Market Newsdesk

        Initiates Phase II OVATION 2 Study of GEN-1 in Advanced Ovarian Cancer

Continues Following Patients for Overall Survival in Phase III OPTIMA Study



Conference Call Begins Today at 11:00 a.m. Eastern Time

LAWRENCEVILLE, N.J, Nov. 16, 2020 (GLOBE NEWSWIRE) —

Celsion Corporation

(NASDAQ: CLSN), an oncology drug development company, today announced financial results for the three and nine months ended September 30, 2020, and provided an update on clinical development programs with GEN-1, its DNA-mediated IL-12 immunotherapy currently in Phase II development for the treatment of advanced ovarian cancer, and ThermoDox^®, its proprietary heat-activated liposomal encapsulation of doxorubicin currently in Phase III development for the treatment of hepatocellular carcinoma (HCC), or primary liver cancer.

“The OVATION 2 Study with our GEN-1 immunotherapy continues recruitment into the 100 mg/m² dose cohort,” said Michael H. Tardugno, Celsion’s chairman, president and chief executive officer. “This study is based on encouraging results from our Phase Ib OVATION 1 Study in advanced ovarian cancer. In June 2020, the Data Safety Monitoring Board (DSMB) for the OVATION 2 Study recommended that the Phase II portion proceed with the dose of 100 mg/m², and in July 2020, we announced the randomization of the first two patients in this portion of the Study. This milestone was achieved approximately five months ahead of our previously announced schedule. We have a very aggressive recruitment program in place and anticipate completing enrollment of approximately 110 patients in the second or third quarter of 2021. Importantly, as an open-label study, clinical updates will be provided throughout the course of treatment, including response rates and surgical resection scores,” Mr. Tardugno added.

Continuing his comments, Mr. Tardugno noted, “Since the DMC’s finding that the OPTIMA Study crossed the futility boundary, albeit with substantial uncertainty, and leaving the decision to terminate the Study up to the Company, we have determined to continue following patients for overall survival (OS) until such time as futility is either confirmed or dispelled.”

Mr. Tardugno added, “As promised, Celsion has engaged a global biometrics contract research organization (CRO), with forensic statistical analysis capability that specializes in data management, statistical consulting, statistical analysis and data sciences. They have particular expertise in evaluating unusual data from clinical trials, and experience with associated regulatory issues. The primary objective of the CRO’s work is to determine the basis and reasoning behind continuing to follow patients for OS. Also as promised, and in parallel, the Company has submitted all OPTIMA Study clinical trial data to the National Institutes of Health (NIH) for an independent evaluation using a Cox Regression Analysis for minimum burn time per tumor volume. This evaluation is similar to the hypothesis generated from the NIH paper published in the Journal of Vascular and Interventional Radiology.”

In conclusion, Mr. Tardugno stated, “Celsion feels strongly that we owe it to patients, physicians and our investors to continue examining the data from the OPTIMA Study, particularly given how surprising the recommendation was to Celsion from the DMC. While the trial outcome as predicted by the second interim analysis may not change, and as unlikely as it may be, in the event we see substantial clinical benefit from the CRO and NIH analyses, we will carefully review our options with the 14 regulatory agencies under which the OPTIMA Study is being conducted. We expect to report findings from these independent analyses before the end of the year, either or both of which will guide our decision to continue to follow patients to the final analysis at 197 or more deaths, a milestone we expect to be reached in mid-2021.”

Recent Developments

GEN-1 Immunotherapy

Initiation of Phase II OVATION 2 Study in Advanced Ovarian Cancer
. In July 2020, the Company announced the randomization of the first two patients in the Phase II portion of the OVATION 2 Study with GEN-1 in advanced ovarian cancer. The Company anticipates completing enrollment of up to 118 patients in mid-summer 2021. Because this is an open-label study, clinical updates will be provided throughout the course of treatment including response rates and surgical resection scores. The OVATION 2 Study combines GEN-1 with standard-of-care neoadjuvant chemotherapy (NACT) in patients newly diagnosed with Stage III/IV ovarian cancer. NACT is designed to shrink the tumor as much as possible for optimal surgical removal after three cycles of chemotherapy. Following NACT, patients undergo interval debulking surgery, followed by three adjuvant cycles of chemotherapy and up to nine additional weekly GEN-1 treatments, the goal of which is to delay progression and improve OS. The OVATION 2 Study is an open-label, 1-to-1 randomized trial, 80% powered to show the equivalent of a 33% improvement in progression-free survival (PFS) (HR=0.75), the primary endpoint, when comparing the treatment arm (standard of care + GEN-1) with the control arm (standard of care alone).

