# EDGAR Filing Document

**Accession Number:** 0001687277
**File Stem:** 0001213900-26-070649
**Filing Date:** 2026-6
**Character Count:** 90883
**Document Hash:** 08874f0a0785a43ae6f80b08071d30e8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-070649.hdr.sgml**: 20260622

**ACCESSION NUMBER**: 0001213900-26-070649

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 3

**CONFORMED PERIOD OF REPORT**: 20260622

**FILED AS OF DATE**: 20260622

**DATE AS OF CHANGE**: 20260622

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ReTo Eco-Solutions, Inc.
- **CENTRAL INDEX KEY:** 0001687277
- **STANDARD INDUSTRIAL CLASSIFICATION:** ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** D8
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38307
- **FILM NUMBER:** 261107488

**BUSINESS ADDRESS:**
- **STREET 1:** X-702, 60 ANLI ROAD, CHAOYANG DISTRICT
- **CITY:** BEIJING
- **STATE:** F4
- **ZIP:** 100101
- **BUSINESS PHONE:** (86) 10-64827328

**MAIL ADDRESS:**
- **STREET 1:** X-702, 60 ANLI ROAD, CHAOYANG DISTRICT
- **CITY:** BEIJING
- **STATE:** F4
- **ZIP:** 100101

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

**For the month of June 2026**

**Commission file number: 001-38307**

**RETO ECO-SOLUTIONS, INC.**

(Registrant's name)

**X-702, 60 Anli Road, Chaoyang District, Beijing**

**People's Republic of China 100101**

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

**INFORMATION CONTAINED IN THIS FORM 6-K REPORT**

As previously disclosed, on February 27, 2026, ReTo Eco-Solutions, Inc., a British Virgin Islands business company ("**ReTo**" or "**Buyer**"), entered into a Share Exchange Agreement (the "**Share Exchange Agreement**"), by and among (i) Buyer, (ii) Seven Arrows Supply Chain Limited, a British Virgin Islands business company ("**Seven Arrows**"), and (iii) Rei Shiba ("**Seller**").

Pursuant to the Share Exchange Agreement, subject to the terms and conditions set forth therein, Seller agreed to sell to ReTo, and ReTo agreed to buy, an aggregate of 25,500 ordinary shares, par value $0.01 per share (the "**Company Shares**"), of Seven Arrows, representing fifty-one percent (51%) of the issued and outstanding equity interests of Seven Arrows (the "**Purchased Shares**") in exchange for newly issued Class A shares, no par value ("**Buyer Class A Shares**") of ReTo (the "**Share Exchange**" together with the other transactions contemplated by the Share Exchange Agreement, the "**Transactions**").

The Transactions closed (the "**Closing**") on February 27, 2026 (the "**Closing Date**").

Filed herewith as Exhibit 99.1 are the audited financial statements of Seven Arrows for the year ended December 31, 2025 and for the period from July 23, 2024 (inception) to December 31, 2024. Additionally, filed herewith as Exhibit 99.2 is unaudited pro forma condensed combined balance sheet information regarding ReTo and Seven Arrows as of December 31, 2025, and unaudited pro forma condensed combined statements of operation for the year ended December 31, 2025.

The unaudited pro forma condensed combined financial information included in this Form 6-K is presented for illustrative purposes only, contains a variety of adjustments, assumptions and estimates, and is not necessarily indicative of what the combined company's actual financial position or results of operations would have been had the transactions been completed on the date indicated. The combined company's actual results and financial position may differ materially and adversely from the unaudited pro forma condensed combined financial information included in this Form 6-K. Important factors that may affect actual results include, but are not limited to, risks and uncertainties relating Seven Arrows' or the ReTo's business, as applicable (including each company's ability to achieve strategic goals, objectives, and targets over applicable periods), industry performance, and general business and economic conditions.

**Forward Looking Statements**

This Form 6-K includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements, including those set forth in any subsequent filings with the U.S. Securities and Exchange Commission (the "SEC"). Copies of the ReTo's filings with the SEC are available on the SEC's website, www.sec.gov. ReTo expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in ReTo's expectations or any change in events, conditions or circumstances on which any statement is based.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| 99.1 | [Audited financial statements of Seven Arrows Supply Chain Limited for the year ended December 31, 2025 and for the period from July 23, 2024 (inception) to December 31, 2024.](ea029508501ex99-1.htm) |
| 99.2 | [Unaudited pro forma condensed combined balance sheet of the Company and Seven Arrows Supply Chain Limited as of December 31, 2025, and unaudited pro forma condensed combined statements of operation of the Company and Seven Arrows Supply Chain Limited for the year ended December 31, 2025.](ea029508501ex99-2.htm) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **RETO ECO-SOLUTIONS, INC.** | **RETO ECO-SOLUTIONS, INC.** |
| Date: June 22, 2026 | By: | */s/ Johnny Tiong Sie Wei* |
|  | Name: | Johnny Tiong Sie Wei |
|  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**INDEX TO COMBINED FINANCIAL STATEMENTS**

**SEVEN ARROW SUPPLY CHAIN LIMITED AND SUBSIDIARIES**

---

| | |
|:---|:---|
|  | **Page** |
| **Combined Financial Statements as of and for the Year Ended December 31, 2025 and for the Period from July 23, 2024 (inception) to December 31, 2024** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID: 6783)](#a_006) | F-2 |
| [Combined Balance Sheets as of December 31, 2025 and 2024](#a_001) | F-3 |
| [Combined Statements of Operations and Comprehensive Loss for the Year Ended December 31, 2025 and for the Period from July 23, 2024 (inception) to December 31, 2024](#a_002) | F-4 |
| [Combined Statements of Changes in Shareholders' Equity (Deficit) for the Year Ended December 31, 2025 and for the Period from July 23, 2024 (inception) to December 31, 2024](#a_003) | F-5 |
| [Combined Statements of Cash Flows for the Year Ended December 31, 2025 and for the Period from July 23, 2024 (inception) to December 31, 2024](#a_004) | F-6 |
| [Notes to Combined Financial Statements](#a_005) | F-7 |

---

**Report of Independent Registered Public Accounting Firm**

To the Shareholder and Board of Directors of Seven Arrows Supply Chain Limited

**Opinion on the Financial Statements**

We have audited the accompanying combined balance sheets of Seven Arrows Supply Chain Limited and its subsidiaries (the "Company") as of December 31, 2025 and December 31, 2024, the related combined statements of operations and comprehensive income (loss), changes in stockholders' equity, and cash flows for the year ended December 31, 2025, and period from July 23, 2024 (inception) to December 31, 2024 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the combined financial position of the Company as of December 31, 2025 and December 31, 2024, and the combined results of its operations and comprehensive loss and its cash flows for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, in conformity with accounting principles generally accepted in the United States of America ("US GAAP").

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the "PCAOB") and are required to be independent with respect to the Company in accordance with the United States federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Assentsure PAC

We have served as the Company's auditor since 2026.

Singapore

PCAOB ID Number 6783

June 22, 2026

**SEVEN ARROW SUPPLY CHAIN LIMITED AND SUBSIDIARIES**

**COMBINED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS** |  |  |
| **Current Assets:** |  |  |
| Cash | $14092 | $2330 |
| Accounts receivable, net | 10452 |  |
| Prepayments and other current assets | 45888 | 4177 |
| Due from related parties | 155068 |  |
| Inventories | 25232 | - |
| **Total Current Assets** | **250732** | **6507** |
| Property, plant and equipment, net | 40334 | 35169 |
| Right-of-use assets | 110374 | - |
| **Total Assets** | $**401440** | $**41676** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current Liabilities:** |  |  |
| Accrued expenses and other liabilities | $26373 | $2489 |
| Taxes payable | 1060 |  |
| Due to related parties | 168206 | 68753 |
| Lease liability - current | 41566 | - |
| **Total Current Liabilities** | **237205** | **71242** |
| Lease liability - non-current | 65092 | - |
| **Total Liabilities** | $**302297** | $**71242** |
| **COMMITMENTS AND CONTINGENCIES** |  |  |
| **EQUITY:** |  |  |
| Ordinary shares\*, $0.01 par value, 50,000 shares authorized and outstanding at December 31, 2025 and 2024, respectively | $500 | $500 |
| Additional paid-in capital | 417612 | 17100 |
| Subscription receivable | (500) | (500) |
| Accumulated deficit | (321044) | (46668) |
| Accumulated other comprehensive income | 2575 | 2 |
| **Total equity (deficit)** | $**99143** | $**(29566)** |
| **Total Liabilities and Equity (Deficit)** | $**401440** | $**41676** |

---

\* The shares information is presented on a retroactive basis to reflect the reorganization (Note 1).

