Highlighted by Sustained Growth of Revenue
BEIJING, Feb. 9, 2018 /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 reported its financial
results for the second quarter and first half of fiscal
year 2018, which ended December 31, 2017.
Second Quarter FY2018 Financial Highlights (all comparable to
the prior year period):
- Total revenues for the second quarter of FY2018 increased by
35.5% to RMB41.1 million
($6.3 million)
- Gross profit for the second quarter of FY2018 was RMB4.0 million ($0.6
million)
- Gross profit margin for the second quarter of FY2018 was 9.6%,
which decreased by 28.4% compared to the second quarter of FY2017,
largely due to a higher proportion of equipment sold at a lower
price during the test-run period.
- Net loss attributable to Recon for the second quarter of FY2018
was RMB10.2 million ($1.6 million), or RMB1.22 ($0.19) per
basic and diluted share, compared to net loss attributable to Recon
of RMB4.4 million, or RMB0.70 per basic and diluted share, for the same
period of last fiscal year.
- Non-GAAP net loss attributable to common shareholders excluding
certain non-cash expenses was RMB3.1
million ($481,456), or
RMB0.37 ($0.06) per basic and diluted share, for the
second quarter of FY2018, compared to non-GAAP net income
attributable to common shareholders of RMB3.3 million, RMB0.53 per basic share, or RMB0.48 per diluted share, for the same period of
last fiscal year.
First Half of FY2018 Financial Highlights (all comparable to
the prior year period):
- Total revenues for the first six months of FY2018 increased by
39.7% to RMB53.2 million
($8.2 million)
- Gross profit for the first six months of FY2018 was
RMB6.0 million ($0.9 million). Gross profit margin for the first
six months of FY2018 was 11.4%, which decreased by 21.7% compared
to the first six months of FY2017.
- Net loss attributable to Recon for the first six months of
FY2018 was RMB17.0 million
($2.6 million), or RMB2.21 ($0.34) per
basic and diluted share, compared to RMB9.8
million, or RMB1.62 per basic
and diluted share, for the same period of last fiscal year.
- Non-GAAP net loss attributable to common shareholders excluding
certain non-cash expenses was RMB5.4
million ($0.8 million), or
RMB0.70 ($0.11) per basic and diluted share, for the
first six months of FY2018, compared to non-GAAP net loss
attributable to common shareholders of RMB234,103, or RMB0.04 per basic and diluted share, for the same
period of last fiscal year.
Management Commentary
Mr. Shenping Yin, Founder and CEO
of Recon stated, "We're pleased to see continued growth of our
business and revenue generated accordingly in this quarter. As oil
prices rebounded and the oil industry recovered from setbacks, our
management made prudent decision to invest in manufacturing
equipment and constructing wastewater, and oil sludge treatment
plants. Our gross margin decreased significantly primarily due to
increased sales of equipment with lower margin during the
construction and test-run stage of our new plants. After this stage
terminates in approximately 6 months to one year, we expect that
our gross margin will increase when we plan to produce and sell our
equipment with higher margin. Therefore, we believe our operation
and profitability will be gradually improved in the coming months.
We're excited that many potential clients have shown strong
interest in the furnaces we produce, and Qing Hai oilfield and Gan
Su oilfield also express their urgent requirement of our wastewater
and oily sewage capability. We also maintain constant fast
expansion of business scope. Beyond the oilfield service industry,
we expand our business to other domains, such as coal chemical and
petroleum chemistry. We also invested in Future Gas Station
(Beijing) Technology, Ltd.
("FGS"), a service company focusing on providing new technical
application and data operation to gas stations of oil companies.
With its DT Refuel mobile application, FGS provides solutions to
gas stations to improve their operations and their customers'
experience. Recon and FGS plan to jointly develop an integrated
block chain-based mobile shopping system for use in gas stations.
We believe all activities made during our second quarter of 2018
will bring long-term return benefit for Recon and all of its
shareholders."
Mr. Yin continued, "Looking to
the coming year and beyond, management will focus on the following
aspects: 1) for market and business, we will continue improving
operation quality and disperse risks by pursuing high-quality
business and sophisticated products; 2) for technology and
products, we will also enhance cooperation with regional leading
manufacturing companies, positively introduces advanced overseas
technique and continuously integrate and upgrade current industrial
equipment and solutions to establish leading position in various
fields, and to maximize the added value of products and service;
and 3) for internal control: we will always seek to improve our
cash flow management to meet development requirements and minimize
company risks."
Recent Developments
On November 20, 2017, the Company
entered into a securities purchase agreement with Yongquan Bi ("Mr. Bi."), pursuant to which Mr.
Bi agreed to purchase an aggregate of 3 million unregistered
restricted shares for $4.8 million, a
per-share purchase price of $1.60. On
January 19, 2018, the Company issued
3 million shares to Xinhaixin International Holdings Limited, Mr.
Bi's wholly owned company.
On December 15, 2017, the Company
signed a subscription agreement with FGS. Pursuant to this
agreement, Recon holds 8% equity interest of FGS. As of today,
Recon has invested RMB 2 million in
FGS as terms and conditions are achieved based on mutually-agreed
payment schedule.
On January 22, 2018, the Company
and certain institutional investors entered into a securities
purchase agreement in connection with an offering, pursuant to
which the Company agreed to sell an aggregate of 3,592,500 ordinary
shares. The purchase price was $1.66
per ordinary share. The aggregate gross proceeds, before deducting
fees to the Placement Agent and other estimated offering expenses
payable by the Company, are approximately $6.0 million.
Results of Operations
The following unaudited condensed consolidated results of
operations which include the Company's wholly owned subsidiaries,
their variable interest entities ("VIEs") and VIEs' subsidiaries.
The VIEs are Nanjing Recon Technology Co. Ltd ("Nanjing Recon") and
Beijing BHD Petroleum Technology Co, Ltd ("BHD"). BHD owns 100% of
the equity interest of Huang Hua BHD Petroleum Equipment
Manufacturing Co. LTD ("HH BHD"), 51% of the equity interest of
Gansu BHD Environmental Technology Ltd ("Gansu BHD") and 55% of the
equity interest of Qing Hai BHD New Energy Technology Co., Ltd.
("Qinghai BHD").
