Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 74

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 74
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0Common shares to directors under the 2022 Share Incentive Plan (Note 16).

F-25

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - SHAREHOLDERS’ EQUITY

Statutory Reserve

The Company is required to make appropriations
to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income
determined in accordance with generally accepted accounting principles of the PRC (“ PRC GAAP”). Appropriations to the statutory
surplus reserve are required to be at least10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is
equal to50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion
of the Board of Directors. The restricted amounts as determined pursuant to PRC laws totaled $1,072,895and $1,072,895as of December
31, 2024 and 2023, respectively.

Common Shares

ReTo was established on August 7, 2015 under the
laws of the British Virgin Islands.

Share redesignation.

On August 4, 2024, the board of directors and
our shareholders at the 2024 Annual General Meeting of Shareholders (the “2024 Annual Meeting”) approved the amendment
and restatement of its amended Memorandum and Articles of Association (the “ Amended and Restated Memorandum and Articles of Association”)
to, among other things, (a) redesignate the existing common shares, par value $0.10each, as Class A shares, par value $0.10each (the
“ Class A Shares”), with the same rights as the existing common shares, including the right toonevote at a meeting of the
Shareholders or on any Resolution of Shareholders; the right to an equal share in any dividend paid by the Company; and the right to an
equal share in the distribution of the surplus assets of the Company on its liquidation, and (b) create an additional2,000,000shares
each to be designated as Class B shares, par value $0.01each (the “ Class B Shares”), with each share to entitle the holder
thereof to 1,000 votes but with transfer restrictions, pre-emption rights and no right to any dividend or distribution of the surplus
assets