Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 16, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-261070 | |
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 | |
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 | 40,976,458 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 160,090 | $ 51,156 |
Restricted cash | 645,569 | 665,377 |
Accounts receivables – related parties | 2,997,351 | 2,918,850 |
Accounts receivables and advances to vendors | 266,240 | 69,910 |
Advances to vendors - related parties | 29,718 | 453,679 |
Inventories, net | 464,098 | 478,678 |
Deposit to vendor -related party | 2,108,667 | 2,361,424 |
Other current assets | 217,134 | 245,974 |
Total current asset | 6,888,867 | 7,245,048 |
Noncurrent assets: | ||
Plant and equipment, net | 4,594,618 | 5,421,095 |
Intangible asset, net | 2,050,049 | 2,331,629 |
Total assets | 13,533,534 | 14,997,772 |
Current liabilities: | ||
Borrowings | 2,485,595 | 3,024,961 |
Borrowings– related party | 81,113 | 165,300 |
Accounts payables | 1,234,954 | 1,230,839 |
Accounts payables – related parties | 3,476,312 | 7,730,393 |
Notes payable | 645,569 | 665,377 |
Other payable - related party | 469,902 | 138,795 |
Advances from customers | 509,152 | 573,986 |
Retainage payable | 648,019 | 821,962 |
Operating lease liabilities | 47,228 | |
Other current liabilities | 614,053 | 544,027 |
Total current liabilities | 10,164,669 | 14,942,868 |
Noncurrent liabilities | ||
Long-term accounts payable – related party | 3,624,424 | |
Total liabilities | 13,789,093 | 14,942,868 |
Commitment and Contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock: 40,000,000 shares authorized, no shares issued and outstanding | ||
Common stock: 100,000,000 shares authorized, 40,976,458 and 40,976,458 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 40,977 | 40,977 |
Additional paid-in capital | 2,400,168 | 2,400,168 |
Accumulated deficit | (2,864,848) | (2,577,138) |
Accumulated other comprehensive income | 168,144 | 190,898 |
Total stockholders’ (deficit) equity | (255,559) | 54,905 |
Total liabilities and stockholders’ equity | $ 13,533,534 | $ 14,997,772 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2022 | Dec. 31, 2021 |
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 | 40,976,458 | 40,976,458 |
Common Stock, Shares, Outstanding | 40,976,458 | 40,976,458 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 1,443,070 | $ 478,040 | $ 3,641,039 | $ 1,446,841 |
Sales-related parties | 510,034 | 2,933,767 | 4,229,247 | 10,083,049 |
Total | 1,953,104 | 3,411,807 | 7,870,286 | 11,529,890 |
Cost of sales | 1,650,580 | 3,875,971 | 7,251,658 | 12,389,370 |
Gross profit (loss) | 302,524 | (464,164) | 618,628 | (859,480) |
Operating Expenses | ||||
Selling expenses | 34,264 | 116,345 | 126,798 | 168,050 |
General & administrative expenses | 192,265 | 283,030 | 607,451 | 589,464 |
Share-based compensation | 239,750 | 239,750 | ||
Total operation expenses | 226,529 | 639,125 | 734,249 | 997,264 |
(Loss) income from operation | 75,995 | (1,103,289) | (115,621) | (1,856,744) |
Other income (expense): | ||||
Interest expense | (50,765) | (82,550) | (153,333) | (168,576) |
Other expense, net | (13,406) | (3,446) | (11,084) | (13,678) |
Total other expenses, net | (64,171) | (85,996) | (164,417) | (182,254) |
Net income (loss) before income taxes | 11,824 | (1,189,285) | (280,038) | (2,038,998) |
Income tax expenses | 166 | (7,672) | ||
Net income (loss) | 11,990 | (1,189,285) | (287,710) | (2,038,998) |
Foreign currency translation, net of tax | (13,241) | 98,286 | (22,754) | 105,349 |
Comprehensive loss | $ (1,251) | $ (1,090,999) | $ (310,464) | $ (1,933,649) |
Earnings per share | ||||
Basic and diluted loss per share | $ 0 | $ (0.03) | $ (0.01) | $ (0.05) |
Weighted average common shares outstanding | 40,976,458 | 40,976,458 | 40,976,458 | 40,139,267 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 592,387 | $ 36,565 | $ 628,952 | |||
Balance, shares at Dec. 31, 2020 | ||||||
Shares issued to acquire subsidiary | $ 40,000 | (40,000) | ||||
Shares issued to acquire subsidiary, shares | 40,000,000 | |||||
Issue of shares | $ 436 | 1,089,564 | 1,090,000 | |||
Issue of shares, shares | 436,000 | |||||
Share issuance for incentive plan | $ 96 | 239,654 | 239,750 | |||
Share issuance for incentive plan, shares | 95,900 | |||||
Share issuance for debt conversion | $ 445 | 1,110,950 | 1,111,395 | |||
Share issuance for debt conversion, shares | 444,558 | |||||
Net loss | (2,038,998) | (2,038,998) | ||||
Foreign currency translation, net tax | 105,349 | 105,349 | ||||
Ending balance, value at Sep. 30, 2021 | $ 40,977 | 2,400,168 | (1,446,611) | 141,914 | 1,136,448 | |
Balance, shares at Sep. 30, 2021 | 40,976,458 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 40,977 | 2,400,168 | (2,577,138) | 190,898 | 54,905 | |
Balance, shares at Dec. 31, 2021 | 40,976,458 | |||||
Net loss | (287,710) | (287,710) | ||||
Foreign currency translation, net tax | (22,754) | (22,754) | ||||
Ending balance, value at Sep. 30, 2022 | $ 40,977 | $ 2,400,168 | $ (2,864,848) | $ 168,144 | $ (255,559) | |
Balance, shares at Sep. 30, 2022 | 40,976,458 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash flow from operating activities | |||||
Net loss | $ 11,990 | $ (1,189,285) | $ (287,710) | $ (2,038,998) | |
Adjustments to reconcile loss to net cash provided by operating activities: | |||||
Depreciation and amortization | 405,638 | 532,751 | |||
Share-based compensation | 239,750 | ||||
Inventories write-down | 2,813 | ||||
Changes in operating assets and liabilities: | |||||
Account receivables | 119,886 | ||||
Account receivables – related parties | (418,932) | (29,436) | |||
Advances to vendors - related party | 402,298 | (2,832,552) | |||
Advance to vendors | (218,416) | 2,774,139 | |||
Other current assets | 53,742 | (175,346) | |||
Inventories | (39,282) | (49,320) | |||
Right-use-of asset | (20,920) | 44,871 | |||
Other assets | 24,731 | ||||
Notes payable | 55,095 | 264,612 | |||
Account payable | 145,592 | (169,920) | |||
Accounts payable - related parties | 211,943 | 2,113,175 | |||
Advances from customers - related parties | 145,322 | ||||
Advances from customers | (3,640) | 115,224 | |||
Retainage payable | (92,122) | 246,159 | |||
Other current liabilities | 137,446 | (40,672) | |||
Net cash provided by operating activities | 330,733 | 1,287,189 | |||
Cash flow from investing activities | |||||
Other receivables - related party | (27,900) | ||||
Loan receivable | (75,325) | ||||
Purchase of equipment and factory construction | (107,465) | (1,993,712) | |||
Net cash used in investing activities | (182,790) | (2,021,612) | |||
Cash flow from financing activities | |||||
Share issuance for cash | 1,090,000 | ||||
Proceeds from to related parties | 339,132 | 177,757 | |||
New borrowings | 96,416 | 772,857 | |||
Repayments of borrowings-related party | (71,257) | ||||
Repayments of borrowings | (327,449) | (911,972) | |||
Net cash provided by financing activities | 36,843 | 1,128,642 | |||
Effect of exchange rate changes | (95,661) | (14,633) | |||
Decrease in cash | 89,124 | 379,586 | |||
Cash and restricted cash, beginning | 716,534 | 8,508 | $ 8,508 | ||
Cash and restricted cash, ending | $ 805,659 | $ 388,094 | 805,659 | 388,094 | $ 716,534 |
Supplemental disclosures of cash flow | |||||
Interest paid | 96,764 | 127,977 | |||
Income taxes paid | 3,938 | 11,139 | |||
Noncash investing and financing activities | |||||
Share issuance for debt conversion | $ 1,111,395 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1 - Organization and Description of Business Rubber Leaf Sealing Products (Zhejiang) Co., Ltd. (the “RLSP”) was established in July 08, 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 |
