Exhibit 5.1
| Mourant Ozannes 5th Floor Waters Edge Building Meridian Plaza Road Town Tortola, British Virgin Islands
T +1 284 852 1700 F +1 284 852 1799 |
ReTo Eco-Solutions, Inc. c/o Beijing REIT Technology Development Co., Ltd. Building X-702, ,60 Anli Road Chaoyang District Beijing, People’s Republic of China 100101 |
Date: 24 September 2024
Dear Addressee
ReTo Eco-Solutions, Inc. (the Company)
We have acted as the Company’s British Virgin Islands legal advisers in connection with the registration statement on Form F-3 (the Registration Statement) which has been filed on or around the date of this opinion with the US Securities and Exchange Commission (the SEC) under the US Securities Act of 1933 (the Securities Act). The Registration Statement relates to the offering of:
| (a) | up to an aggregate of 14,095,200 class A shares of US$0.10 par value each in the Company (the SPA Shares, each an SPA Share); and |
| (b) | 1,268,568 class A shares of US$0.10 par value each in the Company (the Consulting Shares, each a Consulting Share) to Jaash Investment Limited (JIL). |
The Company has asked us to provide this opinion in connection with the Registration Statement and the issuance of the SPA Shares and the Consulting Shares.
| 1. | Documents, searches and definitions |
| 1.1 | We have reviewed a copy of each of the following documents for the purposes of this opinion: |
| (a) | the Registration Statement; |
| (b) | a securities purchase agreement dated 30 August 2024 (the Securities Purchase Agreement) between the Company and each of the purchasers listed on the signature pages thereto in connection with the issuance of the SPA Shares; |
| (c) | a financial advisory and consulting agreement dated 30 August 2024 (the Consulting Agreement) between the Company and JIL in connection with the issuance of the Consulting Shares to JIL; |
| (d) | the Company’s certificate(s) of incorporation (the Certificate of Incorporation) and memorandum and articles of association as amended and restated on 8 August 2024 (the M&A) obtained from the Company Search; |
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| (e) | the resolutions in writing of the directors of the Company passed on 30 August 2024 (the Director Resolutions); |
| (f) | a certificate of the Company’s registered agent dated 6 September 2024 (the Registered Agent’s Certificate); |
| (g) | a copy of the Company’s register of directors (the Register of Directors) which was affixed to the Registered Agent’s Certificate; |
| (h) | a copy of the Company’s shareholder list dated 20 September 2024 (the Shareholder List) provided by the Company’s transfer agent; and |
| (i) | a certificate of good standing for the Company dated 23 September 2024 issued by the Registrar (the Certificate of Good Standing). |
| 1.2 | We have carried out the following searches (together, the Searches) in relation to the Company: |
| (a) | a search of the records maintained by the Registrar that were on file and available for public inspection on 24 September 2024 (the Company Search); and |
| (b) | a search of the records of proceedings in the BVI Courts available for public inspection contained in the judicial enforcement management system (the electronic register of proceedings) maintained at the registry of the High Court of Justice of the Virgin Islands (the High Court) on 24 September 2024 (the High Court Search). |
| 1.3 | In this opinion: |
| (a) | agreement includes an agreement, deed or other instrument; |
| (b) | BVI means the territory of the British Virgin Islands; |
| (c) | BVI Courts means the Eastern Caribbean Supreme Court, Court of Appeal (Virgin Islands) and the High Court (Civil and Commercial Divisions), and BVI Court means any of them; |
| (d) | Companies Act means the BVI Business Companies Act (Revised Edition) 2020; |
| (e) | Company Records means the Certificate of Incorporation, the M&A, the Register of Directors, the Shareholder List, the Certificate of Good Standing and the Registered Agent’s Certificate; |
| (f) | executed means (unless the context requires otherwise) that a document has been signed, dated and unconditionally delivered; |
| (g) | Insolvency Act means the Insolvency Act, 2003 (as amended); |
| (h) | insolvent has the meaning given in the Insolvency Act; |
| (i) | non-assessable means, in relation to an SPA Share or a Consulting Share, that the purchase price for which the Company agreed to issue that SPA Share or Consulting Share has been paid in full to the Company and that no further sum is payable to the Company in respect of that SPA Share or Consulting Share; |
| (j) | Prospectus means the prospectus that forms part of the Registration Statement; |
| (k) | Registrar means the Registrar of Corporate Affairs appointed under the Companies Act; and |
| (l) | signed means that a document has been duly signed or sealed. |
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| 2. | Assumptions |
We have assumed (and have not independently verified) that:
| 2.1 | each document examined by us: |
| (a) | whether it is an original or copy, is (along with any date, signature, initial, stamp or seal on it) genuine and complete, up-to-date and (where applicable) in full force and effect; and |
| (b) | was (where it was executed after we reviewed it) executed in materially the same form as the last draft of that document examined by us; |
| 2.2 | in approving the issuance of the SPA Shares and Consulting Shares in accordance with the Registration Statement, the Securities Purchase Agreement and the Consulting Agreement (as applicable), each director of the Company: |
| (a) | acted or will act honestly, in good faith and in what the director believed or believes to be the best interests of the Company; |
| (b) | exercised or will exercise the director’s powers as a director for a proper purpose; and |