The accompanying notes are an integral part of these combined financial statements.

**SEVEN ARROW SUPPLY CHAIN LIMITED AND SUBSIDIARIES**

**COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **For the Year<br> ended December 31, <br> 2025** | **For the Period <br> from July 23,<br> 2024 (inception) to December 31,<br> 2024** |
| Revenues | $220823 | $- |
| Cost of revenues | 193021 | - |
| **Gross profit** | **27802** | **-** |
| **Operating expenses:** |  |  |
| Selling expenses | 74661 | 11208 |
| General and administrative expenses | 227522 | 35462 |
| **Total operating expenses** | **302183** | **46670** |
| **Loss from operations** | **(274381)** | **(46670)** |
| **Other income (expenses):** |  |  |
| Interest expenses | (55) | **-** |
| Interest income | 60 | 2 |
| **Total other income, net** | **5** | **2** |
| **Loss before income taxes** | **(274376)** | **(46668)** |
| **Income taxes expense (benefit)** | **-** | **-** |
| **Net loss** | **(274376)** | **(46668)** |
| **Comprehensive Loss:** |  |  |
| **Net Loss** | $**(274376)** | $**(46668)** |
| Other comprehensive income: |  |  |
| Foreign currency translation adjustment | 2573 | 2 |
| **Comprehensive Loss** | **(271803)** | **(46666)** |
| Net loss per share\* |  |  |
| Basic and diluted | $(5.5) | $(0.9) |
| **Weighted average ordinary shares\* outstanding** |  |  |
| Basic and diluted | 50000 | 50000 |

---

\* The shares information is presented on a retroactive basis to reflect the reorganization (Note 1).

The accompanying notes are an integral part of these combined financial statements.

**SEVEN ARROW SUPPLY CHAIN LIMITED**

**COMBINED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)**

**FOR THE YEAR ENDED DECEMBER 31, 2025 AND FOR THE PERIOD FROM JULY 23, 2024 (INCEPTION) TO DECEMBER 31, 2024** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares\*** | **Ordinary shares\*** | | | | | |
|  | **Number** | **Amount** | **Subscription**<br>**receivable** | **Additional Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Accumulated<br> Other<br> Comprehensive**<br>**Income** | **Total**<br>**Equity** |
| **Balance at July 23, 2024** | **-** | $**-** | $**-** | $**-** | $**-** | $**-** | $**-** |
| Capital contribution made by shareholders | 50000 | 500 | (500) | 17100 |  |  | 17100 |
| Net loss |  |  |  |  | (46668) |  | (46668) |
| Foreign currency translation adjustment | - | - | - | - | - | 2 | 2 |
| **Balance at December 31, 2024** | **50000** | $**500** | $**(500)** | $**17100** | $**(46668)** | $**2** | $**(29566)** |
| Capital contribution made by shareholders |  |  |  | 400512 |  |  | 400512 |
| Net loss |  |  |  |  | (274376) |  | (274376) |
| Foreign currency translation adjustment | - | - | - | - | - | 2573 | 2573 |
| **Balance at December 31, 2025** | **50000** | $**500** | $**(500)** | $**417612** | $**(321044)** | $**2575** | $**99143** |

---

\* The shares information is presented on a retroactive basis to reflect the reorganization (Note 1).

The accompanying notes are an integral part of these combined financial statements.

**SEVEN ARROW SUPPLY CHAIN LIMITED**

**COMBINED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the Year<br> Ended December 31,<br> 2025** | **For the Period<br> from July 23, 2024<br> (inception) to<br> December 31, <br> 2024** |
| **Cash flows from operating activities:** | | |
| Net loss | $**(274376)** | $**(46668)** |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 21082 | 3764 |
| &nbsp;&nbsp;&nbsp;Amortization of operating lease right-of-use assets | 16444 |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (10170) |  |
| &nbsp;&nbsp;&nbsp;Inventories | (24550) |  |
| &nbsp;&nbsp;&nbsp;Prepayments and other current assets | (40405) | (4237) |
| &nbsp;&nbsp;&nbsp;Due from related parties | (150874) |  |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 23132 | 2525 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 93834 | 69743 |
| &nbsp;&nbsp;&nbsp;Taxes payable | 1031 |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (20060) | - |
| &nbsp;&nbsp;&nbsp;**Net cash (used in)/provided by operating activities** | $**(364912)** | $**25127** |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (24608) | (39439) |
| &nbsp;&nbsp;&nbsp;**Cash used in investing activities** | $**(24608)** | $**(39439)** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder contribution | 400512 | 17100 |
| &nbsp;&nbsp;&nbsp;**Cash provided by financing activities** | $**400512** | $**17100** |
| **Effect of exchange rate changes on cash** | **770** | **(458)** |
| **Net increase in cash** | **11762** | **2330** |
| **Cash, beginning of year** | $**2330** | $**-** |
| **Cash, end of year** | $**14092** | $**2330** |
| **Supplemental disclosures of cash flow information:** |  |  |
| Interest paid | $55 | $- |
| **Non-Cash Investing Activities** |  |  |
| Right-of-use assets obtained in exchange for operating lease obligations | $123832 | $- |

---

The accompanying notes are an integral part of these combined financial statements.

**SEVEN ARROW SUPPLY CHAIN LIMITED AND SUBSIDIARIES**

**NOTES TO COMBINED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS**

Seven Arrows Supply Chain Limited. ("Seven Arrows BVI") was established under the laws of the British Virgin Islands on December 2, 2025 as a holding company. The Company, through its subsidiaries (together "the Company"), specializes in Craft beer and Baijiu sales in China. Rei Shiba, the Chairman of the Board of Directors and Chief Executive Officer ("CEO"), is the ultimate controlling shareholder ("the controlling shareholder") of the Company.

As of December 31, 2025, the combined financial statements of the Company reflected the structure following completion of the Reorganization. The principal activities of the entities under common control are listed below. All inter-company balances and transactions have been eliminated upon combination.

---

| | | | |
|:---|:---|:---|:---|
| **Name of the Entity** | **Dated of<br> Incorporation for<br> acquisition** | **Place of<br> Incorporation** | **Ownership<br> Percentage** |
| Hongkong Seven Arrows Supply Chain Limited ("Seven Arrows HK") | December 30, 2025 | Hong Kong, China | 100% controlled by Seven Arrows BVI |
| Hainan Seven Arrows Supply Chain Co., Ltd ("Seven Arrows (Hainan)") | July 23, 2024 | Hainan, China | 100% controlled by Seven Arrows HK |

---

As described below, the Company, through a series of transactions which are accounted for as a reorganization of entities under common control (the "Reorganization"), became the ultimate parent of its subsidiaries.

***Reorganization***

Between July 2024 and December 2025, the Company undertook the following steps to affect a reorganization (the "Reorganization")

(i) Formation
 of Seven Arrows (Hainan) on July 23, 2024.

(ii) Formation
 of Seven Arrows BVI as a holding company under the laws of the British Virgin Islands on
 December 2, 2025.

(iii) Formation
 of the Company's wholly owned subsidiary- Seven Arrows HK on December 30, 2025.

(iv) after
 a series of transfers under common control and at nominal considerations, all of the shareholders'
 equity interest in Seven Arrows (Hainan) was ultimately transferred to Seven Arrows HK on
 February 6, 2026.

Before and after the reorganization, the Company, together with its subsidiaries, is effectively controlled by the same shareholder, and therefore the reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification ("ASC") 805-50-25. The combination of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying combined financial statements in accordance with ASC 805-50-45-5.

