RETO ReTo Eco Solutions Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2024

 

Commission file number: 001-38307

 

RETO ECO-SOLUTIONS, INC.
(Registrant’s name)

 

c/o Beijing REIT Technology Development Co., Ltd.
X-702, 60 Anli Road, Chaoyang District, Beijing
People’s Republic of China 100101
(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒        Form 40-F ☐

 

 

 

INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

 

As previously disclosed, on December 30, 2024, ReTo Eco-Solutions, Inc., a British Virgin Islands business company (the “Company”), entered into a Share Sale Agreement (the “Agreement”) with Zhao Duan Wen (the “Buyer”), pursuant to which the Company sold all of its shares in REIT Holdings (China) Limited, a Hong Kong limited company and a wholly-owned subsidiary of the Company, to the Buyer for a purchase price of US$80,000 (the “Divestiture”) on December 31, 2024.

 

The unaudited pro forma condensed combined financial statements of the Company as of and for the six months ended June 30, 2024 and the year ended December 31, 2023, and the notes related thereto, are filed as Exhibit 99.1 and incorporated herein by reference. The unaudited pro forma condensed combined financial statements give effect to the Divestiture on the basis, and subject to the assumptions, set forth in accordance with Article 11 of Regulation S-X.

 

INCORPORATION BY REFERENCE

 

This Report on Form 6-K and the exhibits thereto, including any amendment and report filed for the purpose of updating such documents, shall be deemed to be incorporated by reference into each of (i) the registration statement on Form F-3, as amended (File No. 333-267101), of the Company, (ii) the registration statement on Form S-8, as amended (File No. 333-270355), of the Company, and (iii) the registration statement on Form S-8 (File No. 333-280119), of the Company and to be a part thereof from the date on which this Report on Form 6-K is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Unaudited Pro Forma Condensed Combined Financial Statements of ReTo Eco-Solutions, Inc. as of and for the Six Months Ended June 30, 2024 and the Year Ended December 31, 2023.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: January 7, 2025	RETO ECO-SOLUTIONS, INC.
	By:	/s/ Hengfang Li
	Name:	Hengfang Li
	Title:	Chief Executive Officer

 

 

3

Exhibit 99.1

 

On December 31, 2024, ReTo Eco-Solutions, Inc., a British Virgin Islands business company (the “Company”), disposed of all of its shares in REIT Holdings (China) Limited, a wholly-owned subsidiary of the Company, to Zhao Duan Wen for US$80,000 in total consideration.

 

The following unaudited condensed pro forma consolidated balance sheet and consolidated statements of Operations and Comprehensive Income (Loss) (the “financial statements”) are based upon the historical financial statements of the Company adjusted to reflect the disposition. The following unaudited condensed pro forma consolidated financial statements of the Company should be read in conjunction with the related notes and with the historical consolidated financial statements of the Company and the related notes included in previous filings with the Securities and Exchange Commission. The unaudited condensed pro forma consolidated balance sheet reflects the disposition as if it occurred on January 1, 2023 while the unaudited condensed pro forma consolidated statements of earnings give effect to the disposition as if it occurred on January 1, 2022, the beginning of the earliest period presented. The pro forma adjustments, described in the related notes, are based on the best available information and certain assumptions that management believes are reasonable.

 

The unaudited condensed pro forma consolidated financial statements are provided for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the disposition for the unaudited condensed pro forma consolidated balance sheet or on January 1, 2022 for the unaudited condensed pro forma consolidated statement of Operations and Comprehensive Income (Loss). For example, these financial statements do not reflect any potential earnings or other impacts from the use of the proceeds from the disposition or cost reductions of previously allocated corporate costs and potential subsequent restructuring charges. Readers should not rely on the unaudited condensed pro forma consolidated financial statements as being indicative of the historical operating results that the Company would have achieved or any future operating results or financial position that it will experience after the transaction closes.

