Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 20

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 20
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. In cases where the implicit rate is not readily
determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the
present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company does not recognize operating lease
ROU assets and liabilities arising from lease arrangements with lease term of twelve months or less.

(q)        Stock-based Compensation

Stock-based awards issued to employees are recorded
at their fair values estimated at grant date using the Black-Scholes model and the portion that is ultimately expected to vest is recognized
as compensation cost over the requisite service period. Consistent with the accounting requirement for employee stock-based awards, nonemployee
stock-based awards are measured at the grant-date fair value of the equity instruments that the Company is obligated to issue when the
good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments
have been satisfied.

The Company has elected to account for the forfeiture
of stock-based awards as they occur.

(r)        Loss
Contingencies

The Company accrues for loss contingencies relating
to legal matters, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when
such liabilities become probable and could be reasonably estimable. Such estimates may be based on advice from third parties or on management’s
judgment, as appropriate. Revisions to accruals are reflected in earnings (loss) in the period in which different facts or information
become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of
loss. Amounts paid upon the ultimate resolution of such liabilities may be materially different from previous estimates.

(s)        Income
Tax

The Company accounts for income taxes in accordance
with the Income Taxes Topic of the FASB ASC, which requires the use of the liability method of accounting for deferred income taxes. Under
this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax
basis of assets and liabilities and their reported amounts at each period end. Deferred tax assets and liabilities are measured using
tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized
or settled. The deferred income tax effects of a change in tax rates are recognized in the period of enactment. If it is more likely than