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Recon Technology, Ltd. Reports Fiscal Year 2016 Third Quarter Financial Results

BEIJING, May 16, 2016 /PRNewswire/ --  Recon Technology, Ltd. (NASDAQ: RCON) ("Recon" or the "Company") a leading independent oilfield services provider operating primarily in China, today reported its financial results for the third quarter of fiscal year 2016, which ended March 31, 2016.

Q3 FY2016 Financial Highlights:

  • Total revenues for the third quarter of FY2016 were RMB 4.5 million ($0.7 million), a decrease of 77.3% from the same period of last fiscal year.
  • Gross profit for the third quarter of FY2016 was RMB 1.7 million ($0.3 million), a decrease of 72.8% from the same period of last fiscal year. Gross margin was 37.5% for the third quarter of FY2016, compared to 31.2% for the same period last fiscal year.
  • Operating loss was RMB 8.2 million ($1.3 million) for the third quarter of FY2016, compared to operating income of RMB0.4 million for the same period last fiscal year.
  • Net loss attributable to Recon for the third quarter of FY2016 was RMB 9.6 million ($1.5 million), or RMB 1.66 ($0.26) per diluted share, compared to RMB 1.5 million, or RMB  0.32 per diluted share, for the same period last fiscal year.
  • Adjusted EBITDA (non-GAAP) was negative RMB 4.9 million ($0.7 million) for the third quarter of FY2016, compared to RMB 1.7 million for the same period last fiscal year.
  • Adjusted net loss attributable to Recon was RMB 6.7 million ($1.0 million), or RMB 1.16 ($0.18) per diluted share, for the third quarter of FY2016, compared to adjusted net loss attributable to Recon of RMB 0.6 million, or RMB 0.12 per diluted share, for the same period last fiscal year.

Mr. Shenping Yin, Chairman and CEO of Recon stated, "Affected by unfavorable oil prices and tough market competition, our business has remained sluggish.  We cannot determine when this market situation will recover, but our management team is working to expand into new markets based on our long-term business relationships and good reputation in the industry. "  

Q3 FY2016 Financial Results

Revenues

For the three months ended March 31, 2016, total revenues decreased by 77.3% to RMB 4.5 million ($0.7 million) from RMB 20.0 million for the same period last fiscal year mainly as a result of weak demand from our clients, affected by global unfavorable oil prices. Revenues from non-related party hardware and software sales decreased by RMB 13.8 million, or 75.3%, to RMB 4.5 million ($0.7 million) for the three months ended March 31, 2016, compared to RMB 18.3 million for the same period last fiscal year. The Company booked no revenues from related-party hardware and software sales for the three months ended March 31, 2016, as compared to RMB 1.6 million for the same period last fiscal year.

Gross profit and gross margin

Cost of revenues decreased by RMB 10.9 million, or 79.4%, to RMB 2.8 million ($0.4 million) for the three months ended March 31, 2016 from RMB 13.8 million for the same period last fiscal year.

Gross profit decreased by RMB 4.5 million, or 72.8%, to RMB 1.7 million ($0.3 million) for the three months ended March 31, 2016 from RMB 6.2 million for the same period of last fiscal year. Overall gross margin as a percentage of revenue was 37.5% for the three months ended March 31, 2016, compared to 31.2% for the same period of last fiscal year.

Operating income (loss) and operating (loss) margin

Selling and distribution expenses decreased by RMB 0.3 million, or 26.2%, to RMB 0.8 million ($0.1 million) for the three months ended March 31, 2016 from RMB 1.1 million for the same period last fiscal year. General and administrative expenses increased by RMB 3.7 million, or 88.5%, to RMB 7.9 million ($1.2 million) for the three months ended March 31, 2016 from RMB 4.2 million for the same period last fiscal year. Research and development expenses increased by RMB 0.7 million, or 125.7%, to RMB 1.2 million ($0.2 million) for the three months ended March 31, 2016 from RMB 0.5 million for the same period last fiscal year as a result of increased research and development effort on automation platform system. Total operating expenses increased by RMB 4.1 million, or 70.2%, to RMB 9.9 million ($1.5 million) for the three months ended March 31, 2016 from RMB 5.8 million for the same period last fiscal year.

