EX-5.1 2 ea178942ex5-1_retoeco.htm LEGAL OPINION OF MOURANT OZANNES

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

 

18 May, 2023

 

Our ref:   8062784/86366105/4

 

Dear Sir or Madam

 

ReTo Eco-Solutions, Inc. (the Company)

 

We have acted as the Company’s British Virgin Islands legal advisers in connection with the prospectus supplement to the Prospectus (defined below) (the Prospectus Supplement) which has been filed with the US Securities and Exchange Commission (the SEC) under the US Securities Act of 1933 (the Securities Act). The Prospectus Supplement relates to the offering of, in aggregate, 2,000,000 common shares of US$0.01 per share in the Company (the Common Shares).

 

The Company has asked us to provide this opinion in connection with the Prospectus Supplement and the issuance of the Common Shares.

 

1.Documents, searches and definitions

 

1.1We have reviewed a copy of each of the following documents for the purposes of this opinion:

 

(a)the Prospectus Supplement;

 

(b)the registration statement Form F-3, which was declared effective by the SEC on December 9, 2022, in connection with the registration by the Company of up to US$200,000,000 in value of its common shares of US$0.001 par value, per share, debt securities, warrants, rights and units (the Registration Statement);

 

(c)a securities purchase agreement dated as of 18 May, 2023 (the Securities Purchase Agreement) between the Company and each of: Li Xiaoxiong, Gong Haibin, Lin Birong, Kung Kin Mang, Hong Huafeng and Kung Nam Kai (collectively, the Buyers);

 

(d)the Company’s certificate(s) of incorporation (the Certificate of Incorporation) and memorandum and articles of association (the M&A) obtained from the Company Search;

 

(e)the resolutions in writing of the directors of the Company passed on 25 August, 2022 and approving, amongst other things, the Registration Statement (the Previous Director Resolutions);

 

(f)the resolutions in writing of the directors of the Company passed on 17 May 2023 and approving, amongst other things, the issuance of the Common Shares, the Prospectus Supplement and the Securities Purchase Agreement (the Director Resolutions);

 

Mourant Ozannes is a British Virgin Islands partnership

 

BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDONmourant.com

 

 

 

(g)a certificate of the Company’s registered agent dated 8 March 2023 (the Registered Agent’s Certificate);

 

(h)a certified-copy of the Company’s shareholder list dated 15 May 2023 (the Shareholder List); and

 

(i)a certificate of good standing for the Company dated 18 May 2023 issued by the Registrar (the Certificate of Good Standing).

 

1.2We 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 18 May 2023 (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 18 May 2023 (the High Court Search).

 

1.3In 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 2004;

 

(e)Company Records means the Certificate of Incorporation, the M&A, 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;

 

(h)insolvent has the meaning given in the Insolvency Act;

 

(i)non-assessable means, in relation to an Common Share, that the purchase price for which the Company agreed to issue that Common Share has been paid in full to the Company and that no further sum is payable to the Company in respect of that Common Share;

 

(j)Prospectus means the prospectus dated 6 December, 2022 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:

 

2.1each 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;

 

2.2in approving the issuance of the Common Shares in accordance with the Prospectus Supplement and the Securities Purchase Agreement, 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;

 

2.3each 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 Prospectus Supplement and the Securities Purchase Agreement in accordance with the M&A and the Companies Act;

 

2.4the Director Resolutions and the Previous Director Resolutions were duly passed, are in full force and effect and have not been amended, revoked or superseded and any meeting at which those resolutions were passed was duly convened, held and quorate throughout;

 

2.5each 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;

 

2.6each party to the Securities Purchase 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;

 

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2.7the Prospectus Supplement has been duly authorised and approved and the Securities Purchase Agreement has been, or will be, duly authorised and executed by each party to it;

 

2.8the obligations of each party under each Document to which it is party are legal, valid, binding and enforceable under all applicable laws other than the laws of the BVI;

 

2.9there 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, any term of the Prospectus Supplement, the Securities Purchase Agreement or the issuance of the Common Shares;

 

2.10the 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 Common Shares (including the Prospectus Supplement and the Securities Purchase Agreement);

 

2.11the Common Shares have been (or will be) issued in accordance with all applicable laws, the M&A and the terms of the Prospectus Supplement, Registration Statement and the Securities Purchase Agreement, and the Securities Purchase Agreement will be in full force and effective and legal, binding and enforceable under all applicable laws at the time that the Common Shares are issued;

 

2.12the Registration Statement and any required amendment thereto have all become effective under the Securities Act and the Prospectus and any and all supplements to the Prospectus required by applicable laws have been delivered and filed as required by such laws;

 

2.13the 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 Common Shares (including the Prospectus Supplement and the Securities Purchase Agreement) and at the time the Company issued (or issues) the Common Shares to each of the Buyers 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;

 

2.14the Company is not carrying on any financial services business (as defined in the Financial Services Commission Act 2001 (as amended));

 

2.15none of our opinions will be affected by the laws or public policy of any foreign jurisdiction;

 

2.16the choice of the governing law of the Securities Purchase Agreement has been made in good faith;

 

2.17in 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; and

 

2.18the Company Records were, and remain at the date of this opinion, accurate and complete.

