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SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION
 12 Months Ended
Dec. 31, 2024
Condensed Financial Information Disclosure [Abstract]  
SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION

SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION

 

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

 

Condensed Balance Sheets

 

                 
   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   24,623    24,623 
Treasury stock; 285,830 shares as of December 31, 2024 and December 31, 2023 at cost   (1,372,673)   (1,372,673)
Additional paid-in capital   101,688,262    101,688,262 
Share to be issued   194,700    — 
Retained earnings unappropriated   37,358,804    96,294,256 
Retained earnings appropriated   26,667,097    26,667,097 
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 

 

 

Condensed Statements of Comprehensive Loss

 

                 
   Years Ended December 31,
   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   (58,935,452)   (61,795,279)
INCOME TAXES   —    — 
NET LOSS  $(58,935,452)  $(61,795,279)

 

Condensed Statements of Cash Flows

 

                 
   Years Ended December 31,
   2024  2023
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Loss  $(58,935,452)  $(61,795,279)
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  $—   $— 

 

 

 

 

(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.