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Recon Technology Reports Fiscal 2018 First Quarter and First Three Months Financial Results
Highlighted by Higher Revenues and Operating Margins

BEIJING, Nov. 15, 2017 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service, electric power and coal chemical industries, today reported its financial results for the first quarter and first three months of fiscal year 2018, which ended September 30, 2017.

First Quarter FY2018 Financial Highlights (all comparable to the prior year period):

  • Total revenues for the first quarter of FY2018 increased by 56% to RMB 12.2 million ($1.8 million);
  • Gross profit for the first quarter of FY2018 was RMB 2.1 million ($0.3 million);
  • Gross profit margin increased to 17.2%, largely due to continued higher margin generated from automation business;
  • Net loss attributable to Recon for the first quarter of FY2018 was RMB 6.7 million ($1.0 million), or RMB 0.97 ($0.15) per basic and diluted share, compared to net loss attributable to Recon of RMB 5.5 million, or RMB 0.92 per basic and diluted share, for the same period of last fiscal year;
  • Non-GAAP net loss attributable to common shareholders excluding certain non-cash expenses was RMB 2.3 million ($341,093), or RMB 0.33 ($0.05) per basic and diluted share, for the first quarter of FY2018, compared to non-GAAP net loss attributable to common shareholders of RMB 3.2 million, or RMB 0.54 per basic and diluted share, for the same period last fiscal year.

Management Commentary

Mr. Shenping Yin, Chairman and CEO of Recon stated, "Revenue of this quarter is mainly driven by equipment and integration of automation business, the basic two legs of Recon, as we stated in our open letter to shareholders (Refer to the following link for more details: http://recon.mediaroom.com/2017-06-12-Recon-Outlines-2017-Strategy-and-China-Oil-and-Gas-Market-Outlook-in-Open-Letter-to-Shareholders?pagetemplate=widgetpopup). As most of our projects of waste water treatments are currently in progress, we expect revenue of this business line will contribute significantly to the overall revenues in the coming quarters. The rally in crude prices helped generate positive sentiment and we did see more investments in oil extraction by our clients and thus more opportunities for Recon. Based on our current estimation, we remain confident in our ability to achieve our goal of a minimum 30% increase in revenues for this fiscal year. This estimation was also mentioned by the open letter to shareholders as above."

Mr. Yin continued, "Our Gansu subsidiary construction projects, focusing on oilfield sewage treatment and oily sludge disposal treatment project with an annual processing capacity of 60,000 tons of oily waste ("Project"), is also proceeding well (Refer to the following link for more details: http://recon.mediaroom.com/2017-11-07-Recon-Announces-Investment-to-Expand-Services-for-Oily-Sludge-Market-in-Yumen-Oilfield?pagetemplate=widgetpopup). Total investment of this project is expected to about RMB100 million. Approximately RMB5.4 million, which mainly consisted of the purchase of land use right and prepayment for equipments and construction supplies, has been devoted into the first stage of construction. We expect this project to be operational by June 2018 and annual revenue to be generated by the Project is estimated to be over RMB 50 million." 

Results of Operations

The following unaudited condensed consolidated results of operations which include the Company's wholly owned subsidiaries, their variable interest entities ("VIEs") and VIE's subsidiaries. The VIEs are Nanjing Recon Technology Co. Ltd ("Nanjing Recon"), Beijing BHD Petroleum Technology Co, Ltd ("BHD"). BHD owns 100% of the equity interest of Huang Hua BHD Petroleum Equipment Manufacturing Co. LTD ("HH BHD") and 51% of the equity interest of Gansu BHD Environmental Technology Ltd ("Gansu BHD").

On November 25, 2016, the Company began reporting under Rule 3b-4 of the Securities Exchange Act of 1934 as a foreign private issuer, including the filing of annual reports on Form 20-F and current reports on Form 6-K. By this current report on Form 6-K, Recon has provided selected fiscal 2018 first quarter results, with greater detail on its first quarter financial results. 

The translation has been made at the rate of US$ 1.0: RMB 6.65, the approximate exchange rate prevailing on September 30, 2017.

