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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, 2025

​

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 EXCHANGE ACT OF 1934

​

Date of event requiring this shell company report

For the transition period from to

Commission file number 001-34409

RECON TECHNOLOGY, LTD
(Exact name of Registrant as specified in its charter)
Cayman Islands
(Jurisdiction of incorporation or organization)
Room 601, No. 1 Shui’an South Street
Chaoyang District, Beijing 100012
People’s Republic of China
(Address of principal executive offices)
Liu Jia, Chief Financial Officer
Telephone: +86 (10) 8494 5799
liujia@recon.cn; Fax: +86 (10) 8494 5792
Room 601, No. 1 Shui’an South Street
Chaoyang District, Beijing 100012
People’s Republic of China

​

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class |  | Name of each exchange on which registered
Class A Ordinary Shares, $0.0001 par value per share |  | NASDAQ Capital Market

​

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 10,627,426 Class A Ordinary Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Table of Contents

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes ☒ No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ |  | Accelerated filer ☐ |  | Non-accelerated filer ☒
|  |  |  | Emerging growth company ☐

​

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ |  | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |  | Other ☐

​

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes ☐ No

​

​

​

​

Table of Contents

Table of Contents

​ |  | ​ |  |
​ |  | ​ |  | Page
PART I | ​ | ​ | ​ | 5
ITEM 1. | ​ | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | ​ | 5
ITEM 2. | ​ | OFFER STATISTICS AND EXPECTED TIMETABLE | ​ | 5
ITEM 3. | ​ | KEY INFORMATION | ​ | 5
ITEM 4. | ​ | INFORMATION ON THE COMPANY | ​ | 36
ITEM 4A. | ​ | UNRESOLVED STAFF COMMENTS | ​ | 64
ITEM 5. | ​ | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | ​ | 65
ITEM 6. | ​ | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | ​ | 80
ITEM 7. | ​ | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | ​ | 87
ITEM 8. | ​ | FINANCIAL INFORMATION | ​ | 90
ITEM 9. | ​ | THE OFFER AND LISTING | ​ | 90
ITEM 10. | ​ | ADDITIONAL INFORMATION | ​ | 91
ITEM 11. | ​ | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ​ | 101
ITEM 12. | ​ | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | ​ | 101
​ | ​ | ​ | ​ | ​
PART II | ​ | ​ | ​ | 102
ITEM 13. | ​ | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | ​ | 102
ITEM 14. | ​ | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | ​ | 102
ITEM 15. | ​ | CONTROLS AND PROCEDURES | ​ | 102
ITEM 15T. | ​ | CONTROLS AND PROCEDURES | ​ | 104
ITEM 16. | ​ | [RESERVED] | ​ | 105
ITEM 16A. | ​ | AUDIT COMMITTEE FINANCIAL EXPERT | ​ | 105
ITEM 16B. | ​ | CODE OF ETHICS | ​ | 105
ITEM 16C. | ​ | PRINCIPAL ACCOUNTANT FEES AND SERVICES | ​ | 105
ITEM 16D. | ​ | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | ​ | 106
ITEM 16E. | ​ | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | ​ | 106
ITEM 16F. | ​ | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | ​ | 106
ITEM 16G. | ​ | CORPORATE GOVERNANCE | ​ | 107
ITEM 16H. | ​ | MINE SAFETY DISCLOSURE | ​ | 107
ITEM 16I. | ​ | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | ​ | 107
ITEM 16J. | ​ | INSIDER TRADING POLICIES | ​ | 107
ITEM 16K. | ​ | CYBERSECURITY | ​ | 108
​ | ​ | ​ | ​ | ​
PART III | ​ | ​ | ​ | 109
ITEM 17. | ​ | FINANCIAL STATEMENTS | ​ | 109
ITEM 18. | ​ | FINANCIAL STATEMENTS | ​ | 109
ITEM 19. | ​ | EXHIBITS | ​ | 110

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this annual report with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.

All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

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PART I

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ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable for annual reports on Form 20-F.

ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for annual reports on Form 20-F.

ITEM 3.KEY INFORMATION

A. | Selected Financial Data.

We are a Cayman Islands holding company. We are not a Chinese operating company, and do not conduct business operations directly in China. All China operations are conducted by our subsidiaries established in the People’s Republic of China (“PRC” or “China”) and in the Hong Kong Special Administrative Region of the People’s Republic of China (“HKSAR” or “Hong Kong”), and by our contractual arrangements with variable interest entities, or “VIEs,” and the VIEs’ subsidiaries located in China. This structure involves unique risks to investors. The VIE structure provides contractual exposure to foreign investment in Chinese-based companies, pursuant to which U.S. GAAP accounting rules require us to consolidate such VIEs’ financial results in our financial statements. VIE structures are generally used where Chinese law prohibits direct foreign investment in the operating companies. Investors may never directly hold equity interests in the Chinese operating companies. Unless otherwise stated, as used in this report and in the context of describing our operations and consolidated financial information, “we,” “us,” “Company,” or “our,” refers to Recon Technology, Ltd, a Cayman Islands exempted limited company, together with our subsidiaries. “Our subsidiaries” refer to Recon Investment Ltd., Recon Hengda Technology (Beijing) Co. Ltd., Shandong Recon Renewable Resources Technology Co., Ltd. and Guangxi Recon Renewable Resources Co., Ltd. or Recon-IN, Recon-BJ, Recon-SD, and Recon-GX, respectively. “VIEs” refers to the PRC variable interest entities and their subsidiaries (Nanjing Recon Technology Co., Beijing BHD Petroleum Technology Co., Gan Su BHD Environmental Technology Co. Ltd, Huang Hua BHD Petroleum Equipment Manufacturing Co. Ltd., and Future Gas Station (Beijing) Technology, Ltd., or “Nanjing Recon,” “BHD,” “Gan Su BHD,” “HH BHD,” “Qing Hai BHD,” and “FGS” respectively). You are not investing in Nanjing Recon, BHD, Gan Su BHD, HH BHD, Qing Hai BHD, or FGS. Instead, we entered into certain contracts (the “VIE Agreements”) dated April 1, 2019, which are used to provide investors exposure to foreign investment in China-based companies where Chinese law prohibits or restricts direct foreign investment in the operating companies. A wholly foreign-owned entity (“WFOE”) is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon-BJ is a WFOE wholly owned by us through our subsidiary, Recon-IN, a Hong Kong limited company. As a result of our direct ownership in the WFOE and the VIE Agreements, we are regarded as the primary beneficiary of the VIE for accounting purposes. It should also be noted that, on July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively.

We mainly conduct our business through the VIEs, Nanjing Recon, BHD and their respective subsidiaries by means of Contractual Arrangements. Because we do not hold equity interests in the VIEs and their subsidiaries, we are subject to risks due to the uncertainty of the interpretation and application of the PRC laws and regulations regarding VIEs and the VIE structure, including but not limited to regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIEs. We are also subject to the risk that the PRC government could disallow the VIE structure, which would likely result in a material change in our operations and as a result the value of Securities may depreciate significantly or become worthless. At the time of this filing, the Contractual Agreements have not been tested in a court of law.

For U.S. GAAP purposes, each VIE has its own operating cash flow. Cash flow between our Company and the VIEs primarily consists of transfers from us to the VIEs for supplemental working capital, which is mainly used in purchase of materials and payment of operating expenses and investments. In addition, the VIEs occasionally make payments on our behalf when we experience a cash shortage. For the fiscal years ended June 30, 2025, 2024 and 2023, the net cash transferred from the Company to the VIEs were RMB 92,151,863, RMB84,211,565 and RMB69,562,912, respectively. There were no cash transferred from the VIEs to the Company or fees paid on behalf of the Company by the VIEs during the years ended June 30, 2025, 2024 and 2023. Neither we nor the VIEs have present plans to distribute earnings or settle amounts owed under the Contractual Agreements. Cash in the VIEs are expected to be retained for business growth and operation. No dividends or distributions have been declared to pay to us from our subsidiaries or the VIEs. No dividends or distributions were made to any U.S. investors.

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We are also subject to legal and operational risks associated with being based in and having the majority of the Company’s and VIEs’ operations in China. These risks may result in a material change in our operations, or a complete hindrance of our ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structures, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. On July 10, 2021, the PRC State Internet Information Office issued the Measures of Cybersecurity Review (Revised Draft for Comments), which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review. On December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly revised and promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022. Furthermore, the Chinese education sector is going through a series of reforms and new laws and guidelines have been recently promulgated and released to regulate our industry. As of the date of this report, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange because the Company and the VIEs are not involved in the education industry and do not maintain data of more than 1 million users; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines, which could materially and adversely impact our business and financial outlook. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

On February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

Any failure or perceived failure by the Company, the Company’s subsidiaries in China or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. As there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, we cannot assure you that we will be able to comply with new regulatory requirements relating to our future overseas capital-raising activities. Notwithstanding the foregoing, as of the date of this report, we are not aware of any Chinese laws or regulations in effect requiring that we obtain permission from any Chinese authority to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction or any regulatory objection to our initial public offering from the CSRC.

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As advised by Jingtian & Gongcheng, our PRC counsel, as we completed our IPO and listing prior to September 30, 2023, we were not required to complete the filing procedures pursuant to the Trial Measures for our initial public offering. However, as we are planning to conduct further offerings in the U.S., we are now required to complete the filing procedures with the CSRC pursuant to the requirements of the Trial Measures. Based on the above and our understanding of the Chinese laws and regulations currently in effect as of the date of this report, we are not aware of any PRC laws or regulations in effect requiring that we obtain permission or approval from any PRC authorities for our subsidiaries or the VIE’s operations and to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to our initial offerings from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. However, there remains uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. Any failure to obtain or delay in obtaining such approval, complete required filing or procedures, or a rescission of any such approval or filing obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory agencies may impose fines and penalties on our operations in mainland China, limit our ability to pay dividends outside of China, limit our operations in China, or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of the Class A Ordinary Shares. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of the Class A Ordinary Shares.

Any failure or perceived failure by the Company, the Company’s subsidiaries in China or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. As there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, we cannot assure you that we will be able to comply with new regulatory requirements relating to our future overseas capital-raising activities. Any failure or perceived failure of us to fully comply with such new regulatory requirements could significantly limit or completely hinder our ability to offer or continue to offer securities to investors, cause significant disruption to our business operations, and severely damage our reputation, which could materially and adversely affect our financial condition and results of operations and could cause the value of our securities to significantly decline or be worthless. See “Risk Factor — Risks Related to Doing Business in China — The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A Ordinary Shares.”

The following table presents the selected consolidated financial information for our company. The selected consolidated statements of operations data for the three years ended June 30, 2023, 2024 and 2025 and the consolidated balance sheet data as of June 30, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements set forth in “Item 18 – Financial Statements”. The selected consolidated balance sheet data for the year ended June 30, 2023 have been derived from our audited consolidated balance sheet as of June 30, 2023, which is not included in this annual report. Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below. Our audited consolidated financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America, or U.S. GAAP.

Following the one-for-five reverse stock split of our Class A Ordinary Shares effective on December 27, 2019, and following the dual class structure divided into Class A Ordinary Shares and Class B Ordinary Shares effective on April 5, 2021, and 2024 Reverse Split, all share and per share amounts disclosed throughout this annual report, in the table below and in our consolidated financial statements have been retroactively updated to reflect this change in capital structure, unless otherwise indicated. Please see “Item 4. Information on the Company—History and Development of the Company”.

(All amounts in Renminbi, except for shares outstanding)

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Statement of operations data:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the years ended June 30,
​ | ​ | 2025 |  | 2024 |  | 2023
​ | ​ | RMB¥ | ​ | RMB¥ | ​ | RMB¥
Revenue |  | 66,285,032 |  | 68,854,280 |  | 67,114,378
Loss from operations |  | (57,319,712) |  | (71,637,911) |  | (69,332,735)
Net loss attributable to Recon Technology, Ltd |  | (42,588,554) |  | (49,871,259) |  | (59,167,301)
​ | ​ | ​ | ​ | ​ | ​ | ​
Loss per share* |  |  |  | ​ |  | ​
-Basic |  | (4.68) |  | (9.88) |  | (27.43)
-Diluted |  | (4.68) |  | (9.88) |  | (27.43)
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average number of Class A and Class B Ordinary Shares used in computation* |  |  |  | ​ |  | ​
-Basic |  | 9,094,902 |  | 5,048,952 |  | 2,157,158
-Diluted |  | 9,094,902 |  | 5,048,952 |  | 2,157,158

* | Retrospectively restated for the 1-for-18 reverse stock split effective on May 1, 2024.

Balance sheet data:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2025 |  | 2024 |  | 2023
​ | ​ | RMB¥ | ​ | RMB¥ | ​ | RMB¥
Current assets | ​ | 356,157,898 | ​ | 506,485,249 | ​ | 504,413,173
Total assets | ​ | 525,621,125 | ​ | 552,389,514 | ​ | 531,824,577
Current liabilities | ​ | 60,568,863 | ​ | 47,477,363 | ​ | 61,032,862
Total liabilities | ​ | 71,651,378 | ​ | 61,455,617 | ​ | 92,673,674
Total shareholder’s equity | ​ | 467,427,518 | ​ | 502,554,537 | ​ | 449,206,962
Shares outstanding (Class A Ordinary Shares)*/ ** | ​ | 10,627,426 | ​ | 7,987,959 | ​ | 2,306,295
Shares outstanding (Class B Ordinary Shares) | ​ | 20,000,000 | ​ | 7,100,000 | ​ | 7,100,000

*Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

**Shares outstanding (Class A Ordinary Shares) include 2,263,194 unvested Class A ordinary shares that were pre-issued under the 2024 Equity Incentive Plan.

B. Capitalization and Indebtedness

Not applicable by 20-F as an annual report.

C. Reasons for the Offer and Use of Proceeds

Not applicable by 20-F as an annual report.

D. Risk Factors

Investing in our Class A Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Class A Ordinary Shares, you should consider carefully the risks and uncertainties described below. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. If any of these risks actually occurs, our business, business prospects, financial condition or results of operations could be seriously harmed. This could cause the trading price of our Class A Ordinary Shares to decline, resulting in a loss of all or part of your investment. Please also read carefully the section above entitled “Special Note Regarding Forward-Looking Statements.”

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Risks Related to Our Business

We operate in a very competitive industry and may not be able to maintain our revenue and profitability.

Since the 1990s, several international companies engaged in supplying integrated automation services for the petroleum extraction industry have been qualified in China. These competitors have significantly greater financial and marketing resources and name recognition than we have. In addition, at least five domestic private competitors also compete with us, and more competitors may enter the market as Chinese petroleum companies seek to reduce oil production costs and improve efficiencies. There can be no assurance that we will be able to compete effectively in our industry.

In addition, our competitors may introduce new systems. If these new systems are more attractive to customers than the systems we currently use or may develop, our customers may switch to our competitors’ services, and we may lose market share. We believe that competition may become more intense as more integrated automation service providers, including Chinese/foreign joint ventures, are qualified to conduct business. We cannot assure you that we will be able to compete successfully against any new or existing competitors, or against any new systems our competitors may implement. Any of these competitive factors could have a material adverse effect on our revenue and profitability.

We must continually research and develop new technologies and products to remain competitive.

Because our industry is so competitive, we will need to continually research, develop and refine new technologies and offer new products to compete effectively. Many factors may limit our ability to develop and refine new products, including the availability of funds to dedicate to this portion of our business and access to new products and technologies that we can incorporate into our products, as well as marketplace resistance to new products and technologies. We believe that the Domestic Companies (defined in the following paragraph) and our products are able to compete in the marketplace based upon, among other things, our intellectual property. We cannot assure investors that applications of our and the Domestic Companies’ technologies or those of third parties, if developed, will not be rendered superfluous or obsolete by research efforts and technological advances by others in these fields.

Our company and our subsidiaries, Recon Investment Ltd. (“Recon-IN”), Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”), Gan Su BHD Environmental Technology Co. Ltd. (“Gan Su BHD”), Huang Hua BHD Petroleum Equipment Manufacturing Co. Ltd. (“HH BHD”), and Qing Hai BHD New Energy Technology Co. Ltd. (“Qing Hai BHD”) (collectively, the “Domestic Companies”). As new technologies are developed, the Domestic Companies and we may need to adapt and change our products and services, our method of marketing or delivery or alter our current business in ways that may adversely affect revenue and our ability to achieve our proposed business goals. Accordingly, there is a risk that the Domestic Companies’ and our technology will not support a viable commercial enterprise.

Our financial performance is dependent upon the sale and implementation of petroleum mining and extraction software and hardware and related services, a single, concentrated group of products.

We derive substantially all of our revenue from the license and implementation of software applications and hardware innovations for the Chinese petroleum industry. The life cycle of our products and services is difficult to estimate due in large measure to the potential effect of new software and hardware applications and enhancements, including those we introduce, and the maturation in both the Chinese petroleum and software/hardware industries. If we are unable to continually improve our software and hardware to address the changing needs of the Chinese petroleum industry, we may experience a significant decline in the demand for the Domestic Companies’ and our products and services. In such a scenario, our revenue may significantly decline.

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A failure by our third-party vendors to fulfill their obligations would negatively affect our ability to operate profitably.

In the ordinary course of business, our third-party vendors have historically required advance payments before they deliver goods and services to us that enable our operations. These advance payments are often substantial, and we dedicate a material amount of our liquidity to advance these to such third-party vendors. There is no guarantee that the services we require will be delivered, whether due to supply chain disruptions or any other reason after we provide our advance payments, and many of our vendors lack sufficient insurance to protect us against such failures to deliver. Moreover, if a third-party vendor declares bankruptcy or we engage in litigation, we be unable to recover the advance fees in their entirety, if at all.

As a technology-oriented business, our ability to operate profitably is directly related to our ability to develop and protect our proprietary technology.

We rely on a combination of trademark, trade secret, nondisclosure, copyright and patent law to protect the Domestic Companies’ and our software and hardware, which may afford only limited protection.

Although the Chinese government has issued Nanjing Recon and BHD and their subsidiaries over seventy copyrights on software and Nanjing Recon and BHD and their subsidiaries over fifty patents on products, we cannot guarantee that competitors will be unable to develop technologies that are similar or superior to the Domestic Companies’ and our technology. Despite our efforts to protect the Domestic Companies’ and our proprietary rights, unauthorized parties, including customers, may attempt to reverse engineer or copy aspects of the Domestic Companies’ and our products or to obtain and use information that the Domestic Companies and we regard as proprietary. Furthermore, our competitors may independently develop substantially equivalent or superior proprietary information and techniques, reverse engineer information and techniques, or otherwise gain access to our proprietary technology. In the future, we cannot guarantee that others will not use the Domestic Companies’ and our technology without proper authorization. In addition, under the Chinese intellectual property law, the 50-year protection period for software copyright and 10-year patent protection period are not subject to renewal upon expiration.

The Domestic Companies and we develop our software products on third-party middleware software programs that are licensed by our customers from third parties, generally on a non-exclusive basis. The termination of any such licenses, or the failure of the third-party licensors to adequately maintain or update their products, could result in delay in our ability to develop, market or ship certain of our products while we seek to implement technology offered by alternative sources. While it may be necessary or desirable in the future to obtain other licenses, there can be no assurance that they will be able to do so on commercially reasonable terms or at all.

In addition, the Domestic Companies and we may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity, scope or enforceability of our proprietary rights. Any such claims could be time consuming, result in costly litigation, cause product development or shipment delays or force the Domestic Companies or us to enter into royalty or license agreements rather than dispute the merits of such claims, thereby impairing our financial performance by requiring the Domestic Companies or us to pay additional royalties and/or license fees to third parties. There is always a risk that patents, if issued, may be subsequently invalidated, either in whole or in part and this could diminish or extinguish protection for any technology we may license. In addition, the laws of China may not protect proprietary rights to the same extent as U.S. law. Therefore, we may be unable to meaningfully protect our rights in trade secrets, technical know-how and other non-patented technology. Any failure to enforce or protect the Domestic Companies’ and our rights could cause us to lose the ability to exclude others from issuing technology to develop or sell competing products.

We may not be able to adequately protect our intellectual property, which could cause us to be less competitive and negatively impact our business.

We rely on trademark, patent and trade secret law, as well as confidentiality agreements with certain of our employees to protect our proprietary rights. The product patents owned by the Company are employee service patents invented by the Company’s key employees. We generally require the Domestic Companies’ and our employees, consultants, advisors and collaborators to execute appropriate confidentiality agreements with, as applicable, the respective Domestic Companies and us. These agreements typically provide that all material and confidential information developed or made known to the individual during the course of the individual’s relationship with us is owned by the us and will be kept confidential and not disclosed to third parties except in specific circumstances. These agreements may be breached, and in some instances, we may not have an appropriate remedy available for breach of the agreements.

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We may be accused of infringing the intellectual property rights of others.

In the future, the Domestic Companies and we may receive notices claiming that we are infringing the proprietary rights of third parties. We cannot guarantee that the Domestic Companies and we will not become the subject of infringement claims or legal proceedings by third parties with respect to the Domestic Companies’ and our current programs or future software developments. Our standard software license agreements contain an infringement indemnity clause under which we agree to indemnify and hold harmless our customers and business partners against liability and damages arising from claims of various copyright or other intellectual property infringement by our products. Neither the Domestic Companies nor we have been the subject of an intellectual property claim since our formation.

Our software products may contain integration challenges, design defects or software errors that could be difficult to detect and correct.

Despite extensive testing, we may, from time to time, discover defects or errors in the Domestic Companies’ and our software only after use by a customer. We may also experience delays in shipment of our software during the period required to correct such errors. In addition, we may, from time to time, experience difficulties relating to the integration of the Domestic Companies’ and our software products with other hardware or software in the customer’s environment that are unrelated to defects in such software products. Such defects, errors or difficulties may cause future delays in product introductions and shipments, result in increased costs and diversion of development resources, require design modifications or impair customer satisfaction with the Domestic Companies’ and our software. Since these software products are used by our customers to perform mission-critical functions related to petroleum mining and extraction, design defects, software errors, misuse of these products, incorrect data from external sources or other potential problems within or out of our control that may arise from the use of the Domestic Companies’ and our products could result in financial or other damages to our customers. We do not maintain product liability insurance. Although our license agreements with customers contain provisions designed to limit our exposure to potential claims as well as any liabilities arising from such claims, such provisions may not effectively protect us against such claims and the liability and costs associated therewith. To the extent we are found liable in a product liability case, we could be required to pay substantial amount of damages to an injured customer, thereby impairing our financial condition.

We are dependent on the state of the PRC’s economy as the majority of our business is conducted in the PRC.

Currently, the majority of our business operations are conducted in the PRC, and most of our customers are also located in the PRC. Accordingly, any significant slowdown in the PRC economy may cause our customers to reduce expenditures or delay the building of new facilities or projects. This may in turn lead to a decline in the demand for our products and services. That would have a material adverse effect on our business, financial condition and results of operations.

Our future success depends on our ability to help our customers find, develop and acquire petroleum reserves.

To remain competitive in our industry, our products must help our customers locate and develop or acquire new crude oil reserves to replace those depleted by production. Without successful exploration or acquisition activities, our customers’ reserves, production and revenue will decline rapidly. If the Domestic Companies’ and our technology is less well accepted for helping our customers locate additional reserves than our competitors’ technology, our customers may terminate their relationships with us, which could have a material adverse effect on our financial condition and future growth prospects.

Our customers are companies engaged in the petroleum industry and the greater energy industry, and, consequently, our financial performance is dependent upon the economic conditions of those industries.

We have derived most of our revenue to date from providing integrated automation services to Chinese petroleum companies at oilfields within China and other energy industry companies in China. Our customers’ success is intrinsically linked to economic conditions in China and in the petroleum and energy industries in general and the volatility of prices of crude oil, refined oil products and coal chemical products in particular. Each of the petroleum industry and energy industry is subject to intense competitive pressures and is affected by overall economic conditions. Demand for our services could be harmed by volatility in those industries. There can be no assurance that we will be able to continue our historical revenue growth or sustain our profitability on a quarterly or annual basis or that our results of operations will not be adversely affected by continuing or future volatility in those industries.

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Our revenue are highly dependent on a very limited number of customers, which subjects our business to high seasonality. Our contracts with such customers may be terminated at any time, materially and adversely affecting our business.

Historically, we derived the majority of our revenue from two customers, (i) China National Petroleum Corporation (“CNPC”) and (ii) China Petroleum and Chemical Corporation (“Sinopec”).

Since the fiscal year ended June 30, 2017, Sinopec accounted for less than 10% of our revenue. As we developed new product lines, revenue from Sinopec increased and accounted for 17%, 19% and 32% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively.

We provide products and services to CNPC under a series of agreements, each of which is terminable without notice. We first began to provide services to CNPC in 2000. CNPC accounted for approximately 44%, 48% and 43% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and any termination of our business relationships with CNPC would materially harm our operations.

Because we derive such a high percentage of our revenue from CNPC and a few new clients, our revenue has been subject to high seasonality. We recognize revenue when it is realized and earned. Revenue is recognized based on the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. Because these matters depend on reaching agreements with these clients, revenue recognition occurs, to a large extent, on their schedule. Accordingly, revenue recognized in the first quarter is usually the smallest in proportion to that for the whole year, due to our clients’ budgeting and planning schedules. If these clients were to change their budgeting or planning schedule our high and low quarters could also shift. This seasonality limits our ability to make accurate long-term predictions about our performance and makes it difficult to compare our revenue across quarters.

Changes in environmental and regulatory factors may harm our business.

To date, the oil drilling industry in China to date has not been subject to the type and scope of regulation seen in Europe and the United States. However, the Chinese government may implement new legislation or regulations or may enforce existing laws more stringently. For example, the Energy Law of the People’s Republic of China , adopted on November 8, 2024, and took effect on January 1, 2025, is China’s first comprehensive energy law. It encourages, among other things, the optimization of the layout and structure of the petroleum processing and conversion industry through the use of advanced and intensive processing methods. Either of these scenarios may have a significant impact on our customers’ mining and extraction operations and may require us or our customers to significantly change operations or to incur substantial costs. We believe that the Domestic Companies’ and our operations in China are in compliance with China’s applicable legal and regulatory requirements. However, there can be no assurance that China’s central or local governments will not impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures.

Petroleum reserve degradation and depletion may reduce our customers’ and our profitability.

Our profitability depends substantially on our ability to help our customers exploit their oil reserves at competitive costs. Replacement reserves may not be available to our customers when required or, if available, may not be drilled at costs comparable to those characteristics of the depleting oilfield. The Domestic Companies’ and our technology may not enable our customers to accurately assess the geological characteristics of any new reserves, which may adversely affect their decision to use the Domestic Companies’ and our products in the future.

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We are heavily dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have to actively compete for their services.

Our company is much smaller than our main foreign competitors, including Schneider-electric, Siemens, Honeywell International, Emerson Process Management and Rockwell Automation, and we compete in large part on the basis of the quality of services we are able to provide our clients. As a result, we are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our clients. Many of our personnel possess skills that would be valuable to all companies engaged in the integrated automation services industry. Consequently, we expect that we will have to actively compete for these employees. Some of our competitors may be able to pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel. There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract or assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our technological products and the effectiveness of installation and training could be materially impaired.

We are substantially dependent upon our key personnel, particularly Mr. Yin Shenping, our Chief Executive Officer, Mr. Chen Guangqiang, our Chief Technology Officer and Ms. Liu Jia, our Chief Financial Officer.

Our performance is substantially dependent on the performance of our executive officers and key employees. In particular, we rely on the services of:

| ● | Mr. Yin Shenping, Chief Executive Officer;

| ● | Mr. Chen Guangqiang, Chief Technology Officer; and

| ● | Ms. Liu Jia, Chief Financial Officer.

Each of these individuals would be difficult to replace. We do not have in place “key person” life insurance policies on any of our employees. The loss of the services of any of our executive officers or other key employees could substantially impair our ability to successfully develop new systems and develop new programs and enhancements. In addition, we would need to spend considerable time and other resources to seek suitable replacements, which might detract from our efforts to develop our business.

Our business is capital intensive and our growth strategy may require additional capital, which may not be available on favorable terms or at all.

We may require additional cash resources due to changed business conditions, implementation of our growth strategy or potential investments or acquisitions we may pursue. To meet our capital needs, we may sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities or other securities convertible into such equity securities could result in dilution of your holdings. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

We do not intend to pay dividends in the foreseeable future and there are certain restrictions on the payment of dividend under PRC laws.

We have not previously paid any cash dividends, and we do not anticipate paying any dividends on our Class A Ordinary Shares. As we intend to remain in a growth mode, we intend to reinvest any profits in the foreseeable future to grow the business. We cannot assure you that our operations will continue to result in sufficient revenue to enable us to operate at profitable levels or to generate positive cash flows. Furthermore, there is no assurance our board of directors will declare dividends even if we are profitable. Dividend policy is subject to the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors. If we decide to pay dividends on any of our Class A Ordinary Shares in the future, we will be dependent, in large part, on receipt of funds from the Domestic Companies.

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We are a holding company with no operations of our own and substantially all of our operations are conducted through Nanjing Recon and BHD, hereafter referred to as the Domestic Companies, which are established as variable interest entities (“VIEs”) under the laws of the PRC. Our ability to pay dividends is dependent upon dividends and other distributions from the Domestic Companies. Chinese legal restrictions permit payment of dividends to us by the Domestic Companies only out of their respective accumulated net profits, if any, determined in accordance with Chinese accounting standards and regulations. Under Chinese law, the Domestic Companies are required to set aside a portion (at least 10%) of their after-tax net income (after discharging all cumulated loss), if any, each year for compulsory statutory reserve until the amount of the reserve reaches 50% of the Domestic Companies’ registered capital. These funds may be distributed to shareholders at the time of each Domestic Company’s wind-up. Payments of dividends by Domestic Companies to us are also subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents. There are no such similar foreign exchange restrictions in the Cayman Islands.

Our certificates, permits, and license are subject to governmental control and renewal, and the failure to obtain renewal would cause all or part of our operations to be suspended and may have a material adverse effect on our financial condition.

We are subject to various PRC laws and regulations pertaining to automation services for the petroleum extraction industry. We have obtained certain certificates, permits, and licenses required for the operation of an automation services provider for the petroleum extraction industry and the manufacturing and distribution of software and hardware products in the PRC.

During the application or renewal process for our licenses and permits, we will be evaluated and re-evaluated by the appropriate governmental authorities and must comply with the prevailing standards and regulations, which may change from time to time. In the event that we are not able to obtain or renew the certificates, permits and licenses, all or part of our operations may be suspended by the government, which would have a material adverse effect on our business and financial condition. Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of our operations, it may adversely affect our results of operations and profitability.

Failure to renew expired Hazardous Waste Operating Permit and unutilized ICP License could adversely affect our operations and financial performance.

Gansu BHD operates a facility with an annual capacity of 60,000 tons for the comprehensive utilization and harmless treatment of oilfield oily waste. This facility primarily handles oily sludge, which contains mineral oil components that pose significant environmental risks if not properly managed. Therefore, compliance with the Solid Waste Sludge Environmental Protection Law and the Hazardous Waste Operating Permit Management Regulations is mandatory for the proper treatment and disposal of oily sludge. However, the company’s Hazardous Waste Operating Permit, which is essential for the legal operation of the facility, expired on July 26, 2023, and has not yet been renewed. The expired permit is expected to negatively impact the company’s revenue streams and operational efficiency. Moreover, the timeline and outcome of any renewal process remain uncertain. Administrative delays or denial of the renewal could further prevent the company from resuming hazardous waste management activities, adversely affecting its future operations and financial stability.

In addition, Future Gas Station holds an ICP license that has been continuously renewed despite not being utilized. This situation may lead to inefficiencies and additional costs without generating revenue, ultimately impacting the company’s profitability and financial health. The ongoing renewal of the ICP license without active use may also raise concerns among regulatory authorities about the validity of the license and the company’s intentions. This could lead to increased scrutiny or potential regulatory compliance issues.

Failure to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause us to lose customers or otherwise harm our business.

Our business is subject to regulation by various governmental agencies in China, including agencies responsible for monitoring and enforcing compliance with various legal obligations, such as value-added telecommunication laws and regulations, privacy and data protection-related laws and regulations, intellectual property laws, employment and labor laws, workplace safety, environmental laws, consumer protection laws, governmental trade laws, import and export controls, anti-corruption and anti-bribery laws, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in China. These laws and regulations impose added costs on our business. Noncompliance with applicable regulations or requirements could subject us to:

| ● | investigations, enforcement actions, and sanctions;

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| ● | mandatory changes to our network and products;

| ● | disgorgement of profits, fines, and damages;

| ● | civil and criminal penalties or injunctions;

| ● | claims for damages by our customers or channel partners;

| ● | termination of contracts;

| ● | loss of intellectual property rights;

| ● | failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings

| ● | necessary to conduct our operations; and

| ● | temporary or permanent debarment from sales to public service organizations.

If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could be adversely affected. In addition, responding to any action will likely result in a significant diversion of our management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could materially harm our business, results of operations, and financial condition.

Additionally, companies in the technology industry have recently experienced increased regulatory scrutiny. Any similar reviews by regulatory agencies or legislatures may result in substantial regulatory fines, changes to our business practices, and other penalties, which could negatively affect our business and results of operations.

Changes in social, political, and regulatory conditions or in laws and policies governing a wide range of topics may cause us to change our business practices. Further, our expansion into a variety of new fields also could raise a number of new regulatory issues. These factors could negatively affect our business and results of operations in material ways.

Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business.

Risks Related to Our Corporate Structure

Our contractual arrangements with the Domestic Companies and their respective shareholders may not be as effective in providing control over these entities as direct ownership.

We are a holding company incorporated in the Cayman Islands. As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our Wholly Foreign Owned Enterprise (“WFOE”) and the VIEs and their subsidiaries in China providing certain technical and consultation services. A WFOE is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon Hengda Technology (Beijing) Co., Ltd (“Recon-BJ”) is a WFOE wholly owned by Recon Investment Ltd. (“Recon-IN”), a Hong Kong limited company, which in turn is wholly owned by us. We consolidated the financial results of BHD and Nanjing Recon into our financial statements based on the VIE agreements entered into on April 1, 2019. On July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively. Most, if not all, of our revenue derives from operations of the VIEs and their subsidiaries. Our Ordinary Shares are shares of our offshore holding company instead of shares of the VIEs or our PRC subsidiary. These Contractual Arrangements may not be as effective in providing us with control over the VIEs as direct ownership. For example, BHD could fail to take actions required for our business or fail to pay dividends to Recon-BJ despite its contractual obligation to do so. If the Domestic Companies fail to perform under their agreements with us, we may have to rely on legal remedies under PRC law, which may not be effective. In addition, these agreements have not been tested in a court of law.

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If we had direct ownership of the VIEs, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current Contractual Arrangements, we rely on the performance by the VIEs and their shareholders of their obligations under the contracts to exercise control over the VIEs. We cannot assure you that any of the Domestic Companies’ shareholders would always act in our best interests. Such risks exist throughout the period in which we intend to operate our business through the Contractual Arrangements with the VIEs. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. Therefore, our Contractual Arrangements with the VIEs may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.

We have no equity ownership interest in the Domestic Companies and rely on contractual arrangements to control and operate such businesses. These contractual arrangements may not be as effective in providing control over the Domestic Companies as direct ownership.

We conduct our business through BHD, Nanjing Recon, FGS and their respective subsidiaries by means of Contractual Arrangements. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.

There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including the laws, rules and regulations governing the validity and enforcement of the Contractual Arrangements between the Wholly Foreign Owned Enterprise (“WFOE”). A WFOE is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon Hengda Technology (Beijing) Co., Ltd (“Recon-BJ”) is a WFOE wholly owned by Recon Investment Ltd. (“Recon-IN”), a Hong Kong limited company, which in turn is wholly owned by us. Recon-BJ and Nanjing Recon, BHD and their respective subsidiaries. We have been advised by our PRC counsel, JingTian & GongCheng LLP, based on their understanding of the current PRC laws, rules and regulations, that (i) the structure for operating our business in China (including our corporate structure and Contractual Arrangements with the Recon-BJ, Nanjing Recon, BHD and their respective subsidiaries) will not result in any violation of PRC laws or regulations currently in effect; and (ii) the Contractual Arrangements among the Recon-BJ and Nanjing Recon, BHD and their respective subsidiaries governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations concerning foreign investment in the PRC, and their application to and effect on the legality, binding effect and enforceability of the contractual arrangements. In particular, we cannot rule out the possibility that PRC regulatory authorities, courts or arbitral tribunals may in the future adopt a different or contrary interpretation or take a view that is inconsistent with the opinion of our PRC legal counsel. Therefore, the Contractual Arrangements may be determined by PRC authorities to be inconsistent with the laws and regulations of the PRC, including those related to foreign investment in certain industries. Therefore, the relevant Chinese regulatory authorities could disallow this structure and hinder our ability to exert contractual control over the Domestic Companies, which would likely result in a material change in operations and/or value of the Company’s ordinary shares, including that it could cause the value of such securities to significantly decline or become worthless.

If any of the Domestic Companies or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

| ● | revoking the business and operating licenses;

| ● | discontinuing or restricting the operations;

| ● | imposing conditions or requirements with which the PRC entities may not be able to comply;

| ● | requiring us and our PRC entities to restructure the relevant ownership structure or operations, including termination of the contractual agreements with the VIE and deregistering the equity pledge of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control the VIE;

| ● | imposing fines or confiscating the income from our PRC subsidiaries or the VIE.

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The imposition of any of these penalties would severely disrupt our ability to conduct business and have a material adverse effect on our financial condition, results of operations and prospects.

Our majority stake in Future Gas Station (Beijing), which now consists of a large operating segment of our business, exposes us to risks related to consumer energy consumption and online payment technologies.

As the energy consumption market opened to private and foreign companies, and as the online payment technology continually developed, we began investing in the downstream oil industry. Over the years, we developed a close relationship with Future Gas Station (Beijing) (also referred to as “FGS”) and we now own 51% of the equity of FGS. As such, our majority stake in FGS presents both a substantial investment in the downstream of the oil industry and comprises a large part of our operations. As such, our controlling interest in FGS represents both a significant investment in the downstream of the oil industry and a large part of our business. The development of FGS depends on its cooperation with gas stations. At present, most of the gas stations in China are owned by the sales companies of PetroChina and Sinopec, so FGS’s business expansion is largely dependent on the development of electronic payment systems and online settlement systems of these major oil companies and their cooperation decisions. As these major oil companies gradually increase their efforts in research and development and deployment of self-built systems, their willingness to cooperate with third-party service and operations support companies such as FGS will decrease or the depth of their cooperation will decrease, resulting in FGS’s growth potential being limited and unable to meet our expectations at the time we acquired FGS. Due to an internal operational decision made by Sinopec Sales Company in May 2025, Sinopec will cease direct cooperation with any external companies, including FGS. As a result, FGS’s business is expected to experience a significant decline beginning in July 2025, which may lead to substantial losses. FGS is currently exploring new business ventures and client acquisition opportunities; however, there is no guarantee of success. We may suffer a significant loss on our substantial investment in FGS.

Our contractual arrangements with the Domestic Companies may result in adverse tax consequences to us.

As a result of our corporate structure and contractual arrangements between Recon-BJ and the Domestic Companies, we are effectively subject to several PRC taxes on both revenue generated by Recon-BJ’s operations in China and revenue derived from Recon-BJ’s contractual arrangements with the Domestic Companies. Moreover, we would be subject to adverse tax consequences if the PRC tax authorities were to determine that the contracts between Recon-BJ and the Domestic Companies were not on an arm’s length basis and therefore constitute a favorable transfer pricing. As a result, the PRC tax authorities could request that we adjust our taxable income upward for PRC tax purposes. If the PRC tax authorities took such action, such authorities would be able to establish in its sole discretion the amount of tax payable by Recon-BJ, so we cannot predict the effect of such action on our company other than the likely effect that our profits would decrease. Such a pricing adjustment could adversely affect us by:

| ● | increasing our tax expenses, which could subject Recon-BJ to late payment fees and other penalties for under-payment of taxes; and/or

| ● | resulting in Recon-BJ’s loss of preferential tax treatment.

The shareholders of the VIEs may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.

The shareholders of the VIEs may have actual or potential conflicts of interest with us. The shareholders may refuse to sign or breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them and the VIEs, which would have a material and adverse effect on our ability to effectively control the VIEs and receive economic benefits from them. For example, the shareholders may be able to cause our agreements with the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise the shareholder will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between the shareholders and our company. If we cannot resolve any conflict of interest or dispute between us and the shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

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The principal shareholders of the Domestic Companies have potential conflicts of interest with us, which may adversely affect our business.

Shenping Yin, our Chief Executive Officer, and Guangqiang Chen, our Chief Technology Officer, are significant shareholders in our company. They are also the principal shareholders of each of the Domestic Companies and collectively control the Domestic Companies. Conflicts of interests between their duties to our company and the respective Domestic Companies may arise. For example, Mr. Yin and Mr. Chen could cause a Domestic Company to fail to take actions that are in the best interests of our Company or to fail to pay dividends to Recon-BJ despite its contractual obligation to do so if making such payment would harm the Domestic Company.

As Mr. Yin and Mr. Chen are also directors and executive officers of our company, they have duties of loyalty and care to us under Cayman Islands law when there are any potential conflicts of interests between our company and the Domestic Companies. Each of Mr. Yin and Mr. Chen has executed an irrevocable power of attorney to appoint the individual designated by us to be his attorney-in-fact to vote on his behalf on all matters related to the Domestic Companies requiring shareholder approval. We cannot assure you, however, that if conflicts of interest arise, they will act completely in our interests or that conflicts of interests will be resolved in our favor. In addition, Mr. Yin and Mr. Chen could violate their respective employment agreements with us or their legal duties by diverting business opportunities from us to others. If we cannot resolve any conflicts of interest between us and Mr. Yin and Mr. Chen, as applicable, we would have to rely on legal proceedings, which could result in the disruption of our business.

Any deterioration of the relationship between Recon-BJ and the Domestic Companies could materially and adversely affect the overall business operation of our company.

Our relationship with the Domestic Companies is governed by their agreements with Recon-BJ, which are intended to provide us, through our indirect ownership of Recon-BJ, with effective control over the business operations of the Domestic Companies. However, these agreements may not be effective in providing control over the applications for and maintenance of the licenses required for our business operations. The Domestic Companies could violate these agreements, go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under these agreements and, as a result, our operations, reputation, business and stock price could be severely harmed.

If Recon-BJ exercises its purchase option of the Domestic Companies’ equity pursuant to the Exclusive Equity Interest Purchase Agreement, payment of the purchase price could materially and adversely affect our financial position.

Under the Exclusive Equity Interest Purchase Agreement, Recon-BJ holds an option to purchase all or a portion of the equity of the Domestic Companies at a price, based on the capital paid in by the Domestic Company shareholders. If applicable PRC laws and regulations require an appraisal of the equity interest or provide other restriction on the purchase price, the purchase price shall be the lowest price permitted under the applicable PRC laws and regulations. As the Domestic Companies are already contractually controlled affiliates to our company, Recon-BJ’s purchase of the Domestic Companies’ equity would not bring immediate benefits to our company and the exercise of the option and payment of the purchase prices could adversely affect our financial position and available working capital.

Our dual class structure may be dilutive to the voting power of Class A Ordinary Shareholders.

At the 2021 annual meeting, our shareholders approved a special resolution to implement a dual class structure establishing Class A and Class B Ordinary Shares. The dual class structure of our ordinary shares has the effect of concentrating voting control with holders of Class B Ordinary Shares. Our Class B Ordinary Shares have stronger voting power than our Class A Ordinary Shares and certain existing shareholders have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders.

Our classified board structure may prevent a change in our control.

Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2026, 2027 and 2028. Directors of each class are chosen for three-year terms upon the expiration of their current terms, and each year one class of directors is elected by the shareholders. The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interest of our shareholders.

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Shareholder rights under Cayman Islands law may differ materially from shareholder rights in the United States, which could adversely affect the ability of us and our shareholders to protect our and their interests.

Our corporate affairs are governed by our Memorandum and Articles of Association, by the Companies Act (2023 Revision) and the common law of the Cayman Islands. The right of shareholders to take action against the directors, actions by minority shareholders, and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority but are not binding on a court in the Cayman Islands. In particular, the Cayman Islands has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate laws. Moreover, our company could be involved in a corporate combination in which dissenting shareholders would have no rights comparable to appraisal rights which would otherwise ordinarily be available to dissenting shareholders of United States corporations. However, Cayman Islands statutory law does provide a mechanism for a dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter’s shares if it is not possible for the dissenter and the Company to agree a fair price within the time limits prescribed. Also, our Cayman Islands counsel is not aware of a significant number of reported derivative actions having been brought in Cayman Islands courts. Class actions are not recognized in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings which are similar. Such actions are ordinarily available in respect of United States corporations in U.S. courts. Finally, Cayman Islands companies may not have stood to initiate shareholder derivative action before the federal courts of the United States. As a result, our public shareholders may face different considerations in protecting their interests in actions against the management, directors or our controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, and our ability to protect our interests may be limited if we are harmed in a manner that would otherwise enable us to sue in a United States federal court.

As we are a Cayman Islands company and most of our assets are outside the United States, it will be extremely difficult to acquire jurisdiction and enforce liabilities against us and our officers, directors and assets based in China.

We are a Cayman Islands exempt company, and our corporate affairs are governed by our Memorandum and Articles of Association and by the Cayman Islands Companies Act (2023 Revision) and other applicable Cayman Islands laws. Certain of our directors and officers reside outside of the United States. In addition, the Company’s assets will be located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon our directors or officers and our subsidiaries, or enforce against any of them court judgments obtained in United States’ courts, including judgments relating to United States federal securities laws. In addition, there is uncertainty as to whether the courts of the Cayman Islands and of other offshore jurisdictions would recognize or enforce judgments of United States’ courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof on the grounds that such provisions are penal in nature, or be competent to hear original actions brought in the Cayman Islands or other offshore jurisdictions predicated upon the securities laws of the United States or any state thereof. Our Cayman Islands’ counsel has advised us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final, for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and was not obtained in a manner which is contrary to the public policy of the Cayman Islands. A Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere. Furthermore, because the majority of our assets are located in China, it would also be extremely difficult to access those assets to satisfy an award entered against us in United States court.

We may have difficulty in enforcing any rights we may have under the VIE Agreements in PRC.

As all of the VIE Agreements are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these VIE Agreements. Furthermore, these VIE Agreements may not be enforceable in China if PRC government authorities or courts take a view that such VIE Agreements contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over the VIEs, and our ability to conduct our business may be materially and adversely affected.

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Risks Related to Doing Business in China

The recent state government interference into business activities on U.S. listed Chinese companies may negatively impact our existing and future operations in China.

Recently, the Chinese government announced that it would step up supervision of Chinese firms listed offshore. Under the new measures, China will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading, China will also check sources of funding for securities investment and control leverage ratios. The Cyberspace Administration of China (“CAC”) has also opened a cybersecurity probe into several U.S.-listed tech giants focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the Data Security Law, how companies collect, store, process and transfer data. If we are subject to such a probe or if we are required to comply with stepped-up supervisory requirements, valuable time from our management and money may be expended in complying and/or responding to the probe and requirements, thus diverting valuable resources and attention away from our operations. This may, in turn, negatively impact our operations.

Because of the VIEs and their subsidiaries in China and given the Chinese government’s significant oversight and discretion over the conduct of our business operations there, the Chinese government may seek to affect our operations, including our ability to offer securities to investors, list our securities on a U.S. or other foreign exchange, conduct our business or accept foreign investment. The Chinese government may intervene or influence the Company’s current and future operations in China at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.

If any or all of the foregoing were to occur, this could lead to a material change in the Company’s operations and/or the value of our ordinary shares and/or significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

We entered into a number of transactions with related parties. All material related party transactions must be approved by our board of directors. Such material related party transactions must be made or entered into on bona fide terms in the best interests of the Company and not with the effect of constituting a fraud on the minority shareholders.

Transactions with related parties present potential for conflicts of interest, as the interests of related party may not align with the interests of our shareholders. Although we believe these transactions were in our best interests, we cannot assure you that these transactions were entered into on terms as favorable to us as those that could have been obtained in an arms-length transaction. We may also engage in transactions with related parties in the future. Conflicts of interests arise when we transact business with related parties. These transactions, individually or in aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions or other litigation.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A Ordinary Shares.

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Government actions in the future could significantly affect economic conditions in China or particular regions thereof and could require us to materially change our operating activities or divest ourselves of any interests we hold in Chinese assets. Our business may be subject to various government and regulatory interference in the provinces in which we operate. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.

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Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. It is uncertain when and whether we will be required to obtain permission from the PRC government to offering securities in the U.S. in the future, and even when such permission is obtained, whether we will be denied or rescinded. Although we are currently not required to obtain permission from any of the PRC regulatory authorities to obtain such permission and has not received any denial regarding our listing on the Nasdaq Capital Market and the entry into the VIE Agreements, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.

Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completed our auditors for two consecutive years.

The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. The interim final rule applies to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. Consistent with the HFCAA, the interim final rule requires the submission of documentation to the SEC establishing that such a registrant is not owned or controlled by a government entity in that foreign jurisdiction and also requires disclosure in a foreign issuer’s annual report regarding the audit arrangements of, and government influence on, such registrants. On May 13, 2021, the PCAOB issued proposed PCAOB Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act for public comment. The proposed rule provides a framework for making determinations as to whether PCAOB is unable to inspect an audit firm in a foreign jurisdiction, including the timing, factors, bases, publication and revocation or modification of such determinations, and such determinations will be made on a jurisdiction-wide basis in a consistent manner applicable to all firms headquartered in the jurisdiction. In November 2021, the SEC approved PCAOB Rule 6100. On December 2, 2021, the SEC adopted amendments to final rules implementing the disclosure and submission requirements of the HFCAA.