ThermoDox
^®

Patients in Phase III OPTIMA Study Continue to be Followed for Overall Survival.
In August 2020, the Company provided an update on its ongoing review of unblinded data from the second pre-planned interim analysis of the global Phase III OPTIMA Study. The Company announced it will continue following patients for OS, noting that the unexpected and marginally crossed futility boundary suggested by the Kaplan-Meier analysis at the second interim analysis on July 9, 2020 may be associated with a data maturity issue.

Recommendation from the Independent DMC to Consider Stopping the Phase III OPTIMA Study of ThermoDox^® in Primary Liver Cancer.
In July 2020, the Company announced that it received a recommendation from the independent DMC to consider stopping the global Phase III OPTIMA Study. The recommendation was made following the second pre-planned interim safety and efficacy analysis by the DMC on July 9, 2020. The DMC analysis found that the pre-specified boundary for stopping the trial for futility of 0.900 was crossed with an actual value of 0.903. However, the p-value of 0.524 for this analysis provides uncertainty. The DMC left the final decision of whether or not to stop the OPTIMA Study to Celsion. There were no safety concerns noted during the interim analysis.

The statistical plan for the OPTIMA Study included two interim efficacy analyses by the DMC. The first interim analysis was announced in November 2019 following data lock in August 2019 after the prescribed minimum number of 128 patient events (deaths) was reached, and the second interim analysis was conducted on July 9, 2020 following data lock in April 2020 after the prescribed minimum number of 158 events was reached.

Corporate Developments

New Common Stock Purchase Agreement with Lincoln Park Capital.
In September 2020, the Company announced a common stock purchase agreement for the issuance and sale, from time to time, of up to $26 million of shares of common stock with Lincoln Park Capital Fund, LLC (LPC). In connection with the execution of the purchase agreement, LPC made an initial purchase of $1 million of common stock at $1.00 per share, representing a significant premium to the then-current market price. Under the terms of the new purchase agreement with LPC, the Company has the right at its sole discretion, but not the obligation, to sell to LPC up to $26 million worth of shares (including the $1 million initially purchased) over the 36-month term of the agreement, subject to certain conditions. There are no upper limits to the price per share LPC may pay to purchase the shares, and the purchase price of the shares will be based on the prevailing market prices at the time of each sale to LPC. Celsion controls the timing and amount of any future sales of its stock to LPC. There are no warrants, derivatives, financial or business covenants associated with the agreement, and LPC has agreed not to cause or engage in any direct or indirect short selling or hedging of Celsion’s common stock.

Strategic Loan Facility with Horizon Technology Finance Corporation Restructured.
In September 2020, the Company announced an amendment to its $10 million loan agreement with Horizon Technology Finance Corporation. Consistent with its target to leverage equity capital, the Company elected to reduce its outstanding debt under the loan by $5 million and restructure the terms of the remaining $5 million loan balance. The Company’s restructured $5 million loan is in the form of secured indebtedness bearing interest at a LIBOR-based variable rate. Payments under the loan agreement are interest only for the first 12 months through July 2021, followed by a 21-month amortization period of principal and interest through the scheduled maturity date of April 2023. In conjunction with the amended loan agreement, Celsion issued to Horizon warrants exercisable for 247,525 shares of Celsion’s common stock at an exercise price of $1.01 per share. Warrants previously issued to Horizon exercisable for 95,057 shares at an exercise price of $2.63 per share were cancelled.

Third Quarter Financial Results

For the quarter ended September 30, 2020, Celsion reported a net loss of $8.1 million ($0.24 per share), compared with $5.5 million ($0.25 per share) in the same period of 2019.

Research and development expenses decreased $1.2 million to $2.5 million in the third quarter of 2020, compared with $3.7 million in the third quarter of 2019. Clinical development costs for the Phase III OPTIMA Study decreased $0.7 million to $0.5 million in the third quarter of 2020, compared with $1.2 million in the third quarter of 2019, due to the completion of enrollment in this 556-patient trial in August 2018. Costs associated with the OVATION 2 Study were $0.2 million in each of the third quarters of 2020 and 2019. Other costs related to clinical supplies and regulatory support for the ThermoDox^® and GEN-1 clinical development programs decreased to $1.3 million in the current quarter from $1.4 million in the third quarter of 2019, largely driven by lower regulatory costs for ThermoDox®. General and administrative expenses were $1.8 million in each of the third quarters of 2020 and 2019.

Operating expenses were $4.3 million in the third quarter of 2020, which represented a $1.2 million (21.8%) decrease from $5.5 million in the same period of 2019. These lower operating expenses were offset by the following non-operating expenses: (i) a non-cash charge of $1.1 million for the change in valuation of the earn-out milestone liability for the GEN-1 ovarian product candidate; and (ii) a non-cash charge of $2.4 million related to the impairment of certain in-process research and development assets related to the development of the Company’s GBM cancer product candidate.

