Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2024

	Or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _________ to _________

Commission File Number: 001-34499

GULF RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada		13-3637458
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Level 11, Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong, China		262700
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: +86 (536) 567 0008

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, $0.0005 par value	GURE	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of November 19, 2024, the registrant had outstanding 10,726,924 shares of common stock, excluding 285,830 shares of treasury stock.

Table of Contents

Part I – Financial Information
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures about Market Risk	27
Item 4. Controls and Procedures	28
Part II – Other Information
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	29
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	30
Item 6. Exhibits	30
Signatures	31

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars)

	September 30, 2024 Unaudited			December 31, 2023 Audited
Current Assets
Cash	$	11,237,493		$	72,223,894
Accounts receivable ,net		1,186,880			4,865,696
Inventories, net		427,839			577,229
Prepayments and deposits		8,311,871			8,395,290
Other receivable		95,245			7,482
Total Current Assets		21,259,328			86,069,591
Non-Current Assets
Property, plant and equipment, net		150,680,984			122,188,023
Finance lease right-of use assets		80,144			83,115
Operating lease right-of-use assets		6,385,605			6,699,784
Prepaid land leases, net of current portion		9,823,607			9,772,170
Deferred tax assets ,net		5,655,626			1,859,025
Total non-current assets		172,625,966			140,602,117
Total Assets	$	193,885,294		$	226,671,708

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	15,775,145		$	8,833,936
Taxes payable-current		145,642			475,630
Advance from customer		—			42,705
Amount due to related parties		2,598,765			2,586,658
Finance lease liability, current portion		201,855			172,625
Operating lease liabilities, current portion		498,580			473,653
Total Current Liabilities		19,219,987			12,585,207
Non-Current Liabilities
Finance lease liability, net of current portion		1,103,707			1,312,950
Operating lease liabilities, net of current portion		7,036,482			7,525,255
Total Non-Current Liabilities		8,140,189			8,838,205
Total Liabilities	$	27,360,176		$	21,423,412

Commitment and Loss Contingencies	$	—		$	—

Stockholders’ Equity
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding	$	—		$	—
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 11,012,754 shares issued; and 10,726,924 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		24,623			24,623
Treasury stock; 285,830 shares as of September 30, 2024 and December 31, 2023 at cost		(1,372,673	)		(1,372,673	)
Additional paid-in capital		101,688,262			101,688,262
Retained earnings unappropriated		55,711,323			96,294,256
Retained earnings appropriated		26,667,097			26,667,097
Accumulated other comprehensive loss		(16,193,514	)		(18,053,269	)
Total Stockholders’ Equity		166,525,118			205,248,296
Total Liabilities and Stockholders’ Equity	$	193,885,294		$	226,671,708

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in U.S. dollars)

(UNAUDITED)


	Three-Month Period Ended September 30,						Nine -Month Period Ended September 30,
	2024			2023			2024			2023

NET REVENUE
Net revenue	$	2,242,365		$	5,865,615		$	5,932,596		$	23,173,404

OPERATING INCOME (EXPENSE)
Cost of net revenue		(4,071,616	)		(6,373,902	)		(11,303,519	)		(20,464,418	)
Sales and marketing expenses		(13,484	)		(14,428	)		(31,608	)		(42,850	)
Direct labor and factory overheads incurred during plant shutdown		(1,736,345	)		(1,007,689	)		(7,185,537	)		(4,471,954	)
General and administrative expenses		(1,002,529	)		(762,884	)		(2,409,957	)		(2,266,260	)
Other operating income (loss)		—			—			—			60,134
TOTAL OPERATING COSTS AND EXPENSE		(6,823,974	)		(8,158,903	)		(20,930,621	)		(27,185,348	)

PROFIT (LOSS) FROM OPERATIONS		(4,581,609	)		(2,293,288	)		(14,998,025	)		(4,011,944	)

OTHER INCOME (EXPENSE)
Interest expense		(21,191	)		(23,791	)		(70,835	)		(81,322	)
Interest income		6,220			57,758			77,071			201,127
Other expenses (income)		—			—			(29,173,011	)		—
INCOME(LOSS) BEFORE TAXES		(4,596,580	)		(2,259,321	)		(44,164,800	)		(3,892,139	)

INCOME TAX BENEFIT (EXPENSE)		1,103,697			483,524			3,581,867			876,779
NET PROFIT (LOSS)	$	(3,492,883	)	$	(1,775,797	)	$	(40,582,933	)	$	(3,015,360	)

COMPREHENSIVE INCOME (LOSS)
NET PROFIT (LOSS)	$	(3,492,883	)	$	(1,775,797	)	$	(40,582,933	)	$	(3,015,360	)
OTHER COMPREHENSIVE (LOSS) INCOME
- Foreign currency translation adjustments		3,102,876			2,247,978			1,859,755			(7,879,513	)
TOTAL COMPREHENSIVE (LOSS) INCOME	$	(390,007	)	$	472,181		$	(38,723,178	)	$	(10,894,873	)

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:	$	(0.33	)	$	(0.17	)	$	(3.78	)	$	(0.29	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:		10,726,924			10,431,924			10,726,924			10,431,924

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2024

(Expressed in U.S. dollars)


	Common stock																		Accumulated
	Number		Number		Number							Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT JUNE 30, 2024 (Unaudited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	59,204,206		$	26,667,097	$	(19,296,390	)	$	166,915,125
Translation adjustment		—		—		—		—		—			—		—			—		3,102,876			3,102,876
Net loss for three-month period ended September 30, 2024		—		—		—		—		—			—		(3,492,883	)		—		—			(3,492,883	)
BALANCE AT SEPTEMBER 30, 2024 (Unaudited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	55,711,323		$	26,667,097	$	(16,193,514	)	$	166,525,118

	Common stock																		Accumulated
	Number		Number		Number							Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT JUNE 30, 2023 (Unaudited)		10,717,754		10,431,924		285,830		24,476		(1,372,673	)		101,237,059	$	156,849,972		$	26,667,097	$	(23,154,780	)	$	260,251,151
Restricted shares		—		—		—		—		—			—		—			—		—			—
Translation adjustment		—		—		—		—		—			—		—			—		2,247,978			2,247,978
Net income for three-month period ended September 30, 2023		—		—		—		—		—			—		(1,775,797	)		—		—			(1,775,797	)
BALANCE AT SEPTEMBER 30, 2023 (Unaudited)		10,717,754		10,431,924		285,830		24,476		(1,372,673	)		101,237,059	$	155,074,175		$	26,667,097	$	(20,906,802	)	$	260,723,332

	Common stock																		Accumulated
	Number		Number		Number							Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT DECEMBER 31, 2023 (Audited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	96,294,256		$	26,667,097	$	(18,053,269	)	$	205,248,296
Translation adjustment		—		—		—		—		—			—		—			—		1,859,755			1,859,755
Net income for nine-month period ended September 30, 2024		—		—		—		—		—			—		(40,582,933	)		—		—			(40,582,933	)
BALANCE AT SEPTEMBER 30, 2024 (Unaudited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	55,711,323		$	26,667,097	$	(16,193,514	)	$	166,525,118

	Common stock																		Accumulated
	Number		Number		Number							Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT DECEMBER 31, 2022 (Audited)		10,717,754		10,431,924		285,830		24,476		(1,372,673	)		101,237,059	$	158,089,535		$	26,667,097	$	(13,027,289	)	$	271,618,205
Restricted shares		—		—		—		—		—			—		—			—		—			—
Translation adjustment		—		—		—		—		—			—		—			—		(7,879,513	)		(7,879,513	)
Net income for nine-month period ended September 30, 2023		—		—		—		—		—			—		(3,015,360	)		—		—			(3,015,360	)
BALANCE AT SEPTEMBER 30, 2023 (Unaudited)		10,717,754		10,431,924		285,830		24,476		(1,372,673	)		101,237,059	$	155,074,175		$	26,667,097	$	(20,906,802	)	$	260,723,332

Common Stock

Treasury Stock

Additional Paid-In Capital

Retained Earnings Unappropriated

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

(UNAUDITED)


	Nine-Month Period Ended September 30,
	2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net income(loss)	$	(40,582,933	)	$	(3,015,360	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization on capital lease		70,835			80,252
Depreciation and amortization		14,037,554			15,385,624
Unrealized translation difference		—			165,444
Deferred tax asset		(3,615,091	)		(1,002,511	)
Amortization of right-of-use asset		659,509			—
Loss on disposal of equipment		29,169,008			—
Changes in assets and liabilities:
Accounts receivable		3,677,653			3,132,796
Inventories		153,371			718,994
Prepayments and deposits		171,305			(3,947,311	)
Advance from customers		(42,545	)		—
Other receivables		(86,423	)		—
Accounts and Other payable and accrued expenses		(2,685,766	)		(1,503,845	)
Amount due to related Parties		—			—
Taxes payable		(330,299	)		(229,600	)
Operating lease		(889,641	)		85,129
Net cash (used in) provided by operating activities		(293,463	)		9,869,612

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(60,526,213	)		(15,197,648	)
Net cash from investing activities		(60,526,213	)		(15,197,648	)

CASH FLOWS USED IN FINANCING ACTIVITIES
Repayment of finance lease obligation		(264,094	)		(267,810	)
Net cash used in financing activities		(264,094	)		(267,810	)

EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		97,369			1,144,609
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(60,986,401	)		(4,451,237	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		72,223,894			108,226,214
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	11,237,493		$	103,774,977

	Periods Ended September 30,
	2024		2023
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the nine-month period ended September 30, 2024 for:
Paid for taxes	$	1,013,382	$	4,930,601
Interest on finance lease obligation	$	70,835	$	80,252
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Consolidation

The accompanying unaudited consolidated financial statements have been prepared by Gulf Resources, Inc. (“Gulf Resources”), a Nevada corporation and its subsidiaries (collectively, the “Company”).

The consolidated financial statements include the accounts of Gulf Resources, Inc. and its wholly-owned subsidiary, Upper Class Group Limited, a company incorporated in the British Virgin Islands, which owns 100% of Hong Kong Jiaxing Industrial Limited, a company incorporated in Hong Kong (“HKJI”). HKJI owns 100% of Shouguang City Haoyuan Chemical Company Limited (“SCHC”) which owns 100% of Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”) ,Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). All material intercompany transactions have been eliminated on consolidation.

(b) Nature of Business

The Company manufactures and trades bromine through its wholly-owned subsidiary, Shouguang City Haoyuan Chemical Company Limited (“SCHC”); manufactures and trades crude salt through its wholly-owned subsidiary, SHSI; and manufactures chemical products for use in the oil industry, pesticides, paper manufacturing industry and for human and animal antibiotics through its wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”) in the People’s Republic of China (“PRC”). DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in the PRC. DCHC’s business commenced trial operation in January 2019 but has temporarily suspended production insince May 2019 as required by the government to obtain project approval (see Note 1 (b)(iii)).

On March 11, 2020, the World Health Organization (WHO) officially declared COVID-19 a pandemic. While not fully quantifiable, the Company believes this situation did not have a material adverse impact on its operating results in the year of 2021. In 2022, COVID may have had a slightly more effect. The government conducted frequent unannounced inspections, which caused some disruption to production. In addition, the Company believes the government’s focusing on COVID may have slightly delayed the approval process for one or more of the closed factories. The virus outbreak and resulting supply chain issues has impacted the overall Chinese economy and thus impacted demand from end customers. It has delayed the delivery of machinery and other equipment for the Company’s Yuxin Chemical factory causing a postponement in its completion and opening. The Company believes the virus outbreak has delayed the finalization of the Sichuan Province environmental plan, causing a further delay for the Company’s project in Sichuan Province.

(i) Bromine and Crude Salt Segments

In February 2019, the Company received a notification from the local government of Yangkou County that its Factory No. 1, No. 4, No. 7 and No. 9 passed inspection and could resume operations. In April 2019, Factory No.1, and Factory No.7 resumed operation.

On November 25, 2019, the government of Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the Company’s bromine facilities, including Factory No. 1 and Factory No. 7, to temporarily stop production from December 16, 2019 to February 10, 2020. Subsequently, due to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement of production. Subsequently, the Company received an approval dated February 27, 2020 issued by the local governmental authority allowing the Company to resume production after the winter temporary closure. Further, the Company received another approval from the Shouguang Yangkou People’s Government dated March 5, 2020 allowing the Company 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. 1 and No. 7 commenced trial production in mid-March 2020 and commercial production on April 3, 2020 and its Factories No. 4 and No. 9 commenced commercial production on May 6, 2020. The Company received an oral notification from the government for its Factory No. 8, which permits the Factory No. 8 to resume production in August 2022.

The Company is still waiting for governmental approval for Factories No. 2 and No. 10. To our knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, we may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories to satisfy the local government's requirements.

Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 10, 2022 until February 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.

In April 2022, Shouguang Hengde Salt Industry Co. Ltd, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading. This subsidiary was created in response to a new government policy that requires bromine and crude salt companies to have separate registrations. The creation of this subsidiary and the separation of bromine and crude salt does not impact sales or overall profits. However, the establishment of this subsidiary has resulting in a reallocation of costs between bromine and crude salt.

(ii) Chemical Segment

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 to the Bohai Marine Fine Chemical Industrial Park (“Bohai Park”). This was because the two plants were located in a residential area and their production activities impacted the living environment of the residents. This was as a result of the country’s effort to improve the development of the chemical industry, manage safe production and curb environmental pollution accidents effectively, and ensure the quality of the living environment of residents. All chemical enterprises which did not comply with the requirements of the safety and environmental protection regulations were ordered to shut down.

In December 2017, the Company secured from the government the land use rights for its chemical plants located at the Bohai Park and in June 2018, the Company presented a completed construction design draft and other related documents to the local authorities for approval. In January 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020 and basically completed the civil works by the end of June 2021. On November 15, 2021, the Company announced that due to the supply chain issues as well as the electric restrictions in China, the delivery of some equipment, the equipment installation and testing and beginning trial production at the chemical factory had been delayed. On February 22, 2022, the Company announced that discussions with the government have convinced management that the electricity restrictions were eased. Accordingly, the Company contacted its suppliers and expect to have the remainder of the equipment produced and delivered, so the Company can complete installation and begin testing and trial production.

The COVID restrictions and resulting national and international supply chain issues as well as governmental permit issues have caused delays in receiving some previously ordered machinery and equipment. The Company is working with its existing suppliers and may identify new suppliers so that it can complete construction of its factory based on accelerated delivery. Currently, the Company is unable to estimate when the construction can be completed and the production can begin.

On March 23, 2023, the Company issued a press release detailing the delays in the opening of its Yuxin chemical factory due to COVID and stricter government regulations. As noted in the press release, the Company believes that once all of the equipment is delivered, it will take 3 to 4 months to install the equipment. After installation, the testing process is anticipated to take 2 to 3 months, after which the Company will be in a position to apply for environmental and safety approval. After the Company has obtained environmental and safety approval, it will take us 4 months to conduct trial production, and then the Company may start commercial production.

On July 26, 2023, the Company announced that the delivery of the remaining equipment for its Yuxin chemical factory has been temporarily delayed and the Company will re-evaluate its chemical products strategy.

The Company believes the relocation process will cost approximately $69 million in total. The Company incurred relocation costs comprising prepaid land lease, professional fees related to the design of the new chemical factory, and progress payment and deposit for the construction of the new factory building in the amount of $45,584,344 and $45,584,344, which were recorded in the prepaid land leases and property, plant and equipment in the consolidated balance sheets as of September 30, 2024 and December 31, 2023. The Company does not believe the delay in opening the factory will materially impact the overall cost of the project.

(iii) Natural Gas Segment

In January 2017, the Company completed the first brine water and natural gas well field construction in Daying located in Sichuan Province, China, and commenced trial production in January 2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town, Daying County, Sichuan Province, whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project, and approvals for safety production inspection, environmental protection assessment, and to solve the related 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 the governmental planning has been finalized.

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The most significant accounting estimates with regard to these consolidated financial statements that require the most significant and subjective judgments include, but are not limited to, useful lives of property, plant and equipment,recoverability of long-lived assets, determination of impairment losses, assessment of market value of inventories and provision for inventory obsolescence, allowance for doubtful accounts, recognition and measurement of deferred income taxes, valuation allowance for deferred tax assets, and assumptions used for the valuation of share based payments. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with original maturities of three months or less.Because of short maturity of these investments, the carrying amounts approximate their fair values.

(e) Allowance for Doubtful Accounts

We make estimates of the uncollectibility of accounts receivable, especially analyzing accounts receivable and historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms, when evaluating the adequacy of the allowance for doubtful accounts. Credit evaluations are undertaken for all major sale transactions before shipment is authorized. On a quarterly basis, we evaluate aged items in the accounts receivable aging report and provide an allowance in an amount we deem adequate for doubtful accounts. If management were to make different judgments or utilize different estimates, material differences in the amount of our reported operating expenses could result.

(f) Concentration of Credit Risk

The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and cash and cash equivalents. Substantially all of the Company’s cash and cash equivalents are maintained with financial institutions in the PRC, namely, Industrial and Commercial Bank of China Limited, China Merchants Bank Company Limited and Sichuan Rural Credit Union, which are not insured or otherwise protected. The Company placed $11,237,493 and $72,223,894 with these institutions as of September 30, 2024 and December 31, 2023, respectively. The Company has not experienced any losses in such accounts in the PRC.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(g) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures for betterment of existing facilities or equipment are capitalized and depreciated, when available for intended use, using the straight-line method at rates sufficient to depreciate such costs less 5% residual value over the estimated productive lives. All other ordinary repair and maintenance costs are expensed as incurred.

Mineral rights are recorded at cost less accumulated depreciation and any impairment losses. Mineral rights are amortized ratably over the term of the lease, or the equivalent term under the units of production method, whichever is shorter.

Construction in process primarily represents direct costs of construction of property, plant and equipment. Costs incurred are capitalized and transferred to property, plant and equipment upon completion and depreciation will commence when the completed assets are placed in service.

The Company’s depreciation and amortization policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

Minimum Maximum		Useful life (in years)
Buildings (including salt pans)		8 - 20
Plant and machinery (including protective shells, transmission channels and ducts)		3 - 8
Motor vehicles Motor Vehicles		5
Furniture, fixtures and equipment		3 - 8

Property, plant and equipment under the capital lease are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, the term of the lease.

Producing oil and gas properties are depreciated on a unit-of-production basis over the proved developed reserves. Common facilities that are built specifically to service production directly attributed to designate oil and gas properties are depreciated based on the proved developed reserves of the respective oil and gas properties on a pro-rata basis. Common facilities that are not built specifically to service identified oil and gas properties are depreciated using the straight-line method over their estimated useful lives. Costs associated with significant development projects are not depreciated until commercial production commences and the reserves related to those costs are excluded from the calculation of depreciation.

(h) Retirement Benefits

Pursuant to the relevant laws and regulations in the PRC, the Company participates in a defined contribution retirement plan for its employees arranged by a governmental organization. The Company makes contributions to the retirement plan at the applicable rate based on the employees’ salaries. The required contributions under the retirement plans are charged to the condensed consolidated statement of loss on an accrual basis when they are due. The Company’s contributions totaled $99,035 and $121,941 for the three-month period ended September 30, 2024 and 2023, respectively, and totaled $322,448 and $405,664 for the nine-month period ended September 30, 2024 and 2023, respectively.

