BEIJING, Nov. 15, 2021 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ:RCON) ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for fiscal year 2021.

Fiscal 2021 Financial Highlights:

Total revenues for fiscal year 2021 decreased by 27.1% to $7.4 million (¥ 47.9 million).
Total cost of revenues for fiscal year 2021 decreased by 11.8% to $6.3 million (¥40.7 million).
Gross profit for fiscal year 2021 was $1.1 million (¥7.2 million). Gross profit margin for fiscal year 2021 was 15.1%, a decrease of 14.7 percentage points compared to fiscal year 2020.
Net loss attributable to Recon for fiscal year 2021 was $3.5 million (¥22.8 million), or $0.28 (¥1.80) per basic and diluted share, compared to ¥19.2 million, or ¥4.16 per basic and diluted share for the fiscal year 2020.

Management Commentary

Mr. Shenping Yin, co-founder and CEO of Recon, stated, "Fiscal 2021 has been a very challenging year for us. The impact of the COVID-19 pandemic hammered the oil industry in 2020, forcing oil companies in China to stay prudent with their investment and capitalization expenditures from July 2020 to early 2021. Thus, as some of our strong businesses remain under pressure to recover, we needed to adopt some temporary low price strategy to maintain partnerships with our clients which we believe will continue to bring high value to us in the long term. Nevertheless, we are pleased to see the treatment of waste water and oily sludge business segments perform well, which proves our investments on these sectors as worthwhile. We successfully developed some new customized equipment that matched other oilfields' clients requirements and opened new markets. As the oil industry faced headwinds in 2021 and the years ahead, management are confident on the coming year's performance and believe that we will regain our advantages in all business segments."

Mr. Yin continued, "During this year, we also made some strategic decisions. On the one hand, the new energy market under the carbon peak and carbon neutral target bring new opportunities to all industries in China, and it also holds true in the oil industry. The overall energy utilization rate of China's oil fields is low due to their current power supply system and geographical distribution of oil wells. To this end, we have launched a solar-powered solution through cooperation with oil fields with introducing the application of blockchain technology in the distributed energy industry, and providing our oilfield customers with a practical solution to support their carbon peaking and carbon neutral actions. We have conducted trials on some oil wells in Changqing Oilfield, and the results so far mark our system solution as successful in helping our customers achieve a 78% reduction in CO2 emissions and over 20% energy savings. We will continue to invest resources in this trend and enhance our cooperation with our blockchain technology partners to improve our solution and expand the market to more oilfields and gas stations. On the other hand, we acquired a majority equity interest of FGS as we see in the trend of digitalization and intelligence utilization in gas stations in China. Although these strategic investments are subject to certain uncertainty, management believe it's a worthy try and will bring a long term benefit for the best interest of the Company."

Fiscal 2021 Financial Results:

Revenue

Total revenues were approximately ¥47.9 million ($7.4 million), representing a decrease of 27.1% compared to fiscal year 2020.

Automation products and software. Revenues from automation products and software decreased to approximately ¥32.9 million ($5.1 million), representing a decrease of 63.9% from fiscal year 2020. The decrease was mainly caused by 1) Affected by the oversea Pandemic and international travel limitation, we were not able to continue our oversea projects in Iraq, which contributed ¥20.0 million of revenue to our automation business for the year ended June 30, 2020, 2) Orders from Shenhua decreased and resumed at a lower level than prior years and 3) some of our oilfield clients were still in a recovery status from prior years' loss and were prudent on further investment, negatively affecting our automation departments' operation and collection of outstanding balances. Management expect this situation will be eased as oil price increase. We are also seeking for new opportunities in petrochemical segments and other sectors among our oilfield clients as they are investing into new energy and low-carbon and environmentally friendly automation solutions.

Equipment and accessories. Revenue from equipment and accessories increased to approximately ¥1.6 million ($0.2 million), representing a increase of 11% from fiscal year 2020, as orders for cost effective equipment, such as ultra-deep electric submersible progressing cavity pump from China Petroleum & Chemical Corporation ("Sinopec"), increased as oil and gas price rose and our clients' investment in gas wells production increased. We expect this business will continued and bring a higher benefit in the coming year.

