F-1: ReTo Eco-Solutions Registers Shares for Resale Amidst Strategic Shift

Sentiment:

Registration Statement for Resale Offering 15 September 2025 4:11 PM

📋All filings for Reto Eco-solutions, INC

ReTo Eco-Solutions, Inc. filed an F-1 registration statement for the resale of up to 10.66 million Class A shares by Streeterville Capital, LLC, following a strategic divestiture and acquisition.

Delay expectedThe company is required to file with the CSRC for the MeinMalzeBier acquisition and the current offering. These filings have been submitted and are under review, with uncertainty regarding the timeline for completion.The prospectus states, 'We cannot predict whether or for how long we will be able to complete the filing procedure with the CSRC and complete such filing.'

Capital raiseThe filing is a registration statement for the resale of up to 10,663,612 Class A shares by Streeterville Capital, LLC, which includes shares from a Securities Purchase Agreement for pre-paid purchases of up to $10,000,000.The Securities Purchase Agreement with Streeterville Capital, LLC, dated June 16, 2025, provides for an initial Pre-Paid Purchase in the principal amount of $3,165,000 and allows for additional Pre-Paid Purchases up to an aggregate of $10,000,000 over a two-year period.The company completed a private placement in August 2024, issuing 1,409,520 Class A Shares for aggregate gross proceeds of $19,451,376, with approximately $4.9 million used and the balance intended for future mergers and acquisitions and working capital.The company may also seek equity financing from outside investors to improve liquidity and capital sources, though no commitments are currently in place.

Worse than expectedThe company reported significant net losses for the past three fiscal years, including $8.4 million in 2024.A working capital deficit of approximately $2.6 million as of December 31, 2024, indicates a strained liquidity position.The independent registered public accounting firm issued a going concern qualification, highlighting substantial doubt about the company's ability to continue operations.The company faces ongoing regulatory risks in China and the threat of delisting from Nasdaq, which could severely impact its market value and ability to raise capital.

Summary

ReTo Eco-Solutions, Inc. (RETO) filed an F-1 registration statement for the resale of up to 10,663,612 Class A shares by Streeterville Capital, LLC.
The shares for resale include 28,612 Commitment Shares, 635,000 Pre-Delivery Shares, and up to 10,000,000 Class A shares potentially issuable from pre-paid purchase balances under a Securities Purchase Agreement.
The company will not receive any proceeds from the sale of these shares by the Selling Shareholder.
In December 2024, ReTo completed the divestiture of its eco-friendly construction materials, ecological restoration, and software development businesses (REIT Holdings) for $80,000, shifting focus to environmental protection and intelligent equipment.
In April 2025, ReTo acquired a 51% equity interest in MeinMalzeBier Holdings Limited for $3,978,000 in cash and 4,680,000 newly issued Class A shares (valued at $15,912,000), which sells craft beers and beer machines.
The company implemented a 10-for-1 reverse stock split (2025 Share Combination) effective March 7, 2025, and changed the par value of Class A shares to no par value on May 13, 2025.
A Securities Purchase Agreement with Streeterville Capital, LLC, dated June 16, 2025, allows for up to $10,000,000 in aggregate pre-paid purchases of Class A shares, with an initial pre-paid purchase of $3,165,000 (net of OID and expenses).
ReTo reported a net loss of approximately $8.4 million for the year ended December 31, 2024, compared to $16.1 million in 2023 and $15.4 million in 2022.
Continuing operations revenue increased significantly to $1.8 million in 2024 from $10,781 in 2023, with gross profit rising to $0.8 million and gross margin to 45% in 2024.
As of December 31, 2024, the company had a working capital deficit of approximately $2.6 million and cash of approximately $0.7 million.
The company's auditor expressed substantial doubt about its ability to continue as a going concern.
ReTo operates primarily in China as a BVI holding company and is subject to significant PRC regulatory and operational risks, including potential delisting under the HFCAA.

Sentiment

Score: 3

Explanation: The company is undergoing a significant strategic shift into potentially high-growth markets, which is a positive. However, this is overshadowed by persistent net losses, a working capital deficit, a going concern warning from auditors, and substantial regulatory and delisting risks associated with its China operations. The capital raise through Streeterville Capital provides some liquidity but the overall financial health and operational environment remain highly challenging and uncertain.

