Financial Performance - Net sales for Q1 2025 were approximately $4.80 million, a slight decrease of $92,000 or 1.9% compared to $4.89 million in Q1 2024[71] - Revenue from foil balloons increased to $4,234,000 in Q1 2025, up from $2,919,000 in Q1 2024, representing a 45% increase[72] - Revenue from film products rose to $427,000 in Q1 2025, compared to $305,000 in Q1 2024, marking a 40% increase[73] - Other revenues decreased significantly to $141,000 in Q1 2025 from $1,670,000 in Q1 2024, primarily due to the timing of spring product shipments[74] - Cost of sales for Q1 2025 was $3,936,000, slightly lower than $3,999,000 in Q1 2024, maintaining a gross margin of 18%[77] - General and administrative expenses decreased to $839,000 in Q1 2025 from $1,040,000 in Q1 2024, largely due to a $167,000 reduction in audit fees[78] Cash Flow and Liquidity - Net cash provided by operations was $970,000 in Q1 2025, compared to net cash used in operations of $767,000 in Q1 2024[79] - As of March 31, 2025, the company had cash balances of $172,000, an increase from $49,000 in the same period of 2024[82] - The term loan balance as of March 31, 2025, was $0.6 million, with a revolving line of credit balance of $5.6 million[68] - The Company's primary sources of liquidity are cash and cash equivalents, along with availability under the Credit Agreement[85] Going Concern - The Company faces substantial doubt about its ability to continue as a going concern for one year from the issuance of the consolidated financial statements[84] - Management's plans to ensure going concern include executing the business plan and exploring alternative funding sources[84] Seasonal Sales - Sales in the foil balloon product line are seasonal, with approximately 40% of sales occurring from December through March[86] Accounting Estimates - There have been no material changes to the critical accounting estimates since December 31, 2024[87]

Revenue and Sales Performance - In 2024, revenue breakdown by product lines: Novelty Products accounted for 64%, Flexible Film Products for 5%, and Balloon-inspired gifts and Other Products for 31%[20]. - The Company reported consolidated net sales of $17,953,000 for the year ended December 31, 2024, representing a 1% increase from $17,804,000 in 2023[122]. - Sales of foil balloons decreased by 3% to $11,510,000 in 2024 from $11,885,000 in 2023, attributed to normal fluctuations in order flow[123]. - Sales of film products decreased by 9% to $847,000 in 2024 from $927,000 in 2023, impacted by industry consolidation and competition[123]. - Sales of other products increased by 12% to $5,596,000 in 2024 from $4,992,000 in 2023, driven by larger holiday orders and new everyday offerings[124]. Product Development and Innovation - The company expanded its product offerings to include compostable materials aimed at replacing single-use plastics, with shareholder approval for a name change to include "Green" in August 2023[13]. - Management has focused on growth and profitability within core product lines, particularly foil balloons, while leveraging advancements in compostable materials from associated companies[22]. - The company aims to develop new products and improve existing ones through research and innovation within its core product categories[22]. - The company spent approximately $200,000 on research and development activities for both fiscal years ended December 31, 2024 and 2023[55]. Financial Position and Performance - The company experienced significant fluctuations in raw material costs, which have materially affected profitability[45]. - The price of helium, a key input for foil balloons, increased dramatically beginning February 2022, negatively impacting revenue by several million dollars from May 2022 through the end of 2023[66]. - Cost of sales decreased by 1.33% to $14,352,000 in 2024 compared to $14,546,000 in 2023, despite a slight increase in sales[125]. - General and administrative expenses increased by 13% to $3,396,000 in 2024 from $2,995,000 in 2023, primarily due to higher audit fees[126]. - The Company incurred net interest expense of $862,000 in 2024, up from $628,000 in 2023[128]. - Cash used in operating activities amounted to $1,274,000 in 2024, compared to $1,222,000 in 2023[129]. - The Company had a cumulative net loss of approximately $26 million as of December 31, 2024, with only $0.2 million in cash available[131]. Operational Challenges - The company has faced supply chain disruptions and inflationary pressures since 2021, affecting its ability to fulfill customer demands[62]. - The company has introduced automation features in production lines since 2022 to mitigate rising labor costs[57]. - The company is subject to competitive pressures from well-established manufacturers in the balloon and novelty industry, which may impact market share[51]. - The company has not identified any cybersecurity threats or incidents that have materially affected its business strategy or financial condition[77]. Corporate Governance and Management - The Board of Directors consists of five members, with three being independent according to NASDAQ standards[182]. - The Audit Committee met three times during 2024, focusing on financial statement discussions and oversight of independent auditors[191]. - The Compensation Committee met once in 2024 to review executive compensation and employee benefit