By this current report on Form 6-K, Recon has provided selected
results for the second quarter and first half of fiscal year 2018,
with details on its first half financial results in this
report.
The translation has been made at the rate of US$1.0: RMB6.51,
the approximate exchange rate prevailing on December 31, 2017.
Selected Financial
Highlights in RMB
(in 000s, except number of shares and per share data)
|
|
|
3 months ended
December 31, 2016
|
|
|
3 months ended
December 31, 2017
|
|
|
6 months ended
December 31, 2016
|
|
|
6 months ended
December 31, 2017
|
|
Sales
|
|
|
30,313
|
|
|
|
41,076
|
|
|
|
38,115
|
|
|
|
53,247
|
|
Cost of
Revenues
|
|
|
18,796
|
|
|
|
37,122
|
|
|
|
25,506
|
|
|
|
47,199
|
|
Gross
Profit
|
|
|
11,517
|
|
|
|
3,954
|
|
|
|
12,609
|
|
|
|
6,048
|
|
Gross Profit
Margin
|
|
|
38.0
|
%
|
|
|
9.6
|
%
|
|
|
33.1
|
%
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
(3,810)
|
|
|
|
(10,638)
|
|
|
|
(9,294)
|
|
|
|
(17,506)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable
to Recon Technology,
Ltd
|
|
|
(4,352)
|
|
|
|
(10,242)
|
|
|
|
(9,813)
|
|
|
|
(16,987)
|
|
Non U.S. GAAP Net
Income (Loss) attributable
to common shareholders
|
|
|
3,260
|
|
|
|
(3,133)
|
|
|
|
(234)
|
|
|
|
(5,403)
|
|
Basic and Weighted
Average Number of
Diluted Common Shares Outstanding
|
|
|
6,176,444
|
|
|
|
8,428,918
|
|
|
|
6,067,089
|
|
|
|
7,673,960
|
|
Basic and Diluted
Loss per Share
|
|
|
(0.70)
|
|
|
|
(1.22)
|
|
|
|
(1.62)
|
|
|
|
(2.21)
|
|
Non U.S. GAAP
adjusted earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.53
|
|
|
|
(0.37)
|
|
|
|
(0.04)
|
|
|
|
(0.70)
|
|
Diluted
|
|
|
0.48
|
|
|
|
(0.37)
|
|
|
|
(0.04)
|
|
|
|
(0.70)
|
|
3 MONTHS ENDED DECEMBER 31,
2017 UNAUDITED FINANCIAL RESULTS
Revenue
Total revenues for the three months ended December 31, 2017 increased by 35.5% to
RMB 41.1 million ($6.3 million) compared to RMB 30.3 million in the past year period, largely
due to increased sales of customized equipment and pressure vessels
to new clients of chemical industry.
Cost and Margin
The Company's gross profit decreased by 65.7% to RMB 4.0 million (or $0.6
million) for the three months ended December 31, 2017 from RMB11.5 million in the prior year period. Gross
profit margin decreased to 9.6% from 38.0% in the prior
year period. The significant decrease in gross margin was primarily
due to increased sales of furnaces which usually generates lower
gross margin. The management believes that our gross margin will
increase after the construction and test-run stage of our new
plants and equipment, when our equipment is expected to be sold at
the normal price.
Net Loss
Loss from operations was RMB 10.6
million ($1.6 million) during
the three months ended December 31,
2017, compared to RMB3.8
million in the prior year period. The increase in net loss
is largely due to a decrease in gross profit and an increase in
general and administrative expenses, partly offset by a decrease in
research and development expenses and selling and distribution
expenses.
Net loss attributable to Recon for the three months ended
December 31, 2017 was RMB10.2 million ($1.6
million), or RMB1.22
($0.19) per basic and diluted share
based on 8.4 million basic and diluted shares outstanding, compared
to RMB4.4 million, or RMB0.70 per basic and diluted share based on 6.2
million basic and diluted shares outstanding in the prior year
period.
Non U.S. GAAP Net Loss
Non U.S. GAAP net loss attributable to common shareholders
excluding certain non-cash expenses such as restricted shares
issued for consulting services and non-cash stock compensation
expense was RMB3.1 million
($481,456), or RMB0.37 ($0.06) per
basic and diluted share, for the three months ended December 31, 2017, compared to adjusted net
income attributable to common shareholders of RMB3.3 million, RMB0.53 per basic share, or RMB0.48 per diluted share, for the same period
last fiscal year. Please see the note about non-GAAP measures and
the reconciliation table at the end of this press release.
6 MONTHS ENDED DECEMBER 31,
2017 UNAUDITED FINANCIAL RESULTS
Revenue
|
|
For the Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
2016
|
|
|
2017
|
|
|
Increase
|
|
|
Change
|
|
Hardware and
software
|
|
Â¥
|
38,042,938
|
|
|
Â¥
|
53,064,176
|
|
|
Â¥
|
15,021,238
|
|
|
|
39.5
|
%
|
Service
|
|
|
72,170
|
|
|
|
182,551
|
|
|
|
110,381
|
|
|
|
152.9
|
%
|
Total
revenues
|
|
Â¥
|
38,115,108
|
|
|
Â¥
|
53,246,727
|
|
|
Â¥
|
15,131,619
|
|
|
|
39.7
|
%
|
Total revenues for the six months ended December 31, 2017 were approximately ¥53.2
million ($8.2 million), representing
an increase of approximately ¥15.1 million or 39.7% from ¥38.1
million for the six months ended December
31, 2016. The overall increase in revenue was accomplished
through Recon's expansion of new clients and development of new
business. See below for more details:
|
|
For the Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
Increase
/
|
|
|
Percentage
|
|
|
|
2016
|
|
|
2017
|
|
|
(Decrease)
|
|
|
Change
|
|
Automation product
and software
|
|
Â¥
|
17,964,392
|
|
|
Â¥
|
13,602,598
|
|
|
Â¥
|
(4,361,794)
|
|
|
|
(24.3)%
|
|
Equipment and
accessories
|
|
|
17,340,842
|
|
|
|
39,029,881
|
|
|
|
21,689,039
|
|
|
|
125.1
|
%
|
Waste water treatment
products
|
|
|
2,737,704
|
|
|
|
431,697
|
|
|
|
(2,306,007)
|
|
|
|
(84.2)%
|
|
Services
|
|
|
72,170
|
|
|
|
182,551
|
|
|
|
110,381
|
|
|
|
152.9
|
%
|
Total
revenue
|
|
Â¥
|
38,115,108
|
|
|
Â¥
|
53,246,727
|
|
|
Â¥
|
15,131,619
|
|
|
|
39.7
|
%
|
(1)
|
Revenue from
automation product and software decreased by ¥4.4 million or 24.3%.
