6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2024

Commission File Number: 001-34409

RECON TECHNOLOGY, LTD

Room 601, No. 1 Shui’an South Street Chaoyang District, Beijing, 100012

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒ Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Explanatory Note:

The Registrant is filing this Report on Form 6-K to report its financial results for the six months ended December 31, 2023 and to discuss its recent corporate developments.

Attached as exhibits to this Report on Form 6-K are:

(1) the unaudited condensed interim consolidated financial statements and related notes as Exhibit 99.1;

(2) Management’s Discussion and Analysis of Financial Condition and Results of Operations as Exhibit 99.2;

(3) the press release dated June 28, 2024 titled “Recon Technology Reports Financial Results for the First Six Months of Fiscal Year 2024” as Exhibit 99.3;

(4) Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T.

This report on Form 6-K is hereby incorporated by reference into the Company’s:

(i) Registration Statement on Form S-8 (file No. 333-228918) filed with SEC on December 20, 2018 and the reoffer prospectus, dated December 20, 2018, contained therein;

(ii) Registration Statement on Form F-3 (file No. 333-257806) filed with SEC on July 09, 2022 and declared effective on September 30, 2022; and

(iii) Registration Statement on Form F-3 (file No. 333-268657) filed with SEC on December 02, 2022 and declared effective on January 05, 2023.

2

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.

3

Explanatory Note

On March 29, 2024, the Company’s shareholders approved the one-for-eighteen reverse shares split of the Company’s Class A Ordinary Shares with the market effective date of May 1, 2024 (the “2024 Reverse Split”). Because fractional shares are not permitted, the Depository Trust Company (the “DTC”) requested the Company’s transfer agent issue 54,727 round-up Class A Ordinary Shares. In addition to the 2024 Reverse Split, the Company’s shareholders approved and authorized the Company’s registered office service agent to file a Fourth Amended and Restated Memorandum and Articles of Association with the local registry, and changed 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”). While the Class B Ordinary Shares’ number and voting power were not subject to the 2024 Reverse Split, the value and dividend rights of each Class B Ordinary Share were reduced by a one-eighteenth (1/18) conversion ratio as a result of approval of the Fourth Amended and Restated Memorandum and Articles of Association.

4

Exhibit Index:

99.1	Unaudited Condensed Consolidated Interim Financial Statements and Related Notes for the Six Months Ended December 31, 2023 and 2022.
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations.
99.3	Press release dated June 28, 2024 titled “Recon Technology Reports Financial Results for the First Six Months of Fiscal Year 2024.”
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RECON TECHNOLOGY, LTD
June 28, 2024	By:	/s/ Shenping Yin
		Shenping Yin
		Chief Executive Officer
		(Principal Executive Officer) and
		Duly Authorized Officer

6

EX-99.1

Exhibit 99.1

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(UNAUDITED)

	As of June, 30		As of December, 31		As of December, 31
	2023		2023		2023
	RMB		RMB		US Dollars
ASSETS
Current assets
Cash	¥	104,125,800	¥	121,848,777	$	17,162,041
Restricted cash		731,545		3,904		550
Short-term investments		184,184,455		133,950,650		18,866,554
Notes receivable		3,742,390		12,532,717		1,765,196
Accounts receivable, net		27,453,415		30,813,885		4,340,045
Inventories, net		6,330,701		1,855,535		261,347
Other receivables, net		2,185,733		4,184,778		589,414
Loans to third parties		123,055,874		79,374,144		11,179,614
Purchase advances, net		2,680,456		1,996,413		281,189
Contract costs, net		49,572,685		37,323,824		5,256,951
Prepaid expenses		350,119		295,384		41,603
Operating lease right-of-use assets, net - current (including ¥nil and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)				879,288		123,845
Total current assets		504,413,173		425,059,299		59,868,349
Property and equipment, net		24,752,864		23,492,024		3,308,782
Long-term other receivables, net		3,640		—		—
Long-term loan to third parties		—		18,500,000		2,605,671
Operating lease right-of-use assets, net - non-current (including ¥335,976 and ¥nil from a related party as of June 30, 2023 and December 31, 2023, respectively)		2,654,900		16,204,906		2,282,413
Total Assets	¥	531,824,577	¥	483,256,229	$	68,065,215
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529
Accounts payable		10,791,721		12,062,861		1,699,018
Other payables		5,819,010		1,688,166		237,773
Other payable- related parties		2,592,395		2,209,017		311,134
Contract liabilities		2,748,365		4,888,749		688,566
Accrued payroll and employees’ welfare		2,382,516		2,399,919		338,022
Taxes payable		1,163,006		1,702,898		239,848
Short-term borrowings - related parties		20,018,222		20,019,889		2,819,742
Operating lease liabilities - current (including ¥335,976 and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)		3,066,146		1,038,354		146,248
Warrant liability - current				8,519,880		1,200,000
Total Current Liabilities		61,032,862		66,866,018		9,417,880
Operating lease liabilities - non-current (including ¥nil and ¥nil from a related party as of June 30, 2023 and December 31, 2023, respectively)		25,144		25,869		3,644
Warrant liability - non-current		31,615,668		993,986		140,000
Total Liabilities		92,673,674		67,885,873		9,561,524
Commitments and Contingencies
Equity
Class A Ordinary Shares, $0.0001 US dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371,573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively*		26,932		27,791		3,914
Class B Ordinary Shares, $0.0001 US 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 December 31, 2023, respectively*		4,693		4,693		661
Additional paid-in capital*		580,340,061		584,275,905		82,293,540
Statutory reserve		4,148,929		4,148,929		584,364
Accumulated deficit		(170,440,826)		(192,994,848)		(27,182,756)
Accumulated other comprehensive income		35,127,173		30,517,774		4,298,339
Total shareholders’ equity		449,206,962		425,980,244		59,998,062
Non-controlling interests		(10,056,059)		(10,609,888)		(1,494,371)
Total equity		439,150,903		415,370,356		58,503,691
Total Liabilities and Equity	¥	531,824,577	¥	483,256,229	$	68,065,215

*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 unaudited condensed consolidated interim financial statements.

F-1

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the six months ended
	December 31,
	2022		2023		2023
	RMB		RMB		USD
Revenue
Revenue	¥	45,559,591	¥	45,256,672	$	6,374,269
Revenue		45,559,591		45,256,672		6,374,269
Cost of revenue
Cost of revenue		32,427,772		33,150,930		4,669,211
Cost of revenue		32,427,772		33,150,930		4,669,211
Gross profit		13,131,819		12,105,742		1,705,058
Selling and distribution expenses		4,021,899		4,547,115		640,448
General and administrative expenses		26,212,540		22,042,042		3,104,557
Allowance for (net recovery of) credit losses		(7,141,708)		1,553,364		218,787
Research and development expenses		5,109,302		6,765,287		952,871
Operating expenses		28,202,033		34,907,808		4,916,663
Loss from operations		(15,070,214)		(22,802,066)		(3,211,605)
Other income (expenses)
Subsidy income		85,602		131,428		18,511
Interest income		5,187,649		12,060,640		1,698,706
Interest expense		(169,091)		(1,683,289)		(237,086)
Loss in fair value changes of warrants liability		(20,097,665)		(1,941,195)		(273,412)
Foreign exchange transaction gain (loss)		42,455		(76,040)		(10,710)
Other income (expenses)		157,753		(8,701,288)		(1,225,550)
Other income, net		(14,793,297)		(209,744)		(29,541)
Loss before income tax		(29,863,511)		(23,011,810)		(3,241,146)
Income tax expenses		9,180		96,041		13,527
Net loss		(29,872,691)		(23,107,851)		(3,254,673)
Less: Net loss attributable to non-controlling interests		3,727		(553,829)		(78,005)
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	$	(3,176,668)
Comprehensive income (loss)
Net loss		(29,872,691)		(23,107,851)		(3,254,673)
Foreign currency translation adjustment		9,663,701		(4,609,399)		(649,220)
Comprehensive loss		(20,208,990)		(27,717,250)		(3,903,893)
Less: Comprehensive Income (loss) attributable to non- controlling interests		3,727		(553,829)		(78,005)
Comprehensive loss attributable to Recon Technology, Ltd	¥	(20,212,717)	¥	(27,163,421)	$	(3,825,888)
Loss per share - basic and diluted*	¥	(15.46)	¥	(8.27)	$	(1.16)
Weighted - average shares -basic and diluted*		1,932,544		2,728,056		2,728,056

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

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

F-2

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

													Accumulated
							Additional						Other
							Paid-in		Statutory		Accumulated		Comprehensive		Shareholders'		Non-controlling		Total		Total
	Common Stock						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)		(USD)
Balance, 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		58,153,603
Restricted shares issued for services	—		—	—		—		4,304,857		—		—		—		4,304,857		—		4,304,857		606,326
Restricted shares issued for management	—		—	—		—		1,796,417		—		—		—		1,796,417		—		1,796,417		253,020
Net income (loss) for the period	—		—	—		—		—		—		(29,876,418)		—		(29,876,418)		3,727		(29,872,691)		(4,207,481)
Foreign currency translation adjustment	—		—	—		—		—		—		—		9,663,701		9,663,701		—		9,663,701		1,361,104
Balance, December 31, 2022	1,704,766	¥	19,461	4,100,000	¥	2,604	¥	522,528,073	¥	4,148,929	¥	(141,149,943)	¥	20,971,162	¥	406,520,286	¥	(7,743,241)	¥	398,777,045	$	56,166,572
Balance, 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		61,853,111
Restricted shares issued for services	—		—	—		—		1,070,143		—		—		—		1,070,143		—		1,070,143		150,726
Proceeds from Pre-Funded warrants	65,278		859	—		—		(859)		—		—		—		—		—		—		—
Restricted shares issued for management	—		—	—		—		2,866,560		—		—		—		2,866,560		—		2,866,560		403,747
Net loss for the period	—		—	—		—		—		—		(22,554,022)		—		(22,554,022)		(553,829)		(23,107,851)		(3,254,673)
Foreign currency translation adjustment	—		—	—		—		—		—		—		(4,609,399)		(4,609,399)		—		(4,609,399)		(649,220)
Balance, December 31, 2023	2,371,573	¥	27,791	7,100,000	¥	4,693	¥	584,275,905	¥	4,148,929	¥	(192,994,848)	¥	30,517,774	¥	425,980,244	¥	(10,609,888)	¥	415,370,356	$	58,503,691

*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 unaudited condensed consolidated interim financial statements.

F-3

RECON TECHNOLOGY, LTD

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
Cash flows from operating activities:
Net loss	¥	(29,872,691)	¥	(23,107,851)	$	(3,254,673)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,952,625		1,426,971		200,985
Loss (gain) from disposal of equipment		(12,782)		32,252		4,543
Gain in fair value changes of warrants liability		20,097,665		10,461,075		1,473,412
Allowance for (net recovery of) credit losses		(7,141,708)		1,553,364		218,787
Allowance for slow moving inventories		245,990		(350,637)		(49,386)
Amortization of right of use assets		1,627,888		570,959		80,418
Restricted shares issued for management and employees		1,796,417		2,866,560		403,747
Restricted shares issued for services		4,304,857		1,070,143		150,726
Accrued interest income from loans to third parties		(3,757,041)		(4,415,298)		(621,882)
Accrued interest income from short-term investment		—		(2,352,250)		(331,307)
Changes in operating assets and liabilities:
Notes receivable		2,356,367		(8,790,327)		(1,238,092)
Accounts receivable		(12,501,742)		(4,412,034)		(621,422)
Inventories		(1,158,138)		4,863,435		685,000
Other receivables		(9,673,906)		5,465,227		769,761
Purchase advances		(449,477)		558,040		78,598
Contract costs		9,765,091		10,442,916		1,470,854
Prepaid expense		10,345		54,734		7,709
Prepaid expense - related parties		275,000		—		—
Operating lease liabilities		(1,619,168)		(2,027,067)		(285,506)
Accounts payable		247,387		1,271,140		179,036
Other payables		(1,414,691)		(4,103,150)		(577,918)
Other payables-related parties		231,133		(383,378)		(53,998)
Contract liabilities		(1,945,877)		2,140,385		301,467
Accrued payroll and employees’ welfare		27,710		17,399		2,451
Taxes payable		677,510		537,591		75,718
Net cash used in operating activities		(25,931,236)		(6,609,801)		(930,972)
Cash flows from investing activities:
Purchases of property and equipment		(821,272)		(216,082)		(30,435)
Proceeds from disposal of equipment		31,950		20,000		2,817
Purchase of land use right		—		(15,000,251)		(2,112,741)
Repayments of loans to third parties		25,194,900		44,613,948		6,283,743
Payments made for loans to third parties		(58,488,100)		(16,600,000)		(2,338,061)
Payments for short-term investments		—		(131,598,400)		(18,535,247)
Redemption of short-term investments		—		180,338,865		25,400,198
Net cash (used in) generated by investing activities		(34,082,522)		61,558,080		8,670,274
Cash flows from financing activities:
Proceeds from short-term bank loans		1,000,000		—		—
Repayments of short-term bank loans		—		(123,000)		(17,324)
Proceeds from short-term borrowings-related parties		10,000,000		10,000,000		1,408,471
Repayments of short-term borrowings-related parties		(9,000,000)		(10,018,222)		(1,411,037)
Repayments of long-term borrowings-related party		(476,927)		—		—
Redemption of warrants		—		(31,866,604)		(4,488,317)
Net cash provided by (used in) financing activities		1,523,073		(32,007,826)		(4,508,207)
Effect of exchange rate fluctuation on cash and restricted cash		10,633,748		(5,945,117)		(837,352)
Net increase (decrease) in cash and restricted cash		(47,856,937)		16,995,336		2,393,743
Cash and restricted cash at beginning of year		317,698,417		104,857,345		14,768,848
Cash and restricted cash at end of year	¥	269,841,480	¥	121,852,681	$	17,162,591
Supplemental cash flow information
Cash paid during the year for interest	¥	624,321	¥	468,440	$	64,601
Cash paid during the year for taxes	¥	9,180	¥	16,505	$	2,276
Reconciliation of cash and restricted cash, beginning of year
Cash	¥	316,974,857	¥	104,125,800	¥	14,665,812
Restricted cash		723,560		731,545		103,036
Cash and restricted cash, beginning of year	¥	317,698,417	¥	104,857,345	$	14,768,848
Reconciliation of cash and restricted cash, end of year
Cash	¥	269,111,420	¥	121,848,777	¥	17,162,041
Restricted cash		730,060		3,904		550
Cash and restricted cash, end of year	¥	269,841,480	¥	121,852,681	$	17,162,591
Non-cash investing and financing activities
Right-of-use assets obtained in exchange for operating lease obligations	¥	—	¥	298,783	$	41,204
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement	¥	43,881	¥	—	$	—
Inventories transferred to and used as fixed assets	¥	(65,456)	¥	—	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

F-4

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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 hearing 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 ($3,872,590) as of December 31, 2023. 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 ($591,558) as of December 31,2023. 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. The remaining paid in capital should be contributed by BHD and the other individual shareholder is ¥33,300,000 ($4,827,276) and ¥12,500,000 ($1,812,041) respectively. Based on its charter dated September 29, 2017, the remaining capital will be injected before September 29, 2036.

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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 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. The transaction has been 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. 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, in exchange of the additional 8% equity ownership of FGS.

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.

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;

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● 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-VIE:

The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and the following PRC legal entities that operate in the Chinese chemical recycling industry:

1. Shandong Recon Renewable Resources Technology Co., Ltd. (“Shandong Recon”)

2. Guangxi Recon Renewable Resources Technology Co., Ltd. (“Guangxi Recon”)

On October 10, 2023, Shandong Recon Renewable Resources Technology C0., Ltd (“Shandong Recon”), 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 Technology Co., Ltd. (“Guangxi Recon”), 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, and (5) developing, upgrading and maintaining the online operation and cooperation platform of gas stations, marketing and promotion services, (6) Plastic chemical cycles business, etc.

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.

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

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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 six months ended December 31, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.0999 = US$1.00, the approximate exchange rate prevailing on December 31, 2023. 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. 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.

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

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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.

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

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, 2023 and December 31, 2023, the Company had short-term investments balance of ¥184.2 million and ¥134.0 million ($18.9 million), including accrued interests of ¥2.9 million and ¥2.4 million ($331,307), respectively.

Accounts Receivables, Net, Other Receivables, Net and Loan 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 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 net recovery of provision for credit loss for the six months ended December 31, 2023 decreased by approximately ¥3.1 million ($0.4 million) from the six months ended December 31, 2022.

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;

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RECON TECHNOLOGY, LTD

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● 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.

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 business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

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.

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 ten 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
Production equipment, including:
Equipment	10 years
Utilities and Facilities	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.

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation

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techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment.

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company concluded that there was no impairment for the long-lived assets for the six months ended December 31, 2022 and 2023 respectively. As of December 31, 2023, all Long-Lived Assets were fully impaired.

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.

- 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

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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.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the six months ended December 31, 2022 and 2023. The Company recorded no investment income on its equity method investment in unconsolidated entities during the six months ended December 31, 2022 and 2023, respectively.

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

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.

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RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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 six months ended December 31, 2022 and 2023 is disclosed in Note 24.

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.

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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. The Company’s services enable terminal users of different mobile apps run by its clients or cooperators to complete refueling in cash or online through different payment channels, when each transaction, including refueling and payment, is completed, the Company is entitled to charge with pre-settled rates of each transaction amount as service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly, based on a per transaction basis.

F-13

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951
Contract liabilities	¥	2,748,365	¥	4,888,749	$	688,566

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.

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

F-14

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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 December 31, 2023. The amount of revenue recognized during the six months ended December 31, 2022 and 2023 that was previously included within contract liability balances was ¥1,901,277, and ¥1,689,759 ($237,998), respectively.

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.

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 2023, the Company did calculation and the amount was not material as end of December 31, 2023.

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 expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥101,550 and ¥342,878 ($48,293) for the six months ended December 31, 2022 and 2023, respectively.

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. There was ¥834,975 ($117,604) and ¥834,975 impairment for ROU lease assets as of December 31, 2023 and June 30, 2023.

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

F-15

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of December 31, 2023 and June 30, 2023.

As of December 31, 2023, the tax years ended December 31, 2018 through December 31, 2023 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).

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 stock 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 (loss) per share for the six months ended December 31, 2022 and 2023:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Numerator:
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	$	(3,176,668)
Denominator:				​		​
Weighted-average number of ordinary shares outstanding – basic*		1,932,544		2,728,056		2,728,056
Class A Ordinary Shares*		1,704,766		2,333,612		2,333,612
Class B Ordinary Shares (used for EPS calculation) **		227,778		394,444		394,444
Potentially dilutive shares from outstanding options/warrants/convertible notes		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		1,932,544		2,728,056		2,728,056
Earnings (loss) per share – basic*	¥	(15.46)	¥	(8.27)	$	(1.16)
Earnings (loss) per share – diluted*	¥	(15.46)	¥	(8.27)	$	(1.16)

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

** The weighted average number of Class B Ordinary Shares outstanding and number used for EPS calculation has been retrospectively adjusted and converted by a ratio of 1/18 to reflect the actual dividend rate of Class B Ordinary Share after the 2024 Reverse Split.

F-16

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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.

The estimated liabilities accrued by the company for potential future substantial transaction compensation under the Warrant Purchase Agreement are classified and displayed as "warrants liability" in the financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures.” This ASU expands required public entities’ segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

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-17

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	27,606,257	¥	31,553,107	$	4,444,162
Allowance for credit losses		(152,842)		(739,222)		(104,117)
Total third-parties, net	¥	27,453,415	¥	30,813,885	$	4,340,045

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties- long-term	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	842,607	¥	1,307,791	$	184,199
Allowance for credit losses		(842,607)		(1,307,791)		(184,199)
Total third-parties, net	¥	—	¥	—	$	—

Net recovery of provision made for credit losses of accounts receivable due from third parties was ¥4,012,249 for the six months ended December 31, 2022. Provision for credit losses of accounts receivable due from third parties was ¥1,051,564 for the six months ended December 31, 2023.

As the date of this report, approximately 28.6%, or ¥8.8 million ($1.2 million) of net outstanding balance as of December 31, 2023 has been collected.

Movement of allowance for doubtful accounts is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	9,612,470	¥	995,449	$	140,206
Charge to (reversal of) credit losses		(8,767,356)		1,051,564		148,110
Foreign currency translation adjustments		150,335		—		—
Ending balance	¥	995,449	¥	2,047,013	$	288,316

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, 2023 and December 31, 2023, notes receivable was ¥3,742,390 and ¥12,532,717 ($1,765,196), respectively. As of June 30, 2023 and December 31, 2023, no notes were guaranteed or collateralized. As the date of this report, 100.0%, or ¥12.5 million ($1.8 million) have been subsequently collected.

F-18

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 5. OTHER RECEIVABLES, NET

Other receivables, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Business advances to officers and staffs (A)	¥	854,162	¥	1,849,761	$	260,533
Deposits for projects		1,247,992		1,224,966		172,533
VAT recoverable		690,053		577,545		81,346
Others		1,392,126		1,134,950		159,854
Allowance for credit losses		(1,994,960)		(602,444)		(84,852)
Subtotal		2,189,373		4,184,778		589,414
Less: Long term portion (B)		(3,640)		—		—
Other receivable - current portion	¥	2,185,733	¥	4,184,778	$	589,414

(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.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Provision for credit losses of other receivables was ¥549,132 for the six months ended December 31, 2022. Net recovery of provision for credit losses of other receivables was ¥1,392,516 for the six months ended December 31, 2023.

Movement of allowance for credit losses is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	619,444	¥	1,994,960	$	280,984
Charge to (reversal of) allowance		1,375,516		(1,392,516)		(196,132)
Less: written off		—		—		—
Ending balance	¥	1,994,960	¥	602,444	$	84,852

NOTE 6. LOANS TO THIRD PARTIES

Loans to third parties consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Working fund to third party companies	¥	123,055,874	¥	97,874,144	$	13,785,285
Less: Long term portion		—		(18,500,000)		(2,605,671)
Loans to third parties	¥	123,055,874	¥	79,374,144	$	11,179,614

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 and have terms of no more than one year, except one of the loans to third party has term of three years. 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,

F-19

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

approximately 63.1%, or ¥61.8 million ($8.7 million) was collected by the Company and the remaining part was expected to be paid in full by end of January 2025.

NOTE 7. CONTRACT COSTS, NET

Contract costs, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Contract costs	¥	52,158,840	¥	41,886,747	$	5,899,625
Allowance for credit losses		(2,586,155)		(4,562,923)		(642,674)
Total contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951

As of December 31, 2023, total contracts costs, net amounted to ¥37,323,824 ($5,256,951), of which 18.5%, or ¥6.9 million ($1.0 million) have been subsequently realized as the date of this report, and the remaining balance is expected to be utilized by December 2024.

Net recovery of provision for credit losses of contract costs was ¥3,751,575 for the six months ended December 31, 2022. Provision for credit losses of contract costs was ¥1,939,135 ($273,122) for the six months ended December 31, 2023.

Movement of allowance for credit losses of contract costs is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	4,063,482	¥	2,586,155	$	364,252
Reversal of allowance		(1,720,095)		1,939,135		273,122
Charge to cost of sales		242,768		37,633		5,300
Ending balance	¥	2,586,155	¥	4,562,923	$	642,674

NOTE 8. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Motor vehicles	¥	5,176,175	¥	3,699,101	$	521,007
Office equipment and fixtures		1,440,819		1,401,599		197,411
Production equipment		31,115,843		31,231,574		4,398,875
Leasehold improvement		2,260,000		2,260,000		318,314
Total cost		39,992,837		38,592,274		5,435,608
Less: accumulated depreciation		(14,297,511)		(14,157,788)		(1,994,083)
Less: accumulated impairment		(942,462)		(942,462)		(132,743)
Property and equipment, net	¥	24,752,864	¥	23,492,024	$	3,308,782

Depreciation expenses were ¥1,602,166 and ¥1,426,971 ($200,985) for the six months ended December 31, 2022 and 2023, respectively.

F-20

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Income from property and equipment disposal was ¥12,782 and ¥32,252 ($4,543) for the six months ended December 31,2022 and 2023, respectively.

NOTE 9. 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 RMB 10 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 ($261,667). 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 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-21

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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	$	66,458
Accounts receivable, net		831,049		117,051
Other receivables, net		144,285		20,322
Contract costs, net		75,250		10,599
Prepaid expenses		91,132		12,836
Property and equipment, net		118,130		16,638
Intercompany receivables*		6,850,000		964,802
Intangible assets- customer relationship		7,000,000		985,929
Goodwill		6,996,895		985,492
Accounts payable		(1,032,078)		(145,365)
Other payables		(1,273,182)		(179,324)
Other payable- related parties		(479,959)		(67,601)
Deferred revenue		(39,786)		(5,604)
Accrued payroll and employees’ welfare		(1,629,519)		(229,513)
Taxes payable		(64,253)		(9,050)
Deferred tax liability		(1,050,000)		(147,889)
Total	¥	17,009,807	$	2,395,781
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		238,004
Fair value of previously held equity interest		30,530,000		4,300,061
Non-controlling interest		34,790,000		4,900,069
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(7,042,353)
Total	¥	17,009,807	$	2,395,781

*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 the six months ended December 31, 2022 and 2023, the management performed evaluation on the impairment of goodwill and concluded that there was no impairment for goodwill for the six months ended December 31, 2022 and 2023. As of December 31, 2023, goodwill was fully impaired.

The identifiable goodwill acquired and the carrying value as of December 31, 2023 is as follows:

	Fair Value
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Goodwill	¥	6,996,895	$	985,492
Less: impairment		(6,996,895)		(985,492)
The carrying value of goodwill as of December 31, 2023	¥	—	$	—

F-22

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of December 31, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Intangible assets - customer relationship	¥	7,000,000	$	985,929	10
Less: accumulated amortization		(1,750,000)		(246,482)
Less: impairment		(5,250,000)		(739,447)
Intangible assets - customer relationship, net	¥	—	$	—

The amortization expense of customer relationship was ¥350,000 and ¥nil for the six months ended December 31, 2022 and 2023, respectively.

Impairment loss for intangible assets - customer relationship was all ¥nil for the six months ended December 31, 2022 and 2023, 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 10. 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,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Rights of use lease assets - current	¥	—	¥	1,714,263	$	241,449
Less: impairment		—		(834,975)		(117,604)
Rights of use lease assets, net - current		—		879,288		123,845
Rights of use lease assets - non - current		3,489,875		16,204,906		2,282,413
Less: impairment		(834,975)		—		—
Rights of use lease assets, net - non - current		2,654,900		16,204,906		2,282,413
Operating lease liabilities – current	¥	3,066,146	¥	722,857	$	101,812
Operating lease liabilities – non-current		25,144		341,366		48,080
Total operating lease liabilities	¥	3,091,290	¥	1,064,223	$	149,892

F-23

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2023:

	June 30,		December 31,
	2023		2023
			RMB
	RMB		(Unaudited)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	23.90		23.50
Weighted average discount rate	5.0	%	5.0	%

Operating lease costs and short-term lease costs for the six months ended December 31, 2022 were ¥1,694,074 and ¥480,040, respectively.

Operating lease costs and short-term lease costs for the six months ended December 31, 2023 were ¥1,659,302 ($233,708) and ¥313,533 ($44,160), respectively.

Impairment loss for the ROU was all ¥nil for the six months ended December 31,2022 and 2023, respectively. As ROU of FGS was not able to generate enough future cashflow. Therefore, the Company decided to record full impairment of the ROU during the year ended June 30, 2023.

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2023:

	RMB		US Dollars
Twelve months ending June 30,	(Unaudited)		(Unaudited)
2024	¥	1,045,399	$	147,241
2025		26,400		3,718
Total lease payments		1,071,799		150,959
Less: imputed interest		(7,576)		(1,067)
Present value of lease liabilities		1,064,223		149,892
Less: operating lease liabilities – current		722,857		101,812
Operating lease liabilities – non-current	¥	341,366	$	48,080

NOTE 11. OTHER PAYABLES

Other payables consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Professional service fees	¥	2,246,101	¥	304,474	$	42,884
Distributors and employees		3,073,289		712,173		100,307
Accrued expenses		200,218		193,274		27,222
Others		299,402		478,245		67,360
Total	¥	5,819,010	¥	1,688,166	$	237,773

	June 30,		December 31,		December 31,
	2022		2023		2023
			RMB		US Dollars
Related Parties	RMB		(Unaudited)		(Unaudited)
Expenses paid by the major shareholders	¥	1,796,309	¥	1,663,858	$	234,350
Due to family members of the owners of BHD and FGS		545,159		545,159		76,784
Due to management staff for costs incurred on behalf of the Company		250,927		—		—
Total	¥	2,592,395	¥	2,209,017	$	311,134

F-24

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 12. TAXES PAYABLE

Taxes payable consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
VAT payable	¥	699,601	¥	720,872	$	101,533
Income tax payable		440,030		536,071		75,504
Other taxes payable		23,375		445,955		62,811
Total taxes payable	¥	1,163,006	¥	1,702,898	$	239,848

NOTE 13. BANK LOANS

Short-term bank loans consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Bank of Kunlun (1)	¥	950,000	¥	827,000	$	116,481
Industry and Commercial Bank of China (“ICBC”) (2)		10,000,000		10,007,639		1,409,546
China Construction Bank (3)		1,501,481		1,501,646		211,502
Total short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529

(1) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($408,456) 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. The Company made a withdrawal in an amount of ¥1,000,000 ($140,847) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($7,042). During the six months ended December 31, 2023, the Company repaid ¥ 123,000 ($17,324). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company 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). From December 31, 2024, to the date of this report, the Company repaid ¥8,269 ($1,165).

(2) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,408,471) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($704,235) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($704,235) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

(3) On August 31, 2022, the Company entered into a revolving loan facility with China Construction Bank to borrow up to ¥1,500,000 ($211,271) as working capital for twelve months, with a maturity date of June 9, 2024. The loan has a fixed interest rate of 3.95% per annum. The loan is guaranteed by the non-controlling shareholder of FGS. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

Interest expense for the short-term bank loan was ¥227,918 and ¥159,276 ($22,434) for the six months ended December 31,2022 and 2023, respectively.

F-25

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 14. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Short-term borrowings due to related parties consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Short-term borrowings due to related parties:	RMB		(Unaudited)		(Unaudited)
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023	¥	10,004,055	¥	—	$	—
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024*		4,993,950		4,994,892		703,516
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024*		5,020,217		5,021,164		707,216
Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024		—		10,003,833		1,409,010
Total short-term borrowings due to related parties	¥	20,018,222	¥	20,019,889	$	2,819,742

*On May 29, 2024, the Company entered into a three-year supplemental agreement with the founder, changing the term of the loan from May 29, 2024 to April 29, 2027 and the annual interest rate to 3.75%.

No short-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2023 and December 31, 2023.

Interest expense for short-term borrowings due to related parties were ¥142,725 and ¥338,338 ($47,654) for the six months ended December 31, 2022 and 2023, respectively.

NOTE 15. CLASS A ORDINARY SHARES

Share offering

On April 5, 2021, the Company held its annual general meeting of shareholders (the “Annual Meeting”) for the fiscal year ended June 30, 2020. At the Annual Meeting, the Company’s shareholders approved a special resolution that the authorized share capital of the Company be amended from US$1,850,000 divided into 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to US$15,725,000 divided into 150,000,000 (8,333,333 shares post 2024 Reverse Split) Class A Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) (US$1.67 post 2024 Reverse Split) each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) each. The change from Ordinary Shares to Class A Ordinary Shares is reflected with the NASDAQ Capital Market and in the marketplace at the open of business on April 12, 2021, whereupon the Class A Ordinary Shares began trading. The Company’s Class A Ordinary Shares will continue to trade on the NASDAQ Capital Market under the symbol “RCON” and under the CUSIP Number of G7415M124. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall be entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

On June 14, 2021, 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 6,014,102 (334,117 shares post 2024 Reverse Split) Class A Ordinary Shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share and 2,800,000 (155,556 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 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $55.0 million before deducting the placement agent’s fees and other offering expenses in an aggregate amount of ¥30,408,264, or $4.7 million.

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

F-26

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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.

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of December 31, 2023:

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22
Issued	—		—	—
Forfeited	—		—	—
Exercised	(65,278)		0.18	—
Expired	—		—	—
Outstanding as of December 31, 2023	—	$	—	—

* 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, 2023 and December 31, 2023, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($584,364), respectively.

NOTE 16. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

In May and June 2020, the Company consummated two offerings. In connection with the offering, the Company issued to the investors warrants to purchase an aggregate of 911,112 (50,617 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $2.25 ($40.50 post 2024 Reverse Split) per Class A Ordinary Share, which was amended to $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Shares on the second offering on June 30, 2020. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 26, 2020 and expire on November 25, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,689,389. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.40%), (2) expected warrant life of 5.5 years, (3) expected volatility of 99.50%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised and all the underlying shares were issued.

In June 2020, the Company issued to the investors warrants to purchase an aggregate of 1,680,000 (93,333 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on June 30, 2020 and expire on December 30, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,639,333. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.35%), (2) expected

F-27

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

warrant life of 5.5 years, (3) expected volatility of 104.26%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised.

