Recon Technology, Ltd Reports Financial Results for the First Six Months of Fiscal Year 2024

BEIJING, June 28, 2024 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) ("Recon" or the "Company"), a China -based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for the first six months of fiscal year 2024.

First Six Months of Fiscal 2024 Financial Highlights:

- Total revenue w as RMB45.3 million ($6.4 million) for the six months ended December 31, 2023, identical to the same period in 2022.

- Gross profit decreased to RMB12.1 million ($1.7 million) for the six months ended December 31, 2023, from RMB13.1 million ($1.8 million) for the same period in 2022.

- Gross margin decreased to 26.7% for the six months ended December 31, 2023 from 28.8% for the same period in 2022.

- Net loss was RMB23.1 million ($3.3 million) for the six months ended December 31, 2023, a decrease of RMB6.8 million ($1.0 million) from net loss of RMB29.9 million ($4.2 million) for the same period of 2022.

		For the Six Months Ended
		December 31,
(in RMB millions, except earnings per share; differences due to rounding)		2023				2022				Increase /(Decrease)				Percentage Change
Revenue		RMB		45.3		RMB		45.6		RMB		0.3		(0.7)	%
Gross profit				12.1				13.1				(1.0)		(7.8)	%
Gross margin				26.7	%			28.8	%			(7.8)	%	/
Net loss				(23.1)				(29.9)				(6.8)		22.6	%
Net loss per share - Basic and diluted				(8.27)				(15.46)				(7.19)		46.5	%

Management Commentary

"We have had a good six months in all of our major businesses, especially our oilfield services business," said Mr. Shenping Yin, Founder and CEO of Recon. "Although our revenues were flat compared to last year, the structural improvement of our business is essentially complete. Our onshore oil and gas fields service business has shown good signs of recovery, and we have also developed new customers in offshore fields. We have purchased land to begin construction of a chemical plant for the chemical recycling of plastic waste, and are continuing to work on the pre-approval procedures required to operate the plant, which are essential to ensure future compliance in China. We believe this facility will generate significant returns for our company and our shareholders in the future and is also an important way for us to meet our EGS obligations. We remain excited about fiscal 2024 and beyond."

First Six Months Fiscal 2024 Financial Results:

Revenue

Total revenues for the six months ended December 31, 2023 were approximately RMB45.3 million ($6.4 million), a decrease of approximately RMB0.3 million ($0.04 million) or 0.7% from RMB45.6 million ($6.4 million) for the same period in 2022.

- Revenue from automation product and software decreased by RMB1.5 million ($0.2 million) or 7.9%. During the six months period ended by December 31, 2023, affected by temporary changes in market participation requirements from electricity industry customers, our business in the electronic automation segment disrupted and revenue from non-oilfield customers decreased by RMB9.6 million ($1.3 million). However, due to the recovery of oilfield production, sales to oilfield customers increased by RMB8.1million ($1.1 million). Thus, our revenue from automation product and software business decreased slightly overall. We anticipate that revenue from the electronic business will resume and revenue will recover from October, 2024.

- Revenue from equipment and accessories increased by RMB8.1 million ($1.1 million) or 83.6%. The increase in revenue was driven by the continued growth of our oilfield business and the successful expansion of our offshore oilfield services.

- Revenue from oilfield environmental protection decreased by RMB4.7 million ($0.7 million) or 37.0%, mainly due to a reduction in the volume of oily wastewater provided by customers as their production intensity decreased. In addition, Gansu BHD' s hazardous waste operation permit expired in July, 2023, and the renewal process took longer than expected due to changing government regulations. Production activities were not allowed during this period. As a result, revenue from oily sludge treatment was reduced to a remarkably low level.

- Revenue from platform outsourcing services decreased by RMB2.2 million ($0.3 million) or 55.3%. 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. During the period, we shifted our target market from gasoline users to diesel users and established partnerships with several major online freight platform customers. We expect the increase in revenue from this segment to gradually form a new business base for the Company.

Cost of revenue

Cost of revenues increased slightly from RMB32.4 million ($4.6 million) for the six months ended December 31, 2022 to RMB 33.2 million ($4.7 million) for the same period in 2023.

- For the six months ended December 31, 2022 and 2023, cost of revenue from automation product and software was approximately RMB14.9 million and RMB14.0 million ($2.0 million), respectively, representing a decrease of approximately RMB0.9 million ($0.1 million) or 6.2%. The decrease in cost of revenue from automation product and software was primarily attributable to decreased revenue of automation products.

