Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 4

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 4
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 plants located at the Bohai Park and in June 2018, the Company presented a completed construction
design draft and other related documents to the local authorities for approval. In January 2020, the Company received the environmental
protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. The Company began
the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020 and basically completed
the civil works by the end of June 2021. On November 15, 2021, the Company announced that due to the supply chain issues as well as the
electric restrictions in China, the delivery of some equipment, the equipment installation and testing and beginning trial production
at the chemical factory had been delayed. On February 22, 2022, the Company announced that discussions with the government have convinced
management that the electricity restrictions are being eased. Accordingly, the Company has contacted its suppliers and will have the remainder
of the equipment produced and delivered, so the Company can complete installation and begin testing and trial production.

The COVID restrictions and resulting national and international supply
chain issues as well as permitting issues have caused delays in receiving some previously ordered machinery and equipment. The Company
is working with its existing suppliers and may identify new suppliers so that it can complete construction of its factory based on accelerated
delivery. Currently, the Company can not estimate when construction will be completed and production can begin.

The Company estimates this relocation process will cost approximately
$69million in total. The Company incurred relocation costs comprising prepaid land lease, professional fees related to the design
of the new chemical factory, purchase of plant and equipment and construction costs and installation costs incurred for the new chemical
factory in the amount of $45,584,344and $45,584,344, which were recorded in the Property, plant and equipment in the consolidated balance
sheets as of March 31, 2025 and December 31, 2024.

The Company suspended the construction in the chemical factory until it
decide what products can be produced most profitably.

(iii) Natural Gas Segment

In 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