What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-09-30 compared with 2026-09-30 · 249 added, 425 removed, 245 unchanged (73% of the section changed)

64 unchanged sentences

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.

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

3 unchanged sentences

Factory No.8 started to contribute revenue in the fourth quarter 2022.

to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December

10, 2022 until February 1, 2023 8:00 AM China Time.

To comply with such notification, the Company had temporarily stopped production

at its bromine facilities during the aforesaid period and reopened the operating bromine and crude salt factories in February, 2023 as

Company is still waiting for governmental approval for factories No.

Company is still waiting for governmental approval for factories No.2 and No.10.

To its knowledge, the government is currently completing

1 unchanged sentence

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.

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

requirements.

November 24, 2017, Gulf Resources received a letter from the People’s Government of Yangkou County, Shouguang City notifying the

15 unchanged sentences

The Company has received the refrigeration and air compressor units.

On July 26, 2023, the Company announced that the delivery

of the remaining equipment for its Yuxin chemical factory has been temporarily delayed and to review its chemical products strategy.

The company decided to delay the delivery of the rest undelivered

equipment and the opening of the factory until financial conditions in China improved and until it had visibility as to which products

would produce the best returns.

January 2017, the Company completed the first brine water and natural gas well field construction in Daying located in Sichuan Province

4 unchanged sentences

to solve the related land issue.

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

natural gas well in Daying.

Until these approvals have been received, the Company has had to temporarily halt trial production at

its natural gas well in Daying.

In compliance with the Chinese government new policies, the Company is also required to obtain an exploration

5 unchanged sentences

The Company plans to proceed with its applications for the natural gas and brine project approvals with related government

departments until after the governmental planning has been finalized the land and resource planning for Sichuan Province.

departments after the governmental planning has finalized the land and resource planning for Sichuan Province.

April 2022, Shouguang Hengde Salt Industry Co.

14 unchanged sentences

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.

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

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 in writing;

(2) the balance shall be paid in cash before

December 31, 2028.

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

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

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 in writing;

(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

7 unchanged sentences

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 2.2 of the

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:

8 unchanged sentences

(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 2.2 of

the 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.

These shares 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 2.2 of

the 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 as follows:

(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;

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

(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.

These shares 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 E, pursuant to which the Article 2.2 of the

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:

2 unchanged sentences

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

(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.

10 unchanged sentences

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.

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

Stocks”), 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 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.

of the listing of the Common Stocks 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 Stocks, which will continue to trade on Nasdaq under the

symbol “GURE.”

previously announced, on November 5, 2024, the Staff notified the Company that the bid price for the Common Stocks 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.

listed on The Nasdaq Global Select Market are not eligible for a second 180-day grace period under the Nasdaq Listing Rules.

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 Stocks to The Nasdaq Capital Market.

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

Company intends to closely monitor the closing bid price for its Common Stocks 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 S tock s 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).

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 Stocks 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 hearing.

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 Stocks”), 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 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

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

is not expected to impact trading in the Common Stocks, 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 Stocks 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 Stocks 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 Stocks 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 Stocks 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 Stocks 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

Company has provided written notice to Nasdaq of its intention to cure the deficiency during the Second Compliance Period by effecting

6 unchanged sentences

OF OPERATIONS

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.

of the Three-Month Periods Ended June 30, 2025 and 2024

following table presents certain information derived from the condensed consolidated statements of income, cash flows and stockholders’

equity for the three-month periods ended March 31, 2025 and 2024.

of the Three-Month Periods Ended March 31, 2025 and 2024

31, 2025 (Restated)

Cost of revenue

1 unchanged sentence

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

General and administrative expenses

Direct labor and factory overheads incurred

during plant shutdown

General and administrative

Loss from operations

2 unchanged sentences

Other expense, net

Loss on disposal of property, plant and equipment

(29,169,008 )

Loss before taxes

(34,306,028 )

Income tax benefit

$ (4,670,180 )

Loss of $814,364 for the three-month periods ended June 30, 2025 was mainly attributable to increased general and administrative expenses.

Loss of $33,097,918 for the three-month periods ended June 30, 2024 was mainly attributable to decreased sales and reduced margins.

company also suffered a loss of $29,169,008 on retirement of fixed assets.