- For the six months ended December 31, 2022 and 2023, cost of revenue from equipment and accessories was approximately RMB6.2 million and ¥12.7 million ($1.8 million), respectively, representing an increase of approximately RMB6.6 million ($0.9 million) or 106.1%. The increase in cost of revenue from equipment and accessories was primarily attributable to increased revenue of equipment and accessories.

- For the six months ended December 31,2022 and 2023, cost of revenue from oilfield environmental protection was approximately RMB9.8 million and RMB5.9 million ($0.8 million), respectively, representing a decrease of approximately RMB3.9 million ($0.5 million) or 39.6%. The decrease in the cost of revenue, mainly drawn from wastewater and oily sludge treatments, was in line with decrease in revenue related to our oily sludge treatment.

- For the six months ended December 31,2022 and 2023, cost of revenue from platform outsourcing services was approximately RMB1.2 million and RMB0.3 million ($0.04 million). The decrease in cost of revenue was mainly due to a reduction in the number of employees, and saved servers leasing costs.

Gross profit

Gross profit decreased to RMB12.1 million ($1.7 million) for the six months ended December 31,2023 from RMB13.1 million ($1.8 million) for the same period in 2022. Our gross profit as a percentage of revenue decreased to 26.7 % for the six months ended December 31, 2023 from 28.8% for the same period in 2022.

- For the six months ended December 31, 2022 and 2023, our gross profit from automation product and software was approximately RMB4.1 million and RMB3.5 million ($0.5 million), respectively, representing a decrease in gross profit of approximately RMB0.6 million ($0.1 million) or 14.3%. The gross margin for automation product and software has remained relatively stable in this period.

- For the six months ended December 31, 2022 and 2023, gross profit from equipment and accessories was approximately RMB3.5 million and RMB5.1 million ($0.7 million), respectively, representing an increase of approximately RMB1.6 million ($0.2 million) or 46.4 %. The reason for the decrease in gross margin is that oilfield customers have adopted a low-cost operating model and tightly controlled budgets, which has narrowed the overall margins of the market. Consequently, we had to resort to lower margins to secure business.

- For the six months ended December 31, 2022 and 2023, gross profit from oilfield environmental protection was approximately RMB2.8 million and RMB2.0 million ($0.3 million), respectively, representing a decrease of RMB0.8 million ($0.1 million) or 27.4%. The decrease in gross profit from oilfield environmental protection was primarily due to decreased production of oily sludge and oily wastewater.

- For the six months ended December 31, 2022 and 2023, gross profit from platform outsourcing services was approximately RMB2.8 million and RMB1.5 million ($0.2 million), respectively, representing a decrease of approximately RMB1.3 million ($0.2 million) or 46.6%, primarily due to lower sales as a result of lower demand.

Operating expenses

Selling expenses increased by 13.1%, or RMB0.5 million ($0.1 million), from RMB4.0 million for the six months ended December 31, 2022 to RMB4.5 million ($0.6 million) in the same period of 2023.

General and administrative expenses decreased by 15.9%, or RMB4.2 million ($0.6 million), from RMB26.2 million for the six months ended December 31, 2022 to RMB22.0 million ($3.1 million) in the same period of 2023.

The Company also recorded a net recovery of credit losses of RMB7.1 million for the six months ended December 31, 2022 as compared to net provision for credit losses of RMB1.6 million ($0.2 million) for the same period in 2023.

Research and development expenses remained relatively stable with a slight increase by 32.4%, or RMB1.7 million ($0.2 million) from RMB5.1 million for the six months ended December 31, 2022 to RMB6.8 million ($1.0 million) for the same period of 2023.

Loss from operations

Loss from operations was RMB22.8 million ($3.2 million) for the six months ended December 31, 2023, compared to a loss of RMB15.1 million for the same period of 2022. This RMB7.7 million ($1.1 million) increase in loss from operations was primarily due to the increase in operating expense as discussed above.

Change in fair value of warrant liability

The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Loss in fair value changes of warrant liability was RMB20.1million and RMB0.22 million ($0.03 million) for the six months ended December 31, 2022 and 2023, respectively. On December 14, 2023, the Company 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 RMB1.72 million ($0.24 million), was recognized as loss in fair value changes of warrant liability.

Interest income

Net interest income was RMB10.4 million ($1.5 million) for the six months ended December 31, 2023, compared to net interest income of RMB5.0 million for the same period of 2022. The RMB5.4 million ($0.8 million) increase in net interest income was primarily due to the increased short-term investments we invested during the six months ended December 31,2023.