On June 22, 2021, the U.S. Senate passed a bill titled as the Accelerating Holding Foreign Companies Accountable Act, or AHFCA Act which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two.

Further, the PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act. Such final rule, however, remains subject to the SEC’s approval and it remains when the SEC will complete its rulemaking and when such rules will become effective and what, if any, of the PWG recommendations and or PCAOB’s rule will be adopted.

On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act.

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions.

The PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act, subject to SEC approval. The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022.

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On August 26, 2022, the PCAOB signed a SOP with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong which establishes a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act. Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions. The PCAOB was required to reassess its determinations as to whether it is able to carry out inspections and investigations completely and without obstruction by the end of 2022. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous determinations. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new determination.

Congress passed fiscal year 2023 Omnibus spending legislation in December 2022, which contained provisions to accelerate the HFCAA timeline for implementation of trading prohibitions from three years to two years. As a result, the SEC is required to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections or complete investigations for two consecutive years.

Our current auditor, Enrome LLP, an independent registered public accounting firm, has been retained to audit the financial statements for the fiscal year ended June 30, 2025, and has been our auditor since August 22, 2023. Enrome LLP is subject to PCAOB inspections and the PCAOB is able to inspect our auditor. We cannot assure you whether NASDAQ or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. In the event that there is a lack of inspection or if Enrome LLP is unable to permit an inspection by the PCAOB, however unlikely, our shares would be prohibited under the HFCA Act which may lead a securities exchange to determine to delist our shares. Such potential delisting would substantially impair your ability to sell or purchase our shares when you wish to do so, and such risk and uncertainty associated with a potential delisting due to a lack of inspection would have a negative impact on the price of our shares.

Additional compliance procedures may be required due to the promulgation of the new filing-based administrative rules for overseas offering and listing by domestic companies in China, which could significantly limit or completely hinder our ability to offer or continue to offer our Ordinary Shares to investors and could cause the value of our Ordinary Shares to significantly decline or become worthless.

On February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which went into effect on March 31, 2023. Pursuant to Article 16 of the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. Where an issuer offers securities in the same overseas market after overseas initial public offerings or listing, it shall complete filing procedures with the CSRC within three working days after completion of offering. The required filing materials with the CSRC in relation to the offering in the same overseas market include (without limitation): (i) record-filing reports and related undertakings; and (ii) PRC legal opinions issued by domestic law firms (with related undertakings).

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Pursuant to the Trial Administrative Measures, we have to file with the CSRC with respect to public offering, and the CSRC will conclude the filing procedures and publish the filing results on the CSRC website within twenty working days after receiving the filing documents, if the filing documents are complete and in compliance with stipulated requirements. However, during the filing process, the CSRC may request the Company to supply additional documents or may consult with competent authorities, the time for which will not be counted in the twenty working days. As advised by Jingtian & Gongcheng, our PRC counsel, we were not required to complete the filing procedures pursuant to the Trial Measures for our initial public offering because we completed our IPO and listing prior to September 30, 2023. However, we are now required to complete the filing procedures with the CSRC pursuant to the requirements of the Trial Measures for subsequent offerings conducted in the U.S. Based on the above and our understanding of the Chinese laws and regulations currently in effect as of the date of this report, any failure or perceived failure of the Company to fully comply with the filing requirements could significantly limit or completely hinder our ability to offer or continue to offer securities to investors, cause significant disruption to our business operations, and severely damage our reputation, which could materially and adversely affect our financial condition and results of operations, potentially causing the value of our securities to significantly decline or be worthless.

PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits.

SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC resident holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

SAFE promulgated the Notice of SAFE on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment, or SAFE Circular 13, on February 13, 2015, which was effective on June 1, 2015. SAFE Circular 13 cancels two administrative approval items: foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, instead. Banks shall directly examine and handle foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, and SAFE and its branch shall indirectly regulate the foreign exchange registration of direct investment through banks.

In 2008, to protect our shareholders from possible future foreign ownership restrictions, our Founders signed a series of agreements with Recon-JN, BHD and Nanjing Recon, so Recon-JN became the primary beneficiary of BHD and Nanjing Recon for accounting purposes. On April 1, 2019, as part of our planned organizational restructuring, Recon-BJ entered into a series of VIE agreements with BHD and Nanjing Recon, respectively, under the same terms and conditions as that of the VIE agreements previously entered into by Recon-JN. On July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively. The new agreements stipulate that Recon-BJ will absorb 100% of the expected losses of BHD and Nanjing Recon while receiving 95% of their projected net profits; all other terms and conditions remain unchanged from the VIE agreements executed by Recon-JN on April 1, 2019. As a result, the VIEs were effectively transferred from Recon-JN to Recon-BJ. Our beneficial owners, Mr. Chen Guangqiang and Mr. Yin Shenping, both PRC residents, initially completed their SAFE registration at the Jining branch of SAFE. We are under the process to amend and update the filing for Mr. Yin and Chen in Beijing.

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Failure to register or comply with relevant requirements may subject Mr. Chen, Mr. Yin and our PRC subsidiaries to fines and legal sanctions. The non-compliance could also limit our ability to contribute additional capital to our PRC subsidiaries and restrict their ability to distribute dividends to our company. Additionally, it may constrain our PRC subsidiaries’ ability to increase their registered capital or distribute profits. Such risks could have a material adverse effect on our business, financial condition, and results of operations. Due to the lack of interconnection between the SAFE registration systems in Jining and Beijing, Mr. Chen and Mr. Yin have established two new BVI offshore companies to transfer their previously held shares and update their SAFE registration. However, whether the amendment registration can be completed remains uncertain. We urge investors to fully consider these associated risks.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. Recon cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

The PRC legal system is a civil law system based on written statutes. Prior court decisions are encouraged to be used for reference but it remains unclear to what extent the prior court decisions may impact the current court ruling as the encouragement policy is new and there is limited judicial practice in this regard. Since a large number of laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

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From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of its contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.

We are also subject to the legal and operational risks associated with being based in and having substantially all operations in China. These risks may result in material changes in operations, or a complete hindrance of Recon’s ability to offer or continue to offer its securities to investors, and could cause the value of Recon’s securities to significantly decline or become worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. On December 28, 2021, Cybersecurity Review Measures (2021 version) was issued, which became effective on February 15, 2022. As of the date of this report, the above regulations have not impacted our ability to conduct the business, accept foreign investments, or list on a U.S. or other foreign exchange; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines, which could materially and adversely impact our overall business and financial outlook.

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our future business and operations.

The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies.

The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our future business and operating results, lead to reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our future business and operating results.

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Adverse changes in China’s political, economic or social conditions or government policies could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially adversely affect our competitive position.

We conduct substantially all of our operations and generate most of our revenue in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. The PRC economy differs from the economies of most developed countries in many respects, including:

| ● | the higher level of government involvement;

| ● | the early stage of development of the market-oriented sector of the economy;

| ● | the relatively rapid growth rate;

| ● | the higher level of control over foreign exchange; and

| ● | the allocation policies of resources.

While the PRC economy has grown significantly since the late 1970s, the growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall PRC economy, but may also have a negative effect on our business. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.

The PRC economy has been transitioning from a planned economy to a more market-oriented economy. The PRC government continues to exercise significant control over economic growth in China through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and imposing policies that impact particular industries or companies in different ways.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

In connection with any future offering, we may be subjected to the U.S. Foreign Corrupt Practices Act (“FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We may also be subjected to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. Going forward, we may have operations, agreements with third parties, and make sales in China, which may experience corruption. Our future activities in China may create the risk of unauthorized payments or offers of payments by one of the employees of our Company, because sometimes these employees are out of our control. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

The PRC government may issue further restrictive measures in the future.

We cannot assure you that the PRC’s government will not issue further restrictive measures in the future. The PRC government’s restrictive regulations and measures could increase our existing and future operating costs in adapting to these regulations and measures, limit our access to capital resources or even restrict our existing and future business operations, which could further adversely affect our business and prospects.

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We may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations.

We may be subject relating various risks and costs associated with to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. This data is wide ranging and relates to our investors, employees, contractors and other counterparties and third parties. The relevant PRC laws apply not only to third-party transactions, but also to transfers of information between us, the Domestic Companies, our subsidiaries and other parties with which we have commercial relations.

The PRC regulatory and enforcement regime with regard to privacy and data security is evolving. The PRC Cybersecurity Law which was promulgated on November 7, 2016 and became effective on June 1, 2017 provides that personal information and important data collected and generated by operators of critical information infrastructure in the course of their operations in the PRC should be stored in the PRC, and the law imposes heightened regulation and additional security obligations on operators of critical information infrastructure. According to the Cybersecurity Review Measures promulgated by the Cyberspace Administration of China and certain other PRC regulatory authorities in April 2020, which became effective in June 2020, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.

On June 10, 2021, the Standing Committee of the National People’s Congress of China promulgated the Data Security Law which shall take effect in September 1, 2021. The Data Security Law provides for data security and privacy obligations of entities and individuals carrying out data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority with any data stored in China without approval from the competent PRC authority, and sets forth the legal liabilities of entities and individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10 million, suspension of relevant business, and revocation of business permits or licenses.

On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Security Law, which shall come into force as of November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information.

In addition, on July 10, 2021, the Cyberspace Administration of China issued the Measures for Cybersecurity Review (Revised Draft for Comments) for public comments, which proposes to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess personal data of more than one million users. The PRC National Security Law covers various types of national security, including technology security and information security.

On December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and several other administrations jointly issued the revised Measures for Cybersecurity Review, or the Revised Review Measures. According to the Revised Review Measures, if an “online platform operator” that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Given the recency of the issuance of the Revised Review Measures, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.

We do not collect, process or use personal information of entities or individuals other than what is necessary for our business and do not disseminate such information. We do not operate mobile apps and we do not possess information on more than a million entities/individuals. Although we believe we currently are not required to obtain clearance from the Cyberspace Administration of China under the Measures for Cybersecurity Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities, we face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance can be timely obtained, or at all.

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Compliance with the PRC Cybersecurity Law, the PRC National Security Law, the Data Security Law, the Personal Information Protection Law, the Cybersecurity Review Measures, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, including data security and personal information protection laws, may result in additional expenses to us and subject us to negative publicity, which could harm our reputation among users and negatively affect the trading price of our shares in the future. There are also uncertainties with respect to how the PRC Cybersecurity Law, the PRC National Security Law and the Data Security Law will be implemented and interpreted in practice. PRC regulators, including the Ministry of Public Security, the MIIT, the SAMR and the Cyberspace Administration of China, have been increasingly focused on regulation in the areas of data security and data protection, including for mobile apps, and are enhancing the protection of privacy and data security by rule-making and enforcement actions at central and local levels. We expect that these areas will receive greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business, prohibition against new user registration (even for a short period of time) and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected.

It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China.

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator, such as the Department of Justice, the SEC, the PCAOB and other authorities, to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

Some of our business operations are conducted in Hong Kong and the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiary in the PRC, Recon-BJ, which is a wholly foreign owned enterprise in China. Recon-BJ is generally subject to laws and regulations applicable to foreign invested enterprises in China and intellectual property protections. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, a series of new PRC laws and regulations have significantly enhanced the protections afforded to intellectual property rights and various forms of foreign investments in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

We do not have business interruption, litigation or natural disaster insurance.

The insurance industry in China is still at an early stage of development. In particular PRC insurance companies offer limited business products. As a result, we do not have any business liability or disruption insurance coverage for our operations in China. Any business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources.

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We may be subject to foreign exchange controls in the PRC.

Our PRC subsidiary and affiliates are subject to PRC rules and regulations on currency conversion. In the PRC, the State Administration for Foreign Exchange (“SAFE”) regulates the conversion of the RMB into foreign currencies. Currently, foreign investment enterprises (“FIEs”) are required to apply to SAFE for “Foreign Exchange Registration Certificate for FIEs.” Recon-BJ is an FIE. With such registration certifications (which need to be renewed annually), FIEs are allowed to open foreign currency accounts including the “recurrent account” and the “capital account.” Currently, conversion within the scope of the “recurrent account” can be affected without requiring the approval of SAFE. However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE. Accordingly, compliance with SAFE requirements may limit how we are able to use our funds, in ways that we would not be limited if we operated in countries other than China.

Fluctuations in exchange rates could adversely affect the value of our securities.

Changes in the value of the RMB against the U.S. dollar and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on the value of, and any dividends payable on our shares in U.S. dollar terms. For example, if we decide to convert our RMB into U.S. dollars for the purpose of paying dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. We do not plan to enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

PRC regulations relating to the establishment of offshore special purpose vehicles by PRC residents, if applied to us, may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into Recon-IN and Recon-BJ, limit Recon-IN’s and Recon-BJ’s ability to distribute profits to us or otherwise materially adversely affect us.

On October 21, 2005, SAFE issued a public notice, the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, or the SAFE notice, which requires PRC residents, including both legal persons and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China, referred to as an “offshore special purpose company,” for the purpose of overseas equity financing involving onshore assets or equity interests held by them. In addition, any PRC resident that is the shareholder of an offshore special purpose company is required to amend its SAFE registration with the local SAFE branch with respect to that offshore special purpose company in connection with any increase or decrease of capital, transfer of shares, merger, division, equity investment or creation of any security interest over any assets located in China. Moreover, if the offshore special purpose company was established and owned the onshore assets or equity interests before November 1, 2005, a retroactive SAFE registration is required to have been completed before March 31, 2006. If any PRC shareholder of any offshore special purpose company fails to make the required SAFE registration and amendment, the PRC subsidiaries of that offshore special purpose company (Recon-IN, Recon-BJ, Recon-SD and Recon-GX for our company) may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore special purpose company. Moreover, failure to comply with the SAFE registration and amendment requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

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Due to lack of official interpretation, some of the terms and provisions in the SAFE notice remain unclear and implementation by central SAFE and local SAFE branches of the SAFE notice has been inconsistent since its adoption. Because of uncertainty over how the SAFE notice will be interpreted and implemented, we cannot predict how it will affect our business operations or future strategies. For example, Recon-IN’s, Recon-BJ’s, Recon-SD’s, Recon-GX’s and any prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with the SAFE notice by our company’s PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by the SAFE notice. We also have little control over either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with the SAFE notice, if SAFE requires it, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.

The EIT Law and its implementing rules provide that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” under PRC tax laws. The implementing rules promulgated under the EIT Law define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management bodies” of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed rules or precedents governing the procedures and specific criteria for determining “de facto management body.” Although our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we should be classified as a PRC “resident enterprise.”

If we are deemed a PRC “resident enterprise,” we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing subsidiaries in China or the VIE and any other subsidiaries in China or the VIE which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC “resident recipient” status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC “resident enterprise”, any dividends we pay to our non-PRC investors, and the gains realized from the transfer of our Class A Ordinary Shares may be considered income derived from sources within the PRC and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our Class A Ordinary Shares would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and the price of our Class A Ordinary Shares.

Risk of potential adverse impact on our business and operations in China due to tax compliance issues in equity transfers of our PRC subsidiaries.

Several of our PRC subsidiaries have undergone multiple equity transfers in the past. According to the Individual Income Tax Law of the People’s Republic of China (IIT Law, 2018 Amendment), where an individual undergoes modification registration for transfer of equities, the registration authority of the market participant shall verify the payment receipt of individual income tax related to the equity transaction. Since we have successfully completed the modification registration processes, taxes related to the previous equity transfers have been duly paid. However, as of the date of this prospectus, we are unable to provide tax certificates for all individual transferors involved in these transactions.

This lack of documentation could expose the company to potential risks, including tax investigations or penalties imposed by the tax authorities. If the tax authorities determine that the transferors did not fully comply with their tax obligations, our PRC subsidiaries or the company may be held liable for any unpaid taxes, penalties, or interest, which could have a material adverse effect on our financial condition and results of operations. Additionally, the absence of such certificates may lead to further scrutiny by tax authorities, which could result in delays or additional costs in completing future transactions involving equity transfers.

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There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.

Under the PRC EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the taxpayer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These conditions include: (1) the taxpayer must be the beneficial owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties on October 27, 2009, which limits the “beneficial owner” to individuals, projects or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining the “beneficial owner” status. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.

Even after we obtain the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials with relevant PRC tax authorities to prove we can enjoy the 5% lower PRC withholding tax rate. Recon HK intends to obtain the required materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that the PRC tax authorities will approve the 5% withholding tax rate on dividends received from Recon HK.

PRC regulations and potential registration requirements relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.

On August 8, 2006, six PRC regulatory agencies, including the PRC Ministry of Commerce (“MOC”), the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and was amended on June 22, 2009. The M&A Rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises. These new rules signify greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOC as a key regulator for issues related to mergers and acquisitions in China and requiring MOC approval of a broad range of merger, acquisition and investment transactions. Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

Among other things, the M&A Rules include new provisions that purport to require that an offshore SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings. However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

If the PRC regulatory authorities take the view that the VIE Agreements constitute a reverse merger acquisition or round-trip investment in related party transactions without the approval of the national offices of MOC, they could invalidate the VIE Agreements. Additionally, the PRC regulatory authorities may take the view that any public offering plan will require the prior approval of CSRC. If we cannot obtain MOC or CSRC approval in case we are required to do so, our business and financial performance will be materially adversely affected. We may also face regulatory actions or other sanctions from the MOC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds of any other offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary Shares.

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Also, if the CSRC later requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our Class A Ordinary Shares.

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. Moreover, the CAC issued the Measures of Cybersecurity Review (Revised Draft for Comments) on July 10, 2021, which requires certain operators who wish to list abroad to file a cybersecurity review with the Office of Cybersecurity Review, such as operators with personal information of more than one million users. On December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly revised and promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. We cannot assure you, however, that the regulators will not take a contrary view or will not subsequently require us to undergo the approval procedures and subject us to penalties for non-compliance. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.

PRC registration requirements for stock option plans of overseas publicly-listed companies may restrict our ability to adopt equity compensation plans for our directors and employees or otherwise limit our PRC subsidiaries’ ability to distribute profits to us.

In February 2012, SAFE promulgated the Notice on the Administration of Foreign Exchange Matters for Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies, or the Stock Option Notice, which replaced the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plans or Stock Option Plans of Overseas Publicly-Listed Companies issued by SAFE on March 28, 2007. Under the Stock Option Notice and other relevant rules and regulations, PRC residents who participate in stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are PRC residents must collectively retain a qualified PRC agent, which could be a PRC subsidiary of such overseas publicly listed company or another qualified institution selected by such PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants. Such participants must also collectively retain an overseas entrusted institution to handle matters in connection with their exercise of stock options, the purchase and sale of corresponding stocks or interests and fund transfers. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material changes. We and our PRC employees who have been granted stock options are subject to these regulations. Failure of our PRC stock option holders to complete their SAFE registrations may subject these PRC residents to fines and legal sanctions and may also limit our ability to compensate our employees and directors through equity compensation, limited our PRC subsidiaries’ ability to distribute dividends to us, or otherwise materially adversely affect our business.

The Chinese government could change its policies toward private enterprise or even nationalize or expropriate private enterprises, which could result in the total loss of our investment in that country.

Our business is subject to significant political and economic uncertainties and may be adversely affected by political, economic and social developments in China. Over the past several years, the Chinese government has pursued economic reform policies including the encouragement of private economic activity and greater economic decentralization. The Chinese government may not continue to pursue these policies or may significantly alter them to our detriment from time to time with little, if any, prior notice.

Changes in policies, laws and regulations or in their interpretation or the imposition of confiscatory taxation, restrictions on currency conversion, restrictions or prohibitions on dividend payments to shareholders, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business. Nationalization or expropriation could even result in the total loss of our investment in China and in the total loss of your investment in us.

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We may be unable to establish and maintain an effective system of internal control over financial reporting, and as a result we may be unable to accurately report our financial results or prevent fraud.

The PRC has historically lagged in western style management, governance and financial reporting concepts and practices, as well as in modern banking, and other control systems. Our current management has little experience with western style management, governance and financial reporting concepts and practices, and we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, and especially given that we are a publicly listed company in the U.S. and subject to regulation as such, we may experience difficulty in establishing management, governance, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet western standards. We may have difficulty establishing adequate management, governance, legal and financial controls in the PRC. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002 and other applicable laws, rules and regulations. This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business and the public announcement of such deficiencies could adversely impact our stock price.

The recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our future offerings, business operations share price and reputation.

U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. The PCAOB adopted a final rule on September 22, 2021 implementing the HFCA Act. The final rules adopted by the SEC relating to the HFCA Act became effective on January 10, 2022.

On May 21, 2021, NASDAQ filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in a “Restrictive Market”, (ii) prohibit Restrictive Market companies from directly listing on NASDAQ Capital Market, and only permit them to list on NASDAQ Global Select or NASDAQ Global Market in connection with a direct listing and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On August 26, 2022, the SEC announced that the PCAOB signed a Statement of Protocol with the CRSC and the Ministry of Finance of the PRC, which sets out specific arrangements on conducting inspections and investigations by both sides over relevant audit firms within the jurisdiction of both sides, including the audit firms based in mainland China and Hong Kong. This agreement marks an important step towards resolving the audit oversight issue that concern mutual interests, and sets forth arrangements for both sides to cooperate in conducting inspections and investigations of relevant audit firms, and specifies the purpose, scope and approach of cooperation, as well as the use of information and protection of specific types of data.

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On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new determination.

In December 2022, Congress passed fiscal year 2023 Omnibus spending legislation, which contained provisions to accelerate the HFCAA timeline for implementation of trading prohibitions from three years to two years. As a result of the legislation, the SEC is required to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections or complete investigations for two consecutive years.

The recent regulatory developments have resulted in additional regulatory compliance costs and uncertainties to our future capital raise activities, business and our share price. In addition, any additional actions, proceedings or rules resulting from these efforts could create new uncertainties for our shareholders, and the market price of our shares could be adversely affected,

As a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our future offerings, business and our share price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our shares.

Risks Related to Our Ordinary Shares

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

| ● | the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;

| ● | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

| ● | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

| ● | the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the NASDAQ Capital Market. Press releases relating to financial results and material events are also furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer. As a Cayman Islands company listed on the NASDAQ Capital Market, we are subject to the NASDAQ Capital Market corporate governance listing standards. However, NASDAQ Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the NASDAQ Capital Market corporate governance listing standards. To the extent that we choose to utilize the home country exemption for corporate governance matters, our shareholders may be afforded less protection than they otherwise would under the NASDAQ Capital Market corporate governance listing standards applicable to U.S. domestic issuers. We follow home country practice with respect to annual shareholders meetings.

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You may experience future dilution as a result of future equity offerings.

In order to raise additional capital, we may in the future offer additional Class A Ordinary Shares or other securities convertible into or exchangeable for our Class A Ordinary Shares at prices that may not be the same as the price per share you paid. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by existing investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional Class A Ordinary Shares, or securities convertible or exchangeable into Class A Ordinary Shares, in future transactions may be higher or lower than the price per share paid by existing investors.

We do not intend to pay dividends in the foreseeable future.

We have never paid cash dividends on our Class A Ordinary Shares. We currently intend to retain our future earnings, if any, to finance the operation and growth of our business and currently do not plan to pay any cash dividends in the foreseeable future.

Future sales of a significant number of our Class A Ordinary Shares in the public markets, or the perception that such sales could occur, could depress the market price of our Class A Ordinary Shares.

Future sales of a substantial number of our Class A Ordinary Shares in the public markets, or the perception that such sales could occur, could depress the market price of our Class A Ordinary Shares and impair our ability to raise capital through the sale of additional equity securities. If any existing shareholder or shareholders sell a substantial amount of our Class A Ordinary Shares, the prevailing market price for our Class A Ordinary Shares could be adversely affected. In addition, if we pay for our future acquisitions in whole or in part with additionally issued Class A Ordinary Shares, your ownership interests in our company would be diluted and this, in turn, could have a material and adverse effect on the price of our Class A Ordinary Shares.

The market price for our securities may be volatile, which could result in substantial losses to investors.

The market price for our Class A Ordinary Shares has been, and is likely to remain, volatile and subject to wide fluctuations in response to factors including the following:

| ● | actual or anticipated fluctuations in our quarterly operating results;

| ● | changes in the Chinese petroleum and energy industries;

| ● | changes in the Chinese economy;

| ● | announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

| ● | future sales of our Class A Ordinary Shares;

| ● | period to period fluctuations in our financial results;

| ● | low trading volume of our Class A Ordinary Shares;

| ● | additions or departures of key personnel; or

| ● | potential litigation.

We expect that any other securities of our Company are likely to be similarly volatile. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. As a result, to the extent shareholders sell our securities in negative market fluctuation, they may not receive a price per share that is based solely upon our business performance. We cannot guarantee that shareholders will not lose some of their entire investment in our securities.

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There has been and may continue to be significant volatility in the volume and price of our ordinary shares on the Nasdaq Capital Market.

The market price of our ordinary shares has been and may continue to be highly volatile. Factors, including changes in the Chinese petroleum and energy industry, changes in the Chinese economy, potential infringement of our intellectual property, relating to agreements, patents or proprietary rights, may have a significant impact on the market volume and price of our shares. Unusual trading volume in our shares occurs from time to time.

NASDAQ may apply additional and more stringent criteria for our continued listing.

NASDAQ Listing Rule 5101 provides NASDAQ with broad discretionary authority over the continued listing of securities in NASDAQ and NASDAQ may use such discretion to deny apply additional or more stringent criteria for the continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on NASDAQ inadvisable or unwarranted in the opinion of NASDAQ, even though the securities meet all enumerated criteria for continued listing on NASDAQ. In addition, NASDAQ has used its discretion to deny continued listing or to apply additional and more stringent criteria in the instances, including but not limited to where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit. For the aforementioned concerns, we may be subject to the additional and more stringent criteria of NASDAQ for our continued listing.

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ITEM 4.INFORMATION ON THE COMPANY

A. History and Development of the Company

Recon Technology, Ltd (the “Company”) was incorporated under the laws of the Cayman Islands on August 21, 2007 by Mr. Yin Shenping, Mr. Chen Guangqiang and Mr. Li Hongqi (the “Founders”) as a company with limited liability. We provide oilfield specialized equipment, automation systems, tools, chemicals and field services to petroleum companies mainly in the PRC. The Company’s wholly owned subsidiary, Recon Technology Co., Limited (“Recon-HK”) was incorporated on September 6, 2007 in Hong Kong. On November 15, 2007, Recon-HK established one wholly owned subsidiary, Jining Recon Technology Ltd. (“Recon-JN”) under the laws of the PRC, and later dissolved on April 10, 2019 as part of our previously disclosed organizational restructuring. Recon-HK did not own any assets or conduct any operations and was dissolved on May 15, 2020. On November 19, 2010, the Company established another wholly owned subsidiary, Recon Investment Ltd. (“Recon-IN”) under the laws of HK. On December 18, 2014, Recon-IN established one wholly owned subsidiary, Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”) under the laws of the PRC. Other than the equity interest in Recon-BJ, Recon-IN does not own any assets or conduct any operations. On October 10, 2023, the Company established wholly owned subsidiary, Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) under the laws of PRC. On February 22, 2024, Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”) was also established under the laws of PRC. Recon-SD and Recon-GX will carry out wasted plastic chemical recycling business to serve customers located in different areas.

Currently, we mainly conduct our business through the following PRC legal entities that are consolidated as variable interest entities (“VIEs”) and operate in the Chinese oilfield equipment & service industry and energy industry:

| 1. | Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), and

| 2. | Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).

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Chinese laws and regulations currently do not prohibit or restrict foreign ownership in petroleum businesses. However, Chinese laws and regulations do prevent direct foreign investment in certain industries. On January 1, 2008, to protect our shareholders from possible future foreign ownership restrictions, the Founders, who also held the controlling interest of BHD and Nanjing Recon, reorganized the corporate and shareholding structure of these entities by entering into certain exclusive agreements with Recon-JN, which entitled Recon-JN to receive a majority of the residual returns. On May 29, 2009, Recon-JN and BHD and Nanjing Recon entered into an operating agreement to provide full guarantee for the performance of such contracts, agreements or transactions entered into by BHD and Nanjing Recon. As a result of such agreement, Recon-JN absorbed 100% of the expected losses and received 90% of the expected net income of BHD and Nanjing Recon, which resulted in Recon-JN being the primary beneficiary of these Companies.

Recon-JN also entered into Share Pledge Agreements with the Founders, who pledged all their equity interest in these entities to Recon-JN. The Share Pledge Agreements, which were entered into by each Founder, pledged each of the Founders’ equity interest in BHD and Nanjing Recon as a guarantee for the service payment under the Service Agreement.

The Service Agreement entered into on January 1, 2008, between Recon-JN and BHD and Nanjing Recon, obligated Recon-JN to provide technical consulting services to BHD and Nanjing Recon in exchange for 90% of their annual net income as a service fee.

On April 1, 2019, as part of our planned organizational restructuring, Recon-BJ entered into a series of VIE agreements with BHD and Nanjing Recon, respectively, under the same terms and conditions as that of the VIE agreements previously entered into by Recon-JN. As a result, the VIEs were effectively transferred from Recon-JN to Recon-BJ. Accordingly, Recon-BJ bears all the economic risk of losses and receives 90% of the expected profits of BHD and Nanjing Recon, and consequently becomes the primary beneficiary of the VIEs. As part of the plan of reorganization, Recon-JN was dissolved on April 10, 2019. As Recon-JN’s parent company, Recon-HK did not own any assets or conduct any operations, and therefore was dissolved on May 15, 2020.

Following changes in shareholders of BHD and Nanjing Recon, on July 10, 2025, Recon-BJ re-signed a series of VIE agreements with BHD and Nanjing Recon, respectively. The new agreements stipulate that Recon-BJ will assume 100% of the expected losses of BHD and Nanjing Recon while receiving 95% of their projected net profits; all other terms and conditions remain unchanged from the VIE agreements executed by Recon-BJ in April 2019.

Based on the VIE agreements, we consolidated BHD and Nanjing Recon as VIEs as required by Accounting Standards Codification (“ASC”) Topic 810, Consolidation because we are the primary beneficiary of the VIEs. Management performed an ongoing reassessment of whether Recon-BJ is the primary beneficiary of BHD and Nanjing Recon.

On July 10, 2025, following recent changes to shareholders for Nanjing Recon and BHD, the various VIE agreements were required to be amended, restated, and re-registered with competent authorities. The re-executed VIE agreements were effected solely to update the identities of the registered individual shareholders of the VIEs, and the principal terms of the contractual arrangements remain unchanged. With respect to Nanjing Recon, in November 2020, Shenping Yin acquired all equity previously held by Guangqiang Chen. In January 2022, Shenping Yin made a capital contribution, and in March 2023, Yingwu Yan acquired all equity previously held by Degui Zhai.

With respect to BHD, in June 2019, Zhang Fan exited by transferring all of his equity to Guangqiang Chen; in September 2020 Mr. Yin exited by transferring all of his equity to Mr. Chen; and in 2024 and 2025 Mr. Yin subsequently re-entered and made additional capital contributions that diluted other holders.

As of the date of this report, Nanjing Recon is held by Shenping Yin (99.75%) and Yingwu Yan (0.25%), and BHD is held by Guangqiang Chen (85.93%), Shenping Yin (10.00%), Donglin Li (3.77%) and Zhiqiang Feng (0.30%). These updates do not affect the Registrant’s contractual control over the VIEs.

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On August 28, 2000, a founder of the Company purchased a controlling interest in BHD which was organized under the laws of the PRC on June 29, 1999. Through December 15, 2010, the Founders held a 67.5% ownership interest in BHD. From December 16, 2010 to June 30, 2012, Messrs. Yin Shenping and Chen Guangqiang held an 86.24% ownership interest of BHD. From June 30, 2012 to June 30, 2019, Mr. Chen Guangqiang continued to devote his personal patent to BHD and increased his ownership interest of BHD. On September 16, 2020, Yin Shenping transferred the ownership interest of ¥750,000 held by him to Chen Guangqiang. On September 29, 2024, Yin Shenping contributed an additional capital of ¥10,000 to BHD. On March 18, 2025, Yin Shenping subscribed an additional capital of ¥11,101,100 to BHD. As of the date of this report, Mr. Chen Guangqiang hold 85.93% ownership interest of BHD and Mr. Yin Shenping hold 10.00% ownership interest of BHD. BHD is combined with the Company through the date of the exclusive agreements, and has been consolidated following January 1, 2008, the date of the agreements based on ASC Topic 810. The Company allocates net income 90% and 100%, respectively, based upon the control agreements. Profits allocated to the minority interest are the remaining amount (10%).

On July 4, 2003, Nanjing Recon was organized under the laws of the PRC. On August 27, 2007, the Founders of the Company purchased a majority ownership of Nanjing Recon from a related party who was a majority owner of Nanjing Recon. Through December 15, 2010, the Founders held 80% ownership interest in Nanjing Recon. From December 16, 2010 to June 30, 2012, Messrs. Yin Shenping and Chen Guangqiang held 80% ownership interest of Nanjing Recon. On November 27, 2020, Chen Guangqiang transferred the ownership interest of ¥200,000 held by him to Yin Shenping. As of the date of this report, Mr. Yin Shenping hold a 99.7501% ownership interest of Nanjing Recon. Nanjing Recon is combined with the Company through the date of the exclusive agreements, and is consolidated following January 1, 2008, the date of the agreements based on ASC Topic 810. The Company allocates net income 90% and 100%, respectively, based upon the control agreements. Profits allocated to the non-controlling interest are the remaining amount (10%).

On January 29, 2015, we increased our authorized shares from 25,000,000 to 100,000,000 Class A Ordinary Shares.

BHD, one VIE, controls following subsidiaries:

| 1) | On December 17, 2015, Huang Hua BHD Petroleum Equipment Manufacturing Co. LTD (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the production of high efficiency heating furnaces. As of June 30, 2025, BHD had invested a total of ¥5.09 million to HH BHD. BHD owns an interest of 100% of HH BHD.

| 2) | On May 23, 2017, Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established by BHD and another investor under the laws of the PRC, with registered capital of ¥50 million. It is focusing on oilfield sewage treatment and oily sludge disposal projects. As of June 30, 2020, BHD had invested a total of ¥15.98 million Gan Su BHD. The paid in capital of Gan Su BHD contributed by all investors was ¥20.74 million ($2.93 million) as of June 30, 2020. Based on its revised chapter dated August 11, 2017, BHD owns an interest of 51% of Gan Su BHD. The paid in capital was ¥22,935,000 ($3,551,489) as of June 30, 2021. On April 26, 2021, the minority shareholder of Gan Su BHD transferred 15.4% of the equity interest hold to BHD. On May 19, 2021, the minority shareholder transferred 3.6% equity shares and BHD transferred 15.4% equity shares of Gan Su BHD to Nanjing Recon. By June 30, 2021, BHD owns an interest of 51% and Nanjing Recon owns an interest of 19% of Gan Su BHD. Nanjing Recon invested a total of RMB ¥4,560,000.00 in Gan Su BHD in July, August, and September of 2021. The paid in capital was ¥27,495,000.00 ($3,551,489) as of June 30, 2025.

| 3) | On October 16, 2017, Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established by BHD and a few other investors under the laws of the PRC, with registered capital of ¥50 million. It is focusing on design and production and sales of solar energy heating furnaces. As of June 30, 2020, BHD had invested a total of ¥4.2 million to Qinghai BHD. The paid in capital was ¥4.2 million ($0.59 million) as of June 30, 2020. BHD owns an interest of 55% of Qinghai BHD. The paid in capital was ¥4,200,000 ($650,371) as of June 30,2021. BHD owned an interest of 55% of Qinghai BHD previously; however, based on an agreement signed by the shareholders of Qinghai BHD dated October 23, 2018, each of the other two individual shareholders agreed to reduce 10% of their equity interests. As a result, Qinghai BHD returned ¥200,000 paid in capital back to one of the individual shareholders. After the new arrangement, BHD owns a total interest of 75% of Qinghai BHD. In fiscal year 2025, the Company’s management approved a plan to cease operations and close Qinghai BHD. Qinghai BHD primarily sold heating furnaces to industrial clients similar to those of BHD’s equipment operations. The decision to close Qinghai BHD was made due to its poor operating performance and failure to expand its market. Qinghai BHD’s major operations was ceased by June 2025 and was fully wound down by the date of this report.

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| 4) | On December 12, 2024, BHD and other investors incorporated Hebei Mashiji New Energy Technology Co., Ltd. (“MSJ”) under PRC law with a registered capital of ¥10 million (approximately USD 1.4 million). As of June 30, 2025, BHD owned a 70% equity interest in MSJ, having invested ¥700,000 ($97,716) for this interest. MSJ primarily produces and sells methanol fuel energy-enhancing additives for vehicles. To date, MSJ remains in the initial preparatory phase and is undertaking the procedures necessary for applying for the relevant product manufacturing license. On September 11, 2025, BHD transferred 51% of MSJ’s equity interest to a non-related investor, becoming a minority shareholder of MSJ. Accordingly, MSJ is no longer affiliated with BHD and by extension, the Company.

On December 15, 2017, we, through VIEs, BHD and Nanjing Recon, entered into a subscription agreement with Future Gas Station (Beijing) Technology, Ltd (“FGS”), pursuant to which we acquired an 8% equity interest in FGS. Established in January 2016, FGS is a service company focusing on providing new technical applications and data operations to gas stations and provides solutions to gas stations to improve their operations and their customers’ experience. On August 21, 2018, we entered into an investment agreement and a supplemental agreement (collectively, the “Investment Agreement”) with FGS and the other shareholders of FGS. Pursuant to the Investment Agreement, our ownership interest in FGS shall increase from 8% to 43%, in exchange for our investment in FGS for a total amount of RMB10 million in cash and the issuance of 2,435,284 (135,294 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the other shareholders of FGS with certain conditions. On September 24, 2019, the Company agreed to extend the agreement for six more months as negotiated with FGS to ensure the founding team can better meet its obligations under the agreement. On March 17, 2020, the Company, FGS and the other shareholders of FGS signed the third supplemental agreement to extend another 12 months to February 20, 2021 as the number of the gas stations was the only performance goal that was not achieved. As of June 30, 2020, we had invested an aggregate amount of RMB35,579,586 ($5,032,666) in FGS and issued 487,057 (27,059 shares post 2024 Reverse Split) restricted shares in total to other shareholders of FGS, and our ownership interest in FGS has increased to 43%. On February 4, 2021, Nanjing Recon and BHD, entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS. Through the fourth supplemental agreement, the Domestic Companies waived the requirement on FGS’ performance goal about the number of gas stations. Accordingly, the Domestic Companies agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, The transaction has been hereby closed. As a result, the Domestic Companies collectively own 51% interest of FGS and began to consolidate the financial results of FGS since January 2021.

On April 5, 2021, at the 2021 annual meeting, to implement a dual class structure, our shareholders approved (i) a special resolution that the authorized share capital of the Company be amended from US$1,850,000, divided into 20,000,000 ordinary shares of a nominal or par value of US$0.0925 each, to US$15,725,000, divided into 150,000,000 Class A ordinary shares of a nominal or par value of US$0.0925 each and 20,000,000 Class B ordinary shares of a nominal or par value of US$0.0925 each, and (ii) a special resolution that the Third Amended and Restated Memorandum and Articles of Association of the Company to substitute the Second Amended and Restated Memorandum and Articles of Association. On April 7, 2021, we filed the Third Amended and Restated Memorandum and Articles of Association with the Companies Register of the Cayman Islands. Our Class A ordinary shares began to trade on the NASDAQ Capital Market on April 12, 2021 under the same symbol, “RCON.”

On December 5, 2021, our board of directors and its compensation committee approved issuances of a total of 2,500,000 Class B Ordinary Shares from such shares reserved under the Company’s 2021 Equity Incentive Plan to directors and officers Shenping Yin and Guangqiang Chen. The compensation committee recommended and the board approved the Class B Ordinary Shares grants to Shenping Yin and Guangqiang Chen, each of whom has received a one-time share grant of 1,250,000 Class B Ordinary Shares. On February 28, 2022, our board approved an additional grant of 1,600,000 Class B shares to Shenping Yin and Guangqiang Chen, each of whom has received a one-time share grant of 800,000 Class B Ordinary Shares.

On March 9, 2023, our board approved an additional grant of 3,000,000 Class B shares to Shenping Yin and Guangqiang Chen, each of whom has received a one-time share grant of 1,500,000 Class B Ordinary Shares. On March 15, 2023, the Company signed a consulting agreement with a Company’s employee and some business consultants (the “Consultants”). As the service consideration, the Company issued 2,000,000 (111,111 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the Consultants as compensation for acting as advisors to the Company on new business exploration.

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On March 15, 2023, the Company and certain institutional Investors entered into that certain securities purchase agreement, pursuant to which the Company agreed to sell to such Investors an aggregate of 8,827,500(490,417 shares post 2024 Reverse Split) Class A ordinary shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share (the “Ordinary Shares”) and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase ordinary shares in a registered direct offering, and warrants to purchase up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $8.0 million before deducting the placement agent’s fees and other estimated offering expenses.

Ordinary share purchase warrants to purchase an aggregate of 7,950,769 (441,710 shares post 2024 Reverse Split) ordinary shares previously issued by the Company to certain institutional investors on June 16, 2021 had the exercise price reduced to $0.80 ($14.40 post 2024 Reverse Split). A sticker amendment was filed on April 14, 2023 with the SEC to effectuate the reduced exercise price of $0.80 ($14.40 post 2024 Reverse Split) from $6.24 ($112.32 post 2024 Reverse Split).

On October 16, 2023, 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants issued on March 15, 2023 were exercised by investor and 1,175,000 (65,278 shares post 2024 Reverse Split) Class A Ordinary shares were issued and being outstanding.

On December 14, 2023, the Company entered into a Warrant Purchase Agreement with certain accredited investors pursuant to which the Company agreed to buy back an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the investors, and the investors agreed to sell the Warrants back to the Company. The purchase price for each Warrant is $0.25 ($4.50 post 2024 Reverse Split).

On January 31, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”), pursuant to which the Company agreed to sell securities to various purchasers (the “Purchasers”) in a private placement transaction (the “Private Placement”). Pursuant to the Securities Purchase Agreement, the Company agreed to transfer, assign, set over and deliver to the Purchasers and the Purchasers agree, severally and not jointly, to acquire from the Company in the aggregate 100,000,000 (5,555,559 shares post 2024 Reverse Split) of the Company’s Class A ordinary shares (the “Shares”) at $0.11 ($1.98 post 2024 Reverse Split) per share for $11,000,000. On February 2, 2024, the Company closed the Private Placement.

On February 26, 2024, the Company granted 6,255,483 (347,527 shares post 2024 Reverse Split, as defined below) restricted Class A shares and 12,900,000 restricted Class B shares to its management and staff. The fair value of the Class A restricted shares was $988,366 based on the fair value of share price $0.158 ($2.844 post 2024 Reverse Split) at February 26, 2024. The fair value of the Class B restricted shares was $2,130,000 based on the fair value of share price $0.17 at February 26, 2024.

On March 29, 2024, the Company’s shareholders approved the reverse shares split of the Company’s Class A Ordinary Shares at the ratio of one-for-eighteen with the market effective date of May 1, 2024 (the “2024 Reverse Split”). In connection with the reverse stock split, on March 29, 2024 the Company’s shareholder approved and authorized the Company’s registered office service agent to file the Fourth Amended and Restated Memorandum and Articles of Association with local registry, and change its authorized share capital from: US$15,725,000 divided into 150,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0925 each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to: US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each (the “2024 change in capital structure”).

On March 31, 2025, the Company granted 2,263,194 restricted Class A Ordinary Shares to its management and staff. The fair value of the Class A restricted shares was $3,496,635 based on the fair value of share price $1.5450 at March 31,2025.

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Exclusive Technical Consulting Service Agreement

Pursuant to the exclusive technical consulting service agreement between Recon-BJ and each of BHD and Nanjing Recon, Recon-BJ has the exclusive right to provide each of BHD and Nanjing Recon with technical support services, consulting services and other services, including granting use rights of intellectual property rights, software services, network support, database support, hardware services, technical support, employee training, research and development of technology and market information, business management consulting, marketing and promotion services, customer management and services, lease hardware and device, and the others necessary for each of BHD and Nanjing Recon’s needs. In exchange, Recon-BJ is entitled to a service fee that equals to all of the consolidated profit after offsetting the previous year’s accumulated deficit, operating costs, expenses, taxes, and other contributions and reasonable operation profit of each of BHD and Nanjing Recon. In addition to the services fees, each of BHD and Nanjing Recon will reimburse all reasonable costs, reimbursed payments and out-of-pocket expenses, paid or incurred by Recon-BJ in connection with its performance.

Under the exclusive technical consulting service agreement, without Recon-BJ’s prior written consent, each of BHD and Nanjing Recon agrees not to engage in any transaction which may materially affect its asset, business, employment, obligation, right or operation.

The exclusive technical consulting service agreement remains effective, unless terminated pursuant to the exclusive technical consulting service agreement or upon the written notice of Recon-BJ.

Exclusive Equity Interest Purchase Agreement

Pursuant to the amended and restated exclusive equity interest purchase agreement, among Recon-BJ, each of BHD and Nanjing Recon and the shareholder who owned all the equity interests of each of BHD and Nanjing Recon, such shareholders grant Recon-BJ an exclusive right to purchase his equity interests in each of BHD and Nanjing Recon. The purchase price shall be the lowest price then permitted under applicable PRC laws. Recon-BJ or its designated person may exercise such right at any time to purchase all or part of the equity interests in each of BHD and Nanjing Recon until it has acquired all equity interests of each of BHD and Nanjing Recon, which is irrevocable during the term of the agreement.

The amended and restated exclusive equity interest purchase agreement remains in effect until all equity interests held by the shareholders have been transferred or assigned to Recon-BJ and/or any other person designated by Recon-BJ. However, Recon-BJ has the right to terminate these agreements unconditionally upon giving prior written notice to each of BHD and Nanjing Recon at any time.

Equity Interest Pledge Agreement

Pursuant to the amended and restated equity interest pledge agreement among the shareholders who owned all the equity interests of each of BHD and Nanjing Recon, such shareholders pledge all of the equity interests in each of BHD and Nanjing Recon to Recon-BJ as collateral to secure the obligations of each of BHD and Nanjing Recon under the exclusive technical consulting service agreement and the amended and restated exclusive equity interest purchase agreement. The shareholders of each of BHD and Nanjing Recon are prohibited or may not transfer the pledged equity interests without prior consent of Recon-BJ unless transferring the equity interests to Recon-BJ or its designated person in accordance with the amended and restated exclusive equity interest purchase agreement.

The amended and restated equity interest pledge agreement shall come into force the date on which the pledged interests is recorded, under each of BHD and Nanjing Recon’s register of shareholders and is registered with competent administration for industry and commerce of each of BHD and Nanjing Recon until all of the liabilities and debts to Recon-BJ have been fulfilled completely by each of BHD and Nanjing Recon. Each of BHD and Nanjing Recon and the shareholders who owned all the equity interest of each of BHD and Nanjing Recon shall not terminate this agreement in any circumstance for any reason.

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Shareholders’ Power of Attorney

Pursuant to the shareholders’ amended and restated power of attorney, the shareholders of each of BHD and Nanjing Recon gives Recon-BJ irrevocable proxies to act on their behaves on all matters pertaining to each of BHD and Nanjing Recon and to exercise all of their rights as shareholders of each of BHD and Nanjing Recon, including the right to execute and deliver shareholder resolutions, to dispose any or all equity interests, to nominate, elect, designate, or appoint officers and directors, to supervise company’s performance, to approve submission of any registration documents, to attend shareholders meetings, to exercise voting rights and all of the other rights, to take legal actions against the harmful actions by directors or officers, to approve the amendments to the articles of association of the company, and any other rights under the articles of association of the company. The amended and restated power of attorney shall remain in effect while the shareholders of each of BHD and Nanjing Recon hold the equity interests in each of BHD and Nanjing Recon.

Based on the foregoing Contractual Arrangements, which grant Recon-BJ effective control of each of BHD and Nanjing Recon and enable Recon-BJ to receive all of their expected residual returns, we account for each of BHD and Nanjing Recon as a VIE. Accordingly, we consolidate the accounts of each of BHD and Nanjing Recon, in accordance with Regulation S-X-3A-02 promulgated by the SEC and Accounting Standards Codification (“ASC”) 810-10, Consolidation.

Because we do not directly hold equity interest in the VIEs, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including limitation on foreign ownership of internet technology companies, regulatory review of oversea listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations and the value of Class A Ordinary Shares may depreciate significantly or become worthless.

Our Contractual Arrangements may be less effective in providing control over each of BHD and Nanjing Recon than direct ownership. See “Risk Factors – Risks related to our Corporate Structure – We conduct our business through BHD, Nanjing Recon, FGS and their respective subsidiaries by means of Contractual Arrangements. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.” for more details.

We may also be subject to sanctions imposed by PRC regulatory agencies including the Chinese Securities Regulatory Commission, or CSRC, if we fail to comply with their rules and regulations. See “Risk Factors — PRC regulations and potential registration requirements relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.” for more details.

We are subject to certain legal and operational risks associated with the VIEs’ operations in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in the VIEs’ operations, significant depreciation of the value of our Class A Ordinary Shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. See “Risk Factors - We conduct our business through BHD, Nanjing Recon and their respective subsidiaries by means of Contractual Arrangements. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.” Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. exchange.

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Permission Required from the PRC Authorities for the VIEs’ Operation

We are currently not required to obtain permission from any of the PRC authorities to operate and issue our Class A Ordinary Shares to foreign investors. In addition, we, our subsidiaries, or the VIEs are not required to obtain permission or approval from the PRC authorities including CSRC or Cyberspace Administration of China for the VIEs’ operation, nor have we, our subsidiaries, or the VIEs applied for or received any denial for the VIEs’ operation. However, recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of interpretation and enforcement of the rules and regulations in the PRC, which can change quickly with little advance notice, and any future actions of the PRC authorities.

