What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-10-11 compared with 2023-11-20 · 394 added, 366 removed, 261 unchanged (74% of the section changed)

14 unchanged sentences

events, developments, or changed circumstances, or for any other reason.

We are a Nevada holding company which conducts

operations through our wholly-owned China-based subsidiaries.

Our business is conducted and reported in four segments, namely,

bromine, crude salt, chemical products and natural gas.

Through our wholly-owned subsidiary, SCHC we produce

and trade bromine;

and through our wholly-owned subsidiary, SHSI, we manufacture and sell 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.

is commonly used in brominated flame retardants, fumigants, water purification compounds, dyes, medicines and disinfectants.

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.

Through our wholly-owned subsidiary, SYCI, we

manufacture and sell chemical products used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking

chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.

Our wholly-owned subsidiary, DCHC, was established

to explore and develop natural gas and brine resources (including bromine and crude salt) in Sichuan Province, China.

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.

The Company believes that this is another step

by the government to improve the environment.

It further believes the goal of the government is not to close all plants, but rather to

codify the regulations related to project approval, land use, planning approval and environmental protection assessment approval so that

illegal plants are not able to open in the future and so that plants close to population centers do not cause serious environmental damage.

In addition, the Company believes that the Shandong provincial government wants to assure that each of its regional and county governments

has applied the Notice in a consistent manner.

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 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 Factory No.

9 have passed inspection and were allowed to resume operations.

We are a Nevada holding

company which conducts operations through our wholly-owned China-based subsidiaries.

Our business is conducted and reported in four segments,

namely, bromine, crude salt, chemical products and natural gas.

Through our wholly-owned

subsidiary, SCHC, we produce and trade bromine and crude salt.

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.

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.

Through our wholly-owned

subsidiary, SYCI, we manufacture and sell chemical products used in oil and gas field exploration, oil and gas distribution, oil field

drilling, papermaking chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.

Our wholly-owned subsidiary,

DCHC, was established to explore and develop natural gas and brine resources (including bromine and crude salt) in Sichuan Province, China.

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.

The Company believes

that this is another step by the government to improve the environment.

It further believes the goal of the government is not to close

all plants, but rather to codify the regulations related to project approval, land use, planning approval and environmental protection

assessment approval so that illegal plants are not able to open in the future and so that plants close to population centers do not cause

serious environmental damage.

In addition, the Company believes that the Shandong provincial government wants to assure that each of its

regional and county governments has applied the Notice in a consistent manner.

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.

In February 2019, the Company received a notification

from the local government of Yangkou County that its Factory No.

9 had passed inspection and could resume operations.

In April 2019, Factory No.

7 resumed operations.

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,

4, No.7 and No.

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.

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.

On December 27, 2021, the Company announced that

the government of Shouguang City ordered the closing of all bromine facilities during the period from December 28, 2021 to February 21,

The Company reopened its four operating bromine and crude salt facilities as planned on February 21, 2022.

The Company is still waiting for governmental

approval for factories No.

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 modifications to our current wells and aqueducts prior to commencement of operations of these factories to satisfy the local government's

requirements.

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 the Company should

relocate to the Bohai park.

Chemical companies that were not asked to move into the park have been closed.

Since the closure of

our factories, 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

The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June

The completion of construction has been delayed due to COVID-19 related restrictions, supply chain disruption and electric restrictions.

On February 22, 2022, the Company announced that while the Company did not receive a formal notice from the government regarding the electricity

needed for its Yuxin Chemical factory, discussions with the government have convinced management that the electricity restrictions are

Accordingly, the Company has contacted its suppliers and will have the remainder of the equipment produced and delivered,

so the Company can complete installation.

Because of supply chain issues, largely related to COVID 19, the delivery of some of the equipment

has been delayed.

At this time, the Company cannot estimate when construction will be completed.

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 natural gas and brine water project, and

approvals for safety production inspection, environmental protection assessment, as well as related land issues.

Until these approvals

have been received, the Company has temporarily halted trial production at its natural gas well in Daying.

In compliance with the Chinese

government new policies, the Company is also required to obtain exploration and mining licenses for both bromine and natural gas.

to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial)

promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises

are allowed to participate in the natural gas production.

The Company plans to proceed with its applications for the natural gas and brine

project approvals with related government departments after the governmental planning has been finalized and the land and resource planning

for Sichuan Province has been approved.

As a result of our acquisitions of SCHC and SYCI, our historical consolidated

financial statements and the information presented below reflects the accounts of SCHC, SYCI , SHSI and DCHC, the consolidated financial

statements and the information presented below as of and for the period ended Setpember 30, 2023.

The following discussion should

be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

two approvals, the Company was allowed to resume production at all four bromine factories.

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.