Going concern
Going concern | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | Note 2 – Going concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), which contemplate continuation of the Company as a going concern. The Company currently has a net loss of $ (287,710) (2,864,848) 3,275,802 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 - 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 nine months ended September 30, 2022, 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 nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022. 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-years’ 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 The Company’s revenue mainly generated from selling the synthetic rubber, rubber compound, car window seals, auto parts under two models of supply. The Company has disaggregated revenue at the sales channels through direct supply model and indirect supply model. Model A: Direct supply model. Upon passing the on-site inspections of automobile Original Equipment Manufacturers (the “OEMs”), RLSP is listed at the OEMs’ directories being one of their first-tier suppliers who will purchase raw materials, produce final products independently, and deliver finished products to the OEMs’ warehouses directly. RLSP satisfies its performance obligation when its finished products are delivered to the OEMs’ warehouses and a follow-up quality inspection is accepted by the OEMs. Meanwhile, the OEMs will also request product replacement for disqualified products. The ownership and control of our finished products are transferred to our customers as soon as the products passed the inspection and acceptance into the warehouses of the OEMs. Our revenue will be recognized once the control of our products has been transferred to our customers, and the payments will be paid by the OEMs directly. Model B: Indirect supply model. RLSP received the purchase orders from our related parties-Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”) and Xinsen Sealing Products (Hangzhou) Co., Ltd (“Hangzhou Xinsen”) (collectively named as “Xinsen Group” for two companies together). The Company’s President, Ms. Xingxiu Hua, holds 90% 70% 63% Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% to 10.5%. 1) RLSP purchases raw materials and subcontracts the third-party manufacturers to produce WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs some manual processes, such as welding and constructing in order to meet the specification of the purchase orders, the final products are concluded after strict quality inspection. 2) RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will perform the responsibilities to trace and observe each step of production from the third-party manufacturers. The finished products will be delivered to the first-tier suppliers’ warehouses, the downstream customers of Xinsen Group either from RLSP or third-party manufacturers’ locations. Xinsen Group will assign inspectors and perform quality inspection when the finished products are delivered. RLSP satisfies its performance obligation when the finished products are delivered to Xinsen Group’s customers and the quality inspection is qualified performed by Xinsen Group. Meanwhile, Xinsen Group will also request product replacement for disqualified products. Once the quality and quantity are confirmed and finished products are acceptable into the warehouses of Xinsen Group’s customers, receiving notes will be provided by Xinsen Group’s customers, then to RLSP as proof of delivery. The date of receiving notes signed is the time that RLSP transfers ownership and control of the finished products under model B to Xinsen Group then indirectly to the first-tier suppliers. RLSP recognizes revenue on the dates when receiving notes are signed by Xinsen Group’s customers. Under both supply models, payment of products is generally made within a 30-day term upon receiving notes signed by our customers. Extended payment terms are provided on a limited basis not to exceed two months. After customer receives the finished products, if the customer finds quality problems before installing them to the vehicles, the customer is able to inform RLSP and request replacement for the same type products. Since November 2021, RLSP has terminated warranty assurance to our customers due to the characteristics of our 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. Restricted cash The Company had notes payable outstanding with Ningbo bank and was required to keep certain amounts on deposit that were subject to withdrawal restrictions. The notes payables were generally short term in nature due to its maturity period of six months or less, thus restricted cash was classified as a current asset. 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 RMB 500,000 250,000 Financial instruments that potentially subject the Company to significant concentrations of credit risk are cash and cash equivalents and accounts receivable. As of September 30, 2022 and December 31, 2021, $ 734,525 557,469 Major customers For the three months ended September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021 the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following: Schedule of Concentration Risk Percent Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Customer B $ 4,229,247 54 % $ 510,034 26 % 10,083,049 87 % $ 2,933,767 86 % Customer A $ 3,641,039 46 % 1,443,070 74 % $ 1,446,841 13 % $ 478,040 14 % As of As of Accounts Receivable % of Total Accounts Receivable Accounts Receivable % of Total Accounts Receivable Customer B $ 2,997,351 100 % $ 2,653,544 100 % Customer A - - % $ - - % ● 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 September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following: Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Vendor A $ 4,317,141 71 % $ 523,970 48 % 11,152,785 95 % $ 3,697,640 88 % Vendor B 79,091 1 % - - - - - Vendor C $ 1,685,360 28 % 557,569 52 % $ 597,735 5 % $ 512,215 12 % As of As of Accounts payable % of Total Accounts Payable Accounts payable % of Total Accounts Payable Vendor A $ 1,330,458 17 % $ 586,036 8 % Vendor B 6,399,960 83 % $ 6,186,198 80 % Vendor C - - - ● 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 aging. As of September 30, 2022 and December 31, 2021 no credit risk identified and no allowance for doubtful accounts. Inventories, net 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 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 equipment: 10 years ● Office equipment and furniture: 5 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 50 years 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 nine months and three months ended September 30, 2022 and 2021, the Company determined there was no Notes payable Short-term notes payable are lines of credit extended by banks. The banks in-turn issue the Company a bankers acceptance note, which can be endorsed and assigned to vendors as payments for purchases. These short-term notes payable bears no interest and is guaranteed by the bank for its complete face value and usually matures within three to six-month period. The banks usually require the Company to deposit a certain amount of cash at the bank as a guarantee deposit, which is classified on the balance sheet as restricted cash. As of September 30, 2022 and December 31, 2021, RLSP held $ 645,569 665,377 Advances from customers From time to time, we received 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. Retainage Payables For equipment purchased from Shanghai Huaxin in the PRC, a related party, by RLSP in the PRC, the Company typically retains a portion of the purchase invoices, typically 3-5%, for 12 to 24 months to ensure the quality of equipment after installation during the qualifying warranty period. 