ReTo(RETO) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the six months ended June 30, 2025, were $1,049,341, representing a 36.5% increase from $768,361 in the same period of 2024[6] - Gross profit decreased to $185,335 for the six months ended June 30, 2025, down from $332,555 in 2024, reflecting a decline of 44.6%[6] - Total operating expenses increased significantly to $1,581,032, compared to $855,021 in 2024, marking an increase of 84.6%[6] - The net loss attributable to ReTo Eco-Solutions, Inc. for the six months ended June 30, 2025, was $1,380,881, compared to a net loss of $678,459 in 2024, indicating a 103.5% increase in losses[6] - The company reported a basic and diluted loss per share of $0.70 for the six months ended June 30, 2025, compared to a loss of $0.25 in 2024[6] - For the six months ended June 30, 2025, the net loss was $1,408,902, compared to a net loss of $716,633 for the same period in 2024, indicating an increase in losses of approximately 96.5% year-over-year[10] - The Company reported a total loss before income tax provision of $1,408,901 for the six months ended June 30, 2025, compared to a loss of $523,660 for the same period in 2024[103] Assets and Liabilities - Total assets as of June 30, 2025, were $41,405,048, up from $34,256,918 as of December 31, 2024, reflecting a growth of 20.5%[4] - Current assets increased to $3,812,391 as of June 30, 2025, compared to $1,368,648 at the end of 2024, representing a growth of 178.5%[4] - Total liabilities rose to $7,192,010 as of June 30, 2025, compared to $4,332,232 at the end of 2024, an increase of 66.3%[4] - The company’s total liabilities increased to $102,964,031 as of June 30, 2025, compared to $79,128,607 as of June 30, 2024, marking a rise of 30.1%[7] - As of June 30, 2025, total taxes payable were $256,043, an increase from $249,628 as of December 31, 2024, primarily related to unpaid income tax in China[107] Cash and Investments - Cash and cash equivalents increased to $2,459,943 as of June 30, 2025, from $671,355 at the end of 2024, a rise of 266.5%[4] - The company has made significant investments in property, plant, and equipment, with net assets increasing to $278,575 as of June 30, 2025, from $21,497 at the end of 2024[4] - The company reported cash and cash equivalents of $2,459,943 as of June 30, 2025, up from $1,552,455 at the end of June 2024, representing a 58.2% increase[10] Revenue Segments - Revenue from equipment and accessories sales was $1,023,797 for the six months ended June 30, 2025, compared to $768,361 in 2024[42] - Revenue from craft beer and vending machine sales was $25,544 for the six months ended June 30, 2025, with no revenue reported in 2024[42] - For the six months ended June 30, 2025, three customers accounted for 28%, 19%, and 18% of total revenue, compared to two customers accounting for 39% and 11% in 2024[61] Acquisitions and Business Expansion - The company entered into a share exchange agreement to acquire a 51% equity interest in MeinMalzeBier Holdings Limited, expanding its business into the craft beer market in China[12] - On April 25, 2025, the Company acquired a 51% equity interest in MMB for a total consideration of $3,978,000, which included cash and the issuance of shares[81] - The acquisition of MMB is expected to enhance the Company's presence in the craft beer market in the PRC[81] Accounting and Financial Reporting - The Company adopted ASU No. 2016-13 for credit loss measurement effective January 1, 2023, which did not materially impact the consolidated financial statements[24] - The Company adopted ASC Topic 606 for revenue recognition, which requires revenue to be recognized when control of goods or services is transferred to customers[39] - The Company is currently evaluating the impact of several new accounting standards, including ASU 2025-05, which will affect the measurement of credit losses for accounts receivable and contract assets, effective after December 15, 2025[72] Expenses and Costs - The cost of goods sold for the six months ended June 30, 2025, was $864,006, compared to $435,806 in 2024, indicating a rise of about 98.3%[131] - The segment loss for the equipment and accessories segment was $1,351,716 for the six months ended June 30, 2025, compared to a loss of $523,660 in 2024, indicating a worsening of approximately 157.5%[131] - Shipping and handling costs for the six months ended June 30, 2025, were $28,669, up from $6,581 in 2024[46] Fair Value and Financial Instruments - The fair value of financial instruments approximates their carrying amount as of June 30, 2025, based on the short-term nature of the assets and liabilities[29] - The company utilizes a three-level fair value hierarchy for measuring financial instruments, prioritizing observable inputs[31] Other Financial Metrics - The allowance for credit losses amounted to $30,342 as of June 30, 2025, compared to $108,936 as of December 31, 2024, indicating a significant reduction[24] - Advances from customers increased to $537,723 in the first half of 2025, compared to $251,926 in the same period of 2024, showing a growth of 113%[10]