No.8 started to contribute 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 10, 2022 until February

1, 2023 8:00 AM China Time.

To comply with such notification, the Company had temporarily stopped production at its bromine facilities

during the aforesaid period and reopened the operating bromine and crude salt factories in February, 2023 as planned.

The Company is still

waiting for governmental approval for factories No.

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.

On November 24, 2017, Gulf Resources received a letter from the People’s

Government of Yangkou County, Shouguang City notifying the Company that due to the new standards and regulations relating to safety production

and environmental pollution, from certain local governmental departments, such as the municipal environmental protection department, the

security supervision department and the fire department, its chemical enterprises would have to be relocated to a new industrial park

called Bohai Marine Fine Chemical Industry Park.

Although our chemical companies were in compliance with regulations, they

were also close to a residential area.

As a result, the government determined we should relocate to the Bohai park.

Chemical companies

that are not being asked to move into the park are being permanently closed.

Since our factories closed, the Company has secured

from the government the land use rights for its chemical plant.

On January 6, 2020, the Company received the environmental protection

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

The Company began the construction

on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020.

The construction was expected to take

approximately one year and an additional six months to complete the equipment installation and testing, however due to the COVID epidemic

and electrical restrictions, the opening of the chemical factory has been delayed.

[The Company has received the refrigeration and

air compressor units.

On July 26, 2023, the Company announced that the delivery of the remaining equipment for its Yuxin chemical factory

has been temporarily delayed and to review its chemical products strategy.

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

Until these approvals have been received, the Company has to temporarily halt trial production at its natural gas well in

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.

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 April 2022, Shouguang Hengde Salt Industry

Ltd（“SHSI”）, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and

On January 28, 2020 we completed a 1-for-5 reverse

2 unchanged sentences

All shares of common stock referenced in this report have been adjusted to reflect the stock split

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.

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

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”).

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

On June 26, 2024, the Company received a letter

from Nasdaq indicating that, based on its further review and the plan of compliance submitted by the Company on June 14, 2024, Nasdaq

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 the Rule.

In the event the Company does not

satisfy the terms, Nasdaq will provide written notification that its securities will be delisted.

At that time, the Company may appeal

Nasdaq’s determination to a hearings panel.

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.

The August Notice has no immediate effect on the

listing or trading of the Company’s common stock on the Nasdaq Global Select Market.

While the Company can provide no assurance

to the timing, the Company has submitted a letter to Nasdaq confirming that there has been no change to its original plan to regain compliance

with respect to the filing requirements, and will continue to work diligently to complete and file its delayed SEC reports.

Our current corporate structure chart is set forth in the following

3 unchanged sentences

read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report.

Recent Developments

In 2018, Shouguang City experienced the devastating impact of Typhoon

Winbiya, regarded as one of the most destructive typhoons in history.

In 2019, Typhoon Lekima struck Shouguang City, surpassing the destructive

force of its predecessor.

These typhoons inflicted significant damage upon our facilities and the surrounding agricultural fields.

Company incurred substantial expenses, amounting to more than $46 millions, including write-offs, for road repairs, equipment replacement,

salt pan reconstruction, the re-drilling of flooded wells and etc..

To mitigate similar damages in the future, the Company has commenced

a flood prevention initiative.

Our strategy involves the renovation of the channels of four major rivers within our mining area, encompassing

the tributary of the Mihe River.

The aim is to prevent flooding that could harm the wells, aqueducts and crude salt pans at our plant.

The projected expenditure for this initiative amounts to approximately $50.5 million.

As of September 30, 2023, we disbursed approximately

$15.2 for the initial phase of this project.

Apart from reducing risk to surrounding regions, we anticipate three advantages from this

flood prevention plan.

It is expected to:

(i) enhance the probability of obtaining authorization to reopen factories No.

(ii) enable the drilling of additional wells across our five operating factories, and (iii) mitigate the risks and associated expenses

related to future storms-induced flooding.

RESULTS OF OPERATIONS

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, 2023 and 2022.

derived from the condensed consolidated statements of operations, cash flows and stockholders equity for the three-month and six-month

periods ended June 30, 2024 and 2023.

