20-F/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 2)

(Mark One)

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

OR

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

For the fiscal year ended June 30, 2023

OR

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

OR

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

Date of event requiring this shell company report

For the transition period from                        to                        

Commission file number 001-34409

RECON TECHNOLOGY, LTD

(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation or organization)

Room 601, No. 1 Shui’an South Street

Chaoyang District, Beijing 100012

People’s Republic of China

(Address of principal executive offices)

Liu Jia, Chief Financial Officer

Telephone: +86 (10) 8494 5799

liujia@recon.cn; Fax: +86 (10) 8494 5792

Room 601, No. 1 Shui’an South Street

Chaoyang District, Beijing 100012

People’s Republic of China

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

Title of each class	Name of each exchange on which registered
Class A Ordinary Shares, $0.0001 par value per share*	NASDAQ Capital Market

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 2,306,295 Class A Ordinary Shares.*

*Retrospectively restated for the 2024 Reverse Split and 2024 change in capital structure (as defined herein) on May 1, 2024 and change in capital structure on March 29, 2024.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes    ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes    ☒ No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes    ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes    ☐ No

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

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
		Emerging growth company ☐

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

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

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

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

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17    ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

☐ Yes    ☒ No

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes    ☐ No

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this annual report with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.

All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

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Explanatory Note

This Amendment No. 2 on Form 20-F/A (the “Amendment”) amends the annual report on Form 20-F of Recon Technology, Ltd (the “Company”) for the fiscal year ended June 30, 2023, originally filed with the U.S. Securities and Exchange Commission (“SEC”) on October 30, 2023 (the “Original Form 20-F”). This Amendment is being filed to amend Items 3, 6, 7, 10, 16, 18, and 19 in the Form 20-F.

On March 29, 2024, the Company’s shareholders approved to effect a reverse stock split of the Company’s Class A Ordinary Shares at the ratio of one-for-eighteen with the market effective date of May 1, 2024 (the “2024 Reverse Split”). 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 filed an Fourth Amended and Restated Memorandum and Articles of Association with the local registry, and changed 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”).

Other than as set forth herein, this Amendment does not, and does not purport to, amend, update or restate any other information or disclosure included in the Original Form 20-F, or reflect any events that have occurred after the filing of the Original Form 20-F.

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PART I

ITEM 3.              KEY INFORMATION

A. Selected Financial Data

The following table presents the selected consolidated financial information for our company. The selected consolidated statements of operations data for the three years ended June 30, 2021, 2022 and 2023 and the consolidated balance sheet data as of June 30, 2021, 2022, and 2023 have been derived from our audited consolidated financial statements set forth in “Item 18 – Financial Statements”. The selected consolidated balance sheet data for the year ended June 30, 2021 have been derived from our audited consolidated balance sheet as of June 30, 2021, which is not included in this annual report. Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below. Our audited consolidated financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America, or U.S. GAAP.

Following the one-for-five reverse stock split of our Class A Ordinary Shares effective on December 27, 2019, and following the dual class structure divided into Class A Ordinary Shares and Class B Ordinary Shares effective on April 5, 2021, and 2024 Reverse Split, all share and per share amounts disclosed throughout this annual report, in the table below and in our consolidated financial statements have been retroactively updated to reflect this change in capital structure, unless otherwise indicated. Please see “Item 4. Information on the Company—History and Development of the Company”.

(All amounts in thousands of Renminbi, except Dividend per share in U.S. dollars and Shares outstanding)

Statement of operations data:

	For the years ended June 30,
	2023	2022	2021
	RMB¥	RMB¥	RMB¥
Revenue	67,114,378	83,777,571	47,938,575
Loss from operations	(69,332,735)	(82,313,417)	(61,578,948)
Net income (loss) attributable to Recon Technology, Ltd	(59,167,301)	95,586,795	(22,832,734)
Loss per share*
-Basic	(27.43)	55.52	(30.04)
-Diluted	(27.43)	55.52	(30.04)
Weighted average number of Class A and Class B Ordinary Shares used in computation*
-Basic	2,157,158	1,721,529	760,116
-Diluted	2,157,158	1,721,529	760,116

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

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Balance sheet data:

	2023	2022	2021
	RMB¥	RMB¥	RMB¥
Current assets	504,413,173	445,617,041	488,505,185
Total assets	531,824,577	490,242,084	566,516,660
Current liabilities	61,032,862	52,878,284	76,462,604
Total liabilities	92,673,674	77,357,323	279,001,194
Total shareholder’s equity	449,206,962	420,631,729	295,095,034
Shares outstanding (Class A Ordinary Shares)*	2,306,295	1,704,766	1,547,415
Shares outstanding (Class B Ordinary Shares)**	7,100,000	4,100,000	—

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

**The dual class structure divided into Class A Ordinary Shares and Class B Ordinary Shares effective on April 5, 2021

B. Capitalization and Indebtedness

Not applicable by 20-F as an annual report.

C. Reasons for the Offer and Use of Proceeds

Not applicable by 20-F as an annual report.

D. Risk Factors

Investing in our Class A Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Class A Ordinary Shares, you should consider carefully the risks and uncertainties described below. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. If any of these risks actually occurs, our business, business prospects, financial condition or results of operations could be seriously harmed. This could cause the trading price of our Class A Ordinary Shares to decline, resulting in a loss of all or part of your investment. Please also read carefully the section above entitled “Special Note Regarding Forward-Looking Statements.”

Risks Related to Our Business

Public health epidemics or outbreaks such as COVID-19 could adversely impact our business.

Our business, financial condition and results of operations may be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, which could significantly disrupt our operations. In December 2019, COVID-19 emerged in Wuhan, Hubei Province, China. The COVID-19 outbreak and spread has caused lockdowns, quarantines, travel restrictions, and closures of businesses and schools.

In addition, COVID-19 has caused severe disruptions in transportation, limited access to our facilities, client work fields and limited support from workforce employed in our operations, and as a result, we experienced and may continue to experience the delays in provision of services to our customers and completion of contractual performance obligations, affecting our revenue recognition and collection schedule of account receivables.

During the six months ended December 31, 2022, either the Company’s or its customers’ operations were occasionally affected by regional outbreaks, resulting in some of its business still not returning to previous levels. In early December of 2022, the Chinese State Council issued a nationwide policy loosening the government’s control of the epidemic, which led to the emergence of widespread infections. At that time, most of the industries experienced work stoppages and production stoppages. Since the beginning of the calendar year 2023, although the extent of the future impact of COVID-19 cannot be predicted, we believe that the Company’s business has not been significantly affected and the impact of COVID-19 on the Company’s business and financial results will not be sustainable in the long run.

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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. 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. There can be no assurance that we will be able to compete effectively in our industry.

In addition, our competitors may introduce new systems. If these new systems are more attractive to customers than the systems we currently use or may develop, our customers may switch to our competitors’ services, and we may lose market share. We believe that competition may become more intense as more integrated automation service providers, including Chinese/foreign joint ventures, are qualified to conduct business. We cannot assure you that we will be able to compete successfully against any new or existing competitors, or against any new systems our competitors may implement. Any of these competitive factors could have a material adverse effect on our revenue and profitability.

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. Many factors may limit our ability to develop and refine new products, including the availability of funds to dedicate to this portion of our business and access to new products and technologies that we can incorporate into our products, as well as marketplace resistance to new products and technologies. We believe that the Domestic Companies (defined in the following paragraph) and our products are able to compete in the marketplace based upon, among other things, our intellectual property. We cannot assure investors that applications of our and the Domestic Companies’ technologies or those of third parties, if developed, will not be rendered superfluous or obsolete by research efforts and technological advances by others in these fields.

Our company and our subsidiaries, Recon Investment Ltd. (“Recon-IN”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon BJ”) 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. (“Gan Su BHD”), Huang Hua BHD Petroleum Equipment Manufacturing Co. Ltd. (“HH BHD”), and Qing Hai BHD New Energy Technology Co. Ltd. (“Qing Hai BHD”) (collectively, the “Domestic Companies”). As new technologies are developed, the Domestic Companies and we may need to adapt and change our products and services, our method of marketing or delivery or alter our current business in ways that may adversely affect revenue and our ability to achieve our proposed business goals. Accordingly, there is a risk that the Domestic Companies’ and our technology will not support a viable commercial enterprise.

Our financial performance is dependent upon the sale and implementation of petroleum mining and extraction software and hardware and related services, a single, concentrated group of products.

We derive substantially all of our revenue from the license and implementation of software applications and hardware innovations for the Chinese petroleum industry. The life cycle of our products and services is difficult to estimate due in large measure to the potential effect of new software and hardware applications and enhancements, including those we introduce, and the maturation in both the Chinese petroleum and software/hardware industries. 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.

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. These advance payments are often substantial, and we dedicate a material amount of our liquidity to advance these to such third-party vendors. There is no guarantee that the services we require will be delivered, whether due to supply chain disruptions or any other reason after we provide our advance payments, and many of our vendors lack sufficient insurance to protect us against such failures to deliver. Moreover, if a third-party vendor declares bankruptcy or we engage in litigation, we be unable to recover the advance fees in their entirety, if at all.

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As a technology-oriented business, our ability to operate profitably is directly related to our ability to develop and protect our proprietary technology.

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.

Although the Chinese government has issued Nanjing Recon over ten copyrights on software and Nanjing Recon and BHD over forty 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. Despite our efforts to protect the Domestic Companies’ and our proprietary rights, unauthorized parties, including customers, may attempt to reverse engineer or copy aspects of the Domestic Companies’ and our products or to obtain and use information that the Domestic Companies and we regard as proprietary. Furthermore, our competitors may independently develop substantially equivalent or superior proprietary information and techniques, reverse engineer information and techniques, or otherwise gain access to our proprietary technology. In the future, we cannot guarantee that others will not use the Domestic Companies’ and our technology without proper authorization. In addition, under the Chinese intellectual property law, the 50-year protection period for software copyright and 10-year patent protection period are not subject to renewal upon expiration.

The Domestic Companies and we develop our software products on third-party middleware software programs that are licensed by our customers from third parties, generally on a non-exclusive basis. The termination of any such licenses, or the failure of the third-party licensors to adequately maintain or update their products, could result in delay in our ability to develop, market or ship certain of our products while we seek to implement technology offered by alternative sources. While it may be necessary or desirable in the future to obtain other licenses, there can be no assurance that they will be able to do so on commercially reasonable terms or at all.

In addition, the Domestic Companies and we may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity, scope or enforceability of our proprietary rights. Any such claims could be time consuming, result in costly litigation, cause product development or shipment delays or force the Domestic Companies or us to enter into royalty or license agreements rather than dispute the merits of such claims, thereby impairing our financial performance by requiring the Domestic Companies or us to pay additional royalties and/or license fees to third parties. There is always a risk that patents, if issued, may be subsequently invalidated, either in whole or in part and this could diminish or extinguish protection for any technology we may license. In addition, the laws of China may not protect proprietary rights to the same extent as U.S. law. Therefore, we may be unable to meaningfully protect our rights in trade secrets, technical know-how and other non-patented technology. Any failure to enforce or protect the Domestic Companies’ and our rights could cause us to lose the ability to exclude others from issuing technology to develop or sell competing products.

We may not be able to adequately protect our intellectual property, which could cause us to be less competitive and negatively impact our business.

We rely on trademark, patent and trade secret law, as well as confidentiality agreements with certain of our employees to protect our proprietary rights. The product patents owned by the Company are employee service patents invented by the Company’s key employees. We generally require the Domestic Companies’ and our employees, consultants, advisors and collaborators to execute appropriate confidentiality agreements with, as applicable, the respective Domestic Companies and us. These agreements typically provide that all material and confidential information developed or made known to the individual during the course of the individual’s relationship with us is owned by the us and will be kept confidential and not disclosed to third parties except in specific circumstances. These agreements may be breached, and in some instances, we may not have an appropriate remedy available for breach of the agreements.

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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 the Domestic Companies and we will not become the subject of infringement claims or legal proceedings by third parties with respect to the Domestic Companies’ and our current programs or future software developments. 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.

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. 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. Such defects, errors or difficulties may cause future delays in product introductions and shipments, result in increased costs and diversion of development resources, require design modifications or impair customer satisfaction with the Domestic Companies’ and our software. Since these software products are used by our customers to perform mission-critical functions related to petroleum mining and extraction, design defects, software errors, misuse of these products, incorrect data from external sources or other potential problems within or out of our control that may arise from the use of the Domestic Companies’ and our products could result in financial or other damages to our customers. We do not maintain product liability insurance. Although our license agreements with customers contain provisions designed to limit our exposure to potential claims as well as any liabilities arising from such claims, such provisions may not effectively protect us against such claims and the liability and costs associated therewith. To the extent we are found liable in a product liability case, we could be required to pay substantial amount of damages to an injured customer, thereby impairing our financial condition.

We are dependent on the state of the PRC’s economy as the majority of our business is conducted in the PRC.

Currently, the majority of our business operations are conducted in the PRC, and most of our customers are also located in the PRC. Accordingly, any significant slowdown in the PRC economy may cause our customers to reduce expenditures or delay the building of new facilities or projects. This may in turn lead to a decline in the demand for our products and services. That would have a material adverse effect on our business, financial condition and results of operations.

Our future success depends on our ability to help our customers find, develop and acquire petroleum reserves.

To remain competitive in our industry, our products must help our customers locate and develop or acquire new crude oil reserves to replace those depleted by production. Without successful exploration or acquisition activities, our customers’ reserves, production and revenue will decline rapidly. If the Domestic Companies’ and our technology is less well accepted for helping our customers locate additional reserves than our competitors’ technology, our customers may terminate their relationships with us, which could have a material adverse effect on our financial condition and future growth prospects.

Our customers are companies engaged in the petroleum industry and the greater energy industry, and, consequently, our financial performance is dependent upon the economic conditions of those industries.

We have derived most of our revenue to date from providing integrated automation services to Chinese petroleum companies at oilfields within China and other energy industry companies in China. Our customers’ success is intrinsically linked to economic conditions in China and in the petroleum and energy industries in general and the volatility of prices of crude oil, refined oil products and coal chemical products in particular. Each of the petroleum industry and energy industry is subject to intense competitive pressures and is affected by overall economic conditions. 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.

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Our revenue are highly dependent on a very limited number of customers, which subjects our business to high seasonality. 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. From fiscal year 2022, as we developed new product lines, revenue from Sinopec increased and account for 28% of our revenue.

We provide products and services to CNPC under a series of agreements, each of which is terminable without notice. We first began to provide services to CNPC in 2000. CNPC accounted for approximately 50%, 39% and 39% of our revenue in the fiscal years ended June 30, 2022, 2021 and 2020, respectively, and any termination of our business relationships with CNPC would materially harm our operations.

In the fiscal year ended June 30, 2019, we had established a solid relationship with Shenhua Group Corporation Limited (“Shenhua Group”) and revenue from it in the fiscal year 2022 accounted for approximately 10% of our revenue. For fiscal year 2023, revenue from Shenhua accounted for 8% of our revenue as competition became fierce. We expect it to continue to rise in the future. Any termination of our business relationships with CNPC, Sinopec, Shenhua Group or any other major client would materially harm our operations.

Because we derive such a high percentage of our revenue from CNPC and a few new clients, our revenue has been subject to high seasonality. 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. Because these matters depend on reaching agreements with these clients, revenue recognition occurs, to a large extent, on their schedule. Accordingly, revenue recognized in the first quarter is usually the smallest in proportion to that for the whole year, due to our clients’ budgeting and planning schedules. If these clients were to change their budgeting or planning schedule our high and low quarters could also shift. This seasonality limits our ability to make accurate long-term predictions about our performance and makes it difficult to compare our revenue across quarters.

Changes in environmental and regulatory factors may harm our business.

The oil drilling industry in China to date has not been subject to the type and scope of regulation seen in Europe and the United States. However, the Chinese government may implement new legislation or regulations or may enforce existing laws more stringently. Either of these scenarios may have a significant impact on our customers’ mining and extraction operations and may require us or our customers to significantly change operations or to incur substantial costs. We believe that the Domestic Companies’ and our operations in China are in compliance with China’s applicable legal and regulatory requirements. However, there can be no assurance that China’s central or local governments will not impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures.

Petroleum reserve degradation and depletion may reduce our customers’ and our profitability.

Our profitability depends substantially on our ability to help our customers exploit their oil reserves at competitive costs. Replacement reserves may not be available to our customers when required or, if available, may not be drilled at costs comparable to those characteristics of the depleting oilfield. 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.

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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.

Our company is much smaller than our main foreign competitors, including Schlumberger Limited, Honeywell International, Emerson Process Management and Rockwell Automation, and we compete in large part on the basis of the quality of services we are able to provide our clients. As a result, we are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our clients. Many of our personnel possess skills that would be valuable to all companies engaged in the integrated automation services industry. Consequently, we expect that we will have to actively compete for these employees. Some of our competitors may be able to pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel. There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract or assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our technological products and the effectiveness of installation and training could be materially impaired.

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. 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 do not have in place “key person” life insurance policies on any of our employees. The loss of the services of any of our executive officers or other key employees could substantially impair our ability to successfully development new systems and develop new programs and enhancements. In addition, we would need to spend considerable time and other resources to seek suitable replacements, which might detract from our efforts to develop our business.

Our business is capital intensive and our growth strategy may require additional capital, which may not be available on favorable terms or at all.

We may require additional cash resources due to changed business conditions, implementation of our growth strategy or potential investments or acquisitions we may pursue. To meet our capital needs, we may sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities or other securities convertible into such equity securities could result in dilution of your holdings. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

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. As we intend to remain in a growth mode, we intend to reinvest any profits in the foreseeable future to grow the business. We cannot assure you that our operations will continue to result in sufficient revenue to enable us to operate at profitable levels or to generate positive cash flows. 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. If we determine 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.

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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. Our ability to pay dividends is dependent upon dividends and other distributions from the Domestic Companies. Chinese legal restrictions permit payment of dividends to us by the Domestic Companies only out of their respective accumulated net profits, if any, determined in accordance with Chinese accounting standards and regulations. Under Chinese law, the Domestic Companies are required to set aside a portion (at least 10%) of their after-tax net income (after discharging all cumulated loss), if any, each year for compulsory statutory reserve until the amount of the reserve reaches 50% of the Domestic Companies’ registered capital. These funds may be distributed to shareholders at the time of each Domestic Company’s wind-up. Payments of dividends by Domestic Companies to us are also subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents. 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.

We are subject to various PRC laws and regulations pertaining to automation services for the petroleum extraction industry. We have obtained certain certificates, permits, and licenses required for the operation of an automation services provider for the petroleum extraction industry and the manufacturing and distribution of software and hardware products in the PRC.

During the application or renewal process for our licenses and permits, we will be evaluated and re-evaluated by the appropriate governmental authorities and must comply with the prevailing standards and regulations, which may change from time to time. In the event that we are not able to obtain or renew the certificates, permits and licenses, all or part of our operations may be suspended by the government, which would have a material adverse effect on our business and financial condition. 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.

Risks Related to Our Corporate Structure

Our contractual arrangements with the Domestic Companies and their respective shareholders may not be as effective in providing control over these entities as direct ownership.

We are a holding company incorporated in the Cayman Islands. As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our Wholly Foreign Owned Enterprise (“WFOE”) and the VIEs and their subsidiaries in China providing certain technical and consultation services. A WFOE is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon Hengda Technology (Beijing) Co., Ltd (“Recon-BJ”) is a WFOE wholly owned by Recon Investment Ltd. (“Recon-IN”), a Hong Kong limited company, which in turn is wholly owned by us. We consolidated the financial results of BHD and Nanjing Recon into our financial statements based on the VIE agreements entered into on April 1, 2019. Most, if not all, of our revenue derives from operations of the VIEs and their subsidiaries. Our Ordinary Shares offered in this offering are shares of our offshore holding company instead of shares of the VIEs or our PRC subsidiary. These Contractual Arrangements may not be as effective in providing us with control over the VIEs as direct ownership. 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. In addition, these agreements have not been tested in a court of law.

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. However, under the current Contractual Arrangements, we rely on the performance by the VIEs and their shareholders of their obligations under the contracts to exercise control over the VIEs. We cannot assure you that any of the Domestic Companies’ shareholders would always act in our best interests. Such risks exist throughout the period in which we intend to operate our business through the Contractual Arrangements with the VIEs. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. 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.

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We have no equity ownership interest in the Domestic Companies and rely on contractual arrangements to control and operate such businesses. These contractual arrangements may not be as effective in providing control over the Domestic Companies as direct ownership.

We conduct our business through BHD, Nanjing Recon, FGS and their respective subsidiaries by means of Contractual Arrangements. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.

There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including the laws, rules and regulations governing the validity and enforcement of the Contractual Arrangements between the Wholly Foreign Owned Enterprise (“WFOE”). A WFOE is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon Hengda Technology (Beijing) Co., Ltd (“Recon-BJ”) is a WFOE wholly owned by Recon Investment Ltd. (“Recon-IN”), a Hong Kong limited company, which in turn is wholly owned by us. Recon-BJ and Nanjing Recon, BHD and their respective subsidiaries. We have been advised by our PRC counsel, JingTian & GongCheng LLP, based on their understanding of the current PRC laws, rules and regulations, that (i) the structure for operating our business in China (including our corporate structure and Contractual Arrangements with the Recon-BJ, Nanjing Recon, BHD and their respective subsidiaries) will not result in any violation of PRC laws or regulations currently in effect; and (ii) the Contractual Arrangements among the Recon-BJ and Nanjing Recon, BHD and their respective subsidiaries governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations concerning foreign investment in the PRC, and their application to and effect on the legality, binding effect and enforceability of the contractual arrangements. In particular, we cannot rule out the possibility that PRC regulatory authorities, courts or arbitral tribunals may in the future adopt a different or contrary interpretation or take a view that is inconsistent with the opinion of our PRC legal counsel. Therefore, the Contractual Arrangements may be determined by PRC authorities to be inconsistent with the laws and regulations of the PRC, including those related to foreign investment in certain industries. Therefore, the relevant Chinese regulatory authorities could disallow this structure and hinder our ability to exert contractual control over the Domestic Companies, which would likely result in a material change in operations and/or value of the Company’s ordinary shares, including that it could cause the value of such securities to significantly decline or become worthless.

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;

● restricting or prohibiting our use of the proceeds from this offering to finance our business and operations in China, and taking other regulatory or enforcement actions that could be harmful to our business; or

● imposing fines or confiscating the income from our PRC subsidiaries or the VIE.

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.

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Our majority stake in Future Gas Station (Beijing), which now consists of a large operating segment of our business, exposes us to risks related to consumer energy consumption and online payment technologies.

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. 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. 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. As these major oil companies gradually increase their efforts in research and development and deployment of self-built systems, their willingness to cooperate with third-party service and operations support companies such as FGS will decrease or the depth of their cooperation will decrease, resulting in FGS’s growth potential being limited and unable to meet our expectations at the time we acquired FGS. We may suffer a significant loss on our substantial investment in FGS.

Regulations relating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect our business.

In July 2014, SAFE promulgated the Circular on Issues Concerning Foreign Exchange Administration Over the Overseas Investment and Financing and Roundtrip Investment by Domestic Residents Via Special Purpose Vehicles, or Circular 37, which replaced Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment through Offshore Special Purpose Vehicles, or Circular 75. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, referred to in Circular 37 as a “special purpose vehicle” for the purpose of holding domestic or offshore assets or interests. Circular 37 further requires amendment to a PRC resident’s registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease in the capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. Under these regulations, PRC residents’ failure to comply with specified registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant PRC entity, including the payment of dividends and other distributions to its offshore parent, as well as restrictions on capital inflows from the offshore entity to the PRC entity, including restrictions on its ability to contribute additional capital to its PRC subsidiaries. Further, failure to comply with the SAFE registration requirements could result in penalties under PRC law for evasion of foreign exchange regulations.

As Circular 37 is relatively new, it is unclear how these regulations will be interpreted and implemented. In addition, different local SAFE branches may have different views and procedures as to the interpretation and implementation of the SAFE regulations, and it may be difficult for our ultimate shareholders or beneficial owners who are PRC residents to provide sufficient supporting documents required by the SAFE or to complete the required registration with the SAFE in a timely manner, or at all. Any failure by any of our shareholders who is a PRC resident, or is controlled by a PRC resident, to comply with relevant requirements under these regulations could subject us to fines or sanctions imposed by the PRC government, including restrictions on Recon-BJ’s ability to pay dividends or make distributions to us and on our ability to increase our investment in the Recon-BJ.

Under Circular 37, if a non-listed special purpose vehicle uses its own equity or share option to grant equity incentive awards to directors, supervisors, members of senior management or employees directly employed by a domestic enterprise that is directly or indirectly controlled by such special purpose vehicle, or with which such employee has established an employment relationship, any of such directors, supervisors, members of senior management or employees who is a PRC resident should, prior to exercising their rights, file an application with the SAFE for foreign exchange registration with respect to such special purpose vehicle. However, in practice, different local SAFE branches may have different views and procedures as to the interpretation and implementation of the SAFE regulations and, since Circular 37 was the first regulation to regulate the foreign exchange registration of a non-listed special purpose vehicle’s equity incentive granted to PRC residents, there remains uncertainty with respect to its implementation.

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Our contractual arrangements with the Domestic Companies may result in adverse tax consequences to us.

As a result of our corporate structure and contractual arrangements between Recon-BJ and the Domestic Companies, we are effectively subject to several PRC taxes on both revenue generated by Recon-BJ’s operations in China and revenue derived from Recon-BJ’s contractual arrangements with the Domestic Companies. Moreover, we would be subject to adverse tax consequences if the PRC tax authorities were to determine that the contracts between Recon-BJ and the Domestic Companies were not on an arm’s length basis and therefore constitute a favorable transfer pricing. As a result, the PRC tax authorities could request that we adjust our taxable income upward for PRC tax purposes. If the PRC tax authorities took such action, such authorities would be able to establish in its sole discretion the amount of tax payable by Recon-BJ, so we cannot predict the effect of such action on our company other than the likely effect that our profits would decrease. Such a pricing adjustment could adversely affect us by:

● increasing our tax expenses, which could subject Recon-BJ to late payment fees and other penalties for under-payment of taxes; and/or

● resulting in Recon-BJ’s loss of preferential tax treatment.

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

The shareholders of the VIEs may have actual or potential conflicts of interest with us. The shareholders may refuse to sign or breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them and the VIEs, which would have a material and adverse effect on our ability to effectively control the VIEs and receive economic benefits from them. For example, the shareholders may be able to cause our agreements with the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise the shareholder will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between the shareholders and our company. 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.

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. Conflicts of interests between their duties to our company and the respective Domestic Companies may arise. For example, 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. Chen are also directors and executive officers of our company, they have duties of loyalty and care to us under Cayman Islands law when there are any potential conflicts of interests between our company and the Domestic Companies. Each of Mr. Yin and Mr. Chen has executed an irrevocable power of attorney to appoint the individual designated by us to be his attorney-in-fact to vote on his behalf on all matters related to the Domestic Companies requiring shareholder approval. We cannot assure you, however, that if conflicts of interest arise, they will act completely in our interests or that conflicts of interests will be resolved in our favor. In addition, Mr. Yin and Mr. Chen could violate their respective employment agreements with us or their legal duties by diverting business opportunities from us to others. If we cannot resolve any conflicts of interest between us and Mr. Yin and Mr. Chen, as applicable, we would have to rely on legal proceedings, which could result in the disruption of our business.

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Any deterioration of the relationship between Recon-BJ and the Domestic Companies could materially and adversely affect the overall business operation of our company.

Our relationship with the Domestic Companies is governed by their agreements with Recon-BJ, which are intended to provide us, through our indirect ownership of Recon-BJ, with effective control over the business operations of the Domestic Companies. However, these agreements may not be effective in providing control over the applications for and maintenance of the licenses required for our business operations. The Domestic Companies could violate these agreements, go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under these agreements and, as a result, our operations, reputation, business and stock price could be severely harmed.

If Recon-BJ exercises its purchase option of the Domestic Companies’ equity pursuant to the Exclusive Equity Interest Purchase Agreement, payment of the purchase price could materially and adversely affect our financial position.

Under the Exclusive Equity Interest Purchase Agreement, Recon-BJ holds an option to purchase all or a portion of the equity of the Domestic Companies at a price, based on the capital paid in by the Domestic Company shareholders. If applicable PRC laws and regulations require an appraisal of the equity interest or provide other restriction on the purchase price, the purchase price shall be the lowest price permitted under the applicable PRC laws and regulations. As the Domestic Companies are already contractually controlled affiliates to our company, Recon-BJ’s purchase of the Domestic Companies’ equity would not bring immediate benefits to our company and the exercise of the option and payment of the purchase prices could adversely affect our financial position and available working capital.

Our dual class structure may be dilutive to the voting power of Class A Ordinary Shareholders.

On April 5, 2021, at the 2021 annual meeting, to implement a dual class structure, our shareholders approved (i) a special resolution that the authorized share capital of the Company be amended from US$1,850,000, divided into 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to 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, and (ii) a special resolution that the Third Amended and Restated Memorandum and Articles of Association of the Company to substitute the Second Amended and Restated Memorandum and Articles of Association. The dual class structure of our ordinary shares has the effect of concentrating voting control with holders of Class B Ordinary Shares. Our Class B Ordinary Shares have stronger voting power than our Class A Ordinary Shares and certain existing shareholders have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders.

Our classified board structure may prevent a change in our control.

Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2024, 2025 and 2026. 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. 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.

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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.

Our corporate affairs are governed by our Memorandum and Articles of Association, by the Companies Law (2013 Revision) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders, and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority but are not binding on a court in the Cayman Islands. In particular, the Cayman Islands has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate laws. Moreover, our company could be involved in a corporate combination in which dissenting shareholders would have no rights comparable to appraisal rights which would otherwise ordinarily be available to dissenting shareholders of United States corporations. However, Cayman Islands statutory law does provide a mechanism for a dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter’s shares if it is not possible for the dissenter and the Company to agree a fair price within the time limits prescribed. Also, our Cayman Islands counsel is not aware of a significant number of reported derivative actions having been brought in Cayman Islands courts. Class actions are not recognized in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings which are similar. Such actions are ordinarily available in respect of United States corporations in U.S. courts. Finally, Cayman Islands companies may not have standing to initiate shareholder derivative action before the federal courts of the United States. As a result, our public shareholders may face different considerations in protecting their interests in actions against the management, directors or our controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, and our ability to protect our interests may be limited if we are harmed in a manner that would otherwise enable us to sue in a United States federal court.

As we are a Cayman Islands company and most of our assets are outside the United States, it will be extremely difficult to acquire jurisdiction and enforce liabilities against us and our officers, directors and assets based in China.

We are a Cayman Islands exempt company, and our corporate affairs are governed by our Memorandum and Articles of Association and by the Cayman Islands Companies Law (2013 Revision) and other applicable Cayman Islands laws. Certain of our directors and officers reside outside of the United States. In addition, the Company’s assets will be located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon our directors or officers and our subsidiaries, or enforce against any of them court judgments obtained in United States’ courts, including judgments relating to United States federal securities laws. In addition, there is uncertainty as to whether the courts of the Cayman Islands and of other offshore jurisdictions would recognize or enforce judgments of United States’ courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof on the grounds that such provisions are penal in nature, or be competent to hear original actions brought in the Cayman Islands or other offshore jurisdictions predicated upon the securities laws of the United States or any state thereof. Our Cayman Islands’ counsel has advised us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final, for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and was not obtained in a manner which is contrary to the public policy of the Cayman Islands. A Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere. Furthermore, because the majority of our assets are located in China, it would also be extremely difficult to access those assets to satisfy an award entered against us in United States court.

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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.

Recently, the Chinese government announced that it would step up supervision of Chinese firms listed offshore. Under the new measures, China will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading, China will also check sources of funding for securities investment and control leverage ratios. The Cyberspace Administration of China (“CAC”) has also opened a cybersecurity probe into several U.S.-listed tech giants focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the Data Security Law, how companies collect, store, process and transfer data. If we are subject to such a probe or if we are required to comply with stepped-up supervisory requirements, valuable time from our management and money may be expended in complying and/or responding to the probe and requirements, thus diverting valuable resources and attention away from our operations. This may, in turn, negatively impact our operations.

Because of the VIEs and their subsidiaries in China and given the Chinese government’s significant oversight and discretion over the conduct of our business operations there, the Chinese government may seek to affect our operations, including our ability to offer securities to investors, list our securities on a U.S. or other foreign exchange, conduct our business or accept foreign investment. The Chinese government may intervene or influence the Company’s current and future operations in China at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.

If any or all of the foregoing were to occur, this could lead to a material change in the Company’s operations and/or the value of our ordinary shares and/or significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Our shares may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. The delisting of our shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.

The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above.

Our predecessor auditors, Marcum Asia CPAs LLP (“Marcum Asia”) and Friedman LLP (“Friedman”), both of which are independent registered public accounting firms and which Friedman issued the audit report included elsewhere in this report, as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, are subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Marcum Asia did not issue an audit report.

On February 7, 2023, the Company’s Board of Directors determined and ratified the Audit Committee’s approval of the proposed appointment of Marcum Asia as the Company’s independent registered public accounting firm. The services previously provided by Friedman are now provided by Marcum Asia.

The Company was notified by Friedman, the Company’s then independent registered public accounting firm, that effective September 1, 2022, Friedman combined with Marcum LLP and continued to operate as an independent registered public accounting firm. Friedman continued to serve as the Company’s independent registered public accounting firm through February 1, 2023. On February 1, 2023, the Audit Committee approved the engagement of Marcum Asia to serve as the independent registered public accounting firm of the Company.

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On August 22, 2023, we appointed Enrome LLP as its independent registered public accounting firm. Enrome LLP replaced Marcum Asia which we dismissed on August 22, 2023. The appointment of Enrome LLP was made after careful consideration and evaluation process and was been approved by our audit committee of our board of directors. Our decision to make this change was not the result of any disagreement between the Company and Marcum Asia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. The Company’s decision to terminate Marcum Asia was based on cost control concerns.

Marcum Asia and formerly Friedman are headquartered in New York, New York and have been subject to inspection by the PCAOB on a regular basis. Our current auditor, Enrome LLP, an independent registered public accounting firm, has been retained to audit the financial statements for the fiscal year ended June 30, 2023. Enrome LLP is subject to PCAOB inspections and the PCAOB is able to inspect our auditor. We cannot assure you whether NASDAQ or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. 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. 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.

The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations were more stringent than the HFCA Act. For example, if a company’s auditor was not subject to PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on January 1, 2022. The SEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCA Act and to address the recommendations in the PWG report.

On June 22, 2021, the U.S. Senate passed a bill titled as the Accelerating Holding Foreign Companies Accountable Act, or AHFCA Act which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two.

Further, the PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act. Such final rule, however, remains subject to the SEC’s approval and it remains when the SEC will complete its rulemaking and when such rules will become effective and what, if any, of the PWG recommendations and or PCAOB’s rule will be adopted.

On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act.

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions.

The PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act, subject to SEC approval. The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022.

On August 26, 2022, the SEC announced that the PCAOB signed a Statement of Protocol with the CRSC and the Ministry of Finance of the PRC, which sets out specific arrangements on conducting inspections and investigations by both sides over relevant audit firms within the jurisdiction of both sides, including the audit firms based in mainland China and Hong Kong. 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.

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The implications of this possible regulation in addition to the requirements of the HFCA Act and possibly, the AHFCA Act, if enacted, are uncertain. If the PCAOB, SEC, and CRSC are unable to agree on a framework under the Statement of Protocol, the lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our Ordinary Shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. Such uncertainty could cause the market price of our shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on the national securities exchange earlier than would be required by the HFCA Act or the AHFCA Act. If our shares are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our shares.

The Chinese government exerts oversight and control over overseas offerings and listing conducted by China-based issuers under the Listing Records Rules and/or the Confidentiality Provisions, which could significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares to investors and could cause the value of our Class A Ordinary Shares to significantly decline or become worthless.

On February 17, 2023, with the approval of the State Council, the China Securities Regulatory Commission (“CSRC”) issued the Listing Records Rules, including the Trial Measures, for the administration of overseas listing filing system, which became effective on March 31, 2023. Under the Listing Records Rules, a company established in mainland China seeking securities offering and listing, by both direct or indirect means, in an overseas market are required to undertake filing procedures with the CSRC for its overseas offering and listing activities. Further, the Trial Measures set forth a list of circumstance under which overseas offering and listing by PRC domestic companies is prohibit, including: (i) where such securities offering and listing is explicitly prohibited by the PRC laws; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent PRC authorities under the State Council in accordance with PRC laws; (iii) where the company established in mainland China, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three (3) years; (iv) where the company established in mainland China seeking securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; and (v) where there are material ownership disputes over equity held by the controlling shareholder of company established in mainland China or by other shareholders that are controlled by the controlling shareholder and/or actual controller. In accordance with the Trial Measures, the listing and trading of our Class A Ordinary Shares on Nasdaq is deemed as an indirect overseas offering and listing by companies established in China, and thus, we are subject to the Listing Records Rules and the relevant filing procedures as required. Further, we believe, as of the date of this annual report, none of the circumstances prohibiting the overseas offering and listing by companies established in China as listed above applies to us, and we can offer and continue to offer our Class A Ordinary Shares on Nasdaq.

In accordance with the Notice on the Arrangement for the Filing of Overseas Offering and Listing by Domestic Companies issued by the CSRC along with the Listing Records Rules on the same day, we are deemed as an “Existing Issuer” because we have been listed overseas before March 31, 2023. Under such Notice, we are not required to undertake the initial filing procedure immediately. However, we shall carry out filing procedures as required by the Trial Measures in a timely manner for the subsequent events, including any further follow-up offerings on Nasdaq, dual and/or secondary offering and listing on different overseas markets, and occurrence of material events including change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. If we or the Domestic Companies in future fail to undertake filing procedures as stipulated in the Trial Measures, or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and/or the Domestic Companies, and impose a fine of between RMB 1,000,000 yuan and RMB 10,000,000 yuan. The CSRC may also inform its regulatory counterparts in the overseas jurisdictions, such as the SEC, via cross-border securities regulatory cooperation mechanisms.

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Further, on February 24, 2023, the CSRC, together with Ministry of Finance, National Administration of State Secrets Protection, and National Archives Administration of China, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality Provisions”), which will come into effect on March 31, 2023 with the Trial Measures. Under the Confidentiality Provisions, companies established in China seeking overseas offering and listing, by both direct and indirect means, are required to institute a sound confidentiality and archives system. If such companies established in China intend to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, they shall obtain approval from competent authorities and complete the relevant filing procedure with the competent secrecy administrative department prior to their disclosure or provision of such documents and materials. Further, if they provide or publicly disclose documents and materials which may adversely affect national security or public interests, they shall strictly follow the corresponding procedures in accordance with relevant laws and regulations. Once effective, any failure or perceived failure by us or our subsidiaries to comply with the above confidentiality and archives administration requirements under the Confidentiality Provisions and other relevant PRC laws and regulations may cause relevant entities to be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Any failure of us or the Domestic Companies to fully comply with the Listing Records Rules, once effective, may significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares on Nasdaq, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.

The holding company may be subject to approval or other requirement from PRC authorities in connection with this offering, and, if required, we cannot assure you that we will be able to obtain such approval or satisfy such requirement. If we failed to obtain such approval or satisfy such requirement, we may not be able to continue listing on U.S. exchange, continue to offer securities to investors, or materially affect the interest of the investors and the value of our Class A Ordinary Shares may decrease or become worthless.

As of the date of this prospectus, we or the Domestic Companies have not received any requirement to obtain permission or approval from CSRC or Cyberspace Administration of China. However, recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future.

Given the current regulatory environment in the PRC, we are still subject to the uncertainty of interpretation and enforcement of the rules and regulations in the PRC, which can change quickly with little advance notice, and any future actions of the PRC authorities. It is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges (including retroactively), and even if such permission is obtained, whether it will be denied or rescinded. As a result, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our future business and operations.

The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies.

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The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our future business and operating results, lead to reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. 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.

We conduct substantially all of our operations and generate most of our revenue in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. 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.

While the PRC economy has grown significantly since the late 1970s, the growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall PRC economy, but may also have a negative effect on our business. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.

The PRC economy has been transitioning from a planned economy to a more market-oriented economy. The PRC government continues to exercise significant control over economic growth in China through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and imposing policies that impact particular industries or companies in different ways.

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We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

In connection with any future offering, we may be subjected to the U.S. Foreign Corrupt Practices Act (“FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We may also be subjected to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. Going forward, we may have operations, agreements with third parties, and make sales in China, which may experience corruption. Our future activities in China may create the risk of unauthorized payments or offers of payments by one of the employees of our Company, because sometimes these employees are out of our control. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

The PRC government may issue further restrictive measures in the future.

We cannot assure you that the PRC’s government will not issue further restrictive measures in the future. The PRC government’s restrictive regulations and measures could increase our existing and future operating costs in adapting to these regulations and measures, limit our access to capital resources or even restrict our existing and future business operations, which could further adversely affect our business and prospects.

We may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations.

We may be subject relating various risks and costs associated with to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. This data is wide ranging and relates to our investors, employees, contractors and other counterparties and third parties. The relevant PRC laws apply not only to third-party transactions, but also to transfers of information between us, the Domestic Companies, our subsidiaries and other parties with which we have commercial relations.

The PRC regulatory and enforcement regime with regard to privacy and data security is evolving. The PRC Cybersecurity Law which was promulgated on November 7, 2016 and became effective on June 1, 2017 provides that personal information and important data collected and generated by operators of critical information infrastructure in the course of their operations in the PRC should be stored in the PRC, and the law imposes heightened regulation and additional security obligations on operators of critical information infrastructure. 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.

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. The Data Security Law provides for data security and privacy obligations of entities and individuals carrying out data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority with any data stored in China without approval from the competent PRC authority, and sets forth the legal liabilities of entities and individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10 million, suspension of relevant business, and revocation of business permits or licenses.

On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Security Law, which shall come into force as of November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information.

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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. The PRC National Security Law covers various types of national security, including technology security and information security.

On December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and several other administrations jointly issued the revised Measures for Cybersecurity Review, or the Revised Review Measures. According to the Revised Review Measures, if an “online platform operator” that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Given the recency of the issuance of the Revised Review Measures, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.

We do not collect, process or use personal information of entities or individuals other than what is necessary for our business and do not disseminate such information. We do not operate mobile apps and we do not possess information on more than a million entities/individuals. 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.

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. There are also uncertainties with respect to how the PRC Cybersecurity Law, the PRC National Security Law and the Data Security Law will be implemented and interpreted in practice. PRC regulators, including the Ministry of Public Security, the MIIT, the SAMR and the Cyberspace Administration of China, have been increasingly focused on regulation in the areas of data security and data protection, including for mobile apps, and are enhancing the protection of privacy and data security by rule-making and enforcement actions at central and local levels. We expect that these areas will receive greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection. 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.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiary in the PRC, Recon-BJ, which is a wholly foreign owned enterprise in China. Recon-BJ is generally subject to laws and regulations applicable to foreign invested enterprises in China and intellectual property protections. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, a series of new PRC laws and regulations have significantly enhanced the protections afforded to intellectual property rights and various forms of foreign investments in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

We do not have business interruption, litigation or natural disaster insurance.

The insurance industry in China is still at an early stage of development. In particular PRC insurance companies offer limited business products. 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.

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We may be subject to foreign exchange controls in the PRC.

Our PRC subsidiary and affiliates are subject to PRC rules and regulations on currency conversion. In the PRC, the State Administration for Foreign Exchange (“SAFE”) regulates the conversion of the RMB into foreign currencies. Currently, foreign investment enterprises (“FIEs”) are required to apply to SAFE for “Foreign Exchange Registration Certificate for FIEs.” Recon-BJ is an FIE. With such registration certifications (which need to be renewed annually), FIEs are allowed to open foreign currency accounts including the “recurrent account” and the “capital account.” Currently, conversion within the scope of the “recurrent account” can be affected without requiring the approval of SAFE. However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE. Accordingly, compliance with SAFE requirements may limit how we are able to use our funds, in ways that we would not be limited if we operated in countries other than China.

Fluctuations in exchange rates could adversely affect the value of our securities.

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. For example, if we decide to convert our RMB into U.S. dollars for the purpose of paying dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. 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.

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.

On October 21, 2005, SAFE issued a public notice, the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, or the SAFE notice, which requires PRC residents, including both legal persons and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China, referred to as an “offshore special purpose company,” for the purpose of overseas equity financing involving onshore assets or equity interests held by them. In addition, any PRC resident that is the shareholder of an offshore special purpose company is required to amend its SAFE registration with the local SAFE branch with respect to that offshore special purpose company in connection with any increase or decrease of capital, transfer of shares, merger, division, equity investment or creation of any security interest over any assets located in China. Moreover, if the offshore special purpose company was established and owned the onshore assets or equity interests before November 1, 2005, a retroactive SAFE registration is required to have been completed before March 31, 2006. If any PRC shareholder of any offshore special purpose company fails to make the required SAFE registration and amendment, the PRC subsidiaries of that offshore special purpose company (Recon-IN and Recon-BJ for our company) may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore special purpose company. Moreover, failure to comply with the SAFE registration and amendment requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

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Due to lack of official interpretation, some of the terms and provisions in the SAFE notice remain unclear and implementation by central SAFE and local SAFE branches of the SAFE notice has been inconsistent since its adoption. Because of uncertainty over how the SAFE notice will be interpreted and implemented, we cannot predict how it will affect our business operations or future strategies. For example, Recon-IN’s, Recon-BJ’s and any prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with the SAFE notice by our company’s PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by the SAFE notice. We also have little control over either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with the SAFE notice, if SAFE requires it, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

China passed the Enterprise Income Tax Law, or the EIT Law, and it is implementing rules, both of which became effective on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation of China, or the SAT, issued the Circular Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the SAT Notice 82, further interpreting the application of the EIT Law and its implementation to offshore entities controlled by a Chinese enterprise or enterprise group. Pursuant to the SAT Notice 82, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or enterprise group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate stamps, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. After SAT Notice 82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect on September 1, 2011, to provide more guidance on the implementation of SAT Notice 82 and clarify the reporting and filing obligations of such “non-domestically incorporated resident enterprise.” SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. On January 29, 2014, the SAT issued Announcement of the State Administration of Taxation on Recognizing Resident Enterprises Based on the Criteria of de facto Management Bodies, to further clarify the reporting and filing procedure for offshore entities controlled by a Chinese enterprise or enterprise group and recognized as a resident enterprise.

The determining criteria set forth in SAT Notice 82 and SAT Bulletin 45 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups or by PRC or foreign individuals. If the PRC tax authorities determine that Recon or its subsidiaries is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Currently, we do not have any non-China source income, as we complete our sales, including export sales, in China. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would be deemed as “qualified investment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant to the clause 26 of the EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which the dividends we pay with respect to our ordinary shares, or the gain our non-PRC stockholders may realize from the transfer of our ordinary shares, may be treated as PRC-sourced income and may therefore be subject to a 10% PRC withholding tax. If we are required under the EIT Law and its implementing regulations to withhold PRC income tax on dividends payable to our non-PRC stockholders, or if non-PRC stockholders are required to pay PRC income tax on gains on the transfer of their shares of ordinary shares, our business could be negatively impacted and the value of your investment may be materially reduced. Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes.

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PRC regulations and potential registration requirements relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.

On August 8, 2006, six PRC regulatory agencies, including the PRC Ministry of Commerce (“MOC”), the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and was amended on June 22, 2009. The M&A Rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises. These new rules signify greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOC as a key regulator for issues related to mergers and acquisitions in China and requiring MOC approval of a broad range of merger, acquisition and investment transactions. 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.

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. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings. However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

If the PRC regulatory authorities take the view that the VIE Agreements constitute a reverse merger acquisition or round-trip investment in related party transactions without the approval of the national offices of MOC, they could invalidate the VIE Agreements. Additionally, the PRC regulatory authorities may take the view that any public offering plan will require the prior approval of CSRC. If we cannot obtain MOC or CSRC approval in case we are required to do so, our business and financial performance will be materially adversely affected. We may also face regulatory actions or other sanctions from the MOC or other PRC regulatory agencies. 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 this or 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.

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. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our Class A Ordinary Shares.

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. Moreover, the CAC issued the Measures of Cybersecurity Review (Revised Draft for Comments) on July 10, 2021, which requires certain operators who wish to list abroad to file a cybersecurity review with the Office of Cybersecurity Review, such as operators with personal information of more than one million users. The Cybersecurity Administration of China issued the revised Measures for Cybersecurity Review (“Revised Review Measures”) on December 28, 2021. The New Measures amends the Measures for Cybersecurity Review (Draft Revision for Comments) released on July 10, 2021. The New Measures came into effect on February 15, 2022. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. We have not obtained the approval from either the CSRC or the Office of Cybersecurity Review for this offering, and as advised by our PRC counsel, we do not believe that such approval is necessary under these circumstances or for the time being. 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. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.

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PRC registration requirements for stock option plans of overseas publicly-listed companies may restrict our ability to adopt equity compensation plans for our directors and employees or otherwise limit our PRC subsidiaries’ ability to distribute profits to us.

In February 2012, SAFE promulgated the Notice on the Administration of Foreign Exchange Matters for Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies, or the Stock Option Notice, which replaced the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plans or Stock Option Plans of Overseas Publicly-Listed Companies issued by SAFE on March 28, 2007. Under the Stock Option Notice and other relevant rules and regulations, PRC residents who participate in stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are PRC residents must collectively retain a qualified PRC agent, which could be a PRC subsidiary of such overseas publicly listed company or another qualified institution selected by such PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants. Such participants must also collectively retain an overseas entrusted institution to handle matters in connection with their exercise of stock options, the purchase and sale of corresponding stocks or interests and fund transfers. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material changes. We and our PRC employees who have been granted stock options are subject to these regulations. Failure of our PRC stock option holders to complete their SAFE registrations may subject these PRC residents to fines and legal sanctions and may also limit our ability to compensate our employees and directors through equity compensation, limited our PRC subsidiaries’ ability to distribute dividends to us, or otherwise materially adversely affect our business.

The Chinese government could change its policies toward private enterprise or even nationalize or expropriate private enterprises, which could result in the total loss of our investment in that country.

Our business is subject to significant political and economic uncertainties and may be adversely affected by political, economic and social developments in China. Over the past several years, the Chinese government has pursued economic reform policies including the encouragement of private economic activity and greater economic decentralization. The Chinese government may not continue to pursue these policies or may significantly alter them to our detriment from time to time with little, if any, prior notice.

Changes in policies, laws and regulations or in their interpretation or the imposition of confiscatory taxation, restrictions on currency conversion, restrictions or prohibitions on dividend payments to shareholders, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business. 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.

The PRC has historically lagged in western style management, governance and financial reporting concepts and practices, as well as in modern banking, and other control systems. Our current management has little experience with western style management, governance and financial reporting concepts and practices, and we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, and especially given that we are a publicly listed company in the U.S. and subject to regulation as such, we may experience difficulty in establishing management, governance, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet western standards. We may have difficulty establishing adequate management, governance, legal and financial controls in the PRC. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002 and other applicable laws, rules and regulations. This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. 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.

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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. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our future offerings, business operations share price and reputation.

U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. The PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act. The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022.

On May 21, 2021, NASDAQ filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in a “Restrictive Market”, (ii) prohibit Restrictive Market companies from directly listing on NASDAQ Capital Market, and only permit them to list on NASDAQ Global Select or NASDAQ Global Market in connection with a direct listing and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On August 26, 2022, the SEC announced that the PCAOB signed a Statement of Protocol with the CRSC and the Ministry of Finance of the PRC, which sets out specific arrangements on conducting inspections and investigations by both sides over relevant audit firms within the jurisdiction of both sides, including the audit firms based in mainland China and Hong Kong. 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.

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. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our future offerings, business and our share price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our shares.

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Risks Related to Our Ordinary Shares

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

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

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

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

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

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the NASDAQ Capital Market. Press releases relating to financial results and material events are also furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer. As a Cayman Islands company listed on the NASDAQ Capital Market, we are subject to the NASDAQ Capital Market corporate governance listing standards. However, NASDAQ Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the NASDAQ Capital Market corporate governance listing standards. 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.

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. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by existing investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional Class A Ordinary Shares, or securities convertible or exchangeable into Class A Ordinary Shares, in future transactions may be higher or lower than the price per share paid by existing investors.

We do not intend to pay dividends in the foreseeable future.

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.

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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.

Future sales of a substantial 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 and impair our ability to raise capital through the sale of additional equity securities. If any existing shareholder or shareholders sell a substantial amount of our Class A Ordinary Shares, the prevailing market price for our Class A Ordinary Shares could be adversely affected. In addition, if we pay for our future acquisitions in whole or in part with additionally issued Class A Ordinary Shares, your ownership interests in our company would be diluted and this, in turn, could have a material and adverse effect on the price of our Class A Ordinary Shares.

If we fail to satisfy applicable listing standards, our ordinary shares may be delisted from the NASDAQ Capital Market.

On April 27, 2023, we received a letter from the Listings Qualifications Department of The Nasdaq Capital Market (“Nasdaq”) notifying us that the minimum closing bid price per share for our Ordinary Shares was below $1.00 for a period of 30 consecutive business days and that the Registrant did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). This current report is filed pursuant to Nasdaq Listing Rule 5810(b). The Nasdaq notification letter does not result in the immediate delisting of our Ordinary Shares, and the shares have continued to trade uninterrupted under the symbol “RCON.”

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of one hundred eighty (180) calendar days, or until October 24, 2023 (the “Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement. If at any time during the Compliance Period, the closing bid price per share of the our Ordinary Shares is at least $1.00 for a minimum of ten (10) consecutive business days, Nasdaq will provide us with a written confirmation of compliance and the matter will be closed.

In the event the Registrant does not regain compliance by October 24, 2023, the Registrant may be eligible for an additional 180 calendar day grace period. To qualify, the Registrant will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If the Registrant chooses to implement a reverse stock split, it must complete the split no later than ten (10) business days prior to the expiration of the second compliance period.

We intend to regain compliance with Nasdaq’s minimum bid price requirement during the Compliance Period. There can be no assurances, however, that we will be successful in satisfying the Minimum-Bid Price Requirement or the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq. It is possible that we will fail to comply with the continued listing requirement of Nasdaq Marketplace Rule 5550(a)(2) again or any other listing requirements. If so, and Nasdaq may delist our shares if we cannot regain compliance timely.

Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities. If our common stock is delisted by the NASDAQ the price of our ordinary shares decline.

The market price for our securities may be volatile, which could result in substantial losses to investors.

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;

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● 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.

We expect that any other securities of our Company are likely to be similarly volatile. 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. We cannot guarantee that shareholders will not lose some of their entire investment in our securities.

NASDAQ may apply additional and more stringent criteria for our continued listing.

NASDAQ Listing Rule 5101 provides NASDAQ with broad discretionary authority over the continued listing of securities in NASDAQ and NASDAQ may use such discretion to deny apply additional or more stringent criteria for the continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on NASDAQ inadvisable or unwarranted in the opinion of NASDAQ, even though the securities meet all enumerated criteria for continued listing on NASDAQ. In addition, NASDAQ has used its discretion to deny continued listing or to apply additional and more stringent criteria in the instances, including but not limited to where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit. For the aforementioned concerns, we may be subject to the additional and more stringent criteria of NASDAQ for our continued listing.

ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

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	53	Chief Executive Officer and Director
Ms. Liu Jia	40	Chief Financial Officer and Director
Mr. Chen Guangqiang	60	Chief Technology Officer, Chairman and Director
Mr. Zhao Shudong	77	Independent Director
Mr. Nelson N.S. Wong	61	Independent Director (Audit Committee Chair)
Mr. Hu Jijun	58	Independent Director
Dr. Duan Yonggang	59	Independent Director

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Yin Shenping. Mr. Yin has been our Chief Executive Officer and a director since the Company’s inception. In 2003, Mr. Yin founded Nanjing Recon, a Chinese company that provides services to automate and enhance the extraction of petroleum in China, and has been the Chief Executive Officer since that time. Prior to founding Nanjing Recon, Mr. Yin served as a sales manager for Fujian Haitian Network Company from 1992 through 1994. Mr. Yin has founded and operated a number of companies engaged in the IT industry including: Xiamen Hengda Haitian Computer Network Co., Ltd. (1994), Baotou Hengda Haitian Computer Network Co., Ltd. (1997), Beijing Jingke Haitian Electronic Technology Development Co., Ltd. (1999), and Jingsu Huasheng Information Technology Co., Ltd. (2000). In 2000, Mr. Yin merged the former Nanjing Kingsley Software Engineering Co., Ltd. into Nanjing Recon. Mr. Yin received his bachelor’s degree in 1991 from Nanjing Agricultural University in information systems. Mr. Yin was chosen as a director of the Company because as one of the founders of the Company, we believe his knowledge of the Company and years of experience in our industry give him the ability to guide the Company as a director.

