What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-28 compared with 2025-11-19 · 331 added, 657 removed, 143 unchanged (87% of the section changed)

5 unchanged sentences

21E of the Exchange Act.

We have used words such as “believes,” “intends,” “anticipates,”

“expects” and similar expressions to identify forward-looking statements.

These statements are based on information currently

available to us and are subject to a number of risks and uncertainties that may cause our actual results of operations, financial condition,

cash flows, performance, business prospects and opportunities and the timing of certain events to differ materially from those expressed

in, or implied by, these statements.

Except as expressly required by the federal securities laws, we undertake no obligation

to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future

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 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

We have used words such as “believes,” “intends,” “anticipates,” “expects”

and similar expressions to identify forward-looking statements.

These statements are based on information currently available to us and

are subject to a number of risks and uncertainties that may cause our actual results of operations, financial condition, cash flows, performance,

business prospects and opportunities and the timing of certain events to differ materially from those expressed in, or implied by, these

Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly

announce the results of any of the forward-looking statements contained herein to reflect future 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 produce and trade crude salt.

We are one of the

largest producers of bromine in China, as measured by production output.

Elemental bromine is used to manufacture a wide variety of bromine

compounds used in industry and agriculture.

Bromine also is used to form intermediary chemical compounds such as Tetramethylbenzidine.

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

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.

Bromine and Crude Salt

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

3 unchanged sentences

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

of stringent environmental rules that were adopted in early 2017 to ensure corporations bring their facilities up to necessary standards

so that pollution and other negative environmental issues are limited and remediated, could have an impact on our business in both the

8 unchanged sentences

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 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

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 producers in Shouguang, initiated negotiations 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.

agencies acknowledged the fact that their initial requirements for the bromine industry did not include the project, the planning and

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

The Company understood from

the local government that local government was coordinating with various government agencies to solve these three outstanding approval

issues in a timely manner and that all impacted bromine plants will not be allowed to commence production prior to obtaining those approvals.

In February 2019, the Company received a notification from the local government of Yangkou County that its Factories No.

9 passed inspection and were allowed to 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.

9 in order to meet the needs of bromide products for epidemic prevention and control.

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

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

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.

Subsequently, the Company received approval

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

Further, the Company received another approval from the Shouguang Yangkou People’s Government dated on March 5, 2020, to resume

production at its bromine factories No.1, No.

4, No.7 and No.

9 in order to meet the needs of bromide products for epidemic prevention

and control (the “March 2020 Approval”).

The Company’s factories No.7 and No.1 started trial production in middle-March

2020, and commenced commercial production on April 3, 2020.

The Company received oral notification

from the government regarding Factory No.

8, allowing it to resume production in August 2022.

Factory No.8 began contributing revenue

in the fourth quarter of 2022.

The Company is awaiting governmental approval

for Factories No.

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

As a result, we may be required to make certain modifications to our existing wells and aqueducts prior to commencement of operations

of these factories in order to satisfy the local government's requirements.

The Company completed its flood prevention project in December

This project was implemented for safeguarding its bromine facilities.

Pursuant to the notification from the

government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024, until February

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

preparation operations at the bromine and crude salt factories as scheduled in February 2025.

Chemical Products

On November 24, 2017, the Company received

a letter from the People’s Government of Yangkou County, Shouguang City notifying the Company that due to the new standards and

regulations relating to safety production and environmental pollution, from certain local governmental departments, such as the municipal

environmental protection department, the security supervision department and the fire department, its chemical enterprises would have

to be relocated to a new industrial park called Bohai Marine Fine Chemical Industry Park.

Although our chemical companies were in compliance

with regulations, they were also close to a residential area.

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

Chemical companies

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

Since our factories closed, the Company has secured

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

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

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

The Company began the construction

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

The construction was expected to take

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

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

The Company has received the refrigeration and

air compressor units.

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

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

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 trading.

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

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

the reverse stock split.

