What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-09-30 compared with 2026-09-30 · 529 added, 237 removed, 141 unchanged (84% of the section changed)

15 unchanged sentences

reported in four segments, namely, bromine, crude salt, chemical products and natural gas.

our wholly-owned subsidiary, SCHC, we produce and trade bromine, and through our wholly-owned subsidiary, SHSI, we produce and trade

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.

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.

our wholly-owned subsidiary, SCHC, we produce and trade bromine and SHSI for crude salt production and trading.

We are one of the largest

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

Elemental bromine is used to manufacture a wide variety of bromine compounds

used in industry and agriculture.

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

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

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.

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

2 unchanged sentences

in Sichuan Province, China.

and Crude Salt

disclosed in the Company’s Current Report on Form 8-K filed on September 8, 2017, the Company received, on September 1, 2017, letters

4 unchanged sentences

In the Company’s press release of August 11, 2017 and on its conference call of August 14, 2017, the Company addressed

concerns that increased government enforcement of stringent environmental rules that were adopted in early 2017 to ensure corporations

concerns that increased government enforcement of stringent environmental rules that were adopted in early 2017 to insure corporations

bring their facilities up to necessary standards so that pollution and other negative environmental issues are limited and remediated,

14 unchanged sentences

that each of its regional and county governments has applied the Notice in a consistent manner.

Shouguang City Bromine Association, on behalf of all the bromine producers in Shouguang, initiated negotiations with the local government

The local governmental 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.

Shouguang City Bromine Association, on behalf of all the bromine plants in Shouguang, started discussions with the local government agencies.

The local governmental agencies confirmed the facts that their initial requirements for the bromine industry did not include the project

approval, the planning approval and the land use rights approval and that those three additional approvals were new requirements of the

provincial government.

The Company understood from the local government that it has been coordinating with several government agencies

to solve these three outstanding approval issues in a timely manner and that all the affected bromine plants willnot be allowed to commence

production prior to obtaining those approvals.

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

9 had passed inspection and could resume operations.

In April 2019, Factory No.

7 resumed operations.

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.

Company received oral notification from the government regarding Factory No.

8, allowing it to resume production in August 2022.

No.8 began contributing revenue in the fourth quarter of 2022.

Company is awaiting governmental approval for Factories No.

To our knowledge, the government is finalizing plans for all

mining areas, including flood prevention measures.

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.

Company completed its flood prevention project in December 2023.

This project was implemented for safeguarding its bromine facilities.

February 28, 2020, the Company announced that it received an approval from the government to resume bromine production after winter temporary

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

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

Company received an oral notification from the government for its Factory No.

8, which permitted Factory No.8 to resume production in

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

15, 2024, until February 12, 2025.

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.

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

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.

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.

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,

8 unchanged sentences

Chemical factory.

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

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

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 units.

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.

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

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

[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.

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 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 gas.

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.

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.

Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC

(“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report

on Form 10-K for the fiscal year ended December 31, 2023, 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 Rule.

previously announced, on November 5, 2024, the Staff notified the Company that the bid price for the Common Stocks no longer satisfied

Nasdaq Listing Rule 5450(a) (1), the minimum bid price requirement applicable to The Nasdaq Global Select Market issuers.

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.

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 land issue.

Until these approvals have been received, the Company has 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

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.

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.

April 2022, Shouguang Hengde Salt Industry Co.

Ltd (“SHSI”), our subsidiary, was incorporated in Shandong Province, China,

for crude salt production and trading.

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 figures.

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

Ltd ( “SHSI”) entered into crude

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

(“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 2024.

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

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.

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 2.2 of the

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 2.2 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;

(2) the balance shall be paid in cash before December

December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller E, pursuant to which the Article 2.2 of the

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.

These shares 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.

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.

2 unchanged sentences

its Common Stocks to The Nasdaq Capital Market.

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 Stocks from The Nasdaq Global

Select Market to The Nasdaq Capital Market took effect with the opening 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.”

