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Item 2. Properties

2025-04-11 compared with 2024-09-27 · 122 added, 116 removed, 151 unchanged (61% of the section changed)

FIGURE 2.1 - REGIONAL MAP OF MINING PROPERTIES

FIGURE 2.2 – DETAIED MAP OF MINING PROPERTIES

We do not own any land, although we do own some

of the buildings on land we lease.

Our executive offices are located at Level 11, Vegetable Building, Industrial Park of the East

in Shouguang City, Shandong Province, P.R.C, which also is the headquarters of SCHC, SHSI and SYCI.

These offices were purchased from

Shandong Shouguang Vegetable Seed industry Group Co., Ltd.

SYCI concentrates its efforts on the production

and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking

chemical agents, and manufacture and sell materials that are used for human and animal antibiotics in China.

Currently, SYCI is closed

according to the November 2017 Letter and currently under construction at Bohai Marine Fine Chemical Industry Park, Shouguang City, Shandong

Province, China, where SYCI will be relocated to.

DCHC is a registered company exploring and developing

natural gas and brine resources (including bromine and crude salt) in China located in No.14 team, Liguanggou Village, Tianbao Township,

Daying County, Suining City, Sichuan Province,China.

In the first quarter of 2018, six out of its ten

bromine factories completed their rectification process within factory areas (i.e.

excluding crude salt field area) and were approved

and scheduled for production commencement by April 2018 as verbally indicated by the local government.

The remaining four factories were

still undergoing rectification at that time.

FIGURE 2.1 - REGIONAL MAP

OF MINING PROPERTIES

FIGURE 2.2 – DETAILED

MAP OF MINING PROPERTIES

We do not own any land, although

we do own some of the buildings on land we lease.

Our executive offices are located at Level 11, Vegetable Building, Industrial Park of

the East in Shouguang City, Shandong Province, P.R.C, which also is the headquarters of SCHC, SHSI and SYCI.

These offices were purchased

from Shandong Shouguang Vegetable Seed industry Group Co., Ltd.

SYCI concentrates its efforts

on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling,

papermaking chemical agents, and manufacture and sell materials that are used for human and animal antibiotics in China.

Currently, SYCI

is closed according to the November 2017 Letter and currently under construction at Bohai Marine Fine Chemical Industry Park, Shouguang

City, Shandong Province, China, where SYCI will be relocated to.

DCHC is a registered company exploring

and developing natural gas and brine resources (including bromine and crude salt) in China located in No.14 team, Liguanggou Village,

Tianbao Township, Daying County, Suining City, Sichuan Province, China.

In the first quarter of 2018,

six out of its ten bromine factories completed their rectification process within factory areas (i.e.

excluding crude salt field area)

and were approved and scheduled for production commencement by April 2018 as verbally indicated by the local government.

The remaining

four factories were still undergoing rectification at that time.

Three factories (Factory No.

1 unchanged sentence

4 and Factory No.

11) had to be demolished in

September 2018 as required by the government and rectification for Factory No.

to be demolished in September 2018 as required by the government and rectification for Factory No.

10 was completed in November 2018.

The Company operates its bromine and crude salt

production facilities through its wholly-owned subsidiary SCHC.

SCHC has land use rights to one property (10,790 square meters,

or approximately 3 acre) as bromine production area for Factory No.

The Company operates its bromine

and crude salt production facilities through its wholly-owned subsidiary SCHC.

SCHC has land use rights to one property (10,790 square

meters, or approximately 3 acre) as bromine production area for Factory No.

1 and land lease contracts to seven properties (approximately

1 unchanged sentence

Each of the properties is accessible by road.

The Yiyang railway line is within 50 kilometers and the Yangkou port

is five kilometers away.

Each of the seven properties contains natural

brine deposits which are extracted through wells and are used to extract bromine and produce crude salt.

The Yiyang railway line is within 50 kilometers and the Yangkou port is five kilometers

Each of the seven properties contains

natural brine deposits which are extracted through wells and are used to extract bromine and produce crude salt.

Bromine is a simple molecular

1 unchanged sentence

Crude salt is sodium chloride.

Bromine is an important

chemical raw material in flame retardants, fire extinguishing agents, refrigerants, photographic materials, pharmaceuticals, pesticides,

and oil and other industries.

Crude salt, also known as industrial salt, is used in a wide range of chemical industries, is

the major raw material in the soda and chlor-alkali industries and can be widely used in agricultural, animal husbandry, fisheries and

food processing industries.