plans[192]. - The company has made diversity a goal, moving from a 100% Caucasian, 100% male Board to three Asian directors, two of whom are female[197]. - The company is dependent on key personnel, and any loss could adversely affect its ability to implement its business plan[180]. Stock and Shareholder Information - The Company issued 5 million shares of common stock valued at $6.25 million as consideration for an asset acquisition, with a fair value of $4.05 million assigned to machinery and equipment[103]. - The Company has approximately 400 holders of record of its common stock as of December 31, 2024[89]. - The Company received a deficiency notice from NASDAQ in 2024 for failing to maintain the required $1 bid price, with a compliance deadline of April 21, 2025[90]. - The Company did not pay any cash dividends during 2024 or 2023 and has no plans to do so in the foreseeable future[90]. Executive Compensation - In 2024, the Chief Executive Officer Frank Cesario received total compensation of $335,500, which includes a salary of $250,000 and stock awards valued at $85,500[204]. - Jana M. Schwan, the new Chief Executive Officer, received total compensation of $297,657 in 2024, with a base salary of $239,500 and stock awards of $48,657[204]. - The Company adopted an Executive Compensation Recovery ("Clawback") Policy in 2023, allowing recovery of performance-based compensation under certain conditions[202]. - Mr. Cesario's employment was terminated in November 2024, while he remains a Director[206]. - Ms. Schwan's employment agreement includes a base salary of $275,000 and a performance-based bonus of $250,000[208].

Financial Performance - Total net sales for the three months ended September 30, 2024, were $2,540,000, an increase from $1,923,000 for the same period in 2023, representing a growth of 32.2%[6] - For the nine months ended September 30, 2024, net sales reached $11,788,000, compared to $11,033,000 in the prior year, indicating a year-over-year increase of 6.8%[6] - The company reported a gross profit of $(20,000) for the three months ended September 30, 2024, down from a gross profit of $20,000 in the same period of 2023[6] - The net loss for the three months ended September 30, 2024, was $(1,193,000), compared to a net loss of $(967,000) for the same period in 2023, representing a decline of 23.4%[6] - For the nine months ended September 30, 2024, Yunhong Green CTI reported a net loss of $2,182,000, compared to a net loss of $720,000 for the same period in 2023, indicating a significant increase in losses[8] Cash Flow and Liquidity - The company generated net cash provided by operating activities of $862,000 for the nine months ended September 30, 2024, contrasting with net cash used in operating activities of $442,000 in the prior year[8] - Cash and cash equivalents at the end of the period were $5,000, down from $64,000 at the end of September 2023, indicating a decrease in liquidity[8] - The company issued preferred stock, generating $500,000, while it repaid $1,000,000 in notes payable related to a party, leading to a net cash used in financing activities of $1,476,000[8] - Cash used in financing activities was $1,476,000 for the nine months ended September 30, 2024, compared to cash provided of $496,000 in 2023, primarily due to revolving debt changes[86] - As of September 30, 2024, the company had cash balances of $5,000, down from $64,000 as of September 30, 2023[87] Assets and Liabilities - Total current assets decreased to $10,408,000 as of September 30, 2024, from $13,019,000 as of December 31, 2023, a decline of 20.1%[4] - Total assets increased to $20,619,000 as of September 30, 2024, compared to $17,247,000 as of December 31, 2023, an increase of 19.3%[4] - Total liabilities decreased to $10,686,000 as of September 30, 2024, from $13,515,000 as of December 31, 2023, a reduction of 21.3%[4] - Stockholders' equity increased to $9,933,000 as of September 30, 2024, compared to $3,732,000 as of December 31, 2023, an increase of 166.5%[5] Expenses - Operating expenses for the three months ended September 30, 2024, totaled $971,000, compared to $849,000 for the same period in 2023, reflecting an increase of 14.4%[6] - General and administrative expenses increased to $751,000 for the three months ended September 30, 2024, from $677,000 in 2023, largely due to higher audit fees[80] - Selling, advertising, and marketing expenses rose to $220,000 for the three months ended September 30, 2024, compared to $172,000 in 2023, reflecting increased sales commissions and payroll costs[81] - Depreciation and amortization expenses were $181,000 for the nine months ended September 30, 2024, compared to $211,000 in the same period last year[8] - Equity compensation expense rose to $133,000 from $16,000, reflecting increased compensation costs[8] Customer Concentration - Customer A accounted for 68% of net sales for the three months ended September 30, 2024, with sales of $1.731 million, compared to 56% and $1.097 million for the same period in 2023[57] - The company’s top three customers represented 79% of sales in Q3 2024, up from 75% in Q3 2023[76] - For the nine months ended September 30, 2024, Customer B's net sales were $2,823,000, accounting for 24% of net sales, up from $2,559,000 or 23% in 2023[78] Financing and Debt - The company’s senior secured financing includes a revolving credit facility