Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 577

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 8
Chunk 577
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 $315,371  
    $577,229 

The Company recorded impairment
charges for slow moving inventory in the amounts of $989,035 and $230,776 for the years ended December 31, 2024 and 2023.

NOTE 4 – PREPAYMENTS
AND DEPOSITS, NET

Prepayments and deposits consisted of the following:

Prepayments and
Deposits, Net - Schedule of Prepayments and Deposits, Net

    December 31, 2024
     
    December 31, 2023
  
    Prepayments and deposits
     
    $
    8,025,110

    $
    8,395,290

    Provision for impairment

    (1,648,454)

    -

    Prepayments and deposits, net
     
    $
    6,376,656

    $
    8,395,290

For the year December 31, 2024 and 2023, the Company recorded
provision of $1,663,933 and nil for the prepayments and deposits.

NOTE 5 – PREPAID LAND LEASES

The Company has the rights to
use certain parcels of land located in Shouguang, Shandong, PRC, through lease agreements signed with local townships or the government
authority. The production facilities and warehouses of the Company are located on these parcels of land. The lease term ranges from ten
to fifty years. Some of the lease contracts were paid in one lump sum upfront and some are paid annually at the beginning of each anniversary
date. These leases have no purchase option at the end of the lease term and were classified as operating leases prior to and as of January
1, 2019 when the new lease standard was adopted. Prior to January 2019, the prepaid land lease was amortized on a straight line basis.
As of January 1, 2019, all the leases in which term has commenced and were in use were classified as operating lease right-of-use assets
(“ROU”). See Note 7.

In December 2017, the
Company paid a one lump sum upfront amount of $8,846,282 for a 50-year lease of a parcel of land at Bohai Marine Fine Chemical
Industrial Park (“Bohai”) for the new chemical factory to be built. There is no purchase option at the end of the lease
term. This was classified as an operating lease prior to