GULF RESOURCES, INC.
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 13, 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-Q
Period ended 2025-03-31; filed 2025-05-13.
0001193805-25-000638
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001193805-25-001184
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe 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 97 previous paragraphs and 122 current paragraphs.
47 unchanged; 25 reworded; 43 added; 25 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 10 previous and 18 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 (43)
Current report
Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 10, 2022 until February 1, 2023 8:00 AM China Time. To comply with such notification, the Company had temporarily stopped production at its bromine facilities during the aforesaid period and reopened the operating bromine and crude salt factories in February, 2023 as planned.
Current report
On February 28, 2025, the transactions as contemplated by the acquisition agreements were closed. 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.
Current report
Net Loss of $773,777 for the three-month periods ended June 30, 2025 was mainly attributable to increased General and administrative expenses.
Current report
Net Loss of $33,097,918 for the three-month periods ended June 30, 2024 was mainly attributable to decreased sales and reduced margins. The company also suffered a loss of $29,169,008 on retirement of fixed assets .
Current report
For the three-month periods ended June 30, 2025 and 2024, the net revenue for the bromine segment was $7,676,374 and $1,859,234, respectively. The increase of the net revenue of bromine was due to a increase in selling prices and tonnes sold of bromine in the second quarter of 2025. The sale price of bromine in the second quarter of 2025 was 64% higher than in the second quarter of 2024, and the quantity sold was 152% higher than in the second quarter of 2024.
Current report
For the three-month periods ended June 30, 2025 and 2024, the net revenue for the crude salt was $667,411 and $523,935, respectively. The increase of net revenue of crude salt was mainly due to 22% increase in average selling price of crude salt for the three-month period ended June 30, 2025.
Current report
For the three-month period ended June 30, 2025, the cost of net revenue for the bromine segment was $7,016,815.
Current report
For the three-month period ended June 30, 2024, the cost of net revenue for the bromine segment was $4,729,059.
Current report
For the three-month period ended June 30, 2025 the cost of net revenue for the crude salt segment was $340,315.
Current report
For the three-month period ended June 30, 2024 the cost of net revenue for the crude salt segment was $382,999.
Current report
***Gross Profit (Loss).***Gross profit was $986,655, or 115%, of net revenue for the three-month period ended June 30, 2025, representing a increase of $3,715,544, as compared to a gross loss of $2,728,889, or 115%, of net revenue for the same period in 2024.
Current report
For the three-month period ended June 30, 2025, the gross profit margin for our crude salt segment was 49%.
Current report
For the three-month period ended June 30, 2024, the gross profit margin for our crude salt segment was 27%.
Current report
Loss from OperationsLoss from operations was $750,686 for the three-month period ended June 30, 2025, compared to loss from operations of $5,146,997 in the same period in 2024.
Current report
Loss from operations from our crude salt segment was $147,489 for the three-month period ended June 30, 2025, compared to income from operations of $130,024 in the same period in 2024.
Current report
Loss from operations from our chemical products segment was $344,947 for the three-month period ended June 30, 2025, compared to loss from operations of $339,254 in the same period in 2024.
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
Comparison of the Six-Month Period Ended June 30, 2025 and 2024
Current report
Net Loss of $5,403,277 for the six-month periods ended June 30, 2025 was mainly attributable to increased General and administrative expenses.
Current report
Net Loss of $37,090,050 for the six-month periods ended June 30, 2024 was mainly attributable to decreased sales and reduced margins. The company also suffered a loss of $29,169,008 on retirement of fixed assets .
Current report
Net revenue from our bromine segment increased to $9,158,243 for the six-month period ended June 30, 2025 compared to $3,005,431 for the same period in 2024 due to the higher selling price of bromine and tonnes sold of bromine.
Current report
Net revenue from our crude salt segment increased to $789,989 for the six-month period ended June 30, 2025 compared $640,606 for the same period in 2024 due to the higher selling tonnes of crude salt.
Current report
For the six-month period ended June 30, 2025 and 2024, the net revenue for the natural gas production was $0 and $44,194, respectively. The 100% decrease in revenue was primarily due to the expiration of contracts.