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 (47,963 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 (47,963 warrants post 2024 Reverse Split) warrants. As of June 30, 2023 and December 31, 2023, the fair value of the warrant liability of the Warrant 2021 was $1,930,000 and $140,000 (¥993,986). During the six months ended December 31, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $2,880,000 and $197,692, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	December 31,			June 30,
Input	2023			2023
Number of warrants*		47,963			47,963		441,710
Share price*	$	0.23		$	0.34		0.34
Risk-free interest rate		4.02	%		4.41	%	4.41	%
Volatility		119	%		127	%	127	%
Exercise price*	$	112.32		$	112.32		14.40
Warrant life		2.96 years			3.47 years		3.47 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 December 31, 2023, the fair value of the warrant liability of the Warrant 2023 was $2,430,000 and $nil. During the six months ended December 31, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $nil and $70,625, respectively.

F-28

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	December 31,			June 30,
Input	2023			2023
Number of warrants*		—			555,694
Share price*	$	—		$	0.34
Risk-free interest rate		—	%		3.59	%
Volatility		—	%		110	%
Exercise price*	$	—		$	14.40
Warrant life		—			5.22 years

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

The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2023, 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	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	4,360,000	$	—	$	—	$	4,360,000

			Quoted Prices In		Significant Other		Significant Other
	December 31,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	140,000	$	—	$	—	$	140,000

The following table summarizes the Company’s Warrants activities and status of Warrants as of December 31, 2023:

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	1,045,367	$	18.90	4.40
Issued	—		—	—
Redeemed	(997,404)		14.40	—
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of December 31, 2023	47,963	$	112.32	2.96

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

		December 31,
Description		2023
Warrant liability -current *	$	1,200,000

F-29

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

* On December 14, 2023, company bought back an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. Warrant Purchase Agreement stipulated that “The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement”. The Company accrued an estimated liability of $1,200,000 based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

NOTE 17. 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, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of December 31, 2023	4,444	$	148.50

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

The following is a summary of the status of options outstanding and exercisable as of December 31, 2023:

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price*		Number*	life (Years)	Price*		Number*	life (Years)
$	148.50	4,444	1.08	$	148.50	4,444	1.08
		4,444				4,444

*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 six months ended December 31, 2022 and 2023, respectively. No unrecognized share-based compensation for stock options as of December 31, 2023.

F-30

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Restricted Shares to Senior Management

As of December 31, 2023, the Company has granted restricted Class A Ordinary Shares to senior management and employees as follows:

On August 21, 2018, the Company granted 391,200 (21,733 shares post 2024 Reverse Split) restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $2,523,240 based on the closing share price $6.45 ($116.10 post 2024 Reverse Split) at August 21, 2018. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. All granted shares under this plan are fully vested on September 3, 2021.

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, 2023, 547,444 (30,414 shares post 2024 Reverse Split) shares were vested and the remaining 1,094,887 (60,827 shares post 2024 Reverse Split) shares will not be vested until 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 will not be vested until September 15, 2023.

Nil and nil restricted Class A restricted shares were issued and outstanding for the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

As of December 31, 2023, the Company has granted restricted Class B Ordinary Shares to senior management as follows:

On December 5, 2021, the Company granted 2,500,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $4,175,000 based on the fair value of the share price $1.67 at December 5, 2021. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on December 5, 2021.

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.

Nil and nil restricted Class B restricted shares were issued and outstanding during the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for management was ¥1,796,417 and ¥2,866,560 ($403,747) for the six months ended December 31, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of December 31, 2023 was approximately ¥4.7 million ($0.7 million), which is expected to be recognized over a weighted average period of approximately 1.16 years.

Restricted Shares for services

As of December 31, 2023, the Company has granted restricted Class A Ordinary Shares to consultant as follows:

On November 10, 2021, the Company signed a service agreement with Starry. As the service consideration, the Company should issue 500,000 (27,778 shares post 2024 Reverse Split) restricted Class A Ordinary Shares which vested in equal monthly amounts through the end of December 31, 2021. Half of the restricted Class A Ordinary Shares was valued based on the closing share price of $1.60 ($28.80 post 2024 Reverse Split) on December 10, 2021 and the other half was valued based on the closing share price of $1.31

F-31

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

($23.58 post 2024 Reverse Split) on December 31, 2021. 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued on December 10, 2021 and the remaining 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued in January 2022.

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, 2023.

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 plan have been vested until September15, 2023.

¥Nil and ¥nil restricted Class A restricted shares were issued and outstanding during the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for service was ¥4,304,857 and ¥1,070,144 ($150,726) for the six months ended December 31, 2022 and 2023, respectively.

Following is a summary of the restricted shares granted:

Restricted share grants	Shares*
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938
Granted	—
Vested	(111,111)
Non-vested as of December 31, 2023	60,827

*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 December 31, 2023:

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share*		Number*	Period (Years)
$	18.72	60,827	1.16
		60,827

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

NOTE 18. 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%.

F-32

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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.

Income (loss) before provision for income taxes consisted of:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Outside China areas	¥	(32,395,145)	¥	(14,621,317)	$	(2,059,369)
China		2,531,634		(8,390,493)		(1,181,776)
Total	¥	(29,863,511)	¥	(23,011,810)	$	(3,241,145)

Deferred tax assets, net is composed of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Deferred tax assets:
Allowance for credit losses	¥	1,019,592	¥	1,285,544	$	181,065
Impairment for inventory		90,322		35,646		5,021
Net operating loss carryforwards		23,290,731		24,263,351		3,417,422
Subtotal		24,400,645		25,584,541		3,603,507
Less: Valuation allowance		(24,107,246)		(25,304,762)		(3,564,101)
Total deferred tax assets, net	¥	293,399	¥	279,779	$	39,406
Deferred tax liabilities:
Accelerated amortization of intangible assets		(146,511)		(132,891)		(18,717)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,689)
Recognition of customer relationship arising from business combinations		—		—		—
Total deferred tax liabilities		(293,399)		(279,779)		(39,406)
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, 2023, the cumulative NOL was approximately ¥133.6 million. During the six months ended December 31, 2023, the Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred an additional NOL carryforwards of approximately ¥4.2 million ($0.6 million). As of December 31, 2023, there are $13.2 million ($1.9 million) of the cumulative NOL that have expired, resulting in a cumulative NOL carryforwards of approximately ¥124.6 million ($17.6 million) as of December 31, 2023.

F-33

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The NOL will expire over the next five years as follows:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	10,484,902	$	1,476,768
2025		19,617,124		2,763,014
2026		32,533,742		4,582,282
2027		27,137,905		3,822,294
2028		34,868,363		4,911,106
Total	¥	124,642,036	$	17,555,464

The Company’s income tax expense (benefit) is comprised of the following:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Current income tax provision	¥	9,180	¥	96,041	$	13,527
Deferred income tax provision		—		—		—
Expense for income tax	¥	9,180	¥	96,041	$	13,527

NOTE 19. NON-CONTROLLING INTEREST

Non-controlling interest consisted of the following:

	As of June 30, 2023
			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	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

F-34

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

	As of December 31, 2023
			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	$	937,478
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,883,196)
Unappropriated retained earnings (deficit)		3,818,698		3,616,001		(6,982,801)		(1,569,913)		(2,037,170)		(3,155,185)		(444,398)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,324)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,900,069
Total non-controlling interests	¥	5,450,848	¥	3,804,148	¥	(2,177,801)	¥	(1,569,913)	¥	(16,117,170)	¥	(10,609,888)	$	(1,494,371)

NOTE 20. CONCENTRATIONS

Credit risk

As of June 30, 2023 and December 31, 2023, approximately ¥45.5 million and ¥ 101.2 million ($14.3 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 ¥40.0 million and ¥96.8 million ($13.6 million) as of June 30, 2023 and December 31, 2023, respectively. As of June 30, 2023 and December 31, 2023, approximately ¥240.3 million and ¥154.6 million ($21.8 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 500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥238.8 million and ¥152.9 million ($21.5 million) as of June 30, 2023 and December 31, 2023, respectively.

Customer concentration risk

For the six months ended December 31, 2022, CNPC represented 41%, SINOPEC represented 31%, and another customer represented 10% of the Company’s total revenue, respectively. At December 31, 2022, CNPC accounted for 43%, SINOPEC represented 18% and another customer accounted for 14% of the Company’s trade accounts receivable, net, respectively.

For the six months ended December 31, 2023, CNPC represented 56%, SINOPEC represented 19%, CNOOC represented 15%, and another customer represented 10% of the Company’s total revenue, respectively. At December 31, 2023, CNPC accounted for 34%, SINOPEC represented 14%, CNOOC represented 21%, and another customer accounted for 30% of the Company’s trade accounts receivable, net, respectively.

NOTE 21. 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 December 31, 2023, the Company estimated its severance payments of approximately ¥7.9 million ($1.1 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.

F-35

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Legal contingencies

On December 1, 2021, Henan Puxinfangfu Construction Engineering Co., Ltd. (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Suzhou District, Jiuquan City, Gansu Province (the “Court”) against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. The Plaintiff also applied for property preservation before litigation to preserve the bank account of the Company. On December 1, 2021, the Court issued a judgement and approximately ¥0.7 million ($0.1 million) of Gan Su BHD’s bank balance was became restricted for one year. On April 7, 2022 and June 9, 2022, the Court issued first and second judgement which stated that the case to transfer to People’s Court of Yumen for jurisdiction. As of June 30, 2023, Gan Su BHD recorded ¥1.82 million (approximately $0.3 million) account payable due to the Plaintiff, and the compensation claimed by the Plaintiff was approximately ¥2.0 million (approximately $0.3 million). On January 9, 2023, the People’s Court of Yumen City, Gansu Province issued its civil judgement, pursuant to which the Company is required to pay the Plaintiff a settlement payment totaling approximately ¥1.8 million (approximately $0.3 million), including the money compensation and interests. As of December 31,2023, the Company has paid ¥855,197 (approximately $117,937) to the Plaintiff.

On April 30, 2023, Jiuquan Third Construction and Installation Engineering Company (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Yumen, Jiuquan City, Gansu Province against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. On August 25, 2023, the Company entered into a Settlement Agreement with the Plaintiff, pursuant to which the Company needs to pay the Plaintiff a total sum of ¥2.8 million (approximately $0.38 million) as settlement payment, including the money compensation and interests. Among which, ¥1.0 million (approximately $0.14 million) is required to be paid by September 25, 2023, ¥1.0 million (approximately $0.14 million) is required to be paid by October 25, 2023, and the remaining balance is required to be paid by November 25, 2023. As of December 31,2023, the Company has paid ¥1.3 million (approximately $0.18 million) to the Plaintiff.

(b)   Purchase commitment

The total future minimum purchase commitment under the non-cancellable purchase contracts as of December 31, 2023 are payable as follows:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	23,357,995	$	3,289,905
2025		300,000		42,254
Total minimum payments required	¥	23,657,995	$	3,332,159

(c) Office Leases Commitment - short term

The Company entered into several non-cancellable operating lease agreements for office spaces. Future payments under such leases were included in lease liabilities as disclosed in Note 10, other than those within under lease agreements within one year which are disclosed as follows as of December 31, 2023:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	692,500	$	97,537
Total	¥	692,500	$	97,537

F-36

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 22. 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 ¥94,167 ($13,263) with annual rental expense at ¥1.1 million ($0.16 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, 2022 - March 31, 2024	¥	40,000	$	5,634
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		31,667		4,460
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,169

As of June 30, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥335,976 ($46,333) and ¥335,976 ($46,333), respectively.

As of December 31, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥113,361 ($15,967) and ¥113,361 ($15,967), respectively.

Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 13).

NOTE 23. 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.

F-37

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Summary information regarding consolidated VIEs and their subsidiaries is as follows:

	June 30, 2023		December 31, 2023		December 31, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	37,661,118	¥	23,902,252	$	3,366,562
Restricted cash		731,545		3,904		550
Short-term investments		—		18,000,000		2,535,247
Notes receivable		3,742,390		12,532,717		1,765,196
Accounts receivable, net		27,453,415		30,813,885		4,340,045
Inventories, net		6,330,701		1,855,535		261,347
Other receivables, net		11,618,275		4,155,097		585,233
Loans to third parties		37,770,188		26,841,513		3,780,548
Purchase advances, net		1,592,761		1,996,413		281,189
Contract costs, net		49,572,685		32,373,824		4,559,758
Prepaid expenses		121,329		193,859		27,303
Operating lease right-of-use assets, net - current		—		879,288		123,845
Total current assets		176,594,407		153,548,287		21,626,823
Property and equipment, net		24,752,864		23,492,024		3,308,782
Long-term other receivables, net		3,640		—		—
Long-term loan to third parties		—		18,500,000		2,605,671
Operating lease right-of-use assets, net - non-current		2,654,900		1,219,978		171,830
Total Assets	¥	204,005,811	¥	196,760,289	$	27,713,106
LIABILITIES
Short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529
Accounts payable		10,791,721		12,062,861		1,699,018
Other payables		3,904,135		1,340,788		188,846
Other payable- related parties		1,356,915		2,162,184		304,537
Contract liabilities		2,748,361		4,888,749		688,566
Accrued payroll and employees’ welfare		1,048,061		1,077,495		151,762
Intercompany payables*		263,935,922		259,617,001		36,566,290
Taxes payable		1,163,237		1,265,868		178,294
Short-term borrowings - related parties		20,018,222		20,019,889		2,819,742
Operating lease liabilities - current		3,066,146		1,038,354		146,248
Total current liabilities		320,484,201		315,809,474		44,480,832
Operating lease liabilities - non-current		25,144		25,869		3,644
Total Liabilities	¥	320,509,345	¥	315,835,343	$	44,484,476

*Intercompany payables are eliminated upon consolidation.

The financial performance of VIEs and their subsidiaries reported in the unaudited condensed consolidated interim statement of operations and comprehensive income for the six months ended December 31, 2022 includes revenues of ¥45,559,591 ($6,604,466), operating expenses of ¥11,643,918 ($1,687,940), and net income of ¥2,974,474 ($431,189). The financial performance of VIEs and their subsidiaries reported in the unaudited condensed consolidated interim statement of operations and comprehensive income for the six months ended December 31, 2023 includes revenues of ¥45,256,672 ($6,374,269), operating expenses of ¥21,646,029 ($3,048,779), and net loss of ¥6,890,440 ($970,498).

F-38

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 24. 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 six months ended December 31, 2022 and 2023, respectively:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Automation product and software	¥	19,055,227	¥	17,552,892	$	2,472,273
Equipment, accessories and others		9,730,859		17,867,404		2,516,571
Oilfield environmental protection		12,789,684		8,053,696		1,134,339
Platform Outsourcing Services		3,983,821		1,782,680		251,085
Total revenue	¥	45,559,591	¥	45,256,672	$	6,374,268

	For the six months ended December 31, 2023
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672
Cost of revenue and related tax		14,040,976		12,778,042		6,020,271		311,641		33,150,930
Gross profit	¥	3,511,916	¥	5,089,362	¥	2,033,425	¥	1,471,039	¥	12,105,742
Depreciation and amortization	¥	253,397	¥	143,927	¥	1,029,646	¥	—	¥	1,426,970
Total capital expenditures	¥	83,253	¥	116,191	¥	—	¥	—	¥	199,444
Timing of revenue recognition
Goods transferred at a point in time	¥	14,368,994	¥	17,867,404	¥	8,053,696	¥	166,899	¥	40,456,993
Services rendered over time		3,183,898		—		—		1,615,781		4,799,679
Total revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672

F-39

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

	For the six months ended December 31, 2022
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591
Cost of revenue and related tax		14,955,185		6,254,015		9,988,100		1,230,472		32,427,772
Gross profit	¥	4,100,042	¥	3,476,844	¥	2,801,584	¥	2,753,349	¥	13,131,819
Depreciation and amortization	¥	524,970	¥	358,954	¥	1,038,342	¥	30,359	¥	1,952,625
Total capital expenditures	¥	2,303,311	¥	3,008	¥	—	¥	14,953	¥	2,321,272
Timing of revenue recognition
Goods transferred at a point in time	¥	19,055,227	¥	9,730,859	¥	10,282,687	¥	3,983,821	¥	43,052,594
Services rendered over time		—		—		2,506,997		—		2,506,997
Total revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Total assets:
Automation product and software	¥	167,009,315	¥	157,269,367	$	22,150,927
Equipment, accessories and others		170,809,759		158,131,921		22,272,414
Oilfield environmental protection		107,393,609		94,285,444		13,279,827
Platform outsourcing services		86,611,894		73,569,497		10,362,047
Total assets	¥	531,824,577	¥	483,256,229	$	68,065,215

NOTE 25. SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on June 28, 2024, and the Company has evaluated subsequent events through this date.

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 at USD$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 22, 2024, Guangxi Recon Renewable Resources Technology Co., Ltd. (“Guangxi Recon”), 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 the report date.

On February 26, 2024, the Company granted 6,255,483 (347,527 shares post 2024 Reverse Split) restricted Class A Ordinary Shares and 12,900,000 restricted Class B 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 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 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

F-40

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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 1,704,766 and 2,371,573 Class A Ordinary Shares were issued and outstanding as of December 31, 2022 and 2023, retrospectively and respectively. The Company had 80,000,000 authorized Class B Ordinary Shares, par value of $0.0001, of which 4,100,000 and 7,100,000 Class B Ordinary Shares were issued and outstanding as of December 31, 2022 and 2023, retrospectively and respectively.

On March 29, 2024, the company signed an office lease agreement with a lease term from May 1, 2024, to April 30, 2027, and an annual rent of 2.28 million.

On April 24, 2024, Bank of Kunlun Co., Ltd. Tuha Branch (the “Plaintiff”) submitted a civil complaint to the People's Court of Yizhou District, Hami City, Xinjiang Uygur Autonomous Region (the “Court"). The complaint requested: (1) Gan Su BHD to repay the principal and interest of the loan to the Plaintiff, (2) Gan Su BHD to pay the overdue interest to the Plaintiff; (3) Gan Su BHD to pay the attorney's fees to the Plaintiff; (4) Wang Ping, Beijing BHD, and Nanjing Recon to bear joint and several liabilities for the first four claims of the Plaintiff, (5) all costs of the case, including the acceptance fee, mailing fee, preservation fee, and preservation insurance fee, to be borne by the defendants. The Plaintiff also applied for pre-litigation property preservation. On April 24, 2024, the Court issued a ruling to seize and freeze the bank deposits of the respondents Gan Su BHD, Wang Ping, Beijing BHD, and Nanjing Recon, amounting to ¥848,935.63. On May 24, 2024, the Court made a first-instance judgment, ordering (1) Gan Su BHD to repay the Plaintiff the principal of the loan amounting to ¥818,730.95, (2) Gan Su BHD to pay the loan interest of ¥199.51 and the interest from April 1, 2024, until the actual repayment date (calculated based on the actual amount owed at an annual interest rate of 9%), (3) Gan Su BHD to bear the attorney's fees of ¥30,000, (4) Gan Su BHD to bear the preservation agency fee of ¥4,765, (5) Wang Ping, Beijing BHD and Nanjing Recon to bear joint and several liability guarantees for the above four judgment contents and the case acceptance fee.

NOTE 26. 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

F-41

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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, 2023 and December 31, 2023, 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.

RECON TECHNOLOGY, LTD

PARENT COMPANY BALANCE SHEETS (UNAUDITED)

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
ASSETS
Cash	¥	236,146,589	¥	34,657,271	$	4,881,375
Short-term investments		—		115,950,650		16,331,307
Due from intercompany*		291,525,426		356,442,080		50,203,817
Other current assets		80,036,017		52,568,829		7,404,165
Total Current Assets		607,708,032		559,618,830		78,820,664
Investment in subsidiaries and VIEs		(122,920,490)		(122,676,150)		(17,278,574)
Total Assets	¥	484,787,542	¥	436,942,680	$	61,542,090
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		3,964,912		1,448,570		204,027
Warrant liability - current				8,519,880		1,200,000
Total Current Liabilities		3,964,912		9,968,450		1,404,027
Warrant liability - non-current		31,615,668		993,986		140,000
Total Liabilities	¥	35,580,580	¥	10,962,436	$	1,544,027
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371,573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively**		26,932		27,791		3,914
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 December 31, 2023, respectively**		4,693		4,693		661
Additional paid-in capital**		580,340,061		584,275,905		82,293,540
Accumulated deficit		(166,291,897)		(188,845,919)		(26,598,391)
Accumulated other comprehensive income		35,127,173		30,517,774		4,298,339
Total Shareholders’ Equity		449,206,962		425,980,244		59,998,063
Total Liabilities and Shareholders’ Equity	¥	484,787,542	¥	436,942,680	$	61,542,090

* 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.

F-42

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Revenues	¥	—	¥	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
General and administrative expenses		16,054,522		11,698,953		1,647,763
Provision for credit losses		—		—		—
Loss from operations	¥	(16,054,522)	¥	(11,698,953)	$	(1,647,763)
Gain (loss) in fair value changes of warrants liability		(20,097,665)		(1,941,195)		(273,412)
Other income (expenses)		3,716,168		(960,280)		(135,253)
Equity in earnings of subsidiaries, VIEs and VIEs’ subsidiaries		2,559,601		(7,954,486)		(1,120,366)
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,794)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS		​
Foreign currency translation adjustments related to investments in subsidiaries, VIEs and VIEs’ subsidiaries		9,663,701		(4,609,399)		(649,220)
Comprehensive loss attributable to the company	¥	(20,212,717)	¥	(27,164,313)	$	(3,826,014)

F-43

RECON TECHNOLOGY, LTD

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Cash flows from operating activities:
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,793)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Loss (gain) in fair value changes of warrants liability		20,097,665		10,461,075		1,473,412
Restricted shares issued for management and employees		1,796,417		2,866,560		403,747
Accrued interest income from loans to third parties		—		(3,088,457)		(435,000)
Accrued interest income from short-term investment		—		(2,352,250)		(331,307)
Restricted shares issued for services		4,304,857		1,070,144		150,727
Equity in earnings of subsidiaries and VIEs		(2,559,601)		7,954,486		1,120,366
Other current assets		(14,166,457)		7,289,074		1,026,645
Other current liabilities		(1,080,736)		(2,516,342)		(354,421)
Net cash used in operating activities		(21,484,273)		(870,624)		(122,624)
Cash flows from investing activities:
Repayments from loans to third parties		20,694,900		24,849,650		3,500,000
Payments made for loans to third parties		(48,288,100)		—		—
Payments for short-term investments		—		(113,598,400)		(16,000,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(80,522,546)		(64,916,652)		(9,143,319)
Net cash used in investing activities		(108,115,746)		(153,665,402)		(21,643,319)
Net cash used in financing activity:
Redemption of warrants		—		(31,866,604)		(4,488,317)
Net cash provided by financing activity		—		(31,866,604)		(4,488,317)
Effect of exchange rate fluctuation on cash		16,278,998		(15,086,688)		(2,124,916)
Net decrease in cash		(113,321,021)		(201,489,318)		(28,379,176)
CASH, beginning of period		296,838,959		236,146,589		33,260,551
CASH, end of period	¥	183,517,938	¥	34,657,271	$	4,881,375

F-44

EX-99.2

Exhibit 99.2

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”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”) 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 (“Shandong Recon”) on October 10, 2023, and Guangxi Recon Renewable Resources Technology Co., Ltd. (“Guangxi Recon”) on February 22, 2024 through Recon-IN to serve customers located in different areas.

Recent Industry Developments and Business Outlook

For the first half of the fiscal year 2024, crude oil prices have experienced an upward and then a downward trajectory, but have overall remained above the extraction costs of China’s domestic oilfield companies, which resulted in high extraction and production activities being maintained by all of China’s oilfield companies. Oilfield companies have implemented a series of effective measures to strengthen the stable production of mature oil fields and seek opportunities for profitable development in new areas. We expect this trend to continue for some time and our oilfield business is gradually recovering.

1

As the domestic refined oil market demand gradually recovers, the consumption growth of the natural gas market is also exhibiting a swift upward trend. Under such circumstances, the natural gas production of oilfield companies is increasing at a swift rate, and its proportion in the total oil and gas output is steadily rising. Furthermore, domestic oilfield companies have capitalized on the advantage of relatively lower extraction costs associated with offshore oilfields, leading to increasingly frequent exploration activities in these areas. Faced with emerging opportunities in the market, we are actively seeking and seizing chances, solidifying our existing oilfield customer business. We have established cooperative relationships with both natural gas extraction clients and offshore oilfield clients, propelling the development of our business.

At the same time, we believe that the demand from oilfield customers for green, low-carbon, digitized and intelligent solutions to improve recovery and production efficiency will continue to rise, in order to ensure a continuous and stable supply of high-quality oil and gas resources to meet market demand.

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. From early 2023, we have been participating in the chemical recycling of low-value plastics. 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. Beginning in the second half of 2023, we purchased land and began applying for various access documents and construction permits. We expect the plant to be ready for production and operation in early 2025.

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 in other industries 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.

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 2024 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;

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● 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.

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 accounting principles generally accepted in United States of America (“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. 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

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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 US 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 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.

Business Combinations

The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the

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Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

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.

Disaggregation of Revenue

Revenues 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 six months ended December 31, 2022 and 2023 is disclosed in Note 24 to accompanying consolidated financial statements.

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.

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.

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Platform Outsourcing Services

The Company provides online platform development, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. The Company’s services enable terminal users of different mobile apps run by its clients or cooperators to complete refueling in cash or online through different payment channels, when each transaction, including refueling and payment, is completed, the Company is entitled to charge with pre-settled rates of each transaction amount as service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly, based 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,		December 31,		December 31,
	2023		2023		2023
		RMB		RMB		US Dollars
				(Unaudited)		(Unaudited)
Contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951
Contract liabilities	¥	2,748,365	¥	4,888,749	$	688,566

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.

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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.

Shipping and handling charges charged to customers for the fulfillment of the Company’s commitment to transfer the goods are included in revenue, and the costs incurred by the Company as a result of the delivery of the goods are classified as cost of sales in the consolidated operating and comprehensive income (loss) statements. 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 December 31, 2023. The amount of revenue recognized during the six months ended December 31, 2022 and 2023 that was previously included within contract liability balances was ¥1,901,277, and ¥1,689,759 ($237,998), respectively.

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.

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 beginning of the fiscal 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 Loan 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 net recovery of provision for credit loss for the six months ended December 31, 2023 decreased by approximately ¥3.1 million ($0.4 million) from the six months ended December 31, 2022.

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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.

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.

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The estimated liabilities accrued by the company for potential future substantial transaction compensation under the Warrant Purchase Agreement are classified and displayed as "warrants liability" in the financial statements.

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.

Six Months Ended December 31, 2023 Compared to Six Months Ended December 31, 2022

During the six months ended December 31, 2023, our performance in the oilfield service sector improved, benefiting from the continued improvement in oilfield customers’ production activities, the continued demand for clean energy in China, and the demand from oilfield customers for efficient, cost-effective and environmentally friendly solutions. While we also faced challenges from customers’ cost control strategy and temporary update re-equipment of operational qualification, our gross margin improvement was not significant, and revenue from some electronics sector and oilfield environmental protection temporarily declined. As a result, we experienced certain fluctuations in our revenue structure and costs and expenses during the current period.

Revenue

	For the Six Months Ended
	December 31,
					Increase /		Percentage
	2022		2023		(Decrease)		Change
Automation product and software	¥	19,055,227	¥	17,552,892	¥	(1,502,335)	(7.9)	%
Equipment and accessories		9,730,859		17,867,404		8,136,545	83.6	%
Oilfield environmental protection		12,789,684		8,053,696		(4,735,988)	(37.0)	%
Platform outsourcing services		3,983,821		1,782,680		(2,201,141)	(55.3)	%
Total revenue	¥	45,559,591	¥	45,256,672	¥	(302,919)	(0.7)	%

Our total revenue for the six months ended December 31, 2023 were approximately ¥45.3 million ($6.4 million), a decrease of approximately ¥0.3 million ($0.04 million) or 0.7% from ¥45.6 million for the same period in 2022.

(1) Revenue from automation product and software decreased by ¥1.5 million ($0.2 million) or 7.9%. During the six months period ended by December31, 2023, affected by temporary changes in market participation requirements from electricity industry customers, our business in the electronic automation segment disrupted and revenue from non-oilfield customers decreased by ¥9.6 million ($1.3 million). However, due to the recovery of oilfield production, sales to oilfield customers increased by ¥8.1million ($1.1 million). Thus, our revenue from automation product and software business decreased slightly overall. We anticipate that revenue from the electronic business will resume and revenue will recover from October, 2024.

(2) Revenue from equipment and accessories increased by ¥8.1 million ($1.1 million) or 83.6%. The increase in revenue was driven by the continued growth of our oilfield business and the successful expansion of our offshore oilfield services.

(3) Revenue from oilfield environmental protection decreased by ¥4.7 million ($0.7 million) or 37.0%, mainly due to a reduction in the volume of oily wastewater provided by customers as their production intensity decreased. In addition, Gansu BHD’ s hazardous waste operation permit expired in July, 2023, and the renewal process took longer than expected due to changing government regulations. Production activates were not allowed during this period. As a result, revenue from oily sludge treatment was reduced to a remarkably low level.

(4) Revenue from platform outsourcing services decreased by ¥2.2 million ($0.3 million) or 55.3%. The decrease was mainly due to reduced demand from former gas station customers as they upgraded their own online systems and limited cooperation with third parties. During the period, we shifted our target market from gasoline users to diesel users and established partnerships with several major online freight platform customers. We expect the increase in revenue from this segment to gradually form a new business base for the Company.

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Cost of revenue

	For the Six Months Ended
	December 31,
					Increase /		Percentage
	2022		2023		(Decrease)		Change
Automation product and software	¥	14,929,144	¥	14,004,847	¥	(924,297)	(6.2)	%
Equipment and accessories		6,176,223		12,730,144		6,553,921	106.1	%
Oilfield environmental protection		9,840,769		5,943,162		(3,897,607)	(39.6)	%
Platform outsourcing services		1,220,582		306,797		(913,785)	(74.9)	%
Business and sales related tax		261,054		165,980		(95,074)	(36.4)	%
Total cost of revenue	¥	32,427,772	¥	33,150,930	¥	723,158	2.2	%

Our total cost of revenue increased slightly from ¥32.4 ($4.6 million) million for the six months ended December 31, 2022 to ¥33.2 million ($4.7 million) for the same period in 2023.

(1) For the six months ended December 31, 2022 and 2023, cost of revenue from automation product and software was approximately ¥14.9 million and ¥14.0 million ($2.0 million), respectively, representing a decrease of approximately ¥0.9 million ($0.1 million) or 6.2%. The decrease in cost of revenue from automation product and software was primarily attributable to decreased revenue of automation products.

(2) For the six months ended December 31, 2022 and 2023, cost of revenue from equipment and accessories was approximately ¥6.2 million and ¥12.7 million ($1.8 million), respectively, representing an increase of approximately ¥6.6 million ($0.9 million) or 106.1%.The increase in cost of revenue from equipment and accessories was primarily attributable to increased revenue of equipment and accessories.

(3) For the six months ended December 31,2022 and 2023, cost of revenue from oilfield environmental protection was approximately ¥9.8 million and ¥5.9 million ($0.8 million), respectively, representing a decrease of approximately ¥3.9 million ($0.5 million) or 39.6%. The decrease in the cost of revenue, mainly drawn from wastewater and oily sludge treatments, was in line with decrease in revenue related to our oily sludge treatment.

(4) For the six months ended December 31,2022 and 2023, cost of revenue from platform outsourcing services was approximately ¥1.2 million and ¥0.3 million ($0.04 million). The decrease in cost of revenue was mainly due to a reduction in the number of employees, and saved servers leasing costs.

Gross Profit

	For the Six Months Ended
	December 31,
	2022				2023
	Gross				Gross				Increase /		Percentage
	Profit		Margin %		Profit		Margin %		(Decrease)		Change
Automation product and software	¥	4,100,042	21.5	%	¥	3,511,916	20.0	%	¥	(588,126)	(14.3)	%
Equipment and accessories		3,476,844	35.7	%		5,089,362	28.5	%		1,612,518	46.4	%
Oilfield environmental protection		2,801,584	21.9	%		2,033,425	25.2	%		(768,159)	(27.4)	%
Platform outsourcing services		2,753,349	69.1	%		1,471,039	82.5	%		(1,282,310)	(46.6)	%
Total gross profit and margin %	¥	13,131,819	28.8	%	¥	12,105,742	26.7	%	¥	(1,026,077)	(7.8)	%

Our total gross profit decreased to ¥12.1 million ($1.7 million) for the six months ended December 31,2023 from ¥13.1 million for the same period in 2022. Our gross profit as a percentage of revenue decreased to 26.7% for the six months ended December 31, 2023 from 28.8% for the same period in 2022.

(1) For the six months ended December 31, 2022 and 2023, our gross profit from automation product and software was approximately ¥4.1 million and ¥3.5 million ($0.5 million), respectively, representing a decrease in gross profit of approximately ¥0.6 million ($0.1 million) or 14.3%. The gross margin for automation product and software has remained relatively stable in this period.

(2) For the six months ended December 31, 2022 and 2023, gross profit from equipment and accessories was approximately ¥3.5 million and ¥5.1 million ($0.7 million), respectively, representing an increase of approximately ¥1.6 million ($0.2

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million) or 46.4 %. The reason for the decrease in gross margin is that oilfield customers have adopted a low-cost operating model and tightly controlled budgets, which has narrowed the overall margins of the market. Consequently, we had to resort to lower margins to secure business.

