosis method, device, storage medium and server of electric pump well valid until May 1 5 , 20 43 ; 4.
Patent of Vacuum phase change furnace valid until March 6 , 2030; 3. Patent of Intelligent diagnosis method, device, storage medium and server of electric pump well valid until May 1 5 , 20 43 ; 4. Patent of Negative pressure heating furnace valid until March 6 , 20 30 ; 5.
On March 15, 2023, the “Company and certain institutional Investors entered into that certain securities purchase agreement, pursuant to which the Company agreed to sell to such Investors an aggregate of 8,827,500(490,417 shares post 2024 Reverse Split) Class A ordinary shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share (the “Ordinary Shares”) and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase ordinary shares in a registered direct offering, and warrants to purchase up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $8.0 million before deducting the placement agent’s fees and other estimated offering expenses.
As the service consideration, the Company issued 2,000,000 (111,111 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the Consultants as compensation for acting as advisors to the Company on new business exploration. 39 Table of Contents On March 15, 2023, the Company and certain institutional Investors entered into that certain securities purchase agreement, pursuant to which the Company agreed to sell to such Investors an aggregate of 8,827,500(490,417 shares post 2024 Reverse Split) Class A ordinary shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share (the “Ordinary Shares”) and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase ordinary shares in a registered direct offering, and warrants to purchase up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $8.0 million before deducting the placement agent’s fees and other estimated offering expenses.
From December 16, 2010 to June 30, 2012, Messrs. Yin Shenping and Chen Guangqiang held 80% ownership interest of Nanjing Recon. On November 27, 2020, Chen Guangqiang transferred the ownership interest of ¥200,000 held by him to Yin Shenping. As of the date of this report, Mr. Yin Shenping hold a 99.7501% ownership interest of Nanjing Recon.
Yin Shenping and Chen Guangqiang held 80% ownership interest of Nanjing Recon. On November 27, 2020, Chen Guangqiang transferred the ownership interest of ¥200,000 held by him to Yin Shenping. As of the date of this report, Mr. Yin Shenping hold a 99.7501% ownership interest of Nanjing Recon.
The primary beneficiary is required to consolidate the VIE for financial reporting purposes. 51 Table of Contents The nature of any assets, operations and cash flows that exist or which occur outside of the VIEs are mainly about: ● The daily operations of us, as the parent company, to maintain the basic functions as a holding entity such as the purchase of materials and payment of operating expenses and investments, in order to realize the control of our subsidiaries and the VIEs to ensure that the overall company’s business objectives are fulfilled.
The nature of any assets, operations and cash flows that exist or which occur outside of the VIEs are mainly about: ● The daily operations of us, as the parent company, to maintain the basic functions as a holding entity such as the purchase of materials and payment of operating expenses and investments, in order to realize the control of our subsidiaries and the VIEs to ensure that the overall company’s business objectives are fulfilled.
All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE.
All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.
Foreign companies have also been deeply involved in China’s petroleum industry; however, according to Chinese law, China’s national oil companies still take a majority (or minority) stake in any commercial discovery. As a result, the number of major foreign companies involved in the industry is relatively limited in domestic China.
Foreign companies have also been deeply involved in China’s petroleum industry; however, according to Chinese law, China’s national oil companies still take a majority (or minority) stake in any commercial discovery.
For the fiscal years ended June 30, 2024, 2023 and 2022, net cash transferred from the Company to the VIEs was RMB84,211,565, RMB69,562,912 and RMB55,569,342, respectively. Neither we nor the VIEs have present plans to distribute earnings or settle amounts owed under the Contractual Agreements. We currently plan to retain the cash in the VIEs for business growth and operation.
For the fiscal years ended June 30, 2025, 2024 and 2023, net cash transferred from the Company to the VIEs was RMB 92,151,863, RMB84,211,565 and RMB69,562,912, respectively. Neither we nor the VIEs have present plans to distribute earnings or settle amounts owed under the Contractual Agreements.
As a result, Qinghai BHD returned ¥200,000 paid in capital back to one of the individual shareholders. After the new arrangement, BHD owns a total interest of 75% of Qinghai BHD.
As a result, Qinghai BHD returned ¥200,000 paid in capital back to one of the individual shareholders. After the new arrangement, BHD owns a total interest of 75% of Qinghai BHD. In fiscal year 2025, the Company’s management approved a plan to cease operations and close Qinghai BHD.
Recon Oil and Gas Processing SCADA System software V1.0 was published on June 14 , 2016; 7. Intelligent gas field management platform software V1.0 was published on July 14, 2020; 59 Table of Contents 8. Gas well data acquisition and monitoring software V1.0 was published on July 14, 2020; 9.
Recon Oil and Gas Processing SCADA System software V1.0 was published on June 14 , 2016; 7. Intelligent gas field management platform software V1.0 was published on July 14, 2020; 8. Gas well data acquisition and monitoring software V1.0 was published on July 14, 2020; 9. Recon’s Video Intelligent Recognition Software version 1.0 was published on April 13, 2021; 10.
On July 4, 2003, Nanjing Recon was organized under the laws of the PRC. On August 27, 2007, the Founders of the Company purchased a majority ownership of Nanjing Recon from a related party who was a majority owner of Nanjing Recon. Through December 15, 2010, the Founders held 80% ownership interest in Nanjing Recon.
On August 27, 2007, the Founders of the Company purchased a majority ownership of Nanjing Recon from a related party who was a majority owner of Nanjing Recon. Through December 15, 2010, the Founders held 80% ownership interest in Nanjing Recon. From December 16, 2010 to June 30, 2012, Messrs.
Recon automated monitoring system software version 1.0 was published on February 6 , 20 12 2. Recon SCADA oilfiled monitoring and data acquisition system software version 2.0 was published on September 25 , 20 0 3, and version 3.0 was registered and published on June 26 , 2008; 3.
Recon SCADA oilfield monitoring and data acquisition system software version 2.0 was published on September 25 , 20 0 3, and version 3.0 was registered and published on June 26 , 2008; 3. Recon RCNAMT software version 1 was published on January 8, 2013; 4.
We first began to provide services to CNPC in 2000. CNPC accounted for approximately 48%,43% and 50% of our revenue in the fiscal years ended June 30, 2024, 2023 and 2022, respectively, and any termination of our business relationships with CNPC would materially harm our operations.
CNPC accounted for approximately 44%, 48% and 43% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and any termination of our business relationships with CNPC would materially harm our operations. Our Strengths ● Safety of products.
No dividends or distributions have been declared to pay to us from our subsidiaries or the VIEs. No dividends or distributions were made to any U.S. investors.
We currently plan to retain the cash in the VIEs for business growth and operation. No dividends or distributions have been declared to pay to us from our subsidiaries or the VIEs. No dividends or distributions were made to any U.S. investors.
Trademark of “Recon” of the 7 th classification valid from October 20, 2021 through October 20, 2031; 3. Trademark of “Recon” of the 9 th classification valid from April 20, 2021 through April 20, 2031; and 4. Trademark of “Recon” of the 42 nd classification valid from September 6, 2021 through September 6, 2031. 58 Table of Contents 5.
Trademark of “BHD” of the 11 th classification valid from June 14, 2020 through June 13, 2030 3. Trademark of “Recon” of the 7 th classification valid from October 20, 2021 through October 20, 2031; 4. Trademark of “Recon” of the 9 th classification valid from April 20, 2021 through April 20, 2031; and 57 Table of Contents 5.
Thus, by June 30, 2021, BHD owns an interest of 51% and Nanjing Recon owns an interest of 19% of Gan Su BHD. 3) On October 16, 2017, Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established by BHD and a few other investors under the laws of the PRC, with registered capital of ¥50 million.
The paid in capital was ¥27,495,000.00 ($3,551,489) as of June 30, 2025. 3) On October 16, 2017, Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established by BHD and a few other investors under the laws of the PRC, with registered capital of ¥50 million.
Patent of Negative pressure heating furnace valid until March 6 , 20 30 ; 5. Patent of High-pressure natural gas furnace valid until March 6, 20 30 ; 6. Patent of oily sewage treatment equipment valid until July 8, 2025; 7. Patent of an oil-water well smart wireless pressure transmitter valid until November 17, 2026; 8.
Patent of High-pressure natural gas furnace valid until March 6, 20 30 ; 6. Patent of an oil-water well smart wireless pressure transmitter valid until November 17, 2026; 7. Patent of an intelligent terminal applied to data monitoring of gas wells valid until July 2 , 20 30 ; 8.
Trademark of “DT” of the 9th, 35th, 37th, and 42nd classification valid from January 28, 2011 through January 27, 2028. We currently own over 50 patents registered with the PRC State Intellectual Property Office which cover our automated products and heating related equipment for the petroleum industry. Below is a list of our selected patents: 1.
We currently own over 50 patents registered with the PRC State Intellectual Property Office which cover our automated products and heating related equipment for the petroleum industry. Below is a list of our selected patents: 1. Patent of Tubular type Heating furnace valid until March 6 , 2030; 2.
Organizational Structure Below is a chart representing our current corporate structure as of June 30, 2024: Our registered office in the Cayman Islands is at the offices of Vistra (Cayman) Limited, P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands. 64 Table of Contents D.
Organizational Structure Below is a chart representing our current corporate structure as of June 30, 2025: Our registered office in the Cayman Islands is at the offices of Vistra (Cayman) Limited, P.O.
On September 16, 2020, Yin Shenping transferred the ownership interest of ¥750,000 held by him to Chen Guangqiang. As of the date of this report, Mr. Chen Guangqiang hold a 95.47% ownership interest of BHD.
On September 16, 2020, Yin Shenping transferred the ownership interest of ¥750,000 held by him to Chen Guangqiang. On September 29, 2024, Yin Shenping contributed an additional capital of ¥10,000 to BHD. On March 18, 2025, Yin Shenping subscribed an additional capital of ¥11,101,100 to BHD. As of the date of this report, Mr.
In connection with the reverse stock split, on March 29, 2024 the Company’s shareholder approved and authorized the Company’s registered office service agent to file the Fourth Amended and Restated Memorandum and Articles of Association with local registry, and change its authorized share capital from: US$15,725,000 divided into 150,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0925 each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to: US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each (the “2024 change in capital structure”). 41 Table of Contents Exclusive Technical Consulting Service Agreement Pursuant to the exclusive technical consulting service agreement between Recon-BJ and each of BHD and Nanjing Recon, Recon-BJ has the exclusive right to provide each of BHD and Nanjing Recon with technical support services, consulting services and other services, including granting use rights of intellectual property rights, software services, network support, database support, hardware services, technical support, employee training, research and development of technology and market information, business management consulting, marketing and promotion services, customer management and services, lease hardware and device, and the others necessary for each of BHD and Nanjing Recon’s needs.
In connection with the reverse stock split, on March 29, 2024 the Company’s shareholder approved and authorized the Company’s registered office service agent to file the Fourth Amended and Restated Memorandum and Articles of Association with local registry, and change its authorized share capital from: US$15,725,000 divided into 150,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0925 each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to: US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each (the “2024 change in capital structure”).
Management performed an ongoing reassessment of whether Recon-BJ is the primary beneficiary of BHD and Nanjing Recon. On August 28, 2000, a founder of the Company purchased a controlling interest in BHD which was organized under the laws of the PRC on June 29, 1999. Through December 15, 2010, the Founders held a 67.5% ownership interest in BHD.
These updates do not affect the Registrant’s contractual control over the VIEs. 37 Table of Contents On August 28, 2000, a founder of the Company purchased a controlling interest in BHD which was organized under the laws of the PRC on June 29, 1999. Through December 15, 2010, the Founders held a 67.5% ownership interest in BHD.
On February 4, 2021, Nanjing Recon and BHD, entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS. As a result, Nanjing Recon and BHD collectively own 51% interest of FGS, with 25.5% ownership interests to each of Nanjing Recon and BHD.
On February 4, 2021, Nanjing Recon and BHD, entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS. Through the fourth supplemental agreement, the Domestic Companies waived the requirement on FGS’ performance goal about the number of gas stations.
In the past, China’s petroleum companies mined for petroleum by leveraging the country’s abundance of inexpensive labor, rather than focusing on developing new technologies. For example, a typical, traditional oilfield with an annual capacity of 1,000,000 tons would require between 10,000 and 20,000 laborers.
For example, a typical, traditional oilfield with an annual capacity of 1,000,000 tons would require between 10,000 and 20,000 laborers.
Patent of an intelligent terminal applied to data monitoring of gas wells valid until July 02 , 20 30 ; 9. Patent of torch specialized for oilfield waste-gas burning valid until July 10, 2028; 10. Patent of Wireless temperature transmitter valid until March 2 7 , 2029; 11.
Patent of torch specialized for oilfield waste-gas burning valid until July 10, 2028; 9. Patent of Wireless temperature transmitter valid until March 2 7 , 2029; 10. Suspended sludge filtration and purification device for oily sewage valid until July 2 4 , 202 8 ; 11.
BHD is combined with the Company through the date of the exclusive agreements, and has been consolidated following January 1, 2008, the date of the agreements based on ASC Topic 810. The Company allocates net income 90% and 100%, respectively, based upon the control agreements. Profits allocated to the minority interest are the remaining amount (10%).