Comparison of the Three-Month Period Ended

September 30, 2023 and 2022

June 30, 2024 and 2023

Three-Month Period

Ended September 30, 2023

Ended June 30, 2024

Three-Month Period

Ended September 30, 2022

Ended June 30, 2023

Percent Change

Increase/ (Decrease)

Cost of net revenue

Sales, marketing and other operating expenses

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

General and administrative expenses

Other operating income(loss)

Other Operating income (expense)

Income (loss) from operations

Other expense

(29,169,008 )

Income (loss) before taxes

(34,306,028 )

Income tax benefit

1 unchanged sentence

$ (33,097,918 )

below shows the changes in net revenue in the respective segment of the Company for the three-month period ended September 30, 2023 as

compared to the same period in 2022:

below shows the changes in net revenue in the respective segment of the Company for the three-month period ended June 30, 2024 as compared

to the same period in 2023:

Net Revenue by Segment

2 unchanged sentences

Percent Change

September 30, 2023

September 30, 2022

June 30, 2024

June 30, 2023

of Net Revenue

Chemical Products

Bromine and crude salt segments

Equipment Lease

Three-Month Period Ended

Percentage Change

Bromine and crude salt segments

product sold in tonnes

September 30, 2023

September 30, 2022

Increase (Decrease)

June 30, 2024

June 30, 2023

Bromine segment

For the three-month periods ended September 30, 2023 and 2022, the

net revenue for the bromine segment was $4,908,152 and $19,845,773, respectively.

The decrease of the net revenue of bromine was due to

the 43% decrease in tonnes sold and 57% decrease in average selling price of bromine in the third quarter of 2023.

The average selling

price of bromine in the third quarter of 2023 was $3,237 compared to the average selling price of bromine in the third quarter of 2022

of $7,474(calculated by dividing revenue by tonnes).

For the three-month periods ended June 30, 2024 and 2023, the net revenue

for the bromine segment was $1,859,234 and $7,356,347, respectively.

The decrease of the net revenue of bromine was due to a decrease

in selling prices and tonnes sold of bromine in the second quarter of 2023.

The sale price of bromine in the second quarter of 2024

was 22% lower than in the second quarter of 2023, and the quantity sold was 67% lower than in the second quarter of 2023.

Crude salt segment

For the three-month periods ended September 30, 2023 and 2022, the

net revenue for the crude salt was $889,556 and $2,934,707, respectively.

The decrease of net revenue of crude salt was mainly due to

the 63% decrease in tonnes sold and 18% decrease in average selling price of crude salt for the three-month period ended September 30,

For the three-month periods ended June 30, 2024 and 2023, the net revenue

for the crude salt was $523,935 and $649,435, respectively.

The decrease of net revenue of crude salt was mainly due to 33% decrease in

average selling price of crude salt for the three-month period ended June 30, 2024.

Chemical products segment

For the three-month periods ended September 30,

For the three-month periods ended June 30, 2024

and 2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.

Natural gas segment

For the three-month period ended September 30,

2023 and 2022, the net revenue was $0.

For the three-month period ended June 30, 2024

and 2023, the net revenue for the natural gas was $0.

Equipment Lease

For the three-month period ended September 30,

2023 and 2022, the net revenue for the equipment lease was $67,907 and $82,315.

For the three-month period ended June 30, 2024

and 2023, the net revenue for the equipment lease was $0.

Cost of Net Revenue

3 unchanged sentences

Three-Month Period Ended

September 30, 2023

September 30, 2022

June 30, 2024

June 30, 2023

Chemical Products

Cost of net revenue reflects mainly

the raw materials consumed, 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.

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 $5,112,058 for the

three-month period ended June 30, 2024, an decrease of $2,209,384 (or 30%) as compared to the same period in 2023 due to the decrease

of net revenue by 70% for the three-month period ended June 30, 2024 as compared to the same period in 2023 .

Bromine production capacity and utilization

3 unchanged sentences

Annual Production Capacity (in tonnes)

Three-month period ended September 30, 2022

Three-month period ended September 30, 2023

Variance of the three-month period ended September 30, 2023 and 2022

(i) Utilization ratio is calculated based on the

annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes of all the seven factories

including those that have not commenced operations.

Three-month period ended June 30, 2023

Three-month period ended June 30, 2024

Variance of the three-month period ended June 30, 2024 and 2023

(i) Utilization ratio is calculated

based on the annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes.

Bromine segment

For the three-month period ended September 30,

2023, the bromine segment had a net cost of revenue of $5,995,496.

For the three-month period ended September 30,

For the three-month period ended June 30, 2024,

the cost of net revenue for the bromine segment was $4,729,059.

For the three-month period ended June 30, 2023,

the cost of net revenue for the bromine segment was $7,043,681.

Crude salt segment

For the three-month period ended September 30,

2023 the cost of net revenue for the crude salt segment was $378,100.

For the three-month period ended September 30,

For the three-month period ended June 30, 2024 the cost of net revenue

for the crude salt segment was $382,999.

For the three-month period ended June 30, 2023

the cost of net revenue for the crude salt segment was $277,761.

1 unchanged sentence

Cost of net revenue for our chemical products

segment for the three-month period ended September 30, 2023 and 2022 was $0.

segment for the three-month period ended June 30, 2024 and 2023 was $0.