Affected by less expenditure on surface projects of our clients for
the last two years, requirement of automation related projects
maintained at a lower level and fluxed. Revenue from this product
line may fluctuate from time to time. Management is confident on
further development on this business because it believes oil
companies will continue to invest in automation products. In
addition, during this period, management also expanded new market
of automation business to coal chemical industry.
|
(2)
|
As shown above, the
overall increase in revenue was primarily due to the increased
equipment, including furnaces and related accessories.
|
(3)
|
Revenue from waste
water treatment products decreased by ¥2.3 million or 84.2% as most
of Recon's wastewater treatment projects were not finished thus
less revenue was recorded in the six months ended December 31,
2017.
|
(4)
|
Revenue from services
for the six months ended December 31, 2016 and 2017 consisted
mainly of maintenance services, which were provided upon request by
customers. Revenue from services increased by ¥0.1 million or
152.9% mainly because maintenance requests outpaced the purchase of
new equipment due to industry softness, and we believe margin level
is reasonable.
|
Cost and Margin
|
|
For the Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
Increase
/
|
|
|
Percentage
|
|
|
|
2016
|
|
|
2017
|
|
|
(Decrease)
|
|
|
Change
|
|
Total
revenues
|
|
Â¥
|
38,115,108
|
|
|
Â¥
|
53,246,727
|
|
|
Â¥
|
15,131,619
|
|
|
|
39.7
|
%
|
Cost of
revenues
|
|
|
25,505,506
|
|
|
|
47,198,605
|
|
|
|
21,693,099
|
|
|
|
85.1
|
%
|
Gross
profit
|
|
Â¥
|
12,609,602
|
|
|
Â¥
|
6,048,122
|
|
|
Â¥
|
(6,561,480)
|
|
|
|
(52.0)%
|
|
Margin %
|
|
|
33.1
|
%
|
|
|
11.4
|
%
|
|
|
(21.7)%
|
|
|
|
-
|
|
Cost of Revenues. Recon's cost of revenues increased from
approximately ¥25.5 million for the six months ended December 31, 2016 to approximately ¥47.2 million
($7.3 million) for the same period in
2017, representing an increase of approximately ¥21.7 million
($3.3 million), or 85.1%. This
increase was mainly caused by significant growth in revenue
generated from equipment and accessories with lower gross profit
margin.
Gross Profit. Recon's gross profit decreased to approximately
Â¥6.0 million ($0.9 million) for the
six months ended December 31, 2017
from approximately ¥12.6 million for the same period in 2016.
Recon's gross profit as a percentage of revenue decreased to 11.4%
for the six months ended December 31,
2017 from 33.1% for the same period in 2016. This was mainly
due to the increased equipment business with lower margin during
this period, which led to the increase in cost of revenues in
proportion to the increase in Recon's revenue.
Operating Expenses
|
|
For the Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
Increase
/
|
|
|
Percentage
|
|
|
|
2016
|
|
|
2017
|
|
|
(Decrease)
|
|
|
Change
|
|
Selling and
distribution expenses
|
|
Â¥
|
2,395,089
|
|
|
Â¥
|
2,981,637
|
|
|
Â¥
|
586,548
|
|
|
|
24.5
|
%
|
% of
revenue
|
|
|
6.3
|
%
|
|
|
5.6
|
%
|
|
|
(0.7)%
|
|
|
|
-
|
|
General and
administrative expenses
|
|
|
15,244,707
|
|
|
|
18,672,141
|
|
|
|
3,427,434
|
|
|
|
22.5
|
%
|
% of
revenue
|
|
|
40.0
|
%
|
|
|
35.1
|
%
|
|
|
(4.9)%
|
|
|
|
-
|
|
Provision for
(reversal of) doubtful accounts
|
|
|
(690,964)
|
|
|
|
80,539
|
|
|
|
771,503
|
|
|
|
(111.7)%
|
|
% of
revenue
|
|
|
(1.8)%
|
|
|
|
0.2
|
%
|
|
|
2.0
|
%
|
|
|
-
|
|
Research and
development expenses
|
|
|
4,954,802
|
|
|
|
1,819,720
|
|
|
|
(3,135,082)
|
|
|
|
(63.3)%
|
|
% of
revenue
|
|
|
13.0
|
%
|
|
|
3.4
|
%
|
|
|
(9.6)%
|
|
|
|
-
|
|
Operating
expenses
|
|
Â¥
|
21,903,634
|
|
|
Â¥
|
23,554,037
|
|
|
Â¥
|
1,650,403
|
|
|
|
7.5
|
%
|
Selling and Distribution Expenses. Selling and distribution
expenses consist primarily of salaries and related expenditures of
Recon's sales and marketing organization, sales commissions, costs
of Recon's marketing programs including traveling expenses,
advertising and trade shows, and rental expense, as well as
shipping charges. Selling expenses increased by approximately ¥0.6
million (approximately $0.1 million)
for the six months ended December 31,
2017 compared to the same period in 2016. This increase was
primarily due to an increase in traveling expense and service fees,
partly offset by a decrease in shipping charges, as we began
working with qualified vendors located closer to our customers.
Selling expenses were 5.6% of total revenues for the six months
ended December 31, 2017 and 6.3% of
total revenues in the same period of 2016.
General and Administrative Expenses. General and administrative
expenses consist primarily of costs in human resources, facilities
costs, depreciation expenses, professional advisor fees, audit
fees, stock based compensation expense and other miscellaneous
expenses incurred in connection with general operations. General
and administrative expenses increased by 22.5% or ¥3.4 million
(approximately $0.5 million), from
approximately ¥15.2 million in the six months ended December 31, 2016 to approximately ¥18.7 million
(approximately $2.9 million) in the
same period of 2017. The increase in general and administrative
expenses was mainly due to an increase in performance-based
compensation, consulting fees, rent expenses and investor
relationship expenses. General and administrative
expenses accounted 35.1% of total revenues in the six months ended
December 31, 2017 and 40.0% of total
revenues in the same period of 2016. In December 2016, the Company's board approved the
grants of restricted stock to management plan based on performance
targets for the coming three fiscal years from FY2017 to FY2019.