(i) Revenue Recognition

Net revenue is net of discount and value added tax and comprises the sale of bromine, crude salt and chemical products. Revenue is recognized when the control of the promised goods is transferred to the customers in an amount that reflects the consideration that the Company expects to receive from the customers in exchange for those goods. The acknowledgement of receipt of goods by the customers is when control of the product is deemed to be transferred. Invoicing occurs upon acknowledgement of receipt of the goods by the customers. Customers have no rights to return the goods upon acknowledgement of receipt of goods. Revenue from contracts with customers is disaggregated in Note 14.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(j) Recoverability of Long-lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-35“Impairment or Disposal of Long-lived Assets”, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable or that the useful lives of those assets are no longer appropriate. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment.

The Company determines the existence of such impairment by measuring the expected future cash flows (undiscounted and without interest charges) and comparing such amount to the carrying amount of the assets. An impairment loss, if one exists, is then measured as the amount by which the carrying amount of the asset exceeds the discounted estimated future cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value of such assets less costs to sell. Asset impairment charges are recorded to reduce the carrying amount of the long-lived asset that will be sold or disposed of to their estimated fair values. Charges for the asset impairment reduce the carrying amount of the long-lived assets to their estimated salvage value in connection with the decision to dispose of such assets.

For the three and nine months period ended September 30, 2024 and 2023, the Company determined that there were no events or circumstances indicating possible impairment of its long-lived assets.

(k) Basic and Diluted Earnings per Share of Common Stock

Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock. Anti-dilutive common stock equivalents which were excluded from the calculation of number of dilutive common stock equivalents amounted to 0 and 0 shares for the three-month periods ended September 30, 2024 and 2023, respectively.

Because the Company reported a net loss for the three-month periods ended September 30, 2024 and 2023, common stock equivalents including stock options and warrants were anti-dilutive, therefore the amounts reported for basic and diluted loss per share were the same.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(l) Reporting Currency and Translation

The financial statements of the Company’s foreign subsidiaries are measured using the local currency, Renminbi (“RMB”), as the functional currency; whereas the functional currency and reporting currency of the Company is the United States dollar (“USD” or “$”).

As such, the Company uses the “current rate method” to translate its PRC operations from RMB into USD, as required under FASB ASC 830 “Foreign Currency Matters”. The assets and liabilities of its PRC operations are translated into USD using the rate of exchange prevailing at the balance sheet date. The capital accounts are translated at the historical rate. Adjustments resulting from the translation of the balance sheets of the Company’s PRC subsidiaries are recorded in stockholders’ equity as part of accumulated other comprehensive loss. The statement of loss and comprehensive loss is translated at average rate during the reporting period. Gains or losses resulting from transactions in currencies other than the functional currencies are recognized in net loss for the reporting periods as part of general and administrative expense. The statement of cash flows is translated at average rate during the reporting period, with the exception of the consideration paid for the acquisition of business which is translated at historical rates.

(m) Foreign Operations

All of the Company’s operations and assets are located in PRC. The Company may be adversely affected by possible political or economic events in this country. The effect of these factors cannot be accurately predicted.

(n) Inventories.

Inventories are stated at the lower of cost, determined on a first-in first-out cost basis, or net realizable value. Costs of work-in-progress and finished goods comprise direct materials, direct labor and an attributable portion of manufacturing overhead. Net realizable value is based on estimated selling price less costs to complete and selling expenses.

(o) Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease and finance lease ROU assets and liabilities are recognized at January 1, 2019 based on the present value of lease payments over the lease term discounted using the rate implicit in the lease. In cases where the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company does not recognize operating lease ROU assets and liabilities arising from lease arrangements with lease term of twelve months or less.

(p) Stock-based Compensation

Stock-based awards issued to employees are recorded at their fair values estimated at grant date using the Black-Scholes model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. Consistent with the accounting requirement for employee stock-based awards, nonemployee stock-based awards are measured at the grant-date fair value of the equity instruments that the Company is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

The Company has elected to account for the forfeiture of stock-based awards as they occur.

(q) Loss Contingencies

The Company accrues for loss contingencies relating to legal matters, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and could be reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to accruals are reflected in earnings (loss) in the period in which different facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of such liabilities may be materially different from previous estimates.

(r) Income Tax

The Company accounts for income taxes in accordance with the Income Taxes Topic of the FASB ASC, which requires the use of the liability method of accounting for deferred income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their reported amounts at each period end. Deferred tax assets and liabilities are measured using tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The deferred income tax effects of a change in tax rates are recognized in the period of enactment. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on its technical merits. Interests and penalties associated with unrecognized tax benefits are included within the (benefit from) provision for income tax in the consolidated statement of income (loss).

(s) New Accounting Pronouncements

Recent accounting pronouncements adopted

There were no recent accounting pronouncements adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. For public entities, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For the Company which is a smaller reporting company, ASU No. 2019-10 extends the effective dates for two years. The Company is currently evaluating the effect of this on the condensed consolidated financial statements and related disclosure.

(t) Fair Value Measurement

The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.

ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability.

ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for identical or similar assets and liabilities in active markets or in inactive markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The carrying amounts of the Company’s financial instruments approximate their fair values because of their short-term nature. The Company’s financial instruments include cash, accounts receivable, amounts due to related parties, accounts payable and other current payables. There were no material unrecognized financial assets and liabilities as of September 30, 2024 and 2023.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable net consist of:

	September 30, 2024			December 31, 2023

Accounts receivable	$	1,212,209		$	4,890,756
Allowance for doubtful debt		(25,329	)		(25,060	)
Accounts receivable, net	$	1,186,880		$	4,865,696

The overall accounts receivable balance as of September 30, 2024 decreased by $3,678,816, as compared to those of December 31, 2023. We have policies in place to ensure that sales are made to customers with an appropriate credit history. We perform ongoing credit evaluation on the financial condition of our customer.

NOTE 3 – INVENTORIES

Inventories consist of:

	September 30, 2024			December 31, 2023

Raw materials	$	29,833		$	32,840
Finished goods		660,458			804,046
Less: impairment		(262,452	)		(259,657	)
Inventory, net	$	427,839		$	577,229

As of September 30, 2024 and December 31, 2023, the reserve for inventory impairment was due to exchange rate change.

NOTE 4 – PREPAID LAND LEASES

The Company has the rights to use certain parcels of land located in Shouguang, Shandong, PRC, through lease agreements signed with local townships or the government authority. The production facilities and warehouses of the Company are located on these parcels of land. The lease term ranges from ten to fifty years. Some of the lease contracts were paid in one lump sum upfront and some are paid annually at the beginning of each anniversary date. These leases have no purchase option at the end of the lease term and were classified as operating leases prior to and as of January 1, 2019 when the new lease standard was adopted. Prior to January 2019, the prepaid land lease was amortized on a straight line basis. As of January 1, 2019, all the leases in which term has commenced and were in use were classified as operating lease right-of-use assets (“ROU”). See Note 6.

In December 2017, the Company paid a one lump sum upfront amount of $ 9,075,213 for a 50-year lease of a parcel of land at Bohai Marine Fine Chemical Industrial Park (“Bohai”) for the new chemical factory under construction. There is no purchase option at the end of the lease term. This was classified as an operating lease prior to and as of January 1, 2019. The land use certificate was issued on October 25, 2019. The lease term expires on August 12, 2069. The amount paid was recorded as prepaid land leases, net of current portion in the consolidated balance sheet as of September 30 2024 and December 31, 2023. As of September 30, 2024, the prepaid land lease increased to $9,442,751 due to an additional amount paid for stamp duty and related land use rights fees. Amortization of this prepaid land lease will commence when the chemical factory is completed and placed in service.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Mineral rights	$	2,752,312		$	2,722,997
Buildings		70,248,967			29,863,200
Plant and machinery		147,561,812			185,738,906
Furniture, fixtures and office equipment		1,472,228			1,456,547
Motor vehicles		127,430			126,072
Construction in process		10,418,458			10,307,491
Total		232,581,207			230,215,213
Less: Accumulated depreciation and amortization		(81,900,223	)		(108,027,190	)
Impairment		—			—
Net book value	$	150,680,984		$	122,188,023

The Company has certain buildings and salt pans erected on parcels of land located in Shouguang, PRC, and such parcels of land are collectively owned by local townships or the government authority. The Company has not been able to obtain property ownership certificates over these buildings and salt pans. The aggregate carrying values of these properties situated on parcels of the land are $7,870,846 and $8,346,742 as at September 30, 2024 and December 31, 2023, respectively.

During the three-month period ended September 30, 2024, depreciation and amortization expense totaled $4,522,525 ,of which $1,211,694, $203,244 and $3,107,587 were recorded in direct labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue. During the nine-month period ended September 30, 2024,depreciation and amortization expense totaled $13,980,751 of which $5,601,791, $605,945 and $7,773,015 were recorded in direct labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

During the three-month period ended September 30, 2023, depreciation and amortization expense totaled $4,787,568 .of which $760,400, $166,042 and $3,861,126 were recorded in direct labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue. During the nine-month period ended September 30, 2023,depreciation and amortization expense totaled $15,381,658, of which $3,502,188, $765,921 and $11,113,549 were recorded in direct labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

NOTE 6 – FINANCE LEASE RIGHT-OF-USE ASSETS

Property, plant and equipment under finance leases, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Buildings Buildings	$	213,868		$	211,590
Total		213,868			211,590
Less: Accumulated depreciation and amortization		(133,724	)		(128,475	)
Net book value	$	80,144		$	83,115

The above buildings erected on parcels of land located in Shouguang, PRC, are collectively owned by local townships. The Company has not been able to obtain property ownership certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of land.

During the three and nine months period ended September 30, 2024, depreciation and amortization expense totaled $1,268 and $3,808, respectively, which was recorded in direct labor and factory overheads incurred during plant shutdown.

During the three and nine months period ended September 30, 2023, depreciation and amortization expense totaled $1,291 and $3,966, respectively, which was recorded in direct labor and factory overheads incurred during plant shutdown.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 7 – OPERATING LEASE RIGHT–OF USE ASSETS

The Company has the rights to use certain parcels of land located in Shouguang, PRC, through lease agreements signed with local townships or the government authority. For parcels of land that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels of land of which the Company cannot obtain land use rights certificates covers a total of approximately 34.95 square kilometers with an aggregate operating lease right-of-use assets amount of $7,642,937 as at September 30, 2024.

As of September 30, 2024, the total operating lease ROU assets was $6,385,605.

The total operating lease cost for the nine-month period ended September 30, 2024 and 2023 was $659,509 and $706,033.

NOTE 8 – PAYABLE AND ACCRUED EXPENSES

Accounts payable, other payable and accrued expenses consist of the following:

	September 30,		December 31,
	2024		2023
Accounts payable	$	128,696	$	206,984
Salary payable		215,711		216,253
Social security insurance contribution payable		174,253		172,398
Other payable-related party		—		88,086
Accrued expense for construction		5,447,458		5,389,437
Accrued expense-others		9,809,027		2,760,778
Total	$	15,775,145	$	8,833,936

Accrued expense-others mainly include of the shares to be paid for the acquisition of salt plant $7,878,182 and others

NOTE 9 – RELATED PARTY TRANSACTIONS

On September 25, 2012, the Company purchased five floors of a commercial building in the PRC, through SYCI, from Shandong Shouguang Vegetable Seed Industry Group Co., Ltd. (the “Seller”) at a cost of approximately $5.7 million in cash, of which Mr. Ming Yang, the former chairman of the board of directors of the Company, had a 99% equity interest in the Seller. During the first quarter of 2018, the Company entered into an agreement with the Seller, a related party, to provide property management services for an annual amount of approximately $87,927 for five years from January 1, 2023 to December 31, 2027. The expense associated with this agreement for the three and nine months ended September 30, 2024 was approximately $22,258 and $66,125. The expense associated with this agreement for the three and nine months ended September 30, 2023 was approximately $21,748 and $66,028.

NOTE 9 – RELATED PARTY TRANSACTIONS – Continued

Related parties

Name of related parties	Position
Yang Ming	Former Chairman Of the Board
Liu Xiaobin	Chief Executive Officer and Chairman of the Board
Li Min	Chief Financial Officer
Miao Naihui	Chief Operating Officer,Director

	September 30,		December 31,
	2024		2023
Amount due to related parties:
Yang Ming	$	420,969	$	416,484
Liu Xiaobin		887,214		887,214
Li Min		645,291		641,480
Miao Naihui		645,291		641,480
Total	$	2,598,765	$	2,586,658

Considering that the Company has not performed well in recent years, the Company and its executive officers mutually agreed and to returned all, or a portion of their cash compensation earned for their services with the Company, which may be considered for future compensation should the Company improve its results of operations.

NOTE 10 – TAXES PAYABLE

	September 30,		December 31,
	2024		2023
Land use tax payable	$	19,817	$	24,689
Value added tax and other taxes payable		125,825		450,941
Total	$	145,642	$	475,630

NOTE 11 – LEASE LIABILITIES-FINANCE AND OPERATING LEASE

The components of finance lease liabilities were as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total finance lease liability		6.7%	$	1,305,562		$	1,485,575
Less: Current portion				(201,855	)		(172,625	)
Finance lease liability, net of current portion			$	1,103,707		$	1,312,950

Interest expenses from capital lease obligations amounted to $21,191 and $23,791 for the three-month period ended September 30, 2024 and 2023, respectively, which were charged to the condensed consolidated statement of income (loss). Interest expenses from capital lease obligations amounted to $70,835 and $80,252 for the nine-month period ended September 30, 2024 and 2023, respectively, which were charged to the condensed consolidated statement of income (loss).

The components of operating lease liabilities as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total Operating lease liabilities		4.89%	$	7,535,062		$	7,998,908
Less: Current portion				(498,580	)		(473,653	)
Operating lease liabilities, net of current portion			$	7,036,482		$	7,525,255

The weighted average remaining operating lease term at September 30, 2024 was 18 years and the weighted average discounts rate was 4.89%. Lease payments for the three-month period ended September 30, 2024 and 2023, respectively, were $66,387 and $64,866. Lease payments for the nine-month period ended September 30, 2024 and 2023, respectively, were $823,608 and $824,572.

Maturities of lease liabilities were as follows:

	Financial lease			Operating Lease
Payable within:
the next 12 months	$	267,867		$	842,770
the next 13 to 24 months		267,867			847,056
the next 25 to 36 months		267,867			854,820
the next 37 to 48 months		267,867			859,449
the next 49 to 60 months		267,867			826,953
thereafter		267,867			8,535,418
Total		1,607,202			12,766,466
Less: Amount representing interest		(301,640	)		(5,231,404	)
Present value of net minimum lease payments	$	1,305,562		$	7,535,062

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 12 –– EQUITY

Restricted Shares

A restricted stock award (“RSA”) is an award of common shares that is subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of nonvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company's common stock on the grant date.

Retained Earnings – Appropriated

In accordance with the relevant PRC regulations and the PRC subsidiaries’ Articles of Association, the Company’s PRC subsidiaries are required to allocate its profit after tax to the following reserve:

Statutory Common Reserve Funds

SCHC, SYCI, SHSI and DCHC are required each year to transfer at least 10% of the profit after tax as reported under the PRC statutory financial statements to the Statutory Common Reserve Funds until the balance reaches 50% of the registered share capital. This reserve can be used to make up any loss incurred or to increase share capital. Except for the reduction of losses incurred, any other application should not result in this reserve balance falling below 25% of the registered capital. As at September 30, 2024 GULF RESOURCES 'statutory provident fund stood at $26.67 million.

NOTE 13 – TREASURY STOCK

As of September 30, 2024 and December 31, 2023, the number of treasury stock of the Company was 285,830 and 285,830, respectively.

NOTE 14 – STOCK-BASED COMPENSATION

Pursuant to the Company’s 2019 Omnibus Equity Incentive Plan adopted and approved in 2019 (“2019 Plan”), awards under the 2019 Plan is limited in the aggregate to 2,068,398 shares of our common stock, inclusive of the awards that were previously issued and outstanding under the Company’s 2007 Equity Incentive Plan, as amended (the “2007 Plan”). Upon adoption and approval of the 2019 Plan, the 2007 Plan was frozen, no new awards will be granted under the 2007 Plan, and outstanding awards under the 2007 Plan will continue to be governed by the terms and condition of the 2007 Plan and applicable award agreement. As of September 30, 2024, the number of shares of the Company’s common stock available for grant of awards under the 2019 Plan was 561,801 shares.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The risk free rate is based on the yield-to-maturity in continuous compounding of the US Government Bonds with the time-to-maturity similar to the expected tenor of the option granted, volatility is based on the annualized historical stock price volatility of the Company, and the expected life is based on the historical option exercise pattern.

For the three months ended September 30, 2024 and 2023, total compensation costs for options issued recorded in the consolidated statement of loss were $0. There were no related tax benefits as a full valuation allowance was recorded in the three months ended September 30, 2024 and 2023.

The following table summarizes all Company stock option transactions between January 1, 2024 and September 30, 2024.

Number of Option
and Warrants
Outstanding and exercisable

Weighted- Average Exercise price of Option
and Warrants

Range of
Exercise Price per Common Share

Balance, January 1, 2024

—

Granted during the period

—

Exercised during the period

—

Expired during the period

—

Balance, September 30, 2024

—

Stock Options and Warrants Outstanding and Exercisable

Weighted Average

Remaining

Outstanding at September 30, 2024

Range of

Exercise Prices

Contractual Life

(Years)

Outstanding and exercisable

—

All options exercisable and outstanding at September 30, 2024 are fully vested. As of September 30, 2024 there was no unrecognized compensation cost related to outstanding stock options,

The aggregate intrinsic value of options outstanding and exercisable as of September 30, 2024 was $0.

During the three and nine months ended September 30, 2024 and 2023, there were no options exercised.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 15 – OTHER EXPENSES

In September 2024, the Company retired some fixed assets including aqueducts and wells for a total amount approximately $29,169,008. This decision was made due to the following reasons: (1) the aqueducts exhibits serious water seepage, posed potential damage, and could lead to environmental pollution; (2) the wells were found to have reduced water flow, low brine content and high energy consumption.

NOTE 16 – INCOME TAXES

The Company utilizes the asset and liability method of accounting for income taxes in accordance with FASB ASC 740-10.

(a) United States (“US”)

United States

Gulf Resources, Inc. may be subject to the United States of America Tax laws at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable income for the three-month and nine-month periods ended September 30, 2024 and 2023, and management believes that its earnings are permanently invested in the PRC.

(b) British Virgin Islands (“BVI”)

Upper Class Group Limited, a subsidiary of Gulf Resources, Inc., was incorporated in the BVI and, under the current laws of the BVI, it is not subject to tax on income or capital gain in the BVI. Upper Class Group Limited did not generate assessable profit for the three-month and nine-month periods ended September 30, 2024 and 2023.

Hong Kong

HKJI, a subsidiary of Upper Class Group Limited, was incorporated in Hong Kong and is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. No provision for income tax has been made as it has no taxable income for the three-month and nine-month periods ended September 30, 2024 and 2023. The applicable statutory tax rates for the three-month and nine-month periods ended September 30, 2024 and 2023 are 16.5%. There is no dividend withholding tax in Hong Kong.