| (c) | exercised or will exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances; |
| 2.3 | each director of the Company (and any alternate director) has disclosed or will disclose to each other director any interest of that director (or alternate director) in the transactions contemplated by the Registration Statement, the Securities Purchase Agreement and the Consulting Agreement in accordance with the M&A and the Companies Act; |
| 2.4 | the Director Resolutions were duly passed, are in full force and effect and have not been amended, revoked or superseded; |
| 2.5 | each document examined by us that has been signed by the Company: |
| (a) | has been signed by the person(s) authorised by the Company to sign it; |
| (b) | (where any signatory is a body corporate) it has been signed in accordance with that body corporate’s constitution and then current signing authorities; and |
| (c) | has been dated and unconditionally delivered by the Company; |
| 2.6 | each party to the Securities Purchase Agreement and the Consulting Agreement has (or will have): |
| (a) | the capacity and power; |
| (b) | taken or will take all necessary action; and |
| (c) | obtained or made (or will obtain and will make) all necessary agreements, approvals, authorisations, consents, filings, licences, registrations and qualifications (whether as a matter of any law or regulation applicable to it or as a matter of any agreement binding upon it), |
to execute, and perform its obligations under, the Securities Purchase Agreement and the Consulting Agreement;
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| 2.7 | the Registration Statement has been duly authorised and approved and the Securities Purchase Agreement and the Consulting Agreement have been duly authorised and executed by each party to it; |
| 2.8 | there are no documents or arrangements to which the Company is party or resolutions of the Company’s directors or shareholders that conflict with, or would be breached by or which prohibit the Company’s entry into, or performance of its obligations under, the Securities Purchase Agreement, the Consulting Agreement, or the issuance of the SPA Shares or the Consulting Shares; |
| 2.9 | the Company has executed, or will execute each document and has done, or will do, each other act and thing, that it is required to execute or do under each relevant document in connection with the issuance of the SPA Shares and the Consulting Shares (including the Registration Statement, the Securities Purchase Agreement and the Consulting Agreement); |
| 2.10 | the SPA Shares and the Consulting Shares have been authorised, issued and delivered in accordance with (and the terms of the issuance and sale of the SPA Shares and Consulting Shares have been duly established in conformity with) the Director Resolutions, all applicable laws, the M&A, the Securities Purchase Agreement and the Consulting Agreement (as applicable); |
| 2.11 | the Company has received: |
| (a) | the consideration provided for in the Securities Purchase Agreement and such consideration per share is not less than the par value per SPA Share; and |
| (b) | the consideration provided for in the Consulting Agreement and such consideration per share is not less than the par value per Consulting Share; |
| 2.12 | the Securities Purchase Agreement and the Consulting Agreement are in full force and effective and legal, binding and enforceable under all applicable laws at the time that the SPA Shares and the Consulting Shares (as applicable) are issued; |
| 2.13 | the Company was not insolvent and will not become insolvent as a result of executing, or performing its obligations under, any document relating to the issuance of the SPA Shares or the Consulting Shares (including the Registration Statement, the Securities Purchase Agreement and the Consulting Agreement) and at the time the Company issued (or issues) the SPA Shares and the Consulting Shares, no steps had (or will have) been taken, or resolutions passed, to appoint a liquidator of the Company or a receiver in respect of the Company or any of its assets; |
| 2.14 | the Company is not carrying on any financial services business (as defined in the Financial Services Commission Act, 2001 (as amended)); |
| 2.15 | none of our opinions will be affected by the laws or public policy of any foreign jurisdiction; |
| 2.16 | the choice of the governing law of the Securities Purchase Agreement and the Consulting Agreement has been made in good faith; |
| 2.17 | in relation to the Searches: |
| (a) | all public records of the Company we have examined are complete and accurate; |
| (b) | all filings required to be made in relation to the Company with the Registrar have been made and there was no information which had been filed that did not appear on the records of the Company at the time of the Company Search; and |
| (c) | the information disclosed by the Searches was at the time of each search, and continues to be, accurate and complete; |
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| 2.18 | the Company Records were, and remain at the date of this opinion, accurate and complete; and |
| 2.19 | no monies paid to or for the account of any party under the Securities Purchase Agreement or the Consulting Agreement, or property received or disposed of by any party to the Securities Purchase Agreement or the Consulting Agreement, in each case, in connection with the Securities Purchase Agreement or the Consulting Agreement or the performance of the transactions contemplated by the Securities Purchase Agreement or the Consulting Agreement, represent or will represent proceeds of criminal conduct (as defined in the Proceeds of Criminal Conduct Act, 1997 (as amended)). |
| 3. | Opinion |
Subject to the assumptions, observations, qualifications and limitations set out in this opinion, and to matters not disclosed to us, we are of the following opinion.
