8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934

Date of Report (date of earliest event reported): January 30, 2009
  

Gulf Resources, Inc.

(Exact name of registrant as specified in charter)

Delaware

(State or other jurisdiction of incorporation)

000-20936	13-3637458
(Commission File Number)	(IRS Employer Identification No.)

Cheming Industrial Park, Shouguang City, Shandong, China 262714

(Address of principal executive offices and zip code)

(646) 200-6316

(Registrant's telephone number including area code)

(Registrant's former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

On January 30, 2009, pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) which was entered into on January 7, 2009 by and among Shouguang City Haoyuan Chemical Company Limited, a wholly owned subsidiary of Gulf Resources, Inc. ("SCHC"), Qiufen Yuan, Han Wang and Yufen Zhang, citizens of the People’s Republic of China (the “Sellers”), the Company completed its acquisition of  all right, title and interest in and to all assets owned by the Sellers utilized in the production of bromine and crude salt, located at the Shouguang City Renjiazhuangzi Village North Area including without limitation, machinery, equipment and inventory, and any warranties associated therewith (the “Purchased Assets’), for a total purchase price of $11,500,000 (the “Purchase Price”), of which $10,000,000 was paid in cash and $1,500,000 was paid by the issuance of 1,500,000 shares of common stock of Gulf Resources, Inc. (the “Shares”).

Additional information regarding this transaction can be found in the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2009.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Purchase Agreement, in exchange for the transfer of the Purchased Assets by the Sellers to SCHC, the Registrant will issue to the Sellers 1,500,000 shares of the Registrant's common stock.

The issuance of the Shares was exempt from registration pursuant to either Section 4(2) of, or Regulation S promulgated under, the Securities Act of 1933, as amended (“Securities Act”).

Item 8.01  Other Events.

On February 4, 2009, the Registrant issued a press release announcing that it had completed the aforesaid transaction. A copy of such press release is attached to this report as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Gulf Resources, Inc. Press Release dated February 4, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GULF RESOURCES, INC.
	By:	/s/ Min Li
	Name:	Min Li
	Title:	Chief Financial Officer
Dated: February 4, 2009

EX-99.1

Gulf Resources, Inc. Rena Xiao E-mail: renaxiao@gmail.com	CCG Investor Relations, Inc. Crocker Coulson, President Phone: +1-646-213-1915 E-mail: crocker.coulson@ccgir.com
Helen Xu E-mail: beishengrong@163.com Website: www.gulfresourcesinc.cn	Linda Salo, Financial Writer Phone: +1-646-922-0894 E-mail: linda.salo@ccgir.com
	Website: http://www.ccgirasia.com/

Gulf Resources Completes Acquisition of Bromine and

Crude Salt Manufacturing Assets

New York & Shandong Province, February 4, 2009 - Gulf Resources, Inc. (OTCBB: GFRE) (“Gulf Resources” or the “Company”), a leading manufacturer of bromine, crude salt and specialty chemical products in the People’s Republic of China, today announced that one of its wholly-owned subsidiaries Shouguang City Haoyuan Chemical Company Limited (“SCHC”) has completed the acquisition of manufacturing assets involved in bromine and crude salt production owned by three individual residents of the People’s Republic of China, Fenqiu Yuan, Han Wang and Yufen Zhang (the “Sellers”).

On January 7, 2009, SCHC signed an agreement to acquire the buildings, wells, machinery, equipment, pipelines, power circuits and inventory owned by the Sellers, and any warranties associated therewith, located on 6.52 km2, or approximately 1,611 acres, in Shouguang City Renjiazhuangzi Village North Area (the “Property”). The acquisition is expected to increase the Company’s annual production capacity by 3,000 tons of bromine and 200,000 tons of crude salt when the assets are fully operational, expanding the consolidated annual production capacity of SCHC to 34,000 tons of bromine and 300,000 tons of crude salt.

“We are very glad to see the rapid completion of this acquisition of manufacturing assets, and have already started the maintenance and upgrade of existing facilities, which are currently not operational, to achieve optimal operating conditions. We expect to start formal production using the assets in April 2009,” said Ming Yang, CEO of Gulf Resources. “The completion of this acquisition enables us to utilize our valuable exploration license to rapidly expand our bromine production capacity and market share, given the limited number of bromine exploration licenses issued. In addition, the newly acquired assets allow us to better utilize the economic benefits of crude salt, a byproduct of bromine production, which we believe offers attractive gross margin.”

Consideration for the bromine and crude salt manufacturing assets was $11.5 million, of which $10.0 million was paid in cash and $1.5 million was paid by the issuance of 1.5 million shares of the Company’s common stock at price of $1.00 per share. The Company expects the additional production of bromine and crude salt from these new assets to add $3.69 million to $4.10 million and $3.50 million to $4.00 million, respectively, in incremental revenue in fiscal 2009 based on long-term contract prices for year-end 2008.

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited (“SCHC”) and Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”). The Company believes that it is one of the largest producers of bromine in the People’s Republic of China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil & gas field explorations and as papermaking chemical agents. For more information, please visit www.gulfresourcesinc.cn.

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

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