Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 493

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 493
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 share
are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using
weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares
that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the
outstanding stock options were greater than the market price of the common stock. Anti-dilutive common stock equivalents which were excluded
from the calculation of number of dilutive common stock equivalents amounted to 0 and 0 shares for the years ended December 31, 2024 and
2023, respectively. These awards could be dilutive in the future if the market price of the common stock increases and is greater than
the exercise price of these awards.

(q)      Reporting Currency and Translation

The financial statements of the
Company’s foreign subsidiaries are measured using the local currency, Renminbi (“RMB”), as the functional currency;
whereas the functional currency and reporting currency of the Company is the United States dollar (“USD” or “$”).

    F-13 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

NOTE 1 – BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

As such, the Company uses the
“current rate method” to translate its PRC operations from RMB into USD, as required under FASB ASC 830 “Foreign Currency
Matters”. The assets and liabilities of its PRC operations are translated into USD using the rate of exchange prevailing at the
balance sheet date. The capital accounts are translated at the historical rate. Adjustments resulting from the translation of the balance
sheets of the Company’s PRC subsidiaries are recorded in stockholders’ equity as part of accumulated other comprehensive income
(loss). The statement of comprehensive income (loss) is translated at average rate during the reporting period. Gains or losses resulting
from transactions in currencies other than the functional currencies are recognized in net loss for the reporting periods as part of general
and administrative expense. The statement of cash flows is translated at average rate during the reporting period, with the exception
of the consideration paid for the acquisition of business which is translated at historical rates.

(r)