What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-11 compared with 2024-10-11 · 316 added, 454 removed, 867 unchanged (47% of the section changed)

4 unchanged sentences

(Expressed in U.S.

June 30, 2024

March 31, 2024

December 31, 2023

38 unchanged sentences

11,012,754 shares issued;

and 10,726,924 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

and 10,726,924 shares outstanding as of March 31, 2024 and December 31, 2023

Treasury stock;

285,830 shares as of June 30, 2024 and December 31, 2023 at cost

285,830 shares as of March 31, 2024 and December 31, 2023 at cost

( 1,372,673 )

3 unchanged sentences

Retained earnings appropriated

Accumulated other comprehensive loss

Accumulated other comprehensive income

( 18,447,136 )

7 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

INCOME (LOSS)

(Expressed in U.S.

Three-Month Period Ended June 30,

Six-Month Period Ended June 30,

OPERATING INCOME (EXPENSE)

Three-Month Period Ended

OPERATING COSTS AND EXPENSE

Cost of net revenue

1 unchanged sentence

( 6,769,074 )

( 7,231,903 )

( 14,090,516 )

Sales and marketing expenses

2 unchanged sentences

( 2,408,736 )

( 5,449,192 )

( 3,464,265 )

General and administrative expenses

( 1,407,428 )

( 1,503,376 )

Other operating income

2 unchanged sentences

( 10,101,565 )

( 14,106,647 )

( 19,026,445 )

PROFIT (LOSS) FROM OPERATIONS

( 5,146,997 )

( 10,416,416 )

LOSS FROM OPERATIONS

( 5,269,419 )

3 unchanged sentences

Other expense

( 29,169,008 )

( 29,173,011 )

Income (Loss) before taxes

( 34,306,028 )

( 39,568,220 )

( 1,632,818 )

INCOME TAX BENEFIT (EXPENSE)

NET PROFIT (LOSS)

$ ( 33,097,918 )

$ ( 681,816 )

$ ( 37,090,050 )

LOSS BEFORE INCOME TAXES

( 5,262,192 )

COMPREHENSIVE INCOME (LOSS)

NET PROFIT (LOSS)

INCOME TAX (EXPENSE) BENEFIT

$ ( 3,992,132 )

$ ( 557,747 )

COMPREHENSIVE LOSS:

$ ( 3,992,132 )

$ ( 557,747 )

OTHER COMPREHENSIVE (LOSS) INCOME

- Foreign currency translation adjustments

( 13,906,993 )

( 1,243,121 )

( 10,127,491 )

TOTAL COMPREHENSIVE (LOSS) INCOME

$ ( 4,385,999 )

$ ( 14,588,809 )

$ ( 38,333,171 )

$ ( 11,367,054 )

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

3 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

SIX-MONTH PERIOD ENDED JUNE 30, 2024

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THREE-MONTH PERIOD ENDED MARCH 31, 2024 AND 2023

(Expressed in U.S.

1 unchanged sentence

unappropriated

BALANCE AT MARCH 31, 2024 (Unaudited)

BALANCE AT DECEMBER 31, 2023 (Audited)

( 1,372,673 )

3 unchanged sentences

Net loss for three-month period

ended June 30, 2024

( 33,097,918 )

BALANCE AT JUNE 30, 2024(Unaudited)

( 1,372,673 )

ended March 31, 2024

( 3,992,132 )

comprehensive

unappropriated

BALANCE AT MARCH 31, 2024(Unaudited)

2 unchanged sentences

$ 200,862,297

$ 274,839,960

Translation adjustment

( 13,906,993 )

Net loss for three-month period

ended June 30, 2023

BALANCE AT JUNE 30,

2023(Unaudited)

( 1,372,673 )

$ 156,849,972

$ ( 23,154,780 )

$ 260,251,151

comprehensive

4 unchanged sentences

$ ( 13,027,289 )

Translation adjustment

$ 271,618,205

( 1,243,121 )

Net loss for six-month period

ended June 30, , 2024

( 37,090,050 )

BALANCE AT JUNE 30, 2024(Unaudited)

( 1,372,673 )

$ ( 19,296,390 )

$ 166,915,125

comprehensive

unappropriated

BALANCE AT DECEMBER 31, 2022 (Audited)

( 1,372,673 )

$ 158,089,535

$ ( 13,027,289 )

$ 271,618,205

Translation adjustment

( 10,127,491 )

Net loss for six-month period

ended June 30, , 2023

( 1,239,563 )

BALANCE AT JUNE 30, 2023(Unaudited)

Net loss for three-month period

ended March 31, 2023

BALANCE AT MARCH 31, 2023(Unaudited)

( 1,372,673 )

11 unchanged sentences

(Expressed in U.S.

