Company: GURE
Filing Date: 2025-09-22
Form Type: S-3/A
Source: 0001193805-25-001326
Chunk: 22

Company: GULF RESOURCES, INC.
Filing Date: 2025-09-22
Form: S-3/A
Chunk 22
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 Enterprises, or SAFE Circular
19, which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the
foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit
FIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure beyond their business scopes, providing
entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular on Reforming and Regulating Policies
on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular
16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis.
SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited
to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in China. SAFE
Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly
or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall
not be provided as loans to its non-affiliated entities. As this circular is relatively new, there remains uncertainty as to its interpretation
and application and any other future foreign exchange related rules. Violations of these Circulars could result in severe monetary or
other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to use Renminbi converted from the net proceeds
of this Offering to fund our PRC operating subsidiary, to invest in or acquire any other PRC companies through our PRC Subsidiaries, which
may adversely affect our business, financial condition and results of operations.

China’s Anti-Monopoly Law, M&A rules and certain other PRC laws and regulations also establish complex procedures for acquisitions conducted by foreign investors that could make it more difficult for us to grow through acquisitions in China.

A number of regulations also established additional
procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming
and complex. For example, the M&A rules require that the Ministry of Commerce, or the MOFCOM, be notified in advance of any change-of-control
transaction in which a foreign investor takes