(d) PRC

PRC

Enterprise income tax (“EIT”) for SCHC, SYCI, SHSI and DCHC in the PRC is charged at 25% of the assessable profits.

The operating subsidiaries SCHC is a wholly foreign-owned enterprises (“FIE”), SYCI, DCHC, and SHSI are incorporated in the PRC and are subject to PRC Local Income Tax Law. The PRC tax losses may be carried forward to be utilized against future taxable profit for ten years for High-tech enterprises and small and medium-sized enterprises of science and technology and for five years for other companies. Tax losses of the operating subsidiaries of the Company may be carried forward for five years.

On February 22, 2008, the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) jointly issued Cai Shui [2008] Circular 1 (“Circular 1”). According to Article 4 of Circular 1, distributions of accumulated profits earned by a FIE prior to January 1, 2008 to foreign investor(s) in 2008 will be exempted from withholding tax (“WHT”) while distribution of the profit earned by an FIE after January 1, 2008 to its foreign investor(s) shall be subject to WHT at 5% effective tax rate.

As of September 30, 2024 and December 31, 2023, the accumulated distributable earnings under the Generally Accepted Accounting Principles (GAAP”) of PRC that are subject to WHT are $46,286,602 and $87,160,228, respectively. Since the Company intends to reinvest its earnings to further expand its businesses in mainland China, its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, as of September 30, 2024 and December 31, 2023, the Company has not recorded any WHT on the cumulative amount of distributable retained earnings of its foreign invested enterprises that are subject to WHT in China. As of September 30, 2024 and December 31, 2023, the unrecognized WHT are $1,342,345 and $3,396,379, respectively.

The Company’s income tax returns are subject to the various tax authorities’ examination. The federal, state and local authorities of the United States may examine the Company’s income tax returns filed in the United States for three years from the date of filing. The Company’s US income tax returns since 2016 are currently subject to examination.

Inland Revenue Department of Hong Kong (“IRD”) may examine the Company’s income tax returns filed in Hong Kong for seven years from date of filing. For the years 2012 through 2019, HKJI did not report any taxable income. It did not file any income tax returns during these years except for 2014 and 2018. For companies which do not have taxable income, IRD typically issues notification to companies requiring them to file income tax returns once in every four years. The tax returns for 2014 and 2018 have been examined, and there is no Hong Kong Profits Tax was charged.

The components of the income tax benefit from continuing operations are:


	Three-Month Period Ended September 30,				Nine-Month Period Ended September 30,
	2024		2023		2024			2023
Current taxes – PRC	$	—	$	—	$	(33,224	)	$	—
Deferred tax – PRC entities		1,103,697		483,524		3,615,091			876,779
Total Income tax (expenses) benefits	$	1,103,697	$	483,524	$	3,581,867		$	876,779

Significant components of the Company’s deferred tax assets and liabilities at September 30, 2024 and December 31, 2023 are as follows:

	September 30,			December 31,
	2024			2023
Deferred tax liabilities	$	—		$	—

Deferred tax assets:
Exploration costs		1,776,740			1,757,816
PRC tax losses		15,718,721			11,941,045
US federal net operating loss		1,765,251			1,694,013
Total deferred tax assets		19,260,712			15,392,874
Valuation allowance		(13,605,086	)		(13,533,849	)
Net deferred tax asset	$	5,655,626		$	1,859,025

The decrease in valuation allowance for the three-month period ended September 30, 2024 is $14,209.

The decrease in valuation allowance for the three-month period ended September 30, 2023 is $12,974.

The decrease in valuation allowance for the nine-month period ended September 30, 2024 is $71,237.

The decrease in valuation allowance for the nine-month period ended September 30, 2023 is $233,212.

There were no unrecognized tax benefits and accrual for uncertain tax positions as of September 30, 2024 and December 31, 20232 and no amounts accrued for penalties and interest for the three and nine months ended September 30, 2024 and 2023.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 17 – BUSINESS SEGMENTS

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes share-based compensation expense, certain corporate costs and other income not associated with the operations of the segment. These corporate costs (income) are separately stated below and also include costs that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit. The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of its segments. All the customers are located in PRC.

Three-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total Segment Total			Corporate Corporate			Total
Net revenue (external customers)	$	1,571,313		$	654,039		$	—		$	17,013		$	2,242,365		$	—		$	2,242,365
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(4,029,999	)		(102,657	)		(339,038	)		(39,072	)		(4,510,766	)		(70,843	)		(4,581,609	)
Income tax benefit (expense)		1,001,067			18,020			84,610			—			1,103,697			—			1,103,697
Income (loss) from operations after income tax benefit (expense)		(3,028,932	)		(84,637	)		(254,428	)		(39,072	)		(3,407,069	)		(70,843	)		(3,477,912	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		3,818,547			649,997			68,221			33,478			4,570,243			—			4,570,243
Capital expenditures		—			—			—			—			—			—			—

Three-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	4,908,152		$	889,556		$	—		$	67,907	$	5,865,615		$	—		$	5,865,615
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(2,143,203	)		500,469			(397,410	)		4,156		(2,035,988	)		(257,300	)		(2,293,288	)
Income tax benefit (expense)		516,927			(125,731	)		92,328			—		483,524			—			483,524
Income (loss) from operations after income tax benefit (expense)		(1,626,276	)		374,738			(305,082	)		4,156		(1,552,464	)		(257,300	)		(1,809,764	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		4,507,616			180,121			67,692			33,430		4,788,859			—			4,788,859
Capital expenditures		15,149,296			—			—			—		15,149,296			—			15,149,296

* Certain common production overheads, operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in SCHC were split by reference to the average selling price and production volume of the respective segment until April 2022. Commencing May 2022, costs were assigned to the two subsidiaries (SCHC and SHSI) by independent accounting.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 17 – BUSINESS SEGMENTS – Continued

Nine-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total			Corporate			Total
Net revenue (external customers)	$	4,576,744		$	1,294,645		$	—		$	61,207		$	5,932,596		$	—		$	5,932,596
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(13,475,400	)		(47,725	)		(993,116	)		(140,554	)		(14,656,795	)		(341,230	)		(14,998,025	)
Income tax benefit (expense)		3,361,390			(15,204	)		235,681			—			3,581,867			—			3,581,867
Income (loss) from operations after income tax benefit (expense)		(10,114,010	)		(62,929	)		(757,435	)		(140,554	)		(11,074,928	)		(341,230	)		(11,416,158	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		12,718,202			1,013,663			204,892			100,797			14,037,554			—			14,037,554
Capital expenditures		28,923,642			31,602,571			—			—			60,526,213			—			60,526,213

Nine-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	20,734,871		$	2,287,672		$	—		$	150,861	$	23,173,404		$	—		$	23,173,404
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(3,340,404	)		904,482			(1,231,302	)		14,011		(3,653,213	)		(358,731	)		(4,011,944	)
Income tax benefit (expense)		800,170			(228,002	)		304,611			—		876,779			—			876,779
Income (loss) from operations after income tax benefit (expense)		(2,540,234	)		676,480			(926,691	)		14,011		(2,776,434	)		(358,731	)		(3,135,165	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		14,521,943			553,141			207,878			102,662		15,385,624			—			15,385,624
Capital expenditures		15,197,648			—			—			—		15,197,648			—			15,197,648

* Certain common production overheads, operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in SCHC were split by reference to the average selling price and production volume of each respective segment through April 2022. Commencing May 2022, costs were assigned to the two subsidiaries (SCHC and SHSI) by independent accounting.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 17 – BUSINESS SEGMENTS – Continued


	Three-Month Period Ended September 30,						Nine-Month Period Ended September 30,
Reconciliations	2024			2023			2024			2023
Total segment operating Income (loss)	$	(4,510,766	)	$	(2,035,988	)	$	(14,656,795	)	$	(3,653,213	)
Corporate costs		(70,843	)		(65,148	)		(341,230	)		(193,287	)
Unrealized gain on translation of intercompany balance		—			(192,152	)		—			(165,444	)
Income (loss) from operations		(4,581,609	)		(2,293,288	)		(14,998,025	)		(4,011,944	)
Other income, net of expense		(14,971	)		33,967			6,236			119,805
Other Expenses		—			—			(29,173,011	)		—
Income (loss) before taxes	$	(4,596,580	)	$	(2,259,321	)	$	(44,164,800	)	$	(3,892,139	)

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	188	$	243	$	—	$	431		19.2	%
	2	Shandong Brother Technology Limited	$	190	$	233	$	—	$	423		18.9	%
	3	Shouguang Weidong Chemical Company Limited	$	189	$	178	$	—	$	367		16.4	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	543	$	462	$	—	$	1,005		16.9	%
	2	Shandong Brother Technology Limited	$	515	$	447	$	—	$	962		16.2	%
	3	Shouguang Weidong Chemical Company Limited	$	516	$	386	$	—	$	902		15.2	%

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Brother Technology Limited	$	766	$	309	$	—	$	1,075		18.5	%
	2	Shandong Morui Chemical Company Limited	$	769	$	298	$	—	$	1,067		18.4	%
	3	Shouguang Weidong Chemical Company Limited	$	772	$	282	$	—	$	1,054		18.2	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	3,166	$	842	$	—	$	4,008		17.4	%
	2	Shandong Brother Technology Limited	$	3,077	$	768	$	—	$	3,845		16.7	%
	3	Shouguang Weidong Chemical Company Limited	$	3,087	$	677	$	—	$	3,764		16.4	%
	4	Shandong Shouguangshen Runfa Marine Chemical Company Limited	$	2,532	$	—	$	—	$	2,532		11	%

NOTE 18 – CUSTOMER CONCENTRATION

Revenue

Customer Concentration

Product

During the nine-month period ended September 30, 2024, the Company sold 62.9% of its products to its top five customers. As of September 30, 2024, amounts due from these customers were $948,003.

During the nine-month period ended September 30, 2023, the Company sold 68.4% of its products to its top five customers. As of September 30, 2023, amounts due from these customers were $1,485,777.

NOTE 19 – MAJOR SUPPLIERS

Product Concentration

Cost of Goods

During the nine-month period ended September 30, 2024 the Company purchased 100% of its raw materials from its top four suppliers. As of September 30, 2024, amounts due to those suppliers were $127,698.

During the nine-month period ended September 30, 2023 the Company purchased 100% of its raw materials from its top five suppliers. As of September 30, 2023, amounts due to those suppliers were $229,260.

NOTE 20 – LOSS CONTINGENCIES

Settled Litigation

On or about August 3, 2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the “Written Decisions”) were served on Shouguang City Haoyuan Chemical Company Limited (“SCHC”) by Shouguang City Natural Resources and Planning Bureau (the “Bureau”), naming SCHC as respondent respectively thereof. The Decisions challenged the land use of Factory nos. 2, 9, 7, 4, 8 and 10, respectively, and alleged, among other things, that SCHC had illegally occupied and used the land in the total area of approximately 52,674 square meter, on which Factory nos. 2, 9, 7, 4, 8 and 10 were built, respectively. The Written Decisions ordered SCHC, among other things, to return the land subject to the Written Decisions to its respective legal owner, restore the land to its original state, and demolish or confiscate all the buildings and facilities thereon and pay monetary penalty of approximately RMB 1.3 million ($184,000) in the aggregate. Each of the Written Decisions shall be executed within 15 days upon serving on SCHC. Additional interest penalty shall be imposed at a daily rate of 3% in the event that SCHC does not make the monetary penalty payment in a timely manner. Subsequently, the Bureau filed enforcement actions to the People’s Court of Shouguang City, Shandong Province (the “Court”), naming SCHC as enforcement respondent and alleged, among other things, that SCHC failed to perform its obligations under each of the Written Decisions within the specified timeframe. The enforcement proceedings sought court orders to enforce the Written Decisions. On May 5, 2019, written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No. 384, (2019) Lu 0783 Xing Shen No. 385, (2019) Lu 0783 Xing Shen No. 389, (2019) Lu 0783 Xing Shen No. 390, (2019) Lu 0783 Xing Shen No. 393, and (2019) Lu 0783 Xing Shen No. 394, respectively (together, the “Court Rulings”) were made by the Court in favor of the Bureau. The Court orders, among other relief, to enforce each of the Written Decisions, to return each subject land to its legal owners and demolish or confiscate the buildings and facilities thereon and restore the land to its original state within 10 days from the service of the Court Rulings on SCHC. The Court Rulings became enforceable immediately upon service on SCHC on May 5, 2019.

In the last twenty years, to the Company’s knowledge, there were no government regulations requiring bromine manufacturers to obtain land use and planning approval document. As such, the Company believes most of the bromine manufacturers in Shouguang City do not have land use and planning approval documents and lease their land parcels from the village associations. They are facing the same issues in connection with land use and planning as the Company. To the Company’s knowledge, the local government has submitted its plan to solve the issues to higher authority and are waiting for approval from the higher authority.

The Company is in the process of resolving the issues in connection with SCHC’s land use and planning diligently. The Company has been in discussions closely with the local government authorities with the help from Shouguang City Bromine Association to seek reliefs and, based on verbal confirmation by local government authorities, believes the administrative penalties imposed by the Bureau according to the Written Decisions are being re-assessed by local government authorities and may be revoked. Pursuant to a Written Application dated October 28, 2019 addressed to the Court by the Bureau, the Bureau withdrew its application for the enforcement proceedings regarding the administrative penalty imposed on Factory No. 7, Factory No. 8 and Factory No. 10. Pursuant to a written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No. 389 Zhi Yi, dated November 25, 2020, the Court orders to terminate the enforcement of the case captioned (2019) Lu 0783 Xing Shen No. 389. Production of Factory No. 7 was allowed to resume in April 2019. The Company received a notification from the Shouguang City Government in February 2019 informing the Company that Factory No. 1, No. 4, No. 7 and No. 9 have passed inspection and were approved to resume operation

In addition, on August 28, 2019, the People’s Government of Shandong Province, issued a regulation titled “Investment Project Management Requirements of Chemical Companies in Shandong Province” permitting the construction of facilities on existing sites or infrastructure of bromine manufacturing and other chemical industry-related types of projects (clause 11 of section 3). The Company believes that the goal of the government is to standardize and regulate the industry and not to demolish the facilities or penalize the manufacturers. As of the date of this report, the Company has not been notified by the local government that it will take any measure to enforce the administrative penalties. Based on information known to date, the Company believes that it is remote that the Written Decisions or Court Rulings will be enforced within the expected timeframe and a material penalty or costs and expenses against the Company will result. However, there can be no assurance that there will not be any further enforcement action, the occurrence of which may result in further liabilities, penalties and operational disruption.

In view of the above facts and circumstances, the Company believes that it is not necessary to accrue for any estimated losses or impairment as of September 30, 2024.

NOTE 21 - SUBSEQUENT EVENT

Not Applicable

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

The discussion below contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have used words such as “believes,” “intends,” “anticipates,” “expects” and similar expressions to identify forward-looking statements. These statements are based on information currently available to us and are subject to a number of risks and uncertainties that may cause our actual results of operations, financial condition, cash flows, performance, business prospects and opportunities and the timing of certain events to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason.

Overview

We are a Nevada holding company which conducts operations through our wholly-owned China-based subsidiaries. Our business is conducted and reported in four segments, namely, bromine, crude salt, chemical products and natural gas.

Through our wholly-owned subsidiary, SCHC, we produce and trade bromine and crude salt. We are one of the largest producers of bromine in China, as measured by production output. Elemental bromine is used to manufacture a wide variety of bromine compounds used in industry and agriculture. 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.

Through our wholly-owned subsidiary, SYCI, we manufacture and sell chemical products used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.

Our wholly-owned subsidiary, DCHC, was established to explore and develop natural gas and brine resources (including bromine and crude salt) in Sichuan Province, China.

As disclosed in the Company’s Current Report on Form 8-K filed on September 8, 2017, the Company received, on September 1, 2017, letters from the Yangkou County, Shouguang City government addressed to each of its subsidiaries, SCHC and SYCI, which stated that in an effort to improve the safety and environmental protection management level of chemical enterprises, the plants are requested to immediately stop production and perform rectification and improvements in accordance with the country’s new safety and environmental protection requirements. 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 insure corporations bring their facilities up to necessary standards so that pollution and other negative environmental issues are limited and remediated, could have an impact on our business in both the short and long-term. The Company also expressed that although it believed its facilities were fully compliant at the time, the Company did not know how its facilities would fare under the new rules. Teams of inspectors from the government were sent to many provinces to inspect all mining and manufacturing facilities. The local government requested that facilities be closed, so that the facilities could undergo the inspection and analysis in the most efficient manner by inspectors’ team. As a result, our facilities were closed on September 1, 2017.

The Company believes that this is another step by the government to improve the environment. It further believes the goal of the government is not to close all plants, but rather to codify the regulations related to project approval, land use, planning approval and environmental protection assessment approval so that illegal plants are not able to open in the future and so that plants close to population centers do not cause serious environmental damage. In addition, the Company believes that the Shandong provincial government wants to assure that each of its regional and county governments has applied the Notice in a consistent manner.

The Shouguang City Bromine Association, on behalf of all the bromine plants in Shouguang, started discussions with the local government agencies. The local governmental agencies confirmed the facts that their initial requirements for the bromine industry did not include the project approval, the planning approval and the land use rights approval and that those three additional approvals were new requirements of the provincial government. The Company understood from the local government that it has been coordinating with several government agencies to solve these three outstanding approval issues in a timely manner and that all the affected bromine plants willnot be allowed to commence production prior to obtaining those approvals.

In February 2019, the Company received a notification from the local government of Yangkou County that its Factory No. 1, No. 4, No. 7 and No. 9 had passed inspection and could resume operations. In April 2019, Factory No. 1 and No. 7 resumed operations.

On February 28, 2020, the Company announced that it received an approval from the government to resume bromine production after winter temporary closure. Subsequently, it received another approval from the Shouguang Yangkou People’s Government dated on March 5, 2020 to resume production at its bromine factories No. 1, No. 4, No. 7 and No. 9 in order to meet the needs of bromide products for epidemic prevention and control. With these two approvals, the Company was allowed to resume production at all four bromine factories.

The Company received an oral notification from the government for its Factory No. 8, which permitted Factory No.8 to resume production in August 2022. Factory No.8 started to contribute revenue in the fourth quarter 2022.

Pursuant to the notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 10, 2022 until February 1, 2023. To comply with such notification, the Company had temporarily stopped production at its bromine facilities during the aforesaid period and reopened the operating bromine and crude salt factories in February, 2023.

The Company is still waiting for governmental approval for factories No. 2 and No. 10. To its knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, the Company may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories in order to satisfy the local government's requirements.

On November 24, 2017, Gulf Resources received a letter from the People’s Government of Yangkou County, Shouguang City notifying the Company that due to the new standards and regulations relating to safety production and environmental pollution, from certain local governmental departments, such as the municipal environmental protection department, the security supervision department and the fire department, its chemical enterprises would have to be relocated to a new industrial park called Bohai Marine Fine Chemical Industry Park. Although our chemical companies were in compliance with regulations, they were also close to a residential area. As a result, the government determined we should relocate to the Bohai park. Chemical companies that are not being asked to move into the park are being permanently closed. Since our factories closed, the Company has secured from the government the land use rights for its chemical plant. On January 6, 2020, the Company received the environmental protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020. The construction was expected to take approximately one year and an additional six months to complete the equipment installation and testing, however due to the COVID epidemic and electrical restrictions, the opening of the chemical factory has been delayed. The Company has received the refrigeration and air compressor units. On July 26, 2023, the Company announced that the delivery of the remaining equipment for its Yuxin chemical factory has been temporarily delayed and the Company will re-evaluate its chemical products strategy.

