Company: GURE
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001193805-25-001184
Chunk: 12

Company: GULF RESOURCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 12
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 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 still waiting for governmental
approval for Factories No. 2 and No. 10. To our knowledge, the government is currently completing its planning process for all mining
areas including that for prevention of flood. As a result, we may be required to make some modifications to our current wells and aqueducts
prior to commencement of operations of these factories to satisfy the local government's requirements.

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.

(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 was because the two plants were located in a residential area and their production activities impacted the living environment of
the residents. This was 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 did not comply with the requirements of the safety and environmental protection regulations were 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
design draft and other related documents to the local authorities for approval. In January 2020, the Company received the environmental
protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began