Prospectus Supplement
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Filed pursuant to Rule 424(b)(5)
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(To Prospectus Dated November 26, 2019)
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Registration No. 333-234660 and No. 333-257059
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RECON TECHNOLOGY, LTD
6,014,102
Class A Ordinary Shares
Pre-Funded
Warrants to Purchase 2,800,000 Class A Ordinary Shares
We are offering 6,014,102
of our Class A ordinary shares, par value US$0.0925 per share (referred to hereinafter as the “ordinary shares” unless
otherwise specified) and pre-funded warrants to purchase 2,800,000 shares of our ordinary shares in lieu of the ordinary shares (the “Pre-Funded
Warrants”) directly to certain institutional investors pursuant to this prospectus supplement, the accompanying prospectus, and
that certain Securities Purchase Agreement, dated June 14, 2021, by and among Recon Technology, Ltd (the “Company”) and
the institutional investor signatories thereto. We are offering the ordinary shares in this offering at a price per share of $6.24. The
purchase price of each Pre-Funded Warrant will equal the price per share at which our ordinary shares are being sold to the public in
this offering, minus $0.01, and the exercise price of each Pre-Funded Warrant will equal $0.01 per share. The Pre-Funded Warrants will
be exercisable beginning on June 16, 2021 at an exercise price of $0.01 per ordinary share. This prospectus supplement also relates
to the offering of the ordinary shares issuable upon exercise of such Pre-Funded Warrants. In a concurrent private placement, we are also
selling to such investors, warrants (the “Warrants”) to purchase an aggregate of up to an aggregate of 8,814,102 ordinary
shares. The Warrants are exercisable immediately, at an exercise price of $6.24 per ordinary share and expire 5.5 years from the date
of issuance. The Warrants and the ordinary shares issuable upon the exercise of the Warrants are not being registered under the Securities
Act of 1933, as amended, or the Securities Act, pursuant to the registration statement of which this prospectus supplement and the accompanying
prospectus form a part and are not being offered pursuant to this prospectus supplement and the accompanying prospectus. The Warrants
and the ordinary shares issuable upon the exercise of the Warrants are being offered pursuant to an exemption from the registration requirements
of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D. There
will be no trading market for the Pre-Funded Warrants or the Warrants.
For a more detailed description
of the ordinary shares and Pre-Funded Warrants, see the section entitled “Description of Our Securities We Are Offering” beginning
on page S-15.
Our ordinary shares are currently traded on
the Nasdaq Capital Market under the symbol “RCON.” On June 14, 2021, the closing sale price of our ordinary shares was
$5.01 per share.
As of the date of this
prospectus supplement, the aggregate market value of our outstanding ordinary shares held by non-affiliates was approximately $248.5 million
based on 19,524,289 outstanding ordinary shares, of which 18,164,242 are held by non-affiliates, and a per share price of $13.68, which
was the highest closing price over the last sixty days on the Nasdaq Capital Market of our ordinary shares ended on June 11, 2021.
We have retained Maxim
Group LLC to act as the exclusive placement agent to use its best efforts to solicit offers from investors to purchase the securities
in this offering. The placement agent has no obligation to buy any securities from us or to arrange for the purchase or sale of any specific
number or dollar amount of securities. The placement agent is not purchasing or selling any ordinary shares, Pre-Funded Warrants, or Warrants
in this offering. We will pay the placement agent a fee equal to the sum of 7% of the aggregate purchase price paid by investors placed
by the placement agent.
Investing in our securities
involves a high degree of risk. You should purchase our securities only if you can afford a complete loss of your investment. See “Risk
Factors” beginning on page S-12 of this prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
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Per Ordinary Share
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Per Pre-Funded
Warrant
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Total(1)
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Public offering price
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$
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6.24
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$
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6.23
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$
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54,971,996.48
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Placement agent’s fees
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$
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0.4368
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$
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0.4361
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$
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3,848,039.75
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Proceeds, before expenses, to us
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$
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5.8032
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$
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5.7939
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$
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51,123,956.73
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(1)
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Does not include proceeds from the exercise of the Warrants issued to investors in connection with a concurrent private placement,
which Warrants and underlying shares are not offered by this prospectus or registered in the underlying registration statement.
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Maxim Group LLC is acting as the exclusive placement agent in this
offering. In addition to the placement agent fee of 7% of the aggregate purchase price, we have agreed to reimburse the placement agent
up to $45,000 worth of reasonable and accounted fees and expenses of its legal counsel.
We expect that the delivery of the ordinary shares and Pre-Funded Warrants
being offered pursuant to this prospectus supplement and the accompanying prospectus will be made on or before June 16, 2021.
Maxim Group LLC
The date of this prospectus supplement is June 14, 2021
TABLE OF CONTENTS
Prospectus Supplement
You should rely only
on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone else to provide
you with additional or different information. We are offering to sell, and seeking offers to buy, ordinary shares, Pre-Funded Warrants
and Warrants only in jurisdictions where offers and sales are permitted. You should not assume that the information in this prospectus
supplement or the accompanying prospectus is accurate as of any date other than the date on the front of those documents or that any document
incorporated by reference is accurate as of any date other than its filing date.
No
action is being taken in any jurisdiction outside the United States to permit a public offering of the ordinary shares, Pre-Funded Warrants
or Warrants or possession or distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who
come into possession of this prospectus supplement or the accompanying prospectus in jurisdictions outside the United States are required
to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus supplement and
the accompanying prospectus applicable to that jurisdiction.
ABOUT THIS PROSPECTUS
SUPPLEMENT
On
November 12, 2019, we filed with the SEC a registration statement on Form F-3 (File No. 333-234660) utilizing a shelf registration
process relating to the securities described in this prospectus supplement, which registration statement was declared effective on November 26,
2019. On June 14, 2021, we filed with the SEC a registration statement on Form F-3MEF (File No. 333-257059) pursuant
to Rule 462(b) of the Securities Act to add to the securities that we may sell in this prospectus supplement by up to $9,169,999.60.
Under this shelf registration process, we may, from time to time, sell up to $59,169,999.60 in the aggregate of ordinary shares, preferred
stock, warrants, rights to purchase securities and units. We may sell up to $55,019,997.60 of our securities in this offering and as of
the date of this prospectus supplement.
This document is in two parts. The first part
is this prospectus supplement, which describes the specific terms of the ordinary shares and Pre-Funded Warrants, and also adds to and
updates information contained in the accompanying prospectus and the documents incorporated by reference into the prospectus. The second
part, the accompanying prospectus, gives more general information, some of which does not apply to this offering. You should read this
entire prospectus supplement as well as the accompanying prospectus and the documents incorporated by reference that are described under
“Where You Can Find More Information” in this prospectus supplement and the accompanying prospectus.
If the description of the offering varies
between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in this prospectus supplement.
However, if any statement in one of these documents is inconsistent with a statement in another document having a later date – for
example, a document incorporated by reference in this prospectus supplement and the accompanying prospectus – the statement in the
document having the later date modifies or supersedes the earlier statement. Except as specifically stated, we are not incorporating by
reference any information submitted under any Current Report on Form 6-K into any filing under the Securities Act or the Securities
Exchange Act of 1934, as amended, or the Exchange Act, into this prospectus supplement or the accompanying prospectus.
Any statement contained in a document incorporated
by reference, or deemed to be incorporated by reference, into this prospectus supplement or the accompanying prospectus will be deemed
to be modified or superseded for purposes of this prospectus supplement or the accompanying prospectus to the extent that a statement
contained herein, therein or in any other subsequently filed document which also is incorporated by reference in this prospectus supplement
or the accompanying prospectus modifies or supersedes that statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in
this prospectus supplement and the accompanying prospectus were made solely for the benefit of the parties to such agreement, including,
in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you unless you are a party to such agreement. Moreover, such representations, warranties or covenants were accurate
only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs unless you are a party to such agreement.
Unless
we have indicated otherwise, or the context otherwise requires, references in this prospectus supplement and the accompanying prospectus
to “RCON,” the “Company,” “we,” “us” and “our” or similar terms refer to refer
to Recon Technology Ltd., a company with limited liability incorporated in the Cayman Islands and its consolidated subsidiaries.
CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this prospectus,
including the documents referred to or incorporated by reference in this prospectus or statements of our management referring to our summarizing
the contents of this prospectus, include “forward-looking statements”. We have based these forward-looking statements on our
current expectations and projections about future events. Our actual results may differ materially or perhaps significantly from those
discussed herein, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “plan,” “project”
and other similar expressions. In addition, any statements that refer to expectations or other characterizations of future events or circumstances
are forward-looking statements. Forward-looking statements included or incorporated by reference in this prospectus or our other filings
with the Securities and Exchange Commission, or the SEC include, but are not necessarily limited to, those relating to:
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risks and uncertainties associated with the integration of the assets and operations we have acquired and may acquire in the future;
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our possible inability to raise or generate additional funds that will be necessary to continue and expand our operations;
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our potential lack of revenue growth;
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our potential inability to add new products and services that will be necessary to generate increased sales;
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our potential lack of cash flows;
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our potential loss of key personnel;
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the availability of qualified personnel;
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international, national regional and local economic political changes;
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general economic and market conditions;
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increases in operating expenses associated with the growth of our operations;
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the possibility of technological changes;
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the potential for increased competition; and
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other unanticipated factors.
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The foregoing does not represent an exhaustive list of matters that
may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results
to differ from those anticipate in our forward-looking statements. Please see “Risk Factors” in our reports filed with the
SEC or in a prospectus supplement related to this prospectus for additional risks which could adversely impact our business and financial
performance.
Moreover, new risks regularly emerge and it is not possible for our
management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which
any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking
statements included in this prospectus are based on information available to us on the date of this prospectus. Except to the extent required
by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout (or incorporated
by reference in) this prospectus.
PROSPECTUS SUPPLEMENT SUMMARY
The
following summary highlights selected information contained or incorporated by reference in this prospectus. This summary
does not contain all of the information you should consider before investing in the securities. Before making an investment decision,
you should read the entire prospectus and any supplement hereto carefully, including the risk factors section as well as the
financial statements and the notes to the financial statements incorporated herein by reference.
In this prospectus and any amendment or supplement hereto, unless
otherwise indicated, the terms “Recon Technology Ltd.”, “RCON”, the “Company”, “we”, “us”,
and “our” refer and relate to Recon Technology Ltd. and its consolidated subsidiaries.
Except as otherwise indicated by the context, references in this prospectus
to:
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The terms “we,” “us,” “our company,” “the Company,” “our” and “Recon” refer to Recon Technology, Ltd, a Cayman Islands exempted company; Recon Technology Co., Limited, a Hong Kong company; and Recon Technology (Jining) Co., Ltd., a PRC company.
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“Shares” and “ordinary shares” refer to our ordinary shares.
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“China” and “PRC” refer to the People’s Republic of China.
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all references to “RMB” and “¥” are to the legal currency of China and all references to “USD,” “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
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“BHD” refers to Beijing BHD Petroleum Technology Co., Ltd., a PRC company.
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“FGS” refers to Future Gas Station (Beijing) Technology, Ltd., a PRC company.
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“HH BHD” refers to Huang Hua BHD Petroleum Equipment Manufacturing Co., Ltd., a PRC company.
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“Gan Su BHD” refers to Gan Su BHD Environmental Technology Co. Ltd., a PRC company.
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“Qing Hai BHD” refers to Qing Hai BHD New Energy Technology Co. Ltd., a PRC company.
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“Nanjing Recon” refers to Nanjing Recon Technology Co., Ltd., a PRC company.
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For purpose of clarity, where the context requires us to differentiate
between the entities generally referred to collectively as “Recon”, and for purposes of this prospectus only:
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“Recon-CI” refers to Recon Technology, Ltd, a Cayman Islands exempted company.
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“Recon-HK” refers to Recon Technology Co., Limited, a Hong Kong company. Recon-HK was dissolved on May 15, 2020.
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“Recon-IN” refers to Recon Investments Ltd., a Hong Kong company.
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“Recon-BJ” refers to Recon Hengda Technology (Beijing) Co., Ltd., a PRC company.
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Our Company - Overview
We are a provider of hardware, software, and on-site services to companies
in the petroleum mining and extraction industry in China (“PRC”). We provide services designed to automate and enhance the
extraction of petroleum. To this end, we control by contract the PRC companies of BHD and Nanjing Recon (collectively, the “Domestic
Companies”).
We believe that one of the most important advancements in China’s
petroleum industry has been the automation of significant segments of the exploration and extraction process. The Domestic Companies’
and our automation products and services allow petroleum mining and extraction companies to reduce their labor requirements and improve
the productivity of oilfields. The Domestic Companies’ and our solutions allow our customers to locate productive oilfields more
easily and accurately, improve control over the extraction process, increase oil yield efficiency in tertiary stage oil recovery, and
improve the transportation of crude oil.
Our principal executive offices are located at Room 601, 1 Shui’an
South Street, Chaoyang District, Beijing, 100012, People’s Republic of China. Our telephone number at this address is +86 (10) 8494-5799.
Our ordinary shares are traded on the NASDAQ Capital Market under the symbol “RCON.”
Our Internet website, www.recon.cn, provides a variety of information
about our Company. We do not incorporate by reference into this prospectus the information on, or accessible through, our website, and
you should not consider it as part of this prospectus. Our annual reports on Form 20-F and current reports on Form 6-K filed
with the United States Securities and Exchange Commission (the “SEC”) are available, as soon as practicable after filing,
at the investors’ page on our corporate website, or by a direct link to its filings on the SEC’s free website.
History and Development of the Company
The Company was incorporated under the laws of the Cayman Islands on
August 21, 2007 by Mr. Yin Shenping, Mr. Chen Guangqiang and Mr. Li Hongqi (the “Founders”) as a company
with limited liability. We provide oilfield specialized equipment, automation systems, tools, chemicals and field services to petroleum
companies mainly in the People’s Republic of China (the “PRC”). The Company’s wholly owned subsidiary, Recon Technology
Co., Limited (“Recon-HK”) was incorporated on September 6, 2007 in Hong Kong. On November 15, 2007, Recon-HK established
one wholly owned subsidiary, Jining Recon Technology Ltd. (“Recon-JN”) under the laws of the PRC, which was later dissolved
on April 10, 2019 as part of our previously disclosed organizational restructuring. Recon-HK does not own any assets or conduct any
operations and was dissolved on May 15, 2020. On November 19, 2010, the Company established another wholly owned subsidiary,
Recon Investment Ltd. (“Recon-IN”) under the laws of HK. On January 18, 2014, Recon-IN established one wholly owned subsidiary,
Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”) under the laws of the PRC. Other than the equity interest in
Recon-BJ, Recon-IN does not own any assets or conduct any operations.