In connection with the Company’s venture debt facility with Horizon entered in late June 2018, the Company repaid $5.0 million of the loan and restructured the remaining $5.0 million for one-year interest only payments and 21-month payback period thereafter. The Company incurred interest expense of $0.5 million during the third quarter of 2020. This compares with interest expense of $0.3 million in the comparable prior-year period.

The Company ended the third quarter of 2020 with $18.3 million in cash and cash equivalents. Coupled with future planned sales of its New Jersey NOL’s, the Company believes it has sufficient capital resources to fund its operations through the end of 2021. The Company has based its estimates on assumptions that may prove to be wrong and, accordingly, the Company may need to obtain additional funds sooner or in greater amounts than is currently anticipated.

Nine Month Financial Results

For the nine months ended September 30, 2020, the Company reported a net loss of $18.5 million ($0.62 per share), compared with $13.7 million ($0.67 per share) in the same period of 2019.

Research and development expenses decreased $1.5 million to $8.5 million in the first nine months of 2020 from $10.0 million in the comparable prior year period. Clinical development costs for the Phase III OPTIMA Study decreased by $1.5 million to $1.8 million in the first nine months of 2020, compared with $3.3 million in the first nine months of 2019, due to the completion of enrollment in this 556-patient trial in August 2018. Costs associated with the OVATION 2 Study increased to $0.7 million in the first nine months of 2020, compared with $0.4 million in the comparable nine-month period in 2019. Other costs related to ThermoDox^® and GEN-1 clinical development programs decreased by $0.2 million in the first nine months of 2020, compared with the same prior-year period due to lower regulatory costs for the ThermoDox development program.

General and administrative expenses were $5.5 million in the first nine months of 2020, compared with $6.2 million in the same period of 2019. This 11% decrease was primarily attributable to lower professional fees.

Operating expenses were $14.1 million during the first nine months of 2020, which represented a $2.1 million (13%) decrease from $16.2 million in the same period of 2019. These lower operating expenses in the first nine months of 2020 were offset by the following non-operating expenses: (i) a non-cash charge of $1.4 million for the change in valuation of the earn-out milestone liability for the GEN-1 ovarian product candidate, compared with a non-cash gain of $2.7 million, net of charge of $0.4 million, for the 200,000 warrant issuance related to an amendment for the potential milestone payments for the GEN-1 ovarian product candidate during the comparable prior-year period; and, (ii) a non-cash charge of $2.4 million related to the impairment of certain in-process research and development assets related to the development of the Company’s GBM cancer product candidate.

The Company realized $0.1 million of interest income during the first nine months of 2020 and $0.4 million in the comparable prior-year period. The Company incurred interest expense of $1.2 million and $1.0 million during the first nine months of 2020 and 2019, respectively.

Net cash used for operating activities was $11.9 million in the first nine months of 2020, compared with $16.2 million in the same period in 2019. This was in line with the Company’s projected cash utilization for 2020 of approximately $15.6 million, or an average of approximately $3.9 million per quarter. Cash provided by financing activities was $15.4 million during the first nine months of 2020 resulting from equity offerings in March 2020 and June 2020, and proceeds from (i) the sale of equity from its ATM facility with Jones Trading, (ii) the sale of equity from its Common Stock Purchase Agreement with Lincoln Park Capital, including a $1 million sale at 22% premium to market in September 2020, and (iii) the exercise of stock options.

Third Quarter Conference Call

The Company will host a conference call to provide a business update and discuss third quarter 2020 financial results at 11:00 a.m. EST today. To participate in the call, interested parties may dial 1-800-367-2403 (Toll-Free/North America) or 1-334-777-6978 (International/Toll) 10 minutes before the call is scheduled to begin, and ask for the Celsion Corporation Third Quarter 2020 Earnings Call (Conference Code: 8337630). The call will also be broadcast live on the internet at www.celsion.com.

The call will be archived for replay on November 16, 2020 and will remain available until November 30, 2020. The replay can be accessed at 1-719-457-0820 or 1-888-203-1112 using Conference ID: 8337630. An audio replay of the call will also be available on the Company’s website, www.celsion.com, for 90 days after 2:00 p.m. EST on November 16, 2020.

About Celsion Corporation

Celsion is a fully integrated oncology company focused on developing a portfolio of innovative cancer treatments, including immunotherapies, DNA-based therapies and directed chemotherapies. The Company’s product pipeline includes GEN-1, a DNA-based immunotherapy for the localized treatment of ovarian cancer and ThermoDox^®, a proprietary heat-activated liposomal encapsulation of doxorubicin, currently in Phase III development for the treatment of primary liver cancer and in development for other cancer indications. Celsion has two feasibility stage platform technologies for the development of novel nucleic acid-based immunotherapies and other anti-cancer DNA or RNA therapies. Both are novel synthetic, non-viral vectors with demonstrated capability in nucleic acid cellular transfection. For more information on Celsion, visit: http://www.celsion.com. (CLSN-FIN).

