Entry into a Material Definitive



As previously disclosed on a Current Report on Form 8-K of Yunhong CTI Ltd. (formerly CTI Industries Corporation) (the Company), on January 3, 2020, the Company entered into a stock purchase agreement (the Purchase Agreement), pursuant to which the Company agreed to issue and sell, and LF International Pte. Ltd. (the Investor), agreed to purchase, up to 500,000 shares of the Companys newly created Series A Convertible Preferred Stock (Series A Preferred), with each share of Series A Preferred initially convertible into ten shares of the Companys common stock (Common Stock), at a purchase price of $10.00 per share, for aggregate gross proceeds of $5,000,000 (the Offering). On January 13, 2020, the Company conducted its first closing of the Offering, resulting in aggregat e gross proceeds of $2,500,000.



The Purchase Agreement contemplates a second closing for the purchase and sale of an additional 250,000 shares of Series A Preferred (the Second Closing), which is subject to certain closing conditions. However, as previously disclosed on a Current Report on Form 8-K of the Company, on February 24, 2020, to permit an interim closing prior to the satisfaction of the relevant closing conditions to, and the consummation of, the Second Closing, the Company and the Investor entered into an amendment to the Purchase Agreement (the Purchase Agreement Amendment), pursuant to which the Company agreed to issue and sell, and the Investor agreed to purchase, 70,000 shares of Series A Preferred at a purchase price of $10.00 per share, for aggregate gross proceeds of $700,000 (the Interim Closing). As an inducement to enter into the Purchase Agreement Amendment, the Company i) granted to the Investor the right to appoint and elect a second member to the Companys Board of Directors and ii) agreed to issue to the Investor 140,000 shares of Common Stock. As previously disclosed on a Current Report on Form 8-K of the Company, on February 28, 2020, the Company and the Investor closed on the Interim Closing.



On April 13, 2020, to permit an additional interim closing prior to the satisfaction of the relevant closing conditions to, and the consummation of, the Second Closing, the Company and the Investor entered into a second amendment to the Purchase Agreement (the Second Purchase Agreement Amendment), pursuant to which the Company agreed to issue and sell, and the Investor agreed to purchase, 130,000 shares of Series A Preferred at a purchase price of $10.00 per share, for aggregate gross proceeds of $1,300,000 (the Additional Interim Closing). As an inducement to enter into the Second Purchase Agreement Amendment, the Company i) granted to the Investor the right to appoint and elect a third member to the Companys Board of Directors at the Companys next annual meeting of stockholders and ii) agreed to issue to the Investor 260,000 shares of Common Stock. On April 13, 2020, the Company and the Investor closed on the Additional Interim Closing.



The Company paid the placement agent for the Offering a fee equal to ten percent (10%) of the gross proceeds from the Additional Interim Closing and warrants to purchase shares of Common Stock in an amount equal to ten percent (10%) of the Common Stock issuable upon conversion of the Series A Preferred sold in the Additional Interim Closing at an exercise price of $1.00 per share. Upon the contemplated Second Closing of the Offering, which is subject to certain closing conditions, the placement agent shall receive compensation on the same economic terms as the first closing.



In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.



The foregoing description of the Second Purchase Agreement Amendment is only a summary and is qualified in its entirety by reference to the full text of the Second Purchase Agreement Amendment attached as

Exhibit

10.1

hereto.



Item 3.02 Unregistered Sales of Equity Securities.



The information set forth in Item 1.01 is incorporated by reference herein.






I

tem 9.01




Financial Statements And Exhibits

.






(d) Exhibits



The exhibits listed below are furnished as Exhibits to this Current Report on Form 8-K.






Exhibit No.







Description






10.1







Second Purchase Agreement Amendment




















SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



Date: April 17, 2020









YUNHONG CTI LTD

.

















By:




/s/ Frank Cesario












Frank Cesario












President, Chief Executive Officer and Chief Financial Officer














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