Greetings, and welcome to the Gulf Resources 2019 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Helen Xu. Thank you. You may begin.

Thank you, operator. Good night, ladies and gentlemen, and good morning to those of you joining us from China. We'd like to welcome all of you to Gulf Resources Third Quarter 2019 Earnings Conference Call. My name is Helen. I am a Director. Our CEO of the company, Mr. Xiaobin Liu, will also join us in this call today. I will be also in translation of his comments during our Q&A section. I'd like to remind you to all our listeners that in this call, certain management statements during the call will contain forward-looking statements about the Gulf Resources and its subsidiary business products within the meaning of the Rule 175 under Securities Act of 1933 and the Rule 3b-6 under Securities Exchange Act of 1934 and are subject to the safe harbor created by those rules. Actual results may differ from those discussed today, taking into account a number of risk factors, including but not limited to: the general economic and business conditions in China; future product development and production capabilities; shipments to end customers; market acceptance of new and existing products; additional competition from existing and new competition from the bromine and the other oilfields in the power production chemicals; change in technology; the ability to make future bromine assets; and the various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the risk factors detailed in the company's reports filed with the SEC. Gulf Resources assumes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Accordingly, our company believes expectations reflected in those forward-looking statements are reasonable and there can be no assurance [ that ] such will prove to be correct. In addition, any reference to the company's future performance represents the management's estimates as of today, the 15th of November 2019, China time. For those of you unable to listen to the entire call at this time, a replay will be available for 14 days at the company's website. The call is also accessible through the webcast and the link is accessible through our website. So please look at our press release issued earlier for that detail. [Foreign Language]

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[Interpreted] Okay. Hello, everyone. Thanks for attending Gulf Resources 2019 Third Quarter Earnings Conference Call. So next, Helen will provide the summary for this quarter's operation and financial results. So before covering the details of the third quarter of 2019, Gulf Resources would like to review current regulatory situation in China as well as the clean-up from Typhoon Lekima. So when the bromine industry started in Shouguang City more than 20 years ago, the city granted permission for companies to mine the bromine and crude salt. Everything we did from that time was in accordance with the rules of Shouguang City and the surrounding counties. As environmental problems in China became more severe, the Chinese Central Government promulgated a series of national regulation. Based on the new National Environmental Protection regulations and requirements from Land Supervision, we believe that most of the companies in our industry have to submit a series of rigorous plans, including our factories, even though some of our bromine centers have been operating for more than 20 years. We believe that the central government intends to strengthen the environmental protection in China by implementing the new national regulations. However, we believe that this has put a significant strain on local governments and corporations, which were not required to have these approvals before. Since enactment of this regulation, the local government has had to work with the provincial governments to develop a comprehensive plan that limits pollution, protects the environment and does not harm workers and farmers. This has been a complex and extremely difficult task. It has been made more difficult because many of the processes have continued to change as provincial governments attempt to meet the requirements of the national government. We would like to briefly review where we are in this process. So let's…

Ms. Xu, would you like us to begin the question-and-answer session?

Yes.

[Operator Instructions] We do have a question coming from the line of [ Christopher Heck ], a private investor.

Helen, thank you for the call tonight. This quality is much better, so it's good to hear. I just have a question about the 10.3 million shares for the equity incentive plan, whether that will be adjusted by the same percentage as the reverse stock split?

Yes.

Okay. It will definitely be adjusted by the same percentage of the stock reverse split?

You mean the intensive plan, right, which I think is the answer to that.

Yes. So it's 10.3 million, and you do a reverse stock split for 1 for 4.

For loans already issued, it will be not affected. But for those still left in the pool will be reversed.

Okay. So any new shares to be issued?

Will be...

Well, there's 10.34 -- [ 10,341,000 ], you're asking the shareholders to approve. And then if you reverse split the stock 4:1, 1:4, I'm assuming that 10 million would be reversed, 4 for 1 also?

Sorry, yes, so I'm not quite sure. I think I have to consult the company's legal counsel. But I can e-mail back when I have the clearer confirmation, do you mind? Maybe -- what's your name please? Maybe you can e-mail me and I will ask company counsel when we have the very sure answer, I will let you know.

Sure. Will definitely look.

Okay, e-mail me then.

I would appreciate it. I'd like to get the accurate answer on that. I did e-mail you already, to both you and Max the question on November 4, but I will resend the e-mail. I'm referring to the same...

Okay, okay. I'll wait for it.

...e-mail that I've communicated with you before that you've responded to.

Okay. So, I will do that. Appreciate it.

Okay. And I did have a couple of other questions. Could you tell me how many bromine wells were drilled for the $25,671,000 that was spent? How many new bromine wells were drilled for that $25 million?

Okay. You have to wait for that, I'll ask Mr. Liu. [Foreign Language]

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[Interpreted] Hi, this is the [ amount ] which comes from the company CEO, Mr. Xiaobin Liu. He says that the average price to drill for 1 new well, which costs around more than $20,000 a well. So there are totally more than 1,000 wells drilled by this $25 million.

Okay, maybe 1,000 new wells were drilled?

Yes, yes.

Okay. Are you able to ask him that question? I would think that would be a pretty basic question as far as whether the equity incentive shares of 10.3 million that you're asking shareholders to approve, whether that will be adjusted the same amount as the reverse split? I think the shareholders have a right to know that.

I do not think it's really clear because we did not ask this question to counsel. So I'm not sure if he can understand it or -- no, not understand, if he can really give you the correct answer. I think it's still a good idea we ask counsel and get back to you.

Okay. Are you going to make that known to all the shareholders publicly before the proxy? It's unclear on the proxy.

Yes, I think so. I will talk to counsel to see what we can do.

Yes, I think that would be great if you...

To share with shareholders. Yes.

Yes, especially in light of the recent transactions with the insiders buying and selling [ all together ] at the same time, I think that would be good to clarify ahead of time before the proxy vote.

And the proxy have already been filed. But when we have the -- but we have a clear answer from counsel. We will try to talk with counsel to see how to let the public know about this -- during this [indiscernible] answering the call, [ but not all ].

Okay. I appreciate that. The general and administrative expenses this quarter were approximately $5 million versus $1.3 million previously. Do you know what the increase of about $4 million was over the last quarter?

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[Interpreted] Basically there are 2 major reasons for the general administrative expense increase. First one was due to the major increase in labor cost. Second cause was some of the [ repairment in Bang ] and the damages in -- after the Typhoon Lekima, some of the costs were recorded in this [ pack. ]

Okay. Last question. There was an income tax expense of $6.7 million this quarter. I'm just not sure I understand why when there was a net loss -- if there was a $6.7 million income tax expense. Just wondering if you could clarify that.

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So because that is there -- [ naturally ] from our Daying County factories, because before we did have some income tax, which can be deferred. But now because this new situation in our Daying County, we think, the better we should offset those deferred tax. So those expenses happen now.

Okay. Okay. That was the only questions. Helen if you can get back to me quickly, after you speak to counsel about that question on the equity incentive plan shares.

Yes. Yes, I will. We will.

I would appreciate it very much. I think it's important.

[Operator Instructions] Ms. Xu, we don't see any additional questions coming in at this time, would you like to make any additional concluding comments?

Operator, if there is no more questions for the call, do you mind if you ask one more time?

Absolutely. [Operator Instructions]

Okay. I think if there are no more questions, we can close the call for today. Thank you. [Foreign Language] Thank you, operator. Have a nice day.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.