Other income (expenses), net.

Other net expenses was RMB8.6 million ($1.2 million) for the six months ended December 31, 2023, compared to other net income of RMB0.3 million for the same period of 2022. The RMB8.9 million ($ 1.2 million) increase in other net expenses was primarily due to an increase in other expenses of RMB8.9 million ($ 1.2 million) as we accrued an estimated liability based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023. On December 14, 2023, the Company redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. The Warrant Purchase Agreement stipulated that "The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement". The Company accrued an estimated liability of $1.2 million based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

Net loss

As a result of the factors described above, net loss was RMB23.1 million ($3.3 million) for the six months ended December 31, 2023, an increase of RMB6.8 million ($1.0 million) from net loss of RMB29.9 million for the same period of 2022.

Cash and short-term investment

As of June 30, 2023, we had cash in the amount of approximately RMB104.1 million ($14.7 million) and short-term investment in bank fixed income product of approximately RMB184.2 million ($25.9 million). As of December 31, 2023, we had cash in the amount of approximately RMB121.8 million ($17.2 million) and short-term investment in bank fixed income product of approximately RMB134.0 million ($18.9 million).

About Recon Technology, Ltd ("RCON")

Recon Technology, Ltd (NASDAQ: RCON) is the People's Republic of China's first NASDAQ-listed non-state owned oil and gas field service company. Recon supplies China's largest oil exploration companies, Sinopec (NYSE: SNP) and The China National Petroleum Corporation ("CNPC"), with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions within several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients. For additional information please visit: http://www.recon.cn/.

Forward-Looking Statements

Recon includes "forward-looking statements" within the meaning of the federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as "scheduled," "may," "will," "could," "should," "would," "expect," "believe," "anticipate," "project," "plan," "estimate," "forecast," "goal," "objective," "committed," "intend," "continue," or "will likely result," and similar expressions that concern Recon's strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those that Recon expected. Many of these statements are derived from Recon's operating budgets and forecasts, which are based on many detailed assumptions that Recon believes are reasonable, or are based on various assumptions about certain plans, activities or events which we expect will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under "Risk Factors" in Recon's most recent Annual Report on Form 20-F and any subsequent half-year financial filings on Form 6-K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements that Recon makes from time to time in its SEC filings and public communications. Recon cannot assure the reader that it will realize the results or developments Recon anticipates, or, even if substantially realized, that they will result in the consequences or affect Recon or its operations in the way Recon expects. Forward-looking statements speak only as of the date made. Recon undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, Recon.

For more information, please contact:

The Company
Ms. Liu Jia
Chief Financial Officer
Recon Technology, Ltd
Phone: [phone]
Email: [email protected]

RECON TECHNOLOGY, LTD
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(UNAUDITED)
		As of June, 30			As of December, 31			As of December, 31
		2023			2023			2023
		RMB			RMB			US Dollars
ASSETS
Current assets
Cash		¥	104,125,800		¥	121,848,777		$	17,162,041
Restricted cash			731,545			3,904			550
Short-term investments			184,184,455			133,950,650			18,866,554
Notes receivable			3,742,390			12,532,717			1,765,196
Accounts receivable, net			27,453,415			30,813,885			4,340,045
Inventories, net			6,330,701			1,855,535			261,347
Other receivables, net			2,185,733			4,184,778			589,414
Loans to third parties			123,055,874			79,374,144			11,179,614
Purchase advances, net			2,680,456			1,996,413			281,189
Contract costs, net			49,572,685			37,323,824			5,256,951
Prepaid expenses			350,119			295,384			41,603
Operating lease right-of-use assets, net - current (including ¥nil and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)						879,288			123,845
Total current assets			504,413,173			425,059,299			59,868,349
Property and equipment, net			24,752,864			23,492,024			3,308,782
Long-term other receivables, net			3,640			-			-
Long-term loan to third parties			-			18,500,000			2,605,671
Operating lease right-of-use assets, net - non-current (including ¥335,976 and ¥nil from a related party as of June 30, 2023 and December 31, 2023, respectively)			2,654,900			16,204,906			2,282,413
Total Assets		¥	531,824,577		¥	483,256,229		$	68,065,215
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans		¥	12,451,481		¥	12,336,285		$	1,737,529
Accounts payable			10,791,721			12,062,861			1,699,018
Other payables			5,819,010			1,688,166			237,773
Other payable- related parties			2,592,395			2,209,017			311,134
Contract liabilities			2,748,365			4,888,749			688,566
Accrued payroll and employees' welfare			2,382,516			2,399,919			338,022
Taxes payable			1,163,006			1,702,898			239,848
Short-term borrowings - related parties			20,018,222			20,019,889			2,819,742
Operating lease liabilities - current (including ¥335,976 and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)			3,066,146			1,038,354			146,248
Warrant liability - current						8,519,880			1,200,000
Total Current Liabilities			61,032,862			66,866,018			9,417,880
Operating lease liabilities - non-current (including ¥ nil and ¥nil from a related party as of June 30, 2023 and December 31, 2023, respectively)			25,144			25,869			3,644
Warrant liability - non-current			31,615,668			993,986			140,000
Total Liabilities			92,673,674			67,885,873			9,561,524
Commitments and Contingencies
Equity
Class A Ordinary Shares, $0.0001 US dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371,573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively*			26,932			27,791			3,914
Class B Ordinary Shares, $0.0001 US 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 December 31, 2023, respectively*			4,693			4,693			661
Additional paid-in capital*			580,340,061			584,275,905			82,293,540
Statutory reserve			4,148,929			4,148,929			584,364
Accumulated deficit			(170,440,826)			(192,994,848)			(27,182,756)
Accumulated other comprehensive income			35,127,173			30,517,774			4,298,339
Total shareholders' equity			449,206,962			425,980,244			59,998,062
Non-controlling interests			(10,056,059)			(10,609,888)			(1,494,371)
Total equity			439,150,903			415,370,356			58,503,691
Total Liabilities and Equity		¥	531,824,577		¥	483,256,229		$	68,065,215

* Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

RECON TECHNOLOGY, LTD
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
		For the six months ended
		December 31,
		2022			2023			2023
		RMB			RMB			USD
Revenue
Revenue		¥	45,559,591		¥	45,256,672		$	6,374,269
Revenue			45,559,591			45,256,672			6,374,269
Cost of revenue
Cost of revenue			32,427,772			33,150,930			4,669,211
Cost of revenue			32,427,772			33,150,930			4,669,211
Gross profit			13,131,819			12,105,742			1,705,058
Selling and distribution expenses			4,021,899			4,547,115			640,448
General and administrative expenses			26,212,540			22,042,042			3,104,557
Allowance for (net recovery of) credit losses			(7,141,708)			1,553,364			218,787
Research and development expenses			5,109,302			6,765,287			952,871
Operating expenses			28,202,033			34,907,808			4,916,663
Loss from operations			(15,070,214)			(22,802,066)			(3,211,605)
Other income (expenses)
Subsidy income			85,602			131,428			18,511
Interest income			5,187,649			12,060,640			1,698,706
Interest expense			(169,091)			(1,683,289)			(237,086)
Loss in fair value changes of warrants liability			(20,097,665)			(1,941,195)			(273,412)
Foreign exchange transaction gain (loss)			42,455			(76,040)			(10,710)
Other income			157,753			(8,701,288)			(1,225,550)
Other income, net			(14,793,297)			(209,744)			(29,541)
Loss before income tax			(29,863,511)			(23,011,810)			(3,241,146)
Income tax expenses			9,180			96,041			13,527
Net loss			(29,872,691)			(23,107,851)			(3,254,673)
Less: Net loss attributable to non-controlling interests			3,727			(553,829)			(78,005)
Net loss attributable to Recon Technology, Ltd		¥	(29,876,418)		¥	(22,554,022)		$	(3,176,668)
Comprehensive income (loss)
Net loss			(29,872,691)			(23,107,851)			(3,254,673)
Foreign currency translation adjustment			9,663,701			(4,609,399)			(649,220)
Comprehensive loss			(20,208,990)			(27,717,250)			(3,903,893)
Less: Comprehensive Income (loss) attributable to non- controlling interests			3,727			(553,829)			(78,005)
Comprehensive loss attributable to Recon Technology, Ltd		¥	(20,212,717)		¥	(27,163,421)		$	(3,825,888)
Loss per share - basic and diluted*		¥	(15.46)		¥	(8.27)		$	(1.16)
Weighted - average shares -basic and diluted*			1,932,544			2,728,056			2,728,056

* Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

RECON TECHNOLOGY, LTD
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(UNAUDITED)
		For the six months ended December 31,
		2022			2023			2023
		RMB			RMB			US Dollars
Cash flows from operating activities:
Net loss		¥	(29,872,691)		¥	(23,107,851)		$	(3,254,673)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,952,625			1,426,971			200,985
Loss (gain) from disposal of equipment			(12,782)			32,252			4,543
Gain in fair value changes of warrants liability			20,097,665			10,461,075			1,473,412
Allowance for (net recovery of) credit losses			(7,141,708)			1,553,364			218,787
Allowance for slow moving inventories			245,990			(350,637)			(49,386)
Amortization of right of use assets			1,627,888			570,959			80,418
Restricted shares issued for management and employees			1,796,417			2,866,560			403,747
Restricted shares issued for services			4,304,857			1,070,143			150,726
Accrued interest income from loans to third parties			(3,757,041)			(4,415,298)			(621,882)
Accrued interest income from short-term investment			-			(2,352,250)			(331,307)
Changes in operating assets and liabilities:
Notes receivable			2,356,367			(8,790,327)			(1,238,092)
Accounts receivable			(12,501,742)			(4,412,034)			(621,422)
Inventories			(1,158,138)			4,863,435			685,000
Other receivables			(9,673,906)			5,465,227			769,761
Purchase advances			(449,477)			558,040			78,598
Contract costs			9,765,091			10,442,916			1,470,854
Prepaid expense			10,345			54,734			7,709
Prepaid expense - related parties			275,000			-			-
Operating lease liabilities			(1,619,168)			(2,027,067)			(285,506)
Accounts payable			247,387			1,271,140			179,036
Other payables			(1,414,691)			(4,103,150)			(577,918)
Other payables-related parties			231,133			(383,378)			(53,998)
Contract liabilities			(1,945,877)			2,140,385			301,467
Accrued payroll and employees' welfare			27,710			17,399			2,451
Taxes payable			677,510			537,591			75,718
Net cash used in operating activities			(25,931,236)			(6,609,801)			(930,972)
Cash flows from investing activities:
Purchases of property and equipment			(821,272)			(216,082)			(30,435)
Proceeds from disposal of equipment			31,950			20,000			2,817
Purchase of land use right			-			(15,000,251)			(2,112,741)
Repayments of loans to third parties			25,194,900			44,613,948			6,283,743
Payments made for loans to third parties			(58,488,100)			(16,600,000)			(2,338,061)
Payments for short-term investments			-			(131,598,400)			(18,535,247)
Redemption of short-term investments			-			180,338,865			25,400,198
Net cash (used in) generated by investing activities			(34,082,522)			61,558,080			8,670,274
Cash flows from financing activities:
Proceeds from short-term bank loans			1,000,000			-			-
Repayments of short-term bank loans			-			(123,000)			(17,324)
Proceeds from short-term borrowings-related parties			10,000,000			10,000,000			1,408,471
Repayments of short-term borrowings-related parties			(9,000,000)			(10,018,222)			(1,411,037)
Repayments of long-term borrowings-related party			(476,927)			-			-
Redemption of warrants			-			(31,866,604)			(4,488,317)
Net cash provided by (used in) financing activities			1,523,073			(32,007,826)			(4,508,207)
Effect of exchange rate fluctuation on cash and restricted cash			10,633,748			(5,945,117)			(837,352)
Net increase (decrease) in cash and restricted cash			(47,856,937)			16,995,336			2,393,743
Cash and restricted cash at beginning of year			317,698,417			104,857,345			14,768,848
Cash and restricted cash at end of year		¥	269,841,480		¥	121,852,681		$	17,162,591
Supplemental cash flow information
Cash paid during the year for interest		¥	624,321		¥	468,440		$	64,601
Cash paid during the year for taxes		¥	9,180		¥	16,505		$	2,276
Reconciliation of cash and restricted cash, beginning of year
Cash		¥	316,974,857		¥	104,125,800		¥	14,665,812
Restricted cash			723,560			731,545			103,036
Cash and restricted cash, beginning of year		¥	317,698,417		¥	104,857,345		$	14,768,848
Reconciliation of cash and restricted cash, end of year
Cash		¥	269,111,420		¥	121,848,777		¥	17,162,041
Restricted cash			730,060			3,904			550
Cash and restricted cash, end of year		¥	269,841,480		¥	121,852,681		$	17,162,591
Non-cash investing and financing activities
Right-of-use assets obtained in exchange for operating lease obligations		¥	-		¥	298,783		$	41,204
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement		¥	43,881		¥	-		$	-
Inventories transferred to and used as fixed assets		¥	(65,456)		¥	-		$	-
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements

SOURCE Recon Technology, Ltd