Selected Financial Highlights in RMB
(in 000s, except number of shares and per share data)


3 months ended
 September 30, 2016


3 months ended
September 30, 2017

Sales


7,802



12,171

Cost of Revenues


6,710



10,077

Gross Profit


1,092



2,094

Gross Profit Margin


14%



17%







Loss from Operations


(5,484)



(6,868)







Net Loss Attributable to Recon Technology, Ltd


(5,461)



(6,745)

Non U.S. GAAP Net Loss attributable to common stockholders


(3,224)



(2,270)

Basic and Weighted Average Number of Diluted Common Shares
Outstanding


5,957,733



6,919,001

Basic and Diluted Loss per Share


(0.92)



(0.97)

Non U.S. GAAP adjusted loss per basic and diluted share


(0.54)



(0.33)

 

 

3 MONTHS ENDED SEPTEMBER 30, 2017 UNAUDITED FINANCIAL RESULTS

Revenue



For the Three Months Ended


September 30,








Percentage


2016


2017


Increase


Change

Hardware and software

¥

7,802,103


¥

12,170,614


¥

4,368,511



56.0%

Total revenues

¥

7,802,103


¥

12,170,614


¥

4,368,511



56.0%


     Total revenues for the three months ended September 30, 2017 were approximately ¥12.2 million ($1.8 million),
representing an increase of approximately ¥4.4 million or 56.0% from ¥7.8 million for the three months ended
September 30, 2016. The overall increase in revenue was accomplished through Recon's expansion of new clients and
development of new business. See below for more details:



For the Three Months Ended


September 30,






Increase /


Percentage


2016


2017


(Decrease)


Change

Automation product and software

¥

2,076,736


¥

5,513,331


¥

3,436,595



165.5%

Equipment and accessories


3,803,918



6,462,925



2,659,007



69.9%

Waste water treatment products


1,921,449



194,358



(1,727,091)



(89.9)%

Total revenue - Hardware and software

¥

7,802,103


¥

12,170,614


¥

4,368,511



56.0%


(1) As shown above, the overall increase in revenue was primarily from increased sales of automation products
     and software as well as equipment, primarily more furnaces provided to Changqing Oilfield, a major
     subsidiary of Petro China and the largest producing oilfield of China.

(2) Revenue from waste water treatment products decreased by ¥1.7 million or 89.9% as most of Recon's
     wastewater treatment projects were not finished thus few revenue was recorded in the quarter.



Cost and Margin



For the Three Months Ended


September 30,






Increase /


Percentage


2016


2017


(Decrease)


Change

Total revenues

¥

7,802,103


¥

12,170,614


¥

4,368,511



56.0%

Cost of revenues


6,709,778



10,077,045



3,367,267



50.2%

Gross profit

¥

1,092,325


¥

2,093,569


¥

1,001,244



91.7%

Margin %


14.0%



17.2%



3.2%



-

Cost of Revenues. Recon's cost of revenues increased from approximately ¥6.7 million for the three months ended September 30, 2016 to approximately ¥10.1 million ($1.5 million) for the same period in 2017, representing an increase of approximately ¥3.4 million ($0.5 million), or 50.2%. This increase was mainly due to increased costs deriving from additional revenue generated from automation products and equipment than the same period of last year.

Gross Profit. Recon's gross profit increased to approximately ¥2.1 million ($0.3 million) for the three months ended September 30, 2017 from approximately ¥1.1 million for the same period in 2016. Recon's gross profit as a percentage of revenue increased to 17.2% for the three months ended September 30, 2017 from 14.0% for the same period in 2016. This was mainly due to higher margin automation projects and equipment business during this period, which led to the increase in revenues more than the increase in Recon's cost of revenues.