(3) For the six months ended December 31, 2022 and 2023, gross profit from oilfield environmental protection was approximately ¥2.8 million and ¥2.0 million ($0.3 million), respectively, representing a decrease of ¥0.8 million ($0.1 million), or 27.4%. The decrease in gross profit from oilfield environmental protection was primarily due to decreased production of oily sludge and oily wastewater.

(4) For the six months ended December 31, 2022 and 2023, gross profit from platform outsourcing services was approximately ¥2.8 million and ¥1.5 million ($0.2 million), respectively, representing a decrease of approximately ¥1.3 million ($0.2 million), or 46.6%, primarily due to lower sales as a result of lower demand.

Operating Expenses

	For the Six Months Ended
	December 31,
							Increase /			Percentage
	2022			2023			(Decrease)			Change
Selling and distribution expenses	¥	4,021,899		¥	4,547,115		¥	525,216		13.1	%
% of revenue		8.8	%		10.0	%		1.2	%	—
General and administrative expenses		26,212,540			22,042,042			(4,170,498)		(15.9)	%
% of revenue		57.5	%		48.7	%		(8.8)	%	—
Allowance for (net recovery of) credit losses		(7,141,708)			1,553,364			8,695,072		(121.8)	%
% of revenue		(15.7)	%		3.4	%		19.1	%	—
Research and development expenses		5,109,302			6,765,287			1,655,985		32.4	%
% of revenue		11.2	%		14.9	%		3.7	%	—
Operating expenses	¥	28,202,033		¥	34,907,808		¥	6,705,775		23.8	%

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. Selling expenses increased by 13.1%, or ¥0.5 million ($0.1 million), from ¥4.0 million for the six months ended December 31, 2022 to ¥4.5 million ($0.6 million) in the same period of 2023. The increase was mainly attributable to the increased bidding expense, travelling expenses, meal and entertainment expense due to an increase in sales activities. Selling expenses were 10.0% of total revenue for the six months ended December 31, 2023 and 8.8% of total revenue for the same period of 2022.

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 15.9%, or ¥4.2 million ($0.6 million), from ¥26.2 million for the six months ended December 31, 2022 to ¥22.0 million ($3.1 million) in the same period of 2023. The decrease was primarily due to the decrease of consulting fee, which was partially offset by the increased share-based compensation to our management and employees and restricted shares issued for services during the six months ended December 31, 2023. General and administrative expenses accounted for 48.7% of total revenue for the six months ended December 31, 2023 and 57.5% of total revenue for the same period of 2022.

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 recovery of credit losses of ¥7.1 million for the six months ended December 31, 2022 as compared to net provision for credit losses of ¥1.6 million ($0.2 million) for the same period in 2023. The net recovery of credit losses was mainly due to 1) we made specific reserve for some outstanding accounts receivable which we did not collect as we expected due to the downturn in the economy from the previous disease pandemic. However, due to the recovery of economy in China and the management’s great efforts in collection of receivables from our customers, some of accounts receivable we have provided credit losses for in the prior period were collected during the six months ended December 31, 2022, causing a reversal of provision for credit losses of accounts receivables; and 2). as of December 31, 2023, there was a small increase in the bad debt accrual corresponding to the aging of the accounts. 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 remained relatively stable with a slight increase by 32.4%, or ¥1.7 million ($0.2

11

million) from ¥5.1 million for the six months ended December 31, 2022 to ¥6.8 million ($1.0 million) for the same period of 2023. R&D expenses accounted for14.9% of total revenue in the six months ended December 31, 2023 and 11.2% of total revenue for the same period of 2022.

Net Loss

	For the Six Months Ended
	December 31,
					Increase /		Percentage
	2022		2023		(Decrease)		Change
Loss from operations	¥	(15,070,214)	¥	(22,802,066)	¥	(7,731,852)	51.3	%
Change in fair value of warrant liability		(20,097,665)		(1,941,195)		18,156,470	(90.3)	%
Interest income		5,018,558		10,377,351		5,358,793	106.8	%
Other income (expenses), net		285,810		(8,645,900)		(8,931,710)	(3,125.1)	%
Loss before income taxes		(29,863,511)		(23,011,810)		6,851,701	(22.9)	%
Income tax expenses		9,180		96,041		86,861	946.2	%
Net loss		(29,872,691)		(23,107,851)		6,764,840	(22.6)	%
Less: Net loss attributable to non-controlling interest		3,727		(553,829)		(557,556)	(14,959.9)	%
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	¥	7,322,396	(24.5)	%

Loss from operations. Loss from operations was ¥22.8 million ($3.2 million) for the six months ended December 31, 2023, compared to a loss of ¥15.1 million for the same period of 2022. This ¥7.7 million ($1.1 million) increase in loss from operations was primarily due to the increase in operating expense as discussed above.

Change in fair value of warrant liability. The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Loss in fair value changes of warrant liability was ¥20.1million and ¥0.22 million ($0.03 million) for the six months ended December 31, 2022 and 2023, respectively. On December 14, 2023, we redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers, and the difference between the repurchase price and fair value of the warrants, a difference of ¥1.72 million ($0.24 million), was recognized as loss in fair value changes of warrant liability.

Interest income, net. Net interest income was ¥10.4 million ($1.5 million) for the six months ended December 31, 2023, compared to net interest income of ¥5.0 million for the same period of 2022. The ¥5.4 million ($0.8 million) increase in net interest income was primarily due to the increased short-term investments we invested during the six months ended December 31,2023.

Other income (expenses), net. Other net expenses was ¥8.6 million ($1.2 million) for the six months ended December 31, 2023, compared to other net income of ¥0.3 million for the same period of 2022, the ¥8.9 million ($1.2 million) increase in other net expenses was primarily due to an increase in other expenses of ¥8.9 million ($1.2 million) as we accrued an estimated liability based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023. On December 14, 2023, we redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. The Warrant Purchase Agreement stipulated that “The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement”. The Company accrued an estimated liability of $1.2 million based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

Net loss. As a result of the factors described above, net loss was ¥23.1 million ($3.3 million) for the six months ended December 31, 2023, a decrease of ¥6.8 million ($1.0 million) from net loss of ¥29.9 million for the same period of 2022.

Liquidity and Capital Resources

As of December 31, 2023, we had cash in the amount of approximately ¥121.8 million ($17.2 million). As of June 30, 2023, we had cash in the amount of approximately ¥104.1 million.

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Indebtedness. As of December 31, 2023, we had ¥9.5 million ($1.3 million) of warrant liability, ¥12.3 million ($1.7 million) of short-term bank loans, ¥20.0 million ($2.8 million) of short-term borrowings from related parties, ¥0.61 million ($0.11 million) of short-term lease payable due to third parties, ¥0.11 million ($0.02 million) of short-term lease payable due to a related party, ¥23.7 million ($3.3 million) of contractual purchase commitments, and a liability of severance payments of ¥7.9 million ($1.1 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 financed our operations primarily through cash flows from financing activities. As of December 31, 2023, we had total assets of ¥483.3 million ($68.1 million), which includes cash of ¥121.8 million ($17.2 million), short-term investments of ¥134.0 million ($18.9 million), net accounts receivable of ¥30.8 million ($4.3 million), loans to third parties of ¥97.9 million ($13.8 million) and net contract costs of ¥37.3 million ($5.3 million). Working capital amounted to ¥358.2 million ($50.5 million). Shareholders’ equity amounted to ¥426.0 million ($60.0 million).

Cash from Operating Activities. Net cash used in operating activities was ¥6.6 million ($0.9 million) for the six months ended December 31, 2023. This was a decrease of approximately ¥19.3 million ($2.7 million) compared to net cash used in operating activities of approximately ¥25.9 million for the same period in 2022. The net cash used in operating activities for the six months ended December 31, 2023 was primarily attributable to the net loss attributable to the Company in the amount of ¥23.1 million ($3.3 million) due to the reasons discussed above, reconciled by a decrease in other payables of ¥4.1 million ($0.6 million), and a decrease in operating lease liabilities of ¥2.0 million ($0.3 million).

Cash from Investing Activities. Net cash from investing activities was approximately ¥61.6 million ($8.7 million) for the six months ended December 31, 2023. This was an increase of approximately ¥95.6 million ($13.5 million) compared to net cash used in investing activities of approximately ¥34.1 million for the same period in 2022, which was due to the repayments of loans to third parties and redemption of short-term investments, which partially offset by the purchase of land use right.

Cash from Financing Activities. Net cash used in financing activities amounted to ¥32.0 million ($4.5 million) for the six months ended December 31, 2023, as compared to net cash provided by financing activities of ¥1.5 million for the same period in 2022. The increase in net cash used in financing activities was mainly due to the redemption of warrants during the six months ended December 31, 2023.

Working Capital. Total working capital as of December 31, 2023 amounted to ¥358.2 million ($50.5 million), compared to ¥443.4 million as of June 30, 2023. Total current assets as of December 31, 2023 amounted to ¥425.1 million ($59.9 million), a decrease of ¥79.4 million ($11.2 million) compared to approximately ¥504.4 million at June 30, 2023. The decrease in total current assets at December 31, 2023 compared to June 30, 2023 was mainly due to a decrease in short-term investments, inventories, loans to third parties and contract costs, partially offset by an increase in cash and notes receivable. For the six months ended December 31, 2023, the Company had approximately ¥6.6 million ($0.9 million) cash out flow from the operating activities, and as of December 31, 2023, our total future minimum purchase commitment under the non-cancellable purchase contracts were amounted to ¥23.7 million ($3.3 million). As of December 31, 2023, the Company had cash in the amount of approximately ¥121.8 million ($17.2 million) for the next operating cycle ending December 31, 2024.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.

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Current liabilities. Current liabilities amounted to ¥66.9 million ($9.4 million) at December 31, 2023, in comparison to ¥61.0 million at June 30, 2023.

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 December 31, 2023, 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
Short-term debt obligations	¥	32,356,174	¥	32,356,174	¥		¥		¥
Operating lease obligations		1,071,799		1,045,399		26,400
Due to related parties		2,209,017		2,209,017
Purchase obligation		23,657,995		23,357,995		300,000
Warrant liabilities		9,513,866		8,519,880				993,986
Total	¥	68,808,851	¥	67,488,465	¥	326,400	¥	993,986	¥

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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.

SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	For the Six Months Ended December 31, 2023
	Recon
	Technology,
	Ltd.
	(Cayman		“Non-VIE Subsidiaries		VIEs and VIE’s				Consolidated
	Islands)		(Hong Kong and PRC)”		subsidiaries (PRC)		Eliminations		Total
Revenue	¥	—	¥	—	¥	45,256,672	¥	—	¥	45,256,672
Cost of Revenue		—		—		33,150,930		—		33,150,930
Gross Profit		—		—		12,105,742		—		12,105,742
Operating expenses		11,698,953		1,562,826		21,646,029		—		34,907,808
Loss from operations		(11,698,953)		(1,562,826)		(9,540,287)		—		(22,802,066)
Other income (expenses), net		(2,901,475)		(54,157)		2,745,888		—		(209,744)
Loss from subsidiaries		—		(6,336,611)		—		6,336,611		—
Loss from VIEs		(7,953,594)		—		—		7,953,594		—
Income tax expenses (benefit)		—		—		96,041		—		96,041
Net loss	¥	(22,554,022)	¥	(7,953,594)	¥	(6,890,440)	¥	14,290,205	¥	(23,107,851)
Non-controlling interest		—		—		(553,829)		—		(553,829)
Net income(loss) Attributable to Recon Technology, Ltd	¥	(22,554,022)	¥	(7,953,594)	¥	(6,336,611)	¥	14,290,205	¥	(22,554,022)

15

SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS

	For the Six Months Ended December 31, 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	¥	34,657,271	¥	63,289,254	¥	23,902,252	¥	—	¥	121,848,777
Restricted cash		—		—		3,904		—		3,904
Short-term investments		115,950,650		—		18,000,000		—		133,950,650
Other current assets		52,568,829		5,045,008		111,642,131		—		169,255,968
Intercompany receivables		356,442,080		155,285,348		—		(511,727,428)		—
Total current assets		559,618,830		223,619,610		153,548,287		(511,727,428)		425,059,299
Investments in subsidiaries and VIEs		(122,676,150)		—		—		122,676,150		—
Benefits through VIEs and VIE’s subsidiaries		—		(113,213,273)		—		113,213,273		—
Other non-current assets		—		14,984,928		43,212,002		—		58,196,930
Total non-current assets	¥	(122,676,150)	¥	(98,228,345)	¥	43,212,002	¥	235,889,423	¥	58,196,930
Total Assets		436,942,680		125,391,265		196,760,289		(275,838,005)		483,256,229
Intercompany payables		—		252,111,320		259,616,108		(511,727,428)		—
Other liabilities and accrued liabilities		10,962,436		705,095		56,218,342		—		67,885,873
Total Liabilities		10,962,436		252,816,415		315,834,450		(511,727,428)		67,885,873
Class A Ordinary Shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively		27,791		—		—		—		27,791
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 December 31, 2023, respectively		4,693		—		—		—		4,693
Additional paid-in capital		584,275,905		—		4,749,000		(4,749,000)		584,275,905
Retained earnings		(188,845,919)		(111,609,398)		(101,130,050)		212,739,448		(188,845,919)
Accumulated other comprehensive income		30,517,774		(15,815,752)		(12,083,223)		27,898,975		30,517,774
Total Shareholders’ Equity		425,980,244		(127,425,150)		(108,464,273)		235,889,423		425,980,244
Non-controlling interests		—		—		(10,609,888)		—		(10,609,888)
Total Liabilities and Equity		436,942,680		125,391,265		196,760,289		(275,838,005)		483,256,229

16

SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	For the Six Months Ended December 31, 2023
	Recon
	Technology,
	Ltd.		Subsidiaries
	(Cayman		(Hong Kong					Consolidated
	Islands)		and PRC)		VIE (PRC)		Eliminations	Total
Net cash used in operating activities	¥	(870,624)	¥	(6,425,678)	¥	686,501	—	¥	(6,609,801)
Net cash used in investing activities		(153,665,402)		(15,000,251)		165,307,081	64,916,652		61,558,080
Net cash provided by (used in) financing activities		(31,866,604)		69,236,469		(4,461,039)	(64,916,652)		(32,007,826)
Effect of exchange rate fluctuation on cash and cash equivalents		(15,086,688)		3,878,121		5,263,450	—		(5,945,117)
Net change in cash		(201,489,318)		51,688,661		166,795,993	—		16,995,336
Opening cash balance		236,146,589		11,600,593		(142,889,837)	—		104,857,345
Restricted cash		—		—		3,904	—		3,904
Ending cash balance	¥	34,657,271	¥	63,289,254	¥	23,902,252	—	¥	121,848,777

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EX-99.3

Exhibit 99.3

Recon Technology, Ltd Reports Financial Results for the First Six Months of Fiscal Year 2024

BEIJING, June 28, 2024 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) (“Recon” or the “Company”), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for the first six months of fiscal year 2024.

First Six Months of Fiscal 2024 Financial Highlights:

- Total revenue was RMB45.3 million ($6.4 million) for the six months ended December 31, 2023, identical to the same period in 2022.

- Gross profit decreased to RMB12.1 million ($1.7 million) for the six months ended December 31, 2023, from RMB13.1 million ($1.8 million) for the same period in 2022.

- Gross margin decreased to 26.7% for the six months ended December 31, 2023 from 28.8% for the same period in 2022.

- Net loss was RMB23.1 million ($3.3 million) for the six months ended December 31, 2023, a decrease of RMB6.8 million ($1.0 million) from net loss of RMB29.9 million ($4.2 million) for the same period of 2022.

	For the Six Months Ended
	December 31,
(in RMB millions, except earnings per share; differences due to rounding)	2023			2022			Increase /(Decrease)			Percentage Change
Revenue	RMB	45.3		RMB	45.6		RMB	(0.3)		(0.7)	%
Gross profit		12.1			13.1			(1.0)		(7.8)	%
Gross margin		26.7	%		28.8	%		(7.8)	%	/
Net loss		(23.1)			(29.9)			(6.8)		(22.6)	%
Net loss per share – Basic and diluted		(8.27)			(15.46)			(7.19)		(46.5)	%

Management Commentary

“We have had a good six months in all of our major businesses, especially our oilfield services business,” said Mr. Shenping Yin, Founder and CEO of Recon. “Although our revenues were flat compared to last year, the structural improvement of our business is essentially complete. Our onshore oil and gas fields service business has shown good signs of recovery, and we have also developed new customers in offshore fields. We have purchased land to begin construction of a chemical plant for the chemical recycling of plastic waste, and are continuing to work on the pre-approval procedures required to operate the plant, which are essential to ensure future compliance in China. We believe this facility will generate significant returns for our company and our shareholders in the future and is also an important way for us to meet our EGS obligations. We remain excited about fiscal 2024 and beyond.”

First Six Months Fiscal 2024 Financial Results:

Revenue

Total revenues for the six months ended December 31, 2023 were approximately RMB45.3 million ($6.4 million), a decrease of approximately RMB0.3 million ($0.04 million) or 0.7% from RMB45.6 million ($6.4 million) for the same period in 2022.

- Revenue from automation product and software decreased by RMB1.5 million ($0.2 million) or 7.9%. During the six months period ended by December 31, 2023, affected by temporary changes in market participation requirements from electricity industry customers, our business in the electronic automation segment disrupted and revenue from non-oilfield customers decreased by RMB9.6 million ($1.3 million). However, due to the recovery of oilfield production, sales to oilfield customers increased by RMB8.1million ($1.1 million). Thus, our revenue from automation product and software business decreased slightly overall. We anticipate that revenue from the electronic business will resume and revenue will recover from October, 2024.

- Revenue from equipment and accessories increased by RMB8.1 million ($1.1 million) or 83.6%. The increase in revenue was driven by the continued growth of our oilfield business and the successful expansion of our offshore oilfield services.

1

- Revenue from oilfield environmental protection decreased by RMB4.7 million ($0.7 million) or 37.0%, mainly due to a reduction in the volume of oily wastewater provided by customers as their production intensity decreased. In addition, Gansu BHD’ s hazardous waste operation permit expired in July, 2023, and the renewal process took longer than expected due to changing government regulations. Production activities were not allowed during this period. As a result, revenue from oily sludge treatment was reduced to a remarkably low level.

- Revenue from platform outsourcing services decreased by RMB2.2 million ($0.3 million) or 55.3%. The decrease was mainly due to reduced demand from former gas station customers as they upgraded their own online systems and limited cooperation with third parties. During the period, we shifted our target market from gasoline users to diesel users and established partnerships with several major online freight platform customers. We expect the increase in revenue from this segment to gradually form a new business base for the Company.

Cost of revenue

Cost of revenues increased slightly from RMB32.4 million ($4.6 million) for the six months ended December 31, 2022 to RMB 33.2 million ($4.7 million) for the same period in 2023.

- For the six months ended December 31, 2022 and 2023, cost of revenue from automation product and software was approximately RMB14.9 million and RMB14.0 million ($2.0 million), respectively, representing a decrease of approximately RMB0.9 million ($0.1 million) or 6.2%. The decrease in cost of revenue from automation product and software was primarily attributable to decreased revenue of automation products.

- For the six months ended December 31, 2022 and 2023, cost of revenue from equipment and accessories was approximately RMB6.2 million and ¥12.7 million ($1.8 million), respectively, representing an increase of approximately RMB6.6 million ($0.9 million) or 106.1%. The increase in cost of revenue from equipment and accessories was primarily attributable to increased revenue of equipment and accessories.

- For the six months ended December 31,2022 and 2023, cost of revenue from oilfield environmental protection was approximately RMB9.8 million and RMB5.9 million ($0.8 million), respectively, representing a decrease of approximately RMB3.9 million ($0.5 million) or 39.6%. The decrease in the cost of revenue, mainly drawn from wastewater and oily sludge treatments, was in line with decrease in revenue related to our oily sludge treatment.

- For the six months ended December 31,2022 and 2023, cost of revenue from platform outsourcing services was approximately RMB1.2 million and RMB0.3 million ($0.04 million). The decrease in cost of revenue was mainly due to a reduction in the number of employees, and saved servers leasing costs.

Gross profit

Gross profit decreased to RMB12.1 million ($1.7 million) for the six months ended December 31,2023 from RMB13.1 million ($1.8 million) for the same period in 2022. Our gross profit as a percentage of revenue decreased to 26.7 % for the six months ended December 31, 2023 from 28.8% for the same period in 2022.

- For the six months ended December 31, 2022 and 2023, our gross profit from automation product and software was approximately RMB4.1 million and RMB3.5 million ($0.5 million), respectively, representing a decrease in gross profit of approximately RMB0.6 million ($0.1 million) or 14.3%. The gross margin for automation product and software has remained relatively stable in this period.

- For the six months ended December 31, 2022 and 2023, gross profit from equipment and accessories was approximately RMB3.5 million and RMB5.1 million ($0.7 million), respectively, representing an increase of approximately RMB1.6 million ($0.2 million) or 46.4 %. The reason for the decrease in gross margin is that oilfield customers have adopted a low-cost operating model and tightly controlled budgets, which has narrowed the overall margins of the market. Consequently, we had to resort to lower margins to secure business.

- For the six months ended December 31, 2022 and 2023, gross profit from oilfield environmental protection was approximately RMB2.8 million and RMB2.0 million ($0.3 million), respectively, representing a decrease of RMB0.8 million ($0.1 million) or 27.4%. The decrease in gross profit from oilfield environmental protection was primarily due to decreased production of oily sludge and oily wastewater.

2

- For the six months ended December 31, 2022 and 2023, gross profit from platform outsourcing services was approximately RMB2.8 million and RMB1.5 million ($0.2 million), respectively, representing a decrease of approximately RMB1.3 million ($0.2 million) or 46.6%, primarily due to lower sales as a result of lower demand.

Operating expenses

Selling expenses increased by 13.1%, or RMB0.5 million ($0.1 million), from RMB4.0 million for the six months ended December 31, 2022 to RMB4.5 million ($0.6 million) in the same period of 2023.

General and administrative expenses decreased by 15.9%, or RMB4.2 million ($0.6 million), from RMB26.2 million for the six months ended December 31, 2022 to RMB22.0 million ($3.1 million) in the same period of 2023.

The Company also recorded a net recovery of credit losses of RMB7.1 million for the six months ended December 31, 2022 as compared to net provision for credit losses of RMB1.6 million ($0.2 million) for the same period in 2023.

Research and development expenses remained relatively stable with a slight increase by 32.4%, or RMB1.7 million ($0.2 million) from RMB5.1 million for the six months ended December 31, 2022 to RMB6.8 million ($1.0 million) for the same period of 2023.

Loss from operations

Loss from operations was RMB22.8 million ($3.2 million) for the six months ended December 31, 2023, compared to a loss of RMB15.1 million for the same period of 2022. This RMB7.7 million ($1.1 million) increase in loss from operations was primarily due to the increase in operating expense as discussed above.

Change in fair value of warrant liability

The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Loss in fair value changes of warrant liability was RMB20.1million and RMB0.22 million ($0.03 million) for the six months ended December 31, 2022 and 2023, respectively. On December 14, 2023, the Company redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers, and the difference between the repurchase price and fair value of the warrants, a difference of RMB1.72 million ($0.24 million), was recognized as loss in fair value changes of warrant liability.

Interest income

Net interest income was RMB10.4 million ($1.5 million) for the six months ended December 31, 2023, compared to net interest income of RMB5.0 million for the same period of 2022. The RMB5.4 million ($0.8 million) increase in net interest income was primarily due to the increased short-term investments we invested during the six months ended December 31,2023.

Other income (expenses), net.

Other net expenses was RMB8.6 million ($1.2 million) for the six months ended December 31, 2023, compared to other net income of RMB0.3 million for the same period of 2022. The RMB8.9 million ($1.2 million) increase in other net expenses was primarily due to an increase in other expenses of RMB8.9 million ($1.2 million) as we accrued an estimated liability based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023. On December 14, 2023, the Company redeemed an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. The Warrant Purchase Agreement stipulated that “The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement”. The Company accrued an estimated liability of $1.2 million based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

3

Net loss

As a result of the factors described above, net loss was RMB23.1 million ($3.3 million) for the six months ended December 31, 2023, an increase of RMB6.8 million ($1.0 million) from net loss of RMB29.9 million for the same period of 2022.

Cash and short-term investment

As of June 30, 2023, we had cash in the amount of approximately RMB104.1 million ($14.7 million) and short-term investment in bank fixed income product of approximately RMB184.2 million ($25.9 million). As of December 31, 2023, we had cash in the amount of approximately RMB121.8 million ($17.2 million) and short-term investment in bank fixed income product of approximately RMB134.0 million ($18.9 million).

About Recon Technology, Ltd (“RCON”)

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

Forward-Looking Statements

Recon includes “forward-looking statements” within the meaning of the federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical fact or they use words such as “scheduled,” “may,” “will,” “could,” “should,” “would,” “expect,” “believe,” “anticipate,” “project,” “plan,” “estimate,” “forecast,” “goal,” “objective,” “committed,” “intend,” “continue,” or “will likely result,” and similar expressions that concern Recon’s strategy, plans, intentions or beliefs about future occurrences or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those that Recon expected. Many of these statements are derived from Recon’s operating budgets and forecasts, which are based on many detailed assumptions that Recon believes are reasonable, or are based on various assumptions about certain plans, activities or events which we expect will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under “Risk Factors” in Recon’s most recent Annual Report on Form 20-F and any subsequent half-year financial filings on Form 6-K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements that Recon makes from time to time in its SEC filings and public communications. Recon cannot assure the reader that it will realize the results or developments Recon anticipates, or, even if substantially realized, that they will result in the consequences or affect Recon or its operations in the way Recon expects. Forward-looking statements speak only as of the date made. Recon undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, Recon.

For more information, please contact:

The Company

Ms. Liu Jia

Chief Financial Officer

Recon Technology, Ltd

Phone: +86 (10) 8494-5799

Email: info@recon.cn

4

XML

Document And Entity Information	6 Months Ended
	Dec. 31, 2023
Document And Entity Information [Abstract]
Entity Registrant Name	Recon Technology, Ltd
Entity Central Index Key	0001442620
Document Type	6-K
Document Period End Date	Dec. 31, 2023
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS		Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Current assets
Cash		¥ 121,848,777	$ 17,162,041	¥ 104,125,800
Restricted cash		3,904	550	731,545
Short-term investments		134,000,000.0	18,866,554	184,184,455
Notes receivable		12,532,717	1,765,196	3,742,390
Accounts receivable, net		30,813,885	4,340,045	27,453,415
Inventories, net		1,855,535	261,347	6,330,701
Other receivables, net		4,184,778	589,414	2,185,733
Loans to third parties		79,374,144	11,179,614	123,055,874
Purchase advances, net		1,996,413	281,189	2,680,456
Contract costs, net		37,323,824	5,256,951	49,572,685
Prepaid expenses		295,384	41,603	350,119
Operating lease right-of-use assets, net - current (including ¥nil and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)		879,288	123,845
Total current assets		425,059,299	59,868,349	504,413,173
Property and equipment, net		23,492,024	3,308,782	24,752,864
Long-term other receivables, net				3,640
Long-term loan to third parties		18,500,000	2,605,671
Operating lease right-of-use assets, net - non-current (including ¥335,976 and ¥nil from a related party as of June 30, 2023 and December 31, 2023, respectively)		16,204,906	2,282,413	2,654,900
Total Assets		483,256,229	68,065,215	531,824,577
Current liabilities
Short-term bank loans		12,336,285	1,737,529	12,451,481
Accounts payable		12,062,861	1,699,018	10,791,721
Other payables		1,688,166	237,773	5,819,010
Other payable- related parties		2,209,017	311,134	2,592,395
Contract liabilities		4,888,749	688,566	2,748,365
Accrued payroll and employees' welfare		2,399,919	338,022	2,382,516
Taxes payable		1,702,898	239,848	1,163,006
Short-term borrowings - related parties		20,019,889	2,819,742	20,018,222
Operating lease liabilities - current (including ¥335,976 and ¥113,361 ($15,967) from a related party as of June 30, 2023 and December 31, 2023, respectively)		1,038,354	146,248	3,066,146
Warrant liability - current		8,519,880	1,200,000
Total Current Liabilities		66,866,018	9,417,880	61,032,862
Operating lease liabilities - non-current (including ¥nil ($nil) and ¥nil ($nil) from a related party as of June 30, 2023 and December 31, 2023, respectively)		25,869	3,644	25,144
Warrant liability - non-current		993,986	140,000	31,615,668
Total Liabilities		67,885,873	9,561,524	92,673,674
Commitments and Contingencies
Equity
Additional paid-in capital	[1]	584,275,905	82,293,540	580,340,061
Statutory reserve		4,148,929	584,364	4,148,929
Accumulated deficit		(192,994,848)	(27,182,756)	(170,440,826)
Accumulated other comprehensive income		30,517,774	4,298,339	35,127,173
Total shareholders' equity		425,980,244	59,998,062	449,206,962
Non-controlling interests		(10,609,888)	(1,494,371)	(10,056,059)
Total equity		415,370,356	58,503,691	439,150,903
Total Liabilities and Equity		483,256,229	68,065,215	531,824,577
Class A ordinary shares
Equity
Common stock value		27,791	3,914	26,932
Class B ordinary shares
Equity
Common stock value		¥ 4,693	$ 661	¥ 4,693

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

XML

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Parenthetical)			6 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 $ / shares shares	Dec. 31, 2023 CNY (¥) shares	Mar. 28, 2024 $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Oct. 16, 2023 shares	Oct. 10, 2023 shares	Jun. 30, 2023 CNY (¥) shares	Jun. 30, 2023 $ / shares	Mar. 15, 2023 $ / shares	Dec. 31, 2022 $ / shares shares	Jun. 14, 2021 $ / shares	Apr. 05, 2021 $ / shares shares	Apr. 05, 2021 ¥ / shares shares
Operating lease right-of-use assets, net - current			¥ 879,288		$ 123,845
Operating lease right-of-use assets, net - non-current			16,204,906		2,282,413			¥ 2,654,900
Operating lease liabilities - current			722,857		101,812			3,066,146
Operating lease liabilities - non-current			¥ 341,366		$ 48,080			¥ 25,144
Ordinary shares, shares outstanding	7,927,132
Reverse stock split	0.056		0.2
Class A ordinary shares
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001		$ 0.0925	$ 0.0001				$ 0.0001	$ 0.0925	$ 0.0001	$ 0.0925	$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		500,000,000	500,000,000	150,000,000	500,000,000			500,000,000			500,000,000		150,000,000	150,000,000
Ordinary shares, shares issued			2,371,573		2,371,573	1,175,000		2,306,295			1,704,766
Ordinary shares, shares outstanding	141,703,218		2,371,573		2,371,573		1,175,000	2,306,295			1,704,766
Reverse stock split	0.056	0.056
Class B ordinary shares
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001		$ 0.0925	$ 0.0001				$ 0.0001		$ 0.0001		$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		80,000,000	80,000,000	20,000,000	80,000,000			80,000,000			80,000,000		20,000,000	20,000,000
Ordinary shares, shares issued			7,100,000		7,100,000			7,100,000			4,100,000
Ordinary shares, shares outstanding			7,100,000		7,100,000			7,100,000			4,100,000
Related party
Operating lease right-of-use assets, net - current			¥ 113,361		$ 15,967
Operating lease right-of-use assets, net - non-current | ¥			0					¥ 335,976
Operating lease liabilities - current			113,361		$ 15,967			335,976
Operating lease liabilities - non-current | ¥			¥ 0					¥ 0

XML

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)		6 Months Ended
		Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2023 CNY (¥) ¥ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Revenue		$ 6,374,269	¥ 45,256,672	¥ 45,559,591
Cost of revenue		4,669,211	33,150,930	32,427,772
Gross profit		1,705,058	12,105,742	13,131,819
Selling and distribution expenses		640,448	4,547,115	4,021,899
General and administrative expenses		3,104,557	22,042,042	26,212,540
Allowance for (net recovery of) credit losses		218,787	1,553,364	(7,141,708)
Research and development expenses		952,871	6,765,287	5,109,302
Operating expenses		4,916,663	34,907,808	28,202,033
Loss from operations		(3,211,605)	(22,802,066)	(15,070,214)
Other income (expenses)
Subsidy income		18,511	131,428	85,602
Interest income		1,698,706	12,060,640	5,187,649
Interest expense		(237,086)	(1,683,289)	(169,091)
Loss in fair value changes of warrants liability		(273,412)	(1,941,195)	(20,097,665)
Foreign exchange transaction gain (loss)		(10,710)	(76,040)	42,455
Other income (expenses)		(1,225,550)	(8,701,288)	157,753
Other income, net		(29,541)	(209,744)	(14,793,297)
Loss before income tax		(3,241,146)	(23,011,810)	(29,863,511)
Income tax expenses		13,527	96,041	9,180
Net loss		(3,254,673)	(23,107,851)	(29,872,691)
Less: Net loss attributable to non-controlling interests		(78,005)	(553,829)	3,727
Net loss attributable to Recon Technology, Ltd		(3,176,668)	(22,554,022)	(29,876,418)
Comprehensive income (loss)
Net loss		(3,254,673)	(23,107,851)	(29,872,691)
Foreign currency translation adjustment		(649,220)	(4,609,399)	9,663,701
Comprehensive loss		(3,903,893)	(27,717,250)	(20,208,990)
Less: Comprehensive Income (loss) attributable to non- controlling interests		(78,005)	(553,829)	3,727
Comprehensive loss attributable to Recon Technology, Ltd		$ (3,825,888)	¥ (27,163,421)	¥ (20,212,717)
Loss per share - basic | (per share)		$ (1.16)	¥ (8.27)	¥ (15.46)	[1]
Loss per share - diluted | (per share)		$ (1.16)	¥ (8.27)	¥ (15.46)
Weighted - average shares - basic	[1]	2,728,056	2,728,056	1,932,544
Weighted - average shares - diluted		2,728,056	2,728,056	1,932,544

