Financial Performance - Net revenues for the first quarter of 2025 increased by 23% to $1,604,447 from $1,307,062 in the previous year[2] - Cost of revenue decreased by 25% to $1,594,270 compared to $2,119,845 in the prior year, resulting in a gross profit of $10,177 compared to a gross loss of ($812,783)[2] - The loss from operations improved by 13% to ($4,610,207) from ($5,269,419) year-over-year[2] - The net loss for the quarter was ($4,629,500), compared to a net loss of ($3,992,132) in the previous year, resulting in a net loss per share of ($0.40) compared to ($0.37)[3] - For the three-month period ended March 31, 2025, Gulf Resources reported a net loss of $4,629,500, compared to a net loss of $3,992,132 for the same period in 2024, indicating a year-over-year increase in losses of approximately 16%[16] - Net cash used in operating activities for the three-month period was $1,580,128, an increase from $1,330,476 in the prior year, reflecting a 19% rise in cash outflow[16] - Cash and cash equivalents at the end of the period were $8,523,045, down from $70,761,796 at the end of the same period in 2024, representing a significant decrease of approximately 88%[16] - The cash paid for taxes during the three-month period was $77,386, a significant decrease from $481,153 in the same period last year, reflecting a reduction of approximately 84%[16] - Interest on finance lease obligations decreased slightly to $21,722 from $24,830 year-over-year, showing a reduction of about 13%[16] Revenue Breakdown - Bromine revenues rose by 29% to $1,481,869, with an average selling price increase of 45% to $3,684 per tonne[7] - Crude salt revenues increased by 5% to $122,578, with sales volume rising to 4,733 tonnes from 4,071 tonnes[9] Assets and Liabilities - As of March 31, 2025, total assets were $165,729,939, with total liabilities of $23,145,112 and shareholders' equity of $142,584,827[6] Strategic Initiatives - The company is exploring joint-venture opportunities in the chemicals sector and has postponed the completion of its chemical factory until a clear path to profitability is identified[11] - Management has made significant capital expenditures for flood prevention and acquiring additional crude salt fields to capitalize on future demand[11] - The company is in discussions with local governments in Sichuan Province to develop natural gas and brine resources, indicating potential future growth opportunities[11] - Gulf Resources operates through four subsidiaries, positioning itself as one of the largest producers of bromine in China, which is essential for various industrial applications[17] - The company is focused on developing natural gas and brine resources, including bromine and crude salt, through its subsidiary DCHC[17] Risks and Outlook - Gulf Resources faces risks including economic conditions in China, competition in the bromine market, and potential impacts from the COVID-19 pandemic, which could affect future performance[18] - The company has not made any forward-looking statements regarding new product developments or market expansions in this release[18]

Core Viewpoint - Gulf Resources, Inc. reported a net revenue increase of 23% for Q1 2025, despite ongoing operational challenges and losses, indicating potential recovery in the bromine market [2][3][11]. Financial Performance - Net revenues for the quarter ended March 31, 2025, were $1,604,447, up from $1,307,062 in the same period last year, marking a 23% increase [2]. - Cost of revenue decreased by 25% to $1,594,270 from $2,119,845, leading to a gross profit of $10,177 compared to a gross loss of ($812,783) [2]. - General and administrative expenses surged by 94% to $1,389,523 from $717,456, while sales and marketing expenses rose by 13% [2]. - The loss from operations improved by 13% to ($4,610,207) from ($5,269,419) year-over-year [2]. Segment Reporting - Bromine revenues increased to $1,481,869 from $1,146,197, with an average selling price rising by 45% to $3,684 from $2,540 [7]. - Crude salt revenues rose by 5% to $122,578, with sales volume increasing to 4,733 tonnes from 4,071 tonnes, although the price declined by 9.6% [9]. - Chemical products reported no revenues, with an operating loss of ($358,629) [10]. Cash Flow and Balance Sheet - As of March 31, 2025, cash was $8,523,045, with total assets amounting to $165,729,939 and total liabilities at $23,145,112 [6][12]. - Net cash used in operations was ($1,580,128), compared to ($1,330,476) in the previous year [5]. Management Commentary - The Chairman and CEO highlighted ongoing investments in flood prevention and crude salt fields, anticipating improved demand and pricing for bromine [11]. - The company is exploring joint-venture opportunities and potential natural gas projects in Sichuan Province, indicating a strategic focus on resource development [11].

