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

Company: GULF RESOURCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 13
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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 were eased. Accordingly, the Company contacted its suppliers and expect to have the remainder
of the equipment produced and delivered, so the Company can complete installation and begin testing and trial production.

The Company estimates this relocation process will cost approximately
$69 million 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 $45,584,344 and $45,584,344, which were recorded in the Property, plant and equipment in the consolidated
balance sheets as of June 30, 2025 and December 31, 2024. 

    7 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

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 SichuanProvince, 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
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