Operating Expenses


For the Three Months Ended


September 30,






Increase /


Percentage


2016


2017


(Decrease)


Change

Selling and distribution expenses

¥

1,050,141


¥

1,086,200


¥

36,059



3.4%

  % of revenue


13.5%



8.9%



(4.6)%



-

General and administrative expenses


4,899,328



7,022,780



2,123,452



43.3%

  % of revenue


62.8%



57.7%



(5.1)%



-

Provision for doubtful accounts


8,026



297,571



289,545



3,607.6%

  % of revenue


0.1%



2.4%



2.3%



-

Research and development expenses


618,674



554,782



(63,892)



(10.3)%

  % of revenue


7.9%



4.6%



(3.3)%



-

Operating expenses

¥

6,576,169


¥

8,961,333


¥

2,385,164



36.3%

Selling and Distribution Expenses. Selling and distribution expenses consist primarily of salaries and related expenditures of Recon's sales and marketing organization, sales commissions, costs of Recon's marketing programs including traveling charges, advertising and trade shows, and rental expense, as well as shipping charges. Selling expenses increased by approximately ¥36,100 (approximately $5,400) for the three months ended September 30, 2017 compared to the same period in 2016. This increase was primarily due to an increase in meal and entertainment expenses, partly offset by a decreased traveling expense. Selling expenses were 8.9% of total revenues for the three months ended September 30, 2017 and 13.5% of total revenues in the same period of 2016.

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 increased by 43.3% or ¥2.1 million (approximately $0.3 million), from approximately ¥4.9 million in the three months ended September 30, 2016 to approximately ¥7.0 million (approximately $1.1 million) in the same period of 2017. The increase in general and administrative expenses was mainly due to an increase in and performance-based compensation issued to management with an amount of ¥1.2 million (approximately $0.2 million) and investor relationship ("IR") expenses. General and administrative expenses accounted 57.7% of total revenues in the three months ended September 30, 2017 and 62.8% of total revenues in the same period of 2016.

Provision for doubtful accounts. Provision for doubtful accounts is the estimated amount of bad debt that will arise as a result of uncollectibility from accounts receivables, other receivables and purchase advances. We recorded a provision for doubtful accounts of ¥8,000 for three months ended September 30, 2016 and ¥0.3 million (approximately $44,715) for the same period in 2017. Management will make efforts to collect long outstanding receivables.

Research and development ("R&D") expenses. Research and development expenses consist primarily of salaries and related expenditures for Recon's research and development projects. Research and development expenses decreased slightly from ¥619,000 for the three months ended September 30, 2016 to ¥555,000 (approximately $0.1 million) for the same period of 2017.

Net Loss


For the Three Months Ended


September 30,






Increase /


Percentage


2016


2017


(Decrease)


Change

Loss from operations

¥

(5,483,844)


¥

(6,867,764)


¥

(1,383,920)



(25.2)%

Other income, net


3,117



74,086



70,969



2,276.8%













Loss before income taxes


(5,480,727)



(6,793,678)



(1,312,951)



24.0%

Income tax expenses (benefits)


(20,143)



9,282



29,425



(146.1)%













Net loss


(5,460,584)



(6,802,960)



(1,342,376)



24.6%













Less: Net loss attributable to non-controlling
interest


-



(58,109)



(58,109)



100.0%

Net loss attributable to Recon Technology, Ltd

¥

(5,460,584)


¥

(6,744,851)


¥

(1,284,267)



23.5%

Loss from operations. Loss from operations was ¥6.9 million (approximately $1.0 million) for the three months ended September 30, 2017, compared to a loss of ¥5.5 million for the same period of 2016. This ¥1.4 million (approximately $0.2 million) increase in loss from operations was primary due to higher meal & entertainment expenses, IR expenses and performance-based compensation issued to management.

Basic and diluted loss per share. Basic and diluted loss per share attributable to common stockholders was RMB 0.97, as compared to RMB 0.92, for the three months ended September 30, 2016.

Non U.S. GAAP Net Loss

Non U.S. GAAP net loss attributable to common shareholders excluding certain non-cash expenses (non-GAAP) such as restricted shares issued for consulting services and non-cash stock compensation expense was RMB 2,269,939 (approximately $341,093), or RMB 0.33 (approximately $0.05) per diluted share, for the three months ended September 30, 2017, compared to non U.S. GAAP net loss attributable to common shareholders of RMB 3,223,753, or RMB 0.54 per diluted share, for the same period last fiscal year. Please see the note about non-GAAP measures and the reconciliation table at the end of this press release.