Operating loss was RMB 8.2 million ($1.3 million) for the three months ended March 31, 2016, compared to operating income of RMB 0.4 million for the same period last fiscal year. Operating loss margin was 181.6% for the three months ended March, 2016, compared to operating profit margin of 2.0% for the same period last fiscal year. 

Net loss

Net loss to our shareholders for the three months ended March 31, 2016 was RMB 9.6 million ($1.5 million), or RMB 1.66 ($0.26) per diluted share, compared to net loss of RMB 1.5 million, or RMB0.32 per diluted share, for the same period last fiscal year.

Non-GAAP Measures

Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense (benefit), interest expense, change in fair value of warrants liability, restricted shares issued for consulting services, non-cash stock compensation expense, depreciation and amortization, was negative RMB 4.9 million ($0.7 million) for the three months ended March 31, 2016, compared to RMB 1.7 million for the same period last fiscal year. Adjusted net loss attributable to our shareholders was RMB 6.7 million ($1.0 million), or RMB 1.16 ($0.18) per diluted share, for the three months ended March 31, 2016, compared to RMB 0.6 million, or RMB 0.12 per diluted share, for the same period last fiscal year.

Year-to-Date (Nine Months) FY2016 Financial Results

Revenues

Total revenues for the nine months ended March 31, 2016 decreased by RMB 8.7 million, or 19.0%, to RMB 37.0 million ($5.7 million) from RMB 45.7 million for the same period last fiscal year. This decrease was mainly due to decreased sales of furnaces and consignment stock products for oilfield projects.

Revenues from hardware and software to non-related parties decreased by RMB 7.2 million, or 16.8%, to RMB 35.8 million ($5.6 million) for the nine months ended March 31, 2016 from RMB 43.1 million for the same period last fiscal year,  mainly due to the decrease in sales of furnaces and automation products, affected by low demand from clients. Revenues from service increased to RMB 1.1 million ($0.2 million) for the nine months ended March 31, 2016 from RMB 0.1 million for the same period last fiscal year. The Company didn't book any revenues from sales of hardware and software to related parties for the nine months ended March 31, 2016, versus RMB 2.4 million for the same period last fiscal year.

Gross profit and gross margin

Cost of revenues decreased by RMB 0.7 million, or 2.3%, to RMB 29.1 million ($4.5 million) for the nine months ended March 31, 2016 from RMB 29.8 million for the same period last fiscal year.

Gross profit decreased by RMB 8.0 million, or 50.4%, to RMB 7.9 million ($1.2 million) for the nine months ended March 31, 2016 from RMB 15.8 million for the same period last fiscal year. Overall gross margin was 21.3% for the nine months ended March 31, 2016, compared to 34.7% for the same period last fiscal year. The decrease in overall gross margin was mainly due to the decrease in software sales with high margins and fierce competition of our equipment sales.  

Operating income (loss) and operating (loss) margin

Selling and distribution expenses increased by RMB 0.4 million, or 12.3%, to RMB 3.4 million ($0.5 million) for the nine months ended March 31, 2016 from RMB 3.0 million for the same period last fiscal year. General and administrative expenses increased by RMB 6.9 million, or 57.4%, to RMB 18.9 million ($2.9 million) for the nine months ended March 31, 2016 from RMB 12.0 million for the same period last fiscal year. Research and development expenses increased by RMB 3.3 million, or 135.6%, to RMB 5.8 million ($0.9 million) for the nine months ended March 31, 2016 from RMB 2.4 million for the same period last fiscal year as a result of increased research and development effort on downhole service tools and automation platform system. Total operating expenses increased by RMB 10.6 million, or 60.4%, to RMB 28.1 million ($4.3 million) for the nine months ended March 31, 2016 from RMB 17.5 million for the same period last fiscal year.

Operating loss was RMB 20.2 million ($3.1 million) for the nine months ended March 31, 2016, compared to RMB 1.7 million for the same period last fiscal year. Operating loss margin was 54.6% for the nine months ended March 2016, compared to 3.6% for the same period last fiscal year. 

