Gulf Resources, Inc. operates within the bromine, crude salt, chemical products, and natural gas industries in the People's Republic of China, with all products sold only within China. The bromine industry in Shandong Province is limited by the provincial government to licensed operations, and the Company holds one such license. The chemical industry in China has been subject to government-mandated closures and relocations of facilities near residential areas, with new environmental laws fully effective since January 2018. The natural gas sector has seen policy changes allowing privately owned enterprises to participate in production pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) effective May 1, 2020.

The Company's 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. In the crude salt business, principal competitors include 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. In the chemical business, competitors include 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. Competition is based on price, reputation for quality, on-time delivery, relationships with suppliers, and geographical proximity to natural brine deposits.

The Company generates revenue through four segments: bromine, crude salt, chemical products, and natural gas. Bromine is extracted from natural brine pumped from underground through extraction wells, processed via oxidation with chlorine, and sold as a halogen element used in flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. Crude salt is produced from the evaporation of wastewater after bromine production and is used in alkali production, chlorine alkali production, and the chemical, food and beverage industries. Chemical products, historically produced through SYCI, include products used in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, inorganic chemicals, and materials for human and animal antibiotics. Natural gas operations are conducted through DCHC in Sichuan Province. The Company has an in-house sales staff of 7 people, and many customers have long-term relationships with the Company.

The bromine segment operates through SCHC, which holds the necessary licenses for bromine and crude salt mining and production. As of December 31, 2025, the Company's bromine factories had annual production capacities as follows: Factory No. 1 at 6,681 tons with a 2025 utilization ratio of 25%, Factory No. 2 at 4,844 tons with no production, Factory No. 7 at 6,986 tons with a 25% utilization ratio, Factory No. 8 at 4,016 tons with a 25% utilization ratio, Factory No. 9 at 2,793 tons with a 31% utilization ratio, and Factory No. 4 at 2,793 tons with a 31% utilization ratio. The Company is awaiting governmental approval for Factories No. 2 and No. 10. The mining certificate was renewed in July 2021 with a production limit of 24,000 tons of bromine production per year. During the year ended December 31, 2025, sales to the three largest bromine customers aggregated $9,971,820 ¹, or approximately 43% of total net revenue from sale of bromine, and sales to the largest customer represented approximately 15% of total net revenue from the sale of bromine. During the year ended December 31, 2024, sales to the three largest bromine customers aggregated $1,969,624 ², or approximately 35% of total net revenue from sale of bromine.

The crude salt segment operates through SCHC and SHSI, with SHSI incorporated in April 2022 specifically for crude salt production and trading in response to a new government policy mandating separate registrations for bromine and crude salt companies. During each of the years ended December 31, 2025 and 2024, sales to the three largest crude salt customers aggregated $2,418,032 ³ and $2,049,988 ⁴, respectively, or approximately 100% and 100% of total net revenue from sale of crude salt, and sales to the largest customer represented approximately 40% and 38%, respectively. The chemical products segment generated net revenue of $0 ⁵ during each of the years ended December 31, 2025 and 2024, as SYCI's operations remain suspended due to relocation. The natural gas segment generated net revenue of $0 ⁶ and $61,207 ⁷ during the years ended December 31, 2025 and 2024, respectively. SYCI's historical annual production capacity was over 26,000 tons for oil and gas field exploration products and related chemicals, over 5,000 tons for papermaking-related chemical products, and over 6,800 tons for materials used for human and animal antibiotics.

