# EDGAR Filing Document

**Accession Number:** 0000885462
**File Stem:** 0001193805-23-000427
**Filing Date:** 2023-3
**Character Count:** 25264
**Document Hash:** 0fbafaa2fa6cb0eff8839bbf805d0548
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193805-23-000427.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001193805-23-000427

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230331

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** GULF RESOURCES, INC.
- **CENTRAL INDEX KEY:** 0000885462
- **STANDARD INDUSTRIAL CLASSIFICATION:** CHEMICALS & ALLIED PRODUCTS [2800]
- **IRS NUMBER:** 133637458
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34499
- **FILM NUMBER:** 23788672

**BUSINESS ADDRESS:**
- **STREET 1:** LEVEL 11, VEGETABLE BUILDING
- **STREET 2:** INDUSTRIAL PARK OF THE EAST CITY
- **CITY:** SHOUGUANG CITY, SHANDONG
- **STATE:** F4
- **ZIP:** 262700
- **BUSINESS PHONE:** 86 (536) 567-0008

**MAIL ADDRESS:**
- **STREET 1:** LEVEL 11, VEGETABLE BUILDING
- **STREET 2:** INDUSTRIAL PARK OF THE EAST CITY
- **CITY:** SHOUGUANG CITY, SHANDONG
- **STATE:** F4
- **ZIP:** 262700

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DIVERSIFAX INC
- **DATE OF NAME CHANGE:** 19940331

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

WASHINGTON, D.C. 20549

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934**

Date of Report (date of earliest event reported): March 31, 2023

**Gulf Resources, Inc.**

(Exact name of registrant as specified in charter)

**Nevada**

(State or other jurisdiction of incorporation)

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| | |
|:---|:---|
| **000-20936**<br> (Commission File Number) | **13-3637458**<br> (IRS Employer Identification No.) |

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**Level 11,Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong, China 262700**

------

(Address of principal executive offices and zip code)

**+86 (536) 567 0008**

------

(Registrant's telephone number including area code)

------

(Registrant's former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0005 par value | GURE | NASDAQ Global Select Market |

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| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.** |

---

On March 31, 2023, Gulf Resources, Inc. (the "Company") issued a press release announcing its full fiscal year ended December 31, 2022 financial results and business and strategic plan outlook. The full text of the press release is set forth in Exhibit 99.1 attached hereto.

As provided in General Instruction B.2 of SEC Form 8-K, such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

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| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

Exhibits

99.1 [Press Release of Gulf Resources, Inc. dated March 31, 2023.](e618425_ex99-1.htm) <br> 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | |
|:---|:---|
| GULF RESOURCES, INC. | GULF RESOURCES, INC. |
| By: | /s/ Min Li |
| Name: | Min Li |
| Title: | Chief Financial Officer |

---

Dated: March 31, 2023

## Exhibit 99.1

Exhibit 99.1

Gulf Resources Reports 2022 Results and Provides Business and Strategic Plan Outlook

SHOUGUANG, China, March 31, 2023 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", "we," or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today reports results for fiscal year 2022 and provides updates on its business segments and corporate strategies.

During 2022, revenues increased 20% to $66,094,486. Gross profits increased 34% to $37,425,334. Profits from operations increased 216% to $16,481,696. Net income per share was $1.00 versus a loss of ($0.09) per share. Despite negative foreign currency translation adjustment of $24,886,118, which impacted all balance sheet items, ending cash was $108,226,214 ($10.37\* per share), working capital was $107,649,606. Net net cash (cash minus all liabilities) per share was $8.38\*.

**The following are the financial highlights from 2022:**

**Revenues and Income**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Revenue for 2022 increased 20% to $66,094,486 from $55,030,586

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Cost of net revenues increased 6% to $28,669,152 from $27,132,372

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Gross Profit increased 34% to $37,425,334 from $27,898,214.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Direct labor and factory overhead incurred during plant shutdown increased
12% to $12,002,629.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· G&A expenses declined 37% to $6,028,079, largely because of share grants
to management in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Profits from operations increased 216% to $16,481,696 from $5,210,870.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Income before taxes increased 210% to $16,646,435 from $5,373,500.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· After Tax income was $10,059,450 compared to a loss of ($924,718).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net income per share was $1.00 compared to a loss of ($0.09) in the previous
year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Shares outstanding were 10,431,924 in 2022 versus 10,471,924 in 2021.