Six-Month Period Ended June 30,

Three-Month Period Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net Income (Loss)

$ ( 3,992,132 )

$ ( 557,747 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Amortization on capital lease

Depreciation and amortization

Unrealized exchange (gain) loss on translation of inter-company balances

Unrealized translation difference

Deferred tax asset

1 unchanged sentence

Amortization of right-of-use asset

Loss on disposal of equipment

Changes in assets and liabilities

4 unchanged sentences

Accounts and Other payable and accrued expenses

( 2,583,610 )

( 1,518,073 )

Amount due to related Parties

Taxes payable

Operating lease

Net cash (used in) provided by operating activities

Lease liabilities

Net cash (used in) provided by

operating activities

( 1,330,476 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment

( 60,526,213 )

Net cash used in investing

( 60,526,213 )

CASH FLOWS USED IN FINANCING ACTIVITIES

Repayment of finance lease obligation

Net cash used in financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

( 3,648,129 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

EFFECTS OF EXCHANGE RATE CHANGES

ON CASH AND CASH EQUIVALENTS

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

( 1,462,098 )

2 unchanged sentences

$ 115,771,833

Years Ended June 30,

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Expressed in U.S.

Years Ended March 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the six-month period ended June 30, 2024 for:

Cash paid during the three-month period ended March 31, 2024 for:

Paid for taxes

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

10 unchanged sentences

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.

Co., Limited (“SYCI”) ,Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry

All material intercompany transactions have been eliminated on consolidation.

of the Business

The Company manufactures and trades bromine through

its wholly-owned subsidiary, Shouguang City Haoyuan Chemical Company Limited (“SCHC”);

manufactures and trades crude salt

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 commenced trial operation

in January 2019 but temporarily suspended its production in May 2019 as required by the government to obtain project approval (see Note

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 suspended

production temporarily in May 2019 as required by the government to obtain project approval (see Note 1 (b)(iii)).

On March 11, 2020, the World Health

17 unchanged sentences

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.

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.

Subsequently,

due to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement of

Subsequently, the Company received an approval dated February 27, 2020 issued by thelocal 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.

4, No.7 and No.

9 in order to meet the needs of bromide products for epidemic prevention and control

(the “March 2020 Approval”).

9 in order to meet the needs of bromide products for epidemic prevention and control (the

“March 2020 Approval”).

The Company’s Factories No.

7 commenced trial production in mid March 2020

and commercial production on April 3, 2020 and its Factories No.

7 commenced trial production in mid March 2020 and

commercial production on April 3, 2020 and its Factories No.

9 commenced commercial production on May 6, 2020.

Company received verbal notification from the government regarding Factory No.

received verbal notification from the government regarding Factory No.

8, allowing it to recommence production in August 2022.

41 unchanged sentences

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

management that the electricity restrictions are being eased.

Accordingly, the Company has contacted its suppliers and will 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 our Yuxin chemical factory due to COVID and stricter government regulations.

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

After installation, the testing process is anticipated to take 2 to 3 months, after which we will be in a position to apply

for environmental and safety approval.

After we have obtained environmental and safety approval, it will take us 4 months to conduct trial

production, and then we 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 to review its chemical products

The Company believes this 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 June 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.

The COVID restrictions and resulting national and international supply

chain issues as well as permitting issues have caused delays in receiving some previously ordered machinery and equipment.

is working with its existing suppliers and may identify new suppliers so that it can complete construction of its factory based on accelerated

Currently, the Company can not estimate when construction will be completed and production can begin.

The Company estimates this 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, purchase of plant and equipment and construction costs and installation costs incurred for the new chemical

factory in the amount of $ 45,584,344 and $ 45,584,344 , which were recorded in the Property, plant and equipment in the consolidated balance

sheets as of March 31, 2024 and December 31, 2023.

