Recon Technology, Ltd Reports Financial Year Results for Fiscal Year 2024
BEIJING, Oct. 30, 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 fiscal year 2024.
Fiscal Year Ended June 30, 2024 Financial Highlights:
-- Total revenue increase by approximately RMB1.7 million ($0.2 million) or
2.6% to RMB68.8 million ($9.5 million) for the year ended June 30, 2024
from RMB67.1million ($9.2 million) for the same period in 2023.
-- Gross profit increased to RMB20.9 million ($2.9 million) for the year
ended June 30, 2024, from RMB18.9 million ($2.6 million) for the same
period in 2023.
-- Gross margin increased to 30.3% for the year ended June 30, 2024 from
28.1% for the same period in 2023.
-- Net loss was RMB51.4 million ($7.1 million) for the year ended June 30,
2024, a decrease of RMB10.0 million ($1.4 million) from net loss of
RMB61.4 million ($8.5 million) for the same period of 2023.
For the Years Ended
June 30,
2024 2023 Increase
/(Decrease) Percentage
Change
(in RMB millions, except earnings per share;
differences due to rounding)
Revenue RMB 68.8 RMB 67.1 RMB 1.7 2.6
%
Gross profit 20.9 18.9 2.0 10.7
%
Gross margin 30.3 28.1 2.2
% % %
Net loss (51.4) (61.4) (10.0) (16.3)
%
Net loss per share - Basic and diluted (9.88) (27.43) 17.55 (64.0)
%
Management Commentary
Mr. Shenping Yin, Founder and CEO of Recon said, "Fiscal year ended 2024 was a year of change, challenge and opportunity for Recon. As the economy gradually recovers, our established business volume has gradually increased, leading to an overall rise in revenue by the end of fiscal year 2024.Our gross margins improved due to improved management efficiency and the expansion of new business with high gross margins.
We believe that China's investment and demand in the oil industry will not decrease in the near future, and we believe that there are still many opportunities for growth in the oil industry. Recon will continue to benefit from this trend. We expect a significant increase in the volume of business in the oilfield services segment in the coming year. We are also expanding our business focus from oilfield service segment to broader energy sectors, including carbon-zero opportunities and alternative materials for primary petroleum products. We are actively exploring the chemical recycling business of low-value plastics based on waste treatment and recycling, and have reached preliminary cooperation agreements and market expansion and sales intentions with key upstream and downstream customers. Our drive has always been to maximize the long-term benefits for our company and our shareholders based on our experience and resources in the petrochemical and energy industries."
Fiscal Year Ended 2024 Financial Results:
Revenue
Total revenues for the year ended June 30, 2024 were approximately RMB68.8 million ($9.5 million), an increase of approximately RMB1.7 million ($0.2 million) or 2.6% from RMB67.1 million ($9.2 million) for the same period in 2023.
-- Revenue from automation product and software increased by RMB0.2 million
($0.03 million) or 0.8%. For the year ended June 30, 2024, 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 RMB5.8
million ($0.8 million). However, due to the recovery of oilfield
production, sales to oilfield customers increased by RMB6.0 million
($0.8 million). Thus, our revenue from automation product and software
business increased slightly overall. We anticipate that revenue from the
electronic business will resume and revenue will recover.
-- Revenue from equipment and accessories increased by RMB4.2 million
($0.6million) or 26.0%. The increase in revenue was driven by the
continued growth of our oilfield business and the successful expansion
of our offshore oilfield services.
-- Revenue from oilfield environmental protection decreased by RMB1.5
million ($0.2 million) or 8.1%. 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 26, 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.
-- Revenue from platform outsourcing services decreased by RMB1.1 million
($0.2 million) or 22.4%. 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.
-- As of June 30, 2024, the factory for the chemical recycling is still
under construction and has not started production and sales yet.
Cost of revenue
Cost of revenues decreased from RMB48.2 million for the year ended June 30, 2023 to RMB48.0 million ($6.6 million) for the same period in 2024.
For the years ended June 30, 2023 and 2024, cost of revenue from automation product and software was approximately RMB23.6 million ($3.2 million) and RMB23.9 million ($3.3 million), respectively, representing increase of approximately RMB0.3 million ($0.04 million) or 1.1%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software.