Liu Jia. Ms. 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. 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. 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 appointed to the position of director because he is one of the founders of the Company and we believe we can benefit from his many years of engineering experience and management experience in the oil extraction industry.

Nelson N.S. Wong. Mr. Wong joined our board of directors in 2008. Prior to joining our Board, in 1990 Mr. Wong joined the Vigers Group, a real estate company that provides services in valuation, corporate property services, investment advisory services, general practice surveying, building surveying, commercial, in both retail and industrial agency, and property and facilities management. Mr. Wong became the Vice Chairman and CEO of the Vigers Group in 1993. In 1995 Mr. Wong established the ACN Group, a business consulting firm, where he has worked continuously and continues to serve as the Chairman and Managing Partner. Mr. Wong received a bachelor’s degree in arts from the PLA Institute of International Relations in Nanjing in 1983. Mr. 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. Hu served in a variety of positions at No. 2 test-drill plant, including technician of installation, assets equipment work, electrical installation, control room production dispatcher, Deputy Chief Engineer of the Technology Battalion, and Deputy Director of Production. From 2003 to 2005 he served as Head of the Integrated Battalion and he is currently the Head of the Transport Battalion, Senior Electric Engineer. Mr. Hu graduated as an automated professional from the China University of Petroleum in 1988. 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.

Zhao Shudong. Mr. Zhao joined our board of directors in 2013. Mr. 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. 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. 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.

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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. 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. 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 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.

Employment Agreements

We have employment agreements with each of our Chief Executive Officer, Chief Technology Officer and Chief Financial Officer. With the exception of the employment agreement with our Chief Financial Officer, each of these employment agreements provides for an indefinite term. Such employment agreements may be terminated (1) if the employee gives written notice of his or her intention to resign, (2) the employee is absent from three consecutive meetings of the board of directors, without special leave of absence from the other members of the board of directors, and the board of directors passes a resolution that such employee has vacated his office, or (3) the death, bankruptcy or mental incapacity of the employee. The employment agreement for our Chief Financial Officer provides for a one-year term, which expired on March 12, 2017, and the parties have continued to operate under the terms of this agreement since its expiration. Such employment agreement may be terminated if Ms. Liu gives thirty days’ written notice of her intention to resign, or if the board of directors determines she can no longer perform her duties as Chief Financial Officer and provides her with thirty days’ written notice of termination.

Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement in the absence of cause, then we are obligated to pay the employee one month’s salary for each year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us.

B. 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, 2023, 2022 and 2021. No other employee or officer received more than $100,000 in total compensation in 2023, 2022 and 2021.

Summary Executive Compensation Table

						Option		Restricted Stock
Name and principal position	Year	Salary		Bonus		Awards		Awards			Total
Yin Shenping,
Principal Executive Officer	2023	$	620,000	$	150,000	$	—	$	1,515,000		$	2,285,000
	2022	$	360,000	$	100,000	$	—	$	2,934,500		$	3,394,500
	2021	$	120,000	$	50,000	$	—	$	0		$	170,000
Liu Jia
Principal Financial Officer	2023	$	162,000	$	60,000	$	—	$	372,600		$	594,600
	2022	$	112,000	$	50,000	$	—	$	156,000		$	318,000
	2021	$	80,000	$	31,250	$	—	$	0	(1)​	$	111,250
Chen Guangqiang,
Chief Technology Officer	2023	$	620,000	$	150,000	$	—	$	1,515,000		$	2,285,000
	2022	$	395,833	$	100,000	$	—	$	2,934,000		$	3,430,333
	2021	$	157,164	$	50,000	$	—	$	0		$	207,164

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Director Compensation

All directors hold office until the expiration of their respective terms and until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the board of directors. Employee directors and non-voting observers do not receive any compensation for their services. We pay $8,000 to each independent director annually for their service as directors. In addition, non-employee directors are entitled to receive compensation for their actual travel expenses for each board of directors meeting attended.

Summary Director Compensation Table

	Fees earned
	or		Option		Restricted Stock
Name(1)	paid in cash		Awards		Awards	Total
Nelson N.S. Wong	$	8,000	$	0	0	$	8,000
Hu Jijun	$	8,000	$	0	0	$	8,000
Zhao Shudong	$	8,000	$	0	0	$	8,000
Duan Yonggang	$	8,000	$	0	0	$	8,000

(1) 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, 2023, 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	—	—	—	—
Liu Jia	356	148.50	1/31/2015	1/31/2025
	5,556	—	02/28/2022	02/27/2025
	55,556	—	03/15/2023	19/15/2023
Chen Guangqiang	—	—	—	—
Nelson N.S. Wong	278	148.50	1/31/2015	1/31/2025
	3,333	—	02/28/2022	02/27/2025
Hu Jijun	278	148.50	1/31/2015	1/31/2025
	3,333	—	02/28/2022	02/27/2025
Zhao Shudong	200	148.50	1/31/2015	1/31/2025
	3,333	—	02/28/2022	02/27/2025
Duan Yonggang	3,333	—	02/28/2022	02/27/2025
Total	75,556

C. 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. Class I directors faced re-election at our annual general meeting of shareholders in 2020 and every three years thereafter. Class II directors faced re-election at our annual general meeting of shareholders in 2021 and every three years thereafter. Class III directors faced re-election at our annual general meeting of shareholders in 2022 and every three years thereafter.

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If the number of directors changes, any increase or decrease will be apportioned among the classes so as to maintain the number of directors in each class as nearly as possible. Any additional directors of a class elected to fill a vacancy resulting from an increase in such class will hold office for a term that coincides with the remaining term of that class. Decreases in the number of directors will not shorten the term of any incumbent director. These board provisions could make it more difficult for third parties to gain control of the Company by making it difficult to replace members of our board of directors.

A director may vote in respect of any contract or transaction in which he is interested, provided, however, that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to the board of directors consideration and any vote on that matter. A general notice or disclosure to the directors, or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof that a director is a shareholder of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

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. Zhao, Mr. 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. The board of directors makes all relevant Company decisions. As such, it is important for us to have our Chief Executive Officer serve on the Board as he plays a key role in the risk oversight of the Company. As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

Currently, three committees have been established under the board: the audit committee, the compensation committee and the nominating committee. All of these committees consist solely of independent directors.

The audit committee is responsible for overseeing the accounting and financial reporting processes of the Company and audits of the financial statements of the Company, including the appointment, compensation and oversight of the work of our independent auditors. Mr. Wong qualifies as the audit committee financial expert and serves as the chair of the audit 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 serves as the chair of the compensation committee.

The nominating committee of the board of directors is responsible for the assessment of the performance of the board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues. The nominating committee considers diversity of opinion and experience when nominating directors. Mr. 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.

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Duties of Directors

Under Cayman Islands law, our directors have a fiduciary duty to the Company to act in good faith in their dealings with or on behalf of the Company and exercise their powers and fulfill the duties of their office honestly. 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. In addition to the remedies available under general law, the Companies Law imposes fines on directors who fail to satisfy some of these requirements. However, in many circumstances, an individual is only liable if he is knowingly guilty of the default or knowingly and willfully authorizes or permits the default. In comparison, under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders. In addition, under Delaware law, a party challenging the propriety of a decision of the directors bears the burden of rebutting the applicability of the presumptions afforded to directors by the “business judgment rule.” If the presumption is not rebutted, the business judgment rule protects the directors and their decisions, and their business judgments will not be second guessed. If the presumption is rebutted, the directors bear the burden of demonstrating the entire fairness of the relevant transaction. Notwithstanding the foregoing, Delaware courts subject directors’ conduct to enhanced scrutiny in respect of defensive actions taken in response to a threat to corporate control and approval of a transaction resulting in a sale of control of the corporation.

Limitation of Director and Officer Liability

Pursuant to our Memorandum and Articles of Association, every director or officer and the personal representatives of the same shall be indemnified and held harmless out of our assets and funds against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by him or her in or about the conduct of our business or affairs or in the execution or discharge of his or her duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in defending (whether successfully or otherwise) any civil proceedings concerning us or our affairs in any court whether in the Cayman Islands or elsewhere. No such director or officer will be liable for: (a) the acts, receipts, neglects, defaults or omissions of any other such Director or officer or agent; or (b) any loss on account of defect of title to any of our properties; or (c) account of the insufficiency of any security in or upon which any of our money shall be invested; or (d) any loss incurred through any bank, broker or other similar person; or (e) any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgment or oversight on his or her part; or (f) any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers authorities, or discretions of his or her office or in relation thereto, unless the same shall happen through his or her own dishonesty, gross negligence or willful default.

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.

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D. Employees

As of June 30, 2023, we employed a total of 188 full-time in the following functions:

	Number of Employees
	June 30,	June 30,	June 30,
Department	2023	2022	2021
Senior Management	20	27	21
Human Resource & Administration	26	25	17
Finance	11	13	14
Research & Development & Technology	64	53	48
Procurement and production	27	26	45
Sales & Marketing	40	44	39
Total	188	188	184

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. 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. 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 2021, we contributed approximately $215,642 to the employee benefit plans and social insurance. The effect on our liquidity by the payments for these contributions is immaterial. We believe that we are in material compliance with the relevant PRC employment laws.

E. Share Ownership

For information regarding the share ownership of our directors and senior management, see “Item 7. Major Shareholders and Related Party Transactions — A. 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. 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. 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. 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. 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. During the year ended June 30, 2023, we have 0 options outstanding under the 2009 Incentive Plan.

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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”). 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. 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. The Company granted options to purchase 80,000 (4,444 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, 2023, we have an aggregate of 80,000 (4,444 options post 2024 Reverse Split) options outstanding under the 2015 Incentive Plan.

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, 2023, we have 0 options outstanding under the 2021 Incentive Plan.

Executive Class A Ordinary Stock Grants

On August 27, 2018, the Company’s board approved a grant of 391,200 (21,733 shares post 2024 Reverse Split) restricted stock to certain employees and directors under the Company’s 2015 Incentive Plan according to a vesting schedule as a reward and compensation to encourage as an incentive for their future dedication to the Company. Fair value of these restricted stocks is $2,523,240 based on the closing price of the resolution of the board on August 27, 2018, with a vesting period of three years from the date of the grant. As of June 30, 2023, we have 0 non-vested restricted stocks outstanding under such grant.

On February 28, 2022, the Company’s board granted 1,642,331 (91,241 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 $1,708,024, with a vesting period of three years from the date of the grant.

As of June 30, 2023, we have 1,094,887 (60,827 shares post 2024 Reverse Split) non-vested restricted stocks outstanding under such grant.

Executive Class B Ordinary Stock Grants

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”) to grant Class B Ordinary Shares.

On December 5, 2021, the Company’s board approved a grant of 2,500,000 Class B Ordinary Shares pursuant to its 2021 Equity Incentive Plan to management of the Company, at a fair value of $4,175,000 based on the fair value of the share price $1.67 at

December 5, 2021. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on December 5, 2021.

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. The fair value of the restricted shares was $1,694,000 based on the fair value of share price $1.06 at February 28, 2022. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on February 28, 2022.

On March 9, 2023, the Company’s board approved a grant of 3,000,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $3,025,000 based on the fair value of share price $1.01 at March 9, 2023. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on March 9, 2023.

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth information with respect to beneficial ownership of our Class A and Class B Ordinary Shares as of the date of this report, for each person known by us to beneficially own 5% or more of our Class A Ordinary Shares, and all of our executive officers and directors individually and as a group. It reflects the one-for-eighteen Reverse Stock Split we effected on May 1, 2024 and the two classes of shares approved by our shareholders on April 5, 2021: Class A Ordinary Shares, with one vote per share, and Class B Ordinary Shares, with fifteen votes per share. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A and Class B Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership is based on shares, which consists of 41,703,218 (2,371,573 shares post 2024 Reverse Split) Class A Ordinary Shares and 7,100,000 Class B Ordinary Shares outstanding as of October 23, 2023, 627,444 (34,858 shares post 2024 Reverse Split) vested restricted shares and 80,000 (4,444 shares post 2024 Reverse Split) shares subject to options that are exercisable within 60 days after October 23, 2023.

	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)	39,040	1.65	%	3,550,000	50	%	37.89	%
Chen Guangqiang(5)	35,296	1.49	%	3,550,000	50	%	37.85	%
Hu Jijun(6)	2,833	*					*
Wong Nelson(7)	1,972	*					*
Zhao Shudong(8)	2,052	*					*
Liu Jia(9)	63,403	2.67	%				*
Duan Yonggang(10)	1,667	*					*
Directors and Executive Officers as a Group (eight members)	146,263	6.17	%	7,100,000	100	%	75.74	%
5% or Greater Shareholders

* Less than 1%.

(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) The percentage of shares beneficially owned is based on 41,703,218 (2,371,573 shares post 2024 Reverse Split) Class A Ordinary Shares and 7,100,000 Class B Ordinary Shares outstanding as of October 23, 2023.

(3) Class A Ordinary Shares have one vote per share. Class B Ordinary Shares have fifteen votes per share.

(4) Mr. Yin holds 702,712 (39,040 shares post 2024 Reverse Split) Class A Ordinary Shares and 3,550,000 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. 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 635,328 (35,296 shares post 2024 Reverse Split) Class A Ordinary Shares and 3,550,000 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. 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.

(6) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

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(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) 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.

(10) The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

B. Related party transactions

Transactions with Related Persons

Sales to related party consisted of the following:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd.	¥	85,657	¥	—	¥	—	$	—
Total revenue from related parties	¥	85,657	¥	—	¥	—	$	—

Other payables consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Related Parties	RMB		RMB		US Dollars
Expenses paid by the major shareholders	¥	1,396,419	¥	1,796,309	$	247,722
Due to family members of the owners of BHD and FGS		590,159		545,159		75,181
Due to management staff for costs incurred on behalf of the Company		253,557		250,927		34,605
Total	¥	2,240,135	¥	2,592,395	$	357,508

The Company also had short-term borrowings from related parties. Below is a summary of the Company’s short-term borrowings due to related parties as of June 30, 2022 and 2023, respectively.

	June 30,		June 30,		June 30,
	2022		2023		2023
Short-term borrowings due to related parties:	RMB		RMB		US Dollars
Short-term borrowing from a founder, 4.35% annual interest, due on November 17, 2022	¥	4,006,767	¥		$
Short-term borrowing from a founder, 4.35% annual interest, due on December 26, 2022		5,002,389
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023		—		10,004,055		1,379,622
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024		—		4,993,950		688,697
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024		—		5,020,217		692,320
Total short-term borrowings due to related parties		9,009,156		20,018,222		2,760,639

The Company also had long-term borrowings from a related party. Below is a summary of the Company’s long-term borrowings due to a related party as of June 30, 2022 and 2023, respectively.

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	June 30,		June 30,	June 30,
	2022		2023	2023
Long-term borrowings due to related party:	RMB		RMB	US Dollars
Long-term borrowing from a Founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.	¥	6,510,606	¥	$
Less: current portion		(999,530)
Total long-term borrowings due to related party	¥	5,511,076	¥	$

Leases from related parties - The Company has various agreements for the lease of office space owned by the Founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥94,167 ($12,986) with annual rental expense at ¥1.13 million ($0.15 million). The details of leases from related parties are as below:

			Monthly Rent		Monthly Rent
Lessee	Lessor	Rent Period	RMB		USD
Nanjing Recon	Yin Shenping	April 1, 2022 - March 31, 2024	¥	40,000	$	5,516
BHD	Chen Guangqiang	Jan 1, 2023- Dec 31, 2023		22,500		3,103
BHD	Chen Guangqiang	Jan 1, 2023- Dec 31, 2023		31,667		4,367

Expenses paid by the owner on behalf of Recon – Shareholders and founders of the VIEs paid certain operating expenses for the Company. As of June 30, 2022 and 2023, ¥2,240,135 and ¥2,592,395 ($357,508) 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. (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.

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.

C. Interests of experts and counsel

Not applicable for annual reports on Form 20-F.

ITEM 10.            ADDITIONAL INFORMATION

A. Share capital

Not applicable for annual reports on Form 20-F.

B. Memorandum and articles of association

We are an exempted company incorporated in Cayman Islands and our affairs are governed by our fourth amended and restated memorandum and articles of association and the Cayman Islands Companies Act (2023 Revision) (as amended) (the “Cayman Companies Act”). A Cayman Islands exempted company:

● is a company that conducts its business mainly outside the Cayman Islands;

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● is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

● does not have to hold an annual general meeting;

● does not have to make its register of members open to inspection by shareholders of that company;

● may obtain an undertaking against the imposition of any future taxation;

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

The following description of our memorandum and articles of association, as amended and restated from time to time, are summaries and do not purport to be complete. Reference is made to our fourth amended and restated memorandum and articles of association, effective on March 29, 2024 (respectively, the “Memorandum” and the “Articles”).

All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form, and are issued when registered in our register of members. Unless and until the directors resolve to issue share certificates, no share certificate shall be issued, and the records of the shareholdings of each shareholder shall be in uncertified book entry form. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares or warrants to bearer.

On December 10, 2019, the Company’s board of directors approved to effect a one-for-five reverse stock split of its ordinary shares (the “2019 Reverse Stock Split”) with the market effective date of December 27, 2019, such that the number of the Company’s ordinary shares is decreased from 100,000,000 to 20,000,000 and the par value of each ordinary share is increased from US$0.0185 to US$0.0925. As a result of the Reverse Stock Split, each five pre-split ordinary shares outstanding were automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholder.

On April 5, 2021, at the 2021 annual meeting, to implement a dual class structure, our shareholders approved (i) a special resolution that the authorized share capital of the Company be amended from US$1,850,000, divided into 20,000,000 ordinary shares of a nominal or par value of US$0.0925 each, to 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, and (ii) a special resolution that the Third Amended and Restated Memorandum and Articles of Association of the Company to substitute the Second Amended and Restated Memorandum and Articles of Association. On April 7, 2021, we filed the Third Amended and Restated Memorandum and Articles of Association with the Companies Register of the Cayman Islands. Our Class A Ordinary Shares began to trade on the NASDAQ Capital Market on April 12, 2021 under the same symbol, “RCON.”

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On March 29, 2024, the Company held its annual meeting, at which the Company’s shareholders approved (i) a capital increase to the authorised share capital by the creation of 350,000,000 additional Class A Ordinary Shares with a nominal or par value of US$0.0925 each and 60,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0925 each; (ii) a share consolidation or reverse stock split of only the Class A Ordinary Shares, at a ratio of one-for-eighteen (the “2024 Reverse Stock Split”), such that there were then 27,694,610.80 Class A Ordinary Shares with a nominal or par value of US$1.67 (together with 60,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0925 each); (iii) a subsequent share subdivision of all shares at a ratio of 1:17,349.9459 into 480,500,000,000 Class A Ordinary Shares with a nominal or par value of US$0.0001 each and 56,000,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0001 each; and (iv) a final capital reduction by the cancellation of 480,000,000,000 unissued Class A Ordinary Shares and the cancellation of 55,920,000,000 unissued Class B Ordinary Shares, such that the final authorized share capital of the Company, following each of the above stages was amended 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 (collectively, the “Capital Amendment”). No fractional ordinary shares were issued to any shareholders in connection with the Capital Amendment. Each shareholder will be entitled to receive one ordinary share in lieu of the fractional share that would have resulted from the Capital Amendment.

As of the date of this amendment to the annual report, the authorized share capital of the Company is 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. Subject to the provisions of the Cayman Companies Act and the provisions, if any, of the Articles, and any directions given by any ordinary resolution and the rights attaching to any class of existing shares, the directors may issue, allot, grant options over or otherwise dispose of shares (including any fractions of Shares) and other securities of our company at such times, to such persons, for such consideration and on such terms as the directors may determine.

Class A Ordinary Shares

Ordinary Shares

Holders of ordinary shares are entitled to cast one vote for each share on all matters submitted to a vote of shareholders, including the election of directors and auditor. The holders of ordinary shares are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available therefor and subject to any preference of any then authorized and issued preferred shares. Such holders do not have any preemptive rights to subscribe for additional shares. All holders of ordinary shares are entitled to share ratably in any assets for distribution to shareholders upon the liquidation, dissolution or winding up of the Company, subject to any preference of any then authorized and issued preferred shares. All outstanding ordinary shares are fully paid and non-assessable.

Preferred Shares

Pursuant to our Articles and Cayman Islands law, our Company may by Special Resolution establish one or more series of preferred shares having such number of shares, designations, relative voting rights, dividend rates, liquidation and other rights, preferences, powers and limitations as may be fixed by the Special Resolution. Any preferred shares issued will include restrictions on voting and transfer intended to avoid having us constitute a “controlled foreign corporation” for United States federal income tax purposes. Such rights, preferences, powers and limitations as may be established could have the effect of discouraging an attempt to obtain control of us. The issuance of preferred shares could also adversely affect the voting power of the holders of the ordinary shares deny shareholders the receipt of a premium on their ordinary shares in the event of a tender or other offer for the ordinary shares and have a depressive effect on the market price of the ordinary shares.

Under the Fourth Amended and Restated Memorandum and Articles of Association of the Company, each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder. The number of Class B Ordinary Shares held by a holder will be automatically and immediately converted into corresponding number of Class A Ordinary Shares in the ratio of 1/18 upon any direct or indirect sale, transfer, assignment or disposition of such number of Class B Ordinary Shares by the holder. Furthermore, Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Finally, except for voting rights and conversion rights as set forth in the Fourth Amended and Restated Memorandum and Articles of Association of the Company, the Class A Ordinary Shares and the Class B Ordinary Shares shall have the same rights, preferences, privileges and restrictions.

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Register of Members

Under Cayman Islands law, we must keep a register of members and there should be entered therein:

● the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member;

● the date on which the name of any person was entered on the register as a member; and

● the date on which any person ceased to be a member.

Under Cayman Islands law, the register of members of our Company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members is deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Once our register of members has been updated, the shareholders recorded in the register of members are deemed to have legal title to the shares set against their name.

If the name of any person is incorrectly entered in, or omitted from, our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a member of our Company, the person or member aggrieved (or any member of our Company or our Company itself) may apply to the Cayman Islands Grand Court for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

C. Material contracts

We have not entered into any material contracts other than in the ordinary course of business and otherwise described elsewhere in this annual report.

D. Exchange controls

Foreign Currency Exchange

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans or foreign currency is to be remitted into China under the capital account, such as a capital increase or foreign currency loans to our PRC subsidiaries.

In August 2008, SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Circular 45 on November 9, 2011 in order to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

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In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

We typically do not need to use our offshore foreign currency to fund our PRC operations. In the event we need to do so, we will apply to obtain the relevant approvals of SAFE and other PRC government authorities as necessary.

SAFE Circular 75

Under the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, issued by SAFE on October 21, 2005 and its implementation rules, a PRC resident (whether a natural or legal person) is required to complete an initial registration with its local SAFE branch before incorporating or acquiring control of an offshore special purpose vehicle, or SPV, with assets or equity interests in a PRC company, for the purpose of offshore equity financing. The PRC resident is also required to amend the registration or make a filing upon (1) the injection of any assets or equity interests in an onshore company or undertaking of offshore financing, or (2) the occurrence of a material change that may affect the capital structure of a SPV. SAFE also subsequently issued various guidance and rules regarding the implementation of SAFE Circular 75, which imposed obligations on PRC subsidiaries of offshore companies to coordinate with and supervise any PRC-resident beneficial owners of offshore entities in relation to the SAFE registration process.

Regulation of Dividend Distribution

The principal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the Company Law of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations and the Equity Joint Venture Law and its implementation regulations. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of such reserves reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

E. Taxation

The following sets forth the material Cayman Islands, Chinese and U.S. federal income tax consequences related to an investment in our Class A Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our Class A Ordinary Shares, such as the tax consequences under state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Class A Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

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The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of shares and you are, for U.S. federal income tax purposes,

· an individual who is a citizen or resident of the United States;

· a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

· an estate whose income is subject to U.S. federal income taxation regardless of its source; or

· a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

WE URGE POTENTIAL PURCHASERS OF OUR SHARES TO CONSULT THEIR OWN TAX

ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX

CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR SHARES.

People’s Republic of China Enterprise Taxation

The following brief description of Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See “Dividend Policy.”

We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

Under the EIT Law, an enterprise established outside of China with a “de facto management body” within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although Recon does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of Recon and its subsidiaries organized outside the PRC.

According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

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We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of the Company, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that Recon and its offshore subsidiaries should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in SAT Notice 82 were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.

The implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how “domicile” may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%.

See “Risk Factors — Risks Related to Doing Business in China — Under the Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.”

Any gain or loss recognized by you generally will be treated as United States source gain or loss. However, if we are treated as a PRC resident enterprise for PRC tax purposes and PRC tax were imposed on any gain, and if you are eligible for the benefits of the tax treaty between the United States and PRC, you may elect to treat such gain as PRC source gain under such treaty and, accordingly, you may be able to credit the PRC tax against your United States federal income tax liability.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our company levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

United States Federal Income Taxation

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

· banks;

· financial institutions;

· insurance companies;

· regulated investment companies;

· real estate investment trusts;

· broker-dealers;

· traders that elect to mark-to-market;

· U.S. expatriates;

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· tax-exempt entities;

· persons liable for alternative minimum tax;

· persons holding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

· persons that actually or constructively own 10% or more of our voting shares;

· persons who acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as consideration; or

· persons holding our Class A Ordinary Shares through partnerships or other pass-through entities.

Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary Shares.

Taxation of Dividends and Other Distributions on our Class A Ordinary Shares

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the Nasdaq Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change in law after the date of this annual report.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

Taxation of Dispositions of Class A Ordinary Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and

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your tax basis (in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates.   The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes.

Passive Foreign Investment Company

A non-U.S. corporation is considered a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year if either:

· at least 75% of its gross income is passive income; or

· at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.

Based on the market price of our Class A Ordinary Shares, the value of our assets and the composition of our assets and income, we believe that we were not a PFIC for our taxable year ended December 31, 2019, 2018 or 2017. However, given the factual nature of the analyses and the lack of guidance, no assurance can be given. We do not expect to be a PFIC for our taxable year ending December 31, 2018. However, because PFIC status is a factual determination for each taxable year which cannot be made until the close of the taxable year, our actual PFIC status will not be determinable until the close of the taxable year and, accordingly, there is no guarantee that we will not be a PFIC for the current taxable year or any future taxable year.

We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change from year to year. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A Ordinary Shares, our PFIC status will depend in large part on the market price of our Class A Ordinary Shares. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects including the composition of our income and assets in a given year. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. However, if we cease to be a PFIC, you may avoid some of the adverse effects of the PFIC regime by making a “deemed sale” election with respect to the Class A Ordinary Shares.

If we are a PFIC for any taxable year during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

· the excess distribution or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;

· the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

· the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if you hold the Class A Ordinary Shares as capital assets.

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A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the Class A Ordinary Shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of your taxable year over your adjusted basis in such Class A Ordinary Shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the Class A Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on our Class A Ordinary Shares” generally would not apply.

The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Class A Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Class A Ordinary Shares in any year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed above.

Information Reporting and Backup Withholding

Dividend payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.

Under the Hiring Incentives to Restore Employment Act of 2010, certain United States Holders are required to report information relating to ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary shares. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

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F. Dividends and paying agents

Not applicable for annual reports on Form 20-F.

G. Statement by experts

Not applicable for annual reports on Form 20-F.

H. Documents on display

We are subject to the information requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.

I. Subsidiary Information

Not applicable.

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PART II

ITEM 16.            [RESERVED]

ITEM 16A.         AUDIT COMMITTEE FINANCIAL EXPERT

The Company’s board of directors has determined that Mr. Nelson Wong qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market standards. The Company’s board of directors has also determined that Mr. Wong and the other members of the Audit Committee are all “independent” in accordance with the applicable Nasdaq Capital Market standards.

ITEM 16B.          CODE OF ETHICS

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, officers, employees and advisors. The Code of Ethics is attached it as an exhibit to this annual report. We have also posted a copy of our code of business conduct and ethics on our website at www.recon.cn.

ITEM 16C.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

Friedman LLP was appointed by the Company to serve as its independent registered public accounting firm for fiscal year 2022. Effective September 1, 2022, Friedman combined with Marcum LLP and continued to operate as an independent registered public accounting firm. Friedman continued to serve as the Company’s independent registered public accounting firm through February 1, 2023.

On February 1, 2023, the Audit Committee of the Company approved the engagement of Marcum Asia to serve as the independent registered public accounting firm for fiscal year 2023. On August 22, 2023, Marcum Asia has been dismissed by the Audit Committee of the Company before completing the audit of fiscal year 2023.

On August 22, 2023, the Audit Committee of the Company approved the engagement of Enrome LLP to serve as the independent registered public accounting firm of the Company.

Fees Paid To Independent Registered Public Accounting Firm

Audit Fees

During fiscal year ended June 30, 2022, Friedman LLP’s audit fees were $295,000.

During fiscal year ended June 30, 2023, Friedman LLP’s audit fees were $25,000, and Marcum Asia CPAs LLP’s audit fees were $339,150. Friedman LLP’s audit fees consisted of service to perform and issuance of consent. Marcum Asia CPAs LLP’s audit fees consisted of completed planning work and three weeks of field work, services to perform midterm review and consents and assistance with and review of documents filed with the SEC and related fees. Our decision to dismiss the Marcum Asia CPAs LLP was primarily due to concerns about cost controls. The fees paid by the Company to Marcum Asia CPAs LLP were based on the contractually agreed fees for the audit progress until the Company’s dismissal. Enrome LLP’s audit fees were $171,000.

Audit-Related Fees

The Company has not incurred any audit-related fees from Friedman LLP, Marcum Asia CPAs LLP and Enrome LLP for audit-related services in fiscal years 2022 and 2023.

Tax Fees

The Company has not incurred any tax fees from Friedman LLP, Marcum Asia CPAs LLP and Enrome LLP for tax services in fiscal years 2023 and 2022.

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All Other Fees

The Company has not incurred any other fees from Friedman LLP, Marcum Asia CPAs LLP and Enrome LLP other fees in fiscal years 2023 and 2022.

Audit Committee Pre-Approval Policies

Before Enrome LLP was engaged by the Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered by Enrome LLP have been so approved.

Percentage of Hours

The percentage of hours expended on the principal accountants’ engagement to audit our consolidated financial statements for fiscal year 2023 that were attributed to work performed by persons other than Enrome LLP’s full-time permanent employees was less than 5%.

ITEM 16D.         EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.         PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended June 30, 2023.

ITEM 16F.         CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

On August 22, 2023, we appointed Enrome LLP (“Enrome”) as its independent registered public accounting firm, effective on the same day. Enrome replaced Marcum Asia, our former independent registered public accounting firm, which we dismissed on August 22, 2023. The appointment of Enrome was made after careful consideration and evaluation process by the Company and has been approved by the audit committee of our board of directors. Our decision to make this change was not the result of any disagreement between the Company and Marcum Asia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

During the two most recent fiscal years ended June 30, 2021 and 2022 and any subsequent interim period prior to engaging Enrome, neither the Company nor anyone on its behalf consulted Enrome regarding either (i) the application of accounting principles to any proposed or completed transaction, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Enrome concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions to Item 16F of Form 20-F) or any reportable events as described in Item 16F(a)(1)(v) of Form 20-F.

Previously, on February 7, 2023, the Company’s board of directors determined and ratified the audit committee’s approval of the proposed appointment of Marcum Asia as the Company’s independent registered public accounting firm. The services previously provided by Friedman were then provided by Marcum Asia up until its dismissal on August 22, 2023.

The Company was notified by Friedman, the Company’s then independent registered public accounting firm, that effective September 1, 2022, Friedman combined with Marcum LLP and continued to operate as an independent registered public accounting firm. Friedman continued to serve as the Company’s independent registered public accounting firm through February 1, 2023. On February 1, 2023, the audit committee approved the engagement of Marcum Asia to serve as the independent registered public accounting firm of the Company.

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Friedman’s reports on the consolidated financial statements of the Company for the fiscal years ended June 30, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, scope of accounting principles. During the Company’s two most recent fiscal years and through February 1, 2023, there were no disagreements with Friedman on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of Friedman, would have caused Friedman to make reference to such matters in their reports. There were no reportable events (as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the two fiscal years ended June 30, 2022 and 2021, or in the subsequent period through February 1, 2023.

We provided Marcum Asia and Friedman with a copy of the above statements and requested that Marcum Asia furnish us with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of Marcum Asia’s letter dated August 25, 2023, to the SEC, regarding the disclosures herein under the heading “Change in Registrant’s Certifying Accountant” is filed as Exhibit 16.1 to this annual report. A copy of Friedman’s letter, dated February 8, 2023, is filed as Exhibit 16.1 to the Form 6-K filed on February 8, 2023.

ITEM 16G.         CORPORATE GOVERNANCE

We are incorporated in the Cayman Islands and our corporate governance practices are governed by applicable Cayman Islands law. In addition, because our Class A Ordinary Shares are listed on The Nasdaq Capital Market, we are subject to Nasdaq’s corporate governance requirements.

As noted above in the risk factor titled “We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.”, The Nasdaq Capital Market allows foreign private issuers like our Company to opt to follow rules that apply in the issuer’s home country instead of a given Nasdaq rule. NASDAQ Listing Rule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that such foreign private issuer discloses in its annual report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home country practice followed in lieu of such requirement.

NASDAQ Rule 5635 requires shareholder approval for the issuance of securities: (i) in connection with the acquisition of stock or assets of another Company; (ii) when it would result in a change of control; (iii) when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants; or (iv) in connection with a transaction other than a public offering involving the sale, issuance or potential issuance of common stock at a price less than market value. Our Cayman Islands counsel, Campbells, has provided a letter to NASDAQ certifying that under Cayman Islands law and our Memorandum and Articles of Association, we are not prohibited from issuing shares without first obtaining shareholder approval where such issuance of securities otherwise requires shareholder approval under NASDAQ Rule 5635. Accordingly, we intend to comply with the requirements of Cayman Islands law in determining whether shareholder approval is required.

ITEM 16H.         MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 18.         FINANCIAL STATEMENTS

Our consolidated financial statements are included at the end of this annual report, beginning with page F-1.

55

ITEM 19.         EXHIBITS

Exhibit No.	Description of Exhibit	Included	Form	Filing Date
1.1.1	Second Amended and Restated Articles of Association of the Registrant	By Reference	S-3	2016-09-19
1.1.2	Second Amended and Restated Memorandum of Association of the Registrant	By Reference	S-3	2016-09-19
1.1.3	Third Amended and Restated Articles of Association of the Registrant	By Reference	6-K	2021-04-06
1.1.4	Third Amended and Restated Memorandum of Association of the Registrant	By Reference	6-K	2021-04-06

1.1.5 Fourth Amended and Restated Articles of Association of the Registrant Herewith

1.1.6 Fourth Amended and Restated Memorandum of Association of the Registrant Herewith

2.1	Specimen Share Certificate	By Reference	6-K	2020-01-17
2.2	Form of Amended and Restated Warrant	By Reference	6-K	2020-06-30
2.3	Form of Convertible Note	By reference	6-K	2020-11-25
2.4	Form of Pre-Funded Warrant	By Reference	6-K	2021-06-16
2.5	Form of Warrant	By reference	6-K	2021-06-16
2.6	Specimen Share Certificate	By Reference	6-K	2021-04-12
4.1	2009 Stock Incentive Plan	By Reference	S-1/A	2009-06-10
4.2	2015 Stock Incentive Plan	By Reference	10-K	2016-09-28
4.3	Translation of Exclusive Technical Consulting Service Agreement between Recon Technology (Jining) Co., Ltd. and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.4	Translation of Power of Attorney for rights of Chen Guangqiang in Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.5	Translation of Power of Attorney for rights of Yin Shenping in Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.6	Translation of Power of Attorney for rights of Li Hongqi in Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.7	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Chen Guangqiang and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.8	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Yin Shenping and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.9	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Li Hongqi and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.10	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Chen Guangqiang and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.11	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Yin Shenping and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.12	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Li Hongqi and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.13	Translation of Exclusive Technical Consulting Service Agreement between Recon Technology (Jining) Co., Ltd. and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.14	Translation of Power of Attorney for rights of Chen Guangqiang in Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12

56

4.15	Translation of Power of Attorney for rights of Yin Shenping in Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.16	Translation of Power of Attorney for rights of Li Hongqi in Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.17	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Chen Guangqiang and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.18	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Yin Shenping and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.19	Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Li Hongqi and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.20	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Chen Guangqiang and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.21	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Yin Shenping and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.22	Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Li Hongqi and Nanjing Recon Technology Co., Ltd.	By Reference	S-1/A	2008-08-12
4.23	Translation of the Investment Agreement between Recon Technology, Ltd., Future Gas Station (Beijing) Technology, Ltd. and six individuals	By Reference	6-KA	2018-08-28
4.24	Translation of the Supplemental Agreement between Recon Technology, Ltd., Future Gas Station (Beijing) Technology, Ltd. and six individuals	By Reference	6-KA	2018-08-28
4.25	Translation of Exclusive Technical Consulting Service Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Beijing BHD Petroleum Technology Co., Ltd.	By Reference	6-K	2019-04-24
4.26	Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement dated April 1, 2019 among Recon Hengda Technology (Beijing) Co., Ltd., Beijing BHD Petroleum Technology Co., Ltd. and Fan Zhang, Shenping Yin, Donglin Li, Zhiqiang Feng and Guangqiang Chen	By Reference	6-K	2019-04-24
4.27	Translation of Amended and Restated Equity Interest Pledge Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Fan Zhang, Shenping Yin, Donglin Li, Zhiqiang Feng and Guangqiang Chen about Beijing BHD Petroleum Technology Co., Ltd.	By Reference	6-K	2019-04-24
4.28	Translation of Exclusive Technical Consulting Service Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Nanjing Recon Technology Co., Ltd.	By Reference	6-K	2019-04-24
4.29	Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement dated April 1, 2019 among Recon Hengda Technology (Beijing) Co., Ltd., Nanjing Recon Technology Co., Ltd. and Shenping Yin, Guangqiang Chen and Degui Zhai	By Reference	6-K	2019-04-24
4.30	Translation of Amended and Restated Equity Interest Pledge Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Shenping Yin, Guangqiang Chen and Degui Zhai about Nanjing Recon Technology Co., Ltd.	By Reference	6-K	2019-04-24
4.31	Translation of Financial Support Commitment Letter from Two Major Shareholders dated August 31, 2019	By Reference	20-F	2019-10-01
4.32	Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated September 24, 2019	By Reference	20-F	2019-10-01
4.33	Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated March 17, 2020	By Reference	6-K	2020-03-18
4.34	Placement Agency Agreement, dated May 7, 2020, between the Company and Maxim Group LLC	By Reference	6-K	2020-05-26
4.35	Form of Securities Purchase Agreement, dated May 21, 2020, between the Company and the Purchasers	By Reference	6-K	2020-05-26
4.36	Form of Securities Purchase Agreement, dated June 26, 2020, between the Company and the Purchasers	By Reference	6-K	2020-06-30
4.37	Securities Purchase Agreement dated November 25, 2020	By reference	6-K	2020-11-27

57

4.38	Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated February 4, 2021	By reference	6-K	2021-02-08
4.39	Share Acquisition Agreement, dated June 3, 2021	By reference	6-K	2021-06-04
4.40	Placement Agency Agreement, dated June 14, 2021, between the Company and Maxim Group LLC	By reference	6-K	2021-06-16
4.41	Form of Securities Purchase Agreement dated June 14, 2021, between the Company and the Purchasers	By reference	6-K	2021-06-16
4.4	Form of Securities Purchase Agreement dated March 15, 2023, between the Company and the Purchasers	By reference	6-K	2023-03-20
4.43	2021 Equity Incentive Plan	By Reference	6-K	2021-04-06
8.1	List of subsidiaries of the Company	Herewith
11.1	Code of Ethics of the Company	By Reference	10-K	2009-09-28
12.1	Certification of Chief Executive Officer Required by Rule 13a-14(a)	Herewith
12.2	Certification of Chief Financial Officer Required by Rule 13a-14(a)	Herewith
13.1	Certification of Chief Executive Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code	Herewith
13.2	Certification of Chief Financial Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code	Herewith
15.1	Consent of Friedman LLP	Herewith
15.2	Consent of Enrome LLP	Herewith
16.1	Letter of Marcum Asia CPAs LLP to the U.S. Securities and Exchange Commission dated August 25, 2023	By reference	6-K	2023-08-25
16.2	Letter of Friedman LLP to the U.S. Securities and Exchange Commission dated February 8, 2023	By reference	6-K	2023-02-08
99.1	RECON ISSUES SHAREHOLDER UPDATE	By Reference	6-K	2022-07-21
99.3	Recon Technology reports financial results for FY2021	By Reference	6-K	2021-04-05
99.3	Recon Technology, Ltd Reports Financial Results for the First Six Months of Fiscal Year 2022	By Reference	6-K	2022-03-31
99.4	Recon Technology, Ltd Reports Financial Year Results for Fiscal Year 2023	By Reference	20-F	2023-10-30
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

58

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	Recon Technology, Ltd.
By:	/s/ Yin Shenping
	Name: Yin Shenping
	Title:   Chief Executive Officer

Date: May 24, 2024

59

RECON TECHNOLOGY, LTD

	PAGE
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 6907)	F-1
Report of Independent Registered Public Accounting Firm (PCAOB ID: 711)	F-2
Consolidated Balance Sheets as of June 30, 2022 and 2023	F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended June 30, 2021, 2022 and 2023	F-5
Consolidated Statements of Changes in Shareholders’ Equity for the years ended June 30, 2021, 2022 and 2023	F-6
Consolidated Statements of Cash Flows for the years ended June 30, 2021, 2022 and 2023	F-7
Notes to the Consolidated Financial Statements	F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Recon Technology, Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Recon Technology, Ltd. and its subsidiaries (collectively, the “Company”) as of June 30, 2023, the related consolidated statements of operations and comprehensive income (loss), changes in shareholder’s equity, and cash flows for the year ended June 30, 2023 including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and the results of its operations and its cash flows for the year ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Enrome LLP

We have served as the Company’s auditor since 2023.

Singapore

October 27, 2023, except for Note 28, as to which the date is May 24, 2024.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Director and

Stockholders of Recon Technology, Ltd

Opinion on the Financial Statements

We have audited, before the effects of retrospective adjustments to the reverse stock split and change in capital structure as disclosed in Note 28, the accompanying consolidated balance sheets of Recon Technology, Ltd and Subsidiaries (collectively, the “Company”) as of June 30, 2021 and 2022, and the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements, except for the effects of retrospective adjustments to the reverse stock split and change in capital structure as disclosed in Note 28, present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the retrospective adjustments to the reverse stock split and change in capital structure as disclosed in Note 28, accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditor.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of impairment for goodwill

Description of Critical Audit Matter

As described in Note 3, the goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. Management performed evaluation with the assistance of an independent valuation firm on the impairment of goodwill and recorded an impairment loss on goodwill of ¥2,266,893 ($338,457) for the year ended June 30, 2022.

We identified the assessment of impairment for goodwill as a critical audit matter because there is a high degree of subjective auditor judgement in assessing the assumptions used to determine the free cash flow projection used to develop the fair value of the underlying assets.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included the following. We read the accounting memo prepared by the Company. We evaluated management’s application of the relevant accounting standards. We also engaged a specialist to assist us in the evaluation of the Company’s valuation methodology and tested the significant assumptions used by the Company to develop forecasted results and discounted cash flows.

/s/ Friedman LLP

Friedman LLP

We served as the Company’s auditor from 2011 to 2023

New York, New York

October 28, 2022

F-3

RECON TECHNOLOGY, LTD

CONSOLIDATED BALANCE SHEETS

	As of June 30		As of June 30		As of June 30
	2022		2023		2023
	RMB		RMB		U.S. Dollars
ASSETS
Current assets
Cash	¥	316,974,857	¥	104,125,800	$	14,359,604
Restricted cash		723,560		731,545		100,885
Short-term investments		—		184,184,455		25,400,198
Notes receivable		10,828,308		3,742,390		516,099
Accounts receivable, net		22,577,980		27,453,415		3,785,999
Inventories, net		3,894,369		6,330,701		873,044
Other receivables, net		5,501,833		2,185,733		301,427
Loans to third parties		50,383,822		123,055,874		16,970,181
Purchase advances, net		178,208		2,680,456		369,652
Contract costs, net		33,858,820		49,572,685		6,836,386
Prepaid expenses		420,284		350,119		48,284
Prepaid expenses- related parties		275,000		—		—
Total current assets		445,617,041		504,413,173		69,561,759
Property and equipment, net		25,474,162		24,752,864		3,413,576
Construction in progress		239,739		—		—
Intangible assets, net		5,950,000		—		—
Long-term other receivables, net		1,564,381		3,640		502
Goodwill		4,730,002		—		—
Operating lease right-of-use assets (including ¥765,241 and ¥335,976 ($46,333) from a related party as of June 30, 2022 and 2023, respectively)		6,666,759		2,654,900		366,127
Total Assets	¥	490,242,084	¥	531,824,577	$	73,341,964
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138
Accounts payable		16,739,989		10,791,721		1,488,246
Other payables		3,533,918		5,819,010		802,478
Other payable- related parties		2,240,135		2,592,395		357,508
Contract liabilities		2,001,277		2,748,365		379,017
Accrued payroll and employees’ welfare		2,250,547		2,382,516		328,564
Taxes payable		2,210,958		1,163,006		160,386
Short-term borrowings - related parties		9,009,156		20,018,222		2,760,639
Long-term borrowings - related party - current portion		999,530		—		—
Operating lease liabilities - current (including ¥429,265 and ¥335,976 ($46,333) from a related party as of June 30, 2022 and 2023, respectively)		3,892,774		3,066,146		422,841
Total Current Liabilities		52,878,284		61,032,862		8,416,817
Operating lease liabilities - non-current (including ¥335,976 and ¥nil ($nil) from a related party as of June 30, 2022 and 2023, respectively)		2,184,635		25,144		3,468
Long-term borrowings - related party		5,511,076		—		—
Contract liabilities - non-current		106,000		—		—
Warrant liability		16,677,328		31,615,668		4,360,000
Total Liabilities		77,357,323		92,673,674		12,780,285
Commitments and Contingencies
Equity
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 2023, respectively*		19,461		26,932		3,714
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 2023, respectively*		2,604		4,693		647
Additional paid-in capital*		516,426,799		580,340,061		80,032,554
Statutory reserve		4,148,929		4,148,929		572,163
Accumulated deficit		(111,273,525)		(170,440,826)		(23,504,865)
Accumulated other comprehensive income		11,307,461		35,127,173		4,844,259
Total shareholders’ equity		420,631,729		449,206,962		61,948,472
Non-controlling interests		(7,746,968)		(10,056,059)		(1,386,793)
Total equity		412,884,761		439,150,903		60,561,679
Total Liabilities and Equity	¥	490,242,084	¥	531,824,577	$	73,341,964

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

The accompanying notes are an integral part of these consolidated financial statements.

F-4

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	For the years ended
	June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		USD
Revenue
Revenue - third parties	¥	47,852,918	¥	83,777,571	¥	67,114,378	$	9,255,496
Revenue - related party		85,657		—		—		—
Revenue		47,938,575		83,777,571		67,114,378		9,255,496
Cost of revenue
Cost of revenue - third parties		40,723,547		64,352,834		48,247,395		6,653,620
Cost of revenue		40,723,547		64,352,834		48,247,395		6,653,620
Gross profit		7,215,028		19,424,737		18,866,983		2,601,876
Selling and distribution expenses		8,038,965		10,150,802		10,638,978		1,467,182
General and administrative expenses		45,949,157		83,281,958		76,784,396		10,589,052
Allowance for (net recovery of) credit losses		8,191,247		(658,823)		(9,038,985)		(1,246,533)
Impairment loss of property and equipment and other long-lived assets		768,312		—		1,009,124		139,165
Research and development expenses		5,846,295		8,964,217		8,806,205		1,214,431
Operating expenses		68,793,976		101,738,154		88,199,718		12,163,297
Loss from operations		(61,578,948)		(82,313,417)		(69,332,735)		(9,561,421)
Other income (expenses)
Subsidy income		355,667		11,993		325,425		44,878
Interest income		918,629		5,367,979		13,603,487		1,876,007
Interest expense		(2,210,005)		(1,522,526)		(2,514,850)		(346,814)
Income (loss) from investment in unconsolidated entity		(266,707)		15,411		—		—
Gain in fair value changes of warrants liability		35,365,792		174,485,575		6,116,000		843,435
Remeasurement gain of previously held equity interests in connection with step acquisition		979,254		—		—		—
Foreign exchange transaction gain (loss)		(146,898)		(118,456)		241,652		33,325
Impairment loss on goodwill and intangible assets		—		(2,266,893)		(9,980,002)		(1,376,305)
Other income		192,137		15,855		82,970		11,442
Other income, net		35,187,869		175,988,938		7,874,682		1,085,968
Income (loss) before income tax		(26,391,079)		93,675,521		(61,458,053)		(8,475,453)
Income tax expenses (benefit)		(524,251)		(613,874)		18,339		2,529
Net income (loss)		(25,866,828)		94,289,395		(61,476,392)		(8,477,982)
Less: Net loss attributable to non-controlling interests		(3,034,094)		(1,297,400)		(2,309,091)		(318,438)
Net income (loss) attributable to Recon Technology, Ltd	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Comprehensive income (loss)
Net income (loss)		(25,866,828)		94,289,395		(61,476,392)		(8,477,982)
Foreign currency translation adjustment		(850,895)		9,332,625		23,819,712		3,284,889
Comprehensive income (loss)		(26,717,723)		103,622,020		(37,656,680)		(5,193,093)
Less: Comprehensive loss attributable to non- controlling interests		(3,034,094)		(1,297,400)		(2,309,091)		(318,438)
Comprehensive income (loss) attributable to Recon Technology, Ltd	¥	(23,683,629)	¥	104,919,420	¥	(35,347,589)	$	(4,874,655)
Earnings (loss) per share - basic and diluted*	¥	(30.04)	¥	55.52	¥	(27.43)	$	(3.78)
Weighted - average shares -basic and diluted*		760,116		1,721,529		2,157,158		2,157,158

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

The accompanying notes are an integral part of these consolidated financial statements.

F-5

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

													Accumulated
													Other				Non-
							Additional Paid-		Statutory		Accumulated		Comprehensive		Stockholders’		controlling		Total		Total
	Common Stock						in Capital*		Reserve		deficit		income		Equity		Interest		Equity		Equity
	Number of			Number of
	Class A	Amount		Class B	Amount
	Shares*	(RMB)*		Shares**	(RMB)*		(RMB)		(RMB)		(RMB)		(RMB)		(RMB)		(RMB)		(RMB)		(USD)
Balance, June 30, 2020	454,883	¥	4,948	—	¥	—	¥	287,077,740	¥	4,148,929	¥	(184,027,586)	¥	2,825,731	¥	110,029,762	¥	10,614,526	¥	120,644,288	$	16,637,609
Capital contribution in non-controlling interests	—		—	—		—		—		—		—		—		—		50,000		50,000		6,895
Step acquisition of FGS	—		—	—		—		—		—		—		—		—		34,790,000		34,790,000		4,797,760
Capital contribution receivable due from non-controlling Interest	—		—	—		—		—		—		—		—		—		(50,000,000)		(50,000,000)		(6,895,315)
Stock issuance	334,117		3,870	—		—		81,087,271		—		—		—		81,091,141		—		81,091,141		11,182,980
Stock issuance for warrants exercised	143,951		1,690	—		—		21,128,345		—		—		—		21,130,035		—		21,130,035		2,913,965
Proceeds from Pre-founded warrants	73,889		856	—		—		30,275,713		—		—		—		30,276,569		—		30,276,569		4,175,330
Issuance of common stock in exchange of shares of Starry, net of issuance costs	17,575		202	—		—		27,675,248		—		—		—		27,675,450		—		27,675,450		3,816,619
Stock issuance for convertible notes redemption	512,519		5,977	—		—		42,429,692		—		—		—		42,435,669		—		42,435,669		5,852,146
Restricted shares issued for management	10,481		122	—		—		6,139,915		—		—		—		6,140,037		—		6,140,037		846,750
Net loss for the year	—		—	—		—		—		—		(22,832,734)		—		(22,832,734)		(3,034,094)		(25,866,828)		(3,567,199)
Foreign currency translation adjustment	—		—	—		—		—		—		—		(850,895)		(850,895)		—		(850,895)		(117,344)
Balance, June 30, 2021	1,547,415	¥	17,665	—	¥	—	¥	495,813,924	¥	4,148,929	¥	(206,860,320)	¥	1,974,836	¥	295,095,034	¥	(7,579,568)	¥	287,515,466	$	39,650,196
Capital contribution in non-controlling interests	—		—	—		—		—		—		—		—		—		1,130,000		1,130,000		155,834
Restricted shares issued for services	86,111		986	—		—		8,934,933		—		—		—		8,935,919		—		8,935,919		1,232,320
Stock issuance for Pre-founded warrants	81,667		929	—		—		92,392		—		—		—		93,321		—		93,321		12,870
Cancellation of ordinary shares issued to Starry Lab	(17,575)		(202)	—		—		(27,675,248)		—		—		—		(27,675,450)		—		(27,675,450)		(3,816,619)
Restricted shares issued for management	7,148		83	4,100,000		2,604		39,260,798		—		—		—		39,263,485		—		39,263,485		5,414,682
Net income (loss) for the year	—		—	—		—		—		—		95,586,795		—		95,586,795		(1,297,400)		94,289,395		13,003,100
Foreign currency translation adjustment	—		—	—		—		—		—		—		9,332,625		9,332,625		—		9,332,625		1,287,028
Balance, June 30, 2022	1,704,766		19,461	4,100,000		2,604		516,426,799		4,148,929		(111,273,525)		11,307,461		420,631,729		(7,746,968)		412,884,761		56,939,411
Stock issuance	490,417		6,091	—		—		28,168,902		—		—		—		28,174,993		—		28,174,993		3,885,509
Restricted shares issued for services	55,556		690	—		—		5,805,150		—		—		—		5,805,840		—		5,805,840		800,662
Proceeds from Pre-founded warrants	—		—	—		—		3,750,282		—		—		—		3,750,282		—		3,750,282		517,188
Restricted shares issued for management	55,556		690	3,000,000		2,089		26,188,928		—		—		—		26,191,707		—		26,191,707		3,612,002
Net income loss for the year	—		—	—		—		—		—		(59,167,301)		—		(59,167,301)		(2,309,091)		(61,476,392)		(8,477,982)
Foreign currency translation adjustment	—		—	—		—		—		—		—		23,819,712		23,819,712		—		23,819,712		3,284,889
Balance, June 30, 2023	2,306,295	¥	26,932	7,100,000	¥	4,693	¥	580,340,061	¥	4,148,929	¥	(170,440,826)	¥	35,127,173	¥	449,206,962	¥	(10,056,059)	¥	439,150,903	$	60,561,679

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

**Retrospectively restated for effect of changing in class of shares on April 5, 2021.

The accompanying notes are an integral part of these consolidated financial statements.

