Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 326

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 5
Chunk 326
---
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