648,019 821,962 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% 25% Value added tax The Company is subject to value added tax (“VAT”). The applicable VAT rate is 13% 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 September 30, 2022 and December 31, 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 September 30 2022 and December 31, 2021. 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 receivables, 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, Foreign Currency Amounts reported in the condensed consolidated financial statements are stated in United States dollars, unless stated otherwise. The Company’s subsidiary in the PRC use 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 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 September 30,2022, December 31, 2021 and for the nine months periods and three months ended. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Note 4 - Inventories, net 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 September 30, 2022 and December 31, 2021, inventories consisted of the following: Schedule of Inventories September 30, 2022 December 31, 2021 (Unaudited) Raw materials $ 63,688 $ 29,246 Finished goods, net 400,410 449,432 Total 464,098 478,678 As of December 31, 2021, the Company wrote $ 532,366 |
Plant and equipment, net
Plant and equipment, net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Plant and equipment, net | Note 5 - Plant and equipment, net Schedule of Plant and Equipment September 30, December 31, 2022 2021 (Unaudited) Equipment and machinery $ 5,461,715 $ 5,919,317 Furniture and office equipment 22,580 25,286 Leasehold improvement 75,287 132,604 Minus: Accumulated depreciation and amortization (1,272,852 ) (937,027 ) Plant and equipment, net 4,286,730 5,140,181 Construction in progress 307,889 280,914 Property plant and equipment, net $ 4,594,618 $ 5,421,095 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. The construction is expecting to put into use in 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 nine months ended September, 2022 and 2021, the depreciation and amortization expenses were $ 371,332 512,147 110,362 148,475 |
Intangible asset, net
Intangible asset, net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible asset, net | Note 6 - 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 2,064,554 13,729,900 0.1504 Intangible asset, net consists of the following: Schedule of Intangible Asset September 30, December 31, 2022 2021 (Unaudited) Land use rights $ 2,134,113 $ 2,389,920 Less: Accumulated amortization (84,063 ) (58,291 ) Intangible asset, net 2,050,049 2,331,629 For the year ended December 31, 2021, $ 228,446 34,305 20,604 11,436 10,930 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 7 - Borrowings On May 9, 2020, RLSP entered a one-year term loan with Chunhu Branch, Ningbo Fenghua Rural Commercial Bank Co., Ltd. in the amount of $ 459,770 3 4.5% On September 18, 2020, RLSP entered a one-year bank loan of $ 383,142 2.5 6.42% 2.5 1.6 On November 30, 2020, RLSP entered a one-year bank loan of $ 2,298,851 15 4.7% 5.44 35.2 2 2,017,005 13 1,827,511 2,046,567 On August 1, 2019, RLSP entered a loan agreement with an unrelated individual to borrow up to $ 1,077,308 7.5 287,282 2 7.5 427,323 2.5 On October 19, 2020, RLSP entered a loan agreement with an unrelated individual to borrow $ 153,257 1 118,008 770,000 153,257 7,550 43,173 17,235 2.50 On April 30, 2021, RLSP borrowed $ 774,401 5 1% 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. 386,589 2.75 550,999 3.5 On September 1, 2021, RLSP borrowed $ 154,832 1 13% 95,593 0.68 125,943 0.8 150,798 500,000 March 30, 2023 On September 1, 2021, RLSP borrowed $ 247,732 1.6 8% August 31, 2022 69,256 85,453 81,113 0.6 165,300 1.05 On November 30, 2021, RLSP borrowed $ 314,857 2 2.3 November 19, 2023 166,062 301,453 On March 2022, RLSP borrowed $ 20,901 10,451 9,840 Interest expense primarily consists of the interest incurred on the bank loans, commercial & individual loans and minor bank service charges. For nine months ended September 30, 2022 and 2021, the Company recorded the interest expense of $ 153,333 168,576 50,765 82,550 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 – 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 nine months ended September 30, 2022 and 2021. 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% For nine months ended September 30, 2022 and 2021, the Company purchased raw materials from Yongliansen (“Vendor C”) in the total amount of $ 1,685,360 59,735 557,569 512,215 29,718 453,679 15 2,298,851 The Deposit bears no interest and due on demand. Due to less procurement of raw materials made from Yongliansen in 2022 and to purchase for the remaining year as planned, RLSP requested Yongliansen to refund the RMB 15 million ($2,108,667 as of September 30, 2022) and Yongliansen has agreed to fully refund us by December 31, 2022. For nine months ended September 30, 2022 and 2021, RLSP purchased $ 4,317,414 11,152,785 523,970 3,697,640 1,330,458 2,115,497 For nine months ended September 30, 2022 and 2021, RLSP purchased $ 79,091 648,019 821,962 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 3,849,124 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, holds 90% 70% 63% Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% 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. Sales commission incurred in each period is recorded as part of selling expense of the Company. For nine months ended September 30, 2022 and 2021, RLSP had indirect sales through Xinsen Group that were sold to two certified first-tier suppliers of the Auto Manufacturers $ 4,229,247 and $ 10,083,049 respectively. For three months ended September 30, 2022 and 2021, the total indirect sales through Xinsen Group to the same downstream two customers were $ 510,034 and $ 2,933,767 , respectively. As of September 30, 2022, and December 31, 2021, the accounts receivable due from Shanghai Xinsen were $ 2,997,351 and $ 2,918,850 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 $ 18,337 and $ 20,535 as of September 30, 2022 and December 31, 2021, respectively. Others As of September 30, 2021 and December 31, 2021 the Company’s founder and officer funded the Company of $ 469,902 138,795 |
Shareholders_ Equity
Shareholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Shareholders’ Equity | Note 9 – Shareholders’ Equity RLSP was established on July 08, 2019 with registered capital of $ 20 million. As of September 30, 2022 and December 31, 2021, $ 301,990 50,500 On May 18, 2021, RLI was incorporated under the laws of the State of Nevada. The total number of authorized to issue are 100 40 0.001 On May 27, 2021, the Company entered a share exchange agreement with Ms. Hua, the sole shareholder of RLI and RLSP, pursuant to which, the Company issued 40,000,000 During June 2021, the Company issued 55,000 2.5 381,000 2.5 1,090,000 On September 6, 2021, the board of directors of the Company unanimously approved 2021 Equity Incentive Plan (the “2021 Plan”), which authorized the board to issue up to five million ( 5,000,000 295,900 239,750 On September 13, 2021, 444,558 1,111,395 |
Commitment and contingencies