F-6

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		U.S. Dollars
Cash flows from operating activities:
Net income (loss)	¥	(25,866,828)	¥	94,289,395	¥	(61,476,392)	$	(8,477,982)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		3,150,789		3,339,868		3,683,586		507,990
Loss (gain) from disposal of equipment		19,590		48,628		(12,782)		(1,763)
Gain in fair value changes of warrants liability		(35,365,792)		(174,485,575)		(6,116,000)		(843,435)
Amortization of offering cost of warrants		12,584,024		—		1,483,306		204,557
Allowance for (net recovery of) credit losses		8,191,247		(658,823)		(9,038,985)		(1,246,533)
Allowance for slow moving inventories		654,673		266,285		484,644		66,835
Impairment loss of property and equipment and other long-lived assets		768,312		—		1,009,124		139,165
Impairment loss on goodwill and intangible assets		—		2,266,893		9,980,002		1,376,305
Amortization of right of use assets		1,866,803		3,138,518		3,252,066		448,480
Restricted shares issued for management and employees		6,140,037		39,263,485		26,191,707		3,612,002
Restricted shares issued for services		—		8,935,919		5,805,840		800,662
Remeasurement gain of previously held equity interests in connection with step acquisition		(979,254)		—		—		—
Loss (income) from investment in unconsolidated entity		266,707		(15,411)		—		—
Deferred tax benefit		(425,913)		(624,087)		—		—
Interest expenses related to convertible notes		430,416		—		—		—
Accrued interest income from loans to third parties		—		(270,563)		(7,997,961)		(1,102,969)
Accrued interest income from short-term investment		—		—		(2,901,955)		(400,198)
Changes in operating assets and liabilities:
Notes receivable		(2,124,748)		(4,522,674)		7,085,917		977,193
Accounts receivable		18,326,410		3,811,866		(495,784)		(68,372)
Accounts receivable-related party		3,409,912		—		—		—
Inventories		(2,502,263)		(689,291)		(2,373,013)		(327,253)
Other receivables		(338,468)		285,786		(1,307,694)		(180,339)
Other receivables-related parties		—		—		(64,122)		(8,843)
Purchase advances		(899,371)		865,430		(2,575,198)		(355,136)
Contract costs		(21,944,876)		15,422,513		(14,236,539)		(1,963,309)
Prepaid expense		143,354		(274,215)		70,164		9,676
Prepaid expense - related parties		(433,000)		158,000		275,000		37,924
Operating lease liabilities		(2,762,949)		(1,594,702)		(3,061,303)		(422,173)
Accounts payable		(2,109,944)		(5,523,938)		(1,710,898)		(235,944)
Other payables		5,685,188		(6,329,042)		2,270,104		313,062
Other payables-related parties		(2,577,610)		969,468		352,260		48,579
Contract liabilities		4,160,456		(5,578,999)		641,087		88,410
Accrued payroll and employees’ welfare		(1,593,822)		296,065		131,971		18,200
Taxes payable		76,452		961,964		(1,036,483)		(142,938)
Net cash used in operating activities		(34,050,468)		(26,247,237)		(51,688,331)		(7,128,147)
Cash flows from investing activities:
Purchases of property and equipment		(522,416)		(692,206)		(940,673)		(129,725)
Proceeds from disposal of equipment		—		—		31,950		4,406
Repayments of loans to third parties		5,150,377		171,435,032		40,113,311		5,531,879
Payments made for loans to third parties		(51,638,458)		(171,071,510)		(103,146,761)		(14,224,589)
Payments for short-term investments		—		—		(290,051,964)		(39,999,995)
Redemption of short-term investments		—		—		108,769,464		14,999,995
Step acquisition of FGS, net of cash		471,843		—		—		—
Net cash used in investing activities		(46,538,654)		(328,684)		(245,224,673)		(33,818,029)
Cash flows from financing activities:
Proceeds from short-term bank loans		16,020,000		10,000,000		13,491,481		1,860,560
Repayments of short-term bank loans		(10,540,000)		(15,000,000)		(11,040,000)		(1,522,486)
Proceeds from short-term borrowings		3,660,000		—		—		—
Repayments of short-term borrowings		(3,360,000)		(530,000)		—		—
Proceeds from short-term borrowings-related parties		18,400,000		11,100,000		15,013,115		2,070,403
Repayments of short-term borrowings-related parties		(15,950,000)		(14,770,000)		(9,000,000)		(1,241,157)
Proceeds from long-term borrowings-related party		—		—		—		—
Repayments of long-term borrowings-related party		(816,952)		(892,701)		(1,499,667)		(206,813)
Proceeds from warrants issued with common stock		212,051,414		—		17,493,069		2,412,405
Proceeds from sale of ordinary shares, net of issuance costs		81,091,141		—		28,174,993		3,885,509
Proceeds from sale of prefunded warrants, net of issuance costs		30,276,569		93,321		3,750,282		517,188
Proceeds from stock issuance for warrants exercised		21,130,035		—		—		—
Proceeds from issuance of convertible notes		42,014,616		—		—		—
Capital contribution by non-controlling shareholders		50,000		—		—		—
Net cash provided by (used in) financing activities		394,026,823		(9,999,380)		56,383,273		7,775,609
Effect of exchange rate fluctuation on cash and restricted cash		224,365		10,275,148		27,688,659		3,818,441
Net increase (decrease) in cash and restricted cash		313,662,066		(26,300,153)		(212,841,072)		(29,352,126)
Cash and restricted cash at beginning of year		30,336,504		343,998,570		317,698,417		43,812,615
Cash and restricted cash at end of year	¥	343,998,570	¥	317,698,417	¥	104,857,345	$	14,460,489
Supplemental cash flow information
Cash paid during the year for interest	¥	1,682,863	¥	1,427,174	¥	1,200,699	$	165,584
Cash paid during the year for taxes	¥	(98,338)	¥	10,214	¥	18,339	$	2,529
Reconciliation of cash and restricted cash, beginning of year
Cash	¥	30,336,504	¥	343,998,570	¥	316,974,857	¥	43,712,832
Restricted cash		—		—		723,560		99,783
Cash and restricted cash, beginning of year	¥	30,336,504	¥	343,998,570	¥	317,698,417	$	43,812,615
Reconciliation of cash and restricted cash, end of year
Cash	¥	343,998,570	¥	316,974,857	¥	104,125,800	¥	14,359,604
Restricted cash		—		723,560		731,545		100,885
Cash and restricted cash, end of year	¥	343,998,570	¥	317,698,417	¥	104,857,345	$	14,460,489
Non-cash investing and financing activities
Issuance of common stock in exchange of shares of FGS, net of issuance costs	¥	1,689,807	¥	—	¥	—	$	—
Cancellation of common stock issued prior years in exchange of shares of FGS, net of issuance costs	¥	(1,689,807)	¥	—	¥	—	$	—
Issuance of common stock in exchange of shares of Starry, net of issuance costs		27,675,450	¥	—	¥	—	$	—
Cancellation of shares issued to Starry Lab	¥	—	¥	(27,675,450)	¥	—	$	—
Conversion of convertible notes to 9,225,338 shares of ordinary shares	¥	42,435,669	¥	—	¥	—	$	—
Right-of-use assets obtained in exchange for operating lease obligations	¥	7,242,819	¥	937,672	¥	75,182	$	10,368
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement	¥	—	¥	—	¥	62,357	$	8,599
Inventories transferred to and used as fixed assets	¥	302,795	¥	—	¥	(65,456)	$	(9,027)
Receivable for disposal of property and equipment	¥	—	¥	3,000	¥	—	$	—
Capital contribution receivable due from non-controlling Interest	¥	50,000,000	¥	—	¥	—	$	—
Other payable due to non-controlling interest converted into capital contribution	¥	—	¥	1,130,000	¥	—	$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-7

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Organization – Recon Technology, Ltd (the “Company”, “We” or “Our”) was incorporated under the laws of the Cayman Islands on August 21, 2007 as a limited liability company. By far, the Company provides specialized equipment, automation systems, tools, chemicals, outsourcing platform services and field services to energy industry companies mainly in the People’s Republic of China (the “PRC”).

The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), conducts its business through the following PRC legal entities (“Domestic Companies”) that operate in the Chinese energy industry:

1. Beijing BHD Petroleum Technology Co., Ltd. (“BHD”),

2. Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).

The Company has signed Exclusive Technical Consulting Service Agreements with each of the Domestic Companies, and Equity Interest Pledge Agreements and Exclusive Equity Interest Purchase Agreements with their shareholders (collectively the “VIE Agreements”). Pursuant to these VIE Agreements, the Company has the ability to substantially influence each of the Domestic Companies’ daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder approval. The VIE agreements are designed to render the Company as the primary beneficiary of and entitle the Company of rights to consolidate each Domestic Company for accounting purposes. We believe that the Domestic Companies should be treated as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation and we are regarded as the primary beneficiary of the VIEs.

On February 21, 2019, the Company’s board of directors approved transferring the VIEs and VIE-controlled companies from Jining Recon Technology Ltd. (“Recon-JN”) to Recon-BJ. At the time, both Recon-JN and Recon-BJ were the Company’s wholly owned subsidiaries in China. On April 1, 2019, the Company completed the VIE transfer process and then completed the dissolution of Recon-JN on April 10, 2019, and subsequently completed the dissolution of Recon Technology Co., Limited (“Recon HK”) on May 15, 2020. The Company does not expect any negative impact of this process on its operations.

On December 17, 2015, Huang Hua BHD Petroleum Equipment Manufacturing Co., Ltd (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the design, assemble and manufacture of hearing equipment.

Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established on May 23, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥27,495,000 ($3,791,734) as of June 30,2023. BHD owned an equity interest of 49% of Gan Su BHD, and the remaining 51% equity interests was owned by an individual shareholder upon incorporation of Gan Su BHD. On September 25, 2017, the individual shareholder became the minority shareholder by transferring 2.0% equity shares to BHD. On April 26, 2021, the minority shareholder of Gan Su BHD transferred 15.4% of her equity interest to BHD. On May 19, 2021, the minority shareholder transferred 3.6% of her equity interest and BHD transferred 15.4% of its equity interest of Gan Su BHD to Nanjing Recon. There was no consideration paid for the transfers, and after the transfers, BHD owns equity an interest of 51% and Nanjing Recon owns an equity interest of 19% of Gan Su BHD, which is focusing on oilfield sewage treatment and oily sludge disposal projects.

Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established on October 16, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥4,200,000 ($579,206) as of June 30, 2023. BHD owned an equity interest of 55% of Qinghai BHD previously; however, based on an agreement signed by the shareholders of Qinghai BHD dated October 23, 2018, each of the other two individual shareholders agreed to reduce 10% of their equity interests. 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. The remaining paid in capital should be contributed by BHD and the other individual shareholder is ¥33,300,000 ($4,827,276) and ¥12,500,000 ($1,812,041) respectively. Based on its charter dated September 29, 2017, the remaining capital will be injected before September 29, 2036.

F-8

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As the energy consumption market opened to private and foreign companies, and online payment technology developed, the Domestic Companies began to invest in the downstream of the oil industry. On December 15, 2017, BHD and Nanjing Recon entered into a subscription agreement with Future Gas Station (Beijing) Technology, Ltd (“FGS”), pursuant to which the Domestic Companies acquired an 8% equity interest in FGS. Established in January 2016, FGS is a service company focusing on providing new technical applications and data operations to gas stations and provides solutions to gas stations to improve their operations and their customers’ experience. On August 21, 2018, the Domestic Companies entered into an investment agreement and a supplemental agreement (collectively, the “Investment Agreement”) with FGS and the other shareholders of FGS. Pursuant to the Investment Agreement, our VIEs’ ownership interest in FGS shall increase from 8% to 43%, in exchange for their investment in FGS for a total amount of ¥10 million in cash and the issuance of 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the other shareholders of FGS with certain conditions. As of June 30, 2019, the Domestic Companies invested an aggregate amount of ¥35,116,707 in FGS and issued 487,057 (27,059 shares post 2024 Reverse Split) restricted shares in total to other shareholders of FGS, and the Domestic Companies’ ownership interest in FGS has increased to 43%. 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. The transaction has been 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. Through the fourth supplemental agreement, the Domestic Companies waived the requirement on FGS’ performance goal about the number of gas stations. Accordingly, the Domestic Companies agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, in exchange of the additional 8% equity ownership of FGS.

The VIE contractual arrangements

The Company’s main operating entities, the Domestic Companies, are controlled through contractual arrangements by the Company.

A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE, because it met the condition under accounting principles generally accepted in the United States of America (“U.S. GAAP”) to consolidate the VIE.

The Company is deemed to have a controlling financial interest in and be the primary beneficiary of the Domestic Companies because it has both of the following characteristics:

● The power to direct activities of the Domestic Companies that most significantly impact such entities’ economic performance, and

● The obligation to absorb losses of, and the right to receive benefits from, the Domestic Companies that could potentially be significant to such entities.

Pursuant to these contractual arrangements, the Domestic Companies shall pay service fees equal to all of their net profit after tax payments to the Company. Accordingly, the Company has the right to absorb 90% of net interest or 100% of net loss of those Domestic Companies for accounting purposes. Such contractual arrangements are designed so that the operations of the Domestic Companies are solely for the benefit of the Company, and therefore the Company must consolidate the Domestic Companies under U.S. GAAP.

F-9

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Risks associated with the VIE structure

The Company believes that the contractual arrangements with the VIEs and the shareholders of the VIEs are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

● revoke the business and operating licenses of the Company’s PRC subsidiary and the VIEs;

● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and the VIEs;

● limit the Company’s business expansion in China by way of entering into contractual arrangements;

● impose fines or other requirements with which the Company’s PRC subsidiary and the VIEs may not be able to comply;

● require the Company or the Company’s PRC subsidiary and the VIEs to restructure the relevant ownership structure or operations; or

● restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China.

The Company’s ability to conduct its businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exercise its rights as the primary beneficiary over the VIEs and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and the VIEs. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs and the VIEs’ subsidiaries. However, when the VIEs and the VIEs’ subsidiaries ever need financial support, the Company or its subsidiaries has, at its option and subject to statutory limits and restrictions, provided financial support to the VIEs and the VIEs’ subsidiaries through loans to the VIEs and the VIEs’ subsidiaries.

Nature of Operations – The Company engages in (1) providing equipment, tools and other components and parts related to oilfield production and other energy industries companies, including simple installations in connection with some projects; (2) services to improve production and efficiency of exploited oil wells, (3) developing and selling its own specialized industrial automation control and information solutions, (4) design, test and implement solution of sewage and oily sludge treatment, production and sales of related integrated equipment and project services, and (5) development, upgrading and maintenance of the online operation and cooperation platform of gas stations, marketing and promotion services, etc.

Impact of COVID-19 - In January 2020, the World Health Organization declared the COVID-19 outbreak a global health emergency as the coronavirus outbreak continued to spread beyond China. In compliance with the government health emergency rules in place, the Company temporarily closed offices in varies provinces in China and ceased production operations since Chinese New Year. The Company gradually resumed operation and production since March 2020. For fiscal year 2023, either the Company or its clients’ operations occasionally affected by regional outbreaks, causing some of its business is still not return to prior level. In early December 2022, China announced a nationwide loosening of its zero-covid policy, and the country faced a wave in infections after the lifting of these restrictions. Although, the spread of the COVID-19 appeared to be under control currently, the extent of the future impact of COVID-19 is still highly uncertain and cannot be predicted. In short term, the Company’s business was affected negatively, and collection of receivables were also affected. However, at this stage, the Company doesn’t expect a significant impact on the Company’s operations and financial results in a long run.

F-10

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and are expressed in United States dollars (“US dollars”).

Principles of Consolidation - The consolidated financial statements include the accounts of the Company, all the subsidiaries, VIEs and subsidiaries of VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.

Variable Interest Entities - 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. 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. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.

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.

Currency Translation - The Company’s functional currency is US dollars and the consolidated financial statements have been expressed in Chinese Yuan (“RMB”) as RMB is the Company’s reporting currency. The consolidated financial statements as of and for the year ended June 30, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.2513 = US$1.00, the approximate exchange rate prevailing on June 30, 2023. These translated U.S. dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into US dollars.

Estimates and Assumptions - The preparation of the consolidated financial statements in conformity with U.S. 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 are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for credit losses related to accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, goodwill and investment in unconsolidated entity, the discount rate for lease and investment, valuation of the convertible notes, price purchase allocation for business combination and the fair value of share-based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.

The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for credit losses related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. 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.

F-11

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fair Values of Financial Instruments - The U.S. 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 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.

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.

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. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

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 of the long-term borrowings due to related party approximate its fair value because the stated interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable credit risk and maturities.

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

Restricted cash - Restricted cash represents funds set aside and placed with the bank and serves as the security deposit which is not available to fund general liquidity needs of the Company.

Short-term investments - Short-term investments include wealth management products, which are certain deposits with fixed interest rates and the principal are guaranteed by the financial institutions. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities within one year. The interest earned is recognized in the consolidated statements of operations and comprehensive income (loss) as interest income. As of June 30, 2022 and 2023, the Company had short-term investments balance of ¥nil and ¥184.2 million ($25.4 million), including accrued interests of ¥nil and ¥2.9 million ($400,198), respectively.

Accounts Receivables, 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. In July 2020, the Company adopted ASU 2016-13, Topics 326-Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, as its accounting standard for its accounts receivable and other receivables. Other receivables and loan to third parties arise from transactions with non-trade customers.

F-12

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of July 1, 2020. Accounts receivable, other receivables and loan to third parties are recognized and carried at carrying amount less an allowance for credit loss, if any. 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, the potential impact of the COVID-19 pandemic on our customers businesses and their ability to pay their accounts receivable, other receivables and loan to third parties. 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, 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. The net recovery of provision for credit loss for the year ended June 30, 2023 increased by approximately ¥7.3 million ($1.0 million) from the year ended June 30, 2022.

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. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company considers in determining whether to discontinue sales, record as contra revenue or allowance for credit losses:

● the oil price and fluctuation of the overall oil industry;

● the customer fails to comply with its payment schedule;

● the customer is in serious financial difficulty;

● a significant dispute with the customer has occurred regarding job progress or other matters;

● the customer breaches any of the contractual obligations;

● the customer appears to be financially distressed due to economic or legal factors;

● the business between the customer and the Company is not active; and

● other objective evidence indicates non-collectability of the accounts receivable, other receivables and loan to third parties.

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.

Notes Receivable - Notes receivable represent short-term notes receivable the Company receives from its customers as payment for amounts owed to the Company in normal course of business operation. The notes receivable are issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally ranges from three to six months from the date of issuance.

Purchase Advances, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

F-13

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Inventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Market value of the inventories is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.

Property and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.

Items	Useful life
Motor vehicles	3-5 years
Office equipment and fixtures	2-5 years
Production equipment, including:
Equipment	10 years
Utilities and Facilities	20 years
Leasehold improvement	Lesser of useful life and lease term

Construction in progress includes property and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognized impairment loss. Construction in progress is classified to the appropriate category of property and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment. Impairment loss on goodwill was ¥nil, ¥2,266,893 and ¥4,730,002 ($652,297) for the years ended June 30, 2021, 2022 and 2023, respectively.

F-14

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Impairment for the long-lived assets was ¥768,312, ¥nil and ¥6,259,124 ($863,173) for the years ended June 30, 2021, 2022 and 2023, respectively.

Long-term Investments - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance requires modified retrospective application to all outstanding instruments for fiscal years beginning after December 15, 2017, with a cumulative effect adjustment recorded to opening accumulated deficit as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value would be applied prospectively. The Company adopted the new financial instruments accounting standard from July 1, 2018.

-      Equity Investments with Readily Determinable Fair Values - Equity investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements.

-      Equity Investments without Readily Determinable Fair Values - After the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying value of the equity investments in current earnings. Changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a “reasonable effort” to identify price changes that are known or that can reasonably be known.

-      Equity Investments Accounted for Using the Equity Method - The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately held entities, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

F-15

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the years ended June 30, 2021, 2022 and 2023. The Company recorded a ¥266,707 investment loss, ¥15,411 investment income and nil investment income on its equity method investment in unconsolidated entities during the years ended June 30, 2021, 2022 and 2023, respectively.

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

Non-controlling Interests - For the Company’s majority-owned subsidiaries, VIEs and subsidiaries of VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operation and comprehensive income (loss) to distinguish the interests from that of the Company.

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 core principle underlying the new revenue recognition Accounting Standards Update (“ASU”) is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. 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.

Disaggregation of Revenue

Revenue are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following items represent the Company’s revenue disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.

The Company’s disaggregation of revenue for the years ended June 30, 2021, 2022 and 2023 is disclosed in Note 25.

F-16

RECON TECHNOLOGY, LTD

NOTES TO THE 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. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.

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. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.

Oilfield Environmental Protection Service

The Company provides wastewater treatment products and related service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue when products are delivered, on-site assistance services rendered, and acceptance reports are signed off by customers. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

The Company provides oily sludge disposal and treatment services to oilfield companies and generates revenue from treatment services of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using output method, based on the percentage-of-completion method. 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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. 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. 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. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.

F-17

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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
	2022		2023		2023
	RMB		RMB		US Dollars
Contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386
Contract liabilities	¥	2,107,277	¥	2,748,365	$	379,017

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. 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.

-      Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients’ initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client’s individual project construction arrangement), the Company records revenue based on the contract or the final clients’ acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.

Contract Liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. 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 recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. 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. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.

F-18

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL 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). Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. 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, 2023. The amount of revenue recognized during the years ended June 30, 2021, 2022 and 2023 that was previously included within contract liability balances was ¥1,899,561, ¥7,390,276 and ¥1,901,277 ($262,198), respectively.

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.

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. As the Company’s contracts are majorly less than one year in length, consideration will not be adjusted. For the Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts. There are also some new contracts that will not be completed within one year from year 2022, the Company did calculation and the amount was not material as end of this fiscal year.

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 has elected to recognize compensation expenses using the valuation model estimated at the grant date based on the award’s fair value.

Research and Development Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥444,824, ¥537,371 and ¥789,932 ($108,937) for the years ended June 30, 2021, 2022 and 2023, respectively.

Leases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces and land use rights, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of June 30, 2022 and 2023.

F-19

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2022 and 2023.

As of June 30, 2023, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.

Comprehensive Income (Loss) - Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$ to RMB is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

Earnings (Loss) per Share - Earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of Ordinary Shares outstanding. Diluted EPS are computed by dividing net income (loss) by the weighted-average number of Ordinary Shares and dilutive potential Ordinary Share equivalents outstanding. Potentially dilutive Ordinary Shares consist of Ordinary Shares issuable upon the conversion of ordinary share options, restricted shares and warrants (using the treasury share method).

The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2021, 2022 and 2023:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Numerator:
Net income (loss) attributable to Recon Technology, Ltd	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Denominator:
Weighted-average number of ordinary shares outstanding – basic*		760,116		1,721,529		2,157,158		2,157,158
Class A Ordinary Shares*		760,116		1,612,427		1,880,065		1,880,065
Class B Ordinary Shares**		—		109,102		277,093		277,093
Outstanding options/warrants*		584,571		585,357		1,115,088		1,115,088
Potentially dilutive shares from outstanding options/warrants		—		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		760,116		1,721,529		2,157,158		2,157,158
Earnings (loss) per share – basic and diluted*	¥	(30.04)	¥	55.52	¥	(27.43)	$	(3.78)

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

** The Class B Ordinary Shares were not subjected to reverse stock split, and each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof, so the weighted average number of Class B Ordinary Shares is calculated on a one-for-eighteen basis of issued and outstanding Class B Ordinary Shares.

F-20

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Warrants - The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Class A Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

Reclassification - Certain prior year amounts related to land use rights on the balance sheets and cash flows statements had been reclassified to conform to the current period presentation. These reclassifications have no effect on the results of operations previously reported.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Accounts receivable	¥	27,206,752	¥	27,606,257	$	3,807,077
Allowance for credit losses		(4,628,772)		(152,842)		(21,078)
Total third-parties, net	¥	22,577,980	¥	27,453,415	$	3,785,999

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties- long-term	RMB		RMB		US Dollars
Accounts receivable	¥	4,983,698	¥	842,607	$	116,201
Allowance for credit losses		(4,983,698)		(842,607)		(116,201)
Total third-parties, net	¥	—	¥	—	$	—

Provision for credit losses of accounts receivable due from third parties was ¥3,730,606 and ¥153,329 for the years ended June 30, 2021 and 2022, respectively. Net recovery of provision for credit losses of accounts receivable due from third parties was ¥8,767,356 ($1,209,073) for the year ended June 30, 2023.

F-21

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The decrease in allowance for credit losses of accounts receivable due from third parties was mainly resulted by the management’s efforts in collection receivables from our customers, and as the date of this report, approximately 54.7%, or ¥15.0 million ($2.1 million) of net outstanding balance as of June 30, 2023 has been collected as of the date of the report.

Movement of allowance for doubtful accounts is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	9,315,427	¥	9,612,470	$	1,325,619
Charge to (reversal of) allowance		153,329		(8,767,356)		(1,209,073)
Foreign currency translation adjustments		143,714		150,335		20,733
Ending balance	¥	9,612,470	¥	995,449	$	137,279

NOTE 4. NOTES RECEIVABLE

Notes receivable represented the non-interest-bearing commercial bills the Company received from the customers for the purpose of collection of sales amounts, which ranged from three to six months from the date of issuance. As of June 30, 2022 and 2023, notes receivable was ¥10,828,308 and ¥3,742,390 ($516,099), respectively. As of June 30, 2022 and 2023, no notes were guaranteed or collateralized. As of the date of this report, 85.0%, or ¥3.2 million ($0.4 million) have been subsequently collected, and the remaining balance is expected to be collected by December 2023.

NOTE 5. OTHER RECEIVABLES, NET

Other receivables, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Business advances to officers and staffs (A)	¥	1,441,807	¥	854,162	$	117,795
Deposits for projects		3,259,236		1,247,992		172,106
VAT recoverable		437,095		690,053		95,163
Others		2,547,520		1,392,126		191,983
Allowance for credit losses		(619,444)		(1,994,960)		(275,118)
Subtotal		7,066,214		2,189,373		301,929
Less: Long term portion (B)		(1,564,381)		(3,640)		(502)
Other receivable - current portion	¥	5,501,833	¥	2,185,733	$	301,427

(A) Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Net recovery of provision for credit losses of other receivables was ¥187,161 and ¥294,644 for the years ended June 30, 2021 and 2022, respectively. Provision for credit losses of other receivables was ¥1,375,516 ($189,692) for the year ended June 30, 2023.

F-22

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Movement of allowance for credit losses is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	918,153	¥	619,444	$	85,426
Charge to (reversal of) allowance		(294,644)		1,375,516		189,692
Less: written off		(4,065)		—		—
Ending balance	¥	619,444	¥	1,994,960	$	275,118

NOTE 6. LOANS TO THIRD PARTIES

Loans to third parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Working fund to third party companies	¥	50,383,822	¥	123,055,874	$	16,970,181
Loans to third parties	¥	50,383,822	¥	123,055,874	$	16,970,181

Loans to third parties are mainly used for short-term funding to support the Company’s external business partners and at the same time the Company can earn interest income from these loans. Most of these loans bear interest or no interest and have terms of no more than one year, except one of the loans to third party has term of one and half year. The Company periodically reviewed the loans to third parties as to whether their carrying values remain realizable. The Company believes that the risk associated with the above loans are relatively low based on the evaluation of the creditworthiness of these third-party debtors and the relationships with them. As the date of the report, approximately 8.3%, or ¥10.2 million ($1.4 million) was collected by the Company and the remaining part was expected to be paid in full by end of June 2024.

NOTE 7. CONTRACT COSTS, NET

Contract costs, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Contract costs	¥	37,922,302	¥	52,158,840	$	7,193,033
Allowance for credit losses		(4,063,482)		(2,586,155)		(356,647)
Total contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386

As of June 30, 2023, total contracts costs, net amounted to ¥49,572,685 ($6,836,386), of which 23.2%, or ¥11.5 million ($1.6 million) have been subsequently realized as of the date of the report, and the remaining balance is expected to be utilized by June 2024.

Provision for credit losses of contract was ¥4,647,802 for the year ended June 30, 2021. Net recovery of provision for credit losses of contract cost was ¥552,008 and ¥1,720,095 ($237,212) for the years ended June 30, 2022 and 2023, respectively. As the progress of these contracts was delayed by the COVID-19 pandemic previously, the Company records allowance for credit losses of contract cost according to its general accounting policy. Since the pandemic is relatively under control now, most of our projects has resumed their progress and the contract costs were realized, hence, resulted in a decrease in allowance for credit losses of contract cost. The Company will continue making great efforts to prevent any unrealizable of contract costs from third parties.

F-23

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Movement of allowance for credit losses of contract costs is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	4,548,910	¥	4,063,482	$	560,380
Reversal of allowance		(552,008)		(1,720,095)		(237,212)
Charge to cost of sales		66,580		242,768		33,479
Ending balance	¥	4,063,482	¥	2,586,155	$	356,647

NOTE 8. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Motor vehicles	¥	5,312,274	¥	5,176,175	$	713,827
Office equipment and fixtures		1,442,395		1,440,819		198,698
Production equipment		31,102,055		31,115,843		4,291,071
Leasehold improvement		—		2,260,000		311,668
Total cost		37,856,724		39,992,837		5,515,264
Less: accumulated depreciation		(11,614,250)		(14,297,511)		(1,971,717)
Less: accumulated impairment		(768,312)		(942,462)		(129,971)
Property and equipment, net	¥	25,474,162	¥	24,752,864	$	3,413,576
Construction in progress	¥	239,739	¥	—	$	—

Construction in progress pertains to infrastructure built for the Company’s oily sludge treatment projects.

Depreciation expenses were ¥2,773,122, ¥2,611,854 and ¥2,983,586 ($411,456) for the years ended June 30, 2021, 2022 and 2023, respectively.

Impairment loss for the property and equipment was ¥768,312, ¥nil and ¥174,150 ($24,017) for the years ended June 30, 2021, 2022 and 2023, respectively. As the Company’s certain properties and equipment were not able to generate enough future cashflow. Thus the Company decided to record full impairment of those properties and equipment.

Loss from property and equipment disposal was ¥19,590 and ¥48,628 for the years ended June 30, 2021 and 2022, respectively. Income from property and equipment disposal was ¥12,782 ($1,763) for the year ended June 30, 2023.

NOTE 9 . BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

(U) Step Acquisition of Future Gas Station (Beijing) Technology, Ltd (“FGS”)

On August 21, 2018, the Company entered into a definitive investment agreement and a supplemental agreement (collectively, the “Agreement”) with FGS and the other shareholders of FGS. Following full performance under the Agreement, Recon will own 43% of FGS. As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares of the Company (the “Restricted Shares”) to the other shareholders of FGS within 30 days after FGS finalizes recording the Company’s corresponding interest at the local governmental agency. If FGS does not reach certain performance goals, the Company has the right to cancel all of the Restricted Shares and without further payment. The Restricted Shares are also subject to lock-up period requirements that vary for each of FGS shareholders, from one year to three years following issuance of the Restricted Shares. FGS has finalized recording Recon’s corresponding interest at the local governmental agency, and Recon has issued 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares in total to the other shareholders of FGS in August 2018.

F-24

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On September 24, 2019, the Company signed an extension agreement with FGS and the other shareholders of FGS to postpone the Agreement to provide extra period for FGS to further fulfill the goals mentioned on the supplemental agreement. During the original contract period, FGS adjusted its operation model with an advanced improvement of its mobile applications and business model. Objected user and average Gross Merchandise Volume (“GMV”) of FGS’ mobile applications have been exceeded. FGS will need an extension to deploy its business in more provinces to complete a goal of 200 more gas stations.

On March 17, 2020, the Company signed a new supplemental agreement with FGS and the other shareholders of FGS to extend another 12 months to February 2021 for FGS and its shareholders to fulfill the goals mentioned on the supplemental agreement.

As of December 31, 2020, the Company owned 43% of the equity interests of FGS. The investments are accounted for using the equity method because the Company has significant influence, but no control of FGS.

On February 8, 2021, and pursuant to FGS’ shareholder meeting resolution dated January 13, 2021 (“Acquisition Date”), two of the Company’s subsidiaries entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS, as an exchange for waiver of the requirement on FGS’ performance goal about the number of gas stations and cancellation of the related lock-up terms on the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares of the Company (reflecting the effect of one-for-five reverse share split) issued per the agreement signed on August 21, 2018. FGS failed to complete one of the three goals set up in the investment agreement. As a consequence, the Company shall cancel one third of the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares, which shall be 162,352 (9,020 shares post 2024 Reverse Split) Restricted Shares. According to this new arrangement, the Company waived the goals and cancellation of the shares as a deemed consideration of the 8% equity. Based on the share price $1.61 ($28.98 post 2024 Reverse Split) on January 13, 2021, the fair value of the waived performance goal equals to ¥1,689,807 ($261,667). As a result, the Company owns 51% interest of FGS and this transaction was considered as a step acquisition under ASC 805 “Business Combinations”. A step acquisition gain of ¥979,254 arising from revaluation of previously held equity interest was recognized during the year ended June 30, 2021.

The Company retained independent appraisers to advise management in the determination of the fair value of customers relationship and goodwill. The values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date. The carrying value of other assets and liabilities other than customer relationship and goodwill, are approximate at their fair value as of the Acquisition Date.

F-25

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair values of the identifiable assets and liabilities as at the date of the acquisitions are summarized in the following table:

	RMB		US Dollars
Cash	¥	471,843	$	65,070
Accounts receivable, net		831,049		114,607
Other receivables, net		144,285		19,898
Contract costs, net		75,250		10,377
Prepaid expenses		91,132		12,568
Property and equipment, net		118,130		16,291
Intercompany receivables*		6,850,000		944,658
Intangible assets- customer relationship		7,000,000		965,344
Goodwill		6,996,895		964,916
Accounts payable		(1,032,078)		(142,330)
Other payables		(1,273,182)		(175,580)
Other payable- related parties		(479,959)		(66,189)
Deferred revenue		(39,786)		(5,487)
Accrued payroll and employees’ welfare		(1,629,519)		(224,721)
Taxes payable		(64,253)		(8,861)
Deferred tax liability		(1,050,000)		(144,801)
Total	¥	17,009,807	$	2,345,760
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		233,035
Fair value of previously held equity interest		30,530,000		4,210,280
Non-controlling interest		34,790,000		4,797,760
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(6,895,315)
Total	¥	17,009,807	$	2,345,760

*Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

The noncontrolling interest has been recognized at fair value net with subscription receivable on the acquisition date.

Goodwill and intangible assets

The excess of purchase price over the fair value of assets acquired and liabilities assumed of the business acquired was recorded as goodwill. The goodwill is not expected to be deductible for tax purposes. In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2021, 2022 and 2023, the management performed evaluation on the impairment of goodwill and recorded an impairment loss on goodwill of ¥nil, ¥2,266,893 and ¥4,730,002 ($652,297) for the years ended June 30, 2021, 2022 and 2023, respectively.

The identifiable goodwill acquired and the carrying value consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Goodwill	¥	6,996,895	¥	6,996,895	$	964,916
Less: impairment for goodwill		(2,266,893)		(6,996,895)		(964,916)
Goodwill, net	¥	4,730,002	¥	—	$	—

F-26

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of June 30, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
Intangible assets - customer relationship	¥	7,000,000	$	965,344	10
Less: accumulated amortization		(1,750,000)		(241,336)
Less: impairment		(5,250,000)		(724,008)
Intangible assets - customer relationship, net	¥	—	$	—

The amortization expense of customer relationship was ¥350,000, ¥700,000 and ¥700,000 ($96,534) for the years ended June 30, 2021, 2022 and 2023, respectively.

Impairment loss for intangible assets - customer relationship was ¥nil, ¥nil and ¥5,250,000 ($724,008) for the years ended June 30, 2021, 2022 and 2023, respectively. As intangible assets - customer relationship was not able to generate enough future cashflow. Thus the Company decided to record full impairment of the intangible assets - customer relationship during the year ended June 30, 2023.

(b) Investment in Starry Blockchain Energy Pte. Ltd. (“Starry”)

On June 3, 2021, Company entered into a share exchange agreement (the “Agreement”) with Starry, an innovative blockchain and sustainable energy technological company, and the controlling shareholders of Starry (the “Starry Controlling Shareholders”) to acquire 30% of the equity interest in Starry. Pursuant to the terms of the Agreement, the signing parties agreed that the value of 30% of the equity interest in Starry is $3,000,000. As consideration to acquire Starry’s 30% equity interest, the Company issued 316,345 unregistered, restricted Class A Ordinary Shares, based on $9.48 per share, the average closing price in the 30 trading days prior to signing this Agreement, to the Starry Controlling Shareholders. Fair value of the shares issued on the investment date, which was June 3, 2021, was ¥27,675,450, or $4,327,600, based on the closing price of $13.80 per share. On November 10, 2021, this investment agreement was terminated based on a mutual decision and the 316,345 unregistered, restricted Class A Ordinary Shares was subsequently cancelled on December 10, 2021. The Company recorded an investment loss of ¥15,411 and an investment income of ¥15,411 during the years ended June 30, 2021 and 2022, respectively. On November 10, 2021, the Company signed a service agreement with Starry, and as the service consideration, the Company issued 500,000 restricted Class A Ordinary Shares to Starry (See Note 18).

NOTE 10. LEASES

The Company leases office spaces and land use rights under non-cancelable operating leases, with terms ranging from one to fifty years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

F-27

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the operating lease related assets and liabilities recorded on the balance sheets:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Rights of use lease assets, net	¥	6,666,759	¥	2,654,900	$	366,127
Operating lease liabilities – current		3,892,774		3,066,146		422,841
Operating lease liabilities – non-current		2,184,635		25,144		3,468
Total operating lease liabilities	¥	6,077,409	¥	3,091,290	$	426,309

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2023:

	June 30,		June 30,
	2022		2023
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	16.18		23.90
Weighted average discount rate	5.0	%	5.0	%

Operating lease costs and short-term lease costs for the year ended June 30, 2021 were ¥2,034,105 and ¥1,291,685, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2022 were ¥3,443,813 and ¥967,247, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2023 were ¥3,354,147 ($462,558) and ¥2,683,860 ($370,121), respectively.

Impairment loss for the ROU was ¥nil, ¥nil and ¥834,974 ($115,148) for the years ended June 30, 2021, 2022 and 2023, respectively. As ROU of FGS was not able to generate enough future cashflow. Thus the Company decided to record full impairment of the ROU during the year ended June 30, 2023.

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2023:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	3,110,862	$	429,008
2025		26,400		3,641
Total lease payments		3,137,262		432,649
Less: imputed interest		(45,972)		(6,340)
Present value of lease liabilities		3,091,290		426,309
Less: operating lease liabilities – current		3,066,146		422,841
Operating lease liabilities – non-current	¥	25,144	$	3,468

F-28

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. OTHER PAYABLES

Other payables consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Professional service fees	¥	2,061,016	¥	2,246,101	$	309,752
Distributors and employees		1,009,307		3,073,289		423,826
Accrued expenses		206,045		200,218		27,611
Others		257,550		299,402		41,289
Total	¥	3,533,918	¥	5,819,010	$	802,478

	June 30,		June 30,		June 30,
	2022		2023		2023
Related Parties	RMB		RMB		US Dollars
Expenses paid by the major shareholders	¥	1,396,419	¥	1,796,309	$	247,723
Due to family members of the owners of BHD and FGS		590,159		545,159		75,181
Due to management staff for costs incurred on behalf of the Company		253,557		250,927		34,604
Total	¥	2,240,135	¥	2,592,395	$	357,508

NOTE 12. TAXES PAYABLE

Taxes payable consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
VAT payable	¥	1,741,972	¥	699,601	$	96,479
Income tax payable		440,030		440,030		60,683
Other taxes payable		28,956		23,375		3,224
Total taxes payable	¥	2,210,958	¥	1,163,006	$	160,386

NOTE 13. BANK LOANS

Short-term bank loans consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beijing Rural Commercial Bank (1)	¥	10,000,000	¥	—	$	—
Bank of Kunlun (2)		—		950,000		131,010
Industry and Commercial Bank of China (“ICBC”) (3)		—		10,000,000		1,379,064
China Construction Bank (4)		—		1,501,481		207,064
Total short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138

(1) On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥5,600,000 as working capital for one year, which will be due on April 12, 2023. On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥4,400,000 as working capital for one year, which will be due on May 12, 2023. All these loan bears a fixed interest rate of 4.6% per annum. These loans are guaranteed by one of the founders of the Company and he also pledged self-owned housing property with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. The loan was full repaid upon maturity.

F-29

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(2) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($399,928) as working capital for eighteen months, with a maturity date of February 29, 2024. The loan has a fixed interest rate of 6.0% per annum. The Company made a withdrawal in an amount of ¥1,000,000 ($137,906) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($6,896). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company also pledged the accounts receivable from the contracts the Company entered into with CNPC as collateral for this loan, and the total value of the contracts are approximately ¥6.5 million (approximately $0.9 million).

(3) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,379,063) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($689,532) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($689,532) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans.

(4) On June 6, 2023, the Company entered into a loan agreement with China Construction Bank to borrow up to ¥1,500,000 ($207,064) as working capital for one year, with a maturity date of June 6, 2024. The loan has a fixed interest rate of 3.95% per annum.

Interest expense for the short-term bank loan was ¥602,124, ¥486,757 and ¥416,481 ($57,435) for the years ended June 30, 2021, 2022 and 2023, respectively.

NOTE 14. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Short-term borrowings due to related parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Short-term borrowings due to related parties:	RMB		RMB		US Dollars
Short-term borrowing from a founder, 4.35% annual interest, due on November 17, 2022*	¥	4,006,767	¥	—	$	—
Short-term borrowing from a founder, 4.35% annual interest, due on December 26, 2022*		5,002,389		—		—
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023		—		10,004,055		1,379,622
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024		—		4,993,950		688,697
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024		—		5,020,217		692,320
Total short-term borrowings due to related parties	¥	9,009,156	¥	20,018,222	$	2,760,639

*    The Company repaid the loans in full on maturity date.

No short-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2022 and 2023.

Interest expense for short-term borrowings due to related parties were ¥ 433,281, ¥ 397,468 and ¥ 326,893 ($45,081) for the years ended June 30, 2021, 2022 and 2023, respectively.

F-30

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. LONG-TERM BORROWINGS DUE TO RELATED PARTY

Long-term borrowings due to related party consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Long-term borrowings due to related party:	RMB		RMB		US Dollars
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.	¥	6,510,606	¥	—	$	—
Less: current portion		(999,530)		—		—
Total long-term borrowings due to related party	¥	5,511,076	¥	—	$	—

No long-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2022 and 2023. The long-term loan was converted to a short-term loan due from related parties for lower interest rate during the year ended June 30, 2023 that is due on June 4, 2024.

Interest expense for long-term borrowings due to related party were ¥ 693,641, ¥617,611 and ¥472,593 ($65,174) for the years ended June 30, 2021, 2022 and 2023, respectively.

NOTE 16. CLASS A ORDINARY SHARES

Share offering

On December 10, 2019, the Company’s Board approved to effect a one-for-five reverse share split of its Class A Ordinary Shares (the “2019 Reverse Share Split”) with the market effective date of December 27, 2019, such that the number of the Company’s Class A Ordinary Shares is decreased from 100,000,000 to 20,000,000 and the par value of each Class A Ordinary Share is increased from US$0.0185 to US$0.0925 (¥0.62) (US$ 1.67 post 2024 Reverse Split). As a result of the Reverse Share Split, each five pre-split Class A Ordinary Shares outstanding were automatically combined and converted to one issued and outstanding Class A Ordinary Share without any action on the part of the shareholder. No fractional Class A Ordinary Shares were issued to any shareholders in connection with the reverse share split. Each shareholder was entitled to receive one Class A Ordinary Share in lieu of the fractional share that would have resulted from the reverse share split. As of December 26, 2019 (immediately prior to the effective date), there were 23,049,639 (1,280,536 shares post 2024 Reverse Split) Class A Ordinary Shares outstanding, and the number of Class A Ordinary Shares outstanding after the Reverse Share Split is 4,611,720 (256,207 shares post 2024 Reverse Split), taking into account of the effect of rounding fractional shares into whole shares. In addition, all options and any other securities of the Company outstanding immediately prior to the Reverse Share Split (to the extent they don’t provide otherwise) will be appropriately adjusted by dividing the number of Class A Ordinary Shares into which the options and other securities are exercisable by 5 and multiplying the exercise price thereof by 5, as a result of the Reverse Share Split.

On April 5, 2021, the Company held its annual general meeting of shareholders (the “Annual Meeting”) for the fiscal year ended June 30, 2020. At the Annual Meeting, the Company’s shareholders approved a special resolution that the authorized share capital of the Company be amended from US$1,850,000 divided into 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to US$15,725,000 divided into 150,000,000 (8,333,333 shares post 2024 Reverse Split) Class A Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) (US$ 1.67 post 2024 Reverse Split) each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) each. The change from Ordinary Shares to Class A Ordinary Shares is reflected with the NASDAQ Capital Market and in the marketplace at the open of business on April 12, 2021, whereupon the Class A Ordinary Shares began trading. The Company’s Class A Ordinary Shares will continue to trade on the NASDAQ Capital Market under the symbol “RCON” and under the CUSIP Number of G7415M124. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall be entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

F-31

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On June 14, 2021, the Company and certain institutional investors (the “Purchasers”) entered into that certain securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 6,014,102 (334,117 shares post 2024 Reverse Split) Class A Ordinary Shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share and 2,800,000 (155,556 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase Class A Ordinary Shares in a registered direct offering, and warrants to purchase up to 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $55.0 million before deducting the placement agent’s fees and other offering expenses in an aggregate amount of ¥30,408,264, or $4.7 million.

On March 15, 2023, the Company and certain institutional investors (the “Purchasers”) entered into that certain securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers 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 and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase Class A 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.

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of June 30, 2023:

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	81,667	$	0.18	5.46
Issued	—		—	—
Forfeited	—		—	—
Exercised	(81,667)	$	0.18	—
Expired	—		—	—
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22

Appropriated Retained Earnings

According to the Memorandum and Articles of Association, the Company is required to transfer a certain portion of its net profit, as determined under PRC accounting regulations, from current net income to the statutory reserve fund. In accordance with the PRC Company Law, companies are required to transfer 10% of their profit after tax, as determined in accordance with PRC accounting standards and regulations, to the statutory reserves until such reserves reach 50% of the registered capital or paid-in capital of the companies. As of June 30, 2022 and 2023, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($572,163), respectively.

F-32

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

In May and June 2020, the Company consummated two offerings. In connection with the offering, the Company issued to the investors warrants to purchase an aggregate of 911,112 (50,617 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $2.25 ($40.50 post 2024 Reverse Split) per Class A Ordinary Share, which was amended to $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share on the second offering on June 30, 2020. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 26, 2020 and expire on November 25, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,689,389. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.40%), (2) expected warrant life of 5.5 years, (3) expected volatility of 99.50%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised and all the underlying shares were issued.

In June 2020, the Company issued to the investors warrants to purchase an aggregate of 1,680,000 (93,333 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on June 30, 2020 and expire on December 30, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,639,333. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.35%), (2) expected warrant life of 5.5 years, (3) expected volatility of 104.26%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised.

In June 2021, the Company issued to some institutional investors warrants to purchase an aggregate of up to 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2021”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $34,860,000. During the year ended June 30, 2023, the exercise price of warrants to purchase an aggregate of up to 7,950,769 (441,710 shares post 2024 Reverse Split) Class A Ordinary Shares was adjusted to $0.80 ($14.40 post 2024 Reverse Split), and the exercise price of the remaining warrants to purchase an aggregate of up to 863,333 (47,963 shares post 2024 Reverse Split) Class A Ordinary Shares remained at $6.24 ($112.32 post 2024 Reverse Split). As of June 30, 2022 and 2023, the fair value of the warrant liability of the Warrant 2021 was $2,490,000 and $1,930,000 (¥13,995,009). During the years ended June 30, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $27,030,000 and $560,000, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	June 30,					June 30,
Input	2023					2022
Number of warrants	47,963		$	441,710		$	489,673
Share price	0.34		$	0.34		$	0.66
Risk-free interest rate	4.41	%		4.41	%		3.00	%
Volatility	127	%		127	%		109	%
Exercise price	112.32			14.40			112.32
Warrant life	3.47 years			3.47 years			4.46 years

On March 15, 2023, the Company issued to some institutional investors warrants to purchase an aggregate of up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2023”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $2,750,000. As of June 30, 2023, the fair value of the warrant liability of the Warrant 2023 was $2,430,000 (¥17,620,659). During the years ended June 30, 2023, there was change in fair value of warrant liability in an aggregate amount of $320,000, respectively.

F-33

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The key inputs into the Black-Scholes model were as follows at their measurement dates:

				March 15, 2023
	June 30,			(Initial
Input	2023			measurement)
Number of warrants	555,694		$	555,694
Share price	0.34		$	0.37
Risk-free interest rate	3.59	%		3.58	%
Volatility	110	%		110	%
Exercise price	14.40			14.40
Warrant life	5.22 years			5.50 years

The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2022 and 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

			Quoted Prices In		Significant Other		Significant Other
	June 30,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	2,490,000	$	—	$	—	$	2,490,000

			Quoted Prices In		Significant Other		Significant Other
		June 30,	Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	4,360,000	$	—	$	—	$	4,360,000

The following table summarizes the Company’s Warrants activities and status of Warrants as of June 30, 2023:

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	489,673	$	112.32	5.46
Issued	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30 2023	1,045,367	$	18.90	4.40

F-34

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18. SHARE-BASED COMPENSATION

Share-Based Awards Plan

The following is a summary of the share options activity:

		Weighted
		Average
		Exercise Price
Share Options	Shares	Per Share
Outstanding as of June 30, 2021	6,084	$	180.36
Granted	—		—
Forfeited	(1,640)		266.40
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50

The following is a summary of the status of options outstanding and exercisable as of June 30, 2023:

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price		Number	life (Years)	Price		Number	life (Years)
$	148.50	4,444	1.59	$	148.50	4,444	1.59
		4,444

The Share-based compensation expense recorded for stock options granted were all ¥Nil for the years ended June 30, 2021, 2022 and 2023, respectively. No unrecognized share-based compensation for stock options as of June 30, 2023.

Restricted Shares to Senior Management

As of June 30, 2023, the Company has granted restricted Class A Ordinary Shares to senior management and employees as follows:

On August 21, 2018, the Company granted 391,200 (21,733 shares post 2024 Reverse Split) restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $2,523,240 based on the closing share price $6.45 ($116.10 post 2024 Reverse Split) at August 21, 2018. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. All granted shares under this plan are fully vested on September 3, 2021.

On February 28, 2022, the Company granted 1,642,331 (91,241 shares post 2024 Reverse Split) Class A Ordinary Shares to its employees as compensation cost for awards. The fair value of the restricted shares was $1,708,024 based on the closing share price $1.04 ($18.72 post 2024 Reverse Split) at February 28, 2022. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. As of June 30, 2023, 547,444 (30,414 shares post 2024 Reverse Split) shares were vested and the remaining 1,094,887 (60,827 shares post 2024 Reverse Split) shares will not be vested until February 28, 2025.

F-35

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On March 15, 2023, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to its employee as compensation for service to the Company on new business exploration. The service period was six months from the date of grant. All of the restricted shares were issued on March 15, 2023 and the granted shares under this plan will not be vested until September15, 2023.

188,662 (10,481 shares post 2024 Reverse Split), 128,672 (7,148 shares post 2024 Reverse Split) and 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A restricted shares were issued and outstanding for the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

As of June 30, 2023, the Company has granted restricted Class B Ordinary Shares to senior management as follows:

On December 5, 2021, the Company granted 2,500,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $4,175,000 based on the fair value of the share price $1.67 at December 5, 2021. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on December 5, 2021.

On February 28, 2022, the Company granted 1,600,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $1,694,000 based on the fair value of share price $1.06 at February 28, 2022. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on February 28, 2022.

On March 9, 2023, the Company granted 3,000,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $3,025,000 based on the fair value of share price $1.01 at March 9, 2023. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on March 9, 2023.

Nil, 4,100,000 and 3,000,000 restricted Class B restricted shares were issued and outstanding during the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for management was ¥6,140,037, ¥39,263,485 and ¥26,191,707 ($3,612,002) for the years ended June 30, 2021, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of June 30, 2023 was approximately ¥8.0 million ($1.1 million), which is expected to be recognized over a weighted average period of approximately 1.46 years.

Restricted Shares for services

As of June 30, 2023, the Company has granted restricted Class A Ordinary Shares to consultant as follows:

On November 10, 2021, the Company signed a service agreement with Starry. As the service consideration, the Company should issue 500,000 (27,778 shares post 2024 Reverse Split) restricted Class A Ordinary Shares which vested in equal monthly amounts through the end of December 31, 2021. Half of the restricted Class A Ordinary Shares was valued based on the closing share price of $1.60 ($28.80 post 2024 Reverse Split) on December 10, 2021 and the other half was valued based on the closing share price of $1.31 ($23.58 post 2024 Reverse Split) on December 31, 2021. 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued on December 10, 2021 and the remaining 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued in January 2022.

On January 5, 2022, the Company signed a consulting agreement with Lintec Information Ltd (the “Consultant”). As the service consideration, the Company issued 1,050,000 (58,333 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $1,354,500 based on the closing share price of $1.29 ($23.22 post 2024 Reverse Split) on January 5, 2022 to the Consultant as payment for being the Company’s investment and financial advisor for a period of one year. The vesting period of these shares was one year from the date of contract. All of the restricted shares were issued under this plan on January 5, 2022 and all of the granted shares under this plan was vested as of June 30, 2023.

F-36

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On March 15, 2023, the Company signed a consulting agreement with some business consultants (the “Consultants”). As the service consideration, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to the Consultants as compensation for acting as advisors to the Company on new business exploration. The vesting period of these shares was six months from the date of contract. All of the restricted shares were issued under this plan on March 15, 2023 and the granted shares under this plan will not be vested until September15, 2023.

Nil, 1,550,000 (86,111 shares post 2024 Reverse Split) and 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A restricted shares were issued and outstanding during the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for service was ¥nil, ¥8,935,920 and ¥5,805,840 ($800,662) for the years ended June 30, 2021, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for service as of June 30, 2023 was ¥1,124,546 ($155,082), which is expected to be recognized over a weighted average period of approximately 0.21 years.

Following is a summary of the restricted shares granted:

Restricted share grants	Shares
Non-vested as of June 30, 2021	7,244
Granted	405,130
Vested	(291,967)
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938

The following is a summary of the status of restricted share at June 30, 2023:

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share		Number	Period (Years)
$	18.72	60,827	1.67
	6.66	111,111	0.21
		171,938

NOTE 19. INCOME TAX

The Company is not subject to any income taxes in the United States or the Cayman Islands and had minimal operations in jurisdictions other than the PRC. BHD and Nanjing Recon are subject to PRC’s income taxes as PRC domestic companies. The Company follows Implementing Rules for the Enterprise Income Tax Law (“Implementing Rules”), which took effect on January 1, 2008 and unified the income tax rate for domestic-invested and foreign-invested enterprises at 25%.

Nanjing Recon was approved as a government-certified high-technology company and is subject to a reduced income tax rate of 15% through November 30, 2019. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as November 22, 2019 and expired on November 22, 2022. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as October 12, 2022 and will expire on October 12, 2025.

F-37

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As approved by the domestic tax authority in the PRC, BHD was recognized as a government-certified high-technology company on November 25, 2009 and is subject to a reduced income tax rate of 15% through November 25, 2018. BHD reapplied for a high-technology company certificate, and the new certificate was approved as October 31, 2018 and expired on October 31, 2021. BHD reapplied for a high-technology company certificate, and the new certificate was approved as December 17, 2021 and will expire on December 17, 2024.

