Greetings, and welcome to the Gulf Resources 2020 Third Quarter Earnings Conference. [Operator Instructions] As a reminder, this conference being recorded. It is now my pleasure to introduce your host, Helen Xu. Thank you, Helen. You may begin.

Okay. Thank you, operator. Good morning, ladies, and good evening. For those of you joining us from U.S., and I would like to welcome all of you Gulf Resources' Third Quarter 2020 Earnings Conference Call. My name is Helen, I'm the IR Director. The company's -- CEO of the company, Mr. Xiaobin Liu also join us this call today. I'd like to remind you to all our listeners that in this call certain management statements during the call will be forward-looking information about Gulf Resources, Inc and its subsidiaries business and products within the meaning of Rule 175 on 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. 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. The risks associated with the COVID-19, 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 other chemical product fields, changing technology, the ability to make future bromine assets and the various other factors beyond company's control. All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the risk factors detailed with the company's reports filed with the SEC. Gulf Resources assumes no obligation to review or update any forward-looking statements to reflect events or circumstances after the date of this call. Accordingly, our company believes expectations reflecting in those forward-looking statements are reasonable, and there can be no assurance of such which proved to be correct. In addition, any reference to the company's future performance, represent the management's estimates as of today, the 16th of November 2020. For those of you are able to listen to the entire call every time, a replay will be available at the company's website. The call is also accessible through the webcast and the link is accessible through our website, so please locate our press release issued earlier for the details. Before I reveal the quarter, I'd like to turn the call over to Mr. Xiaobin Liu, our CEO, for some opening remarks.

[Foreign Language]

[Interpreted] Welcome all of you to Gulf Resources Third Quarter 2020 Earnings Conference Call. Three years ago, the government forced the closing of mine and chemical companies in Shandong for rectification, so it could improve environmental protection as some of our facilities are returning to production. Our province was hit by Lekima, one of the most destructive typhoons in history. Then we were impacted by the COVID-19 virus. It has been a period of unprecedented difficulties for the company, its employees and its shareholders. There is no precedent for what we have been through.

[Foreign Language]

[Interpreted] Now we are beginning to see the light at the end of the tunnel. As you can see from our press release, we have reported improved results for the third quarter. We have continued to ramp our production at our full operating bromine and crude salt factory. We believe this factory earned a good profit in the third quarter. Further, over the past 4 months, the price of bromine has increased by more than 21%. And with the continuing upward change, this could going well for us in the fourth quarter. While we are not making quarterly estimates, if bromine prices remain at its current level, we should have a profitable fourth quarter.

[Foreign Language]

[Interpreted] Okay. With our shutdowns of for rectification, Typhoon Lekima and COVID-19, it has been a long time since we achieved our even approved profitability with a strong market for bromine and our full current factory in operation, we are increasingly optimistic we look first to getting approval of our other 3 factories, completing construction of our new chemical factory and the natural gas production. In the near future, we will consider to issue long-term guidance so that our investor will be able to understand the opportunities the company believes we have in front of us. So now let me turn the call back to Helen to review the third quarter results. So now I will discuss about the third quarter results. Let's look at the revenue first. Revenue was $10.5 million, which is an increase of 130% from same quarter of 2019 and 96% from second quarter of 2020. We are very pleased to be successfully ramping up production at our current 4 operating factories. We reduced loss from operations to approximately $2.9 million from $30 million last year and approximately $8.3 million in the previous quarter. We reduced our negative cash flow for the 9 months from $69.9 million to $6.6 million. Our income statements may be confusing to investors because so many of our business are closed or under construction. It sustained operating losses on our chemical factory, natural gas projects and closed bromine and crude salt factories. In addition, with business also have substantial depreciation and amortization to provide investors with a better understanding, we are providing a measurement of profit and loss of the operating businesses. These numbers represent the best estimate of management, but are not audited here. So we estimate that the 4 operating factors made a net profit in the third quarter…

[Operator Instructions] Our first question comes from [ Elaine Parka ], private investor.

And first of all, I want to thank you for -- I mean congratulate for the results. They are pretty good. But mainly the month that have a question about is the largest billing month that was kind of a surprise, is a stock award that you had. It's about 50% of the award that you have for the 2019 plan. And it's...

[ Elaine ], can you speak -- sorry to interrupt you. Do you mind just speak slowly and because of voice sounds too far for me.

