10q10k10q10k.net

What changed in GULF RESOURCES, INC.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of GULF RESOURCES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+167 added−156 removedSource: 10-K (2025-04-11) vs 10-K (2024-09-27)

Top changes in GULF RESOURCES, INC.'s 2024 10-K

167 paragraphs added · 156 removed · 118 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

48 edited+27 added−12 removed159 unchanged
Biggest changeThe term of transfers is from June 29, 2024 to June 28, 2044. 80% of the transfer price shall be paid upon the execution of Agreements, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of Agreements after SHSI has inspected the and accepted the crude salt fields in writing.
Biggest changeThe term of transfers is from June 29, 2024 to June 28, 2044. 80% of the transfer price shall be paid upon the execution of the agreements, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of the agreements after SHSI has inspected the and accepted the crude salt fields in writing. 3 On December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller B, pursuant to which the Article 2. 2 of the agreement has been amended as follows: (80%) of the total amount, equaling RMB32,460,000 had been paid on the date of signing the contract by both parties.
On May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province, mandating the need for project approval for its Daying well, encompassing the entire natural gas and brine water project. This also includes approvals for safety production inspection, environmental protection assessment, and to solve the related land issue.
On May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province, mandating the need for project approval for its Daying well, encompassing the entire natural gas and brine water project. This also includes approvals for safety production inspection, environmental protection assessment, and to solve the related land issue.
Until these approvals are obtained, the Company must temporarily suspend trial production at its natural gas well in Daying. Additionally, in compliance with the Chinese government new policies, the Company is required to obtain an exploration license for bromine and a mining license for natural gas.
Until these approvals are obtained, the Company must temporarily suspend trial production at its natural gas well in Daying. Additionally, in compliance with the Chinese government new policies, the Company is required to obtain an exploration license for bromine and a mining license for natural gas.
Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises are allowed to participate in the natural gas production.
Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises are allowed to participate in the natural gas production.
Additionally, the procurement of the final equipment for our chemical factory has been postponed until we have a better understanding of the potential for derivative bromine products. We anticipate proceeding with the completion of its chemical factory in due course.
Additionally, the procurement of the final equipment for our chemical factory has been postponed until we have a better understanding of the potential for derivative bromine products. We anticipate proceeding with the completion of its chemical factory in due course.
However, in the event that the Chinese economy persists in its weakness and if we perceives this trend to be ongoing, there is a possibility that the chemical factory could be repurposed for the production of Sodium-Ion batteries.
However, in the event that the Chinese economy persists in its weakness and if we perceives this trend to be ongoing, there is a possibility that the chemical factory could be repurposed for the production of Sodium-Ion batteries.
The term of transfer is from June 29, 2024 to June 28, 2044. 80% of the transfer price shall be paid upon the execution of Acquisition Agreement, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of Acquisition Agreement after SHSI has inspected the and accepted the crude salt field in writing.
The term of transfer is from June 29, 2024 to June 28, 2044. 80% of the transfer price shall be paid upon the execution of the agreement, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of the agreement after SHSI has inspected the and accepted the crude salt field in writing.
The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment .” 5 Closure and rectification process of our Bromine, Crude Salt and Chem i cal Products factories On September 1, 2017, the Company received letters from the People’s Government of Yangkou Town, Shouguang City to each of its subsidiaries, Shouguang City Haoyuan Chemical Company Limited and Shouguang Yuxin Chemical Industry Co., Limited, which stated that in an effort to improve the safety and environmental protection management level of chemical enterprises, the plants are requested to immediately stop production and perform rectification and improvements in accordance with the country’s new safety, environmental protection requirements.
The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment .” 9 Closure and rectification process of our Bromine, Crude Salt and Chem i cal Products factories On September 1, 2017, the Company received letters from the People’s Government of Yangkou Town, Shouguang City to each of its subsidiaries, Shouguang City Haoyuan Chemical Company Limited and Shouguang Yuxin Chemical Industry Co., Limited, which stated that in an effort to improve the safety and environmental protection management level of chemical enterprises, the plants are requested to immediately stop production and perform rectification and improvements in accordance with the country’s new safety, environmental protection requirements.
During the year ended December 31, 2023, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $10,866,228 or approximately 40.36% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 14%, respectively, of total net revenue from the sale of bromine.
During the year ended December 31, 2023, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $10,866,228 or approximately 40% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 14%, respectively, of total net revenue from the sale of bromine.
These reserves are not distributable as cash dividends. 4 To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
These reserves are not distributable as cash dividends. 8 To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
This supplier concentration makes us vulnerable to a near-term adverse impact, should the relationships be terminated. 10 Business Strategy Expansion of Production Capacity to Meet Demand ▼ Bromine and Crude Salt In view of keen competition and the trend of less bromine contraction of brine water being extracted in Shouguang City, Shandong Province, the Company intended to access more bromine and crude salt resources by finding new underground brine water resources in the Sichuan Province.
This supplier concentration makes us vulnerable to a near-term adverse impact, should the relationships be terminated. 14 Business Strategy Expansion of Production Capacity to Meet Demand ▼ Bromine and Crude Salt In view of keen competition and the trend of less bromine contraction of brine water being extracted in Shouguang City, Shandong Province, the Company intended to access more bromine and crude salt resources by finding new underground brine water resources in the Sichuan Province.
In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at the bromine and crude salt factories as scheduled in February 2024. Because many smaller producers have not had the capital to conduct the rectification required by the government, management believes there could be some extremely attractive acquisition opportunities in bromine.
In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at the bromine and crude salt factories as scheduled in February 2025. Because many smaller producers have not had the capital to conduct the rectification required by the government, management believes there could be some extremely attractive acquisition opportunities in bromine.
However, at the present time, all of management’s attention is focused on getting its facilities approved and in full production. Management may consider acquisition opportunities in this segment in the future if the prices were sufficiently attractive. 6 We secured the land for our upcoming chemical factory and obtained the final approval regarding environmental protection assessment.
However, at the present time, all of management’s attention is focused on getting its facilities approved and in full production. Management may consider acquisition opportunities in this segment in the future if the prices were sufficiently attractive. 10 We secured the land for our upcoming chemical factory and obtained the final approval regarding environmental protection assessment.
The Company is engaged in ongoing discussions with the government of Daying County regarding the establishment of a joint venture for the exploration and production of natural gas and brine products in Sichuan. 11 On September 1, 2017, the Company received notification from the Government of Yangkou Town, Shouguang City of PRC that production at all its factories must be halted immediately.
The Company is engaged in ongoing discussions with the government of Daying County regarding the establishment of a joint venture for the exploration and production of natural gas and brine products in Sichuan. 15 On September 1, 2017, the Company received notification from the Government of Yangkou Town, Shouguang City of PRC that production at all its factories must be halted immediately.
Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. Please see “Risk Factors” beginning on page 16 of this annual report for additional information.
Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. Please see “Risk Factors” beginning on page 20 of this annual report for additional information.
We received the final approval for our new chemical factory and started construction in June 2020. 9 Historically, SYCI concentrated its efforts on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.
We received the final approval for our new chemical factory and started construction in June 2020. 13 Historically, SYCI concentrated its efforts on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.
The Shouguang City Bromine Association, on behalf of all the bromine producers in Shouguang, initiated negotiations with the local government agencies. The local governmental agencies acknowleged the facts that their initial requirements for the bromine industry did not include the project, the planning and land use rights approvals, which were later introduced by the provincial government as new requirements.
The Shouguang City Bromine Association, on behalf of all the bromine producers in Shouguang, initiated negotiations with the local government agencies. The local governmental agencies acknowledged the facts that their initial requirements for the bromine industry did not include the project, the planning and land use rights approvals, which were later introduced by the provincial government as new requirements.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers like our Company that file electronically with the SEC at http://www.sec.gov. The information contained on our website is not intended to be incorporated into this Annual Report on Form 10-K. 15
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers like our Company that file electronically with the SEC at http://www.sec.gov. The information contained on our website is not intended to be incorporated into this Annual Report on Form 10-K. 19
The territory is classified as coastal alluvial – marine plain with an average height two to seven meters above the sea level. The terrain is relatively flat. 8 Geological background of this region The Shandong Province working region is located to the east of Lubei Plain and on the south bank of Bohai Laizhou Bay.
The territory is classified as coastal alluvial – marine plain with an average height two to seven meters above the sea level. The terrain is relatively flat. 12 Geological background of this region The Shandong Province working region is located to the east of Lubei Plain and on the south bank of Bohai Laizhou Bay.
Shandong Xinhua Pharmaceutical Limited by Share Ltd, Hunan Erkang Pharmaceutical Limited by Share Ltd and Xinan Synthetic Pharmaceutical Limited by Share Ltd. 13 Government Regulation China has been reinforcing the environmental requirements for the entire chemical industry, demanding the closure or rectification of those factories that do not meet the emission requirements and are highly polluting.
Shandong Xinhua Pharmaceutical Limited by Share Ltd, Hunan Erkang Pharmaceutical Limited by Share Ltd and Xinan Synthetic Pharmaceutical Limited by Share Ltd. 17 Government Regulation China has been reinforcing the environmental requirements for the entire chemical industry, demanding the closure or rectification of those factories that do not meet the emission requirements and are highly polluting.
In the reporting periods presented in this annual report, no cash and other asset transfers have occurred among the Company and its subsidiaries; and no dividends or distributions of a subsidiary has been made to the Company. For the foreseeable future, the Company does not expect to pay any cash dividends.
In the reporting periods presented in this annual report, no cash and other asset transfers have occurred among the Company and its subsidiaries; and no dividends or distributions of a subsidiary has been made to the Company or to the shareholders from the Company. For the foreseeable future, the Company does not expect to pay any cash dividends.
The Company has received the refrigeration and air compressor units. The estimated total cost for the relocation process is approximately $69 million. As of December 31, 2023 and 2022, the Company incurred relocation costs in the amount of $45,584,344 and $45,584,344, respectively.
The Company has received the refrigeration and air compressor units. The estimated total cost for the relocation process is approximately $69 million. As of December 31, 2024 and 2023, the Company incurred relocation costs in the amount of $45,584,344 and $45,584,344, respectively.
The Company incurred relocation costs in the amount of $45,584,344 as of December 31, 2023. In January 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the planned Yuxin Chemical factory.
The Company incurred relocation costs in the amount of $45,584,344 as of December 31, 2024. In January 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the planned Yuxin Chemical factory.
Our principal customers during 2023 were Shandong Morui Chemical Company Limited, Shandong Brother Technology Limited, and Shouguang Weidong Chemical Company Limited. We have ongoing policies in place to ensure that sales are made to customers who are credit-worthy.
