GULF RESOURCES, INC.
For the period ended Dec 31, 2024. Filed Apr 11, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 11, 2025
GURE$3.15+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-09-27.
0001193805-24-001184
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsQuantitative and Qualitative Disclosures about Market Risk. Financial Statements and Supplementary DataCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-11.
0001193805-25-000461
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsQuantitative and Qualitative Disclosures about Market Risk. Financial Statements and Supplementary DataThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 105 current paragraphs.
61 unchanged; 31 reworded; 13 added; 11 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Natural Gas
Current report
Net Loss of $58,935,452 for year 2024 was mainly attributable to decreased sales and reduced margins. 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**.**
Current report
For the year ended December 31, 2024, and December 31, 2023, the net revenue for the natural gas segment was $61,207 and $150,861. The 59.4% decrease in revenue was primarily due to the expiration of contracts.
Current report
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. This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%.
Current report
***Loss on disposal of property, plant and equipment.***Loss on disposal of property, plant and equipment was $29,169,008 in the fiscal year 2024. 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.
Current report
***Impairment of Property, plant and equipment.***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.
Current report
Net Loss Per Share
Current report
Statement of Cash Flows
Current report
Net Cash Provided by (Used in) Operating Activities
Current report
Raw materials decreased by $22,230 as of December 31, 2024, as compared to December 31, 2023.
Current report
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. However, the going concern of the enterprise relies on many factors, such as profitable operations, generating operating cash flows, obtaining financing, etc.
Current report
The company assesses its liquidity by monitoring cash and cash equivalents, as well as operating and capital expenditure commitments. 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. If it is unable to raise additional funds, it may need to take measures such as cutting administrative and operational cost and save funds.
Current report
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. 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.
Removed paragraphs (11)
Previous report
For the years ended December 31, 2023, and December 31, 2022, the net revenue for the natural gas production was $0.
Previous report
Equipment Lease
Previous report
For the year ended December 31, 2023, and December 31, 2022, the net revenue for the equipment lease was $150,861 and $132,993.
Previous report
In May 2022, we separated the bromine and the crude salt business to comply with government regulations. This separation required a reevaluation of cost allocations, resulting in increased allocations to bromine and decreased allocations to crude salt.
Previous report
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 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。
Previous report
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. The decrease in income was primarily due to a 55% decrease in average selling price.
Previous report
Expenditure on water pollution treatment. Expenditure on water pollution treatment was $46,510,856 in the fiscal year 2023.
Previous report
Net (Loss)/Income Per Share
Previous report
Net Cash (Used in)/Provided by Operating Activities
Previous report
Raw materials increased by $6,648 as of December 31, 2023, as compared to December 31, 2022.
Previous report
There is no significant uncertainty about the continuing operations of the Company.
Reworded paragraphs (31)
Previous wording
Through our wholly-owned subsidiary, SCHC, we produce and trade bromine and 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 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.
Current wording
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 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.
Previous wording
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.
Current wording
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.
Previous wording
Net Loss of $61,795,279 was mainly attributable to decreased sales, reduced margins. Additionally, the compensation expenses amounted to $451,350 for shares issued to company employees, officers and consultant for the year 2023**.** The Company also incurred losses of $46,510,856 on a flood prevention project.
Current wording
Net Loss of $61,795,279 for year 2023 was mainly attributable to decreased sales and reduced margins. Additionally, the compensation expenses amounted to $451,350 for shares issued to company employees, officers and consultant for the year 2023**.**The Company also incurred losses of $46,510,856 on a flood prevention project.
Previous wording
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. This decrease was due to a 55% decrease in average selling price.
Current wording
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. This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%.
Previous wording
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 crude salt unit price of 19% and a decrease in volume of 47%.
Current wording
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. This decrease was due to a decrease in crude salt unit price of 13% and a decrease in volume of 20%.
Previous wording
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. 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.
Current wording
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. 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.
