Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 000-56511

Rubber Leaf Inc

(Exact name of registrant as specified in its charter)

Nevada

32-0655276

(State or other jurisdiction

of incorporation)

(IRS Employer

Identification No.)

Qixing Road, Weng’ao Industrial Zone,

Chunhu Subdistrict, Fenghua District

Ningbo, Zhejiang, China

(Address of Principal Executive Offices) (Zip Code)

+86-0574-88733850

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2024, the Registrant had 41,109,458 shares of common stock, $0.001 par value, issued and outstanding.

TABLE OF CONTENTS

		PAGE

	Note about Forward-Looking Statements	3

	PART I - FINANCIAL INFORMATION	4

Item 1	Financial Statements	4
	Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	5
	Consolidated Statements of Operations and other comprehensive loss (unaudited) for the three months ended March 31, 2024 and 2023	6
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2024 and 2023	7
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2024 and 2023	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operation	23
Item 3	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4	Controls and Procedures	28

	PART II - OTHER INFORMATION	29

Item 1	Legal Proceedings	29
Item 1A	Risk Factors	29
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3	Defaults Upon Senior Securities	29
Item 4	Mine Safety Disclosures	29
Item 5	Other Information	30
Item 6	Exhibits	30

SIGNATURES		31

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section entitled “Risk Factors,” beginning on page 11 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities & Exchange Commission (“SEC”) on March 27, 2024. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms “RLI,” “Company,” “we,” “us,” and “our” in this document refer to Rubber Leaf Inc, a Nevada corporation.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

RUBBER LEAF INC

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	5

Consolidated Statements of Operations and other comprehensive loss (unaudited) for the three months ended March 31, 2024 and 2023	6

Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2024 and 2023	7

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2024 and 2023	8

Notes to Unaudited Consolidated Financial Statements	9

RUBBER LEAF INC

CONSOLIDATED BALANCE SHEETS

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash	$	197,438		$	41,687
Accounts receivables		128,021			130,230
Accounts receivables – related parties		8,437,022			5,209,169
Accounts receivables		8,437,022			5,209,169
Advances to vendors		75,190			60,361
Advances to vendors and other receivables - related parties		373,761			222,529
Advances to vendors		373,761			222,529
Inventories, net		740,768			760,610
Deposit to vendor - related party		2,077,476			2,113,331
Other current assets		266,601			237,266
Total current asset		12,296,277			8,775,183
Noncurrent assets:
Plant and equipment, net		8,742,954			9,061,473
Intangible asset, net		1,955,540			2,001,113
Total Assets	$	22,994,771		$	19,837,769

LIABILITIES
Current liabilities:
Borrowings	$	3,561,031		$	3,434,980
Borrowings– related party		180,761			183,881
Borrowings		180,761			183,881
Accounts payables		5,702,551			5,789,650
Accounts payables – related parties		10,426,431			7,253,516
Accounts payables		10,426,431			7,253,516
Other payable - related party		3,298,467			2,684,029
Advances from customers		348,052			354,059
Other current liabilities		494,569			375,213
Total current liabilities		24,011,862			20,075,328

Noncurrent liabilities:
Long-term borrowing		-			20,546

Total Liabilities		24,011,862			20,095,874

Commitment and Contingencies		-			-

STOCKHOLDERS’ EQUITY
Preferred stock: 40,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock: 100,000,000 shares authorized, 41,109,458 shares and 41,109,458 shares issued and outstanding as of March 31, 2024 and December 31, 2023		41,110			41,110
Additional paid-in capital		2,799,035			2,799,035
Accumulated deficit		(3,943,011	)		(3,217,901	)
Accumulated other comprehensive income		85,775			119,651
Total stockholders’ equity		(1,017,091	)		(258,105	)
Total Liabilities and Stockholders’ Equity	$	22,994,771		$	19,837,769

The accompanying notes are an integral part of these unaudited consolidated financial statements.

RUBBER LEAF INC

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

	2024			2023
	For the three months ended March 31,
	2024			2023
	(Unaudited)
Sales	$	-		$	897,432
Sales-related parties		2,954,607			1,448,109
Total		2,954,607			2,345,541

Cost of sales		2,960,529			2,278,420
Loss on factory relocation		190,703			-
Total cost of sales		3,151,232			2,278,420
Gross profit		(196,625	)		67,121

Operating Expenses
Selling expenses		8,710			46,867
General & administrative expenses		391,649			194,912
Total operation expenses		400,359			241,779
Loss from operation		(596,984	)		(174,658	)

Other income (expense):
Interest expense		(122,535	)		(40,195	)
Other income, net		(5,591	)		24,588
Total other expenses, net		(128,126	)		(15,607	)

Net loss before income taxes	$	(725,110	)		(190,265	)
Income tax expenses		-			9,055
Net loss	$	(725,110	)		(199,320	)

Foreign currency translation, net of tax		(33,876	)		13,982
Comprehensive loss		(758,986	)		(185,338	)

Earnings per share
Basic and diluted loss per share	$	(0.02	)	$	(0.00	)
Weighted average common shares outstanding		41,109,458			40,976,458

The accompanying notes are an integral part of these unaudited consolidated financial statements.

RUBBER LEAF INC

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Shares		Amount		Shares		Amount		Capital		Deficit)			income (loss)		(Deficit)
	Preferred								Additional		Retained Earnings			Accumulated Other		Total Stockholders’
	Stocks				Common Stocks				Paid-in		(Accumulated			Comprehensive		Equity
	Shares		Amount		Shares		Amount		Capital		Deficit)			income (loss)		(Deficit)
Balance at December 31, 2022		-	$	-		40,976,458	$	40,977	$	2,400,168	$	(1,819,757	)	$	202,483	$	823,871
Net loss		-		-		-		-		-		(199,320	)				(199,320	)
Foreign currency translation, net tax		-		-		-		-		-					13,982		13,982
Balance at March 31, 2023 (Unaudited)		-				40,976,458	$	40,977	$	2,400,168	$	(2,019,077	)	$	216,465	$	638,533

	Preferred								Additional		Retained Earnings			Accumulated Other			Total Stockholders’
	Stocks				Common Stocks				Paid-in		(Accumulated			Comprehensive			Equity
	Shares		Amount		Shares		Amount		Capital		Deficit)			income (loss)			(Deficit)
Balance at December 31, 2023		-	$	-		41,109,458	$	41,110	$	2,799,035	$	(3,217,901	)	$	119,651		$	(258,105	)
Balance , value		-	$	-		41,109,458	$	41,110	$	2,799,035	$	(3,217,901	)	$	119,651		$	(258,105	)
Net loss		-		-		-		-		-		(725,110	)					(725,110	)
Foreign currency translation, net tax		-		-		-		-		-					(33,876	)		(33,876	)
Balance at March 31, 2024 (Unaudited)		-		-		41,109,458	$	41,110	$	2,799,035	$	(3,943,011	)	$	85,775		$	(1,017,091	)
Balance , value		-		-		41,109,458	$	41,110	$	2,799,035	$	(3,943,011	)	$	85,775		$	(1,017,091	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

RUBBER LEAF INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2024			2023
	For the three months ended March 31
	2024			2023
	(Unaudited)
Cash flow from operating activities
Net loss		(725,110	)		(199,320	)
Adjustments to reconcile loss to net cash (used in) provided by operating activities:
Depreciation and amortization		177,207			131,123
Changes in operating assets and liabilities:
Account receivables – related parties		(3,331,319	)		1,346,693
Advances to vendors - related party		(159,713	)		(27,547	)
Advance to vendors		(42,901	)		23,638
Other current assets		(2,041	)		(103,755	)
Inventories		6,969			(335,918	)
Notes payable		-			(671,275	)
Account payable		11,179			(234,869	)
Accounts payable - related parties		3,310,974			(1,037,848	)
Advances from customers		-			148,039
Retainage payable		-			(38,451	)
Other current liabilities		126,016			(78,639	)
Net cash (used in) provided by operating activities		(628,739	)		(1,078,129	)

Cash flow from investing activities
Purchase of equipment and factory construction		-			(24,024	)
Net cash used in investing activities		-			(24,024	)

Cash flow from financing activities
Proceeds from to related parties		620,491			-
New borrowings		3,297,345			492,943
Repayments of borrowings-related party					(69,134	)
Repayments of borrowings		(3,132,467	)		(39,467	)
Net cash provided by financing activities		785,369			384,342

Effect of exchange rate changes		(879	)		2,686
(Decrease) Increase in cash		155,751			(715,126	)
Cash and restricted cash, beginning		41,687			1,369,557
Cash and restricted cash, ending	$	197,438		$	654,431

Supplemental disclosures of cash flow
Interest paid	$	29,224		$	40,215
Income taxes paid	$	-		$	6,910

Noncash investing and financing activities:
Construction in progress additions	$	-		$	993,565

The accompanying notes are an integral part of these consolidated unaudited consolidated financial statements.

RUBBER LEAF INC

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Note 1 - Organization and Description of Business

Rubber Leaf Sealing Products (Zhejiang) Co., Ltd. (the “RLSP”) was established on July 8, 2019, and is located in Fenghua District, Ningbo, Zhejiang province, the People’s Republic of China (“PRC”). It is engaged in the import and export trade, production and sales of synthetic rubber, rubber compound, car window seals, auto parts, etc. of integrated group companies. It has an integrated machinery production plant on PRC. RLSP, a well-known auto parts enterprise, is a first-tier supplier of well-known auto brands such as Dongfeng Motor and French Renault. RLSP has a registered capital of $20 million US dollars to be injected and is a wholly owned by foreign investment.

Rubber Leaf Inc (the “Company” or “RLI”) was incorporated under the law of the State of Nevada on May 18, 2021 by Ms. Xingxiu Hua, the sole shareholder of RLSP. On May 27, 2021, the Company entered a share exchange agreement with Ms. Hua, pursuant to which, the Company issued 40,000,000 shares of common stock to exchange for all of RLSP’s shares. No change of control of RLSP resulted from the execution of the share exchange agreement.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. With respect to the unaudited financial statements as of and for the three months ended March 31, 2024, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended December 31, 2024.

The consolidated financial statements include the accounts of Rubber Leaf Inc, the parent company and its wholly owned subsidiary in China - Rubber Leaf Sealing Products (Zhejiang) Co., Ltd. All intercompany transactions and balances were eliminated in consolidation.

Reclassifications

Certain amounts on the prior year’s consolidated balance sheets, consolidated statements of operations and cash flows were reclassified to conform to current-year presentation, with no effect on ending stockholders’ equity.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. Signiant estimates are used in the collectability of accounts receivable, the useful lives and impairment of property and equipment, the valuation of deferred tax assets, inventories reserve and provisions for income taxes, among others.

Revenue Recognition

The Company early adopted Accounting Standards Update (“ASU”) 2014-09, Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) since its inception (i.e. July 2019), which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company applies the five-step model to sales contracts.

We generate revenue through selling automotive rubber and plastic sealing strips under two models of supply:

Model A (Direct Supply Model)

Following successful on-site inspections by auto OEMs, RLSP secures listing in its directories as a first-tier supplier that directly provides products to the OEM. For example, eGT is an auto OEM, and we serve as their first-tier supplier. eGT directly signs purchase or supply agreements with RLSP. This positions RLSP to independently procure raw materials, manufacture final products and directly deliver finished goods to the warehouses of the auto OEMs. RLSP fulfills its performance obligation upon the delivery of finished products to their warehouses, following a subsequent quality inspection approved by them. Simultaneously, they may request product replacements for disqualified items. Ownership and control of our finished products transfer to customers upon successful inspection and acceptance into an OEM’s warehouse. Revenue recognition occurs upon the transfer of control of our products to a customer, with payments made directly by the OEM.

Model B (Indirect Supply Model)

RLSP receives the purchase orders from our related parties-Shanghai Xinsen and Xinsen Sealing Products (Hangzhou) Co., Ltd (“Hangzhou Xinsen”) (collectively named as “Xinsen Group” for two companies together). The Company’s Chief Executive Officer, President and Chairperson, Ms. Xingxiu Hua, previously held a 90% ownership interest in Shanghai Xinsen and Shanghai Xinsen holds a 70% ownership interest in Hangzhou Xinsen. Effective October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% to 10.5%. The Xinsen Group serves as a certified second-tier supplier for branded Automobile Manufacturers (“Auto Manufacturers”). A second-tier supplier refers to a supplier that provides products to the first-tier suppliers of the OEM. First-tier suppliers could be suppliers of car doors, rubber and plastic components and other automobile parts. Auto Manufacturers issue consolidated purchase orders for complete sets of rubber and plastic auto parts for a particular model to their first-tier suppliers. These first-tier suppliers subcontract the production of rubber and plastic seals to second-tier suppliers. As a second-tier supplier and a facilitator of production rather than a direct manufacturer, Xinsen Group coordinates with us to fulfill orders. Upon receipt of purchase orders, RLSP procures rubber materials from our vendors. The production process involves outsourcing to third-party manufacturers for either work-in-process products (“WIP”) or finished products, based on management’s decisions in response to operational circumstances.