On December 10, 2025, SCHC entered into an equity transfer agreement to sell 100% of the equity interests in SYCI to Shandong Rongyuan Pharmaceutical Co., Ltd. for aggregate consideration of RMB 21.2 million ⁸, payable in instalments through 2028. The transaction closed on December 22, 2025. On December 18, 2025, the Company announced a temporary suspension of relevant operations in Shouguang City pursuant to a notice from the Shouguang Municipal People's Government Office, with operations resuming on March 2, 2026. The Company completed a 1-for-10 reverse stock split on October 27, 2025. On December 1, 2025, the Company received a letter from Nasdaq stating it had regained compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market. On January 26, 2026, March 5, 2026, March 19, 2026, and March 28, 2026, the Company entered into equity financing agreements with four individual investors to issue new shares of common stock that in aggregate accounted for approximately 18% of the total shares issued and outstanding as of December 31, 2025. The purchase price per share under the January 26, 2026 agreement was set at 90% of the average closing price for the five trading days prior, while the March 2026 agreements were set at 85% of the closing price on the trading day immediately preceding the respective agreement dates. The Company incurred relocation costs for the chemical factory in the amount of $45,584,344 ⁹ as of December 31, 2025 and 2024. The estimated total cost for the relocation process is approximately $69 million ¹⁰.

Total revenues for the fiscal year ended December 31, 2025 were $23.486 billion ¹¹, compared to $680.985 billion ¹² in fiscal 2024. Net income was $22.270 billion ¹³, and diluted EPS was $2.73 ¹⁴ versus $2.41 ¹⁵ in the prior year.

The Company is pursuing expansion of bromine and crude salt production capacity by accessing new underground brine water resources in Sichuan Province through its subsidiary DCHC. The Company completed construction of the first brine water and natural gas well field in Sichuan Province in January 2017 and commenced trial production in January 2019. However, on May 29, 2019, the Company received verbal notice from the government of Tianbao Town, Daying County, Sichuan Province mandating project approval for the Daying well, encompassing the entire natural gas and brine water project, including approvals for safety production inspection, environmental protection assessment, and resolution of the related land issue. 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. Pursuant to the Opinions of the Ministry of Natural Resources on Several Issues in Promoting the Reform of Mineral Resources Management (Trial) effective May 1, 2020, privately owned enterprises are now allowed to participate in natural gas production, which could facilitate the Company's efforts in this segment.

The Company is proceeding with the completion of its new chemical factory at Bohai Marine Fine Chemical Industrial Park, with construction commencing in June 2020. The Company received the environmental protection approval from the government of Shouguang City in January 2020. The bulk of civil engineering works were completed by the end of June 2021, but delivery of some equipment, installation, testing, and trial production have been delayed due to supply chain issues and electric restrictions in China. The procurement of final equipment has been postponed until the Company has a better understanding of the potential for derivative bromine products. Management anticipates proceeding with completion in due course, but in the event the Chinese economy persists in its weakness and if this trend is perceived to be ongoing, there is a possibility the chemical factory could be repurposed for the production of Sodium-Ion batteries. The Company believes the upcoming chemical factory could produce sales and profits, and expects to generate sales and earnings in this segment at a level well above previous periods given reduced industry capacity and the Company's better equipment.

The Company faces structural headwinds from the Chinese government's regulatory environment, including the closure and rectification process for bromine, crude salt, and chemical products factories. On September 1, 2017, the Company received letters from the People's Government of Yangkou Town requiring immediate production stoppage for safety and environmental protection rectification. On September 21, 2018, the Company received a closing notice to shut down three bromine factories (Number 3, Number 4, and Number 11). The Company is awaiting governmental approval for Factories No. 2 and No. 10. Pursuant to a notification from the government of Shouguang City, all bromine facilities in Shouguang City were temporarily closed from December 26, 2025 until February 24, 2026. The Company's chemical factory has been shut down since November 24, 2017 pursuant to a government letter to relocate to Bohai Marine Fine Chemical Industrial Park. The Company faces uncertainty regarding the interpretation and implementation of PRC laws and regulations, including the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies effective March 31, 2023, which require filing procedures with the CSRC for future securities offerings. The Company also faces risks related to the Holding Foreign Companies Accountable Act, as its auditor GGF CPA LTD. is a China-based accounting firm, though the PCAOB vacated its 2021 determination on December 15, 2022.

