RESTATEMENT

12 Months Ended

Dec. 31, 2025

Accounting Changes and Error Corrections [Abstract]

NOTE 26 –RESTATEMENT

The Company restates its previously released audited consolidated financial statements for the year ending 2024, and incorporate them into the 2024 Annual Report “10-K Form Report” (the “Restatement”). This restatement is due to the discovery of errors related to the reclassification of buildings without property ownership certificates in fixed assets. The impacts for the periods prior to 2024 have been accumulated and presented as an initial balance adjustment item for the retained earnings as of December 31, 2023.

As the Company does not have property ownership certificates, the acquisition of the 20-year usage rights for this land, buildings, and salt pan conforms to the definition of a lease as stated in ASC 842. The Company revised the financial statements and accounted for these usage rights as leases in accordance with the provisions of ASC 842.

The effects of the restatement on the consolidated balance sheet as of December 31, 2024, are summarized in the following table:

SCHEDULE OF CONSOLIDATED BALANCE SHEET

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
Current Assets
Cash	$	10,075,162			—			$	10,075,162
Accounts receivable, net		564,523			—				564,523
Inventories, net		315,371			—				315,371
Prepayments and deposits		6,376,656			—				6,376,656
Amount due from related parties		25,040			—				25,040
Other receivables		94,074			—				94,074
Total current assets		17,450,826			—				17,450,826
Non-Current Assets
Property, plant and equipment, net		136,143,177			(46,712,127	)	(b)		89,431,050
Finance lease right-of-use assets		76,868			45,078,420		(b)		45,155,288
Operating lease right-of-use assets		6,169,855			—				6,169,855
Prepaid land leases, net of current portion		9,615,269			—				9,615,269
Deferred tax assets, net		—			—				—
Total non-current assets		152,005,169			(1,633,707	)			150,371,462
Total Assets		169,455,995			(1,633,707	)			167,822,288

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	14,323,458			(7,878,181	)	(c)	$	6,445,277
Taxes payable-current		113,999			—				113,999
Amount due to related parties		2,584,808			—				2,584,808
Finance lease liability, current portion		217,743			3,124,550		(c)		3,342,293
Operating lease liabilities, current portion		491,850			—				491,850
Total current liabilities		17,731,858			(4,753,631	)			12,978,227
Non-Current Liabilities
Finance lease liability, net of current portion		1,075,865			4,014,019		(c)		5,089,884
Operating lease liabilities, net of current portion		6,941,602			—				6,941,602
Total non-current liabilities		8,017,467			4,014,019				12,031,486
Total Liabilities		25,749,325			(739,612	)			25,009,713

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; 1,120,145 shares issued; and 1,091,562 shares outstanding as of December 31, 2024, and 2023		24,623			(24,063	)	(a)		560
Treasury stock; 28,583 shares as of December 31, 2024 at cost		(1,372,673	)		—				(1,372,673	)
Additional paid-in capital		101,688,262			24,063		(a)		101,712,325
Share to be issued		194,700			—				194,700
Retained earnings unappropriated		37,358,804			(964,920	)	(d)		36,393,884
Retained earnings appropriated		26,667,097			—				26,667,097
Accumulated other comprehensive loss		(20,854,143	)		70,825		(e)		(20,783,318	)
Total Stockholders’ Equity		143,706,670			(894,095	)			142,812,575
Total Liabilities and Stockholders’ Equity	$	169,455,995			(1,633,707	)		$	167,822,288

The following descriptions of the restatement adjustments to the balance sheet excludes a description of adjustments previously identified and concluded as immaterial that were also corrected as part of the restatement.

(a)

The change in common stock and additional paid-in capital is due to the company’s 1-for-10 reverse stock split on October 27, 2025.

(b)

As of December 31, 2024, in the fixed assets, the original value of the buildings subject to reclassification amounted to $68,476,868, The Company reclassified them based on their acquisition methods. The self-built portion was reclassified as “leasehold improvements” in the property, plant and equipment, with an original value of $3,507,367. The leased portion was reclassified as finance lease right-of use assets, with an original value of $64,189,590, accumulated amortization of $19,111,170, and a net value of $45,078,420.

(c)

The amount of $7,878,181 in accounts payable and accrued expenses was reclassified as finance lease liability relating to the salt pans. The finance lease liabilities including the current portion of $3,124,550 and the non-current portion of $4,014,019.

