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<SEC-DOCUMENT>0001193805-07-000978.txt : 20070404
<SEC-HEADER>0001193805-07-000978.hdr.sgml : 20070404
<ACCEPTANCE-DATETIME>20070404150520
ACCESSION NUMBER:		0001193805-07-000978
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20070402
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20070404
DATE AS OF CHANGE:		20070404

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GULF RESOURCES, INC.
		CENTRAL INDEX KEY:			0000885462
		STANDARD INDUSTRIAL CLASSIFICATION:	CHEMICALS & ALLIED PRODUCTS [2800]
		IRS NUMBER:				133637458
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-20936
		FILM NUMBER:		07748444

	BUSINESS ADDRESS:	
		STREET 1:		SHENNAN ZHONG ROAD
		STREET 2:		PO BOX 031-114
		CITY:			SHENZHEN
		STATE:			F4
		ZIP:			518000
		BUSINESS PHONE:		212-561-3604

	MAIL ADDRESS:	
		STREET 1:		SHENNAN ZHONG ROAD
		STREET 2:		PO BOX 031-114
		CITY:			SHENZHEN
		STATE:			F4
		ZIP:			518000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DIVERSIFAX INC
		DATE OF NAME CHANGE:	19940331
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e601946_8k-gulf.txt
<DESCRIPTION>CURRENT REPORT
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

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

                Date of Report (date of earliest event reported):
                                  April 2, 2007


                              GULF RESOURCES, INC.
- --------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


       Delaware                     000-20936                    13-3637458
     -------------                -------------                 ------------
       State of                    Commission                   IRS Employer
     Incorporation                 File Number                   I.D. Number


        CHEMING INDUSTRIAL PARK, UNIT - HAOYUAN CHEMICAL COMPANY LIMITED,
                     SHOUGUANG CITY, SHANDONG, CHINA 262714
- --------------------------------------------------------------------------------
                     Address of principal executive offices

                  Registrant's telephone number: (310)470-2886

                               Shennan Zhong Road
                                 PO Box 031-114
                             Shenzhen, China 518000
- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)
|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))
|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 2.02. Results of Operations and Financial Condition.

Item 7.01. Regulation FD Disclosure.

      The following information is furnished under Item 2.02 - Results of
Operations and Financial Condition, and Item 7.01 - Regulation FD Disclosure:

      On April 2, 2007, Gulf Resources, Inc. issued a press release announcing
its financial results for the year ended December 31, 2006. A copy of such press
release is attached to this report as Exhibit 99.1 and is incorporated herein by
reference.


                                       2
<PAGE>

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

Exhibits

99.1  Press Release dated April 2, 2007 - "Gulf Resources, Inc. Reports 2006
      Financial Results"


                                       3
<PAGE>

                                   SIGNATURES
                                   ----------

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

Dated: April 3, 2007

                                                     GULF RESOURCES, INC.


                                                     By: /s/ Ming Yang
                                                         -----------------------
                                                         Ming Yang,
                                                         Chief Executive Officer


                                       4
<PAGE>

                                  Exhibit Index

99.1  Press Release dated April 2, 2007 - "Gulf Resources, Inc. Reports 2006
      Financial Results"


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>e601946_ex99-1.txt
<DESCRIPTION>PRESS RELEASE DATED APRIL 2, 2007
<TEXT>

                                  Exhibit 99.1

               Gulf Resources, Inc. Reports 2006 Financial Results

LOS ANGELES, CALIFORNIA and SHENZHEN, CHINA, April 2, 2007 - Gulf Resources,
Inc. (the "Company") (OTC Bulletin Board: GUFR) a leading producer of Bromine
and crude salt in China through its wholly-owned subsidiary Shuoguang City
Haoyuan Chemical Company Limited (SCHC), announced today operating results for
the year ending December 31, 2006.

The company's financial results reflect full year pro forma revenues and profits
for its operating company SCHC, which was acquired by Gulf Resources, Inc.,
formerly Diversifax, Inc. in December 2006. The results reported for the fiscal
year 2005 reflect the operating results of SCHC.

These results exclude any contribution from the February 2007 acquisition of
Shouguang Yuxin Chemical Industry Company Limited ("SYCI"), a manufacturer of
chemical products utilized by customers in the oil and gas distribution, oil
field drilling, wastewater processing, and paper manufacturing industries. Pro
forma results including the operations of SYCI, can be found in the Company's
8-K filed with the Securities and Exchange Commission on February 9, 2007.

Net sales for 2006 were $17.8 million which was derived exclusively from the
sale of bromine. During 2006 the Company's two largest customers accounted for
74% of total revenue. The Company's crude salt plants began production at the
end of December and therefore provided no sales contribution during the 2006
year. The Company sold 10,035 tons of bromine with an average selling price
(ASP) of $1,828 per ton.