LIQUIDITY AND CAPITAL RESOURCES

Selected Balance Sheet Highlights in RMB

Conversion US$ 1.0: RMB 6.65 at September 30, 2017







Percentage


9/30/2017


6/30/2017


Change

Cash


6,111,223



3,809,279



60.43%

Total Current Assets


73,611,756



68,387,075



7.64%

Total Assets


77,472,679



71,155,045



8.88%

Working Capital


36,613,981



38,941,318



(5.98)%

Total Current Liabilities


36,997,775



29,445,757



25.65%

Total Stockholders' Equity


30,568,170



33,244,445



(8.05)%

Total Liabilities and Stockholders' Equity


77,472,679



71,155,045



8.88%

Cash from Operating Activities. Net cash used in operating activities was ¥1.7 million (approximately $0.3 million) for the three months ended September 30, 2017. This was an increase of ¥1.4 million (approximately $0.2 million) compared to net cash used in operating activities of ¥0.3 million for the three months ended September 30, 2016. The increase in net cash used in operating activities for the three months ended September 30, 2017 was primarily for purchases for inventories of ¥2.3 million (approximately $0.3 million) and purchase advances of ¥3.9 million (approximately $0.6 million), offset by amounts received from collection of both notes and trade receivables.

Cash from Investing Activities. Net cash used in investing activities was ¥1.3 million (approximately $0.2 million) for the three months ended September 30, 2017, representing an increase in cash used in investing activities of ¥1.3 million (approximately $0.2 million) compared to the same period in 2016. This increase was due to an increase in the Company's prepayment for a land use right of 50 years.

Cash from Financing Activities. Net cash provided by financing activities amounted to ¥5.3 million (approximately $0.8 million) for the three months ended September 30, 2017, as compared to net cash used in financing activities of ¥1.0 million for the same period in 2016. During the three months ended September 30, 2017, we repaid ¥11.82 million (approximately $1.8 million) in short-term borrowings to related parties, and we received ¥11.0 million (approximately $1.7 million) from related parties and received ¥4.6 million (approximately $0.7 million) in short-term borrowings from third-parties, and we received ¥1.5 million (approximately $0.2 million) capital contribution by a non-controlling shareholder.

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company's year-end financial statements, which could result in significant differences from this unaudited financial information.

Use of Non-GAAP Financial Measures

To supplement Recon's unaudited condensed consolidated financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"), Recon uses the following non-GAAP financial measures: certain non-cash expenses such as restricted shares issued for consulting services and non-cash stock compensation expense, basic and diluted earnings (losses) per common share excludes non-cash expenses such as restricted shares issued for consulting services and non-cash stock compensation expense.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Recon believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding non-cash items, which may not be indicative of its operating performance.

About Recon Technology, Ltd. (NASDAQ: RCON)

Recon Technology, Ltd. is China's first listed non-state owned oil and gas field service company on NASDAQ. Recon supplies China's largest oil exploration companies, Sinopec (NYSE: SNP) and CNPC, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions on several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients, and its products and service are also well accepted by clients. For additional information please visit us at www.recon.cn.

Currency Conversion

The translation of RMB amounts into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB 6.65 to US$ 1.00, the noon buying rate as of September 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board. Prior period numbers have been recast into the new reporting currency.

Safe Harbor

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks 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. 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.

Company Contact
Liu Jia
Recon Technology, Ltd.
+86 (10) 84945799
info@recon.cn

 

 

RECON TECHNOLOGY, LTD

CONDENSED BALANCE SHEETS

(UNAUDITED)



