What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-19 compared with 2025-08-13 · 345 added, 298 removed, 455 unchanged (59% of the section changed)

85 unchanged sentences

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.

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.

The Company is still

26 unchanged sentences

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.

has been temporarily delayed and the Company will re-evaluate its chemical products strategy.

In January 2017, the

13 unchanged sentences

In April 2022, Shouguang Hengde Salt Industry

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

Ltd （ “SHSI” ） ,

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

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

On October 27, 2025, we completed a 1-for-10 reverse stock split of

our common stock, such that for each ten shares outstanding prior to the stock split there was one share outstanding after the reverse

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

Recent Developments

Acquisition Agreements

June 2024, a wholly owned subsidiary of the Company, Shouguang Hengde Salt Industry Co.

Ltd ( “SHSI”) entered into crude salt

field acquisition agreements with Shouguang Qingshuibo Farm Co., LTD.

2024, a wholly owned subsidiary of the Company, Shouguang Hengde Salt Industry Co.

Ltd ( “SHSI”) entered into crude salt field

acquisition agreements with Shouguang Qingshuibo Farm Co., LTD.

(“Seller A”), Shouguang city Yangkou town Dingjia Zhuangzi

82 unchanged sentences

Nasdaq Compliance

On May 6, 2025, the Company was notified by the

Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the Staff granted the

Company’s request to transfer the listing of its common stock, par value $0.0005 per share (the “Common Shares”), from

The Nasdaq Global Select Market tier to The Nasdaq Capital Market tier, and that the Staff granted the Company’s request for a second

180-calendar day period, or until November 3, 2025 (the “Second Compliance Period”), to regain compliance with the $1.00 bid

The Company received a notice

(the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) on

April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal

year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company is not in compliance with Nasdaq’s continued

listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely filing of all required periodic

reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to

the Company’s non-compliance with the Rule as a result of the Company’s failure to timely file its Quarterly Report on Form

10-Q for the fiscal quarter ended March 31, 2024 (the “Form 10-Q”, together with the Form 10-K, the “Delinquent Reports”).

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

As previously announced, on November 5, 2024, the

Staff notified the Company that the bid price for the Common Shares no longer satisfied Nasdaq Listing Rule 5450(a) (1), the minimum bid

price requirement applicable to The Nasdaq Global Select Market issuers.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was

afforded an initial 180-calendar day grace period, through May 5, 2025, to regain compliance with the minimum bid price requirement.

Issuers listed on The Nasdaq Global Select Market are not eligible

for a second 180-day grace period under the Nasdaq Listing Rules.

However, based upon the Company’s compliance with the various

criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers listed on

The Nasdaq Capital Market, the Company applied to transfer the listing of its Common Shares to The Nasdaq Capital Market.

As noted above,

the Staff approved the Company’s transfer application on May 6, 2025.

The Company has provided written notice to Nasdaq of its intention

to cure the deficiency during the Second Compliance Period by effecting a reverse stock split, if necessary.

On May 6, 2025, the

Company was notified by the Nasdaq that the Company’s request to transfer the listing of its Common Stock, from The Nasdaq

Global Select Market tier to The Nasdaq Capital Market tier has been granted, and that the Company was granted a second 180-calendar

day period, or until November 3, 2025 (the “Second Compliance Period”), to regain compliance with the requisite bid

price requirement, as set forth in Nasdaq Listing Rule 5550(a)(2).

To regain compliance with such minimum price requirement, the Company

must evidence a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

The transfer of the listing

of the Common Shares from The Nasdaq Global Select Market to The Nasdaq Capital Market took effect with the open of business on May 8,

The transfer is not expected to impact trading in the Common Shares, which will continue to trade on Nasdaq under the symbol “GURE.”

As previously announced, on November 5, 2024,

the Staff notified the Company that the bid price for the Common Shares had closed below $1.00 per share for 30 consecutive business days

and, as a result, the Company no longer satisfied Nasdaq Listing Rule 5450(a)(1), the minimum bid price requirement applicable to The

Nasdaq Global Select Market issuers.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was afforded an initial 180-calendar day

grace period, through May 5, 2025, to regain compliance with the minimum bid price requirement.

Issuers listed on The Nasdaq Global Select Market

are not eligible for a second 180-day grace period under the Nasdaq Listing Rules.

However, based upon the Company’s compliance

with the various criteria required under Nasdaq Listing Rule 5810(c)(3)(A)(ii) to obtain a second 180-day grace period applicable to issuers

listed on The Nasdaq Capital Market, the Company applied to transfer the listing of its Common Shares to The Nasdaq Capital Market.

noted above, the Staff approved the Company’s transfer application on May 6, 2025.

