Group 1 - The top five gainers among Chinese concept stocks include 707 Cayman Holdings with a rise of 41.31%, ATA Creativity Global increasing by 33.36%, and RCON (研控科技) up by 20.35% [1] - 707 Cayman Holdings closed at a price of 5.935, with a gain of 1.735 and a trading volume of 2.7565 million [1] - ATA Creativity Global's latest price is 1.700, showing an increase of 0.425 and a trading volume of 0.8189 million [1] Group 2 - RCON (研控科技) reached a price of 2.720, with a rise of 0.460 and a trading volume of 20.0451 million [1] - 康乃德生物 (CNTB) closed at 2.100, reflecting a gain of 0.350 and a trading volume of 0.5651 million [1] - I-Mab (IMAB) saw its price at 2.030, with an increase of 0.330 and a trading volume of 3.7652 million [1]

研控科技的自动化系统可远程监测和收集油田生产实时数据,这项先进的行业应用可以极大地帮助油田 客户提高开采水平、减少杂质以及降低生产成本。 本文源自：金融界 7月30日，研控科技(RCON)盘中上涨20.32%，截至22:31，报2.719美元/股，成交334.46万美元，总市值 8328.21万美元。 财务数据显示，截至2024年12月31日，研控科技收入总额4206.93万人民币，同比减少7.04%；归母净利 润-2058.83万人民币，同比增长8.72%。 资料显示，研控科技有限责任公司(纳斯达克交易代码:RCON)是一家领先的中国油田服务公司。公司主 要业务为油田自动化产品、油田增产措施及专用设备的研发和销售。研控科技为中国主要石油天然气公 司提供产品和服务,以帮助他们提高油气生产和运输效率。 作者：行情君 ...

Core Viewpoint - RCON's stock opened up by 3.98% on July 30, 2023, reaching $2.35 per share, with a total market capitalization of $71.97 million [1] Financial Performance - As of December 31, 2024, RCON reported total revenue of 42.07 million RMB, a year-on-year decrease of 7.04% [1] - The company recorded a net loss attributable to shareholders of 20.59 million RMB, which represents a year-on-year increase of 8.72% [1] Company Overview - RCON is a leading oilfield services company based in China, primarily engaged in the research, development, and sales of oilfield automation products, enhanced oil recovery measures, and specialized equipment [1] - The company provides products and services to major Chinese oil and gas companies, aiming to improve their oil and gas production and transportation efficiency [1] Technological Advancements - RCON's automation systems enable remote monitoring and collection of real-time production data from oilfields, significantly aiding clients in enhancing extraction levels, reducing impurities, and lowering production costs [1]

Core Viewpoint - Chinese concept stocks experienced significant declines, with the top five losers showing drastic percentage drops in their stock prices [1] Group 1: Stock Performance - Feitian Zhaoye (PTHL) saw a decline of 94.67%, closing at 1.650, with a drop of 29.310 million [1] - Hongli Yingzao (WLGS) fell by 37.00%, ending at 0.0533, with a decrease of 0.0313 million [1] - American Green Star (PLAG) decreased by 26.83%, closing at 1.500, down by 0.550 million [1] - Pitanium (PTNM) dropped by 25.42%, with a closing price of 1.320, down by 0.450 million [1] - Yanke Technology (RCON) experienced a decline of 23.45%, closing at 2.260, with a drop of 0.693 billion [1]

7月29日，研控科技(RCON)盘中上涨10.75%，截至22:29，报3.27美元/股，成交7.98万美元，总市值1.00 亿美元。 财务数据显示，截至2024年12月31日，研控科技收入总额4206.93万人民币，同比减少7.04%；归母净利 润-2058.83万人民币，同比增长8.72%。 资料显示，研控科技有限责任公司(纳斯达克交易代码:RCON)是一家领先的中国油田服务公司。公司主 要业务为油田自动化产品、油田增产措施及专用设备的研发和销售。研控科技为中国主要石油天然气公 司提供产品和服务,以帮助他们提高油气生产和运输效率。 研控科技的自动化系统可远程监测和收集油田生产实时数据,这项先进的行业应用可以极大地帮助油田 客户提高开采水平、减少杂质以及降低生产成本。 本文源自：金融界 作者：行情君 ...

Financial Performance - Total revenues for the six months ended December 31, 2024, were approximately RMB 42.1 million ($5.8 million), a decrease of approximately RMB 3.2 million ($0.4 million) or 7.0% from RMB 45.3 million ($6.2 million) for the same period in 2023 [4][7] - Gross profit increased to RMB 13.4 million ($1.8 million) for the six months ended December 31, 2024, from RMB 12.1 million ($1.7 million) for the same period in 2023, with a gross margin increase to 31.7% from 26.7% [6][7] - Net loss was RMB 20.7 million ($2.8 million) for the six months ended December 31, 2024, a decrease of RMB 2.4 million ($0.3 million) from a net loss of RMB 23.1 million for the same period in 2023 [15][22] Revenue Breakdown - Revenue from automation products and software increased by RMB 3.4 million ($0.5 million) or 19.2%, driven by growing market demand for automated operations [8] - Revenue from oilfield environmental protection decreased by RMB 5.3 million ($0.7 million) or 66.2%, primarily due to the expiration of a hazardous waste operation permit [8] - Revenue from platform outsourcing services increased by RMB 1.0 million ($0.1 million) or 53.7%, attributed to a rise in transaction volumes [8] Cost and Expenses - Cost of revenues decreased from RMB 33.2 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 [5] - Selling expenses increased by 13.9% to RMB 5.2 million ($0.6 million) and general and administrative expenses increased by 9.1% to RMB 24.0 million ($3.3 million) [9] - Research and development expenses increased by 50.3% to RMB 10.2 million ($1.4 million) for the six months ended December 31, 2024 [10] Management Insights - The CEO indicated that while overall revenue declined slightly, there was an increase in demand for automation and oilfield specialized equipment, with expectations for a steady rebound in business, particularly in digital solutions and oilfield environmental protection [3] - The company made significant progress in its project to build a chemical recycling plant for low-value plastics, with construction scheduled to begin in April 2025 [3] Cash Position - As of December 31, 2024, the company had cash of approximately RMB 145.3 million ($19.9 million) and no short-term investments in bank fixed income products [16]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EX ...