We employ two distinct forms of outsourced processing under Model B.

	1)	RLSP purchases raw materials and subcontracts production to third-party manufacturers for WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs certain manual processes, such as welding and constructing in order to meet the specification of the purchase orders. The completion of the final products is contingent upon a rigorous quality inspection conducted by RLSP, ensuring they meet the highest standards.

	2)	RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will trace and observe each step of production undertaken by third-party manufacturers, with a primary focus on the final quality control step.

The finished products are delivered to the warehouses of Xinsen Group’s upstream first-tier suppliers, either from our locations or those of the third-party manufacturers. Quality inspection is carried out by assigned inspectors from Xinsen Group upon delivery. RLSP fulfills its obligation when the finished products reach Xinsen Group’s customers and pass the qualified quality inspection.

In the event of products that do not pass inspection, the Xinsen Group initiates a product replacement process. Upon confirmation of quality and quantity, and acceptance of finished products into Xinsen Group’s customers’ warehouses, invoices are provided to us as proof of delivery. The date of the invoices signifies the transfer of ownership and control of the finished products under model B from us to Xinsen Group and indirectly to its upstream first-tier suppliers. We recognize at such time as Xinsen Group’s customers accept delivery of products.

Cost of revenue

Cost of revenues is comprised of raw materials consumed, manufacturing costs, third party logistics and distribution costs including packaging, freight, transportation, shipping and handling costs, and inventory adjustment due to the defectives and inventory count.

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and liquid investments with original maturities of three months or less as of the purchase date of such investments.

Concentration risk

The Company maintains cash with banks in the United States of America (“USA”) and PRC. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”).

Financial instruments that potentially subject the Company to significant concentrations of credit risk are cash and cash equivalents and accounts receivable. As of March 31, 2024 and December 31, 2023, $69,224 and $Nil of the Company’s cash held by financial institutions were uninsured, respectively.

Major customers

For the three months ended March 31, 2024 and 2023, the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following:

Schedule of Concentration Risk Percent

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable			Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable
Customer B	$	2,954,607		100	%	$	8,437,022		100	%	$	1,448,109		62	%	$	3,344,349		100	%
Customer A	$	-		-	%	$	-		-	%	$	897,432		38	%	$	-		-	%

●	Customer A: eGT New Energy Automotive Co., Ltd. (“eGT” ), an unrelated party.
●	Customer B: Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”), a related party that sells RLSP’s products to Shanghai Hongyang Sealing Co., Ltd. (“Shanghai Hongyang”) and Wuhu Huichi Auto Parts Co., Ltd. (“Wuhu Huichi”), two unrelated parties of RLSP and the Company, and certified first-tier suppliers of Auto Manufacturers.

Major vendors

For the three months ended March 31, 2024 and 2023, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following:

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable			Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable
Vendor A	$	2,960,164		100	%	$	6,118,302		59	%	$	1,908,106		84	%	$	1,534,522		23	%
Vendor B	$	-		-	%	$	4,290,063		41	%	$	-		-	%	$	4,983,479		76	%
Vendor C	$	-		-	%	$	-		-	%	$	369,389		16	%	$	-		-	%

●	Vendor A: Shanghai Haozong Rubber & Plastic Technology Co., Ltd. (“Shanghai Haozong”), a related party.
●	Vendor B: Shanghai Huaxin Economic and Trade Co., Ltd. (“Shanghai Huaxin”), a related party, purchase amounts and accounts payable balances include retainage payables.
●	Vendor C: Shanghai Yongliansen Import and Export Trading Company (“Yongliansen”), a related party.

Accounts Receivable

Accounts receivables are reported at their net realizable value. Any value adjustments are booked directly against the relevant receivable. We have standard payment terms that generally require payment within approximately 30 to 60 days. Management performs ongoing credit evaluations of its customers. An allowance for potentially uncollectible accounts is provided based on history, economic conditions, and composition of the accounts receivable As of March 31, 2024 and December 31, 2023 no credit risk identified by the management and no allowance for doubtful accounts deemed necessary.

Inventories

Inventories consist of raw materials and finished products, and are stated at the lower of cost or net realizable value. Cost is calculated by applying the weighted -average method and physically applied first-in-first-out method (FIFO) in inventory stock in and out. The Company regularly reviews inventory quantities on hand and writes down to its net realizable value any inventory that it believes to be impaired. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. Once inventory is written down and a new cost basis is established, it is not written back up if demand increases.

Advances to vendors

From time to time, we paid advances to our vendors in order to secure our purchase orders or as retainers required pursuant to various purchase agreements related to production and the 2^nd production lines currently under construction. The advances have no interest bearing, normally settled along with purchase transactions within 60 to 180 days depending on market condition, and around 365 days for construction projects and/or equipment purchase.

Property and equipment

Property and equipment are initially recorded at their historical cost. Repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the following estimated useful lives of the depreciable assets:

	●	Land use rights: 50 years
	●	Leasehold improvement: shorter of the estimate useful life or lease term
	●	Factory and Building: 47 years
	●	Factory equipment: 3-36 years
	●	Auto vehicles: 4 years
	●	Office equipment and furniture: 4-10 years

Construction in progress (“CIP”) includes pre-construction costs, construction costs, interest incurred on financing, amortization of land use right during the construction period, insurance and overhead costs related to construction. Interest of borrowings specific for the construction project and amortization of land use rights are capitalized under CIP when development activities commence, and end when the qualifying assets are ready for their intended use.

Intangible Assets

All land in the PRC is owned by the PRC government and cannot be sold to any individual or company. The Company has recorded the amounts paid to the PRC government when acquired long-term interests of land use rights under intangible assets. This type of arrangement is common for the use of land in the PRC. The Company amortizes land use rights based on the term of the respective land use rights granted, which generally ranges from 15 to 50 years. The land use rights of Collective Lands has unlimited useful lifetime.

Impairment of Long-Lived Assets

The Company’s long-lived assets mainly include property and equipment, land use right recorded under intangible assets and right-of-use assets obtained through operating lease.

In accordance with ASC 360, Property, Plant, and Equipment, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of a long-lived asset, or group of assets, as appropriate, may not be recoverable. If the aggregate undiscounted future net cash flows expected to result from the use and the eventual disposition of a long-lived asset is less than its carrying value, then the Company would recognize an impairment loss based on the excess of the carrying value over the fair value.

For the three months ended March 31, 2024 and December 31, 2023, the Company determined there was no impairment of the long-lived assets.

Advances from customers

From time to time, we receive advances from our customers, which are made normally under sales frame contracts, each sales transaction will be initiated by purchase orders received under the frame contracts. The advances have no interest bearing, normally settled along with purchase/sales transactions within 60 to180 days.

Income Taxes

We are governed by the Income Tax Law of the PRC and the United States. The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The 2017 Tax Reform Act permanently reduces the U.S. corporate income tax rate to a 21% flat rate. In addition, the 2017 Tax Reform Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included in the gross income of the CFCs’ U.S. shareholder income. The tax law in PRC applies an income tax rate of 25% to all enterprises. The Company’s subsidiary does not receive any preferential tax treatment from local government.

Value Added Tax

The Company is subject to value added tax (“VAT”). The applicable VAT rate is 13% for products sold in the PRC for the years of 2023 and 2024. The amount of VAT liability is determined by applying the applicable tax rate to the amount of goods sold (output VAT) less VAT accrued on purchases made with the relevant supporting invoices (input VAT). Sales and purchases are recorded net of VAT (the amount of VAT is excluded from revenues and costs) collected and paid as the Company acts as an agent for the government.

Earnings Per Share

The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

Pursuant to ASC 260-10-55, EPS computations should be based on the facts and circumstances of the transaction for reorganization. The Company calculated its EPS retrospectively akin to a normal share issuance as if the reorganization incurred from the inception.

The Company does not have any potentially dilutive instruments as of March 31, 2024 and December 31, 2023, and, thus, anti-dilution issues are not applicable.

Fair Value of Financial Instruments

The Company’s balance sheets include certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

	●	Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	●	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	●	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2024 and December 31, 2023. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalent, restricted cash, accounts receivable, advances to vendors, inventories, other current assets, accounts payables, advances from customers and other current liabilities. For short term borrowings and notes payable, the Company concluded the carrying values are a reasonable estimate of fair values because of the short period of time between the origination and repayment and as their stated interest rates approximate current rates available.

Operating Leases

The Company adopted ASC 842 since its inception. The Company determines if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on its consolidated balance sheet. Operating lease assets represent its right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using its incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term.

Related Parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Foreign Currency

Amounts reported in the consolidated financial statements are stated in United States dollars, unless stated otherwise. The Company’s subsidiary in the PRC uses the Chinese renminbi (RMB) as their functional currency and the holding company - RLI uses the United States dollar as their functional currency. For subsidiaries that use the local currency as the functional currency, all assets and liabilities are translated to United States dollars using exchange rates in effect at the end of the respective periods and the results of operations have been translated into United States dollars at the weighted average rates during the periods the transactions were recognized. Resulting translation gains or losses are recognized as a component of other comprehensive income (loss).

In accordance with ASC 830, Foreign Currency Matters (ASC 830), the Company translates the assets and liabilities into United States dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from RMB into United States dollar are recorded in stockholders’ equity as part of accumulated other comprehensive income. Further, foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Gains and losses on those foreign currency transactions are included in other income (expense), net for the period in which exchange rates change.

Comprehensive Income (Loss)

The Company accounts for comprehensive income (loss) in accordance with ASC 220, Income Statement-Reporting Comprehensive Income (ASC 220). Under ASC 220, the Company is required to report comprehensive income (loss), which includes net income (loss) as well as other comprehensive income (loss). The only significant component of accumulated other comprehensive income (loss) as of March 31, 2024 and December 31, 2023 is the currency translation adjustment.

Segment Information

Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the executive team, which is comprised of the chief executive officer and the chief financial officer. Based on the financial information presented to and reviewed by the chief operating decision maker in deciding how to allocate the resources and in assessing the performance, the Company has determined that it has two operating and reporting segments based on sales channels – direct supply and indirect supply as of March 31, 2024 and March 31, 2023 and for three months ended.

Accounting Standards Issued but Not Yet Adopted

Income Tax Disclosures - In December 2023, the Financial Accounting Standards Board (FASB) released ASU No. 2023-09, titled “Income Taxes (Topic 740): Enhancements to Income Tax Disclosures” (referred to as “ASU 2023-09”). This new standard mandates the disclosure, on an annual basis, of specific categories in the rate reconciliation and the disaggregation of income taxes paid by jurisdiction. ASU 2023-09 becomes effective for annual reporting periods starting after December 15, 2025. The Company anticipates that the adoption of this standard will not significantly impact its financial position, results of operations, or cash flows. In November 2023, the Financial Accounting Standards Board (FASB) released ASU 2023-07, titled “Enhancements to Reportable Segment Disclosures” (“ASU 2023-07”). This standard necessitates companies to provide additional, more comprehensive details regarding significant expenses of a reportable segment, even if there is only one such segment. Its purpose is to enhance disclosures related to a public entity’s reportable segments. ASU 2023-07 will be effective for fiscal years commencing after December 15, 2023, and for interim periods starting after December 15, 2024, with the option for early adoption. We are presently assessing the potential impact of adopting ASU 2023-07 on our consolidated financial statements.

Note 3 - Inventories

Inventories consisted of raw rubber materials, finished goods of rubber products and others, and are stated at the lower of cost or net realizable value. As of March 31, 2024 and December 31, 2023, inventories consisted of the following:

Schedule of Inventories

	March 31, 2024		December 31, 2023
	(Unaudited)
Raw materials	$	11,602	$	12,761
Finished goods		729,166		747,849
Total		740,768		760,610

Note 4 - Plant and equipment, net

Schedule of Plant and Equipment

	March 31,			December 31,
	2024			2023

Equipment and machinery	$	5,376,884		$	5,469,683
Factory and Building		5,363,059			5,455,619
Furniture and office equipment		4,185			4,257
Auto vehicles		23,244			23,645
Leasehold improvement		116,660			118,673
Minus: Accumulated depreciation and amortization		(2,141,078	)		(2,010,404	)
Property plant and equipment, net	$	8,742,954		$	9,061,473

Upon obtained the right use of land, RLSP started to build the manufacture plant on the land. The Company capitalized the cost in related to the construction, including the interests related to the borrowings, the utilities occurred in the construction, the amortization of land use of right.