The Company intends to closely monitor the closing

bid price for its Common Shares and consider all available options to timely remedy the bid price deficiency.

If at any time during the

Second Compliance Period, the closing bid price of the Common Shares is at least $1.00 per share for a minimum of 10 consecutive business

days, the Staff will provide the Company with written confirmation of compliance and the matter will be closed ,

unless the Staff exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H) .

The Company can give no assurance that it will

regain or demonstrate compliance during the Second Compliance Period.

If the Company is not able to demonstrate compliance with the minimum

bid price requirement by November 3, 2025, or the Company does not comply with the terms of the extension, the Staff will provide written

notification to the Company that the Common Shares will be delisted.

At that time, the Company may appeal the Staff’s determination

to the Nasdaq Hearings Panel (the “Panel”).

The Company’s appeal request would stay any delisting action by the Staff

at least pending a hearing before the Panel and the expiration of any extension that may be granted by the Panel to the Company following

The Company has provided written notice to Nasdaq

of its intention to cure the deficiency during the Second Compliance Period by effecting a reverse stock split, if necessary.

The transfer of the listing of the Common Shares from The Nasdaq

Global Select Market to The Nasdaq Capital Market took effect with the open of business on May 8, 2025.

The transfer is not expected

to impact trading in the Common Shares, which will continue to trade on Nasdaq under the symbol “GURE.”

On November 12, 2025, the Company issued a press release providing

certain updates on its hearing scheduling process with the Nasdaq Hearings Panel.

The Company has received a hearing notification letter

from Nasdaq scheduling an oral hearing for December 9, 2025.

As of November 10, 2025, the Company’s common stock had maintained

the requisite closing bid price in compliance with Listing Rule 5550(a)(2).

In light of the above and in accordance with the instructions

provided by the hearing notification letter, the Company has submitted a request to cancel the hearing, subject to the Company’s

Listing Analyst review and confirmation.

Our current corporate structure chart is set forth in the following

5 unchanged sentences

The following table presents certain information

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

periods ended June 30, 2025 and 2024.

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

periods ended September 30, 2025 and 2024.

Comparison of the Three-Month Period Ended

June 30, 2025 and 2024

September 30, 2025 and 2024

Three-Month Period

Ended June 30, 2025

Ended September

Three-Month Period

Ended June 30, 2024

Percent Change

Increase/ (Decrease)

Ended September

Percent Change Increase/

Cost of net revenue

6 unchanged sentences

Other expense, net

Loss on disposal of property, plant and equipment

Loss on disposal of long-lived assets

Impairment of long-lived assets

(29,782,912 )

3 unchanged sentences

$ (35,664,512 )

Net Loss of $773,777 for the three-month periods

ended June 30, 2025 was mainly attributable to increased General and administrative expenses.

$ (3,492,883 )

Net Loss of $35,664,512 for the three-month periods

ended June 30, 2024 was mainly attributable to decreased sales and reduced margins.

The company also suffered a loss of $29,169,008 on

retirement of fixed assets .

below shows the changes in net revenue in the respective segment of the Company for the three-month period ended June 30, 2025 as compared

to the same period in 2024:

ended September 30, 2025.

The increase in net loss was mainly due to a rise

of 2,008,853 in loss on disposal of long-lived assets, a rise of 29,782,912 in impairment of long-lived assets, and an increase of 3,521,613

in provision accrued liabilities.

below shows the changes in net revenue in the respective segment of the Company for the three-month period ended September 30, 2025 as

compared to the same period in 2024:

Net Revenue by Segment

2 unchanged sentences

Percent Change

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

of Net Revenue

Chemical Products

Bromine and crude salt segments

Three-Month Period Ended

Percentage Change

Bromine and crude salt segments

product sold in tonnes

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Increase (Decrease)

Bromine segment

For the three-month periods ended June 30, 2025 and 2024, the net revenue

for the bromine segment was $7,676,374 and $1,859,234, respectively.

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

in selling prices and tonnes sold of bromine in the second quarter of 2025.

The sale price of bromine in the second quarter of 2025

was 64% higher than in the second quarter of 2024, and the quantity sold was 152% higher than in the second quarter of 2024.

For the three-month periods ended September 30, 2025 and 2024, the

net revenue for the bromine segment was $8,052,331 and $1,571,313, respectively.

The increase of the net revenue of bromine was due to

the 238% increase in tonnes sold and the 52% increase in average selling price of bromine in the third quarter of 2025.

selling price of bromine in the third quarter of 2025 was $3,637 compared to the average selling price of bromine in the third quarter

of 2024 of $2,396 (calculated by dividing revenue by tonnes).