For the years ended June 30, 2023 and 2024, cost of revenue from equipment and accessories was approximately RMB8.9 million ($1.2 million) and RMB14.1 million ($1.9 million), respectively, representing an increase of approximately RMB5.2million ($0.7million) or 57.6%. The increase in cost of revenue from equipment and accessories was primarily attributable to increased revenue of equipment and accessories.
For the years ended June 30, 2023 and 2024, cost of revenue from oilfield environmental protection was approximately RMB14.0 million ($1.9 million) and RMB9.2 million ($1.3 million), respectively, representing a decrease of approximately RMB4.7 million ($0.6 million) or 33.8%. 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 years ended June 30, 2023 and 2024, cost of revenue from platform outsourcing services was approximately RMB1.7 million ($0.2 million) and RMB0.6 million ($0.1 million), respectively, representing a decrease of approximately RMB1.1 million ($0.2 million) or 63.2%. The primary reasons for the decrease in cost of revenue are the company's efforts to reduce costs through staff layoffs and salary reductions, as well as the discontinuation of server leasing due to the transition from operational to maintenance services.
For the years ended June 30, 2023 and 2024, cost of revenue from chemical recycling was nil and RMB0.1 million ($0.02 million), which was business and sales related tax. As of June 30, 2024, the factory for the chemical recycling is still under construction and has not started production and sales yet.
Gross profit
Gross profit increased to RMB20.9 million ($2.9 million) for the year ended June 30, 2024 from RMB18.9 million ($2.6 million) for the same period in 2023. Our gross profit as a percentage of revenue increased to 30.3% for the year ended June 30, 2024 from 28.1% for the same period in 2023.
-- For the years ended June 30, 2023 and 2024, our gross profit from
automation product and software was approximately RMB3.0 million ($0.4
million) and RMB3.0 million ($0.4 million), respectively, representing a
decrease in gross profit of approximately RMB0.1 million ($0.01million)
or 1.7%. The gross margin for automation product and software has
remained relatively stable in this period.
-- For the years ended June 30, 2023 and 2024, gross profit from equipment
and accessories was approximately RMB7.3 million ($1.0 million) and
RMB6.4 million ($0.9 million), respectively, representing a slight
decrease of approximately RMB0.9 million ($0.1 million) or 12.7%. 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 years ended June 30, 2023 and 2024, gross profit from oilfield
environmental protection was approximately RMB5.2 million ($0.7 million)
and RMB8.3 million ($1.1 million), respectively, representing an
increase of RMB3.2 million ($0.4 million) or 61.5%. We have carried out
the residual oil recovery service, The business line assists oilfield
companies recover residual oils, including aged oil and spilled oil
through our unique formula and equipment to enhance the profitability
for oilfield companies. This business contributes a relatively high
gross margin.
-- For the years ended June 30, 2023 and 2024, gross profit from platform
outsourcing services was approximately RMB3.4 million ($0.5 million) and
RMB3.3 million ($0.5 million), respectively, representing a decrease of
approximately RMB0.05 million ($0.01 million) or 1.5 %, The gross margin
for platform outsourcing services has remained relatively stable in this
period
For the years ended June 30, 2023 and 2024, gross profit losses from chemical recycling was nil and RMB0.1 million ($0.02 million), respectively. As of June 30, 2024, the factory for the chemical recycling remains under construction and has not started production and sales yet.
Operating expenses
Selling expenses decreased by 2.5%, or RMB0.3 million ($0.04 million), from RMB10.6 million ($1.5 million) in the year ended June 30, 2023 to RMB10.4 million ($1.4 million) in the same period of 2024.
General and administrative expenses decreased by 17.0%, or RMB13.0 million ($1.8 million), from RMB76.8 million ($10.6 million) in the year ended June 30, 2023 to RMB63.8 million ($8.8 million) in the same period of 2024.
Net recovery of credit losses of RMB9.0 million ($1.2 million) for the year ended June 30, 2023 as compared to net provision for credit losses of RMB4.1 million ($0.6 million) for the same period in 2024.
Research and development expenses remained relatively stable with an increase by 62.3%, or RMB5.5 million ($0.8 million) from RMB8.8 million ($1.2 million) for the year ended June 30, 2023 to RMB14.3 million ($2.0 million) for the same period of 2024.