(d)

Regarding the decrease in retained earnings unappropriated, the main reason was that general and administrative expenses increased by $964,920. The increase in general and administrative expenses was due to the reclassification of finance lease right-of-use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

(e)

The change in the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

The effects of the restatement on the consolidated statement of operations income (loss) for the year ended December 31, 2024, are summarized in the following table:

SCHEDULE OF STATEMENT OF OPERATIONS

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
NET REVENUE	$	7,661,010			—			$	7,661,010

OPERATING COSTS AND EXPENSE
Cost of revenues		(14,746,741	)		—				(14,746,741	)
Sales and marketing expenses		(46,264	)		—				(46,264	)
Direct labor and factory overheads incurred during plant shutdown		(8,880,643	)		—				(8,880,643	)
General and administrative expenses		(5,271,011	)		(964,920	)	(a)		(6,235,931	)
TOTAL OPERATING COSTS AND EXPENSE		(28,944,659	)		(964,920	)			(29,909,579	)

LOSS FROM OPERATIONS		(21,283,649	)		(964,920	)			(22,248,569	)

OTHER INCOME (EXPENSE)
Interest expense		(91,901	)		—				(91,901	)
Interest income		80,258			—				80,258
Other expenses, net		(50,470	)		—				(50,470	)
Loss on disposal of property, plant and equipment		(29,169,008	)		—				(29,169,008	)
Impairment of property, plant and equipment		(6,772,500	)		—				(6,772,500	)
LOSS BEFORE INCOME TAXES		(57,287,270	)		(964,920	)			(58,252,190	)

INCOME TAX EXPENSE		(1,648,182	)		—				(1,648,182	)
NET LOSS	$	(58,935,452	)		(964,920	)		$	(59,900,372	)
COMPREHENSIVE LOSS:
NET LOSS	$	(58,935,452	)		(964,920	)		$	(59,900,372	)
OTHER COMPREHENSIVE (LOSS) INCOME
- Foreign currency translation adjustments		(2,800,874	)		70,825		(b)		(2,730,049	)
TOTAL COMPREHENSIVE LOSS	$	(61,736,326	)		(894,095	)		$	(62,630,421	)
BASIC AND DILUTED LOSS PER SHARE	$	(5.49	)		(49.39	)	(c)	$	(54.88	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:		10,726,924			(9,635,362	)	(c)		1,091,562

The following descriptions of the restatement adjustments to the statement of operations exclude a description of adjustments previously identified and concluded as immaterial they were also corrected as part of the restatement.

(a)

The increase of $964,920 in general and administrative expenses was due to the reclassification of finance lease right-of-use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

(b)

The change in the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

(c)

The change in basic and diluted loss per share is due to the company’s 1-for-10 reverse stock split on October 27, 2025.

The effects of the restatement on the consolidated statement of stockholders’ deficit for the year ended December 31, 2024 are summarized in the following table:

	Reference	issued			outstanding			stock			Amount			stock			issued		capital		unappropriated			appropriated		Income(loss)			Total
		Common stock
	Restatement	Number of shares			Number of shares			Number of treasury						Treasury			Share to be		Additional paid-in		Retained earnings			Retained earnings		Accumulated other comprehensive
	Reference	issued			outstanding			stock			Amount			stock			issued		capital		unappropriated			appropriated		Income(loss)			Total

YEAR ENDED DECEMBER 31, 2024 (As Previously Reported)
Total BALANCE AT JANUARY 1, 2024			11,012,754			10,726,924			285,830		$	24,623		$	(1,372,673	)		—	$	101,688,262	$	96,294,256		$	26,667,097	$	(18,053,269	)	$	205,248,296
Restricted shares to be issued for service			—			—			—			—			—			194,700		—		—			—		—			194,700
Currency translation adjustment						—			—			—			—			—		—		—			—		(2,800,874	)		(2,800,874	)
Net loss for year ended December 31, 2024			—			—			—			—			—			—		—		(58,935,452	)		—		—			(58,935,452	)
BALANCE AT DECEMBER 31, 2024			11,012,754			10,726,924			285,830		$	24,623		$	(1,372,673	)	$	194,700	$	101,688,262	$	37,358,804		$	26,667,097	$	(20,854,143	)	$	143,706,670
YEAR ENDED DECEMBER 31, 2024 (Restatement Impact)
BALANCE AT JANUARY 1, 2024	(a)		(9,892,609	)		(9,635,362	)		(257,247	)	$	(24,063	)		—			—	$	24,063		—			—		—			—
Restricted shares to be issued for service
Currency translation adjustment	(c)		—			—			—			—			—			—		—					—		70,825			70,825
Net loss for year ended December 31, 2024	(b)		—			—			—			—			—			—		—		(964,920	)		—		—			(964,920	)
BALANCE AT DECEMBER 31, 2024	(a)		(9,892,609	)		(9,635,362	)		(257,247	)	$	(24,063	)		—			—	$	24,063	$	(964,920	)		—	$	70,825		$	(894,095	)
YEAR ENDED DECEMBER 31, 2024 (As Restated)
BALANCE AT JANUARY 1, 2024			1,120,145			1,091,562			28,583		$	560		$	(1,372,673	)		—	$	101,712,325	$	96,294,256		$	26,667,097	$	(18,053,269	)	$	205,248,296
Restricted shares to be issued for service			—			—			—			—			—			194,700		—		—			—		—			194,700
Currency translation adjustment			—			—			—			—			—			—		—		—			—		(2,730,049	)		(2,730,049	)
Net loss for year ended December 31, 2024			—			—			—			—			—			—		—		(59,900,372	)		—		—			(59,900,372	)
BALANCE AT DECEMBER 31, 2024			1,120,145			1,091,562			28,583		$	560		$	(1,372,673	)	$	194,700	$	101,712,325	$	36,393,884		$	26,667,097	$	(20,783,318	)	$	142,812,575

