BEIJING, Dec. 27,
2023 /PRNewswire/ -- ReTo Eco-Solutions, Inc.
(Nasdaq: RETO) (the "Company"), a provider of technology solutions
and operation services for intelligent ecological environments and
internet of things technology development services in China and other countries, today announced its
financial results for the six months ended June 30, 2023.
First Half 2023 Financial Review
- Revenues decreased by approximately $1.7
million, or 57%, to $1.2
million for the six months ended June
30, 2023 from approximately $2.9
million for the six months ended June
30, 2022.
- Cost of revenues decreased by approximately $1.4 million, or 55%, to approximately
$1.1 million for the six months ended
June 30, 2023 from $2.5 million for the six months ended
June 30, 2022.
- Operating expenses increased by approximately $35.1 million, or 582%, to approximately
$41.1 million for the six months
ended June 30, 2023 from $6.0 million for the six months ended
June 30, 2022.
- Net loss increased by approximately $39.9 million, or 692%, to approximately
$45.7 million for the six months
ended June 30, 2023 from $5.8 million for the six months ended
June 30, 2022.
Financial Results for the First Half 2023
Revenues
Revenues decreased by approximately $1.7
million, or 57%, to $1.2
million for the six months ended June
30, 2023 from approximately $2.9
million for the six months ended June
30, 2022. Revenue from machinery and equipment sales
decreased by approximately $1.0
million, or 49%, to $1.0
million for the six months ended June
30, 2023 from approximately $2.0
million for the six months ended June
30, 2022. The decrease is mainly due to slowdown of the
construction industry and less demand for the Company's products.
Sales of the Company's environmental-friendly construction
materials decreased by approximately $0.2
million, or 72%, to approximately $0.09 million for six months ended June 30, 2023 from approximately $0.3 million for the six months ended
June 30, 2022 due to the decrease in
demand resulting from the downturn of the national real estate
market. Revenue from other services decreased by approximately
$0.3 million, or 79%, to
approximately $0.09 million for six
months ended June 30, 2023 from
approximately $0.4 million for the
six months ended June 30, 2022 due to
less demand for the Company's technological consulting service and
roadside assistance service.
Cost of revenues
Cost of revenues decreased by approximately $1.4 million, or 55%, to approximately
$1.1 million for the six months ended
June 30, 2023 from $2.5 million for the six months ended
June 30, 2022. The decrease in cost
of revenues was in line with the decrease in revenues.
Gross profit
Gross profit decreased by approximately $0.3 million, or 75%, to approximately
$0.1 million for the six months ended
June 30, 2023 from $0.4 million for the six months ended
June 30, 2022. Gross margin was 8%
for the six months ended June 30,
2023 as compared to 13% for the six months ended
June 30, 2022. The decrease in gross
profit was primarily attributable to (i) a decrease of
approximately $147,000 in gross
profit in machinery and equipment business due to the significant
decrease in domestic and overseas market demand of machinery and
equipment; and (ii) a decrease of approximately $155,000 in gross profit in other services due to
decreased customer orders. Because other services with higher gross
profit margin accounted for 7% of total revenue in the six months
ended June 30, 2023 as compared to
15% of total revenue for the six months ended June 30, 2022, the Company's gross profit margin
decreased to 8% for the six months ended June 30, 2023 as compared to 13% of total revenue
for the six months ended June 30,
2022.
Operating expenses
For the six months ended June 30,
2023 and 2022, the Company's selling expenses were
approximately $0.3 million for both
periods.
General and administrative expenses increased by $33.7 million, or 572%, to $39.6 million for the six months ended
June 30, 2023 from $5.9 million for the six months ended
June 30, 2022. The increase was due
to $33.8 million increase in
share-based compensation, partially offset by decreased payroll
expenses.
Bad debt expenses amounted to approximately $0.5 million for the six months ended
June 30, 2023, as compared to a bad
debt recovery of approximately $0.7
million for the six months ended June
30, 2022.
