RESTATEMENT (Tables)

6 Months Ended

Jun. 30, 2026

Accounting Changes and Error Corrections [Abstract]

SCHEDULE OF STATEMENT OF OPERATIONS INCOME (LOSS)

The effects of the restatement on the consolidated statement of operations income (loss) for the three months ended June 30, 2025, are summarized in the following table:

		As Previously Reported				Restatement				Note				As Restated
		June 30, 2025
		As Previously Reported				Restatement				Note				As Restated
NET REVENUE		$	8,343,785				—							$	8,343,785

OPERATING COSTS AND EXPENSE
Cost of revenues			(7,357,130	)			(9,572	)			(a)				(7,366,702	)
Sales and marketing expenses			(14,802	)			—								(14,802	)
Direct labor and factory overheads incurred during plant shutdown			(727,774	)			—								(727,774	)
General and administrative expenses			(994,765	)			(31,015	)			(a)				(1,025,780	)
TOTAL OPERATING COSTS AND EXPENSE			(9,094,471	)			(40,587	)							(9,135,058	)

LOSS FROM OPERATIONS			(750,686	)			(40,587	)							(791,273	)

OTHER INCOME (EXPENSE)
Interest expense			(21,674	)			—								(21,674	)
Interest income			1,795				—								1,795
Other expenses, net			(3,212	)			—								(3,212	)
TOTAL OTHER INCOME, NET			(23,091	)			—								(23,091	)

LOSS BEFORE INCOME TAXES			(773,777	)			(40,587	)							(814,364	)

INCOME TAX EXPENSE			—				—								—
NET LOSS		$	(773,777	)			(40,587	)						$	(814,364	)

COMPREHENSIVE LOSS:
NET LOSS		$	(773,777	)			(40,587	)						$	(814,364	)
OTHER COMPREHENSIVE (LOSS) INCOME
- Foreign currency translation adjustments			403,775				(15,725	)			(b)				388,050
TOTAL COMPREHENSIVE LOSS		$	(370,002	)			(56,312	)						$	(426,314	)

BASIC AND DILUTED LOSS PER SHARE		$	(0.06	)			(0.54	)			(c)			$	(0.60	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:			13,346,618				(11,993,087	)			(c)				1,353,531

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 in cost of revenue and general and administrative expenses were 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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026

(Expressed in U.S. dollars)

(UNAUDITED)

The effects of the restatement on the consolidated statement of operations income (loss) for the six months ended June 30, 2025, are summarized in the following table:

		As Previously Reported				Restatement				Note				As Restated
		June 30, 2025
		As Previously Reported				Restatement				Note				As Restated
NET REVENUE		$	9,948,232				—							$	9,948,232

OPERATING COSTS AND EXPENSE
Cost of revenues			(8,951,400	)			(12,766	)			(a)				(8,964,166	)
Sales and marketing expenses			(19,855	)			—								(19,855	)
Direct labor and factory overheads incurred during plant shutdown			(3,953,582	)			—								(3,953,582	)
General and administrative expenses			(2,384,288	)			(68,501	)			(a)				(2,452,789	)
TOTAL OPERATING COSTS AND EXPENSE			(15,309,125	)			(81,267	)							(15,390,392	)

LOSS FROM OPERATIONS			(5,360,893	)			(81,267	)							(5,442,160	)

OTHER INCOME (EXPENSE)
Interest expense			(43,396	)			—								(43,396	)
Interest income			4,224				—								4,224
Other expenses, net			(3,212	)			—								(3,212	)
TOTAL OTHER INCOME, NET			(42,384	)			—								(42,384	)

LOSS BEFORE INCOME TAXES			(5,403,277	)			(81,267	)							(5,484,544	)

INCOME TAX EXPENSE			—				—								—
NET LOSS		$	(5,403,277	)			(81,267	)						$	(5,484,544	)

COMPREHENSIVE LOSS:
NET LOSS		$	(5,403,277	)			(81,267	)						$	(5,484,544	)
OTHER COMPREHENSIVE (LOSS) INCOME
- Foreign currency translation adjustments			625,791				11,180				(b)				636,971
TOTAL COMPREHENSIVE LOSS		$	(4,777,486	)			(70,087	)						$	(4,847,573	)

BASIC AND DILUTED LOSS PER SHARE		$	(0.43	)			(3.89	)			(c)			$	(4.32	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:			12,520,613				(11,249,682	)			(c)				1,270,931

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 in cost of revenue and general and administrative expenses were 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.