Celsion wishes to inform readers that forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, unforeseen changes in the course of research and development activities and in clinical trials; the uncertainties of and difficulties in analyzing interim clinical data; the significant expense, time, and risk of failure of conducting clinical trials; the need for Celsion to evaluate its future development plans; possible acquisitions or licenses of other technologies, assets or businesses; possible actions by customers, suppliers, investors, competitors or regulatory authorities; and other risks detailed from time to time in Celsion’s periodic reports and prospectuses filed with the Securities and Exchange Commission. Celsion assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

Celsion Investor Contact

Jeffrey W. Church
609-482-2455
[email protected]

LHA Investor Relations


Kim Sutton Golodetz

212-838-3777


[email protected]

Celsion Corporation

Condensed Statements of Operations

(in thousands except per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Licensing revenue		$	125			$	125			$	375			$	375
Operating expenses:
Research and development			2,492				3,674				8,535				10,000
General and administrative			1,793				1,839				5,533				6,193
Total operating expenses			4,285				5,513				14,068				16,193
Loss from operations			(4,160	)			(5,388	)			(13,693	)			(15,818	)
Other income (expense):
(Loss) gain from change in valuation of earn-out milestone liability			(1,100	)			86				(1,397	)			3,089
Loss from impairment of in-process research and development			(2,370	)			–				(2,370	)			–
Fair value of warrants issued in connection with amendment to modify GEN-1 earn-out milestone payment			–				–				–				(400	)
Interest expense, investment income and other income (expense), net			(442	)			(175	)			(1,011	)			(620	)
Total other income (expense), net			(3,912	)			(89	)			(4,778	)			2,069
Net loss		$	(8,072	)		$	(5,477	)		$	(18,471	)		$	(13,749	)
Net loss per common share
Basic and diluted		$	(0.24	)		$	(0.25	)		$	(0.62	)		$	(0.67	)
Weighted average shares outstanding
Basic and diluted			34,112				21,663				29,935				20,525

Celsion Corporation

Selected Balance Sheet Information

(in thousands)

ASSETS		September 30, 2020 (Unaudited)				December 31, 2019
Current assets
Cash and cash equivalents		$	18,340			$	6,875
Investment securities and interest receivable on investment securities			–				8,007
Advances, deposits on clinical programs and other current assets			1,566				1,353
Total current assets			19,906				16,235
Property and equipment			302				405
Other assets
Deferred tax asset			–				1,820
In-process research and development			13,366				15,736
Goodwill			1,976				1,976
Operating lease right-of-use assets, net			1,147				1,432
Other intangible assets, deposits and other assets			578				674
Total other assets			17,067				21,638
Total assets		$	37,275			$	38,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	4,088			$	5,166
Notes payable – current portion			416				1,840
Operating lease liability – current portion			422				388
Deferred revenue – current portion			500				500
Total current liabilities			5,426				7,894
Earn-out milestone liability			7,115				5,718
Notes payable			4,627				7,963
Operating lease liability			823				1,144
Deferred revenue and other liabilities			625				1,000
Total liabilities			18,616				23,719
Stockholders’ equity
Common stock			362				232
Additional paid-in capital			327,370				304,886
Accumulated other comprehensive gain (loss)			–				43
Accumulated deficit			(308,988	)			(290,517	)
			18,744				14,644
Less: Treasury stock			(85	)			(85	)
Total stockholders’ equity			18,659				14,559
Total liabilities and stockholders’ equity		$	37,275			$	38,278

SHOUGUANG, China., Nov. 16, 2020 (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, today announced its unaudited financial results for the third quarter and the 9 months ended September 30, 2020 and provided a business update for shareholders.

Company Highlights

• On a year-to-year basis, revenues increased by 130% to $10,482,185 from $4,548,542.
• On a quarter to quarter basis, revenues increased by 96%
• Loss from operations of ($2,912,581) in the quarter ended September 30,2020 compared to a loss of ($13,029,028) in the period previous year and a loss of ($2,244,619) in the second quarter.
• Cash was $95,623,812 ($9.56* per share).
• Net cash (Cash Minus all Liabilities) was $81,314,429 ($8.13* per share).
• Book Value was $263,587,240 ($26.37* per share).

Third Quarter 2020

In our third quarter 2020, our revenues increased by 130% to $10,482,185 from $4,548,542 on a year-to-year basis. We had 4 bromine and crude salt factories in operation for the entire quarter versus 2 in the previous year. On a sequential basis, revenues increased by 96% as our factories ramped up production. The Company reported a loss from operations of ($2,912,581) compared to a loss of $(13,029,028) in the previous year and loss of ($2,244,619) in the second quarter of 2020.

