Gulf Resources, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended June 30, 2025

	Or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _________ to _________

Commission File Number: 001-34499

GULF RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada		13-3637458
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Level 11, Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong, China		262700
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: +86 (536) 567-0008

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

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, $0.0005 par value	GURE	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated Filer ☒	Smaller reporting company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of August 12, 2025, the registrant had outstanding 13,346,618 shares of common stock, excluding 285,830 shares of treasury stock.

Table of Contents

Part I – Financial Information
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	40
Item 4. Controls and Procedures	41
Part II – Other Information
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	42
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	43
Item 3. Defaults Upon Senior Securities	43
Item 4. Mine Safety Disclosures	43
Item 5. Other Information	43
Item 6. Exhibits	43
Signatures	44

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars)

	June 30, 2025 (Unaudited)			December 31, 2024 (Audited)
Current Assets
Cash	$	7,736,081		$	10,075,162
Accounts receivable, net		3,150,850			564,523
Inventories, net		515,013			315,371
Prepayments and deposits		8,743,324			6,376,656
Amount due from related parties		25,144			25,040
Other receivable		105,564			94,074
Total Current Assets		20,275,976			17,450,826
Non-Current Assets
Property, plant and equipment, net		128,694,551			136,143,177
Finance lease right-of use assets		74,668			76,868
Operating lease right-of-use assets		5,937,515			6,169,855
Prepaid land leases, net of current portion		9,648,863			9,615,269
Deferred tax assets, net		—			—
Total non-current assets		144,355,597			152,005,169
Total Assets	$	164,631,573		$	169,455,995

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	11,551,878		$	14,323,458
Taxes payable-current		298,037			113,999
Advance from customer		—			—
Amount due to related parties		2,589,489			2,584,808
Finance lease liability, current portion		188,550			217,743
Operating lease liabilities, current portion		162,134			491,850
Total Current Liabilities		14,790,088			17,731,858
Non-Current Liabilities
Finance lease liability, net of current portion		891,801			1,075,865
Operating lease liabilities, net of current portion		6,734,859			6,941,602
Total Non-Current Liabilities		7,626,660			8,017,467
Total Liabilities	$	22,416,748		$	25,749,325

Commitment and Loss 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; 13,632,448 and 11,012,754 shares issued; and 13,346,618 and 10,726,924 shares outstanding as of June 30, 2025 and December 31, 2024		25,934			24,623
Treasury stock; 285,830 shares as of June 30, 2025 and December 31, 2024 at cost		(1,372,673	)		(1,372,673	)
Additional paid-in capital		105,167,292			101,688,262
Share to be issued		—			194,700
Retained earnings unappropriated		31,955,527			37,358,804
Retained earnings appropriated		26,667,097			26,667,097
Accumulated other comprehensive income		(20,228,352	)		(20,854,143	)
Total Stockholders’ Equity		142,214,825			143,706,670
Total Liabilities and Stockholders’ Equity	$	164,631,573		$	169,455,995

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in U.S. dollars)

(UNAUDITED)


	Three-Month Period Ended June 30,						Six-Month Period Ended June 30,
	2025			2024			2025			2024

NET REVENUE	$	8,343,785		$	2,383,169		$	9,948,232		$	3,690,231

OPERATING COSTS AND EXPENSE
Cost of net revenue		(7,357,130	)		(5,112,058	)		(8,951,400	)		(7,231,903	)
Sales and marketing expenses		(14,802	)		(13,633	)		(19,855	)		(18,124	)
Direct labor and factory overheads incurred during plant shutdown		(727,774	)		(1,714,503	)		(3,953,582	)		(5,449,192	)
General and administrative expenses		(994,765	)		(689,972	)		(2,384,288	)		(1,407,428	)

TOTAL OPERATING COSTS AND EXPENSE		(9,094,471	)		(7,530,166	)		(15,309,125	)		(14,106,647	)

LOSS FROM OPERATIONS		(750,686	)		(5,146,997	)		(5,360,893	)		(10,416,416	)

OTHER INCOME (EXPENSE)
Interest expense		(21,674	)		(24,814	)		(43,396	)		(49,644	)
Interest income		1,795			34,791			4,224			70,851
Other expense, net		(3,212	)		—			(3,212	)		(4,003	)
Loss on disposal of property, plant and equipment		—			(29,169,008	)		—			(29,169,008	)

Loss before taxes		(773,777	)		(34,306,028	)		(5,403,277	)		(39,568,220	)

INCOME TAX BENEFIT (EXPENSE)		—			1,208,110			—			2,478,170
NET LOSS	$	(773,777	)	$	(33,097,918	)	$	(5,403,277	)	$	(37,090,050	)

COMPREHENSIVE LOSS
NET LOSS	$	(773,777	)	$	(33,097,918	)	$	(5,403,277	)	$	(37,090,050	)
- Foreign currency translation adjustments		403,775			(849,254	)		625,791			(1,243,121	)
TOTAL COMPREHENSIVE LOSS	$	(370,002	)	$	(33,947,172	)	$	(4,777,486	)	$	(38,333,171	)

BASIC AND DILUTED LOSS PER SHARE:	$	(0.06	)	$	(3.09	)	$	(0.43	)	$	(3.46	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:		13,346,618			10,726,924			12,520,613			10,726,924

See accompanying notes to the condensed consolidated financial statements.

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

SIX-MONTH PERIOD ENDED JUNE 30, 2025

(Expressed in U.S. dollars)


	Common stock																				Accumulated
	Number		Number		Number									Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			Share to be		paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			issued		capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT MARCH 31, 2025 (Unaudited)		13,632,448		13,346,618		285,830		25,934		(1,372,673	)		—		105,167,292	$	32,729,304		$	26,667,097	$	(20,632,127	)	$	142,584,827
Currency translation adjustment		—		—		—		—		—			—		—		—			—		403,775			403,775
Net loss for three-month period ended JUNE 30, 2025		—		—		—		—		—			—		—		(773,777	)		—		—			(773,777	)
BALANCE AT JUNE 30, 2025(Unaudited)		13,632,448		13,346,618		285,830		25,934		(1,372,673	)		—		105,167,292	$	31,955,527		$	26,667,097	$	(20,228,352	)	$	142,214,825


	Common stock																		Accumulated
	Number		Number		Number							Additional		Retained			Retained		other
	of shares		of shares		of treasury				Treasury			paid-in		earnings			earnings		comprehensive
	issued		outstanding		stock		Amount		stock			capital		unappropriated			appropriated		Income(loss)			Total

BALANCE AT MARCH 31, 2024 (Unaudited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	92,302,124		$	26,667,097	$	(18,447,136	)	$	200,862,297
Currency translation adjustment		—		—		—		—		—			—		—			—		(849,254	)		(849,254	)
Net loss for three-month period ended June 30, 2024		—		—		—		—		—			—		(33,097,918	)		—		—			(33,097,918	)
BALANCE AT JUNE 30, 2024(Unaudited)		11,012,754		10,726,924		285,830		24,623		(1,372,673	)		101,688,262	$	59,204,206		$	26,667,097	$	(19,296,390	)	$	166,915,125

Common stock

Accumulated

Number

Additional

Retained

other

of shares

of treasury

SEC Form 10-Q filed by Gulf Resources Inc. (NV)