$ (3,992,132 )

The table 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:

Net Revenue by Segment

Chemical Products

ended March 31, 2025 compared to the same period in 2024:

Revenue by Segment

Three-Month Period Ended

Bromine and crude salt segments product sold in tonnes

June 30, 2025

June 30, 2024

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

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.

the three-month periods ended June 30, 2025 and 2024, the net revenue for the crude salt segment 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.

Three-Month Period Ended

Percent Change

Chemical Products

crude salt segments product sold in tonnes

Bromine (excluded volume sold to

the three-month periods ended March 31, 2025 and 2024, the net revenue for the bromine segment was $1,481,869 and $1,146,197, respectively.

This increase was due to the 11% decrease in tonnes sold and a 45% increase in average selling price.

the three-month periods ended March 31, 2025 and 2024, the net revenue for the crude salt was $122,578 and $116,671, respectively.

increase was due to the 16% increase in tonnes sold and a 10% decrease in average selling price.

products segment

the three-month periods ended June 30, 2025 and 2024, the net revenue for the chemical products segment was $0 due to the closure of

the three-month periods ended March 31, 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.

the three-month periods ended June 30, 2025 and 2024, the net revenue for the natural gas segment was $0.

Cost of Revenue by Segment

Percent Change of

Three-Month Period Ended

June 30, 2025 (Restated)

June 30, 2024

the three-month periods ended March 31, 2025 and 2024, the net revenue for the natural gas production was $0 and $44,194, respectively.

of Revenue by Segment

31, 2025 (Restated)

Chemical Products

1 unchanged sentence

electricity, depreciation and amortization of manufacturing plant and machinery and other manufacturing costs.

Our cost of revenue

was $7,366,702 for the three-month period ended June 30, 2025, an increase of $2,254,644 (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 revenue was

$1,597,464 for the three-month period ended March 31, 2025, representing a $522,381 (or 25%) decrease compared to the preceding year.

production capacity and utilization of our factories

table below represents the annual capacity and utilization ratios for all of our bromine producing properties:

Three-month period ended June 30, 2024

Three-month period ended June 30, 2025

Variance of the three-month periods ended June 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.

the three-month period ended June 30, 2025, the cost of revenue for the bromine segment was $7,017,116.

the three-month period ended June 30, 2024, the cost of revenue for the bromine segment was $4,729,059.

The increase in costs is mainly due to the increase

in sales volume.

the three-month period ended June 30, 2025 the cost of revenue for the crude salt segment was $349,586.

the three-month period ended June 30, 2024 the cost of revenue for the crude salt segment was $382,999.

The decrease in costs is mainly due to the lower average

unit issue cost of raw salt.

products segment

of revenue for our chemical products segment for the three-month periods ended June 30, 2025 and 2024 was $0.

of revenue for our natural gas segment for the three-month periods ended June 30, 2025 and 2024 was $0.

Three-month period ended March 31, 2024

Three-month period ended March 31, 2025

Variance of the three-month periods ended March 31, 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

Cost of revenue for our bromine segment for the three-month

periods ended March 31, 2025 and 2024 was $1,533,224 and $2,072,752, respectively.

Crude salt segment

Cost of revenue for our crude salt segment for the

three-month periods ended March 31, 2025 and 2024 was $64,240 and $46,894, respectively.

Chemical products segment

Cost of revenue for our chemical products segment

for the three-month periods ended March 31, 2025 and 2024 was $0.

Natural g as segment

Cost of revenue for our natural gas segment for the

three-month periods ended March 31, 2025 and 2024 was $0 and $199, respectively.

Profit (Loss).

Gross profit was $977,083, or 12%, of net revenue for the three-month period ended June 30, 2025, representing

a increase of $3,705,972, as compared to a gross loss of $2,728,889, or 115%, of net revenue for the same period in 2024.

Gross Profit (Loss) by Segment

% Point Change

Gross profit was $6,983, or 0.4%, of net revenue for three-month period ended March 31, 2025 compared to loss $812,783,

or 62% of net revenue for three-month period ended March 31, 2024.

