ReTo(US:RETO)2022-05-01 16:00Revenue Performance - Total revenue for the year ended December 31, 2021, was $3.6 million, a decrease of 57% from $8.34 million in 2020[448] - Revenue from third-party customers was $3.32 million, accounting for 92% of total sales in 2021, down from 97% in 2020[448] - The company’s international sales accounted for 16% of total sales in 2021, compared to 33% in 2020[438] - Total revenue decreased by approximately $8.7 million, or 51%, to approximately $8.3 million for the year ended December 31, 2020, compared to $17.0 million for 2019[452] - Revenue from third-party customers decreased by approximately $8.8 million, or 52%, from approximately $16.9 million in 2019 to approximately $8.1 million in 2020[452] - The company's revenue decreased by approximately $4.7 million, or 56.8%, from approximately $8.3 million in 2020 to approximately $3.6 million in 2021[496] Profitability and Loss - Gross profit for 2021 was $386, down 81% from $1.998 million in 2020[448] - Gross profit decreased by approximately $3.2 million, or 62%, to approximately $2.0 million for the year ended December 31, 2020, with a gross profit margin of 24% compared to 31% in 2019[462] - Gross profit for machinery and equipment decreased by approximately $1.7 million to $0.3 million in 2021, with a gross profit margin of 17% compared to 31% in 2020[466] - Gross profit for construction materials improved to approximately $0.1 million in 2021 from a gross loss of approximately $0.1 million in 2020, with a gross profit margin of 6%[469] - The net loss from continuing operations for 2021 was $20.48 million, a 287% increase from a loss of $5.29 million in 2020[448] - The net loss from continuing operations was approximately $20.5 million in 2021, an increase of $15.8 million from a loss of $4.7 million in 2020[486] - Total net loss amounted to approximately $22.1 million in 2021, compared to $12.9 million in 2020[490] Operating Expenses - Total operating expenses increased to $12.39 million in 2021, a 45% increase from $8.57 million in 2020[448] - General and administrative expenses increased to approximately $4.7 million in 2021, representing 129% of total revenues, up from 48% in 2020[473] - Bad debt expenses rose to approximately $2.3 million in 2021, accounting for 63% of total revenues, compared to 11% in 2020[475] - Selling expenses decreased by 24% to approximately $0.8 million in 2021, representing 23% of sales[472] - Operating expenses totaled $8.569 million, representing 103% of sales for the year ended December 31, 2020[1] Financial Position - As of December 31, 2021, the company had a working capital deficit of approximately $3.7 million and cash of approximately $0.5 million[496][498] - Net cash used in operating activities was approximately $2.8 million in fiscal year 2021, primarily due to a net loss from continuing operations of approximately $20.5 million[504] - The company had outstanding bank loans of approximately $2.4 million as of December 31, 2021, with significant repayments due within the next 12 months[497][498] - The company expects to renew all existing bank loans based on past experience and good credit history, but there is substantial doubt about its ability to continue as a going concern for the next 12 months[500] Business Operations and Challenges - The ongoing COVID-19 pandemic has significantly impacted the company's operations and financial results, with uncertainties regarding future revenue and cash flows for fiscal year 2022[444] - The construction industry faced significant challenges due to financial tightness and the impact of COVID-19, leading to project delays and reduced demand[451] - The company discontinued its machinery and equipment manufacturing business on January 2, 2020, and the solid waste processing business on November 12, 2021, which are classified as discontinued operations[519] Shareholder Information - Common Shares have been listed on the Nasdaq Capital Market under the symbol "RETO" since November 29, 2017[633] - The beneficial ownership of Common Shares as of April 29, 2022, shows that directors and executive officers collectively own 6,208,160 shares, representing 18.7% of the total[584] - Hengfang Li, a director, holds 2,396,264 Common Shares, which is 7.2% of the total shares outstanding[584] - REIT International Development (Group) Co., Limited is a major shareholder with 3,903,161 Common Shares, accounting for 11.8% of the total[584] Management and Compensation - The company’s directors and senior management include Hengfang Li as CEO and Chairman, Guangfeng Dai as President and COO, and Xingchun Wang as CFO[540] - The company reported an aggregate of approximately $501,233 in salaries, bonuses, and fees for senior officers in 2021[554] - Mr. Li, the Chairman and CEO, has an annual compensation of RMB 800,000 (approximately $117,000) under his employment agreement[555] - Mr. Dai, the President, is entitled to an annual compensation of RMB 750,000 (approximately $109,000) as per his employment agreement[556] - Mr. Hu, the Chief Technology Officer, receives an annual compensation of RMB 700,000 (approximately $102,000) under his employment agreement[558] Legal and Regulatory Matters - The company is involved in ongoing legal proceedings but believes that any potential liabilities will not materially affect its financial position[622] - The company has not experienced any significant changes since the date of its audited consolidated financial statements[631] Related Party Transactions - Total sales to related parties for the year 2021 amounted to $281,784, an increase from $228,814 in 2020 and $83,972 in 2019, reflecting a growth trend in related party transactions[616] - The company made purchases from related parties totaling $464,784 in 2021, down from $2,876,993 in 2020 and $2,021,934 in 2019, suggesting a reduction in reliance on related party suppliers[617] - The company reported accounts payable to related parties of $10,199 as of December 31, 2021, a decrease from $153,344 in 2020 and $1,485,049 in 2019, indicating improved cash flow management[612] - The company fully collected accounts receivable from related parties as of December 31, 2021, demonstrating effective credit management[608]