Impairment loss of property and equipment and other long-lived assets decreased by100.0%, or RMB1.0 million ($0.1 million), from RMB1.0 million ($0.1 million) in the year ended June 30, 2023 to nil in the same period of 2024.
Loss from operations
Loss from operations was RMB71.6 million ($9.9 million) for the year ended June 30, 2024, compared to a loss of RMB69.3 million ($9.5 million) for the same period of 2023. This RMB2.3 million ($0.3 million) increase in loss from operations was primarily due to the increase in operating expense as discussed above.
Change in fair value changes of warrant liability
The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Gain in change in fair value of warrant liability was RMB6.1 million ($0.8 million) and RMB0.8 million ($0.1million) for the years ended June 30, 2023 and 2024, 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 RMB1.7 million ($0.2 million), was recognized as loss in fair value changes of warrant liability. The aforementioned gain of RMB0.8 million ($0.1 million) from fair value changes of warrant liability and the loss of RMB1.7 million ($0.2 million) from fair value changes of warrant liability combine to result in a net loss of RMB0.9 million ($0.1 million) in fair value changes of warrant liability.
Impairment loss on goodwill and intangible assets
The Company recognized the excess of purchase price over the fair value of assets acquired and liabilities assumed of the business acquired was recorded as goodwill and fair value of identified intangible assets, which is customer relationship as a result of the step acquisition of FGS. In conjunction with the preparation of our consolidated financial statement for years ended June 30, 2023 and 2024, the management performed evaluation on the impairment of goodwill and intangible assets and recorded an impairment loss on goodwill and intangible assets of RMB10.0 million ($1.4 million) and nil for the years ended June 30, 2023 and 2024, respectively. As of June 30, 2023, goodwill and intangible assets of FGS had fully accrued for impairment. The impairment was mainly due to the decision of the major customers to develop their own autonomous unified system and to significantly reduce the procurement of third-party services. This change has had a significant and negative impact on FGS's business model and enterprise value. We are currently working to find new ways and channels of cooperation to enhance the FGS business.
Interest income
Net interest income was RMB21.8 million ($3.0 million) for the year ended June 30, 2024, compared to net interest income of RMB11.1 million ($1.5 million) for the same period of 2023. The RMB10.7 million ($1.5 million) increase in net interest income was primarily due to the increased interest-bearing loans to third parties and increased short-term investments we invested during the year ended June 30, 2024.
Other income (expenses), net.
Other net expenses was RMB0.7 million ($0.1 million) for the year ended June 30, 2024, compared to other net income of RMB0.7 million ($0.1 million) for the same period of 2023. The RMB1.3 million ($0.2 million) decrease other net income was primarily due to a decrease in subsidy income of RMB0.2 million. The decrease in other net income was also attributable to an increase in foreign exchange transaction loss of RMB1.1 million ($0.2 million) due to the fluctuation of exchange rate of RMB against US dollars during the year ended June 30, 2024 compared to the same period of 2023.
Net loss
As a result of the factors described above, net loss was RMB51.4 million ($7.1 million) for the year ended June 30, 2024, a decrease of RMB10.0 million ($1.4 million) from net loss of RMB61.4 million ($8.5 million) for the same period of 2023.