of up to $6 million and a term loan facility of $731,250[35] - The interest rate on the senior facilities is set at the prime rate plus 1.95% per annum, with the prime rate being 8.0% as of September 30, 2024[36] - The company has extended the maturity date of its senior facilities to September 30, 2025[37] - The company must maintain a minimum tangible net worth of at least $4 million under the terms of its senior facilities[39] - The term loan balance was $0.6 million, down from $0.7 million as of December 31, 2023, with a revolving line of credit balance of $4.062 million compared to $4.991 million[41] Operational Challenges - The company faces substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements due to various operational challenges[89] - The company has not commenced operations within its newly acquired subsidiary in China as of the reporting date[23] Inventory and Sales Composition - Total inventories as of September 30, 2024, amounted to $7.852 million, an increase from $7.791 million as of December 31, 2023, with raw materials at $1.197 million, work in process at $2.563 million, and finished goods at $4.092 million[56] - Foil balloons accounted for 91% of net sales in Q3 2024, generating $2,322,000, up 37% from $1,701,000 in Q3 2023[72] - Revenues from commercial films were $129,000 for Q3 2024, compared to $68,000 in Q3 2023, reflecting a 90% increase[74] - Other revenues increased to $2,690,000 for the nine months ended September 30, 2024, up 24% from $2,174,000 in the same period of 2023[75] Shareholder Actions - The Company issued 130,000 shares of Series E Convertible Preferred Stock in March 2024, raising gross proceeds of $1.3 million, and 70,000 shares of Series F Preferred for $0.7 million, both with an annual dividend rate of 8.5%[43][44] - The Company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock during 2023, eliminating both the note and deposit liabilities[45] - The Company recorded accrued dividends of $18,000 and $63,000 for the Series E Preferred for the three and nine months ended September 30, 2024, respectively[43]

Financial Performance - Net sales for the three months ended June 30, 2024, were $4,354,000, a 7.3% increase compared to $4,059,000 for the same period in 2023[6] - Gross profit for the six months ended June 30, 2024, was $1,588,000, compared to $1,641,000 for the same period in 2023, indicating a decrease of about 3.2%[6] - The company reported a net loss of $414,000 for the three months ended June 30, 2024, compared to a net loss of $149,000 for the same period in 2023[6] - For the six months ended June 30, 2024, the company reported a net loss of $989,000 compared to a net income of $247,000 for the same period in 2023[7] - The cost of sales for the six months ended June 30, 2024, was $7,660,000, representing 83% of sales, compared to 82% in the same period of 2023[54] Assets and Liabilities - Total assets increased to $21,625,000 as of June 30, 2024, up from $17,247,000 at December 31, 2023, representing a growth of approximately 25.5%[5] - Total current liabilities decreased to $7,450,000 as of June 30, 2024, down from $10,140,000 at December 31, 2023, a reduction of approximately 26.5%[5] - Cash and cash equivalents significantly decreased to $22,000 as of June 30, 2024, from $921,000 at December 31, 2023[5] - The company’s accumulated deficit increased to $(25,346,000) as of June 30, 2024, compared to $(24,357,000) at December 31, 2023[5] - The total stockholders' equity rose to $11,120,000 as of June 30, 2024, compared to $3,732,000 at December 31, 2023, reflecting a substantial increase of approximately 197.5%[5] Cash Flow and Financing - Cash flows from operating activities provided $108,000 in the first half of 2024, a significant improvement from a cash outflow of $1,361,000 in the prior year[7] - Financing activities resulted in a net cash outflow of $733,000 in the first half of 2024, compared to a net cash inflow of $1,409,000 in the same period of 2023[7] - The company reported cash payments for interest totaling $454,000 for the six months ended June 30, 2024, compared to $259,000 in the same period last year[7] - The balance of the Revolving Line of Credit as of June 30, 2024, was $4,788,000, compared to $4,991,000 as of December 31, 2023[27] - The Company has substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements due to insufficient cash resources[22] Stock and Equity - The company issued 5 million shares of common stock valued at $6.25 million in exchange for certain production assets acquired through its wholly-owned subsidiary in China[13] - The Company issued 130,000 shares of Series E Convertible Preferred Stock, resulting in gross proceeds of $1.3 million, and 70,000 shares of Series F Convertible Preferred Stock, resulting in gross proceeds of $0.7 million[28][29] - Holders of Series E and F Preferred Stocks are entitled to quarterly dividends at an annual rate of 8.5% of the stated value ($10 per share)[28][29] - The Company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock during 2023[30] - The company has not issued dividends from 2020 through 2024 and does not expect to do so in the foreseeable future[33] Operational Highlights - The company formed a new subsidiary, Yunhong Technology (Hubei) Co. Ltd., in Hubei Province, China, during the reporting period[13] - The company is in the process of