What changed in this filing

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Item 1. Business

2024-09-27 compared with 2023-03-31 · 261 added, 200 removed, 613 unchanged (43% of the section changed)

93 unchanged sentences

For accounting purposes, the Shares were valued at $9.20 (restated for

the 1-for-5 reverse stock split in January 2020), which was the closing price of our stock on the closing date of the agreement.

difference between the original sale price of $10.00 (restated for the 1-for-5 reverse stock split in January 2020) and the $9.20 (restated

for the 1-for-5 reverse stock split in January 2020) closing price of our stock on the closing date of the agreement is solely for accounting

the 1-for-5 reverse stock split in January 2020), which was the closing price of our common stock on the closing date of the agreement.

The price difference between the original sale price of $10.00 (restated for the 1-for-5 reverse stock split in January 2020) and the

$9.20 (restated for the 1-for-5 reverse stock split in January 2020) closing price of our stock on the closing date of the agreement is

solely for accounting purposes.

There has been no change in the number of shares issued.

2 unchanged sentences

result of the reincorporation, the Company is now a Nevada corporation.

On December 15, 2015, the Company registered a

new subsidiary in the Sichuan Province of the PRC named Daying County Haoyuan Chemical Company Limited (“DCHC”) with registered

On December 15, 2015, the Company incorporated

a new subsidiary in the Sichuan Province of the PRC named Daying County Haoyuan Chemical Company Limited (“DCHC”) with registered

capital of RMB50,000,000, and there was RMB14,848,730 capital contributed by SCHC as of December 31, 2021.

13 unchanged sentences

Ltd, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading.

Recent Developments

Acquisition Agreements

On June 26, 2024, a wholly owned subsidiary of the Company, Shouguang

Hengde Salt Industry Co.

Ltd ( “SHSI”), entered into a Crude Salt Field Acquisition Agreement (the “Acquisition Agreement”)

with Shouguang Qingshuibo Farm Co., LTD.

(“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 Acquisition Agreement, and the remaining 20% shall be paid in shares of common stock of the Company within three

months from the date of Acquisition Agreement after SHSI has inspected the and accepted the crude salt field in writing.

On June 27, 2024, SHSI entered into four Crude Salt Field Acquisition

Agreements (the “Agreements”) with Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative, Shouguang

city Yangkou town Shanjia Zhuangzi village stock economic cooperative, Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic

cooperative, and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative (together, “Sellers”), pursuant

to which Sellers agree to transfer to SHSI, and SHSI agrees to purchase from Sellers, 750,000, 804,000, 385,000, and 822,000 square meters

of crude salt field (including the land lease fee) for RMB54.10, RMB54.90, RMB54.00, and RMB55.70 per square meter, respectively, with

the total transfer price of RMB40,575,000, RMB44,139,600, RMB20,790,000, and RMB45,785,400, respectively.

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 Agreements, and the remaining 20% shall

be paid in shares of common stock of the Company within three months from the date of Agreements after SHSI has inspected the and accepted

the crude salt fields in writing.

Nasdaq Compliance

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

The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with

26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted

by the Company on June 14, 2024, Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule.

The terms of the exception are as follows:

on or before October 14, 2024, the Company must file the Delinquent Reports, as required by

In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted.

At that time, the Company may appeal Nasdaq’s determination to a hearings panel.

Subsequently,

on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is

delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024, the Company is not in compliance with the Rule.

The Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain

compliance with respect to the filing requirements.

The Company has until September 4, 2024 to submit such update to Nasdaq.

Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market.

the Company can provide no assurance to the timing, the Company has submitted a letter to Nasdaq confirming that there has been no change

to its original plan to regain compliance with respect to the filing requirements, and will continue to work diligently to complete and

file its delayed SEC reports.

Corporate Structure

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Industry Co., Limited, or SYCI;

and (iii) Daying County Haoyuan Chemical Co., Ltd., or DCHC, (IV) Shouguang Hengde Salt Industry Co.

(iii) Daying County Haoyuan Chemical Co., Ltd., or DCHC;

ad (iv) Shouguang Hengde Salt Industry Co.

or SHSI, each a PRC company.

30 unchanged sentences

Commission (‘CSRC”) released the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic

Companies (the “Trial Measures”) and five supporting guidelines, which will come into effect on March 31, 2023.

the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the

filing procedures and report relevant information to the CSRC.

