NOTE 7 – FINANCE LEASE RIGHT-OF-USE ASSETS

Property, plant and equipment under finance leases consist of the following:

 SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

The above buildings erected on parcels of land located in Shouguang, PRC, are collectively owned by local townships. The Company has not been able to obtain property ownership certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of land.

During the three and six months period ended June 30, 2025, depreciation and amortization expense totaled $773,537 and $1,549,239, respectively, which was recorded in direct labor and factory overheads incurred during plant shutdown, cost of revenue, and general & administrative expenses.

During the three and six months period ended June 30, 2024, depreciation and amortization expense totaled $313,541 and $627,482, respectively, which was recorded in direct labor and factory overheads incurred during plant shutdown, cost of revenue, and general & administrative expenses.

See Note 22- Restatement, for discussion regarding the impact of the Restatement.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(Expressed in U.S. dollars)

(UNAUDITED)