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

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical)		6 Months Ended
	May 01, 2024	Dec. 31, 2023
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Reverse stock split	0.056	0.2

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY		Class A ordinary shares Common Stock CNY (¥) shares		Class B ordinary shares Common Stock CNY (¥) shares		Additional Paid-in Capital CNY (¥)		Statutory Reserve CNY (¥)	Accumulated deficit CNY (¥)	Accumulated Other Comprehensive income CNY (¥)	Shareholders' Equity CNY (¥)	Non-controlling Interest CNY (¥)	CNY (¥)	USD ($)
Opening Balance at Jun. 30, 2022		¥ 19,461	[1]	¥ 2,604	[1]	¥ 516,426,799	[1]	¥ 4,148,929	¥ (111,273,525)	¥ 11,307,461	¥ 420,631,729	¥ (7,746,968)	¥ 412,884,761	$ 58,153,603
Opening Balance (in shares) at Jun. 30, 2022		1,704,766	[1]	4,100,000
Restricted shares issued for services						4,304,857	[1]				4,304,857		4,304,857	606,326
Restricted shares issued for management						1,796,417	[1]				1,796,417		1,796,417	253,020
Net income (loss) for the period									(29,876,418)		(29,876,418)	3,727	(29,872,691)	(4,207,481)
Foreign currency translation adjustment										9,663,701	9,663,701		9,663,701	1,361,104
Ending Balance at Dec. 31, 2022		¥ 19,461	[1]	¥ 2,604	[1]	522,528,073	[1]	4,148,929	(141,149,943)	20,971,162	406,520,286	(7,743,241)	398,777,045	56,166,572
Ending Balance (in shares) at Dec. 31, 2022		1,704,766	[1]	4,100,000
Opening Balance at Jun. 30, 2023		¥ 26,932	[1]	¥ 4,693	[1]	580,340,061	[1]	4,148,929	(170,440,826)	35,127,173	449,206,962	(10,056,059)	439,150,903	61,853,111
Opening Balance (in shares) at Jun. 30, 2023		2,306,295	[1]	7,100,000
Restricted shares issued for services						1,070,143	[1]				1,070,143		1,070,143	150,726
Proceeds from Pre-Founded warrants | ¥	[1]	¥ 859				(859)
Proceeds from Pre-Founded warrants (in shares)	[1]	65,278
Restricted shares issued for management						2,866,560	[1]				2,866,560		2,866,560	403,747
Net income (loss) for the period									(22,554,022)		(22,554,022)	(553,829)	(23,107,851)	(3,254,673)
Foreign currency translation adjustment										(4,609,399)	(4,609,399)		(4,609,399)	(649,220)
Ending Balance at Dec. 31, 2023		¥ 27,791	[1]	¥ 4,693	[1]	¥ 584,275,905	[1]	¥ 4,148,929	¥ (192,994,848)	¥ 30,517,774	¥ 425,980,244	¥ (10,609,888)	¥ 415,370,356	$ 58,503,691
Ending Balance (in shares) at Dec. 31, 2023		2,371,573	[1]	7,100,000

[1] *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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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical)		6 Months Ended
	May 01, 2024	Dec. 31, 2023
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Reverse stock split	0.056	0.2

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS	6 Months Ended			12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)
Cash flows from operating activities:
Net loss	¥ (23,107,851)	$ (3,254,673)	¥ (29,872,691)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,426,971	200,985	1,952,625
Loss (gain) from disposal of equipment	32,252	4,543	(12,782)
Gain in fair value changes of warrants liability	10,461,075	1,473,412	20,097,665
Allowance for (net recovery of) credit losses	1,553,364	218,787	(7,141,708)
Allowance for slow moving inventories	(350,637)	(49,386)	245,990
Amortization of right of use assets	570,959	80,418	1,627,888
Restricted shares issued for management and employees	2,866,560	403,747	1,796,417
Restricted shares issued for services	1,070,143	150,726	4,304,857
Accrued interest income from loans to third parties	(4,415,298)	(621,882)	(3,757,041)
Accrued interest income from short-term investment	(2,352,250)	(331,307)	0
Changes in operating assets and liabilities:
Notes receivable	(8,790,327)	(1,238,092)	2,356,367
Accounts receivable	(4,412,034)	(621,422)	(12,501,742)
Inventories	4,863,435	685,000	(1,158,138)
Other receivables	5,465,227	769,761	(9,673,906)
Purchase advances	558,040	78,598	(449,477)
Contract costs	10,442,916	1,470,854	9,765,091
Prepaid expense	54,734	7,709	10,345
Prepaid expense - related parties	0	0	275,000
Operating lease liabilities	(2,027,067)	(285,506)	(1,619,168)
Accounts payable	1,271,140	179,036	247,387
Other payables	(4,103,150)	(577,918)	(1,414,691)
Other payables-related parties	(383,378)	(53,998)	231,133
Contract liabilities	2,140,385	301,467	(1,945,877)
Accrued payroll and employees' welfare	17,399	2,451	27,710
Taxes payable	537,591	75,718	677,510
Net cash used in operating activities	(6,609,801)	(930,972)	(25,931,236)
Cash flows from investing activities:
Purchases of property and equipment	(216,082)	(30,435)	(821,272)
Proceeds from disposal of equipment	20,000	2,817	31,950
Purchase of land use right	(15,000,251)	(2,112,741)	0
Repayments of loans to third parties	44,613,948	6,283,743	25,194,900
Payments made for loans to third parties	(16,600,000)	(2,338,061)	(58,488,100)
Payments for short-term investments	(131,598,400)	(18,535,247)	0
Redemption of short-term investments	180,338,865	25,400,198	0
Net cash (used in) generated by investing activities	61,558,080	8,670,274	(34,082,522)
Cash flows from financing activities:
Proceeds from short-term bank loans	0	0	1,000,000
Repayments of short-term bank loans	(123,000)	(17,324)	0
Proceeds from short-term borrowings-related parties	10,000,000	1,408,471	10,000,000
Repayments of short-term borrowings-related parties	(10,018,222)	(1,411,037)	(9,000,000)
Repayments of long-term borrowings-related party	0	0	(476,927)
Redemption of warrants	(31,866,604)	(4,488,317)	0
Net cash provided by (used in) financing activities	(32,007,826)	(4,508,207)	1,523,073
Effect of exchange rate fluctuation on cash and restricted cash	(5,945,117)	(837,352)	10,633,748
Net increase (decrease) in cash and restricted cash	16,995,336	2,393,743	(47,856,937)
Cash and restricted cash, beginning of year	104,857,345	14,768,848	317,698,417	¥ 317,698,417
Cash and restricted cash, end of year	121,852,681	17,162,591	269,841,480	104,857,345
Supplemental cash flow information
Cash paid during the year for interest	468,440	64,601	624,321
Cash paid during the year for taxes	16,505	2,276	9,180
Reconciliation of cash and restricted cash, beginning of year
Cash	104,125,800	14,665,812	316,974,857	316,974,857
Restricted cash	731,545	103,036	723,560	723,560
Cash and restricted cash, beginning of year	104,857,345	14,768,848	317,698,417	317,698,417
Cash	121,848,777	17,162,041	269,111,420	104,125,800
Restricted cash	3,904	550	730,060	731,545
Cash and restricted cash, end of year	121,852,681	17,162,591	269,841,480	¥ 104,857,345
Non-cash investing and financing activities
Right-of-use assets obtained in exchange for operating lease obligations	298,783	41,204	0
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement	0	0	43,881
Inventories transferred to and used as fixed assets	¥ 0	$ 0	¥ (65,456)

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ORGANIZATION AND NATURE OF OPERATIONS

6 Months Ended

Dec. 31, 2023

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

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 hearing 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 ($3,872,590) as of December 31, 2023. 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 ($591,558) as of December 31,2023. 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. The remaining paid in capital should be contributed by BHD and the other individual shareholder is ¥33,300,000 ($4,827,276) and ¥12,500,000 ($1,812,041) respectively. Based on its charter dated September 29, 2017, the remaining capital will be injected before September 29, 2036.

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 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. The transaction has been 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. 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, in exchange of the additional 8% equity ownership of FGS.

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.

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-VIE:

The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and the following PRC legal entities that operate in the Chinese chemical recycling industry:

1. Shandong Recon Renewable Resources Technology Co., Ltd. (“Shandong Recon”)

2. Guangxi Recon Renewable Resources Technology Co., Ltd. (“Guangxi Recon”)

On October 10, 2023, Shandong Recon Renewable Resources Technology C0., Ltd (“Shandong Recon”), 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 Technology Co., Ltd. (“Guangxi Recon”), 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, and (5) developing, upgrading and maintaining the online operation and cooperation platform of gas stations, marketing and promotion services, (6) Plastic chemical cycles business, etc.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

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.

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 six months ended December 31, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.0999 = US$1.00, the approximate exchange rate prevailing on December 31, 2023. 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. 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.

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.

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

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, 2023 and December 31, 2023, the Company had short-term investments balance of ¥184.2 million and ¥134.0 million ($18.9 million), including accrued interests of ¥2.9 million and ¥2.4 million ($331,307), respectively.

Accounts Receivables, Net, Other Receivables, Net and Loan 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 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 net recovery of provision for credit loss for the six months ended December 31, 2023 decreased by approximately ¥3.1 million ($0.4 million) from the six months ended December 31, 2022.

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.

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 business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

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.

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 ten 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
Production equipment, including:
Equipment	10 years
Utilities and Facilities	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.

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation

techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment.

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company concluded that there was no impairment for the long-lived assets for the six months ended December 31, 2022 and 2023 respectively. As of December 31, 2023, all Long-Lived Assets were fully impaired.

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.

- 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.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the six months ended December 31, 2022 and 2023. The Company recorded no investment income on its equity method investment in unconsolidated entities during the six months ended December 31, 2022 and 2023, respectively.

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

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.

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 six months ended December 31, 2022 and 2023 is disclosed in Note 24.

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.

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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. The Company’s services enable terminal users of different mobile apps run by its clients or cooperators to complete refueling in cash or online through different payment channels, when each transaction, including refueling and payment, is completed, the Company is entitled to charge with pre-settled rates of each transaction amount as service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly, based 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,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951
Contract liabilities	¥	2,748,365	¥	4,888,749	$	688,566

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.

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 December 31, 2023. The amount of revenue recognized during the six months ended December 31, 2022 and 2023 that was previously included within contract liability balances was ¥1,901,277, and ¥1,689,759 ($237,998), respectively.

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.

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 2023, the Company did calculation and the amount was not material as end of December 31, 2023.

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 expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥101,550 and ¥342,878 ($48,293) for the six months ended December 31, 2022 and 2023, respectively.

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. There was ¥834,975 ($117,604) and ¥834,975 impairment for ROU lease assets as of December 31, 2023 and June 30, 2023.

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 December 31, 2023 and June 30, 2023.

As of December 31, 2023, the tax years ended December 31, 2018 through December 31, 2023 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).

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 stock 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 (loss) per share for the six months ended December 31, 2022 and 2023:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Numerator:
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	$	(3,176,668)
Denominator:				​		​
Weighted-average number of ordinary shares outstanding – basic*		1,932,544		2,728,056		2,728,056
Class A Ordinary Shares*		1,704,766		2,333,612		2,333,612
Class B Ordinary Shares (used for EPS calculation) **		227,778		394,444		394,444
Potentially dilutive shares from outstanding options/warrants/convertible notes		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		1,932,544		2,728,056		2,728,056
Earnings (loss) per share – basic*	¥	(15.46)	¥	(8.27)	$	(1.16)
Earnings (loss) per share – diluted*	¥	(15.46)	¥	(8.27)	$	(1.16)

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

** The weighted average number of Class B Ordinary Shares outstanding and number used for EPS calculation has been retrospectively adjusted and converted by a ratio of 1/18 to reflect the actual dividend rate of Class B Ordinary Share after the 2024 Reverse Split.

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.

The estimated liabilities accrued by the company for potential future substantial transaction compensation under the Warrant Purchase Agreement are classified and displayed as "warrants liability" in the financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures.” This ASU expands required public entities’ segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

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.

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ACCOUNTS RECEIVABLE, NET

6 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	27,606,257	¥	31,553,107	$	4,444,162
Allowance for credit losses		(152,842)		(739,222)		(104,117)
Total third-parties, net	¥	27,453,415	¥	30,813,885	$	4,340,045

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties- long-term	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	842,607	¥	1,307,791	$	184,199
Allowance for credit losses		(842,607)		(1,307,791)		(184,199)
Total third-parties, net	¥	—	¥	—	$	—

Net recovery of provision made for credit losses of accounts receivable due from third parties was ¥4,012,249 for the six months ended December 31, 2022. Provision for credit losses of accounts receivable due from third parties was ¥1,051,564 for the six months ended December 31, 2023.

As the date of this report, approximately 28.6%, or ¥8.8 million ($1.2 million) of net outstanding balance as of December 31, 2023 has been collected.

Movement of allowance for doubtful accounts is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	9,612,470	¥	995,449	$	140,206
Charge to (reversal of) credit losses		(8,767,356)		1,051,564		148,110
Foreign currency translation adjustments		150,335		—		—
Ending balance	¥	995,449	¥	2,047,013	$	288,316

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NOTES RECEIVABLE

6 Months Ended

Dec. 31, 2023

NOTES RECEIVABLE

NOTES RECEIVABLE

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, 2023 and December 31, 2023, notes receivable was ¥3,742,390 and ¥12,532,717 ($1,765,196), respectively. As of June 30, 2023 and December 31, 2023, no notes were guaranteed or collateralized. As the date of this report, 100.0%, or ¥12.5 million ($1.8 million) have been subsequently collected.

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OTHER RECEIVABLES, NET

6 Months Ended

Dec. 31, 2023

OTHER RECEIVABLES, NET

OTHER RECEIVABLES, NET

NOTE 5. OTHER RECEIVABLES, NET

Other receivables, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Business advances to officers and staffs (A)	¥	854,162	¥	1,849,761	$	260,533
Deposits for projects		1,247,992		1,224,966		172,533
VAT recoverable		690,053		577,545		81,346
Others		1,392,126		1,134,950		159,854
Allowance for credit losses		(1,994,960)		(602,444)		(84,852)
Subtotal		2,189,373		4,184,778		589,414
Less: Long term portion (B)		(3,640)		—		—
Other receivable - current portion	¥	2,185,733	¥	4,184,778	$	589,414

(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.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Provision for credit losses of other receivables was ¥549,132 for the six months ended December 31, 2022. Net recovery of provision for credit losses of other receivables was ¥1,392,516 for the six months ended December 31, 2023.

Movement of allowance for credit losses is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	619,444	¥	1,994,960	$	280,984
Charge to (reversal of) allowance		1,375,516		(1,392,516)		(196,132)
Less: written off		—		—		—
Ending balance	¥	1,994,960	¥	602,444	$	84,852

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LOANS TO THIRD PARTIES

6 Months Ended

Dec. 31, 2023

LOANS TO THIRD PARTIES

LOANS TO THIRD PARTIES

NOTE 6. LOANS TO THIRD PARTIES

Loans to third parties consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Working fund to third party companies	¥	123,055,874	¥	97,874,144	$	13,785,285
Less: Long term portion		—		(18,500,000)		(2,605,671)
Loans to third parties	¥	123,055,874	¥	79,374,144	$	11,179,614

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 and have terms of no more than one year, except one of the loans to third party has term of three years. 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,

approximately 63.1%, or ¥61.8 million ($8.7 million) was collected by the Company and the remaining part was expected to be paid in full by end of January 2025.

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CONTRACT COSTS, NET

6 Months Ended

Dec. 31, 2023

CONTRACT COSTS, NET

CONTRACT COSTS, NET

NOTE 7. CONTRACT COSTS, NET

Contract costs, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Contract costs	¥	52,158,840	¥	41,886,747	$	5,899,625
Allowance for credit losses		(2,586,155)		(4,562,923)		(642,674)
Total contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951

As of December 31, 2023, total contracts costs, net amounted to ¥37,323,824 ($5,256,951), of which 18.5%, or ¥6.9 million ($1.0 million) have been subsequently realized as the date of this report, and the remaining balance is expected to be utilized by December 2024.

Net recovery of provision for credit losses of contract costs was ¥3,751,575 for the six months ended December 31, 2022. Provision for credit losses of contract costs was ¥1,939,135 ($273,122) for the six months ended December 31, 2023.

Movement of allowance for credit losses of contract costs is as follows:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	4,063,482	¥	2,586,155	$	364,252
Reversal of allowance		(1,720,095)		1,939,135		273,122
Charge to cost of sales		242,768		37,633		5,300
Ending balance	¥	2,586,155	¥	4,562,923	$	642,674

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PROPERTY AND EQUIPMENT, NET

6 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

NOTE 8. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Motor vehicles	¥	5,176,175	¥	3,699,101	$	521,007
Office equipment and fixtures		1,440,819		1,401,599		197,411
Production equipment		31,115,843		31,231,574		4,398,875
Leasehold improvement		2,260,000		2,260,000		318,314
Total cost		39,992,837		38,592,274		5,435,608
Less: accumulated depreciation		(14,297,511)		(14,157,788)		(1,994,083)
Less: accumulated impairment		(942,462)		(942,462)		(132,743)
Property and equipment, net	¥	24,752,864	¥	23,492,024	$	3,308,782

Depreciation expenses were ¥1,602,166 and ¥1,426,971 ($200,985) for the six months ended December 31, 2022 and 2023, respectively.

Income from property and equipment disposal was ¥12,782 and ¥32,252 ($4,543) for the six months ended December 31,2022 and 2023, respectively.

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

6 Months Ended

Dec. 31, 2023

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

NOTE 9. 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 RMB 10 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 ($261,667). 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 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.

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	$	66,458
Accounts receivable, net		831,049		117,051
Other receivables, net		144,285		20,322
Contract costs, net		75,250		10,599
Prepaid expenses		91,132		12,836
Property and equipment, net		118,130		16,638
Intercompany receivables*		6,850,000		964,802
Intangible assets- customer relationship		7,000,000		985,929
Goodwill		6,996,895		985,492
Accounts payable		(1,032,078)		(145,365)
Other payables		(1,273,182)		(179,324)
Other payable- related parties		(479,959)		(67,601)
Deferred revenue		(39,786)		(5,604)
Accrued payroll and employees’ welfare		(1,629,519)		(229,513)
Taxes payable		(64,253)		(9,050)
Deferred tax liability		(1,050,000)		(147,889)
Total	¥	17,009,807	$	2,395,781
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		238,004
Fair value of previously held equity interest		30,530,000		4,300,061
Non-controlling interest		34,790,000		4,900,069
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(7,042,353)
Total	¥	17,009,807	$	2,395,781

*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 the six months ended December 31, 2022 and 2023, the management performed evaluation on the impairment of goodwill and concluded that there was no impairment for goodwill for the six months ended December 31, 2022 and 2023. As of December 31, 2023, goodwill was fully impaired.

The identifiable goodwill acquired and the carrying value as of December 31, 2023 is as follows:

	Fair Value
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Goodwill	¥	6,996,895	$	985,492
Less: impairment		(6,996,895)		(985,492)
The carrying value of goodwill as of December 31, 2023	¥	—	$	—

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of December 31, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Intangible assets - customer relationship	¥	7,000,000	$	985,929	10
Less: accumulated amortization		(1,750,000)		(246,482)
Less: impairment		(5,250,000)		(739,447)
Intangible assets - customer relationship, net	¥	—	$	—

The amortization expense of customer relationship was ¥350,000 and ¥nil for the six months ended December 31, 2022 and 2023, respectively.

Impairment loss for intangible assets - customer relationship was all ¥nil for the six months ended December 31, 2022 and 2023, 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.

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LEASES

6 Months Ended

Dec. 31, 2023

LEASES

LEASES

NOTE 10. 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,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Rights of use lease assets - current	¥	—	¥	1,714,263	$	241,449
Less: impairment		—		(834,975)		(117,604)
Rights of use lease assets, net - current		—		879,288		123,845
Rights of use lease assets - non - current		3,489,875		16,204,906		2,282,413
Less: impairment		(834,975)		—		—
Rights of use lease assets, net - non - current		2,654,900		16,204,906		2,282,413
Operating lease liabilities – current	¥	3,066,146	¥	722,857	$	101,812
Operating lease liabilities – non-current		25,144		341,366		48,080
Total operating lease liabilities	¥	3,091,290	¥	1,064,223	$	149,892

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2023:

	June 30,		December 31,
	2023		2023
			RMB
	RMB		(Unaudited)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	23.90		23.50
Weighted average discount rate	5.0	%	5.0	%

Operating lease costs and short-term lease costs for the six months ended December 31, 2022 were ¥1,694,074 and ¥480,040, respectively.

Operating lease costs and short-term lease costs for the six months ended December 31, 2023 were ¥1,659,302 ($233,708) and ¥313,533 ($44,160), respectively.

Impairment loss for the ROU was all ¥nil for the six months ended December 31,2022 and 2023, respectively. As ROU of FGS was not able to generate enough future cashflow. Therefore, the Company decided to record full impairment of the ROU during the year ended June 30, 2023.

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2023:

	RMB		US Dollars
Twelve months ending June 30,	(Unaudited)		(Unaudited)
2024	¥	1,045,399	$	147,241
2025		26,400		3,718
Total lease payments		1,071,799		150,959
Less: imputed interest		(7,576)		(1,067)
Present value of lease liabilities		1,064,223		149,892
Less: operating lease liabilities – current		722,857		101,812
Operating lease liabilities – non-current	¥	341,366	$	48,080

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OTHER PAYABLES

6 Months Ended

Dec. 31, 2023

OTHER PAYABLES

OTHER PAYABLES

NOTE 11. OTHER PAYABLES

Other payables consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Professional service fees	¥	2,246,101	¥	304,474	$	42,884
Distributors and employees		3,073,289		712,173		100,307
Accrued expenses		200,218		193,274		27,222
Others		299,402		478,245		67,360
Total	¥	5,819,010	¥	1,688,166	$	237,773

	June 30,		December 31,		December 31,
	2022		2023		2023
			RMB		US Dollars
Related Parties	RMB		(Unaudited)		(Unaudited)
Expenses paid by the major shareholders	¥	1,796,309	¥	1,663,858	$	234,350
Due to family members of the owners of BHD and FGS		545,159		545,159		76,784
Due to management staff for costs incurred on behalf of the Company		250,927		—		—
Total	¥	2,592,395	¥	2,209,017	$	311,134

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TAXES PAYABLE

6 Months Ended

Dec. 31, 2023

TAXES PAYABLE

TAXES PAYABLE

NOTE 12. TAXES PAYABLE

Taxes payable consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
VAT payable	¥	699,601	¥	720,872	$	101,533
Income tax payable		440,030		536,071		75,504
Other taxes payable		23,375		445,955		62,811
Total taxes payable	¥	1,163,006	¥	1,702,898	$	239,848

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BANK LOANS

6 Months Ended

Dec. 31, 2023

BANK LOANS

BANK LOANS

NOTE 13. BANK LOANS

Short-term bank loans consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Bank of Kunlun (1)	¥	950,000	¥	827,000	$	116,481
Industry and Commercial Bank of China (“ICBC”) (2)		10,000,000		10,007,639		1,409,546
China Construction Bank (3)		1,501,481		1,501,646		211,502
Total short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529

(1) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($408,456) 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. The Company made a withdrawal in an amount of ¥1,000,000 ($140,847) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($7,042). During the six months ended December 31, 2023, the Company repaid ¥ 123,000 ($17,324). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company 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). From December 31, 2024, to the date of this report, the Company repaid ¥8,269 ($1,165).

(2) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,408,471) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($704,235) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($704,235) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

(3) On August 31, 2022, the Company entered into a revolving loan facility with China Construction Bank to borrow up to ¥1,500,000 ($211,271) as working capital for twelve months, with a maturity date of June 9, 2024. The loan has a fixed interest rate of 3.95% per annum. The loan is guaranteed by the non-controlling shareholder of FGS. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

Interest expense for the short-term bank loan was ¥227,918 and ¥159,276 ($22,434) for the six months ended December 31,2022 and 2023, respectively.

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

6 Months Ended

Dec. 31, 2023

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

NOTE 14. SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Short-term borrowings due to related parties consisted of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Short-term borrowings due to related parties:	RMB		(Unaudited)		(Unaudited)
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023	¥	10,004,055	¥	—	$	—
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024*		4,993,950		4,994,892		703,516
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024*		5,020,217		5,021,164		707,216
Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024		—		10,003,833		1,409,010
Total short-term borrowings due to related parties	¥	20,018,222	¥	20,019,889	$	2,819,742

*On May 29, 2024, the Company entered into a three-year supplemental agreement with the founder, changing the term of the loan from May 29, 2024 to April 29, 2027 and the annual interest rate to 3.75%.

No short-term borrowings due to related parties were guaranteed or collateralized as of June 30, 2023 and December 31, 2023.

Interest expense for short-term borrowings due to related parties were ¥142,725 and ¥338,338 ($47,654) for the six months ended December 31, 2022 and 2023, respectively.

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CLASS A ORDINARY SHARES

6 Months Ended

Dec. 31, 2023

CLASS A ORDINARY SHARES

CLASS A ORDINARY SHARES

NOTE 15. CLASS A ORDINARY SHARES

Share offering

On April 5, 2021, the Company held its annual general meeting of shareholders (the “Annual Meeting”) for the fiscal year ended June 30, 2020. At the Annual Meeting, the Company’s shareholders approved a special resolution that the authorized share capital of the Company be amended from US$1,850,000 divided into 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 each, to US$15,725,000 divided into 150,000,000 (8,333,333 shares post 2024 Reverse Split) Class A Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) (US$1.67 post 2024 Reverse Split) each, and 20,000,000 Class B Ordinary Shares of a nominal or par value of US$0.0925 (¥0.62) each. The change from Ordinary Shares to Class A Ordinary Shares is reflected with the NASDAQ Capital Market and in the marketplace at the open of business on April 12, 2021, whereupon the Class A Ordinary Shares began trading. The Company’s Class A Ordinary Shares will continue to trade on the NASDAQ Capital Market under the symbol “RCON” and under the CUSIP Number of G7415M124. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall be entitled to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

On June 14, 2021, 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 6,014,102 (334,117 shares post 2024 Reverse Split) Class A Ordinary Shares, par value $0.0925 (US$1.67 post 2024 Reverse Split) per share and 2,800,000 (155,556 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 8,814,102 (489,673 shares post 2024 Reverse Split) Class A Ordinary Shares in a concurrent private placement, for gross proceeds of approximately $55.0 million before deducting the placement agent’s fees and other offering expenses in an aggregate amount of ¥30,408,264, or $4.7 million.

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.

The following table summarizes the Company’s Pre-Funded Warrants activities and status of Pre-Funded Warrants as of December 31, 2023:

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22
Issued	—		—	—
Forfeited	—		—	—
Exercised	(65,278)		0.18	—
Expired	—		—	—
Outstanding as of December 31, 2023	—	$	—	—

* 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, 2023 and December 31, 2023, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($584,364), respectively.

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

6 Months Ended

Dec. 31, 2023

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

NOTE 16. ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

In May and June 2020, the Company consummated two offerings. In connection with the offering, the Company issued to the investors warrants to purchase an aggregate of 911,112 (50,617 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $2.25 ($40.50 post 2024 Reverse Split) per Class A Ordinary Share, which was amended to $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Shares on the second offering on June 30, 2020. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 26, 2020 and expire on November 25, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,689,389. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.40%), (2) expected warrant life of 5.5 years, (3) expected volatility of 99.50%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised and all the underlying shares were issued.

In June 2020, the Company issued to the investors warrants to purchase an aggregate of 1,680,000 (93,333 shares post 2024 Reverse Split) Class A Ordinary Shares at an exercise price of $1.25 ($22.50 post 2024 Reverse Split) per Class A Ordinary Share. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on June 30, 2020 and expire on December 30, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,639,333. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.35%), (2) expected

warrant life of 5.5 years, (3) expected volatility of 104.26%, and (4) expected dividend yield of 0. As of June 30, 2021, all warrants were exercised.

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 (47,963 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 (47,963 warrants post 2024 Reverse Split) warrants. As of June 30, 2023 and December 31, 2023, the fair value of the warrant liability of the Warrant 2021 was $1,930,000 and $140,000 (¥993,986). During the six months ended December 31, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $2,880,000 and $197,692, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	December 31,			June 30,
Input	2023			2023
Number of warrants*		47,963			47,963		441,710
Share price*	$	0.23		$	0.34		0.34
Risk-free interest rate		4.02	%		4.41	%	4.41	%
Volatility		119	%		127	%	127	%
Exercise price*	$	112.32		$	112.32		14.40
Warrant life		2.96 years			3.47 years		3.47 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 December 31, 2023, the fair value of the warrant liability of the Warrant 2023 was $2,430,000 and $nil. During the six months ended December 31, 2022 and 2023, there was change in fair value of warrant liability in an aggregate amount of $nil and $70,625, respectively.

The key inputs into the Black-Scholes model were as follows at their measurement dates:

	December 31,			June 30,
Input	2023			2023
Number of warrants*		—			555,694
Share price*	$	—		$	0.34
Risk-free interest rate		—	%		3.59	%
Volatility		—	%		110	%
Exercise price*	$	—		$	14.40
Warrant life		—			5.22 years

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

The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2023, 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	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	4,360,000	$	—	$	—	$	4,360,000

			Quoted Prices In		Significant Other		Significant Other
	December 31,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	140,000	$	—	$	—	$	140,000

The following table summarizes the Company’s Warrants activities and status of Warrants as of December 31, 2023:

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	1,045,367	$	18.90	4.40
Issued	—		—	—
Redeemed	(997,404)		14.40	—
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of December 31, 2023	47,963	$	112.32	2.96

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

		December 31,
Description		2023
Warrant liability -current *	$	1,200,000

* On December 14, 2023, company bought back an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. Warrant Purchase Agreement stipulated that “The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement”. The Company accrued an estimated liability of $1,200,000 based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

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SHARE-BASED COMPENSATION

6 Months Ended

Dec. 31, 2023

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

NOTE 17. 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, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of December 31, 2023	4,444	$	148.50

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

The following is a summary of the status of options outstanding and exercisable as of December 31, 2023:

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price*		Number*	life (Years)	Price*		Number*	life (Years)
$	148.50	4,444	1.08	$	148.50	4,444	1.08
		4,444				4,444

*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 six months ended December 31, 2022 and 2023, respectively. No unrecognized share-based compensation for stock options as of December 31, 2023.

Restricted Shares to Senior Management

As of December 31, 2023, the Company has granted restricted Class A Ordinary Shares to senior management and employees as follows:

On August 21, 2018, the Company granted 391,200 (21,733 shares post 2024 Reverse Split) restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $2,523,240 based on the closing share price $6.45 ($116.10 post 2024 Reverse Split) at August 21, 2018. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. All granted shares under this plan are fully vested on September 3, 2021.

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, 2023, 547,444 (30,414 shares post 2024 Reverse Split) shares were vested and the remaining 1,094,887 (60,827 shares post 2024 Reverse Split) shares will not be vested until 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 will not be vested until September 15, 2023.

Nil and nil restricted Class A restricted shares were issued and outstanding for the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

As of December 31, 2023, the Company has granted restricted Class B Ordinary Shares to senior management as follows:

On December 5, 2021, the Company granted 2,500,000 restricted shares to its management as compensation cost for awards. The fair value of the restricted shares was $4,175,000 based on the fair value of the share price $1.67 at December 5, 2021. These restricted shares vested immediately on the grant date. All granted shares under this plan are issued and outstanding on December 5, 2021.

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.

Nil and nil restricted Class B restricted shares were issued and outstanding during the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for management was ¥1,796,417 and ¥2,866,560 ($403,747) for the six months ended December 31, 2022 and 2023, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of December 31, 2023 was approximately ¥4.7 million ($0.7 million), which is expected to be recognized over a weighted average period of approximately 1.16 years.

Restricted Shares for services

As of December 31, 2023, the Company has granted restricted Class A Ordinary Shares to consultant as follows:

On November 10, 2021, the Company signed a service agreement with Starry. As the service consideration, the Company should issue 500,000 (27,778 shares post 2024 Reverse Split) restricted Class A Ordinary Shares which vested in equal monthly amounts through the end of December 31, 2021. Half of the restricted Class A Ordinary Shares was valued based on the closing share price of $1.60 ($28.80 post 2024 Reverse Split) on December 10, 2021 and the other half was valued based on the closing share price of $1.31

($23.58 post 2024 Reverse Split) on December 31, 2021. 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued on December 10, 2021 and the remaining 250,000 (13,889 shares post 2024 Reverse Split) restricted Class A Ordinary Shares were issued in January 2022.