If a domestic company fails to complete the filing procedures or conceals

any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties

Companies (the “Trial Measures”) and five supporting guidelines, which came into effect on March 31, 2023.

Pursuant to the

Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing

procedures and report relevant information to the CSRC.

If a domestic company fails to complete the filing procedures or conceals any

material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties

by the CSRC, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge

14 unchanged sentences

on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the

Confidentiality and Archives Provisions, which will take effective from March 31, 2023.

Confidentiality and Archives Provisions, which took effective from March 31, 2023.

The Confidentiality and Archives Provisions specify

43 unchanged sentences

investors or investors in other countries or regions.

In the reporting periods presented in this annual

report, no cash and other asset transfers have occurred among the Company and its subsidiaries;

and no dividends or distributions of a

subsidiary has been made to the Company.

In the reporting periods presented

in this annual report, no cash and other asset transfers have occurred among the Company and its subsidiaries;

and no dividends or distributions

of a subsidiary has been made to the Company.

For the foreseeable future, the Company does not expect to pay any cash dividends.

42 unchanged sentences

Senate passed the Accelerating Holding Foreign Companies

Accountable Act, whichwas signed into law, and amends the HFCAA and requires the SEC to prohibit an issuer’s securities from trading

Accountable Act, which was signed into law, and amends the HFCAA and requires the SEC to prohibit an issuer’s securities from trading

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

WWC, P.C., Certified Public Accountants, is a U.S.-based accounting firm registered with the PCAOB, and is subject to laws in the United

States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

auditor is headquartered in the United States and is subject to inspection by the PCAOB on a regular basis with the last inspection in

November 2021.

On August 26, 2022, the PCAOB signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing

inspections and investigations of audit firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to

further explanation and implementation.

Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall

have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered

public accounting firms headquartered in China mainland and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations

that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in China mainland and

However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting

firms headquartered in China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s

The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans

to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations

GGF CPA LTD., Certified Public Accountants, is a China-based accounting firm registered with the PCAOB, and is subject to laws in the

United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

Our auditor is headquartered in the China and is subject to inspection by the PCAOB on a regular basis.

On August 26, 2022, the PCAOB

signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit

firms based in mainland China and Hong Kong.

The Protocol remains unpublished and is subject to further explanation and implementation.

Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any

issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the

PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB registered public accounting firms headquartered

in China mainland and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable

to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong.

However, whether

the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in

China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control.

The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and was already making plans to resume

regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as

The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.

43 unchanged sentences

In April 2019, Factory No.1 and Factory No.7 resumed operation.

On November 25, 2019, the government of Shouguang

City issued a notice ordering all bromine facilities in Shouguang City, including the Company’s bromine facilities, including Factory

On November 25, 2019, the government of

Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the Company’s bromine facilities,

including Factory No.

1 and Factory No.

7, to temporarily stop production from December 16, 2019 to February 10, 2020.

Subsequently, due to the coronavirus

outbreak in China, the local government ordered those bromine facilities to postpone the commencement of production.

Subsequently, the

Company received an approval dated February 27, 2020 issued by the local governmental authority allowing the Company to resume production

after the winter temporary closure.

Further, the Company received another approval from the Shouguang Yangkou People’s Government

dated March 5, 2020 allowing the Company to resume production at its bromine factories No.

Subsequently,

due to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement of

Subsequently, the Company received an approval dated February 27, 2020 issued by the local governmental authority

allowing the Company to resume production after the winter temporary closure.

Further, the Company received another approval from

the Shouguang Yangkou People’s Government dated March 5, 2020 allowing the Company to resume production at its bromine

factories 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”).

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 commenced trial production in mid-March 2020 and commercial production on April 3, 2020 and its Factories No.

7 commenced trial production in mid March 2020 and

commercial production on April 3, 2020 and its Factories No.

9 commenced commercial production on May 6, 2020.

The Company received an oral notification from the government for its Factory No.

permits the Factory No.

8 to resume production in August 2022.

And Factory No.

8 started contribute revenue in the fourth quarter 2022.

The Company is still waiting for governmental

approval for Factories No.

To our knowledge, the government is currently completing its planning process for all mining

areas including that for prevention of flood.

As a result, we 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.

received verbal notification from the government regarding Factory No.

8, allowing it to recommence production in August 2022.

8 began contributing revenue in the fourth quarter 2022.

