v3.26.3
RESTATEMENT (Tables)
 3 Months Ended
Mar. 31, 2025
Accounting Changes and Error Corrections [Abstract]  
SCHEDULE OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

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

 

SCHEDULE OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS 

                 
   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, net   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 liabilities, 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 liabilities, 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		   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 

 

 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

 

NOTE 22 –RESTATEMENT – Continued

 

The effects of the restatement on the consolidated balance sheet as of March 31, 2025 are summarized in the following table:

 

                 
   March 31, 2025 
   As Previously Reported   Restatement   Note  As Restated 
Current Assets                  
Cash  $8,523,045    —      $8,523,045 
Accounts receivable, net   2,114,222    —       2,114,222 
Inventories, net   455,059    —       455,059 
Prepayments and deposits, net   6,393,161    —       6,393,161 
Amount due from related parties   25,076    —       25,076 
Other receivables   126,050    —      126,050 
Total current assets   17,636,613    —       17,636,613 
Non-Current Assets                  
Property, plant and equipment, net   132,341,321    (46,006,663)  (b)   86,334,658 
Finance lease right-of-use assets   75,721    44,369,063   (b)   44,444,784 
Operating lease right-of-use assets   6,050,429    —       6,050,429 
Prepaid land leases, net of current portion   9,625,855    —       9,625,855 
Deferred tax assets, net   —    —       — 
Total non-current assets   148,093,326    (1,637,600)      146,455,726 
Total Assets   165,729,939    (1,637,600)      164,092,339 
                   
Liabilities and Stockholders’ Equity                  
Current Liabilities                  
Accounts payable and accrued expenses  $11,656,665    (4,788,640)  (c)  $6,868,025 
Taxes payable-current   276,516    —       276,516 
Amount due to related parties   2,586,422    —       2,586,422 
Finance lease liabilities, current portion   239,771    —       239,771 
Operating lease liabilities, current portion   498,483    —       498,483 
Total current liabilities   15,257,857    (4,788,640)      10,469,217 
Non-Current Liabilities                  
Finance lease liabilities, net of current portion   1,077,412    4,058,910   (c)   5,136,322 
Operating lease liabilities, net of current portion   6,809,843    —       6,809,843 
Total non-current liabilities   7,887,255    4,058,910       11,946,165 
Total Liabilities   23,145,112    (729,730)      22,415,382 
                   
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; 1,382,114 shares issued; and 1,353,531 shares outstanding as of March 31, 2025   25,934    (25,243)  (a)   691 
Treasury stock; 28,583 shares as of March 31, 2025 at cost   (1,372,673)    —       (1,372,673) 
Additional paid-in capital   105,167,292    25,243   (a)   105,192,535 
Retained earnings unappropriated   32,729,304    (1,005,600)  (d)   31,723,704 
Retained earnings appropriated   26,667,097    —       26,667,097 
Accumulated other comprehensive loss   (20,632,127)   97,730   (e)   (20,534,397)
Total Stockholders’ Equity   142,584,827    (907,870)      141,676,957 
Total Liabilities and Stockholders’ Equity  $165,729,939    (1,637,600)     $164,092,339 

 

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 $45,078,720.

 

As of March 31, 2025, in the fixed assets, the original value of the buildings subject to reclassification amounted to $68,575,318. 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 $3,512,410. The leased portion was reclassified as finance lease right-of-use assets, with an original value of $64,281,876, accumulated amortization of $19,912,813, and a net value of $44,369,063.

 

(c)As of December 31, 2024, the amount of $7,878,181 in accounts payable and accrued expenses was reclassified as finance lease liability relating to the salt pans. The reclassified amount of finance lease liabilities including the current portion of $3,124,550 and the non-current portion of $4,014,019.

 

As of March 31, 2025, the amount of $4,769,747 in accounts payable and accrued expenses was reclassified as finance lease liability relating to the salt pans. The reclassified amount of finance lease liabilities including the non-current portion of $4,058,910.