Current report
Cost of Net Revenue
Current report
For the six-month period ended June 30, 2025, the cost of net revenue for the bromine segment was $8,549,943.
Current report
For the six-month period ended June 30, 2024, the cost of net revenue for the bromine segment was $6,801,811.
Current report
For the six-month period ended June 30, 2025, the cost of net revenue for the crude salt segment was $401,457.
Current report
For the six-month period ended June 30, 2024, the cost of net revenue for the crude salt segment was $429,893.
Current report
Cost of net revenue for our chemical products segment for the six-month period ended June 30, 2025 and 2024 was $0.
Current report
For the six-month period ended June 30, 2025, the gross profit margin for our bromine segment was 6.7%, compared to gross loss margin of 126% in the six-month period ended June 30, 2024. The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,857 per ton in the six-month period ended June 30, 2025 compared to $2,438 per ton in the six-month period ended June 30, 2024.
Current report
For the six-month period ended June 30, 2025, the gross profit margin for our crude salt segment was 49.2%.
Current report
For the six-month period ended June 30, 2024 the gross profit margin for our crude salt segment was 33%.
Current report
For the six-month period ended June 30, 2025, the gross profit margin for our chemical segment was 0% due to the closure of our plant and factories to perform rectification and improvement. As a result, there were no chemical products for sale for the six-month period ended June 30, 2025.
Current report
Gross profit for our natural gas segment for the six-month period ended June 30, 2025 and 2024 was $0 and $43,995 respectively.
Current report
General and Administrative Expenses. General and administrative expenses were $2,384,288 for the six-month period ended June 30, 2025, a increase of $976,860 (or 69%) as compared to $1,407,428 for the same period in 2024.
Current report
Loss from operations from our bromine segment was $3,501,217 for the six-month period ended June 30, 2025, compared to an loss from operations of $9,445,401 in the same period in 2024. This decrease was due to a 93% increase in tonnes sold and a 58% increase in average selling price.
Current report
Loss from operations from our crude salt segment was $701,551 for the six-month period ended June 30, 2025, compared to an income from operations of $54,932 in the same period in 2024. The increase in operating losses was mainly due to the depreciation resulting from the new acquisition of crude salt assets in 2024.
Current report
Loss from operations from our chemical products segment was $703,576 for the six-month period ended June 30, 2025, compared to a loss from operations of $654,078 in the same period in 2024.
Current report
Loss from operations from our natural gas segment was $88,099 for the six-month period ended June 30, 2025, compared to a loss from operations of $101,482 in the same period in 2024.
Current report
Interest Income (Loss), Net. Other loss, net of $39,172 represented bank interest income, net of finance lease interest expense for the six -month period ended June 30, 2025, a decrease of $60,374 as compared to the same period in 2024.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (25)
Previous report
For the three-month periods ended March 31, 2025 and 2024, the net revenue for the bromine segment was $1,481,869 and $1,146,197. This increase was due to the 11% decrease in tonnes sold and a 45% increase in average selling price.
Previous report
For the three-month periods ended March 31, 2025 and 2024, the net revenue for the crude salt was $122,578 and $116,671. This increase was due to the 16% increase in tonnes sold and a 10% decrease in average selling price.
Previous report
Cost of net revenue for our bromine segment for the three-month period ended March 31, 2025 and 2024 was $1,533,128 and $2,072,752.
Previous report
Cost of net revenue for our crude salt segment for the three-month period ended March 31, 2025 and 2024 was $61,142 and $46,894.
Previous report
For the three-month period ended March 31, 2025, the gross profit margin for our crude salt segment was 50%, compared to 60% in the same period in 2024, representing a 10% decrease.
Previous report
For the three-month period ended March 31, 2025, the gross profit margin for our crude salt segment was 0%, compared to 100% in the same period in 2024.
Previous report
Loss from operations from our crude salt segment was $554,062 for the three-month period ended March 31, 2025, compared to loss from operations of $75,092 in the same period in 2024. The main reason for the increase in raw salt in 2024 compared to 2023 is that sales also rose by 16%.
