Call Start: 20:00 January 1, 0000 9:06 PM ET Gulf Resources, Inc. (NASDAQ:GURE) Q2 2023 Earnings Conference Call August 14, 2023 20:00 ET Company Participants Helen Xu - Director of Investor Relations Xiaobin Liu - Chief Executive Officer Conference Call Participants Operator Greetings. Welcome to the Gulf Resources Second Quarter 2023 Earnings Conference. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Helen Xu. You may begin. Helen ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-34499 GULF RESOURCES, INC. (Exact name of registrant as specified in its charter) Nevada 13-3637458 (State or other jur ...

Gulf Resources, Inc. (NASDAQ:GURE) Q1 2023 Earnings Conference Call May 16, 2023 8:00 AM ET Company Participants Helen Xu - IR Director Xiaobin Liu - CEO Conference Call Participants Operator Good morning, everyone, and welcome to Gulf Resources First Quarter 2023 Earnings Conference Call. At this all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-34499 GULF RESOURCES, INC. (Exact name of registrant as specified in its charter) Nevada 13-3637458 (State or other ju ...

Financial Data and Key Metrics Changes - Revenue increased approximately 20% to approximately $66.1 million [6] - Gross profit increased 34% to approximately $37.4 million [6] - Profit from operations increased 216% to approximately $16.5 million [6] - Income before taxes increased 210% to $16.6 million from $5.4 million [6] - After-tax income was approximately $10.06 million, compared to a loss of approximately $924.5 thousand [6] - Earnings per share was $1 versus a loss of $0.09 per share [6] - Cash flow from operations was approximately $51.1 million, compared to approximately $23.3 million in the previous year [7] - Cash balance was $108.2 million or $10.37 per share [8] Business Line Data and Key Metrics Changes - Bromine business was extremely profitable with bromine prices increasing 14% last year, but prices have since dropped approximately 40% [8][10] - The company expects to open closed factories 2 and 10 in 2023 and anticipates full production from factory 8 [10] - The Yuxin chemical factory is facing delays due to stricter government regulations and equipment delivery issues [12][14] Market Data and Key Metrics Changes - The decline in bromine prices is attributed to slowed economic conditions in China and decreased demand for fire retardants and disinfectants due to COVID restrictions [9][10] - The company remains optimistic about the recovery of bromine prices as the Chinese economy reopens [10] Company Strategy and Development Direction - The company is exploring partnerships with local governments to expedite approvals for natural gas and brine projects [16] - A task force has been formed to analyze the potential for exporting chemical products, with plans to consider external consultants in the future [21] - The management is focused on increasing production capacity and profitability in the bromine and chemical segments [15][19] Management Comments on Operating Environment and Future Outlook - Management expressed frustration over the company's stock price and emphasized their commitment to improving shareholder value [19][20] - The company is optimistic about long-term profitability potential in the bromine and crude salt segments despite current challenges [11][15] Other Important Information - The company is facing challenges with currency restrictions in China, impacting its ability to return capital to shareholders [17] - The market capitalization is about $29 million, making it less attractive to institutional investors [18] Q&A Session Summary Question: Are there people outside the company involved in the task force looking at exporting chemical products? - Management confirmed that currently, the task force consists of internal staff, but they may consider hiring external consultants in the future [21] Question: Encouragement to talk to an investment banker for improving stock price? - Management acknowledged the suggestion but did not provide a specific response [22]