Natural gas segment

Cost of net revenue for our natural gas segment

for the three-month period ended September 30, 2023 and 2022 was $306 and 331.

for the three-month period ended June 30, 2024 and 2023 was $0.

Gross Profit.

Gross loss was $2,728,889,

or 9%, of net revenue for three-month period ended September 30, 2023, representing an decrease of $14,965,388, as compared to a gross

or 115%, of net revenue for the three-month period ended June 30, 2024, representing a decrease of $3,413,229, as compared to a gross

profit of $684,340, or 9%, of net revenue for the same period in 2023.

3 unchanged sentences

Three-Month Period Ended

September 30, 2023

September 30, 2022

June 30, 2024

June 30, 2023

Profit Margin

(loss) Margin

Gross Profit (loss) Margin

$ (1,087,344 )

Gross Profit Margin

Chemical Products

Equipment Lease

Total Gross Profit

Bromine segment

For the three-month period ended September 30,

2023, the gross loss for our bromine segment was 22%, compared to 63% in the three-month period ended September 30, 2022.

in gross profit margin was primarily attributable to the lower average selling price of bromine of $3,237 per ton in the three-month

period ended September 30, 2023 compared to $7,474 per ton in the three-month period ended September 30, 2022.

For the three-month period ended September 30,

For the three-month period ended June 30, 2024,

the gross loss margin for our bromine segment was 154%, compared to 4% in the three-month period ended June 30, 2023.

The decrease in

gross profit margin was primarily attributable to the lower average selling price of bromine of $2,379 per ton in the three-month period

ended June 30, 2024 compared to $3,065 per ton in the three-month period ended June 30, 2023 and the number of sales was down 67% from

the second quarter of 2023.

For the three-month period ended June 30, 2023,

the gross profit margin for our bromine segment was 4%.

Crude salt segment

For the three-month period ended September 30,

For the three-month period ended June 30, 2024,

the gross profit margin for our crude salt segment was 27%.

For the three-month period ended September 30, 2022, the gross profit

margin for our crude salt segment was 64%.

For the three-month period ended June 30, 2023,

the gross loss margin for our crude salt segment was 57%.

Direct labor and factory overheads incurred

6 unchanged sentences

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $1,714,503

and $1,910,318 incurred for the three-month periods ended September 30, 2023 and 2022, respectively, of factories that have not resumed

production were presented as part of the operating expense.

and $1,055,529 incurred for the three-month periods ended June 30, 2024 and 2023, respectively, for the factories that have not resumed

production were presented as part of the operating expenses.

General and Administrative Expenses

General and administrative expenses were $689,972 for the three-month period ended June 30, 2024, representing an increase of $96,647

as compared to $593,325 for the same period in 2023.

Income (loss) from Operations Loss

from operations was $2,293,288 for the three-month period ended September 30, 2023, compared to income of $11,942,592 in the same period

Loss from Operations by Segment

from operations was $5,146,997 for the three-month period ended June 30, 2024, compared to loss from operations of $919,098 in the same

period in 2023.

Income (loss) from Operations by Segment

Three-Month Period Ended

September 30, 2023

June 30, 2024

Three-Month Period Ended

September 30, 2022

June 30, 2023

Chemical Products

1 unchanged sentence

Corporate costs

Unrealized gain (loss) on translation of Intercompany balance

Unrealized gain on translation of Intercompany balance

Income (loss) from operations

Bromine segment

Loss from operations from our bromine segment was $2,143,203 for the

three-month period ended September 30, 2023, compared to income from operations of $10,552,343 in the same period in 2022.

of the net revenue of bromine was due to the 43% decrease in tonnes sold and 57% decrease in average selling price of bromine in the third

quarter of 2023.

Loss from operations from our bromine segment

was $4,662,586 for the three-month period ended June 30, 2024, compared to income from operations of $787,509 in the same period in 2023.

This decrease was due to a 67% decrease in tonnes sold and a 22% decrease in average selling price.

Crude salt segment

Income from operations from our crude salt segment

was $500,469 for the three-month period ended September 30, 2023, compared to income from operations of $1,876,161 in the same period

The decrease of net revenue of crude salt was mainly due to the 63% decrease in tonnes sold and 18% decrease in average selling

price of crude salt for the three-month period ended September 30, 2023.

was $130,024 for the three-month period ended June 30, 2024, compared to income from operations of $361,083 in the same period in 2023.

Chemical products segment

Loss from operations from our chemical products

segment was $397,410 for the three-month period ended September 30, 2023, compared to loss from operations of $447,960 in the same period

segment was $339,254 for the three-month period ended June 30, 2024, compared to loss from operations of $416,019 in the same period in

Natural gas segment

Income from operations from our natural gas segment

was $4,156 for the three -month period ended September 30, 2023, compared to a loss of $19,500in the same period in 2022.