On August 5, 2022, RLSP and Ningbo Rongsen Construction Co., Ltd (“Ningbo Rongsen”) signed a Construction Engineering Contract, with an agreed project cost of US $4,931,105 (RMB 35 million). The project was completed on October 25, 2023. Upon receiving the construction project fire protection acceptance issued by the local government, the total construction cost of the factory in the amount of $5,221,922 (RMB 37,064,159) was transferred to plant and equipment, net account, labeled “Factory and Building” on December 25, 2023.

For the equipment used for manufacturing, the depreciation expense is included as part of manufacturing overhead, while the equipment used for general administrative are included in selling, general and administrative expense on the statements of operations.

For the three months ended March 31, 2024 and 2023, the depreciation and amortization expenses were $165,532 and $120,028, respectively.

Note 5 - Intangible asset, net

On October 21, 2020, RLSP entered a purchase contract with the Ninbo government agent, Zhejiang Province, whereby the Company was assigned the land use rights, for 50 years useful life, located in Chunhun Street, in Fenghua city, Zhejiang Province, for a total purchase price of $2,064,554 (RMB 13,729,900 at exchange rate of 0.1504), the information of the land use rights is as followed:

Intangible asset, net consists of the following:

Schedule of Intangible Asset

	March 31,			December 31,
	2024			2023
	(Unaudited)
Land use rights	$	2,102,545		$	2,138,833
Less: Accumulated amortization		(147,005	)		(137,720	)
Intangible asset, net		1,955,540			2,001,113

For the three months ended March 31, 2024 and 2023, the amortization of land use rights $11,675 and $11,095, respectively.

Note 6 - Borrowings

On April 30, 2021, RLSP borrowed $774,401 (RMB 5 million) short-term loan from an unrelated entity guaranteed by an individual person. The loan has a monthly interest rate of 1% with the due date on June 15, 2021. Pursuant to the loan agreement, the interest rate will increase to 2% monthly if RLSP is in default of loan terms and the lender may further obtain 5% of RLSP’s ownership. On November 10, 2021, RLSP extended the maturity date of the loan till April 30, 2022 with the other loan terms remain the same and the two parties have verbally agreed to extend the due date to December 31, 2023. On June 12, 2023, a supplemental agreement entered, pursuant to which, the loans are due on demand, with the other loan terms remain the same. As of March 31, 2024 and December 31, 2023, the loan balance were $263,147 (RMB 1.9 million) and $267,689 (RMB 1.9 million), respectively.

On September 1, 2021, RLSP borrowed $154,832 (RMB 1 million) short-term loan from an unrelated individual. The loan has annual interest rate of 13% with due date on August 31, 2022. RLSP has had several round financing transactions with the individual since then. As of March 31, 2024 and December 31, 2023, the individual loan balances were $64,402 (RMB 0.46 million) and $67,627 (RMB 0.48 million) respectively. RMB460,000 out of $64,402 loan balance has no maturity date. The Company may repay the loan anytime and no interest further on.

On September 1, 2021, RLSP borrowed $247,732 (RMB 1.6 million) short-term loan from an officer of RLSP. The loan has an annual interest rate of 8% with due date on August 31, 2022. RLSP borrowed $152,359 and $Nil during 2023 and 2022, and repaid $28,263 and $69,256 back during 2023 and 2022, respectively. As of March 31, 2024 and December 31, 2023, the loan balances were $180,761 (RMB 1.3 million) and $183,881 (RMB 1.3 million), respectively. The loan was extended to December 31, 2023 on March 11, 2023 and the officer has waived loan interest since September 2022. On September 1, 2023, a supplemental agreement entered, pursuant to which, the loans are due on demand, with the other loan terms remain the same.

On November 30, 2021, RLSP borrowed $314,857 (RMB 2 million) mortgage loan from Zhejiang Yongyin Financial leasing Co., Ltd, a subsidiary of Ningbo Fenghua Rural Commercial Bank Co., Ltd, pledged with machinery and equipment RLSP purchased and fully paid with the market value of approximately RMB2.3 million. The loan has two-year term with due date on November 19, 2023. The loan balances were $214,217 and $288,348 as of March 31, 2024 and December 31, 2023, respectively.

On March 2022, RLSP borrowed $20,901 personal loans from two employees and $10,451 was repaid in April 2022. As of December 31, 2022, the outstanding loan balance was $10,149. The loans bear no interest and due on demand. The loan was fully paid back on March 2023.

On November 18, 2022, RLSP entered a one-year bank loan of $1,884,823 (RMB 13 million) with Fenghua Chunhu branch, Bank of Ningbo. with the annual interest rate of 4.5%. The collateral pledged for the loan was the land use right with appraisal value of $3.44 million (approximately RMB 23.69 million). The loan was extended to September 30, 2023 on September 22, 2023. On September 21, 2023 RLSP entered a three-month bank loan of $1,837,092 (RMB$13 million) with the same bank branch and fully paid back before December 31, 2023. On December 25, 2023, RLSP borrowed $1,837,092 (RMB 13 million) with due date on December 31, 2023. On March 27, 2024, RBLF fully paid back the loan. The loan balances were $Nil and 1,831,553 as of March 31, 2024 and December 31, 2023, respectively.

On September 14, 2023, RLSP borrowed $2,054,513 (RMB 15 million) a short-term loan from unrelated individual for temporarily fund shortage. The loan bears 2.5% monthly interest rate and has its maturity date of November 30, 2023. RLSP repaid back $1,780,578 (RMB 13 million out of RMB15 million) during September 2023. There is no maturity date with balance of $276,997 (RMB 2 million) and $281,777 (RMB 2 million) as of March 31, 2024 and December 31, 2023. RLSP plans to pay off the remaining loans by the end of May 2024.

On October 20 and October 30, 2023, RLSP borrowed $365,245 (RMB 2.6 million) and $353,287 (RMB 2.5 million) short-term loans with a monthly interest rate of 3% from an unrelated individual. On January 16, 2024, RLSP borrowed additional $27,826 (RMB 0.2 million) with a same interest rate of 3% in month. The total loan balance was $734,041 (RMB 5.3 million) and $718,532 (RMB 5.1 million) as of March 31, 2024 and December 31, 2023. RLSP plans to pay off the remaining loans before the end of May 31, 2024.

On March 27, 2024, RLSP borrowed $1,878,235 (RMB 13.5 million) a short-term loan from unrelated individual for temporarily fund shortage. The loan bears 1.2% daily interest rate and on March 29,2024, the loan was partially paid in the amount of $1,252,156 (RMB 9 million) with outstanding balance of $623,242 (RMB 4.5 million). RLSP paid off the remaining balance in April 2024.

On March 25, 2024, RLSP secured approval for a line of credit (“LOC”) from the Industrial and Commercial Bank of China, Ningbo National Gaoxin Branch, with a total amount of $7.75 million (RMB 56 million).RLSP used new factory building and land use right located at Qixing Road, Weng’ao Industrial Zone, Chunhu Subdistrict, Fenghua District, Ningbo, Zhejiang, China as collateral pledged for this LOC. The LOC can be utilized through separate loans and has a term of two years.

Subsequently, on March 28, 2024, RLSP obtained a one-year bank loan of $1,391,285 (RMB 10 million) from the Industrial and Commercial Bank of China, Ningbo National Gaoxin Branch, at an annual interest rate of 3.55%. This loan was drawn from the approved LOC. As of March 31, 2024, the outstanding balance of this loan amounted to $1,384,985 (RMB 10 million).

Interest expense primarily consists of the interest incurred on the bank loans, commercial & individual loans and minor bank service charges. For three months ended March 31, 2024 and 2023 the Company recorded the interest expense of $122,535 and $ 40,195, respectively.

Note 7– Related Party Transactions

Purchase

In order to reduce the purchase cost and enhance the purchase power, the Company purchases the main raw materials from Yongliansen Import and Export Trading Company (“Yongliansen”) and Shanghai Haozong Rubber & Plastic Technology Co., Ltd. (“Shanghai Haozong”), and also purchases equipment and rubber products under indirect supply model from Shanghai Huaxin Economic and Trade Co., Ltd. (“Shanghai Huaxin”) during the three months ended March 31, 2024 and 2023. The Company’s founder holds minor equity interests of the three suppliers directly or indirectly and one of the Company directors, Mr. Jun Tong holds 30% ownership of Shanghai Haozong.

For three months ended March 31, 2024 and 2023, the Company purchased raw materials from Yongliansen (“Vendor C”) in the total amount of $Nil and $ 369,389, respectively. As of March 31, 2024 and December 31, 2023, the Company advanced Yongliansen $233,729 and $219,734, respectively, mainly for raw material purchases. On November 30, 2020, RLSP advanced RMB 15 million or $2,077,476 as a deposit (the “Deposit”) to Yongliansen in order to lock-down our premium customer position among all customers of Yongliansen and maintain a long-term business relationship. The Deposit bears no interest and due on demand. Due to less procurement of raw materials made from Yongliansen in 2022, RLSP requested Yongliansen to refund the Deposit, and Yongliansen agreed to fully refund RLSP by December 31, 2022. On December 15, 2022, RLSP and Yongliansen entered into a Payment Agreement, among which Yongliansen requested to extend the repayment date of the Deposit to April 30, 2024, and RLSP has agreed to grant such extension request. See Note 12 subsequent event for further details.

For three months ended March 31, 2024 and 2023, RLSP purchased $2,960,164 and $ 1,908,106 rubber products from Shanghai Haozong (“Vendor A”), respectively. As of March 31, 2024 and December 31, 2023, $6,118,302 and $2,871,033 accounts payable due to Shanghai Haozong, respectively.

For three months ended March 31, 2024 and 2023, RLSP purchased $Nil and $Nil rubber products and equipment from Shanghai Huaxin (“Vendor B”), respectively. As of March 31, 2024 and December 31, 2023, $4,290,063 and $4,364,105 payable were due to Shanghai Huaxin, respectively.

On December 25, 2021, RLSP signed a Payment Extension Agreement with Shanghai Huaxin regarding outstanding account payable balance, which was amended on August 14, 2022. Under the amended Payment Extension Agreement, RLSP and Shanghai Huaxin both agreed that the $6,835,124 accounts payable as of June 30, 2022 shall be paid based on the agreed-upon payment schedule, of which $746,480 accounts payable should be paid before December 31, 2022. During the six months ended December 31, 2022, the Company has paid RMB 11,350,337 or about USD $1,626,379. For the three months ended March 31, 2023, RLSP has paid RMB1,195,000 or about USD 174,680. The remaining balance of $4,364,105 shall be paid by the end of April 30, 2024 per the Payment Extension Agreement. See Note 12 subsequent event for further details.

Sales under Indirect Supply Model

In order to stabilize customer relationships and maintain long-term orders, we authorized two related parties - Shanghai Xinsen (“Customer B”) and Hangzhou Xinsen (“Customer C”) as our distributors. The Company’s President, Ms. Xingxiu Hua, held 90% ownership of Shanghai Xinsen and Shanghai Xinsen holds 70% ownership of Hangzhou Xinsen, or Ms. Hua owns 63% ownership of Hangzhou Xinsen, respectively. Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen to 10.5%. Xinsen Group is a rubber product trading expert with 20 years of experience in the auto parts market, who charges 1% of the total sales amount before VAT tax as sales commission before September 30, 2022, and subsequently 0.25% effective from October 1, 2022 after the renegotiation between RLSP and Xinsen Group. Sales commission incurred in each period is recorded as part of selling expense of the Company.

For three months ended March 31, 2024 and 2023, RLSP had indirect sales through Xinsen Group that were sold to two certified first-tier suppliers of the Auto Manufacturers $2,954,607 and $ 1,448,109 respectively. As of March 31, 2024 and December 31, 2023, the accounts receivable due from Shanghai Xinsen were and $8,437,022 and $5,209,169 respectively. Since the end of 2021, Shanghai Xinsen received some payments from their customers in the form of bank notes with expiration period between three to six months. However, RLSP does not accept bank notes as payments and agreed to temporarily extend the payment terms to four months from two months after negotiated with Shanghai Xinsen. RLSP held advances from Hangzhou Xinsen in the amounts of $18,066 and $18,378 as of March 31, 2024 and December 31, 2023, respectively.

Others

As of March 31, 2024 and December 31, 2023, the Company’s founder and officer funded the Company and RLSP in the total amount of $3,298,467 and $2,684,029 for its daily operation, respectively. The payable amounts bear no interest rate and due on demand. During the three months ended March 31, 2024 and 2023, the Company transferred cash in the amount of $Nil and $64,749 respectively to RLSP as capital contribution for its daily operation, and reduced the unpaid registered capital of RLSP to $17,772,925 (RMB126 million) in China. The cash transfer has been approved by Agricultural Bank of China, Fenghua Branch, which is authorized by the State Administration of Foreign Exchange (the “SAFE”).