We conduct our business through the following PRC legal entities that
are consolidated as variable interest entities (“VIEs”) and operate in the Chinese oilfield equipment & service industry
and energy industry:
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Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), and
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Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).
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Chinese laws and regulations currently do not prohibit or restrict
foreign ownership in petroleum businesses. However, Chinese laws and regulations do prevent direct foreign investment in certain industries.
On January 1, 2008, to protect our shareholders from possible future foreign ownership restrictions, the Founders, who also held
the controlling interest of BHD and Nanjing Recon, reorganized the corporate and shareholding structure of these entities by entering
into certain exclusive agreements with Recon-JN, which entitled Recon-JN to receive a majority of the residual returns. On May 29,
2009 Recon-JN and BHD and Nanjing Recon entered into an operating agreement to provide full guarantee for the performance of such contracts,
agreements or transactions entered into by BHD and Nanjing Recon. As a result of the new agreement, Recon-JN absorbed 100% of the expected
losses and received 90% of the expected net income of BHD and Nanjing Recon, which resulted in Recon-JN being the primary beneficiary
of these Companies.
Recon-JN also entered into Share Pledge Agreements with the Founders,
who pledged all their equity interest in these entities to Recon-JN. The Share Pledge Agreements, which were entered into by each Founder,
pledged each of the Founders’ equity interest in BHD and Nanjing Recon as a guarantee for the service payment under the Service
Agreement.
The Service Agreement entered into on January 1, 2008, between
Recon-JN and BHD and Nanjing Recon, obligated Recon-JN to provide technical consulting services to BHD and Nanjing Recon in exchange for
90% of their annual net income as a service fee.
In addition, Recon-HK entered into Option Agreements to allow Recon-HK
to acquire the Founders’ interest in these entities if or when permitted by the PRC laws.
Based on these exclusive agreements, we consolidated BHD and Nanjing
Recon as VIEs as required by Accounting Standards Codification (“ASC”) Topic 810, Consolidation because we were the primary
beneficiary of the VIEs. Management performed an ongoing reassessment of whether Recon-JN was the primary beneficiary of BHD and Nanjing
Recon.
On April 1, 2019, as part of our planned organizational restructuring,
Recon-BJ entered into a series of VIE agreements with BHD and Nanjing Recon, respectively, under the same terms and conditions as that
of the VIE agreements previously entered into by Recon-JN. As a result, the VIEs were effectively transferred from Recon-JN to Recon-BJ.
Accordingly, Recon-BJ bears all the economic risk of losses and receives 90% of the expected profits of BHD and Nanjing Recon, and consequently
becomes the primary beneficiary of the VIEs. As part of the plan of reorganization, Recon-JN was dissolved on April 10, 2019.
On August 28, 2000, a founder of the Company purchased a controlling
interest in BHD which was organized under the laws of the PRC on June 29, 1999. Through December 15, 2010, the Founders held
a 67.5% ownership interest in BHD. From December 16, 2010 to June 30, 2012, Messrs. Yin Shenping and Chen Guangqiang held
an 86.24% ownership interest of BHD. From June 30, 2012 to June 30, 2019, Mr. Chen Guangqiang continued to devote his personal
patent to BHD and increased his ownership interest of BHD. As of the date of this report, Messrs. Yin Shenping and Chen Guangqiang
collectively hold a 91.62% ownership interest of BHD. BHD is combined with the Company through the date of the exclusive agreements, and
has been consolidated following January 1, 2008, the date of the agreements based on ASC Topic 810. The Company allocates net income
90% and 100%, respectively, based upon the control agreements. Profits allocated to the minority interest are the remaining amount (10%).
On July 4, 2003, Nanjing Recon was organized under the laws of
the PRC. On August 27, 2007, the Founders of the Company purchased a majority ownership of Nanjing Recon from a related party who
was a majority owner of Nanjing Recon. Through December 15, 2010, the Founders held 80% ownership interest in Nanjing Recon. From
December 16, 2010 to June 30, 2012, Messrs. Yin Shenping and Chen Guangqiang held 80% ownership interest of Nanjing Recon.
Nanjing Recon is combined with the Company through the date of the exclusive agreements, and is consolidated following January 1,
2008, the date of the agreements based on ASC Topic 810. The Company allocates net income 90% and 100%, respectively, based upon the control
agreements. Profits allocated to the non-controlling interest are the remaining amount (10%).
On January 29, 2015, we increased our authorized shares from 25,000,000
to 100,000,000 ordinary shares.
BHD, one VIE, controls following subsidiaries:
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.
On May 23, 2017, Gan Su BHD Environmental Technology Co., Ltd
(“Gan Su BHD”) was established by BHD and another investor under the laws of the PRC, with registered capital of ¥50 million.
It is focusing on oilfield sewage treatment and oily sludge disposal projects. As of June 30, 2019, BHD had invested a total of ¥9.3
million Gan Su BHD. The paid in capital was ¥15.48 million ($2.31 million) as of June 30, 2019. Based on its revised chapter
dated August 11, 2017, BHD owns an interest of 51% of Gan Su BHD.
On October 16, 2017, Qing Hai BHD New Energy Technology Co., Ltd.
(“Qinghai BHD”) was established by BHD and a few other investors under the laws of the PRC, with registered capital of ¥50
million. It is focusing on design and production and sales of solar energy heating furnaces. As of June 30, 2019, BHD had invested
a total of ¥2.3 million to Qinghai BHD. The paid in capital was ¥4.2 million ($0.63 million) as of June 30, 2019. BHD owns
an interest of 55% of Qinghai BHD.
As the energy consumption market opened to private and foreign companies,
and online payment technology developed, we began to invest in the downstream of the oil industry. On December 15, 2017, we, through
our VIEs, BHD and Nanjing Recon, entered into a subscription agreement with Future Gas Station (Beijing) Technology, Ltd (“FGS”),
pursuant to which we 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, we 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 ownership
interest in FGS shall increase from 8% to 43%, in exchange for our investment in GFS for a total amount of RMB 10 million in cash and
the issuance of 2,435,284 restricted ordinary shares to the other shareholders of FGS with certain conditions. As of June 30, 2019,
we have invested an aggregate amount of RMB 35,116,707 ($5,113,984) in FGS and issued 2,435,284 restricted shares in total to other shareholders
of FGS, and our ownership interest in FGS increased to 43%.
On November 25, 2020, the Company and certain accredited investors
(the “Investors”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the
Company agreed to sell to the Investors, and the Investors agreed to purchase from the Company, in an unregistered private transaction,
notes (the “Notes”) with an aggregate principal amount of $6,485,000, convertible into ordinary shares, at a rate of $0.71
per share, upon the terms and subject to the limitations and conditions set forth in such Notes. The Company received gross proceeds of
$6,485,000 through December 4, 2020 to December 30, 2020. Pursuant to the conversion notices to convert the Notes in full with
the conversion date of January 25, 2021, the Company issued an aggregate of 9,225,338 ordinary shares to the Investors (the “Note
Conversion”).
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, we own 51% interest of FGS and began to consolidate the financial results of FGS since February 2021,
which will be reflected in our financial results for the year ended June 30, 2021. Through the fourth supplemental agreement, we
waived the requirement on FGS’ performances goal about the number of gas stations. Accordingly, we agreed to pay for the balance
of the investment and cancelled the related lock-up terms on the restricted shares, in exchange of additional 8% equity ownership of FGS.
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, the Company
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.”
On June 3, 2021, we entered into a share exchange agreement with
Starry Blockchain Energy Pte. Ltd. (“Starry”) and its controlling shareholders (the “Starry Controlling Shareholders”)
to acquire 30% of the equity interest in Starry. Under the Agreement, the acquired 30% of the equity interest in Starry was valued at
$3,000,000. As consideration for the 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 the signing of the exchange Agreement, to
the Starry Controlling Shareholders. The acquisition closed on June 11, 2021.
Business Overview
General
We believe that one of the most important advancements in China’s
petroleum industry has been the automation of significant segments of the exploration and extraction process. The Domestic Companies’
and our automation products and services allow petroleum mining and extraction companies to reduce their labor requirements and improve
the productivity of oilfields. The Domestic Companies’ and our solutions allow our customers to locate productive oilfields more
easily and accurately, improve control over the extraction process, increase oil yield efficiency in tertiary stage oil recovery, and
improve the transportation of crude oil.
For the most recent few years, our capacity to provide integrated services
has been a significant factor for long-term development. We treat simulation measures around fracturing as our entry point for our integrated
service model. To date, we have formed new business modules through our own R&D, investment in service-team building and developed
an integrated services solution for stimulation.
Market Background
China is the world’s second-largest consumer of petroleum products,
largest importer of petroleum and fourth-largest producer of petroleum. In the last twenty years, China’s demand for oil has more
than tripled, while its production of oil has only modestly increased. China became a net importer of petroleum in 1983, and, since then,
oil production in China has been focused on meeting the country’s domestic oil consumption requirements. The oil industry in China
is dominated by three state-owned holding companies: China National Petroleum Corporation (“CNPC”), China Petroleum and Chemical
Corporation (“Sinopec”) and China National Offshore Oil Corporation (“CNOOC”). Foreign companies have also been
deeply involved in China’s petroleum industry; however, according to Chinese law, China’s national oil companies still take
a majority (or minority) stake in any commercial discovery. As a result, the number of major foreign companies involved in the industry
is relatively limited in domestic China.
In the past, China’s petroleum companies mined for petroleum
by leveraging the country’s abundance of inexpensive labor, rather than focusing on developing new technologies. For example, a
typical, traditional oilfield with an annual capacity of 1,000,000 tons would require between 10,000 and 20,000 laborers. By contrast,
when Baker CAC automated oil production products were employed in the mid-1990s to explore and automate Cainan Oilfield, a desert oilfield
in Xinjiang, annual capacity for the field reached 1,500,000 tons, with only 400 employees needed to manage the oilfield. After the introduction
of Baker CAC’s products into China’s petroleum industry, Chinese companies have also sought to provide automation solutions.
In the primary oil recovery stage, oil pressure in an oil reservoir
may be high enough to force oil to the surface. Approximately 20% of oil may be harvested at this stage. The secondary oil recovery stage
accounts for another 5% to 15% of oil recovery and involves such efforts as pumps to extract petroleum and the injection of water, natural
gas, carbon dioxide or other gasses into the oil reservoir to force oil to the surface. Most oilfields in China have now entered into
the tertiary stage of oil recovery, at which oil extraction becomes increasingly difficult and inefficient. Tertiary recovery generally
focuses on decreasing oil viscosity to make extraction easier and accounts for between 5% and 15% of oil recovery. Our efforts in tertiary
recovery focus on reducing water content in crude oil in order to make extraction more efficient and to improve the overall production
of wells through advanced technologies and effective managing tools and approaches.
For recent years, the oil industry is experiencing digital transformation.
We believe oil companies will continue to increase their usages of intelligent solutions to improve the operation efficiency. Many oil
companies have been raising the digitalization to a strategic level and take it as the core portion of the corporate strategy to optimize
business execution and operational efficiency. Besides, we have also seen the trend of digitalization and intelligence in downstream
of the oil and gas industry, especially in the management and operation of gas stations in China. We have been devoting resources and
participating in testing projects with our clients to develop leading solutions. We will continue to enhance our competitive strength
through up-gradation with big data and intelligent analysis.
Products and Services
We have historically provided products and services mainly to oil and
gas field companies, which focus on the development and production of oil and natural gas. Our products and services described below correlate
to the numbered stages of the oilfield production system graphical expression shown below.
The following list shows our products and services. The first three
items are covered by our (1) automation product and software segment and (2) equipment and accessories segment. The last item
is covered by our oilfield environmental protection segment.
Equipment for Oil and Gas Production and Transportation
•
|
High-Efficiency Heating Furnaces (as shown above by process “3”). Crude petroleum contains certain impurities that must be removed before the petroleum can be sold, including water and natural gas. To remove the impurities and to prevent solidification and blockage in transport pipes, companies employ heating furnaces. BHD researched, developed and implemented a new oilfield furnace that is advanced, highly automated, reliable, easily operable, safe and highly heat-efficient (90% efficiency).
|
•
|
Burner (as shown above by process “5”). We serve as an agent for the Unigas Burner which is designed and manufactured by UNIGAS, a European burning equipment production company. The burner we provide has the following characteristics: high degree of automation; energy conservation; high turn-down ratio; high security and environmental safety.
|
Oil and Gas Production Improvement Techniques
•
|
Packers of Fracturing. This utility model is used concertedly with the security joint, hydraulic anchor, and slide bushing of sand spray in the well. It is used for easy seat sealing and sand-uptake prevention. The utility model reduces desilting volume and prevents sand uptake which makes the deblocking processes easier to realize. The back flushing is sand-stick proof.
|
•
|
Production Packer. According to different withdraw points, the production packer separates different oil layers, and protects the oil pipe from sand and permeability, so as to promote the recovery ratio.
|
•
|
Sand Prevention in Oil and Water Well. This technique processes additives that are resistant to elevated temperatures into “resin sand” which is transported to the bottom of the well via carrying fluid. The “resin sand” goes through the borehole, piling up and compacting at the borehole and oil vacancy layer. An artificial borehole wall is then formed, functioning as a means of sand prevention. This sand prevention technique has been adapted to more than 100 wells, including heavy oil wells, light oil wells, water wells and gas wells, with a 100% success rate and a 98% effective rate.
|
•
|
Water Locating and Plugging Technique. High water cut affects the normal production of oilfields. Previously, there was no sophisticated method for water locating and tubular column plugging in China. The mechanical water locating and tubular column plugging technique we have developed resolves the problem of high water cut wells. This technique conducts a self-sealing-test during multi-stage usage and is reliable to separate different production sets effectively. The water location switch forms a complete process by which the water locating and plugging can be finished in one trip. Our tubular column is adaptable to several oil drilling methods and is available for water locating and plugging in second and third class layers.
|
•
|
Fissure Shaper. This is our proprietary product that is used along with a perforating gun to effectively increase perforation depth by between 46% and 80%, shape stratum fissures, improve stratum diversion capability and, as a result, improve our ability to locate oilfields and increase the output of oil wells.
|
•
|
Fracture Acidizing. We inject acid to layers under pressure which can form or expand fissures. The treatment process of the acid is defined as fracture acidizing. The technique is mainly adapted to oil and gas wells that are blocked up relatively deeply, or the ones in the low permeable zones.
|
•
|
Electronic Broken-down Service. This service resolves block-up and freezing problems by generating heat from the electric resistivity of the drive pipe and utilizing a loop tank composed of an oil pipe and a drive pipe. This technique saves energy and is environmentally friendly. It can increase the production of oilfields that are in the middle and later periods.
|
Automation System and Service
•
|
Pumping Unit Controller. Refers to process “1” above. Functions as a monitor to the pumping unit, and also collects data for load, pressure, voltage, startup and shutdown control.
|
•
|
RTU Used to Monitor Natural Gas Wells. Collects gas well pressure data.
|
•
|
Wireless Dynamometer and Wireless Pressure Gauge. Refers to process “1” above. These products replace wired technology with cordless displacement sensor technology. They are easy to install and significantly reduce the working load associated with cable laying.
|
•
|
Electric Multi-Way Valve for Oilfield Metering Station Flow Control. Refers to process “2” above. This multi-way valve is used before the test separator to replace the existing three valve manifolds. It facilitates the electronic control of the connection of the oil lead pipeline with the separator.
|
•
|
Natural Gas Flow Computer System. Flow computer system used in natural gas stations and gas distribution stations to measure flow.
|
•
|
Recon SCADA Oilfield Monitor and Data Acquisition System. Recon SCADA is a system which applies to the oil well, measurement station, and the union station for supervision and data collection.
|
•
|
EPC Service of Pipeline SCADA System. A service technique for pipeline monitoring and data acquisition after crude oil transmission.
|
•
|
EPC Service of Oil and Gas Wells SCADA System. A service technique for monitoring and data acquisition of oil wells and natural gas wells.
|
•
|
EPC Service of Oilfield Video Surveillance and Control System. A video surveillance technique for controlling the oil and gas wellhead area and the measurement station area.
|
•
|
Technique Service for “Digital Oilfield” Transformation. Includes engineering technique services such as oil and gas SCADA system, video surveillance and control system and communication systems.
|
Beginning in 2017, we began to provide automation services to other
companies in the broader energy industry in China and also to provide the following products and services beyond the oilfield production
process:
Waste Water and Oil Treatment Products and Services
•
|
Oilfield sewage treatment. It is for oilfield waste water treatment solutions, related chemicals and onsite services customized to clients’ requirement. We have also developed our own designed equipment and aim to manufacture in the future.
|
•
|
Oily sludge disposal (planned). This planned business line will provide engineering services of oily sludge disposal in Gan Su province.
|
Intelligent marketing system and digitalization solution for
gas stations
•
|
Gas Station
operation and management solution. This business provides new technical applications and data operations solutions and related services
to gas stations of oil companies. It can also help gas stations export API ports to external parties for cooperation.
|
THE OFFERING
Issuer:
|
|
Recon Technology, Ltd
|
|
|
|
Ordinary shares offered by us pursuant to this prospectus supplement:
|
|
6,014,102
|
|
|
|
Pre-Funded Warrants offered by us pursuant to this prospectus supplement:
|
|
We are also offering Pre-Funded Warrants to purchase 2,800,000 ordinary
shares to such purchaser in lieu of ordinary shares that would otherwise result in such purchaser’s beneficial ownership exceeding
9.99% (or such lesser percentage as required by the investor) of our outstanding shares. The purchase price of each Pre-Funded Warrant
will equal the price per share at which the ordinary shares are being sold to the public in this offering, minus $0.01, and the exercise
price of each Pre-Funded Warrant will be $0.01 per share. Each Pre-Funded Warrant will be exercisable immediately upon issuance and will
not expire. This prospectus supplement also relates to the offering of the ordinary shares issuable upon exercise of such Pre-Funded Warrants.
See “Description of Pre-Funded Warrants” for a discussion on the terms of the Pre-Funded Warrants.
|
|
|
|
Offering Price:
|
|
$6.24 per ordinary share and $6.23 per Pre-Funded Warrant
|
|
|
|
Ordinary shares outstanding before this offering:
|
|
19,524,289
|
|
|
|
Ordinary shares to be outstanding after this offering:
|
|
25,538,391 (1)
|
|
|
|
Use of proceeds:
|
|
We intend to use the net proceeds from this offering for working capital and other capital expenditure purposes, subject to any agreed upon contractual restrictions. See “Use of Proceeds” on page S-14 of this prospectus supplement.
|
|
|
|
Concurrent private placement:
|
|
In a concurrent private placement, we are selling to the purchasers of ordinary shares and Pre-Funded Warrants in this offering Warrants to purchase up to 100% of the number of ordinary shares and Pre-Funded Warrants purchased by such investors in this offering, or Warrants to purchase up to 8,814,102 ordinary shares. We will receive gross proceeds from the concurrent private placement transaction solely to the extent such warrants are exercised for cash. The Warrants will be exercisable immediately at an exercise price of $6.24 per share and will expire 5.5 years from the date of issuance. The Warrants and the ordinary shares issuable upon the exercise of the Warrants are not being offered pursuant to this prospectus supplement and the accompanying prospectus and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. See “Private Placement Transaction of Warrants” beginning on page S-16 of this prospectus supplement.
|
|
|
|
Risk factors
|
|
Investing in our securities involves a high degree of risk. For a discussion of factors you should consider carefully before deciding to invest in our ordinary shares, Pre-Funded Warrants and Warrants, see the information contained in or incorporated by reference under the heading “Risk Factors” beginning on page S-12 of this prospectus supplement, on page 7 of the accompanying prospectus, in our Annual Report on Form 20-F for the fiscal year ended June 30, 2021 and in the other documents incorporated by reference into this prospectus supplement.
|
|
|
|
Market for the ordinary shares
|
|
Our ordinary shares are quoted and traded on the Nasdaq Capital Market under the symbol “RCON.”
|
|
(1)
|
The number of our ordinary shares to be outstanding immediately after this offering is based on 19,524,289 ordinary shares issued
and outstanding as of June 14, 2021 and ordinary shares to be issued in this offering, and excludes, as of such date, the following:
(i) 2,800,000 ordinary shares issuable to the investors upon exercise of the Pre-Funded Warrants offered in this offering;(ii) 8,814,102
ordinary shares issuable to investors upon exercise of the Warrants offered in the concurrent private placement and (iii) 366,256
ordinary shares issuable upon the exercise of outstanding options and vesting of restricted shares under the Company’s incentive
plan.
|
RISK FACTORS
Before you make a decision to invest in our securities, you should
consider carefully the risks described below, together with other information in this prospectus supplement, the accompanying prospectus
and the information incorporated by reference herein and therein. If any of the following events actually occur, our business,
operating results, prospects or financial condition could be materially and adversely affected. This could cause the trading
price of our common stock to decline and you may lose all or part of your investment. The risks described below are not the
only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also significantly
impair our business operations and could result in a complete loss of your investment.
RISKS RELATED TO THIS OFFERING
Since
we have some discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.
We have not allocated specific amounts of the net proceeds from this
offering for any specific purpose. Accordingly, subject to any agreed upon contractual restrictions under the terms of the
SPA, our management will have some flexibility in applying the net proceeds of this offering. You will be relying on the judgment
of our management with regard to the use of these net proceeds, and subject to any agreed upon contractual restrictions under the terms
of the purchase agreement, you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are
being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or
any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our
business, financial condition, operating results and cash flow.
You will experience immediate and substantial
dilution in the net tangible book value per share of the ordinary shares you purchase.
Since the price per share of our ordinary shares
being offered is higher than the net tangible book value per share of our ordinary shares, you will suffer substantial dilution in the
net tangible book value of the ordinary shares you purchase in this offering. Based on the public offering price of $6.24 per share, and
after deducting the underwriting discount and estimated offering expenses payable by us, and after
giving effect to the Note Conversion and all other issuances of common stock subsequent to December 31, 2020, as if they had occurred
as of December 31, 2020, if you purchase ordinary shares in this offering, you will suffer immediate and substantial dilution of
$3.16 per share in the net tangible book value of the ordinary shares. See the section entitled “Dilution” in this prospectus
supplement for a more detailed discussion of the dilution you will incur if you purchase ordinary shares in this offering.
Future sales of our ordinary shares may cause the prevailing
market price of our shares to decrease.
The issuance and sale of additional ordinary shares or securities convertible
into or exercisable for ordinary shares could reduce the prevailing market price for our ordinary shares as well as make future sales
of equity securities by us less attractive or not feasible. The sale of ordinary shares issued upon the exercise of our outstanding options
could further dilute the holdings of our then existing shareholders.
There has been and may continue to be significant volatility
in the volume and price of our ordinary shares on the Nasdaq Capital Market.
The market price of our ordinary shares has been and may continue to
be highly volatile. Factors, including changes in the Chinese petroleum and energy industry, changes in the Chinese economy, potential
infringement of our intellectual property, competition, concerns about our financial position, operations results, litigation, government
regulation, developments or disputes relating to agreements, patents or proprietary rights, may have a significant impact on the market
volume and price of our stock. Unusual trading volume in our shares occurs from time to time.
We
have not paid and do not intend to pay dividends on our ordinary shares. Investors in this offering may never obtain a return on their
investment.
We have not paid dividends on our ordinary since inception, and do
not intend to pay any dividends on our ordinary shares in the foreseeable future. We intend to reinvest earnings, if any, in the development
and expansion of our business. Accordingly, you will need to rely on sales of your ordinary shares after price appreciation, which may
never occur, in order to realize a return on your investment.
There is no public market for the Pre-Funded Warrants
being offered in this offering.
There is no established public trading market for the Pre-Funded Warrants
being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the Pre-Funded Warrants
on any securities exchange or nationally recognized trading system, including The Nasdaq Capital Market. Without an active market,
the liquidity of the Pre-Funded Warrants will be limited.
Holders of Pre-Funded Warrants purchased in this offering
will have no rights as ordinary shareholders until such holders exercise their Pre-Funded Warrants and acquire our ordinary shares.
Until holders of Pre-Funded Warrants acquire our ordinary
shares upon exercise of the Pre-Funded Warrants, holders of Pre-Funded Warrants will have no rights with respect to
the ordinary shares underlying such Pre-Funded Warrants. Upon exercise of the Pre-Funded Warrants, the holders will be entitled
to exercise the rights of an ordinary shareholder only as to matters for which the record date occurs after the exercise.
There is no public market for the Warrants.
There is no established public trading market for the Warrants being
offered in the concurrent private placement and we do not expect a market to develop. In addition, we do not intend to apply to list the
Warrants on any securities exchange or nationally recognized trading system. Without an active market, the liquidity of the Warrants will
be limited.
RISKS RELATED TO THE CURRENT PANDEMIC
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, a novel strain of coronavirus
(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 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, we temporarily closed our offices in varies provinces in China and ceased production operations since Chinese
New Year. We gradually resumed operation and production since February 10, 2020. During February and March 2020, our project
performance was delayed due to compliance with government controls. Although this did not reduce the demand for our services, it did result
in a delay in the timeline for performance.
In addition, COVID-19 has caused severe disruptions in transportation,
limited access to our facilities and limited support from workforce employed in our operations, and as a result, we may experience the
delays in provision of services to our customers. The extent to which the coronavirus impacts our results for fiscal year 2020 will depend
on certain future developments, including the duration and spread of the outbreak, emerging information concerning the severity of the
coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus, all of which is uncertain
at this point.
USE OF PROCEEDS
We intend to use the net proceeds from this offering for working capital
and other general capital expenditure purposes, provided that none of such proceeds will be used, directly or indirectly, (i) for
the satisfaction of any of our debt (other than payment of trade payables incurred in our ordinary course of business and consistent with
prior practices), (ii) for the redemption of any of our securities; or (iii) with respect to any litigation involving us, or
(iv) in violation of FCPA or OFAC regulations.
CAPITALIZATION
The following table sets forth our capitalization as of December 31,
2020:
|
●
|
(a) on an actual basis;
|
|
|
(b) on a pro forma basis to give effect to (i) the Note Conversion, (ii) the issuance of 1,127,223 ordinary shares due to the exercises of the warrants issued in May and June 2020, (iii) the issuance of 188,662 ordinary shares under the Company’s 2015 Equity Incentive Plan in January 2021, (iv) the issuance of 316,345 shares to the Starry Controlling Shareholders in June 2021, and (v) the implementation of the dual class structure in April 2021; and
|
|
●
|
(c) on a pro forma, as adjusted basis to give effect to the issuance and sale of 6,014,102 ordinary shares at the offering
price of $6.24 per share, and 2,800,000 Pre-Funded Warrants to purchase ordinary shares in lieu thereof at a public offering price
of $6.23 per Pre-Funded Warrant, after deducting placement agent fees and expenses and estimated offering expenses payable by us.
|
|
|
December 31, 2020
|
|
|
|
(a) Actual
|
|
|
(b) Pro Forma
|
|
|
(c) Pro Forma As Adjusted
|
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
|
Equity
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Class A ordinary shares, par value $0.0925; 150,000,000 shares authorized, 8,416,721 shares issued and outstanding, actual, 19,524,289 shares issued and outstanding, pro forma, 25,538,391 shares issued and outstanding, pro forma as adjusted;
|
|
|
813,150
|
|
|
|
1,840,600
|
|
|
|
2,432,989
|
|
Class B ordinary shares, par value $0.0925; 20,000,000 shares authorized, 0 shares issued and outstanding, actual, pro forma and pro forma as adjusted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in capital
|
|
|
45,173,769
|
|
|
|
55,417,838
|
|
|
|
104,791,254
|
|
Statutory reserves
|
|
|
635,107
|
|
|
|
635,107
|
|
|
|
635,107
|
|
Accumulated deficit
|
|
|
(29,538,302
|
)
|
|
|
(29,538,302
|
)
|
|
|
(29,538,302
|
)
|
Accumulated other comprehensive gain
|
|
|
289,984
|
|
|
|
289,984
|
|
|
|
289,984
|
|
Non-controlling interests
|
|
|
1,463,213
|
|
|
|
1,463,213
|
|
|
|
1,463,213
|
|
Total equity
|
|
|
18,836,921
|
|
|
|
30,108,440
|
|
|
|
80,074,245
|
|
Total Liabilities and Equity
|
|
|
36,363,806
|
|
|
|
47,635,325
|
|
|
|
97,601,130
|
|
The
above discussion and table are based on 8,416,721 ordinary shares outstanding as of December 31, 2020 and 19,524,289 ordinary
shares outstanding as of June 14, 2021. The table does not include any potential proceeds from the exercise of 2,800,000 Pre-Funded
Warrants issued in this offering at an exercise price of $0.01 per share and the exercise of 8,814,102 Warrants issued in the concurrent
private placement at an exercise price of $6.24 per share.
DILUTION
Your ownership interest, as a result of the issuance
of the Shares in this offering, will be diluted immediately to the extent of the difference between the offering price per share and the
as adjusted net tangible book value per share of our ordinary shares after this offering.
Our
historical net tangible book value as of December 31, 2020 was $17,373,708, or
$2.06 per share. Historical net tangible book value per share represents the amount of our total tangible assets, less total liabilities,
divided by the number of ordinary shares outstanding as of December 31, 2020.
Our
pro forma net tangible book value as of December 31, 2020 was $28,645,227 or $1.47 per
after giving effect to (i) the Note Conversion, (ii) the issuance of 1,377,223 ordinary shares due to the exercises of
the warrants issued from January to June 2020, (iii) the issuance of 188,662 ordinary shares under the Company’s
2015 Equity Incentive Plan in January 2021, (iv) the issuance of 316,345 shares to the Starry Controlling Shareholders in June 2021,
and (v) the implementation of the dual class structure in April 2021.
After
giving effect to the pro forma adjustments and the issuance of the 6,014,102 Shares at an offering price of $6.24 per share and 2,800,000
Pre-Funded Warrants in this offering at an offering price of $6.23 per Pre-Funded Warrant, assuming no exercise of the Pre-Funded Warrants
to be issued in this offering and no exercise of the Warrants to be issued in the concurrent private placement, and after deducting estimated
offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31,
2020 would have been approximately $78,611,032, or approximately $3.08 per share. This represents an immediate increase
in the pro forma as adjusted net tangible book value per share of $1.61 to existing shareholders and immediate dilution of $3.16 per share
to new investors purchasing Shares in this offering. Dilution per share to new investors in this offering is determined by subtracting
pro forma as adjusted net tangible book value per share after this offering from the offering price per share. The following table illustrates
this dilution on a per share basis:
Public offering price per share
|
|
|
|
|
$
|
6.24
|
Historical net tangible book value per share as of December 31, 2020
|
|
$
|
2.06
|
|
Decrease in pro forma net tangible book value per share
|
|
|
(0.59
|
)
|
Increase in pro forma as adjusted net tangible book value per share attributed to the investors purchasing Shares issued in this offering
|
|
|
1.61
|
|
Pro forma, as adjusted, net tangible book value per share after giving effect to this offering
|
|
|
|
|
|
3.08
|
Dilution to pro forma, as adjusted, net tangible book value per share to new investors purchasing Shares in this offering
|
|
|
|
|
|
$3.16
|
The following table summarizes as of December 31, 2020, on a pro
forma basis, as described above, the number of shares of our ordinary shares, the total consideration and the average price per share
(1) paid to us by our existing shareholders and (2) issued to persons in this offering at an offering price of $6.24 per share,
before deducting estimated offering expenses payable by us:
|
|
Shares
Purchased
|
|
|
Total
Consideration
|
|
|
Average
Price
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
Per Share
|
|
Existing shareholders
|
|
|
19,524,289
|
|
|
|
76.45
|
%
|
|
$
|
57,258,438
|
|
|
|
60.41
|
%
|
|
$
|
2.93
|
|
New investors
|
|
|
6,014,102
|
|
|
|
23.55
|
%
|
|
$
|
37,527,996
|
|
|
|
39.59
|
%
|
|
$
|
6.24
|
|
Total
|
|
|
25,538,391
|
|
|
|
100
|
%
|
|
$
|
94,786,434
|
|
|
|
100
|
%
|
|
$
|
3.71
|
|
The total number of our ordinary shares reflected
in the discussion and tables above is based on 8,416,721 ordinary shares outstanding as of December 31,
2020, with adjustment of shares as described above, but excludes 366,256 ordinary shares issuable upon the exercise of outstanding
options and vesting of restricted shares under the Company’s incentive plan.
DESCRIPTION OF OUR SECURITIES WE ARE OFFERING
Ordinary Shares and Pre-Funded Warrants
We are offering 6,014,102 ordinary shares and Pre-Funded
Warrants to purchase 2,800,000 ordinary shares pursuant to this prospectus supplement and the accompanying prospectus. For a description
of the ordinary shares being offered hereby, please see “Description of Share Capital” in the accompanying prospectus.
DESCRIPTION OF PRE-FUNDED WARRANTS
The following summary of certain
terms and provisions of the Pre-Funded Warrants that are being offered hereby is not complete and is subject to, and qualified in its
entirety by the provisions of, the Pre-Funded Warrant. Prospective investors should carefully review the terms and provisions of the form
of Pre-Funded Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants.
The
term “pre-funded” refers to the fact that the purchase price of our ordinary shares in this offering includes almost
the entire exercise price that will be paid under the Pre-Funded Warrants, $6.24 per share, except for a nominal remaining exercise price
of $0.01 per share. The purpose of the Pre-Funded Warrants is to enable investors that may have restrictions on their ability to beneficially
own more than 9.99% (or such lesser percentage as required by the investor) of our outstanding ordinary shares following the consummation
of this offering the opportunity to invest capital into the Company without triggering their ownership restrictions, by receiving
Pre-Funded Warrants in lieu of our ordinary shares which would result in such ownership of more than 9.99% (or such lesser percentage
as required by the investor), and receive the ability to exercise their option to purchase the shares underlying the Pre-Funded Warrants at
such nominal price at a later date.
Duration
and Exercise Price. The Pre-Funded Warrants offered hereby will entitle the holders thereof to purchase an aggregate of 2,800,000
ordinary shares at a nominal exercise price of $0.01 per share, commencing immediately on the date of issuance, expected to be June 16,
2021. The Pre-Funded Warrants will be issued separately from the ordinary shares and may be transferred separately immediately thereafter.
Exercise
Limitation. A holder will not have the right to exercise any portion of the Pre-Funded Warrant if the holder (together
with its affiliates) would beneficially own in excess of 9.99% (or such lesser percentage as required by the investor) of the number of
our ordinary shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance
with the terms of the Pre-Funded Warrants.
Exercise
Price. The Pre-Funded Warrants will have an exercise price of $0.01 per share. The exercise price is subject to appropriate
adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events
affecting our ordinary shares and also upon any distributions of assets, including cash, stock or other property to our shareholders.
Transferability. Subject
to applicable laws, the Pre-Funded Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange
Listing. There is no established trading market for the Pre-Funded Warrants and we do not expect a market to develop.
In addition, we do not intend to apply for the listing of the Pre-Funded Warrants on any national securities exchange or other trading
market. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited.
Fundamental
Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us,
and may exercise every right and power that we may exercise and will assume all of our obligations under the Pre-Funded Warrants with
the same effect as if such successor entity had been named in the Pre-Funded Warrant itself. If holders of our ordinary shares are given
a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice
as to the consideration it receives upon any exercise of the Pre-Funded Warrant following such fundamental transaction.
Rights
as a Shareholder. Except as otherwise provided in the Pre-Funded Warrants or by virtue of such holder’s ownership
of our ordinary shares, the holder of a Pre-Funded Warrants does not have the rights or privileges of a holder of our ordinary shares,
including any voting rights, until the holder exercises the Pre-Funded Warrant.
PRIVATE PLACEMENT TRANSACTION OF WARRANTS
In a concurrent private placement, we will issue and sell to the same
investors Warrants to purchase up to an aggregate of 8,814,102 ordinary shares at an exercise price equal to $6.24 per share.
The Warrants and the ordinary shares issuable upon the exercise
of such Warrants are not being registered under the Securities Act, are not being offered pursuant to this prospectus supplement and
the accompanying prospectus and are being offered pursuant to the exemption provided in Section 4(a)(2) of the Securities Act
and/or Rule 506(b) of Regulation D. Accordingly, investors may only sell ordinary shares issued upon exercise of the Warrants
pursuant to an effective registration statement under the Securities Act covering the resale of those shares, an exemption under Rule 144
under the Securities Act or another applicable exemption under the Securities Act.
Exercisability.
The Warrants are exercisable for a period of five and one-half years commencing on June 16, 2021 and expiring December 15, 2026.
The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice
and, at any time a registration statement registering the issuance of ordinary shares underlying the Warrants under the Securities Act
is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for
the issuance of such shares, by payment in full in immediately available funds for the number of ordinary shares purchased upon such exercise.
If a registration statement registering the issuance of the ordinary shares underlying the Warrants under the Securities Act is not effective
or available, the holder may, in its sole discretion, elect to exercise the Warrants through a cashless exercise, in which case the holder
would receive upon such exercise the net number of ordinary shares determined according to the formula set forth in the warrant.
Exercise
Limitation. A holder will not have the right to exercise any portion of the Warrants if the holder (together with its affiliates
and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess
of 4.99% (or, upon election of the holder, 9.99%) of the number of our ordinary shares outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. Any holder may increase or decrease
such percentage, but in no event may such percentage be increased to more than 9.99%, provided that any increase will not be effective
until the 61st day after such election.
Exercise
Price Adjustment. The exercise price of the Warrants is subject to appropriate adjustment in the event of certain stock dividends
and distributions, stock splits, stock combinations, reclassifications or similar events affecting our ordinary shares and also upon
any distributions of assets, including cash, stock or other property to our shareholders. The terms of the Warrants may make it difficult
for us to raise additional capital at prevailing market terms in the future.
Mandatory
Exercise. If at any time beginning six months after issuance of the Warrants, the volume weighted average price of our ordinary
shares on the Nasdaq Capital Market or other principal market on which it is traded equals or exceeds 300% of the purchase price per ordinary
share in this offering (or $18.72 per share) (which amount may be adjusted for certain capital events, such as stock splits, as described
in the Warrants) for thirty (30) consecutive trading days, then we shall have the right to require the holders to exercise for cash, all
or any portion of their Warrants that have not been exercised on the mandatory exercise date specified in the notice that we shall provide
to such holders into fully paid, validly issued and nonassessable ordinary shares in accordance with the terms of the Warrants.
Exchange
Listing. There is no established trading market for the Warrants and we do not expect a market to develop. In addition, we
do not intend to apply for the listing of the Warrants on any national securities exchange or other trading market.
Fundamental
Transactions. If (i) we, directly or indirectly, in one or more related transactions effect any merger or consolidation
of the Company with or into another person, (ii) we, directly or indirectly, effect any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of our assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer (whether by us or another person) is completed pursuant to which holders
of ordinary shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding ordinary shares, (iv) we, directly or indirectly, in one or more related transactions
effect any reclassification, reorganization or recapitalization of the ordinary shares or any compulsory share exchange pursuant to which
the ordinary shares are effectively converted into or exchanged for other securities, cash or property, or (v) we, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another person or group of persons whereby
such other person or group acquires more than 50% of the outstanding ordinary shares (not including any ordinary shares held by the other
person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share
purchase agreement or other business combination, each a “Fundamental Transaction,” then the successor entity will succeed
to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under
the Warrants with the same effect as if such successor entity had been named in the warrant itself. If holders of our ordinary shares
are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder of Warrants shall
be given the same choice as to the consideration it receives upon any exercise of the Warrants following such fundamental transaction.
Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined in
the Warrant) shall, at the holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation
of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase
the Warrant from the holder by paying to the holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining
unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, if the Fundamental
Transaction is not within the Company's control, including not approved by the Company's board of directors, the holder shall only be
entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same
type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that
is being offered and paid to the holders of ordinary shares of the Company in connection with the Fundamental Transaction, whether that
consideration be in the form of cash, stock or any combination thereof, or whether the holders of ordinary shares are given the choice
to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders
of ordinary shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of ordinary
shares will be deemed to have received ordinary shares or common equity of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction.
“Black
Scholes Value” means the value of the Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg, L.P. determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and
reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date
of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg, L.P. (determined utilizing a 365
day annualization factor) as of the trading day immediately following the public announcement of the applicable contemplated Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per
share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction
and (ii) the highest VWAP during the period beginning on the trading day immediately preceding the public announcement of the applicable
contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the trading
day of the Warrant holder’s request pursuant to Section 3(e) of the Warrant and (D) a remaining option time equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date.
Dividends.
If, at any time while the Warrants are outstanding, we declare or make any dividend or other distribution of our assets (or rights to
acquire our assets) to holders of our ordinary shares, by way of return of capital or otherwise, then each holder of ordinary shares shall
be entitled to participate in such distribution, subject to the beneficial ownership limitations, to the same extent that the holder would
have participated therein if the holder had held the number of ordinary shares acquirable upon complete exercise of Warrants immediately
prior to the record date for such distribution.
Resale/Registration
Rights. We are required within 45 days of the closing of the offering to file a registration statement providing for the resale
of the ordinary shares issued and issuable upon the exercise of the Warrants. We are required to use commercially reasonable efforts to
cause such registration to become effective within 120 days of the closing of the offering and to keep such registration statement effective
at all times until no investor owns any Warrants or shares issuable upon exercise thereof.