Commitment and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and contingencies | Note 10 - Commitment and contingencies On February 7, 2021, the landlord of the factory leased by RLSP filed a lawsuit against RLSP for default on lease payment pursuant to the lease agreement entered on November 11, 2019. The case was settled under the court mediation and a civil settlement was issued on April 20, 2021, pursuant to which, RLSP should pay the total unpaid balance of $ 46,454 300,000 58,855 380,000 On July 5, 2022, Guangzhou FuRuiDe Metal Processing Machinery Manufacturing Co., Ltd. (“GFMP”) and RLSP entered into a settlement agreement regarding the dispute about the molds produced by GFMP. GFMP manufactured five pair of molds for RLSP for the total purchase amount of RMB 200,000 31,000 30,000 5,000 170,000 131,850 20,000 On September 17, 2020, RLSP entered a construction contract with Ningbo Rongsen to build up a new production line for which the annual production capacity will be up to four million set of automotive seals. The budget of the project is around $ 5,420,810 35 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 - Income Taxes The Company, RLI is a Nevada company and subject to the United States federal income tax at a tax rate of 21% 25% For the nine months ended September 30, 2022 and 2021, the provision for income taxes was $ 7,672 nil 237,670 229,579 The table below summarizes the difference between the U.S. statutory federal tax rate and the Company’s effective tax rate for the s nine months ended September 30, 2022 and 2021: Schedule of Federal Effective Tax Rate 2022 2021 Nine Months Ended September 30, 2022 2021 (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 (23.3 )% (25.0 )% Effective tax rate 1.7 % (0.0 )% For U.S. income tax purposes, the Company has no cumulative undistributed earnings of foreign subsidiary as of September 30, 2022 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 nine months ended September 30, 2022 and 2021 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 September 30, 2022. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 12 - 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 The business line distribution of the Company’s information as of and for the nine months ended September 30, 2022 and 2021,as following: Schedule of Business Line Distribution 2022 2021 2022 2021 For the nine months ended September 30, For the three months ended September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) Revenue Direct supply model $ 3,641,039 $ 1,446,841 $ 1,443,070 478,040 Indirect supply model 4,229,247 10,083,049 510,034 2,933,767 Total 7,870,286 11,529,890 1,953,104 3,411,807 Revenue 7,870,286 11,529,890 1,953,104 3,411,807 Gross profit Direct supply model 19 % (0 )% 22 % 18 % Indirect supply model (2 )% (9 )% (3 )% (19 )% Total 8 % (7 )% 18 % (14 )% Gross profit 8 % (7 )% 18 % (14 )% Income(loss) from operations: Direct supply model 182,709 (837,392 ) 156,840 (458,444 ) Indirect supply model (210,110 ) (1,019,352 ) (44,377 ) (644,845 ) Corporate (88,220 ) - (36,468 ) - Total (115,621 ) (1,856,744 ) 75,995 (1,103,289 ) Income(loss) from operations (115,621 ) (1,856,744 ) 75,995 (1,103,289 ) Net income(loss) Direct supply model 10,620 (1,019,646 ) 92,834 (544,440 ) Indirect supply model (210,110 ) (1,019,352 ) (44,376 ) (644,845 ) Corporate (88,220 ) - (36,468 ) Total $ (287,710 ) $ (2,038,998 ) $ 11,990 $ (1,189,285 ) Net income(loss) $ (287,710 ) $ (2,038,998 ) $ 11,990 $ (1,189,285 ) September 30, December 31, 2022 2021 (Unaudited) Reportable assets Direct supply model $ 10,535,893 $ 12,077,692 Indirect supply model 2,997,351 2,918,850 Corporate 290 1,230 Total $ 13,533,534 $ 14,997,772 Reportable assets $ 13,533,534 $ 14,997,772 All long-term assets are managed under direct supply model by the chief operating decision maker. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 - Subsequent Events In accordance with ASC 855 , “Subsequent Events” Subsequently RLSP had $ nil 806,134 806,134 Effective on October 1, 2022, Ms. Xingxiu Hua, the President of the Company, has reduced her ownership of Shanghai Xinsen from 90% 15% |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 nine months ended September 30, 2022, 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 nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022. 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-years’ 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 | 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 | Revenue Recognition The Company early adopted Accounting Standards Update (“ASU”) 2014-09, Accounting Standards Codification Topic 606, Revenue from Contracts with Customers The Company’s revenue mainly generated from selling the synthetic rubber, rubber compound, car window seals, auto parts under two models of supply. The Company has disaggregated revenue at the sales channels through direct supply model and indirect supply model. Model A: Direct supply model. Upon passing the on-site inspections of automobile Original Equipment Manufacturers (the “OEMs”), RLSP is listed at the OEMs’ directories being one of their first-tier suppliers who will purchase raw materials, produce final products independently, and deliver finished products to the OEMs’ warehouses directly. RLSP satisfies its performance obligation when its finished products are delivered to the OEMs’ warehouses and a follow-up quality inspection is accepted by the OEMs. Meanwhile, the OEMs will also request product replacement for disqualified products. The ownership and control of our finished products are transferred to our customers as soon as the products passed the inspection and acceptance into the warehouses of the OEMs. Our revenue will be recognized once the control of our products has been transferred to our customers, and the payments will be paid by the OEMs directly. Model B: Indirect supply model. RLSP received the purchase orders from our related parties-Shanghai Xinsen Import & Export Co., Ltd (“Shanghai Xinsen”) and Xinsen Sealing Products (Hangzhou) Co., Ltd (“Hangzhou Xinsen”) (collectively named as “Xinsen Group” for two companies together). The Company’s President, Ms. Xingxiu Hua, holds 90% 70% 63% Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% to 10.5%. 1) RLSP purchases raw materials and subcontracts the third-party manufacturers to produce WIP. Once WIP is finished and delivered to RLSP’s warehouse, RLSP performs some manual processes, such as welding and constructing in order to meet the specification of the purchase orders, the final products are concluded after strict quality inspection. 2) RLSP purchases raw materials and subcontracts third party manufacturers to produce finished products. RLSP will perform the responsibilities to trace and observe each step of production from the third-party manufacturers. The finished products will be delivered to the first-tier suppliers’ warehouses, the downstream customers of Xinsen Group either from RLSP or third-party manufacturers’ locations. Xinsen Group will assign inspectors and perform quality inspection when the finished products are delivered. RLSP satisfies its performance obligation when the finished products are delivered to Xinsen Group’s customers and the quality inspection is qualified performed by Xinsen Group. Meanwhile, Xinsen Group will also request product replacement for disqualified products. Once the quality and quantity are confirmed and finished products are acceptable into the warehouses of Xinsen Group’s customers, receiving notes will be provided by Xinsen Group’s customers, then to RLSP as proof of delivery. The date of receiving notes signed is the time that RLSP transfers ownership and control of the finished products under model B to Xinsen Group then indirectly to the first-tier suppliers. RLSP recognizes revenue on the dates when receiving notes are signed by Xinsen Group’s customers. Under both supply models, payment of products is generally made within a 30-day term upon receiving notes signed by our customers. Extended payment terms are provided on a limited basis not to exceed two months. After customer receives the finished products, if the customer finds quality problems before installing them to the vehicles, the customer is able to inform RLSP and request replacement for the same type products. Since November 2021, RLSP has terminated warranty assurance to our customers due to the characteristics of our products. |