Cash and short-term investment
As of June 30, 2024, we had cash in the amount of approximately RMB110.0 million ($15.1million) and short-term investment in bank fixed income product of approximately RMB88.1 million ($12.1 million). As of June 30, 2023, we had cash in the amount of approximately RMB104.1 million ($14.3 million) and short-term investment in bank fixed income product of approximately RMB184.2 million ($25.3 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
RECON TECHNOLOGY, LTD
CONSOLIDATED BALANCE SHEETS
As of June, 30 As of June, 30 As of June, 30
2023 2024 2024
RMB RMB US Dollars
ASSETS
Current assets
Cash YEN 104,125,800 YEN 109,991,674 $
15,135,358
Restricted cash 731,545 848,936 116,817
Short-term investments 184,184,455 88,091,794 12,121,834
Notes receivable 3,742,390 1,341,820 184,641
Accounts receivable, net 27,453,415 38,631,762 5,315,907
Inventories, net 6,330,701 1,128,912 155,343
Other receivables, net 2,185,733 3,352,052 461,258
Other receivables- related parties 275,976 37,976
Loans to third parties 123,055,874 208,928,370 28,749,500
Purchase advances, net 2,680,456 5,156,550 709,565
Contract costs, net 49,572,685 48,335,817 6,651,230
Prepaid expenses 350,119 401,586 55,260
Total Current Assets 504,413,173 506,485,249 69,694,689
Property and equipment, net 24,752,864 22,137,940 3,046,282
Construction in progress 219,132 30,154
Long-term other receivables, net 3,640
Operating lease right-of-use assets, net (including YEN335,976 and YEN1,769,840 ($243,538) from a related 2,654,900 23,547,193 3,240,202
party as of June 30, 2023 and June 30, 2024, respectively)
Total Assets YEN 531,824,577 YEN 552,389,514 $
76,011,327
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans YEN 12,451,481 YEN 12,425,959 $
1,709,869
Accounts payable 10,791,721 10,187,518 1,401,849
Other payables 5,819,010 2,769,685 381,121
Other payable- related parties 2,592,395 2,299,069 316,362
Contract liabilities 2,748,365 1,820,481 250,507
Accrued payroll and employees' welfare 2,382,516 3,237,164 445,449
Taxes payable 1,163,006 993,365 136,692
Short-term borrowings - related parties 20,018,222 10,002,875 1,376,441
Operating lease liabilities - current (including YEN335,976 and YEN1,775,114 ($244,264) from a related 3,066,146 3,741,247 514,812
party as of June 30, 2023 and June 30, 2024, respectively)
Total Current Liabilities 61,032,862 47,477,363 6,533,102
Operating lease liabilities - non-current (including YENnil and YEN335,976 ($46,232) from a related party as 25,144 3,971,285 546,467
of June 30, 2023 and June 30, 2024, respectively)
Long-term borrowings - related party 10,000,000 1,376,046
Warrant liability - non-current 31,615,668 6,969 959
Total Liabilities 92,673,674 61,455,617 8,456,574
Commitments and Contingencies
Shareholders' Equity
Class A ordinary shares, $0.0001 U.S. dollar par value, 500,000,000 shares authorized; 2,306,295 26,932 99,634 13,710
shares and 7,987,959 shares issued and outstanding as of June 30, 2023 and June 30, 2024,
respectively*
Class B ordinary shares, $0.0001 U.S. dollar par value, 80,000,000 shares authorized; 7,100,000 shares 4,693 4,693 646
and 7,100,000 shares issued and outstanding as of June 30, 2023 and June 30, 2024, respectively*
Additional paid-in capital* 580,340,061 681,476,717 93,774,317
Statutory reserve 4,148,929 4,148,929 570,912
Accumulated deficit (170,440,826) (220,312,085) (30,315,952)
Accumulated other comprehensive income 35,127,173 37,136,649 5,110,173
Total Recon Technology, Ltd' equity 449,206,962 502,554,537 69,153,806
Non-controlling interests (10,056,059) (11,620,640) (1,599,053)
Total shareholders' equity 439,150,903 490,933,897 67,554,753
Total Liabilities and Shareholders' Equity YEN 531,824,577 YEN 552,389,514 $
76,011,327
* 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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the years ended
June 30,
2022 2023 2024 2024
RMB RMB RMB US Dollars
Revenue
Revenue - third parties YEN 83,777,571 YEN 67,114,378 YEN 68,854,280 $
9,474,664
Revenue 83,777,571 67,114,378 68,854,280 9,474,664
Cost of revenue
Cost of revenue - third parties 64,352,834 48,247,395 47,976,836 6,601,832