 

 

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET

 

		As of June 30, 2024
						Pro Forma
		Historical				Adjustment(a)				Pro-Forma
ASSETS
Current Assets:
Cash and cash equivalents		$	1,552,455				(460,970	)		$	1,091,485
Accounts receivable, net			636,733				(527,320	)			109,413
Accounts receivable, net - related party			105,694				(105,694	)			-
Advances to suppliers, net			10,867,426				(693,943	)			10,173,483
Advances to suppliers, net - related party			1,500,983				(1,500,079	)			904
Inventories, net			281,653				(281,318	)			335
Prepayments and other current assets			112,966				(81,413	)			31,553
Due from third parties			346,822				(346,822	)			-
Deposits for equity acquisition			4,128,000				-				4,128,000
Due from related parties			72,082				-				72,082
Current assets of discontinued operations			-				3,997,559				3,997,559
Total Current Assets			19,604,814				-				19,604,814
Property, plant and equipment, net			7,389,114				(7,360,024	)			29,090
Intangible assets, net			4,156,564				(4,156,564	)			-
Long-term investment in equity investee			2,226,023				(2,226,023	)			-
Right-of-use assets			295,022				(262,686	)			32,336
Non-current assets of discontinued operations			-				14,005,297				14,005,297
Total Assets		$	33,671,537				-			$	33,671,537
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term loans		$	5,263,128				(5,263,128	)		$	-
Advances from customers			2,107,745				(1,856,380	)			251,365
Advances from customers-related party			340,381				(114,676	)			225,705
Deferred grants - current			187				(187	)			-
Accounts payable			2,956,208				(2,921,808	)			34,400
Accrued and other liabilities			3,089,936				(1,323,436	)			1,766,500
Loans from third parties			3,116,433				(2,918,289	)			198,144
Taxes payable			2,009,701				(1,737,696	)			272,005
Operating lease liabilities, current			126,838				(126,838	)			-
Deferred tax liability			276,452				(276,452	)			-
Current liabilities of discontinued operations			-				16,538,890				16,538,890
Total Current Liabilities			19,287,009				-				19,287,009
Loans from third parties-noncurrent			475,546				(475,546	)			-
Operating lease liabilities - noncurrent			132,009				(132,009	)			-
Non-current liabilities of discontinued operations			-				607,555				607,555
Total Liabilities			19,894,564				-				19,894,564
Commitments and Contingencies
Shareholders’ Equity:
Class A Shares, $0.1 par value, 20,000,000 shares authorized, 3,828,868 shares and 1,205,188 shares issued and outstanding as of June 30, 2024			382,887				-				382,887
Class B Shares, $0.01 par value, 2,000,000 shares authorized, nil shares issued and outstanding as of June 30, 2024			-				-				-
Additional paid-in capital			78,745,720				-				78,745,720
Statutory reserve			1,128,674				-				1,128,674
Accumulated deficit			(64,195,520	)			-				(64,195,520	)
Accumulated other comprehensive loss			(2,734,390	)			-				(2,734,390	)
Total Shareholders’ Equity Attributable to ReTo Eco-Solutions, Inc.		$	13,327,371				-			$	13,327,371
Noncontrolling interest			449,602				-				449,602
Total Shareholders’ Equity		$	13,776,973				-			$	13,776,973
Total Liabilities and Shareholders’ Equity		$	33,671,537				-			$	33,671,537

 

 

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET

 

