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RCON Recon Technology

Document And Entity Information

Document And Entity Information6 Months Ended
Dec. 31, 2020
Document And Entity Information [Abstract]
Entity Registrant NameRecon Technology, Ltd
Entity Central Index Key0001442620
Document Type6-K
Document Period End DateDec. 31,
2020
Amendment Flagfalse
Current Fiscal Year End Date--06-30
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ2

CONDENSED CONSOLIDATED INTERIM

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETSDec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Current assets
Cash $ 10,839,024 ¥ 70,807,497 ¥ 30,336,504
Notes receivable1,192,472 7,789,997 4,180,885
Trade accounts receivable, net5,429,817 35,471,068 48,244,015
Trade accounts receivable-related party, net0 0 3,068,920
Inventories, net324,180 2,117,754 1,985,723
Other receivables, net1,684,589 11,004,821 6,350,802
Loans to third parties145,423 950,000 3,200,377
Purchase advances, net12,619 82,437 178,767
Contract assets, net6,983,690 45,621,966 31,537,586
Prepaid expenses0 0 198,294
Total current assets26,611,814 173,845,540 129,281,873
Property and equipment, net4,451,210 29,078,178 29,756,879
Land use right, net193,953 1,267,028 1,280,648
Investment in unconsolidated entity4,789,875 31,290,554 31,541,850
Long-term other receivables, net0 0 3,640
Operating lease right-of-use assets316,954 2,070,548 2,549,914
Total Assets237,551,848 194,414,804
Current liabilities
Short-term bank loans1,839,990 12,020,000 9,520,000
Convertible notes payable6,497,951 42,448,810 0
Trade accounts payable2,950,267 19,273,046 23,034,347
Other payables239,260 1,563,002 2,609,486
Contract Liabilities1,023,566 6,686,592 3,486,033
Accrued payroll and employees' welfare146,081 954,304 1,917,635
Investment payable979,695 6,400,000 6,400,000
Taxes payable211,539 1,381,912 1,108,288
Short-term borrowings33,019 215,699 200,000
Operating lease liabilities - current (including 450,728 and 461,859 ($70,700) from a related party as of June 30, 2020 and December 31, 2020, respectively)204,069 1,333,113 1,328,976
Total Current Liabilities16,352,367 106,824,220 65,181,175
Operating lease liabilities - non-current (including 352,775 and 119,029 ($18,221) from a related party as of June 30, 2020 and December 31, 2020, respectively)111,733 729,909 1,210,088
Total Liabilities17,526,885 114,496,924 73,770,516
Commitments and Contingencies
Equity
Common stock, ($0.0925 U.S. dollar par value, 20,000,000 shares authorized; 7,202,832 shares and 8,416,721 shares issued and outstanding as of June 30, 2020 and December 31, 2020, respectively)[1]813,150 5,312,021 4,577,233
Additional paid-in capital45,173,769 295,104,195 282,505,455
Statutory reserve635,107 4,148,929 4,148,929
Accumulated deficit(29,538,302)(192,963,238)(184,027,586)
Accumulated other comprehensive gain289,984 1,894,365 2,825,731
Total stockholders' equity17,373,708 113,496,272 110,029,762
Non-controlling interests1,463,213 9,558,652 10,614,526
Total equity18,836,921 123,054,924 120,644,288
Total Liabilities and Equity36,363,806 237,551,848 194,414,804
Related Party
Current liabilities
Other payables253,445 1,655,668 4,498,318
Short-term borrowings1,838,333 12,009,174 10,230,746
Long-term borrowings - related party - current portion135,152 882,900 847,346
Long-term borrowings - related party $ 1,062,785 ¥ 6,942,795 ¥ 7,379,253
[1]Retrospectively restated for effect of stock split on December 27, 2019.

CONDENSED CONSOLIDATED INTERI_2

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Parenthetical)Dec. 31, 2020USD ($)$ / sharessharesDec. 31, 2020CNY (¥)sharesJun. 30, 2020CNY (¥)shares
Rights of use lease assets $ 316,954 ¥ 2,070,548 ¥ 2,549,914
Operating lease liabilities - current204,069 1,333,113 1,328,976
Operating lease liabilities - non-current $ 111,733 ¥ 729,909 ¥ 1,210,088
Common shares, par value (in dollars per share) | $ / shares $ 0.0925
Common shares, shares authorized20,000,000 20,000,000 20,000,000
Common shares, shares issued8,416,721 8,416,721 7,202,832
Common shares, shares outstanding8,416,721 8,416,721 7,202,832
Related Party
Rights of use lease assets $ 88,921 ¥ 803,503
Operating lease liabilities - current70,700 ¥ 461,859 450,728
Operating lease liabilities - non-current $ 18,221 ¥ 119,029 ¥ 352,775

CONDENSED CONSOLIDATED INTERI_3

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS6 Months Ended
Dec. 31, 2020USD ($)$ / sharessharesDec. 31, 2020CNY (¥)¥ / sharessharesDec. 31, 2019USD ($)sharesDec. 31, 2019CNY (¥)¥ / sharesshares
Revenues $ 3,852,847 ¥ 25,169,279 ¥ 30,405,153
Cost of revenues2,824,620 18,452,239 18,437,241
Gross profit1,028,227 6,717,040 11,967,912
Selling and distribution expenses421,022 2,750,389 2,660,873
General and administrative expenses1,991,385 13,009,013 13,366,413
Provision for (net recovery of) doubtful accounts(565,931)(3,697,024)25,537
Research and development expenses575,087 3,756,839 2,895,286
Operating expenses2,421,563 15,819,217 18,948,109
Loss from operations(1,393,336)(9,102,177)(6,980,197)
Other income (expenses)
Subsidy income33,989 222,038 854,389
Interest income3,087 20,168 85,745
Interest expense(153,105)(1,000,182)(761,322)
Income (loss) from investment in unconsolidated entity(38,468)(251,296)141,288
Foreign exchange transaction gain (loss)(12,060)(78,784)209
Other income (loss)7,711 50,369 (60,760)
Other income (expense), net(158,846)(1,037,687)259,549
Loss before income tax(1,552,182)(10,139,864)(6,720,648)
Income tax expenses (benefit)(15,053)(98,338)316,799
Net loss(1,537,129)(10,041,526) $ (1,077,274)(7,037,447)
Less: Net loss attributable to non-controlling interests(169,284)(1,105,874)(336,250)
Net loss attributable to Recon Technology, Ltd(1,367,845)(8,935,652)(6,701,197)
Comprehensive loss
Net loss(1,537,129)(10,041,526) $ (1,077,274)(7,037,447)
Foreign currency translation adjustment(142,571)(931,366)9,610
Comprehensive loss(1,679,700)(10,972,892)(7,027,837)
Less: Comprehensive loss attributable to non- controlling interests(169,284)(1,105,874)(336,250)
Comprehensive loss attributable to Recon Technology, Ltd $ (1,510,416) ¥ (9,867,018) ¥ (6,691,587)
Loss per common share - basic and diluted | (per share) $ (0.19) ¥ (1.22) ¥ (1.51)
Weighted - average shares -basic and diluted7,330,866 7,330,866 4,449,980 4,449,980
Related Party
Revenues $ 13,112 ¥ 85,657 ¥ 0
Third Party [Member]
Revenues3,839,734 25,083,622 30,405,153
Cost of revenues2,824,620 18,452,239 18,437,241
Provision for (net recovery of) doubtful accounts $ (525,721) ¥ (3,434,339) ¥ 59,638

CONDENSED CONSOLIDATED INTERI_4

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYCommon Stock [Member]CNY (¥)sharesAdditional Paid-in Capital [Member]CNY (¥)Statutory Reserves [Member]CNY (¥)Accumulated deficit [Member]CNY (¥)Accumulated Other Comprehensive income (loss) [Member]CNY (¥)Stockholders' Equity [Member]CNY (¥)Non-controlling Interest [Member]CNY (¥)USD ($)sharesCNY (¥)shares
Opening Balance at Jun. 30, 2019 ¥ 2,712,773 ¥ 250,624,798 ¥ 4,148,929 ¥ (164,780,885) ¥ 2,909,936 ¥ 95,615,551 ¥ 11,085,429 $ 15,313,008 ¥ 106,700,980
Opening Balance (in shares) at Jun. 30, 2019[1]4,361,634
Capital contribution in non-controlling interests405,000 61,996 405,000
Restricted shares issued for services33,927 33,927 5,193 33,927
Restricted shares issued for management and employees ¥ 163,455 3,893,638 4,057,093 621,049 4,057,093
Restricted shares issued for management and employees (in shares)[1]250,086
Net loss(6,701,197)(6,701,197)(336,250)(1,077,274)(7,037,447)
Appropriation of statutory reserves | ¥360,111 (360,111)
Foreign currency translation adjustment9,610 9,610 1,471 9,610
Ending Balance at Dec. 31, 2019 ¥ 2,876,228 254,552,363 4,509,040 (171,842,193)2,919,546 93,014,984 11,154,179 $ 14,925,443 ¥ 104,169,163
Ending Balance (in shares) at Dec. 31, 20194,611,720 [1]250,086 250,086
Opening Balance at Jun. 30, 2020 ¥ 4,577,233 282,505,455 4,148,929 (184,027,586)2,825,731 110,029,762 10,614,526 $ 18,467,906 ¥ 120,644,288
Opening Balance (in shares) at Jun. 30, 2020[1]7,202,832
Capital contribution in non-controlling interests50,000 7,654 50,000
Stock issuance for warrants redemption ¥ 734,788 9,195,227 9,930,015 1,520,060 9,930,015
Stock issuance for warrants redemption (in shares)[1]1,213,889
Restricted shares issued for management and employees3,403,513 3,403,513 521,001 3,403,513
Net loss(8,935,652)(8,935,652)(1,105,874)(1,537,129)(10,041,526)
Foreign currency translation adjustment(931,366)(931,366)(142,571)(931,366)
Ending Balance at Dec. 31, 2020 ¥ 5,312,021 ¥ 295,104,195 ¥ 4,148,929 ¥ (192,963,238) ¥ 1,894,365 ¥ 113,496,272 ¥ 9,558,652 $ 18,836,921 ¥ 123,054,924
Ending Balance (in shares) at Dec. 31, 20208,416,721 [1]0 0
[1]Retrospectively restated for effect of stock split on December 27, 2019.

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Cash flows from operating activities:
Net loss $ (1,537,129) ¥ (10,041,526) ¥ (7,037,447)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization209,653 1,369,590 411,592
Loss from disposal of equipment168 1,095 3,189
Provision for (net recovery of) doubtful accounts(565,931)(3,697,024)25,537
Provision for slow moving inventories64,861 423,714 25,312
Amortization of right of use assets83,105 542,896 718,000
Restricted shares issued for management and employees521,001 3,403,513 4,057,093
Loss (income) from investment in unconsolidated entity38,468 251,296 (141,288)
Interest expenses related to convertible notes12,951 84,607 0
Restricted shares issued for services0 0 33,927
Changes in operating assets and liabilities:
Notes receivable(552,473)(3,609,112)(986,826)
Trade accounts receivable2,428,770 15,866,295 5,412,201
Inventories(117,195)(765,595)(551,200)
Other receivable(652,520)(4,262,681)1,364,500
Purchase advance14,746 96,330 1,108,902
Contract assets(2,183,318)(14,262,839)(9,951,981)
Prepaid expense(2,955)(19,306)116,917
Operating lease liabilities(82,596)(539,572)(610,000)
Trade accounts payable(575,770)(3,761,301)362,758
Other payables(130,189)(850,478)(160,316)
Advance from customers489,933 3,200,559 1,904,753
Accrued payroll and employees' welfare(147,552)(963,905)1,501,406
Accrued expenses(30,383)(198,483)0
Taxes payable41,886 273,624 650,855
Net cash provided by (used in) operating activities(2,555,967)(16,697,242)265,639
Cash flows from investing activities:
Purchases of property and equipment(57,491)(375,569)(12,967)
Proceeds from disposal of equipment0 0 900
Repayments from loans to third parties489,905 3,200,377 4,960,000
Payments made for loans to third parties(145,423)(950,000)0
Payments and prepayments for construction in progress0 0 (1,297,663)
Net cash provided by investing activities286,991 1,874,808 3,650,270
Cash flows from financing activities:
Proceeds from short-term bank loans538,832 3,520,000 0
Repayments of short-term bank loans(156,139)(1,020,000)0
Proceeds from short-term borrowings376,570 2,460,000 0
Repayments of short-term borrowings(376,570)(2,460,000)(1,081,096)
Repayments of long-term borrowings-related party(61,142)(399,422)(365,530)
Proceeds from sale of common stock, net of issuance costs1,520,060 9,930,015 0
Proceeds from issuance of convertible notes6,485,000 42,364,203 0
Capital contribution by non-controlling shareholders7,654 50,000 405,000
Net cash provided by financing activities8,606,742 56,224,796 1,878,374
Effect of exchange rate fluctuation on cash(142,574)(931,369)9,611
Net (decrease) increase in cash6,195,192 40,470,993 5,803,894
Cash at beginning of year4,643,832 30,336,504 4,521,325
Cash at end of year10,839,024 70,807,497 10,325,219
Supplemental cash flow information
Cash paid during the period for interest130,025 849,409 718,201
Cash received during the period for taxes(15,053)(98,338)(2,002)
Non-cash investing and financing activities
Right-of-use assets obtained in exchange for operating lease obligations9,725 63,530 1,228,963
Inventories used as fixed assets46,351 302,795 0
Payable for construction in Progress0 0 236,302
Receivable for disposal of property and equipment0 0 5,000
Related Party
Changes in operating assets and liabilities:
Trade accounts receivable521,980 3,409,912 0
Other receivable(3,643)(23,800)0
Prepaid expense33,310 217,600 217,600
Other payables(435,145)(2,842,651)1,790,155
Cash flows from financing activities:
Proceeds from short-term borrowings1,546,081 10,100,000 13,115,000
Repayments of short-term borrowings $ (1,273,604) ¥ (8,320,000) ¥ (10,195,000)

ORGANIZATION AND NATURE OF OPER

ORGANIZATION AND NATURE OF OPERATIONS6 Months Ended
Dec. 31, 2020
ORGANIZATION AND NATURE OF OPERATIONS
ORGANIZATION AND NATURE OF OPERATIONSNOTE 1. ORGANIZATION AND NATURE OF OPERATIONS
Organization – Recon Technology, Ltd (the “Company”) was incorporated under the laws of the Cayman Islands on August 21, 2007 as a limited liability company. The Company provides specialized equipment, automation systems, tools, chemicals and field services to energy industry companies mainly in the People’s Republic of China (the “PRC”).
The Company, along with its wholly-owned subsidiaries, Recon Investment Ltd. (“Recon-IN”) and Recon Hengda Technology (Beijing) Co., Ltd. (“Recon-BJ”), conducts its business through the following PRC legal entities (“Domestic Companies”) that are consolidated as variable interest entities (“VIEs”) and operate in the Chinese energy industry:
1.
Beijing BHD Petroleum Technology Co., Ltd. (“BHD”),
2.
Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”).
The Company has signed Exclusive Technical Consulting Service Agreements with each of the Domestic Companies, which are its VIEs, and Equity Interest Pledge Agreements and Exclusive Equity Interest Purchase Agreements with their shareholders. Through these contractual arrangements, the Company has the ability to substantially influence each of the Domestic Companies’ daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder approval. As a result of these contractual arrangements, which enable the Company to control the Domestic Companies, the Company is considered as the primary beneficiary of each Domestic Company. Thus, the Company is able to absorb 90% of net interest or 100% of net loss of those VIEs.
On February 21, 2019, the Company’s board of directors approved transferring the VIEs and VIE-controlled companies from Jining Recon Technology Ltd. ("Recon-JN”) to Recon-BJ. At the time, both Recon-JN and Recon-BJ were the Company’s wholly owned subsidiaries in China. On April 1, 2019, the Company completed the VIE transfer process and then completed the dissolution of Recon-JN on April 10, 2019, and subsequently completed the dissolution of Recon Technology Co., Limited ("Recon HK") on May 15, 2020. The Company does not expect any negative impact of this process on its operations.
On December 17, 2015, Huang Hua BHD Petroleum Equipment Manufacturing Co. LTD, a fully owned subsidiary established by BHD was organized under the laws of the PRC, focusing on the design, assemble and manufacture of hearing equipment.
Gan Su BHD Environmental Technology Co., Ltd (“Gan Su BHD”) was established on May 23, 2017, with registered capital of ¥50 million. The paid in capital was ¥20,785,000 ($3,181,713) as of December 31,2020. BHD owns an interest of 51% of Gan Su BHD, which is focusing on oilfield sewage treatment and oily sludge disposal projects.
Qing Hai BHD New Energy Technology Co., Ltd. (“Qinghai BHD”) was established on October 16, 2017, with registered capital of ¥50 million. The paid in capital was ¥4,200,000 ($642,925) as of December 31,2020. BHD owned an interest of 55% of Qinghai BHD previously; however, based on an agreement signed by the shareholders of Qinghai BHD dated October 23, 2018, each of the other two individual shareholders agreed to reduce 10% of their equity interests. As a result, Qinghai BHD returned ¥200,000 paid in capital back to one of the individual shareholders. After the new arrangement, BHD owns a total interest of 75% of Qinghai BHD. The remaining paid in capital should be contributed by BHD and the other individual shareholder is ¥33,300,000 ($4,710,223) and ¥12,500,000 ($1,768,102), respectively. Based on its charter dated September 29, 2017, the remaining capital will be injected before September 29, 2036.
Nature of Operations – The Company engages in (1) providing equipment, tools and other components and parts related to oilfield production and other energy industries companies, including simple installations in connection with some projects; (2) services to improve production and efficiency of exploited oil wells, (3) developing and selling its own specialized industrial automation control and information solutions, and (4) design, test and implement solution of sewage and oily sludge treatment, production and sales of related integrated equipment and project services.
Impact of Covid-19 - In January 2020, the World Health Organization declared the COVID-19 outbreak a global health emergency as the coronavirus outbreak continued to spread beyond China. In compliance with the government health emergency rules in place, the Company temporarily closed offices in varies provinces in China and ceased production operations since Chinese New Year. The Company gradually resumed operation and production since March, 2020 but some of its business are still not return to its prior level. In short term, the Company's business was affected negatively. However, at this stage, the Company doesn't expect a significant impact on the Company's operations and financial results in a long run.