Pursuant to the notification from the government

of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 25, 2023 until February 20, 2024.

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.

In April 2022, Shouguang Hengde Salt Industry

Ltd, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading.

This subsidiary was created

in response to a new government policy that required bromine and crude salt companies to have separate registrations.

compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at

the bromine and crude salt factories as scheduled in February 2024.

Because many smaller producers have not had the

4 unchanged sentences

Management may consider acquisition opportunities in this segment in the future if the prices were sufficiently

We secured the land for our new chemical factory

and received the final approval regarding environmental protection assessment.

The Company commenced 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

The rest equipment is expected to be delivered by the second quarter of 2023.

The Company intends to start installation of

equipment and may start testing and trial production by the end of 2023 or beginning of 2024.

There was an impairment loss on the property,

plant and equipment related to the relocation of our chemical plants to Bohai Park in the amount of $16,636,322, since much of the equipment

that was used in the chemical factories was relatively old.

Further, even if it had been newer, we believe that it might not have passed

new environmental tests.

The total cost of building the new factory is currently estimated to be approximately $64 million.

Company incurred relocation costs in the amount of $45,584,344 and $45,584,344 as of December 31, 2022 and 2021.

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.

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.

We secured the land for our upcoming chemical

factory and obtained the final approval regarding environmental protection assessment.

Construction of the new chemical facilities located

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.

estimated total cost for the relocation process is approximately $69 million.

As of December 31, 2023 and 2022, the Company incurred

relocation costs in the amount of $45,584,344 and $45,584,344, respectively.

Additionally, the procurement of the final equipment for

our chemical factory has been postponed until we have a better understanding of the potential for derivative bromine products.

We anticipate

proceeding with the completion of its chemical factory in due course.

However, in the event that the Chinese economy persists in its weakness

and if we perceives this trend to be ongoing, there is a possibility that the chemical factory could be repurposed for the production

of Sodium-Ion batteries.

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

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 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

We are not writing off any of the goodwill related

to our chemicals business.

We believe the new chemical factory could produce strong sales and profits.

We believe the upcoming chemical factory could produce sales and profits.

We believe there may be much less

8 unchanged sentences

At this time, we have not considered how or if we can monetize those assets.

In April 2022, our subsidiary, Shouguang Hengde

Salt Industry Co.

Ltd, was incorporated in Shandong Province, China, specifically for crude salt production and trading.

This subsidiary

was established in response to a new government policy mandating separate registrations for bromine and crude salt companies.

The Company is awaiting governmental approval

for Factories No.

Impact of COVID-19 on Our Operations and Financial

8 unchanged sentences

suspected of having COVID-19, asking residents in China to stay at home and to avoid public gathering, among other things.

The virus outbreak

slightly delayed the commencement of the operations for Factory No.1, No.4, No.7, No.9, and No.8 and it may also delay the approval for

the remaining three factories include No.2, and No.10.

It is, however, still unclear how the pandemic will evolve going forward, and we

cannot assure you whether the COVID-19 pandemic will again bring about significant negative impact on our business operations, financial

condition and operating results, including but not limited to negative impact to our total revenues.

of the virus resulted in slight delay in the commencement of operations for Factory No.1, No.

8, and may potentially

delay the approval for the remaining two factories, including No.

It is, however, still unclear how the pandemic will evolve

going forward, and we cannot assure you whether the COVID-19 pandemic will again bring about significant negative impact on our business

operations, financial condition and operating results, including but not limited to negative impact to our total revenues.

There remain significant uncertainties surrounding

10 unchanged sentences

Our Business Segments

Our business operations are conducted in four segments, bromine,

crude salt, chemical products, and natural gas.

We manufacture and trade bromine, crude salt and natural gas, and

manufacture and sell chemical products used in oil and gas field explorations and papermaking chemical agents, and materials for

human and animal antibiotics.

We conduct all of our operations in China.

Our business operations are conducted in four segments, bromine, crude

salt, chemical products, and natural gas.

We manufacture and trade bromine, crude salt and natural gas, and manufacture and

sell chemical products used in oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics.

conduct all of our operations in China.

Bromine and Crude Salt

43 unchanged sentences

In natural brine, the bromine exists in the form of bromine sodium and bromine magnesium and other soluble

The bromine production process is as follows:

The bromine production process

is as follows:

natural brine is pumped from underground through extraction wells by subaqueous pumps;

1 unchanged sentence

the natural brine is sent to the bromine refining plant where bromine is extracted from the natural brine.