Transfer of Cash in the VIEs

We are an exempted holding company incorporated in the Cayman Islands. If we determine to pay dividends on any of our Ordinary Shares in the future, as an exempted holding company, we will be dependent on receipt of funds from our Wholly Foreign Owned Enterprise (“WFOE”). A WFOE is a limited liability company based in the People’s Republic of China but wholly owned by foreign investors. In our instance, Recon Hengda Technology (Beijing) Co., Ltd (“Recon-BJ”) is a WFOE wholly owned by Recon Investment Ltd. (“Recon-IN”), a Hong Kong limited company, which in turn is wholly owned by us.

Under the Exclusive Technical Consultation and Service Agreements signed between Recon-BJ and the VIEs, Recon-BJ is entitled to 90% of the expected profits of the VIEs in exchange for providing exclusive technical consulting services to the VIEs. Recon-BJ also bears all the economic risk of losses. Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to its shareholders only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, according to the current effective laws in Cayman Islands and Hong Kong, the resident companies could pay dividends to their shareholders. And there are no foreign exchange restrictions on these two areas. Therefore, Recon-BJ can distribute the income obtained under the Contractual Arrangement to Recon-IN in the form of dividends, with Recon-IN in turn distributing such revenue to us in the form of dividends, with we in turn would distribute such revenue to U.S. investors in the form of dividends.

Each VIE has its own operating cash flow. Cashflow between our Company and the VIEs primarily consists of transfers from us to the VIEs for supplemental working capital, which is mainly used in purchase of materials and payment of operating expenses and investments. In addition, the VIEs occasionally make payments on our behalf when we experience a cash shortage. For the fiscal years ended June 30, 2025, 2024 and 2023, net cash transferred from the Company to the VIEs was RMB 92,151,863, RMB84,211,565 and RMB69,562,912, respectively. Neither we nor the VIEs have present plans to distribute earnings or settle amounts owed under the Contractual Agreements. We currently plan to retain the cash in the VIEs for business growth and operation. No dividends or distributions have been declared to pay to us from our subsidiaries or the VIEs. No dividends or distributions were made to any U.S. investors. For a description of our corporate structure and VIE contractual arrangements, see “Corporate History and Structure.” See also “Risk Factors – Risks Related to Our Corporate Structure.”

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U.S. Dollar as the Functional Currency under FASB ASC 830-10-45-4

The functional currency of the Company, as a Cayman Islands holding entity, is the U.S. Dollar. Management has determined that the intercompany receivable is denominated in U.S. Dollars for several reasons: first, our functional currency (as the Cayman Islands holding entity) is the U.S. Dollar; and second, the inter-company receivable is ultimately paid in U.S. Dollars. Although transactions involving the Domestic Companies may involve the RMB from time to time, the transactions are ultimately denominated in U.S. Dollars to reflect our functional currency. For these reasons, because our functional currency is the U.S. Dollar, and because the inter-company receivables are ultimately paid in U.S. Dollars, we believe there are no exchange rate fluctuations as the parent company.

Foreign Exchange Risk

The Domestic Companies, and Recon-BJ classify the RMB as their functional currencies. Because our functional currency, as the Cayman Islands holding entity, is the U.S. Dollar, we are exposed to foreign exchange risks from fluctuations with the exchange rates among the U.S. Dollar and the RMB. Notwithstanding that Domestic Companies conduct operations and transactions in RMB, we ultimately believe that there should not be any U.S. Dollar/RMB exchange rate fluctuations because the inter-company receivable is denominated in U.S. Dollars. Thus, the transactions and operations reported by the Domestic Companies are ultimately paid in U.S. Dollars as the inter-company receivables, which reflect our functional currency in U.S. Dollars as the parent company. See “Risk Factors – Risks Related to Our Corporate Structure - There are possible economic risks posed by foreign exchange rate fluctuations between the U.S. Dollar and RMB.”

Select Condensed Financial Statements on Consolidated VIEs

The following table below provides a condensed consolidating schedule depicting the financial position, cash flows, and results of operations for the parent, the consolidated VIEs, and any eliminating adjustments separately as of the same dates and for the same periods for which audited consolidated financial statements are required.

​

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Table of Contents

SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended June 30, 2025
​ |  | Recon |  | ​ |  | ​ |  | ​ |  | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | “Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) | ​ | (Hong Kong and PRC)” | ​ | subsidiaries (PRC) | ​ | Eliminations | ​ | Total
Revenue |  | ¥ | — |  | ¥ | — |  | ¥ | 66,285,032 |  | ¥ | — |  | ¥ | 66,285,032
Cost of Revenue |  | ​ | — |  | ​ | — |  | ​ | 51,044,495 |  | ​ | — |  | ​ | 51,044,495
Gross Profit |  | ​ | — |  | ​ | — | ​ | ​ | 15,240,537 | ​ | ​ | — | ​ | ​ | 15,240,537
Operating expenses | ​ | ​ | 27,947,713 | ​ | ​ | 3,238,542 | ​ | ​ | 41,373,994 | ​ | ​ | — | ​ | ​ | 72,560,249
Loss from operations | ​ | ​ | (27,947,713) | ​ | ​ | (3,238,542) | ​ | ​ | (26,133,457) | ​ | ​ | — | ​ | ​ | (57,319,712)
Other income, net | ​ | ​ | 8,956,425 | ​ | ​ | 2,373,646 | ​ | ​ | 2,289,944 | ​ | ​ | — | ​ | ​ | 13,620,015
Loss from subsidiaries | ​ | ​ | — | ​ | ​ | (22,732,400) | ​ | ​ | — | ​ | ​ | 22,732,400 | ​ | ​ | —
Loss from VIEs | ​ | ​ | (23,597,266) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 23,597,266 | ​ | ​ | —
Income tax expenses | ​ | ​ | — | ​ | ​ | (30) | ​ | ​ | 1,610 | ​ | ​ | — | ​ | ​ | 1,580
Net loss | ​ | ​ | (42,588,554) | ​ | ​ | (23,597,266) | ​ | ​ | (23,845,123) | ​ | ​ | 46,329,666 | ​ | ​ | (43,701,277)
Non-controlling interest | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,112,723) | ​ | ​ | — | ​ | ​ | (1,112,723)
Net Loss Attributable to Recon Technology, Ltd | ​ | ¥ | (42,588,554) | ​ | ¥ | (23,597,266) | ​ | ¥ | (22,732,400) | ​ | ¥ | 46,329,666 | ​ | ¥ | (42,588,554)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended June 30, 2024
​ |  | Recon |  | ​ |  | ​ |  | ​ |  | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | “Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) | ​ | (Hong Kong and PRC)” | ​ | subsidiaries (PRC) | ​ | Eliminations | ​ | Total
Revenue | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 68,854,280 | ​ | ¥ | — | ​ | ¥ | 68,854,280
Cost of Revenue |  | ​ | — | ​ | ​ | 135,705 | ​ | ​ | 47,841,131 | ​ | ​ | — | ​ | ​ | 47,976,836
Gross Profit |  | ​ | — | ​ | ​ | (135,705) | ​ | ​ | 21,013,149 | ​ | ​ | — | ​ | ​ | 20,877,444
Operating expenses | ​ | ​ | 44,012,602 | ​ | ​ | 3,200,926 | ​ | ​ | 45,301,827 | ​ | ​ | — | ​ | ​ | 92,515,355
Loss from operations | ​ | ​ | (44,012,602) | ​ | ​ | (3,336,631) | ​ | ​ | (24,288,678) | ​ | ​ | — | ​ | ​ | (71,637,911)
Other income (expenses), net | ​ | ​ | 16,452,789 | ​ | ​ | (778,939) | ​ | ​ | 4,528,251 | ​ | ​ | — | ​ | ​ | 20,202,101
Loss from subsidiaries | ​ | ​ | — | ​ | ​ | (18,195,846) | ​ | ​ | — | ​ | ​ | 18,195,846 | ​ | ​ | —
Loss from VIEs | ​ | ​ | (22,311,446) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 22,311,446 | ​ | ​ | —
Income tax expenses | ​ | ​ | — | ​ | ​ | 30 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 30
Net loss | ​ | ​ | (49,871,259) | ​ | ​ | (22,311,446) | ​ | ​ | (19,760,427) | ​ | ​ | 40,507,292 | ​ | ​ | (51,435,840)
Non-controlling interest | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,564,581) | ​ | ​ | — | ​ | ​ | (1,564,581)
Net Loss Attributable to Recon Technology, Ltd | ​ | ¥ | (49,871,259) | ​ | ¥ | (22,311,446) | ​ | ¥ | (18,195,846) | ​ | ¥ | 40,507,292 | ​ | ¥ | (49,871,259)

​

​

45

Table of Contents

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Year Ended June 30, 2023
​ |  | Recon |  | ​ |  | ​ |  | ​ |  | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | “Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) | ​ | (Hong Kong and PRC)” | ​ | subsidiaries (PRC) | ​ | Eliminations | ​ | Total
Revenue | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 67,114,378 | ​ | ¥ | — | ​ | ¥ | 67,114,378
Cost of Revenue |  | ​ | — | ​ | ​ | — | ​ | ​ | 48,247,395 | ​ | ​ | — | ​ | ​ | 48,247,395
Gross Profit |  | ​ | — | ​ | ​ | — | ​ | ​ | 18,866,983 | ​ | ​ | — | ​ | ​ | 18,866,983
Operating expenses | ​ | ​ | 50,352,631 | ​ | ​ | 1,343,355 | ​ | ​ | 36,503,732 | ​ | ​ | — | ​ | ​ | 88,199,718
Loss from operations | ​ | ​ | (50,352,631) | ​ | ​ | (1,343,355) | ​ | ​ | (17,636,749) | ​ | ​ | — | ​ | ​ | (69,332,735)
Other income (expenses), net | ​ | ​ | 16,224,783 | ​ | ​ | 343,437 | ​ | ​ | (8,693,538) | ​ | ​ | — | ​ | ​ | 7,874,682
Loss from subsidiaries | ​ | ​ | — | ​ | ​ | (24,039,535) | ​ | ​ | — | ​ | ​ | 24,039,535 | ​ | ​ | —
Loss from VIEs | ​ | ​ | (25,039,453) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 25,039,453 | ​ | ​ | —
Income tax expenses | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 18,339 | ​ | ​ | — | ​ | ​ | 18,339
Net loss | ​ | ​ | (59,167,301) | ​ | ​ | (25,039,453) | ​ | ​ | (26,348,626) | ​ | ​ | 49,078,988 | ​ | ​ | (61,476,392)
Non-controlling interest | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (2,309,091) | ​ | ​ | — | ​ | ​ | (2,309,091)
Net Loss Attributable to Recon Technology, Ltd | ​ | ¥ | (59,167,301) | ​ | ¥ | (25,039,453) | ​ | ¥ | (24,039,535) | ​ | ¥ | 49,078,988 | ​ | ¥ | (59,167,301)

​

​

46

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SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of June 30, 2025
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) |  | (Hong Kong and PRC) |  | subsidiaries (PRC) |  | Eliminations |  | Total
Cash and cash equivalents |  | ¥ | 58,938,178 | ​ | ¥ | 31,449,654 | ​ | ¥ | 8,486,745 | ​ | ¥ | — | ​ | ¥ | 98,874,577
Restricted cash |  | ​ | — | ​ | ​ | — | ​ | ​ | 8,204 | ​ | ​ | — | ​ | ​ | 8,204
Short-term investments |  | ​ | 3,599,211 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,599,211
Other current assets |  | ​ | 101,882,614 | ​ | ​ | 34,282,844 | ​ | ​ | 117,510,448 | ​ | ​ | — | ​ | ​ | 253,675,906
Intercompany receivables |  | ​ | 467,888,857 | ​ | ​ | 162,007,955 | ​ | ​ | — | ​ | ​ | (629,896,812) | ​ | ​ | —
Total current assets |  | ​ | 632,308,860 | ​ | ​ | 227,740,453 | ​ | ​ | 126,005,397 | ​ | ​ | (629,896,812) | ​ | ​ | 356,157,898
Investments in subsidiaries and VIEs | ​ | ​ | (162,651,169) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 162,651,169 | ​ | ​ | —
Benefits through VIEs and VIE’s subsidiaries | ​ | ​ | — | ​ | ​ | (149,604,219) | ​ | ​ | — | ​ | ​ | 149,604,219 | ​ | ​ | —
Other non-current assets | ​ | ​ | — | ​ | ​ | 126,551,114 | ​ | ​ | 42,912,113 | ​ | ​ | — | ​ | ​ | 169,463,227
Total non-current assets | ​ | ​ | (162,651,169) | ​ | ​ | (23,053,105) | ​ | ​ | 42,912,113 | ​ | ​ | 312,255,388 | ​ | ​ | 169,463,227
Total Assets | ​ | ​ | 469,657,691 | ​ | ​ | 204,687,348 | ​ | ​ | 168,917,510 | ​ | ​ | (317,641,424) | ​ | ​ | 525,621,125
Intercompany payables | ​ | ​ | — | ​ | ​ | 364,307,856 | ​ | ​ | 265,588,956 | ​ | ​ | (629,896,812) | ​ | ​ | —
Other liabilities and accrued liabilities | ​ | ​ | 2,230,173 | ​ | ​ | 8,604,069 | ​ | ​ | 60,817,136 | ​ | ​ | — | ​ | ​ | 71,651,378
Total Liabilities | ​ | ​ | 2,230,173 | ​ | ​ | 372,911,925 | ​ | ​ | 326,406,092 | ​ | ​ | (629,896,812) | ​ | ​ | 71,651,378
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 7,987,959 shares and 10,627,426 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively* |  | ​ | 101,548 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 101,548
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 20,000,000 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively* |  | ​ | 14,038 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 14,038
Additional paid-in capital | ​ | ​ | 692,569,747 | ​ | ​ | — | ​ | ​ | 5,573,408 | ​ | ​ | (5,573,408) | ​ | ​ | 692,569,747
Retained earnings | ​ | ​ | (258,751,710) | ​ | ​ | (149,564,514) | ​ | ​ | (135,721,678) | ​ | ​ | 285,286,192 | ​ | ​ | (258,751,710)
Accumulated other comprehensive income | ​ | ​ | 33,493,895 | ​ | ​ | (18,660,063) | ​ | ​ | (13,882,541) | ​ | ​ | 32,542,604 | ​ | ​ | 33,493,895
Total Shareholders’ Equity | ​ | ​ | 467,427,518 | ​ | ​ | (168,224,577) | ​ | ​ | (144,030,811) | ​ | ​ | 312,255,388 | ​ | ​ | 467,427,518
Non-controlling interests | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (13,457,771) | ​ | ​ | — | ​ | ​ | (13,457,771)
Total Liabilities and Equity | ​ | ¥ | 469,657,691 | ​ | ¥ | 204,687,348 | ​ | ¥ | 168,917,510 | ​ | ¥ | (317,641,424) | ​ | ¥ | 525,621,125

*Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

​

47

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​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of June 30, 2024
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) |  | (Hong Kong and PRC) |  | subsidiaries (PRC) |  | Eliminations |  | Total
Cash and cash equivalents |  | ¥ | 16,473,018 | ​ | ¥ | 58,161,122 | ​ | ¥ | 35,357,534 | ​ | ¥ | — | ​ | ¥ | 109,991,674
Restricted cash |  | ​ | — | ​ | ​ | — | ​ | ​ | 848,936 | ​ | ​ | — | ​ | ​ | 848,936
Short-term investments |  | ​ | 88,091,794 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 88,091,794
Other current assets |  | ​ | 170,158,947 | ​ | ​ | 13,263,107 | ​ | ​ | 125,157,390 | ​ | ​ | — | ​ | ​ | 308,579,444
Intercompany receivables |  | ​ | 375,736,992 | ​ | ​ | 157,821,815 | ​ | ​ | — | ​ | ​ | (533,558,807) | ​ | ​ | —
Total current assets |  | ​ | 650,460,751 | ​ | ​ | 229,246,044 | ​ | ​ | 161,363,860 | ​ | ​ | (533,558,807) | ​ | ​ | 507,511,848
Investments in subsidiaries and VIEs |  | ​ | (145,408,577) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 145,408,577 | ​ | ​ | —
Benefits through VIEs and VIE’s subsidiaries | ​ | ​ | — | ​ | ​ | (129,879,588) | ​ | ​ | — | ​ | ​ | 129,879,588 | ​ | ​ | —
Other non-current assets | ​ | ​ | — | ​ | ​ | 15,044,379 | ​ | ​ | 29,833,287 | ​ | ​ | — | ​ | ​ | 44,877,666
Total non-current assets | ​ | ​ | (145,408,577) | ​ | ​ | (114,835,209) | ​ | ​ | 29,833,287 | ​ | ​ | 275,288,165 | ​ | ​ | 44,877,666
Total Assets | ​ | ​ | 505,052,174 | ​ | ​ | 114,410,835 | ​ | ​ | 191,197,147 | ​ | ​ | (258,270,642) | ​ | ​ | 552,389,514
Intercompany payables | ​ | ​ | — | ​ | ​ | 264,135,617 | ​ | ​ | 269,423,190 | ​ | ​ | (533,558,807) | ​ | ​ | —
Other liabilities and accrued liabilities | ​ | ​ | 2,497,637 | ​ | ​ | 432,795 | ​ | ​ | 58,525,185 | ​ | ​ | — | ​ | ​ | 61,455,617
Total Liabilities | ​ | ​ | 2,497,637 | ​ | ​ | 264,568,412 | ​ | ​ | 327,948,375 | ​ | ​ | (533,558,807) | ​ | ​ | 61,455,617
Class A ordinary shares, $0.0001 U.S. dollar par value,500,000,000 shares authorized; 7,987,959 shares and 7,987,959 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* |  | ​ | 99,634 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 99,634
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively* | ​ | ​ | 4,693 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,693
Additional paid-in capital | ​ | ​ | 681,476,717 | ​ | ​ | — | ​ | ​ | 4,749,000 | ​ | ​ | (4,749,000) | ​ | ​ | 681,476,717
Retained earnings | ​ | ​ | (216,163,156) | ​ | ​ | (125,967,252) | ​ | ​ | (112,989,285) | ​ | ​ | 238,956,537 | ​ | ​ | (216,163,156)
Accumulated other comprehensive income | ​ | ​ | 37,136,649 | ​ | ​ | (24,190,325) | ​ | ​ | (16,890,303) | ​ | ​ | 41,080,628 | ​ | ​ | 37,136,649
Total Shareholders’ Equity | ​ | ​ | 502,554,537 | ​ | ​ | (150,157,577) | ​ | ​ | (125,130,588) | ​ | ​ | 275,288,165 | ​ | ​ | 502,554,537
Non-controlling interests | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (11,620,640) | ​ | ​ | — | ​ | ​ | (11,620,640)
Total Liabilities and Equity | ​ | ¥ | 505,052,174 | ​ | ¥ | 114,410,835 | ​ | ¥ | 191,197,147 | ​ | ¥ | (258,270,642) | ​ | ¥ | 552,389,514

*Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

​

48

Table of Contents

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of June 30, 2023
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | Non-VIE Subsidiaries | ​ | VIEs and VIE’s | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) |  | (Hong Kong and PRC) |  | subsidiaries (PRC) |  | Eliminations |  | Total
Cash and cash equivalents |  | ¥ | 54,864,089 | ​ | ¥ | 11,600,593 | ​ | ¥ | 37,661,118 | ​ | ¥ | — | ​ | ¥ | 104,125,800
Restricted cash |  | ​ | — | ​ | ​ | — | ​ | ​ | 731,545 | ​ | ​ | — | ​ | ​ | 731,545
Short-term investments | ​ | ​ | 184,184,455 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 184,184,455
Other current assets |  | ​ | 77,134,062 | ​ | ​ | 35,567 | ​ | ​ | 138,201,744 | ​ | ​ | — | ​ | ​ | 215,371,373
Intercompany receivables |  | ​ | 291,525,426 | ​ | ​ | 156,313,805 | ​ | ​ | — | ​ | ​ | (447,839,231) | ​ | ​ | —
Total current assets |  | ​ | 607,708,032 | ​ | ​ | 167,949,965 | ​ | ​ | 176,594,407 | ​ | ​ | (447,839,231) | ​ | ​ | 504,413,173
Investments in subsidiaries and VIEs |  | ​ | (122,920,490) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 122,920,490 | ​ | ​ | —
Benefits through VIEs and VIE’s subsidiaries |  | ​ | — | ​ | ​ | (111,196,475) | ​ | ​ | — | ​ | ​ | 111,196,475 | ​ | ​ | —
Other non-current assets | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 27,411,404 | ​ | ​ | — | ​ | ​ | 27,411,404
Total non-current assets | ​ | ​ | (122,920,490) | ​ | ​ | (111,196,475) | ​ | ​ | 27,411,404 | ​ | ​ | 234,116,965 | ​ | ​ | 27,411,404
Total Assets | ​ | ​ | 484,787,542 | ​ | ​ | 56,753,490 | ​ | ​ | 204,005,811 | ​ | ​ | (213,722,266) | ​ | ​ | 531,824,577
Intercompany payables | ​ | ​ | — | ​ | ​ | 183,903,309 | ​ | ​ | 263,935,922 | ​ | ​ | (447,839,231) | ​ | ​ | —
Other liabilities and accrued liabilities | ​ | ​ | 35,580,580 | ​ | ​ | 519,671 | ​ | ​ | 56,573,423 | ​ | ​ | 92,673,674 | ​ | ​ | —
Total Liabilities | ​ | ​ | 35,580,580 | ​ | ​ | 184,422,980 | ​ | ​ | 320,509,345 | ​ | ​ | (447,839,231) | ​ | ​ | 92,673,674
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 1,704,766 shares and 2,306,295 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* | ​ | ​ | 26,932 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 26,932
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 4,100,000 shares and 7,100,000 shares issued and outstanding as of June 30, 2022 and June 30, 2023, respectively* |  | ​ | 4,693 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,693
Additional paid-in capital | ​ | ​ | 580,340,061 | ​ | ​ | — | ​ | ​ | 4,749,000 | ​ | ​ | (4,749,000) | ​ | ​ | 580,340,061
Retained earnings | ​ | ​ | (166,291,897) | ​ | ​ | (103,655,803) | ​ | ​ | (94,793,438) | ​ | ​ | 198,449,241 | ​ | ​ | (166,291,897)
Accumulated other comprehensive income | ​ | ​ | 35,127,173 | ​ | ​ | (24,013,687) | ​ | ​ | (16,403,037) | ​ | ​ | 40,416,724 | ​ | ​ | 35,127,173
Total Shareholders’ Equity | ​ | ​ | 449,206,962 | ​ | ​ | (127,669,490) | ​ | ​ | (106,447,475) | ​ | ​ | 234,116,965 | ​ | ​ | 449,206,962
Non-controlling interests | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (10,056,059) | ​ | ​ | — | ​ | ​ | (10,056,059)
Total Liabilities and Equity | ​ | ¥ | 484,787,542 | ​ | ¥ | 56,753,490 | ​ | ¥ | 204,005,811 | ​ | ¥ | (213,722,266) | ​ | ¥ | 531,824,577

*Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

​

49

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SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Year Ended June 30, 2025
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | Subsidiaries | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | (Hong Kong | ​ | ​ | ​ | ​ | ​ | Consolidated
​ |  | Islands) |  | and PRC) |  | VIE (PRC) |  | Eliminations |  | Total
Net cash used in operating activities | ​ | ¥ | (17,338,325) | ​ | ¥ | (10,682,873) | ​ | ¥ | (5,749,976) | ​ | ​ | — | ​ | ¥ | (33,771,174)
Net cash provided by (used in) investing activities | ​ | ​ | 70,015,052 | ​ | ​ | (114,537,192) | ​ | ​ | (13,916,739) | ​ | ​ | 92,151,863 | ​ | ​ | 33,712,984
Net cash provided by financing (used in) activities | ​ | ​ | (2,529,724) | ​ | ​ | 95,986,095 | ​ | ​ | (4,577,855) | ​ | ​ | (92,151,863) | ​ | ​ | (3,273,347)
Effect of exchange rate fluctuation on cash and cash equivalents | ​ | ​ | (7,681,843) | ​ | ​ | 2,522,502 | ​ | ​ | (3,466,951) | ​ | ​ | — | ​ | ​ | (8,626,292)
Net change in cash | ​ | ​ | 42,465,160 | ​ | ​ | (26,711,468) | ​ | ​ | (27,711,521) | ​ | ​ | — | ​ | ​ | (11,957,829)
Opening cash balance | ​ | ​ | 16,473,018 | ​ | ​ | 58,161,122 | ​ | ​ | 36,206,470 | ​ | ​ | — | ​ | ​ | 110,840,610
Restricted cash | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,204 | ​ | ​ | — | ​ | ​ | 8,204
Ending cash balance | ​ | ¥ | 58,938,178 | ​ | ¥ | 31,449,654 | ​ | ¥ | 8,486,745 | ​ | ​ | — | ​ | ¥ | 98,874,577

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Year Ended June 30, 2024
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. | ​ | Subsidiaries | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (Cayman | ​ | (Hong Kong | ​ | ​ | ​ | ​ | ​ | Consolidated
​ |  | Islands) |  | and PRC) |  | VIE (PRC) |  | Eliminations |  | Total
Net cash used in operating activities | ​ | ¥ | (5,802,631) | ​ | ¥ | (9,255,014) | ​ | ¥ | (28,690,288) | ​ | ​ | — | ​ | ¥ | (43,747,933)
Net cash provided by (used in) investing activities | ​ | ​ | (261,267,638) | ​ | ​ | (23,219,383) | ​ | ​ | 203,260,432 | ​ | ​ | 84,211,565 | ​ | ​ | 2,984,976
Net cash provided by financing activities | ​ | ​ | 45,094,034 | ​ | ​ | 78,724,299 | ​ | ​ | 5,417,289 | ​ | ​ | (84,211,565) | ​ | ​ | 45,024,057
Effect of exchange rate fluctuation on cash and cash equivalents | ​ | ​ | 2,302,664 | ​ | ​ | 310,627 | ​ | ​ | (891,126) | ​ | ​ | — | ​ | ​ | 1,722,165
Net change in cash | ​ | ​ | (219,673,571) | ​ | ​ | 46,560,529 | ​ | ​ | 179,096,307 | ​ | ​ | — | ​ | ​ | 5,983,265
Opening cash balance | ​ | ​ | 236,146,589 | ​ | ​ | 11,600,593 | ​ | ​ | (142,889,837) | ​ | ​ | — | ​ | ​ | 104,857,345
Restricted cash | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 848,936 | ​ | ​ | — | ​ | ​ | 848,936
Ending cash balance | ​ | ¥ | 16,473,018 | ​ | ¥ | 58,161,122 | ​ | ¥ | 35,357,534 | ​ | ​ | — | ​ | ¥ | 109,991,674

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Year Ended June 30, 2023
​ | ​ | Recon | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Technology, | ​ | Subsidiaries | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ltd. (Cayman | ​ | (Hong Kong | ​ | ​ | ​ | ​ | ​ | Consolidated
​ | ​ | Islands) |  | and PRC) |  | VIE (PRC) |  | Eliminations |  | Total
Net cash used in operating activities | ​ | ¥ | (22,888,678) | ​ | ¥ | (964,905) | ​ | ¥ | (27,834,748) | ​ | ​ | — | ​ | ¥ | (51,688,331)
Net cash used in investing activities |  | ​ | (314,716,414) | ​ | ​ | ​ | ​ | ​ | (16,808,723) | ​ | ​ | 86,300,464 | ​ | ​ | (245,224,673)
Net cash provided by financing activities |  | ​ | 49,418,344 | ​ | ​ | 16,737,550 | ​ | ​ | 76,527,843 | ​ | ​ | (86,300,464) | ​ | ​ | 56,383,273
Effect of exchange rate fluctuation on cash and cash equivalents |  | ​ | 46,211,878 | ​ | ​ | (6,274,284) | ​ | ​ | (12,248,935) | ​ | ​ | — | ​ | ​ | 27,688,659
Net change in cash |  | ​ | (241,974,870) | ​ | ​ | 9,498,361 | ​ | ​ | 19,635,437 | ​ | ​ | — | ​ | ​ | (212,841,072)
Opening cash balance |  | ​ | 296,838,959 | ​ | ​ | 2,102,232 | ​ | ​ | 18,757,226 | ​ | ​ | — | ​ | ​ | 317,698,417
Restricted cash | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 731,545 | ​ | ​ | — | ​ | ​ | 731,545
Ending cash balance |  | ¥ | 54,864,089 | ​ | ¥ | 11,600,593 | ​ | ¥ | 37,661,118 | ​ | ​ | — | ​ | ¥ | 104,125,800

​

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VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

The nature of any assets, operations and cash flows that exist or which occur outside of the VIEs are mainly about:

| ● | The daily operations of us, as the parent company, to maintain the basic functions as a holding entity such as the purchase of materials and payment of operating expenses and investments, in order to realize the control of our subsidiaries and the VIEs to ensure that the overall company’s business objectives are fulfilled. The main resource to finance these activities are cash from securities offerings.

| ● | There are some businesses or projects which are signed by us, as the parent company, and then subsequently outsourced from us to the VIEs, as practical, particularly overseas projects. Generally, we would bid for projects based in China or from other countries. If we win the bid, we sign the agreement and then assign and outsource the projects to the VIEs such as BHD and Nanjing to implement and complete the project.

Our basic functions include but not limited to: 1) research and improve the Company’s development strategy based on the Company’s industry and market trends; 2) financing, funding, budgeting and complete oversight of the Company and the VIEs’ safety and efficiencies in the use of funds and assets; and 3) decision-making on major acquisitions.

Our current business objective is to grow both in scale and revenue. Over the longer term, our objective is to improve our business structure and achieve net profits.

B. Business Overview

General

We believe that one of the most important advancements in China’s petroleum industry has been the automation of significant segments of the exploration and extraction process. The Domestic Companies’ automation products and services allow petroleum mining and extraction companies to reduce their labor requirements and improve the productivity of oilfields. The Domestic Companies’ solutions allow our customers to locate productive oilfields more easily and accurately, improve control over the extraction process, increase oil yield efficiency in tertiary stage oil recovery, and improve the transportation of crude oil.

For the most recent few years, the Domestic Companies’ capacity to provide integrated services has been a significant factor for long-term development. We treat simulation measures around fracturing as the Domestic Companies’ entry point for our integrated service model. To date, we have formed new business modules through R&D, investment in service-team building and developed an integrated services solution for stimulation.

Market Background

China is our major market. China is the world’s second-largest consumer of petroleum products, largest importer of petroleum and fourth-largest producer of petroleum. In the last twenty years, China’s demand for oil has more than tripled, while its production of oil has only modestly increased. China became a net importer of petroleum in 1983, and, since then, oil production in China has been focused on meeting the country’s domestic oil consumption requirements. The oil industry in China is dominated by three state-owned holding companies: China National Petroleum Corporation (“CNPC”), China Petroleum and Chemical Corporation (“Sinopec”) and China National Offshore Oil Corporation (“CNOOC”). Foreign companies have also been deeply involved in China’s petroleum industry; however, according to Chinese law, China’s national oil companies still take a majority (or minority) stake in any commercial discovery. As a result, the number of major foreign companies involved in the industry is relatively limited in domestic China.

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In the past, China’s petroleum companies mined for petroleum by leveraging the country’s abundance of inexpensive labor, rather than focusing on developing new technologies. For example, a typical, traditional oilfield with an annual capacity of 1,000,000 tons would require between 10,000 and 20,000 laborers. By contrast, when Baker CAC automated oil production products were employed in the mid-1990s to explore and automate Cainan Oilfield, a desert oilfield in Xinjiang, annual capacity for the field reached 1,500,000 tons, with only 400 employees needed to manage the oilfield. After the introduction of Baker CAC’s products into China’s petroleum industry, Chinese companies have also sought to provide automation solutions.

In the primary oil recovery stage, oil pressure in an oil reservoir may be high enough to force oil to the surface. Approximately 20% of oil may be harvested at this stage. The secondary oil recovery stage accounts for another 5% to 15% of oil recovery and involves such efforts as pumps to extract petroleum and the injection of water, natural gas, carbon dioxide or other gasses into the oil reservoir to force oil to the surface. Most oilfields in China have now entered into the tertiary stage of oil recovery, at which oil extraction becomes increasingly difficult and inefficient. Tertiary recovery generally focuses on decreasing oil viscosity to make extraction easier and accounts for between 5% and 15% of oil recovery. The Domestic Companies’ efforts in tertiary recovery focus on reducing water content in crude oil in order to make extraction more efficient and to improve the overall production of wells through advanced technologies and effective managing tools and approaches.

For recent years, the oil industry is experiencing digital transformation. We believe oil companies will continue to increase their usages of intelligent solutions to improve the operation efficiency. Many oil companies have been raising the digitalization to a strategic level and take it as the core portion of the corporate strategy to optimize business execution and operational efficiency. Besides, we have also seen the trend of digitalization and intelligence in downstream of the oil and gas industry, especially in the management and operation of gas stations in China. The Domestic Companies have been devoting resources and participating in testing projects with their clients to develop leading solutions. We will continue to enhance the Domestic Companies’ competitive strength through up-gradation with big data and intelligent analysis.

Products and Services

The Domestic Companies have historically provided products and services mainly to oil and gas field companies, which focus on the development and production of oil and natural gas. The products and services described below correlate to the numbered stages of the oilfield production system graphical expression shown below.

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​

The following list shows Domestic Companies’ products and services. The first three items are covered by the (1) automation product and software segment and (2) equipment and accessories segment. The last item is covered by the oilfield environmental protection segment.

Equipment for Oil and Gas Production and Transportation

● | High-Efficiency Heating Furnaces (as shown above by process “3”). Crude petroleum contains certain impurities that must be removed before the petroleum can be sold, including water and natural gas. To remove the impurities and to prevent solidification and blockage in transport pipes, companies employ heating furnaces. BHD researched, developed and implemented a new oilfield furnace that is advanced, highly automated, reliable, easily operable, safe and highly heat-efficient (90% efficiency).

● | Burner (as shown above by process “5”). The burner BHD provides has the following characteristics: high degree of automation; energy conservation; high turn-down ratio; high security and environmental safety.

Automation System and Service

● | Pumping Unit Controller. Refers to process “1” above. Functions as a monitor to the pumping unit, and also collects data for load, pressure, voltage, startup and shutdown control.

● | RTU Used to Monitor Natural Gas Wells. Collects gas well pressure data.

● | Wireless Dynamometer and Wireless Pressure Gauge. Refers to process “1” above. These products replace wired technology with cordless displacement sensor technology. They are easy to install and significantly reduce the working load associated with cable laying.

● | Electric Multi-Way Valve for Oilfield Metering Station Flow Control. Refers to process “2” above. This multi-way valve is used before the test separator to replace the existing three valve manifolds. It facilitates the electronic control of the connection of the oil lead pipeline with the separator.

● | Natural Gas Flow Computer System. Flow computer system used in natural gas stations and gas distribution stations to measure flow.

● | Recon SCADA Oilfield Monitor and Data Acquisition System. Recon SCADA is a system which applies to the oil well, measurement station, and the union station for supervision and data collection.

● | EPC Service of Pipeline SCADA System. A service technique for pipeline monitoring and data acquisition after crude oil transmission.

● | EPC Service of Oil and Gas Wells SCADA System. A service technique for monitoring and data acquisition of oil wells and natural gas wells.

● | EPC Service of Oilfield Video Surveillance and Control System. A video surveillance technique for controlling the oil and gas wellhead area and the measurement station area.

● | Technique Service for “Digital Oilfield” Transformation. Includes engineering technique services such as oil and gas SCADA system, video surveillance and control system and communication systems.

The Domestic Companies began providing automation services to other companies in the broader energy industry in China and also to provide the following products and services beyond the oilfield production process in 2017:

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Waste Water and Oil Treatment Products and Services

● | Oilfield sewage treatment. It is for oilfield waste water treatment solutions, related chemicals and onsite services customized to clients’ requirement. We have also developed our own designed equipment and aim to manufacture in the future.

● | Oily sludge disposal. This business line provides engineering services of oily sludge disposal in Gan Su province.

● | Residual oil recovery service. This business line assists oilfield companies recover residual oils, including aged oil and spilled oil through our unique formula and equipment to enhance the profitability for oilfield companies.

Platform Outsourcing Services: Intelligent marketing system and digitalization solution for gas stations

● | Gas Station operation and management solution. To provide new technical applications and data operations solutions and related service to gas stations of oil companies. Tt can also help gas stations to export API ports to external parties for cooperation.

Chemical recycling Plan used for lower-value mixed plastics treatment (Under Construction)

● | A chemical recycling plant in Wei Fang City is in the preparation stage and scheduled to be operational in late 2025. The plant is meant to process more than 40,000 tons of low-value plastic a year through pyrolysis techniques.

ISO9000 Certification

The Domestic Companies have received ISO9000 certifications for several of our processes. The International Organization for Standardization consists of a worldwide federation of national standards bodies for approximately 130 countries, and the ISO9000 certification represents an international consensus of these standards bodies, with the aim of creating global standards of product and service quality. We have received ISO9000 certifications for the following:

| ● | Nanjing Recon has received certification for the development and service of RSCADA.

| ● | BHD has received certification for high efficiency heating furnaces, import burners, and manometer surrogate rendition and service.

Customers

We operate our business by cooperating with oil companies and their subsidiaries, the petroleum administration bureau and local service companies. Historically, most actual control of our direct and indirect clients could be traced to Sinopec and CNPC, the two major Chinese state-owned companies responsible for on-shore petroleum mining and extraction.

Sinopec

Currently, we undertake projects majorly at the following locations, among others:

| ● | North China Oil and Gas Branch

| ● | Southwest Branch

Since the fiscal year ended June 30, 2017, Sinopec accounted for less than 10% of our revenue. From fiscal year 2021, we developed new products and service lines and regained revenue from Sinopec. Revenue from Sinopec accounted for 17%, 19% and 32% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively.

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CNPC

Currently, we undertake projects majorly at the following locations, among others:

| ● | Huabei Oilfield

| ● | Qinghai Oilfield

| ● | Jidong Oilfield

| ● | Zhejiang Oilfield

| ● | PetroChina Sichuan Petrochemical Co., Ltd.

We provide products and services to CNPC under a series of agreements, each of which is terminable without advance notice. We first began to provide services to CNPC in 2000. CNPC accounted for approximately 44%, 48% and 43% of our revenue in the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and any termination of our business relationships with CNPC would materially harm our operations.

Our Strengths

● | Safety of products. The automation projects we have conducted have demonstrated that our products are reliable, safe and effective at automating the petroleum extraction process.

● | Efficiency of technology. We believe our technology increases efficiency and profitability for petroleum companies by enabling them to monitor, manage and control petroleum extraction; increase the amount of petroleum extracted and reduce impurities in extracted petroleum.

● | Ability to leverage our knowledge of Chinese business culture. Many of our competitors are based outside of China. As the Domestic Companies are based in China, we are in a unique position to emphasize Chinese culture and business knowledge to obtain new customers and new agreements with existing customers. We believe that many Chinese businesses, including state-owned companies like Shenhua Group and CNPC, would prefer to hire a Chinese company to assist in their business operations if a Chinese company exists with the ability to fulfill their needs on a timely and cost-efficient basis. In addition, our knowledge of Chinese culture allows us to anticipate and adapt to Chinese oilfield management methods. We provide our software solutions in Mandarin for the benefit of our Chinese customers, and all of our customer support is available from Mandarin-fluent personnel.

● | Experienced, successful executive management team. Our executive management team has significant experience and success in the petroleum automation industry. They will be able to draw on their knowledge of the industry and their relationships in the industry.

● | Ability to leverage China’s cost structure. As a Chinese company, we believe we can operate our business more cost-effectively because all of our employees, operations and assets are located in China, resulting in lower labor, development, manufacturing and rent costs than we believe we would incur if we also maintained operations abroad. We expect these costs savings will be reflected in lower costs to our customers for comparable products.

● | Ownership of our intellectual property. Because we own our intellectual property, we are able to avoid licensing fees or contravening licensing agreements.

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Our Strategies

Our goal is to help our customers improve their efficiency and profitability by providing them with software and hardware solutions and services to improve their ability to locate productive oil reservoirs, manage the oil extraction process, reduce extraction costs, and enhance recovery from extraction activities. Key elements of our strategies include:

| ● | Increase our market share in China. We believe that as the Chinese economy and oil industry continue to develop, Chinese petroleum extraction automation companies will compete with international businesses at an increasing rate. Consequently, we believe we will have opportunities to take market share from foreign companies by developing positive business relationships in China’s petroleum mining and extraction industry. We will also use strategic advertisements, predominantly in China’s northeast and northwest, where China’s major oilfields are located, to increase our brand awareness and market penetration. We aim to continue developing new technologies designed to improve petroleum mining and extraction efficiency and profitability for our customers.

| ● | Develop our own branded products and services and shift our focus away from trading business. Our management believes in the importance of our own branded products and our services, in light of their higher profit margins and their long-term significance in establishing the status of our Company in the oil and gas industry. Moreover, the trading business relies on the major clients’ procurement policies toward agencies, any significant change of which could jeopardize our operating results. Our management therefore believes that in the long run we will need to focus our growth strategy in developing professional services for the oil and gas industry in China.

| ● | Focus on higher-profit subsection of market. While we plan to continue to provide services to all of our clients, we believe that we may improve our profit margins by focusing a higher portion of our advertising and promotions at those sub-divisions of our industry that have traditionally held the highest profit margins.

| ● | Offer services to foreign oilfields contracted by Chinese petroleum companies. As Sinopec and CNPC continue to invest in oilfields in other countries, we will focus on offering our services in these new locations based on our success in working with the companies in China.

| ● | Seek opportunities with foreign companies in China. Even where oilfields in China are partially operated by foreign companies, a significant number of employees will be Chinese and will benefit from our Chinese-language services. We believe our hardware and software solutions would be beneficial to any petroleum company—foreign or domestic—doing business in China and plan to continue marketing to foreign companies entering the Chinese market.

| ● | Provide services that generate high customer satisfaction levels. Chinese companies in our market are strongly influenced by formal and informal referrals. We believe that we have the opportunity to expand market share by providing high levels of customer satisfaction with our current customers, thereby fostering strong customer referrals to support sales activities.

Competition

We mainly face competition from a variety of foreign and domestic companies involved in the petroleum extraction and production industry. While we believe we effectively compete in our market, our competitors hold a substantial market share.

A few of our existing competitors, as well as a number of potential new competitors, have significantly greater financial, technical, marketing and other resources than we do, which could provide them with a significant competitive advantage over us. We cannot guarantee that we will be able to compete successfully against our current or future competitors in our industry or that competition will not have a material adverse effect on our business, operating results and financial condition.

Research and Development

We focus our research and development efforts on improving our development efficiency and the quality of our products and services. As of June 30, 2025, our research and development team consisted of over 70 experienced engineers, developers and programmers. In addition, some of our support employees regularly participate in our research and development programs.

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In the fiscal years ended June 30, 2025, 2024 and 2023, we spent approximately RMB16.43 million (approximately $2.3 million), RMB14.29 million (approximately $2.0 million) and RMB8.8 million (approximately $1.2 million) respectively, on research and development activities.

Intellectual Property

Our success and competitive position is dependent in part upon our ability to develop and maintain the proprietary aspect of our technology. The reverse engineering, unauthorized copying, or other misappropriation of our technology could enable third parties to benefit from our technology without paying for it. We rely on a combination of trademark, trade secret, copyright law and contractual restrictions to protect the proprietary aspects of the Domestic Companies’ and our technology. We seek to protect the source code to the Domestic Companies’ and our software, documentation and other written materials under trade secret and copyright laws. While we actively take steps to protect the Domestic Companies’ and our proprietary rights, such steps may not be adequate to prevent the infringement or misappropriation of the Domestic Companies’ and our intellectual property. This is particularly the case in China where the laws may not protect our proprietary rights as fully as in the United States.

We license the Domestic Companies’ and our software products under signed license agreements that impose restrictions on the licensee’s ability to utilize the software and do not permit the re-sale, sublicense or other transfer of the software. Finally, we seek to avoid disclosure of the Domestic Companies’ and our intellectual property by requiring employees and independent consultants to execute confidentiality agreements.

Although we develop our software products in conjunction with the Domestic Companies, each software product is based upon middleware developed by third parties. We integrate this technology, licensed by our customers from third parties in our software products. If our customers are unable to continue to license any of this third-party software, or if the third-party licensors do not adequately maintain or update their products, we would face delays in the releases of our software until equivalent technology can be identified, licensed or developed, and integrated into our software products. These delays, if they occur, could harm our business, operating results and financial condition.

There has been a substantial amount of litigation in the software industry regarding intellectual property rights. It is possible that in the future third parties may claim that our current or potential future software solutions infringe their intellectual property. We expect that software product developers will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlap. In addition, we may find it necessary to initiate claims or litigation against third parties for infringement of our proprietary rights or to protect our trade secrets. Although, along with the Domestic Companies, we may disclaim certain intellectual property representations to our customers, these disclaimers may not be sufficient to fully protect us against such claims. Any claims, with or without merit, could be time consuming, result in costly litigation, cause product shipment delays or require the Domestic Companies and us to enter into royalty or license agreements. Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all, which could have a material adverse effect on our business, operating results and financial condition.

Our standard software license agreements contain an infringement indemnity clause under which we agree to indemnify and hold harmless our customers and business partners against liability and damages arising from claims of various copyright or other intellectual property infringement by the Domestic Companies’ and our products. We have never lost an infringement claim, and our costs to defend such lawsuits have been insignificant. Although it is possible that in the future third parties may claim that our current or potential future software solutions or we infringe on their intellectual property, we do not currently expect a significant impact on our business, operating results, or financial condition.

We market our products under the following trademarks which are registered with the PRC Trademark Bureau under the State Administration for Industry and Commerce. We currently own the following trademarks:

| 1. | Trademark of “BHD” of the 7th classification valid from June 7, 2020 through June 6, 2030;

| 2. | Trademark of “BHD” of the 11th classification valid from June 14, 2020 through June 13, 2030

| 3. | Trademark of “Recon” of the 7th classification valid from October 20, 2021 through October 20, 2031;

| 4. | Trademark of “Recon” of the 9th classification valid from April 20, 2021 through April 20, 2031; and

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| 5. | Trademark of “Recon” of the 42nd classification valid from September 6, 2021 through September 6, 2031.

| 6. | Trademark of “DT” of the 9th, 35th, 37th, and 42nd classification valid from January 28, 2011 through January 27, 2028.

We currently own over 50 patents registered with the PRC State Intellectual Property Office which cover our automated products and heating related equipment for the petroleum industry. Below is a list of our selected patents:

| 1. | Patent of Tubular type Heating furnace valid until March 6, 2030;

| 2. | Patent of Vacuum phase change furnace valid until March 6, 2030;

| 3. | Patent of Intelligent diagnosis method, device, storage medium and server of electric pump well valid until May 1 5, 20 43;

| 4. | Patent of Negative pressure heating furnace valid until March 6, 20 30;

| 5. | Patent of High-pressure natural gas furnace valid until March 6, 20 30;

| 6. | Patent of an oil-water well smart wireless pressure transmitter valid until November 17, 2026;

| 7. | Patent of an intelligent terminal applied to data monitoring of gas wells valid until July 2, 20 30;

| 8. | Patent of torch specialized for oilfield waste-gas burning valid until July 10, 2028;

| 9. | Patent of Wireless temperature transmitter valid until March 2 7, 2029;

| 10. | Suspended sludge filtration and purification device for oily sewage valid until July 2 4, 202 8;

| 11. | A biological activator for oilfield re-injection water treatment and its preparation method valid until February 17, 203 7;

| 12. | Pneumatic device valid until February 9, 203 2;

| 13. | Solar-powered shaftless permanent magnet flexible control system, in application v alid until August 31 20 31;

| 14. | Patent of electricity collection device and oil pumping unit valid until March 28, 2038;

| 15. | Patent of fracturing packer valid until August 5, 2034;

| 16. | Patent of a fracturing valve for oil wells valid until August 5, 2034;

| 17. | Patent of a safety coupling for oil wells valid until August 5, 2034;

We have registered over 70 software products with the PRC State Intellectual Property Office. Below is a list of our selected software products:

| 1. | Recon automated monitoring system software version 1.0 was published on February 6, 20 12

| 2. | Recon SCADA oilfield monitoring and data acquisition system software version 2.0 was published on September 25, 20 0 3, and version 3.0 was registered and published on June 26, 2008;

| 3. | Recon RCNAMT software version 1 was published on January 8, 2013;

| 4. | Recon Process Auto software version 1 was published on January 8, 2013;

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| 5. | Recon Production Process Control system software V2.0 was published on November 1 8, 2013, and V1.0 was published on February 4, 201 3;

| 6. | Recon Oil and Gas Processing SCADA System software V1.0 was published on June 14, 2016;

| 7. | Intelligent gas field management platform software V1.0 was published on July 14, 2020;

| 8. | Gas well data acquisition and monitoring software V1.0 was published on July 14, 2020;

| 9. | Recon’s Video Intelligent Recognition Software version 1.0 was published on April 13, 2021;

| 10. | Solar permanent magnet semi-direct drive intelligent control software V1.0 was published on August 31, 2021;

| 11. | An intelligent billing system that does not rely on physical cards to achieve self-service refueling for vehicle owners (Android) V2.0 was published on April 9, 201 9;

| 12. | An intelligent billing system that does not rely on physical cards to achieve self-service refueling for vehicle owners (ios) V2.0 was published on April 9, 2019;

| 13. | Gas Station Operation Vehicle Marketing System V1.0 was published on September 3, 20 21;

| 14. | Gas station user attraction system V1.0 was published on September 3, 2021;

| 15. | Gas Station Electronic Coupon Vending System V1.0 was published on September 3, 2021;

| 16. | Gas Station Revenue Clearing and Settlement System V1.0 was published on September 3, 2021;

| 17. | An intelligent settlement system that does not rely on physical cards to achieve self-service refueling for vehicle owners (WeChat mini program) V1.0 was published on September 3, 2021;

| 18. | An intelligent settlement system that does not rely on physical cards to achieve self-service refueling for vehicle owners (Alipay mini program) V1.0 was published on September 3, 2021;

| 19. | Gas station abnormal transaction risk control system V1.0 was published on September 3, 2021;

| 20. | A software copyright registration certificate of Recon’s Intelligent monitoring and management system software version 1.0 for oil production was published on September 3, 2021;

| 21. | Environmental Air Pollution Prevention and Control Intelligent Analysis System V1.0 was published on August 21, 2024;

| 22. | Recon Security and Gas Protection Management Software V1.0 was published on April 15, 2025; and

| 23. | Recon Power Monitoring Software V1.0 was published on April 16, 2025.