The Company sustained an operating loss on its chemical factory, which is under construction, and its natural gas project, which is temporarily halted. The Company also incurred significant expenses including depreciation and amortization as well as salaries related to the remaining three closed bromine and crude salt factories.

Nine Months 2020

For the 9 months ended Sept. 30, 2020, revenues increased by 54.8% to $16,399,338 from $10,596,521 in the same period of 2019. Cost of net revenue was $12,694,271 or 77.4% vs. $5,430,269 or 51.2% year over year. The primary factors contributing to the lower margins were the lower price of bromine in 2020 coupled with additional direct costs and depreciation and amortization of the newly opened factories. Direct labor and factory overheads incurred during plant shutdown declined to $6,886,215 in the current period from $10,653,690 in the same period in the previous year reflecting the higher number of factories in operation. The loss from operations was $10,522,799 in the current period versus $13,690,605 in the same period in the previous year. The net loss was $8,696,959 in the current period compared to $18,670,871 in the same period in previous year. The net loss per share was ($0.91) in the current period compared to a loss of ($1.98) in the same period in previous year.

Balance sheet

Despite of facility closure and expenditures on new factories, new wells, and new salt ponds, as well as our new chemical factory, we believe our balance sheet remains very strong.

At the end of the third quarter, cash was $95,623,812 ($9.56* per share based on 9,997,477 shares.). Current assets were $104,682,870 ($10.47* per share). Working capital was $99,779,071 ($9.98* per share). Net cash (cash minus all liabilities) was $81,314,429 ($8.13 *per share), Book value per share was $263,587,240 ($26.37* per share).

The Company believes that assets are strong and that we do not need any write-downs for impairments. The Company also believes that we have enough cash to finish all our construction and build our business. We currently expect to eventually earn a strong return on our book value.

Cash Flow

The Company had a significant improvement in cash flow in 2020. For the 9 months in 2020, we had positive cash flow from operations of $3,258,010 compared to a loss from operation deficit of $12,320,640 in the previous year. We spent $9,860,142 on property plant & equipment compared to an expenditure of $57,317,368 in the previous year.

Segment Results

Bromine and Crude Salt
In the third quarter of 2020, on a year to year basis, revenues from our four operating bromine and crude salt factories increased to $10,482,185 from $4,548,542, an increase of 130%. More significantly, on a quarter-to-quarter basis, our revenues increased by 96%, reflecting the progress we have made in ramping up of our four factories.

In the third quarter, bromine revenues were $9,181,747 compared to $4,270,863 in the previous year, an increase of 115%. On a sequential basis, they increased by 105% compared to the second quarter of 2020. During the quarter, we sold 2,301 tonnes of bromine, compared to 1,222 tonnes in the 2nd quarter and 1,022 tonnes in the same quarter of the previous year. During the quarter, the average price of bromine declined to $3,989.88, an increase of 9.1% compared to the previous quarter and a decrease of 4.4% compared to the same quarter of 2019.

The bromine business had an operating profit of $1,962,262 compared to a loss of $5,185,484 in the same quarter of the previous year and a loss of $1,479,084 in the second quarter of 2020. Management is pleased with the progress it is making in its bromine business.

The price of bromine trends upward. In July 2020, it was 26,650 RMB per tonne. By the end of August 2020, it reached over RMB 29,000 per tonne. By the end of September 2020, it was above RMB 30,000 per tonne. On Nov.12, 2020, it reached RMB 32,278 per tonne. The upward trends in bromine price may augers well for company future revenue. (The chart below is from the Sun-Sirs Commodity Data Group (sunsirs.com).

A photo accompanying this announcement is available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/9728e2d8-0787-4174-916c-0aaea2009c64

In the third quarter, crude salt revenues increased to $1,300,438 from $277,679 in the same period of the previous year, an increase of 368%. On a sequential basis, crude salt revenues increased by 49% compared to the second quarter of 2020. The crude salt business loss was $484,278 in the quarter compared to a loss of $1,001,988 in the same quarter of the previous year and loss of $611,472 in the second quarter of 2020.

Factories #2
,#
8, and #10
We are still waiting for governmental approval for factories #2, #8, and #10. To our knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, we may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories to satisfy the local government’s requirements. Nevertheless, the Company expects to receive approvals for these factories by the first half of 2021.

Chemicals

The Company commenced production on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020. There are three major structures in this complex and all are currently under construction. The construction is expected to take approximately one year, and an additional six months to complete the equipment installation and testing. The Company expects to begin trial production at the beginning of 2022. The entire facility is expected to cost approximately $60 million. By the end of the third quarter 2020, the Company had spent $18.5 million (comprising land lease payments, professional fees related to the design of the factory and progress payment of the construction costs of the factory building) of the budget.

