Recon Tech Sells 100M Shares in Private Placement, Raises $11M

TL;DR

**Recon Tech just sold 100 million new shares at $0.11 each, raising $11M but massively diluting existing shareholders.**

AI Summary

Recon Technology, Ltd. (RCON) completed a private placement on February 2, 2024, selling 100,000,000 Class A ordinary shares at $0.11 per share, raising $11,000,000. This transaction increased the total outstanding shares to 141,703,218. For investors, this matters because the significant increase in shares could dilute the value of existing shares, potentially impacting the stock price negatively, despite the capital infusion.

Why It Matters

This private placement significantly increases the number of outstanding shares, which typically dilutes the ownership stake and earnings per share for existing shareholders, potentially putting downward pressure on the stock price.

Risk Assessment

Risk Level: high — The substantial increase in outstanding shares (from 41,703,218 to 141,703,218) represents significant dilution for current shareholders.

Analyst Insight

An investor should carefully evaluate the impact of the significant share dilution on their existing holdings and consider if the capital raised justifies the dilution, potentially looking for further details on how the $11 million will be utilized.

Key Numbers

• 100,000,000 — Class A ordinary shares sold (number of new shares issued in the private placement)
• $0.11 — price per share (the price at which each new share was sold)
• $11,000,000 — total capital raised (the total amount of money Recon Technology received from the private placement)
• 141,703,218 — total shares outstanding (the total number of shares after the private placement, indicating significant dilution)

Key Players & Entities

• Recon Technology, Ltd (company) — the company issuing shares
• Purchasers (person) — investors acquiring shares in the private placement
• $0.11 (dollar_amount) — price per share in the private placement
• $11,000,000 (dollar_amount) — total capital raised from the private placement
• January 31, 2024 (date) — date the securities purchase agreement was entered into
• February 2, 2024 (date) — date the private placement closed

Forward-Looking Statements

• RCON's stock price will experience downward pressure due to significant share dilution. (RCON) — high confidence, target: Q1 2024
• The capital raised will be used to fund operational expenses or strategic initiatives. (Recon Technology, Ltd) — medium confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.11 — shares (the “Shares”) at USD$0.11 per share for USD$11,000,000. On Febru
• $11,000,000 — es”) at USD$0.11 per share for USD$11,000,000. On February 2, 2024, the Company clos

Filing Documents

• tm245210d1_6k.htm (6-K) — 12KB
• tm245210d1_ex4-1.htm (EX-4.1) — 54KB
• 0001104659-24-010657.txt ( ) — 67KB

From the Filing

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 February 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 x 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): ¨ Entry into Material Definitive Agreements On January 31, 2024, Recon Technology, Ltd (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 of the Company’s Class A ordinary shares (the “Shares”) at USD$0.11 per share for USD$11,000,000. On February 2, 2024, the Company closed the Private Placement. There are 141,703,218 Shares outstanding after the issuance of the Shares purchased. The Shares are being sold in transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). Each Purchaser understands that the Shares have not been registered under the Securities Act. Such Purchaser will not sell or otherwise dispose of the Shares without registration under the Securities Act, and under applicable state securities or “Blue Sky” laws, or pursuant to an exemption therefrom. No placement agent was involved in the Private Placement. A copy of the Securities Purchase Agreement is filed as Exhibit 4.1 to this report and are incorporated by reference herein. The foregoing summary of the Securities Purchase Agreement is subject to, and qualified in its entirety by reference to, such exhibit. Exhibits Exhibit 4.1 Form of Securities Purchase Agreement, dated January 31, 2024, by and between Recon Technology, Ltd and the Purchasers Pursuant to the requirements of the Securities and 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 /s/ Shenping Yin Shenping Yin Chief Executive Officer (Principal Executive Officer) Dated: February 5, 2024

View Full Filing

View this 6-K filing on SEC EDGAR