Gulf Resources says ‘seeing signs’ to be more optimistic

Gulf Resources (GURE) announced a Letter to Shareholders, which read in part, “We want to emphasize our commitment to communicating actively with our shareholders. This letter is an integral part of our communication efforts. On April 16, 2024, we dismissed our auditors, WWC PC, and engaged GGF CPA Limited as our new auditor when we realized our audit would not be completed on time. Transitioning to new auditors at the last minute posed significant challenges, as we had to restart every step of the process. In addition, without a completed audit and the SEC filings, we were unable to communicate financial information to our shareholders. Accordingly, our management and our auditors focused on completing our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Report on Form 10-Q for the three months ended March 31, 2024 and our Quarterly Report on Form 10-Q for the six months ended June 30, 2024 so that we could meet the filing requirements of the SEC and Nasdaq. We filed our 2023 10-K on September 27,2023 and our Form 10-Qs for the first and second quarter of 2024 on October 11,2024. Normally, we prepare for conference calls and press releases alongside the filing process. However, in this case, our primary goal was to complete the Delinquent Filings and regain compliance with the Nasdaq rules. On October 15, 2024, we received written notice from the Listing Qualifications Staff of the Nasdaq Stock Market LLC that, as a result of the Company filing the Delinquent Filings with the SEC, the Staff has determined that the Company complies with the Nasdaq Rule and considers the matter to be closed. This has been a challenging process for both the company and our new auditors. We appreciate their efforts and are grateful that we are now up to date on our filings. Since we last communicated with investors, much has happened in China, in our industries, and to our company. The Chinese economy has been weak, especially weak in the real estate sector, which has directly impacted our business. We purposely cut back on the sale of bromine and crude salt to protect the long-term value of our resources. At the same time, we have had major expenditures for flood prevention and for the purchase of land for salt fields. We believe the expenditures for flood prevention will provide good returns in the future as our facilities will be much better protected. We also believe the purchase of the salt fields will provide strong returns and may enable us to open our closed factories and increase our production of both crude salt and bromine. We are now seeing signs that cause us to be more optimistic. The Chinese government is taking steps to improve the economy, especially in the housing sector. In the past month, from 9/24 to 10/30, the market price of bromine has improved 9.6%% from RMB 19,886 to RMB 21,800. These are levels above break-even for our company. We are in the process of preparing information for a conference call that will focus on: Our current financial position, Expenditures for flood prevention, Our investment in salt fields and its impact on future sales and earnings, Strategies for our Chemical and Natural Gas businesses, Our medium and long-term growth strategies. As soon as this material is completed, we will schedule a conference call with investors. So investors can understand our strategies and our plans for future growth.”