Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

 

On June 1, 2026, Gulf Resources (the "Company"), following the Company's ongoing dialogue with the staff of the United States Securities and Exchange Commission, concluded that the Company will amend its fiscal year 2024 Form 10-K (the "FY2024 Form 10-K") and Form 10-Qs for the first, second and third quarters of 2025 (collectively, the "Q1, Q2 and Q3 2025 Form 10-Qs") to restate the disclosures (Note 6, Note 7 and Note 12 included in the FY2024 Form 10-K and the Q1, Q2 and Q3 2025 Form 10-Qs) to revise the previous recognition of buildings without ownership certificates as fixed assets in the balance sheets and to reclassify such buildings as right-of-use (ROU) assets based on lease agreements and ASC 842 Leases, for each of the periods included in those filing, including fiscal years 2023 and 2024 in the FY2024 Form 10-K and each of the quarterly and year-to-date periods included in the Q1, Q2 and Q3 FY2025 Form 10-Qs (collectively, the "Prior Filings"). The Prior Filings should no longer be relied upon because of errors identified in such financial statements, as described above.

 

 In connection with the identification of the above mentioned restatement, the Company delayed the completion of its fiscal year 2025 Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and filed a Form 12b-25 (Notice of Late Filing) with the Securities and Exchange Commission to provide notice of such delay to the SEC and its shareholders.

 

The Company is working to complete these restatements as soon as reasonably practical. The Company is evaluating its remediation measures and is continuing to focus on implementing enhancements to its internal controls to remediate its previously identified material weakness, taking action to enhance its integrity and accuracy within internal controls and financial reporting. Further, training for relevant personnel and application of relevant accounting guidance has been provided and remains ongoing.

 

The Company's management and the Chair of the Company's Audit Committee have discussed the matters disclosed in this Item 4.02 with the Company's independent registered public accounting firm, GGF CPA LTD.