GULF RESOURCES, INC.
For the period ended Mar 31, 2026. Filed Aug 28, 2026.
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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.
Mar 31, 2026 · Filed Aug 28, 2026
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 2025-09-30; filed 2025-11-19.
0001193805-25-001627
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-08-28.
0001193805-26-001157
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 126 previous paragraphs and 76 current paragraphs.
20 unchanged; 33 reworded; 22 added; 66 removed; 7 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 9 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 (22)
Current report
Bromine and Crude Salt
Current report
Chemical Products
Current report
Natural Gas
Current report
On December 22, 2025 SYCI was sold.
Current report
Net Loss for the three-month period ended March 31, 2026 decreased to $3,926,381 from $4,629,500 in the same period in 2025, mainly due to the net revenue increased to $2,368,626 for the three-month period ended March 31, 2026 as compared to $1,604,447 in the same period in 2025.
Current report
For the three-month periods ended March 31, 2026 and 2025, the net revenue for the crude salt was $118,676 and $122,578, respectively. The decrease of net revenue of crude salt was mainly due to the 2% decrease in tonnes sold and the 2% decrease in average selling price of crude salt for the three-month period ended March 31, 2026.
Current report
For the three-month periods ended March 31, 2026 and 2025, the net revenue was nil.
Current report
Cost of Revenue
Current report
For the three-month period ended March 31, 2026 and 2025 the cost of revenue for the bromine segment was $2,283,326 and $1,533,128, respectively.
Current report
For the three-month period ended March 31, 2026 and 2025 the cost of revenue for the crude salt segment was $70,086 and $61,142, respectively.
Current report
The increase in costs is mainly due to the rise in amortization of the salt pans.
Current report
Cost of revenue for our chemical products segment for the three-month period ended March 31, 2026 and 2025 was nil.
Current report
Cost of revenue for our natural gas segment for the three-month period ended March 31, 2026 and 2025 was nil.
Current report
For the three-month period ended March 31, 2026, the gross profit margin for our crude salt segment was 41%, compared to 50% in the same period in 2025, representing a 9% decrease.
Current report
Loss from operations from our bromine segment was $3,067,778 for the three-month period ended March 31, 2026, compared to loss from operations of $3,370,836 in the same period in 2025. This decrease was due to the 13% increase in tonnes sold and a 34% increase in average selling price.
Current report
Loss from operations from our crude salt segment was $727,679 for the three-month period ended March 31, 2026, compared to loss from operations of $554,062 in the same period in 2025. The main reason was due to the rise in amortization of the salt pans.
Current report
Loss from operations from our chemical products segment was $0 for the three-month period ended March 31, 2026, compared to loss from operations of $358,629 in the same period in 2025. The reason for the reduction was due to the sale of SYCI completed by December, 2025.
Current report
Interest income
Current report
Interest income of $253,660 represented interest income from bank and loans made to third parties for the three-month period ended March 31, 2026, an increase of $251,231 as compared to the same period in 2025.
Current report
Interest Expenses
Current report
Net Loss
Current report
Net loss was $3,926,381 for the three-month period ended March 31, 2026, compared to a net loss of $4,629,500 in the same period in 2025.
Removed paragraphs (66)
Previous report
In April 2022, Shouguang Hengde Salt Industry Co. Ltd（“SHSI”）, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading.
Previous report
On January 28, 2020 we completed a 1-for-5 reverse stock split of our common stock, such that for each five shares outstanding prior to the stock split there was one share outstanding after the reverse stock split. All shares of common stock referenced in this report have been adjusted to reflect the stock split figures.
Previous report
On October 27, 2025, we completed a 1-for-10 reverse stock split of our common stock, such that for each ten shares outstanding prior to the stock split there was one share outstanding after the reverse stock split. All shares of common stock referenced in this report have been adjusted to reflect the stock split figures.
Previous report
Recent Developments
Previous report
Acquisition Agreements
Previous report
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. (“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. A summary of these agreements are set forth below:
Previous report
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. 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. 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. 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. 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.
Previous report
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. The 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.
Previous report
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. 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. 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.