(iii) Natural Gas Segment

In January 2017, the Company completed the

first brine water and natural gas well field construction in Daying located in SichuanProvince, China, and commenced trial

first brine water and natural gas well field construction in Daying located in Sichuan Province, China, and commenced trial

production in January 2019.

34 unchanged sentences

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.

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

6 unchanged sentences

The Company placed $ 70,761,796

and $ 72,223,894 with these institutions as of June 30, 2024 and December 31, 2023, respectively.

and $ 72,223,894 with these institutions as of March 31, 2024 and December 31, 2023, respectively.

The Company has not experienced

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

6 unchanged sentences

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.

of existing facilities or equipment are capitalized and depreciated 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

12 unchanged sentences

Plant and machinery (including protective shells, transmission channels and ducts)

Motor vehicles Motor Vehicles

Motor vehicles

Motor Vehicles

Furniture, fixtures and equipment

4 unchanged sentences

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.

directly attributed to designated 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

3 unchanged sentences

The required contributions

under the retirement plans are charged to the condensed consolidated statement of loss on an accrual basis when they are due.

under the retirement plans are charged to the condensed consolidated statement of income on an accrual basis when they are due.

The Company’s

contributions totaled $ 100,290 and $ 129,539 for the three-month period ended June 30, 2024 and 2023, respectively, and totaled $ 223,413

and $ 283,723 for the six-month period ended June 30, 2024 and 2023, respectively.

contributions totaled $ 123,123 and $ 154,184 for the three-month periods ended March 31, 2024 and 2023, respectively.

Net revenue is net of discount and value added

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

19 unchanged sentences

their estimated salvage value in connection with the decision to dispose of such assets.

For the three and six months period ended June

30, 2024 and 2023, the Company determined that there were no events or circumstances indicating possible impairment of its long-lived

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.

For the three-month period ended March 31, 2024

and 2023, the Company determined that there were no events or circumstances indicating possible additional impairment of its long-lived

and Diluted Net Income 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

5 unchanged sentences

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 June 30, 2024

the calculation of number of dilutive common stock equivalents amounted to 0 and 0 shares for the three-month periods ended March 31,

2024 and 2023, respectively.

Because the Company reported a net loss

for the three-month periods ended June 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.

Because the Company reported a net loss for the

three-month periods ended March 31, 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.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

47 unchanged sentences

ROU assets and liabilities arising from lease arrangements with lease term of twelve months or less.

(p) Stock-based

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(Expressed in U.S.

NOTE 1 – BASIS OF PRESENTATION AND

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

(p) Stock-based Compensation

Stock-based awards issued to employees are recorded

33 unchanged sentences

Recent accounting pronouncements adopted

There were no recent accounting pronouncements adopted during the six

months ended June 30, 2024.

There were no recent accounting pronouncements adopted during the three

months ended March 31, 2024.

Recently Issued Accounting Pronouncements Not

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.

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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(Expressed in U.S.

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES – Continued

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

(t) Fair Value Measurement

20 unchanged sentences

There were no

material unrecognized financial assets and liabilities as of June 30, 2024 and 2023.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

(Expressed in U.S.

material unrecognized financial assets and liabilities as of March 31, 2024 and 2023.

NOTE 2 – ACCOUNTS RECEIVABLE, NET

3 unchanged sentences

The overall accounts receivable balance

as of June 30, 2024 decreased by $ 3,129,401 compared to those of December 31, 2023.

as of March 31, 2024 increased by $ 394,358 compared to those of December 31, 2023.

We have policies in place to ensure that sales are

7 unchanged sentences

Inventory, net

As of June 30, 2024 and December 31, 2023, the reserve for inventory

impairment was due to exchange rate change.

As of March 31, 2024 and December 31, 2023, the

reserve for inventory impairment was due to exchange rate changes.

NOTE 4 – PREPAID LAND LEASES

18 unchanged sentences

The lease term expires on August 12,

The amount paid was recorded as prepaid land leases, net of current portion in the consolidated balance sheet as of June 30 2024

The amount paid was recorded as prepaid land leases, net of current portion in the consolidated balance sheet as of March 31 2024

and December 31, 2023.