Management expects a strong return from this investment. In the previous two years before the shutdown for rectification, our chemical business had income from operation before corporate cost of approximately $25.5 million in year 2016 and $33.0 million in year 2015, respectively. While this new factory will be smaller than the combined two old factories, the Company expects it to make higher net profit margin as we plan to focus more on the higher margin pharmaceutical intermediate products. We are optimistic by the progress we are making on constructing our new factories. Management expects to post photos on its website each quarter so investors can track the progress of the construction of the chemical factories.

Natural Gas

We continue to be encouraged by the opportunities to produce natural gas and brine products in Sichuan Province. As disclosed previously, Petro-China’s discovery of natural gas in Tianbao Town is close to our current natural gas well. We believe this discovery could have material positive impact on the Company and may open significant opportunities for us. The Company believes that the government will more focus on finalizing the planning for exploration and exploitation of mineral resources in this area.

In addition, the Company plans to proceed with its applications for the natural gas and brine project approvals with related government departments after the government has finalized the land and resources planning for Sichuan Province.

Management Commentary

“We are very pleased to have our operating businesses generating a strong profit,” stated Liu Xiaobin, the CEO of Gulf Resources. “With the price of bromine increasing sharply, we should have a strong fourth quarter. We believe we are not far from returning to profitability and positive cash flow. We are also confident that we will receive approvals on our remaining three factories.”

“The construction of our chemical factories is on schedule,” Mr. Liu continued. “And it may take six months to install and test our new modern equipment, we believe our chemical factories will have higher net profit margin.” Mr. Liu continued. “With Petro-China making one of the largest natural gas discoveries in Chinese history in the same rural town as our current well situates, we continue to be optimistic about the opportunities in natural gas.”

“Now that we have some visibility,” Mr. Liu concluded, “we will endeavor to improve our communications with our investors. We will continue updating our company website. We expect to also provide projections on revenues and profits once all of our businesses have returned to full operation. We appreciate the patience of our shareholders and believe we will continue to show significantly improved results.”

(*These calculations are based on the number of shares outstanding of


9,997,477


shares
 as of September 30, 2020)

Conference Call

Gulf Resources management will host a conference call on Monday, November 16, 2020 at 08:00 PM Eastern Time to discuss its unaudited financial results for the third quarter and 9 months 2020 ended September 30, 2020.

Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company management team will be available for investor questions following the prepared remarks. 

To participate in this live conference call, please dial +1 (877) 407-8031 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (201)689-8031, and please reference to “Gulf Resources” while dial in.

The webcasting is also available then, just simply click on the link below: http://www.gulfresourcesinc.com/events.html 

A replay of the conference call will be available two hours after the call’s completion during 11/16/2020 23:00 ET – 11/30/2020 23:00 ET. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 38847.

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, the risks associated with the COVID-19 pandemic outbreak, 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.

CONTACT: Gulf Resources, Inc.

Web:	http://www.gulfresourcesinc.com
	Director of Investor Relations
	Helen Xu (Haiyan Xu)
	[email protected]

GULF RESOURCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in U.S. dollars)
(UNAUDITED)

	Three-Month Period Ended September 30,								Nine-Month Period Ended September 30,
	2020				2019				2020				2019
NET REVENUE
Net revenue	$	10,482,185			$	4,548,542			$	16,399,338			$	10,596,521
OPERATING INCOME (EXPENSE)
Cost of net revenue		(6,750,055	)			(2,403,532	)			(12,694,271	)			(5,430,269	)
Sales, marketing and other operating expenses		(15,785	)			(5,821	)			(28,866	)			(12,434	)
Direct labor and factory overheads incurred during plant shutdown		(1,538,193	)			(3,485,383	)			(6,886,215	)			(10,653,690	)
General and administrative expenses		(4,911,970	)			(5,020,215	)			(7,297,010	)			(8,460,733	)
Other operating loss		–				–				(15,775	)			–
		(13,216,003	)			(10,914,951	)			(26,922,137	)			(24,557,126	)
LOSS FROM OPERATIONS		(2,733,818	)			(6,366,409	)			(10,522,799	)			(13,960,605	)
OTHER INCOME (EXPENSE)
Interest expense		(32,257	)			(34,310	)			(102,573	)			(111,530	)
Interest income		70,819				101,130				216,662				369,582
LOSS BEFORE TAXES		(2,695,256	)			(6,299,589	)			(10,408,710	)			(13,702,553	)
INCOME TAX BENEFIT (EXPENSE)		(217,325	)			(6,729,439	)			1,711,751				(4,968,318	)
NET LOSS	$	(2,912,581	)		$	(13,029,028	)		$	(8,696,959	)		$	(18,670,871	)
COMPREHENSIVE INCOME (LOSS):
NET LOSS	$	(2,912,581	)		$	(13,029,028	)		$	(8,696,959	)		$	(18,670,871	)
OTHER COMPREHENSIVE LOSS
– Foreign currency translation adjustments		11,120,339				(8,690,103	)			6,826,849				(9,127,344	)
COMPREHENSIVE INCOME (LOSS)	$	8,207,758			$	(21,719,131	)		$	1,870,110			$	(27,798,215	)
LOSS PER SHARE:
BASIC AND DILUTED	$	(0.30	)		$	(1.37	)		$	(0.91	)		$	(1.98	)
WEIGHTED AVERAGE NUMBER OF SHARES:
BASIC AND DILUTED		9,566,333				9,516,614				9,533,729				9,448,371