During the six months period ended December
31, 2017, because of the grant of certain restricted stock
to management as the target for the FY2017 achieved, compensation
expenses increased ¥1.3 million.
Provision for doubtful accounts. Provision for doubtful accounts
is the estimated amount of bad debt that will arise as a result of
lower collectability from accounts receivables, other receivables
and purchase advances. We reversed provision for doubtful accounts
of ¥0.7 million for the six months ended December 31, 2016 and recorded a provision for
doubtful accounts of ¥80,500 (approximately $12,377) for the same period in 2017. Management
will continue to monitor and maintain the provision at a lower
level.
Research and development ("R&D") expenses. Research and
development expenses consist primarily of salaries and related
expenditures for Recon's research and development projects.
Research and development expenses decreased from approximately ¥5.0
million for the six months ended December
31, 2016 to approximately ¥1.8 million (approximately
$0.3 million) for the same period of
2017. This decrease was primarily due to less research and
development expense spent on design of chemical products used for
waste water treatment and digital oilfield models and platform. The
Company was focusing on transform of advanced R&D results into
projects, which were undertaken by Gansu BHD and Qinghai BHD.
Net Loss
|
|
For the Six Months
Ended
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
Increase
/
|
|
|
Percentage
|
|
|
|
2016
|
|
|
2017
|
|
|
(Decrease)
|
|
|
Change
|
|
Loss from
operations
|
|
Â¥
|
(9,294,032)
|
|
|
Â¥
|
(17,505,915)
|
|
|
Â¥
|
(8,211,883)
|
|
|
|
88.4
|
%
|
Other income,
net
|
|
|
(162,538)
|
|
|
|
(89,775)
|
|
|
|
72,763
|
|
|
|
(44.8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(9,456,570)
|
|
|
|
(17,595,690)
|
|
|
|
(8,139,120)
|
|
|
|
86.1
|
%
|
Income tax expenses
(benefits)
|
|
|
(20,143)
|
|
|
|
9,282
|
|
|
|
29,425
|
|
|
|
(146.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(9,436,427)
|
|
|
|
(17,604,972)
|
|
|
|
(8,168,545)
|
|
|
|
86.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to non-
controlling interest
|
|
|
376,212
|
|
|
|
(618,162)
|
|
|
|
(994,374)
|
|
|
|
(264.3)%
|
|
Net loss attributable
to Recon Technology,
Ltd
|
|
Â¥
|
(9,812,639)
|
|
|
Â¥
|
(16,986,810)
|
|
|
Â¥
|
(7,174,171)
|
|
|
|
73.1
|
%
|
Loss from operations. Loss from operations was ¥17.5 million
(approximately $2.7 million) for the
six months ended December 31, 2017,
compared to a loss of ¥9.3 million for the same period of 2016.
This ¥8.2 million (approximately $1.3
million) increase in loss from operations was primary due
to a decrease in gross profit, as well as an increase in
general and administrative expenses and partly offset by a decrease
in research and development expenses as discussed above.
Basic and diluted loss per share. Basic and diluted loss per
share attributable to common shareholders was RMB2.21, as compared to RMB 1.62, for the six months ended December 31, 2016.
Non U.S. GAAP Net Loss
Non U.S. GAAP net loss attributable to common shareholders
excluding certain non-cash expenses (non-GAAP) such as restricted
shares issued for consulting services and non-cash stock
compensation expense was RMB5,402,955($830,281), or RMB0.70 ($0.11) per
diluted share, for the six months ended December 31, 2017, compared to non U.S. GAAP net
loss attributable to common shareholders of RMB234,103, or RMB
0.04 per basic and diluted share, for the same period last
fiscal year. Please see the note about non-GAAP measures and the
reconciliation table at the end of this press release.
LIQUIDITY AND CAPITAL RESOURCES
Selected Balance
Sheet Highlights in RMB
Conversion US$1.0: RMB6.51 at December 31, 2017
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
12/31/2017
|
|
|
6/30/2017
|
|
|
Change
|
|
Cash
|
|
|
8,270,939
|
|
|
|
3,809,279
|
|
|
|
117.13
|
%
|
Total Current
Assets
|
|
|
86,931,130
|
|
|
|
68,387,075
|
|
|
|
27.12
|
%
|
Total
Assets
|
|
|
98,422,335
|
|
|
|
71,155,045
|
|
|
|
38.32
|
%
|
Working
Capital
|
|
|
52,116,241
|
|
|
|
38,941,318
|
|
|
|
33.83
|
%
|
Total Current
Liabilities
|
|
|
34,814,889
|
|
|
|
29,445,757
|
|
|
|
18.23
|
%
|
Total Stockholders'
Equity
|
|
|
44,767,252
|
|
|
|
33,244,445
|
|
|
|
34.66
|
%
|
Total Liabilities and
Stockholders' Equity
|
|
|
98,422,335
|
|
|
|
71,155,045
|
|
|
|
38.32
|
%
|
Cash from Operating Activities. Net cash used in operating
activities was ¥12.7 million (approximately $2.0 million) for the six months ended
December 31, 2017. This represents an
increase of ¥18.7 million (approximately $2.9 million) compared to net cash provided by
operating activities of ¥6.0 million for the six months ended
December 31, 2016. The increase in
net cash used in operating activities for the six months ended
December 31, 2017 was primarily
attributable to the net loss available to the Company in the amount
of ¥17.6 million (approximately $2.7
million), share based compensation of ¥3.6 million
(approximately $0.5 million),
restricted shares issued for management of ¥6.1 million
(approximately $0.9 million) and
restricted shares issued for services of ¥1.9 million
(approximately $0.3 million), and an
increase in trade accounts receivable and purchase advance, partly
offset by an increase in trade accounts payable.