LIQUIDITY

LIQUIDITY6 Months Ended
Dec. 31, 2020
LIQUIDITY
LIQUIDITYNOTE 2. LIQUIDITY
As disclosed in the Company’s unaudited condensed consolidated financial statements, the Company had recurring net losses for the six months ended December 31, 2019 and 2020. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand and its ability to generate sufficient revenue sources in the future to support its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Direct offering and debt financing in the forms of loans payable and loans from related parties have been utilized to finance the working capital requirements of the Company .
Despite those negative financial trends, as of December 31, 2020, the Company has positive working capital due to the following measurements the management has taken to enhance the Company’s liquidity:
1)
The Company financed through borrowing from shareholders and senior management. As of December 31, 2020, the Company has short-term borrowings due to related parties amounted to ¥12.0 million ($1.8 million), and long-term borrowings due to a related party amounted to ¥7.8 million ($1.2 million). In addition, on August 31, 2019, two major shareholders of the Company signed a 3-year commitment letter to support the Company and whenever the Company has liquidity difficulty, they will provide working capital to support daily operation of the Company.
2)
The Company financed through convertible debt during this period as a reserve for some future projects. On November 25, 2020, the Company and certain accredited investors (the “Investors”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investors, and the Investors agreed to purchase from the Company, in an unregistered private transaction, convertible promissory notes (the “Convertible Notes”) with an aggregate principal amount of $6,485,000, convertible into ordinary shares, $0.0925 par value per share of the Company at a rate of $0.71 per ordinary share, upon the terms and subject to the limitations and conditions set forth in such Convertible Notes. The Company received the full principal amount in December 2020. On January 28, 2021, the Company received the conversion notices from the Investors, and ordinary shares totaling 9,225,338 were issued by the Company to the Investors equaling principal and interests amounted to $6,549,990, after the issuance, all the outstanding principle and interests have been converted.
3)
The Company also financed from commercial banks. As of December 31, 2020, the Company had ¥12.0 million ($1.8 million) in bank loans outstanding. The management expects that the Company will be able to renew its existing bank loan upon its maturity based on past experience and our good credit history.
4)
Additionally, the Company was financed through warrants prior issued during its stock offering in May and June, 2020.
Management believes that the foregoing measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital obligations.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES6 Months Ended
Dec. 31, 2020
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIESNOTE 3. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying unaudited condensed consolidated interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied.
Unaudited Interim Condensed Financial Statements - The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements, and, in the opinion of management, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company's financial position as of December 31, 2020 and its results of operations and cash flows for the six months ended December 31, 2020 and 2019. The financial data and other financial information disclosed in the notes to these condensed consolidated interim financial statements related to the six-month periods are also unaudited. The results of operations for the six months ended December 31, 2020 are not necessarily indicative of the results expected for the full fiscal year or any other period. The unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's consolidated financial statements and the notes thereto for the years ended June 30, 2020 and 2019.
Principles of Consolidation – The unaudited condensed consolidated financial statements include the accounts of the Company, all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.
Variable Interest Entities - A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.
Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.
Currency Translation - The Company’s functional currency is the Chinese Yuan (“RMB”) and the accompanying unaudited condensed consolidated financial statements have been expressed in Chinese Yuan. The unaudited condensed consolidated financial statements as of and for the six months ended December 31, 2020 have been translated into United States dollars (“U.S. dollars”) solely for the convenience of the readers. The translation has been made at the rate of ¥6.5326 = US$1.00, the approximate exchange rate prevailing on December 31, 2020. These translated U.S. dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into U.S. dollars.
Estimates and Assumptions - The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP, which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include allowance for doubtful accounts related to trade accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, the discount rate for lease and investment, valuation of the convertible notes and the fair value of share- based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.
The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for doubtful accounts related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.
Fair Values of Financial Instruments - The US GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The three levels of inputs are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable.
Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
The Company measures certain financial assets, including investments under the equity method on other-than-temporary basis, intangible assets and fixed assets at fair value when an impairment charge is recognized.
The carrying amounts reported in the consolidated balance sheets for trade accounts receivable, other receivables, purchase advances, trade accounts payable, convertible notes payable, accrued liabilities, advances from customers, investment payable, short-term bank loan and short-term borrowings approximate fair value because of the immediate or short-term maturity of these financial instruments.
Cash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.
Trade Accounts and Other Receivables, Net - Accounts receivable are carried at original invoiced amount less a provision for any potential uncollectible amounts. Accounts are considered to be under certain credit risk when the related receivables are more than a year old. Provision is made against trade accounts and other receivables to the extent they are considered to be doubtful. Accounts are written off after extensive efforts at collection. Other receivables arise from transactions with non-trade customers.
Notes Receivable - Notes receivable represent short-term notes receivable issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally range from three to six months from the date of issuance.
Purchase Advances, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.
Inventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Allowance for inventory obsolescence is provided when the market value of certain inventory items is lower than the cost.
Property and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.
Items
Useful life
Motor vehicles
5-10 years
Office equipment
2-5 years
Production equipment
10-20 years
Land Use Rights, Net - According to the Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights which are usually prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line method. The estimated useful life is 50 years, based on the term of the land use rights.
Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. There were no impairments at June 30, 2020 and December 31, 2020.
Long-term Investments
- Cost method investment - For an investee over which the Company does not have significant influence and a controlling interest, the Company carries the investment at cost and recognizes income for any dividend received from the distribution of the investee’s earnings.
The Company reviews its cost method investment for impairment whenever an event or circumstance indicates that an other-than-temporary impairment has occurred. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its cost method investment. An impairment charge is recorded if the carrying amount of an investment exceeds its fair value and such excess is determined to be other-than-temporary.
- Equity method investment - For an investee over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate.
An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company did not record impairment losses on its equity method investment during the six months ended December 31, 2019 and 2020. The Company recorded an approximately ¥141,288 investment income and (¥251,296) ($38,468) investment loss on its equity method investment in unconsolidated entity during the six months ended December 31, 2019 and 2020.
Revenue Recognition - In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The core principle underlying the new revenue recognition Accounting Standards Update ("ASU") is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer.
Disaggregation of Revenues
Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The following items represent the Company’s revenues disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.
The Company’s disaggregation of revenues for the six months ended December 31, 2019 and 2020 is disclosed in Note 25.
Automation Products and Software; Equipment and Accessories
The Company generates revenues primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.
The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.
Oilfield Environmental Protection Service
The Company provides wastewater treatment and oily sludge disposal service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer and treatment of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.
Arrangements with Multiple Performance Obligations
Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.
Contract Balances
Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs.
The following table provides information about contract assets and contract liabilities from contracts with customers:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Contract assets
¥
31,537,586
¥
45,621,966
$
6,983,690
Contract liabilities
¥
3,486,033
¥
6,686,592
$
1,023,566
Contract Assets, net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.
-
Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company's hardware and software revenues. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.
-
Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients' initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client's individual project construction arrangement), the Company records revenue based on the contract or the final clients' acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.
Contract liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. The Company's contract liabilities consist primarily of the Company's unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.
Performance Obligations - Performance obligations include delivery of products and provision of services. The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. This occurs when the control of the goods and services have been transferred to the customer. Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized over the service period. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.
Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenues, and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations and comprehensive loss. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of December 31, 2020. The amount of revenue recognized during the six months ended December 31, 2019 and 2020 that was previously included within contract liability balances was ¥nil and ¥1,870,891 ($286,391), respectively.
Practical Expedients Elected
Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant.
Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are typically less than one year in length, consideration will not be adjusted. The Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts.
Share-Based Compensation - Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award. The Company has elected to recognize compensation expenses using the Black-Scholes valuation model estimated at the grant date based on the award’s fair value.
Research and Development Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.
Shipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥196,852 and ¥79,180 ($12,121) for the six months ended December 31, 2019 and 2020, respectively.
Leases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of December 31, 2020 and June 30, 2020.
Investment Payable - Investment payable is comprised of obligations due to the investee for the purchase of equity interest in the ordinary course of investment.
Income Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2020 and December 31, 2020.
As of December 31, 2020, the tax years ended December 31, 2016 through December 31, 2020 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.
Comprehensive Loss - Comprehensive loss consists of two components, net loss and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$to RMB is reported in other comprehensive (income) loss in the condensed consolidated interim statements of operations and comprehensive loss.
Loss per Share - Loss Per Share (“EPS”) is computed by dividing net loss by the weighted average number of ordinary shares outstanding. Diluted EPS are computed by dividing net loss by the weighted-average number of ordinary shares and dilutive potential ordinary share equivalents outstanding.
Potentially dilutive ordinary shares consist of ordinary shares issuable upon the conversion of ordinary stock options, restricted shares and warrants (using the treasury stock method). The effect from options, restricted shares and warrants would have been anti-dilutive due to the fact that the Company incurred a net loss for the six months ended December 31, 2019 and 2020.
Warrants - In connection of the issuance of common stocks, the Company may issue options or warrants to purchase common stock. Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.
Convertible Notes Payable - In accordance with ASC 470 Debt with conversion and other options , the Company allocated the proceeds from the convertible notes between debt and equity elements, the company measured the debt component at its fair value, and allocated the remaining proceeds to the equity component in additional paid in capital, as the fair value of equity component is immaterial, the Company allocated the entire proceeds to the debt component. Upon issuance of the shares to settle the obligation, equity is increased by the amount of the liability and no gain or loss is recognized for the difference between the average and the ending market price.
Recently Issued Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects that the adoption of this ASU will not have a material impact on the Company's unaudited condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815 - 40)" ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU's amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on the Company's unaudited condensed consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows.

TRADE ACCOUNTS RECEIVABLE, NET

TRADE ACCOUNTS RECEIVABLE, NET6 Months Ended
Dec. 31, 2020
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NETNOTE 4. TRADE ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Third Parties
RMB
RMB
U.S. Dollars
Trade accounts receivable
¥
53,752,527
¥
37,746,154
$
5,778,080
Allowance for doubtful accounts
(5,508,512)
(2,275,086)
(348,263)
Total third-parties, net
¥
48,244,015
¥
35,471,068
$
5,429,817
June 30,
December 31,
December 31,
2020
2020
2020
Related Party
RMB
RMB
U.S. Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd.
¥
3,409,912
¥

$

Allowance for doubtful accounts
(340,992)


Total related-party, net
¥
3,068,920
¥

$

Provision made for doubtful accounts of accounts receivables due to third party was ¥59,638 for the six months ended December 31, 2019. Net recovery of provision made for doubtful accounts of accounts receivable due from third parties was ¥3,093,347 ($473,523) for the six months ended December 31, 2020, which was mainly due to the collection of long outstanding account receivables.
No provision made for doubtful accounts of accounts receivable due from related-party for the six months ended December 31, 2019. Net recovery of provision made for doubtful accounts of accounts receivable due from related-party was ¥340,992 ($52,198) for the six months ended December 31, 2020. The Company records allowance for doubtful accounts of related-party according to its general accounting policy, while the Company also makes great efforts to prevent any not-collection of receivables from related party. The outstanding balance as of June 30, 2020 was fully collected during the six months ended December 31, 2020.
Movement of allowance for doubtful accounts is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
3,645,334
¥
5,849,504
$
895,428
Charge to (reversal of) expense
2,204,170
(3,434,339)
(525,721)
Less: write-off

(140,079)
(21,444)
Ending balance
¥
5,849,504
¥
2,275,086
$
348,263

NOTES RECEIVABLE

NOTES RECEIVABLE6 Months Ended
Dec. 31, 2020
NOTES RECEIVABLE
NOTES RECEIVABLENOTE 5. NOTES RECEIVABLE
Notes receivables represented the non-interest-bearing commercial bills the Company received from the customers for the purpose of collection of sales amounts, which generally ranged from three to six months from the date of issuance. As of June 30, 2020 and December 31, 2020, notes receivable were ¥4,180,885 and ¥7,789,997 ($1,192,472), respectively, As of June 30, 2020 and December 31, 2020, no notes were guaranteed or collateralized.

OTHER RECEIVABLES, NET

OTHER RECEIVABLES, NET6 Months Ended
Dec. 31, 2020
OTHER RECEIVABLES, NET
OTHER RECEIVABLES, NETNOTE 6. OTHER RECEIVABLES, NET
Other receivables, net consisted of the following:
June 30,
December 31,
December 31,
Third Party
2020
2020
2020
RMB
RMB
U.S. Dollars
Business advances to officers and staffs (A)
¥
1,141,829
¥
1,915,922
$
293,284
Deposits for projects
1,381,081
1,327,283
203,177
VAT recoverable
3,746,435
3,297,091
504,710
Others
1,614,133
5,256,227
804,610
7,883,478
11,796,523
1,805,781
Less: Long term portion (B)
(3,640)


Allowance for doubtful accounts
(1,529,036)
(791,702)
(121,192)
Other receivable - current portion
¥
6,350,802
¥
11,004,821
$
1,684,589
(A)
Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.
(B)
Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.
Net recovery of provision for doubtful accounts of other receivables was ¥62,625 for the six months ended December 31, 2019, net recovery of provision for doubtful accounts of other receivables was ¥348,199 ($53,300) for the six months ended December 31, 2020.
Movement of allowance for doubtful accounts is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
1,461,724
¥
1,529,036
$
234,060
Charge to (reversal of) expense
67,312
(348,199)
(53,300)
Less: write-off

(389,135)
(59,568)
Ending balance
¥
1,529,036
¥
791,702
$
121,192

CONTRACT ASSETS, NET

CONTRACT ASSETS, NET6 Months Ended
Dec. 31, 2020
CONTRACT ASSETS, NET
CONTRACT ASSETS, NETNOTE 7. CONTRACT ASSETS, NET
Contract assets, net consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Third Party
RMB
RMB
U.S. Dollars
Contract assets
¥
31,677,348
¥
45,645,343
$
6,987,268
Impairment of contract assets
(139,762)
(23,377)
(3,578)
Total contract assets, net
¥
31,537,586
¥
45,621,966
$
6,983,690
As of December 31, 2020, total contracts assets, net amounted to ¥45,621,966 ($6,983,690), of which 7.6%, or ¥3,468,331 ($530,923) have been subsequently realized as of the date of the report, and the remaining balance is expected to be utilized by December 31, 2021.
Net recovery of impairment of contract asset was ¥18,976 for the six months ended December 31, 2019. Impairment of contract asset was ¥85,514 ($13,090) for the six months ended December 31, 2020.
Movement of impairment of contract assets is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
162,213
¥
139,762
$
21,394
Charge to (reversal of) expense
(22,451)
85,514
13,090
Less: write-off

(201,899)
(30,906)
Ending balance
¥
139,762
¥
23,377
$
3,578

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET6 Months Ended
Dec. 31, 2020
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NETNOTE 8. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Motor vehicles
¥
4,741,366
¥
5,097,921
$
780,376
Office equipment and fixtures
1,436,210
1,427,475
218,514
Production equipment
30,181,761
30,484,556
4,666,495
Total property and equipment
36,359,337
37,009,952
5,665,385
Less: accumulated depreciation
(6,602,458)
(7,931,774)
(1,214,175)
Property and equipment, net
¥
29,756,879
¥
29,078,178
$
4,451,210
Depreciation expenses were ¥397,972 and ¥1,355,970 ($207,568) for the six months ended December 31, 2019 and 2020, respectively.
Loss from property and equipment disposal was ¥3,189 and ¥1,095 ($168) for the six months ended December 31, 2019 and 2020, respectively.

INVESTMENT IN UNCONSOLIDATED EN

INVESTMENT IN UNCONSOLIDATED ENTITY6 Months Ended
Dec. 31, 2020
INVESTMENT IN UNCONSOLIDATED ENTITY
INVESTMENT IN UNCONSOLIDATED ENTITYNOTE 9. INVESTMENT IN UNCONSOLIDATED ENTITY
Investment in unconsolidated entity consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Future Gas Station (Beijing) Technology, Ltd
¥
31,541,850
¥
31,290,554
$
4,789,875
On August 21, 2018, the Company entered into a definitive investment agreement and a supplemental agreement (collectively, the “Agreement”) with Future Gas Station (Beijing) Technology, Ltd ("FGS”) and the other shareholders of FGS. Following full performance under the Agreement, Recon will own 43% of FGS. As consideration for increasing its affiliates’ interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 restricted ordinary shares of the Company (the “Restricted Shares”) to the other shareholders of FGS within 30 days after FGS finalizes recording the Company’s corresponding interest at the local governmental agency. If FGS does not reach certain performance goals, the Company has the right to cancel all of the Restricted Shares and without further payment. The Restricted Shares are also subject to lock-up period requirements that vary for each of FGS shareholders, from one year to three years following issuance of the Restricted Shares. FGS has finalized recording Recon’s corresponding interest at the local governmental agency, and Recon has issued 487,057 Restricted Shares in total to the other shareholders of FGS in August 2018.
On September 24, 2019, the Company signed an extension agreement with FGS and the other shareholders of FGS to postpone the Agreement to provide extra period for FGS to further fulfill the goals mentioned on the supplemental agreement. During the original contract period, FGS adjusted its operation model with an advanced improvement of its mobile applications and business model. Objected user and average Gross Merchandise Volume (“GMV”) of FGS’ mobile applications have been exceeded. FGS will need an extension to deploy its business in more provinces to complete a goal of 200 more gas stations.
On March 17, 2020, the Company signed a new supplemental agreement with FGS and the other shareholders of FGS to extend another 12 months to February 2021 for FGS and its shareholders to fulfill the goals mentioned on the supplemental agreement.
As of December 31, 2020, the Company has the investment amount of ¥35,328,290 ($5,407,961) in FGS, of which RMB 8.0 million was paid in cash, and owns 43% of the equity interests of FGS. The investments are accounted for using the equity method because the Company has significant influence, but no control of FGS. The Company recorded an income of ¥141,288 and a loss of ¥251,296 (38,468) for the six months ended December 31, 2019 and 2020 from the investment, respectively, which was included in “Gain (loss) from investment in unconsolidated entity” in the unaudited condensed consolidated statements of operations and comprehensive loss. As of the date of this report, the Company is still obliged to pay RMB 6.4 million ($979,695) to FGS.
As disclosed by the Company on February 8, 2021, and pursuant to FGS' shareholder meeting resolution dated January 13, 2021, two of the Company's subsidiaries entered into the fourth supplemental agreement to the investment agreement with FGS and FGS' founding shareholders to acquire 8% equity ownership of FGS, as an exchange for waiver of the requirement on FGS' performances goal about the number of gas stations and cancellation of the related lock-up terms on the 487,060 restricted shares of the Company (reflecting the effect of one-for-five reverse stock split) issued per the agreement signed on August 21, 2018. Based on the stock price $1.61 on January 13, 2021, the fair market value of the waived performance goal equals to $261,388. As a result, the Company owns 51% interest of FGS and immediately began to consolidate the financial results of FGS since January 2021, which will be reflected in the Company's financial results for the year ended June 30, 2021. On the consolidation date, the net book value of FGS was RMB 467,199 ($71,518) and the total consideration in exchange of 51% of FGS' interests was approximately RMB 30.4 million ($4.7 million), which consists cash of RMB 14.4 million and 487,060 of the Company's Restricted Shares. The valuation of the fair value of the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed of FGS is still in the process.