Our principal customers during 2024 were Shandong Morui Chemical Company Limited, Shandong Brother Technology Limited, and Shouguang Weidong Chemical Company Limited. We have ongoing policies in place to ensure that sales are made to customers who are credit-worthy.
In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at the bromine and crude salt factories as scheduled in February 2024. 12 ▼ Chemical Products On November 24, 2017, the Company received a letter from the Government of Yangkou County, Shouguang City notifying the Company to relocate its two chemical production plants located in the second living area of the Qinghe Oil Extraction Plant to the Bohai Marine Fine Chemical Industrial Park (the “November 2017 Letter”).
In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed preparation operations at the bromine and crude salt factories as scheduled in February 2025. 16 ▼ Chemical Products On November 24, 2017, the Company received a letter from the Government of Yangkou County, Shouguang City notifying the Company to relocate its two chemical production plants located in the second living area of the Qinghe Oil Extraction Plant to the Bohai Marine Fine Chemical Industrial Park (the “November 2017 Letter”).
The Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain compliance with respect to the filing requirements. The Company has until September 4, 2024 to submit such update to Nasdaq.
The August Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain compliance with respect to the filing requirements. The Company had until September 4, 2024 to submit such update to Nasdaq.
The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.
The May Notice states that the Company had until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.
Subsequently, on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024, the Company is not in compliance with the Rule.
Subsequently, on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024 (the “Second Quarter Form 10-Q”), the Company was not in compliance with the Rule.
The functional currency of the Company’s operating foreign subsidiaries is the Renminbi (“RMB”), which had an average exchange rate of $0.14908 and $0.14204 during fiscal years 2022 and 2023, respectively, the reporting currency of the Company is the United States dollar (“USD” or $”).
The functional currency of the Company’s operating foreign subsidiaries is the Renminbi (“RMB”), which had an average exchange rate of $0.14204 and $0.14042 during fiscal years 2023 and 2024, respectively, the reporting currency of the Company is the United States dollar (“USD” or $”).
SYCI paid $8,978,553 for a 50-year lease of a piece of land for its new factories at Bohai Marine Fine Chemical Industrial Park in December 2017 and leased another piece of land from the third party for its new chemical factory.
SYCI paid $8,846,282 for a 50-year lease of a piece of land for its new factories at Bohai Marine Fine Chemical Industrial Park in December 2017 and leased another piece of land from the third party for its new chemical factory.
On June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted by the Company on June 14, 2024, Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule.
On June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted by the Company on June 14, 2024, Nasdaq determined to grant an exception to enable the Company to regain compliance with the Listing Rule 5250(c)(1) Rule.
During each of the years ended December 31, 2023 and 2022, sales to our three largest crude salt customers, based on net revenue from such customers, aggregated $2,971,467 and $6,996,553, respectively, or approximately 100% and 100% of total net revenue from sale of crude salt; and sales to our largest customer represented approximately 38% and 39%, respectively, of total net revenue from the sale of crude salt.
During each of the years ended December 31, 2024 and 2023, sales to our three largest crude salt customers, based on net revenue from such customers, aggregated $2,049,988 and $2,971,467, respectively, or approximately 100% and 100% of total net revenue from sale of crude salt; and sales to our largest customer represented approximately 38% and 38%, respectively, of total net revenue from the sale of crude salt.
Recent Developments Acquisition Agreements On June 26, 2024, a wholly owned subsidiary of the Company, Shouguang Hengde Salt Industry Co. Ltd ( “SHSI”), entered into a Crude Salt Field Acquisition Agreement (the “Acquisition Agreement”) with Shouguang Qingshuibo Farm Co., LTD.
Recent Developments Acquisition Agreements In June 2024, a wholly owned subsidiary of the Company, Shouguang Hengde Salt Industry Co. Ltd ( “SHSI”) entered into crude salt field acquisition agreements with Shouguang Qingshuibo Farm Co., LTD.
Factory No. 8 began contributing revenue in the fourth quarter 2022. Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 25, 2023 until February 20, 2024.
Factory No. 8 began contributing revenue in the fourth quarter 2022. Pursuant to a notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February 12, 2025.
Expense related to social insurance was approximately $681,540 for fiscal year 2023. 14 Health and Safety The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees.
Expense related to social insurance was approximately $535,475 for fiscal year 2024. 18 Health and Safety The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees.
In April 2022, our subsidiary, Shouguang Hengde Salt Industry Co. Ltd, was incorporated in Shandong Province, China, specifically for crude salt production and trading. This subsidiary was established in response to a new government policy mandating separate registrations for bromine and crude salt companies. The Company is awaiting governmental approval for Factories No. 2 and No. 10.
In April 2022, our subsidiary, Shouguang Hengde Salt Industry Co. Ltd, was incorporated in Shandong Province, China, specifically for crude salt production and trading. This subsidiary was established in response to a new government policy mandating separate registrations for bromine and crude salt companies.
Human Capital Resources Employee Profiles As of December 31, 2023, we employed approximately 380 full-time employees, of whom approximately 78% are with SCHC、SHSI and DCHC, and 22% are with SYCI. Approximately 29% of our employees are management personnel and 4% are sales and procurement staff. None of our employees are represented by a union.
Human Capital Resources Employee Profiles As of December 31, 2024, we employed approximately 367 full-time employees, of whom approximately 77% are with SCHC 、 SHSI and DCHC, and 23% are with SYCI. Approximately 28% of our employees are management personnel and 4% are sales and procurement staff. None of our employees are represented by a union.
Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 25, 2023 until February 20, 2024.
Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February 12, 2025.
During each of the years ended December 31, 2023 and 2022, the net revenue for the chemical products was $0. During each of the years ended December 31, 2023 and 2022, the net revenue for the natural gas was $0.
During each of the years ended December 31, 2024 and 2023, the net revenue for the chemical products was $0. During each of the years ended December 31, 2024 and 2023, the net revenue for the natural gas was $61,207 and $150,861.
During the year ended December 31, 2022, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $19,581,606 or approximately 33% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 12%, respectively, of total net revenue from the sale of bromine.
During the year ended December 31, 2024, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $1,969,624 or approximately 35% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 12%, respectively, of total net revenue from the sale of bromine.
Nasdaq Compliance The Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company is not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to the Company’s non-compliance with the Rule as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “Form 10-Q”, together with the Form 10-K, the “Delinquent Reports”).
On the closing date, the Company issued a total of 2,059,694 shares of the Company’s common stock at a price of $1.50 per share, to five individuals, who are citizens residing in the People’s Republic of China, designated by each seller. 4 Nasdaq Compliance The Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company was not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule 5250(c)(1) Rule”), which requires the timely filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to the Company’s non-compliance with the Listing Rule 5250(c)(1) Rule as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “First Quarter Form 10-Q”, together with the Form 10-K, the “Delinquent Reports”).
The terms of the exception are as follows: on or before October 14, 2024, the Company must file the Delinquent Reports, as required by the Rule. In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted. At that time, the Company may appeal Nasdaq’s determination to a hearings panel.
The terms of the exception were as follows: on or before October 14, 2024, the Company must file the Delinquent Reports, as required by the Listing Rule 5250(c)(1) Rule. In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted.
On June 27, 2024, SHSI entered into four Crude Salt Field Acquisition Agreements (the “Agreements”) with Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative, Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative, Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative, and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative (together, “Sellers”), pursuant to which Sellers agree to transfer to SHSI, and SHSI agrees to purchase from Sellers, 750,000, 804,000, 385,000, and 822,000 square meters of crude salt field (including the land lease fee) for RMB54.10, RMB54.90, RMB54.00, and RMB55.70 per square meter, respectively, with the total transfer price of RMB40,575,000, RMB44,139,600, RMB20,790,000, and RMB45,785,400, respectively.
On June 27, 2024, SHSI entered into an acquisition agreement with each Seller B, Seller C, Seller D and Seller E, respectively, pursuant to which the sellers agreed to transfer to SHSI, and SHSI agrees to purchase from the sellers, 750,000, 804,000, 385,000, and 822,000 square meters of crude salt field (including the land lease fee) for RMB54.10, RMB54.90, RMB54.00, and RMB55.70 per square meter, respectively, with the total transfer price of RMB40,575,000, RMB44,139,600, RMB20,790,000, and RMB45,785,400, respectively.
(“Seller A”), pursuant to which Seller A agrees to transfer to SHSI, and SHSI agrees to purchase, 2,380,000 square meters of crude salt field (including the land lease fee) for RMB54.40 per square meter, with the total transfer price of RMB129,472,000.
A summary of these agreements are set forth below: On June 26, 2024, SHSI entered into an acquisition agreement with Seller A, pursuant to which Seller A agrees to transfer to SHSI, and SHSI agrees to purchase, 2,380,000 square meters of crude salt field (including the land lease fee) for RMB54.40 per square meter, with the total transfer price of RMB129,472,000.
During the year ended December 31, 2023 and 2022, we purchased 100% of raw materials for our bromine and crude production from our top three suppliers. During the year ended December 31, 2023 and 2022, we did not purchase any raw materials for chemical products production.
During the year ended December 31, 2024 and 2023, we did not purchase any raw materials for chemical products production.
Cash Transfers and Dividend Distribution Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., Gulf Resources, Inc., a Nevada corporation (“Gulf Resources”), controls SCHC (the “WFOE”), SYCI and DCHC through the Hong Kong company, Hong Hong Jiaxing Industrial Limited, or Hong Kong Jiaxing.
There is no assurance that we will be able to meet all applicable regulatory requirements and guidelines, or comply with all applicable regulations at all times, or that we will not be subject to fines or other penalties in the future as a result of regulatory inspections. 7 Cash Transfers and Dividend Distribution Our corporate structure is a direct holding structure, that is, the overseas entity listed in the U.S., Gulf Resources, Inc., a Nevada corporation (“Gulf Resources”), controls SCHC (the “WFOE”), SYCI and DCHC through the Hong Kong company, Hong Hong Jiaxing Industrial Limited, or Hong Kong Jiaxing.
Corporate Structure Our current corporate structure chart is set forth in the following diagram: 3 Currently, we operate our business through our wholly-owned subsidiaries in China, including (i) Shouguang City Haoyuan Chemical Company Limited, or SCHC; (ii) Shouguang Yuxin Chemical Industry Co., Limited, or SYCI; (iii) Daying County Haoyuan Chemical Co., Ltd., or DCHC; ad (iv) Shouguang Hengde Salt Industry Co.
