Gulf Resources Announces Buy Back of shares from Company’s CEO, CFO and COO

SHOUGUANG, China, Dec. 02, 2022 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we,” or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China announced that the Company has entered into a stock repurchase agreement dated as of November 30, 2022, in which the Company agrees to purchase 80,000 shares from each of CEO Xiaobin Liu, COO Naihui Miao, and CFO Min Li in a privately negotiated transaction based on the closing price of the stock of $3.5931 per share on Wednesday, November 30, 2022.The closing of the repurchase transactions is expected to occur in December 2022 and subject to customary closing conditions.

Over the past year, the Company has received communications from many investors who have been concerned about the potential overhang on the market from insider selling. This insider selling has been caused primarily by the fact that management returned more than 11 years of portion of their cash compensation earned for their services with the Company, agreed to work for nominal or no cash compensation, and needed money for living expenses.

In 2021, the Company management had expected the Company’s stock price to improve, but COVID-19 circumstances and supply chain disruptions have caused the delay in opening some facilities of the Company, while political tension between the U.S. and China may have caused U.S. listed Chinese stocks to underperform. Despite the strong and above guidance earnings in the first nine months of 2022, Gulf’s shares have not performed as well as the Company expected.

The Company concluded that the threat of insider sales may had also contributed to the underperformance of the stock price. But while the Company is unable to get money out of China to buy back stock in the U.S., the Company could try to remove some of the potential overhang by buying some stock from management in China.

The Company met with management and suggested that buying a block of stock from each of the three senior leaders may relieve some of the potential overhang. Accordingly, each of the three senior executives agreed to sell 80,000 shares of stock at this time to the Company. The retirement of these shares may also positively impact earnings and help to limited reduce some of the pressure from market.

The Company remains optimistic about its future. However, the Company wants to show investors that it is willing to respond to their concerns. While the Company wishes it was able to take money out of China, it believes this transaction may demonstrate that the Company may try its best to respond to the investors.