In January 2017, the Company completed the first brine water and natural gas well field construction in Daying located in Sichuan Province and commenced trial production in January 2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town ,Daying County, Sichuan Province, whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project, and approvals for safety production inspection, environmental protection assessment, and to solve the related 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.

In April 2022, Shouguang Hengde Salt Industry Co. Ltd（“SHSI”）, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading.

On January 28, 2020 we completed a 1-for-5 reverse stock split of our common stock, such that for each five shares outstanding prior to the stock split there was one share outstanding after the reverse stock split. All shares of common stock referenced in this report have been adjusted to reflect the stock split figures.

Recent Developments

Acquisition Agreements

On June 26, 2024, a wholly owned subsidiary of the Company, Shouguang Hengde Salt Industry Co. Ltd ( “SHSI”), entered into a Crude Salt Field Acquisition Agreement (the “Acquisition Agreement”) with Shouguang Qingshuibo Farm Co., LTD. (“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 Acquisition Agreement, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of Acquisition Agreement after SHSI has inspected the and accepted the crude salt field in writing.

On June 27, 2024, SHSI entered into four Crude Salt Field Acquisition Agreements (the “Agreements”) with Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative, Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative, Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative, and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative (together, “Sellers”), pursuant to which Sellers agree to transfer to SHSI, and SHSI agrees to purchase from 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 Agreements, and the remaining 20% shall be paid in shares of common stock of the Company within three months from the date of Agreements after SHSI has inspected the and accepted the crude salt fields in writing.

Nasdaq Compliance

The Company received a notice (the “Initial Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) on April 18, 2024 notifying the Company that due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), with the SEC, the Company is not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires the timely filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the “May Notice”) from Nasdaq on May 21, 2024 due to the Company’s non-compliance with the Rule as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the “Form 10-Q”, together with the Form 10-K, the “Delinquent Reports”). The May Notice states that the Company has until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.

On June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted by the Company on June 14, 2024, Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule. The terms of the exception were as follows: on or before October 14, 2024, the Company must file the Delinquent Reports, as required by the Rule. In the event the Company does not satisfy the terms, Nasdaq will provide written notification that its securities will be delisted. At that time, the Company may appeal Nasdaq’s determination to a hearings panel.

Subsequently, on August 20, 2024, the Company received a notice (the “August Notice”) from Nasdaq indicating that, because the Company is delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024, the Company was not in compliance with the Rule. The Notice also indicates that as a result of this additional delinquency, the Company must submit an update to its original plan to regain compliance with respect to the filing requirements. The Company has until September 4, 2024 to submit such update to Nasdaq. On October 15, 2024, the Company received written notice from the Staff that, as a result of the Company filing the Delinquent Filings with the SEC, the Staff has determined that the Company complies with the Rule and considers the matter to be closed.

On November 5, 2024, the Company received a notice in the form of a letter (“Price Deficiency Letter”) from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1) because the bid price for the Company’s common stock had closed below $1.00 per share for the previous 34 consecutive business days (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until May 5, 2025, to regain compliance with the Minimum Bid Price Requirement. If at any time before May 5, 2025, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance. In the event the Company does not regain compliance, the Company may be eligible for additional time. To qualify for the additional compliance period, the Company will be required to (i) submit, no later than the expiration date, an on-line Transfer Application, (ii) submit a non-refundable $5,000 application fee, (iii) meet the continued listing requirement for the market value of its publicly held shares and all other continued listing standards for The Nasdaq Stock Market, with the exception of the bid price requirement, and (iv) will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. As part of its review process, the Staff will make a determination of whether they believe the Company will be able to cure this deficiency. Should the Staff conclude that the Company will not be able to cure the deficiency, or should the Company determine not to submit a transfer application or make the required representation, the Staff will provide notice that the Company’s securities will be subject to delisting.

The Nasdaq Price Deficiency Letter has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and traded on The Nasdaq Global Select Market, subject to the Company’s compliance with the other continued listing requirements of The Nasdaq Stock Market.

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

As a result of our acquisitions of SCHC and SYCI, our historical financial statements and the information presented below reflects the accounts of SCHC, SYCI, SHSI and DCHC. The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report.

RESULTS OF OPERATIONS

The following table presents certain information derived from the condensed consolidated statements of operations, cash flows and stockholders equity for the three-month and nine-month periods ended September 30, 2024 and 2023.

Comparison of the Three-Month Period Ended September 30, 2024 and 2023

	Three-Month Period Ended September 30, 2024			Three-Month Period Ended September 30, 2023			Percent Change Increase/ (Decrease)
Net revenue	$	2,242,365		$	5,865,615			(62%)
Cost of net revenue		(4,071,616	)		(6,373,902	)		(36%)
Gross profit		(1,829,251)			(508,287)			260%
Sales and marketing expenses		(13,484)			(14,428)			(7%)
Direct labor and factory overheads incurred during plant shutdown		(1,736,345)			(1,007,689)			72%
General and administrative expenses		(1,002,529)			(762,884)			31%
Income(Loss) from operations		(4,581,609)			(2,293,288)			100%
Other income		(14,971)			33,967			(144%	)
Income(Loss) before taxes		(4,596,580)			(2,259,321)			103%
Income tax benefit		1,103,697			483,524			128%
Net income(loss)	$	(3,492,883)		$	(1,775,797)			97%

Net revenue. The table below shows the changes in net revenue in the respective segment of the Company for the three-month period ended September 30, 2024 as compared to the same period in 2023:

	Net Revenue by Segment
	Three-Month Period Ended					Three-Month Period Ended					Percent Change Increase
	September 30, 2024					September 30, 2023					of Net Revenue
Segment			% of total					% of total
Bromine	$	1,571,313		70	%	$	4,908,152		84	%		(68	%)
Crude Salt		654,039		29	%		889,556		15	%		(26	%)
Chemical Products		—		—			—		—
Natural Gas		—		—			—		—			—
Total		2,225,352		99	%		5,797,708		99	%		(62	%)
Equipment Lease		17,013		1	%		67,907		1	%		(75	%)
Total sales	$	2,242,365		100	%	$	5,865,615		100	%		(62	%)

Bromine and crude salt segments	Three-Month Period Ended				Percentage Change
product sold in tonnes	September 30, 2024		September 30, 2023		Increase (Decrease)
Bromine		656		1,516		(57	%)
Crude Salt		24,249		30,334		(20	%)

Bromine segment

For the three-month periods ended September 30, 2024 and 2023, the net revenue for the bromine segment was $1,571,313 and $4,908,152, respectively. The decrease of the net revenue of bromine was due to the 57% decrease in tonnes sold and the 26% decrease in average selling price of bromine in the third quarter of 2024. The average selling price of bromine in the third quarter of 2024 was $2,396 compared to the average selling price of bromine in the third quarter of 2023 of $3,237 (calculated by dividing revenue by tonnes).

Crude salt segment

For the three-month periods ended September 30, 2024 and 2023, the net revenue for the crude salt was $654,039 and $889,556, respectively. The decrease of net revenue of crude salt was mainly due to the 20% decrease in tonnes sold and the 8% decrease in average selling price of crude salt for the three-month period ended September 30, 2024.

Chemical products segment

For the three-month periods ended September 30, 2024 and 2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.

Natural gas segment

For the three-month period ended September 30, 2024 and 2023, the net revenue was $0.

For the three-month period ended September 30, 2024 and 2023, the net revenue for the equipment lease was $17,013 and $67,907.

Cost of Net Revenue

	Cost of Net Revenue by Segment										Percent Change
	Three-Month Period Ended					Three-Month Period Ended					of Cost of
	September 30, 2024					September 30, 2023					Net Revenue
Segment			% of total					% of total
Bromine	$	3,794,088		93.18	%	$	5,995,496		94.06	%		(37	%)
Crude Salt		277,451		6.81	%		378,100		5.93	%		(27	%)
Chemical Products		—		—			—		—			—
Natural Gas		77		0.01	%		306		0.01	%		(75	%)
Total	$	4,071,616		100	%	$	6,373,902		100	%		(36	%)

Cost of net revenue reflects mainly the raw materials consumed, 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.

Bromine production capacity and utilization of our factories

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

	Annual Production Capacity (in tonnes)		Utilization Ratio (i)
Three-month period ended September 30, 2023		31,506		19%
Three-month period ended September 30, 2024		31,506		8%
Variance of the three-month period ended September 30, 2024 and 2023		—		(11%	)

(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 of all the seven factories including those that have not commenced operations.

Bromine segment

For the three-month period ended September 30, 2024, the bromine segment had a net cost of revenue of $3,794,088.

For the three-month period ended September 30, 2023 the cost of net revenue for the bromine segment was $5,995,496.

Crude salt segment

For the three-month period ended September 30, 2024 the cost of net revenue for the crude salt segment was $277,451.

For the three-month period ended September 30, 2023 the cost of net revenue for the crude salt segment was $378,100.

Chemical products segment

Cost of net revenue for our chemical products segment for the three-month period ended September 30, 2024 and 2023 was $0.

Natural gas segment

Cost of net revenue for our natural gas segment for the three-month period ended September 30, 2024 and 2023 was $77 and 306, respectively.

Gross Profit. Gross loss was $1,829,251 or 82%, of net revenue for three-month period ended September 30, 2024, representing an decrease of $1,320,964, as compared to a gross profit of $508,287 or 9%, of net revenue for the same period in 2023.

	Gross Profit (Loss) by Segment												% Point Change
	Three-Month Period Ended						Three-Month Period Ended						of Gross
	September 30, 2024						September 30, 2023						Profit Margin
Segment				Gross Profit(loss) Margin						Gross Profit (loss) Margin
Bromine	$	(2,222,775	)		(141	%)	$	(1,087,344	)		(22	%)		(119	%)
Crude Salt		376,588			58	%		511,456			57	%		1	%
Chemical Products		—			—			—			—			—
Natural Gas		—			—			—			—			—
Equipment Lease		16,936			100	%		67,601			100	%		0	%
Total Gross Profit (Loss)	$	(1,829,251	)		(82	%)	$	(508,287	)		(9	%)		(73	%)

Bromine segment

For the three-month period ended September 30, 2024, the gross loss for our bromine segment was 141%, compared to 22% in the three-month period ended September 30, 2023. The increase in gross loss margin was primarily attributable to the lower average selling price of bromine of $2,396 per ton in the three-month period ended September 30, 2024 compared to $3,237 per ton in the three-month period ended September 30, 2023.

For the three-month period ended September 30, 2023, the gross loss margin for our bromine segment was 22%.

Crude salt segment

For the three-month period ended September 30, 2024, the gross profit margin for our crude salt segment was 58%.

For the three-month period ended September 30, 2023, the gross profit margin for our crude salt segment was 57%.

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 $1,736,345 and $1,007,689 incurred for the three-month periods ended September 30, 2024 and 2023, 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 $1,002,529 for the three-month period ended September 30, 2024, representing an increase of $239,645 as compared to $762,884 for the same period in 2023.

Income (loss) from Operations loss from operations was $4,581,609 for the three-month period ended September 30, 2024, compared to income of $2,293,288 in the same period in 2023.

	Loss from Operations by Segment
	Three-Month Period Ended September 30, 2024						Three-Month Period Ended September 30, 2023
Segment:				% of total						% of total
Bromine	$	(4,029,999	)		89.34	%	$	(2,143,203	)		105.27	%
Crude Salt		(102,657	)		2.27	%		500,469			(24.58	%)
Chemical Products		(339,038	)		7.52	%		(397,410	)		19.52	%
Natural Gas		(39,072	)		0.87	%		4,156			(0.21	%)
Income(loss) from operations before corporate costs		(4,510,766	)		100	%		(2,035,988	)		100	%
Corporate costs		(70,843	)					(65,148	)
Unrealized gain (loss) on translation of Intercompany balance		—						(192,152	)
Income (loss) from operations	$	(4,581,609	)				$	(2,293,288	)

Bromine segment

Loss from operations from our bromine segment was $4,029,999 for the three-month period ended September 30, 2024, compared to loss from operations of $2,143,203 in the same period in 2023. The decrease of the net revenue of bromine was due to the 57% decrease in tonnes sold and the 26% decrease in average selling price of bromine in the third quarter of 2024.

Crude salt segment

Loss from operations from our crude salt segment was $102,657 for the three-month period ended September 30, 2024, compared to income from operations of $500,469 in the same period in 2023. The decrease of net revenue of crude salt was mainly due to the 20% decrease in tonnes sold and the 8% decrease in average selling price of crude salt for the three-month period ended September 30, 2024.

Chemical products segment

Loss from operations from our chemical products segment was $339,038 for the three-month period ended September 30, 2024, compared to loss from operations of $397,410 in the same period in 2023.

Natural gas segment

Loss from operations from our natural gas segment was $39,072 for the three -month period ended September 30, 2024, compared to an income of $4,156 in the same period in 2023.

Other Income(loss), Net Other loss, net of $14,971 represented bank interest income, net of capital lease interest expense for the three -month period ended September 30, 2024, a decrease of $48,938 as compared to the same period in 2023.

Net Income (loss) Net loss was $3,492,883 for the three-month period ended September 30, 2024, compared to a net loss of $1,775,797 in the same period in 2023.

Comparison of the Nine-Month Period Ended September 30, 2024 and 2023

	Nine-Month Period Ended September 30, 2024			Nine-Month Period Ended September 30, 2023			Percent Change Increase/ (Decrease)
Net revenue	$	5,932,596		$	23,173,404			(74	%)
Cost of net revenue		(11,303,519	)		(20,464,418	)		(45	%)
Gross profit		(5,370,923	)		2,708,986			(298	%)
Sales, marketing and other operating expenses		(31,608	)		(42,850	)		(26	%)
Direct labor and factory overheads incurred during plant shutdown		(7,185,537	)		(4,471,954	)		61	%
Other operating loss		—			60,134
General and administrative expenses		(2,409,957	)		(2,266,260	)		6	%
Income(Loss) from operations		(14,998,025	)		(4,011,944	)		274	%
Other income		6,236			119,805			(95	%)
Other Expenses		(29,173,011	)		—			—
Income(Loss) before taxes		(44,164,800	)		(3,892,139	)		1035	%
Income tax benefit (expense)		3,581,867			876,779			309	%
Net income(loss)	$	(40,582,933	)	$	(3,015,360	)		1245	%

Net revenue. The table below shows the changes in net revenue in the respective segment of the Company for the nine-month period ended September 30, 2024 as compared to the same period in 2023:

	Net Revenue by Segment
	Nine-Month Period Ended					Nine-Month Period Ended					Percent Increase
	September 30, 2024					September 30, 2023					of Net Revenue
Segment			% of total					% of total
Bromine	$	4,576,744		77.15	%	$	20,734,871		89.48	%		(78	%)
Crude Salt		1,294,645		21.82	%		2,287,672		9.87	%		(43	%)
Chemical Products		—		—			—		—			—
Natural Gas		—		—			—		—			—
Total		5,871,389		98.97	%		23,022,543		99.35	%		(75	%)
Equipment Lease		61,207		1.03	%		150,861		0.65	%		(59	%)
Total sales	$	5,932,596		100	%	$	23,173,404		100	%		(74	%)

Bromine and crude salt segments	Nine-Month Period Ended				Percentage Change
product sold in tonnes	September 30, 2024		September 30, 2023		Increase
Bromine (excluding volume sold to SYCI)		1,889		5,937		(68	%)
Crude Salt		53,172		71,354		(25	%)

Bromine segment

Net revenue from our bromine segment decreased to $4,576,744 for the nine-month period ended September 30, 2024 compared to $20,734,871 for the same period in 2023 respectively, due to the lower selling price and selling quantity.

Crude salt segment

Net revenue from our crude salt segment decreased to $1,294,645 for the nine-month period ended September 30, 2024 compared $2,287,672 for the same period in 2023, respectively, due to the lower selling price and selling quantity.

Chemical products segment

For the nine-month period ended September 30, 2024 and 2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September 1, 2017.

Natural gas segment

For the nine-month period ended September 30, 2024 and 2023, the net revenue for the natural gas was $0.

Equipment Lease

For the nine-month period ended September 30, 2024 and 2023, the net revenue for the equipment lease was $61,207 and $150,861.

Cost of Net Revenue

	Cost of Net Revenue by Segment										% Change
	Nine-Month Period Ended					Nine-Month Period Ended					of Cost of
	September 30, 2024					September 30, 2023					Net Revenue
Segment			% of total					% of total
Bromine	$	10,595,899		94	%	$	19,187,620		94	%		(45	%)
Crude Salt		707,344		6	%		1,276,119		6	%		(45	%)
Chemical Products		—		—			—		—			—
Natural Gas		276		0	%		679		0	%		(59	%)
Total	$	11,303,519		100	%	$	20,464,418		100	%		(45	%)

Cost of net revenue reflects mainly the raw materials consumed-direct salaries and benefits of staff engaged in the production process, electricity, depreciation and amortization of manufacturing plant and machinery and other manufacturing costs.

Bromine production capacity and utilization of our factories

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

	Annual Production Capacity (in tonnes)		Utilization Ratio (i)
Nine-month period ended September 30, 2023		31,506		29%
Nine-month period ended September 30, 2024		31,506		8%
Variance of the nine-month period ended September 30, 2024 and 2023		—		(21%)

(i)	Utilization ratio is calculated based on the annualized actual production volume in tonnes for the periods divided by the annual production capacity in tonnes.

Bromine segment

For the nine-month period ended September 30, 2024 the cost of net revenue for the bromine segment was $10,595,899.

For the nine-month period ended September 30, 2023 the cost of net revenue for the bromine segment was $19,187,620.

Crude salt segment

For the nine-month period ended September 30, 2024 the cost of net revenue for the crude salt segment was $707,344. The cost of net revenue for our crude salt segment for the nine-month period ended September 30, 2023 was $1,276,119.

The reason for the decrease is that there is that with the creation of SHSI, some costs formerly allocated to crude sale were allocated to bromine.

Natural gas segment

Cost of net revenue for our natural gas segment for the nine-month period ended September 30, 2024 and 2023 was $276 and $679.

Gross Profit. Loss profit was $5,370,923, or 91%, of net revenue for nine-month period ended September 30, 2024 compared to $2,708,986, or 12%, of net revenue for the same period in 2023.

	Gross Profit (Loss) by Segment											% Point Change
	Nine-Month Period Ended						Nine-Month Period Ended					of Gross
	September 30, 2024						September 30, 2023					Profit Margin
Segment				Gross Profit (loss) Margin					Gross Profit Margin
Bromine	$	(6,019,155	)		(132	%)	$	1,547,251		7	%		139	%
Crude Salt		587,301			45	%		1,011,553		44	%		1	%
Chemical Products		—			—			—		—			—
Natural Gas		—			—			—		—			—
Equipment Lease		60,931			100	%		150,182		100	%		—
Total Gross Profit(Loss)	$	(5,370,923	)		(91	%)	$	2,708,986		12	%		(102	%)

Bromine segment

For the nine-month period ended September 30, 2024, the gross loss margin for our bromine segment was 132%, compared to 7% in the nine-month period ended September 30, 2023. The increase in gross loss margin was primarily attributable to the lower average selling price of bromine of $2,423 per ton in the nine-month period ended September 30, 2024 compared to $3,493 per ton in the nine-month period ended September 30, 2023.

