Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 46

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1A
Chunk 46
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 the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective
in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency
to Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital
account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to
all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated
capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations,
while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular is relatively new, there
remains uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these
Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability
to use Renminbi converted from the net proceeds of this offering to fund our PRC operating subsidiary, to invest in or acquire any other
PRC companies through our PRC Subsidiary, which may adversely affect our business, financial condition and results of operations.

Fluctuations in exchange
rates could have a material and adverse effect on our results of operations and the value of your investment.

The value
of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation
of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of
our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries
in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and
financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the common
stock in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of