Note 8 – Shareholders’ Equity

RLSP was established on July 8, 2019 with registered capital of $20 million. As of March 31, 2024 and 2023, $2,230,915 and $2,105,915 cash has been transferred from the Company to RLSP as capital contribution, respectively.

From May to July 2023, the Company issued 133,000 shares of common stocks at $3.00 per share pursuant to the private placements with ten individuals for cash. The total $399,000 subscriptions were fully received as of March 31, 2024. The Company relied upon Regulation S of the Securities Act of 1933, as amended, for the sale of these securities. No commissions were paid regarding the share issuance and the share certificates were issued with a Rule 144 restrictive legend.

Note 9 - Commitment and Contingencies

On March 1, 2024, RLSP filed a complaint against Ningbo Rongsen in the Ningbo Intermediate People’s Court of China, challenging the overvalued construction costs of our newly constructed factory. On March 5, 2024, RLSP received a notification from Ningbo Fenghua District People’s Court that the construction project contract dispute case of RLSP vs. Ningbo Rongsen has been filed. The case number is (2024) Zhejiang 0213 Civil Litigation No. 1737.

On August 5, 2022, RLSP and Ningbo Rongsen signed a Construction Engineering Contract, with an agreed project cost of US $4,931,105 (RMB 35 million). The project was completed on October 25, 2023, and subsequently audited by Ningbo Zhongxin Engineering Management Co., Ltd., which initially appraised the project at US $6,519,991 (RMB 46,277,593). Based on this appraisal, RLSP signed a Settlement Payment Agreement with Ningbo Rongsen on January 7, 2024, setting the final settlement price at US $7,171,990 (RMB 50,905,352).

However, a significant discrepancy emerged following a second evaluation by Kexin United Engineering Consulting Co., Ltd., which determined the project cost to be US $5,221,922 (RMB 37,064,159), indicating a discrepancy of 26.32% compared to the price in the Settlement Payment Agreement. Citing a major misunderstanding influenced by the initial overvaluation, RLSP seeks legal action to revoke the Settlement Payment Agreement, in accordance with Article 147 of the Civil Code of the People’s Republic of China, which allows for the revocation under significant misunderstanding.

Our management maintains confidence in our legal standing and is actively pursuing a resolution that will be beneficial to us. As legal proceedings are subject to inherent uncertainties, we cannot predict the outcome of this matter at the time of filing this Quarterly Report.

Note 10 - Income Taxes

The Company, RLI is a Nevada company and subject to the United States federal income tax at a tax rate of 21%. The Company’s subsidiary, RLSP, is incorporated in the PRC and are subject to PRC’s Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, Enterprise Income Taxes (“EIT”) is generally imposed at 25%.

For the three months ended March 31, 2024 and 2023, the provision for income taxes was $Nil and $9,055, respectively. As of March 31, 2024 and December 31, 2023, the income tax payables were $189,251 and $192,518, respectively.

The table below summarizes the difference between the U.S. statutory federal tax rate and the Company’s effective tax rate for three months ended March 31, 2024 and 2023:

Schedule of Federal Effective Tax Rate


	Three months ended March 31,
	2024			2023
	(Unaudited)
U.S. federal income tax rate		21.0	%		21.0	%
Tax rate difference		4.0	%		4.0	%
Tax except		-	%		-	%
Nontaxable items		-	%		-	%
GILTI tax		-	%		-	%
Others		-	%		-	%
Valuation allowance		(25	%)		(29.8	%)
Effective tax rate		-	%		(4.8	%)

For U.S. income tax purposes, the Company has no cumulative undistributed earnings of foreign subsidiary as of March 31, 2024 after acquired RLSP on May 27, 2021. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted to the U.S. in the future.

In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s net CFC tested income over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the three months ended March 31, 2024 and 2023, no GILTI tax expense was incurred.

ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and considered that no provision for uncertainty in income taxes was necessary as of March 31, 2024.

Note 11 - Segment Reporting

We realize revenue primarily through the sale of synthetic rubber, rubber compound, car window seals, auto parts with two sales channels. The Company managed and reviewed its business as two operating and reporting segments: direct supply and indirect supply models.

The business line distribution of the Company’s information as of and for three months ended March 31, 2024 and 2023 as following:

Schedule of Business Line Distribution

	2024			2023
	For three months ended March 31
	2024			2023
	(Unaudited)
Revenue:
Direct supply model	$	-		$	897,432
Indirect supply model		2,954,607			1,448,109
Total		2,954,607			2,345,541
Revenue		2,954,607			2,345,541

Gross profit:
Direct supply model		-	%		6	%
Indirect supply model		0	%		1	%
Total		7	%		3	%
Gross profit		7	%		3	%

Income(loss) from operations:
Direct supply model		(72,840	)		(124,521	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Income(loss) from operations		(499,437	)		(39,793	)

Net income(loss)
Direct supply model		(200,966	)		(140,128	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Net income(loss)		(499,437	)		(39,793	)

	March 31,		December 31,
	2024		2023

Reportable assets
Direct supply model	$	11,938,316	$	10,930,729
Indirect supply model		9,018,688		6,837,818
Corporate		2,037,767		2,069,222
Total	$	22,994,771	$	19,837,769
Assets	$	22,994,771	$	19,837,769

All long-term assets are managed under direct supply model by the chief operating decision maker.

Note 12 - Subsequent Events

On April 1, 2024, RLSP obtained a one-year bank loan of $2.27 million (RMB 20 million) from the Industrial and Commercial Bank of China, Ningbo National Gaoxin Branch, at an annual interest rate of 3.55%, which was drawn from the approved LOC dated on March 25, 2024.

In accordance with a Payment Extension Agreement signed between Shanghai Huaxin (the “Payee”) and RLSP (the “Payer”) on December 25, 2021, and a Repayment Agreement signed between Yongliansen (the “Payer”) and RLSP (the “Payee”) on December 15, 2022. RLSP, Yongliansen, and Shanghai Huaxin signed a Tripartite Payment Agreement (the “TPA”) on May 6, 2024. Under the terms of the TPA, RLSP, Yongliansen, and Shanghai Huaxin have agreed that the advance of $2,113,331 or RMB 15 million from RLSP to Yongliansen will be directly remitted from Yongliansen to Shanghai Huaxin. This remittance serves as payment to settle the payable amount owed to Shanghai Huaxin by RLSP.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Quarterly Report on Form 10-Q. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guarantee, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

Overview

Rubber Leaf Inc was incorporated under the laws of the State of Nevada on May 18, 2021. We acquired Rubber Leaf Sealing Products (Zhejiang) Co., Ltd. on May 27, 2021, through a Share Exchange Agreement between the Company and Xingxiu Hua, our Chief Executive Officer, President and Chairperson and who owned all of the issued and outstanding shares of RLSP. After the acquisition, RLSP became our 100% directly controlled subsidiary and wholly foreign-owned enterprise in China. Currently, all of our business is conducted through RLSP. RLSP was established in Fenghua, Ningo, China and commenced operations in July 2019. RLSP was a wholly-owned subsidiary of Rubber Leaf LLC, a Delaware company organized on June 1, 2018, and Xingxiu Hua was the sole member of Rubber Leaf LLC. In May 2021, all of Rubber Leaf LLC’s ownership interests in RLSP was transferred to its sole member, Xingxiu Hua. RLSP specializes in the production and sales of automotive rubber and plastic sealing strips. We are a well-known auto parts enterprise, and we are also a first-tier supplier of well-known auto brands such as eGT and Volkswagen.

Our principal business address is located at Qixing Road, Weng’ao Industrial Zone, Chunhu Subdistrict, Fenghua District Ningbo, Zhejiang, China.

Components of Our Results of Operations

Sales Revenue

We generate revenue through selling automotive rubber and plastic sealing strips under two models of supply:

Model A (Direct Supply Model)

Model B (Indirect Supply Model)

We employ two distinct forms of outsourced processing under Model B.

	1)	RLSP purchases raw materials and subcontracts production to third-party manufacturers for WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs certain manual processes, such as welding and constructing in order to meet the specification of the purchase orders. The completion of the final products is contingent upon a rigorous quality inspection conducted by RLSP, ensuring they meet the highest standards.

	2)	RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will trace and observe each step of production undertaken by third-party manufacturers, with a primary focus on the final quality control step.

Related Party Revenues

We also generate revenue through Indirect supply model. The Company processes the purchase orders from our related parties, subcontracts them to third party suppliers, who will produce and deliver the finished products to the final customers. Specifically, the Company either purchase raw materials and subcontracts them for manufacturing or procure the products directly in the market to supply our customers depends on the specific requirements of the orders.

Cost of Revenues

Selling Expense

Selling expense principally consist of costs associated with our sales force. Our main selling cost is the commission fee from indirect supply model sales.

General and Administrative Expense

General and administrative expenses include the expenses for commercial support personnel, personnel in executive and other administrative functions, other commercial costs necessary to support the commercial operation of our products, professional fees for legal, consulting and accounting services. General and administrative expenses also include depreciation and impairments of office furniture and equipment.

Interest Expense

Interest expense primarily consists of interest expense incurred under our Revolving Loan Agreement with banks, individual third parties, and minor bank service charges.

Income taxes

We are governed by the Income Tax Law of the PRC, and the United States. We account for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. We record a valuation allowance to offset deferred tax assets if based on the weight of available evidence; it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

Result of Operations

Comparison of the Three Months Ended on March 31, 2024 and 2023

The following table summarizes our results of operations for the three months ended on March 31, 2024 and 2023:

	For three months ended on March 31,
	2024			2023			Changes

Sales	$	-		$	897,432		$	(897,432	)
Sales-related parties		2,954,607			1,448,109			1,506,498
Total		2,954,607			2,345,541			609,066

Cost of sales		2,960,529			2,278,420			682,109
Loss on factory relocation		190,703			-			190,703
Total cost of sales		3,151,232			2,278,420			872,812
Gross profit		(196,625	)		67,121			(263,746	)

Operating Expenses
Selling expenses		8,710			46,867			(38,157	)
General & administrative expenses		391,649			194,912			196,737
Total operation expenses		400,359			241,779			158,580
Loss from operation		(596,984	)		(174,658	)		(422,326	)

Other income (expense):
Interest expense		(122,535	)		(40,195	)		(82,340	)
Other (expense) income, net		(5,591	)		24,588			(30,179	)
Total other expenses, net		(128,126	)		(15,607	)		(112,519	)

Net Income(loss) before income taxes		(725,110	)		(190,265	)		(534,845	)
Income tax expenses		-			9,055			(9,055	)
Net loss	$	(725,110	)	$	(199,320	)	$	(525,790	)

Sales Revenue

Sales revenue for the three months ending on March 31, 2024 and 2023 amounted to $2,954,607 and $2,345,541, respectively, marking an increase of $0.6 million or 26% year over year. This increase was primarily attributed to rising demand resulting from the indirect supply model. The adverse sales impact from Covid-19, compared to the same period in 2023, was mitigated.

RLSP initiated the relocation of its factory to our newly constructed facility in early August 2023 and subsequently obtained the property title certificate in December 2023. However, as of March 31, 2024, production had not yet resumed in the new factory due to the automotive manufacturing industry’s requirement to obtain the QS16949 quality certificate for production. The relocation necessitates recertification, a process typically lasting between two to three months. Following certification, direct supply model clients conduct on-site evaluations for approval before formal production can commence, resulting in decreased sales from the direct supply model for the three months ended March 31, 2024 compared with the same quarter last year. We anticipate RLSP to resume production in June 2024.

Cost of Sales

Cost of sales were $2,960,529 and $2,278,420 for the three months ended March 31, 2024 and 2023, respectively, an increase of $0.87 million, or 38% year over year. RLSP has been suspend its production since July 2023, which leads to $190,703 of loss on factory relocation for three months ended March 31, 2024.

The increasing of cost of sales-production was increased by $682,109, which was mainly due to the increased sales from our related parties for the three months ended March 31, 2024, compared with the corresponding period of last year.

Gross profit

Gross profit (loss) were $(196,625) and $67,121 for the three months ended on March 31, 2024 and 2023, respectively. Our revenue and gross profit margin were presented as below:

	For the three months ended March 31,
	2024			2023			changes
Revenue:
Direct supply model	$	-		$	897,432		$	(897,432	)
Indirect supply model		2,954,607			1,448,109			1,506,498
Total		2,954,607			2,345,541			609,066

Gross profit margin:
Direct supply model		-	%		6	%		(6	%)
Indirect supply model		0	%		1	%		(1	%)
Total		7	%		3	%		4	%

The decrease of our overall gross profit margin, compared with three months ended March 31 2024 and 2023, was mainly attributed to the Company generated less sales from direct supply model which has a higher gross profit margin.

Selling expenses

Selling expenses were $8,710 and $46,867 for three months ended March 31, 2024 and 2023 respectively, with a decrease of 38,157 or 81% year over year. The decrease was mainly associated with the decrease of sales in our direct supply model.