As of June 30, 2024, the prepaid land lease increased to $ 9,284,611 due to an additional amount paid for stamp

As of March 31, 2024, the prepaid land lease increased to $ 9,325,634 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.

Amortization of this prepaid land lease will commence when the chemical factory is built and placed

GULF RESOURCES, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET

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

Property, Plant and Equipment, Net -

Schedule of Property, Plant and Equipment

Mineral rights

13 unchanged sentences

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 $ 7,943,149 and $ 8,346,742 as at June 30, 2024

and December 31, 2023, respectively.

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

depreciation and amortization expense totaled $ 4,728,984 of which $ 1,283,308 , $ 201,197 and $ 3,244,479 were recorded in direct labor and

factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

During the six-month period ended June

30, 2024, depreciation and amortization expense totaled $ 9,458,227 , of which $ 4,390,097 , $ 402,701 and $ 4,665,429 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 June 30, 2023,

depreciation and amortization expense totaled $ 5,235,219 of which $ 791,952 , $ 169,924 and $ 4,273,343 were recorded in direct labor and

factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

During the six-month period ended June

30, 2023, depreciation and amortization expense totaled $ 10,594,090 , of which $ 2,741,788 , $ 599,879 and $ 7,252,423 were recorded in direct

labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

The aggregate carrying values of these properties situated on parcels of the land are $ 8,067,740

and $ 8,346,742

as at March 31, 2024 and December 31, 2023, respectively.

During the three-month period ended March 31,

2024, depreciation and amortization expense totaled $ 4,729,242 , of which $ 3,106,788 , $ 201,504 and $ 1,420,950 were recorded in direct labor

and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue, respectively.

During the three-month period ended March 31,

2023, depreciation and amortization expense totaled $ 5,358,871 , of which $ 1,949,836 , $ 429,955 and $ 2,979,080 were recorded in direct labor

and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue, respectively.

NOTE 6 – FINANCE LEASE RIGHT-OF-USE ASSETS

Property, plant and equipment under finance leases, net consist of

the following:

Property, plant and equipment under finance lease, net consist of the

Finance Lease Right-Of-Use Assets - Schedule of Property,

1 unchanged sentence

Buildings Buildings

Plant and machinery Plant and Machinery

Accumulated depreciation and amortization

4 unchanged sentences

certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of land.

During the three and six months period ended June

30, 2024, depreciation and amortization expense totaled $ 1,269 and $ 2,540 , respectively, which was recorded in direct labor and factory

overheads incurred during plant shutdown.

During the three and six months period ended June

30, 2023, depreciation and amortization expense totaled $ 1,322 and $ 2,675 , respectively, which was recorded in direct labor and factory

overheads incurred during plant shutdown.

During the three-month period ended March 31,

2024, depreciation and amortization expense totaled $ 1,270 , which was recorded in direct labor and factory overheads incurred during plant

During the three-month period ended March 31,

2023, depreciation and amortization expense totaled $ 1,353 , which was recorded in direct labor and factory overheads incurred during plant

GULF RESOURCES, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

NOTE 7 – OPERATING LEASE RIGHT– OF

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.

NOTE 7 – OPERATING LEASE RIGHT-OF USE ASSETS

The Company has the rights to use certain parcels of land located

in Shouguang, the 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 $ 7,653,236

as at June 30, 2024.

As of June 30, 2024, the total operating lease

Company cannot obtain land use rights certificates covers a total of approximately 29.8 square kilometers

with an aggregate operating lease right-of-use assets amount of $ 7,821,687 as at March

As of March 31, 2024, the total operating lease

ROU assets was $ 6,560,963 .

The total operating lease cost for the six-month

period ended June 30, 2024 and 2023 was $ 440,030 and $ 476,367 .

8 – PAYABLE AND ACCRUED EXPENSES

The total operating lease cost for the three-month

period ended March 31, 2024 and 2023 was $ 217,345 and $ 241,021 .

NOTE 8 – PAYABLE AND ACCRUED EXPENSES

Payable and accrued expenses consist of the following:

7 unchanged sentences

Accrued expense-others

Accrued expense-others mainly include of the shares

to be paid for the acquisition of salt plant $ 7,878,182 and others.