**NOTE 2 – Going concern**

The accompanying combined financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the ordinary course of business.

For the year ended December 31, 2025, the Company incurred a net loss of $274,376 and used net cash in operating activities of $364,912. As of December 31, 2025, the Company had an accumulated deficit of $321,044.

Management has evaluated the Company's liquidity position and cash requirements and considered, among other factors, (i) undertakings from related parties not to demand repayment of approximately $168,206 of outstanding balances in the short term, (ii) financial and operational support from ReTo Eco-Solutions, Inc., including its commitment to provide financial assistance and resources as necessary to enable the Company to meet its obligations as they become due, and (iii) projected cash flows from the expansion of the Company's craft beer and Baijiu distribution business.

Based on its cash flow forecasts and the support arrangements described above, management believes that the Company will have sufficient resources to meet its obligations as they become due. Accordingly, the accompanying combined financial statements have been prepared on a going concern basis.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Reorganization and Basis of Presentation**

The accompanying combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities Exchange Commission (the "SEC").

**Principles of Combination**

The combined financial statements have been prepared in accordance with ASC 805-50, Transactions Between Entities Under Common Control.

As the combining entities were under the common control of the same controlling party throughout the periods presented, the assets and liabilities of the combining entities have been reflected at their historical carrying amounts. No new basis of accounting has been established as a result of the combination. The combined financial statements have been retrospectively adjusted for all periods presented as if the entities had been combined throughout the periods during which they were under common control.

All intercompany balances and transactions between the combining entities have been eliminated. A uniform set of accounting policies has been applied across all combining entities for all periods presented. Any difference between the consideration transferred and the historical carrying amount of the net assets transferred has been recognized as an adjustment to equity.

The combined financial statements include the financial statements of Seven Arrows BVI, Seven Arrows HK and Seven Arrows (Hainan).

Subsidiaries are all entities over which the Group has control. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

For acquisition of subsidiaries under common control, the identifiable assets and liabilities were accounted for at their carrying values, in a manner similar to the pooling-of-interest method of consolidation.

In preparing the combined financial statements, transactions, balances and unrealized gains on transactions between the combining entities are eliminated. Unrealized losses are also eliminated but are considered an impairment indicator of the assets transferred.

The accompanying combined financial statements have been prepared in accordance with the U.S. generally accepted accounting principles or GAAP on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Accordingly, the combined financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Group be unable to continue as a going concern.

**Shares capital**

Seven Arrows BVI issued ordinary shares 50,000 to shareholder, at a par value $0.01 per share, on December 2, 2025.

**Use of Estimates**

In preparing the combined financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the combined financial statements. Significant accounting estimates required to be made by management include, but are not limited to revenue recognition, credit loss for accounts receivable, the useful lives of property and equipment and the recoverability of the carrying amounts of property and equipment and right-of-use assets and realization of deferred tax assets. The Company evaluates its estimates and assumptions on an ongoing basis and its estimates on historical experience, current and expected future conditions and various other assumptions that management believes are reasonable under the circumstances based on the information available to management at the time these estimates and assumptions are made. Actual results and outcomes may differ significantly from these estimates and assumptions.

**Cash**

Cash represents cash in bank. The company maintains all of its bank accounts in the PRC.

**NOTE 3– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Accounts Receivable and Allowance for Credit Losses**

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. The Company adopted this guidance effective January 1, 2023. Accounting Standards Codification ("ASC") 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of this guidance did not have a material impact on the Company's combined financial statements. Accounts receivable was recognized and carried at original invoiced amount less an estimated allowance for credit losses. The Company estimates the allowance for credit losses based on an analysis of the aging of accounts receivable, assessment of collectability, including any known or anticipated economic conditions, customer-specific circumstances, recent payment history and other relevant factors. As of December 31, 2024 and 2025, allowance for credit losses was nil.

Other receivable and other assets primarily consist of security deposits and loan to third parties which are presented net of allowance for credit losses and prepaid expenses. The balances of security deposits and loan to third parties are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the balances to be impaired if the collectability of the balances becomes doubtful. The Company uses the loss-rate method to estimate the allowance for uncollectible balances. The Company considers the past collection experience, any changes in collection trends, the credit worthiness of counter parties, the contractual terms, current economic conditions, and expectation of future economic conditions. Actual amounts received or utilized may differ from management's estimate of credit worthiness and the economic environment. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. As of December 31, 2025 and 2024, allowance for credit losses was nil.

**Current Expected Credit Losses**

In 2024, the Company adopted FASB Accounting Standards Codification ("ASC") Topic 326 – "Financial Instruments – Credit Losses" ("ASC Topic 326") for financial assets at amortized cost including accounts receivable and other receivables. This guidance replaced the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. No impact on the combined financial statements upon adoption.

**Property, Plant and Equipment**

Property and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:

---

| | |
|:---|:---|
|  | **Useful life** |
| Electronic equipment | 3 years |
| Leasehold improvement | 3 years |

---

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the combined statements of income and other comprehensive income in other income or expenses.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Leases**

The Company adopted ASU No. 2016-02—Leases (Topic 842) on January 1, 2019 using the modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The standard did not materially impact the Company's combined net earnings and cash flows.

**Revenue Recognition**

The Company adopted ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") on January 1, 2018 using the modified retrospective approach. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company's customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services.

To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

● Revenue from Craft beer
 and Baijiu

The Company's revenues are generated primarily from sales of craft beer product and Baijiu products that the Company offers to its customers.

Each sales order represents a separate contract with the customer, and the delivery of products constitutes a single performance obligation. Revenue is recognized at a point in time upon transfer of control of the products to the customer, which the Company has determined occurs upon delivery to and acceptance by the customer at the agreed delivery location. The Company sells its products primarily on credit terms of 90 days. There are no significant financing components in these arrangements.

The Company does not offer volume rebates, rights of return, or other forms of variable consideration in its standard sales arrangements. Accordingly, the transaction price is equal to the invoiced amount net of any trade discounts agreed at contract inception

● Revenue from Meituan's
 POS system sales

The Company centrally purchases Meituan's POS system and sells it to customer. The Company has determined that it acts as principal in these transactions, as it obtains control of the POS systems before transferring them to the distributor, bears inventory risk, and has discretion in establishing the resale price. Accordingly, revenue is recognized on a gross basis at the amount of consideration received from the distributor.

The Company has determined that it acts as principal in these transactions, as it obtains control of the POS systems before transferring them to the distributor, bears inventory risk, and has discretion in establishing the resale price. Accordingly, revenue is recognized on a gross basis at the amount of consideration received from the distributor.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

The following summarizes the Company's revenue by nature from continuing operations:

---

| | | |
|:---|:---|:---|
|  | **For the Year<br> Ended December 31,<br> 2025** | **For the Period<br> from July 23, <br> 2024<br> (inception) to <br> December 31,<br> 2024** |
| Craft beer | $197135 | $&nbsp;&nbsp;&nbsp;&nbsp;- |
| Baijiu | 11521 |  |
| Meituan's POS system | 12167 | - |
| **Total revenue** | $**220823** | $**-** |

---

**Contract Balances**

The following table provides information about contract assets and contract liabilities from contracts with customers:

---

| | | |
|:---|:---|:---|
|  | **As of the Year<br> Ended <br> December 31,<br> 2025** | **As of the Year<br> Ended<br> December 31,<br> 2024** |
| Contract assets | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Contract liabilities | - | - |
| **Total revenue** | $**-** | $**-** |

---

The Company does not have contract assets as revenue is recognized concurrently with the right to invoice upon delivery. Contract liabilities arise when the Company receives payment from a customer prior to satisfying the related performance obligation. As of December 31, 2025 and 2024, no such advance payments were received.

**Disaggregation of Revenues**

The Company disaggregates its revenue from contracts by products, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Shipping and Handling**

Shipping and handling costs are expensed as incurred and are included in operating expenses as a part of selling in the Company's combined statements of income and comprehensive income. Shipping and handling costs associated with the Company's operations were $1,155 and nil for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, respectively.