Chen Guangqiang hold 85.93% ownership interest of BHD and Mr. Yin Shenping hold 10.00% ownership interest of BHD. BHD is combined with the Company through the date of the exclusive agreements, and has been consolidated following January 1, 2008, the date of the agreements based on ASC Topic 810.
Suspended sludge filtration and purification device for oily sewage valid until July 2 4 , 202 8 ; 12. A biological activator for oilfield re-injection water treatment and its preparation method valid until February 17 , 203 7 ; 13. Pneumatic device valid until February 9 , 203 2 ; 14.
A biological activator for oilfield re-injection water treatment and its preparation method valid until February 17 , 203 7 ; 12. Pneumatic device valid until February 9 , 203 2 ; 13. Solar-powered shaftless permanent magnet flexible control system, in application v alid until August 31 20 31 ; 14.
As Recon-JN’s parent company, Recon-HK did not own any assets or conduct any operations, and therefore was dissolved on May 15, 2020. Based on the VIE agreements, we consolidated BHD and Nanjing Recon as VIEs as required by Accounting Standards Codification (“ASC”) Topic 810, Consolidation because we are the primary beneficiary of the VIEs.
Based on the VIE agreements, we consolidated BHD and Nanjing Recon as VIEs as required by Accounting Standards Codification (“ASC”) Topic 810, Consolidation because we are the primary beneficiary of the VIEs. Management performed an ongoing reassessment of whether Recon-BJ is the primary beneficiary of BHD and Nanjing Recon.
A software copyright registration certificate of Recon’s Intelligent monitoring and management system software version 1.0 for oil production was published on September 3, 2021 Environmental Matters We have not incurred material expenses in connection with compliance with Chinese environmental laws and regulations.
A software copyright registration certificate of Recon’s Intelligent monitoring and management system software version 1.0 for oil production was published on September 3, 2021; 21. Environmental Air Pollution Prevention and Control Intelligent Analysis System V1.0 was published on August 21, 2024; 22. Recon Security and Gas Protection Management Software V1.0 was published on April 15, 2025; and 23.
CNPC Currently, we undertake projects majorly at the following locations, among others: ● Huabei Oilfield ● Qinghai Oilfield ● Jidong Oilfield ● Zhejiang Oilfield ● Petrochina sichuan petrochemical.CO., LTD. 55 Table of Contents We provide products and services to CNPC under a series of agreements, each of which is terminable without advance notice.
Revenue from Sinopec accounted for 17%, 19% and 32% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 54 Table of Contents CNPC Currently, we undertake projects majorly at the following locations, among others: ● Huabei Oilfield ● Qinghai Oilfield ● Jidong Oilfield ● Zhejiang Oilfield ● PetroChina Sichuan Petrochemical Co., Ltd.
Solar-powered shaftless permanent magnet flexible control system, in application v alid until August 31 20 31 ; 15. Patent of electricity collection device and oil pumping unit valid until March 28, 2038 We have registered over 40 software products with the PRC State Intellectual Property Office. Below is a list of our selected software products: 1.
Patent of a safety coupling for oil wells valid until August 5, 2034; We have registered over 70 software products with the PRC State Intellectual Property Office. Below is a list of our selected software products: 1. Recon automated monitoring system software version 1.0 was published on February 6 , 20 12 2.
Removed
Through the fourth supplemental agreement, the Nanjing Recon and BHD waived the requirement on FGS’ performance goal about the number of gas stations. Accordingly, Nanjing Recon and BHD agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, in exchange of additional 8% equity ownership of FGS.
Added
As Recon-JN’s parent company, Recon-HK did not own any assets or conduct any operations, and therefore was dissolved on May 15, 2020. Following changes in shareholders of BHD and Nanjing Recon, on July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively.
Removed
See “Our Corporate Structure” for more information illustrating the ownership interests between Nanjing Recon and BHD.
Added
The new agreements stipulate that Recon-BJ will assume 100% of the expected losses of BHD and Nanjing Recon while receiving 95% of their projected net profits; all other terms and conditions remain unchanged from the VIE agreements executed by Recon-BJ in April 2019.
Removed
As the service consideration, the Company issued 2,000,000 (111,111 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the Consultants as compensation for acting as advisors to the Company on new business exploration.
Added
On July 10, 2025, following recent changes to shareholders for Nanjing Recon and BHD, the various VIE agreements were required to be amended, restated, and re-registered with competent authorities. The re-executed VIE agreements were effected solely to update the identities of the registered individual shareholders of the VIEs, and the principal terms of the contractual arrangements remain unchanged.
Removed
(Cayman ​ (Hong Kong ​ ​ ​ ​ ​ Consolidated ​ ​ Islands) and PRC) VIE (PRC) Eliminations Total Net cash used in operating activities ​ ¥ (15,831,732) ​ ¥ (1,249,935) ​ ¥ (9,165,570) ​ ​ — ​ ¥ (26,247,237) Net cash used in investing activities ​ (26,555,820) ​ ​ (12,000,000) ​ ​ (29,342,206) ​ ​ 67,569,342 ​ ​ (328,684) Net cash provided by financing activities ​ 93,321 ​ ​ 1,306,892 ​ ​ 56,169,749 ​ ​ (67,569,342) ​ ​ (9,999,380) Effect of exchange rate fluctuation on cash and cash equivalents ​ 14,016,375 ​ ​ (1,494,983) ​ ​ (2,246,244) ​ ​ — ​ ​ 10,275,148 Net change in cash ​ (28,277,856) ​ ​ (13,438,026) ​ ​ 15,415,729 ​ ​ — ​ ​ (26,300,153) Opening cash balance ​ 325,116,815 ​ ​ 14,588,376 ​ ​ 4,293,379 ​ ​ — ​ ​ 343,998,570 Restricted cash ​ ​ — ​ ​ — ​ ​ 723,560 ​ ​ — ​ ​ 723,560 Ending cash balance ¥ 296,838,959 ​ ¥ 1,150,350 ​ ¥ 18,985,548 ​ ​ — ​ ¥ 316,974,857 ​ VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability.
Added
With respect to Nanjing Recon, in November 2020, Shenping Yin acquired all equity previously held by Guangqiang Chen. In January 2022, Shenping Yin made a capital contribution, and in March 2023, Yingwu Yan acquired all equity previously held by Degui Zhai.
Removed
Revenue from Sinopec accounted for 19%, 32% and 28% of our revenue in the fiscal years ended June 30, 2024, 2023 and 2022, respectively.
Added
With respect to BHD, in June 2019, Zhang Fan exited by transferring all of his equity to Guangqiang Chen; in September 2020 Mr. Yin exited by transferring all of his equity to Mr. Chen; and in 2024 and 2025 Mr. Yin subsequently re-entered and made additional capital contributions that diluted other holders.
Removed
China Energy Investment Group We began to provide equipment to Shenhua Group, which was merged into China Energy with another group company, in 2017. We signed a series of contracts with Shenhua Group and have established what we believe is a solid business relationship with Shenhua Group.
Added
As of the date of this report, Nanjing Recon is held by Shenping Yin (99.75%) and Yingwu Yan (0.25%), and BHD is held by Guangqiang Chen (85.93%), Shenping Yin (10.00%), Donglin Li (3.77%) and Zhiqiang Feng (0.30%).
Removed
Since calender 2023, affected by temporary changes in market participation requirements from Shenhua Group, our business from this basis was temporary disrupted and there was no revenue from Shenhua Group in fiscal year 2024. Our Strengths · Safety of products.
Added
The Company allocates net income 90% and 100%, respectively, based upon the control agreements. Profits allocated to the minority interest are the remaining amount (10%). On July 4, 2003, Nanjing Recon was organized under the laws of the PRC.
Added
By June 30, 2021, BHD owns an interest of 51% and Nanjing Recon owns an interest of 19% of Gan Su BHD. Nanjing Recon invested a total of RMB ¥4,560,000.00 in Gan Su BHD in July, August, and September of 2021.
Added
Qinghai BHD primarily sold heating furnaces to industrial clients similar to those of BHD’s equipment operations. The decision to close Qinghai BHD was made due to its poor operating performance and failure to expand its market.
Added
Qinghai BHD’s major operations was ceased by June 2025 and was fully wound down by the date of this report. 38 Table of Contents 4) On December 12, 2024, BHD and other investors incorporated Hebei Mashiji New Energy Technology Co., Ltd. (“MSJ”) under PRC law with a registered capital of ¥10 million (approximately USD 1.4 million).
Added
As of June 30, 2025, BHD owned a 70% equity interest in MSJ, having invested ¥700,000 ($97,716) for this interest. MSJ primarily produces and sells methanol fuel energy-enhancing additives for vehicles. To date, MSJ remains in the initial preparatory phase and is undertaking the procedures necessary for applying for the relevant product manufacturing license.
Added
On September 11, 2025, BHD transferred 51% of MSJ’s equity interest to a non-related investor, becoming a minority shareholder of MSJ. Accordingly, MSJ is no longer affiliated with BHD and by extension, the Company.
Added
Accordingly, the Domestic Companies agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, The transaction has been hereby closed. As a result, the Domestic Companies collectively own 51% interest of FGS and began to consolidate the financial results of FGS since January 2021.
Added
On March 31, 2025, the Company granted 2,263,194 restricted Class A Ordinary Shares to its management and staff.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

84 edited+24 added−46 removed65 unchanged
Biggest changeTrend Information Other than as disclosed elsewhere in this report we are not aware of any trends, uncertainties, demands, commitments, or events since the beginning of our fiscal year 2024 which are reasonably likely to have a material effect on our net revenue, income from operations, profitability, liquidity or capital resources, or would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition. 67 Table of Contents Factors Affecting Our Results of Operations ● Our operating results in any period are subject to general conditions typically affecting the Chinese oilfield service industry which include but are not limited to: ● oil and gas prices; ● the amount of spending by our customers, primarily those in the oil and gas industry; ● growing demand from large corporations for improved management and software designed to achieve such corporate performance; ● the procurement processes of our customers, especially those in the oil and gas industry; ● competition and related pricing pressure from other oilfield service solution providers, especially those targeting the Chinese oil and gas industry; ● the ongoing development of the oilfield service market in China; ● unpredictability of policies regarding the energy and internet sectors; and ● inflation and other macroeconomic factors. ● Unfavorable changes in any of these general conditions could negatively affect the number and size of the projects we undertake, the number of products we sell, the amount of services we provide, the price of our products and services, and otherwise affect our results of operations. ● Our operating results in any period are more directly affected by company-specific factors including: ● our revenue growth, in terms of the proportion of our business dedicated to large companies and our ability to successfully develop, introduce and market new solutions and services; ● our ability to increase our revenue from both old and new customers in the oil and gas industry in China; ● our ability to effectively manage our operating costs and expenses; and ● our ability to effectively implement any targeted acquisitions and/or strategic alliances so as to provide efficient access to markets and industries in the oil and gas industry in China.
Biggest changeFactors Affecting Our Results of Operations ● Our operating results in any period are subject to general conditions typically affecting the Chinese oilfield service industry which include but are not limited to: ● oil and gas prices; ● the amount of spending by our customers, primarily those in the oil and gas industry; ● growing demand from large corporations for improved management and software designed to achieve such corporate performance; ● the procurement processes of our customers, especially those in the oil and gas industry; ● competition and related pricing pressure from other oilfield service solution providers, especially those targeting the Chinese oil and gas industry; ● the ongoing development of the oilfield service market in China; ● unpredictability of policies regarding the energy and internet sectors; and ● inflation and other macroeconomic factors. ● Unfavorable changes in any of these general conditions could negatively affect the number and size of the projects we undertake, the number of products we sell, the amount of services we provide, the price of our products and services, and otherwise affect our results of operations. ● Our operating results in any period are more directly affected by company-specific factors including: ● our revenue growth, in terms of the proportion of our business dedicated to large companies and our ability to successfully develop, introduce and market new solutions and services; ● our ability to increase our revenue from both old and new customers in the oil and gas industry in China; ● our ability to effectively manage our operating costs and expenses; and ● our ability to effectively implement any targeted acquisitions and/or strategic alliances so as to provide efficient access to markets and industries in the oil and gas industry in China. 67 Table of Contents Major Critical Accounting Policies and Estimates Consolidation of VIEs A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest.
(“Recon-IN”) , Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Technology Co., Ltd. (“Recon-GX”) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd.
(“Recon-IN”), Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd.
Revenue Recognition In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.
Revenue Recognition Revenue Recognition - In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.
The Company considers the following factors when determining whether to permit a longer payment period or provide other concessions to customers: ● the customer’s past payment history; ● the customer’s general risk profile, including factors such as the customer’s size, age, and public or private status; ● macroeconomic conditions that may affect a customer’s ability to pay; and ● the relative importance of the customer relationship to the Company’s business. 73 Table of Contents Share-Based Compensation Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award.
The Company considers the following factors when determining whether to permit a longer payment period or provide other concessions to customers: ● the customer’s past payment history; ● the customer’s general risk profile, including factors such as the customer’s size, age, and public or private status; ● macroeconomic conditions that may affect a customer’s ability to pay; and ● the relative importance of the customer relationship to the Company’s business. 72 Table of Contents Share-Based Compensation Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award.