LEASES

LEASES6 Months Ended
Dec. 31, 2020
LEASES
LEASESNOTE 10. LEASES
Effective July 1, 2019, the Company adopted the new lease accounting standard. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of ¥1,228,963 ($188,126) and ¥1,228,963 ($188,126), respectively, as of July 1, 2019 with no impact on accumulated deficit. Financial position for reporting periods beginning on or after July 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance.
The Company leases office spaces and factories under non-cancelable operating leases, with terms ranging from one to three years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The table below presents the operating lease related assets and liabilities recorded on the balance sheets:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Rights of use lease assets
¥
2,549,914
¥
2,070,548
$
316,954
Operating lease liabilities – current
1,328,976
1,333,113
204,069
Operating lease liabilities – non-current
1,210,088
729,909
111,733
Total operating lease liabilities
¥
2,539,064
¥
2,063,022
$
315,802
The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2020:
June 30,
December 31,
2020
2020
Remaining lease term and discount rate:
Weighted average remaining lease term (years)
2.57
2.16
Weighted average discount rate
5
%
5
%
Operating lease costs and short-term lease costs for the six months ended December 31, 2019 were ¥718,000 and ¥498,704, respectively.
Operating lease costs and short-term lease costs for the six months ended December 31, 2020 were ¥594,614 ($91,022) and ¥523,295 ($80,105), respectively.
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2020:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
1,102,580
$
168,780
2022
742,580
113,672
2023
311,291
47,652
Total lease payments
2,156,451
330,104
Less: imputed interest
(93,429)
(14,302)
Present value of lease liabilities
2,063,022
315,802
Less: operating lease liabilities – current
(1,333,113)
(204,069)
Operating lease liabilities – non-current
¥
729,909
$
111,733

TAXES PAYABLE

TAXES PAYABLE6 Months Ended
Dec. 31, 2020
TAXES PAYABLE
TAXES PAYABLENOTE 11. TAXES PAYABLE
Taxes payable consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
VAT payable
¥
660,278
¥
853,948
$
130,719
Income tax payable
440,030
440,030
67,359
Other taxes payable
7,980
87,934
13,461
Total taxes payable
¥
1,108,288
¥
1,381,912
$
211,539

SHORT-TERM BANK LOANS

SHORT-TERM BANK LOANS6 Months Ended
Dec. 31, 2020
SHORT-TERM BANK LOANS
SHORT-TERM BANK LOANSNOTE 12. SHORT-TERM BANK LOANS
Short-term bank loans consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Bank of Nanjing (1)
¥
2,500,000
¥
4,000,000
$
612,309
Beijing Rural Commercial Bank (2)
6,000,000
6,000,000
918,464
Industrial and Commercial Bank of China (3)
1,020,000
1,020,000
156,139
China Construction Bank (4)

1,000,000
153,078
Total short-term bank loans
¥
9,520,000
¥
12,020,000
$
1,839,990
(1)
On June 1, 2020, the Company entered into a loan agreement with Bank of Nanjing to borrow ¥2,500,000 ($382,693) as working capital for one year, with maturity date of May 21, 2021. The loan bears a fixed interest rate of 4.35% per annum. On June 23, 2020, the Company entered into another loan agreement with Bank of Nanjing to borrow ¥1,500,000 ($229,616) as working capital for one year. The Company made the withdraw in an amount of ¥1,500,000 ($229,616) on July 1, 2020, which will be due on June 30, 2021. The loan bears a fixed interest rate of 4.35% per annum. The loans are guaranteed by one of the founders of the Company.
(2)
On April 23, 2020, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥6,000,000 ($918,464) as working capital for one year. The Company made the withdraw in an amount of ¥6,000,000 ($918,464) on April 30, 2020, which will be due on April 29, 2021. The loan bears a fixed interest rate of 5.655% per annum. The loan is guaranteed by one of the founders of the Company and he also pledged self-owned housing property with carrying value of approximately RMB 15.6 million ($2,388,925) as collateral for this loan.
(3)
On May 22, 2020, the Company entered into a loan agreement with Industrial and Commercial Bank of China to borrow ¥1,020,000 as working capital for six months, with maturity date of November 18, 2020. The loan bears a fixed interest rate of 4.45% per annum. The loan was subsequently repaid in full upon maturity. On November 19, 2020, the Company entered into another loan agreement with Industrial and Commercial Bank of China to borrow ¥1,020,000 ($156,139) as working capital for six months, with maturity date of May 18, 2021. The loan bears a fixed interest rate of 3.85% per annum.
(4)
On July 10, 2020, the Company entered into a loan agreement with China Construction Bank to borrow ¥1,000,000 ($153,078) as working capital for one year, with maturity date of July 10, 2021. The loan bears a fixed interest rate of 4.0525% per annum.
Interest expense for the short-term bank loan was 71,866 and ¥296,912 ($45,451) for the six months ended December 31, 2019 and 2020, respectively.

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS6 Months Ended
Dec. 31, 2020
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGSNOTE 13. SHORT-TERM BORROWINGS
Short-term borrowings due to a third party consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Short-term borrowings due to third parties:
RMB
RMB
U.S. Dollars
Short-term borrowing, 15% annual interest, due on June 23, 2021
¥
200,000
¥
215,699
$
33,019
Total short-term borrowings due to a third party
¥
200,000
¥
215,699
$
33,019
Interest expense for short-term borrowings due to a third party were ¥Nil and ¥15,699 ($2,403) for the six months ended December 31, 2019 and 2020, respectively.
Short-term borrowings due to related parties consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Short-term borrowings due to related parties:
RMB
RMB
U.S. Dollars
Short-term borrowing from a founder, 5.65% annual interest, due on December 19, 2020 *
¥
5,008,640
¥

$

Short-term borrowing from a founder, 4.55% annual interest, due on March 25, 2021
4,002,106
4,002,528
612,696
Short-term borrowing from a founder, interest-free, due on September 24, 2020*
450,000


Short-term borrowing from a founder's family member, interest-free, due on December 31, 2020*
770,000


Short-term borrowing from a founder, 4.35% annual interest, due on December 21, 2021

5,006,646
766,404
Short-term borrowing from a founder's family member, 0% annual interest, due on June 16, 2021

3,000,000
459,233
Total short-term borrowings due to related parties
¥
10,230,746
¥
12,009,174
$
1,838,333
No short-term borrowings due to related parties were guaranteed or collateralized at June 30, 2020 and December 31, 2020.
Interest expense for short-term borrowings due to related parties were ¥259,502 and ¥234,675 ($35,924) for the six months ended December 31, 2019 and 2020, respectively.
* The Company repaid the loans in full on maturity date.

LONG-TERM BORROWINGS DUE TO REL

LONG-TERM BORROWINGS DUE TO RELATED PARTY6 Months Ended
Dec. 31, 2020
LONG-TERM BORROWINGS DUE TO RELATED PARTY
LONG-TERM BORROWINGS DUE TO RELATED PARTYNOTE 14. LONG-TERM BORROWINGS DUE TO RELATED PARTY
Long-term borrowings due to related party consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Long-term borrowings due to related party:
RMB
RMB
U.S. Dollars
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.
¥
8,226,599
¥
7,825,695
$
1,197,937
Less: current portion
(847,346)
(882,900)
(135,152)
Total long-term borrowings due to related party
¥
7,379,253
¥
6,942,795
$
1,062,785
No long-term borrowings due to related party were guaranteed or collateralized at June 30, 2020 and December 31, 2020.
Interest expense for long-term borrowings due to related party was ¥389,926 and ¥355,908 ($54,481) for the six months ended December 31, 2019 and 2020, respectively.
The future maturities of long-term borrowings due to related party at December 31, 2020 are as follows:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
882,900
$
135,152
2022
933,170
142,847
2023
1,019,695
156,092
2024
1,114,243
170,565
2025
1,217,558
186,381
Thereafter
2,658,129
406,900
Total
¥
7,825,695
$
1,197,937

ORDINARY SHARES

ORDINARY SHARES6 Months Ended
Dec. 31, 2020
ORDINARY SHARES
ORDINARY SHARESNOTE 15. ORDINARY SHARES
Stock offering
On August 21, 2018, the Company entered into a definitive investment agreement and a supplemental agreement (collectively, the "Agreement") with FGS and the other shareholders of FGS. Following full performance under the Agreement, Recon will own 43% of FGS. As consideration for increasing its affiliates' interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 restricted ordinary shares of the Company (the "Restricted Shares") to the other shareholders of FGS within 30 days after FGS finalizes recording the Company's corresponding interest at the local governmental agency. If FGS does not reach certain performance goals, the Company has the right to cancel without further payment part or all of the Restricted Shares. The Restricted Shares are also subject to lock-up period requirements that vary for each FGS shareholder, from two and a half years to four and a half years following issuance of the Restricted Shares under the supplemental agreement dated March 17, 2020. FGS has finalized recording Recon's corresponding interest at the local governmental agency, and Recon issued 487,057 Restricted Shares in total to the other shareholders of FGS at a price of $6.4375 per restricted share on September 21, 2018.
On December 10, 2019, the Company's Board approved to effect a one-for-five reverse stock split of its ordinary shares (the "Reverse Stock Split") with the market effective date of December 27, 2019, such that the number of the Company's ordinary shares is decreased from 100,000,000 to 20,000,000 and the par value of each ordinary share is increased from US$0.0185 to US$0.0925. As a result of the Reverse Stock Split, each five pre-split ordinary shares outstanding were automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholder. No fractional ordinary shares were issued to any shareholders in connection with the reverse stock split. Each shareholder was entitled to receive one ordinary share in lieu of the fractional share that would have resulted from the reverse stock split. As of December 26, 2019 (immediately prior to the effective date), there were 23,049,639 ordinary shares outstanding, and the number of ordinary shares outstanding after the Reverse Stock Split is 4,611,720, taking into account of the effect of rounding fractional shares into whole shares. In addition, all options and any other securities of the Company outstanding immediately prior to the Reverse Stock Split (to the extent they don't provide otherwise) will be appropriately adjusted by dividing the number of ordinary shares into which the options and other securities are exercisable by 5 and multiplying the exercise price thereof by 5, as a result of the Reverse Stock Split.
On May 21, 2020 and June 26, 2020, the Company and certain institutional investors (the "Purchasers") entered into certain securities purchase agreements, pursuant to which the Company sold to such Purchasers an aggregate of 911,112 and 1,680,000 ordinary shares, respectively, par value $0.0925 per share in a registered direct offering and warrants to purchase up to 911,112 and 1,680,000 ordinary shares in a concurrent private placement, respectively, for gross proceeds of approximately $2.1 million and $2.1 million, respectively, before deducting the placement agent's fees and other estimated offering expenses of approximately $0.3 million and $0.2 million, respectively. The net proceeds from these purchase agreements were approximately $1.7 million and $1.9 million, respectively.
Appropriated Retained Earnings
According to the Memorandum and Articles of Association, the Company is required to transfer a certain portion of its net profit, as determined under PRC accounting regulations, from current net income to the statutory reserve fund. In accordance with the PRC Company Law, companies are required to transfer 10% of their profit after tax, as determined in accordance with PRC accounting standards and regulations, to the statutory reserves until such reserves reach 50% of the registered capital or paid-in capital of the companies. As of June 30, 2020 and December 31, 2020, the balance of total statutory reserves was ¥4,148,929 and ¥4,148,929 ($635,107), respectively.

COMMON STOCK PURCHASE WARRANTS

COMMON STOCK PURCHASE WARRANTS ISSUED TO INVESTORS6 Months Ended
Dec. 31, 2020
COMMON STOCK PURCHASE WARRANTS ISSUED TO INVESTORS
COMMON STOCK PURCHASE WARRANTS ISSUED TO INVESTORSNOTE 16. COMMON STOCK PURCHASE WARRANTS ISSUED TO INVESTORS
In May and June 2020, the Company consummated two offerings. In connection with the offering, the Company issued to the investors warrants to purchase an aggregate of 911,112 common shares at an exercise price of $2.25 per common share, which was amended to $1.25 per common share on the second offering on June 30, 2020. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 26, 2020 and expire on November 25, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,689,389. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.40%), (2) expected warrant life of 5.5 years, (3) expected volatility of 99.50%, and (4) expected dividend yield of 0. As of December 31, 2020, 888,889 common shares were issued upon exercises of warrants and 22,223 warrants were outstanding. As of the date of this report, all warrants were exercised and all the underlying shares were issued.
In June 2020, the Company issued to the investors warrants to purchase an aggregate of 1,680,000 common shares at an exercise price of $1.25 per common share. These warrants are exercisable at any time, and from time to time, in whole or in part, commencing on June 30, 2020 and expire on December 30, 2025. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $1,639,333. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.35%), (2) expected warrant life of 5.5 years, (3) expected volatility of 104.26%, and (4) expected dividend yield of 0. As of December 31, 2020, 325,000 common shares were issued upon exercises of warrants and 1,355,000 warrants were outstanding. As of the date of this report, 1,308,111 warrants were exercised and 371,889 warrants were outstanding.

CONVERTIBLE NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE6 Months Ended
Dec. 31, 2020
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLENOTE 17. CONVERTIBLE NOTES PAYABLE
On November 25, 2020, the Company and certain accredited investors (the “Investors”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company sold to the Investors, and the Investors purchased from the Company, in an unregistered private transaction, convertible promissory notes (the “Convertible Notes”) with an aggregate principal amount of $6,485,000, convertible into ordinary shares, $0.0925 par value per share of the Company at a rate of $0.71 per ordinary share, upon the terms and subject to the limitations and conditions set forth in such Convertible Notes.
The Convertible Notes bears interest at a rate of 12% per year and will have a term of six (6) months. The Company will repay the Convertible Notes principal and interest in six (6) equal monthly payments, subject to earlier conversion or repayment. The Holders have the right to convert the Convertible Notes, and the Company has the right to repay the Convertible Notes without penalty, in whole or in part during the term of the Notes. In the event of such early conversion or repayment, the Company has the right to make such payment in shares, cash, or combination of shares and cash, and the amount payable will equal the amount of accrued and outstanding principal and interest on such repaid amount, and the Company will not have any make-whole obligations. Assuming payment of principal and interest entirely in ordinary shares and no early conversion or repayment, the Company would issue up to an aggregate of 9,466,137 ordinary shares in connection with the Convertible Notes.
As of December 31, 2020, the Company received principal in full from the Investors. As the fair value of equity component is immaterial, the Company allocated the entire proceeds to the debt component and recorded convertible notes payable at its fair value amounted to $6,485,000 and interests payable amount to $12,951 in the accompanying unaudited condensed consolidated interim balance sheet as of December 31,2020. On January 28, 2021, the Company received the conversion notices from the Investors, and ordinary shares totaling 9,225,338 were issued by the Company to the Investors equaling principal and interests amounted to $6,549,990, after the issuance, all the outstanding principle and interests have been converted.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION6 Months Ended
Dec. 31, 2020
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATIONNOTE 18. STOCK-BASED COMPENSATION
Stock-Based Awards Plan
The following is a summary of the stock options activity:
Weighted
Average
Exercise Price
Stock Options
Shares
Per Share
Outstanding as of June 30, 2019
163,120
$
15.20
Granted


Forfeited


Exercised


Expired
53,600
25.75
Outstanding as of June 30, 2020
109,520
$
10.02
Granted


Forfeited


Exercised


Expired


Outstanding as of December 31, 2020
109,520
$
10.02
The following is a summary of the status of options outstanding and exercisable at December 31, 2020:
Outstanding Options
Exercisable Options
Average
Average
Remaining
Remaining
Average Exercise
Contractual
Average Exercise
Contractual
Price
Number
life (Years)
Price
Number
life (Years)
$
14.80
29,520
1.24
$
14.80
29,520
1.24
$
8.25
80,000
4.09
$
8.25
80,000
4.09
109,520
The Share-based compensation expense recorded for stock options granted were both ¥Nil for the six months ended December 31, 2019 and 2020, respectively. No unrecognized share-based compensation for stock options as of December 31, 2020.
Restricted Shares to Senior Management
As of December 31, 2020, the Company has granted restricted shares of common stock to senior management and employees as follows:
On October 13, 2017, the Company granted 180,000 restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $919,800 based on the closing stock price $5.11 at October 13, 2017. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. All granted shares under this plan are fully vested on October 13, 2020.
On August 21, 2018, the Company granted 391,200 restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was $2,523,240 based on the closing stock price $6.45 at August 21, 2018. These restricted shares will vest over three years with one-third of the shares vesting every year from the grant date. As of December 31, 2020, 260,800 shares were vest and 130,400 will not be vested until August 21, 2021.
250,086 and nil restricted shares were issued and outstanding for the six months ended December 31, 2019 and 2020, respectively, for all the plans mentioned above.
The share-based compensation expense recorded for restricted shares issued for management and employees were ¥4,057,093 and ¥3,403,513 ($521,001) for the six months ended December 31, 2019 and 2020, respectively. The total unrecognized share-based compensation expense of restricted shares issued for management and employees as of December 31, 2020 was approximately ¥3.51 million ($0.5 million), which is expected to be recognized over a weighted average period of approximately 0.64 years.
Restricted Shares for service
As of December 31, 2020, the Company has granted restricted ordinary shares to consultants as follows:
On August 27, 2018, the Company approved the grant of 5,000 restricted shares with a value of $32,000 based on the closing stock price of $6.40 on August 27, 2018 to a company as payment for promotion PR/IR service. The vesting period of these shares was one year from the date of contract. 5,000 restricted shares were issued under this plan on August 27, 2018 and all granted shares under this plan are fully vested by August 27, 2019.
The Share-based compensation expense recorded for restricted shares issued for service were ¥33,927 and ¥nil for the six months ended December 31, 2019 and 2020, respectively. The total unrecognized share-based compensation expense of restricted shares issued for service as of December 31, 2020 was approximately ¥Nil.
Following is a summary of the restricted shares granted:
Restricted stock grants
Shares
Non-vested as of June 30, 2019
821,644
Granted

Vested
(500,844)
Non-vested as of June 30, 2020
320,800
Granted

Vested
(190,400)
Non-vested as of December 31, 2020
130,400
The following is a summary of the status of restricted stock at December 31, 2020:
Outstanding Restricted Shares
Average
Remaining
Fair Value per
Amortization
Share
Number
Period (Years)
$
6.45
130,400
0.64
130,400

INCOME TAX

INCOME TAX6 Months Ended
Dec. 31, 2020
INCOME TAX
INCOME TAXNOTE 19. INCOME TAX
The Company is not subject to any income taxes in the United States or the Cayman Islands and had minimal operations in jurisdictions other than the PRC. BHD and Nanjing Recon are subject to PRC’s income taxes as PRC domestic companies. The Company follows Implementing Rules for the Enterprise Income Tax Law (“Implementing Rules”), which took effect on January 1, 2008 and unified the income tax rate for domestic-invested and foreign-invested enterprises at 25%.
Nanjing Recon was approved as a government-certified high-technology company and is subject to a reduced income tax rate of 15% through November 30, 2019. Nanjing Recon reapplied for a high-technology company certificate, and the new certificate was approved as November 22, 2019 and will expire on November 22, 2022.
As approved by the domestic tax authority in the PRC, BHD was recognized as a government-certified high-technology company on November 25, 2009 and is subject to a reduced income tax rate of 15% through November 25, 2018. BHD reapplied for a high-technology company certificate, and the new certificate was approved as October 31, 2018 and will expire on October 31, 2021.
Loss before provision for income taxes consisted of:
December 31,
December 31,
December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Outside China areas
¥
(7,624,668)
¥
(6,440,586)
$
(985,906)
China
904,020
(3,699,278)
(566,276)
Total
¥
(6,720,648)
¥
(10,139,864)
$
(1,552,182)
Deferred tax asset, net is composed of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Deferred tax assets:
Allowance for doubtful receivables
¥
1,180,160
¥
625,375
$
95,730
Impairment loss from investment in unconsolidated entity
605,660
605,660
92,713
Net operating loss carryforwards
10,441,633
10,237,274
1,567,095
Subtotal
¥
12,227,453
¥
11,468,309
$
1,755,538
Less: Valuation allowance
(12,162,660)
(11,389,897)
(1,743,535)
Total deferred tax assets
¥
64,793
¥
78,412
$
12,003
Deferred tax Liability:
Accelerated amortization of intangible assets
¥
(64,793)
¥
(78,412)
$
(12,003)
Total deferred tax liability
¥
(64,793)
¥
(78,412)
(12,003)
Deferred tax assets, net
¥

¥

$

The Company’s income tax expense (benefit) is comprised of the following:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Current income tax provision (benefit)
¥
316,799
¥
(98,338)
$
(15,053)
Income tax expenses (benefit)
¥
316,799
¥
(98,338)
$
(15,053)

NON-CONTROLLING INTEREST

NON-CONTROLLING INTEREST6 Months Ended
Dec. 31, 2020
NON-CONTROLLING INTEREST
NON-CONTROLLING INTERESTNOTE 20. NON-CONTROLLING INTEREST
Non-controlling interest consisted of the following:
As of June 30, 2020
Nanjing
Gan Su
Qinghai
BHD
Recon
BHD
BHD
Total
Total
RMB
RMB
RMB
RMB
RMB
U.S. Dollars
Paid-in capital
¥
1,651,000
¥
200,000
¥
4,755,000
¥

¥
6,606,000
$
934,406
Unappropriated retained earnings
3,477,493
3,616,002
(2,100,871)
(953,395)
4,039,229
571,342
Accumulated other comprehensive loss
(18,850)
(11,853)


(30,703)
(4,343)
Total non-controlling interests
¥
5,109,643
¥
3,804,149
¥
2,654,129
¥
(953,395)
¥
10,614,526
$
1,501,405
As of December 31, 2020
Nanjing
Gan Su
Qinghai
BHD
Recon
BHD
BHD
Total
Total
RMB
RMB
RMB
RMB
RMB
U.S. Dollars
Paid-in capital
¥
1,651,000
¥
200,000
¥
4,805,000
¥

¥
6,656,000
$
1,018,883
Unappropriated retained earnings
3,477,493
3,616,002
(3,078,512)
(1,081,628)
2,933,355
449,030
Accumulated other comprehensive loss
(18,850)
(11,853)

-
(30,703)
(4,700)
Total non-controlling interests
¥
5,109,643
¥
3,804,149
¥
1,726,488
¥
(1,081,628)
¥
9,558,652
$
1,463,213
The Company received capital contribution from non-controlling shareholders of Gan Su BHD amounted to ¥405,000 and ¥50,000 ($7,654) during the six months ended December 31, 2019 and 2020, respectively.