Financial Performance - Total revenue for the fiscal year ended June 30, 2024, increased by approximately RMB1.7 million ($0.2 million) or 2.6% to RMB68.8 million ($9.5 million) from RMB67.1 million ($9.2 million) for the same period in 2023 [2][4] - Gross profit increased to RMB20.9 million ($2.9 million) for the year ended June 30, 2024, from RMB18.9 million ($2.6 million) for the same period in 2023 [2][4] - Gross margin improved to 30.3% for the year ended June 30, 2024, compared to 28.1% for the same period in 2023 [2][4] - Net loss decreased to RMB51.4 million ($7.1 million) for the year ended June 30, 2024, down from a net loss of RMB61.4 million ($8.5 million) for the same period in 2023 [2][4] Revenue Breakdown - Revenue from automation products and software increased by RMB0.2 million ($0.03 million) or 0.8% [4] - Revenue from equipment and accessories increased by RMB4.2 million ($0.6 million) or 26.0%, driven by growth in the oilfield business [4] - Revenue from oilfield environmental protection decreased by RMB1.5 million ($0.2 million) or 8.1% due to reduced production intensity from customers [4] - Revenue from platform outsourcing services decreased by RMB1.1 million ($0.2 million) or 22.4% due to reduced demand from former gas station customers [4] Cost and Expenses - Cost of revenues decreased slightly from RMB48.2 million in 2023 to RMB48.0 million ($6.6 million) in 2024 [4] - Selling expenses decreased by 2.5% from RMB10.6 million ($1.5 million) in 2023 to RMB10.4 million ($1.4 million) in 2024 [5] - General and administrative expenses decreased by 17.0% from RMB76.8 million ($10.6 million) in 2023 to RMB63.8 million ($8.8 million) in 2024 [5] - Research and development expenses increased by 62.3% from RMB8.8 million ($1.2 million) in 2023 to RMB14.3 million ($2.0 million) in 2024 [5] Management Commentary - The CEO noted that fiscal year 2024 was a year of change and opportunity, with an overall rise in revenue due to increased business volume as the economy recovers [3] - The company plans to expand its focus from oilfield services to broader energy sectors, including carbon-zero opportunities and alternative materials [3] - The company is actively exploring the chemical recycling business and has reached preliminary cooperation agreements with key customers [3] Cash and Investments - As of June 30, 2024, the company had cash of approximately RMB110.0 million ($15.1 million) and short-term investments of approximately RMB88.1 million ($12.1 million) [5]

Company Overview - Recon Technology (RCON) experienced a significant drop of 5.41% in its stock price, reaching $2.80 per share [1] - The company reported a revenue of $6.25 million and a net loss of $3.12 million, resulting in an earnings per share (EPS) of -$1.14 [1] - The gross profit for the company was $1.67 million, with a price-to-earnings (P/E) ratio of -0.86 [1] - Currently, there are no institutional ratings available for Recon Technology, with no buy, hold, or sell recommendations [1] Industry Context - The Oil & Gas Equipment & Services sector experienced an overall growth of 0.10% [2] - Notable stocks in this sector include Enerflex Ltd, Geospace Technologies Corp, and Profrac Holding Corp, which saw significant gains [2] - Active stocks such as Enservco Corp, Nine Energy Service, and Landbridge Co Llc had turnover rates of 2.82%, 2.45%, and 1.34% respectively [2] - Stocks with high volatility include Nine Energy Service (20.16%), Enservco Corp (15.83%), and Recon Technology (10.81%) [2] Business Segments - Recon Technology is a leading oilfield service company specializing in oilfield automation products, oil & gas production transportation equipment, and engineering services [2] - The company operates in four main segments: Automation Products & Software, Equipment & Accessories, Platform Outsourcing Services, and Oilfield Environmental Protection [2] - The Automation Products & Software segment contributes the majority of the company's revenue [2]

[Condensed Consolidated Interim Balance Sheets](index=1&type=section&id=Condensed%20Consolidated%20Interim%20Balance%20Sheets) [Balance Sheet Overview](index=1&type=section&id=Balance%20Sheet%20Overview) The company's total assets and liabilities decreased, leading to a reduction in total equity from June to December 2023 | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Total Assets | ¥531,824,577 | ¥483,256,229 | $68,065,215 | | Total Liabilities | ¥92,673,674 | ¥67,885,873 | $9,561,524 | | Total Equity | ¥439,150,903 | ¥415,370,356 | $58,503,691 | - Current assets decreased from **¥504.4 million to ¥425.1 million**, primarily driven by a reduction in short-term investments and loans to third parties[2](index=2&type=chunk) - Current liabilities increased from **¥61.0 million to ¥66.9 million**, with a notable decrease in warrant liability[2](index=2&type=chunk) [Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) [Operating Results and Net Loss](index=2&type=section&id=Operating%20Results%20and%20Net%20Loss) The company reported a significant reduction in net loss for H2 2023 despite a slight revenue decrease and higher operating expenses | Metric | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | Change (RMB) | | :--- | :--- | :--- | :--- | :--- | | Revenue | ¥45,559,591 | ¥45,256,672 | $6,374,269 | -0.66% | | Cost of revenue | ¥32,427,772 | ¥33,150,930 | $4,669,211 | +2.23% | | Gross profit | ¥13,131,819 | ¥12,105,742 | $1,705,058 | -7.82% | | Operating expenses | ¥28,202,033 | ¥34,907,808 | $4,916,663 | +23.78% | | Loss from operations | ¥(15,070,214) | ¥(22,802,066) | $(3,211,605) | +51.30% | | Net loss | ¥(29,872,691) | ¥(23,107,851) | $(3,254,673) | -22.64% | | Net loss attributable to Recon Technology, Ltd | ¥(29,876,418) | ¥(22,554,022) | $(3,176,668) | -24.50% | | Loss per share - basic and diluted | ¥(15.46) | ¥(8.27) | $(1.16) | -46.51% | - Allowance for credit losses shifted from a **net recovery of ¥(7.1) million** in H2 2022 to a **provision of ¥1.6 million** in H2 2023, impacting operating expenses[7](index=7&type=chunk) - **Interest income significantly increased** from ¥5.2 million in H2 2022 to ¥12.1 million in H2 2023, while loss in fair value changes of warrants liability decreased substantially[7](index=7&type=chunk) [Condensed Consolidated Interim Statements of Changes in Shareholders' Equity](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) [Shareholders' Equity Movements](index=3&type=section&id=Shareholders%27%20Equity%20Movements) Total equity decreased to ¥415.4 million due to net loss and foreign currency adjustments, partially offset by capital from share issuances | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Total shareholders' equity | ¥449,206,962 | ¥425,980,244 | $59,998,062 | | Non-controlling interests | ¥(10,056,059) | ¥(10,609,888) | $(1,494,371) | | Total equity | ¥439,150,903 | ¥415,370,356 | $58,503,691 | | Net loss for the period | N/A | ¥(22,554,022) | $(3,254,673) | | Foreign currency translation adjustment | N/A | ¥(4,609,399) | $(649,220) | - Additional paid-in capital increased from **¥580.3 million to ¥584.3 million**, reflecting restricted shares issued for services and management[3](index=3&type=chunk)[10](index=10&type=chunk) - Accumulated deficit increased from **¥(170.4) million to ¥(193.0) million**, driven by the net loss[3](index=3&type=chunk)[10](index=10&type=chunk) [Condensed Consolidated Interim Statements of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) [Cash Flow Analysis](index=4&type=section&id=Cash%20Flow%20Analysis) The company experienced a net increase in cash, driven by significant cash generated from investing activities that offset operating and financing outflows | Cash Flow Activity | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ¥(25,931,236) | ¥(6,609,801) | $(930,972) | | Net cash (used in) generated by investing activities | ¥(34,082,522) | ¥61,558,080 | $8,670,274 | | Net cash provided by (used in) financing activities | ¥1,523,073 | ¥(32,007,826) | $(4,508,207) | | Effect of exchange rate fluctuation | ¥10,633,748 | ¥(5,945,117) | $(837,352) | | Net increase (decrease) in cash and restricted cash | ¥(47,856,937) | ¥16,995,336 | $2,393,743 | | Cash and restricted cash at end of year | ¥269,841,480 | ¥121,852,681 | $17,162,591 | - Cash used in operating activities **decreased significantly** from ¥25.9 million in H2 2022 to ¥6.6 million in H2 2023, partly due to changes in working capital[13](index=13&type=chunk) - Investing activities shifted from a **net cash outflow of ¥34.1 million** to a **net cash inflow of ¥61.6 million**, driven by investment redemptions and loan repayments[13](index=13&type=chunk) - Financing activities resulted in a **net cash outflow of ¥32.0 million** in H2 2023, primarily due to the redemption of warrants[13](index=13&type=chunk) [NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS](index=5&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) [Company Overview and Business Scope](index=5&type=section&id=Company%20Overview%20and%20Business%20Scope) The company provides specialized equipment, automation, and services to the PRC energy industry and has expanded into plastic chemical recycling - The Company provides specialized equipment, automation systems, tools, chemicals, outsourcing platform services, and field services to energy industry companies mainly in the PRC[16](index=16&type=chunk) - The Company's business scope includes oilfield equipment, production efficiency improvement, automation solutions, environmental treatment, gas station platforms, and plastic chemical cycles[28](index=28&type=chunk) [Variable Interest Entities (VIEs) Structure](index=5&type=section&id=Variable%20Interest%20Entities%20%28VIEs%29%20Structure) The company conducts a significant portion of its business through consolidated Variable Interest Entities (VIEs) in the PRC - The Company conducts business through PRC legal entities via VIE Agreements, which grant substantial influence and allow for consolidation[16](index=16&type=chunk)[17](index=17&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - Subsidiaries of VIEs include Huang Hua BHD, Gan Su BHD, Qing Hai BHD, and Future Gas Station (FGS)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The Company's ownership interest in FGS **increased to 51%** in January 2021, leading to its consolidation[21](index=21&type=chunk) - Risks associated with the VIE structure include potential PRC government actions that could limit the Company's ability to enforce contractual arrangements[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Non-VIE Operations](index=7&type=section&id=Non-VIE%20Operations) The company established wholly-owned subsidiaries to operate in the Chinese chemical recycling industry - Shandong Recon Renewable Resources Technology Co, Ltd was established on October 10, 2023, with **registered capital of $30.0 million**, focusing on Plastic chemical cycles business[27](index=27&type=chunk) - Guangxi Recon Renewable Resources Technology Co, Ltd was established on February 22, 2024, with **registered capital of $30.0 million**, also focusing on Plastic chemical cycles business[27](index=27&type=chunk) [NOTE 2. SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%202.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [Basis of Presentation and Consolidation](index=7&type=section&id=Basis%20of%20Presentation%20and%20Consolidation) Financial statements are prepared under U.S. GAAP, with RMB as the reporting currency, and consolidate all subsidiaries and VIEs - Financial statements are prepared in conformity with U.S. GAAP, with RMB as the reporting currency and USD for convenience (translated at **¥7.0999 = US$1.00**)[29](index=29&type=chunk)[32](index=32&type=chunk) - The consolidated financial statements include the accounts of the Company, all subsidiaries, VIEs, and subsidiaries of VIEs, with all intercompany transactions eliminated[29](index=29&type=chunk) - A VIE is consolidated by its primary beneficiary, which has the power to direct activities and absorb significant losses or benefits[30](index=30&type=chunk)[31](index=31&type=chunk) [Key Accounting Estimates and Fair Value Measurements](index=8&type=section&id=Key%20Accounting%20Estimates%20and%20Fair%20Value%20Measurements) Financial statement preparation involves significant management estimates, and fair value is determined using a three-level hierarchy - Significant accounting estimates include allowance for credit losses, useful lives of assets, impairment assessments, and fair value of share-based payments[33](index=33&type=chunk) - Fair value measurements follow a **three-level hierarchy** (Level 1: quoted prices; Level 2: observable inputs; Level 3: unobservable inputs)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - The carrying amounts of short-term financial instruments approximate fair value due to their immediate or short-term maturity[38](index=38&type=chunk) [Asset and Liability Accounting Policies](index=9&type=section&id=Asset%20and%20Liability%20Accounting%20Policies) The company's policies cover various assets and liabilities, including investments, receivables, inventory, goodwill, and long-lived assets - Short-term investments are wealth management products carried at fair value due to short-term maturities[39](index=39&type=chunk) - Accounts receivable and other receivables are carried at carrying amount less an allowance for credit loss, using