November 12, 2025, the Company issued a press release providing certain updates on its hearing scheduling process with the Nasdaq Hearings

The hearing did not take place because the Company subsequently regained compliance with the applicable Nasdaq listing requirement.

December 1, 2025, the Company received a letter from The Nasdaq Stock Market, LLC stating that the Company had regained compliance with

the minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).

Consequently, the hearing before the Hearings Panel scheduled to take place on December 9, 2025 has been cancelled.

The Company’s

securities continues to be listed and traded on The Nasdaq Stock Market.

December 2, 2025, the Company issued a press release announcing that it has regained compliance with the minimum bid price requirement

for continued listing on 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.

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.

current corporate structure chart is set forth in the following diagram:

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.

December 22, 2025 SYCI was sold.

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.

OF OPERATIONS

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

equity for the three-month periods ended March 31, 2026 and 2025.

of the Three-Month Periods Ended March 31, 2026 and 2025

March 31, 2026

March 31, 2025(Restated)

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

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

Interest expense

Interest income

Other expense, net

Loss on disposal of property, plant and equipment

(29,169,008 )

Loss before taxes

(34,306,028 )

and marketing expenses

labor and factory overheads incurred during plant shutdown

Income tax benefit

$ (33,097,918 )

and administrative expenses

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.

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

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.

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

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

Chemical Products

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 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 .

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.

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

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 )

before income taxes

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 )

Loss for the three-month period ended March 31, 2026 decreased to $3,926,381 from $4,670,180 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

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:

Revenue by Segment

Change Increase

and crude salt segments product sold in tonnes

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

the three-month periods ended March 31, 2026 and 2025, the net revenue for the crude salt segment 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.

$ (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 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.

the three-month periods ended March 31, 2026 and 2025, the net revenue for the natural gas segment was nil.

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

Percent Change

March 31, 2026

31, 2025(Restated)

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.

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

$2,353,412 for the three-month period ended March 31, 2026, an increase of $755,948 (or 47%) 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.

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:

Capacity (in tonnes)

period ended March 31, 2025

period ended March 31, 2026

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

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 three-month periods ended March 31, 2026 and 2025 the cost of revenue for the bromine segment was $2,283,326 and $1,533,224,

respectively.

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 three-month periods ended March 31, 2026 and 2025 the cost of revenue for the crude salt segment was $70,086 and $64,240,

respectively.

The increase in costs is mainly due to the unit cost of raw salt issued increased.

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 three-month periods ended March 31, 2026 and 2025 was nil.

of revenue for our natural gas segment for the three-month periods ended March 31, 2026 and 2025 was nil.

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

increase of $8,231, as compared to a gross profit of $6,983, or 0.4% of net revenue for the same period in 2025.

Profit (Loss) by Segment

31, 2025(Restated)

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.

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

of $4,945 per ton in the three-month period ended March 31, 2026 compared to $3,686 per ton in the three-month period ended March 31,

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.

the three-month period ended March 31, 2026, the gross profit margin for our crude salt segment was 40.9%, compared to 47.6% in the same

period in 2025, representing a 6.6% decrease.

For the three-month period ended March 31, 202 6,

the average selling price of raw salt decreased by 2% compared to the three-month period ended March 31, 2025.

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

Profit Margin

Gross Profit (Loss) Margin

$ (3,796,380 )

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 three-month periods ended March 31, 2026 and 2025, the gross profit margin for our chemical products segment was 0%.

the three-month periods ended March 31, 2026 and 2025, the gross profit margin for our natural gas segment was 0%.

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.

Sales and Marketing Expenses .

Sales and marketing expenses were $5,448 for the three-month period ended March 31, 2026,

an increase of $395 (or 8%) as compared to $5,053 for the same period in 2025

labor and factory overheads incurred during plant shutdown.

On September 1, 2017, the Company received notification from the government

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

5 unchanged sentences

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.

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 $1,323,101 for the three-month period ended March 31, 2026,

a decrease of $103,908 (or 7%) as compared to $1,427,009 for the same period in 2025.

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.

from Operations.

