Company: RETO
Filing Date: 2025-09-15
Form Type: F-1
Source: 0001213900-25-087644
Chunk: 105

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-09-15
Form: F-1
Chunk 105
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 the rate implicit in the lease or, if not readily determinable, the Company’s secured incremental borrowing rate. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. Each lease liability is measured using the Company’s secured incremental borrowing rate. The Company’s leases have remaining terms of two to three years, and some of which include options to terminate the lease upon notice. The Company considers these options when determining the lease term used to calculate the right-of-use asset and the lease liability when the Company is reasonably certain it will exercise such option. The Company’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company elected to measure the lease liability by combining the lease and non-lease components as a single lease component. As such, the Company includes the fixed payments and any payments that depend on a rate or index that relate to the lease and non-lease components in the measurement of the lease liability. Some of the non-lease components are variable in nature and not based on an index or rate, and as a result, are not included in the measurement of the operating lease right-of-use assets or operating lease liability. Operating lease expense is recognized on a straight-line basis over the lease term and is included in occupancy expenses in the Company’s consolidated statements of comprehensive income. Currency Risk To the extent that the Company needs to convert U.S. dollars into Renminbi for its operations, appreciation of the Renminbi against the U.S. dollars would have an adverse effect on the Renminbi amount it receives from the conversion. Conversely, if the Company decide to convert Renminbi into U.S. dollars for the purpose of making payments for business purposes, appreciation of the U.S. dollars against the Renminbi would have a negative effect on the U.S. dollars amounts. F-38 Interest Rate Risk The Company has not been exposed to material risks due to changes in market interest rates, and it has not used any derivative financial instruments to manage its interest risk exposure. However, the Company cannot provide assurance that it will not be exposed to material risks due to changes in market interest rates in the future. Concentration of Credit Risk and Uncertainties Currently, the Company’ s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of