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

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

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

Ltd ( “SHSI”) entered into crude salt field

acquisition agreements with Shouguang Qingshuibo Farm Co., LTD.

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

village stock economic cooperative (“Seller B”), Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative

(“Seller C”), Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative (“Seller D”), and

Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative (“Seller E”), respectively, as amended in December

A summary of these agreements are set forth below:

June 26, 2024, SHSI entered into an acquisition agreement with Seller A, pursuant to which Seller A agrees to transfer to SHSI, and SHSI

agrees to purchase, 2,380,000 square meters of crude salt field (including the land lease fee) for RMB54.40 per square meter, with the

total transfer price of RMB129,472,000.

The term of transfer is from June 29, 2024 to June 28, 2044.

80% of the transfer price shall be

paid upon the execution of the agreement, and the remaining 20% shall be paid in shares of common stock of the Company within three months

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

Subsequently,

on December 17, 2024, the parties entered into an amendment to the agreement, pursuant to which the Article 2.

2 of the agreement has

been amended as follows:

eighty percent (80%) of the total amount, equaling RMB103,577,600 had been paid on the date of signing the contract

by both parties.

The remaining RMB25,894,400 shall be paid in a combination of common stock of the Company and cash as follows:

(1) RMB10,357,800

shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.

These shares shall be issued

by the Company to Seller A or Seller A's designated parties within three months after SHSI has inspected and accepted the crude salt field

(2) the balance shall be paid in cash before December 31, 2028.

June 27, 2024, SHSI entered into an acquisition agreement with each Seller B, Seller C, Seller D and Seller E, respectively, pursuant

to which the sellers agreed to transfer to SHSI, and SHSI agrees to purchase from the sellers, 750,000, 804,000, 385,000, and 822,000

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

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

The term of transfers is

from June 29, 2024 to June 28, 2044.

80% of the transfer price shall be paid upon the execution of the agreements, and the remaining 20%

shall be paid in shares of common stock of the Company within three months from the date of the agreements after SHSI has inspected the

and accepted the crude salt fields in writing.

December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller B, pursuant to which the Article 2.

agreement has been amended as follows:

(80%) of the total amount, equaling RMB32,460,000 had been paid on the date of signing the contract

by both parties.

The remaining RMB8,115,000 shall be paid in a combination of common stock of the Company and cash as follows:

(1) RMB3,246,000

shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.

These shares shall be issued

by the Company to Seller B or Seller B’s designated parties within three months after SHSI has inspected and accepted the crude

salt field in writing;

(2) the balance shall be paid in cash before December 31, 2028.

December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller C, pursuant to which the Article 2.

agreement has been amended as follows:

Eighty percent (80%) of the total amount, equaling RMB35,311,680 had been paid on the date of signing

the contract by both parties.

The remaining RMB8,827,920 shall be paid in a combination of common stock of the Company and cash as follows:

(1) RMB3,531,168 shall be paid in shares, calculated on a per share price of US$1.5 per, using the exchange rate RMB/US$:7.27.

shall be issued by the Company to Seller C or Seller C's designated parties within three months after SHSI has inspected and accepted

the crude salt field in writing;

(2) the balance shall be paid in cash before December 31, 2028.

December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller D, pursuant to which the Article 2.

agreement has been amended as follows:

Eighty percent (80%) of the total amount, equaling RMB 16,632,000 had been paid on the date of

signing the contract by both parties.

The remaining RMB 4,158,000 shall be paid in a combination of common stock of the Company and cash

(1) RMB1,663,200 shall be paid in shares, calculated on a per share price ofUS$1.5, using the exchange rate RMB/US$:7.27.

These shares shall be issued by the Company to Seller D or Seller D's designated parties within three months after SHSI has inspected

and accepted the crude salt field in writing;

(2) the balance shall be paid in cash before December 31, 2028.

