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 utr:sqkm

 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM

 (Mark One)

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

 For the fiscal year ended December
31, 2024

 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 Shouguang City,

 Shandong, China

 262700

 (Address of principal executive offices)

 (Zip Code)

 + 86 (536) 567-0008

 Registrant's telephone
number, including area code

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

 Title of each class

 Tradin g Symbol (s)

 Name of each exchan g e on which registered

 Common Stock, $0.0005 par value

 GURE

 NASDAQ Global Select Market

 Securities registered pursuant to section
12(g) of the Act: None.

 Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 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 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 has
filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report.

 If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections
are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive
officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act). Yes No

 As of June 30, 2024, the aggregate
market value of the voting and non-voting common equity held by non-affiliates of the Registrant was approximately $ 8.0 million based
upon a closing sale price of $1.03 on June 28, 2024.

 As of April 10, 2025, the Registrant
had outstanding 11,346,618 shares of common stock, excluding 285,830 shares of common stock of treasury stock.

 DOCUMENTS INCORPORATED BY REFERENCE:
None.

 Item 1.

 Business.

 Item 1A.

 Risk Factors.

 Item 1B.

 Unresolved Staff Comments.

 Item 1C.

 Cybersecurity.

 Item 2.

 Properties.

 Item 3.

 Legal Proceedings.

 Item 4.

 Mine Safety Disclosures.

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item 6.

 [Reserved].

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations.

 Item 7A.

 Quantitative and Qualitative Disclosures about Market Risk.

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 Item 9A.

 Controls and Procedures.

 Item 9B.

 Other Information.

 Item 9C

 Disclosure Regarding Foreign Jurisdiction that Prevent Inspection.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules.

 Item 16.

 Form 10-K Summary.

 SIGNATURES

 i

 Special Note Regarding Forward
Looking Information

 This report contains forward-looking
statements that reflect management's current views and expectations with respect to our business, strategies, future results and
events, and financial performance. All statements made in this report other than statements of historical fact, including statements that
address operating performance, events or developments that management expects or anticipates will or may occur in the future, including
statements related to future reserves, cash flows, revenues, profitability, adequacy of funds from operations, statements expressing general
optimism about future operating results and non-historical information, are forward-looking statements. In particular, the words "believe",
"expect", "intend", "anticipate", "estimate", "plan", "may", "will",
variations of such words and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such
statements and their absence does not mean that the statement is not forward-looking. Readers should not place undue reliance on forward-looking
statements which are based on management's current expectations and projections about future events, are not guarantees of future
performance are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements could differ materially
from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences
include those discussed in this report, particularly under the caption "Risk Factors". Except as required under the federal
securities laws, we do not undertake any obligation to update the forward-looking statements in this report.

 Item 1. Business.

 Introduction

 We manufacture and trade bromine
and crude salt, natural gas, manufacture and sell chemical products used in oil and gas field explorations and papermaking chemical agents,
and materials for human and animal antibiotics. To date, our products have been sold only within the People's Republic of China.
As used in this report, the terms "we," "us," "our," "Company" and "Gulf Resources"
refers to Gulf Resources, Inc., a holding company and/or its consolidated wholly-owned subsidiaries, and the terms "ton" and
"tons" refers to metric tons, in each case, unless otherwise stated or the context requires otherwise.

 The functional currency of the
Company's operating foreign subsidiaries is the Renminbi ("RMB"), which had an average exchange rate of $0.14204 and
$0.14042 during fiscal years 2023 and 2024, respectively, the reporting currency of the Company is the United States dollar ("USD"
or $").

 Our Corporate History and Corporate Structure

 We (Gulf Resources Inc.) were
originally incorporated in Delaware and subsequently re-incorporated in Nevada. From November 1993 through August 2006, we were engaged
in the business of owning, leasing and operating coin and debit card pay-per copy photocopy machines, fax machines, microfilm reader-printers
and accessory equipment under the name "Diversifax, Inc.". Due to the increased use of internet services, demand for our services
declined sharply, and in August 2006, our Board of Directors decided to discontinue our operations.

 Upper Class Group Limited, incorporated
in the British Virgin Islands in July 2006, acquired all the outstanding stock of Shouguang City Haoyuan Chemical Company Limited ("SCHC"),
a company incorporated in Shouguang City, Shandong Province, the People's Republic of China (the "PRC"), in May 2005.
At the time of the acquisition, members of the family of Mr. Ming Yang, our president and former chief executive officer, owned approximately
63.20% of the outstanding shares of Upper Class Group Limited. Since the ownership of Upper Class Group Limited and SCHC was then substantially
the same, the acquisition was accounted for as a transaction between entities under common control, whereby Upper Class Group Limited
recognized the assets and liabilities transferred at their carrying amounts.

 On December 12, 2006, our Company,
then known as Diversifax, Inc., a public "shell" company, acquired Upper Class Group Limited and SCHC. Under the terms of
the agreement, the stockholders of Upper Class Group Limited received 13,250,000 (restated for the 2- for-1 stock split in 2007 and the
1-for-4 stock split in 2009) shares of our voting common stock in exchange for all outstanding shares of Upper Class Group Limited. Members
of the Yang family received approximately 62% of our common stock as a result of the acquisition. Under accounting principles generally
accepted in the United States, the share exchange is considered to be a capital transaction rather than a business combination. That is,
the share exchange is equivalent to the issuance of stock by Upper Class Group Limited for the net assets of Gulf Resources, Inc., accompanied
by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the share exchange is identical
to that resulting from a reverse acquisition, except no goodwill is recorded. Under reverse takeover accounting, the post reverse acquisition
comparative historical consolidated financial statements of the legal acquirer, Diversifax, Inc., are those of the legal acquiree, Upper
Class Group Limited. Share and per share amounts stated have been retroactively adjusted to reflect the share exchange. On February 20,
2007, we changed our corporate name to Gulf Resources, Inc.

 On February 5, 2007, we
acquired Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"), a company incorporated in the People's Republic
of China. Under the terms of the acquisition agreement, the stockholders of SYCI received a total of 8,094,059 (restated for the
2-for-1 stock split in 2007 and the 1-for-4 stock split in 2009) shares of common stock of Gulf Resources, Inc. in exchange for all
outstanding shares of SYCI's common stock. Simultaneously with the completion of the acquisition, a dividend of $2,550,000 was
paid to the former stockholders of SYCI. At the time of the acquisition, approximately 49.1% of the outstanding shares of SYCI were
owned by Ms. Yu, Mr. Yang's wife, and the remaining 50.9% of the outstanding shares of SYCI were owned by SCHC, all of whose
outstanding shares were owned by Mr. Yang and his wife. Since the ownership of Gulf Resources, Inc. and SYCI are substantially the
same, the acquisition was accounted for as a transaction between entities under common control, whereby Gulf Resources, Inc.
recognized the assets and liabilities of SYCI at their carrying amounts. Share and per share amounts have been retroactively
adjusted to reflect the acquisition.

 To satisfy certain ministerial
requirements necessary to confirm certain government approvals required in connection with the acquisition of SCHC by Upper Class Group
Limited, all of the equity interest of SCHC were transferred to a newly formed Hong Kong corporation named Hong Kong Jiaxing Industrial
Limited ("Hong Kong Jiaxing") all of the outstanding shares of which are owned by Upper Class Group Limited. The transfer
of all of the equity interest of SCHC to Hong Kong Jiaxing received approval from the local State Administration of Industry and Commerce
on December 10, 2007.

 As a result of the transactions
described above, our corporate structure is linear. That is Gulf Resources owns 100% of the outstanding shares of Upper Class Group Limited,
which owns 100% of the outstanding shares of Hong Kong Jiaxing, which owns 100% of the outstanding shares of SCHC, which owns 100% of
the outstanding shares of SYCI. Further, as a result of our acquisitions of SCHC and SYCI, our historical consolidated financial statements,
as contained in our Consolidated Financial Statements and Management's Discussion and Analysis, appearing elsewhere in the report,
reflect the accounts of SCHC and SYCI.

 On January 12, 2015, the Company
and SCHC entered into an Equity Interest Transfer Agreement with Shouguang City Rongyuan Chemical Co., Ltd ("SCRC"), pursuant
to which SCHC agreed to acquire SCRC and all rights, title and interest in and to all assets owned by SCRC, a leading manufacturer of
materials for human and animal antibiotics in China and other parts of Asia.

 On February 4, 2015, the Company
closed the transactions contemplated by the agreement between the Company, SCHC and SCRC. On the closing Date, the Company issued 7,268,011
shares of its common stock, par value $0.0005 per share (the "Shares"), at the closing market price of $1.84 per Share on
the closing date to the four former equity owners of SCRC.The issuance of the Shares was exempt from registration pursuant to Regulation
S of the Securities Act of 1933, as amended. On the Closing Date, the Company entered into a lock-up agreement with the four former equity
owners of SCRC. In accordance with the terms of the lock-up agreement, the shareholders agreed not to sell or transfer the Shares for
five years from the date the stock certificates evidencing the Shares were issued.

 The sellers of SCRC agreed as
part of the purchase price to accept the Shares, based on a valuation of $10.00 (restated for the 1-for-5 reverse stock split in January
2020), which was a 73% premium to the price on the day the agreement was reached. For accounting purposes, the Shares were valued at $9.20
(restated for the 1-for-5 reverse stock split in January 2020), which was the closing price of our common stock on the closing date of
the agreement. The price difference between the original sale price of $10.00 (restated for the 1-for-5 reverse stock split in January
2020) and the $9.20 (restated for the 1-for-5 reverse stock split in January 2020) closing price of our stock on the closing date of the
agreement is solely for accounting purposes. There has been no change in the number of shares issued.

 On November 24, 2015, Gulf Resources,
Inc., a Delaware corporation, consummated a merger with and into its wholly-owned subsidiary, Gulf Resources, Inc., a Nevada corporation.
As a result of the reincorporation, the Company is now a Nevada corporation.

 On December 15, 2015, the Company
incorporated a new subsidiary in the Sichuan Province of the PRC named Daying County Haoyuan Chemical Company Limited ("DCHC")
with registered capital of RMB50,000,000, and there was RMB14,848,730 capital contributed by SCHC as of December 31, 2021. DCHC was established
to further explore and develop natural gas and brine resources (including bromine and crude salt) in China.

 On September 2, 2016, the Company
announced the planned merger of two of its 100% owned subsidiaries, SYCI and SCRC. On March 24, 2017, the legal process of the merger
was completed and SCRC was officially deregistered on March 28, 2017. The results of these two subsidiaries were reported under SYCI in
the fiscal year 2018.

 On January 27, 2020, we completed
a 1-for-5 reverse stock split of our common stock, such that for each five shares outstanding prior to the stock split there was one share
outstanding after the reverse stock split. All shares of common stock referenced in this report have been adjusted to reflect the stock
split figures. On January 28, 2020, our shares began trading on the NASDAQ Global Select Market under the new CUSIP # 40251W.

 In April 2022, Shouguang Hengde
Salt Industry Co. Ltd, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading.

 Recent Developments

 Acquisition Agreements

 In June 2024, a wholly owned subsidiary of the Company,
Shouguang Hengde Salt Industry Co. Ltd ( "SHSI") entered into crude salt field acquisition agreements with Shouguang Qingshuibo
Farm Co., LTD. ("Seller A"), Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative ("Seller
B"), Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative ("Seller C"), Shouguang City Yangkou
town Zhengjia Zhuangzi village stock economic cooperative ("Seller D"), and Shouguang city Yangkou town Renjia Zhuangzi village
stock economic cooperative ("Seller E"), respectively, as amended in December 2024. A summary of these agreements are set
forth below:

 On June 26, 2024, SHSI entered into an acquisition
agreement with Seller A, pursuant to which Seller A agrees to transfer to SHSI, and SHSI agrees to purchase, 2,380,000 square meters of
crude salt field (including the land lease fee) for RMB54.40 per square meter, with the total transfer price of RMB129,472,000. The term
of transfer is from June 29, 2024 to June 28, 2044. 80% of the transfer price shall be paid upon the execution of the agreement, and the
remaining 20% shall be paid in shares of common stock of the Company within three months from the date of the agreement after SHSI has
inspected the and accepted the crude salt field in writing. Subsequently, on December
17, 2024, the parties entered into an amendment to the agreement, pursuant to which the Article 2. 2 of the agreement has been amended
as follows: eighty percent (80%) of the total amount, equaling RMB103,577,600 had been paid on the date of signing the contract by both
parties. The remaining RMB25,894,400 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB10,357,800
shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27. These shares shall be issued
by the Company to Seller A or Seller A's designated parties within three months after SHSI has inspected and accepted the crude salt field
in writing; (2) the balance shall be paid in cash before December 31, 2028.

 On June 27, 2024, SHSI entered into an acquisition
agreement with each Seller B, Seller C, Seller D and Seller E, respectively, pursuant to which the sellers agreed to transfer to SHSI,
and SHSI agrees to purchase from the sellers, 750,000, 804,000, 385,000, and 822,000 square meters of crude salt field (including the
land lease fee) for RMB54.10, RMB54.90, RMB54.00, and RMB55.70 per square meter, respectively, with the total transfer price of RMB40,575,000,
RMB44,139,600, RMB20,790,000, and RMB45,785,400, respectively. The term of transfers is from June 29, 2024 to June 28, 2044. 80% of the
transfer price shall be paid upon the execution of the agreements, and the remaining 20% shall be paid in shares of common stock of the
Company within three months from the date of the agreements after SHSI has inspected the and accepted the crude salt fields in writing.

 On
December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller B, pursuant to which the Article 2. 2 of the
agreement has been amended as follows: (80%) of the total amount, equaling RMB32,460,000 had been paid on the date of signing the contract
by both parties. The remaining RMB8,115,000 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB3,246,000
shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27. These shares shall be issued
by the Company to Seller B or Seller B's designated parties within three months after SHSI has inspected and accepted the crude
salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.

 On
December 17, 2024, SHSI entered into an amendment to the acquisition agreement with Seller C, pursuant to which the Article 2. 2 of the
agreement has been amended as follows: Eighty percent (80%) of the total amount, equaling RMB35,311,680 had been paid on the date of signing
the contract by both parties. The remaining RMB8,827,920 shall be paid in a combination of common stock of the Company and cash as follows:
(1) RMB3,531,168 shall be paid in shares, calculated on a per share price of US$1.5 per, using the exchange rate RMB/US$:7.27. These shares
shall be issued by the Company to Seller C or Seller C's designated parties within three months after SHSI has inspected and accepted
the crude salt field in writing; (2) the balance shall be paid in cash before December 31, 2028.

 On December 17, 2024,
SHSI entered into an amendment to the acquisition agreement with Seller D, pursuant to which the Article 2. 2 of the agreement has been
amended as follows: Eighty percent (80%) of the total amount, equaling RMB 16,632,000 had been paid on the date of signing the contract
by both parties. The remaining RMB 4,158,000 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB1,663,200
shall be paid in shares, calculated on a per share price ofUS$1.5, using the exchange rate RMB/US$:7.27. These shares shall be issued
by the Company to Seller D or Seller D's designated parties within three months after SHSI has inspected and accepted the crude salt field
in writing; (2) the balance shall be paid in cash before December 31, 2028.

 On December 17, 2024, SHSI
entered into an amendment to the acquisition agreement with Seller E, pursuant to which the Article 2. 2 of the agreement has been amended
as follows: Eighty percent (80%) of the total amount, equaling RMB36,628,320 had been paid on the date of signing the contract by both
parties. The remaining RMB9,157,080 shall be paid in a combination of common stock of the Company and cash as follows: (1) RMB3,662,832
shall be paid in shares, calculated on a per share price of US$1.5, using the exchange rate RMB/US$:7.27. These shares shall be issued
by the Company to Seller E or Seller E's designated party within three months after SHSI has inspected and accepted the crude salt field
in writing; (2) the balance shall be paid in cash by SHSI to Seller E before December 31, 2028.

 In accordance to each amendment,
the parties also acknowledged and agreed that, in compliance with the Nasdaq Listing Rule 5635, the issuance of shares pursuant to the
agreement may not exceed 19.9% of the total outstanding shares of common stock of the Company prior to the issuance of the shares (the
"19.9% Threshold"), unless such issuance is approved by the shareholders of the Company in accordance with the Nasdaq rules
and regulations. SHSI shall cause the Company to take all necessary steps to obtain such shareholder approval if the issuance of shares
under the agreement exceeds the 19.9% Threshold.

 On December 30, 2024, SHSI
and each of the sellers mutually acknowledged and confirmed that the salt land provided by each seller meets the acquisition criteria,
is in the anticipated usable condition, and has been accepted and handed over to SHSI.

 On February 28, 2025, the
transactions as contemplated by the acquisition agreements were closed. On the closing date, the Company issued a total of 2,059,694 shares
of the Company's common stock at a price of $1.50 per share, to five individuals, who are citizens residing in the People's
Republic of China, designated by each seller.

 Nasdaq Compliance

 The
Company received a notice (the "Initial Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC
("Nasdaq") on April 18, 2024 notifying the Company that due to the Company's failure to timely file its Annual Report
on Form 10-K for the fiscal year ended December 31, 2023 (the "Form 10-K"), with the SEC, the Company was not in compliance
with Nasdaq's continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the "Listing Rule 5250(c)(1) Rule"),
which requires the timely filing of all required periodic reports with the SEC, and the Company subsequently received a notice (the "May
Notice") from Nasdaq on May 21, 2024 due to the Company's non-compliance with the Listing Rule 5250(c)(1) Rule as a result
of the Company's failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (the "First
Quarter Form 10-Q", together with the Form 10-K, the "Delinquent Reports"). The May Notice states that the Company
had until June 17, 2024 to submit to Nasdaq a plan to regain compliance with the Rule.

 On
June 26, 2024, the Company received a letter from Nasdaq indicating that, based on its further review and the plan of compliance submitted
by the Company on June 14, 2024, Nasdaq determined to grant an exception to enable the Company to regain compliance with the Listing Rule
5250(c)(1) Rule. The terms of the exception were as follows: on or before October 14, 2024, the Company must file the Delinquent Reports,
as required by the Listing Rule 5250(c)(1) Rule. In the event the Company does not satisfy the terms, Nasdaq will provide written notification
that its securities will be delisted. At that time, the Company may appeal Nasdaq's determination to a hearings panel.

 Subsequently,
on August 20, 2024, the Company received a notice (the "August Notice") from Nasdaq indicating that, because the Company is
delinquent in filing its quarterly report on Form 10-Q for the period ended June 30, 2024 (the "Second Quarter Form 10-Q"),
the Company was not in compliance with the Rule. The August Notice also indicates that as a result of this additional delinquency, the
Company must submit an update to its original plan to regain compliance with respect to the filing requirements. The Company had until
September 4, 2024 to submit such update to Nasdaq.

 On
October 15, 2024, the Company received written notice from Nasdaq that, as a result of the Company filing the Form 10-K, the First Quarter
Form 10-Q and the Second Quarter Form 10-Q with the SEC, the Staff has determined that the Company complies with the Listing Rule 5250(c)(1)
Rule and considers the matter to be closed.

 On
November 5, 2024, the Company received a notice ("Price Deficiency Letter") from Nasdaq stating that the Company was not in
compliance with Nasdaq Listing Rule 5450(a)(1) because the bid price for the Company's common stock had closed below $1.00 per share
for the previous 34 consecutive business days (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule
5810(c)(3)(A), the Company has been given 180 calendar days, or until May 5, 2025, to regain compliance with the Minimum Bid Price Requirement.
If at any time before May 5, 2025, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of
10 consecutive business days, Nasdaq will provide written confirmation that the Company has achieved compliance. In the event the Company
does not regain compliance, the Company may be eligible for additional time. To qualify for the additional compliance period, the Company
will be required to (i) submit, no later than the expiration date, an on-line Transfer Application, (ii) submit a non-refundable $5,000
application fee, (iii) meet the continued listing requirement for the market value of its publicly held shares and all other continued
listing standards for The Nasdaq Stock Market, with the exception of the bid price requirement, and (iv) will need to provide written
notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. As
part of its review process, Nasdaq will make a determination of whether they believe the Company will be able to cure this deficiency.
Should Nasdaq conclude that the Company will not be able to cure the deficiency, or should the Company determine not to submit a transfer
application or make the required representation, the Staff will provide notice that the Company's securities will be subject to
delisting.

 The
Nasdaq Price Deficiency Letter has no immediate impact on the listing of the Company's common stock, which will continue to be listed
and traded on The Nasdaq Global Select Market, subject to the Company's compliance with the other continued listing requirements
of The Nasdaq Stock Market.

 Corporate Structure

 Our current corporate structure chart
is set forth in the following diagram:

 Currently, we operate our business
through our wholly-owned subsidiaries in China, including (i) Shouguang City Haoyuan Chemical Company Limited, or SCHC; (ii) Shouguang
Yuxin Chemical Industry Co., Limited, or SYCI; (iii) Daying County Haoyuan Chemical Co., Ltd., or DCHC; and (iv) Shouguang Hengde Salt
Industry Co. Limited, or SHSI, each a PRC company.

 Our executive offices are located at
Level 11, Vegetable Building, Industrial Park of the East in Shouguang City, Shandong Province,

 P.R.C. Our telephone number is +86 (536) 5670008. Our
website address is www.gulfresourcesinc.com. The information contained on or accessed through our website is not intended to constitute
and shall not be deemed to constitute part of this Form 10-K.

 Recent Regulatory Developments in
China

 Because all of our operations
are conducted in China through our wholly-owned subsidiaries, the Chinese government may exercise significant oversight and discretion
over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change
in our operations and/or the value of our common stock.

 Recent statements by the Chinese
government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments
in China based issuers. Any future action by the Chinese government expanding the categories of industries and companies whose foreign
securities offerings are subject to government review could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

 Recently, the PRC government initiated
a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance
notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed
overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding
efforts in anti-monopoly enforcement. We do not believe that we are directly subject to these regulatory actions or statements, as we
do not have a variable interest entity structure and our business does not involve the collection of user data, implicate cybersecurity,
or involve any other type of restricted industry. Because these statements and regulatory actions are new, however, it is highly uncertain
how soon legislative or administrative regulation making bodies in China will respond to them, or what existing or new laws or regulations
will be modified or promulgated, if any, or the potential impact such modified or new laws and regulations will have on our daily business
operations or our ability to accept foreign investments and list on an U.S. exchange.

 On February 17, 2023, the China
Securities Regulatory Commission ('CSRC") released the Trial Measures for Administration of Overseas Securities Offerings
and Listings by Domestic Companies (the "Trial Measures") and five supporting guidelines, which came into effect on March
31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly,
should fulfill the filing procedures and report relevant information to the CSRC. If a domestic company fails to complete the filing procedures
or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties by the CSRC, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly
in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. As a listed company,
we believe that we, and all of our PRC subsidiaries are not required to fulfill filing procedures and obtain approvals from the CSRC to
continue to offer our securities or operate our business as of the date of this annual report. In addition, to date, none of us and our
PRC subsidiaries has received any filing or compliance requirements from CSRC for the listing of the Company at Nasdaq and all of its
overseas offerings. Furthermore, based on our understanding of the current PRC laws, we believe that the CSRC's approval is not
required to be obtained for the Company's listing on Nasdaq; however, there are substantial uncertainties regarding the interpretation
and application of the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors ("M&A Rules"),
other PRC Laws and future PRC laws and regulations, and there can be no assurance that any governmental agency will not take a view that
is contrary to or otherwise different from our belief stated herein.

 On February 24, 2023, the CSRC,
the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration jointly issued
the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies,
or the Confidentiality and Archives Provisions, which took effective from March 31, 2023. The Confidentiality and Archives Provisions
specify that during the overseas securities offering and listing activities of domestic companies, domestic companies and securities companies
and securities service institutions that provide relevant securities business shall, by strictly abiding by the relevant laws and regulations
of the PRC and this Confidentiality and Archives Provisions, institute a sound confidentiality and archives administration systems, take
necessary measures to fulfill confidentiality and archives administration obligations, and shall not divulge any national secrets, work
secrets of governmental agencies and harm national and public interests. Confidentiality and Archives Provisions provides that it is applicable
to initial public offerings as well as other types of securities listing of PRC domestic enterprises, and any future issuance of securities
and listing activities after the initial listing. Working papers generated in the PRC by securities companies and securities service providers
that provide relevant securities services for overseas issuance and listing of securities by domestic companies shall be kept in the PRC.
Confidentiality and Archives Provisions provide no explicit definition of working papers. In practice, the securities companies'
working papers usually refer to various important information and work records related to the securities business obtained and prepared
by the securities companies and securities service providers and their representatives in the whole process of the securities businesses,
such as due diligence work. Without the approval of relevant competent authorities, such as CSRC, MOF PRC National Administration of State
Secrets Protection, and National Archives Administration of China, depending on the nature and transmission method of secrets, it shall
not be transferred overseas. Where documents or materials need to be transferred outside of the PRC, it shall be subject to the approval
procedures in accordance with relevant PRC regulations. The relevant competent authorities, such as, CSRC, MOF, PRC National Administration
of State Secrets Protection, and National Archives Administration of China will regulate, supervise and inspect pursuant to their respective
statutory mandates over matters of Confidentiality and Archives Administration concerning overseas offering and listing by domestic companies.
As Confidentiality and Archives Administration is newly promulgated, there is substantial uncertainty regarding their specific requirements.
If we fail to comply with related laws and regulation, we may be subject to fine, confiscation, blocking transmission or criminal offense.
We have taken measures to adopt management systems for the compliance of Confidentiality and Archives Provisions. We believe our listing
does not involve in national secrets, work secrets of governmental agencies and undermine national and public interests. There is no assurance
that we will be able to meet all applicable regulatory requirements and guidelines, or comply with all applicable regulations at all times,
or that we will not be subject to fines or other penalties in the future as a result of regulatory inspections.

 Cash Transfers and Dividend Distribution

 Our corporate structure is a direct
holding structure, that is, the overseas entity listed in the U.S., Gulf Resources, Inc., a Nevada corporation ("Gulf Resources"),
controls SCHC (the "WFOE"), SYCI and DCHC through the Hong Kong company, Hong Hong Jiaxing Industrial Limited, or Hong Kong
Jiaxing.

 Within our direct holding structure,
the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC. Foreign
investors' funds can be directly transferred to Hong Kong Jiaxing, and then transferred to subordinate operating entities through
SCHC, or the WFOE.

 If the Company intends to distribute
dividends, the Company will transfer the dividends to Hong Kong Jiaxing in accordance with the laws and regulations of the PRC, and then
Hong Kong Jiaxing will transfer the dividends to Gulf Resources, and the dividends will be distributed from Gulf Resources to all shareholders
respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries
or regions.

 In the reporting periods presented in this annual report,
no cash and other asset transfers have occurred among the Company and its subsidiaries; and no dividends or distributions of a subsidiary
has been made to the Company or to the shareholders from the Company. For the foreseeable future, the Company does not expect to pay any
cash dividends.

 Our PRC subsidiaries' ability
to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends
to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards
and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if
any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable
as cash dividends.

 To address persistent capital
outflows and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and
the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months,
including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments
and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends
and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion
of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing
the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore,
if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to
pay dividends or make other payments.

 In addition, the Enterprise Income
Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese
companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments
of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant to the tax agreement between Mainland
China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise
to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant tax authorities determine that our
transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust
the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends
received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive
from our PRC subsidiaries.

 Please see "Risk Factors"
beginning on page 20 of this annual report for additional information.

 Holding Foreign Company Accountable
Act

 Our common stock may be delisted from the Nasdaq under
the Holding Foreign Companies Accountable Act ("HFCAA"), if the PCAOB is unable to adequately inspect audit documentation
located in China, or investigate our auditor. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act, which was signed into law, and amends the HFCAA and requires the SEC to prohibit an issuer's securities from trading
on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. Our auditor,
GGF CPA LTD., Certified Public Accountants, is a China-based accounting firm registered with the PCAOB, and is subject to laws in the
United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our auditor is headquartered in the China and is subject to inspection by the PCAOB on a regular basis. On August 26, 2022, the PCAOB
signed the Protocol with the CSRC and the MOF of the People's Republic of China, governing inspections and investigations of audit
firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation.
Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any
issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. On December 15, 2022, the
PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB registered public accounting firms headquartered
in China mainland and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable
to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong. However, whether
the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in
China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's control.
The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and was already making plans to resume
regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as
needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.
Therefore, the PCAOB in the future may determine that it is unable to inspect or investigate completely registered public accounting firms
in mainland China and Hong Kong. Our auditor's working papers related to us and our subsidiaries are located in China. If our auditor
is not permitted to provide requested audit work papers located in China to the PCAOB, investors would be deprived of the benefits of
PCAOB's oversight of our auditor through such inspections which could result in limitation or restriction to our access to the U.S.
capital markets and trading of our securities may be prohibited under the HFCAA, which would result in the delisting of our securities
from the Nasdaq. See " Risk Factors - Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable
Act if the PCAOB is unable to adequately inspect audit documentation located in China. The delisting of our common stock, or the threat
of their being delisted, may materially and adversely affect the value of your investment."

