Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 15

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 15
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Cash and cash equivalents consist of all cash balances and highly
liquid investments with original maturities of three months or less. Because of short maturity of these investments, the carrying
amounts approximate their fair values.

(f)           Allowance
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.

(g)           Concentration
of Credit Risk

The Company is exposed to credit risk in the normal course of business,
primarily related to accounts receivable and cash and cash equivalents. Substantially all of the Company’s cash and cash equivalents
are maintained with financial institutions in the PRC, namely, Industrial and Commercial Bank of China Limited, China Merchants Bank Company
Limited, Bank of China Limited and Sichuan Rural Credit Union, which are not insured or otherwise protected. The Company placed $5,820,083 and
$10,075,162 with these institutions as of September 30, 2025 and December 31, 2024, respectively.  The Company has not
experienced any losses in such accounts in the PRC.

Concentrations of credit risk with respect to accounts receivable exists
as the Company sells a substantial portion of its products to a limited number of customers. However, such concentrations of credit risks
are limited since the Company performs ongoing credit evaluations of its customers’ financial condition and extends credit terms
as and when appropriate.

    5 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

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

(h)           Property,
Plant and Equipment

Property, plant and equipment