The following descriptions of the restatement adjustments to the consolidated statement of stockholders’ deficit excludes a description of adjustments previously identified and concluded as immaterial the were also corrected as part of the restatement.

(a)

The change in common stock and additional paid-in capital is due to the company’s 1-for-10 reverse stock split on October 27, 2025.

(b)

Regarding the decrease in retained earnings unappropriated, the main reason was that general and administrative expenses increased by $964,920. The increase of general and administrative expenses was due to the reclassification of finance lease right-of-use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

(c)

The change in the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

The effects of the restatement on the consolidated statement of cash flows for the year ended December 31, 2024, are summarized in the following table:

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(58,935,452	)		(964,920	)	(b)	$	(59,900,372	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization on capital lease		91,901			108,124		(a)		200,025
Depreciation and amortization		18,007,875			(2,188,048	)	(a)		15,819,827
Deferred tax asset		1,632,978			—				1,632,978
Stock-based compensation expense		194,700			—				194,700
Bad debt expense		1,669,002			—				1,669,002
Impairment of inventory		989,035			—				989,035
Impairment of property plant and equipment		6,772,500			—				6,772,500
Amortization of operating lease right-of-use asset		877,809			—				877,809
Amortization of finance lease right-of-use asset		—			3,045,602		(a)		3,045,602
Loss on disposal of property, plant and equipment		29,169,008			—				29,169,008
Changes in assets and liabilities
Accounts receivable		4,264,140			—				4,264,140
Inventories		(733,302	)		—				(733,302	)
Prepayment and deposits		248,817			—				248,817
Advance from customers		(42,471	)		—				(42,471	)
Other receivables		(87,515	)		—				(87,515	)
Accounts and Other payable and accrued expenses		(2,191,652	)		—				(2,191,652	)
Taxes payable		(357,954	)		—				(357,954	)
Lease liabilities		(894,351	)		—				(894,351	)
Net cash provided by operating activities		675,068			758				675,826

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(60,526,213	)		31,602,571		(c)		(28,923,642	)
Interest-free loan lent to related parties		(25,275	)		—				(25,275	)
Net cash used in investing activities		(60,551,488	)		31,602,571		(c)		(28,948,917	)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of finance leases obligation		(264,094	)		(31,602,571	)	(c)		(31,866,665	)
Proceeds from interest-free loan from a related party		14,854			—				14,854
Net cash used in financing activities		(249,240	)		(31,602,571	)	(c)		(31,851,811	)

EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(2,023,072	)		(758	)	(d)		(2,023,830	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(62,148,732	)		—				(62,148,732	)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		72,223,894			—				72,223,894
CASH AND CASH EQUIVALENTS - END OF YEAR	$	10,075,162			—			$	10,075,162

	As Previously Reported		Restatement		Note	As Restated
			December 31, 2024
	As Previously Reported		Restatement		Note	As Restated
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Paid for taxes	$	1,520,292		—		$	1,520,292
Interest on finance lease obligation	$	91,901		108,124	(a)	$	200,025

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

The following descriptions of the restatement adjustments to the statement of cash flows excludes a description of adjustments previously identified and concluded as immaterial that were also corrected as part of the restatement.

(a)

This restatement is due to the reclassification of buildings without property ownership certificates in fixed assets. The Company reclassified them based on their acquisition methods. The self-built portion was reclassified as “leasehold improvements” in the property, plant and equipment. The leased portion was reclassified as finance lease right-of-use assets.