 Closure and rectification process
of our Bromine, Crude Salt and Chem i cal Products factories

 On September 1, 2017, the Company
received letters from the People's Government of Yangkou Town, Shouguang City to each of its subsidiaries, Shouguang City Haoyuan
Chemical Company Limited and Shouguang Yuxin Chemical Industry Co., Limited, which stated that in an effort to improve the safety and
environmental protection management level of chemical enterprises, the plants are requested to immediately stop production and perform
rectification and improvements in accordance with the country's new safety, environmental protection requirements. As a result,
our facilities located in Yangkou Town were closed on September 1, 2017 to allow for rectification.

 Subsequently, the Safety Supervision
and Administration Department and the Environmental Protection Departments of the local government conducted inspections of every bromine
production enterprise within its jurisdiction including our facilities, in order to improve security, environmental protections, pollution,
and safety.

 On September 21, 2018, the Company
received a closing notice from the People's Government of Yangkou Town, Shouguang City informing it to close its three bromine factories
(Number 3, Number 4, and Number 11.) and not allowed to resume production. The crude salt fields surrounding these factories have been
reclaimed as cultivated or construction land and hence did not meet the requirement for bromine and crude salt co-production set by the
relevant authority. In closing these factories, the Company wrote off net book value of these factories' property, plant and equipment
in the amount of $18,644,473 in the loss on demolition of the factory in the consolidated statements of loss for the fiscal year ended
December 31, 2018, recorded an impairment loss on the related mineral rights of these three factories of $1,284,832 included in the impairment
of property, plant and equipment in the consolidated statements of loss for the fiscal year ended December 31, 2018 and wrote off $52,926
of prepaid land lease recorded in other operating loss in the consolidated statements of loss for fiscal year ended December 31, 2018.
The Company incurred dismantling fee in the amount of

 $273,757 recorded in other operating
loss in the consolidated statements of loss for fiscal year ended December 31, 2018. The Company negotiated with the local villages over
compensation for the payment already made for these land leases and mineral rights in the past. This part of the cost has been used as
the resumption of land use, so the village committee will not be compensated.

 In February 2019, the Company
received a notification from the local government of Yangkou County that its Factory No. 1, No. 4, No. 7 and No. 9 passed inspection and
could resume operations. In April 2019, Factory No.1 and Factory No.7 resumed operation.

 On November 25, 2019, the government
of Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the Company's bromine facilities,
including Factory No. 1 and Factory No. 7, to temporarily stop production from December 16, 2019 to February 10, 2020. Subsequently, due
to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement of production.
Subsequently, the Company received an approval dated February 27, 2020 issued by the local governmental authority allowing the Company
to resume production after the winter temporary closure. Further, the Company received another approval from the Shouguang Yangkou People's
Government dated March 5, 2020 allowing the Company to resume production at its bromine factories No. 1, No. 4, No.7 and No. 9 in order
to meet the needs of bromide products for epidemic prevention and control (the "March 2020 Approval"). The Company's
Factories No. 1 and No. 7 commenced trial production in mid-March 2020 and commercial production on April 3, 2020 and its Factories No.
4 and No. 9 commenced commercial production on May 6, 2020. The Company received verbal notification from the government regarding Factory
No. 8, allowing it to recommence production in August 2022. Factory No. 8 began contributing revenue in the fourth quarter 2022.

 Pursuant to a notification from
the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February
12, 2025. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed
operations at the bromine and crude salt factories as scheduled in February 2025.

 Because many smaller producers
have not had the capital to conduct the rectification required by the government, management believes there could be some extremely attractive
acquisition opportunities in bromine. However, at the present time, all of management's attention is focused on getting its facilities
approved and in full production. Management may consider acquisition opportunities in this segment in the future if the prices were sufficiently
attractive.

 We secured the land for our upcoming
chemical factory and obtained the final approval regarding environmental protection assessment. Construction of the new chemical facilities
located at Bohai Marine Fine Chemical Industrial Park, commenced in June 2020. Initially, the construction was projected to last around
one year, with an additional six months for equipment installation and testing, However, due to the COVID epidemic and electrical restrictions,
the opening of the chemical factory has been postponed. The Company has received the refrigeration and air compressor units. The estimated
total cost for the relocation process is approximately $69 million. As of December 31, 2024 and 2023, the Company incurred relocation
costs in the amount of $45,584,344 and $45,584,344, respectively. Additionally, the procurement of the final equipment for our chemical
factory has been postponed until we have a better understanding of the potential for derivative bromine products. We anticipate proceeding
with the completion of its chemical factory in due course. However, in the event that the Chinese economy persists in its weakness and
if we perceives this trend to be ongoing, there is a possibility that the chemical factory could be repurposed for the production of Sodium-Ion
batteries.

 In January 2017, the Company completed
the construction of the first brine water and natural gas well field in Daying County, Sichuan Province, and commenced trial production
in January 2019. On May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province,
mandating the need for project approval for its Daying well, encompassing the entire natural gas and brine water project. This also includes
approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until these approvals
are obtained, the Company must temporarily suspend trial production at its natural gas well in Daying. Additionally, in compliance with
the Chinese government new policies, the Company is required to obtain an exploration license for bromine and a mining license for natural
gas. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management
(Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned
enterprises are allowed to participate in the natural gas production. The Company is engaged in ongoing discussions with the government
of Daying County regarding the establishment of a joint venture for the exploration and production of natural gas and brine products in
Sichuan.

 We are not writing off any of
the goodwill related to our chemicals business. We believe the upcoming chemical factory could produce sales and profits. We believe there
may be much less capacity in the chemical industry, as many factories may be permanently closed. In addition, other competitor factories
may reduce their production capacity. We expect to have a factory that operates efficiently. Considering the above factors and our strength
with better equipment, we expect to generate sales and earnings in this segment at a level well above previous periods.

 We will continue to control the
land and buildings where the old chemical factories are located. At this time, we have not considered how or if we can monetize those
assets.

 In April 2022, our subsidiary,
Shouguang Hengde Salt Industry Co. Ltd, was incorporated in Shandong Province, China, specifically for crude salt production and trading.
This subsidiary was established in response to a new government policy mandating separate registrations for bromine and crude salt companies.

 As of the date of this annual report,
the Company is awaiting governmental approval for Factories No. 2 and No. 10.

 Our Business Segments

 Our business operations are conducted in four segments,
bromine, crude salt, chemical products, and natural gas. We manufacture and trade bromine, crude salt and natural gas, and manufacture
and sell chemical products used in oil and gas field explorations and papermaking chemical agents, and materials for human and animal
antibiotics. We conduct all of our operations in China.

 Bromine and Crude Salt

 We manufacture and distribute
bromine through our wholly-owned subsidiary, Shouguang City Haoyuan Chemical Company Limited, or SCHC. Bromine is a halogen element. It
is a red volatile liquid at standard room temperature which has reactivity between chlorine and iodine. Elemental bromine is used to manufacture
a wide variety of bromine compounds used in industry and agriculture. Bromine is also used to form intermediates in organic synthesis,
which is somewhat preferable over iodine due to its lower cost. Bromine is commonly used in brominated flame retardants, fumigants, water
purification compounds, dyes, medicines and disinfectants.

 The extraction of bromine in the
Shandong Province is limited by the provincial government to licensed operations. We hold one such license. As part of our business strategy,
it is our plan to continue acquiring smaller scaled and unlicensed producers and to use our bromine to expand our downstream chemical
operations.

 Location of Production Sites

 Our production sites are located
in the Shandong Province in northeastern China. The productive formation (otherwise referred to as the "working region"),
extends from latitude N 36 56' to N 37 20' and from longitude E 118 38' to E 119 14', in the north
region of Shouguang city, from the Xiaoqing River of Shouguang city to the west of the Dan River, bordering on Hanting District in the
east, from the main channel of "Leading the Yellow River to Supply Qingdao City Project" in the south to the coastline in
the north. The territory is classified as coastal alluvial – marine plain with an average height two to seven meters above the sea
level. The terrain is relatively flat.

 Geological background of this region

 The Shandong Province working
region is located to the east of Lubei Plain and on the south bank of Bohai Laizhou Bay. The geotectonic location bestrides on the North
China Platte (I) and north three-level structure units, from west to east including individually the North China Depression, Luxi Plate,
and Jiaobei Plate. Meanwhile, 4 V-level structure units including the Dongying Sag of Dongying Depression (IV) of North China Depression,
the Buried Lifting Area of Guangrao, Niutou sag and Buried Lifting Area of Shuanghe and are all on two V-level structure units including
Xiaying Buried Lifting Area of Weifang Depression (IV) of Luxi Plate and Chuangyi Sag, as well as on a V-level structure units of Jiaobei
Buried Lifting Area of Jiaobei Plate.

 Processing of Bromine

 Natural brine is a complicated
salt-water system, containing many ionic compositions in which different ions have close interdependent relationships and which can be
reunited to form many dissolved soluble salts such as sodium chloride, potassium chloride, calcium sulfate, potassium sulfate and other
similar soluble salts. The goal of natural brine processing is to separate and precipitate the soluble salts or ions away from the water.
Due to the differences in the physical and chemical characteristics of brine samples, the processing methods are varied, and can result
in inconsistency of processing and varied technical performance for the different useful components from the natural brine.

 Bromine is the first component
extracted during the processing of natural brine. In natural brine, the bromine exists in the form of bromine sodium and bromine magnesium
and other soluble salts.

 The bromine production process is as follows:

 1.
 natural brine is pumped from underground through extraction wells by subaqueous pumps;

 2.
 the natural brine then passes through transmission pipelines to storage reservoirs;

 3.
 the natural brine is sent to the bromine refining plant where bromine is extracted
from the natural brine. In neutral or acidic water, the bromine ion is easily oxidized by adding the oxidative of chlorine, which generates
the single bromine away from the brine. Thereafter the extracted single bromine is blown out by forced air, then absorbed by sulfur dioxide
or soda by adding acid, chlorine and sulfur. Extracted bromine is stored in containers of different sizes; and

 4.
 the wastewater from this refining process is then transported by pipeline to brine pans.

 Our production feeds include (i) natural brine; (ii) vitriol;
(iii) chlorine; (iv) sulfur; and (v) coal.

 We also produce crude salt, which
is produced from the evaporation of the wastewater after our bromine production process. Once the brine is returned to the surface and
the bromine is removed, the remaining brine is pumped to on-site containing pools and then exposed to natural sunshine. This causes the
water to evaporate from the brine, resulting in salt being left over afterwards. Crude salt is the principal material in alkali production
as well as chlorine alkali production and is widely used in the chemical, food and beverage, and other industries.

 We produce chemical products through
our wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Company Limited, or SYCI. At the present time, SYCI is closed pursuant
to the letter from government dated on November 24, 2017. It is being relocated to Bohai Marine Fine Chemical Industry Park, Shouguang
City. SYCI paid $8,846,282 for a 50-year lease of a piece of land for its new factories at Bohai Marine Fine Chemical Industrial Park
in December 2017 and leased another piece of land from the third party for its new chemical factory. We received the final approval for
our new chemical factory and started construction in June 2020.

 Historically, SYCI concentrated
its efforts on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution,
oil field drilling, papermaking chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics. SYCI
engaged in depth study of existing products and new product research and development at the same time. SYCI's annual production
of oil and gas field exploration products and related chemicals was over 26,000 tons, and its production of papermaking-related chemical
products was over 5,000 tons. SYCI's annual production capacity of materials that are used for human and animal antibiotics was
over 6,800 tons.

 Sales and Marketing

 We have an in-house sales staff
of 7 persons. Our customers send their orders to us first. Our in-house sales staff then attempts to satisfy these orders based on our
actual production schedules and inventories on hand. Many of our customers have a long term relationship with us. We expect this to continue
due to stable demand for mineral products, however, these relationships cannot be guaranteed in the future.

 Principal Customers

 We sell a substantial portion
of our products to a limited number of PRC customers. Our principal customers during 2024 were Shandong Morui Chemical Company Limited,
Shandong Brother Technology Limited, and Shouguang Weidong Chemical Company Limited. We have ongoing policies in place to ensure that
sales are made to customers who are credit-worthy.

31, 2024, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $1,969,624 or
approximately 35% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 12%,
respectively, of total net revenue from the sale of bromine.

31, 2023, sales to our three largest bromine customers, based on net revenue from such customers, aggregated $10,866,228 or approximately
40% of total net revenue from sale of bromine; and sales to our largest customer represented approximately 14%, respectively, of total
net revenue from the sale of bromine.

 During each of the years ended
December 31, 2024 and 2023, sales to our three largest crude salt customers, based on net revenue from such customers, aggregated $2,049,988
and $2,971,467, respectively, or approximately 100% and 100% of total net revenue from sale of crude salt; and sales to our largest customer
represented approximately 38% and 38%, respectively, of total net revenue from the sale of crude salt.

 During each of the years ended December 31, 2024 and
2023, the net revenue for the chemical products was $0.

 During each of the years ended December
31, 2024 and 2023, the net revenue for the natural gas was $61,207 and $150,861.

 Principal Suppliers

 Our principal external suppliers
are Laizhou Shengfu Chemical Company Limited, Weifang Wanhong Chemical Company Limited, Shandong Xinlong International Trade Company Limited,
Shouguang Runfeng trading Company Limited.

31, 2024 and 2023, we purchased 100% of raw materials for our bromine and crude production from our top four suppliers.

31, 2024 and 2023, we did not purchase any raw materials for chemical products production. This supplier concentration makes us vulnerable
to a near-term adverse impact, should the relationships be terminated.

 Business Strategy

 Expansion of Production Capacity to Meet Demand

 Bromine and Crude Salt

 In view of keen competition and
the trend of less bromine contraction of brine water being extracted in Shouguang City, Shandong Province, the Company intended to access
more bromine and crude salt resources by finding new underground brine water resources in the Sichuan Province. On January 30, 2015 we
announced that we had found natural gas resources under our bromine well in Sichuan Province. On November 23, 2015, the Company's
subsidiary SCHC entered into an agreement with the People's Government of Daying County in Sichuan Province for the exploration
and development of natural gas and brine resources (including bromine and crude salt). In January 2017, the Company completed the construction
of the first brine water and natural gas well field in Sichuan Province. Subsequently, the Company found some issues related to the water
and other potential impurities in the natural gas during trial production. In resolving the problem, the Company purchased customized
equipment for its natural gas project. The installation of such equipment, including providing piping and electricity, was completed in
July 2018. The Company completed the test production at its first natural gas well in Sichuan Province and commenced trial production
in January 2019.

 On May 29, 2019, the Company received
verbal notice from the government of Tianbao Town, Daying County, Sichuan Province, mandating the need for project approval for its Daying
well, encompassing the entire natural gas and brine water project. This also includes approvals for safety production inspection, environmental
protection assessment, and to solve the related land issue. Until these approvals are obtained, the Company must temporarily suspend trial
production at its natural gas well in Daying. Additionally, in compliance with the Chinese government new policies, the Company is required
to obtain an exploration license for bromine and a mining license for natural gas. Pursuant to the Opinions of the Ministry of Natural
Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources
of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned enterprises are allowed to participate in the natural
gas production. The Company is engaged in ongoing discussions with the government of Daying County regarding the establishment of a joint
venture for the exploration and production of natural gas and brine products in Sichuan.

 On September 1, 2017, the Company
received notification from the Government of Yangkou Town, Shouguang City of PRC that production at all its factories must be halted immediately.
This was required for the Company to perform rectification and improvement in compliance with the local new safety and environmental protection
requirements.

 The Company has worked closely
with the county authorities to develop rectification plans for its bromine and crude salt businesses, reaching an agreement on a plan
in October 2017. During the fiscal year ended December 31, 2018, the Company incurred $16,243,677 in the rectification and improvements
of plant and equipment of the bromine and crude salt factories resulting in a cumulative amount of $34,182,329 incurred as of December
31, 2018. The Shouguang City Bromine Association, on behalf of all the bromine producers in Shouguang, initiated negotiations with the
local government agencies. The local governmental agencies acknowledged the facts that their initial requirements for the bromine industry
did not include the project, the planning and land use rights approvals, which were later introduced by the provincial government as new
requirements. The Company understood from the local government that local government were coordinating with various government agencies
to solve these three outstanding approval issues in a timely manner and that all impacted bromine plants are not allowed to commence production
prior to obtaining those approvals. In April 2019, Factory No.1, Factory No.5 and Factory No.7 (Factory no. 5 is considered part of Factory
no.7 and both are managed as one factory since 2010) resumed operations upon receipt of verbal notification from local government of Yangkou
County. Then, on May 7, 2019, the Company renamed its Subdivision Factory No. 1 to Factory No. 4; and Factory No. 5 (previously integrated
with Factory No. 7) as the new Factory No. 7.

 On November
25, 2019, the government of Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the Company's
all bromine facilities, including Factory No.1 and Factory No. 7, to temporarily stop production from December 16, 2019 to February 10,
2020. Subsequently, due to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement
of production. Subsequently, the Company received an approval dated on February 27, 2020 issued by the local governmental authority which
allows us to resume production after the winter temporary closure. Further, the Company received another approval from the Shouguang Yangkou
People's Government dated on March 5, 2020 to resume production at its bromine factories No.1, No. 4, No.7 and No. 9 in order to
meet the needs of bromide products for epidemic prevention and control (the "March 2020 Approval"). The Company's factories
No.7 and No.1 started trial production in middle March, 2020, and commenced commercial production on April 3, 2020.

 The Company received oral notification
from the government regarding Factory No. 8, allowing it to resume production in August 2022. Factory No.8 began contributing revenue
in the fourth quarter 2022.

 The Company is awaiting governmental
approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention
measures. As a result, we may be required to make certain modifications to our existing wells and aqueducts prior to commencement of operations
of these factories in order to satisfy the local government's requirements. The Company completed its flood prevention project in December
2023. This project was implemented for safeguarding its bromine facilities.

 Pursuant to the notification from
the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February
12, 2025. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed
preparation operations at the bromine and crude salt factories as scheduled in February 2025.

 On November 24, 2017, the Company
received a letter from the Government of Yangkou County, Shouguang City notifying the Company to relocate its two chemical production
plants located in the second living area of the Qinghe Oil Extraction Plant to the Bohai Marine Fine Chemical Industrial Park (the "November
2017 Letter"). Since then, our chemical factory has been shut down. We believe this is part of the country's efforts to improve
the development of the chemical industry, facilitate safe production and curb environmental pollution, and ensure the quality of living
environment of residents. The Company expects to cost approximately $69 million in total in connection with the relocation. The Company
incurred relocation costs in the amount of $45,584,344 as of December 31, 2024.

 In January 2020, the Company received
the environmental protection approval by the government of Shouguang City, Shandong Province for the planned Yuxin Chemical factory. Construction
of the new chemical facilities at Bohai Marine Fine Chemical Industrial Park commenced in June 2020, with the bulk of the civil engineering
works completed by the end of June 2021. However, due to the supply chain issues as well as the electric restrictions in China, the delivery
of some equipment, along with the equipment installation and testing and beginning trial production at the chemical factory, was delayed.
On February 22, 2022, the Company announced that discussions with the government had led to an easing of electricity restrictions. As
a result, the Company re-engaged with its suppliers to proceed with the production and delivery of the remainder of the equipment, aiming
to finish installation and begin testing and trial production. At this stage, the Company also began preparation work for its application
for safety and environmental assessment. Additionally, the procurement of the final equipment for our chemical factory has been postponed
until we have a better understanding of the potential for derivative bromine products. We anticipate proceeding with the completion of
its chemical factory in due course. However, in the event that the Chinese economy persists in its weakness and if we perceives this trend
to be ongoing, there is a possibility that the chemical factory could be repurposed for the production of Sodium-Ion batteries.

 Competition

 To date, our sales have been limited
to customers within the PRC and we expect that our sales will remain primarily domestic for the immediate future. Our marketing strategy
involves developing long term ongoing working relationships with customers based on large multi-year agreements which foster mutually
advantageous relationships.

 We compete with PRC domestic private
companies and state owned companies. Certain state owned and state backed competitors are more established and have more control of certain
resources in terms of pricing than we do. We compete based on price, our reputation for quality, on-time delivery, our relationship with
suppliers and our geographical proximity to natural brine deposits in the PRC for bromine, crude salt and chemical productions. Management
believes that our stable quality, manufacturing processes and plant capacity for the production of bromine, crude salt and chemical products
are key considerations in awarding contracts in the PRC.

 Our principal competitors in the
bromine business are Shandong Yuyuan Group Company Limited, Shandong Haihua Group Company Limited, Shandong Dadi Salt Chemical Group Company
Limited and Shandong Haiwang Chemical Company Limited, all of which produce bromine principally for use in their chemicals businesses
and sell part of the bromine produced to customers. These companies may switch to selling bromine to the market if they no longer use
bromine in their chemical businesses.

 Our principal competitors in the
crude salt business are Shandong Haiwang Chemical Company Limited, Shandong Haihua Group Company Limited, Shandong Weifang Longwei Industrial
Company Limited, Shandong Yuyuan Group Company Limited and Shandong Caiyangzi Saltworks.

 Our principal competitors in the
chemical business are Beijing Shiji Zhongxing Energy Technology Co., Ltd, Yanan Chaozheng Nijiang Co., Ltd, Shandong Dacheng Pesticides
Company Limited, Binhua Group Company Limited, Dongying City Dongchen (Group) Chemical Industry Company Limited, Beijing Peikangjiaye
Technologies Limited, Shouguang Fukang Pharmaceutical Co., Ltd. Shandong Xinhua Pharmaceutical Limited by Share Ltd, Hunan Erkang Pharmaceutical
Limited by Share Ltd and Xinan Synthetic Pharmaceutical Limited by Share Ltd.

 Government Regulation

 China has been reinforcing the
environmental requirements for the entire chemical industry, demanding the closure or rectification of those factories that do not meet
the emission requirements and are highly polluting. In early 2017, the government announced the closure or relocation of those chemical
industry facilities that are close to residential areas and the new environmental law officially came into full effect in January 2018.

 The following is a summary of
the principal governmental laws and regulations that are or may be applicable to our operations in the PRC. The scope and enforcement
of many of the laws and regulations described below are uncertain. We cannot predict the effect of further developments in the Chinese
legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement of laws.

 In the natural resources sector,
the PRC and the various provinces have enacted a series of laws and regulations over the past 20 years, including laws and regulations
designed to improve safety and decrease environmental degradation. The "China Mineral Resources Law" declares state ownership
of all mineral resources in the PRC. However, mineral exploration rights can be purchased, sold and transferred to foreign owned companies.
Mineral resource rights are granted by the Central Government permitting recipients to conduct mineral resource activities in a specific
area during the license period. These rights entitle the licensee to undertake mineral resource activities and infrastructure and ancillary
work, in compliance with applicable laws and regulations, within the specific area covered by the license during the license period. The
licensee is required to submit a proposal and feasibility studies to the relevant authority and to pay the Central Government a natural
resources tax in an amount equal to a percent of annual crude salt sales and tones of bromine sold. Shandong Province has determined that
bromine is to be extracted only by licensed entities and we hold one of such licenses. Despite the Province desire to limit extraction
to licensed entities hundreds of smaller operations have continued to extract bromine without licenses.

 The Ministry of Land and Resources
("MLR") is the principal regulator of mineral rights in China. The Ministry has authority to grant licenses for land-use and
exploration rights, issue permits for mineral rights and leases, oversee the fees charged for them and their transfer, and review reserve
evaluations. We are required to hold a bromine and salt production license in order to operate our bromine and salt production business
in the PRC. Our bromine and salt production license is subject to a yearly audit. If we do not successfully pass the yearly approval by
relevant government authorities, our bromine and salt production operations may be suspended until we are able to comply with the license
requirements which could have a material adverse effect on our business, financial condition and results of operations.

 Human Capital Resources

 Employee Profiles

 As of December 31, 2024, we employed
approximately 367 full-time employees, of whom approximately 77% are with SCHC SHSI
and DCHC, and 23% are with SYCI. Approximately 28% of our employees are management personnel and 4% are sales and procurement staff. None
of our employees are represented by a union.

 Total Rewards

 Our compensation program is designed
to attract and reward talented individuals who possess the skills necessary to support our business objectives, assist in the achievement
of our strategic goals and create long-term value for our stockholders. Our employees in China participate in a state pension arrangement
organized by Chinese municipal and provincial governments. We are required to contribute to the arrangement at the rate of 16% of the
average monthly salary. In addition, we are required by Chinese law to cover employees in China with other types of social insurance.
We have purchased social insurance for almost all of our employees. Expense related to social insurance was approximately $535,475 for
fiscal year 2024.

 Health and Safety

 The success of our business is
fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees.
We provide our employees and their families with access to a variety of flexible and convenient health and welfare programs, including
benefits that support their physical and mental health by providing tools and resources to help them improve or maintain their health
status; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.
In response to the COVID-19 pandemic, we implemented significant operating environment changes that we determined were in the best interest
of our employees, as well as the communities in which we operate, and which comply with government regulations. This includes having the
vast majority of our employees work from home, while implementing additional safety measures for employees continuing critical on-site
work.

 Talent

 A core tenet of our talent system
is to both develop talent from within and supplement with external hires. This approach has yielded loyalty and commitment in our employee
base which in turn grows our business, our products, and our customers, while adding new employees and external ideas supports a continuous
improvement mindset and our goals of a diverse and inclusive workforce. Our talent acquisition team uses internal and external resources
to recruit highly skilled and talented workers in the PRC, and we encourage employee referrals for open positions.

 Available Information

 We make available free of charge
on or through our internet website, www.gulfresourcesinc.com, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, including exhibits, and all amendments to those reports, if any, filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after they are electronically filed with, or furnished
to, the Securities and Exchange Commission. The SEC maintains an Internet site that contains reports, proxy and information statements,
and other information regarding issuers like our Company that file electronically with the SEC at  The information
contained on our website is not intended to be incorporated into this Annual Report on Form 10-K.

 Item 1A. Risk Factors.

 Pursuant to Item 301(c) of Regulation
S-K (§ 229.301(c)), the Company is not required to provide the information required by this Item as it is a "smaller reporting
company," as defined by Rule 229.10(f)(1).

 We
are currently not in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq's
listing requirements, our securities could be delisted, which could affect our common stock's market price and liquidity and reduce
our ability to raise capital.

 On
November 5, 2024, the Company received a notice in the form of a letter ("Price Deficiency Letter") from Nasdaq stating that
the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1) because the bid price for the Company's common stock had closed
below $1.00 per share for the previous 34 consecutive business days (the "Minimum Bid Price Requirement"). In accordance with
Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until May 5, 2025, to regain compliance with the Minimum
Bid Price Requirement. If at any time before May 5, 2025, the bid price of the Company's common stock closes at $1.00 per share
or more for a minimum of 10 consecutive business days, the Staff Nasdaq will provide written confirmation that the Company has achieved
compliance. In the event the Company does not regain compliance, the Company may be eligible for additional time. To qualify for the additional
compliance period, the Company will be required to (i) submit, no later than the expiration date, an on-line Transfer Application, (ii)
submit a non-refundable $5,000 application fee, (iii) meet the continued listing requirement for the market value of its publicly held
shares and all other continued listing standards for The Nasdaq Stock Market, with the exception of the bid price requirement, and (iv)
will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse
stock split if necessary. As part of its review process, the Nasdaq will make a determination of whether they believe the Company will
be able to cure this deficiency. Should the Nasdaq conclude that the Company will not be able to cure the deficiency, or should the Company
determine not to submit a transfer application or make the required representation, the Staff will provide notice that the Company's
securities will be subject to delisting.

 The
Nasdaq Price Deficiency Letter has no immediate impact on the listing of the Company's common stock, which will continue to be listed
and traded on The Nasdaq Global Select Market, subject to the Company's compliance with the other continued listing requirements
of The Nasdaq Stock Market.

 We
cannot assure you that we will be able to regain compliance with Nasdaq listing standards. Our failure to continue to meet these requirements
would result in our common stock being delisted from Nasdaq We and holders of our securities could be materially adversely impacted if
our securities are delisted from Nasdaq. In particular:

 we may be unable to raise equity capital on acceptable terms or at all;

 we may lose the confidence of our customers, which would jeopardize our ability to continue our business
as currently conducted;

 the price of our common stock will likely decrease as a result of the loss of market efficiencies associated
with Nasdaq and the loss of federal preemption of state securities laws;

 holders may be unable to sell or purchase our securities when they wish to do so;

 we may become subject to stockholder litigation;

 we may lose the interest of institutional investors in our common stock;

 we may lose media and analyst coverage;

 our common stock could be considered a "penny stock," which would likely limit the level
of trading activity in the secondary market for our common stock; and

 we would likely lose any active trading market for our common stock, as it may only be traded on one
of the over-the-counter markets, if at all.