**Cash Flow**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Cash flow provided by operating Activities was
$51,149,065 compared to $23,311,169 in in the previous year. This was primarily due to depreciation & amortization of approximately
$26.78 million, net income of approximately $10.06 million, a decrease in accounts receivable of approximately $8.2 million and a decrease
in deferred taxes of $6.59 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net cash used in investing activities was $37,560,932
compared to $30,093,140 in the previous year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· For the fiscal year 2022, the Company had a negative
foreign currency translation adjustment of $24,886,118 versus a positive adjustment of $7,405,582 in the previous year. This adjustment
impacts all balance sheet translations into U.S. dollars.

**Balance Sheet**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Despite the large impact of the foreign currency
translation loss, our cash increased $12,458,951 to $108,226,214.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Cash per share was $10.37\* based on 10,431,924
shares outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Current Assets were $119,425,371

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Current liabilities were $11,775,765.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Working capital was $107,649,606. Working capital
per share was $10.32\*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net net cash (cash minus all liabilities) was
$87,413,077 or $8.38\* per share.

**Operations by Segment**

**Bromine**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net revenue in bromine increased by 21% to $58,964,941.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Volume increased 6% and the average selling price
increased 14%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The cost of net revenue increased 10% to $25,087,171.
A significant portion of the increase was due to the reallocation of costs between bromine and crude salt related to the creation of our
new crude salt subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Income from operations from our bromine segment
was $17,905,181 for the fiscal year 2022, compared to an income of $13,364,649 in the same period in 2021. The increase in income was
primarily due to a 14% increase in average selling price partially offset by additional cost allocations from the new divisional structure.

**Crude Salt**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Net revenue from our crude salt increased by
15% to $6,996,552.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Volume increased 1.5%, while the average selling
price increased by 13%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The cost of net revenue declined 16% to $3,581,567,
largely related to the reallocation of costs between bromine and crude salt related to the creation of our new crude salt subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Income from operations was $2,301,885 for fiscal
year 2022, compared to a loss of $1,078,320 in the same period in 2021. The reason for this was due to an increase in selling price, a
small increase in volume, and a decrease in cost allocations from the new divisional structure.

**Chemicals**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Our chemicals business had no revenues in either 2022 or 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Loss from operations from our chemical products
segment was $1,953,230 for the fiscal year 2022, compared to a loss of $2,550,561 in the same period in 2021.

**Natural Gas and Brine**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In 2022, we produced no revenue from our project in Sichuan Province, but
we did lease out some equipment for revenue of $132,993.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Loss from operations from our natural gas segment
was $148,099 for the fiscal year 2022, compared to a loss of $167,139 in the same period in 2021.

**Business and Strategic Plan Outlook**

**Bromine & Crude Salt**<br> Since the beginning of 2023, bromine prices have declined by approximately 40%. There are several reasons for the decline. Economic conditions in China as well as the rest of the world have slowed. Many of our customers have had their factories closed for Chinese New Year as well as for COVID restrictions, and demand for fire retardants for export have decreased due to the lockdown. The export of some other bromine downstream products have also decreased. With the lockdown in China, many fewer people used disinfectants because they were home instead of going to work or school. Producers of disinfectants and retailers had geared up for continued high demand, and the lockdown was a surprise.

The Company remains optimistic about bromine business. Some bromine factories in China have been permanently closed. Some others, like our factories #2 and #10, have not opened. There have been a few new discoveries of bromine, and the decline in the Chinese RMB against the USD has made bromine imports more expensive. Over time, the Company expects a return to bromine pricing.

The Company also expects and will try its best to receive approval to reopen one of its closed factories in 2023. The Company is continuing to work with the government on related issues.

**Yuxin Chemical Factory**<br> On March 23, 2023, the Company issued a press release detailing the delays in the opening of our Yuxin chemical factory due to COVID and stricter government regulations. As noted in the press release, the Company believes that once all of the equipment is delivered, it will take 3 to 4 months to get the equipment installed. After installation, the testing process is anticipated to take 2 to 3 months, after which we will be in a position to apply for environmental and safety approval. After we get the approval, it will take us 4 months to conduct trial production, and then we may start commercial production.

**Natural Gas**<br> As we have disclosed, The Company plans to proceed with its applications for the natural gas and brine project approvals with related government departments until after the governmental planning has been finalized the land and resource planning for Sichuan Province. Because of the complexities, we are discussing the possibility of a Joint Venture with the government of Daying County for the extraction of bromine water and related products. We believe such a Joint Venture could help us overcome some of the government related issues. We will keep investors informed of our progress.

**Shareholder Value**<br> Every quarter, our shareholders look at our balance sheet and ask why we cannot do more to enhance shareholder value by paying a dividend or buying back stock. Every quarter, we respond that China has significant restrictions on the export of cash and that we cannot get sufficient amounts of cash out of the country.

