Financial Analysis

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 i …

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NOTE 8 OPERATING LEASE RIGHTOF-USE ASSETS The Company has the right 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 . …

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(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 has 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. …

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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 . NOTE 10 RELATED PARTY TRANSACTIONS Continued a) Related parties Name of related parties Position Yang Ming Shareholder Liu XiaoBin Chief Executive Officer Li Min Chief Financial Officer Miao NaiHui Chief Operating Officer Chengdu Dianjinshi Culture media Co., LTD Affiliated with company officers b) December 31, 2024 December 31, 2023 Amount due to related parties: Yang Ming $ 410,350 $ 416,484 Liu XiaoBin 887,214 887,214 Li Min 636,264 641,480 Miao NaiHui 650,980 641,480 Total 2,584,808 2,586,658 c) December 31, 2024 December 31, 2023 Due to related party : Chengdu Dianjinshi Culture media Co., LTD $ 25,040 Total $ 25,040 $ …

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NOTE 18 BUSINESS SEGMENTS ASC 280, Disclosures about Segments, of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise engaging in business activities from which they may earn revenues and incurred expenses, and about which separate financial information is available that is evaluated regularly by the chief operating decision-marker, or decision-making group (the CODM), in deciding how to allocate resources and assessing performance. The Companys Chief Executive Officer (Mr. Xiaobin Liu) is determined as the CODM of the Company, Mr. Liu measures the performance of each segment based on metrics of revenue and profit before taxes from operations and uses these results to evaluate the performance of, and to allocate resources to each of the segments. The Company has organized operations into four different business segments: (1) bromine, (2) crude salt, (3) chemicals products, (4) natural gas. As of December 31, 2024, and December 31, 2023, the detailed income statements of each of our divisions are presented below: Year Ended December 31, 2024 (Restated) Operating Segment Bromine* Crude Salt* Chemical Products Natural Gas Segment Total Corporate Corporate Total Net revenue (external customers) $ 5,549,815 $ 2,049,988 $ $ 61,207 $ 7,661,010 $ $ 7,661,010 Net revenue (intersegment) Loss from operations before income tax expense (17,455,130 ) (668,110 ) (3,185, …

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NOTE 13 EQUITY Reverse Stock Split and Authorized Shares On October 27, 2025, the Company completed a 1-for-10 reverse stock split of the Companys common stock, such that for each ten 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. 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. During the year ended December 31, 2023, the Company granted in the aggregate, 295,000 restricted shares of common stock to a consultant, the …

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NOTE 22 - SUBSEQUENT EVENT Subsequent Events Subsidiaries Private Placement On January 20, 2025, the company issued total 295,000 shares to its employees, officers and consultants 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. 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 …

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