 As a China-based issuer, the Company provides the following
material risk factors related to doing business in China:

 Risks Related to Doing Business in China

 Because all of our
operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government
may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at
any time, which could result in a material change in our operations and/or the value of our common stock.

 As a
business operating in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly. The PRC
government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to
which we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application,
interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and
regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current
policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and
such compliance or any associated inquiries or investigations or any other government actions may:

 Delay or impede our development,

 Result in negative publicity or increase our operating costs,

 Require significant management time and attention, and

 Subject us to remedies, administrative penalties and even criminal liabilities that may harm our business,
including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.

 The promulgation
of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably
impact the ability or manner in which we conduct our business and could require us to change certain aspects of our business to ensure
compliance, which could decrease demand for our products, reduce revenues, increase costs, require us to obtain more licenses, permits,
approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be
implemented, our business, financial condition and results of operations could be adversely affected as well as materially decrease the
value of our Common Stock.

 If the Chinese government
chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers,
such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause
the value of such securities to significantly decline or be worthless.

 Recent statements
by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or
foreign investments in China based issuers. PRC has recently proposed new rules that would require companies collecting or holding large
amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that would significantly tighten oversight
over China-based internet giants. On January 4, 2022, the Cyberspace Administration of China, or CAC, issued the revised Measures on Cyberspace
Security Review (the "Revised Measures"), which came into effect on February 15, 2022. Under the Revised Measures, any "network
platform operator" controlling personal information of no less than one million users which seeks to list in a foreign stock exchange
should also be subject to cybersecurity review. Pursuant to the Revised Measures, companies holding data on more than 1 million users
must now apply for cybersecurity approval when seeking listings in other nations due to the risk that such data and personal information
could be "affected, controlled, and maliciously exploited by foreign governments."

 Our business
belongs to the chemical industry in China, which does not involve the collection of user data, implicate cybersecurity, or involve any
other type of restricted industry. Based on the advice of PRC counsel and our understanding of currently applicable PRC laws and regulations,
listing of our common stock in the U.S. is not subject to the review or prior approval of the Cyberspace Administration of China (the
"CAC") or the China Securities Regulatory Commission (the "CRSC"). Uncertainties still exist, however, due to
the possibility that laws, regulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government
expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CRSC or the CAC could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of
such securities to significantly decline or be worthless.

 The occurrence of security
breaches and cyber-attacks could negatively impact our business.

 Information
technology systems are important to our business and operations. We are subject to attempts to compromise our security and information
systems, including denial of service attacks, viruses, malicious software or ransomware, and exploitations of system flaws or weaknesses.
Error or malfeasance or other irregularities may also result in the failure of our or our third-party service providers' cybersecurity
measures and may give rise to a cybersecurity incident. The techniques used to conduct security breaches and cyber-attacks, as well as
the sources and targets of these attacks, change frequently and may not be recognized until launched against us or our third-party service
providers. We or our third-party service providers may not have the resources or technical sophistication to anticipate or prevent rapidly
evolving types of cyber-attacks. The primary risks that could directly result from the occurrence of security breaches and cyber-attacks
include operational interruption, financial losses, personal information leakage and non- compliance. The occurrence of such incidents
could negatively impact our business operations and our relationships with customers and employees, and damage our reputation. If we or
our third-party service providers are unable to avert security breaches and cyber- attacks, we could incur significantly higher costs,
including remediation costs to repair damage caused by the breach, costs to deploy additional personnel and network protection technologies,
train employees and engage third-party experts and consultants, as well as litigation costs resulting from the incident. These costs,
which could be material, could adversely impact our results of operations in the period in which they are incurred and may not meaningfully
limit the success of future attempts to breach our information technology systems.

 Uncertainties with respect
to the PRC legal system could adversely affect us.

 The PRC legal
system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system
may be cited for reference but have limited precedential value.

 In 1979,
the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters generally. The overall
effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments
in the PRC. However, the PRC has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently
cover all aspects of economic activities in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve
uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions
and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection
we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual
rights or tort claims. In addition, these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats
in attempts to extract payments or benefits from us.

 Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime
after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial costs
and diversion of resources and management attention.

 If the Chinese government
were to impose new requirements for approval from the PRC Authorities to issue our common stock to foreign investors or list on a foreign
exchange, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors
and cause the value of such securities to significantly decline or be worthless.

 As of the
date of this annual report, we and our PRC subsidiaries, (1) are not required to obtain permissions from any PRC authorities to operate
or issue our common stock to foreign investors, (2) are not subject to permission requirements from the CSRC, CAC or any other entity
that is required to approve of our PRC subsidiaries' operations, and (3) have not received or were denied such permissions by any
PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office of the
State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or
the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration
over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the
current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required to obtain permission
from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied
or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other
PRC governmental authorities required for overseas listings. As of the date of this annual report, we have not received any inquiry, notice,
warning, sanctions or regulatory objection to listing on U.S. exchange from the CSRC or other PRC governmental authorities. However, there
remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas
securities offerings and other capital markets activities.

 On February
17, 2023, the CSRC released the Trial Administrative Measures for Administration of Overseas Securities Offerings and Listings by Domestic
Companies (the "Trial Measures") and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the
Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing
procedures and report relevant information to the CSRC. If a domestic company fails to complete the filing procedures or conceals any
material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties
by the CSRC, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge
and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. As a listed company, we
believe that we and all of our PRC subsidiaries are not required to fulfill filing procedures and obtain

 approvals from the CSRC to continue
to offer our securities or operate our business as of the date of this annual report. In addition, to date, none of us and our PRC subsidiaries
has received any filing or compliance requirements from CSRC for the listing of the Company at Nasdaq and all of its overseas offerings.
Furthermore, based on our understanding of the current PRC laws, we believe that the CSRC's approval is not required to be obtained
for the Company's listing on Nasdaq; however, there are substantial uncertainties regarding the interpretation and application of
the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors ("M&A Rules"), other PRC Laws and
future PRC laws and regulations, and there can be no assurance that any governmental agency will not take a view that is contrary to or
otherwise different from our belief stated herein.

 If it is
determined in the future that the approval of the CSRC, the CAC or any other regulatory authority is required for our listing on U.S.
exchange, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and
penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China or take other
actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as
the trading price of our securities.

 Our common stock may
be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation
located in China. The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value
of your investment.

 The HFCAA,
was enacted on December 18, 2020. The HFCAA states if the SEC determines that a company has filed audit reports issued by a registered
public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall
prohibit such ordinary shares from being traded on a national securities exchange or in the over the counter trading market in the U.S.

 On March
24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the
HFCAA. A company will be required to comply with these rules if the SEC identifies it as having a "non inspection" year under
a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including
the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amends the HFCAA and requires the SEC to prohibit
an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive
years instead of three. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the
PCAOB to use when determining, as contemplated under the HFCAA Act, whether the PCAOB is unable to inspect or investigate completely registered
public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission
and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with
an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to
inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction. On December 16, 2021, the PCAOB
issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms
headquartered in: (1) mainland China of the PRC, because of a position taken by one or more authorities in mainland China; and (2) Hong
Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.
The PCAOB has made such designations as mandated under the HFCAA. Pursuant to each annual determination by the PCAOB, the SEC will, on
an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. On
August 26, 2022, the PCAOB signed the Protocol with the CSRC and the MOF of the People's Republic of China, governing inspections
and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation
and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion
to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. On December
15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting
firms headquartered in China mainland and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that
the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong
Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting
firms headquartered in China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's,
control. The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and was already making plans
to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations
as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed.
Therefore, the PCAOB may in the future determine that it is unable to inspect or investigate completely registered public accounting firms
in mainland China and Hong Kong.

 Our auditor,
GGF CPA LTD, Certified Public Accountants, the independent registered public accounting firm that issued the audit report included in
our annual report, an auditor of companies that are traded publicly in the United States and an China-based accounting firm registered
with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance
with the applicable professional standards. Our auditor is based in the China and is subject to inspection by the PCAOB on a regular basis.

 However,
our auditor's working papers related to us and our subsidiaries are located in China. If our auditor is not permitted to provide
requested audit work papers located in China to the PCAOB, investors would be deprived of the benefits of PCAOB's oversight of our
auditor through such inspections which could result in limitation or restriction to our access to the U.S. capital markets, and trading
of our securities may be prohibited under the HFCAA, which would result in the delisting of our securities from the Nasdaq.

 Changes in China's
economic, political or social conditions or government policies could have a material adverse effect on our business and operations.

 Substantially
all of our assets and operations are located in the PRC. Accordingly, our business, financial condition, results of operations and prospects
may be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs
from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over the PRC's economic growth through allocating resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

 While
the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among
various sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or
in the laws and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such
developments could adversely affect our business and operating results, lead to a reduction in demand for our services and adversely
affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the
allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For
example, our financial condition and results of operations may be adversely affected by government control over capital investments
or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest
rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in the PRC, which may
adversely affect our business and operating results.

 China's economic,
political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect
on our business.

 All of our
operations are located in China and substantially of our net revenues are derived from customers located in China. Accordingly, our business,
financial condition, results of operations, prospects and certain transactions we may undertake may be subject, to a significant extent,
to economic, political and legal developments in China.

 China's
economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level
of development, growth rate, control of foreign exchange and allocation of resources. Although China's economy has been transitioning
from a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to play a significant role
in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China's
economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting
monetary policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and
regulations could adversely affect the economy in China and could have a material adverse effect on our business.

 The PRC government
has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation of financial
and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures
that will have a negative effect on us. China's social and political conditions may change and become unstable. Any sudden changes
to China's political system or the occurrence of widespread social unrest could have a material adverse effect on our business and
results of operations.

 You may experience
difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management
based on foreign laws.

 We conduct
substantially all of our operations in China, and substantially all of our assets are located in China. In addition, our current officers
reside within China and are PRC nationals. As a result, it may be difficult for our shareholders to effect service of process upon us
or those persons inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement
of judgments of courts with the U.S. and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments
of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult
or impossible.

 We may rely on dividends
and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation
on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

 We rely principally
on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt
we may incur.

 Our PRC subsidiaries'
ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay
dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are required to draw 10%
of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after tax profits if the aggregate balance
of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash
dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their
ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries to distribute dividends or
other payments to their respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

 In addition,
the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends
payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements
between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.

 PRC regulation of
loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay
us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity
and our ability to fund and expand our business.

 Any funds
we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by
or registration with relevant governmental authorities in China. According to the relevant PRC regulations on foreign- invested enterprises,
or FIEs, in China, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce,
or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE.
In addition, (i) a foreign loan of less one year duration procured by our PRC subsidiaries is required to be registered with SAFE or its
local branches and (ii) a foreign loan of one year duration or more procured by our PRC subsidiaries is required to be applied to the
National Development and Reform Commission, or NDRC, in advance for undergoing recordation registration formalities. Any medium or long-term
loan to be provided by us to our PRC operating subsidiaries, must be registered with the NDRC and the SAFE or its local branches. We may
not be able to complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to our
PRC Subsidiary. If we fail to complete such registrations, our ability to capitalize our PRC operations may be negatively affected, which
could adversely affect our liquidity and our ability to fund and expand our business.

 On March
30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of
Foreign-Invested 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 Subsidiary, which may adversely affect our business, financial condition and results of operations.

 Fluctuations in exchange
rates could have a material and adverse effect on our results of operations and the value of your investment.

 The value
of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation
of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of
our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries
in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and
financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the common
stock in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi
against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our
Renminbi into U.S. dollars for the purpose of making payments for dividends on our common stock or for other business purposes, appreciation
of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.

 Governmental control of currency
conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

 The PRC government
imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of
China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we primarily rely on dividend
payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under
the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China
may be used to pay dividends to our company. However, approval from or registration with appropriate government authorities is required,
in principle, where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment
of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of
our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other
capital expenditure payments outside China in a currency other than Renminbi. The PRC government may at its discretion restrict access
to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining
sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our
shareholders, including holders of the Common stock.

 U.S. regulatory bodies may
be limited in their ability to conduct investigations or inspections of our operations in China.

 Any disclosure
of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply with China's
state secrecy laws, which broadly define the scope of "state secrets" to include matters involving economic interests and
technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations
will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially
as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these
regulators may be limited or prohibited.

 Item 1B. Unresolved Staff Comments.

 Not applicable.

 Item 1C. Cybersecurity.

 We face risks
associated with cybersecurity. For additional details on risks from cybersecurity threats, please refer to "Item 1A. Risk Factors
 - The occurrence of security breaches and cyber-attacks could negatively impact our business." and "- If the Chinese
government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based
issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors
and cause the value of such securities to significantly decline or be worthless. "

 The purpose
of our cybersecurity program is to assess, identify, manage and mitigate cybersecurity risk while supporting the achievement of our business
objectives. Under our comprehensive risk management program, the Board of Directors of the Company maintains oversight of the most significant
risks facing the Company, including cybersecurity risks, while senior management is responsible for the identification and prioritization
of risks that are material to our business, corresponding risk-mitigation efforts and day-to-day management of our risk management program.
 The full Board of Directors retains oversight over management's cybersecurity efforts. At least annually, and often more frequently,
our Board of Directors receives cybersecurity briefings from senior executives, including, when appropriate, executives focused on cybersecurity
matters.

 Our companywide
cybersecurity policy sets the framework for our approach to cybersecurity. Each business unit and our corporate headquarters designates
individuals with appropriate qualifications and experience to be responsible for addressing cybersecurity matters, including assessing,
identifying and managing risks from cybersecurity threats, with a direct reporting line to senior management. Under our approach to cybersecurity,
each business unit designs and operates its own information and cybersecurity program tailored to its market, customer requirements, regulatory
requirements and threats. Our cybersecurity policy and procedures are designed to ensure senior management receives timely and adequate
information regarding cybersecurity matters, including threats and incident response, as appropriate to the matter. Our policies and procedures
are also designed to oversee and identify material cybersecurity risks related to third-party vendors and service providers.

 As part
of our approach to cyber risk management, we regularly perform internal audits of internal processes and controls relating to cybersecurity.
>From time to time, as appropriate under our overall cybersecurity program, we engage third-party experts to support the assessment of
cyber related risks, including to conduct cyber penetration testing.

 To its knowledge,
 the Company has not experienced a material cybersecurity breach within the last three years, nor identified any risks from cybersecurity
threats that have materially affected us, including our business strategy, results of operations or financial condition.

 Item 2. Properties.

 FIGURE 2.1 - REGIONAL MAP
OF MINING PROPERTIES

 FIGURE 2.2 – DETAILED
MAP OF MINING PROPERTIES

 We do not own any land, although
we do own some of the buildings on land we lease. Our executive offices are located at Level 11, Vegetable Building, Industrial Park of
the East in Shouguang City, Shandong Province, P.R.C, which also is the headquarters of SCHC, SHSI and SYCI. These offices were purchased
from Shandong Shouguang Vegetable Seed industry Group Co., Ltd.

 SYCI concentrates its efforts
on the production and sale of chemical products that are used in oil and gas field exploration, oil and gas distribution, oil field drilling,
papermaking chemical agents, and manufacture and sell materials that are used for human and animal antibiotics in China. Currently, SYCI
is closed according to the November 2017 Letter and currently under construction at Bohai Marine Fine Chemical Industry Park, Shouguang
City, Shandong Province, China, where SYCI will be relocated to.

 DCHC is a registered company exploring
and developing natural gas and brine resources (including bromine and crude salt) in China located in No.14 team, Liguanggou Village,
Tianbao Township, Daying County, Suining City, Sichuan Province, China.

 In the first quarter of 2018,
six out of its ten bromine factories completed their rectification process within factory areas (i.e. excluding crude salt field area)
and were approved and scheduled for production commencement by April 2018 as verbally indicated by the local government. The remaining
four factories were still undergoing rectification at that time. Three factories (Factory No. 3, Factory No. 4 and Factory No. 11) had
to be demolished in September 2018 as required by the government and rectification for Factory No. 10 was completed in November 2018.

 The Company operates its bromine
and crude salt production facilities through its wholly-owned subsidiary SCHC. SCHC has land use rights to one property (10,790 square
meters, or approximately 3 acre) as bromine production area for Factory No. 1 and land lease contracts to seven properties (approximately
17,816 acre), totaling nearly 17,819 acre, located on the south bank of Laizhou Bay on the Shandong Peninsula of the People's Republic
of China. Each of the properties is accessible by road. The Yiyang railway line is within 50 kilometers and the Yangkou port is five kilometers
away.

 Each of the seven properties contains
natural brine deposits which are extracted through wells and are used to extract bromine and produce crude salt. Bromine is a simple molecular
element which is produced by extracting the bromine ion from natural brine. Crude salt is sodium chloride. Bromine is an important chemical
raw material in flame retardants, fire extinguishing agents, refrigerants, photographic materials, pharmaceuticals, pesticides, and oil
and other industries. Crude salt, also known as industrial salt, is used in a wide range of chemical industries, is the major raw material
in the soda and chlor-alkali industries and can be widely used in agricultural, animal husbandry, fisheries and food processing industries.
Crude salt is also the main raw material for edible salt.

 Nature of Ownership Interest in
the Properties

 All of the land in the PRC is
owned by the state. Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes at
no cost. In the case of land used for industrial purposes, the land use rights are granted for a period of 50 years. This period may be
renewed at the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security
for borrowings and other obligations. The Company does not own any land but has entered into contracts with the local government and original
owners of the land use rights to acquire their rights for a period of 50 years. The contracts required us to pay a one-time fee plus an
annual rent.

 Mineral Rights

 The Chinese and provincial governments
have enacted a series of laws and regulations relating to the natural resources sector over the past 20 years, including laws and regulations
designed to improve safety and decrease environmental degradation. The "China Mineral Resources Law" declares state ownership
of all mineral resources in China. However, mineral exploration rights can be purchased, sold and transferred to both domestic and foreign
owned companies. Mineral resource rights are granted by the central government permitting recipients to conduct mineral resource activities
in a specific area during the license period. These rights entitle the licensee to undertake mineral resource activities and infrastructure
and ancillary work, in compliance with applicable laws and regulations, within the specific area covered by the license during the license
period. The licensee is required to submit a proposal and feasibility studies to the relevant authority and to pay the central government
a natural resources tax levied at 8% of sales. The Company was exempt from paying the fee prior to January 1, 2008. Shandong province
has determined that bromine is to be extracted only by licensed entities.

 Our mineral rights are issued
by the local government and allow for a one year period of mining. The rights provide us with the exclusive rights to explore and extract
natural brine under the leased land and produce bromine and crude salt. The government performs an annual inspection of the company's
previous year's state of production & operations at beginning of each year. The annual inspection reviews: (1) whether the production
is safe and if any accidents occurred during the previous year; (2) whether the natural resources tax and other taxes were timely paid;
(3) whether employees' salary and welfare benefits were timely paid; and (4) whether the Company meets environment protection standards.
Only those companies who pass the inspection receive mineral rights for another one year term. For those companies who do not pass the
inspection, additional mineral rights are not allocated until they can meet the requirements. If there is major safety accident, the government
may revoke the mining permit.

 The mining certificate were renewed
in July 2021 with production limit of 24,000 tons of bromine production per year.

 On September 21, 2018, we received
a closing notice from the People's Government of Yangkou Town, Shouguang City informing us that we had to shut down our three bromine
factories (Factory No. 3, No. 4, and No. 11.).

 The following is a description
of the land use and mineral rights related to each of the nine properties held by SCHC as of December 31, 2024.

 All of the bromine factories are under
rectification process without production.

 Factory No. 1 – Haoyuan General Factory

 Area

 6,442 acres

 February 5, 2007

 2054 (for mining areas only)

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 29.25 Years

 Prior fees paid for land use rights

 RMB8.6 million

 RMB186,633

 C3707002009056220022340

 Date of Permission:

 July 2018, subject to renewal per three years

 Period of Permission:

 Three year

 Factory No. 4 ( originally named as Subdivision of Factory No. 1) – State-owned Shouguang Qinshuibo Farm

 Area

 0.79 acres

 Date of Factory lease

 January 1, 2011

 Factory Lease Term

 Twenty Years

 Factory lease Expiration Date

 2030

 The number of remaining years to expiration of the of the factory lease as of December 31, 2024

 6.0 Years

 RMB5,000,000

 Under application

 Factory No. 2 – Yuwenbo

 Area

 1,846 acres

 April 7, 2007

 2052

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 28 Years

 Prior Fees Paid For Land Use Rights

 RMB7.5 million

 RMB162,560

 C3707002009056220022340

 Date of Permission:

 July 2021, subject to renewal per three years

 Period of Permission:

 Three year

 Factory No. 2 – State Operated Shouguang Qingshuibo Farm

 Area

 568 acres

 December 30, 2010

 Thirty Years

 2040

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 16.7 Years

 RMB172,500 (increase 5% per year)

 Under application

 Factory No. 7 (originally named as No. 5)– Wangjiancai

 Area

 2,165 acres

 October 25, 2007

 2054

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 30 Years

 RMB176,441

 RMB8.3 million

 Under application, written consent obtained from local land and resources departments

 Factory No. 7 – Qiufen Yuan

 Area

 1,611 acres

 January 7, 2009

 2059

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 34.17 Years

 RMB171,150 (increase 5% per two years)

 C3707002009056220022340

 Date of Permission:

 July 2018, subject to renewal per three years

 Period of Permission:

 Three year

 Factory No. 8 – Fengxia Yuan

 Area

 2,723 acres

 September 7, 2009

 2059

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 34.66 Years

 RMB347,130 (increase 5% per two years)

 Under application, written consent obtained from local land and resources departments

 Factory No. 9 – Jinjin Li

 Area

 759 acres

 June 7, 2010

 2060

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 35.5 Years

 RMB184,200 (increase 5% per two years)

 Under application, written consent obtained from local land and resources departments

 Factory No. 10 – Liangcai Zhang

 Area

 1,700 acres

 December 13, 2021

 Ten Years

 2031

 The number of remaining years to expiration of the of the land lease as of December 31, 2024

 7.0 Years

 RMB1,376,000

 Under application

 Leased Facility

 On November 5, 2010, SCHC entered
into a Lease Contract with State-Operated Shouguang Qingshuibo Farm. Pursuant to the Lease Contract, SCHC shall lease certain property
with an area of 3,192 square meters (or 0.8 acres) and buildings adjacent to the Company's Factory No. 1. There are currently non-operating
bromine production facilities on the property which have not been in production for more than 12 months. The annual lease payment for
the property is RMB 5.0 million, approximately $705,950, per year and shall be paid by SCHC no later than June 30th of each year. The
term of the Lease Contract is for twenty years commencing January 1, 2011. The Lease Contract may be renewed by SCHC for an additional
twenty year period on the same terms. The Lessor has agreed to permit SCHC to reconstruct and renovate the existing bromine production
facilities on the property.

 The chart below represents the
annual production capacity and annualized utilization ratios for our bromine producing properties currently leased by the Company, which
are all located in Shouguang City, Shandong Province, China. There are no proven and probable reserves located on our properties.

 Annual

 Facility

 Production
Capacity #

 2024
Utilization

 2023
Utilization

 Bromine Property

 Acquisition Date

 Acres

 Ratio

 Ratio

 Factory No. 1

 —

 6,442

 6,681

 %

 %

 Factory No. 2

 April 7, 2007

 1,846

 4,844

 —

 —

 Factory No. 7* (originally named as No. 5 and

 October 25, 2007/

 No. 7)

 January 7, 2009

 3,776

 6,986

 %

 %

 Factory No. 8

 September 7, 2009

 2,723

 4,016

 %

 %

 Factory No. 9

 June 7, 2010

 2,793

 %

 %

 Factory No.4 (originally named as Subdivision

 of Factory No. 1)

 January 1, 2011

 3,186

 %

 %

 Factory No. 10

 December 22, 2011

 1,700

 3,000

 —

 —

 *
 Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories
are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7
on May 2019.

 The following table shows the
annual bromine produced and sold for each of our production facilities and the weighted average price received for all products sold for
the last two years.

 2024

 2023

 Produced

 Sold

 Selling price

 Produced

 Sold

 Selling price

 Facility

 (RMB/ton)

 (RMB/ton)

 Factory No. 1

 17,633

 2,223

 2,220

 23,760

 Factory No. 2

 —

 —

 —

 —

 —

 —

 Factory No. 3**

 —

 —

 —

 —

 —

 —

 Factory No. 4**

 —

 —

 —

 —

 —

 —

 Factory No. 7* (originally named as No. 5 and

 No. 7) *

 17,640

 2,403

 2,405

 23,783

 Factory No. 8

 16,906

 1,314

 1,300

 23,574

 Factory No. 9

 17,571

 1,142

 1,147

 23,715

 Factory No. 4 (originally know Subdivision

 of Factory No. 1)

 17,462

 24,072

 Factory No. 10

 —

 —

 —

 —

 —

 —

 Factory No. 11**

 —

 —

 —

 —

 —

 —

 Total

 2,196

 2,250

 7,961

 7,951

 *
 Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories
are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7
on May 2019.

 **
 Factory
No. 3, 4 and 11 were demolished in September 2018.

 The following table shows the
annual crude salt produced and sold for each of our production facilities and the weighted average price received for all products sold
for the last two years.

 2024

 2023

 Produced

 Sold

 Selling price

 Produced

 Sold

 Selling price

 Facility

 (RMB/ton)

 (RMB/ton)

 Factory No. 1

 1,090

 1,090

 1,750

 3,250

 Factory No. 2

 3,850

 6,153

 5,930

 6,650

 Factory No. 7* (Originally Named as No. 5
and No. 7) *

 28,960

 31,694

 42,160

 41,280

 Factory No. 8

 20,000

 20,000

 23,900

 23,900

 Factory No. 9

 15,380

 18,353

 20,440

 22,021

 Total

 69,280

 77,290

 94,180

 97,101

 *
 Bromine production for Factory No. 5 and Factory No. 7 were combined in early 2010 as both factories
are located adjacent to each other, and renamed Factory No. 5 (which was previously considered part of Factory No. 7) as Factory No. 7
on May 2019

 Our SYCI's production facilities did not produce or
sold any chemical products for the last two years.

 Item 3. Legal Proceedings.

 We are currently not a party to
any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us
in all material aspects other than the legal proceeding disclosed below. We may from time to time become a party to various legal or administrative
proceedings arising in the ordinary course of our business, other than the following:

 On or about August 3, 2018, written
decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018] No. 292, Shou Guo
Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295 and Shou Guo Tu Zi Fa
Gao Zi [2018] No. 296 (together, the "Written Decisions") were served on Shouguang City Haoyuan Chemical Company Limited ("SCHC")
by the Shouguang City Natural Resources and Planning Bureau (the "Bureau"), naming SCHC as respondent. For more details and
information related to the Written Decisions, please see "Note 21 – Loss Contingencies, Notes to Consolidated Financial Statement"
contained in this annual report.

 According to a Civil Mediation
Statement (No. (2025) Lu 0783 Min Chu 2607) issued by the Shouguang People's Court of Shandong Province on March 17, 2025, Shouguang City
Haoyuan Chemical Company Limited ("SCHC"), a wholly owned subsidiary of the Company, owes the plaintiff, Shouguang Chengyu Trading
Co., Ltd., a total of RMB 226,825.44 for goods. SCHC is also obligated to make monthly payments of RMB 50,000 to the plaintiff by the
15th of each month, starting in April 2025, until the debt is fully paid off.

 Item 4. Mine Safety Disclosures.

 Not applicable.

 Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Market for Our Common Stock

 Our common stock is listed for trading on the NASDAQ Global
Select Market, or NASDAQ, under the symbol "GURE".

 Holders

 As of April 10, 2025,
there were 39 record holders of our common stock.

 Securities Authorized for Issuance Under Equity Compensation
Plans

 See "Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters " for the aggregate information regarding
our equity compensation plans in effect on December 31, 2024.

 holders

 security holders

 Purchases of Equity Securities by the Company and Affiliated
Purchasers

 None.

 Recent Sales of Unregistered Securities

 Any previous sales of unregistered securities by the Company
have been previously disclosed in our reports on Form 10-Q or Form 8-K, as applicable, filed with the SEC.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations.

 Overview

 We are a Nevada holding company
which conducts operations through our wholly-owned China-based subsidiaries. Our business is conducted and reported in four segments,
namely, bromine, crude salt, chemical products and natural gas.