creating a new subsidiary to supply biodegradable and compostable materials[40] - The company has satisfied performance conditions for 225,000 shares of restricted stock granted to the CEO, including achieving an EBITDA of $1 million and operating cash flow of $1.5 million[33] - Customer A accounted for 60% of net sales for the three months ended June 30, 2024, with sales of $2,655,000, while Customer B represented 24% with sales of $1,040,000[37] - The company reported that sales to the top three customers represented 87% of net sales in Q2 2024, up from 85% in Q2 2023[52] Expenses - Operating expenses for the three months ended June 30, 2024, totaled $863,000, an increase of 7.3% from $804,000 in the same period last year[6] - The company incurred interest expenses of $236,000 for the three months ended June 30, 2024, compared to $155,000 for the same period in 2023, marking an increase of about 52.3%[6] - General and administrative expenses increased to $1,698,000 for the six months ended June 30, 2024, from $1,617,000 in 2023[54] - The company’s depreciation and amortization expenses were $120,000 for the six months ended June 30, 2024, down from $151,000 in the same period of 2023[7] Revenue Breakdown - Foil balloons accounted for 75% of net sales in Q2 2024, with revenues increasing by 11% to $3,252,000 compared to $2,938,000 in Q2 2023[48] - Revenues from film products decreased by 71% to $171,000 in Q2 2024 from $589,000 in Q2 2023[48] - Other revenues increased by 75% to $931,000 in Q2 2024 from $532,000 in Q2 2023[50]

Financial Performance - Total net sales for the three months ended March 31, 2024, were $4,894,000, a decrease of 3.1% compared to $5,051,000 for the same period in 2023[5] - Gross profit for the first quarter of 2024 was $895,000, down 20.6% from $1,127,000 in the first quarter of 2023[5] - The company reported a net loss of $576,000 for the three months ended March 31, 2024, compared to a net income of $396,000 for the same period in 2023[5] - For the three months ended March 31, 2024, the net loss was $576,000 compared to a net income of $396,000 for the same period in 2023, representing a significant decline[6] - Revenues from foil balloons decreased by 16% to $2,919,000 in Q1 2024 from $3,474,000 in Q1 2023, attributed to timing of orders and shipments[51] - Revenues from film products increased by 243% to $305,000 in Q1 2024 from $89,000 in Q1 2023, indicating growth in this category[52] - Gross margin decreased to 18% in Q1 2024 from 22% in Q1 2023, impacted by lower sales volume and mix inefficiencies[55] Operating Expenses - Operating expenses increased to $1,248,000 in Q1 2024, compared to $1,115,000 in Q1 2023, representing an increase of 11.9%[5] - General and administrative expenses rose to $1,040,000 in Q1 2024 from $961,000 in Q1 2023, primarily due to increased professional service costs[56] - The company incurred cash payments for interest totaling $218,000, up from $118,000 in the previous year[6] - The depreciation and amortization expense decreased to $62,000 from $80,000 year-over-year, reflecting reduced asset usage[6] - The company reported a significant increase in equity compensation expense to $122,000 from $7,000 in the prior year, indicating higher employee-related costs[6] Assets and Liabilities - Total current assets decreased to $12,551,000 as of March 31, 2024, from $13,019,000 as of December 31, 2023, a decline of 3.6%[3] - Total liabilities decreased to $11,468,000 as of March 31, 2024, down from $13,515,000 as of December 31, 2023, a reduction of 15.2%[4] - Shareholders' equity increased to $5,278,000 as of March 31, 2024, compared to $3,732,000 as of December 31, 2023, an increase of 41.4%[4] - The company had cash and cash equivalents of $49,000 as of March 31, 2024, a significant decrease from $921,000 as of December 31, 2023[3] - Accounts receivable increased to $4,398,000 as of March 31, 2024, compared to $3,975,000 as of December 31, 2023, an increase of 10.6%[3] - As of March 31, 2024, total inventories amounted to $7,710,000, a decrease from $7,791,000 as of December 31, 2023[36] - The Company has a term loan balance of $0.7 million and a revolving line of credit balance of $5,556,000 as of March 31, 2024[48] Cash Flow - Cash flows used in operating activities were $767,000, an improvement from $1,369,000 in the prior year, indicating better cash management[6] - Cash used by operations was $767,000 in Q1 2024, an improvement from $1,369,000 in Q1 2023[57] - As of March 31, 2024, the company had cash balances of $49,000, down from $130,000 in the same period of 2023[59] Equity and Stock Issuance - Total preferred stock issuance amounted to $1,300,000, with $771,000 from Series E and $700,000 from Series F[7] - The Company amended its Articles of Incorporation in March 2024 to authorize the issuance of 130,000 shares of Series E Convertible Preferred Stock, resulting in gross proceeds of $1.3 million[27] - The issuance of Series E Preferred Stock allocated $0.8 million to convertible preferred stock and $0.5 million to warrants classified as Additional Paid-In Capital[27] - The Company issued 70,000 shares of Series F Preferred in March 2024, resulting in gross proceeds of $0.7 million[28] Compliance and Concerns - The Company has substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements[20] - The Company has been in compliance with the