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, 2023.

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 plan have been vested until September15, 2023.

¥Nil and ¥nil restricted Class A restricted shares were issued and outstanding during the six months ended December 31, 2022 and 2023, respectively, for all the plans mentioned above.

The share-based compensation expense recorded for restricted shares issued for service was ¥4,304,857 and ¥1,070,144 ($150,726) for the six months ended December 31, 2022 and 2023, respectively.

Following is a summary of the restricted shares granted:

Restricted share grants	Shares*
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938
Granted	—
Vested	(111,111)
Non-vested as of December 31, 2023	60,827

*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 December 31, 2023:

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share*		Number*	Period (Years)
$	18.72	60,827	1.16
		60,827

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

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INCOME TAX

6 Months Ended

Dec. 31, 2023

INCOME TAX

INCOME TAX

NOTE 18. 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.

Income (loss) before provision for income taxes consisted of:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Outside China areas	¥	(32,395,145)	¥	(14,621,317)	$	(2,059,369)
China		2,531,634		(8,390,493)		(1,181,776)
Total	¥	(29,863,511)	¥	(23,011,810)	$	(3,241,145)

Deferred tax assets, net is composed of the following:

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Deferred tax assets:
Allowance for credit losses	¥	1,019,592	¥	1,285,544	$	181,065
Impairment for inventory		90,322		35,646		5,021
Net operating loss carryforwards		23,290,731		24,263,351		3,417,422
Subtotal		24,400,645		25,584,541		3,603,507
Less: Valuation allowance		(24,107,246)		(25,304,762)		(3,564,101)
Total deferred tax assets, net	¥	293,399	¥	279,779	$	39,406
Deferred tax liabilities:
Accelerated amortization of intangible assets		(146,511)		(132,891)		(18,717)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,689)
Recognition of customer relationship arising from business combinations		—		—		—
Total deferred tax liabilities		(293,399)		(279,779)		(39,406)
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, 2023, the cumulative NOL was approximately ¥133.6 million. During the six months ended December 31, 2023, the Company’s subsidiaries, VIEs and VIEs’ subsidiaries incurred an additional NOL carryforwards of approximately ¥4.2 million ($0.6 million). As of December 31, 2023, there are $13.2 million ($1.9 million) of the cumulative NOL that have expired, resulting in a cumulative NOL carryforwards of approximately ¥124.6 million ($17.6 million) as of December 31, 2023.

The NOL will expire over the next five years as follows:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	10,484,902	$	1,476,768
2025		19,617,124		2,763,014
2026		32,533,742		4,582,282
2027		27,137,905		3,822,294
2028		34,868,363		4,911,106
Total	¥	124,642,036	$	17,555,464

The Company’s income tax expense (benefit) is comprised of the following:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Current income tax provision	¥	9,180	¥	96,041	$	13,527
Deferred income tax provision		—		—		—
Expense for income tax	¥	9,180	¥	96,041	$	13,527

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NON-CONTROLLING INTEREST

6 Months Ended

Dec. 31, 2023

NON-CONTROLLING INTEREST.

NON-CONTROLLING INTEREST

NOTE 19. NON-CONTROLLING INTEREST

Non-controlling interest consisted of the following:

	As of June 30, 2023
			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	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

	As of December 31, 2023
			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	$	937,478
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,883,196)
Unappropriated retained earnings (deficit)		3,818,698		3,616,001		(6,982,801)		(1,569,913)		(2,037,170)		(3,155,185)		(444,398)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,324)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,900,069
Total non-controlling interests	¥	5,450,848	¥	3,804,148	¥	(2,177,801)	¥	(1,569,913)	¥	(16,117,170)	¥	(10,609,888)	$	(1,494,371)

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CONCENTRATIONS

6 Months Ended

Dec. 31, 2023

CONCENTRATIONS

CONCENTRATIONS

NOTE 20. CONCENTRATIONS

Credit risk

As of June 30, 2023 and December 31, 2023, approximately ¥45.5 million and ¥ 101.2 million ($14.3 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 ¥40.0 million and ¥96.8 million ($13.6 million) as of June 30, 2023 and December 31, 2023, respectively. As of June 30, 2023 and December 31, 2023, approximately ¥240.3 million and ¥154.6 million ($21.8 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 500,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to approximately ¥238.8 million and ¥152.9 million ($21.5 million) as of June 30, 2023 and December 31, 2023, respectively.

Customer concentration risk

For the six months ended December 31, 2022, CNPC represented 41%, SINOPEC represented 31%, and another customer represented 10% of the Company’s total revenue, respectively. At December 31, 2022, CNPC accounted for 43%, SINOPEC represented 18% and another customer accounted for 14% of the Company’s trade accounts receivable, net, respectively.

For the six months ended December 31, 2023, CNPC represented 56%, SINOPEC represented 19%, CNOOC represented 15%, and another customer represented 10% of the Company’s total revenue, respectively. At December 31, 2023, CNPC accounted for 34%, SINOPEC represented 14%, CNOOC represented 21%, and another customer accounted for 30% of the Company’s trade accounts receivable, net, respectively.

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COMMITMENTS AND CONTINGENCY

6 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCY

COMMITMENTS AND CONTINGENCY

NOTE 21. 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 December 31, 2023, the Company estimated its severance payments of approximately ¥7.9 million ($1.1 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

On December 1, 2021, Henan Puxinfangfu Construction Engineering Co., Ltd. (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Suzhou District, Jiuquan City, Gansu Province (the “Court”) against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. The Plaintiff also applied for property preservation before litigation to preserve the bank account of the Company. On December 1, 2021, the Court issued a judgement and approximately ¥0.7 million ($0.1 million) of Gan Su BHD’s bank balance was became restricted for one year. On April 7, 2022 and June 9, 2022, the Court issued first and second judgement which stated that the case to transfer to People’s Court of Yumen for jurisdiction. As of June 30, 2023, Gan Su BHD recorded ¥1.82 million (approximately $0.3 million) account payable due to the Plaintiff, and the compensation claimed by the Plaintiff was approximately ¥2.0 million (approximately $0.3 million). On January 9, 2023, the People’s Court of Yumen City, Gansu Province issued its civil judgement, pursuant to which the Company is required to pay the Plaintiff a settlement payment totaling approximately ¥1.8 million (approximately $0.3 million), including the money compensation and interests. As of December 31,2023, the Company has paid ¥855,197 (approximately $117,937) to the Plaintiff.

On April 30, 2023, Jiuquan Third Construction and Installation Engineering Company (“the Plaintiff”) submitted a Civil Complaint to the People’s Court of Yumen, Jiuquan City, Gansu Province against Gan Su BHD. The complaint requested that Gan Su BHD shall make the compensation to the Plaintiff for the outstanding trade payable plus the interest, and the litigation fee in this case shall be borne by Gan Su BHD. On August 25, 2023, the Company entered into a Settlement Agreement with the Plaintiff, pursuant to which the Company needs to pay the Plaintiff a total sum of ¥2.8 million (approximately $0.38 million) as settlement payment, including the money compensation and interests. Among which, ¥1.0 million (approximately $0.14 million) is required to be paid by September 25, 2023, ¥1.0 million (approximately $0.14 million) is required to be paid by October 25, 2023, and the remaining balance is required to be paid by November 25, 2023. As of December 31,2023, the Company has paid ¥1.3 million (approximately $0.18 million) to the Plaintiff.

(b)   Purchase commitment

The total future minimum purchase commitment under the non-cancellable purchase contracts as of December 31, 2023 are payable as follows:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	23,357,995	$	3,289,905
2025		300,000		42,254
Total minimum payments required	¥	23,657,995	$	3,332,159

(c) Office Leases Commitment - short term

The Company entered into several non-cancellable operating lease agreements for office spaces. Future payments under such leases were included in lease liabilities as disclosed in Note 10, other than those within under lease agreements within one year which are disclosed as follows as of December 31, 2023:

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	692,500	$	97,537
Total	¥	692,500	$	97,537

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RELATED PARTY TRANSACTIONS AND BALANCES

6 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

RELATED PARTY TRANSACTIONS AND BALANCES

NOTE 22. 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 ¥94,167 ($13,263) with annual rental expense at ¥1.1 million ($0.16 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, 2022 - March 31, 2024	¥	40,000	$	5,634
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		31,667		4,460
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,169

As of June 30, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥335,976 ($46,333) and ¥335,976 ($46,333), respectively.

As of December 31, 2023, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥113,361 ($15,967) and ¥113,361 ($15,967), respectively.

Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 13).

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VARIABLE INTEREST ENTITIES

6 Months Ended

Dec. 31, 2023

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

NOTE 23. 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, 2023		December 31, 2023		December 31, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	37,661,118	¥	23,902,252	$	3,366,562
Restricted cash		731,545		3,904		550
Short-term investments		—		18,000,000		2,535,247
Notes receivable		3,742,390		12,532,717		1,765,196
Accounts receivable, net		27,453,415		30,813,885		4,340,045
Inventories, net		6,330,701		1,855,535		261,347
Other receivables, net		11,618,275		4,155,097		585,233
Loans to third parties		37,770,188		26,841,513		3,780,548
Purchase advances, net		1,592,761		1,996,413		281,189
Contract costs, net		49,572,685		32,373,824		4,559,758
Prepaid expenses		121,329		193,859		27,303
Operating lease right-of-use assets, net - current		—		879,288		123,845
Total current assets		176,594,407		153,548,287		21,626,823
Property and equipment, net		24,752,864		23,492,024		3,308,782
Long-term other receivables, net		3,640		—		—
Long-term loan to third parties		—		18,500,000		2,605,671
Operating lease right-of-use assets, net - non-current		2,654,900		1,219,978		171,830
Total Assets	¥	204,005,811	¥	196,760,289	$	27,713,106
LIABILITIES
Short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529
Accounts payable		10,791,721		12,062,861		1,699,018
Other payables		3,904,135		1,340,788		188,846
Other payable- related parties		1,356,915		2,162,184		304,537
Contract liabilities		2,748,361		4,888,749		688,566
Accrued payroll and employees’ welfare		1,048,061		1,077,495		151,762
Intercompany payables*		263,935,922		259,617,001		36,566,290
Taxes payable		1,163,237		1,265,868		178,294
Short-term borrowings - related parties		20,018,222		20,019,889		2,819,742
Operating lease liabilities - current		3,066,146		1,038,354		146,248
Total current liabilities		320,484,201		315,809,474		44,480,832
Operating lease liabilities - non-current		25,144		25,869		3,644
Total Liabilities	¥	320,509,345	¥	315,835,343	$	44,484,476

*Intercompany payables are eliminated upon consolidation.

The financial performance of VIEs and their subsidiaries reported in the unaudited condensed consolidated interim statement of operations and comprehensive income for the six months ended December 31, 2022 includes revenues of ¥45,559,591 ($6,604,466), operating expenses of ¥11,643,918 ($1,687,940), and net income of ¥2,974,474 ($431,189). The financial performance of VIEs and their subsidiaries reported in the unaudited condensed consolidated interim statement of operations and comprehensive income for the six months ended December 31, 2023 includes revenues of ¥45,256,672 ($6,374,269), operating expenses of ¥21,646,029 ($3,048,779), and net loss of ¥6,890,440 ($970,498).

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SEGMENT REPORTING

6 Months Ended

Dec. 31, 2023

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 24. 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 six months ended December 31, 2022 and 2023, respectively:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Automation product and software	¥	19,055,227	¥	17,552,892	$	2,472,273
Equipment, accessories and others		9,730,859		17,867,404		2,516,571
Oilfield environmental protection		12,789,684		8,053,696		1,134,339
Platform Outsourcing Services		3,983,821		1,782,680		251,085
Total revenue	¥	45,559,591	¥	45,256,672	$	6,374,268

	For the six months ended December 31, 2023
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672
Cost of revenue and related tax		14,040,976		12,778,042		6,020,271		311,641		33,150,930
Gross profit	¥	3,511,916	¥	5,089,362	¥	2,033,425	¥	1,471,039	¥	12,105,742
Depreciation and amortization	¥	253,397	¥	143,927	¥	1,029,646	¥	—	¥	1,426,970
Total capital expenditures	¥	83,253	¥	116,191	¥	—	¥	—	¥	199,444
Timing of revenue recognition
Goods transferred at a point in time	¥	14,368,994	¥	17,867,404	¥	8,053,696	¥	166,899	¥	40,456,993
Services rendered over time		3,183,898		—		—		1,615,781		4,799,679
Total revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672

	For the six months ended December 31, 2022
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591
Cost of revenue and related tax		14,955,185		6,254,015		9,988,100		1,230,472		32,427,772
Gross profit	¥	4,100,042	¥	3,476,844	¥	2,801,584	¥	2,753,349	¥	13,131,819
Depreciation and amortization	¥	524,970	¥	358,954	¥	1,038,342	¥	30,359	¥	1,952,625
Total capital expenditures	¥	2,303,311	¥	3,008	¥	—	¥	14,953	¥	2,321,272
Timing of revenue recognition
Goods transferred at a point in time	¥	19,055,227	¥	9,730,859	¥	10,282,687	¥	3,983,821	¥	43,052,594
Services rendered over time		—		—		2,506,997		—		2,506,997
Total revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Total assets:
Automation product and software	¥	167,009,315	¥	157,269,367	$	22,150,927
Equipment, accessories and others		170,809,759		158,131,921		22,272,414
Oilfield environmental protection		107,393,609		94,285,444		13,279,827
Platform outsourcing services		86,611,894		73,569,497		10,362,047
Total assets	¥	531,824,577	¥	483,256,229	$	68,065,215

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SUBSEQUENT EVENTS

6 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 25. SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on June 28, 2024, and the Company has evaluated subsequent events through this date.

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 at USD$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 22, 2024, Guangxi Recon Renewable Resources Technology Co., Ltd. (“Guangxi Recon”), 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 the report date.

On February 26, 2024, the Company granted 6,255,483 (347,527 shares post 2024 Reverse Split) restricted Class A Ordinary Shares and 12,900,000 restricted Class B 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 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 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 1,704,766 and 2,371,573 Class A Ordinary Shares were issued and outstanding as of December 31, 2022 and 2023, retrospectively and respectively. The Company had 80,000,000 authorized Class B Ordinary Shares, par value of $0.0001, of which 4,100,000 and 7,100,000 Class B Ordinary Shares were issued and outstanding as of December 31, 2022 and 2023, retrospectively and respectively.

On March 29, 2024, the company signed an office lease agreement with a lease term from May 1, 2024, to April 30, 2027, and an annual rent of 2.28 million.

On April 24, 2024, Bank of Kunlun Co., Ltd. Tuha Branch (the “Plaintiff”) submitted a civil complaint to the People's Court of Yizhou District, Hami City, Xinjiang Uygur Autonomous Region (the “Court"). The complaint requested: (1) Gan Su BHD to repay the principal and interest of the loan to the Plaintiff, (2) Gan Su BHD to pay the overdue interest to the Plaintiff; (3) Gan Su BHD to pay the attorney's fees to the Plaintiff; (4) Wang Ping, Beijing BHD, and Nanjing Recon to bear joint and several liabilities for the first four claims of the Plaintiff, (5) all costs of the case, including the acceptance fee, mailing fee, preservation fee, and preservation insurance fee, to be borne by the defendants. The Plaintiff also applied for pre-litigation property preservation. On April 24, 2024, the Court issued a ruling to seize and freeze the bank deposits of the respondents Gan Su BHD, Wang Ping, Beijing BHD, and Nanjing Recon, amounting to ¥848,935.63. On May 24, 2024, the Court made a first-instance judgment, ordering (1) Gan Su BHD to repay the Plaintiff the principal of the loan amounting to ¥818,730.95, (2) Gan Su BHD to pay the loan interest of ¥199.51 and the interest from April 1, 2024, until the actual repayment date (calculated based on the actual amount owed at an annual interest rate of 9%), (3) Gan Su BHD to bear the attorney's fees of ¥30,000, (4) Gan Su BHD to bear the preservation agency fee of ¥4,765, (5) Wang Ping, Beijing BHD and Nanjing Recon to bear joint and several liability guarantees for the above four judgment contents and the case acceptance fee.

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

6 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

NOTE 26. 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, 2023 and December 31, 2023, 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.

RECON TECHNOLOGY, LTD

PARENT COMPANY BALANCE SHEETS (UNAUDITED)

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
ASSETS
Cash	¥	236,146,589	¥	34,657,271	$	4,881,375
Short-term investments		—		115,950,650		16,331,307
Due from intercompany*		291,525,426		356,442,080		50,203,817
Other current assets		80,036,017		52,568,829		7,404,165
Total Current Assets		607,708,032		559,618,830		78,820,664
Investment in subsidiaries and VIEs		(122,920,490)		(122,676,150)		(17,278,574)
Total Assets	¥	484,787,542	¥	436,942,680	$	61,542,090
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		3,964,912		1,448,570		204,027
Warrant liability - current				8,519,880		1,200,000
Total Current Liabilities		3,964,912		9,968,450		1,404,027
Warrant liability - non-current		31,615,668		993,986		140,000
Total Liabilities	¥	35,580,580	¥	10,962,436	$	1,544,027
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371,573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively**		26,932		27,791		3,914
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 December 31, 2023, respectively**		4,693		4,693		661
Additional paid-in capital**		580,340,061		584,275,905		82,293,540
Accumulated deficit		(166,291,897)		(188,845,919)		(26,598,391)
Accumulated other comprehensive income		35,127,173		30,517,774		4,298,339
Total Shareholders’ Equity		449,206,962		425,980,244		59,998,063
Total Liabilities and Shareholders’ Equity	¥	484,787,542	¥	436,942,680	$	61,542,090

* 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.

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Revenues	¥	—	¥	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
General and administrative expenses		16,054,522		11,698,953		1,647,763
Provision for credit losses		—		—		—
Loss from operations	¥	(16,054,522)	¥	(11,698,953)	$	(1,647,763)
Gain (loss) in fair value changes of warrants liability		(20,097,665)		(1,941,195)		(273,412)
Other income (expenses)		3,716,168		(960,280)		(135,253)
Equity in earnings of subsidiaries, VIEs and VIEs’ subsidiaries		2,559,601		(7,954,486)		(1,120,366)
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,794)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS		​
Foreign currency translation adjustments related to investments in subsidiaries, VIEs and VIEs’ subsidiaries		9,663,701		(4,609,399)		(649,220)
Comprehensive loss attributable to the company	¥	(20,212,717)	¥	(27,164,313)	$	(3,826,014)

RECON TECHNOLOGY, LTD

PARENT COMPANY STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Cash flows from operating activities:
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,793)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Loss (gain) in fair value changes of warrants liability		20,097,665		10,461,075		1,473,412
Restricted shares issued for management and employees		1,796,417		2,866,560		403,747
Accrued interest income from loans to third parties		—		(3,088,457)		(435,000)
Accrued interest income from short-term investment		—		(2,352,250)		(331,307)
Restricted shares issued for services		4,304,857		1,070,144		150,727
Equity in earnings of subsidiaries and VIEs		(2,559,601)		7,954,486		1,120,366
Other current assets		(14,166,457)		7,289,074		1,026,645
Other current liabilities		(1,080,736)		(2,516,342)		(354,421)
Net cash used in operating activities		(21,484,273)		(870,624)		(122,624)
Cash flows from investing activities:
Repayments from loans to third parties		20,694,900		24,849,650		3,500,000
Payments made for loans to third parties		(48,288,100)		—		—
Payments for short-term investments		—		(113,598,400)		(16,000,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(80,522,546)		(64,916,652)		(9,143,319)
Net cash used in investing activities		(108,115,746)		(153,665,402)		(21,643,319)
Net cash used in financing activity:
Redemption of warrants		—		(31,866,604)		(4,488,317)
Net cash provided by financing activity		—		(31,866,604)		(4,488,317)
Effect of exchange rate fluctuation on cash		16,278,998		(15,086,688)		(2,124,916)
Net decrease in cash		(113,321,021)		(201,489,318)		(28,379,176)
CASH, beginning of period		296,838,959		236,146,589		33,260,551
CASH, end of period	¥	183,517,938	¥	34,657,271	$	4,881,375

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

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.

Variable Interest Entities

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

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 six months ended December 31, 2023 have been translated into US dollars solely for the convenience of the readers. The translation has been made at the rate of ¥7.0999 = US$1.00, the approximate exchange rate prevailing on December 31, 2023. 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

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. 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

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 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.

Cash

Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.

Short-term investments

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, 2023 and December 31, 2023, the Company had short-term investments balance of ¥184.2 million and ¥134.0 million ($18.9 million), including accrued interests of ¥2.9 million and ¥2.4 million ($331,307), respectively.

Accounts Receivables, Net, Other Receivables, Net and Loan to Third Parties

Accounts Receivables, Net, Other Receivables, Net and Loan 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 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 net recovery of provision for credit loss for the six months ended December 31, 2023 decreased by approximately ¥3.1 million ($0.4 million) from the six months ended December 31, 2022.

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.

Notes Receivable

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, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.

Inventories, Net

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.

Property and Equipment, Net

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 ten 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
Production equipment, including:
Equipment	10 years
Utilities and Facilities	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.

Goodwill

Goodwill - Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation

techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves qualitative assessment, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. Step 1 of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the Step 2 must be performed to measure the amount of the impairment loss, if any. The Company has adopted Accounting Standards Updates (“ASU”) 2017-04, simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amounts in excess of the fair value of the reporting unit as the reduction in goodwill. ASU 2017-04 eliminates the requirement in previous GAAP to perform Step 2 of the goodwill impairment test. The Company considers various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of the Company’s reporting units, the Company’s share price and the excess amount or “cushion” between the Company reporting unit’s fair value and carrying value as indicated on the Company’s most recent quantitative assessment.

Intangible Assets, Net

Intangible Assets, Net – Intangible assets is composed of customer relationship, which is measured at fair value on initial recognition. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. The Company considers the events or changes in circumstances that may indicate the impairment of the Company’s long-lived assets, such as a significant decrease occurs in the market price of a long-lived asset (or asset group); a significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group); and a current expectation that, more likely than not, a long-lived asset (or asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company concluded that there was no impairment for the long-lived assets for the six months ended December 31, 2022 and 2023 respectively. As of December 31, 2023, all Long-Lived Assets were fully impaired.

Long-term Investments

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.

- 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.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company recorded no impairment loss on its equity method investment during the six months ended December 31, 2022 and 2023. The Company recorded no investment income on its equity method investment in unconsolidated entities during the six months ended December 31, 2022 and 2023, respectively.

Business Combinations

Business Combinations - The Company accounts for its business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations”. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operation and comprehensive income (loss).

In a business combination considered as a step acquisition, the Company remeasures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operation and comprehensive income (loss).

Non-controlling Interests

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

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.

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 six months ended December 31, 2022 and 2023 is disclosed in Note 24.

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.

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, maintenance, and operation services to gas stations around different provinces in China to complete online transactions; and API (application programming interface) port export service and related maintain services to business cooperators of different industries that may have transactions in the refueling scenario during the service contract period. The Company considered these performance obligations to be indistinguishable contractual performance obligations. As the Company has no right to get the compensation for any performances completed while not accepted by its customers, the Company can only recognize revenue at a point in time, which is when the online transaction is completed. The Company’s services enable terminal users of different mobile apps run by its clients or cooperators to complete refueling in cash or online through different payment channels, when each transaction, including refueling and payment, is completed, the Company is entitled to charge with pre-settled rates of each transaction amount as service fee and recognize the underlying amount as revenue. Related fees are generally billed monthly, based 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,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951
Contract liabilities	¥	2,748,365	¥	4,888,749	$	688,566

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.

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 December 31, 2023. The amount of revenue recognized during the six months ended December 31, 2022 and 2023 that was previously included within contract liability balances was ¥1,901,277, and ¥1,689,759 ($237,998), respectively.

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.

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 2023, the Company did calculation and the amount was not material as end of December 31, 2023.

Share-Based Compensation

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 Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.

Shipping and Handling Costs

Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥101,550 and ¥342,878 ($48,293) for the six months ended December 31, 2022 and 2023, respectively.

Leases

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. There was ¥834,975 ($117,604) and ¥834,975 impairment for ROU lease assets as of December 31, 2023 and June 30, 2023.

Income Taxes

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 December 31, 2023 and June 30, 2023.

As of December 31, 2023, the tax years ended December 31, 2018 through December 31, 2023 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) - 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 - 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).

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 stock 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 (loss) per share for the six months ended December 31, 2022 and 2023:

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Numerator:
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	$	(3,176,668)
Denominator:				​		​
Weighted-average number of ordinary shares outstanding – basic*		1,932,544		2,728,056		2,728,056
Class A Ordinary Shares*		1,704,766		2,333,612		2,333,612
Class B Ordinary Shares (used for EPS calculation) **		227,778		394,444		394,444
Potentially dilutive shares from outstanding options/warrants/convertible notes		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		1,932,544		2,728,056		2,728,056
Earnings (loss) per share – basic*	¥	(15.46)	¥	(8.27)	$	(1.16)
Earnings (loss) per share – diluted*	¥	(15.46)	¥	(8.27)	$	(1.16)

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

** The weighted average number of Class B Ordinary Shares outstanding and number used for EPS calculation has been retrospectively adjusted and converted by a ratio of 1/18 to reflect the actual dividend rate of Class B Ordinary Share after the 2024 Reverse Split.

Warrants

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.

The estimated liabilities accrued by the company for potential future substantial transaction compensation under the Warrant Purchase Agreement are classified and displayed as "warrants liability" in the financial statements.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures.” This ASU expands required public entities’ segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its condensed consolidated financial statement presentation or disclosures.

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.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful life of the assets

Items	Useful life
Motor vehicles	3-5 years
Office equipment and fixtures	2-5 years
Production equipment, including:
Equipment	10 years
Utilities and Facilities	20 years
Leasehold improvement	Lesser of useful life and lease term

Schedule of information about contract costs, net and contract liabilities from contracts with customers

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951
Contract liabilities	¥	2,748,365	¥	4,888,749	$	688,566

Schedule of basic and diluted earnings (loss) per share

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Numerator:
Net loss attributable to Recon Technology, Ltd	¥	(29,876,418)	¥	(22,554,022)	$	(3,176,668)
Denominator:				​		​
Weighted-average number of ordinary shares outstanding – basic*		1,932,544		2,728,056		2,728,056
Class A Ordinary Shares*		1,704,766		2,333,612		2,333,612
Class B Ordinary Shares (used for EPS calculation) **		227,778		394,444		394,444
Potentially dilutive shares from outstanding options/warrants/convertible notes		—		—		—
Weighted-average number of ordinary shares outstanding – diluted*		1,932,544		2,728,056		2,728,056
Earnings (loss) per share – basic*	¥	(15.46)	¥	(8.27)	$	(1.16)
Earnings (loss) per share – diluted*	¥	(15.46)	¥	(8.27)	$	(1.16)

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

** The weighted average number of Class B Ordinary Shares outstanding and number used for EPS calculation has been retrospectively adjusted and converted by a ratio of 1/18 to reflect the actual dividend rate of Class B Ordinary Share after the 2024 Reverse Split.

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ACCOUNTS RECEIVABLE, NET (Tables)

6 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

Schedule of accounts receivable, net

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	27,606,257	¥	31,553,107	$	4,444,162
Allowance for credit losses		(152,842)		(739,222)		(104,117)
Total third-parties, net	¥	27,453,415	¥	30,813,885	$	4,340,045

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties- long-term	RMB		(Unaudited)		(Unaudited)
Trade accounts receivable	¥	842,607	¥	1,307,791	$	184,199
Allowance for credit losses		(842,607)		(1,307,791)		(184,199)
Total third-parties, net	¥	—	¥	—	$	—

Schedule of movement of allowance for doubtful accounts

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	9,612,470	¥	995,449	$	140,206
Charge to (reversal of) credit losses		(8,767,356)		1,051,564		148,110
Foreign currency translation adjustments		150,335		—		—
Ending balance	¥	995,449	¥	2,047,013	$	288,316

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OTHER RECEIVABLES, NET (Tables)

6 Months Ended

Dec. 31, 2023

OTHER RECEIVABLES, NET

Schedule of other receivables, net

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Business advances to officers and staffs (A)	¥	854,162	¥	1,849,761	$	260,533
Deposits for projects		1,247,992		1,224,966		172,533
VAT recoverable		690,053		577,545		81,346
Others		1,392,126		1,134,950		159,854
Allowance for credit losses		(1,994,960)		(602,444)		(84,852)
Subtotal		2,189,373		4,184,778		589,414
Less: Long term portion (B)		(3,640)		—		—
Other receivable - current portion	¥	2,185,733	¥	4,184,778	$	589,414

(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.

(B) Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.

Schedule of movement of allowance for credit losses

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	619,444	¥	1,994,960	$	280,984
Charge to (reversal of) allowance		1,375,516		(1,392,516)		(196,132)
Less: written off		—		—		—
Ending balance	¥	1,994,960	¥	602,444	$	84,852

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LOANS TO THIRD PARTIES (Tables)

6 Months Ended

Dec. 31, 2023

LOANS TO THIRD PARTIES

Schedule of loans to third parties

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Working fund to third party companies	¥	123,055,874	¥	97,874,144	$	13,785,285
Less: Long term portion		—		(18,500,000)		(2,605,671)
Loans to third parties	¥	123,055,874	¥	79,374,144	$	11,179,614

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CONTRACT COSTS, NET (Tables)

6 Months Ended

Dec. 31, 2023

CONTRACT COSTS, NET

Schedule of contract costs, net

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Party	RMB		(Unaudited)		(Unaudited)
Contract costs	¥	52,158,840	¥	41,886,747	$	5,899,625
Allowance for credit losses		(2,586,155)		(4,562,923)		(642,674)
Total contract costs, net	¥	49,572,685	¥	37,323,824	$	5,256,951

Schedule of movement of allowance for credit losses of contract costs

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Beginning balance	¥	4,063,482	¥	2,586,155	$	364,252
Reversal of allowance		(1,720,095)		1,939,135		273,122
Charge to cost of sales		242,768		37,633		5,300
Ending balance	¥	2,586,155	¥	4,562,923	$	642,674

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PROPERTY AND EQUIPMENT, NET (Tables)

6 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Motor vehicles	¥	5,176,175	¥	3,699,101	$	521,007
Office equipment and fixtures		1,440,819		1,401,599		197,411
Production equipment		31,115,843		31,231,574		4,398,875
Leasehold improvement		2,260,000		2,260,000		318,314
Total cost		39,992,837		38,592,274		5,435,608
Less: accumulated depreciation		(14,297,511)		(14,157,788)		(1,994,083)
Less: accumulated impairment		(942,462)		(942,462)		(132,743)
Property and equipment, net	¥	24,752,864	¥	23,492,024	$	3,308,782

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY (Tables)

6 Months Ended

Dec. 31, 2023

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

Summary of fair values of the identifiable assets and liabilities

	RMB		US Dollars
Cash	¥	471,843	$	66,458
Accounts receivable, net		831,049		117,051
Other receivables, net		144,285		20,322
Contract costs, net		75,250		10,599
Prepaid expenses		91,132		12,836
Property and equipment, net		118,130		16,638
Intercompany receivables*		6,850,000		964,802
Intangible assets- customer relationship		7,000,000		985,929
Goodwill		6,996,895		985,492
Accounts payable		(1,032,078)		(145,365)
Other payables		(1,273,182)		(179,324)
Other payable- related parties		(479,959)		(67,601)
Deferred revenue		(39,786)		(5,604)
Accrued payroll and employees’ welfare		(1,629,519)		(229,513)
Taxes payable		(64,253)		(9,050)
Deferred tax liability		(1,050,000)		(147,889)
Total	¥	17,009,807	$	2,395,781
Cash considerations		—		—
Deemed equity consideration to acquire 8% equity interest in FGS		1,689,807		238,004
Fair value of previously held equity interest		30,530,000		4,300,061
Non-controlling interest		34,790,000		4,900,069
Capital contribution receivable due from non-controlling Interest		(50,000,000)		(7,042,353)
Total	¥	17,009,807	$	2,395,781

*Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

Summary of fair value of goodwill acquired and the carrying value, customer relationship, and its estimated useful lives

The identifiable goodwill acquired and the carrying value as of December 31, 2023 is as follows:

	Fair Value
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Goodwill	¥	6,996,895	$	985,492
Less: impairment		(6,996,895)		(985,492)
The carrying value of goodwill as of December 31, 2023	¥	—	$	—

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives as of December 31, 2023 is as follows:

					Average
					Useful Life
	Fair Value				(in Years)
	RMB		US Dollars
	(Unaudited)		(Unaudited)
Intangible assets - customer relationship	¥	7,000,000	$	985,929	10
Less: accumulated amortization		(1,750,000)		(246,482)
Less: impairment		(5,250,000)		(739,447)
Intangible assets - customer relationship, net	¥	—	$	—

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LEASES (Tables)

6 Months Ended

Dec. 31, 2023

LEASES

Schedule of operating lease related assets and liabilities recorded on the balance sheets

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Rights of use lease assets - current	¥	—	¥	1,714,263	$	241,449
Less: impairment		—		(834,975)		(117,604)
Rights of use lease assets, net - current		—		879,288		123,845
Rights of use lease assets - non - current		3,489,875		16,204,906		2,282,413
Less: impairment		(834,975)		—		—
Rights of use lease assets, net - non - current		2,654,900		16,204,906		2,282,413
Operating lease liabilities – current	¥	3,066,146	¥	722,857	$	101,812
Operating lease liabilities – non-current		25,144		341,366		48,080
Total operating lease liabilities	¥	3,091,290	¥	1,064,223	$	149,892

Schedule of weighted average remaining lease terms and discount rates for all of operating leases

	June 30,		December 31,
	2023		2023
			RMB
	RMB		(Unaudited)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	23.90		23.50
Weighted average discount rate	5.0	%	5.0	%

Schedule of maturities of lease liabilities

	RMB		US Dollars
Twelve months ending June 30,	(Unaudited)		(Unaudited)
2024	¥	1,045,399	$	147,241
2025		26,400		3,718
Total lease payments		1,071,799		150,959
Less: imputed interest		(7,576)		(1,067)
Present value of lease liabilities		1,064,223		149,892
Less: operating lease liabilities – current		722,857		101,812
Operating lease liabilities – non-current	¥	341,366	$	48,080

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OTHER PAYABLES (Tables)

6 Months Ended

Dec. 31, 2023

OTHER PAYABLES

Schedule of other payables third parties

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Third Parties	RMB		(Unaudited)		(Unaudited)
Professional service fees	¥	2,246,101	¥	304,474	$	42,884
Distributors and employees		3,073,289		712,173		100,307
Accrued expenses		200,218		193,274		27,222
Others		299,402		478,245		67,360
Total	¥	5,819,010	¥	1,688,166	$	237,773

Schedule Of other payables related party

	June 30,		December 31,		December 31,
	2022		2023		2023
			RMB		US Dollars
Related Parties	RMB		(Unaudited)		(Unaudited)
Expenses paid by the major shareholders	¥	1,796,309	¥	1,663,858	$	234,350
Due to family members of the owners of BHD and FGS		545,159		545,159		76,784
Due to management staff for costs incurred on behalf of the Company		250,927		—		—
Total	¥	2,592,395	¥	2,209,017	$	311,134

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TAXES PAYABLE (Tables)

6 Months Ended

Dec. 31, 2023

TAXES PAYABLE

Schedule of taxes payable

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
VAT payable	¥	699,601	¥	720,872	$	101,533
Income tax payable		440,030		536,071		75,504
Other taxes payable		23,375		445,955		62,811
Total taxes payable	¥	1,163,006	¥	1,702,898	$	239,848

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BANK LOANS (Tables)

6 Months Ended

Dec. 31, 2023

BANK LOANS

Schedule of short-term bank loans

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Bank of Kunlun (1)	¥	950,000	¥	827,000	$	116,481
Industry and Commercial Bank of China (“ICBC”) (2)		10,000,000		10,007,639		1,409,546
China Construction Bank (3)		1,501,481		1,501,646		211,502
Total short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529

(1) On August 31, 2022, the Company entered into a loan agreement with Bank of Kunlun to borrow up to ¥2,900,000 ($408,456) 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. The Company made a withdrawal in an amount of ¥1,000,000 ($140,847) on August 31, 2022. During the year ended June 30, 2023, the Company repaid ¥50,000 ($7,042). During the six months ended December 31, 2023, the Company repaid ¥ 123,000 ($17,324). The loan is guaranteed by the non-controlling shareholder of Gan Su BHD. The Company 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). From December 31, 2024, to the date of this report, the Company repaid ¥8,269 ($1,165).