Company Operations - The company operates through four segments: bromine, crude salt, chemical products, and natural gas[142]. - The company is one of the largest producers of bromine in China, with significant applications in various industries[143]. - In June 2024, the company entered into acquisition agreements for crude salt fields totaling approximately 4,000,000 square meters, with total transfer prices ranging from RMB20,790,000 to RMB129,472,000[155][156][157][158][159][160]. - The company resumed bromine production in March 2020 after receiving government approvals, which were critical for meeting the demand for bromide products during the epidemic[149]. - Factory No. 8 started contributing revenue in Q4 2022 after receiving government approval to resume production in August 2022[150]. - The company is awaiting governmental approval for factories No. 2 and No. 10, which may require modifications to current wells and aqueducts[151]. - The company has secured land use rights for its new chemical plant at Bohai Marine Fine Chemical Industry Park, with construction expected to take approximately one year[152]. - The company plans to proceed with applications for natural gas and brine project approvals after governmental planning is finalized in Sichuan Province[153]. Financial Performance - Net revenue for the three-month period ended March 31, 2025, was $1,604,447, representing a 23% increase compared to $1,307,062 for the same period in 2024[171]. - Gross profit for the three-month period ended March 31, 2025, was $10,177, a significant improvement from a gross loss of $812,783 in the same period in 2024[183]. - The bromine segment generated net revenue of $1,481,869 for the three-month period ended March 31, 2025, up 29% from $1,146,197 in 2024, despite an 11% decrease in tonnes sold[173]. - The crude salt segment reported net revenue of $122,578 for the three-month period ended March 31, 2025, a 5% increase from $116,671 in 2024, driven by a 16% increase in tonnes sold[174]. - The cost of net revenue decreased by $525,575 (25%) to $1,594,270 for the three-month period ended March 31, 2025, compared to $2,119,845 in 2024[177]. - The gross profit margin for the bromine segment improved to -3.5% in the three-month period ended March 31, 2025, from -81% in the same period in 2024[185]. - Direct labor and factory overheads incurred during the plant shutdown amounted to $3,225,808 for the three-month period ended March 31, 2025, down from $3,734,689 in 2024[188]. - Loss from operations decreased to $4,610,207 for the three-month period ended March 31, 2025, from a loss of $5,269,419 in the same period in 2024[190]. - The bromine segment reported a loss from operations of $3,370,836, a decrease from $4,782,815 in the same period in 2024, attributed to a 45% increase in average selling price despite an 11% decrease in tonnes sold[192]. - The crude salt segment experienced a loss from operations of $554,062, compared to a loss of $75,092 in the same period in 2024, with sales rising by 16%[193]. - Net loss for the three-month period ended March 31, 2025, was $4,629,500, compared to a net loss of $3,992,132 in the same period in 2024[196]. Cash Flow and Financial Position - Cash and cash equivalents decreased to $8,523,045 as of March 31, 2025, from $10,075,162 as of December 31, 2024, reflecting a decrease of $1,552,117[197]. - Cash flow used in operating activities was approximately $1.58 million for the three-month period ended March 31, 2025, primarily due to a net loss of $4.62 million and an increase in accounts receivable of $1.5 million[199]. - The overall accounts receivable balance increased by $1,549,699 as of March 31, 2025, compared to December 31, 2024, with 85% aged 1-30 days[202]. - Net inventory level increased by $139,688 (or 44%) as of March 31, 2025, compared to December 31, 2024, indicating an estimate of rising market demand[204]. Regulatory and Compliance Matters - The company has been granted a second 180-calendar day period until November 3, 2025, to regain compliance with the $1.00 bid price requirement on Nasdaq[163]. - The company intends to consider a reverse stock split if necessary to cure the bid price deficiency during the compliance period[167]. - The transfer of the company's common stock listing from The Nasdaq Global Select Market to The Nasdaq Capital Market took effect on May 8, 2025[163]. Administrative Expenses and Future Plans - General and administrative expenses increased by $672,067 (or 94%) to $1,389,523 for the three-month period ended March 31, 2025, compared to $717,456 in the same period in 2024[189]. - The company does not anticipate paying cash dividends in the foreseeable future and intends to focus on expanding its segments within the Chinese market[209]. - The company believes that government regulations aim to improve environmental standards rather than close all plants, indicating a focus on compliance and sustainability[146].