Oilfield environmental protection. Revenue from oilfield environmental protection increased to approximately ¥10.9 million ($1.7 million), representing a increase of 8792.2% from fiscal year 2020. During this period, our chemicals and related services for wastewater treatment were well accepted by clients and requirements remained stable as our clients kept an increased attention to wastewater quality during their production than prior years. Meanwhile, orders from oily sludge treatment also increased and we had also secured ¥36.3 million contracts for treatment. As we has not complete the treatment, there was barely revenue recorded during this year.

Platform outsourcing services. Revenue from platform outsourcing services increased to approximately ¥2.6 million ($0.4 million),representing an increase of 100% from fiscal year 2020. The increase was mainly due to the acquisition of FGS during the year ended June 30, 2021. FGS was consolidated into our operations from January 2021.

Cost and Margin

Total cost of revenues decreased by 11.8% to approximately ¥40.7 million ($6.3 million). This decrease was mainly caused by the decreased cost of revenue from automation product and software segment, which was partially offset by the increased cost of revenue from the other three segments during the year ended June 30, 2021.

Gross profit decreased to approximately ¥7.2 million ($1.1 million), representing a decrease of 63.2% from fiscal year 2020. Our gross profit as a percentage of revenue decreased by 14.7 percentage points to 15.1% for the year ended June 30, 2021 from 29.8% for the same period in 2020.

Operating Expenses

Total operating expenses increased to approximately ¥68.8 million ($10.7 million), representing an increase of 72.9%.

Selling and distribution expenses. Selling and distribution expenses were approximately ¥8.0 million ($1.2 million), representing a 82% increased year-over-year. We consolidated the selling expenses of FGS since January 2021 and recorded amortization expenses of customer relationship recognized in relation to the step acquisition. Meanwhile, our travelling expenses increased as the travel restriction was lifted when the Covid-19 pandemic appeared to be under control in China by the end of year 2020. Selling expenses were 16.8% of total revenues for the year ended June 30, 2021, and 6.7% of total revenues for the same period of 2020.

General and Administrative Expenses. General and administrative expenses was approximately ¥45.9 million ($7.1 million), representing a 75.9% increased year-over-year. The increase was primarily due to incurrence of offering cost of warrants issued during the fiscal year, the step acquisition of FGS as we consolidated the general and administrative expenses of FGS since January 2021, the increased profession services fees in relation to the multiple financing activities carried out during the year, and the increased depreciation expense for our Gansu production line during the year ended June 30, 2021, as the production line was transferred from construction in progress to production equipment and depreciated since January 2020. General and administrative expenses accounted for 95.9% of total revenues for the year ended June 30, 2021, and 39.7% of total revenues for the same period of 2020.

Provision for doubtful accounts. We recorded a provision for doubtful accounts of ¥2.2 million for the year ended June 30, 2020 as compared to a provision for doubtful accounts of ¥8.2 million ($1.3 million) for the same period in 2021. The increase was mainly due to 1) we made specific reserve for some outstanding accounts receivable which we did not collect as we expected due to the current unfavorable economy and made specific reserve for the receivables related to Iraq projects due to the delay in collection as a result of COVID-19 pandemic; and 2) the increased long-outstanding pre-contract costs incurred in anticipation of obtaining planned contracts for the Company's revenue, but the progress of these contracts was delayed by the COVID-19 pandemic. As of the date of this report, 21.3% of the Company's contract assets as of June 30, 2021 have been subsequently realized and the remaining balance is expected to be utilized by March 31, 2022. Management plans to continue to monitor and maintain the provision at a lower risk level.

Net Loss

Loss from operations was ¥61.6 million ($9.5 million), representing an increase of 205.2% from fiscal year 2020, which was a loss of ¥20.2 million.

Change in Fair Value of Warrant Liability.

The Company classify the warrants issued in connection with common share offering as liabilities at their fair value and adjust the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Change in fair value of warrants issued on June 14, 2021 through fiscal year end was ¥35.4 million ($5.5 million)

Net Loss Attributable to Recon Technology, Ltd.

As a result of the factors described above, net loss was ¥22.8 million ($3.5 million) for the year ended June 30, 2021, an increase of ¥3.6 million ($0.6 million) from net loss of ¥19.2 million for the same period of 2020.

Basic and Diluted EPS.