Income (loss) before provision for income taxes consisted of:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Outside China areas	¥	4,011,449	¥	113,741,972	¥	(34,038,460)	$	(4,694,118)
China		(30,402,528)		(20,066,451)		(27,419,593)		(3,781,335)
Total	¥	(26,391,079)	¥	93,675,521	¥	(61,458,053)	$	(8,475,453)

Deferred tax assets, net is composed of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Deferred tax assets:
Allowance for credit losses	¥	1,781,573	¥	1,019,592	$	140,608
Impairment for inventory		59,913		90,322		12,456
Net operating loss carryforwards		16,511,047		23,290,731		3,211,938
Subtotal		18,352,533		24,400,645		3,365,002
Less: Valuation allowance		(17,193,874)		(24,107,246)		(3,324,540)
Total deferred tax assets, net		1,158,659		293,399		40,462
Deferred tax liabilities:				​		​
Accelerated amortization of intangible assets		(119,271)		(146,511)		(20,205)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,257)
Recognition of customer relationship arising from business combinations		(892,500)		—		—
Total deferred tax liabilities		(1,158,659)		(293,399)		(40,462)
Deferred tax assets, net	¥	—	¥	—	$	—

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred a cumulative net operating loss (“NOL”) which may reduce future corporate taxable income. As of June 30, 2022, the cumulative NOL was approximately ¥94.6 million. During the year ended June 30, 2023, the Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred an additional NOL carryforwards of approximately ¥39.0 million ($5.4 million), resulting in a cumulative NOL carryforwards of approximately ¥133.6 million ($18.4 million) as of June 30, 2023.
​

The NOL will expire over the next five years as follows:

Twelve months ending June 30,		RMB	US Dollars
2024	¥	13,146,922	$	1,813,043
2025		10,484,902		1,445,934
2026		19,617,124		2,705,325
2027		32,533,742		4,486,608
2028		57,811,664		7,972,593
Total	¥	133,594,354	$	18,423,503

F-38

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Following is a reconciliation of income tax expense (benefit) at the effective rate to income tax at the calculated statutory rates:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Income tax (benefits) expenses calculated at PRC statutory rates	¥	(6,597,770)	¥	23,418,880	¥	(15,364,513)	$	(2,118,863)
Nondeductible expenses and others		338,058		263,655		539,247		74,366
Effect of tax rate differential		626,245		(24,061,020)		7,949,048		1,096,224
Benefit of revenue exempted from enterprise income tax		(57,250)		(1,799)		(18,814)		(2,595)
Change in valuation allowances		5,264,804		(233,590)		6,913,371		953,397
Tax refund		(98,338)		—		—		—
Income tax expenses (benefit)	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

The Company’s income tax expense (benefit) is comprised of the following:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Current income tax provision (benefit)	¥	(98,338)	¥	10,214	¥	18,339	$	2,529
Deferred income tax benefit		(425,913)		(624,088)		—		—
Expense (benefit) for income tax	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

F-39

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20. NON-CONTROLLING INTEREST

Non-controlling interest consisted of the following:

	As of June 30, 2022
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	993,771
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(7,296,511)
Unappropriated retained earnings (deficit)		3,477,493		3,616,001		(4,972,129)		(1,520,225)		(893,405)		(292,265)		(43,635)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,584)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		5,194,303
Total non-controlling interests	¥	5,109,643	¥	3,804,148	¥	(167,129)	¥	(1,520,225)		(14,973,405)	¥	(7,746,968)	$	(1,156,656)

	As of June 30, 2023
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

F-40

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 21. CONCENTRATIONS

Credit risk

As of June 30, 2022 and 2023, approximately ¥20.3 million and ¥45.5 million ($6.3 million) of the Company’s cash was on deposit at financial institutions in the PRC, respectively. Per PRC regulations, the maximum insured bank deposit amount is RMB500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥17.8 million and ¥40.0 million ($5.5 million) as of June 30, 2022 and 2023, respectively. As of June 30, 2022 and 2023, approximately ¥297.2 million and ¥240.3 million ($33.1 million) of the Company’s cash was on deposit at financial institutions in the Hong Kong, respectively. Per Hong Kong regulations, the maximum insured bank deposit amount is HKD 500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥296.8 million and ¥238.8 million ($32.9 million) as of June 30, 2022 and 2023, respectively.

Customer concentration risk

For the year ended June 30, 2021, CNPC represented 39%, SINOPEC represented 22% of the Company’s revenue, respectively. At June 30, 2021, CNPC accounted for 29%, SINOPEC represented 13% and another two customers accounted for 19% and 14% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2022, CNPC represented 50%, SINOPEC represented 28%, and another customer represented 10% of the Company’s total revenue, respectively. At June 30, 2022, CNPC accounted for 49%, SINOPEC represented 22% and another customer accounted for 14% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2023, CNPC represented 43% and SINOPEC represented 32% of the Company’s total revenue, respectively. At June 30, 2023, CNPC accounted for 31%, SINOPEC represented 27% and another two customers accounted for 11% and 10% of the Company’s accounts receivable, net, respectively.

NOTE 22. COMMITMENTS AND CONTINGENCY

(a)   Contingency

Severance payments

The Labor Contract Law of the PRC requires employers to assure the liability of severance payments if employees are terminated and have been working for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month of severance pay for each year of the service provided by the employees. As of June 30, 2023, the Company estimated its severance payments of approximately ¥7.0 million ($1.0 million) which has not been reflected in its consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future.

Legal contingencies

On December 1, 2021, Henan Puxinfangfu Construction Engineering Co., Ltd. (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Suzhou District, Jiuquan City, Gansu Province (the “Court”) against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. The Plaintiff also applied for property preservation before litigation to preserve the bank account of the Company. On December 1, 2021, the Court issued a judgement and approximately ¥0.7 million ($0.1 million) of Gan Su BHD’s bank balance was became restricted for one year. On April 7, 2022 and June 9, 2022, the Court issued first and second judgement which stated that the case to transfer to People’s Court of Yumen for jurisdiction. As of June 30, 2023, Gan Su BHD recorded ¥1.82 million (approximately $0.3 million) account payable due to the Plaintiff, and the compensation claimed by the Plaintiff was approximately ¥2.0 million (approximately $0.3 million). On January 9, 2023, the People’s Court of Yumen City, Gansu Province issued its civil judgement, pursuant to which the Company is required to pay the Plaintiff a settlement payment totaling approximately ¥1.80 million (approximately $0.3 million), including the money compensation and interests. As of the date of this report, the Company has paid ¥855,197 (approximately $117,937) to the Plaintiff.

F-41

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On April 30, 2023, Jiuquan Third Construction and Installation Engineering Company (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Yumen, Jiuquan City, Gansu Province against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. On August 25, 2023, the Company entered into a Settlement Agreement with the Plaintiff, pursuant to which the Company needs to pay the Plaintiff a total sum of ¥2.8 million (approximately $0.38 million) as settlement payment, including the money compensation and interests. Among which, ¥1.0 million (approximately $0.14 million) is required to be paid by September 25, 2023, ¥1.0 million (approximately $0.14 million) is required to be paid by October 25, 2023, and the remaining balance is required to be paid by November 25, 2023. As of the date of this report, the Company has paid ¥1.0 million (approximately $0.14 million) to the Plaintiff.

(b)   Purchase commitment

The total future minimum purchase commitment under the non-cancellable purchase contracts as of June 30, 2023 are payable as follows:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	22,395,958	$	3,088,544
2025		300,000		41,372
2026		150,000		20,686
Total minimum payments required	¥	22,845,958	$	3,150,602

(c) Office Leases Commitment - short term

The Company entered into several non-cancellable operating lease agreements for office spaces. Future payments under such leases were included in lease liabilities as disclosed in Note 10, other than those within under lease agreements within one year which are disclosed as follows as of June 30, 2023:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	336,527	$	46,409
Total	¥	336,527	$	46,409

NOTE 23. RELATED PARTY TRANSACTIONS AND BALANCES

Sales to a related party – sales to a related party consisted of the following:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd. *	¥	85,657	¥	—	¥	—	$	—
Total revenue from a related party	¥	85,657	¥	—	¥	—	$	—

* The noncontrolling shareholder of Gan Su BHD owns 10% interests in Urumqi Yikeli Automatic Control Equipment Co., Ltd.

Prepaid expenses - related parties – prepaid expenses - related parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Founders	¥	275,000	¥	—	$	—
Total prepaid expenses - related parties	¥	275,000	¥	—	$	—

F-42

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Leases from related parties - The Company has various agreements for the lease of office space owned by the founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥94,167 ($12,986) with annual rental expense at ¥1.1 million ($0.16 million).

The details of leases from related parties are as below:

			Monthly Rent		Monthly Rent
Lessee	Lessor	Rent Period	RMB		US Dollars
Nanjing Recon	One of the founders	April 1, 2022 - March 31, 2024	¥	40,000	$	5,516
BHD	One of the founders	January 1, 2023- Dec 31, 2023		31,667		4,367
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,103

As of June 30, 2022, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥765,241 and ¥765,241, respectively.

As of June 30, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥335,976 ($46,333) and ¥335,976 ($46,333), respectively.
​

Guarantee/collateral related parties - The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 13).

NOTE 24. VARIABLE INTEREST ENTITIES

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. 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.

F-43

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary information regarding consolidated VIEs and their subsidiaries is as follows:

	June 30, 2022		June 30, 2023		June 30, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	18,033,666	¥	37,661,118	$	5,092,821
Restricted cash		723,560		731,545		100,885
Notes receivable		10,828,308		3,742,390		516,099
Accounts receivable, net		22,577,980		27,453,415		3,785,999
Inventories, net		3,894,369		6,330,701		873,044
Other receivables, net		5,500,981		11,618,275		1,602,233
Loans to third parties		30,270,563		37,770,188		5,208,747
Purchase advances, net		178,208		1,592,761		219,652
Contract costs, net		33,858,820		49,572,685		6,836,386
Prepaid expenses		165,120		121,329		16,732
Prepaid expenses- related parties		275,000		—		—
Total current assets		126,306,575		176,594,407		24,252,598
		​		​		​
Property and equipment, net		25,474,162		24,752,864		3,413,576
Construction in progress		239,739		—		—
Intangible assets, net		5,950,000		—		—
Long-term other receivables, net		1,564,381		3,640		502
Goodwill		4,730,002		—		—
Operating lease right-of-use assets		6,666,759		2,654,900		366,127
Total Assets	¥	170,931,618	¥	204,005,811	$	28,032,803
LIABILITIES
Short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138
Accounts payable		12,826,108		10,791,721		1,488,246
Other payables		1,469,761		3,904,135		538,405
Other payable- related parties		1,061,081		1,356,915		187,127
Contract liabilities		2,001,277		2,748,361		379,017
Accrued payroll and employees’ welfare		1,213,040		1,048,061		144,534
Intercompany payables*		194,373,010		263,935,922		36,398,428
Taxes payable		2,211,190		1,163,237		160,418
Short-term borrowings - related parties		9,009,156		20,018,222		2,760,639
Long-term borrowings - related party - current portion		999,530		—		—
Operating lease liabilities - current		3,892,774		3,066,146		422,841
Total current liabilities		239,056,927		320,484,201		44,196,793
Operating lease liabilities - non-current		2,184,635		25,144		3,468
Contract liabilities - non-current		106,000		—		—
Long-term borrowings - related party		5,511,076		—		—
Deferred tax liability		187,972		—		—
Total Liabilities	¥	247,046,610	¥	320,509,345	$	44,200,261

*Intercompany payables are eliminated upon consolidation.

F-44

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The financial performance of VIEs reported in the consolidated statement of operations and comprehensive loss for the year ended June 30, 2021 includes revenue of ¥47,817,378, operating expenses of ¥36,704,840, and net loss of ¥29,407,210. The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income for the year ended June 30, 2022 includes revenue of ¥83,777,571 ($12,508,368), operating expenses of ¥35,725,237 ($5,333,938), and net loss of ¥18,180,305 ($2,714,401). The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income (loss) for the year ended June 30, 2023 includes revenue of ¥67,114,378 ($9,255,496), operating expenses of ¥35,547,439 ($4,902,216), and net loss of ¥26,349,629 ($3,633,780).

NOTE 25. SEGMENT REPORTING

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based on management’s assessment, the Company has determined that it has four operating segments: automation product and software, equipment and accessories, oilfield environmental protection and platform outsourcing services.

The following tables present summary information by segment for the years ended June 30, 2021, 2022 and 2023, respectively:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Automation product and software	¥	18,535,166	¥	31,944,055	¥	26,628,216	$	3,672,199
Equipment and accessories		15,791,623		17,159,381		16,248,197		2,240,729
Oilfield environmental protection		11,043,979		25,335,363		19,116,560		2,636,294
Platform outsourcing services		2,567,807		9,338,772		5,121,405		706,274
Total revenue	¥	47,938,575	¥	83,777,571	¥	67,114,378	$	9,255,496

	For the year ended June 30, 2023
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378
Cost of revenue and related tax		23,610,281		8,945,796		13,955,673		1,735,645		48,247,395
Gross profit	¥	3,017,935	¥	7,302,401	¥	5,160,887	¥	3,385,760	¥	18,866,983
Depreciation and amortization	¥	857,332	¥	689,552	¥	2,077,165	¥	59,537	¥	3,683,586
Total capital expenditures	¥	803,311	¥	46,681	¥	75,728	¥	14,953	¥	940,673
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,640,699	¥	16,248,197	¥	19,116,560	¥	4,470,462	¥	58,475,918
Services rendered over time		7,987,517		—		—		650,943		8,638,460
Total revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378

F-45

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

	For the year ended June 30, 2022
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571
Cost of revenue and related tax		29,824,014		10,479,615		20,222,446		3,826,759		64,352,834
Gross profit	¥	2,120,041	¥	6,679,766	¥	5,112,917	¥	5,512,013	¥	19,424,737
Depreciation and amortization	¥	421,619	¥	814,960	¥	2,045,601	¥	57,688	¥	3,339,868
Total capital expenditures	¥	14,823	¥	21,456	¥	768,795	¥	194,578	¥	999,652
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	31,944,055	¥	17,159,381	¥	15,779,825	¥	9,338,772	¥	74,222,033
Services rendered over time		—		—		9,555,538		—		9,555,538
Total revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571

	For the year ended June 30, 2021
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575
Cost of revenue and related tax		19,942,541		11,264,971		8,045,567		1,470,468		40,723,547
Gross profit	¥	(1,407,375)	¥	4,526,652	¥	2,998,412	¥	1,097,339	¥	7,215,028
Depreciation and amortization	¥	277,496	¥	851,612	¥	2,000,952	¥	20,729	¥	3,150,789
Total capital expenditures	¥	26,761	¥	136,224	¥	315,944	¥	43,487	¥	522,416
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,535,166	¥	15,791,623	¥	9,654,418	¥	2,567,807	¥	46,549,014
Services rendered over time		—		—		1,389,561		—		1,389,561
Total revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Total assets:
Automation product and software	¥	147,377,607	¥	167,009,315	$	23,031,642
Equipment, accessories and others		149,876,933		170,809,759		23,555,743
Oilfield environmental protection		107,755,500		107,393,609		14,810,256
Platform outsourcing services		85,232,044		86,611,894		11,944,323
Total assets	¥	490,242,084	¥	531,824,577	$	73,341,964

NOTE 26. SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on October 27, 2023, and the Company has evaluated subsequent events through this date. On October 16, 2023, 1,175,000 pre-funded warrants issued on March 15, 2023 were exercised by the investor Sabby volatility warrant master fund, LTD. and 1,175,000 Class A Ordinary shares were issued and being outstanding.

The hazardous waste operation permit originally held by Gansu BHD expires on July 26, 2023. Gansu BHD is currently renewing this permit.

F-46

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 27. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Pursuant to the requirements of Rules 12-04(a), 5-04(c), and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirements and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and VIEs exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed financial statements for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries and VIEs shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIEs in the form of loans, advances, or cash dividends without the consent of a third party.

The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and the respective profit or loss as “Equity in earnings of subsidiaries and VIEs” on the condensed statements of income.

The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of June 30, 2022 and 2023, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

F-47

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RECON TECHNOLOGY, LTD

PARENT COMPANY BALANCE SHEETS (UNAUDITED)

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
ASSETS
Cash	¥	296,838,959	¥	236,146,589	$	32,566,104
Due from intercompany*		205,224,961		291,525,426		40,203,195
Other current assets		20,364,424		80,036,017		11,037,471
Total Current Assets		522,428,344		607,708,032		83,806,770
Investment in subsidiaries and VIEs		(77,566,835)		(122,920,490)		(16,951,511)
Total Assets	¥	444,861,509	¥	484,787,542	¥	66,855,259
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		7,552,452		3,964,912		546,786
Total Current Liabilities		7,552,452		3,964,912		546,786
		​		​
Warrant liability		16,677,328		31,615,668		4,360,000
Total Liabilities		24,229,780		35,580,580		4,906,786
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
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 2023, respectively**		19,461		26,932		3,714
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 2023, respectively**		2,604		4,693		647
Additional paid-in capital**		516,426,799		580,340,061		80,032,554
Accumulated deficit		(107,124,596)		(166,291,897)		(22,932,701)
Accumulated other comprehensive income		11,307,461		35,127,173		4,844,259
Total Shareholders’ Equity		420,631,729		449,206,962		61,948,473
		​		​		​
Total Liabilities and Shareholders’ Equity	¥	444,861,509	¥	484,787,542	$	66,855,259

* Due from intercompany are eliminated upon consolidation.

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

F-48

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

		For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Revenue	¥	121,197	¥	—	¥	—	$	—
Cost of revenue		97,024		—		—		—
Gross profit		24,173		—		—		—
General and administrative expenses		29,502,464		62,918,622		54,494,219		7,515,097
Provision for credit losses		1,933,986		1,923,382		(4,141,588)		(571,151)
Loss from operations		(31,412,277)		(64,842,004)		(50,352,631)		(6,943,946)
Fair value changes of warrants liability		35,365,792		174,485,575		6,116,000		843,435
Other income		320,235		4,105,116		10,108,783		1,394,065
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries		(27,106,484)		(18,161,892)		(25,039,453)		(3,453,098)
						​		​
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
								​
Foreign currency translation adjustment		(850,895)		9,332,625		23,819,712		3,284,889
Comprehensive income (loss) attributable to the Company	¥	(23,683,629)	¥	104,919,420	¥	(35,347,589)	$	(4,874,655)

F-49

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Adjustments to reconcile net cash flows from operating activities:						​		​
Changes in warrants liabilities		(35,365,792)		(174,485,575)		(6,116,000)		(843,435)
Amortization of offering cost of warrants		12,584,024		—		1,483,306		204,557
Provision for doubtful accounts		1,933,986		1,923,382		(4,141,588)		(571,151)
Restricted shares issued for management and employees		6,140,037		39,263,485		26,191,707		3,612,002
Income (loss) from investment in unconsolidated entity		15,411		(15,411)		—		—
Restricted shares issued for services		—		8,935,919		5,805,840		800,662
Equity in earnings of subsidiaries and VIEs		27,106,484		18,161,892		25,039,453		3,453,098
Other current assets		(474,891)		(111,521)		(8,396,555)		(1,157,938)
Other current liabilities		4,776,846		(5,090,698)		(3,587,540)		(494,744)
						​		​
Net cash used in operating activities		(6,116,629)		(15,831,732)		(22,888,678)		(3,156,493)
Cash flows from investing activities:
Repayments from loans to third parties		1,950,000		166,405,032		32,413,311		4,470,000
Payments made for loans to third parties		(50,288,458)		(137,391,510)		(79,546,761)		(10,970,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(29,505,002)		(55,569,342)		(86,300,464)		(11,901,378)
				​		​		​
Net cash used in investing activities		(77,843,460)		(26,555,820)		(133,433,914)		(18,401,378)
Cash flows from financing activities:
Proceeds from warrants issued with common share		212,051,414		—		17,493,069		2,412,405
Proceeds from sale of common share, net of issuance costs		81,091,141		—		28,174,993		3,885,509
Proceeds from sale of prefunded warrants, net of issuance costs		30,276,569		93,321		3,750,282		517,188
Proceeds from share issuance for warrants exercised		21,130,035		—		—		—
Proceeds from issuance of convertible notes		42,014,616		—		—		—
Net cash provided by financing activities		386,563,775		93,321		49,418,344		6,815,102
						​		​
Effect of exchange rate fluctuation on cash		274,149		14,016,375		46,211,878		6,372,909
				​		​		​
Net increase (decrease) in cash		302,877,835		(28,277,856)		(60,692,370)		(8,369,860)
				​		​		​
Cash, beginning of year		22,238,980		325,116,815		296,838,959		40,935,964
						​		​
Cash, end of year	¥	325,116,815	¥	296,838,959	¥	236,146,589	$	32,566,104
Non-cash investing and financing activities
Issuance of common share in exchange of shares of Starry, net of issuance costs	¥	27,675,450	¥	—	¥	—	$	—
Cancellation of ordinary shares issued to Starry	¥	—	¥	(27,675,450)	¥	—	$	—
Conversion of convertible notes to 9,225,338 shares of ordinary shares	¥	42,435,669	¥	—	¥	—	$	—

F-50

RECON TECHNOLOGY, LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 28. OTHER EVENTS

Reverse stock split

On March 29, 2024, the Company’s shareholders approved to effect a reverse stock split of the Company’s Class A Ordinary Shares at the ratio of one-for-eighteen with the market effective date of May 1, 2024 (the “2024 Reverse Split”). 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 filed an Amended and Restated 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”). As a result of the 2024 Reverse Split, each eighteen pre-split Class A Ordinary Shares outstanding were automatically combined and converted to one issued and outstanding Class A Ordinary Share. No fractional Class A Ordinary Shares were issued to any shareholders in connection with the 2024 Reverse Split. Each shareholder was entitled to receive one Class A Ordinary Shares in lieu of the fractional share that would have resulted from the reverse stock split. As of May 1, 2024 (immediately prior to the effective date), there were 141,703,218 Class A Ordinary Shares outstanding, and the number of Class A Ordinary Shares outstanding after the 2024 Reverse Split is 7,927,132, taking into account of the effect of rounding fractional shares into whole shares. In addition, all Class A Ordinary Shares, options and any other Class A securities of the Company outstanding immediately prior to the 2024 Reverse Split was retroactively applied by dividing the number of ordinary shares into which the options and other securities are exercisable by 18 and multiplying the exercise price thereof by 18, as a result of the 2024 Reverse Split.

All share and earnings per-share information have been retroactively adjusted to reflect the 2024 Reverse-Split and 2024 change in capital structure. The Company had 500,000.000 authorized Class A Ordinary Shares, par value of $0.0001, of which 1,704,766 and 2,306,295 Class A Ordinary Shares were issued and outstanding as of June 30, 2022 and 2023, retrospectively and respectively. The Company had 80,000.000 authorized Class B Ordinary Shares, par value of $0.0001, of which 4,100,000 and 7,100,000 Class B Ordinary Shares were issued and outstanding as of June 30, 2022 and 2023, retrospectively and respectively.

F-51

EX-1.1_5

Exhibit 1.1.5

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS COMPANY

LIMITED BY SHARES

FOURTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF

RECON TECHNOLOGY, LTD

Adopted by Special Resolution on March 29, 2024

1. In these Articles Table A in the Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith,

“Affiliate” (i) in the case of a natural person, such person’s parents, parents-in-law, spouse, children or grandchildren, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by such person or any of the foregoing, (ii) in the case of an entity, a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term “control” shall mean the ownership, directly or indirectly, of shares possessing more than fifty percent (50%) of the voting power of the corporation, or the partnership or other entity (other than, in the case of corporation, share having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity.

“Articles” means these Articles as originally framed or as from time to time altered by Special Resolution.

“Auditors” means the persons for the time being performing the duties of auditors of the Company.

“Chairman” means the Chairman of the Board of Directors appointed in accordance with Article 91.

“Class” means a class of Director established pursuant to Article 68.

“Class A Ordinary Shares” means the Class A ordinary shares in the capital of the Company of US$0.0001 par value each, having the rights provided for in these Articles.

“Class B Ordinary Shares” means the Class B ordinary shares in the capital of the

1

Company of US$0.0001 par value each, having the rights provided for in these Articles.

“Company”means Recon Technology, Ltd

“debenture” means debenture stock, mortgages, bonds and any other such securities of the Company whether constituting a charge on the assets of the Company or not.

“Designated Exchange” means The Nasdaq Stock Market, the New York Stock Exchange, the NYSE Market or any other internationally recognized stock exchange where the Company’s securities are traded;

“Directors” means the directors for the time being of the Company.

“dividend” includes bonuses.

“Exchange Rules” means  the  relevant  code,  rules  and  regulations,  as amended, from time to time, applicable as a result of the original and continued listing of any shares on the Designated Exchange;

“Member” shall bear the meaning as ascribed to it in the Statute.

“month” means calendar month.

“Original Articles” means the First Amended and Restated Articles of Association of the Company adopted by Special Resolutions dated 23^rd day of June, 2009

“paid-up” means paid-up and/or credited as paid-up.

“registered office” means the registered office for the time being of the Company.

“Seal” means the common seal of the Company and includes every duplicate seal.

“Secretary”includes an Assistant Secretary and any person appointed

to perform the duties of Secretary of the Company.

“Share Premium Account” means the account of the Company which the Company is required by the Statute to maintain, to which all premiums over nominal or par value received by the Company in respect of issues of shares from time to time are credited.

“shares” means any share in the capital of the Company, including Class A Ordinary Shares, Class B Ordinary Shares and shares of other classes.

2

“Special Resolution” has the same meaning as in the Statute and includes a resolution approved in writing as described therein.

“Statute” means the Companies Act of the Cayman Islands as amended and every statutory modification  or re-enactment thereof for the time being in force.

“written” and “in writing” include all modes of representing or reproducing words in visible form.

Words importing the singular number include the plural number and vice-versa. Words

importing the masculine gender include the feminine gender.

Words importing persons include corporations.

2. The business of the Company may be commenced as soon after incorporation as the Directors shall see fit, notwithstanding that only part of the shares may have been allotted.

3. The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company including the expenses of registration.

CERTIFICATES FOR SHARES

4. Certificates representing shares of the Company shall be in such form as shall be determined or agreed to by the Directors. Such certificates may be under Seal. All certificates for shares shall be consecutively numbered or otherwise identified and shall specify the shares to which they relate. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered in the register of Members of the Company. All certificates surrendered to the Company or any agent appointed by the Company for the purpose of maintaining the Company’s register of Members and registering transfer of the Company’s shares (the “Share Registrar”) for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled. The Directors may authorize certificates to be issued with the seal and authorized signature(s) affixed by some method or system of mechanical process.

5. Notwithstanding Article 4 of these Articles, if a share certificate be defaced, lost or destroyed, it may be renewed on payment of a fee of one dollar (US$l.00) or such other sum determined by the Directors or the Share Registrar and on such terms (if any) as to evidence and indemnity and the payment of the expenses incurred by the Company in investigating evidence, as the Directors or Share Registrar may prescribe.

ISSUE OF SHARES

6. Subject to the relevant provisions, if any, in the Memorandum of Association and to any direction that may be given by the Company in general meeting and without prejudice to any special rights previously conferred on the holders of existing shares, the Directors may, in their absolute discretion and without approval of the holders of shares, allot, issue, grant options over or otherwise dispose of shares of the Company (including fractions of a share) with or without preferred, deferred or other special rights or restrictions, whether with regard to dividend, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper. The Company shall not issue shares in bearer form.

3

REGISTER OF MEMBERS AND SHARE CERTIFICATES

7. The Company shall maintain a register of its Members and every person whose name is entered as a Member in the register of Members shall be entitled without payment to receive within two months after allotment or lodgement of transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares or several certificates each for one or more of his shares upon payment of fifty cents (US$0.50) for every certificate after the first or such sum as the Directors of the Share Registrar shall from time to time determine provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue more than one certificate and delivery of a certificate for a share to one of the several joint holders shall be sufficient delivery to all such holders. The Directors may appoint a Share Registrar to maintain the Company’s register of Members.

TRANSFER OF SHARES

8. The instrument of transfer of any share shall be in writing and shall be executed by or on behalf of the transferor and the transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the register in respect thereof. The Directors may in their absolute discretion decline to register any transfer of shares without assigning any reason therefor. If the Directors refuse to register a transfer they shall notify the transferee within two months of such refusal.

9. The registration of transfers may be suspended at such time and for such periods as the Directors may from time to time determine.

REDEEMABLE SHARES

10.(a)Subject to the provisions of the Statute and the Memorandum of Association, shares may be issued on the terms that they are, or at the option of the Company or the holder are, to be redeemed on such terms and in such manner as the Company, before the issue of the shares, may by Special Resolution determine.

(b)Subject to the provisions of the Statute and the Memorandum of Association, the Company may purchase its own shares (including fractions of a share), including any redeemable shares, provided that the manner of purchase has first been authorized by the Company in general meeting and may make payment therefor in any manner authorized by the Statute, including out of capital.

VARIATION OF RIGHTS OF SHARES

11. If at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up and except where these Articles or the Statute impose any stricter quorum, voting or procedural requirements in regard to the variation of rights attached to a specific class, be varied with the consent in writing of the holders of at least 50% of the issued shares of that class, or with the sanction of a Special Resolution passed at a general meeting of the holders of the shares of that class.

The provisions of these Articles relating to general meetings shall apply to every such general meeting of the holders of one class of shares except that the necessary quorum shall be one or more persons holding or representing by proxy at least one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxy may demand a poll.

12. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

4

COMMISSION ON SALE OF SHARES

13. The Company may insofar as the Statute from time to time permits pay a commission to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any shares of the Company. Such commissions may be satisfied by the payment of cash or the lodgement of fully or partly paid-up shares or partly in one way and partly in the other. The Company may also on any issue of shares pay such brokerage as may be lawful.

NON-RECOGNITION OF TRUSTS

14. No person shall be recognized by the Company as holding any share upon any trust and the Company shall not be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future, or partial interest in any share, or any interest in any fractional part of a share, or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

LIEN ON SHARES

15. The Company shall have a first and paramount lien and charge on all shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such share shall operate as a waiver of the Company’s lien (if any) thereon. The Company’s lien (if any) on a share shall extend to all dividends or other monies payable in respect thereof.

16. The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is presently payable, nor until the expiration of fourteen days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder or holders for the time being of the share, or the person, of which the Company has notice, entitled thereto by reason of his death or bankruptcy.

17. To give effect to any such sale, the Directors may authorize some person to transfer the shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

18. The proceeds of such sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.

CALL ON SHARES

19.(a)The Directors may from time to time make calls upon the Members in respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium or otherwise) and not by the conditions of allotment thereof made payable at fixed terms, provided that no call shall be payable at less than one month from the date fixed for the payment of the last preceding call, and each Member shall (subject to receiving at least fourteen (14) days’ notice specifying the time or times of payment) pay to the Company at the

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time or times so specified the amount called on the shares. A call may be revoked or postponed as the Directors may determine. A call may be made payable by installments.

(b)A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed.

(c)The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

20. If a sum called in respect of a share is not paid before or on a day appointed for payment thereof, the persons from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate not exceeding ten per cent per annum as the Directors may determine, but the Directors shall be at liberty to waive payment of such interest either wholly or in part.

21. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium or otherwise, shall for the purposes of these Articles be deemed to be a call duly made, notified and payable on the date on which by the terms of issue the same becomes payable, and in the case of non-payment all the relevant provisions of these Articles as to payment of interest forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

22. The Directors may, on the issue of shares, differentiate between the holders as to the amount of calls or interest to be paid and the times of payment.

23.(a)The Directors may, if they think fit, receive from any Member willing to advance the same, all or any part of the monies uncalled and unpaid upon any shares held by him, and upon all or any of the monies so advanced may (until the same would but for such advances, become payable) pay interest at such rate not exceeding (unless the Company in general meeting shall otherwise direct) seven per cent per annum, as may be agreed upon between the Directors and the Member paying such sum in advance. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

FORFEITURE OF SHARES

24.(a)If a Member fails to pay any call or installment of a call or to make any payment required by the terms of issue on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of the call, installment or payment remains unpaid, give notice requiring payment of any part of the call, installment or payment that is unpaid, together with any interest which may have accrued and all expenses that have been incurred by the Company by reason of such non-payment. Such notice shall name a day (not earlier than the expiration of fourteen (14) days’ from the date of giving of the notice) on or before which the payment required by the notice is to be made, and shall state that, in the event of non-payment at or before the time appointed the shares in respect of which such notice was given will be liable to be forfeited.

(b)If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited share and not actually paid before the forfeiture.

(c)A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the Directors see fit.

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25. A person whose shares have been forfeited shall cease to be a Member in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the shares together with interest thereon, but his liability shall cease if and when the Company shall have received payment in full of all monies whenever payable in respect of the shares.

26. A certificate in writing under the hand of one Director or the Secretary of the Company that a share in the Company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of the fact therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration given for the share on any sale or disposition thereof and may execute a transfer of the share in favor of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

27. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium as if the same had been payable by virtue of a call duly made and notified.

REGISTRATION OF EMPOWERING INSTRUMENTS

28. The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letter of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument.

TRANSMISSION OF SHARES

29. In case of the death of a Member, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognized by the Company as having any title to his interest in the shares, but nothing herein contained shall release the estate of any such deceased holder from any liability in respect of any shares which had been held by him solely or jointly with other persons.

30.(a)Any person becoming entitled to a share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to make such transfer of the share to such other person nominated by him as the deceased or bankrupt person could have made and to have such person registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that Member before his death or bankruptcy as the case may be.

(b)If the person so becoming entitled shall elect to be registered himself as holder he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.

31. A person becoming entitled to a share by reason of the death or bankruptcy or liquidation or dissolution of the holder (or in any other case than by transfer) shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a Member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company; PROVIDED, HOWEVER, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety (90) days, the Directors may thereafter

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withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been complied with.

RIGHTS CONFERRED BY CLASS A ORDINARY SHARES AND

CLASS B ORDINARY SHARES

32. Each Class A Ordinary Share and Class B Ordinary Share confers on its holder:

(a) the right to vote as provided in Article 33 hereof;

(b) the right to an equal share in any dividend paid by the Company; and

(c) the right to an equal share in the distribution of the surplus of the Company.

33. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall be entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

34. Each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares.

35. The number of Class B Ordinary Shares held by a holder thereof will be automatically and immediately converted into the corresponding number of Class A Ordinary Shares in the ratio set forth in Article 34 hereof upon any direct or indirect sale, transfer, assignment or disposition of such number of Class B Ordinary Shares by the holder thereof or an Affiliate or such holder or the direct or indirect transfer or assignment of the voting power attached to such number of Class B Ordinary Shares through voting proxy or otherwise to any person or entity that is not an Affiliate of such holder. For the avoidance of doubt, the creation of any pledge, charge, encumbrance or other third party right of whatever description on any of Class B Ordinary Shares to secure contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance or other third-party right is enforced and results in the third party holding directly or indirectly beneficial ownership or voting power through voting proxy or otherwise to the related Class B Ordinary Shares, in which case all the related Class B Ordinary Shares shall be automatically converted into the same number of Class A Ordinary Shares.

36. Any conversion of Class B Ordinary Shares into Class A Ordinary Shares pursuant to these Articles shall be effected by means of the conversion into stock of each relevant Class B Ordinary Share and their reconversion into a Class A Ordinary Share.

37. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.

38. Save and except for voting rights and conversion rights as set out in Articles 33 to 37 (inclusive), the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu and shall have the same rights, preferences, privileges and restrictions.

AMENDMENT OF MEMORANDUM OF ASSOCIATION, ALTERATION

OF CAPITAL & CHANGE OF LOCATION OF REGISTERED OFFICE

39.(a)Subject to and in so far as permitted by the provisions of the Statute, the Company may from time to time by Special Resolution alter or amend its Memorandum of Association with respect to its name and objects, powers or other matters specified therein provided that

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the Company may by ordinary resolution, without restricting the generality of the foregoing:

(i) increase the share capital by such sum to be divided into shares of such amount or without nominal or par value as the resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

(ii) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(iii) by subdivision of its existing shares or any of them divide the whole or any part of its share capital into shares of smaller amount than is fixed by the Memorandum of Association or into shares without nominal or par value;

(iv) cancel any shares that at the date of the passing of the resolution have not been taken or agreed to be taken by any person.

(b)All new shares created hereunder shall be subject to the same provisions with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the shares in the original share capital.

(c)Without prejudice to Article 11 hereof and subject to the provisions of the Statute, the Company may by Special Resolution reduce its share capital and any capital redemption reserve fund.

(d)Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its registered office.

CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

40. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, the Directors of the Company may provide that the register of Members shall be closed for transfers for a stated period but not to exceed in any case forty (40) days. If the register of Members shall be so closed for the purpose of determining Members entitled to notice of or to vote at a meeting of Members, such register shall be so closed for at least ten (10) days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the register of Members.

41. In lieu of or apart from closing the register of Members, the Directors may fix in advance a date as the record date for any such determination of Members entitled to notice of or to vote at a meeting of the Members and for the purpose of determining the Members entitled to receive payment of any dividend the Directors may, at or within ninety (90) days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination.

42. If the register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members or Members entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this section, such determination shall apply to any adjournment thereof.

GENERAL MEETING

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43. All general meetings of the Company other than annual general meetings shall be called extraordinary general meetings.

44. (a) The Directors may whenever they think fit, and they shall on the requisition of Members of the Company holding at the date of the deposit of the requisition not less than one tenth (1/10) of such of the paid-up capital of the Company as at the date of the deposit carries the right of voting at general meetings of the Company, proceed to convene a general meeting of the Company.

(b)The requisition must state the object of the meeting and must be signed by the requisitionists and deposited at the registered office of the Company and may consist of several documents in like form each signed by one or more requisitionists.

(c)If the Directors do not within twenty one (21) days from the date of the deposit of the requisition duly proceed to convene a general meeting, the requisitionists, or any of them representing more than one half (1/2) of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three (3) months after the expiration of the said twenty-one (21) days.

(d)A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

NOTICE OF GENERAL MEETINGS

45. At least ten (10) days’ notice shall be given for an annual general meeting or any other general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company; PROVIDED, that a general meeting of the Company shall be deemed to have been duly convened if it is called as an annual general meeting if it is so agreed by all the Members entitled to attend and vote thereat or their proxies.

46. In cases where instruments of proxy are sent out with notices, the accidental omission to send such instrument of proxy to, or the non-receipt of any such instrument of proxy by, any person entitled to receive notice shall not invalidate any resolution passed or any proceeding at any such meeting.

47. No business may be transacted at any annual general meeting, other than business that is either (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board (or any duly authorized committee thereof), (B) otherwise properly brought before an annual general meeting by or at the direction of the Board (or any duly authorized committee thereof) or (C) otherwise properly brought before an annual general meeting by any Member of the Company who (i) is a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting and (ii) complies with the notice procedures set forth in this Article.

(a)In addition to any other applicable requirements, for business to be brought properly before an annual general meeting by a Member, such Member must have given timely notice thereof in proper written form to the Secretary of the Company.

(b)For matters other than for the nomination for election of a Director to be made by a Member of the Company, to be timely, such Member’s notice shall be delivered to the Secretary at the principal executive offices of the Company not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual

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general meeting; provided, however, that in the event that the date of the annual general meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, notice by a Member to be timely must be delivered not earlier than the ninetieth (90th) day prior to such annual general meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such annual general meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made.

(c)To be in proper written form, a Member’s notice to the Secretary must set forth as to such matter such Member proposes to bring before the annual general meeting (1) a brief description of the business desired to be brought before the annual general meeting and the reasons for conducting such business at the annual general meeting, (2) the name and address, as they appear on the Company’s books, of the Member proposing such business and any Member Associated Person (as defined below), (3) the class or series and number of shares of the Company that are held of record or are beneficially owned by such Member or any Member Associated Person and any derivative positions held or beneficially held by the Member or any Member Associated Person, (4) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of such Member or any Member Associated Person with respect to any securities of the Company, and a description of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such Member or any Member Associated Person with respect to any securities of the corporation, (5) any material interest of the Member or a Member Associated Person in such business, and (6) a statement whether either such Member or any Member Associated Person will deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s voting shares required under applicable law. For purposes of this Article 43(c), a “Member Associated Person” of any Member shall mean (i) any person controlling, directly or indirectly, or acting in concert with, such Member, (ii) any beneficial owner of shares of the Company owned of record or beneficially by such Member and on whose behalf the proposal or nomination, as the case may be, is being made, or (iii) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (i) and (ii).

(d)No business shall be conducted at the annual general meeting except business brought before the annual general meeting in accordance with the procedures set forth in this Article, provided, however, that once business has been properly brought before the annual general meeting in accordance with such procedures, nothing in this Article shall be deemed to preclude discussion by any Member of any such business. If the Chairman of an annual general meeting determines that business was not properly brought before the annual general meeting in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

(e)In addition to any other applicable requirements, for a nomination for election of a Director to be made by a Member of the Company, such Member must (A) be a Member of record on both (x) the date of the giving of the notice by such Member provided for in this Article and (y) the record date for the determination of Members entitled to vote at such annual general meeting; (B) have held at least 100,000 Class A Ordinary Shares or Class B Ordinary Shares for at least twelve (12) months; and (C) have given timely notice thereof in proper written form to the Secretary of the Company. If a Member is entitled to vote only for a specific class or category of directors at a meeting of the Members, such Member’s right to nominate one or more persons for election as a director at the meeting shall be limited to such class or category of directors.

(f)To be timely for purposes of Article 41(e) in connection with the annual general meeting, a Member’s notice shall be delivered to the Secretary at the principal executive offices of the Company. In the event the Company calls an extraordinary general meeting for

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the purpose of electing one or more directors to the Board, any Member entitled to vote for the election of such director(s) at such meeting and satisfying the requirements specified above may nominate a person or persons (as the case may be) for election to such position(s) as are specified in the Company’s notice of such meeting, but only if the Member notice required hereof shall be delivered to the Secretary at the principal executive office of the Company. The period for lodgment of the notices by a Member referred to in this Article shall commence no earlier than the day after the dispatch of the notice of the meeting appointed for such election and end no later than (7) days prior to the date of such meeting and shall be for a minimum period of seven (7) days .

(g)To be in proper written form for purposes of Article 43(e), a Member’s notice to the Secretary must be set forth (A) as to each person whom the Member proposes to nominate for election as a director (1) the name, age, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class or series and number of shares of the Company, if any, which are owned beneficially or of record by the person and (4) any other information relating to the person that would be required to be disclosed pursuant to any Exchange Rules; and

(B) as to the Member giving notice (1) the name and record address of such Member,

(2) the class or series and number of Shares of the Company which are owned beneficially or of record by such Member, (3) a description of all arrangements or understandings between such Member and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such Member, (4) a representation that such Member intends to appear in person or by proxy at the annual meeting to nominate the person(s) named in its notice and (5) any other information relating to such Member that would be required to be disclosed pursuant to any Exchange Rules. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

(h)No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in these Articles under this heading of “NOTICE OF GENERAL MEETINGS”. If the Chairman of an annual general meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

48. The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings of that meeting.

PROCEEDINGS AT GENERAL MEETINGS

49. No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. Members present in person or by proxy holding not less than one thirds (1/3) of the issued and outstanding shares of the Company shall be a quorum.

50. Members may participate in a general meeting at which no special resolutions are proposed by means of conference telephone or other electronic means by which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

51. A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by all Members for the time being entitled to receive notice of and to attend and vote at general meetings (or being corporations by their duly authorized representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held.

52. If within half an hour from the time appointed for the meeting a quorum is not present, the

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meeting, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and place or to such other time or such other place as the Directors may determine and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the Members present shall be a quorum, subject to compliance with applicable laws, regulations and listing requirements.

53. The Chairman, if any, of the Board of Directors shall preside as Chairman at every general meeting of the Company. If there is a Chairman of the Board of Directors and he shall not be present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act, the Directors present shall elect one of their number to be Chairman of the meeting.

54. If at any general meeting no Director is willing to act as Chairman or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the Members present shall choose one of their own number to be Chairman of the meeting.

55. The Chairman may, with the consent of any general meeting duly constituted hereunder, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting; save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned general meeting.

56. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is, before or on the declaration of the result of the show of hands, demanded by the Chairman or any other Member present in person or by proxy.

57. Unless a poll be so demanded a declaration by the Chairman that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the Company’s Minute Book containing the Minutes of the proceedings of the meeting shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.

58. The demand for a poll may be withdrawn.

59. If a poll is duly demanded it shall be taken in such manner as the Chairman directs and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded.

60. In the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the general meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

61. A poll demanded on the election of a Chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the Chairman of the general meeting directs and any business other than that upon which a poll has been demanded or is contingent thereon may be proceeded with pending the taking of the poll.

VOTES OF MEMBERS

62. Except as otherwise required by law or as set forth herein, the holder of each Class A Ordinary Share issued and outstanding shall have one (1) vote for each share held by such holder, and the holder of each Class B Ordinary Share issued and outstanding shall have fifteen (15) vote for each share held by such holder, at the record date for determination of the Members entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of Members is solicited. No cumulative voting shall be allowed.

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63. All votes put before the Members of the Company, or any class or subdivision thereof, shall be by way of poll and shall therefore be made giving regards to the number of votes to which each Member is entitled in accordance with Article 54.

64. In the case of joint holders of record the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of Members.

65. A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote whether on a show of hands or on a poll, by his committee, receiver, curator bonis, or other person in the nature of a committee, receiver or curator bonis appointed by that court, and any such committee, receiver, curator bonis or other persons may vote by proxy.

66. No Member shall be entitled to vote at any general meeting unless he is registered as a Member of the Company on the record date for such meeting nor unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

67. No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairman of the general meeting whose decision shall be final and conclusive.

68. On a poll votes may be given either personally or by proxy.

PROXIES

69. The instrument appointing a proxy shall be (a) in writing and executed under the hand of the appointor or of his attorney duly authorized in writing, or, if the appointor is a corporation under the hand of an officer or attorney duly authorized in that behalf; or (b)) authorized by the transmission of an electronic record by the Member to the person who will be the holder of the proxy or to a firm which solicits proxies or like agent who is authorized by the person who will be the holder of the proxy to receive the transmission subject to any procedures the Board of Directors may adopt from time to time to determine that the electronic record is authorized by the Member. A proxy need not be a Member of the Company

70. The instrument appointing a proxy shall be deposited at the registered office of the Company or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding the meeting, or adjourned meeting provided that the Chairman of the Meeting may at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited upon receipt of telex, cable or telecopy confirmation from the appointor that the instrument of proxy duly signed is in the course of transmission to the Company.

71. The instrument appointing a proxy may be in any usual or common form and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.

72. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in respect of which the proxy is given provided that no intimation in writing of such death, insanity, revocation or transfer as aforesaid shall have been received by the Company at the registered office before the commencement of the general meeting, or adjourned meeting at which it is

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sought to use the proxy.

73. Any corporation which is a Member of record of the Company may in accordance with its Articles or in the absence of such provision by resolution of its Directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member of record of the Company.

74. Shares of its own capital belonging to the Company or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time.

DIRECTORS

75. There shall be a Board of Directors consisting of between five (5) and nine (9) persons (exclusive of alternate Directors) who shall be appointed in three classes hereinafter designated as Class I, Class II and Class III, each consisting of an equal number of directors, as nearly as possible. The Directors designated in each Class shall be as designated following the adoption of the Original Articles .

76. The remuneration to be paid to the Directors shall be such remuneration as the Directors shall determine. Such remuneration shall be deemed to accrue from day to day. The Directors shall also be entitled to be paid their traveling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

77. The Directors may by resolution award special remuneration to any Director of the Company undertaking any special work or services for, or undertaking any special mission on behalf of, the Company other than his ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director.

78. A Director or alternate Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

79. A Director or alternate Director may act by himself or his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or alternate Director.

80. A shareholding qualification for Directors may be fixed by the Company in general meeting, but unless and until so fixed no qualification shall be required.

81. A Director or alternate Director of the Company may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as Member or otherwise and no such Director or alternate Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.

82. No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so

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interested be liable to account to the Company for any profit realized by any such contract or transaction by reason of such Director holding office or of the fiduciary relation thereby established. A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is so interested as aforesaid; PROVIDED, HOWEVER, that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him or the alternate Director appointed by him at or prior to its consideration and any vote thereon.

83. A general notice or disclosure to the Directors or otherwise contained in the minutes of a Meeting or a written resolution of the Directors or any committee thereof that a Director or alternate Director is a Member of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure under the preceding Article and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

ALTERNATE DIRECTORS

84. A Director who expects to be unable to attend Directors’ Meetings because of absence, illness or otherwise may appoint any person to be an alternate Director to act in his stead and such appointee whilst he holds office as an alternate Director shall, in the event of absence therefrom of his appointor, be entitled to attend meetings of the Directors and to vote thereat and to do, in the place and stead of his appointor, any other act or thing which his appointor is permitted or required to do by virtue of his being a Director as if the alternate Director were the appointor, other than appointment of an alternate to himself, and he shall ipso facto vacate office if and when his appointor ceases to be a Director or removes the appointee from office. Any appointment or removal under this Article shall be effected by notice in writing under the hand of the Director making the same.

POWERS AND DUTIES OF DIRECTORS

85. The business of the Company shall be managed by the Directors (or a sole Director if only one is appointed) who may pay all expenses incurred in promoting, registering and setting up the Company, and may exercise all such powers of the Company as are not, from time to time by the Statute, or by these Articles, or such regulations, being not inconsistent with the aforesaid, as may be prescribed by the Company in general meeting required to be exercised by the Company in general meeting; PROVIDED, HOWEVER, that no regulations made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

86. The Directors may from time to time and at any time by powers of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorneys as the Directors may think fit and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him.

87. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall from time to time by resolution determine.

88. The Directors shall cause minutes to be made in books provided for the purpose:

(a) of all appointments of officers made by the Directors;

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(b)of the names of the Directors (including those represented thereat by an alternate or by proxy) present at each meeting of the Directors and of any committee of the Directors;

(c)of all resolutions and proceedings at all meetings of the Company and of the Directors and of committees of Directors.

89. The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

90. The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

MANAGEMENT

91.(a)The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following paragraphs shall be without prejudice to the general powers conferred by this paragraph.

(b)The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such committees or local boards or any managers or agents and may fix their remuneration.

(c)The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

(d)Any such delegates as aforesaid may be authorized by the Directors to subdelegate all or any of the powers, authorities, and discretions for the time being vested in them.

MANAGING DIRECTORS

92. The Directors may, from time to time, appoint one or more of their body (but not an alternate Director) to the office of Managing Director for such term and at such remuneration (whether by way of salary, or commission, or participation in profits, or partly in one way and partly in another) as they may think fit but his appointment shall be subject to determination ipso facto if he ceases for any cause to be a Director and no alternate Director appointed by him can act in his stead as a Director or Managing Director.

93. The Directors may entrust to and confer upon a Managing Director any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit and either collaterally with or to the exclusion of their own powers and may from time to time revoke, withdraw, alter or vary all or any of such powers.

PROCEEDINGS OF DIRECTORS

94. Except as otherwise provided by these Articles, the Directors shall meet together for the

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conduct of business, convening, adjourning and otherwise regulating their meetings as they think fit. Questions arising at any meeting shall be decided by a majority of votes of the Directors and alternate Directors present at a meeting at which there is a quorum, the vote of an alternate Director not being counted if his appointor is present at such meeting. In case of an equality of votes, the Chairman shall have a second or casting vote.

95. A Director or alternate Director may, and the Secretary on the requisition of a Director or alternate Director shall, at any time summon a meeting of the Directors by at least two (2) days’ notice in writing to every Director and alternate Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors (or their alternates) either at, before or after the meeting is held; PROVIDED, HOWEVER, that if notice is given in person, by facsimile, electronic mail, telegraph or telex, the same shall be deemed to have been given on the day it is delivered to the Directors or transmitting organization as the case may be. The provisions of Article 38 shall apply mutatis mutandis with respect to notices of meetings of Directors.

96. The quorum necessary for the transaction of the business of the Directors shall be a majority of the Directors then in office. If at any time there is only a sole Director, then the quorum shall be one (1) Director. A Director and his appointed alternate Director shall be considered only one person for this purpose. For the purposes of this Article, an alternate Director or proxy appointed by a Director shall be counted in a quorum at a meeting at which the Director appointing him is not present.

97. The continuing Directors may act notwithstanding any vacancy in their body.

98. The Directors may elect a Chairman of their Board and determine the period for which he is to hold office, but if no such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be Chairman of the meeting.

99. The Directors may delegate any of their powers to committees consisting of such member or members of the Board of Directors (including Alternate Directors in the absence of their appointors) as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

100. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present, and in the case of an equality of votes the Chairman shall have a second or casting vote.

101. All acts done by any meeting of the Directors or of a committee of Directors (including any person acting as an alternate Director) shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or alternate Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director or alternate Director as the case may be.

102. Members of the Board of Directors or of any committee thereof may participate in a meeting of the Board or of such committee by means of conference telephone or other electronic means by which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. A resolution in writing (in one or more counterparts), signed by all the Directors for the time being or all the members of a committee of Directors (an alternate Director being entitled to sign such resolution on behalf of his appointor) shall be as valid and effectual as if it had been passed at a meeting of the Directors or committee as the case may be duly convened and held.

VACATION OF OFFICE OF DIRECTOR

103. The office of a Director shall be vacated:

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(a)if he gives notice in writing to the Company that he resigns the office of Director;

(b)if he absents himself (without being represented by proxy or an alternate Director appointed by him) from three (3) consecutive meetings of the Board of Directors without special leave of absence from the Directors, and they pass a resolution that he has by reason of such absence vacated office;

(c)if he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally;

(d) if he is found a lunatic or becomes of unsound mind; or

(e)if the term of his appointment expires pursuant to Article 93 below and he is not reappointed.

APPOINTMENT AND REMOVAL OF DIRECTORS

104.(a)At the first annual general meeting of the Company following the original adoption of the Original Articles the Class I Directors shall retire. At the second annual general meeting of the Company following the adoption of the Original Articles the Class II Directors shall retire. At the third annual general meeting of the Company following the adoption of the Original Articles, the Class III Directors shall retire.

(b)At each annual general meeting where a class of Directors retires, the members shall by ordinary resolution elect replacement Directors to serve as Class I, II, or III (as the case may be) Directors, provided always that any retiring Director may stand for re-election.

(c)Subject to sub-article (a) above, each Director shall be appointed for a term of up to three (3) years and each Director shall retire at the annual general meeting held in the calendar year of his retirement.

(d)Notwithstanding any other provision in these Articles, the Company may by Special Resolution remove any Director for negligence, breach of fiduciary duty or other reasonable cause at any time before the expiration of his term.

(e)The Company may, by ordinary resolution, appoint another person in place of a Director removed from office under the immediately preceding Article, and without prejudice to the powers of the Directors, in general meeting may appoint any person to be a Director to fill a vacancy that may have arisen. A person appointed, pursuant to this paragraph or the paragraph below, in place of a Director removed or to fill a vacancy shall hold office only until the close of the next following annual general meeting at which the class he is appointed to is due to retire.

(f)The Directors shall have power at any time and from time to time to appoint any person to be a Director to fill a casual vacancy in any class of Directors.

PRESUMPTION OF ASSENT

105. A Director of the Company who is present at a meeting of the Board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the Minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

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SEAL

106.(a)The Company may, if the Directors so determine, have a Seal which shall, subject to paragraph (c) hereof, only be used by the authority of the Directors or of a committee of the Directors authorized by the Directors in that behalf and every instrument to which the Seal has been affixed shall be signed by one person who shall be either a Director or the Secretary or Secretary-Treasurer or some person appointed by the Directors for the purpose.

(b)The Company may have a duplicate Seal or Seals each of which shall be a facsimile of the Common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

(c)A Director, Secretary or other officer or representative or attorney may without further authority of the Directors affix the Seal of the Company over his signature alone to any document of the Company required to be authenticated by him under Seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

OFFICERS

107. The Company may have a President, a Secretary or Secretary-Treasurer appointed by the Directors who may also from time to time appoint such other officers as they consider necessary, all for such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors from time to time prescribe.

DIVIDENDS, DISTRIBUTIONS AND RESERVE

108. Subject to the Statute, the Directors may from time to time declare dividends (including interim dividends) and distributions on shares of the Company outstanding and authorize payment of the same out of the funds of the Company lawfully available therefor.

109. The Directors may, before declaring any dividends or distributions, set aside such sums as they think proper as a reserve or reserves which shall at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the like discretion, be employed in the business of the Company.

110. No dividend or distribution shall be payable except out of the profits of the Company, realized or unrealized, or out of the Share Premium Account or as otherwise permitted by the Statute.

111. Subject to the rights of persons, if any, entitled to shares with special rights as to dividends or distributions, if dividends or distributions are to be declared on a class of shares they shall be declared and paid according to the amounts paid or credited as paid on the shares of such class outstanding on the record date for such dividend or distribution as determined in accordance with these Articles but no amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this Article as paid on the share.

112. The Directors may deduct from any dividend or distribution payable to any Member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

113. The Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures, or debenture stock of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors.

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114. Any dividend, distribution, interest or other monies payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the holder who is first named on the register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the share held by them as joint holders.

115. No dividend or distribution shall bear interest against the Company.

CAPITALIZATION

116. The Company may upon the recommendation of the Directors by ordinary resolution authorize the Directors to capitalize any sum standing to the credit of any of the Company’s reserve accounts (including Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalization, with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorize any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalization and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

BOOKS OF ACCOUNT

117. The Directors shall cause proper books of account to be kept with respect to:

(a)all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place;

(b) all sales and purchases of goods by the Company;

(c) the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.

118. The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by the Statute or authorized by the Directors or by the Company in general meeting.

119. The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

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AUDIT

120. The Company may at any annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the next annual general meeting and may fix his or their remuneration.

121. The Directors may before the first annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the first annual general meeting unless previously removed by an ordinary resolution of the Members in general meeting in which case the Members at that meeting may appoint Auditors. The Directors may fill any casual vacancy in the office of Auditor but while any such vacancy continues the surviving or continuing Auditor or Auditors, if any, may act. The remuneration of any Auditor appointed by the Directors under this Article may be fixed by the Directors.

122. Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

123. Auditors shall at the next annual general meeting following their appointment and at any other time during their term of office, upon request of the Directors or any general meeting of the Members, make a report on the accounts of the Company in general meeting during their tenure of office.

NOTICES

124. Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by facsimile, electronic mail, telegraph or telex to him or to his address as shown in the register of Members, such notice, if mailed, to be forwarded airmail if the address be outside the Cayman Islands.

125.(a)Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre-paying and posting a letter containing the notice, and to have been effected at the expiration of 24 (24) hours after the letter containing the same is posted as aforesaid.

(b)Where a notice is sent by facsimile, electronic mail, telegraph or telex, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization and to have been effected on the day the same is sent as aforesaid.

126. A notice may be given by the Company to the joint holders of record of a share by giving the notice to the joint holder first named on the register of Members in respect of the share.

127. A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a share or shares in consequence of the death or bankruptcy of a Member by sending it through the post as aforesaid in a pre-paid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

128. Notice of every general meeting shall be given in any manner hereinbefore authorized to:

(a)every person shown as a Member in the register of Members as of the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the register of Members; and

(b)every person upon whom the ownership of a share devolves by reason of his being

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a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his death or bankruptcy would be entitled to receive notice of the meeting.

Any Member present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting, and, where requisite, of the purposes for which such meeting was convened. No other person shall be entitled to receive notices of general meetings.

WINDING UP

129. If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any shares or other securities whereon there is any liability.

INDEMNITY

130. The Directors and officers for the time being of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs, charges, losses, damages and expenses which they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall incur or sustain by or through their own fraud, willful neglect or default respectively and no such Director, officer or trustee shall be answerable for the acts, receipts, neglects or defaults of any other Director, officer or trustee or for joining in any receipt for the sake of conformity or for the solvency or honesty of any banker or other persons with whom any monies or effects belonging to the Company may be lodged or deposited for safe custody or for any insufficiency of any security upon which any monies of the Company may be invested or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of his office or trust unless the same shall happen through the fraud, willful neglect or default of such Director, Officer or trustee.

FINANCIAL YEAR

131. Unless the Directors otherwise prescribe, the financial year of the Company shall end on June 30 in each year and shall begin on July 1 in each year.

AMENDMENTS OF ARTICLES

132. Subject to the Statute and to any quorum, voting or procedural requirements expressly imposed by these Articles in regard to the variation of rights attached to a specific class of Shares of the Company, the Company may at any time and from time to time by Special Resolution change the name of the Company or alter or amend these Articles or the Company’s Memorandum of Association, in whole or in part.

TRANSFER BY WAY OF CONTINUATION

133. If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

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EX-1.1_6

Exhibit 1.1.6

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

FOURTH AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION OF

RECON TECHNOLOGY, LTD

(Amended and Restated by Special Resolutions adopted on March 29, 2024)

1. The name of the Company is Recon Technology, Ltd.

2. The Registered Office of the Company shall be 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, or at such other place as the Directors may from time to time decide.

3. The objects for which the Company is established are unrestricted and shall include, but without limitation, the following:

(a)   (i) To carry on the business of an investment company and to act as promoters and entrepreneurs and to carry on business as financiers, capitalists, concessionaires, merchants, brokers, traders, dealers, agents, importers and exporters and to undertake and carry on and execute all kinds of investment, financial, commercial, mercantile, trading and other operations.

(ii) To carry on whether as principals, agents or otherwise howsoever the business of realtors, developers, consultants, estate agents or managers, builders, contractors, engineers, manufacturers, dealers in or vendors of all types of property including services.

(b) To exercise and enforce all rights and powers conferred by or incidental to the ownership of any shares, stock, obligations or other securities including without prejudice to the generality of the foregoing all such powers of veto or control as may be conferred by virtue of the holding by the Company of some special proportion of the issued or nominal amount thereof, to provide managerial and other executive, supervisory and consultant services for or in relation to any company in which the Company is interested upon such terms as may be thought fit.

(c) To purchase or otherwise acquire, to sell, exchange, surrender, lease, mortgage, charge, convert, turn to account, dispose of and deal with real and personal property and rights of all kinds and, in particular, mortgages, debentures, produce, concessions, options, contracts, patents, annuities, licenses, stocks, shares, bonds, policies, book debts, business concerns, undertakings, claims, privileges and causes in action of all kinds.

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(d) To subscribe for, conditionally or unconditionally, to underwrite, issue on commission or otherwise, take, hold, deal in and convert stocks, shares and securities of all kinds and to enter into partnership or into any arrangement for sharing profits, reciprocal concessions or cooperation with any person or company and to promote and aid in promoting, to constitute, form or organize any company, syndicate or partnership of any kind, for the purpose of acquiring and undertaking any property and liabilities of the Company or of advancing, directly or indirectly, the objects of the Company or for any other purpose which the Company may think expedient.

(e) To stand surety for or to guarantee, support or secure the performance of all or any of the obligations of any person, firm or company whether or not related or affiliated to the Company in any manner and whether by personal covenant or by mortgage, charge or lien upon the whole or any part of the undertaking, property and assets of the Company, both present and future, including its uncalled capital or by any such method and whether or not the Company shall receive valuable consideration therefor.

(f) To engage in or carry on any other lawful trade, business or enterprise which may at any time appear to the Directors of the Company capable of being conveniently carried on in conjunction with any of the aforementioned businesses or activities or which may appear to the Directors of the Company likely to be profitable to the Company.

In the interpretation of this Memorandum of Association in general and of this Clause 3 in particular, no object, business or power specified or mentioned shall be limited or restricted by reference to or inference from any other object, business or power, or the name of the Company, or by the juxtaposition of two or more objects, businesses or powers and that, in the event of any ambiguity in this clause or elsewhere in this Memorandum of Association, the same shall be resolved by such interpretation and construction as will widen and enlarge and not restrict the objects, businesses and powers of and exercisable by the Company.

4. Except as prohibited or limited by the Companies Act (as revised), the Company shall have full power and authority to carry out any object and shall have and be capable of from time to time and at all times exercising any and all of the powers at any time or from time to time exercisable by a natural person or body corporate in doing in any part of the world whether as principal, agent, contractor or otherwise whatever may be considered by it necessary for the attainment of its objects and whatever else may be considered by it as incidental or conducive thereto or consequential thereon, including, but without in any way restricting the generality of the foregoing, the power to make any alterations or amendments to this Memorandum of Association and the Articles of Association of the Company considered necessary or convenient in the manner set out in the Articles of Association of the Company, and the power to do any of the following acts or things, viz:

to pay all expenses of and incidental to the promotion, formation and incorporation of the Company; to register the Company to do business in any other jurisdiction; to sell, lease or dispose of any property of the Company; to draw, make, accept, endorse, discount, execute and

2

issue promissory notes, debentures, bills of exchange, bills of lading, warrants and other negotiable or transferable instruments; to lend money or other assets and to act as guarantors; to borrow or raise money on the security of the undertaking or on all or any of the assets of the Company including uncalled capital or without security; to invest monies of the Company in such manner as the Directors determine; to promote other companies; to sell the undertaking of the Company for cash or any other consideration; to distribute assets in specie to Members of the Company; to make charitable or benevolent donations; to pay pensions or gratuities or provide other benefits in cash or kind to Directors, officers, employees, past or present and their families; to purchase Directors and officers liability insurance and to carry on any trade or business and generally to do all acts and things which, in the opinion of the Company or the Directors, may be conveniently or profitably or usefully acquired and dealt with, carried on, executed or done by the Company in connection with the business aforesaid PROVIDED THAT the Company shall only carry on the businesses for which a license is required under the laws of the Cayman Islands when so licensed under the terms of such laws.

5. The liability of each Member is limited to the amount from time to time unpaid on such Member’s shares.

6. The share capital of the Company is 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 with power for the Company insofar as is permitted by law, to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Act (as revised) and the Articles of Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preference or otherwise shall be subject to the powers hereinbefore contained.

7. If the Company is registered as an exempted company in accordance with Part VII of the Companies Act (as revised), the Company will comply with the provisions of such law relating to exempted companies and, subject to the provisions of the Companies Act and the Articles of Association, it shall have the power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

3

EX-12.1

Exhibit 12.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Securities and Exchange Commission Release 34-46427

I, Shenping Yin, certify that:

(1) I have reviewed this Form 20-F of Recon Technology, Ltd.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 24, 2024	/s/ Shenping Yin
	Shenping Yin
	Chief Executive Officer (Principal Executive Officer)

EX-12.2

Exhibit 12.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Securities and Exchange Commission Release 34-46427

I, Jia Liu, certify that:

(1) I have reviewed this Form 20-F of Recon Technology, Ltd.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 24, 2024	/s/ Jia Liu
	Jia Liu
	Chief Financial Officer (Principal Financial Officer)

EX-13.1

Exhibit 13.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Recon Technology, Ltd. (the “Registrant”) on Form 20-F for the year ended June 30, 2023, as amended, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 24, 2024

/s/ Shenping Yin

Shenping Yin

Chief Executive Officer

(Principal Executive Officer)

EX-13.2

Exhibit 13.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Recon Technology, Ltd. (the “Registrant”) on Form 20-F for the year ended June 30, 2023, as amended, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 24, 2024

/s/ Jia Liu

Jia Liu

Chief Financial Officer

(Principal Accounting Officer)

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form F-3 (File No. 333-257806) and Amendment No. 1 to Form F-3 (File No. 333-268657) of our report dated October 28, 2022 with respect to our audits of the consolidated financial statements of Recon Technology, Ltd and Subsidiaries as of June 30, 2021 and 2022 and for each of the years in the two-year period ended June 30, 2022, which is included in the Annual Report on Amendment No. 2 to Form 20-F, filed with the Securities and Exchange Commission. We also consent to the reference to our firm under the heading “Experts” in the Prospectus, which is part of such Registration Statement.

We were dismissed as auditors on February 1, 2023 and, accordingly, we have not performed any audit or review procedures with respect to any financial statements included in Amendment No. 2 to Form 20-F for the periods after the date of our dismissal.

/s/ Friedman LLP

New York, New York

May 24, 2024

EX-15.2

Exhibit 15.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form F-3 (File No. 333-257806) and Amendment No. 1 to Form F-3 (File No. 333-268657) of our report dated October 27, 2023, except for Note 28, as to which the date is May 24, 2024, relating to the consolidated financial statements of Recon Technology, Ltd and its subsidiaries as of June 30, 2023 and for the year ended June 30, 2023.

/s/ Enrome LLP

Singapore

May 24, 2024

XML

Document And Entity Information - shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Document Information [Line Items]
Entity Registrant Name	RECON TECHNOLOGY, LTD
Entity Central Index Key	0001442620
Document Type	20-F/A
Document Period End Date	Jun. 30, 2023
Amendment Flag	true
Amendment Description	Amendment No. 2
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Interactive Data Current	Yes
Trading Symbol	RCON
Title of 12(b) Security	Class A Ordinary Shares, $0.0001 par value per share*
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	2,306,295
Document Registration Statement	false
Entity File Number	001-34409
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	Room 601, No. 1 Shui’an South Street
Entity Address, Address Line Two	Chaoyang District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100012
Entity Address, Country	CN
Document Transition Report	false
Document Annual Report	true
Document Shell Company Report	false
Document Accounting Standard	U.S. GAAP
Auditor Name	Enrome LLP	Friedman LLP
Auditor Firm ID	6907	711
Auditor Location	Singapore	New York
Business Contact [Member]
Document Information [Line Items]
Entity Address, Address Line One	Room 601, No. 1 Shui’an South Street
Entity Address, Address Line Two	Chaoyang District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100012
Entity Address, Country	CN
City Area Code	+86
Local Phone Number	(10) 8494 5799
Contact Personnel Name	Liu Jia
Contact Personnel Email Address	liujia@recon.cn

XML

CONSOLIDATED BALANCE SHEETS		Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Current assets
Cash		¥ 104,125,800	$ 14,359,604	¥ 316,974,857
Restricted cash		731,545	100,885	723,560
Short-term investments		184,200,000	25,400,000	0
Notes receivable		3,742,390	516,099	10,828,308
Accounts receivable, net		27,453,415	3,785,999	22,577,980
Inventories, net		6,330,701	873,044	3,894,369
Other receivables, net		2,185,733	301,427	5,501,833
Loans to third parties		123,055,874	16,970,181	50,383,822
Purchase advances, net		2,680,456	369,652	178,208
Contract costs, net		49,572,685	6,836,386	33,858,820
Prepaid expenses		350,119	48,284	420,284
Prepaid expenses - related parties				275,000
Total current assets		504,413,173	69,561,759	445,617,041
Property and equipment, net		24,752,864	3,413,576	25,474,162
Construction in progress				239,739
Intangible assets, net				5,950,000
Long-term other receivables, net		3,640	502	1,564,381
Goodwill				4,730,002
Operating lease right-of-use assets (including ¥765,241 and ¥335,976 ($46,333) from a related party as of June 30, 2022 and 2023, respectively)		2,654,900	366,127	6,666,759
Total Assets		531,824,577	73,341,964	490,242,084
Current liabilities
Short-term bank loans		12,451,481	1,717,138	10,000,000
Accounts payable		10,791,721	1,488,246	16,739,989
Other payables		5,819,010	802,478	3,533,918
Other payable- related parties		2,592,395	357,508	2,240,135
Contract liabilities		2,748,365	379,017	2,001,277
Accrued payroll and employees' welfare		2,382,516	328,564	2,250,547
Taxes payable		1,163,006	160,386	2,210,958
Short-term borrowings - related parties		20,018,222	2,760,639	9,009,156
Long-term borrowings - related party - current portion				999,530
Operating lease liabilities - current (including ¥429,265 and ¥335,976 ($46,333) from a related party as of June 30, 2022 and 2023, respectively)		3,066,146	422,841	3,892,774
Total Current Liabilities		61,032,862	8,416,817	52,878,284
Operating lease liabilities - non-current (including ¥335,976 and ¥nil ($nil) from a related party as of June 30, 2022 and 2023, respectively)		25,144	3,468	2,184,635
Long-term borrowings - related party				5,511,076
Contract liabilities - non-current				106,000
Warrant liability		31,615,668	4,360,000	16,677,328
Total Liabilities		92,673,674	12,780,285	77,357,323
Commitments and Contingencies
Equity
Additional paid-in capital	[1]	580,340,061	80,032,554	516,426,799
Statutory reserve		4,148,929	572,163	4,148,929
Accumulated deficit		(170,440,826)	(23,504,865)	(111,273,525)
Accumulated other comprehensive income		35,127,173	4,844,259	11,307,461
Total shareholders' equity		449,206,962	61,948,472	420,631,729
Non-controlling interests		(10,056,059)	(1,386,793)	(7,746,968)
Total equity		439,150,903	60,561,679	412,884,761
Total Liabilities and Equity		531,824,577	73,341,964	490,242,084
Class A ordinary shares
Equity
Common stock value	[1]	26,932	3,714	19,461
Class B ordinary shares
Equity
Common stock value	[1]	¥ 4,693	$ 647	¥ 2,604

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

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical)				12 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 $ / shares shares	Dec. 10, 2019	Jun. 30, 2023 CNY (¥) shares	Mar. 28, 2024 $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Mar. 15, 2023 $ / shares	Jun. 30, 2022 CNY (¥) shares	Jun. 30, 2022 $ / shares	Jun. 14, 2021 $ / shares	Apr. 05, 2021 $ / shares shares	Apr. 05, 2021 ¥ / shares shares	Dec. 26, 2019 shares
Rights of use lease assets, net				¥ 2,654,900		$ 366,127		¥ 6,666,759
Operating lease liabilities - current				3,066,146		422,841		3,892,774
Operating lease liabilities - non-current				¥ 25,144		$ 3,468		¥ 2,184,635
Ordinary shares, shares outstanding	7,927,132
Reverse stock split	0.056	0.056		0.2
Class A ordinary shares
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001			$ 0.0925	$ 0.0001	$ 0.0925		$ 0.0001	$ 0.0925	$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		500,000,000		500,000,000	150,000,000	500,000,000		500,000,000			150,000,000	150,000,000
Ordinary shares, shares issued				2,306,295		2,306,295		1,704,766
Ordinary shares, shares outstanding	141,703,218			2,306,295		2,306,295		1,704,766					4,611,720
Reverse stock split	0.056	0.056	0.2
Class B ordinary shares
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001			$ 0.0925	$ 0.0001			$ 0.0001		$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		80,000,000		80,000,000	20,000,000	80,000,000		80,000,000			20,000,000	20,000,000
Ordinary shares, shares issued				7,100,000		7,100,000		4,100,000
Ordinary shares, shares outstanding				7,100,000		7,100,000		4,100,000
Reverse stock split				0.056
Related party
Rights of use lease assets, net				¥ 335,976		$ 46,333		¥ 765,241
Operating lease liabilities - current				335,976		46,333		429,265
Operating lease liabilities - non-current				¥ 0		$ 0		¥ 335,976

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)		12 Months Ended
		Jun. 30, 2023 CNY (¥) ¥ / shares shares		Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 CNY (¥) ¥ / shares shares		Jun. 30, 2021 CNY (¥) ¥ / shares shares
Revenue		¥ 67,114,378		$ 9,255,496	¥ 83,777,571		¥ 47,938,575
Cost of revenue		48,247,395		6,653,620	64,352,834		40,723,547
Gross profit		18,866,983		2,601,876	19,424,737		7,215,028
Selling and distribution expenses		10,638,978		1,467,182	10,150,802		8,038,965
General and administrative expenses		76,784,396		10,589,052	83,281,958		45,949,157
Allowance for (net recovery of) credit losses		(9,038,985)		(1,246,533)	(658,823)		8,191,247
Impairment loss of property and equipment and other long-lived assets		1,009,124		139,165	0		768,312
Research and development expenses		8,806,205		1,214,431	8,964,217		5,846,295
Operating expenses		88,199,718		12,163,297	101,738,154		68,793,976
Loss from operations		(69,332,735)		(9,561,421)	(82,313,417)		(61,578,948)
Other income (expenses)
Subsidy income		325,425		44,878	11,993		355,667
Interest income		13,603,487		1,876,007	5,367,979		918,629
Interest expense		(2,514,850)		(346,814)	(1,522,526)		(2,210,005)
Income (loss) from investment in unconsolidated entity		0		0	15,411		(266,707)
Gain in fair value changes of warrants liability		6,116,000		843,435	174,485,575		35,365,792
Remeasurement gain of previously held equity interests in connection with step acquisition		0		0	0		979,254
Foreign exchange transaction gain (loss)		241,652		33,325	(118,456)		(146,898)
Impairment loss on goodwill and intangible assets		(9,980,002)		(1,376,305)	(2,266,893)		0
Other income		82,970		11,442	15,855		192,137
Other income, net		7,874,682		1,085,968	175,988,938		35,187,869
Income (loss) before income tax		(61,458,053)		(8,475,453)	93,675,521		(26,391,079)
Income tax expenses (benefit)		18,339		2,529	(613,874)		(524,251)
Net income (loss)		(61,476,392)		(8,477,982)	94,289,395		(25,866,828)
Less: Net loss attributable to non-controlling interests		(2,309,091)		(318,438)	(1,297,400)		(3,034,094)
Net income (loss) attributable to Recon Technology, Ltd		(59,167,301)		(8,159,544)	95,586,795		(22,832,734)
Comprehensive income (loss)
Net income (loss)		(61,476,392)		(8,477,982)	94,289,395		(25,866,828)
Foreign currency translation adjustment		23,819,712		3,284,889	9,332,625		(850,895)
Comprehensive income (loss)		(37,656,680)		(5,193,093)	103,622,020		(26,717,723)
Less: Comprehensive loss attributable to non- controlling interests		(2,309,091)		(318,438)	(1,297,400)		(3,034,094)
Comprehensive income (loss) attributable to Recon Technology, Ltd		¥ (35,347,589)		$ (4,874,655)	¥ 104,919,420		¥ (23,683,629)
Earning (loss) per ordinary share -Basic | (per share)		¥ (27.43)		$ (3.78)	¥ 55.52	[1]	¥ (30.04)	[1]
Earning (loss) per ordinary share -Diluted | (per share)		¥ (27.43)	[1]	$ (3.78)	¥ 55.52	[1]	¥ (30.04)	[1]
Weighted average shares -Basic	[1]	2,157,158		2,157,158	1,721,529		760,116
Weighted average shares -Diluted	[1]	2,157,158		2,157,158	1,721,529		760,116
Third parties
Revenue		¥ 67,114,378		$ 9,255,496	¥ 83,777,571		¥ 47,852,918
Cost of revenue		48,247,395		6,653,620	64,352,834		40,723,547
Related party
Revenue		¥ 0		$ 0	¥ 0		¥ 85,657

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

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical)			12 Months Ended
	May 01, 2024	Mar. 29, 2024	Jun. 30, 2023
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Reverse stock split	0.056	0.056	0.2

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY		Additional Paid-in Capital CNY (¥)	[1]	Statutory Reserve CNY (¥)	Accumulated deficit CNY (¥)	Accumulated Other Comprehensive income CNY (¥)	Shareholders' Equity CNY (¥)	Non-controlling Interest CNY (¥)	Common stock Class A ordinary shares CNY (¥) shares		Common stock Class B ordinary shares CNY (¥) shares		CNY (¥) shares	USD ($) shares
Opening Balance at Jun. 30, 2020		¥ 287,077,740		¥ 4,148,929	¥ (184,027,586)	¥ 2,825,731	¥ 110,029,762	¥ 10,614,526	¥ 4,948	[1]			¥ 120,644,288	$ 16,637,609
Opening Balance (in shares) at Jun. 30, 2020	[1]								454,883
Capital contribution in non-controlling interests								50,000					50,000	6,895
Step acquisition of FGS								34,790,000					34,790,000	4,797,760
Capital contribution receivable due from non-controlling Interest								(50,000,000)					(50,000,000)	(6,895,315)
Stock issuance		81,087,271					81,091,141		¥ 3,870	[1]			81,091,141	11,182,980
Stock issuance (in shares)	[1]								334,117
Stock issuance for warrants exercised		21,128,345					21,130,035		¥ 1,690	[1]			21,130,035	2,913,965
Stock issuance for warrants exercised (in shares)	[1]								143,951
Proceeds from Pre-founded warrants		30,275,713					30,276,569		¥ 856	[1]			30,276,569	4,175,330
Proceeds from Pre-founded warrants (in shares)	[1]								73,889
Issuance of common share in exchange of shares of Starry, net of issuance costs		27,675,248					27,675,450		¥ 202	[1]			27,675,450	3,816,619
Issuance of common share in exchange of shares of Starry, net of issuance costs (in shares)	[1]								17,575
Restricted shares issued for management		6,139,915					6,140,037		¥ 122	[1]			6,140,037	846,750
Restricted shares issued for management (in shares)	[1]								10,481
Stock issuance for convertible notes redemption		42,429,692					42,435,669		¥ 5,977	[1]			42,435,669	5,852,146
Stock issuance for convertible notes redemption (in shares)	[1]								512,519
Net income (loss) for the period					(22,832,734)		(22,832,734)	(3,034,094)					(25,866,828)	(3,567,199)
Foreign currency translation adjustment						(850,895)	(850,895)						(850,895)	(117,344)
Ending Balance at Jun. 30, 2021		495,813,924		4,148,929	(206,860,320)	1,974,836	295,095,034	(7,579,568)	¥ 17,665	[1]			287,515,466	39,650,196
Ending Balance (in shares) at Jun. 30, 2021	[1]								1,547,415
Capital contribution in non-controlling interests								1,130,000					1,130,000	155,834
Restricted shares issued for services		8,934,933					8,935,919		¥ 986	[1]			8,935,919	1,232,320
Restricted shares issued for services (in shares)	[1]								86,111
Stock issuance for Pre-founded warrants		92,392					93,321		¥ 929	[1]			93,321	12,870
Stock issuance for Pre-founded warrants (in shares)	[1]								81,667
Cancellation of ordinary shares issued to Starry Lab		(27,675,248)					(27,675,450)		¥ (202)	[1]			(27,675,450)	(3,816,619)
Cancellation of ordinary shares issued to Starry Lab (in shares)	[1]								(17,575)
Restricted shares issued for management		39,260,798					39,263,485		¥ 83	[1]	¥ 2,604	[1]	39,263,485	5,414,682
Restricted shares issued for management (in shares)									7,148	[1]	4,100,000	[2]
Net income (loss) for the period					95,586,795		95,586,795	(1,297,400)					94,289,395	13,003,100
Foreign currency translation adjustment						9,332,625	9,332,625						9,332,625	1,287,028
Ending Balance at Jun. 30, 2022		516,426,799		4,148,929	(111,273,525)	11,307,461	420,631,729	(7,746,968)	¥ 19,461	[1]	¥ 2,604	[1]	412,884,761	56,939,411
Ending Balance (in shares) at Jun. 30, 2022									1,704,766	[1]	4,100,000	[2]
Restricted shares issued for services		5,805,150					5,805,840		¥ 690	[1]			5,805,840	800,662
Restricted shares issued for services (in shares)	[1]								55,556
Stock issuance		28,168,902					28,174,993		¥ 6,091	[1]			28,174,993	3,885,509
Stock issuance (in shares)	[1]								490,417
Proceeds from Pre-founded warrants		3,750,282					3,750,282						3,750,282	517,188
Restricted shares issued for management		26,188,928					26,191,707		¥ 690	[1]	¥ 2,089	[1]	¥ 26,191,707	$ 3,612,002
Restricted shares issued for management (in shares)									55,556	[1]	3,000,000	[2]
Stock issuance for convertible notes redemption (in shares)													9,225,338	9,225,338
Net income (loss) for the period					(59,167,301)		(59,167,301)	(2,309,091)					¥ (61,476,392)	$ (8,477,982)
Foreign currency translation adjustment						23,819,712	23,819,712						23,819,712	3,284,889
Ending Balance at Jun. 30, 2023		¥ 580,340,061		¥ 4,148,929	¥ (170,440,826)	¥ 35,127,173	¥ 449,206,962	¥ (10,056,059)	¥ 26,932	[1]	¥ 4,693	[1]	¥ 439,150,903	$ 60,561,679
Ending Balance (in shares) at Jun. 30, 2023									2,306,295	[1]	7,100,000	[2]

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

[2] Retrospectively restated for effect of changing in class of shares on April 5, 2021.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical)			12 Months Ended
	May 01, 2024	Mar. 29, 2024	Jun. 30, 2023
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Reverse stock split	0.056	0.056	0.2

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CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
Cash flows from operating activities:
Net income (loss)	¥ (61,476,392)	$ (8,477,982)	¥ 94,289,395	¥ (25,866,828)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	3,683,586	507,990	3,339,868	3,150,789
Loss (gain) from disposal of equipment	(12,782)	(1,763)	48,628	19,590
Gain in fair value changes of warrants liability	(6,116,000)	(843,435)	(174,485,575)	(35,365,792)
Amortization of offering cost of warrants	1,483,306	204,557	0	12,584,024
Allowance for (net recovery of) credit losses	(9,038,985)	(1,246,533)	(658,823)	8,191,247
Allowance for slow moving inventories	484,644	66,835	266,285	654,673
Impairment loss of property and equipment and other long-lived assets	1,009,124	139,165	0	768,312
Impairment loss on goodwill and intangible assets	9,980,002	1,376,305	2,266,893	0
Amortization of right of use assets	3,252,066	448,480	3,138,518	1,866,803
Restricted shares issued for management and employees	26,191,707	3,612,002	39,263,485	6,140,037
Restricted shares issued for services	5,805,840	800,662	8,935,919	0
Remeasurement gain of previously held equity interests in connection with step acquisition			0	(979,254)
Loss (income) from investment in unconsolidated entity	0	0	(15,411)	266,707
Deferred tax benefit			(624,087)	(425,913)
Interest expenses related to convertible notes			0	430,416
Accrued interest income from loans to third parties	(7,997,961)	(1,102,969)	(270,563)	0
Accrued interest income from short-term investment	(2,901,955)	(400,198)	0	0
Changes in operating assets and liabilities:
Notes receivable	7,085,917	977,193	(4,522,674)	(2,124,748)
Accounts receivable	(495,784)	(68,372)	3,811,866	18,326,410
Accounts receivable-related party			0	3,409,912
Inventories	(2,373,013)	(327,253)	(689,291)	(2,502,263)
Other receivables	(1,307,694)	(180,339)	285,786	(338,468)
Other receivables-related parties	(64,122)	(8,843)	0	0
Purchase advances	(2,575,198)	(355,136)	865,430	(899,371)
Contract costs	(14,236,539)	(1,963,309)	15,422,513	(21,944,876)
Prepaid expense	70,164	9,676	(274,215)	143,354
Prepaid expense - related parties	275,000	37,924	158,000	(433,000)
Operating lease liabilities	(3,061,303)	(422,173)	(1,594,702)	(2,762,949)
Accounts payable	(1,710,898)	(235,944)	(5,523,938)	(2,109,944)
Other payables	2,270,104	313,062	(6,329,042)	5,685,188
Other payables-related parties	352,260	48,579	969,468	(2,577,610)
Contract liabilities	641,087	88,410	(5,578,999)	4,160,456
Accrued payroll and employees' welfare	131,971	18,200	296,065	(1,593,822)
Taxes payable	(1,036,483)	(142,938)	961,964	76,452
Net cash used in operating activities	(51,688,331)	(7,128,147)	(26,247,237)	(34,050,468)
Cash flows from investing activities:
Purchases of property and equipment	(940,673)	(129,725)	(692,206)	(522,416)
Proceeds from disposal of equipment	31,950	4,406	0	0
Repayments of loans to third parties	40,113,311	5,531,879	171,435,032	5,150,377
Payments made for loans to third parties	(103,146,761)	(14,224,589)	(171,071,510)	(51,638,458)
Payments for short-term investments	(290,051,964)	(39,999,995)	0	0
Redemption of short-term investments	108,769,464	14,999,995	0	0
Step acquisition of FGS, net of cash			0	471,843
Net cash used in investing activities	(245,224,673)	(33,818,029)	(328,684)	(46,538,654)
Cash flows from financing activities:
Proceeds from short-term bank loans	13,491,481	1,860,560	10,000,000	16,020,000
Repayments of short-term bank loans	(11,040,000)	(1,522,486)	(15,000,000)	(10,540,000)
Proceeds from short-term borrowings			0	3,660,000
Repayments of short-term borrowings			(530,000)	(3,360,000)
Proceeds from short-term borrowings-related parties	15,013,115	2,070,403	11,100,000	18,400,000
Repayments of short-term borrowings-related parties	(9,000,000)	(1,241,157)	(14,770,000)	(15,950,000)
Proceeds from long-term borrowings-related party			0	0
Repayments of long-term borrowings-related party	(1,499,667)	(206,813)	(892,701)	(816,952)
Proceeds from warrants issued with common stock	17,493,069	2,412,405	0	212,051,414
Proceeds from sale of ordinary shares, net of issuance costs	28,174,993	3,885,509	0	81,091,141
Proceeds from sale of prefunded warrants, net of issuance costs	3,750,282	517,188	93,321	30,276,569
Proceeds from stock issuance for warrants exercised			0	21,130,035
Proceeds from issuance of convertible notes			0	42,014,616
Capital contribution by non-controlling shareholders	0	0	0	50,000
Net cash provided by (used in) financing activities	56,383,273	7,775,609	(9,999,380)	394,026,823
Effect of exchange rate fluctuation on cash and restricted cash	27,688,659	3,818,441	10,275,148	224,365
Net increase (decrease) in cash and restricted cash	(212,841,072)	(29,352,126)	(26,300,153)	313,662,066
Cash and restricted cash at beginning of year	317,698,417	43,812,615	343,998,570	30,336,504
Cash and restricted cash at end of year	104,857,345	14,460,489	317,698,417	343,998,570
Supplemental cash flow information
Cash paid during the year for interest	1,200,699	165,584	1,427,174	1,682,863
Cash paid during the year for taxes	18,339	2,529	10,214	(98,338)
Reconciliation of cash and restricted cash, beginning of year
Cash	316,974,857	43,712,832	343,998,570	30,336,504
Restricted cash	723,560	99,783	0	0
Cash and restricted cash at beginning of year	317,698,417	43,812,615	343,998,570	30,336,504
Cash	104,125,800	14,359,604	316,974,857	343,998,570
Restricted cash	731,545	100,885	723,560	0
Cash and restricted cash at end of year	104,857,345	14,460,489	317,698,417	343,998,570
Non-cash investing and financing activities
Issuance of common stock in exchange of shares of FGS, net of issuance costs			0	1,689,807
Cancellation of common stock issued prior years in exchange of shares of FGS , net of issuance costs			0	(1,689,807)
Issuance of common stock in exchange of shares of Starry, net of issuance costs			0	27,675,450
Cancellation of shares issued to Starry Lab			(27,675,450)	0
Conversion of convertible notes to 9,225,338 shares of ordinary shares			0	42,435,669
Right-of-use assets obtained in exchange for operating lease obligations	75,182	10,368	937,672	7,242,819
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement	62,357	8,599	0	0
Inventories transferred to and used as fixed assets	¥ (65,456)	$ (9,027)	0	302,795
Receivable for disposal of property and equipment			3,000	0
Capital contribution receivable due from non-controlling Interest			0	50,000,000
Other payable due to non-controlling interest converted into capital contribution			¥ 1,130,000	¥ 0

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	12 Months Ended
	Jun. 30, 2023 shares
CONSOLIDATED STATEMENTS OF CASH FLOWS
Stock issuance for convertible notes redemption (in shares)	9,225,338

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ORGANIZATION AND NATURE OF OPERATIONS

12 Months Ended

Jun. 30, 2023

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Organization – Recon Technology, Ltd (the “Company”, “We” or “Our”) was incorporated under the laws of the Cayman Islands on August 21, 2007 as a limited liability company. By far, the Company provides specialized equipment, automation systems, tools, chemicals, outsourcing platform services and field services to energy industry companies mainly in the People’s Republic of China (the “PRC”).

The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), conducts its business through the following PRC legal entities (“Domestic Companies”) that operate in the Chinese energy industry:

1. Beijing BHD Petroleum Technology Co., Ltd. (“BHD”),

2. Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).

The Company has signed Exclusive Technical Consulting Service Agreements with each of the Domestic Companies, and Equity Interest Pledge Agreements and Exclusive Equity Interest Purchase Agreements with their shareholders (collectively the “VIE Agreements”). Pursuant to these VIE Agreements, the Company has the ability to substantially influence each of the Domestic Companies’ daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder approval. The VIE agreements are designed to render the Company as the primary beneficiary of and entitle the Company of rights to consolidate each Domestic Company for accounting purposes. We believe that the Domestic Companies should be treated as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation and we are regarded as the primary beneficiary of the VIEs.

On February 21, 2019, the Company’s board of directors approved transferring the VIEs and VIE-controlled companies from Jining Recon Technology Ltd. (“Recon-JN”) to Recon-BJ. At the time, both Recon-JN and Recon-BJ were the Company’s wholly owned subsidiaries in China. On April 1, 2019, the Company completed the VIE transfer process and then completed the dissolution of Recon-JN on April 10, 2019, and subsequently completed the dissolution of Recon Technology Co., Limited (“Recon HK”) on May 15, 2020. The Company does not expect any negative impact of this process on its operations.

On December 17, 2015, Huang Hua BHD Petroleum Equipment Manufacturing Co., Ltd (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the design, assemble and manufacture of hearing equipment.

Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established on May 23, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥27,495,000 ($3,791,734) as of June 30,2023. BHD owned an equity interest of 49% of Gan Su BHD, and the remaining 51% equity interests was owned by an individual shareholder upon incorporation of Gan Su BHD. On September 25, 2017, the individual shareholder became the minority shareholder by transferring 2.0% equity shares to BHD. On April 26, 2021, the minority shareholder of Gan Su BHD transferred 15.4% of her equity interest to BHD. On May 19, 2021, the minority shareholder transferred 3.6% of her equity interest and BHD transferred 15.4% of its equity interest of Gan Su BHD to Nanjing Recon. There was no consideration paid for the transfers, and after the transfers, BHD owns equity an interest of 51% and Nanjing Recon owns an equity interest of 19% of Gan Su BHD, which is focusing on oilfield sewage treatment and oily sludge disposal projects.

Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established on October 16, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥4,200,000 ($579,206) as of June 30, 2023. BHD owned an equity interest of 55% of Qinghai BHD previously; however, based on an agreement signed by the shareholders of Qinghai BHD dated October 23, 2018, each of the other two individual shareholders agreed to reduce 10% of their equity interests. 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. The remaining paid in capital should be contributed by BHD and the other individual shareholder is ¥33,300,000 ($4,827,276) and ¥12,500,000 ($1,812,041) respectively. Based on its charter dated September 29, 2017, the remaining capital will be injected before September 29, 2036.

As the energy consumption market opened to private and foreign companies, and online payment technology developed, the Domestic Companies began to invest in the downstream of the oil industry. On December 15, 2017, BHD and Nanjing Recon entered into a subscription agreement with Future Gas Station (Beijing) Technology, Ltd (“FGS”), pursuant to which the Domestic Companies acquired an 8% equity interest in FGS. Established in January 2016, FGS is a service company focusing on providing new technical applications and data operations to gas stations and provides solutions to gas stations to improve their operations and their customers’ experience. On August 21, 2018, the Domestic Companies entered into an investment agreement and a supplemental agreement (collectively, the “Investment Agreement”) with FGS and the other shareholders of FGS. Pursuant to the Investment Agreement, our VIEs’ ownership interest in FGS shall increase from 8% to 43%, in exchange for their investment in FGS for a total amount of ¥10 million in cash and the issuance of 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the other shareholders of FGS with certain conditions. As of June 30, 2019, the Domestic Companies invested an aggregate amount of ¥35,116,707 in FGS and issued 487,057 (27,059 shares post 2024 Reverse Split) restricted shares in total to other shareholders of FGS, and the Domestic Companies’ ownership interest in FGS has increased to 43%. 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. The transaction has been 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. Through the fourth supplemental agreement, the Domestic Companies waived the requirement on FGS’ performance goal about the number of gas stations. Accordingly, the Domestic Companies agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, in exchange of the additional 8% equity ownership of FGS.

The VIE contractual arrangements

The Company’s main operating entities, the Domestic Companies, are controlled through contractual arrangements by the Company.

A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE, because it met the condition under accounting principles generally accepted in the United States of America (“U.S. GAAP”) to consolidate the VIE.

The Company is deemed to have a controlling financial interest in and be the primary beneficiary of the Domestic Companies because it has both of the following characteristics:

● The power to direct activities of the Domestic Companies that most significantly impact such entities’ economic performance, and

● The obligation to absorb losses of, and the right to receive benefits from, the Domestic Companies that could potentially be significant to such entities.

Pursuant to these contractual arrangements, the Domestic Companies shall pay service fees equal to all of their net profit after tax payments to the Company. Accordingly, the Company has the right to absorb 90% of net interest or 100% of net loss of those Domestic Companies for accounting purposes. Such contractual arrangements are designed so that the operations of the Domestic Companies are solely for the benefit of the Company, and therefore the Company must consolidate the Domestic Companies under U.S. GAAP.

Risks associated with the VIE structure

The Company believes that the contractual arrangements with the VIEs and the shareholders of the VIEs are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

● revoke the business and operating licenses of the Company’s PRC subsidiary and the VIEs;

● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and the VIEs;

● limit the Company’s business expansion in China by way of entering into contractual arrangements;

● impose fines or other requirements with which the Company’s PRC subsidiary and the VIEs may not be able to comply;

● require the Company or the Company’s PRC subsidiary and the VIEs to restructure the relevant ownership structure or operations; or

● restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China.

The Company’s ability to conduct its businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exercise its rights as the primary beneficiary over the VIEs and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and the VIEs. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs and the VIEs’ subsidiaries. However, when the VIEs and the VIEs’ subsidiaries ever need financial support, the Company or its subsidiaries has, at its option and subject to statutory limits and restrictions, provided financial support to the VIEs and the VIEs’ subsidiaries through loans to the VIEs and the VIEs’ subsidiaries.

Nature of Operations – The Company engages in (1) providing equipment, tools and other components and parts related to oilfield production and other energy industries companies, including simple installations in connection with some projects; (2) services to improve production and efficiency of exploited oil wells, (3) developing and selling its own specialized industrial automation control and information solutions, (4) design, test and implement solution of sewage and oily sludge treatment, production and sales of related integrated equipment and project services, and (5) development, upgrading and maintenance of the online operation and cooperation platform of gas stations, marketing and promotion services, etc.

Impact of COVID-19 - In January 2020, the World Health Organization declared the COVID-19 outbreak a global health emergency as the coronavirus outbreak continued to spread beyond China. In compliance with the government health emergency rules in place, the Company temporarily closed offices in varies provinces in China and ceased production operations since Chinese New Year. The Company gradually resumed operation and production since March 2020. For fiscal year 2023, either the Company or its clients’ operations occasionally affected by regional outbreaks, causing some of its business is still not return to prior level. In early December 2022, China announced a nationwide loosening of its zero-covid policy, and the country faced a wave in infections after the lifting of these restrictions. Although, the spread of the COVID-19 appeared to be under control currently, the extent of the future impact of COVID-19 is still highly uncertain and cannot be predicted. In short term, the Company’s business was affected negatively, and collection of receivables were also affected. However, at this stage, the Company doesn’t expect a significant impact on the Company’s operations and financial results in a long run.

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SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and are expressed in United States dollars (“US dollars”).

Principles of Consolidation - The consolidated financial statements include the accounts of the Company, all the subsidiaries, VIEs and subsidiaries of VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.

Variable Interest Entities - 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. 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. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.

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.

Currency Translation - The Company’s functional currency is US dollars and the consolidated financial statements have been expressed in Chinese Yuan (“RMB”) as RMB is the Company’s reporting currency. The consolidated financial statements as of and for the year ended June 30, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.2513 = US$1.00, the approximate exchange rate prevailing on June 30, 2023. These translated U.S. dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into US dollars.

Estimates and Assumptions - The preparation of the consolidated financial statements in conformity with U.S. 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 are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for credit losses related to accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, goodwill and investment in unconsolidated entity, the discount rate for lease and investment, valuation of the convertible notes, price purchase allocation for business combination and the fair value of share-based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.

The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for credit losses related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. 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. 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 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.

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.

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. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

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 of the long-term borrowings due to related party approximate its fair value because the stated interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable credit risk and maturities.

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

Restricted cash - Restricted cash represents funds set aside and placed with the bank and serves as the security deposit which is not available to fund general liquidity needs of the Company.

Short-term investments - Short-term investments include wealth management products, which are certain deposits with fixed interest rates and the principal are guaranteed by the financial institutions. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities within one year. The interest earned is recognized in the consolidated statements of operations and comprehensive income (loss) as interest income. As of June 30, 2022 and 2023, the Company had short-term investments balance of ¥nil and ¥184.2 million ($25.4 million), including accrued interests of ¥nil and ¥2.9 million ($400,198), respectively.

Accounts Receivables, 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. In July 2020, the Company adopted ASU 2016-13, Topics 326-Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, as its accounting standard for its accounts receivable and other receivables. Other receivables and loan to third parties arise from transactions with non-trade customers.

The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of July 1, 2020. Accounts receivable, other receivables and loan to third parties are recognized and carried at carrying amount less an allowance for credit loss, if any. 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, the potential impact of the COVID-19 pandemic on our customers businesses and their ability to pay their accounts receivable, other receivables and loan to third parties. 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, 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. The net recovery of provision for credit loss for the year ended June 30, 2023 increased by approximately ¥7.3 million ($1.0 million) from the year ended June 30, 2022.

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. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company considers in determining whether to discontinue sales, record as contra revenue or allowance for credit losses:

● the oil price and fluctuation of the overall oil industry;

● the customer fails to comply with its payment schedule;

● the customer is in serious financial difficulty;

● a significant dispute with the customer has occurred regarding job progress or other matters;

● the customer breaches any of the contractual obligations;

● the customer appears to be financially distressed due to economic or legal factors;

● the business between the customer and the Company is not active; and

● other objective evidence indicates non-collectability of the accounts receivable, other receivables and loan to third parties.

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.

Notes Receivable - Notes receivable represent short-term notes receivable the Company receives from its customers as payment for amounts owed to the Company in normal course of business operation. The notes receivable are issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally ranges from three to six months from the date of issuance.

Purchase Advances, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

Inventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Market value of the inventories is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.

Property and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.

Items	Useful life
Motor vehicles	3-5 years
Office equipment and fixtures	2-5 years
Production equipment, including:
Equipment	10 years
Utilities and Facilities	20 years
Leasehold improvement	Lesser of useful life and lease term

Construction in progress includes property and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognized impairment loss. Construction in progress is classified to the appropriate category of property and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment. Impairment loss on goodwill was ¥nil, ¥2,266,893 and ¥4,730,002 ($652,297) for the years ended June 30, 2021, 2022 and 2023, respectively.

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Impairment for the long-lived assets was ¥768,312, ¥nil and ¥6,259,124 ($863,173) for the years ended June 30, 2021, 2022 and 2023, respectively.

Long-term Investments - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance requires modified retrospective application to all outstanding instruments for fiscal years beginning after December 15, 2017, with a cumulative effect adjustment recorded to opening accumulated deficit as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value would be applied prospectively. The Company adopted the new financial instruments accounting standard from July 1, 2018.

-      Equity Investments with Readily Determinable Fair Values - Equity investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements.

-      Equity Investments without Readily Determinable Fair Values - After the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying value of the equity investments in current earnings. Changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a “reasonable effort” to identify price changes that are known or that can reasonably be known.

-      Equity Investments Accounted for Using the Equity Method - The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately held entities, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the years ended June 30, 2021, 2022 and 2023. The Company recorded a ¥266,707 investment loss, ¥15,411 investment income and nil investment income on its equity method investment in unconsolidated entities during the years ended June 30, 2021, 2022 and 2023, respectively.

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

Non-controlling Interests - For the Company’s majority-owned subsidiaries, VIEs and subsidiaries of VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operation and comprehensive income (loss) to distinguish the interests from that of the Company.

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 core principle underlying the new revenue recognition Accounting Standards Update (“ASU”) is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. 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.

Disaggregation of Revenue

Revenue are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following items represent the Company’s revenue disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.

The Company’s disaggregation of revenue for the years ended June 30, 2021, 2022 and 2023 is disclosed in Note 25.

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. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.

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. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.

Oilfield Environmental Protection Service

The Company provides wastewater treatment products and related service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue when products are delivered, on-site assistance services rendered, and acceptance reports are signed off by customers. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

The Company provides oily sludge disposal and treatment services to oilfield companies and generates revenue from treatment services of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using output method, based on the percentage-of-completion method. 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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. 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. 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. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.

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
	2022		2023		2023
	RMB		RMB		US Dollars
Contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386
Contract liabilities	¥	2,107,277	¥	2,748,365	$	379,017

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. 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.

-      Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients’ initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client’s individual project construction arrangement), the Company records revenue based on the contract or the final clients’ acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.

Contract Liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. 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 recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. 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. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.

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). Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. 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, 2023. The amount of revenue recognized during the years ended June 30, 2021, 2022 and 2023 that was previously included within contract liability balances was ¥1,899,561, ¥7,390,276 and ¥1,901,277 ($262,198), respectively.

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.

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. As the Company’s contracts are majorly less than one year in length, consideration will not be adjusted. For the Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts. There are also some new contracts that will not be completed within one year from year 2022, the Company did calculation and the amount was not material as end of this fiscal year.

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 has elected to recognize compensation expenses using the valuation model estimated at the grant date based on the award’s fair value.

Research and Development Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥444,824, ¥537,371 and ¥789,932 ($108,937) for the years ended June 30, 2021, 2022 and 2023, respectively.

Leases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces and land use rights, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of June 30, 2022 and 2023.

Income Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2022 and 2023.

As of June 30, 2023, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.

Comprehensive Income (Loss) - Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$ to RMB is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

Earnings (Loss) per Share - Earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of Ordinary Shares outstanding. Diluted EPS are computed by dividing net income (loss) by the weighted-average number of Ordinary Shares and dilutive potential Ordinary Share equivalents outstanding. Potentially dilutive Ordinary Shares consist of Ordinary Shares issuable upon the conversion of ordinary share options, restricted shares and warrants (using the treasury share method).

The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2021, 2022 and 2023:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Numerator:
Net income (loss) attributable to Recon Technology, Ltd	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Denominator:
Weighted-average number of ordinary shares outstanding – basic*		760,116		1,721,529		2,157,158		2,157,158
Class A Ordinary Shares*		760,116		1,612,427		1,880,065		1,880,065
Class B Ordinary Shares**		—		109,102		277,093		277,093
Outstanding options/warrants*		584,571		585,357		1,115,088		1,115,088
Potentially dilutive shares from outstanding options/warrants		—		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		760,116		1,721,529		2,157,158		2,157,158
Earnings (loss) per share – basic and diluted*	¥	(30.04)	¥	55.52	¥	(27.43)	$	(3.78)

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

** The Class B Ordinary Shares were not subjected to reverse stock split, and each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof, so the weighted average number of Class B Ordinary Shares is calculated on a one-for-eighteen basis of issued and outstanding Class B Ordinary Shares.

Warrants - The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Class A Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

Reclassification - Certain prior year amounts related to land use rights on the balance sheets and cash flows statements had been reclassified to conform to the current period presentation. These reclassifications have no effect on the results of operations previously reported.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

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ACCOUNTS RECEIVABLE, NET

12 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Accounts receivable	¥	27,206,752	¥	27,606,257	$	3,807,077
Allowance for credit losses		(4,628,772)		(152,842)		(21,078)
Total third-parties, net	¥	22,577,980	¥	27,453,415	$	3,785,999

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties- long-term	RMB		RMB		US Dollars
Accounts receivable	¥	4,983,698	¥	842,607	$	116,201
Allowance for credit losses		(4,983,698)		(842,607)		(116,201)
Total third-parties, net	¥	—	¥	—	$	—

Provision for credit losses of accounts receivable due from third parties was ¥3,730,606 and ¥153,329 for the years ended June 30, 2021 and 2022, respectively. Net recovery of provision for credit losses of accounts receivable due from third parties was ¥8,767,356 ($1,209,073) for the year ended June 30, 2023.

The decrease in allowance for credit losses of accounts receivable due from third parties was mainly resulted by the management’s efforts in collection receivables from our customers, and as the date of this report, approximately 54.7%, or ¥15.0 million ($2.1 million) of net outstanding balance as of June 30, 2023 has been collected as of the date of the report.

Movement of allowance for doubtful accounts is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	9,315,427	¥	9,612,470	$	1,325,619
Charge to (reversal of) allowance		153,329		(8,767,356)		(1,209,073)
Foreign currency translation adjustments		143,714		150,335		20,733
Ending balance	¥	9,612,470	¥	995,449	$	137,279

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NOTES RECEIVABLE

12 Months Ended

Jun. 30, 2023

NOTES RECEIVABLE

NOTES RECEIVABLE

NOTE 4. NOTES RECEIVABLE

Notes receivable represented the non-interest-bearing commercial bills the Company received from the customers for the purpose of collection of sales amounts, which ranged from three to six months from the date of issuance. As of June 30, 2022 and 2023, notes receivable was ¥10,828,308 and ¥3,742,390 ($516,099), respectively. As of June 30, 2022 and 2023, no notes were guaranteed or collateralized. As of the date of this report, 85.0%, or ¥3.2 million ($0.4 million) have been subsequently collected, and the remaining balance is expected to be collected by December 2023.

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OTHER RECEIVABLES, NET

12 Months Ended

Jun. 30, 2023

OTHER RECEIVABLES, NET

OTHER RECEIVABLES, NET

NOTE 5. OTHER RECEIVABLES, NET

Other receivables, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Business advances to officers and staffs (A)	¥	1,441,807	¥	854,162	$	117,795
Deposits for projects		3,259,236		1,247,992		172,106
VAT recoverable		437,095		690,053		95,163
Others		2,547,520		1,392,126		191,983
Allowance for credit losses		(619,444)		(1,994,960)		(275,118)
Subtotal		7,066,214		2,189,373		301,929
Less: Long term portion (B)		(1,564,381)		(3,640)		(502)
Other receivable - current portion	¥	5,501,833	¥	2,185,733	$	301,427

(A) Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Net recovery of provision for credit losses of other receivables was ¥187,161 and ¥294,644 for the years ended June 30, 2021 and 2022, respectively. Provision for credit losses of other receivables was ¥1,375,516 ($189,692) for the year ended June 30, 2023.

Movement of allowance for credit losses is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	918,153	¥	619,444	$	85,426
Charge to (reversal of) allowance		(294,644)		1,375,516		189,692
Less: written off		(4,065)		—		—
Ending balance	¥	619,444	¥	1,994,960	$	275,118

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LOANS TO THIRD PARTIES

12 Months Ended

Jun. 30, 2023

LOANS TO THIRD PARTIES

LOANS TO THIRD PARTIES

NOTE 6. LOANS TO THIRD PARTIES

Loans to third parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Working fund to third party companies	¥	50,383,822	¥	123,055,874	$	16,970,181
Loans to third parties	¥	50,383,822	¥	123,055,874	$	16,970,181

Loans to third parties are mainly used for short-term funding to support the Company’s external business partners and at the same time the Company can earn interest income from these loans. Most of these loans bear interest or no interest and have terms of no more than one year, except one of the loans to third party has term of one and half year. The Company periodically reviewed the loans to third parties as to whether their carrying values remain realizable. The Company believes that the risk associated with the above loans are relatively low based on the evaluation of the creditworthiness of these third-party debtors and the relationships with them. As the date of the report, approximately 8.3%, or ¥10.2 million ($1.4 million) was collected by the Company and the remaining part was expected to be paid in full by end of June 2024.

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CONTRACT COSTS, NET

12 Months Ended

Jun. 30, 2023

CONTRACT COSTS, NET

CONTRACT COSTS, NET

NOTE 7. CONTRACT COSTS, NET

Contract costs, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Contract costs	¥	37,922,302	¥	52,158,840	$	7,193,033
Allowance for credit losses		(4,063,482)		(2,586,155)		(356,647)
Total contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386

As of June 30, 2023, total contracts costs, net amounted to ¥49,572,685 ($6,836,386), of which 23.2%, or ¥11.5 million ($1.6 million) have been subsequently realized as of the date of the report, and the remaining balance is expected to be utilized by June 2024.

Provision for credit losses of contract was ¥4,647,802 for the year ended June 30, 2021. Net recovery of provision for credit losses of contract cost was ¥552,008 and ¥1,720,095 ($237,212) for the years ended June 30, 2022 and 2023, respectively. As the progress of these contracts was delayed by the COVID-19 pandemic previously, the Company records allowance for credit losses of contract cost according to its general accounting policy. Since the pandemic is relatively under control now, most of our projects has resumed their progress and the contract costs were realized, hence, resulted in a decrease in allowance for credit losses of contract cost. The Company will continue making great efforts to prevent any unrealizable of contract costs from third parties.

Movement of allowance for credit losses of contract costs is as follows:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	4,548,910	¥	4,063,482	$	560,380
Reversal of allowance		(552,008)		(1,720,095)		(237,212)
Charge to cost of sales		66,580		242,768		33,479
Ending balance	¥	4,063,482	¥	2,586,155	$	356,647

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PROPERTY AND EQUIPMENT, NET

12 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

NOTE 8. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Motor vehicles	¥	5,312,274	¥	5,176,175	$	713,827
Office equipment and fixtures		1,442,395		1,440,819		198,698
Production equipment		31,102,055		31,115,843		4,291,071
Leasehold improvement		—		2,260,000		311,668
Total cost		37,856,724		39,992,837		5,515,264
Less: accumulated depreciation		(11,614,250)		(14,297,511)		(1,971,717)
Less: accumulated impairment		(768,312)		(942,462)		(129,971)
Property and equipment, net	¥	25,474,162	¥	24,752,864	$	3,413,576
Construction in progress	¥	239,739	¥	—	$	—

Construction in progress pertains to infrastructure built for the Company’s oily sludge treatment projects.

Depreciation expenses were ¥2,773,122, ¥2,611,854 and ¥2,983,586 ($411,456) for the years ended June 30, 2021, 2022 and 2023, respectively.

Impairment loss for the property and equipment was ¥768,312, ¥nil and ¥174,150 ($24,017) for the years ended June 30, 2021, 2022 and 2023, respectively. As the Company’s certain properties and equipment were not able to generate enough future cashflow. Thus the Company decided to record full impairment of those properties and equipment.