Corporate Structure and Acquisitions - The company owns 100% of Upper Class Group Limited, which in turn owns 100% of Hong Kong Jiaxing, SCHC, and SYCI, reflecting a linear corporate structure[20] - On February 4, 2015, the company issued 7,268,011 shares at a closing market price of $1.84 per share to acquire SCRC, a leading manufacturer of materials for antibiotics in China[22] - The purchase price for SCRC shares was based on a valuation of $10.00, representing a 73% premium to the price on the day the agreement was reached[23] - The company established a new subsidiary, Daying County Haoyuan Chemical Company Limited, with registered capital of RMB50,000,000 to explore natural gas and brine resources in China[25] - In June 2024, the company entered into acquisition agreements for crude salt fields, with a total transfer price of RMB129,472,000 for 2,380,000 square meters from Seller A[29] - The company agreed to pay 80% of the transfer price upfront and the remaining 20% in common stock within three months after inspection and acceptance of the crude salt fields[30] - On February 28, 2025, the company closed the transactions related to the acquisition agreements, issuing a total of 2,059,694 shares at a price of $1.50 per share[37] Compliance and Regulatory Issues - The company received a notice from Nasdaq on April 18, 2024, for failing to timely file its Annual Report on Form 10-K, impacting its compliance with listing requirements[38] - Nasdaq granted an exception on June 26, 2024, allowing the company until October 14, 2024, to file delinquent reports to regain compliance[39] - The company successfully filed the required reports by October 15, 2024, and was determined to be in compliance with Nasdaq listing rules[41] - The Company received a Nasdaq Price Deficiency Letter due to its common stock bid price closing below $1.00 per share for 34 consecutive business days, with a compliance deadline until May 5, 2025[42] - The Company has the option to regain compliance by closing at $1.00 or more for 10 consecutive business days before the deadline[42] - The Company is subject to the Holding Foreign Companies Accountable Act, which may lead to delisting if the PCAOB cannot inspect audit documentation located in China[64] - The PCAOB has secured complete access to inspect and investigate PCAOB-registered public accounting firms in China, but future access remains uncertain[64] - Recent regulatory developments in China may impact the Company's operations and ability to offer securities to investors[49] Financial Performance and Revenue - The Company wrote off a net book value of $18,644,473 for the demolition of three bromine factories in 2018, along with an impairment loss of $1,284,832 on related mineral rights[67] - The Company incurred relocation costs of approximately $45,584,344 for the new chemical factory as of December 31, 2024[72] - The Company expects to generate sales and earnings in the chemical segment at levels well above previous periods due to reduced capacity in the industry[74] - Sales to the three largest bromine customers in 2024 totaled $1,969,624, representing approximately 35% of total net revenue from bromine sales[92] - In 2024, sales to the three largest crude salt customers totaled $2,049,988, representing approximately 100% of total net revenue from crude salt sales, with the largest customer accounting for 38%[94] - Net revenue from natural gas decreased from $150,861 in 2023 to $61,207 in 2024, indicating a decline of approximately 59%[96] Operational Developments - The Company has secured land for a new chemical factory and construction commenced in June 2020, although the opening has been postponed due to COVID-19[72] - The Company anticipates potential acquisition opportunities in the bromine sector as smaller producers struggle with capital for required rectifications[71] - The Company’s annual production capacity for oil and gas field exploration