CONCENTRATIONS

CONCENTRATIONS6 Months Ended
Dec. 31, 2020
CONCENTRATIONS
CONCENTRATIONSNOTE 21. CONCENTRATIONS
For the six months ended December 31, 2019, China National Petroleum Corporation (“CNPC”) represented approximately 62.6%, China Petroleum & Chemical Corporation (“SINOPEC”) represented approximately 13.1% and another customer represented approximately 19.7% of the Company’s revenue, respectively.
For the six months ended December 31, 2020, CNPC represented approximately 36.7% and SINOPEC represented approximately 20.9%, respectively. At December 31, 2020, CNPC accounted for 29.8% and another one customer accounted for 11.0% of the Company’s trade accounts receivable, net, respectively.

COMMITMENTS AND CONTINGENCY

COMMITMENTS AND CONTINGENCY6 Months Ended
Dec. 31, 2020
COMMITMENTS AND CONTINGENCY
COMMITMENTS AND CONTINGENCYNOTE 22. COMMITMENTS AND CONTINGENCY
(a) Contingency
The Labor Contract Law of the PRC requires employers to assure the liability of severance payments if employees are terminated and have been working for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month of severance pay for each year of the service provided by the employees. As of December 31, 2020, the Company estimated its severance payments of approximately ¥4.1 million ($0.6 million) which has not been reflected in its unaudited condensed consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future.
(b) Purchase commitment
The total future minimum purchase commitment under the non-cancellable purchase contracts as of December 31, 2020 are payable as follows:
Minimum purchase
Twelve months ending December 31,
commitment
2021
¥
5,458,985
$
835,647
Thereafter


Total minimum payments required
¥
5,458,985
$
835,647
(c) Office Leases Commitment - short term
The Company entered into several non-cancellable operating lease agreements for office spaces and factories. Future payments under such leases were included in lease liabilities as disclosed in Note 14, other than those within under lease agreements within one year which are disclosed as follows as of December 31, 2020:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
161,004
$
24,646
Total
¥
161,004
$
24,646

RELATED PARTY TRANSACTIONS AND

RELATED PARTY TRANSACTIONS AND BALANCES6 Months Ended
Dec. 31, 2020
RELATED PARTY TRANSACTIONS AND BALANCES
RELATED PARTY TRANSACTIONS AND BALANCESNOTE 23. RELATED PARTY TRANSACTIONS AND BALANCES
Sales to related party – sales to related party consisted of the following:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd.
¥

¥
85,657
$
13,112
Total revenues from related party
¥

¥
85,657
$
13,112
Leases from related parties - The Company has various agreements for the lease of office space owned by the founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥122,750 with annual rental expense at ¥1.47 million ($0.23 million).
The details of leases from related parties are as below:
Monthly Rent
Monthly Rent
Lessee
Lessor
Rent Period
RMB
USD
Nanjing Recon
A founder
April 1, 2020 - March 31, 2022
¥
40,000
$
6,123
BHD
A founder
Jan 1, 2021- Dec 31, 2022
24,000
3,674
BHD
Founders' family member
Jan 1, 2021- Dec 31, 2022
48,750
7,463
Recon-BJ
A founder
July 1, 2020-Jun 1 ,2021
10,000
1,531
As of June 30, 2020, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥803,503 and ¥803,503, respectively.
As of December 31, 2020, the operating lease ROU assets and corresponding operating lease liabilities of leases from related parties was ¥580,888 ($88,921) and ¥580,888 ($88,921), respectively.
Guarantee/collateral related parties – The Company’s founders provide guarantee and collateral for the Company’s short-term bank loans (see Note 12).

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES6 Months Ended
Dec. 31, 2020
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIESNOTE 24. VARIABLE INTEREST ENTITIES
VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.
Summary information regarding consolidated VIEs is as follows:
June 30, 2020
December 31, 2020
December 31, 2020
RMB
RMB
U.S. Dollars
ASSETS
Current Assets
Cash
¥
6,388,098
¥
7,581,391
$
1,160,539
Notes receivable
4,180,885
7,789,997
1,192,472
Trade accounts receivable, net
44,031,079
31,578,187
4,833,905
Trade accounts receivable- related party, net
3,068,920


Inventories, net
1,985,723
2,117,754
324,180
Other receivables, net
6,342,009
10,977,568
1,680,417
Loans to third parties
3,200,377
950,000
145,423
Purchase advances, net
75,195
82,437
12,619
Contract assets, net
31,537,586
45,621,966
6,983,690
Prepaid expenses
42,294


Total current assets
100,852,166
106,699,300
16,333,245
 
 
Property and equipment, net
29,756,879
29,078,178
4,451,210
Land use right, net
1,280,648
1,267,028
193,953
Investment in unconsolidated entity
4,000,000
4,000,000
612,309
Long-term other receivables, net
3,640


Right of use assets
2,549,914
2,070,548
316,954
Total Assets
¥
138,443,247
¥
143,115,054
$
21,907,671
LIABILITIES
Short-term bank loan
¥
9,520,000
¥
12,020,000
$
1,839,990
Trade accounts payable
18,903,080
15,455,630
2,365,907
Other payables
1,115,209
881,898
134,999
Other payable- related parties
3,113,460
529,570
81,065
Advance from customers
3,486,033
6,686,592
1,023,566
Accrued payroll and employees' welfare
850,841
546,716
83,690
Taxes payable
1,108,265
1,382,008
211,554
Short-term borrowings
200,000
215,699
33,019
Short-term borrowings - related parties
10,230,746
12,009,174
1,838,333
Long-term borrowings - related party - current portion
847,346
882,900
135,152
Operating lease liabilities - current
1,328,976
1,333,113
204,069
Total current liabilities
50,703,956
51,943,300
7,951,344
 
 
Operating lease liabilities - non-current
1,210,088
729,909
111,733
Long-term borrowings - related party
7,379,253
6,942,795
1,062,785
Total Liabilities
¥
59,293,297
¥
59,616,004
$
9,125,862
The financial performance of VIEs reported in the unaudited condensed consolidated statement of operations and comprehensive loss for the six months ended December 31, 2019 includes revenues of ¥30,405,153, operating expenses of ¥10,137,918, and net loss of ¥371,397. The financial performance of VIEs reported in the unaudited condensed consolidated statement of operations and comprehensive loss for the six months ended December 31, 2020 includes revenues of ¥25,045,362 ($3,833,878), operating expenses of ¥8,008,563 ($1,225,930), and net loss of ¥3,452,609 ($528,516).

SEGMENT REPORTING

SEGMENT REPORTING6 Months Ended
Dec. 31, 2020
SEGMENT REPORTING
SEGMENT REPORTINGNOTE 25. SEGMENT REPORTING
ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based on management’s assessment, the Company has determined that it has three operating segments: automation product and software, equipment and accessories and oilfield environmental protection.
The following tables present summary information by segment for the six months ended December 31, 2019 and 2020, respectively:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Automation product and software
¥
22,572,055
¥
12,618,460
$
1,931,601
Equipment and accessories
7,807,013
9,754,851
1,493,247
Oilfield environmental protection
26,085
2,795,968
427,999
Total revenue
¥
30,405,153
¥
25,169,279
$
3,852,847
For the six months ended December 31, 2020
Automation
Equipment
Oilfield
product and
and
environmental
software
accessories
protection
Total
RMB
RMB
RMB
RMB
Revenue
¥
12,618,460
¥
9,754,851
¥
2,795,968
¥
25,169,279
Cost of revenue and related tax
9,483,892
6,713,438
2,254,909
18,452,239
Gross profit
¥
3,134,568
¥
3,041,413
¥
541,059
¥
6,717,040
Depreciation and amortization
¥
57,223
¥
308,956
¥
1,003,411
¥
1,369,590
Total capital expenditures
¥
19,014
¥
53,760
¥
302,795
¥
375,569
Timing of revenue recognition
Goods transferred at a point in time
¥
2,293,393
¥
9,754,851
¥

¥
12,048,244
Services rendered over time
10,325,067

2,795,968
13,121,035
Total revenue
¥
12,618,460
¥
9,754,851
¥
2,795,968
¥
25,169,279
For the six months ended December 31, 2019
Automation
Equipment
Oilfield
product and
and
environmental
software
accessories
protection
Total
RMB
RMB
RMB
RMB
Revenue
¥
22,572,055
¥
7,807,013
¥
26,085
¥
30,405,153
Cost of revenue and related tax
13,991,321
4,174,481
271,439
18,437,241
Gross profit
¥
8,580,734
¥
3,632,532
¥
(245,354)
¥
11,967,912
Depreciation and amortization
¥
47,122
¥
350,850
¥
13,620
¥
411,592
Total capital expenditures
¥
12,967
¥

¥
1,297,663
¥
1,310,630
Timing of revenue recognition
Goods transferred at a point in time
¥
5,978,167
¥
7,807,013
¥

¥
13,785,180
Services rendered over time
16,593,888

26,085
16,619,973
Total revenue
¥
22,572,055
¥
7,807,013
¥
26,085
¥
30,405,153
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Total assets:
Automation product and software
¥
81,743,307
¥
96,462,627
$
14,766,242
Equipment and accessories
61,578,632
77,750,305
11,901,809
Oilfield environmental protection
51,092,865
63,338,916
9,695,754
Total Assets
¥
194,414,804
¥
237,551,848
$
36,363,805

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS6 Months Ended
Dec. 31, 2020
SUBSEQUENT EVENTS
SUBSEQUENT EVENTSNOTE 26. SUBSEQUENT EVENTS
On January 21, 2021, the Company issued 59,998 shares and 128,664 shares to the Company’s employees, which pertains to the last batch of restricted shares vested on October 13, 2020 under the restricted shares plans granted on October 13, 2017 and the second batch of restricted shares vested on August 21, 2020 under the restricted shares plans granted on August 21, 2018, respectively.
On April 5, 2021 at 9:00 a.m., Beijing Time (9 p.m. ET on April 4, 2021), at Room 1902, King Long International Mansion, 9 Fulin Road, Beijing, China , the Company had its annual meeting of shareholders for the fiscal year ended June 30, 2020 and adopted the following resolutions:
1) To elect two Class II members of the board of directors, Mr. Jijun Hu and Mr. Nelson N.S. Wong, to serve a term expiring at the Annual Meeting following the fiscal year ending June 30, 2023 or until their successors are duly elected and qualified;
2) To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2021;
3) To approve a special resolution that the authorized share capital of the Company be amended from US$1,850,000 divided into 20,000,000 ordinary shares of a nominal or par value of US$0.0925 each (the “Ordinary Shares”), to US$15,725,000 divided into 150,000,000 Class A ordinary shares of a nominal or par value of US$0.0925 each (the “Class A Ordinary Shares”) and 20,000,000 Class B ordinary shares of a nominal or par value of US$0.0925 each (the “Class B Ordinary Shares”) (the “Amendment to the Authorized Share Capital”), by (i) the conversion into stock of each issued and outstanding Ordinary Share and their immediate reconversion into a Class A Ordinary Share; (ii) the re-designation of each authorized and unissued Ordinary Share as a Class A Ordinary Share; (iii) the creation of additional 130,000,000 Class A Ordinary Shares; and (iv) the creation of 20,000,000 Class B Ordinary Shares;
4) To approve a special resolution that the Third Amended and Restated Memorandum and Articles of Association of the Company (the “Third M&AA”) annexed hereto as Annex A which incorporate amendments including but not limited to Amendment to the Authorized Share Capital, be and hereby are, approved and adopted with immediate effect in substitution for the Second Amended and Restated Memorandum and Articles of Association of the Company (the “Second M&AA”);
5) To approve an ordinary resolution that the 2021 Equity Incentive Plan (the “2021 Plan”) annexed hereto as Annex B is hereby approved and adopted;and
6) To transact any other business as may properly come before the meeting in accordance with Article 47 of the Company’s Second Amended and Restated Articles of Association (the “Second AA”).

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)6 Months Ended
Dec. 31, 2020
SIGNIFICANT ACCOUNTING POLICIES
Basis of PresentationBasis of Presentation - The accompanying unaudited condensed consolidated interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied.
Unaudited Interim Condensed Financial StatementsUnaudited Interim Condensed Financial Statements - The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements, and, in the opinion of management, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company's financial position as of December 31, 2020 and its results of operations and cash flows for the six months ended December 31, 2020 and 2019. The financial data and other financial information disclosed in the notes to these condensed consolidated interim financial statements related to the six-month periods are also unaudited. The results of operations for the six months ended December 31, 2020 are not necessarily indicative of the results expected for the full fiscal year or any other period. The unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's consolidated financial statements and the notes thereto for the years ended June 30, 2020 and 2019.
Principles of ConsolidationPrinciples of Consolidation – The unaudited condensed consolidated financial statements include the accounts of the Company, all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.
Variable Interest EntitiesVariable Interest Entities - A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company performs ongoing assessments to determine whether an entity should be considered a VIE and whether an entity previously identified as a VIE continues to be a VIE and whether the Company continues to be the primary beneficiary.
Assets recognized as a result of consolidating VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.
Currency TranslationCurrency Translation - The Company’s functional currency is the Chinese Yuan (“RMB”) and the accompanying unaudited condensed consolidated financial statements have been expressed in Chinese Yuan. The unaudited condensed consolidated financial statements as of and for the six months ended December 31, 2020 have been translated into United States dollars (“U.S. dollars”) solely for the convenience of the readers. The translation has been made at the rate of ¥6.5326 = US$1.00, the approximate exchange rate prevailing on December 31, 2020. These translated U.S. dollar amounts should not be construed as representing Chinese Yuan amounts or that the Chinese Yuan amounts have been or could be converted into U.S. dollars.
Estimates and AssumptionsEstimates and Assumptions - The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP, which requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include allowance for doubtful accounts related to trade accounts receivable, other receivables and purchase advances, allowance for inventory, the useful lives of property and equipment, valuation allowance for deferred tax assets, impairment assessment for long-lived assets, the discount rate for lease and investment, valuation of the convertible notes and the fair value of share- based payments. The use of estimates is an integral component of the financial reporting process; actual results could differ from those estimates.
The key assumptions underlying the Company’s accounting for material arrangements and the reasonably likely material effects of resolving any uncertainties on the Company’s allowance for doubtful accounts related to purchase advances. The production of the Company’s products requires custom-made equipment from its suppliers. To ensure that it can secure the required customized equipment, the Company often needs to make full prepayment for its intended purchases. As a standard practice in the petroleum extraction industry, the Company generally must submit a bid in order to secure the sales contract. The bidding process generally takes between one month to one year and the timing depends on the size of the overall project, which timing and size are generally controlled by its client. In order to secure timely purchase delivery and to meet its product delivery schedule, the Company normally prepays for the purchase advances if the Company believes that it is more than likely to win the bid for the sales contract which is accounted as pre-contract costs. After winning the bid and securing the sale contract, the Company normally needs to deliver its products approximately within one week to six months. Based on the Company’s historical experience, the Company generally is able to realize its purchase advances on the customized equipment that it orders. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.
Fair Values of Financial InstrumentsFair Values of Financial Instruments - The US GAAP accounting standards regarding fair value of financial instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The three levels of inputs are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable.
Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
The Company measures certain financial assets, including investments under the equity method on other-than-temporary basis, intangible assets and fixed assets at fair value when an impairment charge is recognized.
The carrying amounts reported in the consolidated balance sheets for trade accounts receivable, other receivables, purchase advances, trade accounts payable, convertible notes payable, accrued liabilities, advances from customers, investment payable, short-term bank loan and short-term borrowings approximate fair value because of the immediate or short-term maturity of these financial instruments.
CashCash - Cash includes cash on hand consisting of coins, currency, undeposited checks, money orders and drafts, demand deposits in banks, certain short-term highly liquid investments and cash in transit.
Trade Accounts and Other Receivables , NetTrade Accounts and Other Receivables, Net - Accounts receivable are carried at original invoiced amount less a provision for any potential uncollectible amounts. Accounts are considered to be under certain credit risk when the related receivables are more than a year old. Provision is made against trade accounts and other receivables to the extent they are considered to be doubtful. Accounts are written off after extensive efforts at collection. Other receivables arise from transactions with non-trade customers.
Notes ReceivableNotes Receivable - Notes receivable represent short-term notes receivable issued by reputable financial institutions that entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally range from three to six months from the date of issuance.
Purchase Advances, NetPurchase Advances, Net - Purchase advances are the amounts prepaid to suppliers for business activities, such as standard raw materials, supplies and services. These types of prepayments will be expensed when those products or services have been rendered or consumed.
Inventories, NetInventories, Net - Inventories are stated at the lower of cost or net realizable value, on a first-in-first-out basis. The methods of determining inventory costs are used consistently from year to year. Allowance for inventory obsolescence is provided when the market value of certain inventory items is lower than the cost.
Property and Equipment, NetProperty and Equipment, Net - Property and equipment are stated at cost. Depreciation on motor vehicles and office equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets.
Items
Useful life
Motor vehicles
5-10 years
Office equipment
2-5 years
Production equipment
10-20 years
Land Use Rights, NetLand Use Rights, Net - According to the Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights which are usually prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line method. The estimated useful life is 50 years, based on the term of the land use rights.
Long-Lived AssetsLong-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset. There were no impairments at June 30, 2020 and December 31, 2020.
Long-term InvestmentsLong-term Investments
- Cost method investment - For an investee over which the Company does not have significant influence and a controlling interest, the Company carries the investment at cost and recognizes income for any dividend received from the distribution of the investee’s earnings.
The Company reviews its cost method investment for impairment whenever an event or circumstance indicates that an other-than-temporary impairment has occurred. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its cost method investment. An impairment charge is recorded if the carrying amount of an investment exceeds its fair value and such excess is determined to be other-than-temporary.
- Equity method investment - For an investee over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate.
An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company did not record impairment losses on its equity method investment during the six months ended December 31, 2019 and 2020. The Company recorded an approximately ¥141,288 investment income and (¥251,296) ($38,468) investment loss on its equity method investment in unconsolidated entity during the six months ended December 31, 2019 and 2020.
Revenue RecognitionRevenue Recognition - In accordance with ASC 606, “Revenue from Contracts with Customers”, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The core principle underlying the new revenue recognition Accounting Standards Update ("ASU") is that the Company recognizes revenue to represent the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when goods or services are provided to a customer.
Disaggregation of Revenues
Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The following items represent the Company’s revenues disaggregated by revenue source. In accordance with ASC 606-10-50-5, the Company selects categories to present disaggregated revenue that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors and delivery conditions of products and fulfillment of obligations.
The Company’s disaggregation of revenues for the six months ended December 31, 2019 and 2020 is disclosed in Note 25.
Automation Products and Software; Equipment and Accessories
The Company generates revenues primarily through delivery of standard or customized products and equipment, including automation products, furnaces and related accessories. Revenue is recognized when products are delivered, and acceptance reports are signed off by customers.
The sale of automation products or specialized equipment when combined with services represent a single performance obligation for the development and construction of a single asset. The Company may also provide design or installation services to clients as there may be such obligation in contracts. The promises to transfer the goods and provision of services are not separately identifiable, which is evidenced by the fact that the Company provides significant services of integrating the goods and services into a single deliverable for which the customer has contracted. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of goods and services to the customer.
Oilfield Environmental Protection Service
The Company provides wastewater treatment and oily sludge disposal service to oilfield and chemical industry companies and generates revenue from special equipment, self-developed chemical products and supporting service, transfer and treatment of oily sludge. Revenue is recognized when contract obligations have been performed. For such sales arrangements, the Company recognizes revenue using input method, based on the relationship between actual costs incurred compared to the total estimated costs for the contract. Such method is adopted because the Company believes it best depicts the transfer of services to the customer.
Arrangements with Multiple Performance Obligations
Contracts with customers may include multiple performance obligations. For such arrangements, the Company will allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin.
Contract Balances
Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs.
The following table provides information about contract assets and contract liabilities from contracts with customers:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Contract assets
¥
31,537,586
¥
45,621,966
$
6,983,690
Contract liabilities
¥
3,486,033
¥
6,686,592
$
1,023,566
Contract Assets, net - The Company recognizes an asset from the costs incurred to fulfill a contract when those costs meet all of the following criteria: (i) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify; (ii) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.
-
Pre-Contract Costs - Pre-contract costs are the amounts prepaid to suppliers for purchases of customized equipment in anticipation of obtaining planned contracts for the Company's hardware and software revenues. If it subsequently confirms that the Company is unable to secure the planned contracts with a customer after making the advance payments for these planned contracts, the Company evaluates the probable recoverability of the pre-contract cost and charges to expenses when the Company determines that the recovery of such pre-contract cost is improbable.
-
Executed Contract Costs - Direct costs, such as material, labor, depreciation and amortization and subcontracting costs and indirect costs allocable to contracts include the costs of contract supervision, tools and equipment, supplies, quality control and inspection, insurance, repairs and maintenance for quality assurance purposes before clients' initial acceptance. Once products are delivered, installed and debugged for intended use and accepted by a client, which may last from weeks to months (this process is decided by the client's individual project construction arrangement), the Company records revenue based on the contract or the final clients' acceptance. Minor costs for repair during the maintenance period after initial acceptance are recorded as cost of goods sold as they are incurred. All other general and administrative costs and selling costs are charged to expenses as incurred. The Company generally ships its products approximately one week to six months after production begins and the timing depends on the size of the overall project.
Contract liabilities - Contract liabilities are recognized for contracts where payment has been received in advance of performance under the contract. The Company's contract liabilities consist primarily of the Company's unsatisfied performance obligations as of the balance sheet dates. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.
Performance Obligations - Performance obligations include delivery of products and provision of services. The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. This occurs when the control of the goods and services have been transferred to the customer. Accordingly, revenue for sale of goods is generally recognized upon shipment or delivery depending on the shipping terms of the underlying contract, and revenue for provision of services is recognized over the service period. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and providing services.
Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenues, and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations and comprehensive loss. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company generally offers assurance-type warranties for its products. The specific terms and conditions of those warranties vary depending upon the product. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount accrued for expected returns and warranty claims was immaterial as of December 31, 2020. The amount of revenue recognized during the six months ended December 31, 2019 and 2020 that was previously included within contract liability balances was ¥nil and ¥1,870,891 ($286,391), respectively.
Practical Expedients Elected
Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year and not significant.
Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are typically less than one year in length, consideration will not be adjusted. The Company’s contracts include a standard payment term of 90 days to 180 days; consequently, there is no significant financing component within contracts.
Share-Based CompensationShare-Based Compensation - Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight–line basis over the requisite service period for the entire award. The Company has elected to recognize compensation expenses using the Black-Scholes valuation model estimated at the grant date based on the award’s fair value
Research and Development ExpensesResearch and Development Expenses - Research and development expenses relating to improving development efficiency and the quality of the Company’s products and services, including the design of downhole automation platform systems and chemical products used for waste water treatment, are expensed as incurred.
Shipping and Handling CostsShipping and Handling Costs - Shipping and handling cost incurred to ship products to customers are included in selling and distribution expenses. Shipping and handling expenses were ¥196,852 and ¥79,180 ($12,121) for the six months ended December 31, 2019 and 2020, respectively.
LeasesLeases - The Company follows FASB ASC No. 842, Leases (“Topic 842”). The Company leases office spaces, which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of December 31, 2020 and June 30, 2020.
Investment PayableInvestment Payable - Investment payable is comprised of obligations due to the investee for the purchase of equity interest in the ordinary course of investment.
Income TaxesIncome Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company has not been subject to any income taxes in the United States or the Cayman Islands.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company has no uncertain tax position as of June 30, 2020 and December 31, 2020.
As of December 31, 2020, the tax years ended December 31, 2016 through December 31, 2020 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities.
Comprehensive LossComprehensive Loss - Comprehensive loss consists of two components, net loss and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in US$to RMB is reported in other comprehensive (income) loss in the condensed consolidated interim statements of operations and comprehensive loss.
Loss per ShareLoss per Share - Loss Per Share (“EPS”) is computed by dividing net loss by the weighted average number of ordinary shares outstanding. Diluted EPS are computed by dividing net loss by the weighted-average number of ordinary shares and dilutive potential ordinary share equivalents outstanding.
Potentially dilutive ordinary shares consist of ordinary shares issuable upon the conversion of ordinary stock options, restricted shares and warrants (using the treasury stock method). The effect from options, restricted shares and warrants would have been anti-dilutive due to the fact that the Company incurred a net loss for the six months ended December 31, 2019 and 2020.
WarrantsWarrants - In connection of the issuance of common stocks, the Company may issue options or warrants to purchase common stock. Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.
Convertible Notes PayableConvertible Notes Payable - In accordance with ASC 470 Debt with conversion and other options , the Company allocated the proceeds from the convertible notes between debt and equity elements, the company measured the debt component at its fair value, and allocated the remaining proceeds to the equity component in additional paid in capital, as the fair value of equity component is immaterial, the Company allocated the entire proceeds to the debt component. Upon issuance of the shares to settle the obligation, equity is increased by the amount of the liability and no gain or loss is recognized for the difference between the average and the ending market price.
Recently Issued Accounting PronouncementsRecently Issued Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects that the adoption of this ASU will not have a material impact on the Company's unaudited condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815 - 40)" ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU's amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on the Company's unaudited condensed consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)6 Months Ended
Dec. 31, 2020
SIGNIFICANT ACCOUNTING POLICIES
Schedule of estimated useful lifeItems
Useful life
Motor vehicles
5-10 years
Office equipment
2-5 years
Production equipment
10-20 years
Summary of information about contract assets and contract liabilities from contracts with customersThe following table provides information about contract assets and contract liabilities from contracts with customers:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Contract assets
¥
31,537,586
¥
45,621,966
$
6,983,690
Contract liabilities
¥
3,486,033
¥
6,686,592
$
1,023,566