Okay. My question is about the stock award that you had in this quarter, the $2.35 million in general and admin. The amount is pretty large, and it's -- you said in restricted stock. So I wanted to have a better understanding of what kind of restrictions you had on these stocks. You said they are investing immediately. Can the people just -- I mean, the officers or directors can they sell their stock? Or is there any kind of restriction?

Okay. Got you. [Foreign Language] Thank you for the question. These shares are restricted with [indiscernible]. And they have restrictions on selling condition had to meet to the Rule 144, which required minimum 6 months to 1 year depends on the conditions by Rule 144.

So you mean recipient of these shares could sell their shares in 6 months to a year?

At least 6 months, but it depends on the Rule 144 specific requirements, we are not 100% but have to consult with the company legal counsel.

Okay. Could 5% of the outstanding shares -- and 5% of outstanding shares if the people have the possibility to sell them could have a huge impact on the share price?

No, there is a limitation on the trading volume as the office sales, we consider as affiliate or inside their limitation like selling volume.

And why did you choose shares versus what you had in the past which was stock options?

[Foreign Language]

[Foreign Language]

[Interpreted] Because based on previous year's experience, the company issued options to its [indiscernible] officers and directors. And recently, Chinese government required a more restricted tax on individuals, tax filing on individuals. So the options are quite difficult for the individuals to evaluate and do their own tax filing. So based on the consideration and the tax policy in China local. So that's why company consider this time to issue tax.

Okay. I mean, are you planning filing [indiscernible] 13 just for the ownership of the officers and directors?

Sorry?

Are you planning on filing [indiscernible] 13 with the SEC just showing the allocation to the directors and officers? Because I didn't see any yet.

Do we find a new director?

No. I mean, you are supposed to -- when you have change in share ownership by the directors and officers, you are supposed to file an [indiscernible] 13. So I'm just asking when are you going to file it?

Already filed.

Okay. I didn't see anything, that's why. Because I mean, it's important for you...

We knew they are already filed.

Okay. So I'll wait to see how it was allocated. I'm curious to see how much was given to the officers versus directors.

Okay. If you need, I think I may send you the link.

Okay. And can I ask another question?

Yes, sure. Please.

Okay. There's a question. I mean, it's related to the weather in Q3. I read an industry report that because of a lot of rain in July and August, production has had been impacted by a lot of companies. Was GURE impacted by such bad weather in Q3, July and August?

[Foreign Language]

[Foreign Language]

[Interpreted] [ Elaine ], because the construction on chemical factories, the payment was based on the progress. So by end of second quarter, company made few payments to this construction contractors and beginning of third quarter, also made some to further construction for -- to the contractors, by first quarter, company plans to buy equipment and pay a big part of the construction to this contractor.

I don't think you understood my question. My question was about the weather, the rain in July and August and if it impacted the production?

Do you mean the weather in July?

The weather in July and August. I understand there was a lot of rain and a lot of companies have reported that their production was impacted by the rain. I wanted to know if you were impacted by the rain and if it had an impact on your production?

[Foreign Language]

[Foreign Language]

[Interpreted] So the rain this year in July and August, the impact -- had impact on the company was small. So that's why it is not mentioned specifically.

Our next question comes from [ Jordan Warren ] with -- a private investor.

I was wondering when are you going to release -- the 3- to 5-year plan going to be released?

[Foreign Language]

[Foreign Language]

[Interpreted] Okay. So we will provide preliminary guidance maybe by end or beginning of next year for the year 2021. But for this 3 to 5 year's guidance, we had to wait until our chemical factory back to its production, then we can provide.

All right. I have one last question. Are you guys still trying to buy back shares?

[Foreign Language]

[Foreign Language]

[Interpreted] We are not considering about it currently because we want to use the cash on hand to bring back the company factories back in operation. We may consider about it when all our factories have been back in operation.

Our next question comes from [ Max Warren ], private investor.

How many tons of bromine can these 4 factories produce a year at peak performance?

Do you mean -- because now we only have 4 factories in production.

Yes. I'm just talking about these 4 factories.

So you mean the maximum production which we can have?

Yes, yes, yes.

[Foreign Language]

[Foreign Language]

So Max, do you mean a year or every month?

A year. How much bromine can you produced in a year?

Across a year. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Interpreted] We didn't do special analysis yet for next year. But we think for next year, the amount would be around 5,000 pound for this full current bromine factory.