products was over 26,000 tons, with papermaking-related chemicals at over 5,000 tons[89] - The Company’s bromine production facilities were temporarily closed from December 15, 2024, until February 12, 2025, in compliance with government regulations[70] - The Company is awaiting governmental approval for Factories No. 2 and No. 10, which are critical for future operations[76] - The Company has established a subsidiary for crude salt production in response to new government policies, indicating strategic adaptation to regulatory changes[75] - The company completed a flood prevention project in December 2023 to safeguard its bromine facilities[106] - The company is engaged in ongoing discussions with the government of Daying County regarding a joint venture for the exploration and production of natural gas and brine products in Sichuan[100] - The company’s factories No. 7 and No. 1 resumed trial production in March 2020 and commenced commercial production on April 3, 2020, after receiving necessary approvals[104] Human Resources and Talent Management - As of December 31, 2024, the company employed approximately 367 full-time employees, with 28% in management and 4% in sales and procurement[120] - The company emphasizes developing talent from within while also hiring externally to foster loyalty and commitment among employees[123] - The talent acquisition team focuses on recruiting highly skilled workers in the PRC and encourages employee referrals for open positions[123] Dividend and Profit Regulations - The Company has not made any cash or asset transfers among its subsidiaries, nor has it distributed dividends to shareholders in the reporting periods presented[58] - Current PRC regulations allow dividends to be paid only from accumulated profits, and at least 10% of after-tax profits must be set aside for statutory reserves[59] - The PRC government has implemented capital control measures that may affect the ability of the Company's subsidiaries to remit foreign currency for dividend payments[61] - A withholding tax of 10% applies to dividends payable by Chinese companies to non-PRC-resident enterprises, which may be reduced to 5% under certain conditions[62] Reporting and Disclosure - The company provides free access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K through its website[124] - As a smaller reporting company, the company is not required to disclose certain market risk information as per Regulation S-K[284]

Core Viewpoint - Gulf Resources, Inc. is experiencing significant fluctuations in its bromine segment due to changes in pricing and sales volume, impacting overall performance and profitability [1][2]. Pricing Trends - The price of bromine saw a dramatic increase during the COVID-19 pandemic, rising from RMB 28,017 per tonne in Q3 2020 to a peak of RMB 69,500 in October 2021. However, prices have since declined to RMB 17,323 in Q3 2024, with a recent recovery to RMB 22,400 as of November 17, 2024 [2][3][7]. Sales Volume and Utilization - Bromine sales have significantly decreased from 2,655 tonnes in Q3 2022 to only 655.8 tonnes in Q3 2024, leading to a drop in utilization rates from 34% in 2022 to 8% in 2024 [5][6]. - The reduction in sales volume has resulted in a 105.9% increase in the cost per tonne, rising from $2,773 to $5,709, primarily due to fixed costs being spread over a smaller production volume [6][9]. Financial Performance - The financial results reflect the impact of declining sales and prices, with revenues dropping from $19.8 million in Q3 2022 to only $1.57 million in Q3 2024, indicating a 92.1% decrease [9]. - The company reported a loss of $4.03 million in Q3 2024, compared to a loss of $2.14 million in Q3 2023, highlighting the ongoing challenges in the bromine segment [9]. Strategic Response - In response to declining prices and sales, the company has opted to limit sales to protect its mineral assets, anticipating a future price rebound [4][8].