Previous report
Loss from operations from our chemical products segment was $358,629 for the three-month period ended March 31, 2025, compared to loss from operations of $314,824 in the same period in 2024.
Previous report
Net Cash Provided by (Used in) Operating Activities
Previous report
Raw materials increased by $31,255 as of March 31, 2025 as compared to December 31, 2024.
Previous report
Our finished goods increased by $108,433 as of March 31, 2025 as compared to December 31, 2024.
Previous report
Net Cash Provided by (Used in) Investing Activities
Previous report
We have no investing activities for the three-month periods ended March 31, 2025 and 2024.
Previous report
Net Cash Provided by (Used in) Financing Activities
Previous report
We have no financing activities for the three-month periods ended March 31, 2025 and 2024.
Previous report
We believe that our available funds and cash flows generated from operations will be sufficient to meet our anticipated ongoing operating needs and our obligations as they full due in the next twelve (12) months.
Previous report
We had available cash of approximately $8.52 million at March 31, 2025, most of which is in highly liquid current deposits which earn no or little interest. We do not anticipate paying cash dividends in the foreseeable future.
Previous report
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.
Previous report
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. An expansion may involve a number of risks, including possible adverse effects on our operating results, diversion of management’s attention, inability to retain key personnel, risks associated with unanticipated events and the financial statement effect of potential impairment of acquired intangible assets, any of which could have a materially adverse effect on our condition and results of operations. In addition, if competition for acquisition candidates or operations were to increase, the cost of acquiring businesses could increase materially. We may effect an acquisition with a target business which may be financially unstable, under-managed, or in its early stages of development or growth. Our inability to implement and manage our expansion strategy successfully may have a material adverse effect on our business and future prospects.
Previous report
Contractual Obligations and Commitments
Previous report
We have no significant contractual obligations not fully recorded on our condensed consolidated balance sheets or fully disclosed in the notes to our condensed consolidated financial statements. Additional information regarding our contractual obligations and commitments at March 31, 2025 is provided in the notes to our condensed consolidated financial statements.
Previous report
Material Off-Balance Sheet Arrangements
Previous report
We do not currently have any off -balance sheet arrangements falling within the definition of Item 303(a) of Regulation S-K.
Previous report
Critical Accounting Policies and Estimates
Previous report
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions. We have identified the following critical accounting policies and estimates used by us in the preparation of our financial statements: accounts receivable and allowance for doubtful accounts, inventories and allowance for obsolescence, assets retirement obligation, property, plant and equipment, recoverability of long-lived assets, mineral rights, leases, revenue recognition, income taxes, and loss contingencies. These policies and estimates are described in the Company’s Form 10-Q for the three months ended March 31, 2025.
Reworded paragraphs (25)
Previous wording
The Company is still waiting for governmental approval for factories No.2 and No.10. To its knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, the Company may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories to satisfy the local government's requirements.
Current wording
The Company is still waiting for governmental approval for factories No. 2 and No. 10. To its knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, the Company may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories in order to satisfy the local government's requirements.
Previous wording
On November 24, 2017, Gulf Resources received a letter from the People’s Government of Yangkou County, Shouguang City notifying the Company that due to the new standards and regulations relating to safety production and environmental pollution, from certain local governmental departments, such as the municipal environmental protection department, the security supervision department and the fire department, its chemical enterprises would have to be relocated to a new industrial park called Bohai Marine Fine Chemical Industry Park. Although our chemical companies were in compliance with regulations, they were also close to a residential area. As a result, the government determined we should relocate to the Bohai park. Chemical companies that are not being asked to move into the park are being permanently closed. Since our factories closed, the Company has secured from the government the land use rights for its chemical plant. On January 6, 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020. The construction was expected to take approximately one year and an additional six months to complete the equipment installation and testing, however due to the COVID epidemic and electrical restrictions, the opening of the chemical factory has been delayed. The Company has received the refrigeration and air compressor units. The company decided to delay the delivery of the rest undelivered equipment and the opening of the factory until financial conditions in China improved and until it had visibility as to which products would produce the best returns.
