Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 33

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 15
Chunk 33
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 rules may
have the effect of reducing the liquidity of penny stocks. “ Penny stocks” generally are equity securities with a price of
less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on Nasdaq if current price
and volume information with respect to transactions in such securities is provided by the exchange or system). Our Class A Shares could
be considered to be a “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements
imposed upon U. S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our Class A Shares, which
could severely limit the market liquidity of such Class A Shares and impede their sale in the secondary market.

A U. S. broker-dealer selling
a penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth
in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer
or the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U. S. broker-dealer to deliver,
prior to any transaction involving a “penny stock,” a disclosure schedule prepared in accordance with SEC standards relating
to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt. A U. S. broker-dealer is also
required to disclose commissions payable to the U. S. broker-dealer and the registered representative and current quotations for the securities.
Finally, a U. S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the “penny
stock” held in a customer’s account and information with respect to the limited market in “penny stocks.”

The market for “penny
stock” has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the
security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged
matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure
sales tactics and unrealistic price projections by inexperienced sales persons;