Profit (Loss) by Segment

Change of Gross

Three-Month Period Ended

June 30, 2025 (Restated)

June 30, 2024

(Loss) Margin

Gross Profit (Loss)

$ (2,869,825 )

Chemical Products

Total Gross Profit

$ (2,728,889 )

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, 2024.

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.

the three-month period ended June 30, 2025, the gross profit margin for our crude salt segment was 48%.

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

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

For the three-month period ended June 30, 2025, the increase in the gross

profit of crude salt was mainly due to a 22% increase in the average selling price of crude salt compared to the same period in 2024.

Sales and Marketing Expenses.

and marketing expenses were $14,802 for the three-month period ended June 30, 2025, a increase

of $1,169 (or 9%) as compared to $5,053 for the same period in 2024.

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 Park.

As a result, direct labor and factory overhead costs (including depreciation of plant and

machinery) in the amount of $727,774 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.

and Administrative Expenses.

General and administrative expenses were $1,025,780 for the three-month period ended June 30, 2025,

representing an increase of $335,808 as compared to $689,972 for the same period in 2024.

from Operations.

Loss from operations was $791,273 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

2025 (Restated)

$ (4,662,586 )

Chemical Products

loss from operations before corporate costs

Corporate costs

Loss from operations

$ (5,146,997 )

from operations from our bromine segment was $134,041 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

from operations from our crude salt segment was $181,160 for the three-month period ended June 30, 2025, compared to income from operations

of $130,024 in the same period in 2024.

This is mainly due to the increase in amortization of salt pans.

products segment

from operations from our chemical products segment was $348,203 for the three-month period ended June 30, 2025, compared to loss from

operations of $339,254 in the same period in 2024.

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 expenses of $21,674 represented interest on finance lease for the three-month

period ended June 30, 2025, a decrease of $3,140 as compared to the same period in 2024.

Interest income of $1,795 mainly represented interest income from bank interest income for the three-month

period ended June 30, 2025, a decrease of $32,996 as compared to the same period in 2024.

Other Expense, net.

For the three-month

period ended June 30, 2025, other expense, net increased from $0 to $3,212 compared with the same period of 2024.

on disposal of property, plant and equipment.

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

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 loss was $814,364 for the three-month period ended June 30, 2025, compared to a net loss of $33,097,918 in

the same period in 2024.

of the Six-Month Periods Ended June 30, 2025 and 2024

Cost of revenue

Gross profit (loss)

Sales and marketing expenses

Direct labor and factory overheads incurred during plant shutdown

General and administrative expenses

Loss from operations

(10,416,416 )

Interest expense

Interest income

Other expense, net

Loss on disposal of property, plant and equipment

(29,169,008 )

Loss before taxes

(39,568,220 )

Income tax benefit

$ (5,484,544 )

$ (37,090,050 )

loss of $5,484,544 for the six-month periods ended June 30, 2025 was mainly attributable to increased general and administrative expenses.

loss of $37,090,050 for the six-month periods ended June 30, 2024 was mainly attributable to decreased sales and reduced margins.

company also suffered a loss of $29,169,008 on retirement of fixed assets .

The table 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:

Net Revenue by Segment

Percent Increase

Six-Month Period Ended

June 30, 2025

June 30, 2024

Chemical Products

Six-Month Period Ended

Bromine and crude salt segments product sold in tonnes

June 30, 2025

June 30, 2024

Bromine (excluding volume sold to SYCI)

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.

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.

products segment

the six-month periods 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.

the six-month periods ended June 30, 2025 and 2024, the net revenue for the natural gas segment was $0 and $44,194, respectively.

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

Cost of Revenue by Segment

Six-Month Period Ended

June 30, 2025 (Restated)

June 30, 2024

Chemical Products

of 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 revenue was $8,964,166

for six-month period ended June 30, 2025, representing a $1,732,263 (or 24%) increase compared to the six-month period ended June 30,

The increase in costs was mainly due to a significant increase in sales volume.

production capacity and utilization of our factories

table below represents the annual capacity and utilization ratios for all of our bromine producing properties:

Six-month period ended June 30, 2024

Six-month period ended June 30, 2025

Variance of the six-month periods ended June 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.

the six-month period ended June 30, 2025, the cost of revenue for the bromine segment was $8,550,340.

the six-month period ended June 30, 2024, the cost of revenue for the bromine segment was $6,801,811.

