Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 14

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1
Chunk 14
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Cash Transfers and Dividend Distribution

Our corporate structure is a direct
holding structure, that is, the overseas entity listed in the U.S., Gulf Resources, Inc., a Nevada corporation (“Gulf Resources”),
controls SCHC (the “WFOE”), SYCI and DCHC through the Hong Kong company, Hong Hong Jiaxing Industrial Limited, or Hong Kong
Jiaxing.

Within our direct holding structure,
the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC. Foreign
investors’ funds can be directly transferred to Hong Kong Jiaxing, and then transferred to subordinate operating entities through
SCHC, or the WFOE.

If the Company intends to distribute
dividends, the Company will transfer the dividends to Hong Kong Jiaxing in accordance with the laws and regulations of the PRC, and then
Hong Kong Jiaxing will transfer the dividends to Gulf Resources, and the dividends will be distributed from Gulf Resources to all shareholders
respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries
or regions.

In the reporting periods presented in this annual report,
no cash and other asset transfers have occurred among the Company and its subsidiaries; and no dividends or distributions of a subsidiary
has been made to the Company or to the shareholders from the Company. For the foreseeable future, the Company does not expect to pay any
cash dividends.

Our PRC subsidiaries’ ability
to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends
to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards
and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if
any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable
as cash dividends.

8 

To address persistent capital
outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and
the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months,
including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments
and shareholder loan