RESTATEMENT

3 Months Ended

Mar. 31, 2026

Accounting Changes and Error Corrections [Abstract]

NOTE 24 –RESTATEMENT

The Company restates its previously released unaudited condensed consolidated financial statements for the three months ended March 31, 2026, and incorporate them into the 2026 Quarterly Report “10-Q 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.

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

	Reported			Restatement			Note
	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	$	(3.90	)		(0.03	)			$	(3.93	)

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES:		1,187,413			—					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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 24 –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		Amount		stock			issued			capital		unappropriated			appropriated		Income(loss)			Total
		Common stock
		Number		Number		Number of							Share to			Additional		Retained			Retained		Accumulated other
	Restatement	of shares		of shares		treasury				Treasury			be			paid-in		earnings			earnings		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			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			—		—		—		—		—			—			—		—			—		222,016			222,016
Net loss for three months ended March 31, 2025			—		—		—		—		—			—			—		(4,629,500	)		—		—			(4,629,500	)
BALANCE AT MARCH 31, 2025			1,382,114		1,353,531		28,583	$	691	$	(1,372,673	)	$	—		$	105,192,535	$	31,764,384		$	26,667,097	$	(20,561,302	)	$	141,690,732
THREE MONTHS ENDED MARCH 31, 2025 (Restatement Impact)
BALANCE AT December 31, 2024			—		—		—	$	—	$	—		$	—		$	—	$	—		$	—	$	—		$	—
Restricted shares to be issued for service			—		—		—		—		—			—			—		—			—		—			—
Acquisition of assets			—		—		—		—		—			—			—		—			—		—			—
Currency translation adjustment	(a)		—		—		—		—		—			—			—		—			—		26,905			26,905
Net loss for three months ended March 31, 2025	(b)		—		—		—		—		—			—			—		(40,680	)		—		—			(40,680	)
BALANCE AT MARCH 31, 2025			—		—		—	$	—	$	—		$	—		$	—	$	(40,680	)	$	—	$	26,905		$	(13,775	)
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 the accumulated other comprehensive loss represents the foreign currency translation differences in the financial statements.

(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.

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 24 –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:

	As Previously Reported			Restatement			Note		As Restated
	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 assets		217,801			—					217,801
Amortization of finance lease right-of-use assets		—			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

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(Expressed in U.S. dollars)

(UNAUDITED)

NOTE 24 –RESTATEMENT – Continued

	Reported		Restatement		Note		As Restated
	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

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.