 

(d)Regarding the decrease in retained earnings unappropriated, the main reasons was the increase in expenses. The increase in expenses is mainly due to the reclassification of the financial 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.

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 March 31, 2024, are summarized in the following table:

SCHEDULE OF STATEMENT OF OPERATIONS INCOME (LOSS)

 

                
   March 31, 2024 
  

As Previously

Reported

  

 

Restatement

  

Note

 

 

As Restated

 
NET REVENUE  $1,307,062    —     $1,307,062 
                   
OPERATING COSTS AND EXPENSE                  
Cost of revenues   (2,119,845)   —       (2,119,845)
Sales and marketing expenses   (4,491)   —       (4,491)
Direct labor and factory overheads incurred during plant shutdown   (3,734,689)   —       (3,734,689)
General and administrative expenses   (717,456)   —       (717,456)
TOTAL OPERATING COSTS AND EXPENSE   (6,576,481)   —       (6,576,481)
                   
LOSS FROM OPERATIONS   (5,269,419)   —       (5,269,419)
                   
OTHER INCOME (EXPENSE)                  
Interest expense   (24,830)   —       (24,830)
Interest income   36,060    —       36,060 
Other expense, net   (4,003)   —       (4,003)
TOTAL OTHER INCOME, NET   7,227    —       7,227 
                   
LOSS BEFORE INCOME TAXES   (5,262,192)   —       (5,262,192)
                   
INCOME TAX EXPENSE   1,270,060    —       1,270,060 
NET LOSS  $(3,992,132)   —      $(3,992,132)
                   
COMPREHENSIVE LOSS:                  
NET LOSS  $(3,992,132)   —      $(3,992,132)
OTHER COMPREHENSIVE (LOSS) INCOME                  
- Foreign currency translation adjustments   (393,867)   —       (393,867)
TOTAL COMPREHENSIVE LOSS  $(4,385,999)   —      $(4,385,999)
                   
BASIC AND DILUTED LOSS PER SHARE:  $(0.37)   (3.29)  (c)  $(3.66)
                   
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES:		  $10,726,924    (9,635,362) 

 

(c)

  $1,091,562 

 

 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

 

NOTE 22 –RESTATEMENT – Continued

 

The effects of the restatement on the consolidated statement of operations income (loss) for the three months ended March 31, 2025, are summarized in the following table:

 

                
   March 31, 2025 
  

As Previously

Reported

  

 

Restatement

  

 

Note

 

 

As Restated

 
NET REVENUE  $1,604,447    —      $1,604,447 
                   
OPERATING COSTS AND EXPENSE                  
Cost of revenues   (1,594,270)   (3,194)  (a)   (1,597,464)
Sales and marketing expenses   (5,053)   —       (5,053)
Direct labor and factory overheads incurred during plant shutdown   (3,225,808)   —       (3,225,808)
General and administrative expenses   (1,389,523)   (37,486)  (a)   (1,427,009)
TOTAL OPERATING COSTS AND EXPENSE   (6,214,654)   (40,680)      (6,255,334)
                   
LOSS FROM OPERATIONS   (4,610,207)   (40,680)      (4,650,887)
                   
OTHER INCOME (EXPENSE)                  
Interest expense   (21,722)   —     (21,722)
Interest income   2,429    —      2,429 
TOTAL OTHER INCOME, NET   (19,293)   —       (19,293)
                   
LOSS BEFORE INCOME TAXES   (4,629,500)   (40,680)      (4,670,180)
                   
INCOME TAX EXPENSE   —    —       — 
NET LOSS  $(4,629,500)   (40,680)     $(4,670,180)
                   
COMPREHENSIVE LOSS:                  
NET LOSS  $(4,629,500)   (40,680)     $(4,670,180)
OTHER COMPREHENSIVE (LOSS) INCOME                  
- Foreign currency translation adjustments   222,016    26,905   (b)   248,921 
TOTAL COMPREHENSIVE LOSS  $(4,407,484)   (13,775)     $(4,421,259)
                   