PLAN OF DISTRIBUTION
Placement Agency Agreement and SPA
Maxim Group LLC, which we refer to as the placement agent, has agreed
to act as the exclusive placement agent in connection with this offering subject to the terms and conditions of a placement agency agreement
dated as of June 14, 2021. The placement agent is not purchasing or selling any securities offered by this prospectus
supplement, nor is it required to arrange the purchase or sale of any specific number or dollar amount of securities, but it has agreed
to use its reasonable efforts to arrange for the sale of all of the securities offered hereby.
We
have entered into a Securities Purchase Agreement on June 14, 2021 (the “Securities Purchase Agreement”). Pursuant to
the SPA, we will sell to the purchasers 6,014,102 ordinary shares, at a price of $6.24 per share, and Pre-Funded Warrants
in lieu thereof, at a price of $6.23 per Pre-Funded Warrant, to purchase 2,800,000 ordinary shares. We negotiated the price for the securities
offered in this offering with the purchasers. The factors considered in determining the price included the recent market price
of our ordinary shares, the general condition of the securities market at the time of this offering, the history of, and the prospects,
for the industry in which we compete, our past and present operations, and our prospects for future revenues.
The placement agent may be deemed to be an underwriter within the meaning
of Section 2(a)(11) of the Securities Act, and any fees or commissions received by it and any profit realized on the resale of securities
sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As
an underwriter, the placement agent is required to comply with the requirements of the Securities Act and the Exchange Act, including,
without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These
rules and regulations may limit the timing of purchases and sales of ordinary shares, Pre-Funded Warrants and Warrants by the placement
agent. Under these rules and regulations, the placement agent:
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·
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may not engage in any stabilization activity in connection with our securities; and
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·
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may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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From time to time in the ordinary course of their respective businesses,
the placement agent or its affiliates have in the past or may in the future engage in investment banking and/or other services with us
and our affiliates for which it has or may in the future receive customary fees and expenses.
Under the SPA, we will be precluded from engaging in equity or
equity-linked securities offerings for a period of beginning on the closing date and continuing until the earlier of (a) thirty (30)
calendar days from following the effective date of the registration statement covering the shares underlying the Warrants issued in the
concurrent private offering or (b) seven (7) months following the date of the SPA, subject to certain exceptions.
We also agreed to indemnify the purchasers against certain losses resulting
from our breach of any of our representations, warranties, or covenants under agreements with the purchasers as well as under certain
other circumstances described in the SPA.
Placement Agent Fees
We
have agreed to pay the placement agent upon the closing of this offering (1) a cash fee equal to 7% of the aggregate purchase price
of the securities offered under this prospectus supplement and accompanying prospectus; and (2) up to $45,000 to reimburse the placement
agent for its out-of-pocket expenses (including counsel fee). We have also agreed that if within six (6) months following the termination
of the placement agency agreement dated June 14, 2021, the Company completes any financing of equity, equity-linked or debt or
other capital raising activity of the Company (other than the exercise by any person or entity of any options, warrants or other convertible
securities) with any of the investors “wall crossed” by placement agent during the term of the placement agency agreement
(other than investors introduced to the placement agent by the Company, which the placement agent agrees have been introduced by the
Company), then the Company will pay the placement agent upon the closing of such financing the lower of (i) a cash fee equal to 7% of
the aggregate purchase price of the securities offered pursuant to the placement agency agreement or (ii) the rate of compensation payable
in the new financing.
We have agreed to indemnify the placement
agent and certain other persons against certain liabilities, including liabilities under the Securities Act of 1933, as amended. We also
have agreed to contribute to payments the placement agent may be required to make in respect of such liabilities.
The following table shows per share and total
cash placement agent’s fees we will pay to the placement agent in connection with the sale of the ordinary shares pursuant to this
prospectus supplement and the accompanying prospectus assuming the purchase of all of the ordinary shares offered hereby:
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Per Ordinary Share
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|
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Per Pre-Funded Warrant
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|
|
Total(1)
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Public offering price
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$
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6.24
|
|
|
$
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6.23
|
|
|
$
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54,971,996.48
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Placement agent’s fees
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|
$
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0.4368
|
|
|
$
|
0.4361
|
|
|
$
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3,848,039.75
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Proceeds, before expenses, to us
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$
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5.8032
|
|
|
$
|
5.7939
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|
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$
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51,123,956.73
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After deducting fees due to the placement
agent and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $50.0 million.
Delivery of Ordinary Shares and Pre-Funded
Warrants
Delivery of our ordinary shares and Pre-Funded
Warrants issued and sold in this offering will occur on June 16, 2021.
Transfer Agent and Registrar
The transfer agent and registrar for our ordinary shares is VStock
Transfer, LLC located in 18 Lafayette Place Woodmere, New York 11598 U.S. Our transfer agent’s phone number is (212) 828-8436 and
facsimile number is (646) 536-3179.
Listing
Our ordinary shares are quoted on the Nasdaq Capital Market under the
trading symbol “RCON”.
LEGAL MATTERS
Kaufman & Canoles, P.C., Richmond, Virginia is acting as counsel
to our company regarding U.S. securities law matters. The validity of the ordinary shares being offered herein is being passed upon for
us by Campbells, Grand Cayman, Cayman Islands. The validity of the Pre-Funded Warrants being offered herein is being passed upon for us
by Kaufman & Canoles, P.C. to the extent governed by the laws of the State of New York. Hunter Taubman Fischer & Li,
LLC, New York, New York is counsel to the placement agent in connection with this offering.
EXPERTS
The consolidated financial statements of our Company appearing in our
annual report on Form 20-F for the fiscal years ended June 30, 2020, 2019 and 2018 have been audited by Friedman LLP, independent
registered public accounting firm, as set forth in the reports thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts
in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The U.S. Securities and Exchange Commission (the “SEC”)
allows us to “incorporate by reference” into this prospectus the information we file with the SEC. This means that we can
disclose important information to you by referring you to those documents. Any statement contained in a document incorporated by reference
in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained
herein, or in any subsequently filed document, which also is incorporated by reference herein, modifies or supersedes such earlier statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We hereby incorporate by reference into this prospectus supplement
the following documents that we have filed with the SEC under the Exchange Act:
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·
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our Current Reports
on Form 6-K filed on November 27, 2020, February 8, 2021, March 9, 2021, March 15, 2021, March 29, 2021, April 5, 2021, April 6, 2021, April 12, 2021 and June 4, 2021;
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·
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The description of
our ordinary shares contained in our registration statement on Form 8-A filed on July 15, 2009 and Form 8-A/A
filed on June 14, 2021, as it may be further amended from time to time;
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All documents that we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act (and in the case of a Current Report on Form 6-K, so long as they state that they are incorporated
by reference into this prospectus, and other than Current Reports on Form 6-K, or portions thereof, furnished under Form 6-K) (i) after
the initial filing date of the registration statement of which this prospectus forms a part and prior to the effectiveness of such registration
statement and (ii) after the date of this prospectus and prior to the termination of the offering shall be deemed to be incorporated
by reference in this prospectus from the date of filing of the documents, unless we specifically provide otherwise. Information that
we file with the SEC will automatically update and may replace information previously filed with the SEC. To the extent that any information
contained in any Current Report on Form 6-K or any exhibit thereto, was or is furnished to, rather than filed with the SEC, such information
or exhibit is specifically not incorporated by reference.
Any statement contained in a document we incorporate by reference will
be modified or superseded for all purposes to the extent that a statement contained in this prospectus (or in any other document that
is subsequently filed with the Securities and Exchange Commission and incorporated by reference herein prior to the termination of this
offering) modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this
prospectus except as so modified or superseded.
You may obtain a copy of these filings, without charge, by writing
or calling us at:
Recon Technology, Ltd
Room 601, No. 1 Shui’an South Street
Chaoyang District, Beijing, 100012
People’s Republic of China
+86 (10) 8494-5799
Attn: Investor Relations
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information.
You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date
on the front page of those documents.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the ordinary shares and Pre-Funded Warrants offered by this prospectus.
This prospectus is part of that registration statement and does not contain all the information included in the registration statement.
For further information with respect to our ordinary shares, Pre-Funded
Warrants and us, you should refer to the registration statement, its exhibits and the material incorporated by reference therein. Portions
of the exhibits have been omitted as permitted by the rules and regulations of the Securities and Exchange Commission. Statements
made in this prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. In each
instance, we refer you to the copy of the contracts or other documents filed as an exhibit to the registration statement, and these statements
are hereby qualified in their entirety by reference to the contract or document.
We are subject to the information reporting requirements of the Exchange
Act that are applicable to foreign private issuers, and, in accordance with these requirements, we file annual and current reports and
other information with the SEC. You may inspect, read (without charge) and copy the reports and other information we file with the SEC
at the SEC’s Public Reference Room located 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 an internet website at www.sec.gov that contains
our filed reports and other information that we file electronically with the SEC.
We maintain
a corporate website at http http://www.recon.cn/. Information contained on, or that can be accessed through, our website does
not constitute a part of this prospectus.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
FOR SECURITIES LAW VIOLATIONS
Cayman Islands law and our Memorandum of Association and Articles of
Association provide that we may indemnify our directors, officers, advisors and trustee acting in relation to any of our affairs against
actions, proceedings, costs, charges, losses, damages and expenses incurred by reason of any act done or omitted in the execution of their
duty in their capacities as such. Under our Memorandum of Association and Articles of Association and Cayman Islands common law, indemnification
is not available, however, if those events were incurred or sustained by or through their own dishonesty, fraud, gross negligence, willful
neglect or default. While our Memorandum of Association and Articles of Association explicitly prohibit indemnification in cases involving
willful neglect or default, the Cayman Island common law extends this prohibition to cases involving dishonesty, fraud and gross negligence.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that
in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
6,014,102 Class A
Ordinary Shares
Pre-Funded Warrants
to Purchase 2,800,000 Class A Ordinary Shares
RECON TECHNOLOGY, LTD
PROSPECTUS
SUPPLEMENT
Maxim Group, LLC
June 14, 2021
PROSPECTUS
$50,000,000
RECON TECHNOLOGY, LTD
Ordinary Shares, Share Purchase Contracts, Share
Purchase Units, Debt Securities, Warrants, Rights and Units
We may offer to sell, from time to time, in one or more offerings,
any combination of debt securities, ordinary shares, warrants, rights, share purchase contracts, share purchase units or units having
an aggregate initial offering price not exceeding $50,000,000 (or its equivalent in foreign or composite currencies) on terms to be determined
at the time of offering. We may also offer any of these securities that may be issuable upon the conversion, exercise or exchange of debt
securities, rights or warrants.
The aggregate offering price of the securities issued under this prospectus
may not exceed $50,000,000. The prices and other terms of the securities that we will offer will be determined at the time of their offering
and will be described in a supplement to this prospectus.
This prospectus provides a general description of the securities we
may offer. We will provide the specific terms of the securities offered in one or more supplements to this prospectus. We may also authorize
one or more free writing prospectuses to be provided to you in connection with these offerings. You should read carefully this prospectus,
the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference before
you invest in any of our securities. This prospectus may not be used to offer or sell any securities unless accompanied by the
applicable prospectus supplement.
The securities issued under this prospectus may be offered directly
or through underwriters, agents or dealers. The names of any underwriters, agents or dealers will be included in a supplement to this
prospectus.
The aggregate market value of our outstanding ordinary shares held
by non-affiliates was approximately $7.50 million based on 23,049,639 shares of outstanding ordinary shares, of which 10,701,536 shares
are held by non-affiliates, and a per share price of $0.7 based on the closing sale price of our ordinary shares as reported by the Nasdaq
Capital Market on November 8, 2019. We have not offered any securities pursuant to General Instruction I.B.5 of Form F-3 during
the prior 12 calendar month period that ends on and includes the date of this prospectus.
Investing
in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider the
risk factors beginning on page 8 of this prospectus, as well as those included in the periodic and other
reports we file with the Securities and Exchange Commission before you make your investment decision.
Neither the Securities and Exchange Commission, any United States
state securities commission, the Cayman Islands Monetary Authority, nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 26,
2019
TABLE OF CONTENTS
You should rely only on the information contained or incorporated
by reference in this prospectus or any prospectus supplement. We have not authorized any person to provide you with different or additional
information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer
to sell securities, and it is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously
filed with the SEC and incorporated by reference, is accurate as of the date on the front of those documents only. Our business, financial
condition, results of operations and prospects may have changed since those dates.
PROSPECTUS SUMMARY
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (SEC) using a “shelf” registration process. Under this shelf registration process,
we may offer from time to time, in one or more offerings, securities having an aggregate initial offering price of up to $50,000,000 (or
its equivalent in foreign or composite currencies). This prospectus provides you with a general description of the securities that may
be offered. Each time we offer securities under this shelf registration statement, we will provide you with a prospectus supplement that
describes the specific amounts, prices and terms of the securities being offered. The prospectus supplement also may add, update or change
information contained in this prospectus. You should read carefully both this prospectus and any prospectus supplement together with additional
information described below under the caption “Where You Can Find More Information,” before making an investment decision.
We have incorporated exhibits into this registration statement. You should read the exhibits carefully for provisions that may be important
to you.
Industry data and other statistical information used in this prospectus,
any applicable prospectus supplement, any related free writing prospectus and any document incorporated by reference into this prospectus
are based on independent publications, reports by market research firms or other published independent sources. Some data are also based
on our good faith estimates, derived from our review of internal surveys and the independent sources listed above. Although we believe
these sources are reliable, we have not independently verified the information.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. We have not authorized any person to provide you with different or additional
information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer
to sell securities, and it is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously
filed with the SEC and incorporated by reference, is accurate as of the date on the front of those documents only. Our business, financial
condition, results of operations and prospects may have changed since those dates.
We may sell securities through underwriters or dealers, through agents,
directly to purchasers or through a combination of these methods. We and our agents reserve the sole right to accept or reject, in whole
or in part, any proposed purchase of securities. The prospectus supplement, which we will provide to you each time we offer securities,
will set forth the names of any underwriters, agents or others involved in the sale of securities and any applicable fee, commission or
discount arrangements with them. See the information described below under the heading “Plan of Distribution.”
THIS PROSPECTUS MAY NOT BE USED TO SELL ANY SECURITIES UNLESS
ACCOMPANIED BY THE APPLICABLE PROSPECTUS SUPPLEMENT.
This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should not assume
that the information in this prospectus or a prospectus supplement is accurate as of any date other than the date on the front of the
document.
Except as otherwise indicated by the context, references in this prospectus
to:
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The terms “we,” “us,” “our company,” “the Company,” “our” and “Recon” refer to Recon Technology, Ltd, a Cayman Islands exempted company; Recon Technology Co., Limited, a Hong Kong company; and Recon Technology (Jining) Co., Ltd., a PRC company.
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“Shares” and “ordinary shares” refer to our ordinary shares.
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“China” and “PRC” refer to the People’s Republic of China.
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all references to “RMB” and “¥” are to the legal currency of China and all references to “USD,” “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
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“BHD” refers to Beijing BHD Petroleum Technology Co., Ltd., a PRC company.
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“HH BHD” refers to Huang Hua BHD Petroleum Equipment Manufacturing Co., Ltd., a PRC company.
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“Gan Su BHD” refers to Gan Su BHD Environmental Technology Co. Ltd., a PRC company.
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“Qing Hai BHD” refers to Qing Hai BHD New Energy Technology Co. Ltd., a PRC company.
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“Nanjing Recon” refers to Nanjing Recon Technology Co., Ltd., a PRC company.
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For purpose of clarity, where the context requires us to differentiate
between the entities generally referred to collectively as “Recon”, and for purposes of this prospectus only:
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“Recon-CI” refers to Recon Technology, Ltd, a Cayman Islands exempted company.
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“Recon-HK” refers to Recon Technology Co., Limited, a Hong Kong company.
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“Recon-IN” refers to Recon Investments Ltd., a Hong Kong company.
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“Recon-BJ” refers to Recon Hengda Technology (Beijing) Co., Ltd., a PRC company.
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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS;
CAUTIONARY LANGUAGE
This prospectus, any applicable prospectus supplement, any related
free writing prospectus and any document incorporated by reference into this prospectus contain, or will contain, forward-looking statements
within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995,
or the PSLRA. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports
and other documents we file with the SEC or in connection with oral statements made to the press, potential investors or others. Forward-looking
statements include all statements that are not statements of historical facts and may relate to, but are not limited to, expectations
or estimates of future operating results or financial performance, capital expenditures, regulatory compliance, plans for growth and future
operations, as well as assumptions relating to the foregoing. In some cases, you can identify forward-looking statements by terminology
such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “intend,” “potential,” “continue”
or the negative of these terms or other similar terminology. Although we do not make forward-looking statements unless we believe we have
a reasonable basis for doing so, we cannot guarantee their accuracy, and actual results may differ materially from those we anticipated
due to a number of uncertainties, many of which cannot be foreseen. Our actual results could differ materially from those anticipated
in these forward-looking statements for many reasons, including, but not limited to, the risks and uncertainties described in the section
entitled “Risk Factors” in this prospectus, in any applicable prospectus supplement, any related free writing prospectus and
in any document incorporated by reference into this prospectus.
We believe that it is important to communicate our future expectations
to potential investors. However, there may be events in the future that we are not able to accurately predict or control and that may
cause actual events or results to differ materially from the expectations expressed in or implied by our forward-looking statements. The
risks and uncertainties described in the section entitled “Risk Factors” in this prospectus, in any applicable prospectus
supplement, any related free writing prospectus and in any document incorporated by reference into this prospectus provide examples of
risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our securities, you should be aware that the occurrence of these risks and uncertainties could negatively
impact, among other things, our business, cash flows, results of operations, financial condition and share price. Potential investors
should not place undue reliance on our forward-looking statements.
Forward-looking statements regarding our present plans or expectations
for sales, supply contracts, purchases, sources and availability of financing, and growth involve risks and uncertainties relative to
return expectations and related allocation of resources, and changing economic or competitive conditions, as well as the negotiation of
agreements with suppliers and customers, which could cause actual results to differ from present plans or expectations, and such differences
could be material. Similarly, forward-looking statements regarding our present expectations for operating results and cash flow involve
risks and uncertainties related to factors such as utilization rates, material prices, demand for products by our customers, supply and
other factors described in the section entitled “Risk Factors” in this prospectus, in any applicable prospectus supplement,
any related free writing prospectus and in any document incorporated by reference into this prospectus, which would also cause actual
results to differ from present plans. Such differences could be material.
All future written and oral forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred
to in this section. Forward-looking statements speak only as of the date the statements are made. New risks and uncertainties arise from
time to time, and we cannot predict those events or how they may affect us. We assume no obligation to, and do not plan to, update any
forward-looking statements as a result of new information, future events or developments, except as required by U.S. federal securities
laws. You should read this prospectus, any applicable prospectus supplement, any related free writing prospectus and any document incorporated
by reference into this prospectus with the understanding that we cannot guarantee future results, levels of activity, performance or achievements
and that actual results may differ materially from what we expect. The forward-looking statements contained in this prospectus, any applicable
prospectus supplement, any related free writing prospectus and any document incorporated by reference into this prospectus are excluded
from the safe harbor protection provided by the PSLRA.
OUR COMPANY
We are a provider of hardware, software, and on-site services to companies
in the petroleum mining and extraction industry in China (“PRC”). We provide services designed to automate and enhance the
extraction of petroleum. To this end, we control by contract the PRC companies of BHD and Nanjing Recon (collectively, the “Domestic
Companies”).
We believe that one of the most important advancements in China’s
petroleum industry has been the automation of significant segments of the exploration and extraction process. The Domestic Companies’
and our automation products and services allow petroleum mining and extraction companies to reduce their labor requirements and improve
the productivity of oilfields. The Domestic Companies’ and our solutions allow our customers to locate productive oilfields more
easily and accurately, improve control over the extraction process, increase oil yield efficiency in tertiary stage oil recovery, and
improve the transportation of crude oil.
Our principal executive offices are located at Room 1902, Building
C, King Long International Mansion, No. 9 Fulin Road, Beijing, 100107, People’s Republic of China. Our telephone number at
this address is +86 (10)8494-5799. Our ordinary shares are traded on the NASDAQ Capital Market under the symbol “RCON.”
Our Internet website, www.recon.cn, provides a variety of information
about our Company. We do not incorporate by reference into this prospectus the information on, or accessible through, our website, and
you should not consider it as part of this prospectus. Our annual reports on Form 20-F and current reports on Form 6-K filed
with the United States Securities and Exchange Commission (the “SEC”) are available, as soon as practicable after filing,
at the investors’ page on our corporate website, or by a direct link to its filings on the SEC’s free website.
GENERAL DESCRIPTION OF THE SECURITIES WE MAY OFFER
We may offer our ordinary shares, share purchase contracts, share purchase
units, warrants, debt securities, rights or units, with a total value of up to $50,000,000 from time to time under this prospectus at
prices and on terms to be determined by our board of directors and based on market conditions at the time of any offering. This prospectus
provides you with a general description of the securities we may offer. Each time we offer a type or series of securities under this prospectus,
we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities, including,
to the extent applicable:
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Designation or classification;
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Rates and times of payment of dividends, if any;
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Redemption, conversion, exercise and exchange terms, if any;
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Conversion prices, if any; and
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Material U.S. federal income tax considerations.
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The prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you may also add, update or change information contained in this prospectus or in documents we have
incorporated by reference. However, no prospectus supplement or free writing prospectus will offer a security that is not registered and
described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.
RISK FACTORS
Before making an investment decision, you should carefully consider
the risks described under “Risk Factors” in the applicable prospectus supplement and in our then most recent Annual Report
on Form 20-F, or included in any Annual Report on Form 20-F filed with the SEC after the date of this prospectus or Reports
on Form 6-K furnished to the SEC after the date of this prospectus, together with all of the other information appearing in this
prospectus or incorporated by reference into this prospectus and any applicable prospectus supplement, in light of your particular investment
objectives and financial circumstances. Please see “Where You Can Find More Information” on how you can view our SEC reports
and other filings. Our business, financial condition or results of operations could be materially adversely affected by any of these risks.
The trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment. When we
offer and sell any securities pursuant to a prospectus supplement, we may include additional risk factors that you should carefully consider.
The risks and uncertainties described in this prospectus, any applicable
prospectus supplement, any related free writing prospectus and any document incorporated by reference into this prospectus are not the
only ones that we face. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material
may also adversely affect our business. If any of the risks and uncertainties described in this prospectus, any applicable prospectus
supplement, any related free writing prospectus and any document incorporated by reference into this prospectus actually occur, our business,
financial condition and results of operations could be materially and adversely affected. The value of our securities could decline and
you may lose some or all of your investment if one or more of these risks and uncertainties develop into actual events. Keep these risk
factors in mind when you read forward-looking statements contained in this prospectus, any applicable prospectus supplement, any related
free writing prospectus and any document incorporated by reference into this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the five (5) most
recently completed fiscal years and any required interim periods will each be specified in a prospectus supplement or in a document we
file with the SEC and incorporate by reference pertaining to the issuance, if any, by us of debt securities in the future.
USE OF PROCEEDS
Unless otherwise set forth in the applicable prospectus supplement,
we intend to use the net proceeds of any offering of securities for working capital and other general corporate purposes, which may include
the repayment or refinancing of outstanding indebtedness and the financing of future acquisitions. We may have significant discretion
in the use of any net proceeds. The net proceeds may be invested temporarily in interest-bearing accounts and short-term interest-bearing
securities until they are used for their stated purpose. We may provide additional information on the use of the net proceeds from the
sale of the offered securities in an applicable prospectus supplement relating to the offered securities.
DESCRIPTION OF SHARE CAPITAL
We (Recon Technology, Ltd) are a Cayman Islands exempted company with
limited liability duly registered with the Cayman Islands Registrar of Companies. Our affairs are governed by our Second Amended and Restated
Memorandum and Articles of Association, the Companies Law (as revised) of the Cayman Islands, which is referred to as the Companies Law
below, and the laws of the Cayman Islands. Our corporate purposes are unrestricted and we have the authority to carry out any object not
prohibited by any law as provided by Section 7(4) of the Companies Law.
Our authorized share capital consists of 100,000,000 ordinary shares,
par value $0.0185 per share. As of the date of this prospectus, 23,049,639 ordinary shares are issued and outstanding. We have issued
and outstanding 622,600 options from our share option pool.
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.
Limitations on the Right to Own Shares
There are no limitations on the right to own our shares.
Changes in Capital
We may from time to time by ordinary resolution increase the share
capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe. An ordinary resolution is a resolution
that must be approved by holders of a majority of outstanding voting shares to become effective. The new shares shall be subject to the
same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the shares in the original
share capital. We may by ordinary resolution:
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consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;
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in many circumstances, sub-divide our existing shares, or any of them, into shares of smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share form which the reduced share is derived; and
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cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.
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We may by ordinary resolution reduce our authorized but unissued share
capital.
We may by Special Resolution and subject to the provisions of Cayman
Islands law, carry out a capital reduction. Our Articles of Association provide that a Special Resolution is also required to reduce any
capital redemption reserve fund. A special resolution is a resolution that must be approved by holders of more than two-thirds (2/3) of
the outstanding voting shares to become effective, provided, however a company’s Articles of Association may impose a higher threshold.
Our Articles of Association require that Special Resolutions receive at least two-thirds (2/3) approval.
Corporation Governance
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We have adopted NASDAQ-mandated corporate governance measures, including a Board of Directors comprised of a majority of independent directors. We have established an Audit Committee, a Nominating Committee and a Compensation Committee, and each committee is comprised solely of independent directors. We have also adopted a Code of Ethics and have taken other steps to ensure proper corporate governance.
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Under Cayman Islands law, our Directors have a fiduciary duty to the Company. They have to act in good faith in their dealings with or on behalf of our company and exercise their powers and fulfill the duties of their office honestly. These duties have four essential elements: (i) a duty to act in good faith in the best interests of the Company; (ii) a duty not to personally profit from opportunities that arise from the office of director; (iii) a duty to avoid conflicts of interest; and (iv) a duty to exercise the powers of a director for the purpose for which such powers were intended.
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Cayman Islands law and our Articles of Association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
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Cayman Islands law and our Articles of Association allow our shareholders holding not less than ten percent (10%) of the paid up voting share capital of the Company to requisition a shareholder’s meeting. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings. However, our Articles of Association require us to call such meetings.
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Under our Articles of Association, directors can be removed with cause or by the vote of holders of a two thirds majority of our shares, cast at a general meeting, or the unanimous written resolution of all shareholders.
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All material related party transaction must be approved by our board of directors. Such material related party transactions must shall be made or entered into on bona fide terms in the best interests of the Company and not with the effect of constituting a fraud on the minority shareholders.
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Under the Companies Law of the Cayman Islands and our Articles of Association, our company may be voluntarily dissolved, liquidated or wound up only by the vote of holders of two-thirds of our shares voting at a meeting or by ordinary resolutions at a meeting if the Company is no longer able to pay its debts as they fall due or in each case by the unanimous written resolution of all shareholders. In addition, our company may be wound up by the Grand Court of the Cayman Islands if the Company is unable to pay its debts or if the court is of the opinion that it is just and equitable that our company be wound up.
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Our Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from fraud, willful neglect or default of such directors or officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable as a matter of United States law.
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There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.
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Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or corporate records except our Memorandum and Articles of Association. However, we will provide our shareholders with annual audited consolidated financial statements.
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Anti-takeover Effects
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Our board of directors is divided into three (3) classes of directors. The current terms of the directors expire in 2019, 2020 and 2021. 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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As permitted under Cayman Islands law, our Articles of Association do not provide for cumulative voting.
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A plan of merger or consolidation must be approved by (i) a shareholder resolution of each constituent company by a special resolution (being a 2/3rd majority).
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When a take-over offer is made and accepted (within four (4) months) by holders of not less than 90% of the shares affected, the offeror may, within a two (2) month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith or collusion. If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights.
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Under Cayman Islands law and our Articles of Association, if at any time the share capital is divided into more than one class of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of the shareholders of 2/3rd (2/3) of the issued shares of that class or with the sanction of a resolution passed by not less than two thirds (2/3) of such holders of the shares of that class.