TRADE ACCOUNTS RECEIVABLE, NET

TRADE ACCOUNTS RECEIVABLE, NET (Tables)6 Months Ended
Dec. 31, 2020
TRADE ACCOUNTS RECEIVABLE, NET
Schedule of Accounts receivableAccounts receivable, net consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Third Parties
RMB
RMB
U.S. Dollars
Trade accounts receivable
¥
53,752,527
¥
37,746,154
$
5,778,080
Allowance for doubtful accounts
(5,508,512)
(2,275,086)
(348,263)
Total third-parties, net
¥
48,244,015
¥
35,471,068
$
5,429,817
June 30,
December 31,
December 31,
2020
2020
2020
Related Party
RMB
RMB
U.S. Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd.
¥
3,409,912
¥

$

Allowance for doubtful accounts
(340,992)


Total related-party, net
¥
3,068,920
¥

$
Schedule of Movement of allowance for doubtful accountsMovement of allowance for doubtful accounts is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
3,645,334
¥
5,849,504
$
895,428
Charge to (reversal of) expense
2,204,170
(3,434,339)
(525,721)
Less: write-off

(140,079)
(21,444)
Ending balance
¥
5,849,504
¥
2,275,086
$
348,263

OTHER RECEIVABLES, NET (Tables)

OTHER RECEIVABLES, NET (Tables)6 Months Ended
Dec. 31, 2020
OTHER RECEIVABLES, NET
Schedule of Other receivablesOther receivables, net consisted of the following:
June 30,
December 31,
December 31,
Third Party
2020
2020
2020
RMB
RMB
U.S. Dollars
Business advances to officers and staffs (A)
¥
1,141,829
¥
1,915,922
$
293,284
Deposits for projects
1,381,081
1,327,283
203,177
VAT recoverable
3,746,435
3,297,091
504,710
Others
1,614,133
5,256,227
804,610
7,883,478
11,796,523
1,805,781
Less: Long term portion (B)
(3,640)


Allowance for doubtful accounts
(1,529,036)
(791,702)
(121,192)
Other receivable - current portion
¥
6,350,802
¥
11,004,821
$
1,684,589
(A)
Business advances to officers and staffs represent advances for business travel and sundry expenses related to oilfield or on-site installation and inspection of products through customer approval and acceptance.
(B)
Long-term portion are mainly tender deposits for large-scale projects or rental contracts. These funds may not be collected back until projects are finished or contracts are completed.
Schedule of Movement of allowance for doubtful accountsMovement of allowance for doubtful accounts is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
1,461,724
¥
1,529,036
$
234,060
Charge to (reversal of) expense
67,312
(348,199)
(53,300)
Less: write-off

(389,135)
(59,568)
Ending balance
¥
1,529,036
¥
791,702
$
121,192

CONTRACT ASSETS, NET (Tables)

CONTRACT ASSETS, NET (Tables)6 Months Ended
Dec. 31, 2020
CONTRACT ASSETS, NET
Summary of contract assets, netContract assets, net consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Third Party
RMB
RMB
U.S. Dollars
Contract assets
¥
31,677,348
¥
45,645,343
$
6,987,268
Impairment of contract assets
(139,762)
(23,377)
(3,578)
Total contract assets, net
¥
31,537,586
¥
45,621,966
$
6,983,690
Summary of movement of impairment of contract assetsMovement of impairment of contract assets is as follows:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Beginning balance
¥
162,213
¥
139,762
$
21,394
Charge to (reversal of) expense
(22,451)
85,514
13,090
Less: write-off

(201,899)
(30,906)
Ending balance
¥
139,762
¥
23,377
$
3,578

PROPERTY AND EQUIPMENT, NET (Ta

PROPERTY AND EQUIPMENT, NET (Tables)6 Months Ended
Dec. 31, 2020
PROPERTY AND EQUIPMENT, NET
Schedule of Property and equipmentJune 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Motor vehicles
¥
4,741,366
¥
5,097,921
$
780,376
Office equipment and fixtures
1,436,210
1,427,475
218,514
Production equipment
30,181,761
30,484,556
4,666,495
Total property and equipment
36,359,337
37,009,952
5,665,385
Less: accumulated depreciation
(6,602,458)
(7,931,774)
(1,214,175)
Property and equipment, net
¥
29,756,879
¥
29,078,178
$
4,451,210

INVESTMENT IN UNCONSOLIDATED _2

INVESTMENT IN UNCONSOLIDATED ENTITY (Tables)6 Months Ended
Dec. 31, 2020
INVESTMENT IN UNCONSOLIDATED ENTITY
Schedule of investment in unconsolidated entityInvestment in unconsolidated entity consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Future Gas Station (Beijing) Technology, Ltd
¥
31,541,850
¥
31,290,554
$
4,789,875

LEASES (Tables)

LEASES (Tables)6 Months Ended
Dec. 31, 2020
LEASES
Summary of operating lease related assets and liabilities recorded on the balance sheetsThe table below presents the operating lease related assets and liabilities recorded on the balance sheets:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Rights of use lease assets
¥
2,549,914
¥
2,070,548
$
316,954
Operating lease liabilities – current
1,328,976
1,333,113
204,069
Operating lease liabilities – non-current
1,210,088
729,909
111,733
Total operating lease liabilities
¥
2,539,064
¥
2,063,022
$
315,802
Summary of weighted average remaining lease terms and discount rates for all of operating leasesThe weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2020:
June 30,
December 31,
2020
2020
Remaining lease term and discount rate:
Weighted average remaining lease term (years)
2.57
2.16
Weighted average discount rate
5
%
5
%
Summary of maturities of lease liabilitiesThe following is a schedule, by years, of maturities of lease liabilities as of December 31, 2020:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
1,102,580
$
168,780
2022
742,580
113,672
2023
311,291
47,652
Total lease payments
2,156,451
330,104
Less: imputed interest
(93,429)
(14,302)
Present value of lease liabilities
2,063,022
315,802
Less: operating lease liabilities – current
(1,333,113)
(204,069)
Operating lease liabilities – non-current
¥
729,909
$
111,733

TAXES PAYABLE (Tables)

TAXES PAYABLE (Tables)6 Months Ended
Dec. 31, 2020
TAXES PAYABLE
Schedule of taxes payableTaxes payable consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
VAT payable
¥
660,278
¥
853,948
$
130,719
Income tax payable
440,030
440,030
67,359
Other taxes payable
7,980
87,934
13,461
Total taxes payable
¥
1,108,288
¥
1,381,912
$
211,539

SHORT-TERM BANK LOANS (Tables)

SHORT-TERM BANK LOANS (Tables)6 Months Ended
Dec. 31, 2020
SHORT-TERM BANK LOANS
Schedule of Short-term Bank LoansShort-term bank loans consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Bank of Nanjing (1)
¥
2,500,000
¥
4,000,000
$
612,309
Beijing Rural Commercial Bank (2)
6,000,000
6,000,000
918,464
Industrial and Commercial Bank of China (3)
1,020,000
1,020,000
156,139
China Construction Bank (4)

1,000,000
153,078
Total short-term bank loans
¥
9,520,000
¥
12,020,000
$
1,839,990
(1)
On June 1, 2020, the Company entered into a loan agreement with Bank of Nanjing to borrow ¥2,500,000 ($382,693) as working capital for one year, with maturity date of May 21, 2021. The loan bears a fixed interest rate of 4.35% per annum. On June 23, 2020, the Company entered into another loan agreement with Bank of Nanjing to borrow ¥1,500,000 ($229,616) as working capital for one year. The Company made the withdraw in an amount of ¥1,500,000 ($229,616) on July 1, 2020, which will be due on June 30, 2021. The loan bears a fixed interest rate of 4.35% per annum. The loans are guaranteed by one of the founders of the Company.
(2)
On April 23, 2020, the Company entered into a loan agreement with Beijing Rural Commercial Bank to borrow ¥6,000,000 ($918,464) as working capital for one year. The Company made the withdraw in an amount of ¥6,000,000 ($918,464) on April 30, 2020, which will be due on April 29, 2021. The loan bears a fixed interest rate of 5.655% per annum. The loan is guaranteed by one of the founders of the Company and he also pledged self-owned housing property with carrying value of approximately RMB 15.6 million ($2,388,925) as collateral for this loan.
(3)
On May 22, 2020, the Company entered into a loan agreement with Industrial and Commercial Bank of China to borrow ¥1,020,000 as working capital for six months, with maturity date of November 18, 2020. The loan bears a fixed interest rate of 4.45% per annum. The loan was subsequently repaid in full upon maturity. On November 19, 2020, the Company entered into another loan agreement with Industrial and Commercial Bank of China to borrow ¥1,020,000 ($156,139) as working capital for six months, with maturity date of May 18, 2021. The loan bears a fixed interest rate of 3.85% per annum.
(4)
On July 10, 2020, the Company entered into a loan agreement with China Construction Bank to borrow ¥1,000,000 ($153,078) as working capital for one year, with maturity date of July 10, 2021. The loan bears a fixed interest rate of 4.0525% per annum.

SHORT-TERM BORROWINGS (Tables)

SHORT-TERM BORROWINGS (Tables)6 Months Ended
Dec. 31, 2020
Short-term Debt [Line Items]
Schedule of short-term borrowingsShort-term borrowings due to a third party consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Short-term borrowings due to third parties:
RMB
RMB
U.S. Dollars
Short-term borrowing, 15% annual interest, due on June 23, 2021
¥
200,000
¥
215,699
$
33,019
Total short-term borrowings due to a third party
¥
200,000
¥
215,699
$
33,019
Related Party
Short-term Debt [Line Items]
Schedule of short-term borrowingsShort-term borrowings due to related parties consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Short-term borrowings due to related parties:
RMB
RMB
U.S. Dollars
Short-term borrowing from a founder, 5.65% annual interest, due on December 19, 2020 *
¥
5,008,640
¥

$

Short-term borrowing from a founder, 4.55% annual interest, due on March 25, 2021
4,002,106
4,002,528
612,696
Short-term borrowing from a founder, interest-free, due on September 24, 2020*
450,000


Short-term borrowing from a founder's family member, interest-free, due on December 31, 2020*
770,000


Short-term borrowing from a founder, 4.35% annual interest, due on December 21, 2021

5,006,646
766,404
Short-term borrowing from a founder's family member, 0% annual interest, due on June 16, 2021

3,000,000
459,233
Total short-term borrowings due to related parties
¥
10,230,746
¥
12,009,174
$
1,838,333

LONG-TERM BORROWINGS DUE TO R_2

LONG-TERM BORROWINGS DUE TO RELATED PARTY (Tables)6 Months Ended
Dec. 31, 2020
LONG-TERM BORROWINGS DUE TO RELATED PARTY
Schedule of Long-term borrowings due to related partyLong-term borrowings due to related party consisted of the following:
June 30,
December 31,
December 31,
2020
2020
2020
Long-term borrowings due to related party:
RMB
RMB
U.S. Dollars
Long-term borrowing from a founder, monthly payments of ¥126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027.
¥
8,226,599
¥
7,825,695
$
1,197,937
Less: current portion
(847,346)
(882,900)
(135,152)
Total long-term borrowings due to related party
¥
7,379,253
¥
6,942,795
$
1,062,785
No long-term borrowings due to related party were guaranteed or collateralized at June 30, 2020 and December 31, 2020.
Schedule of future maturities of long-term borrowings due to related partyThe future maturities of long-term borrowings due to related party at December 31, 2020 are as follows:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
882,900
$
135,152
2022
933,170
142,847
2023
1,019,695
156,092
2024
1,114,243
170,565
2025
1,217,558
186,381
Thereafter
2,658,129
406,900
Total
¥
7,825,695
$
1,197,937

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)6 Months Ended
Dec. 31, 2020
STOCK-BASED COMPENSATION
Schedule of stock options activityThe following is a summary of the stock options activity:
Weighted
Average
Exercise Price
Stock Options
Shares
Per Share
Outstanding as of June 30, 2019
163,120
$
15.20
Granted


Forfeited


Exercised


Expired
53,600
25.75
Outstanding as of June 30, 2020
109,520
$
10.02
Granted


Forfeited


Exercised


Expired


Outstanding as of December 31, 2020
109,520
$
10.02
Schedule of options outstanding and exercisableThe following is a summary of the status of options outstanding and exercisable at December 31, 2020:
Outstanding Options
Exercisable Options
Average
Average
Remaining
Remaining
Average Exercise
Contractual
Average Exercise
Contractual
Price
Number
life (Years)
Price
Number
life (Years)
$
14.80
29,520
1.24
$
14.80
29,520
1.24
$
8.25
80,000
4.09
$
8.25
80,000
4.09
109,520
Schedule of restricted shares grantedFollowing is a summary of the restricted shares granted:
Restricted stock grants
Shares
Non-vested as of June 30, 2019
821,644
Granted

Vested
(500,844)
Non-vested as of June 30, 2020
320,800
Granted

Vested
(190,400)
Non-vested as of December 31, 2020
130,400
Schedule of Outstanding Restricted SharesThe following is a summary of the status of restricted stock at December 31, 2020:
Outstanding Restricted Shares
Average
Remaining
Fair Value per
Amortization
Share
Number
Period (Years)
$
6.45
130,400
0.64
130,400

INCOME TAX (Tables)