Crude salt segment

For the three-month periods ended June 30, 2025 and 2024, the net revenue

for the crude salt was $667,411 and $523,935, respectively.

The increase of net revenue of crude salt was mainly due to 22% increase in

average selling price of crude salt for the three-month period ended June 30, 2025.

For the three-month periods ended September 30, 2025 and 2024, the

net revenue for the crude salt was $992,250 and $654,039, respectively.

The increase of net revenue of crude salt was mainly due to the

58% increase in tonnes sold and the 4% decrease in average selling price of crude salt for the three-month period ended September 30,

Chemical products segment

For the three-month periods ended June 30, 2025

For the three-month periods ended September 30,

2025 and 2024, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1,

Natural gas segment

For the three-month period ended June 30, 2025

and 2024, the net revenue for the natural gas production was $0.

For the three-month period ended September 30,

2025 and 2024, the net revenue was $0 and $17,013.

The decrease in income was due to the fact that the relevant documents

of the client were incomplete, which prevented us from continuing the cooperation.

Cost of Net Revenue

3 unchanged sentences

Three-Month Period Ended

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Chemical Products

Cost of net revenue reflects mainly

the raw materials consumed and the direct salaries and benefits of staff engaged in the production process, electricity, depreciation

Cost of net revenue reflects

mainly the raw materials consumed and the direct salaries and benefits of staff engaged in the production process, electricity, depreciation

and amortization of manufacturing plant and machinery and other manufacturing costs.

Our cost of net revenue was $7,357,130 for the

three-month period ended June 30, 2025, an increase of $2,245,072 (or 44%) as compared to the same period in 2024 due to the increase

of net revenue by 250% for the three-month period ended June 30, 2025 as compared to the same period in 2024 .

Our cost of net revenue was $7,996,785 for the three-month

period ended September 30, 2025, an increase of $3,925,169 (or 96%) as compared to the same period in 2024 due to the increase of net

revenue by 303% for the three-month period ended September 30, 2025 as compared to the same period in 2024.

Bromine production capacity and utilization

3 unchanged sentences

Annual Production Capacity (in tonnes)

Three-month period ended June 30, 2024

Three-month period ended June 30, 2025

Variance of the three-month period ended June 30, 2025 and 2024

(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.

Three-month period ended September 30, 2024

Three-month period ended September 30, 2025

Variance of the three-month period ended September 30, 2025 and 2024

(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 June 30, 2025,

the cost of net revenue for the bromine segment was $7,016,815.

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 September 30, 2025 and

2024 the cost of net revenue for the bromine segment was $7,666,463 and $3,794,088, respectively.

The increase in costs is mainly due

to the increase in sales volume.

Crude salt segment

For the three-month period ended June 30, 2025 the cost of net revenue

for the crude salt segment was $340,315.

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 September 30, 2025 and 2024 the cost of net revenue for the crude salt segment was $330,322 and $277,451, respectively.

in costs is mainly due to the increase in sales volume.

Chemical products segment

Cost of net revenue for our chemical products

segment for the three-month period ended June 30, 2025 and 2024 was $0.

segment for the three-month period ended September 30, 2025 and 2024 was $0.

Natural gas segment

Cost of net revenue for our natural gas segment

for the three-month period ended June 30, 2025 and 2024 was $0.

Cost of net revenue for

our natural gas segment for the three-month period ended September 30, 2025 and 2024 was $0 and 77, respectively.

The decrease in

income was due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the

Gross Profit (Loss) .

was $986,655, or 115%, of net revenue for the three-month period ended June 30, 2025, representing a increase of $3,715,544, as compared

was $1,047,796 or12%, of net revenue for three-month period ended September 30, 2025, representing an increase of $2,877,047, as compared

to a gross loss of $1,829,251 or 82%, of net revenue for the same period in 2024.

3 unchanged sentences

Three-Month Period Ended

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Profit Margin

Gross Profit Margin

Gross Profit (loss) Margin

$ (2,222,775 )

Chemical Products

Total Gross Profit

Total Gross Profit (Loss)

$ (1,829,251 )

Bromine segment

For the three-month period ended June 30, 2025,

the gross profit margin for our bromine segment was 9%, compared to gross loss margin of 154% in the three-month period ended June 30,

The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,892 per ton

in the three-month period ended June 30, 2025 compared to $2,379 per ton in the three-month period ended June 30, 2024 and the number

of sales was up 152% from the second quarter of 2024.