Revenue is recognized when products are delivered, and acceptance reports are signed off by customers. 70 Table of Contents The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset.
Revenue is recognized when products are delivered, and acceptance reports are signed off by customers. 69 Table of Contents The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset.
Fair Values of Financial Instruments The US GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of June 30, 2024.
The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of June 30, 2025.
Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. 65 Table of Contents Overview We are a company with limited liability incorporated in 2007 under the laws of the Cayman Islands.
Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. Overview We are a company with limited liability incorporated in 2007 under the laws of the Cayman Islands.
The Company’s contract liabilities consist primarily of the Company’s unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Performance Obligations Performance obligations include delivery of products and provision of services.
The Company’s contract liabilities consist primarily of the Company’s unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.
Other net expenses was ¥0.7 million ($0.1 million) for the year ended June 30, 2024, compared to other net income of ¥0.7 million for the same period of 2023. The ¥1.3 million ($0.2 million) decrease other net income was primarily due to a decrease in subsidy income of ¥0.2 million.
Other income (expenses), net . Other net income was ¥1.3 million ($0.2 million) for the year ended June 30, 2025, compared to other net expenses of ¥0.7 million for the same period of 2024. The ¥2.0 million ($0.3 million) increase other net income was primarily due to a decrease in subsidy income of ¥0.2 million.
Current liabilities amounted to ¥47.5 million ($6.5 million) at June 30, 2024, in comparison to ¥61.0 million at June 30, 2023. Capital Needs. With the uncertainty of the current market, our management believes it is necessary to enhance collection of outstanding accounts receivable and other receivables, and to be cautious on operational decisions and project selection.
Current liabilities amounted to ¥60.6 million ($8.5 million) at June 30, 2025, in comparison to ¥47.5 million at June 30, 2024. Capital Needs. With the uncertainty of the current market, our management believes it is necessary to enhance collection of outstanding accounts receivable and other receivables, and to be cautious on operational decisions and project selection.
There are also some new contracts that will not be completed within one year from year 2023, the Company did calculation and the amount was not material as end of this fiscal year. 72 Table of Contents Accounts Receivable, Net, Other Receivables, Net and Loan to Third Parties Accounts receivable are carried at original invoiced amount less a provision for any potential uncollectible amounts.
There are also some new contracts that will not be completed within one year from year 2024, the Company did calculation and the amount was not material as end of this fiscal year. Accounts Receivable, Net, Other Receivables, Net and Loans to Third Parties Accounts receivable are carried at original invoiced amount less a provision for any potential uncollectible amounts.
The Company maintains an allowance for credit losses resulting from the inability of its trade and non-trade customers (“customers”) to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis.
The Company maintains an allowance for credit losses resulting from the inability of its trade and non-trade customers (“customers”) to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses.
We recorded net recovery of credit losses of ¥9.0 million for the year ended June 30, 2023 as compared to net provision for credit losses of ¥4.1 million ($0.6 million) for the same period in 2024.
We recorded net provision for credit losses of ¥4.1 million for the year ended June 30, 2024 as compared to net recovery of credit losses of ¥2.9 million ($0.4 million) for the same period in 2025.
The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.
A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.
If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.
If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable. Fair Values of Financial Instruments The U.S.
In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2023 and 2024, the management performed evaluation on the impairment of goodwill and intangible assets and recorded an impairment loss on goodwill and intangible assets of ¥10.0 million and nil for the years ended June 30, 2023 and 2024, respectively.
In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2024 and 2025, the management performed evaluation on the impairment of goodwill and intangible assets and recorded an impairment loss on goodwill and intangible assets of nil and nil for the years ended June 30, 2024 and 2025, respectively.
Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities.
Level 3 inputs to the valuation methodology are unobservable. Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities.
For the years ended June 30, 2023 and 2024, gross profit losses from chemical recycling was nil and ¥0.1 million ($0.02 million), respectively.
For the years ended June 30, 2024 and 2025, gross profit losses from chemical recycling was ¥0.1 and ¥nil, respectively.
Liquidity and Capital Resources As of June 30, 2024, we had cash in the amount of approximately ¥110.0 million ($15.1 million) and short-term investment in bank fixed income product of approximately ¥88.1 million ($12.1 million).
As of June 30, 2024, we had cash in the amount of approximately ¥110.0 million and short-term investment in bank fixed income product of approximately ¥88.1 million ($12.3 million). Indebtedness .
Loss from operations was ¥71.6 million ($9.9 million) for the year ended June 30, 2024, compared to a loss of ¥69.3 million for the same period of 2023. This ¥2.3 million ($0.3 million) increase in loss from operations was primarily due to the increase in operating expense as discussed above. Change in fair value changes of warrant liability.
Loss from operations was ¥57.3 million ($8.0 million) for the year ended June 30, 2025, compared to a loss of ¥71.6 million for the same period of 2024. This ¥14.3 million ($2.0 million) decrease in loss from operations was primarily due to the decrease in operating expense as discussed above. Change in fair value changes of warrant liability.
General and administrative expenses accounted for 92.6% of total revenue for the year ended June 30, 2024 and 114.4% of total revenue for the same period of 2023. Allowance for (net recovery of) credit losses .
General and administrative expenses accounted for 74.9% of total revenue for the year ended June 30, 2025 and 92.6% of total revenue for the same period of 2024. Allowance for (net recovery of) credit losses .
The Company’s disaggregation of revenue for the years ended June 30, 2022, 2023 and 2024 is disclosed in Note 25 to accompanying consolidated financial statements. Automation Products and Software; Equipment, Accessories and Others The Company generates revenue primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories.
The Company’s disaggregation of revenue for the years ended June 30, 2023, 2024 and 2025 is disclosed in Note 28. Automation Products and Software; Equipment, Accessories and Others The Company generates revenue primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories.
Related fees are generally billed monthly, based on a per transaction basis. Arrangements with Multiple Performance Obligations Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenue to each performance obligation based on its relative standalone selling price.
Related fees are generally billed monthly on a per-transaction basis. Arrangements with Multiple Performance Obligations Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.
For the years ended June 30, 2023 and 2024, cost of revenue from automation product and software was approximately ¥23.6 million and ¥23.9 million ($3.3 million), respectively, representing increase of approximately ¥0.3 million ($0.04 million) or 1.1%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software.
For the years ended June 30, 2024 and 2025, cost of revenue from automation product and software was approximately ¥23.9 million and ¥28.6 million ($4.0 million), respectively, representing increase of approximately ¥4.7 million ($0.7 million) or 20.0%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software.
For the years ended June 30, 2023 and 2024, gross profit from equipment and accessories was approximately ¥7.3 million and ¥6.4 million ($0.9 million), respectively, representing a slight decrease of approximately ¥0.9 million ($0.1 million) or 12.7%.
For the years ended June 30, 2024 and 2025, gross profit from equipment and accessories was approximately ¥6.4 million and ¥5.2 million ($0.7 million), respectively, representing a slight decrease of approximately ¥1.2 million ($0.2 million) or 18.5%.
The increase in total current assets at June 30, 2024 compared to June 30, 2023 was mainly due to an increase in cash, accounts receivable and loan to third parties, partially offset by a decrease in short-term investments.
The decrease in total current assets at June 30, 2025 compared to June 30, 2024 was mainly due to a decrease in cash, short-term investments, and loans to third parties-short term, partially offset by an increase in purchase advances.
With plastic waste ballooning into a global environmental crisis, and oil and chemical companies focus more on ESG management, we see increasing opportunities on circular economy and a growing market demand for sustainable and recycled materials, in which products and materials are reused, remanufactured and recycled.
We will continue to intensify our efforts in developing the offshore oilfield client market. With plastic waste ballooning into a global environmental crisis, and oil and chemical companies focus more on ESG management, we see increasing opportunities on circular economy and a growing market demand for sustainable and recycled materials, in which products and materials are reused, remanufactured and recycled.
Contract Balances The Company’s contract balances include contract costs, net and contract liabilities from contracts with customers, and the following table provides information about contract balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ June 30, June 30 ​ ​ 2023 ​ 2024 ​ 2024 ​ RMB RMB US Dollars Contract costs, net ​ ¥ 49,572,685 ​ ¥ 48,335,817 ​ $ 6,651,230 Contract liabilities ​ ¥ 2,748,365 ​ ¥ 1,820,481 ​ $ 250,507 ​ Contract Costs, Net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered. 71 Table of Contents - Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company’s hardware and software revenue.
Contract Balances The Company’s contract balances include contract costs, net and contract liabilities from contracts with customers, and the following table provides information about contract balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ June 30, June 30 ​ ​ 2024 ​ 2025 ​ 2025 ​ RMB RMB US Dollars Contract costs, net ​ ¥ 48,335,817 ​ ¥ 53,547,408 ​ $ 7,474,930 Contract liabilities ​ ¥ 1,820,481 ​ ¥ 4,719,255 ​ $ 658,783 ​ 70 Table of Contents Contract Costs, Net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered. - Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company’s hardware and software revenue.
As of June 30, 2024, we had ¥6,969.0 ($959.0) of warrant liability, ¥12.4 million ($1.7 million) of short-term bank loans, ¥10.0 million ($1.4 million) of short-term borrowings from related parties, ¥1.9 million ($0.3 million) of short-term lease payable due to third parties, ¥1.8 million ($0.2 million) of short-term lease payable due to a related party, ¥24.0 million ($3.3 million) of contractual purchase commitments, and a liability of severance payments of ¥8.8 million ($1.2 million) which is very unlikely to be incurred in the foreseeable future.
As of June 30, 2025, we had ¥688.0 ($96.0) of warrant liability, ¥11.6 million ($1.6 million) of short-term bank loans, ¥10.0 million ($1.4 million) of short-term borrowings from related parties, ¥1.4 million ($0.2 million) of short-term lease payable due to third parties, ¥0.4 million ($0.05 million) of short-term lease payable due to a related party, ¥1.1 million ($0.2 million) of long-term lease payable to third parties, ¥42.4 million ($5.9 million) of contractual purchase commitments, and a liability of severance payments of ¥9.3 million ($1.3 million) which is very unlikely to be incurred in the foreseeable future.
The decrease was primarily due to the decrease of consulting fee, share-based compensation to our management and employees and restricted shares issued for services and Rent fee during the year ended June 30, 2024.
The decrease was primarily due to the decrease of consulting fee, share-based compensation to our management and employees and restricted shares issued for services and audit fee, which was partially offset by the increased rent expenses during the year ended June 30, 2025.
We entered into the wasted plastic chemical recycling business in year 2023 and established two new wholly-owned subsidiaries, Shandong Recon Renewable Resources Technology Co., Ltd (“Recon-SD”) on October 10, 2023, and Guangxi Recon Renewable Resources Technology Co., Ltd. (“Recon-GX”) on February 22, 2024 through Recon-IN to serve customers located in different areas.
We entered into the wasted plastic chemical recycling business in year 2023 and established two new wholly-owned subsidiaries, Shandong Recon Renewable Resources Technology Co., Ltd (“Recon-SD”) on October 10, 2023, and Guangxi Recon Renewable Resources Co., Ltd.
Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets.
Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.
Net cash provided by investing activities was approximately ¥3.0 million ($0.4 million) for the year ended June 30, 2024.
Net cash provided by investing activities was approximately ¥33.7 million ($4.7 million) for the year ended June 30, 2025.
For the years ended June 30, 2023 and 2024, cost of revenue from oilfield environmental protection was approximately ¥14.0 million and ¥9.2 million ($1.3 million), respectively, representing a decrease of approximately ¥4.7 million ($0.6 million) or 33.8%.
For the years ended June 30, 2024 and 2025, cost of revenue from oilfield environmental protection was approximately ¥9.2 million and ¥8.5 million ($1.2 million), respectively, representing a decrease of approximately ¥0.7 million ($0.1 million) or 7.5%. The decrease in the cost of revenue from oilfield environmental protection was in line with decrease in revenue.
Our gross profit as a percentage of revenue increased to 30.3% for the year ended June 30, 2024 from 28.1% for the same period in 2023.
Our gross profit as a percentage of revenue decreased to 23.0% for the year ended June 30, 2025 from 30.3% for the same period in 2024.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable.
The three levels of inputs are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 68 Table of Contents Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
For the year ended June 30, 2024, the Company had approximately ¥43.7 million ($6.0 million) cash out flow from the operating activities, and as of June 30, 2024, our total future minimum purchase commitment under the non-cancellable purchase contracts were amounted to ¥24.0 million ($3.3 million).
For the year ended June 30, 2025, the Company had approximately ¥33.8 million ($4.7 million) cash out flow from the operating activities, and as of June 30, 2025, our total future minimum purchase commitment under the non-cancellable purchase contracts were amounted to ¥42.4 million ($5.9 million).
The Company’s services enable terminal users of different mobile apps run by its clients or cooperators to complete refueling in cash or online through different payment channels, when each transaction, including refueling and payment, is completed, the Company is entitled to charge with pre-settled rates of each transaction amount as service fee and recognize the underlying amount as revenue.
The Company’s services enable terminal users of various mobile applications operated by its customers or partners to complete refueling transactions in cash or online through various payment channels; when each transaction, including refueling and payment, is completed, the Company is entitled to charge, at pre-set rates, each transaction amount as a service fee and recognize the underlying amount as revenue.