For the nine-month period ended September 30, 2023, the gross profit margin for our bromine segment was 7%.

Crude salt segment

For the nine-month period ended September 30, 2024, the gross profit margin for our crude salt segment was 45%.

For the nine-month period ended September 30, 2023 the gross profit margin for our crude salt segment was 44%.

Chemical products segment

For the nine-month period ended September 30, 2024, the gross profit margin for our chemical segment was 0% due to the closure of our chemical products plant. As a result of the closure, there were no chemical products for sale for the nine-month period ended September 30, 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 $7,185,537 and $4,471,954 incurred for the nine-month periods ended September 30, 2024 and 2023, respectively, for the factories that have not resumed production were presented as part of the operating expense.

General and Administrative Expenses. General and administrative expenses were $2,409,957 for the nine-month period ended September 30, 2024, a increase of $143,697 (or 6%) as compared to $2,266,260 for the same period in 2023. The increase was mainly due to the unrealized foreign currency transaction loss on intercompany balance recorded in nine-month period ended September 30, 2024 compared to an unrealized foreign currency transaction gain on intercompany balance recorded in the same period in the previous year.

Income (Loss) from Operations. Loss from operations was $14,998,025 for the nine-month period ended September 30, 2024, compared to an income of $4,011,944 in the same period in 2023.

	Income(Loss) from Operations by Segment
	Nine-Month Period Ended September 30, 2024						Nine-Month Period Ended September 30, 2023
Segment:				% of total						% of total
Bromine	$	(13,475,400	)		91.94	%	$	(3,340,404	)		91.43	%
Crude Salt		(47,725	)		0.32	%		904,482			(24.76	%)
Chemical Products		(993,116	)		6.78	%		(1,231,302	)		33.7	%
Natural Gas		(140,554	)		0.96	%		14,011			(0.37	%)
Income (Loss) from operations before corporate costs		(14,656,795	)		100	%		(3,653,213	)		100	%
Corporate costs		(341,230	)					(193,287	)
Unrealized gain on translation of intercompany balance		—						(165,444	)
Income (Loss) from operations before taxes	$	(14,998,025	)				$	(4,011,944	)

Bromine segment

Loss from operations from our bromine segment was $13,475,400 for the nine-month period ended September 30, 2024, compared to a loss of $3,340,404 in the same period in 2023. The increase in gross loss margin was primarily attributable to the lower average selling price of bromine of $2,423 per ton in the nine-month period ended September 30, 2024 compared to $3,493 per ton in the nine-month period ended September 30, 2023.

Crude salt segment

Loss from operations from our crude salt segment was $47,725 for the nine-month period ended September 30, 2024, compared to an income of $904,482 in the same period in 2023.

Chemical products segment

Loss from operations from our chemical products segment was $993,116 for the nine-month period ended September 30, 2024, compared to a loss of $1,231,302 in the same period in 2023.

Natural gas segment

Loss from operations from our natural gas segment was $140,554 for the nine-month period ended September 30, 2024, compared to an income of $14,011 in the same period in 2023.

Other Income, Net. Other income, net of $6,236 represented bank interest income, net of capital lease interest expense for the nine -month period ended September 30, 2024, a decrease of $113,569, (or approximately 95%) as compared to the same period in 2023.

Net Income (Loss). Net loss was $40,582,933 for the nine-month period ended September 30, 2024, compared to a net loss of $3,015,360 in the same period in 2023.

Net Income Per Share

For the nine months ended September 30, 2024, net loss per share was $3.78 compared to a loss of $0.29 in the period ending September 30, 2023. There were 10,726,924 shares outstanding compared to 10,431,924 shares.

Foreign Currency Translation Adjustment

For the nine months ending September 30, 2024, the Company had a positive foreign currency translation adjustment of $1,859,755 versus a positive adjustment of $7,879,513 in the previous year. This adjustment impacts all balance sheet translations into U.S. dollars.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2024, cash and cash equivalents were $11,237,493 as compared to $72,223,894 as of December 31, 2023. The components of this decrease of $60,986,401 are reflected below.

Statement of Cash Flows

	Nine-Month Period Ended September 30,
	2024			2023
Net cash (used in) provided by operating activities	$	(293,463	)	$	9,869,612
Net cash used in investing activities		(60,526,213	)		(15,197,648	)
Net cash used in financing activities		(264,094	)		(267,810	)
Effects of exchange rate changes on cash and cash equivalents		97,369			1,144,609	)
Net increase (decrease) in cash and cash equivalents	$	(60,986,401	)	$	(4,451,237	)

For the nine-month period ended September 30, 2024, we met our working capital and capital investment requirements by using cash on hand.

Net Cash (used in) Provided by Operating Activities

During the six-month period ended September 30, 2024, cash flow used in by operating activities of approximately $0.29 million was mainly due to a net loss of $40.58 million, a decrease in deferred taxes of $3.62 million and offset by depreciation and amortization expense of $14.04 million and loss on disposal of equipment of $29.17 million.

During the nine-month period ended September 30, 2023, cash flow provided by operating activities of approximately $9.9 million was mainly due to a non-cash adjustment for depreciation and amortization expense of $15.4 million and offset by a net loss of $3.02 million and an increase in prepayments and deposits of $3.95 million.

Accounts receivable

Cash collections on our accounts receivable had a major impact on our overall liquidity. The following table presents the aging analysis of our accounts receivable as of September 30, 2024 and December 31, 2023.

	September 30, 2024					December 31, 2023
			% of total					% of total
Aged 1-30 days	$	895,402		75	%	$	2,040,377		42	%
Aged 31-60 days		291,478		25	%		2,460,233		51	%
Aged 61-90 days		—		—			365,086		7	%
Aged 91-120 days		—		—			—		—
Aged 121-150 days		—		—			—		—
Aged 151-180 days		—		—			—		—
Aged 181-210 days		—		—			—		—
Aged 211-240 days		—		—			—		—
Total	$	1,186,880		100	%	$	4,865,696		100	%

Inventory

Our inventory consists of the following:

	September 30, 2024					December 31, 2023
			% of total					% of total
Raw materials	$	29,833		7	%	$	32,840		5	%
Finished goods		398,006		93	%		544,389		95	%
Total	$	427,839		100	%	$	577,229		100	%

The net inventory level as of September 30, 2024 decreased by $149,390, as compared to the net inventory level as of December 31, 2023.

Raw materials decreased by $3,007 as of September 30, 2024 as compared to December 31, 2023.

Our finished goods decreased by $146,383 as of September 30, 2024 as compared to December 31, 2023.

Net Cash Used in Investing Activities

During the six months ended September 30, 2024, we used approximately $60.5 million to acquire property, plant and equipment, which primarily included the cost of bromine wells and the installation of high and low voltage lines for these bromine wells, as well as the purchase of salt plants.

For the nine-month period ended September 30, 2023, we used approximately $15.2 million to the flood prevention project aiming to prevent flooding that could harm the wells, aqueducts and crude salt pans at our plant.

Net Cash Used in Financing Activities

For the nine-month period ended September 30, 2024 and 2023, we used $0.3 million to repay finance lease obligations.

We believe that our available funds and cash flows generated from operations will be sufficient to meet our anticipated ongoing operating needs and our obligations as they full due in the next twelve (12) months.

We had available cash of approximately $11.24 million at September 30, 2024, all of which is in highly liquid current deposits earning no or little interest. We do not anticipate paying cash dividends in the foreseeable future.

We intend to continue to focus our efforts on the activities of SCHC, SYCI, SHSI and DCHC as these segments continue to expand within the Chinese market.

We may not be able to identify, successfully integrate or profitably manage any businesses 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, risks associated with the COVID-19 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.

Contractual Obligations and Commitments

We have no significant contractual obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements. Additional information regarding our contractual obligations and commitments at September 30, 2023 is provided in the notes to our consolidated financial statements. See “Notes to Condensed Consolidated Financial Statements, Note 17 – Capital Commitment and Operating Lease Commitments”.

Material Off-Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements falling within the definition of Item 303(a) of Regulation S-K.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions. We have identified the following critical accounting policies and estimates used by us in the preparation of our financial statements: accounts receivable and allowance for doubtful accounts, leases, property, plant and equipment, recoverability of long lived assets, revenue recognition, income taxes, loss contingencies, and stock-based compensation. These policies and estimates are described in the Company’s 2023 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Form 10-Q.

(b) Changes in internal controls

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

On or about August 3, 2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the “Written Decisions”) were served on Shouguang City Haoyuan Chemical Company Limited (“SCHC”) by Shouguang City Natural Resources and Planning Bureau (the “Bureau”), naming SCHC as respondent respectively thereof. The Decisions challenged the land use of Factory nos. 2, 9, 7, 4, 8 and 10, respectively, and alleged, among other things, that SCHC had illegally occupied and used the land in the total area of approximately 52,674 square meters, on which Factory nos. 2, 9, 7, 4, 8 and 10 were built, respectively. The Written Decisions ordered SCHC, among other things, to return the land subject to the Written Decisions to its respective legal owner, restore the land to its original state, and demolish or confiscate all the buildings and facilities thereon and pay monetary penalty of approximately RMB 1.3 million ($184,000) in the aggregate. Each of the Written Decisions shall be executed within 15 days upon serving on SCHC. Additional interest penalty shall be imposed at a daily rate of 3% in the event that SCHC does not make the monetary penalty payment in a timely manner. Subsequently, the Bureau filed enforcement actions to the People’s Court of Shouguang City, Shandong Province (the “Court”), naming SCHC as enforcement respondent and alleged, among other things, that SCHC failed to perform its obligations under each of the Written Decisions within the specified timeframe. The enforcement proceedings sought court orders to enforce the Written Decisions. On May 5, 2019, written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No. 384, (2019) Lu 0783 Xing Shen No. 385, (2019) Lu 0783 Xing Shen No. 389, (2019) Lu 0783 Xing Shen No. 390, (2019) Lu 0783 Xing Shen No. 393, and (2019) Lu 0783 Xing Shen No. 394, respectively (together, the “Court Rulings”) were made by the Court in favor of the Bureau. The Court orders, among other relief, to enforce each of the Written Decisions, to return each subject land to its legal owner and demolish or confiscate the buildings and facilities thereon and restore the land to its original state within 10 days from the service of the Court Rulings on SCHC. The Court Rulings became enforceable immediately upon service on SCHC on May 5, 2019.

The Company is in the process of resolving the issues in connection with SCHC’s land use and planning diligently. The Company has been in discussions regularly with the local government authorities with the help from Shouguang City Bromine Association to seek reliefs and, based on verbal confirmation by local government authorities, believes the administrative penalties imposed by the Bureau according to the Written Decisions are being re-assessed by local government authorities and may be revoked. Pursuant to a Written Application dated October 28, 2019 addressed to the Court by the Bureau, the Bureau withdrew its application for the enforcement proceedings regarding the administrative penalty imposed on Factory No. 7, Factory No. 8 and Factory No.10. Pursuant to a written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No. 389 Zhi Yi, dated November 25, 2020, the Court orders to terminate the enforcement of the case captioned (2019) Lu 0783 Xing Shen No. 389. Production of Factory No. 7 was allowed to resume in April 2019. The Company received a notification from the Shouguang City Government in February 2019 informing the Company that Factory No. 1, No. 4, No. 7 and No. 9 have passed inspection and were approved to resume operation.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Before you invest you should carefully review our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of Part I of this Quarterly Report on Form 10-Q, our consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes, as well as our Management’s Discussion and Analysis of Financial Condition and Results of Operations and the other information in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Readers should carefully review risks described in other documents we file from time to time with the Securities and Exchange Commission.

We are currently not in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq’s listing requirements, our securities could be delisted, which could affect our common stock’s market price and liquidity and reduce our ability to raise capital.

We cannot assure you that we will be able to regain compliance with Nasdaq listing standards. Our failure to continue to meet these requirements would result in our common stock being delisted from Nasdaq, and if our common stock is delisted, our warrants will also be delisted. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:

	·	we may be unable to raise equity capital on acceptable terms or at all;
	·	we may lose the confidence of our customers, which would jeopardize our ability to continue our business as currently conducted;
	·	the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;
	·	holders may be unable to sell or purchase our securities when they wish to do so;
	·	we may become subject to stockholder litigation;
	·	we may lose the interest of institutional investors in our common stock;
	·	we may lose media and analyst coverage;
	·	our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and
	·	we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During our fiscal quarter ended September 30, 2024, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as those terms are defined in Item 408(a) of Regulation S-K

Item 6. Exhibits

Exhibit No.

Description

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101	The following financial statements from Gulf Resources, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Other Comprehensive Income (Loss); (iii) the Consolidated Statements of Changes in Equity; (iv) the Consolidated Statement of Cash Flows; and, (v) the Notes to Consolidated Financial Statements, tagged as blocks of text.

104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GULF RESOURCES, INC.

Dated: November 19, 2024	By:	/s/ Xiaobin Liu
		Xiaobin Liu
		Chief Executive Officer
		(principal executive officer)

Dated: November 19, 2024	By:	/s/ Min Li
		Min Li
		Chief Financial Officer
		(principal financial and accounting officer)

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Rule 13A-14(A)/15D-14(A)

of the Securities Exchange Act of 1934

I, Xiaobin Liu, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024 of Gulf Resources, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

evaluated the effectiveness of registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.


	By:	/s/ Xiaobin Liu
		Xiaobin Liu
		Chief Executive Officer
Dated: November 19, 2024

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Rule 13A-14(A)/15D-14(A)

of the Securities Exchange Act of 1934

I, Min Li, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024 of Gulf Resources, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

c.	evaluated the effectiveness of registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.


	By:	/s/ Min Li
		Min Li
		Chief Financial Officer
Dated: November 19, 2024

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350 AND EXCHANGE ACT RULES 13a-14(b) AND 15d-14(b)

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Gulf Resources, Inc. on Form 10-Q for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his or her knowledge and belief:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operation of the Company.


Dated: November 19, 2024
	By:	/s/ Xiaobin Liu
		Xiaobin Liu
		Chief Executive Officer

Dated: November 19, 2024
	By:	/s/ Min Li
		Min Li
		Chief Financial Officer

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 19, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-34499
Entity Registrant Name	GULF RESOURCES, INC.
Entity Central Index Key	0000885462
Entity Tax Identification Number	13-3637458
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Level 11, Vegetable Building
Entity Address, Address Line Two	Industrial Park of the East City
Entity Address, City or Town	Shouguang City
Entity Address, State or Province	SD
Entity Address, Country	CN
Entity Address, Postal Zip Code	262700
City Area Code	+86 (536)
Local Phone Number	567 0008
Title of 12(b) Security	Common Stock, $0.0005 par value
Trading Symbol	GURE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,726,924

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash	$ 11,237,493	$ 72,223,894
Accounts receivable ,net	1,186,880	4,865,696
Inventories, net	427,839	577,229
Prepayments and deposits	8,311,871	8,395,290
Other receivable	95,245	7,482
Total Current Assets	21,259,328	86,069,591
Non-Current Assets
Property, plant and equipment, net	150,680,984	122,188,023
Finance lease right-of use assets	80,144	83,115
Operating lease right-of-use assets	6,385,605	6,699,784
Prepaid land leases, net of current portion	9,823,607	9,772,170
Deferred tax assets ,net	5,655,626	1,859,025
Total non-current assets	172,625,966	140,602,117
Total Assets	193,885,294	226,671,708
Current Liabilities
Accounts payable and accrued expenses	15,775,145	8,833,936
Taxes payable-current	145,642	475,630
Advance from customer		42,705
Amount due to related parties	2,598,765	2,586,658
Finance lease liability, current portion	201,855	172,625
Operating lease liabilities, current portion	498,580	473,653
Total Current Liabilities	19,219,987	12,585,207
Non-Current Liabilities
Finance lease liability, net of current portion	1,103,707	1,312,950
Operating lease liabilities, net of current portion	7,036,482	7,525,255
Total Non-Current Liabilities	8,140,189	8,838,205
Total Liabilities	27,360,176	21,423,412
Commitment and Loss Contingencies
Stockholders’ Equity
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 11,012,754 shares issued; and 10,726,924 shares outstanding as of September 30, 2024 and December 31, 2023, respectively	24,623	24,623
Treasury stock; 285,830 shares as of September 30, 2024 and December 31, 2023 at cost	(1,372,673)	(1,372,673)
Additional paid-in capital	101,688,262	101,688,262
Retained earnings unappropriated	55,711,323	96,294,256
Retained earnings appropriated	26,667,097	26,667,097
Accumulated other comprehensive loss	(16,193,514)	(18,053,269)
Total Stockholders’ Equity	166,525,118	205,248,296
Total Liabilities and Stockholders’ Equity	$ 193,885,294	$ 226,671,708

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0005	$ 0.0005
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	11,012,754	11,012,754
Common stock, shares outstanding	10,726,924	10,726,924
Treasury stock, shares	285,830	285,830

Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
NET REVENUE
Net revenue	$ 2,242,365	$ 5,865,615	$ 5,932,596	$ 23,173,404
OPERATING INCOME (EXPENSE)
Cost of net revenue	(4,071,616)	(6,373,902)	(11,303,519)	(20,464,418)
Sales and marketing expenses	(13,484)	(14,428)	(31,608)	(42,850)
Direct labor and factory overheads incurred during plant shutdown	(1,736,345)	(1,007,689)	(7,185,537)	(4,471,954)
General and administrative expenses	(1,002,529)	(762,884)	(2,409,957)	(2,266,260)
Other operating income (loss)				60,134
TOTAL OPERATING COSTS AND EXPENSE	(6,823,974)	(8,158,903)	(20,930,621)	(27,185,348)
PROFIT (LOSS) FROM OPERATIONS	(4,581,609)	(2,293,288)	(14,998,025)	(4,011,944)
OTHER INCOME (EXPENSE)
Interest expense	(21,191)	(23,791)	(70,835)	(81,322)
Interest income	6,220	57,758	77,071	201,127
Other expenses (income)	0	0	(29,173,011)	0
INCOME(LOSS) BEFORE TAXES	(4,596,580)	(2,259,321)	(44,164,800)	(3,892,139)
INCOME TAX BENEFIT (EXPENSE)	1,103,697	483,524	3,581,867	876,779
NET PROFIT (LOSS)	(3,492,883)	(1,775,797)	(40,582,933)	(3,015,360)
OTHER COMPREHENSIVE (LOSS) INCOME
- Foreign currency translation adjustments	3,102,876	2,247,978	1,859,755	(7,879,513)
TOTAL COMPREHENSIVE (LOSS) INCOME	$ (390,007)	$ 472,181	$ (38,723,178)	$ (10,894,873)
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:	$ (0.33)	$ (0.17)	$ (3.78)	$ (0.29)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:	10,726,924	10,431,924	10,726,924	10,431,924

