Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 5

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 5
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 County, Sichuan
Province, whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas
and brine water project, and approvals for safety production inspection, environmental protection assessment, and to solve the
related land issue. Until these approvals have been received, the Company has to temporarily halt trial production at its natural
gas well in Daying. In compliance with the Chinese government new policies, the Company is also required to obtain an exploration
license and a mining license for bromine and natural gas, respectively. Pursuant to the Opinions of the Ministry of Natural
Resources on Several Issues in Promoting the Reform of Mineral Resources Management(Trial) promulgated by the Ministry of Natural
Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises are allowed to participate
in the natural gas production. The Company plans to proceed with its applications for the natural gas and brine project approvals
with related government departments until the governmental planning has been finalized.

(c) Use of Estimates

The Company’s consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America and this requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The most
significant accounting estimates with regard to these consolidated financial statements that require the most significant and
subjective judgments include, but are not limited to, useful lives of property, plant and equipment, recoverability of long-lived
assets, determination of impairment losses, assessment of market value of inventories and provision for inventory obsolescence,
allowance for doubtful accounts, recognition and measurement of deferred income taxes, valuation allowance for deferred tax assets,
and assumptions used for the valuation of share based payments. Accordingly, actual results may differ significantly from these
estimates under different assumptions or conditions.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances and highly liquid
investments with original maturities of three months or less. Because of short maturity of these investments, the carrying amounts approximate
their fair values.

(e) Allowance
for Doubtful Accounts

We make estimates of the uncollectability of accounts receivable, especially