Cost of revenue 64,352,834 48,247,395 47,976,836 6,601,832
Gross profit 19,424,737 18,866,983 20,877,444 2,872,832
Selling and distribution expenses 10,150,802 10,638,978 10,374,388 1,427,563
General and administrative expenses 83,281,958 76,784,396 63,765,583 8,774,436
Allowance for (net recovery of) credit losses (658,823) (9,038,985) 4,086,505 562,322
Impairment loss of property and equipment and other long-lived assets 1,009,124
Research and development expenses 8,964,217 8,806,205 14,288,879 1,966,215
Operating expenses 101,738,154 88,199,718 92,515,355 12,730,536
Loss from operations (82,313,417) (69,332,735) (71,637,911) (9,857,704)
Other income (expenses)
Subsidy income 11,993 325,425 131,428 18,085
Interest income 5,367,979 13,603,487 22,897,763 3,150,837
Interest expense (1,522,526) (2,514,850) (1,070,449) (147,299)
Income from investment in unconsolidated entity 15,411
Gain (loss) in fair value changes of warrants liability 174,485,575 6,116,000 (933,995) (128,522)
Foreign exchange transaction gain (loss) (118,456) 241,652 (881,695) (121,325)
Impairment loss on goodwill and intangible assets (2,266,893) (9,980,002)
Other income 15,855 82,970 59,049 8,126
Other income, net 175,988,938 7,874,682 20,202,101 2,779,902
Income (loss) before income tax 93,675,521 (61,458,053) (51,435,810) (7,077,802)
Income tax expenses (benefit) (613,874) 18,339 30 4
Net income (loss) 94,289,395 (61,476,392) (51,435,840) (7,077,806)
Less: Net loss attributable to non-controlling interests (1,297,400) (2,309,091) (1,564,581) (215,294)
Net income (loss) attributable to Recon Technology, Ltd YEN 95,586,795 YEN (59,167,301) YEN (49,871,259) $
(6,862,512)
Comprehensive income (loss)
Net income (loss) 94,289,395 (61,476,392) (51,435,840) (7,077,806)
Foreign currency translation adjustment 9,332,625 23,819,712 2,009,476 276,513
Comprehensive income (loss) 103,622,020 (37,656,680) (49,426,364) (6,801,293)
Less: Comprehensive loss attributable to non- controlling interests (1,297,400) (2,309,091) (1,564,581) (215,294)
Comprehensive income (loss) attributable to Recon Technology, YEN 104,919,420 YEN (35,347,589) YEN (47,861,783) $
(6,585,999)
Ltd
Earnings (loss) per share - basic and diluted* YEN 55.52 YEN (27.43) YEN (9.88) $
(1.36)
Weighted - average shares -basic and diluted* 1,721,529 2,157,158 5,048,952 5,048,952
* Retrospectively restated for the 1-for-18 reverse stock split on May 1, 2024.
RECON TECHNOLOGY, LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30,
2022 2023 2024 2024
RMB RMB RMB U.S. Dollars
Cash flows from operating activities:
Net income (loss) YEN 94,289,395 YEN (61,476,392) YEN (51,435,840) $
(7,077,806)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization 3,339,868 3,683,586 2,844,025 391,351
Loss (gain) from disposal of property and equipment 48,628 (12,782) 35,325 4,861
(Gain) loss in fair value changes of warrants liability (174,485,575) (6,116,000) 933,995 128,522
Amortization of offering cost of warrants 1,483,306
Allowance for (net recovery of) credit losses (658,823) (9,038,985) 4,086,505 562,322
Allowance for slow moving inventories 266,285 484,644 886,991 122,054
Impairment loss of property and equipment and other long-lived assets 1,009,124
Impairment loss on goodwill and intangible assets 2,266,893 9,980,002
Amortization of right of use assets 3,138,518 3,252,066 1,636,215 225,151
Restricted shares issued for management and employees 39,263,485 26,191,707 22,427,682 3,086,152
Restricted shares issued for services 8,935,919 5,805,840 1,070,143 147,257
Income from investment in unconsolidated entity (15,411)
Deferred tax benefit (624,087)
Accrued interest income from loans to third parties (270,563) (7,997,961) (6,998,866) (963,076)
Accrued interest income from short-term investment (2,901,955) (885,394) (121,834)
Changes in operating assets and liabilities:
Notes receivable (4,522,674) 7,085,917 2,400,570 330,329
Accounts receivable 3,811,866 (495,784) (12,151,359) (1,672,083)
Inventories (689,291) (2,373,013) 5,590,058 769,218
Other receivables 285,786 (1,307,694) 31,908 4,391
Other receivables-related parties (64,122) (275,976) (37,976)