Core Viewpoint - Gulf Resources, Inc. is expanding its operations by acquiring additional salt fields and bromine production capabilities, which is expected to enhance crude salt production and increase the number of bromine wells drilled, aligning with the anticipated recovery of the Chinese economy [1][2][3]. Group 1: Acquisition Details - The company has reached agreements to acquire five salt fields totaling 5,141,000 square meters for an aggregate purchase price of RMB 280,762,400, with 80% paid in cash and 20% in stock [2]. - The management anticipates cash-on-cash returns that may provide a payback within four to five years, which is considered a strong return on investment [3]. Group 2: Strategic Outlook - The CEO of Gulf Resources expressed confidence in the acquisitions, stating that they are positioned to maximize returns as the Chinese economy begins to recover [3]. - The company has postponed the delivery of equipment for its chemical plant due to a lack of anticipated short-term returns, contrasting this with the expected strong returns from the new salt fields and additional bromine wells [3]. Group 3: Company Overview - Gulf Resources operates through four wholly-owned subsidiaries and is one of the largest producers of bromine in China, with applications in various industries including agriculture and oil and gas [4]. - The company manufactures chemical products for diverse applications, including materials for human and animal antibiotics, and is focused on exploring natural gas and brine resources [4].

Financial Performance - Revenues for the third quarter of 2024 were $2,242,365, a decline of 61.8% compared to the same period in 2023[2] - The net loss for the third quarter was $3,492,883, resulting in a basic and diluted loss of $0.33 per share[3] - For the nine months ended September 30, 2024, total revenues were $5,932,596, a decline of 74.4% compared to the same period in 2023[5] - The net loss for the nine months was $40,582,933, with a basic and diluted loss of $3.78 per share[6] - Net loss for the period ended September 30, 2024, was $3,492,883 compared to a net loss of $1,775,797 for the same period in 2023, representing an increase in loss of approximately 96.7%[20] - Total operating costs and expenses for the nine-month period were $27,185,348, a decrease from $20,930,621 in the previous year, indicating a reduction of about 30.5%[20] - Cash flows from operating activities showed a net cash used of $293,463, a significant decline from net cash provided of $9,869,612 in the same period last year[22] - The company reported a loss on disposal of equipment amounting to $29,169,008, which was not present in the previous year's results[22] - Cash and cash equivalents at the end of the period were $11,237,493, down from $103,774,977 at the end of the same period in 2023, reflecting a decrease of approximately 89.2%[22] - The company paid $1,013,382 in taxes during the nine-month period, compared to $4,930,601 in the same period last year, indicating a decrease of about 79.5%[23] Asset and Cash Position - Cash position decreased to $11,237,493 from $72,223,894 as of December 31, 2023[8] - Total assets at the end of the third quarter were $193,885,294, down from $226,671,708 at the end of 2023[9][17] Strategic Management and Future Outlook - Management is postponing the final delivery of equipment for the chemical factory to assess industry recovery and new opportunities[11] - The company is seeking additional land for salt fields and bromine wells, anticipating strong returns in the coming years[11] - Management expressed optimism about future opportunities as the Chinese economy begins to recover and bromine prices improve[12] - Future product development and market acceptance are subject to various risks, including competition and economic conditions in China, as outlined in the forward-looking statements[25] - The company undertakes no duty to revise or update any forward-looking statements, emphasizing the uncertainty of future results[25] Production and Operations - The company is one of the largest producers of bromine in China, with operations through four wholly-owned subsidiaries focusing on chemical production and resource development[24] Investment Activities - The company’s cash flows from investing activities included a significant purchase of property, plant, and equipment totaling $60,526,213, compared to $15,197,648 in the previous year[22]