Cash from Investing Activities. Net cash used in investing
activities was ¥7.4 million (approximately $1.1 million) for the six months ended
December 31, 2017, representing an
increase in cash used in investing activities of ¥7.2 million
($1.1 million) compared to the same
period in 2016. This increase was due to an increase in the
Company's payments for a land use right of 50 years, payments for
construction in progress and investment in unconsolidated
entity.
Cash from Financing Activities. Net cash provided by financing
activities amounted to ¥24.5 million (approximately $3.8 million) for the six months ended
December 31, 2017, as compared to net
cash used in financing activities of ¥2.5 million for the same
period in 2016. During the six months ended December 31, 2017, we repaid ¥20.3 million
(approximately $3.1 million) in
short-term borrowings to related parties and repaid ¥3.0 million
($0.5 million) in short-term
borrowings to one third-party, and we received ¥16.2 million
(approximately $2.5 million) in
short-term borrowings from related parties, received ¥4.6 million
(approximately $0.7 million) in
short-term borrowings from third-parties and received ¥10.0 million
(approximately $1.5 million) in
long-term borrowings from one related party. We also received ¥1.7
million (approximately $0.3 million)
capital contribution by non-controlling shareholders. Moreover,
this increase in net cash provided by financing activities was due
to net proceeds from sale of common stock of ¥15.3 million
(approximately $2.4 million) for the
six months ended December 31,
2017.
STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION
The unaudited financial information set forth above is subject
to adjustments that may be identified when audit work is performed
on the Company's year-end financial statements, which could result
in significant differences from this unaudited financial
information.
Use of Non-GAAP Financial Measures
To supplement Recon's unaudited condensed consolidated financial
information presented in accordance with U.S. generally accepted
accounting principles ("GAAP"), Recon uses the following non-GAAP
financial measures: certain non-cash expenses such as restricted
shares issued for consulting services and non-cash stock
compensation expense, basic and diluted earnings (losses) per
common share excludes non-cash expenses such as restricted shares
issued for consulting services and non-cash stock compensation
expense.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. Recon believes these non-GAAP financial measures provide
meaningful supplemental information about its performance by
excluding non-cash items, which may not be indicative of its
operating performance.
About Recon Technology, Ltd. (NASDAQ: RCON)
Recon Technology, Ltd. is China's first listed non-state owned oil and
gas field service company on NASDAQ. Recon supplies China's largest oil exploration companies,
Sinopec (NYSE: SNP) and CNPC, with advanced automated technologies,
efficient gathering and transportation equipment and reservoir
stimulation measure for increasing petroleum extraction levels,
reducing impurities and lowering production costs. Through the
years, RCON has taken leading positions on several segmented
markets of the oil and gas filed service industry. RCON also has
developed stable long-term cooperation relationship with its major
clients, and its products and service are also well accepted by
clients. For additional information please visit us at
www.recon.cn.
Currency Conversion
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 RMB6.51 to US$ 1.00, the noon buying rate as of December 31, 2017 as set forth in the H.10
statistical release of the Federal Reserve Board. Prior period
numbers have been recast into the new reporting currency.
Safe Harbor
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, 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.
Company Contact
Liu Jia
Recon Technology, Ltd.
+86 (10) 84945799
info@recon.cn
RECON TECHNOLOGY,
LTD
|
CONDENSED BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
As of June
30,
|
|
As of December
31
|
|
As of December
31
|
|
2017
|
|
2017
|
|
2017
|
ASSETS
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash
|
Â¥
|
3,809,279
|
|
Â¥
|
8,270,939
|
|
$
|
1,271,007
|
Notes
receivable
|
|
6,112,960
|
|
|
5,794,010
|
|
|
890,374
|
Trade accounts
receivable, net
|
|
39,425,911
|
|
|
43,608,209
|
|
|
6,701,337
|
Inventories,
net
|
|
2,627,974
|
|
|
3,455,731
|
|
|
531,047
|
Other receivables,
net
|
|
4,106,510
|
|
|
5,296,936
|
|
|
813,988
|
Purchase advances,
net
|
|
11,476,000
|
|
|
19,102,638
|
|
|
2,935,530
|
Prepaid
expenses
|
|
828,441
|
|
|
1,402,667
|
|
|
215,551
|
Total current
assets
|
|
68,387,075
|
|
|
86,931,130
|
|
|
13,358,834
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
2,767,970
|
|
|
2,571,963
|
|
|
395,237
|
Construction in
progress
|
|
-
|
|