 Through our wholly-owned subsidiary,
SCHC, we produce and trade bromine and SHSI for crude salt production and trading. crude salt. We are one of the largest producers of
bromine in China, as measured by production output. Elemental bromine is used to manufacture a wide variety of bromine compounds used
in industry and agriculture. Bromine also is used to form intermediary chemical compounds such as Tetramethylbenzidine. Bromine is commonly
used in brominated flame retardants, fumigants, water purification compounds, dyes, medicines and disinfectants. Crude salt is the principal
material in alkali production as well as chlorine alkali production and is widely used in the chemical, food and beverage, and other industries.

 Through our wholly-owned subsidiary,
SYCI, we manufacture and sell chemical products used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking
chemical agents, inorganic chemicals and materials that are used for human and animal antibiotics.

 Our wholly-owned subsidiary, DCHC,
was established to explore and develop natural gas and brine resources (including bromine and crude salt) in Sichuan Province, China.

 Bromine and Crude Salt

 As disclosed in the Company's
Current Report on Form 8-K filed on September 8, 2017, the Company received, on September 1, 2017, letters from the Yangkou County, Shouguang
City government addressed to each of its subsidiaries, SCHC and SYCI, which stated that in an effort to improve the safety and environmental
protection management level of chemical enterprises, the plants are requested to immediately stop production and perform rectification
and improvements in accordance with the country's new safety and environmental protection requirements. In the Company's press
release of August 11, 2017 and on its conference call of August 14, 2017, the Company addressed concerns that increased government enforcement
of stringent environmental rules that were adopted in early 2017 to insure corporations bring their facilities up to necessary standards
so that pollution and other negative environmental issues are limited and remediated, could have an impact on our business in both the
short and long-term. The Company also expressed that although it believed its facilities were fully compliant at the time, the Company
did not know how its facilities would fare under the new rules. Teams of inspectors from the government were sent to many provinces to
inspect all mining and manufacturing facilities. The local government requested that facilities be closed, so that the facilities could
undergo the inspection and analysis in the most efficient manner by inspectors' team. As a result, our facilities were closed on
September 1, 2017.

 The Company believes that this
is another step by the government to improve the environment. It further believes the goal of the government is not to close all plants,
but rather to codify the regulations related to project approval, land use, planning approval and environmental protection assessment
approval so that illegal plants are not able to open in the future and so that plants close to population centers do not cause serious
environmental damage. In addition, the Company believes that the Shandong provincial government wants to assure that each of its regional
and county governments has applied the Notice in a consistent manner.

 The Shouguang City Bromine Association,
on behalf of all the bromine producers in Shouguang, initiated negotiations with the local government agencies. The local governmental
agencies acknowledged the facts that their initial requirements for the bromine industry did not include the project, the planning and
the land use rights approvals, which were later introduced by the provincial government as new requirements. The Company understood from
the local government that local government were coordinating with various government agencies to solve these three outstanding approval
issues in a timely manner and that all impacted bromine plants will not be allowed to commence production prior to obtaining those approvals.
In February 2019, the Company received a notification from the local government of Yangkou County that its Factories No. 1, No. 4, No.
7 and No. 9 passed inspection and were allowed to resume operations. In April 2019, Factory No. 1 and No. 7 resumed operations.

 Subsequently, the Company received
an approval dated on February 27, 2020 issued by the local governmental authority which allows us to resume production after the winter
temporary closure. Further, the Company received another approval from the Shouguang Yangkou People's Government dated on March
5, 2020 to resume production at its bromine factories No.1, No. 4, No.7 and No. 9 in order to meet the needs of bromide products for epidemic
prevention and control (the "March 2020 Approval"). The Company's factories No.7 and No.1 started trial production in
middle-March, 2020, and commenced commercial production on April 3, 2020.

 The Company received oral notification
from the government regarding Factory No. 8, allowing it to resume production in August 2022. Factory No.8 began contributing revenue
in the fourth quarter 2022.

 The Company is awaiting governmental
approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention
measures. As a result, we may be required to make certain modifications to our existing wells and aqueducts prior to commencement of
operations of these factories in order to satisfy the local government's requirements. The Company completed its flood prevention project
in December 2023. This project was implemented for safeguarding its bromine facilities.

 Pursuant to the notification from
the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February
12, 2025. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed
preparation operations at the bromine and crude salt factories as scheduled in February 2025.

 On November 24, 2017, the Company
received a letter from the People's Government of Yangkou County, Shouguang City notifying the Company that due to the new standards
and regulations relating to safety production and environmental pollution, from certain local governmental departments, such as the municipal
environmental protection department, the security supervision department and the fire department, its chemical enterprises would have
to be relocated to a new industrial park called Bohai Marine Fine Chemical Industry Park. Although our chemical companies were in compliance
with regulations, they were also close to a residential area. As a result, the government determined we should relocate to the Bohai park.
Chemical companies that are not being asked to move into the park are being permanently closed. Since our factories closed, the Company
has secured from the government the land use rights for its chemical plant. On January 6, 2020, the Company received the environmental
protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical factory. Construction of the
new chemical facilities at Bohai Marine Fine Chemical Industrial Park commenced in June 2020. Initially, the construction was projected
to last around one year, with an additional six months for equipment installation and testing. However, due to the COVID epidemic and
electrical restrictions, the opening of the chemical factory has been postponed. The Company has received the refrigeration and air compressor
units. Additionally, the procurement of the final equipment for our chemical factory has been postponed until we have a better understanding
of the potential for derivative bromine products. We anticipate proceeding with the completion of its chemical factory in due course.
However, in the event that the Chinese economy persists in its weakness and if we perceives this trend to be ongoing, there is a possibility
that the chemical factory could be repurposed for the production of Sodium-Ion batteries.

 In January 2017, the Company completed
the construction of the first brine water and natural gas well field in Daying County, Sichuan Province, and commenced trial production
in January 2019. On May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province,
mandating the need for project approval for its Daying well, encompassing the entire natural gas and brine water project. This also includes
approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until these approvals
are obtained, the Company must temporarily suspend trial production at its natural gas well in Daying. Additionally, in compliance with
the Chinese government new policies, the Company is required to obtain an exploration license for bromine and a mining license for natural
gas. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management
(Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect on May 1, 2020, privately owned
enterprises are allowed to participate in the natural gas production. The Company is engaged in ongoing discussions with the government
of Daying County regarding the establishment of a joint venture for the exploration and production of natural gas and brine products in
Sichuan.

 As a result of our
acquisitions of SCHC and SYCI, our historical consolidated financial statements and the information presented below reflects the
accounts of SCHC SYCI and DCHC, the consolidated financial
statements and the information presented below as of and for the year ended December 31, 2024. The following discussion should be
read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

 Flood Prevention Project

 In August
2023, the Company initiated its preventive measures for safeguarding its bromine facilities. Our strategy involves the renovation of the
channels of four major rivers within our mining area, encompassing the tributary of the Mihe River. The aim is to prevent flooding that
could harm the wells, aqueducts and crude salt pans at our plant. In December 2023, the Company completed this flood prevention project.
As of December 31, 2023, we incurred $46,510,856 in other expenses for the project.

 The cost incurred for four major
rivers are: (1) Liansigou Section for $8,057,722;(2) Mi River Section for $20,168,321;(3) Ta River Section $10,070,033; (4) Weitan River
Section for $8,214,780.

 RESULTS OF OPERATIONS.

 Year ended December 31, 2024 as compared to year ended

 Years ended

2024

2023

 Percent Change
Increase/ (Decrease)

 Net Revenue

 $

 $

 (75
 %)

 Cost of Net Revenue

 $
 (14,746,741
)

 $
 (28,089,953
)

 (48
 %)

 Gross Profit

 $
 (7,085,731
)

 $
 1,953,837

 (463
 %)

 Sales, Marketing and Other Operating Expense

 $
 (46,264
)

 $
 (59,055
)

 (22
 %)

 Direct labor and factory overheads incurred during plant shutdown

 $
 (8,880,643
)

 $
 (9,544,675
)

 (7
 %)

 General and Administrative Expenses

 $
 (5,271,011
)

 $
 (4,240,832
)

 %

 Loss from Operations

 $
 (21,283,649
)

 $
 (11,890,725
)

 %

 Other Income, Net

 $
 (62,113
)

 $
 144,919

 (143
 %)

 Expenditure on water pollution treatment

 $
 —

 $
 (46,510,856
)

 (100
 %)

 Loss on disposal of property, plant and equipment

 $
 (29,169,008
)

 $
 —

 N/A

 Impairment of Property, plant and equipment

 $
 (6,772,500
)

 $
 —

 N/A

 Loss before Taxes

 $
 (57,287,270
)

 $
 (58,256,662
)

 (2
 %)

 Income Tax Expense (Benefit)

 $
 (1,648,182
)

 $
 (3,538,617
)

 (53
 %)

 Net Loss

 $
 (58,935,452
)

 $
 (61,795,279
)

 (5
 %)

 Net Loss
of $58,935,452 for year 2024 was mainly attributable to decreased sales and reduced margins. The company also suffered a loss of $29,169,008
and $6,772,500 on retirement of fixed assets and impairment of fixed assets. Additionally, the compensation expenses amounted to $194,700
for shares issued to company employees, officers and consultant for the year 2024.

 Net Loss
of $61,795,279 for year 2023 was mainly attributable to decreased sales and reduced margins. Additionally, the compensation expenses amounted
to $451,350 for shares issued to company employees, officers and consultant for the year 2023. The Company also incurred losses
of $46,510,856 on a flood prevention project.

 Net Revenue The
table below shows the changes in net revenue in the respective segment of the Company for the fiscal year 2024 compared to the same period
in 2023:

 Net Revenue by Segment

 Percent Increase (Decrease)
 of Net Revenue

 $
 5,549,815

 72.4
 %

 $
 26,921,462

 89.6
 %

 (79.4
 %)

 2,049,988

 26.8
 %

 2,971,467

 9.9
 %

 (31.0
 %)

 —

 —

 —

 —

 —

 61,207

 0.8
 %

 150,861

 0.5
 %

 (59.4
 %)

 Total sales

 $

 100.0
 %

 $

 100.0
 %

 (74.5
 %)

 Years Ended December 31

 Percent Change

 Bromine and crude salt segments product sold in tonnes

 2024

 2023

 Increase

 Bromine (excluded volume sold to SYCI)

 2,250

 7,951

 (72
 %)

 77,289

 97,101

 (20
 %)

 Bromine se g ment

 Net revenue from our bromine segment decreased by 79.4%
to $5,549,815 for the year ended December 31, 2024, compared to $26,921,462 for the year ended December 31, 2023. This decrease was due
to a decrease in bromine unit price of 27% and a decrease in volume of 72%.

 Crude salt se g ment

 Net revenue from our crude salt segment decreased by 31.0%
to $2,049,988 for the year ended December 31, 2024, compared to $2,971,467 for the last year. This decrease was due to a decrease in crude
salt unit price of 13% and a decrease in volume of 20%.

 Chemical products segment

 For the years ended December 31, 2024
and December 31, 2023, the net revenue for the chemical products segment was $0 due to the closure of our chemical factories since September
1, 2017.

 Natural Gas segment

 For the year ended December 31, 2024, and December 31, 2023,
the net revenue for the n atural g as se g ment was $61,207 and $150,861. The 59.4% decrease in revenue was primarily
due to the expiration of contracts.

 Cost of Net Revenue

 Cost of Net Revenue by Segment

 % Change

 of Cost of

 Net Revenue

 $
 13,750,051

 %

 $
 26,521,281

 %

 (48
 %)

 996,396

 %

 1,567,993

 %

 (37
 %)

 —

 —

 —

 —

 —

 —

 —

 (57
 %)

 Total

 $
 14,746,741

 %

 $
 28,089,953

 %

 (48
 %)

 Cost of net revenue
primarily includes costs of the raw materials consumed, the direct salaries and benefits for production staff, electricity costs,
depreciation and amortization of manufacturing plant and machinery, and other manufacturing-related costs. Our cost of net revenue
was $14,746,741 for the year ended December 31, 2024, representing a $13,343,212 (or 48%) decrease compared to the preceding year.
The decrease in costs was mainly due to a significant decrease in sales volume.

 Bromine production capacity and utilization of our factories

 The table below represents the annual capacity and utilization
ratios for all of our bromine producing properties:

 Annual Production Capacity
(in tonnes)

 Utilization
Ratio (i)

 Fiscal year 2024

 31,506

 %

 Fiscal year 2023

 31,506

 %

 Variance of the fiscal year 2024 and 2023

 (18
 %)

 (i)
 Utilization ratio is calculated based on the annualized actual production volume in tonnes for the periods
divided by the annual production capacity in tonnes.

 Bromine segment

 For the year ended December 31, 2024, the cost of net revenue
for the bromine segment was $13,750,051. For the year ended December 31, 2023, the cost of net revenue for the bromine segment was $26,521,281.

 Crude salt segment

 For the year ended December 31, 2024, the cost
of net revenue for the crude salt segment was $996,396. The cost of net revenue for our crude salt segment for the year ended
December 31, 2023 was $1,567,993.

 Chemical products segment

 Cost of net revenue for our chemical products segment for
the fiscal year 2024 and 2023 was $0.

 Natural Gas segment

 Cost of net revenue for our natural gas segment for the
year ended December 31, 2024 and 2023 was $294 and $679.

 Gross (Loss) Profit. Gross (loss) was $7,085,731or
93%, of net revenue for the year ended December 31, 2024, compared to $1,953,837, or 7%, of net revenue for the same period in 2023.

 Gross Profit (Loss) by Segment

 % Point Change

 of Gross

 Profit Margin

 Gross Profit

 (loss) Margin

 Gross Profit

 (loss) Margin

 $
 (8,200,236
)

 (147
 %)

 $
 400,181

 %

 (145
 %)

 1,053,592

 %

 1,403,474

 %

 %

 —

 —

 —

 —

 —

 60,913

 %

 150,182

 %

 %

 Total Gross (Loss) Profit

 $
 (7,085,731
)

 (93
 %)

 $
 1,953,837

 %

 (86
 %)

 Bromine se g ment

 For the year ended December 31, 2024, the gross loss margin
for our bromine segment was 147% compared to the gross profit of 2% in the previous year. This decrease was due to a decrease in bromine
unit price of 27% and a decrease in volume of 72%.

 Crude salt se g ment

 For the year
ended December 31, 2024, the gross profit margin for our crude salt segment was 51%, compared to 47% in the preceding year, representing
a 4% increase.

 Direct labor and factory
overheads incurred during plant shutdown. On September 1, 2017, the Company received notification from the government of Yangkou
County, Shouguang City of PRC stating that production at all its bromine and crude salt and chemical factories should be halted with immediate
effect in order for the Company to perform rectification and improvement in accordance with the county's new safety and environmental
protection requirements. On November 24, 2017, the Company received a letter from the Government of Yangkou County, Shouguang City notifying
the Company to relocate its two chemical production plants located in the second living area of the Qinghe Oil Extraction Plant to Bohai
Park. As such, direct labor and factory overhead costs (including depreciation of plant and machinery) amounted $8,880,643 and $9,544,675
for fiscal years 2024 and 2023, which were presented as operating expenses instead of in cost of revenue. The decrease in direct labor
and factory overhead costs was primarily attributable to the factories operation status during the fiscal year 2024 and year 2023, respectively.
These five factories (including No.1,No.4,No.7,No.8 and No.9)were in production during the year 2024.

 General and Administrative
Expenses. General and administrative expenses were $5,271,011 for the year ended December 31, 2024, representing an increase of
$1,030,179 (or 24%) as compared to $4,240,832 for the same period in 2023.

 Loss from Operations. Operating loss was $21,283,649
for the fiscal year 2024, compared to a loss of $11,890,725 in the same period in 2023.

 Income (loss) from Operations by Segment

 Year ended December 31, 2024

 Year ended December 31, 2023

 Segment:

 $
 (17,238,619
)

 83.9
 %

 $
 (10,005,755
)

 90.1
 %

 $
 (76,694
)

 0.4
 %

 $
 640,309

 (5.8
 %)

 $
 (3,028,479
)

 14.7
 %

 $
 (1,653,349
)

 14.9
 %

 $
 (195,364
)

 %

 $
 (86,284
)

 0.7
 %

 (Loss from operations before corporate costs

 $
 (20,539,156
)

 %

 $
 (11,105,079
)

 %

 Corporate costs

 $
 (744,493
)

 $
 (785,646
)

 Loss from operations before taxes

 $
 (21,283,649
)

 $
 (11,890,725
)

 Bromine se g ment

 Loss from operations from our bromine segment was $17,238,619
for the fiscal year 2024, compared to a loss of $10,005,755 in the same period in 2023. This decrease was due to a decrease in bromine
unit price of 27% and a decrease in volume of 72%.

 Crude salt se g ment

 Loss from operations from our
crude salt segment was $76,694 for fiscal year 2024 compared to an income of $640,309 in the same period in 2023. The main reason for
the decline in crude salt in 2024 compared with 2023 is that the unit price of sales is down by 13%, and the sales volume is also down
by 20%.

 Chemical products segment

 Loss from operations from our chemical products segment
was $3,028,479 for the fiscal year 2024, compared to a loss of $1,653,349 in the same period in 2023.

 Natural Gas segment

 Loss from operations from our natural gas segment was $195,364
for the fiscal year 2024, compared to a loss of $86,284 in the same period in 2023.

 Other (Expense)/Income, Net. Other
income, net, which represent bank interest income, net of finance lease interest expense and $50,470 of non-operating expenses was
$62,113 for the fiscal year 2024, representing a decrease of $207,032 (or approximately 143% as compared to the preceding year.

 Loss on disposal of property, plant and equipment.
 Loss on disposal of property, plant and equipment was $29,169,008 in the fiscal year 2024. In June 2024, considered the bromide
well and transmission channel have been in use for many years, the Company conducted a site inspection and found that some wells and channels
were seriously damaged by water seepage which in turn required write-off or new construction, and the write-off amount is $29,169,008.

 Impairment of Property, plant and equipment. Impairment
of property, plant and equipment was $6,772,500 in the fiscal year 2024. In December 2024, due to the delayed completion of some machinery
and equipment of Yuxin Chemical's new plant resulting from the impact of the current market environment, our company hired professional
evaluators to perform impairment test on these assets. The latter determined impairment was $6,772,500.

 Net Loss. Net loss was $58,935,452 for the
fiscal year 2024, compared to net loss of $61,795,279 in the preceding year.

 Net Loss Per Share

 For the fiscal year 2024, net loss per share was $5.49 compared
to net loss per share of $5.92 in the preceding year. There were 10,726,924 shares outstanding compared to 10,726,924 shares.

 Foreign Currency Translation
Adjustment

 For the fiscal year 2024, the Company
had a negative foreign currency translation adjustment of $2,800,874 versus a negative adjustment of $5,025,980 in the previous year.
This adjustment impacts all balance sheet translations into U.S. dollars.

 LIQUIDITY AND CAPITAL RESOURCES

 As of December 31, 2024, cash and cash equivalents were
$10,075,162 as compared to $72,223,894 as of December 31, 2023. The components of this decrease of $62,148,732 are reflected below.

 Statement of Cash Flows

 Years Ended December 31

 2024

 2023

 Net cash provided by (used in) operating activities

 $
 675,068

 $
 (32,751,851
)

 Net cash used in investing activities

 $
 (60,551,488
)

 $
 —

 Net cash used in financing activities

 $
 (249,240
)

 $
 (267,810
)

 Effects of exchange rate changes on cash and cash equivalents

 $
 (2,023,072
)

 $
 (2,982,659
)

 Net decrease in cash and cash equipment

 $
 (62,148,732
)

 $
 (36,002,320
)

 For the fiscal years 2024 and
2023, we met our working capital and capital investment requirements by using cash flows from operations and cash on hand.

 Net Cash Provided by (Used
in) Operating Activities

31, 2024, cash flow used in operating activities of approximately $0.68 million was mainly due to a net loss of $58.9 million, offset
by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $18 million, impairment of property,
gain on disposal of equipment of $29 million, plant and equipment of $6.8 million and an increase in account receivable of $4.26 million.

 During the year ended
December 31, 2023, cash flow used in operating activities of approximately $32.75 million was mainly due to a net loss of $61.8
million, offset by a non-cash adjustment related to depreciation and amortization of property, plant and equipment of $27.13 million
and an increase in accounts and other payable and accrued expenses of $1.11 million.

 Accounts receivable

 Cash collections on our accounts
receivable had a major impact on our overall liquidity. The following table presents the aging analysis of our accounts receivable as
of December 31, 2024 and 2023.

 Aged 1-30 days

 $
 419,581

 %

 $
 2,040,377

 %

 Aged 31-60 days

 144,942

 %

 2,460,233

 %

 Aged 61-90 days

 —

 —

 365,086

 %

 Aged 91-120 days

 —

 —

 —

 —

 Aged 121-150 days

 —

 —

 —

 —

 Aged 151-180 days

 —

 —

 —

 —

 Aged 181-210 days

 —

 —

 —

 —

 Aged 211-240 days

 —

 —

 —

 —

 Total

 $
 564,523

 %

 $
 4,865,696

 %

 The overall accounts receivable
balance as of December 31, 2024 decreased by $4,301,173, compared to those of December 31, 2023. The decrease was mainly due to the decrease
in the amount of accounts receivable in the current period as a result of the decrease in sales revenue. 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 customers.

 Inventory

 Our inventory consists of the following:

 Raw materials

 $
 10,610

 %

 $
 32,840

 %

 Finished goods

 304,761

 %

 544,389

 %

 Total

 $
 315,371

 %

 $
 577,229

 %

 The net inventory level as of
December 31, 2024 decreased by $261,858, as compared to the net inventory level as of December 31, 2023, one of the main reasons for the
reduction in inventories was the decline in sales.

 Raw materials decreased by $22,230 as of December 31,
2024, as compared to December 31, 2023.

 Finished goods decreased by $239,628 as of December
31, 2024, as compared to December 31, 2023.

 Net Cash Used In Investing Activities

 For the fiscal year 2024, we used approximately $60.5 million
for purchase of fixed assets.

 For the fiscal year 2023, we used $0 for investing activities.

 Net Cash Used In Financing
Activities

 For the fiscal year 2024 and 2023, we used $0.3 million
to repay finance lease obligations.

 We believe that our available
funds and cash flows generated from operations will be sufficient to meet our anticipated ongoing operating needs for the next twelve
months.

 As of December 31, 2024, we had
approximately $10 million in available cash, all of which is in highly liquid current deposits yielding minimal or no interest. We do
not anticipate paying cash dividends in the foreseeable future.

 We intend to continue to focus
our efforts on the activities of SCHC, SYCI, SHSI and DCHC as these segments continue to expand within the Chinese market.

 We may not be able to identify,
successfully integrate or profitably manage any businesses or business segment we may acquire, or any expansion of our business. An expansion
may involve a number of risks, including possible adverse effects on our operating results, diversion of management's attention,
inability to retain key personnel, risks associated with unanticipated events and the financial statement effect of potential impairment
of acquired intangible assets, any of which could have a materially adverse effect on our condition and results of operations. In addition,
if competition for acquisition candidates or operations were to increase, the cost of acquiring businesses could increase materially.
We may effect an acquisition with a target business which may be financially unstable, under-managed, or in its early stages of development
or growth. Our inability to implement and manage our expansion strategy successfully may have a material adverse effect on our business
and future prospects.

 Going Concern Consideration

 The
consolidated financial statements are prepared on the going concern basis, meaning that the enterprise is expected to realize the
assets and settle the liabilities through normal business operations. However, the going concern of the enterprise relies on many
factors, such as profitable operations, generating operating cash flows, obtaining financing, etc.

 The company assesses its
liquidity by monitoring cash and cash equivalents, as well as operating and capital expenditure commitments. As of December 31,
2024, As of Dec 31, 2024, the Company had current assets of $17.45 million and current liabilities of $17.73 million. As a result,
the deficit was $0.28 million, and it has suffered losses in both the fiscal years of 2024 and 2023 as well. If it is unable to
raise additional funds, it may need to take measures such as cutting administrative and operational cost and save funds.

 If
there are significant doubts regarding the company's ability to continue operations, the company is attempting to alleviate such
concerns through measures such as controlling operating expenses, shifting business focus to revenue-generating activities,
obtaining authorization from domestic banks and other financial institutions, and seeking equity or debt financing. Additionally,
the company will also obtain financial support commitments from related parties. However, these situations still pose significant
doubts regarding the company's ability to continue operations. The financial statements do not consider the potential impact on the
recoverability of assets, classification, and amounts and classification of liabilities if the company is unable to continue
operations.

 Contractual Obligations and Commitments

 We have no significant contractual
obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements.
Additional information regarding our contractual obligations and commitments at December 31, 2024 is provided in the notes to our consolidated
financial statements.

 Material Off-Balance Sheet Arrangements

 We do not currently have any off-balance sheet arrangements
falling within the definition of Item 303(a) of Regulation S-K.

 Critical Accounting Policies and Estimates

 Our Consolidated Financial Statements
are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which requires us
to make judgments, estimates and assumptions. See "Note 1 – Nature of Business and Summary of Significant Accounting Policies,"
in Notes to the Consolidated Financial Statements, which is included in "Item 8. Financial Statements and Supplementary Data,"
which describes our significant accounting policies and methods used in the preparation of our Consolidated Financial Statements. The
methods, estimates and judgments that we use in applying our accounting policies require us to make difficult and subjective judgments,
often as a result of the need to make estimates regarding matters that are inherently uncertain.

 Our most critical estimates include:

 allowance for doubtful accounts, which impacts revenue;

 the valuation of inventory, which impacts gross margins;

 impairment of long-lived assets;

 the valuation and recognition of share-based compensation, which impacts operating expenses; and

 the recognition and measurement of deferred income taxes, which impact our provision for taxes.

 Allowance for Doubtful Accounts

 We make estimates of the uncollectibility
of accounts receivable, especially analyzing accounts receivable and historical bad debts, customer concentrations, customer credit-worthiness,
current economic trends and changes in customer payment terms, when evaluating the adequacy of the allowance for doubtful accounts. Credit
evaluations are undertaken for all major sale transactions before shipment is authorized. On a quarterly basis, we evaluate aged items
in the accounts receivable aging report and provide an allowance in an amount we deem adequate for doubtful accounts. If management were
to make different judgments or utilize different estimates, material differences in the amount of our reported operating expenses could
result.

 Inventory Valuation

 Inventory is stated at the lower
of cost or market, with cost determined on a first-in first-out basis. The carrying value of inventory is reduced for estimated obsolescence
by the difference between its cost and the estimated market value based upon assumptions about future demand. We evaluate the inventory
carrying value for potential excess and obsolete inventory exposures by analyzing historical and anticipated demand. If actual future
demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required in
the future, which could have a material adverse effect on our results of operations.

 Depreciation of Property, Plant and Equipment

 Property, plant and equipment
are stated at cost less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures
for betterment of existing facilities or equipment are capitalized and depreciated using the straight-line method at rates sufficient
to depreciate such costs over the estimated productive lives. All other ordinary repair and maintenance costs are expensed as incurred.
Mineral rights are recorded at cost less accumulated depreciation and any impairment losses. Mineral rights are amortized ratably over
the term of the lease, or the equivalent term under the units of production method, whichever is shorter. In some situations, the life
of the asset may be extended or shortened if circumstances arise that would lead us to believe that the estimated life of the asset has
changed. The life of leasehold improvements may change based on the extension of lease contracts with our landlords. Changes in the estimated
lives of assets will result in an increase or decrease in the amount of depreciation recognized in future periods.

 Impairment of Long Lived Assets

 We periodically evaluate whether
events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant
revision. When such events or circumstances are present, we assess the recoverability of long- lived assets by determining whether the
carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset. In the event
the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess
of the asset's carrying value over its fair value is recorded.

 Allowance on D eferred
Tax Assets

 We evaluate our deferred income
tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred
tax assets based on consideration of all available evidence, both positive and negative, using a "more likely than not" standard.
This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability,
the duration of statutory carry forward periods, our experience with expiring unused tax attributes and tax planning alternatives. In
making such judgments, significant weight is given to evidence that can be objectively verified.

 Stock-based compensation

 We account for stock-based compensation
in accordance with the fair value recognition provisions of U.S. GAAP. We use the Black- Scholes model which requires the input of highly
subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before
exercising them, the estimated volatility of our common stock price over the expected term and the number of options that will ultimately
not complete their vesting requirements. The assumptions for expected volatility and expected term are the two assumptions that significantly
affect the grant date fair value. Changes in expected risk-free rate of return do not significantly impact the calculation of fair value,
and determining this input is not highly subjective.

 We use annualized historical stock
price volatility which is deemed to be appropriate to serve as the expected volatility of our stock price and is assumed to be constant
and prevailing. The expected term represents the weighted-average period that our stock options are expected to be outstanding. The expected
life is based on historical option exercise pattern.