(2) On June 6, 2023, the Company entered into a revolving loan facility with ICBC to borrow up to ¥ 10,000,000 ($1,408,471) as working capital for one year, with a maturity date of June 7, 2024. The loan has a fixed interest rate of 2.5% per annum. The Company made the first withdrawal in an amount of ¥5,000,000 ($704,235) on June 9, 2023, with a maturity date of June 7, 2024. Company made the second withdrawal in an amount of ¥5,000,000 ($704,235) on June 13, 2023, with a maturity date of June 7, 2024. These loans are pledged by the self-owned housing property of one of the founders of the Company with carrying value of approximately ¥17.6 million (approximately $2.4 million) as collateral for these loans. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

(3) On August 31, 2022, the Company entered into a revolving loan facility with China Construction Bank to borrow up to ¥1,500,000 ($211,271) as working capital for twelve months, with a maturity date of June 9, 2024. The loan has a fixed interest rate of 3.95% per annum. The loan is guaranteed by the non-controlling shareholder of FGS. As the date of this report, the Company has fully repaid the principal of the loan and the interest payable.

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES (Tables)

6 Months Ended

Dec. 31, 2023

SHORT-TERM BORROWINGS DUE TO RELATED PARTIES

Schedule of short-term borrowings due to related parties

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
Short-term borrowings due to related parties:	RMB		(Unaudited)		(Unaudited)
Short-term borrowing from a Founder, 3.65% annual interest, due on December 26, 2023	¥	10,004,055	¥	—	$	—
Short-term borrowing from a Founder, 3.40% annual interest, due on June 4, 2024*		4,993,950		4,994,892		703,516
Short-term borrowing from a Founder, 3.40% annual interest, due on June 16, 2024*		5,020,217		5,021,164		707,216
Short-term borrowing from a Founder, 3.45% annual interest, due on December 28, 2024		—		10,003,833		1,409,010
Total short-term borrowings due to related parties	¥	20,018,222	¥	20,019,889	$	2,819,742

*On May 29, 2024, the Company entered into a three-year supplemental agreement with the founder, changing the term of the loan from May 29, 2024 to April 29, 2027 and the annual interest rate to 3.75%.

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CLASS A ORDINARY SHARES (Tables)

6 Months Ended

Dec. 31, 2023

CLASS A ORDINARY SHARES

Summary of pre-funded warrants activities

		Weighted		Average
		Average		Remaining
	Pre-Funded	Exercise Price		Period
Pre-Funded Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	—	$	—	—
Issued	65,278		0.18	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	65,278	$	0.18	5.22
Issued	—		—	—
Forfeited	—		—	—
Exercised	(65,278)		0.18	—
Expired	—		—	—
Outstanding as of December 31, 2023	—	$	—	—

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

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS (Tables)

6 Months Ended

Dec. 31, 2023

ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS

Summary of fair value measurement inputs under binomial and black-scholes model

	December 31,			June 30,
Input	2023			2023
Number of warrants*		47,963			47,963		441,710
Share price*	$	0.23		$	0.34		0.34
Risk-free interest rate		4.02	%		4.41	%	4.41	%
Volatility		119	%		127	%	127	%
Exercise price*	$	112.32		$	112.32		14.40
Warrant life		2.96 years			3.47 years		3.47 years

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

	December 31,			June 30,
Input	2023			2023
Number of warrants*		—			555,694
Share price*	$	—		$	0.34
Risk-free interest rate		—	%		3.59	%
Volatility		—	%		110	%
Exercise price*	$	—		$	14.40
Warrant life		—			5.22 years

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

Summary of liabilities measured at fair value on recurring basis

			Quoted Prices In		Significant Other		Significant Other
	June 30,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	4,360,000	$	—	$	—	$	4,360,000

			Quoted Prices In		Significant Other		Significant Other
	December 31,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liability - non-current	$	140,000	$	—	$	—	$	140,000

Summary of company warrants activities and status of warrants

		Weighted		Average
		Average		Remaining
		Exercise Price		Period
Warrants	Warrants*	Per Share*		(Years)
Outstanding as of June 30, 2022	489,673	$	112.32	4.46
Issued	555,694		14.40	5.50
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of June 30, 2023	1,045,367	$	18.90	4.40
Issued	—		—	—
Redeemed	(997,404)		14.40	—
Forfeited	—		—	—
Exercised	—		—	—
Expired	—		—	—
Outstanding as of December 31, 2023	47,963	$	112.32	2.96

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

Schedule of estimated liability

		December 31,
Description		2023
Warrant liability -current *	$	1,200,000

* On December 14, 2023, company bought back an aggregate of 17,953,269 (997,404 warrants post 2024 Reverse Split) warrants from the Sellers. Warrant Purchase Agreement stipulated that “The Company has agreed that if the Company repurchases any other warrants prior to June 14, 2024 at a higher purchase price per Warrant than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the purchase prices per Warrant. Similarly, if the Company enters into or announces any Fundamental Transactions as defined in the Warrants, and the Black-Scholes Value is a purchase price per Warrant that is higher than the purchase price per Warrant stated in the Warrant Purchase Agreement, then the Company shall pay Sellers the difference between the Black-Scholes Value purchase price per Warrant and the stated purchase price per Warrant in the Warrant Purchase Agreement”. The Company accrued an estimated liability of $1,200,000 based on the potential for future significant transaction compensation in contracts to repurchase investor warrants during the six months ended December 31, 2023.

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Dec. 31, 2023

SHARE-BASED COMPENSATION

Summary of share options activity

		Weighted
		Average
		Exercise Price
Share Options	Shares*	Per Share*
Outstanding as of June 30, 2022	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of June 30, 2023	4,444	$	148.50
Granted	—		—
Forfeited	—		—
Exercised	—		—
Expired	—		—
Outstanding as of December 31, 2023	4,444	$	148.50

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

Summary of status of options outstanding and exercisable

The following is a summary of the status of options outstanding and exercisable as of December 31, 2023:

Outstanding Options				Exercisable Options
			Average				Average
			Remaining				Remaining
Average Exercise			Contractual	Average Exercise			Contractual
Price*		Number*	life (Years)	Price*		Number*	life (Years)
$	148.50	4,444	1.08	$	148.50	4,444	1.08
		4,444				4,444

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

Summary of restricted shares granted

Restricted share grants	Shares*
Non-vested as of June 30, 2022	120,407
Granted	277,778
Vested	(226,247)
Non-vested as of June 30, 2023	171,938
Granted	—
Vested	(111,111)
Non-vested as of December 31, 2023	60,827

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

Summary of outstanding restricted shares

Outstanding Restricted Shares
			Average
			Remaining
Fair Value per			Amortization
Share*		Number*	Period (Years)
$	18.72	60,827	1.16
		60,827

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

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INCOME TAX (Tables)

6 Months Ended

Dec. 31, 2023

INCOME TAX

Schedule of income (loss) before provision for income taxes

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Outside China areas	¥	(32,395,145)	¥	(14,621,317)	$	(2,059,369)
China		2,531,634		(8,390,493)		(1,181,776)
Total	¥	(29,863,511)	¥	(23,011,810)	$	(3,241,145)

Schedule of deferred tax assets, net

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Deferred tax assets:
Allowance for credit losses	¥	1,019,592	¥	1,285,544	$	181,065
Impairment for inventory		90,322		35,646		5,021
Net operating loss carryforwards		23,290,731		24,263,351		3,417,422
Subtotal		24,400,645		25,584,541		3,603,507
Less: Valuation allowance		(24,107,246)		(25,304,762)		(3,564,101)
Total deferred tax assets, net	¥	293,399	¥	279,779	$	39,406
Deferred tax liabilities:
Accelerated amortization of intangible assets		(146,511)		(132,891)		(18,717)
Gain on the previously held equity method investment		(146,888)		(146,888)		(20,689)
Recognition of customer relationship arising from business combinations		—		—		—
Total deferred tax liabilities		(293,399)		(279,779)		(39,406)
Deferred tax assets, net	¥	—	¥	—	$	—

Schedule of NOL expiration

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	10,484,902	$	1,476,768
2025		19,617,124		2,763,014
2026		32,533,742		4,582,282
2027		27,137,905		3,822,294
2028		34,868,363		4,911,106
Total	¥	124,642,036	$	17,555,464

Schedule of company's income tax expense (benefit)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Current income tax provision	¥	9,180	¥	96,041	$	13,527
Deferred income tax provision		—		—		—
Expense for income tax	¥	9,180	¥	96,041	$	13,527

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NON-CONTROLLING INTEREST (Tables)

6 Months Ended

Dec. 31, 2023

NON-CONTROLLING INTEREST.

Schedule of non-controlling interest

	As of June 30, 2023
			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	$	917,904
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,739,481)
Unappropriated retained earnings (deficit)		3,477,494		3,616,001		(6,336,893)		(1,561,196)		(1,796,762)		(2,601,356)		(358,742)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,234)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,797,760
Total non-controlling interests	¥	5,109,644	¥	3,804,148	¥	(1,531,893)	¥	(1,561,196)		(15,876,762)	¥	(10,056,059)	$	(1,386,793)

	As of December 31, 2023
			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	$	937,478
Capital contribution receivable due from non-controlling Interest		—		—		—		—		(48,870,000)		(48,870,000)		(6,883,196)
Unappropriated retained earnings (deficit)		3,818,698		3,616,001		(6,982,801)		(1,569,913)		(2,037,170)		(3,155,185)		(444,398)
Accumulated other comprehensive loss		(18,850)		(11,853)		—		—		—		(30,703)		(4,324)
Valuation increase shared by minority shareholders		—		—		—		—		34,790,000		34,790,000		4,900,069
Total non-controlling interests	¥	5,450,848	¥	3,804,148	¥	(2,177,801)	¥	(1,569,913)	¥	(16,117,170)	¥	(10,609,888)	$	(1,494,371)

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COMMITMENTS AND CONTINGENCY (Tables)

6 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCY

Schedule of total future minimum purchase commitment

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	23,357,995	$	3,289,905
2025		300,000		42,254
Total minimum payments required	¥	23,657,995	$	3,332,159

Schedule of non-cancellable operating lease agreements

	RMB		US Dollars
Twelve months ending December 31,	(Unaudited)		(Unaudited)
2024	¥	692,500	$	97,537
Total	¥	692,500	$	97,537

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RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

6 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

Schedule of leases from related parties

			Monthly Rent		Monthly Rent
Lessee	Lessor	Rent Period	RMB		US Dollars
Nanjing Recon	One of the founders	April 1, 2022 - March 31, 2024	¥	40,000	$	5,634
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		31,667		4,460
BHD	One of the founders	January 1, 2023 - Dec 31, 2023		22,500		3,169

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VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Dec. 31, 2023

VARIABLE INTEREST ENTITIES

Summary of information regarding consolidated VIEs

	June 30, 2023		December 31, 2023		December 31, 2023
	RMB		RMB		US Dollars
ASSETS
Current Assets
Cash	¥	37,661,118	¥	23,902,252	$	3,366,562
Restricted cash		731,545		3,904		550
Short-term investments		—		18,000,000		2,535,247
Notes receivable		3,742,390		12,532,717		1,765,196
Accounts receivable, net		27,453,415		30,813,885		4,340,045
Inventories, net		6,330,701		1,855,535		261,347
Other receivables, net		11,618,275		4,155,097		585,233
Loans to third parties		37,770,188		26,841,513		3,780,548
Purchase advances, net		1,592,761		1,996,413		281,189
Contract costs, net		49,572,685		32,373,824		4,559,758
Prepaid expenses		121,329		193,859		27,303
Operating lease right-of-use assets, net - current		—		879,288		123,845
Total current assets		176,594,407		153,548,287		21,626,823
Property and equipment, net		24,752,864		23,492,024		3,308,782
Long-term other receivables, net		3,640		—		—
Long-term loan to third parties		—		18,500,000		2,605,671
Operating lease right-of-use assets, net - non-current		2,654,900		1,219,978		171,830
Total Assets	¥	204,005,811	¥	196,760,289	$	27,713,106
LIABILITIES
Short-term bank loans	¥	12,451,481	¥	12,336,285	$	1,737,529
Accounts payable		10,791,721		12,062,861		1,699,018
Other payables		3,904,135		1,340,788		188,846
Other payable- related parties		1,356,915		2,162,184		304,537
Contract liabilities		2,748,361		4,888,749		688,566
Accrued payroll and employees’ welfare		1,048,061		1,077,495		151,762
Intercompany payables*		263,935,922		259,617,001		36,566,290
Taxes payable		1,163,237		1,265,868		178,294
Short-term borrowings - related parties		20,018,222		20,019,889		2,819,742
Operating lease liabilities - current		3,066,146		1,038,354		146,248
Total current liabilities		320,484,201		315,809,474		44,480,832
Operating lease liabilities - non-current		25,144		25,869		3,644
Total Liabilities	¥	320,509,345	¥	315,835,343	$	44,484,476

*Intercompany payables are eliminated upon consolidation.

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SEGMENT REPORTING (Tables)

6 Months Ended

Dec. 31, 2023

SEGMENT REPORTING

Summary of segment reporting information

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		US Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Automation product and software	¥	19,055,227	¥	17,552,892	$	2,472,273
Equipment, accessories and others		9,730,859		17,867,404		2,516,571
Oilfield environmental protection		12,789,684		8,053,696		1,134,339
Platform Outsourcing Services		3,983,821		1,782,680		251,085
Total revenue	¥	45,559,591	¥	45,256,672	$	6,374,268

	For the six months ended December 31, 2023
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672
Cost of revenue and related tax		14,040,976		12,778,042		6,020,271		311,641		33,150,930
Gross profit	¥	3,511,916	¥	5,089,362	¥	2,033,425	¥	1,471,039	¥	12,105,742
Depreciation and amortization	¥	253,397	¥	143,927	¥	1,029,646	¥	—	¥	1,426,970
Total capital expenditures	¥	83,253	¥	116,191	¥	—	¥	—	¥	199,444
Timing of revenue recognition
Goods transferred at a point in time	¥	14,368,994	¥	17,867,404	¥	8,053,696	¥	166,899	¥	40,456,993
Services rendered over time		3,183,898		—		—		1,615,781		4,799,679
Total revenue	¥	17,552,892	¥	17,867,404	¥	8,053,696	¥	1,782,680	¥	45,256,672

	For the six months ended December 31, 2022
	Automation		Equipment,		Oilfield		Platform
	product and		accessories		environmental		outsourcing
	software		and others		protection		services		Total
	RMB		RMB		RMB		RMB		RMB
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591
Cost of revenue and related tax		14,955,185		6,254,015		9,988,100		1,230,472		32,427,772
Gross profit	¥	4,100,042	¥	3,476,844	¥	2,801,584	¥	2,753,349	¥	13,131,819
Depreciation and amortization	¥	524,970	¥	358,954	¥	1,038,342	¥	30,359	¥	1,952,625
Total capital expenditures	¥	2,303,311	¥	3,008	¥	—	¥	14,953	¥	2,321,272
Timing of revenue recognition
Goods transferred at a point in time	¥	19,055,227	¥	9,730,859	¥	10,282,687	¥	3,983,821	¥	43,052,594
Services rendered over time		—		—		2,506,997		—		2,506,997
Total revenue	¥	19,055,227	¥	9,730,859	¥	12,789,684	¥	3,983,821	¥	45,559,591

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
Total assets:
Automation product and software	¥	167,009,315	¥	157,269,367	$	22,150,927
Equipment, accessories and others		170,809,759		158,131,921		22,272,414
Oilfield environmental protection		107,393,609		94,285,444		13,279,827
Platform outsourcing services		86,611,894		73,569,497		10,362,047
Total assets	¥	531,824,577	¥	483,256,229	$	68,065,215

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables)

6 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Schedule of parent company balance sheets

	June 30,		December 31,		December 31,
	2023		2023		2023
			RMB		US Dollars
	RMB		(Unaudited)		(Unaudited)
ASSETS
Cash	¥	236,146,589	¥	34,657,271	$	4,881,375
Short-term investments		—		115,950,650		16,331,307
Due from intercompany*		291,525,426		356,442,080		50,203,817
Other current assets		80,036,017		52,568,829		7,404,165
Total Current Assets		607,708,032		559,618,830		78,820,664
Investment in subsidiaries and VIEs		(122,920,490)		(122,676,150)		(17,278,574)
Total Assets	¥	484,787,542	¥	436,942,680	$	61,542,090
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other current liabilities		3,964,912		1,448,570		204,027
Warrant liability - current				8,519,880		1,200,000
Total Current Liabilities		3,964,912		9,968,450		1,404,027
Warrant liability - non-current		31,615,668		993,986		140,000
Total Liabilities	¥	35,580,580	¥	10,962,436	$	1,544,027
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 2,306,295 shares and 2,371,573 shares issued and outstanding as of June 30, 2023 and December 31, 2023, respectively**		26,932		27,791		3,914
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 December 31, 2023, respectively**		4,693		4,693		661
Additional paid-in capital**		580,340,061		584,275,905		82,293,540
Accumulated deficit		(166,291,897)		(188,845,919)		(26,598,391)
Accumulated other comprehensive income		35,127,173		30,517,774		4,298,339
Total Shareholders’ Equity		449,206,962		425,980,244		59,998,063
Total Liabilities and Shareholders’ Equity	¥	484,787,542	¥	436,942,680	$	61,542,090

* 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.

Schedule of parent company statements of operations and comprehensive income (loss)

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Revenues	¥	—	¥	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
General and administrative expenses		16,054,522		11,698,953		1,647,763
Provision for credit losses		—		—		—
Loss from operations	¥	(16,054,522)	¥	(11,698,953)	$	(1,647,763)
Gain (loss) in fair value changes of warrants liability		(20,097,665)		(1,941,195)		(273,412)
Other income (expenses)		3,716,168		(960,280)		(135,253)
Equity in earnings of subsidiaries, VIEs and VIEs’ subsidiaries		2,559,601		(7,954,486)		(1,120,366)
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,794)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS		​
Foreign currency translation adjustments related to investments in subsidiaries, VIEs and VIEs’ subsidiaries		9,663,701		(4,609,399)		(649,220)
Comprehensive loss attributable to the company	¥	(20,212,717)	¥	(27,164,313)	$	(3,826,014)

Schedule of parent company statements of cash flows

	For the six months ended December 31,
	2022		2023		2023
	RMB		RMB		U.S. Dollars
	(Unaudited)		(Unaudited)		(Unaudited)
Cash flows from operating activities:
Net loss	¥	(29,876,418)	¥	(22,554,914)	$	(3,176,793)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Loss (gain) in fair value changes of warrants liability		20,097,665		10,461,075		1,473,412
Restricted shares issued for management and employees		1,796,417		2,866,560		403,747
Accrued interest income from loans to third parties		—		(3,088,457)		(435,000)
Accrued interest income from short-term investment		—		(2,352,250)		(331,307)
Restricted shares issued for services		4,304,857		1,070,144		150,727
Equity in earnings of subsidiaries and VIEs		(2,559,601)		7,954,486		1,120,366
Other current assets		(14,166,457)		7,289,074		1,026,645
Other current liabilities		(1,080,736)		(2,516,342)		(354,421)
Net cash used in operating activities		(21,484,273)		(870,624)		(122,624)
Cash flows from investing activities:
Repayments from loans to third parties		20,694,900		24,849,650		3,500,000
Payments made for loans to third parties		(48,288,100)		—		—
Payments for short-term investments		—		(113,598,400)		(16,000,000)
Due from intercompany, VIEs and VIEs’ subsidiaries		(80,522,546)		(64,916,652)		(9,143,319)
Net cash used in investing activities		(108,115,746)		(153,665,402)		(21,643,319)
Net cash used in financing activity:
Redemption of warrants		—		(31,866,604)		(4,488,317)
Net cash provided by financing activity		—		(31,866,604)		(4,488,317)
Effect of exchange rate fluctuation on cash		16,278,998		(15,086,688)		(2,124,916)
Net decrease in cash		(113,321,021)		(201,489,318)		(28,379,176)
CASH, beginning of period		296,838,959		236,146,589		33,260,551
CASH, end of period	¥	183,517,938	¥	34,657,271	$	4,881,375

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ORGANIZATION AND NATURE OF OPERATIONS (Details)					6 Months Ended
	May 19, 2021	Apr. 26, 2021	Oct. 23, 2018	Sep. 25, 2017	Dec. 31, 2023 CNY (¥)	Jun. 28, 2024 USD ($)	Feb. 22, 2024 USD ($)	Dec. 31, 2023 USD ($)	Oct. 10, 2023 USD ($)	Oct. 16, 2017 CNY (¥)	May 23, 2017 CNY (¥)
ORGANIZATION AND NATURE OF OPERATIONS
Variable interest entity, terms of arrangements					the Company has the right to absorb 90% of net interest or 100% of net loss of those Domestic Companies for accounting purposes
Individuals
ORGANIZATION AND NATURE OF OPERATIONS
Remaining paid in capital					¥ 12,500,000			$ 1,812,041
Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership percentage					49.00%			49.00%
Qing Hai BHD New Energy Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership percentage			10.00%
Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Paid in capital | ¥					¥ 200,000
Remaining paid in capital					33,300,000			$ 4,827,276
Gan Su BHD Environmental Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Capital | ¥											¥ 50,000,000.0
Paid in capital					¥ 27,495,000			$ 3,872,590
Gan Su BHD Environmental Technology Co., Ltd | Beijing Bhd Petroleum Technology Co Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Ownership interest held by parent					51.00%			51.00%
Percentage of equity interest transferred	3.60%	15.40%		2.00%
Gan Su BHD Environmental Technology Co., Ltd | Nanjing Recon
ORGANIZATION AND NATURE OF OPERATIONS
Percentage of equity interest transferred	15.40%
Ownership interest held by noncontrolling owner	19.00%
Gan Su BHD Environmental Technology Co., Ltd | Individuals
ORGANIZATION AND NATURE OF OPERATIONS
Ownership interest held by parent	51.00%
Qing Hai BHD New Energy Technology Co., Ltd
ORGANIZATION AND NATURE OF OPERATIONS
Capital | ¥										¥ 50,000,000.0
Paid in capital					¥ 4,200,000			$ 591,558
Equity interest of ownership percentage			55.00%		75.00%
Shandong Recon Renewable Resources Technology Co., Ltd | Recon-IN
ORGANIZATION AND NATURE OF OPERATIONS
Capital									$ 30,000,000.0
Paid in capital									$ 10,000,000.0
Guangxi Recon Renewable Resources Technology Co., Ltd | Recon-IN | Subsequent event
ORGANIZATION AND NATURE OF OPERATIONS
Capital							$ 30,000,000.0
Paid in capital						$ 1,000,000.0	$ 1,000,000.0

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ORGANIZATION AND NATURE OF OPERATIONS - Energy consumption market opened to private and foreign companies (Details) - Future Gas Station (Beijing) Technology, Ltd	Jan. 13, 2021 CNY (¥)	Jan. 13, 2021 USD ($)	Jun. 30, 2019 CNY (¥) shares	Aug. 21, 2018 CNY (¥) shares	Feb. 04, 2021	Dec. 15, 2017
ORGANIZATION AND NATURE OF OPERATIONS
Aggregate amount invested	¥ 30,530,000	$ 4,300,061
Domestic Companies
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired						8.00%
Ownership interest held					51.00%
Domestic Companies | Investment Agreement
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired			43.00%	43.00%
Investment in FGS agreed | ¥				¥ 10,000,000
Number of shares issued | shares			487,057	487,057
Aggregate amount invested | ¥			¥ 35,116,707
Domestic Companies | Investment Agreement | Post 2024 Reverse Stock Split
ORGANIZATION AND NATURE OF OPERATIONS
Number of shares issued | shares			27,059	27,059
Domestic Companies | Fourth supplemental agreement
ORGANIZATION AND NATURE OF OPERATIONS
Equity interest acquired				8.00%	8.00%

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SIGNIFICANT ACCOUNTING POLICIES (Details)		6 Months Ended			12 Months Ended
	Dec. 14, 2023 shares	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)
SIGNIFICANT ACCOUNTING POLICIES
Foreign currency transactions, description		The translation has been made at the rate of ¥7.0999 = US$1.00, the approximate exchange rate prevailing on December 31, 2023.	The translation has been made at the rate of ¥7.0999 = US$1.00, the approximate exchange rate prevailing on December 31, 2023.
Short-term investments		¥ 134,000,000.0			¥ 184,184,455	$ 18,866,554
Accrued interest income from short-term investment		2,400,000	$ 331,307		2,900,000
Allowance for credit losses		3,100,000				400,000
Contract assets and contract liabilities from contracts with customers
Contract costs		37,323,824			49,572,685	5,256,951
Contract liabilities		4,888,749			¥ 2,748,365	688,566
Shipping and handling expenses		4,547,115	640,448	¥ 4,021,899
Impairment loss | ¥		0		0
Accumulated impairment		834,975				117,604	$ 834,975
Revenue recognized		1,689,759	237,998	1,901,277
Number of warrants repurchased	17,953,269
Estimated warrant liability | $						$ 1,200,000
Post 2024 Reverse Stock Split
Contract assets and contract liabilities from contracts with customers
Number of warrants repurchased	997,404
Shipping and Handling
Contract assets and contract liabilities from contracts with customers
Shipping and handling expenses		¥ 342,878	$ 48,293	¥ 101,550
Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		2 years				2 years
Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		10 years				10 years
Motor vehicles | Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		3 years				3 years
Motor vehicles | Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		5 years				5 years
Office equipment and fixtures | Minimum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		2 years				2 years
Office equipment and fixtures | Maximum
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		5 years				5 years
Equipment
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		10 years				10 years
Utilities and Facilities
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment, useful life		20 years				20 years

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SIGNIFICANT ACCOUNTING POLICIES - Basic and diluted earnings (loss) per share (Details)				6 Months Ended
		May 01, 2024	Mar. 29, 2024	Dec. 31, 2023 CNY (¥) ¥ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares
Numerator:
Net loss attributable to Recon Technology, Ltd				¥ (22,554,022)	$ (3,176,668)	¥ (29,876,418)
Denominator:
Weighted-average number of ordinary shares outstanding - basic	[1]			2,728,056	2,728,056	1,932,544
Weighted-average number of ordinary shares outstanding - diluted				2,728,056	2,728,056	1,932,544
Earnings (loss) per share - basic | (per share)				¥ (8.27)	$ (1.16)	¥ (15.46)	[1]
Earnings (loss) per share - diluted | (per share)				¥ (8.27)	$ (1.16)	¥ (15.46)
Reverse stock split		0.056		0.2	0.2
Class A ordinary shares
Denominator:
Weighted-average number of ordinary shares outstanding - basic				2,333,612	2,333,612	1,704,766
Reverse stock split		0.056	0.056
Class B ordinary shares
Denominator:
Weighted-average number of ordinary shares outstanding - basic				394,444	394,444	227,778
Class B common stock convertible conversion ratio		0.056

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

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ACCOUNTS RECEIVABLE, NET - Accounts receivable (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Third Parties
Total third-parties, net	¥ 30,813,885	$ 4,340,045	¥ 27,453,415
Third parties
Third Parties
Trade Accounts receivable	31,553,107	4,444,162	27,606,257
Allowance for credit losses	(739,222)	(104,117)	(152,842)
Total third-parties, net	30,813,885	4,340,045	27,453,415
Third Parties- long-term
Trade Accounts receivable	1,307,791	184,199	842,607
Allowance for credit losses	(1,307,791)	(184,199)	(842,607)
Total third-parties, net	¥ 0	$ 0	¥ 0

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ACCOUNTS RECEIVABLE, NET - Movement of allowance for doubtful accounts (Details)	6 Months Ended		12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
ACCOUNTS RECEIVABLE, NET
Charge to (reversal of) allowance	¥ 1,051,564
Third parties
ACCOUNTS RECEIVABLE, NET
Ending balance	2,047,013	$ 288,316	¥ 995,449
Charge to (reversal of) allowance	1,051,564	148,110	(8,767,356)
Foreign currency translation adjustments	0	0	150,335
Beginning balance	¥ 995,449	$ 140,206	¥ 9,612,470

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ACCOUNTS RECEIVABLE, NET - Additional Information (Details) $ in Millions			6 Months Ended
	Jun. 28, 2024 CNY (¥)	Jun. 28, 2024 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)
ACCOUNTS RECEIVABLE, NET
Net recovery of provision for credit losses made for accounts receivable due from third parties				¥ 4,012,249
Provision for doubtful accounts of accounts receivable due from third parties			¥ 1,051,564
Percentage of not-collection from our customers	28.6	28.6
Amount of not-collection from our customers	¥ 8,800,000	$ 1.2

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NOTES RECEIVABLE (Details)	Jun. 28, 2024 CNY (¥)	Jun. 28, 2024 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
NOTES RECEIVABLE
Notes receivable			¥ 12,532,717	$ 1,765,196	¥ 3,742,390
Subsequent event
NOTES RECEIVABLE
Notes receivable	¥ 12,500,000	$ 1,800,000
Percentage of notes subsequently collected	100.0	100.0

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OTHER RECEIVABLES, NET - Summary of Other receivables, net (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
Current Portion
Other receivable - current portion	¥ 4,184,778	$ 589,414	¥ 2,185,733
Third parties
Current Portion
Business advances to officers and staffs	1,849,761	260,533	854,162
Deposits for projects	1,224,966	172,533	1,247,992
VAT recoverable	577,545	81,346	690,053
Others	1,134,950	159,854	1,392,126
Allowance for credit losses	(602,444)	(84,852)	(1,994,960)	$ (280,984)	¥ (619,444)
Subtotal	4,184,778	589,414	2,189,373
Less: Long term portion			(3,640)
Other receivable - current portion	¥ 4,184,778	$ 589,414	¥ 2,185,733