the **CECL methodology**[40](index=40&type=chunk)[41](index=41&type=chunk) - Inventories are stated at the **lower of cost or net realizable value** on a first-in-first-out basis[44](index=44&type=chunk) - Property and equipment are stated at cost and depreciated using the straight-line method over estimated useful lives of **2-20 years**[44](index=44&type=chunk)[45](index=45&type=chunk)[49](index=49&type=chunk) - Goodwill is tested for impairment annually by comparing the fair value of a reporting unit with its carrying amount[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Equity investments are measured at fair value through earnings, at cost less impairment, or using the equity method based on influence level[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) [Revenue Recognition and Contract Balances](index=12&type=section&id=Revenue%20Recognition%20and%20Contract%20Balances) Revenue is recognized under ASC 606 when performance obligations are satisfied, with revenue disaggregated by source - Revenue is recognized when control of promised goods or services is transferred to customers, following a **five-step model (ASC 606)**[57](index=57&type=chunk)[58](index=58&type=chunk) - Revenue sources include Automation Products, Equipment, Oilfield Environmental Protection Service, and Platform Outsourcing Services[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) | Contract Balance | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Contract costs, net | ¥49,572,685 | ¥37,323,824 | $5,256,951 | | Contract liabilities | ¥2,748,365 | ¥4,888,749 | $688,566 | - The Company elected practical expedients for incremental costs of obtaining a contract and for significant financing components[71](index=71&type=chunk)[72](index=72&type=chunk) [Other Accounting Policies](index=15&type=section&id=Other%20Accounting%20Policies) Other policies cover share-based compensation, R&D, leases, income taxes, EPS, warrants, and recently issued accounting pronouncements - Share-based compensation is measured at grant date fair value, R&D is expensed as incurred, and shipping costs are included in selling expenses[73](index=73&type=chunk) - Leases are accounted for under **ASC 842**, recognizing right-of-use (ROU) assets and lease liabilities for operating leases[74](index=74&type=chunk)[75](index=75&type=chunk) - Income taxes are based on current and deferred taxes, with benefits from uncertain tax positions recognized if **more likely than not** to be sustained[76](index=76&type=chunk)[77](index=77&type=chunk) - Earnings per share is computed based on weighted average Ordinary Shares outstanding, retrospectively restated for the **1-for-18 reverse stock split**[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - Warrants are classified as equity or liability based on specific terms, with liability-classified warrants re-valued at each reporting period[83](index=83&type=chunk)[84](index=84&type=chunk) - The Company is evaluating the impact of recently issued ASUs on segment reporting and income taxes[85](index=85&type=chunk)[86](index=86&type=chunk) [NOTE 3. ACCOUNTS RECEIVABLE, NET](index=18&type=section&id=NOTE%203.%20ACCOUNTS%20RECEIVABLE%2C%20NET) [Accounts Receivable and Allowance for Credit Losses](index=18&type=section&id=Accounts%20Receivable%20and%20Allowance%20for%20Credit%20Losses) Net accounts receivable increased to ¥30.8 million, with a corresponding increase in the allowance for credit losses | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Trade accounts receivable (Third Parties) | ¥27,606,257 | ¥31,553,107 | $4,444,162 | | Allowance for credit losses | (¥152,842) | (¥739,222) | $(104,117) | | Total third-parties, net | ¥27,453,415 | ¥30,813,885 | $4,340,045 | - **Provision for credit losses** was ¥1.1 million for H2 2023, compared to a net recovery of ¥4.0 million for the same period in 2022[90](index=90&type=chunk) | Allowance for Doubtful Accounts Movement | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Beginning balance | ¥9,612,470 | ¥995,449 | $140,206 | | Charge to (reversal of) credit losses | (¥8,767,356) | ¥1,051,564 | $148,110 | | Ending balance | ¥995,449 | ¥2,047,013 | $288,316 | - Approximately **28.6%** (¥8.8 million) of the net outstanding balance as of December 31, 2023, has been collected subsequently[91](index=91&type=chunk) [NOTE 4. NOTES RECEIVABLE](index=18&type=section&id=NOTE%204.%20NOTES%20RECEIVABLE) [Notes Receivable Status](index=18&type=section&id=Notes%20Receivable%20Status) Notes receivable significantly increased to ¥12.5 million, with all outstanding notes subsequently collected | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Notes receivable | ¥3,742,390 | ¥12,532,717 | $1,765,196 | - Notes receivable are non-interest-bearing commercial bills from customers, with maturities generally ranging from **three to six months**[93](index=93&type=chunk) - As of the report date, **100%** of the notes receivable outstanding at December 31, 2023, have been subsequently collected[93](index=93&type=chunk) [NOTE 5. OTHER RECEIVABLES, NET](index=19&type=section&id=NOTE%205.%20OTHER%20RECEIVABLES%2C%20NET) [Other Receivables and Allowance for Credit Losses](index=19&type=section&id=Other%20Receivables%20and%20Allowance%20for%20Credit%20Losses) Net other receivables increased to ¥4.2 million, while the allowance for credit losses decreased due to a net recovery | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Business advances to officers and staffs | ¥854,162 | ¥1,849,761 | $260,533 | | Deposits for projects | ¥1,247,992 | ¥1,224,966 | $172,533 | | VAT recoverable | ¥690,053 | ¥577,545 | $81,346 | | Others | ¥1,392,126 | ¥1,134,950 | $159,854 | | Allowance for credit losses | (¥1,994,960) | (¥602,444) | $(84,852) | | Other receivable - current portion | ¥2,185,733 | ¥4,184,778 | $589,414 | - **Net recovery of provision** for credit losses of other receivables was ¥1.4 million for H2 2023, a reversal from a provision of ¥0.5 million in the prior year[98](index=98&type=chunk) | Allowance for Credit Losses Movement | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Beginning balance | ¥619,444 | ¥1,994,960 | $280,984 | | Charge to (reversal of) allowance | ¥1,375,516 | (¥1,392,516) | $(196,132) | | Ending balance | ¥1,994,960 | ¥602,444 | $84,852 | [NOTE 6. LOANS TO THIRD PARTIES](index=19&type=section&id=NOTE%206.