The Nasdaq Price Deficiency Letter has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and traded on The Nasdaq Global Select Market, subject to the Company’s compliance with the other continued listing requirements of The Nasdaq Stock Market. 5 Corporate Structure Our current corporate structure chart is set forth in the following diagram: 6 Currently, we operate our business through our wholly-owned subsidiaries in China, including (i) Shouguang City Haoyuan Chemical Company Limited, or SCHC; (ii) Shouguang Yuxin Chemical Industry Co., Limited, or SYCI; (iii) Daying County Haoyuan Chemical Co., Ltd., or DCHC; and (iv) Shouguang Hengde Salt Industry Co.
During each of the years ended December 31, 2023 and 2022, the net revenue for the equipment lease was $150,861 and $132,993. Principal Suppliers Our principal external suppliers are Laizhou Shengfu Chemical Company Limited, Weifang Wanhong Chemical Company Limited, Shandong Xinlong International Trade Company Limited, Shouguang Runfeng trading Company Limited.
Principal Suppliers Our principal external suppliers are Laizhou Shengfu Chemical Company Limited, Weifang Wanhong Chemical Company Limited, Shandong Xinlong International Trade Company Limited, Shouguang Runfeng trading Company Limited. During the year ended December 31, 2024 and 2023, we purchased 100% of raw materials for our bromine and crude production from our top four suppliers.
Removed
The August Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market.
Added
(“Seller A”), Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative (“Seller B”), Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative (“Seller C”), Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative (“Seller D”), and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative (“Seller E”), respectively, as amended in December 2024.
Removed
While the Company can provide no assurance to the timing, the Company has submitted a letter to Nasdaq confirming that there has been no change to its original plan to regain compliance with respect to the filing requirements, and will continue to work diligently to complete and file its delayed SEC reports.
Added
Subsequently, on December 17, 2024, the parties entered into an amendment to the agreement, pursuant to which the Article 2. 2 of the agreement has been amended as follows: eighty percent (80%) of the total amount, equaling RMB103,577,600 had been paid on the date of signing the contract by both parties.
Removed
There is no assurance that we will be able to meet all applicable regulatory requirements and guidelines, or comply with all applicable regulations at all times, or that we will not be subject to fines or other penalties in the future as a result of regulatory inspections.
Added
The remaining RMB25,894,400 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB10,357,800 shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.
Removed
Impact of COVID-19 on Our Operations and Financial Performance Outbreaks of epidemic, pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results of operations. The spread of COVID-19 had resulted in the World Health Organization declaring the outbreak of COVID-19 as a global pandemic.
Added
These shares shall be issued by the Company to Seller A or Seller A's designated parties within three months after SHSI has inspected and accepted the crude salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.
Removed
Substantially all of our revenues and workforce are concentrated in China.
Added
The remaining RMB8,115,000 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB3,246,000 shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.
Removed
In response to the intensifying efforts to contain the spread of COVID-19, the Chinese government took a number of actions, which included extending the Chinese New Year holiday in 2020, quarantining individuals suspected of having COVID-19, asking residents in China to stay at home and to avoid public gathering, among other things.
Added
These shares shall be issued by the Company to Seller B or Seller B’s designated parties within three months after SHSI has inspected and accepted the crude salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.
Removed
The outbreak of the virus resulted in slight delay in the commencement of operations for Factory No.1, No. 4, No. 7, No. 9, and No. 8, and may potentially delay the approval for the remaining two factories, including No. 2, and No. 10.
Added
On December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller C, pursuant to which the Article 2. 2 of the agreement has been amended as follows: Eighty percent (80%) of the total amount, equaling RMB35,311,680 had been paid on the date of signing the contract by both parties.
Removed
It is, however, still unclear how the pandemic will evolve going forward, and we cannot assure you whether the COVID-19 pandemic will again bring about significant negative impact on our business operations, financial condition and operating results, including but not limited to negative impact to our total revenues.
Added
The remaining RMB8,827,920 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB3,531,168 shall be paid in shares, calculated on a per share price of US$1.5 per, using the exchange rate RMB/US$:7.27.
Removed
There remain significant uncertainties surrounding the COVID-19 outbreak and its further development as a global pandemic. Hence, the extent of the business disruption and the related impact on our financial results and outlook for 2021 cannot be reasonably estimated at this time.
Added
These shares shall be issued by the Company to Seller C or Seller C's designated parties within three months after SHSI has inspected and accepted the crude salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.
Removed
The extent to which the COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions taken globally to contain the coronavirus or treat its impact, among others.
Added
On December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller D, pursuant to which the Article 2. 2 of the agreement has been amended as follows: Eighty percent (80%) of the total amount, equaling RMB 16,632,000 had been paid on the date of signing the contract by both parties.
Removed
Existing insurance coverage may not provide protection for all costs that may arise from all such possible events.
Added
The remaining RMB 4,158,000 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB1,663,200 shall be paid in shares, calculated on a per share price ofUS$1.5, using the exchange rate RMB/US$:7.27.
Removed
We are still assessing our business operations and the total impact COVID-19 may have on our results and financial condition, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally. 7 Our Business Segments Our business operations are conducted in four segments, bromine, crude salt, chemical products, and natural gas.
Added
These shares shall be issued by the Company to Seller D or Seller D's designated parties within three months after SHSI has inspected and accepted the crude salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.
Added
On December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller E, pursuant to which the Article 2. 2 of the agreement has been amended as follows: Eighty percent (80%) of the total amount, equaling RMB36,628,320 had been paid on the date of signing the contract by both parties.
Added
The remaining RMB9,157,080 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB3,662,832 shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.
Added
These shares shall be issued by the Company to Seller E or Seller E's designated party within three months after SHSI has inspected and accepted the crude salt field in writing; (2) the balance shall be paid in cash by SHSI to Seller E before December 31, 2028.
Added
In accordance to each amendment, the parties also acknowledged and agreed that, in compliance with the Nasdaq Listing Rule 5635, the issuance of shares pursuant to the agreement may not exceed 19.9% of the total outstanding shares of common stock of the Company prior to the issuance of the shares (the “19.9% Threshold”), unless such issuance is approved by the shareholders of the Company in accordance with the Nasdaq rules and regulations.
Added
SHSI shall cause the Company to take all necessary steps to obtain such shareholder approval if the issuance of shares under the agreement exceeds the 19.9% Threshold.
Added
On December 30, 2024, SHSI and each of the sellers mutually acknowledged and confirmed that the salt land provided by each seller meets the acquisition criteria, is in the anticipated usable condition, and has been accepted and handed over to SHSI. On February 28, 2025, the transactions as contemplated by the acquisition agreements were closed.
Added
At that time, the Company may appeal Nasdaq’s determination to a hearings panel.
Added
On October 15, 2024, the Company received written notice from Nasdaq that, as a result of the Company filing the Form 10-K, the First Quarter Form 10-Q and the Second Quarter Form 10-Q with the SEC, the Staff has determined that the Company complies with the Listing Rule 5250(c)(1) Rule and considers the matter to be closed.

… 7 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

8 edited+7 added−10 removed114 unchanged
Biggest changeThe August Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market.
Biggest changeThe Nasdaq Price Deficiency Letter has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and traded on The Nasdaq Global Select Market, subject to the Company’s compliance with the other continued listing requirements of The Nasdaq Stock Market.
New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may: ● Delay or impede our development, ● Result in negative publicity or increase our operating costs, ● Require significant management time and attention, and ● Subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.
New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may: 20 ● Delay or impede our development, ● Result in negative publicity or increase our operating costs, ● Require significant management time and attention, and ● Subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. 19 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. 24 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. 17 Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China.
These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. 22 Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China.
Pursuant to the Revised Measures, companies holding data on more than 1 million users must now apply for cybersecurity approval when seeking listings in other nations due to the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.” 16 Our business belongs to the chemical industry in China, which does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry.
Pursuant to the Revised Measures, companies holding data on more than 1 million users must now apply for cybersecurity approval when seeking listings in other nations due to the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.” 21 Our business belongs to the chemical industry in China, which does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our common stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount. 20 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our common stock or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount. 25 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results. 18 China’s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business.
These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results. 23 China’s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business.
We cannot assure you that we will be able to regain compliance with Nasdaq listing standards. Our failure to continue to meet these requirements would result in our common stock being delisted from Nasdaq, and if our common stock is delisted, our warrants will also be delisted.
We cannot assure you that we will be able to regain compliance with Nasdaq listing standards. Our failure to continue to meet these requirements would result in our common stock being delisted from Nasdaq We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq.
Removed
The Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company is not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to the Company’s non-compliance with the Rule as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “Form 10-Q”, together with the Form 10-K, the “Delinquent Reports”).
Added
On November 5, 2024, the Company received a notice in the form of a letter (“Price Deficiency Letter”) from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1) because the bid price for the Company’s common stock had closed below $1.00 per share for the previous 34 consecutive business days (the “Minimum Bid Price Requirement”).
Removed
The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.
Added
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until May 5, 2025, to regain compliance with the Minimum Bid Price Requirement.
Removed
On June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted by the Company on June 14, 2024, Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule.
Added
If at any time before May 5, 2025, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff Nasdaq will provide written confirmation that the Company has achieved compliance.
Removed
The terms of the exception are as follows: on or before October 14, 2024, the Company must file the Delinquent Reports, as required by the Rule. In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted. At that time, the Company may appeal Nasdaq’s determination to a hearings panel.
Added
In the event the Company does not regain compliance, the Company may be eligible for additional time.
Removed
Subsequently, on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024, the Company is not in compliance with the Rule.
Added
To qualify for the additional compliance period, the Company will be required to (i) submit, no later than the expiration date, an on-line Transfer Application, (ii) submit a non-refundable $5,000 application fee, (iii) meet the continued listing requirement for the market value of its publicly held shares and all other continued listing standards for The Nasdaq Stock Market, with the exception of the bid price requirement, and (iv) will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary.
Removed
The Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain compliance with respect to the filing requirements. The Company has until September 4, 2024 to submit such update to Nasdaq.
Added
As part of its review process, the Nasdaq will make a determination of whether they believe the Company will be able to cure this deficiency.
Removed
While the Company can provide no assurance to the timing, the Company has submitted a letter to Nasdaq confirming that there has been no change to its original plan to regain compliance with respect to the filing requirements, and will continue to work diligently to complete and file its delayed SEC reports.
Added
Should the Nasdaq conclude that the Company will not be able to cure the deficiency, or should the Company determine not to submit a transfer application or make the required representation, the Staff will provide notice that the Company’s securities will be subject to delisting.
Removed
On or before October 14, 2024, we must evidence compliance with the Rule, which requires the timely filing of all required periodic reports with the SEC. If we fail to regain compliance with the Rule, or fail to evidence compliance with the Rule by October 14, 2024, we may be subject to delisting.