Corporate Structure and Ownership - Gulf Resources owns 100% of the outstanding shares of its subsidiaries, including SCHC and SYCI, reflecting a linear corporate structure[13] - The registered capital of Daying County Haoyuan Chemical Company Limited (DCHC) is RMB50,000,000, with RMB14,848,730 contributed by SCHC as of December 31, 2021[16] - A 1-for-5 reverse stock split was completed on January 27, 2020, adjusting all shares to reflect the new structure[17] - The corporate structure allows for legal cross-border fund transfers within the group, compliant with PRC laws[28] Regulatory Environment - The PRC government has initiated regulatory actions affecting overseas listings, which may impact Gulf Resources' ability to offer securities[24][25] - Current PRC regulations require subsidiaries to pay dividends only from accumulated profits and to set aside at least 10% of after-tax profits for statutory reserves[30] - A withholding tax of 10% applies to dividends payable by Chinese companies to non-PRC-resident enterprises, which may be reduced to 5% under certain conditions[33] - The company is subject to various governmental laws and regulations that may affect its operations in the PRC, with uncertain enforcement[81] - The Ministry of Land and Resources regulates mineral rights in China, granting licenses for land-use and exploration rights[83] Financial Performance and Losses - The company incurred a loss of $18,644,473 due to the write-off of the net book value of three bromine factories' property, plant, and equipment in 2018[39] - An impairment loss of $1,284,832 was recorded on the related mineral rights of the closed bromine factories in 2018[39] - As of the reporting period, no cash transfers or dividends have occurred among Gulf Resources and its subsidiaries, and no dividends are expected in the foreseeable future[29][30] Production and Operations - The company’s bromine and crude salt production operations are concentrated in Shandong Province, China[50] - The company expects to start testing and trial production of the new chemical factory by the end of 2023 or beginning of 2024[44] - The company completed the first brine water and natural gas well field construction in Sichuan Province and commenced trial production in January 2019[66] - The company’s chemical factory construction at Bohai Marine Fine Chemical Industrial Park began in June 2020 and civil works were completed by June 2021[76] - The company’s bromine production process involves extracting bromine from natural brine, which is the first component extracted during processing[56] Employee and Workforce Management - As of December 31, 2022, the company employed approximately 435 full-time employees, with 72% in SCHC, SHSI, and DCHC, and 28% in SYCI[84] - The company is required to contribute 16% of the average monthly salary to the state pension arrangement for employees in China, with social insurance expenses totaling approximately $624,827 for fiscal year 2022[85] - The company is committed to employee health and safety, providing various health and welfare programs, especially in response to the COVID-19 pandemic[87] - The company has implemented significant operating changes during the COVID-19 pandemic, including remote work for most employees[87] - The company focuses on developing talent from within while also hiring externally to foster a diverse and inclusive workforce[88] Market and Acquisition Strategy - The company plans to continue acquiring smaller scaled and unlicensed bromine producers to expand its downstream chemical operations[51] - The company believes there may be attractive acquisition opportunities in the bromine sector due to smaller producers lacking capital for required rectifications[43] - In 2022, sales to the three largest bromine customers totaled $19,581,606, accounting for approximately 33% of total net revenue from bromine sales[62] - The company’s largest customer represented approximately 12% of total net revenue from bromine sales in 2022[62] Environmental and Compliance Issues - The Chinese government has reinforced environmental regulations, impacting the chemical industry and requiring compliance from all facilities[81] - The company holds a bromine and salt production license, which is subject to yearly audits; failure to pass could materially affect operations[83] - The company is one of the licensed entities for bromine extraction in Shandong Province, amidst ongoing illegal extraction by unlicensed operations[82] Capital Expenditures and Future Plans - The total estimated cost for building a new chemical factory is approximately $64 million, with relocation costs amounting to $45,584,344 as of December 31, 2022[44] - The company expects to incur approximately $64 million in total costs related to the relocation of its chemical production plants[75] - The company’s auditor is subject to PCAOB inspections, with the last inspection occurring in November 2021[35] - The company’s operations were temporarily halted due to COVID-19, impacting the commencement of production for several factories[47]

Gulf Resources, Inc. (NASDAQ:GURE) Q3 2022 Earnings Conference Call November 15, 2022 8:00 AM ET Company Participants Helen Xu - IR Director Xiaobin Liu - CEO & Director Naihui Miao - Secretary, COO, VP & Director Conference Call Participants Operator Good morning, ladies and gentlemen, and welcome to the Gulf Resources 2022 Third Quarter Earnings Conference. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Helen Xu. Helen, the floor is yours. Helen Xu Thank you, Tom. Good ...