Loss from operations was $4,056,597 the three-month period ended March 31, 2026, compared to loss from operations

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

of $10,416,416 in the same period in 2024.

from Operations by Segment

31, 2025(Restated)

Loss from Operations by Segment

Six-Month Period Ended

June 30, 2025 (Restated)

Six-Month Period Ended

June 30, 2024

$ (3,508,547 )

$ (9,445,401 )

from operations before corporate costs

from operations

Chemical Products

Loss from operations before corporate costs

(10,146,029 )

Corporate costs

Loss from operations before taxes

$ (5,442,160 )

from operations from our bromine segment was $3,067,778 for the three-month period ended March 31, 2026, compared to loss from operations

$ (10,416,416 )

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

of $9,445,401 in the same period in 2024.

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

from operations from our crude salt segment was $727,679 for the three-month period ended March 31, 2026, compared to loss from operations

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

of $54,932 in the same period in 2024.

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

The increase in operating losses was mainly due to the depreciation resulting from the new acquisition

of crude salt assets in 2024.

products segment

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

of $361,892 in the same period in 2025.

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

from operations from our natural gas segment was $31,809 for the three-month period ended March 31, 2026, compared to loss from operations

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

operations of $654,078 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 income of $253,660 mainly represented interest income from loans 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 expense of $123,444 represented bank interest expense and interest on finance lease 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 $4,670,180 in

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.

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.

AND CAPITAL RESOURCES

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 increase

of $6,533,712 are reflected below.

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

The components of this

decrease of $2,339,081 are reflected below.

of Cash Flows

Period Ended March 31,

2025(Restated)

cash provided by/(used in) operating activities

Six-Month Period Ended June 30,

Net cash used in operating activities

$ (2,139,734 )

cash provided by investing activities

cash provided by financing activities

of exchange rate changes on cash and cash equivalents

increase(decrease) in cash and cash equivalents

Net cash used in investing activities

(28,923,642 )

the three-month period ended March 31, 2026, we met our working capital and capital investment requirements by using cash on hand.

Cash provided by (used in) Operating Activities

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

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, and 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.

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

$ (2,339,081 )

$ (61,856,355 )

the six-month period ended June 30, 2025, we met our working capital and capital investment requirements 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

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.

overall accounts receivable balance as of March 31, 2026 decreased by $594,979, as compared to those of December 31, 2025.

our accounts receivable as of June 30, 2025 and December 31, 2024.

June 30, 2025

December 31, 2024

Aged 1-30 days

Aged 31-60 days

Aged 61-90 days

Aged 91-120 days

Aged 121-150 days

Aged 151-180 days

Aged 181-210 days

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 evaluation on the financial

We perform ongoing credit evaluations on the financial

condition of our customers.

inventory consists of the following:

net inventory level as of March 31, 2026 decreased by $118,345, as compared to the net inventory level as of December 31, 2025.

materials increased by $36,030 as of March 31, 2026 as compared to December 31, 2025.

finished goods decreased by $154,375 as of March 31, 2026 as compared to December 31, 2025.

Cash Provided By Investing Activities

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 $5.54 million, offset by purchases of fixed assets of $0.52 million.

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

Cash Provided By Financing Activities

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 placement.

We have no financing activities for the three-month period ended March 31, 2025.

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.

had available cash of approximately $6,537,505 on March 31, 2026, all of which is in highly liquid current deposits earning no or little

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

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

1 unchanged sentence

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, risks associated with the

pandemic and the financial statement effect of potential impairment of acquired intangible assets, any of which could have a materially

adverse effect on our condition and results of operations.

In addition, if competition for acquisition candidates or operations were

to increase, the cost of acquiring businesses could increase 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.

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.

Obligations and Commitments

1 unchanged sentence

our consolidated financial statements.

Additional information regarding our contractual obligations and commitments as of March 31, 2026

Additional information regarding our contractual obligations and commitments on June 30, 2025

is provided in the notes to our consolidated financial statements.

14 unchanged sentences

These policies

and estimates are described in the Company’s Form 10-Q for the three months ended March 31, 2026.

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