 

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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.

 

3.1Status: the Company is registered under the Companies Act, validly exists under the laws of the BVI and is of good standing with the Registrar. The Company is of good standing on the date of issue of the Certificate of Good Standing if 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; and

 

(c)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.

 

3.2Legal validity: the obligations of the Company under the Securities Purchase Agreement are legal, valid, binding and enforceable.

 

3.3Issuance of Common Shares: when (i) the issuance of the Common Shares has been specifically authorised by the Company pursuant to the Director Resolutions and the terms of the issuance and sale of the Common Shares have been duly established in conformity with M&A and the Director Resolutions, and when (i) the Common Shares have been issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the Securities Purchase Agreement, (ii) the Company has received the consideration provided for in the Securities Purchase Agreement and such consideration per share is not less than the par value per Common Share, and (iii) the name of the respective shareholder is entered in the Company’s register of members, such Common Shares will be validly issued, fully paid and non-assessable.

 

4.Qualifications and observations

 

This opinion is subject to the following qualifications and observations.

 

4.1This 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.

 

4.2When the term enforceable or binding is used in paragraph 3 (Opinion) of our opinion, it means that an obligation is of a type that the BVI Courts will enforce. It does not mean that the obligation will necessarily be enforced in all circumstances or in accordance with its terms or that any particular remedy will be available. In particular, but without limitation:

 

(a)enforcement may be prevented by statutory provisions relating to the setting aside of unfair preferences, undervalue transactions, voidable floating charges, extortionate credit transactions and disclaiming of onerous property;

 

(b)enforcement may be limited by general principles of equity (for example, equitable remedies like specific performance and injunction are discretionary and may not be available where damages are considered to be an adequate remedy);

 

(c)enforcement of obligations may be invalidated by reason of duress, fraud, misrepresentation, mistake or undue influence;

 

(d)contractual provisions that require a defaulting party to pay a sum that is out of all proportion to the innocent party’s legitimate interest in the agreement being performed or which seek to punish a defaulting party may be held to be unenforceable on the ground that they constitute penalties;

 

(e)provisions in an agreement or in a BVI company’s memorandum or articles of association that fetter any statutory power may not be enforceable;

 

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(f)the BVI Courts will not enforce the terms of an agreement if:

 

(i)they are, or their performance would be, illegal or contrary to public policy in the BVI or in any other jurisdiction; or

 

(ii)they would conflict with or breach applicable sanctions or exchange control regulations;

 

(g)the BVI Courts may not enforce the terms of an agreement:

 

(i)for the payment or reimbursement of, or indemnity against, the costs of enforcement (actual or contemplated) or of litigation brought before the BVI Courts or foreign courts or where the BVI Courts or foreign courts have themselves made an order for costs;

 

(ii)that constitute an agreement to negotiate or an agreement to agree;

 

(iii)that would involve the enforcement of any foreign revenue, penal or other public laws or an indemnity in respect of any of these laws;

 

(iv)that seek to exclude the jurisdiction of the BVI Courts;

 

(v)that relate to confidentiality (which may be overridden by the requirements of legal process);

 

(vi)that provide that any of the terms of that agreement can only be amended or waived in writing (and not orally or by course of conduct); or

 

(vii)that permit the severance of illegal, invalid or unenforceable terms;

 

(h)a judgment of a BVI Court or a foreign court given in respect of contractual obligations may be held to supersede them (so they may not survive the judgment even if expressed to do so);

 

(i)the BVI Courts may refuse to allow unjust enrichment;

 

(j)claims may become time barred or may be subject to rights and defences of abatement, acquiescence, counter-claim, estoppel, frustration, laches, set-off, waiver and similar defences;

 

(k)the effectiveness of terms that seek to exclude or limit a liability or duty otherwise owed, or to indemnify a person in respect of a loss caused by the act or omission of that person, may be limited by law; and

 

(l)where any party to an agreement is party to it in more than one capacity that party may not be able to enforce obligations owed by it to itself.

 

4.3Where 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.

 

4.4The 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.

 

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4.5The 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;

 

(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.

 

4.6The 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.

 

5.Limitations

 

5.1This opinion is limited to the matters expressly stated in it and it is given solely in connection with the Prospectus Supplement and the issuance of the Common Shares.

 

5.2For 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 (including any agreement), or otherwise referred to, whether in whole or part, in the Prospectus Supplement and we offer no opinion on any such term or document.

 

5.3We 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 Prospectus Supplement under those laws. In particular, we express no opinion as to the meaning or effect of any foreign statutes referred to in the Prospectus Supplement.

 

5.4We 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.

 

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7.Consent

 

7.1This opinion may only be used in connection with the offer and sale of the Common Shares while the Registration Statement is effective.

 

7.2We consent to:

 

(a)the filing of a copy of this opinion as Exhibit 5.1 to the Form 6-K , which will be incorporated by reference into the Company’s registration statement on Form F-3, as amended (File No. 333-267101);; and

 

(b)reference to us being made in the section of the Prospectus Supplement under the heading Legal Matters and elsewhere in the Prospectus Supplement.

 

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

 

/s/ Mourant Ozannes  

Mourant Ozannes

 

 

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