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13. BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

13. BUSINESS SEGMENTS

The Company has four reportable segments:  bromine, crude salt, chemical products and natural gas. The reportable segments are consistent with how management views the markets served by the Company and the financial information that is reviewed by its chief operating decision maker.

An operating segment’s performance is primarily evaluated based on segment operating income (loss), 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 (loss), 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, 2018		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas				Segment  Total				Corporate				Total
Net revenue (external customers)		$	—			$	343,080			$	—			$	—			$	343,080			$	—			$	343,080
Net revenue (intersegment)			—				—				—				—				—				—				—
Income (loss) from operations before income taxes(benefit)			(24,369,917	)			(2,611,203	)			(698,693	)			(32,079	)			(27,711,892	)			912,975				(26,798,917	)
Income taxes expense (benefit)			(4,774,432	)			(2,171,383	)			(235,706	)			—				(7,181,521	)			—				(7,181,521	)
Income (loss) from operations after income taxes (benefit)			(19,595,485	)			(439,820	)			(462,987	)			(32,079	)			(20,530,371	)			912,975				(19,617,396	)
Total assets			119,939,092				39,297,116				175,343,915				1,903,319				336,483,442				16,927				336,500,369
Depreciation and amortization			3,948,751				600,912				116,549				—				4,666,212				—				4,666,212
Capital expenditures			936,598				142,529				—				—				1,079,127				—				1,079,127
Goodwill			—				—				27,902,709				—				27,902,709				—				27,902,709

Three-Month Period Ended September 30, 2017		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas				Segment  Total				Corporate				Total
Net revenue (external customers)		$	9,549,777			$	2,054,729			$	12,235,885			$	—			$	23,840,391			$	—			$	23,840,391
Net revenue (intersegment)			1,216,406				—				—				—				1,216,406				—				1,216,406
Income from operations before income taxes			2,257,069				497,783				3,176,458				(33,184	)			5,898,126				(1,062,874	)			4,835,252
Income taxes			564,267				117,494				827,560				—				1,509,321				—				1,509,321
Income from operations after income taxes			1,692,802				380,289				2,348,898				(33,184	)			4,388,805				(1,062,874	)			3,325,931
Total assets			161,722,622				36,586,589				202,404,825				1,815,010				402,529,046				40,136				402,569,182
Depreciation and amortization			3,556,296				765,183				911,235				—				5,232,714				—				5,232,714
Capital expenditures			466,636				95,864				—				1,260				563,760				—				563,760
Goodwill			—				—				28,920,005				—				28,920,005				—				28,920,005

Nine-Month Period Ended September 30, 2018		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas				Segment  Total				Corporate				Total
Net revenue (external customers)		$	—			$	1,981,573			$	613,368			$	—			$	2,594,941			$	—			$	2,594,941
Net revenue (intersegment)			—				—				—				—				—				—				—
Income (loss) from operations before income taxes (benefit)			(35,537,744	)			(5,150,679	)			(2,101,059	)			(113,029	)			(42,902,511	)			975,007				(41,927,504	)
Income taxes expense (benefit)			(7,745,098	)			(2,613,721	)			100,311				—				(10,258,508	)			—				(10,258,508	)
Income (loss) from operations after income taxes (benefit)			(27,792,646	)			(2,536,958	)			(2,201,370	)			(113,029	)			(32,644,003	)			975,007				(31,668,996	)
Total assets			119,939,092				39,297,116				175,343,915				1,903,319				336,483,442				16,927				336,500,369
Depreciation and amortization			11,686,782				2,125,762				365,183				—				14,177,727				—				14,177,727
Capital expenditures			8,843,486				1,345,783				1,192,963				30,616				11,412,848				—				11,412,848
Goodwill			—				—				27,902,709				—				27,902,709				—				27,902,709

Nine-Month Period Ended September 30, 2017		Bromine*				Crude  Salt*				Chemical  Products				Natural Gas				Segment  Total				Corporate				Total
Net revenue (external customers)		$	41,895,304			$	6,390,390			$	55,875,179			$	—			$	104,160,873			$	—			$	104,160,873
Net revenue (intersegment)			6,305,642				—				—				—				6,305,642				—				6,305,642
Income (loss) from operations before income taxes			17,269,984				2,434,872				16,441,115				(90,471	)			36,055,500				(1,924,779	)			34,130,721
Income taxes			4,358,455				586,240				4,207,902				—				9,152,597				—				9,152,597
Income (loss) from operations after income taxes			12,911,529				1,848,632				12,233,213				(90,471	)			26,902,903				(1,924,779	)			24,978,124
Total assets			161,722,622				36,586,589				202,404,825				1,815,010				402,529,046				40,136				402,569,182
Depreciation and amortization			11,349,477				1,843,856				2,848,670				—				16,042,003				—				16,042,003
Capital expenditures			466,636				95,864				61,235				—				623,735				—				623,735
Goodwill			—				—				28,920,005				—				28,920,005				—				28,920,005

* 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 respective segment.

		Three-Month Period Ended September 30,								Nine-Month Period Ended September 30,
Reconciliations		2018				2017				2018				2017
Total segment operating income(loss)		$	(27,711,892	)		$	5,898,126			$	(42,902,511	)		$	36,055,500
Corporate costs			(116,254	)			(526,421	)			(399,308	)			(784,416	)
Unrealized gain/(loss) on translation of intercompany balance			1,029,229				(536,453	)			1,374,315				(1,140,363	)
Income(loss) from operations			(26,798,917	)			4,835,252				(41,927,504	)			34,130,721
Other income, net of expense			124,362				99,709				385,989				274,314
Income(loss) before income taxes		$	(26,674,555	)		$	4,934,961			$	(41,541,515	)		$	34,405,035

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2018.

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		$	—			$	122			$	—			$	122				35	%
2		Shandong Brother Technology Limited, Kuerle Xingdong Trading Limited		$	—			$	112			$	—			$	112				33	%
3		Shouguang Weidong Chemical Company Limited		$	—			$	109			$	—			$	109				32	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2018.

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		$	—			$	656			$	155			$	811				31	%
2		Shandong Brother Technology Limited, Kuerle Xingdong Trading Limited		$	—			$	783			$	—			$	783				30	%
3		Shouguang Weidong Chemical Company Limited		$	—			$	543			$	—			$	543				21	%

The following table shows the major customer(s) (10% or more) for the three-month period ended September 30, 2017.

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		$	1,938			$	809			$	695			$	3,442				14.4	%

The following table shows the major customer(s) (10% or more) for the nine-month period ended September 30, 2017.

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		$	7,643			$	2,059			$	3,463			$	13,165				12.6	%

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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