GULF RESOURCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)
		September 30, 2020 Unaudited				December 31, 2019 Audited
Current Assets
Cash		$	95,623,812			$	100,301,986
Accounts receivable			7,328,182				4,877,106
Inventories, net			394,233				690,087
Prepayments and deposits			1,336,084				1,332,970
Other receivable			559				559
Total Current Assets			104,682,870				107,202,708
Non-Current Assets
Property, plant and equipment, net			136,655,572				137,994,949
Finance lease right-of use assets			179,829				179,526
Operating lease right-of –use assets			8,630,239				8,817,884
Prepaid land leases, net of current portion			9,714,711				9,115,276
Deferred tax assets			18,033,402				15,940,642
Total non-current assets			173,213,753				172,048,277
Total Assets		$	277,896,623			$	279,250,985
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts , other payable and accrued expenses		$	2,774,663			$	1,106,048
Retention payable			–				3,805,483
Taxes payable-current			1,501,816				779,623
Finance lease liability, current portion			175,253				198,506
Operating lease liabilities, current portion			452,067				416,604
Total Current Liabilities			4,903,799				6,306,264
Non-Current Liabilities
Finance lease liability, net of current portion			1,809,777				1,905,772
Operating lease liabilities, net of current portion			7,595,807				7,931,849
Total Non-Current Liabilities			9,405,584				9,837,621
Total Liabilities		$	14,309,383			$	16,143,885
Commitment and Loss Contingencies
Stockholders’ Equity
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding		$	—			$	—
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 10,043,307 and 9,563,257 shares issued; and 9,997,477 and 9,517,427 shares outstanding as of September 30, 2020 and December 31, 2019, respectively			24,139				23,904
Treasury stock; 45,830 and 45,830 shares as of September 30, 2020 and December 31, 2019 at cost			(510,329	)			(510,329	)
Additional paid-in capital			97,393,403				95,043,388
Retained earnings unappropriated			151,111,441				159,808,400
Retained earnings appropriated			24,233,544				24,233,544
Accumulated other comprehensive loss			(8,664,958	)			(15,491,807	)
Total Stockholders’ Equity			263,587,240				263,107,100
Total Liabilities and Stockholders’ Equity		$	277,896,623			$	279,250,985

GULF RESOURCES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars)

(UNAUDITED)

		Nine -Month Period Ended September 30,
		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(8,696,959	)		$	(18,670,871	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Interest on finance lease obligation			102,220				111,020
Depreciation and amortization			11,907,702				10,599,011
Unrealized exchange gain on translation of inter-company balances			648,331				(778,420	)
Deferred tax asset			(1,712,229	)			4,968,318
Issuance of restricted shares for services			2,350,250				21,600
Issuance of stock options to employee			—				45,900
Changes in assets and liabilities:
Accounts receivable			(2,273,999	)			(9,962,625	)
Inventories			300,136				(700,476	)
Prepayments and deposits			36,012				(28,577	)
Other receivables			—				11,794
Accounts and Other payable and accrued expenses			371,284				2,708,456
Retention payable			—				–
Taxes payable			716,371				(437,560	)
Prepaid land leases			(372,259	)			–
Operating lease			(118,850	)			(208,210	)
Net cash provided by (used in) by operating activities			3,258,010				(12,320,640	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property, plant and equipment			(9,860,142	)			(57,317,368	)
Net cash used in investing activities			(9,860,142	)			(57,317,368	)
CASH FLOWS USED IN FINANCING ACTIVITIES
Repayment of finance lease obligation			(264,976	)			(275,506	)
Net cash used in financing activities			(264,976	)			(275,506	)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			2,188,934				(3,866,852	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(4,678,174	)			(73,780,366	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD			100,301,986				178,998,935
CASH AND CASH EQUIVALENTS – END OF PERIOD		$	95,623,812			$	105,218,569
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the periods for:
Income taxes		$	—			$	—
Operating right-of-use assets obtained in exchange for lease obligations		$	—			$	8,241,818
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchase of Property, plant and equipment included in Payable and other accrued expense and Retention payable		$	1,251,136			$	7,116,066
Par value of common stock issued upon cashless exercise of options		$	–			$	379
Par value of restricted shares issued for services		$	235			$	–

WICHITA, Kan., Nov. 16, 2020 (GLOBE NEWSWIRE) — AgEagle Aerial Systems Inc. (NYSE American: UAVS) (“AgEagle” or the “Company”), an industry leading provider of unmanned aerial vehicles and advanced aerial imagery, data collection and analytics technologies, announced record financial results for the three and nine months ended September 30, 2020.

