Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 19

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 7
Chunk 19
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 Shares may have adverse United States federal income tax consequences.

Based on the nature of our
business activities, we may be classified as a passive foreign investment company (“ PFIC”), by the U. S. Internal Revenue Service
(“ IRS”), for U. S. federal income tax purposes. Such characterization could result in adverse U. S. tax consequences to you
if you are a U. S. investor. For example, if we are a PFIC, a U. S. investor will become subject to burdensome reporting requirements. The
determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from
time to time. Specifically, we will be classified as a PFIC for U. S. tax purposes if either:

  75% or more of our gross income in a taxable year is passive income; or  

  the average percentage of our assets by value in a taxable year that produce or are held for the production of passive income (which includes cash) is at least 50%.  

The calculation of the value
of our assets is based, in part, on the then market value of our Class A Shares, which is subject to change. In addition, the composition
of our income and assets will be affected by how, and how quickly, we spend the cash we raised in our prior public offerings. We cannot
assure you that we will not be a PFIC for any taxable year. See “Taxation - Material United States Federal Income Tax Considerations
 - Passive Foreign Investment Company.”

Securities analysts may not publish favorable
research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

If a trading market for our
Class A Shares develops, the trading market will be influenced to some extent by the research and reports that industry or financial analysts
publish about us and our business. We do not control these analysts. As a young public company, we may be slow to attract research coverage
and the analysts who publish information about our Class A Shares will have had relatively little experience with us or our industry,
which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
In the event any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock
price, our stock price could decline. If one or more of these analysts cease coverage of us or fail