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

the six-month period ended June 30, 2025, the cost of revenue for the crude salt segment was $413,826.

the six-month period ended June 30, 2024, the cost of revenue for the crude salt segment was $429,893.

The decrease in costs is mainly due to the lower average

unit issue cost of raw salt.

products segment

of revenue for our chemical products segment for the six-month periods ended June 30, 2025 and 2024 was $0.

of revenue for our natural gas segment for the six-month periods ended June 30, 2025 and 2024 was $0 and $199, respectively.

Profit (Loss)

Gross profit was $984,066, 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.

Gross Profit (Loss) by Segment

% Point Change

Six-Month Period Ended

June 30, 2025 (Restated)

June 30, 2024

31, 2025 (Restated)

Profit Margin

Gross Profit (Loss) Margin

$ (3,796,380 )

Profit Margin

Chemical Products

Total Gross Profit (Loss)

$ (3,541,672 )

the six-month period ended June 30, 2025, the gross profit margin for our bromine segment was 7%, compared to gross loss margin of

126% in the six-month period ended June 30, 2024.

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.

the six-month period ended June 30, 2025, the gross profit margin for our crude salt segment was 48%.

the six-month period ended June 30, 2024 the gross profit margin for our crude salt segment was 33%.

For the six-month period ended June 30, 2025, the increase in the gross profit of crude salt compared to the six-month

period ended June 30, 2024, was mainly due to a 6% increase in the sales volume of crude salt and an increase in its unit selling price.

products segment

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.

profit for our natural gas segment for the six-month periods ended June 30, 2025 and 2024 was $0 and $43,995 respectively.

the three-month period ended March 31, 2025, the gross loss margin for our bromine segment was 3.5%, compared to 81% in the three-month

period ended March 31, 2024.

The decrease in gross loss margin was primarily attributable to the higher average selling price of bromine

of $3,684 per ton in the three-month period ended March 31, 2025 compared to $2,541 per ton in the three-month period ended March 31,

Bromine tonnes sales also decreased from 451 tonnes for the three month period ended March 31, 2024 to 402 tonnes for the three

month period ended March 31, 2025.

Crude salt segmen t

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

the gross profit margin for our crude salt segment was 47.6%, compared to 60% in the same period in 2024, representing a 12.4% decrease.

For the three-month period ended March 31, 2025, the average selling price of raw salt decreased by 10% compared to the three-month period

ended March 31, 2024.

Natural g as segment

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

the gross profit margin for our natural gas segment was 0%, compared to 100% in the same period in 2024.

Sales and Marketing Expenses.

Sales and marketing expenses were $19,855 for the six-month period ended June 30, 2025, an

increase of $1,731 (or 10%) as compared to $18,124 for the same period in 2024.

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 Park.

As a result, direct labor and factory overhead costs (including depreciation of plant and

machinery) in the amount of $3,953,582 and $5,449,192 incurred for the six-month periods ended June 30, 2025 and 2024, respectively,

for the factories that have not resumed production were presented as part of the operating expense.

and Administrative Expenses.

General and administrative expenses were $2,452,789 for the six-month period ended June 30, 2025,

a increase of $1,045,361 (or 74%) as compared to $1,407,428 for the same period in 2024.

and marketing expenses were $5,053 for the three-month period ended March 31, 2025, an increase of $562 (or 13%) as compared to

$4,491 for the same period in 2024.

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 Park.

As a result, direct labor and factory overhead costs (including depreciation of plant and machinery) in the amount of $3,225,808 and $3,734,689

incurred for the three-month periods ended March 31, 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 $1,427,009 for the three-month period ended March 31, 2025, an increase of $709,553 (or 99%)

as compared to $717,456 for the same period in 2024.

from Operations.

Loss from operations was $5,442,160 for the six-month period ended June 30, 2025, compared to loss from operations

Loss from operations was $4,650,887 the three-month period ended March 31, 2025, compared to loss from operation

of $5,269,419 in the same period in 2024.