		As of December 31, 2023
						Pro Forma
		Historical				Adjustment(a)				Pro-Forma
ASSETS
Current Assets:
Cash and cash equivalents		$	1,413,669				(1,261,182	)		$	152,487
Accounts receivable, net			1,062,237				(1,062,237	)			-
Accounts receivable, net - related party			108,188				(108,188	)			-
Advances to suppliers, net			5,292,114				(5,291,192	)			922
Advances to suppliers, net - related party			1,807,965				(1,807,965	)			-
Inventories, net			136,191				(136,191	)			-
Prepayments and other current assets			285,655				(179,714	)			105,941
Due from related parties			358,659				-				358,659
Current assets of discontinued operations			-				9,846,669				9,846,669
Total Current Assets			10,464,678				-				10,464,678
Property, plant and equipment, net			7,761,328				(7,723,749	)			37,579
Intangible assets, net			4,449,989				(4,449,857	)			132
Long-term investment in equity investee			2,337,451				(2,337,451	)			-
Right-of-use assets			231,802				(194,478	)			37,324
Non-current assets of discontinued operations			-				14,705,535				14,705,535
Total Assets		$	25,245,248				-			$	25,245,248
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term loans		$	5,387,400				(5,387,400	)		$	-
Advances from customers			1,712,320				(1,711,034	)			1,286
Advances from customers-related party			344,051				(344,051	)			-
Deferred grants - current			191				(191	)			-
Accounts payable			2,974,650				(2,939,439	)			35,211
Accounts payable - related party			3,080								3,080
Accrued and other liabilities			3,663,204				(1,848,218	)			1,814,986
Loans from third parties			852,125				(852,125	)			-
Taxes payable			1,986,935				(1,732,802	)			254,133
Operating lease liabilities, current			89,500				(89,500	)			-
Deferred tax liability			299,622				(299,622	)			-
Current liabilities of discontinued operations			-				15,204,382				15,204,382
Total Current Liabilities			17,313,078				-				17,313,078
Loans from third parties-noncurrent			2,977,166				(2,864,488	)			112,678
Operating lease liabilities - noncurrent			103,830				(103,830	)			-
Non-current liabilities of discontinued operations							2,968,318				2,968,318
Total Liabilities			20,394,074				-				20,394,074
Commitments and Contingencies
Shareholders’ Equity:
Class A Shares, $0.1 par value, 20,000,000 shares authorized, 3,828,868 shares and 1,205,188 shares issued and outstanding as of December 31, 2023			120,518				-				120,518
Class B Shares, $0.01 par value, 2,000,000 shares authorized, nil shares issued and outstanding as of December 31, 2023			-				-				-
Additional paid-in capital			68,876,257				-				68,876,257
Statutory reserve			1,072,895				-				1,072,895
Accumulated deficit			(63,461,282	)			-				(63,461,282	)
Accumulated other comprehensive loss			(2,253,561	)			-				(2,253,561	)
Total Shareholders’ Equity Attributable to ReTo Eco-Solutions, Inc.		$	4,354,827				-			$	4,354,827
Noncontrolling interest			496,347				-				496,347
Total Shareholders’ Equity		$	4,851,174				-			$	4,851,174
Total Liabilities and Shareholders’ Equity		$	25,245,248				-			$	25,245,248

 

 

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS

  

		For six months ended June 30, 2024
						Pro-Forma
		Historical				Adjustment(b)				Pro-Forma
Revenues – third party customers		$	1,620,008			$	(851,647	)		$	768,361
Revenues – related parties			218,631				(218,631	)			-
Total revenues			1,838,639				(1,070,278	)			768,361
Cost of revenues – third party customers			1,129,534				(693,728	)			435,806
Cost of revenues – related parties			141,624				(141,624	)			-
Total Cost			1,271,158				(835,352	)			435,806
Gross Profit			567,481				(234,926	)			332,555
Operating Expenses:
Selling expenses			133,455				(26,068	)			107,387
General and administrative expenses			1,368,407				(710,357	)			658,050
(Recovery of) provision for credit losses			63,462				26,122				89,584
Research and development expenses			76,257				(76,257	)			-
Total Operating Expenses			1,641,581				(786,560	)			855,021
Loss from Operations			(1,074,100	)			551,634				(522,466	)
Other Income (expenses):
Interest expenses			(255,240	)			253,612				(1,628	)
Interest income			24,385				(24,173	)			212
Other income (expenses), net			629,902				(629,680	)			222
Share of losses in equity method investments			(57,960	)			57,960				-
Total Other Income (expenses), Net			341,087				(342,281	)			(1,194	)
Loss Before Income Taxes			(733,013	)			209,353				(523,660	)
Income Taxes Expense (Benefit)			(16,380	)			16,380				-
Net loss from continuing operations			(716,633	)			-				(716,633	)
Net loss from discontinued operations, net of taxes			-				(192,973	)			(192,973	)
Net Loss			(716,633	)			192,973				(523,660	)
Less: net loss attributable to noncontrolling interest		$	(38,174	)		$	38,174			$	-
Net loss attributable to ReTo Eco-Solutions, Inc.			(678,459	)			-				(678,459	)
Continuing operations			(678,459	)			154,799				(523,660	)
Discontinued operations			-				(154,799	)			(154,799	)
Comprehensive Loss
Net Loss		$	(716,633	)		$				$	(716,633	)
Other comprehensive loss:
Foreign currency translation adjustment			(489,400	)							(489,400	)
Comprehensive Loss			(1,206,033	)							(1,206,033	)
Less: comprehensive loss attributable to noncontrolling interest			(46,745	)			-				(46,745	)
Comprehensive loss attributable to ReTo Eco-Solutions, Inc.			(1,159,288	)			-				(1,159,288	)
Basic and Diluted Loss Per Share Attributable to ReTo Eco-Solutions, Inc.
Continuing operations		$	(0.25	)		$	0.06			$	(0.19	)
Discontinued operations			-				(0.06	)			(0.06	)
Total			(0.25	)			-				(0.25	)
Weighted Average Number of Shares
Basic and diluted			2,745,361				2,745,361				2,745,361

