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 ...

Gulf Resources, Inc. (NASDAQ:GURE) Q1 2022 Earnings Conference Call May 16, 2022 8:30 AM ET Company Participants Helen Xu – Director-Investor Relations Xiaobin Liu – Chief Executive Officer Conference Call Participants Operator Good day, ladies and gentlemen, and welcome to the Gulf Resources 2022 First Quarter Earnings Conference. At this time, all participants have been placed on a listen-only mode and the floor will be open for question and comments after the presentation. It is now my pleasure to turn t ...