Loss from Operations by Segment

Six-Month Period Ended

June 30, 2025 (Restated)

Six-Month Period Ended

June 30, 2024

from Operations by Segment

31, 2025 (Restated)

$ (3,374,506 )

1 unchanged sentence

Chemical Products

Loss from operations before corporate costs

(10,146,029 )

Loss from operations before

corporate costs

Loss from operations before taxes

Corporate cost

Unrealized gain (loss) on translation of intercompany

Loss from operations

$ (4,650,887 )

$ (5,269,419 )

from operations from our bromine segment was $3,508,547 for the six-month period ended June 30, 2025, compared to an loss from operations

from operations from our bromine segment was $3,374,506 for the three-month period ended March 31, 2025, compared to loss from operations

of $4,782,815 in the same period in 2024.

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

from operations from our crude salt segment was $768,969 for the six-month period ended June 30, 2025, compared to an income from operations

This decrease was due to the a 45% increase in average selling price partially offset by a

decrease of 11% in tonnes sold.

from operations from our crude salt segment was $587,809 for the three-month period ended March 31, 2025, compared to loss from operations

of $75,092 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.

The main reason for the increase in depreciation and amortization.

products segment

from operations from our chemical products segment was $710,095 for the six-month period ended June 30, 2025, compared to a loss from

from operations from our chemical products segment was $361,892 for the three-month period ended March 31, 2025, compared to loss from

operations of $314,824 in the same period in 2024.

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.

Interest expenses of $43,396 represented and interest on finance lease for the

six-month period ended June 30, 2025, a decrease of $6,248 as compared to the same period in 2024.

Interest income of $4,224 mainly represented bank interest income for the six -month

period ended June 30, 2025, a decrease of $66,627 as compared to the same period in 2024.

Loss from operations from our natural gas segment

was $44,844 for the three-month period ended March 31, 2025, compared to loss from operations of $27,709 in the same period in 2024.

Interest Income.

Interest income

of $2,429 mainly represented bank interest income for the three-month period ended March 31, 2025, a decrease

of $33,631 as compared to the same period in 2024.

Interest Expenses.

Interest expense

of $21,722 represented interest on finance lease for the three-month period ended March 31, 2025, a

decrease of $3,108 as compared to the same period in 2024.

Other Expense, net.

For the six-month period ended June 30, 2025, other expense, net decreased from $4,003 to $3,212 compared with the same period

on disposal of property, plant and equipment.

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

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 loss was $5,484,544 for the six-month period ended June 30, 2025, compared to a net loss of $37,090,050 in

the same period in 2024.

For the three-month

period ended March 31, 2025, other expense, net decreased from $4,003 to $0 compared with the same period of 2024.

Net loss was $4,670,180

for the three-month period ended March 31, 2025, compared to a net loss of $3,992,132 in the same period in 2024.

AND CAPITAL RESOURCES

of June 30, 2025, cash and cash equivalents were $7,736,081 as compared to $10,075,162 as of December 31, 2024.

of March 31, 2025, cash and cash equivalents were $8,523,045 as compared to $10,075,162 as of December 31, 2024.

The components of this

1 unchanged sentence

of Cash Flows

Six-Month Period Ended June 30,

Period Ended March 31,

Net cash used in operating activities

$ (1,580,128 )

Net cash used in investing activities

$ (1,330,476 )

Net cash used in financing activities

(31,866,665 )

Effects of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net cash used in investing activities

Net cash provided by financing activities

Effects of exchange rate

changes on cash and cash equivalents

Net increase(decrease)

in cash and cash equivalents

$ (1,552,117 )

$ (1,462,098 )

the six-month period ended June 30, 2025, we met our working capital and capital investment requirements by using cash on hand.

the three-month period ended March 31, 2025, we met our working capital and capital investment requirements mainly by using cash on hand.

Cash Used in Operating Activities

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 $5.48 million, an increase in accounts receivable of $2.57 million, an increases in prepayment and deposits of $2.33 million and

offset by a non-cash adjustment related to depreciation and amortization of $6.45 million and amortization of finance lease right-of-use

asset of 1.55 million.