Condensed Consoldiated Statement of Stockholders' Equity - USD ($)	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings Unappropriated	Retained Earnings Appropriated	Accumulated Other Comprehensive Income (Loss)	Total
Beginning balance, value at Dec. 31, 2022	$ 24,476	$ (1,372,673)	$ 101,237,059	$ 158,089,535	$ 26,667,097	$ (13,027,289)	$ 271,618,205
Number of shares issued at Dec. 31, 2022	10,717,754
Number of treasury stock at Dec. 31, 2022	10,431,924	285,830
Translation adjustment	$ 0	$ 0	0	0	0	(7,879,513)	(7,879,513)
Net income for nine-month period ended September 30, 2023	0	0	0	(3,015,360)	0	0	(3,015,360)
Ending balance, value at Sep. 30, 2023	$ 24,476	$ (1,372,673)	101,237,059	155,074,175	26,667,097	(20,906,802)	260,723,332
Number of shares issued at Sep. 30, 2023	10,717,754
Number of treasury stock at Sep. 30, 2023	10,431,924	285,830
Beginning balance, value at Jun. 30, 2023	$ 24,476	$ (1,372,673)	101,237,059	156,849,972	26,667,097	(23,154,780)	260,251,151
Number of shares issued at Jun. 30, 2023	10,717,754
Number of treasury stock at Jun. 30, 2023	10,431,924	285,830
Translation adjustment	$ 0	$ 0	0	0	0	2,247,978	2,247,978
Net income for nine-month period ended September 30, 2023	0	0	0	(1,775,797)	0	0	(1,775,797)
Ending balance, value at Sep. 30, 2023	$ 24,476	$ (1,372,673)	101,237,059	155,074,175	26,667,097	(20,906,802)	260,723,332
Number of shares issued at Sep. 30, 2023	10,717,754
Number of treasury stock at Sep. 30, 2023	10,431,924	285,830
Beginning balance, value at Dec. 31, 2023	$ 24,623	$ (1,372,673)	101,688,262	96,294,256	26,667,097	(18,053,269)	205,248,296
Number of shares issued at Dec. 31, 2023	11,012,754
Number of treasury stock at Dec. 31, 2023	10,726,924	285,830
Translation adjustment	$ 0	$ 0	0	0	0	1,859,755	1,859,755
Net income for nine-month period ended September 30, 2023	0	0	0	(40,582,933)	0	0	(40,582,933)
Ending balance, value at Sep. 30, 2024	$ 24,623	$ (1,372,673)	101,688,262	55,711,323	26,667,097	(16,193,514)	166,525,118
Number of shares issued at Sep. 30, 2024	11,012,754
Number of treasury stock at Sep. 30, 2024	10,726,924	285,830
Beginning balance, value at Jun. 30, 2024	$ 24,623	$ (1,372,673)	101,688,262	59,204,206	26,667,097	(19,296,390)	166,915,125
Number of shares issued at Jun. 30, 2024	11,012,754
Number of treasury stock at Jun. 30, 2024	10,726,924	285,830
Translation adjustment	$ 0	$ 0	0	0	0	3,102,876	3,102,876
Net income for nine-month period ended September 30, 2023	0	0	0	(3,492,883)	0	0	(3,492,883)
Ending balance, value at Sep. 30, 2024	$ 24,623	$ (1,372,673)	$ 101,688,262	$ 55,711,323	$ 26,667,097	$ (16,193,514)	$ 166,525,118
Number of shares issued at Sep. 30, 2024	11,012,754
Number of treasury stock at Sep. 30, 2024	10,726,924	285,830

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income(loss)	$ (40,582,933)	$ (3,015,360)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization on capital lease	70,835	80,252
Depreciation and amortization	14,037,554	15,385,624
Unrealized translation difference		165,444
Deferred tax asset	(3,615,091)	(1,002,511)
Amortization of right-of-use asset	659,509
Loss on disposal of equipment	29,169,008
Changes in assets and liabilities:
Accounts receivable	3,677,653	3,132,796
Inventories	153,371	718,994
Prepayments and deposits	171,305	(3,947,311)
Advance from customers	(42,545)
Other receivables	(86,423)
Accounts and Other payable and accrued expenses	(2,685,766)	(1,503,845)
Amount due to related Parties
Taxes payable	(330,299)	(229,600)
Operating lease	(889,641)	85,129
Net cash (used in) provided by operating activities	(293,463)	9,869,612
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(60,526,213)	(15,197,648)
Net cash from investing activities	(60,526,213)	(15,197,648)
CASH FLOWS USED IN FINANCING ACTIVITIES
Repayment of finance lease obligation	(264,094)	(267,810)
Net cash used in financing activities	(264,094)	(267,810)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	97,369	1,144,609
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(60,986,401)	(4,451,237)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	72,223,894	108,226,214
CASH AND CASH EQUIVALENTS - END OF PERIOD	11,237,493	103,774,977
Cash paid during the nine-month period ended September 30, 2024 for:
Paid for taxes	1,013,382	4,930,601
Interest on finance lease obligation	$ 70,835	$ 80,252

Pay vs Performance Disclosure - USD ($)	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (3,492,883)	$ (1,775,797)	$ (40,582,933)	$ (3,015,360)

Insider Trading Arrangements	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Consolidation

(b) Nature of Business

(i) Bromine and Crude Salt Segments

(ii) Chemical Segment

(iii) Natural Gas Segment

(d) Cash and Cash Equivalents

(e) Allowance for Doubtful Accounts

(f) Concentration of Credit Risk

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(g) Property, Plant and Equipment

The Company’s depreciation and amortization policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

Minimum Maximum		Useful life (in years)
Buildings (including salt pans)		8 - 20
Plant and machinery (including protective shells, transmission channels and ducts)		3 - 8
Motor vehicles Motor Vehicles		5
Furniture, fixtures and equipment		3 - 8

Property, plant and equipment under the capital lease are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, the term of the lease.

(h) Retirement Benefits

(i) Revenue Recognition

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(j) Recoverability of Long-lived Assets

For the three and nine months period ended September 30, 2024 and 2023, the Company determined that there were no events or circumstances indicating possible impairment of its long-lived assets.

(k) Basic and Diluted Earnings per Share of Common Stock

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(l) Reporting Currency and Translation

(m) Foreign Operations

(n) Inventories.

(o) Leases

The Company does not recognize operating lease ROU assets and liabilities arising from lease arrangements with lease term of twelve months or less.

(p) Stock-based Compensation

The Company has elected to account for the forfeiture of stock-based awards as they occur.

(q) Loss Contingencies

(r) Income Tax

(s) New Accounting Pronouncements

Recent accounting pronouncements adopted

There were no recent accounting pronouncements adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

(t) Fair Value Measurement

ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

ACCOUNTS RECEIVABLE, NET

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

ACCOUNTS RECEIVABLE, NET

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable net consist of:

	September 30, 2024			December 31, 2023

Accounts receivable	$	1,212,209		$	4,890,756
Allowance for doubtful debt		(25,329	)		(25,060	)
Accounts receivable, net	$	1,186,880		$	4,865,696

INVENTORIES

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 3 – INVENTORIES

Inventories consist of:

	September 30, 2024			December 31, 2023

Raw materials	$	29,833		$	32,840
Finished goods		660,458			804,046
Less: impairment		(262,452	)		(259,657	)
Inventory, net	$	427,839		$	577,229

As of September 30, 2024 and December 31, 2023, the reserve for inventory impairment was due to exchange rate change.

PREPAID LAND LEASES

9 Months Ended

Sep. 30, 2024

Prepaid Land Leases

PREPAID LAND LEASES

NOTE 4 – PREPAID LAND LEASES

PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Mineral rights	$	2,752,312		$	2,722,997
Buildings		70,248,967			29,863,200
Plant and machinery		147,561,812			185,738,906
Furniture, fixtures and office equipment		1,472,228			1,456,547
Motor vehicles		127,430			126,072
Construction in process		10,418,458			10,307,491
Total		232,581,207			230,215,213
Less: Accumulated depreciation and amortization		(81,900,223	)		(108,027,190	)
Impairment		—			—
Net book value	$	150,680,984		$	122,188,023

FINANCE LEASE RIGHT-OF-USE ASSETS

9 Months Ended

Sep. 30, 2024

Finance Lease Right-of-use Assets

FINANCE LEASE RIGHT-OF-USE ASSETS

NOTE 6 – FINANCE LEASE RIGHT-OF-USE ASSETS

Property, plant and equipment under finance leases, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Buildings Buildings	$	213,868		$	211,590
Total		213,868			211,590
Less: Accumulated depreciation and amortization		(133,724	)		(128,475	)
Net book value	$	80,144		$	83,115

OPERATING LEASE RIGHT–OF USE ASSETS

9 Months Ended

Sep. 30, 2024

Operating Lease Rightof Use Assets

OPERATING LEASE RIGHT–OF USE ASSETS

NOTE 7 – OPERATING LEASE RIGHT–OF USE ASSETS

As of September 30, 2024, the total operating lease ROU assets was $6,385,605.

The total operating lease cost for the nine-month period ended September 30, 2024 and 2023 was $659,509 and $706,033.

PAYABLE AND ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

PAYABLE AND ACCRUED EXPENSES

NOTE 8 – PAYABLE AND ACCRUED EXPENSES

Accounts payable, other payable and accrued expenses consist of the following:

	September 30,		December 31,
	2024		2023
Accounts payable	$	128,696	$	206,984
Salary payable		215,711		216,253
Social security insurance contribution payable		174,253		172,398
Other payable-related party		—		88,086
Accrued expense for construction		5,447,458		5,389,437
Accrued expense-others		9,809,027		2,760,778
Total	$	15,775,145	$	8,833,936

Accrued expense-others mainly include of the shares to be paid for the acquisition of salt plant $7,878,182 and others

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

RELATED PARTY TRANSACTIONS

NOTE 9 – RELATED PARTY TRANSACTIONS

NOTE 9 – RELATED PARTY TRANSACTIONS – Continued

Related parties

Name of related parties	Position
Yang Ming	Former Chairman Of the Board
Liu Xiaobin	Chief Executive Officer and Chairman of the Board
Li Min	Chief Financial Officer
Miao Naihui	Chief Operating Officer,Director

	September 30,		December 31,
	2024		2023
Amount due to related parties:
Yang Ming	$	420,969	$	416,484
Liu Xiaobin		887,214		887,214
Li Min		645,291		641,480
Miao Naihui		645,291		641,480
Total	$	2,598,765	$	2,586,658

TAXES PAYABLE

9 Months Ended

Sep. 30, 2024

Taxes Payable

TAXES PAYABLE

NOTE 10 – TAXES PAYABLE

	September 30,		December 31,
	2024		2023
Land use tax payable	$	19,817	$	24,689
Value added tax and other taxes payable		125,825		450,941
Total	$	145,642	$	475,630

LEASE LIABILITIES-FINANCE AND OPERATING LEASE

9 Months Ended

Sep. 30, 2024

Lease Liabilities-finance And Operating Lease

LEASE LIABILITIES-FINANCE AND OPERATING LEASE

NOTE 11 – LEASE LIABILITIES-FINANCE AND OPERATING LEASE

The components of finance lease liabilities were as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total finance lease liability		6.7%	$	1,305,562		$	1,485,575
Less: Current portion				(201,855	)		(172,625	)
Finance lease liability, net of current portion			$	1,103,707		$	1,312,950

The components of operating lease liabilities as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total Operating lease liabilities		4.89%	$	7,535,062		$	7,998,908
Less: Current portion				(498,580	)		(473,653	)
Operating lease liabilities, net of current portion			$	7,036,482		$	7,525,255

Maturities of lease liabilities were as follows:

	Financial lease			Operating Lease
Payable within:
the next 12 months	$	267,867		$	842,770
the next 13 to 24 months		267,867			847,056
the next 25 to 36 months		267,867			854,820
the next 37 to 48 months		267,867			859,449
the next 49 to 60 months		267,867			826,953
thereafter		267,867			8,535,418
Total		1,607,202			12,766,466
Less: Amount representing interest		(301,640	)		(5,231,404	)
Present value of net minimum lease payments	$	1,305,562		$	7,535,062

EQUITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

EQUITY

NOTE 12 –– EQUITY

Restricted Shares

Retained Earnings – Appropriated

Statutory Common Reserve Funds

TREASURY STOCK

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

TREASURY STOCK

NOTE 13 – TREASURY STOCK

As of September 30, 2024 and December 31, 2023, the number of treasury stock of the Company was 285,830 and 285,830, respectively.

STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

STOCK-BASED COMPENSATION

NOTE 14 – STOCK-BASED COMPENSATION

The following table summarizes all Company stock option transactions between January 1, 2024 and September 30, 2024.

Number of Option
and Warrants
Outstanding and exercisable

Weighted- Average Exercise price of Option
and Warrants

Range of
Exercise Price per Common Share

Balance, January 1, 2024

—

Granted during the period

—

Exercised during the period

—

Expired during the period

—

Balance, September 30, 2024

—

Stock Options and Warrants Outstanding and Exercisable

Weighted Average

Remaining

Outstanding at September 30, 2024

Range of

Exercise Prices

Contractual Life

(Years)

Outstanding and exercisable

—

All options exercisable and outstanding at September 30, 2024 are fully vested. As of September 30, 2024 there was no unrecognized compensation cost related to outstanding stock options,

The aggregate intrinsic value of options outstanding and exercisable as of September 30, 2024 was $0.

During the three and nine months ended September 30, 2024 and 2023, there were no options exercised.

OTHER EXPENSES

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

OTHER EXPENSES

NOTE 15 – OTHER EXPENSES

INCOME TAXES

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 16 – INCOME TAXES

The Company utilizes the asset and liability method of accounting for income taxes in accordance with FASB ASC 740-10.

(a) United States (“US”)

United States

(b) British Virgin Islands (“BVI”)

Hong Kong

(d) PRC

PRC

Enterprise income tax (“EIT”) for SCHC, SYCI, SHSI and DCHC in the PRC is charged at 25% of the assessable profits.

The components of the income tax benefit from continuing operations are:


	Three-Month Period Ended September 30,				Nine-Month Period Ended September 30,
	2024		2023		2024			2023
Current taxes – PRC	$	—	$	—	$	(33,224	)	$	—
Deferred tax – PRC entities		1,103,697		483,524		3,615,091			876,779
Total Income tax (expenses) benefits	$	1,103,697	$	483,524	$	3,581,867		$	876,779

Significant components of the Company’s deferred tax assets and liabilities at September 30, 2024 and December 31, 2023 are as follows:

	September 30,			December 31,
	2024			2023
Deferred tax liabilities	$	—		$	—

Deferred tax assets:
Exploration costs		1,776,740			1,757,816
PRC tax losses		15,718,721			11,941,045
US federal net operating loss		1,765,251			1,694,013
Total deferred tax assets		19,260,712			15,392,874
Valuation allowance		(13,605,086	)		(13,533,849	)
Net deferred tax asset	$	5,655,626		$	1,859,025

The decrease in valuation allowance for the three-month period ended September 30, 2024 is $14,209.

The decrease in valuation allowance for the three-month period ended September 30, 2023 is $12,974.

The decrease in valuation allowance for the nine-month period ended September 30, 2024 is $71,237.

The decrease in valuation allowance for the nine-month period ended September 30, 2023 is $233,212.

BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 17 – BUSINESS SEGMENTS

Three-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total Segment Total			Corporate Corporate			Total
Net revenue (external customers)	$	1,571,313		$	654,039		$	—		$	17,013		$	2,242,365		$	—		$	2,242,365
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(4,029,999	)		(102,657	)		(339,038	)		(39,072	)		(4,510,766	)		(70,843	)		(4,581,609	)
Income tax benefit (expense)		1,001,067			18,020			84,610			—			1,103,697			—			1,103,697
Income (loss) from operations after income tax benefit (expense)		(3,028,932	)		(84,637	)		(254,428	)		(39,072	)		(3,407,069	)		(70,843	)		(3,477,912	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		3,818,547			649,997			68,221			33,478			4,570,243			—			4,570,243
Capital expenditures		—			—			—			—			—			—			—

Three-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	4,908,152		$	889,556		$	—		$	67,907	$	5,865,615		$	—		$	5,865,615
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(2,143,203	)		500,469			(397,410	)		4,156		(2,035,988	)		(257,300	)		(2,293,288	)
Income tax benefit (expense)		516,927			(125,731	)		92,328			—		483,524			—			483,524
Income (loss) from operations after income tax benefit (expense)		(1,626,276	)		374,738			(305,082	)		4,156		(1,552,464	)		(257,300	)		(1,809,764	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		4,507,616			180,121			67,692			33,430		4,788,859			—			4,788,859
Capital expenditures		15,149,296			—			—			—		15,149,296			—			15,149,296

NOTE 17 – BUSINESS SEGMENTS – Continued

Nine-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total			Corporate			Total
Net revenue (external customers)	$	4,576,744		$	1,294,645		$	—		$	61,207		$	5,932,596		$	—		$	5,932,596
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(13,475,400	)		(47,725	)		(993,116	)		(140,554	)		(14,656,795	)		(341,230	)		(14,998,025	)
Income tax benefit (expense)		3,361,390			(15,204	)		235,681			—			3,581,867			—			3,581,867
Income (loss) from operations after income tax benefit (expense)		(10,114,010	)		(62,929	)		(757,435	)		(140,554	)		(11,074,928	)		(341,230	)		(11,416,158	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		12,718,202			1,013,663			204,892			100,797			14,037,554			—			14,037,554
Capital expenditures		28,923,642			31,602,571			—			—			60,526,213			—			60,526,213

Nine-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	20,734,871		$	2,287,672		$	—		$	150,861	$	23,173,404		$	—		$	23,173,404
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(3,340,404	)		904,482			(1,231,302	)		14,011		(3,653,213	)		(358,731	)		(4,011,944	)
Income tax benefit (expense)		800,170			(228,002	)		304,611			—		876,779			—			876,779
Income (loss) from operations after income tax benefit (expense)		(2,540,234	)		676,480			(926,691	)		14,011		(2,776,434	)		(358,731	)		(3,135,165	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		14,521,943			553,141			207,878			102,662		15,385,624			—			15,385,624
Capital expenditures		15,197,648			—			—			—		15,197,648			—			15,197,648

* Certain common production overheads, operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in SCHC were split by reference to the average selling price and production volume of each respective segment through April 2022. Commencing May 2022, costs were assigned to the two subsidiaries (SCHC and SHSI) by independent accounting.

