Gulf Resources, Inc. (NASDAQ:GURE) Q2 2020 Results Earnings Conference Call August 17, 2020 8:30 AM ET Company Participants Helen Xu - Head of Investor Relations Xiaobin Liu - Chief Executive Officer Min Li - Chief Financial Officer Conference Call Participants Operator Hello and welcome to the Gulf Resources 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a r ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 Or o 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 2020 Earnings Conference Call May 21, 2020 8:30 AM ET Company Participants Helen Xu – Head-Investor Relations Xiaobin Liu – Chief Executive Officer Conference Call Participants Operator Greetings, welcome to Gulf Resources 2020 First Quarter Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I'll now turn the conference over to Helen Xu. Please go ahead, Helen. Helen Xu Great, thank you, operator. Good morning ladies an ...

Financial Performance - Net revenue for the three-month period ended March 31, 2020, was $557,670, representing a 1346% increase compared to $38,570 for the same period in 2019[117] - The cost of net revenue for the three-month period ended March 31, 2020, was $921,320, a 2431% increase from $36,407 in the same period of 2019[125] - The gross loss for the three-month period ended March 31, 2020, was $363,650, compared to a gross profit of $2,163 in the same period of 2019, reflecting a 16912% decrease[117] - The total loss before taxes for the three-month period ended March 31, 2020, was $4,796,201, a 24% decrease from $6,299,275 in the same period of 2019[117] - The net loss for the three-month period ended March 31, 2020, was $3,539,758, which is a 28% decrease from $4,904,138 in the same period of 2019[117] - For the three-month period ended March 31, 2020, the total gross loss was $363,650, representing a gross profit margin of -65%, a significant decrease from a gross profit of $2,163 (6%) in the same period in 2019[133] - Net loss for the three-month period ended March 31, 2020, was $3,539,758, an improvement from a net loss of $4,904,138 in the same period in 2019[148] Segment Performance - The bromine segment generated $462,846 in revenue for the three-month period ended March 31, 2020, compared to $0 in the same period of 2019[120] - The crude salt segment reported revenue of $94,824 for the three-month period ended March 31, 2020, also compared to $0 in the same period of 2019[121] - The gross loss margin for the bromine segment was 32% for the three-month period ended March 31, 2020, primarily due to increased factory overhead per unit produced from lower production volume[134] - The gross loss margin for the crude salt segment was 229% for the three-month period ended March 31, 2020, attributed to increased factory overhead costs due to lower production volume[136] - Loss from operations for the bromine segment decreased to $2,866,438 for the three-month period ended March 31, 2020, compared to a loss of $3,625,014 in the same period in 2019, mainly due to resumed production[143] Cash Flow and Financial Position - Cash and cash equivalents as of March 31, 2020, were $93,632,690, a decrease of $6,669,296 from $100,301,986 as of December 31, 2019[150] - Cash flow provided by operating activities was approximately $2.2 million for the three-month period ended March 31, 2020, mainly due to a decrease in accounts receivable of $4.2 million[151] - The overall accounts receivable balance decreased by $4,256,437 as of March 31, 2020, compared to December 31, 2019, with no allowance for doubtful accounts required[155] - The company used approximately $7.4 million for capital expenditures on property, plant, and equipment for the three-month period ended March 31, 2020, compared to $2.5 million in the same period in 2019[158] Strategic Initiatives - The company plans to proceed with applications for natural gas and brine project approvals with related government departments following new policies allowing privately owned enterprises to participate in oil and gas exploration[112] - The company is setting up a new chemical factory in Bohai Marine Fine Chemical Industry Park, with construction expected to start within the second quarter of 2020[114] - The company intends to focus on expanding its operations in the Chinese market through its segments SCHC, SYCI, and DCHC[160] Risks and Accounting Policies - The company may face significant risks in identifying, integrating, and managing acquired businesses, which could adversely affect operating results and future prospects[161] - There are no significant contractual obligations not fully recorded on the balance sheets or disclosed in the financial statements as of March 31, 2020[162] - The company does not have any off-balance sheet arrangements as defined by Regulation S-K[163] - Critical accounting policies include estimates related to accounts receivable, inventories, and revenue recognition, which may lead to significant differences in actual results[164] Production and Operations - The utilization ratio for bromine production was 5% for the three-month period ended March 31, 2020, as only two factories resumed operations[128]