For the three-month period ended September 30,

2025, the gross profit for our bromine segment was 5%, compared to gross loss margin of 141% in the three-month period ended September

The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,637 per

ton in the three-month period ended September 30, 2025 compared to $2,396 per ton in the three-month period ended September 30, 2024 and

the number of sales was up 238% from the second quarter of 2024.

Crude salt segment

For the three-month period ended June 30, 2025,

the gross profit margin for our crude salt segment was 49%.

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

For the three-month period ended

September 30, 2025, the gross profit margin for our crude salt segment was 67%.

The increase of net revenue of crude salt was mainly due

to the 58% increase in tonnes sold and the 4% decrease in average selling price of crude salt for the three-month period ended September

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

the gross profit margin for our crude salt segment was 58%.

Natural g as segment

Gross profit for our natural gas segment for the three-month

period ended September 30, 2025 and 2024 was $0 and $16,936 respectively.

The decrease in income was due to the fact that the relevant

documents of the client were incomplete, which prevented us from continuing the cooperation.

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 $580,178 and

$1,714,503 incurred for the three-month periods ended June 30, 2025 and 2024, respectively, for the factories that have not resumed production

were presented as part of the operating expenses.

$1,736,345 incurred for the three-month periods ended September 30, 2025 and 2024, respectively, of factories that have not resumed production

were presented as part of the operating expense.

General and Administrative Expenses

General and administrative expenses were $994,765 for the three-month period ended June 30, 2025, representing an increase of $304,793

General and administrative expenses were $785,533 for the three-month period ended September 30, 2025, representing an decrease of $216,966

as compared to $1,002,529 for the same period in 2024.

Loss from Operations Loss from operations

was $750,686 for the three-month period ended June 30, 2025, compared to loss from operations of $5,146,997 in the same period in 2024.

Income (loss) from Operations by Segment

Loss from Operations Loss from operations was $333,928

for the three-month period ended September 30, 2025, compared to loss from operations of $4,581,609 in the same period in 2024.

Loss from Operations by Segment

Three-Month Period Ended

June 30, 2025

September 30, 2025

Three-Month Period Ended

June 30, 2024

September 30, 2024

$ (4,029,999 )

5 unchanged sentences

Bromine segment

Loss from operations from our bromine segment

was $130,381 for the three-month period ended June 30, 2025, compared to loss from operations of $4,662,586 in the same period in 2024.

This decrease was due to a 152% increase in tonnes sold and a 64% increase in average selling price.

Loss from operations from our bromine segment was $274,496 for the

three-month period ended September 30, 2025, compared to loss from operations of $4,029,999 in the same period in 2024.

The increase of

the net revenue of bromine was due to the 238% increase in tonnes sold and the 52% increase in average selling price of bromine in the

third quarter of 2025.

Crude salt segment

Loss from operations from our crude salt segment

was $147,489 for the three-month period ended June 30, 2025, compared to income from operations of $130,024 in the same period in 2024.

Income from operations from our crude salt segment

was $453,824 for the three-month period ended September 30, 2025, compared to loss from operations of $102,657 in the same period in 2024.

The increase of net revenue of crude salt was mainly due to the 58% increase in tonnes sold and the 4% decrease in average selling price

of crude salt for the three-month period ended September 30, 2025.

Chemical products segment

Loss from operations from our chemical products

segment was $344,947 for the three-month period ended June 30, 2025, compared to loss from operations of $339,254 in the same period in

segment was $352,371 for the three-month period ended September 30, 2025, compared to loss from operations of $339,038 in the same period

Natural gas segment

Loss from operations from our natural gas segment

was $43,225 for the three -month period ended June 30, 2025, compared to a loss from operations of $73,773 in the same period in 2024.

Interest Income (Loss), Net Other

loss, net of 19,879 represented bank interest income, net of finance lease interest expense for the three-month period ended June 30,

2025, a decrease of $29,856 as compared to the same period in 2024.

Loss on disposal of property, plant and equipment.

on disposal of property, plant and equipment was $29,169,008 in the fiscal year 2024.

In June 2024, considered the bromide well and transmission

channel have been in use for many years, the Company conducted a site inspection and found that some wells and channels were seriously

damaged by water seepage which in turn required write-off or new construction, and the write-off amount is $29,169,008.

Net Income (loss) Net loss was $773,777

for the three-month period ended June 30, 2025, compared to a net loss of $33,097,918 in the same period in 2024.

Comparison of the Six-Month Period Ended

June 30, 2025 and 2024

Six-Month Period

Ended June 30, 2025

Six-Month Period

Ended June 30, 2024

was $39,781 for the three -month period ended September 30, 2025, compared to a loss of $39,072 in the same period in 2024.