Previous report
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. 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. 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.
Previous report
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. 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. 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.
Previous report
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. 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. 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.
Previous report
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. 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.
Previous report
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.
Previous 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.
Previous report
The Company has provided written notice to Nasdaq of its intention to cure the deficiency during the Second Compliance Period by effecting a reverse stock split, if necessary.
Previous report
Net Loss of $35,664,512 for the three-month periods ended September 30, 2025.
Previous report
For the three-month periods ended September 30, 2025 and 2024, the net revenue for the bromine segment was $8,052,331 and $1,571,313, respectively. The increase of the net revenue of bromine was due to the 238% increase in tonnes sold and the 52% increase in average selling price of bromine in the third quarter of 2025. The average selling price of bromine in the third quarter of 2025 was $3,637 compared to the average selling price of bromine in the third quarter of 2024 of $2,396 (calculated by dividing revenue by tonnes).
Previous report
For the three-month periods ended September 30, 2025 and 2024, the net revenue for the crude salt was $992,250 and $654,039, respectively. The increase of net revenue of crude salt was mainly due to the 58% increase in tonnes sold and the 4% decrease in average selling price of crude salt for the three-month period ended September 30, 2025.
Previous report
For the three-month period ended September 30, 2025 and 2024, the net revenue was $0 and $17,013.
Previous report
The decrease in income was due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the cooperation.
Previous report
Cost of Net Revenue
Previous report
For the three -month period ended September 30, 2025 and 2024 the cost of net revenue for the bromine segment was $7,666,463 and $3,794,088, respectively. The increase in costs is mainly due to the increase in sales volume.
Previous report
For the three -month period ended September 30, 2025 and 2024 the cost of net revenue for the crude salt segment was $330,322 and $277,451, respectively. The increase in costs is mainly due to the increase in sales volume.
Previous report
Cost of net revenue for our chemical products segment for the three-month period ended September 30, 2025 and 2024 was $0.
Previous report
Cost of net revenue for our natural gas segment for the three-month period ended September 30, 2025 and 2024 was $0 and 77, respectively. The decrease in income was due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the cooperation.
Previous report
For the three-month period ended September 30, 2025, the gross profit for our bromine segment was 5%, compared to gross loss margin of 141% in the three-month period ended September 30, 2024. The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,637 per ton in the three-month period ended September 30, 2025 compared to $2,396 per ton in the three-month period ended September 30, 2024 and the number of sales was up 238% from the second quarter of 2024.
Previous report
For the three-month period ended September 30, 2025, the gross profit margin for our crude salt segment was 67%. The increase of net revenue of crude salt was mainly due to the 58% increase in tonnes sold and the 4% decrease in average selling price of crude salt for the three-month period ended September 30, 2025.
Previous report
For the three-month period ended September 30, 2024, the gross profit margin for our crude salt segment was 58%.
Previous report
Gross profit for our natural gas segment for the three-month period ended September 30, 2025 and 2024 was $0 and $16,936 respectively. The decrease in income was due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the cooperation.
Previous report
Income from operations from our crude salt segment was $453,824 for the three-month period ended September 30, 2025, compared to loss from operations of $102,657 in the same period in 2024. The increase of net revenue of crude salt was mainly due to the 58% increase in tonnes sold and the 4% decrease in average selling price of crude salt for the three-month period ended September 30, 2025.
Previous report
Loss from operations from our chemical products segment was $352,371 for the three-month period ended September 30, 2025, compared to loss from operations of $339,038 in the same period in 2024.
Previous report
Other Expenses, net
Previous report
As the company was the joint guarantor party for the debts of Shandong Shouguang Vegetable Industry Group Co., Ltd. and Shandong Shouguang Vegetable Seed Group Co., Ltd. ("Vegetable Group"). Currently, the Vegetable Group is unable to repay the debt. As the joint liability party, our company has to accrue a provision of $3,521,613.
Previous report
Loss on Disposal of Long-lived Assets
Previous report
As the company was the joint responsible party for the debts of the Vegetable Group, the court auctioned the idle land and the attached properties on it of SYCI, resulting in a total asset disposal loss of $2,008,853.