**Income Taxes**

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the combined financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes," prescribe a more-likely-than-not threshold for combined financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated.

To the extent applicable, the Company records interest and penalties as a general and administrative expense. The Company's subsidiaries in China and Hong Kong are subject to the income tax laws of the PRC and Hong Kong. No significant taxable income was generated outside the PRC for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024. As of December 31, 2025, the tax year ended December 31, 2024 for the Company's PRC subsidiaries remain open for statutory examination by PRC tax authorities.

**Value Added Tax ("VAT")**

Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price, and VAT rates range up to 13%, starting from April 1, 2019, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying combined financial statements. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Foreign Currency Translation**

The Company's principal country of operations is the PRC. The financial position and results of its operations located in the PRC are determined using Renminbi ("RMB"), the local currency, as the functional currency. Seven Arrows BVI and Seven Arrows HK use U.S. Dollars ("US$") as their functional currency. The Company's financial statements are reported using U.S. Dollars. The results of operations and the combined statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the combined statements of cash flows will not necessarily agree with changes in the corresponding balances on the combined balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in the results of operations.

The value of RMB against US$("$") and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. Any significant revaluation of RMB may materially affect the Company's financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the combined financial statements in this report:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Year-end spot rate | US$1=RMB 6.9931 | US$1=RMB 7.2993 |
| Average rate | US$1=RMB 7.1875 | US$1=RMB 7.1957 |

---

**Risks and Uncertainties**

The main operation of the Company is located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, as well as by the general state of the PRC economy. The Company's results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.

**Segment Reporting**

ASC 280, "Segment Reporting," establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments. The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's CEO for making operating decisions and assessing performance as the source for determining the Company's reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products or services. Based on management's assessment, the Company has determined that it has one operating segment as defined by ASC 280, which including Craft beer, Baijiu and cash Meituan's POS system sales.

**Commitments and Contingencies**

In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Concentrations and Credit Risk** 

A majority of the Company's transactions are denominated in RMB, and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

As of December 31, 2025 and 2024, $14,092 and $2,330 of the Company's cash and cash equivalents was deposited at financial institutions in the PRC mainland. These deposits were insured per the PRC's new Deposit Insurance Regulation for up to RMB500,000 for one bank.

For the year ended December 31, 2025, one customer accounted for 83.8% of the Company's total revenue, as compared to no customer accounted more than 10% the period from July 23, 2024 (inception) to December 31, 2024.

As of December 31, 2025, one customer accounted for 93.2% of the Company's combined accounts receivable.

For the year ended December 31, 2025, the Company purchased approximately 94.0% of its inventory from one major supplier, as compared to no supplier accounted more than 10% for the period from July 23, 2024 (inception) to December 31, 2024.

As of December 31, 2025 and 2024, no supplier accounted for more than 10% of the total accounts payable balance.

**Recent Accounting Pronouncements**

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under ASC 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted and the amendments in this ASU should be applied on a retrospective basis to all periods presented. The Company adopted this ASU during the year ended December 31, 2025. The adoption of this ASU did not have significant impact on the Company's financial statements.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). This ASU requires that public business entities must annually "(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate)." A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company adopted this ASU during the year ended December 31, 2025. The adoption of this ASU did not have significant impact on the Company's financial statements.

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)**

**Recent Accounting Pronouncements (cont.)**

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" (Subtopic 220-40) ("ASU 2024-03"). The objective of ASU 2024-03 is to improve disclosures about a public entity's expenses, primarily through additional disaggregation of income statement expenses. In January 2025, the FASB further clarified the effective date of ASU 2024-03 with the issuance of Accounting Standards Update 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2025-01"). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact ASU 2024-03 will have on its financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company's annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company is currently evaluating the impact ASU 2025-05 will have on its financial statement disclosures.

Except for the above-mentioned pronouncements, there are no recently issued accounting standards that will have a material impact on the combined financial position, statements of operations, and cash flows of the Company.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's combined balance sheets, statements of operations and comprehensive loss and statements of cash flows.

**NOTE 4 – ACCOUNTS RECEIVABLE, NET**

Accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31, <br> 2024** |
| Trade accounts receivable | $10452 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Less: Credit loss allowance | - | - |
| **Accounts receivable, net** | $**10452** | $**-** |

---

The company gives major customers a 90 - days credit period, and accounts receivable within this period are not subject to credit impairment. The balance was fully collected subsequently.

**NOTE 5 – Prepayments and other assets**

Prepayments and other assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31, <br> 2024** |
| Loans to third parties\* | $37180 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Others | 8708 | 4177 |
| **Total** | $**45888** | $**4177** |

---

\* The Company provides regional distributors with funds to support their development of the local market, the loans were repayable on demand, unsecured, interest-free, denominated in RMB.

**NOTE 6 – LEASE** 

The Company has one operating leases for offices. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Rent expense for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024 was $37,554 and $13,897, respectively.

The Company's operating leases primarily include leases for office space. The current portion of operating lease liabilities is presented on the combined balance sheet. For the year ended December 31, 2025, total lease expense amounted to $37,554, which included $1,632 of interest, $16,444 of amortization expense of ROU assets and $19,478 of short-term lease expense. For the period from July 23, 2024 (inception) to December 31, 2024, total lease expense amounted to $13,897, all of which was short- term lease expenses. Total cash paid for operating leases amounted to $20,059 and nil for the years ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024. Supplemental balance sheet information related to operating leases is as follows:

---

| | |
|:---|:---|
|  | **As of<br> December 31,<br> 2025** |
| Right-of-use assets | $110374 |
| Operating lease liabilities - current | 41566 |
| Operating lease liabilities - non-current | 65092 |
| **Total operating lease liabilities** | $**106658** |

---

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2025:

---

| | |
|:---|:---|
| Remaining lease term and discount rate: |  |
| Weighted average remaining lease term (years) | 2.58 |
| Weighted average discount rate | 3.50% |

---

The following is a schedule of maturities of lease liabilities as of December 31, 2025:

---

| | |
|:---|:---|
| Twelve months ending December 31, |  |
| 2026 | $44588 |
| 2027 | 44588 |
| 2028 | 22294 |
| **Total future minimum lease payments** | **111470** |
| Less: Imputed interest | (4812) |
| **Present value of lease liabilities** | $**106658** |

---

**NOTE 7– PROPERTY, PLANT AND EQUIPMENT, NET**

Property, plant and equipment, net, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31, <br> 2024** |
| Electronic equipment | $3814 | $- |
| Leasehold improvement | 62060 | 38880 |
| Less: Accumulated depreciation | (25540) | (3711) |
| **Property, plant and equipment, net** | $**40334** | $**35169** |

---

Depreciation expense was $21,082 and $3,764 for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, respectively.

**NOTE 8–Accrued expenses and other liabilities**

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31, <br> 2024** |
| Wages and welfare payable | $13160 | $2233 |
| Security deposit payable | 10801 |  |
| Others | 2412 | 256 |
| **Accrued expenses and other liabilities** | $**26373** | $**2489** |

---

**NOTE 9 – TAXES**

**(a)** **Corporate income taxes** 

The Company is subject to income taxes on an entity basis on income arising in or derived from the location in which each entity is domiciled.

***British Virgin Islands***

Seven Arrows BVI, incorporated in the British Virgin Islands, is exempt from paying income tax.

***Hong Kong***

Seven Arrows HK was incorporated in Hong Kong and does not conduct any substantial operations of its own. No provision for Hong Kong profits tax has been made in the combined financial statements as Seven Arrows HK has no assessable profits for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024.

**NOTE 9 – TAXES (cont.)**

**(a)** **Corporate income taxes (cont.)** 

***China***

The Company's PRC subsidiary is subject to PRC income tax, which is computed according to the relevant laws and regulations in the PRC. Under the EIT Law, the corporate income tax rate applicable to all companies, including both domestic and foreign-invested companies, is 25%.

