Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 27

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 11
Chunk 27
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Item 11. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Foreign Exchange Risk

Our functional currency is
the RMB, and our financial statements are presented in U. S. dollars. China’s currency has gradually depreciated against most foreign
currencies over the last few years. The average exchange rate for US$ against Chinese RMB has changed from US$1.00 for RMB7.0809 in the
fiscal year ended December 31, 2023 to US $1.00 for RMB 7.1957 in the fiscal year ended December 31, 2024. The exchange rate was US$1.00
for RMB 7.2993 as of December 31, 2024. The change in the value of RMB relative to the U. S. dollar may affect our financial results reported
in the U. S. dollar terms without giving effect to any underlying change in our business or results of operation. If using the average
exchange rate in fiscal year ended December 31, 2023, our revenue, cost of revenue and total expenses, including selling expenses, general
administrative expenses, bad debt expense and research and development expenses, for the fiscal year ended December 31, 2024 would increase
by $29,653, $16,274 and $80,354, respectively.

Currently, our assets, liabilities,
revenues and costs are denominated in RMB and in U. S. dollars, our exposure to foreign exchange risk will primarily relate to those financial
assets denominated in U. S. dollars. Any significant revaluation of RMB against U. S. dollar may materially affect our earnings and financial
position, and the value of, and any dividends payable on, our Class A Shares in U. S. dollars in the future. See “ Item 3. Key
Information- D. Risk Factors - Risks Related to Doing Business in China - Fluctuations in exchange rates
could result in foreign currency exchange losses to us and may reduce the value of, and amount in U. S. Dollars of dividends payable on,
our shares in foreign currency terms.”

Credit Risk

As of December 31, 2024, we
had cash and cash equivalents of approximately $0.7 million. Our cash and cash equivalents are invested primarily in savings and deposit
accounts with original maturities of three months or less. Savings and deposit accounts generate a small amount of interest