terms of its Senior Facilities since their inception in September 2021[22] - The Company has been in compliance with the Minimum Tangible Net Worth requirement of $4,000,000 as of March 31, 2024[47] - The company reported a material weakness in internal control over financial reporting as of March 31, 2024, due to insufficient accounting professionals[66] Customer Concentration - Customer A accounted for 46% of net sales for the three months ended March 31, 2024, generating $2,226,000 in sales, while Customer B contributed 35% with $1,710,000 in sales[37] - Sales to the top three customers represented 86% of consolidated net sales in Q1 2024, consistent with the same period in 2023[53] Future Plans and Initiatives - The Company plans to create a new subsidiary to supply biodegradable and compostable materials, reflecting its commitment to sustainability[44] - The Company acquired assets from Yunhong Environmental Protection Technology Co., Ltd. for $6,250,000, using 5 million shares of common stock[40] Miscellaneous - The weighted average number of shares outstanding for the first quarter of 2024 was 20,771,937, compared to 17,689,552 for the same period in 2023[5] - The balance of accumulated deficit earnings increased to $(24,933,000) as of March 31, 2024, compared to $(24,357,000) at the end of 2023[7] - The Company recorded raw materials inventory of $1,225,000 as of March 31, 2024, compared to $1,156,000 as of December 31, 2023[36] - The Company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock in February 2023[29] - The Company did not issue dividends from 2020 through 2024 and does not expect to do so in the foreseeable future, resulting in an estimated dividend yield of 0%[33] - The report includes interactive data files for the quarterly report on Form 10-Q for the quarter ended March 31, 2024, detailing consolidated financial statements[101] - The report was signed on September 25, 2024, by the Chief Executive Officer and Acting Chief Financial Officer[71][72]

Revenue and Sales Performance - In 2023, revenues from product lines were as follows: Novelty Products accounted for 66% of total revenues, Flexible Film Products for 5%, and Balloon-inspired gifts and Other Products for 29%[22]. - Consolidated net sales for the fiscal year ended December 31, 2023, were $17.8 million, a decrease of 1% from $18.0 million in 2022[118]. - Sales of foil balloons increased by 8% to $11.8 million in 2023, compared to $10.9 million in 2022[119]. - Sales of film products decreased by 54% to $928,000 in 2023, down from $2.0 million in 2022[120]. - The company has seen an enhanced impact of seasonality in sales, with increased order flow related to events and lower order flow for everyday items since 2022[142]. Product Development and Innovation - The company expanded its product offerings to include compostable materials aimed at replacing single-use plastics, leading to a name change to include "Green" and a new trading symbol "YHGJ" approved by shareholders in August 2023[14]. - The company aims to develop new products and improve existing ones through research and innovation within its core product categories[24]. - The company spent approximately $200,000 on research and development activities in both fiscal years ended December 31, 2023 and 2022[57]. - The company has been engaged in developing flexible film products for over 40 years and holds several patents related to these products, including specific films and zipper closures[15]. Financial Performance and Position - The company has a cumulative net loss of approximately $24 million from inception to December 31, 2023, and may require additional financing to fund future operations[130]. - Cash used in operating activities amounted to $1.1 million in 2023, compared to cash generated of $2.4 million in 2022[127]. - Cash provided by financing activities was $2.1 million in 2023, compared to cash used of $2.1 million in 2022[129]. - The company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock in February 2023[102]. - As of December 31, 2023, the term loan balance was $0.7 million, and the balance of the Revolving Line of Credit was $4,991,000, an increase from $2,878,000 in 2022[137]. Cost and Expense Management - Cost of sales decreased to $14.5 million in 2023 from $14.9 million in 2022, a reduction of 2%[122]. - General and administrative expenses decreased by 19% to $3.0 million in 2023 from $3.7 million in 2022[123]. - Marketing and advertising expenses increased by 32% to $531,000 in 2023, up from $402,000 in 2022[124]. - The company experienced significant fluctuations in the cost of raw materials, which materially affected profitability, particularly in the case of petroleum or natural gas-based films and resins[47]. Compliance and Regulatory Matters - The company is subject to various federal, state, and local laws regarding waste generation and believes it is in material compliance with applicable environmental regulations[60]. - The company has been in compliance with the covenant requiring a Minimum Tangible Net Worth of at least $4,000,000 since inception[135]. - Management concluded that the disclosure controls and procedures were not effective as of December 31, 2023, due to identified material weaknesses[163]. - The company has not maintained effective internal control over financial reporting as of December 31, 2023, due to