Environmental Matters

In terms of compliance with Chinese environmental protection laws and regulations, we only have one expense, which is that Shandong Recon Renewable Resources Technology Co., Ltd. officially received the environmental impact assessment approval document for the plastic chemical recycling project construction on September 6, 2024, at a cost of RMB 197,000 ($27,500), with no other related expenses. We do not anticipate expending any material amounts for such compliance purposes for the remainder of our current or succeeding fiscal year.

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China’s Intellectual Property Rights Enforcement System

In 1998, China established the State Intellectual Property Office (“SIPO”) to coordinate China’s intellectual property enforcement efforts. SIPO is responsible for granting and enforcing patents, as well as coordinating intellectual property rights related to copyrights and trademarks. Protection of intellectual property in China follows a two-track system. The first track is administrative in nature, whereby a holder of intellectual property rights files a complaint at a local administrative office. Determining which intellectual property agency can be confusing, as jurisdiction of intellectual property matters is diffused throughout a number of government agencies and offices, with each typically responsible for the protection afforded by one statute or one specific area of intellectual property-related law. The second track is a judicial track, whereby complaints are filed through the Chinese court system. Since 1993, China has maintained various intellectual property tribunals. The total volume of intellectual property related litigation, however, remains small.

Although there are differences in intellectual property rights between the United States and China, of most significance to the Company is the inexperience of China in connection with the development and protection of intellectual property rights. Similar to the United States, China has chosen to protect software under copyright law rather than trade secrets, patent or contract law. As such, we will attempt to protect our most significant intellectual property pursuant to Chinese laws that have only recently been adopted. Unlike the United States, which has lengthy case law related to the interpretation and applicability of intellectual property law, China has a less developed body of relevant intellectual property case law.

REGULATIONS

We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business. This section summarizes the principal PRC laws, rules and regulations relevant to our business and operations. Areas in which we are subject to laws, rules and regulations outside of the PRC include intellectual property, competition, taxation, anti-money laundering and anti-corruption.

Regulation on Software Products

On March 1, 2009, the Ministry of Industry and Information Technology of China issued the Administrative Measures on Software Products, or the Software Measures, which became effective as of April 10, 2009, to strengthen the regulation of software products and to encourage the development of the Chinese software industry. Under the Software Measures, a software developer must have all software products imported into or sold in China tested by a testing organization supervised by the Ministry of Industry and Information Technology. The software industry authorities in provinces, autonomous regions, municipalities and cities with independent planning are in charge of the registration, report and management of software products. Software products can be registered for five years, and the registration is renewable upon expiration. Although some of Nanjing Recon’s current software products were registered in 2008, there can be no guarantee that the registration will be renewed timely or that the Domestic Companies’ and our future products will be registered.

Regulation of Intellectual Property Rights

China has adopted legislation governing intellectual property rights, including trademarks and copyrights. China is a signatory to the main international conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon its accession to the WTO in December 2001.

Copyright. China adopted its first copyright law in 1990 and revised in 2001, 2010 and 2020. The National People’s Congress amended the Copyright Law in 2001 to widen the scope of works and rights that are eligible for copyright protection. The amended Copyright Law extends copyright protection to software products, among others. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. Unlike patent and trademark registration, copyrighted works do not require registration for protection. Protection is granted to individuals from countries belonging to the copyright international conventions or bilateral agreements of which China is a member. Nanjing Recon has over ten copyrights for software programs.

Trademark. The Chinese Trademark Law, adopted in 1982 and revised in 1993, 2001, 2013 and 2019, protects registered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a term of ten years to registered trademarks. Trademark license agreements must be filed with the Trademark Office for record. China has a “first-to-register” system that requires no evidence of prior use or ownership. The Domestic Companies and we have registered a number of product names with the Trademark Office.

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Regulations on Foreign Exchange

Foreign Currency Exchange. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans or foreign currency is to be remitted into China under the capital account, such as a capital increase or foreign currency loans to our PRC subsidiaries.

SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises (2008), or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Circular 45 on November 9, 2011 in order to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

Since SAFE Circular 142 has been in place for more than five years, SAFE decided to further reform the foreign exchange administration system in order to satisfy and facilitate the business and capital operations of foreign invested enterprises, and issued the Circular on the Relevant Issues Concerning the Launch of Reforming Trial of the Administration Model of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises in Certain Areas on August 4, 2014. This circular suspends the application of SAFE Circular 142 in certain areas and allows a foreign-invested enterprise registered in such areas with a business scope including “investment” to use the RMB capital converted from foreign currency registered capital for equity investments within the PRC.

SAFE promulgated Circular 59 in November 2010, which tightens the regulation over settlement of net proceeds from overseas offerings, such as our initial public offering, and requires, among other things, the authenticity of settlement of net proceeds from offshore offerings to be closely examined and the net proceeds to be settled in the manner described in the offering documents or otherwise approved by our board. Violations of these SAFE regulations may result in severe monetary or other penalties, including confiscation of earnings derived from such violation activities, a fine of up to 30% of the RMB funds converted from the foreign invested funds or in the case of a severe violation, a fine ranging from 30% to 100% of the RMB funds converted from the foreign-invested funds.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

Regulation of Dividend Distribution. The principal regulations governing the distribution of dividends by foreign holding companies include the Foreign Investment Enterprise Law (1986), as amended, and the Administrative Rules under the Foreign Investment Enterprise Law (2001).

Under these regulations, foreign investment enterprises in China may pay dividends only out of their retained profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, foreign investment enterprises in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends.

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In July 2014, SAFE promulgated SAFE Circular 37, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

Regulations on Foreign Investment in Automation Service Industry and Oil Exploration and Extraction Industry in PRC. In accordance with the Catalogue of Industries for Guiding Foreign Investment (Revised 2007), the oil and gas automation service industries are in the catalogue of permitted industries, and thus there are no restrictions on foreign investment in the oil and gas automation industry. In addition, the following industries are encouraged for foreign investment in China:

| ● | Manufacturing of equipment for oil exploration, drilling, collection and transportation: floating drilling systems and floating production systems with an operating water depth of more than 1,500 meters and the supporting subsea oil extraction, collection and transportation equipment

| ● | Exploration and exploitation of oil and natural gas with venture capital (limited to equity joint ventures and cooperative joint ventures);

| ● | Development and application of new technologies that increase the recovery ratio of crude oil (limited to equity joint ventures and cooperative joint ventures);

| ● | Development and application of new oil exploration and exploitation technologies such as geophysical exploration, drilling, well logging, and downhole operation, etc. (limited to cooperative joint ventures); and

| ● | Exploration and development of unconventional oil resources such as oil shale, oil sands, heavy oil, and excess oil (limited to cooperative joint ventures).

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C. Organizational Structure

Below is a chart representing our current corporate structure as of June 30, 2025:

Our registered office in the Cayman Islands is at the offices of Vistra (Cayman) Limited, P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands.

* Qing Hai BHD was closed and has been deregistered from the Chinese Industrial and Commercial System on September 2025.

** BHD transferred out 51% of MSJ’s equity interest in September 2025.

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D. Property, Plants and Equipment

We currently operate in several facilities throughout China. Our headquarters are located in Beijing. Following is a list of our properties. The first six properties are rentals. Gan Su BHD has received a land usage rights certificate regarding the last property and has constructed a plant on that piece of land.

​

No. |  | Tenant/Transferee |  | Address |  | Rental/Use Term |  | Space |  | Usage |  | Productive Capacity |  | Extent of utilization
1 | ​ | Recon-BJ BHD | ​ | 601, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC | ​ | May 1, 2024 to April 30, 2027 | ​ | 813.35 square meters | ​ | Headquarter and office | ​ | N/A | ​ | 100%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2 | ​ | Nanjing Recon | ​ | Room 311, No. 2 Building, Chu Qiao Cheng, Andemen Street, Yu Hua District, Nanjing City, PRC | ​ | April 1, 2024 to March 31, 2026 | ​ | 334.2 square meters | ​ | Office | ​ | N/A | ​ | 80%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | South side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC | ​ | May 1, 2024 to April 30, 2027 | ​ | 577.65 square meters | ​ | Office | ​ | N/A | ​ | 100%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
3 | ​ | BHD | ​ | West building, Zhengfu Street, Huo ying, Changping District, PRC | ​ | January 1, 2024 to December 31, 2025 | ​ | 420 square meters | ​ | Warehouse | ​ | N/A | ​ | 50%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4 | ​ | HH BHD | ​ | No. 1767, Yin Bin South Street, Huang Hua Economic Development Zone, He Bei Province, PRC | ​ | July 1, 2025 to June 30, 2026 | ​ | 4,624 square meters | ​ | Office and Plant | ​ | N/A (Equipment Installation) | ​ | 100%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
5 | ​ | FGS | ​ | Northeast side of 6th floor, 1 Shui’an South Street, Chaoyang District, Beijing, 100012, PRC | ​ | May 1, 2024 to April 30, 2027 | ​ | 677.65 square meters | ​ | Office | ​ | N/A | ​ | 50%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
6 | ​ | Recon-SD | ​ | West of Lingang Road, Green Chemical Park, Binhai District, Weifang City, Shandong Province, north of Air Products USA. | ​ | December 13, 2023 to December 12, 2073 | ​ | 32,363 square meters | ​ | Plant | ​ | N/A | ​ | 100%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
7 | ​ | Gan Su BHD | ​ | North of Dongyun Road and West of Petroleum Management Bureau Wooden Furniture Factory, Old District, Yumen City, Gansu Province, PRC | ​ | August 1, 2017 to July 31, 2067 | ​ | 26,235.59 square meters | ​ | Plant | ​ | 60,000 tons | ​ | 80%

​

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ITEM 4A.UNRESOLVED STAFF COMMENTS

None.

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ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.

Overview

We are a company with limited liability incorporated in 2007 under the laws of the Cayman Islands. Headquartered in Beijing, we have been providing products and services to oil and gas companies and their affiliates through Nanjing Recon Technology Co. Ltd (“Nanjing Recon”) and Beijing BHD Petroleum Technology Co, Ltd (“BHD”) and their affiliates, hereafter referred to as the domestic companies (the “Domestic Companies”), which are established under the laws of the PRC. From 2017, we have been providing service to companies in other power energy industries such as the electronic power industry and the renewable energy industry. As the Company contractually controls the Domestic Companies, we serve as the center of strategic management, financial control and human resources allocation. To this end, our company and our subsidiaries, Recon Investment Ltd. (“Recon-IN”), Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”) and Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”) are contractually engaged with the following PRC VIE companies and their subsidiaries: Beijing BHD Petroleum Technology Co., Ltd. (“BHD”), Future Gas Station (Beijing) Technology, Ltd. (“FGS”), Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”), Gan Su BHD Environmental Technology Co. Ltd. (“Gan Su BHD”), Huang Hua BHD Petroleum Equipment Manufacturing Co. Ltd. (“HH BHD”), and Qing Hai BHD New Energy Technology Co. Ltd. (“Qing Hai BHD”) (collectively, the “Domestic Companies”), which provide services designed to automate and enhance the extraction of and facilitate the sale of petroleum products. Due to this contractual control and our obligation to bear the losses of the Domestic Companies, we consider them to be variable interest entities (“VIEs”) for accounting purposes and consolidate their results in our financial statements.

Through Nanjing Recon and BHD, our business is mainly focused on the upstream sectors of the oil and gas industry. From 2018, our business has been expanding to the downstream of the energy industry– the civil and industrial heating furnaces market, electric and coal chemical industry and the energy service management industry. As we acquired major equity interest of FGS in year 2021, we also extend our business to fuel market. We derive our revenue from the sales and provision of (1) automation products and projects, (2) equipment and installment for heating furnaces and overall energy saving resolution, (3) chemical products and overall resolution for wastewater and oily sludge treatment, (4) downhole services, production enhancement, engineering and project services for aforementioned, and (5) platform development services for gas stations and other entities that will provide services under the scenario of refuel.

| ● | Nanjing Recon: Nanjing Recon is a high-tech company that specializes in automation services for oilfield companies. It mainly focuses on providing automation solutions to the oil exploration industry, including monitoring wells, automatic metering to the joint station production, process monitor, and a variety of oilfield equipment and control systems. From 2018, Nanjing Recon also provides automation products and services to other segments of the energy industry, such as the new energy industry, electric power and coal chemical industries.

| ● | BHD: BHD is a high-tech company that specializes in transportation equipment and stimulation productions and services. Possessing proprietary patents and substantial industry experience, BHD has also been expanding services to oilfield wastewater and oily sludge treatment, and extended its heating products and resolutions to the civil market by leveraging its advantage on furnace products.

We entered into the wasted plastic chemical recycling business in year 2023 and established two new wholly-owned subsidiaries, Shandong Recon Renewable Resources Technology Co., Ltd (“Recon-SD”) on October 10, 2023, and Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”) on February 22, 2024 through Recon-IN to serve customers located in different areas.

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Recent Developments

On or about September 2025, our board of directors ratified a decision by Recon-BJ to enter into a definitive agreement on or about October 2025 with Guangxi Jindu Investment Co., Ltd. for the purposes of establishing a special fund consisting of RMB100 million as a loan for the development and operation of an industrial park project in Guangxi. The term of the loan is 20 years and the annual interest rate is 4.5%. The industrial park project is planned for modern factory buildings of approximately 52,204 square meters. Guangxi Jindu Investment Co., Ltd. shall be responsible for the Project’s development, construction, promotion, and day-to-day management of the industrial park. Recon-BJ’s management held negotiations with Guangxi Jindu Investment Co., Ltd. throughout the second half of the fiscal year ended June 30, 2025, and the terms and conditions of the contractual arrangement was recommended for approval to our board of directors.

Recent Industry Developments and Business Outlook

From the second half of 2024 to the first half of 2025, international crude oil prices showed an overall downward trend, with occasional rebounds. This trend was driven by several factors, including anticipated declines in demand and geopolitical disruptions, such as trade wars, the Russia-Ukraine conflict, and the Iran-Israel conflict. Consequently, our primary clients, domestic oil companies, have experienced declining performance and have adopted more cautious and cost - conscious approaches to capital expenditures and expense management. This has put pressure on our business’s profitability. Overall, offshore oilfield clients have demonstrated stronger development and production growth initiatives than their onshore counterparts. We will continue to intensify our efforts in developing the offshore oilfield client market.

With plastic waste ballooning into a global environmental crisis, and oil and chemical companies focus more on ESG management, we see increasing opportunities on circular economy and a growing market demand for sustainable and recycled materials, in which products and materials are reused, remanufactured and recycled. Chemical recycling plays an important role in achieving these goals by preserving the value of plastic materials. Beginning in early calendar year 2023, we have been participating in the chemical recycling of low-value plastics and initiated a 40,000-ton-per-year waste plastic chemical recycling project (“Recon Plastic Chemical Recycling Project” or “the Project”). We have signed purchase intentions with some multinational and local chemical companies, and based on these demands, we have started the construction of our plants. For the 2025 fiscal year, we have completed all pre - approval procedures, obtained the construction project planning permit, and officially commenced work on April 28, 2025. The Project is expected to be fully completed by November 2025, and a required one-month trial operations production phase will commence in December 2025, in accordance with domestic regulatory laws, rules, and regulations.

Growth Strategy

As a small company focused on the Chinese market, our basic strategy focuses on developing our onshore oilfield business in the upstream sector of the industry. We continuously focus on providing high quality products and services in oilfields in which we have a geographical advantage. This helps us avoid conflicts of interest with larger private companies while protecting our position within this market segment. Our mission is to increase the automation and safety levels of industrial petroleum production in China and to improve the underdeveloped working process and management mode used by many companies by providing advanced technologies. At the same time, we are always looking to improve our business and to increase our earning capability.

Currently, as more markets in China’s energy industry are open to non-state-owned companies, we are also seeking for opportunities in other markets. We believe our experience and deep knowledge of the energy industry, especially in oil and gas, will always be the long-term foundation for the company’s growth. By tapping into technological advances in recent years, such as solar energy and the Smart Industry and Industrial Internet, which is bringing about a fundamental change in the way factories and workplaces function by making them safer, more efficient, more flexible and more environmentally friendly. We expect to create more profitable business lines.

Also, to diversify our revenue stream and lower the risk of concentration, we will continue to seek new opportunities through enriching the customer base and expanding the customer coverage area by leveraging our knowledge of intelligent equipment and the “internet of things” (IoT), which is a crucial component of the Smart Industry and Industrial Internet.

We also see threatens from climate changes and opportunities from sustainable investments. We have also begun to engage in green, low-carbon and recyclable resource businesses to secure our long-term growth.

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Trend Information

Other than as disclosed elsewhere in this report we are not aware of any trends, uncertainties, demands, commitments, or events since the beginning of our fiscal year 2025 which are reasonably likely to have a material effect on our net revenue, income from operations, profitability, liquidity or capital resources, or would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition.

Factors Affecting Our Results of Operations

| ● | Our operating results in any period are subject to general conditions typically affecting the Chinese oilfield service industry which include but are not limited to:

| ● | oil and gas prices;

| ● | the amount of spending by our customers, primarily those in the oil and gas industry;

| ● | growing demand from large corporations for improved management and software designed to achieve such corporate performance;

| ● | the procurement processes of our customers, especially those in the oil and gas industry;

| ● | competition and related pricing pressure from other oilfield service solution providers, especially those targeting the Chinese oil and gas industry;

| ● | the ongoing development of the oilfield service market in China;

| ● | unpredictability of policies regarding the energy and internet sectors; and

| ● | inflation and other macroeconomic factors.

| ● | Unfavorable changes in any of these general conditions could negatively affect the number and size of the projects we undertake, the number of products we sell, the amount of services we provide, the price of our products and services, and otherwise affect our results of operations.

| ● | Our operating results in any period are more directly affected by company-specific factors including:

| ● | our revenue growth, in terms of the proportion of our business dedicated to large companies and our ability to successfully develop, introduce and market new solutions and services;

| ● | our ability to increase our revenue from both old and new customers in the oil and gas industry in China;

| ● | our ability to effectively manage our operating costs and expenses; and

| ● | our ability to effectively implement any targeted acquisitions and/or strategic alliances so as to provide efficient access to markets and industries in the oil and gas industry in China.

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Major Critical Accounting Policies and Estimates

Consolidation of VIEs

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.

Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.

Estimates and Assumptions

The preparation of the consolidated financial statements in conformity with US GAAP, which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for credit losses related to accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, goodwill and investment in unconsolidated entity, the discount rate for lease and investment, valuation of the convertible notes, price purchase allocation for business combination and the fair value of share-based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.

The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for credit losses related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.

Fair Values of Financial Instruments

The U.S. GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The three levels of inputs are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable.

Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The carrying amounts reported in the consolidated balance sheets for short-term investments, accounts receivable, notes receivable, other receivables, purchase advances, contract cost, accounts payable, other payable, accrued liabilities, contract liabilities, short-term bank loans and short-term borrowings – related parties approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts of the long-term borrowings due to related party approximate its fair value because the stated interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable credit risk and maturities.

Revenue Recognition

Revenue Recognition - In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The core principle underlying the new revenue recognition Accounting Standards Update (“ASU”) is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer.

Payment terms and conditions vary according to the type of contract, although the Company generally requires customers to pay within one year of the satisfaction of performance obligations. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.

Disaggregation of Revenue

Revenue are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following items represent the Company’s revenue disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.

The Company’s disaggregation of revenue for the years ended June 30, 2023, 2024 and 2025 is disclosed in Note 28.

Automation Products and Software; Equipment, Accessories and Others

The Company generates revenue primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.

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The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.

Oilfield Environmental Protection Service

The Company provides wastewater treatment products and related service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue when products are delivered, on-site assistance services rendered, and acceptance reports are signed off by customers. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

The Company provides oily sludge disposal and treatment services to oilfield companies and generates revenue from treatment services of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using output method, based on the percentage-of-completion method. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

Platform Outsourcing Services

The Company provides online platform development and maintenance services to gas stations in various provinces in China. The Company believes that customers receive and consume the economic benefits simultaneously as the Company fulfills its performance obligations and that the operation and maintenance services are continuous in nature, with customers receiving ongoing benefits throughout the service period. The Company invoices customers at the end of each month based on fixed service fees and classifies this portion of revenue as revenue recognized over time

The Company also provides API (application programming interface) port export services and related maintenance services to business partners in various industries that may have transactions in the fueling scenario. As the Company does not create or enhance assets controlled by its customers during the provision of its services and its customers do not simultaneously receive and consume services, the Company recognizes revenue at a single point in time when the online transaction is completed. The Company’s services enable terminal users of various mobile applications operated by its customers or partners to complete refueling transactions in cash or online through various payment channels; when each transaction, including refueling and payment, is completed, the Company is entitled to charge, at pre-set rates, each transaction amount as a service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly on a per-transaction basis.

Arrangements with Multiple Performance Obligations

Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.

Contract Balances

The Company’s contract balances include contract costs, net and contract liabilities from contracts with customers, and the following table provides information about contract balances:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, | ​ | June 30, |  | June 30
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | US Dollars
Contract costs, net | ​ | ¥ | 48,335,817 | ​ | ¥ | 53,547,408 | ​ | $ | 7,474,930
Contract liabilities | ​ | ¥ | 1,820,481 | ​ | ¥ | 4,719,255 | ​ | $ | 658,783

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Contract Costs, Net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.

| - | Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company’s hardware and software revenue. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.

| - | Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients’ initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client’s individual project construction arrangement), the Company records revenue based on the contract or the final clients’ acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.

Contract Liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. The Company’s contract liabilities consist primarily of the Company’s unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The amount of revenue recognized during the years ended June 30, 2023, 2024 and 2025 that was previously included within contract liability balances was ¥1,901,277, ¥1,489,311 and ¥761,824 ($106,347), respectively.

Performance Obligations

Performance obligations include delivery of products and provision of services. The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. This occurs when the control of the goods and services have been transferred to the customer. Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized upon the service rendered. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.

Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenue, and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations and comprehensive income (loss). Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of June 30, 2025.

Practical Expedients Elected

Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340 40 25 4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant.

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Significant Financing Component - Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606 10 32 18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are majorly less than one year in length, consideration will not be adjusted. For the Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts. There are also some new contracts that will not be completed within one year from year 2024, the Company did calculation and the amount was not material as end of this fiscal year.

Accounts Receivable, Net, Other Receivables, Net and Loans to Third Parties

Accounts receivable are carried at original invoiced amount less a provision for any potential uncollectible amounts. In July 2020, the Company adopted ASU 2016 13, Topics 326 Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, as its accounting standard for its accounts receivable and other receivables. Other receivables and loan to third parties arise from transactions with non-trade customers.

The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of July 1, 2020. Accounts receivable, other receivables and loan to third parties are recognized and carried at carrying amount less an allowance for credit loss, if any. The Company maintains an allowance for credit losses resulting from the inability of its trade and non-trade customers (“customers”) to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.

The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable, other receivables and loan to third parties. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company considers in determining whether to discontinue sales, record as contra revenue or allowance for credit losses:

| ● | the oil price and fluctuation of the overall oil industry;

| ● | the customer fails to comply with its payment schedule;

| ● | the customer is in serious financial difficulty;

| ● | a significant dispute with the customer has occurred regarding job progress or other matters;

| ● | the customer breaches any of the contractual obligations;

| ● | the customer appears to be financially distressed due to economic or legal factors;

| ● | the business between the customer and the Company is not active; and

| ● | other objective evidence indicates non-collectability of the accounts receivable, other receivables and loan to third parties.

The Company considers the following factors when determining whether to permit a longer payment period or provide other concessions to customers:

| ● | the customer’s past payment history;

| ● | the customer’s general risk profile, including factors such as the customer’s size, age, and public or private status;

| ● | macroeconomic conditions that may affect a customer’s ability to pay; and

| ● | the relative importance of the customer relationship to the Company’s business.

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Share-Based Compensation

Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award. The Company has elected to recognize compensation expenses using the valuation model estimated at the grant date based on the award’s fair value.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Class A Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

Results of Operations

The following consolidated results of operations include the results of operations of the Company and the Domestic Companies.

Our historical reporting results are not necessarily indicative of the results to be expected for any future period.

Year Ended June 30, 2025 Compared to Year Ended June 30, 2024

For the fiscal year ended June 30, 2025, falling oil prices and tighter client budgets caused demand from our onshore oilfield clients to decline during this period, squeezing order margins. However, demand from our offshore oilfield clients continued to grow moderately because offshore fields currently represent the primary source of increased production for PetroChina. Additionally, revenue from oil sludge operations was zero during this period as our oil sludge treatment certification remains under review for renewal.

Revenue

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Years Ended |
​ | ​ | June 30, |
​ | ​ | ​ |  | ​ |  | Increase / |  | Percentage |
​ |  | 2024 |  | 2025 |  | (Decrease) |  | Change | ​
Automation product and software |  | ¥ | 26,831,668 | ​ | ¥ | 34,114,673 | ​ | ¥ | 7,283,005 | ​ | 27.1 | %
Equipment and accessories |  | ​ | 20,471,950 | ​ | ​ | 18,422,895 | ​ | ​ | (2,049,055) | ​ | (10.0) | %
Oilfield environmental protection |  | ​ | 17,576,573 | ​ | ​ | 10,291,333 | ​ | ​ | (7,285,240) | ​ | (41.4) | %
Platform outsourcing services | ​ | ​ | 3,974,089 | ​ | ​ | 3,456,131 | ​ | ​ | (517,958) | ​ | (13.0) | %
Total revenue |  | ¥ | 68,854,280 | ​ | ¥ | 66,285,032 | ​ | ¥ | (2,569,248) | ​ | (3.7) | %

​

Our total revenue for the year ended June 30, 2025 were approximately ¥66.3 million ($9.3 million), a decrease of approximately ¥2.5 million ($0.4 million) or 3.7% from ¥68.8 million for the same period in 2024.

| (1) | Revenue from automation product and software increased by ¥7.3 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.

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| (2) | Revenue from equipment and accessories decreased by ¥2.0 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.

| (3) | Revenue from oilfield environmental protection decreased by ¥7.3 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.

| (4) | Revenue from platform outsourcing services decreased by ¥0.5 million ($0.1 million) or 13.0%. The decrease in revenue was primarily driven by a ¥0.8 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 ¥1.30 million increase driven by higher transaction volumes from diesel users and improved settlement rates with freight-exchange-platform customers.

| (5) | As of June 30, 2025, the factory for the chemical recycling is still under construction and has not started production and sales yet.

Cost of revenue

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Years Ended |
​ | ​ | June 30, |
​ | ​ | ​ |  | ​ |  | Increase / |  | Percentage |
​ |  | 2024 |  | 2025 |  | (Decrease) |  | Change | ​
Automation product and software | ​ | ¥ | 23,864,941 | ​ | ¥ | 28,627,787 | ​ | ¥ | 4,762,846 | ​ | 20.0 | %
Equipment and accessories | ​ | ​ | 14,097,459 | ​ | ​ | 13,224,911 | ​ | ​ | (872,548) | ​ | (6.2) | %
Oilfield environmental protection | ​ | ​ | 9,240,828 | ​ | ​ | 8,549,392 | ​ | ​ | (691,436) | ​ | (7.5) | %
Platform outsourcing services | ​ | ​ | 637,903 | ​ | ​ | 642,405 | ​ | ​ | 4,502 | ​ | 0.7 | %
Chemical recycling | ​ | ​ | 135,705 | ​ | ​ | — | ​ | ​ | (135,705) | ​ | (100.0) | %
Total cost of revenue | ​ | ¥ | 47,976,836 | ​ | ¥ | 51,044,495 | ​ | ¥ | 3,067,659 | ​ | 6.4 | %

​

Our total cost of revenue increased from ¥48.0 million for the year ended June 30, 2024 to ¥51.0 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 ¥23.9 million and ¥28.6 million ($4.0 million), respectively, representing increase of approximately ¥4.7 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 ¥14.1 million and ¥13.2 million ($1.8 million), respectively, representing a decrease of approximately ¥0.9 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 ¥9.2 million and ¥8.5 million ($1.2 million), respectively, representing a decrease of approximately ¥0.7 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 ¥0.6 million ($0.09 million).

For the years ended June 30, 2024 and 2025, cost of revenue from chemical recycling was ¥0.1 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.

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Gross Profit

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Years Ended |
​ | ​ | June 30, |
​ |  | 2024 |  | 2025 |  | ​ |  | ​ |
​ | ​ | Gross |  | ​ | ​ | Gross |  | ​ | ​ | Increase / | ​ | Percentage |
​ | ​ | Profit | ​ | Margin % | ​ | Profit | ​ | Margin % | ​ | (Decrease) | ​ | Change |
Automation product and software | ​ | ¥ | 2,966,727 | ​ | 11.1 | % | ¥ | 5,486,886 | ​ | 16.1 | % | ¥ | 2,520,159 | ​ | 84.9 | %
Equipment and accessories | ​ | ​ | 6,374,491 | ​ | 31.1 | % | ​ | 5,197,984 | ​ | 28.2 | % | ​ | (1,176,507) | ​ | (18.5) | %
Oilfield environmental protection | ​ | ​ | 8,335,745 | ​ | 47.4 | % | ​ | 1,741,941 | ​ | 16.9 | % | ​ | (6,593,804) | ​ | (79.1) | %
Platform outsourcing services | ​ | ​ | 3,336,186 | ​ | 83.9 | % | ​ | 2,813,726 | ​ | 81.4 | % | ​ | (522,460) | ​ | (15.7) | %
Chemical recycling | ​ | ​ | (135,705) | ​ | — | % | ​ | — | ​ | — | % | ​ | 135,705 | ​ | (100.0) | %
Total gross profit and margin % | ​ | ¥ | 20,877,444 | ​ | 30.3 | % | ¥ | 15,240,537 | ​ | 23.0 | % | ¥ | (5,636,907) | ​ | (27.0) | %

​

Our total gross profit decreased to ¥15.2 million ($2.1 million) for the year ended June 30, 2025 from ¥20.9 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 ¥3.0 million and ¥5.5 million ($0.8 million), respectively, representing an increase in gross profit of approximately ¥2.5 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 ¥6.4 million and ¥5.2 million ($0.7 million), respectively, representing a slight decrease of approximately ¥1.2 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 ¥8.3 million and ¥1.7 million ($0.2 million), respectively, representing a decrease of ¥6.6 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 ¥3.3 million and ¥2.8 million ($0.4 million), respectively, representing a decrease of approximately ¥0.5 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 ¥0.1 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.

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Operating Expenses

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Years Ended |
​ | ​ | June 30, |
​ | ​ | ​ |  | ​ |  | Increase / |  | Percentage |
​ |  | 2024 |  | 2025 |  | (Decrease) |  | Change |
Selling and distribution expenses |  | ¥ | 10,374,388 | ​ | ¥ | 9,343,480 | ​ | ¥ | (1,030,908) | ​ | (9.9) | %
% of revenue |  | ​ | 15.1 | % | ​ | 14.1 | % | ​ | (1.0) | % | — | ​
General and administrative expenses |  | ​ | 63,765,583 | ​ | ​ | 49,645,680 | ​ | ​ | (14,119,903) | ​ | (22.1) | %
% of revenue |  | ​ | 92.6 | % | ​ | 74.9 | % | ​ | (17.7) | % | — | ​
Allowance for (net recovery of) credit losses |  | ​ | 4,086,505 | ​ | ​ | (2,856,803) | ​ | ​ | (6,943,308) | ​ | (169.9) | %
% of revenue |  | ​ | 5.9 | % | ​ | (4.3) | % | ​ | (10.2) | % | — | ​
Research and development expenses |  | ​ | 14,288,879 | ​ | ​ | 16,427,892 | ​ | ​ | 2,139,013 | ​ | 15.0 | %
% of revenue |  | ​ | 20.8 | % | ​ | 24.8 | % | ​ | 4.0 | % | — | ​
Operating expenses |  | ¥ | 92,515,355 | ​ | ¥ | 72,560,249 | ​ | ¥ | (19,955,106) | ​ | (21.6) | %

​

Selling and Distribution Expenses. Selling and distribution expenses consist primarily of salaries and related expenditures of the Company’s sales and marketing departments, sales commissions, costs of marketing programs including traveling expenses, advertising and trade shows, and rental expense, as well as shipping charges. 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. Selling expenses decreased by 9.9%, or ¥1.1 million ($0.1 million), from ¥10.4 million in the year ended June 30, 2024 to ¥9.3 million ($1.3 million) in the same period of 2025. The decrease was primarily driven by lower travel expenses and freight costs, reflecting a modest decline in sales activities during the year ended June 30, 2025. Selling expenses accounted for 14.1% of total revenue for the year ended June 30, 2025, compared to 15.1% of total revenue for the same period in 2024.

General and Administrative Expenses. General and administrative expenses consist primarily of costs in human resources, facilities costs, depreciation expenses, professional advisor fees, audit fees, stock-based compensation expense and other miscellaneous expenses incurred in connection with general operations. General and administrative expenses decreased by 22.1%, or ¥14.2 million ($2.0 million), from ¥63.8 million in the year ended June 30, 2024 to ¥49.6 million ($6.9 million) in the same period of 2025. The decrease was primarily due to the decrease of consulting fee, share-based compensation to our management and employees and restricted shares issued for services and audit fee, which was partially offset by the increased rent expenses during the year ended June 30, 2025. General and administrative expenses accounted for 74.9% of total revenue for the year ended June 30, 2025 and 92.6% of total revenue for the same period of 2024.

Allowance for (net recovery of) credit losses. Allowance for credit losses is the estimated amount of bad debt that will arise as a result of lower collectability from account receivables, other receivables, purchase advances and contract assets. We recorded net provision for credit losses of ¥4.1 million for the year ended June 30, 2024 as compared to net recovery of credit losses of ¥2.9 million ($0.4 million) for the same period in 2025. The increase of net recovery of credit losses was mainly due to the transfer of contract costs with longer aging to cost in this period. Management plans to continue to monitor and maintain the provision at a lower risk level.

Research and development (“R&D”) expenses. R&D expenses consist primarily of salaries and related expenditures for research and development projects. R&D expenses increased by 15.0%, or ¥2.1 million ($0.3 million) from ¥14.3 million for the year ended June 30, 2024 to ¥16.4 million ($2.3 million) for the same period of 2025. R&D expenses accounted for 24.8% of total revenue in the year ended June 30, 2025 and 20.8% of total revenue for the same period of 2024. The company has increased investment related to research and development, particularly in automation products and software.

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Net Loss

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the Years Ended |
​ | ​ | June 30, |
​ | ​ | ​ |  | ​ |  | Increase / |  | Percentage |
​ |  | 2024 |  | 2025 |  | (Decrease) |  | Change |
Loss from operations |  | ¥ | (71,637,911) | ​ | ¥ | (57,319,712) | ​ | ¥ | 14,318,199 | ​ | (20.0) | %
Change in fair value of warrant liability | ​ | ​ | (933,995) | ​ | ​ | 6,226 | ​ | ​ | 940,221 | ​ | (100.7) | %
Interest income, net | ​ | ​ | 21,827,314 | ​ | ​ | 12,279,057 | ​ | ​ | (9,548,257) | ​ | (43.7) | %
Other income (expenses), net |  | ​ | (691,218) | ​ | ​ | 1,334,732 | ​ | ​ | 2,025,950 | ​ | (293.1) | %
Loss before income taxes |  | ​ | (51,435,810) | ​ | ​ | (43,699,697) | ​ | ​ | 7,736,113 | ​ | (15.0) | %
Income tax expenses |  | ​ | 30 | ​ | ​ | 1,580 | ​ | ​ | 1,550 | ​ | 5,166.7 | %
Net loss |  | ​ | (51,435,840) | ​ | ​ | (43,701,277) | ​ | ​ | 7,734,563 | ​ | (15.0) | %
Less: Net loss attributable to non-controlling interest |  | ​ | (1,564,581) | ​ | ​ | (1,112,723) | ​ | ​ | 451,858 | ​ | (28.9) | %
Net loss attributable to Recon Technology, Ltd |  | ¥ | (49,871,259) | ​ | ¥ | (42,588,554) | ​ | ¥ | 7,282,705 | ​ | (14.6) | %

​

Loss from operations. Loss from operations was ¥57.3 million ($8.0 million) for the year ended June 30, 2025, compared to a loss of ¥71.6 million for the same period of 2024. This ¥14.3 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 ¥0.9 million and ¥0.01 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. Net interest income was ¥12.3 million ($1.7 million) for the year ended June 30, 2025, compared to net interest income of ¥21.8 million for the same period of 2024. The ¥9.5 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 ¥1.3 million ($0.2 million) for the year ended June 30, 2025, compared to other net expenses of ¥0.7 million for the same period of 2024. The ¥2.0 million ($0.3 million) increase other net income was primarily due to a decrease in subsidy income of ¥0.2 million. The increase in other net income was attributable to a decrease in subsidy income and an asset write-off gain of approximately ¥0.1 million. Additionally, following the closure of the Qinghai office, ¥0.5 million in payables that could no longer be settled was recognized as income, ¥0.2 million in receivables that could not be collected was written off as a loss and an increase in foreign exchange transaction income of ¥1.8 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 ¥43.7 million ($6.1 million) for the year ended June 30, 2025, a decrease of ¥7.7 million ($1.1 million) from net loss of ¥51.4 million for the same period of 2024.

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Liquidity and Capital Resources

As of June 30, 2025, we had cash in the amount of approximately ¥98.9 million ($13.8 million) and short-term investment in bank fixed income product of approximately ¥3.6 million ($0.5 million). As of June 30, 2024, we had cash in the amount of approximately ¥110.0 million and short-term investment in bank fixed income product of approximately ¥88.1 million ($12.3 million).

Indebtedness. As of June 30, 2025, we had ¥688.0 ($96.0) of warrant liability, ¥11.6 million ($1.6 million) of short-term bank loans, ¥10.0 million ($1.4 million) of short-term borrowings from related parties, ¥1.4 million ($0.2 million) of short-term lease payable due to third parties, ¥0.4 million ($0.05 million) of short-term lease payable due to a related party, ¥1.1 million ($0.2 million) of long-term lease payable to third parties, ¥42.4 million ($5.9 million) of contractual purchase commitments, and a liability of severance payments of ¥9.3 million ($1.3 million) which is very unlikely to be incurred in the foreseeable future. Other than indebtedness listed above, we did not have any other finance leases, guarantees or other material contingent liabilities.

Holding Company Structure. We are a holding company with no operations of our own. All of our operations are conducted through the Domestic Companies. As a result, our ability to pay dividends and to finance any debt that we may incur is dependent upon the receipt of dividends and other distributions from the Domestic Companies. In addition, Chinese legal restrictions permit payment of dividends to us by the Domestic Companies only out of their respective accumulated net profits, if any, determined in accordance with Chinese accounting standards and regulations. Under Chinese law, the Domestic Companies are required to set aside a portion (at least 10%) of their after-tax net income (after discharging all cumulated loss), if any, each year for compulsory statutory reserve until the amount of the reserve reaches 50% of the Domestic Companies’ registered capital. These funds may be distributed to shareholders at the time of each Domestic Company’s wind-up.

Off-Balance Sheet Arrangements. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Capital Resources. To date we have primarily financed our operations primarily through cash on hand, which was raised through previous offerings and cash provided by investing activities. As of June 30, 2025, we had total assets of ¥525.6 million ($73.4 million), which includes cash of ¥98.9 million ($13.8 million), short-term investments of ¥3.6 million ($0.5 million), accounts receivable, net of ¥35.9 million ($5.0 million), loans to third parties of ¥260.1 million ($36.3 million) and net contract costs of ¥53.5 million ($7.5 million) and working capital of ¥295.6 million ($41.3 million). Shareholders’ equity amounted to ¥467.4 million ($65.3 million).

Cash from Operating Activities. Net cash used in operating activities was ¥33.8 million ($4.7 million) for the year ended June 30, 2025. This was an increase of approximately ¥10 million ($1.4 million) compared to net cash used in operating activities of approximately ¥43.7 million for the same period in 2024. The net cash used in operating activities for the year ended June 30, 2025 was primarily attributable to the net loss attributable to the Company in the amount of ¥43.7 million ($6.1 million) due to the reasons discussed above, reconciled by a decrease in accounts receivable of ¥1.7 million ($0.2 million), a decrease in notes receivable of ¥1.3 million ($0.2 million),an increase in other payables of ¥3.4 million ($0.5 million), an increase in trade accounts payable of ¥1.9 million ($0.3 million) and an increase in advances from customers of ¥2.9 million ($0.4 million)

Cash from Investing Activities. Net cash provided by investing activities was approximately ¥33.7 million ($4.7 million) for the year ended June 30, 2025. This was an increase of approximately ¥30.7 million ($4.3 million) compared to net cash used in investing activities of approximately ¥3.0 million for the same period in 2024, which was due to the net cash outflow related to loans to third parties decreased by ¥38.9 million, a ¥6.3 million reduction in spending on land use right and construction-in-progress, and a ¥13.7 million decrease in net cash from short-term investments following lower placements.

Cash from Financing Activities. Net cash used in financing activities amounted to ¥3.3 million (negative $0.5 million) for the year ended June 30, 2025, as compared to net cash provided by financing activities of ¥45.0 million for the same period in 2024.

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Working Capital. Total working capital as of June 30, 2025 amounted to ¥295.6 million ($41.3 million), compared to ¥460.0 million as of June 30, 2024. Total current assets as of June 30, 2025 amounted to ¥356.2 million ($49.7 million), a decrease of ¥150.3 million ($21.0 million) compared to approximately ¥506.5 million at June 30, 2024. The decrease in total current assets at June 30, 2025 compared to June 30, 2024 was mainly due to a decrease in cash, short-term investments, and loans to third parties-short term, partially offset by an increase in purchase advances. For the year ended June 30, 2025, the Company had approximately ¥33.8 million ($4.7 million) cash out flow from the operating activities, and as of June 30, 2025, our total future minimum purchase commitment under the non-cancellable purchase contracts were amounted to ¥42.4 million ($5.9 million). As of June 30, 2025, the Company had cash in the amount of approximately ¥98.9 million ($13.8 million) for the next operating cycle ending June 30, 2026. Based on the historical trends and the capital requirements of the new plant we are building, management believes that the Company will have sufficient working capital for its operations at least 12 months from the issuance date of this report.

Current liabilities. Current liabilities amounted to ¥60.6 million ($8.5 million) at June 30, 2025, in comparison to ¥47.5 million at June 30, 2024.

Capital Needs. With the uncertainty of the current market, our management believes it is necessary to enhance collection of outstanding accounts receivable and other receivables, and to be cautious on operational decisions and project selection. Our management believes that our current operations can satisfy our daily working capital needs. We may also raise capital through public offerings or private placements of our securities to finance our development of our business and to consummate any merger and acquisition, if necessary.

Tabular Disclosure of Contractual Obligations

Below is a table setting forth all our contractual obligations as of June 30, 2025, which consists of our short-term loan agreements, operating lease obligations, loans from third parties, warrant liabilities and due to related party:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Payment Due by Period
​ | ​ | ​ | ​ | ​ | Less | ​ | ​ | ​ | ​ | ​ | ​ | ​ | More
​ | ​ | ​ | ​ | ​ | than | ​ | 1 – 3 | ​ | 3 – 5 | ​ | than
Contractual Obligations |  | Total |  | 1 year |  | years |  | years |  | 5 years
Debt obligations |  | ¥ | 31,599,586 | ​ | ¥ | 21,599,586 | ​ | ¥ | 10,000,000 | ​ | ¥ | — | ​ | ¥ | —
Operating lease obligations |  | ​ | 2,915,499 | ​ |  | 1,820,285 | ​ |  | 1,095,214 | ​ |  | — | ​ |  | —
Due to related parties |  | ​ | 2,927,377 | ​ |  | 2,927,377 | ​ |  | — | ​ |  | — | ​ |  | —
Purchase obligation |  | ​ | 42,366,038 | ​ |  | 42,366,038 | ​ |  | — | ​ |  | — | ​ |  | —
Warrant liabilities |  | ​ | 688 | ​ |  | — | ​ |  | 688 | ​ |  | — | ​ |  | —
Total |  | ¥ | 79,809,188 | ​ | ¥ | 68,713,286 | ​ | ¥ | 11,095,902 | ​ | ¥ | — | ​ | ¥ | —

​

​

​

​

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ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

​

6.A. Directors and Senior Management

Executive Officers and Directors

The following table sets forth our executive officers and directors, their ages and the positions held by them:

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Name |  | Age |  | Position Held
Mr. Yin Shenping |  | 55 |  | Chief Executive Officer and Director
Ms. Liu Jia |  | 42 |  | Chief Financial Officer and Director
Mr. Chen Guangqiang |  | 62 |  | Chief Technology Officer, Chairman and Director
Mr. Hu Zhongchen |  | 72 |  | Independent Director
Mr. Nelson N.S. Wong |  | 63 |  | Independent Director (Audit Committee Chair)
Mr. Hu Jijun |  | 60 |  | Independent Director
Dr. Duan Yonggang |  | 61 |  | Independent Director

​

Yin Shenping. Mr. Yin has been our Chief Executive Officer and a director since the Company’s inception. In 2003, Mr. Yin founded Nanjing Recon, a Chinese company that provides services to automate and enhance the extraction of petroleum in China, and has been the Chief Executive Officer since that time. Prior to founding Nanjing Recon, Mr. Yin served as a sales manager for Fujian Haitian Network Company from 1992 through 1994. Mr. Yin has founded and operated a number of companies engaged in the IT industry including: Xiamen Hengda Haitian Computer Network Co., Ltd. (1994), Baotou Hengda Haitian Computer Network Co., Ltd. (1997), Beijing Jingke Haitian Electronic Technology Development Co., Ltd. (1999), and Jingsu Huasheng Information Technology Co., Ltd. (2000). Mr. Yin currently serves as Chairman of the Board of Directors of HiTek Global Inc. (NASDAQ: HKIT) since 2017. In 2000, Mr. Yin merged the former Nanjing Kingsley Software Engineering Co., Ltd. into Nanjing Recon. Mr. Yin received his bachelor’s degree in 1991 from Nanjing Agricultural University in information systems. Mr. Yin was chosen as a director of the Company because as one of the founders of the Company, we believe his knowledge of the Company and years of experience in our industry give him the ability to guide the Company as a director.

Liu Jia. Ms. Liu has served as our Chief Financial Officer since 2008 and as our director since 2022. Ms. Liu received her bachelor’s degree in 2006 from Beijing University of Chemical Technology, School of Economics and Management and her master’s degree in industrial economics in 2009 from Beijing Wuzi University. Ms. Liu is an independent director of Haoxi Health Technology Limited (Nasdaq: HAO). Ms. Liu is a certified U.S. CPA.

Chen Guangqiang. Mr. Chen has served as our Chief Technology Officer and director since our inception. Mr. Chen was a geological engineer for the Fourth Oil Extraction Plant of Huabei Oilfield from 1985 through 1993. From 1993 through 1999, Mr. Chen was a chief engineer for Xinda Company, CNPC Development Bureau. From 1999 through 2003, Mr. Chen served as the general manager of Beijing Adar. Mr. Chen received his bachelor’s degree in 1985 from Southwest Petroleum Institute. Mr. Chen was appointed to the position of director because he is one of the founders of the Company and we believe we can benefit from his many years of engineering experience and management experience in the oil extraction industry.

Nelson N.S. Wong. Mr. Wong joined our board of directors in 2008. Prior to joining our Board, in 1990 Mr. Wong joined the Vigers Group, a real estate company that provides services in valuation, corporate property services, investment advisory services, general practice surveying, building surveying, commercial, in both retail and industrial agency, and property and facilities management. Mr. Wong became the Vice Chairman and CEO of the Vigers Group in 1993. In 1995 Mr. Wong established the ACN Group, a business consulting firm, where he has worked continuously and continues to serve as the Chairman and Managing Partner. Mr. Wong received a bachelor’s degree in arts from the PLA Institute of International Relations in Nanjing in 1983. Mr. Wong was appointed to the position of director because we believe we can benefit from his leadership skills and management experience.

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Hu Jijun. Mr. Hu joined our board of directors in 2008. Prior to joining our Board, from 1988 to 2003, Mr. Hu served in a variety of positions at No. 2 test-drill plant, including technician of installation, assets equipment work, electrical installation, control room production dispatcher, Deputy Chief Engineer of the Technology Battalion, and Deputy Director of Production. From 2003 to 2005 he served as Head of the Integrated Battalion and he is currently the Head of the Transport Battalion, Senior Electric Engineer. Mr. Hu graduated as an automated professional from the China University of Petroleum in 1988. Mr. Hu was appointed to the position of a director because we believe his years of experience and knowledge gained while working at our No. 2 test-drill plant will prove beneficial to the guidance of the Company.

Duan Yonggang. Dr. Duan has served as our director since March 2020. Dr. Duan has been teaching and researching in the oil-gas field development engineering area for a long time. From November 2004, Dr. Duan has been a professor at Southwest Petroleum University in Sichuan, China. He is the director of the oil well technology center of petroleum engineering school of Southwest Petroleum University. In addition, Dr. Duan is also a researcher and Ph.D. supervisor. He has published over 60 articles on top academic journals and participated in writing six books. He was named an expert with outstanding contributions and an oil-gas safety expert in Sichuan Province, China. Dr. Duan received his bachelor’s degree in oil production in 1984, and his master degree in oil-gas field development engineering in 1988, both from Southwest Colleague. Dr. Duan received his Ph.D. degree in oil-gas field development engineering in 2009 from Southwest Petroleum University. Dr. Duan was chosen as a director because he is an expert in the oilfield area.