%20LOANS%20TO%20THIRD%20PARTIES) [Loans to Third Parties Status](index=19&type=section&id=Loans%20to%20Third%20Parties%20Status) Loans to third parties decreased to ¥79.4 million due to significant repayments of short-term funding to business partners | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Working fund to third party companies | ¥123,055,874 | ¥97,874,144 | $13,785,285 | | Less: Long term portion | — | (¥18,500,000) | $(2,605,671) | | Loans to third parties | ¥123,055,874 | ¥79,374,144 | $11,179,614 | - Most loans bear interest and have terms of **no more than one year**, except for one three-year loan[101](index=101&type=chunk) - Approximately **63.1%** (¥61.8 million) of the December 31, 2023 balance was collected by the report date[102](index=102&type=chunk) [NOTE 7. CONTRACT COSTS, NET](index=20&type=section&id=NOTE%207.%20CONTRACT%20COSTS%2C%20NET) [Contract Costs and Allowance for Credit Losses](index=20&type=section&id=Contract%20Costs%20and%20Allowance%20for%20Credit%20Losses) Net contract costs decreased to ¥37.3 million, while the allowance for credit losses increased due to a provision in the current period | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Third Party Contract costs | ¥52,158,840 | ¥41,886,747 | $5,899,625 | | Allowance for credit losses | (¥2,586,155) | (¥4,562,923) | $(642,674) | | Total contract costs, net | ¥49,572,685 | ¥37,323,824 | $5,256,951 | - **Provision for credit losses** of contract costs was ¥1.9 million for H2 2023, compared to a net recovery of ¥3.8 million in the prior year period[104](index=104&type=chunk) | Allowance for Credit Losses Movement | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Beginning balance | ¥4,063,482 | ¥2,586,155 | $364,252 | | Reversal of allowance | (¥1,720,095) | ¥1,939,135 | $273,122 | | Charge to cost of sales | ¥242,768 | ¥37,633 | $5,300 | | Ending balance | ¥2,586,155 | ¥4,562,923 | $642,674 | - Approximately **18.5%** (¥6.9 million) of the December 31, 2023 balance has been subsequently realized[103](index=103&type=chunk) [NOTE 8. PROPERTY AND EQUIPMENT, NET](index=20&type=section&id=NOTE%208.%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) [Property and Equipment Details](index=20&type=section&id=Property%20and%20Equipment%20Details) Net property and equipment decreased slightly to ¥23.5 million, with depreciation expenses for the period totaling ¥1.4 million | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Total cost | ¥39,992,837 | ¥38,592,274 | $5,435,608 | | Less: accumulated depreciation | (¥14,297,511) | (¥14,157,788) | $(1,994,083) | | Less: accumulated impairment | (¥942,462) | (¥942,462) | $(132,743) | | Property and equipment, net | ¥24,752,864 | ¥23,492,024 | $3,308,782 | - Depreciation expenses were **¥1.4 million** ($0.2 million) for the six months ended December 31, 2023[107](index=107&type=chunk) - Income from property and equipment disposal was **¥32,252** ($4,543) for the six months ended December 31, 2023[109](index=109&type=chunk) [NOTE 9. BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY](index=21&type=section&id=NOTE%209.%20BUSINESS%20ACQUISITION%20AND%20INVESTMENT%20IN%20UNCONSOLIDATED%20ENTITY) [Step Acquisition of Future Gas Station (Beijing) Technology, Ltd (FGS)](index=21&type=section&id=Step%20Acquisition%20of%20Future%20Gas%20Station%20%28Beijing%29%20Technology%2C%20Ltd%20%28FGS%29) The company increased its ownership in FGS to 51% in February 2021 through a step acquisition, leading to its consolidation - The Company's ownership interest in FGS increased from 8% to 43% in 2018, and further to **51% in February 2021**, leading to consolidation[21](index=21&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - The 8% equity acquisition in FGS was in exchange for waiving performance goals and cancelling lock-up terms on restricted shares[113](index=113&type=chunk) - A **step acquisition gain of ¥979,254** was recognized during the year ended June 30, 2021, from revaluing the previously held equity interest[113](index=113&type=chunk) [Goodwill and Intangible Assets](index=22&type=section&id=Goodwill%20and%20Intangible%20Assets) Goodwill and intangible assets from the FGS acquisition were fully impaired as they were unable to generate sufficient future cash flow | Metric | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | | Goodwill | ¥6,996,895 | $985,492 | | Less: impairment | (¥6,996,895) | $(985,492) | | Carrying value of goodwill | ¥— | $— | | Metric | December 31, 2023 (RMB) | December 31, 2023 (USD) | Average Useful Life (Years) | | :--- | :--- | :--- | :--- | | Intangible assets - customer relationship | ¥7,000,000 | $985,929 | 10 | | Less: accumulated amortization | (¥1,750,000) | $(246,482) | | | Less: impairment | (¥5,250,000) | $(739,447) | | | Intangible assets - customer relationship, net | ¥— | $— | | - Goodwill and intangible assets (customer relationship) were **fully impaired** as of December 31, 2023, due to their inability to generate enough future cash flow[119](index=119&type=chunk)[124](index=124&type=chunk) [NOTE 10. LEASES](index=23&type=section&id=NOTE%2010.%20LEASES) [Operating Lease Assets and Liabilities](index=23&type=section&id=Operating%20Lease%20Assets%20and%20Liabilities) The company recognizes right-of-use assets and lease liabilities for its office and land leases, with an impairment recorded for ROU assets | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Rights of use lease assets, net - current | ¥— | ¥879,288 | $123,845 | | Rights of use lease assets, net - non-current | ¥2,654,900 | ¥16,204,906 | $2,282,413 | | Operating lease liabilities – current | ¥3,066,146 | ¥722,857 | $101,812 | | Operating lease liabilities – non-current | ¥25,144 | ¥341,366 | $48,080 | | Total operating lease liabilities | ¥3,091,290 | ¥1,064,223 | $149,892 | - An **impairment of ¥834,975** was recorded for ROU lease assets due to the inability of FGS's ROU to generate enough future cash flow[75](index=75&type=chunk)[130](index=130&type=chunk) | Lease Term and Discount Rate | June 30, 2023 | December 31, 2023 | | :--- | :--- | :--- | | Weighted average remaining lease term (years) | 23.90 | 23.50 | | Weighted average discount rate | 5.0 % | 5.0 % | - Operating lease costs for H2 2023 were **¥1.7 million** ($0.23 million), a slight decrease from the prior year period[130](index=130&type=chunk) [NOTE 11. OTHER PAYABLES](index=24&type=section&id=NOTE%2011.%20OTHER%20PAYABLES) [Other Payables Breakdown](index=24&type=section&id=Other%20Payables%20Breakdown) Total other payables to third parties significantly decreased to ¥1.7 million, primarily due to reductions in professional service fees | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Professional service fees (Third Parties) | ¥2,246,101 | ¥304,474 | $42,884 | | Distributors and employees | ¥3,073,289 | ¥712,173 | $100,307 | | Accrued expenses | ¥200,218 | ¥193,274 | $27,222 | | Others | ¥299,402 | ¥478,245 | $67,360 | | Total (Third Parties) | ¥5,819,010 | ¥1,688,166 | $237,773 | | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Expenses paid by major shareholders | ¥1,796,309 | ¥1,663,858 | $234,350 | | Due to family members of owners of BHD and FGS | ¥545,159 | ¥545,159 | $76,784 | | Due to management staff for costs incurred | ¥250,927 | ¥— | $— | | Total (Related Parties) | ¥2,592,395 | ¥2,209,017 | $311,134 | [NOTE 12. TAXES PAYABLE](index=25&type=section&id=NOTE%2012.