General and administrative cost

General and administrative expense were $391,649 and $194,912 for the three months ended March 31, 2024 and 2023, respectively, increase by $196,737, or 101% year over year. The increase was primarily attributed to the rise in professional service fees during the three months ending March 31, 2024, stemming from the Company’s application for uplisting to Nasdaq Capital Market.

Income from Operations

For the three months ended March 31, 2024, loss from operations was $(596,984), as compared to loss from operations of $(174,658) for the three months ended March 31, 2023, a decrease of $422,326 or 242% year over year. The decrease in income from operations was primarily due to the decreasing in sales from our direct sales model client, eGT.

Net loss

As a result of the factors described above, our net loss was $(725,110) for the three months ended March 31 2024, decreased by $525,790 from the net loss of $(199,320) for the three months ended March 31 2023.

Equity and Capital Resources

As of March 31, 2024, we had an accumulated deficit of $(3,943,011). As of March 31, 2024, we had cash of $197,438 and negative working capital of $(11,715,585), compared to cash of $41,687 and a negative working capital of $(11,300,145) on December 31, 2023. The decrease in the working capital was primarily due to the decreased account receivable from related party of the Company.

On March 25, 2024, RLSP secured approval for a line of credit (“LOC”) from the Industrial and Commercial Bank of China, Ningbo National Gaoxin Branch, with a total amount of $7.75 million (RMB 56 million). RLSP used new factory building and land use right located at Qixing Road, Weng’ao Industrial Zone, Chunhu Subdistrict, Fenghua District, Ningbo, Zhejiang, China as collateral pledged for this LOC. The LOC can be utilized through separate loans and has a term of two years. As of May 14, 2024, RLSP still has RMB 26 million available to apply for using from the LOC.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The critical accounting policies are discussed in further detail in the notes to the unaudited financial statements appearing elsewhere in this 10-Q report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and President, in order to allow timely consideration regarding required disclosures.

The evaluation of our disclosure controls by our principal executive officer included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this report. Our management, including our Chief Executive Officer and President, does not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and President and Chief Financial Officer have concluded that there were material weakness in our internal controls over financial reporting as of March 31, 2024 and they were therefore not as effective as they could be to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The material weakness in our controls and procedure were lack of GAAP knowledge and segregation duties. Management does not believe that any of these material weaknesses materially affected the results and accuracy of its financial statements. However, in view of this discovery of such weaknesses, management has begun a review to improve them.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting us from selling one or more products or engaging in other activities. There were no reportable litigation events and there have been no material developments to litigation events previously disclosed in our SEC filings during the quarter ended March 31, 2024 except as described below.

On March 1, 2024, our wholly owned subsidiary Rubber Leaf Sealing Products (Zhejiang) Co., Ltd. (“RLSP”) filed a complaint against Ningbo Rongsen Construction Co., Ltd (“Ningbo Rongsen”) in the Ningbo Intermediate People’s Court of China, challenging the overvalued construction costs of our newly constructed factory. On March 5, 2024, RLSP received a notification from Ningbo Fenghua District People’s Court that the construction project contract dispute case of RLSP vs. Ningbo Rongsen has been filed. The case number is (2024) Zhejiang 0213 Civil Litigation No. 1737.

However, a significant discrepancy emerged following a second evaluation by Kexin United Engineering Consulting Co., Ltd., which determined the project cost to be US $5,221,922 (RMB 37,064,159), indicating a discrepancy of 26.32% compared to the price in the Settlement Payment Agreement. Citing a major misunderstanding influenced by the initial overvaluation, RLSP is seeking legal remedies to revoke the Settlement Payment Agreement, in accordance with Article 147 of the Civil Code of the People’s Republic of China, which allows for the revocation under significant misunderstanding.

Item 1A. Risk Factors.

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(A) Unregistered Sales of Equity Securities

None.

(B) Use of Proceeds

Not applicable.

(C) Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On December 25, 2021, RLSP signed a Payment Extension Agreement with Shanghai Huaxin regarding the outstanding account payable balance (the “Payment Extension Agreement”), which was amended on August 14, 2022. Under the amended Payment Extension Agreement, RLSP and Shanghai Huaxin agreed that the accounts payable of $6,835,124, accrued as of June 30, 2022, should be paid based on the agreed-upon payment schedule, of which $746,480 accounts payable should be paid before December 31, 2022. During the six months ended December 31, 2022, the Company paid RMB 11,350,337 (or about USD $1,626,379). For the three months ended March 31, 2023, RLSP paid RMB 1,195,000 (or about USD 174,680), leaving the remaining balance of $4,364,105 under the amended Payment Extension Agreement before entry of the TPA (as defined below).

On November 30, 2020, RLSP advanced $2,077,476 (or RMB 15 million) as a deposit (the “Deposit”) to Yongliansen in order to lock-down its premium customer position among all customers of Yongliansen and maintain a long-term business relationship. The Deposit bears no interest and is due on demand. Due to less procurement of raw materials made from Yongliansen in 2022, RLSP requested Yongliansen to refund the Deposit, and Yongliansen agreed to fully refund RLSP by December 31, 2022. On December 15, 2022, RLSP and Yongliansen entered into a Payment Agreement (the “Repayment Agreement”), among which Yongliansen requested to extend the repayment date of the Deposit to April 30, 2024, and RLSP has agreed to grant such extension request.

To consolidate the Payment Extension Agreement and Repayment Agreement, RLSP, Yongliansen, and Shanghai Huaxin entered into a Tripartite Payment Agreement (the “TPA”) on May 6, 2024. Under the terms of the TPA, RLSP, Yongliansen, and Shanghai Huaxin have agreed that the advance of $2,113,331 or RMB 15 million from RLSP to Yongliansen will be directly remitted from Yongliansen to Shanghai Huaxin (the “Remittance”). Pursuant to the TPA, this Remittance shall serve as the full payment to settle the accountable payable balance owed to Shanghai Huaxin by RLSP.

The foregoing description of the TPA is not complete and is qualified in its entirety by reference to the full text thereof, filed herewith as Exhibits 10.2 to this report and incorporated herein by reference.

During the quarter ended March 31, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Exhibit No.		Description
10.1+		English Translation of the Credit Line Approval Letter from Industrial and Commercial Bank of China dated March 25, 2024.
10.2*		English Translation of the Tripartite Payment Agreement between Rubber Leaf Sealing Products (Zhejiang) Co., Ltd., Shanghai Yongliansen Import and Export Co., Ltd., and Shanghai Huaxin Trade Co., Ltd. dated May 6, 2024.
31.1*		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief Executive Officer and President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		Interactive Data Files
101.INS*		XBRL Instance Document
101.SCH*		XBRL Schema Document
101.CAL*		XBRL Calculation Linkbase Document
101.DEF*		XBRL Definition Linkbase Document
101.LAB*		XBRL Label Linkbase Document
101.PRE*		XBRL Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ Incorporated by reference to the Registration Statement on Form S-1/A of the Company as filed with the SEC on April 19, 2024.

* Filed herewith.

** Furnished herewith and not to be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor incorporated by reference into any filing of Rubber Leaf Inc under the Securities Act of 1933, as amended, or the Exchange Act whether made before or after the date of this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RUBBER LEAF INC

Date: May 14, 2024	/s/ Xingxiu Hua
	Xingxiu Hua, Chief Executive Officer

Date: May 14, 2024	/s/ Hua Wang
	Hua Wang, Chief Financial Officer

Exhibit 10.2

Tripartite Payment Agreement

Party A: Rubber Leaf Sealing Products (Zhejiang) Co., Ltd.
Address: No. 1 Qixing Road, Cunhu Subdistrict, Fenghua District, Ningbo, Zhejiang Province

Party B: Shanghai Yongliansen Import and Export Co., Ltd.
Address: Room 1407, West Area, No. 218 Hengfeng Road, Jing’an District, Shanghai

Party C: Shanghai Huaxin Trade Co., Ltd.
Address: Room 1113, Area G, Floor 1, Building 1, No. 588 Zhang Liantang Road, Liantang Town, Qingpu District, Shanghai

WHEREAS:

	1.	Party A and Party B engaged in financial transactions in September 2020 due to the locking of goods payment prices, involving an amount of RMB 15 million.
	2.	Due to the delay in the delivery of goods, Party A, Party B, and Party C agree to sign this tripartite agreement to release all rights and obligations of Party A in this financial transaction.
	3.	Party B agrees to pay the said RMB 15 million to Party C, which shall be considered as having received RMB 15 million from Party A as payment for equipment.

Through equal and voluntary negotiations, the parties agree as follows:

I. PURPOSE OF THE AGREEMENT

The purpose of this agreement is to clarify the handling and responsibilities of the funds involved in the original financial transaction between Party A and Party B, transferring all rights and obligations to be resolved through consultation between Party B and Party C.

II. TRANSFER OF RIGHTS AND OBLIGATIONS

	1.	Party A agrees to waive all claims for payment against Party B and confirms that it will no longer bear any responsibility for how Party B and Party C handle this payment.
	2.	Party B and Party C will independently handle all matters related to the aforementioned funds, including but not limited to payment, use, and reimbursement.

III. WARRANTIES AND DECLARATIONS

	1.	Party A warrants that it has full legal rights to its waiver and that such waiver does not violate any legal regulations.
	2.	Party B and Party C acknowledge that Party A’s waiver is completely voluntary and guarantee that they will exclude any legal responsibility of Party A in future operations.

IV. DISPUTE RESOLUTION

In the event of any dispute arising during the execution of this agreement, the parties shall resolve the dispute through amicable negotiations; if negotiations fail, any party may file a lawsuit in the competent people’s court.

V. MISCELLANEOUS

	1.	This agreement shall take effect from the date of signature and seal by all parties.
	2.	This agreement is executed in three copies, with each party holding one copy, all having equal legal effect.

Party A: Rubber Leaf Sealing Products (Zhejiang) Co., Ltd.
Seal

Party B: Shanghai Yongliansen Import and Export Co., Ltd.
Seal

Party C: Shanghai Huaxin Trade Co., Ltd.
Seal

Date: May 6, 2024

EXHIBIT 31.1

CERTIFICATION

I, Xingxiu Hua, certify that:

1.	I have reviewed this report on Form 10-Q of Rubber Leaf Inc;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Xingxiu Hua
	Xingxiu Hua
	Chief Executive Officer and President (Principal Executive Officer)
	May 14, 2024

EXHIBIT 31.2

CERTIFICATION

I, Hua Wang, certify that:

1.	I have reviewed this report on Form 10-Q of Rubber Leaf Inc;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Hua Wang
	Hua Wang
	Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)
	May 14, 2024

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rubber Leaf Inc (the “Company”) on Form 10-Q for the period ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Xingxiu Hua
	Xingxiu Hua
	Chief Executive Officer and President (Principal Executive Officer)
	May 14, 2024

	/s/ Hua Wang
	Hua Wang
	Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)
	May 14, 2024

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 13, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	000-56511
Entity Registrant Name	Rubber Leaf Inc
Entity Central Index Key	0001893657
Entity Tax Identification Number	32-0655276
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Qixing Road, Weng’ao Industrial Zone
Entity Address, Address Line Two	Chunhu Subdistrict
Entity Address, Address Line Three	Fenghua District
Entity Address, City or Town	Ningbo, Zhejiang
Entity Address, Country	CN
City Area Code	+86
Local Phone Number	0574-88733850
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,109,458

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash	$ 197,438	$ 41,687
Inventories, net	740,768	760,610
Other current assets	266,601	237,266
Total current asset	12,296,277	8,775,183
Noncurrent assets:
Plant and equipment, net	8,742,954	9,061,473
Intangible asset, net	1,955,540	2,001,113
Total Assets	22,994,771	19,837,769
Current liabilities:
Advances from customers	348,052	354,059
Other current liabilities	494,569	375,213
Total current liabilities	24,011,862	20,075,328
Noncurrent liabilities:
Long-term borrowing		20,546
Total Liabilities	24,011,862	20,095,874
Commitment and Contingencies
STOCKHOLDERS’ EQUITY
Preferred stock: 40,000,000 shares authorized, no shares issued and outstanding
Common stock: 100,000,000 shares authorized, 41,109,458 shares and 41,109,458 shares issued and outstanding as of March 31, 2024 and December 31, 2023	41,110	41,110
Additional paid-in capital	2,799,035	2,799,035
Accumulated deficit	(3,943,011)	(3,217,901)
Accumulated other comprehensive income	85,775	119,651
Total stockholders’ equity	(1,017,091)	(258,105)
Total Liabilities and Stockholders’ Equity	22,994,771	19,837,769
Nonrelated Party [Member]
Current assets:
Accounts receivables	128,021	130,230
Advances to vendors	75,190	60,361
Current liabilities:
Borrowings	3,561,031	3,434,980
Accounts payables	5,702,551	5,789,650
Related Party [Member]
Current assets:
Accounts receivables	8,437,022	5,209,169
Advances to vendors	373,761	222,529
Deposit to vendor - related party	2,077,476	2,113,331
Current liabilities:
Borrowings	180,761	183,881
Accounts payables	10,426,431	7,253,516
Other payable - related party	$ 3,298,467	$ 2,684,029