Previous report
Impairment of Long-lived Assets
Previous report
The court engaged a third-party valuer for evaluation of the land at xiangjiang road, yangkou town ,shouguang city and its attached properties. The valuation report returned a fair value of $4,580,892. The Company recognized an impairment loss of $29,782,912 accordingly.
Previous report
Net Loss Net loss was $35,664,512 for the three-month period ended September 30, 2025, compared to a net loss of
Previous report
$3,492,883 in the same period in 2024.
Showing the first 40 of 66 passages. Open the source sections for the rest.
Reworded paragraphs (33)
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 through our wholly-owned subsidiary, SHSI, we produce and trade 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
As disclosed in the Company’s Current Report on Form 8-K filed on September 8, 2017, the Company received, on September 1, 2017, letters from the Yangkou County, Shouguang City government addressed to each of its subsidiaries, SCHC and SYCI, 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 and environmental protection requirements. In the Company’s press release of August 11, 2017 and on its conference call of August 14, 2017, the Company addressed concerns that increased government enforcement of stringent environmental rules that were adopted in early 2017 to insure corporations bring their facilities up to necessary standards so that pollution and other negative environmental issues are limited and remediated, could have an impact on our business in both the short and long-term. The Company also expressed that although it believed its facilities were fully compliant at the time, the Company did not know how its facilities would fare under the new rules. Teams of inspectors from the government were sent to many provinces to inspect all mining and manufacturing facilities. The local government requested that facilities be closed, so that the facilities could undergo the inspection and analysis in the most efficient manner by inspectors’ team. As a result, our facilities were closed on September 1, 2017.
Current wording
As disclosed in the Company’s Current Report on Form 8-K filed on September 8, 2017, the Company received, on September 1, 2017, letters from the Yangkou County, Shouguang City government addressed to each of its subsidiaries, SCHC and SYCI, 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 and environmental protection requirements. In the Company’s press release of August 11, 2017 and on its conference call of August 14, 2017, the Company addressed concerns that increased government enforcement of stringent environmental rules that were adopted in early 2017 to ensure corporations bring their facilities up to necessary standards so that pollution and other negative environmental issues are limited and remediated, could have an impact on our business in both the short and long-term. The Company also expressed that although it believed its facilities were fully compliant at the time, the Company did not know how its facilities would fare under the new rules. Teams of inspectors from the government were sent to many provinces to inspect all mining and manufacturing facilities. The local government requested that facilities be closed, so that the facilities could undergo the inspection and analysis in the most efficient manner by inspectors’ team. As a result, our facilities were closed on September 1, 2017.
Previous wording
The Shouguang City Bromine Association, on behalf of all the bromine plants in Shouguang, started discussions with the local government agencies. The local governmental agencies confirmed the facts that their initial requirements for the bromine industry did not include the project approval, the planning approval and the land use rights approval and that those three additional approvals were new requirements of the provincial government. The Company understood from the local government that it has been coordinating with several government agencies to solve these three outstanding approval issues in a timely manner and that all the affected bromine plants willnot be allowed to commence production prior to obtaining those approvals.
Current wording
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 fact that their initial requirements for the bromine industry did not include the project, the planning and the land use rights approvals, which were later introduced by the provincial government as new requirements. The Company understood from the local government that local government was coordinating with various government agencies to solve these three outstanding approval issues in a timely manner and that all impacted bromine plants will not be allowed to commence production prior to obtaining those approvals. In February 2019, the Company received a notification from the local government of Yangkou County that its Factories No. 1, No. 4, No. 7 and No. 9 passed inspection and were allowed to resume operations. In April 2019, Factory No. 1 and No. 7 resumed operations.
Previous wording
On February 28, 2020, the Company announced that it received an approval from the government to resume bromine production after winter temporary closure. Subsequently, it received another approval from the Shouguang Yangkou People’s Government dated on March 5, 2020 to resume production at its bromine factories No. 1, No. 4, No. 7 and No. 9 in order to meet the needs of bromide products for epidemic prevention and control. With these two approvals, the Company was allowed to resume production at all four bromine factories.