%20TAXES%20PAYABLE) [Taxes Payable Breakdown](index=25&type=section&id=Taxes%20Payable%20Breakdown) Total taxes payable increased to ¥1.7 million, driven by increases in VAT, income tax, and other taxes payable | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | VAT payable | ¥699,601 | ¥720,872 | $101,533 | | Income tax payable | ¥440,030 | ¥536,071 | $75,504 | | Other taxes payable | ¥23,375 | ¥445,955 | $62,811 | | Total taxes payable | ¥1,163,006 | ¥1,702,898 | $239,848 | [NOTE 13. BANK LOANS](index=25&type=section&id=NOTE%2013.%20BANK%20LOANS) [Short-term Bank Loans](index=25&type=section&id=Short-term%20Bank%20Loans) Short-term bank loans remained stable at approximately ¥12.3 million, secured by various guarantees and collateral | Bank | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Bank of Kunlun | ¥950,000 | ¥827,000 | $116,481 | | ICBC | ¥10,000,000 | ¥10,007,639 | $1,409,546 | | China Construction Bank | ¥1,501,481 | ¥1,501,646 | $211,502 | | Total short-term bank loans | ¥12,451,481 | ¥12,336,285 | $1,737,529 | - The Bank of Kunlun loan (6.0% interest) is **guaranteed by a non-controlling shareholder** and collateralized by accounts receivable[136](index=136&type=chunk) - The ICBC revolving loan facility (2.5% interest) is **pledged by a founder's self-owned housing property** and has been fully repaid post-period[137](index=137&type=chunk) - The China Construction Bank loan (3.95% interest) is **guaranteed by a non-controlling shareholder** of FGS and has been fully repaid post-period[138](index=138&type=chunk) - Interest expense for short-term bank loans was **¥159,276** ($22,434) for H2 2023[138](index=138&type=chunk) [NOTE 14. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES](index=26&type=section&id=NOTE%2014.%20SHORT-TERM%20BORROWINGS%20DUE%20TO%20RELATED%20PARTIES) [Related Party Borrowings](index=26&type=section&id=Related%20Party%20Borrowings) Short-term borrowings from related parties, primarily a founder, remained stable at approximately ¥20.0 million | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Short-term borrowing from a Founder (3.65% interest, due Dec 26, 2023) | ¥10,004,055 | ¥— | $— | | Short-term borrowing from a Founder (3.40% interest, due June 4, 2024) | ¥4,993,950 | ¥4,994,892 | $703,516 | | Short-term borrowing from a Founder (3.40% interest, due June 16, 2024) | ¥5,020,217 | ¥5,021,164 | $707,216 | | Short-term borrowing from a Founder (3.45% interest, due Dec 28, 2024) | ¥— | ¥10,003,833 | $1,409,010 | | Total short-term borrowings due to related parties | ¥20,018,222 | ¥20,019,889 | $2,819,742 | - No short-term borrowings due to related parties were guaranteed or collateralized as of December 31, 2023[143](index=143&type=chunk) - Interest expense for these borrowings was **¥338,338** ($47,654) for H2 2023, an increase from the prior year period[143](index=143&type=chunk) - A supplemental agreement extended the term of one loan to **April 29, 2027**, with an adjusted interest rate of 3.75%[142](index=142&type=chunk) [NOTE 15. CLASS A ORDINARY SHARES](index=26&type=section&id=NOTE%2015.%20CLASS%20A%20ORDINARY%20SHARES) [Share Offerings and Capital Structure Changes](index=26&type=section&id=Share%20Offerings%20and%20Capital%20Structure%20Changes) The company's capital structure changed via a reverse stock split and share reclassification, with recent offerings of shares and warrants - The authorized share capital was amended in April 2021 to include **Class A (1 vote) and Class B (15 votes) Ordinary Shares**[144](index=144&type=chunk) - A registered direct offering in March 2023 raised approximately **$8.0 million** through the sale of Class A Ordinary Shares and pre-funded warrants[146](index=146&type=chunk)[147](index=147&type=chunk) - All **1,175,000 pre-funded warrants** issued in March 2023 were exercised by October 16, 2023[147](index=147&type=chunk) | Pre-Funded Warrants Activity | June 30, 2022 | June 30, 2023 | December 31, 2023 | | :--- | :--- | :--- | :--- | | Outstanding | — | 65,278 | — | | Issued | — | 65,278 | — | | Exercised | — | — | (65,278) | - The statutory reserve fund balance remained at **¥4.1 million** ($0.6 million) as of December 31, 2023[149](index=149&type=chunk) [NOTE 16. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS](index=27&type=section&id=NOTE%2016.%20ORDINARY%20SHARES%20PURCHASE%20WARRANTS%20ISSUED%20TO%20INVESTORS) [Warrant Liability and Fair Value Changes](index=27&type=section&id=Warrant%20Liability%20and%20Fair%20Value%20Changes) Warrants are classified as liabilities and re-valued periodically, with significant decreases in fair value and a full redemption of 2023 warrants - Warrants issued in June 2021 and March 2023 are **classified as liabilities** due to redemption features, with fair value changes recorded through earnings[153](index=153&type=chunk)[157](index=157&type=chunk) | Warrant Liability (Warrant 2021) | June 30, 2023 (USD) | December 31, 2023 (USD) | | :--- | :--- | :--- | | Fair value | $1,930,000 | $140,000 | - The Company **bought back 7,950,769 warrants** on December 14, 2023, leaving 863,333 warrants outstanding[154](index=154&type=chunk) | Warrant Liability (Warrant 2023) | June 30, 2023 (USD) | December 31, 2023 (USD) | | :--- | :--- | :--- | | Fair value | $2,430,000 | $nil | - All **10,002,500 warrants** issued in March 2023 were bought back by the Company on December 14, 2023[157](index=157&type=chunk) - An estimated liability of **$1,200,000** was accrued for potential future transaction compensation related to warrant repurchases[164](index=164&type=chunk) [NOTE 17. SHARE-BASED COMPENSATION](index=30&type=section&id=NOTE%2017.%20SHARE-BASED%20COMPENSATION) [Share Options and Restricted Shares](index=30&type=section&id=Share%20Options%20and%20Restricted%20Shares) The company has outstanding share options and has granted restricted shares to management, employees, and consultants | Share Options Activity | June 30, 2022 | June 30, 2023 | December 31, 2023 | | :--- | :--- | :--- | :--- | | Outstanding Shares | 4,444 | 4,444 | 4,444 | | Average Exercise Price | $148.50 | $148.50 | $148.50 | - Share-based compensation expense for restricted shares issued for management was **¥2.9 million** ($0.4 million) for H2 2023[174](index=174&type=chunk) - Share-based compensation expense for restricted shares issued for services was **¥1.1 million** ($0.15 million) for H2 2023[179](index=179&type=chunk) - Total unrecognized share-based compensation expense was approximately **¥4.7 million** ($0.7 million) as of December 31, 2023[174](index=174&type=chunk) | Restricted Share Grants | June 30, 2022 | June 30, 2023 | December 31, 2023 | | :--- | :--- | :--- | :--- | | Non-vested | 120,407 | 171,938 | 60,827 | [NOTE 18. INCOME TAX](index=32&type=section&id=NOTE%2018.