Together with First Closing of $2.5M, Gross Proceeds from this investor totals $4.5M
LAKE BARRINGTON, IL / ACCESSWIRE / April 21, 2020 / Yunhong CTI Ltd. (NASDAQ:CTIB) ("Yunhong CTI" or the "Company"), a leading manufacturer of custom film products, foil and latex novelty balloons, and flexible packaging products, announced today the release of US$1,300,000 in the next stage of investment. The net proceeds will be used by the Company for working capital.
On January 3, 2020, Yunhong CTI Ltd. (formerly known as CTI Industries Corporation, the "Company") entered into an agreement to sell up to $5 million of convertible preferred stock to a new strategic investor, LF International Pte. Ltd., ("LF") a Singapore private limited company which is controlled by Mr. Yubao Li. As a condition of the fist closing of the Offering, LF received the right to appoint one member to the Company's board of directors. Mr. Yubao Li was appointed to the Company's board of directors, effective January 13, 2020. CTI concluded a successful first closing of its stock purchase agreement with LF in the amount of $2.5 million on January 13, 2020, while the balance of $2.5 million would close after certain conditions were met. The most notable conditions were a change in the Company's name from CTI Industries Corporation to Yunhong CTI Ltd., as well as updated filings with the SEC including the 2019 Annual Report on Form 10-K. The name change is complete, but the SEC filing process is ongoing. This early release was the result of agreement between the parties, including granting to LF the right to appoint and elect a third member to the Company's board of directors at the Company's next annual meeting of stockholders, or May 15, 2020 whichever is earlier and the Company granted the investor certain shares of Company common stock.
"The continuing progress of our company with its business development and growth strategies, combined with the streamlining of our operations and significant deleveraging, have been encouraging and, in my view, merit further investment in the company," said Yubao Li, Director of Yunhong CTI.
"It would be easy for any investor to hit the pause button due to economic challenges related to combating the COVID issue," said Frank Cesario, President and CEO of Yunhong CTI. "We are most fortunate to have an investor with a long-term view, willing to support the company despite these market conditions. We look forward to deeper involvement with our new family."
On April 13, 2020, the parties completed the Additional Interim Closing by which the Company issued to LF 130,000 shares of Series A Preferred Stock and 260,000 shares of Common Stock. Each share of Series A Preferred Stock of the Company is initially convertible into ten shares of the Company's common stock, subject to certain conditions, and has no expiration date. Mr. Li has 95% voting and dispositive control over the shares held by the LF and may be deemed the beneficial owner of such Series A Preferred Stock and Common Stock.
The Series A Preferred Stock is convertible at any time, except that it may not be converted into shares of Common Stock to the extent such conversion would result in the holder beneficially owning more than 4.99% ("Maximum Percentage") of the Company's outstanding Common Stock.
About Yunhong CTI Ltd.
Yunhong CTI Ltd. is one of the leading manufacturers and marketers of foil balloons and produces laminated and printed films for commercial uses. Yunhong CTI also distributes Candy Blossoms and other gift items and markets its products throughout the United States and in several other countries. For more information about our business, visit our corporate website at www.ctiindustries.com.
Statements made in this release that are not historical facts are "forward-looking" statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties and are subject to change at any time. These "forward-looking" statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "goal," "anticipate," "believe," "estimate," "predict," "potential," "continue," or similar expressions. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. We cannot anticipate the duration of increased tariffs between the United States and other countries, particularly China. We do not know whether we will be successful in passing such additional costs through to customers. The COVID-19 pandemic has had a negative impact on our operations, and we do not yet know the depth or duration of that disruption. Our future plans anticipate the successful completion of the financing described above. Any failure to do so would have a negative impact on our financial condition. More information on factors that could affect CTI's business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Yunhong CTI Ltd.
Chief Financial Officer and Chief Executive Officer
SOURCE: Yunhong CTI Ltd.
View source version on accesswire.com: