RCON

BEIJING, March 13, 2026 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for the first six months of fiscal year 2026. First Six Months of Fiscal 2026 Financial Highlights: Total revenue increased to RMB85.0 million ($12.2 million) for the six months ended December 31, 2025, from RMB42.0 million ($5.8 million) for the same period in 2024. Gross profit increased to RMB28.5 million ($4.1 million) for the six months ended December 31, 2025, from RMB13.4 million ($1.9 million) for the same period in 2024. Gross margin increased to 33.5% for the six months ended December 31, 2025 from 31.7% for the same period in 2024. Net loss was RMB7.2 million ($1.0 million) for the six months ended December 31, 2025, a decrease of RMB13.5 million ($1.9 million) from net loss of RMB20.7 million ($3.0 million) for the same period of 2024. Management Commentary Mr. Shenping Yin, Founder and CEO of Recon, stated: "We are encouraged by the significant progress the Company has made during the first half of fiscal year 2026. For the six months ended December 31, 2025, Recon's core business remained stable and achieved substantial growth, primarily driven by the successful execution of overseas oilfield projects and the recovery of domestic oilfield production activities. Furthermore, Recon remains committed to diversifying its revenue streams and seizing opportunities in the circular economy. The Company's plastic chemical recycling project, launched in 2023, continues to progress on schedule. The project, which is expected to be fully completed by July 2026, will position Recon to capitalize on the growing demand for sustainable and recycled materials, aligning with global ESG trends and creating long-term value for shareholders. " Mr. Yin continued, "Amid a dynamic global energy market characterized by supply-demand rebalancing and evolving industry changes, the Company has demonstrated resilience and adaptability, leveraging its core strengths to drive revenue growth while navigating operational challenges. Our focus on high-value-added services, strategic diversification, and operational excellence will continue to guide our decisions as we pursue our long-term growth objectives." Recon Technology remains committed to delivering innovative, reliable solutions to its customers while upholding the highest standards of corporate governance and social responsibility. The Company will continue to provide timely updates on its business progress and financial performance as it executes its strategic plan. First Six Months Fiscal 2026 Financial Results: Revenue Total revenues for the six months ended December 31, 2025 were approximately RMB85.0 million ($12.2 million), an increase of approximately RMB43.0 million ($6.2 million) or 102.2% from RMB42.0 million ($6.0 million) for the same period in 2024. Revenue from automation product and software increased by RMB41.4 million ($5.9 million) or 197.6%. For the six months ended December 31, 2025, the increase in revenue from automation products and software was primarily driven by the Company's RMB44.2 million overseas oilfield projects during the period. This was a consequence of the second phase of oilfield capacity construction and the launch of a major automation service and maintenance project that we secured outside China in 2012. The growth was partially offset by a decline of RMB2.7 million in the domestic oilfield business, due to reduced maintenance efforts in the domestic market during the six months period, as our focus shifted towards overseas projects. Looking ahead, we will be making a particular shift in our personnel, moving them from overseeing markets to strengthening our domestic market maintenance. Revenue from equipment and accessories increased by RMB1.6 million ($0.2 million) or 10.2 %. For the six months ended December 31, 2025, the increase was primarily driven by a RMB4.1 million growth contributed by offshore oilfield operations, as well as revenues of about RMB1.2 million from new onshore oilfield customers. This increase offset some of the RMB3.7 million revenue decline due to reduced business from some occasional orders we achieved in the compared period. Revenue from oilfield environmental protection services increased by RMB2.8 million ($0.4 million), or 101.3%. This growth was primarily driven by the increase of settlement prices of some wastewater treatment clients. Revenue from platform outsourcing services decreased by RMB2.7 million ($0.4 million) or 100%. FGS's operations were materially and adversely affected by strategic shifts in its major clients' business decisions to terminate online cooperation of third-party companies and unfavorable changes in domestic industry policies. Consequently, FGS's revenue and active business activities declined precipitously, resulting in zero revenue for the six months ended December 31, 2025. Cost of revenue Cost of revenues increased from RMB28.7 million ($4.1 million) for the six months ended December 31, 2024 to RMB56.6 million ($8.1 million) for the same period in 2025. For the six months ended December 31, 2024 and 2025, cost of revenue from automation product and software was approximately RMB12.4 million and RMB40.7 million ($5.8 