Bromine is an important chemical

raw material in flame retardants, fire extinguishing agents, refrigerants, photographic materials, pharmaceuticals, pesticides, and oil

and other industries.

Crude salt, also known as industrial salt, is used in a wide range of chemical industries, is the major raw material

in the soda and chlor-alkali industries and can be widely used in agricultural, animal husbandry, fisheries and food processing industries.

Crude salt is also the main raw material for edible salt.

Nature of Ownership Interest in the Properties

All of the land in the PRC is owned by the state.

Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes at no cost.

of land used for industrial purposes, the land use rights are granted for a period of 50 years.

This period may be renewed at the expiration

of the initial and any subsequent terms.

Granted land use rights are transferable and may be used as security for borrowings and other

The Company does not own any land but has entered into contracts with the local government and original owners of the land

use rights to acquire their rights for a period of 50 years.

The contracts required us to pay a one-time fee plus an annual

Nature of Ownership Interest in

the Properties

All of the land in the PRC is

owned by the state.

Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes at

In the case of land used for industrial purposes, the land use rights are granted for a period of 50 years.

This period may be

renewed at the expiration of the initial and any subsequent terms.

Granted land use rights are transferable and may be used as security

for borrowings and other obligations.

The Company does not own any land but has entered into contracts with the local government and original

owners of the land use rights to acquire their rights for a period of 50 years.

The contracts required us to pay a one-time fee plus an

Mineral Rights

The Chinese and provincial governments have enacted

a series of laws and regulations relating to the natural resources sector over the past 20 years, including laws and regulations designed

to improve safety and decrease environmental degradation.

The Chinese and provincial governments

have enacted a series of laws and regulations relating to the natural resources sector over the past 20 years, including laws and regulations

designed to improve safety and decrease environmental degradation.

The “China Mineral Resources Law” declares state ownership

of all mineral resources in China.

However, mineral exploration rights can be purchased, sold and transferred to both domestic

and foreign owned companies.

Mineral resource rights are granted by the central government permitting recipients to conduct mineral resource

activities in a specific area during the license period.

These rights entitle the licensee to undertake mineral resource activities

and infrastructure and ancillary work, in compliance with applicable laws and regulations, within the specific area covered by the license

during the license period.

The licensee is required to submit a proposal and feasibility studies to the relevant authority and to pay

the central government a natural resources tax levied at 8% of sales.

However, mineral exploration rights can be purchased, sold and transferred to both domestic and foreign

owned companies.

Mineral resource rights are granted by the central government permitting recipients to conduct mineral resource activities

in a specific area during the license period.

These rights entitle the licensee to undertake mineral resource activities and infrastructure

and ancillary work, in compliance with applicable laws and regulations, within the specific area covered by the license during the license

The licensee is required to submit a proposal and feasibility studies to the relevant authority and to pay the central government

a natural resources tax levied at 8% of sales.

The Company was exempt from paying the fee prior to January 1, 2008.

Shandong province has determined that bromine is to be extracted only by licensed entities.

Our mineral rights are issued by the local government

and allow for a one year period of mining.

The rights provide us with the exclusive rights to explore and extract natural brine

under the leased land and produce bromine and crude salt.

The government performs an annual inspection of the company’s previous

year’s state of production & operations at beginning of each year.

Shandong province

has determined that bromine is to be extracted only by licensed entities.

Our mineral rights are issued

by the local government and allow for a one year period of mining.

The rights provide us with the exclusive rights to explore and extract

natural brine under the leased land and produce bromine and crude salt.

The government performs an annual inspection of the company’s

previous year’s state of production & operations at beginning of each year.

The annual inspection reviews:

(1) whether the

production is safe and if any accidents occurred during the previous year;

(2) whether the natural resources tax and other taxes were

(1) whether the production

is safe and if any accidents occurred during the previous year;

(2) whether the natural resources tax and other taxes were timely paid;

(3) whether employees’ salary and welfare benefits were timely paid;

and (4) whether the Company meets environment

protection standards.

and (4) whether the Company meets environment protection standards.

Only those companies who pass the inspection receive mineral rights for another one year term.

For those companies

who do not pass the inspection, additional mineral rights are not allocated until they can meet the requirements.

If there is major safety

accident, the government may revoke the mining permit.

The mining certificate were renewed in July 2021

with production limit of 24,000 tons of bromine production per year.

On September 21, 2018, we received a closing notice

from the People’s Government of Yangkou Town, Shouguang City informing us that we had to shut down our three bromine factories (Factory

The following is a description of the land use

and mineral rights related to each of the nine properties held by SCHC as of December 31, 2023.