SCHEDULE OF CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

The effects of the restatement on the consolidated statement of stockholders’ deficit for the three months ended June 30, 2025 are summarized in the following table:

		Reference		issued				outstanding				stock				Amount				stock				issued				capital				unappropriated				appropriated				Income(loss)				Total
				Common stock																																				Accumulated
		Restatement		Number of shares				Number of shares				Number of treasury								Treasury				Share to be				Additional paid-in				Retained earnings				Retained earnings				other comprehensive
		Reference		issued				outstanding				stock				Amount				stock				issued				capital				unappropriated				appropriated				Income(loss)				Total
THREE MONTHS ENDED JUNE 30, 2025 (As Previously Reported)
BALANCE AT MARCH 31, 2025					13,632,448				13,346,618				285,830			$	25,934			$	(1,372,673	)		$	—			$	105,167,292			$	32,729,304			$	26,667,097			$	(20,632,127	)		$	142,584,827
Restricted shares to be issued for service					—				—				—				—				—				—				—				—				—				—				—
Currency translation adjustment					—				—				—				—				—				—				—				—				—				403,775				403,775
Net loss for three months ended June 30, 2025					—				—				—				—				—				—				—				(773,777	)			—				—				(773,777	)
BALANCE AT JUNE 30,2025					13,632,448				13,346,618				285,830			$	25,934			$	(1,372,673	)		$	—			$	105,167,292			$	31,955,527			$	26,667,097			$	(20,228,352	)		$	142,214,825
THREE MONTHS ENDED JUNE 30, 2025(Restatement Impact)
BALANCE AT MARCH 31, 2025		(a)(b)			(12,250,334	)			(11,993,087	)			(257,247	)		$	(25,243	)		$	—			$	—			$	25,243			$	(1,005,600	)		$	—			$	97,730			$	(907,870	)
Restricted shares to be issued for service					—				—								—												—				—				—				—				—
Currency translation adjustment		(c)			—				—				—				—				—				—				—				—				—				(15,725	)			(15,725	)
Net loss for three months ended June 30, 2025		(b)			—				—				—				—				—				—				—				(40,587	)			—				—				(40,587	)
BALANCE AT JUNE 30, 2025		(a)(b)			(12,250,334	)			(11,993,087	)			(257,247	)		$	(25,243	)		$	—			$	—			$	25,243			$	(1,046,187	)		$	—			$	82,005			$	(964,182	)
THREE MONTHS ENDED JUNE 30, 2025 (As Restated)
BALANCE AT MARCH 31, 2025					1,382,114				1,353,531				28,583			$	691			$	(1,372,673	)		$	—			$	105,192,535			$	31,723,704			$	26,667,097			$	(20,534,397	)		$	141,676,957
Restricted shares to be issued for service					—				—				—				—				—				—				—				—				—				—				—
Currency translation adjustment					—				—				—				—				—				—				—				—				—				388,050				388,050
Net loss for three months ended June 30, 2025					—				—				—				—				—				—				—				(814,364	)			—				—				(814,364	)
BALANCE AT JUNE 30,2025					1,382,114				1,353,531				28,583			$	691			$	(1,372,673	)		$	—			$	105,192,535			$	30,909,340			$	26,667,097			$	(20,146,347	)		$	141,250,643

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 cost of revenue and general and administrative expenses increased. The increase of 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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026

(Expressed in U.S. dollars)

(UNAUDITED)

The effects of the restatement on the consolidated statement of stockholders’ deficit for the six months ended June 30, 2025 are summarized in the following table:

