Company: GURE
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001193805-25-001184
Chunk: 22

Company: GULF RESOURCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 22
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523 

The overall accounts receivable balance as of June 30, 2025 increased
by $2,586,327 compared 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

    June 30, 2025 
    December 31, 2024

    Raw materials 
    $37,545  
    $10,610 
  
    Finished goods 
     477,468  
     1,545,521 
  
    Less: impairment 
     —  
     (1,240,760)
  
    Inventory, net 
    $515,013  
    $315,371 

The Company recorded impairment charges for slow moving inventory in
the amounts of $nil and $989,035 for the years ended June 30, 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

    June 30, 2025 
    December 31, 2024
  
    Prepayments and deposits 
    $10,398,651  
    $8,025,110 
  
    Provision for impairment 
     (1,655,327) 
     (1,648,454)
  
    Prepayments and deposits, net  
    $8,743,324  
    $6,376,656 

As of June 30, 2025, the total amount of advance payments and deposits
recorded by the company, net of impairment provisions was $8,743,324.

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 ten to fifty years. Some of
the lease contracts were paid in one lump sum upfront and some are paid annually at the beginning