Current wording
On November 24, 2017, Gulf Resources received a letter from the People’s Government of Yangkou County, Shouguang City notifying the Company that due to the new standards and regulations relating to safety production and environmental pollution, from certain local governmental departments, such as the municipal environmental protection department, the security supervision department and the fire department, its chemical enterprises would have to be relocated to a new industrial park called Bohai Marine Fine Chemical Industry Park. Although our chemical companies were in compliance with regulations, they were also close to a residential area. As a result, the government determined we should relocate to the Bohai park. Chemical companies that are not being asked to move into the park are being permanently closed. Since our factories closed, the Company has secured from the government the land use rights for its chemical plant. On January 6, 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020. The construction was expected to take approximately one year and an additional six months to complete the equipment installation and testing, however due to the COVID epidemic and electrical restrictions, the opening of the chemical factory has been delayed. [The Company has received the refrigeration and air compressor units. On July 26, 2023, the Company announced that the delivery of the remaining equipment for its Yuxin chemical factory has been temporarily delayed and to review its chemical products strategy.
Previous wording
In January 2017, the Company completed the first brine water and natural gas well field construction in Daying located in Sichuan Province and commenced trial production in January 2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town ,Daying County, Sichuan Province, whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project, and approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until these approvals have been received, the Company has had to temporarily halt trial production at its natural gas well in Daying. In compliance with the Chinese government new policies, the Company is also required to obtain an exploration license and a mining license for bromine and natural gas, respectively. 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. The Company plans to proceed with its applications for the natural gas and brine project approvals with related government departments after the governmental planning has finalized the land and resource planning for Sichuan Province.
Current wording
In January 2017, the Company completed the first brine water and natural gas well field construction in Daying located in Sichuan Province and commenced trial production in January 2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town ,Daying County, Sichuan Province, whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project, and approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until these approvals have been received, the Company has to temporarily halt trial production at its natural gas well in Daying. In compliance with the Chinese government new policies, the Company is also required to obtain an exploration license and a mining license for bromine and natural gas, respectively. 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. The Company plans to proceed with its applications for the natural gas and brine project approvals with related government departments until after the governmental planning has been finalized the land and resource planning for Sichuan Province.
Previous wording
The following table presents certain information derived from the condensed consolidated statements of income, cash flows and stockholders’ equity for the three-month periods ended March 31, 2025 and 2024.
Current wording
The following table presents certain information derived from the condensed consolidated statements of operations, cash flows and stockholders equity for the three-month and six-month periods ended June 30, 2025 and 2024.
Previous wording
Comparison of the Three-Month Periods Ended March 31, 2025 and 2024
Current wording
Comparison of the Three-Month Period Ended June 30, 2025 and 2024
Previous wording
Net revenue The table below shows the changes in net revenue in the respective segment of the Company for the three-month period ended March 31, 2025 compared to the same period in 2024:
Current wording
Net revenue. The table below shows the changes in net revenue in the respective segment of the Company for the three-month period ended June 30, 2025 as compared to the same period in 2024:
Previous wording
For the three-month period ended March 31, 2025 and 2024, the net revenue for the natural gas production was $0 and $44,194, respectively.
Current wording
For the three-month period ended June 30, 2025 and 2024, the net revenue for the natural gas production was $0.
Previous wording
(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.
Current wording
(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.
Previous wording
For the three-month period ended March 31, 2025, the gross loss margin for our bromine segment was 3.5%, compared to 81% in the three-month period ended March 31, 2024. The decrease in gross loss margin was primarily attributable to the higher average selling price of bromine of $3,684 per ton in the three-month period ended March 31, 2025 compared to $2,541 per ton in the three-month period ended March 31, 2024. Bromine tonnes sales also decreased from 451 tonnes for the three month period ended March 31, 2024 to 402 tonnes for the three month period ended March 31, 2025.