%20INCOME%20TAX) [Income Tax Provision and Deferred Taxes](index=32&type=section&id=Income%20Tax%20Provision%20and%20Deferred%20Taxes) Key PRC subsidiaries benefit from a reduced 15% tax rate, and the company has significant net operating loss carryforwards - Nanjing Recon and BHD are approved as high-technology companies, subject to a **reduced income tax rate of 15%**[183](index=183&type=chunk)[184](index=184&type=chunk) | Income Tax Expense | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | | :--- | :--- | :--- | :--- | | Current income tax provision | ¥9,180 | ¥96,041 | $13,527 | | Expense for income tax | ¥9,180 | ¥96,041 | $13,527 | | Deferred Tax Assets, Net | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Allowance for credit losses | ¥1,019,592 | ¥1,285,544 | $181,065 | | Impairment for inventory | ¥90,322 | ¥35,646 | $5,021 | | Net operating loss carryforwards | ¥23,290,731 | ¥24,263,351 | $3,417,422 | | Subtotal | ¥24,400,645 | ¥25,584,541 | $3,603,507 | | Less: Valuation allowance | (¥24,107,246) | (¥25,304,762) | $(3,564,101) | | Total deferred tax assets, net | ¥293,399 | ¥279,779 | $39,406 | - As of December 31, 2023, the company had cumulative **net operating loss (NOL) carryforwards of approximately ¥124.6 million** ($17.6 million)[186](index=186&type=chunk)[188](index=188&type=chunk) [NOTE 19. NON-CONTROLLING INTEREST](index=34&type=section&id=NOTE%2019.%20NON-CONTROLLING%20INTEREST) [Non-Controlling Interest Details](index=34&type=section&id=Non-Controlling%20Interest%20Details) Total non-controlling interests in consolidated VIEs decreased to ¥(10.6) million, influenced by retained earnings deficit | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Paid-in capital | ¥6,656,000 | ¥6,656,000 | $937,478 | | Capital contribution receivable due from noncontrolling Interest | (¥48,870,000) | (¥48,870,000) | $(6,883,196) | | Unappropriated retained earnings (deficit) | (¥2,601,356) | (¥3,155,185) | $(444,398) | | Accumulated other comprehensive loss | (¥30,703) | (¥30,703) | $(4,324) | | Valuation increase shared by minority shareholders | ¥34,790,000 | ¥34,790,000 | $4,900,069 | | Total noncontrolling interests | ¥(10,056,059) | ¥(10,609,888) | $(1,494,371) | [NOTE 20. CONCENTRATIONS](index=35&type=section&id=NOTE%2020.%20CONCENTRATIONS) [Credit and Customer Concentration Risks](index=35&type=section&id=Credit%20and%20Customer%20Concentration%20Risks) The company faces significant credit risk from unprotected cash balances and high customer concentration in revenue and receivables - As of December 31, 2023, the Company had approximately **¥96.8 million** in PRC banks and **¥152.9 million** in Hong Kong banks, exceeding insured limits[196](index=196&type=chunk) | Customer Concentration (H2 2023) | % of Total Revenue | % of Trade Accounts Receivable, Net | | :--- | :--- | :--- | | CNPC | 56% | 34% | | SINOPEC | 19% | 14% | | CNOOC | 15% | 21% | | Another customer | 10% | 30% | - For H2 2023, CNPC, SINOPEC, and CNOOC collectively represented **90% of the Company's total revenue**[197](index=197&type=chunk) [NOTE 21. COMMITMENTS AND CONTINGENCY](index=35&type=section&id=NOTE%2021.%20COMMITMENTS%20AND%20CONTINGENCY) [Legal Contingencies](index=35&type=section&id=Legal%20Contingencies) A subsidiary is involved in legal disputes for which settlements have been reached and payments are underway - Gan Su BHD was ordered to pay approximately **¥1.8 million** in a civil judgment, of which ¥0.9 million has been paid[200](index=200&type=chunk) - A settlement agreement requires Gan Su BHD to pay a total of **¥2.8 million**, of which ¥1.3 million has been paid[201](index=201&type=chunk) - The estimated severance payments liability as of December 31, 2023, was approximately **¥7.9 million** ($1.1 million), which is not reflected in the financial statements[198](index=198&type=chunk) [Purchase and Lease Commitments](index=37&type=section&id=Purchase%20and%20Lease%20Commitments) The company has future minimum purchase commitments of ¥23.7 million and short-term office lease commitments | Purchase Commitment Maturity | RMB (Unaudited) | US Dollars (Unaudited) | | :--- | :--- | :--- | | Twelve months ending December 31, 2024 | ¥23,357,995 | $3,289,905 | | 2025 | ¥300,000 | $42,254 | | Total minimum payments required | ¥23,657,995 | $3,332,159 | | Office Lease Commitment (Short-term) | RMB (Unaudited) | US Dollars (Unaudited) | | :--- | :--- | :--- | | Twelve months ending December 31, 2024 | ¥692,500 | $97,537 | | Total | ¥692,500 | $97,537 | [NOTE 22. RELATED PARTY TRANSACTIONS AND BALANCES](index=38&type=section&id=NOTE%2022.%20RELATED%20PARTY%20TRANSACTIONS%20AND%20BALANCES) [Related Party Leases and Guarantees](index=38&type=section&id=Related%20Party%20Leases%20and%20Guarantees) The company leases office space from its founders and their family members and receives loan guarantees from them - The Company leases office space from founders and their family members, with an annual rental expense of approximately **¥1.1 million** ($0.16 million)[207](index=207&type=chunk) | Lessee | Lessor | Rent Period | Monthly Rent (RMB) | Monthly Rent (USD) | | :--- | :--- | :--- | :--- | :--- | | Nanjing Recon | One of the founders | April 1, 2022 - March 31, 2024 | ¥40,000 | $5,634 | | BHD | One of the founders | January 1, 2023 - Dec 31, 2023 | ¥31,667 | $4,460 | | BHD | One of the founders | January 1, 2023 - Dec 31, 2023 | ¥22,500 | $3,169 | - The Company's founders provide guarantees and collateral for the Company's short-term bank loans[209](index=209&type=chunk) [NOTE 23. VARIABLE INTEREST ENTITIES](index=38&type=section&id=NOTE%2023.%20VARIABLE%20INTEREST%20ENTITIES) [Summary Financial Information of Consolidated VIEs](index=38&type=section&id=Summary%20Financial%20Information%20of%20Consolidated%20VIEs) The consolidated VIEs saw decreased assets and liabilities, and performance shifted from a net income to a net loss in H2 2023 | Metric (VIEs and Subsidiaries) | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Total Assets | ¥204,005,811 | ¥196,760,289 | $27,713,106 | | Total Liabilities | ¥320,509,345 | ¥315,835,343 | $44,484,476 | | Financial Performance (VIEs and Subsidiaries) | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | | :--- | :--- | :--- | :--- | | Revenues | ¥45,559,591 | ¥45,256,672 | $6,374,269 | | Operating expenses | ¥11,643,918 | ¥21,646,029 | $3,048,779 | | Net income (loss) | ¥2,974,474 | ¥(6,890,440) | $(970,498) | - The financial performance of VIEs and their subsidiaries shifted from a **net income of ¥3.0 million** in H2 2022 to a **net loss of ¥6.9 million** in H2 2023[213](index=213&type=chunk) [NOTE 24. SEGMENT REPORTING](index=40&type=section&id=NOTE%2024.