Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 294

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 5
Chunk 294
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s prior to commencement of operations
of these factories in order 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 as planned.

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 required 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.

    F-8 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

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

(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 is because the two plants are located in a residential area and their production activities will impact the living
environment of the residents. This is 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 do not comply with the requirements of the safety and environmental protection regulations will be 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