Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 12

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 12
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No. 7, to temporarily stop production from December 16, 2019 to February 10, 2020. Subsequently, due to the coronavirus outbreak in China,
the local government ordered those bromine facilities to postpone the commencement of production. Subsequently, the Company received an
approval dated February 27, 2020 issued by the local governmental authority allowing the Company to resume production after the winter
temporary closure. Further, the Company received another approval from the Shouguang Yangkou People’s Government dated March 5,
2020 allowing the Company to resume production at its bromine factories No. 1, No. 4, No. 7 and No. 9 in order to meet the needs of bromide
products for epidemic prevention and control (the “March 2020 Approval”). The Company’s Factories No. 1 and No. 7 commenced
trial production in mid March 2020 and commercial production on April 3, 2020 and its Factories No. 4 and No. 9 commenced commercial production
on May 6, 2020. The Company received verbal notification from the government regarding Factory No. 8, allowing it to recommence production
in August 2022. Factory No. 8 began contributing revenue in the fourth quarter 2022. 

The Company is still waiting for governmental approval for Factories
No. 2 and No. 10. To our knowledge, the government is currently completing its planning process for all mining areas including that for
prevention of flood. As a result, we may be required to make some modifications to our current wells and aqueducts prior to commencement
of operations of these factories to satisfy the local government's requirements.

In April 2022, Shouguang Hengde Salt Industry Co. Ltd, our subsidiary,
was incorporated in Shandong Province, China, for crude salt production and trading. This subsidiary was created in response to a new
government policy that required bromine and crude salt companies to have separate registrations. The creation of this subsidiary and the
separation of bromine and crude salt does not impact sales or overall profits. However, the establishment of this subsidiary has resulting
in a reallocation of costs between bromine and crude salt.

(ii) Chemical Segment

On November 24, 2017, the Company received a letter
from the Government of Yangkou County, Shouguang City notifying the Company to relocate its