Hu Zhongchen. Mr. Hu joined our board of directors in October 2024. Mr. Hu retired from Baotou Steel (Group) Co., Ltd. after having been employed from 1979 to 2014. Mr. Hu received his bachelor’s degree in business management in 1979 from Inner Mongolia University of Technology. He possesses a China’s Senior Economist certificate. Mr. Hu was chosen to serve as a director because of his expertise and experience in economic management and deep understanding of China’s energy industry.

Employment Agreements

We have employment agreements with each of our Chief Executive Officer, Chief Technology Officer and Chief Financial Officer. With the exception of the employment agreement with our Chief Financial Officer, each of these employment agreements provides for an indefinite term. Such employment agreements may be terminated (1) if the employee gives written notice of his or her intention to resign, (2) the employee is absent from three consecutive meetings of the board of directors, without special leave of absence from the other members of the board of directors, and the board of directors passes a resolution that such employee has vacated his office, or (3) the death, bankruptcy or mental incapacity of the employee. The employment agreement for our Chief Financial Officer provides for a one-year term, with automatic renewal upon expiration, and the parties have continued to operate under the terms of this agreement since its expiration. Such employment agreement may be terminated if Ms. Liu gives thirty days’ written notice of her intention to resign, or if the board of directors determines she can no longer perform her duties as Chief Financial Officer and provides her with thirty days’ written notice of termination.

Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement in the absence of cause, then we are obligated to pay the employee one month’s salary for each year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us.

6.B. Compensation

The following table shows the annual compensation paid by us to Yin Shenping, our Chief Executive Officer, Liu Jia, our Chief Financial Officer, and Chen Guangqiang, our Chief Technology Officer, for the years ended June 30, 2025, 2024 and 2023. No other employee or officer received more than $100,000 in total compensation in 2025, 2024 and 2023.

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Summary Executive Compensation Table

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | Option |  | Restricted Stock |  | ​ | ​
Name and principal position | ​ | Year | ​ | Salary | ​ | Bonus | ​ | Awards | ​ | Awards | ​ | Total
Yin Shenping, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Principal Executive Officer |  | 2025 | ​ | $ | 471,866 | ​ | $ | 100,000 | ​ | $ | — | ​ | $ | 397,068 | ​ | $ | 968,934
​ |  | 2024 | ​ | $ | 600,000 | ​ | $ | 180,000 | ​ | $ | — | ​ | $ | 1,186,674 | ​ | $ | 1,966,674
​ |  | 2023 | ​ | $ | 620,000 | ​ | $ | 150,000 | ​ | $ | — | ​ | $ | 1,515,000 | ​ | $ | 2,285,000
Liu Jia | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Principal Financial Officer |  | 2025 | ​ | $ | 182,072 | ​ | $ | 50,000 | ​ | $ | — | ​ | $ | 189,708 | ​ | $ | 421,780
​ |  | 2024 | ​ | $ | 180,000 | ​ | $ | 60,000 | ​ | $ | — | ​ | $ | 263,078 | ​ | $ | 503,078
​ |  | 2023 | ​ | $ | 162,000 | ​ | $ | 60,000 | ​ | $ | — | ​ | $ | 372,600 | ​ | $ | 594,600
Chen Guangqiang, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chief Technology Officer |  | 2025 | ​ | $ | 471,866 | ​ | $ | 100,000 | ​ | $ | — | ​ | $ | 397,068 | ​ | $ | 968,934
​ |  | 2024 | ​ | $ | 600,000 | ​ | $ | 180,000 | ​ | $ | — | ​ | $ | 1,186,674 | ​ | $ | 1,966,674
​ |  | 2023 | ​ | $ | 620,000 | ​ | $ | 150,000 | ​ | $ | — | ​ | $ | 1,515,000 | ​ | $ | 2,285,000

​

Director Compensation

All directors hold office until the expiration of their respective terms and until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the board of directors. Employee directors and non-voting observers do not receive any compensation for their services. We pay $8,000 to each independent director annually for their service as directors. In addition, non-employee directors are entitled to receive compensation for their actual travel expenses for each board of directors meeting attended.

Summary Director Compensation Table

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fees earned |  | ​ | ​ |  | ​ |  | ​ | ​
​ | ​ | or | ​ | Option | ​ | Restricted Stock | ​ | ​ | ​
Name* | ​ | paid in cash | ​ | Awards | ​ | Awards | ​ | Total
Nelson N.S. Wong | ​ | $ | 9,000 | ​ | $ | — |  | — | ​ | $ | 9,000
Hu Jijun | ​ | $ | 9,000 | ​ | $ | — |  | — | ​ | $ | 9,000
Duan Yonggang | ​ | $ | 9,000 | ​ | $ | — |  | — | ​ | $ | 9,000
Hu Zhongchen | ​ | $ | 4,000 | ​ | $ | — | ​ | — | ​ | $ | 4,000

*Compensation for our directors Yin Shenping, Chen Guangqiang and Liu Jia, who also serve as executive officers, is fully disclosed in the executive compensation table.

​

The following table summarizes, as of June 30, 2025, the outstanding options, unvested restricted share units and shares that we granted to our current directors and executive officers. The following Class A Ordinary Shares were excluded from the calculation of EPS and beneficial ownership as these unvested Class A ordinary shares that were pre-issued under the 2024 Equity Incentive Plan

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Class A Ordinary Shares |  | ​ |  | ​ |  | ​
​ | ​ | underlying options | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | awarded/Restricted | ​ | Exercise price | ​ | ​ | ​ | ​
Name | ​ | Share Units/Shares* | ​ | (US$/share)* | ​ | Date of grant | ​ | Date of expiration
Yin Shenping |  | 820,000 |  | — |  | 03/31/2025 |  | 03/31/2027
Liu Jia |  | 258,194 |  | — |  | 03/31/2025 |  | 03/31/2027
Chen Guangqiang |  | 820,000 |  | — |  | 03/31/2025 |  | 03/31/2027
Nelson N.S. Wong |  | 50,000 |  | — |  | 03/31/2025 |  | 03/31/2027
Hu Jijun |  | 50,000 |  | — |  | 03/31/2025 |  | 03/31/2027
Duan Yonggang |  | 50,000 |  | — |  | 03/31/2025 |  | 03/31/2027
Total |  | 2,048,194 | ​ | — | ​ | ​ | ​ | ​

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6.C. Board Practices

Board of directors and Board Committees

Our board of directors currently consists of seven members. There are no family relationships between any of our executive officers and directors.

The directors are divided into three classes, as nearly equal in number as the then total number of directors permits. Class I directors faced re-election at our annual general meeting of shareholders in 2023 and every three years thereafter. Class II directors faced re-election at our annual general meeting of shareholders in 2024 and every three years thereafter. Class III directors faced re-election at our annual general meeting of shareholders in 2021 and every three years thereafter.

If the number of directors changes, any increase or decrease will be apportioned among the classes so as to maintain the number of directors in each class as nearly as possible. Any additional directors of a class elected to fill a vacancy resulting from an increase in such class will hold office for a term that coincides with the remaining term of that class. Decreases in the number of directors will not shorten the term of any incumbent director. These board provisions could make it more difficult for third parties to gain control of the Company by making it difficult to replace members of our board of directors.

A director may vote in respect of any contract or transaction in which he is interested, provided, however, that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to the board of directors consideration and any vote on that matter. A general notice or disclosure to the directors, or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof that a director is a shareholder of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting.

The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Hu Zhongchen, Mr. Nelson N.S. Wong, Mr. Hu Jijun and Dr. Duan Yonggang are our independent directors.

We do not have a lead independent director because of the foregoing reason because we believe our independent directors are encouraged to freely voice their opinions on a relatively small company board.

Our board of directors plays a significant role in our risk oversight. The board of directors makes all relevant Company decisions. As such, it is important for us to have our Chief Executive Officer serve on the Board as he plays a key role in the risk oversight of the Company. As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

Currently, three committees have been established under the board: the audit committee, the compensation committee and the nominating committee. All of these committees consist solely of independent directors.

The audit committee is responsible for overseeing the accounting and financial reporting processes of the Company and audits of the financial statements of the Company, including the appointment, compensation and oversight of the work of our independent auditors. Mr. Wong qualifies as the audit committee financial expert and serves as the chair of the audit committee.

The compensation committee of the board of directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation, and also administers our incentive compensation plans and equity-based plans (but our board retains the authority to interpret those plans). Mr. Hu Jijun serves as the chair of the compensation committee.

The nominating committee of the board of directors is responsible for the assessment of the performance of the board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues. The nominating committee considers diversity of opinion and experience when nominating directors. Mr. Hu Zhongchen serves as the chair of the nominating committee.

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There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

Duties of Directors

Under Cayman Islands law, our directors have a fiduciary duty to the Company to act in good faith in their dealings with or on behalf of the Company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:

​

| ● | a duty to act in good faith in the best interests of the Company;

| ● | a duty not to personally profit from opportunities that arise from the office of director;

| ● | a duty to avoid conflicts of interest; and

| ● | a duty to exercise powers for the purpose for which such powers were intended.

​

In general, Cayman Islands law imposes various duties on directors of a company with respect to certain matters of management and administration of the Company. In addition to the remedies available under general law, the Companies Law imposes fines on directors who fail to satisfy some of these requirements. However, in many circumstances, an individual is only liable if he is knowingly guilty of the default or knowingly and willfully authorizes or permits the default. In comparison, under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders. In addition, under Delaware law, a party challenging the propriety of a decision of the directors bears the burden of rebutting the applicability of the presumptions afforded to directors by the “business judgment rule.” If the presumption is not rebutted, the business judgment rule protects the directors and their decisions, and their business judgments will not be second guessed. If the presumption is rebutted, the directors bear the burden of demonstrating the entire fairness of the relevant transaction. Notwithstanding the foregoing, Delaware courts subject directors’ conduct to enhanced scrutiny in respect of defensive actions taken in response to a threat to corporate control and approval of a transaction resulting in a sale of control of the corporation.

Limitation of Director and Officer Liability

Pursuant to our Memorandum and Articles of Association, every director or officer and the personal representatives of the same shall be indemnified and held harmless out of our assets and funds against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by him or her in or about the conduct of our business or affairs or in the execution or discharge of his or her duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in defending (whether successfully or otherwise) any civil proceedings concerning us or our affairs in any court whether in the Cayman Islands or elsewhere. No such director or officer will be liable for: (a) the acts, receipts, neglects, defaults or omissions of any other such Director or officer or agent; or (b) any loss on account of defect of title to any of our properties; or (c) account of the insufficiency of any security in or upon which any of our money shall be invested; or (d) any loss incurred through any bank, broker or other similar person; or (e) any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgment or oversight on his or her part; or (f) any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers authorities, or discretions of his or her office or in relation thereto, unless the same shall happen through his or her own dishonesty, gross negligence or willful default.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement.

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6.D. Employees

As of June 30, 2025, we employed a total of 188 full-time in the following functions:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Number of Employees
​ | ​ | June 30, |  | June 30, |  | June 30,
Department | ​ | 2025 | ​ | 2024 | ​ | 2023
Senior Management |  | 11 | ​ | 11 | ​ | 20
Human Resource & Administration |  | 10 | ​ | 10 | ​ | 26
Finance |  | 18 | ​ | 17 | ​ | 11
Research & Development & Technology |  | 72 | ​ | 68 | ​ | 64
Procurement and production |  | 34 | ​ | 35 | ​ | 27
Sales & Marketing |  | 43 | ​ | 43 | ​ | 40
Total |  | 188 | ​ | 184 | ​ | 188

​

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages.

We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance. In fiscal year 2025, we contributed approximately $530,266 to the employee benefit plans and social insurance. In fiscal year 2024, we contributed approximately $418,587 to the employee benefit plans and social insurance. In fiscal year 2023, we contributed approximately $382,791 to the employee benefit plans and social insurance. The effect on our liquidity by the payments for these contributions is immaterial. We believe that we are in material compliance with the relevant PRC employment laws.

6.E. Share Ownership

For information regarding the share ownership of our directors and senior management, see “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.”

Share and Share Options

Share Option Pool

As of June 30, 2025, there are no outstanding options under the 2015 Incentive Plan, the 2021 Incentive Plan, or the 2025 Incentive Plan.

Executive Class A Ordinary Stock Grants

On February 28, 2022, the Company’s board granted 1,642,331 (91,241 shares post 2024 Reverse Split) Class A Ordinary Shares pursuant to its 2015 Equity Incentive Plan to the employees of the Company, at a fair value of $1,708,024, with a vesting period of three years from the date of the grant.

On March 15, 2023, the Company’s board granted 1,000,000 (55,556 shares post 2024 Reverse Split) Class A Ordinary Shares to the employees of the Company, at a fair value of $372,600, with a vesting period of six months from the date of the grant.

On February 26, 2024, the Company’s board granted 6,255,483 (347,527 shares post 2024 Reverse Split) Class A Ordinary Shares pursuant to its 2015 Equity Incentive Plan to the employees of the Company, at a fair value of $2,130,000, with a vesting period of one year from the date of the grant.

On March 31, 2025, the Company’s board granted 2,263,194 Class A Ordinary Shares pursuant to its 2024 Equity Incentive Plan to the employees of the Company, at a fair value of $3,496,635, with a vesting period of two years from the date of the grant.

As of June 30, 2025, we have 2,263,194 non-vested restricted stocks outstanding under such grant.

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Executive Class B Ordinary Stock Grants

On February 28, 2022, the Company’s board approved a grant of 1,600,000 Class B Ordinary Shares to its management as compensation cost for awards. The fair value of the restricted shares was $1,694,000 based on the fair value of share price $1.06 at February 28, 2022. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on February 28, 2022.

On March 9, 2023, the Company’s board approved a grant of 3,000,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $3,025,000 based on the fair value of share price $1.01 at March 9, 2023. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on March 9, 2023.

On February 26, 2024, the Company’s board approved a grant of 12,900,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $2,130,000 based on the fair value of share price $0.17 at February 26, 2024. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on August 1, 2024.

6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

None.

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ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

The following table sets forth information with respect to beneficial ownership of our Class A and Class B Ordinary Shares as of the date of this report, for each person known by us to beneficially own 5% or more of our Class A Ordinary Shares, and all of our executive officers and directors individually and as a group. It reflects the one-for-eighteen Reverse Stock Split we effected on May 1, 2024 and the two classes of shares approved by our shareholders on April 5, 2021: Class A Ordinary Shares, with one vote per share, and Class B Ordinary Shares, with fifteen votes per share. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A and Class B Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership is based on shares, which consists of 8,364,232 Class A Ordinary Shares and 20,000,000 Class B Ordinary Shares outstanding as of June 30, 2025. The Class A Ordinary Shares excludes 2,263,194 unvested Class A ordinary shares that were pre-issued under the 2024 Equity Incentive Plan.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Shares Beneficially Owned (1) | ​ | ​ |
​ | ​ | Class A Ordinary Shares | ​ | Class B Ordinary Shares | ​ | % of Total Voting | ​
Name of Beneficial Owner | ​ | Number |  | % |  | Number |  | % |  | Power(2) |
Directors and Executive Officers: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Yin Shenping(3) |  | 162,625 | ​ | 1.94 | % | 10,000,000 | ​ | 50.00 | % | 48.70 | %
Chen Guangqiang(4) |  | 160,297 | ​ | 1.92 | % | 10,000,000 | ​ | 50.00 | % | 48.70 | %
Hu Jijun(5) |  | 15,888 | ​ | * | ​ | ​ | ​ | ​ | ​ | * | ​
Wong Nelson(6) |  | 15,000 | ​ | * | ​ | ​ | ​ | ​ | ​ | * | ​
Hu Zhongchen(7) | ​ | — | ​ | * | ​ | ​ | ​ | ​ | ​ | * | ​
Liu Jia(8) |  | 121,416 | ​ | 1.45 | % | ​ | ​ | ​ | ​ | * | ​
Duan Yonggang(9) |  | 15,000 | ​ | * | ​ | ​ | ​ | ​ | ​ | * | ​
Directors and Executive Officers as a Group (eight members) |  | 490,226 | ​ | 5.90 | % | 20,000,000 | ​ | 100.00 | % | 97.40 | %
5% or Greater Shareholders | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
RAPID PROCEED LIMITED | ​ | 555,556 | ​ | 6.64 | % | — | ​ | — | ​ | * | ​
NEWWILK VENTURE LLC | ​ | 666,667 | ​ | 7.97 | % | — | ​ | — | ​ | * | ​
LUCAS SHAWN CAPITAL LLC | ​ | 666,667 | ​ | 7.97 | % | — | ​ | — | ​ | * | ​
HAOTIAN VENTURE CAPITAL LLC | ​ | 666,667 | ​ | 7.97 | % | — | ​ | — | ​ | * | ​
YESCOM VENTURE LLC | ​ | 666,667 | ​ | 7.97 | % | — | ​ | — | ​ | * | ​
NUMBER 8 CAPITAL LIMITED | ​ | 666,667 | ​ | 7.97 | % | — | ​ | — | ​ | * | ​
John Michael Fuentes | ​ | 555,556 | ​ | 6.64 | % | — | ​ | — | ​ | * | ​

*Less than 1%.

(1) | Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Ordinary Shares. All shares represent Class A and Class B Ordinary Shares.

(2) | Class A Ordinary Shares have one vote per share. Class B Ordinary Shares have fifteen votes per share.

(3) | Mr. Yin holds Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares. Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Yin has substantial control over Recon. The address is: Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

(4) | Mr. Chen holds Class A Ordinary Shares and 10,000,000 Class B Ordinary Shares. Due to his ownership of 50% of the outstanding Class B Ordinary Shares (which have 15 votes per share rather than one vote like Class A Ordinary Shares), Mr. Chen has substantial control over Recon. The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

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(5) | The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

(6) | The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

(7) | The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

(8) | The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

(9) | The address is Recon Technology Ltd, Room 601, No. 1 Shui’an South Street, Chaoyang District, Beijing 100012, People’s Republic of China.

7.B. Related party transactions

Transactions with Related Persons

Other payables consisted of the following:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ |  | 2024 |  | 2025 |  | 2025
Related Parties |  | RMB |  | RMB |  | US Dollars
Expenses paid by the major shareholders |  | ¥ | 1,453,910 |  | ¥ | 2,382,218 | ​ | $ | 332,545
Due to family members of the owners of BHD and FGS |  | ​ | 845,159 |  |  | 545,159 | ​ |  | 76,101
Total |  | ¥ | 2,299,069 |  | ¥ | 2,927,377 | ​ | $ | 408,646

​

The Company also had short-term borrowings from related parties. Below is a summary of the Company’s short-term borrowings due to related parties as of June 30, 2024 and 2025, respectively.

The Company also had long-term borrowings from a related party. Below is a summary of the Company’s long-term borrowings due to a related party as of June 30, 2024 and 2025, respectively.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Short-term borrowings due to related parties: | ​ | RMB | ​ | RMB | ​ | US Dollars
Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024 | ​ | ¥ | 10,002,875 | ​ | ¥ | — | ​ | $ | —
Short-term borrowing from a Founder, 3.45% annual interest, due on December 13, 2025 | ​ |  | — | ​ |  | 10,017,250 | ​ |  | 1,398,354
Total short-term borrowings due to related parties | ​ | ¥ | 10,002,875 | ​ | ¥ | 10,017,250 | ​ | $ | 1,398,354

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Long-term borrowings due to related party: | ​ | RMB | ​ | RMB | ​ | US Dollars
Long-term borrowing from a Founder, monthly payments of ¥31,250 inclusive of interest at 3.75%, three years loan, due in April 29, 2027. | ​ | ¥ | 10,000,000 | ​ | ¥ | 10,000,000 | ​ | $ | 1,395,946
Total long-term borrowings due to related party | ​ | ¥ | 10,000,000 | ​ | ¥ | 10,000,000 | ​ | $ | 1,395,946

​

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Leases from related parties - The Company has various agreements for the lease of office space owned by the Founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥96,875 ($13,524) with annual rental expense at ¥1,162,500 ($162,288). The details of leases from related parties are as below:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ |  | Monthly Rent |  | Monthly Rent
Lessee | ​ | Lessor | ​ | Rent Period | ​ | RMB | ​ | US Dollars
Nanjing Recon | ​ | Yin Shenping | ​ | April 1, 2024 - March 31, 2026 | ​ | ¥ | 40,000 | ​ | $ | 5,584
BHD |  | Chen Guangqiang |  | Jan 1, 2024- Dec 31, 2025 | ​ |  | 33,250 | ​ |  | 4,642
BHD |  | Chen Guangqiang |  | Jan 1, 2024- Dec 31, 2025 | ​ |  | 23,625 | ​ |  | 3,298

​

Expenses paid by the owner on behalf of Recon – Shareholders and founders of the VIEs paid certain operating expenses for the Company. As of June 30, 2024 and 2025, ¥2,299,069 and ¥2,927,377 ($408,646) was due to them, respectively.

Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans. (see Note 15)

Other than as described herein, no transactions required to be disclosed under Item 404 of Regulation S-K have occurred since the beginning of the Company’s last fiscal year.

Director Independence

The board of directors maintains a majority of independent directors who are deemed to be independent under the definition of independence provided by NASDAQ Stock Market Rule 4200(a)(15). Mr. Nelson N.S. Wong, Mr. Zhongchen, Mr. Hu Jijun and Dr. Duan Yonggang are our independent directors.

7.C. Interests of experts and counsel

Not applicable for annual reports on Form 20-F.

​

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ITEM 8.FINANCIAL INFORMATION

8.A. Consolidated Statements and Other Financial Information

Please refer to Item 18.

Legal and Administrative Proceedings

We are currently not a party to any material legal or administrative proceedings and are not aware of any pending or threatened material legal or administrative proceedings against us. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

Dividend Policy

We have never declared or paid any cash dividends on our Class A Ordinary Shares. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the board of directors may deem relevant.

Because we are a holding company with no operations of our own and all of our operations are conducted through our Chinese subsidiary, our ability to pay dividends and to finance any debt that we may incur is dependent upon dividends and other distributions paid. In addition, Chinese legal restrictions permit payment of dividends to us by our Chinese subsidiary only out of its accumulated net profit, if any, determined in accordance with Chinese accounting standards and regulations. Under Chinese law, our subsidiary is required to set aside a portion (at least 10%) of its after-tax net income (after discharging all cumulated loss), if any, each year for compulsory statutory reserve until the amount of the reserve reaches 50% of our subsidiaries’ registered capital. These funds may be distributed to shareholders at the time of its wind-up. See “Holding Company Structure.”

Payments of dividends by our subsidiary in China to the Company are also subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents. There are no such similar foreign exchange restrictions in the Cayman Islands.

8.B. Significant Changes

We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9.THE OFFER AND LISTING

9.A. Offer and listing details

We completed our initial public offering on July 29, 2009. Our Class A Ordinary Shares trade under the trading symbol “RCON” on the NASDAQ Capital Market.

As of October 14, 2025, there were approximately 40 holders of record of our Class A Ordinary Shares. This excludes our Class A Ordinary Shares owned by shareholders holding Class A Ordinary Shares under nominee security position listings. On October 14, 2025, the last sales price of our Class A Ordinary Shares as reported on the NASDAQ Capital Market was $2.04 per Class A Ordinary Share.

9.B. Plan of distribution

Not applicable for annual reports on Form 20-F.

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9.C. Markets

Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “RCON.”

9.D. Selling shareholders

Not applicable for annual reports on Form 20-F.

9.E. Dilution

Not applicable for annual reports on Form 20-F.

9.F. Expenses of the issue

Not applicable for annual reports on Form 20-F.

​

ITEM 10.ADDITIONAL INFORMATION

10.A. Share capital

Not applicable for annual reports on Form 20-F.

10.B. Memorandum and articles of association

We are an exempted company incorporated in Cayman Islands and our affairs are governed by our fourth amended and restated memorandum and articles of association and the Cayman Islands Companies Act (2023 Revision) (as amended) (the “Cayman Companies Act”). A Cayman Islands exempted company:

| ● | is a company that conducts its business mainly outside the Cayman Islands;

| ● | is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

| ● | does not have to hold an annual general meeting;

| ● | does not have to make its register of members open to inspection by shareholders of that company;

| ● | may obtain an undertaking against the imposition of any future taxation;

| ● | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

| ● | may register as a limited duration company; and

| ● | may register as a segregated portfolio company.

The following description of our memorandum and articles of association, as amended and restated from time to time, are summaries and do not purport to be complete. Reference is made to our fourth amended and restated memorandum and articles of association, effective on March 29, 2024 (respectively, the “Memorandum” and the “Articles”).

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All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form, and are issued when registered in our register of members. Unless and until the directors resolve to issue share certificates, no share certificate shall be issued, and the records of the shareholdings of each shareholder shall be in uncertified book entry form. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares or warrants to bearer.

On December 10, 2019, the Company’s board of directors approved to effect a one-for-five reverse stock split of its ordinary shares (the “2019 Reverse Stock Split”) with the market effective date of December 27, 2019, such that the number of the Company’s ordinary shares is decreased from 100,000,000 to 20,000,000 and the par value of each ordinary share is increased from US$0.0185 to US$0.0925. As a result of the Reverse Stock Split, each five pre-split ordinary shares outstanding were automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholder.

On April 5, 2021, at the 2021 annual meeting, to implement a dual class structure, our shareholders approved (i) a special resolution that the authorized share capital of the Company be amended from US$1,850,000, divided into 20,000,000 ordinary shares of a nominal or par value of US$0.0925 each, to US$15,725,000, divided into 150,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0925 each and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, and (ii) a special resolution that the Third Amended and Restated Memorandum and Articles of Association of the Company to substitute the Second Amended and Restated Memorandum and Articles of Association. On April 7, 2021, we filed the Third Amended and Restated Memorandum and Articles of Association with the Companies Register of the Cayman Islands. Our Class A Ordinary Shares began to trade on the NASDAQ Capital Market on April 12, 2021 under the same symbol, “RCON.”

On March 29, 2024, the Company held its annual meeting, at which the Company’s shareholders approved (i) a capital increase to the authorized share capital by the creation of 350,000,000 additional Class A Ordinary Shares with a nominal or par value of US$0.0925 each and 60,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0925 each; (ii) a share consolidation or reverse stock split of only the Class A Ordinary Shares, at a ratio of one-for-eighteen (the “2024 Reverse Stock Split”), such that there were then 27,694,610.80 Class A Ordinary Shares with a nominal or par value of US$1.67 (together with 60,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0925 each); (iii) a subsequent share subdivision of all shares at a ratio of 1:17,349.9459 into 480,500,000,000 Class A Ordinary Shares with a nominal or par value of US$0.0001 each and 56,000,000,000 Class B Ordinary Shares with a nominal or par value of US$0.0001 each; and (iv) a final capital reduction by the cancellation of 480,000,000,000 unissued Class A Ordinary Shares and the cancellation of 55,920,000,000 unissued Class B Ordinary Shares, such that the final authorized share capital of the Company, following each of the above stages was amended from: US$15,725,000 divided into 150,000,000 Class A ordinary shares of a nominal or par value of US$0.0925 each, and 20,000,000 Class B ordinary shares of a nominal or par value of US$0.0925 each, to: US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each (collectively, the “Capital Amendment”). No fractional ordinary shares were issued to any shareholders in connection with the Capital Amendment. Each shareholder will be entitled to receive one ordinary share in lieu of the fractional share that would have resulted from the Capital Amendment.

As of the date of this amendment to the annual report, the authorized share capital of the Company is US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each. Subject to the provisions of the Cayman Companies Act and the provisions, if any, of the Articles, and any directions given by any ordinary resolution and the rights attaching to any class of existing shares, the directors may issue, allot, grant options over or otherwise dispose of shares (including any fractions of Shares) and other securities of our company at such times, to such persons, for such consideration and on such terms as the directors may determine.

​

Class A Ordinary Shares

​

Ordinary Shares

​

Holders of ordinary shares are entitled to cast one vote for each share on all matters submitted to a vote of shareholders, including the election of directors and auditor. The holders of ordinary shares are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available therefor and subject to any preference of any then authorized and issued preferred shares. Such holders do not have any preemptive rights to subscribe for additional shares. All holders of ordinary shares are entitled to share ratably in any assets for distribution to shareholders upon the liquidation, dissolution or winding up of the Company, subject to any preference of any then authorized and issued preferred shares. All outstanding ordinary shares are fully paid and non-assessable.

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Preferred Shares

​

Pursuant to our Articles and Cayman Islands law, our Company may by Special Resolution establish one or more series of preferred shares having such number of shares, designations, relative voting rights, dividend rates, liquidation and other rights, preferences, powers and limitations as may be fixed by the Special Resolution. Any preferred shares issued will include restrictions on voting and transfer intended to avoid having us constitute a “controlled foreign corporation” for United States federal income tax purposes. Such rights, preferences, powers and limitations as may be established could have the effect of discouraging an attempt to obtain control of us. The issuance of preferred shares could also adversely affect the voting power of the holders of the ordinary shares deny shareholders the receipt of a premium on their ordinary shares in the event of a tender or other offer for the ordinary shares and have a depressive effect on the market price of the ordinary shares.

​

Under the Fourth Amended and Restated Memorandum and Articles of Association of the Company, each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder. The number of Class B Ordinary Shares held by a holder will be automatically and immediately converted into corresponding number of Class A Ordinary Shares in the ratio of 1/18 upon any direct or indirect sale, transfer, assignment or disposition of such number of Class B Ordinary Shares by the holder. Furthermore, Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Finally, except for voting rights and conversion rights as set forth in the Fourth Amended and Restated Memorandum and Articles of Association of the Company, the Class A Ordinary Shares and the Class B Ordinary Shares shall have the same rights, preferences, privileges and restrictions.

​

Register of Members

​

Under Cayman Islands law, we must keep a register of members and there should be entered therein:

​

| ● | the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member;

​

| ● | the date on which the name of any person was entered on the register as a member; and

​

| ● | the date on which any person ceased to be a member.

​

Under Cayman Islands law, the register of members of our Company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members is deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Once our register of members has been updated, the shareholders recorded in the register of members are deemed to have legal title to the shares set against their name.

If the name of any person is incorrectly entered in, or omitted from, our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a member of our Company, the person or member aggrieved (or any member of our Company or our Company itself) may apply to the Cayman Islands Grand Court for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

​

10.C. Material contracts

We have not entered into any material contracts other than in the ordinary course of business and otherwise described elsewhere in this annual report.

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10.D. Exchange controls

Foreign Currency Exchange

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans or foreign currency is to be remitted into China under the capital account, such as a capital increase or foreign currency loans to our PRC subsidiaries.

In August 2008, SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Circular 45 on November 9, 2011 in order to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

We typically do not need to use our offshore foreign currency to fund our PRC operations. In the event we need to do so, we will apply to obtain the relevant approvals of SAFE and other PRC government authorities as necessary.

SAFE Circular 37

Under the “Notice on Issues Relating to the Administration of Foreign Exchange for Domestic Residents’ Offshore Investment and Round-Trip Investment via Special Purpose Vehicles”, or SAFE Circular 37, issued by SAFE on July 4, 2014 and and its implementation rules, domestic residents in China (including domestic entities and individuals) must apply to SAFE for registration of overseas investment before contributing legally obtained domestic or overseas assets or interests to a special purpose vehicle (SPV). Domestic residents contributing legally obtained domestic assets or interests should apply for registration with the local SAFE branch in their place of registration or where the domestic enterprise’s assets or interests are located. For contributions of legally obtained overseas assets or interests, registration should be applied for with the local SAFE branch in their place of registration or place of household registration. If a registered offshore SPV undergoes changes in basic information such as domestic individual shareholders, name, or business term, or significant changes such as capital increase or decrease, equity transfer or swap, or merger or division by domestic residents, it must promptly apply to SAFE for a change of registration for overseas investment.

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Regulation of Dividend Distribution

The principal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the Company Law of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations and the Equity Joint Venture Law and its implementation regulations. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of such reserves reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

10.E. Taxation

The following sets forth the material Cayman Islands, Chinese and U.S. federal income tax consequences related to an investment in our Class A Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our Class A Ordinary Shares, such as the tax consequences under state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Class A Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of shares and you are, for U.S. federal income tax purposes,

| ● | an individual who is a citizen or resident of the United States;

| ● | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

| ● | an estate whose income is subject to U.S. federal income taxation regardless of its source; or

| ● | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

WE URGE POTENTIAL PURCHASERS OF OUR SHARES TO CONSULT THEIR OWN TAX

ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX

CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR SHARES.

People’s Republic of China Enterprise Taxation

The following brief description of Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See “Dividend Policy.”

We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

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Under the EIT Law, an enterprise established outside of China with a “de facto management body” within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although Recon does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of Recon and its subsidiaries organized outside the PRC.

According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of the Company, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that Recon and its offshore subsidiaries should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in SAT Notice 82 were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.

The implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how “domicile” may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%.

See “Risk Factors — Risks Related to Doing Business in China — Under the Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.”

Any gain or loss recognized by you generally will be treated as United States source gain or loss. However, if we are treated as a PRC resident enterprise for PRC tax purposes and PRC tax were imposed on any gain, and if you are eligible for the benefits of the tax treaty between the United States and PRC, you may elect to treat such gain as PRC source gain under such treaty and, accordingly, you may be able to credit the PRC tax against your United States federal income tax liability.

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Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our company levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

United States Federal Income Taxation

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

| ● | banks;

| ● | financial institutions;

| ● | insurance companies;

| ● | regulated investment companies;

| ● | real estate investment trusts;

| ● | broker-dealers;

| ● | traders that elect to mark-to-market;

| ● | U.S. expatriates;

| ● | tax-exempt entities;

| ● | persons liable for alternative minimum tax;

| ● | persons holding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

| ● | persons that actually or constructively own 10% or more of our voting shares;

| ● | persons who acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as consideration; or

| ● | persons holding our Class A Ordinary Shares through partnerships or other pass-through entities.

Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary Shares.

Taxation of Dividends and Other Distributions on our Class A Ordinary Shares

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

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With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the Nasdaq Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change in law after the date of this annual report.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

Taxation of Dispositions of Class A Ordinary Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes.

Passive Foreign Investment Company

A non-U.S. corporation is considered a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year if either:

| ● | at least 75% of its gross income is passive income; or

| ● | at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.

Based on the market price of our Class A Ordinary Shares, the value of our assets and the composition of our assets and income, we believe that we were not a PFIC for our taxable year ended December 31, 2019, 2018 or 2017. However, given the factual nature of the analyses and the lack of guidance, no assurance can be given. We do not expect to be a PFIC for our taxable year ending December 31, 2018. However, because PFIC status is a factual determination for each taxable year which cannot be made until the close of the taxable year, our actual PFIC status will not be determinable until the close of the taxable year and, accordingly, there is no guarantee that we will not be a PFIC for the current taxable year or any future taxable year.

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We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change from year to year. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A Ordinary Shares, our PFIC status will depend in large part on the market price of our Class A Ordinary Shares. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects including the composition of our income and assets in a given year. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. However, if we cease to be a PFIC, you may avoid some of the adverse effects of the PFIC regime by making a “deemed sale” election with respect to the Class A Ordinary Shares.

If we are a PFIC for any taxable year during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

| ● | the excess distribution or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;

| ● | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

| ● | the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if you hold the Class A Ordinary Shares as capital assets.

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the Class A Ordinary Shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of your taxable year over your adjusted basis in such Class A Ordinary Shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the Class A Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on our Class A Ordinary Shares” generally would not apply.

The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Class A Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

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Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Class A Ordinary Shares in any year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed above.

Information Reporting and Backup Withholding

Dividend payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.

Under the Hiring Incentives to Restore Employment Act of 2010, certain United States Holders are required to report information relating to ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary shares. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

10.F. Dividends and paying agents

Not applicable for annual reports on Form 20-F.

10.G. Statement by experts

Not applicable for annual reports on Form 20-F.

10.H. Documents on display

We are subject to the information requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.

10.I. Subsidiary Information

Not applicable.

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ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to interest rate risk primarily relates to excess cash invested in short-term instruments with original maturities of less than a year and long-term held-to-maturity securities with maturities of greater than a year. Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if we have to sell securities that have declined in market value due to changes in interest rates. We have not been, and do not expect to be, exposed to material interest rate risks, and therefore have not used any derivative financial instruments to manage our interest risk exposure.

In fiscal years 2025, 2024 and 2023, we had RMB11.58 million (approximately $1.62 million), RMB12.40 million (approximately $1.71 million), and RMB12.45 million (approximately $1.71 million) of weighted outstanding bank loans, with weighted average effective interest rate of 2.96%, 3.07%, and 4.33% respectively.

As of June 30, 2025, if interest rates increased/decreased by 1%, with all other variables having remained constant, and assuming the amount of bank borrowings outstanding at the end of the year was outstanding for the entire year, profit attributable to equity owners of our company would have been RMB 115,810 (approximately $ 16,166) lower/higher, respectively, mainly as a result of higher/lower interest expense from our short-term borrowings.

Foreign Exchange Risk

Our functional currency is the RMB, and our financial statements are presented in the RMB. Therefore, the change in the value of RMB relative to the U.S. dollar will not affect our financial results reported in the RMB.

However, any significant revaluation of RMB against U.S. dollar may materially the value of, and any dividends payable on, our Class A Ordinary Shares in U.S. dollars in the future. See “Risk Factors — Risks Related to Doing Business in China — Fluctuations in exchange rates could adversely affect the value of our securities.”

Commodity Risk

As a provider of hardware, software, and on-site services, our Company is exposed to the risk of an increase in the price of raw materials. We historically have been able to pass on price increases to customers by virtue of pricing terms that vary with changes in steel prices, but we have not entered into any contract to hedge any specific commodity risk. Moreover, our Company does not purchase or trade on commodity instruments or positions; instead, it purchases commodities for use.

ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

With the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4, this Item 12 is not applicable, as the Company does not have any American Depositary Shares.

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PART II

ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

We do not have any material defaults in the payment of principal, interest, or any installments under a sinking or purchase fund.

ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF PROCEEDS

Material Modifications to the Rights of Security Holders

Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” from our annual report on Form 10-K filed on September 28, 2016 is incorporated herein by reference.

Use of Proceeds

Not applicable.

ITEM 15.CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures.

As of June 30, 2025, our company carried out an evaluation, under the supervision of and with the participation of management, including our Company’s chief executive officer and chief financial officer, of the effectiveness of the design and operation of our Company’s disclosure controls and procedures. Included in this Annual Report on Form 20-F, the chief executive officer and chief financial officer concluded that our Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were ineffective in timely alerting them to information required to be included in the Company’s U.S. Securities and Exchange Commission (the “Commission”) filings.

(b)Management’s annual report on internal control over financial reporting.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

(1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

(2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of its management and directors; and

(3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The Company’s management assessed the effectiveness of its internal control over financial reporting as of June 30, 2025. In making this assessment, management used the 2013 framework set forth in the report entitled Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Our management has implemented and tested our internal control over financial reporting based on these criteria. Based on the assessment and material weakness identified, the Company’s management concluded that, as of June 30, 2025, its internal control over financing reporting was not effective.

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The specific material weaknesses identified by the Company’s management as of June 30, 2025 are described as follows:

We did not have sufficient skilled accounting personnel who are either qualified as Certified Public Accountants in the U.S. or who have received education from U.S. institutions or other educational programs that would provide enough relevant education relating to U.S. GAAP. While our CFO is a U.S. Certified Public Accountant, our controller is not, and they have limited experience with U.S. GAAP. Further, our operating subsidiaries are based in China, and in accordance with PRC laws and regulations, are required to comply with PRC GAAP, rather than U.S. GAAP. Thus, the accounting skills and understanding necessary to fulfill the requirements of U.S. GAAP-based reporting, including the preparation of consolidated financial statements, are inadequate, and determined to be a material weakness.

In addition, we have also identified several material weaknesses in information technology general control (“ITGC”) in the areas of: (1) IT related risk analysis and vulnerability assessment, cybersecurity training; (2) third-party vendor management; (3) system change management and system development management; (4) backup management, disaster recovery and off-site back management; (5) system security & assess (SSA) related risk; (6) segregation of duties and audit logging; and (7) system firewalls set up.

While we have developed the scope of our internal audit function, it has not yet been fully implemented as we have not been able to hire sufficient qualified resources to do so. And due to limited availability of qualified resources, we may not be able to make sufficient hiring within a short period of time.

We have reassessed all of our financial reporting cycles and we are unable to declare effectiveness of our controls as of June 30, 2025 due to sufficient monitoring of our internal controls (lack of self-testing of internal controls) and lack of enough training and adjustment of our internal procedures to provide enough supporting documents as required. Therefore, we determined that the lack of time to evaluate our design and operating effectiveness are material weaknesses. It should be noted, however, that (a) many actions had been undertaken to enhance the control environment during the year; and (b) there are other remedial activities that are scheduled to take place in fiscal year 2025. We have significantly reduced deficiencies of our internal control during this fiscal year, and management will continue to resolve internal control weaknesses and ensure effective internal controls are in place.

As a result, the Company has developed remedial actions and enhanced schedules to strengthen its accounting and financial reporting functions as well as the internal audit function. Such plan will require the hiring of additional resources and the deployment of other corporate resources for the accounting department in relation to the financial reporting process and internal audit department. Such additional resources will include the establishment of a work force dedicated to the task of correcting past financial irregularities and maintaining correct financial reporting on an on-going basis. To strengthen the Company’s internal control over financial reporting, the Company needs to engage outside consultants that are skilled in SEC reporting and Section 404 compliance to assist in the implementation of the following remedial actions as of the date of this report:

| ● | Continuous assessment of our internal procedure of operation as we develop new business and new subsidiaries;

| ● | Development and formalization of key accounting and financial reporting policies and procedures;

| ● | Identification and documentation of key controls by business process;

| ● | Enhancement of existing disclosures policies and procedures;

| ● | Formalization of periodic communication between management and the audit committee; and

| ● | Implementation of policies and procedures intended to enhance management monitoring and oversight by the Audit Committee.

In addition to the foregoing efforts, the Company expects to implement the following remedial actions during fiscal year 2026:

| ● | Formalization of a periodic staff training program to enhance their awareness of the key internal control activities.

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| ● | Develop a comprehensive training and development plan, for our finance, accounting and internal audit personnel, including our Chief Financial Officer, Controller, and others, in the principles and rules of U.S. GAAP, SEC reporting requirements and the application thereof.

| ● | Continue to improve the Company’s self-developed system.

| ● | Hire a full-time employee who possesses the requisite U.S. GAAP experience and education.

| ● | Monitoring of internal controls by performing self-testing of various key controls.

| ● | To hire third party/professional firm to establish the basic of the Company’s IT strategy and IT control system.

Despite the material weaknesses reported above, our management believes that our consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

(c)Attestation report of the registered public accounting firm.

Not applicable.

(d)Changes in internal control over financial reporting.

Management continues to focus on internal control over financial reporting. As of June 30, 2025, the Company has completed certain documentation of our internal controls and will be implementing the following remedial initiatives:

| ● | To engage a professional organization to assist the company revamp our internal controls and implementation of our internal control over financial report in the coming year;

| ● | Design and implement an ongoing company-wide training program regarding our internal controls, with particular emphasis on our finance and accounting staff to better cooperating with other operation department to improve the accuracy and reporting efficiency of financial statements under the trend of operation and finance integration;

| ● | Implement a control process over business acquisition and use or disposition of our assets that could have a material effect on the financial statements;

| ● | Developing enhanced risk assessment procedures and controls related to changes in IT systems; and developing a training program for internal control staff to address ITGC principals and requirements, with a focus on issues related to user access and change-management over IT systems impacting financial reporting; and

| ● | Developing a training program for management and related staff to address ITGC principals and requirements, with a focus on issues related to user access and change-management over IT systems impacting financial reporting.

ITEM 15T.CONTROLS AND PROCEDURES

Not applicable.

​

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​

ITEM 16.[RESERVED]

ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT

The Company’s board of directors has determined that Mr. Nelson Wong qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market standards. The Company’s board of directors has also determined that Mr. Wong and the other members of the Audit Committee are all “independent” in accordance with the applicable Nasdaq Capital Market standards.

ITEM 16B.CODE OF ETHICS

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, officers, employees and advisors. The Code of Ethics is attached it as an exhibit to this annual report. We have also posted a copy of our code of business conduct and ethics on our website at www.recon.cn.

ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES

Friedman LLP was appointed by the Company to serve as its independent registered public accounting firm for fiscal year 2022. Effective September 1, 2022, Friedman combined with Marcum LLP and continued to operate as an independent registered public accounting firm. Friedman continued to serve as the Company’s independent registered public accounting firm through February 1, 2023.

On February 1, 2023, the Audit Committee of the Company approved the engagement of Marcum Asia to serve as the independent registered public accounting firm for fiscal year 2023. On August 22, 2023, Marcum Asia has been dismissed by the Audit Committee of the Company before completing the audit of fiscal year 2023.

Enrome LLP was appointed by the Company to serve as its independent registered public accounting firm for fiscal years 2023, 2024 and 2025.

Fees Paid To Independent Registered Public Accounting Firm

Audit Fees

During fiscal year ended June 30, 2024, Enrome LLP’s audit fees were $191,500.

During fiscal year ended June 30, 2025, Enrome LLP’s audit fees were $215,000.

Audit-Related Fees

The Company has not incurred any audit-related fees from Enrome LLP for audit-related services in fiscal years 2024 and 2025.

Tax Fees

The Company has not incurred any tax fees from Enrome LLP for tax services in fiscal years 2025 and 2024.

All Other Fees

The Company has not incurred any other fees from Enrome LLP other fees in fiscal years 2025 and 2024.

Audit Committee Pre-Approval Policies

Before Enrome LLP was engaged by the Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered by Enrome LLP have been so approved.

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Percentage of Hours

The percentage of hours expended on the principal accountants’ engagement to audit our consolidated financial statements for fiscal year 2025 that were attributed to work performed by persons other than Enrome LLP’s full-time permanent employees was less than 5%.

ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended June 30, 2025.

ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

On August 22, 2023, we appointed Enrome LLP (“Enrome”) as its independent registered public accounting firm, effective on the same day. Enrome replaced Marcum Asia, our former independent registered public accounting firm, which we dismissed on August 22, 2023. The appointment of Enrome was made after careful consideration and evaluation process by the Company and has been approved by the audit committee of our board of directors. Our decision to make this change was not the result of any disagreement between the Company and Marcum Asia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

During the two most recent fiscal years ended June 30, 2021 and 2022 and any subsequent interim period prior to engaging Enrome, neither the Company nor anyone on its behalf consulted Enrome regarding either (i) the application of accounting principles to any proposed or completed transaction, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Enrome concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions to Item 16F of Form 20-F) or any reportable events as described in Item 16F(a)(1)(v) of Form 20-F.

Previously, on February 7, 2023, the Company’s board of directors determined and ratified the audit committee’s approval of the proposed appointment of Marcum Asia as the Company’s independent registered public accounting firm. The services previously provided by Friedman were then provided by Marcum Asia up until its dismissal on August 22, 2023.

The Company was notified by Friedman, the Company’s then independent registered public accounting firm, that effective September 1, 2022, Friedman combined with Marcum LLP and continued to operate as an independent registered public accounting firm. Friedman continued to serve as the Company’s independent registered public accounting firm through February 1, 2023. On February 1, 2023, the audit committee approved the engagement of Marcum Asia to serve as the independent registered public accounting firm of the Company.

Friedman’s reports on the consolidated financial statements of the Company for the fiscal years ended June 30, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, scope of accounting principles. During the Company’s two most recent fiscal years and through February 1, 2023, there were no disagreements with Friedman on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of Friedman, would have caused Friedman to make reference to such matters in their reports. There were no reportable events (as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the two fiscal years ended June 30, 2022 and 2021, or in the subsequent period through February 1, 2023.

We provided Marcum Asia and Friedman with a copy of the above statements and requested that Marcum Asia furnish us with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of Marcum Asia’s letter dated August 25, 2023, to the SEC, regarding the disclosures herein under the heading “Change in Registrant’s Certifying Accountant” is filed as Exhibit 16.1 to this annual report. A copy of Friedman’s letter, dated February 8, 2023, is filed as Exhibit 16.1 to the Form 6-K filed on February 8, 2023.

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ITEM 16G.CORPORATE GOVERNANCE

We are incorporated in the Cayman Islands and our corporate governance practices are governed by applicable Cayman Islands law. In addition, because our Class A Ordinary Shares are listed on The Nasdaq Capital Market, we are subject to Nasdaq’s corporate governance requirements.

As noted above in the risk factor titled “We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.”, The Nasdaq Capital Market allows foreign private issuers like our Company to opt to follow rules that apply in the issuer’s home country instead of a given Nasdaq rule. NASDAQ Listing Rule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that such foreign private issuer discloses in its annual report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home country practice followed in lieu of such requirement.

NASDAQ Rule 5635 requires shareholder approval for the issuance of securities: (i) in connection with the acquisition of stock or assets of another Company; (ii) when it would result in a change of control; (iii) when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants; or (iv) in connection with a transaction other than a public offering involving the sale, issuance or potential issuance of common stock at a price less than market value. Our Cayman Islands counsel, Campbells, has provided a letter to NASDAQ certifying that under Cayman Islands law and our Memorandum and Articles of Association, we are not prohibited from issuing shares without first obtaining shareholder approval where such issuance of securities otherwise requires shareholder approval under NASDAQ Rule 5635. Accordingly, we intend to comply with the requirements of Cayman Islands law in determining whether shareholder approval is required.

ITEM 16H.MINE SAFETY DISCLOSURE

Not applicable.

ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Our company is incorporated in the Cayman Islands. The VIEs and other operating entities being consolidated in our financial statements, or the consolidated foreign operating entities, are incorporated or otherwise organized in the PRC, Hong Kong, or the Cayman Islands.

