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

Company: GULF RESOURCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 25
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4,665,429 were recorded in direct
labor and factory overheads incurred during plant shutdown, administrative expenses and cost of net revenue.

NOTE 7 – FINANCE LEASE RIGHT-OF-USE ASSETS

Property, plant and equipment under finance leases, net consist of
the following:

Finance Lease Right-Of-Use Assets - Schedule of Property,
Plant and Equipment Under Finance Leases

    June 30, 2025 
    December 31, 2024
  
    At cost: 

    Buildings Buildings 
    $209,342  
    $208,473 
  
    Total 
     209,342  
     208,473 
  
    Less: Accumulated depreciation and amortization 
     (134,674) 
     (131,605)
  
    Net book value 
    $74,668  
    $76,868 

The above buildings erected on parcels of land
located in Shouguang, PRC, are collectively owned by local townships.  The Company has not been able to obtain property ownership
certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of land.  

During the three and six months period ended June
30, 2025, depreciation and amortization expense totaled $1,255 and $2,512, respectively, which was recorded in direct labor and factory
overheads incurred during plant shutdown.

During the three and six months period ended June
30, 2024, depreciation and amortization expense totaled $1,269 and $2,540, respectively, which was recorded in direct labor and factory
overheads incurred during plant shutdown.

    14 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

 (Expressed in U.S. dollars)

(UNAUDITED)

NOTE 8 – OPERATING LEASE RIGHT– OF
USE ASSETS

The Company has the rights to use certain parcels
of land located in Shouguang, PRC, through lease agreements signed with local townships or the government authority. For parcels of land
that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels of land of which the
Company cannot obtain land use rights certificates covers a total of approximately 34.95 square kilometers with an