Removed
In that event, we would have the right to a hearing before a Nasdaq hearings panel, which would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.
Removed
We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed6 unchanged
Biggest changeFrom time to time, as appropriate under our overall cybersecurity program, we engage third-party experts to support the assessment of cyber related risks, including to conduct cyber penetration testing.
Biggest changeAs part of our approach to cyber risk management, we regularly perform internal audits of internal processes and controls relating to cybersecurity. >From time to time, as appropriate under our overall cybersecurity program, we engage third-party experts to support the assessment of cyber related risks, including to conduct cyber penetration testing.
To its knowledge, the Company has not experienced a material cybersecurity breach within the last three years, nor identified any risks from cybersecurity threats that have materially affected us, including our business strategy, results of operations or financial condition.
To its knowledge, the Company has not experienced a material cybersecurity breach within the last three years, nor identified any risks from cybersecurity threats that have materially affected us, including our business strategy, results of operations or financial condition . 26
Our policies and procedures are also designed to oversee and identify material cybersecurity risks related to third-party vendors and service providers. As part of our approach to cyber risk management, we regularly perform internal audits of internal processes and controls relating to cybersecurity.
Our policies and procedures are also designed to oversee and identify material cybersecurity risks related to third-party vendors and service providers.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed24 unchanged
Biggest changeThe following table shows the annual bromine produced and sold for each of our production facilities and the weighted average price received for all products sold for the last two years. 2023 2022 Bromine Facility Produced (in tons) Sold (in tons) Selling price (RMB/ton) Produced (in tons) Sold (in tons) Selling price (RMB/ton) Factory No. 1 2,223 2,220 23,760 2,401 2,402 51,184 Factory No. 2 — — — — — — Factory No. 3** — — — — — — Factory No. 4** — — — — — — Factory No. 7* (originally named as No. 5 and No. 7) * 2,403 2,405 23,783 2,433 2,434 51,185 Factory No. 8 1,314 1,300 23,574 116 108 51,327 Factory No. 9 1,142 1,147 23,715 1,504 1,506 51,193 Factory No. 4 (originally know Subdivision of Factory No. 1) 879 879 24,072 1,367 1,367 51,181 Factory No. 10 — — — — — — Factory No. 11** — — — — — — Total 7,961 7,951 7,821 7,817 * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019. ** Factory No. 3, 4 and 11 were demolished in September 2018. 27 The following table shows the annual crude salt produced and sold for each of our production facilities and the weighted average price received for all products sold for the last two years. 2023 2022 Crude Salt Facility Produced (in tons) Sold (in tons) Selling price (RMB/ton) Produced (in tons) Sold (in tons) Selling price (RMB/ton) Factory No. 1 1,750 3,250 216 4,790 3,780 272 Factory No. 2 5,930 6,650 238 7,480 3,330 239 Factory No. 7* (Originally Named as No. 5 and No. 7) * 42,160 41,280 215 111,740 109,210 258 Factory No. 8 23,900 23,900 205 17,880 17,880 256 Factory No. 9 20,440 22,021 221 56,470 50,320 255 Total 94,180 97,101 198,360 184,520 * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019 Our SYCI’s production facilities did not produce or sold any chemical products for the last two years.
Biggest changeThe following table shows the annual bromine produced and sold for each of our production facilities and the weighted average price received for all products sold for the last two years. 2024 2023 Bromine Produced Sold Selling price Produced Sold Selling price Facility (in tons) (in tons) (RMB/ton) (in tons) (in tons) (RMB/ton) Factory No. 1 721 728 17,633 2,223 2,220 23,760 Factory No. 2 — — — — — — Factory No. 3** — — — — — — Factory No. 4** — — — — — — Factory No. 7* (originally named as No. 5 and No. 7) * 791 792 17,640 2,403 2,405 23,783 Factory No. 8 145 168 16,906 1,314 1,300 23,574 Factory No. 9 459 465 17,571 1,142 1,147 23,715 Factory No. 4 (originally know Subdivision of Factory No. 1) 80 97 17,462 879 879 24,072 Factory No. 10 — — — — — — Factory No. 11** — — — — — — Total 2,196 2,250 7,961 7,951 * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019. ** Factory No. 3, 4 and 11 were demolished in September 2018. 33 The following table shows the annual crude salt produced and sold for each of our production facilities and the weighted average price received for all products sold for the last two years. 2024 2023 Crude Salt Produced Sold Selling price Produced Sold Selling price Facility (in tons) (in tons) (RMB/ton) (in tons) (in tons) (RMB/ton) Factory No. 1 1,090 1,090 214 1,750 3,250 216 Factory No. 2 3,850 6,153 194 5,930 6,650 238 Factory No. 7* (Originally Named as No. 5 and No. 7) * 28,960 31,694 185 42,160 41,280 215 Factory No. 8 20,000 20,000 200 23,900 23,900 205 Factory No. 9 15,380 18,353 181 20,440 22,021 221 Total 69,280 77,290 94,180 97,101 * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019 Our SYCI’s production facilities did not produce or sold any chemical products for the last two years.
These offices were purchased from Shandong Shouguang Vegetable Seed industry Group Co., Ltd. 22 SYCI concentrates its efforts on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and manufacture and sell materials that are used for human and animal antibiotics in China.
These offices were purchased from Shandong Shouguang Vegetable Seed industry Group Co., Ltd. 28 SYCI concentrates its efforts on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and manufacture and sell materials that are used for human and animal antibiotics in China.
Shandong province has determined that bromine is to be extracted only by licensed entities. 23 Our mineral rights are issued by the local government and allow for a one year period of mining. The rights provide us with the exclusive rights to explore and extract natural brine under the leased land and produce bromine and crude salt.
Shandong province has determined that bromine is to be extracted only by licensed entities. 29 Our mineral rights are issued by the local government and allow for a one year period of mining. The rights provide us with the exclusive rights to explore and extract natural brine under the leased land and produce bromine and crude salt.
Property Factory No. 1 – Haoyuan General Factory Area 6,442 acres Date of Acquisition February 5, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2054 (for mining areas only) The number of remaining years to expiration of the of the land lease as of December 31, 2023 30.25 Years Prior fees paid for land use rights RMB8.6 million Annual Rent RMB186,633 Mining Permit No.: C3707002009056220022340 Date of Permission: July 2018, subject to renewal per three years Period of Permission: Three year Property Factory No. 4 ( originally named as Subdivision of Factory No. 1 ) – State-owned Shouguang Qinshuibo Farm Area 0.79 acres Date of Factory lease January 1, 2011 Factory Lease Term Twenty Years Factory lease Expiration Date 2030 The number of remaining years to expiration of the of the factory lease as of December 31, 2023 7.0 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB5,000,000 Mining Permit No.: Under application 24 Property Factory No. 2 – Yuwenbo Area 1,846 acres Date of Acquisition April 7, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2052 The number of remaining years to expiration of the of the land lease as of December 31, 2023 29 Years Prior Fees Paid For Land Use Rights RMB7.5 million Annual Rent RMB162,560 Mining Permit No.: C3707002009056220022340 Date of Permission: July 2021, subject to renewal per three years Period of Permission: Three year Property Factory No. 2 – State Operated Shouguang Qingshuibo Farm Area 568 acres Date of Acquisition December 30, 2010 Land Use Rights Lease Term Thirty Years Land Use Rights Expiration Date 2040 The number of remaining years to expiration of the of the land lease as of December 31, 2023 17.7 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB172,500 (increase 5% per year) Mining Permit No.: Under application Property Factory No. 7 (originally named as No. 5)– Wangjiancai Area 2,165 acres Date of Acquisition October 25, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2054 The number of remaining years to expiration of the of the land lease as of December 31, 2023 31 Years Annual Rent RMB176,441 Prior Fees Paid for Land Use Rights RMB8.3 million Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 7 – Qiufen Yuan Area 1,611 acres Date of Acquisition January 7, 2009 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2059 The number of remaining years to expiration of the of the land lease as of December 31, 2023 35.17 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB171,150 (increase 5% per two years) Mining Permit No.: C3707002009056220022340 Date of Permission: July 2018, subject to renewal per three years Period of Permission: Three year 25 Property Factory No. 8 – Fengxia Yuan Area 2,723 acres Date of Acquisition September 7, 2009 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2059 The number of remaining years to expiration of the of the land lease as of December 31, 2023 35.66 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB347,130 (increase 5% per two years) Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 9 – Jinjin Li Area 759 acres Date of Acquisition June 7, 2010 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2060 The number of remaining years to expiration of the of the land lease as of December 31, 2023 36.5 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB184,200 (increase 5% per two years) Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 10 – Liangcai Zhang Area 1,700 acres Date of Acquisition December 13, 2021 Land Use Rights Lease Term Ten Years Land Use Rights Expiration Date 2031 The number of remaining years to expiration of the of the land lease as of December 31, 2023 8.0 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB1,376,000 Mining Permit No.: Under application Leased Facility On November 5, 2010, SCHC entered into a Lease Contract with State-Operated Shouguang Qingshuibo Farm.
