BEIJING, Feb. 8, 2021 /PRNewswire/ -- Recon Technology,
Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), today announced
that two of its subsidiaries entered into the fourth supplemental
agreement to the investment agreement with Future Gas Station
(Beijing) Technology, Ltd ("FGS")
and FGS' founding shareholders on February
4, 2021 to acquire 8% equity ownership of FGS. The
transaction has been closed. As a result, the Company owns 51%
interest of FGS and will immediately begin to consolidate the
financial results of FGS from January
2021, which will be reflected in the Company's year-end
financial results.
FGS is a service company focusing on providing new technical
applications and data operations to gas stations. On December 15, 2017, the Company entered into a
subscription agreement with FGS, pursuant to which the Company
acquired an 8% equity interest in FGS. On August 21, 2018, the Company 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, the Company's ownership
interest in FGS increased from 8% to 43%, in exchange for the
Company's RMB 10 million investment
in FGS and the issuance of 487,060 restricted shares of Recon
(reflecting the effect of one-for-five reverse stock split) to the
other shareholders of FGS. The restricted shares were subject to
lock-up terms associated with certain performance goals. Pursuant
to the second and the third supplemental agreements signed in 2019
and 2020, the parties extended the lock-up terms and the deadlines
to meet the associated performance goals. Through the fourth
supplemental agreement, the Company waived the requirement on FGS'
performances goal about the number of gas stations. Accordingly,
the Company agreed to pay for the balance of the investment and
cancelled the related lock-up terms on the restricted shares, in
exchange of additional 8% equity ownership of FGS.
As of January 31, 2021, the
accumulated gross merchandise volume through FGS' mobile
application, and mini programs on WeChat (a Chinese multi-purpose messaging,
social media and mobile payment application) and Alipay (a
third-party mobile and online payment platform) was above
RMB4.34 billion (approximately
$674 million), there were over 5.1
million registered users of FGS system, and the registered users of
making more than one order accounted for about 45% of the
registered users who ever ordered through FGS system. From the
Company's initial investment in FGS in December 2017 to January
31, 2021, the average per order amount that the FGS users
paid was about RMB217.00
(approximately $33.6).
Management Commentary
Recon CEO and founder, Mr. Yin Shenping, said, "We hope that
together with FGS' founders we will be able to help FGS enter into
a phase of rapid growth. We have known them for years. We really
appreciate their recognition of Recon's operation philosophy and
belief in technology. We believe there are tremendous opportunities
and social value to help the companies in traditional industries to
fulfil their digital transformation through introduction of new
technology and algorithms. Through this acquisition, our management
is demonstrating to our shareholders that we are endeavored to
enhance our operation and competitiveness by devoting resource to
technology."
"It's great to be part of Recon," said Mr. Song Yang, a founder and the CEO of FGS, "It's
always been our mission to digitalize the traditional gas stations
with integration of technologies. We're proud that FGS is now one
of the players in China's smart
gas station industry. We started our business from Zhejiang Province to serve about 460 gas
stations, and now our scope is expanding to Beijing, Yunnan province and Henan province. We have also been cooperating
with WeChat and Alipay. We're aiming to provide better experience
and cost-effective consumption choices for car owners. And most of
all, as a partner of The China National Petroleum Corporation
("CNPC"), with our integrated technical solutions including the
internet of things system and operation services, we have enhanced
CNPC's electronic payment system which connects smart phones of
consumers and refueling machines. Our services have provided CNPC a
foundation for it to launch its E-card system. We have also helped
gas stations improve their overall efficiency because the end users
can prepay for the refueling before arriving the gas stations. All
of these efforts help us deepen our understanding of this business
and enhance our competitive advantage. Recon has been a strong
support of FGS and has been giving us necessary resources to go
this far. We would like to demonstrate just how useful our service
is of China's gas station and
refuel industry."
About Future Gas Station (Beijing) Technology, Ltd.
Established in January 2016, FGS
is a leading service company focusing on providing new technical
applications and data operations to gas stations of oil companies
such as PetroChina Co., Ltd. With its DT Refuel mobile application
and related mini programs embedded into WeChat and Alipay, FGS provides solutions to
gas stations to improve their operations and their customers'
experience. FGS aims to facilitate the digital transformation of
gas stations through integration of internet technique and
algorithms, and to help transform gas stations into comprehensive
service providers.
About Recon Technology, Ltd.
Recon Technology, Ltd. (NASDAQ: RCON) is China's first
listed non-state owned oil and gas field service company on NASDAQ.
Recon supplies China's largest oil exploration companies,
Sinopec (NYSE: SNP) and CNPC, with advanced automated technologies,
efficient gathering and transportation equipment and reservoir
stimulation measure for increasing petroleum extraction levels,
reducing impurities and lowering production costs. Through the
years, RCON has taken leading positions on several segmented
markets of the oil and gas filed service industry. RCON also has
developed stable long-term cooperation relationship with its major
clients, and its products and service are also well accepted by
clients. For additional information please
visit: www.recon.cn.
Forward-Looking Statements
Certain statements made herein are "forward-looking statements"
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"anticipate", "believe", "expect", "estimate", "plan", "outlook",
and "project" and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Such forward-looking statements include timing
of the proposed transaction; the business plans, objectives,
expectations and intentions of the parties once the transaction is
complete, and RCON's estimated and future results of operations,
business strategies, competitive position, industry environment and
potential growth opportunities. These forward-looking statements
reflect the current analysis of existing information and are
subject to various risks and uncertainties. As a result, caution
must be exercised in relying on forward-looking statements. Due to
known and unknown risks, our actual results may differ materially
from our expectations or projections. All forward-looking
statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the Company does
not assume a duty to update these forward-looking statements.
The following factors, among others, could cause actual results
to differ materially from those described in these forward-looking
statements: there is uncertainty about the spread of the COVID-19
virus and the impact it will have on RCON's operations, the demand
for the RCON's products and services, global supply chains and
economic activity in general. These and other risks and
uncertainties are detailed in the other public filings with the
Securities and Exchange Commission (the "SEC") by RCON.
Additional information concerning these and other factors that
may impact our expectations and projections will be found in our
periodic filings with the SEC, including our Annual Report on Form
20-F for the fiscal year ended June 30,
2020. RCON's SEC filings are available publicly on the SEC's
website at www.sec.gov. RCON disclaims any obligation to update the
forward-looking statements, whether as a result of new information,
future events or otherwise.
For more information, please contact:
Ms. Liu Jia
Chief Financial Officer
Recon Technology, Ltd.
Phone: +86 (10) 8494-5799
Email: info@recon.cn
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SOURCE Recon Technology, Ltd.