Consolidated Balance Sheets (Parenthetical) - shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	40,000,000	40,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,109,458	41,109,458
Common stock, shares outstanding	41,109,458	41,109,458

Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Sales		$ 897,432
Sales-related parties	2,954,607	1,448,109
Total	2,954,607	2,345,541
Cost of sales	2,960,529	2,278,420
Loss on factory relocation	190,703
Total cost of sales	3,151,232	2,278,420
Gross profit	(196,625)	67,121
Operating Expenses
Selling expenses	8,710	46,867
General & administrative expenses	391,649	194,912
Total operation expenses	400,359	241,779
Loss from operation	(596,984)	(174,658)
Other income (expense):
Interest expense	(122,535)	(40,195)
Other income, net	(5,591)	24,588
Total other expenses, net	(128,126)	(15,607)
Net loss before income taxes	(725,110)	(190,265)
Income tax expenses		9,055
Net loss	(725,110)	(199,320)
Foreign currency translation, net of tax	(33,876)	13,982
Comprehensive loss	$ (758,986)	$ (185,338)
Earnings per share
Basic loss per share	$ (0.02)	$ (0.0)
Diluted loss per share	$ (0.02)	$ (0.0)
Weighted average common shares outstanding, basic	41,109,458	40,976,458
Weighted average common shares outstanding, diluted	41,109,458	40,976,458

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance , value at Dec. 31, 2022	$ 40,977	$ 2,400,168	$ (1,819,757)	$ 202,483	$ 823,871
Balance, shares at Dec. 31, 2022	40,976,458
Net loss			(199,320)		(199,320)
Foreign currency translation, net tax				13,982	13,982
Balance , value at Mar. 31, 2023	$ 40,977	2,400,168	(2,019,077)	216,465	638,533
Balance, shares at Mar. 31, 2023	40,976,458
Balance , value at Dec. 31, 2023	$ 41,110	2,799,035	(3,217,901)	119,651	(258,105)
Balance, shares at Dec. 31, 2023	41,109,458
Net loss			(725,110)		(725,110)
Foreign currency translation, net tax				(33,876)	(33,876)
Balance , value at Mar. 31, 2024	$ 41,110	$ 2,799,035	$ (3,943,011)	$ 85,775	$ (1,017,091)
Balance, shares at Mar. 31, 2024	41,109,458

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Cash flow from operating activities
Net loss	$ (725,110)	$ (199,320)
Adjustments to reconcile loss to net cash (used in) provided by operating activities:
Depreciation and amortization	177,207	131,123
Changes in operating assets and liabilities:
Account receivables – related parties	(3,331,319)	1,346,693
Advances to vendors - related party	(159,713)	(27,547)
Advance to vendors	(42,901)	23,638
Other current assets	(2,041)	(103,755)
Inventories	6,969	(335,918)
Notes payable		(671,275)
Account payable	11,179	(234,869)
Accounts payable - related parties	3,310,974	(1,037,848)
Advances from customers		148,039
Retainage payable		(38,451)
Other current liabilities	126,016	(78,639)
Net cash (used in) provided by operating activities	(628,739)	(1,078,129)
Cash flow from investing activities
Purchase of equipment and factory construction		(24,024)
Net cash used in investing activities		(24,024)
Cash flow from financing activities
Proceeds from to related parties	620,491
New borrowings	3,297,345	492,943
Repayments of borrowings-related party		(69,134)
Repayments of borrowings	(3,132,467)	(39,467)
Net cash provided by financing activities	785,369	384,342
Effect of exchange rate changes	(879)	2,686
(Decrease) Increase in cash	155,751	(715,126)
Cash and restricted cash, beginning	41,687	1,369,557	$ 1,369,557
Cash and restricted cash, ending	197,438	654,431	$ 41,687
Supplemental disclosures of cash flow
Interest paid	29,224	40,215
Income taxes paid		6,910
Noncash investing and financing activities:
Construction in progress additions		$ 993,565

Pay vs Performance Disclosure - USD ($)	3 Months Ended
Pay vs Performance Disclosure - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (725,110)	$ (199,320)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Organization and Description of Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Note 1 - Organization and Description of Business

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

Reclassifications

Use of Estimates

Revenue Recognition

We generate revenue through selling automotive rubber and plastic sealing strips under two models of supply:

Model A (Direct Supply Model)

Model B (Indirect Supply Model)

We employ two distinct forms of outsourced processing under Model B.

	1)	RLSP purchases raw materials and subcontracts production to third-party manufacturers for WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs certain manual processes, such as welding and constructing in order to meet the specification of the purchase orders. The completion of the final products is contingent upon a rigorous quality inspection conducted by RLSP, ensuring they meet the highest standards.

	2)	RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will trace and observe each step of production undertaken by third-party manufacturers, with a primary focus on the final quality control step.

Cost of revenue

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and liquid investments with original maturities of three months or less as of the purchase date of such investments.

Concentration risk

Major customers

For the three months ended March 31, 2024 and 2023, the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following:

Schedule of Concentration Risk Percent

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable			Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable
Customer B	$	2,954,607		100	%	$	8,437,022		100	%	$	1,448,109		62	%	$	3,344,349		100	%
Customer A	$	-		-	%	$	-		-	%	$	897,432		38	%	$	-		-	%

●	Customer A: eGT New Energy Automotive Co., Ltd. (“eGT” ), an unrelated party.
●	Customer B: Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”), a related party that sells RLSP’s products to Shanghai Hongyang Sealing Co., Ltd. (“Shanghai Hongyang”) and Wuhu Huichi Auto Parts Co., Ltd. (“Wuhu Huichi”), two unrelated parties of RLSP and the Company, and certified first-tier suppliers of Auto Manufacturers.

Major vendors

For the three months ended March 31, 2024 and 2023, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following:

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable			Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable
Vendor A	$	2,960,164		100	%	$	6,118,302		59	%	$	1,908,106		84	%	$	1,534,522		23	%
Vendor B	$	-		-	%	$	4,290,063		41	%	$	-		-	%	$	4,983,479		76	%
Vendor C	$	-		-	%	$	-		-	%	$	369,389		16	%	$	-		-	%

●	Vendor A: Shanghai Haozong Rubber & Plastic Technology Co., Ltd. (“Shanghai Haozong”), a related party.
●	Vendor B: Shanghai Huaxin Economic and Trade Co., Ltd. (“Shanghai Huaxin”), a related party, purchase amounts and accounts payable balances include retainage payables.
●	Vendor C: Shanghai Yongliansen Import and Export Trading Company (“Yongliansen”), a related party.

Accounts Receivable

Inventories

Advances to vendors

Property and equipment

	●	Land use rights: 50 years
	●	Leasehold improvement: shorter of the estimate useful life or lease term
	●	Factory and Building: 47 years
	●	Factory equipment: 3-36 years
	●	Auto vehicles: 4 years
	●	Office equipment and furniture: 4-10 years

Intangible Assets

Impairment of Long-Lived Assets

The Company’s long-lived assets mainly include property and equipment, land use right recorded under intangible assets and right-of-use assets obtained through operating lease.

For the three months ended March 31, 2024 and December 31, 2023, the Company determined there was no impairment of the long-lived assets.

Advances from customers

Income Taxes

Value Added Tax

Earnings Per Share

The Company does not have any potentially dilutive instruments as of March 31, 2024 and December 31, 2023, and, thus, anti-dilution issues are not applicable.

Fair Value of Financial Instruments

	●	Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	●	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	●	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Operating Leases

Related Parties

Foreign Currency

Comprehensive Income (Loss)

Segment Information

Accounting Standards Issued but Not Yet Adopted

Inventories

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

Inventories

Note 3 - Inventories

Schedule of Inventories

	March 31, 2024		December 31, 2023
	(Unaudited)
Raw materials	$	11,602	$	12,761
Finished goods		729,166		747,849
Total		740,768		760,610

Plant and equipment, net

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Plant and equipment, net

Note 4 - Plant and equipment, net

Schedule of Plant and Equipment

	March 31,			December 31,
	2024			2023

Equipment and machinery	$	5,376,884		$	5,469,683
Factory and Building		5,363,059			5,455,619
Furniture and office equipment		4,185			4,257
Auto vehicles		23,244			23,645
Leasehold improvement		116,660			118,673
Minus: Accumulated depreciation and amortization		(2,141,078	)		(2,010,404	)
Property plant and equipment, net	$	8,742,954		$	9,061,473

For the three months ended March 31, 2024 and 2023, the depreciation and amortization expenses were $165,532 and $120,028, respectively.

Intangible asset, net

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible asset, net

Note 5 - Intangible asset, net

Intangible asset, net consists of the following:

Schedule of Intangible Asset

	March 31,			December 31,
	2024			2023
	(Unaudited)
Land use rights	$	2,102,545		$	2,138,833
Less: Accumulated amortization		(147,005	)		(137,720	)
Intangible asset, net		1,955,540			2,001,113

For the three months ended March 31, 2024 and 2023, the amortization of land use rights $11,675 and $11,095, respectively.

Borrowings

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Borrowings

Note 6 - Borrowings

Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

Note 7– Related Party Transactions

Purchase

Sales under Indirect Supply Model

Others

Shareholders’ Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Shareholders’ Equity

Note 8 – Shareholders’ Equity

Commitment and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitment and Contingencies

Note 9 - Commitment and Contingencies

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 - Income Taxes

The table below summarizes the difference between the U.S. statutory federal tax rate and the Company’s effective tax rate for three months ended March 31, 2024 and 2023:

Schedule of Federal Effective Tax Rate


	Three months ended March 31,
	2024			2023
	(Unaudited)
U.S. federal income tax rate		21.0	%		21.0	%
Tax rate difference		4.0	%		4.0	%
Tax except		-	%		-	%
Nontaxable items		-	%		-	%
GILTI tax		-	%		-	%
Others		-	%		-	%
Valuation allowance		(25	%)		(29.8	%)
Effective tax rate		-	%		(4.8	%)

Segment Reporting

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Reporting

Note 11 - Segment Reporting

The business line distribution of the Company’s information as of and for three months ended March 31, 2024 and 2023 as following:

Schedule of Business Line Distribution

	2024			2023
	For three months ended March 31
	2024			2023
	(Unaudited)
Revenue:
Direct supply model	$	-		$	897,432
Indirect supply model		2,954,607			1,448,109
Total		2,954,607			2,345,541
Revenue		2,954,607			2,345,541

Gross profit:
Direct supply model		-	%		6	%
Indirect supply model		0	%		1	%
Total		7	%		3	%
Gross profit		7	%		3	%

Income(loss) from operations:
Direct supply model		(72,840	)		(124,521	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Income(loss) from operations		(499,437	)		(39,793	)

Net income(loss)
Direct supply model		(200,966	)		(140,128	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Net income(loss)		(499,437	)		(39,793	)

	March 31,		December 31,
	2024		2023

Reportable assets
Direct supply model	$	11,938,316	$	10,930,729
Indirect supply model		9,018,688		6,837,818
Corporate		2,037,767		2,069,222
Total	$	22,994,771	$	19,837,769
Assets	$	22,994,771	$	19,837,769

All long-term assets are managed under direct supply model by the chief operating decision maker.

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Events

Note 12 - Subsequent Events

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Reclassifications

Reclassifications

Use of Estimates

Use of Estimates

Revenue Recognition

Revenue Recognition

We generate revenue through selling automotive rubber and plastic sealing strips under two models of supply:

Model A (Direct Supply Model)

Model B (Indirect Supply Model)

We employ two distinct forms of outsourced processing under Model B.

	1)	RLSP purchases raw materials and subcontracts production to third-party manufacturers for WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs certain manual processes, such as welding and constructing in order to meet the specification of the purchase orders. The completion of the final products is contingent upon a rigorous quality inspection conducted by RLSP, ensuring they meet the highest standards.

	2)	RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will trace and observe each step of production undertaken by third-party manufacturers, with a primary focus on the final quality control step.

Cost of revenue

Cost of revenue

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and liquid investments with original maturities of three months or less as of the purchase date of such investments.