Interest income, net

Interest income, net of $17,206 represented bank interest income, net of finance lease interest expense for the three-month period ended

September 30, 2025, an increase of $2,235 as compared to the same period in 2024.

Other Expenses, net

As the company was the joint guarantor party for the

debts of Shandong Shouguang Vegetable Industry Group Co., Ltd.

and Shandong Shouguang Vegetable Seed Group Co., Ltd.

Currently, the Vegetable Group is unable to repay the debt.

As the joint liability party, our company has to accrue a provision

of $3,521,613.

Loss on Disposal of Long-lived Assets

As the company was the joint responsible party for the debts

of the Vegetable Group, the court auctioned the idle land and the attached properties on it of SYCI, resulting in a total asset disposal

loss of $2,008,853.

Impairment of Long-lived Assets

The court engaged a third-party valuer for evaluation

of the land at xiangjiang road, yangkou town ,shouguang city and its attached properties.

The valuation report returned a fair value of

The Company recognized an impairment loss of $29,782,912 accordingly.

Net Loss Net loss was $35,664,512 for the

three-month period ended September 30, 2025, compared to a net loss of

$3,492,883 in the same period in 2024.

Comparison of the Nine-Month Period Ended

September 30, 2025 and 2024

September 30,

Percent Change

Cost of net revenue

(16,948,185 )

(11,303,519 )

Gross profit (loss)

6 unchanged sentences

Other expense,net

Loss on disposal of property, plant and equipment

Loss from asset disposal

(29,169,008 )

Impairment of long-lived assets

(29,782,912 )

Loss before taxes

(41,067,789 )

Income tax benefit

(44,164,800 )

Income tax benefit (expense)

$ (41,067,789 )

Net Loss of $5,403,277 for the six-month periods

ended June 30, 2025 was mainly attributable to increased General and administrative expenses.

Net Loss of $37,090,050 for the six-month periods

ended June 30, 2024 was mainly attributable to decreased sales and reduced margins.

The company also suffered a loss of $29,169,008 on

retirement of fixed assets .

below shows the changes in net revenue in the respective segment of the Company for the six-month period ended June 30, 2025 as compared

to the same period in 2024:

$ (40,582,933 )

below shows the changes in net revenue in the respective segment of the Company for the nine-month period ended September 30, 2025 as

compared to the same period in 2024:

Net Revenue by Segment

Six-Month Period Ended

Nine-Month Period Ended

Percent Increase

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

of Net Revenue

1 unchanged sentence

Bromine and crude salt segments

Six-Month Period Ended

Nine-Month Period Ended

Percentage Change

product sold in tonnes

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Bromine (excluding volume sold to SYCI)

Bromine segment

Net revenue from our bromine segment increased

to $9,158,243 for the six-month period ended June 30, 2025 compared to $3,005,431 for the same period in 2024 due to the higher selling

price of bromine and tonnes sold of bromine.

Net revenue from our bromine segment increased to $17,210,574 for the

nine-month period ended September 30, 2025 compared to $4,576,744 for the same period in 2024 due to the higher selling price of bromine

and tonnes sold of bromine.

Crude salt segment

Net revenue from our crude salt segment increased

to $789,989 for the six-month period ended June 30, 2025 compared $640,606 for the same period in 2024 due to the higher selling tonnes

of crude salt.

to $1,782,239 for the nine-month period ended September 30, 2025 compared $1,294,645 for the same period in 2024, respectively, due to

the higher selling quantity.

Chemical products segment

For the six-month period ended June 30, 2025 and

2024, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.

For the nine-month period ended September 30,

2025 and 2024, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1,

Natural gas segment

For the six-month period ended June 30, 2025 and 2024, the net revenue

for the natural gas production was $0 and $44,194, respectively.

The 100% decrease in revenue was primarily due to the expiration of contracts.

For the nine-month period

ended September 30, 2025 and 2024, the net revenue for the natural gas was $0 and $61,207,respectively.

The decrease in income was

due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the cooperation.

Cost of Net Revenue

Cost of Net Revenue by Segment

Six-Month Period Ended

June 30, 2025

June 30, 2024

Nine-Month Period Ended

September 30, 2025

September 30, 2024

Chemical Products

Cost of net revenue reflects mainly the raw materials consumed-direct

salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing plant and

machinery and other manufacturing costs.

Our cost of net revenue was $8,951,400 for six-month period ended June 30, 2025, representing

a $1,719,497 (or 24%) increase compared to the six-month period ended June 30, 2024.

The increase in costs was mainly due to a significant

increase in sales volume.