Financial Performance - Net revenue for the three-month period ended September 30, 2022, was $22,862,795, representing a 29% increase from $17,753,669 in the same period of 2021[141]. - Gross profit for the same period increased by 51% to $14,457,101, compared to $9,555,972 in the prior year[141]. - Income before taxes for the three-month period was $11,978,347, a 68% increase from $7,143,898 in the same period of 2021[141]. - Net income for the three-month period was $8,967,380, reflecting a 66% increase from $5,393,615 in the prior year[141]. - The company reported a net revenue of $47,505,246 for the nine-month period ended September 30, 2022, a 39% increase from $34,160,920 in the same period of 2021[166]. - The income from operations for the nine-month period ended September 30, 2022, was $16,986,668, a significant increase of 1085% from $1,433,742 in the same period of 2021[166]. - The net income for the nine-month period ended September 30, 2022, was $12,749,228, compared to $188,271 in the same period of 2021, reflecting a 6672% increase[166]. Segment Performance - The bromine segment generated net revenue of $19,845,773, a 33% increase from $14,913,004, driven by a 6% increase in tonnes sold and a 26% rise in average selling price[143]. - The average selling price of bromine rose to $7,474 in Q3 2022 from $5,938 in Q3 2021[143]. - Crude salt segment net revenue was $2,934,707, up 3% from $2,840,665, primarily due to a 3% increase in tonnes sold[143]. - Net revenue from the bromine segment increased to $41,865,598 for the nine-month period ended September 30, 2022, a 41% increase from $29,749,432 in the same period in 2021[169]. - Net revenue from the crude salt segment rose to $5,506,655 for the nine-month period ended September 30, 2022, reflecting a 25% increase from $4,411,488 in the same period in 2021[170]. Profitability Metrics - The gross profit for the three-month period ended September 30, 2022, was $14,457,101, representing 63% of net revenue, up from $9,555,972 or 54% in the same period of 2021[153]. - The gross profit margin for the crude salt segment increased to 64% in the three-month period ended September 30, 2022, from 44% in the same period of 2021[156]. - Gross profit for the nine-month period ended September 30, 2022, was $26,448,464, or 56% of net revenue, compared to $14,866,060, or 44% of net revenue for the same period in 2021[178]. - The gross profit margin for the bromine segment increased to 57% for the nine-month period ended September 30, 2022, up from 46% in the same period in 2021[180]. Operational Efficiency - Direct labor and factory overheads during plant shutdown increased by 55% to $1,910,318 compared to $1,229,058 in the previous year[141]. - The income from operations for the bromine segment was $10,552,343 for the three-month period ended September 30, 2022, compared to $6,909,542 in the same period in 2021[160]. - The utilization ratio for bromine production increased to 34% for the three-month period ended September 30, 2022, from 32% in the same period of 2021[150]. Cash Flow and Financial Position - Cash and cash equivalents as of September 30, 2022, were $92,638,278, a decrease of $3,128,985 from $95,767,263 as of December 31, 2021[189]. - Cash flow provided by operating activities for the nine-month period ended September 30, 2022, was approximately $37 million, up from $11.1 million in the same period of 2021[191]. - Accounts receivable decreased by $4,530,156 from December 31, 2021, to September 30, 2022, with total accounts receivable at $9,995,651 as of September 30, 2022[193]. - Inventory decreased by $87,150 from December 31, 2021, to September 30, 2022, with total inventory at $603,961 as of September 30, 2022[196]. - Net cash used in investing activities for the nine-month period ended September 30, 2022, was approximately $33.2 million, significantly higher than $8.56 million in the same period of 2021[196]. - Available cash as of September 30, 2022, was approximately $92.64 million, all in highly liquid current deposits[197]. Strategic Outlook - The company does not anticipate paying cash dividends in the foreseeable future, focusing instead on operational needs and obligations[197]. - The company plans to continue focusing on the activities of SCHC, SYCI, SHSI, and DCHC as these segments expand within the Chinese market[197]. - There are risks associated with potential acquisitions, including integration challenges and increased competition for acquisition candidates[198]. - The company has no significant contractual obligations not fully recorded on its consolidated balance sheets as of September 30, 2022[199]. Foreign Currency Impact - The company reported a negative foreign currency translation adjustment of $30,774,686 for the nine months ending September 30, 2022, compared to a positive adjustment of $1,877,097 in the previous year[188].

Gulf Resources, Inc. (NASDAQ:GURE) Q2 2022 Earnings Conference Call August 15, 2022 7:30 PM ET Company Participants Helen Xu - IR Director Naihui Miao - Secretary, COO, VP & Director Xiaobin Liu - CEO & Director Conference Call Participants Operator Greetings, ladies and gentlemen, and welcome to the Gulf Resources 2022 Quarter Earnings Conference. [Operator Instructions]. It is now my pleasure to turn the floor over to your host, Helen Xu. The floor is yours. Helen Xu Thank you, operator. Good morning, lad ...