Positives

The company completed a strategic divestiture of non-performing assets in December 2024, allowing it to focus on more profitable and promising businesses.
Continuing operations revenue increased significantly by 16,865% to approximately $1.8 million in 2024 from $10,781 in 2023, indicating strong growth in its new focus areas.
Gross profit from continuing operations surged by 53,450% to approximately $0.8 million in 2024 from $1,541 in 2023, with gross margin improving to 45% from 14%.
The acquisition of a 51% equity interest in MeinMalzeBier Holdings Limited in April 2025 expands the company's offerings into the growing smart craft beer machine and craft beer markets.
The company has identified significant market opportunities in ecological environment protection equipment (RMB920 billion in China by 2024), global mining equipment ($135 billion by 2029), and China's smart craft beer market ($30 billion by 2035).
The Streeterville Capital financing provides access to up to $10,000,000 in pre-paid purchases, enhancing potential liquidity and funding for operations.

Negatives

The company reported significant net losses of $8.4 million in 2024, $16.1 million in 2023, and $15.4 million in 2022.
A working capital deficit of approximately $2.6 million as of December 31, 2024, indicates liquidity challenges.
The independent registered public accounting firm expressed substantial doubt about the company's ability to continue as a going concern.
The company is subject to significant legal and operational risks associated with having substantially all operations in China, including evolving regulatory actions and potential government intervention.
There is a risk of delisting from Nasdaq under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect the company's auditor for two consecutive years.
The company is required to complete CSRC filings for the MeinMalzeBier acquisition and the current offering, with uncertainty regarding timely completion and potential sanctions for failure.
ReTo relies on dividends and distributions from PRC subsidiaries for cash, which are subject to PRC regulations, capital controls, and statutory reserve requirements, potentially limiting fund transfers.

Risks

Inability to complete the CSRC filing procedure for the MeinMalzeBier acquisition and the current offering, potentially leading to sanctions, fines (RMB 1.0 million to RMB 10.0 million), and operational limitations.
Changes in China's economic, political, or social conditions, government policies, or relations between China and the United States.
Significant oversight, control, intervention, and/or influence by the PRC government over business operations, potentially resulting in material adverse changes.
Complex and evolving laws and regulations regarding privacy and data protection in China (e.g., Data Security Law, Cybersecurity Review Measures, Personal Information Protection Law).
Uncertainties regarding the interpretation and enforcement of PRC laws, rules, and regulations.
Risk of delisting from Nasdaq under the HFCAA if the PCAOB is unable to inspect the company's auditor for two consecutive years.
Potential treatment as a resident enterprise for PRC tax purposes, leading to PRC income tax on global income.
Foreign exchange controls in China, which could limit the use of funds raised in future offerings and adversely affect liquidity.
Restrictions on the ability of PRC subsidiaries to make payments or distribute dividends to the holding company due to PRC regulations and capital controls.
Fluctuations in exchange rates between RMB and USD.
Adverse impact on business from tensions in international trade and rising political tensions.
Potential supply chain disruptions.
Severe or prolonged downturn in the global or Chinese economy.
Slowdown of industries in which customers operate.
Decline in availability or increase in cost of raw materials.
Reliance on a limited number of vendors and potential loss of significant vendors.
Risks in collecting accounts receivable.
Failure to protect intellectual property rights.
Substantial doubt about the ability to continue as a going concern.
Failure to maintain a reserve for warranty or defective products and installation claims.
Product defects and unanticipated use or inadequate disclosure with respect to products.
Various hazards causing personal injury or property damage, potentially exceeding insurance coverage.
Material costs and losses from claims based on product failure to meet regulatory or contractual specifications.
Substantial liabilities to comply with environmental laws and regulations.
Inability to implement and maintain effective internal control over financial reporting.
Failure to meet Nasdaq's continued listing requirements.
Volatility of trading prices of Class A shares.
Negative reports by securities or industry analysts.
Substantial future sales or perceived sales of Class A shares in the public market.

Future Outlook

The company plans to expand its global footprint and promote sales of ecological and environmental protection equipment, mining equipment, and smart craft beer brewing equipment. Strategies include upgrading existing products, developing new models (e.g., large-scale RT18 machine), increasing international market share by adding distributors in Southeast Asia, the Middle East, and Africa, and pursuing strategic acquisitions in solar energy facilities and the health and wellness industry. The company intends to retain most, if not all, available funds and future earnings for business development and growth in China and does not expect to pay dividends in the foreseeable future.