Accrued expense-others mainly include the quality guarantee of water

conservancy projects of $ 2,552,044 and others.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(Expressed in U.S.

NOTE 9 – RELATED PARTY TRANSACTIONS

6 unchanged sentences

management services for an annual amount of approximately $ 87,927 for five years from January 1, 2023 to December 31, 2027 .

associated with this agreement for the three and six months ended June 30, 2024 was approximately $ 21,885 and $ 43,867 .

The expense associated

with this agreement for the three and six months ended June 30, 2023 was approximately $ 21,584 and $ 44,280 .

associated with this agreement for the three months ended March 31, 2024 and 2023 was approximately $ 21,982 and $ 22,696 .

NOTE 9 – RELATED PARTY TRANSACTIONS –

21 unchanged sentences

Finance lease liability, net of current portion

Interest expenses from capital lease obligations

amounted to $ 24,814 and 27,901 for the three-month period ended June 30, 2024 and 2023, respectively, which were charged to the condensed

consolidated statement of income (loss).

Interest expenses from capital lease obligations amounted to $ 49,644 and $ 56,461 for the six-month

period ended June 30, 2024 and 2023, respectively, which were charged to the condensed consolidated statement of income (loss).

Interest expenses from a finance lease liability

amounted to $ 24,830 and $ 28,560 for the three-month periods ended March 31, 2024 and 2023, respectively, were charged to the condensed

consolidated statement of loss.

The components of operating lease liabilities

4 unchanged sentences

The weighted average remaining operating lease

term at June 30, 2024 was 18 years and the weighted average discounts rate was 4.89 %.

Lease payments for the three-month period ended

June 30, 2024 and 2023, respectively, were $ 530,962 and $ 519,808 .

Lease payments for the six-month period ended June 30, 2024 and 2023,

respectively, were $ 757,221 and $ 759,706 .

term at March 31, 2024 was 18 years and the weighted average discounts rate was 4.89 %.

This discount rates used are based on the base

rate quoted by the People's Bank of China and vary with the remaining term of the lease.

Lease payment in the three-months ended March

31, 2024 and 2023 was $ 226,259 and $ 239,898 .

Maturities of lease liabilities were as follows:

11 unchanged sentences

Present value of net minimum lease payments

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

(Expressed in U.S.

NOTE 12 – EQUITY

24 unchanged sentences

not result in this reserve balance falling below 25% of the registered capital.

As at June 30, 2024, GULF RESOURCES 'statutory

As at 31 March, 2024, GULF RESOURCES 'statutory

provident fund stood at $26.67 million.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(Expressed in U.S.

NOTE 13 – TREASURY STOCK

As of June 30, 2024 and December 31, 2023, the

As of March 31, 2024 and December 31, 2023, the

number of treasury stock of the Company was 285,830 and 285,830 , respectively.

7 unchanged sentences

of the 2007 Plan and applicable award agreement.

As of June 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.

As of March 31, 2024, the number of shares of the Company’s common stock available

for grant of stock options and issuance under the 2019 Plan was 561,801 shares.

The fair value of each option award is estimated

3 unchanged sentences

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 June 30, 2024 and 2023, total compensation

For the three months ended March 31, 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 June 30, 2024 and 2023.

allowance was recorded in the three months ended March 31, 2024 and 2023.

The following table summarizes all Company stock

option transactions between January 1, 2024 and June 30, 2024.

option transactions between January 1, 2024 and March 31, 2024.

Stock-Based Compensation - Schedule of Stock

8 unchanged sentences

Expired during the period

Balance, June 30, 2024

Stock Options Outstanding and Exercisable

Balance, March 31, 2024

Stock Options and Warrants Outstanding and Exercisable

Weighted Average

Outstanding at June 30, 2024

Outstanding at March 31, 2024

Exercise Prices

1 unchanged sentence

Outstanding and exercisable

All options exercisable and outstanding at June

All options exercisable and outstanding at March

31, 2024 are fully vested.

As of June 30, 2024 there was no unrecognized compensation cost related to outstanding stock options,

As of March 31, 2024 there was no unrecognized compensation cost related to outstanding stock options,

The aggregate intrinsic value of options outstanding and exercisable

as of June 30, 2024 was $ 0 .