All of the bromine factories are under rectification

process without production.

For those companies who do not pass the

inspection, additional mineral rights are not allocated until they can meet the requirements.

If there is major safety accident, the government

may revoke the mining permit.

The mining certificate were renewed

in July 2021 with production limit of 24,000 tons of bromine production per year.

On September 21, 2018, we received

a closing notice from the People’s Government of Yangkou Town, Shouguang City informing us that we had to shut down our three bromine

factories (Factory No.

The following is a description

of the land use and mineral rights related to each of the nine properties held by SCHC as of December 31, 2024.

All of the bromine factories are under

rectification process without production.

1 – Haoyuan General Factory

103 unchanged sentences

Leased Facility

On November 5, 2010, SCHC entered into a Lease

Contract with State-Operated Shouguang Qingshuibo Farm.

Pursuant to the Lease Contract, SCHC shall lease certain property with an area

of 3,192 square meters (or 0.8 acres) and buildings adjacent to the Company’s Factory No.

On November 5, 2010, SCHC entered

into a Lease Contract with State-Operated Shouguang Qingshuibo Farm.

Pursuant to the Lease Contract, SCHC shall lease certain property

with an area of 3,192 square meters (or 0.8 acres) and buildings adjacent to the Company’s Factory No.

There are currently non-operating

bromine production facilities on the property which have not been in production for more than 12 months.

The annual lease payment

for the property is RMB 5.0 million, approximately $705,950, per year and shall be paid by SCHC no later than June 30th of each year.

The annual lease payment for

the property is RMB 5.0 million, approximately $705,950, per year and shall be paid by SCHC no later than June 30th of each year.

term of the Lease Contract is for twenty years commencing January 1, 2011.

1 unchanged sentence

twenty year period on the same terms.

The Lessor has agreed to permit SCHC to reconstruct and renovate the existing bromine

production facilities on the property.

The chart below represents the annual production

capacity and annualized utilization ratios for our bromine producing properties currently leased by the Company, which are all located

in Shouguang City, Shandong Province, China.

The Lessor has agreed to permit SCHC to reconstruct and renovate the existing bromine production

facilities on the property.

The chart below represents the

annual production capacity and annualized utilization ratios for our bromine producing properties currently leased by the Company, which

are all located in Shouguang City, Shandong Province, China.

There are no proven and probable reserves located on our properties.

1 unchanged sentence

Acquisition Date

Annual Production

April 7, 2007

7* (originally named as No.

October 25, 2007/ January 7, 2009

October 25, 2007/

January 7, 2009

September 7, 2009

Factory No.4 (originally named as Subdivision of Factory No.

Factory No.4 (originally named as Subdivision

of Factory No.

January 1, 2011

2 unchanged sentences

5 and Factory No.

7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No.

7 were combined in early 2010 as both factories

are located adjacent to each other, and renamed Factory No.

5 (which was previously considered part of Factory No.

7) as Factory No.

7 on May 2019.

The following table shows the annual bromine produced

and sold for each of our production facilities and the weighted average price received for all products sold for the last two years.

Selling price (RMB/ton)

The following table shows the

annual bromine produced and sold for each of our production facilities and the weighted average price received for all products sold for

the last two years.

Selling price

7* (originally named as No.

4 (originally know Subdivision of Factory No.

4 (originally know Subdivision

of Factory No.

* Bromine production for Factory No.

5 and Factory No.

7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No.

7 were combined in early 2010 as both factories

are located adjacent to each other, and renamed Factory No.

5 (which was previously considered part of Factory No.

7) as Factory No.

7 on May 2019.

3, 4 and 11 were demolished in September 2018.

The following table shows the annual crude salt

produced and sold for each of our production facilities and the weighted average price received for all products sold for the last two

Selling price (RMB/ton)

The following table shows the

annual crude salt produced and sold for each of our production facilities and the weighted average price received for all products sold

for the last two years.

Selling price

7* (Originally Named as No.

1 unchanged sentence

5 and Factory No.

7 were combined in early 2010 as both factories are located adjacent to each other, and renamed Factory No.

7 were combined in early 2010 as both factories

are located adjacent to each other, and renamed Factory No.

5 (which was previously considered part of Factory No.

7) as Factory No.

7 on May 2019

Our SYCI’s production facilities did not

produce or sold any chemical products for the last two years.

Our SYCI’s production facilities did not produce or

sold any chemical products for the last two years.

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 2. Properties