|
5,610,165
|
|
|
862,122
|
Land use right,
net
|
|
-
|
|
|
1,309,077
|
|
|
201,168
|
Investment in
unconsolidated entity
|
|
-
|
|
|
2,000,000
|
|
|
307,343
|
Total
Assets
|
Â¥
|
71,155,045
|
|
Â¥
|
98,422,335
|
|
$
|
15,124,704
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loan
|
Â¥
|
-
|
|
Â¥
|
45,000
|
|
$
|
6,915
|
Trade accounts
payable
|
|
8,352,870
|
|
|
15,143,463
|
|
|
2,327,118
|
Other
payables
|
|
3,351,900
|
|
|
3,745,152
|
|
|
575,523
|
Other payable-
related parties
|
|
3,314,019
|
|
|
4,172,214
|
|
|
641,150
|
Deferred
revenue
|
|
1,259,725
|
|
|
1,041,840
|
|
|
160,101
|
Accrued payroll and
employees' welfare
|
|
2,014,514
|
|
|
368,627
|
|
|
56,647
|
Taxes
payable
|
|
684,721
|
|
|
1,564,319
|
|
|
240,391
|
Short-term
borrowings
|
|
300,000
|
|
|
1,900,000
|
|
|
291,976
|
Short-term borrowings
- related parties
|
|
10,168,008
|
|
|
6,113,352
|
|
|
939,448
|
Long-term borrowings
- related party - current portion
|
|
-
|
|
|
720,922
|
|
|
110,785
|
Total Current
Liabilities
|
|
29,445,757
|
|
|
34,814,889
|
|
|
5,350,054
|
|
|
|
|
|
|
|
|
|
Long-term borrowings
- related party
|
|
-
|
|
|
9,293,513
|
|
|
1,428,148
|
Total
Liabilities
|
|
29,445,757
|
|
|
44,108,402
|
|
|
6,778,202
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock, ($
0.0185 U.S. dollar par value, 100,000,000 shares
authorized; 11,687,849 shares and 9,902,914 shares
issued and
outstanding as of December 31, 2017 and June 30,
2017,
respectively)
|
|
1,261,288
|
|
|
1,481,965
|
|
|
227,736
|
Stock subscription
receivable
|
|
-
|
|
|
(15,562,334)
|
|
|
(2,391,487)
|
Additional paid-in
capital
|
|
123,436,043
|
|
|
167,215,049
|
|
|
25,696,183
|
Statutory
reserve
|
|
4,148,929
|
|
|
4,148,929
|
|
|
637,572
|
Accumulated
deficit
|
|
(95,352,659)
|
|
|
(112,339,469)
|
|
|
(17,263,371)
|
Accumulated other
comprehensive loss
|
|
(249,156)
|
|
|
(176,888)
|
|
|
(27,183)
|
Total
stockholders' equity
|
|
33,244,445
|
|
|
44,767,252
|
|
|
6,879,450
|
Non-controlling
interests
|
|
8,464,843
|
|
|
9,546,681
|
|
|
1,467,052
|
Total
equity
|
|
41,709,288
|
|
|
54,313,933
|
|
|
8,346,502
|
Total Liabilities
and Equity
|
Â¥
|
71,155,045
|
|
Â¥
|
98,422,335
|
|
$
|
15,124,704
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(UNAUDITED)
|
|
|
|
For the six months
ended
|
|
For the three
months ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2017
|
|
|
|
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
Â¥
|
38,042,938
|
|
Â¥
|
53,064,176
|
|
$
|
8,154,450
|
|
Â¥
|
30,240,835
|
|
Â¥
|
40,893,562
|
|
$
|
6,284,174
|
|
|
|
|
Service
|
|
|
72,170
|
|
|
182,551
|
|
|
28,053
|
|
|
72,170
|
|
|
182,551
|
|
|
28,053
|
|
|
|
|
Total
revenues
|
|
|
38,115,108
|
|
|
53,246,727
|
|
|
8,182,503
|
|
|
30,313,005
|
|
|
41,076,113
|
|
|
6,312,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
|
25,505,506
|
|
|
47,198,605
|
|
|
7,253,080
|
|
|
18,795,728
|
|
|
37,121,560
|
|
|
5,704,525
|
|
|
|
|
Total cost of
revenues
|
|
|
25,505,506
|
|
|
47,198,605
|
|
|
7,253,080
|
|
|
18,795,728
|
|
|
37,121,560
|
|
|
5,704,525
|
|
|
|
|
Gross
profit
|
|
|
12,609,602
|
|
|
6,048,122
|
|
|
929,423
|
|
|
11,517,277
|
|
|
3,954,553
|
|
|
607,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses
|
|
|
2,395,089
|
|
|
2,981,637
|
|
|
458,193
|
|
|
1,344,948
|
|
|
1,895,437
|
|
|
291,275
|
|
|
|
|
General and
administrative expenses
|
|
|
15,244,707
|
|
|
18,672,141
|
|
|
2,869,375
|
|
|
10,345,379
|
|
|
11,649,361
|
|
|
1,790,174
|
|
|
|
|
Provision for (net
recovery of) doubtful
accounts
|
|
|
(690,964)
|
|
|
80,539
|
|
|
12,377
|
|
|
(698,990)
|
|
|
(217,032)
|
|
|
(33,352)
|
|
|
|
|
Research and
development expenses
|
|
|
4,954,802
|
|
|
1,819,720
|
|
|
279,639
|
|
|
4,336,128
|
|
|
1,264,938
|
|
|
194,385
|
|
|
|
|
Operating
expenses
|
|
|
21,903,634
|
|
|
23,554,037
|
|
|
3,619,584
|
|
|
15,327,465
|
|
|
14,592,704
|
|
|
2,242,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(9,294,032)
|
|
|
(17,505,915)
|
|
|
(2,690,161)
|
|
|
(3,810,188)
|
|
|
(10,638,151)
|
|
|
(1,634,780)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidy
income
|
|
|
7,807
|
|
|
212,005
|
|
|
32,579
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
Interest
income
|
|
|
48,978
|
|
|
6,299
|
|
|
968
|
|
|
21,084
|
|
|
4,295
|
|
|
660
|
|
|
|
|
Interest
expense
|
|
|
(285,862)
|
|
|
(284,060)
|
|
|
(43,652)
|
|
|
(153,372)
|
|
|
(154,852)
|
|
|
(23,796)
|
|
|
|
|
Income (loss) from
foreign currency
exchange
|
|
|
3,015
|
|
|
(2,671)
|
|
|
(410)
|
|
|
2,627
|
|
|
(1,513)
|
|
|
(233)
|
|
|
|
|
Other income
(expense)
|
|
|
63,524
|
|
|
(21,348)
|
|
|
(3,281)
|
|
|
(35,994)
|
|
|
(11,791)
|
|
|
(1,812)
|
|
|
|
|
Other expense,
net
|
|
|
(162,538)
|
|
|
(89,775)
|
|
|
(13,796)
|
|
|
(165,655)
|
|
|
(163,861)
|
|
|
(25,181)
|
|
|
|
|
Loss before income
tax
|
|
|
(9,456,570)
|
|
|
(17,595,690)
|
|
|
(2,703,957)
|
|
|
(3,975,843)
|
|
|
(10,802,012)
|
|
|
(1,659,961)
|
|
|
|
|