Current wording
Subsequently, the Company received approval dated February 27, 2020, issued by the local governmental authority which allows us to resume production after the winter temporary closure. Further, the Company received another approval from the Shouguang Yangkou People’s Government dated on March 5, 2020, to resume production at its bromine factories No.1, No. 4, No.7 and No. 9 in order to meet the needs of bromide products for epidemic prevention and control (the “March 2020 Approval”). The Company’s factories No.7 and No.1 started trial production in middle-March 2020, and commenced commercial production on April 3, 2020.
Previous wording
The Company received an oral notification from the government for its Factory No. 8, which permitted Factory No.8 to resume production in August 2022. Factory No.8 started to contribute revenue in the fourth quarter 2022.
Current wording
The Company received oral notification from the government regarding Factory No. 8, allowing it to resume production in August 2022. Factory No.8 began contributing revenue in the fourth quarter of 2022.
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 in order to satisfy the local government's requirements.
Current wording
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, we may be required to make certain modifications to our existing wells and aqueducts prior to commencement of operations of these factories in order to satisfy the local government's requirements. The Company completed its flood prevention project in December 2023. This project was implemented for safeguarding its bromine facilities.
Previous wording
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. 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.
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
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 the Company will re-evaluate its chemical products strategy.
Current wording
On November 24, 2017, the Company 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. Construction of the new chemical facilities at Bohai Marine Fine Chemical Industrial Park commenced in June 2020. Initially, the construction was projected to last around one year, with an additional six months for equipment installation and testing. However, due to the COVID epidemic and electrical restrictions, the opening of the chemical factory has been postponed. The Company has received the refrigeration and air compressor units. 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.
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 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.
Current wording
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. 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. 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 natural gas production. 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.
Previous wording
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”). The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.
Current wording
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, 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 May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.
Previous wording
Issuers listed on The Nasdaq Global Select Market are not eligible for a second 180-day grace period under the Nasdaq Listing Rules. However, based upon the Company’s compliance with the various criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers listed on The Nasdaq Capital Market, the Company applied to transfer the listing of its Common Shares to The Nasdaq Capital Market. As noted above, the Staff approved the Company’s transfer application on May 6, 2025.
Current wording
Issuers listed on The Nasdaq Global Select Market are not eligible for a second 180-day grace period under the Nasdaq Listing Rules. However, based upon the Company’s compliance with the various criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers listed on The Nasdaq Capital Market, the Company applied to transfer the listing of its Common Shares to The Nasdaq Capital Market.
Previous wording
On November 12, 2025, the Company issued a press release providing certain updates on its hearing scheduling process with the Nasdaq Hearings Panel. The Company has received a hearing notification letter from Nasdaq scheduling an oral hearing for December 9, 2025. As of November 10, 2025, the Company’s common stock had maintained the requisite closing bid price in compliance with Listing Rule 5550(a)(2). In light of the above and in accordance with the instructions provided by the hearing notification letter, the Company has submitted a request to cancel the hearing, subject to the Company’s Listing Analyst review and confirmation.
Current wording
On November 12, 2025, the Company issued a press release providing certain updates on its hearing scheduling process with the Nasdaq Hearings Panel. The hearing did not take place because the Company subsequently regained compliance with the applicable Nasdaq listing requirement.
Previous wording
As a result of our acquisitions of SCHC and SYCI, our historical financial statements and the information presented below reflects the accounts of SCHC, SYCI, SHSI and DCHC. The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report.
Current wording
As a result of our acquisition of SCHC, our historical financial statements and the information presented below reflects the accounts of SCHC, SHSI ,SYCI and DCHC. The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report.
Previous 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 nine-month periods ended September 30, 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 period ended March 31, 2026 and 2025.
Previous wording
Comparison of the Three-Month Period Ended September 30, 2025 and 2024
Current wording
Comparison of the Three-Month Periods Ended March 31, 2026 and 2025
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 September 30, 2025 as compared to the same period in 2024:
Current wording
***Net revenue.***The table below shows the changes in net revenue in the respective segments of the Company for the three-month period ended March 31, 2026 as compared to the same period in 2025:
Previous wording
Loss from operations from our bromine segment was $274,496 for the three-month period ended September 30, 2025, compared to loss from operations of $4,029,999 in the same period in 2024. The increase of the net revenue of bromine was due to the 238% increase in tonnes sold and the 52% increase in average selling price of bromine in the third quarter of 2025.