| 3.1 | Status: the Company is registered under the Companies Act, validly exists under the laws of the BVI and, on the date of issue of the Certificate of Good Standing, is of good standing with the Registrar. |
| 3.2 | Issuance of SPA Shares: the SPA Shares have been validly issued, fully paid and are non-assessable. |
| 3.3 | Issuance of Consulting Shares: the Consulting Shares have been validly issued, fully paid and are non-assessable. |
| 3.4 | High Court Search: the High Court Search does not show any actions or petitions pending against the Company in the BVI Courts at the time of our search. |
| 3.5 | Authorised shares: based solely on our review of the M&A, the Company is authorised to issue an unlimited number of shares designated as follows: |
| (a) | an unlimited number of Class A Shares of US$0.10 par value each; and |
| (b) | up to a maximum of 2,000,000 Class B Shares of US$0.01 par value each, |
or any combination of the above classes of shares.
| 4. | Qualifications and observations |
This opinion is subject to the following qualifications and observations.
| 4.1 | This opinion is subject to all laws relating to bankruptcy, dissolution, insolvency, re-organisation, liquidation, moratorium, court schemes and other laws and legal procedures of general application affecting or relating to the rights of creditors. |
| 4.2 | Where a director fails, in accordance with the Companies Act, to disclose an interest in a transaction entered into by a BVI company, the transaction is voidable. |
| 4.3 | The Company Search will not reveal any document which has not been filed with the Registrar or which was filed but was not registered or did not appear on the Company’s file at the time of the Company Search. |
| 4.4 | The High Court Search will not reveal (among other things) if there are any: |
| (a) | proceedings or appointments that have not been filed or that have been filed but have not been recorded in the High Court’s judicial enforcement management system; |
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| (b) | proceedings commenced prior to 1 January 2000 if no document has been filed since that date; |
| (c) | proceedings against the Company that have been threatened but not filed; |
| (d) | files that have been sealed pursuant to a court order; or |
| (e) | arbitration proceedings in which the Company is a defendant or respondent. |
| 4.5 | The Insolvency Act requires a receiver appointed in respect of a BVI company (or any of its assets) to file a notice of appointment with the Registrar and (if the company is or has been a regulated person (as defined in the Insolvency Act)) with the British Virgin Islands Financial Services Commission. If the receiver fails to do so, the receiver will be guilty of an offence and liable to a fine. This does not, however, invalidate the receiver’s appointment. |
| 4.6 | Under the Companies Act, a company is of good standing if the Registrar is satisfied that it: |
| (a) | is listed on the register of companies maintained by the Registrar; |
| (b) | has paid to the Registrar all fees, annual fees and penalties due and payable; |
| (c) | has, where applicable, filed its annual return (as defined in the Companies Act) in accordance with section 98A of the Companies Act or it is not yet due to file its annual return; and |
| (d) | has filed with the Registrar a copy of its register of directors which is complete (to the satisfaction of the Registrar as to the requisite information relating to each director and is properly filed) or is not yet due to file its register of directors with the Registrar. |
| 5. | Limitations |
| 5.1 | This opinion is limited to the matters expressly stated in it and it is given solely in connection with the Registration Statement and the issuance of the SPA Shares and Consulting Shares. |
| 5.2 | For the purposes of this opinion, we have only examined the documents listed in paragraph 1.1 above and carried out the Searches. We have not examined any term or document incorporated by reference, or otherwise referred to, whether in whole or part, in the Registration Statement, the Securities Purchase Agreement or the Consulting Agreement and we offer no opinion on any such term or document. |
| 5.3 | We have made no investigation of, and express no opinion with respect to, the laws of any jurisdiction other than the BVI or the effect of the Registration Statement, the Securities Purchase Agreement or the Consulting Agreement under those laws. In particular, we express no opinion as to the meaning or effect of any foreign statutes referred to in the Registration Statement, the Securities Purchase Agreement or the Consulting Agreement. |
| Mourant Ozannes is a British Virgin Islands partnership | mourant.com | |
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| 5.4 | We assume no obligation to advise the Company (or any person we give consent to rely on this opinion) in relation to changes of fact or law that may have a bearing on the continuing accuracy of this opinion. |
| 6. | Governing law |
This opinion, and any non-contractual obligations arising out of it, are governed by, and to be interpreted in accordance with, BVI laws in force on the date of this opinion.
| 7. | Consent |
| 7.1 | This opinion may only be used in connection with the offer and sale of the SPA Shares and Consulting Shares while the Registration Statement is effective. |
| 7.2 | We consent to: |
| (a) | the filing of a copy of this opinion as Exhibit 5.1 to the Registration Statement; and |
| (b) | reference to us being made in the section of the Prospectus under the heading Legal Matters and elsewhere in the Prospectus. |
In giving this consent, we do not admit that we are included in the category of persons whose consent is required under section 7 of the Securities Act or the rules and regulations promulgated by the SEC under the Securities Act.
Yours faithfully
Mourant Ozannes (British Virgin Islands)
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