Practical Expedients Elected Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant.
Practical Expedients Elected Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340 40 25 4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant. 71 Table of Contents Significant Financing Component - Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606 10 32 18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less.
Shipping and handling charges charged to customers for the fulfillment of the Company’s commitment to transfer the goods are included in revenue, and the costs incurred by the Company as a result of the delivery of the goods are classified as cost of sales in the consolidated operating and comprehensive income (loss) statements.
Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenue, and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations and comprehensive income (loss).
Gain in change in fair value of warrant liability was ¥6.1 million and ¥0.8 million ($0.1million) for the years ended June 30, 2023 and 2024, respectively.
Gain in change in fair value of warrant liability was ¥0.9 million and ¥0.01 million ($0.001 million) for the years ended June 30, 2024 and 2025, respectively.
As of June 30, 2023, goodwill and intangible assets of FGS had fully accrued for impairment. The impairment was mainly due to the decision of the major customers to develop their own autonomous unified system and to significantly reduce the procurement of third-party services. This change has had a significant and negative impact on FGS’s business model and enterprise value.
As of June 30, 2023, goodwill and intangible assets of FGS had fully accrued for impairment. The impairment was mainly due to the decision of the major customers to develop their own autonomous unified system and to significantly reduce the procurement of third-party services. Interest income, net .
General and administrative expenses decreased by 17%, or ¥13.0 million ($1.8 million), from ¥76.8 million in the year ended June 30, 2023 to ¥63.8 million ($8.8 million) in the same period of 2024.
General and administrative expenses decreased by 22.1%, or ¥14.2 million ($2.0 million), from ¥63.8 million in the year ended June 30, 2024 to ¥49.6 million ($6.9 million) in the same period of 2025.
The net cash used in operating activities for the year ended June 30, 2023 was primarily attributable to the net loss attributable to the Company in the amount of ¥51.4 million ($7.1 million) due to the reasons discussed above, reconciled by a decrease in accounts receivable of ¥12.2 million ($1.7 million), and a decrease in contract costs of ¥4.4 million ($0.6 million). 79 Table of Contents Cash from Investing Activities.
The net cash used in operating activities for the year ended June 30, 2025 was primarily attributable to the net loss attributable to the Company in the amount of ¥43.7 million ($6.1 million) due to the reasons discussed above, reconciled by a decrease in accounts receivable of ¥1.7 million ($0.2 million), a decrease in notes receivable of ¥1.3 million ($0.2 million),an increase in other payables of ¥3.4 million ($0.5 million), an increase in trade accounts payable of ¥1.9 million ($0.3 million) and an increase in advances from customers of ¥2.9 million ($0.4 million) Cash from Investing Activities.
As of June 30, 2024, the Company had cash in the amount of approximately ¥110.0 million ($15.1 million) for the next operating cycle ending June 30, 2025.
As of June 30, 2025, the Company had cash in the amount of approximately ¥98.9 million ($13.8 million) for the next operating cycle ending June 30, 2026.
The Company measures certain financial assets, including investments under the equity method on other-than-temporary basis, intangible assets and fixed assets at fair value when an impairment charge is recognized. 69 Table of Contents The carrying amounts reported in the consolidated balance sheets for short-term investments, accounts receivable, notes receivable, other receivables, purchase advances, contract cost, accounts payable, other payable, accrued liabilities, contract liabilities, short-term bank loans and short-term borrowings – related parties approximate fair value because of the immediate or short-term maturity of these financial instruments.
The carrying amounts reported in the consolidated balance sheets for short-term investments, accounts receivable, notes receivable, other receivables, purchase advances, contract cost, accounts payable, other payable, accrued liabilities, contract liabilities, short-term bank loans and short-term borrowings – related parties approximate fair value because of the immediate or short-term maturity of these financial instruments.
The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer.
The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer. Payment terms and conditions vary according to the type of contract, although the Company generally requires customers to pay within one year of the satisfaction of performance obligations.
Cash from Financing Activities. Net cash provided by financing activities amounted to ¥45.0 million ($6.2 million) for the year ended June 30, 2024, as compared to net cash provided by financing activities of ¥56.4 million for the same period in 2023.
Cash from Financing Activities. Net cash used in financing activities amounted to ¥3.3 million (negative $0.5 million) for the year ended June 30, 2025, as compared to net cash provided by financing activities of ¥45.0 million for the same period in 2024. 78 Table of Contents Working Capital.
The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.
After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.
Management plans to continue to monitor and maintain the provision at a lower risk level. Research and development (“R&D”) expenses . R&D expenses consist primarily of salaries and related expenditures for research and development projects.
The increase of net recovery of credit losses was mainly due to the transfer of contract costs with longer aging to cost in this period. Management plans to continue to monitor and maintain the provision at a lower risk level. Research and development (“R&D”) expenses . R&D expenses consist primarily of salaries and related expenditures for research and development projects.
For the years ended June 30, 2023 and 2024, gross profit from platform outsourcing services was approximately ¥3.4 million and ¥3.3 million ($0.5 million), respectively, representing a decrease of approximately ¥0.05 million ($0.01 million) or 1.5 %, The gross margin for platform outsourcing services has remained relatively stable in this period.
For the years ended June 30, 2024 and 2025, gross profit from platform outsourcing services was approximately ¥3.3 million and ¥2.8 million ($0.4 million), respectively, representing a decrease of approximately ¥0.5 million ($0.1 million) or 15.7%, The decrease in gross profit was consistent with the change in revenue.
As of June 30, 2024, we had total assets of ¥552.4 million ($76.0 million), which includes cash of ¥110.0 million ($15.1 million), short-term investments of ¥88.1 million ($12.1 million), net accounts receivable of ¥38.6 million ($5.3 million), loans to third parties of ¥208.9 million ($28.8 million) and net contract costs of ¥48.3 million ($6.7 million) and working capital of ¥460.0 million ($63.3 million).
As of June 30, 2025, we had total assets of ¥525.6 million ($73.4 million), which includes cash of ¥98.9 million ($13.8 million), short-term investments of ¥3.6 million ($0.5 million), accounts receivable, net of ¥35.9 million ($5.0 million), loans to third parties of ¥260.1 million ($36.3 million) and net contract costs of ¥53.5 million ($7.5 million) and working capital of ¥295.6 million ($41.3 million).
Shareholders’ equity amounted to ¥502.6 million ($69.2 million). Cash from Operating Activities. Net cash used in operating activities was ¥43.7 million ($6.0 million) for the year ended June 30, 2024. This was a decrease of approximately ¥7.9 million ($1.1 million) compared to net cash used in operating activities of approximately ¥51.7 million for the same period in 2023.
Shareholders’ equity amounted to ¥467.4 million ($65.3 million). Cash from Operating Activities. Net cash used in operating activities was ¥33.8 million ($4.7 million) for the year ended June 30, 2025. This was an increase of approximately ¥10 million ($1.4 million) compared to net cash used in operating activities of approximately ¥43.7 million for the same period in 2024.
On December 14, 2023, we redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers, and the difference between the repurchase price and fair value of the warrants, a difference of ¥1.7 million ($0.2 million), was recognized as loss in fair value changes of warrant liability.
The primary reason for the decrease of loss in the fair value of the warrant liability was that on December 14, 2023, we redeemed an aggregate of 17,953,269 warrants (equivalent to 997,404 warrants post the 2024 Reverse Split) from the Sellers.
Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized upon the service rendered. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.
This occurs when the control of the goods and services have been transferred to the customer. Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized upon the service rendered.
Cost of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2023 2024 (Decrease) Change ​ Automation product and software ​ ¥ 23,610,281 ​ ¥ 23,864,941 ​ ¥ 254,660 ​ 1.1 % Equipment and accessories ​ ​ 8,945,796 ​ ​ 14,097,459 ​ ​ 5,151,663 ​ 57.6 % Oilfield environmental protection ​ ​ 13,955,673 ​ ​ 9,240,828 ​ ​ (4,714,845) ​ (33.8) % Platform outsourcing services ​ ​ 1,735,645 ​ ​ 637,903 ​ ​ (1,097,742) ​ (63.2) % Chemical recycling ​ ​ — ​ ​ 135,705 ​ ​ 135,705 ​ 100.0 % Total cost of revenue ​ ¥ 48,247,395 ​ ¥ 47,976,836 ​ ¥ (270,559) ​ (0.6) % ​ Our total cost of revenue decreased from ¥48.2 million for the year ended June 30, 2023 to ¥48.0 million ($6.6 million) for the same period in 2024.
Cost of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2024 2025 (Decrease) Change ​ Automation product and software ​ ¥ 23,864,941 ​ ¥ 28,627,787 ​ ¥ 4,762,846 ​ 20.0 % Equipment and accessories ​ ​ 14,097,459 ​ ​ 13,224,911 ​ ​ (872,548) ​ (6.2) % Oilfield environmental protection ​ ​ 9,240,828 ​ ​ 8,549,392 ​ ​ (691,436) ​ (7.5) % Platform outsourcing services ​ ​ 637,903 ​ ​ 642,405 ​ ​ 4,502 ​ 0.7 % Chemical recycling ​ ​ 135,705 ​ ​ — ​ ​ (135,705) ​ (100.0) % Total cost of revenue ​ ¥ 47,976,836 ​ ¥ 51,044,495 ​ ¥ 3,067,659 ​ 6.4 % ​ Our total cost of revenue increased from ¥48.0 million for the year ended June 30, 2024 to ¥51.0 million ($7.1 million) for the same period in 2025.
Such method is adopted because the Company believes it best depicts the transfer of services to the customer.
Such method is adopted because the Company believes it best depicts the transfer of services to the customer. Platform Outsourcing Services The Company provides online platform development and maintenance services to gas stations in various provinces in China.
For the years ended June 30, 2023 and 2024, cost of revenue from equipment and accessories was approximately ¥8.9 million and ¥14.1 million ($1.9 million), respectively, representing an increase of approximately ¥5.2 million ($0.7 million) or 57.6%. The increase in cost of revenue from equipment and accessories was primarily attributable to increased revenue of equipment and accessories.
For the years ended June 30, 2024 and 2025, cost of revenue from equipment and accessories was approximately ¥14.1 million and ¥13.2 million ($1.8 million), respectively, representing a decrease of approximately ¥0.9 million ($0.1 million) or 6.2%. The decrease in costs of revenue was primarily driven by reduced business activity, mirroring the same factor behind the drop in revenue.
For the years ended June 30, 2023 and 2024, gross profit from oilfield environmental protection was approximately ¥5.2 million and ¥8.3 million ($1.1 million), respectively, representing an increase of ¥3.2 million ($0.4 million) or 61.5%.
For the years ended June 30, 2024 and 2025, our gross profit from automation product and software was approximately ¥3.0 million and ¥5.5 million ($0.8 million), respectively, representing an increase in gross profit of approximately ¥2.5 million ($0.4 million) or 84.9%. The increase in gross margin was primarily due to the elevated proportion of high-margin service businesses.
(4) Revenue from platform outsourcing services decreased by ¥ 1.1 million ($ 0.2 million) or 22.4 %. The decrease was mainly due to reduced demand from former gas station customers as they upgraded their own online systems and limited cooperation with third parties.
(4) Revenue from platform outsourcing services decreased by ¥0.5 million ($0.1 million) or 13.0%. The decrease in revenue was primarily driven by a ¥0.8 million drop caused by reduced demand from former gas-station customers upgrading their in-house online systems and by lower cooperation with third-party partners.
For the years ended June 30, 2023 and 2024, cost of revenue from chemical recycling was nil and ¥0.1 million ($0.02 million), which was business and sales related tax. As of June 30, 2024, the factory for the chemical recycling is still under construction and has not started production and sales yet.
For the years ended June 30, 2024 and 2025, cost of revenue from platform outsourcing services remained stable at ¥0.6 million ($0.09 million). For the years ended June 30, 2024 and 2025, cost of revenue from chemical recycling was ¥0.1 million and nil, which was business and sales related tax.
Chemical recycling plays an important role in achieving these goals by preserving the value of plastic materials. Beginning in early calendar year 2023, we have been participating in the chemical recycling of low-value plastics. We have signed purchase intentions with some multinational and local chemical companies, and based on these demands, we have started the construction of our plants.
Chemical recycling plays an important role in achieving these goals by preserving the value of plastic materials. Beginning in early calendar year 2023, we have been participating in the chemical recycling of low-value plastics and initiated a 40,000-ton-per-year waste plastic chemical recycling project (“Recon Plastic Chemical Recycling Project” or “the Project”).
The decrease in other net income was also attributable to an increase in foreign exchange transaction loss of ¥1.1 million ($0.2) due to the fluctuation of exchange rate of RMB against US dollars during the year ended June 30, 2024 compared to the same period of 2023. Net loss .
Additionally, following the closure of the Qinghai office, ¥0.5 million in payables that could no longer be settled was recognized as income, ¥0.2 million in receivables that could not be collected was written off as a loss and an increase in foreign exchange transaction income of ¥1.8 million due to the fluctuation of exchange rate of RMB against US dollars during the year ended June 30, 2025 compared to the same period of 2024.