Research and development expenses increased by $0.3 million, or 60%, to $0.8 million for the six months ended
June 30, 2023 from $0.5 million for the six months ended
June 30, 2022. The increase was due
to an increase of approximately $0.3
million in expert fees.
Interest expense
The Company's interest expenses were approximately $0.2 million for both six-month periods ended
June 30, 2023 and 2022.
Change in fair value in convertible debt
Due to change in fair value of convertible loans, the Company
recorded an unrealized loss of $57,985 and $204,331 in other expense for the six months
ended June 30, 2023 and 2022,
respectively.
Other income (expense), net
Other expense was $4.4 million for
the six months ended June 30, 2023 as
compared to $0.3 million for the six
months ended June 30, 2022. The
increase was due to a one-time charge of $4.7 million from a terminated project.
Loss before income taxes
The Company's loss before income taxes was approximately
$45.7 million for the six months
ended June 30, 2023, an increase of
approximately $39.9 million as
compared to loss before income taxes of approximately $5.8 million for the six months ended
June 30, 2022. The increase was
primarily attributable to decrease in revenue and increase in
operating expenses and other expense.
Provision for income taxes
The Company's subsidiaries in the
People's Republic of China ("PRC") are subject to PRC income
tax, which is computed according to the relevant laws and
regulations in the PRC. Under the Enterprise Income Tax Law, the
corporate income tax rate applicable to all companies, including
both domestic and foreign-invested companies, is 25%. However, two
subsidiaries of the Company, Beijing REIT Technology Development
Co., Ltd. and Hainan Yile IoT Technology Co., Ltd., are recognized
as High and New Technology Enterprises by the PRC government and
thus subject to a favorable income tax rate of 15%. As the Company
had losses before income tax, its income tax expenses amounted to
$52 and $28,767 for the six months ended June 30, 2023 and 2022, respectively.
Net loss
As a result of the foregoing, net loss amounted to approximately
$45.7 million and $5.8 million for the six months ended
June 30, 2023 and 2022,
respectively.
Cash
Cash was approximately $0.2
million as of June 30, 2023,
reflecting an increase of approximately $0.1
million from approximately $0.1
million as of December 31,
2022.
About ReTo Eco-Solutions, Inc.
Founded in 1999, ReTo Eco-Solutions, Inc., through its
proprietary technologies, systems and solutions, is striving to
bring clean water and fertile soil to communities worldwide. The
Company, through its operating subsidiaries in China, is engaged in the ecological
restoration and solid waste treatment, manufacturing and
distribution of eco-friendly construction materials (aggregates,
bricks, pavers and tiles) made from mining waste (iron tailings),
and soil remediation materials transformed from solid waste (iron
tailings), as well as equipment used for the production of these
eco-friendly construction materials and soil remediation materials.
In addition, the Company provides consultation, design, project
implementation and construction of urban ecological protection
projects and parts, engineering support, consulting, technical
advice and service, and other project-related solutions for its
manufacturing equipment and environmental protection projects. The
Company also offers roadside assistance services and technology
development services utilizing Internet of Things technologies. For
more information, please visit: http://en.retoeco.com.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. These statements include, among
others, statements regarding the Company's plans to regain
compliance with the minimum bid price requirement. The Company's
actual results may differ materially from those expressed in any
forward-looking statements as a result of various factors and
uncertainties. The reports filed by the Company with the Securities
and Exchange Commission discuss these and other important factors
and risks that may affect the Company's business, results of
operations and financial conditions. For these reasons, among
others, investors are cautioned not to place undue reliance upon
any forward-looking statements in this press release. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the
date hereof.
For more information, please contact:
ReTo Eco-Solutions, Inc.