Loss from operations from our natural gas segment

was $73,773 for the three -month period ended June 30, 2024, compared to a loss from operations of $2,830 in the same period in 2023.

Other Income, Net Other income,

net of $33,967 represented bank interest income, net of capital lease interest expense for the three -month period ended September 30,

2023, an decrease of $1,788 as compared to the same period in 2022.

net of 9,977 represented bank interest income, net of capital lease interest expense for the three-month period ended June 30, 2024, an

decrease of $34,606 (or approximately 78%) as compared to the same period in 2023.

Net Income (loss) Net loss was $33,097,918

for the three-month period ended September 30, 2023, compared to a net income of $8,967,380 in the same period in 2022.

Comparison of the Nine-Month Period Ended

September 30, 2023 and 2022

Nine-Month Period

Ended September 30, 2023

Nine-Month Period

Ended September 30, 2022

for the three-month period ended June 30, 2024, compared to a net income of $681,816 in the same period in 2023.

Comparison of the Six-Month Period Ended

June 30, 2024 and 2023

Six-Month Period

Ended June 30, 2024

Six-Month Period

Ended June 30, 2023

Percent Change

1 unchanged sentence

(14,090,516 )

(21,056,782 )

Sales, marketing and other operating expenses

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

Other operating loss

General and administrative expenses

Other Operating income (expense)

Income (loss) from operations

(10,416,416 )

Other expense

(29,173,011 )

Income (loss) before taxes

Income tax benefit (expense)

(39,568,220 )

Income (loss) tax benefit

Net Income (loss)

$ (37,090,050 )

below shows the changes in net revenue in the respective segment of the Company for the nine-month period ended September 30, 2023 as

compared to the same period in 2022:

$ (1,239,563 )

below shows the changes in net revenue in the respective segment of the Company for the six-month period ended June 30, 2024 as compared

to the same period in 2023:

Net Revenue by Segment

Nine-Month Period Ended

Six-Month Period Ended

Percent Increase

September 30, 2023

September 30, 2022

June 30, 2024

June 30, 2023

of Net Revenue

Chemical Products

Equipment Lease

Bromine and crude salt segments

Nine-Month Period Ended

Six-Month Period Ended

Percentage Change

product sold in tonnes

September 30, 2023

September 30, 2022

June 30, 2024

June 30, 2023

Bromine (excluding volume sold to SYCI)

Bromine segment

Net revenue from our bromine segment increased

to $20,734,871 for the nine-month period ended September 30, 2023 compared to $41,865,598 for the same period in 2022 respectively, due

to the lower selling price and selling quantity.

Net revenue from our bromine segment decreased

to $3,005,431 for the six-month period ended June 30, 2024 compared to $15,826,719 for the same period in 2023 due to the lower selling

price of bromine and tonnes of bromine .

Crude salt segment

Net revenue from our crude salt segment increased

to $2,287,672 for the nine-month period ended September 30, 2023 compared $5,506,655 for the same period in 2022, respectively, due to

the lower selling price and selling quantity.

Net revenue from our crude salt segment decreased

to $640,606 for the six-month period ended June 30, 2024 compared $1,398,116 for the same period in 2023 due to the lower selling tonnes

of crude salt.

Chemical products segment

For the nine-month period ended September 30,

2023 and 2022, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1,

For the six-month period ended June 30, 2024 and

2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.

Natural gas segment

For the nine-month period ended September 30,

2023 and 2022, the net revenue for the natural gas was $0.

For the six-month period ended June 30, 2024 and

2023, the net revenue was $0.

Equipment Lease

For the nine-month period ended September 30,

2023 and 2022, the net revenue for the equipment lease was $150,861 and $132,993.

For the six-month period ended June 30, 2024 and

2023, the net revenue for the equipment lease was $44,194 and $82,954.

Cost of Net Revenue

Cost of Net Revenue by Segment

Nine-Month Period Ended

September 30, 2023

September 30, 2022

Six-Month Period Ended

June 30, 2024

June 30, 2023

Chemical Products

7 unchanged sentences

Annual Production Capacity (in tonnes)

Nine-month period ended September 30, 2022

Nine-month period ended September 30, 2023

Variance of the nine-month period ended September 30, 2023 and 2022

Six-month period ended June 30, 2023

Six-month period ended June 30, 2024

Variance of the six-month period ended June 30, 2024 and 2023

Utilization ratio is calculated based on the annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes.

Bromine segment

For the nine-month period ended September 30,

For the six-month period ended June 30, 2024,

the cost of net revenue for the bromine segment was $6,801,811.

For the nine-month period ended September 30,

For the six-month period ended June 30, 2023,

the cost of net revenue for the bromine segment was $13,192,124.

