Rubber Leaf Inc. (RLI) reported its financial results for the nine months ended September 30, 2024, showing a total revenue of $6.9 million, a 10% increase from $6.3 million in the same period of 2023. The growth in revenue was primarily driven by sales to a key customer, which accounted for 100% of total revenue in both periods. However, the company faced significant challenges, as total cost of sales rose to $7.5 million, up 21% from $6.1 million in the prior year, resulting in a gross loss of $535,909 compared to a gross profit of $127,732 in 2023.

Operating expenses also increased substantially, reaching $949,476, a 71% rise from $554,182 in the previous year. This led to a loss from operations of $1.5 million, compared to a loss of $426,450 in the same period of 2023. The net loss for the nine months ended September 30, 2024, was $1.8 million, significantly higher than the $591,529 loss reported in the prior year.

For the third quarter alone, RLI generated revenue of $2.0 million, an 11% increase from $1.8 million in the same quarter of 2023. However, the cost of sales also increased to $2.2 million, leading to a gross loss of $181,127, slightly worse than the loss of $173,196 in the prior year. The net loss for the third quarter was $474,481, compared to $360,916 in the same quarter of 2023.

As of September 30, 2024, RLI's total assets increased to $21.1 million from $19.8 million at the end of 2023, while total liabilities rose to $23.1 million from $20.1 million. The accumulated deficit grew to $5.0 million, up from $3.2 million at the end of the previous fiscal year. The company’s cash position decreased to $28,618 from $41,687, reflecting increased cash used in operating activities.

RLI has also secured a line of credit of $7.75 million from the Industrial and Commercial Bank of China, which is collateralized by a new factory building and land use rights. The company is currently addressing material weaknesses in its internal controls over financial reporting, attributed to a lack of knowledge of U.S. GAAP and inadequate segregation of duties. Management has initiated a review to improve these controls.