Concentration risk

Concentration risk

Major customers

For the three months ended March 31, 2024 and 2023, the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following:

Schedule of Concentration Risk Percent

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable			Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable
Customer B	$	2,954,607		100	%	$	8,437,022		100	%	$	1,448,109		62	%	$	3,344,349		100	%
Customer A	$	-		-	%	$	-		-	%	$	897,432		38	%	$	-		-	%

●	Customer A: eGT New Energy Automotive Co., Ltd. (“eGT” ), an unrelated party.
●	Customer B: Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”), a related party that sells RLSP’s products to Shanghai Hongyang Sealing Co., Ltd. (“Shanghai Hongyang”) and Wuhu Huichi Auto Parts Co., Ltd. (“Wuhu Huichi”), two unrelated parties of RLSP and the Company, and certified first-tier suppliers of Auto Manufacturers.

Major vendors

For the three months ended March 31, 2024 and 2023, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following:

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable			Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable
Vendor A	$	2,960,164		100	%	$	6,118,302		59	%	$	1,908,106		84	%	$	1,534,522		23	%
Vendor B	$	-		-	%	$	4,290,063		41	%	$	-		-	%	$	4,983,479		76	%
Vendor C	$	-		-	%	$	-		-	%	$	369,389		16	%	$	-		-	%

●	Vendor A: Shanghai Haozong Rubber & Plastic Technology Co., Ltd. (“Shanghai Haozong”), a related party.
●	Vendor B: Shanghai Huaxin Economic and Trade Co., Ltd. (“Shanghai Huaxin”), a related party, purchase amounts and accounts payable balances include retainage payables.
●	Vendor C: Shanghai Yongliansen Import and Export Trading Company (“Yongliansen”), a related party.

Accounts Receivable

Accounts Receivable

Inventories

Inventories

Advances to vendors

Advances to vendors

Property and equipment

Property and equipment

	●	Land use rights: 50 years
	●	Leasehold improvement: shorter of the estimate useful life or lease term
	●	Factory and Building: 47 years
	●	Factory equipment: 3-36 years
	●	Auto vehicles: 4 years
	●	Office equipment and furniture: 4-10 years

Intangible Assets

Intangible Assets

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company’s long-lived assets mainly include property and equipment, land use right recorded under intangible assets and right-of-use assets obtained through operating lease.

For the three months ended March 31, 2024 and December 31, 2023, the Company determined there was no impairment of the long-lived assets.

Advances from customers

Advances from customers

Income Taxes

Income Taxes

Value Added Tax

Value Added Tax

Earnings Per Share

Earnings Per Share

The Company does not have any potentially dilutive instruments as of March 31, 2024 and December 31, 2023, and, thus, anti-dilution issues are not applicable.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

	●	Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	●	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	●	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Operating Leases

Operating Leases

Related Parties

Related Parties

Foreign Currency

Foreign Currency

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Segment Information

Segment Information

Accounting Standards Issued but Not Yet Adopted

Accounting Standards Issued but Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Schedule of Concentration Risk Percent

For the three months ended March 31, 2024 and 2023, the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following:

Schedule of Concentration Risk Percent

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable			Amount		% of Total Revenue			Accounts Receivable		% of Total Accounts Receivable
Customer B	$	2,954,607		100	%	$	8,437,022		100	%	$	1,448,109		62	%	$	3,344,349		100	%
Customer A	$	-		-	%	$	-		-	%	$	897,432		38	%	$	-		-	%

●	Customer A: eGT New Energy Automotive Co., Ltd. (“eGT” ), an unrelated party.
●	Customer B: Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”), a related party that sells RLSP’s products to Shanghai Hongyang Sealing Co., Ltd. (“Shanghai Hongyang”) and Wuhu Huichi Auto Parts Co., Ltd. (“Wuhu Huichi”), two unrelated parties of RLSP and the Company, and certified first-tier suppliers of Auto Manufacturers.

Major vendors

For the three months ended March 31, 2024 and 2023, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following:

	Three months ended March 31, 2024					As of March 31, 2024					Three months ended March 31, 2023					As of March 31, 2023
	Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable			Amount		% of Total Purchase			Accounts payable		% of Total Accounts Payable
Vendor A	$	2,960,164		100	%	$	6,118,302		59	%	$	1,908,106		84	%	$	1,534,522		23	%
Vendor B	$	-		-	%	$	4,290,063		41	%	$	-		-	%	$	4,983,479		76	%
Vendor C	$	-		-	%	$	-		-	%	$	369,389		16	%	$	-		-	%

●	Vendor A: Shanghai Haozong Rubber & Plastic Technology Co., Ltd. (“Shanghai Haozong”), a related party.
●	Vendor B: Shanghai Huaxin Economic and Trade Co., Ltd. (“Shanghai Huaxin”), a related party, purchase amounts and accounts payable balances include retainage payables.
●	Vendor C: Shanghai Yongliansen Import and Export Trading Company (“Yongliansen”), a related party.

Inventories (Tables)

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

	March 31, 2024		December 31, 2023
	(Unaudited)
Raw materials	$	11,602	$	12,761
Finished goods		729,166		747,849
Total		740,768		760,610

Plant and equipment, net (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of Plant and Equipment

Schedule of Plant and Equipment

	March 31,			December 31,
	2024			2023

Equipment and machinery	$	5,376,884		$	5,469,683
Factory and Building		5,363,059			5,455,619
Furniture and office equipment		4,185			4,257
Auto vehicles		23,244			23,645
Leasehold improvement		116,660			118,673
Minus: Accumulated depreciation and amortization		(2,141,078	)		(2,010,404	)
Property plant and equipment, net	$	8,742,954		$	9,061,473

Intangible asset, net (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Asset

Intangible asset, net consists of the following:

Schedule of Intangible Asset

	March 31,			December 31,
	2024			2023
	(Unaudited)
Land use rights	$	2,102,545		$	2,138,833
Less: Accumulated amortization		(147,005	)		(137,720	)
Intangible asset, net		1,955,540			2,001,113

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Schedule of Federal Effective Tax Rate

The table below summarizes the difference between the U.S. statutory federal tax rate and the Company’s effective tax rate for three months ended March 31, 2024 and 2023:

Schedule of Federal Effective Tax Rate


	Three months ended March 31,
	2024			2023
	(Unaudited)
U.S. federal income tax rate		21.0	%		21.0	%
Tax rate difference		4.0	%		4.0	%
Tax except		-	%		-	%
Nontaxable items		-	%		-	%
GILTI tax		-	%		-	%
Others		-	%		-	%
Valuation allowance		(25	%)		(29.8	%)
Effective tax rate		-	%		(4.8	%)

Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Schedule of Business Line Distribution

The business line distribution of the Company’s information as of and for three months ended March 31, 2024 and 2023 as following:

Schedule of Business Line Distribution

	2024			2023
	For three months ended March 31
	2024			2023
	(Unaudited)
Revenue:
Direct supply model	$	-		$	897,432
Indirect supply model		2,954,607			1,448,109
Total		2,954,607			2,345,541
Revenue		2,954,607			2,345,541

Gross profit:
Direct supply model		-	%		6	%
Indirect supply model		0	%		1	%
Total		7	%		3	%
Gross profit		7	%		3	%

Income(loss) from operations:
Direct supply model		(72,840	)		(124,521	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Income(loss) from operations		(499,437	)		(39,793	)

Net income(loss)
Direct supply model		(200,966	)		(140,128	)
Indirect supply model		(24,707	)		(10,344	)
Corporate		(499,437	)		(39,793	)
Net income(loss)		(499,437	)		(39,793	)

	March 31,		December 31,
	2024		2023

Reportable assets
Direct supply model	$	11,938,316	$	10,930,729
Indirect supply model		9,018,688		6,837,818
Corporate		2,037,767		2,069,222
Total	$	22,994,771	$	19,837,769
Assets	$	22,994,771	$	19,837,769

Organization and Description of Business (Details Narrative) - USD ($) $ in Millions	May 27, 2021	Jul. 08, 2019
Defined Benefit Plan Disclosure [Line Items]
Registered capital amount		$ 20
Ms. Xingxiu Hua [Member] \| Share Exchange Agreement [Member]
Defined Benefit Plan Disclosure [Line Items]
Number of shares issued	40,000,000

Schedule of Concentration Risk Percent (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Product Information [Line Items]
Revenues	$ 2,954,607	$ 2,345,541
Purchase	2,960,529	2,278,420
Vendor A [Member]
Product Information [Line Items]
Accounts payable	6,118,302		$ 2,871,033
Vendor B [Member]
Product Information [Line Items]
Accounts payable	4,290,063		$ 4,364,105
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Product Information [Line Items]
Revenues	$ 2,954,607	$ 1,448,109
Concentrationr risk, percentage	100.00%	62.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Product Information [Line Items]
Revenues		$ 897,432
Concentrationr risk, percentage		38.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Product Information [Line Items]
Concentrationr risk, percentage	100.00%	100.00%
Accounts receivable	$ 8,437,022	$ 3,344,349
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Product Information [Line Items]
Concentrationr risk, percentage
Accounts receivable
Cost of Goods and Service, Product and Service Benchmark [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentrationr risk, percentage	100.00%	84.00%
Purchase	$ 2,960,164	$ 1,908,106
Cost of Goods and Service, Product and Service Benchmark [Member] \| Supplier Concentration Risk [Member] \| Vendor B [Member]
Product Information [Line Items]
Concentrationr risk, percentage
Purchase
Cost of Goods and Service, Product and Service Benchmark [Member] \| Supplier Concentration Risk [Member] \| Vendor C [Member]
Product Information [Line Items]
Concentrationr risk, percentage		16.00%
Purchase		$ 369,389
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentrationr risk, percentage	59.00%	23.00%
Accounts payable	$ 6,118,302	$ 1,534,522
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor B [Member]
Product Information [Line Items]
Concentrationr risk, percentage	41.00%	76.00%
Accounts payable	$ 4,290,063	$ 4,983,479
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor C [Member]
Product Information [Line Items]
Concentrationr risk, percentage
Accounts payable

Summary of Significant Accounting Policies (Details Narrative)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($) Segment	Mar. 31, 2023 Segment	Dec. 31, 2023 USD ($)	Mar. 31, 2024 CNY (¥)	Oct. 21, 2020
Cash insured amount	$ 250,000			¥ 500,000
Cash and restricted cash uninsured \| $	69,224
Impairment of long lived assets \| $	$ 0		$ 0
PRC income tax rate	21.00%	21.00%
Value added tax rate	13.00%		13.00%
Number of operating segments \| Segment	2	2
Number of reporting segments \| Segment	2	2
State Administration of Taxation, China [Member]
PRC income tax rate	25.00%
Land Use Rights [Member]
Intangible asset useful life					50 years
Minimum [Member] \| Land Use Rights [Member]
Intangible asset useful life	15 years			15 years
Maximum [Member] \| Land Use Rights [Member]
Intangible asset useful life	50 years			50 years
Land Use Rights [Member]
Property and equipment, useful life	50 years			50 years
Leasehold Improvements [Member]
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration]	us-gaap:UsefulLifeTermOfLeaseMember			us-gaap:UsefulLifeTermOfLeaseMember
Building [Member]
Property and equipment, useful life	47 years			47 years
Equipment [Member] \| Minimum [Member]
Property and equipment, useful life	3 years			3 years
Equipment [Member] \| Maximum [Member]
Property and equipment, useful life	36 years			36 years
Vehicles [Member]
Property and equipment, useful life	4 years			4 years
Office Equipment [Member] \| Minimum [Member]
Property and equipment, useful life	4 years			4 years
Office Equipment [Member] \| Maximum [Member]
Property and equipment, useful life	10 years			10 years
Shanghai Xinsen Import and Export Co Ltd [Member] \| Ms. Xingxiu Hua [Member]
Ownership percentage	90.00%			90.00%
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] \| Ms. Xingxiu Hua [Member]
Ownership percentage	90.00%			90.00%
Ownership percentage description	Effective October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% to 10.5%.
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] \| Shanghai Xinsen [Member]
Ownership percentage	70.00%			70.00%

Schedule of Inventories (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 11,602	$ 12,761
Finished goods	729,166	747,849
Total	$ 740,768	$ 760,610

Schedule of Plant and Equipment (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Equipment and machinery	$ 5,376,884	$ 5,469,683
Factory and Building	5,363,059	5,455,619
Furniture and office equipment	4,185	4,257
Auto vehicles	23,244	23,645
Leasehold improvement	116,660	118,673
Minus: Accumulated depreciation and amortization	(2,141,078)	(2,010,404)
Property plant and equipment, net	$ 8,742,954	$ 9,061,473

Plant and equipment, net (Details Narrative)							3 Months Ended
Plant and equipment, net (Details Narrative)	Jan. 07, 2024 USD ($)	Jan. 07, 2024 CNY (¥)	Dec. 25, 2023 USD ($)	Dec. 25, 2023 CNY (¥)	Aug. 05, 2022 USD ($)	Aug. 05, 2022 CNY (¥)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)
Property, Plant and Equipment [Line Items]
Project cost	$ 5,221,922	¥ 37,064,159			$ 4,931,105	¥ 35,000,000
Construction costs	$ 7,171,990	¥ 50,905,352			$ 6,519,991	¥ 46,277,593
Depreciation and amortization expenses							$ 165,532	$ 120,028
Factory and Building [Member]
Property, Plant and Equipment [Line Items]
Construction costs			$ 5,221,922	¥ 37,064,159

Schedule of Intangible Asset (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Land use rights	$ 2,102,545	$ 2,138,833
Less: Accumulated amortization	(147,005)	(137,720)
Intangible asset, net	$ 1,955,540	$ 2,001,113

Intangible asset, net (Details Narrative) - Land Use Rights [Member]			3 Months Ended
	Oct. 21, 2020 USD ($)	Oct. 21, 2020 CNY (¥)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)
Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life	50 years	50 years
Finite-lived intangible assets acquired	$ 2,064,554	¥ 13,729,900
Exchange rate	0.1504	0.1504
Amortization of intangible assets			$ 11,675	$ 11,095

Borrowings (Details Narrative)																1 Months Ended			3 Months Ended			12 Months Ended
Borrowings (Details Narrative)	Mar. 29, 2024 USD ($)	Mar. 29, 2024 CNY (¥)	Mar. 28, 2024 USD ($)	Mar. 27, 2024 USD ($)	Mar. 25, 2024 USD ($)	Mar. 25, 2024 CNY (¥)	Jan. 16, 2024 USD ($)	Oct. 30, 2023 USD ($)	Sep. 14, 2023 USD ($)	Mar. 11, 2023	Nov. 18, 2022 USD ($)	Nov. 30, 2021 USD ($)	Nov. 10, 2021	Sep. 01, 2021 USD ($)	Apr. 30, 2021 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2023 CNY (¥)	Apr. 30, 2022 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2024 CNY (¥)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Mar. 31, 2024 CNY (¥)	Mar. 28, 2024 CNY (¥)	Mar. 27, 2024 CNY (¥)	Jan. 16, 2024 CNY (¥)	Dec. 31, 2023 CNY (¥)	Dec. 25, 2023 USD ($)	Dec. 25, 2023 CNY (¥)	Oct. 30, 2023 CNY (¥)	Oct. 20, 2023 USD ($)	Oct. 20, 2023 CNY (¥)	Sep. 21, 2023 USD ($)	Sep. 21, 2023 CNY (¥)	Sep. 14, 2023 CNY (¥)	Nov. 18, 2022 CNY (¥)	Mar. 31, 2022 USD ($)	Nov. 30, 2021 CNY (¥)	Sep. 01, 2021 CNY (¥)	Apr. 30, 2021 CNY (¥)
Short-Term Debt [Line Items]
Repayment of loan																			$ 3,132,467		$ 39,467
Interest expense																			122,535		40,195
Term Loan [Member] \| Unrelated Individual [Member]
Short-Term Debt [Line Items]
Borrowings, face amount				$ 1,878,235			$ 27,826	$ 353,287	$ 2,054,513					$ 154,832	$ 774,401											¥ 13,500,000	¥ 200,000				¥ 2,500,000	$ 365,245	¥ 2,600,000			¥ 15,000,000				¥ 1,000,000	¥ 5,000,000
Borrowings, interest rate				1.20%			3.00%	3.00%	2.50%					13.00%	1.00%
Borrowings, maturity date									Nov. 30, 2023				Dec. 31, 2023	Aug. 31, 2022	Jun. 15, 2021
Interest rate term															Pursuant to the loan agreement, the interest rate will increase to 2% monthly if RLSP is in default of loan terms and the lender may further obtain 5% of RLSP’s ownership.
Borrowings, face amount																			276,997			$ 281,777		¥ 2,000,000				¥ 2,000,000
Repayment of loan	$ 1,252,156	¥ 9,000,000														$ 1,780,578	¥ 13,000,000
Repayment of loan \| ¥																	¥ 15,000,000
Outstanding balance payoff remaining	$ 623,242	¥ 4,500,000
Term Loan [Member] \| Officer [Member]
Short-Term Debt [Line Items]
Borrowings, face amount														$ 247,732								152,359																		¥ 1,600,000
Borrowings, interest rate														8.00%
Borrowings, maturity date										Dec. 31, 2023				Aug. 31, 2022
Repayment of loan																						28,263	69,256
April 30, 2021 Term Loan [Member] \| Unrelated Individual [Member]
Short-Term Debt [Line Items]
Borrowings, face amount																			263,147			267,689		1,900,000				1,900,000
September 1, 2021 Term Loan [Member] \| Unrelated Individual [Member]
Short-Term Debt [Line Items]
Borrowings, face amount																			64,402			67,627		460,000				480,000
September 1, 2021 Term Loan [Member] \| Officer [Member]
Short-Term Debt [Line Items]
Borrowings, face amount																			180,761			183,881		1,300,000				1,300,000
Mortgages [Member] \| Zhejiang Yongyin Financial leasing Co., Ltd [Member]
Short-Term Debt [Line Items]
Borrowings, face amount												$ 314,857																											¥ 2,000,000
Borrowings, maturity date												Nov. 19, 2023
Borrowings, face amount																			214,217			288,348
Mortgages [Member] \| Zhejiang Yongyin Financial leasing Co., Ltd [Member] \| Asset Pledged as Collateral [Member]
Short-Term Debt [Line Items]
Borrowings, face amount \| ¥																																							¥ 2,300,000
Personal Loan [Member]
Short-Term Debt [Line Items]
Borrowings, face amount																							$ 10,149
Personal loan																																						$ 20,901
Personl loans for employees																		$ 10,451
Bank Loan [Member] \| Fenghua Chunhu Branch [Member]
Short-Term Debt [Line Items]
Borrowings, face amount											$ 1,884,823																		$ 1,837,092	¥ 13,000,000				$ 1,837,092	¥ 13,000,000		¥ 13,000,000
Borrowings, interest rate											4.50%
Borrowings, maturity date											Sep. 22, 2023
Borrowings, face amount																						1,831,553
Bank Loan [Member] \| Fenghua Chunhu Branch [Member] \| Asset Pledged as Collateral [Member]
Short-Term Debt [Line Items]
Borrowings, face amount											$ 3,440,000																										¥ 23,690,000
Bank Loan [Member] \| Ningbo National Gaoxin Branch [Member]
Short-Term Debt [Line Items]
Borrowings, interest rate			3.55%
Bank loan			$ 1,391,285																						¥ 10,000,000
Outstanding balance loan amounted																			1,384,985	¥ 10,000,000
Bank Loan [Member] \| Minor Bank Service [Member]
Short-Term Debt [Line Items]
Interest expense																			122,535		$ 40,195
October 2023 Term Loan [Member] \| Unrelated Individual [Member]
Short-Term Debt [Line Items]
Borrowings, face amount																			$ 734,041			$ 718,532		¥ 5,300,000				¥ 5,100,000
LOC [Member] \| Industrial and Commercial [Member]
Short-Term Debt [Line Items]
Line of credit					$ 7,750,000	¥ 56,000,000
Loans term					2 years	2 years

Related Party Transactions (Details Narrative)	3 Months Ended			6 Months Ended		12 Months Ended
Related Party Transactions (Details Narrative)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2023 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2023 USD ($)	Mar. 31, 2024 CNY (¥)	Jun. 30, 2022 USD ($)	Nov. 30, 2020 USD ($)	Nov. 30, 2020 CNY (¥)
Repayments debt		$ 69,134
Ownership description	Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen to 10.5%. Xinsen Group is a rubber product trading expert with 20 years of experience in the auto parts market, who charges 1% of the total sales amount before VAT tax as sales commission before September 30, 2022, and subsequently 0.25% effective from October 1, 2022 after the renegotiation between RLSP and Xinsen Group. Sales commission incurred in each period is recorded as part of selling expense of the Company.
Cash FDIC insured amount	$ 250,000						¥ 500,000
Unpaid registered capital	17,772,925						¥ 126,000,000
CEO and CFO [Member]
Other receivables	3,298,467					$ 2,684,029
Cash FDIC insured amount		64,749
Payment Extension Agreement [Member]
Other receivables	4,364,105
Accounts payable				$ 746,480				$ 6,835,124
Repayments debt		174,680	¥ 1,195,000	$ 1,626,379	¥ 11,350,337
Sales Under Indirect Supply Model [Member]
Purchases from related party	2,954,607	1,448,109
Accounts payable	18,066					18,378
Accounts receivable, related parties	8,437,022					5,209,169
Vendor C [Member]
Purchases from related party		369,389
Related party transaction, advanced	233,729					219,734
Other receivables									$ 2,077,476	¥ 15,000,000
Vendor A [Member]
Purchases from related party	2,960,164	1,908,106
Accounts payable	6,118,302					2,871,033
Vendor B [Member]
Purchases from related party
Accounts payable	$ 4,290,063					$ 4,364,105
Shanghai Haozong Rubber & Plastic Technology Co., Ltd [Member] \| Jun Tong [Member]
Ownership percentage	30.00%						30.00%
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] \| Ms. Xingxiu Hua [Member]
Ownership percentage	90.00%						90.00%
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] \| Shanghai Xinsen [Member]
Ownership percentage	70.00%						70.00%

Shareholders’ Equity (Details Narrative) - USD ($)	3 Months Ended
Shareholders’ Equity (Details Narrative) - USD ($)	Jul. 31, 2023	Mar. 31, 2024	Mar. 31, 2023	Jul. 08, 2019
Subsidiary, Sale of Stock [Line Items]
Registered capital				$ 20,000,000
Cash		$ 2,230,915	$ 2,105,915
Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Common shares, issued	133,000
Share price	$ 3.00
Total value subscription	$ 399,000

Commitment and Contingencies (Details Narrative)	Jan. 07, 2024 USD ($)	Jan. 07, 2024 CNY (¥)	Aug. 05, 2022 USD ($)	Aug. 05, 2022 CNY (¥)
Commitments and Contingencies Disclosure [Abstract]
Project cost	$ 5,221,922	¥ 37,064,159	$ 4,931,105	¥ 35,000,000
Construction costs	$ 7,171,990	¥ 50,905,352	$ 6,519,991	¥ 46,277,593

Schedule of Federal Effective Tax Rate (Details)	3 Months Ended
Schedule of Federal Effective Tax Rate (Details)	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
U.S. federal income tax rate	21.00%	21.00%
Tax rate difference	4.00%	4.00%
Tax except
Nontaxable items
GILTI tax
Others
Valuation allowance	(25.00%)	(29.80%)
Effective tax rate		(4.80%)

Income Taxes (Details Narrative) - USD ($)	3 Months Ended
Income Taxes (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Corporate tax rate	21.00%
PRC applies, income tax rate	25.00%
Income tax expense		$ 9,055
Income tax payable	$ 189,251		$ 192,518

Schedule of Business Line Distribution (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Segment Reporting Information [Line Items]
Revenue	$ 2,954,607	$ 2,345,541
Income(loss) from operations	(596,984)	(174,658)
Net income(loss)	(725,110)	(199,320)
Assets	22,994,771		$ 19,837,769
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	$ 2,954,607	$ 2,345,541
Gross profit	7.00%	3.00%
Assets	$ 22,994,771		19,837,769
Operating Segments [Member] \| Corporate Segment [Member]
Segment Reporting Information [Line Items]
Income(loss) from operations	(499,437)	$ (39,793)
Net income(loss)	(499,437)	(39,793)
Assets	2,037,767		2,069,222
Operating Segments [Member] \| Direct Supply Model [Member]
Segment Reporting Information [Line Items]
Revenue		$ 897,432
Gross profit		6.00%
Income(loss) from operations	$ (72,840)	$ (124,521)
Net income(loss)	(200,966)	(140,128)
Assets	11,938,316		10,930,729
Operating Segments [Member] \| Indirect Supply Model [Member]
Segment Reporting Information [Line Items]
Revenue	$ 2,954,607	$ 1,448,109
Gross profit	0.00%	1.00%
Income(loss) from operations	$ (24,707)	$ (10,344)
Net income(loss)	(24,707)	$ (10,344)
Assets	$ 9,018,688		$ 6,837,818

Segment Reporting (Details Narrative) - Segment	3 Months Ended
Segment Reporting (Details Narrative) - Segment	Mar. 31, 2024	Mar. 31, 2023
Segment Reporting [Abstract]
Number of operating segments	2	2
Number of reporting segments	2	2

Subsequent Events (Details Narrative) - Apr. 01, 2024 - Subsequent Event [Member] ¥ in Millions	USD ($)	CNY (¥)	CNY (¥)
Subsequent Event [Line Items]
Bank loan	$ 2,270,000		¥ 20
Annual interest rate	3.55%	3.55%
Payment to settle payable amount	$ 2,113,331	¥ 15

Rubber Leaf (PK) (USOTC:RLEA)
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Rubber Leaf (PK) (USOTC:RLEA)
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