(b)

Regarding the increase in net loss, the main reason was that general and administrative expenses increased by $964,920. The increase in general and administrative expenses was due to the reclassification of finance lease right-of-use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

(c)

Fixed assets without property ownership certificates have been reclassified as finance lease right-of use assets, resulting in an amount of $31,602,571.

(d)

The change in the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

The effects of the restatement on the parent company only balance sheet as of December 31, 2024, are summarized in the following table:

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
Current Assets
Prepayments and deposits	$	—			—			$	—
Total Current Assets		—			—				—
Non-Current Assets

Interests in subsidiaries		83,755,560			(894,095	)	(c)(d)		82,861,465
Amounts due from group companies		69,821,271			(7,878,181	)	(a)		61,943,090
Deferred tax assets, net		—			—				—
Total non-current assets		153,576,831			(8,772,276	)			144,804,555
Total Assets		153,576,831			(8,772,276	)			144,804,555
Liabilities and Stockholders’ Equity
Current Liabilities
Other payables and accrued expenses	$	8,265,349			(7,878,181	)	(a)	$	387,168
Amounts due to related parties		1,462,110			—				1,462,110
Amounts due to group companies		142,702			—				142,702
Total Current Liabilities		9,870,161			(7,878,181	)			1,991,980
Total Liabilities		9,870,161			(7,878,181	)			1,991,980

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; 1,120,145 shares issued; and 1,091,562 shares outstanding as of December 31, 2024		24,623			(24,063	)	(b)		560
Treasury stock; 28,583 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			24,063		(b)		101,712,325
Share to be issued		194,700			—				194,700
Retained earnings unappropriated		37,358,804			(964,920	)	(c)		36,393,884
Retained earnings appropriated		26,667,097			—				26,667,097
Accumulated other comprehensive loss		(20,854,143	)		70,825		(d)		(20,783,318	)
Total Stockholders’ Equity		143,706,670			(894,095	)			142,812,575
Total Liabilities and Stockholders’ Equity	$	153,576,831			(8,772,276	)		$	144,804,555

(a)

The amount of $7,878,181 in accounts payable and accrued expenses was reclassified as finance lease liability relating to salt pans. The finance lease liabilities including the current portion of $3,124,550 and the non-current portion of $4,014,019.

(b)

The change in common stock and additional paid-in capital is due to the company’s 1-for-10 reverse stock split on October 27, 2025.

(c)

Regarding the decrease in retained earnings unappropriated, the main reason was that general and administrative expenses increased by $964,920. The increase of general and administrative expenses was due to the reclassification of finance lease right- of-use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

(d)

The change in the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

The effects of the restatement on the parent company only statement of comprehensive income (loss) for the year ended December 31, 2024, are summarized in the following table:

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
OPERATING EXPENSES
General and administrative expenses	$	(742,480	)		—			$	(742,480	)
TOTAL OPERATING EXPENSES		(742,480	)		—				(742,480	)
OTHER EXPENSES
Interest expense		—			—				—
TOTAL OTHER EXPENSES		—			—				—
TOTAL EXPENSES		(742,480	)		—				(742,480	)
Equity in net loss of subsidiaries		(58,192,972	)		(964,920	)	(a)		(59,157,892	)
LOSS BEFORE INCOME TAXES		(58,935,452	)		(964,920	)	(a)		(59,900,372	)
INCOME TAXES		—			—				—
NET LOSS	$	(58,935,452	)		(964,920	)		$	(59,900,372	)

(a)

The increase of $964,920 in equity in net loss of subsidiaries relating to general and administrative expenses was due to the reclassification of finance lease right-of- use asset. Previously, depreciation was calculated after deducting 5% residual value from the fixed assets, but now there is no residual value for amortization of finance lease right-of-use asset calculation.

The effects of the restatement on the parent company only statement of cash flows for the year ended December 31, 2024, are summarized in the following table:

	As Previously Reported			Restatement			Note	As Restated
				December 31, 2024
	As Previously Reported			Restatement			Note	As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(58,935,452	)		(964,920	)	(a)	$	(59,900,372	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Equity loss in unconsolidated subsidiaries		58,192,972			964,920		(a)		59,157,892
Stock-based compensation expense-options		—			—				—
Shares issued from treasury stock for services		—			—				—
Changes in assets and liabilities:		—			—				—
Other payables and accrued expenses		396,825			—				396,825
Net cash used in operating activities		(345,655	)		—				(345,655	)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from group companies		345,655			—				345,655
Net cash provided by financing activities		345,655			—				345,655
NET INCREASE IN CASH AND CASH EQUIVALENTS		—			—				—
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		—			—				—
CASH AND CASH EQUIVALENTS - END OF YEAR	$	—			—			$	—

(a)

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

(Expressed in U.S. dollars)