Angela Hu
Tel: +86-010-64827328
Email: ir@retoeco.com or 310@reit.cc
RETO ECO-SOLUTIONS
INC. AND SUBSIDIARIES
|
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
June
30,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
ASSETS
|
|
(Unaudited)
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
233,839
|
|
|
$
|
113,895
|
|
Accounts receivable,
net
|
|
|
475,303
|
|
|
|
2,150,450
|
|
Accounts receivable,
net - related party
|
|
|
79,639
|
|
|
|
83,736
|
|
Advances to suppliers,
net
|
|
|
707,775
|
|
|
|
453,894
|
|
Advances to suppliers,
net - related party
|
|
|
1,598,977
|
|
|
|
3,787,036
|
|
Inventories,
net
|
|
|
820,590
|
|
|
|
337,798
|
|
Prepayments and other
current assets
|
|
|
114,287
|
|
|
|
402,151
|
|
Due from related
parties
|
|
|
483,369
|
|
|
|
208,225
|
|
Due from third
parties
|
|
|
678,223
|
|
|
|
-
|
|
Total Current
Assets
|
|
|
5,192,002
|
|
|
|
7,537,185
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
8,028,957
|
|
|
|
8,722,435
|
|
Intangible assets,
net
|
|
|
4,548,402
|
|
|
|
4,869,654
|
|
Long-term investment in
equity investee
|
|
|
2,301,850
|
|
|
|
2,503,944
|
|
Right-of-use
assets
|
|
|
271,972
|
|
|
|
424,999
|
|
Total
Assets
|
|
$
|
20,343,183
|
|
|
$
|
24,058,217
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Short-term
loans
|
|
$
|
5,274,916
|
|
|
|
1,319,490
|
|
Convertible
debt
|
|
|
3,004,000
|
|
|
|
3,922,686
|
|
Advances from
customers
|
|
|
2,072,983
|
|
|
|
2,551,216
|
|
Advances from
customers-related party
|
|
|
166,275
|
|
|
|
-
|
|
Due to a minority
shareholder
|
|
|
413,719
|
|
|
|
725,000
|
|
Deferred grants -
current
|
|
|
264
|
|
|
|
18,563
|
|
Accounts
payable
|
|
|
2,934,058
|
|
|
|
2,624,701
|
|
Accrued and other
liabilities
|
|
|
2,433,692
|
|
|
|
2,717,432
|
|
Loans from third
parties
|
|
|
1,356,113
|
|
|
|
1,106,233
|
|
Taxes
payable
|
|
|
1,922,345
|
|
|
|
2,077,088
|
|
Operating lease
liabilities, current
|
|
|
150,420
|
|
|
|
277,036
|
|
Deferred tax
liability
|
|
|
309,664
|
|
|
|
325,593
|
|
Total Current
Liabilities
|
|
|
20,038,449
|
|
|
|
17,665,038
|
|
|
|
|
|
|
|
|
|
|
Loans from third
parties-noncurrent
|
|
|
1,048,088
|
|
|
|
1,160,000
|
|
Operating lease
liabilities - noncurrent
|
|
|
83,407
|
|
|
|
158,650
|
|
Total
Liabilities
|
|
|
21,169,944
|
|
|
|
18,983,688
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
Common Share, $0.01 par
value, 20,000,000 shares authorized, 7,725,848
shares and 4,339,889 shares issued and outstanding as
of June 30, 2023
and December 31, 2022, respectively
|
|
|
77,259
|
|
|
|
43,400
|
|
Additional paid-in
capital
|
|
|
98,689,295
|
|
|
|
53,331,093
|
|
Subscription
receivable
|
|
|
(5,887,546)
|
|
|
|
-
|
|
Statutory
reserve
|
|
|
1,069,882
|
|
|
|
1,066,554
|
|
Accumulated
deficit
|
|
|
(93,056,277)
|
|
|
|
(47,813,206)
|
|
Accumulated other
comprehensive loss
|
|
|
(2,220,029)
|
|
|
|
(2,388,890)
|
|
Total Shareholders'
Equity Attributable to ReTo Eco-Solutions Inc.