BASIC AND DILUTED LOSS PER SHARE  $(0.40)   (3.53)  (c)  $(3.93)
                   
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES:		   11,685,431    (10,498,018) 

 

(c)

   1,187,413 

 

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 March 31, 2024 are summarized in the following table:

SCHEDULE OF CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

  

   Reference   issued   outstanding   stock                     
   Common stock                            
   Restatement  

Number

of

shares

  

Number

of

shares

  

Number

of treasury

       Treasury  

 

Additional

paid-in

  

 

Retained

earnings

  

 

Retained

earnings

  

Accumulated

other

comprehensive

     
   Reference   issued   outstanding   stock   Amount   stock   capital   unappropriated   appropriated   Income(loss)   Total 

THREE MONTHS ENDED MARCH 31, 2024 (As Previously Reported)

                                            
BALANCE AT DECEMBER 31, 2023        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 
Currency translation
adjustment		        —    —    —    —    —    —    —    —    (393,867)    (393,867) 
Net loss for three months ended March 31, 2024        —    —    —    —    — -  —    (3,992,132)   —    —    (3,992,132)
BALANCE AT MARCH  31, 2024        11,012,754    10,726,924    285,830   $24,623   $(1,372,673)- $101,688,262   $92,302,124   $26,667,097   $(18,447,136)  $200,862,297 
THREE MONTHS ENDED MARCH 31, 2024 (Restatement Impact)                                                       
BALANCE AT DECEMBER 31, 2023   (a)    (9,892,609)   (9,635,362)   (257,247)  $(24,063)  $ — - $24,063   $ —   $ —   $ —   $ — 
Currency translation adjustment        —    —    —    —    —    —    —    —    —    — 
Net loss for three months ended March 31, 2024         —    —    —    —    — -  —    —    —    —    — 
BALANCE AT MARCH 31, 2024   (a)    (9,892,609)   (9,635,362)   (257,247)  $(24,063)  $ — - $24,063   $ —   $ —   $ —   $ — 
THREE MONTHS ENDED MARCH 31, 2024 (As Restated)                                                       
BALANCE AT DECEMBER 31, 2023        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 
Currency translation adjustment        —    —    —    —    —    —    —    —    (393,867)   (393,867)
Net loss for three months ended March 31, 2024        —    —    —    —    — -  —    (3,992,132)   —    —    (3,992,132)
BALANCE AT MARCH 31, 2024        1,120,145    1,091,562    28,583   $560   $(1,372,673)- $101,712,325   $92,302,124   $26,667,097   $(18,447,136)  $200,862,297 

 

 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

 

NOTE 22 –RESTATEMENT – Continued

 

The effects of the restatement on the consolidated statement of stockholders’ deficit for the three months ended March 31, 2025 are summarized in the following table:

 

   Reference  issued   outstanding   stock                         
     Common stock                            
      Number   Number   Number                       

Accumulated

     
   Restatement 

of

shares

  

of

shares

   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 MARCH 31, 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		      —    —    —    —    —    —    —    —    —    222,016    222,016 
Net loss for three months ended March 31, 2025      —    —    —    —    —    —    —    (4,629,500)   —    —    (4,629,500)
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 
THREE MONTHS ENDED MARCH 31, 2025 (Restatement Impact)                                                          
BALANCE AT DECEMBER 31, 2024  (a)(b)   (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)   —    —    —    —    —    —    —    —    —    26,905    26,905 
Net loss for three months ended March 31, 2025  (b)   —    —    —    —    —    —    —    (40,680)   —    —    (40,680)
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)
THREE MONTHS ENDED MARCH 31, 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      —    —    —    —    —    —    —    —    —    248,921    248,921 
Net loss for three months ended March 31, 2025      —    —    —    —    —    —    —    (4,670,180)   —    —    (4,670,180)
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 

 

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 amount of $3,089,541 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 three months ended March 31, 2024, are summarized in the following table:

 