 Recent Accounting Pronouncements

 See "Note 1 – Nature
of Business and Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements in Item 8. Financial
Statements and Supplementary Data for a full description of recent accounting pronouncements including the respective expected dates of
adoption and effects on the consolidated financial statements.

 Item 7A. Quantitative and Qualitative Disclosures about
Market Risk.

 Pursuant to Item 305(e) of Regulation
S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a "smaller reporting
company," as defined by Rule 229.10(f)(1).

 Item 8. Financial Statements and Supplementary Data

 The financial statements and supplementary
data required by this item are included in a separate section of this Report. See "Index to Consolidated Financial Statements"
on Page F-1.

 AND
SUBSIDIARIES

 CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER 31, 2024 and 2023

 C O N T E N T S

 PAGE

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #2729)

 CONSOLIDATED BALANCE SHEETS

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 F6 – F-7

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 F-8 – F-28

 FINANCIAL STATEMENT SCHEDULE:

 SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION

 S-1 – S-3

 F- 1

 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 To the Board of Directors and Stockholders of

 Gulf
Resources, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying
consolidated balance sheet of Gulf Resources, Inc. and subsidiaries (collectively the "Company") as of December 31, 2024,
and the related consolidated statements of comprehensive income (loss), stockholders' equity, and cash flows for the year ended
December 31, 2024, the related notes, and financial statement schedule (collectively referred to as the "consolidated financial
statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2024, and the results of its operations and its cash flows for each of the years in the year ended December
31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit
provides a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated
below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to
be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters
does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they
relate.

 Property, plant and equipment, net

 As described in Note 1 to the
consolidated financial statements, property, plant and equipment consisted of facilities for products, mineral rights, constructions in
process and producing oil and gas properties. The Company reviews the economic benefits associated with the item purchased periodically.
Once the Company determine the likelihood of economic benefits associated is probable, the item would be recognized as an asset.

 We identified determining carrying
amount of property, plant and equipment as a critical audit matter due to the material balance on the balance sheet and significant judgement
and assumptions were used by the Management regarding the timing and ability to contribute to the generation of cash flows, which in turn
led to a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit evidence relating to
Management's assessment of the carrying amount.

 The primary procedures we performed to address this critical
audit matter included the following:

 -
 Reviewed the Company's accounting policies, assumptions and estimates.

 -
 Physical inspection.

 -
 Examined contracts.

 -
 Performed independent analysis for impairment testing.

 /s/ GGF CPA LTD

 We have served as the Company's auditor since
2024.

 Guangzhou, Guangdong, China

 PCAOB NO: 2729

 April 11, 2025

 F- 2

CONSOLIDATED BALANCE SHEETS

2024

2023

 Current Assets

 Cash

 $
 10,075,162

 $
 72,223,894

 Accounts receivable, net

 564,523

 4,865,696

 Inventories, net

 315,371

 577,229

 Prepayments and deposits

 6,376,656

 8,395,290

 Amount due from related parties

 25,040

 —

 Other receivables

 94,074

 7,482

 Total current assets

 17,450,826

 86,069,591

 Non-Current Assets

 Property, plant and equipment, net

 136,143,177

 122,188,023

 Finance lease right-of use assets

 76,868

 83,115

 Operating lease right-of-use assets

 6,169,855

 6,699,784

 Prepaid land leases, net of current portion

 9,615,269

 9,772,170

 Deferred tax assets, net

 —

 1,859,025

 Total non-current assets

 152,005,169

 140,602,117

 Total Assets

 169,455,995

 226,671,708

 Liabilities and Stockholders' Equity

 Current Liabilities

 Accounts payable and accrued expenses

 $
 14,323,458

 $
 8,833,936

 Taxes payable-current

 113,999

 475,630

 Advance from customer

 —

 42,705

 Amount due to related parties

 2,584,808

 2,586,658

 Finance lease liability, current portion

 217,743

 172,625

 Operating lease liabilities, current portion

 491,850

 473,653

 Total current liabilities

 17,731,858

 12,585,207

 Non-Current Liabilities

 Finance lease liability, net of current portion

 1,075,865

 1,312,950

 Operating lease liabilities, net of current portion

 6,941,602

 7,525,255

 Total non-current liabilities

 8,017,467

 8,838,205

 Total Liabilities

 25,749,325

 21,423,412

 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; 11,012,754 and 11,012,754 shares issued; and 10,726,924 and 10,726,924 shares outstanding as of December 31, 2024 and 2023

 Treasury stock; 285,830 shares as of December 31, 2024 and 2023 at cost

)

)

 Additional paid-in capital

 Share to be issued

 —

 Retained earnings unappropriated

 37,358,804

 96,294,256

 Retained earnings appropriated

 Accumulated other comprehensive loss

 ( 20,854,143
)

 ( 18,053,269
)

 Total Stockholders' Equity

 143,706,670

 205,248,296

 Total Liabilities and Stockholders' Equity

 $
 169,455,995

 $
 226,671,708

 The accompanying notes are an integral
part of these consolidated financial statements.

 F- 3

 AND
SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS)

 2024

 2023

 NET REVENUE

 $

 $

 OPERATING COSTS AND EXPENSE

 Cost of revenues

 ( 14,746,741
)

 ( 28,089,953
)

 Sales and marketing expenses

 ( 46,264
)

 ( 59,055
)

 Direct labor and factory overheads

 ( 8,880,643
)

 ( 9,544,675
)

 General and administrative expenses

 ( 5,271,011
)

 ( 4,240,832
)

 TOTAL OPERATING COSTS AND EXPENSE

 ( 28,944,659
)

 ( 41,934,515
)

 LOSS FROM OPERATIONS

 ( 21,283,649
)

 ( 11,890,725
)

 OTHER INCOME (EXPENSE)

 Interest expense

 ( 91,901
)

 ( 105,209
)

 Interest income

 80,258

 250,128

 Other expenses, net

 ( 50,470
)

 —

 Loss on disposal of property, plant and equipment

 ( 29,169,008
)

 —

 Impairment of property, plant and equipment

 ( 6,772,500
)

 —

 Expenditure on water pollution treatment

 —

 ( 46,510,856
)

 INCOME BEFORE INCOME TAXES

 ( 57,287,270
)

 ( 58,256,662
)

 INCOME TAX EXPENSE

 ( 1,648,182
)

 ( 3,538,617
)

 NET LOSS

 $
)

 $
)

 COMPREHENSIVE INCOME (LOSS):

 NET LOSS

 $
)

 $
)

 OTHER COMPREHENSIVE (LOSS) INCOME

 - Foreign currency translation adjustments

 ( 2,800,874
)

 ( 5,025,980
)

 TOTAL COMPREHENSIVE LOSS

 $
 ( 61,736,326
)

 $
 ( 66,821,259
)

 BASIC AND DILUTED LOSS PER SHARE

 $
 ( 5.49
)

 $
 ( 5.92
)

 BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:

 10,726,924

 10,435,965

 The accompanying notes are an integral
part of these consolidated financial statements.

 F- 4

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY

 YEARS ENDED DECEMBER 31, 2024 AND 2023

 Common
 stock

 Number of
 shares issued

 Number of
 shares outstanding

 Number of
 treasury stock

 Amount

 Treasury

stock

 Additional
 paid-in capital

 Retained
 earnings unappropriated

 Retained
 earnings appropriated

 Accumulated

other comprehensive Income(loss)

 Total

 BALANCE AT JANUARY 1, 2023

 10,717,754

 10,431,924

 285,830

 24,476

)

 101,237,059

 $
 158,089,535

 $

 $
 ( 13,027,289
)

 $
 271,618,205

 Restricted shares issued for services

 295,000

 295,000

 —

 —

 451,203

 —

 —

 —

 451,350

 Currency translation adjustment

 —

 —

 —

 —

 —

 —

 —

 —

 ( 5,025,980
)

 ( 5,025,980
)

 Net loss for year ended December 31, 2023

 —

 —

 —

 —

 —

 —

)

 —

 —

)

 BALANCE AT DECEMBER 31, 2023

 11,012,754

 10,726,924

 285,830

)

 $
 96,294,256

 $

 $
 ( 18,053,269
)

 $
 205,248,296

 Common stock

 Accumulated

 Additional

 Retained

 Retained

 other

 of shares

 of shares

 of treasury

 Treasury

 Share to

 paid-in

 earnings

 earnings

 comprehensive

 issued

 outstanding

 stock

 Amount

 stock

 be issued

 capital

 unappropriated

 appropriated

 Income(loss)

 Total

 BALANCE AT JANUARY 1, 2024

 11,012,754

 10,726,924

 285,830

)

 —

 $
 96,294,256

 $

 $
 ( 18,053,269
)

 $
 205,248,296

 Restricted shares to be issued for service

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Currency translation adjustment

 —

 —

 —

 —

 —

 —

 —

 —

 ( 2,800,874
)

 ( 2,800,874
)

 Net loss for year ended December 31, 2024

 —

 —

 —

 —

 —

 —

 —

)

 —

 —

)

 BALANCE AT
DECEMBER
 31, 2024

 11,012,754

 10,726,924

 285,830

)

 $
 37,358,804

 $

 $
 ( 20,854,143
)

 $
 143,706,670

 Common Stock

 Treasury Stock

 Additional Paid-In Capital

 Retained Earnings Unappropriated

 Accumulated Other Comprehensive Income (Loss)

 Share to be Issued

 The accompanying notes are an integral
part of these consolidated financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH
FLOWS

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss

 $
)

 $
)

 Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 Amortization on capital lease

 91,901

 96,914

 Depreciation and amortization

 18,007,875

 27,139,589

 Deferred tax asset

 1,632,978

 3,215,727

 Stock-based compensation expense

 451,350

 Bad debt expense

 1,669,002

 Impairment of inventory

 989,035

 230,776

 Impairment of property plant and equipment

 6,772,500

 —

 Amortization of right-of-use asset

 877,809

 887,603

 Loss on disposal of property, plant and equipment

 29,169,008

 —

 Changes in assets and liabilities

 Accounts receivable

 4,264,140

 410,057

 Inventories

 ( 733,302
)

 769,543

 Prepayment and deposits

 248,817

 ( 4,268,797
)

 Advance from customers

 ( 42,471
)

 42,945

 Other receivables

 ( 87,515
)

 ( 6,849
)

 Accounts and Other payable and accrued expenses

 ( 2,191,652
)

 1,114,904

 Taxes payable

 ( 357,954
)

 ( 213,480
)

 Lease liabilities

 ( 894,351
)

 ( 827,285
)

 Net cash provided by (used in) operating activities

 675,068

 ( 32,751,851
)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of property, plant and equipment

 ( 60,526,213
)

 —

 Interest-free loan lent to related parties

 ( 25,275
)

 —

 Net cash used in investing activities

 ( 60,551,488
)

 —

 CASH FLOWS FROM FINANCING ACTIVITIES

 Repayment of finance leases obligation

 ( 264,094
)

 ( 267,810
)

 Proceeds from interest-free loan from a related party

 14,854

 —

 Net cash used in financing activities

 ( 249,240
)

 ( 267,810
)

 EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 ( 2,023,072
)

 ( 2,982,659
)

 NET DECREASE IN CASH AND CASH EQUIVALENTS

 ( 62,148,732
)

 ( 36,002,320
)

 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

 72,223,894

 108,226,214

 CASH AND CASH EQUIVALENTS - END OF YEAR

 $
 10,075,162

 $
 72,223,894

 F- 6

 CONSOLIDATED STATEMENTS OF CASH
FLOWS (CONTINUED)

 2024

 2023

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 Cash paid during the year for:

 Paid for taxes

 $
 1,520,292

 $
 6,413,065

 Interest on finance lease obligation

 $
 91,901

 $
 96,914

 Paid for Flood Prevention Project

 $
 —

 $
 48,384,711

 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES

 The accompanying notes are an integral
part of these consolidated financial statements.

 F- 7

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

 NOTE 1 – NATURE OF BUSINESS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 (a) Basis of Presentation and Consolidation

 The accompanying audited consolidated
financial statements have been prepared by Gulf Resources, Inc. ("Gulf Resources"). a Nevada corporation and its subsidiaries
(collectively, the "Company").

 The consolidated financial statements
include the accounts of Gulf Resources, Inc. and its wholly-owned subsidiary, Upper Class Group Limited, a company incorporated in the
British Virgin Islands, which owns 100% of Hong Kong Jiaxing Industrial Limited, a company incorporated in Hong Kong ("HKJI").
HKJI owns 100% of Shouguang City Haoyuan Chemical Company Limited ("SCHC") which owns 100% of Shouguang Yuxin Chemical Industry
Co., Limited ("SYCI"),Daying County Haoyuan Chemical Company Limited ("DCHC") and Shouguang Hengde Salt Industry
Co. Ltd. ("SHSI"). All material intercompany transactions have been eliminated on consolidation.

 (b) Going Concern Consideration

 The consolidated financial statements are prepared on the
going concern basis, meaning that the enterprise is expected to realize the assets and settle the liabilities through normal business
operations. However, the going concern of the enterprise relies on many factors, such as profitable operations, generating operating cash
flows, obtaining financing, etc.

 The company assesses its
liquidity by monitoring cash and cash equivalents, as well as operating and capital expenditure commitments. As of December 31, 2024,
As of Dec 31, 2024, the Company had current assets of $ 17.45 million and current liabilities of $ 17.73 million. As a result, the deficit
was $ 0.28 million, and it has suffered losses in both the fiscal years of 2024 and 2023 as well. If it is unable to raise additional funds,
it may need to take measures such as cutting administrative and operational cost and save funds.

 If there are significant doubts regarding the company's ability to continue operations, the company is attempting to alleviate such concerns
through measures such as controlling operating expenses, shifting business focus to revenue-generating activities, obtaining authorization
from domestic banks and other financial institutions, and seeking equity or debt financing. Additionally, the company will also obtain
financial support commitments from related parties. However, these situations still pose significant doubts regarding the company's ability
to continue operations. The financial statements do not consider the potential impact on the recoverability of assets, classification,
and amounts and classification of liabilities if the company is unable to continue operations.

 (c) Nature of Business

 The Company
manufactures and trades bromine through its wholly-owned subsidiary, Shouguang City Haoyuan Chemical Company Limited
("SCHC") manufactures and trades crude salt through its wholly owned subsidiary, SHSI; and manufactures chemical
products for use in the oil industry, pesticides, paper manufacturing industry and for human and animal antibiotics through its
wholly- owned subsidiary, Shouguang Yuxin Chemical Industry Co., Limited ("SYCI") in the People's Republic of
China ("PRC"). DCHC was established to further explore and develop natural gas and brine resources (including bromine
and crude salt) in the PRC. DCHC's business commenced trial operation in January 2019 but suspended production temporarily in
May 2019 as required by the government to obtain project approval (see Note 1 (c)(iii)).

 (i)
 Bromine and Crude Salt Segments

 In February 2019, the Company
received a notification from the local government of Yangkou County that its Factory No. 1, No. 4, No. 7 and No. 9 passed inspection and
could resume operations. In April 2019, Factory No.1, and Factory No.7 resumed operation.

 On November 25, 2019, the government
of Shouguang City issued a notice ordering all bromine facilities in Shouguang City, including the Company's bromine facilities,
including Factory No. 1 and Factory No. 7, to temporarily stop production from December 16, 2019 to February 10, 2020. Subsequently, due
to the coronavirus outbreak in China, the local government ordered those bromine facilities to postpone the commencement of production.
Subsequently, the Company received an approval dated February 27, 2020 issued by the local governmental authority allowing the Company
to resume production after the winter temporary closure. Further, the Company received another approval from the Shouguang Yangkou People's
Government dated March 5, 2020 allowing the Company to resume production at its bromine factories No. 1, No. 4, No.7 and No. 9 in order
to meet the needs of bromide products for epidemic prevention and control (the "March 2020 Approval"). The Company's
Factories No. 1 and No. 7 commenced trial production in mid-March 2020 and commercial production on April 3, 2020 and its Factories No.
4 and No. 9 commenced commercial production on May 6, 2020. The Company received verbal notification from the government regarding Factory
No. 8, allowing it to recommence production in August 2022. Factory No. 8 began contributing revenue in the fourth quarter 2022.

 The Company is awaiting governmental
approval for Factories No. 2 and No. 10. To our knowledge, the government is finalizing plans for all mining areas, including flood prevention
measures. As a result, we may be required to make certain modifications to our existing wells and aqueducts prior to commencement of operations
of these factories in order to satisfy the local government's requirements.

 Pursuant to the notification from
the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 10, 2022 until February
1, 2023 8:00 AM China Time. To comply with such notification, the Company had temporarily stopped production at its bromine facilities
during the aforesaid period and reopened the operating bromine and crude salt factories in February, 2023 as planned.

 In April 2022, Shouguang Hengde
Salt Industry Co. Ltd, our subsidiary, was incorporated in Shandong Province, China, for crude salt production and trading. This subsidiary
was created in response to a new government policy that required bromine and crude salt companies to have separate registrations. The
creation of this subsidiary and the separation of bromine and crude salt does not impact sales or overall profits. However, the establishment
of this subsidiary has resulting in a reallocation of costs between bromine and crude salt.

 F- 8

 (ii)
 Chemical Segment

 On November 24, 2017, the Company
received a letter from the Government of Yangkou County, Shouguang City notifying the Company to relocate its two chemical production
plants located in the second living area of the Qinghe Oil Extraction to the Bohai Marine Fine Chemical Industrial Park ("Bohai
Park"). This is because the two plants are located in a residential area and their production activities will impact the living
environment of the residents. This is as a result of the country's effort to improve the development of the chemical industry, manage
safe production and curb environmental pollution accidents effectively, and ensure the quality of the living environment of residents.
All chemical enterprises which do not comply with the requirements of the safety and environmental protection regulations will be ordered
to shut down.

 In December 2017, the Company
secured from the government the land use rights for its chemical plants located at the Bohai Park and in June 2018, the Company presented
a completed construction design draft and other related documents to the local authorities for approval. In January 2020, the Company
received the environmental protection approval by the government of Shouguang City, Shandong Province for the proposed Yuxin Chemical
factory. The Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June
2020 and basically completed the civil works by the end of June 2021. On November 15, 2021, the Company announced that due to the supply
chain issues as well as the electric restrictions in China, the delivery of some equipment, the equipment installation and testing and
beginning trial production at the chemical factory had been delayed. On February 22, 2022, the Company announced that discussions with
the government have convinced management that the electricity restrictions are being eased. Accordingly, the Company has contacted its
suppliers and will have the remainder of the equipment produced and delivered, so the Company can complete installation and begin testing
and trial production.

 The Company believes this
relocation process will cost approximately $ 69
 million in total. The Company incurred relocation costs comprising prepaid land lease, professional fees related to the design
of the new chemical factory, and progress payments and deposits for the construction of the new factory building in the amount of $ 45,584,344
 and $ 45,584,344,
which were recorded in the prepaid land leases, prepayments and deposits and property, plant and equipment in the consolidated balance
sheets as of December 31, 2024 and 2023.

 (iii)
 Natural Gas Segment

 In January 2017, the Company completed
the first brine water and natural gas well field construction in Daying located in Sichuan Province, China, and commenced trial production
in January 2019. On May 29, 2019, the Company received a verbal notice from the government of Tianbao Town, Daying County, Sichuan Province,
whereby the Company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water
project, and approvals for safety production inspection, environmental protection assessment, and to solve the related land issue. Until
these approvals have been received, the Company has to temporarily halt trial production at its natural gas well in Daying. In compliance
with the Chinese government new policies, the Company is also required to obtain an exploration license and a mining license for bromine
and natural gas, respectively. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform
of Mineral Resources Management (Trial) promulgated by the Ministry of Natural Resources of PRC on January 9, 2020, which came into effect
on May 1, 2020, privately owned enterprises are allowed to participate in the natural gas production. The Company plans to proceed with
its applications for the natural gas and brine project approvals with related government departments until the governmental planning has
been finalized.

 (d) Use of Estimates

 The Company's consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and
this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its
estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The most
significant accounting estimates with regard to these consolidated financial statements that require the most significant and subjective
judgments include, but are not limited to, useful lives of property, plant and equipment, recoverability of long-lived assets, determination
of impairment losses, assessment of market value of inventories and provision for inventory obsolescence, allowance for doubtful accounts,
recognition and measurement of deferred income taxes, valuation allowance for deferred tax assets, and assumptions used for the valuation
of share based payments. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

 F- 9

 GULF RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS DECEMBER 31, 2024

 (e) Cash and Cash Equivalents

 Cash and cash equivalents consist
of all cash balances and highly liquid investments with original maturities of three months or less. Because of short maturity of these
investments, the carrying amounts approximate their fair values.

 (f) Accounts receivable and Allowance for Doubtful Accounts

 Accounts receivable is stated
at cost, net of allowance for doubtful accounts. The normal credit term extended to customers ranges between 90 and 240 days. The company
reviews all receivables that exceed the term. The Company establishes an allowance for doubtful accounts based on management's assessment
of the collectability of trade and other receivables. A considerable amount of judgment is required in assessing the amount of allowance
and the Company considers the historical level of credit losses. The Company makes judgments about the credit worthiness of each customer
based on ongoing credit evaluations, and monitors current economic trends that might impact the level of credit losses in the future.
If the financial condition of the customer begins to deteriorate, resulting in their inability to make payments within credit term provided,
an allowance may be required.

 As of December 31, 2024 and December
31, 2023, the provision for doubtful debts was $ 29,711 and $ 25,060. The provision for doubtful accounts in the consolidated statements
of comprehensive (loss) income for the years ended December 31, 2024 is $ 5,069.

 (g) Concentration of Credit Risk

 The Company is exposed to credit
risk in the normal course of business, primarily related to accounts receivable and cash and cash equivalents. Substantially all of the
Company's cash and cash equivalents are maintained with financial institutions in the PRC, namely, Industrial and Commercial Bank
of China Limited, China Merchants Bank Company Limited and Sichuan Rural Credit Union, which are not insured or otherwise protected. The
Company placed $ 10,075,162 and $ 72,223,894 with these institutions as of December 31, 2024 and 2023, respectively. The Company has not
experienced any losses in such accounts in the PRC.

 Concentrations of credit risk
with respect to accounts receivable exists as the Company sells a substantial portion of its products to a limited number of customers.
However, such concentrations of credit risks are limited since the Company performs ongoing credit evaluations of its customers'
financial condition and extends credit terms as and when appropriate.

 (h) Inventories

 Inventories are stated at the
lower of cost, determined on a first-in first-out cost basis, or net realizable value. Costs of work-in-progress and finished goods comprise
direct materials, direct labor and an attributable portion of manufacturing overhead. Net realizable value is based on estimated selling
price less costs to complete and selling expenses.

 (i) Advances to suppliers, net

 Advances to suppliers are stated at the original amount less
an allowance for doubtful account.

 Advances to supplier primarily consists of prepayments for
purchase of cryptocurrency mining machines and standardized computing equipment. The Company reviews its advance to suppliers on a periodic
basis and determines the adequacy of provision when amounts outstanding are not likely to be collected in cash or utilized against receive
of products. An allowance for doubtful is recorded in the period in which the Company cash collection or receipts of products is remote.

 F- 10

 (j) Property, Plant and Equipment

 Property, plant and equipment
are stated at cost less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures
for betterment of existing facilities or equipment are capitalized and depreciated, when available for intended use, using the straight-line
method at rates sufficient to depreciate such costs less 5% residual value over the estimated productive lives. All other ordinary repair
and maintenance costs are expensed as incurred.

 Mineral rights are recorded at
cost less accumulated depreciation and any impairment losses. Mineral rights are amortized ratably over the term of the lease, or the
equivalent term under the units of production method, whichever is shorter.

 Construction in process primarily
represents direct costs of construction of property, plant and equipment. Costs incurred are capitalized and transferred to property,
plant and equipment upon completion and depreciation will commence when the completed assets are placed in service.

 The Company's depreciation
and amortization policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

 Basis of Presentation and Summary of
Significant Accounting Policies - Schedule of Property, Plant and Equipment Useful Life

 Minimum
 Maximum

 Useful life

 (in years)

 Buildings (including salt pans)

 8 - 20

 Plant and machinery (including protective shells, transmission channels and ducts)

 3 - 8

 Motor vehicles Motor Vehicles

 Furniture, fixtures and equipment

 3 - 8

 Property, plant and equipment
under the finance lease are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, the term
of the lease, which is 20 years.

 Producing oil and gas properties
are depreciated on a unit-of-production basis over the proved developed reserves. Common facilities that are built specifically to service
production directly attributed to designated oil and gas properties are depreciated based on the proved developed reserves of the respective
oil and gas properties on a pro-rata basis. Common facilities that are not built specifically to service identified oil and gas properties
are depreciated using the straight-line method over their estimated useful lives. Costs associated with significant development projects
are not depreciated until commercial production commences and the reserves related to those costs are excluded from the calculation of
depreciation.

 (k) Asset Retirement Obligation

 The Company follows Financial
Accounting Standards Board Accounting Standards Codification ("FASB ASC"), which established a uniform methodology for accounting
for estimated reclamation and abandonment costs. FASB ASC 410 requires the fair value of a liability for an asset retirement obligation
to be recognized in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred. When
the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the
related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the
amount of cash paid, a gain or loss upon settlement is recorded.

 F- 11

 Currently, there are no reclamation
or abandonment obligations associated with the land being utilized for exploitation by the bromine and crude salt factories. Also, for
the two chemical plants that are to be relocated, currently, there are no obligations to restore the land to its original condition.

 (l) Recoverability of Long-lived Assets

 In accordance with Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360-10-35 "Impairment or
Disposal of Long-lived Assets", long-lived assets to be held and used are analyzed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be fully recoverable or that the useful lives of those assets are
no longer appropriate. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible
impairment.

 The Company determines the existence
of such impairment by measuring the expected future cash flows (undiscounted and without interest charges) and comparing such amount to
the carrying amount of the assets. An impairment loss, if one exists, is then measured as the amount by which the carrying amount of the
asset exceeds the discounted estimated future cash flows. Assets to be disposed of are reported at the lower of the carrying amount or
fair value of such assets less costs to sell. Asset impairment charges are recorded to reduce the carrying amount of the long-lived asset
that will be sold or disposed of to their estimated fair values. Charges for the asset impairment reduce the carrying amount of the long-lived
assets to their estimated salvage value in connection with the decision to dispose of such assets.

 For the year ended December 31, 2024 and 2023, the Company
determined that the impairment of long-lived assets was $ 6,772,500 and $ nil.

 (m) Retirement Benefits

 Pursuant to the relevant laws and
regulations in the PRC, the Company participates in a defined contribution retirement plan for its employees arranged by a governmental
organization. The Company makes contributions to the retirement plan at the applicable rate based on the employees' salaries. The
required contributions under the retirement plans are charged to the consolidated statement of comprehensive income (loss) on an accrual
basis when they are due. The Company's contributions totaled $ 535,475 and $ 691,033 for the years ended December 31, 2024 and 2023,
respectively.

 F- 12

 (n) Mineral Rights

 The Company follows FASB ASC 805
"Business Combinations" that certain mineral rights are considered tangible assets and that mineral rights should be accounted
for based on their substance. Mineral rights are included in property, plant and equipment.

 (o) Leases

 The Company determines if an arrangement
is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease
liabilities in the consolidated balance sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities
in the consolidated balance sheets.

 ROU assets represent the Company's
right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments
arising from the lease. Operating lease and finance lease ROU assets and liabilities are recognized at January 1, 2019 based on the present
value of lease payments over the lease term discounted using the rate implicit in the lease. 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 has elected not to recognize
operating lease ROU assets and liabilities arising from short-term lease.

 (p) Basic and Diluted Earnings per Share of Common Stock

 Basic earnings per common share
are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using
weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares
that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e. the exercise prices of the
outstanding stock options were greater than the market price of the common stock. Anti-dilutive common stock equivalents which were excluded
from the calculation of number of dilutive common stock equivalents amounted to 0 and 0 shares for the years ended December 31, 2024 and
2023, respectively. These awards could be dilutive in the future if the market price of the common stock increases and is greater than
the exercise price of these awards.

 (q) Reporting Currency and Translation

 The financial statements of the
Company's foreign subsidiaries are measured using the local currency, Renminbi ("RMB"), as the functional currency;
whereas the functional currency and reporting currency of the Company is the United States dollar ("USD" or "$").

 F- 13

 As such, the Company uses the
"current rate method" to translate its PRC operations from RMB into USD, as required under FASB ASC 830 "Foreign Currency
Matters". The assets and liabilities of its PRC operations are translated into USD using the rate of exchange prevailing at the
balance sheet date. The capital accounts are translated at the historical rate. Adjustments resulting from the translation of the balance
sheets of the Company's PRC subsidiaries are recorded in stockholders' equity as part of accumulated other comprehensive income
(loss). The statement of comprehensive income (loss) is translated at average rate during the reporting period. Gains or losses resulting
from transactions in currencies other than the functional currencies are recognized in net loss for the reporting periods as part of general
and administrative expense. The statement of cash flows is translated at average rate during the reporting period, with the exception
of the consideration paid for the acquisition of business which is translated at historical rates.

