Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 18

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 7
Chunk 18
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Item 7.
Major Shareholders and Related Party Transactions

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As a result of the dual-class share
structure and the concentration of ownership, holders of our Class B Shares will have control over matters such as decisions regarding
(i) mergers, consolidations and the sale of all or substantially all of our assets, (ii) election or removal of directors, (iii) making
amendments to our memorandum and articles of association, (iv) whether to issue additional shares, including to them, (v) employment,
including compensation arrangements, and (vi) other significant corporate actions. They may take actions that are not in the best
interest of us or our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our
company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part
of a sale of our company and may reduce the price of our Class A Shares. This concentrated control will limit your ability to influence
corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that
holders of Class A Shares may view as beneficial.

The dual-class structure of our Shares may
adversely affect the trading market for our Class A Shares.

We cannot predict whether
our dual-class share structure with disproportionate voting rights will result in a lower or more volatile market price of the Class
A Shares, adverse publicity, or other adverse consequences. Certain index providers have announced restrictions on including companies
with multi-class share structures in certain of their indices. For example, S& P Dow Jones and FTSE Russell have changed their
eligibility criteria for inclusion of shares of public companies on certain indices, including the S& P 500, to exclude companies with
multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such
indices. As a result, our dual-class voting structure may prevent the inclusion of the Class A Shares in such indices, which could
adversely affect the trading price and liquidity of the Class A Shares. In addition, several shareholder advisory firms have announced
their opposition to the use of multiple class structures and our dual-class structure may cause shareholder advisory firms to publish
negative commentary about our corporate governance, in which case the market price and liquidity of the Class A Shares could be adversely
affected.

If we are classified as a passive foreign
investment company, United States taxpayers who own our Class A