December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller E, pursuant to which the Article 2.

agreement has been amended as follows:

Eighty percent (80%) of the total amount, equaling RMB36,628,320 had been paid on the date of signing

the contract by both parties.

The remaining RMB9,157,080 shall be paid in a combination of common stock of the Company and cash as follows:

(1) RMB3,662,832 shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27.

shall be issued by the Company to Seller E or Seller E's designated party within three months after SHSI has inspected and accepted the

crude salt field in writing;

(2) the balance shall be paid in cash by SHSI to Seller E before December 31, 2028.

accordance to each amendment, the parties also acknowledged and agreed that, in compliance with the Nasdaq Listing Rule 5635, the issuance

of shares pursuant to the agreement may not exceed 19.9% of the total outstanding shares of common stock of the Company prior to the issuance

of the shares (the “19.9% Threshold”), unless such issuance is approved by the shareholders of the Company in accordance with

the Nasdaq rules and regulations.

SHSI shall cause the Company to take all necessary steps to obtain such shareholder approval if the

issuance of shares under the agreement exceeds the 19.9% Threshold.

December 30, 2024, SHSI and each of the sellers mutually acknowledged and confirmed that the salt land provided by each seller meets the

acquisition criteria, is in the anticipated usable condition, and has been accepted and handed over to SHSI.

February 28, 2025, the transactions as contemplated by the acquisition agreements were closed.

On the closing date, the Company issued

a total of 2,059,694 shares of the Company’s common stock at a price of $1.50 per share, to five individuals, who are citizens residing

in the People’s Republic of China, designated by each seller.

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

Since our factories closed, the Company

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

On January 6, 2020, the Company received the environmental

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

Construction of the

new chemical facilities at Bohai Marine Fine Chemical Industrial Park commenced in June 2020.

Initially, the construction was projected

to last around one year, with an additional six months for equipment installation and testing.

However, due to the COVID epidemic and

electrical restrictions, the opening of the chemical factory has been postponed.

The Company has received the refrigeration and air compressor

Additionally, the procurement of the final equipment for our chemical factory has been postponed until we have a better understanding

of the potential for derivative bromine products.

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

In January 2017, the Company completed

the construction of the first brine water and natural gas well field in Daying County, Sichuan Province, and commenced trial production

in January 2019.

On May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province,

mandating the need for project approval for its Daying well, encompassing the entire natural gas and brine water project.

This also includes

approvals for safety production inspection, environmental protection assessment, and to solve the related land issue.

Until these approvals

are obtained, the Company must temporarily suspend trial production at its natural gas well in Daying.

Additionally, in compliance with

the Chinese government new policies, the Company is required to obtain an exploration license for bromine and a mining license for natural

Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management

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

enterprises are allowed to participate in natural gas production.

The Company is engaged in ongoing discussions with the government of

Daying County regarding the establishment of a joint venture for the exploration and production of natural gas and brine products in Sichuan.

Nasdaq Compliance

2 unchanged sentences

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).

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.

year ended December 31, 2023, with the SEC, the Company is not in compliance with Nasdaq’s continued listing requirements under

Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely filing of all required periodic reports with the SEC,

and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to the Company’s non-compliance

with the Rule as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended

March 31, 2024.

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

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

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).

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 hearing did not

take place because the Company subsequently regained compliance with the applicable Nasdaq listing requirement.

Our current corporate structure chart is set forth in the following

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

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

The following discussion should be

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

As a result of our acquisition of SCHC, our historical

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

The following discussion

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

On December 22, 2025 SYCI was sold.

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, 2025 and 2024.

