Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 137

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1A
Chunk 137
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 have been concerns
regarding oversight of the audits of our financial statements filed with the SEC. If the PCAOB continues to be unable to inspect our audit
firm in the PRC for three consecutive years, the HFCAA requires the SEC to prohibit the trading of our securities on a national securities
exchange, including Nasdaq, or on over-the-counter markets in the United States.

In addition, the U.S. Senate and U.S. House of
Representatives have each passed bills, which, if enacted, would decrease the number of non-inspection years from three consecutive years
to two, thus reducing the time period before our securities may be prohibited from trading on a U.S. securities exchange or delisted from
Nasdaq. The foregoing could adversely affect the market price of our securities and our ability to raise capital effectively.

Auditors of companies that are registered with
the SEC and traded publicly in the United States, including our independent registered public accounting firm, are required to be registered
with the PCAOB and to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and applicable
professional standards. Because our current auditor is located in mainland China, a jurisdiction where the PCAOB is currently unable to
conduct inspections without the approval of Chinese authorities, our auditor is not currently inspected by the PCAOB.

PCAOB inspections of auditors located outside
of mainland China and Hong Kong have at times identified deficiencies in those auditors’ audit procedures and quality control procedures,
which may be addressed as part of the PCAOB’s inspection process to improve future audit quality. The lack of PCAOB inspections
of audit work undertaken in mainland China and Hong Kong prevents the PCAOB from regularly evaluating our auditor’s audits and its
quality control procedures. As a result, investors are deprived of the benefits of PCAOB inspections, which could result in limitations
or restrictions on our access to the U.S. capital markets.

Furthermore, in recent years, the U.S. Congress
and regulatory authorities have continued to express concerns about challenges in their oversight of financial statement audits of U.S.-listed
companies with significant operations in China. As part of this continued focus on access to audit and other information currently protected
by national law, in particular under Chinese law, the United States enacted the HFCAA in December 2020. The HFCAA requires the SEC to
identify issuers that have filed an annual report with an audit report issued by a registered public accounting firm that is located in
a foreign jurisdiction and