Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 102

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1B
Chunk 102
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 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 the lease contracts were paid in one lump sum upfront and some are paid annually at the beginning of each anniversary
date. These leases have no purchase option at the end of the lease term and were classified as operating leases prior to and as of January
1, 2019 when the new lease standard was adopted. Prior to January 2019, the prepaid land lease was amortized on a straight line basis.
As of January 1, 2019, all the leases in which term has commenced and were in use were classified as operating lease right-of-use assets
(“ROU”). See Note 7.

In December 2017, the
Company paid a one lump sum upfront amount of $8,846,282 for a 50-year lease of a parcel of land at Bohai Marine Fine Chemical
Industrial Park (“Bohai”) for the new chemical factory to be built. There is no purchase option at the end of the lease
term. This was classified as an operating lease prior to and as of January 1, 2019. The land use certificate was issued on October
25, 2019. The lease term expires on August 12, 2069. The amount paid was recorded as prepaid land leases, net of current portion in
the consolidated balance sheet as of December 31 2024 and 2023. As of December 31, 2024, the prepaid land lease increased to
$9,204,556 due to an additional amount paid for stamp duty and related land use rights fees. Amortization of this prepaid land lease
will commence when the chemical factory is built and placed in service.

    F-16 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment

    December 31, 2024 
    December 31, 202