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OTHER RECEIVABLES, NET - Summary of Movement of allowance for credit losses (Details)	6 Months Ended			12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)
OTHER RECEIVABLES, NET
Charge to (reversal of) allowance	¥ 1,392,516		¥ 549,132
Third parties
OTHER RECEIVABLES, NET
Beginning balance	1,994,960	$ 280,984	¥ 619,444	¥ 619,444
Charge to (reversal of) allowance	(1,392,516)			1,375,516	$ (196,132)
Ending balance	¥ 602,444	$ 84,852		¥ 1,994,960	$ 280,984

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OTHER RECEIVABLES, NET - Additional Information (Details) - CNY (¥)	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OTHER RECEIVABLES, NET
Net recovery of provision for credit losses of other receivables	¥ 1,392,516	¥ 549,132

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LOANS TO THIRD PARTIES (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
LOANS TO THIRD PARTIES
Working fund to third party companies	¥ 97,874,144	$ 13,785,285	¥ 123,055,874
Less: Long term portion	(18,500,000)	(2,605,671)
Loans to third parties	¥ 79,374,144	$ 11,179,614	¥ 123,055,874

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LOANS TO THIRD PARTIES - Additional Information (Details) ¥ in Millions, $ in Millions	Jun. 28, 2024 CNY (¥)	Jun. 28, 2024 USD ($)
LOANS TO THIRD PARTIES
Effective percentage	63.10%	63.10%
Proceeds from collection	¥ 61.8	$ 8.7

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CONTRACT COSTS, NET (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 CNY (¥)
CONTRACT COSTS, NET
Contract costs	¥ 41,886,747			$ 5,899,625	¥ 52,158,840
Allowance for credit losses	(4,562,923)			(642,674)	(2,586,155)	$ (364,252)	¥ (4,063,482)
Total contract costs, net	¥ 37,323,824			$ 5,256,951	¥ 49,572,685
Percentage of total contracts costs subsequently realized	18.50%			18.50%
Total contracts costs that have been subsequently realized	¥ 6,900,000			$ 1,000,000.0
Net recovery of provision for credit losses	¥ 1,939,135	$ 273,122	¥ 3,751,575

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CONTRACT COSTS, NET - Movement of impairment of contract costs (Details)	6 Months Ended		12 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
CONTRACT COSTS, NET
Beginning balance	¥ 2,586,155	$ 364,252	¥ 4,063,482
Reversal of allowance	1,939,135	273,122	(1,720,095)
Charge to cost of sales	37,633	5,300	242,768
Ending balance	¥ 4,562,923	$ 642,674	¥ 2,586,155

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PROPERTY AND EQUIPMENT, NET (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
PROPERTY AND EQUIPMENT, NET.
Total cost	¥ 38,592,274	$ 5,435,608	¥ 39,992,837
Less: accumulated depreciation	(14,157,788)	(1,994,083)	(14,297,511)
Less: accumulated impairment	(942,462)	(132,743)	(942,462)
Property and equipment, net	23,492,024	3,308,782	24,752,864
Motor vehicles
PROPERTY AND EQUIPMENT, NET.
Total cost	3,699,101	521,007	5,176,175
Office equipment and fixtures
PROPERTY AND EQUIPMENT, NET.
Total cost	1,401,599	197,411	1,440,819
Production equipment
PROPERTY AND EQUIPMENT, NET.
Total cost	31,231,574	4,398,875	31,115,843
Leasehold improvement
PROPERTY AND EQUIPMENT, NET.
Total cost	¥ 2,260,000	$ 318,314	¥ 2,260,000

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PROPERTY AND EQUIPMENT, NET - Additional Information (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
PROPERTY AND EQUIPMENT, NET
Depreciation expenses	¥ 1,426,971	$ 200,985	¥ 1,602,166
Loss from property and equipment disposal	¥ 32,252	$ 4,543	¥ 12,782

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Additional Information (Details)										1 Months Ended	6 Months Ended		12 Months Ended
	May 01, 2024	Mar. 29, 2024	Mar. 15, 2023 shares	Jan. 05, 2022 shares	Dec. 10, 2021 shares	Nov. 10, 2021 shares	Aug. 21, 2021 shares	Jan. 13, 2021 CNY (¥) item shares	Aug. 21, 2018 CNY (¥) shares	Jan. 31, 2022 shares	Dec. 31, 2023 CNY (¥) item	Dec. 31, 2022 CNY (¥)	Jun. 30, 2021 CNY (¥)	Jan. 13, 2021 USD ($) item $ / shares	Dec. 31, 2020
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Cost method investment ownership percentage									43.00%						43.00%
Shares									487,057
Reverse stock split	0.056										0.2
Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares							27,059
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Ownership percentage								51.00%						51.00%
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Payments to acquire additional interest in subsidiaries | ¥									¥ 10,000,000
Number of gas stations extending business | item											200
Number of Company's subsidiaries who entered into the fourth supplemental agreement to the investment agreement | item								2						2
Percentage of deemed consideration of equity.								8.00%
Equity method investment additional information									As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 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.
Stock price | $ / shares														$ 1.61
Fair market value of waived performance goals								¥ 1,689,807						$ 261,667
Remeasurement gain of previously held equity interests in connection with step acquisition | ¥													¥ 979,254
Amortization expense | ¥											¥ 0	¥ 350,000
Number of shares cancelled								162,352
Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Percentage of equity interest to be acquired in exchange for waiver of performance goals								8.00%						8.00%
Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares								27,059
Number of shares cancelled								9,020
Stock price | $ / shares														$ 28.98
Future Gas Station (Beijing) Technology, Ltd | Customer relationship
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Impairment loss for intangible assets | ¥											¥ 0	¥ 0
Future Gas Station (Beijing) Technology, Ltd | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares								487,057
Restricted shares
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Reverse stock split	0.056
Restricted shares issued for services (in shares)					250,000	500,000				250,000
Number of shares issued			1,000,000	1,050,000
Restricted shares | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Restricted shares issued for services (in shares)					13,889	27,778				13,889
Number of shares issued			55,556	58,333
Restricted shares | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares								487,057
Restricted shares | Future Gas Station (Beijing) Technology, Ltd | Post 2024 Reverse Stock Split
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Consideration in shares								27,059
Minimum | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Ownership percentage									8.00%
Maximum | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Ownership percentage									43.00%
Class A ordinary shares
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Reverse stock split	0.056	0.056
Class A ordinary shares | Future Gas Station (Beijing) Technology, Ltd
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Shares									487,057

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair values of the identifiable assets and liabilities (Details) - Jan. 13, 2021 - Future Gas Station (Beijing) Technology, Ltd	CNY (¥)	USD ($)	USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY.
Cash	¥ 471,843		$ 66,458
Accounts receivable, net	831,049		117,051
Other receivables, net	144,285		20,322
Contract costs, net	75,250		10,599
Prepaid expenses	91,132		12,836
Property and equipment, net	118,130		16,638
Intercompany receivables	6,850,000		964,802
Intangible assets- customer relationship	7,000,000		985,929
Goodwill	6,996,895		985,492
Accounts payable	(1,032,078)		(145,365)
Other payables	(1,273,182)		(179,324)
Other payable- related parties	(479,959)		(67,601)
Deferred revenue	(39,786)		(5,604)
Accrued payroll and employees' welfare	(1,629,519)		(229,513)
Taxes payable	(64,253)		(9,050)
Deferred tax liability	(1,050,000)		(147,889)
Total	17,009,807		$ 2,395,781
Deemed equity consideration to acquire 8% equity interest in FGS	1,689,807	$ 238,004
Fair value of previously held equity interest	30,530,000	4,300,061
Non-controlling interest	34,790,000	4,900,069
Capital contribution receivable due from non-controlling Interest	(50,000,000)	(7,042,353)
Total	¥ 17,009,807	$ 2,395,781

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair value of identified goodwill acquired and carrying value (Details) - Future Gas Station (Beijing) Technology, Ltd	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2023 USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Goodwill	¥ 6,996,895		$ 985,492
Less: impairment for goodwill	(6,996,895)		(985,492)
Goodwill, net	0		$ 0
Impairment loss on goodwill	¥ 0	¥ 0

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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY - Fair value of identified intangible assets, customer relationship and its estimated useful lives (Details) - 6 months ended Dec. 31, 2023 - Future Gas Station (Beijing) Technology, Ltd	CNY (¥)	USD ($)
BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY
Intangible assets - customer relationship	¥ 7,000,000	$ 985,929
Less: accumulated amortization	(1,750,000)	(246,482)
Less: impairment	(5,250,000)	(739,447)
Intangible assets - customer relationship, net	¥ 0	$ 0
Average Useful Life (in Years)	10 years

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LEASES - Operating lease related assets and liabilities (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Operating lease related assets and liabilities recorded on the balance sheets
Rights of use lease assets - current	¥ 1,714,263	$ 241,449
Less: impairment	(834,975)	(117,604)
Rights of use lease assets, net - current	879,288	123,845
Rights of use lease assets - non - current	16,204,906	2,282,413	¥ 3,489,875
Less: impairment			(834,975)
Rights of use lease assets, net - non - current	16,204,906	2,282,413	2,654,900
Operating lease liabilities - current	722,857	101,812	3,066,146
Operating lease liabilities - non-current	341,366	48,080	25,144
Total operating lease liabilities	¥ 1,064,223	$ 149,892	¥ 3,091,290

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LEASES - Weighted average remaining lease terms and discount rates (Details)	Dec. 31, 2023	Jun. 30, 2023
Remaining lease terms and discount rate:
Weighted average remaining lease term (years)	23 years 6 months	23 years 10 months 24 days
Weighted average discount rate	5.00%	5.00%

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LEASES - Maturities of lease liabilities (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Office Leases Commitment - short term
2024	¥ 1,045,399	$ 147,241
2025	26,400	3,718
Total lease payments	1,071,799	150,959
Less: imputed interest	(7,576)	(1,067)
Present value of lease liabilities	1,064,223	149,892	¥ 3,091,290
Operating lease liabilities - current	722,857	101,812	3,066,146
Operating lease liabilities - non-current	¥ 341,366	$ 48,080	¥ 25,144

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LEASES - Additional information (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
LEASES
Operating lease costs	¥ 1,659,302	$ 233,708	¥ 1,694,074
Short-term lease	313,533	$ 44,160	480,040
Impairment loss for the ROU	¥ 0		¥ 0
Minimum
LEASES
Lease term	1 year	1 year
Maximum
LEASES
Lease term	50 years	50 years

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OTHER PAYABLES - Third Parties (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
OTHER PAYABLES
Total	¥ 1,688,166	$ 237,773	¥ 5,819,010
Third parties
OTHER PAYABLES
Professional service fees	304,474	42,884	2,246,101
Distributors and employees	712,173	100,307	3,073,289
Accrued expenses	193,274	27,222	200,218
Others	478,245	67,360	299,402
Total	¥ 1,688,166	$ 237,773	¥ 5,819,010

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OTHER PAYABLES - Related Parties (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
OTHER PAYABLES
Total	¥ 1,688,166	$ 237,773	¥ 5,819,010
Related party
OTHER PAYABLES
Expenses paid by the major shareholders	1,663,858	234,350	1,796,309
Due to family members of the owners of BHD and FGS	545,159	76,784	545,159
Due to management staff for costs incurred on behalf of the company			250,927
Total	¥ 2,209,017	$ 311,134	¥ 2,592,395

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TAXES PAYABLE (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
TAXES PAYABLE
VAT payable	¥ 720,872	$ 101,533	¥ 699,601
Income tax payable	536,071	75,504	440,030
Other taxes payable	445,955	62,811	23,375
Total taxes payable	¥ 1,702,898	$ 239,848	¥ 1,163,006

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BANK LOANS - Short-term bank loans (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
BANK LOANS
Short-term bank loans	¥ 12,336,285	$ 1,737,529	¥ 12,451,481
Bank of Kunlun
BANK LOANS
Short-term bank loans	827,000	116,481	950,000
Industrial and Commercial Bank of China
BANK LOANS
Short-term bank loans	10,007,639	1,409,546	10,000,000
China Construction Bank
BANK LOANS
Short-term bank loans	¥ 1,501,646	$ 211,502	¥ 1,501,481

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BANK LOANS - Short-term bank loans - Narrative (Details)							1 Months Ended		6 Months Ended					12 Months Ended
	May 29, 2024	Jun. 13, 2023 CNY (¥)	Jun. 13, 2023 USD ($)	Jun. 09, 2023 CNY (¥)	Jun. 09, 2023 USD ($)	Jun. 06, 2023 CNY (¥)	Aug. 31, 2022 CNY (¥)	Aug. 31, 2022 USD ($)	Jun. 28, 2024 CNY (¥)	Jun. 28, 2024 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 06, 2023 USD ($)	Aug. 31, 2022 USD ($)
BANK LOANS
Term of debt	3 years
Proceeds from debt											¥ 0	$ 0	¥ 1,000,000
Repayments of debt											123,000	17,324	0
Interest expense on bank loan											159,276	22,434	¥ 227,918
Bank of Kunlun
BANK LOANS
Face amount of debt							¥ 2,900,000										$ 408,456
Term of debt							18 months	18 months
Proceeds from debt							¥ 1,000,000	$ 140,847
Repayments of debt									¥ 8,269	$ 1,165	¥ 123,000	$ 17,324		¥ 50,000	$ 7,042
Collateral value of debt							6,500,000										1,000,000.0
Industrial and Commercial Bank of China | Revolving loan facility
BANK LOANS
Term of debt						1 year
Interest rate (as a percent)						2.50%										2.50%
Proceeds from debt				¥ 5,000,000	$ 704,235
Repayments of debt		¥ 5,000,000	$ 704,235
Collateral value of debt						¥ 17,600,000										$ 2,400,000
Maximum borrowing capacity						¥ 10,000,000										$ 1,408,471
China Construction Bank
BANK LOANS
Face amount of debt							¥ 1,500,000										$ 211,271
Interest rate (as a percent)							3.95%										3.95%
Bank of Nanjing
BANK LOANS
Interest rate (as a percent)							6.00%										6.00%

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES - Due to related party (Details)			6 Months Ended
	May 29, 2024	May 28, 2024	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			¥ 20,019,889	$ 2,819,742	¥ 20,018,222
Debt Instrument, Maturity Date	Apr. 29, 2027	May 29, 2024
Debt Instrument, Interest Rate Percentage	3.75%
Debt instrument, term	3 years
Short term borrowings one
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties					10,004,055
Debt Instrument, Maturity Date			Dec. 26, 2023
Debt Instrument, Interest Rate Percentage			3.65%
Short term borrowings two
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			¥ 4,994,892	703,516	4,993,950
Debt Instrument, Maturity Date			Jun. 04, 2024
Debt Instrument, Interest Rate Percentage			3.40%
Short Term Borrowings Three
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			¥ 5,021,164	707,216	¥ 5,020,217
Debt Instrument, Maturity Date			Jun. 16, 2024
Debt Instrument, Interest Rate Percentage			3.40%
Short Term Borrowings Four
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Short-term borrowings due to related parties			¥ 10,003,833	$ 1,409,010
Debt Instrument, Maturity Date			Dec. 28, 2024
Debt Instrument, Interest Rate Percentage			3.45%

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SHORT-TERM BORROWINGS DUE TO RELATED PARTIES - Additional Information (Details) - Short term borrowings	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2023 CNY (¥)
SHORT-TERM BORROWINGS DUE TO RELATED PARTIES
Interest expense due to third party	¥ 338,338	$ 47,654	¥ 142,725
Guaranteed or collateralized	¥ 0			¥ 0

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CLASS A ORDINARY SHARES (Details)					6 Months Ended
	Oct. 16, 2023 shares	Mar. 15, 2023 USD ($) $ / shares shares	Jun. 14, 2021 USD ($) $ / shares shares	Apr. 05, 2021 USD ($) Vote $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2023 CNY (¥)	May 01, 2024 shares	Mar. 29, 2024 USD ($) $ / shares shares	Mar. 28, 2024 USD ($) $ / shares shares	Dec. 31, 2023 CNY (¥) shares	Dec. 14, 2023 shares	Oct. 10, 2023 shares	Jun. 30, 2023 $ / shares	Jun. 30, 2023 CNY (¥) shares	Dec. 31, 2022 $ / shares shares	Jun. 30, 2022 shares	Jun. 30, 2021 shares	Apr. 05, 2021 ¥ / shares	Jun. 30, 2020 shares	May 26, 2020 shares
CLASS A ORDINARY SHARES.
Number of ordinary shares called for by warrants					863,333					863,333	7,950,769								1,680,000	911,112
Placement agent's fees and other estimated offering expenses					$ 4,700,000	¥ 30,408,264
Ordinary shares, shares outstanding							7,927,132
Percentage transfer of profit to statutory reserves					10.00%	10.00%
Transfer of profit to statutory reserves up to certain percentage of registered capital					50.00%	50.00%
Appropriated retained earnings					$ 584,364					¥ 4,148,929				¥ 4,148,929
Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Number of ordinary shares called for by warrants					47,963					47,963	441,710								93,333	50,617
Class A Ordinary Shares
CLASS A ORDINARY SHARES.
Authorized share capital | $				$ 15,725,000				$ 58,000	$ 15,725,000
Ordinary shares, shares authorized				150,000,000	500,000,000			500,000,000	150,000,000	500,000,000				500,000,000	500,000,000
Par value (in dollars per share) | (per share)		$ 0.0925	$ 0.0925	$ 0.0925	$ 0.0001			$ 0.0001	$ 0.0925				$ 0.0001		$ 0.0001			¥ 0.62
Number of votes | Vote				1
Stock issuance (in shares)		8,827,500	6,014,102
Number of ordinary shares called for by warrants		10,002,500												863,333		7,950,769	8,814,102
Ordinary shares, shares issued	1,175,000				2,371,573					2,371,573				2,306,295	1,704,766
Ordinary shares, shares outstanding					2,371,573		141,703,218			2,371,573		1,175,000		2,306,295	1,704,766
Class A Ordinary Shares | Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Ordinary shares, shares authorized				8,333,333
Par value (in dollars per share) | $ / shares		$ 1.67	$ 1.67	$ 1.67
Stock issuance (in shares)		490,417	334,117
Number of ordinary shares called for by warrants		555,694												47,963		441,710	489,673
Ordinary shares, shares issued	65,278
Class B ordinary shares
CLASS A ORDINARY SHARES.
Authorized share capital | $				$ 1,850,000
Ordinary shares, shares authorized				20,000,000	80,000,000			80,000,000	20,000,000	80,000,000				80,000,000	80,000,000
Par value (in dollars per share) | (per share)				$ 0.0925	$ 0.0001			$ 0.0001	$ 0.0925				$ 0.0001		$ 0.0001			¥ 0.62
Number of votes | Vote				15
Ordinary shares, shares issued					7,100,000					7,100,000				7,100,000	4,100,000
Ordinary shares, shares outstanding					7,100,000					7,100,000				7,100,000	4,100,000
Pre-funded warrants
CLASS A ORDINARY SHARES.
Stock issuance (in shares)	1,175,000	1,175,000	2,800,000
Number of ordinary shares called for by warrants		10,002,500	8,814,102
Gross proceeds | $		$ 8,000,000.0	$ 55,000,000.0
Pre-funded warrants | Post 2024 Reverse Stock Split
CLASS A ORDINARY SHARES.
Stock issuance (in shares)	65,278	65,278	155,556
Number of ordinary shares called for by warrants		555,694	489,673

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CLASS A ORDINARY SHARES - Pre funded warrants (Details)		6 Months Ended	12 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares shares	Jun. 30, 2023 $ / shares shares
CLASS A ORDINARY SHARES
Reverse stock split	0.056	0.2
Pre-funded warrants
CLASS A ORDINARY SHARES
Warrants Outstanding | shares		65,278
Issued | shares			65,278
Exercised | shares		(65,278)
Warrants Outstanding | shares			65,278
Weighted average exercise price outstanding per share | $ / shares		$ 0.18
Issued | $ / shares			$ 0.18
Exercised | $ / shares		$ 0.18
Weighted average exercise price outstanding per share | $ / shares			$ 0.18
Weighted average remaining period, outstanding			5 years 2 months 19 days
Issued			5 years 6 months
Reverse stock split	0.056

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS (Details)		2 Months Ended	6 Months Ended
	Dec. 14, 2023 $ / shares shares	Jun. 30, 2020 USD ($) item $ / shares shares	Dec. 31, 2023 CNY (¥) Y shares	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) Y shares	Jun. 30, 2023 CNY (¥) Y shares	Jun. 30, 2023 USD ($) Y $ / shares shares	Mar. 15, 2023 USD ($) shares	Jun. 30, 2022 $ / shares shares	Jun. 30, 2021 shares	May 26, 2020 USD ($) $ / shares shares
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of offerings | item		2
Number of warrants to purchase ordinary shares	7,950,769	1,680,000	863,333				863,333						911,112
Exercise price of warrants (in dollars per share) | $ / shares	$ 0.25	$ 1.25											$ 2.25
Fair value of warrants | $		$ 1,639,333				$ 2,880,000	$ 197,692			$ 2,750,000			$ 1,689,389
Fair value of the warrant liability			¥ 993,986				$ 140,000	¥ 31,615,668
Fair value changes of warrants liability			¥ 10,461,075	$ 1,473,412	¥ 20,097,665
Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares	441,710	93,333	47,963				47,963						50,617
Exercise price of warrants (in dollars per share) | $ / shares	$ 4.50	$ 22.50											$ 40.50
Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Fair value of the warrant liability			¥ 993,986				$ 140,000		$ 1,930,000
Number of warrants			47,963				47,963
Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants								555,694	555,694
Warrants re-purchase	10,002,500
Purchase price of each warrant | $ / shares	$ 0.25
Fair value of warrant liability | $							$ 0		$ 2,430,000
Fair value changes of warrants liability | $				$ 70,625		$ 0
Warrant 2023 | Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares	555,694
Exercise price of warrants (in dollars per share) | $ / shares	$ (4.50)
Second Offering Member
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants												34,860,000
Class A Ordinary Shares
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares								863,333	863,333	10,002,500	7,950,769	8,814,102
Exercise price of warrants (in dollars per share) | $ / shares									$ 6.24		$ 0.80
Class A Ordinary Shares | Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants to purchase ordinary shares								47,963	47,963	555,694	441,710	489,673
Exercise price of warrants (in dollars per share) | $ / shares									$ 112.32		$ 14.40
Risk free interest rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0.35											0.0040
Risk free interest rate | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			0.0402				0.0402
Risk free interest rate | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input								0.0359	0.0359
Measurement input, expected term
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants and rights outstanding, term		5 years 6 months											5 years 6 months
Measurement input, expected term | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y			2.96				2.96
Measurement input, expected term | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y								5.22	5.22
Measurement input, price volatility
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		104.26											99.50
Measurement input, price volatility | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			1.19				1.19
Measurement input, price volatility | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input								1.10	1.10
Measurement input, expected dividend rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0											0

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Measurement inputs (Details)		6 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares Y shares	Jun. 30, 2023 Y $ / shares shares	Jun. 30, 2020	May 26, 2020
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Reverse stock split	0.056	0.2
Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants | shares		47,963
Number of warrants, remaining | shares			47,963
Number of warrants, adjusted | shares			441,710
Reverse stock split	0.056
Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of warrants | shares			555,694
Reverse stock split	0.056
Share price | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0.23
Warrants outstanding, measurement input remaining			0.34
Warrants outstanding measurement input adjusted			0.34
Share price | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			0.34
Risk free interest rate
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				0.35	0.0040
Risk free interest rate | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		0.0402
Warrants outstanding, measurement input remaining			0.0441
Warrants outstanding measurement input adjusted			0.0441
Risk free interest rate | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			0.0359
volatility
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input				104.26	99.50
volatility | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		1.19
Warrants outstanding, measurement input remaining			1.27
Warrants outstanding measurement input adjusted			1.27
volatility | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			1.10
Exercise price | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input		112.32
Warrants outstanding, measurement input remaining			112.32
Warrants outstanding measurement input adjusted			14.40
Exercise price | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input			14.40
Warrant life | Warrant 2021
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y		2.96
Warrants outstanding, measurement input remaining | Y			3.47
Warrants outstanding measurement input adjusted | Y			3.47
Warrant life | Warrant 2023
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants outstanding, measurement input | Y			5.22

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Liabilities (Details) - USD ($)	Dec. 31, 2023	Jun. 30, 2023
Liabilities:
Warrant liability - non-current	$ 140,000	$ 4,360,000
Level 3
Liabilities:
Warrant liability - non-current	$ 140,000	$ 4,360,000

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Warrant activities (Details)		6 Months Ended	12 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares shares	Jun. 30, 2023 $ / shares shares	Jun. 30, 2022 $ / shares shares
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Reverse stock split	0.056	0.2
Warrant
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrants Outstanding | shares		1,045,367	489,673
Issued | shares			555,694
Redeemed | shares		(997,404)
Warrants Outstanding | shares		47,963	1,045,367	489,673
Weighted average exercise price outstanding per share | $ / shares		$ 18.90	$ 112.32
Issued | $ / shares			14.40
Redeemed | $ / shares		14.40
Weighted average exercise price outstanding per share | $ / shares		$ 112.32	$ 18.90	$ 112.32
Weighted average remaining period, outstanding		2 years 11 months 15 days	4 years 4 months 24 days	4 years 5 months 15 days
Weighted average remaining period, issued			5 years 6 months

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ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS - Estimated liability (Details)	Dec. 14, 2023 shares	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Warrant liability - current		¥ 8,519,880	$ 1,200,000
Number of bought back an aggregate warrant	17,953,269
Post 2024 Reverse Stock Split
ORDINARY SHARES PURCHASE WARRANTS ISSUED TO INVESTORS
Number of bought back an aggregate warrant	997,404

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SHARE-BASED COMPENSATION (Details)		6 Months Ended	12 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares shares	Jun. 30, 2023 $ / shares shares
SHARE-BASED COMPENSATION
Stock Options, Shares, Outstanding at Beginning | shares		4,444	4,444
Stock Options, Shares, Granted | shares		0	0
Forfeited | shares		0	0
Stock Option, Shares, Exercised | shares		0	0
Stock Option, Shares, Expired | shares		0	0
Stock Options, Shares, Outstanding at Ending | shares		4,444	4,444
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Beginning | $ / shares		$ 148.50	$ 148.50
Stock Options, Weighted Average Exercise Price Per share, Granted | $ / shares		0	0
Stock Options, Weighted Average Exercise Price Per share, Forfeited | $ / shares		0	0
Stock Options, Weighted Average Exercise Price Per share, Exercised | $ / shares		0	0
Stock Options, Weighted Average Exercise Price Per share, Expired | $ / shares		0	0
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Ending | $ / shares		$ 148.50	$ 148.50
Reverse stock split	0.056	0.2

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SHARE-BASED COMPENSATION - Option outstanding (Details)		6 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares shares
SHARE-BASED COMPENSATION
Outstanding Options, Number (in shares)		4,444
Exercisable Options, Number (in shares)		4,444
Reverse stock split	0.056	0.2
Stock option one [Member]
SHARE-BASED COMPENSATION
Outstanding Options, Average Exercise Price | $ / shares		$ 148.50
Outstanding Options, Number (in shares)		4,444
Outstanding Options, Average Remaining Contractual life (Years)		1 year 29 days
Exercisable Options, Average Exercise Price | $ / shares		$ 148.50
Exercisable Options, Number (in shares)		4,444
Exercisable Options, Average Remaining Contractual life (years)		1 year 29 days
Reverse stock split	0.056

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SHARE-BASED COMPENSATION - Restricted shares (Details)		6 Months Ended	12 Months Ended
	May 01, 2024	Dec. 31, 2023 shares	Jun. 30, 2023 shares
SHARE-BASED COMPENSATION
Granted - Shares		0	0
Reverse stock split	0.056	0.2
Restricted Stock [Member]
SHARE-BASED COMPENSATION
Non-vested, Beginning Balance - Shares		171,938	120,407
Granted - Shares		0	277,778
Vested - Shares		(111,111)	(226,247)
Non-vested, Ending Balance - Shares		60,827	171,938
Reverse stock split	0.056

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SHARE-BASED COMPENSATION - Status of restricted stock (Details)		6 Months Ended
	May 01, 2024	Dec. 31, 2023 $ / shares shares
Reverse stock split	0.056	0.2
Fair Value per Share $18.72
Outstanding Restricted Shares, Fair Value per Share | $ / shares		$ 18.72
Restricted shares
Reverse stock split	0.056
Restricted shares | Fair Value per Share $18.72
Outstanding Restricted Shares, Number | shares		60,827
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)		1 year 1 month 28 days

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SHARE-BASED COMPENSATION - Additional Information (Details)									1 Months Ended		6 Months Ended			12 Months Ended
	Mar. 15, 2023 USD ($) $ / shares shares	Mar. 09, 2023 USD ($) $ / shares shares	Feb. 28, 2022 USD ($) $ / shares shares	Jan. 05, 2022 USD ($) $ / shares shares	Dec. 10, 2021 $ / shares shares	Dec. 05, 2021 USD ($) $ / shares shares	Nov. 10, 2021 shares	Aug. 21, 2018 $ / shares shares	Jan. 31, 2022 shares	Aug. 21, 2018 USD ($) $ / shares shares	Dec. 31, 2023 CNY (¥) shares	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 CNY (¥) shares	Jun. 30, 2023 shares	Dec. 31, 2021 $ / shares
SHARE-BASED COMPENSATION
Number of shares expected to be vested											4,444	4,444
Share-Based Payment Arrangement, Option
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense | ¥											¥ 0		¥ 0
Share-based compensation | ¥											0
Restricted shares
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense											¥ 1,070,144	$ 150,726	¥ 4,304,857
Restricted stock closing price | $ / shares					$ 1.60										$ 1.31
Restricted shares issued for services (in shares)					250,000		500,000		250,000
Shares outstanding											0	0	0
Exercise price (per share) | $ / shares	$ 0.3726			$ 1.29
Number of shares issued	1,000,000			1,050,000
Stock issued value for services | $	$ 372,600			$ 1,354,500
Restricted shares | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares					$ 28.80										$ 23.58
Restricted shares issued for services (in shares)					13,889		27,778		13,889
Exercise price (per share) | $ / shares	$ 6.71			$ 23.22
Number of shares issued	55,556			58,333
Restricted shares | Senior Manager
SHARE-BASED COMPENSATION
Stock or Unit Option Plan Expense											¥ 2,866,560	$ 403,747	¥ 1,796,417
Share-based compensation											¥ 4,700,000	$ 700,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period, fair value | $		$ 3,025,000	$ 1,694,000			$ 4,175,000
Restricted stock closing price | $ / shares		$ 1.01	$ 1.06			$ 1.67
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)														1 year 1 month 28 days
Granted during the period		3,000,000	1,600,000			2,500,000
Restricted shares | Senior Manager | Class B ordinary shares
SHARE-BASED COMPENSATION
Shares outstanding											0	0	0
Restricted shares | Employee
SHARE-BASED COMPENSATION
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period, fair value | $			$ 1,708,024							$ 2,523,240
Exercisable Options, Average Remaining Contractual life (years)			3 years					3 years
Restricted stock closing price | $ / shares			$ 1.04					$ 6.45		$ 6.45
Restricted shares issued (in shares)														547,444
Number of shares expected to be vested														1,094,887
Granted during the period										391,200
Restricted shares | Employee | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Restricted stock closing price | $ / shares			$ 18.72					$ 116.10		$ 116.10
Restricted shares issued (in shares)														30,414
Number of shares expected to be vested														60,827
Granted during the period								21,733
Restricted shares | Employee | Class A ordinary shares
SHARE-BASED COMPENSATION
Shares outstanding											0	0	0
Exercise price (per share) | $ / shares	$ 0.3726
Number of shares issued	1,000,000
Stock issued value for services | $	$ 372,600
Granted during the period			1,642,331
Restricted shares | Employee | Class A ordinary shares | Post 2024 Reverse Stock Split
SHARE-BASED COMPENSATION
Exercise price (per share) | $ / shares	$ 6.71
Number of shares issued	55,556
Granted during the period			91,241

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INCOME TAX - Income (loss) before provision for income taxes (Details)	6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)
INCOME TAX
Outside China areas	$ (2,059,369)	¥ (14,621,317)	¥ (32,395,145)
China	(1,181,776)	(8,390,493)	2,531,634
Loss before income tax	$ (3,241,146)	¥ (23,011,810)	¥ (29,863,511)

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INCOME TAX - Deferred tax assets and liabilities, net (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Deferred tax assets:
Allowance for credit losses	¥ 1,285,544	$ 181,065	¥ 1,019,592
Impairment for inventory	35,646	5,021	90,322
Net operating loss carryforwards	24,263,351	3,417,422	23,290,731
Subtotal	25,584,541	3,603,507	24,400,645
Less: Valuation allowance	(25,304,762)	(3,564,101)	(24,107,246)
Total deferred tax assets, net	279,779	39,406	293,399
Deferred tax liabilities:
Accelerated amortization of intangible assets	(132,891)	(18,717)	(146,511)
Gain on the previously held equity method investment	(146,888)	(20,689)	(146,888)
Recognition of customer relationship arising from business combinations	0	0	0
Total deferred tax liabilities	(279,779)	(39,406)	(293,399)
Deferred tax assets, net	¥ 0	$ 0	¥ 0

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INCOME TAX - NOL expiration (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
INCOME TAX
2024	¥ 10,484,902	$ 1,476,768
2025	19,617,124	2,763,014
2026	32,533,742	4,582,282
2027	27,137,905	3,822,294
2028	34,868,363	4,911,106
Total	¥ 124,642,036	$ 17,555,464	¥ 133,600,000