INCOME TAX (Tables)6 Months Ended
Dec. 31, 2020
INCOME TAX
Schedule of loss before provision for income taxesLoss before provision for income taxes consisted of:
December 31,
December 31,
December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Outside China areas
¥
(7,624,668)
¥
(6,440,586)
$
(985,906)
China
904,020
(3,699,278)
(566,276)
Total
¥
(6,720,648)
¥
(10,139,864)
$
(1,552,182)
Schedule of deferred tax asset, netDeferred tax asset, net is composed of the following:
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Deferred tax assets:
Allowance for doubtful receivables
¥
1,180,160
¥
625,375
$
95,730
Impairment loss from investment in unconsolidated entity
605,660
605,660
92,713
Net operating loss carryforwards
10,441,633
10,237,274
1,567,095
Subtotal
¥
12,227,453
¥
11,468,309
$
1,755,538
Less: Valuation allowance
(12,162,660)
(11,389,897)
(1,743,535)
Total deferred tax assets
¥
64,793
¥
78,412
$
12,003
Deferred tax Liability:
Accelerated amortization of intangible assets
¥
(64,793)
¥
(78,412)
$
(12,003)
Total deferred tax liability
¥
(64,793)
¥
(78,412)
(12,003)
Deferred tax assets, net
¥

¥

$
Schedule of company's income tax expenseThe Company’s income tax expense (benefit) is comprised of the following:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Current income tax provision (benefit)
¥
316,799
¥
(98,338)
$
(15,053)
Income tax expenses (benefit)
¥
316,799
¥
(98,338)
$
(15,053)

NON-CONTROLLING INTEREST (Table

NON-CONTROLLING INTEREST (Tables)6 Months Ended
Dec. 31, 2020
NON-CONTROLLING INTEREST
Schedule of non-controlling interestNon-controlling interest consisted of the following:
As of June 30, 2020
Nanjing
Gan Su
Qinghai
BHD
Recon
BHD
BHD
Total
Total
RMB
RMB
RMB
RMB
RMB
U.S. Dollars
Paid-in capital
¥
1,651,000
¥
200,000
¥
4,755,000
¥

¥
6,606,000
$
934,406
Unappropriated retained earnings
3,477,493
3,616,002
(2,100,871)
(953,395)
4,039,229
571,342
Accumulated other comprehensive loss
(18,850)
(11,853)


(30,703)
(4,343)
Total non-controlling interests
¥
5,109,643
¥
3,804,149
¥
2,654,129
¥
(953,395)
¥
10,614,526
$
1,501,405
As of December 31, 2020
Nanjing
Gan Su
Qinghai
BHD
Recon
BHD
BHD
Total
Total
RMB
RMB
RMB
RMB
RMB
U.S. Dollars
Paid-in capital
¥
1,651,000
¥
200,000
¥
4,805,000
¥

¥
6,656,000
$
1,018,883
Unappropriated retained earnings
3,477,493
3,616,002
(3,078,512)
(1,081,628)
2,933,355
449,030
Accumulated other comprehensive loss
(18,850)
(11,853)

-
(30,703)
(4,700)
Total non-controlling interests
¥
5,109,643
¥
3,804,149
¥
1,726,488
¥
(1,081,628)
¥
9,558,652
$
1,463,213

COMMITMENTS AND CONTINGENCY (Ta

COMMITMENTS AND CONTINGENCY (Tables)6 Months Ended
Dec. 31, 2020
COMMITMENTS AND CONTINGENCY
Schedule of total future minimum purchase commitmentThe total future minimum purchase commitment under the non-cancellable purchase contracts as of December 31, 2020 are payable as follows:
Minimum purchase
Twelve months ending December 31,
commitment
2021
¥
5,458,985
$
835,647
Thereafter


Total minimum payments required
¥
5,458,985
$
835,647
Schedule of Non - cancellable operating lease agreementsThe Company entered into several non-cancellable operating lease agreements for office spaces and factories. Future payments under such leases were included in lease liabilities as disclosed in Note 14, other than those within under lease agreements within one year which are disclosed as follows as of December 31, 2020:
Twelve months ending December 31,
RMB
U.S. Dollars
2021
¥
161,004
$
24,646
Total
¥
161,004
$
24,646

RELATED PARTY TRANSACTIONS AN_2

RELATED PARTY TRANSACTIONS AND BALANCES (Tables)6 Months Ended
Dec. 31, 2020
RELATED PARTY TRANSACTIONS AND BALANCES
Schedule of Sales to related partySales to related party – sales to related party consisted of the following:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Urumqi Yikeli Automatic Control Equipment Co., Ltd.
¥

¥
85,657
$
13,112
Total revenues from related party
¥

¥
85,657
$
13,112
Schedule of leases from related partiesThe details of leases from related parties are as below:
Monthly Rent
Monthly Rent
Lessee
Lessor
Rent Period
RMB
USD
Nanjing Recon
A founder
April 1, 2020 - March 31, 2022
¥
40,000
$
6,123
BHD
A founder
Jan 1, 2021- Dec 31, 2022
24,000
3,674
BHD
Founders' family member
Jan 1, 2021- Dec 31, 2022
48,750
7,463
Recon-BJ
A founder
July 1, 2020-Jun 1 ,2021
10,000
1,531

VARIABLE INTEREST ENTITIES (Tab

VARIABLE INTEREST ENTITIES (Tables)6 Months Ended
Dec. 31, 2020
VARIABLE INTEREST ENTITIES
Schedule of information regarding consolidated VIEsSummary information regarding consolidated VIEs is as follows:
June 30, 2020
December 31, 2020
December 31, 2020
RMB
RMB
U.S. Dollars
ASSETS
Current Assets
Cash
¥
6,388,098
¥
7,581,391
$
1,160,539
Notes receivable
4,180,885
7,789,997
1,192,472
Trade accounts receivable, net
44,031,079
31,578,187
4,833,905
Trade accounts receivable- related party, net
3,068,920


Inventories, net
1,985,723
2,117,754
324,180
Other receivables, net
6,342,009
10,977,568
1,680,417
Loans to third parties
3,200,377
950,000
145,423
Purchase advances, net
75,195
82,437
12,619
Contract assets, net
31,537,586
45,621,966
6,983,690
Prepaid expenses
42,294


Total current assets
100,852,166
106,699,300
16,333,245
 
 
Property and equipment, net
29,756,879
29,078,178
4,451,210
Land use right, net
1,280,648
1,267,028
193,953
Investment in unconsolidated entity
4,000,000
4,000,000
612,309
Long-term other receivables, net
3,640


Right of use assets
2,549,914
2,070,548
316,954
Total Assets
¥
138,443,247
¥
143,115,054
$
21,907,671
LIABILITIES
Short-term bank loan
¥
9,520,000
¥
12,020,000
$
1,839,990
Trade accounts payable
18,903,080
15,455,630
2,365,907
Other payables
1,115,209
881,898
134,999
Other payable- related parties
3,113,460
529,570
81,065
Advance from customers
3,486,033
6,686,592
1,023,566
Accrued payroll and employees' welfare
850,841
546,716
83,690
Taxes payable
1,108,265
1,382,008
211,554
Short-term borrowings
200,000
215,699
33,019
Short-term borrowings - related parties
10,230,746
12,009,174
1,838,333
Long-term borrowings - related party - current portion
847,346
882,900
135,152
Operating lease liabilities - current
1,328,976
1,333,113
204,069
Total current liabilities
50,703,956
51,943,300
7,951,344
 
 
Operating lease liabilities - non-current
1,210,088
729,909
111,733
Long-term borrowings - related party
7,379,253
6,942,795
1,062,785
Total Liabilities
¥
59,293,297
¥
59,616,004
$
9,125,862

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)6 Months Ended
Dec. 31, 2020
SEGMENT REPORTING
Schedule of segment reporting informationThe following tables present summary information by segment for the six months ended December 31, 2019 and 2020, respectively:
For the six months ended December 31,
2019
2020
2020
RMB
RMB
U.S. Dollars
Automation product and software
¥
22,572,055
¥
12,618,460
$
1,931,601
Equipment and accessories
7,807,013
9,754,851
1,493,247
Oilfield environmental protection
26,085
2,795,968
427,999
Total revenue
¥
30,405,153
¥
25,169,279
$
3,852,847
For the six months ended December 31, 2020
Automation
Equipment
Oilfield
product and
and
environmental
software
accessories
protection
Total
RMB
RMB
RMB
RMB
Revenue
¥
12,618,460
¥
9,754,851
¥
2,795,968
¥
25,169,279
Cost of revenue and related tax
9,483,892
6,713,438
2,254,909
18,452,239
Gross profit
¥
3,134,568
¥
3,041,413
¥
541,059
¥
6,717,040
Depreciation and amortization
¥
57,223
¥
308,956
¥
1,003,411
¥
1,369,590
Total capital expenditures
¥
19,014
¥
53,760
¥
302,795
¥
375,569
Timing of revenue recognition
Goods transferred at a point in time
¥
2,293,393
¥
9,754,851
¥

¥
12,048,244
Services rendered over time
10,325,067

2,795,968
13,121,035
Total revenue
¥
12,618,460
¥
9,754,851
¥
2,795,968
¥
25,169,279
For the six months ended December 31, 2019
Automation
Equipment
Oilfield
product and
and
environmental
software
accessories
protection
Total
RMB
RMB
RMB
RMB
Revenue
¥
22,572,055
¥
7,807,013
¥
26,085
¥
30,405,153
Cost of revenue and related tax
13,991,321
4,174,481
271,439
18,437,241
Gross profit
¥
8,580,734
¥
3,632,532
¥
(245,354)
¥
11,967,912
Depreciation and amortization
¥
47,122
¥
350,850
¥
13,620
¥
411,592
Total capital expenditures
¥
12,967
¥

¥
1,297,663
¥
1,310,630
Timing of revenue recognition
Goods transferred at a point in time
¥
5,978,167
¥
7,807,013
¥

¥
13,785,180
Services rendered over time
16,593,888

26,085
16,619,973
Total revenue
¥
22,572,055
¥
7,807,013
¥
26,085
¥
30,405,153
June 30,
December 31,
December 31,
2020
2020
2020
RMB
RMB
U.S. Dollars
Total assets:
Automation product and software
¥
81,743,307
¥
96,462,627
$
14,766,242
Equipment and accessories
61,578,632
77,750,305
11,901,809
Oilfield environmental protection
51,092,865
63,338,916
9,695,754
Total Assets
¥
194,414,804
¥
237,551,848
$
36,363,805

ORGANIZATION AND NATURE OF OP_2

ORGANIZATION AND NATURE OF OPERATIONS (Details)1 Months Ended6 Months Ended
Oct. 23, 2018Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)
Variable Interest Entity, Terms of Arrangementsthe Company is able to absorb 90% of net interest or 100% of net loss of those VIEs.
Beijing Bhd Petroleum Technology Co Ltd [Member]
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage51.00%
Paid In Capital ¥ 200,000
Remaining Paid In Capital $ 4,710,223 33,300,000
Gan Su BHD Environmental Technology Co., Ltd [Member]
Capital50,000,000
Paid In Capital $ 3,181,713 20,785,000
Qing Hai BHD New Energy Technology Co Ltd [Member]
Capital50,000,000
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage55.00%75.00%
Paid In Capital $ 642,925 4,200,000
Equity Method Investment, Ownership Percentage10.00%
Individuals [Member]
Remaining Paid In Capital $ 1,768,102 ¥ 12,500,000

LIQUIDITY (Details)

LIQUIDITY (Details)Jan. 28, 2021USD ($)sharesJun. 26, 2020USD ($)$ / sharesMay 21, 2020USD ($)$ / sharesDec. 31, 2020USD ($)$ / sharesDec. 31, 2020CNY (¥)Nov. 25, 2020USD ($)$ / sharesJun. 30, 2020$ / sharesJun. 30, 2020CNY (¥)Aug. 31, 2019USD ($)Aug. 31, 2019CNY (¥)
Short-term borrowings due to related parties $ 33,019 ¥ 215,699 ¥ 200,000
Ordinary shares, par value (in dollars per share) | $ / shares $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925
Bank loan outstanding $ 1,839,990 12,020,000 9,520,000
Proceeds from stock purchase agreement $ 2,100,000 $ 2,100,000
Convertible Notes
Aggregate principal amount $ 6,485,000
Conversion price per ordinary share (in dollars per share) | $ / shares $ 0.71
Convertible Notes | Subsequent event
Shares issued upon conversion (in shares) | shares9,225,338
Principal and interests amount of debt converted $ 6,549,990
Related Party
Short-term borrowings due to related parties1,838,333 12,009,174 10,230,746
Long-term borrowings from related parties $ 1,197,937 ¥ 7,825,695 ¥ 8,226,599 $ 1,200,000 ¥ 7,800,000

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)Aug. 21, 2018
Accounting Policies [Line Items]
Foreign Currency Transactions, DescriptionThe translation has been made at the rate of ¥6.5326 = US$1.00, the approximate exchange rate prevailing on December 31, 2020.The translation has been made at the rate of ¥6.5326 = US$1.00, the approximate exchange rate prevailing on December 31, 2020.
Selling and Marketing Expense $ 421,022 ¥ 2,750,389 ¥ 2,660,873
Investment loss38,468 251,296
Investment income141,288
Revenue recognized286,391 ¥ 1,870,891 0
Contract assets and contract liabilities from contracts with customers
Contract assets6,983,690 ¥ 45,621,966 ¥ 31,537,586
Contract liabilities $ 1,023,566 ¥ 6,686,592 ¥ 3,486,033
Use Rights [Member]
Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life50 years50 years
Shipping and Handling [Member]
Accounting Policies [Line Items]
Selling and Marketing Expense $ 12,121 ¥ 79,180 ¥ 196,852
Minimum
Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage20.00%20.00%8.00%
Maximum
Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage50.00%50.00%43.00%
Motor vehicles [Member] | Minimum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life5 years5 years
Motor vehicles [Member] | Maximum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life10 years10 years
Office Equipment [Member] | Minimum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life2 years2 years
Office Equipment [Member] | Maximum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life5 years5 years
Leasehold Improvements [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Estimated Useful Livesshorter of the lease term or the estimated useful lifeshorter of the lease term or the estimated useful life
Production equipment [Member] | Minimum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life10 years10 years
Production equipment [Member] | Maximum
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life20 years20 years

TRADE ACCOUNTS RECEIVABLE, NE_2

TRADE ACCOUNTS RECEIVABLE, NET - Summary of Accounts receivable (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Third Party
Total third-parties, net $ 5,429,817 ¥ 35,471,068 ¥ 48,244,015
Related Party
Allowance for doubtful accounts(340,992)
Total related-party, net0 0 3,068,920
Third Party [Member]
Third Party
Trade accounts receivable5,778,080 37,746,154 53,752,527
Allowance for doubtful accounts $ (348,263) ¥ (2,275,086)(5,508,512)
Urumqi Yikeli Automatic Control Equipment Co., Ltd [Member]
Related Party
Total related-party, net ¥ 3,409,912

TRADE ACCOUNTS RECEIVABLE, NE_3

TRADE ACCOUNTS RECEIVABLE, NET - Summary of Movement of allowance for doubtful accounts (Details)6 Months Ended12 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020CNY (¥)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Charge to (reversal of) expense $ (565,931) ¥ (3,697,024) ¥ 25,537
Third Party [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance895,428 5,849,504 3,645,334 ¥ 3,645,334
Charge to (reversal of) expense(525,721)(3,434,339) ¥ 59,638 2,204,170
Less: write-off(21,444)(140,079)
Ending balance $ 348,263 ¥ 2,275,086 ¥ 5,849,504

TRADE ACCOUNTS RECEIVABLE, NE_4

TRADE ACCOUNTS RECEIVABLE, NET - Additional Information (Details)6 Months Ended12 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020CNY (¥)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for Doubtful Accounts $ (565,931) ¥ (3,697,024) ¥ 25,537
Third Party [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for Doubtful Accounts(525,721)(3,434,339)59,638 ¥ 2,204,170
Charge to reversal473,523 3,093,347
Urumqi Yikeli Automatic Control Equipment Co., Ltd [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for Doubtful Accounts ¥ 0
Charge to reversal $ 52,198 ¥ 340,992

NOTES RECEIVABLE (Details)

NOTES RECEIVABLE (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
NOTES RECEIVABLE
Notes receivable $ 1,192,472 ¥ 7,789,997 ¥ 4,180,885

OTHER RECEIVABLES, NET - Summar

OTHER RECEIVABLES, NET - Summary of Other receivables (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020USD ($)Jun. 30, 2020CNY (¥)Jun. 30, 2019CNY (¥)
Current Portion
Other receivable - current portion $ 1,684,589 ¥ 11,004,821 ¥ 6,350,802
Third Party [Member]
Current Portion
Business advances to officers and staffs (A)293,284 1,915,922 1,141,829
Deposits for projects203,177 1,327,283 1,381,081
VAT recoverable504,710 3,297,091 3,746,435
Others804,610 5,256,227 1,614,133
Other Receivables1,805,781 11,796,523 7,883,478
Less: Long term portion (B)(3,640)
Allowance for doubtful accounts(121,192)(791,702) $ (234,060)(1,529,036) ¥ (1,461,724)
Other receivable - current portion $ 1,684,589 ¥ 11,004,821 ¥ 6,350,802

OTHER RECEIVABLES, NET - Summ_2

OTHER RECEIVABLES, NET - Summary of Movement of allowance for doubtful accounts (Details)6 Months Ended12 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020CNY (¥)
Other Receivables [Line Items]
Charge to (reversal of) expense $ 53,300 ¥ 348,199 ¥ 62,625
Third Party [Member]
Other Receivables [Line Items]
Beginning balance234,060 1,529,036 ¥ 1,461,724 ¥ 1,461,724
Charge to (reversal of) expense(53,300)(348,199)67,312
Less: write-off(59,568)(389,135)
Ending balance $ 121,192 ¥ 791,702 ¥ 1,529,036

OTHER RECEIVABLES, NET - Additi

OTHER RECEIVABLES, NET - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
OTHER RECEIVABLES, NET
Provision for doubtful accounts of other receivables $ 53,300 ¥ 348,199 ¥ 62,625

CONTRACT ASSETS, NET (Details)

CONTRACT ASSETS, NET (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Dec. 31, 2020CNY (¥)Jun. 30, 2020USD ($)Jun. 30, 2020CNY (¥)Jun. 30, 2019CNY (¥)
CONTRACT ASSETS, NET
Contract assets $ 6,987,268 ¥ 45,645,343 ¥ 31,677,348
Impairment of contract assets(3,578)(23,377) $ (21,394)(139,762) ¥ (162,213)
Total contract assets, net $ 6,983,690 ¥ 45,621,966 ¥ 31,537,586
Percentage of contract assets, net subsequently realized7.60%7.60%
Contract assets, net subsequently realized $ 530,923 ¥ 3,468,331
Net recovery of impairment of contract asset $ 13,090 ¥ 85,514 ¥ 18,976

CONTRACT ASSETS, NET - Movement

CONTRACT ASSETS, NET - Movement of impairment of contract assets (Details)6 Months Ended12 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
CONTRACT ASSETS, NET
Beginning balance $ 21,394 ¥ 139,762 ¥ 162,213
Charge to (reversal of) expense13,090 85,514 (22,451)
Less: write-off(30,906)(201,899)0
Ending balance $ 3,578 ¥ 23,377 ¥ 139,762

PROPERTY AND EQUIPMENT, NET (De

PROPERTY AND EQUIPMENT, NET (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Property, Plant and Equipment [Line Items]
Total property and equipment $ 5,665,385 ¥ 37,009,952 ¥ 36,359,337
Less: accumulated depreciation(1,214,175)(7,931,774)(6,602,458)
Property and equipment, net4,451,210 29,078,178 29,756,879
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment780,376 5,097,921 4,741,366
Office equipment and fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment218,514 1,427,475 1,436,210
Production equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment $ 4,666,495 ¥ 30,484,556 ¥ 30,181,761