During the three and six months ended June 30,

2024 and 2023, there were no options exercised.

as of March 31, 2024 and 2023 was $ 0 .

GULF RESOURCES, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

MARCH 31, 2024

(Expressed in U.S.

NOTE 15 – OTHER EXPENSES

In June 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 15 – INCOME TAXES

1 unchanged sentence

of accounting for income taxes in accordance with FASB ASC 740-10.

United States (“US”)

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.

States (“US”)

United States

3 unchanged sentences

No provision for the US federal income taxes has been made as the Company had no US taxable

income for the three-month and six-month periods ended June 30, 2024 and 2023, and management believes that its earnings are permanently

invested in the PRC.

British Virgin Islands (“BVI”)

income for the three-month periods ended March 31, 2024 and 2023, and management believes that its earnings are permanently invested in

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

Upper Class Group Limited did not generate assessable profit for the three-month and six-month periods ended June 30, 2024

Upper Class Group Limited did not generate assessable profit for the three-month periods ended March 31, 2024 and 2023.

HKJI, a subsidiary of Upper Class Group Limited, was

1 unchanged sentence

from Hong Kong.

No provision for income tax has been made as it has no taxable income for the three-month and six-month periods

ended June 30, 2024 and 2023.

The applicable statutory tax rates for the three-month and six-month periods ended June 30, 2024

and 2023 are 16.5 %.

No provision for income tax has been made as it has no taxable income for the three-month periods ended March

31, 2024 and 2023.

The applicable statutory tax rates for the three-month periods ended March 31, 2024 and 2023 are 16.5 %.

There is no dividend withholding tax in Hong Kong.

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, SYCI, and DCHC are wholly foreign-owned

enterprises (“FIE”) and SHSI 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.

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, SYCI, DCHC, and

SHSI are wholly foreign-owned enterprises (“FIE”) incorporated in the PRC and are subject to PRC Local Income Tax Law.

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

3 unchanged sentences

January 1, 2008 to its foreign investor(s) shall be subject to WHT at 5% effective tax rate.

As of June 30, 2024 and December 31, 2023, the

accumulated distributable earnings under the Generally Accepted Accounting Principles (GAAP”) of PRC that are subject to WHT were

As of March 31, 2024 and December 31, 2023, the

accumulated distributable earnings under the Generally Accepted Accounting Principles (GAAP”) of PRC that are subject to WHT are

$ 81,618,519 and $ 87,160,228 , respectively.

1 unchanged sentence

China, its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable

Accordingly, as of June 30, 2024 and December 31, 2023, the Company has not recorded any WHT on the cumulative amount of distributable

Accordingly, as of March 31, 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 June 30, 2024 and December 31, 2023, the

unrecognized WHT were $ 1,552,871 and $ 3,396,379 , respectively.

As of March 31, 2024 and December 31, 2023, the

unrecognized WHT are $ 3,120,996 and $ 3,396,379 , respectively.

The Company’s income tax returns are subject

11 unchanged sentences

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:

The tax returns for 2014 and 2018 are currently subject to examination.

The components of the provision for income tax

benefit (expense) from continuing operations are:

Income Taxes - Schedule of Components of Income Tax Expense Benefit

Three-Month Period Ended June 30,

Six-Month Period Ended June 30,

Three-Month Period Ended March 31,

Current taxes – PRC

1 unchanged sentence

( 1,270,060 )

( 2,511,394 )

Total Income tax (expenses) benefits

1 unchanged sentence

$ ( 200,556 )

$ ( 2,478,170 )

$ ( 393,255 )

Significant components of the Company’s

deferred tax assets and liabilities at June 30, 2024 and December 31, 2023 are as follows:

deferred tax assets and liabilities at March 31, 2024 and December 31, 2023 are as follows:

Income Taxes - Schedule of Deferred

10 unchanged sentences

Net deferred tax asset

The decrease in valuation allowance for the three-month

period ended June 30, 2024 is $ 42,555 .

Deferred tax assets consist of future reversals of existing taxable

temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences.

As of March 31, 2024

and 2023, valuation allowances were mainly provided against deferred tax assets caused by exploration costs and net operating loss where

it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized due to their continuous

The increase in valuation allowance for the three-month

period ended June 30, 2023 is $ 13,567 .