Basic and diluted net loss per share were ¥1.80 (US$0.28), compared to ¥4.16 in fiscal year 2020.

Financial Condition

As of June 30,2021, the Company had cash of approximately ¥344.0 million ($53.3 million), compared to ¥30.3 million as of June 30, 2020. As of June 30, 2021, the Company had working capital of ¥412.0 million ($63.8 million), while as of June 30, 2020, the Company had working capital of ¥64.1 million. The increase in total current assets at June 30, 2021 compared to June 30, 2020 was mainly due to an increase in cash obtained through offerings, loans to third parties and contract assets, partially offset by a decrease in trade account receivable.

Net cash used in operating activities was ¥34.1 million ($5.3 million) for the year ended June 30, 2021,compared to net cash used in operating activities of approximately ¥5.2 million for fiscal year 2020. Net cash used in investing activities was ¥46.5 million ($7.2 million) for the year ended June 30, 2021, compared to ¥2.1 million for fiscal year 2020. Net cash provided by financing activities was ¥394.0 million ($61.0 million) for the year ended June 30, 2021, compared to net cash provided by financing activities of ¥33.2 million for fiscal year 2020.

Exchange Rate

The translation of RMB amounts into U.S. dollars are included solely for the convenience of readers and have been made at the rate of ¥6.4579 to $1.00, the approximate exchange rate prevailing on June 30, 2021.

About Recon Technology, Ltd.

Recon Technology, Ltd. (RCON) is China's first non-state-owned oil and gas field service company listed on NASDAQ. Recon supplies China's largest oil exploration companies with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measures for increasing petroleum extraction levels, reducing impurities and lowering production costs. Since 2017, the Company has expanded its business operations into other segments of the broader energy industry including electric power, coal chemicals, renewable energy and environmental protection in the energy and chemical industries. Through the years, Recon has taken leading positions on several market segments of the oil and gas field service industry. Recon also has developed stable long-term cooperation relationships with its major clients, and its products and service are well accepted by clients. For additional information please visit: www.recon.cn.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, the effect of novel coronavirus and other health matters on target markets, and other risks contained in reports filed by the company with the Securities and Exchange Commission. 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.

RECON TECHNOLOGY, LTD CONSOLIDATED BALANCE SHEETS

	As of June 30		As of June 30		As of June 30
	2020		2021		2021
	RMB		RMB		U.S. Dollars
ASSETS
Current assets
Cash	¥	30,336,504	¥	343,998,570	$	53,268,248
Notes receivable		4,180,885		6,305,633		976,429
Trade accounts receivable, net		48,244,015		26,686,888		4,132,470
Trade accounts receivable- related party, net		3,068,920		—		—
Inventories, net		1,985,723		3,644,522		564,355
Other receivables, net		6,350,802		6,939,676		1,074,610
Loans to third parties		3,200,377		50,476,782		7,816,340
Purchase advances, net		178,767		1,078,137		166,950
Contract costs, net		31,537,586		48,795,906		7,556,056
Prepaid expenses		198,294		146,071		22,619
Prepaid expenses- related parties		—		433,000		67,050
Total current assets		129,281,873		488,505,185		75,645,127

Property and equipment, net		29,756,879		27,138,768		4,202,444
Land use right, net		1,280,648		1,253,408		194,090
Intangible assets, net		—		6,650,000		1,029,754
Investment in unconsolidated entity		31,541,850		27,931,795		4,325,244
Long-term other receivables, net		3,640		114,679		17,758
Goodwill		—		6,996,895		1,083,471
Operating lease right-of-use assets (including ¥803,503 and ¥352,775 ($54,627) from a related party as of June 30, 2020 and June 30, 2021, respectively)		2,549,914		7,925,930		1,227,332
Total Assets	¥	194,414,804	¥	566,516,660	$	87,725,220