Property Factory No. 1 – Haoyuan General Factory Area 6,442 acres Date of Acquisition February 5, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2054 (for mining areas only) The number of remaining years to expiration of the of the land lease as of December 31, 2024 29.25 Years Prior fees paid for land use rights RMB8.6 million Annual Rent RMB186,633 Mining Permit No.: C3707002009056220022340 Date of Permission: July 2018, subject to renewal per three years Period of Permission: Three year Property Factory No. 4 ( originally named as Subdivision of Factory No. 1 ) – State-owned Shouguang Qinshuibo Farm Area 0.79 acres Date of Factory lease January 1, 2011 Factory Lease Term Twenty Years Factory lease Expiration Date 2030 The number of remaining years to expiration of the of the factory lease as of December 31, 2024 6.0 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB5,000,000 Mining Permit No.: Under application 30 Property Factory No. 2 – Yuwenbo Area 1,846 acres Date of Acquisition April 7, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2052 The number of remaining years to expiration of the of the land lease as of December 31, 2024 28 Years Prior Fees Paid For Land Use Rights RMB7.5 million Annual Rent RMB162,560 Mining Permit No.: C3707002009056220022340 Date of Permission: July 2021, subject to renewal per three years Period of Permission: Three year Property Factory No. 2 – State Operated Shouguang Qingshuibo Farm Area 568 acres Date of Acquisition December 30, 2010 Land Use Rights Lease Term Thirty Years Land Use Rights Expiration Date 2040 The number of remaining years to expiration of the of the land lease as of December 31, 2024 16.7 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB172,500 (increase 5% per year) Mining Permit No.: Under application Property Factory No. 7 (originally named as No. 5)– Wangjiancai Area 2,165 acres Date of Acquisition October 25, 2007 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2054 The number of remaining years to expiration of the of the land lease as of December 31, 2024 30 Years Annual Rent RMB176,441 Prior Fees Paid for Land Use Rights RMB8.3 million Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 7 – Qiufen Yuan Area 1,611 acres Date of Acquisition January 7, 2009 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2059 The number of remaining years to expiration of the of the land lease as of December 31, 2024 34.17 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB171,150 (increase 5% per two years) Mining Permit No.: C3707002009056220022340 Date of Permission: July 2018, subject to renewal per three years Period of Permission: Three year 31 Property Factory No. 8 – Fengxia Yuan Area 2,723 acres Date of Acquisition September 7, 2009 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2059 The number of remaining years to expiration of the of the land lease as of December 31, 2024 34.66 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB347,130 (increase 5% per two years) Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 9 – Jinjin Li Area 759 acres Date of Acquisition June 7, 2010 Land Use Rights Lease Term Fifty Years Land Use Rights Expiration Date 2060 The number of remaining years to expiration of the of the land lease as of December 31, 2024 35.5 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB184,200 (increase 5% per two years) Mining Permit No.: Under application, written consent obtained from local land and resources departments Property Factory No. 10 – Liangcai Zhang Area 1,700 acres Date of Acquisition December 13, 2021 Land Use Rights Lease Term Ten Years Land Use Rights Expiration Date 2031 The number of remaining years to expiration of the of the land lease as of December 31, 2024 7.0 Years Prior Fees Paid for Land Use Rights Not applicable Annual Rent RMB1,376,000 Mining Permit No.: Under application Leased Facility On November 5, 2010, SCHC entered into a Lease Contract with State-Operated Shouguang Qingshuibo Farm.
The Lessor has agreed to permit SCHC to reconstruct and renovate the existing bromine production facilities on the property. 26 The chart below represents the annual production capacity and annualized utilization ratios for our bromine producing properties currently leased by the Company, which are all located in Shouguang City, Shandong Province, China.
The Lessor has agreed to permit SCHC to reconstruct and renovate the existing bromine production facilities on the property. 32 The chart below represents the annual production capacity and annualized utilization ratios for our bromine producing properties currently leased by the Company, which are all located in Shouguang City, Shandong Province, China.
The following is a description of the land use and mineral rights related to each of the nine properties held by SCHC as of December 31, 2023. All of the bromine factories are under rectification process without production.
The following is a description of the land use and mineral rights related to each of the nine properties held by SCHC as of December 31, 2024. All of the bromine factories are under rectification process without production.
Bromine Property Facility Acquisition Date Acres Annual Production Capacity # (in tons) 2023 Utilization Ratio 2022 Utilization Ratio Factory No. 1 — 6,442 6,681 33 % 36 % Factory No. 2 April 7, 2007 1,846 4,844 — — Factory No. 7* (originally named as No. 5 and No. 7) October 25, 2007/ January 7, 2009 3,776 6,986 34 % 35 % Factory No. 8 September 7, 2009 2,723 4,016 33 % 3 % Factory No. 9 June 7, 2010 759 2,793 41 % 54 % Factory No.4 (originally named as Subdivision of Factory No. 1) January 1, 2011 1 3,186 28 % 43 % Factory No. 10 December 22, 2011 1,700 3,000 — — * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019.
Annual Facility Production Capacity # 2024 Utilization 2023 Utilization Bromine Property Acquisition Date Acres (in tons) Ratio Ratio Factory No. 1 — 6,442 6,681 11 % 33 % Factory No. 2 April 7, 2007 1,846 4,844 — — Factory No. 7* (originally named as No. 5 and October 25, 2007/ No. 7) January 7, 2009 3,776 6,986 11 % 34 % Factory No. 8 September 7, 2009 2,723 4,016 4 % 33 % Factory No. 9 June 7, 2010 759 2,793 16 % 41 % Factory No.4 (originally named as Subdivision of Factory No. 1) January 1, 2011 1 3,186 3 % 28 % Factory No. 10 December 22, 2011 1,700 3,000 — — * Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7 on May 2019.
Item 2. Properties. FIGURE 2.1 - REGIONAL MAP OF MINING PROPERTIES 21 FIGURE 2.2 – DETAIED MAP OF MINING PROPERTIES We do not own any land, although we do own some of the buildings on land we lease.
Item 2. Properties. FIGURE 2.1 - REGIONAL MAP OF MINING PROPERTIES 27 FIGURE 2.2 – DETAILED MAP OF MINING PROPERTIES We do not own any land, although we do own some of the buildings on land we lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+2 added−1 removed1 unchanged
Biggest changeOn or about August 3, 2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the “Written Decisions”) were served on Shouguang City Haoyuan Chemical Company Limited (“SCHC”) by the Shouguang City Natural Resources and Planning Bureau (the “Bureau”), naming SCHC as respondent.
Biggest changeWe may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business, other than the following: On or about August 3, 2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the “Written Decisions”) were served on Shouguang City Haoyuan Chemical Company Limited (“SCHC”) by the Shouguang City Natural Resources and Planning Bureau (the “Bureau”), naming SCHC as respondent.
For more details and information related to the Written Decisions, please see “Note 21 – Loss Contingencies, Notes to Consolidated Financial Statement” contained in this annual report. Item 4. Mine Safety Disclosures. Not applicable. 28 PART II
For more details and information related to the Written Decisions, please see “Note 21 – Loss Contingencies, Notes to Consolidated Financial Statement” contained in this annual report. According to a Civil Mediation Statement (No.
Removed
We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.
Added
(2025) Lu 0783 Min Chu 2607) issued by the Shouguang People's Court of Shandong Province on March 17, 2025, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), a wholly owned subsidiary of the Company, owes the plaintiff, Shouguang Chengyu Trading Co., Ltd., a total of RMB 226,825.44 for goods.
Added
SCHC is also obligated to make monthly payments of RMB 50,000 to the plaintiff by the 15th of each month, starting in April 2025, until the debt is fully paid off. Item 4. Mine Safety Disclosures. Not applicable. 34 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+2 added−8 removed0 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Our Common Stock Our common stock is listed for trading on the NASDAQ Global Select Market, or NASDAQ, under the symbol “GURE”. Dividends We have never paid cash dividends on our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Our Common Stock Our common stock is listed for trading on the NASDAQ Global Select Market, or NASDAQ, under the symbol “GURE”. Holders As of April 10, 2025, there were 39 record holders of our common stock.
Removed
Holders of our common stock are entitled to receive dividends, if any, declared and paid from time to time by the Board of Directors out of funds legally available. We intend to retain any earnings for the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.
Added
Securities Authorized for Issuance Under Equity Compensation Plans See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ” for the aggregate information regarding our equity compensation plans in effect on December 31, 2024. holders security holders Purchases of Equity Securities by the Company and Affiliated Purchasers None.
Removed
Any future determination as to the payment of cash dividends will depend upon future earnings, results of operations, future expansion of bromine and crude salt business and other, capital requirements, our financial condition and other factors that our Board of Directors may consider.
Added
Recent Sales of Unregistered Securities Any previous sales of unregistered securities by the Company have been previously disclosed in our reports on Form 10-Q or Form 8-K, as applicable, filed with the SEC.
Removed
Equity Compensation Plan Information 2019 Incentive Stock Plan On December 18, 2019, the Company’s Annual General Meeting adopted and approved the 2019 Omnibus Equity Incentive Plan of Gulf Resources, Inc.(the”2019 Plan”).
Removed
Under the 2019 Plan, the Company has reserved a total of 2,068,398 shares of common stock for issuance as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries.
Removed
On November 30, 2021, the Company’s Annual General Meeting approved to amend the 2019 Plan to increase the number of shares of common stock authorized for issuance under the plan by 900,000 shares.
Removed
All shares of common stock under the 2019 Plan, as amended, including shares originally authorized by equity holders and shares remaining for future issuance as of December 31, 2023, have been reserved. Our Equity Compensation Plans The following table provides information as of December 31, 2023 about our equity compensation plans and arrangements.
Removed
Equity Compensation Plan Information -as of December 31, 2023 Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders -- -- 561,801 Equity compensation plans not approved by security holders -- -- -- Total -- -- 561,801 Purchases of Equity Securities by the Company and Affiliated Purchasers None.
Removed
Recent Sales of Unregistered Securities None. Item 6. [Reserved] 29

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

48 edited+11 added−7 removed51 unchanged
Biggest changeYear ended December 31, 2023 as compared to year ended December 31, 2022 Years ended December 31, 2023 December 31, 2022 Percent Change Increase/ (Decrease) Net Revenue $ 30,043,790 $ 66,094,486 (55 %) Cost of Net Revenue $ (28,089,953 ) $ (28,669,152 ) (2 %) Gross Profit $ 1,953,837 $ 37,425,334 (95 %) Sales, Marketing and Other Operating Expense $ (59,055 ) $ (62,871 ) (6 %) Direct labor and factory overheads incurred during plant shutdown $ (9,544,675 ) $ (12,002,629 ) (20 %) General and Administrative Expenses $ (4,240,832 ) $ (6,028,079 ) (30 %) Other Operating Expense $ — $ (2,850,059 ) (100 %) (Loss)/Profit from Operations $ (11,890,725 ) $ 16,481,696 (172 %) Other Income, Net $ 144,919 $ 164,739 (12 %) Expenditure on water pollution treatment $ (46,510,856 ) $ — N/A (Loss) /Income before Taxes $ (58,256,662 ) $ 16,646,435 (450 %) Income Tax Expense (Benefit) $ (3,538,617 ) $ (6,586,985 ) (46 %) Net (Loss) /Income $ (61,795,279 ) $ 10,059,450 (714 %) Net Loss of $61,795,279 was mainly attributable to decreased sales, reduced margins.
Biggest changeYear ended December 31, 2024 as compared to year ended December 31, 2023 Years ended December 31, 2024 December 31, 2023 Percent Change Increase/ (Decrease) Net Revenue $ 7,661,010 $ 30,043,790 (75 %) Cost of Net Revenue $ (14,746,741 ) $ (28,089,953 ) (48 %) Gross Profit $ (7,085,731 ) $ 1,953,837 (463 %) Sales, Marketing and Other Operating Expense $ (46,264 ) $ (59,055 ) (22 %) Direct labor and factory overheads incurred during plant shutdown $ (8,880,643 ) $ (9,544,675 ) (7 %) General and Administrative Expenses $ (5,271,011 ) $ (4,240,832 ) 24 % Loss from Operations $ (21,283,649 ) $ (11,890,725 ) 79 % Other Income, Net $ (62,113 ) $ 144,919 (143 %) Expenditure on water pollution treatment $ — $ (46,510,856 ) (100 %) Loss on disposal of property, plant and equipment $ (29,169,008 ) $ — N/A Impairment of Property, plant and equipment $ (6,772,500 ) $ — N/A Loss before Taxes $ (57,287,270 ) $ (58,256,662 ) (2 %) Income Tax Expense (Benefit) $ (1,648,182 ) $ (3,538,617 ) (53 %) Net Loss $ (58,935,452 ) $ (61,795,279 ) (5 %) Net Loss of $58,935,452 for year 2024 was mainly attributable to decreased sales and reduced margins.