identified deficiencies[167]. Corporate Governance and Management - The Board of Directors met three times during 2023, with no director absent for more than one meeting[187]. - The Audit Committee met once during 2023 to discuss the Company's financial statements and oversee financial risks[194]. - The Compensation Committee met twice in 2023 to review executive compensation and employee benefit plans[195]. - The Company adopted an Executive Compensation Recovery ("Clawback") Policy in 2023, allowing recovery of performance-based compensation under certain conditions[204]. Employee and Personnel Matters - As of December 31, 2023, the company had 57 full-time employees, with 29 in manufacturing or warehouse functions[58]. - The Company reported a total compensation of $289,400 for CEO Frank Cesario in 2023, a decrease from $338,077 in 2022[206]. - COO Jana Schwan received total compensation of $248,666 in 2023, compared to $254,410 in 2022[206]. - The company is dependent on key personnel for its future success, and any loss of these individuals could adversely affect its business plan[184]. Cybersecurity and Risk Management - The Company has implemented measures to manage cybersecurity risks, with oversight from the Board of Directors and the Audit and Compliance Committee[78]. - Management is responsible for identifying and managing exposure to cybersecurity threats, with a notification process in place for potentially material incidents[80]. Market and Competitive Landscape - The company has developed new distribution channels and sales relationships in the United States, Europe, Mexico, Latin America, and Australia over the past several years[24]. - Foil balloons remain buoyant when filled with helium for extended periods and are marketed as novelty items with printed designs and messages, appealing to the social expression industry[30].

Financial Data and Key Metrics Changes - The company reported a fourth quarter revenue increase of $1.2 million compared to the prior year, driven by improvements in foil balloons, commercial films, and balloon-inspired gifts [6] - Year-to-date sales for 2023 were $17.8 million, slightly down from $18 million in 2022, indicating a recovery from a third quarter deficit [7] - Gross margins improved to 18% in 2023 from 17% the previous year, with a notable increase to 24% in the fourth quarter of 2023 compared to 19% in the prior year [8] - Net income improved by $1.2 million for the full year 2023, and adjusted EBITDA increased by $1 million, with earnings per share moving from a loss of $0.22 to a loss of $0.01 [9] Business Line Data and Key Metrics Changes - The company identified a shift from everyday business to seasonal business, which is expected to enhance revenue streams [7] - Automation has been implemented with two manufacturing lines featuring robotic arms, leading to improved efficiency and reduced labor costs [10] Market Data and Key Metrics Changes - Helium pricing continues to negatively impact the marketplace, although the effect has diminished compared to the previous 18 months [8] Company Strategy and Development Direction - The company is focusing on expanding its manufacturing capabilities by acquiring a facility in Hubei, China, which will enhance its compostable material business [12] - The strategic initiative aims to strengthen connections within the Yunhong family of companies and support growth in both traditional and new material spaces [12] - The company is building inventory to support upcoming seasonal demand for Mother's Day, Father's Day, and graduation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the financial performance improvements in 2023 but acknowledged that there is still significant work to be done [9] - The company is committed to pushing operational efficiency and exploring new revenue streams [9] Other Important Information - The company has rebranded to reflect its new strategic direction towards sustainability and compostable materials [13] Q&A Session Summary - No questions were recorded during the Q&A session, and the management expressed anticipation for future discussions in 2024 [15][16]

Financial Performance - Net sales for Q3 2023 were $1,923,000, a decrease of 15.1% compared to $2,263,000 in Q3 2022[7] - Gross profit for the nine months ended September 30, 2023, was $1,661,000, down 20.4% from $2,084,000 in the same period of 2022[7] - The net loss for Q3 2023 was $967,000, slightly improved from a net loss of $969,000 in Q3 2022[7] - The company reported a basic loss per common share of $0.05 for Q3 2023, compared to a loss of $0.12 in Q3 2022[7] - For the nine months ended September 30, 2023, total net sales were $11,330,000, down 12% from $12,478,000 in the same period of 2022[71] - Cash used in operations during the nine months ended September 30, 2023, was $442,000, a decline from net cash provided by operations of $1,187,000 in the same period of 2022[81] Assets and Liabilities - Total current assets decreased to $9,936,000 as of September 30, 2023, from $10,478,000 at the end of 2022, reflecting a decline of 5.2%[6] - Total liabilities decreased to $11,345,000 as of September 30, 2023, down 9.5% from $12,536,000 at the end of 2022[6] - Total stockholders' equity increased to $2,926,000 as of September 30, 2023, from $2,746,000 at the end of 2022, reflecting a growth of 6.6%[6] - The company has a note payable