Comparison of the Three-Month Period Ended

September 30, 2025 and 2024

The following table presents certain information derived from the

condensed consolidated statements of operations, cash flows and stockholders' equity for the three-month period ended March 31, 2026

Comparison of the Three-Month Periods Ended

March 31, 2026 and 2025

Three-Month Period

Ended September

Ended March 31, 2026

Three-Month Period

Ended September

Percent Change Increase/

Cost of net revenue

Gross profit(loss)

Ended March 31, 2025

Percent Change

Cost of revenue

$ (2,353,412 )

$ (1,594,270 )

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

$ (2,743,262 )

General and administrative expenses

$ (1,323,101 )

$ (1,389,523 )

Loss from operations

Interest income, net

Other expense, net

Loss on disposal of long-lived assets

Impairment of long-lived assets

$ (4,056,597 )

Loss before taxes

$ (4,610,207 )

Income tax benefit

Interest income

Interest expense

Loss before income taxes

$ (3,926,381 )

$ (4,629,500 )

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

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:

Income tax expense

$ (3,926,381 )

$ (4,629,500 )

Net Loss for the three-month period ended March 31, 2026

decreased to $3,926,381 from $4,629,500 in the same period in 2025, mainly due to the net revenue increased to $2,368,626 for the

three-month period ended March 31, 2026 as compared to $1,604,447 in the same period in 2025.

The table below shows the changes in net

revenue in the respective segments of the Company for the three-month period ended March 31, 2026 as compared to the same period in 2025:

Net Revenue by Segment

Percent Change

Three-Month Period Ended

Percent Change

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

of Net Revenue

4 unchanged sentences

product sold in tonnes

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Increase (Decrease)

Bromine segment

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).

For the three-month periods ended March 31, 2026 and 2025,

the net revenue for the bromine segment was $2,249,950 and $1,481,869, respectively.

The increase of the net revenue of bromine was due

to the 13% increase in tonnes sold and the 34% increase in average selling price of bromine.

Crude salt segment

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,

For the three-month periods ended March 31, 2026 and 2025,

the net revenue for the crude salt was $118,676 and $122,578, respectively.

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

the 2% decrease in tonnes sold and the 2% decrease in average selling price of crude salt for the three-month period ended March 31, 2026.

Chemical products segment

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,

For the three-month periods ended March 31, 2026 and 2025, the net

revenue for the chemical products segment was nil due to the closure of our chemical factories since September 1, 2017.

Natural gas segment

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

Cost of Net Revenue by Segment

For the three-month periods ended March 31, 2026 and 2025, the net

revenue was nil.

Cost of Revenue

Cost of Revenue by Segment

Percent Change

1 unchanged sentence

Three-Month Period Ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

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

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

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

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

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

Bromine production capacity and utilization

of our factories

The table below represents the annual capacity

and utilization ratios for all of our bromine producing properties:

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.

Cost of revenue reflects mainly the raw materials consumed and the

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

plants and machinery and other manufacturing costs.

Our cost of revenue was $2,353,412 for the three-month period ended March 31,

2026, an increase of $759,142 (or 48%) as compared to the same period in 2025 due to the increase of net revenue by 48% for the

three-month period ended March 31, 2026 as compared to the same period in 2025.

Bromine production capacity and utilization of our factories

The table below represents the annual capacity and utilization ratios

for all of our bromine producing properties:

Annual Production

Capacity (in tonnes)

Three-month period ended March 31, 2025

Three-month period ended March 31, 2026

Variance of the three-month periods ended March 31, 2026 and 2025

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, 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.

For the three-month period ended March 31, 2026 and 2025 the cost of

revenue for the bromine segment was $2,283,326 and $1,533,128, respectively.

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

Crude salt segment

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.

For the three-month period ended March 31, 2026 and 2025 the cost of

revenue for the crude salt segment was $70,086 and $61,142, respectively.

The increase in costs is mainly due to the rise in amortization

of the salt pans.

Chemical products segment

Cost of net revenue for our chemical products

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

Cost of revenue for our chemical products segment for the three-month

period ended March 31, 2026 and 2025 was nil.

Natural gas segment

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

Cost of revenue for our natural gas segment for the three-month

period ended March 31, 2026 and 2025 was nil.

Gross Profit (Loss).

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.