The decrease in valuation allowance for the six-month

period ended June 30, 2024 is $ 57,028 .

The increase in valuation allowance for the six-month

period ended June 30, 2023 is $ 220,238 .

period ended March 31, 2024 is $ 14,473 .

The decrease in valuation allowance for the three-month

period ended March 31, 2023 is $ 206,671 .

There were no unrecognized tax benefits and accrual

for uncertain tax positions as of June 30, 2024 and December 31, 2023 and no amounts accrued for penalties and interest for the three

and six months ended June 30, 2024 and 2023.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

(Expressed in U.S.

for uncertain tax positions as of March 31, 2024 and December 31, 2023 and no amounts accrued for penalties and interest for the three

months ended March 31, 2024 and 2023.

NOTE 16 – BUSINESS SEGMENTS

11 unchanged sentences

All the customers are located in PRC.

June 30, 2024 Corporate

Total Operating Segment

(external customers)

(intersegment)

Income(loss) from operations before income tax benefit

( 4,662,586 )

( 4,945,589 )

( 5,146,997 )

Income tax benefit (expense)

Income (loss) from operations after

income tax benefit (expense)

( 3,500,334 )

( 3,737,479 )

( 3,938,887 )

Depreciation and amortization

Capital expenditures

June 30, 2023

(external customers)

(intersegment)

Income(loss) from operations before income tax benefit

Income tax benefit (expense)

Income (loss) from operations after

income tax benefit (expense)

Depreciation and amortization

Capital expenditures

* 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

June 30, 2024

(external customers)

Three-Month Period

Ended March 31, 2024 Corporate

Operating Segment

(intersegment)

Income (loss) from operations before income tax benefit (expense)

Loss from operations before income

( 4,782,815 )

1 unchanged sentence

( 5,269,419 )

Income tax benefit (expense)

Loss from operations after income tax benefit (expense)

Income tax (expense) benefit

Loss from operations after income

taxes(expense) benefit

( 3,584,744 )

3 unchanged sentences

Capital expenditures

June 30, 2023

Three-Month Period Ended March 31, 2023

(external customers)

(intersegment)

Income (loss) from operations before income tax benefit (expense)

( 1,197,201 )

( 1,617,225 )

( 1,718,656 )

Income tax benefit (expense)

Loss from operations after income tax benefit (expense)

( 1,223,970 )

( 1,325,401 )

Loss from operations before income benefit

Income tax benefit

Loss from operations after income taxes(benefit)

Depreciation and amortization

Capital expenditures

* 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.

* 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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(Expressed in U.S.

NOTE 16 – BUSINESS SEGMENTS – Continued

Three-Month Period Ended June 30,

Six-Month Period Ended June 30,

Three-Month Period Ended March 31,

Reconciliations

Total segment operating Income (loss)

$ ( 4,945,589 )

$ ( 845,275 )

Total segment operating loss

$ ( 5,200,440 )

1 unchanged sentence

Corporate costs

Unrealized gain on translation of intercompany balance

Income (loss) from operations

( 5,146,997 )

( 10,416,416 )

Unrealized gain (loss) on translation of intercompany balance

Loss from operations

( 5,269,419 )

Other income, net of expense

Other Expenses

( 29,169,008 )

( 29,173,011 )

Income (loss) before taxes

$ ( 34,306,028 )

$ ( 874,515 )

Loss before taxes

$ ( 5,262,192 )

$ ( 758,303 )

The following table shows the major customer(s)

(10% or more) for the three-month period ended June 30, 2024.

The following table shows the major customers

(10% or more) for the three-month period ended March 31, 2024.

Business Segments - Schedule of

1 unchanged sentence

Chemical Products

Percentage of Total Revenue (%)

Shandong Brother Technology Limited

Shandong Morui Chemical Company Limited

Shouguang Weidong Chemical Company Limited

The following table shows the major customer(s)

(10% or more) for the six-month period ended June 30, 2024.

Chemical Products

Percentage of

Shandong Morui Chemical Company Limited

Shandong Brother Technology Limited

Shouguang Weidong Chemical Company Limited

The following table shows the major customer(s)

(10% or more) for the three-month period ended June 30, 2023.