However, we are now trying to develop an alternate strategy. Some of the products that will be produced by our chemical factory, such as the materials for pharmaceuticals intermediaries, are actively exported from China to countries in Asia and around the world. We have formed a task force to analyze the potential of each of these products and markets, identify potential customer fits, and focus on the products these customers are interested in purchasing. When our chemical factory is ready for full production, we should also be ready to begin exporting some of our products. The export of chemical products may be able to afford us the financial flexibility to consider the type of actions our shareholders have been requesting.

**Assessments for 2023 and Beyond**<br> Because of the current conditions in China related to reopening after the lockdown as well as the delays in opening the Yuxin Chemical factory, the company will not at this time provide estimates for 2023.

However, the company does believe that the opportunities for long-term profitability have not been impacted by short-term issues. The company expects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Bromine prices will recover and that it will try to open one of its closed
factories for bromine and crude salt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The company expects Yuxin chemicals may provide sales and profit once it
is in full production.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The company expects Sichuan natural gas and brine business may be able to
receive government approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· With the opening of the Yuxin factory, the company try to plan and expects
to be able to generate export sales which will enable it to gain the financial flexibility to consider shareholder value initiative programs.

(\*These calculations are based on the number of shares issued and outstanding of 10,431,924 shares as of December 31, 2022)

**Conference Call**<br> Gulf Resources management will host a conference call on Monday, April 3, 2023 at 08:00 AM Eastern Time to discuss its fiscal year 2022 results ended December 31, 2022 and business and strategic plan outlook.

Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company management team will be available for investor questions following the prepared remarks.

To participate in this live conference call, please dial Toll Free +1 (888) 506-0062 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (973)-528-0011, and please reference to "Gulf Resources" or Participant Access Code: 351545 while dial in.

The webcasting is also available then, just simply click on the link below:<br> http://www.gulfresourcesinc.com/news-28.html

A replay of the conference call will be available two hours after the call's completion and expired by Monday, April 10, 2023. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 47964.

GULF RESOURCES, INC.<br> AND SUBSIDIARIES<br> CONSOLIDATED BALANCE SHEETS<br> (Expressed in U.S. dollars)

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| | | |
|:---|:---|:---|
|  | December 31, 2022 | December 31, 2021 |
| Current Assets |  |  |
| Cash | $108226214 | $95767263 |
| Accounts receivable, net | 5363166 | 14525807 |
| Inventories, net | 1598572 | 691111 |
| Prepayments and deposits | 4236782 | 4450037 |
| Other receivables | 637 | 644 |
| Total current assets | 119425371 | 115434862 |
| Non-Current Assets |  |  |
| Property, plant and equipment, net | 149916766 | 162657546 |
| Finance lease right-of use assets | 163868 | 184824 |
| Operating lease right-of-use assets | 8098427 | 8311127 |
| Prepaid land leases, net of current portion | 9508001 | 10368469 |
| Deferred tax assets, net | 5318909 | 12900034 |
| Total non-current assets | 173005971 | 194422000 |
| Total Assets | $292431342 | $309856862 |
| Liabilities and Stockholders' Equity |  |  |
| Current Liabilities |  |  |
| Accounts payable and accrued expenses | $7823722 | $10530776 |
| Taxes payable-current | 699563 | 775708 |
| Amount due to a related Party | 2605694 | 1849044 |
| Finance lease liability, current portion | 213346 | 227429 |
| Operating lease liabilities, current portion | 433440 | 506579 |
| Total current liabilities | 11775765 | 13889536 |
| Non-Current Liabilities |  |  |
| Finance lease liability, net of current portion | 1461721 | 1770526 |
| Operating lease liabilities, net of current portion | 7575651 | 7557583 |
| Total non-current liabilities | 9037372 | 9328109 |
| Total Liabilities | 20813137 | 23217645 |
| Commitment and Contingencies |  |  |
| Stockholders' Equity |  |  |
| PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding |  |  |
| COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 10,717,754 and 10,517,754 shares issued; and 10,431,924 and 10,471,924 shares outstanding as of December 31, 2022 and 2021 | 24476 | 24376 |
| Treasury stock; 285,830 and 45,830 shares as of December 31, 2022 and 2021 at cost | (1372673) | (510329) |
| Additional paid-in capital | 101237059 | 100569159 |
| Retained earnings unappropriated | 158089535 | 150463638 |
| Retained earnings appropriated | 26667097 | 24233544 |
| Accumulated other comprehensive income (loss) | (13027289) | 11858829 |
| Total Stockholders' Equity | 271618205 | 286639217 |
| Total Liabilities and Stockholders' Equity | $292431342 | $309856862 |

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GULF RESOURCES, INC.<br> AND SUBSIDIARIES<br> CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME<br> (Expressed in U.S. dollars)