Income tax expenses
(benefits)
|
|
|
(20,143)
|
|
|
9,282
|
|
|
1,426
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
Net
loss
|
|
|
(9,436,427)
|
|
|
(17,604,972)
|
|
|
(2,705,383)
|
|
|
(3,975,843)
|
|
|
(10,802,012)
|
|
|
(1,659,961)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to non-
controlling interests
|
|
|
376,212
|
|
|
(618,162)
|
|
|
(94,994)
|
|
|
376,212
|
|
|
(560,053)
|
|
|
(86,064)
|
|
|
|
|
Net loss
attributable to Recon Technology,
Ltd
|
|
Â¥
|
(9,812,639)
|
|
Â¥
|
(16,986,810)
|
|
$
|
(2,610,389)
|
|
Â¥
|
(4,352,055)
|
|
Â¥
|
(10,241,959)
|
|
$
|
(1,573,897)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(9,436,427)
|
|
|
(17,604,972)
|
|
|
(2,705,383)
|
|
|
(3,975,843)
|
|
|
(10,802,012)
|
|
|
(1,659,961)
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(74,152)
|
|
|
72,268
|
|
|
11,106
|
|
|
(66,550)
|
|
|
16,728
|
|
|
2,571
|
|
|
|
|
Comprehensive
loss
|
|
|
(9,510,579)
|
|
|
(17,532,704)
|
|
|
(2,694,277)
|
|
|
(4,042,393)
|
|
|
(10,785,284)
|
|
|
(1,657,390)
|
|
|
|
|
Less: Comprehensive
income (loss)
attributable to non-controlling interests
|
|
|
376,212
|
|
|
(618,162)
|
|
|
(94,994)
|
|
|
376,212
|
|
|
(560,053)
|
|
|
(86,064)
|
|
|
|
|
Comprehensive loss
attributable to Recon
Technology, Ltd
|
|
Â¥
|
(9,886,791)
|
|
Â¥
|
(16,914,542)
|
|
$
|
(2,599,283)
|
|
Â¥
|
(4,418,605)
|
|
Â¥
|
(10,225,231)
|
|
$
|
(1,571,326)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share - basic and diluted
|
|
Â¥
|
(1.62)
|
|
Â¥
|
(2.21)
|
|
$
|
(0.34)
|
|
Â¥
|
(0.70)
|
|
Â¥
|
(1.22)
|
|
$
|
(0.19)
|
|
|
|
|
Weighted - average
shares -basic and
diluted
|
|
|
6,067,089
|
|
|
7,673,960
|
|
|
7,673,960
|
|
|
6,176,444
|
|
|
8,428,918
|
|
|
8,428,918
|
|
|
|
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
For the six months
ended December 31,
|
|
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
RMB
|
|
|
RMB
|
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
Â¥
|
(9,436,427)
|
|
|
Â¥
|
(17,604,972)
|
|
|
$
|
(2,705,383)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
418,051
|
|
|
|
481,782
|
|
|
|
74,036
|
|
Gain from disposal of
equipment
|
|
|
(35,919)
|
|
|
|
(21,470)
|
|
|
|
(3,299)
|
|
Provision for (net
recovery of) doubtful accounts
|
|
|
(690,964)
|
|
|
|
80,539
|
|
|
|
12,377
|
|
Reversal of slow
moving inventories
|
|
|
-
|
|
|
|
(68,384)
|
|
|
|
(10,509)
|
|
Share based
compensation
|
|
|
4,072,141
|
|
|
|
3,550,685
|
|
|
|
545,639
|
|
Restricted shares
issued for management
|
|
|
4,742,008
|
|
|
|
6,083,148
|
|
|
|
934,806
|
|
Restricted shares
issued for services
|
|
|
764,387
|
|
|
|
1,937,867
|
|
|
|
297,795
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
receivable
|
|
|
(508,240)
|
|
|
|
318,950
|
|
|
|
49,014
|
|
Trade accounts
receivable, net
|
|
|
(14,337,641)
|
|
|
|
(4,506,281)
|
|
|
|
(692,487)
|
|
Inventories,
net
|
|
|
3,328,445
|
|
|
|
(759,373)
|
|
|
|
(116,694)
|
|
Other receivable,
net
|
|
|
10,556,718
|
|
|
|
(1,102,598)
|
|
|
|
(169,438)
|
|
Purchase advance,
net
|
|
|
(2,474,456)
|
|
|
|
(7,471,023)
|
|
|
|
(1,148,083)
|
|
Prepaid
expense
|
|
|
56,393
|
|
|
|
(574,226)
|
|
|
|
(88,242)
|
|
Trade accounts
payable
|
|
|
6,900,082
|
|
|
|
4,078,075
|
|
|
|
626,684
|
|
Other
payables
|
|
|
(131,501)
|
|
|
|
393,252
|
|
|
|
60,432
|
|
Other
payables-related parties
|
|
|
83,581
|
|
|
|
858,195
|
|
|
|
131,880
|
|
Deferred
revenue
|
|
|
(1,311)
|
|
|
|
(217,885)
|
|
|
|
(33,483)
|
|
Accrued payroll and
employees' welfare
|
|
|
721,266
|
|
|
|
(11,224)
|
|
|
|
(1,725)
|
|
Taxes
payable
|
|
|
1,927,929
|
|
|
|
1,819,793
|
|
|
|
279,650
|
|
Net cash provided
by (used in) operating activities
|
|
|
5,954,542
|
|
|
|
(12,735,150)
|
|
|
|
(1,957,030)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in
unconsolidated entity
|
|
|
-
|
|
|
|
(2,000,000)
|
|
|
|
(307,343)
|
|
Purchases of property
and equipment
|
|
|
(217,884)
|
|
|
|
(278,432)
|
|
|
|
(42,787)
|
|
Proceeds from
disposal of equipment
|
|
|
51,900
|
|
|
|
32,000
|
|
|
|
4,917
|
|
Payments for land use
right
|
|
|
-
|
|
|
|
(1,322,300)
|
|
|
|
(203,200)
|
|
Payments for
construction in progress
|
|
|
-
|
|
|
|
(3,837,842)
|
|
|
|
(589,767)
|
|
Net cash used in
investing activities
|
|
|
(165,984)
|
|
|
|
(7,406,574)
|
|
|
|
(1,138,180)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
short-term bank loans
|
|
|
-
|
|
|
|
45,000
|
|
|
|
6,915
|
|
Proceeds from
short-term borrowings
|
|
|
-
|
|
|
|
4,600,000
|
|
|
|
706,889
|
|
Repayment of
short-term borrowings
|
|
|
(530,000)
|
|
|
|
(3,000,000)
|
|
|
|
(461,014)
|
|
Proceeds from
short-term borrowings-related parties
|
|
|
7,758,318
|
|
|
|
16,188,318
|
|
|
|
2,487,683
|
|
Repayments of
short-term borrowings-related parties
|
|
|
(9,716,301)
|
|
|
|
(20,256,326)
|
|
|
|
(3,112,819)
|
|
Proceeds from
long-term borrowings-related party
|
|
|
-
|
|
|
|
10,000,000
|
|
|
|
1,536,715
|
|
Repayments of
long-term borrowings-related party
