Financial Performance - Net sales for the three months ended September 30, 2022, were $2.263 million, a decrease of 56.3% compared to $5.184 million for the same period in 2021[8]. - Gross profit for the nine months ended September 30, 2022, was $2.084 million, down 29.1% from $2.936 million in the same period of 2021[8]. - The company reported a net loss of $1.389 million for the nine months ended September 30, 2022, compared to a net income of $1.465 million in the same period of 2021[8]. - Basic loss per common share for the three months ended September 30, 2022, was $(0.12), compared to $(0.14) for the same period in 2021[8]. - For the nine months ended September 30, 2022, the Company recorded a net loss from discontinued operations of $1,232,000, compared to none for the same period in 2021[28]. - The Company reported a cumulative net loss of approximately $24 million from inception to September 30, 2022[32]. Assets and Liabilities - As of September 30, 2022, total assets decreased to $16.314 million from $17.282 million as of December 31, 2021, representing a decline of approximately 5.6%[6]. - Total current liabilities decreased to $8.289 million as of September 30, 2022, from $10.371 million as of December 31, 2021, a reduction of 20.1%[6]. - The company’s accumulated deficit increased to $24.044 million as of September 30, 2022, compared to $22.655 million as of December 31, 2021[6]. - Cash and cash equivalents increased to $101,000 as of September 30, 2022, from $66,000 as of December 31, 2021, marking a growth of 53.0%[6]. - The term loan balance as of September 30, 2022, was $0.5 million, down from $0.6 million as of December 31, 2021[77]. Cash Flow and Financing Activities - Cash provided by operating activities was $1,187,000 for the nine months ended September 30, 2022, compared to cash used of $1,204,000 in 2021[9]. - Cash used in financing activities for the nine months ended September 30, 2022, was $1,031,000, an increase from $650,000 for the same period in 2021[95]. - Cash balances at September 30, 2022, were $101,000, down from $379,000 in the same period of 2021[97]. - The company incurred interest expense of $120,000 for Q3 2022, compared to $89,000 in Q3 2021, reflecting changes in the senior debt facility[91]. Inventory and Sales - As of September 30, 2022, total inventories increased to $9,162,000 from $7,876,000 as of December 31, 2021, representing a growth of approximately 16.3%[57]. - Revenues from foil balloons dropped significantly, with sales of $1,612,000 in Q3 2022 compared to $4,295,000 in Q3 2021, a decline of 62%[81]. - Customer A accounted for 49% of net sales in the three months ended September 30, 2022, generating $1,104,000, compared to 66% and $3,398,000 in the same period of 2021[58]. Operational Changes and 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 operating losses and external pressures[98]. - Management's plans to continue as a going concern include raising additional capital and focusing on the most profitable elements of the business[33]. - The financial statements indicate that the operating results for the three and six months ended September 30, 2022, are not necessarily indicative of future performance[14]. Equity and Stock - The company issued 170,000 shares of Series C Convertible Preferred Stock, raising $1,681,000[13]. - The carrying value of Series B Preferred Stock as of September 30, 2022, amounted to $1,817,000, which includes $270,000 in accrued dividends[47]. - The carrying value of Series C Preferred Stock as of September 30, 2022, amounted to $1,698,000, with the issuance generating a beneficial conversion feature of approximately $1.5 million[49]. Lease and Facility - The annual base rent for the leased Lake Barrington Facility is $500,000 for the first year, escalating to $652,386 in the last year of the lease[35]. - The Company sold its Lake Barrington Facility for $3,500,000, receiving $2,000,000 in cash and a $1,500,000 promissory note[100].
Yunhong Green CTI(YHGJ) - 2022 Q3 - Quarterly Report