%20SEGMENT%20REPORTING) [Operating Segment Performance](index=40&type=section&id=Operating%20Segment%20Performance) Total revenue remained stable, with a significant revenue increase in equipment and accessories offset by decreases in other segments - The Company has four operating segments: automation product and software, equipment and accessories, oilfield environmental protection, and platform outsourcing services[215](index=215&type=chunk) | Segment Revenue (H2 2023) | RMB | USD | | :--- | :--- | :--- | | Automation product and software | ¥17,552,892 | $2,472,273 | | Equipment, accessories and others | ¥17,867,404 | $2,516,571 | | Oilfield environmental protection | ¥8,053,696 | $1,134,339 | | Platform Outsourcing Services | ¥1,782,680 | $251,085 | | Total revenue | ¥45,256,672 | $6,374,268 | | Segment Revenue Change (H2 2022 vs H2 2023) | H2 2022 (RMB) | H2 2023 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Automation product and software | ¥19,055,227 | ¥17,552,892 | -7.89% | | Equipment, accessories and others | ¥9,730,859 | ¥17,867,404 | +83.62% | | Oilfield environmental protection | ¥12,789,684 | ¥8,053,696 | -37.03% | | Platform Outsourcing Services | ¥3,983,821 | ¥1,782,680 | -55.24% | | Total revenue | ¥45,559,591 | ¥45,256,672 | -0.66% | - Revenue from 'Equipment, accessories and others' **significantly increased by 83.62%**, while 'Oilfield environmental protection' and 'Platform Outsourcing Services' saw substantial decreases[217](index=217&type=chunk)[220](index=220&type=chunk) [NOTE 25. SUBSEQUENT EVENTS](index=41&type=section&id=NOTE%2025.%20SUBSEQUENT%20EVENTS) [Post-Reporting Period Activities](index=41&type=section&id=Post-Reporting%20Period%20Activities) Subsequent events include a private placement, a new subsidiary, share grants, a reverse stock split, a new lease, and a new lawsuit - On February 2, 2024, the Company closed a private placement, selling **100,000,000 Class A Ordinary Shares for $11.0 million**[221](index=221&type=chunk) - A wholly-owned subsidiary focusing on plastic chemical cycles business was established on February 22, 2024[222](index=222&type=chunk) - On February 26, 2024, the Company granted **6.3 million restricted Class A shares** and **12.9 million restricted Class B shares** to management and staff[222](index=222&type=chunk) - A **1-for-18 reverse stock split** of Class A Ordinary Shares became effective on May 1, 2024[220](index=220&type=chunk)[223](index=223&type=chunk) - On March 29, 2024, a new office lease agreement was signed with an annual rent of **¥2.28 million**[224](index=224&type=chunk) - On April 24, 2024, a civil complaint was filed against Gan Su BHD, resulting in a court ruling to freeze bank deposits of **¥848,935.63**[225](index=225&type=chunk) [NOTE 26. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY](index=42&type=section&id=NOTE%2026.%20CONDENSED%20FINANCIAL%20INFORMATION%20OF%20THE%20PARENT%20COMPANY) [Parent Company Balance Sheet](index=43&type=section&id=Parent%20Company%20Balance%20Sheet) The parent company's total assets and liabilities decreased, primarily due to a significant reduction in warrant liability | Metric | June 30, 2023 (RMB) | December 31, 2023 (RMB) | December 31, 2023 (USD) | | :--- | :--- | :--- | :--- | | Total Assets | ¥484,787,542 | ¥436,942,680 | $61,542,090 | | Total Liabilities | ¥35,580,580 | ¥10,962,436 | $1,544,027 | | Total Shareholders' Equity | ¥449,206,962 | ¥425,980,244 | $59,998,063 | - Cash decreased significantly from **¥236.1 million to ¥34.7 million**, while short-term investments increased from ¥0 to ¥116.0 million[230](index=230&type=chunk) - Warrant liability (non-current) decreased from **¥31.6 million to ¥0.99 million**, and a current warrant liability of ¥8.5 million was recognized[230](index=230&type=chunk) [Parent Company Statement of Operations and Comprehensive Loss](index=44&type=section&id=Parent%20Company%20Statement%20of%20Operations%20and%20Comprehensive%20Loss) The parent company's net loss narrowed to ¥22.6 million, largely due to a smaller loss from fair value changes of warrants | Metric | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | | :--- | :--- | :--- | :--- | | General and administrative expenses | ¥16,054,522 | ¥11,698,953 | $1,647,763 | | Loss from operations | ¥(16,054,522) | ¥(11,698,953) | $(1,647,763) | | Gain (loss) in fair value changes of warrants liability | ¥(20,097,665) | ¥(1,941,195) | $(273,412) | | Equity in earnings of subsidiaries, VIEs and VIEs' subsidiaries | ¥2,559,601 | ¥(7,954,486) | $(1,120,366) | | Net loss | ¥(29,876,418) | ¥(22,554,914) | $(3,176,794) | | Comprehensive loss attributable to the company | ¥(20,212,717) | ¥(27,164,313) | $(3,826,014) | - General and administrative expenses decreased from **¥16.1 million** in H2 2022 to **¥11.7 million** in H2 2023[233](index=233&type=chunk) - The loss from fair value changes of warrants liability **significantly decreased** from ¥(20.1) million to ¥(1.9) million[233](index=233&type=chunk) - Equity in earnings of subsidiaries shifted from a **gain of ¥2.6 million** to a **loss of ¥(8.0) million**[233](index=233&type=chunk) [Parent Company Statement of Cash Flows](index=45&type=section&id=Parent%20Company%20Statement%20of%20Cash%20Flows) The parent company saw a net cash decrease of ¥201.5 million, driven by significant cash used in investing and financing activities | Cash Flow Activity (Parent Company) | H2 2022 (RMB) | H2 2023 (RMB) | H2 2023 (USD) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ¥(21,484,273) | ¥(870,624) | $(122,624) | | Net cash used in investing activities | ¥(108,115,746) | ¥(153,665,402) | $(21,643,319) | | Net cash used in financing activity | ¥— | ¥(31,866,604) | $(4,488,317) | | Effect of exchange rate fluctuation on cash | ¥16,278,998 | ¥(15,086,688) | $(2,124,916) | | Net decrease in cash | ¥(113,321,021) | ¥(201,489,318) | $(28,379,176) | | CASH, end of period | ¥183,517,938 | ¥34,657,271 | $4,881,375 | - Net cash used in operating activities **decreased substantially** from ¥21.5 million in H2 2022 to ¥0.87 million in H2 2023[235](index=235&type=chunk) - Net cash used in investing activities **increased** from ¥108.1 million to ¥153.7 million, primarily due to payments for short-term investments[235](index=235&type=chunk) - Net cash used in financing activities was **¥31.9 million** in H2 2023, driven by the redemption of warrants[235](index=235&type=chunk)