Current wording
For the three-month periods ended March 31, 2026 and 2025, the net revenue for the bromine segment was $2,249,950 and $1,481,869, respectively. The increase of the net revenue of bromine was due to the 13% increase in tonnes sold and the 34% increase in average selling price of bromine.
Previous wording
For the three-month periods ended September 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 wording
For the three-month periods ended March 31, 2026 and 2025, the net revenue for the chemical products segment was nil due to the closure of our chemical factories since September 1, 2017.
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 $7,996,785 for the three-month period ended September 30, 2025, an increase of $3,925,169 (or 96%) as compared to the same period in 2024 due to the increase of net revenue by 303% for the three-month period ended September 30, 2025 as compared to the same period in 2024.
Current wording
Cost of 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 plants and machinery and other manufacturing costs. Our cost of revenue was $2,353,412 for the three-month period ended March 31, 2026, an increase of $759,142 (or 48%) as compared to the same period in 2025 due to the increase of net revenue by 48% for the three-month period ended March 31, 2026 as compared to the same period in 2025.
Previous wording
The increase in net loss was mainly due to a rise of 2,008,853 in loss on disposal of long-lived assets, a rise of 29,782,912 in impairment of long-lived assets, and an increase of 3,521,613 in provision accrued liabilities.
Current wording
The increase in costs is mainly due to the increase in sales volume.
Previous wording
*Gross Profit (Loss)**.***Gross profit was $1,047,796 or12%, of net revenue for three-month period ended September 30, 2025, representing an increase of $2,877,047, as compared to a gross loss of $1,829,251 or 82%, of net revenue for the same period in 2024.
Current wording
Gross Profit (Loss). Gross profit was $15,214, or 0.6% of net revenue for three-month period ended March 31, 2026, representing an increase of $5,037, as compared to a gross profit of $10,177, or 0.6% of net revenue for the same period in 2025.
Previous wording
For the nine-month period ended September 30, 2025, the gross profit margin for our bromine segment was 6%, compared to gross loss margin of 132% in the nine-month period ended September 30, 2024. The increase in gross loss margin was primarily attributable to the higher average selling price of bromine of $3,751 per ton in the nine-month period ended September 30, 2025 compared to $2,423 per ton in the nine-month period ended September 30, 2024.
Current wording
For the three-month period ended March 31, 2026, the gross loss margin for our bromine segment was 1.5%, compared to 3.5% in the three-month period ended March 31, 2025. The decrease in gross loss margin was primarily attributable to the higher average selling price of bromine of $4,948 per ton in the three-month period ended March 31, 2026 compared to $3,684 per ton in the three-month period ended March 31, 2025. Bromine tonnes sales also increased from 402 tonnes for the three-month period ended March 31, 2025 to 455 tonnes for the three-month period ended March 31, 2026.
Previous wording
For the nine-month period ended September 30, 2025, the gross profit margin for our chemical segment was 0% due to the closure of our chemical products plant. As a result of the closure, there were no chemical products for sale for the nine-month period ended September 30, 2025.
Current wording
For the three-month period ended March 31, 2026 and 2025, the gross profit margin for our chemical products segment was 0%.
Previous 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 $580,178 and $1,736,345 incurred for the three-month periods ended September 30, 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 $2,743,262 and $3,225,808 incurred for the three-month periods ended March 31, 2026 and 2025, respectively, of factories that have not resumed production were presented as part of the operating expense.
Previous wording
General and Administrative Expenses General and administrative expenses were $785,533 for the three-month period ended September 30, 2025, representing an decrease of $216,966 as compared to $1,002,529 for the same period in 2024.
Current wording
General and Administrative ExpensesGeneral and administrative expenses were $1,323,101 for the three-month period ended March 31, 2026, a decrease of $66,422 (or 5%) as compared to $1,389,523 for the same period in 2025.
