Rubber Leaf Inc (RLEA) is a Nevada holding company operating through its wholly owned Hong Kong subsidiary, Rubber Leaf Limited (RLHK), incorporated September 22, 2025. The PRC manufacturing subsidiary RLSP was disposed of November 20, 2025 via sale to Yongliansen (a related party in which the CEO holds 30% equity) for $3.0 million payable in three $1.0 million installments due June 2027, June 2028, and June 2029. The current entity is a pure trading intermediary with no owned PP&E or inventory on balance sheet. Under a liquidation lens as of March 31, 2026, the recovery posture is deeply negative. Total assets of $8.58 million are dominated by related-party receivables that carry elevated collectability risk: current accounts receivable from related parties of approximately $5.77 million (100% concentration in a single related-party customer, Shanghai Huaxin) plus $2.81 million in long-term receivables representing the present-valued installment proceeds from the RLSP sale to Yongliansen. Applying a 90% haircut to the current AR yields approximately $5.19 million recoverable; the long-term receivable from the RLSP disposal is a seller-financed note owed by the same related party that bought the subsidiary from the CEO-controlled entity — collectability is structurally uncertain, and a liquidation haircut of 50-60% is defensible, yielding roughly $1.4-1.7 million. Cash is de minimis at $3,221. Against these haircut assets, total liabilities at face value are $8.05 million: $4.49 million in accounts payable to related party Yongliansen (the same entity that owes the long-term receivable), $3.48 million in other payables to related parties (CEO/CFO demand loans, zero interest), $0.02 million in other current liabilities, and $0.06 million in deferred tax liabilities. The result is estimated liquidation recovery to equity of approximately negative $1.2 to negative $1.5 million under base assumptions, confirming the MFFAIS CLV/LLV/OLV reading of negative $5.7 million is likely overstated on the liability side but the structural negative recovery is consistent. Compared to December 31, 2025 (prior 10-K), total liabilities increased by $2.26 million driven entirely by a $1.99 million increase in related-party AP to Yongliansen ($2.50M to $4.49M) and $0.10 million increase in related-party other payables. Simultaneously, current AR from related parties grew by approximately $3.26 million reflecting Q1 2026 revenue of $3.26 million billed to Shanghai Huaxin but not yet collected. The balance sheet is entirely related-party driven on both sides: revenues, receivables, cost of goods, payables, the RLSP disposal receivable, and the CEO/CFO demand loans are all intra-related-party flows. Filing discloses material weaknesses in internal controls. No intangible assets, no PP&E, no inventory, no lease obligations, no pension. TAG_CONTEXT provided zero XBRL tags; all quantitative values are sourced from the filing narrative and balance sheet HTML. Filing does not separately tag any balance sheet line items in its XBRL submission as reported in TAG_CONTEXT.
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