NOTE 17 – BUSINESS SEGMENTS – Continued


	Three-Month Period Ended September 30,						Nine-Month Period Ended September 30,
Reconciliations	2024			2023			2024			2023
Total segment operating Income (loss)	$	(4,510,766	)	$	(2,035,988	)	$	(14,656,795	)	$	(3,653,213	)
Corporate costs		(70,843	)		(65,148	)		(341,230	)		(193,287	)
Unrealized gain on translation of intercompany balance		—			(192,152	)		—			(165,444	)
Income (loss) from operations		(4,581,609	)		(2,293,288	)		(14,998,025	)		(4,011,944	)
Other income, net of expense		(14,971	)		33,967			6,236			119,805
Other Expenses		—			—			(29,173,011	)		—
Income (loss) before taxes	$	(4,596,580	)	$	(2,259,321	)	$	(44,164,800	)	$	(3,892,139	)

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	188	$	243	$	—	$	431		19.2	%
	2	Shandong Brother Technology Limited	$	190	$	233	$	—	$	423		18.9	%
	3	Shouguang Weidong Chemical Company Limited	$	189	$	178	$	—	$	367		16.4	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	543	$	462	$	—	$	1,005		16.9	%
	2	Shandong Brother Technology Limited	$	515	$	447	$	—	$	962		16.2	%
	3	Shouguang Weidong Chemical Company Limited	$	516	$	386	$	—	$	902		15.2	%

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Brother Technology Limited	$	766	$	309	$	—	$	1,075		18.5	%
	2	Shandong Morui Chemical Company Limited	$	769	$	298	$	—	$	1,067		18.4	%
	3	Shouguang Weidong Chemical Company Limited	$	772	$	282	$	—	$	1,054		18.2	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	3,166	$	842	$	—	$	4,008		17.4	%
	2	Shandong Brother Technology Limited	$	3,077	$	768	$	—	$	3,845		16.7	%
	3	Shouguang Weidong Chemical Company Limited	$	3,087	$	677	$	—	$	3,764		16.4	%
	4	Shandong Shouguangshen Runfa Marine Chemical Company Limited	$	2,532	$	—	$	—	$	2,532		11	%

CUSTOMER CONCENTRATION

9 Months Ended

Sep. 30, 2024

Risks and Uncertainties [Abstract]

CUSTOMER CONCENTRATION

NOTE 18 – CUSTOMER CONCENTRATION

Revenue

Customer Concentration

Product

During the nine-month period ended September 30, 2024, the Company sold 62.9% of its products to its top five customers. As of September 30, 2024, amounts due from these customers were $948,003.

During the nine-month period ended September 30, 2023, the Company sold 68.4% of its products to its top five customers. As of September 30, 2023, amounts due from these customers were $1,485,777.

MAJOR SUPPLIERS

9 Months Ended

Sep. 30, 2024

Disclosure Major Suppliers Abstract

MAJOR SUPPLIERS

NOTE 19 – MAJOR SUPPLIERS

Product Concentration

Cost of Goods

LOSS CONTINGENCIES

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

LOSS CONTINGENCIES

NOTE 20 – LOSS CONTINGENCIES

Settled Litigation

In view of the above facts and circumstances, the Company believes that it is not necessary to accrue for any estimated losses or impairment as of September 30, 2024.

SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 21 - SUBSEQUENT EVENT

Not Applicable

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

(a) Basis of Presentation and Consolidation

Nature of Business

(b) Nature of Business

(i) Bromine and Crude Salt Segments

(ii) Chemical Segment

(iii) Natural Gas Segment

Use of Estimates

Cash and Cash Equivalents

(d) Cash and Cash Equivalents

Allowance for Doubtful Accounts

(e) Allowance for Doubtful Accounts

Concentration of Credit Risk

(f) Concentration of Credit Risk

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Property, Plant and Equipment

(g) Property, Plant and Equipment

The Company’s depreciation and amortization policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

Minimum Maximum		Useful life (in years)
Buildings (including salt pans)		8 - 20
Plant and machinery (including protective shells, transmission channels and ducts)		3 - 8
Motor vehicles Motor Vehicles		5
Furniture, fixtures and equipment		3 - 8

Property, plant and equipment under the capital lease are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, the term of the lease.

Retirement Benefits

(h) Retirement Benefits

Revenue Recognition

(i) Revenue Recognition

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Recoverability of Long-lived Assets

(j) Recoverability of Long-lived Assets

For the three and nine months period ended September 30, 2024 and 2023, the Company determined that there were no events or circumstances indicating possible impairment of its long-lived assets.

Basic and Diluted Earnings per Share of Common Stock

(k) Basic and Diluted Earnings per Share of Common Stock

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Reporting Currency and Translation

(l) Reporting Currency and Translation

Foreign Operations

(m) Foreign Operations

Inventories

(n) Inventories.

Leases

(o) Leases

The Company does not recognize operating lease ROU assets and liabilities arising from lease arrangements with lease term of twelve months or less.

Stock-based Compensation

(p) Stock-based Compensation

The Company has elected to account for the forfeiture of stock-based awards as they occur.

Loss Contingencies

(q) Loss Contingencies

Income Tax

(r) Income Tax

New Accounting Pronouncements

(s) New Accounting Pronouncements

Recent accounting pronouncements adopted

There were no recent accounting pronouncements adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

Fair Value Measurement

(t) Fair Value Measurement

ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment Useful Life

The Company’s depreciation and amortization policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

Minimum Maximum		Useful life (in years)
Buildings (including salt pans)		8 - 20
Plant and machinery (including protective shells, transmission channels and ducts)		3 - 8
Motor vehicles Motor Vehicles		5
Furniture, fixtures and equipment		3 - 8

ACCOUNTS RECEIVABLE, NET (Tables)

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

Accounts Receivable, Net - Schedule of Accounts, Notes, Loans and Financing Receivable

Accounts receivable net consist of:

	September 30, 2024			December 31, 2023

Accounts receivable	$	1,212,209		$	4,890,756
Allowance for doubtful debt		(25,329	)		(25,060	)
Accounts receivable, net	$	1,186,880		$	4,865,696

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories - Schedule of Inventories, Current

Inventories consist of:

	September 30, 2024			December 31, 2023

Raw materials	$	29,833		$	32,840
Finished goods		660,458			804,046
Less: impairment		(262,452	)		(259,657	)
Inventory, net	$	427,839		$	577,229

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment

Property, plant and equipment, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Mineral rights	$	2,752,312		$	2,722,997
Buildings		70,248,967			29,863,200
Plant and machinery		147,561,812			185,738,906
Furniture, fixtures and office equipment		1,472,228			1,456,547
Motor vehicles		127,430			126,072
Construction in process		10,418,458			10,307,491
Total		232,581,207			230,215,213
Less: Accumulated depreciation and amortization		(81,900,223	)		(108,027,190	)
Impairment		—			—
Net book value	$	150,680,984		$	122,188,023

FINANCE LEASE RIGHT-OF-USE ASSETS (Tables)

9 Months Ended

Sep. 30, 2024

Finance Lease Right-of-use Assets

Finance Lease Right-Of-Use Assets - Schedule of Property, Plant and Equipment Under Finance Leases

Property, plant and equipment under finance leases, net consist of the following:

	September 30, 2024			December 31, 2023
At cost:
Buildings Buildings	$	213,868		$	211,590
Total		213,868			211,590
Less: Accumulated depreciation and amortization		(133,724	)		(128,475	)
Net book value	$	80,144		$	83,115

PAYABLE AND ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities

Accounts payable, other payable and accrued expenses consist of the following:

	September 30,		December 31,
	2024		2023
Accounts payable	$	128,696	$	206,984
Salary payable		215,711		216,253
Social security insurance contribution payable		174,253		172,398
Other payable-related party		—		88,086
Accrued expense for construction		5,447,458		5,389,437
Accrued expense-others		9,809,027		2,760,778
Total	$	15,775,145	$	8,833,936

RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2024

	September 30,		December 31,
	2024		2023
Amount due to related parties:
Yang Ming	$	420,969	$	416,484
Liu Xiaobin		887,214		887,214
Li Min		645,291		641,480
Miao Naihui		645,291		641,480
Total	$	2,598,765	$	2,586,658

TAXES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2024

Taxes Payable

Taxes Payable - Schedule of Taxes Payable

	September 30,		December 31,
	2024		2023
Land use tax payable	$	19,817	$	24,689
Value added tax and other taxes payable		125,825		450,941
Total	$	145,642	$	475,630

LEASE LIABILITIES-FINANCE AND OPERATING LEASE (Tables)

9 Months Ended

Sep. 30, 2024

Lease Liabilities-finance And Operating Lease

Lease Liabilities - Finance and Operating Lease - Schedule of Finance and Operating Leased Liabilities

The components of finance lease liabilities were as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total finance lease liability		6.7%	$	1,305,562		$	1,485,575
Less: Current portion				(201,855	)		(172,625	)
Finance lease liability, net of current portion			$	1,103,707		$	1,312,950

The components of operating lease liabilities as follows:

	Imputed		September 30,			December 31,
	Interest rate		2024			2023
Total Operating lease liabilities		4.89%	$	7,535,062		$	7,998,908
Less: Current portion				(498,580	)		(473,653	)
Operating lease liabilities, net of current portion			$	7,036,482		$	7,525,255

Lease Liabilities - Finance and Operating Lease - Schedule of Financing and Operating Lease Maturities

Maturities of lease liabilities were as follows:

	Financial lease			Operating Lease
Payable within:
the next 12 months	$	267,867		$	842,770
the next 13 to 24 months		267,867			847,056
the next 25 to 36 months		267,867			854,820
the next 37 to 48 months		267,867			859,449
the next 49 to 60 months		267,867			826,953
thereafter		267,867			8,535,418
Total		1,607,202			12,766,466
Less: Amount representing interest		(301,640	)		(5,231,404	)
Present value of net minimum lease payments	$	1,305,562		$	7,535,062

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation - Schedule of Stock Option Activity

The following table summarizes all Company stock option transactions between January 1, 2024 and September 30, 2024.

Number of Option
and Warrants
Outstanding and exercisable

Weighted- Average Exercise price of Option
and Warrants

Range of
Exercise Price per Common Share

Balance, January 1, 2024

—

Granted during the period

—

Exercised during the period

—

Expired during the period

—

Balance, September 30, 2024

—

Stock-Based Compensation - Schedule of Stock Options Outstanding and Exercisable

Stock Options and Warrants Outstanding and Exercisable

Weighted Average

Remaining

Outstanding at September 30, 2024

Range of

Exercise Prices

Contractual Life

(Years)

Outstanding and exercisable

—

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes - Schedule of Components of Income Tax Expense Benefit

The components of the income tax benefit from continuing operations are:


	Three-Month Period Ended September 30,				Nine-Month Period Ended September 30,
	2024		2023		2024			2023
Current taxes – PRC	$	—	$	—	$	(33,224	)	$	—
Deferred tax – PRC entities		1,103,697		483,524		3,615,091			876,779
Total Income tax (expenses) benefits	$	1,103,697	$	483,524	$	3,581,867		$	876,779

Income Taxes - Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities at September 30, 2024 and December 31, 2023 are as follows:

	September 30,			December 31,
	2024			2023
Deferred tax liabilities	$	—		$	—

Deferred tax assets:
Exploration costs		1,776,740			1,757,816
PRC tax losses		15,718,721			11,941,045
US federal net operating loss		1,765,251			1,694,013
Total deferred tax assets		19,260,712			15,392,874
Valuation allowance		(13,605,086	)		(13,533,849	)
Net deferred tax asset	$	5,655,626		$	1,859,025

BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Three-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total Segment Total			Corporate Corporate			Total
Net revenue (external customers)	$	1,571,313		$	654,039		$	—		$	17,013		$	2,242,365		$	—		$	2,242,365
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(4,029,999	)		(102,657	)		(339,038	)		(39,072	)		(4,510,766	)		(70,843	)		(4,581,609	)
Income tax benefit (expense)		1,001,067			18,020			84,610			—			1,103,697			—			1,103,697
Income (loss) from operations after income tax benefit (expense)		(3,028,932	)		(84,637	)		(254,428	)		(39,072	)		(3,407,069	)		(70,843	)		(3,477,912	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		3,818,547			649,997			68,221			33,478			4,570,243			—			4,570,243
Capital expenditures		—			—			—			—			—			—			—

Three-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	4,908,152		$	889,556		$	—		$	67,907	$	5,865,615		$	—		$	5,865,615
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(2,143,203	)		500,469			(397,410	)		4,156		(2,035,988	)		(257,300	)		(2,293,288	)
Income tax benefit (expense)		516,927			(125,731	)		92,328			—		483,524			—			483,524
Income (loss) from operations after income tax benefit (expense)		(1,626,276	)		374,738			(305,082	)		4,156		(1,552,464	)		(257,300	)		(1,809,764	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		4,507,616			180,121			67,692			33,430		4,788,859			—			4,788,859
Capital expenditures		15,149,296			—			—			—		15,149,296			—			15,149,296

NOTE 17 – BUSINESS SEGMENTS – Continued

Nine-Month Period Ended September 30, 2024	Bromine*			Crude Salt*			Chemical Products			Natural Gas			Segment Total			Corporate			Total
Net revenue (external customers)	$	4,576,744		$	1,294,645		$	—		$	61,207		$	5,932,596		$	—		$	5,932,596
Net revenue (intersegment)		—			—			—			—			—			—			—
Income(loss) from operations before income tax benefit		(13,475,400	)		(47,725	)		(993,116	)		(140,554	)		(14,656,795	)		(341,230	)		(14,998,025	)
Income tax benefit (expense)		3,361,390			(15,204	)		235,681			—			3,581,867			—			3,581,867
Income (loss) from operations after income tax benefit (expense)		(10,114,010	)		(62,929	)		(757,435	)		(140,554	)		(11,074,928	)		(341,230	)		(11,416,158	)
Total assets		89,030,860			48,060,437			54,871,374			1,812,636			193,775,307			109,987			193,885,294
Depreciation and amortization		12,718,202			1,013,663			204,892			100,797			14,037,554			—			14,037,554
Capital expenditures		28,923,642			31,602,571			—			—			60,526,213			—			60,526,213

Nine-Month Period Ended September 30, 2023	Bromine*			Crude Salt*			Chemical Products			Natural Gas		Segment Total			Corporate			Total
Net revenue (external customers)	$	20,734,871		$	2,287,672		$	—		$	150,861	$	23,173,404		$	—		$	23,173,404
Net revenue (intersegment)		—			—			—			—		—			—			—
Income(loss) from operations before income tax benefit		(3,340,404	)		904,482			(1,231,302	)		14,011		(3,653,213	)		(358,731	)		(4,011,944	)
Income tax benefit (expense)		800,170			(228,002	)		304,611			—		876,779			—			876,779
Income (loss) from operations after income tax benefit (expense)		(2,540,234	)		676,480			(926,691	)		14,011		(2,776,434	)		(358,731	)		(3,135,165	)
Total assets		159,846,002			11,983,765			105,533,526			1,244,427		278,607,720			285,157			278,892,877
Depreciation and amortization		14,521,943			553,141			207,878			102,662		15,385,624			—			15,385,624
Capital expenditures		15,197,648			—			—			—		15,197,648			—			15,197,648

* Certain common production overheads, operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in SCHC were split by reference to the average selling price and production volume of each respective segment through April 2022. Commencing May 2022, costs were assigned to the two subsidiaries (SCHC and SHSI) by independent accounting.

NOTE 17 – BUSINESS SEGMENTS – Continued

Business Segments - Schedule of Segment Reconciliations


	Three-Month Period Ended September 30,						Nine-Month Period Ended September 30,
Reconciliations	2024			2023			2024			2023
Total segment operating Income (loss)	$	(4,510,766	)	$	(2,035,988	)	$	(14,656,795	)	$	(3,653,213	)
Corporate costs		(70,843	)		(65,148	)		(341,230	)		(193,287	)
Unrealized gain on translation of intercompany balance		—			(192,152	)		—			(165,444	)
Income (loss) from operations		(4,581,609	)		(2,293,288	)		(14,998,025	)		(4,011,944	)
Other income, net of expense		(14,971	)		33,967			6,236			119,805
Other Expenses		—			—			(29,173,011	)		—
Income (loss) before taxes	$	(4,596,580	)	$	(2,259,321	)	$	(44,164,800	)	$	(3,892,139	)

Business Segments - Schedule of Revenue by Major Customers

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	188	$	243	$	—	$	431		19.2	%
	2	Shandong Brother Technology Limited	$	190	$	233	$	—	$	423		18.9	%
	3	Shouguang Weidong Chemical Company Limited	$	189	$	178	$	—	$	367		16.4	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2024.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	543	$	462	$	—	$	1,005		16.9	%
	2	Shandong Brother Technology Limited	$	515	$	447	$	—	$	962		16.2	%
	3	Shouguang Weidong Chemical Company Limited	$	516	$	386	$	—	$	902		15.2	%

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Brother Technology Limited	$	766	$	309	$	—	$	1,075		18.5	%
	2	Shandong Morui Chemical Company Limited	$	769	$	298	$	—	$	1,067		18.4	%
	3	Shouguang Weidong Chemical Company Limited	$	772	$	282	$	—	$	1,054		18.2	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2023.