Management Comments

We believe there is a unique opportunity to grow our company, which we expect will be driven by demand for our ecological environment protection equipment, due to China's recent emphasis on environmental protection.
We believe our technological know-how, production capacity, reputation and offerings of products and services will enable us to seize these opportunities in the mining and craft beer markets.
We intend to retain most, if not all, of our available funds and any future earnings for the development and growth of our business in China. We do not expect to pay dividends or distribute earnings in the foreseeable future.

Industry Context

The company's strategic shift aligns with global and regional trends emphasizing environmental protection, infrastructure development, and consumer lifestyle changes. The ecological environment protection equipment market in China reached RMB920 billion in 2024, driven by government initiatives. The global mining equipment market is projected to grow from $98 billion in 2024 to $135 billion by 2029, fueled by demand in emerging markets like East Africa, Southeast Asia, and Central Asia. The China craft beer market is estimated at $6.13 billion in 2023 and is projected to grow to $30 billion by 2035, indicating significant consumer demand for specialized products. ReTo's moves to divest non-core assets and acquire into these growth sectors reflect an attempt to capitalize on these macro-level industry tailwinds.

Comparison to Industry Standards

The Chinese environmental protection equipment industry reached RMB920 billion in 2024, with a compound annual growth rate (CAGR) of 6%. ReTo's focus on this sector positions it within a growing market.
The global mining equipment market reached $98 billion in 2024 and is projected to reach $135 billion by 2029, representing a CAGR of approximately 5.12%. ReTo's expansion into this market, particularly in East African countries, targets regions with high demand and underdeveloped operations.
The global craft beer market is projected to grow from $102.59 billion in 2021 to $210.78 billion by 2028, at a CAGR of 10.83%. The China craft beer market is estimated at $6.13 billion in 2023 and is projected to grow to $30 billion by 2035, with a forecast CAGR of approximately 14.87% between 2025 and 2035. ReTo's acquisition of MeinMalzeBier positions it in a rapidly expanding segment, particularly strong in the Asia-Pacific region.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Share Redesignation	Existing common shares, par value US$0.10 each, were redesignated as Class A Shares with the same rights. An additional 2,000,000 shares were created and designated as Class B Shares, each entitling the holder to 1,000 votes but with transfer restrictions, pre-emption rights, and no right to dividends or liquidation distributions.	2024-08-08	This change significantly altered the voting power structure, with REIT International Development (Group) Co., Limited holding 99.3% of the aggregate voting power, making the company a 'controlled company' under Nasdaq rules. While the company does not intend to rely on the controlled company exemption, it could in the future, potentially reducing shareholder protections.
Change in Par Value	The par value of existing Class A Shares was adjusted from $1.00 each to no par value.	2025-05-13	This is primarily an administrative change to the company's capital structure, filed with the British Virgin Islands Registrar of Corporate Affairs. It does not directly impact the economic rights or voting power of shareholders but simplifies the accounting treatment of shares.

Related Party Transactions

For the fiscal years ended December 31, 2022, 2023, and 2024, funds equivalent to approximately $4.2 million, $0.1 million, and $29.4 million, respectively, were provided to PRC subsidiaries as shareholder loans.
As of December 31, 2024, Mr. Hengfang Li (CEO and Chairman) had a balance due from him of $24,048.
For the year ended December 31, 2024, sales to Q Green Techcon Private Limited (a non-controlling shareholder of a disposal subsidiary) amounted to $229,600.
On August 14, 2024, the company issued 1,000,000 Class B Shares to REIT International Development (Group) Co., Limited for $10,000. Mr. Hengfang Li, Mr. Guangfeng Dai, Mr. Zhizhong Hu, and Mr. Degang Hou collectively hold 100% ownership of REIT International.