Cost of revenue | 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 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. Restricted cash The Company had notes payable outstanding with Ningbo bank and was required to keep certain amounts on deposit that were subject to withdrawal restrictions. The notes payables were generally short term in nature due to its maturity period of six months or less, thus restricted cash was classified as a current asset. |
Concentration risk | 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 RMB 500,000 250,000 Financial instruments that potentially subject the Company to significant concentrations of credit risk are cash and cash equivalents and accounts receivable. As of September 30, 2022 and December 31, 2021, $ 734,525 557,469 Major customers For the three months ended September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021 the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following: Schedule of Concentration Risk Percent Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Customer B $ 4,229,247 54 % $ 510,034 26 % 10,083,049 87 % $ 2,933,767 86 % Customer A $ 3,641,039 46 % 1,443,070 74 % $ 1,446,841 13 % $ 478,040 14 % As of As of Accounts Receivable % of Total Accounts Receivable Accounts Receivable % of Total Accounts Receivable Customer B $ 2,997,351 100 % $ 2,653,544 100 % Customer A - - % $ - - % ● 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 September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following: Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Vendor A $ 4,317,141 71 % $ 523,970 48 % 11,152,785 95 % $ 3,697,640 88 % Vendor B 79,091 1 % - - - - - Vendor C $ 1,685,360 28 % 557,569 52 % $ 597,735 5 % $ 512,215 12 % As of As of Accounts payable % of Total Accounts Payable Accounts payable % of Total Accounts Payable Vendor A $ 1,330,458 17 % $ 586,036 8 % Vendor B 6,399,960 83 % $ 6,186,198 80 % Vendor C - - - ● 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 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 aging. As of September 30, 2022 and December 31, 2021 no credit risk identified and no allowance for doubtful accounts. |
Inventories, net | Inventories, net 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 | 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 |
Property and equipment | 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 equipment: 10 years ● Office equipment and furniture: 5 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 | 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 50 years |
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. 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 nine months and three months ended September 30, 2022 and 2021, the Company determined there was no |
Notes payable | Notes payable Short-term notes payable are lines of credit extended by banks. The banks in-turn issue the Company a bankers acceptance note, which can be endorsed and assigned to vendors as payments for purchases. These short-term notes payable bears no interest and is guaranteed by the bank for its complete face value and usually matures within three to six-month period. The banks usually require the Company to deposit a certain amount of cash at the bank as a guarantee deposit, which is classified on the balance sheet as restricted cash. As of September 30, 2022 and December 31, 2021, RLSP held $ 645,569 665,377 |
Advances from customers | Advances from customers From time to time, we received 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. |
Retainage Payables | Retainage Payables For equipment purchased from Shanghai Huaxin in the PRC, a related party, by RLSP in the PRC, the Company typically retains a portion of the purchase invoices, typically 3-5%, for 12 to 24 months to ensure the quality of equipment after installation during the qualifying warranty period. 648,019 821,962 |
Income Taxes | 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% 25% |
Value added tax | Value added tax The Company is subject to value added tax (“VAT”). The applicable VAT rate is 13% |
Earnings Per Share | 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 September 30, 2022 and December 31, and, thus, anti-dilution issues are not applicable. |
Fair Value of Financial Instruments | 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 September 30 2022 and December 31, 2021. 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 receivables, 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 | 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 | 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, |
Foreign Currency | Foreign Currency Amounts reported in the condensed consolidated financial statements are stated in United States dollars, unless stated otherwise. The Company’s subsidiary in the PRC use 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) | Comprehensive Income (Loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, Income Statement-Reporting Comprehensive Income |
Segment Information | 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 September 30,2022, December 31, 2021 and for the nine months periods and three months ended. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Concentration Risk Percent | For the three months ended September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021 the Company’s revenues from two major customers accounted more than 10% of the total revenue were as following: Schedule of Concentration Risk Percent Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Amount % of Total Revenue Customer B $ 4,229,247 54 % $ 510,034 26 % 10,083,049 87 % $ 2,933,767 86 % Customer A $ 3,641,039 46 % 1,443,070 74 % $ 1,446,841 13 % $ 478,040 14 % As of As of Accounts Receivable % of Total Accounts Receivable Accounts Receivable % of Total Accounts Receivable Customer B $ 2,997,351 100 % $ 2,653,544 100 % Customer A - - % $ - - % ● 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. For the three months ended September 30, 2022 and 2021, as well as nine months ended September 30, 2022 and 2021, the Company made purchases from the major vendors accounted more than 10% of the total purchases were as following: Nine months ended Three months ended Nine months ended Three months ended Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Amount % of Total Purchase Vendor A $ 4,317,141 71 % $ 523,970 48 % 11,152,785 95 % $ 3,697,640 88 % Vendor B 79,091 1 % - - - - - Vendor C $ 1,685,360 28 % 557,569 52 % $ 597,735 5 % $ 512,215 12 % As of As of Accounts payable % of Total Accounts Payable Accounts payable % of Total Accounts Payable Vendor A $ 1,330,458 17 % $ 586,036 8 % Vendor B 6,399,960 83 % $ 6,186,198 80 % Vendor C - - - ● 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, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Schedule of Inventories September 30, 2022 December 31, 2021 (Unaudited) Raw materials $ 63,688 $ 29,246 Finished goods, net 400,410 449,432 Total 464,098 478,678 |
