Greetings and welcome to Gulf Resources 2021 First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Helen Xu, Director of IR.

Thank you, operator. Good morning, ladies and gentlemen and a good evening to all those of you joining us from China. And we would like to welcome all of you to Gulf Resources’ first quarter 2021 earnings conference call. I am Helen Xu, the IR Director. The company’s CEO, Mr. Xiaobin Liu, will also join this call today. I would like to remind you to all of our listeners that in this call, certain management’s statements during the call will contain forward-looking information about Gulf Resources Incorporation and its subsidiaries, business and products within the meaning of Rule 175 under 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 the PRC, the risks associated with the COVID-19 pandemic outbreak, future product developments 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 production chemicals, changing technology, ability to make future bromine assets and the various other factors beyond the 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 revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Accordingly, our company believes expectations reflecting those forward-looking statements are reasonable and there can be no assurance of such will prove to be correct. In addition, any reference to the company’s future performance represents the management’s estimates as of…

Thank you. I will do the translation for Mr. Liu. So, thank you, Helen. I am Xiaobin Liu, the CEO of the company. First of all, I would like to welcome all of you to the Gulf Resources earnings conference call for the first quarter of year 2021. Despite all of the 4 operating bromine and crude salt facilities being closed for majority of the quarter, the 3 other bromine and crude salt facilities are waiting for government approval. The chemical factory has been under construction and the Sichuan facilities also awaiting government approval. Our company was still able to generate $3.3 million in free cash flow with our fourth facility fully operational and with bromine prices nearing record levels. We are very optimistic that our second quarter and full year 2021 will be profitable even if our other facilities remain closed. So, now, let’s look at start a discussion of the results for this quarter, which I believe will answer most of the questions we received from the company’s investors recently. Firstly, let’s look at the balance sheet. Despite 2.5 half years of closure of most of our facilities, the impact of Typhoon Lekima, the most destructive typhoon ever to hit China, the cost of constructing our new chemical factory, the cost of drilling new wells and all the costs related to new government environmental policies, our balance sheet remains in excellent shape. The company ended the first quarter with cash of $96.7 million, approximately $9.67 per share, net-net cash, which is cash managed, all liabilities of $76.4 million. Current assets were $104.6 million versus current liabilities of $10.5 million. Working capital equaled $94.1 million. Shareholders’ equity equaled to $272.3 million. We had enough capital to finish the construction of our chemical plant, open our remaining bromine and crude…

[Foreign Language]

Thank you, Mr. Liu. So based on the strong results in the first half of the second quarter, we have confidence that our quarter and fiscal year is – both will be profitable. With the projected opening of our chemical factory with some of our other facilities, we look forward to strong financial results from the year 2022. Over the past 3.5 years, we have struggled with the closure of all of our facilities with environmental remediation as well as the impact of Typhoon Lekima. Even with all of our difficulties, our balance sheet remains very strong. It has almost $97 million in cash, which can be used to build our chemical factory, open our closed facilities and develop our business in Sichuan. We also believe that with the exception of the remaining expenditures for our chemical factory, we will return to generating free cash flow and will achieve profit. As soon as we have visibility on the timing of production in our chemical factory as well as opening of our closed facilities, the company will present to the investors with our 5-year plan for growth and development in future. And the company will also organize virtual events, so shareholders can better know and appreciate the company. Now, let’s open for the QA section. Hi, operator.

Thank you. [Operator Instructions] Our first question is from [indiscernible], a Retail Investor. Please proceed.

Hi, Helen. My name is Keegan. I had one question for you. So Gulf Resources repurchased shares in 2011, 2014 and 2015. The company has $97 million in cash. And if I’m interpreting the latest 10-Q correctly, it will take $28.5 million to finish the chemical factory, leaving a large amount of cash remaining. Given the shares are so undervalued from a shareholder equity perspective, and we expect a strong second quarter, can we return to purchasing shares? Repurchasing shares will provide significant investor confidence in the company’s financials.

Okay. I will translate to Mr. Liu.

So, this question – Mr. Keegan, this question, the company always been explaining to our investors that even though company has this cash – in cash, but besides the expenditures for the chemical factory, the company also had to get back the last three bromine and crude salt facilities back in operation. If there is any further upgrade need by the government. And our Sichuan project, which also needs fund in the future. The company also considerably expands its business by doing acquisition in future. So firstly, company wants to keep enough cash on hand for all of this and its normal business operations and growth first.

Okay. I understand. Can I make a request then? I mean, for the next 10-Q to put a plan of what it would take to repurchase shares or at least put what you just told me in writing into the 10-Q? I think a lot of investors are watching the share repurchase pretty closely. So, just an idea. So, that’s all for me. Thanks so much.

Okay, thank you.

Thank you. Our next question is from Randy Widget, a Private Investor. Please proceed.

Hey, Helen, good morning. Just a quick question, can you all expound a little bit just very briefly on why the approvals on the gas and the other factories are taking so long, and maybe explain what all goes into that? I realize you’re dealing with governmental people. But it sure does seem like it’s taking a long time. And as usual, I appreciate it. Thank you.

Okay.

[Foreign Language]

Okay. [Foreign Language]

[Foreign Language]

Okay. Okay. [Foreign Language]

So firstly, let’s look at the Sichuan projects. We will provide a very detailed explanation on this background and the current situation. Firstly, starting the beginning, the company signed a unique agreement with county level governments. That time, it was allowed that company signed with these county level government investment agreements and it was allowed the company can do mining. But later on, the Chinese mining policy changed after some years. It meets provincial level approval and the planning approval. Then, the company can do mining in Sichuan Province. So company had to temporarily stop its agreement with previous county level government agreements. Now, the county level government is organizing all its planning and submit its application to provincial governments and waiting for provincial government’s feedback approval and approval on this mining and the planning. This is the current situation. I hope I explained it clearly.

Yes. Thank you.

Okay. Now let’s look at the second question. On the rest, three bromine and crude salt facilities, Mr. Liu will explain further.

[Foreign Language]

Okay. Okay.

So, for the rest 3 bromine and the crude salt facilities, because this was better in many years ago, the acquisition the company did with these three factories, they – with lower price, but without they don’t have mining permits that time. By that time, the government policy allowed previous – allowed to use one parent company permits can do mining. But now after some years, the government policy also changed. It needs individual bromine facilities have these individual permit and assessment. So, company have to do for each bromine facility it’s project planning, landing, environmental protection and all relevant approval again and submit to government. Then the company’s recent years, like 3.5 years, we’re doing this and upgrading its facilities. We already get full of these factories approvals. So we believe with our continuing work and experience, we will get our remaining three facilities approval and back in operation. Because the company – no, the government is also finalizing the planning for all areas, also including the prevention of flood. So it may take a longer time, but these are in process.

Okay, thanks so much.

You are welcome.

Thank you. There are no more questions at this time. Would you like to make any closing remarks?

No more questions?

No.

Okay. Thank you.

Hi, operator. Thank you for carrying forward all the calls today. Thank you for attending the earnings conference call. And thank you very much. Have a good night and have a good morning in the U.S. Thank you. Bye-bye.

This concludes today’s conference. You may disconnect your lines at this time. Thank you very much for your participation, and have a great day.

Thank you and have a good day.