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Short-term bank loans	¥	9,520,000	¥	15,000,000	$	2,322,753
Trade accounts payable		23,034,347		21,956,481		3,399,966
Other payables		2,609,486		9,862,762		1,527,251
Other payable- related parties		4,498,318		2,400,667		371,744
Contract liabilities		3,486,033		7,686,276		1,190,221
Accrued payroll and employees' welfare		1,917,635		1,954,484		302,652
Investment payable		6,400,000		—		—
Taxes payable		1,108,288		1,248,994		193,407
Short-term borrowings		200,000		530,000		82,071
Short-term borrowings - related parties		10,230,746		12,676,042		1,962,888
Long-term borrowings - related party - current portion		847,346		920,066		142,472
Operating lease liabilities - current (including ¥450,728 and ¥352,775 ($54,627) from a related party as of June 30, 2020 and June 30, 2021, respectively)		1,328,976		2,226,832		344,825
Total Current Liabilities		65,181,175		76,462,604		11,840,250

Operating lease liabilities - non-current (including ¥352,775 and ¥nil from a related party as of June 30, 2020 and June 30, 2021, respectively)		1,210,088		4,792,101		742,058
Long-term borrowings - related party		7,379,253		6,486,551		1,004,444
Deferred tax liability		—		624,088		96,640
Warrant liability		—		190,635,850		29,520,000
Total Liabilities		73,770,516		279,001,194		43,203,392

Commitments and Contingencies

Equity
Class A common stock, $0.0925 U.S. dollar par value, 150,000,000 shares authorized; 7,202,832 shares and 26,868,391 shares issued and outstanding as of June 30, 2020 and June 30, 2021, respectively^*		4,577,233		16,340,826		2,530,380
Class B common stock, $0.0925 U.S. dollar par value, 20,000,000 shares authorized; no shares issued and outstanding as of June 30, 2020 and June 30, 2021, respectively^*		—		—		—
Additional paid-in capital		282,505,455		479,490,763		74,249,242
Statutory reserve		4,148,929		4,148,929		642,462
Accumulated deficit		(184,027,586)		(206,860,320)		(32,032,362)
Accumulated other comprehensive income		2,825,731		1,974,836		305,804
Total stockholders' equity		110,029,762		295,095,034		45,695,526
Non-controlling interests		10,614,526		(7,579,568)		(1,173,698)
Total equity		120,644,288		287,515,466		44,521,828
Total Liabilities and Equity	¥	194,414,804	¥	566,516,660	$	87,725,220

* Retrospectively restated for effect of stock split on December 27, 2019 and change into dual class structure on April 5, 2021.

RECON TECHNOLOGY, LTD CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the years ended
	June 30,
	2019		2020		2021		2021
	RMB		RMB		RMB		USD

Revenues
Revenues - third party	¥	98,657,433	¥	65,760,651	¥	47,852,918	$	7,410,034
Revenues - related party		3,726,894		—		85,657		13,264
Revenues		102,384,327		65,760,651		47,938,575		7,423,298

Cost of revenues
Cost of revenues - third party		70,316,198		46,154,255		40,723,547		6,306,050
Cost of revenues - related party		2,202,765		—		—		—
Cost of revenues		72,518,963		46,154,255		40,723,547		6,306,050

Gross profit		29,865,364		19,606,396		7,215,028		1,117,248

Selling and distribution expenses		9,076,266		4,417,413		8,038,965		1,244,835
General and administrative expenses		41,288,351		26,120,099		45,949,157		7,115,236
Provision for credit losses		610,776		2,203,531		8,191,247		1,268,416
Impairment loss of property and equipment		—		—		768,312		118,973
Research and development expenses		3,133,545		7,042,385		5,846,295		905,300
Operating expenses		54,108,938		39,783,428		68,793,976		10,652,760

Loss from operations		(24,243,574)		(20,177,032)		(61,578,948)		(9,535,512)

Other income (expenses)
Subsidy income		1,149,016		1,210,318		355,667		55,075
Interest income		40,391		54,746		918,629		142,250
Interest expense		(1,589,045)		(1,451,890)		(2,210,005)		(342,220)
Income (loss) from investment in unconsolidated entity		(959,905)		462,879		(266,707)		(41,300)
Changing in fair value of warrant liability		—		—		35,365,792		5,476,400
Remeasurement gain of previously held equity interests in connection with step acquisition		—		—		979,254		151,638
Foreign exchange transaction gain (loss)		56,603		(17,720)		(146,898)		(22,747)
Other income		162,585		78,417		192,137		29,752
Other income (expense), net		(1,140,355)		336,750		35,187,869		5,448,848
Loss before income tax		(25,383,929)		(19,840,282)		(26,391,079)		(4,086,664)
Income tax expenses (benefit)		398,477		282,322		(524,251)		(81,180)
Net loss		(25,782,406)		(20,122,604)		(25,866,828)		(4,005,484)

