{"url_path":"/sec/rlea/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Legal Proceedings.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1893657/0001493152-26-023097-index.html","accession_number":"0001493152-26-023097","cik":"0001893657","ticker":"RLEA","issuer_name":"Rubber Leaf Inc","edgar_url":"https://www.sec.gov/Archives/edgar/data/1893657/0001493152-26-023097-index.html","primary_entity_key":"0001893657","primary_entity_name":"Rubber Leaf Inc"},"word_count":801,"has_tables":true,"body_markdown":"**Item\n1. Legal Proceedings.**\n\n \n\nExcept\nas set forth below, we know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any\nmaterial proceeding or pending litigation, and there are no proceedings in which any of our directors, officers or affiliates, or any\nregistered or beneficial stockholder, is an adverse party or has a material interest adverse to our Company.\n\n \n\nIn\nMarch 2024, RLSP filed a complaint against Ningbo Rongsen Construction Co., Ltd (“Ningbo Rongsen”) with the Ningbo Fenghua\nDistrict People’s Court of China, challenging the overvalued construction costs of our newly constructed factory. The case has\nbeen filed with the case number being (2024) Zhejiang 0213 Minchu No. 2289.\n\n \n\nConcurrently\nwith the RLSP filing mentioned above, Zhejiang Fengrong Construction Co., Ltd. (a.k.a Ningbo Rongsen) also filed a complaint against\nRLSP with the Ningbo Fenghua District People’s Court demanding RLSP to pay full construction costs, overdue penalty, attorney fees\nand other costs totaling US$7,163,361 (RMB50,844,103.89). The Ningbo Fenghua District People’s Court accepted the case filing.\nNingbo Rongsen claimed that RLSP shall pay in accordance with the Settlement Payment Agreement and RLSP shall be responsible for the\nlate payment.\n\n \n\nOn\nDecember 30, 2024, Ningbo Intermediate People’s Court made a final ruling concerning the above dispute, ordering RLSP to pay 1)\nUS$6,956,830.46 (RMB49,378,191.44); and 2) late payment interests incurring from March 1, 2024 to the date of full payment at an interest\nrate of 1% per month; and 3) other expenses of US$4,226 (RMB30,000). RLSP has decided to initiate the re-trial proceeding and will file\nthe application with Zhejiang High People’s Court of China within the statutory 6-month period upon the final ruling.\n\n \n\nIn\nMay 2024, RLSP received a Notice of Legal Action from Taicang People’s Court of China, with RLSP being a co-defendant under\na goods purchase contract dispute with case number (2024) SU0585 Minchu No. 3400. This lawsuit was initiated by Hecheng Special Rubber\n(Taicang) Co., Ltd. (“Taicang Hecheng”), claiming that RLSP and Yongliansen, acting as co-buyers, have purchased EPDM rubber\nfrom Taicang Hecheng since April 2023 but failed to pay purchase price for an aggregate amount of US$132,836.92 (RMB942,849.86). Taicang\nHecheng therefore filed a complaint against RLSP and Yongliansen for the outstanding purchase price and the late payment fee.\n\n \n\nIn\nAugust 2024, Rubber Leaf Sealing Parts (Zhejiang) Co., Ltd. (“RLSP”) received a Notice of Legal Action from the Taicang People’s\nCourt of China, where RLSP was named as a co-defendant alongside Yongliansen in a goods purchase contract dispute, under case number\n(2024) SU 0585 Minchu No. 10874. The lawsuit was initiated by Jiangsu Guanlian New Materials Technology Co., Ltd. (“Guanlian”),\nasserting that RLSP and Yongliansen, acting as co-buyers, had purchased goods from Guanlian since April 2023 but failed to settle the\noutstanding payment. The claimed amount totals RMB 823,695.12 (approximately US$116,013.40 based on exchange rates as of March 2025),\nrepresenting the unpaid purchase price. Guanlian has demanded immediate payment of the overdue amount of RMB 823,695.12, along with a\nlate payment penalty calculated at a rate of 0.3% per day on the principal amount, starting from July 4, 2023, until the date of actual\npayment. Additionally, Guanlian seeks to hold RLSP jointly and severally liable for the debt and requests that both defendants bear the\nfull litigation costs.\n\n \n\nIn\nAugust 2024, Wuhan Economic and Technological Development Zone People’s Court accepted a case initiated by eGT against RLSP for a refund of a portion of the prepayment at US$1,063,316 (RMB7,547,203.80). RLSP argued eGT and RLSP started a business collaboration from\nSeptember 2019 and signed around 29 advance payment agreements. The contract payment model was changed to a post-payment structure in\nJune 2022. Since then, RLSP has continued to supply goods, which have not been fully settled. RLSP seeks full settlement of all outstanding receivables, including such outstanding amount for the transactions after June 2022, while eGT insisted that the prepayment shall\nnot cover such purchases after June 2022. On November 4, 2024, Wuhan Economic and Technological Development Zone People’s Court\nruled that RLSP shall refund eGT US$1,045,196 (RMB7,418,594.09) plus late payment interest incurring from August 2, 2024 at the rate\nof 3.35% per annum and RLSP shall claim any outstanding receivables through a separate lawsuit. An appeal has been filed by RLSP\nand the case is currently under review by Wuhan Intermediate People’s Court of China.\n\n \n\nAfter\nthe disposition of RLSP, and in accordance with the Share Purchase Agreement with Yongliansen, from and after the Closing, the following\nmatters relating to RLSP shall be solely borne by Yongliansen and RLSP shall have no recourse against the Company: (i) all existing\ndebts and obligations of the RLSP; (ii) all future debts, losses and obligations (including contingent matters); (iii) all ongoing, pending\nand potential future litigation, arbitration, administrative penalties or other disputes relating to RLSP."}