Awesome. Okay. And I have one more question. Would management be willing to sell the entire company to Petro China or any other company for book value, $26 a share?

[Foreign Language]

[Foreign Language]

[Interpreted] Okay. So until now, we did not receive any offer yet. But we think this kind of question is not responded by company management, it should be better considered or provided by company's directors of the Board.

[Foreign Language]

[Interpreted] But I personally think I have confidence in this company. I and my team want to work hard to improve -- continually improve the company's long-term value.

Our next question comes from [ Randy Leggett ], a Private investor.

Thank you for putting up with me, Helen. Just a couple of questions, and I'm not going to keep this long because some of them have already been answered. But how about a PR firm? I know we discussed that few several, several quarters ago. There's no volume in the stock. It's kind of just so lethargic right at the moment, there just doesn't seem to be any interest. You've got a good story to put out there. Why can't we hire somebody? You can't do it all. Second quick question is, have you all discussed anything with Petro China about the natural gas field, what their plans are going forward, things like that? And third of all, have you all even thought about asking Morgan Stanley, Goldman Sachs, all the big investment banking guys are there, including Bank of China, and just throw out options that you all will try to do something to -- I would think the officers and the majority shareholder would want to make money, and we just haven't made any money in a long time. So those are my 3 questions. And thank you.

Okay. Randy, I think for your first question. Just want to make it clear. First question, you mean why don't the company higher somebody like external IR to handle this, makes the company more...

Yes. You couldn't do it all. I mean you can't do it all. And for U.S. investors, your story is obviously not out there. And I know we talked about it. I thought we paid. I thought we gave somebody some stock. I don't know, sometime last year maybe.

Okay. So what's your second question?

It was about -- have you all had any discussions with the executives of Petro China about the natural gas field? Have they talked to you all about anything they're thinking about? I mean, what is taken so long up there? Is that just local governments just kind of taking their time? I know that's probably a big deal, but you would think we're Petro China involved, they would probably hurry along a little bit faster. And the third one was with all the big investment banks, I just wish at some point, we might interact with one of those, just to discuss other options out there to get the stock price up a little bit. I would think the majority shareholder -- I can't remember what his name is right off the top of my head, I would think he'd want the stock to go up like the rest of my shareholders. Like you all would, too, as shareholders. So those are the 3 quick questions, and I appreciate as usual, Helen.

Okay. I'll translate to Mr. Liu. [Foreign Language]

[Foreign Language]

[Interpreted] So for your first and third question, we definitely consider your suggestion, but our company wants to wait until its operation, more specific, more confirmed, then we think at that time, if we continue to hire the IR or talk to the investment bank. Based on their experience and consulting to help the company to grow its share price of being -- long-term value to our shareholders, which is for question one and three. Second question, the company is talking to local government and the related government departments. But because this process is complicated. We have to wait until the government finalized its planning on this Sichuan Province for the land and resources, then we can do something for our application. Otherwise, we cannot do anything until government finish its plan.

One quick question here. I thought you all said in the press release you had already -- you were going to start the application process. Did I misread that?

No, no, no. You can see, again, until the government finalized its land and resources planning. In our preparation side.

Our next question comes from [ John Rowells ], private investor.

Yes. You're halfway through quarter 4. Can you tell us approximately how many tonnes of bromine you expect to ship in quarter 4?

It will be, like I said in our -- this call, it will be similar to this quarter -- the third quarter.

It was my impression that your capacity was increasing as you commission these factories. So I thought your capacity in quarter 4 might be higher than quarter 3.

Okay. Just hold on, I'll translate. [Foreign Language]

[Foreign Language]

[Interpreted] Yes. Okay. We hope it can be higher than third quarter. But in our fourth quarter because of there are still some uncertainties due to the weather and the holidays, so we cannot say it will be definitely higher. So to be conservative, we think it will be similar at the third quarter.

Okay. One related question. Are your bromine sales limited by factory capacity or by customer demand?

[Foreign Language]

[Foreign Language]

[Interpreted] Currently, we are based on our capacity.

There are no further questions at this time, Helen. I would like to turn the call back over to you for any closing comments.

Okay. I think if there is no more question, can we close the call for today. [Foreign Language] So Thank you for attending this call. Have a good night.

[Foreign Language]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a great night.