Less: Net loss attributable to non-controlling interests		(426,501)		(875,903)		(3,034,094)		(469,830)
Net loss attributable to Recon Technology, Ltd	¥	(25,355,905)	¥	(19,246,701)	¥	(22,832,734)	$	(3,535,654)

Comprehensive loss
Net loss	¥	(25,782,406)	¥	(20,122,604)	¥	(25,866,828)	$	(4,005,484)
Foreign currency translation adjustment		1,393,843		(84,205)		(850,895)		(131,761)
Comprehensive loss		(24,388,563)		(20,206,809)		(26,717,723)		(4,137,245)
Less: Comprehensive loss attributable to non- controlling interests		(426,501)		(875,903)		(3,034,094)		(469,830)
Comprehensive loss attributable to Recon Technology, Ltd	¥	(23,962,062)	¥	(19,330,906)	¥	(23,683,629)	$	(3,667,415)

Loss per common share - basic and diluted	¥	(6.49)	¥	(4.16)	¥	(1.80)	$	(0.28)
Weighted - average shares -basic and diluted*		3,908,833		4,624,615		12,697,024		12,697,024

* Retrospectively restated for effect of stock split on December 27, 2019.

RECON TECHNOLOGY, LTD CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the years ended
	June 30,
	2019		2020		2021		2021
	RMB		RMB		RMB		U.S. Dollars

Cash flows from operating activities:
Net loss	¥	(25,782,406)	¥	(20,122,604)	¥	(25,866,828)	$	(4,005,484)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,124,011		1,609,700		3,150,789		487,900
Loss (gain) from disposal of equipment		—		(89,156)		19,590		3,034
Changing in fair value of warrant liability						(35,365,792)		(5,476,400)
Amortization of offering cost of warrants						12,584,024		1,948,639
Provision for doubtful accounts		610,776		2,203,531		8,191,247		1,268,416
Provision for slow moving inventories		65,380		56,817		654,673		101,376
Impairment of property and equipment		—		—		768,312		118,973
Amortization of right of use assets		—		1,408,551		1,866,803		289,075
Restricted shares issued for management and employees		21,288,204		7,944,835		6,140,037		950,786
Remeasurement gain of previously held equity interests in connection with step acquisition		—		—		(979,254)		(151,638)
Loss (income) from investment in unconsolidated entity		959,905		(462,879)		266,707		41,300
Deferred tax benefit		—		—		(425,913)		(65,953)
Interest expenses related to convertible notes		—		—		430,416		66,650
Restricted shares issued for services		845,781		33,927		—		—
Changes in operating assets and liabilities:
Notes receivable		922,282		(1,107,205)		(2,124,748)		(329,018)
Trade accounts receivable		(40,461,376)		18,428,088		18,326,410		2,837,848
Trade accounts receivable-related party		(3,409,912)		—		3,409,912		528,026
Inventories		(1,197,529)		(1,124,935)		(2,502,263)		(387,476)
Other receivable		(928,882)		(287,242)		(338,468)		(52,412)
Purchase advance		5,784,669		1,210,309		(899,371)		(139,268)
Contract costs		7,554,745		(26,938,013)		(21,944,876)		(3,398,168)
Prepaid expense		316,845		(5,457)		143,354		22,198
Prepaid expense - related parties		(217,600)		217,600		(433,000)		(67,050)
Operating lease liabilities		—		(1,419,402)		(2,762,949)		(427,843)
Trade accounts payable		(400,034)		8,205,660		(2,109,944)		(326,725)
Other payables		(861,620)		(23,600)		6,669,009		1,032,698
Other payables-related parties		(920,584)		2,207,445		(2,577,610)		(399,143)
Advance from customers		(37,856)		3,366,033		4,160,456		644,247
Accrued payroll and employees' welfare		784,095		533,109		(1,593,822)		(246,804)
Accrued expenses		—		9,425		(983,821)		(152,344)
Taxes payable		1,748,934		(1,085,213)		76,452		11,839
Net cash used in operating activities		(32,212,172)		(5,230,676)		(34,050,468)		(5,272,722)