As of June 30, 2024, the factory for the chemical recycling remains under construction and has not started production and sales yet. 76 Table of Contents Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2023 2024 (Decrease) Change Selling and distribution expenses ¥ 10,638,978 ​ ¥ 10,374,388 ​ ¥ (264,590) ​ (2.5) % % of revenue ​ 15.9 % ​ 15.1 % ​ (0.8) % — ​ General and administrative expenses ​ 76,784,396 ​ ​ 63,765,583 ​ ​ (13,018,813) ​ (17.0) % % of revenue ​ 114.4 % ​ 92.6 % ​ (21.8) % — ​ Allowance for (net recovery of) credit losses ​ (9,038,985) ​ ​ 4,086,505 ​ ​ 13,125,490 ​ (145.2) % % of revenue ​ (13.5) % ​ 5.9 % ​ 19.4 % — ​ Research and development expenses ​ 8,806,205 ​ ​ 14,288,879 ​ ​ 5,482,674 ​ 62.3 % % of revenue ​ 13.1 % ​ 20.8 % ​ 7.7 % — ​ Impairment loss of property and equipment and other long-lived assets ​ ​ 1,009,124 ​ ​ — ​ ​ (1,009,124) ​ (100.0) % % of revenue ​ ​ 1.5 % ​ — % ​ (1.5) % — ​ Operating expenses ¥ 88,199,718 ​ ¥ 92,515,355 ​ ¥ 4,315,637 ​ 4.9 % ​ Selling and Distribution Expenses .
As of June 30, 2025, the factory for the chemical recycling remains under construction and has not started production and sales yet. 75 Table of Contents Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2024 2025 (Decrease) Change Selling and distribution expenses ¥ 10,374,388 ​ ¥ 9,343,480 ​ ¥ (1,030,908) ​ (9.9) % % of revenue ​ 15.1 % ​ 14.1 % ​ (1.0) % — ​ General and administrative expenses ​ 63,765,583 ​ ​ 49,645,680 ​ ​ (14,119,903) ​ (22.1) % % of revenue ​ 92.6 % ​ 74.9 % ​ (17.7) % — ​ Allowance for (net recovery of) credit losses ​ 4,086,505 ​ ​ (2,856,803) ​ ​ (6,943,308) ​ (169.9) % % of revenue ​ 5.9 % ​ (4.3) % ​ (10.2) % — ​ Research and development expenses ​ 14,288,879 ​ ​ 16,427,892 ​ ​ 2,139,013 ​ 15.0 % % of revenue ​ 20.8 % ​ 24.8 % ​ 4.0 % — ​ Operating expenses ¥ 92,515,355 ​ ¥ 72,560,249 ​ ¥ (19,955,106) ​ (21.6) % ​ Selling and Distribution Expenses .
R&D expenses remained relatively stable with an increase by 62.3%, or ¥5.5 million ($0.8 million) from ¥8.8 million for the year ended June 30, 2023 to ¥14.3 million ($2.0 million) for the same period of 2024.
R&D expenses increased by 15.0%, or ¥2.1 million ($0.3 million) from ¥14.3 million for the year ended June 30, 2024 to ¥16.4 million ($2.3 million) for the same period of 2025. R&D expenses accounted for 24.8% of total revenue in the year ended June 30, 2025 and 20.8% of total revenue for the same period of 2024.
Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2023 2024 (Decrease) Change ​ Automation product and software ¥ 26,628,216 ​ ¥ 26,831,668 ​ ¥ 203,452 ​ 0.8 % Equipment and accessories ​ 16,248,197 ​ ​ 20,471,950 ​ ​ 4,223,753 ​ 26.0 % Oilfield environmental protection ​ 19,116,560 ​ ​ 17,576,573 ​ ​ (1,539,987) ​ (8.1) % Platform outsourcing services ​ ​ 5,121,405 ​ ​ 3,974,089 ​ ​ (1,147,316) ​ (22.4) % Chemical recycling ​ ​ — ​ ​ — ​ ​ — ​ — ​ Total revenue ¥ 67,114,378 ​ ¥ 68,854,280 ​ ¥ 1,739,902 ​ 2.6 % ​ Our total revenue for the year ended June 30, 2024 were approximately ¥68.8 million ($9.5 million), an increase of approximately ¥1.7 million ($0.2 million) or 2.6% from ¥67.1 million for the same period in 2023. 74 Table of Contents (1) Revenue from automation product and software in creased by ¥ 0.2 million ($ 0.03 million) or 0.8 %.
Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ ​ ​ ​ Increase / Percentage ​ 2024 2025 (Decrease) Change ​ Automation product and software ¥ 26,831,668 ​ ¥ 34,114,673 ​ ¥ 7,283,005 ​ 27.1 % Equipment and accessories ​ 20,471,950 ​ ​ 18,422,895 ​ ​ (2,049,055) ​ (10.0) % Oilfield environmental protection ​ 17,576,573 ​ ​ 10,291,333 ​ ​ (7,285,240) ​ (41.4) % Platform outsourcing services ​ ​ 3,974,089 ​ ​ 3,456,131 ​ ​ (517,958) ​ (13.0) % Total revenue ¥ 68,854,280 ​ ¥ 66,285,032 ​ ¥ (2,569,248) ​ (3.7) % ​ Our total revenue for the year ended June 30, 2025 were approximately ¥66.3 million ($9.3 million), a decrease of approximately ¥2.5 million ($0.4 million) or 3.7% from ¥68.8 million for the same period in 2024.
Tabular Disclosure of Contractual Obligations Below is a table setting forth all our contractual obligations as of June 30, 2024, which consists of our short-term loan agreements, operating lease obligations, loans from third parties, warrant liabilities and due to related party: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ than ​ 1 – 3 ​ 3 – 5 ​ than Contractual Obligations Total 1 year years years 5 years Debt obligations ¥ 32,428,834 ​ ¥ 22,428,834 ​ ¥ 10,000,000 ​ ¥ — ​ ¥ — Operating lease obligations ​ 8,161,143 ​ 4,017,831 ​ 4,143,312 ​ — ​ — Due to related parties ​ 2,299,069 ​ 2,299,069 ​ — ​ — ​ — Purchase obligation ​ 23,956,141 ​ 23,956,141 ​ — ​ — ​ — Warrant liabilities ​ 6,969 ​ — ​ 6,969 ​ — ​ — Total ¥ 66,852,156 ​ ¥ 52,701,875 ​ ¥ 14,150,281 ​ ¥ — ​ ¥ — ​ ​ ​ ​ 80 Table of Contents
Tabular Disclosure of Contractual Obligations Below is a table setting forth all our contractual obligations as of June 30, 2025, which consists of our short-term loan agreements, operating lease obligations, loans from third parties, warrant liabilities and due to related party: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ than ​ 1 – 3 ​ 3 – 5 ​ than Contractual Obligations Total 1 year years years 5 years Debt obligations ¥ 31,599,586 ​ ¥ 21,599,586 ​ ¥ 10,000,000 ​ ¥ — ​ ¥ — Operating lease obligations ​ 2,915,499 ​ 1,820,285 ​ 1,095,214 ​ — ​ — Due to related parties ​ 2,927,377 ​ 2,927,377 ​ — ​ — ​ — Purchase obligation ​ 42,366,038 ​ 42,366,038 ​ — ​ — ​ — Warrant liabilities ​ 688 ​ — ​ 688 ​ — ​ — Total ¥ 79,809,188 ​ ¥ 68,713,286 ​ ¥ 11,095,902 ​ ¥ — ​ ¥ — ​ ​ ​ ​ 79 Table of Contents
The amount of revenue recognized during the years ended June 30, 2022, 2023 and 2024 that was previously included within contract liability balances was ¥7,390,276, ¥1,901,277 and ¥1,489,311 ($204,936), respectively.
The amount of revenue recognized during the years ended June 30, 2023, 2024 and 2025 that was previously included within contract liability balances was ¥1,901,277, ¥1,489,311 and ¥761,824 ($106,347), respectively. Performance Obligations Performance obligations include delivery of products and provision of services. The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied.
Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ 2023 2024 ​ ​ ​ ​ Gross ​ ​ Gross ​ ​ Increase / ​ Percentage ​ ​ Profit ​ Margin % ​ Profit ​ Margin % ​ (Decrease) ​ Change Automation product and software ​ ¥ 3,017,935 ​ 11.3 % ¥ 2,966,727 ​ 11.1 % ¥ (51,208) ​ (1.7) % Equipment and accessories ​ ​ 7,302,401 ​ 44.9 % ​ 6,374,491 ​ 31.1 % ​ (927,910) ​ (12.7) % Oilfield environmental protection ​ ​ 5,160,887 ​ 27.0 % ​ 8,335,745 ​ 47.4 % ​ 3,174,858 ​ 61.5 % Platform outsourcing services ​ ​ 3,385,760 ​ 66.1 % ​ 3,336,186 ​ 83.9 % ​ (49,574) ​ (1.5) % Chemical recycling ​ ​ — ​ — % ​ (135,705) ​ — % ​ (135,705) ​ — % Total gross profit and margin % ​ ¥ 18,866,983 ​ 28.1 % ¥ 20,877,444 ​ 30.3 % ¥ 2,010,461 ​ 10.7 % ​ Our total gross profit increased to ¥20.9 million ($2.9 million) for the year ended June 30, 2024 from ¥18.9 million for the same period in 2023.
As of June 30, 2025, the factory for the chemical recycling is still under construction and has not started production and sales yet. 74 Table of Contents Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ June 30, ​ 2024 2025 ​ ​ ​ ​ Gross ​ ​ Gross ​ ​ Increase / ​ Percentage ​ ​ Profit ​ Margin % ​ Profit ​ Margin % ​ (Decrease) ​ Change Automation product and software ​ ¥ 2,966,727 ​ 11.1 % ¥ 5,486,886 ​ 16.1 % ¥ 2,520,159 ​ 84.9 % Equipment and accessories ​ ​ 6,374,491 ​ 31.1 % ​ 5,197,984 ​ 28.2 % ​ (1,176,507) ​ (18.5) % Oilfield environmental protection ​ ​ 8,335,745 ​ 47.4 % ​ 1,741,941 ​ 16.9 % ​ (6,593,804) ​ (79.1) % Platform outsourcing services ​ ​ 3,336,186 ​ 83.9 % ​ 2,813,726 ​ 81.4 % ​ (522,460) ​ (15.7) % Chemical recycling ​ ​ (135,705) ​ — % ​ — ​ — % ​ 135,705 ​ (100.0) % Total gross profit and margin % ​ ¥ 20,877,444 ​ 30.3 % ¥ 15,240,537 ​ 23.0 % ¥ (5,636,907) ​ (27.0) % ​ Our total gross profit decreased to ¥15.2 million ($2.1 million) for the year ended June 30, 2025 from ¥20.9 million for the same period in 2024.
Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs. 68 Table of Contents Estimates and Assumptions The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in United States of America (“US GAAP”), which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
Estimates and Assumptions The preparation of the consolidated financial statements in conformity with US GAAP, which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
For the years ended June 30, 2023 and 2024, our gross profit from automation product and software was approximately ¥3.0 million and ¥3.0 million ($0.4 million), respectively, representing a decrease in gross profit of approximately ¥0.1 million ($0.01 million) or 1.7%. The gross margin for automation product and software has remained relatively stable in this period.
For the years ended June 30, 2024 and 2025, gross profit from oilfield environmental protection was approximately ¥8.3 million and ¥1.7 million ($0.2 million), respectively, representing a decrease of ¥6.6 million ($0.9 million) or 79.1%. The main reason for the decrease in gross margin is that one of our customers reduced the settlement price.
This was an increase of approximately ¥248.2 million ($34.2 million) compared to net cash used in investing activities of approximately ¥245.2 million for the same period in 2023, which was due to the increased repayments of loans from third parties and Redemption of short-term investments, which partially offset by the increased payments for short-term investments, payments made for loan to third parties and purchase of land use right.
This was an increase of approximately ¥30.7 million ($4.3 million) compared to net cash used in investing activities of approximately ¥3.0 million for the same period in 2024, which was due to the net cash outflow related to loans to third parties decreased by ¥38.9 million, a ¥6.3 million reduction in spending on land use right and construction-in-progress, and a ¥13.7 million decrease in net cash from short-term investments following lower placements.
As a result of the factors described above, net loss was ¥51.4 million ($7.1 million) for the year ended June 30, 2024, a decrease of ¥10.0 million ($1.4 million) from net loss of ¥61.4 million for the same period of 2023.
As a result of the factors described above, net loss was ¥43.7 million ($6.1 million) for the year ended June 30, 2025, a decrease of ¥7.7 million ($1.1 million) from net loss of ¥51.4 million for the same period of 2024. 77 Table of Contents Liquidity and Capital Resources As of June 30, 2025, we had cash in the amount of approximately ¥98.9 million ($13.8 million) and short-term investment in bank fixed income product of approximately ¥3.6 million ($0.5 million).
Total working capital as of June 30, 2024 amounted to ¥460.0 million ($63.3 million), compared to ¥443.4 million as of June 30, 2023. Total current assets as of June 30, 2024 amounted to ¥507.5 million ($69.8 million), an increase of ¥3.1 million ($0.4 million) compared to approximately ¥504.4 million at June 30, 2023.