Cost of sales for the 2006 year was $10.5 million, yielding gross profits of
$7.3 million and gross margins of 41.2%. Electricity expenses were one of the
largest components of costs of sales at $2.7 million. General and administrative
expenses were $5.6 million, of which $5.3 million was a non-cash charge related
to consulting expenses which was paid through the issuance of 4.4 million shares
of common stock. The Company does not anticipate this to be a recurring cost and
thus believes G&A expenses will decrease significantly during 2007.

Operating income for the year totaled $1.7 million which was impacted by the
previously mentioned non-cash equity compensation charge of $5.3 million. Net
income was $1.1 million with earnings per share of $.04 based on 27.0 million
fully diluted shares outstanding. Excluding the aforementioned non-cash equity
compensation charge, pro forma net income was $6.5 million, with $0.24 in
earnings per diluted weighted average share.

Net cash provided by operating activities for 2006 totaled $3.5 million. On
December 31, 2006 the company reported a cash balance of $3.7 million, a current
ratio of 1.0 to 1.0 and shareholder's equity of $3.5 million.

"During 2006, we made further progress in establishing our presence as a premier
bromine producer for the domestic China market while prudently managing both
production and operating expenses. We increased the utilization efficiency of
both raw and recyclable packaging materials while passing along the
responsibility of shipping costs to our customers, two initiatives which we
expect to benefit margins during 2007. In addition, we recently brought our
crude salt production online and expect this to contribute to revenues during
the current year," stated Mr. Ming Yang, Chairman and CEO of Gulf Resources,
Inc.

<PAGE>

Bromine is utilized as an important component to manufacture dyes, fire
retardants, insect repellants, oilfield completion fluids, perfumes,
pharmaceuticals, photographic and water treatment chemicals, and in the paper
industry. The Company's customers typically process bromine into semi or
finished products. It is estimated that the annual domestic bromine market in
China is approximately $290 million in China and $1.24 billion globally.

SCHC is one of six companies in China which holds a license to produce and
distribute bromine. The Company currently maintains a 50-year mineral rights and
land lease covering 77,100 acres of property with proven and probable reserves
of 780,000 tons of bromine. Current bromine production capacity is estimated
between 8,000 to 12,000 tons annually.

"There are several large bromine reserves controlled by local producers in our
immediate geographic region, many which are undercapitalized but possess the
necessary licenses to produce and distribute, thus providing a substantial
opportunity for consolidation. The Company's management team is currently
evaluating several acquisition opportunities which we expect to pursue during
this calendar year. In addition, we are evaluating the acquisition of direct
customers. This vertically integrated methodology would enable us to further
increase the size and scope of our Company, have more control over the supply
chain, further improve our collective production capacity, leverage and cross
sell to a larger base of end customers, which will lead to both economies of
scale and further margin enhancement opportunities, " Mr. Ming Yang concluded.

Consistent with this strategy, the Company completed its first acquisition on
February 5, 2007 through the purchase of Shouguang Yuxin Chemical Industry
Company, Ltd. (SYCI) including its 14,500 square foot, ISO9001-2000 certified
manufacturing facility. During 2006, SYCI produced and sold approximately 10,000
tons of chemical products utilized in oil & gas field explorations and 7,000
tons of papermaking chemical agents, which resulted in approximately $13.9
million in revenues and $2.65 million in net income. SYCI maintains Guarantee
Certificate from the China Association for Quality, is accredited by the
Shandong Province as a Provincial Credit Enterprises and is a Class One supplier
for both China Petroleum & Chemical Corporation (SINOPC) and PetroChina Company
Limited, both which are currently customers. SYCI has been engaged in research
and development projects with Shandong University, Shandong Institute of Light
Industry, Southeast University and other higher education institutions, with a
focus on developing new chemical product and medicine intermediates.

As of March 22, 2007 Gulf Resources had approximately 48.2 million shares
outstanding.

Gulf Resources, Inc.

Gulf Resources, Inc, operates through two wholly-owned subsidiaries: SCHC which
is engaged in manufacturing and trading Bromine and Crude Salt in China. Bromine
is used to manufacture a wide variety of bromine compounds used in industry and
agriculture, and SYCI which manufactures and sells chemical products utilized in
oil & gas field explorations and as papermaking chemical agents. For more
information, please visit http://www.gulfresourcesco.com.