As of June 30,


As of September 30


As of September 30


2017


2017


2017

ASSETS

RMB


RMB


U.S. Dollars

Current assets









Cash

¥

3,809,279


¥

6,111,223


$

918,304

Notes receivable


6,112,960



3,475,000



522,172

Trade accounts receivable, net


39,425,911



37,955,890



5,703,450

Inventories, net


2,627,974



4,725,395



710,063

Other receivables, net


4,106,510



5,167,281



776,463

Purchase advances, net


11,476,000



15,585,728



2,341,993

Prepaid expenses


828,441



591,239



88,842

Total current assets


68,387,075



73,611,756



11,061,287










Property and equipment, net


2,767,970



2,538,623



381,467

Acquired intangible assets - land use right, net


-



1,322,300



198,696

Total Assets

¥

71,155,045


¥

77,472,679


$

11,641,450










LIABILITIES AND STOCKHOLDERS' EQUITY


















Current liabilities









Short-term bank loan

¥

-


¥

45,000


$

6,762

Trade accounts payable


8,352,870



10,932,894



1,642,834

Other payables


3,351,900



3,810,056



572,519

Other payable- related parties


3,314,019



3,500,978



526,075

Deferred revenue


1,259,725



1,279,744



192,301

Accrued payroll and employees' welfare


2,014,514



2,286,703



343,612

Taxes payable


684,721



904,082



135,852

Short-term borrowings


300,000



4,900,000



736,299

Short-term borrowings - related parties


10,168,008



9,338,318



1,403,224

Total Current Liabilities


29,445,757



36,997,775



5,559,478










Commitments and Contingencies


















Equity









Common stock, ($ 0.0185 U.S. dollar par value,
100,000,000 shares authorized; 9,902,914 shares issued
and outstanding as of September 30, 2017 and June 30,
2017)


1,261,288



1,261,288



189,528

Additional paid-in capital


123,436,043



127,449,079



19,151,165

Statutory reserve


4,148,929



4,148,929



623,440

Accumulated deficit


(95,352,659)



(102,097,510)



(15,341,705)

Accumulated other comprehensive loss


(249,156)



(193,616)



(29,094)

Total stockholders' equity


33,244,445



30,568,170



4,593,334

Non-controlling interests


8,464,843



9,906,734



1,488,638

Total equity


41,709,288



40,474,904



6,081,972

Total Liabilities and Equity

¥

71,155,045


¥

77,472,679


$

11,641,450

 

 

RECON TECHNOLOGY, LTD

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)



For the three months ended


September 30,


2016


2017


2017


RMB


RMB


USD







Revenues









Hardware and software


7,802,103


¥

12,170,614


$

1,828,820

Total revenues


7,802,103



12,170,614



1,828,820










Cost of revenues









Hardware and software


6,709,778



10,077,045



1,514,230

Total cost of revenues


6,709,778



10,077,045



1,514,230

Gross profit


1,092,325



2,093,569



314,590










Selling and distribution expenses


1,050,141



1,086,200



163,218

General and administrative expenses


4,899,328



7,022,780



1,055,280

Provision for doubtful accounts


8,026



297,571



44,715

Research and development expenses


618,674



554,782



83,364

Operating expenses


6,576,169



8,961,333



1,346,577










Loss from operations


(5,483,844)



(6,867,764)



(1,031,987)










Other income (expenses)









Subsidy income


7,807



212,005



31,857

Interest income


27,894



2,004



301

Interest expense


(132,490)



(129,208)



(19,415)

Income (loss) from foreign currency exchange


388



(1,158)



(174)

Other income (expense)


99,518



(9,557)



(1,436)

Other income, net


3,117



74,086



11,133

Loss before income tax


(5,480,727)



(6,793,678)



(1,020,854)

Income tax expenses (benefits)


(20,143)



9,282



1,395

Net loss


(5,460,584)



(6,802,960)



(1,022,249)










Less: Net loss attributable to non-controlling interests


-



(58,109)



(8,732)

Net loss attributable to Recon Technology, Ltd


(5,460,584)


¥

(6,744,851)


$

(1,013,517)










Comprehensive loss









Net loss


(5,460,584)



(6,802,960)



(1,022,249)

Foreign currency translation adjustment


(7,602)



55,540



8,346

Comprehensive loss


(5,468,186)



(6,747,420)



(1,013,903)

Less: Comprehensive loss attributable to non-controlling interests


-



(58,109)



(8,732)

Comprehensive loss attributable to Recon Technology, Ltd


(5,468,186)


¥

(6,689,311)


$

(1,005,171)










Loss per common share - basic and diluted


(0.92)


¥

(0.97)


$

(0.15)

Weighted - average shares - basic and diluted


5,957,733



6,919,001



6,919,001

 

 

RECON TECHNOLOGY, LTD

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)



For the three months ended September 30,


2016


2017


2017


RMB


RMB


U.S. Dollars







Cash flows from operating activities:









