Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 13

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 13
---
, 2025 increased by $1,549,699compared to those of December 31, 2024. We have policies in place to ensure that sales are
made to customers with an appropriate credit history. We perform ongoing credit evaluation on the financial condition of our customer.

NOTE 3 - INVENTORIES

Inventories consist of:

Inventories - Schedule of Inventories, Current

                        March 31,                   December 31,                   
  Raw materials         $               41,865      $                      10,610  
  Finished goods                       413,194                          1,545,521  
  Less: impairment                           —                        ( 1,240,760  
  Inventory, net        $              455,059      $                     315,371  

The Company recorded impairment charges for slow moving inventory in
the amounts of $ niland $989,035for the years ended March 31, 2025 and December 31, 2024.

NOTE 4 - PREPAYMENTS AND
DEPOSITS, NET

Prepayments and deposits consisted of the following:

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

                                       March 31,      December 31, 2024  
  Prepayments and deposits            $8,043,985             $8,025,110  
  Provision for impairment           ( 1,650,824            ( 1,648,454  
  Prepayments and deposits, net       $6,393,161             $6,376,656  

As of March 31, 2025, the Company recorded the total prepayments
and deposits, and the provision for impairment was $6,393,161.

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 tento fiftyyears. 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