Plant and equipment, net (Table
Plant and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment | Schedule of Plant and Equipment September 30, December 31, 2022 2021 (Unaudited) Equipment and machinery $ 5,461,715 $ 5,919,317 Furniture and office equipment 22,580 25,286 Leasehold improvement 75,287 132,604 Minus: Accumulated depreciation and amortization (1,272,852 ) (937,027 ) Plant and equipment, net 4,286,730 5,140,181 Construction in progress 307,889 280,914 Property plant and equipment, net $ 4,594,618 $ 5,421,095 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. The construction is expecting to put into use in 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 nine months ended September, 2022 and 2021, the depreciation and amortization expenses were $ 371,332 512,147 110,362 148,475 |
Intangible asset, net (Tables)
Intangible asset, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Asset | Intangible asset, net consists of the following: Schedule of Intangible Asset September 30, December 31, 2022 2021 (Unaudited) Land use rights $ 2,134,113 $ 2,389,920 Less: Accumulated amortization (84,063 ) (58,291 ) Intangible asset, net 2,050,049 2,331,629 For the year ended December 31, 2021, $ 228,446 34,305 20,604 11,436 10,930 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 the s nine months ended September 30, 2022 and 2021: Schedule of Federal Effective Tax Rate 2022 2021 Nine Months Ended September 30, 2022 2021 (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 (23.3 )% (25.0 )% Effective tax rate 1.7 % (0.0 )% |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Business Line Distribution | The business line distribution of the Company’s information as of and for the nine months ended September 30, 2022 and 2021,as following: Schedule of Business Line Distribution 2022 2021 2022 2021 For the nine months ended September 30, For the three months ended September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) Revenue Direct supply model $ 3,641,039 $ 1,446,841 $ 1,443,070 478,040 Indirect supply model 4,229,247 10,083,049 510,034 2,933,767 Total 7,870,286 11,529,890 1,953,104 3,411,807 Revenue 7,870,286 11,529,890 1,953,104 3,411,807 Gross profit Direct supply model 19 % (0 )% 22 % 18 % Indirect supply model (2 )% (9 )% (3 )% (19 )% Total 8 % (7 )% 18 % (14 )% Gross profit 8 % (7 )% 18 % (14 )% Income(loss) from operations: Direct supply model 182,709 (837,392 ) 156,840 (458,444 ) Indirect supply model (210,110 ) (1,019,352 ) (44,377 ) (644,845 ) Corporate (88,220 ) - (36,468 ) - Total (115,621 ) (1,856,744 ) 75,995 (1,103,289 ) Income(loss) from operations (115,621 ) (1,856,744 ) 75,995 (1,103,289 ) Net income(loss) Direct supply model 10,620 (1,019,646 ) 92,834 (544,440 ) Indirect supply model (210,110 ) (1,019,352 ) (44,376 ) (644,845 ) Corporate (88,220 ) - (36,468 ) Total $ (287,710 ) $ (2,038,998 ) $ 11,990 $ (1,189,285 ) Net income(loss) $ (287,710 ) $ (2,038,998 ) $ 11,990 $ (1,189,285 ) September 30, December 31, 2022 2021 (Unaudited) Reportable assets Direct supply model $ 10,535,893 $ 12,077,692 Indirect supply model 2,997,351 2,918,850 Corporate 290 1,230 Total $ 13,533,534 $ 14,997,772 Reportable assets $ 13,533,534 $ 14,997,772 |
Organization and Description _2
Organization and Description of Business (Details Narrative) | May 27, 2021 shares |
RLSP [Member] | |
Number of shares issued | 40,000,000 |
Going concern (Details Narrativ
Going concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net Loss | $ 11,990 | $ (1,189,285) | $ (287,710) | $ (2,038,998) | |
Accumulated deficits | (2,864,848) | (2,864,848) | $ (2,577,138) | ||
Negative working capital | $ 3,275,802 | $ 3,275,802 |
Schedule of Concentration Risk
Schedule of Concentration Risk Percent (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Product Information [Line Items] | ||||
Revenues | $ 1,953,104 | $ 3,411,807 | $ 7,870,286 | $ 11,529,890 |
Customer B [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 510,034 | $ 2,933,767 | $ 4,229,247 | $ 10,083,049 |
Customer B [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentrationr risk, percentage | 26% | 86% | 54% | 87% |
Customer B [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentrationr risk, percentage | 100% | 100% | ||
Customer A [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 1,443,070 | $ 478,040 | $ 3,641,039 | $ 1,446,841 |
Accounts receivable | $ 2,997,351 | $ 2,653,544 | $ 2,997,351 | $ 2,653,544 |
Customer A [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentrationr risk, percentage | 74% | 14% | 46% | 13% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Oct. 01, 2022 | Sep. 30, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | |
Product Information [Line Items] | ||||||||
FSD insured amonut | ¥ | ¥ 500,000 | |||||||
FDIC insured amount | $ 250,000 | $ 250,000 | ||||||
Cash and restricted cash | 734,525 | 734,525 | $ 557,469 | |||||
Impairment of logn lived assets | 0 | $ 0 | $ 0 | $ 0 | ||||
Notes payable | ¥ | ¥ 645,569 | ¥ 665,377 | ||||||
Retainage payable description | For equipment purchased from Shanghai Huaxin in the PRC, a related party, by RLSP in the PRC, the Company typically retains a portion of the purchase invoices, typically 3-5%, for 12 to 24 months to ensure the quality of equipment after installation during the qualifying warranty period. | |||||||
Retainage payable | 648,019 | $ 648,019 | $ 821,962 | |||||
Corporate tax rate | 21% | |||||||
PRC applies, Income tax rate | 25% | |||||||
Value added tax rate | 13% | |||||||
Minimum [Member] | ||||||||
Product Information [Line Items] | ||||||||
Intangible asset useful life | 15 years | |||||||
Maximum [Member] | ||||||||
Product Information [Line Items] | ||||||||
Intangible asset useful life | 50 years | |||||||
Land [Member] | ||||||||
Product Information [Line Items] | ||||||||
Property and equipment, useful life | 50 years | |||||||
Equipment [Member] | ||||||||
Product Information [Line Items] | ||||||||
Property and equipment, useful life | 10 years | |||||||
Office Equipment [Member] | ||||||||
Product Information [Line Items] | ||||||||
Property and equipment, useful life | 5 years | |||||||
Vendor A [Member] | ||||||||
Product Information [Line Items] | ||||||||
Cost of goods | $ 523,970 | $ 3,697,640 | $ 4,317,141 | $ 11,152,785 | ||||
Vendor A [Member] | Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentrationr risk, percentage | 48% | 88% | 71% | 95% | ||||
Vendor A [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentrationr risk, percentage | 17% | 8% | ||||||
Accounts payable | $ 1,330,458 | $ 586,036 | $ 1,330,458 | $ 586,036 | ||||
Vendor B [Member] | ||||||||
Product Information [Line Items] | ||||||||
Cost of goods | $ 79,091 | |||||||
Vendor B [Member] | Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentrationr risk, percentage | 1% | |||||||
Vendor B [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Accounts payable | 6,399,960 | 6,186,198 | $ 6,399,960 | 6,186,198 | ||||
Vendor C [Member] | ||||||||
Product Information [Line Items] | ||||||||
Cost of goods | $ 557,569 | $ 512,215 | $ 1,685,360 | $ 597,735 | ||||
Vendor C [Member] | Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentrationr risk, percentage | 52% | 12% | 28% | 5% | ||||
Vendor C [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentrationr risk, percentage | 83% | 80% | ||||||
Shanghai Xinsen Import & Export Co., Ltd [Member] | Xingxiu Hua [Member] | ||||||||
Product Information [Line Items] | ||||||||
Ownership percentage | 90% | 90% | 15% | 90% | ||||