million), respectively, representing an increase of approximately RMB28.3 million ($4.0 million) or 228.6%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software. For the six months ended December 31, 2024 and 2025, cost of revenue from equipment and accessories was approximately RMB11.2 million and RMB13.2 million ($1.9 million), respectively, representing an increase of approximately RMB2.0 million ($0.3 million) or 18.0%. The increase in costs of revenue was primarily driven by expanded business activity, mirroring the same factor behind the growth in revenue. For the six months ended December 31, 2024 and 2025, cost of revenue from oilfield environmental protection was approximately RMB4.8 million and RMB2.7 million ($0.4 million), respectively, representing a decrease of approximately RMB2.1 million ($0.3 million) or 43.7%. While actively pursuing new business opportunities in a constrained market, the Company undertook testing projects. Given their high uncertainty, equipment costs for these projects were fully costing upon purchase in the prior period, resulting in lower costs in the current period compared to the prior period. For the six months ended December 31, 2024 and 2025, the reason for the decrease is consistent with that of the revenue decline. Gross profit Gross profit increased to RMB28.5 million ($4.1 million) for the six months ended December 31,2025 from RMB13.4 million ($1.9 million) for the same period in 2024. Our gross profit as a percentage of revenue increased to 33.5% for the six months ended December 31, 2025 from 31.7% for the same period in 2024. For the six months ended December 31, 2024 and 2025, gross profit from automation products and software was approximately RMB8.5 million and RMB21.6 million ($3.1 million), respectively. This represents an increase of approximately RMB13.1 million ($1.9 million), or 152.8%, primarily driven by the Company's overseas oilfield projects. However, the overall gross margin declined during the period due to a higher proportion of hardware revenue, which carries a lower gross margin. For the six months ended December 31, 2024 and 2025, gross profit from equipment and accessories was approximately RMB4.5 million and RMB4.1 million ($0.6 million), respectively, representing a decrease of approximately RMB0.4 million ($0.1 million) or 8.8%. The gross margin for automation equipment and accessories has remained relatively stable in this period. For the six months ended December 31, 2024 and 2025, gross profit from oilfield environmental protection services was approximately negative RMB2.1 million and RMB2.7 million ($0.4 million), respectively, representing an increase of RMB4.9 million ($0.7 million), or 229.1%. The higher costs in the prior period were primarily due to testing projects conducted in 2024, for which equipment costs were fully expensed upon purchase. For the six months ended December 31, 2024 and 2025, gross profit from platform outsourcing services was approximately RMB2.4 million and nil, respectively, representing a decrease of approximately RMB2.4 million ($0.3 million), or 100%, primarily due to the suspension of operations. Operating expenses Selling expenses decreased by 16.2%, or RMB0.9 million ($0.1 million), from RMB5.2 million for the six months ended December 31, 2024 to RMB4.3 million ($0.6 million) in the same period of 2025. General and administrative expenses increased by 19.3%, or RMB4.6 million ($0.7 million), from RMB24.0 million for the six months ended December 31, 2024 to RMB28.7 million ($4.1 million) in the same period of 2025. The Company also recorded allowance for credit losses of RMB0.9 million for the six months ended December 31, 2024 as compared to net recovery of credit losses of RMB0.02 million ($0.003 million) for the same period in 2025. Research and development expenses decreased by 22.1%, or RMB2.2 million ($0.3 million) from RMB10.2 million for the six months ended December 31, 2024 to RMB7.9 million ($1.1 million) for the same period of 2025. Loss from operations Loss from operations was RMB12.4 million ($1.8 million) for the six months ended December 31, 2025, compared to a loss of RMB26.9 million for the same period of 2024. This RMB14.5 million ($2.1 million) decrease in operating losses was mainly driven by higher operating gross profit, as previously discussed. Change in fair value of warrant liability The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Change in fair value changes of warrant liability was negative RMB10,327 and RMB584.0 ($84.0) for the six months ended December 31, 2024 and 2025, respectively. The primary reason for the decrease in the fair value loss of the warrant liability was the change in the fair value assessment price. Interest income Net interest income was RMB6.4 million ($0.9 million) for the six months ended December 31, 2025, compared to net interest income of RMB6.6 million for the same period of 2024. Interest income remained relatively stable. Other expenses, net. Other net expenses amounted to RMB1.2 million ($0.2 million) for the six months ended December 31, 2025, compared to RMB0.4 million for the same period in 2024, representing an increase of RMB0.8 million ($0.1 million). The increase