Gulf Resources Provides Update to Shareholders

SHOUGUANG, China, Oct. 31, 2024 — Gulf Resources, Inc. (Nasdaq: GURE) (“Gulf Resources”, “we”, or the “Company”), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced its Letter to Shareholders as below.

“Dear Shareholders,

We want to reiterate our commitment to open and consistent communication with our shareholders. This letter is a key part of our ongoing communication efforts.

On April 16, 2024, we dismissed our auditors, WWC PC, and appointed GGF CPA Limited as our new auditors when we realized that our audit would not be completed on time. Switching auditors at the last minute presented significant challenges, as we had to start the entire audit process from scratch. Additionally, without a completed audit and the required SEC filings, we were unable to share financial information with our shareholders.

Therefore, our management team and our auditors focused on completing our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 10-K”), 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 (collectively, the “Delinquent Filings”) 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.

Typically, we plan conference calls and press releases alongside the filing process. However, in this instance, our primary objective was to complete the Delinquent Filings and regain compliance with Nasdaq rules. On October 15, 2024, we received written notification from the Listing Qualifications Staff of the Nasdaq Stock Market LLC that, following the Company’s filing of the Delinquent Filings with the SEC, the Staff had determined that the Company meets the Nasdaq Rule requirements and considered the matter to be closed.

This has been a demanding process for both the company and our new auditors. We acknowledge their efforts and are thankful that we are now current with our filings.

Since our last communication with investors, there have been significant developments in China, within our industries, and within our company. The Chinese economy has shown weakness, particularly in the real estate sector, which has directly impacted our business. We made a deliberate decision to reduce bromine and crude salt sales to safeguard the long-term value of our resources.

Concurrently, we have incurred substantial expenses for flood prevention and for the acquisition of land for salt fields. We believe the expenditures for flood prevention will yield positive returns in the future as our facilities will be significantly better protected. We also believe the purchase of the salt fields will generate strong returns and may enable us to reopen our closed factories and increase production of both crude salt and bromine.

We are now observing indicators that lead us to be more optimistic. The Chinese government is taking steps to improve the economy, particularly in the housing sector. Over the past month, from 9/24 to 10/30, the market price of bromine has increased by 9.6% from RMB 19,886 to RMB 21,800. (sunsirs.com) These levels are above our company’s break-even point.

We are in the process of preparing information for a conference call that will focus on:

  1. Our current financial status,
  2. Expenditures for flood prevention,
  3. Our investment in salt fields and its impact on future sales and earnings,
  4. Strategies for our Chemical and Natural Gas businesses,
  5. Our medium and long-term growth strategies.

As soon as this information is finalized, we will schedule a conference call with investors. This will allow investors to gain a comprehensive understanding of our strategies and our plans for future growth.

We appreciate your patience and look forward to communicating with everyone on a regular basis.”

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited (“SCHC”), ShouguangYuxin Chemical Industry Co., Limited (“SYCI”), Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). The Company believes that it is one of the largest producers of bromine in 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 and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sell crude salt. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit .

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, the risks associated with the COVID-19 pandemic outbreak, 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.

CONTACT: CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com Director of Investor Relations
Helen Xu (Haiyan Xu) beishengrong@vip.163.com