 (r) Revenue Recognition

 Net revenue is net of discount
and value added tax and comprises the sale of bromine, crude salt and chemical products. Revenue is recognized at a point time when the
control of the promised goods is transferred to the customers in an amount that reflects the consideration that the Company expects to
receive from the customers in exchange for those goods. The acknowledgement of receipt of goods by the customers is when control of the
product is deemed to be transferred. Invoicing occurs upon acknowledgement of receipt of the goods by the customers. Customers have no
rights to return the goods upon acknowledgement of receipt of goods. Customers typically pay after the Company delivers and transfers
the products to them in accordance to terms set forth in their contract. Revenue from contracts with customers is disaggregated in Note
18.

 (s) Income Taxes

 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 not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance
also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an
uncertain tax position may be recognized if it is "more likely than not" that the position is sustainable based solely on
its technical merits. Interests and penalties associated with unrecognized tax benefits are included within the (benefit from) provision
for income tax in the consolidated statement of comprehensive income (loss).

 (t) Exploration Costs

 Exploration costs, which included
the cost of researching for appropriate places to drill wells and the cost of well drilling in search of potential natural brine or other
resources, are charged to the income statement as incurred. Once the commercial viability of a project has been confirmed, all subsequent
costs are capitalized.

 F- 14

 For oil and gas properties, the
successful efforts method of accounting is adopted. The Company carries exploratory well costs as an asset when the well has found a sufficient
quantity of reserves to justify its completion as a producing well and where the Company is making sufficient progress assessing the reserves
and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expenses. Exploratory
wells that discover potentially economic reserves in areas where major capital expenditure will be required before production would begin
and when the major capital expenditure depends upon the successful completion of further exploratory work remain capitalized and are reviewed
periodically for impairment.

 (u) Fair Value Measurement

 The Company applies Accounting
Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a
framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.

 ASC Topic 820 defines fair value
as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date
in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability.

 ASC Topic 820 specifies a hierarchy
of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy
is as follows:

 Level 1 inputs to the valuation methodology
are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 Level 2 inputs to the valuation
methodology include quoted prices for identical or similar assets and liabilities in active markets or in inactive markets, and inputs
that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 Level 3 inputs to the valuation methodology
are unobservable and significant to the fair value.

 The carrying amounts of the Company's
financial instruments approximate their fair values because of their short-term nature. The Company's financial instruments include
cash, accounts receivable, amounts due to related parties, accounts payable and other current payables. There were no material unrecognized
financial assets and liabilities as of December 31, 2024 and 2023.

 (v) 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 reasonably able to be estimated. Such estimates may be based on advice from third parties or
on management's judgment, as appropriate. Revisions to accruals are reflected in income (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.

 (w) Stock-based Compensation

 The Company accounts for stock-based
compensation under the provisions of FASB ASC 718, Compensation Stock Compensation, which requires the measurement and recognition
of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The
Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of
the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.
In June 2018, the FASB issued ASU No. 201807, Compensation - Stock Compensation (Topic 7 I8), Improvements to Nonemployee
Share-Based Payment Accounting. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions
for acquiring goods and services from nonemployees. Prior to this Update, Topic 718 applied only to share-based transactions to employees.
Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the
scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity 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.

 (x) New Accounting Pronouncements

 Recent accounting pronouncements adopted

 In June 2016, the FASB
issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial assets that
have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred
losses for financial assets. For public entities, the amendments are effective for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years. For the Company which is a smaller reporting company, ASU No. 2019-10 extends
the effective dates for two years. The Company had evaluated the effect of the adoption of this standard on the consolidated
financial statements and related disclosures. And the Company had adopted this standard beginning January 1, 2024.

 Recently Issued Accounting Pronouncements Not Yet
Adopted

 There were no recently issued accounting pronouncements
not yet adopted for the year ended December 31, 2024.

 F- 15

 NOTE 2 – ACCOUNTS RECEIVABLE, NET

2024

2023

 Accounts receivable

 $
 594,234

 $
 4,890,756

 Allowance for doubtful debt

 ( 29,711
)

 ( 25,060
)

 Accounts receivable, net

 $
 564,523

 $
 4,865,696

 The overall accounts receivable
balance as of December 31, 2024 decreased by $ 4,301,173
 compared to those of December 31, 2023. The decrease in accounts receivable is due to the decrease in sales revenue. 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

2024

2023

 Raw materials

 $
 10,610

 $
 32,840

 Finished goods

 1,545,521

 804,046

 Less: impairment

 ( 1,240,760
)

 ( 259,657
)

 Inventory, net

 $
 315,371

 $
 577,229

 The Company recorded impairment
charges for slow moving inventory in the amounts of $ 989,035 and $ 230,776 for the years ended December 31, 2024 and 2023.

 NOTE 4 – PREPAYMENTS
AND DEPOSITS, NET

 Prepayments and deposits consisted of the following:

 Prepayments and
Deposits, Net - Schedule of Prepayments and Deposits, Net

 Prepayments and deposits

 $

 8,025,110

 $

 8,395,290

 Provision for impairment

 ( 1,648,454)

 -

 Prepayments and deposits, net

 $

 6,376,656

 $

 8,395,290

 For the year December 31, 2024 and 2023, the Company recorded
provision of $ 1,663,933 and nil for the prepayments and deposits.

 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 of each anniversary
date. These leases have no purchase option at the end of the lease term and were classified as operating leases prior to and as of January
1, 2019 when the new lease standard was adopted. Prior to January 2019, the prepaid land lease was amortized on a straight line basis.
As of January 1, 2019, all the leases in which term has commenced and were in use were classified as operating lease right-of-use assets
("ROU"). See Note 7.

 In December 2017, the
Company paid a one lump sum upfront amount of $ 8,846,282 for a 50-year lease of a parcel of land at Bohai Marine Fine Chemical
Industrial Park ("Bohai") for the new chemical factory to be built. There is no purchase option at the end of the lease
term. This was classified as an operating lease prior to and as of January 1, 2019. The land use certificate was issued on October
25, 2019. The lease term expires on August 12, 2069. The amount paid was recorded as prepaid land leases, net of current portion in
the consolidated balance sheet as of December 31 2024 and 2023. As of December 31, 2024, the prepaid land lease increased to
$ 9,204,556 due to an additional amount paid for stamp duty and related land use rights fees. Amortization of this prepaid land lease
will commence when the chemical factory is built and placed in service.

 F- 16

 NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

 Property, plant and equipment, net consist of the following:

 Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment

2024

2023

 At cost:

 Mineral rights

 $
 2,682,882

 $
 2,722,997

 Buildings

 68,476,868

 29,863,200

 Plant and machinery

 143,839,420

 185,738,906

 Furniture, fixtures and office equipment

 1,435,090

 1,456,547

 Motor vehicles

 124,215

 126,072

 Construction in process

 10,155,642

 10,307,491

 Total

 226,714,117

 230,215,213

 Less: Accumulated depreciation and amortization

 ( 83,826,560
)

 ( 108,027,190
)

 Impairment

 ( 6,744,380
)

 —

 Net book value

 $
 136,143,177

 $
 122,188,023

 The Company has certain
buildings and salt pans erected on parcels of land located in Shouguang, PRC, and such parcels of land are collectively owned by
local townships or the government authority. The Company has not been able to obtain property ownership certificates over these
buildings and salt pans. The aggregate carrying values of these properties situated on parcels of the land are $ 50,219,026 and
$ 8,346,742 as at December 31, 2024 and December 31, 2023, respectively.

31, 2024, depreciation and amortization expense totaled $ 17,989,747
 of which $ 10,864,807, $ 6,806,372
 and $ 318,568
were recorded in direct labor and factory overheads incurred cost of net revenue,
 during plant shutdown, and administrative expenses respectively.

 During the year ended
December 31, 2023, depreciation and amortization expense totaled $ 27,064,404 of
which $ 15,626,277, $ 4,113,962 and
$ 7,324,165 were
recorded in direct labor and factory overheads incurred cost of net revenue, during
plant shutdown, and administrative expenses respectively.

 NOTE 7 – FINANCE LEASE RIGHT-OF-USE ASSETS

 Property, plant and equipment under finance leases, net consist of the
following:

 Finance Lease Right-Of-Use Assets - Schedule of Property,
Plant and Equipment Under Finance Leases

2024

2023

 At cost:

 Buildings Buildings

 $
 208,473

 $
 211,590

 Total

 208,473

 211,590

 Less: Accumulated depreciation and amortization

 ( 131,605
)

 ( 128,475
)

 Net book value

 76,868

 83,115

 F- 17

 The above buildings erected on
parcels of land located in Shouguang, PRC, are collectively owned by local townships. The Company has not been able to obtain property
ownership certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of
land.

31, 2024, depreciation and amortization expense totaled $ 5,068, respectively, which was recorded in direct labor and factory overheads
incurred during plant shutdown.

31, 2023, depreciation and amortization expense totaled $ 61,981, respectively, which was recorded in direct labor and factory overheads
incurred during plant shutdown.

 NOTE 8 – OPERATING LEASE RIGHT–OF-USE
ASSETS

 The Company has the rights to use
certain parcels of land located in Shouguang, the PRC, through lease agreements signed with local townships or the government authority.
For parcels of land that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels
of land of which the Company cannot obtain land use rights certificates covers a total of approximately 34.95 square kilometers with an
aggregate operating lease right-of-use assets amount of $ 7,318,031 as at December 31, 2024.

 As of December 31, 2024, the total operating lease ROU assets
was $ 6,169,855.

 The total operating lease cost for the years ended December
31, 2024 and 2023 was $ 877,809 and $ 887,603.

 NOTE 9 – PAYABLE AND ACCRUED EXPENSES

 Payable and accrued expenses consist of the following:

 Payable and Accrued
Expenses - Schedule of Accounts Payable and Accrued Liabilities

2024

2023

 Accounts payable

 $
 30,003

 $
 206,984

 Salary payable

 323,655

 216,253

 Social security insurance contribution payable

 169,858

 172,398

 Other payable-related party

 —

 88,086

 Accrued expense for construction

 5,310,040

 5,389,437

 Accrued expense-others

 8,489,902

 2,760,778

 Total

 $
 14,323,458

 $
 8,833,936

 Accrued expense-others mainly include the purchase
of the unpaid portion of salt Pans of $ 7,878,182, and others.

 NOTE 10 – RELATED PARTY TRANSACTIONS

 On September 25, 2012,
the Company purchased five floors of a commercial building in the PRC, through SYCI, from Shandong Shouguang Vegetable Seed Industry
Group Co., Ltd. (the "Seller") at a cost of approximately $ 5.7 million
in cash, of which Mr. Ming Yang, the Chairman of the Company, had a 99 %
equity interest in the Seller that time. During the first quarter of 2018, the Company entered into an agreement with the Seller, a
related party, to provide property management services for an annual amount of approximately $ 87,927 for five
years from January 1, 2023 to December 31, 2027. The expense associated with this agreement for the year ended December 31,
2024 was $ 87,821.
The expense associated with this agreement for the year ended December 31, 2023 was $ 88,049.

 F- 18

 NOTE 10 – RELATED PARTY TRANSACTIONS – Continued

 a) Related parties

 Name of related parties

 Position

 Yang Ming

 Shareholder

 LiuXiaoBin

 Chief Executive Officer

 LiMin

 Chief Financial Officer

 MiaoNaiHui

 Chief Operating Officer

 Chengdu Dianjinshi Culture media Co., LTD

 Affiliated with company officers

 b)

2024

2023

 Amount due to related parties:

 Yang Ming

 $
 410,350

 $
 416,484

 LiuXiaoBin

 887,214

 887,214

 LiMin

 636,264

 641,480

 MiaoNaiHui

 650,980

 641,480

 Total

 2,584,808

 2,586,658

 c)

2024

2023

 Due from related party:

 Chengdu Dianjinshi Culture media Co., LTD

 $
 25,040

 —

 Total

 $
 25,040

 $
 —

 NOTE 11 – TAXES PAYABLE

2024

2023

 Land use tax payable

 $
 19,318

 $
 24,689

 Value added tax and other taxes payable

 94,681

 450,941

 Total

 $
 113,999

 $
 475,630

 NOTE 12 – LEASE LIABILITIES - FINANCE AND OPERATING LEASE

 The components of finance lease liabilities
were as follows:

 Lease Liabilities - Finance and Operating
Lease - Schedule of Finance and Operating Leased Liabilities

 Imputed Interest rate

2024

2023

 Total finance lease liability

 6.7 %

 $
 1,293,608

 $
 1,485,575

 Less: Current portion

 ( 217,743
)

 ( 172,625
)

 Finance lease liability, net of current portion

 $
 1,075,865

 $
 1,312,950

 Interest expenses from capital lease obligations amounted
to $ 91,901 and $ 96,914 for the years ended December 31, 2024 and 2023, respectively, which were charged to the consolidated statement
of comprehensive income (loss).

 F- 19

 The components of operating lease liabilities as follows:

 Discount rate

2024

2023

 Total Operating lease liabilities

 4.89 %

 $
 7,433,452

 $
 7,998,908

 Less: Current portion

 ( 491,850
)

 ( 473,653
)

 Operating lease liabilities, net of current portion

 $
 6,941,602

 $
 7,525,255

 The weighted average remaining
operating lease term at December 31, 2024 was 17.3 years and the weighted average discounts rate was 4.89 %, This discount rates used are
based on the base rate quoted by the People's Bank of China and vary with the remaining term of the lease. Lease payments for the
years ended December 31, 2024 and 2023, respectively, were $ 823,608 and $ 824,572.

 Maturities of lease liabilities were as follows:

 Lease Liabilities - Finance and Operating
Lease - Schedule of Financing and Operating Lease Maturities

 Finance lease

 Operating Lease

 Payable within:

 the next 12 months

 $

 $
 821,511

 the next 13 to 24 months

 825,689

 the next 25 to 36 months

 833,255

 the next 37 to 48 months

 837,767

 the next 49 to 60 months

 845,843

 thereafter

 8,280,354

 Total

 1,566,654

 12,444,419

 Less: Amount representing interest

 ( 273,046
)

 ( 5,010,967
)

 Present value of net minimum lease payments

 $
 1,293,608

 $
 7,433,452

 NOTE 13 –– EQUITY

 Restricted Shares

 A restricted stock award ("RSA") is an award of common shares that is subject
to certain restrictions during a specified period.

 Restricted stock awards are independent
of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee
cannot transfer the shares before the restricted shares vest. Shares of nonvested restricted stock have the same voting rights as common
stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The
Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of
grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted
stock is determined based on the closing price of the Company's common stock on the grant date.

31, 2023, the Company granted in the aggregate, 295,000 restricted shares of common stock to a consultant, the company's directors, officers
and an employee. The restricted shares award were granted under the 2019 Omnibus Equity Incentive Plan (See Note 15) and vested immediately.
The fair value of the award on the date of grant was $ 451,350 which was expensed in full during the year ended December 31, 2023.

 The Company granted an
aggregate of 295,000
restricted shares of common stock in January 2025 to a consultant, the Company's directors, officers, and an employee as
compensation for services rendered for the year ended December 31, 2024. The restricted shares award were granted under the 2019
Omnibus Equity Incentive Plan (See Note 15) and vested immediately. The fair value of the award on the date of grant was $ 194,700
which was expensed in full during the year ended December 31, 2024.

 Retained Earnings - Appropriated

 In accordance with the relevant
PRC regulations and the PRC subsidiaries' Articles of Association, the Company's PRC subsidiaries are required to allocate
its profit after tax to the following reserve:

 Statutory Reserve

 SCHC, SYCI, SHSI and DCHC are
required each year to transfer at least 10% of the profit after tax as reported under the PRC statutory financial statements to the Statutory
Reserve until the balance reaches 50% of the registered share capital. This reserve can be used to make up any loss incurred or to increase
share capital. Except for the reduction of losses incurred, any other application should not result in this reserve balance falling below
25% of the registered capital. As of December 31, 2024, the Company's statutory provident fund stood at $26.67 million.

 NOTE 14 – TREASURY STOCK

 As of December 31, 2024 and December
31, 2023, the number of treasury stock of the Company was 285,830 and 285,830, respectively.

 NOTE 15 – STOCK-BASED COMPENSATION

 Pursuant to the Company's
2019 Omnibus Equity Incentive Plan adopted and approved in 2019 ("2019 Plan"), awards under the 2019 Plan is limited in the
aggregate to 2,068,398 shares of our common stock, inclusive of the awards that were previously issued and outstanding under the Company's
2007 Equity Incentive Plan, as amended (the "2007 Plan"). Upon adoption and approval of the 2019 Plan, the 2007 Plan was frozen,
no new awards will be granted under the 2007 Plan, and outstanding awards under the 2007 Plan will continue to be governed by the terms
and condition of the 2007 Plan and applicable award agreement. As of December 31, 2024, the number of shares of the Company's common
stock available for grant of stock options and issuance under the 2019 Plan is 561,801 shares.

 The fair value of each
option award is estimated on the date of grant using the Black-Scholes option-pricing model. The risk free rate is based on the
yield-to-maturity in continuous compounding of the US Government Bonds with the time-to-maturity similar to the expected tenor of
the option granted, volatility is based on the annualized historical stock price volatility of the Company, and the expected life is
based on the historical option exercise pattern.

 For the year ended December 31,
2024 and 2023, total compensation costs for options issued recorded in the consolidated statement of comprehensive income (loss) were
$ 0 and $ 0. There were no related tax benefits as a full valuation allowance was recorded in the years ended December 31, 2024 and 2023.

 F- 20

 NOTE 15 – STOCK-BASED COMPENSATION – Continued

 The following table summarizes all Company stock option
transactions between January 1, 2024 and December 31, 2024.

 Stock-Based Compensation - Schedule of Stock
Option Activity

of Option and Warrants Outstanding and
 exercisable

 Weighted-
Average Exercise price of Option
 and
Warrants

 Range
of Exercise Price per Common Share

 Balance, January 1, 2024

 —

 $
 —

 $
 —

 Exercised

 —

 $
 —

 $
 —

 Expired

 —

 —

 —

 Balance, December 31, 2024

 —

 —

 —

 Stock and Warrants Options Exercisable and Outstanding

 Outstanding at December 31, 2024

 Range of Exercise Prices

 Weighted Average Remaining Contractual Life (Years)

 Exercisable and outstanding

 —

 —

 —

 All options exercisable and outstanding at December 31,
2024 are fully vested. As of December 31, 2024, there was no unrecognized compensation cost related to outstanding stock options,

 The aggregate intrinsic value of options outstanding and
exercisable as of December 31, 2024 and 2023 was $ 0 and $ 0.

 F- 21

 NOTE 16– EXPENDITURE ON WATER POLLUTION TREATMENT

2024

2023

 Expenditure on water pollution treatment

 $
 —

 $
 46,510,856

 Total

 $
 —

 $
 46,510,856

 The Company had done the flood
prevention project which involved the renovation of the channels of four major rivers within our mining area, encompassing the tributary
of the Mihe River. The aim is to prevent flooding that could harm the wells, aqueducts and crude salt pans at our plant. This Project
incurred total expense of $ 46,510,856 in the fiscal year 2023.

 NOTE 17 – INCOME TAXES

 The Company utilizes the asset
and liability method of accounting for income taxes in accordance with FASB ASC 740-10. If it is more likely than not that some portion
or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

 (a)
 United States ("US")

 United States

 Gulf Resources, Inc. may be subject
to the United States of America Tax laws at a tax rate of 21 %. No provision for the US federal income taxes has been made as the Company
had no US taxable income for the years ended December 31, 2024 and 2023, and management believes that its earnings are permanently invested
in the PRC.

 (b)
 British Virgin Islands ("BVI")

 Upper Class Group Limited, a subsidiary
of Gulf Resources, Inc., was incorporated in the BVI and, under the current laws of the BVI, it is not subject to tax on income or capital
gain in the BVI. Upper Class Group Limited did not generate assessable profit for the years ended December 31, 2024 and 2023.

 (c)
 Hong Kong

 Hong Kong

 HKJI, a subsidiary of Upper Class
Group Limited, was incorporated in Hong Kong and is subject to Hong Kong taxation on its activities conducted in Hong Kong and income
arising in or derived from Hong Kong. No provision for income tax has been made as it has no taxable income for the years ended December
31, 2024 and 2023. The applicable statutory tax rates for the years ended December 31, 2024 and 2023 are 16.5 %. There is no dividend withholding
tax in Hong Kong.

 (d)
 PRC

 PRC

 Enterprise income tax ("EIT")
for SCHC, SYCI, SHSI and DCHC in the PRC is charged at 25 % of the assessable profits.

 The operating subsidiaries SCHC
is a wholly foreign-owned enterprises ("FIE"), SYCI, DCHC, and SHSI are incorporated in the PRC and are subject to PRC Local
Income Tax Law. The PRC tax losses may be carried forward to be utilized against future taxable profit for ten years for High-tech enterprises
and small and medium-sized enterprises of science and technology and for five years for other companies. Tax losses of the operating subsidiaries
of the Company may be carried forward for five years.

 On February 22, 2008, the Ministry
of Finance ("MOF") and the State Administration of Taxation ("SAT") jointly issued CaiShui [2008] Circular 1 ("Circular
1"). According to Article 4 of Circular 1, distributions of accumulated profits earned by a FIE prior to January 1, 2008 to foreign
investor(s) in 2008 will be exempted from withholding tax ("WHT") while distribution of the profit earned by an FIE after
January 1, 2008 to its foreign investor(s) shall be subject to WHT at 5% effective tax rate.

 As of December 31, 2024
and 2023, the accumulated distributable earnings under the Generally Accepted Accounting Principles (GAAP") of PRC that are subject
to WHT are $ 40,524,183
 and $ 87,160,228,
respectively. Since the Company intends to reinvest its earnings to further expand its businesses in mainland China, its foreign invested
enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, as
of December 31, 2024 and December 31, 2023, the Company has not recorded any WHT on the cumulative amount of distributable retained earnings
of its foreign invested enterprises that are subject to WHT in China. As of December 31, 2024 and December 31, 2023, the unrecognized
WHT are $ 1,078,743 and $ 3,396,379, respectively.

 The Company's income tax
returns are subject to the various tax authorities' examination. The federal, state and local authorities of the United States may
examine the Company's income tax returns filed in the United States for three years from the date of filing. The Company's
US income tax returns since 2017 are currently subject to examination.

 Inland Revenue Department of Hong
Kong ("IRD") may examine the Company's income tax returns filed in Hong Kong for seven years from date of filing. For
the years 2012 through 2018, HKJI did not report any taxable income. It did not file any income tax returns during these years except
for 2014 and 2018. For companies which do not have taxable income, IRD typically issues notification to companies requiring them to file
income tax returns once in every four years. The tax returns for 2014 and 2018 are currently subject to examination.

 F- 22

 The components of the provision for income tax benefit (expense)
from continuing operations are:

 Income Taxes - Schedule of Components of Income Tax Expense Benefit

 2024

 2023

 Current taxes – PRC

 $
 ( 15,204
)

 $
 ( 322,890
)

 Deferred taxes – PRC entities

 ( 1,632,978
)

 ( 3,215,727
)

 Total Income tax (expenses) benefits

 $
 ( 1,648,182
)

 $
 ( 3,538,617
)

 Significant components of the
Company's deferred tax assets and liabilities at December 31, 2024 and December 31, 2023 are as follows:

 Income Taxes - Schedule of Deferred
Tax Assets and Liabilities

 2024

 2023

 Deferred tax assets:

 Exploration costs

 $
 1,731,920

 $
 1,757,816

 Allowance

 729,731

 —

 Impairment of property plant and equipment

 1,686,095

 —

 PRC tax losses

 9,125,871

 11,941,045

 US federal net operating loss

 1,661,464

 1,694,013

 Total deferred tax assets

 14,935,081

 15,392,874

 Valuation allowance

 ( 14,935,081
)

 ( 13,533,849
)

 Net deferred tax asset

 $
 —

 $
 1,859,025

 Deferred tax assets
consist of future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing
deductible temporary differences. As of December 31, 2024 and 2023, valuation allowances were mainly provided against deferred tax
assets caused by exploration costs, Impairment of property plant and equipment, Allowance
and net operating loss where it was determined it was more likely than not that the benefits of the deferred tax assets will not be
realized due to their continuous losses.

 The increase in valuation allowance for the year ended
December 31, 2024 is $ 1,401,232.

 The increase in valuation allowance for the year ended
December 31, 2023 is $ 3,516,915.

 There were no unrecognized tax benefits and accrual
for uncertain tax positions as of December 31, 2024 and 2023. There were no amounts accrued for penalties and interest for the years ended
December 31, 2024 and 2023.

 There were no change in unrecognized tax benefits during
the years ended December 31, 2024 and 2023.

 F- 23

 NOTE 18 – BUSINESS SEGMENTS

 Operating segment's performance
is primarily evaluated based on segment operating income, which excludes share-based compensation expense, certain corporate costs and
other income not associated with the operations of the segment. These corporate costs are separately stated below and also include costs
that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit.
The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance
of its segments. All the customers are located in PRC.

 Operating Segment

 Bromine*

 Crude
 Salt*

 Chemical
 Products

 Natural
 Gas

 Total

 Corporate Corporate

 Total

 Net revenue
(external customers)

 $
 5,549,815

 $
 2,049,988

 $
 —

 $
 61,207

 $

 $
 —

 $

 Net revenue
(intersegment)

 —

 —

 —

 —

 —

 —

 —

 Loss from operations before
income tax expense

 ( 17,238,619
)

 ( 76,694
)

 ( 3,028,479
)

 ( 195,364
)

 ( 20,539,156
)

 ( 744,493
)

 ( 21,283,649
)

 Income tax (expense) benefit

 ( 1,632,978
)

 ( 15,204
)

 —

 —

 ( 1,648,182
)

 —

 ( 1,648,182
)

 Loss from operations after
income tax (expense) benefit

 ( 18,871,597
)

 ( 91,898
)

 ( 3,028,479
)

 ( 195,364
)

 ( 22,187,338
)

 ( 744,493
)

 ( 22,931,831
)

 Total assets

 73,137,911

 46,843,471

 46,020,977

 1,673,535

 167,675,894

 1,755,061

 169,455,995

 Depreciation and amortization

 15,941,214

 1,659,865

 272,716

 134,080

 18,007,875

 —

 18,007,875

 Capital expenditures

 28,923,642

 31,602,571

 —

 —

 60,526,213

 —

 60,526,213

 Bromine*

 Crude
 Salt*

 Chemical
 Products

 Natural
 Gas

 Total

 Corporate

 Total

 Net revenue
(external customers)

 $
 26,921,462

 $
 2,971,467

 $
 —

 $
 150,861

 $

 $
 —

 $

 Net revenue
(intersegment)

 —

 —

 —

 —

 —

 —

 —

 Loss from operations before
income tax expense

 ( 10,005,755
)

 640,309

 ( 1,653,349
)

 ( 86,284
)

 ( 11,105,079
)

 ( 785,646
)

 ( 11,890,725
)

 Income tax (expense) benefit

 ( 3,214,629
)

 ( 323,988
)

 —

 —

 ( 3,538,617
)

 —

 ( 3,538,617
)

 Loss from operations after
income tax (expense) benefit

 ( 13,220,384
)

 316,321

 ( 1,653,349
)

 ( 86,284
)

 ( 14,643,696
)

 ( 785,646
)

 ( 15,429,342
)

 Total assets

 104,414,525

 11,747,999

 108,259,342

 1,983,126

 226,404,992

 266,716

 226,671,708

 Depreciation and amortization

 25,354,200

 1,369,812

 313,735

 101,842

 27,139,589

 —

 27,139,589

 Capital expenditures

 —

 —

 —

 —

 —

 —

 —

 * Certain common production overheads,
operating and administrative expenses and asset items (mainly cash and certain office equipment) of bromine and crude salt segments in
SCHC were split by reference to the average selling price and production volume of the respective segment.