The Company faces constraints from its reliance on a limited number of principal customers and suppliers. During the year ended December 31, 2025, sales to the three largest bromine customers aggregated $9,971,820 ¹⁶, or approximately 43% of total net revenue from sale of bromine. During each of the years ended December 31, 2025 and 2024, sales to the three largest crude salt customers aggregated $2,418,032 ¹⁷ and $2,049,988 ¹⁸, respectively, or approximately 100% and 100% of total net revenue from sale of crude salt. During the years ended December 31, 2025 and 2024, the Company purchased 100% of raw materials for bromine and crude production from its top four suppliers. The Company's ability to distribute dividends is constrained by PRC regulations requiring each PRC subsidiary to set aside at least 10% of its after-tax profits each year to fund a statutory reserve until such reserve reaches 50% of each subsidiary's registered capital. A withholding tax at a rate of 10% applies to dividends payable by Chinese companies to non-PRC-resident enterprises, though this may be reduced to 5% under the tax agreement between Mainland China and the Hong Kong Special Administrative Region.

Management's message emphasizes the strategic decision to sell SYCI to relieve the Company of operational and financial burdens associated with the prolonged suspension of the Yuxin Chemical facility and to reallocate resources to other, more profitable business segments. The Board determined that the terms of the equity transfer agreement, including the consideration of RMB 21.2 million ²² payable in instalments through 2028, are fair and in the best interests of the Company and its shareholders. Management believes that because many smaller bromine producers have not had the capital to conduct required government rectification, there could be extremely attractive acquisition opportunities in bromine, though all management's attention is currently focused on getting its facilities approved and in full production. Management believes the upcoming chemical factory could produce sales and profits, and expects to generate sales and earnings in this segment at a level well above previous periods, citing reduced industry capacity and the Company's better equipment. Management also notes that in the event the Chinese economy persists in its weakness and if this trend is perceived to be ongoing, there is a possibility the chemical factory could be repurposed for the production of Sodium-Ion batteries.

Total revenues for the fiscal year ended December 31, 2025 were $23.486 billion ²³, compared to $680.985 billion ²⁴ in fiscal 2024. Net income was $22.270 billion ²⁵, and diluted EPS was $2.73 ²⁶ versus $2.41 ²⁷ in the prior year. The functional currency of the Company's operating foreign subsidiaries is the Renminbi, which had an average exchange rate of $0.14042 ²⁸ and $0.13999 ²⁹ during fiscal years 2024 and 2025, respectively. As of December 31, 2025, the Company had cash and cash equivalents of $45,584,344 ³⁰ in relocation costs incurred for the chemical factory. The Company incurred relocation costs in the amount of $45,584,344 ³¹ as of December 31, 2025 and 2024. The estimated total cost for the relocation process is approximately $69 million ³². The Company's bromine segment reported net revenue from sale of bromine of $9,971,820 ³³ from the three largest bromine customers during 2025. The crude salt segment reported net revenue from sale of crude salt of $2,418,032 ³⁴ from the three largest crude salt customers during 2025. The chemical products segment reported net revenue of $0 ³⁵ for both 2025 and 2024. The natural gas segment reported net revenue of $0 ³⁶ and $61,207 ³⁷ for 2025 and 2024, respectively.

The Company faces material risks from its reliance on a limited number of customers and suppliers, with sales to the three largest bromine customers aggregating $9,971,820 ¹⁹ or approximately 43% of total bromine net revenue in 2025, and 100% of crude salt net revenue coming from the three largest crude salt customers in both 2025 and 2024. The Company purchased 100% of raw materials for bromine and crude production from its top four suppliers in both years. The Company's operations are subject to significant regulatory risk in China, including the closure of three bromine factories in September 2018 and the ongoing suspension of chemical operations since November 2017, with the Company awaiting governmental approval for Factories No. 2 and No. 10. The Company faces potential delisting risk under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect its China-based auditor GGF CPA LTD., though the PCAOB vacated its 2021 determination on December 15, 2022. The Company also faces currency risk as all revenues and substantially all costs are denominated in Renminbi, with the average exchange rate of $0.14042 ²⁰ and $0.13999 ²¹ during fiscal years 2024 and 2025, respectively, and a withholding tax of up to 10% on dividends from PRC subsidiaries.