was primarily due to the closure of Qinghai BHD and the disposal of 51% equity interest in MSJ, which together resulted in a total loss on equity shares investments of RMB1.1 million. Net loss As a result of the factors described above, net loss was RMB7.2 million ($1.0 million) for the six months ended December 31, 2025, a decrease of RMB13.5 million ($1.9 million) from net loss of RMB20.7 million for the same period of 2024. Cash and short-term investment As of December 31, 2025, we had cash in the amount of approximately RMB75.1 million ($10.7 million).As of June 30, 2025, we had cash in the amount of approximately RMB98.9 million ($14.1 million) and short-term investment in bank fixed income product of approximately RMB3.6 million ($0.5 million). About Recon Technology, Ltd ("RCON") Recon Technology, Ltd (NASDAQ: RCON) is the People's Republic of China's first NASDAQ-listed non-state owned oil and gas field service company. Recon supplies China's largest oil exploration companies, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions within several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients. For additional information please visit: http://www.recon.cn/. Forward-Looking Statements Recon includes "forward-looking statements" within the meaning of the federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as "scheduled," "may," "will," "could," "should," "would," "expect," "believe," "anticipate," "project," "plan," "estimate," "forecast," "goal," "objective," "committed," "intend," "continue," or "will likely result," and similar expressions that concern Recon's strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those that Recon expected. Many of these statements are derived from Recon's operating budgets and forecasts, which are based on many detailed assumptions that Recon believes are reasonable, or are based on various assumptions about certain plans, activities or events which we expect will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under "Risk Factors" in Recon's most recent Annual Report on Form 20‑F and any subsequent half-year financial filings on Form 6‑K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements that Recon makes from time to time in its SEC filings and public communications. Recon cannot assure the reader that it will realize the results or developments Recon anticipates, or, even if substantially realized, that they will result in the consequences or affect Recon or its operations in the way Recon expects. Forward-looking statements speak only as of the date made. Recon undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, Recon. For more information, please contact: The Company Ms. Liu Jia Chief Financial Officer Recon Technology, Ltd Phone: +86 (10) 8494-5799 Email: [email protected] The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. View original content:https://www.prnewswire.com/news-releases/recon-technology-ltd-reports-financial-results-for-the-first-six-months-of-fiscal-year-2026-302713387.html

BEIJING, Oct. 14, 2025 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for fiscal year 2025. Fiscal Year Ended June 30, 2025 Financial Highlights: Total revenue decrease by approximately RMB2.5 million ($0.4 million) or3.7% to RMB66.3 million ($9.3 million) for the year ended June 30, 2025 from RMB68.8 million ($9.6 million) for the same period in 2024. Gross profit decreased to RMB15.2 million ($2.1 million) for the year ended June 30, 2025, from RMB20.9 million ($2.9 million) for the same period in 2024. Gross margin decreased to 23.0% for the year ended June 30, 2025 from 30.3% for the same period in 2024. Net loss was RMB44.2 million ($6.2 million) for the year ended June 30, 2025, a decrease of RMB7.2 million ($1.0 million) from net loss of RMB51.4 million ($7.2 million) for the same period of 2024. Management Commentary Mr. Shenping Yin, Founder and CEO of Recon said, "During the 2025 financial year, our primary clients, domestic oil companies, have experienced declining performance due to the impact of oil price fluctuations. Consequently, they have adopted more cautious and cost-conscious approaches to capital expenditures and expense management. This has had a negative impact on our profitability. Fortunately, we have secured several new clients outside of the oilfield industry and expanded our order book with offshore oilfield customers. These developments have stabilized our business operations. During the 2025 financial year, we also successfully expanded our overseas oilfield client base, which will significantly contribute to our business in the new financial year. At the same time, we are pressing ahead with construction of our Chemical Circular Factory. For the 2025 fiscal year, we have completed all pre-approval procedures required by local authorities, obtained the construction project planning permit, and officially started the construction work on April 28, 2025. It is anticipated that the project will be fully completed by the end of 2025. We believe that the plastic chemical recycling business will enhance the company's operations significantly in the 2026 financial year." Fiscal Year Ended 202 5 Financial Results: Revenue Total revenues for