 F- 24

 Reconciliations

 2024

 2023

 Total segment operating loss

 $
 ( 20,539,156
)

 $
 ( 11,105,079
)

 Corporate costs

 ( 744,493
)

 ( 785,646
)

 Unrealized gain (loss) on translation of intercompany balance

 —

 —

 Loss from operations

 ( 21,283,649
)

 ( 11,890,725
)

 Other expense, net

 ( 62,113
)

 144,919

 Expenditure on water pollution treatment

 —

 ( 46,510,856
)

 Loss on disposal of property, plant and equipment

 ( 29,169,008
)

 —

 Impairment of Property, plant and equipment

 ( 6,772,500
)

 —

 Loss before taxes

 $
 ( 57,287,270
)

 $
 ( 58,256,662
)

 The following table shows the major customers (10% or more)
for the year ended December 31, 2024

 Business Segments - Schedule of
Revenue by Major Customers

 Crude
Salt

 Chemical
Products

 Total
Revenue

 Percentage
of
 Total

 Customer

 Revenue (%)

 Shandong Morui Chemical Company Limited

 $

 $

 $
 —

 $
 1,447

 18.9
 %

 Shandong Brother Technology Limited

 $

 $

 $
 —

 $
 1,348

 17.6
 %

 Shouguang Weidong Chemical Company Limited

 $

 $

 $
 —

 $
 1,224

 16.0
 %

 The following table shows the major customers (10% or more) for the
year ended December 31, 2023

 Crude
Salt

 Chemical
Products

 Total
Revenue

 Percentage
of
 Total

 Customer

 Revenue (%)

 Shandong Morui Chemical Company Limited

 $
 3,735

 $
 1,137

 $
 —

 $
 4,872

 16.3
 %

 Shandong Brother Technology Limited

 $
 3,639

 $

 $
 —

 $
 4,637

 15.5
 %

 Shouguang Weidong Chemical Company Limited

 $
 3,492

 $

 $
 —

 $
 4,329

 14.5
 %

 Shandong Shouguang Shenrunfa Marine Chemical Company Limited

 $
 3,018

 $
 —

 $
 —

 $
 3,018

 10.1
 %

 F- 25

 NOTE 19 – CUSTOMER CONCENTRATION

 Revenue

 Customer Concentration

 Product

 The Company sells a substantial
portion of its products to a limited number of customers. During the year ended December 31, 2024, the Company sold 66.05 % of its products
to its top five customers, respectively. As of December 31, 2024, amounts due from these customers were $ 594,234.

 The Company sells a substantial
portion of its products to a limited number of customers. During the year ended December 31, 2023, the Company sold 61.8 % of its products
to its top five customers, respectively. As of December 31, 2023, amounts due from these customers were $ 2,082,217.

 NOTE 20 – MAJOR SUPPLIERS

 Product Concentration

 Cost of Goods

31, 2024, the Company purchased 100 % of its raw materials from its top four suppliers. As of December 31, 2024, amounts due to those suppliers
were $ 30,003.

31, 2023, the Company purchased 100 % of its raw materials from its top four suppliers. As of December 31, 2023, amounts due to those suppliers
were $ 206,984.

 F- 26

 NOTE 21 – LOSS CONTINGENCIES

 Settled Litigation

 On or about August 3,
2018, written decisions of administration penalty captioned Shou Guo Tu Zi Fa Gao Zi [2018] No. 291, Shou Guo Tu Zi Fa Gao Zi [2018]
No. 292, Shou Guo Tu Zi Fa Gao Zi [2018] No. 293, Shou Guo Tu Zi Fa Gao Zi [2018] No. 294, Shou Guo Tu Zi Fa Gao Zi [2018] No. 295
and Shou Guo Tu Zi Fa Gao Zi [2018] No. 296 (together, the "Written Decisions") were served on Shouguang City Haoyuan
Chemical Company Limited ("SCHC") by Shouguang City Natural Resources and Planning Bureau (the "Bureau"),
naming SCHC as respondent respectively thereof. The Decisions challenged the land use of Factory nos. 2, 9, 7, 4, 8 and 10,
respectively, and alleged, among other things, that SCHC had illegally occupied and used the land in the total area of approximately
52,674 square meter, on which Factory nos. 2, 9, 7, 4, 8 and 10 were built, respectively. The Written Decisions ordered SCHC, among
other things, to return the land subject to the Written Decisions to its respective legal owner, restore the land to its original
state, and demolish or confiscate all the buildings and facilities thereon and pay monetary penalty of approximately RMB 1.3 million
($184,000) in the aggregate. Each of the Written Decisions shall be executed within 15 days upon serving on SCHC. Additional
interest penalty shall be imposed at a daily rate of 3% in the event that SCHC does not make the monetary penalty payment in a
timely manner. Subsequently, the Bureau filed enforcement actions to the People's Court of Shouguang City, Shandong Province
(the "Court"), naming SCHC as enforcement respondent and alleged, among other things, that SCHC failed to perform its
obligations under each of the Written Decisions within the specified timeframe. The enforcement proceedings sought court orders to
enforce the Written Decisions. On May 5, 2019, written decisions of administrative ruling captioned (2019) Lu 0783 Xing Shen No.
384, (2019) Lu 0783 Xing Shen No. 385, (2019) Lu 0783 Xing Shen No. 389, (2019) Lu 0783 Xing Shen No. 390, (2019) Lu 0783 Xing Shen
No. 393, and (2019) Lu 0783 Xing Shen No. 394, respectively (together, the "Court Rulings") were made by the Court in
favor of the Bureau. The Court orders, among other relief, to enforce each of the Written Decisions, to return each subject land to
its legal owners and demolish or confiscate the buildings and facilities thereon and restore the land to its original state within
10 days from the service of the Court Rulings on SCHC. The Court Rulings became enforceable immediately upon service on SCHC on May
5, 2019.

 In the last twenty years, to the
Company's knowledge, there were no government regulations requiring bromine manufacturers to obtain land use and planning approval
document. As such, the Company believes most of the bromine manufacturers in Shouguang City do not have land use and planning approval
documents and lease their land parcels from the village associations. They are facing the same issues in connection with land use and
planning as the Company. To the Company's knowledge, the local government has submitted its plan to solve the issues to higher authority
and are waiting for approval from the higher authority.

 The Company is in the process
of resolving the issues in connection with SCHC's land use and planning diligently. The Company has been in discussions closely
with the local government authorities with the help from Shouguang City Bromine Association to seek reliefs and, based on verbal confirmation
by local government authorities, believes the administrative penalties imposed by the Bureau according to the Written Decisions are being
re-assessed by local government authorities and may be revoked. Pursuant to a Written Application dated October 28, 2019 addressed to
the Court by the Bureau, the Bureau withdrew its application for the enforcement proceedings regarding the administrative penalty imposed
on Factory No. 7, Factory No. 8 and Factory No.10. Pursuant to a written decisions of administrative ruling captioned (2019) Lu 0783 Xing
Shen No. 389 Zhi Yi, dated November 25, 2020, the Court orders to terminate the enforcement of the case captioned (2019) Lu 0783 Xing
Shen No. 389. Production of Factory No. 7 was allowed to resume in April 2019. The Company received a notification from the Shouguang
City Government in February 2019 informing the Company that Factory No. 1, No.4, No. 7 and No. 9 have passed inspection and were approved
to resume operation

 In addition, on August 28, 2019,
the People's Government of Shandong Province, issued a regulation titled "Investment Project Management Requirements of Chemical
Companies in Shandong Province" permitting the construction of facilities on existing sites or infrastructure of bromine manufacturing
and other chemical industry-related types of projects (clause 11 of section 3). The Company believes that the goal of the government is
to standardize and regulate the industry and not to demolish the facilities or penalize the manufacturers. As of the date of this report,
the Company has not been notified by the local government that it will take any measure to enforce the administrative penalties. Based
on information known to date, the Company believes that it is remote that the Written Decisions or Court Rulings will be enforced within
the expected timeframe and a material penalty or costs and expenses against the Company will result. However, there can be no assurance
that there will not be any further enforcement action, the occurrence of which may result in further liabilities, penalties and operational
disruption.

 In view of the above facts and
circumstances, the Company believes that it is not necessary to accrue for any estimated losses or impairment as of December 31, 2024.

 NOTE 22 - SUBSEQUENT EVENT

 Subsequent Events

 On January 20, 2025,
the company issued total 295,000 shares to its employees, officers and consultant for the services rendered for the year ended
December 31, 2024.

 Pursuant to the notification from
the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 15, 2024 until February
12, 2025. In compliance with the notification, the Company ceased production at its bromine facilities during this period and resumed
preparation operations at the bromine and crude salt factories as scheduled in February 2025.

 F- 27

 On February 28, 2025 (the
"Closing Date"), a wholly owned subsidiary of the Company, SHSI, closed the transactions contemplated by the Acquisition
Agreements (the "Agreements") dated June 26, 2024 by and between SHSI, and Shouguang Qingshuibo Farm Co., LTD. ("Seller
1"), dated June 27, 2024 by and between SHSI and each of Shouguang city Yangkou Town Dingjia Zhuangzi Village Stock Economic Cooperative
("Seller 2"), Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative ("Seller 3"), Shouguang
city Yangkou town Shanjia Zhuangzi village stock economic cooperative ("Seller 4"), Shouguang city Yangkou town Zhengjia
Zhuangzi village stock economic cooperative ("Seller 5"), respectively, as amended on December 17, 2024. Pursuant to the
Agreements, SHSI acquired the crude salt field owned by each seller located in Shandong province, China. On the Closing Date, the Company
issued a total of 2,059,694
 shares of the Company's common stock, par value $ 0.0005
 per share (the "Shares"), at a price of $ 1.50
 per share, to five individuals, who are citizens residing in the People's Republic of China, designated by each the Seller
1, the Seller 2, the Seller 3, the Seller 4 and the Seller 5. The issuance of the Shares was exempt from registration pursuant to Regulation
S of the Securities Act of 1933, as amended.

 Determined by the civil mediation document issued by
Shouguang People's Court on March 17, 2025, SCHC owed Shouguang Chengyu Trading Co., Ltd. a sum of RMB 226,825.44 for goods. SCHC is required
to pay RMB 50,000 to Shouguang Chengyu Trading Co., Ltd. before the 15th day of each month starting from April 2025 until the debt is
fully repaid.

 On March 21, 2025, the company issued total 265,000 shares
to its employees, officers and consultant for the service rendered in the year ended December 31, 2025.

 F- 28

 SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION

 The following presents condensed parent company only financial
information of Gulf Resources, Inc.

 Condensed Balance Sheets

 Parent Company

 As of December 31,

 2024

 2023

 Current Assets

 Prepayments and deposits

 $
 —

 $
 —

 Total Current Assets

 —

 —

 Non-Current Assets

 Interests in subsidiaries

 83,755,560

 144,749,406

 Amounts due from group companies

 69,821,271

 62,288,744

 Deferred tax assets, net

 —

 —

 Total non-current assets

 153,576,831

 207,038,150

 Total Assets

 $
 153,576,831

 $
 207,038,150

 Liabilities and Stockholders' Equity

 Current Liabilities

 Other payables and accrued expenses

 $
 8,265,349

 $
 185,042

 Amounts due to related parties

 1,462,110

 1,462,110

 Amounts due to group companies

 142,702

 142,702

 Total Current Liability

 9,870,161

 1,789,854

 Total Liabilities

 $
 9,870,161

 $
 1,789,854

 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; 11,012,754
 shares issued; and 10,726,924
 shares outstanding as of December 31, 2024 and December 31, 2023

 Treasury stock; 285,830 shares as of December 31, 2024 and December 31, 2023 at cost

)

)

 Additional paid-in capital

 Share to be issued

 —

 Retained earnings unappropriated

 37,358,804

 96,294,256

 Retained earnings appropriated

 Cumulative translation adjustment

 ( 20,854,143
)

 ( 18,053,269
)

 Total Stockholders' Equity

 143,706,670

 205,248,296

 Total Liabilities and Stockholders' Equity

 $
 153,576,831

 $
 207,038,150

 S- 1

 Condensed Statements of Comprehensive Loss

 2024

 2023

 OPERATING EXPENSES

 General and administrative expenses

 $
 ( 742,480
)

 $
 ( 780,379
)

 TOTAL OPERATING EXPENSES

 ( 742,480
)

 ( 780,379
)

 OTHER EXPENSES

 Interest expense

 —

 —

 TOTAL OTHER EXPENSES

 —

 —

 TOTAL EXPENSES

 ( 742,480
)

 ( 780,379
)

 Equity in net Loss of subsidiaries

 ( 59,841,154
)

 ( 61,014,900
)

 LOSS BEFORE INCOME TAXES

)

)

 INCOME TAXES

 —

 —

 NET LOSS

 $
)

 $
)

 Condensed Statements of Cash Flows

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net Loss

 $
)

 $
)

 Adjustments to reconcile net Loss to net cash provided by (used in) operating activities:

 Equity Loss in unconsolidated subsidiaries

 59,841,154

 61,014,900

 Stock-based compensation expense-options

 —

 451,350

 Shares issued from treasury stock for services

 —

 —

 Changes in assets and liabilities:

 —

 —

 Other payables and accrued expenses

 1,251,357

 ( 23,152
)

 Net cash used in operating activities

 ( 345,655
)

 ( 352,181
)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Advances from group companies

 345,655

 352,181

 Net cash provided by financing activities

 345,655

 352,181

 NET INCREASE IN CASH AND CASH EQUIVALENTS

 —

 —

 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

 —

 —

 CASH AND CASH EQUIVALENTS - END OF YEAR

 $
 —

 $
 —

 S- 2

 (i)
 Basis of presentation

 In the condensed parent-company-only
financial statements, the Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries
since the date of acquisition. The Company's share of net loss of its subsidiaries is included in condensed statements of comprehensive
loss using the equity method. These condensed parent- company-only financial statements should be read in connection with the consolidated
financial statements and notes thereto.

 As of December 31, 2024, the
Company itself has no purchase commitment, capital commitment and operating lease commitment.

 (ii)
 Restricted Net Assets

 Schedule I of Rule 5-04 of Regulation
S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test,
restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets
of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred
to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender,
regulatory agency, foreign government, etc.).

 The condensed parent company
financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the
subsidiaries of Gulf Resources, Inc. exceed 25% of the consolidated net assets of Gulf Resources, Inc. The ability of the Company's
Chinese operating subsidiaries to pay dividends may be restricted due to the foreign exchange control policies and availability of cash
balances of the Chinese operating subsidiaries. Because a significant portion of the Company's operations and revenues are conducted
and generated in China, a significant portion of the revenues being earned and currency received are denominated in RMB. RMB is subject
to the exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China
due to PRC exchange control regulations that restrict the Company's ability to convert RMB into US Dollars.

 S- 3

 Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.

 (a) Dismissal of Independent Registered Public Accounting
Firm.

 On April 16, 2024, WWC, P.C. Certified Public Accountants
("WWC") was dismissed as our independent registered public accounting firm, effective immediately. The decision to dismiss
WWC as the Company's principal independent accountant was approved by the Audit Committee of the Board of Directors of the Company
on April 16, 2024.

 WWC's reports on our consolidated financial statements
for the fiscal years ended December 31, 2023 and 2022 did not contain an adverse opinion or a disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.

 During the two most recent fiscal years ended December
31, 2023 and 2022, and the subsequent interim period through April 16, 2024, there were no disagreements with WWC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction
of WWC, would have caused WWC to make reference to the subject matter of the disagreements in connection with its reports on our consolidated
financial statements for such years. Also during this time, there were no "reportable events," as defined in Item 304(a)(1)(v)
of Regulation S-K.

 We provided WWC with a copy of the above disclosures
and requested that WWC furnish the Company with a letter addressed to the SEC stating whether or not it agrees with the statements made
above. A copy of WWC's letter dated April 16, 2024 was attached as Exhibit 16.1 to a Current Report on Form 8-K that was filed by
us with the SEC on April 16, 2024.

 (b) Appointment of New Independent Registered Public
Accounting Firm.

 On April 16, 2024, we engaged GGF CPA LIMITED ("GGF")
as our independent registered public accounting firm for the fiscal year ending December 31, 2023, effective immediately. During the fiscal
years ended December 31, 2023 and 2022 and through April 16, 2024, neither we nor anyone on its behalf consulted with GGF regarding (i)
the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that
might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us that GGF concluded
was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii)
any matter that was either the subject of a "disagreement," as defined in Item 304(a) (1)(iv) of Regulation S-K, or a "reportable
event," as defined in Item 304(a)(1)(v) of Regulation S-K.

 Item 9A. Controls and Procedures.

 (a)
 Evaluation of Disclosure Controls and Procedures

 We maintain "disclosure
controls and procedures", as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information
required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating
the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance our
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
We have carried out an evaluation as required by Rule 13a-15(d) under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2024. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that,
as of December 31, 2024, the Company's disclosure controls and procedures were effective.

 The Company's management
took all necessary steps to make its disclosure controls to be more efficient by, including, not limited to, (i) more closely
monitoring the application of the Company's comprehensive disclosure policy implementing procedures to strengthen disclosure
controls, (ii) enhancing the identification, analysis and control of risks relevant to accurate and timely disclosure, and (iii)
ensuring more timely transmission of information and communication within the organization during 2024. Specifically, (i) the
Company held weekly meetings with its business units heads and investor relations officers to identify and discuss information that
may require public disclosure; (ii) the Company's management required all business units to report information that may
require public disclosure to the Company's investor relations officers immediately; (iii) the Company's management
consulted with the Company's outside securities counsel to the extent they deemed necessary; (iv) the Company's
management designated the Company's investor relations officers as disclosure coordinator to perform functions of collecting
information, preparing disclosure, distributing disclosure for review and comment to business units and obtaining comment from each
reviewing person and their confirmation that the portions of such disclosure relevant to such person's areas of responsibility
were fairly and accurately presented and did not omit any material information required to be disclosed.

 (b)
 Management's Report on Internal Control over Financial Reporting

 Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f)
and 15d-15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal
executive officer and principal financial officer, and effected by our Board of Directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles, and includes those policies and procedures that:

 (1)
 Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our assets;

 (2)
 Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorization of our management and directors; and

 (3)
 Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisitions, use or disposition of our assets that could have a material effect on the financial statements.

 Internal control over financial
reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal
control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management
override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis
by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process.
Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible
for establishing and maintaining adequate internal control over financial reporting for the company.

 Management has used the framework
set forth in the report entitled Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework), known as COSO, to evaluate the effectiveness of our internal control over financial reporting.

 A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Based
on such evaluation, our CEO and CFO have concluded that, as of December 31, 2024, our internal controls over financial reporting were
effective.

 This annual report does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's
report was not subject to attestation by our registered public accounting firm pursuant to the Dodd Frank Wall Street Reform and Consumer
Protection Act, which permits us to provide only management's report in this annual report.

 (c)
 Changes in internal controls

 Other than as described in (b)
above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange
Act) during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

 (d) Attestation Report of the
Registered Public Accounting Firm

 This Annual Report does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting. As a smaller reporting
company, the management's report is not subject to attestation by our registered public accounting firm.

 Item 9B. Other Information.

 None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.

 Not applicable.

 Item 10. Directors, Executive Officers and Corporate
Governance

 The following table sets forth certain information about
our executive officers and directors as of the date of this Annual Report.

 Name

 Age

 Position/Title

 Has served as company

 director since

 Chairman, Chief Executive Officer and Director

 March 2009

 Secretary, Chief Operating Officer and Director

 January 2006

 Chief Financial Officer

 N/A

 Yibo Yang

 November 2023

 Yang Zou (1)(3)

 Independent Director

 March 2011

 Shengwei Ma (1)(2)

 Independent Director

 December 2019

 Shitong Jiang (1)(2)(3)

 Independent Director

 April 2008

 Dongshan Wang (2)(3)

 Independent Director

 November 2023

 (1)
 Serves as a member of the Audit Committee.

 (2)
 Serves as a member of the Compensation Committee.

 (3)
 Serves as a member of the Nominating and Corporate Governance Committee.

 Xiaobin Liu, Chairman, Chief
Executive Officer and Director – Mr. Liu has served as Chairman of the Board of Directors of the Company since November 2023.
Mr. Liu was appointed as Chief Executive Officer and Director on March 10, 2009. Mr. Liu joined the Company as Vice President in December
2007. He has served as the Director of Sanya Kangyangnian Health Management Co. LTD since March, 2021. He has served as Chairman of Chengdu
Philosopher's Stone Culture Media Co. LTD since August 2018. He served as Chairman of China Shouguang Vegetable Industry Group (Cayman)
Inc. from 2011 to 2017. He currently serves as a director of China Shouguang Vegetable Industry Group (Cayman) Inc. Before he joined the
Company, Mr. Liu served as project manager of Shenzhen Guangshen Accounting Firm from January 2007 to November 2007; the department manager
of Hainan Zhongou Accounting Firm from January 2003 to December 2006; the CFO (equivalent of Vice President) of Dasheng Real Estate Development
Company, which is the subsidiary of Saige Dasheng Co., Ltd from May 2002 to November 2002; the CFO of Shenzhen Securities Department of
Hainan Saige International Trust Investment Company from May 2000 to August 2004; and the financial manager of Hainan Wanquanyuan Hot
Spring Tourism Development Co., Ltd from 1995 to 2000. During this time, he also was the CFO of Qionghai City Guantang Hotspring Leisure
Center, the CFO of Qionghai City Wanquanhe Agricultural Development Co., Ltd, the CFO of Qionghai Wanquanhe Hotspring Tourist Development
Property Management Co., Ltd, and the CFO of Qionghai Guantangyuzhuang Resort Co., Ltd. Prior to that, Mr. Liu worked in the financial
department of Hainan Jinyuan Industrial Co., Ltd, which is a subsidiary of Chinese Black Metal Limited Company Northwest Branch from 1992
to 1995, and the financial department of Shanxi Aircraft Manufacturing Company from 1988 to 1992. Mr. Liu earned a master degree from
the Economic and Management School at Hong Kong City University.

 Naihui Miao,
Secretary, Chief Operating Officer and Director – Since January 2006, Mr. Miao has served as Director and Secretary and,
since July 2009, Chief Operating officer of the Company and
he is in charge of sales, human resource and business management. From 2005 to 2006, Mr. Miao served as Vice President of Shouguang
City Yuxin Chemical Company Limited as the deputy general manager. From 1991 to 2005, Mr. Miao served as a Manager and then Vice
President of Shouguang City Commercial Trading Center Company Limited. He was the director of Shouguang Business Trade Center since
1986. He has served as Supervisor of Chengdu Philosopher's Stone Culture Media Co. LTD since August 2018.

 Yibo Yang, director –
Mr. Yang has served as a director of the Company since November 2023. Mr. Yang has worked at Shouguang Haoyuan Chemical Co., Ltd. since
2009 and currently serves as the deputy general manager of Shouguang Haoyuan Chemical Co., Ltd. Mr. Yang is a 18% shareholder of Shandong
Haoyuan Industrial Group. Since December 2020, Mr. Yang has served as the deputy general manager of Shandong Haoyuan Industrial Group.
Since July 2023, Mr. Yang has served as the executive director and the managing director for Shouguang City Yuxin Chemical Company Limited.
Since June 2023, Mr. Yang has served as the supervisor of Shandong Caiting Lighting Technology Co., Ltd. Mr. Yang holds a Diploma in economic
management from Shandong University of Technology.

 Yang Zou, Independent
Director – Mr. Zou has served as a director of the Company since March 2011. Mr. Zou served as Vice Director of Beijing Zhongtianhuamao
Accounting Firm (General Partnership) from July 1, 2017 to August 2018. He is a Certified Public Accountant of China and holds the certificate
of Certified Internal Auditor. From March 2003 to September 2009, Mr. Zou was chief financial officer of Bohua Ziguang Zhiye Co., Ltd.
>From July 2001 to January 2003, Mr. Zou was the audit department manager of financial center of Beijing Hengji Weiye Electronic Products
Co., Ltd., where he was in charge of internal audit, financial budget management, and coordination with external audit. From July 1999
to June 2001, Mr. Zou was manager of finance and audit department of Zhonglian Online Information Development Co., Ltd. From September
1993 to June 1999, Mr. Zou had served as assistant auditor, auditor, and head of project audit of Hainan Zhongou Certified Public Accountants
Co., Ltd. From July 1991 to August 1993, Mr. Zou was an accountant of department of finance of Hunan Department Store Co., Ltd. Mr. Zou
graduated from Beijing University with bachelor's degree in finance.

 Shitong Jiang, Independent
Director – Mr. Jiang has served as a director of the Company since April 2008. Mr. Jiang is Chief of the Shouguang City Audit
Bureau, Shandong Province, has been with the Audit bureau since 1990. During his career at the Shouguang City Audit Bureau he has held
multiple positions including, Auditing Officer and Audit Section Deputy Chief. The Shouguang City Audit Bureau is responsible for the
independent audit supervision of the affairs of the government. From 1987 to 1990 Mr. Jiang attended Shandong Financial Institution.

 Dongshan Wang, Independent
Director – Mr. Yang has served as a director of the Company since November 2023. Mr. Wang has served as the vice president and
the chief financial officer of Central China Headquarters of Anliang Holding Group since April 2018. Mr. Wang is an International Certified
Public accountant, and he holds a national Chief accountant (CFO) qualification certificate. Mr. Wang graduated from Zhengzhou College
of Light Industry majored in financial management in 1988.

 Shengwei Ma, Independent
Director – Mr. Ma has served as a director of the Company since December 2019. Mr. Ma has served as Department Manager of Shouguang
City Urban Construction and Investment Group since March 2012. Mr. Ma holds a Senior Accountant Certificate. Mr. Ma graduated from Central
Broadcasting and Television University with bachelor's degree in accounting in 2004.

 Executive Officers and Significant Employees

 Min Li, Chief Financial Officer
– was appointed a director of the Company on October 30, 2007 and resigned from the position on June 22, 2009. He has served
as Chief Financial Officer since December 2006 and as Chief Financial Officer for Shouguang City Haoyuan Chemical Company Limited. From
2004 to 2006, Mr. Li served as Manager of Financial and Asset Management Department for Shouguang City Yuxin Chemical Company Limited.
>From 2000 to 2004, Mr. Li served as Manager of the Accounting Department for the Yang Kou Branch of the China Construction Bank. From
1998 to 1999, Mr Li worked at China Construction Bank Shandong branch and in 2000 Mr. Li worked at the Yangkou Office as the accounting
manager. Mr. Li has a bachelor degree in accounting from Weifang College.

 Family Relationships

 There are no family relationships among our executive officers,
directors and significant employees.

 Involvement in Certain Legal Proceedings

 To the best of our knowledge,
there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material
to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of our Company during the
past ten years.

 Board of Directors

 All directors hold office until
the next annual meeting of shareholders and until their successors have been duly elected and qualified. Directors are elected at the
annual meetings to serve for one-year terms. Officers are elected by, and serve at the discretion of, the board of directors. Our board
of directors shall hold meetings on at least a quarterly basis.

 As a Nasdaq listed company, we
comply with the NASDAQ Listing Rules with respect to certain corporate governance matters. As a smaller reporting company, under the NASDAQ
rules we are required to maintain a board of directors comprised of a majority of independent directors, and an audit committee of at
least three members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange
Act of 1934.

 Director Independence

 The Board of Directors has determined
that Yang Zou, Shitong Jiang, Dongshan Wang and Shengwei Ma are independent under Rule 5605(a)(2) of the NASDAQ Listing Rules. In making
this determination, our board of directors considered the relationships that each of these non-employee directors has with us and all
other facts and circumstances our board of directors deemed relevant in determining their independence. As required under applicable NASDAQ
rules our independent directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least
annually in executive session without the presence of non-independent directors and management. In addition, under applicable rules and
regulations, and as determined by the Board, all of the members of the Audit, Compensation, and Nominating and Corporate Governance Committees
are "independent" directors.

 Board Committees

 Our board of directors has established
standing committees in connection with the discharge of its responsibilities. These committees include an Audit Committee, a Compensation
Committee and a Corporate Governance and Nominating Committee. Our board of directors has adopted written charters for each of these committees.
Copies of the charters are available on our website at www.gulfresourcesinc.com. Our board of directors may establish other committees
as it deems necessary or appropriate from time to time.

 Board Operations

 Mr.
Xiaobin Liu holds the positions of chief executive officer and chairman of the Board of the Company. The Board believes that Mr. Liu's
services as both chief executive officer and chairman of the Board is in the best interest of the Company and its shareholders. Mr. Liu
possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company in its industries and businesses
and is thus best positioned to develop agendas that ensure the Board's time and attention are focused on the most critical matters
relating to the business of the Company. His combined role enables decisive leadership, ensures clear accountability, and enhances the
Company's ability to communicate its message and strategy clearly and consistently to the Company's shareholders, employees
and customers.

 The
Board has not designated a lead director. Given the limited number of directors comprising the Board, the independent directors call and
plan their executive sessions collaboratively and, between meetings of the Board, communicate with management and one another directly.
Under these circumstances, the directors believe designating a lead director to take on responsibility for functions in which they all
currently participate might detract from rather than enhance performance of their responsibilities as directors.

 The Chairman of the Board chairs
Board and stockholder meetings and participates in preparing their agendas. The Chairman of the Board also serves as a focal point for
communication between management and the Board between Board meetings, although there is no restriction on communication between directors
and management. The Company believes that these arrangements afford the directors sufficient resources to supervise management effectively,
without being overly engaged in day-to-day operations.