Loss from property and equipment disposal was ¥19,590 and ¥48,628 for the years ended June 30, 2021 and 2022, respectively. Income from property and equipment disposal was ¥12,782 ($1,763) for the year ended June 30, 2023.

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

12 Months Ended

Jun. 30, 2023

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

NOTE 9 . BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

(U) Step Acquisition of Future Gas Station (Beijing) Technology, Ltd (“FGS”)

On August 21, 2018, the Company entered into a definitive investment agreement and a supplemental agreement (collectively, the “Agreement”) with FGS and the other shareholders of FGS. Following full performance under the Agreement, Recon will own 43% of FGS. As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares of the Company (the “Restricted Shares”) to the other shareholders of FGS within 30 days after FGS finalizes recording the Company’s corresponding interest at the local governmental agency. If FGS does not reach certain performance goals, the Company has the right to cancel all of the Restricted Shares and without further payment. The Restricted Shares are also subject to lock-up period requirements that vary for each of FGS shareholders, from one year to three years following issuance of the Restricted Shares. FGS has finalized recording Recon’s corresponding interest at the local governmental agency, and Recon has issued 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares in total to the other shareholders of FGS in August 2018.

On September 24, 2019, the Company signed an extension agreement with FGS and the other shareholders of FGS to postpone the Agreement to provide extra period for FGS to further fulfill the goals mentioned on the supplemental agreement. During the original contract period, FGS adjusted its operation model with an advanced improvement of its mobile applications and business model. Objected user and average Gross Merchandise Volume (“GMV”) of FGS’ mobile applications have been exceeded. FGS will need an extension to deploy its business in more provinces to complete a goal of 200 more gas stations.

On March 17, 2020, the Company signed a new supplemental agreement with FGS and the other shareholders of FGS to extend another 12 months to February 2021 for FGS and its shareholders to fulfill the goals mentioned on the supplemental agreement.

As of December 31, 2020, the Company owned 43% of the equity interests of FGS. The investments are accounted for using the equity method because the Company has significant influence, but no control of FGS.

On February 8, 2021, and pursuant to FGS’ shareholder meeting resolution dated January 13, 2021 (“Acquisition Date”), two of the Company’s subsidiaries entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS, as an exchange for waiver of the requirement on FGS’ performance goal about the number of gas stations and cancellation of the related lock-up terms on the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares of the Company (reflecting the effect of one-for-five reverse share split) issued per the agreement signed on August 21, 2018. FGS failed to complete one of the three goals set up in the investment agreement. As a consequence, the Company shall cancel one third of the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares, which shall be 162,352 (9,020 shares post 2024 Reverse Split) Restricted Shares. According to this new arrangement, the Company waived the goals and cancellation of the shares as a deemed consideration of the 8% equity. Based on the share price $1.61 ($28.98 post 2024 Reverse Split) on January 13, 2021, the fair value of the waived performance goal equals to ¥1,689,807 ($261,667). As a result, the Company owns 51% interest of FGS and this transaction was considered as a step acquisition under ASC 805 “Business Combinations”. A step acquisition gain of ¥979,254 arising from revaluation of previously held equity interest was recognized during the year ended June 30, 2021.

The Company retained independent appraisers to advise management in the determination of the fair value of customers relationship and goodwill. The values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date. The carrying value of other assets and liabilities other than customer relationship and goodwill, are approximate at their fair value as of the Acquisition Date.

The fair values of the identifiable assets and liabilities as at the date of the acquisitions are summarized in the following table:

	RMB		US Dollars
Cash	¥	471,843	$	65,070
Accounts receivable, net		831,049		114,607
Other receivables, net		144,285		19,898
Contract costs, net		75,250		10,377
Prepaid expenses		91,132		12,568
Property and equipment, net		118,130		16,291
Intercompany receivables*		6,850,000		944,658
Intangible assets- customer relationship		7,000,000		965,344
Goodwill		6,996,895		964,916
Accounts payable		(1,032,078)		(142,330)
Other payables		(1,273,182)		(175,580)
Other payable- related parties		(479,959)		(66,189)
Deferred revenue		(39,786)		(5,487)
Accrued payroll and employees’ welfare		(1,629,519)		(224,721)
Taxes payable		(64,253)		(8,861)
Deferred tax liability		(1,050,000)		(144,801)
Total	¥	17,009,807	$	2,345,760
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		233,035
Fair value of previously held equity interest		30,530,000		4,210,280
Non-controlling interest		34,790,000		4,797,760
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(6,895,315)
Total	¥	17,009,807	$	2,345,760

*Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

The noncontrolling interest has been recognized at fair value net with subscription receivable on the acquisition date.

Goodwill and intangible assets

The excess of purchase price over the fair value of assets acquired and liabilities assumed of the business acquired was recorded as goodwill. The goodwill is not expected to be deductible for tax purposes. In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2021, 2022 and 2023, the management performed evaluation on the impairment of goodwill and recorded an impairment loss on goodwill of ¥nil, ¥2,266,893 and ¥4,730,002 ($652,297) for the years ended June 30, 2021, 2022 and 2023, respectively.

The identifiable goodwill acquired and the carrying value consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Goodwill	¥	6,996,895	¥	6,996,895	$	964,916
Less: impairment for goodwill		(2,266,893)		(6,996,895)		(964,916)
Goodwill, net	¥	4,730,002	¥	—	$	—

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of June 30, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
Intangible assets - customer relationship	¥	7,000,000	$	965,344	10
Less: accumulated amortization		(1,750,000)		(241,336)
Less: impairment		(5,250,000)		(724,008)
Intangible assets - customer relationship, net	¥	—	$	—

The amortization expense of customer relationship was ¥350,000, ¥700,000 and ¥700,000 ($96,534) for the years ended June 30, 2021, 2022 and 2023, respectively.

Impairment loss for intangible assets - customer relationship was ¥nil, ¥nil and ¥5,250,000 ($724,008) for the years ended June 30, 2021, 2022 and 2023, respectively. As intangible assets - customer relationship was not able to generate enough future cashflow. Thus the Company decided to record full impairment of the intangible assets - customer relationship during the year ended June 30, 2023.

(b) Investment in Starry Blockchain Energy Pte. Ltd. (“Starry”)

On June 3, 2021, Company entered into a share exchange agreement (the “Agreement”) with Starry, an innovative blockchain and sustainable energy technological company, and the controlling shareholders of Starry (the “Starry Controlling Shareholders”) to acquire 30% of the equity interest in Starry. Pursuant to the terms of the Agreement, the signing parties agreed that the value of 30% of the equity interest in Starry is $3,000,000. As consideration to acquire Starry’s 30% equity interest, the Company issued 316,345 unregistered, restricted Class A Ordinary Shares, based on $9.48 per share, the average closing price in the 30 trading days prior to signing this Agreement, to the Starry Controlling Shareholders. Fair value of the shares issued on the investment date, which was June 3, 2021, was ¥27,675,450, or $4,327,600, based on the closing price of $13.80 per share. On November 10, 2021, this investment agreement was terminated based on a mutual decision and the 316,345 unregistered, restricted Class A Ordinary Shares was subsequently cancelled on December 10, 2021. The Company recorded an investment loss of ¥15,411 and an investment income of ¥15,411 during the years ended June 30, 2021 and 2022, respectively. On November 10, 2021, the Company signed a service agreement with Starry, and as the service consideration, the Company issued 500,000 restricted Class A Ordinary Shares to Starry (See Note 18).

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LEASES

12 Months Ended

Jun. 30, 2023

LEASES

LEASES

NOTE 10. LEASES

The Company leases office spaces and land use rights under non-cancelable operating leases, with terms ranging from one to fifty years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Rights of use lease assets, net	¥	6,666,759	¥	2,654,900	$	366,127
Operating lease liabilities – current		3,892,774		3,066,146		422,841
Operating lease liabilities – non-current		2,184,635		25,144		3,468
Total operating lease liabilities	¥	6,077,409	¥	3,091,290	$	426,309

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2023:

	June 30,		June 30,
	2022		2023
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	16.18		23.90
Weighted average discount rate	5.0	%	5.0	%

Operating lease costs and short-term lease costs for the year ended June 30, 2021 were ¥2,034,105 and ¥1,291,685, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2022 were ¥3,443,813 and ¥967,247, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2023 were ¥3,354,147 ($462,558) and ¥2,683,860 ($370,121), respectively.

Impairment loss for the ROU was ¥nil, ¥nil and ¥834,974 ($115,148) for the years ended June 30, 2021, 2022 and 2023, respectively. As ROU of FGS was not able to generate enough future cashflow. Thus the Company decided to record full impairment of the ROU during the year ended June 30, 2023.

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2023:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	3,110,862	$	429,008
2025		26,400		3,641
Total lease payments		3,137,262		432,649
Less: imputed interest		(45,972)		(6,340)
Present value of lease liabilities		3,091,290		426,309
Less: operating lease liabilities – current		3,066,146		422,841
Operating lease liabilities – non-current	¥	25,144	$	3,468

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OTHER PAYABLES

12 Months Ended

Jun. 30, 2023

OTHER PAYABLES

OTHER PAYABLES

NOTE 11. OTHER PAYABLES

Other payables consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Professional service fees	¥	2,061,016	¥	2,246,101	$	309,752
Distributors and employees		1,009,307		3,073,289		423,826
Accrued expenses		206,045		200,218		27,611
Others		257,550		299,402		41,289
Total	¥	3,533,918	¥	5,819,010	$	802,478

	June 30,		June 30,		June 30,
	2022		2023		2023
Related Parties	RMB		RMB		US Dollars
Expenses paid by the major shareholders	¥	1,396,419	¥	1,796,309	$	247,723
Due to family members of the owners of BHD and FGS		590,159		545,159		75,181
Due to management staff for costs incurred on behalf of the Company		253,557		250,927		34,604
Total	¥	2,240,135	¥	2,592,395	$	357,508

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TAXES PAYABLE

12 Months Ended

Jun. 30, 2023

TAXES PAYABLE

TAXES PAYABLE

NOTE 12. TAXES PAYABLE

Taxes payable consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
VAT payable	¥	1,741,972	¥	699,601	$	96,479
Income tax payable		440,030		440,030		60,683
Other taxes payable		28,956		23,375		3,224
Total taxes payable	¥	2,210,958	¥	1,163,006	$	160,386

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BANK LOANS

12 Months Ended

Jun. 30, 2023

BANK LOANS

BANK LOANS

NOTE 13. BANK LOANS

Short-term bank loans consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beijing Rural Commercial Bank (1)	¥	10,000,000	¥	—	$	—
Bank of Kunlun (2)		—		950,000		131,010
Industry and Commercial Bank of China (“ICBC”) (3)		—		10,000,000		1,379,064
China Construction Bank (4)		—		1,501,481		207,064
Total short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138

(1) On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥5,600,000 as working capital for one year, which will be due on April 12, 2023. On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥4,400,000 as working capital for one year, which will be due on May 12, 2023. All these loan bears a fixed interest rate of 4.6% per annum. These loans are guaranteed by one of the founders of the Company and he also pledged self-owned housing property with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. The loan was full repaid upon maturity.

(2) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($399,928) as working capital for eighteen months, with a maturity date of February 29, 2024. The loan has a fixed interest rate of 6.0% per annum. The Company made a withdrawal in an amount of ¥1,000,000 ($137,906) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($6,896). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company also pledged the accounts receivable from the contracts the Company entered into with CNPC as collateral for this loan, and the total value of the contracts are approximately ¥6.5 million (approximately $0.9 million).

(3) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,379,063) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($689,532) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($689,532) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans.

(4) On June 6, 2023, the Company entered into a loan agreement with China Construction Bank to borrow up to ¥1,500,000 ($207,064) as working capital for one year, with a maturity date of June 6, 2024. The loan has a fixed interest rate of 3.95% per annum.

Interest expense for the short-term bank loan was ¥602,124, ¥486,757 and ¥416,481 ($57,435) for the years ended June 30, 2021, 2022 and 2023, respectively.

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

12 Months Ended

Jun. 30, 2023

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

NOTE 14. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Short-term borrowings due to related parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Short-term borrowings due to related parties:	RMB		RMB		US Dollars
Short-term borrowing from a founder, 4.35% annual interest, due on November 17, 2022*	¥	4,006,767	¥	—	$	—
Short-term borrowing from a founder, 4.35% annual interest, due on December 26, 2022*		5,002,389		—		—
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023		—		10,004,055		1,379,622
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024		—		4,993,950		688,697
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024		—		5,020,217		692,320
Total short-term borrowings due to related parties	¥	9,009,156	¥	20,018,222	$	2,760,639

*    The Company repaid the loans in full on maturity date.

No short-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2022 and 2023.

Interest expense for short-term borrowings due to related parties were ¥ 433,281, ¥ 397,468 and ¥ 326,893 ($45,081) for the years ended June 30, 2021, 2022 and 2023, respectively.

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LONG-TERM BORROWINGS DUE TO RELATED PARTY

12 Months Ended

Jun. 30, 2023

LONG-TERM BORROWINGS DUE TO RELATED PARTY

LONG-TERM BORROWINGS DUE TO RELATED PARTY

NOTE 15. LONG-TERM BORROWINGS DUE TO RELATED PARTY

Long-term borrowings due to related party consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
Long-term borrowings due to related party:	RMB		RMB		US Dollars
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.	¥	6,510,606	¥	—	$	—
Less: current portion		(999,530)		—		—
Total long-term borrowings due to related party	¥	5,511,076	¥	—	$	—

No long-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2022 and 2023. The long-term loan was converted to a short-term loan due from related parties for lower interest rate during the year ended June 30, 2023 that is due on June 4, 2024.

Interest expense for long-term borrowings due to related party were ¥ 693,641, ¥617,611 and ¥472,593 ($65,174) for the years ended June 30, 2021, 2022 and 2023, respectively.

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CLASS A ORDINARY SHARES

12 Months Ended

Jun. 30, 2023

CLASS A ORDINARY SHARES

CLASS A ORDINARY SHARES

NOTE 16. CLASS A ORDINARY SHARES

Share offering

On December 10, 2019, the Company’s Board approved to effect a one-for-five reverse share split of its Class A Ordinary Shares (the “2019 Reverse Share Split”) with the market effective date of December 27, 2019, such that the number of the Company’s Class A Ordinary Shares is decreased from 100,000,000 to 20,000,000 and the par value of each Class A Ordinary Share is increased from US$0.0185 to US$0.0925 (¥0.62) (US$ 1.67 post 2024 Reverse Split). As a result of the Reverse Share Split, each five pre-split Class A Ordinary Shares outstanding were automatically combined and converted to one issued and outstanding Class A Ordinary Share without any action on the part of the shareholder. No fractional Class A Ordinary Shares were issued to any shareholders in connection with the reverse share split. Each shareholder was entitled to receive one Class A Ordinary Share in lieu of the fractional share that would have resulted from the reverse share split. As of December 26, 2019 (immediately prior to the effective date), there were 23,049,639 (1,280,536 shares post 2024 Reverse Split) Class A Ordinary Shares outstanding, and the number of Class A Ordinary Shares outstanding after the Reverse Share Split is 4,611,720 (256,207 shares post 2024 Reverse Split), taking into account of the effect of rounding fractional shares into whole shares. In addition, all options and any other securities of the Company outstanding immediately prior to the Reverse Share Split (to the extent they don’t provide otherwise) will be appropriately adjusted by dividing the number of Class A Ordinary Shares into which the options and other securities are exercisable by 5 and multiplying the exercise price thereof by 5, as a result of the Reverse Share Split.

On April 5, 2021, the Company held its annual general meeting of shareholders (the “Annual Meeting”) for the fiscal year ended June 30, 2020. At the Annual Meeting, the Company’s shareholders approved a special resolution that the authorized share capital of the Company be amended from US$1,850,000 divided into 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to US$15,725,000 divided into 150,000,000 (8,333,333 shares post 2024 Reverse Split) Class A Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) (US$ 1.67 post 2024 Reverse Split) each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) each. The change from Ordinary Shares to Class A Ordinary Shares is reflected with the NASDAQ Capital Market and in the marketplace at the open of business on April 12, 2021, whereupon the Class A Ordinary Shares began trading. The Company’s Class A Ordinary Shares will continue to trade on the NASDAQ Capital Market under the symbol “RCON” and under the CUSIP Number of G7415M124. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall be entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

On June 14, 2021, the Company and certain institutional investors (the “Purchasers”) entered into that certain securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 6,014,102 (334,117 shares post 2024 Reverse Split) Class A Ordinary Shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share and 2,800,000 (155,556 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase Class A Ordinary Shares in a registered direct offering, and warrants to purchase up to 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $55.0 million before deducting the placement agent’s fees and other offering expenses in an aggregate amount of ¥30,408,264, or $4.7 million.

On March 15, 2023, the Company and certain institutional investors (the “Purchasers”) entered into that certain securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers 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 and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase Class A 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.

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of June 30, 2023:

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	81,667	$	0.18	5.46
Issued	—		—	—
Forfeited	—		—	—
Exercised	(81,667)	$	0.18	—
Expired	—		—	—
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22

Appropriated Retained Earnings

According to the Memorandum and Articles of Association, the Company is required to transfer a certain portion of its net profit, as determined under PRC accounting regulations, from current net income to the statutory reserve fund. In accordance with the PRC Company Law, companies are required to transfer 10% of their profit after tax, as determined in accordance with PRC accounting standards and regulations, to the statutory reserves until such reserves reach 50% of the registered capital or paid-in capital of the companies. As of June 30, 2022 and 2023, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($572,163), respectively.

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

12 Months Ended

Jun. 30, 2023

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

NOTE 17. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

In May and June 2020, the Company consummated two offerings. In connection with the offering, the Company issued to the investors warrants to purchase an aggregate of 911,112 (50,617 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $2.25 ($40.50 post 2024 Reverse Split) per Class A Ordinary Share, which was amended to $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share on the second offering on June 30, 2020. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 26, 2020 and expire on November 25, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,689,389. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.40%), (2) expected warrant life of 5.5 years, (3) expected volatility of 99.50%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised and all the underlying shares were issued.

In June 2020, the Company issued to the investors warrants to purchase an aggregate of 1,680,000 (93,333 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on June 30, 2020 and expire on December 30, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,639,333. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.35%), (2) expected warrant life of 5.5 years, (3) expected volatility of 104.26%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised.

In June 2021, the Company issued to some institutional investors warrants to purchase an aggregate of up to 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2021”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $34,860,000. During the year ended June 30, 2023, the exercise price of warrants to purchase an aggregate of up to 7,950,769 (441,710 shares post 2024 Reverse Split) Class A Ordinary Shares was adjusted to $0.80 ($14.40 post 2024 Reverse Split), and the exercise price of the remaining warrants to purchase an aggregate of up to 863,333 (47,963 shares post 2024 Reverse Split) Class A Ordinary Shares remained at $6.24 ($112.32 post 2024 Reverse Split). As of June 30, 2022 and 2023, the fair value of the warrant liability of the Warrant 2021 was $2,490,000 and $1,930,000 (¥13,995,009). During the years ended June 30, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $27,030,000 and $560,000, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	June 30,					June 30,
Input	2023					2022
Number of warrants	47,963		$	441,710		$	489,673
Share price	0.34		$	0.34		$	0.66
Risk-free interest rate	4.41	%		4.41	%		3.00	%
Volatility	127	%		127	%		109	%
Exercise price	112.32			14.40			112.32
Warrant life	3.47 years			3.47 years			4.46 years

On March 15, 2023, the Company issued to some institutional investors warrants to purchase an aggregate of up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2023”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $2,750,000. As of June 30, 2023, the fair value of the warrant liability of the Warrant 2023 was $2,430,000 (¥17,620,659). During the years ended June 30, 2023, there was change in fair value of warrant liability in an aggregate amount of $320,000, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

				March 15, 2023
	June 30,			(Initial
Input	2023			measurement)
Number of warrants	555,694		$	555,694
Share price	0.34		$	0.37
Risk-free interest rate	3.59	%		3.58	%
Volatility	110	%		110	%
Exercise price	14.40			14.40
Warrant life	5.22 years			5.50 years

The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2022 and 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

			Quoted Prices In		Significant Other		Significant Other
	June 30,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	2,490,000	$	—	$	—	$	2,490,000

			Quoted Prices In		Significant Other		Significant Other
		June 30,	Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	4,360,000	$	—	$	—	$	4,360,000

The following table summarizes the Company’s Warrants activities and status of Warrants as of June 30, 2023:

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	489,673	$	112.32	5.46
Issued	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30 2023	1,045,367	$	18.90	4.40

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SHARE-BASED COMPENSATION

12 Months Ended

Jun. 30, 2023

SHARE-BASED COMPENSATION.

SHARE-BASED COMPENSATION

NOTE 18. SHARE-BASED COMPENSATION

Share-Based Awards Plan

The following is a summary of the share options activity:

		Weighted
		Average
		Exercise Price
Share Options	Shares	Per Share
Outstanding as of June 30, 2021	6,084	$	180.36
Granted	—		—
Forfeited	(1,640)		266.40
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50

The following is a summary of the status of options outstanding and exercisable as of June 30, 2023:

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price		Number	life (Years)	Price		Number	life (Years)
$	148.50	4,444	1.59	$	148.50	4,444	1.59
		4,444

The Share-based compensation expense recorded for stock options granted were all ¥Nil for the years ended June 30, 2021, 2022 and 2023, respectively. No unrecognized share-based compensation for stock options as of June 30, 2023.

Restricted Shares to Senior Management

As of June 30, 2023, the Company has granted restricted Class A Ordinary Shares to senior management and employees as follows:

On August 21, 2018, the Company granted 391,200 (21,733 shares post 2024 Reverse Split) restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $2,523,240 based on the closing share price $6.45 ($116.10 post 2024 Reverse Split) at August 21, 2018. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. All granted shares under this plan are fully vested on September 3, 2021.

On February 28, 2022, the Company granted 1,642,331 (91,241 shares post 2024 Reverse Split) Class A Ordinary Shares to its employees as compensation cost for awards. The fair value of the restricted shares was $1,708,024 based on the closing share price $1.04 ($18.72 post 2024 Reverse Split) at February 28, 2022. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. As of June 30, 2023, 547,444 (30,414 shares post 2024 Reverse Split) shares were vested and the remaining 1,094,887 (60,827 shares post 2024 Reverse Split) shares will not be vested until February 28, 2025.

On March 15, 2023, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to its employee as compensation for service to the Company on new business exploration. The service period was six months from the date of grant. All of the restricted shares were issued on March 15, 2023 and the granted shares under this plan will not be vested until September15, 2023.

188,662 (10,481 shares post 2024 Reverse Split), 128,672 (7,148 shares post 2024 Reverse Split) and 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A restricted shares were issued and outstanding for the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

As of June 30, 2023, the Company has granted restricted Class B Ordinary Shares to senior management as follows:

On December 5, 2021, the Company granted 2,500,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $4,175,000 based on the fair value of the share price $1.67 at December 5, 2021. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on December 5, 2021.

On February 28, 2022, the Company granted 1,600,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $1,694,000 based on the fair value of share price $1.06 at February 28, 2022. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on February 28, 2022.

On March 9, 2023, the Company granted 3,000,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $3,025,000 based on the fair value of share price $1.01 at March 9, 2023. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on March 9, 2023.

Nil, 4,100,000 and 3,000,000 restricted Class B restricted shares were issued and outstanding during the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for management was ¥6,140,037, ¥39,263,485 and ¥26,191,707 ($3,612,002) for the years ended June 30, 2021, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of June 30, 2023 was approximately ¥8.0 million ($1.1 million), which is expected to be recognized over a weighted average period of approximately 1.46 years.

Restricted Shares for services

As of June 30, 2023, the Company has granted restricted Class A Ordinary Shares to consultant as follows:

On November 10, 2021, the Company signed a service agreement with Starry. As the service consideration, the Company should issue 500,000 (27,778 shares post 2024 Reverse Split) restricted Class A Ordinary Shares which vested in equal monthly amounts through the end of December 31, 2021. Half of the restricted Class A Ordinary Shares was valued based on the closing share price of $1.60 ($28.80 post 2024 Reverse Split) on December 10, 2021 and the other half was valued based on the closing share price of $1.31 ($23.58 post 2024 Reverse Split) on December 31, 2021. 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued on December 10, 2021 and the remaining 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued in January 2022.

On January 5, 2022, the Company signed a consulting agreement with Lintec Information Ltd (the “Consultant”). As the service consideration, the Company issued 1,050,000 (58,333 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $1,354,500 based on the closing share price of $1.29 ($23.22 post 2024 Reverse Split) on January 5, 2022 to the Consultant as payment for being the Company’s investment and financial advisor for a period of one year. The vesting period of these shares was one year from the date of contract. All of the restricted shares were issued under this plan on January 5, 2022 and all of the granted shares under this plan was vested as of June 30, 2023.

On March 15, 2023, the Company signed a consulting agreement with some business consultants (the “Consultants”). As the service consideration, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to the Consultants as compensation for acting as advisors to the Company on new business exploration. The vesting period of these shares was six months from the date of contract. All of the restricted shares were issued under this plan on March 15, 2023 and the granted shares under this plan will not be vested until September15, 2023.

Nil, 1,550,000 (86,111 shares post 2024 Reverse Split) and 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A restricted shares were issued and outstanding during the years ended June 30, 2021, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for service was ¥nil, ¥8,935,920 and ¥5,805,840 ($800,662) for the years ended June 30, 2021, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for service as of June 30, 2023 was ¥1,124,546 ($155,082), which is expected to be recognized over a weighted average period of approximately 0.21 years.

Following is a summary of the restricted shares granted:

Restricted share grants	Shares
Non-vested as of June 30, 2021	7,244
Granted	405,130
Vested	(291,967)
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938

The following is a summary of the status of restricted share at June 30, 2023:

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share		Number	Period (Years)
$	18.72	60,827	1.67
	6.66	111,111	0.21
		171,938

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INCOME TAX

12 Months Ended

Jun. 30, 2023

INCOME TAX

INCOME TAX

NOTE 19. INCOME TAX

The Company is not subject to any income taxes in the United States or the Cayman Islands and had minimal operations in jurisdictions other than the PRC. BHD and Nanjing Recon are subject to PRC’s income taxes as PRC domestic companies. The Company follows Implementing Rules for the Enterprise Income Tax Law (“Implementing Rules”), which took effect on January 1, 2008 and unified the income tax rate for domestic-invested and foreign-invested enterprises at 25%.

Nanjing Recon was approved as a government-certified high-technology company and is subject to a reduced income tax rate of 15% through November 30, 2019. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as November 22, 2019 and expired on November 22, 2022. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as October 12, 2022 and will expire on October 12, 2025.

As approved by the domestic tax authority in the PRC, BHD was recognized as a government-certified high-technology company on November 25, 2009 and is subject to a reduced income tax rate of 15% through November 25, 2018. BHD reapplied for a high-technology company certificate, and the new certificate was approved as October 31, 2018 and expired on October 31, 2021. BHD reapplied for a high-technology company certificate, and the new certificate was approved as December 17, 2021 and will expire on December 17, 2024.

Income (loss) before provision for income taxes consisted of:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Outside China areas	¥	4,011,449	¥	113,741,972	¥	(34,038,460)	$	(4,694,118)
China		(30,402,528)		(20,066,451)		(27,419,593)		(3,781,335)
Total	¥	(26,391,079)	¥	93,675,521	¥	(61,458,053)	$	(8,475,453)

Deferred tax assets, net is composed of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Deferred tax assets:
Allowance for credit losses	¥	1,781,573	¥	1,019,592	$	140,608
Impairment for inventory		59,913		90,322		12,456
Net operating loss carryforwards		16,511,047		23,290,731		3,211,938
Subtotal		18,352,533		24,400,645		3,365,002
Less: Valuation allowance		(17,193,874)		(24,107,246)		(3,324,540)
Total deferred tax assets, net		1,158,659		293,399		40,462
Deferred tax liabilities:				​		​
Accelerated amortization of intangible assets		(119,271)		(146,511)		(20,205)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,257)
Recognition of customer relationship arising from business combinations		(892,500)		—		—
Total deferred tax liabilities		(1,158,659)		(293,399)		(40,462)
Deferred tax assets, net	¥	—	¥	—	$	—

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred a cumulative net operating loss (“NOL”) which may reduce future corporate taxable income. As of June 30, 2022, the cumulative NOL was approximately ¥94.6 million. During the year ended June 30, 2023, the Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred an additional NOL carryforwards of approximately ¥39.0 million ($5.4 million), resulting in a cumulative NOL carryforwards of approximately ¥133.6 million ($18.4 million) as of June 30, 2023.
​

The NOL will expire over the next five years as follows:

Twelve months ending June 30,		RMB	US Dollars
2024	¥	13,146,922	$	1,813,043
2025		10,484,902		1,445,934
2026		19,617,124		2,705,325
2027		32,533,742		4,486,608
2028		57,811,664		7,972,593
Total	¥	133,594,354	$	18,423,503

Following is a reconciliation of income tax expense (benefit) at the effective rate to income tax at the calculated statutory rates:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Income tax (benefits) expenses calculated at PRC statutory rates	¥	(6,597,770)	¥	23,418,880	¥	(15,364,513)	$	(2,118,863)
Nondeductible expenses and others		338,058		263,655		539,247		74,366
Effect of tax rate differential		626,245		(24,061,020)		7,949,048		1,096,224
Benefit of revenue exempted from enterprise income tax		(57,250)		(1,799)		(18,814)		(2,595)
Change in valuation allowances		5,264,804		(233,590)		6,913,371		953,397
Tax refund		(98,338)		—		—		—
Income tax expenses (benefit)	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

The Company’s income tax expense (benefit) is comprised of the following:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Current income tax provision (benefit)	¥	(98,338)	¥	10,214	¥	18,339	$	2,529
Deferred income tax benefit		(425,913)		(624,088)		—		—
Expense (benefit) for income tax	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

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NON-CONTROLLING INTEREST

12 Months Ended

Jun. 30, 2023

NON-CONTROLLING INTEREST.

NON-CONTROLLING INTEREST

NOTE 20. NON-CONTROLLING INTEREST

Non-controlling interest consisted of the following:

	As of June 30, 2022
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	993,771
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(7,296,511)
Unappropriated retained earnings (deficit)		3,477,493		3,616,001		(4,972,129)		(1,520,225)		(893,405)		(292,265)		(43,635)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,584)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		5,194,303
Total non-controlling interests	¥	5,109,643	¥	3,804,148	¥	(167,129)	¥	(1,520,225)		(14,973,405)	¥	(7,746,968)	$	(1,156,656)

	As of June 30, 2023
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

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CONCENTRATIONS

12 Months Ended

Jun. 30, 2023

CONCENTRATIONS

CONCENTRATIONS

NOTE 21. CONCENTRATIONS

Credit risk

As of June 30, 2022 and 2023, approximately ¥20.3 million and ¥45.5 million ($6.3 million) of the Company’s cash was on deposit at financial institutions in the PRC, respectively. Per PRC regulations, the maximum insured bank deposit amount is RMB500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥17.8 million and ¥40.0 million ($5.5 million) as of June 30, 2022 and 2023, respectively. As of June 30, 2022 and 2023, approximately ¥297.2 million and ¥240.3 million ($33.1 million) of the Company’s cash was on deposit at financial institutions in the Hong Kong, respectively. Per Hong Kong regulations, the maximum insured bank deposit amount is HKD 500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥296.8 million and ¥238.8 million ($32.9 million) as of June 30, 2022 and 2023, respectively.

Customer concentration risk

For the year ended June 30, 2021, CNPC represented 39%, SINOPEC represented 22% of the Company’s revenue, respectively. At June 30, 2021, CNPC accounted for 29%, SINOPEC represented 13% and another two customers accounted for 19% and 14% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2022, CNPC represented 50%, SINOPEC represented 28%, and another customer represented 10% of the Company’s total revenue, respectively. At June 30, 2022, CNPC accounted for 49%, SINOPEC represented 22% and another customer accounted for 14% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2023, CNPC represented 43% and SINOPEC represented 32% of the Company’s total revenue, respectively. At June 30, 2023, CNPC accounted for 31%, SINOPEC represented 27% and another two customers accounted for 11% and 10% of the Company’s accounts receivable, net, respectively.

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COMMITMENTS AND CONTINGENCY

12 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCY

COMMITMENTS AND CONTINGENCY

NOTE 22. COMMITMENTS AND CONTINGENCY

(a)   Contingency

Severance payments

The Labor Contract Law of the PRC requires employers to assure the liability of severance payments if employees are terminated and have been working for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month of severance pay for each year of the service provided by the employees. As of June 30, 2023, the Company estimated its severance payments of approximately ¥7.0 million ($1.0 million) which has not been reflected in its consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future.

Legal contingencies

On December 1, 2021, Henan Puxinfangfu Construction Engineering Co., Ltd. (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Suzhou District, Jiuquan City, Gansu Province (the “Court”) against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. The Plaintiff also applied for property preservation before litigation to preserve the bank account of the Company. On December 1, 2021, the Court issued a judgement and approximately ¥0.7 million ($0.1 million) of Gan Su BHD’s bank balance was became restricted for one year. On April 7, 2022 and June 9, 2022, the Court issued first and second judgement which stated that the case to transfer to People’s Court of Yumen for jurisdiction. As of June 30, 2023, Gan Su BHD recorded ¥1.82 million (approximately $0.3 million) account payable due to the Plaintiff, and the compensation claimed by the Plaintiff was approximately ¥2.0 million (approximately $0.3 million). On January 9, 2023, the People’s Court of Yumen City, Gansu Province issued its civil judgement, pursuant to which the Company is required to pay the Plaintiff a settlement payment totaling approximately ¥1.80 million (approximately $0.3 million), including the money compensation and interests. As of the date of this report, the Company has paid ¥855,197 (approximately $117,937) to the Plaintiff.

On April 30, 2023, Jiuquan Third Construction and Installation Engineering Company (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Yumen, Jiuquan City, Gansu Province against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. On August 25, 2023, the Company entered into a Settlement Agreement with the Plaintiff, pursuant to which the Company needs to pay the Plaintiff a total sum of ¥2.8 million (approximately $0.38 million) as settlement payment, including the money compensation and interests. Among which, ¥1.0 million (approximately $0.14 million) is required to be paid by September 25, 2023, ¥1.0 million (approximately $0.14 million) is required to be paid by October 25, 2023, and the remaining balance is required to be paid by November 25, 2023. As of the date of this report, the Company has paid ¥1.0 million (approximately $0.14 million) to the Plaintiff.

(b)   Purchase commitment

The total future minimum purchase commitment under the non-cancellable purchase contracts as of June 30, 2023 are payable as follows:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	22,395,958	$	3,088,544
2025		300,000		41,372
2026		150,000		20,686
Total minimum payments required	¥	22,845,958	$	3,150,602

(c) Office Leases Commitment - short term

The Company entered into several non-cancellable operating lease agreements for office spaces. Future payments under such leases were included in lease liabilities as disclosed in Note 10, other than those within under lease agreements within one year which are disclosed as follows as of June 30, 2023:

Twelve months ending June 30,	RMB		US Dollars
2024	¥	336,527	$	46,409
Total	¥	336,527	$	46,409

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RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

RELATED PARTY TRANSACTIONS AND BALANCES

NOTE 23. RELATED PARTY TRANSACTIONS AND BALANCES

Sales to a related party – sales to a related party consisted of the following:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd. *	¥	85,657	¥	—	¥	—	$	—
Total revenue from a related party	¥	85,657	¥	—	¥	—	$	—

* The noncontrolling shareholder of Gan Su BHD owns 10% interests in Urumqi Yikeli Automatic Control Equipment Co., Ltd.

Prepaid expenses - related parties – prepaid expenses - related parties consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Founders	¥	275,000	¥	—	$	—
Total prepaid expenses - related parties	¥	275,000	¥	—	$	—

Leases from related parties - The Company has various agreements for the lease of office space owned by the founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥94,167 ($12,986) with annual rental expense at ¥1.1 million ($0.16 million).

The details of leases from related parties are as below:

			Monthly Rent		Monthly Rent
Lessee	Lessor	Rent Period	RMB		US Dollars
Nanjing Recon	One of the founders	April 1, 2022 - March 31, 2024	¥	40,000	$	5,516
BHD	One of the founders	January 1, 2023- Dec 31, 2023		31,667		4,367
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,103

As of June 30, 2022, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥765,241 and ¥765,241, respectively.

As of June 30, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥335,976 ($46,333) and ¥335,976 ($46,333), respectively.
​

Guarantee/collateral related parties - The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 13).

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VARIABLE INTEREST ENTITIES

12 Months Ended

Jun. 30, 2023

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

NOTE 24. VARIABLE INTEREST ENTITIES

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. 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.

Summary information regarding consolidated VIEs and their subsidiaries is as follows:

	June 30, 2022		June 30, 2023		June 30, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	18,033,666	¥	37,661,118	$	5,092,821
Restricted cash		723,560		731,545		100,885
Notes receivable		10,828,308		3,742,390		516,099
Accounts receivable, net		22,577,980		27,453,415		3,785,999
Inventories, net		3,894,369		6,330,701		873,044
Other receivables, net		5,500,981		11,618,275		1,602,233
Loans to third parties		30,270,563		37,770,188		5,208,747
Purchase advances, net		178,208		1,592,761		219,652
Contract costs, net		33,858,820		49,572,685		6,836,386
Prepaid expenses		165,120		121,329		16,732
Prepaid expenses- related parties		275,000		—		—
Total current assets		126,306,575		176,594,407		24,252,598
		​		​		​
Property and equipment, net		25,474,162		24,752,864		3,413,576
Construction in progress		239,739		—		—
Intangible assets, net		5,950,000		—		—
Long-term other receivables, net		1,564,381		3,640		502
Goodwill		4,730,002		—		—
Operating lease right-of-use assets		6,666,759		2,654,900		366,127
Total Assets	¥	170,931,618	¥	204,005,811	$	28,032,803
LIABILITIES
Short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138
Accounts payable		12,826,108		10,791,721		1,488,246
Other payables		1,469,761		3,904,135		538,405
Other payable- related parties		1,061,081		1,356,915		187,127
Contract liabilities		2,001,277		2,748,361		379,017
Accrued payroll and employees’ welfare		1,213,040		1,048,061		144,534
Intercompany payables*		194,373,010		263,935,922		36,398,428
Taxes payable		2,211,190		1,163,237		160,418
Short-term borrowings - related parties		9,009,156		20,018,222		2,760,639
Long-term borrowings - related party - current portion		999,530		—		—
Operating lease liabilities - current		3,892,774		3,066,146		422,841
Total current liabilities		239,056,927		320,484,201		44,196,793
Operating lease liabilities - non-current		2,184,635		25,144		3,468
Contract liabilities - non-current		106,000		—		—
Long-term borrowings - related party		5,511,076		—		—
Deferred tax liability		187,972		—		—
Total Liabilities	¥	247,046,610	¥	320,509,345	$	44,200,261

*Intercompany payables are eliminated upon consolidation.

The financial performance of VIEs reported in the consolidated statement of operations and comprehensive loss for the year ended June 30, 2021 includes revenue of ¥47,817,378, operating expenses of ¥36,704,840, and net loss of ¥29,407,210. The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income for the year ended June 30, 2022 includes revenue of ¥83,777,571 ($12,508,368), operating expenses of ¥35,725,237 ($5,333,938), and net loss of ¥18,180,305 ($2,714,401). The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income (loss) for the year ended June 30, 2023 includes revenue of ¥67,114,378 ($9,255,496), operating expenses of ¥35,547,439 ($4,902,216), and net loss of ¥26,349,629 ($3,633,780).

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SEGMENT REPORTING

12 Months Ended

Jun. 30, 2023

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 25. SEGMENT REPORTING

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based on management’s assessment, the Company has determined that it has four operating segments: automation product and software, equipment and accessories, oilfield environmental protection and platform outsourcing services.

The following tables present summary information by segment for the years ended June 30, 2021, 2022 and 2023, respectively:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Automation product and software	¥	18,535,166	¥	31,944,055	¥	26,628,216	$	3,672,199
Equipment and accessories		15,791,623		17,159,381		16,248,197		2,240,729
Oilfield environmental protection		11,043,979		25,335,363		19,116,560		2,636,294
Platform outsourcing services		2,567,807		9,338,772		5,121,405		706,274
Total revenue	¥	47,938,575	¥	83,777,571	¥	67,114,378	$	9,255,496

	For the year ended June 30, 2023
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378
Cost of revenue and related tax		23,610,281		8,945,796		13,955,673		1,735,645		48,247,395
Gross profit	¥	3,017,935	¥	7,302,401	¥	5,160,887	¥	3,385,760	¥	18,866,983
Depreciation and amortization	¥	857,332	¥	689,552	¥	2,077,165	¥	59,537	¥	3,683,586
Total capital expenditures	¥	803,311	¥	46,681	¥	75,728	¥	14,953	¥	940,673
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,640,699	¥	16,248,197	¥	19,116,560	¥	4,470,462	¥	58,475,918
Services rendered over time		7,987,517		—		—		650,943		8,638,460
Total revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378

	For the year ended June 30, 2022
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571
Cost of revenue and related tax		29,824,014		10,479,615		20,222,446		3,826,759		64,352,834
Gross profit	¥	2,120,041	¥	6,679,766	¥	5,112,917	¥	5,512,013	¥	19,424,737
Depreciation and amortization	¥	421,619	¥	814,960	¥	2,045,601	¥	57,688	¥	3,339,868
Total capital expenditures	¥	14,823	¥	21,456	¥	768,795	¥	194,578	¥	999,652
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	31,944,055	¥	17,159,381	¥	15,779,825	¥	9,338,772	¥	74,222,033
Services rendered over time		—		—		9,555,538		—		9,555,538
Total revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571

	For the year ended June 30, 2021
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575
Cost of revenue and related tax		19,942,541		11,264,971		8,045,567		1,470,468		40,723,547
Gross profit	¥	(1,407,375)	¥	4,526,652	¥	2,998,412	¥	1,097,339	¥	7,215,028
Depreciation and amortization	¥	277,496	¥	851,612	¥	2,000,952	¥	20,729	¥	3,150,789
Total capital expenditures	¥	26,761	¥	136,224	¥	315,944	¥	43,487	¥	522,416
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,535,166	¥	15,791,623	¥	9,654,418	¥	2,567,807	¥	46,549,014
Services rendered over time		—		—		1,389,561		—		1,389,561
Total revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Total assets:
Automation product and software	¥	147,377,607	¥	167,009,315	$	23,031,642
Equipment, accessories and others		149,876,933		170,809,759		23,555,743
Oilfield environmental protection		107,755,500		107,393,609		14,810,256
Platform outsourcing services		85,232,044		86,611,894		11,944,323
Total assets	¥	490,242,084	¥	531,824,577	$	73,341,964

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SUBSEQUENT EVENTS

12 Months Ended

Jun. 30, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 26. SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on October 27, 2023, and the Company has evaluated subsequent events through this date. On October 16, 2023, 1,175,000 pre-funded warrants issued on March 15, 2023 were exercised by the investor Sabby volatility warrant master fund, LTD. and 1,175,000 Class A Ordinary shares were issued and being outstanding.

The hazardous waste operation permit originally held by Gansu BHD expires on July 26, 2023. Gansu BHD is currently renewing this permit.

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

12 Months Ended

Jun. 30, 2023

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

NOTE 27. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Pursuant to the requirements of Rules 12-04(a), 5-04(c), and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirements and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and VIEs exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed financial statements for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries and VIEs shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIEs in the form of loans, advances, or cash dividends without the consent of a third party.

The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and the respective profit or loss as “Equity in earnings of subsidiaries and VIEs” on the condensed statements of income.

The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of June 30, 2022 and 2023, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

RECON TECHNOLOGY, LTD

PARENT COMPANY BALANCE SHEETS (UNAUDITED)

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
ASSETS
Cash	¥	296,838,959	¥	236,146,589	$	32,566,104
Due from intercompany*		205,224,961		291,525,426		40,203,195
Other current assets		20,364,424		80,036,017		11,037,471
Total Current Assets		522,428,344		607,708,032		83,806,770
Investment in subsidiaries and VIEs		(77,566,835)		(122,920,490)		(16,951,511)
Total Assets	¥	444,861,509	¥	484,787,542	¥	66,855,259
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		7,552,452		3,964,912		546,786
Total Current Liabilities		7,552,452		3,964,912		546,786
		​		​
Warrant liability		16,677,328		31,615,668		4,360,000
Total Liabilities		24,229,780		35,580,580		4,906,786
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
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 2023, respectively**		19,461		26,932		3,714
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 2023, respectively**		2,604		4,693		647
Additional paid-in capital**		516,426,799		580,340,061		80,032,554
Accumulated deficit		(107,124,596)		(166,291,897)		(22,932,701)
Accumulated other comprehensive income		11,307,461		35,127,173		4,844,259
Total Shareholders’ Equity		420,631,729		449,206,962		61,948,473
		​		​		​
Total Liabilities and Shareholders’ Equity	¥	444,861,509	¥	484,787,542	$	66,855,259

* Due from intercompany are eliminated upon consolidation.

** 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

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

		For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Revenue	¥	121,197	¥	—	¥	—	$	—
Cost of revenue		97,024		—		—		—
Gross profit		24,173		—		—		—
General and administrative expenses		29,502,464		62,918,622		54,494,219		7,515,097
Provision for credit losses		1,933,986		1,923,382		(4,141,588)		(571,151)
Loss from operations		(31,412,277)		(64,842,004)		(50,352,631)		(6,943,946)
Fair value changes of warrants liability		35,365,792		174,485,575		6,116,000		843,435
Other income		320,235		4,105,116		10,108,783		1,394,065
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries		(27,106,484)		(18,161,892)		(25,039,453)		(3,453,098)
						​		​
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
								​
Foreign currency translation adjustment		(850,895)		9,332,625		23,819,712		3,284,889
Comprehensive income (loss) attributable to the Company	¥	(23,683,629)	¥	104,919,420	¥	(35,347,589)	$	(4,874,655)

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Adjustments to reconcile net cash flows from operating activities:						​		​
Changes in warrants liabilities		(35,365,792)		(174,485,575)		(6,116,000)		(843,435)
Amortization of offering cost of warrants		12,584,024		—		1,483,306		204,557
Provision for doubtful accounts		1,933,986		1,923,382		(4,141,588)		(571,151)
Restricted shares issued for management and employees		6,140,037		39,263,485		26,191,707		3,612,002
Income (loss) from investment in unconsolidated entity		15,411		(15,411)		—		—
Restricted shares issued for services		—		8,935,919		5,805,840		800,662
Equity in earnings of subsidiaries and VIEs		27,106,484		18,161,892		25,039,453		3,453,098
Other current assets		(474,891)		(111,521)		(8,396,555)		(1,157,938)
Other current liabilities		4,776,846		(5,090,698)		(3,587,540)		(494,744)
						​		​
Net cash used in operating activities		(6,116,629)		(15,831,732)		(22,888,678)		(3,156,493)
Cash flows from investing activities:
Repayments from loans to third parties		1,950,000		166,405,032		32,413,311		4,470,000
Payments made for loans to third parties		(50,288,458)		(137,391,510)		(79,546,761)		(10,970,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(29,505,002)		(55,569,342)		(86,300,464)		(11,901,378)
				​		​		​
Net cash used in investing activities		(77,843,460)		(26,555,820)		(133,433,914)		(18,401,378)
Cash flows from financing activities:
Proceeds from warrants issued with common share		212,051,414		—		17,493,069		2,412,405
Proceeds from sale of common share, net of issuance costs		81,091,141		—		28,174,993		3,885,509
Proceeds from sale of prefunded warrants, net of issuance costs		30,276,569		93,321		3,750,282		517,188
Proceeds from share issuance for warrants exercised		21,130,035		—		—		—
Proceeds from issuance of convertible notes		42,014,616		—		—		—
Net cash provided by financing activities		386,563,775		93,321		49,418,344		6,815,102
						​		​
Effect of exchange rate fluctuation on cash		274,149		14,016,375		46,211,878		6,372,909
				​		​		​
Net increase (decrease) in cash		302,877,835		(28,277,856)		(60,692,370)		(8,369,860)
				​		​		​
Cash, beginning of year		22,238,980		325,116,815		296,838,959		40,935,964
						​		​
Cash, end of year	¥	325,116,815	¥	296,838,959	¥	236,146,589	$	32,566,104
Non-cash investing and financing activities
Issuance of common share in exchange of shares of Starry, net of issuance costs	¥	27,675,450	¥	—	¥	—	$	—
Cancellation of ordinary shares issued to Starry	¥	—	¥	(27,675,450)	¥	—	$	—
Conversion of convertible notes to 9,225,338 shares of ordinary shares	¥	42,435,669	¥	—	¥	—	$	—

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OTHER EVENTS

12 Months Ended

Jun. 30, 2023

OTHER EVENTS

OTHER EVENTS

NOTE 28. OTHER EVENTS

Reverse stock split

On March 29, 2024, the Company’s shareholders approved to effect a reverse stock split of the Company’s Class A Ordinary Shares at the ratio of one-for-eighteen with the market effective date of May 1, 2024 (the “2024 Reverse Split”). 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 filed an Amended and Restated 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”). As a result of the 2024 Reverse Split, each eighteen pre-split Class A Ordinary Shares outstanding were automatically combined and converted to one issued and outstanding Class A Ordinary Share. No fractional Class A Ordinary Shares were issued to any shareholders in connection with the 2024 Reverse Split. Each shareholder was entitled to receive one Class A Ordinary Shares in lieu of the fractional share that would have resulted from the reverse stock split. As of May 1, 2024 (immediately prior to the effective date), there were 141,703,218 Class A Ordinary Shares outstanding, and the number of Class A Ordinary Shares outstanding after the 2024 Reverse Split is 7,927,132, taking into account of the effect of rounding fractional shares into whole shares. In addition, all Class A Ordinary Shares, options and any other Class A securities of the Company outstanding immediately prior to the 2024 Reverse Split was retroactively applied by dividing the number of ordinary shares into which the options and other securities are exercisable by 18 and multiplying the exercise price thereof by 18, as a result of the 2024 Reverse Split.

All share and earnings per-share information have been retroactively adjusted to reflect the 2024 Reverse-Split and 2024 change in capital structure. The Company had 500,000.000 authorized Class A Ordinary Shares, par value of $0.0001, of which 1,704,766 and 2,306,295 Class A Ordinary Shares were issued and outstanding as of June 30, 2022 and 2023, retrospectively and respectively. The Company had 80,000.000 authorized Class B Ordinary Shares, par value of $0.0001, of which 4,100,000 and 7,100,000 Class B Ordinary Shares were issued and outstanding as of June 30, 2022 and 2023, retrospectively and respectively.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation - The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and are expressed in United States dollars (“US dollars”).

Principles of Consolidation

Principles of Consolidation - The consolidated financial statements include the accounts of the Company, all the subsidiaries, VIEs and subsidiaries of VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.

Variable Interest Entities

Variable Interest Entities - 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. 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. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.

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.

Currency Translation

Currency Translation - The Company’s functional currency is US dollars and the consolidated financial statements have been expressed in Chinese Yuan (“RMB”) as RMB is the Company’s reporting currency. The consolidated financial statements as of and for the year ended June 30, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.2513 = US$1.00, the approximate exchange rate prevailing on June 30, 2023. These translated U.S. dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into US dollars.

Estimates and Assumptions

Estimates and Assumptions - The preparation of the consolidated financial statements in conformity with U.S. 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 are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for credit losses related to accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, goodwill and investment in unconsolidated entity, the discount rate for lease and investment, valuation of the convertible notes, price purchase allocation for business combination and the fair value of share-based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.

The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for credit losses related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. 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

Fair Values of Financial Instruments - The U.S. 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 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.

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.

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. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

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 of the long-term borrowings due to related party approximate its fair value because the stated interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable credit risk and maturities.

Cash

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

Restricted cash

Restricted cash - Restricted cash represents funds set aside and placed with the bank and serves as the security deposit which is not available to fund general liquidity needs of the Company.

Short-term investments

Short-term investments - Short-term investments include wealth management products, which are certain deposits with fixed interest rates and the principal are guaranteed by the financial institutions. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities within one year. The interest earned is recognized in the consolidated statements of operations and comprehensive income (loss) as interest income. As of June 30, 2022 and 2023, the Company had short-term investments balance of ¥nil and ¥184.2 million ($25.4 million), including accrued interests of ¥nil and ¥2.9 million ($400,198), respectively.

Accounts Receivables, Net, Other Receivables, Net and Loan to Third Parties

Accounts Receivables, 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. In July 2020, the Company adopted ASU 2016-13, Topics 326-Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, as its accounting standard for its accounts receivable and other receivables. Other receivables and loan to third parties arise from transactions with non-trade customers.

The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of July 1, 2020. Accounts receivable, other receivables and loan to third parties are recognized and carried at carrying amount less an allowance for credit loss, if any. 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, the potential impact of the COVID-19 pandemic on our customers businesses and their ability to pay their accounts receivable, other receivables and loan to third parties. 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, 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. The net recovery of provision for credit loss for the year ended June 30, 2023 increased by approximately ¥7.3 million ($1.0 million) from the year ended June 30, 2022.

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. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company considers in determining whether to discontinue sales, record as contra revenue or allowance for credit losses:

● the oil price and fluctuation of the overall oil industry;

● the customer fails to comply with its payment schedule;

● the customer is in serious financial difficulty;

● a significant dispute with the customer has occurred regarding job progress or other matters;

● the customer breaches any of the contractual obligations;

● the customer appears to be financially distressed due to economic or legal factors;

● the business between the customer and the Company is not active; and

● other objective evidence indicates non-collectability of the accounts receivable, other receivables and loan to third parties.

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.

Notes Receivable

Notes Receivable - Notes receivable represent short-term notes receivable the Company receives from its customers as payment for amounts owed to the Company in normal course of business operation. The notes receivable are issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally ranges from three to six months from the date of issuance.

Purchase Advances, Net

Purchase Advances, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

Inventories, Net

Inventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Market value of the inventories is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.

Property and Equipment, Net

Property and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.

Items	Useful life
Motor vehicles	3-5 years
Office equipment and fixtures	2-5 years
Production equipment, including:
Equipment	10 years
Utilities and Facilities	20 years
Leasehold improvement	Lesser of useful life and lease term

Construction in progress includes property and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognized impairment loss. Construction in progress is classified to the appropriate category of property and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Goodwill

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment. Impairment loss on goodwill was ¥nil, ¥2,266,893 and ¥4,730,002 ($652,297) for the years ended June 30, 2021, 2022 and 2023, respectively.

Intangible Assets, Net

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Impairment for the long-lived assets was ¥768,312, ¥nil and ¥6,259,124 ($863,173) for the years ended June 30, 2021, 2022 and 2023, respectively.

Long-term Investments

Long-term Investments - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance requires modified retrospective application to all outstanding instruments for fiscal years beginning after December 15, 2017, with a cumulative effect adjustment recorded to opening accumulated deficit as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value would be applied prospectively. The Company adopted the new financial instruments accounting standard from July 1, 2018.

-      Equity Investments with Readily Determinable Fair Values - Equity investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements.

-      Equity Investments without Readily Determinable Fair Values - After the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying value of the equity investments in current earnings. Changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a “reasonable effort” to identify price changes that are known or that can reasonably be known.

-      Equity Investments Accounted for Using the Equity Method - The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately held entities, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the years ended June 30, 2021, 2022 and 2023. The Company recorded a ¥266,707 investment loss, ¥15,411 investment income and nil investment income on its equity method investment in unconsolidated entities during the years ended June 30, 2021, 2022 and 2023, respectively.

Business Combinations

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

Non-controlling Interests

Non-controlling Interests - For the Company’s majority-owned subsidiaries, VIEs and subsidiaries of VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operation and comprehensive income (loss) to distinguish the interests from that of the Company.

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 core principle underlying the new revenue recognition Accounting Standards Update (“ASU”) is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. 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.

Disaggregation of Revenue

Revenue are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following items represent the Company’s revenue disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.

The Company’s disaggregation of revenue for the years ended June 30, 2021, 2022 and 2023 is disclosed in Note 25.

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. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.

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. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.

Oilfield Environmental Protection Service

The Company provides wastewater treatment products and related service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue when products are delivered, on-site assistance services rendered, and acceptance reports are signed off by customers. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

The Company provides oily sludge disposal and treatment services to oilfield companies and generates revenue from treatment services of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using output method, based on the percentage-of-completion method. 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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. 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. 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. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.