Previous wording
For the year ended December 31, 2023, the cost of net revenue for the bromine segment was $26,521,281.
Current wording
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.
Previous wording
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.
Current wording
For the year ended December 31, 2024, the cost of net revenue for the crude salt segment was $996,396. The cost of net revenue for our crude salt segment for the year ended December 31, 2023 was $1,567,993.
Previous wording
Cost of net revenue for our natural gas segment for the year ended December 31, 2023 and 2022 was $679 and $414.
Current wording
Cost of net revenue for our natural gas segment for the year ended December 31, 2024 and 2023 was $294 and $679.
Previous wording
***Gross Profit.***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.
Current wording
***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.
Previous wording
For the year ended December 31, 2023, gross profit margin for our bromine segment was 2% compared to 58% in the previous year. 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.
Current wording
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. This decrease was due to a decrease in bromine unit price of 27% and a decrease in volume of 72%.
Previous wording
For the year ended December 31, 2022, the gross profit margin for our bromine segment was 58%.
Current wording
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.
Previous wording
***Direct labor and factory overheads incurred during plant shutdown.***On September 1, 2017, the Company received notification from the government of Yangkou County, Shouguang City of PRC stating that production at all its bromine and crude salt and chemical factories should be halted with immediate effect in order for the Company to perform rectification and improvement in accordance with the county’s new safety and environmental protection requirements. 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 Bohai Park. 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. 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.
Current wording
***Direct labor and factory overheads incurred during plant shutdown.***On September 1, 2017, the Company received notification from the government of Yangkou County, Shouguang City of PRC stating that production at all its bromine and crude salt and chemical factories should be halted with immediate effect in order for the Company to perform rectification and improvement in accordance with the county’s new safety and environmental protection requirements. 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 Bohai Park. 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 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.
Previous wording
***General and Administrative Expenses.***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.
Current wording
***General and Administrative Expenses.***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.
Previous wording
***(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.
Current wording
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.
Previous wording
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. 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%.
Current wording
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. 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%.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
Other (Expense)/Income, Net. 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.
Current wording
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.
Previous wording
***Net (Loss)/Income.***Net loss was $61,795,279 for the fiscal year 2023, compared to net income of $10,059,450 in the preceding year.
Current wording
***Net Loss.***Net loss was $58,935,452 for the fiscal year 2024, compared to net loss of $61,795,279 in the preceding year.
Previous wording
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.
Current wording
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.
Previous wording
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. This adjustment impacts all balance sheet translations into U.S. dollars.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
The overall accounts receivable balance as of December 31, 2023 decreased by $497,470, compared to those of December 31, 2022. We have policies in place to ensure that sales are made to customers with an appropriate credit history. We perform ongoing credit evaluation on the financial condition of our customers.
Current wording
The overall accounts receivable balance as of December 31, 2024 decreased by $4,301,173, compared to those of December 31, 2023. 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. We perform ongoing credit evaluation on the financial condition of our customers.
Previous wording
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.
Current wording
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.
Previous wording
Finished goods decreased by $1,027,991 as of December 31, 2023, as compared to December 31, 2022.******
Current wording
Finished goods decreased by $239,628 as of December 31, 2024, as compared to December 31, 2023.
Previous wording
For the fiscal year 2022, we used approximately $37.6 million for investing activities.
Current wording
For the fiscal year 2024, we used approximately $60.5 million for purchase of fixed assets.
Previous wording
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. We do not anticipate paying cash dividends in the foreseeable future.
Current wording
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.
Previous wording
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. See “Notes to Consolidated Financial Statements, Note 19 - Capital Commitment and Other Service Contractual Obligations.”
Current wording
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, 2024 is provided in the notes to our consolidated financial statements.
Previous wording
Valuation Allowance on Deferred Tax Assets
Current wording
Allowance on Deferred Tax Assets
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the year ended December 31, 2022, the cost of net revenue for the bromine segment was $25,087,171.