the year ended June 30, 2025 were approximately RMB66.3 million ($9.3 million), a decrease of approximately RMB2.5 million ($0.4 million) or3.7% from RMB68.8 million ($9.6 million) for the same period in 2024. Revenue from automation product and software increased by RMB7.3 million ($1.0 million) or 27.1%. The increase in revenue was primarily driven by the company's enhanced sales activities and successful expansion into markets beyond oilfields, partially offset by declining sales to certain oilfield clients. Revenue from equipment and accessories decreased by RMB2.0 million ($0.3 million) or 10.0%. The main reason for the decline in revenue is that oilfield customers, in order to safeguard their earnings, have strictly controlled their extraction budgets and implemented low-cost operational strategies. Revenue from oilfield environmental protection decreased by RMB7.3 million ($1.0 million) or 41.4% primarily due to the expiration of Gansu BHD's hazardous waste operation permit. As a result, no revenue was recorded. The company is currently engaged in the active application process for the renewal of relevant qualifications. Besides, some customers request and we agreed to a lower price for a portion of our wastewater business in order to establish a long-term relationship, resulting in a decrease in revenue from that portion of the business. Revenue from platform outsourcing services decreased by RMB0.5 million ($0.1 million) or 13.0%. The decrease in revenue was primarily driven by a RMB0.8 million drop caused by reduced demand from former gas-station customers upgrading their in-house online systems and by lower cooperation with third-party partners. This decrease was partly offset by a RMB1.30 million increase driven by higher transaction volumes from diesel users and improved settlement rates with freight-exchange-platform customers. As of June 30, 2025, he factory for the chemical recycling is still under construction and has not started production and sales yet. Cost of revenue Cost of revenues decreased from RMB48.0 million for the year ended June 30, 2024 to RMB51.0 million ($7.1 million) for the same period in 2025. For the years ended June 30, 2024 and 2025, cost of revenue from automation product and software was approximately RMB23.9 million ($3.3 million) and RMB28.6 million ($4.0 million), respectively, representing increase of approximately RMB4.7 million ($0.7 million) or 20.0%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software. For the years ended June 30, 2024 and 2025, cost of revenue from equipment and accessories was approximately RMB14.1 million ($2.0 million) and RMB13.2 million ($1.8 million), respectively, representing a decrease of approximately RMB0.9 million ($0.1 million) or 6.2%. The decrease in costs of revenue was primarily driven by reduced business activity, mirroring the same factor behind the drop in revenue. For the years ended June 30, 2024 and 2025, cost of revenue from oilfield environmental protection was approximately RMB9.2 million ($1.3 million) and RMB8.5 million ($1.2 million), respectively, representing a decrease of approximately RMB0.7 million ($0.1 million) or 7.5%. The decrease in the cost of revenue from oilfield environmental protection was in line with decrease in revenue. For the years ended June 30, 2024 and 2025, cost of revenue from platform outsourcing services remained stable at RMB0.6 million ($0.09 million). For the years ended June 30, 2024 and 2025, cost of revenue from chemical recycling was RMB0.1 million ($0.01 million) and nil, which was business and sales related tax. As of June 30, 2025, the factory for the chemical recycling is still under construction and has not started production and sales yet. Gross profit Gross profit increased to RMB15.2 million ($2.1 million) for the year ended June 30, 2025 from RMB20.9 million ($2.9 million) for the same period in 2024. Our gross profit as a percentage of revenue decreased to 23.0% for the year ended June 30, 2025 from 30.3% for the same period in 2024. For the years ended June 30, 2024 and 2025, our gross profit from automation product and software was approximately RMB3.0 million ($0.4 million) and RMB 5.5 million ($0.8 million), respectively, representing an increase in gross profit of approximately RMB2.5 million ($0.4 million) or 84.9%. The increase in gross margin was primarily due to the elevated proportion of high-margin service businesses. For the years ended June 30, 2024 and 2025, gross profit from equipment and accessories was approximately RMB6.4 million ($0.9 million) and RMB5.2 million ($0.7 million), respectively, representing a slight decrease of approximately RMB1.2 million ($0.2 million) or 18.5%. The decline in gross margin was primarily driven by the oilfield customers' shift to a low-cost operating model and tighter budget controls, compounded by an unexpected rise in after-sales expenses. For the years ended June 30, 2024 and 2025, gross profit from oilfield environmental protection was approximately RMB8.3 million ($1.2 million) and RMB1.7 million ($0.2 million), respectively, representing a decrease of RMB6.6 million ($0.9 million) or 79.1%. The main reason for the decrease in gross margin is that