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 (the Board) 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 Board of the Company 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.



On June 5, 2020, the Company and the Investor conducted the Second Closing, as modified by the Interim Closing and Additional Interim Closing (the Final Closing), and closed on the issuance of 50,000 shares of Series A Preferred at a purchase price of $10.00 per share to the Investor for aggregate gross proceeds of $500,000 to the Company.



The Company paid the placement agent for the Offering a fee equal to ten percent (10%) of the gross proceeds from the Final 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 Final Closing at an exercise price of $1.00 per share.



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.



Item 3.02 Unregistered Sales of Equity Securities.



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



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.



On June 1, 2020, Steve Merrick resigned as a director and Secretary of the Company. In addition, John Schwan resigned as a director and Chairman of the Board of the Company. The Board subsequently appointed Frank Cesario, the Companys President, Chief Executive Officer and Chief Financial Officer as its new Secretary and Yubao Li, a Company director, as its new Chairman.


















Since November 20, 2017, Mr. Cesario has served as the Companys Chief Financial Officer. Mr. Cesario was appointed as a director of the Company on December 31, 2019 and was appointed as the Companys President and Chief Executive Officer on January 2, 2020. Prior to joining the Company, Mr. Cesario served in similar roles with Nanophase Technologies Corporation and ISCO International, Inc., publicly traded global suppliers of advanced materials and telecommunications equipment, respectively, as well as Turf Ventures LLC, a privately held chemicals distributor. He began his career with KPMG Peat Marwick and then served in progressively responsible finance positions within Material Sciences Corporation and Outokumpu Copper, Inc. Mr. Cesario holds an MBA (Finance) from DePaul University and a B.S. (Accountancy) from the University of Illinois, and is a registered CPA in the State of Illinois.



There are no family relationships between Mr. Cesario and any director or executive officer of the Company.



Mr. Li has served as a Director of the Company since January 13, 2020 and was elected as Chairman of the Board on June 1, 2020. Mr. Li has been serving as the chairman of Yunhong International since its inception in January 2019 and served as its chief executive officer from January 2019 to September 2019. Mr. Li has been serving as the president of Hubei Academy of Science and Technology since July 2018, one of the key multi-disciplinary universities in Hubei Province, China. Since June 2018, Mr. Li has been serving as the director of Photoproteins Research Centre at Chinas Academy of Management Science, a research institute situated in Beijing, China where he supports innovation by defining the research focus of the institute. Mr. Li has also been serving as director and/or officer of several other entities, including as the executive director and general manager of Hubei Teruiga Energy Co., Ltd, a new energy technology company, since November 2017, the executive director of Hubei Yuntong Energy Co., Ltd., a solar power and agriculture company, since April 2016, the executive director and general manager of Hubei Yun Hong photovoltaic Co., Ltd., a solar power and agriculture company, since May 2016, the president of Hubei Yunhong Deren Tourism Co., Ltd., a tourism project developer, since May 2016 and the president of Yunhong Group Holdings Co., Ltd., a company engaged in the business of solar power construction and solar photovoltaic power generation, since 2013. In addition, in 2013, Mr. Li founded China Hubei Yunhong Energy Group Co., Ltd., a Chinese nutrition company operating in China and abroad, and he currently serves as the chairman of its board of directors. Mr. Li received his EMBA in Investment, Financing and Capital Strategy from Peking University.



There are no family relationships between Mr. Li and any director or executive officer of the Company.



On June 1, 2020, to fill the Board vacancies caused by Mr. Merrick and Mr. Schwans resignations, the Board appointed Wan Zhang and Yaping Zhang as directors of the Company.



Ms. Wan Zhang is currently a senior manager at Taikang Bybo Dental Group, where she is responsible for the groups strategic planning and operations supervision. Prior to that, Ms. Zhang served as a senior manager at PKU Healthcare Group in Beijing, China. From 2014 to 2018, Ms. Zhang was a manager of the strategic investment department and board secretary at Capital Healthcare Group, a healthcare investment holding conglomerate in Beijing, China (Capital Healthcare). She also worked as the board secretary and assistant to the director of operations at Capital Healthcares subsidiary, Aiyuhua Womens and Childrens Hospital in Beijing, China. Ms. Zhangs previously served as an assistant board secretary at Tsit Wing Group, a food and beverages services provider in Hong Kong. Ms. Zhang began her career with Albert YK Lau & Co (Certified Public Accountants), Hong Kong, as an auditor and board secretary. Ms. Zhang graduated from Wuhan University with a Bachelor of Science degree in Biology and Lingnan University with a Masters degree in International Banking and Finance.



Ms. Yaping Zhang has served as the board secretary of Yunhong Group Holdings Co., Ltd., a company engaged in the business of solar power construction and solar photovoltaic power generation, since 2017. Prior to that, she served as the assistant chairman of Hubei Yunhong Energy Group Holdings Co., Ltd., a Chinese nutrition company operating in China and abroad. Yaping Zhang has a Masters Degree in Literature from Wuhan University.



There are no family relationships between Wan Zhang, Yaping Zhang and any director or executive officer of the Company.

















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: June 5, 2020









YUNHONG CTI LTD.

















By:




/s/ Frank Cesario












Frank Cesario












President, Chief Executive Officer, Chief Financial Officer and Secretary














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