Under the Enterprise Income Tax ("EIT") Law of PRC, domestic enterprises and Foreign Investment Enterprises (the "FIE") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. According to the relevant PRC tax policies, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB3 million is subject to a reduced effective rate of 5%, for the years ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024. Seven Arrows (Hainan), the Company's main operating subsidiary in PRC, was approved as a small-scale minimal profit enterprise, and is an income tax rate of 5% for the years ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024.

The following table reconciles income tax expense by statutory rate to the Company's actual income tax expense:

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year ended<br> December 31, <br> 2025** | **For the Period<br> from July 23, 2024<br> (inception) to <br> December 31, <br> 2024** |
| Income tax benefit computed based on PRC statutory income tax rate | $(68594) | $(11667) |
| Effect of favorable income tax rate in certain entity in PRC | 54875 | 9334 |
| Non-deductible expenses - permanent difference <sup>(1)</sup> | 630 |  |
| Change in valuation allowance | 13089 | 2333 |
| **Effective tax (benefit) expense** | $- | $**-** |

---

(1) Represents expenses incurred
 by the Company that were not deductible for PRC income tax.

The breakdown of the Company's loss before income tax provision is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Year<br> ended<br> December 31,<br> 2025** | **For the Period <br> from July 23, <br> 2024<br> (inception) to<br> December 31,<br> 2024** |
| Loss before income tax expense from China | $(274376) | $(46668) |
| Loss before income tax expense from outside of China | - | - |
| **Total loss before income tax provision** | $**(274376)** | $**(46668)** |

---

**NOTE 9 – TAXES (cont.)**

**(a)** **Corporate income taxes (cont.)** 

Loss before income tax expense from outside of China represents the losses incurred by Seven Arrows BVI companies incorporated outside of China.

The income tax provision (benefit) was nil for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, respectively.

Deferred income taxes reflect the net effects of temporary difference between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. The Company periodically evaluates the likelihood of the realization of deferred tax assets and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Due to continuous losses incurred, the Company provided full allowance on the deferred tax assets as of December 31, 2025 and 2024.

---

| | | |
|:---|:---|:---|
| **Deferred tax asset** | **As of<br> December 31<br> 2025** | **As of<br> December 31 <br> 2024** |
| Advertisement expenses | $1280 | $552 |
| Loss carrying forward | 14574 | 1748 |
| Valuation allowance | (15854) | (2300) |
| **Deferred tax assets, net** | $**-** | $**-** |

---

**(b)** **VAT** 

The Company is subject to VAT for selling products in China. The applicable VAT rate is 13% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued.

The Company's VAT taxes payable consists of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,**<br>**2025** | **As of<br> December 31,**<br>**2024** |
| VAT tax payable | $1060 | $- |

---

As of December 31, 2025 and 2024, the Company had VAT taxes payable of approximately $1,060 and nil, respectively, mostly related to the unpaid VAT tax in China. for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, the Company has not received any penalty or interest charge notice from local tax authorities.

**NOTE 10 – COMMITMENTS AND CONTIGENCIES**

**Contingencies**

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings are related to, or arise from, lease disputes, commercial disputes, worker compensation complaints, default on guaranteeing third-party lease obligations, and default on loans. The Company first determines whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss, the loss will be accrued. The Company discloses a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated.

**NOTE 11 – RELATED PARTY TRANSACTIONS**

The Company records transactions with various related parties. These related party balances as of December 31, 2025 and 2024 and transactions for the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024 are identified as follows:

**(1)** **Related parties** 

---

| | |
|:---|:---|
| **Name of Related Party** | **Relationship to the Company** |
| Mr. Bing Huang | Chief Executive Officer and Chairman of Seven Arrows (Hainan) until February 13, 2026 |
| Mr. Zhishui Huang | Mr. Bing Huang's father |
| Holland Seven Arrows Beer (Hunan) Co., Ltd. | Controlled by Mr. Zhishui Huang. |

---

**(2)** **Due from related party** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| Mr. Bing Huang | $155068 | $- |

---

In December 2025, the Company changed its bank account and temporarily deposited the account balance into Mr. Bing Huang's personal account. Subsequently, in January 2026, the balance was fully transferred to the new bank account.

**NOTE 11 – RELATED PARTY TRANSACTIONS (cont.)**

**(3)** **Due to related parties** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| Holland Seven Arrows Beer (Hunan) Co., Ltd\* | $136746 | $54354 |
| Mr. Bing Huang |  | 699 |
| Mr. Zhishui Huang\*\* | 31460 | 13700 |
| **Total** | $**168206** | $**68753** |

---

\* For the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, Holland Seven Arrows Beer (Hunan) Co., Ltd advanced the set-up expenses for the Company.

\*\* For the year ended December 31, 2025 and the period from July 23, 2024 (inception) to December 31, 2024, the Company entered into an office lease agreement with Mr. Zhishui Huang, The Company recorded related lease expense $37,554 and $13,897.

**(4)** **Purchase products from related party** 

---

| | | |
|:---|:---|:---|
|  | **For the Year<br> ended<br> December 31,<br> 2025** | **For the Period<br> from July 23,<br> 2024<br> (inception) to<br> December 31,<br> 2024** |
| Holland Seven Arrows Beer (Hunan) Co., Ltd. | $173202 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |

---

For the year ended December 31, 2025, the Company purchased craft beer from the related party in the amount of $173,202.

**NOTE 12 – SUBSEQUENT EVENTS** 

On February 27, 2026, the shareholders of the Company entered into a Share Purchase Agreement ("SPA") with Reto Eco-Solutions, Inc. ("Reto"). According to the terms of the SPA, ReTo issued 2,167,500 Buyer Class A Shares (the "Exchange Shares"), at a price $4.00 per share, with an aggregate value of Eight Million Six Hundred and Seventy Thousand U.S. Dollars $8,670,000 (the "Share Consideration"), then Reto acquired a 51% equity interest in the Company from its shareholders. The transaction was completed on February 27, 2026.

Apart from the above, the Company has no material subsequent events have occurred that would require recognition in the combined financial statements or disclosure in the notes to the combined financial statements.

## Exhibit 99.2

**Exhibit 99.2**

**UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION**

The following unaudited pro forma combined financial information combines the individual historical unaudited results of ReTo Eco-Solutions, Inc. ("ReTo", "our" or "the Company") and Seven Arrows Supply Chain Limited ("Seven Arrows") adjusted to give effect to the February 27, 2026 merger of Seven Arrows. The unaudited pro forma combined statements of income for the year ended December 31, 2025 gives effect to the merger as if it had occurred on January 1, 2025 and the unaudited pro forma combined balance sheet as of December 31, 2025 gives effect to the merger as if it had occurred on that day.

The transaction accounting adjustments for the acquisition consist of necessary adjustments to account for the merger. The aggregate consideration paid by the Company in connection with the merger was 2,167,500 (adjusted for the 4-for-1 share combination effective May 18, 2026) shares of Class A shares of the Company, which on February 27, 2026 were valued at $$7,803,000. The assumptions and estimates for the preliminary adjustments to the unaudited pro forma combined financial information, are described in the accompanying notes, which should be read together with the unaudited pro forma combined financial information.

The unaudited pro forma combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the operating results for the future periods. The unaudited pro forma combined financial information does not purport to represent what our consolidated results of operation or consolidated financial condition would have been had the merger actually occurred on the dates indicated and does not intend to project the future consolidated results of operation or consolidated financial condition.

**RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES**

**UNAUDITED PRO FORMA COMBINED BALANCE SHEET**

**As of December 31, 2025**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | | | |
|  |<br>**ReTo** | **Seven**<br>**Arrows** | **Transaction**<br>**Accounting**<br>**Adjustments** | <br>**Notes** |<br>**Pro Forma**<br>**Combined** |
| &nbsp;&nbsp;&nbsp;**<u>ASSETS</u>** | | | |  | |
| **Current Assets:** | | | |  | |
| &nbsp;&nbsp;&nbsp;Cash | $250008 | $14092 | $- |  | $264100 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 5979 |  |  |  | 5979 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 332975 | 10452 |  |  | 343427 |
| &nbsp;&nbsp;&nbsp;Advances to suppliers, net | 491182 |  |  |  | 491182 |
| &nbsp;&nbsp;&nbsp;Prepayments and other current assets | 141957 | 45888 |  |  | 187845 |
| &nbsp;&nbsp;&nbsp;Inventories | 77912 | 25232 |  |  | 103144 |
| &nbsp;&nbsp;&nbsp;Due from third parties | 19565 |  |  |  | 19565 |
| &nbsp;&nbsp;&nbsp;Due from related parties | - | 155068 | - |  | 155068 |
| &nbsp;&nbsp;&nbsp;**Total Current Assets** | **1319578** | **250732** | **-** |  | **1570310** |
| **Non-current Assets:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 52269 | 40334 |  |  | 92603 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 7278031 |  | 6100000 | 4b | 13378031 |
| &nbsp;&nbsp;&nbsp;Prepayment for construction of properties | 14362145 |  |  |  | 14362145 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 247573 | 110374 |  |  | 357947 |
| &nbsp;&nbsp;&nbsp;Deposits for business acquisitions | 8579886 |  |  |  | 8579886 |
| &nbsp;&nbsp;&nbsp;Goodwill | - | - | 7090563 | 4b | 7090563 |
| &nbsp;&nbsp;&nbsp;**Total Non-current Assets** | **30519904** | **150708** | **13190563** |  | **43861175** |
| **Total Assets** | $**31839482** | $**401440** | $**13190563** |  | $**45431485** |
| &nbsp;&nbsp;&nbsp;**<u>LIABILITIES AND SHAREHOLDERS' EQUITY</u>** |  |  |  |  |  |
| **Current Liabilities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Convertible debt | $1626548 | $- | $- |  | $1626548 |
| &nbsp;&nbsp;&nbsp;Short term bank loans, net | 197337 |  |  |  | 197337 |
| &nbsp;&nbsp;&nbsp;Advances from customers | 350563 |  |  |  | 350563 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 137050 |  |  |  | 137050 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 1813032 | 26373 |  |  | 1839405 |
| &nbsp;&nbsp;&nbsp;Loans from third parties | 215928 |  |  |  | 215928 |
| &nbsp;&nbsp;&nbsp;Taxes payable | 269989 | 1060 |  |  | 271049 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 1691845 | 168206 |  |  | 1860051 |
| &nbsp;&nbsp;&nbsp;Lease liability - current | 126319 | 41566 | - |  | 167885 |
| &nbsp;&nbsp;&nbsp;**Total Current Liabilities** | **6428611** | **237205** | **-** |  | **6665816** |
| &nbsp;&nbsp;&nbsp;Long-term third party loans – non-current | 189758 |  |  |  | 189758 |
| &nbsp;&nbsp;&nbsp;Long-term accounts payable | 400395 |  |  |  | 400395 |
| &nbsp;&nbsp;&nbsp;Lease liability – non-current | 81452 | 65092 |  |  | 146544 |
| &nbsp;&nbsp;&nbsp;Deferred tax liability |  |  | 1525000 | 4b | 1525000 |
| &nbsp;&nbsp;&nbsp;Earnout liability | - | - | 6000000 | 4b | 6000000 |
| **Total Liabilities** | $**7100216** | $**302297** | $**7448750** |  | $**14851263** |
| &nbsp;&nbsp;&nbsp;**Commitments and Contingencies** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Shareholders' Equity:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Class A shares, no par value, unlimited shares authorized, 2,856,247 shares (including 2,384,250 shares in Escrow Account) issued and outstanding\* |  |  |  | 4b |  |
| &nbsp;&nbsp;&nbsp;Class B shares, $0.01 par value, 2,000,000 shares authorized, 1,000,000 shares and nil shares issued and outstanding | 10000 |  |  |  | 10000 |
| &nbsp;&nbsp;&nbsp;Ordinary shares, $0.01 par value, 50,000 shares authorized, -50,000 shares issued and outstanding |  | 500 | (500) |  |  |
| &nbsp;&nbsp;&nbsp;Subscription receivable |  | (500) | 500 |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 104442602 | 417612 | 362688 | 4a, 4b | 105222902 |
| &nbsp;&nbsp;&nbsp;Statutory reserve | 1072895 |  |  |  | 1072895 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (84153850) | (321044) | (780300) | 4a, 4b | (84934150) |
|  |  |  | 321044 | 4b |  |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (219340) | 2575 | (2575) | 4b | (219340) |
| &nbsp;&nbsp;&nbsp;**Total Shareholders' Equity** | **21152307** | **99143** | **(99143)** |  | **21152307** |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | 3586959 | - | 5764706 | 4b | 9351665 |
| &nbsp;&nbsp;&nbsp;**Total Equity** | **24739266** | **99143** | **5436813** |  | **30503972** |
| **Total Liabilities and Shareholders' Equity** | $**31839482** | $**401440** | $**13190563** |  | $**45431485** |

---

\* All share and per-share amounts have been retroactively adjusted to reflect:

A 4-for-1 forward stock split effected on May 18, 2026 <br>

All earnout shares shall be deemed to be issued as of December 31, 2025

**RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES**

**UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME**

**For the Year Ended December 31, 2025**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | | |
|  |<br>**ReTo** | **Seven**<br>**Arrows** | **Transaction**<br>**Accounting**<br>**Adjustments** |<br>**Pro Forma**<br>**Combined** |
| Revenues | $3370789 | $220823 | $- | $3591612 |
| Cost of revenues | 2181184 | 193021 | - | 2374205 |
| **Gross Profit** | **1189605** | **27802** | **-** | **1217407** |
| **Operating Expenses:** |  |  |  |  |
| Selling expenses | 783813 | 74661 |  | 858474 |
| General and administrative expenses | 2916360 | 227522 | 1814433 5a 5b | 4958315 |
| Provision for credit losses | 89719 |  |  | 89719 |
| Impairment of long-lived assets | 725940 |  |  | 725940 |
| Impairment of goodwill | 7982271 |  |  | 7982271 |
| Research and development expenses | 361080 | - | - | 361080 |
| **Total Operating Expenses** | **12859183** | **302183** | **1814433** | **14975799** |
| **Loss from Operations** | **(11669578)** | **(274381)** | **(1814433)** | **(13029259)** |
| **Other Income (Expenses):** |  |  |  |  |
| Interest expenses | (982277) | (55) |  | (982332) |
| Interest income | 516 | 60 |  | 576 |
| Other income (expenses), net | 37938 | - | - | 37938 |
| **Total Other Expenses, net** | **(943823)** | **5** | **-** | **(943818)** |
| **Loss Before Income Taxes** | **(12613401)** | **(274376)** | **(1814433)** | **(14702210)** |
| **Income Taxes Expense** | **-** | **-** | **(258533)** 5c | **(258533)** |
| **Net Loss** | **(12613401)** | **(274376)** | **(1555900)** | **(14443677)** |
| Less: Net loss attributable to non-controlling interest | (273485) | (134444) | - | (407929) |
| **Net loss attributable to ReTo Eco-Solutions, Inc.** | $**(12339916)** | $**(139932)** | $**(1555900)** | $**(14035748)** |
| **Comprehensive Loss:** |  |  |  |  |
| **Net Loss** | $**(12613401)** | $**(274376)** | $**(1009050)** | $**(13896827)** |
| Other comprehensive loss: |  |  |  |  |
| Foreign currency translation adjustment | (81629) | 2573 | - | (79056) |
| **Comprehensive Loss** | **(12695030)** | **(271803)** | **(1009050)** | **(13975883)** |
| Less: Comprehensive loss attributable to non-controlling interest | (220917) | (133183) |  | (354100) |
| **Comprehensive loss attributable to ReTo Eco-Solutions, Inc.** | $**(12474113)** | $**(138620)** | $**(1009050)** | $**(13621783)** |
| **Basic and Diluted Loss Per Share Attributable to ReTo Eco-Solutions, Inc.** | (25.84) | - | - | (4.71) |
| **Weighted average number of shares\*** |  |  |  |  |
| Basic and diluted | **477462** | **-** | **2384250** | **2861712** |

---

\* All share and per-share amounts have been retroactively adjusted to reflect:

a 4-for-1 forward stock split effected on May 18, 2026 <br>

All earnout shares shall be deemed to be issued as of January 1, 2025

**NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

**Note 1. Description of the Transaction**

On February 27, 2026, ReTo Eco-Solutions, Inc., a British Virgin Islands business company ("ReTo" or "Buyer"), entered into a Share Exchange Agreement (the "Share Exchange Agreement"), by and among (i) Buyer, (ii) Seven Arrows Supply Chain Limited, a British Virgin Islands business company ("Seven Arrows" or the "Company"), and (iii) Rei Shiba ("Seller").