 

 

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

 

		For the year ended June December 31, 2023
						Pro-Forma
		Historical				Adjustment(b)				Pro-Forma
Revenues – third party customers		$	3,191,961			$	(3,181,180	)		$	10,781
Revenues – related parties			44,325				(44,325	)			-
Total revenues			3,236,286				(3,225,505	)			10,781
Cost of revenues – third party customers			2,982,222				(2,972,982	)			9,240
Cost of revenues – related parties			43,992				(43,992	)			-
Total Cost			3,026,214				(3,016,974	)			9,240
Gross Profit			210,072				(208,531	)			1,541
Operating Expenses:
Selling expenses			1,194,179				(1,188,240	)			5,939
General and administrative expenses			9,406,268				(2,906,328	)			6,499,940
(Recovery of) provision for credit losses			(611,158	)			588,852				(22,306	)
Impairment of long-lived assets			399,097				(399,097	)			-
Research and development expenses			1,166,044				(1,166,044	)			-
Total Operating Expenses			11,554,430				(5,070,857	)			6,483,573
Loss from Operations			(11,344,358	)			4,862,326				(6,482,032	)
Other Income (expenses):
Interest expenses			(420,514	)			351,600				(68,914	)
Interest income			25,182				(48,349	)			(23,167	)
Other income (expenses), net			(4,336,370	)			4,336,348				(22	)
Gain from dissolution of subsidiaries			37,569				(37,569	)			-
Share of losses in equity method investments			(95,031	)			95,031				-
Change in fair value convertible debt			47,813				-				47,813
Total Other Income (expenses), Net			(4,741,351	)			4,697,061				(44,290	)
Loss Before Income Taxes			(16,085,709	)			9,559,387				(6,526,322	)
Income Taxes Expense (Benefit)			(16,639	)			16,639				-
Net loss from continuing operations			(16,069,070	)			9,542,748				(6,526,322	)
Net loss from discontinued operations, net of taxes			-				(9,542,748	)			(9,542,748	)
Net Loss			(16,069,070	)			-				(16,069,070	)
Less: net loss attributable to noncontrolling interest		$	(427,335	)		$	427,335			$	-
Net loss attributable to ReTo Eco-Solutions, Inc.			(15,641,735	)			(427,335	)			(16,069,070	)
Continuing operations			(15,641,735	)			9,115,413				(6,526,322	)
Discontinued Operations			-				(9,115,413	)			(9,115,413	)
Comprehensive Loss
Net Loss		$	(16,069,070	)		$	-			$	(16,069,070	)
Other comprehensive loss:
Foreign currency translation adjustment			223,433				-				223,433
Comprehensive Loss			(15,845,637	)			-				(15,845,637	)
Less: comprehensive loss attributable to noncontrolling interest			(339,231	)			-				(339,231	)
Comprehensive Loss Attributable to ReTo Eco-Solutions, Inc		$	(15,506,406	)		$	-			$	(15,506,406	)
Basic and Diluted Loss Per Share Attributable to ReTo Eco-Solutions, Inc.
Continuing operations		$	(19.44	)		$	11.33			$	(8.11	)
Discontinued operations			-				(11.33	)			(11.33	)
Total			(19.44	)			-				(19.44	)
Weighted Average Number of Shares
Basic and diluted			804,566				804,566				804,566