|
|
|
(1,327,416)
|
|
|
|
4,238,951
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
500,655
|
|
|
|
835,578
|
|
Total Shareholders'
Equity
|
|
|
(826,761)
|
|
|
|
5,074,529
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
20,343,183
|
|
|
|
24,058,217
|
|
RETO ECO-SOLUTIONS
INC. AND SUBSIDIARIES
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
Revenues – third party
customers
|
|
$
|
1,022,919
|
|
|
$
|
2,882,792
|
|
Revenues – related
parties
|
|
|
210,864
|
|
|
|
6,987
|
|
Total
revenues
|
|
|
1,233,783
|
|
|
|
2,889,779
|
|
Cost of revenues –
third party customers
|
|
|
780,794
|
|
|
|
1,957,829
|
|
Cost of revenues –
related parties
|
|
|
359,398
|
|
|
|
557,145
|
|
Total
Cost
|
|
|
1,140,192
|
|
|
|
2,514,974
|
|
Gross
Profit
|
|
|
93,591
|
|
|
|
374,805
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
289,730
|
|
|
|
288,552
|
|
General and
administrative expenses
|
|
|
39,559,187
|
|
|
|
5,888,849
|
|
Bad debt expenses
(recovery)
|
|
|
460,116
|
|
|
|
(650,776)
|
|
Research and
development expenses
|
|
|
809,979
|
|
|
|
505,847
|
|
Total Operating
Expenses
|
|
|
41,119,012
|
|
|
|
6,032,472
|
|
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
(41,025,421)
|
|
|
|
(5,657,667)
|
|
|
|
|
|
|
|
|
|
|
Other Income
(expenses):
|
|
|
|
|
|
|
|
|
Interest
expenses
|
|
|
(180,772)
|
|
|
|
(189,755)
|
|
Interest
income
|
|
|
1,509
|
|
|
|
2,293
|
|
Other income
(expenses), net
|
|
|
(4,356,224)
|
|
|
|
348,266
|
|
Change in fair value of
convertible debt
|
|
|
(57,985)
|
|
|
|
(204,331)
|
|
Gain from disposal of
subsidiaries
|
|
|
38,394
|
|
|
|
-
|
|
Share of losses in
equity method investments
|
|
|
(83,307)
|
|
|
|
(38,885)
|
|
Total Other
Expenses, Net
|
|
|
(4,638,385)
|
|
|
|
(82,412)
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes
|
|
|
(45,663,806)
|
|
|
|
(5,740,079)
|
|
Provision for Income
Taxes
|
|
|
52
|
|
|
|
28,767
|
|
Net
Loss
|
|
|
(45,663,858)
|
|
|
|
(5,768,846)
|
|
|
|
|
|
|
|
|
|
|
Less: net loss
attributable to noncontrolling interest
|
|
|
(424,115)
|
|
|
|
(92,866)
|
|
Net Loss
Attributable to ReTo Eco-Solutions, Inc.
|
|
$
|
(45,239,743)
|
|
|
$
|
(5,675,980)
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(45,663,858)
|
|
|
$
|
(5,768,846)
|
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
258,053
|
|
|
|
(723,421)
|
|
Comprehensive
Loss
|
|
|
(45,405,805)
|
|
|
|
(6,492,267)
|
|
Less: comprehensive
loss attributable to noncontrolling interest
|
|
|
(334,923)
|
|
|
|
(22,981)
|
|
Comprehensive Loss
Attributable to ReTo Eco-Solutions, Inc
|
|
$
|
(45,070,882)
|
|
|
$
|
(6,469,286)
|
|
|
|
|
|
|
|
|
|
|
Loss Per
Share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(8.32)
|
|
|
$
|
(1.65)
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
5,437,853
|
|
|
|
3,443,338
|
|
View original
content:https://www.prnewswire.com/news-releases/reto-eco-solutions-inc-announces-first-half-2023-financial-results-302022689.html
SOURCE ReTo Eco-Solutions, Inc.