PROPERTY AND EQUIPMENT, NET - A

PROPERTY AND EQUIPMENT, NET - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
PROPERTY AND EQUIPMENT, NET
Depreciation $ 207,568 ¥ 1,355,970 ¥ 397,972
Gain (Loss) on Disposition of Property Plant Equipment $ 168 ¥ 1,095 ¥ 3,189

INVESTMENT IN UNCONSOLIDATED _3

INVESTMENT IN UNCONSOLIDATED ENTITY (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Investments in and Advances to Affiliates [Line Items]
Total $ 4,789,875 ¥ 31,290,554 ¥ 31,541,850
Future Gas Station (Beijing) Technology, Ltd
Investments in and Advances to Affiliates [Line Items]
Total $ 4,789,875 ¥ 31,290,554 ¥ 31,541,850

INVESTMENT IN UNCONSOLIDATED _4

INVESTMENT IN UNCONSOLIDATED ENTITY - Additional Information (Details)Jan. 13, 2021USD ($)item$ / sharessharesJan. 13, 2021CNY (¥)sharesDec. 10, 2019Aug. 21, 2018sharesAug. 21, 2018CNY (¥)Dec. 31, 2020USD ($)itemDec. 31, 2020CNY (¥)itemDec. 31, 2019CNY (¥)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Cost Method Investment Ownership Percentage43.00%43.00%43.00%43.00%
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | shares487,057
Payments to Acquire Equity Method Investments | ¥ ¥ 8,000,000
Loss (income) from investment in unconsolidated entity $ 38,468 ¥ 251,296 ¥ (141,288)
Investment Payable $ 979,695 ¥ 6,400,000 ¥ 6,400,000
Reverse stock split0.2 0.2 0.2
Future Gas Station (Beijing) Technology, Ltd
Payments to Acquire Businesses and Interest in Affiliates $ 5,407,961 ¥ 35,328,290
Payments to Acquire Additional Interest in Subsidiaries | ¥ ¥ 10,000,000
Equity Method Investment, Additional InformationAs consideration for increasing its affiliates' interest in FGS from 8% to 43%, the Company will (1) pay a total of RMB 10 million in cash to FGS and (2) issue 487,057 restricted ordinary shares of the Company (the "Restricted Shares") to the other shareholders of FGS within 30 days after FGS finalizes recording the Company's corresponding interest at the local governmental agency.
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | shares487,057
Number of gas stations extending business | item200 200
Minimum
Ownership interest (as a percent)8.00%8.00%20.00%20.00%
Maximum
Ownership interest (as a percent)43.00%43.00%50.00%50.00%
Subsequent event | Future Gas Station (Beijing) Technology, Ltd
Number of Company's subsidiaries who entered into the fourth supplemental agreement to the investment agreement | item2
Percentage of equity interest to be acquired in exchange for waiver of performance goals8.00%
Stock price | $ / shares $ 1.61
Fair market value of waived performance goals | $ $ 261,388
Ownership interest (as a percent)51.00%
Net book value $ 71,518 ¥ 467,199
Total consideration $ 4,700,000 30,400,000
Cash consideration | ¥ ¥ 14,400,000
Subsequent event | Restricted shares | Future Gas Station (Beijing) Technology, Ltd
Consideration in shares | shares487,060 487,060

LEASES - Operating lease relate

LEASES - Operating lease related assets and liabilities (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Operating lease related assets and liabilities recorded on the balance sheets
Rights of use lease assets $ 316,954 ¥ 2,070,548 ¥ 2,549,914
Operating lease liabilities - current204,069 1,333,113 1,328,976
Operating lease liabilities - non-current111,733 729,909 1,210,088
Total operating lease liabilities $ 315,802 ¥ 2,063,022 ¥ 2,539,064

LEASES - weighted average remai

LEASES - weighted average remaining lease terms and discount rates (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020
Remaining lease term and discount rate:
Weighted average remaining lease term (years)2 years 1 month 28 days2 years 1 month 28 days2 years 6 months 26 days
Weighted average discount rate5.00%5.00%5.00%
Operating lease costs $ 91,022 ¥ 594,614 ¥ 718,000
Short-term lease costs $ 80,105 ¥ 523,295 ¥ 498,704

LEASES - Maturities of lease li

LEASES - Maturities of lease liabilities (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Schedule, by years, of maturities of lease liabilities
2021 $ 168,780 ¥ 1,102,580
2022113,672 742,580
202347,652 311,291
Total lease payments330,104 2,156,451
Less: imputed interest(14,302)(93,429)
Total operating lease liabilities315,802 2,063,022 ¥ 2,539,064
Less: operating lease liabilities - current(204,069)(1,333,113)(1,328,976)
Operating lease liabilities - non-current $ 111,733 ¥ 729,909 ¥ 1,210,088

LEASES - Additionl information

LEASES - Additionl information (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)Jul. 01, 2019USD ($)Jul. 01, 2019CNY (¥)
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets $ 316,954 ¥ 2,070,548 ¥ 2,549,914
Operating Lease, liabilities $ 315,802 ¥ 2,063,022 ¥ 2,539,064
ASU 2016-02 | Restatement
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets $ 188,126 ¥ 1,228,963
Operating Lease, liabilities $ 188,126 ¥ 1,228,963
Minimum
Lessee, Lease, Description [Line Items]
Lease term1 year1 year
Maximum
Lessee, Lease, Description [Line Items]
Lease term3 years3 years

TAXES PAYABLE (Details)

TAXES PAYABLE (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
TAXES PAYABLE
VAT payable $ 130,719 ¥ 853,948 ¥ 660,278
Income tax payable67,359 440,030 440,030
Other taxes payable13,461 87,934 7,980
Total taxes payable $ 211,539 ¥ 1,381,912 ¥ 1,108,288

SHORT-TERM BANK LOANS - Compone

SHORT-TERM BANK LOANS - Components (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Short-term Debt [Line Items]
Total short-term bank loans $ 1,839,990 ¥ 12,020,000 ¥ 9,520,000
Bank of Nanjing
Short-term Debt [Line Items]
Total short-term bank loans612,309 4,000,000 2,500,000
Beijing Rural Commercial Bank
Short-term Debt [Line Items]
Total short-term bank loans918,464 6,000,000 6,000,000
Industrial and Commercial Bank of China
Short-term Debt [Line Items]
Total short-term bank loans156,139 1,020,000 ¥ 1,020,000
China Construction Bank
Short-term Debt [Line Items]
Total short-term bank loans $ 153,078 ¥ 1,000,000

SHORT-TERM BANK LOANS - Additio

SHORT-TERM BANK LOANS - Additional information (Details)Nov. 19, 2020USD ($)Jul. 10, 2020USD ($)Jun. 23, 2020USD ($)Jun. 23, 2020CNY (¥)Jun. 01, 2020USD ($)May 22, 2020CNY (¥)Apr. 30, 2020USD ($)Apr. 30, 2020CNY (¥)Apr. 23, 2020USD ($)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019USD ($)Dec. 31, 2019CNY (¥)Nov. 19, 2020CNY (¥)Jul. 10, 2020CNY (¥)Jun. 23, 2020CNY (¥)Jun. 01, 2020CNY (¥)Apr. 30, 2020CNY (¥)Apr. 23, 2020CNY (¥)
Short-term Debt [Line Items]
Proceeds from debt $ 538,832 ¥ 3,520,000 ¥ 0
Interest Expense on Bank Loan $ 45,451 ¥ 296,912 $ 71,866
Bank of Nanjing
Short-term Debt [Line Items]
Face amount of debt $ 229,616 $ 382,693 ¥ 1,500,000 ¥ 2,500,000
Term of debt1 year1 year1 year
Interest rate (as a percent)4.35%4.35%4.35%4.35%
Proceeds from debt $ 229,616 ¥ 1,500,000
Beijing Rural Commercial Bank
Short-term Debt [Line Items]
Face amount of debt $ 918,464 ¥ 6,000,000
Term of debt1 year
Interest rate (as a percent)5.655%5.655%
Proceeds from debt $ 918,464 ¥ 6,000,000
Carrying value of self-owned housing property pledged as collateral $ 2,388,925 ¥ 15,600,000
Industrial and Commercial Bank of China
Short-term Debt [Line Items]
Face amount of debt $ 156,139 ¥ 1,020,000 ¥ 1,020,000
Term of debt6 months6 months
Interest rate (as a percent)3.85%4.45%3.85%
China Construction Bank
Short-term Debt [Line Items]
Face amount of debt $ 153,078 ¥ 1,000,000
Term of debt1 year
Interest rate (as a percent)4.0525%4.0525%

SHORT-TERM BORROWINGS - Due to

SHORT-TERM BORROWINGS - Due to third party (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Short-term Debt [Line Items]
Total short-term borrowings due to third party $ 33,019 ¥ 215,699 ¥ 200,000
Interest 15% annual interest, due on June 23, 2021
Short-term Debt [Line Items]
Total short-term borrowings due to third party $ 33,019 ¥ 215,699 ¥ 200,000

SHORT-TERM BORROWINGS - Due t_2

SHORT-TERM BORROWINGS - Due to related party (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 1,838,333 ¥ 12,009,174 ¥ 10,230,746
Short Term Borrowings One [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 0 0 5,008,640
Debt Instrument, Maturity DateDec. 19,
2020
Debt Instrument, Interest Rate Percentage5.65%
Short Term Borrowings Two [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 612,696 4,002,528 4,002,106
Debt Instrument, Maturity DateMar. 25,
2021
Debt Instrument, Interest Rate Percentage4.55%
Short Term Borrowings Three [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 0 0 450,000
Debt Instrument, Maturity DateSep. 24,
2020
Short Term Borrowings Four [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 0 0 770,000
Debt Instrument, Maturity DateDec. 31,
2020
Short Term Borrowings Five [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 766,404 5,006,646 0
Debt Instrument, Maturity DateDec. 21,
2021
Debt Instrument, Interest Rate Percentage4.35%
Short Term Borrowings Six [Member]
Short-term Debt [Line Items]
Total short-term borrowings due to related parties $ 459,233 ¥ 3,000,000 ¥ 0
Debt Instrument, Maturity DateJun. 16,
2021
Debt Instrument, Interest Rate Percentage0.00%

SHORT-TERM BORROWINGS - Additio

SHORT-TERM BORROWINGS - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Short-term Debt [Line Items]
Interest expense due to third party $ 2,403 ¥ 15,699 ¥ 0
Short Term Borrowings [Member]
Short-term Debt [Line Items]
Interest expense due to related party $ 35,924 ¥ 234,675 ¥ 259,502

LONG-TERM BORROWINGS DUE TO R_3

LONG-TERM BORROWINGS DUE TO RELATED PARTY - Due to related party (Details) - Related PartyDec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)Aug. 31, 2019USD ($)Aug. 31, 2019CNY (¥)
Long-term borrowing from a founder, monthly payments of 126,135 inclusive of interest at 8.90%, ten years loan, due in November 2027. $ 1,197,937 ¥ 7,825,695 ¥ 8,226,599 $ 1,200,000 ¥ 7,800,000
Less: current portion(135,152)(882,900)(847,346)
Total long-term borrowings due to related party $ 1,062,785 ¥ 6,942,795 ¥ 7,379,253

LONG-TERM BORROWINGS DUE TO R_4

LONG-TERM BORROWINGS DUE TO RELATED PARTY - Parenthetical (Details) - Long-term Borrowings [Member] - Related Party6 Months Ended
Dec. 31, 2020USD ($)
Debt Instrument, Periodic Payment $ 126,135
Debt Instrument, Interest Rate, Stated Percentage8.90%
Debt Instrument, Term10 years

LONG-TERM BORROWINGS DUE TO R_5

LONG-TERM BORROWINGS DUE TO RELATED PARTY - Future maturities (Details) - Related PartyDec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)Aug. 31, 2019USD ($)Aug. 31, 2019CNY (¥)
2021 $ 135,152 ¥ 882,900
2022142,847 933,170
2023156,092 1,019,695
2024170,565 1,114,243
2025186,381 1,217,558
Thereafter406,900 2,658,129
Total $ 1,197,937 ¥ 7,825,695 ¥ 8,226,599 $ 1,200,000 ¥ 7,800,000

LONG-TERM BORROWINGS DUE TO R_6

LONG-TERM BORROWINGS DUE TO RELATED PARTY - Additional Information (Details) - Long-term Borrowings [Member]6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020CNY (¥)
Interest Expense, Long-term Debt $ 54,481 ¥ 355,908 ¥ 389,926
guaranteed or collateralized ¥ 0 ¥ 0

ORDINARY SHARES (Details)

ORDINARY SHARES (Details)Jun. 26, 2020USD ($)$ / sharessharesMay 21, 2020USD ($)$ / sharessharesDec. 26, 2019sharesDec. 10, 2019$ / sharessharesAug. 21, 2018sharesAug. 21, 2018CNY (¥)Dec. 31, 2020USD ($)$ / sharessharesDec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Dec. 31, 2020CNY (¥)sharesNov. 25, 2020$ / sharesJun. 30, 2020$ / sharesJun. 30, 2020CNY (¥)sharesSep. 21, 2018$ / shares
Equity [Line Items]
Proceeds from Issuance of Common Stock $ 1,520,060 ¥ 9,930,015 ¥ 0
Cost Method Investment Ownership Percentage43.00%43.00%43.00%43.00%
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures487,057
Reverse stock split ratio0.2 0.2 0.2
Common shares, shares authorized20,000,000 20,000,000 20,000,000
Number of fractional ordinary shares issued0
Number of ordinary share in lieu of the fractional share, the shareholder was entitled to receive23,049,639
Common shares, shares outstanding4,611,720 8,416,721 8,416,721 7,202,832
Percentage Transfer Of Profit To Statutory Reserves10.00%10.00%
Transfer Of Profit To Statutory Reserves Up to Certain Percentage Of Registered Capital50.00%50.00%
Appropriated retained earnings $ 635,107 ¥ 4,148,929 ¥ 4,148,929
Number of Common Stock to be Issued1,680,000 911,112
Par value (in dollars per share) | $ / shares $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925
Number of Ordinary Shares called for by warrants1,680,000 911,112 1,308,111 1,308,111
Exercise price of warrants (in dollars per share) | $ / shares $ 1.25 $ 2.25
Gross proceeds | $ $ 2,100,000 $ 2,100,000
Payments of Stock Issuance Costs | $200,000 300,000
Net proceeds | $ $ 1,900,000 $ 1,700,000
Minimum
Equity [Line Items]
Equity Method Investment, Ownership Percentage8.00%8.00%20.00%20.00%
Common shares, shares authorized20,000,000
Par value (in dollars per share) | $ / shares $ 0.0925
Maximum
Equity [Line Items]
Equity Method Investment, Ownership Percentage43.00%43.00%50.00%50.00%
Common shares, shares authorized100,000,000
Par value (in dollars per share) | $ / shares $ 0.0185
Future Gas Station (Beijing) Technology, Ltd
Equity [Line Items]
Payments to Acquire Additional Interest in Subsidiaries | ¥ ¥ 10,000,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures487,057
Shares Issued, Price Per Share | $ / shares $ 6.4375

OTHER PAYABLES - Third Party (D

OTHER PAYABLES - Third Party (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
OTHER PAYABLES
Total $ 239,260 ¥ 1,563,002 ¥ 2,609,486

OTHER PAYABLES - Related Party

OTHER PAYABLES - Related Party (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
OTHER PAYABLES
Total $ 239,260 ¥ 1,563,002 ¥ 2,609,486

COMMON STOCK PURCHASE WARRANT_2

COMMON STOCK PURCHASE WARRANTS ISSUED TO INVESTORS (Details)Jun. 26, 2020USD ($)item$ / sharessharesMay 21, 2020USD ($)item$ / sharessharesDec. 31, 2020shares
Class of Warrant or Right [Line Items]
Number of offerings | item2 2
Number of common shares called for by warrants1,680,000 911,112 1,308,111
Exercise price of warrants (in dollars per share) | $ / shares $ 1.25 $ 2.25
Fair value of warrants | $ $ 1,639,333 $ 1,689,389
Class Of Warrant or rights outstanding371,889
First offering [Member]
Class of Warrant or Right [Line Items]
Number of common shares called for by warrants888,889
Class Of Warrant or rights outstanding22,223
Second offering [Member]
Class of Warrant or Right [Line Items]
Number of common shares called for by warrants325,000
Class Of Warrant or rights outstanding1,355,000
Risk-free interest rate
Class of Warrant or Right [Line Items]
Warrants outstanding, measurement input0.350.40
Expected warrant life
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, term5 years 6 months5 years 6 months
Expected volatility
Class of Warrant or Right [Line Items]
Warrants outstanding, measurement input104.2699.50
Expected dividend yield
Class of Warrant or Right [Line Items]
Warrants outstanding, measurement input0 0

CONVERTIBLE NOTES PAYABLE (Deta

CONVERTIBLE NOTES PAYABLE (Details)Jan. 28, 2021USD ($)sharesNov. 25, 2020USD ($)item$ / sharessharesDec. 31, 2020USD ($)$ / sharesDec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2020$ / sharesJun. 26, 2020$ / sharesMay 21, 2020$ / shares
Short-term Debt [Line Items]
Common shares, par value (in dollars per share) | $ / shares $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925 $ 0.0925
Interest Expense, Debt $ 12,951 ¥ 84,607 ¥ 0
Convertible Notes
Short-term Debt [Line Items]
Aggregate principal amount $ 6,485,000
Conversion price per ordinary share (in dollars per share) | $ / shares $ 0.71
Interest rate (as a percent)12.00%
Term of debt6 months
Number of equal monthly payments to pay principal and interest on debt | item6
Maximum number of shares issuable | shares9,466,137
Fair value of debt6,485,000
Interest Expense, Debt $ 12,951
Convertible Notes | Subsequent event
Short-term Debt [Line Items]
Shares issued upon conversion (in shares) | shares9,225,338
Principal and interests amount of debt converted $ 6,549,990

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - $ / shares6 Months Ended12 Months Ended
Dec. 31, 2020Jun. 30, 2020
STOCK-BASED COMPENSATION
Stock Options, Shares, Outstanding at Beginning109,520 163,120
Stock Options, Shares, Granted0 0
Stock Options, Shares, Forfeited0 0
Stock Option, Shares, Exercised0 0
Stock Option, Shares, Expired0 53,600
Stock Options, Shares, Outstanding at Ending109,520 109,520
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Beginning $ 10.02 $ 15.20
Stock Options, Weighted Average Exercise Price Per share, Granted0 0
Stock Options, Weighted Average Exercise Price Per share, Forfeited0 0
Stock Options, Weighted Average Exercise Price Per share, Exercised0 0
Stock Options, Weighted Average Exercise Price Per share, Expired0 25.75
Stock Options, Weighted Average Exercise Price Per share, Outstanding at Ending $ 10.02 $ 10.02

STOCK-BASED COMPENSATION - Opti

STOCK-BASED COMPENSATION - Option outstanding (Details)6 Months Ended
Dec. 31, 2020$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Number (in shares)109,520
Stock Option One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Number (in shares)29,520
Outstanding Options, Average Remaining Contractual life (Years)1 year 2 months 27 days
Exercisable Options, Average Exercise Price | $ / shares $ 14.80
Exercisable Options, Number (in shares)29,520
Exercisable Options, Average Remaining Contractual life (years)1 year 2 months 27 days
Stock Option Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Number (in shares)80,000
Outstanding Options, Average Remaining Contractual life (Years)4 years 1 month 2 days
Exercisable Options, Average Exercise Price | $ / shares $ 8.25
Exercisable Options, Number (in shares)80,000
Exercisable Options, Average Remaining Contractual life (years)4 years 1 month 2 days
Reflective Of One For Five Reverse Stock Split, Stock Options [Member] | Stock Option One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Average Exercise Price | $ / shares $ 14.80
Reflective Of One For Five Reverse Stock Split, Stock Options [Member] | Stock Option Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options, Average Exercise Price | $ / shares $ 8.25