Net loss

Net loss to our shareholders for the nine months ended March 31, 2016 was RMB 21.0 million ($3.2 million), or RMB3.75 ($0.58) per diluted share, compared to net loss of RMB 0.4 million, or RMB 0.08 per diluted share, for the same period last fiscal year.

Non-GAAP Measures

Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense (benefit), interest expense, change in fair value of warrants liability, restricted shares issued for consulting services, non-cash stock compensation expense, depreciation and amortization, was negative RMB 13.0 million ($2.0 million) for the nine months ended March 31, 2016, compared to RMB 2.9 million for the same period last fiscal year. Adjusted net loss attributable to our shareholders was RMB15.0 million ($2.3 million), or RMB 2.68 ($0.41) per diluted share, for the nine months ended March 31, 2016, compared to net income of RMB 0.7million, or RMB 0.15 per diluted share, for the same period last fiscal year.

Financial Position  

As of March 31, 2016, the Company had cash of RMB 2.6 million ($0.4 million), short-term bank loans of RMB 7.0 million ($1.1 million), and short-term borrowings from related parties of RMB 8.6 million ($1.3 million), compared to RMB12.3 million, RMB 7.0 million, and RMB 16.9 million, respectively, at June 30, 2015. Working capital as of March 31, 2016 was RMB 64.3 million ($10.0 million) as compared to RMB 72.4 million at June 30, 2015. Net cash used in operating activities was RMB 1.3 million ($0.2 million) for the nine-month ended March 31, 2016, compared to net cash used in operating activities of RMB 16.2 million for the same period last fiscal year. Net cash used in investing activities was RMB 0.4 million ($0.06 million) for the nine months ended March 31, 2016, compared to RMB 0.16 million for the same period last fiscal year. Net cash used in financing activities was RMB 8.0 million ($1.2 million) for the nine months ended March 31, 2016, compared to net cash provided by financing activities of RMB 3.0 million for the same period of last fiscal year. During the nine-month period ended March 31, 2016, we repaid RMB 16.7 million ($2.6 million) of short-term borrowings to two related parties, repaid RMB 0.50 million ($0.08 million) short-term bank loans, and received RMB 8.5 million ($1.3 million) from one related party. We also issued 15,874 shares of common stocks through an at-the-market offering and received net proceeds of RMB 0.17 million ($0.03 million) during the nine-month period ended March 31, 2016.

Recent Development 

On May 2, 2016, the Company filed an 8K/A for QHHY's audited FS for fiscal year 2014 and fiscal year 2015, with a review report for the quarter ended December 31, 2015.

On February 12, 2016, the Company filed a current report on Form 8-K/A for QHHY's audited financial statements for fiscal year 2014 and fiscal year 2015, with a review report for the quarter ended September 30, 2015.

On February 2, 2016, Beijing BHD Petroleum Technology Co., Ltd. ("BHD"), a wholly-owned subsidiary of the Company, received two orders for a total  of RMB 2.1 million (~US$0.3 million) from PetroChina's oilfield companies. The first order, dated January 12, 2016, is to supply two heat exchanger units, a major component of furnaces, to PetroChina's Jilin Oilfield for RMB 650 thousand (~US$0.1 million), with a scheduled delivery date of no later than March 15, 2016. The second order, dated January 21, 2016, is to supply two furnaces to PetroChina's Huabei Oilfield for RMB 1.47 million (~US$0.2 million), with a scheduled delivery date of February 29, 2016.

On January 20, 2016, Nanjing Recon Technology Co., Ltd. ("Nanjing Recon"), a subsidiary of the Company, obtained qualifications to provide services for some state-owned electric companies and, as a result, has participated in bidding projects, including projects for China Huadian Corp.

On January 12, 2016, BHD executed an agreement (the "Agreement") with Qinghai Oilfield, a PetroChina subsidiary, to sell chemical agents (the "Chemicals") to Qinghai Oilfield. The Chemicals, including Ion Modifiers and Water Quality Stabilizers, are designed and tested by BHD and are to be used for wastewater treatment at the Qinghai Oilfield. This Agreement, which is valued at RMB 3.98 million (~$0.6 million), is expected to be completed by the end of fiscal year 2016.  

