Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 14

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 14
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 January 2017, the Company completed the first
brine water and natural gas well field construction in Daying located in Sichuan Province, China, and commenced trial production in January
2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town, Daying County, Sichuan Province, whereby
the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project,
and approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until these
approvals have been received, the Company has to temporarily halt trial production at its natural gas well in Daying. In compliance with
the Chinese government new policies, the Company is also required to obtain an exploration license and a mining license for bromine and
natural gas, respectively. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of
Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect
on May 1, 2020, privately owned enterprises are allowed to participate in the natural gas production. The Company plans to proceed with
its applications for the natural gas and brine project approvals with related government departments until the governmental planning has
been finalized.

(d) Use of Estimates

The Company’s consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America and this requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The most
significant accounting estimates with regard to these consolidated financial statements that require the most significant and
subjective judgments include, but are not limited to, useful lives of property, plant and equipment, recoverability of long-lived
assets, determination of impairment losses, assessment of market value of inventories and provision for inventory obsolescence,
allowance for doubtful accounts, recognition and measurement of deferred income taxes, valuation allowance for deferred tax assets,
and assumptions used for the valuation of share based payments. Accordingly, actual results may differ significantly from these
estimates under different assumptions or conditions.

(e) Cash and Cash Equivalents