Total working capital as of June 30, 2025 amounted to ¥295.6 million ($41.3 million), compared to ¥460.0 million as of June 30, 2024. Total current assets as of June 30, 2025 amounted to ¥356.2 million ($49.7 million), a decrease of ¥150.3 million ($21.0 million) compared to approximately ¥506.5 million at June 30, 2024.
If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer.
At the same time, the Company may cease further sales or services to such customer.
(5) As of June 30, 2024, the factory for the chemical recycling is still under construction and has not started production and sales yet.
This decrease was partly offset by a ¥1.30 million increase driven by higher transaction volumes from diesel users and improved settlement rates with freight-exchange-platform customers. (5) As of June 30, 2025, the factory for the chemical recycling is still under construction and has not started production and sales yet.
Selling expenses were 15.1% of total revenue for year ended June 30, 2024 and 15.9% of total revenue for the same period of 2023 General and Administrative Expenses .
The decrease was primarily driven by lower travel expenses and freight costs, reflecting a modest decline in sales activities during the year ended June 30, 2025. Selling expenses accounted for 14.1% of total revenue for the year ended June 30, 2025, compared to 15.1% of total revenue for the same period in 2024. General and Administrative Expenses .
The ¥10.7 million ($1.5 million) increase in net interest income was primarily due to the increased interest-bearing loans to third parties and increased short-term investments we invested during the year ended June 30, 2024. 78 Table of Contents Other income (expenses), net .
Net interest income was ¥12.3 million ($1.7 million) for the year ended June 30, 2025, compared to net interest income of ¥21.8 million for the same period of 2024. The ¥9.5 million ($1.3 million) decrease in net interest income was primarily attributable to reduced third-party loan balances and lower allocations to short-term investments during the year ended June 30, 2025.
The net recovery of provision for credit loss for the year ended June 30, 2024 decreased by approximately ¥6.6 million ($0.9 million) from the year ended June 30, 2023. The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable, other receivables and loan to third parties.
The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable, other receivables and loan to third parties. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeWong ​ $ 8,000 ​ $ — — ​ $ 8,000 Hu Jijun ​ $ 8,000 ​ $ — — ​ $ 8,000 Zhao Shudong** ​ $ 8,000 ​ $ — — ​ $ 8,000 Duan Yonggang ​ $ 8,000 ​ $ — — ​ $ 8,000 Hu Zhongchen ​ $ — ​ $ — ​ — ​ $ — * Compensation for our directors Yin Shenping, Chen Guangqiang and Liu Jia, who also serve as executive officers, is fully disclosed in the executive compensation table. ** Zhao Shudong resigned on October 9, 2024. ​ 83 Table of Contents The following table summarizes, as of June 30, 2024, the outstanding options, unvested restricted share units and shares that we granted to our current directors and executive officers, reflecting the previous one-for-five Reverse Stock Split in 2019 and the recent one-for-eighteen 2024 Reverse Split. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A Ordinary Shares ​ ​ ​ ​ ​ underlying options ​ ​ ​ ​ ​ ​ ​ ​ awarded/Restricted ​ Exercise price ​ ​ ​ ​ Name ​ Share Units/Shares* ​ (US$/share)* ​ Date of grant ​ Date of expiration Yin Shenping 125,000 — 02/26/2024 02/25/2025 Liu Jia 356 148.50 1/31/2015 1/31/2025 ​ 2,778 — 02/28/2022 02/27/2025 ​ 57,527 — 02/26/2024 02/25/2025 Chen Guangqiang 125,000 — 02/26/2024 02/25/2025 Nelson N.S.
Biggest changeWong ​ $ 9,000 ​ $ — — ​ $ 9,000 Hu Jijun ​ $ 9,000 ​ $ — — ​ $ 9,000 Duan Yonggang ​ $ 9,000 ​ $ — — ​ $ 9,000 Hu Zhongchen ​ $ 4,000 ​ $ — ​ — ​ $ 4,000 * Compensation for our directors Yin Shenping, Chen Guangqiang and Liu Jia, who also serve as executive officers, is fully disclosed in the executive compensation table. ​ The following table summarizes, as of June 30, 2025, the outstanding options, unvested restricted share units and shares that we granted to our current directors and executive officers.
All granted shares under this plan are issued and outstanding on March 9, 2023. On February 26, 2024, the Company’s board approved a grant of 12,900,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $2,130,000 based on the fair value of share price $0.17 at February 26, 2023.
All granted shares under this plan are issued and outstanding on March 9, 2023. On February 26, 2024, the Company’s board approved a grant of 12,900,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $2,130,000 based on the fair value of share price $0.17 at February 26, 2024.
The compensation committee of the board of directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation, and also administers our incentive compensation plans and equity-based plans (but our board retains the authority to interpret those plans). Mr. Hu serves as the chair of the compensation committee.
The compensation committee of the board of directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation, and also administers our incentive compensation plans and equity-based plans (but our board retains the authority to interpret those plans). Mr. Hu Jijun serves as the chair of the compensation committee.
Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement. 6.D.
Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement. 84 Table of Contents 6.D.
Wong, Mr. Hu and Dr. Duan are our independent directors. We do not have a lead independent director because of the foregoing reason because we believe our independent directors are encouraged to freely voice their opinions on a relatively small company board. Our board of directors plays a significant role in our risk oversight.
Wong, Mr. Hu Jijun and Dr. Duan Yonggang are our independent directors. We do not have a lead independent director because of the foregoing reason because we believe our independent directors are encouraged to freely voice their opinions on a relatively small company board. Our board of directors plays a significant role in our risk oversight.
This duty has four essential elements: ​ ● a duty to act in good faith in the best interests of the Company; ● a duty not to personally profit from opportunities that arise from the office of director; ● a duty to avoid conflicts of interest; and ● a duty to exercise powers for the purpose for which such powers were intended. ​ 85 Table of Contents In general, Cayman Islands law imposes various duties on directors of a company with respect to certain matters of management and administration of the Company.
This duty has four essential elements: ​ ● a duty to act in good faith in the best interests of the Company; ● a duty not to personally profit from opportunities that arise from the office of director; ● a duty to avoid conflicts of interest; and ● a duty to exercise powers for the purpose for which such powers were intended. ​ In general, Cayman Islands law imposes various duties on directors of a company with respect to certain matters of management and administration of the Company.
Compensation The following table shows the annual compensation paid by us to Yin Shenping, our Chief Executive Officer, Liu Jia, our Chief Financial Officer, and Chen Guangqiang, our Chief Technology Officer, for the years ended June 30, 2024, 2023 and 2022.
Compensation The following table shows the annual compensation paid by us to Yin Shenping, our Chief Executive Officer, Liu Jia, our Chief Financial Officer, and Chen Guangqiang, our Chief Technology Officer, for the years ended June 30, 2025, 2024 and 2023.
We have not experienced any work stoppages. 86 Table of Contents We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance.
We have not experienced any work stoppages. We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance.
Wong was appointed to the position of director because we believe we can benefit from his leadership skills and management experience. Hu Jijun . Mr. Hu joined our board of directors in 2008. Prior to joining our Board, from 1988 to 2003, Mr.
Wong was appointed to the position of director because we believe we can benefit from his leadership skills and management experience. 80 Table of Contents Hu Jijun . Mr. Hu joined our board of directors in 2008. Prior to joining our Board, from 1988 to 2003, Mr.
Class I directors faced re-election at our annual general meeting of shareholders in 2023 and every three years thereafter. Class II directors faced re-election at our annual general meeting of shareholders in 2024 and every three years thereafter. Class III directors faced re-election at our annual general meeting of shareholders in 2021 and every three years thereafter.
Class II directors faced re-election at our annual general meeting of shareholders in 2024 and every three years thereafter. Class III directors faced re-election at our annual general meeting of shareholders in 2021 and every three years thereafter.
Chen Guangqiang 61 Chief Technology Officer, Chairman and Director Mr. Hu Zhongchen 71 Independent Director Mr. Nelson N.S. Wong 62 Independent Director (Audit Committee Chair) Mr. Hu Jijun 59 Independent Director Dr. Duan Yonggang 60 Independent Director ​ Yin Shenping. Mr. Yin has been our Chief Executive Officer and a director since the Company’s inception. In 2003, Mr.
Chen Guangqiang 62 Chief Technology Officer, Chairman and Director Mr. Hu Zhongchen 72 Independent Director Mr. Nelson N.S. Wong 63 Independent Director (Audit Committee Chair) Mr. Hu Jijun 60 Independent Director Dr. Duan Yonggang 61 Independent Director ​ Yin Shenping. Mr. Yin has been our Chief Executive Officer and a director since the Company’s inception. In 2003, Mr.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ​ 6.A. Directors and Senior Management Executive Officers and Directors The following table sets forth our executive officers and directors, their ages and the positions held by them: ​ Name Age Position Held Mr. Yin Shenping 54 Chief Executive Officer and Director Ms. Liu Jia 41 Chief Financial Officer and Director Mr.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ​ 6.A. Directors and Senior Management Executive Officers and Directors The following table sets forth our executive officers and directors, their ages and the positions held by them: ​ Name Age Position Held Mr. Yin Shenping 55 Chief Executive Officer and Director Ms. Liu Jia 42 Chief Financial Officer and Director Mr.
Employees As of June 30, 2024, we employed a total of 184 full-time in the following functions: ​ ​ ​ ​ ​ ​ ​ ​ Number of Employees ​ ​ June 30, June 30, June 30, Department ​ 2024 ​ 2023 ​ 2022 Senior Management 11 ​ 20 ​ 27 Human Resource & Administration 10 ​ 26 ​ 25 Finance 17 ​ 11 ​ 13 Research & Development & Technology 68 ​ 64 ​ 53 Procurement and production 35 ​ 27 ​ 26 Sales & Marketing 43 ​ 40 ​ 44 Total 184 ​ 188 ​ 188 ​ Our employees are not represented by a labor organization or covered by a collective bargaining agreement.
Employees As of June 30, 2025, we employed a total of 188 full-time in the following functions: ​ ​ ​ ​ ​ ​ ​ ​ Number of Employees ​ ​ June 30, June 30, June 30, Department ​ 2025 ​ 2024 ​ 2023 Senior Management 11 ​ 11 ​ 20 Human Resource & Administration 10 ​ 10 ​ 26 Finance 18 ​ 17 ​ 11 Research & Development & Technology 72 ​ 68 ​ 64 Procurement and production 34 ​ 35 ​ 27 Sales & Marketing 43 ​ 43 ​ 40 Total 188 ​ 184 ​ 188 ​ Our employees are not represented by a labor organization or covered by a collective bargaining agreement.
Hu retired from Baotou Steel (Group) Co., Ltd. after having been employed from 1979 to 2014. Mr. Hu received his bachelor’s degree in business management in 1979 from Inner Mongolia University of Technology. He possesses a China’s Senior Economist certificate. Mr.
Mr. Hu joined our board of directors in October 2024. Mr. Hu retired from Baotou Steel (Group) Co., Ltd. after having been employed from 1979 to 2014. Mr. Hu received his bachelor’s degree in business management in 1979 from Inner Mongolia University of Technology. He possesses a China’s Senior Economist certificate. Mr.
There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. 84 Table of Contents The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Zhao, Mr.
There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Hu Zhongchen, Mr. Nelson N.S.
These restricted shares vested immediately on the grant date. As of June 30, 2024, all granted shares under this plan are not issued and outstanding. 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation None. 88 Table of Contents
These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on August 1, 2024. 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation None. 86 Table of Contents
Liu has served as our Chief Financial Officer since 2008 and as our director since 2022. Ms. Liu received her bachelor’s degree in 2006 from Beijing University of Chemical Technology, School of Economics and Management and her master’s degree in industrial economics in 2009 from Beijing Wuzi University. Ms. Liu is a certified U.S. CPA. Chen Guangqiang. Mr.
Liu has served as our Chief Financial Officer since 2008 and as our director since 2022. Ms. Liu received her bachelor’s degree in 2006 from Beijing University of Chemical Technology, School of Economics and Management and her master’s degree in industrial economics in 2009 from Beijing Wuzi University. Ms.
Zhao serves as the chair of the nominating committee. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.
Hu Zhongchen serves as the chair of the nominating committee. 83 Table of Contents There are no other arrangements or understandings pursuant to which our directors are selected or nominated.
On March 15, 2023, the Company’s board granted 1,000,000 (55,556 shares post 2024 Reverse Split) Class A Ordinary Shares to the employees of the Company, at a fair value of $372,600, with a vesting period of six months from the date of the grant. 87 Table of Contents On February 26, 2024, the Company’s board granted 6,255,483 (347,527 shares post 2024 Reverse Split) Class A Ordinary Shares pursuant to its 2015 Equity Incentive Plan to the employees of the Company, at a fair value of $2,130,000, with a vesting period of one year from the date of the grant.
On February 26, 2024, the Company’s board granted 6,255,483 (347,527 shares post 2024 Reverse Split) Class A Ordinary Shares pursuant to its 2015 Equity Incentive Plan to the employees of the Company, at a fair value of $2,130,000, with a vesting period of one year from the date of the grant.