On December 14, 2015, BHD won a major bidding contract with PetroChina and was deemed a Class A Furnace Supplier to all PetroChina's oilfield companies. With this bidding and qualification, BHD will participate in PetroChina's furnace procurement program, which was worth over RMB 2.9 billion (approximately $457 million) during the period Oct. 2015 to Sep. 2017. The Company also announced that BHD has secured a RMB 3.22 million (~$0.5 million) contract to supply five furnaces to PetroChina's Huabei Oilfield under this bidding process.

On December 1, 2015, the Company entered into a share purchase agreement to acquire 100% of the equity interest in Qinghai Huayou Downhole Technologies Co., Ltd. ( "QHHY"), a PRC corporation and oilfield service provider in Qinghai province.

About Recon Technology, Ltd.

Recon Technology, Ltd. is China's first independent oil and gas field service company listed on NASDAQ (RCON). Working closely with leading global partners, Recon has been focusing on supplying China's largest oil and gas exploration companies, including Sinopec and China National Petroleum Corporation, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measures. The solutions Recon provides are aimed at increasing gas and petroleum extraction levels, reducing impurities, improving safety and lowering production costs. For additional information, please visit www.recon.cn.

Cautionary Statements

Statements made in this release with respect to Recon's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Recon. 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. Recon 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.

Contact:

Recon Technology, Ltd. 
Jia Liu, Chief Financial Officer 
Tel: +86-10-8494-5799 
Email: [email protected] 


RECON TECHNOLOGY, LTD


CONDENSED CONSOLIDATED BALANCE SHEETS


(UNAUDITED)














As of Jun 30,



As of Mar 31,



As of Mar 31,




2015



2016



2016




RMB



RMB



U.S. Dollars


Current assets










Cash

RMB

12,344,929


RMB

2,619,943


$

406,234


Notes receivable


4,205,530



1,498,710



232,382


Trade accounts receivable, net


52,186,397



50,248,411



7,791,236


Trade accounts receivable- related parties, net


4,769,800



-



-


Inventories, net


10,845,007



10,436,502



1,618,225


Other receivables, net


18,064,568



22,358,526



3,466,788


Other receivables- related parties


91,021



-



-


Purchase advances, net


18,622,538



10,425,075



1,616,454


Purchase advances- related parties


394,034



-



-


Prepaid expenses


826,314



590,412



91,548


Prepaid expenses - related parties


420,000



630,000



97,684


Deferred tax assets


1,742,098



-



-


Total current assets


124,512,236



98,807,579



15,320,551












Property and equipment, net


2,666,953



2,430,926



376,926


Long-term trade accounts receivable, net


4,440,665



484,265



75,087


Long-term other receivable


2,729,033



692,325



107,348


Total Assets

RMB

134,348,887


RMB

102,415,095


$

15,879,912












LIABILITIES AND EQUITY










Current liabilities










Short-term bank loans

RMB

7,000,000


RMB

7,000,000


$

1,085,381


Trade accounts payable


13,627,088



10,174,308



1,577,571


Trade accounts payable- related parties


3,528,705



-



-


Other payables


2,103,057



2,923,271



453,266


Other payable- related parties


4,309,702



3,650,329



566,000


Deferred revenue


2,285,529



304,335



47,188


Advances from customers


529,700



386,294



59,897


Accrued payroll and employees' welfare


246,789



328,817



50,985


Accrued expenses


199,166



203,109



31,493


Taxes payable


1,153,216



804,818



124,791


Short-term borrowings - related parties


16,916,905



8,557,771



1,326,920


Deferred tax liability


180,186



180,186



27,939


Total current liabilities


52,080,043



34,513,238



5,351,431












Equity










Common stock, ($ 0.0185 U.S. dollar par
value, 100,000,000 shares authorized;
5,427,946 and 5,804,005 shares issued and
outstanding as of June 30, 2015 and March 31,
2016, respectively)


697,217



741,467



114,968


Additional paid-in capital


92,541,687



99,055,188



15,358,941


Statutory reserve


4,148,929



4,148,929



643,310


Accumulated deficit


(23,024,935)



(44,020,117)



(6,825,512)


Accumulated other comprehensive loss


(317,551)



(254,151)



(39,407)


