Rubber Leaf Inc. Reports 31% Revenue Decline and $2.20 Million Net Loss for Fiscal Year 2024

Rubber Leaf Inc. has reported significant financial challenges in its 10-K filing for the fiscal year ending December 31, 2024. The company generated total revenues of $6.93 million, a decrease of approximately 31% from $9.99 million in the previous year. This decline is attributed primarily to a halt in production under its direct supply model, which has not resumed since July 2023, and a lack of indirect supply orders due to ongoing legal disputes that have frozen the company's bank accounts. The net loss for the year was $2.20 million, compared to a loss of $1.40 million in 2023, reflecting a worsening financial position.

Operationally, Rubber Leaf has faced several setbacks, including a loss of factory relocation costs amounting to $359,015 and an idle capacity loss of $365,310 due to underutilization of its manufacturing facilities. The company has also reported a significant reliance on a single customer, Shanghai Xinsen, which accounted for 100% of its revenues in 2024. This concentration poses risks, as any disruption in the purchasing policies of this customer could severely impact the company's financial health.

In terms of strategic developments, Rubber Leaf has made efforts to diversify its revenue streams by introducing an OEM supply model in October 2024, which generated some revenue but has not yet scaled up significantly. The company has also been involved in legal proceedings related to construction costs and supplier agreements, which have further complicated its operational landscape. As of December 31, 2024, the company had a negative working capital of $14.26 million and an accumulated deficit of $5.42 million, raising substantial doubt about its ability to continue as a going concern.

Looking ahead, Rubber Leaf is exploring options to stabilize its financial situation, including accessing a line of credit of approximately $3.6 million from the Industrial and Commercial Bank of China. However, the ongoing litigation and account freezes have hindered its ability to utilize this facility. Management remains optimistic about resolving these legal issues and returning to normal operations, but acknowledges that the path forward will require additional capital and strategic adjustments to regain financial stability.

Overall, Rubber Leaf Inc. is navigating a challenging environment marked by declining revenues, operational disruptions, and significant legal hurdles. The company's future performance will depend on its ability to resolve these issues, stabilize its customer relationships, and effectively implement its new business strategies.