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As permitted by Cayman Islands law, our Memorandum and Articles of Association may only be amended with the vote of holders of two-thirds (2/3) of our shares voting at a meeting or the unanimous written resolution of all shareholders.
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Stock Option Plan
As of the date of this prospectus, there were outstanding options to
purchase 622,600 of ordinary shares issued out of our share option pool.
Listing
Our ordinary shares are listed on the Nasdaq Capital Market under the
trading symbol “RCON”.
Transfer Agent and Registrar
The transfer agent and registrar for our ordinary shares is VStock
Transfer, LLC located in 18 Lafayette Place, Woodmere, New York 11598 U.S. Our transfer agent’s phone number is +1-(212) 828-8436.
DESCRIPTION OF DEBT SECURITIES
As used in this prospectus, debt securities mean the debentures, notes,
bonds and other evidences of indebtedness that we may issue from time to time. The debt securities may be either secured or unsecured
and will either be senior debt securities or subordinated debt securities. The debt securities will be issued under one or more separate
indentures between us and a trustee to be specified in an accompanying prospectus supplement. Senior debt securities will be issued under
a new senior indenture. Subordinated debt securities will be issued under a subordinated indenture. Together, the senior indentures and
the subordinated indentures are sometimes referred to in this prospectus as the indentures. This prospectus, together with the applicable
prospectus supplement, will describe the terms of a particular series of debt securities.
The statements and descriptions in this prospectus or in any prospectus
supplement regarding provisions of the indentures and debt securities are summaries thereof, do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the provisions of the indentures (and any amendments or supplements we
may enter into from time to time which are permitted under each indenture) and the debt securities, including the definitions therein
of certain terms.
General
Unless otherwise specified in a prospectus supplement, the debt securities
will be direct unsecured obligations of the Recon Technology, Ltd. The senior debt securities will rank equally with any of our other
senior and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right of payment to any senior indebtedness.
Unless otherwise specified in a prospectus supplement, the indentures
do not limit the aggregate principal amount of debt securities that we may issue and provide that we may issue debt securities from time
to time at par or at a discount, and in the case of the new indentures, if any, in one or more series, with the same or various maturities.
Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the
holders of the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together with
all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable indenture.
Each prospectus supplement will describe the terms relating to the
specific series of debt securities being offered. These terms will include some or all of the following:
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the title of the debt securities and whether they are subordinated debt securities or senior debt securities;
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any limit on the aggregate principal amount of the debt securities;
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the ability to issue additional debt securities of the same series;
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the price or prices at which we will sell the debt securities;
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the maturity date or dates of the debt securities on which principal will be payable;
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the rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method of determining such rate or rates, if any;
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the date or dates from which any interest will accrue or the method by which such date or dates will be determined;
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the right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive period during which interest payment periods may be extended;
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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more
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currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments;
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the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date;
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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the indenture;
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if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
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our obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation;
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the denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000;
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the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal amount;
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the currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt securities, if not United States dollars;
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
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any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture;
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any limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions;
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the application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities;
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whether the subordination provisions summarized below or different subordination provisions will apply to the debt securities;
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the terms, if any, upon which the holders may convert or exchange the debt securities into or for our ordinary shares or other securities or property;
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whether any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may be exchanged for certificated debt securities;
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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default;
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the depository for global or certificated debt securities;
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any special tax implications of the debt securities;
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any Cayman Islands tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
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any trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities;
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any other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented;
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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable indenture;
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if the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);
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the portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and
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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined).
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Unless otherwise specified in the applicable prospectus supplement,
the debt securities will not be listed on any securities exchange and will be issued in fully-registered form without coupons.
Debt securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. The applicable prospectus
supplement will describe the federal income tax consequences and special considerations applicable to any such debt securities. The debt
securities may also be issued as indexed securities or securities denominated in foreign currencies, currency units or composite currencies,
as described in more detail in the prospectus supplement relating to any of the particular debt securities. The prospectus supplement
relating to specific debt securities will also describe any special considerations and certain additional tax considerations applicable
to such debt securities.
Subordination
The prospectus supplement relating to any offering of subordinated
debt securities will describe the specific subordination provisions. However, unless otherwise noted in the prospectus supplement, subordinated
debt securities will be subordinate and junior in right of payment to any existing senior indebtedness.
Unless otherwise specified in the applicable prospectus supplement,
under the subordinated indenture, “senior indebtedness” means all amounts due on obligations in connection with any of the
following, whether outstanding at the date of execution of the subordinated indenture, or thereafter incurred or created:
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the principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
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all of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions;
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all obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors;
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all of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity prices;
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all obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor or otherwise; and
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all obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not such obligation is assumed by us).
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However, senior indebtedness does not include:
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any indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities, or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that such indebtedness shall be senior in right of payment to the subordinated debt securities;
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any of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries;
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any liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor,
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any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities);
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any obligations with respect to any capital stock;
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any indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and
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any of our indebtedness in respect of the subordinated debt securities.
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Senior indebtedness shall continue to be senior indebtedness and be
entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such senior
indebtedness.
Unless otherwise noted in an accompanying prospectus supplement, if
we default in the payment of any principal of (or premium, if any) or interest on any senior indebtedness when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, unless and until such default is cured or
waived or ceases to exist, we will make no direct or indirect payment (in cash, property, securities, by set-off or otherwise) in respect
of the principal of or interest on the subordinated debt securities or in respect of any redemption, retirement, purchase or other requisition
of any of the subordinated debt securities.
In the event of the acceleration of the maturity of any subordinated
debt securities, the holders of all senior debt securities outstanding at the time of such acceleration, subject to any security interest,
will first be entitled to receive payment in full of all amounts due on the senior debt securities before the holders of the subordinated
debt securities will be entitled to receive any payment of principal (and premium, if any) or interest on the subordinated debt securities.
If any of the following events occurs, we will pay in full all senior
indebtedness before we make any payment or distribution under the subordinated debt securities, whether in cash, securities or other property,
to any holder of subordinated debt securities:
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any dissolution or winding-up or liquidation or reorganization of Recon Technology, Ltd, whether voluntary or involuntary or in bankruptcy;
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insolvency or receivership;
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any general assignment by us for the benefit of creditors; or
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any other marshaling of our assets or liabilities.
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In such event, any payment or distribution under the subordinated debt
securities, whether in cash, securities or other property, which would otherwise (but for the subordination provisions) be payable or
deliverable in respect of the subordinated debt securities, will be paid or delivered directly to the holders of senior indebtedness in
accordance with the priorities then existing among such holders until all senior indebtedness has been paid in full. If any payment or
distribution under the subordinated debt securities is received by the trustee of any subordinated debt securities in contravention of
any of the terms of the subordinated indenture and before all the senior indebtedness has been paid in full, such payment or distribution
will be received in trust for the benefit of, and paid over or delivered and transferred to, the holders of the senior indebtedness at
the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all senior indebtedness
remaining unpaid to the extent necessary to pay all such senior indebtedness in full.
The subordinated indenture does not limit the issuance of additional
senior indebtedness.
Events of Default, Notice and Waiver
Unless an accompanying prospectus supplement states otherwise, the
following shall constitute “events of default” under the indentures with respect to each series of debt securities:
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we default for 30 consecutive days in the payment when due of interest on the debt securities;
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we default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt securities;
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our failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we receive notice of such failure;
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certain events of bankruptcy, insolvency or reorganization of the Recon Technology, Ltd; or
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any other event of default provided with respect to securities of that series.
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Unless an accompanying prospectus supplement states otherwise, if an
event of default with respect to any debt securities of any series outstanding under either of the indentures shall occur and be continuing,
the trustee under such indenture or the holders of at least 25% (or at least 10%, in respect of a remedy (other than acceleration) for
certain events of default relating to the payment of dividends) in aggregate principal amount of the debt securities of that series outstanding
may declare, by notice as provided in the applicable indenture, the principal amount (or such lesser amount as may be provided for in
the debt securities of that series) of all the debt securities of that series outstanding to be due and payable immediately; provided
that, in the case of an event of default involving certain events in bankruptcy, insolvency or reorganization, acceleration is automatic;
and, provided further, that after such acceleration, but before a judgment or decree based on acceleration, the holders of a majority
in aggregate principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul such
acceleration if all events of default, other than the nonpayment of accelerated principal, have been cured or waived. Upon the acceleration
of the maturity of original issue discount securities, an amount less than the principal amount thereof will become due and payable. Reference
is made to the prospectus supplement relating to any original issue discount securities for the particular provisions relating to acceleration
of maturity thereof.
Any past default under either indenture with respect to debt securities
of any series, and any event of default arising therefrom, may be waived by the holders of a majority in principal amount of all debt
securities of such series outstanding under such indenture, except in the case of (1) default in the payment of the principal of
(or premium, if any) or interest on any debt securities of such series or (2) certain events of default relating to the payment of
dividends.
The trustee is required within 90 days after the occurrence of a default
(which is known to the trustee and is continuing), with respect to the debt securities of any series (without regard to any grace period
or notice requirements), to give to the holders of the debt securities of such series notice of such default.
The trustee, subject to its duties during default to act with the required
standard of care, may require indemnification by the holders of the debt securities of any series with respect to which a default has
occurred before proceeding to exercise any right or power under the indentures at the request of the holders of the debt securities of
such series. Subject to such right of indemnification and to certain other limitations, the holders of a majority in principal amount
of the outstanding debt securities of any series under either indenture may direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any trust or power conferred on the trustee with respect to the debt securities
of such series, provided that such direction shall not be in conflict with any rule of law or with the applicable indenture and the
trustee may take any other action deemed proper by the trustee which is not inconsistent with such direction.
No holder of a debt security of any series may institute any action
against us under either of the indentures (except actions for payment of overdue principal of (and premium, if any) or interest on such
debt security or for the conversion or exchange of such debt security in accordance with its terms) unless (1) the holder has given
to the trustee written notice of an event of default and of the continuance thereof with respect to the debt securities of such series
specifying an event of default, as required under the applicable indenture, (2) the holders of at least 25% in aggregate principal
amount of the debt securities of that series then outstanding under such indenture shall have requested the trustee to institute such
action and offered to the trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in
compliance with such request; (3) the trustee shall not have instituted such action within 60 days of such request and (4) no
direction inconsistent with such written request has been given to the trustee during such 60-day period by the holders of a majority
in principal amount of the debt securities of that series. We are required to furnish annually to the trustee statements as to our compliance
with all conditions and covenants under each indenture.
Discharge, Defeasance and Covenant Defeasance
We may discharge or defease our obligations under the indenture as
set forth below, unless otherwise indicated in the applicable prospectus supplement.
We may discharge certain obligations to holders of any series of debt
securities issued under either the senior indenture or the subordinated indenture which have not already been delivered to the trustee
for cancellation by irrevocably depositing with the trustee money in an amount sufficient to pay and discharge the entire indebtedness
on such debt securities not previously delivered to the trustee for cancellation, for principal and any premium and interest to the date
of such deposit (in the case of debt securities which have become due and payable) or to the stated maturity or redemption date, as the
case may be, and we or, if applicable, any guarantor, have paid all other sums payable under the applicable indenture.
If indicated in the applicable prospectus supplement, we may elect
either (1) to defease and be discharged from any and all obligations with respect to the debt securities of or within any series
(except in all cases as otherwise provided in the relevant indenture) (“legal defeasance”) or (2) to be released from
our obligations with respect to certain covenants applicable to the debt securities of or within any series (“covenant defeasance”),
upon the deposit with the relevant indenture trustee, in trust for such purpose, of money and/or government obligations which through
the payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of
(and premium, if any) or interest on such debt securities to maturity or redemption, as the case may be, and any mandatory sinking fund
or analogous payments thereon. As a condition to legal defeasance or covenant defeasance, we must deliver to the trustee an opinion of
counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes
as a result of such legal defeasance or covenant defeasance and will be subject to federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such legal defeasance or covenant defeasance had not occurred. Such opinion
of counsel, in the case of legal defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax law occurring after the date of the relevant indenture. In addition, in the case
of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if applicable, an officer’s certificate
to the effect that the relevant debt securities exchange(s) have informed us that neither such debt securities nor any other debt
securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit and (2) an
officer’s certificate and an opinion of counsel, each stating that all conditions precedent with respect to such legal defeasance
or covenant defeasance have been complied with.
We may exercise our defeasance option with respect to such debt securities
notwithstanding our prior exercise of our covenant defeasance option.
Modification and Waiver
Under the indentures, unless an accompanying prospectus supplement
states otherwise, we and the applicable trustee may supplement the indentures for certain purposes which would not materially adversely
affect the interests or rights of the holders of debt securities of a series without the consent of those holders. We and the applicable
trustee may also modify the indentures or any supplemental indenture in a manner that affects the interests or rights of the holders of
debt securities with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities
of each affected series issued under the indenture. However, the indentures require the consent of each holder of debt securities that
would be affected by any modification which would:
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reduce the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver;
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reduce the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or waive any of the provisions with respect to the redemption of the debt securities;
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reduce the rate of or change the time for payment of interest, including default interest, on any debt security;
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waive a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities and a waiver of the payment default that resulted from such acceleration);
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make any debt security payable in money other than that stated in the debt securities;
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make any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt securities to receive payments of principal of, or interest or premium, if any, on, the debt securities;
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waive a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement);
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except in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests;
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make any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights of any holder; or
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make any change in the preceding amendment and waiver provisions.
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The indentures permit the holders of at least a majority in aggregate
principal amount of the outstanding debt securities of any series issued under the indenture which is affected by the modification or
amendment to waive our compliance with certain covenants contained in the indentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement,
payment of interest on a debt security on any interest payment date will be made to the person in whose name a debt security is registered
at the close of business on the record date for the interest.
Unless otherwise indicated in the applicable prospectus supplement,
principal, interest and premium on the debt securities of a particular series will be payable at the office of such paying agent or paying
agents as we may designate for such purpose from time to time. Notwithstanding the foregoing, at our option, payment of any interest may
be made by check mailed to the address of the person entitled thereto as such address appears in the security register.