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] | ||||||||
Product Information [Line Items] | ||||||||
Ownership percentage description | Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% to 10.5%. | |||||||
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] | Shanghai Xinsen [Member] | ||||||||
Product Information [Line Items] | ||||||||
Ownership percentage | 70% | 70% | 70% | |||||
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] | Hua [Member] | ||||||||
Product Information [Line Items] | ||||||||
Ownership percentage | 63% | 63% | 63% |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 63,688 | $ 29,246 |
Finished goods, net | 400,410 | 449,432 |
Total | $ 464,098 | $ 478,678 |
Inventories, net (Details Narra
Inventories, net (Details Narrative) | Sep. 30, 2022 USD ($) |
Inventory Disclosure [Abstract] | |
Inventory wrote off | $ 532,366 |
Schedule of Plant and Equipment
Schedule of Plant and Equipment (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Equipment and machinery | $ 5,461,715 | $ 5,919,317 |
Furniture and office equipment | 22,580 | 25,286 |
Leasehold improvement | 75,287 | 132,604 |
Minus: Accumulated depreciation and amortization | (1,272,852) | (937,027) |
Plant and equipment, net | 4,286,730 | 5,140,181 |
Construction in progress | 307,889 | 280,914 |
Property plant and equipment, net | $ 4,594,618 | $ 5,421,095 |
Plant and equipment, net (Detai
Plant and equipment, net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 110,362 | $ 148,475 | $ 371,332 | $ 512,147 |
Schedule of Intangible Asset (D
Schedule of Intangible Asset (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Land use rights | $ 2,134,113 | $ 2,389,920 |
Less: Accumulated amortization | (84,063) | (58,291) |
Intangible asset, net | $ 2,050,049 | $ 2,331,629 |
Intangible asset, net (Details
Intangible asset, net (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 21, 2020 USD ($) | Oct. 21, 2020 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Finite-lived intangible assets acquired | $ 2,064,554 | ¥ 13,729,900 | |||||
Exchange rate | 0.1504 | 0.1504 | |||||
Land Use Rights [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Construction supporting fee | $ 228,446 | ||||||
Amortization of intangible assets | $ 11,436 | $ 10,930 | $ 34,305 | $ 20,604 | |||
Maximum [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible asset useful life | 50 years |
Borrowings (Details Narrative)
Borrowings (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 14 Months Ended | ||||||||||||||||||||||||||||||||||
Apr. 04, 2022 USD ($) | Nov. 30, 2021 USD ($) | Sep. 30, 2021 CNY (¥) | Sep. 27, 2021 USD ($) shares | Sep. 13, 2021 $ / shares shares | Sep. 02, 2021 USD ($) | Apr. 30, 2021 USD ($) | Nov. 30, 2020 USD ($) | Nov. 30, 2020 CNY (¥) | Oct. 19, 2020 USD ($) | Sep. 30, 2020 USD ($) | Sep. 18, 2020 USD ($) | Jun. 09, 2020 | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2021 USD ($) | Apr. 30, 2022 | Dec. 31, 2021 CNY (¥) | Nov. 12, 2022 | Sep. 30, 2022 CNY (¥) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Nov. 30, 2021 CNY (¥) | Sep. 02, 2021 CNY (¥) | Sep. 01, 2021 USD ($) | Sep. 01, 2021 CNY (¥) | Apr. 30, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) | Sep. 30, 2020 CNY (¥) | Sep. 18, 2020 CNY (¥) | May 09, 2020 USD ($) | May 09, 2020 CNY (¥) | Oct. 19, 2019 CNY (¥) | Aug. 01, 2019 USD ($) | Aug. 01, 2019 CNY (¥) | |
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Machinery and equipment | $ 5,461,715 | $ 5,461,715 | $ 5,919,317 | ||||||||||||||||||||||||||||||||||||
Land use right value | 2,134,113 | 2,134,113 | 2,389,920 | ||||||||||||||||||||||||||||||||||||
Repayment of loan | 327,449 | $ 911,972 | |||||||||||||||||||||||||||||||||||||
Additional borrowings | 339,132 | 177,757 | |||||||||||||||||||||||||||||||||||||
Asset Pledged as Collateral [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Machinery and equipment | $ 1,600,000 | ¥ 2,300,000 | |||||||||||||||||||||||||||||||||||||
Land use right value | $ 5,440,000 | ¥ 35,200,000 | |||||||||||||||||||||||||||||||||||||
Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, interest rate | 1% | ||||||||||||||||||||||||||||||||||||||
Converted common shares | shares | 17,235 | 427,323 | |||||||||||||||||||||||||||||||||||||
Debt conersion price | $ / shares | $ 2.5 | ||||||||||||||||||||||||||||||||||||||
Additional borrowings | $ 7,550 | ||||||||||||||||||||||||||||||||||||||
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. | ||||||||||||||||||||||||||||||||||||||
September 1, 2021 [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, maturity date | Mar. 30, 2023 | ||||||||||||||||||||||||||||||||||||||
September 1, 2021 [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, maturity date | Aug. 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Term Loan [Member] | Ningbo Fenghua Rural Commercial Bank Co., Ltd [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, face amount | $ 2,017,005 | $ 2,298,851 | $ 383,142 | 13,000,000 | ¥ 15,000,000 | ¥ 2,500,000 | $ 459,770 | ¥ 3,000,000 | |||||||||||||||||||||||||||||||
Borrowings, interest rate | 4.70% | 6.42% | 4.50% | ||||||||||||||||||||||||||||||||||||
Repayment of loan | ¥ | ¥ 2,000,000 | ||||||||||||||||||||||||||||||||||||||
Borrowings, outstanding | 1,827,511 | 1,827,511 | 2,046,567 | ||||||||||||||||||||||||||||||||||||
Term Loan [Member] | Ningbo Fenghua Rural Commercial Bank Co., Ltd [Member] | Asset Pledged as Collateral [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, face amount | ¥ | ¥ 2,500,000 | ||||||||||||||||||||||||||||||||||||||
Term Loan [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, face amount | $ 154,832 | $ 774,401 | $ 153,257 | ¥ 1,000,000 | ¥ 5,000,000 | ¥ 1,000,000 | $ 1,077,308 | ¥ 7,500,000 | |||||||||||||||||||||||||||||||
Borrowings, interest rate | 13% | ||||||||||||||||||||||||||||||||||||||
Repayment of loan | $ 770,000 | ¥ 118,008 | |||||||||||||||||||||||||||||||||||||
Borrowings, outstanding | $ 287,282 | ¥ 2 | |||||||||||||||||||||||||||||||||||||
Convertible, borrowings | $ 43,173,000,000 | $ 7,500,000 | |||||||||||||||||||||||||||||||||||||
April 30, 2021 Term Loan [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, outstanding | 386,589 | 386,589 | ¥ 2,750,000 | 550,999 | ¥ 3,500,000 | ||||||||||||||||||||||||||||||||||
September 1, 2021 Term Loan [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, outstanding | 95,593 | 95,593 | 680,000 | 125,943 | 800,000 | ||||||||||||||||||||||||||||||||||
September 30, 2022 [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, face amount | $ 150,798 | ¥ 500,000 | |||||||||||||||||||||||||||||||||||||
Short-Term Debt [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, face amount | $ 247,732 | ¥ 1,600,000 | |||||||||||||||||||||||||||||||||||||
Borrowings, interest rate | 8% | ||||||||||||||||||||||||||||||||||||||
Repayment of loan | ¥ | ¥ 69,256 | ¥ 85,453 | |||||||||||||||||||||||||||||||||||||
September 1, 2021 Term Loan One [Member] | Unrelated Individual [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Borrowings, outstanding | 81,113 | 81,113 | ¥ 600,000 | 165,300 | ¥ 1,050,000 | ||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
Loa, outstanding | $ 166,062 | 9,840 | 9,840 | $ 301,453 | |||||||||||||||||||||||||||||||||||
Personal Loan [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Personal loan | $ 20,901 | ||||||||||||||||||||||||||||||||||||||
Repayment of debt | $ 10,451 | ||||||||||||||||||||||||||||||||||||||
Bank Loan [Member] | |||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||