Current wording
For the three-month period ended June 30, 2025, the gross profit margin for our bromine segment was 9%, compared to gross loss margin of 154% in the three-month period ended June 30, 2024. The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,892 per ton in the three-month period ended June 30, 2025 compared to $2,379 per ton in the three-month period ended June 30, 2024 and the number of sales was up 152% from the second quarter of 2024.
Previous wording
General and Administrative Expenses General and administrative expenses were $1,389,523 for the three-month period ended March 31, 2025, an increase of $672,067 (or 94%) as compared to $717,456 for the same period in 2024.
Current wording
General and Administrative Expenses General and administrative expenses were $994,765 for the three-month period ended June 30, 2025, representing an increase of $304,793 as compared to $689,972 for the same period in 2024.
Previous wording
Loss from operations from our bromine segment was $3,370,836 for the three-month period ended March 31, 2025, compared to loss from operations of $4,782,815 in the same period in 2024. This decrease was due to the a 45% increase in average selling price partially offset by a decrease of 11% in tonnes sold.
Current wording
Loss from operations from our bromine segment was $130,381 for the three-month period ended June 30, 2025, compared to loss from operations of $4,662,586 in the same period in 2024. This decrease was due to a 152% increase in tonnes sold and a 64% increase in average selling price.
Previous wording
Loss from operations from our natural gas segment was $44,844 for the three -month period ended March 31, 2025, compared to loss from operations of $27,709 in the same period in 2024.
Current wording
Loss from operations from our natural gas segment was $43,225 for the three -month period ended June 30, 2025, compared to a loss from operations of $73,773 in the same period in 2024.
Previous wording
Other Income(Expense) Net Other expense, net of $19,293 represented bank interest income, net of finance lease interest expense for the three -month period ended March 31, 2025, an increase of $26,520 (or approximately 367%) as compared to the same period in 2024.
Current wording
Interest Income (Loss), Net Other loss, net of 19,879 represented bank interest income, net of finance lease interest expense for the three-month period ended June 30, 2025, a decrease of $29,856 as compared to the same period in 2024.
Previous wording
Net Loss Net loss was $4,629,500 for the three-month period ended March 31, 2025, compared to a net loss of $3,992,132 in the same period in 2024.
Current wording
***Net Income (loss)***Net loss was $773,777 for the three-month period ended June 30, 2025, compared to a net loss of $33,097,918 in the same period in 2024.
Previous wording
Cost of net revenue reflects mainly the raw materials consumed and the direct salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing plant and machinery and other manufacturing costs. Our cost of net revenue was $1,594,270 for the three-month period ended March 31, 2025, representing a $525,575 (or 25%) decrease compared to the preceding year.
Current wording
Cost** **of net revenue reflects mainly the raw materials consumed-direct salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing plant and machinery and other manufacturing costs. Our cost of net revenue was $8,951,400 for six-month period ended June 30, 2025, representing a $1,719,497 (or 24%) increase compared to the six-month period ended June 30, 2024. The increase in costs was mainly due to a significant increase in sales volume.
Previous wording
Cost of net revenue for our natural gas segment for the three-month period ended March 31, 2025 and 2024 was $0 and $199.
Current wording
Cost of net revenue for our natural gas segment for the six-month period ended June 30, 2025 and 2024 was $0 and $199, respectively.
Previous wording
Gross Profit (Loss) Gross profit was $10,177, or 0.6%, of net revenue for three-month period ended March 31, 2025 compared to loss $812,783, or 62% of net revenue for three-month period ended March 31, 2024.
Current wording
Gross Profit (Loss). Gross profit was $996,832, or 10%, of net revenue for six-month period ended June 30, 2025 compared to a loss of $3,541,672, or 96%, of net revenue for the same period in 2024.
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 that stated 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 a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $3,225,808 and $3,734,689 incurred for the three-month periods ended March 31, 2025 and 2024, respectively, of factories that have not resumed production were presented as part of the operating expense.
Current wording
Direct labor and factory overheads incurred during plant shutdownOn September 1, 2017, the Company received notification from the government of Yangkou County, Shouguang City of PRC that stated 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 a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $3,953,582 and $5,449,192 incurred for the three-month periods ended June 30, 2025 and 2024, respectively, for the factories that have not resumed production were presented as part of the operating expense.