To the best of our knowledge, no governmental entity in any of the PRC, Hong Kong, or the Cayman Islands owns any shares of our company or any of the consolidated foreign operating entities.

To the best of our knowledge, no governmental entity in the PRC has a controlling financial interest with respect to our company or any of the consolidated foreign operating entities.

No member of the board of directors of our company or any of the consolidated foreign operating entities is any official of the Chinese Communist Party.

Neither the memorandum and articles of association of our company nor the articles of incorporation (or equivalent organizing document) of any of the consolidated foreign operating entities contains any charter of the Chinese Communist Party.

ITEM 16J.INSIDER TRADING POLICIES

(a) We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to us.

(b) Please see our Insider Trading Policy of the Company, which has been filed as Exhibit 11.2 to this annual report.

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ITEM 16K.CYBERSECURITY

Risk management and strategy

As of the date of this annual report, we have not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, our business strategy, results of operations, or financial condition; such risks are referred to below as “material risks from cybersecurity threats”.

We identify, assess and manage any material risks from cybersecurity threats through the following countermeasures:

| ● | Cybersecurity threat defense system that addresses both internal and external threats;

| ● | Network, host and application security; and

| ● | Sensitive information protection methods, including:

| o | Technical safeguards;

| o | Procedural requirements;

| o | Monitoring program on our corporate network;

| o | Continuous testing of our security posture both internally and with outside vendors;

| o | Incident response program;

| o | Security system effectiveness reviews with reference to applicable security standards; and

| o | Regular cybersecurity awareness training for employees.

Our abovementioned countermeasures for identifying, assessing and managing any material risks from cybersecurity threats, have been integrated into our overall risk management system.

We do not engage any assessors, consultants, auditors, or other third parties in connection with any of our Cybersecurity Risk Management Processes.

Governance

The audit committee of our board of directors is ultimately responsible for the oversight of risks from cybersecurity threats.

​

Our board of directors and its audit committee have delegated an important leadership role in assessing and managing any material risks from cybersecurity threats to Mr. Rui Liu, who heads and oversees FGS. Mr. Liu is responsible for ensuring that the cybersecurity team has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed, implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. Our cybersecurity team is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs. Our cybersecurity programs are under the direction of Mr. Liu who receives reports from our cybersecurity team and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our cybersecurity team has relevant academic backgrounds and possesses extensive knowledge in cybersecurity risk management. Our cybersecurity team, regularly update and engages in discussions with Mr. Liu on the company’s cybersecurity programs, material cybersecurity risks, and mitigation strategies.

​

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PART III

ITEM 17.FINANCIAL STATEMENTS

See Item 18.

ITEM 18.FINANCIAL STATEMENTS

Our consolidated financial statements are included at the end of this annual report, beginning with page F-1.

​

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ITEM 19.EXHIBITS

​

Exhibit No. |  | Description of Exhibit |  | Included |  | Form |  | Filing Date
1.1.1 |  | Second Amended and Restated Articles of Association of the Registrant |  | By Reference |  | S-3 |  | 2016-09-19
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1.1.2 |  | Second Amended and Restated Memorandum of Association of the Registrant |  | By Reference |  | S-3 |  | 2016-09-19
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1.1.3 |  | Third Amended and Restated Articles of Association of the Registrant |  | By Reference |  | 6-K |  | 2021-04-06
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1.1.4 |  | Third Amended and Restated Memorandum of Association of the Registrant |  | By Reference |  | 6-K |  | 2021-04-06
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1.1.5 | ​ | Fourth Amended and Restated Articles of Association of the Registrant | ​ | By Reference | ​ | 20-F | ​ | 2024-10-30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
1.1.6 | ​ | Fourth Amended and Restated Memorandum of Association of the Registrant | ​ | By Reference | ​ | 20-F | ​ | 2024-10-30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.1 |  | Specimen Share Certificate |  | By Reference |  | 6-K |  | 2020-01-17
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.2 | ​ | Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 | ​ | Herewith | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.3 | ​ | Form of Convertible Note | ​ | By reference | ​ | 6-K | ​ | 2020-11-27
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.4 | ​ | Form of Pre-Funded Warrant | ​ | By Reference | ​ | 6-K | ​ | 2021-06-16
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.5 | ​ | Form of Warrant | ​ | By reference | ​ | 6-K | ​ | 2021-06-16
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2.6 |  | Specimen Share Certificate |  | By Reference |  | 6-K |  | 2021-04-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.1 |  | 2009 Equity Incentive Plan |  | By Reference |  | S-1/A |  | 2009-06-10
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.2 |  | 2015 Equity Incentive Plan |  | By Reference |  | 10-K |  | 2016-09-28
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.3 | ​ | 2021 Equity Incentive Plan | ​ | By Reference | ​ | 6-K | ​ | 2021-04-06
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.4 | ​ | 2024 Equity Incentive Plan | ​ | By Reference | ​ | 6-K | ​ | 2024-04-02
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.5 | ​ | Share Acquisition Agreement, dated June 3, 2021 | ​ | By Reference | ​ | 6-K | ​ | 2021-06-04
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.6 | ​ | Placement Agency Agreement, dated June 14, 2021, between the Company and Maxim Group LLC | ​ | By Reference | ​ | 6-K | ​ | 2021-06-16
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.7 | ​ | Form of Securities Purchase Agreement dated June 14, 2021, between the Company and the Purchasers | ​ | By Reference | ​ | 6-K | ​ | 2021-06-16
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.8 | ​ | Form of Securities Purchase Agreement dated March 15, 2023, between the Company and the Purchasers | ​ | By Reference | ​ | 6-K | ​ | 2023-03-20
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
4.9 | ​ | Form of Securities Purchase Agreement dated January 31, 2024, between the Company and the Purchasers | ​ | By Reference | ​ | 6-K | ​ | 2024-02-05
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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4.10 | ​ | Form of Warrant Purchase Agreement dated December 14, 2023, between the company and certain investors | ​ | By Reference | ​ | 6-K | ​ | 2023-12-15
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
8.1 | ​ | List of subsidiaries | ​ | Herewith | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.1 |  | Translation of Exclusive Technical Consulting Service Agreement between Recon Technology (Jining) Co., Ltd. and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.2 |  | Translation of Amended and Restated Power of Attorney dated July 10, 2025 for rights of Chen Guangqiang in Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.3 |  | Translation of Amended and Restated Power of Attorney dated July 10, 2025 for rights of Yin Shenping in Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.4 |  | Translation of Power of Attorney for rights of Li Hongqi in Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.5 |  | Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement between Recon Hengda Technology (Beijing) Co. Ltd., Chen Guangqiang and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.6 |  | Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement between Recon Hengda Technology (Beijing) Co. Ltd., Yin Shenping and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.7 |  | Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Li Hongqi and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.8 |  | Translation of Amended and Restated Equity Interest Pledge Agreement between Recon Hengda Technology (Beijing) Co., Ltd., Chen Guangqiang and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.9 |  | Translation of Amended and Restated Equity Interest Pledge Agreement between Recon Hengda Technology (Beijing) Co., Ltd., Yin Shenping and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.10 |  | Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Li Hongqi and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.11 |  | Translation of Amended and Restated Exclusive Consulting Service Agreement between Recon Hengda Technology (Beijing) Co., Ltd. and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.12 |  | Translation of Power of Attorney for rights of Chen Guangqiang in Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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10.13 |  | Translation of Amended and Restated Power of Attorney dated July 10, 2025 for rights of Yin Shenping in Nanjing Recon Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.14 |  | Translation of Power of Attorney for rights of Li Hongqi in Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.15 | ​ | Translation of Amended and Restated Power of Attorney dated July 10, 2025 of Ying Wu Yan for rights in Nanjing Recon Technology Co., Ltd. | ​ | By Reference | ​ | 6-K | ​ | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.16 |  | Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Chen Guangqiang and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.17 |  | Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Yin Shenping and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.18 |  | Translation of Exclusive Equity Interest Purchase Agreement between Recon Technology (Jining) Co. Ltd., Li Hongqi and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.19 | ​ | Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement dated July 10, 2025 between Recon Hengda Technology (Beijing) Co., Ltd., Ying Wu Yan, and Nanjing Recon Technology Co., Ltd | ​ | By Reference | ​ | 6-K | ​ | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.20 |  | Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Chen Guangqiang and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.21 |  | Translation of Amended and Restated Equity Interest Pledge Agreement between Recon Hengda Technology (Beijing) Co., Ltd., Yin Shenping and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.22 |  | Translation of Equity Interest Pledge Agreement between Recon Technology (Jining) Co., Ltd., Li Hongqi and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | S-1/A |  | 2008-08-12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.23 |  | Translation of the Investment Agreement between Recon Technology, Ltd., Future Gas Station (Beijing) Technology, Ltd. and six individuals |  | By Reference |  | 6-K/A |  | 2018-08-28
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.24 |  | Translation of the Supplemental Agreement between Recon Technology, Ltd., Future Gas Station (Beijing) Technology, Ltd. and six individuals |  | By Reference |  | 6-K/A |  | 2018-08-28
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.25 |  | Translation of Exclusive Technical Consulting Service Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2019-04-24
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.26 |  | Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement dated July 10, 2025 among Recon Hengda Technology (Beijing) Co., Ltd., Beijing BHD Petroleum Technology Co., Ltd. and Shenping Yin |  | By Reference |  | 6-K |  | 2025-08-29

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.27 |  | Translation of Amended and Restated Equity Interest Pledge Agreement dated July 10, 2025 between Recon Hengda Technology (Beijing) Co., Ltd. and Guangqiang Chen about Beijing BHD Petroleum Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.28 |  | Translation of Amended and Restated Exclusive Technical Consulting Service Agreement dated July 10, 2025 between Recon Hengda Technology (Beijing) Co., Ltd. and Nanjing Recon Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2025-08-29
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.29 |  | Translation of Amended and Restated Exclusive Equity Interest Purchase Agreement dated April 1, 2019 among Recon Hengda Technology (Beijing) Co., Ltd., Nanjing Recon Technology Co., Ltd. and Shenping Yin, Guangqiang Chen and Degui Zhai |  | By Reference |  | 6-K |  | 2019-04-24
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.30 |  | Translation of Amended and Restated Equity Interest Pledge Agreement dated April 1, 2019 between Recon Hengda Technology (Beijing) Co., Ltd. and Shenping Yin, Guangqiang Chen and Degui Zhai about Nanjing Recon Technology Co., Ltd. |  | By Reference |  | 6-K |  | 2019-04-24
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.31 |  | Translation of Financial Support Commitment Letter from Two Major Shareholders dated August 31, 2019 |  | By Reference |  | 20-F |  | 2019-10-01
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.32 |  | Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated September 24, 2019 |  | By Reference |  | 20-F |  | 2019-10-01
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.33 |  | Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated March 17, 2020 |  | By Reference |  | 6-K |  | 2020-03-18
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.34 | ​ | Translation of Supplemental Agreement to the Investment Agreement with respect to Future Gas Station (Beijing) Technology Co., Ltd. dated February 4, 2021 | ​ | By reference | ​ | 6-K | ​ | 2021-02-08
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
10.35 | ​ | Translation of Jindu Industrial Park Special Fund Loan Agreement dated October 13, 2025 | ​ | Herewith | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
11.1 |  | Code of Ethics of the Company |  | By Reference |  | 10-K |  | 2009-09-28
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
11.2 | ​ | Insider Trading Policy of the Company | ​ | By Reference | ​ | 20-F | ​ | 2025-10-30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
12.1 |  | Certification of Chief Executive Officer Required by Rule 13a-14(a) |  | Herewith |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
12.2 |  | Certification of Chief Financial Officer Required by Rule 13a-14(a) |  | Herewith |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
13.1 |  | Certification of Chief Executive Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code |  | Herewith |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
13.2 |  | Certification of Chief Financial Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code |  | Herewith |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
15.1 | ​ | Consent of Enrome LLP | ​ | Herewith | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

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16.1 | ​ | Letter of Marcum Asia CPAs LLP to the U.S. Securities and Exchange Commission dated August 25, 2023 | ​ | By reference | ​ | 6-K | ​ | 2023-08-25
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
16.2 | ​ | Letter of Friedman LLP to the U.S. Securities and Exchange Commission dated February 8, 2023 | ​ | By reference | ​ | 6-K | ​ | 2023-02-08
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
97.1 | ​ | Clawback Policy | ​ | By reference | ​ | 20-F | ​ | 2024-10-30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
99.1 | ​ | Recon Technology, Ltd Reports Financial Year Results for Fiscal Year 2024 | ​ | Herewith | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.INS |  | Inline XBRL Instance Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.LAB |  | Inline XBRL Taxonomy Extension Labels Linkbase Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
104 | ​ | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) | ​ | ​ | ​ | ​ | ​ | ​

​

​

114

Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

|  | Recon Technology, Ltd.
| By: | /s/ Yin Shenping
|  | Name: Yin Shenping
|  | Title: Chief Executive Officer

​

Date: | October 15, 2025 | ​ | ​

​

​

​

115

Table of Contents

RECON TECHNOLOGY, LTD

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

​

Contents | PAGE
Report of Independent Registered Public Accounting Firm (PCAOB ID: 6907) | F-1
​ | ​
Consolidated Balance Sheets as of June 30, 2024 and 2025 | F-2
Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2023, 2024 and 2025 | F-3
Consolidated Statements of Changes in Shareholders’ Equity for the years ended June 30, 2023, 2024 and 2025 | F-4
Consolidated Statements of Cash Flows for the years ended June 30, 2023, 2024 and 2025 | F-5
Notes to the Consolidated Financial Statements | F-6

​

​

​

​

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

​

To the Shareholders and Board of Directors of

Recon Technology, Ltd.

​

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Recon Technology, Ltd. and its subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity, and cash flows for the years ended June 30, 2025, 2024, and 2023, the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for the years ended June 30, 2025, 2024, and 2023, in conformity with accounting principles generally accepted in the United States of America (“U.S GAAP”).

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Enrome LLP

We have served as the Company’s auditor since 2023.

Singapore

October 15, 2025

​

​

F-1

Table of Contents

RECON TECHNOLOGY, LTD

CONSOLIDATED BALANCE SHEETS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June, 30 | ​ | As of June, 30 | ​ | As of June, 30
​ |  | 2024 |  | 2025 |  | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
ASSETS | ​ | ​ |  | ​ | ​ |  | ​ | ​ |
Current assets | ​ | ​ |  | ​ | ​ |  | ​ | ​ |
Cash | ​ | ¥ | 109,991,674 | ​ | ¥ | 98,874,577 | ​ | $ | 13,802,361
Restricted cash | ​ | ​ | 848,936 | ​ | ​ | 8,204 | ​ | ​ | 1,147
Short-term investments | ​ | ​ | 88,091,794 | ​ | ​ | 3,599,211 | ​ | ​ | 502,430
Notes receivable | ​ | ​ | 1,341,820 | ​ | ​ | — | ​ |  | —
Accounts receivable, net | ​ | ​ | 38,631,762 | ​ | ​ | 35,852,484 | ​ |  | 5,004,814
Inventories, net | ​ | ​ | 1,128,912 | ​ | ​ | 1,344,588 | ​ |  | 187,697
Other receivables, net | ​ | ​ | 3,352,052 | ​ | ​ | 3,760,881 | ​ |  | 524,999
Other receivables - related parties | ​ | ​ | 275,976 | ​ | ​ | 67,976 | ​ | ​ | 9,489
Loans to third parties-short term | ​ | ​ | 208,928,370 | ​ | ​ | 141,564,073 | ​ | ​ | 19,761,583
Purchase advances, net | ​ | ​ | 5,156,550 | ​ | ​ | 14,619,556 | ​ |  | 2,040,811
Contract costs, net | ​ | ​ | 48,335,817 | ​ | ​ | 53,547,408 | ​ | ​ | 7,474,930
Prepaid expenses | ​ | ​ | 401,586 | ​ | ​ | 389,216 | ​ |  | 54,330
Deferred offering cost | ​ | ​ | — | ​ | ​ | 2,529,724 | ​ | ​ | 353,136
Total Current Assets | ​ | ​ | 506,485,249 | ​ | ​ | 356,157,898 | ​ |  | 49,717,727
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 22,137,940 | ​ | ​ | 19,986,635 | ​ |  | 2,790,027
Construction in progress | ​ | ​ | 219,132 | ​ | ​ | 12,000,900 | ​ | ​ | 1,675,261
Loans to third parties-long term | ​ | ​ | — | ​ | ​ | 118,500,000 | ​ | ​ | 16,541,962
Operating lease right-of-use assets, net (including ¥1,769,840 and ¥696,851($97,277) from a related party as of June 30, 2024 and June 30, 2025, respectively) | ​ | ​ | 23,547,193 | ​ | ​ | 18,975,692 | ​ | ​ | 2,648,904
Total Assets | ​ | ¥ | 552,389,514 | ​ | ¥ | 525,621,125 | ​ | $ | 73,373,881
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES AND EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​
Short-term bank loans | ​ | ¥ | 12,425,959 | ​ | ¥ | 11,582,336 | ​ | $ | 1,616,832
Accounts payable | ​ | ​ | 10,187,518 | ​ | ​ | 19,398,669 | ​ | ​ | 2,707,950
Other payables | ​ | ​ | 2,769,685 | ​ | ​ | 6,154,889 | ​ |  | 859,189
Other payable- related parties | ​ | ​ | 2,299,069 | ​ | ​ | 2,927,377 | ​ |  | 408,646
Contract liabilities | ​ | ​ | 1,820,481 | ​ | ​ | 4,719,255 | ​ | ​ | 658,783
Accrued payroll and employees’ welfare | ​ | ​ | 3,237,164 | ​ | ​ | 3,212,227 | ​ |  | 448,410
Taxes payable | ​ | ​ | 993,365 | ​ | ​ | 795,629 | ​ |  | 111,066
Short-term borrowings - related parties | ​ | ​ | 10,002,875 | ​ | ​ | 10,017,250 | ​ |  | 1,398,354
Operating lease liabilities - current (including ¥1,775,114 and ¥355,601 ($49,640) from related parties as of June 30, 2024 and June 30, 2025, respectively) | ​ | ​ | 3,741,247 | ​ | ​ | 1,761,231 | ​ | ​ | 245,858
Total Current Liabilities | ​ | ​ | 47,477,363 | ​ | ​ | 60,568,863 | ​ |  | 8,455,088
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease liabilities - non-current (including ¥335,976 and nil from related parties as of June 30, 2024 and June 30, 2025, respectively) | ​ | ​ | 3,971,285 | ​ | ​ | 1,081,827 | ​ | ​ | 151,017
Long-term borrowings - related party | ​ | ​ | 10,000,000 | ​ | ​ | 10,000,000 | ​ | ​ | 1,395,946
Warrant liability - non-current | ​ | ​ | 6,969 | ​ | ​ | 688 | ​ | ​ | 96
Total Liabilities | ​ | ​ | 61,455,617 | ​ | ​ | 71,651,378 | ​ |  | 10,002,147
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commitments and Contingencies | ​ | ​ |  | ​ | ​ |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shareholders’ Equity | ​ | ​ |  | ​ | ​ |  | ​ |  |
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 7,987,959 shares and 10,627,426 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively | ​ | ​ | 99,634 | ​ | ​ | 101,548 | ​ | ​ | 14,176
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 20,000,000 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively | ​ | ​ | 4,693 | ​ | ​ | 14,038 | ​ | ​ | 1,960
Additional paid-in capital* | ​ | ​ | 681,476,717 | ​ | ​ | 692,569,747 | ​ | ​ | 96,679,009
Statutory reserve | ​ | ​ | 4,148,929 | ​ | ​ | 4,148,929 | ​ |  | 579,168
Accumulated deficit | ​ | ​ | (220,312,085) | ​ | ​ | (262,900,639) | ​ |  | (36,699,514)
Accumulated other comprehensive income | ​ | ​ | 37,136,649 | ​ | ​ | 33,493,895 | ​ |  | 4,675,567
Total Recon Technology, Ltd’ equity | ​ | ​ | 502,554,537 | ​ | ​ | 467,427,518 | ​ |  | 65,250,366
Non-controlling interests | ​ | ​ | (11,620,640) | ​ | ​ | (13,457,771) | ​ |  | (1,878,632)
Total shareholders’ equity | ​ | ​ | 490,933,897 | ​ | ​ | 453,969,747 | ​ |  | 63,371,734
Total Liabilities and Shareholders’ Equity | ​ | ¥ | 552,389,514 | ​ | ¥ | 525,621,125 | ​ | $ | 73,373,881

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

The accompanying notes are an integral part of these consolidated financial statements.

​

F-2

Table of Contents

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the years ended
​ | ​ | June 30,
​ |  | 2023 |  | 2024 |  | 2025 |  | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenue | ​ | ¥ | 67,114,378 | ​ | ¥ | 68,854,280 | ​ | ​ | 66,285,032 | ​ | ​ | 9,253,034
Cost of revenue | ​ | ​ | 48,247,395 | ​ | ​ | 47,976,836 | ​ | ​ | 51,044,495 | ​ | ​ | 7,125,537
Gross profit |  | ​ | 18,866,983 |  | ​ | 20,877,444 |  | ​ | 15,240,537 |  | ​ | 2,127,497
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Selling and distribution expenses |  | ​ | 10,638,978 |  | ​ | 10,374,388 |  | ​ | 9,343,480 |  | ​ | 1,304,300
General and administrative expenses |  | ​ | 76,784,396 |  | ​ | 63,765,583 |  | ​ | 49,645,680 |  | ​ | 6,930,270
Allowance for (net recovery of) credit losses |  | ​ | (9,038,985) |  | ​ | 4,086,505 |  | ​ | (2,856,803) |  | ​ | (398,794)
Impairment loss of property and equipment and other long-lived assets | ​ | ​ | 1,009,124 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Research and development expenses |  | ​ | 8,806,205 |  | ​ | 14,288,879 |  | ​ | 16,427,892 |  | ​ | 2,293,245
Operating expenses |  | ​ | 88,199,718 |  | ​ | 92,515,355 |  | ​ | 72,560,249 |  | ​ | 10,129,021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loss from operations |  | ​ | (69,332,735) |  | ​ | (71,637,911) |  | ​ | (57,319,712) |  | ​ | (8,001,524)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other income (expenses) |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
Subsidy income |  | ​ | 325,425 |  | ​ | 131,428 |  | ​ | 85,762 |  | ​ | 11,972
Interest income |  | ​ | 13,603,487 |  | ​ | 22,897,763 |  | ​ | 13,390,041 |  | ​ | 1,869,178
Interest expense |  | ​ | (2,514,850) |  | ​ | (1,070,449) |  | ​ | (1,110,984) |  | ​ | (155,087)
Loss (gain) in fair value changes of warrants liability | ​ | ​ | 6,116,000 | ​ | ​ | (933,995) | ​ | ​ | 6,226 | ​ | ​ | 869
Foreign exchange transaction gain (loss) |  | ​ | 241,652 |  | ​ | (881,695) |  | ​ | 952,815 |  | ​ | 133,008
Impairment loss on goodwill and intangible assets | ​ | ​ | (9,980,002) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Other income |  | ​ | 82,970 |  | ​ | 59,049 |  | ​ | 296,155 |  | ​ | 41,342
Other income, net |  | ​ | 7,874,682 |  | ​ | 20,202,101 |  | ​ | 13,620,015 |  | ​ | 1,901,282
Loss before income tax |  | ​ | (61,458,053) |  | ​ | (51,435,810) |  | ​ | (43,699,697) |  | ​ | (6,100,242)
Income tax expenses |  | ​ | 18,339 |  | ​ | 30 |  | ​ | 1,580 |  | ​ | 221
Net loss |  | ​ | (61,476,392) |  | ​ | (51,435,840) |  | ​ | (43,701,277) |  | ​ | (6,100,463)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Less: Net loss attributable to non-controlling interests |  | ​ | (2,309,091) |  | ​ | (1,564,581) |  | ​ | (1,112,723) |  | ​ | (155,330)
Net loss attributable to Recon Technology, Ltd |  | ¥ | (59,167,301) |  | ¥ | (49,871,259) |  | ¥ | (42,588,554) | ​ | $ | (5,945,133)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Comprehensive loss |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​
Net loss |  | ​ | (61,476,392) |  | ​ | (51,435,840) |  | ​ | (43,701,277) | ​ | ​ | (6,100,463)
Foreign currency translation adjustment |  | ​ | 23,819,712 |  | ​ | 2,009,476 |  | ​ | (3,642,754) | ​ |  | (508,509)
Comprehensive loss |  | ​ | (37,656,680) |  | ​ | (49,426,364) |  | ​ | (47,344,031) | ​ |  | (6,608,972)
Less: Comprehensive loss attributable to non- controlling interests |  | ​ | (2,309,091) |  | ​ | (1,564,581) |  | ​ | (1,112,723) | ​ |  | (155,330)
Comprehensive loss attributable to Recon Technology, Ltd |  | ¥ | (35,347,589) |  | ¥ | (47,861,783) |  | ¥ | (46,231,308) | ​ | $ | (6,453,642)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loss per share - basic and diluted* | ​ | ¥ | (27.43) | ​ | ¥ | (9.88) | ​ | ¥ | (4.68) | ​ | $ | (0.65)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted - average shares -basic and diluted* | ​ | ​ | 2,157,158 | ​ | ​ | 5,048,952 | ​ | ​ | 9,094,902 | ​ | ​ | 9,094,902

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

The accompanying notes are an integral part of these consolidated financial statements.

​

​

F-3

Table of Contents

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Paid-in | ​ | Statutory | ​ | Accumulated | ​ | Comprehensive | ​ | Shareholders’ | ​ | Non-controlling | ​ | Total | ​ | Total
​ |  | Ordinary Shares |  | Capital* |  | Reserve |  | deficit |  | income |  | Equity |  | Interest |  | Equity |  | Equity
​ | ​ | Number of | ​ | ​ | ​ | ​ | Number of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Class A | ​ | Amount | ​ | Class B | ​ | Amount | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Shares* | ​ | (RMB)* | ​ | Shares | ​ | (RMB)* | ​ | (RMB) | ​ | (RMB) | ​ | (RMB) | ​ | (RMB) | ​ | (RMB) | ​ | (RMB) | ​ | (RMB) | ​ | (US Dollars)
​ | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance, as of June 30, 2022 |  | 1,704,766 | ​ | ​ | 19,461 | ​ | 4,100,000 | ​ | ​ | 2,604 | ​ | ​ | 516,426,799 | ​ | ​ | 4,148,929 | ​ | ​ | (111,273,525) | ​ | ​ | 11,307,461 | ​ | ​ | 420,631,729 | ​ | ​ | (7,746,968) | ​ | ​ | 412,884,761 | ​ | ​ | 57,636,491
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stock issuance |  | 490,417 | ​ | ​ | 6,091 | ​ | — | ​ | ​ | — | ​ | ​ | 28,168,902 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 28,174,993 | ​ | ​ | — | ​ | ​ | 28,174,993 | ​ | ​ | 3,933,077
Restricted shares issued for services | ​ | 55,556 | ​ | ​ | 690 | ​ | — | ​ | ​ | — | ​ | ​ | 5,805,150 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,805,840 | ​ | ​ | — | ​ | ​ | 5,805,840 | ​ | ​ | 810,464
Proceeds from Pre-Funded warrants | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 3,750,282 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,750,282 | ​ | ​ | — | ​ | ​ | 3,750,282 | ​ | ​ | 523,519
Restricted shares issued for management | ​ | 55,556 | ​ | ​ | 690 | ​ | 3,000,000 | ​ | ​ | 2,089 | ​ | ​ | 26,188,928 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 26,191,707 | ​ | ​ | — | ​ | ​ | 26,191,707 | ​ | ​ | 3,656,221
Net loss for the year | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (59,167,301) | ​ | ​ | — | ​ | ​ | (59,167,301) | ​ | ​ | (2,309,091) | ​ | ​ | (61,476,392) | ​ | ​ | (8,581,773)
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 23,819,712 | ​ | ​ | 23,819,712 | ​ | ​ | — | ​ | ​ | 23,819,712 | ​ | ​ | 3,325,104
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance, as of June 30, 2023 |  | 2,306,295 | ​ | ¥ | 26,932 | ​ | 7,100,000 | ​ | ¥ | 4,693 | ​ | ¥ | 580,340,061 | ​ | ¥ | 4,148,929 | ​ | ¥ | (170,440,826) | ​ | ¥ | 35,127,173 | ​ | ¥ | 449,206,962 | ​ | ¥ | (10,056,059) | ​ | ¥ | 439,150,903 | ​ | $ | 61,303,103
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stock issuance | ​ | 5,555,559 | ​ | ​ | 71,799 | ​ | — | ​ | ​ | — | ​ | ​ | 77,639,734 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 77,711,533 | ​ | ​ | — | ​ | ​ | 77,711,533 | ​ | ​ | 10,848,112
Restricted shares issued for services | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 1,070,143 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,070,143 | ​ | ​ | — | ​ | ​ | 1,070,143 | ​ | ​ | 149,386
Proceeds from Pre-Funded warrants | ​ | 65,278 | ​ | ​ | 859 | ​ | — | ​ | ​ | — | ​ | ​ | (859) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Restricted shares issued for management | ​ | 60,827 | ​ | ​ | 44 | ​ | — | ​ | ​ | — | ​ | ​ | 22,427,638 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 22,427,682 | ​ | ​ | — | ​ | ​ | 22,427,682 | ​ | ​ | 3,130,784
Net loss for the year | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (49,871,259) | ​ | ​ | — | ​ | ​ | (49,871,259) | ​ | ​ | (1,564,581) | ​ | ​ | (51,435,840) | ​ | ​ | (7,180,166)
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,009,476 | ​ | ​ | 2,009,476 | ​ | ​ | — | ​ | ​ | 2,009,476 | ​ | ​ | 280,512
Balance, as of June 30, 2024 |  | 7,987,959 | ​ | ¥ | 99,634 | ​ | 7,100,000 | ​ | ¥ | 4,693 | ​ | ¥ | 681,476,717 | ​ | ¥ | 4,148,929 | ​ | ¥ | (220,312,085) | ​ | ¥ | 37,136,649 | ​ | ¥ | 502,554,537 | ​ | ¥ | (11,620,640) | ​ | ¥ | 490,933,897 | ​ | $ | 68,531,731
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital contribution in controlling interests | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 100,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 100,000 | ​ | ​ | — | ​ | ​ | 100,000 | ​ | ​ | 13,959
Additional paid-in capital from acquisition of minority interests | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 724,408 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 724,408 | ​ | ​ | 724,408 | ​ | ​ | — | ​ | ​ | —
Restricted shares issued for management | ​ | 2,639,467 | ​ | ​ | 1,914 | ​ | 12,900,000 | ​ | ​ | 9,345 | ​ | ​ | 10,268,622 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 10,279,881 | ​ | ​ | — | ​ | ​ | 10,279,881 | ​ | ​ | 1,435,016
Net loss for the year | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (42,588,554) | ​ | ​ | — | ​ | ​ | (42,588,554) | ​ | ​ | (1,112,723) | ​ | ​ | (43,701,277) | ​ | ​ | (6,100,463)
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (3,642,754) | ​ | ​ | (3,642,754) | ​ | ​ | — | ​ | ​ | (3,642,754) | ​ | ​ | (508,509)
Balance, as of June 30, 2025 | ​ | 10,627,426 | ​ | ¥ | 101,548 | ​ | 20,000,000 | ​ | ¥ | 14,038 | ​ | ¥ | 692,569,747 | ​ | ¥ | 4,148,929 | ​ | ¥ | (262,900,639) | ​ | ¥ | 33,493,895 | ​ | ¥ | 467,427,518 | ​ | ¥ | (13,457,771) | ​ | ¥ | 453,969,747 | ​ | $ | 63,371,734

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

The accompanying notes are an integral part of these consolidated financial statements.

​

​

F-4

Table of Contents

RECON TECHNOLOGY, LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ | ​ | 2023 | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from operating activities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Net loss | ​ | ¥ | (61,476,392) | ​ | ¥ | (51,435,840) | ​ | ¥ | (43,701,277) | ​ | $ | (6,100,463)
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization | ​ |  | 3,683,586 | ​ | ​ | 2,844,025 | ​ | ​ | 3,147,936 | ​ | ​ | 439,435
Loss (gain) from disposal of property and equipment | ​ |  | (12,782) | ​ | ​ | 35,325 | ​ | ​ | 12,410 | ​ | ​ | 1,732
(Gain) loss in fair value changes of warrants liability | ​ | ​ | (6,116,000) | ​ | ​ | 933,995 | ​ | ​ | (6,226) | ​ | ​ | (869)
Amortization of offering cost of warrants | ​ | ​ | 1,483,306 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Allowance for (net recovery of) credit losses | ​ |  | (9,038,985) | ​ | ​ | 4,086,505 | ​ | ​ | (2,856,803) | ​ | ​ | (398,794)
Allowance (reversal) for slow moving inventories | ​ |  | 484,644 | ​ | ​ | 886,991 | ​ | ​ | (1,251,279) | ​ | ​ | (174,672)
Impairment loss of property and equipment and other long-lived assets | ​ | ​ | 1,009,124 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Impairment loss on goodwill and intangible assets | ​ | ​ | 9,980,002 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Amortization of right of use assets | ​ |  | 3,252,066 | ​ | ​ | 1,636,215 | ​ | ​ | 4,571,501 | ​ | ​ | 638,157
Restricted shares issued for management and employees | ​ |  | 26,191,707 | ​ | ​ | 22,427,682 | ​ | ​ | 10,279,881 | ​ | ​ | 1,435,016
Restricted shares issued for services | ​ | ​ | 5,805,840 | ​ | ​ | 1,070,143 | ​ | ​ | — | ​ | ​ | —
Accrued interest income from loans to third parties | ​ | ​ | (7,997,961) | ​ | ​ | (6,998,866) | ​ | ​ | (5,288,121) | ​ | ​ | (738,193)
Accrued interest income from short-term investment | ​ |  | (2,901,955) | ​ | ​ | (885,394) | ​ | ​ | (17,411) | ​ | ​ | (2,430)
Changes in operating assets and liabilities: | ​ |  |  |  |  |  |  |  |  | ​ |  |
Notes receivable | ​ |  | 7,085,917 | ​ | ​ | 2,400,570 | ​ | ​ | 1,341,820 | ​ | ​ | 187,311
Accounts receivable | ​ |  | (495,784) | ​ | ​ | (12,151,359) | ​ | ​ | 1,686,887 | ​ | ​ | 235,480
Inventories | ​ |  | (2,373,013) | ​ | ​ | 5,590,058 | ​ | ​ | 267,413 | ​ | ​ | 37,329
Other receivables | ​ |  | (1,307,694) | ​ | ​ | 31,908 | ​ | ​ | (531,445) | ​ | ​ | (74,184)
Other receivables-related parties | ​ | ​ | (64,122) | ​ | ​ | (275,976) | ​ | ​ | 208,000 | ​ | ​ | 29,036
Purchase advances | ​ |  | (2,575,198) | ​ | ​ | (2,422,123) | ​ | ​ | (5,057,967) | ​ | ​ | (706,065)
Contract costs | ​ |  | (14,236,539) | ​ | ​ | (4,400,442) | ​ | ​ | (363,721) | ​ | ​ | (50,773)
Prepaid expense | ​ |  | 70,164 | ​ | ​ | (51,467) | ​ | ​ | 12,371 | ​ | ​ | 1,727
Prepaid expense - related parties | ​ |  | 275,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Operating lease liabilities | ​ |  | (3,061,303) | ​ | ​ | (2,907,014) | ​ | ​ | (4,869,474) | ​ | ​ | (679,752)
Accounts payable | ​ |  | (1,710,898) | ​ | ​ | (604,203) | ​ | ​ | 1,940,574 | ​ | ​ | 270,894
Other payables | ​ |  | 2,270,104 | ​ | ​ | (3,020,216) | ​ | ​ | 3,399,579 | ​ | ​ | 474,563
Other payables-related parties | ​ |  | 352,260 | ​ | ​ | (293,326) | ​ | ​ | 628,308 | ​ | ​ | 87,708
Contract liabilities | ​ |  | 641,087 | ​ | ​ | (927,884) | ​ | ​ | 2,898,774 | ​ | ​ | 404,653
Accrued payroll and employees’ welfare | ​ |  | 131,971 | ​ | ​ | 854,644 | ​ | ​ | (24,937) | ​ | ​ | (3,481)
Taxes payable | ​ | ​ | (1,036,483) | ​ | ​ | (171,884) | ​ | ​ | (197,966) | ​ | ​ | (27,635)
Net cash used in operating activities | ​ |  | (51,688,331) | ​ | ​ | (43,747,933) | ​ | ​ | (33,771,174) | ​ | ​ | (4,714,270)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from investing activities: | ​ |  | ​ |  |  | ​ |  |  | ​ | ​ |  | ​
Purchases of property and equipment | ​ |  | (940,673) | ​ | ​ | (282,184) | ​ | ​ | (1,010,812) | ​ | ​ | (141,104)
Proceeds from disposal of property and equipment | ​ |  | 31,950 | ​ | ​ | 20,000 | ​ | ​ | 2,000 | ​ | ​ | 279
Purchase of land use right | ​ |  | — | ​ | ​ | (15,000,251) | ​ | ​ | — | ​ | ​ | —
Repayments of loans to third parties | ​ | ​ | 40,113,311 | ​ | ​ | 117,522,129 | ​ | ​ | 100,478,982 | ​ | ​ | 14,026,325
Payments made for loans to third parties | ​ | ​ | (103,146,761) | ​ | ​ | (196,437,504) | ​ | ​ | (140,490,800) | ​ | ​ | (19,611,759)
Payments and prepayments for construction in progress | ​ | ​ | — | ​ | ​ | (219,132) | ​ | ​ | (8,924,101) | ​ | ​ | (1,245,756)
Payments for short-term investments | ​ |  | (290,051,964) | ​ | ​ | (203,481,600) | ​ | ​ | (3,581,800) | ​ | ​ | (500,000)
Redemption of short-term investments | ​ | ​ | 108,769,464 | ​ | ​ | 300,863,518 | ​ | ​ | 87,239,515 | ​ | ​ | 12,178,167
Net cash (used in) provided by investing activities | ​ |  | (245,224,673) | ​ | ​ | 2,984,976 | ​ | ​ | 33,712,984 | ​ | ​ | 4,706,152
​ | ​ |  | ​ |  |  | ​ |  |  | ​ | ​ |  | ​
Cash flows from financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from short-term bank loans | ​ |  | 13,491,481 | ​ | ​ | 11,581,000 | ​ | ​ | 10,476,000 | ​ | ​ | 1,462,393
Repayments of short-term bank loans | ​ |  | (11,040,000) | ​ | ​ | (11,632,755) | ​ | ​ | (11,319,623) | ​ | ​ | (1,580,158)
Repayments of short-term borrowings | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Proceeds from short-term borrowings-related parties | ​ |  | 15,013,115 | ​ | ​ | 10,000,000 | ​ | ​ | — | ​ | ​ | —
Repayments of short-term borrowings-related parties | ​ | ​ | (9,000,000) | ​ | ​ | (10,018,222) | ​ | ​ | — | ​ | ​ | —
Repayments of long-term borrowings-related party | ​ |  | (1,499,667) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Proceeds from warrants issued with ordinary shares | ​ | ​ | 17,493,069 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Proceeds from sale of ordinary shares, net of issuance costs | ​ |  | 28,174,993 | ​ | ​ | 77,711,533 | ​ | ​ | (2,529,724) | ​ | ​ | (353,136)
Proceeds from sale of prefunded warrants, net of issuance costs | ​ | ​ | 3,750,282 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Redemption of warrants | ​ |  | — | ​ | ​ | (32,617,499) | ​ | ​ | — | ​ | ​ | —
Capital contribution by controlling shareholders | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 100,000 | ​ | ​ | 13,959
Net cash (used in) provided by financing activities | ​ |  | 56,383,273 | ​ | ​ | 45,024,057 | ​ | ​ | (3,273,347) | ​ | ​ | (456,942)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Effect of exchange rate fluctuation on cash and restricted cash | ​ |  | 27,688,659 | ​ | ​ | 1,722,165 | ​ | ​ | (8,626,292) | ​ | ​ | (1,204,184)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net increase (decrease) in cash and restricted cash | ​ |  | (212,841,072) | ​ | ​ | 5,983,265 | ​ | ​ | (11,957,829) | ​ | ​ | (1,669,245)
Cash and restricted cash at beginning of year | ​ |  | 317,698,417 | ​ | ​ | 104,857,345 | ​ | ​ | 110,840,610 | ​ | ​ | 15,472,753
Cash and restricted cash at end of year | ​ | ¥ | 104,857,345 | ​ | ¥ | 110,840,610 | ​ | ¥ | 98,882,781 | ​ | $ | 13,803,508
Reconciliation of cash and restricted cash, beginning of year | ​ |  |  |  |  |  |  |  |  | ​ |  |
Cash | ​ | ¥ | 316,974,857 | ​ | ¥ | 104,125,800 | ​ | ¥ | 109,991,674 | ​ | $ | 15,354,246
Restricted cash | ​ | ​ | 723,560 | ​ | ​ | 731,545 | ​ | ​ | 848,936 | ​ | ​ | 118,507
Cash and restricted cash, beginning of year | ​ | ¥ | 317,698,417 | ​ | ¥ | 104,857,345 | ​ | ¥ | 110,840,610 | ​ | $ | 15,472,753
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Reconciliation of cash and restricted cash, end of year | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash | ​ | ¥ | 104,125,800 | ​ | ¥ | 109,991,674 | ​ | ¥ | 98,874,577 | ​ | $ | 13,802,361
Restricted cash | ​ | ​ | 731,545 | ​ | ​ | 848,936 | ​ | ​ | 8,204 | ​ | ​ | 1,147
Cash and restricted cash, end of year | ​ | ¥ | 104,857,345 | ​ | ¥ | 110,840,610 | ​ | ¥ | 98,882,781 | ​ | $ | 13,803,508
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Supplemental cash flow information | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash paid during the year for interest | ​ | ¥ | 1,200,699 | ​ | ¥ | 659,472 | ​ | ¥ | 1,070,781 | ​ | $ | 149,475
Cash paid during the year for income tax | ​ | ¥ | 18,339 | ​ | ¥ | — | ​ | ¥ | 1,609 | ​ | $ | 225
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-cash investing and financing activities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Right-of-use assets obtained in exchange for operating lease obligations | ​ | ¥ | 75,182 | ​ | ¥ | 8,303,099 | ​ | ¥ | — | ​ | $ | —
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement | ​ | ¥ | 62,357 | ​ | ¥ | 61,301 | ​ | ¥ | 1,886,347 | ​ | $ | 263,324
Inventories transferred to and used as fixed assets | ​ | ¥ | (65,456) | ​ | ¥ | — | ​ | ¥ | — | ​ | $ | —
Payable for construction in progress | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 7,270,577 | ​ | $ | 1,014,933
Capital contribution receivable due from non-controlling Interest | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 724,408 | ​ | $ | 101,123

​

The accompanying notes are an integral part of these consolidated financial statements.

​

​

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Table of Contents

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Organization – Recon Technology, Ltd (the “Company”, “We” or “Our”) was incorporated under the laws of the Cayman Islands on August 21, 2007 as a limited liability company. By far, the Company provides specialized equipment, automation systems, tools, chemicals, outsourcing platform services and field services to energy industry companies mainly in the People’s Republic of China (the “PRC”).

VIEs:

The Company, along with its wholly-owned subsidiaries Recon Investment Ltd. (“Recon-IN”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), conducts its business through the following PRC legal entities (“Domestic Companies”) that operate in the Chinese energy industry:

| 1. | Beijing BHD Petroleum Technology Co., Ltd. (“BHD”),

| 2. | Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).

The Company has signed Exclusive Technical Consulting Service Agreements with each of the Domestic Companies, and Equity Interest Pledge Agreements and Exclusive Equity Interest Purchase Agreements with their shareholders (collectively the “VIE Agreements”). Pursuant to these VIE Agreements, the Company has the ability to substantially influence each of the Domestic Companies’ daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder approval. The VIE agreements are designed to render the Company as the primary beneficiary of and entitle the Company of rights to consolidate each Domestic Company for accounting purposes. We believe that the Domestic Companies should be treated as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation and we are regarded as the primary beneficiary of the VIEs.

On February 21, 2019, the Company’s board of directors approved transferring the VIEs and VIE-controlled companies from Jining Recon Technology Ltd. (“Recon-JN”) to Recon-BJ. At the time, both Recon-JN and Recon-BJ were the Company’s wholly owned subsidiaries in China. On April 1, 2019, the Company completed the VIE transfer process and then completed the dissolution of Recon-JN on April 10, 2019, and subsequently completed the dissolution of Recon Technology Co., Limited (“Recon-HK”) on May 15, 2020. The Company does not expect any negative impact of this process on its operations.

On December 17, 2015, Huang Hua BHD Petroleum Equipment Manufacturing Co., Ltd (“HH BHD”), a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the design, assemble and manufacture of heating equipment.

Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established on May 23, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥27,495,000 ($3,838,154) as of June 30,2025. BHD owned an equity interest of 49% of Gan Su BHD, and the remaining 51% equity interests was owned by an individual shareholder upon incorporation of Gan Su BHD. On September 25, 2017, the individual shareholder became the minority shareholder by transferring 2.0% equity shares to BHD. On April 26, 2021, the minority shareholder of Gan Su BHD transferred 15.4% of her equity interest to BHD. On May 19, 2021, the minority shareholder transferred 3.6% of her equity interest and BHD transferred 15.4% of its equity interest of Gan Su BHD to Nanjing Recon. There was no consideration paid for the transfers, and after the transfers, BHD owns equity an interest of 51% and Nanjing Recon owns an equity interest of 19% of Gan Su BHD, which is focusing on oilfield sewage treatment and oily sludge disposal projects.

Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established on October 16, 2017, with registered capital of ¥50.0 million. The paid in capital was ¥4,200,000 ($586,297) as of June 30, 2025. BHD owned an equity interest of 55% of Qinghai BHD previously; however, based on an agreement signed by the shareholders of Qinghai BHD dated October 23, 2018, each of the other two individual shareholders agreed to reduce 10% of their equity interests. As a result, Qinghai BHD returned ¥200,000 paid in capital back to one of the individual shareholders. After the new arrangement, BHD owns a total interest of 75% of Qinghai BHD. In fiscal year 2025, the Company’s management approved a plan to cease operations and close Qinghai BHD. Qinghai BHD primarily sold heating furnaces to industrial clients similar to those of BHD’s equipment operations. The decision to close Qinghai BHD was made due to its underperformance and lack of market expansion. Qinghai BHD’s major operations was ceased by June, 2025 and was fully wound down by the date of this report.

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Hebei Mashiji New Energy Technology Co., Ltd. (“MSJ”) was established on December 12, 2024, with a registered capital of RMB 10 million (approximately USD 1.4 million). As of June 30, 2025, BHD owned a 70% equity interest in MSJ, having invested ¥700,000 ($97,716) for this interest. MSJ primarily produces and sells methanol fuel energy-enhancing additives for vehicles. To date, MSJ remains in the initial preparatory phase and is undertaking the procedures necessary for applying for the relevant product manufacturing license. On September 11, 2025, BHD transferred 51% of MSJ’s equity interest to a non-related investor, becoming a minority shareholder of MSJ.

As the energy consumption market opened to private and foreign companies, and online payment technology developed, the Domestic Companies began to invest in the downstream of the oil industry. On December 15, 2017, BHD and Nanjing Recon entered into a subscription agreement with Future Gas Station (Beijing) Technology, Ltd (“FGS”), pursuant to which the Domestic Companies acquired an 8% equity interest in FGS. Established in January 2016, FGS is a service company focusing on providing new technical applications and data operations to gas stations and provides solutions to gas stations to improve their operations and their customers’ experience. On August 21, 2018, the Domestic Companies entered into an investment agreement and a supplemental agreement (collectively, the “Investment Agreement”) with FGS and the other shareholders of FGS. Pursuant to the Investment Agreement, our VIEs’ ownership interest in FGS shall increase from 8% to 43%, in exchange for their investment in FGS for a total amount of ¥10.0 million in cash and the issuance of 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to the other shareholders of FGS with certain conditions. As of June 30, 2019, the Domestic Companies invested an aggregate amount of ¥35,116,707 in FGS and issued 487,057 (27,059 shares post 2024 Reverse Split) restricted shares in total to other shareholders of FGS, and the Domestic Companies’ ownership interest in FGS has increased to 43%. On February 4, 2021, Nanjing Recon and BHD, entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS. Through the fourth supplemental agreement, the Domestic Companies waived the requirement on FGS’ performance goal about the number of gas stations. Accordingly, the Domestic Companies agreed to pay for the balance of the investment and cancelled the related lock-up terms on the restricted shares, The transaction has been hereby closed. As a result, the Domestic Companies collectively own 51% interest of FGS and began to consolidate the financial results of FGS since January 2021.

The VIE contractual arrangements

The Company’s main operating entities, the Domestic Companies, are controlled through contractual arrangements by the Company.

A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE, because it met the condition under accounting principles generally accepted in the United States of America (“U.S. GAAP”) to consolidate the VIE.

The Company is deemed to have a controlling financial interest in and be the primary beneficiary of the Domestic Companies because it has both of the following characteristics:

| ● | The power to direct activities of the Domestic Companies that most significantly impact such entities’ economic performance, and

| ● | The obligation to absorb losses of, and the right to receive benefits from, the Domestic Companies that could potentially be significant to such entities.

Pursuant to these contractual arrangements, the Domestic Companies shall pay service fees equal to all of their net profit after tax payments to the Company. Accordingly, the Company has the right to absorb 90% of net interest or 100% of net loss of those Domestic Companies for accounting purposes. Such contractual arrangements are designed so that the operations of the Domestic Companies are solely for the benefit of the Company, and therefore the Company must consolidate the Domestic Companies under U.S. GAAP.