one of our customers reduced the settlement price. For the years ended June 30, 2024 and 2025, gross profit from platform outsourcing services was approximately RMB3.3 million ($0.5 million) and RMB2.8 million ($0.4 million), respectively, representing a decrease of approximately RMB0.5 million ($0.1 million) or 15.7%. The decrease in gross profit was consistent with the change in revenue. For the years ended June 30, 2024 and 2025, gross profit losses from chemical recycling was RMB0.1 million ($0.01 million) and nil, respectively. As of June 30, 2025, the factory for the chemical recycling remains under construction and has not started production and sales yet. Operating expenses Selling expenses decreased by 9.9%, or RMB1.1 million ($0.1 million), from RMB10.4 million ($1.4 million) in the year ended June 30, 2024 to RMB9.3 million ($1.3 million) in the same period of 2025. General and administrative expenses decreased by 22.1%, or RMB14.2 million ($2.0 million), from RMB63.8 million ($8.9 million) in the year ended June 30, 2024 to RMB49.6 million ($6.9 million) in the same period of 2025. Net provision for credit losses of RMB4.1 million ($0.6 million) for the year ended June 30, 2024 as compared to net recovery of credit losses of RMB2.9 million ($0.4 million) for the same period in 2025. Research and development expenses increased by 15.0%, or RMB2.1 million ($0.3 million) from RMB14.3 million ($2.0 million) for the year ended June 30, 2024 to RMB16.4 million ($2.3 million) for the same period of 2025. Loss from operations Loss from operations was RMB57.3 million ($8.0 million) for the year ended June 30, 2025, compared to a loss of RMB71.6 million ($10.0 million) for the same period of 2024. This RMB14.3 million ($2.0 million) decrease in loss from operations was primarily due to the decrease in operating expense as discussed above. Change in fair value changes of warrant liability The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Gain in change in fair value of warrant liability was RMB0.9 million ($0.1 million) and RMB0.01 million ($0.001 million) for the years ended June 30, 2024 and 2025, respectively. The primary reason for the decrease of loss in the fair value of the warrant liability was that on December 14, 2023, we redeemed an aggregate of 17,953,269 warrants (equivalent to 997,404 warrants post the 2024 Reverse Split) from the Sellers. Following this transaction, only 863,333 warrants remained outstanding (47,964 post-split), and the smaller outstanding balance directly lowered the magnitude of fair value changes. Impairment loss on goodwill and intangible assets The Company recognized the excess of purchase price over the fair value of assets acquired and liabilities assumed of the business acquired was recorded as goodwill and fair value of identified intangible assets, which is customer relationship as a result of the step acquisition of FGS. In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2024 and 2025, the management performed evaluation on the impairment of goodwill and intangible assets and recorded an impairment loss on goodwill and intangible assets of nil and nil for the years ended June 30, 2024 and 2025, respectively. As of June 30, 2023, goodwill and intangible assets of FGS had fully accrued for impairment. The impairment was mainly due to the decision of the major customers to develop their own autonomous unified system and to significantly reduce the procurement of third-party services. Interest income Net interest income was RMB12.3 million ($1.7 million) for the year ended June 30, 2025, compared to net interest income of RMB21.8 million ($3.0 million) for the same period of 2024. The RMB9.5 million ($1.3 million) decrease in net interest income was primarily attributable to reduced third-party loan balances and lower allocations to short-term investments during the year ended June 30, 2025. Other income (expenses), net. Other net income was RMB1.3 million ($0.2 million) for the year ended June 30, 2025, compared to other net expenses of RMB0.7 million ($0.1 million) for the same period of 2024. The RMB2.0 million ($0.3 million) increase other net income was primarily due to a decrease in subsidy income of RMB0.2 million. The increase in other net income was attributable to a decrease in subsidy income and an asset write-off gain of approximately RMB0.1 million. Additionally, following the closure of the Qinghai office, RMB0.5 million in payables that could no longer be settled was recognized as income, RMB0.2 million in receivables that could not be collected was written off as a loss and an increase in foreign exchange transaction income of RMB1.8 million due to the fluctuation of exchange rate of RMB against US dollars during the year ended June 30, 2025 compared to the same period of 2024. Net loss As a result of the factors described above, net loss was RMB43.7 million ($6.1 million) for the year ended June 30, 2025, a decrease of RMB7.7 million ($1.1 million) from net loss of RMB51.4 million ($7.2 million) for the same period of 2024. Cash and short-term investment As of June 30, 2025, we had cash in the amount of approximately RMB98.9 million ($13.8 million) and short-term investment in bank