Purchase advances 865,430 (2,575,198) (2,422,123) (333,295)
Contract costs 15,422,513 (14,236,539) (4,400,442) (605,521)
Prepaid expense (274,215) 70,164 (51,467) (7,082)
Prepaid expense - related parties 158,000 275,000
Operating lease liabilities (1,594,702) (3,061,303) (2,907,014) (400,018)
Accounts payable (5,523,938) (1,710,898) (604,203) (83,141)
Other payables (6,329,042) 2,270,104 (3,020,216) (415,597)
Other payables-related parties 969,468 352,260 (293,326) (40,363)
Contract liabilities (5,578,999) 641,087 (927,884) (127,681)
Accrued payroll and employees' welfare 296,065 131,971 854,644 117,603
Taxes payable 961,964 (1,036,483) (171,884) (23,652)
Net cash used in operating activities (26,247,237) (51,688,331) (43,747,933) (6,019,914)
Cash flows from investing activities:
Purchases of property and equipment (692,206) (940,673) (282,184) (38,830)
Proceeds from disposal of property and equipment 31,950 20,000 2,752
Purchase of land use right (15,000,251) (2,064,103)
Repayments of loans to third parties 171,435,032 40,113,311 117,522,129 16,171,583
Payments made for loans to third parties (171,071,510) (103,146,761) (196,437,504) (27,030,700)
Payments and prepayments for construction in progress (219,132) (30,154)
Payments for short-term investments (290,051,964) (203,481,600) (28,000,000)
Redemption of short-term investments 108,769,464 300,863,518 41,400,198
Net cash
(
used in
) provided by
investing activities (328,684) (245,224,673) 2,984,976 410,746
Cash flows from financing activities:
Proceeds from short-term bank loans 10,000,000 13,491,481 11,581,000 1,593,599
Repayments of short-term bank loans (15,000,000) (11,040,000) (11,632,755) (1,600,720)
Repayments of short-term borrowings (530,000)
Proceeds from short-term borrowings-related parties 11,100,000 15,013,115 10,000,000 1,376,046
Repayments of short-term borrowings-related parties (14,770,000) (9,000,000) (10,018,222) (1,378,553)
Repayments of long-term borrowings-related party (892,701) (1,499,667)
Proceeds from warrants issued with common stock 17,493,069
Proceeds from sale of ordinary shares, net of issuance costs 28,174,993 77,711,533 10,693,463
Proceeds from sale of prefunded warrants, net of issuance costs 93,321 3,750,282
Redemption of warrants (32,617,499) (4,488,317)
Net cash (used in)
provided by
financing activities (9,999,380) 56,383,273 45,024,057 6,195,518
Effect of exchange rate fluctuation on cash and restricted cash 10,275,148 27,688,659 1,722,165 236,978
Net increase (decrease) in cash and restricted cash (26,300,153) (212,841,072) 5,983,265 823,328
Cash and restricted cash at beginning of year 343,998,570 317,698,417 104,857,345 14,428,851
Cash and restricted cash at end of year YEN 317,698,417 YEN 104,857,345 YEN 110,840,610 $
15,252,179
Supplemental cash flow information
Cash paid during the year for interest YEN 1,427,174 YEN 1,200,699 YEN 659,472 $
90,945
Cash paid during the year for taxes YEN 10,214 YEN 18,339 YEN 2,137,166 $
294,729
Reconciliation of cash and restricted cash, beginning of year
Cash YEN 343,998,570 YEN 316,974,857 YEN 104,125,800 $
14,328,187
Restricted cash 723,560 731,545 100,664
Cash and restricted cash, beginning of year YEN 343,998,570 YEN 317,698,417 YEN 104,857,345 $
14,428,851
Reconciliation of cash and restricted cash, end of year
Cash YEN 316,974,857 YEN 104,125,800 YEN 109,991,674 $
15,135,362
Restricted cash 723,560 731,545 848,936 116,817
Cash and restricted cash, end of year YEN 317,698,417 YEN 104,857,345 YEN 110,840,610 $
15,252,179
Non-cash investing and financing activities
Cancellation of shares issued to Starry Lab YEN (27,675,450) YEN YEN
$
Right-of-use assets obtained in exchange for operating lease obligations YEN 937,672 YEN 75,182 YEN 8,303,099 $
1,145,050
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement YEN YEN 62,357 YEN 61,301 $
8,454
Inventories transferred to and used as fixed assets YEN YEN (65,456) YEN
$
Receivable for disposal of property and equipment YEN 3,000 YEN YEN
$
Other payable due to non-controlling interest converted into capital contribution YEN 1,130,000 YEN YEN
$
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SOURCE Recon Technology, Ltd