Cash flows from investing activities:
Investment in unconsolidated entity		(4,205,080)		—		—		—
Purchases of property and equipment		(1,735,956)		(85,974)		(522,416)		(80,896)
Proceeds from disposal of equipment		—		900		—		—
Repayments from loans to third parties		1,000,000		11,239,623		5,150,377		797,537
Payments made for loans to third parties		(4,000,000)		(9,480,000)		(51,638,458)		(7,996,226)
Payments and prepayments for construction in progress		(4,606,823)		(3,782,912)		—		—
Step acquisition of FGS, net of cash		—		—		471,843		73,065
Net cash used in investing activities		(13,547,859)		(2,108,363)		(46,538,654)		(7,206,520)

Cash flows from financing activities:
Proceeds from short-term bank loans		2,500,000		9,520,000		16,020,000		2,480,700
Repayments of short-term bank loans		—		(2,500,000)		(10,540,000)		(1,632,121)
Proceeds from short-term borrowings		1,081,096		200,000		3,660,000		566,752
Repayments of short-term borrowings		—		(1,000,000)		(3,360,000)		(520,297)
Proceeds from short-term borrowings-related parties		5,000,000		17,415,000		18,400,000		2,849,244
Repayments of short-term borrowings-related parties		(5,000,000)		(16,195,000)		(15,950,000)		(2,469,861)
Repayments of long-term borrowings-related party		(684,191)		(747,630)		(816,952)		(126,505)
Proceeds from warrants issued with common stock		—		—		212,051,414		32,836,204
Proceeds from sale of common stock, net of issuance costs		—		26,141,051		81,091,141		12,556,980
Proceeds from pre-founded warrants received in advance		—		—		30,276,569		4,688,333
Proceeds from stock issuance for warrants exercised		—		—		21,130,035		3,271,990
Proceeds from issuance of convertible notes		—		—		42,014,616		6,505,972
Refund of capital contribution by a non-controlling shareholder		(200,000)		—		—		—
Capital contribution by non-controlling shareholders		850,000		405,000		50,000		7,743
Net cash provided by financing activities		3,546,905		33,238,421		394,026,823		61,015,134

Effect of exchange rate fluctuation on cash		1,393,873		(84,203)		224,365		34,742

Net increase (decrease) in cash		(40,819,253)		25,815,179		313,662,066		48,570,634
Cash at beginning of year		45,340,578		4,521,325		30,336,504		4,697,614
Cash at end of year	¥	4,521,325	¥	30,336,504	¥	343,998,570	$	53,268,248

Supplemental cash flow information
Cash paid during the period for interest	¥	1,542,381	¥	1,400,462	¥	1,682,863	$	260,592
Cash received during the period for taxes	¥	2,002	¥	282,322	¥	(98,338)	$	(15,228)

Non-cash investing and financing activities
Cancellation of common stock issued prior years in exchange of shares of FGS , net of issuance costs		—		—		(1,689,807)		(261,667)
Issuance of common stock in exchange of shares of FGS , net of issuance costs	¥	21,433,796	¥	—	¥	1,689,807	$	261,667
Issuance of common stock in exchange of shares of Starry, net of issuance costs		—	¥	—	¥	27,675,450	$	4,285,549
Investment payable in exchange of interest of FGS	¥	6,400,000	¥	—	¥	—	$	—
Conversion of convertible notes to 9,225,338 shares of common stock	¥	—	¥	—	¥	42,435,669	$	6,571,172
Right-of-use assets obtained in exchange for operating lease obligations	¥	—	¥	1,228,963	¥	7,242,819	$	1,121,552
Inventories used as fixed assets	¥	—	¥	409,735	¥	302,795	$	46,888
Payable for construction in progress	¥	5,694,980	¥	732,513	¥	—	$	—
Receivable for disposal of property and equipment	¥	—	¥	110,000	¥	—	$	—
Payable for issuance cost of common stock	¥	—	¥	374,696	¥	—	$	—
Capital contribution receivable due from non-controlling Interest	¥	—	¥	—	¥	50,000,000	$	7,742,510

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SOURCE Recon Technology, Ltd.

Recon Technology, Ltd Reports Financial Results for Fiscal Year 2021