In January 2017, the Company completed the construction of the first brine water and natural gas well field in Daying County, Sichuan Province, and commenced trial production in January 2019.
Natural Gas In January 2017, the Company completed the construction of the first brine water and natural gas well field in Daying County, Sichuan Province, and commenced trial production in January 2019.
Net Cash (Used in)/Provided by Operating Activities During the year ended December 31, 2023, cash flow used in operating activities of approximately $32.75 million was mainly due to a net loss of $61.8 million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $27.13 million and an increase in accounts and other payable and accrued expenses of $1.11 million.
During the year ended December 31, 2023, cash flow used in operating activities of approximately $32.75 million was mainly due to a net loss of $61.8 million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $27.13 million and an increase in accounts and other payable and accrued expenses of $1.11 million.
As of December 31, 2023, we incurred $ 46,510,856 in other expenses for the project. The cost incurred for four major rivers are: (1) Liansigou Section for $8,057,722;(2) Mi River Section for $20,168,321;(3) Ta River Section $10,070,033 ; (4) Weitan River Section for $8,214,780 . 31 RESULTS OF OPERATIONS.
As of December 31, 2023, we incurred $46,510,856 in other expenses for the project. The cost incurred for four major rivers are: (1) Liansigou Section for $8,057,722;(2) Mi River Section for $20,168,321;(3) Ta River Section $10,070,033; (4) Weitan River Section for $8,214,780. 37 RESULTS OF OPERATIONS.
Changes in the estimated lives of assets will result in an increase or decrease in the amount of depreciation recognized in future periods. 39 Impairment of Long Lived Assets We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision.
Changes in the estimated lives of assets will result in an increase or decrease in the amount of depreciation recognized in future periods. 45 Impairment of Long Lived Assets We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision.
Valuation Allowance on Deferred Tax Assets We evaluate our deferred income tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard.
Allowance on D eferred Tax Assets We evaluate our deferred income tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard.
Factory No.8 began contributing revenue in the fourth quarter 2022. 30 The Company is awaiting governmental approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention measures .
Factory No.8 began contributing revenue in the fourth quarter 2022. 36 The Company is awaiting governmental approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention measures .
As a result of our acquisitions of SCHC and SYCI, our historical consolidated financial statements and the information presented below reflects the accounts of SCHC、SYCI and DCHC, the consolidated financial statements and the information presented below as of and for the year ended December 31, 2023.
As a result of our acquisitions of SCHC and SYCI, our historical consolidated financial statements and the information presented below reflects the accounts of SCHC 、 SYCI and DCHC, the consolidated financial statements and the information presented below as of and for the year ended December 31, 2024.
Accounts receivable Cash collections on our accounts receivable had a major impact on our overall liquidity. The following table presents the aging analysis of our accounts receivable as of December 31, 2023 and 2022.
Accounts receivable Cash collections on our accounts receivable had a major impact on our overall liquidity. The following table presents the aging analysis of our accounts receivable as of December 31, 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a Nevada holding company which conducts operations through our wholly-owned China-based subsidiaries. Our business is conducted and reported in four segments, namely, bromine, crude salt, chemical products and natural gas. Through our wholly-owned subsidiary, SCHC, we produce and trade bromine and crude salt.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a Nevada holding company which conducts operations through our wholly-owned China-based subsidiaries. Our business is conducted and reported in four segments, namely, bromine, crude salt, chemical products and natural gas.
Bromine production capacity and utilization of our factories The table below represents the annual capacity and utilization ratios for all of our bromine producing properties: Annual Production Capacity (in tonnes) Utilization Ratio (i) Fiscal year 2023 31,506 25 % Fiscal year 2022 31,506 25 % Variance of the fiscal year 2023 and 2022 0 0 % (i) Utilization ratio is calculated based on the annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes.
Bromine production capacity and utilization of our factories The table below represents the annual capacity and utilization ratios for all of our bromine producing properties: Annual Production Capacity (in tonnes) Utilization Ratio (i) Fiscal year 2024 31,506 7 % Fiscal year 2023 31,506 25 % Variance of the fiscal year 2024 and 2023 0 (18 %) (i) Utilization ratio is calculated based on the annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes.
The increase in direct labor and factory overhead costs was primarily attributable to the factories operation status during the fiscal year 2023 and year 2022, respectively. These five factories (including No.1,No.4,No.7,No.8 and No.9)were in production during the year 2023. General and Administrative Expenses.
The decrease in direct labor and factory overhead costs was primarily attributable to the factories operation status during the fiscal year 2024 and year 2023, respectively. These five factories (including No.1,No.4,No.7,No.8 and No.9)were in production during the year 2024. General and Administrative Expenses.
Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 25, 2023 until February 20, 2024. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at the bromine and crude salt factories as scheduled in February 2024.
Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February 12, 2025. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed preparation operations at the bromine and crude salt factories as scheduled in February 2025.
Bromine is commonly used in brominated flame retardants, fumigants, water purification compounds, dyes, medicines and disinfectants. Crude salt is the principal material in alkali production as well as chlorine alkali production and is widely used in the chemical, food and beverage, and other industries.
Bromine also is used to form intermediary chemical compounds such as Tetramethylbenzidine. Bromine is commonly used in brominated flame retardants, fumigants, water purification compounds, dyes, medicines and disinfectants. Crude salt is the principal material in alkali production as well as chlorine alkali production and is widely used in the chemical, food and beverage, and other industries.
As such, direct labor and factory overhead costs (including depreciation of plant and machinery) amounted $9,544,675 and $12,002,629 for fiscal years 2023 and 2022, which were presented as operating expenses instead of in cost of revenue.
As such, direct labor and factory overhead costs (including depreciation of plant and machinery) amounted $8,880,643 and $9,544,675 for fiscal years 2024 and 2023, which were presented as operating expenses instead of in cost of revenue.
The main reason for the decline in crude salt in 2023 compared with 2022 is that the unit price of sales is down by 19%, and the sales volume is also down by 47%.
The main reason for the decline in crude salt in 2024 compared with 2023 is that the unit price of sales is down by 13%, and the sales volume is also down by 20%.
This decrease was due to a decrease in crude salt unit price of 19% and a decrease in volume of 47%.
This decrease was due to a decrease in crude salt unit price of 13% and a decrease in volume of 20%.
Contractual Obligations and Commitments We have no significant contractual obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements. Additional information regarding our contractual obligations and commitments at December 31, 2023 is provided in the notes to our consolidated financial statements.
Contractual Obligations and Commitments We have no significant contractual obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements.
Foreign Currency Translation Adjustment For the fiscal year 2023, the Company had a negative foreign currency translation adjustment of $5,025,980 versus a negative adjustment of $24,886,118 in the previous year.
Foreign Currency Translation Adjustment For the fiscal year 2024, the Company had a negative foreign currency translation adjustment of $2,800,874 versus a negative adjustment of $5,025,980 in the previous year.
This adjustment impacts all balance sheet translations into U.S. dollars. 36 LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2023, cash and cash equivalents were $72,223,894 as compared to $108,226,214 as of December 31, 2022. The components of this decrease of $36,002,320 are reflected below.
This adjustment impacts all balance sheet translations into U.S. dollars. 42 LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, cash and cash equivalents were $10,075,162 as compared to $72,223,894 as of December 31, 2023. The components of this decrease of $62,148,732 are reflected below.
Net loss was $61,795,279 for the fiscal year 2023, compared to net income of $10,059,450 in the preceding year. Net (Loss)/Income Per Share For the fiscal year 2023, net loss per share was $5.92 compared to net income of $1.00 in the preceding year. There were 10,726,924 shares outstanding compared to 10,431,924 shares.
Net loss was $58,935,452 for the fiscal year 2024, compared to net loss of $61,795,279 in the preceding year. Net Loss Per Share For the fiscal year 2024, net loss per share was $5.49 compared to net loss per share of $5.92 in the preceding year. There were 10,726,924 shares outstanding compared to 10,726,924 shares.
Crude salt segment For the year ended December 31, 2023, the cost of net revenue for the crude salt segment was $1,567,993.The cost of net revenue for our crude salt segment for the year ended December 31, 2022 was $3,581,567.
The cost of net revenue for our crude salt segment for the year ended December 31, 2023 was $1,567,993. Chemical products segment Cost of net revenue for our chemical products segment for the fiscal year 2024 and 2023 was $0.
December 31, 2023 December 31, 2022 % of total % of total Aged 1-30 days $ 2,040,377 42 % $ 2,792,156 52 % Aged 31-60 days 2,460,233 51 % 2,571,010 48 % Aged 61-90 days 365,086 7 % — — Aged 91-120 days — — — — Aged 121-150 days — — — — Aged 151-180 days — — — — Aged 181-210 days — — — — Aged 211-240 days — — — — Total $ 4,865,696 100 % $ 5,363,166 100 % The overall accounts receivable balance as of December 31, 2023 decreased by $497,470, compared to those of December 31, 2022.
December 31, 2024 December 31, 2023 % of total % of total Aged 1-30 days $ 419,581 74 % $ 2,040,377 42 % Aged 31-60 days 144,942 26 % 2,460,233 51 % Aged 61-90 days — — 365,086 7 % Aged 91-120 days — — — — Aged 121-150 days — — — — Aged 151-180 days — — — — Aged 181-210 days — — — — Aged 211-240 days — — — — Total $ 564,523 100 % $ 4,865,696 100 % The overall accounts receivable balance as of December 31, 2024 decreased by $4,301,173, compared to those of December 31, 2023.
We perform ongoing credit evaluation on the financial condition of our customers. 37 Inventory Our inventory consists of the following: December 31, 2023 December 31, 2022 % of total % of total Raw materials $ 32,840 5 % $ 26,192 2 % Finished goods 544,389 95 % 1,572,380 98 % Total $ 577,229 100 % $ 1,598,572 100 % The net inventory level as of December 31, 2023 decreased by $1,021,343, as compared to the net inventory level as of December 31, 2022, one of the main reasons for the reduction in inventories was the decline in sales.