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| | | |
|:---|:---|:---|
|  | Years Ended December 31, | Years Ended December 31, |
|  | 2022 | 2021 |
| NET REVENUE | $66094486 | $55030586 |
| OPERATING COSTS AND EXPENSE |  |  |
| Cost of revenues | (28669152) | (27132372) |
| Sales and marketing expenses | (62871) | (62964) |
| Direct labor and factory overheads | (12002629) | (10718605) |
| General and administrative expenses | (6028079) | (9525235) |
| Other operating expense | (2850059) | (2380540 |
|  | (49612790) | (49819716) |
| INCOME FROM OPERATIONS | 16481696 | 5210870 |
| OTHER INCOME (EXPENSE) |  |  |
| Interest expense | (121402) | (137178) |
| Interest income | 286141 | 295172 |
| Other (income) expenses |  | 4636 |
| INCOME BEFORE INCOME TAXES | 16646435 | 5373500 |
| INCOME TAX EXPENSE | (6586985) | (6298218) |
| NET INCOME (LOSS) | $10059450 | $(924718) |
| COMPREHENSIVE INCOME (LOSS): |  |  |
| NET INCOME (LOSS) | $10059450 | $(924718) |
| OTHER COMPREHENSIVE (LOSS) INCOME |  |  |
| - Foreign currency translation adjustments | (24886118) | 7405582 |
| TOTAL COMPREHENSIVE (LOSS) INCOME | $(14826668) | $6480864 |
| BASIC AND DILUTED EARNINGS (LOSS) PER SHARE | $1.00 | $(0.09) |
| BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES: | 10038982 | 10471924 |

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GULF RESOURCES, INC.<br> AND SUBSIDIARIES<br> CONSOLIDATED STATEMENTS OF CASH FLOWS<br> (Expressed in U.S. dollars)

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| | | |
|:---|:---|:---|
|  | Years Ended December 31, | Years Ended December 31, |
|  | 2022 | 2021 |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| Net loss | $10059450 | $(924718) |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization on capital lease | 120332 | 135707 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 26775620 | 20543425 |
| &nbsp;&nbsp;&nbsp;Unrealized translation difference | 563636 | 782660 |
| &nbsp;&nbsp;&nbsp;Deferred tax asset | 6586985 | 6298218 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense | 668000 | 3134080 |
| &nbsp;&nbsp;&nbsp;Shares issued from treasury stock for services |  |  |
| Changes in assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 8195123 | (7749127) |
| &nbsp;&nbsp;&nbsp;Inventories | (938923) | (259999) |
| &nbsp;&nbsp;&nbsp;Prepayment and deposits | 40430 | (2849670) |
| &nbsp;&nbsp;&nbsp;Other receivables |  | (85) |
| &nbsp;&nbsp;&nbsp;Accounts and Other payable and accrued expenses | (820628) | 2856504 |
| &nbsp;&nbsp;&nbsp;Amount due to a related Party | 778393 | 1852230 |
| &nbsp;&nbsp;&nbsp;Taxes payable | (288197) | (534307) |
| &nbsp;&nbsp;&nbsp;Prepaid land leases |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease | (591156) | 26251 |
| &nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | 51149065 | 23311169 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| Purchase of property, plant and equipment | (37560932) | (30093140) |
| **Net cash used in investing activities** | (37560932) | (30093140) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| Repayment of finance lease obligation | (264863) | (290597) |
| **Net cash used in financing activities** | (264863) | (290597) |
| EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (864319) | 8617293 |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | 12458951 | 1544725 |
| CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR | 95767263 | 94222538 |
| CASH AND CASH EQUIVALENTS - END OF YEAR | $108226214 | $95767263 |

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GULF RESOURCES, INC.<br> AND SUBSIDIARIES<br> CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)<br> (Expressed in U.S. dollars)

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| | | |
|:---|:---|:---|
|  | Years Ended December 31, | Years Ended December 31, |
|  | 2022 | 2021 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |
| Cash paid during the year for: |  |  |
| Paid for taxes | $10076097 | $13818199 |
| Interest on finance lease obligation | $120322 | $136709 |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |

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**About Gulf Resources, Inc.**

Gulf Resources, Inc. operates through four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"), Daying County Haoyuan Chemical Company Limited ("DCHC") and Shouguang Hengde Salt Industry Co. Ltd. ("SHSI"). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sell crude salt. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.

**Forward-Looking Statements**

CONTACT: Gulf Resources, Inc.

Web: http://www.gulfresourcesinc.com

Director of Investor Relations

Helen Xu (Haiyan Xu)

beishengrong@vip.163.com