Benzinga | Feb 8, 2021 08:34AM EST

Recon Technology Announces Two Of Its Subsidiaries Entered Agreement To Acquire 8% Ownership Of FGS, Bringing Total To 51% Ownership

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.