Gross profit was $15,214, or 0.6% of net revenue for three-month period ended March 31, 2026, representing an increase of $5,037, as compared

to a gross profit of $10,177, or 0.6% of net revenue for the same period in 2025.

Gross Profit (Loss) by Segment

2 unchanged sentences

Three-Month Period Ended

September 30, 2025

September 30, 2024

Profit Margin

March 31, 2026

March 31, 2025

Profit (Loss) Margin

Gross Profit (Loss) Margin

$ (2,222,775 )

Chemical Products

Total Gross Profit (Loss)

$ (1,829,251 )

Bromine segment

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.

For the three-month period ended March 31, 2026,

the gross loss margin for our bromine segment was 1.5%, compared to 3.5% in the three-month period ended March 31, 2025.

in gross loss margin was primarily attributable to the higher average selling price of bromine of $4,948 per ton in the three-month period

ended March 31, 2026 compared to $3,684 per ton in the three-month period ended March 31, 2025.

Bromine tonnes sales also increased from

402 tonnes for the three-month period ended March 31, 2025 to 455 tonnes for the three-month period ended March 31, 2026.

Crude salt segment

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.

For the three-month period ended March 31, 2026, the gross profit margin

for our crude salt segment was 41%, compared to 50% in the same period in 2025, representing a 9% decrease.

Chemical products

For the three-month period ended March 31, 2026 and 2025,

the gross profit margin for our chemical products segment was 0%.

For the three-month period ended March 31, 2026 and 2025,

the gross profit margin for our natural gas segment was 0%.

Direct labor and factory overheads incurred

5 unchanged sentences

Company to relocate its two chemical production plants located in the second living area of the Qinghe Oil Extraction Plant to Bohai

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $580,178 and

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

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $2,743,262

and $3,225,808 incurred for the three-month periods ended March 31, 2026 and 2025, respectively, of factories that have not resumed production

were presented as part of the operating expense.

General and Administrative Expenses

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

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

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.

General and Administrative Expenses General and administrative

expenses were $1,323,101 for the three-month period ended March 31, 2026, a decrease of $66,422 (or 5%) as compared to $1,389,523 for

the same period in 2025.

Loss from Operations Loss from

operations was $4,056,597 the three-month period ended March 31, 2026, compared to loss from operations of $4,610,207 in the same period

Loss from Operations by Segment

Three-Month Period Ended

September 30, 2025

March 31, 2026

Three-Month Period Ended

September 30, 2024

$ (4,029,999 )

Chemical Products

Loss from operations before corporate costs

Corporate costs

Loss from operations

$ (4,581,609 )

Bromine segment

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

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 $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 $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)

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

General and administrative expenses

Loss from operations

(14,998,025 )

Interest income ,net

Other expense,net

Loss from asset disposal

(29,169,008 )

Impairment of long-lived assets

(29,782,912 )

Loss before taxes

(41,067,789 )

(44,164,800 )

Income tax benefit (expense)

$ (41,067,789 )

$ (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

Nine-Month Period Ended

Percent Increase

September 30, 2025

September 30, 2024

of Net Revenue

Chemical Products

Bromine and crude salt segments

Nine-Month Period Ended

Percentage Change

product sold in tonnes

September 30, 2025

September 30, 2024

Bromine (excluding volume sold to SYCI)

Bromine segment

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 $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 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 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

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 $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

of our factories

The table below represents the annual capacity

and utilization ratios for all of our bromine producing properties:

Annual Production Capacity (in tonnes)

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 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 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 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

Nine-Month Period Ended

September 30, 2025

September 30, 2024

Profit Margin

Gross Profit (loss) Margin

$ (6,019,155 )

Chemical Products

Total Gross Profit(Loss)

$ (5,370,923 )

Bromine segment

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 nine-month period ended September 30, 2025,

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

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 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 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

during plant shutdown On September 1, 2017, the Company received notification from the government of Yangkou County, Shouguang

City of PRC that stated that production at all its bromine and crude salt and chemical factories should be halted with immediate effect

in order for the Company to perform rectification and improvement in accordance with the county’s new safety and environmental protection

requirements.

