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BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
BUSINESS SEGMENTS

NOTE 16 – 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, 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

June 30, 2023

  Bromine* 

Crude

 Salt*

 

Chemical

 Products

  Natural Gas 

Segment

 Total

  Corporate  Total
Net revenue
(external customers)		  $7,356,347   $649,435   $—   $—   $8,005,782   $—   $8,005,782 
Net revenue
(intersegment)		   —    —    —    —    —    —    — 
Income(loss) from operations before income tax benefit   (787,509)   361,083    (416,019)   (2,830)   (845,275)   (73,823)   (919,098)
Income tax benefit (expense)   188,650    (90,948)   94,997    —    192,699    —    192,699 
Income (loss) from operations after
income tax benefit (expense)		   (598,859)   270,135    (321,022)   (2,830)   (652,576)   (73,823)   (726,399)
Total assets   160,263,878    11,461,786    104,995,852    1,278,027    277,999,543    307,923    278,307,466 
Depreciation and amortization   4,948,721    184,333    69,275    34,212    5,236,541    —    5,236,541 
Capital expenditures   15,610    —    —    —    15,610    —    15,610 

 

Three-Month

Period Ended

June 30, 2022

  Bromine* 

Crude

 Salt*

 

Chemical

 Products

  Natural Gas 

Segment

 Total

  Corporate  Total
Net revenue
(external customers)		  $13,893,810   $1,817,904   $—   $—   $15,711,714   $—   $15,711,714 
Net revenue
(intersegment)		   —    —    —    —    —    —    — 
Income(loss) from operations before income tax benefit   5,325,541    142,968    (475,201)   (61,699)   4,931,609    177,554    5,109,163 
Income tax benefit (expense)   (1,320,295)   (36,105)   106,779    —    (1,249,621)   —    (1,249,621)
Income (loss) from operations after
income tax benefit (expense)		   4,005,246    106,863    (368,422)   (61,699)   3,681,988    177,554    3,859,542 
Total assets   171,553,183    10,002,720    115,217,810    1,495,588    298,269,301    343,808    298,613,109 
Depreciation and amortization   3,917,178    1,245,853    73,441    36,324    5,272,796    —    5,272,796 
Capital expenditures   32,822,927    —    —    —    32,822,927    —    32,822,927 

   

* 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 16 – BUSINESS SEGMENTS – Continued

 

Six-Month

Period Ended

June 30, 2023

  Bromine* 

Crude

 Salt*

 

Chemical

 Products

  Natural Gas 

Segment

 Total

  Corporate  Total
Net revenue
(external customers)		  $15,826,719   $1,398,116   $—   $82,954   $17,307,789   $—   $17,307,789 
Net revenue
(intersegment)		   —    —    —    —    —    —    — 
Income (loss) from operations before income tax benefit (expense)   (1,197,201)   404,013    (833,892)   9,855    (1,617,225)   (101,431)   (1,718,656)
Income tax benefit (expense)   283,243    (102,271)   212,283    —    393,255    —    393,255 
Loss from operations after income tax benefit (expense)   (913,958)   301,742    (621,609)   9,855    (1,223,970)   (101,431)   (1,325,401)
Total assets   160,263,878    11,461,786    104,995,852    1,278,027    277,999,543    307,923    278,307,466 
Depreciation and amortization   10,014,327    373,020    140,186    69,232    10,596,765         10,596,765 
Capital expenditures   48,352    —    —    —    48,352    —    48,352 

 

Six-Month

Period Ended

June 30, 2022

  Bromine* 

Crude

 Salt*

 

Chemical

 Products

  Natural Gas 

Segment

 Total

  Corporate  Total
Net revenue
(external customers)		  $22,019,825   $2,571,948   $—   $50,678   $24,642,451   $—   $24,642,451 
Net revenue
(intersegment)		   —    —    —    —    —    —    — 
Income (loss) from operations before income tax benefit (expense)   6,674,375    (378,953)   (988,483)   (88,438)   5,218,501    (174,425)   5,044,076 
Income tax benefit (expense)   (1,662,456)   94,375    222,765    —    (1,345,316)   —    (1,345,316)
Loss from operations after income tax benefit (expense)   5,011,919    (284,578)   (765,718)   (88,438)   3,873,185    (174,425)   3,698,760 
Total assets   171,553,183    10,002,720    115,217,810    1,495,588    298,269,301    343,808    298,613,109 
Depreciation and amortization   7,611,927    2,439,911    149,897    74,139    10,275,874         10,275,874 
Capital expenditures   33,217,987    —    —    —    33,217,987    —    33,217,987 

     

* 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.

  

NOTE 16 – BUSINESS SEGMENTS – Continued 

                                 
   Three-Month Period Ended June 30,  Six-Month Period Ended June 30,
Reconciliations  2023  2022  2023  2022
Total segment operating Income (loss)  $(845,275)  $4,931,609   $(1,617,225)  $5,218,501 
Corporate costs   (68,179)   (67,987)   (128,139)   (136,177)
Unrealized gain on translation of intercompany balance   (5,644)   245,541    26,708    (38,248)
Income (loss) from operations   (919,098)   5,109,163    (1,718,656)   5,044,076 
Other income, net of expense   44,583    42,252    85,838    83,088 
Income (loss) before taxes  $(874,515)  $5,151,415   $(1,632,818)  $5,127,164 

 

The following table shows the major customer(s) (10% or more) for the three-month period ended June 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   $ 1,221     $ 283     $ —     $ 1,504       18.8 %
2   Shouguang Weidong Chemical Company Limited   $ 1,130     $ 192     $ —     $ 1,322       16.5 %
3   Shandong Brother Technology Limited   $ 1,129     $ 174     $ —     $ 1,303       16.3 %
4   Shandong Shouguang God Runfa Marine Chemical Company Limited   $ 1,052     $ —     $ —     $ 1,052       13.1 %

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 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   $ 2,397     $ 544     $ —     $ 2,941       17.1 %
2   Shandong Brother Technology Limited   $ 2,311     $ 459     $ —     $ 2,770       16.1 %
3   Shouguang Weidong Chemical Company Limited   $ 2,315     $ 395     $ —     $ 2,710       15.7 %
4   Shandong Shouguangshen Runfa Marine Chemical Company Limited   $ 2,015     $ —     $ —     $ 2,015       11.7 %

 

The following table shows the major customer(s) (10% or more) for the three-month period ended June 30, 2022.

 

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   $ 1,812     $ 652     $ —     $ 2,464       15.7 %
2   Shandong Brother Technology Limited   $ 1,661     $ 668     $ —     $ 2,329       14.8 %
3   Shouguang Weidong Chemical Company Limited   $ 1,510     $ 497     $ —     $ 2,007       12.8 %

 

The following table shows the major customer(s) (10% or more) for the six-month period ended June 30, 2022.

 

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   $ 2,752     $ 965     $ —     $ 3,717       15.1 %
2   Shandong Brother Technology Limited   $ 2,443     $ 909     $ —     $ 3,352       13.6 %
3   Shouguang Weidong Chemical Company Limited   $ 2,128     $ 697     $ —     $ 2,825       11.5 %