Key Financial Highlights

• Revenues for three-month reporting period ended September 30, 2020 increased significantly to a record of $750,000 compared to $42,000 for the comparable three month period in 2019. For the nine months ended September 30, 2020, revenues increased to a record of $1.2 million compared to $108,000 reported for the nine months in the prior year period. The notable increase in revenues was primarily driven by follow-on purchase orders for manufacturing and assembly of drones and related package delivery equipment for the Company’s largest customer.
• Gross profit margin on sales improved to 43% from 21% for the three months ended September 30, 2020 and 2019, respectively. Likewise, gross profit margin on sales for the comparable nine month reporting periods in 2020 and 2019 rose to 46% from 20%, respectively.
• Net loss for the three months ended September 30, 2020 totaled $579,000 compared to $563,000 in net loss for the same three months in 2019. For the nine months ended September 30, 2020, net loss was $2.2 million compared to $1.9 million in the prior year nine-month period. Overall, the increase in net losses were due to higher operating costs relating to the shifts in our long-term growth and business expansion strategies.
• After factoring non-cash accounting charges relating to our financing activities, the net loss attributable to our common stockholders improved to $579,000 from $604,000 for the three months ended September 30, 2020 and 2019, respectively. After factoring non-cash accounting charges for the comparable nine month reporting periods in 2020 and 2019, net loss attributable to the Company’s common stockholders was $11.3 million compared to $2.0 million, respectively.
• As of September 30, 2020, the Company’s balance sheet reflected cash of $24.7 million compared to $718,000 as of December 31, 2019. The Company had no long-term debt and total stockholders’ equity increased to $28.1 million compared to $4.3 million as of September 30, 2020 and December 31, 2019, respectively. The material strengthening of the balance sheet was largely due to the successful closing of equity financings completed in the first half of 2020. 

Commenting on the record results, AgEagle CEO Michael Drozd noted, “We are very pleased with the progress that AgEagle continues to make across each of our focused business segments. Among many key achievements in the second half of 2020, we booked significant revenue from our ecommerce client; our team has completed the relocation of our headquarters and manufacturing facilities from Neodesha to Wichita; and we have completed the redesign of our brand logo and launched a new corporate website. We have also continued to expand our team with experienced new talent, and we are aggressively pursuing and winning new customers and business partners, including Valqari and the Kansas Department of Transportation. Looking ahead, we will remain focused on driving revenue growth through marketing our contract manufacturing and assembly services, along with our innovative drone and agriculture solutions. Moreover, we will continue to evaluate potential strategic acquisitions that will further complement and strengthen our position as a recognized leader in The Drone Age™.”

To review the Company’s detailed financial results for the three and nine months ended September 30, 2020, please refer to our Form 10-Q filed with the U.S. Securities and Exchange Commission and accessible at www.sec.gov.

Corporate Update Webcast

The Company’s management will host a webcast today, November 16^th, beginning at 4:30 PM Eastern time to provide a corporate update and discuss recent operational highlights. The webcast will be broadcast live and available for replay via the link: https://www.webcaster4.com/Webcast/Page/2160/38229. If you encounter any difficulty connecting to the webcast, please contact Gateway Investor Relations at 949-574-3860.

About AgEagle Aerial Systems Inc.

Founded in 2010, Wichita-based AgEagle is one of the nation’s leading commercial drone technology, services and solutions providers.  We deliver the metrics, tools and strategies necessary to define and implement drone-enabled solutions that solve important problems for our valued customers. AgEagle’s key growth strategies are centered on three focused pursuits: 1) Contract Manufacturing: establishing AgEagle as the dominant commercial drone design, engineering, manufacturing, assembly and testing company in the United States; 2) Drone Solutions: establishing AgEagle as the world’s trusted source for turn-key drone delivery services and solutions; and 3) Ag Solutions: leveraging our reputation as one of the leading technology solutions providers to the Agriculture industry with best-in-class drones and data analytics for hemp and other commercial crops. For more information, please visit ageagle.com.

Forward-Looking Statements


This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from management’s current expectations include those risks and uncertainties relating to our competitive position, the industry environment, potential growth opportunities, and the effects of regulation and events outside of our control, such as natural disasters, wars or health epidemics. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

Contacts:

Investor Relations

Gateway Investor Relations

Sean Mansouri, CFA or Cody Cree
Phone: 949-574-3860
Email: [email protected]

Press/Media
Relations

Avaans Media

Tara Coomans or Kristen Hoff
Phone: 424-278-9199
Email: [email protected]