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INCOME TAX - Income tax expense (benefit) (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 CNY (¥)
INCOME TAX
Current income tax provision (benefit)	¥ 96,041	$ 13,527	¥ 9,180
Deferred income tax benefit	0		0
Expense for income tax	¥ 96,041	$ 13,527	¥ 9,180

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INCOME TAX - Additional Information (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
INCOME TAX
Federal statutory income tax rate	25.00%	25.00%
Cumulative net operating loss	¥ 124,642,036		$ 17,555,464	¥ 133,600,000
Net operating loss expired	13,200,000	$ 1,900,000
Additional NOL incurred by VIEs and VIEs' subsidiaries	¥ 4,200,000	$ 600,000
Nanjing Recon
INCOME TAX
Federal statutory income tax rate	15.00%	15.00%
Beijing Bhd Petroleum Technology Co Ltd
INCOME TAX
Federal statutory income tax rate	15.00%	15.00%

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NON-CONTROLLING INTEREST (Details)		Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)
NON-CONTROLLING INTEREST
Paid-in capital	[1]	¥ 584,275,905	$ 82,293,540	¥ 580,340,061
Accumulated other comprehensive loss		30,517,774	4,298,339	35,127,173
Total non-controlling interests		(10,609,888)	(1,494,371)	(10,056,059)
Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		6,656,000	937,478	6,656,000	$ 917,904
Capital contribution receivable due from non-controlling Interest		(48,870,000)	(6,883,196)	(48,870,000)	(6,739,481)
Unappropriated retained earnings (deficit)		(3,155,185)	(444,398)	(2,601,356)	(358,742)
Accumulated other comprehensive loss		(30,703)	(4,324)	(30,703)	(4,234)
Valuation increase shared by minority shareholders		34,790,000	4,900,069	34,790,000	4,797,760
Total non-controlling interests		(10,609,888)	$ (1,494,371)	(10,056,059)	$ (1,386,793)
BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		1,651,000		1,651,000
Unappropriated retained earnings (deficit)		3,818,698		3,477,494
Accumulated other comprehensive loss		(18,850)		(18,850)
Total non-controlling interests		5,450,848		5,109,644
Nanjing Recon | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		200,000		200,000
Unappropriated retained earnings (deficit)		3,616,001		3,616,001
Accumulated other comprehensive loss		(11,853)		(11,853)
Total non-controlling interests		3,804,148		3,804,148
Gan Su BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		4,805,000		4,805,000
Capital contribution receivable due from non-controlling Interest		0
Unappropriated retained earnings (deficit)		(6,982,801)		(6,336,893)
Accumulated other comprehensive loss		0
Valuation increase shared by minority shareholders		0
Total non-controlling interests		(2,177,801)		(1,531,893)
Qinghai BHD | Non-controlling Interest
NON-CONTROLLING INTEREST
Paid-in capital		0
Capital contribution receivable due from non-controlling Interest		0
Unappropriated retained earnings (deficit)		(1,569,913)		(1,561,196)
Accumulated other comprehensive loss		0
Valuation increase shared by minority shareholders		0
Total non-controlling interests		(1,569,913)		(1,561,196)
FGS | Non-controlling Interest
NON-CONTROLLING INTEREST
Capital contribution receivable due from non-controlling Interest		(48,870,000)		(48,870,000)
Unappropriated retained earnings (deficit)		(2,037,170)		(1,796,762)
Valuation increase shared by minority shareholders		34,790,000		34,790,000
Total non-controlling interests		¥ (16,117,170)		¥ (15,876,762)

[1] *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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CONCENTRATIONS (Details) $ in Millions	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022	Dec. 31, 2023 USD ($)	Dec. 31, 2023 HKD ($)	Jun. 30, 2023 CNY (¥)
China
CONCENTRATIONS
Cash was on deposit at financial institutions	¥ 101,200,000		$ 14.3		¥ 45,500,000
Maximum insured bank deposit | ¥	500,000
Unprotected cash held in banks	96,800,000		13.6		40,000,000.0
Hong Kong
CONCENTRATIONS
Cash was on deposit at financial institutions	154,600,000		21.8		240,300,000
Maximum insured bank deposit | $				$ 500,000
Unprotected cash held in banks	¥ 152,900,000		$ 21.5		¥ 238,800,000
China National Petroleum Corporation | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	56.00%	41.00%
China National Petroleum Corporation | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	34.00%	43.00%
SINOPEC | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	19.00%	31.00%
SINOPEC | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	14.00%	18.00%
CNOOC | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	15.00%
CNOOC | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	21.00%
Another Customer | Customer One | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage		14.00%
Another Customer | Customer concentration | Sales revenue
CONCENTRATIONS
Concentration risk, percentage	10.00%	10.00%
Another Customer | Customer concentration | Accounts Receivable
CONCENTRATIONS
Concentration risk, percentage	30.00%

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COMMITMENTS AND CONTINGENCY - Purchase commitment (Details) - Dec. 31, 2023 - Purchase Commitment	CNY (¥)	USD ($)
Purchase commitment
2024	¥ 23,357,995	$ 3,289,905
2025	300,000	42,254
Total minimum payments required	¥ 23,657,995	$ 3,332,159

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COMMITMENTS AND CONTINGENCY - Office Leases Commitment - short term (Details) - Dec. 31, 2023	CNY (¥)	USD ($)
Office Leases Commitment - short term
Total lease payments	¥ 1,071,799	$ 150,959
Office Leases Commitment
Office Leases Commitment - short term
2024	692,500	97,537
Total lease payments	¥ 692,500	$ 97,537

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COMMITMENTS AND CONTINGENCY - Additional Information (Details)									6 Months Ended		12 Months Ended
	Oct. 25, 2023 CNY (¥)	Oct. 25, 2023 USD ($)	Sep. 25, 2023 CNY (¥)	Sep. 25, 2023 USD ($)	Aug. 25, 2023 CNY (¥)	Aug. 25, 2023 USD ($)	Jan. 09, 2023 CNY (¥)	Jan. 09, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Dec. 01, 2021 CNY (¥)	Dec. 01, 2021 USD ($)
COMMITMENTS AND CONTINGENCY
Severance Payments									¥ 7,900,000	$ 1,100,000
Legal contingencies | Henan Puxinfangfu Construction Engineering Co., Ltd.
COMMITMENTS AND CONTINGENCY
Restricted cash balance														¥ 700,000	$ 100,000
Trade accounts payable due											¥ 1,820,000		$ 300,000
Amount paid to the Plaintiff									855,197	117,937
Amount of damages claimed											¥ 2,000,000.0	$ 300,000
Settlement payment totaling							¥ 1,800,000	$ 300,000
Legal contingencies | Jiuquan Third Construction and Installation Engineering Company
COMMITMENTS AND CONTINGENCY
Amount paid to the Plaintiff	¥ 1,000,000.0	$ 140,000	¥ 1,000,000.0	$ 140,000					¥ 1,300,000	$ 180,000
Amount of damages claimed					¥ 2,800,000	$ 380,000

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RELATED PARTY TRANSACTIONS AND BALANCES - Leases from related parties (Details)	6 Months Ended
	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)
RELATED PARTY TRANSACTIONS AND BALANCES
Operating lease liabilities	¥ 1,064,223		$ 149,892	¥ 3,091,290
Related party
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	94,167	$ 13,263
Annual rental expense	1,100,000	160,000
Rights of use lease assets, net	113,361		15,967	335,976	$ 46,333
Operating lease liabilities	113,361		$ 15,967	¥ 335,976	$ 46,333
Founder one
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 40,000	$ 5,634
Lessee, Operating Lease, Period of Contract	April 1, 2022 - March 31, 2024	April 1, 2022 - March 31, 2024
Founder two
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 31,667	$ 4,460
Lessee, Operating Lease, Period of Contract	January 1, 2023 - Dec 31, 2023	January 1, 2023 - Dec 31, 2023
Founder three
RELATED PARTY TRANSACTIONS AND BALANCES
Monthly rent	¥ 22,500	$ 3,169
Lessee, Operating Lease, Period of Contract	January 1, 2023 - Dec 31, 2023	January 1, 2023 - Dec 31, 2023

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VARIABLE INTEREST ENTITIES (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2022 CNY (¥)
Current assets
Cash	¥ 121,848,777	$ 17,162,041	¥ 104,125,800
Short-term investments	134,000,000.0	18,866,554	184,184,455
Notes receivable	12,532,717	1,765,196	3,742,390
Accounts receivable, net	30,813,885	4,340,045	27,453,415
Inventories, net	1,855,535	261,347	6,330,701
Other receivables, net	4,184,778	589,414	2,185,733
Loans to third parties	79,374,144	11,179,614	123,055,874
Purchase advances, net	1,996,413	281,189	2,680,456
Contract costs, net	37,323,824	5,256,951	49,572,685
Prepaid expenses	295,384	41,603	350,119
Operating lease right-of-use assets, net - current	879,288	123,845
Total current assets	425,059,299	59,868,349	504,413,173
Property and equipment, net	23,492,024	3,308,782	24,752,864
Long-term other receivables, net			3,640
Long-term loan to third parties	18,500,000	2,605,671
Operating lease right-of-use assets, net - non-current	16,204,906	2,282,413	2,654,900
Total Assets	483,256,229	68,065,215	531,824,577
LIABILITIES
Short-term bank loans	12,336,285	1,737,529	12,451,481
Accounts payable	12,062,861	1,699,018	10,791,721
Other payables	1,688,166	237,773	5,819,010
Other payable- related parties	2,209,017	311,134	2,592,395
Contract liabilities	4,888,749	688,566	2,748,365
Accrued payroll and employees' welfare	2,399,919	338,022	2,382,516
Taxes payable	1,702,898	239,848	1,163,006
Short-term borrowings - related parties	20,019,889	2,819,742	20,018,222
Operating lease liabilities - current	722,857	101,812	3,066,146
Total Current Liabilities	66,866,018	9,417,880	61,032,862
Operating lease liabilities - non-current	341,366	48,080	25,144
Total Liabilities	67,885,873	9,561,524	92,673,674
VIE
Current assets
Cash	23,902,252		37,661,118	$ 3,366,562
Restricted cash	3,904		731,545	550
Short-term investments	18,000,000		0	2,535,247
Notes receivable	12,532,717		3,742,390	1,765,196
Accounts receivable, net	30,813,885		27,453,415	4,340,045
Inventories, net	1,855,535		6,330,701	261,347
Other receivables, net	4,155,097		11,618,275	585,233
Loans to third parties	26,841,513		37,770,188	3,780,548
Purchase advances, net	1,996,413		1,592,761	281,189
Contract costs, net	32,373,824		49,572,685	4,559,758
Prepaid expenses	193,859		121,329	27,303
Operating lease right-of-use assets, net - current	879,288		0	123,845
Total current assets	153,548,287		176,594,407	21,626,823
Property and equipment, net	23,492,024		24,752,864	3,308,782
Long-term other receivables, net	0		3,640	0
Long-term loan to third parties	18,500,000		0	2,605,671
Operating lease right-of-use assets, net - non-current	1,219,978		2,654,900	171,830
Total Assets	196,760,289		204,005,811	27,713,106
LIABILITIES
Short-term bank loans	12,336,285		12,451,481	1,737,529
Accounts payable	12,062,861		10,791,721	1,699,018
Other payables	1,340,788		3,904,135	188,846
Other payable- related parties	2,162,184		1,356,915	304,537
Contract liabilities	4,888,749		2,748,361	688,566
Accrued payroll and employees' welfare	1,077,495		1,048,061	151,762
Intercompany payables	259,617,001		263,935,922	36,566,290
Taxes payable	1,265,868		1,163,237	178,294
Short-term borrowings - related parties	20,019,889		20,018,222	2,819,742
Operating lease liabilities - current	1,038,354		3,066,146	146,248
Total Current Liabilities	315,809,474		320,484,201	44,480,832
Operating lease liabilities - non-current	25,869		25,144	3,644
Total Liabilities	315,835,343		320,509,345	44,484,476
RECON TECHNOLOGY LTD
Current assets
Cash	34,657,271	4,881,375	236,146,589	$ 33,260,551	¥ 183,517,938	¥ 296,838,959
Short-term investments	115,950,650	16,331,307
Other receivables, net	356,442,080	50,203,817	291,525,426
Total current assets	559,618,830	78,820,664	607,708,032
Total Assets	436,942,680	61,542,090	484,787,542
LIABILITIES
Other payables	1,448,570	204,027	3,964,912
Total Current Liabilities	9,968,450	1,404,027	3,964,912
Total Liabilities	10,962,436	1,544,027	35,580,580
Related party
Current assets
Operating lease right-of-use assets, net - current	113,361	15,967
Operating lease right-of-use assets, net - non-current	0		335,976
LIABILITIES
Other payables	2,209,017	311,134	2,592,395
Operating lease liabilities - current	113,361	$ 15,967	335,976
Operating lease liabilities - non-current	¥ 0		¥ 0

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VARIABLE INTEREST ENTITIES - Additional Information (Details)	6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)
Variable Interest Entity [Line Items]
Revenue	$ 6,374,269	¥ 45,256,672		¥ 45,559,591
Operating expenses	4,916,663	34,907,808		28,202,033
Net loss	3,176,668	22,554,022		29,876,418
VIE
Variable Interest Entity [Line Items]
Revenue	6,374,269	45,256,672	$ 6,604,466	45,559,591
Operating expenses	3,048,779	21,646,029	1,687,940	11,643,918
Net loss	$ (970,498)	¥ (6,890,440)	$ (431,189)	¥ (2,974,474)

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SEGMENT REPORTING (Details)	6 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2023 CNY (¥) segment	Dec. 31, 2022 CNY (¥)
Number of operating segments	4	4
Total revenue	$ 6,374,269	¥ 45,256,672	¥ 45,559,591
Automation product and software
Total revenue	2,472,273	17,552,892	19,055,227
Equipment, accessories and others
Total revenue	2,516,571	17,867,404	9,730,859
Oilfield environmental protection
Total revenue	1,134,339	8,053,696	12,789,684
Platform Outsourcing Services
Total revenue	$ 251,085	¥ 1,782,680	¥ 3,983,821

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SEGMENT REPORTING - Company's revenue (Details)	6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)
Revenue	$ 6,374,269	¥ 45,256,672	¥ 45,559,591
Cost of revenue and related tax	4,669,211	33,150,930	32,427,772
Gross profit	1,705,058	12,105,742	13,131,819
Depreciation and amortization	200,985	1,426,971	1,952,625
Total capital expenditures		199,444	2,321,272
Goods transferred at a point in time
Revenue		40,456,993	43,052,594
Services rendered over time
Revenue		4,799,679	2,506,997
Automation product and software
Revenue	2,472,273	17,552,892	19,055,227
Cost of revenue and related tax		14,040,976	14,955,185
Gross profit		3,511,916	4,100,042
Depreciation and amortization		253,397	524,970
Total capital expenditures		83,253	2,303,311
Automation product and software | Goods transferred at a point in time
Revenue		14,368,994	19,055,227
Automation product and software | Services rendered over time
Revenue		3,183,898
Equipment, accessories and others
Revenue	2,516,571	17,867,404	9,730,859
Cost of revenue and related tax		12,778,042	6,254,015
Gross profit		5,089,362	3,476,844
Depreciation and amortization		143,927	358,954
Total capital expenditures		116,191	3,008
Equipment, accessories and others | Goods transferred at a point in time
Revenue		17,867,404	9,730,859
Oilfield environmental protection
Revenue	1,134,339	8,053,696	12,789,684
Cost of revenue and related tax		6,020,271	9,988,100
Gross profit		2,033,425	2,801,584
Depreciation and amortization		1,029,646	1,038,342
Oilfield environmental protection | Goods transferred at a point in time
Revenue		8,053,696	10,282,687
Oilfield environmental protection | Services rendered over time
Revenue			2,506,997
Platform Outsourcing Services
Revenue	$ 251,085	1,782,680	3,983,821
Cost of revenue and related tax		311,641	1,230,472
Gross profit		1,471,039	2,753,349
Depreciation and amortization			30,359
Total capital expenditures			14,953
Platform Outsourcing Services | Goods transferred at a point in time
Revenue		166,899	¥ 3,983,821
Platform Outsourcing Services | Services rendered over time
Revenue		¥ 1,615,781

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SEGMENT REPORTING - Total assets (Details)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Total assets:
Total Assets	¥ 483,256,229	$ 68,065,215	¥ 531,824,577
Automation product and software
Total assets:
Total Assets	157,269,367	22,150,927	167,009,315
Equipment, accessories and others
Total assets:
Total Assets	158,131,921	22,272,414	170,809,759
Oilfield environmental protection
Total assets:
Total Assets	94,285,444	13,279,827	107,393,609
Platform Outsourcing Services
Total assets:
Total Assets	¥ 73,569,497	$ 10,362,047	¥ 86,611,894

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SUBSEQUENT EVENTS (Details)								3 Months Ended	6 Months Ended	12 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 CNY (¥) shares	Feb. 26, 2024 USD ($) $ / shares shares	Jan. 31, 2024 USD ($) $ / shares shares	Oct. 16, 2023 shares	Mar. 15, 2023 $ / shares shares	Jun. 14, 2021 $ / shares shares	Mar. 31, 2024 $ / shares shares	Dec. 31, 2023 CNY (¥) shares	Jun. 30, 2023 $ / shares shares	Jun. 28, 2024 USD ($)	May 24, 2024 CNY (¥)	Apr. 24, 2024 CNY (¥)	Mar. 29, 2024 USD ($) $ / shares shares	Mar. 28, 2024 USD ($) $ / shares shares	Feb. 22, 2024 USD ($)	Dec. 31, 2023 USD ($) $ / shares shares	Oct. 10, 2023 shares	Dec. 31, 2022 $ / shares shares	Apr. 05, 2021 USD ($) $ / shares shares	Apr. 05, 2021 ¥ / shares	May 23, 2017 CNY (¥)
SUBSEQUENT EVENTS
Ordinary shares, shares outstanding	7,927,132
Stock Options, Shares, Granted									0	0
Reverse stock split ratio	0.056								0.2
Stock issued during period, shares, stock splits		0
Stockholders equity note stock split securities exercisable multiplier	18
Gan Su BHD Environmental Technology Co., Ltd
SUBSEQUENT EVENTS
Capital | ¥																						¥ 50,000,000.0
Paid in capital									¥ 27,495,000								$ 3,872,590
Restricted shares
SUBSEQUENT EVENTS
Stock Options, Shares, Granted									0	277,778
Reverse stock split ratio	0.056
Pre-funded warrants
SUBSEQUENT EVENTS
Stock issuance (in shares)					1,175,000	1,175,000	2,800,000
Pre-funded warrants | Post 2024 Reverse Stock Split
SUBSEQUENT EVENTS
Stock issuance (in shares)					65,278	65,278	155,556
Class A Ordinary Shares
SUBSEQUENT EVENTS
Stock issuance (in shares)						8,827,500	6,014,102
Ordinary shares, shares issued					1,175,000				2,371,573	2,306,295							2,371,573		1,704,766
Ordinary shares, shares outstanding	141,703,218								2,371,573	2,306,295							2,371,573	1,175,000	1,704,766
Reverse stock split ratio	0.056	0.056
Authorized share capital | $														$ 58,000	$ 15,725,000					$ 15,725,000
Ordinary shares, shares authorized									500,000,000	500,000,000				500,000,000	150,000,000		500,000,000		500,000,000	150,000,000
Ordinary shares, par value (in dollars per share) | (per share)						$ 0.0925	$ 0.0925			$ 0.0001				$ 0.0001	$ 0.0925		$ 0.0001		$ 0.0001	$ 0.0925	¥ 0.62
Class A Ordinary Shares | Post 2024 Reverse Stock Split
SUBSEQUENT EVENTS
Stock issuance (in shares)						490,417	334,117
Ordinary shares, shares issued					65,278
Ordinary shares, shares authorized																				8,333,333
Ordinary shares, par value (in dollars per share) | $ / shares						$ 1.67	$ 1.67													$ 1.67
Class B ordinary shares
SUBSEQUENT EVENTS
Ordinary shares, shares issued									7,100,000	7,100,000							7,100,000		4,100,000
Ordinary shares, shares outstanding									7,100,000	7,100,000							7,100,000		4,100,000
Authorized share capital | $																				$ 1,850,000
Ordinary shares, shares authorized									80,000,000	80,000,000				80,000,000	20,000,000		80,000,000		80,000,000	20,000,000
Ordinary shares, par value (in dollars per share) | (per share)										$ 0.0001				$ 0.0001	$ 0.0925		$ 0.0001		$ 0.0001	$ 0.0925	¥ 0.62
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
Annual rental expense | ¥		¥ 2,280,000
SUBSEQUENT EVENTS | Guangxi Recon Renewable Resources Technology Co., Ltd | Recon-IN
SUBSEQUENT EVENTS
Capital | $																$ 30,000,000.0
Paid in capital | $											$ 1,000,000.0					$ 1,000,000.0
SUBSEQUENT EVENTS | Bank of Kunlun Co., Ltd. Tuha Branch | Legal contingencies
SUBSEQUENT EVENTS
Bank deposits of respondents seized and freezed | ¥													¥ 848,935.63
SUBSEQUENT EVENTS | Bank of Kunlun Co., Ltd. Tuha Branch | Gan Su BHD Environmental Technology Co., Ltd | Legal contingencies
SUBSEQUENT EVENTS
Principal amount | ¥												¥ 818,730.95
Interest amount of loan | ¥												¥ 199.51
Interest rate (as a percent)												9.00%
Attorney fees | ¥												¥ 30,000
Preservation agency fee | ¥												¥ 4,765
SUBSEQUENT EVENTS | Class A Ordinary Shares | Depository Trust Company
SUBSEQUENT EVENTS
Shares requested to transfer agent to issue		54,727
SUBSEQUENT EVENTS | Class A Ordinary Shares | Restricted shares
SUBSEQUENT EVENTS
Stock Options, Shares, Granted			6,255,483
Stock Options, Shares, Granted value | $			$ 988,366
Stock Options, Shares, Granted (per share) | $ / shares			$ 0.158
SUBSEQUENT EVENTS | Class A Ordinary Shares | Restricted shares | Post 2024 Reverse Stock Split
SUBSEQUENT EVENTS
Stock Options, Shares, Granted			347,527
Stock Options, Shares, Granted (per share) | $ / shares			$ 2.844
SUBSEQUENT EVENTS | Class A Ordinary Shares | Private Placement
SUBSEQUENT EVENTS
Stock issuance (in shares)				100,000,000
Stock price | $ / shares				$ 0.11
Stock issuance | $				$ 11,000,000
SUBSEQUENT EVENTS | Class A Ordinary Shares | Private Placement | Post 2024 Reverse Stock Split
SUBSEQUENT EVENTS
Stock issuance (in shares)								5,555,559
Stock price | $ / shares								$ 1.98
SUBSEQUENT EVENTS | Class B ordinary shares | Restricted shares
SUBSEQUENT EVENTS
Stock Options, Shares, Granted			12,900,000
Stock Options, Shares, Granted value | $			$ 2,130,000
Stock Options, Shares, Granted (per share) | $ / shares			$ 0.17

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Additional Information (Details)	Dec. 31, 2023
VIE | Maximum
Condensed financial information of the parent company
Percent of consolidated net assets	25.00%

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company balance sheets (Details)		Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 CNY (¥)	Jun. 30, 2022 CNY (¥)
Total assets:
Cash		¥ 121,848,777	$ 17,162,041	¥ 104,125,800
Short-term investments		134,000,000.0	18,866,554	184,184,455
Due from intercompany		4,184,778	589,414	2,185,733
Total current assets		425,059,299	59,868,349	504,413,173
Non-current assets
Total Assets		483,256,229	68,065,215	531,824,577
LIABILITIES AND SHAREHOLDERS' EQUITY
Other current liabilities		1,688,166	237,773	5,819,010
Warrant liability - current		8,519,880	1,200,000
Total Current Liabilities		66,866,018	9,417,880	61,032,862
Warrant liability - non-current		993,986	140,000	31,615,668
Total Liabilities		67,885,873	9,561,524	92,673,674
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Additional paid-in capital	[1]	584,275,905	82,293,540	580,340,061
Accumulated deficit		(192,994,848)	(27,182,756)	(170,440,826)
Accumulated other comprehensive loss		30,517,774	4,298,339	35,127,173
Total shareholders' equity		425,980,244	59,998,062	449,206,962
Total Liabilities and Equity		483,256,229	68,065,215	531,824,577
Class A ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		27,791	3,914	26,932
Class B ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		4,693	661	4,693
RECON TECHNOLOGY LTD
Total assets:
Cash		34,657,271	4,881,375	236,146,589	$ 33,260,551	¥ 183,517,938	¥ 296,838,959
Short-term investments		115,950,650	16,331,307
Due from intercompany		356,442,080	50,203,817	291,525,426
Other current assets		52,568,829	7,404,165	80,036,017
Total current assets		559,618,830	78,820,664	607,708,032
Non-current assets
Investment in subsidiaries and VIEs		(122,676,150)	(17,278,574)	(122,920,490)
Total Assets		436,942,680	61,542,090	484,787,542
LIABILITIES AND SHAREHOLDERS' EQUITY
Other current liabilities		1,448,570	204,027	3,964,912
Warrant liability - current		8,519,880	1,200,000
Total Current Liabilities		9,968,450	1,404,027	3,964,912
Warrant liability - non-current		993,986	140,000	31,615,668
Total Liabilities		10,962,436	1,544,027	35,580,580
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Additional paid-in capital		584,275,905	82,293,540	580,340,061
Accumulated deficit		(188,845,919)	(26,598,391)	(166,291,897)
Accumulated other comprehensive loss		30,517,774	4,298,339	35,127,173
Total shareholders' equity		425,980,244	59,998,063	449,206,962
Total Liabilities and Equity		436,942,680	61,542,090	484,787,542
RECON TECHNOLOGY LTD | Class A ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		27,791	3,914	26,932
RECON TECHNOLOGY LTD | Class B ordinary shares [Member]
SHAREHOLDERS' EQUITY
Common stock value		¥ 4,693	$ 661	¥ 4,693

[1] *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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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company balance sheets - Additional information (Details)			6 Months Ended
	May 01, 2024 shares	Mar. 29, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares	Mar. 28, 2024 $ / shares shares	Oct. 16, 2023 shares	Oct. 10, 2023 shares	Jun. 30, 2023 $ / shares shares	Mar. 15, 2023 $ / shares	Dec. 31, 2022 $ / shares shares	Jun. 14, 2021 $ / shares	Apr. 05, 2021 $ / shares shares	Apr. 05, 2021 ¥ / shares shares
Parent company balance sheets
Ordinary shares, shares outstanding	7,927,132
Reverse stock split	0.056		0.2
Class A ordinary shares [Member]
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001	$ 0.0001	$ 0.0925			$ 0.0001	$ 0.0925	$ 0.0001	$ 0.0925	$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		500,000,000	500,000,000	150,000,000			500,000,000		500,000,000		150,000,000	150,000,000
Ordinary shares, shares issued			2,371,573		1,175,000		2,306,295		1,704,766
Ordinary shares, shares outstanding	141,703,218		2,371,573			1,175,000	2,306,295		1,704,766
Reverse stock split	0.056	0.056
Class A ordinary shares [Member] | RECON TECHNOLOGY LTD
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | $ / shares			$ 0.0001				$ 0.0001
Ordinary shares, shares authorized			500,000,000				500,000,000
Ordinary shares, shares issued			2,371,573				2,306,295
Ordinary shares, shares outstanding			2,371,573				2,306,295
Class B ordinary shares [Member]
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | (per share)		$ 0.0001	$ 0.0001	$ 0.0925			$ 0.0001		$ 0.0001		$ 0.0925	¥ 0.62
Ordinary shares, shares authorized		80,000,000	80,000,000	20,000,000			80,000,000		80,000,000		20,000,000	20,000,000
Ordinary shares, shares issued			7,100,000				7,100,000		4,100,000
Ordinary shares, shares outstanding			7,100,000				7,100,000		4,100,000
Class B ordinary shares [Member] | RECON TECHNOLOGY LTD
Parent company balance sheets
Ordinary shares, par value (in dollars per share) | $ / shares			$ 0.0001				$ 0.0001
Ordinary shares, shares authorized			80,000,000				80,000,000
Ordinary shares, shares issued			7,100,000				7,100,000
Ordinary shares, shares outstanding			7,100,000				7,100,000

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company statements of operations and comprehensive loss (Details)	6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)
Parent Company Statements Of Operations And Comprehensive Loss
Revenue	$ 6,374,269	¥ 45,256,672	¥ 45,559,591
Cost of revenue	4,669,211	33,150,930	32,427,772
Gross profit	1,705,058	12,105,742	13,131,819
General and administrative expenses	3,104,557	22,042,042	26,212,540
Provision for credit losses	218,787	1,553,364	(7,141,708)
Loss from operations	3,211,605	22,802,066	15,070,214
Gain (loss) in fair value changes of warrants liability	(1,473,412)	(10,461,075)	(20,097,665)
Other income (expenses)	(1,225,550)	(8,701,288)	157,753
Net loss	(3,254,673)	(23,107,851)	(29,872,691)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Foreign currency translation adjustment	(649,220)	(4,609,399)	9,663,701
Comprehensive loss attributable to Recon Technology, Ltd	(3,825,888)	(27,163,421)	(20,212,717)
RECON TECHNOLOGY LTD
Parent Company Statements Of Operations And Comprehensive Loss
General and administrative expenses	1,647,763	11,698,953	16,054,522
Loss from operations	1,647,763	11,698,953	16,054,522
Gain (loss) in fair value changes of warrants liability	(273,412)	(1,941,195)	(20,097,665)
Other income (expenses)	(135,253)	(960,280)	3,716,168
Equity in earnings of subsidiaries, vies and vies' subsidiaries	(1,120,366)	(7,954,486)	2,559,601
Net loss	(3,176,794)	(22,554,914)	(29,876,418)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Foreign currency translation adjustments related to investments in subsidiaries, VIEs and VIEs' subsidiaries	(649,220)	(4,609,399)	9,663,701
Comprehensive loss attributable to Recon Technology, Ltd	$ (3,826,014)	¥ (27,164,313)	¥ (20,212,717)

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Parent company statements of cash flows (Details)	6 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2022 CNY (¥)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,254,673)	¥ (23,107,851)	¥ (29,872,691)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Restricted shares issued for management and employees	403,747	2,866,560	1,796,417
Accrued interest income from loans to third parties	(621,882)	(4,415,298)	(3,757,041)
Accrued interest income from short-term investment	(331,307)	(2,352,250)	0
Restricted shares issued for services	150,726	1,070,143	4,304,857
Net cash used in operating activities	(930,972)	(6,609,801)	(25,931,236)
Cash flows from investing activities:
Repayments from loans to third parties	6,283,743	44,613,948	25,194,900
Payments made for loans to third parties	(2,338,061)	(16,600,000)	(58,488,100)
Payments for short-term investments	(18,535,247)	(131,598,400)	0
Net cash (used in) generated by investing activities	8,670,274	61,558,080	(34,082,522)
Cash flows from financing activities:
Redemption of warrants	(4,488,317)	(31,866,604)	0
Net cash provided by (used in) financing activities	(4,508,207)	(32,007,826)	1,523,073
Effect of exchange rate fluctuation on cash	(837,352)	(5,945,117)	10,633,748
Net increase (decrease) in cash	2,393,743	16,995,336	(47,856,937)
Cash at beginning of period		104,125,800
Cash at end of period	17,162,041	121,848,777
RECON TECHNOLOGY LTD
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	(3,176,794)	(22,554,914)	(29,876,418)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Loss (gain) in fair value changes of warrants liability	1,473,412	10,461,075	20,097,665
Restricted shares issued for management and employees	403,747	2,866,560	1,796,417
Accrued interest income from loans to third parties	(435,000)	(3,088,457)
Accrued interest income from short-term investment	(331,307)	(2,352,250)
Restricted shares issued for services	150,727	1,070,144	4,304,857
Equity in earnings of subsidiaries and VIEs	1,120,366	7,954,486	(2,559,601)
Other current assets	1,026,645	7,289,074	(14,166,457)
Other current liabilities	(354,421)	(2,516,342)	(1,080,736)
Net cash used in operating activities	(122,624)	(870,624)	(21,484,273)
Cash flows from investing activities:
Repayments from loans to third parties	3,500,000	24,849,650	20,694,900
Payments made for loans to third parties			(48,288,100)
Payments for short-term investments	(16,000,000)	(113,598,400)
Due from intercompany, VIEs and VIEs' subsidiaries	9,143,319	64,916,652	80,522,546
Net cash (used in) generated by investing activities	(21,643,319)	(153,665,402)	(108,115,746)
Cash flows from financing activities:
Redemption of warrants	(4,488,317)	(31,866,604)
Net cash provided by (used in) financing activities	(4,488,317)	(31,866,604)
Effect of exchange rate fluctuation on cash	(2,124,916)	(15,086,688)	16,278,998
Net increase (decrease) in cash	(28,379,176)	(201,489,318)	(113,321,021)
Cash at beginning of period	33,260,551	236,146,589	296,838,959
Cash at end of period	$ 4,881,375	¥ 34,657,271	¥ 183,517,938