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
	2022		2023		2023
	RMB		RMB		US Dollars
Contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386
Contract liabilities	¥	2,107,277	¥	2,748,365	$	379,017

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. 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.

-      Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients’ initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client’s individual project construction arrangement), the Company records revenue based on the contract or the final clients’ acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.

Contract Liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. 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 recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. 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. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.

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). Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. 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, 2023. The amount of revenue recognized during the years ended June 30, 2021, 2022 and 2023 that was previously included within contract liability balances was ¥1,899,561, ¥7,390,276 and ¥1,901,277 ($262,198), respectively.

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.

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. As the Company’s contracts are majorly less than one year in length, consideration will not be adjusted. For the Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts. There are also some new contracts that will not be completed within one year from year 2022, the Company did calculation and the amount was not material as end of this fiscal year.

Share-Based Compensation

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 has elected to recognize compensation expenses using the valuation model estimated at the grant date based on the award’s fair value

Research and Development Expenses

Research and Development Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥444,824, ¥537,371 and ¥789,932 ($108,937) for the years ended June 30, 2021, 2022 and 2023, respectively.

Leases

Leases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces and land use rights, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of June 30, 2022 and 2023.

Income Taxes

Income Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2022 and 2023.

As of June 30, 2023, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.

Comprehensive Income (Loss)

Comprehensive Income (Loss) - Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$ to RMB is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

Earnings (Loss) per Share

Earnings (Loss) per Share - Earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of Ordinary Shares outstanding. Diluted EPS are computed by dividing net income (loss) by the weighted-average number of Ordinary Shares and dilutive potential Ordinary Share equivalents outstanding. Potentially dilutive Ordinary Shares consist of Ordinary Shares issuable upon the conversion of ordinary share options, restricted shares and warrants (using the treasury share method).

The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2021, 2022 and 2023:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Numerator:
Net income (loss) attributable to Recon Technology, Ltd	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Denominator:
Weighted-average number of ordinary shares outstanding – basic*		760,116		1,721,529		2,157,158		2,157,158
Class A Ordinary Shares*		760,116		1,612,427		1,880,065		1,880,065
Class B Ordinary Shares**		—		109,102		277,093		277,093
Outstanding options/warrants*		584,571		585,357		1,115,088		1,115,088
Potentially dilutive shares from outstanding options/warrants		—		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		760,116		1,721,529		2,157,158		2,157,158
Earnings (loss) per share – basic and diluted*	¥	(30.04)	¥	55.52	¥	(27.43)	$	(3.78)

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

** The Class B Ordinary Shares were not subjected to reverse stock split, and each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof, so the weighted average number of Class B Ordinary Shares is calculated on a one-for-eighteen basis of issued and outstanding Class B Ordinary Shares.

Warrants

Warrants - The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Class A Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

Reclassification

Reclassification - Certain prior year amounts related to land use rights on the balance sheets and cash flows statements had been reclassified to conform to the current period presentation. These reclassifications have no effect on the results of operations previously reported.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful life of the assets

Items	Useful life
Motor vehicles	3-5 years
Office equipment and fixtures	2-5 years
Production equipment, including:
Equipment	10 years
Utilities and Facilities	20 years
Leasehold improvement	Lesser of useful life and lease term

Schedule of information about contract costs, net and contract liabilities from contracts with customers

	June 30,		June 30,		June 30
	2022		2023		2023
	RMB		RMB		US Dollars
Contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386
Contract liabilities	¥	2,107,277	¥	2,748,365	$	379,017

Schedule of basic and diluted earnings per share

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Numerator:
Net income (loss) attributable to Recon Technology, Ltd	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Denominator:
Weighted-average number of ordinary shares outstanding – basic*		760,116		1,721,529		2,157,158		2,157,158
Class A Ordinary Shares*		760,116		1,612,427		1,880,065		1,880,065
Class B Ordinary Shares**		—		109,102		277,093		277,093
Outstanding options/warrants*		584,571		585,357		1,115,088		1,115,088
Potentially dilutive shares from outstanding options/warrants		—		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		760,116		1,721,529		2,157,158		2,157,158
Earnings (loss) per share – basic and diluted*	¥	(30.04)	¥	55.52	¥	(27.43)	$	(3.78)

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

** The Class B Ordinary Shares were not subjected to reverse stock split, and each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof, so the weighted average number of Class B Ordinary Shares is calculated on a one-for-eighteen basis of issued and outstanding Class B Ordinary Shares.

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ACCOUNTS RECEIVABLE, NET (Tables)

12 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE, NET

Schedule of accounts receivable, net

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Accounts receivable	¥	27,206,752	¥	27,606,257	$	3,807,077
Allowance for credit losses		(4,628,772)		(152,842)		(21,078)
Total third-parties, net	¥	22,577,980	¥	27,453,415	$	3,785,999

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties- long-term	RMB		RMB		US Dollars
Accounts receivable	¥	4,983,698	¥	842,607	$	116,201
Allowance for credit losses		(4,983,698)		(842,607)		(116,201)
Total third-parties, net	¥	—	¥	—	$	—

Schedule of movement of allowance for doubtful accounts

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	9,315,427	¥	9,612,470	$	1,325,619
Charge to (reversal of) allowance		153,329		(8,767,356)		(1,209,073)
Foreign currency translation adjustments		143,714		150,335		20,733
Ending balance	¥	9,612,470	¥	995,449	$	137,279

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OTHER RECEIVABLES, NET (Tables)

12 Months Ended

Jun. 30, 2023

OTHER RECEIVABLES, NET

Schedule of other receivables, net

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Business advances to officers and staffs (A)	¥	1,441,807	¥	854,162	$	117,795
Deposits for projects		3,259,236		1,247,992		172,106
VAT recoverable		437,095		690,053		95,163
Others		2,547,520		1,392,126		191,983
Allowance for credit losses		(619,444)		(1,994,960)		(275,118)
Subtotal		7,066,214		2,189,373		301,929
Less: Long term portion (B)		(1,564,381)		(3,640)		(502)
Other receivable - current portion	¥	5,501,833	¥	2,185,733	$	301,427

(A) Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Schedule of movement of allowance for credit losses

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	918,153	¥	619,444	$	85,426
Charge to (reversal of) allowance		(294,644)		1,375,516		189,692
Less: written off		(4,065)		—		—
Ending balance	¥	619,444	¥	1,994,960	$	275,118

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LOANS TO THIRD PARTIES (Tables)

12 Months Ended

Jun. 30, 2023

LOANS TO THIRD PARTIES

Schedule of loans to third parties

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Working fund to third party companies	¥	50,383,822	¥	123,055,874	$	16,970,181
Loans to third parties	¥	50,383,822	¥	123,055,874	$	16,970,181

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CONTRACT COSTS, NET (Tables)

12 Months Ended

Jun. 30, 2023

CONTRACT COSTS, NET

Schedule of contract costs, net

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Party	RMB		RMB		US Dollars
Contract costs	¥	37,922,302	¥	52,158,840	$	7,193,033
Allowance for credit losses		(4,063,482)		(2,586,155)		(356,647)
Total contract costs, net	¥	33,858,820	¥	49,572,685	$	6,836,386

Schedule of movement of allowance for credit losses of contract costs

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beginning balance	¥	4,548,910	¥	4,063,482	$	560,380
Reversal of allowance		(552,008)		(1,720,095)		(237,212)
Charge to cost of sales		66,580		242,768		33,479
Ending balance	¥	4,063,482	¥	2,586,155	$	356,647

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PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Motor vehicles	¥	5,312,274	¥	5,176,175	$	713,827
Office equipment and fixtures		1,442,395		1,440,819		198,698
Production equipment		31,102,055		31,115,843		4,291,071
Leasehold improvement		—		2,260,000		311,668
Total cost		37,856,724		39,992,837		5,515,264
Less: accumulated depreciation		(11,614,250)		(14,297,511)		(1,971,717)
Less: accumulated impairment		(768,312)		(942,462)		(129,971)
Property and equipment, net	¥	25,474,162	¥	24,752,864	$	3,413,576
Construction in progress	¥	239,739	¥	—	$	—

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY (Tables)

12 Months Ended

Jun. 30, 2023

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

Summary of fair values of the identifiable assets and liabilities

	RMB		US Dollars
Cash	¥	471,843	$	65,070
Accounts receivable, net		831,049		114,607
Other receivables, net		144,285		19,898
Contract costs, net		75,250		10,377
Prepaid expenses		91,132		12,568
Property and equipment, net		118,130		16,291
Intercompany receivables*		6,850,000		944,658
Intangible assets- customer relationship		7,000,000		965,344
Goodwill		6,996,895		964,916
Accounts payable		(1,032,078)		(142,330)
Other payables		(1,273,182)		(175,580)
Other payable- related parties		(479,959)		(66,189)
Deferred revenue		(39,786)		(5,487)
Accrued payroll and employees’ welfare		(1,629,519)		(224,721)
Taxes payable		(64,253)		(8,861)
Deferred tax liability		(1,050,000)		(144,801)
Total	¥	17,009,807	$	2,345,760
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		233,035
Fair value of previously held equity interest		30,530,000		4,210,280
Non-controlling interest		34,790,000		4,797,760
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(6,895,315)
Total	¥	17,009,807	$	2,345,760

*Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

Summary of fair value of goodwill acquired and the carrying value, customer relationship, and its estimated useful lives

The identifiable goodwill acquired and the carrying value consisted of the following:

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Goodwill	¥	6,996,895	¥	6,996,895	$	964,916
Less: impairment for goodwill		(2,266,893)		(6,996,895)		(964,916)
Goodwill, net	¥	4,730,002	¥	—	$	—

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of June 30, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
Intangible assets - customer relationship	¥	7,000,000	$	965,344	10
Less: accumulated amortization		(1,750,000)		(241,336)
Less: impairment		(5,250,000)		(724,008)
Intangible assets - customer relationship, net	¥	—	$	—

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LEASES (Tables)

12 Months Ended

Jun. 30, 2023

LEASES

Schedule of operating lease related assets and liabilities recorded on the balance sheets

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Rights of use lease assets, net	¥	6,666,759	¥	2,654,900	$	366,127
Operating lease liabilities – current		3,892,774		3,066,146		422,841
Operating lease liabilities – non-current		2,184,635		25,144		3,468
Total operating lease liabilities	¥	6,077,409	¥	3,091,290	$	426,309

Schedule of weighted average remaining lease terms and discount rates for all of operating leases

	June 30,		June 30,
	2022		2023
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	16.18		23.90
Weighted average discount rate	5.0	%	5.0	%

Schedule of maturities of lease liabilities

Twelve months ending June 30,	RMB		US Dollars
2024	¥	3,110,862	$	429,008
2025		26,400		3,641
Total lease payments		3,137,262		432,649
Less: imputed interest		(45,972)		(6,340)
Present value of lease liabilities		3,091,290		426,309
Less: operating lease liabilities – current		3,066,146		422,841
Operating lease liabilities – non-current	¥	25,144	$	3,468

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OTHER PAYABLES (Tables)

12 Months Ended

Jun. 30, 2023

OTHER PAYABLES

Schedule of other payables third parties

	June 30,		June 30,		June 30,
	2022		2023		2023
Third Parties	RMB		RMB		US Dollars
Professional service fees	¥	2,061,016	¥	2,246,101	$	309,752
Distributors and employees		1,009,307		3,073,289		423,826
Accrued expenses		206,045		200,218		27,611
Others		257,550		299,402		41,289
Total	¥	3,533,918	¥	5,819,010	$	802,478

Schedule Of other payables related party

	June 30,		June 30,		June 30,
	2022		2023		2023
Related Parties	RMB		RMB		US Dollars
Expenses paid by the major shareholders	¥	1,396,419	¥	1,796,309	$	247,723
Due to family members of the owners of BHD and FGS		590,159		545,159		75,181
Due to management staff for costs incurred on behalf of the Company		253,557		250,927		34,604
Total	¥	2,240,135	¥	2,592,395	$	357,508

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TAXES PAYABLE (Tables)

12 Months Ended

Jun. 30, 2023

TAXES PAYABLE

Schedule of taxes payable

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
VAT payable	¥	1,741,972	¥	699,601	$	96,479
Income tax payable		440,030		440,030		60,683
Other taxes payable		28,956		23,375		3,224
Total taxes payable	¥	2,210,958	¥	1,163,006	$	160,386

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BANK LOANS (Tables)

12 Months Ended

Jun. 30, 2023

BANK LOANS

Schedule of short-term bank loans

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Beijing Rural Commercial Bank (1)	¥	10,000,000	¥	—	$	—
Bank of Kunlun (2)		—		950,000		131,010
Industry and Commercial Bank of China (“ICBC”) (3)		—		10,000,000		1,379,064
China Construction Bank (4)		—		1,501,481		207,064
Total short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138

(1) On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥5,600,000 as working capital for one year, which will be due on April 12, 2023. On April 13, 2022, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥4,400,000 as working capital for one year, which will be due on May 12, 2023. All these loan bears a fixed interest rate of 4.6% per annum. These loans are guaranteed by one of the founders of the Company and he also pledged self-owned housing property with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. The loan was full repaid upon maturity.

(2) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($399,928) as working capital for eighteen months, with a maturity date of February 29, 2024. The loan has a fixed interest rate of 6.0% per annum. The Company made a withdrawal in an amount of ¥1,000,000 ($137,906) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($6,896). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company also pledged the accounts receivable from the contracts the Company entered into with CNPC as collateral for this loan, and the total value of the contracts are approximately ¥6.5 million (approximately $0.9 million).

(3) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,379,063) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($689,532) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($689,532) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans.

(4) On June 6, 2023, the Company entered into a loan agreement with China Construction Bank to borrow up to ¥1,500,000 ($207,064) as working capital for one year, with a maturity date of June 6, 2024. The loan has a fixed interest rate of 3.95% per annum.

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES (Tables)

12 Months Ended

Jun. 30, 2023

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Schedule of short-term borrowings due to related parties

	June 30,		June 30,		June 30,
	2022		2023		2023
Short-term borrowings due to related parties:	RMB		RMB		US Dollars
Short-term borrowing from a founder, 4.35% annual interest, due on November 17, 2022*	¥	4,006,767	¥	—	$	—
Short-term borrowing from a founder, 4.35% annual interest, due on December 26, 2022*		5,002,389		—		—
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023		—		10,004,055		1,379,622
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024		—		4,993,950		688,697
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024		—		5,020,217		692,320
Total short-term borrowings due to related parties	¥	9,009,156	¥	20,018,222	$	2,760,639

*    The Company repaid the loans in full on maturity date.

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LONG-TERM BORROWINGS DUE TO RELATED PARTY (Tables)

12 Months Ended

Jun. 30, 2023

LONG-TERM BORROWINGS DUE TO RELATED PARTY

Schedule of long-term borrowings due to related party

	June 30,		June 30,		June 30,
	2022		2023		2023
Long-term borrowings due to related party:	RMB		RMB		US Dollars
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.	¥	6,510,606	¥	—	$	—
Less: current portion		(999,530)		—		—
Total long-term borrowings due to related party	¥	5,511,076	¥	—	$	—

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CLASS A ORDINARY SHARES (Tables)

12 Months Ended

Jun. 30, 2023

CLASS A ORDINARY SHARES

Summary of pre-funded warrants activities

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of June 30, 2023:

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	81,667	$	0.18	5.46
Issued	—		—	—
Forfeited	—		—	—
Exercised	(81,667)	$	0.18	—
Expired	—		—	—
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS (Tables)

12 Months Ended

Jun. 30, 2023

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

Summary of fair value measurement inputs under binomial and black-scholes model

	June 30,					June 30,
Input	2023					2022
Number of warrants	47,963		$	441,710		$	489,673
Share price	0.34		$	0.34		$	0.66
Risk-free interest rate	4.41	%		4.41	%		3.00	%
Volatility	127	%		127	%		109	%
Exercise price	112.32			14.40			112.32
Warrant life	3.47 years			3.47 years			4.46 years

				March 15, 2023
	June 30,			(Initial
Input	2023			measurement)
Number of warrants	555,694		$	555,694
Share price	0.34		$	0.37
Risk-free interest rate	3.59	%		3.58	%
Volatility	110	%		110	%
Exercise price	14.40			14.40
Warrant life	5.22 years			5.50 years

Summary of liabilities measured at fair value on recurring basis

			Quoted Prices In		Significant Other		Significant Other
	June 30,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	2,490,000	$	—	$	—	$	2,490,000

			Quoted Prices In		Significant Other		Significant Other
		June 30,	Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability	$	4,360,000	$	—	$	—	$	4,360,000

Summary of company warrants activities and status of warrants

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants	Per Share		(Years)
Outstanding as of June 30, 2021	489,673	$	112.32	5.46
Issued	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30 2023	1,045,367	$	18.90	4.40

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SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Jun. 30, 2023

SHARE-BASED COMPENSATION.

Summary of share options activity

		Weighted
		Average
		Exercise Price
Share Options	Shares	Per Share
Outstanding as of June 30, 2021	6,084	$	180.36
Granted	—		—
Forfeited	(1,640)		266.40
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50

Summary of status of options outstanding and exercisable

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price		Number	life (Years)	Price		Number	life (Years)
$	148.50	4,444	1.59	$	148.50	4,444	1.59
		4,444

Summary of restricted shares granted

Restricted share grants	Shares
Non-vested as of June 30, 2021	7,244
Granted	405,130
Vested	(291,967)
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938

Summary of outstanding restricted shares

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share		Number	Period (Years)
$	18.72	60,827	1.67
	6.66	111,111	0.21
		171,938

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INCOME TAX (Tables)

12 Months Ended

Jun. 30, 2023

INCOME TAX

Schedule of income (loss) before provision for income taxes

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Outside China areas	¥	4,011,449	¥	113,741,972	¥	(34,038,460)	$	(4,694,118)
China		(30,402,528)		(20,066,451)		(27,419,593)		(3,781,335)
Total	¥	(26,391,079)	¥	93,675,521	¥	(61,458,053)	$	(8,475,453)

Schedule of deferred tax assets, net

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Deferred tax assets:
Allowance for credit losses	¥	1,781,573	¥	1,019,592	$	140,608
Impairment for inventory		59,913		90,322		12,456
Net operating loss carryforwards		16,511,047		23,290,731		3,211,938
Subtotal		18,352,533		24,400,645		3,365,002
Less: Valuation allowance		(17,193,874)		(24,107,246)		(3,324,540)
Total deferred tax assets, net		1,158,659		293,399		40,462
Deferred tax liabilities:				​		​
Accelerated amortization of intangible assets		(119,271)		(146,511)		(20,205)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,257)
Recognition of customer relationship arising from business combinations		(892,500)		—		—
Total deferred tax liabilities		(1,158,659)		(293,399)		(40,462)
Deferred tax assets, net	¥	—	¥	—	$	—

Schedule of NOL expiration

Twelve months ending June 30,		RMB	US Dollars
2024	¥	13,146,922	$	1,813,043
2025		10,484,902		1,445,934
2026		19,617,124		2,705,325
2027		32,533,742		4,486,608
2028		57,811,664		7,972,593
Total	¥	133,594,354	$	18,423,503

Schedule of reconciliation of income tax expense (benefit)

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Income tax (benefits) expenses calculated at PRC statutory rates	¥	(6,597,770)	¥	23,418,880	¥	(15,364,513)	$	(2,118,863)
Nondeductible expenses and others		338,058		263,655		539,247		74,366
Effect of tax rate differential		626,245		(24,061,020)		7,949,048		1,096,224
Benefit of revenue exempted from enterprise income tax		(57,250)		(1,799)		(18,814)		(2,595)
Change in valuation allowances		5,264,804		(233,590)		6,913,371		953,397
Tax refund		(98,338)		—		—		—
Income tax expenses (benefit)	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

Schedule of company's income tax expense (benefit)

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Current income tax provision (benefit)	¥	(98,338)	¥	10,214	¥	18,339	$	2,529
Deferred income tax benefit		(425,913)		(624,088)		—		—
Expense (benefit) for income tax	¥	(524,251)	¥	(613,874)	¥	18,339	$	2,529

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NON-CONTROLLING INTEREST (Tables)

12 Months Ended

Jun. 30, 2023

NON-CONTROLLING INTEREST.

Schedule of non-controlling interest

	As of June 30, 2022
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	993,771
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(7,296,511)
Unappropriated retained earnings (deficit)		3,477,493		3,616,001		(4,972,129)		(1,520,225)		(893,405)		(292,265)		(43,635)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,584)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		5,194,303
Total non-controlling interests	¥	5,109,643	¥	3,804,148	¥	(167,129)	¥	(1,520,225)		(14,973,405)	¥	(7,746,968)	$	(1,156,656)

	As of June 30, 2023
			Nanjing		Gan Su		Qinghai
	BHD		Recon		BHD		BHD		FGS		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		US Dollars
Paid-in capital	¥	1,651,000	¥	200,000	¥	4,805,000	¥	—	¥	—	¥	6,656,000	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

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COMMITMENTS AND CONTINGENCY (Tables)

12 Months Ended

Jun. 30, 2023

COMMITMENTS AND CONTINGENCY

Schedule of total future minimum purchase commitment

Twelve months ending June 30,	RMB		US Dollars
2024	¥	22,395,958	$	3,088,544
2025		300,000		41,372
2026		150,000		20,686
Total minimum payments required	¥	22,845,958	$	3,150,602

Schedule of non-cancellable operating lease agreements

Twelve months ending June 30,	RMB		US Dollars
2024	¥	336,527	$	46,409
Total	¥	336,527	$	46,409

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RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

12 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

Schedule of sales to related party

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd. *	¥	85,657	¥	—	¥	—	$	—
Total revenue from a related party	¥	85,657	¥	—	¥	—	$	—

* The noncontrolling shareholder of Gan Su BHD owns 10% interests in Urumqi Yikeli Automatic Control Equipment Co., Ltd.

Schedule of prepaid expenses - related parties

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Founders	¥	275,000	¥	—	$	—
Total prepaid expenses - related parties	¥	275,000	¥	—	$	—

Schedule of leases from related parties

			Monthly Rent		Monthly Rent
Lessee	Lessor	Rent Period	RMB		US Dollars
Nanjing Recon	One of the founders	April 1, 2022 - March 31, 2024	¥	40,000	$	5,516
BHD	One of the founders	January 1, 2023- Dec 31, 2023		31,667		4,367
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,103

XML

VARIABLE INTEREST ENTITIES (Tables)

12 Months Ended

Jun. 30, 2023

VARIABLE INTEREST ENTITIES

Summary of information regarding consolidated VIEs

	June 30, 2022		June 30, 2023		June 30, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	18,033,666	¥	37,661,118	$	5,092,821
Restricted cash		723,560		731,545		100,885
Notes receivable		10,828,308		3,742,390		516,099
Accounts receivable, net		22,577,980		27,453,415		3,785,999
Inventories, net		3,894,369		6,330,701		873,044
Other receivables, net		5,500,981		11,618,275		1,602,233
Loans to third parties		30,270,563		37,770,188		5,208,747
Purchase advances, net		178,208		1,592,761		219,652
Contract costs, net		33,858,820		49,572,685		6,836,386
Prepaid expenses		165,120		121,329		16,732
Prepaid expenses- related parties		275,000		—		—
Total current assets		126,306,575		176,594,407		24,252,598
		​		​		​
Property and equipment, net		25,474,162		24,752,864		3,413,576
Construction in progress		239,739		—		—
Intangible assets, net		5,950,000		—		—
Long-term other receivables, net		1,564,381		3,640		502
Goodwill		4,730,002		—		—
Operating lease right-of-use assets		6,666,759		2,654,900		366,127
Total Assets	¥	170,931,618	¥	204,005,811	$	28,032,803
LIABILITIES
Short-term bank loans	¥	10,000,000	¥	12,451,481	$	1,717,138
Accounts payable		12,826,108		10,791,721		1,488,246
Other payables		1,469,761		3,904,135		538,405
Other payable- related parties		1,061,081		1,356,915		187,127
Contract liabilities		2,001,277		2,748,361		379,017
Accrued payroll and employees’ welfare		1,213,040		1,048,061		144,534
Intercompany payables*		194,373,010		263,935,922		36,398,428
Taxes payable		2,211,190		1,163,237		160,418
Short-term borrowings - related parties		9,009,156		20,018,222		2,760,639
Long-term borrowings - related party - current portion		999,530		—		—
Operating lease liabilities - current		3,892,774		3,066,146		422,841
Total current liabilities		239,056,927		320,484,201		44,196,793
Operating lease liabilities - non-current		2,184,635		25,144		3,468
Contract liabilities - non-current		106,000		—		—
Long-term borrowings - related party		5,511,076		—		—
Deferred tax liability		187,972		—		—
Total Liabilities	¥	247,046,610	¥	320,509,345	$	44,200,261

*Intercompany payables are eliminated upon consolidation.

XML

SEGMENT REPORTING (Tables)

12 Months Ended

Jun. 30, 2023

SEGMENT REPORTING

Summary of segment reporting information

The following tables present summary information by segment for the years ended June 30, 2021, 2022 and 2023, respectively:

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Automation product and software	¥	18,535,166	¥	31,944,055	¥	26,628,216	$	3,672,199
Equipment and accessories		15,791,623		17,159,381		16,248,197		2,240,729
Oilfield environmental protection		11,043,979		25,335,363		19,116,560		2,636,294
Platform outsourcing services		2,567,807		9,338,772		5,121,405		706,274
Total revenue	¥	47,938,575	¥	83,777,571	¥	67,114,378	$	9,255,496

	For the year ended June 30, 2023
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378
Cost of revenue and related tax		23,610,281		8,945,796		13,955,673		1,735,645		48,247,395
Gross profit	¥	3,017,935	¥	7,302,401	¥	5,160,887	¥	3,385,760	¥	18,866,983
Depreciation and amortization	¥	857,332	¥	689,552	¥	2,077,165	¥	59,537	¥	3,683,586
Total capital expenditures	¥	803,311	¥	46,681	¥	75,728	¥	14,953	¥	940,673
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,640,699	¥	16,248,197	¥	19,116,560	¥	4,470,462	¥	58,475,918
Services rendered over time		7,987,517		—		—		650,943		8,638,460
Total revenue	¥	26,628,216	¥	16,248,197	¥	19,116,560	¥	5,121,405	¥	67,114,378

	For the year ended June 30, 2022
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571
Cost of revenue and related tax		29,824,014		10,479,615		20,222,446		3,826,759		64,352,834
Gross profit	¥	2,120,041	¥	6,679,766	¥	5,112,917	¥	5,512,013	¥	19,424,737
Depreciation and amortization	¥	421,619	¥	814,960	¥	2,045,601	¥	57,688	¥	3,339,868
Total capital expenditures	¥	14,823	¥	21,456	¥	768,795	¥	194,578	¥	999,652
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	31,944,055	¥	17,159,381	¥	15,779,825	¥	9,338,772	¥	74,222,033
Services rendered over time		—		—		9,555,538		—		9,555,538
Total revenue	¥	31,944,055	¥	17,159,381	¥	25,335,363	¥	9,338,772	¥	83,777,571

	For the year ended June 30, 2021
	Automation		Equipment		Oilfield		Platform
	product and		and		environmental		outsourcing
	software		accessories		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
Revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575
Cost of revenue and related tax		19,942,541		11,264,971		8,045,567		1,470,468		40,723,547
Gross profit	¥	(1,407,375)	¥	4,526,652	¥	2,998,412	¥	1,097,339	¥	7,215,028
Depreciation and amortization	¥	277,496	¥	851,612	¥	2,000,952	¥	20,729	¥	3,150,789
Total capital expenditures	¥	26,761	¥	136,224	¥	315,944	¥	43,487	¥	522,416
Timing of revenue recognition
Goods transferred/service rendered at a point in time	¥	18,535,166	¥	15,791,623	¥	9,654,418	¥	2,567,807	¥	46,549,014
Services rendered over time		—		—		1,389,561		—		1,389,561
Total revenue	¥	18,535,166	¥	15,791,623	¥	11,043,979	¥	2,567,807	¥	47,938,575

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
Total assets:
Automation product and software	¥	147,377,607	¥	167,009,315	$	23,031,642
Equipment, accessories and others		149,876,933		170,809,759		23,555,743
Oilfield environmental protection		107,755,500		107,393,609		14,810,256
Platform outsourcing services		85,232,044		86,611,894		11,944,323
Total assets	¥	490,242,084	¥	531,824,577	$	73,341,964

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables)

12 Months Ended

Jun. 30, 2023

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Schedule of parent company balance sheets

	June 30,		June 30,		June 30,
	2022		2023		2023
	RMB		RMB		US Dollars
ASSETS
Cash	¥	296,838,959	¥	236,146,589	$	32,566,104
Due from intercompany*		205,224,961		291,525,426		40,203,195
Other current assets		20,364,424		80,036,017		11,037,471
Total Current Assets		522,428,344		607,708,032		83,806,770
Investment in subsidiaries and VIEs		(77,566,835)		(122,920,490)		(16,951,511)
Total Assets	¥	444,861,509	¥	484,787,542	¥	66,855,259
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		7,552,452		3,964,912		546,786
Total Current Liabilities		7,552,452		3,964,912		546,786
		​		​
Warrant liability		16,677,328		31,615,668		4,360,000
Total Liabilities		24,229,780		35,580,580		4,906,786
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
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 2023, respectively**		19,461		26,932		3,714
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 2023, respectively**		2,604		4,693		647
Additional paid-in capital**		516,426,799		580,340,061		80,032,554
Accumulated deficit		(107,124,596)		(166,291,897)		(22,932,701)
Accumulated other comprehensive income		11,307,461		35,127,173		4,844,259
Total Shareholders’ Equity		420,631,729		449,206,962		61,948,473
		​		​		​
Total Liabilities and Shareholders’ Equity	¥	444,861,509	¥	484,787,542	$	66,855,259

* Due from intercompany are eliminated upon consolidation.

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

Schedule of parent company statements of operations and comprehensive income (loss)

		For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
Revenue	¥	121,197	¥	—	¥	—	$	—
Cost of revenue		97,024		—		—		—
Gross profit		24,173		—		—		—
General and administrative expenses		29,502,464		62,918,622		54,494,219		7,515,097
Provision for credit losses		1,933,986		1,923,382		(4,141,588)		(571,151)
Loss from operations		(31,412,277)		(64,842,004)		(50,352,631)		(6,943,946)
Fair value changes of warrants liability		35,365,792		174,485,575		6,116,000		843,435
Other income		320,235		4,105,116		10,108,783		1,394,065
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries		(27,106,484)		(18,161,892)		(25,039,453)		(3,453,098)
						​		​
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
								​
Foreign currency translation adjustment		(850,895)		9,332,625		23,819,712		3,284,889
Comprehensive income (loss) attributable to the Company	¥	(23,683,629)	¥	104,919,420	¥	(35,347,589)	$	(4,874,655)

Schedule of parent company statements of cash flows

	For the years ended June 30,
	2021		2022		2023		2023
	RMB		RMB		RMB		US Dollars
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥	(22,832,734)	¥	95,586,795	¥	(59,167,301)	$	(8,159,544)
Adjustments to reconcile net cash flows from operating activities:						​		​
Changes in warrants liabilities		(35,365,792)		(174,485,575)		(6,116,000)		(843,435)
Amortization of offering cost of warrants		12,584,024		—		1,483,306		204,557
Provision for doubtful accounts		1,933,986		1,923,382		(4,141,588)		(571,151)
Restricted shares issued for management and employees		6,140,037		39,263,485		26,191,707		3,612,002
Income (loss) from investment in unconsolidated entity		15,411		(15,411)		—		—
Restricted shares issued for services		—		8,935,919		5,805,840		800,662
Equity in earnings of subsidiaries and VIEs		27,106,484		18,161,892		25,039,453		3,453,098
Other current assets		(474,891)		(111,521)		(8,396,555)		(1,157,938)
Other current liabilities		4,776,846		(5,090,698)		(3,587,540)		(494,744)
						​		​
Net cash used in operating activities		(6,116,629)		(15,831,732)		(22,888,678)		(3,156,493)
Cash flows from investing activities:
Repayments from loans to third parties		1,950,000		166,405,032		32,413,311		4,470,000
Payments made for loans to third parties		(50,288,458)		(137,391,510)		(79,546,761)		(10,970,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(29,505,002)		(55,569,342)		(86,300,464)		(11,901,378)
				​		​		​
Net cash used in investing activities		(77,843,460)		(26,555,820)		(133,433,914)		(18,401,378)
Cash flows from financing activities:
Proceeds from warrants issued with common share		212,051,414		—		17,493,069		2,412,405
Proceeds from sale of common share, net of issuance costs		81,091,141		—		28,174,993		3,885,509
Proceeds from sale of prefunded warrants, net of issuance costs		30,276,569		93,321		3,750,282		517,188
Proceeds from share issuance for warrants exercised		21,130,035		—		—		—
Proceeds from issuance of convertible notes		42,014,616		—		—		—
Net cash provided by financing activities		386,563,775		93,321		49,418,344		6,815,102
						​		​
Effect of exchange rate fluctuation on cash		274,149		14,016,375		46,211,878		6,372,909
				​		​		​
Net increase (decrease) in cash		302,877,835		(28,277,856)		(60,692,370)		(8,369,860)
				​		​		​
Cash, beginning of year		22,238,980		325,116,815		296,838,959		40,935,964
						​		​
Cash, end of year	¥	325,116,815	¥	296,838,959	¥	236,146,589	$	32,566,104
Non-cash investing and financing activities
Issuance of common share in exchange of shares of Starry, net of issuance costs	¥	27,675,450	¥	—	¥	—	$	—
Cancellation of ordinary shares issued to Starry	¥	—	¥	(27,675,450)	¥	—	$	—
Conversion of convertible notes to 9,225,338 shares of ordinary shares	¥	42,435,669	¥	—	¥	—	$	—

XML

ORGANIZATION AND NATURE OF OPERATIONS (Details)					12 Months Ended
	May 19, 2021	Apr. 26, 2021	Oct. 23, 2018	Sep. 25, 2017	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Aug. 21, 2018	Oct. 16, 2017 CNY (¥)	May 23, 2017 CNY (¥)
ORGANIZATION AND NATURE OF OPERATIONS
Variable interest entity, terms of arrangements					the Company has the right to absorb 90% of net interest or 100% of net loss of those Domestic Companies for accounting purposes.
Ownership interest (as a percent)							8
Individuals
ORGANIZATION AND NATURE OF OPERATIONS
Remaining paid in capital					¥ 12,500,000	$ 1,812,041
Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership percentage					49.00%	49.00%
Gan Su BHD Environmental Technology Co., Ltd | Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership percentage					51.00%	51.00%
Qing Hai BHD New Energy Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership percentage			10.00%
Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Paid In capital					¥ 200,000
Remaining paid in capital					33,300,000	$ 4,827,276
Gan Su BHD Environmental Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Capital									¥ 50,000,000.0
Paid In capital					¥ 27,495,000	$ 3,791,734
Gan Su BHD Environmental Technology Co., Ltd | Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Percentage of equity interest transferred	3.60%	15.40%		2.00%
Gan Su BHD Environmental Technology Co., Ltd | Nanjing Recon
ORGANIZATION AND NATURE OF OPERATIONS
Ownership interest held by parent					51.00%	51.00%
Percentage of equity interest transferred	15.40%
Ownership interest held by noncontrolling owner					19.00%	19.00%
Qing Hai BHD New Energy Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Capital								¥ 50,000,000.0
Paid In capital					¥ 4,200,000	$ 579,206
Equity interest of ownership percentage			55.00%		75.00%

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ORGANIZATION AND NATURE OF OPERATIONS - Energy consumption market opened to private and foreign companies (Details) - Future Gas Station (Beijing) Technology, Ltd	Jan. 13, 2021 CNY (¥)	Jan. 13, 2021 USD ($)	Jun. 30, 2019 CNY (¥) shares	Aug. 21, 2018 CNY (¥) shares	Feb. 04, 2021	Dec. 15, 2017
ORGANIZATION AND NATURE OF OPERATIONS
Aggregate amount invested	¥ 30,530,000	$ 4,210,280
Domestic Companies
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired						8.00%
Ownership interest held					51.00%
Domestic Companies | Investment Agreement
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired			43.00%	43.00%
Investment in FGS agreed | ¥				¥ 10,000,000
Number of shares issued | shares			487,057	487,057
Aggregate amount invested | ¥			¥ 35,116,707
Domestic Companies | Investment Agreement | Post 2024 Reverse Stock Split
ORGANIZATION AND NATURE OF OPERATIONS
Number of shares issued | shares			27,059	27,059
Domestic Companies | Fourth supplemental agreement
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired				8.00%	8.00%

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2020 CNY (¥)	Jun. 30, 2023 USD ($)
SIGNIFICANT ACCOUNTING POLICIES
Foreign currency transactions, description	The translation has been made at the rate of ¥7.2513 = US$1.00, the approximate exchange rate prevailing on June 30, 2023.	The translation has been made at the rate of ¥7.2513 = US$1.00, the approximate exchange rate prevailing on June 30, 2023.
Short-term investments	¥ 184,200,000		¥ 0			$ 25,400,000
Accrued interest income from short-term investment	2,900,000	$ 400,198	0
Allowance for credit losses	7,300,000					1,000,000.0
Impairment for long-lived assets	6,259,124	863,173	0	¥ 768,312
Investment Income				266,707
Contract assets and contract liabilities from contracts with customers
Contract costs	49,572,685		33,858,820			6,836,386
Contract liabilities	2,748,365		2,107,277			$ 379,017
Shipping and handling expenses	10,638,978	1,467,182	10,150,802	8,038,965
Impairment loss			0	0	¥ 0
Investment income		0	15,411
Revenue recognized	1,901,277	262,198	7,390,276	1,899,561
Impairment loss on goodwill and intangible assets	4,730,002	652,297	2,266,893	0
Shipping and Handling
Contract assets and contract liabilities from contracts with customers
Shipping and handling expenses	¥ 789,932	$ 108,937	¥ 537,371	¥ 444,824
Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	2 years					2 years
Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	10 years					10 years
Motor vehicles | Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	3 years					3 years
Motor vehicles | Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	5 years					5 years
Office equipment and fixtures | Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	2 years					2 years
Office equipment and fixtures | Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	5 years					5 years
Equipment
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	10 years					10 years
Equipment | Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	20 years					20 years
Utilities and Facilities
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life	20 years					20 years

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SIGNIFICANT ACCOUNTING POLICIES - Basic and diluted earnings per share (Details)					12 Months Ended
		May 01, 2024	Mar. 29, 2024	Dec. 10, 2019	Jun. 30, 2023 CNY (¥) ¥ / shares shares		Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 CNY (¥) ¥ / shares shares		Jun. 30, 2021 CNY (¥) ¥ / shares shares		Jun. 30, 2023 USD ($)
Numerator:
Net income (loss) attributable to Recon Technology, Ltd					¥ (59,167,301)		$ (8,159,544)	¥ 95,586,795		¥ (22,832,734)
Denominator:
Weighted-average number of ordinary shares outstanding - basic	[1]				2,157,158		2,157,158	1,721,529		760,116
Outstanding options/warrants/convertible notes					¥ 1,115,088			¥ 585,357		¥ 584,571		$ 1,115,088
Weighted-average number of ordinary shares outstanding - diluted	[1]				2,157,158		2,157,158	1,721,529		760,116
Earnings (loss) per share - basic | (per share)					¥ (27.43)		$ (3.78)	¥ 55.52	[1]	¥ (30.04)	[1]
Earnings (loss) per share - diluted | (per share)					¥ (27.43)	[1]	$ (3.78)	¥ 55.52	[1]	¥ (30.04)	[1]
Reverse stock split		0.056	0.056		0.2		0.2
Class A ordinary shares
Denominator:
Weighted-average number of ordinary shares outstanding - basic					1,880,065		1,880,065	1,612,427		760,116
Reverse stock split		0.056	0.056	0.2
Class B ordinary shares
Denominator:
Weighted-average number of ordinary shares outstanding - basic					277,093		277,093	109,102
Reverse stock split					0.056		0.056
Class B common stock convertible conversion ratio					0.056							0.056

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

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ACCOUNTS RECEIVABLE, NET - Accounts receivable (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Third Parties
Total third-parties, net	¥ 27,453,415	$ 3,785,999	¥ 22,577,980
Third parties
Third Parties
Accounts receivable	27,606,257	3,807,077	27,206,752
Allowance for credit losses	(152,842)	(21,078)	(4,628,772)
Total third-parties, net	27,453,415	3,785,999	22,577,980
Third Parties- long-term
Accounts receivable	842,607	116,201	4,983,698
Allowance for credit losses	(842,607)	(116,201)	(4,983,698)
Total third-parties, net	¥ 0	$ 0	¥ 0

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ACCOUNTS RECEIVABLE, NET - Movement of allowance for doubtful accounts (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
ACCOUNTS RECEIVABLE, NET
Charge to (reversal of) allowance			¥ 153,329	¥ 3,730,606
Third parties
ACCOUNTS RECEIVABLE, NET
Ending balance	¥ 995,449	$ 137,279	9,612,470	¥ 9,315,427
Charge to (reversal of) allowance	(8,767,356)	(1,209,073)	153,329
Foreign currency translation adjustments	150,335	20,733	143,714
Beginning balance	¥ 9,612,470	$ 1,325,619	¥ 9,315,427

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ACCOUNTS RECEIVABLE, NET - Additional Information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
ACCOUNTS RECEIVABLE, NET
Net recovery of provision for credit losses made for accounts receivable due from related-party	¥ 8,767,356	$ 1,209,073
Percentage of not-collection from our customers	54.7	54.7
Amount of not-collection from our customers	¥ 15,000,000.0	$ 2,100,000
Provision for (net recovery of) credit losses	¥ (9,038,985)	$ (1,246,533)	¥ (658,823)	¥ 8,191,247

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NOTES RECEIVABLE (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
NOTES RECEIVABLE
Notes receivable			¥ 3,742,390	$ 516,099	¥ 10,828,308
Subsequent event
NOTES RECEIVABLE
Notes receivable	¥ 3,200,000	$ 400,000
Percentage of notes subsequently collected	85.0	85.0

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OTHER RECEIVABLES, NET - Summary of Other receivables, net (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 CNY (¥)
Current Portion
Other receivable - current portion	¥ 2,185,733	$ 301,427	¥ 5,501,833
Third parties
Current Portion
Business advances to officers and staffs	854,162	117,795	1,441,807
Deposits for projects	1,247,992	172,106	3,259,236
VAT recoverable	690,053	95,163	437,095
Others	1,392,126	191,983	2,547,520
Allowance for credit losses	(1,994,960)	(275,118)	(619,444)	$ (85,426)	¥ (918,153)
Subtotal	2,189,373	301,929	7,066,214
Less: Long term portion	(3,640)	(502)	(1,564,381)
Other receivable - current portion	¥ 2,185,733	$ 301,427	¥ 5,501,833

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OTHER RECEIVABLES, NET - Summary of Movement of allowance for credit losses (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
OTHER RECEIVABLES, NET
Charge to (reversal of) allowance	¥ 1,375,516	$ 189,692	¥ 294,644	¥ 187,161
Third parties
OTHER RECEIVABLES, NET
Beginning balance	619,444	85,426	918,153
Charge to (reversal of) allowance	1,375,516	189,692	(294,644)
Less: written off			(4,065)
Ending balance	¥ 1,994,960	$ 275,118	¥ 619,444	¥ 918,153

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OTHER RECEIVABLES, NET - Additional Information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
OTHER RECEIVABLES, NET
Net recovery of provision for credit losses of other receivables	¥ 1,375,516	$ 189,692	¥ 294,644	¥ 187,161

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LOANS TO THIRD PARTIES (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
LOANS TO THIRD PARTIES
Working fund to third party companies	¥ 123,055,874	$ 16,970,181	¥ 50,383,822
Loans to third parties	¥ 123,055,874	$ 16,970,181	¥ 50,383,822

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LOANS TO THIRD PARTIES - Additional Information (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)
LOANS TO THIRD PARTIES
Effective percentage	8.30%	8.30%
Proceeds from collection	¥ 10.2	$ 1.4

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CONTRACT COSTS, NET (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
CONTRACT COSTS, NET
Contract costs	¥ 52,158,840		¥ 37,922,302		$ 7,193,033
Allowance for credit losses	(2,586,155)		(4,063,482)	¥ (4,548,910)	(356,647)	$ (560,380)
Total contract costs, net	¥ 49,572,685		33,858,820		$ 6,836,386
Percentage of total contracts costs subsequently realized	23.20%				23.20%
Total contracts costs that have been subsequently realized	¥ 11,500,000				$ 1,600,000
Net recovery of provision for credit losses	¥ 1,720,095	$ 237,212	¥ 552,008	¥ 4,647,802

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CONTRACT COSTS, NET - Movement of impairment of contract costs (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
CONTRACT COSTS, NET
Beginning balance	¥ 4,063,482	$ 560,380	¥ 4,548,910
Reversal of allowance	(1,720,095)	(237,212)	(552,008)
Charge to cost of sales	242,768	33,479	66,580
Ending balance	¥ 2,586,155	$ 356,647	¥ 4,063,482

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PROPERTY AND EQUIPMENT, NET (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
PROPERTY AND EQUIPMENT, NET.
Total cost	¥ 39,992,837	$ 5,515,264	¥ 37,856,724
Less: accumulated depreciation	(14,297,511)	(1,971,717)	(11,614,250)
Less: accumulated impairment	(942,462)	(129,971)	(768,312)
Property and equipment, net	24,752,864	3,413,576	25,474,162
Motor vehicles
PROPERTY AND EQUIPMENT, NET.
Total cost	5,176,175	713,827	5,312,274
Office equipment and fixtures
PROPERTY AND EQUIPMENT, NET.
Total cost	1,440,819	198,698	1,442,395
Production equipment
PROPERTY AND EQUIPMENT, NET.
Total cost	31,115,843	4,291,071	31,102,055
Leasehold improvement
PROPERTY AND EQUIPMENT, NET.
Total cost	¥ 2,260,000	$ 311,668	0
Construction in progress
PROPERTY AND EQUIPMENT, NET.
Property and equipment, net			¥ 239,739

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PROPERTY AND EQUIPMENT, NET - Additional Information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
PROPERTY AND EQUIPMENT, NET
Depreciation expenses	¥ 2,983,586	$ 411,456	¥ 2,611,854	¥ 2,773,122
Impairment for long-lived assets	174,150	24,017	0	768,312
Loss from property and equipment disposal	¥ (12,782)	$ (1,763)	¥ 48,628	¥ 19,590

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Additional Information (Details)								12 Months Ended
	May 01, 2024	Mar. 29, 2024	Nov. 10, 2021 shares	Jun. 03, 2021 USD ($) shares	Jan. 13, 2021 CNY (¥) item shares	Dec. 10, 2019	Aug. 21, 2018 USD ($) shares	Jun. 30, 2023 CNY (¥) item	Jun. 30, 2023 USD ($) item	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 03, 2021 CNY (¥)	Jun. 03, 2021 USD ($) $ / shares	Jan. 13, 2021 USD ($) item $ / shares	Dec. 31, 2020
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Cost method investment ownership percentage							43.00%								43.00%
Ownership interest (as a percent)							8
Shares							487,057
Reverse stock split	0.056	0.056						0.2	0.2
Remeasurement gain of previously held equity interests in connection with step acquisition								¥ 0	$ 0	¥ 0	¥ 979,254
Investment loss | ¥											266,707
Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares							27,059
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Ownership interest (as a percent)					51									51
Payments to acquire additional interest in subsidiaries | $							$ 10,000,000
Number of gas stations extending business | item								200	200
Number of Company's subsidiaries who entered into the fourth supplemental agreement to the investment agreement | item					2									2
Equity method investment additional information							As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares of the Company (the “Restricted Shares”) to the other shareholders of FGS within 30 days after FGS finalizes recording the Company’s corresponding interest at the local governmental agency.
Stock price | $ / shares														$ 1.61
Fair market value of waived performance goals					¥ 1,689,807									$ 261,667
Remeasurement gain of previously held equity interests in connection with step acquisition | ¥								¥ 979,254
Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Stock price | $ / shares														$ 28.98
Investment in Starry Blockchain Energy Pte. Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Cost method investment ownership percentage												30.00%	30.00%
Ownership interest (as a percent)												30	30
Payments to acquire equity method investments | $				$ 3,000,000
Stock price | $ / shares													$ 13.80
Fair value of shares issued												¥ 27,675,450	$ 4,327,600
Investment loss | ¥								15,411		15,411
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Percentage of equity interest to be acquired in exchange for waiver of performance goals					8.00%									8.00%
Consideration in shares					487,057
Percentage of deemed consideration of equity.					8.00%
Number of shares cancelled					162,352
Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares					27,059
Number of shares cancelled					9,020
Future Gas Station (Beijing) Technology, Ltd | Customer relationship
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Amortization expense								700,000	$ 96,534	700,000	350,000
Impairment loss for intangible assets								¥ 5,250,000	$ 724,008	¥ 0	¥ 0
Restricted shares | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares					487,057
Restricted shares | Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares					27,059
Maximum
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Ownership interest (as a percent)							43
Class A ordinary shares
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Reverse stock split	0.056	0.056				0.2
Class A ordinary shares | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares							487,057
Class A ordinary shares | Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares							27,059
Class A ordinary shares | Starry
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Number of shares issued			500,000
Class A ordinary shares | Restricted shares | Investment in Starry Blockchain Energy Pte. Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares			316,345	316,345
Stock price | $ / shares													$ 9.48

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair values of the identifiable assets and liabilities (Details)			12 Months Ended
	Jan. 13, 2021 CNY (¥)	Jan. 13, 2021 USD ($)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2021 USD ($)	Jan. 13, 2021 USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY.
Capital contribution receivable due from non-controlling Interest			¥ (50,000,000)	$ (6,895,315)
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY.
Cash	¥ 471,843				$ 65,070
Accounts receivable, net	831,049				114,607
Other receivables, net	144,285				19,898
Contract costs, net	75,250				10,377
Prepaid expenses	91,132				12,568
Property and equipment, net	118,130				16,291
Intercompany receivables	6,850,000				944,658
Intangible assets- customer relationship	7,000,000				965,344
Goodwill	6,996,895				964,916
Accounts payable	(1,032,078)				(142,330)
Other payables	(1,273,182)				(175,580)
Other payable- related parties	(479,959)				(66,189)
Deferred revenue	(39,786)				(5,487)
Accrued payroll and employees' welfare	(1,629,519)				(224,721)
Taxes payable	(64,253)				(8,861)
Deferred tax liability	(1,050,000)				(144,801)
Total	17,009,807				$ 2,345,760
Deemed equity consideration to acquire 8% equity interest in FGS	1,689,807	$ 233,035
Fair value of previously held equity interest	30,530,000	4,210,280
Non-controlling interest	34,790,000	4,797,760
Capital contribution receivable due from non-controlling Interest	(50,000,000)	(6,895,315)
Total	¥ 17,009,807	$ 2,345,760

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair value of identified goodwill acquired and carrying value (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2023 USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Goodwill, net			¥ 4,730,002
Impairment loss on goodwill	¥ 4,730,002	$ 652,297	2,266,893	¥ 0
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Goodwill	6,996,895		6,996,895		$ 964,916
Less: impairment for goodwill	(6,996,895)		(2,266,893)		$ (964,916)
Goodwill, net			4,730,002
Impairment loss on goodwill	¥ 4,730,002	$ 652,297	¥ 2,266,893	¥ 0

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair value of identified intangible assets, customer relationship and its estimated useful lives (Details) - 12 months ended Jun. 30, 2023 - Future Gas Station (Beijing) Technology, Ltd - Customer Relationships	CNY (¥)	USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Intangible assets - customer relationship	¥ 7,000,000	$ 965,344
Less: accumulated amortization	(1,750,000)	(241,336)
Less: impairment	¥ (5,250,000)	$ (724,008)
Average Useful Life (in Years)	10 years

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LEASES - Operating lease related assets and liabilities (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Operating lease related assets and liabilities recorded on the balance sheets
Rights of use lease assets, net	¥ 2,654,900	$ 366,127	¥ 6,666,759
Operating lease liabilities - current	3,066,146	422,841	3,892,774
Operating lease liabilities - non-current	25,144	3,468	2,184,635
Total operating lease liabilities	¥ 3,091,290	$ 426,309	¥ 6,077,409

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LEASES - Weighted average remaining lease terms and discount rates (Details)	Jun. 30, 2023	Jun. 30, 2022
Remaining lease terms and discount rate:
Weighted average remaining lease term (years)	23 years 10 months 24 days	16 years 2 months 4 days
Weighted average discount rate	5.00%	5.00%

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LEASES - Maturities of lease liabilities (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Office Leases Commitment - short term
2024	¥ 3,110,862	$ 429,008
2025	26,400	3,641
Total lease payments	3,137,262	432,649
Less: imputed interest	(45,972)	(6,340)
Present value of lease liabilities	3,091,290	426,309	¥ 6,077,409
Operating lease liabilities - current	3,066,146	422,841	3,892,774
Operating lease liabilities - non-current	¥ 25,144	$ 3,468	¥ 2,184,635

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LEASES - Additional information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
LEASES
Operating lease costs	¥ 3,354,147	$ 462,558	¥ 3,443,813	¥ 2,034,105
Short-term lease	2,683,860	370,121	967,247	1,291,685
Impairment loss for the ROU	¥ 834,974	$ 115,148	¥ 0	¥ 0
Minimum
LEASES
Lease term	1 year	1 year
Maximum
LEASES
Lease term	50 years	50 years

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OTHER PAYABLES - Third Parties (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
OTHER PAYABLES
Total	¥ 5,819,010	$ 802,478	¥ 3,533,918
Third parties
OTHER PAYABLES
Professional service fees	2,246,101	309,752	2,061,016
Distributors and employees	3,073,289	423,826	1,009,307
Accrued expenses	200,218	27,611	206,045
Others	299,402	41,289	257,550
Total	¥ 5,819,010	$ 802,478	¥ 3,533,918

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OTHER PAYABLES - Related Parties (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
OTHER PAYABLES
Total	¥ 5,819,010	$ 802,478	¥ 3,533,918
Related party
OTHER PAYABLES
Expenses paid by the major shareholders	1,796,309	247,723	1,396,419
Due to family members of the owners of BHD and FGS	545,159	75,181	590,159
Due to management staff for costs incurred on behalf of the company	250,927	34,604	253,557
Total	¥ 2,592,395	$ 357,508	¥ 2,240,135

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TAXES PAYABLE (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
TAXES PAYABLE
VAT payable	¥ 699,601	$ 96,479	¥ 1,741,972
Income tax payable	440,030	60,683	440,030
Other taxes payable	23,375	3,224	28,956
Total taxes payable	¥ 1,163,006	$ 160,386	¥ 2,210,958

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BANK LOANS - Short-term bank loans (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
BANK LOANS
Total short-term bank loans	¥ 12,451,481	$ 1,717,138	¥ 10,000,000
Bank of Kunlun
BANK LOANS
Total short-term bank loans	950,000	131,010
Beijing Rural Commercial Bank
BANK LOANS
Total short-term bank loans			¥ 10,000,000
Industrial and Commercial Bank of China
BANK LOANS
Total short-term bank loans	10,000,000	1,379,064
China Construction Bank
BANK LOANS
Total short-term bank loans	¥ 1,501,481	$ 207,064

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BANK LOANS - Short-term bank loans - Narrative (Details)		12 Months Ended
	Apr. 13, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Apr. 13, 2022 USD ($)
BANK LOANS
Interest rate (as a percent)		8.90%	8.90%
Proceeds from debt		¥ 13,491,481	$ 1,860,560	¥ 10,000,000	¥ 16,020,000
Beijing Rural Commercial Bank
BANK LOANS
Interest rate (as a percent)	4.60%					4.60%
Carrying value of self-owned housing property pledged as collateral	¥ 17,600,000					$ 2,400,000
Beijing Rural Commercial Bank | Short term borrowings one
BANK LOANS
Face amount of debt	¥ 5,600,000
Term of debt	1 year
Beijing Rural Commercial Bank | Short term borrowings two
BANK LOANS
Term of debt	1 year
Proceeds from debt	¥ 4,400,000