 

 

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS

 

		For the year ended June December 31, 2022
						Pro-Forma
		Historical				Adjustment(b)				Pro-Forma
Revenues – third party customers		$	6,168,798			$	(5,964,303	)		$	204,495
Revenues – related parties			304,875				(304,875	)			-
Total revenues			6,473,673				(6,269,178	)			204,495
Cost of revenues – third party customers			5,195,159				(4,991,811	)			203,348
Cost of revenues – related parties			471,849				(471,849	)			-
Total Cost			5,667,008				(5,463,660	)			203,348
Gross Profit			806,665				(805,518	)			1,147
Operating Expenses:
Selling expenses			3,774,666				(3,820,824	)			(46,158	)
General and administrative expenses			8,592,966				(2,701,416	)			5,891,550
(Recovery of) provision for credit losses			1,710,839				(1,684,857	)			25,982
Impairment of goodwill			1,018,870				(1,018,870	)			-
Research and development expenses			960,598				(960,598	)			-
Total Operating Expenses			16,057,939				(10,186,565	)			5,871,374
Loss from Operations			(15,251,274	)			9,381,047				(5,870,227	)
Other Income (expenses):
Interest expenses			(321,686	)			160,710				(160,976	)
Interest income			3,234				(37,545	)			(34,311	)
Other income (expenses), net			177,753				(115,811	)			61,942
Gain from dissolution of subsidiaries			508,345				(338,130	)			170,215
Share of losses in equity method investments			(46,209	)			46,207				(2	)
Change in fair value convertible debt			(467,383	)			-				(467,383	)
Total Other Income (expenses), Net			(145,946	)			(284,569	)			(430,515	)
Loss Before Income Taxes			(15,397,220	)			9,096,478				(6,300,742	)
Income Taxes Expense (Benefit)			(17,562	)			17,562				-
Net loss from continuing operations			(15,379,658	)			9,078,916				(6,300,742	)
Net loss from discontinued operations, net of taxes			-				(9,078,916	)			(9,078,916	)
Net Loss			(15,379,658	)			-				(15,379,658	)
Less: net loss attributable to noncontrolling interest		$	(750,603	)		$	750,603			$	-
Net loss attributable to ReTo Eco-Solutions, Inc.			(14,629,055	)			-				(14,629,055	)
Continuing operations			(14,629,055	)			8,328,313				(6,300,742	)
Discontinuing operations							(8,328,313	)			(8,328,313	)
Comprehensive Loss
Net Loss		$	(15,379,658	)		$	-			$	(15,379,658	)
Other comprehensive loss:
Foreign currency translation adjustment			(1,183,819	)			-				(1,183,819	)
Comprehensive Loss			(16,563,477	)			-				(16,563,477	)
Less: comprehensive loss attributable to noncontrolling interest			(680,918	)			-				(680,918	)
Comprehensive Loss Attributable to ReTo Eco-Solutions, Inc		$	(15,882,559	)		$	-			$	(15,882,559	)
Basic and Diluted Loss Per Share Attributable to ReTo Eco-Solutions, Inc.
Continuing operations		$	(37.7	)		$	21.46			$	(16.24	)
Discontinued operations			-				(21.46	)			(21.46	)
Total			(37.7	)			-				(37.7	)
Weighted Average Number of Shares
Basic and diluted			388,010				388,010				388,010

 

 

NOTES TO UNAUDITED AND UNREVIEWED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The pro forma adjustments are based on preliminary estimates and assumptions by management that may be subject to change. The following adjustments have been reflected in the unaudited condensed pro forma consolidated financial information:

 

(a) Adjustment to reclassify the assets and liabilities attributable to the discontinued business as of June 30, 2024 and December 31, 2023, respectively.

 

(b) Adjustment to reclassify the results of operations related to the discontinued business for the six months ended June 30, 2024, for the years ended December 31, 2023 and 2022, respectively.

 

 

7

 

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