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].
Gulf Resources(GURE) - 2024 Q3 - Quarterly Report