Number		Customer	Bromine (000’s)		Crude Salt (000’s)		Chemical Products (000’s)		Total Revenue (000’s)		Percentage of Total Revenue (%)
	1	Shandong Morui Chemical Company Limited	$	3,166	$	842	$	—	$	4,008		17.4	%
	2	Shandong Brother Technology Limited	$	3,077	$	768	$	—	$	3,845		16.7	%
	3	Shouguang Weidong Chemical Company Limited	$	3,087	$	677	$	—	$	3,764		16.4	%
	4	Shandong Shouguangshen Runfa Marine Chemical Company Limited	$	2,532	$	—	$	—	$	2,532		11	%

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment Useful Life (Details)	Sep. 30, 2024
Buildings (including salt pans) \| Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	8 years
Buildings (including salt pans) \| Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	20 years
Plant and Machinery (including protective shells, transmission channels and ducts) \| Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Plant and Machinery (including protective shells, transmission channels and ducts) \| Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	8 years
Motor Vehicles
Property, Plant and Equipment [Line Items]
Useful life (in years)	5 years
Furniture, Fixtures and Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Furniture, Fixtures and Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	8 years

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash	$ 11,237,493		$ 11,237,493		$ 72,223,894
Company's contributions to the retirement plan	$ 99,035	$ 121,941	322,448	$ 405,664
Anti-dilutive common stock equivalents excluded from calculation	0	0
Chemical Products
Approximate cost of relocation process	$ 69,000,000		69,000,000
Property, plant and equipment, capitalized costs	$ 45,584,344		$ 45,584,344		$ 45,584,344

Accounts Receivable, Net - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Credit Loss [Abstract]
Accounts receivable	$ 1,212,209	$ 4,890,756
Allowance for doubtful debt	(25,329)	(25,060)
Accounts receivable, net	$ 1,186,880	$ 4,865,696

ACCOUNTS RECEIVABLE, NET (Details Narrative)	9 Months Ended
ACCOUNTS RECEIVABLE, NET (Details Narrative)	Sep. 30, 2024 USD ($)
Credit Loss [Abstract]
Increase in accounts receivable	$ 3,678,816

Inventories - Schedule of Inventories, Current (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 29,833	$ 32,840
Finished goods	660,458	804,046
Less: impairment	(262,452)	(259,657)
Inventory, net	$ 427,839	$ 577,229

PREPAID LAND LEASES (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2017
Prepaid 50-year lease for parcel of land		$ 9,075,213
Prepaid land leases	$ 9,442,751
Minimum
Lease term of contract	10 years
Maximum
Lease term of contract	50 years

Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
At cost:
Mineral rights	$ 2,752,312	$ 2,722,997
Buildings	70,248,967	29,863,200
Plant and machinery	147,561,812	185,738,906
Furniture, fixtures and office equipment	1,472,228	1,456,547
Motor vehicles	127,430	126,072
Construction in process	10,418,458	10,307,491
Total	232,581,207	230,215,213
Less: Accumulated depreciation and amortization	(81,900,223)	(108,027,190)
Impairment	0	0
Net book value	$ 150,680,984	$ 122,188,023

PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 4,522,525	$ 4,787,568	$ 13,980,751	$ 15,381,658
Direct labor and factory overheads incurred during plant shutdown	1,211,694	760,400	5,601,791	3,502,188
Administrative expenses	203,244	166,042	605,945	765,921
Cost of net revenue	3,107,587	$ 3,861,126	7,773,015	$ 11,113,549
Certain Buildings and Salt Pans in Shouguang, PRC
Property, Plant and Equipment [Line Items]
Properties, carrying value	$ 7,870,846		$ 7,870,846		$ 8,346,742

Finance Lease Right-Of-Use Assets - Schedule of Property, Plant and Equipment Under Finance Leases (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
At cost:
Total	$ 213,868	$ 211,590
Less: Accumulated depreciation and amortization	(133,724)	(128,475)
Net book value	80,144	83,115
Buildings
At cost:
Total	$ 213,868	$ 211,590

FINANCE LEASE RIGHT-OF-USE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Finance Lease Right-of-use Assets
Depreciation and amortization expense	$ 1,268	$ 1,291	$ 3,808	$ 3,966

OPERATING LEASE RIGHT–OF USE ASSETS (Details Narrative)	9 Months Ended
OPERATING LEASE RIGHT–OF USE ASSETS (Details Narrative)	Sep. 30, 2024 USD ($) km²	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Property, Plant and Equipment [Line Items]
Operating lease, right-of-use assets	$ 6,385,605		$ 6,699,784
Operating lease cost	$ 659,509	$ 706,033
Certain Buildings and Salt Pans in Shouguang, PRC
Property, Plant and Equipment [Line Items]
Area of land not yet obtained \| km²	34.95
Operating lease, right-of-use asset, aggregate	$ 7,642,937

Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accounts payable	$ 128,696	$ 206,984
Salary payable	215,711	216,253
Social security insurance contribution payable	174,253	172,398
Other payable-related party		88,086
Accrued expense for construction	5,447,458	5,389,437
Accrued expense-others	9,809,027	2,760,778
Total	$ 15,775,145	$ 8,833,936

PAYABLE AND ACCRUED EXPENSES (Details Narrative)	Sep. 30, 2024 USD ($)
Payables and Accruals [Abstract]
Accrued expenses, other	$ 7,878,182

Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Related Party Transaction [Line Items]
Due to related parties	$ 2,598,765	$ 2,586,658
Yang Ming
Related Party Transaction [Line Items]
Due to related parties	420,969	416,484
Liu Xiao Bin
Related Party Transaction [Line Items]
Due to related parties	887,214	887,214
Li Min
Related Party Transaction [Line Items]
Due to related parties	645,291	641,480
Miao Nai Hui
Related Party Transaction [Line Items]
Due to related parties	$ 645,291	$ 641,480

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended			9 Months Ended
	Sep. 25, 2012	Sep. 30, 2024	Sep. 30, 2023	Mar. 31, 2018	Sep. 30, 2024	Sep. 30, 2023
Chairman of the Company
Related Party Transaction [Line Items]
Acquisition of five floors of commercial building	$ 5,700,000
Equity interest	99.00%
Seller
Related Party Transaction [Line Items]
Property management services				$ 87,927
Term of property management services, description				for five years from January 1, 2023 to December 31, 2027
Expense associated with agreement		$ 22,258	$ 21,748		$ 66,125	$ 66,028

Taxes Payable - Schedule of Taxes Payable (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Taxes Payable
Land use tax payable	$ 19,817	$ 24,689
Value added tax and other taxes payable	125,825	450,941
Total	$ 145,642	$ 475,630

Lease Liabilities - Finance and Operating Lease - Schedule of Finance and Operating Leased Liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Lease Liabilities-finance And Operating Lease
Total finance lease liability	$ 1,305,562	$ 1,485,575
Imputed interest rate	6.70%	6.70%
Less: Current portion	$ (201,855)	$ (172,625)
Finance lease liability, net of current portion	1,103,707	1,312,950
Total Operating lease liabilities	$ 7,535,062	$ 7,998,908
Discount rate	4.89%	4.89%
Less: Current portion	$ (498,580)	$ (473,653)
Operating lease liabilities, net of current portion	$ 7,036,482	$ 7,525,255

Lease Liabilities - Finance and Operating Lease - Schedule of Financing and Operating Lease Maturities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Lease Liabilities-finance And Operating Lease
Finance lease - the next 12 months	$ 267,867
Operating lease - the next 12 months	842,770
Finance lease - the next 13 to 24 months	267,867
Operating lease - the next 13 to 24 months	847,056
Finance lease - the next 25 to 36 months	267,867
Operating lease - the next 25 to 36 months	854,820
Finance lease - the next 37 to 48 months	267,867
Operating lease - the next 37 to 48 months	859,449
Finance lease - the next 49 to 60 months	267,867
Operating lease - the next 49 to 60 months	826,953
Finance lease - thereafter	267,867
Operating lease - thereafter	8,535,418
Finance lease - Total	1,607,202
Operating lease - Total	12,766,466
Finance lease - Less: Amount representing interest	(301,640)
Operating lease - Less: Amount representing interest	(5,231,404)
Financial lease - Present value of net minimum lease payments	1,305,562	$ 1,485,575
Operating lease - Present value of net minimum lease payments	$ 7,535,062	$ 7,998,908

LEASE LIABILITIES-FINANCE AND OPERATING LEASE (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Lease Liabilities-finance And Operating Lease
Capital lease, interest expense	$ 21,191	$ 23,791	$ 70,835	$ 80,252
Weighted average remaining operating lease term	18 years		18 years
Discount rate	4.89%		4.89%		4.89%
Lease payments	$ 66,387	$ 64,866	$ 823,608	$ 824,572

EQUITY (Details Narrative)	9 Months Ended
EQUITY (Details Narrative)	Sep. 30, 2024
Equity [Abstract]
Statutory common reserve fund, description	As at September 30, 2024 GULF RESOURCES 'statutory provident fund stood at $26.67 million.

TREASURY STOCK (Details Narrative) - shares	Sep. 30, 2024	Dec. 31, 2023
Equity [Abstract]
Treasury stock, shares	285,830	285,830

Stock-Based Compensation - Schedule of Stock Option Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Compensation Related Costs [Abstract]
Number of option and warrants outstanding and exercisable	0
Weighted-average exercise price of options and warrants	$ 0
Range of exercise price per common share, beginning balance
Number of options and warrants, granted	0
Weighted-average exercise price of option and warrants, granted	$ 0
Range of exercise price per common share granted
Number of options and warrants, exercised	0
Weighted-average exercise price of option and warrants, exercised	$ 0
Range of exercise price per common share exercised
Number of options and warrants, expired	0
Weighted-average exercise price of option and warrants, expired	$ 0
Range of exercise price per common share, expired
Number of option and warrants outstanding and exercisable	0	0
Weighted-average exercise price of options and warrants	$ 0	$ 0
Range of exercise price per common share

Stock-Based Compensation - Schedule of Stock Options Outstanding and Exercisable (Details) - $ / shares	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Compensation Related Costs [Abstract]
Outstanding and exercisable	0	0
Range of exercise prices, outstanding and exercisable	$ 0	$ 0
Range of exercise prices, outstanding and exercisable

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2019
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation costs for options issued	$ 0	$ 0
Aggregate intrinsic value of options outstanding and exercisable	$ 0
2019 Omnibus Equity Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Awards, number of shares authorized			2,068,398
Shares available for grant	561,801

OTHER EXPENSES (Details Narrative)	1 Months Ended
OTHER EXPENSES (Details Narrative)	Sep. 30, 2024 USD ($)
Other Income and Expenses [Abstract]
Environmental exit expense	$ 29,169,008

Income Taxes - Schedule of Components of Income Tax Expense Benefit (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Current taxes – PRC	$ 0	$ 0	$ (33,224)	$ 0
Deferred tax – PRC entities	1,103,697	483,524	3,615,091	876,779
Total Income tax (expenses) benefits	$ 1,103,697	$ 483,524	$ 3,581,867	$ 876,779

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Deferred tax liabilities
Deferred tax assets:
Exploration costs	1,776,740	1,757,816
PRC tax losses	15,718,721	11,941,045
US federal net operating loss	1,765,251	1,694,013
Total deferred tax assets	19,260,712	15,392,874
Valuation allowance	(13,605,086)	(13,533,849)
Net deferred tax asset	$ 5,655,626	$ 1,859,025

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAXES (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Increase/(decrease) in valuation allowance	$ 14,209	$ 12,974	$ 71,237	$ 233,212
United States
Tax rate			21.00%
Hong Kong
Tax rate	16.50%	16.50%	16.50%	16.50%
PRC
Tax rate			25.00%
Accumulated distributable earnings subject to withholding tax	$ 46,286,602		$ 46,286,602		$ 87,160,228
Unrecognized withholding tax	$ 1,342,345		$ 1,342,345		$ 3,396,379

Business Segments - Schedule of Segment Reporting by Segment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Segment Reporting Information [Line Items]
Net revenue (external customers)	$ 2,242,365	$ 5,865,615	$ 5,932,596	$ 23,173,404
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(4,581,609)	(2,293,288)	(14,998,025)	(4,011,944)
Total Income tax (expenses) benefits	1,103,697	483,524	3,581,867	876,779
Income (loss) from operations after income tax benefit (expense)	(3,477,912)	(1,809,764)	(11,416,158)	(3,135,165)
Total assets	193,885,294	278,892,877	193,885,294	278,892,877	$ 226,671,708
Depreciation and amortization	4,570,243	4,788,859	14,037,554	15,385,624
Capital expenditures		15,149,296	60,526,213	15,197,648
Segment Total
Segment Reporting Information [Line Items]
Net revenue (external customers)	2,242,365	5,865,615	5,932,596	23,173,404
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(4,510,766)	(2,035,988)	(14,656,795)	(3,653,213)
Total Income tax (expenses) benefits	1,103,697	483,524	3,581,867	876,779
Income (loss) from operations after income tax benefit (expense)	(3,407,069)	(1,552,464)	(11,074,928)	(2,776,434)
Total assets	193,775,307	278,607,720	193,775,307	278,607,720
Depreciation and amortization	4,570,243	4,788,859	14,037,554	15,385,624
Capital expenditures		15,149,296	60,526,213	15,197,648
Segment Total \| Bromine
Segment Reporting Information [Line Items]
Net revenue (external customers)	1,571,313	4,908,152	4,576,744	20,734,871
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(4,029,999)	(2,143,203)	(13,475,400)	(3,340,404)
Total Income tax (expenses) benefits	1,001,067	516,927	3,361,390	800,170
Income (loss) from operations after income tax benefit (expense)	(3,028,932)	(1,626,276)	(10,114,010)	(2,540,234)
Total assets	89,030,860	159,846,002	89,030,860	159,846,002
Depreciation and amortization	3,818,547	4,507,616	12,718,202	14,521,943
Capital expenditures		15,149,296	28,923,642	15,197,648
Segment Total \| Crude Salt
Segment Reporting Information [Line Items]
Net revenue (external customers)	654,039	889,556	1,294,645	2,287,672
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(102,657)	500,469	(47,725)	904,482
Total Income tax (expenses) benefits	18,020	(125,731)	(15,204)	(228,002)
Income (loss) from operations after income tax benefit (expense)	(84,637)	374,738	(62,929)	676,480
Total assets	48,060,437	11,983,765	48,060,437	11,983,765
Depreciation and amortization	649,997	180,121	1,013,663	553,141
Capital expenditures			31,602,571
Segment Total \| Chemical Products
Segment Reporting Information [Line Items]
Net revenue (external customers)	0	0	0	0
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(339,038)	(397,410)	(993,116)	(1,231,302)
Total Income tax (expenses) benefits	84,610	92,328	235,681	304,611
Income (loss) from operations after income tax benefit (expense)	(254,428)	(305,082)	(757,435)	(926,691)
Total assets	54,871,374	105,533,526	54,871,374	105,533,526
Depreciation and amortization	68,221	67,692	204,892	207,878
Capital expenditures
Segment Total \| Natural Gas
Segment Reporting Information [Line Items]
Net revenue (external customers)	17,013	67,907	61,207	150,861
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(39,072)	4,156	(140,554)	14,011
Total Income tax (expenses) benefits	0	0	0	0
Income (loss) from operations after income tax benefit (expense)	(39,072)	4,156	(140,554)	14,011
Total assets	1,812,636	1,244,427	1,812,636	1,244,427
Depreciation and amortization	33,478	33,430	100,797	102,662
Capital expenditures
Corporate
Segment Reporting Information [Line Items]
Net revenue (external customers)	0	0	0	0
Net revenue (intersegment)	0	0	0	0
Income(loss) from operations before income tax benefit	(70,843)	(257,300)	(341,230)	(358,731)
Total Income tax (expenses) benefits	0	0	0	0
Income (loss) from operations after income tax benefit (expense)	(70,843)	(257,300)	(341,230)	(358,731)
Total assets	109,987	285,157	109,987	285,157
Depreciation and amortization	0	0	0	0
Capital expenditures

Business Segments - Schedule of Segment Reconciliations (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Segment Reporting [Abstract]
Total segment operating Income (loss)	$ (4,510,766)	$ (2,035,988)	$ (14,656,795)	$ (3,653,213)
Corporate costs	(70,843)	(65,148)	(341,230)	(193,287)
Unrealized gain on translation of intercompany balance		(192,152)		(165,444)
Income (loss) from operations	(4,581,609)	(2,293,288)	(14,998,025)	(4,011,944)
Other income, net of expense	(14,971)	33,967	6,236	119,805
Other Expenses	0	0	(29,173,011)	0
Income (loss) before taxes	$ (4,596,580)	$ (2,259,321)	$ (44,164,800)	$ (3,892,139)

Business Segments - Schedule of Revenue by Major Customers (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue, Major Customer [Line Items]
Revenues	$ 2,242,365	$ 5,865,615	$ 5,932,596	$ 23,173,404
Shandong Morui Chemical Company Limited \| Customer Concentration \| Revenue
Revenue, Major Customer [Line Items]
Percentage of total revenues	19.20%	18.40%	16.90%	17.40%
Shandong Brother Technology Limited \| Customer Concentration \| Revenue
Revenue, Major Customer [Line Items]
Percentage of total revenues	18.90%	18.50%	16.20%	16.70%
Shouguang Weidong Chemical Company Limited \| Customer Concentration \| Revenue
Revenue, Major Customer [Line Items]
Percentage of total revenues	16.40%	18.20%	15.20%	16.40%
Shandong Shouguang Shenrunfa Marine Chemical Company Limited \| Customer Concentration \| Revenue
Revenue, Major Customer [Line Items]
Percentage of total revenues				11.00%
Bromine \| Shandong Morui Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	$ 188,000	$ 769,000	$ 543,000	$ 3,166,000
Bromine \| Shandong Brother Technology Limited
Revenue, Major Customer [Line Items]
Revenues	190,000	766,000	515,000	3,077,000
Bromine \| Shouguang Weidong Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	189,000	772,000	516,000	3,087,000
Bromine \| Shandong Shouguang Shenrunfa Marine Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues				2,532,000
Crude Salt \| Shandong Morui Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	243,000	298,000	462,000	842,000
Crude Salt \| Shandong Brother Technology Limited
Revenue, Major Customer [Line Items]
Revenues	233,000	309,000	447,000	768,000
Crude Salt \| Shouguang Weidong Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	178,000	282,000	386,000	677,000
Crude Salt \| Shandong Shouguang Shenrunfa Marine Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues				0
Chemical Products \| Shandong Morui Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	0	0	0	0
Chemical Products \| Shandong Brother Technology Limited
Revenue, Major Customer [Line Items]
Revenues	0	0	0	0
Chemical Products \| Shouguang Weidong Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	0	0	0	0
Chemical Products \| Shandong Shouguang Shenrunfa Marine Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues				0
Total Revenue \| Shandong Morui Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	431,000	1,067,000	1,005,000	4,008,000
Total Revenue \| Shandong Brother Technology Limited
Revenue, Major Customer [Line Items]
Revenues	423,000	1,075,000	962,000	3,845,000
Total Revenue \| Shouguang Weidong Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues	$ 367,000	$ 1,054,000	$ 902,000	3,764,000
Total Revenue \| Shandong Shouguang Shenrunfa Marine Chemical Company Limited
Revenue, Major Customer [Line Items]
Revenues				$ 2,532,000

CUSTOMER CONCENTRATION (Details Narrative) - Customer Concentration - Revenue - Product - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Concentration Risk [Line Items]
Percent of products sold to top five customers	62.90%	68.40%
Amounts due from major customers	$ 948,003	$ 1,485,777

MAJOR SUPPLIERS (Details Narrative) - Product Concentration - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cost of Goods
Product Information [Line Items]
Percent of materials purchased	100.00%	100.00%
Major Suppliers
Product Information [Line Items]
Amount due to major suppliers	$ 127,698	$ 229,260

LOSS CONTINGENCIES (Details Narrative)	1 Months Ended
LOSS CONTINGENCIES (Details Narrative)	Aug. 31, 2018
Settled Litigation
Loss Contingencies [Line Items]
Loss Contingency, Settlement Agreement, Terms	On or about August 3, 2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the “Written Decisions”) were served on Shouguang City Haoyuan Chemical Company Limited (“SCHC”) by Shouguang City Natural Resources and Planning Bureau (the “Bureau”), naming SCHC as respondent respectively thereof. The Decisions challenged the land use of Factory nos. 2, 9, 7, 4, 8 and 10, respectively, and alleged, among other things, that SCHC had illegally occupied and used the land in the total area of approximately 52,674 square meter, on which Factory nos. 2, 9, 7, 4, 8 and 10 were built, respectively. The Written Decisions ordered SCHC, among other things, to return the land subject to the Written Decisions to its respective legal owner, restore the land to its original state, and demolish or confiscate all the buildings and facilities thereon and pay monetary penalty of approximately RMB 1.3 million ($184,000) in the aggregate. Each of the Written Decisions shall be executed within 15 days upon serving on SCHC. Additional interest penalty shall be imposed at a daily rate of 3% in the event that SCHC does not make the monetary penalty payment in a timely manner. Subsequently, the Bureau filed enforcement actions to the People’s Court of Shouguang City, Shandong Province (the “Court”), naming SCHC as enforcement respondent and alleged, among other things, that SCHC failed to perform its obligations under each of the Written Decisions within the specified timeframe. The enforcement proceedings sought court orders to enforce the Written Decisions. On May 5, 2019, written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No. 384, (2019) Lu 0783 Xing Shen No. 385, (2019) Lu 0783 Xing Shen No. 389, (2019) Lu 0783 Xing Shen No. 390, (2019) Lu 0783 Xing Shen No. 393, and (2019) Lu 0783 Xing Shen No. 394, respectively (together, the “Court Rulings”) were made by the Court in favor of the Bureau. The Court orders, among other relief, to enforce each of the Written Decisions, to return each subject land to its legal owners and demolish or confiscate the buildings and facilities thereon and restore the land to its original state within 10 days from the service of the Court Rulings on SCHC. The Court Rulings became enforceable immediately upon service on SCHC on May 5, 2019.

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