fixed income product of approximately RMB3.6 million ($0.5 million). As of June 30, 2024, we had cash in the amount of approximately RMB110.0 million ($15.4 million) and short-term investment in bank fixed income product of approximately RMB88.1million ($12.3 million). About Recon Technology, Ltd ("RCON") Recon Technology, Ltd (NASDAQ: RCON) is the People's Republic of China's first NASDAQ-listed non-state owned oil and gas field service company. Recon supplies China's largest oil exploration companies, Sinopec (NYSE: SNP) and The China National Petroleum Corporation ("CNPC"), with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions within several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients. For additional information please visit: http://www.recon.cn/. Forward-Looking Statements Recon includes "forward-looking statements" within the meaning of the federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as "scheduled," "may," "will," "could," "should," "would," "expect," "believe," "anticipate," "project," "plan," "estimate," "forecast," "goal," "objective," "committed," "intend," "continue," or "will likely result," and similar expressions that concern Recon's strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those that Recon expected. Many of these statements are derived from Recon's operating budgets and forecasts, which are based on many detailed assumptions that Recon believes are reasonable, or are based on various assumptions about certain plans, activities or events which we expect will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under "Risk Factors" in Recon's most recent Annual Report on Form 20-F and any subsequent half-year financial filings on Form 6-K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements that Recon makes from time to time in its SEC filings and public communications. Recon cannot assure the reader that it will realize the results or developments Recon anticipates, or, even if substantially realized, that they will result in the consequences or affect Recon or its operations in the way Recon expects. Forward-looking statements speak only as of the date made. Recon undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, Recon. For more information, please contact: The Company Ms. Liu Jia Chief Financial Officer Recon Technology, Ltd Phone: +86 (10) 8494-5799 Email: [email protected] View original content:https://www.prnewswire.com/news-releases/recon-technology-ltd-reports-financial-year-results-for-fiscal-year-2025-302583705.html

BEIJING, March 31, 2025 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for the first six months of fiscal year 2025. First Six Months of Fiscal 2025 Financial Highlights: Total revenue decreased to RMB42.1 million ($5.8 million) for the six months ended December 31, 2024, from RMB45.3 million ($6.2 million) for the same period in 2023. Gross profit increased to RMB13.4 million ($1.8 million) for the six months ended December 31, 2024, from RMB12.1 million ($1.7 million) for the same period in 2023. Gross margin increased to 31.7% for the six months ended December 31, 2024 from 26.7% for the same period in 2023. Net loss was RMB20.7 million ($2.8 million) for the six months ended December 31, 2024, a decrease of RMB2.4 million ($0.3 million) from net loss of RMB23.1 million ($3.2 million) for the same period of 2023. Management Commentary Mr. Shenping Yin, Founder and CEO of Recon, said, "For the six months ended December 31, 2024, our oilfield customers' production continued to increase, and demand for our automation and oilfield specialized equipment also increased, with corresponding revenue and gross profit both rising and improving. However, our revenue as a whole declined slightly due to fluctuations in demand from some of our new businesses and customers. We anticipate a steady rebound in our business and operating quality, particularly in our two core segments: digital solutions and oilfield environmental protection. As China's oil service companies are in a stage of development driven by customers' rising demand for stable production and supply and technology upgrades, we will continue to increase our investment in technology and continue to improve our long-term corporate competitiveness. In addition, our ongoing project to build a chemical recycling plant for low-value plastics made a significant breakthrough during the period. We have successfully obtained the necessary qualifications for the production and commencement of construction of the plant, which is scheduled to begin in April 2025 and enter the formal production phase in the second half of 2025." First Six Months Fiscal 2025 Financial Results: Revenue Total revenues for the six months ended December 31, 2024 were approximately RMB42.1 million ($5.8 million), a decrease of approximately RMB3.2 million ($0.4 million) or 7.0% from RMB45.3 million ($6.2 million) for the same period in 2023. Revenue from automation product and software increased by RMB3.4 million ($0.5 million) or 19.2%. For the six months ended December 31, 2024, the increase in revenue from automation products and software is primarily due to the growing market demand for automated operations. Revenue from