BEIJING, Aug. 6, 2018 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service, electric power and coal chemical industries, today announced that the Company, through its affiliates Beijing BHD Petroleum Technology Co., Ltd. and Nanjing Recon Technology Co., Ltd., has entered into a nonbinding framework agreement (the "Framework Agreement") on August 3, 2018 with Future Gas Station (Beijing) Technology, Ltd ("FGS"), a leading service company focusing on providing new technical applications and data operations to gas stations of oil companies. After entry into binding purchase agreement, Recon will pay cash and issue restricted shares to FGS and its shareholders in return for the issuance of new shares from FGS and the transfer of shares from existing FGS shareholders.
As previously disclosed in a press release on December 18, 2017, the Company invested RMB 4.35 million (approximately $0.7 million) in FGS to own 8% of FGS through its affiliates Beijing BHD Petroleum Technology Co., Ltd. and Nanjing Recon Technology Co., Ltd.
Pursuant to the Framework Agreement, Recon intends to increase its affiliates' interest from 8% to 43% of FGS' equity. Upon entry into a definitive purchase agreement, Recon expects to pay an aggregate of RMB 10 million and RMB 33.3 million worth of Recon's restricted shares to FGS and its shareholders. This transaction and determination of share price are subject to entry into a definitive purchase agreement, board approval of such agreement and satisfaction of customary closing conditions.
Management Commentary
Mr. Shenping Yin, CEO of Recon Technology, Ltd commented, "We are very pleased with the progress that the FGS has shown since our initial investment in December 2017. We continue to view FGS as an innovator transforming the customer experience at retail gas stations in China. And foremost, we are highly confident in FGS' founders and the professionalism of the team. They have valuable insights into domestic gas station markets and have great capability of solution implementation. While we understand that FGS will continue to require significant capital investment over the short term, we hope our next investment will help FGS enter its next stage of expansion of its smart gas station offerings."
Mr. Yang Song, the founder of FGS, said, "We are glad that Recon has shown continued faith in our operations and expansion. After one-year's exploration and practices, we believe we have accumulated sufficient data to further improve our operation and enable us to launch larger scale deployment of our terminals and new retail solutions. It will always be our philosophy to provide safe, convenient and various choices for consumers. We hope to continue to improve the operating efficiency, marketing efficiency, client retention, repurchase rates, and employee satisfaction of gas stations through our mobile applications, smart vending machines and other additions to the gas station retail experience."
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, FGS provides solutions to gas stations to improve their operations and their customers' experience. FGS aims to increase the overall income of gas stations through integration of internet technique and new retail E-Commerce platform, 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
Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, among others, levels of spending in our industry as well as consumer confidence generally; changes in the competitive environment in our industry and the markets where we operate; our ability to access the capital markets; the results of cooperation between parties to cooperation agreements; our ability to benefit from such cooperation as a shareholder of FGS; and other risks discussed in the Company's filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 20-F, which filings are available from the SEC. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
For more information, please contact:
In China:
Ms. Liu Jia
Chief Financial Officer
Recon Technology, Ltd.
Phone: +86 (10) 8494-5799
Email: info@recon.cn
In the United States:
Ms. Tina Xiao
Ascent Investor Relations LLC
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com
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