Cost of net revenue reflects mainly the raw materials

consumed-direct salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing

plant and machinery and other manufacturing costs.

Our cost of net revenue was $16,948,185 for nine-month period ended September 30, 2025,

representing a $5,644,666 (or 50%) increase compared to the nine- month period ended September 30, 2025.

The increase in costs was mainly

due to a significant increase in sales volume.

Bromine production capacity and utilization

3 unchanged sentences

Annual Production Capacity (in tonnes)

Six-month period ended June 30, 2024

Six-month period ended June 30, 2025

Variance of the six-month period ended June 30, 2025 and 2024

Nine-month period ended September 30, 2024

Nine-month period ended September 30, 2025

Variance of the nine-month period ended September 30, 2025 and 2024

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 six-month period ended June 30, 2025,

the cost of net revenue for the bromine segment was $8,549,943.

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, 2025 and 2024

the cost of net revenue for the bromine segment was $16,216,406 and $10,595,899, respectively.

The increase in costs is mainly due to

the increase in sales volume.

Crude salt segment

For the six-month period ended June 30, 2025,

the cost of net revenue for the crude salt segment was $401,457.

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

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

Chemical products segment

Cost of net revenue for our chemical products

segment for the six-month period ended June 30, 2025 and 2024 was $0.

For the nine-month period ended

September 30, 2025 and 2024 the cost of net revenue for the crude salt segment was $731,779 and $707,344, respectively.

The increase in

costs is mainly due to the increase in sales volume.

Natural gas segment

Cost of net revenue for our natural gas segment

for the six-month period ended June 30, 2025 and 2024 was $0 and $199, respectively.

Gross Profit (Loss).

was $996,832, or 10%, of net revenue for six-month period ended June 30, 2025 compared to a loss of $3,541,672, or 96%, of net revenue

for the same period in 2024.

Cost of net revenue for our natural gas segment for

the nine-month period ended September 30, 2025 and 2024 was $0 and $276, respectively.

The decrease in income was due to the fact that

the relevant documents of the client were incomplete, which prevented us from continuing the cooperation.

Gross Profit.

Income profit was

$2,044,628, or 10.8%, of net revenue for nine-month period ended September 30, 2025 compared to gross loss $5,370,923, or 91%, of net

revenue for the same period in 2024.

Gross Profit (Loss) by Segment

% Point Change

Six-Month Period Ended

June 30, 2025

June 30, 2024

Nine-Month Period Ended

September 30, 2025

September 30, 2024

Profit Margin

3 unchanged sentences

Chemical Products

Total Gross Profit

Total Gross Profit(Loss)

$ (5,370,923 )

Bromine segment

For the six-month period ended June 30, 2025,

the gross profit margin for our bromine segment was 6.7%, compared to gross loss margin of 126% in the six-month period ended June 30,

The increase in gross profit margin was primarily attributable to the higher average selling price of bromine of $3,857 per ton

in the six-month period ended June 30, 2025 compared to $2,438 per ton in the six-month period ended June 30, 2024.

For the nine-month period ended September 30,

2025, the gross profit margin for our bromine segment was 6%, compared to gross loss margin of 132% in the nine-month period ended September

The increase in gross loss margin was primarily attributable to the higher average selling price of bromine of $3,751 per ton

in the nine-month period ended September 30, 2025 compared to $2,423 per ton in the nine-month period ended September 30, 2024.

Crude salt segment

For the six-month period ended June 30, 2025,

For the nine-month period ended September 30, 2025,

the gross profit margin for our crude salt segment was 59%.

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

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

For the nine-month period ended September 30, 2024 the gross profit margin

for our crude salt segment was 45%.

Chemical products segment

For the six-month period ended June 30, 2025,

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

As a result, there were no chemical products for sale for the six-month period ended June 30, 2025.

For the nine-month period ended September 30,

2025, the gross profit margin for our chemical segment was 0% due to the closure of our chemical products plant.

As a result of the closure,

there were no chemical products for sale for the nine-month period ended September 30, 2025.

Natural gas segment

Gross profit for our natural gas segment for the

six-month period ended June 30, 2025 and 2024 was $0 and $43,995 respectively.

Gross profit for our

natural gas segment for the nine-month period ended September 30, 2025 and 2024 was $0 and $60,931 respectively.

The decrease in

income was due to the fact that the relevant documents of the client were incomplete, which prevented us from continuing the

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 $4,533,760

and $5,449,192 incurred for the three-month periods ended June 30, 2025 and 2024, respectively, for the factories that have not resumed

and $7,185,537 incurred for the nine-month periods ended September 30, 2025 and 2024, respectively, for the factories that have not resumed

production were presented as part of the operating expense.