Investor Relations Contact:
Ethan Chuang (714) 858-1147
Ethan@gulfresourcesco.com

Matthew Hayden
HC International, Inc.
(858) 704-5065
matt@haydenir.com


                                       2
<PAGE>

Safe Harbor Statement:

Certain statements in this news release may contain forward-looking information
about Gulf Resources and its subsidiaries business and products within the
meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the
Securities Exchange Act of 1934, and are subject to the safe harbor created by
those rules. The actual results may differ materially depending on a number of
risk factors including, but not limited to, the following: general economic and
business conditions, product development, shipments to end customers, market
acceptance of new and existing products, additional competition from existing
and new competitors, changes in technology, and various other factors beyond its
control. All forward-looking statements are expressly qualified in their
entirety by this Cautionary Statement and the risks factors detailed in the
Company's reports filed with the Securities and Exchange Commission. Gulf
Resources undertakes no duty to revise or update any forward-looking statements
to reflect events or circumstances after the date of this release.

GAAP note: This press release includes financial measures for net income (loss)
and diluted earnings per share calculations which excludes certain non-cash
costs not calculated in accordance with generally accepted accounting principles
(GAAP). Management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance that enhances
management's and investors' ability to evaluate the Company's net income and
income per share and to compare it with historical net income and income per
share.

The financial information stated above and in the tables below has been
abstracted from the Company's Form 10-K for the year ended December 31, 2006
filed with the Securities and Exchange Commission and should be read in
conjunction with the information provided therein.

                                      # # #

                     - FINANCIAL RESULTS AND TABLES FOLLOW -


                                       3
<PAGE>

                GULF RESOURCES, INC. (formerly DIVERSIFAX, INC.)
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2006 AND 2005

                                                       2006             2005
                                                    -----------      -----------

                       ASSETS

CURRENT ASSETS
   Cash                                             $ 3,725,824      $ 2,409,781
   Accounts receivable                                1,187,727          325,193
   Inventories                                           53,263           89,383
   Due from related party                               540,081          503,787
   Prepaid land lease                                    11,923              496
   Income tax receivable                              1,111,154               --
                                                    -----------      -----------
                                                      6,629,972        3,328,640

PROPERTY, PLANT AND EQUIPMENT, Net                    2,673,281        2,220,319

PREPAID LAND LEASE, Net of current portion              582,231           23,808
                                                    -----------      -----------
TOTAL ASSETS                                        $ 9,885,484      $ 5,572,767
                                                    ===========      ===========
        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable and accrued expenses            $ 6,148,974      $   330,472
   Due to director                                           --           70,924
   Due to related party                                  15,384           46,322
   Taxes payable                                        177,087        1,325,863
                                                    -----------      -----------
TOTAL LIABILITIES                                     6,341,445        1,773,581
                                                    -----------      -----------
                STOCKHOLDERS' EQUITY

COMMON STOCK; $0.001 par value;
 70,000,000 shares authorized;
 27,017,322 and 26,500,000
 shares issued and outstanding                           27,017           26,500

ADDITIONAL PAID-IN CAPITAL                            1,355,413          419,900

RETAINED EARNINGS - UNAPPROPRIATED                    1,352,648        2,815,396

RETAINED EARNINGS - APPROPRIATED
   Statutory Common Reserve Fund                        447,450          331,223
   Statutory Public Welfare Fund                        223,725          165,611

CUMULATIVE TRANSLATION ADJUSTMENT                       137,786           40,556
                                                    -----------      -----------
TOTAL STOCKHOLDERS' EQUITY                            3,544,039        3,799,186
                                                    -----------      -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 9,885,484      $ 5,572,767
                                                    ===========      ===========


                                       4
<PAGE>

                GULF RESOURCES, INC. (formerly DIVERSIFAX, INC.)
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        YEAR ENDED DECEMBER 31, 2006 AND
                   THE PERIOD MAY 18, 2005 (DATE OF INCEPTION)
                            THROUGH DECEMBER 31, 2005

                                                     2006               2005
                                                  ------------      ------------

NET SALES                                         $ 17,825,097      $ 14,344,296
                                                  ------------      ------------
OPERATING EXPENSES
   Cost of net sales                                10,481,567         9,095,301
   General and administrative expenses               5,614,784           304,451
                                                  ------------      ------------
                                                    16,096,351         9,399,752
                                                  ------------      ------------
INCOME FROM OPERATIONS                               1,728,746         4,944,544

OTHER INCOME
   Interest income                                       5,990               446
                                                  ------------      ------------
INCOME BEFORE INCOME TAXES                           1,734,736         4,944,990

INCOME TAXES - current                                 572,463         1,632,760
                                                  ------------      ------------
NET INCOME                                        $  1,162,273      $  3,312,230
                                                  ============      ============
BASIC AND DILUTED EARNINGS PER SHARE                    $ 0.04      $       0.12
                                                  ============      ============
BASIC AND DILUTED WEIGHTED AVERAGE
 NUMBER OF SHARES                                  27,017,322        26,500,000
                                                  ============      ============


                                       5
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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