Crude salt segment

For the nine-month period ended September 30,

For the six-month period ended June 30, 2024,

the cost of net revenue for the crude salt segment was $429,893.

The cost of net revenue for our crude salt segment for the nine-month

period ended September 30, 2022 was $2,908,108.

The reason for the decrease is that there is that

with the creation of SHSI, some costs formerly allocated to crude sale were allocated to bromine.

For the six-month period ended June 30, 2023,

the cost of net revenue for the crude salt segment was $898,019.

Natural gas segment

Cost of net revenue for our natural gas segment

for the nine-month period ended September 30, 2023 and 2022 was $679 and $414.

for the six-month period ended June 30, 2024 and 2023 was $199 and $373, respectively.

Gross Profit.

Gross profit was $2,708,986,

or 12%, of net revenue for nine-month period ended September 30, 2023 compared to $26,448,464, or 56%, of net revenue for the same period

Gross loss was $3,541,672,

or 96%, of net revenue for six-month period ended June 30, 2024 compared to $3,217,273, or 19%, of net revenue for the same period in

Gross Profit (Loss) by Segment

% Point Change

Nine-Month Period Ended

September 30, 2023

September 30, 2022

Six-Month Period Ended

June 30, 2024

June 30, 2023

Profit Margin

2 unchanged sentences

Chemical Products

Equipment Lease

Total Gross Profit

Bromine segment

For the nine-month period ended September 30,

2023, the gross profit margin for our bromine segment was 7%, compared to 57% in the nine-month period ended September 30, 2022.

in gross profit margin was primarily attributable to the lower average selling price of bromine of $3,493 per ton in the nine-month period

ended September 30, 2023 compared to $7,674 per ton in the nine-month period ended September 30, 2022.

For the nine-month period ended September 30,

For the six-month period ended June 30, 2024,

the gross loss for our bromine segment was 126%, compared to 17% in the six-month period ended June 30, 2023.

The decrease in gross profit

margin was primarily attributable to the higher average selling price of bromine of $2,438 per ton in the six-month period ended June

30, 2024 compared to $3,580 per ton in the six-month period ended June 30, 2023.

For the six-month period ended June 30, 2023,

the gross profit margin for our bromine segment was 17%.

Crude salt segment

For the nine-month period ended September 30,

2023, the gross profit margin for our crude salt segment was 44%.

For the nine-month period ended September 30,

For the six-month period ended June 30, 2024,

the gross profit margin for our crude salt segment was 33%.

For the six-month period ended June 30, 2023 the

gross profit margin for our crude salt segment was 35%.

Chemical products segment

For the nine-month period ended September 30,

2023, the gross profit margin for our chemical segment was 0% due to the closure of our plant..

As a result of the closure, there were

no chemical products for sale for the nine-month period ended September 30, 2023.

For the six-month period ended June 30, 2024,

the gross profit margin for our chemical segment was 0% due to the closure of our plant and factories to perform rectification and improvement.

As a result, there were no chemical products for sale for the six-month period ended June 30, 2024.

Direct labor and factory overheads incurred

6 unchanged sentences

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $5,449,192

and $6,022,206 incurred for the nine-month periods ended September 30, 2023 and 2022, respectively, for the factories that have not resumed

and $3,464,265 incurred for the three-month periods ended June 30, 2024 and 2023, respectively, for the factories that have not resumed

production were presented as part of the operating expense.

General and Administrative Expenses.

General and administrative expenses were $ 2,266,260 for the nine-month period ended September 30,

2023, a decrease of $1,117,803 (or 33%) as compared to $3,384,063 for the same period in 2022.

The decrease was mainly due to the unrealized

foreign currency transaction loss on intercompany balance recorded in nine-month period ended September 30, 2023 compared to an unrealized

foreign currency transaction gain on intercompany balance recorded in the same period in the previous year.

General and administrative expenses were $1,407,428 for the six-month period ended June 30, 2024, a decrease of $95,948 (or 6%) as compared

to $1,503,376 for the same period in 2023.

Income (Loss) from Operations.

from operations was $ 4,011,944 for the nine-month period ended September 30, 2023, compared to an

income of $16,986,668 in the same period in 2022.

from operations was $10,416,416 for the six-month period ended June 30, 2024, compared to income from operations of $1,718,656 in the

same period in 2023.

Income(loss) from Operations by Segment

Nine-Month Period Ended

September 30, 2023

Nine-Month Period Ended

September 30, 2022

Six-Month Period Ended

June 30, 2024

Six-Month Period Ended

June 30, 2023

$ (9,445,401 )

$ (1,197,201 )

Chemical Products

Income(loss) from operations before corporate costs

(10,146,029 )

Corporate costs

2 unchanged sentences

$ (10,416,416 )

$ (1,718,656 )

Bromine segment

Loss from operations from our bromine segment

was $3,340,404 for the nine-month period ended September 30, 2023, compared to an income of $17,226,718 in the same period in 2022.

decrease in gross profit margin was primarily attributable to the lower average selling price of bromine of $3,493 per ton in the nine-month

period ended September 30, 2023 compared to $7,674 per ton in the nine-month period ended September 30, 2022.

was $9,445,401 for the six-month period ended June 30, 2024, compared to an loss from operations of $1,197,201 in the same period in 2023.