		Reference		issued				outstanding				stock				Amount				stock				issued				capital				unappropriated				appropriated				Income(loss)				Total
				Common stock																																				Accumulated
		Restatement		Number of shares				Number of shares				Number of treasury								Treasury				Share to be				Additional paid-in				Retained earnings				Retained earnings				other comprehensive
		Reference		issued				outstanding				stock				Amount				stock				issued				capital				unappropriated				appropriated				Income(loss)				Total
SIX MONTHS ENDED JUNE 30, 2025 (As Previously Reported)
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
Restricted shares to be issued for service					2,619,694				2,619,694				—				1,311				—				(194,700	)			3,479,030				—				—				—				3,285,641
Acquisition of assets					—				—				—				—				—				—				—				—				—				—				—
Currency translation adjustment					—				—				—				—				—				—				—				—				—				625,791				625,791
Net loss for six months ended June 30, 2025					—				—				—				—				—				—				—				(5,403,277	)			—				—				(5,403,277	)
BALANCE AT JUNE 30,2025					13,632,448				13,346,618				285,830			$	25,934			$	(1,372,673	)		$	—			$	105,167,292			$	31,955,527			$	26,667,097			$	(20,228,352	)		$	142,214,825
SIX MONTHS ENDED JUNE 30, 2025(Restatement Impact)
BALANCE AT DECEMBER 31, 2024		(a)			(9,892,609	)			(9,635,362	)			(257,247	)		$	(24,063	)		$	—			$	—			$	24,063			$	(964,920	)		$	—			$	70,825			$	(894,095	)
Restricted shares to be issued for service		(d)			(2,563,694	)			(2,563,694	)			—				(1,283	)			—				—				(3,088,258	)			—				—				—				(3,089,541	)
Acquisition of assets		(d)			205,969				205,969				—				103				—				—				3,089,438				—				—				—				3,089,541
Currency translation adjustment		(c)			—				—				—				—				—				—				—				—				—				11,180				11,180
Net loss for six months ended June 30, 2025		(b)			—				—				—				—				—				—				—				(81,267	)			—				—				(81,267	)
BALANCE AT JUNE 30, 2025		(a)			(12,250,334	)			(11,993,087	)			(257,247	)		$	(25,243	)		$	—			$	—			$	25,243			$	(1,046,187	)		$	—			$	82,005			$	(964,182	)
SIX MONTHS ENDED JUNE 30, 2025 (As Restated)
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
Restricted shares to be issued for service					56,000				56,000				—				28				—				(194,700	)			390,772				—				—				—				196,100
Acquisition of assets					205,969				205,969				—				103				—				—				3,089,438				—				—				—				3,089,541
Currency translation adjustment					—				—				—				—				—				—				—				—				—				636,971				636,971
Net loss for six months ended June 30, 2025					—				—				—				—				—				—				—				(5,484,544	)			—				—				(5,484,544	)
Net loss					—				—				—				—				—				—				—				(5,484,544	)			—				—				(5,484,544	)
BALANCE AT JUNE 30,2025					1,382,114				1,353,531				28,583			$	691			$	(1,372,673	)		$	—			$	105,192,535			$	30,909,340			$	26,667,097			$	(20,146,347	)		$	141,250,643

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 cost of revenue and general and administrative expenses increased. The increase of 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.

(d)		The originally classified as restricted shares to be issued for service was reclassified to acquisition of assets, as the shares were issued in connection with the asset acquisition.

SCHEDULE OF CONSOLIDATED STATEMENT OF CASH FLOWS

The effects of the restatement on the consolidated statement of cash flows for the six months ended June 30, 2025, are summarized in the following table:

		As Previously Reported				Restatement				Note				As Restated
		June 30, 2025
		As Previously Reported				Restatement				Note				As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(5,403,277	)			(81,267	)			(b)			$	(5,484,544	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization on capital lease			43,396				78,558				(a)				121,954
Depreciation and amortization			7,997,410				(1,546,829	)			(a)				6,450,581
Stock-based compensation expense			196,100				—								196,100
Amortization of operating lease right-of-use assets			435,102				—								435,102
Amortization of finance lease right-of-use assets			—				1,549,239				(a)				1,549,239
Changes in assets and liabilities
Accounts receivable			(2,574,907	)			—								(2,574,907	)
Inventories			(197,631	)			—								(197,631	)
Prepayment and deposits			(2,331,871	)			—								(2,331,871	)
Other receivables			(11,447	)			—								(11,447	)
Accounts and other payable and accrued expenses			268,175				—								268,175
Taxes payable			182,919				—								182,919
Lease liabilities			(743,404	)			—								(743,404	)
Net cash used in operating activities			(2,139,435	)			(299	)							(2,139,734	)

CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities			—				—								—

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of finance leases obligation			(260,997	)			—								(260,997	)
Net cash provided by (used in) financing activities			(260,997	)			—								(260,997	)

EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			61,351				299				(c)				61,650
NET DECREASE IN CASH AND CASH EQUIVALENTS			(2,339,081	)			—								(2,339,081	)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR			10,075,162				—								10,075,162
CASH AND CASH EQUIVALENTS - END OF YEAR		$	7,736,081				—							$	7,736,081

		As Previously Reported				Restatement				Note				As Restated
		June 30, 2025
		As Previously Reported				Restatement				Note				As Restated
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Paid for taxes		$	811,828				—							$	811,828
Interest paid		$	43,396				78,558				(a)			$	121,954

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 cost of revenue and general and administrative expenses increased. The increase of 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.