With the reduction in minority shareholders’ equity, the Company re-signed the VIE agreements on July 10, 2025. Under the new agreements, the Company has the right to absorb 95% of the net income or 100% of the net losses of these domestic companies for accounting purposes, while all other terms remain unchanged

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Risks associated with the VIE structure

The Company believes that the contractual arrangements with the VIEs and the shareholders of the VIEs are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

| ● | revoke the business and operating licenses of the Company’s PRC subsidiary and the VIEs;

| ● | discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and the VIEs;

| ● | limit the Company’s business expansion in China by way of entering into contractual arrangements;

| ● | impose fines or other requirements with which the Company’s PRC subsidiary and the VIEs may not be able to comply;

| ● | require the Company or the Company’s PRC subsidiary and the VIEs to restructure the relevant ownership structure or operations; or

| ● | restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China.

The Company’s ability to conduct its businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exercise its rights as the primary beneficiary over the VIEs and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and the VIEs. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs and the VIEs’ subsidiaries. However, when the VIEs and the VIEs’ subsidiaries ever need financial support, the Company or its subsidiaries has, at its option and subject to statutory limits and restrictions, provided financial support to the VIEs and the VIEs’ subsidiaries through loans to the VIEs and the VIEs’ subsidiaries.

Non-VIEs:

The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and the following PRC legal entities , operates in the Chinese chemical recycling industry:

| 1. | Shandong Recon Renewable Resources Technology Co., Ltd. (“Recon-SD”)

| 2. | Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”)

On October 10, 2023, Shandong Recon Renewable Resources Technology Co., Ltd (“Recon-SD”), a fully owned subsidiary established by Recon-IN, with registered capital of $30.0 million. The paid in capital was $10.0 million as of this report date. Shandong Recon focuses on the Plastic chemical cycles business.

On February 22, 2024, Guangxi Recon Renewable Resources Co., Ltd. (“Recon-GX”), a fully owned subsidiary established by Recon-IN, with registered capital of $30.0 million., focusing on the Plastic chemical cycles business. The paid in capital was $1.0 million as of this report date.

Nature of Operations – The Company engages in (1) providing equipment, tools and other components and parts related to oilfield production and other energy industries companies, including simple installations in connection with some projects; (2) providing services to improve production and efficiency of exploited oil wells, (3) developing and selling its own specialized industrial automation control and information solutions, (4) designing, testing and implementing solution of sewage and oily sludge treatment, production and sales of related integrated equipment and project services, (5) developing, upgrading and maintaining the online operation and cooperation platform of gas stations, marketing and promotion services, and (6) Plastic chemical cycles business, etc.

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and are expressed in United States dollars (“US dollars”).

Principles of Consolidation - The consolidated financial statements include the accounts of the Company, all the subsidiaries, VIEs and subsidiaries of VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.

We consolidate all subsidiaries in which we have a controlling financial interest and variable interest entities (“VIEs”) for which we or one of our consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for using the cost method.

We consolidate a VIE when we have both the power to direct the activities that most significantly impact the results of the VIE and the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. Along with the VIEs that are consolidated in accordance with the above guidelines, we also hold variable interests in other VIEs that are not consolidated because we are not the primary beneficiary. We continually monitor both consolidated and unconsolidated VIEs to determine if any events have occurred that could cause the primary beneficiary to change. A change in determination could have a material impact on our financial statements.

Variable Interest Entities - A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.

Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.

Currency Translation - The Company’s functional currency is US dollars and the consolidated financial statements have been expressed in Chinese Yuan (“RMB”) as RMB is the Company’s reporting currency. The consolidated financial statements as of and for the year ended June 30, 2025 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.1636 = US$1.00, the approximate exchange rate prevailing on June 30, 2025. These translated US dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into US dollars.

Estimates and Assumptions - The preparation of the consolidated financial statements in conformity with US GAAP, which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for credit losses related to accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, goodwill and investment in unconsolidated entity, the discount rate for lease and investment, valuation of the convertible notes, price purchase allocation for business combination and the fair value of share-based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.

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The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for credit losses related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.

Fair Values of Financial Instruments - The U.S. GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The three levels of inputs are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable.

Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The carrying amounts reported in the consolidated balance sheets for short-term investments, accounts receivable, notes receivable, other receivables, purchase advances, contract cost, accounts payable, other payable, accrued liabilities, contract liabilities, short-term bank loans and short-term borrowings – related parties approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts of the long-term borrowings is estimated using discounted cash flow models, which discount future principal and interest payments at current market interest rates for similar debt instruments with comparable credit risk and maturities. The carrying amount may approximate fair value only if the stated interest rates are consistent with prevailing market rates at the reporting date. The fair value of loans to third parties is estimated by discounting expected future cash flows at current market rates applicable to instruments with similar credit profiles and terms. The carrying amount, which is measured at amortized cost less any allowance for credit losses, may differ from fair value if market interest rates or credit conditions have changed significantly since origination.

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Cash - Cash includes cash on hand consisting of coins, currency, and cash in bank deposit accounts at multiple financial institutions.

Short-term investments - Short-term investments include wealth management products, which are certain deposits with fixed interest rates and the principal are guaranteed by the financial institutions. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities within one year. The interest earned is recognized in the consolidated statements of operations and comprehensive income (loss) as interest income. As of June 30, 2024 and June 30, 2025, the Company had short-term investments balance of ¥88.1 million and ¥3.6 million ($0.5 million), including accrued interests of ¥0.9 million and ¥17,411 ($2,431), respectively.

Accounts Receivables, Net, Other Receivables, Net and Loans to Third Parties - Accounts receivables are carried at original invoiced amount less a provision for any potential uncollectible amounts. In July 2020, the Company adopted ASU 2016-13, Topics 326-Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology, as its accounting standard for its accounts receivable and other receivables. Other receivables and loans to third parties arise from transactions with non-trade customers.

Accounts receivable, other receivables and loan to third parties are recognized and carried at carrying amount less an allowance for credit loss, if any. The Company maintains an allowance for credit losses resulting from the inability of its trade and non-trade customers (“customers”) to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.

The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable, other receivables and loan to third parties. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company considers in determining whether to discontinue sales, record as contra revenue or allowance for credit losses:

| ● | the oil price and fluctuation of the overall oil industry;

| ● | the customer fails to comply with its payment schedule;

| ● | the customer is in serious financial difficulty;

| ● | a significant dispute with the customer has occurred regarding job progress or other matters;

| ● | the customer breaches any of the contractual obligations;

| ● | the customer appears to be financially distressed due to economic or legal factors;

| ● | the business between the customer and the Company is not active; and

| ● | other objective evidence indicates non-collectability of the accounts receivable, other receivables and loan to third parties.

The Company considers the following factors when determining whether to permit a longer payment period or provide other concessions to customers:

| ● | the customer’s past payment history;

| ● | the customer’s general risk profile, including factors such as the customer’s size, age, and public or private status;

| ● | macroeconomic conditions that may affect a customer’s ability to pay; and

| ● | the relative importance of the customer relationship to the Company’s business.

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Notes Receivable - Notes receivable represent short-term notes receivable the Company receives from its customers as payment for amounts owed to the Company in normal course of business operation. The notes receivables are issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally ranges from three to six months from the date of issuance.

Purchase Advances, Net - purchase advances are the amounts prepaid to suppliers for materials, services, and capital expenditures, including equipment, construction-related goods, and third-party supervision services. These amounts are initially classified as current assets (Advances to Suppliers) if expected to be settled within 12 months or non-current assets if the benefit period exceeds one year. Upon receipt of goods/services, advances are reclassified to Inventory, Property, Plant, and Equipment, or expensed as incurred. Unrecoverable advances are recognized as impairments. Significant balances are disclosed separately.

Inventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Market value of the inventories is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.

Deferred offering costs - ASC 340-10, Deferred offering costs consisted of fees and expenses incurred in connection with the sale of the Company’s ordinary shares, including the legal, accounting, printing and other offering related costs. Upon completion of the offering, these deferred offering costs are to be reclassified from current assets to shareholders’ equity and recorded against the net proceeds from the offering. As of June 30, 2024 and 2025, deferred offering costs amounted to nil and $0.4 million, respectively.

Property and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to five years. Production equipment includes Equipment and Utilities and Facilities, both of which are depreciated using the straight-line method based on the estimated useful life of the assets. The useful life of Equipment is 10 years, while the useful life of Utilities and Facilities is 20 years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.

​

​ | ​ | ​
Items |  | Useful life
Motor vehicles |  | 3-5 years
Office equipment and fixtures | ​ | 2-5 years
Building | ​ | 15-40 years
Production equipment, including: | ​ | ​
Equipment | ​ | 5-10 years
Utilities and Facilities |  | 5-20 years
Leasehold improvement |  | Lesser of useful life and lease term

​

Construction in progress includes property and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognized impairment loss. Construction in progress is classified to the appropriate category of property and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Long-term Investments - ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance requires modified retrospective application to all outstanding instruments for fiscal years beginning after December 15, 2017, with a cumulative effect adjustment recorded to opening accumulated deficit as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value would be applied prospectively. The Company adopted the new financial instruments accounting standard from July 1, 2018.

- | Equity Investments with Readily Determinable Fair Values - Equity investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements.

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- | Equity Investments without Readily Determinable Fair Values - After the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying value of the equity investments in current earnings. Changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The implementation guidance notes that an entity should make a “reasonable effort” to identify price changes that are known or that can reasonably be known.

- | Equity Investments Accounted for Using the Equity Method - The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately held entities, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

Non-controlling Interests - For the Company’s majority-owned subsidiaries, VIEs and subsidiaries of VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operation and comprehensive income (loss) to distinguish the interests from that of the Company.

Revenue Recognition - In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The core principle underlying the new revenue recognition Accounting Standards Update (“ASU”) is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer.

Payment terms and conditions vary according to the type of contract, although the Company generally requires customers to pay within one year of the satisfaction of performance obligations. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the contracts do not include a significant financing component. The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.

Disaggregation of Revenue

Revenue are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following items represent the Company’s revenue disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.

The Company’s disaggregation of revenue for the years ended June 30, 2023, 2024 and 2025 is disclosed in Note 28.

Automation Products and Software; Equipment, Accessories and Others

The Company generates revenue primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.

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The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.

Oilfield Environmental Protection Service

The Company provides wastewater treatment products and related service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue when products are delivered, on-site assistance services rendered, and acceptance reports are signed off by customers. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

The Company provides oily sludge disposal and treatment services to oilfield companies and generates revenue from treatment services of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using output method, based on the percentage-of-completion method. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.

Platform Outsourcing Services

The Company provides online platform development and maintenance services to gas stations in various provinces in China. The Company believes that customers receive and consume the economic benefits simultaneously as the Company fulfills its performance obligations and that the operation and maintenance services are continuous in nature, with customers receiving ongoing benefits throughout the service period. The Company invoices customers at the end of each month based on fixed service fees and classifies this portion of revenue as revenue recognized over time

The Company also provides API (application programming interface) port export services and related maintenance services to business partners in various industries that may have transactions in the fueling scenario. As the Company does not create or enhance assets controlled by its customers during the provision of its services and its customers do not simultaneously receive and consume services, the Company recognizes revenue at a single point in time when the online transaction is completed. The Company’s services enable terminal users of various mobile applications operated by its customers or partners to complete refueling transactions in cash or online through various payment channels; when each transaction, including refueling and payment, is completed, the Company is entitled to charge, at pre-set rates, each transaction amount as a service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly on a per-transaction basis.

Arrangements with Multiple Performance Obligations

Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.

Contract Balances

The Company’s contract balances include contract costs, net and contract liabilities from contracts with customers, and the following table provides information about contract balances:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Contract costs, net |  | ¥ | 48,335,817 |  | ¥ | 53,547,408 | ​ | $ | 7,474,930
Contract liabilities |  | ¥ | 1,820,481 |  | ¥ | 4,719,255 | ​ | $ | 658,783

​

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Table of Contents

Contract Costs, Net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.

- | Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company’s hardware and software revenue. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.

- | Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients’ initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client’s individual project construction arrangement), the Company records revenue based on the contract or the final clients’ acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.

Contract Liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. The Company’s contract liabilities consist primarily of the Company’s unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The amount of revenue recognized during the years ended June 30, 2023, 2024 and 2025 that was previously included within contract liability balances was ¥1,901,277, ¥1,489,311 and ¥761,824 ($106,347), respectively.

Performance Obligations - Performance obligations include delivery of products and provision of services. The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. This occurs when the control of the goods and services have been transferred to the customer. Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized upon the service rendered. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.

Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenue, and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations and comprehensive income (loss). Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of June 30, 2025.

Practical Expedients Elected

Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant.

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Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are majorly less than one year in length, consideration will not be adjusted. For the Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts. There are also some new contracts that will not be completed within one year from year 2024, the Company did calculation and the amount was not material as end of this fiscal year.

Share-Based Compensation - Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award. The Company has elected to recognize compensation expenses using the valuation model estimated at the grant date based on the award’s fair value.

Research and Development Expenses - Research and development costs comprise the costs of developing and improving new and existing products and services, including employee compensation, materials, depreciation of equipment and contracted technical services. All R&D costs are expensed as incurred unless specific development projects (e.g. qualifying software systems or equipment prototypes) demonstrate technological feasibility and probable future economic benefits. Field testing costs for pre-commercial products are classified as R&D until technological validation is achieved. As of June 30, 2025, we have had no capitalization.

Leases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces and land use rights, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. Impairment for ROU lease assets were ¥834,975, ¥nil and ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively.

Income Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2024 and 2025.

In general, the PRC tax authority has up to five years to conduct examinations of the Company’s tax filings. As of June 30, 2025, Accordingly, the PRC subsidiaries’ and VIE and subsidiaries of the VIE’s tax years ended December 31, 2020 through December 31, 2024 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.

Comprehensive Income (Loss) - Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$ to RMB is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss).

Earnings (Loss) per Share - Earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of Ordinary Shares outstanding. Diluted EPS are computed by dividing net income (loss) by the weighted-average number of Ordinary Shares and dilutive potential Ordinary Share equivalents outstanding. Potentially dilutive Ordinary Shares consist of Ordinary Shares issuable upon the conversion of ordinary share options, restricted shares and warrants (using the treasury share method).

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Given the fact that the “2024 Reverse Split” only affected the outstanding number of the Company’s Class A Ordinary Shares, the weighted average number of Class A Ordinary Shares outstanding had been retroactively restated for the 1-for-18 reverse shares split. While the Class B Ordinary Shares’ number and voting power were not subjected to the 2024 Reverse Split, according to the Company’s Fourth Amended and Restated M&A and Articles of Association, “each Class B Ordinary Share entitles its holder the right to convert it into one eighteenth (1/18) of a Class A Ordinary Share at any time. Correspondingly, each one eighteenth (1/18) of a share of Class B Ordinary Share has dividend rights equivalent to the one share of Class A Ordinary Share”. In addition, (a) since becoming public, the Company has never declared a dividend, and (b) if a dividend were declared, the Board of Directors would intend to make sure the dividends were properly allocated among the Class A Ordinary Shares and Class B Ordinary Shares to give effect to the 1/18 ratio. The Company believes that all of these treatments are designed to ensure that the dividend rights and the dividend rate are the same with that for Class A and Class B Ordinary Shares. To calculate EPS equally for all ordinary shares, the Company use the sum of the weighted average number of Class A Ordinary Shares outstanding and one-eighteenth of the weighted average number of Class B Ordinary Shares outstanding as the denominator.

The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2023, 2024 and 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ | ​ | 2023 | ​ | 2024 | ​ | 2025 |  | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
Numerator: | ​ |  |  | ​ |  |  | ​ |  |  |  | ​ |
Net loss attributable to Recon Technology, Ltd | ​ | ¥ | (59,167,301) | ​ | ¥ | (49,871,259) | ​ | ¥ | (42,588,554) | ​ | $ | (5,945,133)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator: | ​ |  | ​ | ​ |  | ​ | ​ |  |  | ​ |  |
Weighted-average number of ordinary shares outstanding – basic* | ​ |  | 2,157,158 | ​ | ​ | 5,048,952 | ​ | ​ | 9,094,902 | ​ | ​ | 9,094,902
Class A Ordinary Shares* | ​ | ​ | 1,880,065 | ​ | ​ | 4,654,508 | ​ | ​ | 8,044,658 | ​ | ​ | 8,044,658
Class B Ordinary Shares** | ​ | ​ | 277,093 | ​ | ​ | 394,444 | ​ | ​ | 1,050,244 | ​ | ​ | 1,050,244
Outstanding options/warrants* | ​ |  | 1,115,088 | ​ | ​ | 52,407 | ​ | ​ | 47,964 | ​ | ​ | 47,964
Potentially dilutive shares from outstanding options/warrants | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Weighted-average number of ordinary shares outstanding – diluted* | ​ |  | 2,157,158 | ​ | ​ | 5,048,952 | ​ | ​ | 9,094,902 | ​ | ​ | 9,094,902
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loss per share – basic and diluted* | ​ | ¥ | (27.43) | ​ | ¥ | (9.88) | ​ | ¥ | (4.68) | ​ | $ | (0.65)

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

** | The Class B Ordinary Shares were not subjected to reverse stock split, and each Class B Ordinary Share is convertible into one-eighteenth (1/18) of one Class A Ordinary Share at any time by the holder thereof, so the weighted average number of Class B Ordinary Shares is calculated on a one-for-eighteen basis of issued and outstanding Class B Ordinary Shares.

Warrants - The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Class A Ordinary Shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

F-17

Table of Contents

Recently Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06 – Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements.

On July 30, 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses, to address challenges that private companies encounter when applying ASC 326 to estimate expected credit losses on short-term receivables arising from contracts with customers under ASC 606. These challenges include the complexity and cost of collecting macroeconomic data, as well as the limited impact such data has on estimating credit losses for short-term assets. The update introduces a practical expedient for all entities to simplify the use of macroeconomic data in these assessments and allows private companies to elect a simpler accounting policy. These changes are intended to reduce compliance costs while improving the usefulness and feasibility of financial reporting. The Company is evaluating the impact of the adoption of this guidance.

On May 15, 2025, the FASB issued ASU 2025-04, which requires entities to measure and classify share-based consideration paid to customers (such as stock warrants) using the guidance in ASC 718, and to determine whether any associated vesting conditions are service conditions or performance conditions, in order to standardize accounting treatments, reduce diversity in practice, and accurately determine the timing of revenue recognition. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted, and entities may apply the new guidance either on a modified retrospective basis or a retrospective basis. The Company believes that this update will have no impact on its consolidated financial statements and disclosures.

On May 12, 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810), which proposes to improve the guidance for identifying the accounting acquirer in a business combination in order to address inconsistencies in accounting treatment and comparability between transactions involving variable interest entities (VIEs) and those that do not. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual periods. The Company believes that this update will have no impact on its consolidated financial statements and disclosures.

In March 18, 2025, the FASB issued Accounting Standards Update 2025-02—Liabilities (405), which is also known as Staff Accounting Bulletin (SAB) No. 122 to rescind SAB 121. SAB 121 previously required an entity to recognize a liability and corresponding asset for its obligation to safeguard crypto assets. Full retrospective application of SAB 122 is required for annual periods beginning after December 15, 2024, but entities are permitted to early adopt SAB 122 in any interim or annual financial statement period included in filings with the SEC on or after January 30, 2025. The Company believes there is no effect on the Company’s consolidated financial statements and disclosures and will not adopt this new guidance.

On January 6, 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted. The company evaluated and believe there is no effect on the on the Company’s consolidated financial statements and disclosure.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

​

F-18

Table of Contents

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Third Parties | ​ | RMB | ​ | RMB | ​ | US Dollars
Trade accounts receivable |  | ¥ | 39,825,619 |  | ¥ | 37,916,569 | ​ | $ | 5,292,949
Allowance for credit losses |  | ​ | (1,193,857) |  | ​ | (2,064,085) | ​ |  | (288,135)
Total third-parties, net |  | ¥ | 38,631,762 |  | ¥ | 35,852,484 | ​ | $ | 5,004,814

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Third Parties- long-term | ​ | RMB | ​ | RMB | ​ | US Dollars
Trade accounts receivable | ​ | ¥ | 774,604 | ​ | ¥ | 886,267 | ​ | $ | 123,718
Allowance for credit losses | ​ |  | (774,604) | ​ |  | (886,267) | ​ |  | (123,718)
Total third-parties, net | ​ | ¥ | — | ​ | ¥ | — | ​ | $ | —

​

Net recovery of provision for credit losses of accounts receivable due from third parties was ¥8,767,356 for the year ended June 30, 2023. Provision for credit losses of accounts receivable due from third parties was ¥973,012 for the year ended June 30, 2024. Provision for credit losses of accounts receivable due from third parties was ¥981,891($137,066) for the year ended June 30, 2025.

As the date of this report, approximately 32.8%, or ¥11.75 million ($1.6 million) of net outstanding balance as of June 30, 2025 has been collected.

Movement of allowance for doubtful accounts is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Beginning balance |  | ¥ | 995,449 |  | ¥ | 1,968,461 | ​ | $ | 274,787
Charge to credit losses |  | ​ | 973,012 |  | ​ | 981,891 | ​ |  | 137,066
Ending balance |  | ¥ | 1,968,461 |  | ¥ | 2,950,352 | ​ | $ | 411,853

​

​

F-19

Table of Contents

NOTE 4. NOTES RECEIVABLE

Notes receivable represented the non-interest-bearing commercial bills the Company received from the customers for the purpose of collection of sales amounts, which ranged from three to six months from the date of issuance. As of June 30, 2024 and June 30, 2025, notes receivable was ¥1,341,820 and ¥nil, respectively. As of June 30, 2024 and June 30, 2025, no notes were guaranteed or collateralized.

NOTE 5. OTHER RECEIVABLES, NET

Other receivables, net consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Third Party | ​ | RMB | ​ | RMB | ​ | US Dollars
Business advances to officers and staffs (A) |  | ¥ | 1,373,300 |  | ¥ | 797,263 |  | $ | 111,294
Deposits for projects |  | ​ | 1,056,316 |  | ​ | 1,433,883 |  | ​ | 200,162
VAT recoverable |  | ​ | 583,413 |  | ​ | 1,139,075 |  | ​ | 159,009
Others |  | ​ | 1,139,397 |  | ​ | 1,127,654 |  | ​ | 157,413
Allowance for credit losses | ​ | ​ | (800,374) | ​ | ​ | (736,993) | ​ | ​ | (102,879)
Total Other receivable, net |  | ¥ | 3,352,052 | ​ | ¥ | 3,760,881 | ​ | $ | 524,999

(A) | Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.

Provision for credit losses of other receivables was ¥1,375,516 for the year ended June 30, 2023. Net recovery of provision for credit losses of other receivables was ¥1,194,586 for the year ended June 30, 2024. Net recovery of provision for credit losses of other receivables was ¥63,381 ($8,849) for the year ended June 30, 2025.

Movement of allowance for credit losses is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Beginning balance |  | ¥ | 1,994,960 |  | ¥ | 800,374 | ​ | $ | 111,728
Reversal of allowance | ​ | ​ | (1,194,586) | ​ | ​ | (63,381) | ​ | ​ | (8,849)
Ending balance |  | ¥ | 800,374 |  | ¥ | 736,993 | ​ | $ | 102,879

​

​

NOTE 6. LOANS TO THIRD PARTIES-SHORT TERM

​

Loans to third parties-short term consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | June 30, | ​ | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | US Dollars
Working fund to third party companies | ​ | ¥ | 208,928,370 | ​ | ¥ | 141,564,073 | ​ | $ | 19,761,583
Loans to third parties-short term | ​ | ¥ | 208,928,370 | ​ | ¥ | 141,564,073 | ​ | $ | 19,761,583

​

Loans to third parties are mainly used for short-term funding to support the Company’s external business partners and at the same time the Company can earn interest income from these loans. Most of these loans bear interest of 6% to 15.6% per annum and have terms of no more than one year. The Company periodically reviewed the loans to third parties as to whether their carrying values remain realizable. The Company believes that the risk associated with the above loans are relatively low based on the evaluation of the creditworthiness of these third-party debtors and the relationships with them. As the date of this report, the Company has collected approximately 1.1% of the principal, amounting to ¥1.5 million ($0.21 million), with remaining part was expected to be paid in full by end of June 2026.

​

​

F-20

Table of Contents

NOTE 7. LOANS TO THIRD PARTIES-LONG TERM

​

Loans to third parties-long term consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | June 30, | ​ | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | US Dollars
Working fund to third party companies |  | ¥ | — |  | ¥ | 118,500,000 | ​ | $ | 16,541,962
Loans to third parties-long term |  | ¥ | — |  | ¥ | 118,500,000 | ​ | $ | 16,541,962

​

Long-term loans are interest-bearing, with interest rates ranging from 4.5% to 12.0% per annum, and have terms exceeding one year. Long-term loans are typically secured by collateral or other protective measures, which mitigate risk and ensure repayment is guaranteed. The Company periodically reviewed the loans to third parties as to whether their carrying values remain realizable. The Company believes that the risk associated with the above loans are relatively low based on the evaluation of the creditworthiness of these third-party debtors and the relationships with them. As of the date of this report, nil was natured and collected by the Company, and the remaining amount is expected to be paid in full in accordance with the terms and conditions specified in the contract.

In October 2025, following the approval by the Company’s Board, a special-purpose loan agreement was entered into with a domestic company. In accordance with the terms of this agreement, the Company provided a loan of RMB 100 million to facilitate participation in an industrial park project. The term of the loan is 20 years, and the annual interest rate is 4.5%. The loan is intended to facilitate the acquisition of long-term capital gains and other business resources.

​

NOTE 8. CONTRACT COSTS, NET

​

Contract costs, net consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Third Party | ​ | RMB | ​ | RMB | ​ | US Dollars
Contract costs |  | ¥ | 56,730,105 | ​ | ¥ | 57,093,826 | ​ | $ | 7,969,991
Allowance for credit losses |  |  | (8,394,288) | ​ | ​ | (3,546,418) | ​ | ​ | (495,061)
Total contract costs, net |  | ¥ | 48,335,817 | ​ | ¥ | 53,547,408 | ​ | $ | 7,474,930

​

As of June 30, 2025, total contracts costs, net amounted to ¥53,547,408 ($7,474,930), of which 15.4%, or ¥8.22 million ($1.15 million) have been subsequently realized as the date of this report, and the remaining balance is expected to be utilized by June 2026.

Net recovery of provision for credit losses of contract cost was ¥1,720,095 for the years ended June 30, 2023, and provision for credit losses of contract cost was ¥4,532,872 for the years 2024. Net recovery of provision for credit losses of contract cost was ¥4,079,681 ($569,502) for the year ended June 30, 2025.

Movement of allowance for credit losses of contract costs is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Beginning balance |  | ¥ | 2,586,155 | ​ | ¥ | 8,394,288 | ​ | $ | 1,171,797
Charge to (reversal of) allowance | ​ | ​ | 4,532,872 | ​ | ​ | (4,079,681) | ​ | ​ | (569,502)
Charge to (reversal of) sales |  |  | 1,275,261 | ​ | ​ | (768,189) | ​ | ​ | (107,234)
Ending balance |  | ¥ | 8,394,288 | ​ | ¥ | 3,546,418 | ​ | $ | 495,061

​

​

F-21

Table of Contents

NOTE 9. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Motor vehicles |  | ¥ | 3,699,101 | ​ | ¥ | 3,665,426 | ​ | $ | 511,674
Office equipment and fixtures |  | ​ | 1,405,076 | ​ | ​ | 1,368,950 | ​ | ​ | 191,098
Production equipment |  | ​ | 31,231,574 | ​ | ​ | 30,938,857 | ​ | ​ | 4,318,898
Leasehold improvement | ​ | ​ | 2,260,000 | ​ | ​ | 2,260,000 | ​ | ​ | 315,484
Total cost |  | ​ | 38,595,751 | ​ | ​ | 38,233,233 | ​ | ​ | 5,337,154
Less: accumulated depreciation |  | ​ | (15,515,349) | ​ | ​ | (18,072,448) | ​ | ​ | (2,522,816)
Less: accumulated impairment |  | ​ | (942,462) | ​ | ​ | (174,150) | ​ | ​ | (24,310)
Property and equipment, net | ​ | ¥ | 22,137,940 | ​ | ¥ | 19,986,635 | ​ | $ | 2,790,027

​

Depreciation expenses were ¥2,983,586, ¥2,844,025 and ¥3,147,936 ($439,435) for the years ended June 30, 2023, 2024 and 2025, respectively.

The impairment were ¥942,462, ¥942,462 and ¥174,150 ($24,310) for the years ended June 30, 2023, 2024 and 2025, respectively. The decrease primarily reflects management’s approval to close QH BHD and write off its property and equipment.

Income from property and equipment disposal was ¥12,782 for the year ended June 30, 2023. Loss from property and equipment disposal was ¥35,325 for the year ended June 30, 2024. Loss from property and equipment disposal was ¥12,410 ($1,732) for the year ended June 30, 2025.

​

​

NOTE 10. CONSTRUCTION IN PROGRESS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Construction in progress |  | ¥ | 219,132 |  | ¥ | 12,000,900 | ​ | $ | 1,675,261

​

Construction in progress refers to the factory construction being undertaken by Recon-SD for its plastic recycling business (“the Project”). It primarily accounts for the direct and indirect costs incurred by the Project. The Project occupies approximately 50 acres. Upon full completion, the Project will comprise a production workshop, a process equipment area, a raw material warehouse area, a tank farm area, Multi-functional office buildings, a hazardous waste storage facility, and supporting utility infrastructure. Currently, two production lines are under construction. The overall factory construction is expected to be finished in February 2026. The total budget for the Project is approximately $20 million. As of June 30, 2025, the construction costs amounted to ¥12,000,900 ($1,675,261).

​

F-22

Table of Contents

NOTE 11. BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

(U) | Step Acquisition of Future Gas Station (Beijing) Technology, Ltd (“FGS”)

On August 21, 2018, the Company entered into a definitive investment agreement and a supplemental agreement (collectively, the “Agreement”) with FGS and the other shareholders of FGS. Following full performance under the Agreement, Recon will own 43% of FGS. As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB10 million in cash to FGS and (2) issue 487,057 (27,059 shares post 2024 Reverse Split) restricted Class A Ordinary Shares of the Company (the “Restricted Shares”) to the other shareholders of FGS within 30 days after FGS finalizes recording the Company’s corresponding interest at the local governmental agency. If FGS does not reach certain performance goals, the Company has the right to cancel all of the Restricted Shares and without further payment. The Restricted Shares are also subject to lock-up period requirements that vary for each of FGS shareholders, from one year to three years following issuance of the Restricted Shares. FGS has finalized recording Recon’s corresponding interest at the local governmental agency, and Recon has issued 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares in total to the other shareholders of FGS in August 2018.

On September 24, 2019, the Company signed an extension agreement with FGS and the other shareholders of FGS to postpone the Agreement to provide extra period for FGS to further fulfill the goals mentioned on the supplemental agreement. During the original contract period, FGS adjusted its operation model with an advanced improvement of its mobile applications and business model. Objected user and average Gross Merchandise Volume (“GMV”) of FGS’ mobile applications have been exceeded. FGS will need an extension to deploy its business in more provinces to complete a goal of 200 more gas stations.

On March 17, 2020, the Company signed a new supplemental agreement with FGS and the other shareholders of FGS to extend another 12 months to February 2021 for FGS and its shareholders to fulfill the goals mentioned on the supplemental agreement.

As of December 31, 2020, the Company owned 43% of the equity interests of FGS. The investments are accounted for using the equity method because the Company has significant influence, but no control of FGS.

On February 8, 2021, and pursuant to FGS’ shareholder meeting resolution dated January 13, 2021 (“Acquisition Date”), two of the Company’s subsidiaries entered into the fourth supplemental agreement to the investment agreement with FGS and FGS’ founding shareholders to acquire 8% equity ownership of FGS, as an exchange for waiver of the requirement on FGS’ performance goal about the number of gas stations and cancellation of the related lock-up terms on the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares of the Company (reflecting the effect of one-for-five reverse share split) issued per the agreement signed on August 21, 2018. FGS failed to complete one of the three goals set up in the investment agreement. As a consequence, the Company shall cancel one third of the 487,057 (27,059 shares post 2024 Reverse Split) Restricted Shares, which shall be 162,352 (9,020 shares post 2024 Reverse Split) Restricted Shares. According to this new arrangement, the Company waived the goals and cancellation of the shares as a deemed consideration of the 8% equity. Based on the share price $1.61 ($28.98 post 2024 Reverse Split) on January 13, 2021, the fair value of the waived performance goal equals to ¥1,689,807 ($231,503). As a result, the Company owns 51% interest of FGS and this transaction was considered as a step acquisition under ASC 805 “Business Combinations”. A step acquisition gain of ¥979,254 ($134,157) arising from revaluation of previously held equity interest was recognized during the year ended June 30, 2021.

The Company retained independent appraisers to advise management in the determination of the fair value of customers relationship and goodwill. The values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date. The carrying value of other assets and liabilities other than customer relationship and goodwill, are approximate at their fair value as of the Acquisition Date.

F-23

Table of Contents

The fair values of the identifiable assets and liabilities as at the date of the acquisitions are summarized in the following table:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | RMB |  | US Dollars
Cash |  | ¥ | 471,843 | ​ | $ | 65,867
Accounts receivable, net |  | ​ | 831,049 | ​ |  | 116,010
Other receivables, net |  | ​ | 144,285 | ​ |  | 20,141
Contract costs, net |  | ​ | 75,250 | ​ |  | 10,504
Prepaid expenses |  | ​ | 91,132 | ​ |  | 12,722
Property and equipment, net |  | ​ | 118,130 | ​ |  | 16,490
Intercompany receivables* |  | ​ | 6,850,000 | ​ |  | 956,223
Intangible assets- customer relationship |  | ​ | 7,000,000 | ​ |  | 977,162
Goodwill |  | ​ | 6,996,895 | ​ |  | 976,729
Accounts payable |  | ​ | (1,032,078) | ​ |  | (144,073)
Other payables |  | ​ | (1,273,182) | ​ |  | (177,729)
Other payable- related parties |  | ​ | (479,959) | ​ |  | (67,000)
Deferred revenue |  | ​ | (39,786) | ​ |  | (5,554)
Accrued payroll and employees’ welfare |  | ​ | (1,629,519) | ​ |  | (227,472)
Taxes payable |  | ​ | (64,253) | ​ |  | (8,969)
Deferred tax liability |  | ​ | (1,050,000) | ​ |  | (146,574)
Total | ​ | ¥ | 17,009,807 | ​ | $ | 2,374,477
Cash considerations |  | ​ | — | ​ | ​ | —
Deemed equity consideration to acquire 8% equity interest in FGS | ​ | ​ | 1,689,807 | ​ | ​ | 235,888
Fair value of previously held equity interest |  | ​ | 30,530,000 | ​ |  | 4,261,824
Non-controlling interest |  | ​ | 34,790,000 | ​ |  | 4,856,497
Capital contribution receivable due from non-controlling Interest |  | ​ | (50,000,000) | ​ |  | (6,979,731)
Total |  | ¥ | 17,009,807 | ​ | $ | 2,374,477

* | Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

The noncontrolling interest has been recognized at fair value net with subscription receivable on the acquisition date.

Goodwill and intangible assets

The excess of purchase price over the fair value of assets acquired and liabilities assumed of the business acquired was recorded as goodwill. The goodwill is not expected to be deductible for tax purposes. In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2023, 2024 and 2025, the management performed evaluation on the impairment of goodwill and recorded an impairment loss on goodwill of ¥4,730,002, ¥nil and ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively.

The identifiable goodwill acquired and the carrying value consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB | ​ | RMB |  | US Dollars
Goodwill | ​ | ¥ | 6,996,895 | ​ | ¥ | 6,996,895 | ​ | $ | 976,729
Less: impairment for goodwill | ​ | ​ | (6,996,895) | ​ | ​ | (6,996,895) | ​ | ​ | (976,729)
Goodwill, net | ​ | ¥ | — | ​ | ¥ | — | ​ | $ | —

​

F-24

Table of Contents

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of June 30, 2025 is as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | ​ | ​ | ​ |  | Average
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Useful Life
​ | ​ | Fair Value | ​ | (in Years)
​ |  | RMB (Unaudited) |  | US Dollars (Unaudited) |  | ​
Intangible assets - customer relationship |  | ¥ | 7,000,000 | ​ | $ | 977,163 |  | 10
Less: accumulated amortization | ​ | ​ | (1,750,000) | ​ | ​ | (244,291) | ​ | ​
Less: impairment | ​ | ​ | (5,250,000) | ​ | ​ | (732,872) | ​ | ​
Intangible assets - customer relationship, net | ​ | ¥ | — | ​ | $ | — | ​ | ​

​

The amortization expense of customer relationship was ¥700,000, ¥nil and ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively.

Impairment loss for intangible assets - customer relationship was ¥5,250,000, ¥nil and ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively. As intangible assets - customer relationship was not able to generate enough future cashflow. Therefore, the Company decided to record full impairment of the intangible assets - customer relationship during the year ended June 30, 2023.

​

NOTE 12. LEASES

The Company leases office spaces and land use rights under non-cancelable operating leases, with terms ranging from one to fifty years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Rights of use lease assets, net | ​ | ¥ | 23,547,193 | ​ | ¥ | 18,975,692 | ​ | $ | 2,648,904
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease liabilities – current |  | ¥ | 3,741,247 | ​ | ¥ | 1,761,231 | ​ | $ | 245,858
Operating lease liabilities – non-current |  |  | 3,971,285 | ​ | ​ | 1,081,827 | ​ | ​ | 151,017
Total operating lease liabilities |  | ¥ | 7,712,532 | ​ | ¥ | 2,843,058 | ​ | $ | 396,875

​

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |
​ | ​ | 2024 | ​ | 2025 | ​
Remaining lease term and discount rate: |  |  | ​ |  | ​
Weighted average remaining lease term (years) |  | 34.08 | ​ | 39.86 | ​
Weighted average discount rate |  | 5.0 | % | 3.0 | %

​

Operating lease costs and short-term lease costs for the year ended June 30, 2023 were ¥3,354,147 and ¥2,683,860, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2024 were ¥3,175,289 and ¥327,812, respectively. Operating lease costs and short-term lease costs for the year ended June 30, 2025 were ¥4,666,010 ($651,350) and ¥1,365,627 ($190,634), respectively.

There was no impairment loss recognized for the ROU asset during the years ended June 30, 2023, 2024, and 2025.

F-25

Table of Contents

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
Twelve months ending June 30, |  | RMB |  | US Dollars
2026 |  | ¥ | 1,820,285 | ​ | $ | 254,100
2027 |  |  | 1,095,214 | ​ | ​ | 152,886
Total lease payments |  |  | 2,915,499 | ​ | ​ | 406,986
Less: imputed interest |  |  | (72,441) | ​ | ​ | (10,111)
Present value of lease liabilities |  |  | 2,843,058 | ​ | ​ | 396,875
Less: operating lease liabilities – current |  |  | 1,761,231 | ​ | ​ | 245,858
Operating lease liabilities – non-current |  | ¥ | 1,081,827 | ​ | $ | 151,017

​

​

NOTE 13. OTHER PAYABLES

Other payables consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Third Parties | ​ | RMB | ​ | RMB | ​ | US Dollars
Professional service fees |  | ¥ | 1,610,455 | ​ | ¥ | 2,211,757 | ​ | $ | 308,749
Distributors and employees |  | ​ | 586,929 | ​ | ​ | 2,837,272 | ​ | ​ | 396,068
Accrued expenses |  | ​ | 229,385 | ​ | ​ | 523,917 | ​ | ​ | 73,136
Others |  | ​ | 342,916 | ​ | ​ | 581,943 | ​ | ​ | 81,236
Total |  | ¥ | 2,769,685 | ​ | ¥ | 6,154,889 | ​ | $ | 859,189

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Related Parties | ​ | RMB | ​ | RMB | ​ | US Dollars
Expenses paid by the major shareholders |  | ¥ | 1,453,910 | ​ | ¥ | 2,382,218 | ​ | $ | 332,545
Due to family members of the owners of BHD and FGS |  | ​ | 845,159 | ​ | ​ | 545,159 | ​ | ​ | 76,101
Total |  | ¥ | 2,299,069 | ​ | ¥ | 2,927,377 | ​ | $ | 408,646

​

​

NOTE 14. CONTRACT LIABLILTY

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Total |  | ¥ | 1,820,481 |  | ¥ | 4,719,255 | ​ | $ | 658,783

​

The movement in Contract abilities is as follows at June 30:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Related Parties | ​ | RMB | ​ | RMB | ​ | US Dollars
Balance at beginning of the period |  | ¥ | 2,748,365 |  | ¥ | 1,820,481 | ​ | $ | 254,129
Decrease in contract liabilities as a result of recognizing revenue during the year was included in the contract liabilities at the beginning of the year |  | ​ | 1,489,311 |  | ​ | 761,824 | ​ |  | 106,347
Increase in contract liabilities as a result of billings in advance of performance obligation under contracts |  | ​ | 561,426 |  | ​ | 3,660,598 | ​ |  | 511,000
Total |  | ¥ | 1,820,481 |  | ¥ | 4,719,255 | ​ | $ | 658,783

​

​

F-26

Table of Contents

NOTE 15. BANK LOANS

Short-term bank loans consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | June 30, | ​ | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | US Dollars
Bank of Kunlun (1) | ​ | ¥ | 843,487 | ​ | ¥ | — | ​ | $ | —
Industry and Commercial Bank of China (“ICBC”) (2) | ​ | ​ | 10,000,000 | ​ | ​ | 10,000,000 | ​ | ​ | 1,395,946
China Construction Bank (3) | ​ | ​ | 1,106,091 | ​ | ​ | 1,106,009 | ​ | ​ | 154,393
Industry and Commercial Bank of China (“ICBC”) (4) | ​ | ​ | 476,381 | ​ | ​ | 476,327 | ​ | ​ | 66,493
Total short-term bank loans | ​ | ¥ | 12,425,959 | ​ | ¥ | 11,582,336 | ​ | $ | 1,616,832

(1) | On August 31, 2022, Gan Su BHD entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($397,298) as working capital for eighteen months, with a maturity date of February 29, 2024. The loan has a fixed interest rate of 6.0% per annum. Gan Su BHD made a withdrawal in an amount of ¥1,000,000 ($136,999) on August 31, 2022. The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. Gan Su BHD also pledged the accounts receivable from the contracts the Company entered into with CNPC as collateral for this loan, and the total value of the contracts are approximately ¥6.5 million (approximately $1.0 million). As of June 30, 2025, the bank loan has been repaid.

(2) | On June 25, 2024, BHD entered into a revolving loan facility with ICBC to borrow up to ¥10,000,000 ($1,395,946) as working capital for one year, with a maturity date of June 24, 2025. The loan has a fixed interest rate of 2.8% per annum. BHD made a withdrawal in an amount of ¥10,000,000 ($1,395,946) on June 25, 2024. On June 6, 2025, the above-mentioned bank loan has been repaid. On June 6, 2025, BHD drew down ¥10,000,000 ($1,395,946) under its revolving loan facility with ICBC as working capital for a term of one year, maturing on June 5, 2026. This loan is pledged by the self-owned housing property of one of the founders of BHD with carrying value of approximately ¥17.0 million ($2.3 million) as collateral for this loan.

(3) | On June 11, 2024, FGS entered into a revolving loan facility with China Construction Bank to borrow up to ¥1,105,000 ($154,252) as working capital for twelve months, with a maturity date of June 11, 2025. On June 3, 2025, FGS executed a revolving credit renewal agreement with China Construction Bank, extending the maturity date to June 3, 2026. The loan has a fixed interest rate of 3.95% per annum. Some non-controlling shareholder of FGS was co-borrower and bore joint and several liability for this loan.

(4) | On June 18, 2024, FGS entered into a revolving loan facility with ICBC to borrow up to ¥476,000 ($66,447) as working capital for twelve months, with a maturity date of June 18, 2025. On June 18, 2025, the above-mentioned bank loan has been repaid. On June 18, 2025, FGS entered into a revolving loan facility with ICBC to borrow up to ¥476,000 ($66,447) as working capital for 360 days, with a maturity date of June 13, 2026. The loan has a fixed interest rate of 3.2% per annum.

Interest expense for the short-term bank loan was ¥416,481, ¥332,881 and ¥343,159 ($47,903) for the years ended June 30, 2023, 2024and 2025, respectively.

​

NOTE 16. TAXES PAYABLE

Taxes payable consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
VAT payable |  | ¥ | 439,771 | ​ | ¥ | 193,484 | ​ | $ | 27,010
Income tax payable |  | ​ | 440,060 | ​ | ​ | 440,030 | ​ | ​ | 61,426
Other taxes payable |  | ​ | 113,534 | ​ | ​ | 162,115 | ​ | ​ | 22,630
Total taxes payable |  | ¥ | 993,365 | ​ | ¥ | 795,629 | ​ | $ | 111,066

​

​

​

F-27

Table of Contents

NOTE 17. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Short-term borrowings due to related parties consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Short-term borrowings due to related parties: | ​ | RMB | ​ | RMB | ​ | US Dollars
Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024 | ​ | ​ | 10,002,875 | ​ | ​ | — | ​ | ​ | —
Short-term borrowing from a Founder, 3.45% annual interest, due on December 13, 2025 | ​ | ​ | — | ​ | ​ | 10,017,250 | ​ | ​ | 1,398,354
Total short-term borrowings due to related parties |  | ¥ | 10,002,875 | ​ | ¥ | 10,017,250 | ​ | $ | 1,398,354

​

No short-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2024 and 2025.

​

Interest expense for short-term borrowings due to related parties were ¥326,893, ¥648,581 and ¥349,792 ($48,829) for the years ended June 30, 2023, 2024 and 2025, respectively.

​

NOTE 18. LONG-TERM BORROWINGS DUE TO RELATED PARTIES

Long-term borrowings due to related parties consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
Long-term borrowings due to related parties: | ​ | RMB | ​ | RMB | ​ | US Dollars
Long-term borrowing from a Founder, 3.75% annual interest, three years loan, due on April 29, 2027 |  | ¥ | 10,000,000 | ​ | ¥ | 10,000,000 | ​ | $ | 1,395,946
Total long-term borrowings due to related parties |  | ¥ | 10,000,000 | ​ | ¥ | 10,000,000 | ​ | $ | 1,395,946

​

No long-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2024 and 2025.

Interest expense for long-term borrowings due to related parties were ¥472,593, ¥34,375 and ¥380,208 ($53,075) for the years ended June 30, 2023, 2024 and 2025, respectively.

​

NOTE 19. CLASS A ORDINARY SHARES

Share offering

On March 15, 2023, the Company and certain institutional investors (the “Purchasers”) entered into that certain securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 8,827,500 (490,417 shares post 2024 Reverse Split) Class A Ordinary Shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share and 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants (the “Pre-Funded Warrants”) to purchase Class A Ordinary Shares in a registered direct offering, and warrants to purchase up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $8.0 million before deducting the placement agent’s fees and other estimated offering expenses.

On October 16, 2023, 1,175,000 (65,278 pre-funded warrants post 2024 Reverse Split) pre-funded warrants issued on March 15, 2023 were exercised by investor and 1,175,000 (65,278 shares post 2024 Reverse Split) Class A Ordinary shares were issued and being outstanding.

F-28

Table of Contents

On March 29, 2024, the Company’s shareholders approved the reverse shares split of the Company’s Class A Ordinary Shares at the ratio of one-for-eighteen with the market effective date of May 1, 2024 (the “2024 Reverse Split”). In connection with the reverse stock split, on March 29, 2024 the Company’s shareholder approved and authorized the Company’s registered office service agent to filed the Fourth Amended and Restated Memorandum and Articles of Association with local registry, and change its authorized share capital from: US$15,725,000 divided into 150,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0925 each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to: US$58,000 divided into 500,000,000 Class A Ordinary Shares of a nominal or par value of US$0.0001 each and 80,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0001 each (the “2024 change in capital structure”). As a result of the 2024 Reverse Split, each eighteen pre-split Class A Ordinary Shares outstanding were automatically combined and converted to one issued and outstanding Class A Ordinary Share. No fractional Class A Ordinary Shares were issued to any shareholders in connection with the 2024 Reverse Split. Each shareholder was entitled to receive one Class A Ordinary Shares in lieu of the fractional share that would have resulted from the reverse stock split. The Depository Trust Company (the “DTC”) requested the Company’s transfer agent to issue 54,727 round-up Class A Ordinary Shares. As of May 1, 2024 (immediately prior to the effective date), there were 141,703,218 Class A Ordinary Shares outstanding, and the number of Class A Ordinary Shares outstanding after the 2024 Reverse Split is 7,927,132, taking into account of the effect of rounding fractional shares into whole shares. In addition, all Class A Ordinary Shares, options and any other Class A securities of the Company outstanding immediately prior to the 2024 Reverse Split was retroactively applied by dividing the number of ordinary shares into which the options and other securities are exercisable by 18 and multiplying the exercise price thereof by 18, as a result of the 2024 Reverse Split. All share and earnings per-share information have been retroactively adjusted to reflect the 2024 Reverse-Split.

The Company had 500,000,000 authorized Class A Ordinary Shares, par value of $0.0001, of which 7,987,959 and 10,627,426 Class A Ordinary Shares were issued and outstanding as of June 30, 2024 and 2025, respectively. The Company had 80,000,000 authorized Class B Ordinary Shares, par value of $0.0001, of which 7,100,000 and 20,000,000 Class B Ordinary Shares were issued and outstanding as of June 30, 2024 and 2025, respectively.