equipment and accessories decreased by RMB2.2 million ($0.3 million) or 12.2%. For the six months ended December 31, 2024, revenues from the heating furnace category increased by RMB1.9 million compared to the same period in 2023, driven by our oilfield customers' expanded production capacity. Revenues from equipment used in the offshore oilfield category decreased by RMB3.3 million, primarily due to reduced demand from our customers. We anticipate an overall increase in revenues from offshore customers in 2025. Revenue from oilfield environmental protection decreased by RMB5.3 million ($0.7 million) or 66.2%, primarily due to the expiration of Gansu BHD's hazardous waste operation permit during the six-month period ending December 31, 2024. As a result, no revenue was recorded. The company is currently engaged in the active application process for the renewal of relevant qualifications. Besides, some customers request and we agreed to a lower price for a portion of our wastewater business in order to establish a long-term relationship, resulting in a decrease in revenue from that portion of the business. Revenue from platform outsourcing services increased by RMB1.0 million ($0.1 million) or 53.7%. The increase was mainly due to the rise in transaction volumes of diesel users and the higher settlement rates with freight trading platforms clients. Cost of revenue Cost of revenues decreased from RMB33.2 million ($4.5 million) for the six months ended December 31, 2023 to RMB 28.7 million ($3.9 million) for the same period in 2024. For the six months ended December 31, 2023 and 2024, cost of revenue from automation product and software was approximately RMB14.0 million and RMB12.4 million ($1.7 million), respectively, representing a decrease of approximately RMB1.6 million ($0.2 million) or 11.8%. The decrease in cost of revenue from automation product and software was primarily attributable to the proportion of operation and maintenance services, which have lower costs. For the six months ended December 31, 2023 and 2024, cost of revenue from equipment and accessories was approximately RMB12.8 million and RMB11.2 million ($1.5 million), respectively, representing a decrease of approximately RMB1.6 million ($0.2 million) or 12.7%. The costs of the furnace business increased in this period due to the corresponding increase in revenue, whereas the costs of the offshore oilfield customers decreased in line with the decreased revenue, resulting in a reduced total cost of sales. For the six months ended December 31,2023 and 2024, cost of revenue from oilfield environmental protection was approximately RMB6.0 million and RMB4.9 million ($0.7 million), respectively, representing a decrease of approximately RMB1.1 million ($0.2 million) or 19.4%. The decrease in the cost of revenue from oilfield environmental protection was in line with decrease in revenue. For the six months ended December 31,2023 and 2024, cost of revenue from platform outsourcing services remained stable at RMB0.3 million ($0.05 million). Gross profit Gross profit increased to RMB13.4 million ($1.8 million) for the six months ended December 31,2024 from RMB12.1million ($1.7 million) for the same period in 2023. Our gross profit as a percentage of revenue increased to 31.7% for the six months ended December 31, 2024 from 26.7% for the same period in 2023. For the six months ended December 31, 2023 and 2024, our gross profit from automation product and software was approximately RMB3.5 million and RMB8.5 million ($1.2 million), respectively, representing an increase in gross profit of approximately RMB5.0 million ($0.7 million) or 143.2%. The increase in gross margin was primarily due to the elevated proportion of high-margin service businesses. For the six months ended December 31, 2023 and 2024, gross profit from equipment and accessories was approximately RMB5.1 million and RMB4.5 million ($0.6 million), respectively, representing a decrease of approximately RMB0.6 million ($0.1 million) or 10.9 %. The gross margin for equipment and accessories has remained relatively stable in this period. For the six months ended December 31, 2023 and 2024, gross profit from oilfield environmental protection was approximately RMB2.0 million and negative RMB2.1 million (negative $0.3 million), respectively, representing a decrease of RMB4.1 million ($0.6 million), or 204.8%. The main reason for the decrease in gross margin is that one of our customers reduced the settlement price. For the six months ended December 31, 2023 and 2024, gross profit from platform outsourcing services was approximately RMB1.5 million and RMB2.4 million ($0.3 million), respectively, representing an increase of approximately RMB0.9 million ($0.1 million), or 63.8%, primarily due to the increase in the settlement rate. Operating expenses Selling expenses increased by 13.9%, or RMB0.7 million ($0.1 million), from RMB4.6 million for the six months ended December 31, 2023 to RMB5.2 million ($0.6 million) in the same period of 2024. General and administrative expenses increased by 9.1%, or RMB2.0 million ($0.3 million), from RMB22.0 million for the six months ended December 31, 2023 to RMB24.0 million ($3.3 million) in the same period