On November 24, 2017, the Company received a letter from the Government of Yangkou County, Shouguang City notifying the

Company to relocate its two chemical production plants located in the second living area of the Qinghe Oil Extraction Plant to Bohai

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $4,533,760

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

production were presented as part of the operating expense.

General and Administrative Expenses.

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 $5,694,821 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

March 31, 2025

$ (3,067,778 )

2 unchanged sentences

Loss from operations before corporate costs

(14,656,795 )

Corporate costs

Loss from operations before taxes

Corporate cost

Loss from operations

$ (4,056,597 )

2 unchanged sentences

Loss from operations from our bromine segment

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.

was $3,067,778 for the three-month period ended March 31, 2026, compared to loss from operations of $3,370,836 in the same period in 2025.

This decrease was due to the 13% increase in tonnes sold and a 34% increase in average selling price.

Crude salt segment

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.

$727,679 for the three-month period ended March 31, 2026, compared to loss from operations of $554,062 in the same period in 2025.

main reason was due to the rise in amortization of the salt pans.

Chemical products 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

chemical products segment was $0 for the three-month period ended March 31, 2026, compared to loss from operations of $358,629 in the

same period in 2025.

The reason for the reduction was due to the sale of SYCI completed by December, 2025.

Natural gas segment

Loss from operations from our natural gas segment

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.

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.

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.

was $31,809 for the three-month period ended March 31, 2026, compared to loss from operations of $44,844 in the same period in 2025.

Interest income

Interest income of $253,660 represented interest

income from bank and loans made to third parties for the three-month period ended March 31, 2026, an increase of $251,231 as compared

to the same period in 2025.

Interest Expenses

Interest expense of $123,444 represented bank

interest expense for the three-month period ended March 31, 2026, an increase of $101,722 as compared to the same period in 2025.

Net loss was $3,926,381 for the three-month period

ended March 31, 2026, compared to a net loss of $4,629,500 in the same period in 2025.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2025, cash and cash equivalents

As of March 31, 2026, cash and cash equivalents

were $6,537,505 as compared to $3,793 as of December 31, 2025.

The components of this decrease of $4,255,079 are reflected below.

The components of this increase of $6,533,712 are reflected below.

Statement of Cash Flows

Nine-Month Period Ended September 30,

Three-Month Period Ended March 31,

Net cash provided by/(used in) operating activities

Net cash used in investing activities

$ (1,580,128 )

Net cash used in financing activities

Net cash provided by investing activities

Net cash provided by/(used in) financing activities

Effects of exchange rate changes on cash and cash equivalents

1 unchanged sentence

$ (1,552,117 )

$ (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.

For the three-month period ended March 31, 2026, we met our working

capital and capital investment requirements by using cash on hand.

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.

During the three-month

period ended March 31, 2026, cash flow provided by operating activities of approximately $1.09 million was mainly due to a non-cash

adjustment related to depreciation and amortization of property, plant and equipment of $3.36 million, amortization of finance lease

right-of-use asset of $0.73 million, an increase in accounts receivable of $0.65 million, offset by a net loss of $3.93 million.

During the three-month period ended March 31,

2025, cash flow used in operating activities of approximately $1.58 million was mainly due to a net loss of $4.62 million, a decrease

in accounts receivable of $1.5 million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and

equipment of $4 million.

Accounts receivable

Cash collections on our accounts receivable had

a major impact on our overall liquidity.

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

2025 and December 31, 2024.

September 30, 2025

Cash collections on our accounts receivable had a major impact on our

overall liquidity.

The following table presents the aging analysis of our accounts receivable as of March 31, 2026 and December 31, 2025.

