Recon Technology Announces Pricing of $55.0 million Registered Direct Offering

Rhea-AI Summary

Recon Technology, Ltd. (NASDAQ: RCON) has announced a securities purchase agreement on June 14, 2021, to raise $55 million through a registered direct offering of 8,814,102 Class A ordinary shares and corresponding warrants. The offering price is set at $6.24 per share. These pre-funded warrants will allow certain investors to maintain ownership below 9.99%. The transaction, expected to close on June 16, 2021, is managed by Maxim Group LLC. This initiative aims to bolster Recon's financial position and further its operational capabilities.

Positive

• The offering raised an estimated $55 million in gross proceeds.
• Funds will likely enhance Recon's operational capabilities and support growth initiatives.

Negative

• Issuance of new shares may dilute existing shareholder value.
• The offering price of $6.24 is lower than the current market price, indicating potential undervaluation.

BEIJING, June 14, 2021 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON) ("Recon" or the "Company") announced today it has entered into a securities purchase agreement with certain accredited investors on June 14, 2021 to purchase $55.0 million worth of its Class A ordinary shares (or pre-funded warrants to purchase Class A ordinary shares in lieu thereof) in a registered direct offering, and Class A ordinary shares warrants in a concurrent private placement.

Under the terms of the securities purchase agreement, the Company has agreed to sell 8,814,102 Class A ordinary shares or pre-funded warrants in lieu thereof, and warrants to purchase up to 8,814,102 Class A ordinary shares in a concurrent private placement transaction. The pre-funded warrants have an exercise price of $0.01 per share and will be exercisable immediately upon the date of issuance until they are exercised in full. The pre-funded warrants will be issued to certain purchasers who have elected to purchase them in lieu of Class A ordinary shares in this offering, as those purchasers would otherwise have exceeded 9.99% (or such lesser percentage as required by the investor) beneficial ownership of our Class A ordinary shares immediately following the offering. The ordinary share warrants will be exercisable immediately upon the date of issuance and have an exercise price of $6.24. The ordinary share warrants will expire five and a half years from the date of issuance. The purchase price for one ordinary share (or pre-funded warrant in lieu thereof) and a corresponding ordinary share warrant will be $6.24. The gross proceeds to the Company from this registered direct offering are estimated to be $55.0 million before deducting the placement agent's fees and other estimated offering expenses. The registered direct offering is expected to close on or about June 16, 2021, subject to the satisfaction of customary closing conditions.

Maxim Group LLC ("Maxim") is acting as the sole placement agent in connection with this offering.

The securities described above are being offered by the Company pursuant to a shelf registration statement on Form F-3 filed with the Securities and Exchange Commission (SEC) dated November 13, 2019, and declared effective on November 26, 2019, and Form F-3MEF filed thereafter. A prospectus supplement related to the offering will be, filed with the SEC and available on the SEC's website at http://www.sec.gov. Copies of the prospectus supplements relating to the offering may be obtained, when available, by contacting: Maxim Group LLC, 300 Park Avenue, 16^th Floor, New York, NY 10022, by telephone: at (212) 895-3500.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.

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 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, Recon has taken leading positions on several segmented markets of the oil and gas filed service industry. Recon also has developed stable long-term cooperation relationship with its major 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, whether we will sign any additional contracts with the North China Branch, the final revenue from providing services to the North China Branch, actual results of our solutions in the field, 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; 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:
Ms. Liu Jia
Chief Financial Officer
Recon Technology, Ltd
Phone: +86 (10) 8494-5188
Email: info@recon.cn

 

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SOURCE Recon Technology, Ltd.

FAQ

What is the purpose of Recon Technology's $55 million offering on June 14, 2021?

The $55 million offering aims to strengthen Recon's financial position and support its growth initiatives.

How many shares are being offered in Recon Technology's registered direct offering?

Recon Technology is offering 8,814,102 Class A ordinary shares and corresponding warrants.

When is the expected closing date for Recon Technology's offering?

The offering is expected to close on June 16, 2021, subject to customary closing conditions.

What is the exercise price for the pre-funded warrants issued in the offering?

The exercise price for the pre-funded warrants is set at $0.01 per share.

What might be the impact of the offering on existing shareholders of Recon Technology?

The offering may lead to dilution of existing shareholders' equity due to the issuance of new shares.