STOCK-BASED COMPENSATION - Rest

STOCK-BASED COMPENSATION - Restricted shares (Details) - shares6 Months Ended12 Months Ended
Dec. 31, 2020Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted - Shares0 0
Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested, Beginning Balance - Shares320,800 821,644
Granted - Shares0 0
Vested - Shares(190,400)(500,844)
Non-vested, Ending Balance - Shares130,400 320,800

STOCK-BASED COMPENSATION - Stat

STOCK-BASED COMPENSATION - Status of restricted stock (Details)6 Months Ended
Dec. 31, 2020$ / sharesshares
Outstanding Restricted Shares, Number130,400
Fair Value per Share 6.45 [Member]
Outstanding Restricted Shares, Number130,400
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)7 months 21 days
Outstanding Restricted Shares, Fair Value per Share | $ / shares $ 6.45

STOCK-BASED COMPENSATION - Addi

STOCK-BASED COMPENSATION - Additional Information (Details)Aug. 21, 2018$ / sharesOct. 13, 2017USD ($)$ / sharessharesAug. 27, 2018USD ($)$ / sharessharesAug. 21, 2018USD ($)$ / sharessharesDec. 31, 2020USD ($)sharesDec. 31, 2020CNY (¥)sharesDec. 31, 2019CNY (¥)sharesJun. 30, 2020shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross0 0 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number130,400 130,400
Shares, Outstanding0 0 250,086
August 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable Options, Average Remaining Contractual life (years)3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number260,800 260,800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period130,400 130,400
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock or Unit Option Plan Expense | ¥ ¥ 0 ¥ 0
Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock or Unit Option Plan Expense $ 521,001 ¥ 3,403,513 4,057,093
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross0 0 0
Restricted shares | Senior Manager [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation $ 500,000 ¥ 3,510,000
Outstanding Restricted Shares, Average Remaining Amortization Period (Years)7 months 21 days7 months 21 days
Restricted shares | October 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ $ 919,800
Restricted Stock Closing Price | $ / shares $ 5.11
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period180,000
Restricted shares | August 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ $ 2,523,240
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period5,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period391,200
Restricted shares | August 2018 | Independent Company [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Closing Price | $ / shares $ 6.40
Stock Issued During Period, Shares, Issued for Services5,000
Stock Issued During Period, Value, Issued for Services | $ $ 32,000
Restricted Stock For Services [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock or Unit Option Plan Expense | ¥ ¥ 33,927
Share-based Compensation | ¥ ¥ 0
Restricted Stock For Services [Member] | August 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Closing Price | $ / shares $ 6.45 $ 6.45

INCOME TAX (Details)

INCOME TAX (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
INCOME TAX
Outside China areas $ (985,906) ¥ (6,440,586) ¥ (7,624,668)
China(566,276)(3,699,278)904,020
Loss before income tax $ (1,552,182) ¥ (10,139,864) ¥ (6,720,648)

INCOME TAX - Deferred tax asset

INCOME TAX - Deferred tax asset, net (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Deferred tax assets:
Allowance for doubtful receivables $ 95,730 ¥ 625,375 ¥ 1,180,160
Impairment loss from investment in unconsolidated entity92,713 605,660 605,660
Net operating loss carryforwards1,567,095 10,237,274 10,441,633
Subtotal1,755,538 11,468,309 12,227,453
Less: Valuation allowance(1,743,535)(11,389,897)(12,162,660)
Total deferred tax assets12,003 78,412 64,793
Deferred tax Liability:
Accelerated amortization of intangible assets(12,003)(78,412)(64,793)
Total deferred tax liability12,003 78,412 64,793
Deferred tax assets, net $ 0 ¥ 0 ¥ 0

INCOME TAX - Income tax expense

INCOME TAX - Income tax expense (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
INCOME TAX
Current income tax provision(benefit) $ (15,053) ¥ (98,338) ¥ 316,799
Income tax expenses (benefit) $ (15,053) ¥ (98,338) ¥ 316,799

INCOME TAX - Additional Informa

INCOME TAX - Additional Information (Details)6 Months Ended
Dec. 31, 2020
Income Taxes [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate25.00%
Nanjing Recon Technology Co Ltd [Member]
Income Taxes [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate15.00%
Beijing Bhd Petroleum Technology Co Ltd [Member]
Income Taxes [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate15.00%

NON-CONTROLLING INTEREST (Detai

NON-CONTROLLING INTEREST (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020USD ($)Dec. 31, 2019CNY (¥)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Noncontrolling Interest [Line Items]
Paid-in capital $ 45,173,769 ¥ 295,104,195 ¥ 282,505,455
Accumulated other comprehensive loss289,984 1,894,365 2,825,731
Total non-controlling interests1,463,213 9,558,652 10,614,526
Capital contribution received7,654 ¥ 50,000 ¥ 405,000
Non-controlling Interest [Member]
Noncontrolling Interest [Line Items]
Paid-in capital1,018,883 $ 934,406 6,656,000 6,606,000
Unappropriated retained earnings449,030 571,342 2,933,355 4,039,229
Accumulated other comprehensive loss(4,700)(4,343)(30,703)(30,703)
Total non-controlling interests $ 1,463,213 1,501,405 9,558,652 10,614,526
Bhd [Member] | Non-controlling Interest [Member]
Noncontrolling Interest [Line Items]
Paid-in capital1,651,000 1,651,000
Unappropriated retained earnings3,477,493 3,477,493
Accumulated other comprehensive loss(18,850)(18,850)
Total non-controlling interests5,109,643 5,109,643
Nanjing Recon [Member] | Non-controlling Interest [Member]
Noncontrolling Interest [Line Items]
Paid-in capital200,000 200,000
Unappropriated retained earnings3,616,002 3,616,002
Accumulated other comprehensive loss(11,853)(11,853)
Total non-controlling interests3,804,149 3,804,149
Gan Su BHD [Member]
Noncontrolling Interest [Line Items]
Capital contribution received ¥ 50,000 $ 7,654 ¥ 405,000
Gan Su BHD [Member] | Non-controlling Interest [Member]
Noncontrolling Interest [Line Items]
Paid-in capital4,805,000 4,755,000
Unappropriated retained earnings(3,078,512)(2,100,871)
Accumulated other comprehensive loss0
Total non-controlling interests1,726,488 2,654,129
Qinghai BHD [Member] | Non-controlling Interest [Member]
Noncontrolling Interest [Line Items]
Paid-in capital0
Unappropriated retained earnings(1,081,628)(953,395)
Accumulated other comprehensive loss0
Total non-controlling interests ¥ (1,081,628) ¥ (953,395)

CONCENTRATIONS (Details)

CONCENTRATIONS (Details)6 Months Ended
Dec. 31, 2020Dec. 31, 2019
Customer One [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage11.00%
Another Customer [Member] | Sales Revenue, Net [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage19.70%
China National Petroleum Corporation | Sales Revenue, Net [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage36.70%62.60%
China National Petroleum Corporation | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage29.80%
SINOPEC [Member] | Sales Revenue, Net [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage20.90%13.10%

COMMITMENTS AND CONTINGENCY - P

COMMITMENTS AND CONTINGENCY - Purchase commitment (Details) - Dec. 31, 2020USD ($)CNY (¥)
Other Commitment, Fiscal Year Maturity [Abstract]
2021 $ 835,647 ¥ 5,458,985
Thereafter0 0
Total minimum payments required $ 835,647 ¥ 5,458,985

COMMITMENTS AND CONTINGENCY - O

COMMITMENTS AND CONTINGENCY - Office Leases Commitment - short term (Details) - Dec. 31, 2020USD ($)CNY (¥)
COMMITMENTS AND CONTINGENCY
2021 $ 24,646 ¥ 161,004
Total $ 24,646 ¥ 161,004

COMMITMENTS AND CONTINGENCY - A

COMMITMENTS AND CONTINGENCY - Additional Information (Details) - 6 months ended Dec. 31, 2020 ¥ in Millions, $ in MillionsUSD ($)CNY (¥)
COMMITMENTS AND CONTINGENCY
Severance Costs $ 0.6 ¥ 4.1

RELATED PARTY TRANSACTIONS AN_3

RELATED PARTY TRANSACTIONS AND BALANCES - Sales to related party (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Related Party Transaction [Line Items]
Total revenues from related party $ 13,112 ¥ 85,657 ¥ 0
Urumqi Yikeli Automatic Control Equipment Co., Ltd. [Member]
Related Party Transaction [Line Items]
Total revenues from related party $ 13,112 ¥ 85,657 ¥ 0

RELATED PARTY TRANSACTIONS AN_4

RELATED PARTY TRANSACTIONS AND BALANCES - Leases from related parties (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)
Monthly Payment [Member]
Operating Leases annual rental expense $ 230,000 ¥ 1,470,000
Nanjing Recon [Member] | Founders [Member]
Lessee, Operating Lease, Period of ContractApril 1, 2020 - March 31, 2022April 1, 2020 - March 31, 2022
Nanjing Recon [Member] | Founders [Member] | Monthly Payment [Member]
Operating Leases annual rental expense $ 6,123 ¥ 40,000
Bhd [Member] | Founders [Member]
Lessee, Operating Lease, Period of ContractJan 1, 2021- Dec 31, 2022Jan 1, 2021- Dec 31, 2022
Bhd [Member] | Founders [Member] | Monthly Payment [Member]
Operating Leases annual rental expense $ 3,674 ¥ 24,000
Bhd [Member] | Founders' family member [Member]
Lessee, Operating Lease, Period of ContractJan 1, 2021- Dec 31, 2022Jan 1, 2021- Dec 31, 2022
Bhd [Member] | Founders' family member [Member] | Monthly Payment [Member]
Operating Leases annual rental expense $ 7,463 ¥ 48,750
Recon BJ [Member] | Founders [Member]
Lessee, Operating Lease, Period of ContractJuly 1, 2020-Jun 1 ,2021July 1, 2020-Jun 1 ,2021
Recon BJ [Member] | Founders [Member] | Monthly Payment [Member]
Operating Leases annual rental expense $ 1,531 ¥ 10,000

RELATED PARTY TRANSACTIONS AN_5

RELATED PARTY TRANSACTIONS AND BALANCES - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Related Party Transaction [Line Items]
Right of use assets $ 316,954 ¥ 2,070,548 ¥ 2,549,914
Operating Lease, liabilities315,802 2,063,022 2,539,064
Monthly Payment [Member]
Related Party Transaction [Line Items]
Annual rental expense230,000 ¥ 1,470,000
Related Party
Related Party Transaction [Line Items]
Right of use assets88,921 803,503
Operating Lease, liabilities $ 88,921 ¥ 580,888 ¥ 803,503
Related Party | Monthly Payment [Member]
Related Party Transaction [Line Items]
Annual rental expense ¥ 122,750

VARIABLE INTEREST ENTITIES (Det

VARIABLE INTEREST ENTITIES (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020USD ($)Jun. 30, 2020CNY (¥)Dec. 31, 2019CNY (¥)Jun. 30, 2019CNY (¥)
Current assets
Cash $ 10,839,024 ¥ 70,807,497 $ 4,643,832 ¥ 30,336,504 ¥ 10,325,219 ¥ 4,521,325
Notes receivable1,192,472 7,789,997 4,180,885
Trade accounts receivable, net5,429,817 35,471,068 48,244,015
Trade accounts receivable-related party, net0 0 3,068,920
Inventories, net324,180 2,117,754 1,985,723
Other receivables, net1,684,589 11,004,821 6,350,802
Loans to third parties145,423 950,000 3,200,377
Purchase advances, net12,619 82,437 178,767
Contract assets, net6,983,690 45,621,966 31,537,586
Prepaid expenses0 0 198,294
Total current assets26,611,814 173,845,540 129,281,873
Property and equipment, net4,451,210 29,078,178 29,756,879
Land use right, net193,953 1,267,028 1,280,648
Investment in unconsolidated entity4,789,875 31,290,554 31,541,850
Long-term other receivables, net0 0 3,640
Right of use assets316,954 2,070,548 2,549,914
Total Assets237,551,848 194,414,804
Current liabilities
Short-term bank loans1,839,990 12,020,000 9,520,000
Trade accounts payable2,950,267 19,273,046 23,034,347
Other payables239,260 1,563,002 2,609,486
Accrued payroll and employees' welfare146,081 954,304 1,917,635
Taxes payable211,539 1,381,912 1,108,288
Short-term borrowings33,019 215,699 200,000
Operating lease liabilities - current204,069 1,333,113 1,328,976
Total Current Liabilities16,352,367 106,824,220 65,181,175
Operating lease liabilities - non-current111,733 729,909 1,210,088
Total Liabilities17,526,885 114,496,924 73,770,516
Variable Interest Entity, Primary Beneficiary
Current assets
Cash1,160,539 7,581,391 6,388,098
Notes receivable1,192,472 7,789,997 4,180,885
Trade accounts receivable, net4,833,905 31,578,187 44,031,079
Trade accounts receivable-related party, net0 0 3,068,920
Inventories, net324,180 2,117,754 1,985,723
Other receivables, net1,680,417 10,977,568 6,342,009
Loans to third parties145,423 950,000 3,200,377
Purchase advances, net12,619 82,437 75,195
Contract assets, net6,983,690 45,621,966 31,537,586
Prepaid expenses0 0 42,294
Total current assets16,333,245 106,699,300 100,852,166
Property and equipment, net4,451,210 29,078,178 29,756,879
Land use right, net193,953 1,267,028 1,280,648
Investment in unconsolidated entity612,309 4,000,000 4,000,000
Long-term other receivables, net0 0 3,640
Right of use assets316,954 2,070,548 2,549,914
Total Assets21,907,671 143,115,054 138,443,247
Current liabilities
Short-term bank loans1,839,990 12,020,000 9,520,000
Trade accounts payable2,365,907 15,455,630 18,903,080
Other payables134,999 881,898 1,115,209
Advance from customers1,023,566 6,686,592 3,486,033
Accrued payroll and employees' welfare83,690 546,716 850,841
Taxes payable211,554 1,382,008 1,108,265
Short-term borrowings33,019 215,699 200,000
Operating lease liabilities - current204,069 1,333,113 1,328,976
Total Current Liabilities7,951,344 51,943,300 50,703,956
Operating lease liabilities - non-current111,733 729,909 1,210,088
Long-term borrowings - related party1,062,785 6,942,795 7,379,253
Total Liabilities9,125,862 59,616,004 59,293,297
Related Party
Current liabilities
Other payables253,445 1,655,668 4,498,318
Short-term borrowings1,838,333 12,009,174 10,230,746
Long-term borrowings - related party - current portion135,152 882,900 847,346
Long-term borrowings - related party1,062,785 6,942,795 7,379,253
Related Party | Variable Interest Entity, Primary Beneficiary
Current liabilities
Other payables81,065 529,570 3,113,460
Short-term borrowings1,838,333 12,009,174 10,230,746
Long-term borrowings - related party - current portion $ 135,152 ¥ 882,900 ¥ 847,346

VARIABLE INTEREST ENTITIES - Ad

VARIABLE INTEREST ENTITIES - Additional Information (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Variable Interest Entity [Line Items]
Revenues $ 3,852,847 ¥ 25,169,279 ¥ 30,405,153
Operating expenses2,421,563 15,819,217 18,948,109
Net income (loss)1,367,845 8,935,652 6,701,197
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Revenues3,833,878 25,045,362 30,405,153
Operating expenses1,225,930 8,008,563 10,137,918
Net income (loss) $ 528,516 ¥ (3,452,609) ¥ (371,397)

SEGMENT REPORTING (Details)

SEGMENT REPORTING (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Total revenue $ 3,852,847 ¥ 25,169,279 ¥ 30,405,153
Automation product and software [Member]
Total revenue1,931,601 12,618,460 22,572,055
Equipment and accessories [Member]
Total revenue1,493,247 9,754,851 7,807,013
Oilfield environmental protection [Member]
Total revenue $ 427,999 ¥ 2,795,968 ¥ 26,085

SEGMENT REPORTING - Company's r

SEGMENT REPORTING - Company's revenue (Details)6 Months Ended
Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Dec. 31, 2019CNY (¥)
Revenue $ 3,852,847 ¥ 25,169,279 ¥ 30,405,153
Cost of revenues and related tax2,824,620 18,452,239 18,437,241
Gross profit1,028,227 6,717,040 11,967,912
Depreciation and amortization209,653 1,369,590 411,592
Total capital expenditures375,569 1,310,630
Goods transferred at a point in time [Member]
Revenue12,048,244 13,785,180
Services rendered over time [Member]
Revenue13,121,035 16,619,973
Automation product and software [Member]
Revenue1,931,601 12,618,460 22,572,055
Cost of revenues and related tax9,483,892 13,991,321
Gross profit3,134,568 8,580,734
Depreciation and amortization57,223 47,122
Total capital expenditures19,014 12,967
Automation product and software [Member] | Goods transferred at a point in time [Member]
Revenue2,293,393 5,978,167
Automation product and software [Member] | Services rendered over time [Member]
Revenue10,325,067 16,593,888
Equipment and accessories [Member]
Revenue1,493,247 9,754,851 7,807,013
Cost of revenues and related tax6,713,438 4,174,481
Gross profit3,041,413 3,632,532
Depreciation and amortization308,956 350,850
Total capital expenditures53,760 0
Equipment and accessories [Member] | Goods transferred at a point in time [Member]
Revenue9,754,851 7,807,013
Equipment and accessories [Member] | Services rendered over time [Member]
Revenue0 0
Oilfield environmental protection [Member]
Revenue $ 427,999 2,795,968 26,085
Cost of revenues and related tax2,254,909 271,439
Gross profit541,059 (245,354)
Depreciation and amortization1,003,411 13,620
Total capital expenditures302,795 1,297,663
Oilfield environmental protection [Member] | Goods transferred at a point in time [Member]
Revenue0 0
Oilfield environmental protection [Member] | Services rendered over time [Member]
Revenue ¥ 2,795,968 ¥ 26,085

SEGMENT REPORTING - Total asset

SEGMENT REPORTING - Total assets (Details)Dec. 31, 2020USD ($)Dec. 31, 2020CNY (¥)Jun. 30, 2020CNY (¥)
Assets [Abstract]
Total Assets ¥ 237,551,848 ¥ 194,414,804
Automation product and software [Member]
Assets [Abstract]
Total Assets $ 14,766,242 96,462,627 81,743,307
Equipment and accessories [Member]
Assets [Abstract]
Total Assets11,901,809 77,750,305 61,578,632
Oilfield environmental protection [Member]
Assets [Abstract]
Total Assets $ 9,695,754 ¥ 63,338,916 ¥ 51,092,865

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details)Apr. 05, 2021USD ($)$ / sharessharesJan. 21, 2021USD ($)Dec. 31, 2019USD ($)Dec. 31, 2019CNY (¥)Dec. 31, 2020sharesJun. 30, 2020shares
Subsequent Event [Line Items]
Share issued on vesting of restricted stock $ 5,193 ¥ 33,927
Common Stock, Shares Authorized20,000,000 20,000,000
Subsequent event | Common Stock [Member]
Subsequent Event [Line Items]
Payments of ordinary dividends | $ $ 1,850,000
Common Stock, Shares Authorized20,000,000
Common Stock, No Par Value | $ / shares $ 0.0925
Subsequent event | October 2017
Subsequent Event [Line Items]
Share issued on vesting of restricted stock | $ $ 59,998
Subsequent event | August 2018
Subsequent Event [Line Items]
Share issued on vesting of restricted stock | $ $ 128,664
Subsequent event | Common Class A [Member]
Subsequent Event [Line Items]
Payments of ordinary dividends | $ $ 15,725,000
Common Stock, Shares Authorized150,000,000
Common Stock, No Par Value | $ / shares $ 0.0925
Additional share issued130,000,000
Subsequent event | Common Class B [Member]
Subsequent Event [Line Items]
Common Stock, Shares Authorized20,000,000
Common Stock, No Par Value | $ / shares $ 0.0925
Additional share issued20,000,000