General and Administrative Expenses.

General and administrative expenses were $2,384,288 for the six-month period ended June 30, 2025, a increase of $976,860 (or 69%) as compared

to $1,407,428 for the same period in 2024.

General and administrative expenses were $3,169,821 for the nine-month period ended September 30, 2025, an increase of $759,864 (or 32%)

as compared to $2,409,957 for the same period in 2024.

The increase in administrative expenses is mainly due to the increase in depreciation.

Loss from Operations.

operations was $5,360,893 for the six-month period ended June 30, 2025, compared to loss from operations of $10,416,416 in the same period

Income(loss) from Operations by Segment

Six-Month Period Ended

June 30, 2025

Six-Month Period Ended

June 30, 2024

operations was $5,694,821 for the nine-month period ended September 30, 2025, compared to a loss of $14,998,025 in the same period in

Loss from Operations by Segment

Nine-Month Period Ended

September 30, 2025

Nine-Month Period Ended

September 30, 2024

$ (3,775,713 )

9 unchanged sentences

Loss from operations from our bromine segment

was $3,501,217 for the six-month period ended June 30, 2025, compared to an loss from operations of $9,445,401 in the same period in 2024.

This decrease was due to a 93% increase in tonnes sold and a 58% increase in average selling price.

was $3,775,713 for the nine-month period ended September 30, 2025, compared to a loss of $13,475,400 in the same period in 2024.

in gross loss margin was primarily attributable to the higher average selling price of bromine of $3,751 per ton in the nine-month period

ended September 30, 2025 compared to $2,423 per ton in the nine-month period ended September 30, 2024.

Crude salt segment

Loss from operations from our crude salt segment

was $701,551 for the six-month period ended June 30, 2025, compared to an income from operations of $54,932 in the same period in 2024.

The increase in operating losses was mainly due to the depreciation resulting from the new acquisition of crude salt assets in 2024.

Loss from operations from our crude salt segment was

$247,727 for the nine-month period ended September 30, 2025, compared to a loss of $47,725 in the same period in 2024.

The increase in

operating losses is mainly due to the increase in administrative expenses.

Chemical products segment

Loss from operations from our chemical products

segment was $703,576 for the six-month period ended June 30, 2025, compared to a loss from operations of $654,078 in the same period in

Natural gas segment

Loss from operations from our chemical products segment

was $1,055,947 for the nine-month period ended September 30, 2025, compared to a loss of $993,116 in the same period in 2024.

Natural g as segment

Loss from operations from our natural gas segment

was $88,099 for the six-month period ended June 30, 2025, compared to a loss from operations of $101,482 in the same period in 2024.

was $127,880 for the nine-month period ended September 30, 2025, compared to a loss of $140,554 in the same period in 2024.

Interest Income (Loss), Net.

loss, net of $39,172 represented bank interest income, net of finance lease interest expense for the six -month period ended June 30,

income, net of $56,378 represented bank interest income, net of finance lease interest expense for the nine -month period ended September

30, 2025, a decrease of $62,614 as compared to the same period in 2024.

Net Income (Loss).

$5,403,277 for the six-month period ended June 30, 2025, compared to a net loss of $37,090,050 in the same period in 2024.

Loss on disposal of property, plant and equipment.

on disposal of property, plant and equipment was $29,169,008 in the fiscal year 2024.

In June 2024, considered the bromide well and transmission

channel have been in use for many years, the Company conducted a site inspection and found that some wells and channels were seriously

damaged by water seepage which in turn required write-off or new construction, and the write-off amount is $29,169,008.

Other Expenses, net

As the company was the joint guarantor party for the

debts of the Vegetable Group.

Currently, the Vegetable Group is unable to repay the debt.

As the joint liability party, our company has

to accrue a provision of $3,524,825.

Loss on Disposal of Long-lived Assets

As the company was the joint responsible party for

the debts of the Vegetable Group, the court auctioned the idle land and the attached properties on it of SYCI, resulting in a total asset

disposal loss of $2,008,853.

Impairment of Long-lived Assets

The court engaged a third-party valuer for evaluation

of the land at xiangjiang road, yangkou town ,shouguang city and its attached properties.

The valuation report returned a fair value of

The Company recognized an impairment loss of $29,782,912 accordingly.

Net loss was $41,067,789

for the nine-month period ended September 30, 2025, compared to a net loss of $40,582,933 in the same period in 2024.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2025, cash and cash equivalents

As of September 30, 2025, cash and cash equivalents

were $5,820,083 as compared to $10,075,162 as of December 31, 2024.