This decrease was due to a 72% decrease in tonnes sold and a 32% decrease in average selling price.

Crude salt segment

Income from operations from our crude salt segment

was $904,482 for the nine-month period ended September 30, 2023, compared to an income of $1,497,208 in the same period in 2022.

was $54,932 for the six-month period ended June 30, 2024, compared to a loss from operations of $404,013 in the same period in 2023.

Chemical products segment

Loss from operations from our chemical products

segment was $1,231,302 for the nine-month period ended September 30, 2023, compared to a loss of $1,436,443 in the same period in 2022.

segment was $654,078 for the six-month period ended June 30, 2024, compared to a loss from operations of $833,892 in the same period in

Natural gas segment

Income from operations from our natural gas segment

was $14,011 for the nine-month period ended September 30, 2023, compared to a loss of $68,938 in the same period in 2022.

Loss from operations from our natural gas segment

by equipment lease was $101,482 for the six-month period ended June 30, 2024, compared to a income from operations of $9,855 in the same

period in 2023.

Other Income, Net.

Other income,

net of $119,805 represented bank interest income, net of capital lease interest expense for the nine -month period ended September 30,

2023, an increase of $962 (or approximately 1%) as compared to the same period in 2022.

net of $21,207 represented bank interest income, net of capital lease interest expense for the six -month period ended June 30, 2024,

an decrease of $64,631 (or approximately 75%) as compared to the same period in 2023.

Net Income (Loss).

$3,015,360 for the nine-month period ended September 30, 2023, compared to a net income of $12,749,228 in the same period in 2022.

Net Income Per Share

For the nine months ended September 30, 2023,

net loss per share was $0.29 compared to an income of $1.22 in the period ending September 30, 2022.

There were 10,431,924 shares outstanding

compared to 10,471,924 shares.

Foreign Currency Translation Adjustment

For the nine months ending September 30, 2023,

the Company had a negative foreign currency translation adjustment of $7,879,513 versus a positive adjustment of $30,774,686 in the previous

This adjustment impacts all balance sheet translations into U.S.

$37,090,050 for the six-month period ended June 30, 2024, compared to a net loss of $1,239,563 in the same period in 2023.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2023, cash and cash equivalents

As of June 30, 2024, cash and cash equivalents

were $10,367,539 as compared to $72,223,894 as of December 31, 2023.

1 unchanged sentence

Statement of Cash Flows

Nine-Month Period Ended September 30,

Six-Month Period Ended June 30,

Net cash (used in) provided by operating activities

1 unchanged sentence

(60,526,213 )

(33,217,987 )

Net cash used in financing activities

Effects of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

$ (4,451,237 )

$ (3,128,985 )

For the nine-month period ended September 30,

Net increase (decrease) in cash and cash equivalents

For the six-month period ended June 30, 2024,

we met our working capital and capital investment requirements by using cash on hand.

Net Cash (used in) Provided by Operating Activities

During the nine-month period ended September 30,

2023, cash flow provided by operating activities of approximately $9.9 million was mainly due to a net loss of $3.02 million, a decrease

in accounts receivable of $3.13 million, an increase in accounts payable of $1.5 million, an increase in deferred taxes of $1.0 million,

and a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $15.4 million, offset by increases

in operating leases, and prepayments.

During the nine-month period ended September 30,

2022, cash flow provided by operating activities of approximately $37 million was mainly due to a net income of $12.75 million, a decrease

in accounts receivable of $3.45 million, an increase in accounts payable of $1.55 million, an decrease in deferred taxes of $3.8 million,

and a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $16.3 million, offset by increases

in operating leases, and prepayments.

During the six-month period ended

June 30, 2024, cash flow used in operating activities of approximately $0.8 million was mainly due to a net loss of $37.09 million, offset

by depreciation and amortization expenses of $9.47 million and loss on disposal of equipment of $29.17 million.

During the six-month period ended June 30, 2023,

cash flow provided by operating activities of approximately $11 million was mainly due to a net loss of $1.24 million, a decrease in accounts

receivable of $3.15 million, a decrease in accounts payable of $1.56 million, a decrease in deferred taxes of $0.4 million, and a non-cash

adjustment related to depreciation and amortization of property, plant and equipment of $10.6 million, offset by increases in operating

leases, and prepayments.