We perform ongoing credit evaluation on the financial condition of our customers. 43 Inventory Our inventory consists of the following: December 31, 2024 December 31, 2023 % of total % of total Raw materials $ 10,610 3 % $ 32,840 5 % Finished goods 304,761 97 % 544,389 95 % Total $ 315,371 100 % $ 577,229 100 % The net inventory level as of December 31, 2024 decreased by $261,858, as compared to the net inventory level as of December 31, 2023, one of the main reasons for the reduction in inventories was the decline in sales.
Statement of Cash Flows Years Ended December 31 2023 2022 Net cash (used in) provided by operating activities $ (32,751,851 ) $ 51,149,065 Net cash used in investing activities $ — $ (37,560,932 ) Net cash used in financing activities $ (267,810 ) $ (264,863 ) Effects of exchange rate changes on cash and cash equivalents $ (2,982,659 ) $ (864,319 ) Net decrease in cash and cash equipment $ (36,002,320 ) $ 12,458,951 For the fiscal years 2023 and 2022, we met our working capital and capital investment requirements by using cash flows from operations and cash on hand.
Statement of Cash Flows Years Ended December 31 2024 2023 Net cash provided by (used in) operating activities $ 675,068 $ (32,751,851 ) Net cash used in investing activities $ (60,551,488 ) $ — Net cash used in financing activities $ (249,240 ) $ (267,810 ) Effects of exchange rate changes on cash and cash equivalents $ (2,023,072 ) $ (2,982,659 ) Net decrease in cash and cash equipment $ (62,148,732 ) $ (36,002,320 ) For the fiscal years 2024 and 2023, we met our working capital and capital investment requirements by using cash flows from operations and cash on hand.
Cost of Net Revenue Cost of Net Revenue by Segment % Change Year Ended Year Ended of Cost of December 31, 2023 December 31, 2022 Net Revenue Segment % of total % of total Bromine $ 26,521,281 94 % $ 25,087,171 88 % 5.7 % Crude Salt 1,567,993 6 % 3,581,567 12 % (56.2 %) Chemical Products — — — — — Natural Gas 679 — 414 — 64.0 % Total $ 28,089,953 100 % $ 28,669,152 100 % (2.0 %) Cost of net revenue primarily includes costs of the raw materials consumed, the direct salaries and benefits for production staff, electricity costs, depreciation and amortization of manufacturing plant and machinery, and other manufacturing-related costs.
Cost of Net Revenue Cost of Net Revenue by Segment % Change Year Ended Year Ended of Cost of December 31, 2024 December 31, 2023 Net Revenue Segment % of total % of total Bromine $ 13,750,051 93 % $ 26,521,281 94 % (48 %) Crude Salt 996,396 7 % 1,567,993 6 % (37 %) Chemical Products — — — — — Natural Gas 294 — 679 — (57 %) Total $ 14,746,741 100 % $ 28,089,953 100 % (48 %) Cost of net revenue primarily includes costs of the raw materials consumed, the direct salaries and benefits for production staff, electricity costs, depreciation and amortization of manufacturing plant and machinery, and other manufacturing-related costs.
Chemical products segment Loss from operations from our chemical products segment was $1,653,349 for the fiscal year 2023, compared to a loss of $1,953,230 in the same period in 2022.
Chemical products segment Loss from operations from our chemical products segment was $3,028,479 for the fiscal year 2024, compared to a loss of $1,653,349 in the same period in 2023. Natural Gas segment Loss from operations from our natural gas segment was $195,364 for the fiscal year 2024, compared to a loss of $86,284 in the same period in 2023.
Chemical products segment For the years ended December 31, 2023 and December 31, 2022, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017. 33 Natural gas segment For the years ended December 31, 2023, and December 31, 2022, the net revenue for the natural gas production was $0.
Chemical products segment For the years ended December 31, 2024 and December 31, 2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017. 39 Natural Gas segment For the year ended December 31, 2024, and December 31, 2023, the net revenue for the n atural g as se g ment was $61,207 and $150,861.
This decrease was due to a 55% decrease in average selling price. Crude salt se g ment Net revenue from our crude salt segment decreased by 57.5% to $2,971,467 for the year ended December 31, 2023, compared to $6,996,552 for the last year.
This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%. Crude salt se g ment Net revenue from our crude salt segment decreased by 31.0% to $2,049,988 for the year ended December 31, 2024, compared to $2,971,467 for the last year.
The decrease in income was primarily due to a 55% decrease in average selling price. Crude salt se g ment Income from operations from our crude salt segment was $640,309 for fiscal year 2023, compared to an income of $2,301,885 in the same period in 2022.
This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%. Crude salt se g ment Loss from operations from our crude salt segment was $76,694 for fiscal year 2024 compared to an income of $640,309 in the same period in 2023.
We are one of the largest producers of bromine in China, as measured by production output. Elemental bromine is used to manufacture a wide variety of bromine compounds used in industry and agriculture. Bromine also is used to form intermediary chemical compounds such as Tetramethylbenzidine.
Through our wholly-owned subsidiary, SCHC, we produce and trade bromine and SHSI for crude salt production and trading. crude salt. We are one of the largest producers of bromine in China, as measured by production output. Elemental bromine is used to manufacture a wide variety of bromine compounds used in industry and agriculture.
Bromine segment For the year ended December 31, 2023, the cost of net revenue for the bromine segment was $26,521,281. For the year ended December 31, 2022, the cost of net revenue for the bromine segment was $25,087,171.
Bromine segment For the year ended December 31, 2024, the cost of net revenue for the bromine segment was $13,750,051. For the year ended December 31, 2023, the cost of net revenue for the bromine segment was $26,521,281. Crude salt segment For the year ended December 31, 2024, the cost of net revenue for the crude salt segment was $996,396.
Net Revenue The table below shows the changes in net revenue in the respective segment of the Company for the fiscal year 2023 compared to the same period in 2022: Net Revenue by Segment Year Ended Year Ended Percent Increase (Decrease) December 31, 2023 December 31, 2022 of Net Revenue Segment % of total % of total Bromine $ 26,921,462 89.6 % $ 58,964,941 89.2 % (54.3 %) Crude Salt 2,971,467 9.9 % 6,996,552 10.6 % (57.5 %) Chemical Products — — — — — Natural Gas — — — — — Total $ 29,892,929 99.5 % $ 65,961,493 99.8 % (54.7 %) Equipment Lease 150,861 0.5 % 132,993 0.2 % 13.4 % Total sales $ 30,043,790 100.0 % $ 66,094,486 100.0 % (54.5 %) Years Ended December 31 Percent Change Bromine and crude salt segments product sold in tonnes 2023 2022 Increase Bromine (excluded volume sold to SYCI) 7,951 7,817 2 % Crude Salt 97,101 184,520 (47 %) 32 Bromine segment Net revenue from our bromine segment decreased by 54.3% to $26,921,462 for the year ended December 31, 2023, compared to $58,964,941 for the year ended December 31, 2022.
Net Revenue The table below shows the changes in net revenue in the respective segment of the Company for the fiscal year 2024 compared to the same period in 2023: Net Revenue by Segment Segment Year Ended December 31, 2024 % of total Year Ended December 31, 2023 % of total Percent Increase (Decrease) of Net Revenue Bromine $ 5,549,815 72.4 % $ 26,921,462 89.6 % (79.4 %) Crude Salt 2,049,988 26.8 % 2,971,467 9.9 % (31.0 %) Chemical Products — — — — — Natural Gas 61,207 0.8 % 150,861 0.5 % (59.4 %) Total sales $ 7,661,010 100.0 % $ 30,043,790 100.0 % (74.5 %) Years Ended December 31 Percent Change Bromine and crude salt segments product sold in tonnes 2024 2023 Increase Bromine (excluded volume sold to SYCI) 2,250 7,951 (72 %) Crude Salt 77,289 97,101 (20 %) 38 Bromine se g ment Net revenue from our bromine segment decreased by 79.4% to $5,549,815 for the year ended December 31, 2024, compared to $26,921,462 for the year ended December 31, 2023.
General and administrative expenses were $4,240,832 for the year ended December 31, 2023, representing a decrease of $1,787,247 (or 30%) as compared to$6,028,079 for the same period in 2022. 35 (Loss)/Profit from Operations. Operating loss was $11,890,725 for the fiscal year 2023, compared to a profit of $16,481,696 in the same period in 2022.
General and administrative expenses were $5,271,011 for the year ended December 31, 2024, representing an increase of $1,030,179 (or 24%) as compared to $4,240,832 for the same period in 2023. 41 Loss from Operations. Operating loss was $21,283,649 for the fiscal year 2024, compared to a loss of $11,890,725 in the same period in 2023.
Gross profit was $1,953,837, or 7%, of net revenue for the year ended December 31, 2023, compared to $37,425,334, or 57%, of net revenue for the same period in 2022.
Natural Gas segment Cost of net revenue for our natural gas segment for the year ended December 31, 2024 and 2023 was $294 and $679. 40 Gross (Loss) Profit. Gross (loss) was $7,085,731or 93%, of net revenue for the year ended December 31, 2024, compared to $1,953,837, or 7%, of net revenue for the same period in 2023.
See “Notes to Consolidated Financial Statements, Note 19 - Capital Commitment and Other Service Contractual Obligations.” 38 Material Off-Balance Sheet Arrangements We do not currently have any off-balance sheet arrangements falling within the definition of Item 303(a) of Regulation S-K.
Additional information regarding our contractual obligations and commitments at December 31, 2024 is provided in the notes to our consolidated financial statements. 44 Material Off-Balance Sheet Arrangements We do not currently have any off-balance sheet arrangements falling within the definition of Item 303(a) of Regulation S-K.
Raw materials increased by $6,648 as of December 31, 2023, as compared to December 31, 2022. Finished goods decreased by $1,027,991 as of December 31, 2023, as compared to December 31, 2022. Net Cash Used In Investing Activities For the fiscal year 2023, we used $0 for investing activities.
Raw materials decreased by $22,230 as of December 31, 2024, as compared to December 31, 2023. Finished goods decreased by $239,628 as of December 31, 2024, as compared to December 31, 2023. Net Cash Used In Investing Activities For the fiscal year 2024, we used approximately $60.5 million for purchase of fixed assets.
During the year ended December 31, 2022, cash flow provided by operating activities of approximately $51.1 million was mainly due to a net income of $10.06 million, a decrease in accounts receivable of $8.2 million, a decrease in accounts payable of $0.8 million, a decrease in deferred taxes of $6.59 million, and a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $26.78 million, offset by an increases in operating leases and prepayments.