Stakeholder Impact

**Shareholders:** Face significant risks including potential delisting, dilution from future capital raises, and uncertainty regarding the value of their investment due to ongoing losses and regulatory challenges. The strategic shift and new acquisitions offer potential for future growth but are accompanied by high execution risk. The resale of shares by Streeterville Capital will not generate proceeds for the company, potentially limiting its ability to fund operations without further capital raises.
**Employees:** The strategic shift and divestiture of non-performing assets could lead to changes in workforce composition and focus. The acquisition of MeinMalzeBier and expansion into new sectors may create new opportunities.
**Customers:** The company's new focus on ecological environment protection equipment, intelligent mining equipment, and smart craft beer machines aims to meet evolving market demands and provide advanced solutions. The divestiture of previous business lines means a change in product and service offerings for former customers.
**Suppliers:** The company's reliance on a limited number of suppliers for raw materials and manufacturing, particularly in China, exposes it to supply chain risks. The strategic shift may lead to new supplier relationships in the focused business areas.
**Creditors:** The company's working capital deficit and going concern warning indicate elevated credit risk. The Streeterville Capital financing provides some capital, but overall financial stability remains a concern.

Next Steps

Complete the CSRC filing procedure for the MeinMalzeBier acquisition and the current offering.
Continue to upgrade existing products and develop new products, including the large-scale RT18 machine for solid waste utilization, various types of mining equipment, and smart craft beer machines.
Increase revenue and market share by expanding the business network internationally, adding distributors in Southeast Asia, the Middle East, and Africa.
Change advertising strategies to reach new customers through digital marketing and participate in targeted international marketing events.
Pursue strategic acquisitions in existing and new markets, specifically seeking companies engaged in manufacturing solar energy facilities and exploring ventures in the health and wellness sector.
Improve liquidity and capital sources through cash flow from operations, renewal of bank borrowings, and borrowing from related parties, and potentially seek additional equity financing.