1 unchanged sentence

Statement of Cash Flows

Six-Month Period Ended June 30,

Net cash used in provided by operating activities

$ (2,139,435 )

Net cash provided by (used in) investing activities

Nine-Month Period Ended September 30,

Net cash provided by (used in) operating activities

Net cash used in investing activities

(60,526,213 )

2 unchanged sentences

Net increase (decrease) in cash and cash equivalents

For the six-month period ended June 30, 2025,

$ (4,255,079 )

$ (60,986,401 )

For the nine-month period ended September 30,

2025, we met our working capital and capital investment requirements by using cash on hand.

Net Cash used in Operating Activities

During the six-month period ended June 30, 2025,

cash flow used in operating activities of approximately $2.14 million was mainly due to a net loss of $5.4 million, a decrease in accounts

receivable of $2.58 million, and offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment

of $8 million, adecreases in prepayment and deposits of $2.33 million.

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.

Net Cash provided by (used in) Operating Activities

During the nine-month period ended September 30, 2025, cash

flow provided by operating activities of approximately $4.57 million was mainly due to a non-cash adjustment related to depreciation and

amortization of property, plant and equipment of $11.75 million, a loss on disposal of long-lived assets of $2 million, a impairment of

long-lived assets of 29.78 million, and offset by a net loss of $41.07 million, a decrease in accounts receivable of $2.83 million.

During the nine-month period ended September 30, 2024, cash flow used

in by operating activities of approximately $0.29 million was mainly due to a net loss of $40.58 million, a decrease in deferred taxes

of $3.62 million and offset by depreciation and amortization expense of $14.04 million and loss on disposal of equipment of $29.17 million.

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 June 30, 2025

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

2025 and December 31, 2024.

June 30, 2025

September 30, 2025

December 31, 2024

7 unchanged sentences

Aged 211-240 days

The overall accounts receivable balance as of June 30, 2025 increased

The overall accounts receivable balance as of September 30, 2025 increased

by $2,858,041, as compared to those of December 31, 2024.

3 unchanged sentences

Our inventory consists of the following:

June 30, 2025

September 30, 2025

December 31, 2024

1 unchanged sentence

Finished goods

The net inventory level as of June 30, 2025 increased

by $199,642 (or 63%), as compared to the net inventory level as of December 31, 2024.

The increase in inventory is due to the growth in

current sales volume.

Raw materials increased by $26,935 as of June

The net inventory level

as of September 30, 2025 increased by $167,341, as compared to the net inventory level as of December 31, 2024.

The main reason for

the increase in inventory is to ensure the timely demands of customers, thereby increasing the stock.

Raw materials increased by $20,260 as of September

30, 2025 as compared to December 31, 2024.

Our finished goods increased by $147,081 as of

June 30, 2025 as compared to December 31, 2024.

September 30, 2025 as compared to December 31, 2024.

Net Cash Used in Investing Activities

During the six-month period ending on June 30,

2025, we spent approximately $0.

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.

During the nine months ended September 30, 2025, the Company carried

out and completed an update and renovation on them during year 2025, with a total cost of $8,673,384.

For the nine-month period ended September 30,

2024, we used approximately $60.5 million to the flood prevention project aiming to prevent flooding that could harm the wells, aqueducts

and crude salt pans at our plant.

Net Cash Used in Financing Activities

For the six-month period ended June 30, 2025 and

2024, we used $0.3 million to fulfil finance lease obligations.

For the nine-month period ended September 30,

2025 and 2024, we used $0.3 million to repay finance lease obligations.

We believe that our available funds and cash flows

2 unchanged sentences

We had available cash of approximately $5.82 million

at June 30, 2025, all which is in highly liquid current deposits earning no or little interest.

We do not anticipate paying cash dividends

in the foreseeable future.

at September 30, 2025, 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.

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, 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

key personnel, risks associated with unanticipated events, risks associated with the 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 operations.

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

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.

Contractual Obligations and Commitments

We have no significant contractual obligations

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 June 30, 2025 is provided in the notes to our consolidated financial

See “Notes to Condensed Consolidated Financial Statements.

We have no significant contractual obligations not fully recorded on

our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements.

Additional information regarding

our contractual obligations and commitments at September 30, 2025 is provided in the notes to our consolidated financial statements.

“Notes to Condensed Consolidated Financial Statements.

Material Off-Balance Sheet Arrangements

15 unchanged sentences

income taxes, and loss contingencies.

These policies and estimates are described in the Company’s Form 10-Q for the six months ended

June 30, 2025.

These policies and estimates are described in the Company’s Form 10-Q for the nine months

ended September 30, 2025.

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).

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