Previous wording
Loss from OperationsLoss from operations was $333,928 for the three-month period ended September 30, 2025, compared to loss from operations of $4,581,609 in the same period in 2024.
Current wording
Loss from OperationsLoss from operations was $4,056,597 the three-month period ended March 31, 2026, compared to loss from operations of $4,610,207 in the same period in 2025.
Previous wording
Loss from operations from our natural gas segment was $39,781 for the three -month period ended September 30, 2025, compared to a loss of $39,072 in the same period in 2024.
Current wording
Loss from operations from our natural gas segment was $31,809 for the three-month period ended March 31, 2026, compared to loss from operations of $44,844 in the same period in 2025.
Previous wording
Interest income, net Interest income, net of $17,206 represented bank interest income, net of finance lease interest expense for the three-month period ended September 30, 2025, an increase of $2,235 as compared to the same period in 2024.
Current wording
Interest expense of $123,444 represented bank interest expense for the three-month period ended March 31, 2026, an increase of $101,722 as compared to the same period in 2025.
Previous wording
As of September 30, 2025, cash and cash equivalents were $5,820,083 as compared to $10,075,162 as of December 31, 2024. The components of this decrease of $4,255,079 are reflected below.
Current wording
As of March 31, 2026, cash and cash equivalents were $6,537,505 as compared to $3,793 as of December 31, 2025. The components of this increase of $6,533,712 are reflected below.
Previous wording
For the nine-month period ended September 30, 2025, we met our working capital and capital investment requirements by using cash on hand.
Current wording
For the three-month period ended March 31, 2026, we met our working capital and capital investment requirements by using cash on hand.
Previous wording
During the nine-month period ended September 30, 2025, cash flow provided by operating activities of approximately $4.57 million was mainly due to a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $11.75 million, a loss on disposal of long-lived assets of $2 million, a impairment of long-lived assets of 29.78 million, and offset by a net loss of $41.07 million, a decrease in accounts receivable of $2.83 million.
Current wording
During the three-month period ended March 31, 2026, cash flow provided by operating activities of approximately $1.09 million was mainly due to a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $3.36 million, amortization of finance lease right-of-use asset of $0.73 million, an increase in accounts receivable of $0.65 million, offset by a net loss of $3.93 million.
Previous wording
During the nine-month period ended September 30, 2024, cash flow used in by operating activities of approximately $0.29 million was mainly due to a net loss of $40.58 million, a decrease in deferred taxes of $3.62 million and offset by depreciation and amortization expense of $14.04 million and loss on disposal of equipment of $29.17 million.
Current 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, a decrease 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.
Previous wording
The overall accounts receivable balance as of September 30, 2025 increased by $2,858,041, 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 March 31, 2026 decreased by $594,979, as compared to those of December 31, 2025. 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three-month period ended March 31, 2026 and 2025, the gross profit margin for our natural gas segment was 0%.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
In February 2019, the Company received a notification from the local government of Yangkou County that its Factory No. 1, No. 4, No. 7 and No. 9 had passed inspection and could resume operations. In April 2019, Factory No. 1 and No. 7 resumed operations.
Previous report — wording carried elsewhere
Net revenue. The table below shows the changes in net revenue in the respective segment of the Company for the nine-month period ended September 30, 2025 as compared to the same period in 2024:
Previous report — wording carried elsewhere
For the nine-month period ended September 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.
Previous report — wording carried elsewhere
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 $16,948,185 for nine-month period ended September 30, 2025, representing a $5,644,666 (or 50%) increase compared to the nine- month period ended September 30, 2025. The increase in costs was mainly due to a significant increase in sales volume.
Previous report — wording carried elsewhere
Bromine production capacity and utilization of our factories
Previous report — wording carried elsewhere
The table below represents the annual capacity and utilization ratios for all of our bromine producing properties:
Previous report — wording carried 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 $4,533,760 and $7,185,537 incurred for the nine-month periods ended September 30, 2025 and 2024, respectively, for the factories that have not resumed production were presented as part of the operating expense.