Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 45

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 45
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2024, the Company acquired the concession right on forest land from a third party for consideration of
$7,671,969. The concession right with a finite useful life of 37 years gives the Company the right to operate in the designated forest
land in the PRC. The acquisition was accounted for as an asset acquisition under FASB ASC Topic 805 Business Combinations Fair Value Measurement

We identified
the accounting for and valuation of the newly acquired concession right as a critical audit matter because (i) the initial recognition
involved complex judgments related to purchase price allocation, and (ii) determining the fair value of the concession right involved
significant estimation uncertainty. Performing audit procedures to evaluate management’s estimates and assumptions required especially
challenging auditor judgment and the use of valuation specialists.

How the Critical Audit Matter was Addressed
in the Audit

Our audit
procedures related to the accounting for and valuation of the concession right included, among others:

  Evaluating the Company's determination that the transaction met  

  Assessing the methodology and significant assumptions used to estimate                                                                   

  Comparing key assumptions to external industry reports, market data,  

  Involving firm-engaged valuation specialists to assist in evaluating  

  Performing sensitivity analysis on significant assumptions to assess  

  Evaluating the adequacy of the related disclosures in the consolidated  

/s/ YCM CPA INC.

We have served as the Company’s
auditor since 2021.

PCAOB ID 6781 Irvine, California

F-3

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

                                                                                                                                                                                December 31,                        December 31,                    
                                                                                                                                                                                2024                                2023                            
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  ASSETS                                                                                                                                                                                                                                            
  Current Assets:                                                                                                                                                                                                                                   
  Cash and cash equivalents                                                                                                                                                     $                      671,355      $                      152,487  
  Accounts receivable, net                                                                                                                                                                             145,853                                   -  
  Advances to suppliers, net                                                                                                                                                                           522,190                                 922  
  Prepayments and other current assets                                                                                                                                                                   5,202                             105,941  
  Due from related parties                                                                                                                                                                              24,048                             358,659  
  Current assets of discontinued operations                                                                                                                                                                  -                           9,846,669  
  Total