Pursuant to the Share Exchange Agreement, subject to the terms and conditions set forth therein, Seller agreed to sell to ReTo, and ReTo agreed to buy, an aggregate of 25,500 ordinary shares, par value $0.01 per share (the "Company Shares"), of Seven Arrows, representing fifty-one percent (51%) of the issued and outstanding equity interests of Seven Arrows (the "Purchased Shares") in exchange for newly issued Class A shares, no par value ("Buyer Class A Shares") of ReTo, as further described below (the "Share Exchange" together with the other transactions contemplated by the Share Exchange Agreement, the "Transactions").

The Share Exchange closed (the "Closing") on February 27, 2026 (the "Closing Date").

In full payment for the Purchased Shares, ReTo issued 2,167,500 Buyer Class A Shares (the "Exchange Shares"), at a price $4.00 per share, with an aggregate value of Eight Million Six Hundred and Seventy Thousand U.S. Dollars $8,670,000 (the "Share Consideration"). Following the Closing, 2,753,301 Buyer Class A Shares were issued and outstanding.

 ****

***Escrow Shares***

At the Closing, all of the Share Consideration (the "***Escrow Earnout Shares***") otherwise issuable to Seller was deposited into a segregated escrow account with VStock Transfer, LLC, as escrow agent, and held in escrow in accordance with an escrow agreement entered into in connection with the Transactions. The Escrow Earnout Shares will be held in the escrow account and shall vest or be subject to forfeiture during the thirty-six (36) month period following the Closing, as described below. The Escrow Earnout Shares shall also serve as the source of payment for any post-Closing indemnification claims (other than claims arising from fraud, criminal activity or willful misconduct in connection with the Transactions); provided, however, that Seller may elect to pay such indemnification claims by cash in lieu of forfeiture of Buyer Class A Shares held by Seller. Seller will not have the right to vote the Escrow Earnout Shares while they are held in escrow nor shall Seller have the right to create any liens or other restrictions with respect to such Escrow Earnout Shares while such Escrow Earnout Shares are in escrow.

 ****

***Earnout***

Seller will have a contingent right to receive the Escrow Earnout Shares after the Closing based on the net income and the Contributed Profits of Seven Arrows's operating company (the "***Operating Company***") during the three (3) fiscal years ending December 31, 2026, 2027 and 2028 (the "***Earnout Period***"). "***Contributed Profits***" means with respect to the Operating Company for any fiscal year, the amount equal to fifty one percent (51%) of net income, if any, of the Operating Company determined in accordance with GAAP in an applicable year; <u>provided</u>, <u>however</u>, if after the Closing and during the Earnout Period, the Company or its subsidiaries acquire another business or material assets, then the Contributed Profits shall be computed without taking into consideration (i) the revenues of or generated by such acquired business or material assets or (ii) any impact such acquired business or material assets would have on the net income of the Operating Company. Contributed Profits also excludes (x) any extraordinary gains (such as from the sale of real property, investments, securities or fixed assets) or any other extraordinary income and (y) any revenues that are non-recurring and earned outside of the ordinary course.

Seller shall be entitled to receive the Escrow Earnout Shares as follows:

● If (A) the Operating Company's net income for the fiscal year ending December 31, 2026 (the "  ***2026 Net Income***") is equal to or greater than Five Hundred Ten Thousand U.S. Dollars ($510,000) (the "  ***2026 Net Income Target***") and (B) Buyer receives fifty one percent (51%) of the 2026 Net Income (the "  ***2026 Contributed Profits***") in cash pursuant to the Management Services Agreement (as defined below), then Seller shall be entitled to receive ten percent (10%) of the Escrow Earnout Shares (the "  ***2026 Escrow Earnout Shares*** "); <u>provided</u>, <u>however</u>, that the number of 2026 Escrow Earnout Shares that vest and become payable to Seller shall be subject to the adjustments and reduced by the number of shares forfeited by Seller as payment due in respect of its indemnification obligations as described below.

● In the event that the Company achieves at least 70% but less than 100% of the 2026 Net Income Target and Buyer receives 100% of the 2026 Contributed Profits, then (A) a number of 2026 Escrow Earnout Shares equal to the product of (I) the number of 2026 Escrow Earnout Shares and (II) the quotient obtained by dividing 2026 Net Income by the 2026 Net Income Target, shall immediately vest and become payable to Seller and (B) Seller shall forfeit and shall no longer be eligible to receive the remaining 2026 Escrow Earnout Shares (but shall still be eligible to receive 2027 Escrow Earnout Shares and 2028 Escrow Earnout Shares).'

● In the event that the (A) Company fails to achieve 70% of 2026 Net Income Target or (B) Buyer fails to receive 100% of the 2026 Contributed Profits, Seller shall forfeit and shall no longer be eligible to receive from the escrow account an aggregate number of Escrow Earnout Shares equal to one hundred percent (100%) of the 2026 Escrow Earnout Shares.

● If (A) Operating Company's net income for the fiscal year ending December 31, 2027 (the "  ***2027 Net Income***") is equal to or greater than One Million Seven Hundred Eighty Five Thousand U.S. Dollars ($1,785,000) (the "  ***2027 Net Income Target***") and (B) Buyer receives fifty one percent (51%) of the 2027 Net Income (the "  ***2027 Contributed Profits***") in cash pursuant to the Management Services Agreement, then Seller shall be entitled to receive thirty five percent (35%) of the Escrow Earnout Shares (the "  ***2027 Escrow Earnout Shares*** "); provided, however, that the number of 2027 Escrow Earnout Shares that vest and become payable to Seller shall be subject to the adjustments and reduced by the number of shares forfeited by Seller as payment due in respect of its indemnification obligations as described below.

● In the event that the Company achieves at least 70% but less than 100% of the 2027 Net Income Target and Buyer receives 100% of the 2027 Contributed Profits, then (A) a number of 2027 Escrow Earnout Shares equal to the product of (I) the number of 2027 Escrow Earnout Shares and (II) the quotient obtained by dividing 2027 Net Income by the 2027 Net Income Target, shall immediately become payable to Seller and (B) Seller shall forfeit and shall no longer be eligible to receive the remaining 2027 Escrow Earnout Shares (but shall still be eligible to receive 2028 Escrow Earnout Shares).

● In the event that (A) the Company fails to achieve 70% of 2027 Net Income Target or (B) Buyer fails to receive 100% of the 2027 Contributed Profits, Seller shall forfeit and shall no longer be eligible to receive from the escrow account an aggregate number of Escrow Earnout Shares equal to one hundred percent (100%) of the 2027 Escrow Earnout Shares.

● If (A) the Operating Company's net income for the fiscal year ending December 31, 2028 (the "  ***2028 Net Income***") is equal to or greater than Two Million Eight Hundred Five Thousand U.S. Dollars ($2,805,000) (the "  ***2028 Net Income Target***") and (B) Buyer receives fifty one percent (51%) of the 2028 Net Income (the "  ***2028 Contributed Profits***") in cash pursuant to the Management Services Agreement, then Seller shall be entitled to receive fifty five percent (55%) of the Escrow Earnout Shares (the "  ***2028 Escrow Earnout Shares*** "); provided, however, that the number of 2028 Escrow Earnout Shares that vest and become payable to Seller shall be subject to the adjustments and reduced by the number of shares forfeited by Seller as payment due in respect of its indemnification obligations as described below.