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted |  | Average
​ | ​ | ​ | ​ | Average |  | Remaining
​ | ​ | Pre-Funded | ​ | Exercise Price |  | Period
Pre-Funded Warrants |  | Warrants* |  | Per Share* |  | (Years)
Outstanding as of June 30, 2023 |  | 65,278 | ​ | $ | 0.18 | ​ | 5.22
Issued |  | — | ​ | ​ | — | ​ | —
Forfeited |  | — | ​ | ​ | — | ​ | —
Exercised |  | (65,278) | ​ | ​ | 0.18 | ​ | —
Expired |  | — | ​ | ​ | — | ​ | —
Outstanding as of June 30, 2024 |  | — | ​ | $ | — | ​ | —
Issued |  | — | ​ | ​ | — | ​ | —
Forfeited |  | — | ​ | ​ | — | ​ | —
Exercised |  | — | ​ | ​ | — | ​ | —
Expired |  | — | ​ | ​ | — | ​ | —
Outstanding as of June 30, 2025 |  | — | ​ | $ | — | ​ | —

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

Appropriated Retained Earnings

​

According to the Memorandum and Articles of Association, the Company is required to transfer a certain portion of its net profit, as determined under PRC accounting regulations, from current net income to the statutory reserve fund. In accordance with the PRC Company Law, companies are required to transfer 10% of their profit after tax, as determined in accordance with PRC accounting standards and regulations, to the statutory reserves until such reserves reach 50% of the registered capital of the companies. As of June 30, 2024 and June 30, 2025, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($579,168), respectively.

​

F-29

Table of Contents

NOTE 20. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

In June 2021, the Company issued to some institutional investors warrants to purchase an aggregate of up to 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2021”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $34,860,000. During the year ended June 30, 2023, the exercise price of warrants to purchase an aggregate of up to 7,950,769 (441,710 shares post 2024 Reverse Split) Class A Ordinary Shares was adjusted to $0.80 ($14.40 post 2024 Reverse Split), and the exercise price of the remaining warrants to purchase an aggregate of up to 863,333 (47,964 shares post 2024 Reverse Split) Class A Ordinary Shares remained at $6.24 ($112.32 post 2024 Reverse Split).

On December 14, 2023, the Company entered into a Warrant Purchase Agreement with certain accredited investors pursuant to which the Company agreed to buy back an aggregate of 7,950,769 (441,710 warrants post 2024 Reverse Split) warrants from the investors, and the investors agreed to sell the Warrants back to the Company. The purchase price for each Warrant was $0.25 ($4.50 post 2024 Reverse Split). As of December 31,2023, The Company still holds the investor 863,333 (47,964 warrants post 2024 Reverse Split) warrants. As of June 30, 2024 and June 30, 2025, the fair value of the warrant liability of the Warrant 2021 was ¥6,959 and ¥688 ($96). During the years ended June 30, 2024 and 2025, there was change in fair value of the Warrant 2021 liability in an aggregate amount of $109,041 and $869, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | June 30, | ​
Input |  | 2025 |  | 2024 | ​
Number of warrants* | ​ |  | 47,964 | ​ | ​ | 47,964 | ​
Share price* | ​ | $ | 2.52 | ​ | $ | 1.44 | ​
Risk-free interest rate | ​ |  | 3.85 | % |  | 4.62 | %
Volatility | ​ |  | 95 | % |  | 105 | %
Exercise price* | ​ | $ | 112.32 | ​ | $ | 112.32 | ​
Warrant life | ​ |  | 1.96years | ​ |  | 2.46 years | ​

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

On March 15, 2023, the Company issued to some institutional investors warrants to purchase an aggregate of up to 10,002,500 (555,694 shares post 2024 Reverse Split) Class A Ordinary Shares. (the “Warrant 2023”) The warrants are subject to deemed-liquidation redemption features and are therefore classified as a liability in accordance with FASB ASC 480. Warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. The warrant liability is re-valued at each reporting period with the change in fair value recorded through earnings. The Company established the initial fair value of the warrants at $2,750,000.

On December 14, 2023, the Company entered into a Warrant Purchase Agreement with certain accredited investors pursuant to which the Company agreed to buy back an aggregate of 10,002,500 (555,694 warrants post 2024 Reverse Split) warrants from the investors, and the investors agreed to sell the Warrants back to the Company. The purchase price for each Warrant is $0.25 ($4.50 post 2024 Reverse Split). On December, 14, 2023, Company bought back all warrants 2023 from the investors. As of June 30, 2023 and June 30, 2024, the fair value of the warrant liability of the Warrant 2023 was $2,430,000 and $nil. During the years ended June 30, 2023 and 2024, there was change in fair value of the Warrant 2023 liability in an aggregate amount of $320,000 and $nil, respectively.

F-30

Table of Contents

The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2024 and June 30, 2025, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Quoted Prices In |  | Significant Other |  | Significant Other
​ | ​ | June 30, | ​ | Active Markets | ​ | Observable Inputs | ​ | Unobservable Inputs
Description | ​ | 2024 | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3)
Liabilities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Warrant liability - non-current | ​ | $ | 959 | ​ | $ | — | ​ | $ | — | ​ | $ | 959

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  | ​ |  | Quoted Prices In |  | Significant Other |  | Significant Other
​ |  | June 30, |  | Active Markets |  | Observable Inputs |  | Unobservable Inputs
Description |  | 2025 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Liabilities: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Warrant liability - non-current | ​ | $ | 96 | ​ | $ | — | ​ | $ | — | ​ | $ | 96

​

The following table summarizes the Company’s Warrants activities and status of Warrants as of June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted |  | Average
​ | ​ | ​ | ​ | Average | ​ | Remaining
​ | ​ | ​ | ​ | Exercise Price | ​ | Period
Warrants |  | Warrants* |  | Per Share* |  | (Years)
Outstanding as of June 30, 2023 |  | 1,045,368 | ​ | $ | 18.90 | ​ | 4.40
Issued |  | — | ​ | ​ | — | ​ | —
Redeemed |  | (997,404) | ​ | ​ | 14.40 | ​ | —
Forfeited | ​ | — | ​ | ​ | — | ​ | —
Exercised |  | — | ​ | ​ | — | ​ | —
Expired |  | — | ​ | ​ | — | ​ | —
Outstanding as of June 30, 2024 |  | 47,964 | ​ | $ | 112.32 | ​ | 2.96
Issued |  | — | ​ | ​ | — | ​ | —
Redeemed |  | — | ​ | ​ | — | ​ | —
Forfeited |  | — | ​ | ​ | — | ​ | —
Exercised |  | — | ​ | ​ | — | ​ | —
Expired | ​ | — | ​ | ​ | — | ​ | —
Outstanding as of June 30, 2025 |  | 47,964 | ​ | ​ | 112.32 | ​ | 1.96

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

F-31

Table of Contents

NOTE 21. SHARE-BASED COMPENSATION

Share-Based Awards Plan

The following is a summary of the share options activity:

​

​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | Exercise Price
Share Options | ​ | Shares* | ​ | Per Share*
Outstanding as of June 30, 2023 |  | 4,456 | ​ | $ | 148.50
Granted |  | — | ​ | ​ | —
Forfeited |  | — | ​ | ​ | —
Exercised |  | — | ​ | ​ | —
Expired | ​ | — | ​ | ​ | —
Outstanding as of June 30, 2024 |  | 4,456 | ​ | $ | 148.50
Granted |  | — | ​ | ​ | —
Forfeited |  | — | ​ | ​ | —
Exercised |  | — | ​ | ​ | —
Expired | ​ | 4,456 | ​ | ​ | 148.50
Outstanding as of June 30, 2025 |  | — | ​ | $ | —

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

The Share-based compensation expense recorded for stock options granted were all ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively. No unrecognized share-based compensation for stock options as of June 30, 2025.

Restricted Shares to Management and staff

As of June 30, 2025, the Company has granted restricted Class A Ordinary Shares to senior management and employees as follows:

On February 28, 2022, the Company granted 1,642,331 (91,241 shares post 2024 Reverse Split) Class A Ordinary Shares to its employees as compensation cost for awards. The fair value of the restricted shares was $1,708,024 based on the closing share price $1.04 ($18.72 post 2024 Reverse Split) at February 28, 2022. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. As of June 30, 2024, 1,094,888 (60,827 shares post 2024 Reverse Split) shares were vested and 29,988 (1,666 shares post 2024 Reverse Split) shares were forfeited. The remaining 547,443 (30,412 shares post 2024 Reverse Split) shares were vested at February 28, 2025.

On March 15, 2023, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to its employee as compensation for service to the Company on new business exploration. The service period was six months from the date of grant. All of the restricted shares were issued on March 15, 2023 and the granted shares under this plan were vested on September 15, 2023.

On February 26, 2024, the Company granted 6,255,483 (347,527 shares post 2024 Reverse Split) restricted Class A Ordinary Shares to its management and staff. The fair value of the Class A restricted shares was $988,366 based on the fair value of share price $0.158 ($2.844 post 2024 Reverse Split) at February 26, 2024. The granted shares under this plan were vested on February 26, 2025 and all of the restricted shares were issued on May 7,2025.

On March 31,2025, the Company granted 2,263,194 restricted Class A Ordinary Shares to its management and staff. The fair value of the Class A restricted shares was $3,496,635 based on the fair of share price $1.545 on March 31,2025. All of the restricted shares were issued on March 31,2025. These restricted shares will vest over two years with half of the shares vesting each year from the grant date. As the date of this report, no shares under this plan are vested.

1,000,000 (55,556 shares post 2024 Reverse Split), 60,827 and 376,273 restricted Class A restricted shares were issued and outstanding for the years ended June 30, 2023, 2024 and 2025, respectively, for all the plans mentioned above.

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As of June 30, 2025, the Company has granted restricted Class B Ordinary Shares to senior management as follows:

On February 28, 2022, the Company granted 1,600,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $1,694,000 based on the fair value of share price $1.06 at February 28, 2022. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on February 28, 2022.

On March 9, 2023, the Company granted 3,000,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $3,025,000 based on the fair value of share price $1.01 at March 9, 2023. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on March 9, 2023.

On February 26, 2024, the Company granted 12,900,000 restricted Class B Ordinary Shares to its management as compensation cost for awards. The fair value of the Class B restricted shares was $2,130,000 based on the fair value of share price $0.17 at February 26, 2024. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on August 1, 2024.

3,000,000, nil and 12,900,000 restricted Class B restricted shares were issued and outstanding during the years ended June 30, 2023, 2024 and 2025, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for management was ¥26,191,707, ¥22,427,682 and ¥10,279,881 ($1,435,016) for the years ended June 30, 2023, 2024 and 2025, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of June 30, 2025 was approximately ¥22,168,174 million ($3,054,856 million), which is expected to be recognized over a weighted average period of approximately 1.75 years.

Restricted Shares for services

As of June 30, 2025, the Company has granted restricted Class A Ordinary Shares to consultant as follows:

On January 5, 2022, the Company signed a consulting agreement with Lintec Information Ltd (the “Consultant”). As the service consideration, the Company issued 1,050,000 (58,333 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $1,354,500 based on the closing share price of $1.29 ($23.22 post 2024 Reverse Split) on January 5, 2022 to the Consultant as payment for being the Company’s investment and financial advisor for a period of one year. The vesting period of these shares was one year from the date of contract. All of the restricted shares were issued under this plan on January 5, 2022 and all of the granted shares under this plan was vested as of June 30, 2024.

On March 15, 2023, the Company signed a consulting agreement with some business consultants (the “Consultants”). As the service consideration, the Company issued 1,000,000 (55,556 shares post 2024 Reverse Split) restricted Class A Ordinary Shares with a value of $372,600 based on the closing share price of $0.3726 ($6.71 post 2024 Reverse Split) on March 15, 2023 to the Consultants as compensation for acting as advisors to the Company on new business exploration. The vesting period of these shares was six months from the date of contract. All of the restricted shares were issued under this plan on March 15, 2023 and the granted shares under this were vested on September15, 2023.

1,000,000 (55,556 shares post 2024 Reverse Split), nil and nil restricted Class A restricted shares were issued and outstanding during the years ended June 30, 2023, 2024 and 2025, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for service was ¥5,805,840, ¥nil and ¥nil for the years ended June 30, 2023, 2024 and 2025, respectively. The total unrecognized share-based compensation expense of restricted shares issued for service as of June 30, 2025 was ¥nil.

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Following is a summary of the restricted shares granted:

​

​ | ​ | ​
Restricted share grants |  | Shares*
Non-vested as of June 30, 2023 |  | 171,938
Granted |  | 347,527
Vested |  | (141,526)
Non-vested as of June 30, 2024 |  | 377,939
Granted |  | 2,263,194
Vested |  | (377,939)
Non-vested as of June 30, 2025 |  | 2,263,194

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

The following is a summary of the status of restricted share at June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​
Outstanding Restricted Shares
​ |  | ​ |  | Average
​ | ​ | ​ | ​ | Remaining
Fair Value per | ​ | ​ |  | Amortization
Share* | ​ | Number* |  | Period (Years)
$ | 1.545 |  | 2,263,194 | ​ | 1.75

* | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.

​

NOTE 22. INCOME TAX

The Company is not subject to any income taxes in the United States or the Cayman Islands and had minimal operations in jurisdictions other than the PRC. BHD and Nanjing Recon are subject to PRC’s income taxes as PRC domestic companies. The Company follows Implementing Rules for the Enterprise Income Tax Law (“Implementing Rules”), which took effect on January 1, 2008 and unified the income tax rate for domestic-invested and foreign-invested enterprises at 25%.

Nanjing Recon was approved as a government-certified high-technology company and is subject to a reduced income tax rate of 15% through November 30, 2019. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as November 22, 2019 and expired on November 22, 2022. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as October 12, 2022 and will expire on October 12, 2025.

As approved by the domestic tax authority in the PRC, BHD was recognized as a government-certified high-technology company on November 25, 2009 and is subject to a reduced income tax rate of 15% through November 25, 2018. BHD reapplied for a high-technology company certificate, and the new certificate was approved as October 31, 2018 and expired on October 31, 2021. BHD reapplied for a high-technology company certificate, and the new certificate was approved as December 17, 2021 and will expire on December 17, 2024. BHD reapplied for a high-technology company certificate, and the new certificate was approved as December 31, 2024 and will expire on December 31, 2027.

Income (loss) before provision for income taxes consisted of:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the years ended June 30,
​ | ​ | 2023 | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
Outside China areas |  | ¥ | (34,038,460) | ​ | ¥ | (27,573,933) | ​ | ¥ | (18,976,517) | ​ | $ | (2,649,020)
China |  | ​ | (27,419,593) | ​ | ​ | (23,861,877) | ​ | ​ | (24,723,180) | ​ | ​ | (3,451,222)
Total |  | ¥ | (61,458,053) | ​ | ¥ | (51,435,810) | ​ | ¥ | (43,699,697) | ​ | $ | (6,100,242)

​

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Deferred tax assets, net is composed of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Deferred tax assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Allowance for credit losses |  | ¥ | 1,652,102 | ​ | ¥ | 595,607 | ​ | $ | 83,144
Impairment for inventory | ​ | ​ | 221,290 | ​ | ​ | (115,494) | ​ | ​ | (16,122)
Net operating loss carryforwards |  | ​ | 25,843,951 | ​ | ​ | 26,329,235 | ​ | ​ | 3,675,419
Subtotal | ​ | ​ | 27,717,343 | ​ | ​ | 26,809,348 | ​ | ​ | 3,742,441
Less: Valuation allowance | ​ | ​ | (27,437,564) | ​ | ​ | (26,529,569) | ​ | ​ | (3,703,385)
Total deferred tax assets, net | ​ | ¥ | 279,779 | ​ | ¥ | 279,779 | ​ | $ | 39,056
Deferred tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accelerated amortization of intangible assets | ​ | ​ | (132,891) | ​ | ​ | (132,891) | ​ | ​ | (18,551)
Gain on the previously held equity method investment | ​ | ​ | (146,888) | ​ | ​ | (146,888) | ​ | ​ | (20,505)
Total deferred tax liabilities |  | ​ | (279,779) | ​ | ​ | (279,779) | ​ | ​ | (39,056)
Deferred tax assets, net |  | ¥ | — | ​ | ¥ | — | ​ | $ | —

​

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred a cumulative net operating loss (“NOL”) which may reduce future corporate taxable income. As of June 30, 2024, the cumulative NOL was approximately ¥145.3 million. During the year ended June 30, 2025, the Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred an additional NOL carryforwards of approximately ¥17.3 million ($2.4 million). As of June 30, 2025, there are $30.8 million ($4.3 million) of the cumulative NOL that have expired, resulting in a cumulative NOL carryforwards of approximately ¥131.8 million ($18.4 million) as of June 30, 2025.
​

The NOL will expire over the next five years as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
Twelve months ending June 30, |  | RMB |  | US Dollars
2026 | ​ | ¥ | 32,533,742 | ​ | $ | 4,541,535
2027 | ​ |  | 27,137,905 | ​ | ​ | 3,788,305
2028 | ​ |  | 34,868,363 | ​ | ​ | 4,867,436
2029 | ​ |  | 20,017,992 | ​ | ​ | 2,794,404
2030 | ​ |  | 17,258,164 | ​ | ​ | 2,409,147
Total | ​ | ¥ | 131,816,166 | ​ | $ | 18,400,827

​

Following is a reconciliation of income tax expense (benefit) at the effective rate to income tax at the calculated statutory rates:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ |  | 2023 |  | 2024 |  | 2025 |  | 2025
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | US Dollars
Income tax benefits calculated at PRC statutory rates |  | ¥ | (15,364,513) | ​ | ¥ | (12,858,953) | ​ | ¥ | (10,924,924) | ​ | $ | (1,525,061)
Nondeductible expenses and others |  | ​ | 539,247 | ​ | ​ | 427,969 | ​ | ​ | 410,819 | ​ | ​ | 57,348
Effect of tax rate differential |  | ​ | 7,949,048 | ​ | ​ | 9,080,982 | ​ | ​ | 8,080,498 | ​ | ​ | 1,127,995
Benefit of revenue exempted from enterprise income tax |  | ​ | (18,814) | ​ | ​ | 19,714 | ​ | ​ | 12,864 | ​ | ​ | 1,796
Change in valuation allowances |  | ​ | 6,913,371 | ​ | ​ | 3,330,318 | ​ | ​ | 2,422,323 | ​ | ​ | 338,143
Income tax expenses |  | ¥ | 18,339 | ​ | ¥ | 30 | ​ | ¥ | 1,580 | ​ | $ | 221

​

The Company’s income tax expense (benefit) is comprised of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ |  | 2023 |  | 2024 |  | 2025 |  | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
Current income tax provision |  | ¥ | 18,339 | ​ | ¥ | 30 | ​ | ¥ | 1,580 | ​ | $ | 221
Deferred income tax benefit |  | ​ | — |  | ​ | — |  | ​ | — | ​ |  | —
Expense for income tax |  | ¥ | 18,339 | ​ | ¥ | 30 | ​ | ¥ | 1,580 | ​ | $ | 221

​

​

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NOTE 23. NON-CONTROLLING INTEREST

Non-controlling interest consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June 30, 2024
​ |  | ​ | ​ |  | Nanjing |  | Gan Su |  | Qinghai |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | BHD | ​ | Recon | ​ | BHD | ​ | BHD | ​ | FGS | ​ | Total | ​ | Total
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | US Dollars
Paid-in capital |  | ¥ | 1,651,000 | ​ | ¥ | 200,000 | ​ | ¥ | 4,805,000 | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 6,656,000 | ​ | $ | 915,896
Capital contribution receivable due from non-controlling Interest | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (48,870,000) | ​ | ​ | (48,870,000) | ​ | ​ | (6,724,736)
Unappropriated retained earnings (deficit) |  | ​ | 3,477,494 | ​ | ​ | 3,616,001 | ​ | ​ | (7,547,154) | ​ | ​ | (1,581,474) | ​ | ​ | (2,130,804) | ​ | ​ | (4,165,937) | ​ | ​ | (573,251)
Accumulated other comprehensive loss |  | ​ | (18,850) | ​ | ​ | (11,853) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (30,703) | ​ | ​ | (4,225)
Valuation increase shared by minority shareholders | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 34,790,000 | ​ | ​ | 34,790,000 | ​ | ​ | 4,787,263
Total non-controlling interests |  | ¥ | 5,109,644 | ​ | ¥ | 3,804,148 | ​ | ¥ | (2,742,154) | ​ | ¥ | (1,581,474) | ​ | ¥ | (16,210,804) | ​ | ¥ | (11,620,640) | ​ | $ | (1,599,053)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June 30, 2025
​ |  | ​ |  | Nanjing |  | Gan Su |  | Qinghai |  | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
​ | ​ | BHD | ​ | Recon | ​ | BHD | ​ | BHD | ​ | FGS |  | ​ | MSJ | ​ | Total | ​ | Total
​ |  | RMB |  | RMB |  | RMB |  | RMB |  | RMB |  | ​ | ​ |  | RMB |  | US Dollars
Paid-in capital |  | ¥ | 926,592 | ​ | ¥ | 200,000 | ​ | ¥ | 4,805,000 | ​ | ​ | — | ​ | ¥ | — | ​ | ​ | — | ​ | ¥ | 5,931,592 | ​ | $ | 828,018
Capital contribution receivable due from non-controlling Interest |  | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (48,870,000) | ​ | ​ | ​ | ​ | ​ | (48,870,000) | ​ | ​ | (6,821,988)
Unappropriated retained earnings (deficit) |  | ​ | 3,477,493 | ​ | ​ | 3,616,001 | ​ | ​ | (8,498,212) | ​ | ​ | (1,452,105) | ​ | ​ | (2,329,068) | ​ | ​ | (92,769) | ​ | ​ | (5,278,660) | ​ | ​ | (736,873)
Accumulated other comprehensive loss | ​ | ​ | (18,850) | ​ | ​ | (11,853) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (30,703) | ​ | ​ | (4,286)
Valuation increase shared by minority shareholders | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 34,790,000 | ​ | ​ | — | ​ | ​ | 34,790,000 | ​ | ​ | 4,856,497
Total non-controlling interests |  | ¥ | 4,385,235 | ​ | ¥ | 3,804,148 | ​ | ¥ | (3,693,212) | ​ | ​ | (1,452,105) | ​ | ¥ | (16,409,068) | ​ | ​ | (92,769) | ​ | ​ | (13,457,771) | ​ | ​ | (1,878,632)

​

​

​

NOTE 24. CONCENTRATIONS

Credit risk

As of June 30, 2024 and June 30, 2025, approximately ¥90.3 million and ¥36.6 million ($5.1 million) of the Company’s cash was on deposit at financial institutions in the PRC, respectively. Per PRC regulations, the maximum insured bank deposit amount is RMB500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥84.4 million and ¥31.1 million ($4.3 million) as of June 30, 2024 and June 30, 2025, respectively. As of June 30, 2024 and June 30, 2025, approximately ¥108.7 million and ¥65.9 million ($9.2 million) of the Company’s cash was on deposit at financial institutions in the Hong Kong, respectively. Per Hong Kong regulations, the maximum insured bank deposit amount is HKD 800,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥105.5 million and ¥63.4 million ($8.8 million) as of June 30, 2024 and June 30, 2025, respectively.

Customer and supplier concentration risk

For the year ended June 30, 2023, CNPC represented 43% and SINOPEC represented 32% of the Company’s total revenue, respectively. At June 30, 2023, CNPC accounted for 31%, SINOPEC represented 27% and another two customers accounted for 11% and 10% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2024, CNPC represented 48% and SINOPEC represented 19% of the Company’s total revenue, respectively. At June 30, 2024, CNPC accounted for 38%, SINOPEC represented 27% and another customer accounted for 6% of the Company’s accounts receivable, net, respectively.

For the year ended June 30, 2025, CNPC represented 44.0% and SINOPEC represented 17.0% of the Company’s total revenue, respectively. At June 30, 2025, CNPC accounted for 17.0%, SINOPEC represented 26.0% and another customer accounted for 57% of the Company’s accounts receivable, net, respectively.

For the fiscal year ended June 30, 2025, two major suppliers accounted for approximately 11.2% and 11.0% of the total purchases, respectively. For the fiscal year ended June 30, 2024, two major suppliers accounted for approximately 18.5% and 14.9% of the total purchases, respectively. For the fiscal year ended June 30, 2023, one major supplier accounted for 26.3% of the total purchases.

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NOTE 25. COMMITMENTS AND CONTINGENCY

(a) Contingency

Severance payments

The Labor Contract Law of the PRC requires employers to assure the liability of severance payments if employment contracts are terminated. The employers will be liable for one month of severance pay for each year of the service provided by the employees. As of June 30, 2025, the Company estimated its severance payments of approximately ¥9.34 million ($1.3 million) which has not been reflected in its consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future.

Legal contingencies

There are no legal contingencies that need to be disclosed.

(b) Purchase commitment

The total future minimum purchase commitment under the non-cancellable purchase contracts as of June 30, 2025 are payable as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
Twelve months ending June 30, |  | RMB | ​ | US Dollars
2026 | ​ | ​ | 42,366,038 | ​ | $ | 5,914,071
Total minimum payments required | ​ | ​ | 42,366,038 | ​ | $ | 5,914,071

​

(c) Leases Commitment

​

The Company has entered into several operating leases for office premises with the property owner and service agreements with a property service company, respectively. According to the agreements, the Company is required to pay rent and property management fees for future periods, of which, future rent payments have been included in lease liabilities as disclosed in Note 12, and the future property management fees payable as of June 30, 2025 are disclosed as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
Twelve months ending June 30, |  | RMB |  | US Dollars
2026 | ​ | ¥ | 2,945,476 | ​ | $ | 411,173
Total |  | ¥ | 2,945,476 | ​ | $ | 411,173

​

​

NOTE 26. RELATED PARTY TRANSACTIONS AND BALANCES

Leases from related parties - The Company has various agreements for the lease of office space owned by the founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥96,875 ($13,524) with annual rental expense at ¥1,162,500 ($ 162,288 million).

​

The details of leases from related parties are as below:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ |  | ​ |  | Monthly Rent |  | Monthly Rent
Lessee |  | Lessor |  | Rent Period |  | RMB |  | US Dollars
Nanjing Recon |  | One of the founders |  | April 1, 2024 - March 31, 2026 |  | ¥ | 40,000 | ​ | $ | 5,584
BHD |  | One of the founders |  | January 1, 2024- Dec 31, 2025 |  | ​ | 33,250 | ​ |  | 4,642
BHD |  | One of the founders |  | January 1, 2024 - Dec 31, 2025 |  | ​ | 23,625 | ​ |  | 3,298

​

As of June 30, 2024, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥1,769,840 ($243,538) and ¥2,111,090 ($290,496), respectively.
​

As of June 30, 2025, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥696,851 ($97,277) and ¥355,601 ($49,640), respectively.

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Guarantee/collateral related parties - The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 15).

NOTE 27. VARIABLE INTEREST ENTITIES

VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Summary information regarding consolidated VIEs and their subsidiaries is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2024 | ​ | June 30, 2025 | ​ | June 30, 2025
​ |  | RMB |  | RMB |  | US Dollars
ASSETS |  | ​ | ​ |  | ​ |  |  | ​ |
Current Assets |  | ​ | ​ |  | ​ |  |  | ​ |
Cash |  | ¥ | 35,357,534 |  | ¥ | 8,486,745 | ​ | $ | 1,184,704
Restricted cash | ​ | ​ | 848,936 | ​ | ​ | 8,204 | ​ | ​ | 1,145
Notes receivable |  | ​ | 1,341,820 |  | ​ | — | ​ |  | —
Accounts receivable, net |  | ​ | 38,631,762 |  | ​ | 35,852,484 | ​ |  | 5,004,814
Inventories, net | ​ | ​ | 1,128,912 | ​ | ​ | 1,344,588 | ​ | ​ | 187,697
Other receivables, net | ​ | ​ | 3,514,776 | ​ | ​ | 4,844,928 | ​ | ​ | 676,326
Loans to third parties-short term | ​ | ​ | 31,008,330 | ​ | ​ | 21,753,233 | ​ | ​ | 3,036,634
Purchase advances, net | ​ | ​ | 30,691 | ​ | ​ | 130,531 | ​ | ​ | 18,221
Contract costs, net | ​ | ​ | 48,335,817 | ​ | ​ | 53,547,408 | ​ | ​ | 7,474,930
Prepaid expenses | ​ | ​ | 138,683 | ​ | ​ | 37,276 | ​ | ​ | 5,205
Operating lease right-of-use assets, net - current |  | ​ | 1,026,599 |  | ​ | — | ​ |  | —
Total current assets |  | ​ | 161,363,860 |  | ​ | 126,005,397 | ​ | ​ | 17,589,676
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 22,137,940 | ​ | ​ | 19,961,664 | ​ | ​ | 2,786,541
Loans to third parties-long term | ​ | ​ | — | ​ | ​ | 18,500,000 | ​ | ​ | 2,582,500
Operating lease right-of-use assets, net - non-current |  | ​ | 7,695,347 |  | ​ | 4,450,450 | ​ |  | 621,259
Total Assets |  | ¥ | 191,197,147 |  | ¥ | 168,917,511 | ​ | $ | 23,579,976
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES |  | ​ | ​ |  | ​ | ​ | ​ |  | ​
Short-term bank loans |  | ¥ | 12,425,959 |  | ¥ | 11,582,336 | ​ | $ | 1,616,832
Accounts payable | ​ | ​ | 10,187,518 | ​ | ​ | 12,113,970 | ​ | ​ | 1,691,045
Other payables | ​ | ​ | 1,160,065 | ​ | ​ | 3,709,852 | ​ | ​ | 517,875
Other payable- related parties | ​ | ​ | 2,252,236 | ​ | ​ | 2,906,544 | ​ | ​ | 405,738
Contract liabilities | ​ | ​ | 1,820,481 | ​ | ​ | 4,719,255 | ​ | ​ | 658,783
Accrued payroll and employees’ welfare | ​ | ​ | 2,030,300 | ​ | ​ | 2,129,242 | ​ | ​ | 297,231
Intercompany payables* | ​ | ​ | 269,423,190 | ​ | ​ | 265,588,956 | ​ | ​ | 37,074,789
Taxes payable | ​ | ​ | 933,219 | ​ | ​ | 795,629 | ​ | ​ | 111,066
Short-term borrowings - related parties | ​ | ​ | 10,002,875 | ​ | ​ | 10,017,250 | ​ | ​ | 1,398,354
Operating lease liabilities - current |  | ​ | 3,741,247 |  | ​ | 1,761,231 | ​ |  | 245,858
Total current liabilities |  | ​ | 313,977,090 |  | ​ | 315,324,265 | ​ | ​ | 44,017,571
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease liabilities - non-current | ​ | ​ | 3,971,285 | ​ | ​ | 1,081,827 | ​ | ​ | 151,017
Long-term borrowings - related party |  | ​ | 10,000,000 |  | ​ | 10,000,000 | ​ |  | 1,395,946
Total Liabilities |  | ¥ | 327,948,375 |  | ¥ | 326,406,092 | ​ | $ | 45,564,534

* | Intercompany payables are eliminated upon consolidation.

​

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The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income (loss) for the year ended June 30, 2023 includes revenue of ¥67,114,378, operating expenses of ¥35,547,439, and net loss of ¥26,349,629. The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income (loss) for the year ended June 30, 2024 includes revenue of ¥68,854,280 ($9,474,664), operating expenses of ¥45,301,827 ($6,233,739), and net loss of ¥19,760,427 ($2,719,125). The financial performance of VIEs and their subsidiaries reported in the consolidated statement of operations and comprehensive income (loss) for the year ended June 30, 2025 includes revenue of ¥66,285,032 ($9,253,034), operating expenses of ¥41,373,992 ($5,775,587), and net loss of ¥23,845,123 ($3,328,651).

​

NOTE 28. SEGMENT REPORTING

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based on management’s assessment, the Company has determined that it has four operating segments: automation product and software, equipment and accessories, oilfield environmental protection and platform outsourcing services.

The following tables present summary information by segment for the years ended June 30, 2023, 2024 and 2025, respectively:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ | ​ | 2023 | ​ | 2024 | ​ | 2025 | ​ | 2025
​ |  | RMB |  | RMB |  | RMB |  | US Dollars
Automation product and software |  | ¥ | 26,628,216 | ​ | ¥ | 26,831,668 | ​ | ¥ | 34,114,673 | ​ | $ | 4,762,225
Equipment and accessories |  | ​ | 16,248,197 | ​ | ​ | 20,471,950 | ​ | ​ | 18,422,895 | ​ | ​ | 2,571,737
Oilfield environmental protection |  | ​ | 19,116,560 | ​ | ​ | 17,576,573 | ​ | ​ | 10,291,333 | ​ | ​ | 1,436,615
Platform outsourcing services | ​ | ​ | 5,121,405 | ​ | ​ | 3,974,089 | ​ | ​ | 3,456,131 | ​ | ​ | 482,457
Total revenue |  | ¥ | 67,114,378 | ​ | ¥ | 68,854,280 | ​ | ¥ | 66,285,032 | ​ | $ | 9,253,034

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the year ended June 30, 2025
​ |  | Automation |  | Equipment, |  | Oilfield |  | Platform |  | ​ | ​ |  |
​ | ​ | product and | ​ | accessories | ​ | environmental | ​ | outsourcing | ​ | Chemical | ​ |
​ | ​ | software | ​ | and others | ​ | protection | ​ | services | ​ | recycle | ​ | Total
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB
Revenue |  | ¥ | 34,114,673 | ​ | ¥ | 18,422,895 | ​ | ¥ | 10,291,333 | ​ | ¥ | 3,456,131 | ​ | ¥ | — | ​ | ¥ | 66,285,032
Cost of revenue and related tax |  | ​ | 28,627,787 | ​ | ​ | 13,224,911 | ​ | ​ | 8,549,392 | ​ | ​ | 642,405 | ​ | ​ | — | ​ | ​ | 51,044,495
Gross profit |  | ¥ | 5,486,886 | ​ | ¥ | 5,197,984 | ​ | ¥ | 1,741,941 | ​ | ¥ | 2,813,726 | ​ | ¥ | — | ​ | ¥ | 15,240,537
Depreciation and amortization |  | ¥ | 521,140 | ​ | ¥ | 577,743 | ​ | ¥ | 2,048,024 | ​ | ¥ | — | ​ | ¥ | 1,029 | ​ | ¥ | 3,147,936
Total capital expenditures |  | ¥ | 254,962 | ​ | ¥ | 557,106 | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | 11,807,768 | ​ | ¥ | 12,619,836
Timing of revenue recognition | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goods transferred at a point in time | ​ | ¥ | 28,284,942 | ​ | ¥ | 18,422,895 | ​ | ¥ | 10,291,333 | ​ | ¥ | 3,456,131 | ​ | ¥ | — | ​ | ¥ | 60,455,301
Services rendered over time | ​ | ​ | 5,829,731 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,829,731
Total revenue |  | ¥ | 34,114,673 | ​ | ¥ | 18,422,895 | ​ | ¥ | 10,291,333 | ​ | ¥ | 3,456,131 | ​ | ¥ | — | ​ | ¥ | 66,285,032

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​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the year ended June 30, 2024
​ |  | Automation |  | Equipment, |  | Oilfield |  | Platform |  | ​ | ​ | ​ | ​ | ​
​ | ​ | product and | ​ | accessories | ​ | environmental | ​ | outsourcing | ​ | Chemical | ​ | ​ | ​
​ | ​ | software | ​ | and others | ​ | protection | ​ | services | ​ | recycle | ​ | Total
​ |  | RMB |  | RMB |  | RMB |  | RMB |  | RMB |  | RMB
Revenue |  | ¥ | 26,831,668 |  | ¥ | 20,471,950 |  | ¥ | 17,576,573 |  | ¥ | 3,974,089 |  | ¥ | — | ​ | ¥ | 68,854,280
Cost of revenue and related tax |  | ​ | 23,864,941 |  | ​ | 14,097,459 |  | ​ | 9,240,828 |  | ​ | 637,903 |  | ​ | 135,705 | ​ | ​ | 47,976,836
Gross profit |  | ¥ | 2,966,727 |  | ¥ | 6,374,491 |  | ¥ | 8,335,745 |  | ¥ | 3,336,186 |  | ¥ | (135,705) | ​ | ¥ | 20,877,444
Depreciation and amortization |  | ¥ | 493,633 |  | ¥ | 289,234 |  | ¥ | 2,059,292 |  | ¥ | 1,866 |  | ¥ | — | ​ | ¥ | 2,844,025
Total capital expenditures |  | ¥ | 146,367 |  | ¥ | 150,081 |  | ¥ | — |  | ¥ | 2,989 |  | ¥ | 15,000,251 | ​ | ¥ | 15,299,688
Timing of revenue recognition | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goods transferred at a point in time | ​ | ¥ | 20,032,784 | ​ | ¥ | 20,471,950 | ​ | ¥ | 17,576,573 | ​ | ¥ | 199,918 | ​ | ¥ | — | ​ | ¥ | 58,281,225
Services rendered over time | ​ | ​ | 6,798,884 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,774,171 | ​ | ​ | — | ​ | ​ | 10,573,055
Total revenue |  | ¥ | 26,831,668 | ​ | ¥ | 20,471,950 | ​ | ¥ | 17,576,573 | ​ | ¥ | 3,974,089 | ​ | ¥ | — | ​ | ¥ | 68,854,280

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the year ended June 30, 2023
​ |  | Automation |  | Equipment |  | Oilfield |  | Platform |  | ​ | ​
​ | ​ | product and | ​ | and | ​ | environmental | ​ | outsourcing | ​ | ​ | ​
​ | ​ | software | ​ | accessories | ​ | protection | ​ | services | ​ | Total
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB | ​ | RMB
Revenue |  | ¥ | 26,628,216 | ​ | ¥ | 16,248,197 | ​ | ¥ | 19,116,560 | ​ | ¥ | 5,121,405 | ​ | ¥ | 67,114,378
Cost of revenue and related tax |  | ​ | 23,610,281 | ​ | ​ | 8,945,796 | ​ | ​ | 13,955,673 | ​ | ​ | 1,735,645 | ​ | ​ | 48,247,395
Gross profit |  | ¥ | 3,017,935 | ​ | ¥ | 7,302,401 | ​ | ¥ | 5,160,887 | ​ | ¥ | 3,385,760 | ​ | ¥ | 18,866,983
Depreciation and amortization |  | ¥ | 857,332 | ​ | ¥ | 689,552 | ​ | ¥ | 2,077,165 | ​ | ¥ | 59,537 | ​ | ¥ | 3,683,586
Total capital expenditures |  | ¥ | 803,311 | ​ | ¥ | 46,681 | ​ | ¥ | 75,728 | ​ | ¥ | 14,953 | ​ | ¥ | 940,673
Timing of revenue recognition | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goods transferred/service rendered at a point in time | ​ | ¥ | 18,640,699 | ​ | ¥ | 16,248,197 | ​ | ¥ | 19,116,560 | ​ | ¥ | 4,470,462 | ​ | ¥ | 58,475,918
Services rendered over time | ​ | ​ | 7,987,517 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 650,943 | ​ | ​ | 8,638,460
Total revenue |  | ¥ | 26,628,216 | ​ | ¥ | 16,248,197 | ​ | ¥ | 19,116,560 | ​ | ¥ | 5,121,405 | ​ | ¥ | 67,114,378

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
Total assets: |  | ​ |  |  | ​ |  |  | ​ |
Automation product and software |  | ¥ | 132,194,082 |  | ¥ | 125,953,243 | ​ | $ | 17,582,395
Equipment, accessories and others |  | ​ | 145,316,223 |  | ​ | 131,869,561 | ​ | ​ | 18,408,281
Oilfield environmental protection |  | ​ | 78,023,782 |  | ​ | 74,481,593 | ​ | ​ | 10,397,229
Platform outsourcing services | ​ | ​ | 61,931,606 | ​ | ​ | 57,208,575 | ​ | ​ | 7,986,009
Chemical recycling | ​ | ​ | 134,923,821 | ​ | ​ | 136,108,153 | ​ | ​ | 18,999,967
Total assets |  | ¥ | 552,389,514 |  | ¥ | 525,621,125 | ​ | $ | 73,373,881

​

​

NOTE 29. SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on October 15, 2025, and the Company has evaluated subsequent events through this date.

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NOTE 30. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Pursuant to the requirements of Rules 12-04(a), 5-04(c), and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirements and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and VIEs exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed financial statements for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries and VIEs shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIEs in the form of loans, advances, or cash dividends without the consent of a third party.

The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and the respective profit or loss as “Equity in earnings of subsidiaries and VIEs” on the condensed statements of income.

The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of June 30, 2024 and June 30, 2025, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

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RECON TECHNOLOGY, LTD

PARENT COMPANY BALANCE SHEETS (UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, |  | June 30, |  | June 30,
​ | ​ | 2024 | ​ | 2025 | ​ | 2025
​ | ​ | RMB | ​ | RMB | ​ | US Dollars
ASSETS |  | ​ |  | ​ |  |  |  | ​ |
Cash | ​ | ¥ | 16,473,018 | ​ | ¥ | 58,938,178 | ​ | $ | 8,227,452
Short-term investments | ​ | ​ | 88,091,794 | ​ | ​ | 3,599,211 | ​ | ​ | 502,430
Due from intercompany* | ​ | ​ | 375,736,992 | ​ | ​ | 467,888,857 | ​ | ​ | 65,314,766
Other current assets | ​ | ​ | 170,158,947 | ​ | ​ | 101,882,614 | ​ | ​ | 14,222,266
Total Current Assets | ​ | ​ | 650,460,751 | ​ | ​ | 632,308,860 | ​ | ​ | 88,266,914
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Investment in subsidiaries and VIEs |  | ​ | (145,408,577) | ​ | ​ | (162,651,169) | ​ | ​ | (22,705,228)
Total Assets |  | ¥ | 505,052,174 | ​ | ¥ | 469,657,691 | ​ | $ | 65,561,686
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES AND SHAREHOLDERS’ EQUITY |  | ​ |  | ​ |  |  | ​ |  |
Other current liabilities | ​ | ​ | 2,490,668 | ​ | ​ | 2,229,485 | ​ | ​ | 311,224
Total Current Liabilities | ​ | ​ | 2,490,668 | ​ | ​ | 2,229,485 | ​ | ​ | 311,224
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Warrant liability - non-current | ​ | ​ | 6,969 | ​ | ​ | 688 | ​ | ​ | 96
Total Liabilities |  | ¥ | 2,497,637 | ​ | ¥ | 2,230,173 | ​ | $ | 311,320
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
COMMITMENTS AND CONTINGENCIES |  | ​ |  | ​ |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SHAREHOLDERS’ EQUITY |  | ​ |  | ​ |  |  | ​ |  |
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 7,987,959 shares and 10,627,426 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively** |  | ​ | 99,634 | ​ | ​ | 101,548 | ​ | ​ | 14,176
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares and 20,000,000 shares issued and outstanding as of June 30, 2024 and June 30, 2025, respectively** |  | ​ | 4,693 | ​ | ​ | 14,038 | ​ | ​ | 1,960
Additional paid-in capital** |  | ​ | 681,476,717 | ​ | ​ | 692,569,747 | ​ | ​ | 96,679,009
Accumulated deficit |  | ​ | (216,163,156) | ​ |  | (258,751,710) | ​ | ​ | (36,120,346)
Accumulated other comprehensive income |  | ​ | 37,136,649 | ​ |  | 33,493,895 | ​ | ​ | 4,675,567
Total Shareholders’ Equity |  | ​ | 502,554,537 | ​ |  | 467,427,518 | ​ | ​ | 65,250,366
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Liabilities and Shareholders’ Equity |  | ¥ | 505,052,174 | ​ | ¥ | 469,657,691 | ​ | $ | 65,561,686

* | Due from intercompany are eliminated upon consolidation.

** | Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024 and change in capital structure on March 29, 2024.

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RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ |  | 2023 |  | 2024 |  | 2025 |  | 2025
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | US Dollars
Revenue | ​ | ¥ | — | ​ | ¥ | — | ​ | ¥ | — | ​ | $ | —
Cost of revenue | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross profit | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
General and administrative expenses | ​ | ​ | 54,494,219 | ​ | ​ | 44,012,602 | ​ | ​ | 27,947,713 | ​ | ​ | 3,901,350
Provision for credit losses | ​ | ​ | (4,141,588) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Loss from operations | ​ | ​ | (50,352,631) | ​ | ​ | (44,012,602) | ​ | ​ | (27,947,713) | ​ | ​ | 3,901,350
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Fair value changes of warrants liability | ​ | ​ | 6,116,000 | ​ | ​ | (933,995) | ​ | ​ | 6,226 | ​ | ​ | 869
Other income | ​ | ​ | 10,108,783 | ​ | ​ | 17,386,784 | ​ | ​ | 8,950,199 | ​ | ​ | 1,249,400
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity in loss of subsidiaries, VIEs and VIEs’ subsidiaries | ​ | ​ | (25,039,453) | ​ | ​ | (22,311,446) | ​ | ​ | (23,597,266) | ​ | ​ | (3,294,051)
​ | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ | ​ | ​
Net loss | ​ | ¥ | (59,167,301) | ​ | ¥ | (49,871,259) | ​ | ¥ | (42,588,554) | ​ | $ | (5,945,132)
​ | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ | ​ | ​
Foreign currency translation adjustment | ​ | ​ | 23,819,712 |  | ​ | 2,009,476 |  | ​ | (3,642,754) | ​ | ​ | (508,509)
Comprehensive loss attributable to the Company | ​ | ¥ | (35,347,589) |  | ¥ | (47,861,783) | ​ | ¥ | (46,231,308) | ​ | $ | (6,453,641)

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RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF CASH FLOWS (UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the years ended June 30,
​ |  | 2023 |  | 2024 |  | 2025 |  | 2025
​ | ​ | RMB | ​ | RMB | ​ | RMB | ​ | US Dollars
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net loss | ​ | ¥ | (59,167,301) | ​ | ¥ | (49,871,259) | ​ | ¥ | (42,588,554) | ​ | $ | (5,945,133)
Adjustments to reconcile net cash flows from operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Changes in warrants liabilities | ​ | ​ | (6,116,000) | ​ | ​ | 933,995 | ​ | ​ | (6,226) | ​ | ​ | (869)
Amortization of offering cost of warrants | ​ | ​ | 1,483,306 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Provision for doubtful accounts | ​ | ​ | (4,141,588) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Restricted shares issued for management and employees | ​ | ​ | 26,191,707 | ​ | ​ | 22,427,682 | ​ | ​ | 10,279,881 | ​ | ​ | 1,435,016
Accrued interest income from loans to third parties | ​ | ​ | — | ​ | ​ | (4,058,536) | ​ | ​ | (8,253,064) | ​ | ​ | (1,152,083)
Accrued interest income from short-term investment | ​ | ​ | — | ​ | ​ | (885,394) | ​ | ​ | (17,411) | ​ | ​ | (2,430)
Restricted shares issued for services | ​ | ​ | 5,805,840 | ​ | ​ | 1,070,143 | ​ | ​ | — | ​ | ​ | —
Equity in earnings of subsidiaries and VIEs | ​ | ​ | 25,039,453 | ​ | ​ | 22,311,446 |  | ​ | 23,597,266 | ​ |  | 3,294,051
Other current assets | ​ | ​ | (8,396,555) | ​ | ​ | 3,743,536 | ​ | ​ | (89,032) | ​ | ​ | (12,430)
Other current liabilities | ​ | ​ | (3,587,540) | ​ | ​ | (1,474,244) | ​ | ​ | (261,185) | ​ | ​ | (36,460)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net cash used in operating activities | ​ | ​ | (22,888,678) | ​ | ​ | (5,802,631) |  | ​ | (17,338,325) | ​ |  | (2,420,338)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Repayments from loans to third parties | ​ | ​ | 32,413,311 | ​ | ​ | 75,987,831 | ​ | ​ | 100,000,000 | ​ | ​ | 13,959,462
Payments made for loans to third parties | ​ | ​ | (79,546,761) | ​ | ​ | (165,837,504) | ​ | ​ | (21,490,800) | ​ | ​ | (3,000,000)
Payments for short-term investments | ​ | ​ | — | ​ | ​ | (87,206,400) | ​ | ​ | (3,581,800) | ​ | ​ | (500,000)
Redemption of short-term investments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 87,239,515 | ​ | ​ | 12,178,167
Due from intercompany, VIEs and VIEs’ subsidiaries | ​ | ​ | (86,300,464) | ​ | ​ | (84,211,565) | ​ | ​ | (92,151,863) | ​ | ​ | (12,863,904)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net cash (used in) provided by investing activities | ​ | ​ | (133,433,914) | ​ | ​ | (261,267,638) | ​ | ​ | 70,015,052 | ​ | ​ | 9,773,725
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from warrants issued with common share | ​ | ​ | 17,493,069 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Proceeds from sale of common share, net of issuance costs | ​ | ​ | 28,174,993 | ​ | ​ | 77,711,533 | ​ | ​ | (2,529,724) | ​ | ​ | (353,136)
Proceeds from sale of prefunded warrants, net of issuance costs | ​ | ​ | 3,750,282 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Redemption of warrants | ​ | ​ | — | ​ | ​ | (32,617,499) | ​ | ​ | — | ​ | ​ | —
Net cash (used in) provided by financing activities | ​ | ​ | 49,418,344 | ​ | ​ | 45,094,034 | ​ | ​ | (2,529,724) | ​ | ​ | (353,136)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Effect of exchange rate fluctuation on cash | ​ | ​ | 46,211,878 | ​ | ​ | 2,302,664 | ​ | ​ | (7,681,843) | ​ | ​ | (1,072,344)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net increase (decrease) in cash | ​ | ​ | (60,692,370) | ​ | ​ | (219,673,571) | ​ | ​ | 42,465,160 | ​ | ​ | 5,927,907
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash, beginning of year | ​ | ​ | 296,838,959 | ​ | ​ | 236,146,589 | ​ | ​ | 16,473,018 | ​ | ​ | 2,299,545
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash, end of year | ​ | ¥ | 236,146,589 | ​ | ¥ | 16,473,018 | ​ | ¥ | 58,938,178 | ​ | $ | 8,227,452

​

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