Net loss

¥

(5,460,584)


¥

(6,802,960)


$

(1,022,249)

Adjustments to reconcile net loss to net cash used in operating
activities:









Depreciation and amortization


205,580



233,535



35,092

Gain from disposal of  equipment


(35,919)



-



-

Provision for doubtful accounts


8,026



297,571



44,715

Provision for slow moving inventories


262,135



164,305



24,689

Share based compensation


1,966,670



1,569,172



235,792

Restricted shares issued for management


-



1,398,492



210,145

Restricted shares issued for services


-



1,045,372



157,083

Changes in operating assets and liabilities:









Notes receivable


1,554,407



2,637,960



396,394

Trade accounts receivable, net


1,035,863



905,556



136,074

Inventories, net


(288,299)



(2,261,726)



(339,859)

Other receivable, net


1,866,616



(962,778)



(144,672)

Purchase advance, net


(2,873,141)



(3,940,827)



(592,169)

Prepaid expense


55,050



237,202



35,643

Trade accounts payable


1,727,232



2,580,024



387,688

Other payables


(241,788)



458,156



68,845

Other payables-related parties


32,454



186,959



28,093

Deferred revenue


(175,494)



20,019



3,008

Accrued payroll and employees' welfare


118,046



272,189



40,901

Taxes payable


(80,273)



219,361



32,962

Net cash used in operating activities


(323,419)



(1,742,418)



(261,825)










Cash flows from investing activities:









Purchases of property and equipment


(29,621)



(4,188)



(629)

Proceeds from disposal of equipment


51,900



-



-

Purchase of land use right


-



(1,322,300)



(198,696)

Net cash provided by (used in) investing activities


22,279



(1,326,488)



(199,325)










Cash flows from financing activities:









Proceeds from short-term bank loans


-



45,000



6,762

Proceeds from short-term borrowings


-



4,600,000



691,220

Repayment of short-term borrowings


(530,000)



-



-

Proceeds from short-term borrowings-related parties


4,838,318



10,988,318



1,651,162

Repayment of short-term borrowings-related parties


(5,276,448)



(11,818,008)



(1,775,836)

Capital contribution by a noncontrolling shareholder


-



1,500,000



225,398

Net cash (used in) provided by financing activities


(968,130)



5,315,310



798,706










Effect of exchange rate fluctuation on cash


6,280



55,540



8,346










Net increase (decrease) in cash


(1,262,990)



2,301,944



345,902

Cash at beginning of period


1,817,620



3,809,279



572,402

Cash at end of period

¥

554,630


¥

6,111,223


$

918,304



















Supplemental cash flow information









Cash paid during the period for interest

¥

167,403


¥

153,498


$

23,065

Cash paid during the period for taxes

¥

-


¥

9,282


$

1,395

 

 

Reconciliation of Non-GAAP Financial Measures



For the three months ended


September 30,


2016


2017


2017


RMB


RMB


USD

Reconciliation of Net loss attributable to common shareholders









to Adjusted Net loss attributable to common shareholders









Net loss attributable to common shareholders

¥

(5,460,584)


¥

(6,744,851)


$

(1,013,517)

Special items:









Restricted shares issued for services


-



1,045,372



157,083

Provision for doubtful accounts


8,026



297,571



44,715

Provision for slow moving inventories


262,135



164,305



24,689

Stock compensation expense


1,966,670



1,569,172



235,792

Restricted shares issued for management


-



1,398,492



210,145

Adjusted net loss attributable to common stockholders

¥

(3,223,753)


¥

(2,269,939)


$

(341,093)










Reconciliation of U.S. GAAP Loss Per Share









to Non U.S. GAAP Adjusted Loss Per Share









U.S. GAAP loss per share









Basic and diluted

¥

(0.92)


¥

(0.97)


$

(0.15)

Impact of special items on earnings per share









Basic and diluted


0.38



0.64



0.10

Non U.S. GAAP adjusted loss per share









Basic and diluted

¥

(0.54)


¥

(0.33)


$

(0.05)

Weighted - average shares - basic and diluted


5,957,733



6,919,001



6,919,001

 

 

SOURCE Recon Technology, Ltd.