Unless otherwise indicated in the applicable prospectus supplement,
a paying agent designated by us will act as paying agent for payments with respect to debt securities of each series. All paying agents
initially designated by us for the debt securities of a particular series will be named in the applicable prospectus supplement. We may
at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through
which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment for the debt securities
of a particular series.
All moneys paid by us to a paying agent for the payment of the principal,
interest or premium on any debt security which remain unclaimed at the end of two years after such principal, interest or premium has
become due and payable will be repaid to us upon request, and the holder of such debt security thereafter may look only to us for payment
thereof.
Denominations, Registrations and Transfer
Unless an accompanying prospectus supplement states otherwise, debt
securities will be represented by one or more global certificates registered in the name of a nominee for The Depository Trust Company,
or DTC. In such case, each holder’s beneficial interest in the global securities will be shown on the records of DTC and transfers
of beneficial interests will only be effected through DTC’s records.
A holder of debt securities may only exchange a beneficial interest
in a global security for certificated securities registered in the holder’s name if:
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we deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days after the date of such notice from DTC;
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we in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities and deliver a written notice to such effect to the trustee; or
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there has occurred and is continuing a default or event of default with respect to the debt securities.
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If debt securities are issued in certificated form, they will only
be issued in the minimum denomination specified in the accompanying prospectus supplement and integral multiples of such denomination.
Transfers and exchanges of such debt securities will only be permitted in such minimum denomination. Transfers of debt securities in certificated
form may be registered at the trustee’s corporate office or at the offices of any paying agent or trustee appointed by us under
the indentures. Exchanges of debt securities for an equal aggregate principal amount of debt securities in different denominations may
also be made at such locations.
Governing Law
The indentures and debt securities will be governed by, and construed
in accordance with, the laws of the State of Delaware, without regard to its principles of conflicts of laws, except to the extent the
Trust Indenture Act is applicable or as otherwise agreed to by the parties thereto.
Trustee
The trustee or trustees under the indentures will be named in any applicable
prospectus supplement.
Conversion or Exchange Rights
The prospectus supplement will describe the terms, if any, on which
a series of debt securities may be convertible into or exchangeable for our ordinary shares or other debt securities. These terms will
include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. These provisions may
allow or require the number of shares of our ordinary shares or other securities to be received by the holders of such series of debt
securities to be adjusted. Any such conversion or exchange will comply with applicable Cayman Islands law and our Articles of Association.
DESCRIPTION OF WARRANTS
The following description, together with the additional information
we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that we may offer
under this prospectus and the related warrant agreements and warrant certificates. While the terms summarized below will apply generally
to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants that we may offer
in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any warrants offered
under that prospectus supplement may differ from the terms described below. However, no prospectus supplement shall fundamentally change
the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time
of its effectiveness. Specific warrant agreements will contain additional important terms and provisions and will be incorporated by reference
as an exhibit to the registration statement that includes this prospectus or as an exhibit to a report filed under the Exchange Act.
General
We may issue warrants that entitle the holder to purchase our debt
securities, ordinary shares or any combination thereof. We may issue warrants independently or together with ordinary shares, debt securities
or any combination thereof, and the warrants may be attached to or separate from such securities.
We will describe in the applicable prospectus supplement the terms
of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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the currency for which the warrants may be purchased, if not United States dollars;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased upon such exercise;
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in the case of warrants to purchase ordinary shares, the number of shares of ordinary shares purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire;
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the manner in which the warrant agreement and warrants may be modified;
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federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants; and
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before exercising their warrants, holders of warrants will not have
any of the rights of holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
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in the case of warrants to purchase ordinary shares, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
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Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that
we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless
we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the
specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration
date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the
warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the
warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side
of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required
to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate properly
completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus
supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by
the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate
in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single bank
or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility in
case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings
at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related warrant agent or the
holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities purchasable upon exercise
of, its warrants.
Modification of the Warrant Agreement
The warrant agreements may permit us and the warrant agent, if any,
without the consent of the warrant holders, to supplement or amend the agreement in the following circumstances:
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to cure any ambiguity;
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to correct or supplement any provision which may be defective or inconsistent with any other provisions; or
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to add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do not adversely affect the interests of the warrant holders.
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DESCRIPTION OF UNITS
We may issue units comprised of one or more of the other securities
described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit
agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately,
at any time or at any time before a specified date or occurrence.
The applicable prospectus supplement may describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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The applicable prospectus supplement will describe the terms of any
units. The preceding description and any description of units in the applicable prospectus supplement does not purport to be complete
and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements and
depository arrangements relating to such units.
DESCRIPTION OF SHARE PURCHASE CONTRACTS AND
SHARE PURCHASE UNITS
We may issue share purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to the holders, a specified number of shares of ordinary shares or other securities
registered hereunder at a future date or dates, which we refer to in this prospectus as “share purchase contracts.” The price
per share of the securities and the number of shares of the securities may be fixed at the time the share purchase contracts are issued
or may be determined by reference to a specific formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately or as part of
units consisting of a share purchase contract and debt securities, warrants, other securities registered hereunder or debt obligations
of third parties, including U.S. treasury securities, securing the holders’ obligations to purchase the securities under the share
purchase contracts, which we refer to herein as “share purchase units.” The share purchase contracts may require holders to
secure their obligations under the share purchase contracts in a specified manner. The share purchase contracts also may require us to
make periodic payments to the holders of the share purchase units or vice versa, and those payments may be unsecured or refunded on some
basis.
The share purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to the share purchase contracts or share purchase units, will be filed with the SEC in connection with the offering
of share purchase contracts or share purchase units. The prospectus supplement relating to a particular issue of share purchase contracts
or share purchase units will describe the terms of those share purchase contracts or share purchase units, including the following:
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if applicable, a discussion of material tax considerations; and
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any other information we think is important about the share purchase contracts or the share purchase units.
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DESCRIPTION OF RIGHTS
We may issue rights to purchase ordinary shares, preferred shares,
depositary shares or debt securities that we may offer to our security holders. The rights may or may not be transferable by the persons
purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement
with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities
remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to
be entered into between us and a bank or trust company, as rights agent, that we will name in the applicable prospectus supplement. The
rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or
trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights that we offer will
include specific terms relating to the offering, including, among other matters:
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the date of determining the security holders entitled to the rights distribution;
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the aggregate number of rights issued and the aggregate number of shares of ordinary shares, preferred shares, or depositary shares or aggregate principal amount of debt securities purchasable upon exercise of the rights;
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the conditions to completion of the rights offering;
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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applicable tax considerations.
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Each right would entitle the holder of the rights to purchase for cash
the principal amount of shares of ordinary shares, preferred shares, depositary shares or debt securities at the exercise price set forth
in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the
rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will
become void.
If less than all of the rights issued in any rights offering are exercised,
we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents, underwriters or dealers
or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
PLAN OF DISTRIBUTION
We may sell the securities described in this prospectus through underwriters
or dealers, through agents, or directly to one or more purchasers or through a combination of these methods. The applicable prospectus
supplement will describe the terms of the offering of the securities, including:
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the name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased by each of them, if any;
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the public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any discounts or concessions allowed or re-allowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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We may distribute the securities from time to time in one or more transactions
at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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varying prices determined at the time of sale related to such prevailing market prices; or
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negotiated prices.
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Only underwriters named in the prospectus supplement will be underwriters
of the securities offered by the prospectus supplement.
If we use underwriters in the sale, the underwriters will either acquire
the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public offering
price or at varying prices determined at the time of sale, or sell the Shares on a “best efforts, minimum/maximum basis” when
the underwriters agree to do their best to sell the securities to the public. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a syndicate. Any public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the securities being offered pursuant
to this prospectus or any prospectus supplement, the securities will be sold directly to the dealer, as principal. The dealer may then
resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
Shares of our ordinary shares are quoted on the Nasdaq Capital Market.
Unless otherwise specified in the related prospectus supplement, all securities we offer, other than ordinary shares, will be new issues
of securities with no established trading market. Any underwriter may make a market in these securities, but will not be obligated to
do so and may discontinue any market making at any time without notice. We may apply to list any series of warrants or other securities
that we offer on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity or a trading market for any series
of securities.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we may
pay the agent in the applicable prospectus supplement.
We may authorize agents or underwriters to solicit offers by institutional
investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and
the commissions we must pay for solicitation of these contracts in the applicable prospectus supplement.
In connection with the sale of the securities, underwriters, dealers
or agents may receive compensation from us or from purchasers of the securities for whom they act as agents in the form of discounts,
concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors or others that
purchase securities directly and then resell the securities, may be deemed to be underwriters, and any discounts or commissions received
by them from us and any profit on the resale of the securities by them may be deemed to be underwriting discounts and commissions under
the Securities Act.
We may provide agents and underwriters with indemnification against
particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents
or underwriters may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services
for, us in the ordinary course of business.
In addition, we may enter into derivative transactions with third parties
(including the writing of options), or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties may, pursuant to this prospectus
and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so,
the third party may use securities borrowed from us or others to settle such sales and may use securities received from us to close out
any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement
to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant
to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will be an underwriter and will
be identified in the applicable prospectus supplement or in a post-effective amendment.
To facilitate an offering of a series of securities, persons participating
in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the securities. This may
include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities
than have been sold to them by us. In those circumstances, such persons would cover such over-allotments or short positions by purchasing
in the open market or by exercising the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain
the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions
allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection
with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at
a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.
We make no representation or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented,
may have on the price of our securities.
LEGAL MATTERS
Certain legal matters with respect to United States federal securities
law will be passed upon for us by Kaufman & Canoles, P.C. Certain legal matters with respect to Cayman Islands law, including
the validity of the ordinary shares, will be passed upon for us by Campbells. Kaufman & Canoles, P.C. may rely upon Campbells
with respect to matters governed by Cayman Islands law.
Additional legal matters may be passed on for us, or any underwriters,
dealers or agents, by counsel that we will name in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of our Company appearing in our
annual report on Form 20-F for the years ended June 30, 2020, 2019 and 2018 have been audited by Friedman LLP, independent registered
public accounting firm, as set forth in the reports thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference
in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.
ENFORCEABILITY OF CIVIL LIABILITIES
UNDER UNITED STATES FEDERAL SECURITIES LAWS AND OTHER MATTERS
We are registered under the laws of the Cayman Islands as an exempted
company with limited liability. We are registered in the Cayman Islands because of certain benefits associated with being a Cayman Islands
exempted company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange
control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed
body of securities laws as compared to the United States and provides protections for investors to a lesser extent. In addition, Cayman
Islands companies may not have standing to sue before the federal courts of the United States.
Substantially all of our assets are located outside the United States.
In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all
or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors
to effect service of process within the United States upon us or such persons or to enforce against them or against us, judgments obtained
in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States
or any state thereof.
We have appointed C T Corporation System (28 Liberty St. New York,
NY 10005) as our agent to receive service of process with respect to any action brought against us in the United States District Court
for the Southern District of New York under the federal securities laws of the United States or under the securities laws of the State
of New York.
We have been advised by Campbells, our counsel as to Cayman Islands
law, that the United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments
of courts of the United States in civil and commercial matters and that a final judgment for the payment of money rendered by any general
or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws,
is unlikely to be enforceable in the Cayman Islands. We have also been advised by Campbells that a final and conclusive judgment obtained
in U.S. federal or state courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed by a revenue
authority for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or
punitive damages) may be the subject of an action on a debt in the court of the Cayman Islands under the common law doctrine of obligation.
A Cayman Islands court may impose civil liability on us or our directors or officers in a suit brought in the Cayman Islands against us
or these persons with respect to a violation of U.S. federal securities laws, provided that the facts surrounding any violation constitute
or give rise to a cause of action under Cayman Islands law.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that
in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the SEC. This prospectus does not contain all of the information set forth in the registration
statement or the exhibits that are a part of the registration statement. You may read and copy the registration statement and any document
we file with the SEC at the public reference room maintained by the SEC 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. Our filings with the SEC are also available
to the public through the SEC’s Internet site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” into this
prospectus the information we file with them. The information we incorporate by reference into this prospectus is an important part of
this prospectus. Any statement in a document we have filed with the SEC prior to the date of this prospectus and which is incorporated
by reference into this prospectus will be considered to be modified or superseded to the extent a statement contained in this prospectus
or any other subsequently filed document that is incorporated by reference into this prospectus modifies or supersedes that statement.
The modified or superseded statement will not be considered to be a part of this prospectus, except as modified or superseded.
We incorporate by reference into this prospectus the information contained
in the following documents that we have filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), which is considered to be a part of this prospectus:
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Our report on Form 6-K furnished to the SEC on November 5, 2019;
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Our Annual Report on Form 20-F for the year ended June 30, 2019, filed on October 1, 2019;
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All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Annual Report on Form 20-F referred to in the paragraph above; and
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The description of the ordinary shares, $0.0185 par
value per share, contained in the Registrant’s registration statement on Form S-1 filed with the Commission on May 5, 2010 (File Number 333-166540) pursuant to Section 12(b) of the Exchange Act, which incorporates by reference
the description of the ordinary shares, $0.0185 par value per share, contained in the registration statement on Form S-1 filed
with the Commission on August 12, 2008 (File
Number 333-152964) and declared effective by the Commission on July 22, 2009, and any amendment or report filed with the Commission
for purposes of updating such description.
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All documents that we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement (that indicates that all securities offered have been sold or that deregisters all securities
then remaining unsold) shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date
of filing of such documents.
We also incorporate by reference all additional documents that we file
with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that are filed after the effective date of the
registration statement of which this prospectus is a part and prior to the termination of the offering of securities offered pursuant
to this prospectus. We also incorporate by reference all additional documents that we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act that are filed after the filing date of the registration statement of which this prospectus
is a part and prior to effectiveness of that registration statement. We are not, however, incorporating, in each case, any documents or
information that we are deemed to “furnish” and not file in accordance with SEC rules.
You may obtain a copy of these filings, without
charge, by writing or calling us at:
Recon Technology, Ltd
Room 601, 1 Shui’an South Street
Chaoyang District, Beijing, 100012
People’s Republic of China
Attn: Investor Relations
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