Key Dates

Date	Description
2021-07-06	Company entered into a securities purchase agreement for the issuance of a Convertible Debenture (July 2021 Debenture) in the aggregate principal amount of up to $2,500,000.
2022-03-10	Company entered into a securities purchase agreement for the issuance of a Convertible Promissory Note (March 2022 Note) in the aggregate principal amount of $3,105,000.
2022-04-08	Company signed an agreement to purchase the minority shareholder's 30% equity interest in Xinyi REIT for RMB 18 million.
2022-04-22	Company's board of directors approved the issuance of 1,025 common shares to employees under the 2018 Share Incentive Plan and 3,000 common shares to employees, officers, and directors under the 2021 Share Incentive Plan.
2022-05-25	Company issued 5,970 common shares to Hainan Tashanshi Digital Information Co., Ltd. for $3,582,000.
2022-10-13	Company entered into a standstill agreement with the investor of the March 2022 Note, increasing the Note balance by $310,500.
2022-12-20	Principal balance of $100,000 of the March 2022 Note converted into 291 common shares.
2023-03-08	Company's board of directors approved the issuance of 5,000 common shares to employees, officers, and directors under the 2022 Share Incentive Plan. Also, issued 2,000 common shares to Express Transportation Ltd. and 2,000 common shares to Maxleed Investment Holding Ltd. for consulting services.
2023-05-09	Company implemented a 10-for-1 reverse stock split (2023 Share Combination).
2023-05-12	Company's common shares began trading on a post-combination basis.
2023-05-18	Company entered into a securities purchase agreement to issue 20,000 common shares for $6,600,000.
2023-05-25	Issuance of 20,000 common shares for $6,600,000 completed.
2023-05-26	Company entered into an extension agreement for the March 2022 Note, increasing the balance by $145,569. Also, entered into a loan agreement with Honghe County Yisa Hengtong Decoration Company to borrow $112,678.
2023-07-31	Company's board of directors approved a change in the maximum authorized shares to an unlimited number of shares of a single class.
2023-09-25	Company entered into a consulting service agreement with SevenBull, Inc. to issue 20,000 common shares.
2023-09-29	Company entered into securities purchase agreements for a private placement (2023 Private Placement) to sell 100,000 Common Shares at $100.00 per share, and a concurrent private placement for 100,000 common shares at $100.00 per share.
2023-10-03	Issued 20,000 common shares to SevenBull, Inc. valued at $1,131,200.
2024-01-29	Company received a delisting determination letter from Nasdaq due to failure to comply with the minimum bid price requirement.
2024-02-01	Company's board of directors approved a 10-to-1 reverse stock split (2024 Share Combination).
2024-03-01	Company's common shares began trading on a post-combination basis for the 2024 Share Combination.
2024-03-13	Company amended the September 2023 Offering and Concurrent Private Placement, changing the subscription price from $100.00 to $40.00 per share, and closed the offerings with gross proceeds of $6,000,000 and $4,000,000 respectively.
2024-03-28	Company received a letter from Nasdaq notifying that it had regained compliance with listing rules and would remain on a Discretionary Panel Monitor for one year.
2024-05-06	Company entered into a new loan agreement with Honghe County Yisa Hengtong Decoration Company to borrow $109,600.
2024-06-07	Company's board of directors approved the issuance of 18,726 common shares to employees, officers, and directors under the 2022 Share Incentive Plan.
2024-08-04	Company's board of directors and shareholders approved the redesignation of existing common shares as Class A shares and the creation of Class B shares.
2024-08-08	Effective date of share redesignation and creation of Class B shares.
2024-08-14	Company issued 1,000,000 Class B Shares to REIT International Development (Group) Co., Limited for $10,000.
2024-08-30	Company entered into a securities purchase agreement for the August 2024 Private Placement, issuing 1,409,520 Class A Shares for $19,451,376. Also engaged Jaash Investment Limited for consulting services, agreeing to issue 126,857 Class A Shares.
2024-09-06	Issued 126,857 Class A shares to Jaash Investment Limited for consulting services.
2024-12-03	Company acquired a concession right on forest land from a third party for $7,671,969.
2024-12-30	ReTo entered into a share sale agreement with Zhao Duan Wen to sell all shares in REIT Holdings for $80,000.
2024-12-31	December 2024 Divestiture closed, company ceased operations in eco-friendly construction materials, ecological restoration, and software development.
2025-01-29	Company received a delisting determination letter from Nasdaq due to failure to comply with the minimum bid price requirement.
2025-02-11	ReTo's board of directors approved the 2025 Share Combination (10-to-1 reverse stock split).
2025-03-07	Effective date of the 2025 Share Combination.
2025-03-28	Company received a letter from Nasdaq notifying that the Panel concluded it had regained compliance and would remain on a Discretionary Panel Monitor for one year.
2025-04-25	ReTo completed the acquisition of a 51% equity interest in MeinMalzeBier Holdings Limited for $3,978,000 cash and 4,680,000 Class A shares. ReTo Hengda entered into a Management Services Agreement with Melody and Dirong. ReTo entered into an Advisory and Consulting Agreement with a third-party consultant.
2025-05-12	Company's board of directors approved to amend and restate the M&A to adjust the par value of Class A Shares from $1.00 each to no par value.
2025-05-13	ReTo filed the amended and restated M&A to reflect the adjustment of Class A share par value.
2025-06-16	ReTo entered into the Securities Purchase Agreement with Streeterville Capital, LLC for up to $10,000,000 in pre-paid purchases of Class A Shares.
2025-06-17	Closing Date of the Securities Purchase Agreement with Streeterville Capital, LLC, with issuance of 28,612 Commitment Shares and 635,000 Pre-Delivery Shares.
2025-09-11	Closing sale price of Class A Shares was $1.56 on Nasdaq. As of this date, there were 7,327,491 Class A Shares and 1,000,000 Class B Shares outstanding.
2025-09-15	Filing date of the F-1 Registration Statement.

Recommendation

sell

Despite a strategic pivot towards potentially high-growth sectors and recent capital injections, the company's financial position remains precarious, evidenced by persistent net losses, a significant working capital deficit, and a going concern warning from its auditors. The substantial regulatory risks associated with its China operations, including the uncertainty of CSRC filings and the looming threat of Nasdaq delisting under the HFCAA, create an exceptionally high-risk investment profile. While the new business segments offer long-term potential, the immediate financial instability and regulatory headwinds suggest a strong likelihood of continued share price volatility and downside risk. A seasoned investor would likely view the current risks as outweighing the speculative growth opportunities, warranting a 'sell' recommendation to mitigate exposure.

Keywords

ReTo Eco-Solutions, RETO, SEC Filing, F-1 Registration, Share Resale, Streeterville Capital, Class A Shares, China Operations, Environmental Protection Equipment, Intelligent Equipment, MeinMalzeBier Acquisition, Craft Beer Machines, Mining Equipment, Going Concern, Nasdaq Delisting Risk, CSRC Filing, PRC Regulations, Holding Foreign Companies Accountable Act, HFCAA, Capital Raise, Strategic Shift, Financial Performance, Liquidity, Share Combination

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