Total shareholders' equity


74,045,347



59,671,316



9,252,300


Non-controlling interest


8,223,497



8,230,541



1,276,181


Total equity


82,268,844



67,901,857



10,528,481


Total Liabilities and Equity

RMB

134,348,887


RMB

102,415,095


$

15,879,912

 

 

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME LOSS

(UNAUDITED)



For the nine months ended

For the three months ended


Mar 31,

Mar 31,



2015



2016


2016


2015



2016


2016



RMB



RMB


USD


RMB



RMB


USD


















Revenues

















Hardware and software

RMB

43,119,915


RMB

35,877,231


$

5,562,922

RMB

18,358,835


RMB

4,539,099


$

703,807

Service


103,774



1,098,258



170,290


-



-



-

Hardware and software - related parties


2,428,173



-



-


1,660,055



-



-

Total revenues


45,651,862



36,975,489



5,733,212


20,018,890



4,539,099



703,807



-



-



-


-



-



-

Cost of revenues

















Hardware and software

RMB

29,782,617


RMB

28,434,196


$

4,408,847

RMB

13,759,652


RMB

2,839,120


$

440,218

Service


-



676,970



104,967


-



-



-

Hardware and software - related parties


27,161



-



-


10,399



-



-

Total cost of revenues


29,809,778



29,111,166



4,513,814


13,770,051



2,839,120



440,218

Gross profit


15,842,084



7,864,323



1,219,398


6,248,839



1,699,979



263,589



































Selling and distribution expenses


3,065,098



3,443,464



533,924


1,109,838



819,116



127,008

General and administrative expenses


11,987,761



18,865,639



2,925,200


4,191,030



7,898,857



1,224,752

Research and development expenses


2,444,020



5,757,141



892,670


544,063



1,228,105



190,423

Operating expenses


17,496,879



28,066,244



4,351,794


5,844,931



9,946,078



1,542,183



































Income (loss) from operations


(1,654,795)



(20,201,921)



(3,132,396)


403,908



(8,246,099)



(1,278,594)


















Other income (expenses)

















Subsidy income


639,473



289,087



44,824


155,155



164,367



25,486

Interest income


225,701



147,092



22,807


68,233



42,373



6,570

Interest expense


(808,065)



(672,789)



(104,319)


(339,109)



(198,589)



(30,792)

Change in fair value of warrants liability


4,068,329



-



-


(9,188)



-



-

Income (loss) from foreign currency exchange


(19,081)



(21,032)



(3,261)


1,799



(20,830)



(3,230)

Loss from warrants redemption


(1,913,262)



-



-


(1,913,262)



-



-

Other income


112,325



9,153



1,419


35,653



44,323



6,872

Other income (expense)


2,305,420



(248,489)



(38,530)


(2,000,719)



31,644



4,906

Income (loss) before income tax


650,625



(20,450,410)



(3,170,926)


(1,596,811)



(8,214,455)



(1,273,688)

Provision (benefit) for income tax


468,005



544,772



84,469


(180,927)



1,412,945



219,083

Net Income (loss)


182,620



(20,995,182)



(3,255,395)


(1,415,884)



(9,627,400)



(1,492,771)



-



-



-


-



-



-

Less: Net income attributable to non-controlling interest


546,071



-



-


111,398



-



-

Net Loss attributable to Recon Technology, Ltd

RMB

(363,451)


RMB

(20,995,182)


$

(3,255,395)

RMB

(1,527,282)


RMB

(9,627,400)


$

(1,492,771)


















Comprehensive income (loss)

















Net income (loss)


182,620



(20,995,182)



(3,255,395)


(1,415,884)



(9,627,400)



(1,492,771)

Foreign currency translation adjustment


(2,854)



63,400



9,830


(7,580)



(59,390)



(9,209)

Comprehensive income (loss)


179,766



(20,931,782)



(3,245,565)


(1,423,464)



(9,686,790)



(1,501,980)

Less: Comprehensive income attributable to non-
controlling interest


545,952



7,044



1,092


111,032



(6,599)



(1,023)

Comprehensive loss attributable to Recon Technology, Ltd

RMB

(366,186)


RMB

(20,938,826)


$

(3,246,657)

RMB

(1,534,496)


RMB

(9,680,191)