Financial Performance - For the three months ended September 30, 2024, revenues were $2,242,365, a decline of 61.8% compared to the same period in 2023 [2] - The net loss for the third quarter was $3,492,883, with a basic and diluted loss of $0.33 per share [2] - For the nine months ended September 30, 2024, revenues were $5,932,596, a decline of 74.4% compared to the same period in 2023 [3] - The net loss for the nine months was $40,582,933, with a basic and diluted loss of $3.78 per share [3] Segment Performance - Bromine revenues for the third quarter declined by 68% to $1,571,313, while crude salt revenues declined by 26% to $654,039 [2] - Losses from operations for bromine were $13,475,400 and for crude salt were $47,725 for the nine months ended September 30, 2024 [3] - The company incurred a loss of $29,169,008 from the disposition of equipment and purchased $60,526,213 worth of new equipment [3] Cash Position and Assets - Cash position declined to $11,237,493 from $72,223,894 as of December 31, 2023 [3] - Total assets at the end of the third quarter were $193,885,294, down from $226,671,708 at the end of 2023 [3][9] Management Commentary - The CEO expressed confidence in China's economic recovery and the company's return to profitability, while acknowledging the postponement of equipment delivery for the chemical factory due to lack of short-term profitability [5] - The company is seeking the best strategy for its natural gas business and is participating in a government-required flood prevention program [5] - Management is optimistic about future opportunities as bromine prices begin to improve [6] Conference Call - Gulf Resources management will host a conference call on November 20, 2024, to discuss its unaudited financial results for the nine and three months ended September 30, 2024 [6][7]

Company Operations - The Company operates through four segments: bromine, crude salt, chemical products, and natural gas[153]. - The Company is one of the largest producers of bromine in China, with significant applications in various industries[154]. - The Company plans to proceed with applications for natural gas and brine project approvals following governmental planning finalization[166]. Acquisitions and Approvals - On June 26, 2024, the Company entered into an acquisition agreement to purchase 2,380,000 square meters of crude salt field for a total price of RMB129,472,000[168]. - The Company has received governmental approvals to resume operations at several bromine factories, including Factory No. 1 and No. 7 in April 2019[159]. - The Company is awaiting governmental approval for factories No. 2 and No. 10, which may require modifications to current wells and aqueducts[164]. Financial Performance - Net revenue for the three-month period ended September 30, 2024, was $2,242,365, a decrease of 62% compared to $5,865,615 for the same period in 2023[182]. - Net revenue for the nine-month period ended September 30, 2024 was $5,932,596, a 74% decrease from $23,173,404 in the same period in 2023[211]. - The gross profit for the nine-month period ended September 30, 2024 was a loss of $5,370,923, compared to a profit of $2,708,986 in the same period in 2023, reflecting a gross profit margin decrease from 12% to 91%[225]. - Net loss for the three-month period ended September 30, 2024 was $3,492,883, compared to a net loss of $1,775,797 in the same period in 2023[210]. - The net loss for the nine-month period ended September 30, 2024, was $40,582,933, compared to a net loss of $3,015,360 in the same period in 2023[241]. Segment Performance - The bromine segment's net revenue decreased to $1,571,313, down 68% from $4,908,152 in the prior year, due to a 57% decrease in tonnes sold and a 26% decrease in average selling price[183]. - The crude salt segment reported net revenue of $654,039, a decrease of 26% from $889,556, primarily due to a 20% decrease in tonnes sold[184]. - The equipment lease segment reported net revenue of $17,013, down 75% from $67,907 in the same period in 2023[188]. - The net revenue from the chemical products segment was $0 for the nine-month period ended September 30, 2024, due to the closure of chemical factories since September 1, 2017[215]. Cost and Expenses - Direct labor and factory overheads incurred during the plant shutdown amounted to $1,736,345 for the three-month period ended September 30, 2024, compared to $1,007,689 in the same period in 2023, reflecting a 72% increase[202]. - General and administrative expenses increased to $1,002,529 for the three-month period ended September 30, 2024, up 31% from $762,884 in the same period in 2023[203]. - Direct labor and factory overhead costs incurred during the plant shutdown amounted to $7,185,537 for the nine-month period ended September 30, 2024, compared to $4,471,954 for the same period in 2023[233]. - General and administrative expenses increased by $143,697 (or 6%) to $2,409,957 for the nine-month period ended September 30, 2024, compared to $2,266,260 in 2023[234]. Loss from Operations - Loss from operations in the bromine segment was $4,029,999 for the three-month period ended September 30, 2024, compared to a loss of $2,143,203 in the same period in 2023, driven by a 57% decrease in tonnes sold and a 26% decrease in average selling price[206]. - Loss from operations in the crude salt segment was $102,657 for the three-month period ended September 30, 2024, compared to income of $500,469 in the same period in 2023, due to a 20% decrease in tonnes sold and an 8% decrease in average selling price[207]. - Loss from operations was $14,998,025 for the nine-month period ended September 30, 2024, compared to an income of $4,011,944 in the same period in 2023[235]. - The bromine segment reported a loss from operations of $13,475,400 for the nine-month period ended September 30, 2024, compared to a loss of $3,340,404 in 2023, attributed to a decrease in the average selling price of bromine from $3,493 per ton to $2,423 per ton[237]. Cash Flow and Assets - Net cash used in operating activities was approximately $293,463 for the nine-month period ended September 30, 2024, compared to cash provided of $9,869,612 in 2023[246]. - Cash and cash equivalents decreased to $11,237,493 as of September 30, 2024, from $72,223,894 as of December 31, 2023, reflecting a decrease of $60,986,401[245]. - The overall accounts receivable balance decreased by $3,678,816 as of September 30, 2024, compared to December 31, 2023[252]. - Inventory decreased by $149,390 as of September 30, 2024, compared to the net inventory level as of December 31, 2023[253]. - Approximately $60.5 million was used to acquire property, plant, and equipment during the nine-month period ended September 30, 2024[256]. Compliance Issues - The Company has been notified by Nasdaq regarding non-compliance with filing requirements, with a deadline to regain compliance by October 14, 2024[173]. - The Company received a notice from Nasdaq for not meeting the Minimum Bid Price Requirement, with a compliance deadline of May 5, 2025[175].

Company Operations - The Company operates through four segments: bromine, crude salt, chemical products, and natural gas, with significant production output in bromine, making it one of the largest producers in China[130]. - The Company plans to acquire 2,380,000 square meters of crude salt field for a total transfer price of RMB129,472,000, with 80% payable upon execution of the agreement[141]. - The Company has entered into four additional acquisition agreements for crude salt fields totaling approximately 2,761,000 square meters, with prices ranging from RMB54.00 to RMB55.70 per square meter[142][143]. - The Company temporarily halted production at its bromine facilities from December 10, 2022, to February 1, 2023, and resumed operations as planned[138]. - The Company is awaiting governmental approval for factories No. 2 and No. 10, which may require modifications to current wells and aqueducts[138]. - The Company has secured land use rights for its new chemical plant at Bohai Marine Fine Chemical Industrial Park, with construction expected to take approximately one year[139]. - The Company commenced trial production at its natural gas well field in Daying, Sichuan Province, in January 2019, but is currently awaiting necessary project approvals[140]. Financial Performance - Net revenue for the three-month period ended June 30, 2024, was $2,383,169, a decrease of 70% compared to $8,005,782 in the same period of 2023[153]. - Bromine segment net revenue decreased to $1,859,234, down 75% from $7,356,347, with a 67% reduction in tonnes sold and a 22% decrease in average selling price[156]. - Crude salt segment net revenue was $523,935, a 19% decrease from $649,435, primarily due to a 33% drop in average selling price[156]. - Gross loss for the three-month period was $2,728,889, representing a gross loss margin of 115%, compared to a gross profit of $684,340 and a margin of 9% in the same period of 2023[163]. - Loss from operations was $5,146,997 for the three-month period ended June 30, 2024, compared to a loss of $919,098 in the