In fiscal year 2024, we contributed approximately $418,587 to the employee benefit plans and social insurance. In fiscal year 2023, we contributed approximately $382,791 to the employee benefit plans and social insurance. In fiscal year 2022, we contributed approximately $427,614 to the employee benefit plans and social insurance.
In fiscal year 2025, we contributed approximately $530,266 to the employee benefit plans and social insurance. In fiscal year 2024, we contributed approximately $418,587 to the employee benefit plans and social insurance. In fiscal year 2023, we contributed approximately $382,791 to the employee benefit plans and social insurance.
No other employee or officer received more than $100,000 in total compensation in 2024, 2023 and 2022. 82 Table of Contents Summary Executive Compensation Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option Restricted Stock ​ ​ Name and principal position ​ Year ​ Salary ​ Bonus ​ Awards ​ Awards ​ Total Yin Shenping, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Executive Officer 2024 ​ $ 600,000 ​ $ 180,000 ​ $ — ​ $ 1,186,674 ​ $ 1,966,674 ​ 2023 ​ $ 620,000 ​ $ 150,000 ​ $ — ​ $ 1,515,000 ​ $ 2,285,000 ​ 2022 ​ $ 360,000 ​ $ 100,000 ​ $ — ​ $ 2,934,500 ​ $ 3,394,500 Liu Jia ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Financial Officer 2024 ​ $ 180,000 ​ $ 60,000 ​ $ — ​ $ 263,078 ​ $ 503,078 ​ 2023 ​ $ 162,000 ​ $ 60,000 ​ $ — ​ $ 372,600 ​ $ 594,600 ​ 2022 ​ $ 112,000 ​ $ 50,000 ​ $ — ​ $ 156,000 ​ $ 318,000 Chen Guangqiang, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chief Technology Officer 2024 ​ $ 600,000 ​ $ 180,000 ​ $ — ​ $ 1,186,674 ​ $ 1,966,674 ​ 2023 ​ $ 620,000 ​ $ 150,000 ​ $ — ​ $ 1,515,000 ​ $ 2,285,000 ​ 2022 ​ $ 395,833 ​ $ 100,000 ​ $ — ​ $ 2,934,000 ​ $ 3,430,333 ​ Director Compensation All directors hold office until the expiration of their respective terms and until their successors have been duly elected and qualified.
No other employee or officer received more than $100,000 in total compensation in 2025, 2024 and 2023. 81 Table of Contents Summary Executive Compensation Table ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option Restricted Stock ​ ​ Name and principal position ​ Year ​ Salary ​ Bonus ​ Awards ​ Awards ​ Total Yin Shenping, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Executive Officer 2025 ​ $ 471,866 ​ $ 100,000 ​ $ — ​ $ 397,068 ​ $ 968,934 ​ 2024 ​ $ 600,000 ​ $ 180,000 ​ $ — ​ $ 1,186,674 ​ $ 1,966,674 ​ 2023 ​ $ 620,000 ​ $ 150,000 ​ $ — ​ $ 1,515,000 ​ $ 2,285,000 Liu Jia ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Financial Officer 2025 ​ $ 182,072 ​ $ 50,000 ​ $ — ​ $ 189,708 ​ $ 421,780 ​ 2024 ​ $ 180,000 ​ $ 60,000 ​ $ — ​ $ 263,078 ​ $ 503,078 ​ 2023 ​ $ 162,000 ​ $ 60,000 ​ $ — ​ $ 372,600 ​ $ 594,600 Chen Guangqiang, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chief Technology Officer 2025 ​ $ 471,866 ​ $ 100,000 ​ $ — ​ $ 397,068 ​ $ 968,934 ​ 2024 ​ $ 600,000 ​ $ 180,000 ​ $ — ​ $ 1,186,674 ​ $ 1,966,674 ​ 2023 ​ $ 620,000 ​ $ 150,000 ​ $ — ​ $ 1,515,000 ​ $ 2,285,000 ​ Director Compensation All directors hold office until the expiration of their respective terms and until their successors have been duly elected and qualified.
As of June 30, 2024, we have 6,802,926 (377,939 shares post 2024 Reverse Split) non-vested restricted stocks outstanding under such grant. Executive Class B Ordinary Stock Grants On February 28, 2022, the Company’s board approved a grant of 1,600,000 Class B Ordinary Shares to its management as compensation cost for awards.
As of June 30, 2025, we have 2,263,194 non-vested restricted stocks outstanding under such grant. 85 Table of Contents Executive Class B Ordinary Stock Grants On February 28, 2022, the Company’s board approved a grant of 1,600,000 Class B Ordinary Shares to its management as compensation cost for awards.
From November 2004, Dr. Duan has been a professor at Southwest Petroleum University in Sichuan, China. He is the director of the oil well technology center of petroleum engineering school of Southwest Petroleum University. In addition, Dr. Duan is also a researcher and Ph.D. supervisor.
Duan has been teaching and researching in the oil-gas field development engineering area for a long time. From November 2004, Dr. Duan has been a professor at Southwest Petroleum University in Sichuan, China. He is the director of the oil well technology center of petroleum engineering school of Southwest Petroleum University. In addition, Dr.
Duan received his Ph.D. degree in oil-gas field development engineering in 2009 from Southwest Petroleum University. Dr. Duan was chosen as a director because he is an expert in the oilfield area. Hu Zhongchen. Mr. Hu joined our board of directors in October 2024. Mr.
Duan received his bachelor’s degree in oil production in 1984, and his master degree in oil-gas field development engineering in 1988, both from Southwest Colleague. Dr. Duan received his Ph.D. degree in oil-gas field development engineering in 2009 from Southwest Petroleum University. Dr. Duan was chosen as a director because he is an expert in the oilfield area. Hu Zhongchen.
Chen served as the general manager of Beijing Adar. Mr. Chen received his bachelor’s degree in 1985 from Southwest Petroleum Institute. Mr.
Chen was a chief engineer for Xinda Company, CNPC Development Bureau. From 1999 through 2003, Mr. Chen served as the general manager of Beijing Adar. Mr. Chen received his bachelor’s degree in 1985 from Southwest Petroleum Institute. Mr.
Chen has served as our Chief Technology Officer and director since our inception. Mr. Chen was a geological engineer for the Fourth Oil Extraction Plant of Huabei Oilfield from 1985 through 1993. From 1993 through 1999, Mr. Chen was a chief engineer for Xinda Company, CNPC Development Bureau. From 1999 through 2003, Mr.
Liu is an independent director of Haoxi Health Technology Limited (Nasdaq: HAO). Ms. Liu is a certified U.S. CPA. Chen Guangqiang. Mr. Chen has served as our Chief Technology Officer and director since our inception. Mr. Chen was a geological engineer for the Fourth Oil Extraction Plant of Huabei Oilfield from 1985 through 1993. From 1993 through 1999, Mr.
He has published over 60 articles on top academic journals and participated in writing six books. He was named an expert with outstanding contributions and an oil-gas safety expert in Sichuan Province, China. Dr. Duan received his bachelor’s degree in oil production in 1984, and his master degree in oil-gas field development engineering in 1988, both from Southwest Colleague. Dr.
Duan is also a researcher and Ph.D. supervisor. He has published over 60 articles on top academic journals and participated in writing six books. He was named an expert with outstanding contributions and an oil-gas safety expert in Sichuan Province, China. Dr.
Hu was appointed to the position of a director because we believe his years of experience and knowledge gained while working at our No. 2 test-drill plant will prove beneficial to the guidance of the Company. 81 Table of Contents Zhao Shudong (from 2013 to October 2024) . Mr. Zhao joined our board of directors in 2013. Mr.
Hu was appointed to the position of a director because we believe his years of experience and knowledge gained while working at our No. 2 test-drill plant will prove beneficial to the guidance of the Company. Duan Yonggang. Dr. Duan has served as our director since March 2020. Dr.
Board Practices Board of directors and Board Committees Our board of directors currently consists of seven members. There are no family relationships between any of our executive officers and directors. The directors are divided into three classes, as nearly equal in number as the then total number of directors permits.
There are no family relationships between any of our executive officers and directors. The directors are divided into three classes, as nearly equal in number as the then total number of directors permits. Class I directors faced re-election at our annual general meeting of shareholders in 2023 and every three years thereafter.
Removed
Zhao spent over 30 years working in the oilfield industry prior to retiring from full-time work in 2006. From 1970 to 1976, Mr. Zhao worked as a technician in the Daqing oilfield. From 1976 to 1982, Mr. Zhao served as the vice director of the Hubei Oilfield Generalized Geologic Technical Research Institute. Mr.
Added
The following Class A Ordinary Shares were excluded from the calculation of EPS and beneficial ownership as these unvested Class A ordinary shares that were pre-issued under the 2024 Equity Incentive Plan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A Ordinary Shares ​ ​ ​ ​ ​ underlying options ​ ​ ​ ​ ​ ​ ​ ​ awarded/Restricted ​ Exercise price ​ ​ ​ ​ Name ​ Share Units/Shares* ​ (US$/share)* ​ Date of grant ​ Date of expiration Yin Shenping 820,000 — 03/31/2025 03/31/2027 Liu Jia 258,194 — 03/31/2025 03/31/2027 Chen Guangqiang 820,000 — 03/31/2025 03/31/2027 Nelson N.S.
Removed
Zhao then spent 11 years as a director and section chief at the Scientific and Technological Development Department of the Huabei Petroleum Administrative Bureau. He was subsequently appointed Chief Geologist of the bureau, a position he held from 1993 to 1999. From 1999 to 2006, Mr. Zhao served as the General Manager of the Huabei Oilfield Company of CNPC. Mr.
Added
Wong 50,000 — 03/31/2025 03/31/2027 Hu Jijun 50,000 — 03/31/2025 03/31/2027 Duan Yonggang 50,000 — 03/31/2025 03/31/2027 Total 2,048,194 ​ — ​ ​ ​ ​ ​ 82 Table of Contents 6.C. Board Practices Board of directors and Board Committees Our board of directors currently consists of seven members.
Removed
Zhao studied at the Northeast Petroleum Institute from 1965 to 1970. Mr. Zhao was elected as a director because of his extensive experience in the oilfield industry. Duan Yonggang. Dr. Duan has served as our director since March 2020. Dr. Duan has been teaching and researching in the oil-gas field development engineering area for a long time.
Added
Major Shareholders.” Share and Share Options Share Option Pool As of June 30, 2025, there are no outstanding options under the 2015 Incentive Plan, the 2021 Incentive Plan, or the 2025 Incentive Plan.
Removed
Wong 278 148.50 1/31/2015 1/31/2025 ​ ​ 1,666 ​ — ​ 02/28/2022 ​ 02/27/2025 ​ 10,000 — 02/26/2024 02/27/2025 Hu Jijun 278 148.50 1/31/2015 1/31/2025 ​ ​ 1,666 ​ — ​ 02/28/2022 ​ 02/27/2025 ​ 10,000 — 02/26/2024 02/25/2025 Zhao Shudong** 200 148.50 1/31/2015 1/31/2025 ​ ​ 1,666 ​ — ​ 02/28/2022 ​ 02/27/2025 ​ 10,000 — 02/26/2024 02/25/2025 Duan Yonggang 1,666 — 02/28/2022 02/27/2025 ​ ​ 10,000 ​ — ​ 02/26/2024 ​ 02/25/2025 Total 358,081 ​ ​ ​ ​ ​ ​ * Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024. ** Zhao Shudong resigned on October 9, 2024. ​ 6.C.
Added
On March 15, 2023, the Company’s board granted 1,000,000 (55,556 shares post 2024 Reverse Split) Class A Ordinary Shares to the employees of the Company, at a fair value of $372,600, with a vesting period of six months from the date of the grant.
Removed
Major Shareholders.” Share and Share Options Share Option Pool In connection with our initial public offering, we established a pool for share options as our 2009 Stock Incentive Plan (“2009 Incentive Plan”) for the Domestic Companies’ and our employees.
Added
On March 31, 2025, the Company’s board granted 2,263,194 Class A Ordinary Shares pursuant to its 2024 Equity Incentive Plan to the employees of the Company, at a fair value of $3,496,635, with a vesting period of two years from the date of the grant.
Removed
This pool initially contained options to purchase up to 158,073 (8,782 shares post 2024 Reverse Split) of our Class A Ordinary Shares. The options will vest at a rate of 20% per year for five years and have an exercise price of the market price of our shares on the date the options are granted.
Removed
To date, we issued 112,800 (6,267 options post 2024 Reverse Split) options and 45,273 (2,515 shares post 2024 Reverse Split) shares out of this employee share option pool. We initially granted 58,600 (3,256 options post 2024 Reverse Split) options in 2009.
Removed
We held a shareholder meeting in December 2010 and announced the resignation of three directors, and as a result, 20,000 (1,111 options post 2024 Reverse Split) options were forfeited and went back in the pool.
Removed
In 2012, we granted an additional 83,000 (4,611 options post 2024 Reverse Split) options and 8,800 (489 options post 2024 Reverse Split) options were forfeited and went back to the pool. In the three months ended June 30, 2014, 29,680 (1,649 options post 2024 Reverse Split) vested options from 2012 grants were exercised.