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BANK LOANS - Long-term bank loan - Narrative (Details)			1 Months Ended		12 Months Ended
	Jun. 06, 2023 CNY (¥)	Jun. 06, 2023 USD ($)	Aug. 31, 2022 CNY (¥)	Aug. 31, 2022 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 06, 2023 USD ($)	Aug. 31, 2022 USD ($)	Apr. 13, 2022
BANK LOANS
Interest rate (as a percent)					8.90%	8.90%
Proceeds from debt					¥ 13,491,481	$ 1,860,560	¥ 10,000,000	¥ 16,020,000
Repayments of debt					11,040,000	1,522,486	15,000,000	10,540,000
Interest expense on bank loan					416,481	57,435	¥ 486,757	¥ 602,124
Bank of Kunlun
BANK LOANS
Face amount of debt			¥ 2,900,000							$ 399,928
Term of debt			18 months	18 months
Proceeds from debt			¥ 1,000,000	$ 137,906
Repayments of debt					¥ 50,000	$ 6,896
Collateral value of debt			¥ 6,500,000							$ 900,000
Industrial and Commercial Bank of China | Revolving loan facility
BANK LOANS
Term of debt	1 year	1 year
Interest rate (as a percent)	2.50%								2.50%
Proceeds from debt	¥ 5,000,000	$ 689,532
Repayments of debt	5,000,000	$ 689,532
Collateral value of debt | ¥	17,600,000
Maximum borrowing capacity	10,000,000								$ 1,379,063
China Construction Bank
BANK LOANS
Face amount of debt	¥ 1,500,000								$ 207,064
Interest rate (as a percent)	3.95%								3.95%
Beijing Rural Commercial Bank
BANK LOANS
Interest rate (as a percent)											4.60%
Beijing Rural Commercial Bank | Revolving loan facility
BANK LOANS
Collateral value of debt | $									$ 2,400,000
Bank of Nanjing
BANK LOANS
Interest rate (as a percent)			6.00%							6.00%

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES - Due to related party (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties	¥ 20,018,222	$ 2,760,639	¥ 9,009,156
Short term borrowings one
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			4,006,767
Debt Instrument, Maturity Date	Nov. 17, 2022
Debt Instrument, Interest Rate Percentage	4.35%
Short term borrowings two
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			¥ 5,002,389
Debt Instrument, Maturity Date	Dec. 26, 2022
Debt Instrument, Interest Rate Percentage	4.35%
Short Term Borrowings Three
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties	¥ 10,004,055	1,379,622
Debt Instrument, Maturity Date	Dec. 26, 2023
Debt Instrument, Interest Rate Percentage	3.65%
Short Term Borrowings Four
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties	¥ 4,993,950	688,697
Debt Instrument, Maturity Date	Jun. 04, 2024
Debt Instrument, Interest Rate Percentage	3.40%
Short term borrowings five.
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties	¥ 5,020,217	$ 692,320
Debt Instrument, Maturity Date	Jun. 16, 2024
Debt Instrument, Interest Rate Percentage	3.40%

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES - Additional Information (Details) - Short term borrowings	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Interest expense due to third party	¥ 326,893	$ 45,081	¥ 397,468	¥ 433,281
Guaranteed or collateralized	¥ 0		¥ 0

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LONG-TERM BORROWINGS DUE TO RELATED PARTY - Due to related party (Details) - Related party	Jun. 30, 2022 CNY (¥)
LONG-TERM BORROWINGS DUE TO RELATED PARTY
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.	¥ 6,510,606
Less: current portion	(999,530)
Total long-term borrowings due to related party	¥ 5,511,076

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LONG-TERM BORROWINGS DUE TO RELATED PARTY - (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)
LONG-TERM BORROWINGS DUE TO RELATED PARTY
Debt instrument, periodic payment	¥ 126,135
Debt instrument, interest rate, stated percentage	8.90%
Long-term borrowings | Related party
LONG-TERM BORROWINGS DUE TO RELATED PARTY
Debt instrument, term	10 years

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LONG-TERM BORROWINGS DUE TO RELATED PARTY - Additional Information (Details) - Long-term borrowings	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
LONG-TERM BORROWINGS DUE TO RELATED PARTY
Guaranteed or collateralized	¥ 0		¥ 0
Interest expense, long-term debt	¥ 472,593	$ 65,174	¥ 617,611	¥ 693,641

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CLASS A ORDINARY SHARES (Details)								12 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 USD ($) $ / shares shares	Mar. 15, 2023 USD ($) $ / shares shares	Jun. 14, 2021 USD ($) $ / shares shares	Apr. 05, 2021 Vote ¥ / shares	Dec. 26, 2019 shares	Dec. 10, 2019 $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2023 CNY (¥)	Mar. 28, 2024 USD ($) $ / shares shares	Jun. 30, 2023 CNY (¥) shares	Jun. 30, 2022 $ / shares	Jun. 30, 2022 CNY (¥) shares	Jun. 30, 2021 shares	Apr. 05, 2021 USD ($) $ / shares shares	Jun. 30, 2020 shares	May 21, 2020 shares	Dec. 10, 2019 ¥ / shares shares
CLASS A ORDINARY SHARES.
Reverse stock split ratio	0.056	0.056						0.2	0.2
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive		1
Ordinary shares, shares outstanding	7,927,132
Number of ordinary shares called for by warrants																1,680,000	911,112
Placement agent's fees and other estimated offering expenses								$ 4,700,000	¥ 30,408,264
Percentage transfer of profit to statutory reserves								10.00%	10.00%
Transfer of profit to statutory reserves up to certain percentage of registered capital								50.00%	50.00%
Appropriated retained earnings								$ 572,163			¥ 4,148,929		¥ 4,148,929
Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Number of ordinary shares called for by warrants																93,333	50,617
Class A ordinary shares
CLASS A ORDINARY SHARES.
Reverse stock split ratio	0.056	0.056					0.2
Ordinary shares, shares authorized		500,000,000						500,000,000		150,000,000	500,000,000		500,000,000		150,000,000
Par value (in dollars per share) | (per share)		$ 0.0001	$ 0.0925	$ 0.0925	¥ 0.62			$ 0.0001		$ 0.0925		$ 0.0001			$ 0.0925
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive						23,049,639
Ordinary shares, shares outstanding	141,703,218					4,611,720		2,306,295			2,306,295		1,704,766
Authorized share capital | $		$ 58,000								$ 15,725,000					$ 15,725,000
Number of votes | Vote					1
Stock issuance (in shares)			8,827,500	6,014,102
Number of ordinary shares called for by warrants			10,002,500					863,333			863,333		7,950,769	8,814,102
Class A ordinary shares | Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Ordinary shares, shares authorized															8,333,333
Par value (in dollars per share) | $ / shares			$ 1.67	$ 1.67											$ 1.67
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive						1,280,536
Ordinary shares, shares outstanding						256,207
Stock issuance (in shares)			490,417	334,117
Number of ordinary shares called for by warrants			555,694					47,963			47,963		441,710	489,673
Class A ordinary shares | Minimum
CLASS A ORDINARY SHARES.
Ordinary shares, shares authorized							20,000,000											20,000,000
Par value (in dollars per share) | $ / shares							$ 0.0185
Class A ordinary shares | Maximum
CLASS A ORDINARY SHARES.
Ordinary shares, shares authorized							100,000,000											100,000,000
Par value (in dollars per share) | (per share)							$ 0.0925											¥ 0.62
Class A ordinary shares | Maximum | Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Par value (in dollars per share) | $ / shares							$ 1.67
Class B ordinary shares
CLASS A ORDINARY SHARES.
Reverse stock split ratio								0.056	0.056
Ordinary shares, shares authorized		80,000,000						80,000,000		20,000,000	80,000,000		80,000,000		20,000,000
Par value (in dollars per share) | (per share)		$ 0.0001			¥ 0.62			$ 0.0001		$ 0.0925		$ 0.0001			$ 0.0925
Ordinary shares, shares outstanding								7,100,000			7,100,000		4,100,000
Authorized share capital | $															$ 1,850,000
Number of votes | Vote					15
Pre-funded warrants
CLASS A ORDINARY SHARES.
Stock issuance (in shares)			1,175,000	2,800,000
Number of ordinary shares called for by warrants			10,002,500	8,814,102
Gross proceeds | $			$ 8,000,000.0	$ 55,000,000.0
Pre-funded warrants | Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Stock issuance (in shares)			65,278	155,556
Number of ordinary shares called for by warrants			555,694	489,673

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CLASS A ORDINARY SHARES - Pre funded warrants (Details) - $ / shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
CLASS A ORDINARY SHARES
Weighted average remaining period, outstanding	5 years 6 months
Pre-funded warrants
CLASS A ORDINARY SHARES
Warrants Outstanding		81,667
Issued	65,278
Exercised		(81,667)
Warrants Outstanding	65,278		81,667
Weighted average exercise price outstanding per share		$ 0.18
Issued	$ 0.18
Exercised		$ 0.18
Weighted average exercise price outstanding per share	$ 0.18		$ 0.18
Weighted average remaining period, outstanding	5 years 2 months 19 days		5 years 5 months 15 days
Issued		5 years 6 months

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS (Details)			12 Months Ended
	Jun. 26, 2020 item $ / shares	May 21, 2020 USD ($) item $ / shares shares	Jun. 30, 2023 USD ($)	Jun. 30, 2023 CNY (¥) Y shares	Jun. 30, 2023 USD ($) Y $ / shares shares	Mar. 15, 2023 USD ($) Y shares	Jun. 30, 2022 CNY (¥) Y shares	Jun. 30, 2022 USD ($) Y $ / shares shares	Jun. 30, 2021 USD ($) Y shares	Jun. 30, 2020 USD ($) $ / shares shares
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of offerings | item	2	2
Number of warrants to purchase ordinary shares		911,112								1,680,000
Exercise price of warrants (in dollars per share) | $ / shares	$ 1.25	$ 2.25								$ 1.25
Fair value of warrants | $		$ 1,689,389			$ 560,000	$ 2,750,000		$ 27,030,000	$ 34,860,000	$ 1,639,333
Fair value of the warrant liability				¥ 31,615,668	4,360,000		¥ 16,677,328
Change fair value changes of warrants liability, Aggregate amount | $			$ 320,000
Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares		50,617								93,333
Exercise price of warrants (in dollars per share) | $ / shares	$ 22.50	$ 40.50								$ 22.50
Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Fair value of the warrant liability				13,995,009	1,930,000			$ 2,490,000
Number of warrants							489,673	489,673
Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Fair value of the warrant liability				¥ 17,620,659	$ 2,430,000
Number of warrants				555,694	555,694	555,694
Class A ordinary shares
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares				863,333	863,333	10,002,500	7,950,769	7,950,769	8,814,102
Exercise price of warrants (in dollars per share) | $ / shares					$ 6.24			$ 0.80
Class A ordinary shares | Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares				47,963	47,963	555,694	441,710	441,710	489,673
Exercise price of warrants (in dollars per share) | $ / shares					$ 112.32			$ 14.40
Risk free interest rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0.40								0.35
Risk free interest rate | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				0.0441	0.0441		0.0300	0.0300
Risk free interest rate | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				3.59	3.59	3.58
Measurement input, expected term
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants and rights outstanding, term		5 years 6 months								5 years 6 months
Measurement input, expected term | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y				3.47	3.47		3.47	3.47	4.46
Measurement input, expected term | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y				5.22	5.22	5.50
Measurement input, price volatility
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		99.50								104.26
Measurement input, price volatility | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				1.27	1.27		1.09	1.09
Measurement input, price volatility | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				110	110	110
Measurement input, expected dividend rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0								0

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Measurement inputs (Details)	Jun. 30, 2023 $ / shares ¥ / shares Y shares	Mar. 15, 2023 ¥ / shares Y shares	Jun. 30, 2022 Y $ / shares shares	Jun. 30, 2021 Y	Jun. 30, 2020	May 21, 2020
Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants | shares			489,673
Number of warrants, remaining | shares	47,963
Number of warrants, adjusted | shares	441,710
Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants | shares	555,694	555,694
Share price | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | $ / shares	0.34		0.66
Share price | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | ¥ / shares	0.34	0.37
Risk free interest rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input					0.35	0.40
Risk free interest rate | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input	0.0441		0.0300
Risk free interest rate | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input	3.59	3.58
volatility
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input					104.26	99.50
volatility | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input	1.27		1.09
volatility | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input	110	110
Exercise price | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | $ / shares			112.32
Warrants outstanding, measurement input, remaining | $ / shares	112.32
Warrants outstanding, measurement input, adjusted | $ / shares	14.40
Exercise price | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | ¥ / shares	14.40	14.40
Warrant life | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y	3.47		3.47	4.46
Warrant life | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y	5.22	5.50

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Liabilities (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Liabilities:
Warrant liability	$ 4,360,000	$ 2,490,000
Level 3
Liabilities:
Warrant liability	$ 4,360,000	$ 2,490,000

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Warrant activities (Details) - $ / shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Weighted average remaining period, outstanding	5 years 6 months
Warrant
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants Outstanding	489,673	489,673
Issued	555,694
Warrants Outstanding	1,045,367	489,673	489,673
Weighted average exercise price outstanding per share	$ 112.32	$ 112.32
Issued	14.40
Weighted average exercise price outstanding per share	$ 18.90	$ 112.32	$ 112.32
Weighted average remaining period, outstanding	4 years 4 months 24 days	4 years 5 months 15 days	5 years 5 months 15 days

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SHARE-BASED COMPENSATION (Details) - $ / shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
SHARE-BASED COMPENSATION.
Stock Options, Shares, Outstanding at Beginning	4,444	6,084
Stock Options, Shares, Granted	0	0
Forfeited	0	(1,640)
Stock Option, Shares, Exercised	0	0
Stock Option, Shares, Expired	0	0
Stock Options, Shares, Outstanding at Ending	4,444	4,444
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Beginning	$ 148.50	$ 180.36
Stock Options, Weighted Average Exercise Price Per share, Granted	0	0
Stock Options, Weighted Average Exercise Price Per share, Forfeited	0	266.40
Stock Options, Weighted Average Exercise Price Per share, Exercised	0	0
Stock Options, Weighted Average Exercise Price Per share, Expired	0	0
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Ending	$ 148.50	$ 148.50

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SHARE-BASED COMPENSATION - Option outstanding (Details)	12 Months Ended
	Jun. 30, 2023 $ / shares shares
SHARE-BASED COMPENSATION
Outstanding Options, Number (in shares)	4,444
Exercisable Options, Average Remaining Contractual life (years)	2 months 15 days
Stock option one [Member]
SHARE-BASED COMPENSATION
Outstanding Options, Average Exercise Price | $ / shares	$ 148.50
Outstanding Options, Number (in shares)	4,444
Outstanding Options, Average Remaining Contractual life (Years)	1 year 7 months 2 days
Exercisable Options, Average Exercise Price | $ / shares	$ 148.50
Exercisable Options, Number (in shares)	4,444
Exercisable Options, Average Remaining Contractual life (years)	1 year 7 months 2 days

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SHARE-BASED COMPENSATION - Restricted shares (Details) - shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
SHARE-BASED COMPENSATION
Granted - Shares	0	0
Restricted Stock [Member]
SHARE-BASED COMPENSATION
Non-vested, Beginning Balance - Shares	120,407	7,244
Granted - Shares	277,778	405,130
Vested - Shares	(226,247)	(291,967)
Non-vested, Ending Balance - Shares	171,938	120,407

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SHARE-BASED COMPENSATION - Status of restricted stock (Details) - Restricted shares	12 Months Ended
	Jun. 30, 2023 $ / shares shares
Outstanding Restricted Shares, Number	171,938
Fair Value per Share 1.04
Outstanding Restricted Shares, Number	60,827
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)	1 year 8 months 1 day
Outstanding Restricted Shares, Fair Value per Share | $ / shares	$ 18.72
Fair Value per Share 1.29
Outstanding Restricted Shares, Number	111,111
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)	2 months 15 days
Outstanding Restricted Shares, Fair Value per Share | $ / shares	$ 6.66

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SHARE-BASED COMPENSATION - Additional Information (Details)									1 Months Ended	12 Months Ended
	Mar. 15, 2023 USD ($) $ / shares shares	Mar. 09, 2023 USD ($) $ / shares shares	Feb. 28, 2022 USD ($) $ / shares shares	Jan. 05, 2022 USD ($) $ / shares shares	Dec. 10, 2021 $ / shares shares	Dec. 05, 2021 USD ($) $ / shares shares	Nov. 10, 2021 shares	Aug. 21, 2018 USD ($) $ / shares shares	Jan. 31, 2022 shares	Jun. 30, 2023 CNY (¥) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 CNY (¥) shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2021 CNY (¥) shares	Jun. 30, 2021 USD ($) shares	Jun. 30, 2020 USD ($)	Dec. 31, 2021 $ / shares
SHARE-BASED COMPENSATION
Exercisable Options, Average Remaining Contractual life (years)										2 months 15 days	2 months 15 days
Number of shares expected to be vested										4,444	4,444
Shares								487,057
Exercise price (per share) | $ / shares				$ 1.29
Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Shares								27,059
Exercise price (per share) | $ / shares				$ 23.22
Share-Based Payment Arrangement, Option
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense | ¥										¥ 0		¥ 0		¥ 0
Share-based compensation | $											$ 0
Restricted shares
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense										¥ 26,191,707	$ 3,612,002	¥ 39,263,485		¥ 6,140,037
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period, fair value | $			$ 1,708,024
Restricted stock closing price | $ / shares			$ 1.04		$ 1.60
Restricted shares issued (in shares)										547,444	547,444
Number of shares expected to be vested										1,094,887	1,094,887
Outstanding Restricted Shares, Number										171,938	171,938
Shares outstanding												4,100,000	4,100,000	0	0
Granted during the period			1,642,331
Restricted shares | Senior Manager
SHARE-BASED COMPENSATION
Share-based compensation | $											$ 1,100,000
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)										1 year 5 months 15 days	1 year 5 months 15 days
Restricted shares | Senior Manager | Class B ordinary shares
SHARE-BASED COMPENSATION
Shares outstanding										3,000,000	3,000,000
Restricted shares | Management
SHARE-BASED COMPENSATION
Share-based compensation | ¥										¥ 8,000,000.0
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period, fair value | $		$ 3,025,000	$ 1,694,000			$ 4,175,000
Restricted stock closing price | $ / shares		$ 1.01	$ 1.06			$ 1.67
Granted during the period		3,000,000	1,600,000			2,500,000
Restricted shares | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares			$ 18.72		$ 28.80
Restricted shares issued (in shares)										30,414	30,414
Number of shares expected to be vested										60,827	60,827
Granted during the period			91,241
Restricted shares | Post 2024 Reverse Stock Split | Senior Manager
SHARE-BASED COMPENSATION
Shares outstanding												7,148	7,148
Restricted shares | August 2018
SHARE-BASED COMPENSATION
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period, fair value | $								$ 2,523,240
Restricted stock closing price | $ / shares								$ 6.45
Granted during the period								391,200
Restricted shares | August 2018 | Independent Company
SHARE-BASED COMPENSATION
Number of shares issued				1,050,000
Stock issued value for services | $				$ 1,354,500
Restricted shares | August 2018 | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares								$ 116.10
Granted during the period								21,733
Restricted shares | August 2018 | Post 2024 Reverse Stock Split | Independent Company
SHARE-BASED COMPENSATION
Number of shares issued				58,333
Restricted class A ordinary shares
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense | ¥										¥ 5,805,840		¥ 8,935,920		¥ 0
Share-based compensation										¥ 1,124,546	$ 155,082		$ 800,662		$ 800,662	$ 800,662
Restricted shares issued for services (in shares)					250,000		500,000		250,000
Shares outstanding										1,000,000	1,000,000	1,550,000	1,550,000	0	0
Restricted class A ordinary shares | Independent Company
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares																	$ 1.31
Restricted class A ordinary shares | Senior Manager
SHARE-BASED COMPENSATION
Shares outstanding										1,000,000	1,000,000	128,672	128,672	188,662	188,662
Shares										1,000,000	1,000,000	128,672	128,672	188,662	188,662
Restricted class A ordinary shares | Employee and business consultants
SHARE-BASED COMPENSATION
Exercise price (per share) | $ / shares	$ 0.3726
Number of shares issued	1,000,000
Stock issued value for services | $	$ 372,600
Restricted class A ordinary shares | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Restricted shares issued for services (in shares)					13,889		27,778		13,889
Shares outstanding										55,556	55,556	86,111	86,111
Restricted class A ordinary shares | Post 2024 Reverse Stock Split | Independent Company
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares																	$ 23.58
Restricted class A ordinary shares | Post 2024 Reverse Stock Split | Senior Manager
SHARE-BASED COMPENSATION
Shares outstanding										55,556	55,556			10,481	10,481
Shares										55,556	55,556	7,148	7,148	10,481	10,481
Restricted class A ordinary shares | Post 2024 Reverse Stock Split | Employee and business consultants
SHARE-BASED COMPENSATION
Exercise price (per share) | $ / shares	$ 6.71
Number of shares issued	55,556

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INCOME TAX - Income (loss) before provision for income taxes (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
INCOME TAX
Outside China areas	¥ (34,038,460)	$ (4,694,118)	¥ 113,741,972	¥ 4,011,449
China	(27,419,593)	(3,781,335)	(20,066,451)	(30,402,528)
Total	¥ (61,458,053)	$ (8,475,453)	¥ 93,675,521	¥ (26,391,079)

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INCOME TAX - Deferred tax assets and liabilities, net (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Deferred tax assets:
Allowance for credit losses	¥ 1,019,592	$ 140,608	¥ 1,781,573
Impairment for inventory	90,322	12,456	59,913
Net operating loss carryforwards	23,290,731	3,211,938	16,511,047
Subtotal	24,400,645	3,365,002	18,352,533
Less: Valuation allowance	(24,107,246)	(3,324,540)	(17,193,874)
Total deferred tax assets, net	293,399	40,462	1,158,659
Deferred tax liabilities:
Accelerated amortization of intangible assets	(146,511)	(20,205)	(119,271)
Gain on the previously held equity method investment	(146,888)	(20,257)	(146,888)
Recognition of customer relationship arising from business combinations	0	0	(892,500)
Total deferred tax liabilities	(293,399)	(40,462)	(1,158,659)
Deferred tax liabilities, net	¥ 0	$ 0	¥ 0

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INCOME TAX - NOL expiration (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
INCOME TAX
2024	¥ 13,146,922	$ 1,813,043
2025	10,484,902	1,445,934
2026	19,617,124	2,705,325
2027	32,533,742	4,486,608
2028	57,811,664	7,972,593
Total	¥ 133,594,354	$ 18,423,503	¥ 94,600,000

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INCOME TAX - Reconciliation of income tax expense (benefit) (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
INCOME TAX
Income tax (benefits) expenses calculated at PRC statutory rates	¥ (15,364,513)	$ (2,118,863)	¥ 23,418,880	¥ (6,597,770)
Nondeductible expenses and others	539,247	74,366	263,655	338,058
Effect of tax rate differential	7,949,048	1,096,224	(24,061,020)	626,245
Benefit of revenue exempted from enterprise income tax	(18,814)	(2,595)	(1,799)	(57,250)
Change in valuation allowances	6,913,371	953,397	(233,590)	5,264,804
Tax refund	0	0		(98,338)
Expense (benefit) for income tax	¥ 18,339	$ 2,529	¥ (613,874)	¥ (524,251)

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INCOME TAX - Income tax expense (benefit) (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
INCOME TAX
Current income tax provision (benefit)	¥ 18,339	$ 2,529	¥ 10,214	¥ (98,338)
Deferred income tax benefit	0	0	(624,088)	(425,913)
Expense (benefit) for income tax	¥ 18,339	$ 2,529	¥ (613,874)	¥ (524,251)

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INCOME TAX - Additional Information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
INCOME TAX
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	25.00%	25.00%
Cumulative net operating loss	¥ 133,594,354		$ 18,423,503	¥ 94,600,000
Additional NOL incurred by VIEs and VIEs' subsidiaries	¥ 39,000,000.0	$ 5,400,000
Nanjing Recon
INCOME TAX
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	15.00%	15.00%
Beijing Bhd Petroleum Technology Co Ltd
INCOME TAX
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	15.00%	15.00%

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NON-CONTROLLING INTEREST (Details)		12 Months Ended
		Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
NON-CONTROLLING INTEREST
Paid-in capital	[1]	¥ 580,340,061		¥ 516,426,799		$ 80,032,554
Accumulated other comprehensive loss		35,127,173		11,307,461		4,844,259
Total non-controlling interests		(10,056,059)		(7,746,968)		(1,386,793)
Capital contribution received		0	$ 0	0	¥ 50,000
Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		6,656,000		6,656,000		917,904	$ 993,771
Unappropriated retained earnings (deficit)		(2,601,356)		(292,265)		(358,742)	(43,635)
Accumulated other comprehensive loss		(30,703)		(30,703)		(4,234)	(4,584)
Total non-controlling interests		(10,056,059)		(7,746,968)		(1,386,793)	(1,156,656)
Valuation increase shared by minority shareholders		34,790,000		34,790,000		4,797,760	5,194,303
Capital contribution receivable due from non-controlling Interest		(48,870,000)		(48,870,000)		$ (6,739,481)	$ (7,296,511)
BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		1,651,000		1,651,000
Unappropriated retained earnings (deficit)		3,477,494		3,477,493
Accumulated other comprehensive loss		(18,850)		(18,850)
Total non-controlling interests		5,109,644		5,109,643
Nanjing Recon | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		200,000		200,000
Unappropriated retained earnings (deficit)		3,616,001		3,616,001
Accumulated other comprehensive loss		(11,853)		(11,853)
Total non-controlling interests		3,804,148		3,804,148
Gan Su BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		4,805,000		4,805,000
Unappropriated retained earnings (deficit)		(6,336,893)		(4,972,129)
Total non-controlling interests		(1,531,893)		(167,129)
Qinghai BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Unappropriated retained earnings (deficit)		(1,561,196)		(1,520,225)
Total non-controlling interests		(1,561,196)		(1,520,225)
FGS | Non-controlling Interest
NON-CONTROLLING INTEREST
Unappropriated retained earnings (deficit)		(1,796,762)		(893,405)
Total non-controlling interests		(15,876,762)		(14,973,405)
Valuation increase shared by minority shareholders		34,790,000		34,790,000
Capital contribution receivable due from non-controlling Interest		¥ (48,870,000)		¥ (48,870,000)

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

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CONCENTRATIONS (Details) $ in Millions	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021	Jun. 30, 2023 USD ($)	Jun. 30, 2023 HKD ($)
China
CONCENTRATIONS
Cash was on deposit at financial institutions	¥ 45,500,000	¥ 20,300,000		$ 6.3
Maximum insured bank deposit | ¥	500,000
Unprotected cash held in banks	40,000,000.0	17,800,000		5.5
Hong Kong
CONCENTRATIONS
Cash was on deposit at financial institutions	240,300,000	297,200,000		33.1
Maximum insured bank deposit | $					$ 500,000
Unprotected cash held in banks	¥ 238,800,000	¥ 296,800,000		$ 32.9
China National Petroleum Corporation | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	50.00%	39.00%	43.00%
China National Petroleum Corporation | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	49.00%	29.00%	27.00%
SINOPEC | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	28.00%	22.00%
SINOPEC | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	22.00%	13.00%
Another Customer | Customer One | Sales revenue
CONCENTRATIONS
Concentration risk, percentage			32.00%
Another Customer | Customer One | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage		19.00%	11.00%
Another Customer | Customer Two | Sales revenue
CONCENTRATIONS
Concentration risk, percentage			31.00%
Another Customer | Customer Two | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage		14.00%	10.00%
Another Customer | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	10.00%
Another Customer | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	14.00%

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COMMITMENTS AND CONTINGENCY - Purchase commitment (Details) - Jun. 30, 2023 - Purchase Commitment	CNY (¥)	USD ($)
Purchase commitment
2024	¥ 22,395,958	$ 3,088,544
2025	300,000	41,372
2026	150,000	20,686
Total minimum payments required	¥ 22,845,958	$ 3,150,602

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COMMITMENTS AND CONTINGENCY - Office Leases Commitment - short term (Details) - Jun. 30, 2023	CNY (¥)	USD ($)
Office Leases Commitment - short term
Total lease payments	¥ 3,137,262	$ 432,649
Office Leases Commitment
Office Leases Commitment - short term
2024	336,527	46,409
Total lease payments	¥ 336,527	$ 46,409

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COMMITMENTS AND CONTINGENCY - Additional Information (Details)									12 Months Ended
	Oct. 25, 2023 CNY (¥)	Oct. 25, 2023 USD ($)	Sep. 25, 2023 CNY (¥)	Sep. 25, 2023 USD ($)	Aug. 25, 2023 CNY (¥)	Aug. 25, 2023 USD ($)	Jan. 09, 2023 CNY (¥)	Jan. 09, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Dec. 01, 2021 CNY (¥)	Dec. 01, 2021 USD ($)
COMMITMENTS AND CONTINGENCY
Severance Payments									¥ 7,000,000.0	$ 1,000,000.0
Legal contingencies | Henan Puxinfangfu Construction Engineering Co., Ltd.
COMMITMENTS AND CONTINGENCY
Restricted cash balance														¥ 700,000	$ 100,000
Trade accounts payable due									1,820,000				$ 300,000
Amount paid to the Plaintiff											¥ 855,197	$ 117,937
Amount of damages claimed							¥ 1,800,000	$ 300,000	2,000,000.0	300,000
Legal contingencies | Jiuquan Third Construction and Installation Engineering Company
COMMITMENTS AND CONTINGENCY
Amount paid to the Plaintiff					¥ 2,800,000	$ 380,000			¥ 1,000,000.0	$ 140,000
Amount of damages claimed	¥ 1,000,000.0	$ 140,000	¥ 1,000,000.0	$ 140,000

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RELATED PARTY TRANSACTIONS AND BALANCES - Sales to a related party (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
RELATED PARTY TRANSACTIONS AND BALANCES
Total revenues from related party	¥ 67,114,378	$ 9,255,496	¥ 83,777,571	¥ 47,938,575
Gan Su BHD | Urumqi Yikeli Automatic Control Equipment Co., Ltd
RELATED PARTY TRANSACTIONS AND BALANCES
Non controlling ownership interest (as a percent)	10.00%	10.00%
Related party
RELATED PARTY TRANSACTIONS AND BALANCES
Total revenues from related party	¥ 0	$ 0	0	85,657
Related party | Urumqi Yikeli Automatic Control Equipment Co., Ltd
RELATED PARTY TRANSACTIONS AND BALANCES
Total revenues from related party	¥ 0	$ 0	¥ 0	¥ 85,657

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RELATED PARTY TRANSACTIONS AND BALANCES - Prepaid expense (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
RELATED PARTY TRANSACTIONS AND BALANCES
Prepaid expenses	¥ 350,119	$ 48,284	¥ 420,284
Related party
RELATED PARTY TRANSACTIONS AND BALANCES
Prepaid expenses	0	0	275,000
Founders
RELATED PARTY TRANSACTIONS AND BALANCES
Prepaid expenses	¥ 0	$ 0	¥ 275,000

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RELATED PARTY TRANSACTIONS AND BALANCES - Leases from related parties (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
RELATED PARTY TRANSACTIONS AND BALANCES
Rights of use lease assets, net	¥ 2,654,900		$ 366,127	¥ 6,666,759
Operating lease liabilities	3,091,290		426,309	6,077,409
Related party
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	94,167	$ 12,986
Annual rental expense	1,100,000	160,000
Rights of use lease assets, net	335,976		46,333	765,241
Operating lease liabilities	335,976		$ 46,333	¥ 765,241
Founder one
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 40,000	$ 5,516
Lessee, Operating Lease, Period of Contract	April 1, 2022 - March 31, 2024	April 1, 2022 - March 31, 2024
Founder two
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 31,667	$ 4,367
Lessee, Operating Lease, Period of Contract	January 1, 2023- Dec 31, 2023	January 1, 2023- Dec 31, 2023
Founder three
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 22,500	$ 3,103
Lessee, Operating Lease, Period of Contract	January 1, 2023 - Dec 31, 2023	January 1, 2023 - Dec 31, 2023

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VARIABLE INTEREST ENTITIES (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2020 CNY (¥)
Current assets
Cash	¥ 104,125,800	$ 14,359,604	¥ 316,974,857
Notes receivable	3,742,390	516,099	10,828,308
Accounts receivable, net	27,453,415	3,785,999	22,577,980
Inventories, net	6,330,701	873,044	3,894,369
Other receivables, net	2,185,733	301,427	5,501,833
Loans to third parties	123,055,874	16,970,181	50,383,822
Purchase advances, net	2,680,456	369,652	178,208
Contract costs, net	49,572,685	6,836,386	33,858,820
Prepaid expenses	350,119	48,284	420,284
Prepaid expenses - related parties			275,000
Total current assets	504,413,173	69,561,759	445,617,041
Property and equipment, net	24,752,864	3,413,576	25,474,162
Construction in progress			239,739
Intangible assets, net			5,950,000
Long-term other receivables, net	3,640	502	1,564,381
Goodwill			4,730,002
Operating lease right-of-use assets	2,654,900	366,127	6,666,759
Total Assets	531,824,577	73,341,964	490,242,084
LIABILITIES
Short-term bank loans	12,451,481	1,717,138	10,000,000
Business advances to officers and staffs	10,791,721	1,488,246	16,739,989
Other payables	5,819,010	802,478	3,533,918
Other payable- related parties	2,592,395	357,508	2,240,135
Contract liabilities	2,748,365	379,017	2,001,277
Accrued payroll and employees' welfare	2,382,516	328,564	2,250,547
Taxes payable	1,163,006	160,386	2,210,958
Short-term borrowings - related parties	20,018,222	2,760,639	9,009,156
Operating lease liabilities - current	3,066,146	422,841	3,892,774
Total Current Liabilities	61,032,862	8,416,817	52,878,284
Operating lease liabilities - non-current	25,144	3,468	2,184,635
Contract liabilities - non-current			106,000
Total Liabilities	92,673,674	12,780,285	77,357,323
VIE
Current assets
Cash	37,661,118	5,092,821	18,033,666
Restricted cash	731,545	100,885	723,560
Notes receivable	3,742,390	516,099	10,828,308
Accounts receivable, net	27,453,415	3,785,999	22,577,980
Inventories, net	6,330,701	873,044	3,894,369
Other receivables, net	11,618,275	1,602,233	5,500,981
Loans to third parties	37,770,188	5,208,747	30,270,563
Purchase advances, net	1,592,761	219,652	178,208
Contract costs, net	49,572,685	6,836,386	33,858,820
Prepaid expenses	121,329	16,732	165,120
Prepaid expenses - related parties	0	0	275,000
Total current assets	176,594,407	24,252,598	126,306,575
Property and equipment, net	24,752,864	3,413,576	25,474,162
Construction in progress	0	0	239,739
Intangible assets, net	0	0	5,950,000
Long-term other receivables, net	3,640	502	1,564,381
Goodwill	0	0	4,730,002
Operating lease right-of-use assets	2,654,900	366,127	6,666,759
Total Assets	204,005,811	28,032,803	170,931,618
LIABILITIES
Short-term bank loans	12,451,481	1,717,138	10,000,000
Business advances to officers and staffs	10,791,721	1,488,246	12,826,108
Other payables	3,904,135	538,405	1,469,761
Other payable- related parties	1,356,915	187,127	1,061,081
Contract liabilities	2,748,361	379,017	2,001,277
Accrued payroll and employees' welfare	1,048,061	144,534	1,213,040
Intercompany payables	263,935,922	36,398,428	194,373,010
Taxes payable	1,163,237	160,418	2,211,190
Short-term borrowings - related parties	20,018,222	2,760,639	9,009,156
Long-term borrowings - related party - current portion	0	0	999,530
Operating lease liabilities - current	3,066,146	422,841	3,892,774
Total Current Liabilities	320,484,201	44,196,793	239,056,927
Operating lease liabilities - non-current	25,144	3,468	2,184,635
Contract liabilities - non-current	0	0	106,000
Long-term borrowings - related party	0	0	5,511,076
Deferred tax liability	0	0	187,972
Total Liabilities	320,509,345	44,200,261	247,046,610
RECON TECHNOLOGY LTD
Current assets
Cash	236,146,589	32,566,104	296,838,959	$ 40,935,964	¥ 325,116,815	¥ 22,238,980
Other receivables, net	291,525,426	40,203,195	205,224,961
Total current assets	607,708,032	83,806,770	522,428,344
Total Assets	484,787,542	66,855,259	444,861,509
LIABILITIES
Other payables	3,964,912	546,786	7,552,452
Total Current Liabilities	3,964,912	546,786	7,552,452
Total Liabilities	35,580,580	4,906,786	24,229,780
Related party
Current assets
Prepaid expenses	0	0	275,000
Operating lease right-of-use assets	335,976	46,333	765,241
LIABILITIES
Other payables	2,592,395	357,508	2,240,135
Long-term borrowings - related party - current portion			999,530
Operating lease liabilities - current	335,976	46,333	429,265
Operating lease liabilities - non-current	¥ 0	$ 0	335,976
Long-term borrowings - related party			¥ 5,511,076

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VARIABLE INTEREST ENTITIES - Additional Information (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 CNY (¥)
Variable Interest Entity [Line Items]
Revenue	¥ 67,114,378	$ 9,255,496	¥ 83,777,571		¥ 47,938,575
Operating expenses	88,199,718	12,163,297	101,738,154		68,793,976
Net loss	59,167,301	8,159,544	(95,586,795)		22,832,734
VIE
Variable Interest Entity [Line Items]
Revenue	67,114,378	9,255,496	83,777,571	$ 12,508,368	47,817,378
Operating expenses	35,547,439	4,902,216	35,725,237	5,333,938	36,704,840
Net loss	¥ 26,349,629	$ 3,633,780	¥ 18,180,305	$ 2,714,401	¥ 29,407,210

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SEGMENT REPORTING (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥) segment	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
Number of operating segments	4	4
Total revenue	¥ 67,114,378	$ 9,255,496	¥ 83,777,571	¥ 47,938,575
Automation product and software
Total revenue	26,628,216	3,672,199	31,944,055	18,535,166
Equipment, accessories and others
Total revenue	16,248,197	2,240,729	17,159,381	15,791,623
Oilfield environmental protection
Total revenue	19,116,560	2,636,294	25,335,363	11,043,979
Platform Outsourcing Services
Total revenue	¥ 5,121,405	$ 706,274	¥ 9,338,772	¥ 2,567,807

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SEGMENT REPORTING - Company's revenue (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
Revenue	¥ 67,114,378	$ 9,255,496	¥ 83,777,571	¥ 47,938,575
Cost of revenue and related tax	48,247,395	6,653,620	64,352,834	40,723,547
Gross profit	18,866,983	2,601,876	19,424,737	7,215,028
Depreciation and amortization	3,683,586	507,990	3,339,868	3,150,789
Total capital expenditures	940,673		999,652	522,416
Goods transferred at a point in time
Revenue	58,475,918		74,222,033	46,549,014
Services rendered over time
Revenue	8,638,460		9,555,538	1,389,561
Automation product and software
Revenue	26,628,216	3,672,199	31,944,055	18,535,166
Cost of revenue and related tax	23,610,281		29,824,014	19,942,541
Gross profit	3,017,935		2,120,041	(1,407,375)
Depreciation and amortization	857,332		421,619	277,496
Total capital expenditures	803,311		14,823	26,761
Automation product and software | Goods transferred at a point in time
Revenue	18,640,699		31,944,055	18,535,166
Automation product and software | Services rendered over time
Revenue	7,987,517		0	0
Equipment, accessories and others
Revenue	16,248,197	2,240,729	17,159,381	15,791,623
Cost of revenue and related tax	8,945,796		10,479,615	11,264,971
Gross profit	7,302,401		6,679,766	4,526,652
Depreciation and amortization	689,552		814,960	851,612
Total capital expenditures	46,681		21,456	136,224
Equipment, accessories and others | Goods transferred at a point in time
Revenue	16,248,197		17,159,381	15,791,623
Equipment, accessories and others | Services rendered over time
Revenue	0		0	0
Oilfield environmental protection
Revenue	19,116,560	2,636,294	25,335,363	11,043,979
Cost of revenue and related tax	13,955,673		20,222,446	8,045,567
Gross profit	5,160,887		5,112,917	2,998,412
Depreciation and amortization	2,077,165		2,045,601	2,000,952
Total capital expenditures	75,728		768,795	315,944
Oilfield environmental protection | Goods transferred at a point in time
Revenue	19,116,560		15,779,825	9,654,418
Oilfield environmental protection | Services rendered over time
Revenue	0		9,555,538	1,389,561
Platform Outsourcing Services
Revenue	5,121,405	$ 706,274	9,338,772	2,567,807
Cost of revenue and related tax	1,735,645		3,826,759	1,470,468
Gross profit	3,385,760		5,512,013	1,097,339
Depreciation and amortization	59,537		57,688	20,729
Total capital expenditures	14,953		194,578	43,487
Platform Outsourcing Services | Goods transferred at a point in time
Revenue	4,470,462		9,338,772	2,567,807
Platform Outsourcing Services | Services rendered over time
Revenue	¥ 650,943		¥ 0	¥ 0

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SEGMENT REPORTING - Total assets (Details)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Total assets:
Total Assets	¥ 531,824,577	$ 73,341,964	¥ 490,242,084
Automation product and software
Total assets:
Total Assets	167,009,315	23,031,642	147,377,607
Equipment, accessories and others
Total assets:
Total Assets	170,809,759	23,555,743	149,876,933
Oilfield environmental protection
Total assets:
Total Assets	107,393,609	14,810,256	107,755,500
Platform Outsourcing Services
Total assets:
Total Assets	¥ 86,611,894	$ 11,944,323	¥ 85,232,044

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SUBSEQUENT EVENTS (Details) - shares	Oct. 16, 2023	Mar. 15, 2023	Jun. 14, 2021	May 01, 2024	Jun. 30, 2023	Jun. 30, 2022	Dec. 26, 2019
SUBSEQUENT EVENTS
Ordinary shares, shares outstanding				7,927,132
Pre-funded warrants
SUBSEQUENT EVENTS
Stock issuance (in shares)		1,175,000	2,800,000
Class A ordinary shares
SUBSEQUENT EVENTS
Stock issuance (in shares)		8,827,500	6,014,102
Ordinary shares, shares issued					2,306,295	1,704,766
Ordinary shares, shares outstanding				141,703,218	2,306,295	1,704,766	4,611,720
SUBSEQUENT EVENTS | Pre-funded warrants
SUBSEQUENT EVENTS
Stock issuance (in shares)	1,175,000
SUBSEQUENT EVENTS | Class A ordinary shares
SUBSEQUENT EVENTS
Ordinary shares, shares issued	1,175,000
Ordinary shares, shares outstanding	1,175,000

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Additional Information (Details)	Jun. 30, 2023
VIE | Maximum
Condensed financial information of the parent company
Percent of consolidated net assets	25.00%

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company balance sheets (Details)		Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 CNY (¥)	Jun. 30, 2020 CNY (¥)
Total assets:
Cash		¥ 104,125,800	$ 14,359,604	¥ 316,974,857
Due from intercompany		2,185,733	301,427	5,501,833
Total current assets		504,413,173	69,561,759	445,617,041
Non-current assets
Total Assets		531,824,577	73,341,964	490,242,084
LIABILITIES AND SHAREHOLDERS' EQUITY
Other current liabilities		5,819,010	802,478	3,533,918
Total Current Liabilities		61,032,862	8,416,817	52,878,284
Total Liabilities		92,673,674	12,780,285	77,357,323
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Additional paid-in capital	[1]	580,340,061	80,032,554	516,426,799
Accumulated deficit		(170,440,826)	(23,504,865)	(111,273,525)
Accumulated other comprehensive loss		35,127,173	4,844,259	11,307,461
Total shareholders' equity		449,206,962	61,948,472	420,631,729
Total Liabilities and Equity		531,824,577	73,341,964	490,242,084
Class A ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value	[1]	26,932	3,714	19,461
Class B ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value	[1]	4,693	647	2,604
RECON TECHNOLOGY LTD
Total assets:
Cash		236,146,589	32,566,104	296,838,959	$ 40,935,964	¥ 325,116,815	¥ 22,238,980
Due from intercompany		291,525,426	40,203,195	205,224,961
Other current assets		80,036,017	11,037,471	20,364,424
Total current assets		607,708,032	83,806,770	522,428,344
Non-current assets
Investment in subsidiaries and VIEs		(122,920,490)	(16,951,511)	(77,566,835)
Total Assets		484,787,542	66,855,259	444,861,509
LIABILITIES AND SHAREHOLDERS' EQUITY
Other current liabilities		3,964,912	546,786	7,552,452
Total Current Liabilities		3,964,912	546,786	7,552,452
Warrant liability		31,615,668	4,360,000	16,677,328
Total Liabilities		35,580,580	4,906,786	24,229,780
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Additional paid-in capital		580,340,061	80,032,554	516,426,799
Accumulated deficit		(166,291,897)	(22,932,701)	(107,124,596)
Accumulated other comprehensive loss		35,127,173	4,844,259	11,307,461
Total shareholders' equity		449,206,962	61,948,473	420,631,729
Total Liabilities and Equity		484,787,542	66,855,259	444,861,509
RECON TECHNOLOGY LTD | Class A ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		26,932	3,714	19,461
RECON TECHNOLOGY LTD | Class B ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		¥ 4,693	$ 647	¥ 2,604

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

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company balance sheets - Additional information (Details)				12 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 $ / shares shares	Dec. 10, 2019	Jun. 30, 2023 $ / shares shares	Mar. 28, 2024 $ / shares shares	Mar. 15, 2023 $ / shares	Jun. 30, 2022 $ / shares shares	Jun. 14, 2021 $ / shares	Apr. 05, 2021 $ / shares shares	Apr. 05, 2021 ¥ / shares shares	Dec. 26, 2019 shares
Parent company balance sheets
Ordinary shares, shares outstanding	7,927,132
Reverse stock split	0.056	0.056		0.2
Class A ordinary shares [Member]
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001		$ 0.0001	$ 0.0925	$ 0.0925	$ 0.0001	$ 0.0925	$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		500,000,000		500,000,000	150,000,000		500,000,000		150,000,000	150,000,000
Ordinary shares, shares issued				2,306,295			1,704,766
Ordinary shares, shares outstanding	141,703,218			2,306,295			1,704,766				4,611,720
Reverse stock split	0.056	0.056	0.2
Class A ordinary shares [Member] | RECON TECHNOLOGY LTD
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | $ / shares				$ 0.0001			$ 0.0001
Ordinary shares, shares authorized				500,000,000			500,000,000
Ordinary shares, shares issued				2,306,295			1,704,766
Ordinary shares, shares outstanding				2,306,295			1,704,766
Class B ordinary shares [Member]
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001		$ 0.0001	$ 0.0925		$ 0.0001		$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		80,000,000		80,000,000	20,000,000		80,000,000		20,000,000	20,000,000
Ordinary shares, shares issued				7,100,000			4,100,000
Ordinary shares, shares outstanding				7,100,000			4,100,000
Reverse stock split				0.056
Class B ordinary shares [Member] | RECON TECHNOLOGY LTD
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | $ / shares				$ 0.0001			$ 0.0001
Ordinary shares, shares authorized				80,000,000			80,000,000
Ordinary shares, shares issued				7,100,000			4,100,000
Ordinary shares, shares outstanding				7,100,000			4,100,000

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company statements of operations and comprehensive income loss (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)
Parent Company Statements Of Operations And Comprehensive Loss
Revenue	¥ 67,114,378	$ 9,255,496	¥ 83,777,571	¥ 47,938,575
Cost of revenue	48,247,395	6,653,620	64,352,834	40,723,547
Gross profit	18,866,983	2,601,876	19,424,737	7,215,028
General and administrative expenses	76,784,396	10,589,052	83,281,958	45,949,157
Allowance for (net recovery of) credit losses	(9,038,985)	(1,246,533)	(658,823)	8,191,247
Loss from operations	69,332,735	9,561,421	82,313,417	61,578,948
Fair value changes of warrants liability	6,116,000	843,435	174,485,575	35,365,792
Other income (loss)	82,970	11,442	15,855	192,137
Net income (loss)	(61,476,392)	(8,477,982)	94,289,395	(25,866,828)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Foreign currency translation adjustment	23,819,712	3,284,889	9,332,625	(850,895)
Comprehensive income (loss) attributable to Recon Technology, Ltd	(35,347,589)	(4,874,655)	104,919,420	(23,683,629)
RECON TECHNOLOGY LTD
Parent Company Statements Of Operations And Comprehensive Loss
Revenue				121,197
Cost of revenue				97,024
Gross profit				24,173
General and administrative expenses	54,494,219	7,515,097	62,918,622	29,502,464
Allowance for (net recovery of) credit losses	(4,141,588)	(571,151)	1,923,382	1,933,986
Loss from operations	(50,352,631)	(6,943,946)	(64,842,004)	(31,412,277)
Fair value changes of warrants liability	6,116,000	843,435	174,485,575	35,365,792
Other income (loss)	10,108,783	1,394,065	4,105,116	320,235
Equity in loss of subsidiaries, VIEs and VIEs' subsidiaries	(25,039,453)	(3,453,098)	(18,161,892)	(27,106,484)
Net income (loss)	(59,167,301)	(8,159,544)	95,586,795	(22,832,734)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Foreign currency translation adjustment	23,819,712	3,284,889	9,332,625	(850,895)
Comprehensive income (loss) attributable to Recon Technology, Ltd	¥ (35,347,589)	$ (4,874,655)	¥ 104,919,420	¥ (23,683,629)

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company statements of cash flows (Details)	12 Months Ended
	Jun. 30, 2023 CNY (¥) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 CNY (¥)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 CNY (¥) shares
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥ (61,476,392)	$ (8,477,982)	¥ 94,289,395		¥ (25,866,828)
Adjustments to reconcile net cash flows from operating activities:
Gain in fair value changes of warrants liability	(6,116,000)	(843,435)	(174,485,575)		(35,365,792)
Amortization of offering cost of warrants	1,483,306	204,557	0		12,584,024
Provision for doubtful accounts	(9,038,985)	(1,246,533)	(658,823)		8,191,247
Restricted shares issued for management and employees	26,191,707	3,612,002	39,263,485		6,140,037
Income (loss) from investment in unconsolidated entity	0	0	(15,411)		266,707
Restricted shares issued for services	5,805,840	800,662	8,935,919		0
Interest expenses related to convertible notes			0		42,014,616
Net cash used in operating activities	(51,688,331)	(7,128,147)	(26,247,237)		(34,050,468)
Cash flows from investing activities:
Repayments from loans to third parties	40,113,311	5,531,879	171,435,032		5,150,377
Payments made for loans to third parties	(103,146,761)	(14,224,589)	(171,071,510)		(51,638,458)
Net cash used in investing activities	(245,224,673)	(33,818,029)	(328,684)		(46,538,654)
Cash flows from financing activities:
Proceeds from warrants issued with common stock	17,493,069	2,412,405	0		212,051,414
Proceeds from sale of ordinary shares, net of issuance costs	28,174,993	3,885,509	0		81,091,141
Proceeds from sale of prefunded warrants, net of issuance costs	3,750,282	517,188	93,321		30,276,569
Proceeds from share issuance for warrants exercised			0		21,130,035
Proceeds from issuance of convertible notes			0		42,014,616
Net cash provided by (used in) financing activities	56,383,273	7,775,609	(9,999,380)		394,026,823
Effect of exchange rate fluctuation on cash	27,688,659	3,818,441	10,275,148		224,365
Net increase (decrease) in cash	(212,841,072)	(29,352,126)	(26,300,153)		313,662,066
Cash at beginning of period	316,974,857
Cash at end of period	¥ 104,125,800	$ 14,359,604	316,974,857
Non-cash investing and financing activities
Issuance of common stock in exchange of shares of Starry, net of issuance costs			0		27,675,450
Conversion of convertible notes to 9,225,338 shares of ordinary shares			0		42,435,669
Stock issuance for convertible notes redemption (in shares) | shares	9,225,338	9,225,338
RECON TECHNOLOGY LTD
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥ (59,167,301)	$ (8,159,544)	95,586,795		(22,832,734)
Adjustments to reconcile net cash flows from operating activities:
Gain in fair value changes of warrants liability	(6,116,000)	(843,435)	(174,485,575)		(35,365,792)
Amortization of offering cost of warrants	1,483,306	204,557			12,584,024
Provision for doubtful accounts	(4,141,588)	(571,151)	1,923,382		1,933,986
Restricted shares issued for management and employees	26,191,707	3,612,002	39,263,485		6,140,037
Restricted shares issued for services	5,805,840		8,935,919	$ 800,662
Income from investment in unconsolidated entity			(15,411)		15,411
Interest expenses related to convertible notes					42,014,616
Equity in earnings of subsidiaries and VIEs	25,039,453	3,453,098	18,161,892		27,106,484
Other current assets	(8,396,555)	(1,157,938)	(111,521)		(474,891)
Other current liabilities	(3,587,540)	(494,744)	(5,090,698)		4,776,846
Net cash used in operating activities	(22,888,678)	(3,156,493)	(15,831,732)		(6,116,629)
Cash flows from investing activities:
Repayments from loans to third parties	32,413,311	4,470,000	166,405,032		1,950,000
Payments made for loans to third parties	(79,546,761)	(10,970,000)	(137,391,510)		(50,288,458)
Due from intercompany, VIEs and VIEs' subsidiaries	(86,300,464)	(11,901,378)	(55,569,342)		(29,505,002)
Net cash used in investing activities	(133,433,914)	(18,401,378)	(26,555,820)		(77,843,460)
Cash flows from financing activities:
Proceeds from warrants issued with common stock	17,493,069	2,412,405			212,051,414
Proceeds from sale of ordinary shares, net of issuance costs	28,174,993	3,885,509			81,091,141
Proceeds from sale of prefunded warrants, net of issuance costs	3,750,282	517,188	93,321		30,276,569
Proceeds from share issuance for warrants exercised					21,130,035
Proceeds from issuance of convertible notes					42,014,616
Net cash provided by (used in) financing activities	49,418,344	6,815,102	93,321		386,563,775
Effect of exchange rate fluctuation on cash	46,211,878	6,372,909	14,016,375		274,149
Net increase (decrease) in cash	(60,692,370)	(8,369,860)	(28,277,856)		302,877,835
Cash at beginning of period	296,838,959	40,935,964	325,116,815		22,238,980
Cash at end of period	¥ 236,146,589	$ 32,566,104	296,838,959	$ 40,935,964	325,116,815
Non-cash investing and financing activities
Issuance of common stock in exchange of shares of Starry, net of issuance costs					27,675,450
Cancellation of ordinary shares issued to Starry			¥ (27,675,450)
Conversion of convertible notes to 9,225,338 shares of ordinary shares					¥ 42,435,669
Stock issuance for convertible notes redemption (in shares) | shares					9,225,338

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OTHER EVENTS (Details)					12 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 USD ($) $ / shares shares	Dec. 26, 2019 shares	Dec. 10, 2019	Jun. 30, 2023 $ / shares shares	Mar. 28, 2024 USD ($) $ / shares shares	Mar. 15, 2023 $ / shares	Jun. 30, 2022 $ / shares shares	Jun. 14, 2021 $ / shares	Apr. 05, 2021 ¥ / shares	Apr. 05, 2021 USD ($) $ / shares shares
OTHER EVENTS
Reverse stock split	0.056	0.056			0.2
Fractional shares		0
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive		1
securities exercisable	18.00%
Exercise price	18.00%
Ordinary shares, shares outstanding	7,927,132
Class A ordinary shares
OTHER EVENTS
Reverse stock split	0.056	0.056		0.2
Authorized share capital | $		$ 58,000				$ 15,725,000					$ 15,725,000
Ordinary shares, shares authorized		500,000,000			500,000,000	150,000,000		500,000,000			150,000,000
Par value (in dollars per share) | (per share)		$ 0.0001			$ 0.0001	$ 0.0925	$ 0.0925	$ 0.0001	$ 0.0925	¥ 0.62	$ 0.0925
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive			23,049,639
Ordinary shares, shares outstanding	141,703,218		4,611,720		2,306,295			1,704,766
Ordinary shares, shares issued					2,306,295			1,704,766
Class B ordinary shares
OTHER EVENTS
Reverse stock split					0.056
Authorized share capital | $											$ 1,850,000
Ordinary shares, shares authorized		80,000,000			80,000,000	20,000,000		80,000,000			20,000,000
Par value (in dollars per share) | (per share)		$ 0.0001			$ 0.0001	$ 0.0925		$ 0.0001		¥ 0.62	$ 0.0925
Ordinary shares, shares outstanding					7,100,000			4,100,000
Ordinary shares, shares issued					7,100,000			4,100,000