Net Cash Provided by (Used in) Operating Activities During the year ended December 31, 2024, cash flow used in operating activities of approximately $0.68 million was mainly due to a net loss of $58.9 million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $18 million, impairment of property, gain on disposal of equipment of $29 million, plant and equipment of $6.8 million and an increase in account receivable of $4.26 million.
We have policies in place to ensure that sales are made to customers with an appropriate credit history.
The decrease was mainly due to the decrease in the amount of accounts receivable in the current period as a result of the decrease in sales revenue. We have policies in place to ensure that sales are made to customers with an appropriate credit history.
Income (loss) from Operations by Segment Year ended December 31, 2023 Year ended December 31, 2022 Segment: % of total % of total Bromine $ (10,005,755 ) 90.1 % $ 17,905,181 99.0 % Crude Salt $ 640,309 (5.8 %) $ 2,301,885 12.7 % Chemical Products $ (1,653,349 ) 14.9 % $ (1,953,230 ) (10.8 %) Natural Gas $ (86,284 ) 0.7 % $ (148,099 ) (0.9 %) Profit (Loss) from operations before corporate costs $ (11,105,079 ) 100 % $ 18,105,737 100 % Corporate costs $ (785,646 ) $ (1,060,405 ) Unrealized gain (loss) on translation of intercompany balance $ — $ (563,636 ) (Loss)/ Profit from operations before taxes $ (11,890,725 ) $ 16,481,696 Bromine segment Loss from operations from our bromine segment was $10,005,755 for the fiscal year 2023, compared to an income of $17,905,181 in the same period in 2022.
Income (loss) from Operations by Segment Year ended December 31, 2024 Year ended December 31, 2023 Segment: % of total % of total Bromine $ (17,238,619 ) 83.9 % $ (10,005,755 ) 90.1 % Crude Salt $ (76,694 ) 0.4 % $ 640,309 (5.8 %) Chemical Products $ (3,028,479 ) 14.7 % $ (1,653,349 ) 14.9 % Natural Gas $ (195,364 ) 1 % $ (86,284 ) 0.7 % (Loss from operations before corporate costs $ (20,539,156 ) 100 % $ (11,105,079 ) 100 % Corporate costs $ (744,493 ) $ (785,646 ) Loss from operations before taxes $ (21,283,649 ) $ (11,890,725 ) Bromine se g ment Loss from operations from our bromine segment was $17,238,619 for the fiscal year 2024, compared to a loss of $10,005,755 in the same period in 2023.
Gross Profit (Loss) by Segment % Point Change Year Ended Year Ended of Gross December 31, 2023 December 31, 2022 Profit Margin Segment Gross Profit (loss) Margin Gross Profit (loss) Margin Bromine $ 400,181 2 % $ 33,877,770 58 % (56 %) Crude Salt 1,403,474 47 % 3,414,985 49 % (2 %) Chemical Products — — — — — Natural Gas — — — — — Equipment Lease 150.182 100 % 132,579 100 % 0 % Total Gross Profit $ 1,953,837 7 % $ 37,425,334 57 % (50 %) Bromine segment For the year ended December 31, 2023, gross profit margin for our brom ine segment was 2% compared to 58% in the previous year.
Gross Profit (Loss) by Segment Year Ended December 31, 2024 Year Ended December 31, 2023 % Point Change of Gross Profit Margin Segment Gross Profit (loss) Margin Gross Profit (loss) Margin Bromine $ (8,200,236 ) (147 %) $ 400,181 2 % (145 %) Crude Salt 1,053,592 51 % 1,403,474 47 % 4 % Chemical Products — — — — — Natural Gas 60,913 100 % 150,182 100 % 0 % Total Gross (Loss) Profit $ (7,085,731 ) (93 %) $ 1,953,837 7 % (86 %) Bromine se g ment For the year ended December 31, 2024, the gross loss margin for our bromine segment was 147% compared to the gross profit of 2% in the previous year.
Crude salt segment For the year ended December 31, 2023, the gross profit margin for our crude salt segment was 47%, compared to 49% in the preceding year, representing a 2% decrease.
This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%. Crude salt se g ment For the year ended December 31, 2024, the gross profit margin for our crude salt segment was 51%, compared to 47% in the preceding year, representing a 4% increase.
We may not be able to identify, successfully integrate or profitably manage any businesses or business segment we may acquire, or any expansion of our business.
We intend to continue to focus our efforts on the activities of SCHC, SYCI, SHSI and DCHC as these segments continue to expand within the Chinese market. We may not be able to identify, successfully integrate or profitably manage any businesses or business segment we may acquire, or any expansion of our business.
Our inability to implement and manage our expansion strategy successfully may have a material adverse effect on our business and future prospects. Going Concern Consideration There is no significant uncertainty about the continuing operations of the Company.
Our inability to implement and manage our expansion strategy successfully may have a material adverse effect on our business and future prospects. Going Concern Consideration The consolidated financial statements are prepared on the going concern basis, meaning that the enterprise is expected to realize the assets and settle the liabilities through normal business operations.
Other income, net, which represent bank interest income, net of finance lease interest expense was $144,919 for the fiscal year 2023, representing a decrease of $19,820 (or approximately 12%) as compared to the preceding year. Expenditure on water pollution treatment. Expenditure on water pollution treatment was $46,510,856 in the fiscal year 2023. Net (Loss)/Income.
Other (Expense)/Income, Net . Other income, net, which represent bank interest income, net of finance lease interest expense and $50,470 of non-operating expenses was $62,113 for the fiscal year 2024, representing a decrease of $207,032 (or approximately 143% as compared to the preceding year. Loss on disposal of property, plant and equipment.
For the fiscal year 2022, we used approximately $37.6 million for investing activities. Net Cash Used In Financing Activities For the fiscal year 2023 and 2022, we used $0.3 million to repay finance lease obligations.
For the fiscal year 2023, we used $0 for investing activities. Net Cash Used In Financing Activities For the fiscal year 2024 and 2023, we used $0.3 million to repay finance lease obligations. We believe that our available funds and cash flows generated from operations will be sufficient to meet our anticipated ongoing operating needs for the next twelve months.
We believe that our available funds and cash flows generated from operations will be sufficient to meet our anticipated ongoing operating needs for the next twelve months. As of December 31, 2023, we had approximately $72 million in available cash, all of which is in highly liquid current deposits yielding minimal or no interest.
As of December 31, 2024, we had approximately $10 million in available cash, all of which is in highly liquid current deposits yielding minimal or no interest. We do not anticipate paying cash dividends in the foreseeable future.
Our cost of net revenue was $28,089,953 for the year ended December 31, 2023, representing a $579,199 (or 2%) decrease compared to the preceding year. In May 2022, we separated the bromine and the crude salt business to comply with government regulations.
Our cost of net revenue was $14,746,741 for the year ended December 31, 2024, representing a $13,343,212 (or 48%) decrease compared to the preceding year. The decrease in costs was mainly due to a significant decrease in sales volume.
Removed
Equipment Lease For the year ended December 31, 2023, and December 31, 2022, the net revenue for the equipment lease was $150,861 and $132,993.
Added
The company also suffered a loss of $29,169,008 and $6,772,500 on retirement of fixed assets and impairment of fixed assets. Additionally, the compensation expenses amounted to $194,700 for shares issued to company employees, officers and consultant for the year 2024 . Net Loss of $61,795,279 for year 2023 was mainly attributable to decreased sales and reduced margins.
Removed
This separation required a reevaluation of cost allocations, resulting in increased allocations to bromine and decreased allocations to crude salt.
Added
The 59.4% decrease in revenue was primarily due to the expiration of contracts.
Removed
Chemical products segment Cost of net revenue for our chemical products segment for the fiscal year 2023 and 2022 was $0. Natural gas segment Cost of net revenue for our natural gas segment for the year ended December 31, 2023 and 2022 was $679 and $414. 34 Gross Profit.
Added
Direct labor and factory overheads incurred during plant shutdown.
Removed
This decrease was primarily attributable to the lower average selling price of bromine of $3,386 per ton in the year ended December 31, 2023, compared to $7,543 per ton in the year ended December 31, 2022. For the year ended December 31, 2022, the gross profit margin for our bromine segment was 58%.
Added
Loss on disposal of property, plant and equipment was $29,169,008 in the fiscal year 2024.
Removed
This decrease was primarily attributable to the lower average selling price of crude salt of $31 per ton in the year ended December 31, 2023 compared to $38 per ton in the year ended December 31, 2022 。 Direct labor and factory overheads incurred during plant shutdown.
Added
In June 2024, considered the bromide well and transmission channel have been in use for many years, the Company conducted a site inspection and found that some wells and channels were seriously damaged by water seepage which in turn required write-off or new construction, and the write-off amount is $29,169,008. Impairment of Property, plant and equipment.
Removed
Natural g as segment Loss from operations from our natural gas segment was $86,284 for the fiscal year 2023, compared to a loss of $148,099 in the same period in 2022. Other (Expense)/Income, Net .
Added
Impairment of property, plant and equipment was $6,772,500 in the fiscal year 2024. In December 2024, due to the delayed completion of some machinery and equipment of Yuxin Chemical's new plant resulting from the impact of the current market environment, our company hired professional evaluators to perform impairment test on these assets. The latter determined impairment was $6,772,500. Net Loss.
Removed
We do not anticipate paying cash dividends in the foreseeable future. We intend to continue to focus our efforts on the activities of SCHC, SYCI, SHSI and DCHC as these segments continue to expand within the Chinese market.
Added
However, the going concern of the enterprise relies on many factors, such as profitable operations, generating operating cash flows, obtaining financing, etc. The company assesses its liquidity by monitoring cash and cash equivalents, as well as operating and capital expenditure commitments.
Added
As of December 31, 2024, As of Dec 31, 2024, the Company had current assets of $17.45 million and current liabilities of $17.73 million. As a result, the deficit was $0.28 million, and it has suffered losses in both the fiscal years of 2024 and 2023 as well.
Added
If it is unable to raise additional funds, it may need to take measures such as cutting administrative and operational cost and save funds.
Added
If there are significant doubts regarding the company's ability to continue operations, the company is attempting to alleviate such concerns through measures such as controlling operating expenses, shifting business focus to revenue-generating activities, obtaining authorization from domestic banks and other financial institutions, and seeking equity or debt financing. Additionally, the company will also obtain financial support commitments from related parties.
Added
However, these situations still pose significant doubts regarding the company's ability to continue operations. The financial statements do not consider the potential impact on the recoverability of assets, classification, and amounts and classification of liabilities if the company is unable to continue operations.

Other GURE 10-K year-over-year comparisons