Company: RETO
Filing Date: 2025-07-31
Form Type: F-3
Source: 0001213900-25-070052
Chunk: 8

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-07-31
Form: F-3
Chunk 8
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 auditor completely, investors may be deprived of the benefits of such inspection. On December 15, 2022, the
PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered
in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.

On December 29, 2022, the
Consolidated Appropriations Act, 2023 was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection
years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could
be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditor. As it was originally enacted,
the HFCAA applied only if the PCAOB’s inability to inspect or investigate was due to a position taken by an authority in the foreign
jurisdiction where the relevant public accounting firm is located. As a result of the Consolidated Appropriations Act, 2023, the HFCAA
now also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to a position taken by an
authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is located.

These developments could add uncertainties to the trading of our securities,
which could cause the market price of our Class A Shares to be materially and adversely affected, and our securities could be delisted
or prohibited from being traded “over-the-counter” earlier than would be required by the HFCAA. If our securities are unable
to be listed on another securities exchange by then, such a delisting would substantially impair investors’ ability to sell or purchase
our Class A Shares when they wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact
on the price of our Class A Shares.

As a holding company, ReTo
relies on dividends and other distributions on equity paid by its operating subsidiaries for cash and financing requirements, including
the funds necessary to pay dividends and other cash distributions to its shareholders or to service any expenses it may incur. Our PRC
subsidiaries’ ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC
subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, as determined in accordance
with mainland China accounting standards and regulations.