March 31, 2026

December 31, 2025

7 unchanged sentences

Aged 211-240 days

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

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

We have policies in place to ensure that sales are made to customers with an

appropriate credit history.

The overall accounts receivable balance as of March 31, 2026

decreased by $594,979, as compared to those of December 31, 2025.

We have policies in place to ensure that sales are made to customers

with an appropriate credit history.

We perform ongoing credit evaluation on the financial condition of our customers.

Our inventory consists of the following:

September 30, 2025

March 31, 2026

December 31, 2025

1 unchanged sentence

Finished goods

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

The net inventory level as of March 31, 2026 decreased

by $118,345, as compared to the net inventory level as of December 31, 2025.

Raw materials increased by $36,030 as of March 31, 2026

as compared to December 31, 2025.

Our finished goods increased by $147,081 as of

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

Net Cash Used in Investing Activities

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 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

generated from operations will be sufficient to meet our anticipated ongoing operating needs and our obligations as they full due in the

next twelve (12) months.

We had available cash of approximately $5.82 million

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.

Our finished goods decreased by $136,375 as of March 31,

2026 as compared to December 31, 2025.

Net Cash Provided By Investing Activities

During the three months ended March 31, 2026, net

cash provided by investing activities was $5.03 million, attributable to repayments received on loans to third parties of $5.55 million,

offset by purchases of fixed assets of $0.52 million.

We did not have investing activities for the three-month

periods ended March 31, 2025.

Net Cash Provided By / (Used In) Financing

For the three-month period ended March 31, 2026,

net cash provided by financing activities was $0.29 million, primarily due to proceeds from the issuance of units pursuant to a private

We did not have financing activities for the three-month periods ended March 31, 2025.

We believe that our available funds and cash flows generated

from operations will be sufficient to meet our anticipated ongoing operating needs and our obligations as they become due in the next

twelve (12) months.

We had available cash of approximately $6,537,505

at March 31, 2026, 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,

SYCI, SHSI and DCHC as these segments continue to expand within the Chinese market.

SHSI and DCHC as these segments continue to expand within the Chinese market.

We may not be able to identify, successfully integrate

13 unchanged sentences

Additional information regarding

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

our contractual obligations and commitments as at March 31, 2026 is provided in the notes to our consolidated financial statements.

“Notes to Condensed Consolidated Financial Statements.

Material Off-Balance Sheet Arrangements

We do not currently have any off balance sheet

arrangements falling within the definition of Item 303(a) of Regulation S-K.

We do not currently have any off balance sheet arrangements falling

within the definition of Item 303(a) of Regulation S-K.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance

with accounting principles generally accepted in the United States of America and this requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts

of revenues and expenses during the reporting period.

We base its estimates on historical experience and on various other assumptions

that are believed to be reasonable under the circumstances.

Accordingly, actual results may differ significantly from these estimates

under different assumptions or conditions.

We have identified the following critical accounting policies and estimates used by us in the

preparation of our financial statements:

accounts receivable and allowance for doubtful accounts, inventories and allowance for obsolescence,

assets retirement obligation, property, plant and equipment, recoverability of long-lived assets, mineral rights, leases, revenue recognition,

income taxes, and loss contingencies.

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

ended September 30, 2025.

Our consolidated financial statements have been prepared in

accordance with accounting principles generally accepted in the United States of America and this requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the

reported amounts of revenues and expenses during the reporting period.

We base its estimates on historical experience and on various other

assumptions that are believed to be reasonable under the circumstances.

Accordingly, actual results may differ significantly from these

estimates under different assumptions or conditions.

We have identified the following critical accounting policies and estimates used

by us in the preparation of our financial statements:

accounts receivable and allowance for doubtful accounts, inventories and allowance

for obsolescence, assets retirement obligation, property, plant and equipment, recoverability of long-lived assets, mineral rights, leases,

revenue recognition, income taxes, and loss contingencies.

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

for the three months ended March 31, 2026.

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

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