Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 76

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1B
Chunk 76
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 significant weight is given to evidence that can be objectively verified.

Stock-based compensation

We account for stock-based compensation
in accordance with the fair value recognition provisions of U.S. GAAP. We use the Black- Scholes model which requires the input of highly
subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before
exercising them, the estimated volatility of our common stock price over the expected term and the number of options that will ultimately
not complete their vesting requirements. The assumptions for expected volatility and expected term are the two assumptions that significantly
affect the grant date fair value. Changes in expected risk-free rate of return do not significantly impact the calculation of fair value,
and determining this input is not highly subjective.

We use annualized historical stock
price volatility which is deemed to be appropriate to serve as the expected volatility of our stock price and is assumed to be constant
and prevailing. The expected term represents the weighted-average period that our stock options are expected to be outstanding. The expected
life is based on historical option exercise pattern.

Recent Accounting Pronouncements

See “Note 1 – Nature
of Business and Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Item 8. Financial
Statements and Supplementary Data for a full description of recent accounting pronouncements including the respective expected dates of
adoption and effects on the consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about
Market Risk.

Pursuant to Item 305(e) of Regulation
S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary
data required by this item are included in a separate section of this Report. See “Index to Consolidated Financial Statements”
on Page F-1.

46 

GULF RESOURCES, INC.

AND
SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 and 2023

C O N T E N T S

    PAGE

    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #2729)
    F-2

    CONSOLIDATED BALANCE SHEETS
    F-3

    CONSOLIDATED STATEMENTS OF