● In the event that the Company achieves at least 70% but less than 100% of the 2028 Net Income Target and Buyer receives 100% of the 2028 Contributed Profits, then (A) a number of 2028 Escrow Earnout Shares equal to the product of (I) the number of 2028 Escrow Earnout Shares and (II) the quotient obtained by dividing 2028 Net Income by the 2028 Net Income Target, shall immediately become vested and payable to Seller and (B) Seller shall forfeit and shall no longer be eligible to receive the remaining 2028 Escrow Earnout Shares.

● In the event that (A) the Company fails to achieve 70% of 2028 Net Income Target or (B) Buyer fails to receive 100% of the 2028 Contributed Profits, Seller shall forfeit and shall no longer be eligible to receive from the escrow account an aggregate number of Escrow Earnout Shares equal to one hundred percent (100%) of the 2028 Escrow Earnout Shares.

If the Company's Net Income in any applicable fiscal year exceeds one hundred percent (100%) of the Net Income Target in such fiscal year (the "***Excess Profits***"), Buyer shall issue to Seller a number of Buyer Class A Shares equal to the product of the Excess Profits *divided by* $1.00 (such shares, the "***Additional Earnout Shares***"); provided, however, that the number of Additional Earnout Shares in each applicable year shall not be greater than one hundred percent (100%) of the maximum amount of Escrow Earnout Shares in such year.

The number of Escrow Earnout Shares shall be appropriately adjusted to reflect any reclassification, recapitalization, share split (including a share consolidation), or combination, exchange, readjustment of shares, or similar transaction, or any share dividend or distribution paid in shares with respect to the Buyer Class A Shares subsequent to the Closing Date.

**Note 2. Basis of Presentation**

The unaudited pro forma combined balance sheet as of December 31, 2025 and the unaudited pro forma combined statement of incomes for the year ended December 31, 2025 are based on the historical financial statements of ReTo and the combined financial statements of Seven Arrows. The unaudited pro forma combined balance sheet was prepared using the ReTo condensed consolidated balance sheet, the Seven Arrows combined balance sheet and gives effect to the transaction as if it had occurred on December 31, 2025. The unaudited pro forma combined statements of income were prepared using the ReTo condensed consolidated statements of income, the Seven Arrows combined statement of income and gives effect to the transaction as if it had occurred on January 1, 2025.

The unaudited pro forma combined financial statements were accounted for using the acquisition method in accordance with business combination accounting guidance as provided by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations ("ASC 805"). Under the acquisition method of accounting, the Company allocates the purchase price of a business acquisition based on the fair value of the identifiable tangible and intangible assets. Goodwill is recognized to the extent that the purchase consideration exceeds the assets acquired and liabilities assumed. The Company uses its best estimate to determine the fair value of the assets acquired and liabilities assumed. During the measurement period, which can be up to one year after the acquisition date, the Company can make adjustments to the fair value of the assets acquired and liabilities assumed, with the offset being an adjustment to goodwill.

The unaudited pro forma combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the operating results for the future periods. The unaudited pro forma combined financial statements were based on Transaction Accounting Adjustments and do not reflect any operating efficiencies, synergies or cost savings that the Company may achieve, or any additional operating expenses that may be incurred with respect to the combined company.

The unaudited pro forma combined financial statements should be read in conjunction with: ReTo's audited financial statements included in its Annual Report on Form 20-F for the annual period ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on May 1, 2026 ("ReTo 20-F").

**Note 3. Estimated Merger Consideration and Preliminary Purchase Price Allocation**

The transaction was accounted for as a business combination in accordance with ASC 805, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value of the assets and liabilities in the unaudited pro forma combined financial statements are based upon a preliminary assessment of fair value and may change as valuations for certain tangible assets and intangible assets are finalized and the associated income tax impacts are determined. The Company expects to finalize the purchase price allocation as soon as practicable, but no longer than one year from the acquisition date.

The following table summarizes the preliminary allocation of the consideration paid for Seven Arrows to the preliminary estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill.

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| | |
|:---|:---|
| Share Consideration **<sup>(a)</sup>** | $6000000 |
|  | 51% |
| **100% of equity value** | **11764706** |
| Assets acquired: |  |
| &nbsp;&nbsp;&nbsp;Cash | $76306 |
| &nbsp;&nbsp;&nbsp;Account receivable | 20546 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 66137 |
| &nbsp;&nbsp;&nbsp;Inventories | 23828 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 40461 |
| &nbsp;&nbsp;&nbsp;Intangible assets**<sup>(b)</sup>** | 6100000 |
| &nbsp;&nbsp;&nbsp;Right of use assets | 105597 |
| &nbsp;&nbsp;&nbsp;Goodwill**<sup>(c)</sup>** | 7160546 |
| **Total assets acquired** | **13593421** |
| Liabilities assumed: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 321 |
| &nbsp;&nbsp;&nbsp;Advances from customers | 4798 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | $23284 |
| &nbsp;&nbsp;&nbsp;Loan from third party | 176563 |
| &nbsp;&nbsp;&nbsp;Lease liability | 98019 |
| &nbsp;&nbsp;&nbsp;Taxes payable | 730 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities**<sup>(d)</sup>** | 1525000 |
| **Total liabilities assumed** | **1828715** |
| **Estimated fair value of net assets acquired** | $**11764706** |

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**(a)** Total of 2,167,500 (adjusted for the 4-for-1 share combination
effective May 18, 2026) shares were held in the Escrow Account and was valued at $6,000,000. The significant assumptions which the Company
used in the model are listed below:

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| | |
|:---|:---|
|  | **February 27, <br> 2026** |
| Share price | $3.6 |
| Time-Step simulation | 0.42-1 |
| Risk-free interest rate | 3.39-3.52% |
| Calculation period | 0.84-2.84 |
| Volatility | 14% |

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**(b)** Intangible assets acquired includes trademark and customer relationship with an estimated fair value of $6,100,000.

**(c)** The above purchase price allocation does not give effect to certain pro forma adjustments that were included
in the unaudited pro forma condensed combined financial statements that would ultimately impact the purchase price allocation. For any
proforma adjustments that were not captured within the closing balance sheet at the time the purchase price allocation was performed,
an adjustment was made to goodwill.

**(d)** To recognize $1,525,000 deferred tax liabilities associated with the additional fair value identified on
intangible.

The preliminary purchase price allocation above, which is as of the acquisition date of February 27, 2026, has been used to prepare the transaction accounting adjustments in the unaudited pro forma combined balance sheet and unaudited pro forma combined statement of income.

**Note 4. Notes to Unaudited Pro Forma Combined Balance Sheet**

The following is a description of the preliminary transaction accounting adjustments reflected in the unaudited pro forma combined balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;a. Represents estimated acquisition transaction costs of the issuance of 216,750 Class A ordinary shares
in consideration for the Consultant's advisory services rendered related to the transactions approximately $780,300 that were incurred
on February 27, 2026;

&nbsp;&nbsp;&nbsp;&nbsp;b. Represents recapitalization of Seven Arrows through the contribution of the share capital in ReTo to Seven
Arrow; the issuance of 2,167,500 Class A ordinary shares in Escrow Account; and the elimination of the historical accumulated deficit
of Seven Arrow. Additionally, the Goodwill adjustment reflects the purchase price paid in excess of the preliminary estimated fair value
of assets acquired and liabilities assumed. See Note 3 for further details on the purchase price allocation and goodwill.

**Note 5. Notes to Unaudited Pro Forma Combined Statement of Income**

The following is a description of preliminary transaction accounting adjustments reflected in the unaudited pro forma combined statement of income.

&nbsp;&nbsp;&nbsp;&nbsp;a. Represents estimated non-recurring transaction costs of approximately $780,300 that were incurred by ReTo
subsequent to December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;b. To recognize the related $1,034,133 amortization expense for additional fair value identified on Intangible
assets -Trademark with a ten-year useful life and Intangible assets -Customer Relationships with a five-year useful life. for the year
ended December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;c. To recognized the related deferred tax recovery of $258,533 associated with amortization expense for additional
fair value identified on Intangible assets for the year ended December 31, 2025.