In neutral or acidic water, the bromine ion is easily oxidized by adding the oxidative of chlorine, which generates the single bromine away from the brine.

Thereafter the extracted single bromine is blown out by forced air, then absorbed by sulfur dioxide or soda by adding acid, chlorine and sulfur.

In neutral or acidic water, the bromine ion is easily oxidized by adding the oxidative of chlorine, which generates the single bromine

away from the brine.

Thereafter the extracted single bromine is blown out by forced air, then absorbed by sulfur dioxide or soda by adding

acid, chlorine and sulfur.

Extracted bromine is stored in containers of different sizes;

the wastewater from this refining process is then transported by pipeline to brine pans.

Our production feeds include (i) natural brine;

Our production feeds include

(i) natural brine;

(ii) vitriol;

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and 2022, the net revenue for the chemical products was $0.

During each of the years ended December 31, 2023

and 2022, the net revenue for the natural gas was $0.

During each of the years ended December 31, 2023

and 2022, the net revenue for the equipment lease was $150,861 and $132,993.

Principal Suppliers

Our principal external suppliers are Laizhou Shengfu

Chemical Company Limited, Weifang Wanhong Chemical Company Limited, Shandong Xinlong International Trade Company Limited.

Chemical Company Limited, Weifang Wanhong Chemical Company Limited, Shandong Xinlong International Trade Company Limited, Shouguang Runfeng

trading Company Limited.

During the year ended December 31, 2023 and 2022,

11 unchanged sentences

On January 30, 2015 we announced that we

had found natural gas resources under our bromine well in the Sichuan area.

On November 23, 2015, the Company’s wholly owned subsidiary

SCHC entered into an agreement with the People’s Government of Daying County in Sichuan Province for the exploration and development

had found natural gas resources under our bromine well in Sichuan Province.

On November 23, 2015, the Company’s subsidiary SCHC

entered into an agreement with the People’s Government of Daying County in Sichuan Province for the exploration and development

of natural gas and brine resources (including bromine and crude salt).

In January 2017, the Company completed the first brine water and

natural gas well field construction in Sichuan Province and announced the commencement of trial production.

Then later on, the Company

found some issues related to the water and other potential impurities in the natural gas during trial production.

In resolving the problem,

the Company purchased customized equipment for its natural gas project.

The installation of such equipment, including providing piping

and electricity, was completed in July 2018.

The Company completed the test production at its first natural gas well 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.

In January 2017, the Company completed the construction of the

first brine water and natural gas well field in Sichuan Province.

Subsequently, the Company found some issues related to the water and

other potential impurities in the natural gas during trial production.

In resolving the problem, the Company purchased customized equipment

for its natural gas project.

The installation of such equipment, including providing piping and electricity, was completed in July 2018.

The Company completed the test production at its first natural gas well in Sichuan Province and commenced trial production in January

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 the natural gas

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.

On September 1, 2017, the Company received notification

from the Government of Yangkou Town, Shouguang City of PRC that required production at all its factories be immediately halted in order

for the Company to perform rectification and improvement in accordance with the local new safety and environmental protection requirements.

The Company has been working closely with the

County authorities to develop rectification plans for both its bromine and crude salt businesses and had agreed on a plan in October 2017.

In the fiscal year ended December 31, 2018, the Company incurred $16,243,677 in the rectification and improvements of plant and equipment

from the Government of Yangkou Town, Shouguang City of PRC that production at all its factories must be halted immediately.

This was required

for the Company to perform rectification and improvement in compliance with the local new safety and environmental protection requirements.

The Company has worked closely with the county

authorities to develop rectification plans for its bromine and crude salt businesses, reaching an agreement on a plan in October 2017.

During the fiscal year ended December 31, 2018, the Company incurred $16,243,677 in the rectification and improvements of plant and equipment

of the bromine and crude salt factories resulting in a cumulative amount of $34,182,329 incurred as of December 31, 2018.

The Shouguang

City Bromine Association, on behalf of all the bromine plants in Shouguang, has 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 are not allowed to commence

production prior to obtaining those approvals.

City Bromine Association, on behalf of all the bromine producers in Shouguang, initiated negotiations with the local government agencies.

