Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 3 – Related Party Transactions
Purchase
In order to reduce purchase costs and enhance purchasing power, the Company purchases the main raw materials from Yongliansen Import and Export Trading Company (“Yongliansen”) during six months ended June 30, 2026. The Company’s Chief Executive Officer, Xingxiu Hua, holds 30% of the outstanding equity of Yongliansen
For the six months ended June 30, 2026 and 2025, RLHK purchased rubber products from Yongliansen in the total amount of $ and $, respectively.
For the three months ended June 30, 2026 and 2025, RLHK purchased rubber products from Yongliansen in the total amount of $ and $, respectively.
On November 3, 2025, the Company entered into a tripartite payment direction, settlement acknowledgement and waiver agreement, pursuant to which a portion of the amounts payable to Yongliansen was settled through a direct payment by RLHK’s designated party, Shanghai Xinsen, which had received proceeds from product sales made by RLHK. As a result, accounts payable to Yongliansen in the amount of $3,809,179 were offset against accounts receivable from Shanghai Xinsen for the six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, RLHK had accounts payable to Yongliansen of $4,505,382 and $2,498,787, respectively.
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 Shanghai Huaxin (“Customer D”) as our distributors. The Company’s President, Ms. Xingxiu Hua, holds 15% ownership of Shanghai Xinsen, which is a rubber product trading expert with 20 years of experience in the auto parts market.
For the six months ended June 30, 2026 and 2025, RLHK had indirect sales through Shanghai Xinsen that were sold to one certified first-tier supplier of the Auto Manufacturers $ and $ respectively. For the three months ended June 30, 2026 and 2025, RLHK had indirect sales through Shanghai Xinsen that were sold to one certified first-tier supplier of the Auto Manufacturers $ and $ respectively. As of June 30, 2026 the accounts receivable due to Shanghai Xinsen were $. As of December 31, 2025, the accounts receivable due from Shanghai Xinsen were $788,834, arising from normal business transactions.
For the six months ended June 30, 2026 and 2025, RLHK had indirect sales through Shanghai Huaxin that were sold to one certified first-tier supplier of the Auto Manufacturers $6,038,954 and $ respectively. For the three months ended June 30, 2026 and 2025, RLHK had indirect sales through Shanghai Huaxin that were sold to one certified first-tier supplier of the Auto Manufacturers $2,774,030 and $ respectively. As of June 30, 2026 and December 31, 2025, the accounts receivable due from Shanghai Huaxin were $8,545,150 and $2,506,196 respectively, arising from normal business transactions.
Disposal of subsidiary
On November 20, 2025, the Company entered into a Share Purchase Agreement with Yongliansen, pursuant to which the Company sold all of its equity interests in RLSP for total consideration of $3.0 million, payable in three installment payments of $1.0 million each, with payments due on or before June 2027, June 2028, and June 2029, respectively.
In accordance with ASC 835-30, Interest—Imputation of Interest, the Company evaluated the long-term receivable arising from the installment arrangement and initially recorded such receivable at its present value. As of June 30, 2026 and December 31, 2025, the Company had a long-term accounts receivable balance of $2,828,938 and $2,787,131 due from Yongliansen, measured using an incremental borrowing rate of 3.0%
Others
As of June 30, 2026 and December 31, 2025, our CEO Mrs. Xingxiu Hua and CFO Mr. Hua Wang funded the Company and RLHK in the total amounts of $3,289,091 and $3,174,291 for their daily operations, respectively. The payable amounts bear no interest and are due on demand.
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