Company: RETO
Filing Date: 2025-09-15
Form Type: F-1
Source: 0001213900-25-087644
Chunk: 106

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-09-15
Form: F-1
Chunk 106
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 and the customer, specifying the products to be delivered and the payment terms. By signing the sales contract, customers agree to purchase and pay the specified consideration. The Company identifies a single performance obligation for the services provided, eliminating the need for transaction price allocation. The contract specifies a fixed amount as the sales price and the Company does not offer warranty on products sold. The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Payments are due on the 5th day of each month for its customers. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue until all conditions are met. The Company is the principal for its sales transactions and recognizes revenue on a gross basis. The Company is the principal when it has control of the merchandise before it is transferred to the customers. Revenue from merchandise sales is recognized at the point of sale. Disaggregation of Revenue The following table sets forth the Company’s revenue based on services for the periods indicated:

|               |     | Years Ended  
 December 31, |    2024 |     |   |  2023 |
|:--------------|:----|:-------------|--------:|:----|:--|------:|
| Craft Beers   |     | $            |  79,603 |     | $ | 3,188 |
| Bear Machines |     |              |  29,184 |     |   |     - |
| Total revenue |     | $            | 108,787 |     | $ | 3,188 |

Cost of Revenue Cost of revenue includes cost of craft beers and related taxes. The Company applies the FIFO (first-in first-out) method to calculate the unit cost of inventory, ensuring a consistent and systematic approach to cost allocation. Upon the sale of products, the corresponding inventory costs are recognized as cost of revenue. This process ensures that the purchase costs incurred are accurately matched with the revenue generated, reflecting the economic flow of resources. Selling and Marketing Expenses All costs related to selling and marketing are expensed as incurred. For the years ended December 31, 2024 and 2023, selling and marketing costs amounted to $205,117 and $2,034, respectively. Advertising costs are expensed as incurred and included in the selling and marketing expenses. Advertising costs were $13,115 and $2,