$

(1,500,957)


















Earnings (loss) per common share - basic

RMB

(0.08)


RMB

(3.75)


$

(0.58)

RMB

(0.32)


RMB

(1.66)


$

(0.26)

Earnings (loss) per common share - diluted

RMB

(0.08)


RMB

(3.75)


$

(0.58)

RMB

(0.32)


RMB

(1.66)


$

(0.26)

Weighted - average shares -basic


4,773,803



5,603,229



5,603,229


4,839,004



5,804,005



5,804,005

Weighted - average shares -diluted


4,773,803



5,603,229



5,603,229


4,839,004



5,804,005



5,804,005

 

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



For the nine months ended March 31,


2015


2016


2016


RMB


RMB


U.S. Dollars


Cash flows from operating activities:









Net income (loss)

RMB

182,620


RMB

(20,995,182)


$

(3,255,395)

Adjustments to reconcile net income (loss) to net cash     used in operating activities:









Depreciation


369,284



728,092



112,894

Gain from disposal of  equipment


(149,504)



(40,688)



(6,309)

Provision for doubtful accounts


254,622



4,334,148



672,029

Reversal for slow moving inventories


-



(95,122)



(14,749)

Share based compensation


2,023,761



4,134,042



641,001

Deferred tax (benefit) provision


(50,481)



1,742,098



270,120

Change in fair value of warrants liability


(4,068,329)



-



-

Restricted shares issued for services


1,204,903



1,871,722



290,219

Loss from warrants redemption


1,913,262



-



-

Changes in operating assets and liabilities:









Notes receivable


(400,000)



2,706,820



419,704

Trade accounts receivable


(29,115,292)



5,705,680



884,691

Trade accounts receivable-related parties


18,681,051



4,569,800



708,568

Inventories


(4,791,259)



503,627



78,090

Other receivable, net


(7,022,533)



(2,566,250)



(397,908)

Other receivables related parties, net


1,414,433



91,021



14,113

Purchase advance, net


1,797,628



4,361,022



676,196

Purchase advance-related party, net


-



394,034



61,097

Prepaid expense


(1,565,998)



629,622



97,626

Prepaid expense - related party, net


(132,400)



(210,000)



(32,561)

Trade accounts payable


6,042,777



(6,981,485)



(1,082,510)

Other payables


(566,064)



820,214



127,178

Other payables-related parties


419,379



(659,373)



(102,239)

Deferred revenue


(1,643,339)



(1,981,194)



(307,193)

Advances from customers


(405,785)



(143,406)



(22,236)

Accrued payroll and employees' welfare


(108,066)



82,028



12,719

Accrued expenses


185,433



67,803



10,513

Taxes payable


(689,453)



(357,116)



(55,372)

Net cash used in operating activities


(16,219,350)



(1,288,043)



(199,714)










Cash flows from investing activities:









Purchase of property and equipment


(514,009)



(502,658)



(77,939)

Proceeds from disposal of equipment


356,247



60,000



9,303

Net cash used in investing activities


(157,762)



(442,658)



(68,636)










Cash flows from financing activities:









Proceeds from short-term bank loans


-



500,000



77,527

Repayments of short-term bank loans


(2,000,000)



(500,000)



(77,527)

Proceeds from short-term borrowings-related parties


12,550,000



8,525,400



1,321,901

Repayment of short-term borrowings-related parties


(7,550,000)



(16,748,394)



(2,596,912)

Proceeds from sale of common stock, net of issuance costs


-



168,319



26,098

Net cash provided by (used in) financing activities


3,000,000



(8,054,675)



(1,248,913)










Effect of exchange rate fluctuation on cash and cash equivalents


(51,605)



60,390



9,362










Net decrease in cash


(13,428,717)



(9,724,986)



(1,507,901)

Cash at beginning of period


18,094,586



12,344,929



1,914,135

Cash at end of period

RMB

4,665,869


RMB

2,619,943


$

406,234



















Supplemental cash flow information









Cash paid during the period for interest

RMB

808,065


RMB

672,789


$

104,319

Cash paid during the period for taxes

RMB

616,225


RMB

142,477


$

22,092

SOURCE Recon Technology, Ltd.


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