to John H. Schwan amounting to $1.3 million as of September 30, 2023, with no payments made during 2023 or 2022[35] - The company has a minimum tangible net worth requirement of at least $4 million, which it believes it has complied with as of September 30, 2023[32] Operating Expenses - Operating expenses for the nine months ended September 30, 2023, totaled $2,768,000, a decrease of 12.6% compared to $3,166,000 in the same period of 2022[7] - General and administrative expenses decreased to $677,000 in Q3 2023 from $896,000 in Q3 2022, reflecting better cost control measures[78] Revenue Recognition and Sales - The company recognizes revenue at the point when products are transferred to customers, including shipping and handling charges[23] - Foil balloons accounted for 88% of net sales in Q3 2023, with revenues increasing by 6% to $1,701,000 compared to $1,612,000 in Q3 2022[70] - Film products saw a significant decline in sales, dropping 87% to $68,000 in Q3 2023 from $537,000 in Q3 2022[71] - Customer A accounted for 56% of net sales for the three months ended September 30, 2023, generating $1,097,000 in sales, compared to 49% and $1,104,000 for the same period in 2022[56] - The company’s top three customers accounted for 75% of sales in Q3 2023, down from 79% in Q3 2022[75] Capital and Financing - The company has extended its credit facility until September 30, 2025, maintaining a revolving credit facility of up to $6 million[30] - The company is focusing on raising additional capital through equity sales and borrowing to fund operating losses[27] - The company has a related party subordinated note of $1.3 million due on December 31, 2023, which it expects to resolve using cash and/or equity[27] - The company extended its senior facilities with the lender until September 30, 2025, with modified terms including an increased interest rate to Prime plus 7.82% per annum[66] Compliance and Legal Matters - The company incurred compliance failures with covenants until September 2021 but believes it has been in compliance with its new credit facility since then[28] - The company recorded a legal proceeding but does not expect it to have a material adverse effect on its financial condition or future results[54] Market Strategy and Product Development - The company is beginning to offer purchased compostable material solutions as part of its product line[13] - The company has begun to offer compostable material solutions intended for the North American market, indicating a strategy for market expansion[62] Going Concern - The company faces substantial doubt about its ability to continue as a going concern due to ongoing operational challenges and the need for adequate capital[85]

Financial Data and Key Metrics Changes - Year-to-date sales for 2023 were $11 million, down from $12.4 million in 2022, indicating a decline in revenue [9] - Gross margin decreased by 1.6% from 16.7% last year to 15.1% this year, attributed to reduced revenue volume [13] - The company reported a loss of $0.04 per share this year, an improvement from a loss of $0.28 per share last year [13] Business Line Data and Key Metrics Changes - Film products saw a significant drop in orders during Q3, lagging behind 2022 levels, while balloon-inspired gift items showed strong order growth [11][12] - The timing of shipments for Valentine's Day affected the comparison of year-to-date results, leading to a drop in the category despite increased overall order flow [12] Market Data and Key Metrics Changes - The helium supply issue that impacted the company in 2022 has been resolved, and helium pricing is slowly improving [10][19] - The company noted that two of its largest competitors filed for Chapter 11 bankruptcy in 2023, indicating a challenging competitive landscape [11] Company Strategy and Development Direction - The company has rebranded to Yunhong Green CTI Ltd. to emphasize its focus on biodegradable and compostable products [7] - Plans to enter the U.S. marketplace are underway, with product samples being shared and performance testing conducted [8] - The company is exploring automation in manufacturing to improve efficiency and reduce operating costs in the long term [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for Q4, traditionally the strongest quarter due to Valentine's Day shipments, despite challenges faced in Q3 [6][11] - The company is focused on maintaining spending discipline and finding ways to address cost challenges that have arisen in recent years [13][14] - Management highlighted the importance of celebrating special occasions and the role of their products in enhancing customer experiences [19] Other Important Information - The company has extended its credit line for two years until September 30, 2025, under similar terms [17] - Participation in the China International Import Expo 2023 is planned, showcasing both traditional products and new sustainable materials [18] Q&A Session Summary Question: Will anyone from the company attend the Yunhong conference in China? - Management confirmed that only Yunhong personnel would attend, with the company providing support materials for the conference [21] Question: Who was the second company mentioned in bankruptcy? - The second company is Pioneer, based in Wichita, Kansas, known for brands like Qualatex [22][23] Question: Is the company now the third largest producer in the U.S.? - Management confirmed that they are likely the third largest producer of foil balloons in the U.S. [24] Question: How will the company capitalize on competitors' weaknesses? - Management noted that while competitors are reorganizing, they see opportunities to enhance their product offerings and maintain continuous operations [26][27] Question: Are there plans for acquisitions using the newly authorized shares? - Management indicated that while more shares have been authorized, they have not been issued yet, and they are looking for strategic opportunities to leverage these shares for business development [28][30]