 The Board plays an active role,
as well as the independent committees, in overseeing the management of the Company's risks. The Board regularly reviews reports
from members of senior management and committees on areas of material risk to the Company, including operational, financial, legal, strategic
and regulatory risks.

 Audit Committee

 The Board of Directors has standing
audit, compensation, and nominating committees, comprised solely of independent directors. Each committee has a charter, which is available
at Company's website, www.gulfresourcesinc.com.

 Audit Committee

 The Audit Committee is responsible
for reviewing the results and scope of the audit, and other services provided by our independent auditors, and reviewing and evaluating
our system of internal controls. Mr. Jiang is the Audit Committee Financial Expert as defined in Item 407(d)(5) of Regulation S-K promulgated
under the Securities Act, and the chair of the Audit Committee. Our Board of Directors has determined that Messrs. Jiang, Zou and Ma are
"independent directors" within the meaning of Rule 10A-3 under the Exchange Act, as determined based upon the criteria for
"independence" set forth in the rules of the NASDAQ Stock Market.

 Compensation Committee

 The Compensation Committee is
responsible for (a) reviewing and providing recommendations to the Board of Directors on matters relating to employee compensation and
benefit plans, and (b) assisting the Board in determining the compensation of the Chief Executive Officer and making recommendations to
the Board with respect to the compensation of the Chief Financial Officer, other executive officers of the Company and independent directors.
Each of Dongshan Wang, Shitong Jiang and Shengwei Ma are members of the Compensation Committee. The Compensation Committee operates under
a written charter. Mr. Wang is the Chairman of Compensation Committee.

 Nominating and Corporate Governance Committee

 Our Board of Directors established
a Nominating and Corporate Governance Committee in June 2009. The purpose of the Nominating and Corporate Governance Committee is to assist
our Board of Directors in identifying qualified individuals to become board members, in determining the composition of the Board of Directors
and in monitoring the process to assess board effectiveness. Each of Dongshan Wang, Shitong Jiang and Yang Zou are members of the Nominating
and Corporate Governance Committee. The Nominating and Corporate Governance Committee operates under a written charter. Mr. Jiang is the
Chairman of Nominating and Corporate Governance Committee.

 Material Changes to the Procedures by which Security
Holders May Recommend Nominees to the Board

 We do not currently have a procedure by which security holders
may recommend nominees to the Board.

 Director Qualifications

 The Company seeks directors with
established strong professional reputations and experience in areas relevant to the strategy and operations of our businesses. The Company
also seeks directors who possess the qualities of integrity and candor, who have strong analytical skills and who are willing to engage
management and each other in a constructive and collaborative fashion, in addition to the ability and commitment to devote time and energy
to service on the Board and its committees. We believe that all of our directors meet the foregoing qualifications.

 The Nominating and Corporate Governance
Committee and the Board believe that the leadership skills and other experience of the Board members, as described below, provide the
Company with a range of perspectives and judgment necessary to guide our strategies and monitor their execution.

 Xiaobin
Liu was appointed as Chief Executive Officer and Director on March 10, 2009, and as Chairman of the Board of Directors of the Company
on November 30, 2023. Mr. Liu has years of experience in capital markets, financial and business management, and strategic planning and
development.

 Naihui Miao Since January
2006, Mr. Miao has served as Director, Secretary and Vice President of the Company. He is in charge of sales, human resource and business
management. Mr. Miao has years of experience in the chemical industry, business operations and management, and strategic planning and
development..

 Yibo Yang was elected as a director on November
30, 2023. Mr. Yang has been in the chemical industry for more than ten years. Mr. Yang is expected to contribute the Board's vision
for the development of the Company.

 Yang Zou was appointed
as a Director on March 2, 2011. Mr. Zou has served as the Vice Director of Beijing Zhongtianhuamao Accounting Firm (General Partnership)
since July 1, 2016. He is a Certified Public Accountant and holds the certificate of Certified Internal Auditor. Mr. Zou has extensive
experience in auditing and accounting related matters.

 Shitong Jiang was appointed
as a Director on April 23, 2008. Mr. Jiang is Chief of the Shouguang City Audit Bureau, Shandong Province. He has been with the audit
bureau since 1990. Mr. Jiang has many years of auditing and management experience with PRC government departments.

 Donghshan Wang was elected
as a Director of the Company, and joined the Compensation Committee and the Nominating and Corporate Governance Committee, on November
30,2023. Mr. Whang has vast experience in management, finance, and accounting related matters.

 Shengwei Ma was appointed
as a Director on December 18, 2019. Mr. Ma holds a Senior Accountant Certificate. Mr. Ma has extensive experience in financial, accounting
and management related matters.

 Code of Ethics

 The Board has adopted a code of
ethics applicable to Company's directors, officers, and employees. The code of ethics is available at Company's website, www.gulfresourcesinc.com.

 Insider Trading Policy

 We have adopted an Insider Trading
Policy (the "Insider Trading Policy"), which applies to all directors, officers, employees, independent contractors, and consultants
of the Company and its subsidiaries, as well as certain other persons. The Insider Trading Policy is designed to promote compliance with
U.S. federal and state securities laws, rules and regulations and the applicable rules and regulations of Nasdaq, with respect to the
purchase, sale and/or disposition of the Company's securities. The Insider Trading Policy addresses the implementation of certain
trading blackout periods in the Company's securities for Company insiders. A copy of the Insider Trading Policy is filed as Exhibit
19 to this 2024 Form 10-K.

 Board Meetings

 The Board of Directors and its committees held the following
number of meetings during 2024:

 Board of Directors

 Audit Committee

 Compensation Committee

 Nominating Committee

 Directors or Executive Officers
involved in Bankruptcy or Criminal Proceedings

 To our knowledge, during
the last ten years, none of our directors and executive officers (including those of our subsidiaries) has:

 had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses;

 been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

 been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; or

 been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 Stockholder Communications

 Stockholders can mail communications
to the Board, c/o CEO, Gulf Resources Inc., Level 11, Vegetable Building, Industrial
Park of the East City, Shouguang City, Shandong Province, 262700, the People's Republic of China,
who will forward the correspondence to each addressee.

 Section 16(a) Beneficial Ownership Reporting Compliance

 Section 16(a) of the Securities Exchange Act of 1934 requires Company's
directors and executive officers and any beneficial owner of more than 10% of any class of Company equity security to file reports of
ownership and changes in ownership with the Securities and Exchange Commission and furnish copies of the reports to Company.

 Item 11. Executive Compensation

 Set forth below is information
regarding the compensation paid during the year ended December 31, 2023 and 2024 to our principal executive officer and principal financial
officer, who are collectively referred to as "named executive officers" elsewhere in this Annual Report.

 FISCAL YEAR 2024 COMPENSATION
TABLE

 Name and Principal

 Stock

 Option

 Non-Equity Incentive Plan

 Nonqualified Deferred Compensation

 All Other

 Position

 Year

 Salary ($)

 Bonus($)

 Awards($)

 Awards$(1)

 Compensation ($)

 Earnings ($)

 Compensation ($)

 Total ($)

 2023

 —

 —

 61,200
 (1)

 —

 —

 —

 —

 61,200

 CEO

 2024

 —

 —

 —
 (1)

 —

 —

 —

 —

 —

 2023

 16,943

 —

 61,200
 (1)

 —

 —

 —

 —

 78,143

 CFO

 2024

 16,693

 —

 —
 (1)

 —

 —

 —

 —

 16,693

 2023

 16,943

 —

 61,200
 (1)

 —

 —

 —

 —

 78,143

 COO

 2024

 16,693

 —

 —
 (1)

 —

 —

 —

 —

 16,693

 (1)
 Represents the dollar amount recognized for financial statement reporting purposes in accordance with Financial Accounting Standards
Board Accounting Standards Codification (FASB ASC) 718 – "Compensation - Stock Compensation."

 Except as disclosed below under
the caption "Compensation of Directors," we have not paid or accrued any fees to any of our executive directors for serving
as a member of our Board of Directors. We do not have any retirement, pension, profit sharing or insurance or medical reimbursement plans
covering our officers and directors. Our executive officers are reimbursed by us for any out- of-pocket expenses incurred in connection
with activities conducted on our behalf. There is no limit on the amount of these out-of-pocket expenses and there will be no review
of the reasonableness of such expenses by anyone other than our Board of Directors, which includes persons who may seek reimbursement,
or a court of competent jurisdiction if such reimbursement is challenged.

 Grants of Plan-Based Awards

 The Company did not grant any shares
of our Common Stock to each of our named executive officers, under Company's 2019 Omnibus Equity Incentive Plan, as amended, during
fiscal year 2024.

 FISCAL YEAR 2023 GRANTS OF PLAN-BASED AWARDS

 Estimated Future Payouts

Under Non-Equity

 Incentive Plan Awards

 Estimated Future Payouts

Under Equity Incentive

Plan Awards

 All Other Stock Awards: Number of Shares of

 Option Awards: Number of Securities

 Exercise or Base Price of

 Grant Date Fair Value of Stock

 Name

 Grant Date

 Threshold

 Target

 Maximum

 Threshold

 Target

 Maximum

 Stocks or Units

 Underlying Options

 Option Award($)

 and Options ($)

 Xiaobin Liu,

 CEO

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Min Li,

 CFO

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Naihui Miao,

 COO

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Narrative Discussion

 The following employment agreements were entered into by
the Company and the named executive officers:

 The employment
agreement for Xiaobin Liu to serve as Chief Executive Officer of the Company was renewed on June 1, 2022 with a term of three years. Xiaobin
Liu is also a member of the Board of Directors. Pursuant to the agreement, Mr. Liu's service shall be compensated in the Company's
shares only under the Company's equity incentive plan.

 The employment
agreement for Min Li to serve as Chief Financial Officer of the Company was renewed on January 1, 2025 with a term of one year. Pursuant
to the agreement, Mr. Li shall receive annual cash compensation equal to approximately $18,500 subject to changes in the foreign exchange
rate and market conditions and be compensated in the Company's shares under the Company's equity incentive plan.

 The employment
agreement for Naihui Miao to serve as Chief Operating Officer of the Company was renewed on June 1, 2022 with a term of three years. Mr.
Miao is also a member of the Board of Directors. Pursuant to the agreement, Mr. Miao shall receive annual cash compensation equal to approximately
$18,500 subject to changes in the foreign exchange rate and market conditions, and be compensated in the Company's shares under
the Company's equity incentive plan.

 In addition, each of our named
executive officers is entitled to participate in any and all benefit plans from time to time, in effect for employees, along with vacation,
sick and holiday pay in accordance with policies established and in effect from time to time.

 Potential payments upon termination
or change-in-control

 Assuming the employment of the
Company's named executive officers was to be terminated without cause or for good reason or in the event of change in control, as
of December 31, 2024, the following individuals would have been entitled to payments in the amounts set forth opposite to their name in
the below table:

 Name

 Cash Payment

 Xiaboin Liu

 $

 $

 $

 Recovery of Erroneously Awarded Compensation

 None.

 Outstanding Equity Awards at Fiscal Year-End

 The following table sets forth,
for each named executive officer, information regarding unexercised stock options, unvested stock awards, and equity incentive plan awards
outstanding as of December 31, 2024.

 Policies and Practices for
Granting Certain Equity Awards

 Our policies and practices regarding
the granting of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity
of our executive compensation program. The Compensation Committee is responsible for the timing and terms of equity awards to executives
and other eligible employees.

 The timing of equity award grants
is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance
targets, market conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards;
instead, each grant is considered on a case-by-case basis to align with the Company's strategic objectives and to ensure the competitiveness
of our compensation packages.

 In determining the timing and
terms of an equity award, the Board or the Compensation Committee may consider material nonpublic information to ensure that such grants
are made in compliance with applicable laws and regulations. The Board's or the Compensation Committee's procedures to prevent
the improper use of material nonpublic information in connection with the granting of equity awards include oversight by legal counsel
and, where appropriate, delaying the grant of equity awards until the public disclosure of such material nonpublic information.

 The Company is committed to maintaining
transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the
disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews
its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to
serve the best interests of the Company and its shareholders.

 OUTSTANDING EQUITY AWARDS AT 2024
FISCAL YEAR END

 OPTION AWARDS

 STOCK
 AWARDS

 Equity
 Incentive

 Equity Incentive

 Plan
 Awards:

 Equity Incentive

 Plan Awards:

 of

 of

 of

 Plan Awards:

 Market or Payout

 Securities

 Securities

 Securities

 Number of

 Value of Unearned

 Underlying

 Underlying

 Underlying

 Number of Shares

 Market
 Value of

 Unearned Shares,

 Shares, Units or

 Unexercised

 Unexercised

 Unexercised

 or Units of Stock

 Shares
 or Units of

 Units or Other

 Other Rights That

 Options
 (#)

 Options
 (#)

 Unearned
 Options

 Option
 Exercise

 Option
 Expiration

 That Have Not

 Stock
 That Have

 Rights That Have

 Have Not Vested

 Name

 Exercisable

 Unexercisable

 (#)

 Price
 ($)

 Date

 Vested (#)

 Not
 Vested ($)

 Not Vested (#)

 ($)

 Xiaobin Liu, CEO

 —

 —

 —

 —

 —

 0 (1)

 —

 —

 —

 Min Li, CFO

 —

 —

 —

 —

 —

 0 (1)

 —

 —

 —

 Naihui Miao, COO

 —

 —

 —

 —

 —

 0 (1)

 —

 —

 —

 (1) Represents the shares of
Common Stock granted, which are subject to the Awardee's continued service with the Company, the shares of Restricted Stock shall
vest immediately, no longer be subject to restrictions and become transferable pursuant to the terms of the Plan.

 Option Exercises and Stock Vested

 The following table sets forth aggregate information with
respect to each named executive officer regarding the exercise of stock options, stock appreciation rights, and similar instruments and
the vesting of restricted stock, restricted stock units and similar instruments, for fiscal year 2024.

 FISCAL YEAR 2024 OPTION EXERCISES
AND STOCK VESTED

 OPTION AWARDS

 STOCK AWARDS

 Number of Shares

 Number of Shares

 Name Acquired on Exercise (#)

 Value Realized on Exercise ($)

 Acquired on Vesting (#)

 Value Realized onVesting ($)

 Xiaobin Liu, CEO

 —

 —

 —

 —

 Min Li, CFO

 —

 —

 —

 —

 Naihui Miao, COO

 —

 —

 —

 —

 Compensation Committee Interlocks and Insider Participation

 We are a smaller reporting company as defined by Rule
12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 Compensation of Directors

 The following table sets forth information regarding compensation
of each director, excluding our executive directors, Xiaobin Liu and Naihui Miao, who do not receive compensation in their capacity as
executive directors, for fiscal year 2024.

 FISCAL YEAR 2024 DIRECTOR COMPENSATION

 Change in

 Pension Value

 and

 Non-Equity

 Nonqualified

 Fees Earned

 Stock

 Option

 Incentive Plan

 Deferred

 All Other

 or Paid in

 Awards

 Awards

 Compensation

 Compensation

 Compensation

 Name

 Cash ($)

 ($)(1)

 $

 ($)

 Earnings ($)

 ($) Total ($)

 Ming Yang

 $
 —

 —

 —

 —

 —

 $
 —

 Yibo Yang

 10,016

 —

 —

 —

 —

 10,016

 Shitong Jiang

 —

 —

 —

 —

 —

 —

 Yang Zou

 —

 —

 —

 —

 —

 —

 Tengfei Zhang

 —

 —

 —

 —

 —

 —

 Shengwei Ma

 —

 —

 —

 —

 —

 —

 Dongshan Wang

 —

 —

 —

 —

 —

 (1) Represents the dollar amount recognized for financial
statement reporting purposes in accordance with FASB ASC 718 – "Compensation – Stock Compensation."

 Pursuant to the terms of their
director agreements, each of our independent directors, receive 1,000 shares of our restricted common stock on an annual basis. The grant
of restricted common stock is contingent upon the director's continued service with the Company. We do not pay any cash compensation
to the independent directors.

 Certain Relationships and Related
Transactions

 It is our policy to not enter
any transaction (other than compensation arrangements in the ordinary course) with any director, executive officer, employee, or principal
stockholder or party related to them, unless authorized by a majority of the directors having no interest in the transaction, upon a favorable
recommendation by the Audit Committee (or a majority of its disinterested members).

 Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters

 The following table sets forth certain information
regarding beneficial ownership of Common Stock, as of the date of this annual report, by each of Company's directors and executive
officers; all executive officers and directors as a group, and each person known to Company to own beneficially more than 5% of Company's
Common Stock. Except as otherwise noted, the persons identified have sole voting and investment powers with respect to their shares. As
of the date of this annual report, there were 13,346,618 shares of the Company's Common Stock outstanding.

 Name of Beneficial Owner (1)

 Number of Shares

 Percent of Class

 Xiaobin Liu (CEO and Chairman)

 138,115

 (2
)

 %

 Yibo Yang (Director)

 —

 —

 Min Li (CFO)

 138,115

 (2
)

 %

 Naihui Miao (COO)

 138,115

 (2
)

 %

 Shengwei Ma (Director)

 4,000

 (3
)

 *

 Yang Zou (Director)

 6,000

 (4
)

 *

 Shitong Jiang (Director)

 6,000

 (5
)

 *

 Dongshan Wang (Director)

 3,000

 (6
)

 *

 All Directors and Executive Officers as a Group (eight persons)

 433,345

 3.2
 %

 Wenxiang Yu

 1,015,945

 (7
)

 7.6
 %

 Shandong Haoyuan Industry Group Ltd.

 824,947

 (7
)

 6.2
 %

 Ming Yang

 1,985,675

 (8
)

 14.9
 %

 * Less than 1%.

 (1)
 The address of each director and executive officer is c/o Gulf Resources, Inc., Level 11,
Vegetable Building, Industrial Park of the East City, Shouguang City, Shandong Province, 262700, the People's Republic of China.

 (2)
 Consists of 138,115 shares held by each individual.

 (3)
 Consists of 4,000 shares held by Mr. Ma.

 (4)
 Consists of 6,000 shares held by Mr. Zou.

 (5)
 Consists of 6,000 shares held by Mr. Jiang.

 (6)
 Consists of 3,000 shares held by Mr. Wang.

 (7)
 The address of the shareholder is c/o Gulf Resources, Inc., Level 11, Vegetable Building,
Industrial Park of the East City, Shouguang City, Shandong Province, 262700, the People's Republic of China. Chen Yang serves as
the General Manager, and owns 82% equity interest, of Shandong Haoyuan Industry Group Ltd.

 (8)
 Consists of 634,770 shares owned by Ming Yang, 1,015,945 shares owned by Ms. Wenxiang Yu,
the wife of Mr. Yang, 334,960 shares owned by Mr. Zhi Yang, Mr. Yang's son. Mr. Yang disclaims beneficial ownership of the shares
owned by his wife and son.

 Equity Compensation Plan Information

 2019 Incentive Stock Plan

 On December 18, 2019, the Company's Annual General Meeting adopted
and approved the 2019 Omnibus Equity Incentive Plan of Gulf Resources, Inc.(the"2019 Plan"). Under the 2019 Plan, the Company
has reserved a total of 2,068,398 shares of common stock for issuance as or under awards to be made to the directors, officers, employees
and/or consultants of the Company and its subsidiaries.

 On November 30, 2021, the Company's Annual General Meeting approved
to amend the 2019 Plan to increase the number of shares of common stock authorized for issuance under the plan by 900,000 shares.

 As of December 31, 2024, there is no shares under the 2019 Plan have
been issued, and 561,801 shares remained for future issuance under the 2019 Plan.

 Securities Authorized for Issuance under Equity Compensation Plans

 As of December 31, 2024, our 2019
Equity Incentive Plan was in effect.

 The following table provides information as of December 31, 2024 about
our equity compensation plans and arrangements.

 Number of securities

 remaining available for

 Number of securities to

 Weighted-average

 future issuance under

 be issued upon exercise

 exercise price of

 equity compensation plans

 of outstanding options,

 outstanding options,

 (excluding securities

 Plan category

 warrants and rights

 warrants and rights

 reflected in column (a))

 (a)

 (b)

 (c)

 Equity compensation plans approved by security

 --

 --

 561,801

 Equity compensation plans not approved by

 --

 --

 --

 Total

 --

 --

 561,801

 Item 13. Certain Relationships and Related Transactions,
Director Independence

 Certain Relationships and Related Transactions

 Our policy is that a contract
or transaction either between the Company and a director, or between a director and another company in which he is financially interested
is not necessarily void or void-able if the relationship or related party transactions are approved or ratified by the Audit Committee.

 We had not entered into any transactions
with any related person had or will have a direct or indirect material interest (other than compensation described under "Executive
Compensation") and the amount involved exceeded or exceeds the lesser of $120,000 and 1% of the average of our total assets at December
31, 2023 and 2024.

 Procedures for Approval of Related Party Transactions

 Our Board of Directors is charged
with reviewing and approving all potential related party transaction whether or not such transactions exceed $120,000. We have not adopted
other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case basis.

 Director Independence

 The Board has determined that
Yang Zou, Shengwei Ma, Shitong Jiang and Dongshan Wang are "independent" under the current independence standards of Rule
5605(a)(2) of the Marketplace Rules of The Nasdaq Stock Market, LLC and meet the criteria set forth in Rule 10A(m)(3) under the U.S. Securities
Exchange Act of 1934, as amended.

 Item 14. Principal Accounting Fees and Services
Audit Fees

 Our independent
public accounting firm is GGF CPA LTD., Level 3, Shop 119 No. 20, Jingang Avenue, Nansha District, Guangzhou, Guangdong, PCAOB Auditor
ID 2729.

 The aggregate fees billed to the Company by its principal
accountant for the last two fiscal years were as follows:

 Fees

 2023

 2024

 Audit Fees

 $ 188,000

 $ 188,000

 Audit Related Fees

 —

 —

 Tax Fees

 —

 —

 All Other Fees

 —

 —

 Total

 188,000

 188,000

 This category consists of fees
for the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q and
services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings
or engagements for those fiscal years.

 Audit Fees

 This category consists of fees
for the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q and
services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings
or engagements for those fiscal years.

 Audit-Related Fees

 This category consists of services
by our independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are
not reported above under Audit Fees. This category includes accounting consultations on transaction and proposed transaction related matters.
There were no such fees incurred by the Company in the years ended December 31, 2024 and 2023.

 Tax Fees

 The tax fee of $5,500 and $5,500 relate to tax compliance
services rendered in each of the years ended December 31, 2024 and 2023.

 All Other Fees

 There are no other fees to disclose.

 Pre-Approval of Services

 The Audit Committee appoints the
independent accountant each year and pre-approves the audit services. The Audit Committee chair is authorized to pre-approve specified
non-audit services for fees not exceeding specified amounts, if he promptly advises the other Audit Committee members of such approval.

 Item 15. Exhibits and Financial Statement Schedules.

 (a)
 Financial Statements and Schedules

 (1)
 Financial Statements – The financial statements filed as part of this filing
are listed on the index to the Financial Statements and Supplementary Data, Item 8 of Part II, on page F-1.

 (2)
 Financial Statement Schedules – "Schedule I – Parent Only Financial
Information" filed as part of this filing is listed on the Financial Statements and Supplementary Data, Item 8 of Part II, on pages
S-1 and S-2. All other financial statement schedules have been omitted because they are not applicable, or the information required is
set forth in the Consolidated Financial Statements or related notes thereto.

 (b)
 Exhibit Index

 2.1
 Agreement and Plan of Merger dated December 10, 2006, among the Registrant, DFAX Acquisition vehicle, Inc., Upper Class Group Limited and the shareholders of UCG, incorporated herein by reference to Exhibit 10 to the Registrant's Current Report on Form 8-K filed on December 12, 2006.

 2.2
 Share Exchange Agreement among the Registrant, Upper Class Limited, Shouguang Yuxin Chemical Industry Company Limited and shareholders of Shouguang Yuxin Chemical Industry Company Limited, incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on February 9, 2007.

 2.3
 Agreement and Plan of Merger dated November 24, 2015, incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on December 1, 2015.

 3.1
 Articles of Incorporation of Gulf Resources Inc., incorporated herein by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on December 1, 2015.

 3.2
 Bylaws of Gulf Resources Inc., incorporated herein by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8- K filed on December 1, 2015.

 3.4
 Certificate of Amendment to Articles of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on January 28, 2020.

 4.1
 Description of Securities, incorporated herein by reference to Exhibit 4.1 to the Registration's Annual Report on Form 10-K filed on April 14, 2020.

 10.1
 Taiwan Island Ecological Culture City Project Demolition Compensation Agreement for Factory #6, dated November 25, 2016, incorporated by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K, filed on November 29, 2016.

 10.2
 Stock Repurchase Agreement dated as of November 30, 2022 by and between the Company and Xiaobin Liu, incorporated by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K, filed on December 1, 2022.

 10.3
 Stock Repurchase Agreement dated as of November 30, 2022 by and between the Company and Min Li, incorporated by reference to Exhibit 10.2 to the Registrant's current report on Form 8-K, filed on December 1, 2022.

 10.4
 Stock Repurchase Agreement dated as of November 30, 2022 by and between the Company and Naihui Miao, incorporated by reference to Exhibit 10.3 to the Registrant's current report on Form 8-K, filed on December 1, 2022.

 10.5
 Crude Salt Field Acquisition Agreement dated as of June 26, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang Qingshuibo Farm Co., LTD., incorporated by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K, filed on July 2, 2024.

 10.6
 Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.2 to the Registrant's current report on Form 8-K, filed on July 2, 2024.

 10.7
 Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.3 to the Registrant's current report on Form 8-K, filed on July 2, 2024.

 10.8
 Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.4 to the Registrant's current report on Form 8-K, filed on July 2, 2024.

 10.9
 Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.5 to the Registrant's current report on Form 8-K, filed on July 2, 2024.

 10.10
 Amendment to Crude Salt Field Acquisition Agreement dated as of June 26, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang Qingshuibo Farm Co., LTD., incorporated by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K, filed on December 19, 2024.

 10.11
 Amendment to Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Dingjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.2 to the Registrant's current report on Form 8-K, filed on December 19, 2024.

 10.12
 Amendment to Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Shanjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.3 to the Registrant's current report on Form 8-K, filed on December 19, 2024.

 10.13
 Amendment to Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang City Yangkou town Zhengjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.4 to the Registrant's current report on Form 8-K, filed on December 19, 2024.

 10.14
 Amendment to Crude Salt Field Acquisition Agreement dated as of June 27, 2024, by and between Shouguang Hengde Salt Industry Co. Ltd and Shouguang city Yangkou town Renjia Zhuangzi village stock economic cooperative, incorporated by reference to Exhibit 10.5 to the Registrant's current report on Form 8-K, filed on December 19, 2024.

 Code of Ethics, incorporated herein by reference to Exhibit 14 to the Registrant' annual report on Form 10-K filed on March 16, 2009.

 16.1
 Letter from Morison Cogen LLP, dated July 7, 2021, incorporated by reference to Exhibit 16.1 to the Registrant's current report on Form 8-K, filed on July 7, 2021.

 16.2
 Letter from WWC, P.C., dated April 16, 2024, incorporated by reference to Exhibit 16.1 to the Registrant's current report on Form 8-K, filed on April 16, 2024.

 19.
 Insider Trading Policy. *

 21.1
 List of Subsidiaries, incorporated herein by reference to Exhibit 21.1 to the Registrant's annual report on Form 10-K filed on March 16, 2018.

 23.1
 Consent of GGF CPA LIMITED, Certified Public Accountants, an independent registered public accounting firm.*

 31.1
 Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

 31.2
 Certification pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

 32.1
 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

 97.1
 Clawback Policy, incorporated by reference to Exhibit 97.1 to the Registrant's annual report on Form 10-K, filed on September 27, 2024.

 Cover Page

 * Filed herewith.

 Item 16. Form 10-K Summary.

 Not applicable.

 SIGNATURES

 Pursuant to the requirements of
Section 13 or 15(d) of the Securities and Exchange Act, the Company has duly caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.

 Date: April 11,2025

 By:

 /s/ Xiaobin Liu

 By:

 Title:

 Chief Executive Officer

 By:

 /s/ Min Li

 By:

 Title:

 Chief Financial Officer

 Pursuant to the requirements of the
Securities and Exchange Act of 1934, this Report has been signed below by the following person on behalf of the Company and in the capacities
and on the dates indicated.

 SIGNATURE

 TITLE

 DATE

 /s/ Xiaobin Liu

 /s/ Min Li

 Chief Executive Officer and Director

 /s/ Yibo Yang

 Chief Financial Officer

 Yibo Yang

 /s/ Naihui Miao

 /s/ Dongshan Wang

 Dongshan Wang

 /s/ Yang Zou

 Yang Zou

 /s/ Sheng Wei Ma

 Sheng Wei Ma

 /s/ Shi Tong Jiang

 Shi Tong Jiang