same period of 2023[170]. - Cost of net revenue was $5,112,058, a decrease of 30% from $7,321,442, reflecting the significant drop in net revenue[159]. - Direct labor and factory overheads during the plant shutdown amounted to $1,714,503 for the three-month period ended June 30, 2024, compared to $1,055,529 in the same period of 2023[169]. - General and administrative expenses increased to $689,972, up 16% from $593,325 in the same period of 2023[170]. - The bromine segment's gross loss margin was 154% for the three-month period ended June 30, 2024, compared to a gross profit margin of 4% in the same period of 2023[166]. - Income tax benefit for the three-month period was $1,208,110, a 527% increase from $192,699 in the same period of 2023[170]. - The net loss for the three-month period ended June 30, 2024, was $33,097,918, compared to a net income of $681,816 in the same period in 2023[176]. - Net revenue for the six-month period ended June 30, 2024, was $3,690,231, a decrease of 79% from $17,307,789 in the same period in 2023[177]. - The gross loss for the six-month period ended June 30, 2024, was $3,541,672, representing 96% of net revenue, compared to a gross profit of $3,217,273, or 19% of net revenue, in the same period in 2023[186]. - Loss from operations for the bromine segment was $9,445,401 for the six-month period ended June 30, 2024, compared to a loss of $1,197,201 in the same period in 2023, attributed to a 72% decrease in tonnes sold[193]. - The cost of net revenue for the bromine segment decreased to $6,801,811 for the six-month period ended June 30, 2024, from $13,192,124 in the same period in 2023, a reduction of 48%[183]. - General and administrative expenses were $1,407,428 for the six-month period ended June 30, 2024, a decrease of 6% from $1,503,376 in the same period in 2023[191]. - Other income, net for the three-month period ended June 30, 2024, was $9,977, a decrease of approximately 78% compared to the same period in 2023[176]. - The average selling price of bromine decreased to $2,438 per ton in the six-month period ended June 30, 2024, from $3,580 per ton in the same period in 2023[188]. - The utilization ratio for bromine production capacity dropped to 4% for the six-month period ended June 30, 2024, from 34% in the same period in 2023, a variance of 30%[185]. - The net revenue from the crude salt segment decreased to $640,606 for the six-month period ended June 30, 2024, compared to $1,398,116 in the same period in 2023, a decrease of 54%[181]. - Crude salt segment reported income from operations of $54,932 for the six-month period ended June 30, 2024, a significant improvement from a loss of $404,013 in the same period in 2023[194]. - Chemical products segment experienced a loss from operations of $654,078 for the six-month period ended June 30, 2024, reduced from a loss of $833,892 in the same period in 2023[196]. - Natural gas segment reported a loss from operations of $101,482 for the six-month period ended June 30, 2024, compared to an income of $9,855 in the same period in 2023[197]. - Net loss for the six-month period ended June 30, 2024, was $37,090,050, compared to a net loss of $1,239,563 in the same period in 2023[197]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $10,367,539 as of June 30, 2024, down from $72,223,894 as of December 31, 2023, reflecting a decrease of $61,856,355[198]. - Cash flow used in operating activities was approximately $812,141 for the six-month period ended June 30, 2024, compared to cash provided of $11,011,556 in the same period in 2023[199]. - Total accounts receivable decreased by $3,129,401 as of June 30, 2024, compared to December 31, 2023, with cash collections significantly impacting overall liquidity[202]. - Inventory decreased by $163,469 (or 28%) as of June 30, 2024, compared to the net inventory level as of December 31, 2023[204]. - Approximately $60.5 million was used in investing activities during the six months ended June 30, 2024, primarily for acquiring property, plant, and equipment[206]. Compliance and Regulatory Matters - The Company received a notice from Nasdaq regarding non-compliance due to delayed filings, with a deadline to submit a compliance plan by June 17, 2024[144]. - The Company has been granted an exception by Nasdaq to regain compliance, with a requirement to file delinquent reports by October 14, 2024[145]. Strategic Focus - The company intends to focus on expanding its segments within the Chinese market, including SCHC, SYCI, SHSI, and DCHC[207].