Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 3

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 3
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 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 midMarch 2020 and commercial production on April 3, 2020 and its Factories No. 4 and No. 9 commenced
commercial production on May6, 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 two chemical production plants located in
the second living area of the Qinghe Oil Extraction to the Bohai Marine Fine Chemical Industrial Park (“ Bohai Park”).
This was because the two plants were located in a residential area and their production activities impacted the living environment of
the residents. This was as a result of the country’s effort to improve the development of the chemical industry, manage safe production
and curb environmental pollution accidents effectively, and ensure the quality of the living environment of residents. All chemical enterprises
which did not comply with the requirements of the safety and environmental protection regulations were ordered to shut down.

In December 2017, the Company secured from the
government the land use rights for its chemical