Financial Performance - Net sales for Q2 2023 were $4.059 million, a decrease of 8.1% compared to $4.418 million in Q2 2022[7] - Gross profit for the first half of 2023 was $1.641 million, down 10.9% from $1.842 million in the same period of 2022[7] - The company reported a net loss of $149,000 for Q2 2023, an improvement from a net loss of $399,000 in Q2 2022[7] - The company had a basic loss per common share of $0.01 for Q2 2023, compared to a loss of $0.10 in Q2 2022[7] - The company had a net income of $247,000 for the six months ended June 30, 2023[11] - For the three months ended June 30, 2023, net sales decreased by 8% to $4,059,000 compared to $4,418,000 for the same period in 2022[71] Assets and Liabilities - Total current assets increased to $11.134 million as of June 30, 2023, compared to $10.478 million at the end of 2022, reflecting a growth of 6.2%[5] - Total liabilities decreased to $11.738 million from $12.536 million at the end of 2022, a reduction of 6.4%[5] - The total stockholders' equity increased to $3.889 million as of June 30, 2023, from $2.746 million at the end of 2022, an increase of 41.5%[5] - Cash and cash equivalents at the end of Q2 2023 were $100,000, down from $146,000 at the end of 2022, representing a decrease of 31.5%[9] - The Company reported total inventories of $7,639,000 as of June 30, 2023, down from $8,325,000 as of December 31, 2022[56] Operating Expenses - Operating expenses for the first half of 2023 totaled $1.919 million, a decrease of 11.5% compared to $2.167 million in the same period of 2022[7] - General and administrative expenses decreased to $656,000 for Q2 2023 from $998,000 in Q2 2022, attributed to higher audit fees in early 2023[79] - Interest expense increased to $155,000 for Q2 2023 from $109,000 in Q2 2022 due to market rate increases[81] Cash Flow - The company reported a net cash used in operating activities of $1.361 million for the first half of 2023, compared to net cash provided of $303,000 in the same period of 2022[9] - Net cash used in operations for the six months ended June 30, 2023, was $1,361,000, compared to net cash provided by operations of $303,000 in the same period of 2022[82] - The Company had cash balances of $100,000 as of June 30, 2023, compared to $54,000 for the same period in 2022[85] Debt and Financing - As of June 30, 2023, the term loan balance was $0.5 million, with the Revolving Line of Credit balance at $4.288 million, an increase from $2.878 million as of December 31, 2022[34] - The Company entered into a loan agreement providing for a revolving credit facility of up to $6 million and a term loan facility of $0.7 million, secured by substantially all assets[29] - The Company is currently working on securing a replacement credit facility before the current facility expires on September 30, 2023[27] - The Company faces substantial doubt about its ability to continue as a going concern due to potential capital access issues and ongoing operational impacts from inflation and supply chain constraints[87] Revenue Recognition - The company recognizes revenue at the point when products are transferred to customers, with shipping and handling charges included in net sales[22] Stock and Equity - The total shares of common stock outstanding as of June 30, 2023, were 16,102,749[11] - The Company issued 884,000 shares of common stock for notes payable and investor deposits during the reporting period[11] - The Company issued 400,000 shares of common stock to LF International, generating approximately $1 million in proceeds to reduce bank debt[38] - The Series A Preferred Stock generated a beneficial conversion feature valued at approximately $2.5 million, recognized as a discount on the Series A Preferred[39] - The Series B Preferred Stock was converted into approximately 1.9 million shares of common stock on February 1, 2023, with a carrying value of $1.851 million as of December 31, 2022[40] - The Company converted approximately $0.9 million of liabilities into approximately 1.8 million shares of common stock in February 2023[44] Customer Concentration - Customer A accounted for 56% of net sales for the three months ended June 30, 2023, compared to 41% for the same period in 2022[57] - Sales to the top three customers represented 85% of total sales in Q2 2023, up from 83% in Q2 2022[76] Compliance and Governance - The Company has faced compliance failures with covenants until September 2021 but believes it has been in compliance with the new credit facility since then[27] - The Company is facing substantial doubt about its ability to continue as a going concern for one year from the issuance of the consolidated financial statements due to operating losses and challenges in obtaining adequate capital[26]