Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 564

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 8
Chunk 564
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 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. 1, 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”). The Company’s
Factories No. 1 and No. 7 commenced trial production in mid-March 2020 and commercial production on April 3, 2020 and its Factories No.
4 and No. 9 commenced commercial production on May 6, 2020. The Company received verbal notification from the government regarding Factory
No. 8, allowing it to recommence production in August 2022. Factory No. 8 began contributing revenue in the fourth quarter 2022.

The Company is awaiting governmental
approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention
measures. As a result, we may be required to make certain modifications to our existing wells and aqueducts 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