of 2024. The Company also recorded allowance for credit losses of RMB1.6 million for the six months ended December 31, 2023 as compared to allowance for credit losses of RMB0.9 million ($0.1 million) for the same period in 2024. Research and development expenses increased by 50.3%, or RMB3.4 million ($0.5 million) from RMB6.8 million for the six months ended December 31, 2023 to RMB10.2 million ($1.4 million) for the same period of 2024. Loss from operations Loss from operations was RMB26.9 million ($3.7 million) for the six months ended December 31, 2024, compared to a loss of RMB22.8 million for the same period of 2023. This RMB4.1 million ($0.6 million) increase in operating losses was mainly driven by higher operating expenses, as previously discussed. Change in fair value of warrant liability The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Loss in fair value changes of warrant liability was RMB1.9 million and RMB0.01 million ($0.001 million) for the six months ended December 31, 2023 and 2024, respectively. The primary reason for the decrease of loss in the fair value of the warrant liability was that on December 14, 2023, we redeemed an aggregate of 17,953,269 warrants (equivalent to 997,404 warrants post the 2024 Reverse Split) from the Sellers. Interest income Net interest income was RMB6.6 million ($0.9 million) for the six months ended December 31, 2024, compared to net interest income of RMB10.4 million for the same period of 2023. The RMB3.8 million ($0.5 million) decrease in net interest income was primarily due to the collection of loans to third parties and coupled with a reduction in interest rates for new loans. Other income (expenses), net. Other net expenses was RMB0.4 million ($0.1 million) for the six months ended December 31, 2024, compared to other net expenses of RMB8.6 million for the same period of 2023, the RMB8.2 million ($1.1 million) decrease in other net expenses was primarily due to a decrease of RMB0.1million($0.02 million) in subsidy income and a decrease in other expenses of RMB8.5 million ($1.2 million) which was partially offset by an increase loss from foreign currency of RMB0.2 million ($0.03 million). The decrease in other expenses, as we accrued RMB8.5 million ($1.2 million) estimated liability based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023. For the six months ended December 31, 2024, we do not have this situation. Net loss As a result of the factors described above, net loss was RMB20.7 million ($2.8 million) for the six months ended December 31, 2024, a decrease of RMB2.4 million ($0.3 million) from net loss of RMB23.1 million for the same period of 2023. Cash and short-term investment As of June 30, 2024, we had cash in the amount of approximately RMB110.0 million ($15.1 million) and short-term investment in bank fixed income product of approximately RMB88.1 million ($12.1 million). As of December 31, 2024, we had cash in the amount of approximately RMB145.3 million ($19.9 million) and short-term investment in bank fixed income product of approximately nil. About Recon Technology, Ltd ("RCON") Recon Technology, Ltd (NASDAQ: RCON) is the People's Republic of China's first NASDAQ-listed non-state owned oil and gas field service company. Recon supplies China's largest oil exploration companies, Sinopec (NYSE: SNP) and The China National Petroleum Corporation ("CNPC"), with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions within several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients. For additional information please visit: http://www.recon.cn/. Forward-Looking Statements Recon includes "forward-looking statements" within the meaning of the federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as "scheduled," "may," "will," "could," "should," "would," "expect," "believe," "anticipate," "project," "plan," "estimate," "forecast," "goal," "objective," "committed," "intend," "continue," or "will likely result," and similar expressions that concern Recon's strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those that Recon expected. Many of these statements are derived from Recon's operating budgets and forecasts, which are based on many detailed assumptions that Recon believes are reasonable, or are based on various assumptions about certain plans, activities or events which we expect will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under "Risk Factors" in Recon's most recent Annual Report on Form 20‑F and any subsequent half-year financial filings on Form 6‑K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements that Recon makes from time to time in its SEC filings and public communications. Recon cannot assure the reader that it will realize the results or developments Recon anticipates, or, even if substantially realized, that they will result in the consequences or affect Recon or its operations in the way Recon expects. Forward-looking statements speak only as of the date made. Recon undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, Recon. View original content:https://www.prnewswire.com/news-releases/recon-technology-ltd-reports-financial-results-for-the-first-six-months-of-fiscal-year-2025-302415846.html SOURCE Recon Technology, Ltd