Corporate Structure and Acquisitions - Gulf Resources owns 100% of Upper Class Group Limited, which in turn owns 100% of SCHC and SYCI, reflecting a linear corporate structure[16] - On February 4, 2015, Gulf Resources completed the acquisition of SCRC, a leading manufacturer of materials for antibiotics, for 7,268,011 shares valued at $1.84 each, totaling approximately $13.4 million[18][20] - The acquisition price of SCRC was based on a valuation of $2.00 per share, representing a 73% premium over the price at the time the agreement was reached[20] - Management believes there are attractive acquisition opportunities in the bromine sector due to smaller producers lacking capital for required rectifications[31] Financial Performance and Revenue - The net revenue for the chemical products segment was $0 in 2019, following limited sales of $613,368 in 2018 due to factory closures[52] - In 2019, sales to the three largest bromine customers totaled $5,371,125, accounting for approximately 54% of total net revenue from bromine sales, with the largest customer representing about 22%[50] Production and Capacity - SYCI's annual production of oil and gas field exploration products exceeded 26,000 tons, with papermaking-related chemical products over 5,000 tons and antibiotic materials over 6,800 tons[47] - The annual production capacity for Factory No. 1 is 6,681 tons with a 2019 utilization ratio of 28%[99] - Total bromine produced in 2019 was 2,482 tons, with 2,320 tons sold at an average selling price of RMB 29,752 per ton for Factory No. 1 and RMB 29,740 for Factory No. 7[101] - Total crude salt produced in 2019 was 21,562 tons, with 24,441 tons sold at an average selling price of RMB 143 per ton for Factory No. 1 and RMB 147 for Factory No. 7[103] - The annualized utilization ratio for Factory No. 7 was 27% in 2019[99] Capital Expenditures and Investments - The company incurred $16,243,677 in rectification and improvements of its bromine and crude salt factories in the fiscal year ended December 31, 2018, with a cumulative total of $34,182,329 since the beginning of the rectification[28] - The company has secured land for a new chemical factory with an estimated total construction cost of approximately $60 million, expected to start in May 2020[32][45] - The company plans to relocate its chemical production plants at an estimated cost of approximately $60 million, with $10,320,017 incurred as of December 31, 2019[62] - The company incurred $40,135,280 for building new extraction wells for bromine facilities during the fiscal year ended December 31, 2019[28] Regulatory and Environmental Compliance - An impairment loss of $16,636,322 was recorded related to the relocation of chemical plants due to new environmental regulations[32] - The company has been working with local authorities to resolve outstanding approval issues for its bromine and crude salt factories, which have passed inspection[60] - The company received approval to resume production at its bromine factories on March 5, 2020, after a temporary closure due to the coronavirus outbreak[61] - The company expects to begin construction of a new chemical factory in May 2020 following the environmental protection assessment approval obtained in January 2020[63] Employment and Labor Costs - As of December 31, 2019, the company employed approximately 606 full-time employees, with 59% in SCHC and DCHC, and 41% in SYCI[74] - The company is required to contribute 21% of the average monthly salary to the state pension arrangement, with total social insurance expenses around $1,035,687 for fiscal year 2019[75] Land and Lease Agreements - The company has land use rights to approximately 17,819 acres, with seven properties leased for bromine extraction[84] - The company has entered into contracts with the local government for land use rights for a period of 50 years[86] - SCHC entered into a 20-year lease contract for a property of 3,192 square meters with an annual payment of RMB 5.0 million (approximately $794,550) starting January 1, 2011[97] - The company has a total of 34.25 years remaining on the land lease for Factory No. 1, expiring in 2054[91] - The company has the option to renew the lease contract for an additional 20 years on the same terms[97] Taxation and Financial Obligations - The annual natural resources tax is RMB1,050 per tonne of bromine sales volumes, which the company was exempt from prior to January 1, 2008[87] - Annual rent for Factory No. 1 is RMB186,633, with prior fees paid for land use rights amounting to RMB8.6 million[91] - The annual rent for Factory No. 8 is RMB347,130, with an increase of 5% every two years[95] Production Challenges and Shutdowns - The company has received a closing notice to shut down three bromine factories as of September 21, 2018[90] - Factory No. 3, 4, and 11 were demolished in September 2018, impacting production capacity[102] - The company is currently undergoing rectification processes for all bromine factories, resulting in no production[92] - The company has completed all required rectifications and is awaiting further government approvals to resume production[30]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 Or o 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 262700 (ZipCode) GULF RESOURCES, INC. (Exact name of registrant as specified in its charter) Nevada 13-36374 ...

Gulf Resources, Inc. (NASDAQ:GURE) Q2 2019 Earnings Conference Call August 15, 2019 8:30 AM ET Company Participants Helen Xu - Investor Relations Director Min Li - Chief Financial Officer Conference Call Participants Operator Greetings and welcome to the Gulf Resources 2019 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being r ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 Or o 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 2019 Earnings Conference Call May 14, 2019 9:30 AM ET Executives Helen Xu - IR, Director Xiaobin Liu - CEO Analysts Mick Ross - Investor Operator Good morning, my name is Kael and I will be your conference operator today. At this time, I would like to welcome everyone to the Gulf Resources 2019 First Quarter Earnings Conference Call. All lines will be placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 Or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------- ...