SCHEDULE OF  CONSOLIDATED STATEMENT OF CASH FLOWS

                
   March 31, 2024 
   As Previously Reported   Restatement   Note  As Restated 
CASH FLOWS FROM OPERATING ACTIVITIES                  
Net loss  $(3,992,132)   —      $(3,992,132)
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:		                  
Amortization on capital lease   24,830    —       24,830 
Depreciation and amortization   4,733,475    (313,941)  (a)   4,419,534 
Deferred tax asset   (1,270,060)   —       (1,270,060)
Amortization of operating lease right-of-use asset   217,345     —       217,345 
Amortization of finance lease right-of-use asset   —    313,941   (a)   313,941 
Changes in assets and liabilities                  
Accounts receivable   (402,545)   —       (402,545)
Inventories   (57,859)   —       (57,859)
Prepayment and deposits   (44,903)   —       (44,903)
Advance from customers   (36,222)   —       (36,222)
Other receivables   (774)   —       (774)
Accounts and other payable and accrued expenses   (17,847)   —       (17,847)
Taxes payable   (257,766)   —       (257,766)
Lease liabilities   (226,018)   —       (226,018)
Net cash used in operating activities   (1,330,476)   —       (1,330,476)
                   
CASH FLOWS FROM INVESTING ACTIVITIES                  
Net cash used in investing activities   —    —       — 
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
Net cash used in financing activities   —    —       — 
                   
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS   (131,622)   —       (131,622)
NET DECREASE IN CASH AND CASH EQUIVALENTS   (1,462,098)   —       (1,462,098)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR   72,223,894    —       72,223,894 
CASH AND CASH EQUIVALENTS - END OF YEAR  $70,761,796    —      $70,761,796 

 

                
   March 31, 2024 
   As Previously Reported   Restatement   Note  As Restated 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                
Cash paid during the year for:                  
Paid for taxes  $481,153    —      $481,153 
Interest paid  $24,830    —      $24,830 

 

 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

 

NOTE 22 –RESTATEMENT – Continued

 

The effects of the restatement on the consolidated statement of cash flows for the three months ended March 31, 2025, are summarized in the following table:

 

                
   March 31, 2025 
  

As Previously

Reported

   Restatement   Note  As Restated 
CASH FLOWS FROM OPERATING ACTIVITIES                  
Net loss  $(4,629,500)   (40,680)  (b)  $(4,670,180)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                  
Amortization on capital lease   21,722    39,135   (a)   60,857 
Depreciation and amortization   4,003,524    (774,157)  (a)   3,229,367 
Stock-based compensation expense   196,100    —       196,100 
Amortization of operating lease right-of-use asset   217,801    —       217,801 
Amortization of finance lease right-of-use asset   —    775,702   (a)   775,702 
Changes in assets and liabilities:                  
Accounts receivable   (1,549,443)   —       (1,549,443)
Inventories   (139,285)   —       (139,285)
Prepayment and deposits   (7,340)   —       (7,340)
Other receivables   (31,987)   —       (31,987)
Accounts and other payable and accrued expenses   401,190    —       401,190 
Taxes payable   162,411    —       162,411 
Lease liabilities   (225,321)   —       (225,321)
Net cash used in operating activities   (1,580,128)   —      (1,580,128)
                   
CASH FLOWS FROM INVESTING ACTIVITIES                  
Net cash used in investing activities   —    —       — 
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
Net cash used in financing activities   —    —       — 
                   
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS   28,011    —      28,011 
NET DECREASE IN CASH AND CASH EQUIVALENTS   (1,552,117)   —       (1,552,117)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR   10,075,162    —       10,075,162 
CASH AND CASH EQUIVALENTS - END OF YEAR  $8,523,045    —      $8,523,045 

 

                
   March 31, 2025 
   As Previously            
   Reported   Restatement   Note  As Restated 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                  
Cash paid during the year for:                  
Paid for taxes  $77,386    —     $77,386 
Interest paid  $21,722    39,135   (a)  $60,857 

 

 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(Expressed in U.S. dollars)

(UNAUDITED)

 

NOTE 22 –RESTATEMENT – Continued

 

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 in 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.