Removed
During the year ended June 30, 2024, we have 0 options outstanding under the 2009 Incentive Plan. On January 29, 2015, the Company held its 2014 annual general meeting of shareholders, during which the Company’s shareholders approved the Company’s 2015 Stock Incentive Plan (“2015 Incentive Plan”).
Removed
Pursuant to the 2015 Incentive Plan, we were initially authorized to issue up to an aggregate of 140,000 (7,778 shares post 2024 Reverse Split) Class A Ordinary Shares.
Removed
Additionally, commencing on the first business day in fiscal year ending June 30, 2016 and on the first business day of each fiscal year thereafter while the 2015 Incentive Plan is in effect, the maximum number of Class A Ordinary Shares available for issuance under this 2015 Incentive Plan during that fiscal year shall be increased such that, as of such first business day, the maximum aggregate number of Class A Ordinary Shares available for issuance under this 2015 Incentive Plan during that fiscal year shall be equal to Fifteen Percent (15%) of the number of total issued and outstanding Class A Ordinary Shares of the Company as recorded by the Company’s transfer agent on the last business day of the prior fiscal year.
Removed
The Company granted options to purchase 80,000 (4,456 shares post 2024 Reverse Split) Class A Ordinary Shares to its employees and non-employee director on January 31, 2015 under the 2015 Incentive Plan. As of June 30, 2024, we have an aggregate of 80,000 (4,456 options post 2024 Reverse Split) options outstanding under the 2015 Incentive Plan.
Removed
On April 5, 2021, the Company held its 2020 annual general meeting of shareholders, during which the Company’s shareholders approved the Company’s 2021 Equity Incentive Plan (“2021 Incentive Plan”). As of June 30, 2024, we have 0 options outstanding under the 2021 Incentive Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

16 edited+2 added−1 removed5 unchanged
Biggest changePercentage of beneficial ownership is based on shares, which consists of 7,987,959 Class A Ordinary Shares and 7,100,000 Class B Ordinary Shares outstanding as of June 30, 2024 and 80,000 (4,456 shares post 2024 Reverse Split) shares subject to options. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned (1) ​ ​ ​ ​ Class A Ordinary Shares ​ Class B Ordinary Shares ​ % of Total Voting ​ Name of Beneficial Owner ​ Number % (2) Number % (2) Power (3) Directors and Executive Officers: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Yin Shenping (4) 164,041 ​ 2.05 % 10,000,000 ​ 50 % 48.76 % Chen Guangqiang (5) 160,297 ​ 2.01 % 10,000,000 ​ 50 % 48.75 % Hu Jijun (6) 16,166 ​ * ​ ​ ​ ​ ​ * ​ Wong Nelson (7) 15,278 ​ * ​ ​ ​ ​ ​ * ​ Zhao Shudong (8) 16,421 ​ * ​ ​ ​ ​ ​ * ​ Hu Zhongchen ​ — ​ — ​ ​ ​ ​ ​ — ​ Liu Jia (9) 126,485 ​ 1.58 % ​ ​ ​ ​ * ​ Duan Yonggang (10) 15,000 ​ * ​ ​ ​ ​ ​ * ​ Directors and Executive Officers as a Group (eight members) 513,688 ​ 6.43 % 20,000,000 ​ 100 % 97.75 % 5% or Greater Shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Less than 1%.
Biggest changeThe Class A Ordinary Shares excludes 2,263,194 unvested Class A ordinary shares that were pre-issued under the 2024 Equity Incentive Plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned (1) ​ ​ ​ ​ Class A Ordinary Shares ​ Class B Ordinary Shares ​ % of Total Voting ​ Name of Beneficial Owner ​ Number % Number % Power (2) Directors and Executive Officers: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Yin Shenping (3) 162,625 ​ 1.94 % 10,000,000 ​ 50.00 % 48.70 % Chen Guangqiang (4) 160,297 ​ 1.92 % 10,000,000 ​ 50.00 % 48.70 % Hu Jijun (5) 15,888 ​ * ​ ​ ​ ​ ​ * ​ Wong Nelson (6) 15,000 ​ * ​ ​ ​ ​ ​ * ​ Hu Zhongchen (7) ​ — ​ * ​ ​ ​ ​ ​ * ​ Liu Jia (8) 121,416 ​ 1.45 % ​ ​ ​ ​ * ​ Duan Yonggang (9) 15,000 ​ * ​ ​ ​ ​ ​ * ​ Directors and Executive Officers as a Group (eight members) 490,226 ​ 5.90 % 20,000,000 ​ 100.00 % 97.40 % 5% or Greater Shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RAPID PROCEED LIMITED ​ 555,556 ​ 6.64 % — ​ — ​ * ​ NEWWILK VENTURE LLC ​ 666,667 ​ 7.97 % — ​ — ​ * ​ LUCAS SHAWN CAPITAL LLC ​ 666,667 ​ 7.97 % — ​ — ​ * ​ HAOTIAN VENTURE CAPITAL LLC ​ 666,667 ​ 7.97 % — ​ — ​ * ​ YESCOM VENTURE LLC ​ 666,667 ​ 7.97 % — ​ — ​ * ​ NUMBER 8 CAPITAL LIMITED ​ 666,667 ​ 7.97 % — ​ — ​ * ​ John Michael Fuentes ​ 555,556 ​ 6.64 % — ​ — ​ * ​ * Less than 1%.
Yin holds 164,041 Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares. Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Yin has substantial control over Recon.
Yin holds Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares. Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Yin has substantial control over Recon.
(see Note 13) Other than as described herein, no transactions required to be disclosed under Item 404 of Regulation S-K have occurred since the beginning of the Company’s last fiscal year.
(see Note 15) Other than as described herein, no transactions required to be disclosed under Item 404 of Regulation S-K have occurred since the beginning of the Company’s last fiscal year.
Below is a summary of the Company’s short-term borrowings due to related parties as of June 30, 2023 and 2024, respectively. The Company also had long-term borrowings from a related party.
Below is a summary of the Company’s short-term borrowings due to related parties as of June 30, 2024 and 2025, respectively. The Company also had long-term borrowings from a related party.
(9) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (10) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. 7.B.
(8) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (9) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. 7.B.
The details of leases from related parties are as below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monthly Rent Monthly Rent Lessee ​ Lessor ​ Rent Period ​ RMB ​ US Dollars Nanjing Recon ​ Yin Shenping ​ April 1, 2024 - March 31, 2026 ​ ¥ 40,000 ​ $ 5,504 BHD Chen Guangqiang Jan 1, 2024- Dec 31, 2025 ​ 33,250 ​ 4,575 BHD Chen Guangqiang Jan 1, 2024- Dec 31, 2025 ​ 23,625 ​ 3,251 ​ Expenses paid by the owner on behalf of Recon – Shareholders and founders of the VIEs paid certain operating expenses for the Company.
The details of leases from related parties are as below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monthly Rent Monthly Rent Lessee ​ Lessor ​ Rent Period ​ RMB ​ US Dollars Nanjing Recon ​ Yin Shenping ​ April 1, 2024 - March 31, 2026 ​ ¥ 40,000 ​ $ 5,584 BHD Chen Guangqiang Jan 1, 2024- Dec 31, 2025 ​ 33,250 ​ 4,642 BHD Chen Guangqiang Jan 1, 2024- Dec 31, 2025 ​ 23,625 ​ 3,298 ​ Expenses paid by the owner on behalf of Recon – Shareholders and founders of the VIEs paid certain operating expenses for the Company.
The address is: Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (5) Mr. Chen holds 160,297 Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares.
The address is: Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (4) Mr. Chen holds Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Ordinary Shares. All shares represent Class A and Class B Ordinary Shares.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Ordinary Shares. All shares represent Class A and Class B Ordinary Shares. (2) Class A Ordinary Shares have one vote per share. Class B Ordinary Shares have fifteen votes per share. (3) Mr.
As of June 30, 2023 and 2024, ¥2,592,395 and ¥2,299,069 ($316,362) was due to them, respectively. Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans.
As of June 30, 2024 and 2025, ¥2,299,069 and ¥2,927,377 ($408,646) was due to them, respectively. Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans.
The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥96,875 ($13,330) with annual rental expense at ¥1.2 million ($0.16 million).
The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥96,875 ($13,524) with annual rental expense at ¥1,162,500 ($162,288).
Below is a summary of the Company’s long-term borrowings due to a related party as of June 30, 2023 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ ​ 2023 ​ 2024 ​ 2024 Short-term borrowings due to related parties: ​ RMB ​ RMB ​ US Dollars Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023 ​ ¥ 10,004,055 ​ ¥ — ​ $ — Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024* ​ 4,993,950 ​ — ​ — Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024* ​ 5,020,217 ​ — ​ — Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024 ​ — ​ 10,002,875 ​ 1,376,441 Total short-term borrowings due to related parties ​ ¥ 20,018,222 ​ ¥ 10,002,875 ​ $ 1,376,441 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ ​ 2023 ​ 2024 ​ 2024 Long-term borrowings due to related party: ​ RMB ​ RMB ​ US Dollars Long-term borrowing from a Founder, monthly payments of ¥31,250 inclusive of interest at 3.75%, three years loan, due in April 29, 2027. ​ ¥ — ​ ¥ 10,000,000 ​ $ 1,376,046 Less: current portion ​ — ​ ​ — ​ ​ — Total long-term borrowings due to related party ​ ¥ — ​ ¥ 10,000,000 ​ $ 1,376,046 ​ 90 Table of Contents Leases from related parties - The Company has various agreements for the lease of office space owned by the Founders and their family members.
Below is a summary of the Company’s long-term borrowings due to a related party as of June 30, 2024 and 2025, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ ​ 2024 ​ 2025 ​ 2025 Short-term borrowings due to related parties: ​ RMB ​ RMB ​ US Dollars Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024 ​ ¥ 10,002,875 ​ ¥ — ​ $ — Short-term borrowing from a Founder, 3.45% annual interest, due on December 13, 2025 ​ — ​ 10,017,250 ​ 1,398,354 Total short-term borrowings due to related parties ​ ¥ 10,002,875 ​ ¥ 10,017,250 ​ $ 1,398,354 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ ​ 2024 ​ 2025 ​ 2025 Long-term borrowings due to related party: ​ RMB ​ RMB ​ US Dollars Long-term borrowing from a Founder, monthly payments of ¥31,250 inclusive of interest at 3.75%, three years loan, due in April 29, 2027. ​ ¥ 10,000,000 ​ ¥ 10,000,000 ​ $ 1,395,946 Total long-term borrowings due to related party ​ ¥ 10,000,000 ​ ¥ 10,000,000 ​ $ 1,395,946 ​ 88 Table of Contents Leases from related parties - The Company has various agreements for the lease of office space owned by the Founders and their family members.
(6) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. 89 Table of Contents (7) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (8) Zhao Shudong resigned on October 9, 2024.
(6) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. (7) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.
Director Independence The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Wong, Mr. Hu, Mr. Zhao and Dr. Duan are our independent directors. 7.C. Interests of experts and counsel Not applicable for annual reports on Form 20-F. ​
Director Independence The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Nelson N.S. Wong, Mr. Zhongchen, Mr. Hu Jijun and Dr. Duan Yonggang are our independent directors. 7.C.
Related party transactions Transactions with Related Persons Other payables consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ 2023 2024 2024 Related Parties RMB RMB US Dollars Expenses paid by the major shareholders ¥ 1,796,309 ¥ 1,453,910 ​ $ 200,064 Due to family members of the owners of BHD and FGS ​ 545,159 845,159 ​ 116,298 Due to management staff for costs incurred on behalf of the Company ​ 250,927 — ​ — Total ¥ 2,592,395 ¥ 2,299,069 ​ $ 316,362 ​ The Company also had short-term borrowings from related parties.
Related party transactions Transactions with Related Persons Other payables consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, June 30, ​ 2024 2025 2025 Related Parties RMB RMB US Dollars Expenses paid by the major shareholders ¥ 1,453,910 ¥ 2,382,218 ​ $ 332,545 Due to family members of the owners of BHD and FGS ​ 845,159 545,159 ​ 76,101 Total ¥ 2,299,069 ¥ 2,927,377 ​ $ 408,646 ​ The Company also had short-term borrowings from related parties.
Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Chen has substantial control over Recon. The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.
Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Chen has substantial control over Recon.
Percentage of beneficial ownership is based on shares, which consists of 7,987,959 Class A Ordinary Shares and 20,000,000 Class B Ordinary Shares outstanding as of August 31, 2024 and 80,000 (4,456 shares post 2024 Reverse Split) shares subject to options that are exercisable within 60 days after October 23, 2023.
Percentage of beneficial ownership is based on shares, which consists of 8,364,232 Class A Ordinary Shares and 20,000,000 Class B Ordinary Shares outstanding as of June 30, 2025.
Removed
(2) The percentage of shares beneficially owned is based on 7,987,959 Class A Ordinary Shares and 20,000,000 Class B Ordinary Shares outstanding as of October 30, 2024. (3) Class A Ordinary Shares have one vote per share. Class B Ordinary Shares have fifteen votes per share. (4) Mr.
Added
The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China. 87 Table of Contents (5) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.
Added
Interests of experts and counsel Not applicable for annual reports on Form 20-F. ​ 89 Table of Contents