Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 3

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1
Chunk 3
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 result of the transactions
described above, our corporate structure is linear. That is Gulf Resources owns 100% of the outstanding shares of Upper Class Group Limited,
which owns 100% of the outstanding shares of Hong Kong Jiaxing, which owns 100% of the outstanding shares of SCHC, which owns 100% of
the outstanding shares of SYCI. Further, as a result of our acquisitions of SCHC and SYCI, our historical consolidated financial statements,
as contained in our Consolidated Financial Statements and Management’s Discussion and Analysis, appearing elsewhere in the report,
reflect the accounts of SCHC and SYCI.

On January 12, 2015, the Company
and SCHC entered into an Equity Interest Transfer Agreement with Shouguang City Rongyuan Chemical Co., Ltd (“SCRC”), pursuant
to which SCHC agreed to acquire SCRC and all rights, title and interest in and to all assets owned by SCRC, a leading manufacturer of
materials for human and animal antibiotics in China and other parts of Asia.

On February 4, 2015, the Company
closed the transactions contemplated by the agreement between the Company, SCHC and SCRC. On the closing Date, the Company issued 7,268,011
shares of its common stock, par value $0.0005 per share (the “Shares”), at the closing market price of $1.84 per Share on
the closing date to the four former equity owners of SCRC .The issuance of the Shares was exempt from registration pursuant to Regulation
S of the Securities Act of 1933, as amended. On the Closing Date, the Company entered into a lock-up agreement with the four former equity
owners of SCRC. In accordance with the terms of the lock-up agreement, the shareholders agreed not to sell or transfer the Shares for
five years from the date the stock certificates evidencing the Shares were issued.

2 

The sellers of SCRC agreed as
part of the purchase price to accept the Shares, based on a valuation of $10.00 (restated for the 1-for-5 reverse stock split in January
2020), which was a 73% premium to the price on the day the agreement was reached. For accounting purposes, the Shares were valued at $9.20
(restated for the 1-for-5 reverse stock split in January 2020), which was the closing price of our common stock on the closing date of
the agreement. The