Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 23

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 23
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    $564,523 

The overall accounts receivable balance as of
September 30, 2025 increased by $2,858,041, as compared to those of December 31, 2024. The increase was due to the rise in sales. We have
policies in place to ensure that sales are made to customers with an appropriate credit history. We perform ongoing credit evaluation
on the financial condition of our customer.

NOTE 3 – INVENTORIES

Inventories consist of:

Inventories - Schedule of Inventories, Current

    September 30,  2025 
    December 31,  2024

    Raw materials 
    $30,870  
    $10,610 
  
    Finished goods 
     451,842  
     1,545,521 
  
    Less: impairment 
     —  
     (1,240,760)
  
    Inventory, net 
    $482,712  
    $315,371 

The Company recorded impairment charges for slow moving inventory in
the amounts of nil and $989,035 for the years ended September 30, 2025 and December 31, 2024.

NOTE 4 – PREPAYMENTS AND DEPOSITS, NET

Prepayments and deposits consisted of the following:

Prepayments and
Deposits, Net - Schedule of Prepayments and Deposits, Net

    September 30, 2025 
    December 31, 2024
  
    Prepayments and deposits 
    $7,583,940  
    $8,025,110 
  
    Provision for impairment 
     (1,667,769) 
     (1,648,454)
  
    Prepayments and deposits, net 
    $5,916,171  
    $6,376,656 

As of September 30, 2025, the total amount of advance payments and
deposits recorded by the company, net of impairment provisions was $5,916,171.

NOTE 5 – PREPAID LAND LEASES

The Company has the rights to use certain parcels
of land located in Shouguang, Shandong, PRC, through lease agreements signed with local townships or the government authority. The production
facilities and warehouses of the Company are located on these parcels of land. The lease term ranges from ten to fifty years. Some of