Accounts receivable

1 unchanged sentence

a major impact on our overall liquidity.

The following table presents the aging analysis of our accounts receivable as of September 30,

The following table presents the aging analysis of our accounts receivable as of June 30, 2024

and December 31, 2023.

September 30, 2023

June 30, 2024

December 31, 2023

8 unchanged sentences

The overall accounts receivable balance as of

September 30, 2023 decreased by $3,213,048, as compared to those of December 31, 2022.

We have policies in place to ensure that sales

are made to customers with an appropriate credit history.

June 30, 2024 decreased by $3,129,401, as compared to those of December 31, 2023.

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.

No allowance for doubtful accounts for the three-month and nine-month periods ended September 30, 2023 is required.

allowance for doubtful accounts for the three-month and six-month periods ended June 30, 2024 is required.

Our inventory consists of the following:

September 30, 2023

June 30, 2024

December 31, 2023

1 unchanged sentence

Finished goods

The net inventory level as of September 30, 2023

decreased by $723,752, as compared to the net inventory level as of December 31, 2022.

Raw materials increased by $4,221 as of September

The net inventory level as of June 30, 2024 decreased

by $163,469 (or 28%), as compared to the net inventory level as of December 31, 2023.

Raw materials increased by $1,319 as of June 30,

2024 as compared to December 31, 2023.

Our finished goods decreased by $164,788 as of

September 30, 2023 as compared to December 31, 2022.

June 30, 2024 as compared to December 31, 2023.

Net Cash Used in Investing Activities

For the nine-month period ended September 30,

2023, we used approximately $15.2 million to the flood prevention project aiming to prevent flooding that could harm the wells, aqueducts

and crude salt pans at our plant.

For the nine-month period ended September 30,

2022, we used approximately $33.2 million to acquire property, plant and equipment, which mainly includes the cost for bromine wells,

aqueducts and the installation of high and low voltage lines for bromine Wells.

During the six months ended June 30, 2024, we

used approximately $60.5 million to acquire property, plant and equipment, which primarily included the cost of bromine wells and the

installation of high and low voltage lines for these bromine wells, as well as the purchase of salt plants.

For the six-month period ended June 30, 2023,

we used approximately $0.05 million to acquire property, plant and equipment.

Net Cash Used in Financing Activities.

For the nine-month period ended September 30,

2023 and 2022, we used $0.3 million to repay finance lease obligations.

For the six-month period ended June 30, 2024 and

2023, we used $0.3 million to fulfil finance lease obligations.

We believe that our available funds and cash flows

2 unchanged sentences

We had available cash of approximately $10.37

million at September 30, 2023, all of which is in highly liquid current deposits earning no or little interest.

We do not anticipate paying

cash dividends in the foreseeable future.

million at June 30, 2024, all which is in highly liquid current deposits earning no or little interest.

We do not anticipate paying cash

dividends in the foreseeable future.

We intend to continue to focus our efforts on the activities of SCHC,

4 unchanged sentences

of risks, including possible adverse effects on our operating results, diversion of management’s attention, inability to retain

key personnel, risks associated with unanticipated events, risks associated with the COVID-19 pandemic and the financial statement effect

of potential impairment of acquired intangible assets, any of which could have a materially adverse effect on our condition and results of

In addition, if competition for acquisition candidates or operations were to increase, the cost of acquiring businesses could

increase materially.

We may effect an acquisition with a target business which may be financially unstable, under-managed, or in its early

stages of development or growth.

Our inability to implement and manage our expansion strategy successfully may have a material adverse

effect on our business and future prospects.

key personnel, risks associated with unanticipated events, and the financial statement effect of potential impairment of acquired intangible

assets, any of which could have a materially adverse effect on our condition and results of operations.

In addition, if competition

for acquisition candidates or operations were to increase, the cost of acquiring businesses could increase materially.

We may effect an

acquisition with a target business which may be financially unstable, under-managed, or in its early stages of development or growth.

Our inability to implement and manage our expansion strategy successfully may have a material adverse effect on our business and future

Contractual Obligations and Commitments

1 unchanged sentence

not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements.

information regarding our contractual obligations and commitments at September 30, 2023 is provided in the notes to our consolidated financial

information regarding our contractual obligations and commitments at June 30, 2024 is provided in the notes to our consolidated financial

See “Notes to Condensed Consolidated Financial Statements, Note 17 – Capital Commitment and Operating Lease Commitments”.

16 unchanged sentences

These policies and estimates are described in the Company’s 2023 Form 10-K.

Quantitative and Qualitative Disclosures About Market Risk

Pursuant to Item 305(e) of Regulation S-K (§

229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,”

as defined by Rule 229.10(f)(1).

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-Q

Item 2. Management’s Discussion and Analysis