Chemical Products

Percentage of Total Revenue (%)

Shandong Morui Chemical Company Limited

Shouguang Weidong Chemical Company Limited

Shandong Brother Technology Limited

Shandong Shouguang God Runfa Marine Chemical Company Limited

The following table shows the major customer(s)

(10% or more) for the six-month period ended June 30, 2023.

Shandong Shouguangshen Runfa Marine Chemical Company Limited

The following table shows the major customers

(10% or more) for the three-month period ended March 31, 2023.

Chemical Products

Percentage of

Shandong Morui Chemical Company Limited

Shandong Brother Technology Limited

Shandong Morui Chemical Company Limited

Shouguang Weidong Chemical Company Limited

2 unchanged sentences

Customer Concentration

During the six-month period ended June 30, 2024,

the Company sold 60 % of its products to its top five customers, respectively.

As of June 30, 2024, amounts due from these customers were

$ 1,063,926 .

During the six-month period ended June 30, 2023,

the Company sold 69.9 % of its products to its top five customers, respectively.

As of June 30, 2023, amounts due from these customers

were $ 1,514,987 .

During the three-month period ended March 31,

2024, the Company sold 55 % of its products to its top five customers.

As of March 31, 2024, amounts due from these customers were $ 2,803,534 .

During the three-month period ended March 31,

2023, the Company sold 64 % of its products to its top five customers.

As of March 31, 2023, amounts due from these customers were $ 3,492,933 .

NOTE 18 – MAJOR SUPPLIERS

1 unchanged sentence

Cost of Goods

During the six-month period ended June 30, 2024

During the three-month period ended March 31,

2024, the Company purchased 100 % of its raw materials from its top three suppliers.

As of June 30, 2024, amounts due to those suppliers

were $ 132,606 .

During the six-month period ended June 30, 2023

As of March 31, 2024, amounts due to those

suppliers were $ 207,431 .

During the three-month period ended March 31,

2023, the Company purchased 100 % of its raw materials from its top three suppliers.

As of June 30, 2023, amounts due to those suppliers

were $ 221,315 .

As of March 31, 2023, amounts due to those

suppliers were $ 411,554 .

NOTE 19 – LOSS CONTINGENCIES

76 unchanged sentences

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 June 30, 2024.

the Company believes that it is not necessary to accrue for any estimated losses or impairment as of March 31, 2024.

NOTE 20 - SUBSEQUENT EVENT

Subsequent Event

Shandong Shouguang Vegetable Industry Group

and Shandong Shouguang Vegetable Seed Group Co., Ltd.

owe RMB15.0million (Approximate $2.12 million) and RMB10.0 million

(Approximate $1.41 million) to Shandong Deepin City Investment Emergency Lending Fund, respectively.

A total of nine companies and

individuals provided guarantee to these loans, including Shouguang Haoyuan Chemical Co., Ltd.

In June 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.

In June 2024, SHSI, a wholly owned subsidiary

of the Company, signed acquisition agreements with each of several sellers.

Under these agreements, each seller agrees to transfer to

SHSI, and SHSI agrees to purchase from each seller, a parcel of crude salt field located in Shouguang city Yangkou town.

aggregate price for these acquisitions is RMB 280,762,000 (approximately US$ 38,619,257 based on the exchange rate on July 3, 2024.

Shandong Shouguang Vegetable Industry Group Co., Ltd.

Shouguang Vegetable Seed Group Co., Ltd.

owe RMB15.0million (Approximate $2.12 million) and RMB10.0 million (Approximate $1.41 million)

to Shandong Deepin City InvestmentEmergency Lending Fund, respectively.

A total of nine companies and individuals provided guarantee to

these loans, includingShouguang Haoyuan Chemical Co., Ltd.

and Shouguang Yuxin Chemical Co., LTD.

However, considering the number of guarantors,the total amount of available fund indicated by Shandong Shouguang Vegetable Industry

Group Co., Ltd.

and legal advice, Gulf Resources believes that this guaranteed loan has limited impact on the company.

However, considering the number of guarantors,the

total amount of available fund indicated by Shandong Shouguang Vegetable Industry Group Co., Ltd.

and legal advice, GulfResources believes

that this guaranteed loan has limited impact on the company.

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

What changed 10-Q

Item 1. Financial Statements