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 $8.84 million and loss on disposal of equipment of $29.17

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 $4.67 million, an increase in accounts receivable of $1.55 million,

offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $3.23 million, amortization

of finance lease right-of-use asset of $0.78 million and an increase in accrued expenses and other payable of $0.40 million.

the three-month period ended March 31, 2024, cash flow used in operating activities of approximately $1.33 million was mainly due to

a net loss of $3.99 million, an increase in accounts receivable of $0.4 million, a non-cash adjustment related to deferred taxes of $1.27

million, offset by depreciation and amortization expenses of $4.42 million.

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 June 30, 2025 and December 31, 2024.

June 30, 2025

December 31, 2024

our accounts receivable as of March 31, 2025 and December 31, 2024.

Aged 1-30 days

6 unchanged sentences

Aged 211-240 days

overall accounts receivable balance as of June 30, 2025 increased by $2,586,327, 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.

We perform ongoing credit evaluations on the financial

condition of our customers.

overall accounts receivable balance as of March 31, 2025 increased by $1,549,699, as compared to those of December 31, 2024.

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.

inventory consists of the following:

June 30, 2025

December 31, 2024

Raw materials

Finished goods

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.

materials increased by $26,935 as of June 30, 2025 as compared to December 31, 2024.

finished goods increased by $172,707 as of June 30, 2025 as compared to December 31, 2024.

Cash Used in Investing Activities

We have no investing activities for the six-month

period ended June 30, 2025 .

the six months ended June 30, 2024, we used approximately $28.92 million for purchase of fixed assets.

Cash Used in Financing Activities.

For the six-month period ended June 30, 2025, we used $0.3 million to fulfil finance lease obligations.

the six-month period ended June 30, 2024, net cash used in financing activities was $31.87 million, which was used for the principal

payment for obligations under finance leases.

believe that our available funds and cash flow generated from operations will be sufficient to meet our anticipated ongoing operating

needs and our obligations as they fall due in the next twelve (12) months.

had available cash of approximately $7.74 million on June 30, 2025, all which is in highly liquid current deposits earning no or little

We do not anticipate paying cash dividends in the foreseeable future.

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.

may not be able to identify, successfully integrate or profitably manage any business or business segment we may acquire, or any expansion

of our business.

An expansion may involve a number 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 prospects.

The net inventory level as of March 31, 2025

increased by $139,688(or 44%), as compared to the net inventory level as of December 31, 2024.

The increase in inventory goods is an estimate

that market demand may rise.

Raw materials increased by $31,255 as of March 31,

2025 as compared to December 31, 2024.

Our finished goods increased by $108,433 as of March

31, 2025 as compared to December 31, 2024.

Net Cash Used in Investing Activities

We have no investing activities for the three-month periods ended March 31, 2025 and 2024.

Net Cash Provided by Financing Activities

We have no financing activities for the three-month

periods ended March 31, 2025 and 2024.

We believe that our available funds and cash

flow generated from operations will be sufficient to meet our anticipated ongoing operating needs and our obligations as they fall due

in the next twelve (12) months.

We had available cash of approximately $8.52

million on March 31, 2025, most of which is in highly liquid current deposits which earn 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.

We may not be able to identify, successfully

integrate or profitably manage any business or business segment we may acquire, or any expansion of our business.

An expansion may involve

a number 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

Obligations and Commitments

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 on June 30, 2025

is provided in the notes to our consolidated financial statements.

See “Notes to Condensed Consolidated Financial Statements.”

have no significant contractual obligations not fully recorded on our condensed consolidated balance sheets or fully disclosed in the

notes to our condensed consolidated financial statements.

Additional information regarding our contractual obligations and commitments

on March 31, 2025 is provided in the notes to our condensed consolidated financial statements.

Off-Balance Sheet Arrangements

12 unchanged sentences

These policies

and estimates are described in the Company’s Form 10-Q for the six months ended June 30, 2025.

and estimates are described in the Company’s Form 10-Q for the three months ended March 31, 2025.

Quantitative and Qualitative Disclosures About Market Risk

2 unchanged sentences

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

What changed 10-Q/A

Item 2. Management’s Discussion and Analysis