Recon Technology Enters into MoU to Acquire Oilfield Service Company in Qinghai

Recon Technology, Ltd.

today announced that it, along with its wholly-owned PRC subsidiary, Recon Hengda Technology (Beijing) Co., Ltd., has entered into a memorandum of understanding (the "MOU") with Qinghai Huayou Downhole Technologies Co., Ltd. ( "QHHY"), a PRC corporation and oilfield service provider in Qinghai province. Pursuant to the MOU entered into by and between the Company and QHHY on July 29, 2015, the Company has agreed to acquire a 100% stake in QHHY with a combination of cash and the Company stock (the "Transaction"). The terms and conditions of a definitive agreement are currently being negotiated between the two parties. Further details will be disclosed upon completion of the definitive agreement. Mr. Shenping Yin, Chairman and Chief Executive Officer of Recon, commented, "We are excited about the unique opportunity that QHHY represents. QHHY's expertise in downhole technology will further strengthen and complement our existing product and service offerings. In addition, QHHY has demonstrated strong growth and profitability since its inception. We anticipate that QHHY's long-term contract oriented business model will provide stable cash flow which will smooth out