|
|
|
-
|
|
|
|
(51,969)
|
|
|
|
(7,986)
|
|
Proceeds from sale of
common stock, net of issuance costs
|
|
|
-
|
|
|
|
15,310,741
|
|
|
|
2,352,824
|
|
Capital contribution
by noncontrolling shareholders
|
|
|
-
|
|
|
|
1,700,000
|
|
|
|
261,241
|
|
Net cash provided
by (used in) financing activities
|
|
|
(2,487,983)
|
|
|
|
24,535,764
|
|
|
|
3,770,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate fluctuation on cash
|
|
|
(60,267)
|
|
|
|
67,620
|
|
|
|
10,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in
cash
|
|
|
3,240,308
|
|
|
|
4,461,660
|
|
|
|
685,629
|
|
Cash at beginning
of period
|
|
|
1,817,620
|
|
|
|
3,809,279
|
|
|
|
585,377
|
|
Cash at end of
period
|
|
Â¥
|
5,057,928
|
|
|
Â¥
|
8,270,939
|
|
|
$
|
1,271,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during
the period for interest
|
|
Â¥
|
306,530
|
|
|
Â¥
|
294,998
|
|
|
$
|
45,333
|
|
Cash paid during
the period for taxes
|
|
Â¥
|
(20,143)
|
|
|
Â¥
|
9,282
|
|
|
$
|
1,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common
stock to prepay professional services
|
|
Â¥
|
764,387
|
|
|
Â¥
|
1,937,867
|
|
|
$
|
297,795
|
|
Non-cash transaction
for accumulated salary - to equity exchange
|
|
Â¥
|
-
|
|
|
Â¥
|
1,554,908
|
|
|
$
|
238,945
|
|
Payable for
Construction in Progress
|
|
Â¥
|
-
|
|
|
Â¥
|
2,712,518
|
|
|
$
|
416,837
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
|
|
For the three
months ended
|
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
RMB
|
|
|
RMB
|
|
|
USD
|
|
Reconciliation of
Net loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
to Adjusted Net
loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
|
Â¥
|
(4,352,055)
|
|
|
Â¥
|
(10,241,959)
|
|
|
$
|
(1,573,897)
|
|
Special items
(A):
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted shares
issued for services
|
|
|
764,387
|
|
|
|
892,495
|
|
|
|
137,151
|
|
Reversal of doubtful
accounts
|
|
|
-
|
|
|
|
(217,032)
|
|
|
|
(33,352)
|
|
Reversal of slow
moving inventories
|
|
|
-
|
|
|
|
(232,689)
|
|
|
|
(35,758)
|
|
Stock compensation
expense
|
|
|
6,847,479
|
|
|
|
1,981,513
|
|
|
|
304,502
|
|
Restricted shares
issued for management
|
|
|
-
|
|
|
|
4,684,656
|
|
|
|
719,898
|
|
Adjusted net income
(loss) attributable to common shareholders
|
|
Â¥
|
3,259,811
|
|
|
Â¥
|
(3,133,016)
|
|
|
$
|
(481,456)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
U.S. GAAP Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
to Non U.S. GAAP
Adjusted Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
Â¥
|
(0.70)
|
|
|
Â¥
|
(1.22)
|
|
|
$
|
(0.19)
|
|
Impact of special
items on earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1.23
|
|
|
|
0.85
|
|
|
|
0.13
|
|
Diluted
|
|
|
1.19
|
|
|
|
0.84
|
|
|
|
0.13
|
|
Non U.S. GAAP
adjusted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Â¥
|
0.53
|
|
|
Â¥
|
(0.37)
|
|
|
$
|
(0.06)
|
|
Diluted
|
|
|
0.48
|
|
|
|
(0.37)
|
|
|
|
(0.06)
|
|
Weighted - average
shares -basic
|
|
|
6,176,444
|
|
|
|
8,428,918
|
|
|
|
8,428,918
|
|
Weighted - average
shares -diluted
|
|
|
6,766,481
|
|
|
|
8,428,918
|
|
|
|
8,428,918
|
|
|
|
|
|
For the six months
ended
|
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
RMB
|
|
|
RMB
|
|
|
USD
|
|
Reconciliation of
Net loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
to Adjusted Net
loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
|
Â¥
|
(9,812,639)
|
|
|
Â¥
|
(16,986,810)
|
|
|
$
|
(2,610,389)
|
|
Special items
(A):
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted shares
issued for services
|
|
|
764,387
|
|
|
|
1,937,867
|
|
|
|
297,795
|
|
Provision for
doubtful accounts
|
|
|
-
|
|
|
|
80,539
|
|
|
|
12,377
|
|
Provision for slow
moving inventories
|
|
|
-
|
|
|
|
(68,384)
|
|
|
|
(10,509)
|
|
Stock compensation
expense
|
|
|
8,814,149
|
|
|
|
3,550,685
|
|
|
|
545,639
|
|
Restricted shares
issued for management
|
|
|
-
|
|
|
|
6,083,148
|
|
|
|
934,806
|
|
Adjusted net loss
attributable to common shareholders
|
|
Â¥
|
(234,103)
|
|
|
Â¥
|
(5,402,955)
|
|
|
$
|
(830,281)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
U.S. GAAP Loss Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
to Non U.S. GAAP
Adjusted Loss Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
Â¥
|
(1.62)
|
|
|
Â¥
|
(2.21)
|
|
|
$
|
(0.34)
|
|
Impact of special
items on earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
1.58
|
|
|
|
1.51
|
|
|
|
0.23
|
|
Non U.S. GAAP
adjusted loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
Â¥
|
(0.04)
|
|
|
Â¥
|
(0.70)
|
|
|
$
|
(0.11)
|
|
Weighted - average
shares - basic and diluted
|
|
|
6,067,089
|
|
|
|
7,673,960
|
|
|
|
7,673,960
|
|
(A): Please refer to
Use of Non-GAAP Financial Measures for more explanation
|
View original
content:http://www.prnewswire.com/news-releases/recon-technology-reports-fiscal-2018-second-quarter-and-first-six-months-financial-results-300596362.html
SOURCE Recon Technology, Ltd.