The local governmental agencies acknowleged the facts that their initial requirements for the bromine industry did not include the project,

the planning and land use rights approvals, which were later introduced by the provincial government as new requirements.

understood from the local government that local government were coordinating with various government agencies to solve these three outstanding

approval issues in a timely manner and that all impacted bromine plants are not allowed to commence production prior to obtaining those

In April 2019, Factory No.1, Factory No.5 and Factory No.7 (Factory no.

5 is considered

part of Factory no.7 and both are managed as one factory since 2010) restarted operations upon receipt of verbal notification from local

government of Yangkou County.

On May 7, 2019, the Company renamed its Subdivision Factory No.

5 is considered part of Factory no.7 and both are managed

as one factory since 2010) resumed operations upon receipt of verbal notification from local government of Yangkou County.

7, 2019, the Company renamed its Subdivision Factory No.

1 to Factory No.

and Factory No.

was previously considered part of Factory No.

7) to Factory No.

On November 25, 2019, the government of Shouguang City issued a notice

ordering all bromine facilities in Shouguang City, including the Company’s all bromine facilities, including Factory No.1 and Factory

7, to temporarily stop production from December 16, 2019 to February 10, 2020.

Subsequently, due to the coronavirus outbreak in China,

the local government ordered those bromine facilities to postpone the commencement of production.

Subsequently, the Company received an

approval dated on February 27, 2020 issued by the local governmental authority which allows us to resume production after the winter temporary

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.

5 (previously integrated with Factory No.

7) as the new Factory No.

On November 25,

2019, the government of Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the

Company’s all bromine facilities, including Factory No.1 and Factory No.

7, to temporarily stop production from December 16,

2019 to February 10, 2020.

Subsequently, due to the coronavirus outbreak in China, the local government ordered those bromine

facilities to postpone the commencement of production.

Subsequently, the Company received an approval dated on February 27, 2020

issued by the local governmental authority which allows us to resume production after the winter temporary closure.

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 on middle of

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.

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.

The Company is still waiting for governmental approval for factories

To our knowledge, the government is currently completing its planning process for all mining areas including that for prevention

As a result, we 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.

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 2022.

The Company is awaiting governmental approval

for Factories No.

To our knowledge, the government is finalizing plans for all mining areas, including flood prevention

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

This project was implemented for safeguarding its bromine facilities.

Pursuant to the notification from the government

of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 25, 2023 until February 20, 2024.

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.

compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed operations at

the bromine and crude salt factories as scheduled in February 2024.

▼ Chemical Products

10 unchanged sentences

In January 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 and basically completed

the civil works by end of June 2021.

On November 15, 2021, the company announced due to the supply chain issues as well as the electric

restrictions in China, the delivery of some equipment, the equipment installation and testing and beginning trial production at the chemical

factory had been be delayed.

On February 22, 2022, the company announced that discussions with the government have convinced management

that the electricity restrictions are being eased.

Accordingly, the Company had contacted its suppliers and will have the remainder of

the equipment produced and delivered, so the Company can complete installation and begin testing and trial production.

The Company has

started the preparation work for its application for safety and environmental assessment recently.

protection approval by the government of Shouguang City, Shandong Province for the planned Yuxin Chemical factory.

Construction of the

new chemical facilities at Bohai Marine Fine Chemical Industrial Park commenced in June 2020, with the bulk of the civil engineering works

completed by the end of June 2021.

However, due to the supply chain issues as well as the electric restrictions in China, the delivery

of some equipment, along with the equipment installation and testing and beginning trial production at the chemical factory, was delayed.

On February 22, 2022, the Company announced that discussions with the government had led to an easing of electricity restrictions.

a result, the Company re-engaged with its suppliers to proceed with the production and delivery of the remainder of the equipment, aiming

to finish installation and begin testing and trial production.

At this stage, the Company also began preparation work for its application

for safety and environmental assessment.

Additionally, the procurement of the final equipment for our chemical factory has been postponed

until we have a better understanding of the potential for derivative bromine products.

We anticipate proceeding with the completion of

its chemical factory in due course.

However, in the event that the Chinese economy persists in its weakness and if we perceives this trend

to be ongoing, there is a possibility that the chemical factory could be repurposed for the production of Sodium-Ion batteries.

To date, our sales have been limited to customers

79 unchanged sentences

In addition, we are required by Chinese law to cover employees in China with other types of social insurance.

We have purchased social insurance for almost allof our employees.

We have purchased social insurance for almost all of our employees.

Expense related to social insurance was approximately $681,540 for

32 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business