Interest expense | $ 50,765 | $ 82,550 | $ 153,333 | $ 168,576 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) ¥ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Oct. 01, 2022 | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 30, 2020 USD ($) | Nov. 30, 2020 CNY (¥) | |
Related Party Transaction [Line Items] | |||||||||
Related party transaction | The Deposit bears no interest and due on demand. Due to less procurement of raw materials made from Yongliansen in 2022 and to purchase for the remaining year as planned, RLSP requested Yongliansen to refund the RMB 15 million ($2,108,667 as of September 30, 2022) and Yongliansen has agreed to fully refund us by December 31, 2022. | ||||||||
Ownership description | Effective on October 1, 2022, Ms. Hua reduced her ownership of Shanghai Xinsen from 90% to 15%, and so accordingly reduced her indirect ownership of Hangzhou Xinsen from 63% 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. Sales commission incurred in each period is recorded as part of selling expense of the Company. | ||||||||
Founder and Officer [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related party | $ 469,902 | $ 469,902 | $ 138,795 | ||||||
Sales Under Indirect Supply Model [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, purchases | 510,034 | $ 2,933,767 | 4,229,247 | $ 10,083,049 | |||||
Due from related party | 2,997,351 | 2,997,351 | 2,918,850 | ||||||
Accounts Payable, Current | 18,337 | 18,337 | 20,535 | ||||||
Vendor C [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, purchases | 557,569 | 512,215 | |||||||
Due from related party | 29,718 | 29,718 | 453,679 | $ 2,298,851 | ¥ 15 | ||||
Vendor C [Member] | Raw Materials [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, purchases | 1,685,360 | 59,735 | |||||||
Vendor A [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, purchases | 523,970 | 3,697,640 | 4,317,414 | 11,152,785 | |||||
Due from related party | 1,330,458 | 1,330,458 | $ 2,115,497 | ||||||
Vendor B [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, purchases | 79,091 | ||||||||
Due from related party | 648,019 | $ 821,962 | 648,019 | $ 821,962 | $ 6,835,124 | ||||
Due from related party | $ 3,849,124 | $ 3,849,124 | |||||||
Shanghai Haozong Rubber & Plastic Technology Co., Ltd [Member] | Jun Tong [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage | 30% | 30% | |||||||
Shanghai Xinsen Import & Export Co., Ltd [Member] | Xingxiu Hua [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage | 90% | 90% | 15% | ||||||
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] | Shanghai Xinsen [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage | 70% | 70% | |||||||
Xinsen Sealing Products (Hangzhou) Co., Ltd [Member] | Hua [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage | 63% | 63% |
Shareholders_ Equity (Details N
Shareholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 13, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 06, 2021 | May 27, 2021 | May 18, 2021 | Jul. 08, 2019 | |
Equity [Abstract] | |||||||||
Registered capital | $ 20,000,000 | ||||||||
Cash | $ 50,500 | $ 301,990 | |||||||
Common stock shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Preferred stock shares, authorized | 40,000,000 | 40,000,000 | 40,000,000 | ||||||
Preferred stock par value | $ 0.001 | ||||||||
Common Stock, Shares, Outstanding | 40,976,458 | 40,976,458 | 40,000,000 | ||||||
Common Stock, Shares, Issued | 444,558 | 55,000 | 381,000 | 40,976,458 | 40,976,458 | ||||
Common stock conversion price | $ 2.5 | $ 2.5 | |||||||
Subscriptions receivable | $ 1,090,000 | ||||||||
Number of shares authorized | 5,000,000 | ||||||||
Share-based compensation, grant | 295,900 | ||||||||
Share-based compensation, vested | $ 239,750 | ||||||||
Loan conversion, amount | $ 1,111,395 |
Commitment and contingencies (D
Commitment and contingencies (Details Narrative) | Apr. 20, 2021 USD ($) | Apr. 20, 2021 CNY (¥) | Sep. 18, 2020 USD ($) | Sep. 18, 2020 CNY (¥) | Oct. 19, 2019 USD ($) | Oct. 19, 2019 CNY (¥) | Aug. 01, 2022 USD ($) | Aug. 01, 2022 CNY (¥) | Jul. 05, 2022 CNY (¥) | Apr. 20, 2021 CNY (¥) | Oct. 31, 2019 USD ($) | Oct. 31, 2019 CNY (¥) |
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||
Litigation settlement, unpaid balance | $ 46,454 | ¥ 300,000 | ||||||||||
Lease payments | $ 58,855 | ¥ 380,000 | ||||||||||
Settlement Agreement [Member] | ||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||
Purchase from related party | $ 31,000 | ¥ 200,000 | ||||||||||
Related party unapid purchase amount | ¥ 170,000 | $ 5,000 | ¥ 30,000 | |||||||||
Settlement Agreement [Member] | GFMP [Member] | ||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||
Related party unapid purchase amount | $ 20,000 | ¥ 131,850 | ||||||||||
Construction Contract [Member] | ||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||
Related party transaction | $ 5,420,810 | ¥ 35 |
Schedule of Federal Effective T
Schedule of Federal Effective Tax Rate (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal income tax rate | 21% | 21% |
Tax rate difference | 4% | 4% |
Tax except | ||
Nontaxable items | ||
GILTI tax | ||
Others | ||
Valuation allowance | (23.30%) | (25.00%) |
Effective tax rate | 1.70% | (0.00%) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Corporate tax rate | 21% | ||||
PRC applies, Income tax rate | 25% | ||||
Income tax expense | $ (166) | $ 7,672 | |||
Income tax payable | $ 237,670 | $ 237,670 | $ 229,579 |
Schedule of Business Line Distr
Schedule of Business Line Distribution (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,953,104 | $ 3,411,807 | $ 7,870,286 | $ 11,529,890 | |
Income(loss) from operations | 75,995 | (1,103,289) | (115,621) | (1,856,744) | |
Net income(loss) | 11,990 | (1,189,285) | (287,710) | (2,038,998) | |
Reportable assets | 13,533,534 | 13,533,534 | $ 14,997,772 | ||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,953,104 | $ 3,411,807 | $ 7,870,286 | $ 11,529,890 | |
Gross profit | 18% | (14.00%) | 8% | (7.00%) | |
Operating Segments [Member] | Corporate Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income(loss) from operations | $ (36,468) | $ (88,220) | |||
Net income(loss) | (36,468) | (88,220) | |||
Reportable assets | 290 | 290 | 1,230 | ||
Operating Segments [Member] | Direct Supply Model [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,443,070 | $ 478,040 | $ 3,641,039 | $ 1,446,841 | |
Gross profit | 22% | 18% | 19% | (0.00%) | |
Income(loss) from operations | $ 156,840 | $ (458,444) | $ 182,709 | $ (837,392) | |
Net income(loss) | 92,834 | (544,440) | 10,620 | (1,019,646) | |
Reportable assets | 10,535,893 | 10,535,893 | 12,077,692 | ||
Operating Segments [Member] | Indirect Supply Model [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 510,034 | $ 2,933,767 | $ 4,229,247 | $ 10,083,049 | |
Gross profit | (3.00%) | (19.00%) | (2.00%) | (9.00%) | |
Income(loss) from operations | $ (44,377) | $ (644,845) | $ (210,110) | $ (1,019,352) | |
Net income(loss) | (44,376) | $ (644,845) | (210,110) | $ (1,019,352) | |
Reportable assets | $ 2,997,351 | $ 2,997,351 | $ 2,918,850 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Operating segment | 2 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Oct. 01, 2022 | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Subsequent Event [Line Items] | ||||
Notes payable | ¥ | ¥ 645,569 | ¥ 665,377 | ||
Shanghai Xinsen Import & Export Co., Ltd [Member] | Xingxiu Hua [Member] | ||||
Subsequent Event [Line Items] | ||||
Ownership percentage | 15% | 90% | 90% | |
Ningbo Bank [Member] | ||||
Subsequent Event [Line Items] | ||||
Notes payable | $ | $ 806,134 |