Previous wording
Loss from Operations Loss from operations was $4,610,207 the three-month period ended March 31, 2025, compared to loss from operation of $5,269,419 in the same period in 2024.
Current wording
***Loss from Operations.***Loss from operations was $5,360,893 for the six-month period ended June 30, 2025, compared to loss from operations of $10,416,416 in the same period in 2024.
Previous wording
As of March 31, 2025, cash and cash equivalents were $8,523,045 as compared to $10,075,162 as of December 31, 2024. The components of this decrease of $1,552,117 are reflected below.
Current wording
As of June 30, 2025, cash and cash equivalents were $7,736,081 as compared to $10,075,162 as of December 31, 2024. The components of this decrease of $2,339,081 are reflected below.
Previous wording
For the three-month period ended March 31, 2025, we met our working capital and capital investment requirements mainly by using cash on hand.
Current wording
For the six-month period ended June 30, 2025, we met our working capital and capital investment requirements by using cash on hand.
Previous wording
During the three -month period ended March 31, 2025, cash flow used in operating activities of approximately $1.58 million was mainly due to a net loss of $4.62 million, an increase in accounts receivable of $1.5 million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $4 million.
Current wording
During the six-month period ended June 30, 2025, cash flow used in operating activities of approximately $2.14 million was mainly due to a net loss of $5.4 million, a decrease in accounts receivable of $2.58 million, and offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $8 million, adecreases in prepayment and deposits of $2.33 million.
Previous wording
During the three-month period ended March 31, 2024, cash flow used in operating activities of approximately $1.33 million was mainly due to a net loss of $3.99 million, an increase in accounts receivable of $0.4 million, a non-cash adjustment related to deferred taxes of $1.27 million, offset by depreciation and amortization expenses of $4.73 million.
Current wording
During the six-month period ended June 30, 2024, cash flow used in operating activities of approximately $0.8 million was mainly due to a net loss of $37.09 million, offset by depreciation and amortization expenses of $9.47 million and loss on disposal of equipment of $29.17 million.
Previous wording
The overall accounts receivable balance as of March 31, 2025 increased by $1,549,699, as compared to those of December 31, 2024. 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 June 30, 2025 increased by $2,586,327, as compared to those of December 31, 2024. 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 March 31, 2025 increased by $139,688(or 44%), as compared to the net inventory level as of December 31, 2024. The increase in inventory goods is an estimate that market demand may rise .
Current wording
The net inventory level as of June 30, 2025 increased by $199,642 (or 63%), as compared to the net inventory level as of December 31, 2024. The increase in inventory is due to the growth in current sales volume.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Cost** **of net revenue reflects mainly the raw materials consumed and the direct salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing plant and machinery and other manufacturing costs. Our cost of net revenue was $7,357,130 for the three-month period ended June 30, 2025, an increase of $2,245,072 (or 44%) as compared to the same period in 2024 due to the increase of net revenue by 250% for the three-month period ended June 30, 2025 as compared to the same period in 2024 .
Current report — wording carried from elsewhere
Cost of net revenue for our natural gas segment for the three-month period ended June 30, 2025 and 2024 was $0.
Current report — wording carried from elsewhere
Direct labor and factory overheads incurred during plant shutdownOn September 1, 2017, the Company received notification from the government of Yangkou County, Shouguang City of PRC that stated 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 a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $727,774 and $1,714,503 incurred for the three-month periods ended June 30, 2025 and 2024, respectively, for the factories that have not resumed production were presented as part of the operating expenses.
Current report — wording carried from elsewhere
Net revenue. The table below shows the changes in net revenue in the respective segment of the Company for the six-month period ended June 30, 2025 as compared to the same period in 2024:
Current report — wording carried from elsewhere
For the six-month period ended June 30, 2025 and 2024, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.
Current report — wording carried from elsewhere
Bromine production capacity and utilization of our factories
Current report — wording carried from elsewhere
The table below represents the annual capacity and utilization ratios for all of our bromine producing properties: