Gulf Resources Clarifies the Possible Effect of the Proposed Reverse Stock Split on the Company’s Proposed 2019 Omnibus Equity Incentive Plan
SHOUGUANG, China, Nov. 29, 2019 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today clarified the possible effect of the proposed reverse stock split on the Company’s proposed 2019 Omnibus Equity Incentive Plan.
On our 2019 third quarter earnings conference call held on November 14, 2019, a shareholder asked a question about the possible impact of the proposed reverse stock split on the proposed 2019 Omnibus Equity Incentive Plan that will be voted on at the annual shareholders meeting on December 18, 2019. The Company would like to clarify and make sure that all shareholders fully understand this subject.
As disclosed in the definitive proxy statement filed with the US Securities Exchange Commission (“SEC”) on November 1, 2019, the Company has proposed to effect a reverse stock split to increase the market price of its common stock so that the Company is able to regain compliance with the NASDAQ minimum bid price requirement.
As disclosed in the same definitive proxy statement, the Company is seeking approval of the stockholders to adopt the Company’s 2019 Omnibus Equity Incentive Plan (the “2019 Plan”). If the 2019 Plan is approved, awards under the 2019 Plan will be limited in the aggregate to 10,341,989 shares of our common stock, inclusive of the awards that were previously issued and outstanding under the Company’s 2007 Equity Incentive Plan, as amended. The Company believes that it has kept salaries and other expenses low and that it is in the best interest of the Company to provide incentives to its employees, directors, consultants, and advisors. Details of the proposals on the reverse split and 2019 Plan are available on the SEC’s website at https://www.sec.gov/Archives/edgar/data/885462/000119380519001384/e619148_def14a-gulf.htm.
The Company’s 2019 Plan provides for proportionate adjustments to the number of shares subject to the plan in the event of a reverse stock split. Should the aforesaid reverse stock split be effected, the 2019 Plan provides for proportionate adjustments to the number of shares available for issuance and awardable, and as applicable, automatic proportionate adjustments to the shares awarded and the exercise price, grant price or purchase price relating to awards under such plan. Accordingly, if both proposals are approved by the stockholders and the reverse stock split is implemented by the board of directors, upon the effectiveness of the reverse stock split, the number of all outstanding equity awards, the number of shares available for issuance and awardable and the exercise price, grant price or purchase price relating to any award under the 2019 Plan will be proportionately adjusted using the split ratio determined by the board of directors (subject to the treatment of fractional shares). For example, if a 1-for-4 reverse stock split is effected, the 4,895,989 shares that remain available for issuance under the incentive plan as of November 1, 2019, would be adjusted to 1,223,997 shares.
The Company is in the process of making efforts to regain compliance with the NASDAQ requirements, and return to its profitability.
If any shareholders have any questions about the proposals on the reverse split or the 2019 Plan, they are urged to contact the Company in a timely manner.
About Gulf Resources, Inc. Gulf Resources, Inc. operates through three wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"), and Daying County Haoyuan Chemical Company Limited (“DCHC”). 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. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit www.gulfresourcesinc.com.
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, 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.
